CALGARY, ALBERTA--(CCNMatthews - Nov. 4, 2004) - Enbridge Inc. today
announced earnings applicable to common shareholders of $179.7 million
for the three months ended September 30, 2004, or $1.07 per share
compared with $90.7 million, or $0.54 per share, in 2003. The
significant increase in earnings is primarily the result of the $97.8
million gain that was recognized on the sale of Enbridge's investment in
AltaGas Income Trust.
Earnings for the nine months ended September 30, 2004 are $540.5
million, or $3.23 per share compared with $639.9 million, or $3.87 per
share, in 2003. Both periods include significant one-time gains, however
the prior period gain was larger. Additionally, there was a $45.4
million charge to earnings in 2004 related to provincial tax rate
changes. These two factors are the primary reasons for the variance from
the prior year. Positive operating factors increasing earnings in 2004
include a higher contribution from the Enbridge crude oil pipeline
system, the gas distribution utility and the Aux Sable liquids
extraction plant.
Patrick D. Daniel, President & Chief Executive Officer said, "Adjusted
operating earnings for the nine months ended September 30, 2004 are
higher by some $22 million or 5% from the prior year and clearly leave
us in a position to meet our expectations for the full year. The strong
demand for energy infrastructure and the excellent geographic
positioning of our assets should provide many attractive growth
opportunities. These opportunities, together with our strong operating
results, demonstrate our continued commitment to build shareholder
value."
On November 4, 2004, the Enbridge Board of Directors declared quarterly
dividends of $0.4575 per common share and $0.34375 per Series A
Preferred Share. Both dividends are payable on December 1, 2004 to
shareholders of record on November 15, 2004.
--------------------------------------------------------------------Consolidated Earnings-------------------------------------------------------------------- Three months ended Nine months ended(millions of Canadian dollars) September 30, September 30,-------------------------------------------------------------------- 2004 2003 2004 2003 --------------------------------------Liquids Pipelines 61.6 58.6 167.9 160.5Gas Pipelines 12.3 11.0 39.2 52.6Sponsored Investments 19.5 13.5 49.5 205.5Gas Distribution and Services 86.1 8.7 296.5 217.8International 16.1 17.9 53.6 52.1Corporate (15.9) (19.0) (66.2) (48.6) -------------------------------------- 179.7 90.7 540.5 639.9 -------------------------------------- --------------------------------------Significant non-operating factors and variances affectingconsolidated earnings are as follows: Three months ended Nine months ended(millions of Canadian dollars) September 30, September 30,-------------------------------------------------------------------- 2004 2003 2004 2003 --------------------------------------Sponsored Investments Gain on sale of assets to Enbridge Income Fund - - - 169.1 Dilution gains on the issue of EEP units 6.7 - 7.6 9.2 ----------- ---------------- 6.7 - 7.6 178.3Gas Distribution and Services Gain on sale of investment in AltaGas Income Trust 97.8 - 97.8 - Colder than normal weather 3.7 2.5 22.3 44.2 Regulatory disallowances - - (4.6) (7.1) Dilution gain in Noverco (Gaz Metro unit issuance) - - 1.1 - Dilution gain - AltaGas Income Trust - - 8.0 - Revalue future income taxes due to tax rate changes - - (45.4) (6.1) -------------------------------------- 101.5 2.5 79.2 31.0Corporate Revalue future income taxes due to tax rate changes - - - (1.0) --------------------------------------Total significant non-operating factors and variances Increasing earnings 108.2 2.5 86.8 208.3 -------------------------------------- --------------------------------------
Significant operating factors affecting earnings in 2004 include the
following:
- Enbridge crude oil pipeline system earnings are higher in 2004 as they
include incremental earnings from the Terrace Phase III expansion placed
into service on April 1, 2003.
- Enbridge Gas Distribution (EGD) results include the positive impact of
the 2004 rate increase and positive variances from the forecast cost of
service, partially offset by an accrual to share excess earnings
consistent with the 2004 rate filing. The decrease in earnings in the
third quarter includes the $25.6 million remaining reversal of unbilled
revenue, recorded in the first quarter of 2004.
- The Aux Sable liquids extraction plant continues to show an
improvement over the prior year including a strong third quarter with
positive fractionation margins.
- Contributing to lower earnings in 2004 is the absence of earnings from
Alliance Pipeline (Canada) and Enbridge Saskatchewan, partially offset
with earnings from Enbridge Income Fund (EIF), formed with the
acquisition of these assets on June 30, 2003.
- Corporate costs were higher in 2004 due to increased business
development activity, stock-based compensation expense, and a higher
effective tax rate.
Non-GAAP Measures
This news release contains a reference to adjusted operating earnings,
which represent earnings applicable to common shareholders adjusted for
non-operating factors, as detailed in the above table. This is not a
measure that has a standardized meaning prescribed by Canadian general
accepted 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 increased predictive value and
allows them to more accurately identify the trend in earnings.
--------------------------------------------------------------------Liquids Pipelines-------------------------------------------------------------------- Three months ended Nine months ended(millions of Canadian dollars) September 30, September 30,-------------------------------------------------------------------- 2004 2003 2004 2003 --------------------------------------Enbridge System 47.9 43.2 130.6 113.5Athabasca System 11.6 12.1 32.6 35.2NW System 1.8 2.1 5.7 6.2Saskatchewan System - - - 3.1Feeder Pipelines and Other 0.3 1.2 (1.0) 2.5 -------------------------------------- 61.6 58.6 167.9 160.5 -------------------------------------- --------------------------------------
- Enbridge System earnings are higher as they include incremental
earnings from the Terrace Phase III expansion placed into service on
April 1, 2003, and the third quarter increase reflects timing of
operating and maintenance expenses, as well as the increase in
Enbridge's share of the Terrace surcharge.
- The Athabasca System includes the earnings contribution from the
Hardisty storage caverns completed in the fourth quarter of 2003. This
is more than offset by higher tax expense as the prior year included the
utilization of loss carryforwards.
- The Saskatchewan System is included in the results of EIF, a component
of the Sponsored Investments segment, effective June 30, 2003.
- The earnings variance in Feeder Pipelines and Other is the result of
higher costs than provided for in 2003 associated with the settlement of
Federal Energy Regulatory Commission reparations on the Frontier
Pipeline, recorded in the first quarter of 2004, as well as higher
Liquids Pipelines' business development costs primarily in the third
quarter of 2004.
--------------------------------------------------------------------Gas Pipelines-------------------------------------------------------------------- Three months ended Nine months ended(millions of Canadian dollars) September 30, September 30,-------------------------------------------------------------------- 2004 2003 2004 2003 --------------------------------------Alliance Pipeline (US) 8.8 9.3 27.5 27.0Alliance Pipeline (Canada) - - - 19.6Vector Pipeline 3.5 1.7 11.7 6.0 -------------------------------------- 12.3 11.0 39.2 52.6 -------------------------------------- --------------------------------------
- Alliance Pipeline (US) earnings reflect the additional ownership
interests of 1.1% in March 2003, 10.7% in April 2003 and 1.1% in October
2003, partially offset by the impact of the stronger Canadian dollar in
2004. The third quarter variance is primarily the result of the foreign
currency fluctuations.
- Alliance Pipeline (Canada) is included in the results of EIF, a
component of the Sponsored Investments segment, effective June 30, 2003.
- Vector Pipeline earnings reflect increased firm transportation
commitments and corresponding higher rates as a result of increased
demand for service on the pipeline due to new interconnect facilities
and customer storage developments, as well as lower interest costs. This
is further enhanced by an additional ownership interest of 15% acquired
in the fourth quarter of 2003. U.S. earnings from Vector have also been
negatively impacted by the stronger Canadian dollar.
--------------------------------------------------------------------Sponsored Investments-------------------------------------------------------------------- Three months ended Nine months ended(millions of Canadian dollars) September 30, September 30,-------------------------------------------------------------------- 2004 2003 2004 2003 --------------------------------------Enbridge Energy Partners L.P. (EEP) 5.9 6.0 20.0 19.7Enbridge Income Fund (EIF) 6.9 7.5 21.9 7.5Gain on sale of assets to Enbridge Income Fund - - - 169.1Dilution Gains 6.7 - 7.6 9.2 -------------------------------------- 19.5 13.5 49.5 205.5 -------------------------------------- --------------------------------------
- EEP results reflect higher operating earnings partially offset by both
the stronger Canadian dollar and the lower ownership interest in 2004.
The third quarter of 2004 also includes the negative affect of a Federal
Energy Regulatory Commission decision requiring a refund to shippers on
one of EEP's regulated natural gas pipelines. The higher operating
earnings are from increased volumes on the main crude oil liquids
pipeline system, as well as increased throughput and higher processing
margins on various natural gas assets. EEP realized incremental earnings
from the acquisition of the North Texas assets, for US$250.0 million,
which closed on December 31, 2003, and the Mid-Continent assets, for
US$117.0 million, which closed on March 1, 2004.
- EIF commenced operations on June 30, 2003 with the acquisition of a
50% interest in Alliance Pipeline (Canada) and the Saskatchewan System.
Enbridge previously owned these assets directly and their results, prior
to the disposition, were separately included in the Gas Pipelines and
Liquids Pipelines segments, respectively. The Company recognized a
$169.1 million gain on the sale of assets to EIF.
- In each year, EEP issued additional common units and, as Enbridge did
not participate in these offerings, dilution gains resulted.
--------------------------------------------------------------------Gas Distribution and Services-------------------------------------------------------------------- Three months ended Nine months ended(millions of Canadian dollars) September 30, September 30,-------------------------------------------------------------------- 2004 2003 2004 2003 --------------------------------------Enbridge Gas Distribution (22.7) 2.8 121.2 171.5CustomerWorks/ECS 3.4 4.5 12.6 13.3Noverco (0.1) 0.6 28.5 22.6Other Gas Distribution Operations 1.1 0.3 8.0 7.6Enbridge Gas New Brunswick 1.1 1.3 2.8 3.4Gas Services 0.8 (0.6) (0.2) (1.2)Aux Sable 3.9 (1.6) 3.4 (8.2)AltaGas Income Trust (AltaGas) 0.8 2.4 21.1 8.6Gain on sale of investment in AltaGas Income Trust units 97.8 - 97.8 -Other - (1.0) 1.3 0.2 -------------------------------------- 86.1 8.7 296.5 217.8 -------------------------------------- --------------------------------------
- Various factors, including the weather, affected EGD's distribution
volumes and earnings in 2004. While the weather was colder than normal
in 2004 and increased earnings by $22.3 million, it was not as cold as
the prior year when weather increased earnings by $44.2 million. The
weather variance in the third quarter was not significant.
- The Ontario tax rate increase and the related revalue of future income
taxes result in a first quarter 2004 charge to earnings of $47.6 million
for EGD, whereas the second quarter of 2003 included a charge to
earnings of $3.8 million also related to tax rate changes. EGD's
earnings include a $4.6 million outsourcing disallowance in 2004,
whereas the prior year included a $7.1 million gas costs disallowance
related to a long-term transportation contract, both in the first
quarter.
- Commencing in 2004, EGD refined its process for estimating unbilled
revenue. This has no earnings effect for the nine months ended September
30, 2004 as it only reflects a timing difference of reported earnings
among quarters. The third quarter of 2004 includes the remaining
reversal of the unbilled revenue of $25.6 million, which is the primary
reason for the lower earnings. If EGD had employed the new estimation
procedures in 2003, third quarter 2003 earnings would have decreased by
$22.5 million.
- EGD's earnings were positively impacted by the 2004 rate increase, the
addition of new customers as well as other positive variances from the
forecast cost of service, partially offset by an accrual to share excess
earnings, consistent with the 2004 rate filing.
- The Noverco earnings include a $1.1 million dilution gain in the first
quarter of 2004 resulting from a Gaz Metro Limited Partnership unit
issuance that Noverco did not participate in. The Alberta tax rate
reduction in the first quarter of 2004 also increased earnings by $1.6
million, whereas the prior year reflected a tax rate increase resulting
in a $2.3 million charge to earnings in the second quarter.
- The higher earnings from Aux Sable include a strong contribution in
the third quarter of 2004 as a result of positive fractionation margins
and is a significant improvement over the prior year. Enbridge's
ownership interest in Aux Sable was also higher in 2004, as an
additional 11.8% was acquired in April 2003 resulting in the current
ownership of 42.7%. As the acquisition of the additional interest was at
a discount to the book value, depreciation expense is lower on that
additional interest.
- The earnings contribution from AltaGas reflects a number of factors
including an $8.0 million after-tax dilution gain recognized in the
second quarter of 2004 when AltaGas issued additional trust units and
Enbridge did not participate. The revalue of the future income tax
liability related to this investment, primarily as a result of the first
quarter Alberta tax rate reductions, also increased earnings. During the
third quarter of 2004 Enbridge sold its interest in AltaGas. In early
August, Enbridge reduced its ownership interest to approximately 10% and
cost accounted for this investment thereafter until the ownership
position was reduced to nil in September.
--------------------------------------------------------------------International-------------------------------------------------------------------- Three months ended Nine months ended(millions of Canadian dollars) September 30, September 30,-------------------------------------------------------------------- 2004 2003 2004 2003 --------------------------------------OCENSA/CITCol 7.9 8.1 23.8 24.0CLH 10.9 11.4 35.4 32.5Other (2.7) (1.6) (5.6) (4.4) -------------------------------------- 16.1 17.9 53.6 52.1 -------------------------------------- --------------------------------------- Operating results from CLH continue to reflect increased volumes due to greater demand for refined products throughout Spain, lower operating costs and the translation impact of the stronger Euro.- Other costs include higher business development costs primarily in the third quarter of 2004.--------------------------------------------------------------------Corporate-------------------------------------------------------------------- Three months ended Nine months ended(millions of Canadian dollars) September 30, September 30,-------------------------------------------------------------------- 2004 2003 2004 2003 --------------------------------------Corporate (15.9) (19.0) (66.2) (48.6) -------------------------------------- --------------------------------------
- Corporate costs total $66.2 million for nine months ended September
30, 2004 and $15.9 million for the three months ended September 30,
2004. Compared to the same periods in 2003, corporate costs are $17.6
million higher for the nine months ended September 30, 2004 and $3.1
million lower for the three months ended September 30, 2004. The 2004
costs include an expense for stock-based compensation, higher business
development activity, and a higher effective tax rate. The variance in
the third quarter reflects the timing of corporate activities. In 2003,
Corporate costs were offset by interest income on a loan to EEP,
primarily in the first six months of the year.
Enbridge will hold a conference call at 2:30 p.m. Mountain time (4:30
p.m. Eastern time) today to discuss the third quarter results. The call
can be accessed at 1-800-387-6216 and will be audio webcast live at
www.enbridge.com/investor. A replay will be available shortly thereafter
at 1-800-408-3053 using the access code 3106904#.
The unaudited interim consolidated financial statements and MD&A are
available on our 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
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.
ENBRIDGE INC.HIGHLIGHTS(1)--------------------------------------------------------------------(unaudited; millions of Canadian dollars except Three months ended Nine months ended per share amounts) September 30, September 30,-------------------------------------------------------------------- 2004 2003 2004 2003 --------------------------------------FINANCIAL Earnings Applicable to Common Shareholders Liquids Pipelines 61.6 58.6 167.9 160.5 Gas Pipelines 12.3 11.0 39.2 52.6 Sponsored Investments 19.5 13.5 49.5 205.5 Gas Distribution and Services 86.1 8.7 296.5 217.8 International 16.1 17.9 53.6 52.1 Corporate (15.9) (19.0) (66.2) (48.6)-------------------------------------------------------------------- 179.7 90.7 540.5 639.9---------------------------------------------------------------------------------------------------------------------------------------- Cash Provided By Operating Activities Earnings plus charges not affecting cash 195.4 209.1 817.2 832.2 Changes in operating assets and liabilities 229.8 (60.6) 513.9 (235.3)-------------------------------------------------------------------- 425.2 148.5 1,331.1 596.9---------------------------------------------------------------------------------------------------------------------------------------- Common Share Dividends 79.0 71.2 236.6 212.6---------------------------------------------------------------------------------------------------------------------------------------- Earnings per Common Share 1.07 0.54 3.23 3.87---------------------------------------------------------------------------------------------------------------------------------------- Diluted Earnings per Common Share 1.06 0.53 3.21 3.84---------------------------------------------------------------------------------------------------------------------------------------- Dividends per Common Share 0.4575 0.4150 1.3725 1.2450---------------------------------------------------------------------------------------------------------------------------------------- Weighted Average Common Shares Outstanding (millions) 167.1 165.2---------------------------------------------------------------------------------------------------------------------------------------- Diluted Weighted Average Common Shares Outstanding (millions) 168.6 166.8----------------------------------------------------------------------------------------------------------------------------------------OPERATING Liquids Pipelines(2) Deliveries (thousands of barrels per day) 2,110 1,997 2,125 1,967 Barrel miles (billions) 189 177 565 519 Average haul (miles) 975 966 971 966 Gas Distribution and Services(3) Volumes (billion cubic feet) 76 93 398 412 Number of active customers (thousands) 1,737 1,675 1,737 1,675 Degree day deficiency(4) Actual 723 801 3,733 4,007 Forecast based on normal weather 714 714 3,521 3,521--------------------------------------------------------------------1. Highlights of Gas Distribution and Services reflect the results of Enbridge Gas Distribution and other gas distribution operations on a one quarter lag basis for the three and nine months ended June 30, 2004 and 2003.2. Liquids Pipelines operating highlights include the statistics of the 11.6% 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--------------------------------------------------------------------(unaudited; millions of Canadian dollars except Three months ended Nine months ended per share amounts) September 30, September 30,-------------------------------------------------------------------- 2004 2003 2004 2003 --------------------------------------Revenues Gas sales 868.9 682.0 3,161.8 2,628.7 Transportation 396.6 329.9 1,258.0 1,209.2 Energy services 17.9 56.2 160.7 163.1-------------------------------------------------------------------- 1,283.4 1,068.1 4,580.5 4,001.0--------------------------------------------------------------------Expenses Gas costs 781.9 597.1 2,730.5 2,300.7 Operating and administrative 217.6 180.9 657.4 577.1 Depreciation 115.1 107.4 340.6 334.0-------------------------------------------------------------------- 1,114.6 885.4 3,728.5 3,211.8--------------------------------------------------------------------Operating Income 168.8 182.7 852.0 789.2Investment and Other Income 51.7 49.0 223.1 154.5Gain on Sale of Investment in AltaGas Income Trust Units 121.5 - 121.5 -Gain on Sale of Assets to Enbridge Income Fund - - - 239.9Interest Expense (109.4) (108.5) (335.8) (337.1)-------------------------------------------------------------------- 232.6 123.2 860.8 846.5Income Taxes (44.1) (24.1) (294.2) (181.4)--------------------------------------------------------------------Earnings 188.5 99.1 566.6 665.1Preferred Security Distributions (7.0) (6.7) (20.9) (20.1)Preferred Share Dividends (1.8) (1.7) (5.2) (5.1)--------------------------------------------------------------------Earnings Applicable to Common Shareholders 179.7 90.7 540.5 639.9----------------------------------------------------------------------------------------------------------------------------------------Earnings Per Common Share 1.07 0.54 3.23 3.87----------------------------------------------------------------------------------------------------------------------------------------Diluted Earnings Per Common Share 1.06 0.53 3.21 3.84----------------------------------------------------------------------------------------------------------------------------------------ENBRIDGE INC.CONSOLIDATED STATEMENTS OF RETAINED EARNINGS-------------------------------------------------------------------- Nine months ended September 30,(unaudited; millions ------------------ of Canadian dollars) 2004 2003--------------------------------------------------------------------Retained Earnings at Beginning of Period 1,511.4 1,128.1Earnings Appliable to Common Shareholders 540.5 639.9Common Share Dividends (236.6) (212.6)--------------------------------------------------------------------Retained Earnings at End of Period 1,815.3 1,555.4----------------------------------------------------------------------------------------------------------------------------------------ENBRIDGE INC.CONSOLIDATED STATEMENTS OF CASH FLOWS--------------------------------------------------------------------(unaudited; millions of Three months ended Nine months ended Canadian dollars September 30, September 30, -------------------------------------- 2004 2003 2004 2003--------------------------------------------------------------------Cash Provided by Operating Activites Earnings 188.5 99.1 566.6 665.1 Charges/(credits) not affecting cash Depreciation 115.1 107.4 340.6 334.0 Equity earnings less than/(in excess of) cash distributions 1.5 (9.6) (53.6) (42.6) Gain on assets sold to Enbridge Income Fund - - - (239.9) Gain on reduction of ownership interest (17.3) - (29.6) (19.2) Gain on sale of investment in AltaGas Income Trust units (121.5) - (121.5) - Future income taxes (7.3) 4.6 74.7 128.1 Other 36.4 7.6 40.0 6.7 Changes in operating assets and liabilities 229.8 (60.6) 513.9 (235.3)-------------------------------------------------------------------- 425.2 148.5 1,331.1 596.9--------------------------------------------------------------------Investing Activities Acquisitions - (78.3) (17.4) (78.3) Long-term investments (0.7) (2.1) (16.9) (47.8) Sale of assets to Enbridge Income Fund - - - 331.2 Additions to property, plant and equipment (97.4) (96.3) (251.6) (271.9) Proceeds on redemption of ECT preferred units - 24.9 - 24.9 Sale of investment in AltaGas Income Trust units 251.4 - 251.4 - Changes in construction payable 0.9 1.0 (2.2) (4.3) Affiliate loan - (3.7) - 430.8-------------------------------------------------------------------- 154.2 (154.5) (36.7) 384.6--------------------------------------------------------------------Financing Activities Net change in short-term borrowings and short-term debt (434.4) 28.4 (1,017.1) (437.9) Long-term debt issues - - 300.0 150.0 Long-term debt repayments - (100.0) (250.0) (325.0) Non-recourse long-term debt issued by joint ventures - - - 525.6 Non-recourse long-term debt repaid by joint ventures - (9.8) (29.5) (663.8) Non-controlling interests 1.6 (1.3) (0.3) (3.2) Common shares issued 7.4 25.5 31.7 54.5 Preferred security distributions (7.0) (6.7) (20.9) (20.1) Preferred share dividends (1.8) (1.7) (5.2) (5.1) Common share dividends (79.0) (71.2) (236.6) (212.6)-------------------------------------------------------------------- (513.2) (136.8) (1,227.9) (937.6)--------------------------------------------------------------------Increase/(Decrease) in Cash 66.2 (142.8) 66.5 43.9Cash at Beginning of Period 104.4 227.4 104.1 40.7--------------------------------------------------------------------Cash at End of Period 170.6 84.6 170.6 84.6--------------------------------------------------------------------ENBRIDGE INC.CONSOLIDATED STATEMENTS OF FINANCIAL POSITION(unaudited; millions of September 30, December 31, Canadian dollars) 2004 2003--------------------------------------------------------------------AssetsCurrent Assets Cash 170.6 104.1 Accounts receivable and other 994.7 1,138.8 Gas in storage 450.3 809.8-------------------------------------------------------------------- 1,615.6 2,052.7Property, Plant and Equipment, net 8,435.8 8,530.9Long-Term Investments 2,234.3 2,390.9Receivable from Affiliate 176.7 169.8Deferred Amounts 553.5 486.5Future Income Taxes 102.6 192.5-------------------------------------------------------------------- 13,118.5 13,823.3----------------------------------------------------------------------------------------------------------------------------------------Liabilities and Shareholders' EquityCurrent Liabilities Short-term borrowings 5.1 649.6 Accounts payable and other 921.7 894.1 Interest payable 72.8 97.0 Current maturities and short-term debt 599.7 674.9 Current portion of non-recourse long-term debt 29.6 34.2-------------------------------------------------------------------- 1,628.9 2,349.8Long-Term Debt 4,940.2 5,243.1Non-Recourse Long-Term Debt 711.5 752.4Future Income Taxes 820.4 829.0Non-Controlling Interests 530.6 523.0-------------------------------------------------------------------- 8,631.6 9,697.3--------------------------------------------------------------------Shareholders' Equity Share capital Preferred securities 531.4 532.4 Preferred shares 125.0 125.0 Common shares 2,269.7 2,238.0 Contributed surplus 4.5 1.9 Retained earnings 1,815.3 1,511.4 Foreign currency translation adjustment (123.3) (147.0) Reciprocal shareholding (135.7) (135.7)-------------------------------------------------------------------- 4,486.9 4,126.0-------------------------------------------------------------------- 13,118.5 13,823.3----------------------------------------------------------------------------------------------------------------------------------------SEGMENTED INFORMATIONThree months ended September 30, 2004--------------------------------------------------------------------(millions of GasCanadian Liquids Gas Sponsored Distributiondollars) Pipelines Pipelines Investments and Services--------------------------------------------------------------------Revenues 221.6 66.7 - 988.0Gas costs - - - (781.9)Operating and administrative (70.7) (13.5) - (114.6)Depreciation (36.0) (16.5) - (61.3)--------------------------------------------------------------------Operating income/(loss) 114.9 36.7 - 30.2Investment and other income 0.7 0.1 36.0 (1.9)Gain on sale of investment - - - 121.5Interest and preferred equity charges (25.9) (16.4) - (40.6)Income taxes (28.1) (8.1) (16.5) (23.1)--------------------------------------------------------------------Earnings/(loss) applicable to common shareholders 61.6 12.3 19.5 86.1----------------------------------------------------------------------------------------------------------------------------------------Three months ended September 30, 2004--------------------------------------------------------------------(millions of Canadian dollars) International Corporate Consolidated--------------------------------------------------------------------Revenues 7.1 - 1,283.4Gas costs - - (781.9)Operating and administrative (9.8) (9.0) (217.6)Depreciation (0.4) (0.9) (115.1)--------------------------------------------------------------------Operating income/(loss) (3.1) (9.9) 168.8Investment and other income 19.6 (2.8) 51.7Gain on sale of investment - - 121.5Interest and preferred equity charges - (35.3) (118.2)Income taxes (0.4) 32.1 (44.1)--------------------------------------------------------------------Earnings/(loss) applicable to common shareholders 16.1 (15.9) 179.7----------------------------------------------------------------------------------------------------------------------------------------Three months ended September 30, 2004--------------------------------------------------------------------(millions of GasCanadian Liquids Gas Sponsored Distributiondollars) Pipelines Pipelines Investments and Services--------------------------------------------------------------------Revenues 203.6 49.6 - 807.9Gas costs - - - (597.1)Operating and administrative (66.1) (9.4) - (94.1)Depreciation (35.0) (11.5) - (59.6)--------------------------------------------------------------------Operating income/(loss) 102.5 28.7 - 57.1Investment and other income (0.1) 2.7 21.9 0.5Interest and preferred equity charges (25.6) (13.2) - (39.2)Income taxes (18.2) (7.2) (8.4) (9.7)--------------------------------------------------------------------Earnings/(loss) applicable to common shareholders 58.6 11.0 13.5 8.7----------------------------------------------------------------------------------------------------------------------------------------Three months ended September 30, 2004--------------------------------------------------------------------(millions of Canadian dollars) International Corporate Consolidated--------------------------------------------------------------------Revenues 7.0 - 1,068.1Gas costs - - (597.1)Operating and administrative (9.2) (2.1) (180.9)Depreciation (0.5) (0.8) (107.4)--------------------------------------------------------------------Operating income/(loss) (2.7) (2.9) 182.7Investment and other income 20.6 3.4 49.0Interest and preferred equity charges (0.1) (38.8) (116.9)Income taxes 0.1 19.3 (24.1)--------------------------------------------------------------------Earnings/(loss) applicable to common shareholders 17.9 (19.0) 90.7----------------------------------------------------------------------------------------------------------------------------------------Nine months ended September 30, 2004--------------------------------------------------------------------(millions of GasCanadian Liquids Gas Sponsored Distributiondollars) Pipelines Pipelines Investments and Services--------------------------------------------------------------------Revenues 646.5 206.4 - 3,704.4Gas costs - - - (2,730.5)Operating and administrative (219.9) (41.9) - (347.4)Depreciation (107.7) (50.4) - (178.8)--------------------------------------------------------------------Operating income/(loss) 318.9 114.1 - 447.7Investment and other income 1.7 0.5 86.8 57.4Gain on sale of investment - - - 121.5Interest and preferred equity charges (76.3) (50.4) - (127.3)Income taxes (76.4) (25.0) (37.3) (202.8)--------------------------------------------------------------------Earnings/(loss) applicable to common shareholders 167.9 39.2 49.5 296.5----------------------------------------------------------------------------------------------------------------------------------------Nine months ended September 30, 2004--------------------------------------------------------------------(millions of Canadian dollars) International Corporate Consolidated--------------------------------------------------------------------Revenues 23.2 - 4,580.5Gas costs - - (2,730.5)Operating and administrative (28.5) (19.7) (657.4)Depreciation (1.3) (2.4) (340.6)--------------------------------------------------------------------Operating income/(loss) (6.6) (22.1) 852.0Investment and other income 61.9 14.8 223.1Gain on sale of investment - - 121.5Interest and preferred equity charges (0.1) (107.8) (361.9)Income taxes (1.6) 48.9 (294.2)--------------------------------------------------------------------Earnings/(loss) applicable to common shareholders 53.6 (66.2) 540.5----------------------------------------------------------------------------------------------------------------------------------------Nine months ended September 30, 2004--------------------------------------------------------------------(millions of GasCanadian Liquids Gas Sponsored Distributiondollars) Pipelines Pipelines Investments and Services--------------------------------------------------------------------Revenues 610.0 146.2 - 3,230.5Gas costs - - - (2,300.7)Operating and administrative (210.5) (26.7) - (309.6)Depreciation (111.6) (39.7) - (178.7)--------------------------------------------------------------------Operating income/(loss) 287.9 79.8 - 441.5Investment and other income 1.5 33.7 65.1 35.4Gain on sale of assets - - 239.9 -Interest and preferred equity charges (77.0) (40.6) - (121.1)Income taxes (51.9) (20.3) (99.5) (138.0)--------------------------------------------------------------------Earnings/(loss) applicable to common shareholders 160.5 52.6 205.5 217.8----------------------------------------------------------------------------------------------------------------------------------------Nine months ended September 30, 2004--------------------------------------------------------------------(millions of Canadian dollars) International Corporate Consolidated--------------------------------------------------------------------Revenues 14.3 - 4,001.0Gas costs - - (2,300.7)Operating and administrative (17.8) (12.5) (577.1)Depreciation (1.6) (2.4) (334.0)--------------------------------------------------------------------Operating income/(loss) (5.1) (14.9) 789.2Investment and other income 56.3 (37.5) 154.5Gain on sale of assets - - 239.9Interest and preferred equity charges (0.5) (123.1) (362.3)Income taxes 1.4 126.9 (181.4)--------------------------------------------------------------------Earnings/(loss) applicable to common shareholders 52.1 (48.6) 639.9----------------------------------------------------------------------------------------------------------------------------------------
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