<SUBMISSION>
<ACCESSION-NUMBER>0001137171-03-000032
<TYPE>6-K
<PUBLIC-DOCUMENT-COUNT>5
<PERIOD>20030131
<FILING-DATE>20030203
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>TRANSALTA CORP
<CIK>0001144800
<ASSIGNED-SIC>4911
<IRS-NUMBER>000000000
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>6-K
<ACT>34
<FILE-NUMBER>001-15214
<FILM-NUMBER>03537129
</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>tac6k.htm
<DESCRIPTION>FOURTH QUARTER FINANCIAL STATEMENTS AND PRESS RELEASE DATED JANUARY 31
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
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<HEAD>
<TITLE>#564426 v1 - gj TransAlta 6-K October 2001</TITLE>
<META NAME="author" CONTENT="LW">
<META NAME="date" CONTENT="02/03/2003">
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<BODY>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:28pt; padding:0pt; text-indent:0pt; line-height:16pt; font-size:14pt; color:#000000" align=center><B>FORM 6-K<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>
Washington, D.C. 20549</B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:28pt; padding:0pt; text-indent:0pt; line-height:16pt; font-size:14pt; color:#000000" align=center><B>Report of Foreign Private Issuer</B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:36pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=center><B>Pursuant to Rule 13a-16 or 15d-16 <BR>
of the Securities Exchange Act of 1934</B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:24pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">For the month of January, 2003</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=center><U>TRANSALTA CORPORATION</U></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=center>(Translation of registrant's name into English)</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:12pt; color:#000000" align=center><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:13pt; font-size:11pt; color:#000000" align=center><U>110-12<SUP>th</SUP> Avenue S.W., Box 1900, Station &#147;M&#148;, Calgary, Alberta, T2P 2M1</U></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=center>(Address of principal executive offices)</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=center>Form 20-F____ &nbsp;&nbsp;Form 40-F &nbsp;&nbsp;&nbsp;<U>X &nbsp;&nbsp;&nbsp;&nbsp;</U></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">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>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=center>Yes ..... &nbsp;No ..X...</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding:0pt; text-indent:0pt; font-size:12pt; color:#000000">If &#147;Yes&#148; is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): &nbsp;82-________ </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:12pt; color:#000000">&nbsp;</P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt; color:#000000" noshade size=1.333>
&nbsp;
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:40.5pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=center><B>Evaluation of Disclosure Controls and Procedures</B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:40.5pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">TransAlta has designed disclosure controls and procedures to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Chief Executive Officer and Chief Financial Officer by others within the Company, including its consolidated subsidiaries, on a regular basis, in particular during the period in which its Current Reports on Form 6-K relating to quarterly financial results are being prepared. &nbsp;The Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the disclosure controls and procedures as of a date within 90 days of the date of this report. &nbsp;Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded, as of that evaluation date, that the Company's disclosure controls and procedures were effective to ensure that material information relating to the Company, including its consolidated subsidiaries, was made known to them by others within those entities during the period in which this report was being prepared. &nbsp;&nbsp;There have been no significant changes in the internal controls or in other factors that could significantly affect internal controls subsequent to the date of the most recent evaluation by the Chief Executive Officer and Chief Financial Officer, including any corrective action with regard to significant deficiencies and material weaknesses.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-14pt; padding-left:58.5pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:-18pt; line-height:14pt; font-size:12pt; color:#000000"><B>&#8226;</B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:58.5pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; font-size:12pt; color:#000000"><B><BR></B></P>
<BR>
<BR>
<BR>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:12pt; color:#000000"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt; color:#000000" noshade size=1.333>
&nbsp;
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-14pt; padding-left:58.5pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:-18pt; line-height:14pt; font-size:12pt; color:#000000"><B>&#8226;</B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:58.5pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000"><B>EXHIBITS</B></P>
<TABLE style="margin-left:0pt"><TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=97.2><P style="margin-left:0pt; margin-top:0pt; margin-right:0pt; margin-bottom:12pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">Exhibit 1</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=541.2><P style="margin-left:0pt; margin-top:0pt; margin-right:0pt; margin-bottom:12pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">Press release dated January 31, 2003.</P>
</TD></TR>
<TR><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=97.2><P style="margin-left:0pt; margin-top:0pt; margin-right:0pt; margin-bottom:12pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">Exhibit 2</P>
</TD><TD style="padding-left:7.2pt; padding-top:0pt; padding-right:7.2pt; padding-bottom:0pt" align=left valign=top width=541.2><P style="margin-left:0pt; margin-top:0pt; margin-right:0pt; margin-bottom:12pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">Quarterly report for the three-month period ended December 31, 2002, which includes Management's Discussion and Analysis and consolidated financials statements.</P>
</TD></TR>
</TABLE>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding:0pt; text-indent:0pt; font-size:12pt; color:#000000"><BR></P>
<BR>
<BR>
<BR>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt; color:#000000" noshade size=1.333>
<br>
<br>
<p style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="center"><img src="tacpr004.jpg" alt="[tacpr004.jpg]" align="middle" width="694" height="104"></p>
<P>
<B><FONT size=4 face="serif">TransAlta announces 2002 results and declares dividend </FONT></B>
</P>
<P>
<FONT size=2 face="serif">CALGARY, Alberta (Jan. 31, 2002) - TransAlta Corporation (TSX: TA; NYSE:
TAC) today announced 2002 net earnings of $189.9 million ($1.12 per share) versus $214.6 million ($1.27 per share) in 2001. This reflects a one-time gain of $120.0 million ($0.71 per share) from the sale of the Transmission business in the second quarter, partially offset by the impact from one-time events announced in the fourth quarter:</FONT>
</P>
<UL>
<LI><FONT size=2 face="serif">Phased decommissioning of TransAlta's 569-megawatt (MW) coal-fired Wabamun power plant, with unit three removed from service on Nov. 29, 2002 and a pre-tax impairment charge of $110.0 million;</FONT><BR></LI>
<LI><FONT size=2 face="serif">Advancement of 2003 maintenance on Alberta thermal facilities into fourth quarter 2002, reducing pre-tax earnings by $27.7 million; and</FONT><BR></LI>
<LI><FONT size=2 face="serif">Cancellation of orders for four gas turbines, resulting in a pre-tax cancellation charge of $42.5 million.</FONT><BR></LI>
</UL>
<P>
<FONT size=2 face="serif">Fourth quarter 2002 had a net loss applicable to common shareholders of $54.3 million (loss of $0.32 per share), compared to net earnings of $46.5 million ($0.27 per share) in fourth quarter 2001. The fourth quarter loss from continuing operations applicable to common shareholders was $64.3 million (loss of $0.38 per share), down from net earnings of $33.2 million ($0.19 per share) in the same quarter of the previous year.</FONT>
</P>
<P>
<FONT size=2 face="serif">&quot;TransAlta's availability, production and cash flow performed very well in what continued to be difficult market conditions," said Steve Snyder, TransAlta's President and CEO. "We made some tough decisions in the fourth quarter that we believe will benefit the company in the future, including the development of a more proactive maintenance program in Alberta." </FONT>
</P>
<P>
<FONT size=2 face="serif">Revenue for the fourth quarter increased by $71.1 million over the same period in 2001, reflecting increased production from the Centralia plant, increased long-term contracted prices for electricity generation and higher Energy Marketing revenues. Plant availability was 87 per cent, down from 90 per cent in fourth quarter 2001 due to the accelerated maintenance in Alberta and an unplanned Wabamun unit three outage. Production was up 966 megawatt-hours (MWh) to 12,545 MWh, due to improved availability of the Centralia plant and incremental production from new power plants, and partially offset by lost production resulting from the accelerated Alberta maintenance. </FONT>
</P>
<P>
<FONT size=2 face="serif">Cash from operating activities including changes in working capital was $189.5 million, compared to $131.7 million in fourth quarter 2001. This increase was mainly due to lower working capital requirements, partially offset by lower earnings. </FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD colspan=5 width="47%"><B><FONT size=2 face="serif">TransAlta consolidated financial highlights</FONT></B></TD>
   <TD width="6%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="5%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=5><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="38%">&nbsp;&nbsp;&nbsp;<I><FONT size=1 face="serif">(In millions except per share amounts)</FONT></I></TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" colspan=9 width="24%"><I><FONT size=2 face="serif">3 months ended December 31</FONT></I></TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD colspan=7 width="23%"><I><FONT size=2 face="serif">Year ended December 31</FONT></I></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="38%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD colspan=3 width="8%"><FONT size=2 face="serif">2002</FONT></TD>
   <TD width="6%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" colspan=3 width="7%"><FONT size=2 face="serif">2001</FONT></TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD colspan=3 width="9%"><FONT size=2 face="serif">2002</FONT></TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" colspan=3 width="9%"><FONT size=2 face="serif">2001</FONT></TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD colspan=3><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD colspan=3><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD colspan=3><HR noshade size=1></TD>
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   <TD>&nbsp;</TD>
   <TD colspan=3><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="38%">&nbsp;</TD>
   <TD colspan=2 width="7%"><FONT size=1 face="serif">Amount</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD colspan=2 width="7%"><FONT size=1 face="serif">Per share</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD colspan=2 width="6%"><FONT size=1 face="serif">Amount</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD colspan=2 width="5%"><FONT size=1 face="serif">Per share</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD colspan=2 width="8%"><FONT size=1 face="serif">Amount</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD colspan=2 width="5%"><FONT size=1 face="serif">Per share</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD colspan=2 width="8%"><FONT size=1 face="serif">Amount</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD colspan=2 width="5%"><FONT size=1 face="serif">Per share</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD colspan=2><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="38%">&nbsp;&nbsp;&nbsp;<FONT size=1 face="serif">Revenue from continuing operations*</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD width="6%"><FONT size=2 face="serif">517.6</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="6%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="5%"><FONT size=2 face="serif">434.4</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="7%"><FONT size=2 face="serif">1,723.9</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="7%"><FONT size=2 face="serif">2,319.4</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="38%">&nbsp;&nbsp;&nbsp;<FONT size=1 face="serif">Net earnings (loss) from continuing</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD width="6%"><FONT size=2 face="serif">(64.3)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD width="6%"><FONT size=2 face="serif">(0.38)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="5%"><FONT size=2 face="serif">33.2</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD width="4%"><FONT size=2 face="serif">0.19</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="7%"><FONT size=2 face="serif">57.1</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="4%"><FONT size=2 face="serif">0.34</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="7%"><FONT size=2 face="serif">169.5</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD width="4%"><FONT size=2 face="serif">1.00</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="38%">&nbsp;&nbsp;&nbsp;<FONT size=1 face="serif">operations**</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="6%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="6%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="5%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="7%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="38%">&nbsp;&nbsp;&nbsp;<FONT size=1 face="serif">Discontinued operations</FONT></TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="6%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="6%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="5%"><FONT size=2 face="serif">13.3</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD width="4%"><FONT size=2 face="serif">0.08</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="7%"><FONT size=2 face="serif">12.8</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="4%"><FONT size=2 face="serif">0.07</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="7%"><FONT size=2 face="serif">45.1</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD width="4%"><FONT size=2 face="serif">0.27</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD width="38%">&nbsp;&nbsp;&nbsp;<FONT size=1 face="serif">Gain on sale</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD width="6%"><FONT size=2 face="serif">10.0</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD width="6%"><FONT size=2 face="serif">0.06</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="5%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="7%"><FONT size=2 face="serif">120.0</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="4%"><FONT size=2 face="serif">0.71</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD align="right" width="7%">-</TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">-</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="38%">&nbsp;&nbsp;&nbsp;<FONT size=1 face="serif">Net earnings (loss)**</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD width="6%"><FONT size=2 face="serif">(54.3)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD width="6%"><FONT size=2 face="serif">(0.32)</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="5%"><FONT size=2 face="serif">46.5</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD width="4%"><FONT size=2 face="serif">0.27</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="7%"><FONT size=2 face="serif">189.9</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="center" width="4%"><FONT size=2 face="serif">1.12</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="7%"><FONT size=2 face="serif">214.6</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD width="4%"><FONT size=2 face="serif">1.27</FONT></TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
</TR>
<TR>
   <TD width="38%">&nbsp;&nbsp;&nbsp;<FONT size=1 face="serif">Cash flow from operating activities</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD width="6%"><FONT size=2 face="serif">189.5</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="6%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="right" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="5%"><FONT size=2 face="serif">131.7</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="7%"><FONT size=2 face="serif">437.7</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
   <TD align="center" width="1%"><FONT size=2 face="serif">$</FONT></TD>
   <TD align="right" width="7%"><FONT size=2 face="serif">715.6</FONT></TD>
   <TD width="2%">&nbsp;</TD>
   <TD width="1%">&nbsp;</TD>
   <TD width="4%">&nbsp;</TD>
   <TD width="2%">&nbsp;</TD>
</TR>
<TR>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD><HR noshade size=1></TD>
   <TD><HR noshade size=1></TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
   <TD>&nbsp;</TD>
</TR>
</TABLE><TABLE>
<TR>
   <TD valign="top" width="5%"><FONT size=1 face="serif">*</FONT><BR>&nbsp;&nbsp;</TD>
   <TD valign="top"><FONT size=1 face="serif">Trading revenues are now being reported on a net basis</FONT><BR></TD>
</TR>
<TR>
   <TD valign="top" width="5%"><FONT size=1 face="serif">**</FONT><BR>&nbsp;&nbsp;</TD>
   <TD valign="top"><FONT size=1 face="serif">Applicable to common shareholders, net of preferred securities distributions</FONT>   </TD>
</TR>
</TABLE>
<p style="margin-left:0pt; margin-top:2.65pt; margin-bottom:0.65pt; padding-left:18pt; padding-top:0pt; padding-right:18pt; padding-bottom:0pt; text-indent:0pt; line-height:10pt; font-size:8pt; color:#000000" align="center">&nbsp;</p>
<p style="margin-left:0pt; margin-top:2.65pt; margin-bottom:0.65pt; padding-left:18pt; padding-top:0pt; padding-right:18pt; padding-bottom:0pt; text-indent:0pt; line-height:10pt; font-size:8pt; color:#000000" align="center"><b>(more)</b><br>
<br>
</p>
<p style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:10pt; color:#000000" align="center"><img src="tacpr002.jpg" alt="[tacpr002.jpg]" align="middle" width="476" height="33"></p>
<hr style="padding-top:7.2pt; padding-bottom:7.2pt; color:#000000" noshade size="1.333">
<p><b><font size="2" face="serif">TransAlta consolidated financial highlights
(continued)</font></b></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="51%">&nbsp;</td>
    <td align="right" colspan="3" width="21%"><i><font size="2" face="serif">3
      months ended December 31</font></i></td>
    <td width="3%">&nbsp;</td>
    <td align="right" colspan="3" width="23%"><i><font size="2" face="serif">Year
      ended December 31</font></i></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td width="51%">&nbsp;</td>
    <td width="9%"><font size="2" face="serif">2002</font></td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="9%"><font size="2" face="serif">2001</font></td>
    <td width="3%">&nbsp;</td>
    <td width="11%"><font size="2" face="serif">2002</font></td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="9%"><font size="2" face="serif">2001</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="51%"><font size="1" face="serif">Availability (%)</font></td>
    <td width="9%"><font size="2" face="serif">87.2</font></td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="9%"><font size="2" face="serif">89.9</font></td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="11%"><font size="2" face="serif">88.4</font></td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="9%"><font size="2" face="serif">86.9</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td width="51%"><font size="1" face="serif">Production (GWh)</font></td>
    <td width="9%"><font size="2" face="serif">12,545</font></td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="9%"><font size="2" face="serif">11,579</font></td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="11%"><font size="2" face="serif">46,877</font></td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="9%"><font size="2" face="serif">44,136</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td width="51%"><font size="1" face="serif">Electricity trading volumes (GWh)</font></td>
    <td width="9%"><font size="2" face="serif">31,786</font></td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="9%"><font size="2" face="serif">15,121</font></td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="11%"><font size="2" face="serif">103,076</font></td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="9%"><font size="2" face="serif">27,619</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td width="51%"><font size="1" face="serif">Gas trading volumes (million GJ)</font></td>
    <td width="9%"><font size="2" face="serif">45.9</font></td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="9%"><font size="2" face="serif">36.5</font></td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="11%"><font size="2" face="serif">159.8</font></td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="9%"><font size="2" face="serif">99.3</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font size="2" face="serif">Discontinued operations in 2002 and 2001 include
net earnings from the Transmission operation, sold in April 2002. Results for
2001 also include the Edmonton Composter operation, sold in June 2001.</font></p>
<p><font size="2" face="serif">In fourth quarter 2002, TransAlta:</font></p>
<ul>
  <li><font size="2" face="serif">Purchased the remainder of Vision Quest
    Windelectric Inc., an Alberta-based wind power generator, for $35.5 million
    in cash and common shares. Vision Quest has 44 MW of wind power under
    operation and is currently engaged in a joint venture with ENMAX to build
    the 75 MW McBride project in Pincher Creek, Alberta.</font><br>
  </li>
  <li><font size="2" face="serif">Finalized post-closing adjustments for the
    sale of its Transmission operation, resulting in an additional $10.0 million
    ($0.06 per share) after-tax gain.</font><br>
  </li>
  <li><font size="2" face="serif">Completed the purchase of Australia Gas and
    Light's (AGL) 15 per cent interest in the 250 MW Southern Cross Energy
    Partnership for AUD$8.5 million.</font><br>
  </li>
</ul>
<p><font size="2" face="serif">TransAlta today also declared a dividend of $0.25
per share on common shares payable April 1, 2003 to shareholders of record at
the close of business on March 1, 2003.</font></p>
<p><i><font size="1" face="serif">TransAlta Corporation is Canada's largest
non-regulated electric generation and marketing company, with approximately $9
billion in assets and over 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.</font></i></p>
<p><i><font size="1" face="serif">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.</font></i></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="47%">&nbsp;</td>
    <td width="9%"><font size="2" face="serif">-</font><font size="2" face="serif">
      30 -</font></td>
    <td width="18%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="23%">&nbsp;</td>
  </tr>
  <tr>
    <td width="47%"><font size="1" face="serif">For more information:</font></td>
    <td width="9%">&nbsp;</td>
    <td width="18%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="23%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="47%"><b><i><font size="1" face="serif">Media inquiries:</font></i></b></td>
    <td colspan="2" width="27%"><b><i><font size="1" face="serif">Investor
      inquiries</font></i></b><i><font size="1" face="serif">:</font></i></td>
    <td width="2%">&nbsp;</td>
    <td width="23%">&nbsp;</td>
  </tr>
  <tr>
    <td width="47%"><font size="1" face="serif">Nadine Walz</font></td>
    <td colspan="2" width="27%"><font size="1" face="serif">Daniel J. Pigeon</font></td>
    <td width="2%">&nbsp;</td>
    <td width="23%">&nbsp;</td>
  </tr>
  <tr>
    <td width="47%"><font size="1" face="serif">Media Relations Specialist</font></td>
    <td colspan="4" width="53%"><font size="1" face="serif">Director, Investor
      Relations</font></td>
  </tr>
  <tr>
    <td width="47%"><b><font size="1" face="serif">Phone: (403) 267-3655</font></b></td>
    <td width="9%"><b><font size="1" face="serif">Phone:</font></b></td>
    <td colspan="3" width="44%"><b><font size="1" face="serif">1-800-387-3598 in
      Canada and U.S.</font></b></td>
  </tr>
  <tr>
    <td width="47%"><b><font size="1" face="serif">Pager: (403) 213-7041</font></b></td>
    <td width="9%"><b><font size="1" face="serif">Phone:</font></b></td>
    <td width="18%"><b><font size="1" face="serif">(403) 267-2520</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="23%"><b><font size="1" face="serif">Fax (403) 267-2590</font></b></td>
  </tr>
  <tr>
    <td width="47%"><b><font size="1" face="serif">Email: </font></b><font size="1" face="serif">media_relations@transalta.com</font></td>
    <td width="9%"><b><font size="1" face="serif">E-mail:</font></b></td>
    <td colspan="3" width="44%"><font size="1" face="serif">investor_relations@transalta.com</font></td>
  </tr>
</table>
<hr>
<a name="page_1"></a>
<p align="right"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="right"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<p><img src="tacq42002x1x1.jpg" border="none" width="152" height="43"></p>
<p><font color="#999999" size="6" face="sans-serif">Q4:</font><b><font color="#999999" size="6" face="sans-serif">2002</font></b></p>
<p><b><font size="1" face="sans-serif">M A N A G E M E N T ' S D I S C U S S I O
N A N D A N A L Y S I S</font></b></p>
<p><font size="1" face="sans-serif">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 and twelve
months ended Dec. 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 (Canadian GAAP). All
tabular amounts in the following discussion are in millions of Canadian dollars
unless otherwise noted.</font></p>
<p><b><font size="1" face="sans-serif">F O R W A R D - L O O K I N G S T A T E M
E N T S</font></b></p>
<p><font size="1" face="sans-serif">This report contains forward-looking
statements, including statements regarding the business and anticipated
financial performance of TransAlta. 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
statements are not guarantees of TransAlta's future performance and are subject
to risks, uncertainties, and other important factors that could cause the
corporation's actual performance to be materially different from those
projected. Some of the risks, uncertainties, and factors include, but are not
limited to: 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 commodity prices, prevailing
interest rates, currency exchange rates, inflation levels and general economic
conditions in geographic areas where TransAlta Corporation operates, results of
financing efforts, changes in counterparty risk and the impact of accounting
policies issued by Canadian and United States standard setters. Given these
uncertainties, the reader should not place undue reliance on these
forward-looking statements.</font></p>
<p><b><font size="1" face="sans-serif">R E S U L T S O F O P E R A T I O N S</font></b></p>
<p><font size="1" face="sans-serif">The results of operations are organized by
consolidated results and by business segment. 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
segment, Transmission, was sold on April 29, 2002. Prior period amounts have
been reclassified to reflect these changes. A corporate group provides finance,
treasury, legal, human resources and other administrative support to the
business segments. These overheads are allocated to the business segments if
they are not directly attributable to discontinued operations.</font></p>
<p><font size="1" face="sans-serif">Each business segment assumes 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 is reconciled to net earnings applicable to
common shareholders below:</font></p>
<p align="right"><font color="#999999" size="6" face="sans-serif">:P1</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_2"></a>
<p><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A L T A C O R P
O R A T I O N</font></b></p>
<p><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E R L Y R E P O
R T 2 0 0 2</font></b></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="60%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" colspan="4" width="18%"><font size="1" face="sans-serif">3
      months ended Dec. 31</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td colspan="4" width="17%"><font size="1" face="sans-serif">Year ended Dec.
      31</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><b><font size="1" face="sans-serif">EBIT</font></b></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="8%"><b><font size="1" face="sans-serif">(67.0)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="8%"><font size="1" face="sans-serif">50.5</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">197.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">378.9</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Other income</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">1.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">1.2</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">0.1</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">1.5</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Foreign exchange gain</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">0.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">2.9</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">1.2</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">0.8</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Net interest expense</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">(24.0)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">(12.4)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">(82.7)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(88.1)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><b><font size="1" face="sans-serif">Earnings (loss) from
      continuing operations before</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><b><font size="1" face="sans-serif">income taxes and
      non-controlling interests</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">(89.1)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">42.2</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">116.2</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">293.1</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Income tax expense
      (recovery)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">(35.1)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">0.5</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">18.1</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">89.9</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Non-controlling interests</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">5.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">5.0</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">20.1</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">20.6</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><b><font size="1" face="sans-serif">Earnings (loss) from
      continuing operations</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">(59.6)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">36.7</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">78.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">182.6</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Earnings from discontinued
      operations</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">13.3</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">12.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">45.1</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Gain on disposal of
      discontinued operations</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">10.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">120.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><b><font size="1" face="sans-serif">Net earnings (loss)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">(49.6)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">50.0</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">210.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">227.7</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Preferred securities
      distribution, net of tax</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">4.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">3.5</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">20.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">13.1</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><b><font size="1" face="sans-serif">Net earnings (loss)
      applicable to common shareholders</font></b></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="8%"><b><font size="1" face="sans-serif">(54.3)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="8%"><font size="1" face="sans-serif">46.5</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">189.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">214.6</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><b><font size="1" face="sans-serif">H I G H L I G H T S</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="3" width="69%"><font size="1" face="sans-serif">The following
      table depicts key financial results and statistical operating data:</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><b><i><font size="1" face="sans-serif">3 months ended Dec.
      31</font></i></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Availability</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">87.2%</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">89.9%</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Production (GWh)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">12,545</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">11,579</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Electricity trading volumes
      (GWh)</font><i><sup><font size="1" face="sans-serif">1</font></sup></i></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">31,786</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">15,121</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Gas trading volumes
      (million GJ)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">45.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">36.5</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">Amount</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" colspan="2" width="8%"><b><font size="1" face="sans-serif">Per
      common</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="center" width="8%"><font size="1" face="sans-serif">Amount</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="7%"><font size="1" face="sans-serif">Per
      common</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="center" width="8%"><b><font size="1" face="sans-serif">share</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="7%"><font size="1" face="sans-serif">share</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Revenues</font><i><sup><font size="1" face="sans-serif">2</font></sup></i></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="8%"><b><font size="1" face="sans-serif">517.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="8%"><font size="1" face="sans-serif">434.4</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Net earnings (loss) from
      continuing operations</font><i><sup><font size="1" face="sans-serif">3</font></sup></i></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">(64.3)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">(0.38)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">33.2</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">0.19</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Earnings from discontinued
      operations</font><i><sup><font size="1" face="sans-serif">4</font></sup></i></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">13.3</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">0.08</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Gain on disposal of
      discontinued operations, net of tax</font><i><sup><font size="1" face="sans-serif">4</font></sup></i></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">10.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">0.06</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Net earnings (loss)
      applicable to common shareholders</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="8%"><b><font size="1" face="sans-serif">(54.3)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">(0.32)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="8%"><font size="1" face="sans-serif">46.5</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">0.27</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Cash flow from operating
      activities</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="8%"><b><font size="1" face="sans-serif">189.5</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="8%"><font size="1" face="sans-serif">131.7</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><b><i><font size="1" face="sans-serif">Year ended Dec. 31</font></i></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Availability</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">88.4%</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">86.9%</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Production (GWh)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">46,877</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">44,136</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Electricity trading volumes
      (GWh)</font><i><sup><font size="1" face="sans-serif">1</font></sup></i></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">103,076</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">27,619</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Gas trading volumes
      (million GJ)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">159.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">99.3</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">Amount</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" colspan="2" width="8%"><b><font size="1" face="sans-serif">Per
      common</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="center" width="8%"><font size="1" face="sans-serif">Amount</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="7%"><font size="1" face="sans-serif">Per
      common</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="center" width="8%"><b><font size="1" face="sans-serif">share</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="7%"><font size="1" face="sans-serif">share</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Revenues</font><i><sup><font size="1" face="sans-serif">2</font></sup></i></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="8%"><b><font size="1" face="sans-serif">1,723.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="8%"><font size="1" face="sans-serif">2,319.4</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Net earnings from
      continuing operations</font><sup><font size="1" face="sans-serif">3</font></sup></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">57.1</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">0.34</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">169.5</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">1.00</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Earnings from discontinued
      operations</font><i><sup><font size="1" face="sans-serif">4</font></sup></i></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">12.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">0.07</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">45.1</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">0.27</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Gain on disposal of
      discontinued operations, net of tax</font><i><sup><font size="1" face="sans-serif">4</font></sup></i></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">120.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">0.71</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Net earnings applicable to
      common shareholders</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="8%"><b><font size="1" face="sans-serif">189.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">1.12</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="8%"><font size="1" face="sans-serif">214.6</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">1.27</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Cash flow from operating
      activities</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="8%"><b><font size="1" face="sans-serif">437.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="8%"><font size="1" face="sans-serif">715.6</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<table>
  <tr>
    <td valign="top" width="5%"><i><font size="1" face="sans-serif">1</font></i><br>
      &nbsp;&nbsp;</td>
    <td valign="top"><i><font size="1" face="sans-serif">2001 electricity
      trading volumes have been restated to conform with current reporting
      practices and standards.</font></i><br>
    </td>
  </tr>
  <tr>
    <td valign="top" width="5%"><i><font size="1" face="sans-serif">2</font></i><br>
      &nbsp;&nbsp;</td>
    <td valign="top"><i><font size="1" face="sans-serif">From continuing
      operations. In accordance with changes to U.S. and Canadian GAAP, revenues
      from energy trading activities are now presented on a net basis. Prior
      period amounts have been reclassified to reflect this change.</font></i><br>
    </td>
  </tr>
  <tr>
    <td valign="top" width="5%"><i><font size="1" face="sans-serif">3</font></i><br>
      &nbsp;&nbsp;</td>
    <td valign="top"><i><font size="1" face="sans-serif">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.</font></i><br>
    </td>
  </tr>
  <tr>
    <td valign="top" width="5%"><i><font size="1" face="sans-serif">4</font></i><br>
      &nbsp;&nbsp;</td>
    <td valign="top"><i><font size="1" face="sans-serif">Discontinued operations
      include the Transmission operation and the Edmonton Composter operation.
      The Transmission operation was sold on April 29, 2002 and the Edmonton
      Composter was sold on June 29, 2001.</font></i><br>
    </td>
  </tr>
</table>
<p><font color="#999999" size="6" face="sans-serif">:P2</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_3"></a>
<p><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A L T A C O R P
O R A T I O N</font></b></p>
<p><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E R L Y R E P O
R T 2 0 0 2</font></b></p>
<p><font size="1" face="sans-serif">Net earnings from continuing operations for
the three months ended Dec. 31, 2002 reflect the provision for the
decommis-sioning of the Wabamun facility ($110.0 million pre-tax), cancellation
fees on turbine contracts ($42.5 million pre-tax), and the impact of the
accelerated Alberta thermal plant maintenance schedule ($27.7 million pre-tax),
which are described in greater detail below. These costs were partially offset
by higher contracted prices and lower purchased power costs. Net earnings from
continuing operations for the year ended Dec. 31, 2002 were also influenced by
the utilization and recognition of previously unrecognized tax losses ($11.2
million), the negative impact of the Wabamun unit four arbitration decision
($38.9 million plus interest of $2.7 million, pre-tax) and a prior period
regulatory decision ($3.3 million pre-tax) described below. Net earnings
attributable to common shareholders include the $120.0 million ($0.71 per common
share) after-tax gain on disposal of the Transmission operation, which was sold
on April 29, 2002.</font></p>
<p><font size="1" face="sans-serif">Cash flow from operating activities for the
three months ended Dec. 31, 2002 increased $57.8 million from the fourth quarter
of 2001 due primarily to the non-cash impact of the asset impairment and
equipment cancellation charges and lower working capital requirements offset by
lower earnings. For the year ended Dec. 31, 2002, cash flow from operating
activities was $277.9 million lower than in 2001 due to lower earnings, the
impact of the collection in 2001 of accounts receivable relating to the Alberta
Power Pool ($170.0 million) upon implementation of deregulation on Jan. 1, 2001,
the payment in 2002 to the Alberta Power Pool relating to the ancillary services
revenue settlement ($49.9 million) and the final installment of 2001 income
taxes paid in the first quarter of 2002 ($109.0 million).</font></p>
<p><font size="1" face="sans-serif">The corporation's existing financial
reporting procedures and practices have enabled the certification of TransAlta's
fourth quarter report to shareholders in accordance with the requirements of the
Sarbanes-Oxley Act.</font></p>
<p><b><font size="1" face="sans-serif">S I G N I F I C A N T O N E - T I M E I T
E M S</font></b></p>
<p><b><font size="1" face="sans-serif">Purchase of Vision Quest Windelectric
Inc.</font></b></p>
<p><font size="1" face="sans-serif">On Dec. 6, 2002, the corporation purchased
the remaining interest in Vision Quest Windelectric Inc. (Vision Quest) for cash
of $21.3 million plus a previous loan of $19.8 million and $14.2 million in
common shares. This transaction increased the corporation's total investment in
the wind power company to $68.8 million. Included in the purchase price was
$27.2 million of goodwill. Vision Quest owns and operates 67 wind turbine power
plants with 44 megawatts (MW) of capacity with a further 37.5 MW under
construction and a substantial resource base available for further expansion.
The purchase of Vision Quest reflects TransAlta's goal to increase the portion
of total generation from renewable energy by 2010. Vision Quest's financial
results for the period after acquisition ($0.6 million EBIT) are included in
corporate results for segmented reporting purposes (</font><i><font size="1" face="sans-serif">Note
13)</font></i><font size="1" face="sans-serif">.</font></p>
<p><b><font size="1" face="sans-serif">Decommissioning of Wabamun plant</font></b></p>
<p><font size="1" face="sans-serif">After a detailed unit-by-unit engineering
assessment, a review of environmental issues and a review of short- and
long-term market forecasts, the corporation decided to implement a phased
decommissioning of its 569 MW coal-fired Wabamun facility. The power purchase
arrangement (PPA) for the plant expires at the end of 2003. The 147 MW unit
three was removed from service on Nov. 29, 2002 after an unplanned outage, as it
was not considered economical to return the unit to service. The corporation
plans to retire units one and two (69 MW and 67 MW, respectively) in 2004 and
unit four (286 MW) in 2010 when its operating licence expires. As a result of
this decision, the corporation recognized a pre-tax impairment charge of $110.0
million in the fourth quarter of 2002.</font></p>
<p><b><font size="1" face="sans-serif">Turbine order cancellation</font></b></p>
<p><font size="1" face="sans-serif">After examining expected market conditions
and potential greenfield development opportunities against the corporation's
risk profile, the corporation concluded that the likelihood of using all of the
natural gas turbines in its pre-purchased turbine program was unlikely. The
corporation therefore cancelled orders for four turbines and as a result
recorded a pre-tax cancellation charge of $42.5 million for contract termination
costs in the fourth quarter of 2002. The costs consist solely of progress
payments made to date.</font></p>
<p align="right"><font color="#999999" size="6" face="sans-serif">:P3</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_4"></a>
<p><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A L T A C O R P
O R A T I O N</font></b></p>
<p><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E R L Y R E P O
R T 2 0 0 2</font></b></p>
<p><b><font size="1" face="sans-serif">Ancillary services revenue settlement</font></b></p>
<p><font size="1" face="sans-serif">In July 2002, a dispute with the Balancing
Pool of Alberta in respect of the allocation of hydro ancillary services revenue
under the Hydro PPAs was resolved. TransAlta repaid $49.9 million it had
received in advance from the Balancing Pool. The settlement had no earnings
impact as the corporation had not previously recognized this amount as revenue.</font></p>
<p><b><font size="1" face="sans-serif">Refinancing of foreign operations</font></b></p>
<p><font size="1" face="sans-serif">TransAlta restructured the financing of
certain foreign operations and as a result, the company was able to record the
benefit of previously unrecognized foreign tax loss carryforward balances. This
restructuring contributed $11.2 million to earnings in the third quarter of
2002.</font></p>
<p><b><font size="1" face="sans-serif">Wabamun arbitration decision</font></b></p>
<p><font size="1" face="sans-serif">On May 23, 2002, the corporation received
the arbitrators' decision with respect to the 10-month outage at Wabamun unit
four, which resulted from fatigue cracks within the waterwall tubing of its
boiler. The arbitrators confirmed in their ruling that the outage qualified as a
</font><i><font size="1" face="sans-serif">force majeure </font></i><font size="1" face="sans-serif">event,
but also ruled that the corporation should have returned the unit to service
more quickly. As a result of this decision, the corporation was required to pay
$38.9 million plus interest of $2.7 million, all pre-tax. The payment was
recorded as a reduction to revenue.</font></p>
<p><b><font size="1" face="sans-serif">Gain on disposal of discontinued
operations</font></b></p>
<p><font size="1" face="sans-serif">On April 29, 2002, TransAlta's Transmission
operation was sold for proceeds of $820.7 million, of which $818.0 million has
been collected. The proceeds excluded $31.7 million in accounts receivable,
which were retained and subsequently collected, and $4.4 million in accounts
payable. The disposal resulted in a gain on sale of $120.0 million ($0.71 per
common share), net of income taxes of $32.9 million. The previously reported
gain included a number of estimates, therefore the gain was adjusted in the
fourth quarter of 2002 to reflect agreed working capital adjustments and actual
amounts paid and received.</font></p>
<p><b><font size="1" face="sans-serif">Prior period regulatory decision</font></b></p>
<p><font size="1" face="sans-serif">On April 16, 2002, the Alberta Energy and
Utilities Board (EUB) rendered a negative decision of $3.3 million pre-tax with
respect to TransAlta's hydro bidding strategy in 2000.</font></p>
<p><b><font size="1" face="sans-serif">N E W A C C O U N T I N G S T A N D A R D
S</font></b></p>
<p><font size="1" face="sans-serif">Effective Jan. 1, 2002, the corporation
prospectively 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 no longer be subject to amortization under the new standard. There
was no impairment of goodwill upon adoption of this standard, nor was there an
impairment at Dec. 31, 2002.</font></p>
<p><font size="1" face="sans-serif">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 the fair value 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 market price of the underlying stock
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. Had the fair value method been used, reported basic
and diluted earnings per common share would have been reduced by $0.01 and $0.02
per common share for the three and twelve</font></p>
<p><font color="#999999" size="6" face="sans-serif">:P4</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_5"></a>
<p><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A L T A C O R P
O R A T I O N</font></b></p>
<p><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E R L Y R E P O
R T 2 0 0 2</font></b></p>
<p><font size="1" face="sans-serif">months ended Dec. 31, 2002, respectively
(2001 - $nil and $0.01 per common share, respectively). Effective Jan. 1, 2003,
TransAlta has elected to account for stock-based compensation in accordance with
the fair value method and will expense stock-based compensation in respect of
stock options granted after that date.</font></p>
<p><font size="1" face="sans-serif">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.</font></p>
<p><font size="1" face="sans-serif">The CICA has amended its standard on the
recognition, measurement, and disclosure of the impairment of long-lived assets.
This standard is effective April 1, 2003 and requires that an impairment loss be
recognized when the carrying amount of a long-lived asset exceeds the sum of the
undiscounted cash flows expected from its use and eventual disposition. The
impairment loss is measured as the amount that the long-lived asset's carrying
value exceeds its fair value. TransAlta early adopted this standard in the
fourth quarter of 2002. In accordance with the standard, the impairment
calculation for the Wabamun plant resulted in the recognition of an impairment
charge of $110.0 million, which is included in asset impairment and equipment
cancellation charges.</font></p>
<p><font size="1" face="sans-serif">In the third quarter of 2002, in response to
changes in accounting standards in the U.S. with respect to energy trading
activities, the corporation has adopted a policy that all gains and losses on
energy trading contracts be shown net in the statement of earnings. Consistent
with these recommendations, the corporation has chosen to disclose the gross
transaction volumes for those energy trading contracts that are physically
settled.</font></p>
<p><b><font size="1" face="sans-serif">D I S C U S S I O N O F S E G M E N T E D
R E S U L T S</font></b></p>
<p><b><font size="1" face="sans-serif">GENERATION: </font><i><font size="1" face="sans-serif">Owns
and operates hydro-, gas-, and coal-fired plants and related mining operations,
with a total generating capacity of 7,516 MW.</font></i></b></p>
<p><font size="1" face="sans-serif">Effective Jan. 1, 2002, TransAlta's
organizational structure changed to combine the Generation and IPP business
segments into one Generation segment. This was done 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
reclassified to reflect the combination of these segments.</font></p>
<p><font size="1" face="sans-serif">Available capacity increased during the year
as a result of the scrubber installation at Centralia (32 MW), an upgrade at
Sundance unit six (42 MW), and the commissioning of the Big Hanaford plant (248
MW) offset by the decommissioning of Wabamun unit three (147 MW) in the fourth
quarter. In connection with the construction of the Sarnia Regional Cogeneration
plant, TransAlta purchased existing operational assets during the fourth quarter
with a current generating capacity of 135 MW plus 55 MW of backup capacity for
$30.2 million. Construction of an additional 440 MW is expected to be completed
in the first quarter of 2003.</font></p>
<p><font size="1" face="sans-serif">The results of the Generation segment are as
follows:</font></p>
<p align="right"><font color="#999999" size="6" face="sans-serif">:P5</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_6"></a>
<p><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A L T A C O R P
O R A T I O N</font></b></p>
<p><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E R L Y R E P O
R T 2 0 0 2</font></b></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="56%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="9%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="10%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="9%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><b><i><font size="1" face="sans-serif">3 months ended Dec.
      31</font></i></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">Total</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="9%"><b><font size="1" face="sans-serif">Per
      MWh</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="10%"><font size="1" face="sans-serif">Total</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="9%"><font size="1" face="sans-serif">Per
      MWh</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">Revenues</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">498.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">39.75</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="10%"><font size="1" face="sans-serif">431.8</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="8%"><font size="1" face="sans-serif">37.29</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">Fuel and purchased power</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">(226.9)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">(18.09)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">(246.4)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">(21.28)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">Gross margin</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">271.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">21.66</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">185.4</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">16.01</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">Operating expenses:</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="10%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">Operations, maintenance and
      administration</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">115.3</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">9.19</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">68.7</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">5.93</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">Depreciation and
      amortization</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">57.4</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">4.58</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">41.4</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">3.58</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">Asset impairment and
      equipment cancellation charges</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">152.5</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">12.16</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">2.7</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">0.23</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">Taxes, other than income
      taxes</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">7.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">0.60</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">4.6</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">0.40</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">Prior period regulatory
      decision</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">(11.0)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">(0.95)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">EBIT before corporate
      allocations</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">(61.0)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">(4.87)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">79.0</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">6.82</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">Corporate allocations</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">(18.1)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">(1.44)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">(23.6)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">(2.04)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">EBIT</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">(79.1)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">(6.31)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="10%"><font size="1" face="sans-serif">55.4</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="8%"><font size="1" face="sans-serif">4.78</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="56%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="10%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><b><i><font size="1" face="sans-serif">Year ended Dec. 31</font></i></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">Total</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" colspan="2" width="9%"><b><font size="1" face="sans-serif">Per
      MWh</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="10%"><font size="1" face="sans-serif">Total</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" colspan="2" width="9%"><font size="1" face="sans-serif">Per
      MWh</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">Revenues</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">1,673.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">35.71</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="10%"><font size="1" face="sans-serif">2,158.4</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="8%"><font size="1" face="sans-serif">48.90</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">Fuel and purchased power</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">(703.6)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">(15.01)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">(1,230.6)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">(27.88)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">Gross margin</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">970.3</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">20.70</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">927.8</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">21.02</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">Operating expenses:</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="10%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">Operations, maintenance and
      administration</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">346.3</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">7.39</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">290.6</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">6.58</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">Depreciation and
      amortization</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">196.3</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">4.19</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">156.5</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">3.55</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">Asset impairment and
      equipment cancellation charges</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">152.5</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">3.25</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">118.8</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">2.69</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">Taxes, other than income
      taxes</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">27.3</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">0.58</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">18.7</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">0.42</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">Prior period regulatory
      decision</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">3.3</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">0.07</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">(11.0)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">(0.25)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">EBIT before corporate
      allocations</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">244.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">5.22</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">354.2</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">8.03</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">Corporate allocations</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">(70.6)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">(1.51)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">(82.5)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">(1.87)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="56%"><font size="1" face="sans-serif">EBIT</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">174.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">3.71</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="10%"><font size="1" face="sans-serif">271.7</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="8%"><font size="1" face="sans-serif">6.16</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font size="1" face="sans-serif">Generation's revenues are derived from the
production of electricity, of which, on an annualized basis, approximately 90
per cent are based upon contracted prices, including capacity payments, and
approximately 10 per cent are subject to market pricing. Revenues received under
long-term contractual arrangements are not subject to major fluctuations in the
spot price for electricity. In the fourth quarter of 2002, long-term contracts
covered 91 per cent of production (2001 - 94 per cent) with the remaining nine
per cent (2001 - six per cent) subject to market pricing. For the year ended
Dec. 31, 2002, long-term contracts covered 90 per cent of total production (2001
- 92 per cent) with the remaining 10 per cent (2001 - eight per cent) subject to
market pricing.</font></p>
<p><font size="1" face="sans-serif">The existing contracts have remaining terms
ranging from one to 22 years. Contracted production, as a percentage of existing
production and forecasted production from assets currently under construction,
over the next five years are as follows:</font></p>
<p><font size="1" face="sans-serif">Contracted output</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td align="right" width="14%"><font size="1" face="sans-serif">2003</font></td>
    <td width="6%">&nbsp;</td>
    <td align="right" width="14%"><font size="1" face="sans-serif">2004</font></td>
    <td width="6%">&nbsp;</td>
    <td align="right" width="14%"><font size="1" face="sans-serif">2005</font></td>
    <td width="6%">&nbsp;</td>
    <td align="right" width="14%"><font size="1" face="sans-serif">2006</font></td>
    <td width="6%">&nbsp;</td>
    <td align="right" width="14%"><font size="1" face="sans-serif">2007</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td align="right" width="14%"><font size="1" face="sans-serif">88%</font></td>
    <td width="6%">&nbsp;</td>
    <td align="right" width="14%"><font size="1" face="sans-serif">87%</font></td>
    <td width="6%">&nbsp;</td>
    <td align="right" width="14%"><font size="1" face="sans-serif">87%</font></td>
    <td width="6%">&nbsp;</td>
    <td align="right" width="14%"><font size="1" face="sans-serif">86%</font></td>
    <td width="6%">&nbsp;</td>
    <td align="right" width="14%"><font size="1" face="sans-serif">85%</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font size="1" face="sans-serif">Generation also derives revenue from the
provision of ancillary services such as steam and system support. Revenues are
subject to seasonal variations: during the summer months, warmer temperatures
result in less efficient fuel conversion rates (higher heat rates), and
increased hydro production from spring run-off results in lower electricity
prices.</font></p>
<p><font size="1" face="sans-serif">A breakdown of revenues and average pricing
applicable to each category are summarized in the following table:</font></p>
<p><font color="#999999" size="6" face="sans-serif">:P6</font></p>
<p>&nbsp;</p>
<hr noshade align="center" width="100%" size="2">
<p align="right"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="right"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<a name="page_7"></a>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="34%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="9%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="11%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="22%"><font size="1" face="sans-serif">2001</font></td>
  </tr>
  <tr>
    <td width="34%"><b><i><font size="1" face="sans-serif">3 months ended Dec.
      31</font></i></b></td>
    <td colspan="2" width="9%"><b><font size="1" face="sans-serif">Revenue</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="9%"><b><font size="1" face="sans-serif">Per
      MWh</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" colspan="2" width="12%"><font size="1" face="sans-serif">Revenue</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="22%"><font size="1" face="sans-serif">Per
      MWh</font></td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
  </tr>
  <tr>
    <td width="34%"><font size="1" face="sans-serif">Contract</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">405.3</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">34.53</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="11%"><font size="1" face="sans-serif">373.8</font></td>
    <td width="2%">&nbsp;</td>
    <td width="8%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="13%"><font size="1" face="sans-serif">33.96</font></td>
  </tr>
  <tr>
    <td width="34%"><font size="1" face="sans-serif">Merchant</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">54.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">62.78</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="11%"><font size="1" face="sans-serif">48.7</font></td>
    <td width="2%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td align="right" width="13%"><font size="1" face="sans-serif">46.47</font></td>
  </tr>
  <tr>
    <td width="34%"><font size="1" face="sans-serif">Ancillary services and
      other</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">38.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="11%"><font size="1" face="sans-serif">9.3</font></td>
    <td width="2%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td align="right" width="13%"><font size="1" face="sans-serif">-</font></td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
  </tr>
  <tr>
    <td width="34%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">498.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">39.75</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="11%"><font size="1" face="sans-serif">431.8</font></td>
    <td width="2%">&nbsp;</td>
    <td width="8%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="13%"><font size="1" face="sans-serif">37.29</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="34%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="11%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td align="right" width="13%"><font size="1" face="sans-serif">2001</font></td>
  </tr>
  <tr>
    <td width="34%"><b><i><font size="1" face="sans-serif">Year ended Dec. 31</font></i></b></td>
    <td colspan="2" width="9%"><b><font size="1" face="sans-serif">Revenue</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" colspan="2" width="9%"><b><font size="1" face="sans-serif">Per
      MWh</font></b></td>
    <td width="2%">&nbsp;</td>
    <td colspan="2" width="12%"><font size="1" face="sans-serif">Revenue</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" colspan="2" width="22%"><font size="1" face="sans-serif">Per
      MWh</font></td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
  </tr>
  <tr>
    <td width="34%"><font size="1" face="sans-serif">Contract</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">1,448.2</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">33.26</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="11%"><font size="1" face="sans-serif">1,374.1</font></td>
    <td width="2%">&nbsp;</td>
    <td width="8%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="13%"><font size="1" face="sans-serif">33.23</font></td>
  </tr>
  <tr>
    <td width="34%"><font size="1" face="sans-serif">Merchant</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">171.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">51.64</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="11%"><font size="1" face="sans-serif">681.2</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="22%"><font size="1" face="sans-serif">142.91</font></td>
  </tr>
  <tr>
    <td width="34%"><font size="1" face="sans-serif">Ancillary services and
      other</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">93.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="11%"><font size="1" face="sans-serif">103.1</font></td>
    <td width="2%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td align="right" width="13%"><font size="1" face="sans-serif">-</font></td>
  </tr>
  <tr>
    <td width="34%"><font size="1" face="sans-serif">Wabamun arbitration
      decision</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">(38.9)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="11%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td align="right" width="13%"><font size="1" face="sans-serif">-</font></td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
  </tr>
  <tr>
    <td width="34%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">1,673.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">35.71</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="11%"><font size="1" face="sans-serif">2,158.4</font></td>
    <td width="2%">&nbsp;</td>
    <td width="8%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="13%"><font size="1" face="sans-serif">48.90</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
  </tr>
</table>
<p><font size="1" face="sans-serif">A reconciliation between production, revenue
and EBIT for the fourth quarter and year ended Dec. 31, 2002 compared to the
same periods in 2001 is presented below:</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="68%">&nbsp;</td>
    <td width="14%"><font size="1" face="sans-serif">Production (GWh)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><font size="1" face="sans-serif">Revenue</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><font size="1" face="sans-serif">EBIT</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">3 months ended Dec. 31,
      2001</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">11,579</font></td>
    <td width="1%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">431.8</font></td>
    <td width="1%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">55.4</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">Increased production</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">868</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">32.4</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">23.5</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">New gas plants in service (Sarnia
      and Big Hanaford)</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">388</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">39.9</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(11.7)</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">Accelerated Alberta thermal
      plant maintenance</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">(290)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(10.6)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(27.7)</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">Wabamun impairment and
      equipment cancellation charges</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(152.5)</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">Higher market prices</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">5.3</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">5.3</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">Lower purchased power
      requirements</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">66.8</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">Increased operations,
      maintenance and administration expense</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(24.9)</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">Increased depreciation</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(11.2)</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">Wabamun unit four TSR
      settlement for 2000</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(11.0)</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">Other</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(0.1)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">8.9</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><b><font size="1" face="sans-serif">3 months ended Dec. 31,
      2002</font></b></td>
    <td align="right" width="14%"><b><font size="1" face="sans-serif">12,545</font></b></td>
    <td width="1%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">498.7</font></b></td>
    <td width="1%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">(79.1)</font></b></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="68%">&nbsp;</td>
    <td width="14%"><font size="1" face="sans-serif">Production (GWh)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><font size="1" face="sans-serif">Revenue</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><font size="1" face="sans-serif">EBIT</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">Year ended Dec. 31, 2001</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">44,136</font></td>
    <td width="1%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">2,158.4</font></td>
    <td width="1%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">271.7</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">Net improved availability
      and production</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">2,538</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">91.1</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">53.5</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">New gas plants in service (Sarnia
      and Big Hanaford)</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">493</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">40.2</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(13.1)</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">Accelerated Alberta thermal
      plant maintenance</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">(290)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(10.6)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(27.7)</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">Wabamun impairment and
      equipment cancellation charges</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(152.5)</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">Lower market prices</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(441.9)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(441.9)</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">Lower purchased power
      requirements</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">562.8</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">Wabamun arbitration
      decision</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(38.9)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(38.9)</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">Impact of the Pierce Power
      plant monetization in 2001</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(121.8)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(3.0)</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">Increased operations,
      maintenance and administration expense</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(33.0)</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">Increased depreciation</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(34.6)</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">Lower fuel costs per
      megawatt hour</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">39.4</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">Wabamun unit four TSR
      settlement for 2000 and prior period regulatory decision</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(14.3)</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><font size="1" face="sans-serif">Other</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(2.6)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">5.6</font></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="68%"><b><font size="1" face="sans-serif">Year ended Dec. 31, 2002</font></b></td>
    <td align="right" width="14%"><b><font size="1" face="sans-serif">46,877</font></b></td>
    <td width="1%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">1,673.9</font></b></td>
    <td width="1%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">174.0</font></b></td>
    <td width="1%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font size="1" face="sans-serif">As discussed in significant one-time items,
the corporation recognized an impairment charge of $110.0 million relating to
the Wabamun plant, as the carrying value was determined to be in excess of fair
value. TransAlta also cancelled the order for four natural gas turbines
resulting in a $42.5 million contract termination charge. In September 2001,
TransAlta monetized its investment in the 154 MW Pierce Power plant as a result
of weak economic conditions. Revenue hedges were realized resulting in the
recognition of revenue of $121.8 million, offset by an asset impairment charge
of $66.5 million and a recognition of anticipated future operating costs of
$52.3 million.</font></p>
<p align="right"><font color="#999999" size="6" face="sans-serif">:P7</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_8"></a>
<p align="right"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="right"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<p><font size="1" face="sans-serif">As a result of the corporation's forward
view of the electricity market and its positive experience with improvements at
the Centralia plant, the corporation accelerated its Alberta thermal plant
maintenance schedule. This is being undertaken in order to improve reliability
and increase availability when the economy turns around and electricity demand
increases. This decision resulted in lower revenues and increased maintenance
costs ($27.7 million pre-tax) in the fourth quarter of 2002.</font></p>
<p><font size="1" face="sans-serif">As discussed in significant one-time items,
the Wabamun arbitration decision resulted in a $38.9 million pre-tax payment
that was recorded as a reduction of revenue in the second quarter of 2002.</font></p>
<p><font size="1" face="sans-serif">As discussed in significant one-time items,
the EUB rendered a negative decision of $3.3 million pre-tax with respect to
TransAlta's hydro bidding strategy in 2000, which was recorded in 2002 as a
prior period regulatory decision.</font></p>
<p><font size="1" face="sans-serif">Availability for the fourth quarter of 2002
was 87.2 per cent compared to 89.9 per cent in 2001, reflecting decreased
availability at the Alberta thermal plants due to the accelerated maintenance
schedule and the unplanned Wabamun unit three outage discussed previously.
Availability for the year ended Dec. 31, 2002 was 88.4 per cent compared to 86.9
per cent in 2001 as a result of improved operational performance at the thermal
and gas plants, partially offset by the accelerated maintenance at the Alberta
thermal plants and the Wabamun outage. At various times during 2002, when the
market price of electricity was lower than the variable costs of production at
certain plants, the corporation reduced production at these plants, and
purchased electricity from the market to fulfill contractual obligations
(economic dispatch). During these periods of economic dispatch, the affected
plants were available to generate the electricity if required.</font></p>
<p><font size="1" face="sans-serif">In the three months ended Dec. 31, 2002,
production increased by 966 GWh compared to the same period in 2001 as a result
of incremental production from the Sarnia and Big Hanaford plants and increased
production from the Centralia plant, offset by lost production resulting from
accelerated Alberta thermal plant maintenance. There was no economic dispatch in
the fourth quarter of 2002. In the year ended Dec. 31, 2002, total production
increased by 2,741 GWh compared to 2001. This increase was the result of the
items discussed above and the return to service of Wabamun unit four as well as
increased thermal production and availability, partially offset by 731 GWh
decreased production resulting from economic dispatch decisions.</font></p>
<p><img src="tacq42002x8x1.jpg" border="none" align="center" width="504" height="173"></p>
<p><font size="1" face="sans-serif">As shown in the above graphs, electricity
spot prices in the fourth quarter of 2002 in both the Alberta and Pacific
Northwest markets increased compared to the same period in 2001; however on an
annual basis, electricity spot prices were lower in 2002 than in 2001. In the
fourth quarter, spark spreads (power price less cost of gas consumed) increased
in the Alberta market and decreased in the Pacific Northwest market. For the
year ended Dec. 31, 2002, spark spreads decreased in both the Alberta and
Pacific Northwest markets. Within these markets, prices were softer in 2002 due
to reduced demand as a result of lower economic activity, increased hydro
production, and additional generating capacity added to these markets.</font></p>
<p><font color="#999999" size="6" face="sans-serif">:P8</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_9"></a>
<p align="right"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="right"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<p><font size="1" face="sans-serif">Generation's revenue for the fourth quarter
of 2002 increased by $66.9 million ($2.46 per MWh) compared to the same period
in 2001. The increase is due to higher production, higher ancillary services
revenue, increased long-term contracted prices and higher electricity spot
prices. The increase in contracted prices is due to higher gas prices, which are
recovered under the terms of certain contracts. Revenue for the year ended Dec.
31, 2002 decreased by $484.5 million ($13.19 per MWh) compared to 2001. Adjusted
for the Wabamun arbitration and Pierce Power decisions, revenue was $1,712.8
million ($36.54 per MWh) in 2002 compared to $2,036.6 million ($46.14 per MWh)
in 2001. The decline in revenue in 2002 reflects lower electricity spot prices,
partially offset by improved production and availability.</font></p>
<p><font size="1" face="sans-serif">Fuel and purchased power decreased by $19.5
million ($3.19 per MWh) in the fourth quarter of 2002 and by $527.0 million
($12.87 per MWh) for the year ended Dec. 31, 2002. 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.</font></p>
<p><font size="1" face="sans-serif">Purchased power declined significantly in
the fourth quarter and the year ended Dec. 31, 2002 to $5.1 million and $32.1
million, respectively (2001 - $71.9 million and $594.9 million). The purchased
power in the fourth quarter was the result of plant outages, while the majority
of the purchased power requirement for the remainder of 2002 was due to the
economic dispatch decisions discussed earlier. Due to high market power prices
in the fourth quarter of 2002, no economic dispatch occurred in the quarter. In
the fourth quarter of 2001, expected lower availability at the Centralia plant
resulted in the purchase of 551 GWh of electricity, totalling $71.9 million. In
the year ended Dec. 31, 2001, 2,707 GWh of electricity was purchased totalling
$594.9 million. Pre-tax losses as a result of these purchases in the three and
twelve months ended Dec. 31, 2001 were US$28.0 million (approximately Cdn$47
million) and US$77.7 million (approximately Cdn$124 million), respectively.</font></p>
<p><font size="1" face="sans-serif">Fuel costs, excluding purchased power,
consist primarily of coal and natural gas costs. Total fuel costs, excluding
purchased power, were $221.8 million ($17.68 per MWh) in the fourth quarter of
2002 compared to $174.5 million ($15.07 per MWh) in 2001. For the year ended
Dec. 31, 2002, coal and natural gas costs totalled $671.5 million ($14.32 per
MWh) compared to $635.7 million ($14.40 per MWh) in 2001. TransAlta's average
fuel costs per MWh are shown below:</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="60%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" colspan="4" width="17%"><font size="1" face="sans-serif">3
      months ended Dec. 31</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td colspan="4" width="17%"><font size="1" face="sans-serif">Year ended Dec.
      31</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Coal</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="7%"><b><font size="1" face="sans-serif">12.40</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">13.91</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="7%"><b><font size="1" face="sans-serif">11.70</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">12.34</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Gas</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="7%"><b><font size="1" face="sans-serif">40.51</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">21.87</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="7%"><b><font size="1" face="sans-serif">27.86</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">26.16</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="60%"><font size="1" face="sans-serif">Average fuel costs,
      excluding purchased power</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="7%"><b><font size="1" face="sans-serif">17.68</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">15.07</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="7%"><b><font size="1" face="sans-serif">14.32</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">14.40</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font size="1" face="sans-serif">TransAlta is subject to fluctuations in
natural gas and coal costs, however the majority of the coal used in generation
is from coal reserves owned by TransAlta. This allows the corporation to control
the cost of coal. As a result of cost reduction programs, TransAlta reduced coal
costs by 11 per cent in the fourth quarter of 2002 and five per cent for the
year ended Dec. 31, 2002 compared to the same periods in 2001. The fourth
quarter increase in fuel costs per MWh, excluding purchased power, is
attributable to the 85 per cent increase in natural gas costs, partially offset
by the decrease in coal costs. The increase in gas costs is due to higher
natural gas market prices at the Big Hanaford plant and higher gas prices and
heat rates at the Sarnia plant. For contracted plants, a portion of the gas
costs have been hedged by the corporation, and in some cases, the corporation
has hedged plants' spark spreads. In certain contracted plants the gas cost is a
flow through to the customer and is not hedged by the corporation, therefore
TransAlta is still subject to fluctuations in gas prices, but the increased gas
costs are recovered through increased revenues. Gas costs for electricity to be
sold in spot markets are matched to power sales and hedged accordingly. Fuel
costs, excluding purchased power, on a per MWh basis, decreased for the year
ended Dec. 31, 2002 as a result of the decrease in coal costs, partially offset
by increased natural gas costs as discussed above.</font></p>
<p><font size="1" face="sans-serif">In the fourth quarter of 2002, operations,
maintenance and administration (OM&amp;A) expenses increased by $46.6 million
($3.26 per MWh) over the same period in 2001. The increase represents the impact
of the accelerated maintenance at the Alberta thermal plants, the commissioning
of the Sarnia and Big Hanaford plants, increased business development costs,
inventory obsolescence costs and increased project management costs related to
plants under construction. For the year ended Dec. 31, 2002, OM&amp;A increased
by $55.7 million ($0.81 per MWh) from 2001. This reflects the impact of the
items discussed above and increased insurance premiums partially offset by cost
reduction initiatives.</font></p>
<p align="right"><font color="#999999" size="6" face="sans-serif">:P9</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_10"></a>
<p align="right"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="right"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<p><font size="1" face="sans-serif">Depreciation and amortization increased by
$16.0 million ($1.00 per MWh) for the fourth quarter of 2002 and $39.8 million
($0.64 per MWh) for the year ended Dec. 31, 2002 compared to the same periods in
2001. The increase is the result of the addition of the Big Hanaford plant and
increased capital projects at thermal plants.</font></p>
<p><font size="1" face="sans-serif">The increase in taxes other than income
taxes in the three and twelve months ended Dec. 31, 2002 relates to higher
property tax assessments by local municipalities on the majority of the
corporation's plants.</font></p>
<p><b><font size="1" face="sans-serif">ENERGY MARKETING: </font><i><font size="1" face="sans-serif">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.</font></i></b></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="53%"><font size="1" face="sans-serif">The results of Energy
      Marketing are as follows:</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="10%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="10%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="53%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" colspan="4" width="19%"><font size="1" face="sans-serif">3
      months ended Dec. 31</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td colspan="4" width="23%"><font size="1" face="sans-serif">Year ended Dec.
      31</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="53%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Gross revenues</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="8%"><b><font size="1" face="sans-serif">992.4</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="8%"><font size="1" face="sans-serif">526.9</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="10%"><b><font size="1" face="sans-serif">3,703.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="10%"><font size="1" face="sans-serif">2,694.7</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Trading purchases</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">(974.5)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">(524.3)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><b><font size="1" face="sans-serif">(3,654.8)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">(2,533.7)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Net revenues</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">17.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">2.6</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><b><font size="1" face="sans-serif">49.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">161.0</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Operations, maintenance and
      administration</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">3.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">1.6</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><b><font size="1" face="sans-serif">15.1</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">36.2</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Depreciation and
      amortization</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">0.5</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">4.0</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><b><font size="1" face="sans-serif">2.5</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">11.0</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Taxes, other than income
      taxes</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><b><font size="1" face="sans-serif">0.1</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">EBIT before corporate
      allocations</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">13.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">(3.0)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><b><font size="1" face="sans-serif">31.3</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">113.8</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Corporate allocations</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">(2.3)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">(1.9)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><b><font size="1" face="sans-serif">(8.3)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">(6.6)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">EBIT</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="8%"><b><font size="1" face="sans-serif">11.5</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="8%"><font size="1" face="sans-serif">(4.9)</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="10%"><b><font size="1" face="sans-serif">23.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="10%"><font size="1" face="sans-serif">107.2</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="54%"><font size="1" face="sans-serif">Gross physical
      and financial settled sales transactions are as follows:</font></td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="10%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="10%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="53%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" colspan="4" width="19%"><font size="1" face="sans-serif">3
      months ended Dec. 31</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="center" colspan="4" width="23%"><font size="1" face="sans-serif">Year
      ended Dec. 31</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><b><font size="1" face="sans-serif">Electricity (GWh)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Physical</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">18,619</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">10,131</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><b><font size="1" face="sans-serif">63,015</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">18,504</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Financial</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">13,167</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">4,990</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><b><font size="1" face="sans-serif">40,061</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">9,115</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="53%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">31,786</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">15,121</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><b><font size="1" face="sans-serif">103,076</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">27,619</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="53%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" colspan="4" width="19%"><font size="1" face="sans-serif">3
      months ended Dec. 31</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="center" colspan="4" width="23%"><font size="1" face="sans-serif">Year
      ended Dec. 31</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><b><font size="1" face="sans-serif">Gas (million GJ)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Physical</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">26.5</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">12.2</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><b><font size="1" face="sans-serif">96.2</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">30.6</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Financial</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">19.4</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">24.3</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><b><font size="1" face="sans-serif">63.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">68.7</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="53%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">45.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">36.5</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><b><font size="1" face="sans-serif">159.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">99.3</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font size="1" face="sans-serif">The Energy Marketing group uses energy
derivatives, including physical and financial swaps, forwards and options to
earn trading revenues and gain market information. Energy contracts that meet
the definition of a derivative in the Financial Accounting Standards Board (FASB)
Statement 133, </font><i><font size="1" face="sans-serif">Accounting for
Derivative Instruments and Hedging Activities</font></i><font size="1" face="sans-serif">,
are accounted for at fair value in accordance with Canadian and U.S. GAAP.</font></p>
<p><font size="1" face="sans-serif">Derivatives are used to hedge the
corporation's exposure to changes in electricity and natural gas prices. Under
Canadian GAAP, settlement accounting is used for hedging activities if certain
criteria are met. Under U.S. GAAP, hedging activities are accounted for in
accordance with FASB Statement 133.</font></p>
<p><font color="#999999" size="6" face="sans-serif">:P10</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_11"></a>
<p align="right"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="right"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<p><font size="1" face="sans-serif">Gross trading sales volumes during the
fourth quarter of 2002 increased by 16,665 GWh of electricity and by 9.4 million
giga-joules (GJ) of gas compared to 2001. In the year ended Dec. 31, 2002,
trading volumes increased by 75,457 GWh of electricity and 60.5 million GJ of
gas compared to 2001. Liquidity in the medium- to long-term markets remained low
and as a result, Energy Marketing continued to have a low level of activity in
these markets. Coincidently, activity levels in the short-term market increased.
As expected, increased market liquidity and pricing efficiencies resulted in
margins on individual trades being reduced. TransAlta's trading activity
comprised mainly short-term transactions, the majority of which were settled
within ninety days thereby limiting risk and maintaining low working capital
requirements. Value at risk levels throughout 2002 were consistent with 2001
levels. The increase in gas trading volumes relates to the settlement of trading
positions offset in early 2002 when the gas trading book was closed. In
addition, the trading of heat rate swaps, which include a gas element and are
therefore presented as settled gas transactions, increased in 2002.</font></p>
<p><font size="1" face="sans-serif">Gross sales increased by $465.5 million in
the three months ended Dec. 31 and increased by $1,009.1 million for the year
ended Dec. 31, 2002 compared to 2001. Increased electricity trading volumes in
2002 more than offset lower market prices and the reduced gas trading activities
in the first and second quarters of 2002.</font></p>
<p><font size="1" face="sans-serif">Net revenues increased by $15.3 million for
the fourth quarter of 2002 as a result of increased trading activity and higher
percentage margins. Net revenues decreased by $112.0 million for the year ended
Dec. 31, 2002 due to significantly lower market prices and margins compared to
2001, particularly in the Pacific Northwest. The 2001 Pacific Northwest prices
were influenced by the process of deregulation in California, exacerbated by a
drought in the Pacific Northwest and historically high natural gas prices.</font></p>
<p><font size="1" face="sans-serif">In the fourth quarter of 2002, OM&amp;A
expense increased by $2.0 million due primarily to higher incentive compensation
recognized during the quarter. Incentive compensation is based on net revenues
which increased in the quarter, as discussed above. OM&amp;A decreased by $21.1
million for the year ended Dec. 31, 2002 due to lower annual incentive
compensation resulting from lower annual net revenue and one-time costs
associated with the acquisition of the remaining 50 per cent of Merchant Energy
Group of the Americas, Inc. (MEGA) in June 2001.</font></p>
<p><font size="1" face="sans-serif">Depreciation and amortization decreased by
$3.5 million in the fourth quarter of 2002 and by $8.5 million for the year
ended Dec. 31, 2002. The decrease is due to $29.3 million of goodwill arising
from the acquisition of MEGA, previously recorded as acquired intangibles, which
is no longer being amortized. This treatment is in accordance with the new
accounting standard issued by the CICA. There was no impairment of goodwill upon
adoption of the standard on Jan. 1, 2002, nor was there an impairment at Dec.
31, 2002.</font></p>
<p><font size="1" face="sans-serif">Energy Marketing's price risk management
assets and liabilities represent the fair value of unsettled (unrealized)
trading transactions. With the exception of transmission contracts, the fair
value of all energy trading activities is based on quoted market prices. The
fair value of physical transmission contracts is based on quoted market prices
and a spread option valuation model. The fair value of financial transmission
contracts is based upon statistical analysis of historical data.</font></p>
<p><font size="1" face="sans-serif">The following table illustrates movements in
the fair value of the corporation's price risk management assets (liabilities)
during the twelve months ended Dec. 31, 2002:</font></p>
<table width="891" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="811"><font size="1" face="sans-serif">Fair value of net price
      risk management assets outstanding at Dec. 31, 2001</font></td>
    <td align="center" width="6"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="51"><b><font size="1" face="sans-serif">25.8</font></b></td>
    <td width="15">&nbsp;</td>
  </tr>
  <tr>
    <td width="811"><font size="1" face="sans-serif">Fair value of new contracts
      entered into during the period</font></td>
    <td width="6">&nbsp;</td>
    <td align="right" width="51"><b><font size="1" face="sans-serif">(2.7)</font></b></td>
    <td width="15">&nbsp;</td>
  </tr>
  <tr>
    <td width="811"><font size="1" face="sans-serif">Changes in fair values
      attributable to market price and other market changes</font></td>
    <td width="6">&nbsp;</td>
    <td align="right" width="51"><b><font size="1" face="sans-serif">7.6</font></b></td>
    <td width="15">&nbsp;</td>
  </tr>
  <tr>
    <td width="811"><font size="1" face="sans-serif">Contracts realized or
      settled during the period</font></td>
    <td width="6">&nbsp;</td>
    <td align="right" width="51"><b><font size="1" face="sans-serif">(36.6)</font></b></td>
    <td width="15">&nbsp;</td>
  </tr>
  <tr>
    <td width="811"><font size="1" face="sans-serif">Changes in fair values
      attributable to changes in valuation techniques and assumptions</font></td>
    <td width="6">&nbsp;</td>
    <td align="right" width="51"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="15">&nbsp;</td>
  </tr>
  <tr>
    <td width="811">
      <hr noshade size="1">
    </td>
    <td width="6">
      <hr noshade size="1">
    </td>
    <td width="51">
      <hr noshade size="1">
    </td>
    <td width="15">&nbsp;</td>
  </tr>
  <tr>
    <td width="811"><font size="1" face="sans-serif">Fair value of net price
      risk management liabilities outstanding at Dec. 31, 2002</font></td>
    <td align="center" width="6"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="51"><b><font size="1" face="sans-serif">(5.9)</font></b></td>
    <td width="15">&nbsp;</td>
  </tr>
  <tr>
    <td width="811">
      <hr noshade size="1">
    </td>
    <td width="6">
      <hr noshade size="1">
    </td>
    <td width="51">
      <hr noshade size="1">
    </td>
    <td width="15">&nbsp;</td>
  </tr>
</table>
<p align="right"><font color="#999999" size="6" face="sans-serif">:P11</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_12"></a>
<p align="right"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="right"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<p><font size="1" face="sans-serif">The source of the valuations of the above
contracts and maturities over each of the next five calendar years and
thereafter is as follows:</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="32%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="center" colspan="2" width="4%"><font size="1" face="sans-serif">2008
      and</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="32%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">2003</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">2004</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">2005</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">2006</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">2007</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" colspan="2" width="4%"><font size="1" face="sans-serif">thereafter</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><font size="1" face="sans-serif">Total</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="32%"><font size="1" face="sans-serif">Prices actively quoted</font></td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(17.6)</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">3.3</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">3.2</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">2.1</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">1.5</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="2%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">(7.5)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="32%"><font size="1" face="sans-serif">Prices based on models</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">1.6</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="2%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">1.6</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="32%"><font size="1" face="sans-serif">Asset (liability)</font></td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(16.0)</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">3.3</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">3.2</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">2.1</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">1.5</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="2%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">(5.9)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font size="1" face="sans-serif">In 2002, TransAlta responded to a number of
inquiries from various U.S. State and Federal bodies regarding trading
activities in California and states in the Pacific Northwest during 2000 and
2001. TransAlta believes it operated in accordance with all applicable laws,
rules, regulations and tariffs. No significant developments have occurred on
these issues as a result of TransAlta's responses.</font></p>
<p><font size="1" face="sans-serif">In the fourth quarter of 2002, two class
action lawsuits on behalf of all persons and businesses in the states of Oregon
and Washington were initiated in respect of alleged unlawful practices in the
purchase and sale of wholesale energy. TransAlta believes these are without
merit and will vigorously defend its actions.</font></p>
<p><font size="1" face="sans-serif">In 2000, TransAlta made a provision of
US$28.8 million against US$58.0 million owing from the California Independent
System Operator and the California Power Exchange. During 2001, US$5.0 million
was collected. No change has been made to the provision due to the continuing
uncertainty in California. The amount has been reclassified to long-term, as
collection is no longer expected in 2003, although ultimate collection is still
expected. On Dec. 12, 2002, a U.S. Federal Energy Regulatory Commission (FERC)
Administrative Law Judge proposed that TransAlta receive approximately US$44.0
million, however FERC has indicated that further adjustments in respect of power
and gas prices may occur, which could result in further alterations of the
amount TransAlta is to receive. As a result, TransAlta has not adjusted the
amount receivable or the provision.</font></p>
<p><b><font size="1" face="sans-serif">N E T I N T E R E S T E X P E N S E , O T
H E R E X P E N S E , F O R E I G N E X C H A N G E , N O N - C O N T R O L L I
N G I N T E R E S T S A N D P R E F E R R E D S E C U R I T I E S D I S T R I B
U T I O N S</font></b></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="57%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" colspan="4" width="18%"><font size="1" face="sans-serif">3
      months ended Dec. 31</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td colspan="4" width="18%"><font size="1" face="sans-serif">Year ended Dec.
      31</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Gross interest expense</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="8%"><b><font size="1" face="sans-serif">46.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="8%"><font size="1" face="sans-serif">42.4</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">172.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="8%"><font size="1" face="sans-serif">170.3</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Interest income</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">(1.7)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">(8.7)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">(8.7)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">(24.2)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Interest allocated to
      discontinued operations</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">(0.6)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">(2.4)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">(9.7)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Capitalized interest</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">(21.0)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">(20.7)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">(79.1)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">(48.3)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Net interest expense</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">24.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">12.4</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">82.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">88.1</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Other income</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">(1.0)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">(1.2)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">(0.1)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">(1.5)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Foreign exchange gain</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">(0.9)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">(2.9)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">(1.2)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">(0.8)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Non-controlling interests</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">5.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">5.0</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">20.1</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">20.6</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Preferred securities
      distributions, net of tax</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">4.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">3.5</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">20.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">13.1</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="57%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="8%"><b><font size="1" face="sans-serif">32.4</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="8%"><font size="1" face="sans-serif">16.8</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">122.4</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="8%"><font size="1" face="sans-serif">119.5</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font size="1" face="sans-serif">On June 20, 2002, the corporation issued
US$300.0 million of senior notes under a US$1.0 billion shelf prospectus filed
May 14, 2002. The proceeds of the issuance were used to repay short-term debt
and U.S. denominated commercial paper. The notes are unsecured and bear interest
at 6.75 per cent and mature on July 15, 2012.</font></p>
<p><font color="#999999" size="6" face="sans-serif">:P12</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_13"></a>
<p align="right"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="right"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<p><font size="1" face="sans-serif">Net interest expense increased by $11.6
million in the three months ended Dec. 31, 2002 compared to the same period of
2001. The increase was primarily due to a higher proportion of debt subject to
long-term interest rates and lower interest income due to the receipt of the
$180.3 million receivable from Aquila Networks Canada (formerly UtiliCorp
Networks Canada) that arose from the sale of the Alberta Distribution and Retail
(D&amp;R) operation. Net interest expense decreased by $5.4 million for the year
ended Dec. 31, 2002 as a result of an overall decline in average debt levels and
higher capitalized interest, offset by a higher proportion of debt subject to
long-term interest rates and receipt of the interest-bearing receivable from
Aquila Networks Canada.</font></p>
<p><font size="1" face="sans-serif">The increase in earnings attributable to
non-controlling interests in the fourth quarter of 2002 compared to 2001 is
attributable to increased quarterly earnings relating to the 49.99 per cent
non-controlling interest in TransAlta Cogeneration, L.P. The decrease for the
year ended Dec. 31, 2002 compared to 2001 is the result of the redemption of the
preferred shares of TransAlta Utilities Corporation for $121.6 million in
September 2001, resulting in lower subsidiary preferred share dividends, offset
by higher earnings from TransAlta Cogeneration, L.P.</font></p>
<p><font size="1" face="sans-serif">The increases in preferred securities
distributions, net of tax, reflect the issuance of $175.0 million of 7.75 per
cent preferred securities in November 2001.</font></p>
<p><b><font size="1" face="sans-serif">I N C O M E T A X E S</font></b></p>
<p><font size="1" face="sans-serif">Income tax expense (recovery) Effective tax
rate</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="3%">&nbsp;</td>
    <td align="right" colspan="4" width="42%"><font size="1" face="sans-serif">3
      months ended Dec. 31</font></td>
    <td width="6%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td colspan="4" width="42%"><font size="1" face="sans-serif">Year ended Dec.
      31</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="3%">&nbsp;</td>
    <td width="20%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="6%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="13%"><font size="1" face="sans-serif">2001</font></td>
    <td width="6%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="17%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="6%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="17%"><font size="1" face="sans-serif">2001</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="3%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="20%"><b><font size="1" face="sans-serif">(35.1)</font></b></td>
    <td width="6%">&nbsp;</td>
    <td align="right" width="3%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="13%"><font size="1" face="sans-serif">0.5</font></td>
    <td width="6%">&nbsp;</td>
    <td width="3%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="17%"><b><font size="1" face="sans-serif">18.1</font></b></td>
    <td width="6%">&nbsp;</td>
    <td width="3%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="17%"><font size="1" face="sans-serif">89.9</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="3%">&nbsp;</td>
    <td width="20%"><b><font size="1" face="sans-serif">39.4%</font></b></td>
    <td width="6%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="13%"><font size="1" face="sans-serif">1.2%</font></td>
    <td width="6%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="17%"><b><font size="1" face="sans-serif">15.6%</font></b></td>
    <td width="6%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="17%"><font size="1" face="sans-serif">30.7%</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font size="1" face="sans-serif">An income tax recovery of $35.1 million was
recorded for the three months ended Dec. 31, 2002, compared to income tax
expense of $0.5 million for the same period in 2001. The recovery reflects the
loss incurred in the current quarter. Income taxes decreased by $71.8 million
for the year ended Dec. 31, 2002 due to lower earnings and the impact of the
Wabamun decommissioning and the turbine cancellation charges, which were
recognized at the marginal rate. The decrease also reflects the benefit of
previously unrecognized tax losses that were recognized in the third quarter of
2002 as it became more likely than not that they would be utilized. The
effective income tax rate, expressed as a percentage of earnings from continuing
operations before income taxes and non-controlling interests, decreased to 15.6
per cent in 2002 from 30.7 per cent in 2001. The effective tax rate in 2002
reflects the impact of the issues discussed above. Due to lower earnings in the
three months ended Dec. 31, 2001, the 1.2 per cent effective rate reflects the
impact of the financing arrangements of TransAlta's foreign operations. The
benefits of these arrangements do not vary with earnings.</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="33%"><b><font size="1" face="sans-serif">D I S C O N T I N U E D</font></b></td>
    <td width="28%"><b><font size="1" face="sans-serif">O P E R A T I O N S</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="33%">&nbsp;</td>
    <td width="28%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" colspan="4" width="15%"><font size="1" face="sans-serif">3
      months ended Dec. 31</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td colspan="4" width="17%"><font size="1" face="sans-serif">Year ended Dec.
      31</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="33%">&nbsp;</td>
    <td width="28%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="61%"><font size="1" face="sans-serif">Transmission
      operation</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">13.3</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">12.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">44.4</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="61%"><font size="1" face="sans-serif">Gain on
      disposal of Transmission operation</font></td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">10.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">120.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="61%"><font size="1" face="sans-serif">Edmonton
      Composter operation</font></td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">0.7</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="33%">&nbsp;</td>
    <td width="28%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="6%"><b><font size="1" face="sans-serif">10.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">13.3</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">132.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">45.1</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font size="1" face="sans-serif">As discussed in significant one-time items,
TransAlta sold its Transmission operation in April 2002 for proceeds of $820.7
million. The disposal resulted in an after-tax gain on sale of $120.0 million
($0.71 per common share).</font></p>
<p><font size="1" face="sans-serif">On June 29, 2001, TransAlta sold its
Edmonton Composter for proceeds of $97.0 million, which approximated its book
value.</font></p>
<p align="right"><font color="#999999" size="6" face="sans-serif">:P13</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_14"></a>
<p align="right"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="right"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<p><b><font size="1" face="sans-serif">F I N A N C I A L P O S I T I O N</font></b></p>
<p><font size="1" face="sans-serif">The following chart outlines significant
changes in the consolidated balance sheet from Dec. 31, 2001 to Dec. 31, 2002:</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="38%">&nbsp;</td>
    <td colspan="2" width="7%"><font size="1" face="sans-serif">Increase /
      (decrease)</font></td>
    <td width="55%"><font size="1" face="sans-serif">Explanation</font></td>
  </tr>
  <tr>
    <td colspan="4">
      <hr noshade size="1">
    </td>
  </tr>
  <tr>
    <td width="38%"><font size="1" face="sans-serif">Cash and cash equivalents</font></td>
    <td width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">81.3</font></td>
    <td width="55%"><font size="1" face="sans-serif">Refer to Consolidated
      Statements of Cash Flows.</font></td>
  </tr>
  <tr>
    <td width="38%"><font size="1" face="sans-serif">Accounts receivable and
      other</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(156.9)</font></td>
    <td width="55%"><font size="1" face="sans-serif">Decrease primarily due to
      collection of receivable related to</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">monetized Pierce Power
      hedges ($82.0 million),</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">reclassification of
      California receivables to long-term</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">(US$24.2 million) and the
      sale of the Transmission</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">business, ($31.7 million).</font></td>
  </tr>
  <tr>
    <td width="38%"><font size="1" face="sans-serif">Materials and supplies, at
      average cost</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">27.2</font></td>
    <td width="55%"><font size="1" face="sans-serif">Higher coal inventory
      balances as a result of second and</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">third quarter economic
      dispatch decisions, increased coal</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">production and advanced
      maintenance at the Alberta</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">thermal plants.</font></td>
  </tr>
  <tr>
    <td width="38%"><font size="1" face="sans-serif">Long-term receivables</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(181.5)</font></td>
    <td width="55%"><font size="1" face="sans-serif">Receipt of amount due from
      Aquila (formerly UtiliCorp)</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">relating to the sale of the
      discontinued D&amp;R operation</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">($180.3 million) and
      reclass of sulphur tax abatement ($45.0</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">million) to current
      receivables, offset by reclassification of</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">California receivables to
      long-term (US$24.2 million).</font></td>
  </tr>
  <tr>
    <td width="38%"><font size="1" face="sans-serif">Property, plant and
      equipment, net of</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(59.7)</font></td>
    <td width="55%"><font size="1" face="sans-serif">Capital expenditures and
      construction activity during the</font></td>
  </tr>
  <tr>
    <td width="38%"><font size="1" face="sans-serif">accumulated depreciation</font></td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">period and acquisition of
      Vision Quest, more than offset by</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">depreciation, the sale of
      the Transmission business, the</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">impairment charge relating
      to the decommissioning of the</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">Wabamun plant and equipment
      cancellation charges.</font></td>
  </tr>
  <tr>
    <td width="38%"><font size="1" face="sans-serif">Goodwill</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">27.2</font></td>
    <td width="55%"><font size="1" face="sans-serif">Acquisition of Vision Quest
      in December 2002.</font></td>
  </tr>
  <tr>
    <td width="38%"><font size="1" face="sans-serif">Future income tax assets</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">56.6</font></td>
    <td width="55%"><font size="1" face="sans-serif">2001 U.S. operating losses
      that will be recovered in future</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">years.</font></td>
  </tr>
  <tr>
    <td width="38%"><font size="1" face="sans-serif">Other assets</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">29.5</font></td>
    <td width="55%"><font size="1" face="sans-serif">Long-term prepayments
      related to the Sarnia plant and</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">financing costs related to
      US$300.0 million debt issuance</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">and financing costs related
      to the Mexican projects.</font></td>
  </tr>
  <tr>
    <td width="38%"><font size="1" face="sans-serif">Short-term debt</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(247.2)</font></td>
    <td width="55%"><font size="1" face="sans-serif">Repayment with a portion of
      the proceeds from US$300.0</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">million debt issuance and
      proceeds from disposal of the</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">Transmission operation.</font></td>
  </tr>
  <tr>
    <td width="38%"><font size="1" face="sans-serif">Accounts payable and
      accrued liabilities</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(155.3)</font></td>
    <td width="55%"><font size="1" face="sans-serif">Decrease due to lower
      capital expenditures in the quarter.</font></td>
  </tr>
  <tr>
    <td width="38%"><font size="1" face="sans-serif">Price risk management
      liabilities</font></td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%">&nbsp;</td>
  </tr>
  <tr>
    <td width="38%"><font size="1" face="sans-serif">(current and long-term)</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">41.3</font></td>
    <td width="55%"><font size="1" face="sans-serif">Decrease in margins on
      energy trading activities.</font></td>
  </tr>
  <tr>
    <td width="38%"><font size="1" face="sans-serif">Long-term debt (including
      current portion)</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">195.5</font></td>
    <td width="55%"><font size="1" face="sans-serif">US$300.0 million debt
      issuance, offset by maturity of</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">debentures of $100 million
      and net decrease in long-term</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">commercial paper repaid
      with proceeds on disposal of the</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">Transmission business.</font></td>
  </tr>
  <tr>
    <td width="38%"><font size="1" face="sans-serif">Non-controlling interests</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(18.0)</font></td>
    <td width="55%"><font size="1" face="sans-serif">Acquisition of remaining
      interest in Southern Cross Energy</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">($7.2 million) and
      decreased non-controlling interest in</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">TransAlta Cogeneration,
      L.P. as a result of distributions in</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">excess of net income.</font></td>
  </tr>
  <tr>
    <td width="38%"><font size="1" face="sans-serif">Shareholders' equity</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">49.9</font></td>
    <td width="55%"><font size="1" face="sans-serif">Net earnings and issuance
      of common shares for Vision</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">Quest acquisition,
      partially offset by dividends and net</font></td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="55%"><font size="1" face="sans-serif">redemption of common
      shares.</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
  </tr>
</table>
<p><font color="#999999" size="6" face="sans-serif">:P14</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_15"></a>
<p align="left"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="left"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<p><b><font size="1" face="sans-serif">S T A T E M E N T S O F C A S H F L O W S
:</font></b></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="70%"><i><font size="1" face="sans-serif">3 months ended Dec. 31</font></i></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="14%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="14%"><font size="1" face="sans-serif">2001</font></td>
  </tr>
  <tr>
    <td colspan="5">
      <hr noshade size="1">
    </td>
  </tr>
  <tr>
    <td width="70%"><font size="1" face="sans-serif">Cash and cash equivalents,</font></td>
    <td width="2%">&nbsp;</td>
    <td width="14%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="14%">&nbsp;</td>
  </tr>
  <tr>
    <td width="70%"><font size="1" face="sans-serif">beginning of period</font></td>
    <td align="center" width="2%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="14%"><b><font size="1" face="sans-serif">120.6</font></b></td>
    <td width="2%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">61.5</font></td>
  </tr>
  <tr>
    <td width="70%"><font size="1" face="sans-serif">Provided by (used in):</font></td>
    <td width="2%">&nbsp;</td>
    <td width="14%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="14%">&nbsp;</td>
  </tr>
  <tr>
    <td width="70%"><font size="1" face="sans-serif">Operating activities</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="14%"><b><font size="1" face="sans-serif">189.5</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="14%"><font size="1" face="sans-serif">131.7</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="70%"><font size="1" face="sans-serif">Investing activities</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="14%"><b><font size="1" face="sans-serif">(261.0)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="14%"><font size="1" face="sans-serif">(366.1)</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="70%"><font size="1" face="sans-serif">Financing activities</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="14%"><b><font size="1" face="sans-serif">96.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="14%"><font size="1" face="sans-serif">230.9</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="70%"><font size="1" face="sans-serif">Translation of foreign
      currency cash</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="14%"><b><font size="1" face="sans-serif">(2.5)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="14%"><font size="1" face="sans-serif">4.0</font></td>
  </tr>
  <tr>
    <td colspan="5">
      <hr noshade size="1">
    </td>
  </tr>
  <tr>
    <td width="70%"><font size="1" face="sans-serif">Cash and cash equivalents,</font></td>
    <td width="2%">&nbsp;</td>
    <td width="14%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="14%">&nbsp;</td>
  </tr>
  <tr>
    <td width="70%"><font size="1" face="sans-serif">end of period</font></td>
    <td align="center" width="2%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="14%"><b><font size="1" face="sans-serif">143.3</font></b></td>
    <td width="2%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">62.0</font></td>
  </tr>
  <tr>
    <td colspan="5">
      <hr noshade size="1">
    </td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="70%"><i><font size="1" face="sans-serif">Year ended Dec. 31</font></i></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="14%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="14%"><font size="1" face="sans-serif">2001</font></td>
  </tr>
  <tr>
    <td colspan="5">
      <hr noshade size="1">
    </td>
  </tr>
  <tr>
    <td width="70%"><font size="1" face="sans-serif">Cash and cash equivalents,</font></td>
    <td width="2%">&nbsp;</td>
    <td width="14%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="14%">&nbsp;</td>
  </tr>
  <tr>
    <td width="70%"><font size="1" face="sans-serif">beginning of period</font></td>
    <td align="center" width="2%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="14%"><b><font size="1" face="sans-serif">62.0</font></b></td>
    <td width="2%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">53.8</font></td>
  </tr>
  <tr>
    <td width="70%"><font size="1" face="sans-serif">Provided by (used in):</font></td>
    <td width="2%">&nbsp;</td>
    <td width="14%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="14%">&nbsp;</td>
  </tr>
  <tr>
    <td width="70%"><font size="1" face="sans-serif">Operating activities</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="14%"><b><font size="1" face="sans-serif">437.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="14%"><font size="1" face="sans-serif">715.6</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="70%"><font size="1" face="sans-serif">Investing activities</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="14%"><b><font size="1" face="sans-serif">(36.2)</font></b></td>
    <td align="right" colspan="2" width="15%"><font size="1" face="sans-serif">(1,076.9)</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="70%"><font size="1" face="sans-serif">Financing activities</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="14%"><b><font size="1" face="sans-serif">(320.9)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="14%"><font size="1" face="sans-serif">368.7</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="70%"><font size="1" face="sans-serif">Translation of foreign
      currency cash</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="14%"><b><font size="1" face="sans-serif">0.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="14%"><font size="1" face="sans-serif">0.8</font></td>
  </tr>
  <tr>
    <td colspan="5">
      <hr noshade size="1">
    </td>
  </tr>
  <tr>
    <td width="70%"><font size="1" face="sans-serif">Cash and cash equivalents,</font></td>
    <td width="2%">&nbsp;</td>
    <td width="14%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="14%">&nbsp;</td>
  </tr>
  <tr>
    <td width="70%"><font size="1" face="sans-serif">of period</font></td>
    <td align="center" width="2%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="14%"><b><font size="1" face="sans-serif">143.3</font></b></td>
    <td width="2%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="14%"><font size="1" face="sans-serif">62.0</font></td>
  </tr>
  <tr>
    <td colspan="5">
      <hr noshade size="1">
    </td>
  </tr>
</table>
<p><font size="1" face="sans-serif">Explanation</font></p>
<p><font size="1" face="sans-serif">Lower cash operating earnings offset by
decreased working capital requirements due to collection of income taxes
receivable related to U.S. operations in 2001.</font></p>
<p><font size="1" face="sans-serif">In 2002, capital expenditures of $194.6
million relating primarily to construction of Sarnia and the Mexico plants,
acquisition of Vision Quest for $41.1 million (less cash acquired of $8.2
million) and acquisition of remaining interest in Southern Cross Energy (SCE)
for $7.2 million. In 2001, capital expenditures included the installation of the
scrubber at the Centralia plant and construction of the Big Hanaford plant.</font></p>
<p><font size="1" face="sans-serif">In 2002, net increase in short-term debt,
offset by $100.0 million debenture maturity, net repayment of commercial paper
and cash dividends of $29.5 million.</font></p>
<p><font size="1" face="sans-serif">In 2001, debt issuances of $125.0 million
and $169.4 million proceeds on issuance of preferred securities, offset by
dividends of $28.7 million and redemption of common shares of $14.2 million.</font></p>
<p><font size="1" face="sans-serif">Explanation</font></p>
<p><font size="1" face="sans-serif">Lower cash operating earnings as a result of
the impact of the Wabamun arbitration and prior period regulatory decisions,
offset by increased working capital requirements due to the timing of the
ancillary revenue settlement ($49.9 million), timing of accounts receivable
relating to the Alberta Power Pool for Generation due to deregulation on Jan. 1,
2001 ($170.0 million), and the final instalment of 2001 income taxes paid in the
first quarter of 2002 ($109.0 million).</font></p>
<p><font size="1" face="sans-serif">In 2002, proceeds on the disposal of the
Transmission operation and collection of amounts receivable from Aquila
(formerly UtiliCorp) related to the sale of the discontinued Alberta D&amp;R
operation in 2000, offset by capital expenditures relating to the construction
of the Sarnia, Big Hanaford, Campeche and Chihuahua plants, the acquisition of
Vision Quest and the remaining portion of SCE as well as the installation of the
scrubber at the Centralia plant during the second quarter.</font></p>
<p><font size="1" face="sans-serif">In 2001, capital expenditures relating
primarily to the installation of the scrubber at the Centralia plant and
construction of the Sarnia, Big Hanaford and Campeche plants were offset by
proceeds on the disposal of the Edmonton Composter, Mildred Lake, Fort Nelson
and Fort Saskatchewan plants.</font></p>
<p><font size="1" face="sans-serif">In 2002, the issuance of US$300.0 million in
long-term notes offset by the repayment of short- and long-term debt, payment of
common share and preferred securities distributions, and repurchase of common
shares.</font></p>
<p><font size="1" face="sans-serif">In 2001, net long-term borrowings offset by
redemption of preferred shares of a subsidiary, common and preferred share
dividends and repurchase of common shares.</font></p>
<p align="right"><font color="#999999" size="6" face="sans-serif">:P15</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_16"></a>
<p><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A L T A C O R P
O R A T I O N</font></b></p>
<p><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E R L Y R E P O
R T 2 0 0 2</font></b></p>
<p><b><font size="1" face="sans-serif">O U T L O O K</font></b></p>
<p><font size="1" face="sans-serif">The key factors affecting the financial
results for 2003 continue to be the megawatt capacity in place, the availability
of and production from generating assets, the pricing applicable to
non-contracted production, the costs of production, and the volumes traded and
margins achieved on Energy Marketing activities.</font></p>
<p><font size="1" face="sans-serif">Generating capacity in 2003 will be higher
than in 2002 due to the addition of the 575 MW Sarnia plant which will commence
commercial operations in the first quarter of 2003. 55 MW of added capacity at
Sarnia is forecasted for 2005. The acquisition of Vision Quest in December 2002
added 44 MW of capacity with a further 37.5 MW scheduled to commence operation
in the second quarter of 2003. The 252 MW Campeche and 259 MW Chihuahua plants
in Mexico are scheduled to commence commercial operations in the first and third
quarters of 2003, respectively. These increases will be partially offset by the
shutdown in November 2002 of unit three at the Wabamun facility (147 MW).
Availability for 2003 is expected to be similar to 2002, however production is
expected to be higher than in 2002 due to the increased capacity.</font></p>
<p><font size="1" face="sans-serif">Electricity spot prices in 2003 are expected
to be similar to those in 2002 for the Alberta market and higher in the Pacific
Northwest. However, spark spreads (the difference between electricity prices and
cost of gas consumed) are expected to compress due to the proportionately higher
increase in the cost of natural gas. Expected electricity demand compared to
levels of supply is expected to prevent prices from materially increasing over
the medium term.</font></p>
<p><font size="1" face="sans-serif">Legislation was passed in Ontario in late
2002 capping retail market prices at $43 per MWh. However, wholesale market
prices have not been directly impacted by this decision. Some of the legislation
has not yet been clarified and as a result, revenues for merchant capacity at
the Sarnia plant may be affected.</font></p>
<p><font size="1" face="sans-serif">Exposure to volatility in electricity prices
is substantially mitigated through firm price long-term electricity sales
contracts. Exposure to volatility in gas prices is substantially mitigated by
the flow-through of the costs of natural gas to customers in some of these
contracts and the existence of price caps in certain natural gas supply
contracts. For 2003, approximately 88 per cent of output will be contracted, a
significant portion of which relates to the Alberta PPAs which are capacity
related based on achieving agreed availability rates. The corporation will
continue to focus on the maximization of revenues from these contracts. For
non-contracted sales, the historic correlation between natural gas and
electricity prices is expected to weaken in 2003, resulting in a compression of
spark spreads for non-contracted plants compared to 2002.</font></p>
<p><font size="1" face="sans-serif">TransAlta is continuing its focus on
reducing coal costs and ongoing operating (OM&amp;A) expenses. The areas for
reductions were identified in the fourth quarter of 2001 and have been, and
continue to be, implemented. The benefits of these initiatives are beginning to
be realized, and are expected to become fully apparent in 2003 and beyond.
However, it is expected there will be more planned maintenance in the Alberta
thermal plants in 2003 than in 2002.</font></p>
<p><font size="1" face="sans-serif">Energy Marketing anticipates that short-term
markets will continue to be active. Liquidity in the medium- and longer-term
markets continues to be low, however there is a need for the types of products
offered in these markets and the corporation hopes that additional creditworthy
counterparties will begin to emerge and thereby increase liquidity. The
financial performance of Energy Marketing activities is expected to be similar
to that achieved in 2002.</font></p>
<p><font size="1" face="sans-serif">In 2003, capital expenditures will be
approximately $830 million, of which approximately $275 million will be spent on
the Genesee Phase three project, described below, approximately $170 million
will be spent to complete the two Mexican plants, $60 million on other growth
projects and approximately $325 million on maintenance and productivity
expenditures as a result of the planned outages and preventative maintenance.
Included in the maintenance and productivity expenditures is $25 million in
respect of CE Generation LLC (CE Gen), described below. Financing for these
expenditures is expected to come from a combination of cash flow from
operations, monetization of selected assets, issuance of common shares and the
issuance of debt. TransAlta has access to a wide variety of sources of capital
including: a $1.5 billion medium-term note program; a US$1.0 billion shelf
prospectus; a $1.0 billion commercial paper program; and approximately $2.0
billion of bank credit facilities.</font></p>
<p><font color="#999999" size="6" face="sans-serif">:P16</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_17"></a>
<p><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A L T A C O R P
O R A T I O N</font></b></p>
<p><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E R L Y R E P O
R T 2 0 0 2</font></b></p>
<p><font size="1" face="sans-serif">On Jan. 24, 2003 the corporation announced
the acquisition of 50 per cent of the membership interests in CE Gen for
US$205.0 million (approximately Cdn$312 million) plus approximately US$35.0
million of working capital (approximately Cdn$53 million) and the assumption of
non-recourse debt of approximately US$500.0 million (approximately Cdn$762
million). MidAmerican Energy Holdings Company is the other 50 per cent member of
CE Gen. CE Gen, through its subsidiaries, is primarily engaged in the
development, ownership and operation of independent power production facilities
in the United States utilizing geothermal and natural gas resources. CE Gen has
13 facilities with an aggregate operating capacity of 820 MW. The transaction
closed on Jan. 29, 2003.</font></p>
<p><font size="1" face="sans-serif">On Jan. 13, 2003, TransAlta and EPCOR
Utilities Inc. (EPCOR) announced an agreement for TransAlta to acquire a 50 per
cent interest in EPCOR's Genesee Phase three project for $395.0 million. On the
same date, TransAlta paid EPCOR $157.0 million for TransAlta's share of project
costs incurred to date. The 450 MW addition to the existing Genesee Generating
Station is currently under construction southwest of Edmonton, Alberta. The two
corporations will own and share costs for Genesee Phase 3 equally. EPCOR will
continue to manage the project's construction and will operate the plant upon
commercial operation in early 2005. Both parties will independently dispatch and
market their share of the electrical output from the unit through the Alberta
Power Pool. Included in the arrangement is an option for EPCOR to purchase a 50
per cent interest in TransAlta's Centennial one project described below. The
option expires Dec. 31, 2005. EPCOR also has the option to purchase a 50 per
cent interest in TransAlta's Sarnia plant, which may be exercised between
January 2003 and March 2004.</font></p>
<p><font size="1" face="sans-serif">In February 2002, the EUB approved the
previously announced Centennial project, which is a 900 MW merchant expansion at
the Keephills site. Phase one of the project is now part of the arrangement with
EPCOR and the two corporations will jointly proceed with the development phase
of the project. The decision to construct phase one will be made in sufficient
time to ensure that the plant is operational when market conditions are
appropriate. EPCOR has an option to participate in the construction and
ownership of the project.</font></p>
<p><font size="1" face="sans-serif">TransAlta will continue to focus on
exploring strategic acquisitions and additional greenfield opportunities. Growth
will only be undertaken to the extent that is affordable and supported by the
balance sheet.</font></p>
<p><font size="1" face="sans-serif">On Dec. 16, 2002, the Canadian government
ratified the Kyoto Protocol. The Kyoto Protocol will have no impact on
TransAlta's U.S., Mexican or Australian operations as these countries have not
ratified the Protocol. TransAlta is not able to estimate the full impact the
Protocol will have on its Canadian operations, as the Canadian government has
not yet established an implementation plan. However, the PPAs for TransAlta's
coal-fired plants in Alberta contain 'Change in Law' provisions that provide an
opportunity to recover compliance costs from the PPA customers. As a member of
the Canadian Clean Power Coalition, TransAlta, along with its peers, is
exploring other means to reduce greenhouse gas emissions, including the purchase
of offset credits. The acquisition of Vision Quest and its prospects for further
developments has resulted in the additional amounts of zero-emissions facilities
consistent with the strategy of the corporation. Since 1990 the corporation has
reduced net emissions by 18 per cent and is on track to reach zero net emissions
by 2024.</font></p>
<p align="right"><font color="#999999" size="6" face="sans-serif">:P17</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_18"></a>
<p><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A L T A C O R P
O R A T I O N</font></b></p>
<p><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E R L Y R E P O
R T 2 0 0 2</font></b></p>
<p><b><font size="1" face="sans-serif">T R A N S A L T A C O R P O R A T I O N</font></b></p>
<p><b><font size="1" face="sans-serif">C O N S O L I D A T E D S T A T E M E N T
S O F E A R N I N G S A N D R E T A I N E D E A R N I N G S</font></b></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="61%"><i><font size="1" face="sans-serif">(in millions of Canadian
      dollars except per share amounts)</font></i></td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" colspan="4" width="16%"><font size="1" face="sans-serif">3
      months ended Dec. 31</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td colspan="4" width="18%"><font size="1" face="sans-serif">Year ended Dec.
      31</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td colspan="4" width="16%"><b><font size="1" face="sans-serif">Unaudited</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="8%"><b><font size="1" face="sans-serif">Unaudited</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">Audited*</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="8%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><b><font size="1" face="sans-serif">Revenues</font></b></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="7%"><b><font size="1" face="sans-serif">517.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">434.4</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">1,723.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">2,319.4</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Fuel and purchased power</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">(226.9)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">(246.4)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(703.6)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(1,230.6)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><b><font size="1" face="sans-serif">Gross margin</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">290.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">188.0</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">1,020.3</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">1,088.8</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><b><font size="1" face="sans-serif">Operating expenses</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Operations, maintenance and
      administration</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">135.1</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">89.4</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">420.5</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">392.2</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Depreciation and
      amortization</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">62.5</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">51.8</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">219.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">191.2</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Asset impairment and
      equipment cancellation charges </font><i><font size="1" face="sans-serif">(Note
      6)</font></i></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">152.5</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">2.7</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">152.5</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">118.8</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Taxes, other than income
      taxes</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">7.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">4.6</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">27.4</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">18.7</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="61%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">357.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">148.5</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">819.4</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">720.9</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><b><font size="1" face="sans-serif">Operating income (loss)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">(67.0)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">39.5</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">200.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">367.9</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Other income</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">1.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">1.2</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">0.1</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">1.5</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Foreign exchange gain</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">0.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">2.9</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">1.2</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">0.8</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Net interest expense</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">(24.0)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">(12.4)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(82.7)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(88.1)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><b><font size="1" face="sans-serif">Earnings (loss) from
      continuing operations before regulatory</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><b><font size="1" face="sans-serif">decisions, income taxes
      and non-controlling interests</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">(89.1)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">31.2</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">119.5</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">282.1</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Prior period regulatory
      decisions </font><i><font size="1" face="sans-serif">(Note 10)</font></i></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">11.0</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(3.3)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">11.0</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><b><font size="1" face="sans-serif">Earnings (loss) from
      continuing operations before income taxes</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><b><font size="1" face="sans-serif">and non-controlling
      interests</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">(89.1)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">42.2</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">116.2</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">293.1</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Income tax expense
      (recovery)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">(35.1)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">0.5</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">18.1</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">89.9</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Non-controlling interests</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">5.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">5.0</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">20.1</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">20.6</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><b><font size="1" face="sans-serif">Earnings (loss) from
      continuing operations</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">(59.6)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">36.7</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">78.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">182.6</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Earnings from discontinued
      operations </font><i><font size="1" face="sans-serif">(Note 3)</font></i></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">13.3</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">12.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">45.1</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Gain on disposal of
      discontinued operations </font><i><font size="1" face="sans-serif">(Note
      3)</font></i></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">10.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">120.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><b><font size="1" face="sans-serif">Net earnings (loss)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">(49.6)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">50.0</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">210.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">227.7</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Preferred securities
      distributions, net of tax</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">4.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">3.5</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">20.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">13.1</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><b><font size="1" face="sans-serif">Net earnings (loss)
      applicable to common shareholders</font></b></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="7%"><b><font size="1" face="sans-serif">(54.3)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">46.5</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">189.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">214.6</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><b><font size="1" face="sans-serif">Common share dividends</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">(42.3)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">(41.7)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(169.0)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(168.4)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><b><font size="1" face="sans-serif">Adjustment arising from
      normal course issuer bid</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">(14.1)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(27.0)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(34.8)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><b><font size="1" face="sans-serif">Retained earnings</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Opening balance</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">928.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">847.6</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">838.3</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">826.9</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Closing balance</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="7%"><b><font size="1" face="sans-serif">832.2</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">838.3</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">832.2</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">838.3</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><b><font size="1" face="sans-serif">Weighted average common
      shares outstanding in the period</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">169.3</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">168.9</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">169.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">168.9</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><b><font size="1" face="sans-serif">Basic earnings (loss)
      per share</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Continuing operations</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="7%"><b><font size="1" face="sans-serif">(0.38)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">0.19</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">0.34</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">1.00</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Earnings from discontinued
      operations</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">0.08</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">0.07</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">0.27</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><b><font size="1" face="sans-serif">Net earnings (loss) from
      operations</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">(0.38)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">0.27</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">0.41</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">1.27</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Gain on disposal of
      discontinued operations, net of tax</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">0.06</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">0.71</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><b><font size="1" face="sans-serif">Net earnings (loss)</font></b></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="7%"><b><font size="1" face="sans-serif">(0.32)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">0.27</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">1.12</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">1.27</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><b><font size="1" face="sans-serif">Diluted earnings (loss)
      per share</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Earnings (loss) from
      continuing operations</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="7%"><b><font size="1" face="sans-serif">(0.38)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">0.19</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">0.34</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">0.98</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Earnings from discontinued
      operations</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">0.08</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">0.07</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">0.27</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><b><font size="1" face="sans-serif">Net earnings (loss) from
      operations</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">(0.38)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">0.27</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">0.41</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">1.25</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Gain on disposal of
      discontinued operations, net of tax</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">0.06</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">0.71</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%">-</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><b><font size="1" face="sans-serif">Net earnings (loss)</font></b></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="7%"><b><font size="1" face="sans-serif">(0.32)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">0.27</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">1.12</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">1.25</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><i><font size="1" face="sans-serif">See accompanying notes.</font></i></p>
<p><i><font size="1" face="sans-serif">* Derived from the audited Dec. 31, 2001
consolidated financial statements.</font></i></p>
<p><font color="#999999" size="6" face="sans-serif">:P18</font></p>
<hr noshade align="center" width="100%" size="2">
<p align="right"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="right"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<a name="page_19"></a>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="37%"><b><font size="1" face="sans-serif">T R A N S A L T A C O R
      P O R A T I O N</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><b><font size="1" face="sans-serif">C O N S O L I D A T E D
      S T A T E M E N T S OF CASH FLOWS</font></b></td>
    <td width="2%"></td>
    <td width="7%"></td>
    <td width="7%"></td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><i><font size="1" face="sans-serif">(in millions of Canadian
      dollars)</font></i></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" colspan="4" width="14%"><font size="1" face="sans-serif">3
      months ended Dec. 31</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="4" width="22%"><font size="1" face="sans-serif">Year
      ended Dec. 31</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td colspan="4" width="14%"><b><font size="1" face="sans-serif">Unaudited</font></b></td>
    <td width="1%">&nbsp;</td>
    <td align="right" colspan="2" width="10%"><b><font size="1" face="sans-serif">Unaudited</font></b></td>
    <td width="1%">&nbsp;</td>
    <td align="right" colspan="2" width="13%"><font size="1" face="sans-serif">Audited*</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">2001</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" colspan="2" width="10%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="1%">&nbsp;</td>
    <td align="right" colspan="2" width="13%"><font size="1" face="sans-serif">2001</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><b><font size="1" face="sans-serif">Operating activities</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><font size="1" face="sans-serif">Net earnings</font></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="6%"><b><font size="1" face="sans-serif">(49.6)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">50.0</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">210.8</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">227.7</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><font size="1" face="sans-serif">Depreciation and
      amortization</font></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">79.7</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">82.6</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">314.8</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">312.3</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="3" width="46%"><font size="1" face="sans-serif">Asset
      impairment and equipment cancellation charges</font></td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">152.5</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">152.5</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">66.5</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><font size="1" face="sans-serif">Non-controlling interests</font></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">5.6</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">5.0</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">20.1</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">20.6</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="3" width="46%"><font size="1" face="sans-serif">Loss (gain) on
      sale of property, plant and equipment</font></td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">12.3</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">2.1</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">15.6</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(5.4)</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><font size="1" face="sans-serif">Site restoration costs
      incurred</font></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">(3.5)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(4.6)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(15.6)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(14.8)</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><font size="1" face="sans-serif">Future income taxes
      (recovery)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">(43.8)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">33.2</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(60.4)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">39.9</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="3" width="46%"><font size="1" face="sans-serif">Unrealized
      (gain) loss from energy marketing activities</font></td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">(10.9)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">6.0</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(5.9)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(6.3)</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><font size="1" face="sans-serif">Gain on disposal of
      Transmission operation</font></td>
    <td width="2%">&nbsp;</td>
    <td width="7%"><i><font size="1" face="sans-serif">(Note 3)</font></i></td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">(10.0)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(120.0)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">-</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><font size="1" face="sans-serif">Other non-cash items</font></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">(17.2)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(0.7)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(24.8)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">9.5</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="37%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">115.1</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">173.6</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">487.1</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">650.0</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="3" width="46%"><font size="1" face="sans-serif">Change in
      non-cash operating working capital balances</font></td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">74.4</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(41.9)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(49.4)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">65.6</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="3">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><font size="1" face="sans-serif">Cash flow from operating
      activities</font></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">189.5</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">131.7</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">437.7</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">715.6</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><b><font size="1" face="sans-serif">Investing activities</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><font size="1" face="sans-serif">Additions to property,
      plant and equipment</font></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">(194.6)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(419.0)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(945.8)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td align="right" colspan="2" width="13%"><font size="1" face="sans-serif">(1,246.5)</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><font size="1" face="sans-serif">Acquisitions </font><i><font size="1" face="sans-serif">(Note
      2)</font></i></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">(40.1)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(40.1)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(9.8)</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="5" width="55%"><font size="1" face="sans-serif">Proceeds on
      sale of property, plant and equipment to Limited Partnership</font></td>
    <td width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">35.0</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">35.0</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="40%"><font size="1" face="sans-serif">Disposals </font><i><font size="1" face="sans-serif">(Note
      3)</font></i></td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">818.0</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">-</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="40%"><font size="1" face="sans-serif">Proceeds on
      sale of property, plant and equipment</font></td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">2.3</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">0.2</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">2.3</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">201.6</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="40%"><font size="1" face="sans-serif">Long-term
      receivables</font></td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">(5.4)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">20.3</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">165.3</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(46.3)</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><font size="1" face="sans-serif">Long-term investments </font><i><font size="1" face="sans-serif">(Note
      5)</font></i></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(6.1)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">-</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><font size="1" face="sans-serif">Deferred charges and other</font></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">(23.2)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(2.6)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(29.8)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(10.9)</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><font size="1" face="sans-serif">Cash flow used in investing
      activities</font></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">(261.0)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(366.1)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(36.2)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td align="right" colspan="2" width="13%"><font size="1" face="sans-serif">(1,076.9)</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><b><font size="1" face="sans-serif">Financing activities</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><font size="1" face="sans-serif">Net increase (decrease) in
      short-term debt</font></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">289.3</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(7.8)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(247.1)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">61.9</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><font size="1" face="sans-serif">Issuance of long-term debt</font></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">125.0</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">611.3</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">789.9</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><font size="1" face="sans-serif">Repayment of long-term debt</font></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">(149.4)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(0.8)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(454.5)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(292.7)</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="40%"><font size="1" face="sans-serif">Redemption of
      preferred shares of a subsidiary</font></td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(122.1)</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><font size="1" face="sans-serif">Issuance of common shares</font></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">0.1</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">1.8</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">14.1</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><font size="1" face="sans-serif">Redemption of common shares</font></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(14.2)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(49.9)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(44.4)</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><font size="1" face="sans-serif">Distributions on preferred
      securities</font></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">(8.2)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(6.2)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(34.9)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(23.4)</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><font size="1" face="sans-serif">Dividends on common shares</font></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">(29.5)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(28.7)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(115.5)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(149.6)</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="40%"><font size="1" face="sans-serif">Net proceeds on
      issuance of preferred securities</font></td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">169.4</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">169.4</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="4" width="54%"><font size="1" face="sans-serif">Dividends to
      subsidiary's non-controlling preferred shareholders</font></td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(8.3)</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="3" width="46%"><font size="1" face="sans-serif">Distributions
      to subsidiary's non-controlling limited partner</font></td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">(5.5)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(6.0)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(24.5)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(26.3)</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><font size="1" face="sans-serif">Deferred financing charges
      and other</font></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">0.1</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(7.6)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">0.2</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><font size="1" face="sans-serif">Cash flow from (used in)
      financing activities</font></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">96.7</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">230.9</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(320.9)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">368.7</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td colspan="5" width="55%"><b><font size="1" face="sans-serif">Cash flow
      from (used in) operating, investing and financing activities</font></b></td>
    <td width="6%"><b><font size="1" face="sans-serif">25.2</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(3.5)</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">80.6</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">7.4</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="40%"><b><font size="1" face="sans-serif">Effect of
      translation on foreign currency cash</font></b></td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">(2.5)</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">4.0</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">0.7</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">0.8</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="40%"><b><font size="1" face="sans-serif">Increase in
      cash and cash equivalents</font></b></td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">22.7</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">0.5</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">81.3</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">8.2</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="40%"><b><font size="1" face="sans-serif">Cash and
      cash equivalents, beginning of period</font></b></td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%"><b><font size="1" face="sans-serif">120.6</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">61.5</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">62.0</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">53.8</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="37%"><b><font size="1" face="sans-serif">Cash and cash
      equivalents, end of period</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="6%"><b><font size="1" face="sans-serif">143.3</font></b></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">62.0</font></td>
    <td width="1%">&nbsp;</td>
    <td width="2%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">143.3</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="4%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">62.0</font></td>
    <td width="6%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><i><font size="1" face="sans-serif">See accompanying notes.</font></i></p>
<p><i><font size="1" face="sans-serif">* Derived from the audited Dec. 31, 2001
consolidated financial statements.</font></i></p>
<p align="right"><font color="#999999" size="6" face="sans-serif">:P19</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_20"></a>
<p align="right"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="right"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="57%"><b><font size="1" face="sans-serif">T R A N S A L T A C O R
      P O R A T I O N</font></b></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><b><font size="1" face="sans-serif">C O N S O L I D A T E D
      B A L A N C E&nbsp; SHEETS</font></b></td>
    <td width="12%"></td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><i><font size="1" face="sans-serif">(in millions of Canadian
      dollars)</font></i></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="57%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td align="right" colspan="2" width="13%"><b><font size="1" face="sans-serif">Dec.
      31,</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">Dec. 31,</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td align="right" colspan="2" width="13%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td align="right" colspan="2" width="13%"><b><font size="1" face="sans-serif">Unaudited</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">Audited*</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><b><font size="1" face="sans-serif">ASSETS</font></b></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><b><font size="1" face="sans-serif">Current assets</font></b></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Cash and cash equivalents</font></td>
    <td width="12%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">143.3</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="12%"><font size="1" face="sans-serif">62.0</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Accounts receivable and
      other</font></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">468.4</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">625.3</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Price risk management
      assets </font><i><font size="1" face="sans-serif">(Note 4)</font></i></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">157.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">137.6</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Future income tax assets</font></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">18.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">16.9</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Income taxes receivable</font></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">111.5</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">128.3</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Materials and supplies at
      average cost</font></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">112.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">85.5</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="57%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">1,012.4</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">1,055.6</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><b><font size="1" face="sans-serif">Investments </font></b><i><font size="1" face="sans-serif">(Note
      5)</font></i></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">32.2</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">37.3</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><b><font size="1" face="sans-serif">Long-term receivables </font></b><i><font size="1" face="sans-serif">(Note
      7)</font></i></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">39.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">221.4</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><b><font size="1" face="sans-serif">Property, plant and
      equipment </font></b><i><font size="1" face="sans-serif">(Note 3)</font></i></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Cost</font></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">8,124.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">8,766.7</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Accumulated depreciation</font></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">(2,089.8)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">(2,671.9)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="57%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">6,035.1</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">6,094.8</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><b><font size="1" face="sans-serif">Goodwill </font></b><i><font size="1" face="sans-serif">(Note
      2)</font></i></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">56.5</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">29.3</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><b><font size="1" face="sans-serif">Future income tax assets</font></b></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">72.2</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">15.6</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><b><font size="1" face="sans-serif">Price risk management
      assets </font></b><i><font size="1" face="sans-serif">(Note 4)</font></i></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">60.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">71.3</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><b><font size="1" face="sans-serif">Other assets</font></b></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">110.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">81.1</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><b><font size="1" face="sans-serif">Total assets</font></b></td>
    <td width="12%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">7,419.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="12%"><font size="1" face="sans-serif">7,606.4</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><b><font size="1" face="sans-serif">LIABILITIES AND
      SHAREHOLDERS' EQUITY</font></b></td>
    <td width="12%"></td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><b><font size="1" face="sans-serif">Current liabilities</font></b></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Short-term debt</font></td>
    <td width="12%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">290.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="12%"><font size="1" face="sans-serif">537.2</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Accounts payable and
      accrued liabilities</font></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">472.2</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">627.5</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Price risk management
      liabilities </font><i><font size="1" face="sans-serif">(Note 4)</font></i></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">173.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">114.1</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Future income tax
      liabilities</font></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">17.1</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">11.8</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Dividends payable</font></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">42.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">42.8</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Current portion of
      long-term debt </font><i><font size="1" face="sans-serif">(Note 8)</font></i></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">355.4</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">104.3</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="57%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">1,351.4</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">1,437.7</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="69%"><b><font size="1" face="sans-serif">Long-term
      debt </font></b><i><font size="1" face="sans-serif">(Note 8)</font></i></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">2,351.2</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">2,406.8</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="69%"><b><font size="1" face="sans-serif">Deferred
      credits and other long-term liabilities</font></b></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">540.2</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">560.5</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="69%"><b><font size="1" face="sans-serif">Future
      income tax liabilities</font></b></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">371.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">409.1</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><b><font size="1" face="sans-serif">Price risk management
      liabilities</font></b><i><font size="1" face="sans-serif">(Note 4)</font></i></td>
    <td width="12%"></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">50.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">69.0</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><b><font size="1" face="sans-serif">Non-controlling
      interests</font></b></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">263.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">281.0</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><b><font size="1" face="sans-serif">Preferred securities</font></b></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">451.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">452.6</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><b><font size="1" face="sans-serif">Common shareholders'
      equity</font></b></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Common shares </font><i><font size="1" face="sans-serif">(Note
      9)</font></i></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">1,226.2</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">1,170.9</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Retained earnings</font></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">832.2</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">838.3</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><font size="1" face="sans-serif">Cumulative translation
      adjustment</font></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">(18.8)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">(19.5)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="57%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">2,039.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">1,989.7</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><b><font size="1" face="sans-serif">Total liabilities and
      shareholders' equity</font></b></td>
    <td width="12%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">7,419.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="12%"><font size="1" face="sans-serif">7,606.4</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><b><font size="1" face="sans-serif">Contingencies </font></b><i><font size="1" face="sans-serif">(Note
      11)</font></i></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="57%"><i><font size="1" face="sans-serif">See accompanying notes.</font></i></td>
    <td width="12%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="69%"><i><font size="1" face="sans-serif">* Derived
      from the audited Dec. 31, 2001 consolidated financial statements.</font></i></td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
</table>
<p><font color="#999999" size="6" face="sans-serif">:P20</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_21"></a>
<p align="right"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="right"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<p><b><font size="1" face="sans-serif">N O T E S T O C O N S O L I D A T E D F I
N A N C I A L S T A T E M E N T S</font></b></p>
<p><b><font size="1" face="sans-serif">(</font></b>&nbsp;<b><font size="1" face="sans-serif">U
N A U D I T E D )</font></b></p>
<p><i><font size="1" face="sans-serif">(Tabular amounts in millions of Canadian
dollars, except as otherwise noted)</font></i></p>
<p><b><font size="1" face="sans-serif">1</font></b>&nbsp;<b><font size="1" face="sans-serif">.
A C C O U N T I N G P O L I C I E S</font></b></p>
<p><font size="1" face="sans-serif">These unaudited interim consolidated
financial statements do not include all of the disclosures included in the
corporation's annual consolidated financial statements. Accordingly, these
unaudited interim consolidated financial statements should be read in
conjunction with the corporation's most recent annual consolidated financial
statements.</font></p>
<p><font size="1" face="sans-serif">The accounting policies used in the
preparation of these unaudited interim consolidated financial statements conform
with those used in the corporation's most recent annual consolidated financial
statements, except for accounting for goodwill, stock-based compensation,
exchange gains and losses on translation of long-term foreign currency
denominated monetary items, impairment of long-lived assets and the presentation
of energy-trading activities.</font></p>
<p><font size="1" face="sans-serif">Effective Jan. 1, 2002, the corporation
prospectively 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 $29.3 million from acquired intangibles to goodwill,
which will no longer be subject to amortization under the new standard. There
was no impairment of goodwill upon adoption of this standard, nor was there an
impairment at Dec. 31, 2002.</font></p>
<p><font size="1" face="sans-serif">Net income and earnings per share for the
three and twelve months ended Dec. 31, 2001 adjusted to exclude the amortization
of the above amount are as follows:</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="80%">&nbsp;</td>
    <td align="right" colspan="2" width="7%"><font size="1" face="sans-serif">3
      months ended</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="8%"><font size="1" face="sans-serif">Year
      ended</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="80%">&nbsp;</td>
    <td align="right" colspan="2" width="7%"><font size="1" face="sans-serif">Dec.
      31, 2001</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="8%"><font size="1" face="sans-serif">Dec.
      31, 2001</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="80%"><font size="1" face="sans-serif">Reported net earnings
      applicable to common shareholders</font></td>
    <td width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">46.5</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">214.6</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="80%"><font size="1" face="sans-serif">Amortization of acquired
      intangibles</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">2.3</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">7.7</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="80%"><font size="1" face="sans-serif">Adjusted net earnings
      applicable to common shareholders</font></td>
    <td width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">48.8</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">222.3</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="80%"><font size="1" face="sans-serif">Reported basic earnings per
      share</font></td>
    <td width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">0.27</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">1.27</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="80%"><font size="1" face="sans-serif">Amortization of acquired
      intangibles per share</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">0.01</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">0.05</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="80%"><font size="1" face="sans-serif">Adjusted basic earnings per
      share</font></td>
    <td width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">0.28</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">1.32</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="80%"><font size="1" face="sans-serif">Reported diluted earnings
      per share</font></td>
    <td width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">0.27</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">1.25</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="80%"><font size="1" face="sans-serif">Amortization of acquired
      intangibles per share</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">0.01</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">0.05</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="80%"><font size="1" face="sans-serif">Adjusted diluted earnings
      per share</font></td>
    <td width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">0.28</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">1.30</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font size="1" face="sans-serif">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 the fair value 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 market price of the underlying stock
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 (loss) and earnings (loss) 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:</font></p>
<p align="right"><font color="#999999" size="6" face="sans-serif">:P21</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_22"></a>
<p align="right"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="right"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="67%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" colspan="4" width="14%"><font size="1" face="sans-serif">3
      months ended Dec. 31</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td colspan="4" width="13%"><font size="1" face="sans-serif">Year ended Dec.
      31</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="67%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="4%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="5%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="5%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="67%"><font size="1" face="sans-serif">Reported net earnings
      (loss) applicable to common shareholders</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="7%"><b><font size="1" face="sans-serif">(54.3 )</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="4%"><font size="1" face="sans-serif">46.5</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="5%"><b><font size="1" face="sans-serif">189.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="5%"><font size="1" face="sans-serif">214.6</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="67%"><font size="1" face="sans-serif">Compensation expense</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">1.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="4%"><font size="1" face="sans-serif">0.5</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="5%"><b><font size="1" face="sans-serif">3.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="5%"><font size="1" face="sans-serif">2.0</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="67%"><font size="1" face="sans-serif">Pro forma net earnings
      (loss) applicable to common shareholders</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="7%"><b><font size="1" face="sans-serif">(55.3 )</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="4%"><font size="1" face="sans-serif">46.0</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="5%"><b><font size="1" face="sans-serif">186.2</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="5%"><font size="1" face="sans-serif">212.6</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="67%"><font size="1" face="sans-serif">Reported basic earnings
      (loss) per share</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="7%"><b><font size="1" face="sans-serif">(0.32 )</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="4%"><font size="1" face="sans-serif">0.27</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="5%"><b><font size="1" face="sans-serif">1.12</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="5%"><font size="1" face="sans-serif">1.27</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="67%"><font size="1" face="sans-serif">Compensation expense per
      share</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">0.01</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="4%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="5%"><b><font size="1" face="sans-serif">0.02</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="5%"><font size="1" face="sans-serif">0.01</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="67%"><font size="1" face="sans-serif">Pro forma basic earnings
      (loss) per share</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="7%"><b><font size="1" face="sans-serif">(0.33 )</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="4%"><font size="1" face="sans-serif">0.27</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="5%"><b><font size="1" face="sans-serif">1.10</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="5%"><font size="1" face="sans-serif">1.26</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="67%"><font size="1" face="sans-serif">Reported diluted earnings
      (loss) per share</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="7%"><b><font size="1" face="sans-serif">(0.32 )</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="4%"><font size="1" face="sans-serif">0.27</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="5%"><b><font size="1" face="sans-serif">1.12</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="5%"><font size="1" face="sans-serif">1.25</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="67%"><font size="1" face="sans-serif">Compensation expense per
      share</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><b><font size="1" face="sans-serif">0.01</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="4%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="5%"><b><font size="1" face="sans-serif">0.02</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="5%"><font size="1" face="sans-serif">0.01</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="67%"><font size="1" face="sans-serif">Pro forma diluted earnings
      (loss) per share</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="7%"><b><font size="1" face="sans-serif">(0.33 )</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="4%"><font size="1" face="sans-serif">0.27</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="5%"><b><font size="1" face="sans-serif">1.10</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="5%"><font size="1" face="sans-serif">1.24</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font size="1" face="sans-serif">Options were granted only in the first
quarter of 2002. The estimated fair value of these stock options was determined
using the binomial model using the following assumptions, resulting in a
weighted-average fair value of $4.25 per option (2001 - $4.35):</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="79%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">2001</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="79%"><font size="1" face="sans-serif">Risk-free interest rate</font></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">5.9%</font></b></td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">5.4%</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td width="79%"><font size="1" face="sans-serif">Expected hold period to
      exercise (years)</font></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">7.0</font></b></td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">7.0</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td width="79%"><font size="1" face="sans-serif">Volatility in the price of
      the corporation's shares</font></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">28.3%</font></b></td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">28.2%</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font size="1" face="sans-serif">The accounting treatment for the
corporation's performance share ownership plan remains unchanged from the year
ended Dec. 31, 2001. Under this plan, compensation expense recognized in the
three and twelve months ended Dec. 31, 2002 was $1.0 million and $5.3 million,
respectively (2001 - $1.2 million and $6.6 million, respectively). Compensation
expense is included in operations, maintenance and administration (OM&amp;A) in
the statements of earnings. Effective Jan. 1, 2003, TransAlta has elected to
account for stock-based compensation in accordance with the fair value method,
and will expense stock-based compensation in respect of stock options on a
prospective basis.</font></p>
<p><font size="1" face="sans-serif">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.</font></p>
<p><font size="1" face="sans-serif">The CICA has amended its standard on the
recognition, measurement, and disclosure of the impairment of long-lived assets.
This standard is effective April 1, 2003 and requires that an impairment loss be
recognized when the carrying amount of a long-lived asset exceeds the sum of the
undiscounted cash flows expected from its use and eventual disposition. The
impairment loss is measured as the amount that the long-lived asset's carrying
value exceeds its fair value. TransAlta early adopted this standard in the
fourth quarter of 2002. In accordance with the standard, the impairment
calculation for the Wabamun plant resulted in the recognition of an impairment
loss of $110.0 million, which is included in asset impairment and equipment
cancellation charges in the statements of earnings.</font></p>
<p><font color="#999999" size="6" face="sans-serif">:P22</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_23"></a>
<p align="right"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="right"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<p><font size="1" face="sans-serif">In the third quarter of 2002, in response to
changes in accounting standards in the U.S. with respect to energy trading
activities, the corporation has adopted a policy that all gains and losses on
energy trading contracts be shown in the statement of earnings. Consistent with
these recommendations, the corporation has chosen to disclose the gross
transaction volumes of those energy trading contracts that are physically
settled.</font></p>
<p><font size="1" face="sans-serif">TransAlta's results are seasonal in nature
due to the nature of the electricity market and related fuel costs.</font></p>
<p><b><font size="1" face="sans-serif">2</font></b>&nbsp;<b><font size="1" face="sans-serif">.
A C Q U I S I T I O N S</font></b></p>
<p><font size="1" face="sans-serif">On Dec. 6, 2002, the corporation completed a
step acquisition of Vision Quest Windelectric Inc. (Vision Quest). The initial
steps resulted in 41 per cent ownership of Vision Quest for $13.5 million,
accounted for using the equity method. Book values approximated fair values. The
final step brought TransAlta's ownership to 100 per cent and TransAlta's total
investment in Vision Quest to $68.8 million. The results of Vision Quest's
operations have been included in the corporate segment of the consolidated
financial statements since the date of acquisition. Vision Quest owns and
operates 67 wind power turbine power plants with a total capacity of 44 MW with
a further 37.5 MW under construction.</font></p>
<p><font size="1" face="sans-serif">The aggregate purchase price includes the
previous investments of $13.5 million, plus $21.3 million of cash and 745,791
common shares valued at $14.2 million. In addition, a loan of $19.8 million was
previously advanced to Vision Quest. The value of the common shares issued was
determined based on the average market price of TransAlta's common shares for
the five days before and after the terms of the acquisition were agreed to and
announced. 136,287 of the shares will be issued over the next three years.</font></p>
<p><font size="1" face="sans-serif">The following table summarizes the estimated
fair value of the assets acquired and liabilities assumed at the date of
acquisition. Due to the timing of the purchase, it was impractical to complete
the allocations process satisfactory without causing undue delay in issuing the
financial statements for the period in which the combination occurred.
Therefore, the purchase price allocation was prepared based on the best
allocations that could be made in the time available and, if necessary, the
allocations in the purchase equation may be adjusted when the process is
completed in the first quarter of 2003.</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="85%"><b><font size="1" face="sans-serif">Net assets acquired at
      assigned values:</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="10%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td width="85%"><font size="1" face="sans-serif">Working capital, including
      cash of $8.2 million</font></td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="10%"><font size="1" face="sans-serif">6.5</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td width="85%"><font size="1" face="sans-serif">Property, plant and
      equipment</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">70.1</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td width="85%"><font size="1" face="sans-serif">Goodwill</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">27.2</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td width="85%"><font size="1" face="sans-serif">Power Purchase Arrangement</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">2.5</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td width="85%"><font size="1" face="sans-serif">Short-term debt</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">(32.2)</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td width="85%"><font size="1" face="sans-serif">Future income tax liability</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">(4.7)</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td width="85%"><font size="1" face="sans-serif">Interest rate swaps</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">(0.6)</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="85%"><font size="1" face="sans-serif">Total</font></td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="10%"><font size="1" face="sans-serif">68.8</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="85%"><b><font size="1" face="sans-serif">Consideration:</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="10%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td width="85%"><font size="1" face="sans-serif">Initial investments</font></td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="10%"><font size="1" face="sans-serif">13.5</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td width="85%"><font size="1" face="sans-serif">Cash, including previous
      advances of $19.8 million</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">41.1</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td width="85%"><font size="1" face="sans-serif">Common shares</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="10%"><font size="1" face="sans-serif">14.2</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="85%"><font size="1" face="sans-serif">Total</font></td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="10%"><font size="1" face="sans-serif">68.8</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font size="1" face="sans-serif">On Dec. 6, 2002, the corporation purchased
the remaining 15 per cent interest in the Southern Cross Energy Partnership,
located in western Australia, for AUD$8.5 million (Cdn$7.2 million). At the time
of acquisition, book values approximated fair values.</font></p>
<p align="right"><font color="#999999" size="6" face="sans-serif">:P23</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_24"></a>
<p align="right"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="right"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<p><b><font size="1" face="sans-serif">3</font></b>&nbsp;<b><font size="1" face="sans-serif">.
D I S C O N T I N U E D O P E R A T I O N S</font></b></p>
<p><font size="1" face="sans-serif">On July 4, 2001, the corporation signed a
purchase and sale agreement for the disposal of its Transmission operation.
Regulatory approval was received on March 28, 2002. On April 29, 2002, the
Transmission operation was sold for proceeds of $820.7 million, of which $818.0
million has been collected. The proceeds excluded accounts receivable of $31.7
million, which were retained and collected by TransAlta, and accounts payable of
$4.4 million. The disposal resulted in a final gain on sale of $120.0 million
($0.71 per common share), net of income taxes of $32.9 million. The previously
reported gain included a number of estimates, therefore the gain was adjusted in
the fourth quarter of 2002 to reflect agreed working capital adjustments and
actual amounts paid and received.</font></p>
<p><font size="1" face="sans-serif">For reporting purposes, the results of the
Transmission operation have been presented as discontinued operations in the
statement of earnings.</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="53%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="8%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="10%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><i><font size="1" face="sans-serif">3 months ended Dec. 31</font></i></td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="8%"><b><font size="1" face="sans-serif">Transmission</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="10%"><font size="1" face="sans-serif">Transmission</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Revenues</font></td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">42.8</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Operating expenses</font></td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(19.1)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Operating income</font></td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">23.7</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Net interest expense</font></td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(0.6)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Earnings before income
      taxes</font></td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">23.1</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Income taxes</font></td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">9.8</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Earnings before gain on
      disposal</font></td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">13.3</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Gain on disposal</font></td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">10.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Earnings from discontinued
      operations</font></td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">10.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">13.3</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="53%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="53%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="8%"><font size="1" face="sans-serif">Edmonton</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><i><font size="1" face="sans-serif">Year ended Dec. 31</font></i></td>
    <td colspan="2" width="10%"><b><font size="1" face="sans-serif">Transmission</font></b></td>
    <td width="2%">&nbsp;</td>
    <td colspan="2" width="10%"><font size="1" face="sans-serif">Transmission</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="8%"><font size="1" face="sans-serif">Composter</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">Total</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Revenues</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">55.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">171.1</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">6.6</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">177.7</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Operating expenses</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">(30.8)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(84.6)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">(5.4)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(90.0)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Operating income</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">25.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">86.5</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">1.2</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">87.7</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Net interest expense</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">(2.4)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(9.7)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(9.7)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Earnings before income
      taxes</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">22.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">76.8</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">1.2</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">78.0</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Income taxes</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">9.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">32.4</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">0.5</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">32.9</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Earnings before gain on
      disposal</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">12.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">44.4</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">0.7</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">45.1</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Gain on disposal</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">120.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">--</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="53%"><font size="1" face="sans-serif">Earnings from discontinued
      operations</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">132.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">44.4</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">0.7</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">45.1</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font size="1" face="sans-serif">At Dec. 31, 2002, all of the corporation's
discontinued operations had been sold. At Dec. 31, 2001, all of the
corporation's discontinued operations had been sold with the exception of the
Transmission operation. Balance sheet amounts are as follows:</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="61%">&nbsp;</td>
    <td align="right" colspan="2" width="6%"><b><font size="1" face="sans-serif">Dec.
      31, 2002</font></b></td>
    <td width="5%">&nbsp;</td>
    <td align="right" colspan="2" width="22%"><font size="1" face="sans-serif">Dec.
      31, 2001</font></td>
    <td width="5%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Current assets</font></td>
    <td width="3%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="3%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="5%">&nbsp;</td>
    <td width="3%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="19%"><font size="1" face="sans-serif">36.1</font></td>
    <td width="5%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Capital assets</font></td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="3%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="5%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="19%"><font size="1" face="sans-serif">637.5</font></td>
    <td width="5%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Other assets</font></td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="3%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="5%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="19%"><font size="1" face="sans-serif">3.3</font></td>
    <td width="5%">&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Current liabilities</font></td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="3%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="5%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td align="right" width="19%"><font size="1" face="sans-serif">(15.5)</font></td>
    <td width="5%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="61%"><font size="1" face="sans-serif">Net assets</font></td>
    <td width="3%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="3%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="5%">&nbsp;</td>
    <td width="3%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="19%"><font size="1" face="sans-serif">661.4</font></td>
    <td width="5%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font color="#999999" size="6" face="sans-serif">:P24</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_25"></a>
<p align="right"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="right"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<p><b><font size="1" face="sans-serif">4</font></b>&nbsp;<b><font size="1" face="sans-serif">.
P R I C E R I S K M A N A G E M E N T A S S E T S A N D L I A B I L I T I E S</font></b></p>
<p><font size="1" face="sans-serif">The Energy Marketing group uses energy
derivatives, including physical and financial swaps, forwards and options to
optimize returns from assets, earn trading revenues and gain market information.
Energy contracts that meet the definition of a derivative in FASB Statement 133,
</font><i><font size="1" face="sans-serif">Accounting for Derivative Instruments
and Hedging Activities</font></i><font size="1" face="sans-serif">, are
accounted for at fair value in accordance with Canadian and U.S. generally
accepted accounting principles (GAAP). Derivatives are used to hedge the
corporation's exposure to changes in electricity and natural gas prices. Under
Canadian GAAP, settlement accounting is used for hedging activities if certain
criteria are met. Under U.S. GAAP, hedging activities are accounted for in
accordance with FASB Statement 133.</font></p>
<p><font size="1" face="sans-serif">Energy Marketing's price risk management
assets and liabilities represent the fair value of unsettled (unrealized)
trading transactions. With the exception of transmission contracts, the fair
value of all energy trading activities is based on quoted market prices. The
fair value of physical transmission contracts is based on quoted market prices
and a spread option valuation model. The fair value of financial transmission
contracts is based upon statistical analysis of historical data.</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="63%">&nbsp;</td>
    <td align="right" colspan="2" width="15%"><b><font size="1" face="sans-serif">Dec.
      31, 2002</font></b></td>
    <td width="3%">&nbsp;</td>
    <td align="right" colspan="2" width="15%"><font size="1" face="sans-serif">Dec.
      31, 2001</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="63%"><b><font size="1" face="sans-serif">Price risk management
      assets</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="13%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="13%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td width="63%"><font size="1" face="sans-serif">Current</font></td>
    <td width="2%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="13%"><b><font size="1" face="sans-serif">157.8</font></b></td>
    <td width="3%">&nbsp;</td>
    <td width="2%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="13%"><font size="1" face="sans-serif">137.6</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td width="63%"><font size="1" face="sans-serif">Long-term</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="13%"><b><font size="1" face="sans-serif">60.7</font></b></td>
    <td width="3%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="13%"><font size="1" face="sans-serif">71.3</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td width="63%"><b><font size="1" face="sans-serif">Price risk management
      liabilities</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="13%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="13%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td width="63%"><font size="1" face="sans-serif">Current</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="13%"><b><font size="1" face="sans-serif">(173.8)</font></b></td>
    <td width="3%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="13%"><font size="1" face="sans-serif">(114.1)</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td width="63%"><font size="1" face="sans-serif">Long-term</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="13%"><b><font size="1" face="sans-serif">(50.6)</font></b></td>
    <td width="3%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="13%"><font size="1" face="sans-serif">(69.0)</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="63%">&nbsp;</td>
    <td width="2%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="13%"><b><font size="1" face="sans-serif">(5.9)</font></b></td>
    <td width="3%">&nbsp;</td>
    <td width="2%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="13%"><font size="1" face="sans-serif">25.8</font></td>
    <td width="3%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font size="1" face="sans-serif">The following table illustrates movements in
the fair value of the corporation's price risk assets and liabilities during the
year ended Dec. 31, 2002:</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="91%"><font size="1" face="sans-serif">Fair value of net price
      risk management assets outstanding at Dec. 31, 2001</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">25.8</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="91%"><font size="1" face="sans-serif">Fair value of new contracts
      entered into during the period</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">(2.7)</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="91%"><font size="1" face="sans-serif">Changes in fair values
      attributable to market price and other market changes</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">7.6</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="91%"><font size="1" face="sans-serif">Contracts realized or
      settled during the period</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">(36.6)</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="91%"><font size="1" face="sans-serif">Changes in fair values
      attributable to changes in valuation techniques and assumptions</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="91%"><font size="1" face="sans-serif">Fair value of net price
      risk management liabilities outstanding at Dec. 31, 2002</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">(5.9)</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font size="1" face="sans-serif">The source of the valuations of the above
contracts and maturities over each of the next five calendar years and
thereafter is as follows:</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="32%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="center" colspan="2" width="4%"><font size="1" face="sans-serif">2008
      and</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="32%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">2003</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">2004</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">2005</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">2006</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">2007</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" colspan="2" width="4%"><font size="1" face="sans-serif">thereafter</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><font size="1" face="sans-serif">Total</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="32%"><font size="1" face="sans-serif">Prices actively quoted</font></td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(17.6)</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">3.3</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">3.2</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">2.1</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">1.5</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="2%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">(7.5)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="32%"><font size="1" face="sans-serif">Prices based on models</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">1.6</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="2%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">1.6</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="32%"><font size="1" face="sans-serif">Asset (liability)</font></td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(16.0)</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">3.3</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">3.2</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">2.1</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">1.5</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="2%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">(5.9)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
</table>
<p align="right"><font color="#999999" size="6" face="sans-serif">:P25</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_26"></a>
<p align="right"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="right"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<p><b><font size="1" face="sans-serif">5</font></b>&nbsp;<b><font size="1" face="sans-serif">.
I N V E S T M E N T S</font></b></p>
<p><font size="1" face="sans-serif">In January 2002, an additional $2.9 million
was invested in Vision Quest. In December 2002, the corporation purchased the
remaining interest in Vision Quest as described in </font><i><font size="1" face="sans-serif">Note
2</font></i><font size="1" face="sans-serif">.</font></p>
<p><font size="1" face="sans-serif">In April 2002, an additional $2.5 million
was invested in a distributed generation company. This investment is accounted
for using the equity method.</font></p>
<p><font size="1" face="sans-serif">In April 2002, an initial $0.2 million was
invested in a biomass generation company. An additional $0.5 million was
invested in September 2002. The investment is accounted for using the cost
method.</font></p>
<p><font size="1" face="sans-serif">A foreign exchange revaluation of $1.9
million occurred during the twelve months ended Dec. 31, 2002 on the investment
in the Australian gas transmission pipeline.</font></p>
<p><b><font size="1" face="sans-serif">6</font></b>&nbsp;<b><font size="1" face="sans-serif">.
A S S E T I M P A I R M E N T A N D E Q U I P M E N T C A N C E L L A T I O N C
H A R G E S</font></b></p>
<p><font size="1" face="sans-serif">After a detailed engineering assessment, a
review of environmental issues and a review of short- and long-term market
forecasts, the corporation decided to implement a phased decommissioning of its
569 MW coal-fired Wabamun facility in November 2002. As a result of this
decision, the corporation recorded an impairment charge of $110.0 million during
the quarter. The impairment charge was calculated as the excess of carrying
value over fair value. The fair value of the facility was determined by
estimating the present value of future cash flows.</font></p>
<p><font size="1" face="sans-serif">In November 2002, the corporation cancelled
orders for four natural gas turbines and as a result recorded a cancellation
charge of $42.5 million for contract termination costs. The costs consist of
progress payments made to date.</font></p>
<p><font size="1" face="sans-serif">In September 2001, the corporation monetized
its investment in the 154 MW Pierce Power plant, resulting in the recognition of
revenue of $121.8 million, an impairment charge of $66.5 million and $52.3
million in anticipated future operating costs.</font></p>
<p><b><font size="1" face="sans-serif">7</font></b>&nbsp;<b><font size="1" face="sans-serif">.
L O N G - T E R M R E C E I V A B L E S</font></b></p>
<p><font size="1" face="sans-serif">In August 2002, the remaining $180.3 million
due from Aquila Networks Canada (formerly UtiliCorp Networks Canada) that arose
from the August 2000 sale of the discontinued Alberta Distribution and Retail
operation was collected in full.</font></p>
<p><font size="1" face="sans-serif">The net California accounts receivable of
US$24.2 million has been reclassified to long-term receivables, as collection is
no longer expected in 2003, although ultimate collection of the net receivable
is expected.</font></p>
<p><font size="1" face="sans-serif">On Dec. 12, 2002, a U.S. Federal Energy
Regulatory Commission (FERC) Administrative Law Judge issued proposed findings
of fact that TransAlta be entitled to receive approximately US$44.0 million for
electricity sales to California. However, FERC has proposed further adjustments
in respect of power and gas prices, which could result in further adjustments to
the amount to be received by TransAlta. Until a final ruling is made with
respect to these issues, TransAlta will maintain the provision for these
receivables.</font></p>
<p><b><font size="1" face="sans-serif">8</font></b>&nbsp;<b><font size="1" face="sans-serif">.
L O N G - T E R M D E B T</font></b></p>
<p><font size="1" face="sans-serif">On June 20, 2002, the corporation issued
debt of US$300.0 million under a US$1.0 billion shelf prospectus filed</font></p>
<p><font size="1" face="sans-serif">May 14, 2002. The notes are unsecured and
bear interest at 6.75 per cent, and mature on July 15, 2012. Net proceeds on the
issuance were $456.9 million.</font></p>
<p><font color="#999999" size="6" face="sans-serif">:P26</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_27"></a>
<p align="right"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="right"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<p><b><font size="1" face="sans-serif">9</font></b>&nbsp;<b><font size="1" face="sans-serif">.
C O M M O N S H A R E S I S S U E D A N D O U T S T A N D I N G</font></b></p>
<p><font size="1" face="sans-serif">TransAlta Corporation is authorized to issue
an unlimited number of voting common shares without nominal or par value. At
Dec. 31, 2002, the corporation had 169.8 million (Dec. 31, 2001 - 168.3 million)
common shares issued and outstanding plus outstanding employee stock options to
purchase an additional 3.2 million shares (Dec. 31, 2001 - 2.8 million).</font></p>
<p><font size="1" face="sans-serif">In February 2002, TransAlta announced a
normal course issuer bid to repurchase up to 3.0 million common shares for
cancellation. For the year ended Dec. 31, 2002, 2.0 million common shares had
been repurchased under the normal course issuer bid.</font></p>
<p><font size="1" face="sans-serif">On Dec. 6, 2002, the corporation issued
609,504 common shares as a portion of the aggregate purchase price of Vision
Quest </font><i><font size="1" face="sans-serif">(Note 2)</font></i><font size="1" face="sans-serif">.</font></p>
<p><b><font size="1" face="sans-serif">1</font></b>&nbsp;<b><font size="1" face="sans-serif">0
.. P R I O R P E R I O D R E G U L A T O R Y D E C I S I O N S</font></b></p>
<p><font size="1" face="sans-serif">Financial results for 2002 were affected by
Alberta Energy and Utilities Board (EUB) decisions related to other reporting
periods. The impact of such regulatory decisions is recorded when the effect of
such decisions is known, without adjustment to the financial statements of prior
periods.</font></p>
<p><font size="1" face="sans-serif">On April 16, 2002, the EUB rendered a
negative decision of $3.3 million pre-tax with respect to TransAlta's hydro
bidding strategy in 2000.</font></p>
<p><font size="1" face="sans-serif">In December 2001, the EUB ruled that the
Wabamun unit four outage qualified for relief under the Temporary Suspension
Regulation (TSR) and ordered that TransAlta would receive $11.0 million ($7.0
million after-tax) to compensate the corporation for obligation payments
incurred in 2000 as a result of the outage.</font></p>
<p><b><font size="1" face="sans-serif">1</font></b>&nbsp;<b><font size="1" face="sans-serif">1
.. C O N T I N G E N C I E S</font></b></p>
<p><font size="1" face="sans-serif">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.</font></p>
<p><font size="1" face="sans-serif">Since Jan. 1, 2001, the unit has been
subject to the terms of a power purchase arrangement (PPA). Under the PPA's </font><i><font size="1" face="sans-serif">force
majeure </font></i><font size="1" face="sans-serif">article, the corporation is
not obligated to supply electricity during the period of repair, subject to
confirmation by the administrator of the PPAs. Had such confirmation not
occurred, the corporation would have been 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. The </font><i><font size="1" face="sans-serif">force
majeure </font></i><font size="1" face="sans-serif">decision went to arbitration
in July 2001. On May 23, 2002, the arbitrators confirmed in their ruling that
the outage qualified as a </font><i><font size="1" face="sans-serif">force
majeure </font></i><font size="1" face="sans-serif">event, but also ruled that
the corporation should have returned the unit to service more quickly. As a
result of the decision, the corporation was required to pay $38.9 million plus
interest of $2.7 million, all pre-tax. The payment was recorded as reduction to
revenue.</font></p>
<p><font size="1" face="sans-serif">On May 8, 2002, FERC requested that 150
sellers of wholesale electricity and ancillary services to the California
electricity market, including TransAlta, respond to questions regarding their
trading strategies in California during 2000 and 2001. TransAlta has responded
to the FERC request and believes it operated in accordance with all applicable
laws, rules, regulations and tariffs.</font></p>
<p><font size="1" face="sans-serif">On May 21 and 22, 2002, FERC issued two
additional requests for information regarding 'round-trip' trading activities,
to which TransAlta responded, stating that the corporation does not believe it
participated in any round-trip trades during 2000 and 2001. In addition, Reliant
Energy Inc. issued a statement that it engaged in round-trip trades in 1999 with
Merchant Energy Group of the Americas, Inc. (MEGA). TransAlta acquired an
initial 50 per cent interest in MEGA in June 2000, and acquired the remaining 50
per cent in June 2001. TransAlta contends that no round-trip trading occurred
between Reliant Energy Inc. and MEGA during any period in which TransAlta had an
ownership interest in MEGA. TransAlta will continue to cooperate with the
regulators and supply all information requested.</font></p>
<p align="right"><font color="#999999" size="6" face="sans-serif">:P27</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_28"></a>
<p align="right"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="right"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<p><font size="1" face="sans-serif">On May 30, 2002, the California Attorney
General's Office (CAGO) filed civil complaints in the state court of California
against eight additional wholesale power companies, including TransAlta. The
complaint alleges violations of California's unfair business practices law in
connection with rates charged for wholesale electricity sales. TransAlta
believes that it has complied with applicable laws in regard to this complaint.
In particular, the company is of the view that the basis of the complaint is a
matter of federal rather than state jurisdiction. FERC has previously rejected
allegations made by CAGO that TransAlta's subsidiaries violated rate filing
requirements. On June 26, 2002, TransAlta filed a Notice of Motion to dismiss
the complaint.</font></p>
<p><font size="1" face="sans-serif">On Sept. 9, 2002, the Commodities Futures
Trading Commission requested information on similar issues. TransAlta has
provided the requested information.</font></p>
<p><font size="1" face="sans-serif">On Dec. 16 and 20, 2002, two class action
lawsuits on behalf of all persons and businesses in the states of Oregon and
Washington were initiated in respect of alleged unlawful practices in the
purchase and sale of wholesale energy. TransAlta believes these are without
merit and will vigorously defend its actions. No amount has been accrued in
these financial statements as neither the amount of the claim nor the outcome
was determinable at the reporting date.</font></p>
<p><font size="1" face="sans-serif">On Dec. 16, 2002, the Canadian government
ratified the Kyoto Protocol. The Kyoto Protocol will have no impact on TransAlta's
U.S., Mexican or Australian operations as these countries have not ratified the
Protocol. TransAlta is not able to estimate the full impact the Protocol will
have on its Canadian operations, as the Canadian government has not yet
established an implementation plan. However, the PPAs for TransAlta's coal-fired
plants in Alberta contain 'Change in Law' provisions that provide an opportunity
to recover compliance costs from the PPA customers. As a member of the Canadian
Clean Power Coalition, TransAlta, along with its peers, is exploring other means
to reduce greenhouse gas emissions, including the purchase of offset credits.
The acquisition of Vision Quest and its prospects for further development has
resulted in additional amounts of zero-emissions facilities consistent with the
strategy of the corporation. Since 1990, the corporation has reduced net
emissions in Canada by 18 per cent and is on track to reach zero net emissions
by 2024.</font></p>
<p><b><font size="1" face="sans-serif">1</font></b>&nbsp;<b><font size="1" face="sans-serif">2
.. C O M P A R A T I V E F I G U R E S</font></b></p>
<p><font size="1" face="sans-serif">Certain comparative figures have been
reclassified to conform with the current period's presentation.</font></p>
<p><font color="#999999" size="6" face="sans-serif">:P28</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_29"></a>
<p align="right"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="right"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<p><b><font size="1" face="sans-serif">1</font></b>&nbsp;<b><font size="1" face="sans-serif">3
.. S E G M E N T E D D I S C L O S U R E S</font></b></p>
<p><font size="1" face="sans-serif">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 reclassified.</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="62%"><b><font size="1" face="sans-serif">I. Earnings information</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td colspan="3" width="10%"><font size="1" face="sans-serif">Unaudited</font></td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="8%"><font size="1" face="sans-serif">Energy</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><b><i><font size="1" face="sans-serif">3 months ended Dec.
      31, 2002</font></i></b></td>
    <td colspan="2" width="8%"><font size="1" face="sans-serif">Generation</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="8%"><font size="1" face="sans-serif">Marketing</font></td>
    <td width="2%">&nbsp;</td>
    <td colspan="2" width="7%"><font size="1" face="sans-serif">Corporate</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><font size="1" face="sans-serif">Total</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><b><font size="1" face="sans-serif">Revenues</font></b></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">498.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">992.4</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">1.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">1,492.1</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><font size="1" face="sans-serif">Trading purchases</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%">-</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(974.5)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(974.5)</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><b><font size="1" face="sans-serif">Net segment revenues</font></b></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">498.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">17.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">1.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">517.6</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><font size="1" face="sans-serif">Fuel and purchased power</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(226.9)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(226.9)</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><b><font size="1" face="sans-serif">Gross margin</font></b></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">271.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">17.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">1.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">290.7</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><font size="1" face="sans-serif">Operations, maintenance and
      administration</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">115.3</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">3.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">16.2</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">135.1</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><font size="1" face="sans-serif">Depreciation and
      amortization</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">57.4</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">0.5</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">4.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">62.5</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><font size="1" face="sans-serif">Asset impairment and
      equipment cancellation charges </font><i><font size="1" face="sans-serif">(Note
      6)</font></i></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">152.5</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">152.5</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><font size="1" face="sans-serif">Taxes, other than income
      taxes</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">7.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">7.6</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><b><font size="1" face="sans-serif">EBIT before corporate
      allocations</font></b></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(61.0)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">13.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">(19.8)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(67.0)</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><font size="1" face="sans-serif">Corporate allocations</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(18.1)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(2.3)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">20.4</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><b><font size="1" face="sans-serif">EBIT</font></b></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(79.1)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">11.5</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">0.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(67.0)</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><font size="1" face="sans-serif">Other income</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">1.0</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><font size="1" face="sans-serif">Foreign exchange gain</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">0.9</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><font size="1" face="sans-serif">Net interest expense</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(24.0)</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td align="right" colspan="6" width="80%"><b><font size="1" face="sans-serif">Earnings
      from continuing operations before income taxes and non-controlling
      interests</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="7%"><b><font size="1" face="sans-serif">(89.1)</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="6">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="62%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="center" colspan="3" width="10%"><font size="1" face="sans-serif">Unaudited</font></td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">Energy</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><i><font size="1" face="sans-serif">3 months ended Dec. 31,
      2001</font></i></td>
    <td align="right" colspan="2" width="8%"><font size="1" face="sans-serif">Generation</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="8%"><font size="1" face="sans-serif">Marketing</font></td>
    <td width="2%">&nbsp;</td>
    <td colspan="2" width="7%"><font size="1" face="sans-serif">Corporate</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%"><font size="1" face="sans-serif">Total</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><b><font size="1" face="sans-serif">Revenues</font></b></td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">431.8</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">526.9</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">958.7</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><font size="1" face="sans-serif">Trading purchases</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">(524.3)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">(524.3)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><b><font size="1" face="sans-serif">Net segment revenues</font></b></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">431.8</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">2.6</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">434.4</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><font size="1" face="sans-serif">Fuel and purchased power</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">(246.4)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">(246.4)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><b><font size="1" face="sans-serif">Gross margin</font></b></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">185.4</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">2.6</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">188.0</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><font size="1" face="sans-serif">Operations, maintenance and
      administration</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">68.7</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">1.6</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">19.1</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">89.4</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><font size="1" face="sans-serif">Depreciation and
      amortization</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">41.4</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">4.0</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">6.4</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">51.8</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><font size="1" face="sans-serif">Asset impairment and
      equipment cancellation charges </font><i><font size="1" face="sans-serif">(Note
      6)</font></i></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">2.7</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">2.7</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><font size="1" face="sans-serif">Taxes, other than income
      taxes</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">4.6</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">4.6</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><font size="1" face="sans-serif">Prior period regulatory
      decisions </font><i><font size="1" face="sans-serif">(Note 10)</font></i></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">(11.0)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">(11.0)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><b><font size="1" face="sans-serif">EBIT before corporate
      allocations</font></b></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">79.0</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">(3.0)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(25.5)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">50.5</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><font size="1" face="sans-serif">Corporate allocations</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">(23.6)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">(1.9)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">25.5</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><b><font size="1" face="sans-serif">EBIT</font></b></td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">55.4</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">(4.9)</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">50.5</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><font size="1" face="sans-serif">Other income</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">1.2</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><font size="1" face="sans-serif">Foreign exchange gain</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">2.9</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="62%"><font size="1" face="sans-serif">Net interest expense</font></td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="7%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="7%"><font size="1" face="sans-serif">(12.4)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td align="right" colspan="6" width="80%"><b><font size="1" face="sans-serif">Earnings
      from continuing operations before income taxes and non-controlling
      interests</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="7%"><font size="1" face="sans-serif">42.2</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="6">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p align="right"><font color="#999999" size="6" face="sans-serif">:P29</font></p>
<hr noshade align="center" width="100%" size="2">
<a name="page_30"></a>
<p align="right"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="right"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="45%"><b><font size="1" face="sans-serif">Earnings information</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td colspan="3" width="12%"><font size="1" face="sans-serif">Unaudited</font></td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="10%"><font size="1" face="sans-serif">Energy</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><b><i><font size="1" face="sans-serif">Year ended Dec. 31,
      2002</font></i></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td colspan="2" width="10%"><font size="1" face="sans-serif">Generation</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="10%"><font size="1" face="sans-serif">Marketing</font></td>
    <td width="2%">&nbsp;</td>
    <td colspan="2" width="7%"><font size="1" face="sans-serif">Corporate</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%"><font size="1" face="sans-serif">Total</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><b><font size="1" face="sans-serif">Revenues</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">1,673.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">3,703.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">1.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">5,378.7</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><font size="1" face="sans-serif">Trading purchases</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">(3,654.8)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">(3,654.8)</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><b><font size="1" face="sans-serif">Net segment revenues</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">1,673.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">49.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">1.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">1,723.9</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><font size="1" face="sans-serif">Fuel and purchased power</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">(703.6)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">(703.6)</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="45%"><b><font size="1" face="sans-serif">Gross margin</font></b></td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">970.3</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">49.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">1.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">1,020.3</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="45%"><font size="1" face="sans-serif">Operations,
      maintenance and administration</font></td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">346.3</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">15.1</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">59.1</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">420.5</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="45%"><font size="1" face="sans-serif">Depreciation
      and amortization</font></td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">196.3</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">2.5</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">20.2</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">219.0</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="45%"><font size="1" face="sans-serif">Asset
      impairment and equipment cancellation charges</font></td>
    <td width="8%"><i><font size="1" face="sans-serif">(Note 6)</font></i></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">152.5</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">152.5</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="45%"><font size="1" face="sans-serif">Taxes, other
      than income taxes</font></td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">27.3</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">0.1</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">27.4</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><font size="1" face="sans-serif">Prior period regulatory
      decisions </font><i><font size="1" face="sans-serif">(Note 10)</font></i></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">3.3</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">3.3</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><b><font size="1" face="sans-serif">EBIT before corporate
      allocations</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">244.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">31.3</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">(78.3)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">197.6</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><font size="1" face="sans-serif">Corporate allocations</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">(70.6)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">(8.3)</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">78.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><b><font size="1" face="sans-serif">EBIT</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">174.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">23.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">0.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">197.6</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><font size="1" face="sans-serif">Other income</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">0.1</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><font size="1" face="sans-serif">Foreign exchange gain</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">1.2</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><font size="1" face="sans-serif">Net interest expense</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">(82.7)</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td colspan="9" width="78%"><b><font size="1" face="sans-serif">Earnings
      from continuing operations before income taxes and non-controlling
      interests</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">116.2</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="9">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="45%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td colspan="3" width="12%"><font size="1" face="sans-serif">Audited</font></td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">Energy</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><i><font size="1" face="sans-serif">Year ended Dec. 31, 2001</font></i></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="10%"><font size="1" face="sans-serif">Generation</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="10%"><font size="1" face="sans-serif">Marketing</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="7%"><font size="1" face="sans-serif">Corporate</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="center" width="9%"><font size="1" face="sans-serif">Total</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><b><font size="1" face="sans-serif">Revenues</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">2,158.4</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">2,694.7</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">4,853.1</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><font size="1" face="sans-serif">Trading purchases</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(2,533.7)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(2,533.7)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><b><font size="1" face="sans-serif">Net segment revenues</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">2,158.4</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">161.0</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">2,319.4</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><font size="1" face="sans-serif">Fuel and purchased power</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(1,230.6)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(1,230.6)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="45%"><b><font size="1" face="sans-serif">Gross margin</font></b></td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">927.8</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">161.0</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">1,088.8</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="45%"><font size="1" face="sans-serif">Operations,
      maintenance and administration</font></td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">290.6</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">36.2</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">65.4</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">392.2</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="45%"><font size="1" face="sans-serif">Depreciation
      and amortization</font></td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">156.5</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">11.0</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">23.7</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">191.2</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="45%"><font size="1" face="sans-serif">Asset
      impairment and equipment cancellation charges</font></td>
    <td width="8%"><i><font size="1" face="sans-serif">(Note 6)</font></i></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">118.8</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">118.8</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="2" width="45%"><font size="1" face="sans-serif">Taxes, other
      than income taxes</font></td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">18.7</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">18.7</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><font size="1" face="sans-serif">Prior period regulatory
      decisions </font><i><font size="1" face="sans-serif">(Note 10)</font></i></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(11.0)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(11.0)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><b><font size="1" face="sans-serif">EBIT before corporate
      allocations</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">354.2</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">113.8</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">(89.1)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">378.9</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><font size="1" face="sans-serif">Corporate allocations</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(82.5)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(6.6)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">89.1</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><b><font size="1" face="sans-serif">EBIT</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">271.7</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">107.2</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">378.9</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><font size="1" face="sans-serif">Other income</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">1.5</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><font size="1" face="sans-serif">Foreign exchange gain</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">0.8</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><font size="1" face="sans-serif">Net interest expense</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">(88.1)</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td colspan="9" width="78%"><b><font size="1" face="sans-serif">Earnings
      from continuing operations before income taxes and non-controlling
      interests</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">293.1</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="9">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><b><font size="1" face="sans-serif">II. Selected balance
      sheet information</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">Energy</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="7%"><font size="1" face="sans-serif">Discontinued</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><b><i><font size="1" face="sans-serif">Dec. 31, 2002 (unaudited)</font></i></b></td>
    <td colspan="2" width="9%"><font size="1" face="sans-serif">Generation</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="10%"><font size="1" face="sans-serif">Marketing</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="10%"><font size="1" face="sans-serif">Corporate</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="7%"><font size="1" face="sans-serif">Operations</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="center" width="9%"><font size="1" face="sans-serif">Total</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><font size="1" face="sans-serif">Goodwill</font></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">29.3</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">27.2</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">56.5</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><font size="1" face="sans-serif">Other assets</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">6,353.4</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">315.3</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">694.4</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">7,363.1</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><b><font size="1" face="sans-serif">Total segment assets</font></b></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">6,353.4</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">344.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">721.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="6%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="9%"><b><font size="1" face="sans-serif">7,419.6</font></b></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><i><font size="1" face="sans-serif">Dec. 31, 2001 (audited)</font></i></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="6%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="9%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><font size="1" face="sans-serif">Goodwill</font></td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="8%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">29.3</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">-</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">29.3</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><font size="1" face="sans-serif">Other assets</font></td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="8%"><font size="1" face="sans-serif">5,873.2</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">384.0</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">643.0</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="6%"><font size="1" face="sans-serif">676.9</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="9%"><font size="1" face="sans-serif">7,577.1</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="45%"><font size="1" face="sans-serif">Total segment assets</font></td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="8%"><font size="1" face="sans-serif">5,873.2</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">413.3</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">643.0</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="6%"><font size="1" face="sans-serif">676.9</font></td>
    <td width="2%">&nbsp;</td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="9%"><font size="1" face="sans-serif">7,606.4</font></td>
    <td width="2%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><font color="#999999" size="6" face="sans-serif">:P30</font></p>
<hr noshade align="center" width="100%" size="2">
<p align="right"><b><font color="#9e9e9e" size="2" face="sans-serif">T R A N S A
L T A C O R P O R A T I O N</font></b></p>
<p align="right"><b><font color="#9e9e9e" size="1" face="sans-serif">Q U A R T E
R L Y R E P O R T 2 0 0 2</font></b></p>
<a name="page_31"></a>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="38%"><b><font size="1" face="sans-serif">III. Selected cash flow
      information</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td align="right" colspan="2" width="5%"><font size="1" face="sans-serif">Energy</font></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="11%"><font size="1" face="sans-serif">Discontinued</font></td>
    <td width="2%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
  </tr>
  <tr>
    <td width="38%"><b><i><font size="1" face="sans-serif">3 months ended Dec.
      31, 2002</font></i></b></td>
    <td colspan="2" width="8%"><font size="1" face="sans-serif">Generation</font></td>
    <td align="right" colspan="2" width="5%"><font size="1" face="sans-serif">Marketing</font></td>
    <td width="2%">&nbsp;</td>
    <td colspan="2" width="6%"><font size="1" face="sans-serif">Corporate</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="2" width="11%"><font size="1" face="sans-serif">Operations</font></td>
    <td width="2%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="12%"><font size="1" face="sans-serif">Total</font></td>
    <td width="8%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td colspan="2">
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="38%"><b><font size="1" face="sans-serif">Capital expenditures</font></b></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">190.8</font></b></td>
    <td width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="4%"><b><font size="1" face="sans-serif">2.1</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="5%"><b><font size="1" face="sans-serif">1.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="3%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="8%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="5%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">194.6</font></b></td>
    <td width="8%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="38%"><i><font size="1" face="sans-serif">3 months ended Dec. 31,
      2001</font></i></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="38%"><font size="1" face="sans-serif">Capital expenditures</font></td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="8%"><font size="1" face="sans-serif">415.5</font></td>
    <td width="1%"><font size="1" face="sans-serif">$</font></td>
    <td width="4%"><font size="1" face="sans-serif">2.0</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="5%"><font size="1" face="sans-serif">(6.3)</font></td>
    <td width="2%">&nbsp;</td>
    <td width="3%"><font size="1" face="sans-serif">$</font></td>
    <td width="8%"><font size="1" face="sans-serif">7.8</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="5%"><font size="1" face="sans-serif">$</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">419.0</font></td>
    <td width="8%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="38%"><b><i><font size="1" face="sans-serif">Year ended Dec. 31,
      2002</font></i></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="38%"><b><font size="1" face="sans-serif">Capital expenditures</font></b></td>
    <td align="center" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="8%"><b><font size="1" face="sans-serif">909.1</font></b></td>
    <td width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="4%"><b><font size="1" face="sans-serif">4.2</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td align="right" width="5%"><b><font size="1" face="sans-serif">10.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="3%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="8%"><b><font size="1" face="sans-serif">21.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="5%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="12%"><b><font size="1" face="sans-serif">945.8</font></b></td>
    <td width="8%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="38%"><i><font size="1" face="sans-serif">Year ended Dec. 31, 2001</font></i></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="38%"><font size="1" face="sans-serif">Capital expenditures</font></td>
    <td align="center" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="8%"><font size="1" face="sans-serif">1,147.6</font></td>
    <td width="1%"><font size="1" face="sans-serif">$</font></td>
    <td width="4%"><font size="1" face="sans-serif">43.8</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="5%"><font size="1" face="sans-serif">15.1</font></td>
    <td width="2%">&nbsp;</td>
    <td width="3%"><font size="1" face="sans-serif">$</font></td>
    <td width="8%"><font size="1" face="sans-serif">40.0</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="5%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" colspan="2" width="14%"><font size="1" face="sans-serif">1,246.5</font></td>
    <td width="8%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="38%"><b><font size="1" face="sans-serif">IV. Reconciliation</font></b></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="4%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="4" width="47%"><b><font size="1" face="sans-serif">Depreciation
      and amortization (D&amp;A) expense per statement of cash flows</font></b></td>
    <td width="4%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td width="12%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td align="right" colspan="5" width="13%"><font size="1" face="sans-serif">3
      months ended Dec. 31</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" colspan="6" width="31%"><font size="1" face="sans-serif">12
      months ended Dec. 31</font></td>
    <td width="8%">&nbsp;</td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="4%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="5%"><font size="1" face="sans-serif">2001</font></td>
    <td width="2%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">2002</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">2001</font></td>
    <td width="8%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="38%"><font size="1" face="sans-serif">D&amp;A expense for
      reportable segments</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="4%"><b><font size="1" face="sans-serif">62.5</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="5%"><font size="1" face="sans-serif">51.8</font></td>
    <td width="2%">&nbsp;</td>
    <td width="3%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="8%"><b><font size="1" face="sans-serif">219.0</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="5%"><font size="1" face="sans-serif">$</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">191.2</font></td>
    <td width="8%">&nbsp;</td>
  </tr>
  <tr>
    <td width="38%"><font size="1" face="sans-serif">Discontinued operations</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="4%"><b><font size="1" face="sans-serif">-</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="5%"><font size="1" face="sans-serif">12.9</font></td>
    <td width="2%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">15.6</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">46.5</font></td>
    <td width="8%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="3" width="46%"><font size="1" face="sans-serif">Mining
      equipment depreciation, included in fuel and purchased power</font></td>
    <td width="1%">&nbsp;</td>
    <td width="4%"><b><font size="1" face="sans-serif">9.3</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="5%"><font size="1" face="sans-serif">7.0</font></td>
    <td width="2%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">37.1</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">31.8</font></td>
    <td width="8%">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="3" width="46%"><font size="1" face="sans-serif">Site
      restoration accrual, included in fuel and purchased power</font></td>
    <td width="1%">&nbsp;</td>
    <td width="4%"><b><font size="1" face="sans-serif">7.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="5%"><font size="1" face="sans-serif">9.1</font></td>
    <td width="2%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">38.9</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">37.3</font></td>
    <td width="8%">&nbsp;</td>
  </tr>
  <tr>
    <td width="38%"><font size="1" face="sans-serif">Other</font></td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="4%"><b><font size="1" face="sans-serif">0.2</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td align="right" width="5%"><font size="1" face="sans-serif">1.8</font></td>
    <td width="2%">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td width="8%"><b><font size="1" face="sans-serif">4.2</font></b></td>
    <td width="2%">&nbsp;</td>
    <td width="5%">&nbsp;</td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">5.5</font></td>
    <td width="8%">&nbsp;</td>
  </tr>
  <tr>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="38%">&nbsp;</td>
    <td width="1%">&nbsp;</td>
    <td width="8%">&nbsp;</td>
    <td width="1%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="4%"><b><font size="1" face="sans-serif">79.7</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="1%"><font size="1" face="sans-serif">$</font></td>
    <td align="right" width="5%"><font size="1" face="sans-serif">82.6</font></td>
    <td width="2%">&nbsp;</td>
    <td width="3%"><b><font size="1" face="sans-serif">$</font></b></td>
    <td width="8%"><b><font size="1" face="sans-serif">314.8</font></b></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="5%"><font size="1" face="sans-serif">$</font></td>
    <td width="2%">&nbsp;</td>
    <td align="right" width="12%"><font size="1" face="sans-serif">312.3</font></td>
    <td width="8%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
    <td>
      <hr noshade size="1">
    </td>
    <td>&nbsp;</td>
  </tr>
</table>
<p><b><font size="1" face="sans-serif">1</font></b>&nbsp;<b><font size="1" face="sans-serif">4
.. U N I T E D S T A T E S G E N E R A L L Y A C C E P T E D A C C O U N T I N G
P R I N C I P L E S</font></b></p>
<p><font size="1" face="sans-serif">These interim consolidated financial
statements have been prepared in accordance with Canadian GAAP and follow the
same accounting policies and methods of computation as, and should be read in
conjunction with, the most recent annual financial statements.</font></p>
<p><font size="1" face="sans-serif">In connection with the corporation's May 12,
2002 shelf debt prospectus, TransAlta is required to reconcile these interim
consolidated financial statements to U.S. GAAP. This reconciliation will be
included with the corporation's annual report, and it shall be deemed to be
incorporated by reference into these interim consolidated financial statements.</font></p>
<p><b><font size="1" face="sans-serif">1</font></b>&nbsp;<b><font size="1" face="sans-serif">5
.. S U B S E Q U E N T E V E N T S</font></b></p>
<p><font size="1" face="sans-serif">On Jan. 13, 2003, TransAlta and EPCOR
Utilities Inc. (EPCOR) announced an agreement whereby TransAlta will acquire a
50 per cent interest in EPCOR's Genesee Phase three project for $395.0 million.
On the same date, TransAlta made a $157.0 million payment to EPCOR for
TransAlta's share of project costs incurred to date. A 450 MW addition to the
existing Genesee Generating station is currently under construction and expected
to commence commercial operations in early 2005. Included in the arrangement is
an option for EPCOR to puchase a 50 per cent interest in TransAlta's Centennial
one project, formerly referred to as Keephills three. The option expires Dec.
31, 2005. EPCOR also has the option to purchase a 50 per cent interest in
TransAlta's Sarnia plant, which may be exercised between January 2003 and March
2004.</font></p>
<p><font size="1" face="sans-serif">On Jan. 24, 2003, the corporation announced
the acquisition of 50 per cent of the membership interests in CE Generation LLC
(CE Gen) for US$205.0 million (approximately Cdn$312 million) plus approximately
US$35.0 million (approximately Cdn$53 million) and the assumption of debt of
approximately US$500.0 million (approximately Cdn$762 million). The acquisition
will be accounted for using the purchase method of accounting. CE Gen is
controlled jointly by TransAlta and MidAmerican Energy Holdings Company. As
such, the financial results of CE Gen will be proportionately consolidated with
those of TransAlta. The transaction closed on Jan. 29, 2003.</font></p>
<p align="right"><font color="#999999" size="6" face="sans-serif">:P31</font></p>
<a name="page_32"></a>
<hr noshade align="center" width="100%" size="2">
&nbsp;
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:14pt; padding:0pt; text-indent:0pt; line-height:16pt; font-size:14pt; color:#000000" align=center><B>Signatures</B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:24pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding-left:0pt; padding-top:0pt; padding-right:9.9pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right><U>TransAlta Corporation</U></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:0pt; padding-top:0pt; padding-right:18pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right>(Registrant)</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding-left:0pt; padding-top:0pt; padding-right:9pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right>By:<U>/s/ Alison T. Love</U></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:0pt; padding-top:0pt; padding-right:18pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right>(Signature)</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:0pt; padding-top:0pt; padding-right:18pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=right>Alison T. Love, Corporate Secretary</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:0pt; padding-top:0pt; padding-right:18pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">Date: January 31, 2003&nbsp; </P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt; color:#000000" noshade size=1.333>
&nbsp;
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000" align=center><B>CERTIFICATIONS</B></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:12pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">I, Stephen G. Snyder, certify that:</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding:0pt; text-indent:72pt; font-size:12pt; color:#000000"><BR></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-14pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:-18pt; line-height:14pt; font-size:12pt; color:#000000">1.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">I have reviewed this Report of Foreign Private Issuer on Form 6-K of TransAlta Corporation;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-14pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:-18pt; line-height:14pt; font-size:12pt; color:#000000">2.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-14pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:-18pt; line-height:14pt; font-size:12pt; color:#000000">3.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-14pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:-18pt; line-height:14pt; font-size:12pt; color:#000000">4.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:72pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">a) &nbsp;designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:72pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">b) &nbsp;evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the &#147;Evaluation Date&#148;); and</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:72pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">c) &nbsp;presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-14pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:-18pt; line-height:14pt; font-size:12pt; color:#000000">5.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:72pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">a) &nbsp;all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weakness in internal controls; and</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:72pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">b) &nbsp;any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-14pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:-18pt; line-height:14pt; font-size:12pt; color:#000000">6.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">The registrant's other certifying officer and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-14pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">Date: </P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-14pt; padding:0pt; text-indent:36pt; line-height:14pt; font-size:12pt; color:#000000"><U>January 31, 2003</U></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-14pt; padding:0pt; text-indent:252pt; line-height:14pt; font-size:12pt; color:#000000"><U>/s/ Stephen G. Snyder</U></P>
<U><P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:432pt; font-size:12pt; color:#000000"><BR></U></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:252pt; line-height:14pt; font-size:12pt; color:#000000">Stephen G. Snyder</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:252pt; line-height:14pt; font-size:12pt; color:#000000">President and Chief Executive Officer</P>
<BR>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt; color:#000000" noshade size=1.333>
&nbsp;
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">I, Ian Bourne, certify that:</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding:0pt; text-indent:72pt; font-size:12pt; color:#000000">&nbsp;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-14pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:-18pt; line-height:14pt; font-size:12pt; color:#000000">1.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">I have reviewed this Report of Foreign Private Issuer on Form 6-K of TransAlta Corporation;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-14pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:-18pt; line-height:14pt; font-size:12pt; color:#000000">2.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-14pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:-18pt; line-height:14pt; font-size:12pt; color:#000000">3.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-14pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:-18pt; line-height:14pt; font-size:12pt; color:#000000">4.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:72pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">a) &nbsp;designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:72pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">b) &nbsp;evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the &#147;Evaluation Date&#148;); and</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:72pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">c) &nbsp;presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-14pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:-18pt; line-height:14pt; font-size:12pt; color:#000000">5.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:72pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">a) &nbsp;all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weakness in internal controls; and</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:72pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">b) &nbsp;any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-14pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:-18pt; line-height:14pt; font-size:12pt; color:#000000">6.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:12pt; padding-left:36pt; padding-top:0pt; padding-right:0pt; padding-bottom:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">The registrant's other certifying officer and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-14pt; padding:0pt; text-indent:0pt; line-height:14pt; font-size:12pt; color:#000000">Date: <U>January 31, 2003</U></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-14pt; padding:0pt; text-indent:252pt; line-height:14pt; font-size:12pt; color:#000000"><U>/s/ Ian Bourne</U></P>
<U><P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:432pt; font-size:12pt; color:#000000"><BR></U></P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:252pt; line-height:14pt; font-size:12pt; color:#000000">Ian Bourne</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:-14pt; padding:0pt; text-indent:252pt; line-height:14pt; font-size:12pt; color:#000000">Executive Vice President and
Chief Financial Officer</P>
<P style="margin-left:0pt; margin-top:0pt; margin-bottom:0pt; padding:0pt; text-indent:0pt; font-size:12pt; color:#000000"><BR></P>
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