Enbridge Inc.
TSX : ENB
NYSE : ENB

Enbridge Inc.

July 28, 2005 07:15 ET

Enbridge Reports First Half Earnings of $314.2 Million

CALGARY, ALBERTA--(CCNMatthews - July 28, 2005) - Enbridge Inc. (TSX:ENB) (NYSE:ENB)

Highlights

- Adjusted operating earnings for the first half increase 10% to $300.6 million

- Adjusted operating earnings for the second quarter increase 15% to $95.6 million

- New five-year Incentive Tolling Settlement adds value for Enbridge and liquids shippers

- Gateway Condensate and Southern Access open seasons advance growth initiatives

- Neptune laterals project builds on recently acquired deepwater assets in the Gulf of Mexico

"This has been a very strong quarter with a 15% increase in adjusted operating earnings and significant progress on a number of important growth initiatives" said Patrick D. Daniel, President & Chief Executive Officer of Enbridge Inc. "Our earnings performance in the first six months of 2005 positions us well to meet our previously stated expectations for the year."

Mr. Daniel concluded, "During the quarter we launched formal open seasons to confirm shipper support for the Gateway condensate project as well as the Southern Access expansion and extension. Enbridge is working hard on these projects and many others to address strong supply and demand fundamentals and meet the needs of our customers while ensuring we continue to deliver superior returns to our shareholders."

On July 27, 2005, the Enbridge Board of Directors declared quarterly dividends of $0.25 per common share on a post-split basis and $0.34375 per Series A Preferred Share. Both dividends are payable on September 1, 2005 to shareholders of record on August 15, 2005. On May 5, 2005, the Company's shareholders approved a stock split with a record date of May 20, 2005.

The Board of Directors of Enbridge announced today that Donald J. Taylor has rejoined the Board and that David A. Leslie has been appointed as a director. Mr. Taylor, the former Chair of the Board, did not stand for re-election as a director at the annual shareholders' meeting in May 2005, having reached the normal age for retirement. The Board asked that Mr. Taylor re-join the Board for an additional two years, noting the valuable advice Mr. Taylor has provided to Enbridge. Mr. Leslie, a resident of Toronto, is a chartered accountant and the former Chairman and CEO of Ernst & Young LLP.

Earnings applicable to common shareholders are $314.2 million for the six months ended June 30, 2005, or $0.93 per share, compared with $360.8 million, or $1.08 per share, in 2004. The $46.6 million decrease in earnings is due to the previously announced change in the year-end of the gas distribution operations and the elimination of seasonal distribution rates at Enbridge Gas Distribution. These factors create a lack of comparability between periods, however a reconciliation is provided below. Other significant changes include the earnings from the recently acquired Enbridge Offshore Pipelines, lower interest expense and the absence of earnings from AltaGas, which was sold in 2004.

Earnings applicable to common shareholders are $93.6 million for the three months ended June 30, 2005, or $0.27 per share, compared with $248.4 million, or $0.74 per share, in 2004. The three-month results reflect similar factors as those for the six-month period except the change in year-end creates a larger negative variance in the second quarter. The prior year comparatives in the second quarter represent gas distribution operations for January through March, which are typically the coldest months and contribute most to earnings, whereas the current quarter gas distribution operations are April through June.



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Consolidated Earnings
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Three months ended Six months ended
(millions of Canadian dollars) June 30, June 30,
---------------------------------------------------------------------
2005 2004 2005 2004
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Liquids Pipelines 53.6 53.7 106.6 106.3
Gas Pipelines 18.7 13.9 37.0 26.9
Sponsored Investments 14.5 14.6 32.9 30.0
Gas Distribution and Services(1) 2.9 170.9 130.7 210.4
International 20.4 21.3 38.6 37.5
Corporate (16.5) (26.0) (31.6) (50.3)
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93.6 248.4 314.2 360.8
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(1) Consolidated earnings for 2005 reflect earnings from Enbridge Gas
Distribution (EGD), Noverco and Other Gas Distribution Operations
on a calendar year basis for the three and six months ended June
30, 2005; whereas, earnings for 2004 reflect earnings from EGD,
Noverco and Other Gas Distribution Operations on a quarter-lag
basis for the three and six months ended March 31, 2004.
Effective December 31, 2004, EGD changed its fiscal year-end for
financial reporting purposes from September 30 to December 31.
Accordingly, the 2004 earnings from EGD, Noverco and Other Gas
Distribution Operations are not comparable to earnings for 2005.
Reconciliations are provided below.


Non-GAAP Measures

This news release contains references to adjusted operating earnings, which represent earnings applicable to common shareholders adjusted for non-operating factors. This is not a measure that has a standardized meaning prescribed by Canadian generally accepted accounting principles (GAAP) and is not considered a GAAP measure. Therefore, this measure may not be comparable to a similar measure presented by other issuers. Management believes that the presentation of adjusted operating earnings provides more useful information to investors and shareholders as it provides clearer earnings trends and increased predictive value.



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Three months ended Six months ended
(millions of Canadian dollars) June 30, June 30,
---------------------------------------------------------------------
2005 2004 2005 2004
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GAAP earnings as reported 93.6 248.4 314.2 360.8
Non-operating factors and
variances as per table below 2.0 (164.9) (13.6) (86.8)
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Adjusted Operating Earnings 95.6 83.5 300.6 274.0
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Significant non-operating factors and variances affecting
consolidated earnings are as follows:


Three months ended Six months ended
(millions of Canadian dollars) June 30, June 30,
---------------------------------------------------------------------
2005 2004 2005 2004
---------------------------------------------------------------------

Sponsored Investments
Dilution gains on EEP
unit issuance - - 4.6 0.9

Gas Distribution and Services
Quarter lag earnings of EGD,
Noverco and other(1) - 152.3 - 179.4
Calendar basis earnings of
EGD, Noverco and other(1) - 21.7 - (130.6)
Colder/(warmer) than normal
weather at EGD (2.0) 3.7 1.7 20.2
Elimination of seasonal
distribution rates at EGD - (20.8) - 8.3
Dilution gain in Noverco
(Gaz Metro unit issuance) - - 7.3 -
Dilution gain
(AltaGas Income Trust) - 8.0 - 8.0
Revalue future income taxes
due to tax rate changes - - - 0.6

Total significant non-operating
factors and variances
increasing/(decreasing)
earnings (2.0) 164.9 13.6 86.8
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(1) Effective December 31, 2004, EGD's fiscal year-end changed from
September 30 to December 31 and EGD is no longer consolidated on
a quarter-lag basis. In order to compare 2004 earnings to 2005,
the 2004 first and second quarter earnings for EGD, Noverco and
Other Gas Distribution Operations, which were for the three and
six months ended March 31, 2004, have been eliminated and second
and third quarter earnings, for the three and six months ended
June 30, 2004, have been added. Other non-operating factors and
variances that affected these businesses in 2004 are for the
three and six months ended June 30, 2004, as was reported in
the Company's third quarter results for 2004.


Significant operating factors affecting earnings in 2005 include the following:

- Enbridge Offshore Pipelines, acquired December 31, 2004, contributes positive earnings.

- The Aux Sable liquids extraction plant reflects an improvement over the prior year due to improved fractionation margins.

- There are no earnings from AltaGas in 2005 as the investment was sold in 2004.

- Corporate costs are lower primarily as a result of lower interest expense.

The Company has foreign currency denominated earnings, primarily from U.S. based operations and investments, as well as its Euro investment in CLH. The Company uses long-term net investment hedges to economically hedge a significant portion of the cash flows related to certain of these operations. However, for accounting purposes this does not eliminate the earnings volatility due to exchange rate differences and the translation of these foreign currency denominated earnings. During the first half of 2005, the Company received foreign currency denominated cash distributions and settled associated hedge transactions resulting in $5.4 million (2004 - $2.8 million) of incremental cash flows, which is not included in reported earnings.



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Liquids Pipelines
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Three months ended Six months ended
(millions of Canadian dollars) June 30, June 30,
---------------------------------------------------------------------
2005 2004 2005 2004
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Enbridge System 39.5 41.5 78.4 82.7
Athabasca System 11.4 10.3 23.7 21.0
NW System 1.9 2.0 3.7 3.9
Feeder Pipelines and Other 0.8 (0.1) 0.8 (1.3)
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53.6 53.7 106.6 106.3
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- Enbridge System earnings include a lower earnings base from the Incentive Tolling Settlement (ITS) component of the Enbridge System reflecting the terms of the ITS memorandum of understanding, recently negotiated with the Canadian Association of Petroleum Producers and filed with the National Energy Board. Also contributing to the earnings variance in the Enbridge System are increased oil losses, predominantly in the first quarter.

- Increased earnings from the Athabasca System are consistent with the overall return underpinning the long-term take or pay contract with its major shipper as well as lower operating costs due to leak remediation in the prior year.

- The year to date earnings variance in Feeder Pipelines and Other is the result of Federal Energy Regulatory Commission ordered reparations on the Frontier Pipeline recorded in the first quarter of 2004.



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Gas Pipelines
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Three months ended Six months ended
(millions of Canadian dollars) June 30, June 30,
---------------------------------------------------------------------
2005 2004 2005 2004
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Alliance Pipeline (US) 8.5 9.7 16.4 18.7
Enbridge Offshore Pipelines 6.6 - 12.6 -
Vector Pipeline 3.6 4.2 8.0 8.2
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18.7 13.9 37.0 26.9
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- Alliance Pipeline (US) earnings variance primarily reflects the impact of the stronger Canadian dollar in 2005.

- Enbridge Offshore Pipelines was acquired on December 31, 2004 for $754.0 million.

- Vector earnings reflect the positive effect of continued growth in short haul firm transportation volumes offset by the negative impact of the stronger Canadian dollar in 2005.



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Sponsored Investments
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Three months ended Six months ended
(millions of Canadian dollars) June 30, June 30,
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2005 2004 2005 2004
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Enbridge Income Fund (EIF) 8.4 7.5 16.7 15.0
Enbridge Energy Partners (EEP) 6.1 7.1 11.6 14.1
Dilution Gains (EEP) - - 4.6 0.9
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14.5 14.6 32.9 30.0
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- The 2005 results from EIF include higher preferred share dividends as well as higher incentive income consistent with EIF's cash distribution increases in 2004.

- EEP's 2005 results reflect various factors including lower operating earnings, a stronger Canadian dollar and a lower ownership interest.

- EEP issued more partnership units in 2005 than 2004 and because Enbridge did not fully participate in these offerings, dilution gains resulted.



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Gas Distribution and Services
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Three months ended Six months ended
(millions of Canadian dollars) June 30, June 30,
---------------------------------------------------------------------
2005 2004 2005 2004
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Enbridge Gas Distribution(1) (2.8) 132.4 88.3 143.9
Noverco(1) (2.1) 15.0 19.8 28.6
CustomerWorks/ECS 6.2 4.3 12.3 9.2
Other Gas Distribution
Operations(1) 1.1 4.9 5.9 6.9
Enbridge Gas New Brunswick 1.0 0.6 2.0 1.7
Gas Services (1.0) (0.6) (0.1) (1.0)
Aux Sable 0.6 (1.8) 3.8 (0.5)
AltaGas Income Trust
(investment sold in 2004) - 15.6 - 20.3
Other (0.1) 0.5 (1.3) 1.3
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2.9 170.9 130.7 210.4
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(1) Earnings for 2005 are on a calendar year basis for the three and
six months ended June 30, 2005; whereas, earnings for 2004
reflect earnings on a quarter-lag basis for the three and six
months ended March 31, 2004. Effective December 31, 2004, EGD
changed its fiscal year-end for financial reporting purposes from
September 30 to December 31. Accordingly, the 2004 earnings from
EGD, Noverco and Other Gas Distribution Operations are not
comparable to earnings for 2005. Reconciliations are provided
below.


- Improved fractionation margins at the Aux Sable gas processing facility continue to generate positive earnings.

- The variance in Other is primarily the result of business development costs related to the proposed Rabaska LNG facility.



Three months ended Six months ended
(millions of Canadian dollars) June 30, June 30,
---------------------------------------------------------------------
2005 2004 2005 2004
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Enbridge Gas Distribution
- as reported (2.8) 132.4 88.3 143.9
Significant non-operating
factors and variances:
quarter lag earnings(1) - (132.4) - (143.9)
calendar basis earnings(2) - (22.7) - 109.7
warmer/(colder) than
normal weather 2.0 (3.7) (1.7) (20.2)
elimination of seasonal
distribution rates - 20.8 - (8.3)
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(0.8) (5.6) 86.6 81.2
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(1) These earnings are included in Enbridge's consolidated earnings
for the second quarter of 2004.
(2) These earnings are included in Enbridge's consolidated earnings
for the third quarter of 2004.


- EGD's 2005 regulatory decision eliminated seasonal distribution rates, which were higher in the winter months and lower in the summer months, and replaced them with a uniform annual rate. Commencing in 2005, this shifts a portion of earnings from the winter months to the summer months. The seasonal distribution rate variance, noted in the above table, is the effect of applying the uniform rate to 2004 results and volumes.

- The $5.4 million increase in earnings at EGD, primarily during the second quarter, reflects the timing of various expenses as compared to the forecast cost of service that is included in revenues.




Three months ended Six months ended
(millions of Canadian dollars) June 30, June 30,
---------------------------------------------------------------------
2005 2004 2005 2004
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Noverco - as reported (2.1) 15.0 19.8 28.6
Significant non-operating
factors and variances:
quarter lag earnings(1) - (15.0) - (28.6)
calendar basis earnings(2) - (0.1) - 14.9
dilution gain in Noverco
(Gaz Metro unit issuance) - - (7.3) -
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(2.1) (0.1) 12.5 14.9
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(1) These earnings are included in Enbridge's consolidated earnings
for the second quarter of 2004.
(2) These earnings are included in Enbridge's consolidated earnings
for the third quarter of 2004.


- Noverco results are lower due to increased future income tax expense in the second quarter of 2005. The Company recorded a $35 million cash dividend declared by Noverco in June as well as a $50 million adjustment for reciprocal dividends, both of which affect the accounting base of the investment and create a net future income tax expense. The remaining $35 million cash dividend was declared in July creating a future income tax recovery, to be recorded in the third quarter, and the full $70 million cash dividend was received on July 4, 2005.



Three months ended Six months ended
(millions of Canadian dollars) June 30, June 30,
---------------------------------------------------------------------
2005 2004 2005 2004
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Other Gas Distribution
Operations - as reported 1.1 4.9 5.9 6.9
Significant non-operating
factors and variances:
quarter lag earnings(1) - (4.9) - (6.9)
calendar basis earnings(2) - 1.1 - 6.0
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1.1 1.1 5.9 6.0
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(1) These earnings are included in Enbridge's consolidated earnings
for the second quarter of 2004.
(2) These earnings are included in Enbridge's consolidated earnings
for the third quarter of 2004.


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International
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Three months ended Six months ended
(millions of Canadian dollars) June 30, June 30,
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2005 2004 2005 2004
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CLH 14.0 14.7 25.6 24.5
OCENSA/CITCol 8.0 8.1 16.2 15.9
Other (1.6) (1.5) (3.2) (2.9)
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20.4 21.3 38.6 37.5
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- The Company's international investments continue to show strong
performance with no significant variances.


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Corporate
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Three months ended Six months ended
(millions of Canadian dollars) June 30, June 30,
---------------------------------------------------------------------
2005 2004 2005 2004
---------------------------------------------------------------------

Corporate (16.5) (26.0) (31.6) (50.3)
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- The decrease in corporate costs is primarily the result of lower interest expense in 2005 and higher business development activity in 2004, particularly in the second quarter. The lower interest expense is a function of lower interest rates and lower average debt balances, including the December 2004 redemption of preferred securities with the proceeds from the AltaGas disposition.

Conference Call

Enbridge will hold a conference call on July 28, 2005 at 9:30 a.m. Eastern time (7:30 a.m. Mountain time) to discuss the second quarter 2005 results. The call can be accessed at 1-800-299-0148, pass code of 90156282, and will be audio webcast live at www.enbridge.com/investor. An audio replay will be available shortly thereafter at 1-888-286-8010 using the access code 48398044; in addition, the webcast replay and transcript will be available on the website, later in the day.

The unaudited interim consolidated financial statements and MD&A, which contain additional notes and disclosures, are available on the Enbridge website.

Enbridge Inc. is a leader in energy transportation and distribution in North America and internationally. As a transporter of energy, Enbridge operates, in Canada and the United States, the world's longest crude oil and liquids pipeline system. The Company also has international operations and a growing involvement in the natural gas transmission and midstream businesses. As a distributor of energy, Enbridge owns and operates Canada's largest natural gas distribution company, which provides distribution services in the provinces of Ontario and Quebec, and in New York State; and is developing a gas distribution system for the Province of New Brunswick. The Company employs approximately 4,000 people, primarily in Canada, the United States and South America. Enbridge's common shares trade on the Toronto Stock Exchange in Canada and on the New York Stock Exchange in the United States under the symbol ENB. Information about Enbridge is available on the Company's website at www.enbridge.com.

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 Enbridge 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, weather, economic conditions and commodity prices. You can find a discussion of those risks and uncertainties in our Canadian securities filings and American SEC filings. While Enbridge 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. Enbridge 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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ENBRIDGE INC.
HIGHLIGHTS(1)
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(unaudited; millions of Canadian dollars
except per share amounts)

Three months ended Six months ended
June 30, June 30,
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2005 2004 2005 2004
-------------------------------------

FINANCIAL
Earnings Applicable to
Common Shareholders
Liquids Pipelines 53.6 53.7 106.6 106.3
Gas Pipelines 18.7 13.9 37.0 26.9
Sponsored Investments 14.5 14.6 32.9 30.0
Gas Distribution and Services 2.9 170.9 130.7 210.4
International 20.4 21.3 38.6 37.5
Corporate (16.5) (26.0) (31.6) (50.3)
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93.6 248.4 314.2 360.8
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Cash Provided By Operating
Activities
Earnings plus charges/(credits)
not affecting cash 295.9 368.2 664.8 607.9
Changes in operating assets
and liabilities 55.7 331.7 356.4 284.1
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351.6 699.9 1,021.2 892.0
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Common Share Dividends 86.9 78.9 173.8 157.6
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Earnings per Common Share 0.27 0.74 0.93 1.08
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Diluted Earnings per
Common Share 0.27 0.73 0.92 1.07
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Dividends per Common Share 0.2500 0.2288 0.5000 0.4575
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Weighted Average Common
Shares Outstanding (millions) 336.9 334.0
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Diluted Weighted Average Common
Shares Outstanding (millions) 340.2 337.0
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OPERATING
Liquids Pipelines(2)
Deliveries (thousands
of barrels per day) 1,999 2,156 2,015 2,131
Barrel miles (billions) 173 191 345 376
Average haul (miles) 951 974 945 975
Gas Distribution and Services(3)
Volumes (billion cubic feet) 75 192 264 322
Number of active customers
(thousands) 1,779 1,726 1,779 1,726
Degree day deficiency(4)
Actual 487 1,987 2,453 3,010
Forecast based on
normal weather 546 1,870 2,440 2,807
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(1) Financial and operating highlights of Gas Distribution and
Services for 2004 reflect the results of Enbridge Gas
Distribution (EGD) and other gas distribution operations on a
one-quarter lag basis for the three and six months ended March
31, 2004. For 2005, as a result of EGD's change in fiscal year
end from September 30 to December 31, financial and operating
highlights reflect the results of EGD and other gas distribution
operations for the three and six months ended June 30, 2005.
(2) Liquids Pipelines operating highlights include the statistics of
the 11.2% owned Lakehead System and other wholly-owned liquid
pipeline operations.
(3) Gas Distribution and Services volumes and the number of active
customers are derived from the aggregate system supply and direct
purchase gas supply arrangements.
(4) Degree-day deficiency is a measure of coldness. It is calculated
by accumulating for each day in the period the total number of
degrees each day by which the daily mean temperature falls below
18 degrees Celsius. The figures given are those accumulated in
the Toronto area.


ENBRIDGE INC.
CONSOLIDATED STATEMENTS OF EARNINGS

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(unaudited; millions of Canadian dollars
except per share amounts)

Three months ended Six months ended
June 30, June 30,
---------------------------------------------------------------------
2005 2004 2005 2004
---------------------------------------------------------------------

Revenues
Gas sales 665.1 1,323.1 2,219.0 2,292.9
Transportation 463.1 452.4 1,008.6 861.4
Energy services 78.6 68.4 160.9 142.8
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1,206.8 1,843.9 3,388.5 3,297.1
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Expenses
Gas costs 577.6 1,093.7 1,973.3 1,948.6
Operating and administrative 255.2 237.5 514.6 439.8
Depreciation 143.0 115.0 286.3 225.5
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975.8 1,446.2 2,774.2 2,613.9
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Operating Income 231.0 397.7 614.3 683.2
Investment and Other Income 40.6 95.2 122.8 171.4
Interest Expense (134.1) (123.1) (269.4) (247.2)
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137.5 369.8 467.7 607.4
Income Taxes (42.2) (119.7) (150.1) (243.2)
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Earnings 95.3 250.1 317.6 364.2
Preferred Share Dividends (1.7) (1.7) (3.4) (3.4)
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Earnings Applicable to
Common Shareholders 93.6 248.4 314.2 360.8
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Earnings Per Common Share 0.27 0.74 0.93 1.08
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Diluted Earnings Per Common Share 0.27 0.73 0.92 1.07
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CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

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Six months ended
(unaudited; millions of Canadian dollars) June 30,
---------------------------------------------------------------------
2005 2004
---------------------------------------------------------------------
Retained Earnings at Beginning of Period 1,840.9 1,511.4
Earnings Applicable to Common Shareholders 314.2 360.8
Common Share Dividends (173.8) (157.6)
Dividends Paid to Reciprocal Shareholder 5.4 -
Dividend Reclassification Adjustment 51.2 -
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Retained Earnings at End of Period 2,037.9 1,714.6
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ENBRIDGE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

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Three months ended Six months ended
June 30, June 30,
---------------------------------------------------------------------
(unaudited; millions of
Canadian dollars) 2005 2004 2005 2004
---------------------------------------------------------------------

Cash Provided By Operating
Activities
Earnings 95.3 250.1 317.6 364.2
Charges/(credits) not
affecting cash
Depreciation 143.0 115.0 286.3 225.5
Equity earnings less
than/(in excess of) cash
distributions 6.7 (23.4) (21.5) (55.1)
Gain on reduction of
ownership interest - (9.8) (15.6) (12.3)
Future income taxes 47.9 33.0 85.0 82.0
Other 3.0 3.3 13.0 3.6
Changes in operating assets
and liabilities 55.7 331.7 356.4 284.1
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351.6 699.9 1,021.2 892.0
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Investing Activities
Acquisitions (15.4) (13.7) (58.1) (17.4)
Long-term investments (0.8) - (61.8) (16.2)
Additions to property,
plant and equipment (116.4) (82.9) (199.5) (154.2)
Changes in construction payable (14.3) 2.1 (0.3) (3.1)
Changes in long-term
notes receivable (0.6) - (0.6) -
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(147.5) (94.5) (320.3) (190.9)
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Financing Activities
Net change in short-term
borrowings and short-term debt (8.6) (417.2) (709.8) (582.7)
Non-recourse short-term debt
issued by joint ventures 12.5 - 11.9 -
Long-term debt issues - - 620.1 300.0
Long-term debt repayments (100.0) (100.0) (396.9) (250.0)
Non-recourse long-term debt
repaid by joint ventures (48.1) (15.3) (52.4) (29.5)
Non-recourse long-term debt
issued by joint ventures - - 6.8 -
Non-controlling interests (7.2) (1.3) (11.9) (1.9)
Common shares issued 12.0 4.8 39.4 24.3
Preferred share dividends (1.7) (1.7) (3.4) (3.4)
Common share dividends (86.9) (78.9) (173.8) (157.6)
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(228.0) (609.6) (670.0) (700.8)
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Increase/(Decrease) in Cash (24.1) (4.2) 30.9 0.3
Cash at Beginning of Period 160.5 108.6 105.5 104.1
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Cash at End of Period 136.4 104.4 136.4 104.4
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ENBRIDGE INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

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June 30, December 31,
(unaudited; millions of Canadian dollars) 2005 2004
---------------------------------------------------------------------

Assets
Current Assets
Cash 136.4 105.5
Accounts receivable and other 1,232.8 1,451.9
Inventory 602.3 791.6
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1,971.5 2,349.0
Property, Plant and Equipment, net 10,328.0 9,066.5
Long-Term Investments 1,913.1 2,278.3
Receivable from Affiliate 180.9 171.7
Deferred Amounts and Other Assets 799.9 729.2
Goodwill 360.5 31.5
Intangible Assets 249.2 133.9
Future Income Taxes 120.7 145.0
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15,923.8 14,905.1
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---------------------------------------------------------------------

Liabilities and Shareholders' Equity
Current Liabilities
Short-term borrowings 241.6 650.6
Accounts payable and other 1,166.9 1,275.9
Interest payable 78.3 83.8
Current maturities and short-term debt 541.2 703.9
Current portion of non-recourse
long-term debt 84.2 30.2
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2,112.2 2,744.4
Long-Term Debt 6,166.5 6,053.3
Non-Recourse Long-Term Debt 1,674.3 665.2
Other Long-Term Liabilities 95.8 151.8
Future Income Taxes 951.3 797.3
Non-Controlling Interests 682.9 514.9
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11,683.0 10,926.9

Shareholders' Equity
Share capital
Preferred shares 125.0 125.0
Common shares 2,321.8 2,282.4
Contributed surplus 7.1 5.4
Retained earnings 2,037.9 1,840.9
Foreign currency translation adjustment (115.3) (139.8)
Reciprocal shareholding (135.7) (135.7)
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4,240.8 3,978.2
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15,923.8 14,905.1
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SEGMENTED INFORMATION

Three months ended June 30, 2005
---------------------------------------------------------------------
(millions Gas
of Canadian Liquids Gas Sponsored Distribution
dollars) Pipelines Pipelines Investments and Services(1)
---------------------------------------------------------------------

Revenues 214.1 98.3 61.7 830.7
Gas costs - - - (577.6)
Operating and
administrative (77.0) (23.1) (14.9) (133.8)
Depreciation (36.5) (23.9) (17.9) (62.5)
---------------------------------------------------------------------
Operating income 100.6 51.3 28.9 56.8
Investment and
other income (0.4) 1.3 10.1 (1.4)
Interest and preferred
equity charges (24.2) (21.6) (15.8) (42.6)
Income taxes (22.4) (12.3) (8.7) (9.9)
---------------------------------------------------------------------
Earnings applicable to
common shareholders 53.6 18.7 14.5 2.9
---------------------------------------------------------------------
---------------------------------------------------------------------


SEGMENTED INFORMATION

Three months ended June 30, 2005
---------------------------------------------------------------------
(millions of
Canadian dollars) International Corporate Consolidated
---------------------------------------------------------------------

Revenues 2.0 - 1,206.8
Gas costs - - (577.6)
Operating and
administrative (3.5) (2.9) (255.2)
Depreciation (0.3) (1.9) (143.0)
---------------------------------------------------------------------
Operating income (1.8) (4.8) 231.0
Investment and other income 22.8 8.2 40.6
Interest and preferred
equity charges - (31.6) (135.8)
Income taxes (0.6) 11.7 (42.2)
---------------------------------------------------------------------
Earnings applicable
to common shareholders 20.4 (16.5) 93.6
---------------------------------------------------------------------
---------------------------------------------------------------------


Three months ended June 30, 2004
---------------------------------------------------------------------
(millions Gas
of Canadian Liquids Gas Sponsored Distribution
dollars) Pipelines Pipelines Investments and Services(1)
---------------------------------------------------------------------

Revenues 220.0 72.2 - 1,543.0
Gas costs - - - (1,093.7)
Operating and
administrative (81.1) (15.6) - (124.9)
Depreciation (35.8) (17.1) - (60.8)
---------------------------------------------------------------------
Operating income 103.1 39.5 - 263.6
Investment and
other income - 0.2 25.2 37.5
Interest and preferred
equity charges (25.4) (17.2) - (43.7)
Income taxes (24.0) (8.6) (10.6) (86.5)
---------------------------------------------------------------------
Earnings applicable to
common shareholders 53.7 13.9 14.6 170.9
---------------------------------------------------------------------
---------------------------------------------------------------------


Three months ended June 30, 2004
---------------------------------------------------------------------
(millions of
Canadian dollars) International Corporate Consolidated
---------------------------------------------------------------------

Revenues 8.7 - 1,843.9
Gas costs - - (1,093.7)
Operating and
administrative (9.7) (6.2) (237.5)
Depreciation (0.5) (0.8) (115.0)
---------------------------------------------------------------------
Operating income (1.5) (7.0) 397.7
Investment and other income 23.0 9.3 95.2
Interest and preferred
equity charges (0.1) (38.4) (124.8)
Income taxes (0.1) 10.1 (119.7)
---------------------------------------------------------------------
Earnings applicable to
common shareholders 21.3 (26.0) 248.4
---------------------------------------------------------------------
---------------------------------------------------------------------


Six months ended June 30, 2005
---------------------------------------------------------------------
(millions Gas
of Canadian Liquids Gas Sponsored Distribution
dollars) Pipelines Pipelines Investments and Services(1)
---------------------------------------------------------------------

Revenues 425.9 194.8 122.0 2,640.3
Gas costs - - - (1,973.3)
Operating and
administrative (151.2) (44.3) (28.1) (274.0)
Depreciation (73.7) (48.1) (35.4) (125.6)
---------------------------------------------------------------------
Operating income 201.0 102.4 58.5 267.4
Investment and
other income (1.2) 1.3 30.8 25.2
Interest and preferred
equity charges (48.5) (42.7) (31.3) (87.3)
Income taxes (44.7) (24.0) (25.1) (74.6)
---------------------------------------------------------------------
Earnings applicable to
common shareholders 106.6 37.0 32.9 130.7
---------------------------------------------------------------------
---------------------------------------------------------------------


Six months ended June 30, 2005
---------------------------------------------------------------------
(millions of
Canadian dollars) International Corporate Consolidated
---------------------------------------------------------------------

Revenues 5.5 - 3,388.5
Gas costs - - (1,973.3)
Operating and
administrative (8.1) (8.9) (514.6)
Depreciation (0.6) (2.9) (286.3)
---------------------------------------------------------------------
Operating income (3.2) (11.8) 614.3
Investment and other
income 42.9 23.8 122.8
Interest and preferred
equity charges - (63.0) (272.8)
Income taxes (1.1) 19.4 (150.1)
---------------------------------------------------------------------
Earnings applicable to
common shareholders 38.6 (31.6) 314.2
---------------------------------------------------------------------
---------------------------------------------------------------------


Six months ended June 30, 2004
---------------------------------------------------------------------
(millions Gas
of Canadian Liquids Gas Sponsored Distribution
dollars) Pipelines Pipelines Investments and Services(1)
---------------------------------------------------------------------

Revenues 424.9 139.7 - 2,716.4
Gas costs - - - (1,948.6)
Operating and
administrative (149.2) (28.4) - (232.8)
Depreciation (71.7) (33.9) - (117.5)
---------------------------------------------------------------------
Operating income 204.0 77.4 - 417.5
Investment and other
income 1.0 0.4 50.8 59.3
Interest and preferred
equity charges (50.4) (34.0) - (86.7)
Income taxes (48.3) (16.9) (20.8) (179.7)
---------------------------------------------------------------------
Earnings/(loss)
applicable to
common shareholders 106.3 26.9 30.0 210.4
---------------------------------------------------------------------
---------------------------------------------------------------------


Six months ended June 30, 2004
---------------------------------------------------------------------
(millions of
Canadian dollars) International Corporate Consolidated
---------------------------------------------------------------------

Revenues 16.1 - 3,297.1
Gas costs - - (1,948.6)
Operating and administrative (18.7) (10.7) (439.8)
Depreciation (0.9) (1.5) (225.5)
---------------------------------------------------------------------
Operating income (3.5) (12.2) 683.2
Investment and other income 42.3 17.6 171.4
Interest and preferred
equity charges (0.1) (79.4) (250.6)
Income taxes (1.2) 23.7 (243.2)
---------------------------------------------------------------------
Earnings/(loss) applicable
to common shareholders 37.5 (50.3) 360.8
---------------------------------------------------------------------
---------------------------------------------------------------------

1. Gas Distribution and Services results for 2004 were consolidated
on a one-quarter-lag basis and therefore reflect the three and
six month periods ended March 31, 2004. Starting at the end of
2004, EGD changed its fiscal year end from September 30 to
December 31. Therefore, the quarter lag basis of consolidation
was eliminated. Gas Distribution and Services results for 2005
reflect the three and six month periods ended June 30, 2005.


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