TSE:FTS Outlook: Caribbean Utilities anticipates growth of energy demand to remain high at approximately 6.0 per cent over the next year. Developments currently planned for Grand Cayman support this growth outlook.  The Company’s hotel properties continued to perform well in 2001, experiencing growth in revenue per available room (“RevPar”) for the sixth consecutive year. RevPar for the Hospitality Division was $55.58 in 2001 compared to $55.27 in 2000. The contribution resulting from the 100  per cent ownership of Delta Brunswick, the expansion  of Holiday Inn St. John’s, the opening of the Four Points  by Sheraton Halifax and the improved performance from existing operations contributed to growth in earnings of  the Hospitality Division.  Earnings: Fortis Properties achieved record earnings in 2001. Earnings were $8.7 million, a $4.6 million increase over earnings of $4.1 million in 2000. On a recurring basis, earnings were $6.1 million compared to $3.0 million in 2000. The results reflect increased earnings for each of  the Company’s operating divisions and contributions  from new acquisitions.  Operating expenses in 2001 were $25.5 million compared to $20.8 million in 2000. The increase in operating expenses in the period was primarily due to the increased ownership of Delta Brunswick, a full year’s result from the expansion of Holiday Inn St. John’s and the opening  of the Four Points by Sheraton Halifax hotel. Real Estate Division : Earnings before interest, income taxes, depreciation and amortization from the Real Estate Division were $18.0 million in 2001 compared to $9.8 million in 2000. Revenue increased 64.3 per cent to $39.6 million in the period.  Outlook: Earnings are anticipated to remain strong  in 2002. In the Real Estate Division, absorption of vacant space is expected to continue to be positive in all regions, with the possible exception of the rural markets in Newfoundland and Labrador. Declining vacancy levels are expected to continue to place moderate upward pressure on rental rates and reduce expenditures on tenant inducements. No significant new construction is anticipated in these markets during the year. Results of acquisitions made in December 2000 provided the largest contribution to overall growth in the Real Estate Division. All operating regions reported growth with new acquisitions having an immediate positive impact on earnings.  Operating expenses in 2001 were $21.6 million compared to $14.3 million in 2000. The increase was primarily due to the operating costs of the new properties acquired.  In the Hospitality Division, modest growth is forecast in room rates and RevPar. Occupancy levels will remain stable while the Company absorbs the 242 additional rooms associated with the Holiday Inn St. John’s and the Four Points by Sheraton Halifax.  The vacancy rate of the Real Estate Division remained stable. The overall vacancy rate was 5.9 per cent in 2001 compared to 5.8 per cent in 2000. Exposure to lease renewals averages less than 6.5 per cent per annum over the next five years. Following the events of September 11, 2001, the global hospitality industry experienced a downturn. These events coincided with an economic slowdown that had already weakened the hospitality industry. Though the near-term environment remains difficult to predict, the hospitality industry in Atlantic Canada has not been as severely affected as other areas of North America.  Hospitality Division: Earnings before interest, income taxes, depreciation and amortization from the Hospitality Division were $8.8 million in 2001 compared to $7.1 million in 2000. Revenue increased 22.7 per cent to $34.3 million in the period.  FORTIS Inc. 2OO1 Annual Report 36