TSE:FTS It has been a year of stellar performance for Fortis, both in  terms of financial results achieved  and strategic milestones reached.  For the second consecutive year,  Fortis has delivered record earnings  Report to Shareholders to shareholders. The Corporation’s strategy of profitable growth resulted in earnings of $53.4 million in 2001,  1.5 times the previous record earnings of $36.8 million achieved in 2000. Earnings per common share grew to $3.59, 32 per cent higher than earnings per share of $2.72 attained in 2000. Newfoundland Power achieved operating earnings  of $28.9 million in 2001, nine per cent higher than earnings of $26.5 million last year. A $40 million agreement reached with Aliant Telecom Inc. (“Aliant Telecom”) in the first quarter of 2001, to acquire the telecommunications company’s poles and related infrastructure in Newfoundland, contributed to the growth in earnings.  This acquisition represents an eight per cent increase in Newfoundland Power’s rate base and will enable the Company to achieve continuing efficiency gains and to more effectively manage its electricity distribution system.  Application of the annual automatic adjustment formula approved by the Newfoundland and Labrador Board of Commissioners of Public Utilities will reduce Newfoundland Power's midpoint for its rate of return  on rate base from 10.28 per cent to 10.06 per cent in 2002 and will result in an electricity rate decrease of approximately 0.6 per cent. The formula is tied to a ten-day average of actual yields for long-term Government of Canada bonds in October and November. In 2001, Newfoundland Power reached a record  90 per cent customer satisfaction rating while realizing its lowest operating cost per customer in a decade. The Company attained significant customer service efficiencies and received national recognition for its customer care solutions, reflecting its focus on employee development and leveraging technology. Newfoundland Power also received a provincial award in recognition of its demonstrated commitment to environmental awareness and protection in conducting business. Maritime Electric, including the operations of FortisUS Energy, realized operating earnings of $6.1 million in 2001 compared to a loss of $0.2 million in 2000. The growth in earnings was primarily attributable to the enactment of regulations by the Government of Prince Edward Island in October 2001, enabling adjustments to basic electricity rates in Prince Edward Island. Under the legislation, which has application as of January 1, 2001, Maritime Electric’s base rates will continue to be limited to 110 per cent of the rates charged by New Brunswick Power Corporation Capital investment in system improvements contribute to increased quality  and reliability of service. FORTIS Inc. 2OO1 Annual Report 2