Enbridge Inc.
TSX : ENB
NYSE : ENB

Enbridge Inc.

November 01, 2006 07:30 ET

Enbridge Reports Nine-Month Earnings of $444.3 Million

CALGARY, ALBERTA--(CCNMatthews - Nov. 1, 2006) - Enbridge Inc. (TSX:ENB) (NYSE:ENB) -

Highlights

- Adjusted operating earnings for the third quarter increase 25% to $92.3 million

- Adjusted operating earnings for the nine months increase 12% to $420.5 million

- Ownership interest in EEP increases with US$250 million investment

- Construction continues on Athabasca lateral pipelines and terminals

- Construction commences on the Southern Access pipeline expansion

"Enbridge delivered a 12% increase in adjusted earnings per common share in the first nine months of 2006," said Patrick D. Daniel, President & Chief Executive Officer of Enbridge Inc. "In light of this strong earnings performance we expect full year 2006 adjusted operating earnings to be within our previously noted $1.65 to $1.75 per share range." Mr. Daniel concluded, "This continued earnings growth, combined with our new infrastructure projects already under construction and the many other attractive opportunities currently under development, will create value for customers and shareholders."

On October 31, 2006, the Enbridge Board of Directors declared quarterly dividends of $0.2875 per common share and $0.34375 per Series A Preferred Share. Both dividends are payable on December 1, 2006 to shareholders of record on November 15, 2006.

Earnings applicable to common shareholders were $444.3 million for the nine months ended September 30, 2006, or $1.31 per share, compared with $382.0 million or $1.13 per share in 2005. The $62.3 million increase in earnings was attributed to strong performances from the Enbridge crude oil mainline system and the Aux Sable natural gas fractionation facility as well as $48.9 million from the revaluation of future income tax balances due to tax rate reductions. These positive factors were partially offset by a lower contribution from the gas distribution utility, as weather in the Ontario market area was significantly warmer than normal.

Earnings applicable to common shareholders were $95.5 million for the three months ended September 30, 2006, or $0.28 per share, compared with $67.8 million, or $0.20 per share in 2005. The Aux Sable natural gas fractionation facility and Enbridge Energy Partners contributed to the $27.7 million increase in earnings. In contrast, two severe hurricanes in 2005 weakened the earnings contribution from the natural gas gathering and transmission assets in the Gulf of Mexico in the prior year.



Consolidated Earnings
Three months ended Nine months ended
(millions of Canadian dollars) September 30, September 30,
---------------------------------------------------------------------------
2006 2005 2006 2005
---------------------------------------------------------------------------

Liquids Pipelines 68.1 61.6 203.0 168.2
Gas Pipelines 15.1 9.9 47.0 46.9
Sponsored Investments 21.9 11.4 65.3 44.3
Gas Distribution and Services (11.4) (20.8) 108.6 109.9
International 21.1 21.0 64.2 59.6
Corporate (19.3) (15.3) (43.8) (46.9)
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95.5 67.8 444.3 382.0
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Significant operating factors affecting consolidated earnings in 2006 included the following:

- Enbridge crude oil mainline system earnings were higher primarily due to lower oil loss costs, higher earnings from Terrace and the Incentive Tolling Settlement (ITS).

- Enbridge Energy Partners earnings have increased significantly with higher crude oil throughput, strong margins and increased volumes in the natural gas gathering and processing businesses.

- Aux Sable has experienced strong natural gas processing margins throughout the year and earnings under the upside sharing agreement were recorded in the third quarter.

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 with a similar measure presented by other issuers. Management believes that the presentation of adjusted operating earnings provides useful information to investors and shareholders as it provides increased predictive value and performance trends.




(millions of Canadian dollars, Three months ended Nine months ended
except per share amounts) September 30, September 30,
---------------------------------------------------------------------------
2006 2005 2006 2005
---------------------------------------------------------------------------

GAAP earnings as reported 95.5 67.8 444.3 382.0
Non-operating factors and variances
as per table below (3.2) 6.1 (23.8) (7.5)
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Adjusted Operating Earnings 92.3 73.9 420.5 374.5
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Adjusted Operating Earnings per
Common Share 0.27 0.22 1.24 1.11
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---------------------------------------------------------------------------


Significant after-tax non-operating factors and variances affecting consolidated earnings were as follows:



---------------------------------------------------------------------------
Three months ended Nine months ended
(millions of Canadian dollars) September 30, September 30,
---------------------------------------------------------------------------
2006 2005 2006 2005
---------------------------------------------------------------------------
Sponsored Investments
Dilution gain on EEP unit issuance - - - 4.6
EEP non-cash derivative fair value
gains/(losses) 2.7 (5.9) 5.1 (5.9)
Revalue future income taxes due to
tax rate changes - - 6.0 -
Gas Distribution and Services
Colder/(warmer) than normal weather
affecting EGD 0.5 (0.2) (30.2) 1.5
Dilution gain in Noverco (Gaz Metro
unit issuance) - - - 7.3
Revalue future income taxes due to
tax rate changes - - 28.9 -
Corporate
Revalue future income taxes due to
tax rate changes - - 14.0 -
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Total significant after-tax
non-operating factors and variances
increasing/(decreasing) earnings 3.2 (6.1) 23.8 7.5
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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 derivative contracts to economically hedge a significant portion of the cash distributions from these long-term investments. However, this does not eliminate the GAAP earnings volatility caused by exchange rate differences. During nine months ended September 30, 2006, the Company received foreign currency denominated cash distributions and settled associated hedge transactions resulting in $13.8 million (2005 - $9.9 million) of incremental cash flows, which were not included in reported earnings.



Liquids Pipelines
Three months ended Nine months ended
(millions of Canadian dollars) September 30, September 30,
---------------------------------------------------------------------------
2006 2005 2006 2005
---------------------------------------------------------------------------

Enbridge System 49.0 45.4 149.9 123.8
Athabasca System 14.0 13.1 40.1 36.8
Spearhead Pipeline 0.4 (0.2) 3.1 (0.8)
Olympic Pipeline 2.2 - 4.8 -
NW System 1.5 2.0 4.1 5.7
Feeder Pipelines and Other 1.0 1.3 1.0 2.7
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68.1 61.6 203.0 168.2
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- The Enbridge System reflected higher earnings from a number of factors including lower oil losses, favourable ITS performance and, within Terrace, lower taxes, higher toll revenues and the impact of higher volumes generating surcharge revenue.

- Athabasca System earnings continued to grow as infrastructure additions contributed positively, but were partially offset by higher operating expenses.

- Spearhead Pipeline commenced commercial operations in early March, 2006. While volumes have remained strong and consistent with the prior months, third quarter earnings were negatively impacted by the timing of operating costs.

- Olympic Pipeline was acquired effective February 1, 2006 and is performing as expected.



Gas Pipelines
Three months ended Nine months ended
(millions of Canadian dollars) September 30, September 30,
---------------------------------------------------------------------------
2006 2005 2006 2005
---------------------------------------------------------------------------

Alliance Pipeline US 7.8 8.0 22.3 24.4
Vector Pipeline 2.5 3.6 9.3 11.6
Enbridge Offshore Pipelines 4.8 (1.7) 15.4 10.9
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15.1 9.9 47.0 46.9
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- Alliance Pipeline US earnings were lower in 2006 primarily due to the stronger Canadian dollar.

- Vector Pipeline earnings were also impacted by the stronger Canadian dollar and higher operating costs in the second and third quarters of 2006 due to scheduled integrity inspections required by the regulator within the first six years of operation.

- Enbridge Offshore Pipelines earnings were negatively impacted by two severe hurricanes in the third quarter of the prior year. Volumes have returned to pre-hurricane levels in 2006, however, the stronger Canadian dollar, among other factors, has also reduced earnings.



Sponsored Investments
Three months ended Nine months ended
(millions of Canadian dollars) September 30, September 30,
---------------------------------------------------------------------------
2006 2005 2006 2005
---------------------------------------------------------------------------

Enbridge Income Fund (EIF) 9.8 9.1 27.8 25.8
Enbridge Energy Partners (EEP) 12.1 2.3 31.5 13.9
Dilution gains in EEP - - - 4.6
Revalue future income taxes due to
tax rate changes - - 6.0 -
---------------------------------------------------------------------------
21.9 11.4 65.3 44.3
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- EIF's contribution was comparable with the prior year and reflected modest growth at EIF.

- EEP's 2006 results improved significantly, despite the stronger Canadian dollar, and reflected considerably higher liquids throughput on the Lakehead System, higher margins and increased volumes in the natural gas gathering and processing businesses in addition to a higher Enbridge ownership interest. The nine months of 2006 also included $5.1 million (net to Enbridge) of unrealized mark-to-market gains on derivative financial instruments that do not qualify for hedge accounting treatment (gain of $2.7 million in the third quarter of 2006 and a loss of $5.9 million in the third quarter of 2005).

- EEP issued partnership units in the first quarter of 2005 and because Enbridge did not fully participate in these offerings, dilution gains resulted. While new units were issued by EEP in the third quarter of 2006, no dilution gains resulted as Enbridge participated in the offering, increasing Enbridge's ownership interest in EEP from 10.9% to 16.6%.



Gas Distribution and Services
Three months ended Nine months ended
(millions of Canadian dollars) September 30, September 30,
---------------------------------------------------------------------------
2006 2005 2006 2005
---------------------------------------------------------------------------
Enbridge Gas Distribution (EGD) (27.8) (32.9) 25.4 55.4
Noverco (3.9) 1.9 11.2 21.7
CustomerWorks/ECS 5.7 6.6 16.0 18.9
Other Gas Distribution (1.2) (1.0) 4.1 4.9
Enbridge Gas New Brunswick 2.8 1.8 7.1 3.8
Gas Services (0.9) (0.8) (1.2) (0.9)
Aux Sable 14.9 2.4 16.1 6.2
Other (1.0) 1.2 1.0 (0.1)
Revalue future income taxes due to
tax rate changes - - 28.9 -
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(11.4) (20.8) 108.6 109.9
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- EGD's distribution volumes and earnings in 2006 were impacted by warmer weather in Ontario which reduced earnings by $30.2 million, whereas weather was colder than normal and increased earnings by $1.5 million in the prior year. Weather in the third quarter did not significantly impact earnings in either year.

- EGD earnings were also reduced by a lower rate of return on common equity, partially offset by a higher rate base. These factors had a more pronounced effect in the first quarter given it is a high volume distribution period.

- EGD's earnings are also affected by variances from the forecast cost of service, including operating and maintenance costs. EGD's costs can vary from quarter to quarter due to many factors including weather, project timelines and the timing of operating and capital expenditures. This provided a slight positive earnings effect in the second and third quarters of 2006.

- Noverco earnings were lower in the third quarter as the prior year included a future income tax recovery stemming from the receipt of a significant cash dividend. In addition, the first quarter of the prior year included a $7.3 million dilution gain from a Gaz Metro LP unit issuance in which Noverco did not participate.

- Aux Sable entered into an output arrangement effective January 1, 2006, that substantially eliminates all negative earnings variability. Aux Sable now receives a fixed annual fee and upside sharing above a certain margin level measured on an annual basis. Fractionation margins have been positive throughout 2006, and in the third quarter, earnings were recorded under the upside sharing agreement that met the accounting criteria for contingent revenue recognition.



International
Three months ended Nine months ended
(millions of Canadian dollars) September 30, September 30,
---------------------------------------------------------------------------
2006 2005 2006 2005
---------------------------------------------------------------------------

CLH 14.5 14.2 42.5 39.8
OCENSA/CITCol 8.4 8.2 24.7 24.4
Other (1.8) (1.4) (3.0) (4.6)
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21.1 21.0 64.2 59.6
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---------------------------------------------------------------------------


- The Company's international investments continued to show strong performance with no significant variances to note.



Corporate
Three months ended Nine months ended
(millions of Canadian dollars) September 30, September 30,
---------------------------------------------------------------------------
2006 2005 2006 2005
---------------------------------------------------------------------------

Corporate (19.3) (15.3) (57.8) (46.9)
Revalue future income taxes due to
tax rate changes - - 14.0 -
---------------------------------------------------------------------------
(19.3) (15.3) (43.8) (46.9)
---------------------------------------------------------------------------
---------------------------------------------------------------------------


The increase in Corporate costs was primarily due to higher interest expense as a portion of the Company's floating rate debt was repaid through the issuance of long-term fixed rate debt.

Conference Call

Enbridge will hold a conference call on November 1, 2006 at 9:00 a.m. Eastern time (7:00 a.m. Mountain time) to discuss the third quarter 2006 results. The call can be accessed at 1-866-825-3209 using the access code of 73025323, 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 56311641; in addition, the webcast replay and transcript will be available on the website, later in the day.

The unaudited interim consolidated financial statements and Management's Discussion and Analysis, which contain additional notes and disclosures, are available on the Enbridge website.

Enbridge Inc., a Canadian company, 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, and provides distribution services in Ontario, Quebec, New Brunswick and New York State. Enbridge employs approximately 4,600 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. Except to the extent required by applicable securities laws and regulations, 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.



ENBRIDGE INC.
HIGHLIGHTS
---------------------------------------------------------------------------
(unaudited; millions of Canadian Three months ended Nine months ended
dollars, except per share amounts) September 30, September 30,
---------------------------------------------------------------------------
2006 2005 2006 2005
---------------------------------------------------------------------------
Earnings Applicable to Common
Shareholders
Liquids Pipelines 68.1 61.6 203.0 168.2
Gas Pipelines 15.1 9.9 47.0 46.9
Sponsored Investments 21.9 11.4 65.3 44.3
Gas Distribution and Services (11.4) (20.8) 108.6 109.9
International 21.1 21.0 64.2 59.6
Corporate (19.3) (15.3) (43.8) (46.9)
---------------------------------------------------------------------------
95.5 67.8 444.3 382.0
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Cash Flow Data

Cash provided by operating
activities before changes in
operating assets and liabilities 224.8 251.3 802.3 916.1
Cash provided by operating
activities (39.4) (98.9) 1,152.3 922.3
Expenditures on property, plant
and equipment 269.8 141.5 662.4 341.0
Acquisitions and long-term
investments 291.9 28.6 448.2 148.5
Common share dividends 100.6 86.9 302.0 260.7
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Per Share Information

Earnings per Common Share 0.28 0.20 1.31 1.13
Diluted Earnings per Common Share 0.28 0.20 1.30 1.12
Dividends per Common Share 0.2875 0.2500 0.8625 0.7500
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Shares Outstanding (millions)

Weighted Average Common Shares
Outstanding 339.6 337.2
Diluted Weighted Average Common
Shares Outstanding 342.9 340.7
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Operating

Liquids Pipelines(1)
Deliveries (thousands of barrels
per day) 2,155 1,908 2,121 1,979
Barrel miles (billions) 194 168 579 513
Average haul (miles) 981 959 1,000 949
Gas Pipelines - Average Daily
Throughput Volume (millions of
cubic feet per day)
Alliance Pipeline US 1,513 1,556 1,595 1,600
Vector Pipeline 879 982 1,014 1,018
Enbridge Offshore Pipelines 2,265 1,809 2,190 2,285
Gas Distribution and Services(2)
Volumes (billion cubic feet) 45 45 285 309
Number of active customers
(thousands) 1,829 1,782 1,829 1,782
Degree day deficiency(3)
Actual 85 23 2,190 2,476
Forecast based on normal
weather 58 60 2,498 2,500
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(1) Liquids Pipelines operating highlights include the statistics of the
16.6% owned Lakehead System and other wholly-owned liquid pipeline
operations, excluding Spearhead Pipeline and Olympic Pipeline.
(2) Gas Distribution and Services volumes and the number of active
customers are derived from the aggregate system supply and direct
purchase gas supply arrangements.
(3) Degree-day deficiency is a measure of coldness which is indicative of
volumetric requirements of natural gas utilized for heating purposes.
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 Greater Toronto Area.


ENBRIDGE INC.
CONSOLIDATED STATEMENTS OF EARNINGS
---------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
---------------------------------------------------------------------------
(unaudited; millions of Canadian
dollars, except per share amounts) 2006 2005 2006 2005
---------------------------------------------------------------------------

Revenues
Commodity sales 1,645.0 1,142.1 6,141.5 4,108.0
Transportation 453.5 430.7 1,515.7 1,439.3
Energy services 86.4 84.3 201.6 238.0
---------------------------------------------------------------------------
2,184.9 1,657.1 7,858.8 5,785.3
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Expenses
Commodity costs 1,562.4 1,076.9 5,850.0 3,789.9
Operating and administrative 256.6 267.4 759.9 782.0
Depreciation and amortization 145.4 141.2 437.6 427.5
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1,964.4 1,485.5 7,047.5 4,999.4
---------------------------------------------------------------------------
220.5 171.6 811.3 785.9

Income from Equity Investments 35.9 3.8 134.0 72.6
Other Investment Income 19.8 17.3 36.8 71.3
Interest Expense (142.2) (133.0) (417.3) (402.4)
---------------------------------------------------------------------------
134.0 59.7 564.8 527.4
Income Taxes (36.8) 9.8 (115.4) (140.3)
---------------------------------------------------------------------------
Earnings 97.2 69.5 449.4 387.1
Preferred Share Dividends (1.7) (1.7) (5.1) (5.1)
---------------------------------------------------------------------------
Earnings Applicable to Common
Shareholders 95.5 67.8 444.3 382.0
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Earnings Per Common Share 0.28 0.20 1.31 1.13
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---------------------------------------------------------------------------

Diluted Earnings Per Common Share 0.28 0.20 1.30 1.12
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---------------------------------------------------------------------------
See accompanying notes to the unaudited consolidated financial statements.


ENBRIDGE INC.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
---------------------------------------------------------------------------
Nine months ended
(unaudited; millions of Canadian dollars) September 30,
---------------------------------------------------------------------------
2006 2005
---------------------------------------------------------------------------

Retained Earnings at Beginning of Period 2,098.2 1,840.9
Earnings Applicable to Common Shareholders 444.3 382.0
Common Share Dividends (302.0) (260.7)
Dividends Paid to Reciprocal Shareholder 9.1 8.1
Dividend Reclassification Adjustment - 51.2
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Retained Earnings at End of Period 2,249.6 2,021.5
---------------------------------------------------------------------------
---------------------------------------------------------------------------
See accompanying notes to the unaudited consolidated financial statements.


ENBRIDGE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
---------------------------------------------------------------------------
(unaudited; millions of Canadian Three months ended Nine months ended
dollars) September 30, September 30,
---------------------------------------------------------------------------
2006 2005 2006 2005
---------------------------------------------------------------------------

Cash Provided By Operating
Activities
Earnings 97.2 69.5 449.4 387.1
Depreciation and amortization 145.4 141.2 437.6 427.5
Equity earnings less than/(in
excess of) cash distributions (20.2) 82.8 (63.0) 61.3
Gain on reduction of ownership
interest - - - (15.6)
Future income taxes (4.6) (44.5) (52.7) 40.5
Other 7.0 2.3 31.0 15.3
Changes in operating assets and
liabilities (264.2) (350.2) 350.0 6.2
---------------------------------------------------------------------------
(39.4) (98.9) 1,152.3 922.3
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Investing Activities
Acquisitions - (28.3) (101.4) (86.4)
Long-term investments (291.9) (0.3) (346.8) (62.1)
Additions to property, plant and
equipment (269.8) (141.5) (662.4) (341.0)
Affiliate loans - 0.5 28.0 (0.1)
Change in construction payable 0.8 (2.1) (13.5) (2.4)
---------------------------------------------------------------------------
(560.9) (171.7) (1,096.1) (492.0)
---------------------------------------------------------------------------
Financing Activities
Net change in short-term
borrowings and short-term debt 456.7 377.2 (96.5) (332.6)
Net change in non-recourse
short-term debt of joint
ventures (9.7) (6.5) (5.2) 5.4
Long-term debt issues 300.0 - 800.0 620.1
Long-term debt repayments - - (400.0) (396.9)
Non-recourse long-term debt
issued by joint ventures - - 2.8 6.8
Non-recourse long-term debt
repaid by joint ventures - (2.4) (29.7) (54.8)
Changes in non-controlling
interests (5.5) 7.4 (25.4) (4.5)
Common shares issued 10.5 7.5 49.0 46.9
Preferred share dividends (1.7) (1.7) (5.1) (5.1)
Common share dividends (100.6) (86.9) (302.0) (260.7)
---------------------------------------------------------------------------
649.7 294.6 (12.1) (375.4)
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Increase in Cash and Cash
Equivalents 49.4 24.0 44.1 54.9
Cash and Cash Equivalents at
Beginning of Period 148.6 136.4 153.9 105.5
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Cash and Cash Equivalents at End
of Period 198.0 160.4 198.0 160.4
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---------------------------------------------------------------------------
See accompanying notes to the unaudited consolidated financial statements.


ENBRIDGE INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
---------------------------------------------------------------------------
September 30, December 31,
(unaudited; millions of Canadian dollars) 2006 2005
---------------------------------------------------------------------------

Assets
Current Assets
Cash and cash equivalents 198.0 153.9
Accounts receivable and other 1,595.9 1,900.3
Inventory 910.1 1,021.4
---------------------------------------------------------------------------
2,704.0 3,075.6
Property, Plant and Equipment, net 10,723.1 10,466.6
Long-Term Investments 2,187.2 1,842.8
Receivable from Affiliate 149.4 177.0
Deferred Amounts and Other Assets 998.0 894.2
Intangible Assets 238.7 252.6
Goodwill 391.8 367.2
Future Income Taxes 197.8 134.9
---------------------------------------------------------------------------
17,590.0 17,210.9
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Liabilities and Shareholders' Equity
Current Liabilities
Short-term borrowings 642.3 1,074.8
Accounts payable and other 1,620.3 1,624.8
Interest payable 85.7 81.7
Current maturities and short-term debt 331.5 401.2
Current portion of non-recourse long-term debt 57.8 68.2
---------------------------------------------------------------------------
2,737.6 3,250.7
Long-Term Debt 7,048.8 6,279.1
Non-Recourse Long-Term Debt 1,565.9 1,619.9
Other Long-Term Liabilities 83.6 91.7
Future Income Taxes 1,023.4 1,009.0
Non-Controlling Interests 695.6 691.0
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13,154.9 12,941.4
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---------------------------------------------------------------------------
Shareholders' Equity
Share capital
Preferred shares 125.0 125.0
Common shares 2,399.7 2,343.8
Contributed surplus 14.0 10.0
Retained earnings 2,249.6 2,098.2
Foreign currency translation adjustment (217.5) (171.8)
Reciprocal shareholding (135.7) (135.7)
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4,435.1 4,269.5
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17,590.0 17,210.9
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---------------------------------------------------------------------------
See accompanying notes to the unaudited consolidated financial statements.


SEGMENTED INFORMATION
Three months ended September 30, 2006
---------------------------------------------------------------------------

Gas
(millions of Canadian Liquids Gas Sponsored Distribution
dollars) Pipelines Pipelines Investments and Services
---------------------------------------------------------------------------
Revenues 254.7 87.2 60.8 1,778.4
Commodity costs - - - (1,562.4)
Operating and
administrative (93.7) (24.6) (13.4) (113.5)
Depreciation and
amortization (35.8) (23.5) (17.5) (66.7)
---------------------------------------------------------------------------
125.2 39.1 29.9 35.8
Investment and other
income 1.6 2.3 20.2 (6.0)
Interest and preferred
share dividends (24.8) (18.0) (14.7) (48.9)
Income taxes (33.9) (8.3) (13.5) 7.7
---------------------------------------------------------------------------
Earnings applicable to
common shareholders 68.1 15.1 21.9 (11.4)
---------------------------------------------------------------------------

(millions of Canadian dollars) International Corporate Consolidated
---------------------------------------------------------------------------
Revenues 3.8 - 2,184.9
Commodity costs - - (1,562.4)
Operating and administrative (4.7) (6.7) (256.6)
Depreciation and amortization (0.3) (1.6) (145.4)
---------------------------------------------------------------------------
(1.2) (8.3) 220.5
Investment and other income 23.8 13.8 55.7
Interest and preferred share
dividends - (37.5) (143.9)
Income taxes (1.5) 12.7 (36.8)
---------------------------------------------------------------------------
Earnings applicable to common
shareholders 21.1 (19.3) 95.5
---------------------------------------------------------------------------
---------------------------------------------------------------------------


Three months ended September 30, 2005
---------------------------------------------------------------------------

Gas
(millions of Canadian Liquids Gas Sponsored Distribution
dollars) Pipelines Pipelines Investments and Services
---------------------------------------------------------------------------
Revenues 222.8 83.9 63.3 1,284.3
Commodity costs - - - (1,076.9)
Operating and
administrative (76.8) (25.7) (15.4) (139.5)
Depreciation and
amortization (37.0) (21.9) (17.8) (62.7)
---------------------------------------------------------------------------
109.0 36.3 30.1 5.2
Investment and other
income 0.8 0.3 0.4 (4.4)
Interest and preferred
share dividends (24.5) (19.9) (15.2) (44.6)
Income taxes (23.7) (6.8) (3.9) 23.0
---------------------------------------------------------------------------
Earnings applicable to
common shareholders 61.6 9.9 11.4 (20.8)
---------------------------------------------------------------------------

(millions of Canadian dollars) International Corporate Consolidated
---------------------------------------------------------------------------
Revenues 2.8 - 1,657.1
Commodity costs - - (1,076.9)
Operating and administrative (3.6) (6.4) (267.4)
Depreciation and amortization (0.2) (1.6) (141.2)
---------------------------------------------------------------------------
(1.0) (8.0) 171.6
Investment and other income 23.3 0.7 21.1
Interest and preferred share
dividends - (30.5) (134.7)
Income taxes (1.3) 22.5 9.8
---------------------------------------------------------------------------
Earnings applicable to common
shareholders 21.0 (15.3) 67.8
---------------------------------------------------------------------------
---------------------------------------------------------------------------


Nine months ended September 30, 2006
---------------------------------------------------------------------------

Gas
(millions of Canadian Liquids Gas Sponsored Distribution
dollars) Pipelines Pipelines Investments and Services
---------------------------------------------------------------------------
Revenues 748.6 260.3 186.2 6,654.6
Commodity costs - - - (5,850.0)
Operating and
administrative (263.7) (71.7) (46.3) (352.4)
Depreciation and
amortization (114.5) (65.9) (53.5) (198.8)
---------------------------------------------------------------------------
370.4 122.7 86.4 253.4
Investment and other
income 1.6 8.3 46.1 19.7
Interest and preferred
share dividends (75.6) (55.3) (44.7) (143.7)
Income taxes (93.4) (28.7) (22.5) (20.8)
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Earnings applicable to
common shareholders 203.0 47.0 65.3 108.6
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(millions of Canadian dollars) International Corporate Consolidated
---------------------------------------------------------------------------
Revenues 9.1 - 7,858.8
Commodity costs - - (5,850.0)
Operating and administrative (12.5) (13.3) (759.9)
Depreciation and amortization (0.7) (4.2) (437.6)
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(4.1) (17.5) 811.3
Investment and other income 75.9 19.2 170.8
Interest and preferred share
dividends - (103.1) (422.4)
Income taxes (7.6) 57.6 (115.4)
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Earnings applicable to common
shareholders 64.2 (43.8) 444.3
---------------------------------------------------------------------------
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Nine months ended September 30, 2005
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Gas
(millions of Canadian Liquids Gas Sponsored Distribution
dollars) Pipelines Pipelines Investments and Services
---------------------------------------------------------------------------
Revenues 648.7 278.7 185.3 4,664.3
Commodity costs - - - (3,789.9)
Operating and
administrative (228.0) (70.0) (43.5) (413.5)
Depreciation and
amortization (110.7) (70.0) (53.2) (188.3)
---------------------------------------------------------------------------
310.0 138.7 88.6 272.6
Investment and other
income (0.4) 1.6 31.2 20.8
Interest and preferred
share dividends (73.0) (62.6) (46.5) (131.9)
Income taxes (68.4) (30.8) (29.0) (51.6)
---------------------------------------------------------------------------
Earnings applicable to
common shareholders 168.2 46.9 44.3 109.9
---------------------------------------------------------------------------
---------------------------------------------------------------------------


(millions of Canadian dollars) International Corporate Consolidated
---------------------------------------------------------------------------
Revenues 8.3 - 5,785.3
Commodity costs - - (3,789.9)
Operating and administrative (11.7) (15.3) (782.0)
Depreciation and amortization (0.8) (4.5) (427.5)
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(4.2) (19.8) 785.9
Investment and other income 66.2 24.5 143.9
Interest and preferred share
dividends - (93.5) (407.5)
Income taxes (2.4) 41.9 (140.3)
---------------------------------------------------------------------------
Earnings applicable to common
shareholders 59.6 (46.9) 382.0
---------------------------------------------------------------------------
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