Content
CONSOLIDATED RESULTS
|
(millions of Canadian dollars except where otherwise noted) Year ended December 31, |
2007 |
2006 |
2005 |
|---|---|---|---|
Cash Provided by Operating Activities |
80.6 |
86.5 |
84.2 |
Cash Available for Distribution1 |
73.5 |
74.3 |
74.3 |
Cash Distributions Declared |
69.6 |
67.3 |
66.1 |
Cash Distributions Declared Per Unit (dollars per unit) |
|
|
|
Ordinary Units |
0.9600 |
0.9259 |
0.9100 |
Subordinated Units |
0.9600 |
0.9259 |
0.9100 |
ECT Preferred Units |
0.9600 |
0.9259 |
0.9100 |
- See "Non-GAAP Measures". Refer to page 18 for the reconciliation to Cash Provided by Operating Activities.
In 2007, Enbridge Income Fund (the Fund) continued to generate steady and predictable cash distributions while advancing opportunities within its existing businesses. During the year, progress was made on several expansion projects including the BCX receipt expansion project in Alliance Canada, the Westspur expansion on the Saskatchewan System and construction of three waste heat recovery facilities within NRGreen. These initiatives will help to support the Fund's objective of stable and sustainable cash distributions to its Unitholders.
For the year ended December 31, 2007, cash distributions declared of $69.6 million (2006 – $67.3 million) represented 94.7% (2006 – 90.6%) of cash available for distribution. As at December 31, 2007, the Fund had distributed 92.1% of cash available since inception. The Fund pays cash distributions on a monthly basis to unitholders of record on the last business day of each month with distributions payable on or about the 15th day of the month following the declaration. Since inception, the Fund has declared the following distributions to ordinary unitholders. Cash distributions of the same amount per unit were also declared on the subordinated units and the ECT preferred units.
Annual Cash Distribution per Unit1, 2
- Distributions include both a return on capital and a return of capital.
- 2003 cash distributions are annualized.
FINANCIAL PERFORMANCE1
|
(millions of Canadian dollars) Year ended December 31, |
2007 |
2006 |
|---|---|---|
Alliance Canada |
57.0 |
56.3 |
Saskatchewan System |
13.5 |
13.0 |
Green Power |
2.3 |
0.6 |
Corporate |
(58.3) |
(51.3) |
Earnings before the impact of tax changes |
14.5 |
18.6 |
Revalue future taxes due to tax rate changes |
8.5 |
16.7 |
Future taxes due to Tax Fairness Plan |
(1.9) |
- |
Earnings |
21.1 |
35.3 |
- Financial highlights have been extracted from financial statements prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP).
Earnings for the year ended December 31, 2007 decreased by $14.2 million over the prior year due in large part to the revaluation of future taxes, which were more significant in 2006 than 2007 as well as Bill C-52 described below. Earnings before the impact of tax changes were positively impacted by strong results from the Fund's operating segments. However, this increase was more than offset by increased costs in the Corporate segment due primarily to higher interest expense, ECT preferred unit distributions and incentive fees.
On June 22, 2007, the "Tax Fairness Plan" income trust taxation legislation, Bill C-52, received Royal Assent. Under the enacted legislation, a distribution tax will be imposed on Enbridge Income Fund starting in 2011. This change resulted in the recognition of future income tax liabilities and expense of $1.9 million. The impact of the Tax Fairness Plan on the Fund's reported earnings was relatively small because most of the assets are rate regulated and future taxes are expected to be included in the approved rates charged to customers in the future. However, as enacted in its present form, the Tax Fairness Plan will, all other things being equal, likely result in a reduction of cash available for distribution by the Fund commencing in 2011. The earnings impact of the legislation was partially offset by 2007 reductions in the federal corporate income tax rate in June of 0.5% and in December of 3.5% effective in 2011. The future tax rate changes substantively enacted in 2006 resulted in a 7% decline in future tax rates and had a more significant impact on earnings than the tax rate changes in 2007.