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## 4. Long-Term Investments 

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Consolidated retained earnings at December 31, 2000 include undistributed earnings from equity investments of $114.7 million (1999 — $62.6 million). Income from equity investments was $99.4 million in 2000 (1999 — $72.8 million, 1998 — $47.5 million) of which $85.4 million in 2000 (1999 — $72.6 million, 1998 — $47.5 million) was from the Energy Transportation segment and the remainder from Energy Distribution. 

Equity investments include $206.4 million (1999 — $192.1 million) representing the unamortized excess of the purchase price over the underlying net book value of the investee’s assets at the date of purchase. The excess has been allocated to property, plant and equipment, on the basis of estimated fair values, and is being amortized over the economic life of the assets. 

In 1999, Lakehead Pipe Line Partners (Partnership) completed a public issue of additional Partnership Units. As the Company elected not to participate in these offerings, its effective interest in the Partnership was reduced to 15.3% from 16.6%. This resulted in recognition of a dilution gain of $18.2 million, before tax. 

Noverco holds an approximate 10% reciprocal shareholding in the Company. As a result, the Company has a pro-rata interest of 3.2% in its own shares (1999 — 3.2%). Both the equity investment in Noverco Inc. and shareholders’ equity have been reduced by the reciprocal shareholding of $128.2 million (1999 — $121.9 million). 

