2007 Fiscal Year Results Conference Call. Sophie Brochu President and CEO Pierre Despars Executive Vice President and CFO

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1 2007 Fiscal Year Results Conference Call Sophie Brochu President and CEO Pierre Despars Executive Vice President and CFO November 21, 2007

2 Forward-looking Statements To enable investors to better understand the Partnership s outlook for the future and make more informed decisions, the matters discussed herein may contain forward-looking information about Gaz Métro s objectives, strategies, financial condition, operating results and activities. Such information expresses, as of the date hereof, the estimates, forecasts, projections, expectations or opinions of the Partnership concerning future events or results. Actual results may differ materially from the results anticipated herein and, consequently, we cannot guarantee that any forward-looking statement will materialize. Forward-looking information does not take into account the impact of transactions or non-recurring matters, announced or arising after the statements have been made, might have on the Partnership s activities. Significant risks and uncertainties that could cause actual results and future events to differ materially from current expectations include, but are not limited to, factors related to the economy and markets, competition, commercial risk, regulation, gas supply, continuity of activities and the financing of investments as well as the value of such investments. Gaz Métro therefore cautions readers not to place too much reliance on forward-looking information. The Partnership does not intend, nor does it commit, to update forward-looking information even if new information becomes available as a result of future events, or for any other reason unless required to do so by securities laws. Adjusted Indicators Not Standardized in Accordance with GAAP In the view of Gaz Métro s management, certain adjusted indicators, such as adjusted net income, adjusted net income per unit and others provide readers with information they consider useful for analyzing its financial results. However, they are not standardized by generally accepted accounting principles (GAAP) and should not be considered in isolation or as substitutes for other performance measures that are in accordance with GAAP. The results obtained might not be comparable with similar indicators used by other issuers and should therefore only be considered as complementary information. 2

3 Agenda Overview of 2007 Fiscal Year & Recent Developments Review of 2007 Fiscal Year Financial Results Outlook for 2008 Fiscal Year Q&A Session 3

4 Overview of 2007 Fiscal Year & Recent Developments Sophie Brochu President and CEO 4

5 Overview of 2007 Fiscal Year & Recent Developments Adjusted net income (1) up $1.8 million over 2006 fiscal year despite lower earnings in the Transportation Sector Quarterly distributions of $0.31/unit maintained during 2007, for a total of $1.24/unit Distribution level expected to be maintained in each quarter of the 2008 fiscal year 7,183 new customers in Quebec, including 5,060 residential customers Natural gas used in 19% of new housing in Greater Montreal Area Quebec Distribution Activity (QDA): Régie de l énergie approved improved performance incentive mechanism Brings expectations of investors more in line with those of Gaz Métro s customers and of the general public in terms of energy efficiency Natural gas volumes delivered up 27.4 bcf, or 13.6% to bcf Maturation of a large new electric cogeneration customer (TransCanada Energy Ltd in Bécancour) Higher consumption in the metallurgy industry (1) Adjusted to exclude impact of the amendments to the Income Tax Act, adopted on June 22, 2007, implementing the proposals concerning income trusts and limited partnerships (flow-through entities) in the Minister of Finance s Tax Fairness Plan tabled on October 31, The amendments made it necessary to record a tax expense and a tax liability of $26.2 million. 5

6 Overview of 2007 Fiscal Year & Recent Developments 2007 Competitive Situation Competitiveness of natural gas in Quebec Market Main Competitor How Competitive? (1) Industrial Ex.: Large companies in petro-chemical, metallurgy, etc. industries #6 Fuel Oil Short term: spot price significantly lower Long-term: more expensive In all cases, more flexible and less polluting Commercial & Institutional Ex.: Hospitals, schools, restaurants, etc. Electricity Small business: 17% cheaper Large business: 43% cheaper Residential Electricity Even to 11% more expensive (1) As at October 31, Based on average prices for past 12 months 6

7 Overview of 2007 Fiscal Year & Recent Developments (cont d) Average price of natural gas of $6.31/Gj, down 19.9% from 2006 levels Quebec government s plan to reduce consumption of heavy fuel oil: favourable for natural gas Acquisition of Green Mountain Power Corporation (GMP): favourable impact on results since April 12, 2007 QDA: Achieved ROE of 9.91% in basis points (bps) more than total authorized ROE and 118 bps more than authorized base ROE 25 bps higher than ROE achieved in 2006 QDA: Régie de l énergie rendered decision on 2008 Rate Case Risk premium allowed to Partners increased by 14 bps Allowed base ROE of 9.05% plus incentive return based on anticipated productivity gains of 47 bps for a total authorized ROE of 9.52% Potential to add a further 39 bps through Global Energy Efficiency Plan performance incentive 7

8 Overview of 2007 Fiscal Year & Recent Developments (cont d) Bureau des audiences publiques sur l environnement and Quebec government give Rabaska green light Three bids submitted jointly with Boralex and Séminaire de Québec in response to Hydro-Québec Distribution s call for tenders for 2,000 MW of wind power energy Tax Fairness Plan On June 22, 2007, House of Commons adopted Bill C-52 enacting Income Tax Act amendments implementing proposals in Minister of Finance s Tax Fairness Plan tabled on October 31, 2006 with respect to flow-through entities Gaz Métro is analyzing its various alternatives Adoption of those amendments resulted in recording of non-cash expense and future tax liability of $26.2 million related to Intragaz During 2007 fiscal year, approximately 85% of Gaz Métro s pre-tax income came from entities that were not taxable at the Partnership level 8

9 Review of 2007 Fiscal Year Financial Results Pierre Despars Executive Vice President and CFO 9

10 Review of 2007 Fiscal Year Financial Results Highlights (in millions of dollars, except for per unit data, in dollars) Fiscal years ended Sept. 30 CONSOLIDATED INCOME AND CASH FLOWS $ % Revenues 1, ,003.8 (46.3) (2.3%) Gross margin % Net income (24.4) (16.6%) Adjusted net income (1) % Adjusted net income, excluding non-recurring items (2) % Cash flows from operating activities (3) % Per unit data Net income per unit $1.02 $1.25 $ (0.23) (18.4%) Adjusted net income per unit (1) $1.24 $1.25 $ (0.01) (0.8%) Adjusted net income per unit, excluding non-recurring items (2) $1.21 $1.19 $ % Distributions paid per unit $1.24 $1.33 $ (0.09) (6.8%) Weighted average number of units O/S (in millions) % Number of units O/S (in millions) % CONSOLIDATED BALANCE SHEETS Sept. 30, 2007 Sept. 30, 2006 Total assets 3, , % Total debt 1, , % Partners' equity (2.7) (0.3%) Debt/total capitalization ratio (%) 64.6% 60.6% Adjusted debt/total capitalization ratio (%) (1) 64.0% 60.6% Return on average equity (%) 12.4% 15.2% Adjusted return on average equity (%) (1) 14.9% 15.2% Change (1) Adjusted to exclude impact of the amendments to the Income Tax Act, adopted on June 22, 2007, implementing the proposals concerning income trusts and limited partnerships (flow-through entities) in the Minister of Finance s Tax Fairness Plan tabled on October 31, The amendments made it necessary to record a tax expense and a tax liability of $26.2 million. (2) Adjusted to exclude impact of non-recurring items. (3) Before change in non-cash working capital items. 10

11 Review of Fiscal 2007 Financial Results Highlights (cont d) Adjusted net income (1) of $149.0 million, up $1.8 million from 2006 Refer to Segmented Data for detailed explanations Adjusted net income per unit (1) of $1.24 down $0.01 from 2006 Average number of units outstanding up 2.9 million, or 2.5%, in 2007, following the October 2006 unit issue Adjusted net income, excluding non-recurring items, of $145.2 million, up $5.1 million or 3.6% from $140.1 million in 2006 Adjusted net income per unit, excluding non-recurring items, of $1.21, up $0.02 from $1.19 in 2006 Quarterly distribution of $0.31/unit maintained during 2007, for a total of $1.24/unit, compared to $1.33/unit in 2006 (1) Adjusted to exclude impact of the amendments to the Income Tax Act, adopted on June 22, 2007, implementing the proposals concerning income trusts and limited partnerships (flow-through entities) in the Minister of Finance s Tax Fairness Plan tabled on October 31, The amendments made it necessary to record a tax expense and a tax liability of $26.2 million. 11

12 Review of 2007 Fiscal Year Financial Results Highlights (cont d) Consolidated revenues down 2.3%, or $46.3 million, to $1,957.5 million Decrease in average selling price of natural gas Partially offset by: Consolidation of Green Mountain Power s (GMP) sales since April 12, 2007 Consolidated gross margin up 8.2%, or $47.3 million, to $623.6 million Share of GMP s gross margin included in results since April 12, 2007 Increase in gross margin generated by Quebec distribution activity 12

13 Review of 2007 Fiscal Year Financial Results Highlights (cont d) Debt/total capitalization ratio of 64.6% (64.0% on an adjusted basis (1) ) compared to 60.6% at same date in 2006 Increased leverage to finance acquisition of Green Mountain Power Negative non-cash adjustment of $27.2 million on U.S. dollar investments due to appreciation of the Canadian dollar Partially offset by: $50 million unit issue during first quarter of 2007 Adjusted return on average equity (1) of 14.9%, relatively similar to 15.2% in 2006 (1) Adjusted to exclude impact of the amendments to the Income Tax Act, adopted on June 22, 2007, implementing the proposals concerning income trusts and limited partnerships (flow-through entities) in the Minister of Finance s Tax Fairness Plan tabled on October 31, The amendments made it necessary to record a tax expense and a tax liability of $26.2 million. 13

14 Review of 2007 Fiscal Year Financial Results Highlights (cont d) (in millions of dollars) Fiscal years ended Sept. 30 Change (2007 vs 2006) CASH FLOW SUMMARY $ % Cash flows from operations (1) % Working capital items (26.1) % Cash flows from operating activities % Maintenance capital (101.4) (98.1) (82.4) (3.3) 3.4% Variations in deferred charges and credits (108.9) (37.0) (64.8) (71.9) 194.3% Distributable cash % Distributions to Partners (148.4) (156.3) (157.7) 7.9 (5.1%) Free cash flows available for development % Investments in development of activities Acquisition of subsidiary and joint ventures (224.3) 0.0 (109.6) (224.3) NA Other (net of sale of commercial activities) (22.9) (41.2) (78.9) 18.3 (44.4%) (247.2) (41.2) (188.5) (206.0) 500.0% (1) Before change in non-cash working capital items. 14

15 Review of 2007 Fiscal Year Financial Results Highlights (cont d) (in millions of dollars) CALCULATION OF MAINTENANCE CAPITAL Amortization of Property, Plant and Equipment Distribution Sector Transportation Sector Storage Sector Energy Services and Other Total Investments in Property, Plant and Equipment Distribution Sector Transportation Sector Storage Sector Energy Services and Other Total Maintenance Capital Distribution Sector Transportation Sector Storage Sector Energy Services and Other Total Maintenance Capital (calculated for each sector individually) The lesser of : Amortization of Property, Plant and Equipment and Investments in Property, Plant and Equipment 15

16 Review of 2007 Fiscal Year Financial Results Highlights (cont d) Consolidated cash flows from operations, before change in noncash working capital, up $50.3 million, to $347.6 million Greater energy consumption due to colder average temperatures Lower inventory variances in QDA Increase in distributions received from PNGTS Maintenance capital up $3.3 million New method for calculating maintenance capital Distributable cash up $11.9 million to $186.2 million Distributions to Partners down $7.9 million to $148.4 million Free cash flows available for development up $19.8 million, from $18.0 million to $37.8 million 16

17 Segmented Results Energy Distribution Sector Fiscal years ended September 30, Change In millions of dollars M$ % Energy Distribution Net income Gaz Métro - QDA % VGS and GMP % Financing costs of investments in Sector (5.0) (1.9) (3.1) 163.2% % Non-recurring revenues recorded in VGS (2.6) 2.6 Net income, excluding non-recurring items % Net income up $2.4 million, or 1.9%, to $125.5 million Net income, excluding non-recurring items, up $5.0 million, or 4.1%, to $125.5 million Increased income from Quebec Distribution Activity (QDA) Consolidation of Green Mountain Power s results since April 12, 2007 Partially offset by: Additional interest expense mainly attributable to financing of investment in Green Mountain Power 17

18 Energy Distribution Sector Quebec Distribution Activity Financial Results Net income up $3.8 million or 3.2% to $120.9 million Higher productivity gains Increased deliveries in industrial market Partially offset by: Lower authorized base ROE Overearnings of $3.2 million (1), same as in 2006 Increase in gross margin Decrease in authorized operating income as a result of lower average rate base than in 2007 rate application (1) Gaz Métro s share (25%) 18

19 Energy Distribution Sector - Quebec Distribution Activity Normalized Volumes Fiscal years ended Sept. 30 Change Bcf % (in billions of cubic feet ) Markets Industrial firm % Industrial interruptible (2.2) (7.7%) Commercial % Residential % TOTAL % Fiscal years ended Sept. 30 Change m 3 % (in millions of cubic metres) Markets Industrial firm 3,068 2, % Industrial interruptible (61) (7.7%) Commercial 1,806 1, % Residential % TOTAL 6,250 5, % Increase in industrial volume reflects start-up of TransCanada Energy s electric cogeneration plant in Bécancour and increased consumption in metallurgy sector Commercial and residential volumes almost flat compared to last year Conversion factor: 1 billion cubic feet = million cubic metres. Note: Differences are due to rounding 19

20 Energy Distribution Sector - Quebec Distribution Activity Evolution of Average Rate Base (in millions of dollars) 1,850 1,800 Lower gas inventories and investments 1,750 1,700 1,650 1,600 1,550 1,500 1,450 1, Average rate base in rate application 1,563 1,648 1,675 1,711 1,814 Average rate base 1,567 1,666 1,673 1,734 1,765 20

21 Energy Distribution Sector - Quebec Distribution Activity Return on Equity 10.00% Incentive $8.3M or 0.84% +0.25% Excess return* $3.2M or 0.34% 9.80% 9.60% 9.40% Incentive $3.6M or 0.38% +0.24% Excess return* $3.2M or 0.33% 9.20% 9.00% -0.22% 8.80% 8.60% 8.40% 8.20% 8.00% Authorized Base ROE Total Authorized ROE Achieved ROE % 9.33% 9.66% % 9.57% 9.91% (*) Excess return (or overearnings) shared 25%-75% with customers. Amount shown is Gaz Métro s share Base ROE: Return on equity authorized by the Régie de l énergie ; Total ROE: Base ROE plus Incentive Return; Achieved ROE: Actual ROE All figures are before taxes 21

22 Energy Distribution Sector In Vermont Financial Results Net income (net of financing costs) down $1.4 million to $4.6 million Non-recurring revenues of $2.6 million recorded in Vermont Gas Systems (VGS) in 2006 Warmer than normal average temperatures in 2007 resulted in lower than anticipated consumption of natural gas in residential market, which generates the highest gross margin Higher financing costs due to, among other things, the investment in GMP Partially offset by: Higher natural gas volumes in industrial market GMP s net earnings of $4.4 million since April 12, 2007 Deliveries at VGS up 7.5% Since April 12, 2007, GMP has distributed 1,009 gigawatt hours of electricity, in line with expectations 25% to residential market, 65% to commercial and industrial markets, and 10% to other electricity distributors 22

23 Energy Distribution Sector In Vermont Deliveries at VGS Fiscal years ended Sept. 30 Change Bcf % (in billions of cubic feet ) Markets Industrial % Commercial % Residential % TOTAL % Fiscal years ended Sept. 30 Change m 3 % (in millions of cubic metres) Markets Industrial % Commercial % Residential % TOTAL % Increased deliveries in all markets Conversion factor: 1 billion cubic feet = million cubic metres. Note: Differences are due to rounding 23

24 Segmented Results Transportation Sector Fiscal years ended September 30, Change In millions of dollars M$ % Transportation Net income TQM and PNGTS (7.4) (28.1%) Financing costs of investments in Sector (4.9) (4.0) (0.9) 22.5% (8.3) (37.2%) Settlement of the bankruptcy of a former customer of PNGTS (0.5) (3.5) 3.0 Net income, excluding non-recurring items (5.3) (28.2%) Net income down $8.3 million to $14.0 million Net income, excluding non-recurring items, down $5.3 million to $13.5 million Lower PNGTS earnings attributable to the loss of two large customers Lower authorized ROE for TQM (8.46% vs 8.88%) Higher financing costs related to investments in Sector Partially offset by: Part of PNGTS excess capacity sold at favourable short term rates in

25 Segmented Results Storage Sector Fiscal years ended September 30, Change In millions of dollars M$ % Storage Net income Intragaz (2.0) (24.7%) Financing costs of investments (2.9) (2.5) (0.4) 16.0% Future income taxes (1) (26.2) (26.2) (23.0) 5.6 (28.6) (510.7%) Future income taxes (1) Adjusted net income (2.4) (42.9%) Net retroactive impact of Régie's decision on rate for Pointe-du-Lac (2) Collection of receivable from sale of asset (0.8) 0.8 Favourable settlement of a dispute (1.0) 1.0 Adjusted net income, excluding non-recurring items (0.5) (13.2%) Adjusted net income down $2.4 million to $3.2 million Adjusted net income, excluding non-recurring items, down $0.5 million to $3.3 million Impact of reduction in rate for Pointe-du-Lac site Increased financing costs related to investments in Sector Partially offset by: Lower development expenses (1) Represents future income tax liability the Partnership will have to pay after October 1, 2010 and related to Intragaz, which does not qualify as a rate-regulated enterprise. (2) Net retroactive impact of reduction in rate for Pointe-de-Lac storage site following a decision by the Régie de l énergie on June 6, 2007 (retroactive to May 1, 2006) 25

26 Segmented Results Energy Services Sector Fiscal years ended September 30, Change In millions of dollars M$ % Energy Services Net income Energy, water and optics % Financing costs of investments in Sector (2.6) (2.1) (0.5) 23.8% % Recognition of one-third of the gain on the sale of 50% of units of CCUM (2.0) (2.0) Recording of tax benefit relating to prior years in MTO Telecom (1.4) (1.4) Goodwill write-off related to a subsidiary 0.8 (0.8) Net income, excluding non-recurring items % Net income up $4.3 million to $8.0 million Net income, excluding non-recurring items, up $0.1 million to $4.6 million Greater activity by certain companies in the Sector Partially offset by: Higher financing costs for investments in Sector 26

27 Segmented Results Non-Allocated Items Fiscal years ended September 30, Change In millions of dollars M$ % Non-allocated items Net income Rabaska Project (0.2) (6.6) 6.4 (97.0%) Other (1.5) (0.9) (0.6) 66.7% (1.7) (7.5) 5.8 (77.3%) Development expenditures and non-allocated net expenses of $1.7 million incurred in 2007, compared to $7.5 million in previous year Virtually no expenditures recorded in connection with the proposed Rabaska LNG terminal in 2007, compared to $6.6 million in

28 Adjusted Consolidated Net Income (Net of Financing Costs, Excluding Non-Recurring Items (1) ) Fiscal years ended September 30, Change In millions of dollars, except for per unit data, in dollars M$ % Energy Distribution Gaz Métro - QDA % VGS and GMP (1.4) (23.3%) % Non-recurring items (2.6) % Transportation (8.3) (37.2%) Non-recurring items (0.5) (3.5) (5.3) (28.2%) Storage (23.0) 5.6 (28.6) Non-recurring items 26.3 (1.8) (0.5) (13.2%) Energy Services % Non-recurring items (3.4) 0.8 (4.2) % Non-allocated items (1.7) (7.5) 5.8 (77.3%) Adjusted consolidated net income, excluding non-recurring items % Adjusted net income per unit, excluding non-recurring items $ 1.21 $ 1.19 $ % (1) Refer to segmented data for details 28

29 Outlook for 2008 Fiscal Year Sophie Brochu President and CEO 29

30 Outlook for 2008 Fiscal Year Quebec Distribution Activity - Current Competitive Situation Competitiveness of natural gas in Quebec Market Main Competitor How Competitive? (1) Industrial Ex.: Large companies in petro-chemical, metallurgy, etc. industries #6 Fuel Oil Short term: spot price significantly lower Long-term: more expensive In all cases, more flexible and less polluting Commercial & Institutional Ex.: Hospitals, schools, restaurants, etc. Electricity Small business: 19% cheaper Large business: 50% cheaper Residential Electricity 3% less expensive to 9% more expensive (1) As at October 31, Current market prices 30

31 Outlook for Fiscal Year 2008 Quebec Distribution Activity Régie de l énergie renders decision on 2008 rate application The Régie has accepted most of Gaz Métro s requests Risk premium increased by 14 bps to reflect Gaz Métro s increased business risk since 1999 Allowed base ROE of 9.05% plus incentive return based on anticipated productivity gains of 47 bps = 9.52% Potential to increase return by a further 39 bps to attain 9.91% for the 2008 fiscal year if Gaz Métro reaches targeted consumption reductions in Global Energy Efficiency Plan 31

32 Outlook for Fiscal Year 2008 Quebec Distribution Activity Return on Equity 10.00% Incentive $4.8M or 0.47% GEEP incentive $4.0M or 0.39% 9.80% 9.60% Incentive $8.3M or 0.84% Excess return* $3.2M or 0.34% 9.40% 9.20% +0.32% 9.00% 8.80% 8.60% 8.40% 8.20% 8.00% Authorized Base ROE Total Authorized ROE Total Authorized ROE (including GEEP incentive) Achieved ROE % 9.57% 9.57% 9.91% % 9.52% 9.91% (*) Excess return (or overearnings) shared 25%-75% with customers. Amount shown is Gaz Métro s share Base ROE: Return on equity authorized by the Régie de l énergie; Total ROE: Base ROE plus Incentive Return; Achieved ROE: Actual ROE GEEP : Global Energy Efficiency Plan All figures are before taxes 32

33 Outlook for 2008 Fiscal Year Impact of the Régie de l Énergie s Decision Quebec Distribution Activity s Net Income (in millions of $) Rate Base 1,813.0 Net Income: Base authorized earnings (1) 60.0 Dividends on preferred shares 7.1 Income taxes 36.2 Capital tax Performance incentive mechanism (2) 4.8 Net income before GEEP (3) performance incentive GEEP (3) performance incentive 4.0 Net income (1) Net of financial charges related to capitalized interest on transitory accounts before their integration in the rate base (2) Gaz Métro s share (50%) of productivity gains before tax (3) Global Energy Efficiency Plan Maximum per year assumed 33

34 Outlook for 2008 Fiscal Year Quebec Distribution Activity Potential Upsides: Improved competitive position in all markets Short-term sales in industrial interruptible market Risk Mitigator: Normalization of volumes neutralizes impact of warmer than normal temperatures and lower than normal wind velocities since beginning of 2008 fiscal year Potential Downsides: Portion of TransCanada Energy volumes at risk following Hydro-Quebec s request to Régie de l énergie Gaz Métro intends to file a special rate application with the Régie de l énergie to minimize potential impact Negative impact of announced lower federal income tax rate ($1.3 million on net income) 34

35 Outlook for 2008 Fiscal Year VGS and GMP Vermont Gas Systems ROE of 10.5% for 3 years (will enter into second year) Rate application to be filed to increase tariffs (to come into effect January 1, 2008) Green Mountain Power Full year impact from acquisition ROE of 10.21% versus 10.25% in 2007 (based on adjustment formula) Rate application filed to increase tariffs (to come into effect January 1, 2008) Potential investment of up to US$32 million in Velco (transmission line) 35

36 Outlook for 2008 Fiscal Year Transportation Sector TQM Soon to file with NEB for increase in ROE and equity thickness PNGTS Next rate application expected to be effective in April Meetings with existing customers got underway in October 2007 Working to secure short term sales, the impact of which will depend on market conditions 36

37 Outlook for 2008 Fiscal Year Storage Sector Reduction in rate for Pointe-du-Lac storage site following a decision by the Régie de l énergie on June 6, 2007 Neutral impact on 2008 net income versus 2007 adjusted net income, excluding non-recurring items 37

38 Outlook for 2008 Fiscal Year Energy Services Sector Recognition of one-third of the gain on the sale of 50% of units of CCUM ($2.0 million) in 2008 Increased profitability 38

39 Outlook for 2008 Fiscal Year Quarterly Distributions Distribution of $0.31/unit payable on January 3, 2008 Distribution level expected to be maintained at $0.31/unit in each quarter of the 2008 fiscal year 39

40 Conclusion 2007 fiscal year was a good one for Gaz Métro Quebec Distribution Activity: improvements on the regulatory front Diversification of energy activities Quarterly distributions per unit of $0.31 maintained during 2007, for a total of $1.24 per unit Distribution level expected to be maintained in each quarter of the 2008 fiscal year Attractive current distribution yield of over 8% Fundamentals for the 2008 fiscal year are good 40

41 Appendix 1 Deferred Charges and Credits In millions of $ Deferred Charges At the beginning (Oct 1, 2006) Normalization rate stabilization accounts Increase (decrease) in deferred charges and credits Acquisition of a subsidiary Reduction of charges related to energy costs Amortization deferred charges and credits Non-cash adjustm ents At the end (Sept. 30, 2007) Rate stabilization accounts (8.3) Development of information technology (12.2) (0.1) 52.9 Financing costs (4.3) (0.3) 9.6 Customers' share in overearnings (7.4) - (9.3) (7.1) (22.7) Grants (17.7) (0.9) Gain on transfer of investm ent (6.1) (4.1) Other (4.3) (2.7) 33.0 Sub-total (46.7) (0.9) Expenses related to the cost of energy supply (60.4) (58.0) - (0.6) (33.1) Expenses related to financial instruments (1) 74.6 Total (58.0) (46.7) (1) Net impact of variation in fair value of financial instruments related to Quebec and Vermont distribution activities 41

42 Appendix 2 Fourth Quarter 2007 Results (in millions of dollars, except for per unit data, in dollars) Fourth quarter ended Sept. 30 Change CONSOLIDATED INCOME $ % Revenues % Gross margin % Net income (54.4) (26.3) (28.1) 106.8% Adjusted net income (1) (28.2) (26.3) (1.9) 7.2% Non-recurring items: Settlement of the bankruptcy of a former customer of PNGTS (0.5) (3.5) 3.0 Favourable settlement of a dispute at Intragaz (1.0) 1.0 Goodwill write-off related to a subsidiary in Energy Services 0.8 (0.8) Adjusted net income, excluding non recurring items (2) (28.7) (30.0) 1.3 (4.3%) Per unit data Net income per unit $ (0.45) $ (0.23) $ (0.22) 95.7% Adjusted net income per unit (1) $ (0.23) $ (0.23) $ (0.00) 0.0% Adjusted net income per unit, excluding non recurring items $ (0.24) $ (0.26) $ 0.02 (6.6%) Distributions paid per unit $ 0.31 $ 0.31 $ - 0.0% Weighted average number of units O/S (in millions) % Number of units O/S (in millions) % (1) Adjusted to exclude impact of the amendments to the Income Tax Act, adopted on June 22, 2007, implementing the proposals concerning income trusts and limited partnerships (flow-through entities) in the Minister of Finance s Tax Fairness Plan tabled on October 31, The amendments made it necessary to record a tax expense and a tax liability of $26.2 million. 42