Enbridge Income Fund
TSX : ENF.UN

Enbridge Income Fund

April 30, 2007 15:38 ET

Enbridge Income Fund Announces Quarterly Results

CALGARY, ALBERTA--(CCNMatthews - April 30, 2007) - Enbridge Income Fund (TSX:ENF.UN) (the "Fund") today announced earnings of $3.5 million, or $0.10 per unit, for the quarter ended March 31, 2007 compared with $5.3 million, or $0.15 per unit, in the prior year. The results reflected increased costs in the Corporate segment, primarily higher current taxes, as well as higher interest expense, incentive fees and ECT preferred unit distributions, which were partially offset by a solid contribution from the Green Power segment. Performance from Alliance Canada and the Saskatchewan System was consistent with the prior year comparable period.

Jim Schultz, President of Enbridge Management Services Inc., the Administrator of the Fund, commented, "During the first quarter, the Fund continued to provide consistent distributions to unitholders, which were in line with expectations. We will continue to focus on maximizing cash flow; first by ensuring existing operations are optimized and second by continuing to pursue near-term organic growth opportunities including the Westspur expansion in the Saskatchewan System, the BCX expansion in Alliance Canada, and the construction of three new waste heat recovery facilities in NRGreen."

During the three months ended March 31, 2007, the Fund declared monthly cash distributions of $0.08 per ordinary unit. Cash distributions of the same amount per unit were also declared on the subordinated units and the ECT preferred units. The Fund pays cash distributions on a monthly basis to unitholders of record on the last business day of each month. Distributions are payable on or about the 15th day of the month following the declaration.

Based on current operations, the Fund estimates that approximately 80% of cash to be distributed in 2007 will be included in the income of unitholders for tax purposes. The remaining 20% of cash distributed to unitholders represents non-taxable return of capital.

Certain information provided in this news release constitutes forward-looking statements. The words "anticipate", "expect", "project", "estimate", "forecast" and similar expressions are intended to identify such forward-looking statements. Although the Fund believes that these statements are based on information and assumptions, which are current, reasonable and complete, these statements are necessarily subject to a variety of risks and uncertainties pertaining to operating performance, regulatory parameters, economic conditions and commodity prices. You can find a discussion of those risks and uncertainties in our Canadian securities filings. While the Fund makes these forward-looking statements in good faith, should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary significantly from those expected. Except to the extent required by applicable securities law and regulations, the Fund assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.



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SELECTED OPERATING AND FINANCIAL HIGHLIGHTS(1)
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Three months ended
March 31,
(millions of Canadian dollars except where -------------------------
otherwise noted) 2007 2006
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Average Daily Throughput Volume
Alliance Canada (millions of cubic feet per day) 1,676.0 1,681.0
Saskatchewan System(2) (thousands of barrels per
day)
Westspur System 156.9 157.2
Saskatchewan Gathering System 109.2 105.6
Weyburn System 31.4 37.8
Virden System 22.7 26.9
Green Power(3) (thousands of megawatt hours produced) 85.5 -

Revenue 65.0 61.9

Earnings 3.5 5.3
Per Unit (dollars per unit) 0.10 0.15

Cash Available for Distribution 18.1 20.8
Cash Distributions Declared 17.4 16.7

Cash Distributions Declared Per Unit (dollars per
unit)
Ordinary Units 0.2400 0.2298
Subordinated Units 0.2400 0.2298
Enbridge Commercial Trust (ECT) Preferred Units 0.2400 0.2298

Total Long-Term Liabilities 1,512.6 1,486.6

Total Assets 1,863.3 1,846.1

ECT Preferred Units (number of units) 38,023,750 38,023,750

Ordinary Units (number of units) 20,125,000 20,125,000
Subordinated Units (number of units) 14,500,000 14,500,000
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Total Number of Units 34,625,000 34,625,000
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(1) Financial Highlights have been extracted from financial statements
prepared in accordance with Canadian Generally Accepted Accounting
Principles.
(2) Totals are not presented as the same volumes can be transported through
a combination of the pipelines comprising the Saskatchewan System.
(3) Wind assets were acquired on October 1, 2006. NRGreen's Kerrobert waste
heat recovery facility began operations December 29, 2006.


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CONSOLIDATED EARNINGS
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Three months ended
(millions of dollars) March 31,
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2007 2006
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Alliance Canada 14.0 13.7
Saskatchewan System 2.9 3.1
Green Power 0.8 -
Corporate (14.2) (11.5)
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Earnings 3.5 5.3
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- Alliance Canada first quarter earnings were higher as a result of the elimination of the large corporation tax and the reduction in the capital tax rate. These factors were partially offset by a reduction in the equity return caused by the depreciating investment base and a reduction in the recovery of notional taxes in tolls due to tax rate changes.

- Saskatchewan System first quarter earnings were consistent with the comparable prior year period and reflected the timing of allowance oil sales.

- Green Power earnings in the period met expectations and were generated primarily from the Wind Power assets. Earnings also included a positive contribution from NRGreen. The NRGreen Kerrobert facility commenced operations on December 29, 2006 and was fully operational for the last six weeks of the quarter ending March 31, 2007.

- The increase in Corporate costs in the first quarter was driven by:

-- higher current taxes than for the same period in the prior year due to a recovery of current tax that was recognized in the first quarter of 2006 and higher accrued current tax expense in the first quarter of 2007 due to timing;

-- an increase in interest expense as a result of increased borrowings to finance the acquisition of the Wind Power projects; and

-- higher incentive fees and ECT preferred unit distributions due to a 4.5% increase in per unit distributions in the fourth quarter of 2006.



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CASH AVAILABLE FOR DISTRIBUTION(1)
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Three months ended
March 31,
-------------------------
(millions of dollars) 2007 2006
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Cash Provided by Operating Activities 31.1 32.6
Add/(Deduct):
ECT preferred unit distributions 9.1 8.7
Alliance Canada cash retained (12.7) (6.7)
Green Power cash retained (0.6) (4.0)
Saskatchewan System maintenance capital expenditures - (0.2)
Change in operating assets and liabilities in the
period (8.8) (9.6)
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Cash Available for Distribution 18.1 20.8
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Cash Available for Distribution is comprised of the
following:
Alliance Canada distributions 16.0 18.1
Alliance Canada capital tax (0.1) (0.3)
Alliance Canada large corporations tax - (0.4)
Saskatchewan System operating income before
depreciation, amortization and accretion 6.4 6.4
Saskatchewan System maintenance capital expenditures - (0.2)
Green Power distributions 1.1 -
Green Power cash used for settlement of cash flow
hedges (0.2) -
Corporate management and administrative expense (1.4) (0.9)
Corporate other income - 0.1
Corporate interest expense (3.1) (2.3)
Corporate current taxes (0.6) 0.3
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Cash Available for Distribution 18.1 20.8
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Cash Distributions Declared 17.4 16.7
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(1) Cash available for distribution is not a standardized measure under
Canadian Generally Accepted Accounting Principles; therefore, it may not
be comparable to similarly titled measures used by other issuers.


The above calculations of cash available for distribution represent cash available to fund distributions on ordinary units, subordinated units and ECT preferred units, as well as for debt repayments and reserves. This measure is important to unitholders as the Fund's objective is to provide a stable and sustainable flow of distributable cash to unitholders.

Cash available for distribution decreased from the prior year by $2.7 million primarily due to increased costs within Corporate.

For the three months ended March 31, 2007, cash distributions declared of $17.4 million (2006 - $16.7 million) represented 96.1% (2006 - 80.3%) of cash available for distribution. As at March 31, 2007, the Fund had distributed 91.6% of cash available since inception.

The cash retained by Alliance Canada and Green Power reflects the cash from operations of these segments that has not been distributed to the Fund. While the cash from operations was proportionately consolidated and was included in the results of the Fund, it is not available for distribution by the Fund until it has been received from the joint ventures. Cash available for distribution from Alliance Canada and Green Power was reduced to reflect debt service reserves, capital expenditures and other cash that was needed to fund working capital or other requirements of these segments. Distributions from Alliance Canada, which are subject to the approval of the Board of Directors of the General Partner of Alliance Canada, are made on a quarterly basis and paid in the month subsequent to a quarter end. In the Green Power segment, distributions from the wind power projects are made monthly, while distributions from NRGreen will be paid on a quarterly basis and paid in the month subsequent to a quarter end.

The Saskatchewan System maintenance capital expenditures were determined based on the capital requirements necessary to maintain the service capability of the existing assets and include the replacement of system components and equipment that is worn, obsolete or completing its useful life.

CHANGES IN ACCOUNTING POLICIES

Effective January 1, 2007, the Fund adopted new accounting standards for: Financial Instruments - Recognition and Measurement, Financial Instruments - Disclosure and Presentation, Comprehensive Income, and Hedges. The new standards require that the Fund now recognize certain financial instruments, including cash flow hedges, on the balance sheet at fair value. To the extent cash flow hedges are effective, the unrealized changes in fair value are recorded in Accumulated Other Comprehensive Income (AOCI), a component of unitholders' equity, until the gains or losses are realized and recognized in earnings. To report the changes in AOCI during the period, the Fund presents a separate Statement of Comprehensive Income in the consolidated financial statements.

The Fund uses hedges to mitigate fluctuations in cash flows from the sale of power generated by certain wind power assets. The new accounting standards require changes in the fair value of the hedges be reflected in AOCI. However, the new standards do not affect earnings or distributable cash flow generated by the Fund.

Enbridge Income Fund is an unincorporated, open-ended trust created to provide a stable and sustainable flow of distributable cash to unitholders. The Fund is a premier income fund in Canada with a low-risk profile focused on energy infrastructure assets. Its assets include a 50% interest in the Canadian segment of the Alliance Pipeline, a 100% interest in the various pipelines comprising the Saskatchewan System, and 50% interest in each of NRGreen Limited Partnership and the SunBridge wind project as well as a 33% interest in each of the Magrath and Chin Chute wind projects. Information about Enbridge Income Fund, including the interim consolidated financial statements and MD&A, is available on the Fund's web site at www.enbridgeincomefund.com.



ENBRIDGE INCOME FUND
CONSOLIDATED STATEMENTS OF EARNINGS
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Three months ended
March 31,
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(unaudited; millions of dollars, except per unit
amounts) 2007 2006
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Revenue 65.0 61.9

Expenses
Operating and maintenance 15.4 13.3
Management and administrative 1.4 0.9
Capital taxes 0.2 0.4
Depreciation and amortization 20.7 19.5
Accretion on asset retirement obligations 0.1 0.1
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37.8 34.2
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27.2 27.7
Other Income and Expense 0.1 0.2
Interest Expense (15.2) (15.0)
ECT Preferred Unit Distributions (9.1) (8.7)
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3.0 4.2

Tax Recovery/(Expense)
Current (0.6) (0.1)
Future 1.1 1.2
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0.5 1.1
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Earnings 3.5 5.3
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Basic and Diluted Earnings per Trust Unit 0.10 0.15
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ENBRIDGE INCOME FUND
CONSOLIDATED STATEMENTS OF UNITHOLDERS' EQUITY
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Three months ended
March 31,
----------------------------------------------------------------------------
(unaudited; millions of dollars) 2007 2006
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Trust Units 333.4 333.4
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Deficit, Beginning of Period (36.1) (39.3)
Earnings 3.5 5.3
Distributions to unitholders (8.3) (8.0)
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Deficit, End of Period (40.9) (42.0)
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Accumulated Other Comprehensive Loss, Beginning of
Period - -
Cumulative impact of change in accounting policy (6.1) -
Other comprehensive loss (3.5) -
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Accumulated Other Comprehensive Loss, End of Period (9.6) -
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Total Unitholders' Equity 282.9 291.4
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ENBRIDGE INCOME FUND
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Three months ended
March 31,
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(unaudited; millions of dollars) 2007 2006
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Earnings 3.5 5.3
Other Comprehensive Income/(Loss)
Change in unrealized fair value on cash flow hedges (3.7) -
Reclassification of realized settlements on cash
flow hedges to earnings 0.2 -
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(3.5) -
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Comprehensive Income - 5.3
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ENBRIDGE INCOME FUND
CONSOLIDATED STATEMENTS OF CASH FLOWS
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Three months ended
March 31,
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(unaudited; millions of dollars) 2007 2006
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Cash Provided by Operating Activities
Earnings 3.5 5.3
Charges/(credits) not affecting cash
Depreciation and amortization 20.7 19.5
Amortization of deferred financing charges 0.4 0.5
Accretion on asset retirement obligations 0.1 0.1
Amortization of fair value increment on debt (1.3) (1.2)
Future income taxes (1.1) (1.2)
Changes in operating assets and liabilities
Change in accounts receivable and other (2.4) 4.0
Change in accounts payable and accrued liabilities 11.4 8.8
Change in deferred amounts and other assets (0.9) (4.2)
Change in long-term liabilities 0.7 1.0
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31.1 32.6
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Investing Activities
Additions to property, plant and equipment (5.8) (1.6)
Change in construction payable (5.5) (0.7)
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(11.3) (2.3)
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Financing Activities
Net change in long-term credit facility 5.0 (2.0)
Net change in non-recourse long-term credit facility (0.5) (0.1)
Ordinary and subordinated trust unit distributions (8.3) (8.0)
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(3.8) (10.1)
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Increase in Cash and Cash Equivalents 16.0 20.2
Cash and Cash Equivalents at Beginning of Period 17.4 11.1
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Cash and Cash Equivalents at End of Period 33.4 31.3
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Cash and Cash Equivalents 12.5 4.3
Cash and Cash Equivalents in Trust 20.9 27.0
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33.4 31.3
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ENBRIDGE INCOME FUND
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
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March 31, December 31,
(unaudited; millions of dollars) 2007 2006
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Assets
Current Assets
Cash and cash equivalents 33.4 17.4
Accounts receivable and other 29.9 27.5
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63.3 44.9
Property, Plant and Equipment, Net 1,335.5 1,349.0
Intangible Assets 100.5 101.9
Goodwill 308.1 308.1
Deferred Amounts and Other Assets 55.9 60.3
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1,863.3 1,864.2
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Liabilities and Unitholders' Equity
Current Liabilities
Accounts payable and accrued liabilities 38.9 32.0
Distributions payable 2.8 2.8
Current portion of non-recourse long-term debt 26.1 26.1
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67.8 60.9
Long-Term Debt 258.8 259.0
Non-Recourse Long-Term Debt 775.0 781.3
ECT Preferred Units 380.2 380.2
Long-Term Liabilities 18.9 4.8
Asset Retirement Obligations 8.0 7.9
Future Income Taxes 71.7 72.8
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1,580.4 1,566.9
Unitholders' Equity
Trust units 333.4 333.4
Deficit (40.9) (36.1)
Accumulated other comprehensive loss (9.6) -
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282.9 297.3
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1,863.3 1,864.2
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ENBRIDGE INCOME FUND
SEGMENTED INFORMATION

Three months ended March 31, 2007
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Alliance Saskatchewan Green
(millions of dollars) Canada System Power Corporate Consolidated
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Revenue 51.3 11.7 2.0 - 65.0
Operating and
maintenance (9.7) (5.2) (0.5) - (15.4)
Management and
administrative - - - (1.4) (1.4)
Capital taxes (0.1) (0.1) - - (0.2)
Depreciation and
amortization (15.8) (4.2) (0.7) - (20.7)
Accretion on asset
retirement obligations - (0.1) - - (0.1)
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25.7 2.1 0.8 (1.4) 27.2
Other income and
expense 0.1 - - - 0.1
Interest expense (11.8) - - (3.4) (15.2)
ECT preferred unit
distributions - - - (9.1) (9.1)
Current taxes - - - (0.6) (0.6)
Future taxes - 0.8 - 0.3 1.1
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Earnings 14.0 2.9 0.8 (14.2) 3.5
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Three months ended March 31, 2006
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Alliance Saskatchewan Green
(millions of dollars) Canada System Power Corporate Consolidated
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Revenue 50.6 11.3 - - 61.9
Operating and
maintenance (8.5) (4.8) - - (13.3)
Management and
administrative - - - (0.9) (0.9)
Capital taxes (0.3) (0.1) - - (0.4)
Depreciation and
amortization (15.4) (4.1) - - (19.5)
Accretion on asset
retirement obligations - (0.1) - - (0.1)
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26.4 2.2 - (0.9) 27.7
Other income and
expense 0.1 - - 0.1 0.2
Interest expense (12.4) - - (2.6) (15.0)
ECT preferred unit
distributions - - - (8.7) (8.7)
Current taxes (0.4) - - 0.3 (0.1)
Future taxes - 0.9 - 0.3 1.2
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Earnings 13.7 3.1 - (11.5) 5.3
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