Stable Assets, High Yield

Article Excerpt

FORT CHICAGO ENERGY TRUST $10.82 (Toronto symbol FCE.UN; SI Rating: Extra Risk) owns 50% of the Alliance Pipeline, a 36-inch diameter natural gas pipeline. It extends 3,000 kilometres from Fort St. John in B.C. to Chicago, Illinois. Enbridge Inc. owns the other 50% interest. The other assets held by the two partners are 85.4% of the Aux Sable natural gas liquids plant. Fort Chicago also owns the 1,324-kilometre Alberta Ethane Gathering System. In the three months ended September 30, 2006, Fort Chicago’s revenues fell 38.8%, to $137.2 million from $227.8 million a year earlier. However, the lower revenue was due to a change in the method of accounting for Aux Sable’s sales. Cash flow per unit rose 36.1% in the quarter, to $0.49 from $0.36. Fort Chicago’s units yield 8.6%. U.S. dividends paid in an RRSP are not subject to withholding taxes. Outside an RRSP, you may need to submit extra paperwork at tax time, as around 40% of the monthly $0.0775…

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