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Sustainability of Distributions and Productive Capacity
Although the Fund intends to continue to make cash distributions from funds generated by its operating segments, the distributions are not guaranteed. The sustainability of the Fund's distributions is a function of several factors: the demand for the services provided by its businesses, maintenance of the productive capacity of its assets, and its ability to comply with covenants in its debt agreements as well as repay or refinance its debt as it comes due.
Demand for the Fund's services could be affected by a variety of factors including supply of and demand for the underlying commodities transported on the pipelines owned by the Fund and the supply of and demand for power generated by facilities within the Green Power segment. The Fund and each of its segments have implemented strategies to sustain and increase the demand for their respective services.
Each operating segment maintains its productive capacity and ensures the future sustainability of its distributions through maintenance programs which include annual maintenance expenditures as well as major maintenance capital expenditures. Maintenance expenditures are funded through cash from operations. Refer to the "Capital Expenditure" sections in this MD&A for further discussion on planned maintenance and enhancement capital activities for 2008.
The sustainability of the Fund's distributions and productive capacity is also a function of its ability to meet its debt obligations and to economically obtain financing to fund growth and operational requirements. In 2007, the Fund increased the size of its standby revolving credit facility without changes to the facility's terms and conditions, demonstrating the Fund's continued ability to debt finance.