Newalta Announces Record First Quarter Performance
CALGARY, ALBERTA--Newalta Income Fund (TSX: NAL.UN) today
announced unaudited financial results for the three months ended
March 31, 2003.

As Newalta Income Fund is the successor organization to Newalta
Corporation, information for the three months ended March 31,
2003 along with comparative information for the respective period
in 2002 is provided.

Financial Highlights ($000's)


/T/

                           Three Months Ended March 31
                                    (unaudited)
                               2003            2002    %Increase
                                                       (Decrease)
                           ----------------------------------------
Revenue                      38,410          23,705           62
Operating income before
 reorganization costs         7,945           4,653           71
Operating income              3,461           4,653          (26)
Net earnings                  2,088           2,713          (23)
Net earnings per
 unit (cents)(2)                9.5            15.3          (38)
Diluted net
 earnings per unit (cents)      9.5            15.3          (38)
EBITDA(1) before
 reorganization costs        11,776           7,907           49
EBITDA                        7,292           7,907           (8)
Trailing 12 month
 EBITDA before
 reorganization costs        38,721          30,714           26
Trailing 12 month EBITDA     33,641          28,186           19
Cash flow before
 reorganization costs        11,111           6,976           59
Cash flow                     6,608           6,976           (5)
Cash flow before
 reorganization costs,
 per unit (cents)              50.8            39.4           29
Cash flow per unit (cents)     30.2            39.4          (23)
Capital expenditures, net     1,484           2,444          (39)
Weighted average
 units outstanding
 (000s) (2)                  21,888          17,704           24
Total units
 outstanding (000s)(2)       22,029          17,704           24
-------------------------------------------------------------------

/T/

(1) EBITDA is provided to assist management and investors in
determining the ability of the Fund to generate cash from
operations. It is calculated from the consolidated statements of
income as revenue less operating and general and administrative
expenses. This measure does not have any standardized meaning
prescribed by GAAP and may not be comparable to similar measures
presented by other funds or companies.

(2) For comparative purposes the previously reported weighted
average and total number of shares outstanding in 2002 have been
converted to units on a 2:1 basis, and per unit calculations have
been restated on this basis.

(3) Distributable cash is provided to assist management and
investors in determining the ability of the Fund to make cash
distributions. It is defined as cash flow from operations less
scheduled principal payments and net capital expenditures. This
measure does not have any standardized meaning prescribed by GAAP
and may not be comparable to similar measures presented by other
funds or companies.

Financial Summary and Operational Highlights

Revenue increased $14.7 million, or 62%, from the first quarter
of last year. Operating income, excluding reorganization costs,
improved more than 70% to $7.9 million. Diluted net earnings per
unit, excluding reorganization costs, increased 51% from 15.3
cents in 2002 to 23.1 cents in 2003. Distributable cash (3),
excluding the reorganization costs, was 44 cents per unit for the
quarter.

"The investments that we made last year, including the Mohawk
acquisition, the improvements in productivity and profitability
that we achieved and the robust market conditions in the quarter
all contributed to outstanding results. As well, higher crude oil
prices during the quarter contributed $1.0 million to operating
income," said Al Cadotte, President and Chief Executive Officer.
"Initiatives undertaken in the first quarter to increase prices,
reduce costs and enhance efficiencies will drive improved
profitability for the remainder of the year. We remain determined
to maximize the performance of our operations this year and to
deliver superior returns to our unitholders."

Outlook

The outlook for 2003 is very positive with excellent results in
the first quarter and steps already taken and underway to further
enhance performance. In addition, we are taking action now to
drive 2004 performance as we also explore potential acquisitions
to capitalize on our unique recycling and recovery capabilities,
our management experience and our network of facilities and
infrastructure.

Management's Discussion and Analysis as well as financial
statements and notes to the financial statements are attached.

Management will hold a conference call on Monday, May 5, 2003 at
1:00 p.m. (ET) to discuss the first quarter results. To listen,
please dial 1-800-814-4857 or 416-640-4127, or log onto the
webcast at www.newalta.com or www.cdn-news.com. For those unable
to listen to the live event, a rebroadcast will be available
until midnight, May 12, 2003. Please dial 416-640-1917 or
1-877-289-8525 and enter the passcode 250722.

This document may contain forward-looking statements, relating to
the operations or to the environment in which Newalta operates,
which are based on the Fund's operations, estimates, forecasts
and projections. These statements are not guarantees of future
performance and involve risks and uncertainties that are
difficult to predict, or are beyond the Fund's control. A number
of important factors could cause actual outcomes and results to
differ materially from those expressed in these forward-looking
statements. These factors include those set forth in this report
and other public filings. Consequently, readers should not place
any undue reliance on such forward-looking statements. In
addition, these forward-looking statements relate to the date on
which they are made. Newalta disclaims any intention or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise.

Newalta Income Fund maximizes the inherent value in industrial
wastes through recovery of saleable products and recycling,
rather than disposal. Through an integrated network of 34
state-of-the-art facilities, Newalta delivers world-class
solutions to a broad customer base of national and international
corporations, in a range of industries, including the automotive,
forestry, pulp and paper, manufacturing, mining, oil and gas,
petrochemical, and transportation services industries. With a
strong track record of profitable growth and environmental
stewardship, Newalta is focused on leveraging its proven
competencies in new service sectors and geographic markets from
coast to coast.

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002

The following discussion and analysis should be read in
conjunction with the consolidated financial statements and notes
thereto for the year ended December 31, 2002 of Newalta
Corporation in the fiscal 2002 annual report, and the MD&A in the
fiscal 2002 annual report, including the section on risks and
uncertainties.

Summary

In the first quarter of 2003, Newalta Income Fund (the "Fund")
increased revenue 62% to $38.4 million, from $23.7 million in the
first quarter of 2002. Operating income before reorganization
costs improved 71% to $7.9 million. These increases were mainly
the result of strong commodity prices, high levels of activity in
the Oilfield division, and the Fund's 2002 acquisitions and
capital upgrades. Net earnings were approximately 77% of the $2.7
million earned in the first quarter of fiscal 2002, reflecting
the one time reorganization expense of converting into an income
fund. These reorganization costs totaled $4.5 million or 13.6
cents per unit after tax.

Cash flow was 5% lower than last year at $6.6 million. Excluding
reorganization costs cash flow improved by 59% to $11.1 million
and EBITDA1 improved by 49% to $11.8 million. After
reorganization costs, net earnings per unit were 9.5 cents
compared with 15.3 cents per unit2 in 2002. Excluding
reorganization costs, diluted net earnings per unit were 23.1
cents per unit in the first quarter of 2003 compared with 15.3
cents per unit in 2002.

Net capital expenditures for the first quarter were $1.5 million
compared with $2.5 million in 2002 and were primarily sustenance
in nature.

On March 1, 2003, the Fund completed its reorganization from a
corporation focusing on growth through reinvestment of cash flow
to a trust entity that will distribute a substantial portion of
cash flow to its unitholders. On March 20, 2003, the Fund
announced the first monthly distribution of 9 cents per unit
payable to unitholders of record as of March 31, 2003.
Subsequently, on April 15, 2003 the Fund paid unitholders a total
of $2.0 million.

Results of Operations - Three months ended March 31, 2003

Strong first quarter performance reflected strong commodity
prices, high oilfield activity levels, the impact of the 2002
capital projects, and consolidation activities undertaken in late
2002. Higher crude prices contributed $1.0 million in revenue and
operating income in the first quarter of 2003.

In the first quarter, general and administrative expenses
increased to $0.8 million from $0.6 million in the first quarter
of 2002. Included in these expenses was a non-cash accrual of
$0.3 million for the stock appreciation rights expense ($0.2
million 2002).

Interest expense of $0.8 million was equal to last year's
expense. Lower average debt levels were offset by slightly higher
interest rates. The decrease in long-term debt during the first
quarter was primarily due to the retirement of the $3.0 million
convertible debentures assumed with the acquisition of certain
oilfield facilities in 2001. As a percentage of revenue,
depreciation decreased to 8% from 10% in 2002. The reorganization
costs incurred during the quarter relate to restructuring the
corporation into an income fund.

The income tax expense recognizes the future liability arising
from the difference between taxable and accounting income. Due to
the reorganization into an income fund, with the exception of
capital taxes, the Fund does not anticipate being cash taxable in
the future.

Also during the first quarter, the Company implemented a new
pricing strategy in both divisions, which should be fully
implemented by the end of the second quarter of 2003.

-------------------------------

(1) EBITDA is provided to assist management and investors in
determining the ability of the Fund to generate cash from
operations. It is calculated from the consolidated statements of
income as revenue less operating and general and administrative
expenses.  This measure does not have any standardized meaning
prescribed by GAAP and may not be comparable to similar measures
presented by other funds or companies.

(2) Per unit calculations for 2002, prior to the reorganization
into the Fund, are calculated as if the weighted average number
of shares at the time had been converted to units on a 2:1 basis,
and have been retroactively restated.

Segmented Performance

Oilfield

The Oilfield segment recovers and resells crude oil from oilfield
wastes. This segment accounted for 62% of the Fund's total assets
and generated 67% of the Fund's total revenue. Revenue from the
Oilfield segment is generated mainly from the fees charged for
the treatment and processing of various oilfield waste materials
and from the sale of recovered crude oil. Approximately 83% of
Oilfield revenues come from wastes generated from day to day oil
and gas production. Revenues in the Oilfield segment are
partially dependent upon, and vary with, oilfield activity and
commodity prices. During the first quarter, drilling rig
utilization averaged 86% (68% in 2002) in western Canada, the
number of wells drilled increased to 4,030 from 3,358 in 2002,
and WTI averaged US$33.90 (US$21.64 in 2002). During the quarter,
the Oilfield segment recovered 68,000 barrels of crude oil, which
was sold at an average price of $45.45 per barrel. Comparable
recoveries in first quarter of 2002 were 60,019 barrels, at an
average price of $29.59 per barrel. Revenue for the three months
from the Oilfield segment increased 40% to $25.6 million and
segment margin improved 62% to $11.6 million.

Net margin, as a percentage of revenue, increased from 39% to 45%
as a result of improved commodity prices for recovered crude oil
and reduced operating costs resulting from cost reduction
initiatives and productivity improvements.

Segment capital expenditures for the quarter were $1.2 million
compared with $0.4 million in 2002.

The outlook for the Oilfield segment remains positive. Continuing
strength in oilfield activity combined with strategic initiatives
to improve profitability should deliver strong performance for
the balance of 2003.

Industrial

The Industrial segment collects automotive and industrial wastes
and waste lubricating oil in western Canada, which are then
processed into resalable products. This segment accounted for 36%
of the Fund's total assets and generated 33% of the Fund's total
revenue. The Industrial segment produces various recycled
products from waste lubricating oil, including base oil, burner
fuel, fuel oil, and drilling oil. Approximately 65% of the
Industrial segment revenue comes from product sales with the
balance from collection fees.

In the first quarter segment revenue increased 138%, to $12.8
million from $5.4 million in 2002. The Mohawk acquisition
contributed $4.7 million in revenue and $0.5 million in net
margin. The remaining revenue increase of approximately $2.0
million and a net margin decrease of approximately $0.35 million
resulted from the liquidation of excess burner fuel inventory.
Accordingly, net margins for the quarter increased $0.1 million.

As a result of the Mohawk acquisition and the inventory
liquidation, revenue attributed to product sales increased 250%
to $8.3 million. Also as a result of the Mohawk acquisition,
waste lube oil collection in the quarter increased 35% to 12.4
million liters from 9.1 million liters in 2002.

Segment capital expenditures for the quarter were $0.7 million
compared with $1.8 million in 2002.

Collection activity and product sales are expected to continue at
a high level for the balance of 2003 as newly acquired assets
become fully utilized. Price increases, which will be in place by
the end of the second quarter of 2003, and cost reduction
initiatives currently underway should improve net margins.

Capital Expenditures

Capital expenditures for the first quarter, net of disposal
proceeds, were $1.5 million, compared with $2.5 million a year
ago. The expenditures related primarily to sustenance spending.
Total sustenance capital expenditures for 2003 are estimated to
be approximately $7.5 million. Total growth capital expenditures
for 2003, excluding acquisitions, if any, are estimated to be
approximately $4.0 million.

Liquidity and Financial Resources

At March 31, 2003, total long-term debt (including convertible
debentures and the current portion of long-term debt) was $46.0
million or 1.4 times trailing EBITDA, compared with $59.5
million, or 2.1 times trailing EBITDA a year ago. During the
quarter, management negotiated a new credit facility with two
Canadian chartered banks. The new facility provides for a total
of $65.0 million in loan capacity, with equal quarterly payments
of $0.75 million commencing June 30, 2003.

Unitholders' Capital

During the first quarter, under a Plan of Arrangement, the Fund
issued 21.8 million units and 0.3 million Exchange Rights in
exchange for all of the common shares and options of Newalta
Corporation. In March 2003, holders of 0.2 million Exchange
Rights exercised resulting in an additional issuance of 0.2
million units. Outstanding units at the end of the quarter
totaled 22.0 million units.

Risks and Uncertainties

This report contains forward-looking statements that involve a
number of risks and uncertainties, including statements regarding
the outlook for the Fund's business and results of operations.
There are a number of factors that could cause actual results to
differ materially from those indicated. Operational risks
include:

- The business of the Fund is affected by fluctuations in the
level of activity in the oil and natural gas industry, which, in
turn, is directly affected by changes in world energy prices.

- Fluctuations in commodity prices also affect the value of the
crude oil the Fund recovers and resells. In the first quarter,
oil sales accounted for 8% of total revenue and in 2002 oil sales
accounted for 7 % of total revenue.

- The waste management industry is highly regulated, and the
Fund's business is affected by government legislation.

- The Fund's business is also affected by seasonality and by
competition, which varies by location and by type of service.

The Fund currently has no swaps, hedges nor derivatives in place.
Financial risk is limited to the Fund's exposure to fluctuations
in interest rates, and to the normal business risk incurred with
trade accounts receivable. In the first quarter of 2003, a 1%
change in interest rates would have increased/decreased operating
income by $0.1 million. Some sales are to customers based in the
United States and as a result the Fund is exposed to the risk of
currency exchange rate changes. Both exchange rate and trade
receivables risk are minimized through the Fund's credit granting
and receivables collection processes.


/T/

Quarterly comparison ($000's)

                                  Three Months Ended March 31
------------------------------------------------------------------
                                       2003                  2002
------------------------------------------------------------------
Revenue                              38,410                23,705
Net earnings                          2,088                 2,713
Net earnings per unit (cents)           9.5                  15.3
Diluted net earnings per unit (cents)   9.5                  15.3



Newalta Income Fund
Consolidated Balance Sheets
($000s)
                                   March 31,          December 31,
                                       2003                  2002
                                  Unaudited               Audited
------------------------------------------------------------------------
Assets
Current assets
 Accounts receivable                 28,809                27,924
 Inventory                            7,304                 7,923
 Prepaid expenses                       723                   730
------------------------------------------------------------------------
                                     36,836                36,577
Capital assets and intangibles      206,227               207,642
Goodwill                             10,782                10,782
Deferred costs                          815                   811
------------------------------------------------------------------------
                                    254,660               255,812
------------------------------------------------------------------------
------------------------------------------------------------------------

Liabilities
Current liabilities
 Bank indebtedness                    3,298                   759
 Accounts payable                    16,232                17,626
 Current portion of long-term
  debt (Note 3)                       3,005                 2,339
 Current portion of debentures        3,000                 6,000
------------------------------------------------------------------------
                                     25,535                26,724
Long-term debt (Note 3)              37,001                38,751
Debentures                            3,000                 3,000
Future income taxes                  33,222                32,024
Site restoration                      2,830                 2,732
------------------------------------------------------------------------
                                    101,588               103,231
------------------------------------------------------------------------

Unitholders' Equity
Unitholders' capital (Note 4)        98,209                98,269
Contributed surplus                     446
Accumulated earnings (Note 2)        56,400                54,312
Accumulated cash distributions       (1,983)
------------------------------------------------------------------------
                                    153,072               152,581
------------------------------------------------------------------------
                                    254,660               255,812
------------------------------------------------------------------------
------------------------------------------------------------------------



Newalta Income Fund
Consolidated Statements of Income and Accumulated Earnings
For the Three Months ended March 31
($000s) (Unaudited)
---------------------------------------------------------------------
                                      2003                  2002
---------------------------------------------------------------------


Revenue                             38,410                23,705
---------------------------------------------------------------------

Expenses
 Operating                          25,789                15,159
 General and administrative            845                   639
 Interest                              808                   781
 Depreciation and site remediation   3,023                 2,473
 Reorganization (Note 2)             4,484
---------------------------------------------------------------------
Operating income                     3,461                 4,653
Provisions for income taxes
 Current                               175                   150
 Future                              1,198                 1,790
---------------------------------------------------------------------
                                     1,373                 1,940
---------------------------------------------------------------------
Net earnings                         2,088                 2,713

Accumulated earnings,
 beginning of period                54,312                44,282
Goodwill write-down, net of tax                           (2,233)
Stock appreciation rights                                   (155)
---------------------------------------------------------------------
Accumulated earnings, end
 of period                          56,400                44,607
---------------------------------------------------------------------
Net earnings per unit (cents)
 (Note 2)                              9.5                  15.3
Diluted net earnings per unit
 (cents) (Note 2)                      9.5                  15.3
---------------------------------------------------------------------




Newalta Income Fund
Consolidated Statements of Cash Flows
For the Three Months ended March 31
($000s) (Unaudited)

                                        2003                  2002
                                      ----------------------------------

Net inflow (outflow) of cash
 related to the following activities:
Operating activities
 Net earnings                          2,088                 2,713
 Items not requiring cash
  Depreciation and site remediation    3,023                 2,473
  Future income taxes                  1,198                 1,790
  Stock compensation expense             318
  Reorganization                         (19)
------------------------------------------------------------------------
Cash flow from operations              6,608                 6,976
Increase in working capital           (3,489)              (27,809)
------------------------------------------------------------------------
                                       3,119               (20,833)
------------------------------------------------------------------------

Investing activities
 Additions to capital assets          (1,580)               (2,500)
 Net proceeds on sale of
  capital assets                         100                    38
 Deferred costs                           (4)                   18
 Site restoration                        (29)                   55
------------------------------------------------------------------------
                                      (1,513)               (2,389)
------------------------------------------------------------------------

Financing activities
 Equity proceeds receivable                                 28,000
 Repurchase of non-board lot shares      (61)
 Repurchase of debentures             (3,000)
 Decrease in long-term debt           (1,084)               (3,854)
------------------------------------------------------------------------
                                      (4,145)               24,146
------------------------------------------------------------------------
Net cash inflow (outflow)             (2,539)                  924
Cash (bank indebtedness),
 beginning of period                    (759)              (10,374)
------------------------------------------------------------------------
Cash (bank indebtedness),
 end of period                        (3,298)               (9,450)
------------------------------------------------------------------------
------------------------------------------------------------------------
Cash flow from operations per
 unit (cents)
 Basic                                  30.2                  39.4
 Diluted                                30.0                  39.0


Supplementary information:
Interest paid                          1,182                   743
Income taxes paid                        124                    89



NEWALTA INCOME FUND

Notes to the Consolidated Financial Statements
For the Three Months ended March 31, 2003 and 2002
($000s) (Unaudited)

/T/

Newalta Income Fund (the "Fund") is a Canadian income trust
engaged, through its wholly-owned subsidiary Newalta Corporation
("Newalta"), in maximizing the inherent value in oil, gas and
industrial wastes through recovery of saleable products and
recycling, rather than disposal. Through 34 integrated facilities
in western Canada, Newalta delivers solutions to a broad customer
base of national and international corporations, including
producers of crude oil and natural gas, and automotive and
industrial businesses.

1. Summary of Significant Accounting Policies

Newalta Income Fund was established by Deed of Trust dated
January 16, 2003. Pursuant to the terms of a Plan of Arrangement,
the Fund acquired all of the common shares of Newalta on March 1,
2003. Prior to the Plan of Arrangement the consolidated financial
statements include the accounts of Newalta and its subsidiaries.
After giving effect to the Plan of Arrangement, the consolidated
financial statements include the accounts of the Fund and its
subsidiaries. For reporting purposes the Fund is considered the
continuing entity of Newalta.

The interim consolidated financial statements include the
accounts of the Fund and its wholly owned subsidiary companies
and have been prepared by management in accordance with Canadian
generally accepted accounting principles. These interim
financials statements and the notes thereto should be read in
conjunction with Newalta's consolidated financial statements for
the year ended December 31, 2002 as contained in the Annual
Report for fiscal 2002.

The Fund is a unit trust for income tax purposes, and is taxable
on taxable income not allocated to the unitholders. During the
first quarter of 2003, the Fund allocated all of its taxable
income to the unitholders, and accordingly, no provision for
income taxes is required at the Fund level. Newalta is subject to
corporate income taxes and follows the liability method of
accounting for income taxes.

Accounting measurements at interim dates inherently involve
greater reliance on estimates than at year-end and the results of
operations for the interim periods shown in these statements are
not necessarily indicative of results to be expected for the
fiscal year. In the opinion of management, the accompanying
unaudited interim consolidated financial statements include all
adjustments (of a normal recurring nature) necessary to present
fairly the consolidated result of its operations and cash flows
for the three months ended March 31, 2003 and 2002.

2. Reorganization

On February 24, 2003, the shareholders and option holders of
Newalta approved a Plan of Arrangement under section 193 of the
Business Corporations Act (Alberta). The purpose of the
Arrangement was to convert Newalta from a corporate entity
concentrating on growth through reinvestment of cash flow to a
trust entity which will distribute a substantial portion of cash
flow to unitholders. The Plan of Arrangement was affected on
March 1, 2003.

Under the Plan of Arrangement the Fund issued units in exchange
for all of the shares of Newalta on a 1:2 basis. Prior to the
exchange, Newalta had approximately 43,634,000 shares outstanding
and, subsequent to the exchange, the Fund had approximately
21,810,000 units outstanding.

Associated with the reorganization, the Fund recorded
reorganization costs of $4,484 (excluding $596 recorded in 2002).


Effective March 1, 2003, the Fund established a Trust Unit Rights
Incentive Plan (the "Rights Incentive Plan") to replace the stock
option plan of Newalta. In accordance with the CICA Handbook
section 3870 regarding stock based compensation, grants under the
Rights Incentive Plan are valued and expensed at the time of
issuance. Rights are valued as options using a Black-Scholes
option pricing model. Prior to March 1, 2003, Newalta had
outstanding both options and stock appreciation rights. The
options were issued prior to January 1, 2002 and, in accordance
with CICA Handbook section 3870, had not been valued nor expensed
in the financial statements. The stock appreciation rights were
issued after January 1, 2002 and were expected to be settled in
cash. Accordingly an expense was recognized in each period based
on the gain in the underlying value of the common shares of
Newalta. For the first two months of 2003, prior to
reorganization into the Fund, Newalta expensed $318 in stock
appreciation rights expense. In the first quarter of 2002,
Newalta recognized $214 as an expense for stock appreciation
rights.

3. Debt

(a) Banking facility

On February 20, 2003, the Fund entered into an agreement for a
new banking facility with a syndicate arranged by two Canadian
chartered banks. The lending facility provides for a total of
$65,000 comprised of a $25,000 extendable term facility, a
$15,000 reducing 5-year term facility, and a $25,000 operating
facility. The credit facility is secured principally by a general
security agreement over the Fund's assets. Subject to certain
conditions the term facilities charge interest at prime plus 1%
or at Bankers Acceptance base plus 2.5% at the Fund's option. The
operating facility charges interest at prime plus .25% or at
Bankers Acceptance base plus 1.85%, also at the Fund's option. At
March 31, 2003, the Fund had utilized $40.0 million of the term
facilities and $3.3 million of the operating facility.

(b) Debentures

On February 28, 2003, $3,000 of 8% debentures were redeemed by
Newalta in exchange for cash. The remaining $6,000 of 9.5%
debentures mature half on September 1, 2003 and the balance on
September 1, 2004. The debentures are convertible to units of the
Fund at a conversion price of $8.00 per unit.

4. Unitholders' capital

Pursuant to the Plan of Arrangement 21,810,318 units were issued
by the Fund in exchange for 43,620,665 common shares of Newalta
previously outstanding. Additional units were subsequently issued
upon the exercise of Exchange Rights granted pursuant to the Plan
of Arrangement. The Fund declared a distribution $0.09 per unit
for a total of $1,983 to be paid on April 15, 2003 to unitholders
of record on March 31, 2003.


/T/

                                             Units/Shares       Amount
                                            ----------------------------
Shares issued as at December 31, 2002 (000s)       43,634      $98,269
Shares cancelled under the plan of arrangement    (43,634)     (98,269)

Units issued under the plan of arrangement         21,817       98,269
Non-board lot repurchased                              (6)         (62)
Rights exercised                                      218            2
------------------------------------------------------------------------
Units outstanding as at March 31, 2003             22,029      $98,209
------------------------------------------------------------------------

/T/

5. Trust Unit Rights Incentive Plan

On February 24, 2003, the Shareholders of Newalta approved the
Rights Incentive Plan. On March 1, 2003, the Fund granted
1,042,500 Rights under the plan to certain executives, trustees,
and employees. The Rights vest 20% annually from March 1, 2004
until March 1, 2008 and are exercisable at market value at the
time of the grant, $9.30 per unit. In addition, pursuant to the
Plan of Arrangement, the outstanding stock options as of March 1,
2003 were exchanged for Exchange Rights that are exercisable for
units at $0.01 per unit. 218,000 Exchange Rights were exercised
during March 2003, and a further 89,000 vest at various dates
over the next three years.

The Fund accounts for Rights granted pursuant to the Rights plan
using intrinsic values. On this basis compensation costs are not
required to be recognized in the financial statements for Rights
granted at market value. Had compensation costs for the Fund's
Rights Plan been determined based on the fair value methodology
at the date of the grant, the Fund's pro-forma net earnings for
the quarter would have been reduced by $963 and net earnings per
unit would have been 5.1 cents per unit. The fair market value of
the Rights is estimated on the grant date using the Black-Scholes
option pricing model with the following assumptions: risk-free
interest rate of 6%; yield of 12%; expected life of seven years;
and expected volatility of 48%.

The Exchange Rights were valued at the date of conversion, March
1, 2003, and the value of the Exchange Rights was attributed to
the Contributed Surplus of the Fund. The market value of the
Exchange Rights was recorded at $446 using the Black-Scholes
option pricing model with the following assumptions: risk-free
interest rate of 6%; yield of 12%; expected life of three years;
and expected volatility of 48%.

6. Net Earnings per unit

Basic per unit calculations for the three months ending March 31,
2003 were based on the weighted average number of units
outstanding for the quarter of 21,888,000 units. Basic per unit
calculations for the three months ending March 31, 2002 were
based on the weighted average number of shares outstanding for
the quarter. Diluted net earnings were based on the weighted
average number of units outstanding of 22,900,000 units for the
quarter ended March 31, 2003 and on the weighted average number
of shares outstanding for the quarter ended March 31, 2002. The
per unit and per share calculations and number of shares have
been retroactively restated to reflect the 2 for 1 conversion of
shares into units effective March 1, 2003.

7. Segmented Information

The Fund has two reportable segments. The Oilfield segment
recovers and resells crude oil from oilfield waste. The
Industrial segment collects waste lubricating oil, automotive,
and industrial wastes which are processed into resalable
products.


/T/

------------------------------------------------------------------------
                                                     Corporate  Consoli-
                                             Inter-        and    dated
2003                 Oilfield  Industrial  segment Unallocated    Total
------------------------------------------------------------------------
External revenue        25,621     12,789                        38,410
Inter segment revenue(3)    50         85     (135)                   -
Operating expense       11,384     10,897     (135)              22,146
Indirect operating
 expense(4)                931        700                2,012(5) 3,643
Depreciation and
 amortization            1,718      1,112                  193    3,023
------------------------------------------------------------------------
Net margin              11,638        165               (2,205)   9,598
General and
 administrative                                            845      845
Interest expense                                           808      808
Reorganization costs                                     4,484    4,484
------------------------------------------------------------------------
Operating income        11,638        165               (8,342)   3,461
------------------------------------------------------------------------
Capital expenditures     1,236        711                 (367)   1,580
Goodwill                10,782                                   10,782
Total assets           158,244     92,127                4,289  254,660
                      --------------------------------------------------
                      --------------------------------------------------

/T/

(3) Inter-segment revenues are recorded at market, less the costs
of serving external customers.


(4) Indirect operating expenses are defined as the allocated
general management costs for the reporting unit.


(5) Management does not allocate certain indirect operating,
general & administrative, taxes, and interest costs in the
segment analysis.

NEWALTA INCOME FUND

Notes to the Consolidated Financial Statements For the Three
Months ended March 31, 2003 and 2002 ($000s) (Unaudited)


/T/

------------------------------------------------------------------------
                                                     Corporate  Consoli-
                                             Inter-        and    dated
2002                 Oilfield  Industrial  segment Unallocated    Total
------------------------------------------------------------------------
External revenue       18,321       5,384                        23,705
Inter segment
 revenue(3)                36         102     (138)                   -
Operating expense       8,479       4,159     (138)              12,500
Indirect operating
 expense(4)             1,032         595                1,032(5) 2,659
Depreciation and
 amortization           1,658         680                  135    2,473
------------------------------------------------------------------------
Net margin              7,188          52               (1,167)   6,073
General and
 administrative                                            639      639
Interest expense                                           781      781
------------------------------------------------------------------------
Operating income        7,188          52               (2,587)   4,653
------------------------------------------------------------------------
Capital expenditures      375       1,790                  335    2,500
Goodwill               10,624                                    10,624
Total assets          148,822      75,396               35,426  259,644
                    ----------------------------------------------------
                    ----------------------------------------------------
For further information: Newalta Income Fund - Ronald L. Sifton, Senior Vice President, Finance and Chief Financial Officer, (403) 206-2684; Website: www.newalta.com