2005 Third Quarter Results Conference Call

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2005 Third Quarter Results Conference Call

• August 3, 2005
• 400 PM (ET)

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Forward-looking Statements

• To enable investors to better understand the
  Partnerships outlook for the future and make
  more informed decisions, the matters discussed
  herein may contain forward-looking information
  about Gaz Métros 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 Partnerships
  results.
• The risks and uncertainties that could cause
  actual results and future events to differ
  materially from current expectations include
  factors related to the economy and markets,
  regulation, gas supply, competition, financing
  and control of subsidiaries as well as the
  continuity of activities. Gaz Métro therefore
  cautions readers against placing too much
  reliance on these forward-looking statements.
• 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.

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Table of Contents

• 2005 Third Quarter Results - Summary
• Financial Results
• Highlights
• Third Quarter
• Nine Months
• Segmented Data
• Distribution
• Transportation and Storage
• Energy Services and Other
• Non-allocated Expenses
• Deferred Charges
• Third Quarter
• Nine Months
• Conclusion

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2005 Third Quarter Results - Summary

• Partners income down 3.4 million to 6.0
  million and income per unit down 0.03 to 0.05
  per unit
• Income from Distribution Sector down
• Income from Transportation and Storage Sector up
• Income from Energy Services and Other Sector up
• Normalized volumes down in all markets
• 2006 rate case submitted to the Régie de
  lénergie
• Distribution of 0.34 per unit on October 3, 2005

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Financial Results (in millions of , except per
unit data in )
1 Excluding change in non-cash working capital
items 2 Excluding deferred charges related to gas
cost and rate stabilization accounts, but
including commercial programs and information
system development. Note Differences are due to
rounding
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Highlights

• Third Quarter
• Revenues up 0.3, or 1.0 million, to 313.8
  million
• Gross margin down 1.5, or 1.6 million, to
  106.1 million
• Decrease in consumption in all markets combined
  with a decrease in distribution rates
• Partially offset by
• Share of revenues from ownership interest in
  Intragaz group
• Partners income down 3.4 million to 6.0
  million and income per unit down 0.03 to 0.05
  per unit
• Refer to Segmented Data for further
  explanations
• Higher number of units outstanding - 3.02 million
  unit issue (including over-allotment option) at
  23.00 per unit in January and February 2005
• Expansion and development costs (excluding
  maintenance capex) up 20.1 million
• Investment in two projects Bécancour and
  Ste-Sophie

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Highlights (contd)

• Nine Months
• Revenues up 1.9, or 29.6 million, to 1,579.0
  million
• Increase in average natural gas price
• Profit under commercial agreement (Cable VDN)
• Share of Intragaz groups revenues since January
  1, 2005
• Partially offset by
• Decrease in consumption in heating market
  combined with lower distribution rates
• Gross margin down 0.2, or 1.2 million, to
  482.4 million
• Same explanations as given for revenues except
  for the price of natural gas (gross margin not
  affected by the price of gas)
• Partners income down 7.9 million to 180.3
  million and income per unit down 0.09 to 1.55
  per unit
• Refer to Segmented Data for further
  explanations
• Expansion and development costs (excluding
  maintenance capex) up 42.0 million
• Investment in two projects Bécancour and
  Ste-Sophie

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Segmented DataDistribution Sector
(Partners income in thousands of )
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Segmented DataDistribution Sector - Normalized
Volumes
Note Differences are due to rounding Conversion
factor 1 billion cubic feet 28.328 million
cubic metres
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Segmented DataDistribution Sector

• Third Quarter
• Normalized volumes down 4.8 overall
• Lower contributions from residential and
  commercial sectors due to greater use of energy
  efficiency programs
• Lower industrial consumption in metallurgical,
  petrochemical and refinery sectors
• Nine Months
• Normalized volumes in line with last year (up in
  industrial firm down in industrial
  interruptible, commercial and residential
  sectors)
• Decrease in heating market during winter months ?
  weaker wind velocity than same period last year

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Segmented DataTransportation and Storage Sector
(Partners income in thousands of )
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Segmented DataTransportation and Storage Sector

• Third Quarter
• Income up by 10.1 for third quarter of 2005
• Contribution of Intragaz group since January 1,
  2005
• Nine Months
• Income up by 10.8 for first nine months of the
  year
• Settlement of dispute between TQM Pipeline and
  prime contractor for construction of TQMs
  Canadian line to U.S. border - Partial reversal
  of reserve
• Contribution of Intragaz group since January 1,
  2005

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Segmented DataEnergy Services and Other Sector
(Partners income in thousands of )
14
Segmented DataEnergy Services and Other

• Third Quarter
• Income up by 0.7 million compared to same
  quarter last year
• Better performance of fibre optic sector
• Nine Months
• Income up by 2.6 million for first nine months
  of the year
• Recognition of revenue under commercial agreement
  for development of Cable VDNs clientele by Gaz
  Métro

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Segmented DataNon-allocated Expenses and
Eliminations
(Partners income in thousands of )
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Segmented DataNon-allocated Expenses and
Eliminations

• Third Quarter
• Development costs for Rabaska project of 1.2
  million, 0.3 million lower than last year
• Nine Months
• Development costs of 4.2 million for Rabaska
  project, 2.3 million higher than same period
  last year

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Deferred ChargesThird Quarter 2005
In millions of
(1) Net impact of 2005 third quarter adjustment
of fair market value of financial instruments
related to Quebec distribution activity.
18
Deferred ChargesNine Months 2005
In millions of
(1) Net impact related to adjustment in nine
first months of 2005 of fair market value of
financial instruments related to distribution
activity in Quebec.
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Conclusion

• Distribution of 0.34 per unit on October 3, 2005
• Normalized volumes down in all sectors
• Larger number of customers subscribed to energy
  efficiency programs
• Effect of wind velocity on heating market during
  winter months
• 2006 rate case filed with Régie de lénergie on
  June 13, 2005. Highlights
• 0.5 increase in distribution rates and 0.6
  decrease in overall rates
• Base rate of return of 9.16 (will be updated in
  August 2005)