Highlights- Six month earnings increased 7% to $373.5 million- Six month adjusted operating earnings increased 9% to $358.9 million- Construction underway on numerous pipeline and terminal projects- Regulatory applications filed for Canadian portion of Alberta Clipper and Line 4 Extension- Joint venture proposal announced to move Canadian crude to U.S. Gulf Coast- Ontario Energy Board approves increase in EGD 2007 rates- Ontario Wind Project approved by provincial regulators and construction commenced
CALGARY, ALBERTA--(Marketwire - Aug. 1, 2007) - Enbridge Inc. (TSX:ENB) (NYSE:ENB) "Earnings for the first half of 2007 were again consistent with our expectations, increasing 7% from the prior year," said Patrick D. Daniel, President and Chief Executive Officer. "The increase reflects steady performance across our diversified business segments. Project execution is currently a high priority with many of our previously announced organic growth projects nearing or entering the construction phase. The investment in these projects will generate decades of favourable cash flow and should support our medium-term goal of 8% to 10% average annual earnings per share growth over the next five years."A key driver of growth is the expansion of our crude oil pipeline system," continued Mr. Daniel. "Currently, we are developing three large mainline expansion projects - the Southern Access Expansion, the Alberta Clipper project and the Line 4 Extension, which are expected to start coming into service in 2009. We are also advancing a number of transportation and storage projects upstream of the mainline hubs at Edmonton and Hardisty, including the Waupisoo Pipeline which is currently under construction and expected to be in service in 2008. Downstream of the Chicago hub, we are undertaking several projects such as the expansion of the Spearhead Pipeline only one year after the pipeline started moving crude from Chicago to Cushing; and the Southern Access Extension from Chicago to Patoka, Illinois."In addition to our crude oil pipelines, we are developing projects to bring diluent to the oil sands. One such project is the Southern Lights Pipeline, currently under construction. This pipeline is expected to bring 180,000 barrels per day of diluent from Chicago to Alberta to be blended with bitumen from the oil sands, and be in service in 2010."Our gas businesses outlook is also positive in light of continued growth and the upcoming multi-year incentive regulation at Enbridge Gas Distribution (EGD) and as we extend our offshore gas pipelines system to connect new U.S. Gulf offshore discoveries."On July 31, 2007, the Enbridge Board of Directors declared quarterly dividends of $0.3075 per common share and $0.34375 per Series A Preferred Share. Both dividends are payable on September 1, 2007 to shareholders of record on August 15, 2007./T/Consolidated Earnings Three months Six months (millions of Canadian dollars) ended June 30, ended June 30,---------------------------------------------------------------------------- 2007 2006 2007 2006---------------------------------------------------------------------------- Liquids Pipelines 65.8 68.6 134.7 134.9Gas Pipelines 13.4 15.9 39.1 31.9Sponsored Investments 33.4 23.2 51.2 43.4Gas Distribution and Services 23.7 34.0 133.1 120.0International 24.0 21.3 46.0 43.1Corporate (13.8) (5.1) (30.6) (24.5)---------------------------------------------------------------------------- 146.5 157.9 373.5 348.8--------------------------------------------------------------------------------------------------------------------------------------------------------/T/Earnings applicable to common shareholders were $373.5 million for the six months ended June 30, 2007, or $1.06 per share, compared with $348.8 million or $1.03 per share in 2006. Per share results in 2007 reflected the issuance of 15 million common shares in February 2007. The $24.7 million increase in earnings reflected a number of factors including a higher contribution from Enbridge Gas Distribution (EGD) as weather in its franchise area was colder than normal compared with the first six months of 2006, which were significantly warmer than normal. Enbridge Offshore Pipelines (EOP) earnings increased in the first quarter as 2005 hurricane insurance proceeds were received. Within Sponsored Investments, a dilution gain resulted from Enbridge Energy Partners' (EEP) issuance of more partnership units in the second quarter of 2007. Finally, there were reductions in federal future tax rates in the second quarter of both years however, the reduction in 2006 was much larger and contributed more to earnings in 2006.Earnings applicable to common shareholders were $146.5 million for the three months ended June 30, 2007, or $0.41 per share, compared with $157.9 million, or $0.47 per share in 2006. The change in earnings reflected similar factors as for the six month results. However, the earnings increases in the second quarter were more than offset by the impact of the tax rate changes in the second quarter of the prior year./T/Adjusted Operating Earnings(millions of Canadian dollars, Three months Six monthsexcept per share amounts) ended June 30, ended June 30,---------------------------------------------------------------------------- 2007 2006 2007 2006---------------------------------------------------------------------------- GAAP earnings as reported 146.5 157.9 373.5 348.8Significant after-tax non-operating factors and variances: Gas Pipelines EOP property insurance recovery from 2005 hurricanes - - (5.3) -Sponsored Investments Dilution gain on EEP Class A unit issuance (11.8) - (11.8) - EEP unrealized derivative fair value losses/(gains) (0.4) 0.3 1.6 (2.4) Revalue future income taxes due to tax rate changes 0.3 (6.0) 0.3 (6.0)Gas Distribution and Services Warmer/(colder) than normal weather affecting EGD(1) (9.8) 9.4 (11.2) 30.7 Energy Services unrealized derivative fair value losses 0.2 - 4.5 - Aux Sable unrealized derivative fair value losses 8.3 - 11.1 - Revalue future income taxes due to tax rate changes (3.8) (28.9) (3.8) (28.9)Corporate Revalue future income taxes due to tax rate changes - (14.0) - (14.0)----------------------------------------------------------------------------Adjusted Operating Earnings 129.5 118.7 358.9 328.2--------------------------------------------------------------------------------------------------------------------------------------------------------Adjusted Operating Earnings per Common Share 0.36 0.35 1.01 0.97--------------------------------------------------------------------------------------------------------------------------------------------------------1. The OEB's July 5, 2007 Decision changed the method of calculating forecast weather, retroactive to January 1, 2007. The impact of the new method was reflected in the second quarter calculation of colder than normal weather./T/Adjusted operating earnings were $358.9 million, or $1.01 per share, for the six months ended June 30, 2007, compared with $328.2 million, or $0.97 per share, for the six months ended June 30, 2006.The increase in adjusted operating earnings was largely due to:- Improved operating margins and customer growth at EGD.- The Company's increased ownership interest in EEP.- A full six months of earnings contributions from Olympic and Spearhead pipelines in 2007.The unrealized derivative fair value gains and losses resulted from derivative instruments which are economically effective hedges but do not qualify for hedge accounting treatment.The Company has foreign currency denominated earnings, primarily from U.S. based operations and investments, as well as its Euro investment in Compania Logistica de Hidrocarburos CLH, S.A. (CLH). The Company uses long-term derivative contracts to economically hedge a significant portion of the cash distributions from these long-term investments. However, this does not eliminate the volatility in earnings from these operations and investments caused by changes in exchange rate. During the six months ended June 30, 2007, the Company received foreign currency denominated cash distributions and settled associated hedge transactions resulting in a $6.7 million (2006 - $9.8 million) cash benefit related to hedging, which was not included in reported earnings.Non-GAAP MeasuresThis news release contains references to adjusted operating earnings, which represent earnings applicable to common shareholders adjusted for non-operating factors. Management believes that the presentation of adjusted operating earnings provides useful information to investors and shareholders as it provides increased predictive value. Management uses adjusted operating earnings to set targets and assess performance of the Company. Also, the Company's dividend payout target is based on adjusted operating earnings. Adjusted operating earnings is not a measure that has a standardized meaning prescribed by Canadian GAAP and is not considered a GAAP measure. Therefore, this measure may not be comparable with a similar measure presented by other issuers./T/Liquids Pipelines Three months Six months (millions of Canadian dollars) ended June 30, ended June 30,---------------------------------------------------------------------------- 2007 2006 2007 2006--------------------------------------------------------------------------------------------------------------------------------------------------------Enbridge System 45.1 48.9 94.2 100.9Athabasca System 13.0 13.8 26.6 26.1Olympic Pipeline 1.5 2.0 5.2 2.6Spearhead Pipeline 3.1 2.4 4.4 2.7Feeder Pipelines and Other 3.1 1.5 4.3 2.6---------------------------------------------------------------------------- 65.8 68.6 134.7 134.9--------------------------------------------------------------------------------------------------------------------------------------------------------/T/- Enbridge System earnings decreased slightly from the prior year due to the impact of a strong labour market on compensation expense, higher pipeline integrity costs and increased taxes in the Terrace component.- Olympic Pipeline was acquired on February 1, 2006. Earnings for 2007 reflected a full six months of operations as well as increased nomination penalties from shippers and higher tolls from a tariff increase in July 2006. Olympic's cost of service tolling methodology requires annual toll adjustments for over or under collections in prior years.- Spearhead Pipeline commenced operations in early March 2006. Earnings for 2007 reflected a full six months of operations as well as increased throughput, particularly in the second quarter./T/Gas Pipelines Three months Six months (millions of Canadian dollars) ended June 30, ended June 30,---------------------------------------------------------------------------- 2007 2006 2007 2006--------------------------------------------------------------------------------------------------------------------------------------------------------Alliance Pipeline US 7.3 7.2 14.8 14.5Vector Pipeline 3.1 2.7 6.9 6.8Enbridge Offshore Pipelines (EOP) 3.0 6.0 17.4 10.6---------------------------------------------------------------------------- 13.4 15.9 39.1 31.9--------------------------------------------------------------------------------------------------------------------------------------------------------/T/- Enbridge Offshore Pipelines earnings for the year to date included $5.3 million related to insurance proceeds for the replacement of damaged infrastructure resulting from the 2005 hurricanes. EOP earnings also included insurance proceeds of $6.0 million from business interruption policies, which were not adjusted in the Company's calculation of adjusted operating earnings because the related lost earnings were reflected in prior period earnings. The final claim settlement is expected in late 2007 or early 2008.- Enbridge Offshore Pipelines earnings for the first half of 2007 also reflected the impact of continuing natural production declines on deliveries to the pipelines. Expected start up of key new production sources continues to be delayed by the effects of the extreme 2005 hurricane season./T/Sponsored Investments Three months Six months (millions of Canadian dollars) ended June 30, ended June 30,---------------------------------------------------------------------------- 2007 2006 2007 2006--------------------------------------------------------------------------------------------------------------------------------------------------------Enbridge Income Fund (EIF) 9.7 8.7 19.3 18.0Enbridge Energy Partners (EEP) 12.2 8.5 20.4 19.4Dilution gains in EEP 11.8 - 11.8 -Revalue future income taxes due to tax changes in EIF (0.3) 6.0 (0.3) 6.0---------------------------------------------------------------------------- 33.4 23.2 51.2 43.4--------------------------------------------------------------------------------------------------------------------------------------------------------/T/- EEP's 2007 earnings included $1.6 million (net to Enbridge) of unrealized fair value losses on derivative financial instruments compared with unrealized fair value gains of $2.4 million in 2006. Second quarter earnings included $0.4 million (net to Enbridge) of unrealized fair value gains compared with losses of $0.3 million in 2006.- EEP's six month 2007 adjusted operating earnings of $22.0 million (2006 - $17.0 million) reflected Enbridge's increased ownership interest. EEP's earnings were relatively consistent with the prior year as increased throughput on principal natural gas and liquids systems was offset by higher operating expenses. Six month results were also negatively impacted by higher natural gas measurement losses and a processing plant temporary shutdown for maintenance.- EEP issued partnership units in the second quarter of 2007 and because Enbridge did not fully participate in these offerings, dilution gains resulted and Enbridge's ownership interest decreased from 16.6% on March 31, 2007 to 15.0% on June 30, 2007. During the first half of 2006, Enbridge had a 10.9% ownership interest in EEP.- In 2007, EIF's earnings were reduced given the requirement to recognize future taxes within entities that will become taxable in 2011 as a result of the enactment of Bill C-52 "the Tax Fairness Plan". This was partially offset by tax rate reductions on future income tax obligations previously recorded. The prior year included the impact of larger tax rate reductions./T/Gas Distribution and Services Three months Six months (millions of Canadian dollars) ended June 30, ended June 30,---------------------------------------------------------------------------- 2007 2006 2007 2006--------------------------------------------------------------------------------------------------------------------------------------------------------Enbridge Gas Distribution 17.6 (5.1) 103.8 53.2Noverco (1.0) 1.2 16.0 15.1CustomerWorks/ECS 1.5 3.7 5.5 10.3Enbridge Gas New Brunswick 3.1 2.5 5.9 4.3Other Gas Distribution 0.8 0.6 6.1 5.3 Energy Services 1.9 3.3 0.5 3.7Aux Sable (5.9) 0.2 (8.2) 1.2Other 1.9 (1.3) (0.3) (2.0)Revalue future income taxes due to tax rate changes 3.8 28.9 3.8 28.9---------------------------------------------------------------------------- 23.7 34.0 133.1 120.0--------------------------------------------------------------------------------------------------------------------------------------------------------/T/- EGD's earnings improved from the prior year primarily due to the impact of colder weather. In 2006, weather was significantly warmer than normal, resulting in lower earnings, whereas in 2007, weather has been colder than normal. Earnings also increased because of improved expense management, customer growth and higher storage and transportation capacity transaction revenues.- CustomerWorks/ECS earnings decreased because, pursuant to an OEB recommendation, CustomerWorks transitioned customer care services related to EGD to a third party service provider.- Energy Services earnings in 2007 reflected $4.5 million of unrealized fair value losses ($0.2 million in the second quarter of 2007) on derivative instruments. After adjusting for these losses, performance over the six months was stronger, which resulted from increased optimization of Enbridge assets, improved market fundamentals for crude oil and increased transportation and storage volumes, all at Tidal Energy. Energy Services includes Gas Services and Tidal Energy, which was included in Other in prior years.- Aux Sable earnings reflected unrealized fair value losses on derivative financial instruments of $11.1 million ($8.3 million in the second quarter of 2007). These financial instruments are used to mitigate the uncertainty of the Company's share of the contingent upside sharing mechanism, which allows Aux Sable to share in natural gas processing margins in excess of certain thresholds. Fractionation margins have been positive throughout the first half of 2007 and during the second quarter, the Company recognized earnings under the upside sharing agreement./T/International Three months Six months (millions of Canadian dollars) ended June 30, ended June 30,---------------------------------------------------------------------------- 2007 2006 2007 2006--------------------------------------------------------------------------------------------------------------------------------------------------------CLH 16.7 14.7 31.2 28.0OCENSA/CITCol 8.1 8.1 16.4 16.3Other (0.8) (1.5) (1.6) (1.2)---------------------------------------------------------------------------- 24.0 21.3 46.0 43.1--------------------------------------------------------------------------------------------------------------------------------------------------------- CLH earnings increased slightly due to higher transportation tariffs, higher volumes and the impact of a stronger Euro.Corporate Three months Six months (millions of Canadian dollars) ended June 30, ended June 30,---------------------------------------------------------------------------- 2007 2006 2007 2006--------------------------------------------------------------------------------------------------------------------------------------------------------Corporate (13.8) (19.1) (30.6) (38.5)Revalue future income taxes due to tax rate changes - 14.0 - 14.0---------------------------------------------------------------------------- (13.8) (5.1) (30.6) (24.5)--------------------------------------------------------------------------------------------------------------------------------------------------------/T/- After adjusting for the revalue of future income taxes due to tax rate changes, Corporate costs decreased, primarily due to decreased interest expense resulting from lower levels of corporate debt which was repaid from the proceeds of the $566.4 million issuance of equity on February 2, 2007. Interest expense in Corporate was also lower in the second quarter of 2007 because the Company began to capitalize interest on certain organic growth projects, financed through Corporate debt.Conference CallEnbridge will hold a conference call on Wednesday, August 1, 2007 at 9:00 a.m. Eastern time (7:00 a.m. Mountain time) to discuss the second quarter 2007 results. Analysts, members of the media and other interested parties can access the call at 617-213-4861 or toll-free at 1-888-713-4199 using the access code of 28881509. The call will be audio webcast live at www.enbridge.com/investor. A webcast replay will be available approximately two hours after the conclusion of the event and a transcript will be posted to the website within approximately 24 hours. The webcast replay will be available at toll-free 1-888-286-8010 or 617-801-6888. The access code for the replay is 69728638.The conference call will begin with a presentation by the Company's Chief Executive Officer and Chief Financial Officer followed by a question and answer period for investment analysts. A question and answer period for members of the media will immediately follow.The unaudited interim consolidated financial statements and Management's Discussion and Analysis, which contain additional notes and disclosures, are available on the Enbridge website.Enbridge Inc., a Canadian company, is a leader in energy transportation and distribution in North America and internationally. As a transporter of energy, Enbridge operates, in Canada and the United States, the world's longest crude oil and liquids pipeline system. The Company also has international operations and a growing involvement in the natural gas transmission and midstream businesses. As a distributor of energy, Enbridge owns and operates Canada's largest natural gas distribution company, and provides distribution services in Ontario, Quebec, New Brunswick and New York State. Enbridge employs approximately 5,000 people, primarily in Canada, the United States and South America. Enbridge's common shares trade on the Toronto Stock Exchange in Canada and on the New York Stock Exchange in the United States under the symbol ENB. Information about Enbridge is available on the Company's website at www.enbridge.com.In the interest of providing Enbridge shareholders and potential investors with information about the Company and its subsidiaries, including management's assessment of Enbridge's and its subsidiaries' future plans and operations, certain information provided in this News Release constitutes forward-looking statements or information (collectively, "forward-looking statements"). Forward-looking statements are typically identified by words such as "anticipate", "expect", "project", "estimate", "forecast", "plan", "intend", "target", "believe" and similar words suggesting future outcomes or statements regarding an outlook. Although Enbridge believes that these forward-looking statements are reasonable based on the information available on the date such statements are made, such statements are not guarantees of future performance and readers are cautioned against placing undue reliance on forward-looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements.Enbridge's forward-looking statements are subject to risks and uncertainties pertaining to operating performance, regulatory parameters, weather, economic conditions, exchange rates, interest rates and commodity prices, including but not limited to those risks and uncertainties discussed in this News Release and in the Company's other filings with Canadian and United States securities regulators. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these are interdependent and Enbridge's future course of action depends on management's assessment of all information available at the relevant time. Except to the extent required by law, Enbridge assumes no obligation to publicly update or revise any forward-looking statements made in this News Release or otherwise, whether as a result of new information, future events or otherwise. All subsequent forward-looking statements, whether written or oral, attributable to Enbridge or persons acting on the Company's behalf, are expressly qualified in their entirety by these cautionary statements./T/ENBRIDGE INC.----------------------------------------------------------------------------HIGHLIGHTS----------------------------------------------------------------------------(unaudited; millions of Canadian Three months ended Six months endeddollars,except per share amounts) June 30, June 30,---------------------------------------------------------------------------- 2007 2006 2007 2006----------------------------------------------------------------------------Earnings Applicable to Common Shareholders Liquids Pipelines 65.8 68.6 134.7 134.9 Gas Pipelines 13.4 15.9 39.1 31.9 Sponsored Investments 33.4 23.2 51.2 43.4 Gas Distribution and Services 23.7 34.0 133.1 120.0 International 24.0 21.3 46.0 43.1 Corporate (13.8) (5.1) (30.6) (24.5)---------------------------------------------------------------------------- 146.5 157.9 373.5 348.8--------------------------------------------------------------------------------------------------------------------------------------------------------Cash Flow Data Cash provided by operating activities before changes in operating assets and liabilities 305.5 262.0 722.4 585.6 Cash provided by operating activities 415.3 485.3 1,181.2 1,199.8 Expenditures on property, plant and equipment 457.8 247.2 901.6 400.7 Acquisitions and long-term investments 14.8 0.2 15.4 156.3 Common share dividends 112.9 100.8 225.8 201.4----------------------------------------------------------------------------Per Share Information Earnings per Common Share 0.41 0.47 1.06 1.03 Diluted Earnings per Common Share 0.41 0.46 1.05 1.02 Dividends per Common Share 0.3075 0.2875 0.6150 0.5750----------------------------------------------------------------------------Shares Outstanding (millions) Weighted Average Common Shares Outstanding 353.6 339.3 Diluted Weighted Average Common Shares Outstanding 356.7 342.5----------------------------------------------------------------------------Operating Liquids Pipelines - Deliveries (thousands of barrels per day) Enbridge System 2,074 2,054 2,153 2,103 Athabasca System 236 315 263 317 Spearhead Pipeline 112 72 101 72 Olympic Pipeline 280 284 281 288 Gas Pipelines - Average Daily Throughput Volume (millions of cubic feet per day) Alliance Pipeline US 1,607 1,592 1,641 1,636 Vector Pipeline 973 1,011 990 1,082 Enbridge Offshore Pipelines 2,105 2,229 2,064 2,149 Gas Distribution and Services(1) Volumes (billion cubic feet) 77 70 269 240 Number of active customers (thousands) 1,876 1,825 1,876 1,825 Degree day deficiency(2) Actual 487 439 2,395 2,105 Forecast based on normal weather 499 546 2,288 2,440--------------------------------------------------------------------------------------------------------------------------------------------------------1. Gas Distribution and Services volumes and the number of active customers are derived from the aggregate system supply and direct purchase gas supply arrangements.2. Degree-day deficiency is a measure of coldness which is indicative of volumetric requirements of natural gas utilized for heating purposes. It is calculated by accumulating for each day in the period the total number of degrees each day by which the daily mean temperature falls below 18 degrees Celsius. The figures given are those accumulated in the Greater Toronto Area.ENBRIDGE INC.CONSOLIDATED STATEMENTS OF EARNINGS---------------------------------------------------------------------------- Three months ended Six months ended June 30, June 30,----------------------------------------------------------------------------(unaudited; millions of Canadian dollars, except per share amounts) 2007 2006 2007 2006----------------------------------------------------------------------------Revenues Commodity sales 2,161.0 1,791.1 4,847.6 4,496.5 Transportation 482.7 478.3 1,085.0 1,062.2 Energy services 85.0 57.8 154.3 115.2---------------------------------------------------------------------------- 2,728.7 2,327.2 6,086.9 5,673.9----------------------------------------------------------------------------Expenses Commodity costs 2,047.0 1,695.6 4,578.8 4,287.6 Operating and administrative 274.6 248.9 554.9 503.3 Depreciation and amortization 151.9 146.2 299.0 292.2---------------------------------------------------------------------------- 2,473.5 2,090.7 5,432.7 5,083.1---------------------------------------------------------------------------- 255.2 236.5 654.2 590.8Income from Equity Investments 36.4 43.3 80.4 98.1Other Investment Income 67.0 22.7 108.6 50.2Interest Expense (133.2) (136.8) (273.8) (275.1)---------------------------------------------------------------------------- 225.4 165.7 569.4 464.0Non-Controlling Interests (19.4) (19.8) (25.0) (33.2)---------------------------------------------------------------------------- 206.0 145.9 544.4 430.8Income Taxes (57.8) 13.7 (167.5) (78.6)----------------------------------------------------------------------------Earnings 148.2 159.6 376.9 352.2Preferred Share Dividends (1.7) (1.7) (3.4) (3.4)----------------------------------------------------------------------------Earnings Applicable to Common Shareholders 146.5 157.9 373.5 348.8--------------------------------------------------------------------------------------------------------------------------------------------------------Earnings Per Common Share 0.41 0.47 1.06 1.03--------------------------------------------------------------------------------------------------------------------------------------------------------Diluted Earnings Per Common Share 0.41 0.46 1.05 1.02--------------------------------------------------------------------------------------------------------------------------------------------------------See accompanying notes to the unaudited consolidated financial statements. ENBRIDGE INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME---------------------------------------------------------------------------- Three months ended Six months ended June 30, June 30,----------------------------------------------------------------------------(unaudited; millions of Canadian dollars) 2007 2006 2007 2006----------------------------------------------------------------------------Earnings 148.2 159.6 376.9 352.2Other Comprehensive Income/(Loss)Change in unrealized gains on cash flow hedges, net of tax 32.3 - 41.5 -Reclassification to earnings of realized cash flow hedges, net of tax 9.6 - 16.9 -Other comprehensive gain/(loss) from equity investees 5.2 - (5.0) -Non-Controlling interest in other comprehensive income (2.8) - 3.0 -Change in foreign currency translation adjustment (247.9) (101.3) (278.7) (83.9)Change in unrealized gains on net investment hedges, net of tax 98.0 36.8 100.1 30.5----------------------------------------------------------------------------Comprehensive Income 42.6 95.1 254.7 298.8--------------------------------------------------------------------------------------------------------------------------------------------------------See accompanying notes to the unaudited consolidated financial statements. ENBRIDGE INC.CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY---------------------------------------------------------------------------- Six months ended June 30,----------------------------------------------------------------------------(unaudited; millions of Canadian dollars) 2007 2006----------------------------------------------------------------------------Preferred Shares 125.0 125.0----------------------------------------------------------------------------Common Shares Balance at beginning of period 2,416.1 2,343.8 Common shares issued 566.4 - Dividend reinvestment and share purchase plan 9.2 9.5 Shares issued on exercise of stock options 18.7 35.0----------------------------------------------------------------------------Balance at End of Period 3,010.4 2,388.3----------------------------------------------------------------------------Contributed Surplus Balance at beginning of period 18.3 10.0 Stock-based compensation 6.4 3.6 Option exercises (1.0) (1.3)----------------------------------------------------------------------------Balance at End of Period 23.7 12.3----------------------------------------------------------------------------Retained Earnings Balance at beginning of period 2,322.7 2,098.2 Earnings applicable to common shareholders 373.5 348.8 Cumulative impact of change in accounting policy (47.0) - Common share dividends (225.8) (201.4) Dividends paid to reciprocal shareholder 6.7 6.1----------------------------------------------------------------------------Balance at End of Period 2,430.1 2,251.7----------------------------------------------------------------------------Accumulated Other Comprehensive Loss Balance at beginning of period (135.8) (171.8) Cumulative impact of change in accounting policy 48.2 - Other comprehensive loss (122.2) (53.4)----------------------------------------------------------------------------Balance at End of Period (209.8) (225.2)----------------------------------------------------------------------------Reciprocal Shareholding Balance at beginning of period (135.7) (135.7) Participation in common shares issued (18.6) -----------------------------------------------------------------------------Balance at End of Period (154.3) (135.7)----------------------------------------------------------------------------Total Shareholders' Equity 5,225.1 4,416.4--------------------------------------------------------------------------------------------------------------------------------------------------------See accompanying notes to the unaudited consolidated financial statements. ENBRIDGE INC.CONSOLIDATED STATEMENTS OF CASH FLOWS---------------------------------------------------------------------------- Three months ended Six months ended June 30, June 30,----------------------------------------------------------------------------(unaudited; millions of Canadian dollars) 2007 2006 2007 2006----------------------------------------------------------------------------Cash Provided By Operating Activities Earnings 148.2 159.6 376.9 352.2 Depreciation and amortization 151.9 146.2 299.0 292.2 Unrealized losses on derivative instruments 6.4 - 13.5 - Equity earnings in excess of cash distributions (3.2) (8.2) (27.9) (42.8) Gain on reduction of ownership interest (33.9) - (33.9) - Future income taxes 5.6 (49.7) 71.3 (48.1) Other 30.5 14.1 23.5 32.1 Changes in operating assets and liabilities 109.8 223.3 458.8 614.2---------------------------------------------------------------------------- 415.3 485.3 1,181.2 1,199.8----------------------------------------------------------------------------Investing Activities Acquisitions - - - (101.4) Long-term investments (14.8) (0.2) (15.4) (54.9) Additions to property, plant and equipment (457.8) (247.2) (901.6) (400.7) Affiliate loans - 28.0 - 28.0 Change in construction payable 45.8 6.6 3.7 (14.3)---------------------------------------------------------------------------- (426.8) (212.8) (913.3) (543.3)----------------------------------------------------------------------------Financing Activities Net change in short-term borrowings and short-term debt (536.3) 214.4 (1,110.4) (553.2) Net change in non-recourse short-term debt 3.9 4.5 7.2 4.5 Long-term debt issues 693.7 - 1,156.6 500.0 Long-term debt repayments - (400.0) (534.5) (400.0) Non-recourse long-term debt issues - 0.8 14.4 2.8 Non-recourse long-term debt repayments (28.2) (27.1) (28.7) (29.7) Distributions to non-controlling interests (7.0) (13.8) (12.7) (19.9) Common shares issued 18.7 18.4 586.2 38.5 Preferred share dividends (1.7) (1.7) (3.4) (3.4) Common share dividends (112.9) (100.8) (225.8) (201.4)---------------------------------------------------------------------------- 30.2 (305.3) (151.1) (661.8)----------------------------------------------------------------------------Increase/(Decrease) in Cash and Cash Equivalents 18.7 (32.8) 116.8 (5.3)Cash and Cash Equivalents at Beginning of Period 237.8 181.4 139.7 153.9----------------------------------------------------------------------------Cash and Cash Equivalents at End of Period 256.5 148.6 256.5 148.6--------------------------------------------------------------------------------------------------------------------------------------------------------See accompanying notes to the unaudited consolidated financial statements. ENBRIDGE INC.CONSOLIDATED STATEMENTS OF FINANCIAL POSITION---------------------------------------------------------------------------- June 30, December 31,(unaudited; millions of Canadian dollars) 2007 2006----------------------------------------------------------------------------AssetsCurrent Assets Cash and cash equivalents 256.5 139.7 Accounts receivable and other 2,059.2 2,045.6 Inventory 547.0 868.9---------------------------------------------------------------------------- 2,862.7 3,054.2Property, Plant and Equipment, net 11,656.0 11,264.7Long-Term Investments 2,154.2 2,299.4Deferred Amounts and Other Assets 1,024.5 924.5Intangible Assets 225.1 241.5Goodwill 385.8 394.9Future Income Taxes 175.0 200.1---------------------------------------------------------------------------- 18,483.3 18,379.3--------------------------------------------------------------------------------------------------------------------------------------------------------Liabilities and Shareholders' EquityCurrent Liabilities Short-term borrowings 162.4 807.9 Accounts payable and other 1,877.9 1,723.8 Interest payable 91.1 95.1 Current maturities and short-term debt 200.7 537.0 Current portion of non-recourse debt 58.7 60.1---------------------------------------------------------------------------- 2,390.8 3,223.9Long-Term Debt 7,385.9 7,054.0Non-Recourse Long-Term Debt 1,545.0 1,622.0Other Long-Term Liabilities 234.2 91.1Future Income Taxes 1,039.3 1,062.5Non-Controlling Interests 663.0 715.2---------------------------------------------------------------------------- 13,258.2 13,768.7--------------------------------------------------------------------------------------------------------------------------------------------------------Shareholders' Equity Share capital Preferred shares 125.0 125.0 Common shares 3,010.4 2,416.1 Contributed surplus 23.7 18.3 Retained earnings 2,430.1 2,322.7 Accumulated other comprehensive loss (209.8) (135.8) Reciprocal shareholding (154.3) (135.7)---------------------------------------------------------------------------- 5,225.1 4,610.6---------------------------------------------------------------------------- 18,483.3 18,379.3--------------------------------------------------------------------------------------------------------------------------------------------------------See accompanying notes to the unaudited consolidated financial statements. SEGMENTED INFORMATIONThree months ended June 30, 2007---------------------------------------------------------------------------- Gas Distribution(millions of Canadian Liquids Gas Sponsored and dollars) Pipelines Pipelines Investments Services----------------------------------------------------------------------------Revenues 258.2 78.5 69.2 2,320.6Commodity costs - - - (2,047.0)Operating and administrative (100.5) (20.8) (19.9) (125.0)Depreciation and amortization (38.9) (21.3) (19.9) (70.5)---------------------------------------------------------------------------- 118.8 36.4 29.4 78.1Income from equity investments (0.1) - 27.6 (5.2)Other investment income 3.5 1.8 35.8 3.8Interest and preferred share (24.7) (16.6) (15.3) (47.7) dividendsNon-controlling interests (0.5) - (17.1) (1.8)Income taxes (31.2) (8.2) (27.0) (3.5)----------------------------------------------------------------------------Earnings applicable to common shareholders 65.8 13.4 33.4 23.7------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------(millions of Canadian dollars) International Corporate Consolidated----------------------------------------------------------------------------Revenues 2.2 - 2,728.7Commodity costs - - (2,047.0)Operating and administrative (3.4) (5.0) (274.6)Depreciation and amortization (0.3) (1.0) (151.9)---------------------------------------------------------------------------- (1.5) (6.0) 255.2Income from equity investments 14.4 (0.3) 36.4Other investment income 12.2 9.9 67.0Interest and preferred share - (30.6) (134.9) dividendsNon-controlling interests - - (19.4)Income taxes (1.1) 13.2 (57.8)----------------------------------------------------------------------------Earnings applicable to common shareholders 24.0 (13.8) 146.5--------------------------------------------------------------------------------------------------------------------------------------------------------Three months ended June 30, 2006---------------------------------------------------------------------------- Gas Distribution(millions of Canadian Liquids Gas Sponsored and dollars) Pipelines Pipelines Investments Services----------------------------------------------------------------------------Revenues 246.1 86.4 63.4 1,928.5Commodity costs - - - (1,695.6)Operating and administrative (85.2) (24.7) (18.0) (113.5)Depreciation and amortization (40.1) (20.4) (17.9) (66.4)---------------------------------------------------------------------------- 120.8 41.3 27.5 53.0Income from equity investments (0.1) - 22.7 6.6Other investment income 0.8 3.2 0.8 6.1Interest and preferred share dividends (27.6) (18.5) (15.0) (46.1)Non-controlling interests (0.5) - (17.9) (1.4)Income taxes (24.8) (10.1) 5.1 15.8----------------------------------------------------------------------------Earnings applicable to common shareholders 68.6 15.9 23.2 34.0------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------(millions of Canadian dollars) International Corporate Consolidated----------------------------------------------------------------------------Revenues 2.8 - 2,327.2Commodity costs - - (1,695.6)Operating and administrative (4.6) (2.9) (248.9)Depreciation and amortization (0.1) (1.3) (146.2)---------------------------------------------------------------------------- (1.9) (4.2) 236.5Income from equity investments 14.1 - 43.3Other investment income 13.6 (1.8) 22.7Interest and preferred share dividends - (31.3) (138.5)Non-controlling interests - - (19.8)Income taxes (4.5) 32.2 13.7----------------------------------------------------------------------------Earnings applicable to common shareholders 21.3 (5.1) 157.9--------------------------------------------------------------------------------------------------------------------------------------------------------Six months ended June 30, 2007---------------------------------------------------------------------------- Gas Distribution(millions of Canadian Liquids Gas Sponsored and dollars) Pipelines Pipelines Investments Services----------------------------------------------------------------------------Revenues 531.9 165.1 132.8 5,252.2Commodity costs - - - (4,578.8)Operating and administrative (202.4) (41.1) (37.3) (259.0)Depreciation and amortization (77.9) (44.3) (38.1) (136.1)---------------------------------------------------------------------------- 251.6 79.7 57.4 278.3Income from equity investments (0.4) - 44.2 8.0Other investment income 3.7 17.1 36.8 8.1Interest and preferred share dividends (49.8) (34.2) (30.5) (100.5)Non-controlling interests (0.7) - (21.1) (3.2)Income taxes (69.7) (23.5) (35.6) (57.6)----------------------------------------------------------------------------Earnings applicable to common shareholders 134.7 39.1 51.2 133.1------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------(millions of Canadian dollars) International Corporate Consolidated----------------------------------------------------------------------------Revenues 4.9 - 6,086.9Commodity costs - - (4,578.8)Operating and administrative (7.2) (7.9) (554.9)Depreciation and amortization (0.5) (2.1) (299.0)---------------------------------------------------------------------------- (2.8) (10.0) 654.2Income from equity investments 29.2 (0.6) 80.4Other investment income 21.1 21.8 108.6Interest and preferred share dividends - (62.2) (277.2)Non-controlling interests - - (25.0)Income taxes (1.5) 20.4 (167.5)----------------------------------------------------------------------------Earnings applicable to common shareholders 46.0 (30.6) 373.5--------------------------------------------------------------------------------------------------------------------------------------------------------Six months ended June 30, 2006---------------------------------------------------------------------------- Gas Distribution(millions of Canadian Liquids Gas Sponsored and dollars) Pipelines Pipelines Investments Services----------------------------------------------------------------------------Revenues 493.9 173.1 125.4 4,876.2Commodity costs - - - (4,287.6)Operating and administrative (170.0) (47.1) (32.9) (238.9)Depreciation and amortization (78.7) (42.4) (36.0) (132.1)---------------------------------------------------------------------------- 245.2 83.6 56.5 217.6Income from equity investments (0.1) - 54.2 17.6Other investment income 1.0 6.0 1.7 10.4Interest and preferred share dividends (50.8) (37.3) (30.0) (94.8)Non-controlling interests (0.9) - (30.0) (2.3)Income taxes (59.5) (20.4) (9.0) (28.5)----------------------------------------------------------------------------Earnings applicable to common shareholders 134.9 31.9 43.4 120.0------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------(millions of Canadian dollars) International Corporate Consolidated----------------------------------------------------------------------------Revenues 5.3 - 5,673.9Commodity costs - - (4,287.6)Operating and administrative (7.8) (6.6) (503.3)Depreciation and amortization (0.4) (2.6) (292.2)---------------------------------------------------------------------------- (2.9) (9.2) 590.8Income from equity investments 26.4 - 98.1Other investment income 25.7 5.4 50.2Interest and preferred share dividends - (65.6) (278.5)Non-controlling interests - - (33.2)Income taxes (6.1) 44.9 (78.6)----------------------------------------------------------------------------Earnings applicable to common shareholders 43.1 (24.5) 348.8--------------------------------------------------------------------------------------------------------------------------------------------------------/T/
For more information please contact:
Enbridge Inc.Jennifer VareyMedia(403) 508-6563Email: jennifer.varey@enbridge.comorEnbridge Inc.Bob RahnInvestment Community(403) 231-7398Email: bob.rahn@enbridge.comWebsite: www.enbridge.com