Enbridge Inc.
TSX : ENB
NYSE : ENB

Enbridge Inc.

May 02, 2007 07:00 ET

Enbridge Reports Strong Start to 2007

- First quarter earnings increased $36.1 million, or 18.9%, to $227.0 million - First quarter adjusted operating earnings increased $19.9 million, or 9.5%, to $229.4 million - Regulatory approvals were received for Southern Access Expansion and Waupisoo Pipeline - A regulatory application was filed for the Canadian portion of the Southern Lights Pipeline - Shipper commitments received for the Spearhead Pipeline Expansion

CALGARY, ALBERTA--(CCNMatthews - May 2, 2007) - Enbridge Inc. (TSX:ENB)(NYSE:ENB) - "Results for the first quarter of 2007 met our expectations and were supported by favourable contributions from all business segments. This performance leaves us well positioned to achieve our previously announced full year adjusted operating earnings target of $1.75 to $1.85 per common share," said Patrick D. Daniel, President and Chief Executive Officer. "This is an exciting time for Enbridge with development underway on our extensive slate of projects, which will significantly grow our Company in the coming years. We are advancing commercial, regulatory, engineering, right-of-way, materials procurement and construction activities across many projects."

Mr. Daniel concluded, "At the same time, we are mindful of the factors that have enabled us to become a leading energy transportation company - persistent commitment to operational excellence and customer service on our existing asset base."

On May 1, 2007, the Enbridge Board of Directors declared quarterly dividends of $0.3075 per common share and $0.34375 per Series A Preferred Share. Both dividends are payable on June 1, 2007 to shareholders of record on May 15, 2007.



Consolidated Earnings
Three months
ended
(millions of Canadian dollars) March 31,
---------------------------------------------
2007 2006
---------------------------------------------

Liquids Pipelines 68.9 66.3
Gas Pipelines 25.7 16.0
Sponsored Investments 17.8 20.2
Gas Distribution and Services 109.4 86.0
International 22.0 21.8
Corporate (16.8) (19.4)
---------------------------------------------
227.0 190.9
---------------------------------------------
---------------------------------------------


Earnings applicable to common shareholders were $227.0 million for the three months ended March 31, 2007, or $0.65 per share, compared with $190.9 million, or $0.56 per share, in 2006. The $36.1 million increase in earnings reflected a higher contribution from Enbridge Gas Distribution (EGD) as weather in its franchise area was significantly colder than the first quarter 2006. Enbridge Offshore Pipelines (EOP) earnings also increased as 2005 hurricane insurance proceeds were received.



Adjusted Operating Earnings
Three months
ended
(millions of Canadian dollars, except per share amounts) March 31,
--------------------------------------------------------------------------
2007 2006
--------------------------------------------------------------------------
GAAP earnings as reported 227.0 190.9
Significant after-tax non-operating factors and variances:
Gas Pipelines
EOP property damage insurance recovery related to 2005
hurricanes (5.3) -
Sponsored Investments
EEP non-cash derivative fair value losses/(gains) 2.0 (2.7)
Gas Distribution and Services
Warmer/(colder) than normal weather affecting EGD (1.4) 21.3
Energy Services non-cash derivative fair value
losses/(gains) 4.3 -
Aux Sable non-cash derivative fair value losses/(gains) 2.8 -
--------------------------------------------------------------------------
Adjusted Operating Earnings 229.4 209.5
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Adjusted Operating Earnings per Common Share 0.65 0.62
--------------------------------------------------------------------------
--------------------------------------------------------------------------


Adjusted operating earnings were $229.4 million, or $0.65 per share, for the three months ended March 31, 2007, compared with $209.5 million, or $0.62 per share, for the three months ended March 31, 2006. The non-cash derivative fair value gains and losses resulted from derivative instruments which are economically effective hedges but do not qualify for hedge accounting treatment.

The increase in adjusted operating earnings was largely due to:

- A full quarter of earnings contributions from Olympic and Spearhead pipelines in 2007.

- Receipt of insurance proceeds compensating EOP for lost revenues and additional costs associated with hurricanes Katrina and Rita in 2005.

- Customer growth at EGD.

- Increased asset optimization activities and higher margins at Energy Services.

The Company has foreign currency denominated earnings, primarily from U.S. based operations and investments, as well as its Euro investment in Compañia Logistica de Hidrocarburos CLH, S.A. (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 generally accepted accounting principles (GAAP) earnings volatility caused by exchange rate differences. During the three months ended March 31, 2007, the Company received foreign currency denominated cash distributions and settled associated hedge transactions resulting in $3.5 million (2006 - $3.9 million) of incremental after-tax cash flows, which were not included in reported earnings.

Non-GAAP Measures

This news release contains references to adjusted operating earnings, which represent earnings applicable to common shareholders adjusted for non-operating factors. Management believes that the presentation of adjusted operating earnings provides useful information to investors and shareholders as it provides increased predictive value. Management uses adjusted operating earnings to set targets and assess performance for the Company. Also, the Company's dividend payout target is based on adjusted operating earnings. Adjusted operating earnings is not a measure that has a standardized meaning prescribed by Canadian GAAP and is not considered a GAAP measure. Therefore, this measure may not be comparable with a similar measure presented by other issuers.



Liquids Pipelines

Three months
ended
(millions of Canadian dollars) March 31,
-------------------------------------------------------------------
2007 2006
-------------------------------------------------------------------
Enbridge System 49.1 52.0
Athabasca System 13.6 12.3
Olympic Pipeline 3.7 0.6
Spearhead Pipeline 1.3 0.3
Feeder Pipelines and Other 1.2 1.1
-------------------------------------------------------------------
68.9 66.3
-------------------------------------------------------------------
-------------------------------------------------------------------


- Enbridge System earnings were slightly lower than the prior year due to the impact of a strong labour market on compensation expense as well as increased taxes in the Terrace component.

- Olympic Pipeline was acquired on February 1, 2006. Earnings for 2007 reflected a full three months of operations as well as increased revenue due to toll increases and lower operating costs due to timing.

- Spearhead Pipeline earnings reflected a full three months of operations in 2007. The prior year included only one month of earnings as Spearhead Pipeline commenced operations in early March 2006.



Gas Pipelines

Three months
ended
(millions of Canadian dollars) March 31,
------------------------------------------------------------------------
2007 2006
------------------------------------------------------------------------
Alliance Pipeline US 7.5 7.3
Vector Pipeline 3.8 4.1
Enbridge Offshore Pipelines 14.4 4.6
------------------------------------------------------------------------
25.7 16.0
------------------------------------------------------------------------
------------------------------------------------------------------------


- EOP's 2007 earnings included $5.3 million related to insurance proceeds for the replacement of damaged infrastructure resulting from the 2005 hurricanes. EOP earnings also included insurance proceeds of $6.0 million from business interruption policies, which were not adjusted in the Company's calculation of adjusted operating earnings because the related lost earnings were reflected in prior period earnings. The final claim settlement is expected in late 2007 or early 2008.



Sponsored Investments

Three months
ended
(millions of Canadian dollars) March 31,
-------------------------------------------------------------
2007 2006
-------------------------------------------------------------
Enbridge Income Fund (EIF) 9.6 9.3
Enbridge Energy Partners (EEP) 8.2 10.9
-------------------------------------------------------------
17.8 20.2
-------------------------------------------------------------
-------------------------------------------------------------


- EEP's 2007 earnings included $2.0 million (net to Enbridge) of unrealized fair value losses on derivative financial instruments compared with unrealized fair value gains of $2.7 million in 2006.

- EEP's 2007 adjusted operating earnings of $10.2 million (2006 - $8.2 million) reflected an increased ownership interest as well as gains from gas storage and lower operating costs on the Lakehead System, which were slightly offset by lower gas processing margins and increased gas measurement losses. EEP issued Class C units on April 2, 2007, reducing Enbridge's ownership interest from 16.6% to 15.7%.



Gas Distribution and Services

Three months
ended
(millions of Canadian dollars) March 31,
-----------------------------------------------------------------
2007 2006
-----------------------------------------------------------------
Enbridge Gas Distribution 86.2 58.3
Noverco 17.0 13.9
CustomerWorks/ECS 4.0 6.6
Enbridge Gas New Brunswick 2.8 1.8
Other Gas Distribution 5.3 4.7
Energy Services (1.4) 0.4
Aux Sable (2.3) 1.0
Other (2.2) (0.7)
-----------------------------------------------------------------
109.4 86.0
-----------------------------------------------------------------
-----------------------------------------------------------------


- EGD's earnings improved from the prior year primarily due to the impact of colder weather. In 2006, weather was significantly warmer than normal, resulting in lower earnings, whereas in 2007, weather was slightly colder than normal. Earnings also increased because of customer growth and higher storage and transportation capacity transaction revenues.

- CustomerWorks/ECS earnings decreased because, pursuant to an OEB recommendation, CustomerWorks transitioned customer care services related to EGD to a third party service provider in the quarter.

- Energy Services earnings in 2007 reflected $4.3 million of unrealized fair value losses on derivative instruments. These losses were more than offset by improved earnings from Tidal Energy, which resulted from increased optimization of Enbridge assets, improved market fundamentals for crude oil and increased transportation and storage volumes. Energy Services includes Gas Services and Tidal Energy, which was previously included in Other.

- Aux Sable earnings reflected unrealized fair value losses on derivative financial instruments of $2.8 million. These financial instruments are used to mitigate the uncertainty of the Company's share of the contingent upside sharing mechanism, which allows Aux Sable to share in natural gas processing margins in excess of certain thresholds.



International

Three months
ended
(millions of Canadian dollars) March 31,
-------------------------------------------------------------------------
2007 2006
-------------------------------------------------------------------------
CLH 14.5 13.3
OCENSA/CITCol 8.3 8.2
Other (0.8) 0.3
-------------------------------------------------------------------------
22.0 21.8
-------------------------------------------------------------------------
-------------------------------------------------------------------------


- CLH earnings increased slightly due to higher transportation tariffs,
longer hauls and the impact of a stronger Euro.


Corporate

Three months
ended
(millions of Canadian dollars) March 31,
------------------------------------------------------------------------
2007 2006
------------------------------------------------------------------------
Corporate (16.8) (19.4)
------------------------------------------------------------------------


- The decrease in Corporate costs was primarily due to decreased interest expense resulting from lower levels of corporate debt which was repaid from the proceeds of the $566.4 million issuance of equity on February 2, 2007.

Conference Call

Enbridge will hold a conference call on May 2, 2007 at 9:30 a.m. Eastern time (7:30 a.m. Mountain time) to discuss the first quarter 2007 results. Analysts, members of the media and other interested parties wanting to participate should phone 1-800-591-6945 using the access code of 86318585. The call will be audio webcast live at www.enbridge.com/investor and an audio replay will be available shortly thereafter at 1-888-286-8010 using the access code 83532352. In addition, a webcast replay will be available approximately two hours after the conclusion of the event and a transcript will be posted to the website within approximately 24 hours.

The conference call will begin with a presentation by the Company's Chief Executive Officer and Chief Financial Officer followed by a question and answer period for investment analysts. A question and answer period for members of the media will immediately follow.

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 5,000 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.

In the interest of providing Enbridge shareholders and potential investors with information about the Company and its subsidiaries, including management's assessment of Enbridge's and its subsidiaries' future plans and operations, certain information provided in this News Release constitutes forward-looking statements or information (collectively, "forward-looking statements"). Forward-looking statements are typically identified by words such as "anticipate", "expect", "project", "estimate", "forecast", "plan", "intend", "target", "believe" and similar words suggesting future outcomes or statements regarding an outlook. Although Enbridge believes that these forward-looking statements are reasonable based on the information available on the date such statements are made, such statements are not guarantees of future performance and readers are cautioned against placing undue reliance on forward-looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements.

Enbridge's forward-looking statements are subject to risks and uncertainties pertaining to operating performance, regulatory parameters, weather, economic conditions, exchange rates, interest rates and commodity prices, including but not limited to those risks and uncertainties discussed in this News Release and in the Company's other filings with Canadian and United States securities regulators. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these are interdependent and Enbridge's future course of action depends on management's assessment of all information available at the relevant time. Except to the extent required by law, Enbridge assumes no obligation to publicly update or revise any forward-looking statements made in this News Release or otherwise, whether as a result of new information, future events or otherwise. All subsequent forward-looking statements, whether written or oral, attributable to Enbridge or persons acting on the Company's behalf, are expressly qualified in their entirety by these cautionary statements.



ENBRIDGE INC.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
HIGHLIGHTS
---------------------------------------------------------------------------
Three months ended
(unaudited; millions of Canadian dollars, except per March 31,
share amounts)
---------------------------------------------------------------------------
2007 2006
---------------------------------------------------------------------------
Earnings Applicable to Common Shareholders

Liquids Pipelines 68.9 66.3
Gas Pipelines 25.7 16.0
Sponsored Investments 17.8 20.2
Gas Distribution and Services 109.4 86.0
International 22.0 21.8
Corporate (16.8) (19.4)
---------------------------------------------------------------------------
227.0 190.9
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Cash Flow Data

Cash provided by operating activities before changes
in operating assets and liabilities 416.9 323.6
Cash provided by operating activities 765.9 714.5
Expenditures on property, plant and equipment 443.8 153.5
Acquisitions and long-term investments 0.6 156.1
Common share dividends 112.9 100.6
---------------------------------------------------------------------------
Per Share Information

Earnings per Common Share 0.65 0.56
Diluted Earnings per Common Share 0.64 0.56
Dividends per Common Share 0.3075 0.2875
---------------------------------------------------------------------------
Shares Outstanding

Weighted Average Common Shares Outstanding (millions) 350.7 339.0
Diluted Weighted Average Common Shares Outstanding
(millions) 354.2 342.7
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Operating

Liquids Pipelines(1)
Deliveries (thousands of barrels per day) 2,229 2,153
Barrel miles (billions) 203 198
Average haul (miles) 1,013 1,021
Gas Pipelines - Average Daily Throughput Volume
(millions of cubic feet per day)
Alliance Pipeline US 1,676 1,681
Vector Pipeline 1,007 1,153
Enbridge Offshore Pipelines 2,021 2,069
Gas Distribution and Services(2)
Volumes (billion cubic feet) 191 172
Number of active customers (thousands) 1,874 1,828
Degree day deficiency(3)
Actual 1,908 1,666
Forecast based on normal weather 1,894 1,894
---------------------------------------------------------------------------
---------------------------------------------------------------------------

1. Liquids Pipelines operating highlights include the statistics of the
16.6% owned Lakehead System and other wholly-owned liquid pipeline
operations, excluding the Spearhead Pipeline and Athabasca 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
March 31,
---------------------------------------------------------------------------
(unaudited; millions of Canadian dollars, except per
share amounts) 2007 2006
---------------------------------------------------------------------------

Revenues
Commodity sales 2,686.6 2,705.4
Transportation 602.3 583.9
Energy services 69.3 57.4
---------------------------------------------------------------------------
3,358.2 3,346.7
---------------------------------------------------------------------------
Expenses
Commodity costs 2,531.8 2,592.0
Operating and administrative 280.3 254.4
Depreciation and amortization 147.1 146.0
---------------------------------------------------------------------------
2,959.2 2,992.4
---------------------------------------------------------------------------
399.0 354.3
Income from Equity Investments 44.0 54.8
Other Investment Income 41.6 27.5
Interest Expense (140.6) (138.3)
---------------------------------------------------------------------------
344.0 298.3
Non-Controlling Interests (5.6) (13.4)
---------------------------------------------------------------------------
338.4 284.9
Income Taxes (109.7) (92.3)
---------------------------------------------------------------------------
Earnings 228.7 192.6
Preferred Share Dividends (1.7) (1.7)
---------------------------------------------------------------------------
Earnings Applicable to Common Shareholders 227.0 190.9
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Earnings Per Common Share 0.65 0.56
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Diluted Earnings Per Common Share 0.64 0.56
---------------------------------------------------------------------------
---------------------------------------------------------------------------
See accompanying notes to the unaudited consolidated financial statements.


ENBRIDGE INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
---------------------------------------------------------------------------
Three months ended
March 31,
---------------------------------------------------------------------------
(unaudited; millions of Canadian dollars) 2007 2006
---------------------------------------------------------------------------
Earnings 228.7 192.6
Other Comprehensive Income/(Loss)
Change in unrealized gains on cash flow hedges, net of
tax 9.2 -
Reclassification of realized cash flow hedges, net of
tax 7.3 -
Other comprehensive loss from equity investees (10.2) -
Non-controlling interest in other comprehensive income 5.8 -
Change in foreign currency translation adjustment (30.8) 17.4
Change in unrealized gains on net investment hedges,
net of tax 2.1 (6.3)
---------------------------------------------------------------------------
Comprehensive Income 212.1 203.7
---------------------------------------------------------------------------
---------------------------------------------------------------------------
See accompanying notes to the unaudited consolidated financial statements.


CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
---------------------------------------------------------------------------
Three months ended
March 31,
---------------------------------------------------------------------------
(unaudited; millions of Canadian dollars) 2007 2006
---------------------------------------------------------------------------
Preferred Shares 125.0 125.0
---------------------------------------------------------------------------

Common Shares
Balance at Beginning of Period 2,416.1 2,343.8
Common Shares Issued 566.4 -
Dividend Reinvestment and Share Purchase Plan 4.7 4.2
Shares Issued on Exercise of Stock Options 3.8 18.2
---------------------------------------------------------------------------
Balance at End of Period 2,991.0 2,366.2
---------------------------------------------------------------------------

Contributed Surplus
Balance at Beginning of Period 18.3 10.0
Stock-based Compensation 5.0 1.6
Option Exercises (0.3) (0.5)
---------------------------------------------------------------------------
Balance at End of Period 23.0 11.1
---------------------------------------------------------------------------

Retained Earnings
Balance at Beginning of Period 2,322.7 2,098.2
Earnings Applicable to Common Shareholders 227.0 190.9
Cumulative Impact of Change in Accounting Policy
(Note 1) (47.0) -
Common Share Dividends (112.9) (100.6)
Dividends Paid to Reciprocal Shareholder 3.4 3.1
---------------------------------------------------------------------------
Balance at End of Period 2,393.2 2,191.6
---------------------------------------------------------------------------

Accumulated Other Comprehensive Loss
Balance at Beginning of Period (135.8) (171.8)
Cumulative Impact of Change in Accounting Policy
(Note 1) 48.2 -
Other Comprehensive Income (Note 1) (16.6) 11.1
---------------------------------------------------------------------------
Balance at End of Period (104.2) (160.7)
---------------------------------------------------------------------------

Reciprocal Shareholding
Balance at Beginning of Period (135.7) (135.7)
Participation in Common Shares Issued (18.6) -
---------------------------------------------------------------------------
Balance at End of Period (154.3) (135.7)
---------------------------------------------------------------------------
Total Shareholders' Equity 5,273.7 4,397.5
---------------------------------------------------------------------------
---------------------------------------------------------------------------
See accompanying notes to the unaudited consolidated financial statements.



ENBRIDGE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
---------------------------------------------------------------------------
Three months ended
March 31,
(unaudited; millions of Canadian dollars) 2007 2006
---------------------------------------------------------------------------

Cash Provided By Operating Activities
Earnings 228.8 192.6
Depreciation and amortization 147.1 146.0
Unrealized losses on derivative instruments 7.1 -
Equity earnings in excess of cash distributions (24.7) (34.6)
Future income taxes 65.7 1.6
Other (7.1) 18.0
Changes in operating assets and liabilities 349.0 390.9
---------------------------------------------------------------------------
765.9 714.5
---------------------------------------------------------------------------
Investing Activities
Acquisitions - (101.4)
Long-term investments (0.6) (54.7)
Additions to property, plant and equipment (443.8) (153.5)
Change in construction payable (42.1) (20.9)
---------------------------------------------------------------------------
(486.5) (330.5)
---------------------------------------------------------------------------
Financing Activities
Net change in short-term borrowings and short-term debt (574.1) (767.6)
Net change in non-recourse short-term debt 3.3 -
Long-term debt issues 462.9 500.0
Long-term debt repayments (534.5) -
Non-recourse long-term debt issued 14.4 2.0
Non-recourse long-term debt repaid (0.5) (2.6)
Distributions to from non-controlling interests (5.7) (6.1)
Common share issues 567.5 20.1
Preferred share dividends (1.7) (1.7)
Common share dividends (112.9) (100.6)
---------------------------------------------------------------------------
(181.3) (356.5)
---------------------------------------------------------------------------
Increase in Cash and Cash Equivalents 98.1 27.5
Cash and Cash Equivalents at Beginning of Period 139.7 153.9
---------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period 237.8 181.4
---------------------------------------------------------------------------
---------------------------------------------------------------------------
See accompanying notes to the unaudited consolidated financial statements.



ENBRIDGE INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
---------------------------------------------------------------------------
March 31, December 31,
(unaudited; millions of Canadian dollars) 2007 2006
---------------------------------------------------------------------------

Assets
Current Assets
Cash and cash equivalents 237.8 139.7
Accounts receivable and other 2,334.1 2,045.6
Inventory 302.9 868.9
---------------------------------------------------------------------------
2,874.8 3,054.2
Property, Plant and Equipment, net 11,547.2 11,264.7
Long-Term Investments 2,226.1 2,299.4
Deferred Amounts and Other Assets 962.6 924.5
Intangible Assets 237.5 241.5
Goodwill 391.2 394.9
Future Income Taxes 160.6 200.1
---------------------------------------------------------------------------
18,400.0 18,379.3
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Liabilities and Shareholders' Equity
Current Liabilities
Short-term borrowings 236.4 807.9
Accounts payable and other 1,774.3 1,723.8
Interest payable 86.4 95.1
Current maturities and short-term debt 100.7 537.0
Current maturities of non-recourse debt 59.8 60.1
---------------------------------------------------------------------------
2,257.6 3,223.9
Long-Term Debt 7,347.7 7,054.0
Non-Recourse Long-Term Debt 1,617.4 1,622.0
Other Long-Term Liabilities 193.4 91.1
Future Income Taxes 1,031.6 1,062.5
Non-Controlling Interests 678.6 715.2
---------------------------------------------------------------------------
13,126.3 13,768.7
---------------------------------------------------------------------------
Shareholders' Equity
Share capital
Preferred shares 125.0 125.0
Common shares 2,991.0 2,416.1
Contributed surplus 23.0 18.3
Retained earnings 2,393.2 2,322.7
Accumulated other comprehensive loss (104.2) (135.8)
Reciprocal shareholding (154.3) (135.7)
---------------------------------------------------------------------------
5,273.7 4,610.6
---------------------------------------------------------------------------
18,400.0 18,379.3
---------------------------------------------------------------------------
---------------------------------------------------------------------------
See accompanying notes to the unaudited consolidated financial statements.



SEGMENTED INFORMATION

Three months ended March 31, 2007
-------------------------------------------------------------------------
(millions of Canadian Liquids Gas Sponsored
dollars) Pipelines Pipelines Investments
-------------------------------------------------------------------------
Revenues 273.7 86.6 63.6
Commodity costs - - -
Operating and administrative (101.9) (20.3) (17.4)
Depreciation and amortization (39.0) (23.0) (18.2)
-------------------------------------------------------------------------
132.8 43.3 28.0
Income from equity
investments (0.3) - 16.6
Other investment income 0.2 15.3 1.0
Interest and preferred
share dividends (25.1) (17.6) (15.2)
Non-controlling interest (0.2) - (4.0)
Income taxes (38.5) (15.3) (8.6)
-------------------------------------------------------------------------
Earnings applicable to
common shareholders 68.9 25.7 17.8
-------------------------------------------------------------------------
-------------------------------------------------------------------------


Three months ended March 31, 2007
-------------------------------------------------------------------------
Gas
(millions of Canadian Distribution
dollars) and Services International Corporate Consolidated
-------------------------------------------------------------------------
Revenues 2,931.6 2.7 - 3,358.2
Commodity costs (2,531.8) - - (2,531.8)
Operating and
administrative (134.0) (3.8) (2.9) (280.3)
Depreciation and
amortization (65.6) (0.2) (1.1) (147.1)
-------------------------------------------------------------------------
200.2 (1.3) (4.0) 399.0
Income from equity
investments 13.2 14.8 (0.3) 44.0
Other investment income 4.3 8.9 11.9 41.6
Interest and preferred
share dividends (52.8) - (31.6) (142.3)
Non-controlling interest (1.4) - - (5.6)
Income taxes (54.1) (0.4) 7.2 (109.7)
-------------------------------------------------------------------------
Earnings applicable to
common shareholders 109.4 22.0 (16.8) 227.0
-------------------------------------------------------------------------


Three months ended March 31, 2006
-------------------------------------------------------------------------
Liquids Gas Sponsored
(millions of Canadian dollars) Pipelines Pipelines Investments
-------------------------------------------------------------------------
Revenues 247.8 86.7 62.0
Commodity costs - - -
Operating and administrative (84.8) (22.4) (14.9)
Depreciation and amortization (38.6) (22.0) (18.1)
-------------------------------------------------------------------------
124.4 42.3 29.0
Income from equity investments - - 31.5
Other investment income 0.2 2.8 0.9
Interest and preferred share
dividends (23.2) (18.8) (15.0)
Non-controlling interest (0.4) - (12.1)
Income taxes (34.7) (10.3) (14.1)
-------------------------------------------------------------------------
Earnings applicable to common
shareholders 66.3 16.0 20.2
-------------------------------------------------------------------------
-------------------------------------------------------------------------


Three months ended March 31, 2006
-------------------------------------------------------------------------
Gas
(millions of Canadian Distribution
dollars) and Services International Corporate Consolidated
-------------------------------------------------------------------------
Revenues 2,947.7 2.5 - 3,346.7
Commodity costs (2,592.0) - - (2,592.0)
Operating and
administrative (125.4) (3.2) (3.7) (254.4)
Depreciation and
amortization (65.7) (0.3) (1.3) (146.0)
-------------------------------------------------------------------------
164.6 (1.0) (5.0) 354.3
Income from equity
investments 11.0 12.3 - 54.8
Other investment income 4.3 12.1 7.2 27.5
Interest and preferred share
dividends (48.7) - (34.3) (140.0)
Non-controlling interest (0.9) - - (13.4)
Income taxes (44.3) (1.6) 12.7 (92.3)
-------------------------------------------------------------------------
Earnings applicable to
shareholders 86.0 21.8 (19.4) 190.9
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Contact Information