IPL Energy Earnings Growth Continues, Increased Dividend Declared.CALGARY, Alberta--(BUSINESS WIRE)--July 29, 1998--IPL Energy (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :IPPIF) (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :IPL (Initial Program Load) Same as boot. 1. IPL - Information Processing Language. 2. IPL - Internet Public Library. 3. IPL - Initial Program Load. 4. IPL - Initial Program Loader. .) (ME:IPL.) (July 29, 1998)IPL Energy Inc. today announced that its Board of Directors has declared a dividend of $0.575 per common share, payable September 1, 1998 to shareholders of record August 14, 1998. This represents an increase of $0.03 per common share, or 5.5 percent, from the prior dividend rate. "The dividend increase reflects IPL Energy's strong underlying growth in earnings, resulting from the execution of the strategic direction first outlined early last year," said Brian F. MacNeill, President & Chief Executive Officer. "This continued earnings momentum is particularly notable given the influence of this year's extraordinarily warm winter weather, a good portion of which we expect to mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. through various actions. Our focus continues to be
on delivering superior returns to shareholders through earnings growth
and a steadily increasing dividend."IPL Energy also announced earnings of $209.8 million ($2.90 per common share) for the six months ended June 30, 1998. This represents an 11 percent increase when compared with earnings of $188.7 million ($2.79 per common share) for the same period in 1997. Improved results from Energy Transportation and Corporate segments more than offset the impact of warm weather which reduced earnings from the Energy Distribution segment. FINANCIAL The Energy Transportation segment contributed $71.0 million to first half earnings, up from $57.9 million earned during the same period last year. The IPL System improved earnings through further operational and cost efficiencies achieved under incentive tolling as well as additional returns generated from system expansion and other capital programs outside of incentive tolling arrangements. In the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Lakehead Pipe Line Partners, L.P. also achieved higher throughput The speed with which a computer processes data. It is a combination of internal processing speed, peripheral speeds (I/O) and the efficiency of the operating system and other system software all working together. 1. volumes, resulting in increased equity earnings and higher incentive allocations to IPL Energy. Finally, earnings from the Colombia pipeline increased, reflecting the higher investment level in 1998. Earnings from the Energy Distribution segment totalled $141.3 million (1997 - $150.6 million) for the six months ended June 30, 1998. The segment results represent income from The Consumers' Gas Company Ltd., as well as earnings of approximately $22.9 million from the Noverco Inc. investment acquired in mid 1997. First half earnings include the results of Consumers Gas for the period October 1997 through March 1998. The gas utility contribution to IPL Energy was $121.8 million, down $28.8 million from last year, reflecting both the impact of a lower allowed rate of return on equity and warmer weather throughout the heating season. For the first six months of the year, weather, as measured in degree days, was about 11 percent warmer than in 1997 and about 15 percent warmer than normal. Growth in the core franchise area continued with 43,000 new customers being added during the first half of the year, reflecting strong economic conditions and residential fuel conversions. IPL Energy estimates that the 1998 impact of the warmer weather represents a potential reduction in earnings of approximately $40 million when compared to earnings expected under normal weather patterns. Through a variety of cost reduction initiatives, operational efficiencies and other corporate actions across the IPL Energy group of companies, management anticipates that the adverse effect of weather on 1998 earnings should be substantially mitigated mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. with many of the initiatives already reflected in the current six months results. In addition to lower corporate provisions as compared to the prior year, the Corporate segment results include one-time after tax gains of approximately $8 million relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the sale of a non-strategic real estate property and the recovery of previously expensed assets held in trust under a financing arrangement. For the three months ended June 30, 1998, the Corporation's earnings increased to $147.6 million ($2.04 per share) from $131.7 million ($1.95 per share) recorded during the same period last year. Reductions in earnings from Consumers Gas due to warm weather were more than offset by higher earnings from North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. and Colombian pipeline operations, contributions from the investment in Noverco, as well as the impact of the Corporate gains noted above. On June 30, 1998, Noverco exercised a warrant to purchase 1.5 million common shares of IPL Energy. The warrant was issued in August 1997, in connection with the acquisition by IPL Energy of a 32 percent interest in Noverco and the acquisition by Noverco of an 8 percent interest in IPL Energy. Upon settlement scheduled for November 13, 1998, IPL Energy will receive $76.5 million of proceeds while Noverco's common share interest in IPL Energy will increase to approximately 10 percent. PROJECT UPDATE ENERGY TRANSPORTATION LINE 9 FINAL CONSTRUCTION NOTICE RECEIVED IPL Energy's existing 30 inch diameter Line 9 pipeline between Sarnia and Montreal will be reversed to transport crude oil from Montreal, Quebec to refineries located in Oakville, Nanticoke and Sarnia, Ontario Sarnia is a city in Southwestern Ontario, Canada (city population 71,419, census area population 88,793, in 2006). It is the largest city on Lake Huron and is located where the three upper Great Lakes empty into the St. Clair River. . On July 16, refiners supporting the Line 9 Reversal Project issued the Final Construction Notice thereby allowing construction to commence immediately. The ultimate capacity of the 832 km line will be 240,000 barrels per day Barrels per day (abbreviated BPD, bbl/d, bpd, bd or b/d) is a measurement used to describe the amount of crude oil (measured in barrels) produced or consumed by an entity in one day. and the projected in service date for the reversed Line 9 is April 30, 1999. TERRACE EXPANSION RECEIVES NEB APPROVAL The Corporation received approval from the National Energy Board ("NEB") to proceed with Phase I of the Terrace Expansion project on June 9, 1998. Building on existing IPL and Lakehead pipeline The Lakehead Pipeline, also known as the Lakehead System, is one of the largest oil pipeline systems in the world, totaling 3,100 miles (5,000 km) in length including multiple paths. 1,880 miles (3,025 km) of the system is in the United States while the rest is in Canada. systems, Phase I will provide an initial 95,000 barrels per day capacity increase by January 1999, rising to 170,000 barrels by the end of 1999. The estimated investment for Phase I is $610 million in Canada and U.S. $138 million in the United States. Subsequent phases are projected to provide the balance of the Terrace project's incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. capacity, including a heavy crude oil Heavy crude oil or Extra Heavy oil is any type of crude oil which does not flow easily. It is a relative term, compared to light crude oil, but relates to specific technical issues of its own on production, transportation, and refining. allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of up to 520,000 barrels per day. "NEB approval represents an important milestone for one of the most significant crude oil pipeline projects in Canadian history," said Mr. MacNeill. "The Terrace Expansion project has received widespread industry support and is a vital link in future Western Canadian heavy and synthetic crude expansion programs. This project builds upon the core strengths of our existing pipeline system and strategically positions IPL Energy for future pipeline expansion opportunities. At the same time, Western Canadian producers can continue with their own expansion plans, confident in the increased access to U.S. Midwest refinery markets that the Terrace Expansion project will provide." WILD ROSE CONSTRUCTION ON SCHEDULE FOR EARLY 1999 COMPLETION TARGET Construction continued on target on the $475 million, wholly owned Wild Rose Pipe Line project with $131.6 million spent as at the reporting date. The pipeline, which is scheduled for completion in the first quarter of 1999, is designed to provide transportation capacity of 570,000 barrels per day from the Athabasca and Cold Lake, Alberta Cold Lake is a city in northeastern Alberta, Canada, named after the lake it is situated near. Cold Lake itself was formerly known as Coldwater Lake. History The Town of Cold Lake amalgamated with the nearby communities of Grand Centre and the civilian areas of CFB Cold regions, south to the Hardisty hub, where it will access the expanded IPL and Lakehead pipeline systems, further reinforcing the strategic North American market linkages IPL Energy continues to forge. A 30 year shipping agreement with Suncor Energy Inc. will provide a base return on the initial investment in the pipeline, while laying the foundation for enhanced returns as the Corporation markets the additional capacity to other transportation customers. ALLIANCE DECISION ANTICIPATED IN FALL OF 1998 The NEB reserved its decision regarding the Alliance Pipeline project on May 21, 1998 and a decision is expected this Fall. IPL Energy is a founding partner in the Alliance Pipeline project, and holds a 21 percent ownership position in the $3.6 billion natural gas pipeline project. This investment is a significant step forward in the Corporation's strategic plan to build a transcontinental transportation alternative for Western Canadian natural gas. The proposed pipeline will transport natural gas through 1,900 miles of pipeline from Fort Saint John Fort Saint John, town (1991 pop. 14,156), NE British Columbia, Canada, on the Peace River and the Alaska Highway. A North West Company post established in 1805 is still operated by the Hudson's Bay Company. The town is a supply point for nearby gas and oil fields. , British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography to U.S. Midwest markets, including Chicago. During the quarter, the project secured U.S. $2.6 billion of non-recourse debt Non-Recourse Debt A loan that is secured by some sort of collateral, usually property. The issuer can seize the collateral if the borrower defaults. Notes: These types of projects are characterized by high capital expenditures, long loan periods, and uncertain revenue financing, providing the financial resources necessary to complete construction of the pipeline, subject to regulatory approval. VECTOR CONTINUES ON SCHEDULE The IPL Energy sponsored Vector Pipeline Vector Pipeline is a natural gas pipeline which receives gas from multiple suppliers at a transportation hub in the Chicago area. The product is transported through Illinois, Indiana, and Michigan, and into Canada. project, which starts from the terminus Terminus (tûr`mĭnəs), in ancient Rome, both the boundary markers between properties and the name of the god who watched over boundaries. of the Northern Border and Alliance Pipelines, also continued on schedule. The project now expects to receive preliminary Federal Energy Regulatory Commission The Federal Energy Regulatory Commission (FERC) is the United States federal agency with jurisdiction over electricity sales, wholesale electric rates, hydroelectric licensing, natural gas pricing, and oil pipeline rates. (FERC FERC Federal Energy Regulatory Commission FERC FEMA Emergency Response Capability ) approval in the Fall of 1998. The U.S. $471 million pipeline will extend 344 miles from Chicago to Dawn, Ontario where it connects to existing and proposed pipeline systems to provide additional transportation linkages for Western Canadian natural gas producers. MILLENNIUM IN-SERVICE DATE REVISED TO NOVEMBER 1, 2000 During the quarter, the Millennium Pipeline project announced a revised in-service date of November 1, 2000. In-service was originally scheduled for November 1999. The pipeline has requested a Preliminary Determination by FERC on non-environmental aspects of the project by September 30, 1998 with final approval by April 30, 1999. Upon regulatory approval, IPL Energy has an option to acquire a 7.5 percent equity interest in the Millennium Pipeline from the Columbia Gas Transmission Columbia Gas Transmission is a natural gas pipeline that gathers gas in the Gulf of Mexico and brings it to New York. It is owned by NiSource. Its FERC code is 21.[1] External links
ENERGY DISTRIBUTION CORNWALL ELECTRIC ACQUISITION PROCEEDING The acquisition of Cornwall Electric is expected to close on July 31, 1998, having received all necessary approvals from the Ontario Municipal Board The Ontario Municipal Board (OMB) is an independent adjudicative tribunal that provides a public forum for resolving disagreements relating to community planning, governance issues and other matters in the province of Ontario, Canada, as provided for under the in late June. Cornwall Electric represents the first step in the Corporation's expansion into the Ontario municipal electricity distribution market, serving about 25,000 residential and business customers in Cornwall and surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. areas. The acquisition is the first sale of a municipally-owned electric utility in Ontario to a natural gas distribution company in the private sector, representing a key step in IPL Energy's strategy to take advantage of the trend towards convergence of gas and electricity. IPL Energy Inc. is a leader in energy delivery and services, operating the world's longest crude oil and liquids pipeline through the combined Interprovincial Pipe Line Inc. and Lakehead Pipe Line Partners, L.P. systems, and Canada's largest natural gas distribution company through The Consumers' Gas Company Ltd. which serves 1.4 million residential, commercial and industrial customers in south central and eastern Ontario Eastern Ontario is the region of the Canadian province of Ontario which lies in a wedge-shaped area between the Ottawa and St. Lawrence Rivers. It shares water boundaries with Quebec, to the north and New York State to south. Population: 1,392,346 (2001), est. , Quebec and Upper New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of State. IPL Energy's common shares trade on the Toronto and Montreal stock exchanges Montreal Stock Exchange See Bourse de Montreal, Inc. (Canadian Derivatives Exchange) in Canada under the symbol "IPL". In the United States, the shares trade on The NASDAQ National Market under "IPPIF". Lakehead's preference units trade on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under "LHP LHP Left-Handed Pitcher LHP Left Hand Path LHP Lighthouse Point (Broward County, Florida city) LHP Left Half-Plane LHP Lead Hollowpoint (bullet) LHP Living History Project LHP Landslide Hazard Program ". -0-
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IPL ENERGY INC.
HIGHLIGHTS (1)
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Three months ended Six months ended
June 30, June 30,
(unaudited; Canadian dollars 1998 1997 1998 1997
in millions, except
per share amounts)
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FINANCIAL (2)
Earnings
Energy Transportation 37.9 28.3 71.0 57.9
Energy Distribution 105.7 114.3 141.3 150.6
Corporate 4.0 (10.9) (2.5) (19.8)
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Consolidated Earnings 147.6 131.7 209.8 188.7
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Energy Transportation 133.1 125.5 259.7 251.9
Energy Distribution 761.3 859.6 1,262.8 1,353.6
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Consolidated Operating
Revenue 894.4 985.1 1,522.5 1,605.5
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Capital Expenditures 211.4 119.2 402.5 215.6
Cash from Operating
Activities 32.8 34.0 83.7 27.1
Dividends 40.5 34.9 80.9 69.7
Per Share Amounts
Earnings 2.04 1.95 2.90 2.79
Cash from operating
activities 0.46 0.51 1.16 0.40
Dividends 0.545 0.515 1.09 1.03
Weighted Average Shares
Outstanding (millions) 72.3 67.6
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OPERATING
Energy Transportation (3)
Deliveries (thousands
of barrels per day) 2,188 2,028 2,179 1,997
Barrel miles (billions) 199 183 393 372
Average haul (miles) 999 992 995 1,029
Energy Distribution
Gas distribution volumes
(billion cubic feet) 163 174 275 284
Number of active
customers (thousands) 1,405 1,350 1,405 1,350
Degree day deficiency (4)
Actual 1,616 1,919 2,922 3,270
Forecast based on
normal weather 2,027 1,968 3,435 3,316
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1. Highlights of Energy Distribution reflect the results of The Consumers' Gas Company Ltd. and other gas distribution assets on a quarter lag basis of consolidation for the three and six months ended March 31, 1998 and 1997. Gas distribution earnings for the nine months ended June 30, 1998 were $114.7 million (1997 - $158.7 million) and will be included in the September 30, 1998 consolidated IPL Energy results. 2. Due to the seasonal nature of gas distribution operations, the amounts shown for the three and six month periods are not indicative of the results for the full fiscal year. 3. Energy Transportation operating highlights include the statistics of the 16.6 percent owned portion of the mainline mainline Drug slang verb To inject a drug system located in the United States. 4. Degree day deficiency is a measure of coldness which is indicative of volumetric volumetric /vol·u·met·ric/ (vol?u-met´rik) pertaining to or accompanied by measurement in volumes. vol·u·met·ric adj. Of or relating to measurement by volume. requirements of natural gas utilized for heating purposes in all markets. It is calculated by accumulating from October 1 the total number of degrees each day by which the daily mean temperature falls below 18 degrees Celsius. The figures given are those accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. in the Toronto area.
CONTACT: IPL Energy Inc.
Byron Neiles, 403/231-5916
403/231-4844 (FAX)
byron.neiles@iplenergy.com
http://www.iplenergy.com
or
Al Monaco, 403/231-3973
403/231-4848 (FAX)
(800) 481-2804 Toll Free
al.monaco@iplenergy.com
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