CALGARY, ALBERTA--(CCNMatthews - May 5, 2004) - Enbridge Inc.
today announced earnings applicable to common shareholders of
$112.4 million for the quarter ended March 31, 2004, or $0.67 per
share, compared with $103.8 million, or $0.63 per share, in 2003.
Contributing to the increase are positive contributions from the
Enbridge crude oil pipeline system, Enbridge Gas Distribution and
the Aux Sable liquids extraction plant.
"Enbridge posted another quarter of solid earnings, extending our
track record of consistent low risk earnings and cash flow
growth," said Patrick D. Daniel, President & Chief Executive
Officer. Mr. Daniel added, "Moreover, we are encouraged by the
significant number of new opportunities available to Enbridge in
both oil and gas pipelining, and are actively working to
translate these opportunities into increased value for both our
customers and shareholders. We will also continue to prudently
assess asset acquisitions, but remain patient and very
disciplined." Mr. Daniel concluded, "Given the first quarter
results and our outlook, we continue to expect earnings excluding
unusual items for full year 2004 to be in the range of $3.00 to
$3.10 per common share."
On May 5, 2004, the Enbridge Board of Directors declared
quarterly dividends of $0.4575 per common share and $0.34375 per
Series A Preferred Share. Both dividends are payable on June 1,
2004 to shareholders of record on May 17, 2004.
Consolidated Earnings (millions of Canadian dollars) First Quarter-------------------------------------------------------------------- 2004 2003 ----------------- Liquids Pipelines 52.6 46.4Gas Pipelines 13.0 17.1Sponsored Investments 15.4 7.8Gas Distribution and Services 39.5 31.8International 16.2 15.6Corporate (24.3) (14.9) ----------------- 112.4 103.8 ----------------- -----------------Significant non-operating factors and variances affecting consolidated earnings are as follows:(millions of Canadian dollars) First Quarter-------------------------------------------------------------------- 2004 2003 -----------------Sponsored Investments dilution gain on EEP unit issuance 0.9 - ----------------- 0.9 -Gas Distribution and Services colder than normal weather 2.1 14.3 regulatory disallowances (4.6) (7.1) dilution gain in Noverco on Gaz Metro unit issuance 1.1 - revalue of future income taxes due to tax rate changes (45.4) - ----------------- (46.8) 7.2 Total variances increasing (decreasing) earnings (45.9) 7.2 ----------------- -----------------
Significant operating factors affecting earnings in the first
quarter of 2004 include the following:
- Enbridge crude oil pipeline system earnings are higher as they
include incremental earnings from the Terrace Phase III expansion
placed into service on April 1, 2003.
- Enbridge Gas Distribution earnings are higher in the first
quarter of 2004 as they include $35 million related to unbilled
revenue and the effect of final 2004 rates, whereas in 2003,
final rates were not approved until the third quarter.
- The Aux Sable liquids extraction plant performed well in the
quarter as fractionation margins were positive.
- The positive operating factors identified above are partially
offset by higher corporate expenses.
--------------------------------------------------------------------Liquids Pipelines--------------------------------------------------------------------(millions of Canadian dollars) First Quarter-------------------------------------------------------------------- 2004 2003 ----------------- Enbridge System 41.2 29.6Athabasca System 10.7 11.7NW System 1.9 2.1Saskatchewan System - 1.7Feeder Pipelines and Other (1.2) 1.3 ----------------- 52.6 46.4 ----------------- -----------------
- Enbridge System earnings are higher as they include incremental
earnings from the Terrace Phase III expansion placed into service
on April 1, 2003.
- The Athabasca System includes the earnings contribution from
the recently completed Hardisty storage caverns more than offset
by higher tax expense due to the utilization of loss
carryforwards in the prior year.
- The Saskatchewan System is included in the results of Enbridge
Income Fund (EIF), a component of the Sponsored Investments
segment, effective June 30, 2003.
- The earnings variance in Feeder Pipelines and Other is the
result of higher costs than provided for in 2003, associated with
the final settlement of Federal Energy Regulatory Commission
reparations on the Frontier Pipeline, as well as higher Liquids
Pipelines business development costs.
--------------------------------------------------------------------Gas Pipelines --------------------------------------------------------------------(millions of Canadian dollars) First Quarter-------------------------------------------------------------------- 2004 2003 ----------------- Alliance Pipeline (US) 9.0 7.9Alliance Pipeline (Canada) - 7.2Vector Pipeline 4.0 2.0 ----------------- 13.0 17.1 ----------------- -----------------
- Alliance Pipeline (US) earnings reflect the additional
ownership interests of 1.1% in March 2003, 10.7% in April 2003,
and 1.1% in October 2003, partially offset by the impact of the
stronger Canadian dollar in 2004.
- Alliance Pipeline (Canada) is included in the results of EIF, a
component of the Sponsored Investments segment, effective June
30, 2003.
- Vector Pipeline earnings reflect increased transportation
volumes as new interconnect facilities and customer storage
developments have increased demand for service on the pipeline.
This is further enhanced by an additional ownership interest of
15.0% acquired in the fourth quarter of 2003.
--------------------------------------------------------------------Sponsored Investments --------------------------------------------------------------------(millions of Canadian dollars) First Quarter-------------------------------------------------------------------- 2004 2003 ----------------- Enbridge Energy Partners (EEP) 7.0 7.8Enbridge Income Fund (EIF) 7.5 -Dilution Gain 0.9 - ----------------- 15.4 7.8 ----------------- -----------------
- Enbridge's ownership interest in EEP is lower in 2004 due to
the unit issuances completed by EEP in 2003, which lowered its
earnings contribution. The stronger Canadian dollar and the
translation of EEP's earnings also contributed to the decrease.
EEP's results include incremental earnings from their acquisition
of the North Texas assets for US$250 million, which closed on
December 31, 2003 and the Mid-Continent assets for US$117
million, which closed on March 1, 2004. The incremental earnings
from these acquisitions are partially offset by a lower
contribution from EEP's marketing business.
- EIF commenced operations June 30, 2003.
- In connection with EEP's December 2003 unit offering, the
underwriters exercised their over-allotment option to purchase
additional units in January 2004 resulting in a dilution gain.
--------------------------------------------------------------------Gas Distribution and Services --------------------------------------------------------------------(millions of Canadian dollars) First Quarter-------------------------------------------------------------------- 2004 2003 ----------------- Enbridge Gas Distribution 11.5 10.7CustomerWorks/ECS 4.9 5.1Noverco 13.6 10.2Other Gas Distibution 2.0 2.2Enbridge Gas New Brunswick 1.1 1.2Gas Services (0.4) (0.3)Aux Sable 1.3 (1.8)Other 5.5 4.5 ----------------- 39.5 31.8 ----------------- -----------------
- Various factors, including the weather, affect EGD's
distribution volumes and earnings in 2004. While weather was
colder than normal in 2004 and increased earnings by $7.3
million, it was not as cold as the prior year where weather
increased earnings by $14.3 million.
- The Ontario tax rate increase and the related revalue of future
income taxes result in a charge to earnings of $47.6 million for
EGD in 2004. EGD's earnings also include a $4.6 million
outsourcing disallowance in 2004, whereas the prior year included
a $7.1 million gas costs disallowance related to a long-term
transportation contract.
- Commencing in 2004, EGD refined its process for estimating
unbilled revenue resulting in a $35 million increase in earnings
in the quarter and had EGD experienced normal weather during the
unbilled period, it would have resulted in additional earnings of
$5.2 million. The impact is a timing difference of reported
earnings among quarters. If EGD had employed the new estimation
procedures for the prior year first quarter, 2003 first quarter
earnings would have increased by $33.0 million and had weather
been normal, earnings would have included an additional $0.6
million.
- EGD's earnings were also positively impacted as a result of
2004 reflecting final rates, whereas in 2003, final rates were
not approved until the third quarter.
- The 2004 operating results for Noverco include a $1.1 million
dilution gain, resulting from a Gaz Metro Limited Partnership
unit issuance that Noverco did not participate in. The Alberta
tax rate reduction also increased earnings by $1.6 million.
- Aux Sable's operating results improved in the first quarter of
2004 as a result of positive fractionation margins and the
benefits of a comprehensive risk management strategy. Enbridge's
ownership interest in Aux Sable was also higher in 2004 as an
additional 11.8% was acquired in April 2003 resulting in the
current ownership of 42.7%. As the acquisition of the additional
interest was at a discount to the book value, depreciation
expense is lower.
--------------------------------------------------------------------International --------------------------------------------------------------------(millions of Canadian dollars) First Quarter-------------------------------------------------------------------- 2004 2003 ----------------- OCENSA/CITCol 7.8 8.4CLH 9.8 8.4Other (1.4) (1.2) ----------------- 16.2 15.6 ----------------- -----------------
- Operating results from CLH reflect increased volumes due to
greater demand for refined products throughout Spain, lower
operating costs and the translation impact of the stronger Euro.
--------------------------------------------------------------------Corporate --------------------------------------------------------------------(millions of Canadian dollars) First Quarter-------------------------------------------------------------------- 2004 2003 ----------------- Corporate (24.3) (14.9) ----------------- -----------------
- Corporate costs in 2004 include an expense for stock-based
compensation and the prior year included interest income on a
loan to EEP.
Enbridge will hold a conference call at 1:45 p.m. Mountain time
(3:45 p.m. Eastern time) today to discuss the first quarter
results. The call can be accessed at 1-800-387-6216 and will be
audio webcast live at www.enbridge.com/investor. A replay will be
available shortly thereafter at 1-800-408-3053 using the access
code 3009136#.
The interim financial statements and MD&A are available on our
website.
Enbridge Inc. 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, which
provides distribution services in the provinces of Ontario and
Quebec, and in New York State; and is developing a gas
distribution system for the Province of New Brunswick. The
Company employs approximately 4,000 people, primarily in Canada,
the United States and South America. Enbridge 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
When used in this news release, the words "anticipate", "expect",
"project", "believe", "estimate", "forecast" and similar
expressions are intended to identify forward-looking statements,
which include statements relating to pending and proposed
projects. Such statements are subject to risks, uncertainties and
assumptions pertaining to operating performance, regulatory
parameters, weather and economic conditions and, in the case of
pending and proposed projects, risks relating to design and
construction, regulatory processes, obtaining financing and
performance of other parties, including partners, contractors and
suppliers.
ENBRIDGE INC.HIGHLIGHTS(1)--------------------------------------------------------------------- Three months ended March 31,(unaudited; millions of Canadian dollars, ----------------------- except per share amounts) 2004 2003---------------------------------------------------------------------FINANCIAL Earnings Applicable to Common Shareholders Liquids Pipelines 52.6 46.4 Gas Pipelines 13.0 17.1 Sponsored Investments 15.4 7.8 Gas Distribution and Services 39.5 31.8 International 16.2 15.6 Corporate (24.3) (14.9)--------------------------------------------------------------------- 112.4 103.8------------------------------------------------------------------------------------------------------------------------------------------ Cash Provided By Operating Activities Earnings plus charges/(credits) not affecting cash 246.7 210.7 Changes in operating assets and liabilities (47.6) (179.1)--------------------------------------------------------------------- 199.1 31.6------------------------------------------------------------------------------------------------------------------------------------------ Common Share Dividends 78.7 70.7------------------------------------------------------------------------------------------------------------------------------------------ Earnings Per Common Share 0.67 0.63------------------------------------------------------------------------------------------------------------------------------------------ Dividends per Common Share 0.4575 0.4150------------------------------------------------------------------------------------------------------------------------------------------ Weighted Average Common Shares Outstanding (millions) 166.8 164.6------------------------------------------------------------------------------------------------------------------------------------------OPERATING Liquids Pipelines(2) Deliveries (thousands of barrels per day)(3) 2,102 2,160 Barrel miles (billions) 185 174 Average haul (miles) 967 893 Gas Distribution and Services(4) Volumes (billion cubic feet) 130 117 Number of active customers (thousands) 1,706 1,652 Degree day deficiency(5) Actual 1,023 1,076 Forecast based on normal weather 937 920------------------------------------------------------------------------------------------------------------------------------------------
1. Highlights of Gas Distribution and Services reflect the
results of Enbridge Gas Distribution and other gas distribution
operations on a one quarter lag basis for the three months ended
December 31, 2003 and 2002.
2. Liquids Pipelines operating highlights include the statistics
of the 12.2% owned Lakehead System and other wholly-owned liquid
pipeline operations.
3. The 2003 deliveries include volumes of 197.7 on the
Saskatchewan System, these volumes are not included in 2004 as
the Saskatchewan System was sold to Enbridge Income Fund on June
30, 2003.
4. Gas Distribution and Services volumes and the number of active
customers are derived from the aggregate system supply and direct
purchase gas supply arrangements.
5. Degree-day deficiency is a measure of coldness. 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 Toronto area.
ENBRIDGE INC.CONSOLIDATED STATEMENTS OF EARNINGS--------------------------------------------------------------------- Three months ended March 31,(unaudited; millions of Canadian dollars; ----------------------- except per share amounts) 2004 2003---------------------------------------------------------------------Revenues Gas sales 969.8 686.6 Transportation 409.0 311.6 Energy services 74.4 47.6--------------------------------------------------------------------- 1,453.2 1,045.8---------------------------------------------------------------------Expenses Gas costs 854.9 607.1 Operating and administrative 202.3 183.5 Depreciation 110.5 98.0--------------------------------------------------------------------- 1,167.7 888.6---------------------------------------------------------------------Operating Income 285.5 157.2Investment and Other Income 76.2 59.6Interest Expense (113.7) (101.1)--------------------------------------------------------------------- 248.0 115.7Income Taxes (126.9) (3.2)---------------------------------------------------------------------Earnings 121.1 112.5Preferred Security Distributions (7.0) (7.0)Preferred Share Dividends (1.7) (1.7)---------------------------------------------------------------------Earnings Applicable to Common Shareholders 112.4 103.8------------------------------------------------------------------------------------------------------------------------------------------Earnings Per Common Share 0.67 0.63------------------------------------------------------------------------------------------------------------------------------------------Diluted Earnings Per Common Share 0.67 0.63------------------------------------------------------------------------------------------------------------------------------------------See accompanying notes to the unaudited consolidated financialstatements.ENBRIDGE INC.CONSOLIDATED STATEMENTS OF RETAINED EARNINGS--------------------------------------------------------------------- Three months ended March 31, -----------------------(unaudited; millions of Canadian dollars) 2004 2003---------------------------------------------------------------------Retained Earnings at Beginning of Period 1,511.4 1,128.1Earnings Applicable to Common Shareholders 112.4 103.8Common Share Dividends (78.7) (70.7)---------------------------------------------------------------------Retained Earnings at End of Period 1,545.1 1,161.2------------------------------------------------------------------------------------------------------------------------------------------See accompanying notes to the unaudited consolidated financialstatements.ENBRIDGE INC.CONSOLIDATED STATEMENTS OF CASH FLOWS--------------------------------------------------------------------- Three months ended March 31, -----------------------(unaudited; millions of Canadian dollars) 2004 2003---------------------------------------------------------------------Cash Provided By Operating Activities Earnings 121.1 112.5 Charges/(credits) not affecting cash Depreciation 110.5 98.0 Equity earnings in excess of cash distributions (31.7) (7.1) Gain on reduction of ownership interest (2.5) - Future income taxes 49.0 8.0 Other 0.3 (0.7) Changes in operating assets and liabilities (47.6) (179.1)--------------------------------------------------------------------- 199.1 31.6---------------------------------------------------------------------Investing Activities Acquisitions (3.7) - Long-term investments (16.2) (23.9) Additions to property, plant and equipment (71.3) (85.4) Changes in construction payable (5.2) (2.6) Other - 0.5--------------------------------------------------------------------- (96.4) (111.4)---------------------------------------------------------------------Financing Activities Net change in short-term borrowings and short-term debt (165.5) 132.0 Long-term debt issues 300.0 150.0 Long-term debt repayments (150.0) (125.0) Non-recourse long-term debt repaid by joint ventures (14.2) - Non-controlling interests (0.6) (0.2) Common shares issued 19.5 4.1 Preferred security distributions (7.0) (7.0) Preferred share dividends (1.7) (1.7) Common share dividends (78.7) (70.7)--------------------------------------------------------------------- (98.2) 81.5---------------------------------------------------------------------Increase in Cash 4.5 1.7Cash at Beginning of Period 104.1 40.7---------------------------------------------------------------------Cash at End of Period 108.6 42.4------------------------------------------------------------------------------------------------------------------------------------------See accompanying notes to the unaudited consolidated financialstatements.ENBRIDGE INC.CONSOLIDATED STATEMENTS OF FINANCIAL POSITION--------------------------------------------------------------------- March 31, December 31,(millions of Canadian dollars) 2004 2003--------------------------------------------------------------------- (unaudited)AssetsCurrent Assets Cash 108.6 104.1 Accounts receivable and other 1,449.5 1,138.8 Gas in storage 653.0 809.8--------------------------------------------------------------------- 2,211.1 2,052.7Property, Plant and Equipment, net 8,522.0 8,530.9Long-Term Investments 2,446.4 2,390.9Receivable from Affiliate 176.3 169.8Deferred Amounts 514.6 486.5Future Income Taxes 126.1 192.5--------------------------------------------------------------------- 13,996.5 13,823.3------------------------------------------------------------------------------------------------------------------------------------------Liabilities and Shareholders' EquityCurrent Liabilities Short-term borrowings 502.1 649.6 Accounts payable and other 1,084.6 894.1 Interest payable 76.5 97.0 Current maturities and short-term debt 816.4 674.9 Current portion of non-recourse long-term debt 28.0 34.2--------------------------------------------------------------------- 2,507.6 2,349.8Long-Term Debt 5,200.3 5,243.1Non-Recourse Long-Term Debt 755.4 752.4Future Income Taxes 814.1 829.0Non-Controlling Interests 532.1 523.0--------------------------------------------------------------------- 9,809.5 9,697.3------------------------------------------------------------------------------------------------------------------------------------------Shareholders' Equity Share capital Preferred securities 532.1 532.4 Preferred shares 125.0 125.0 Common shares 2,256.8 2,238.0 Contributed surplus 2.6 1.9 Retained earnings 1,545.1 1,511.4 Foreign currency translation adjustment (138.9) (147.0) Reciprocal shareholding (135.7) (135.7)--------------------------------------------------------------------- 4,187.0 4,126.0--------------------------------------------------------------------- 13,996.5 13,823.3------------------------------------------------------------------------------------------------------------------------------------------See accompanying notes to the unaudited consolidated financialstatements.NOTE TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS1. SEGMENTED INFORMATIONThree months ended March 31, 2004--------------------------------------------------------------------- Gas(millions of Liquids Gas Sponsored Distribution Canadian dollars) Pipelines Pipelines Investments and Services---------------------------------------------------------------------Revenues 204.9 67.5 - 1,173.4Gas costs - - - (854.9)Operating and administrative (68.1) (12.8) - (107.9)Depreciation (35.9) (16.8) - (56.7)---------------------------------------------------------------------Operating income/(loss) 100.9 37.9 - 153.9Investment and other income 1.0 0.2 25.6 21.8Interest and preferred equity charges (25.0) (16.8) - (43.0)Income taxes (24.3) (8.3) (10.2) (93.2)---------------------------------------------------------------------Earnings/(loss) applicable to common shareholders 52.6 13.0 15.4 39.5--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- International Corporate Consolidated---------------------------------------------------------------------Revenues 7.4 - 1,453.2Gas costs - - (854.9)Operating and administrative (9.0) (4.5) (202.3)Depreciation (0.4) (0.7) (110.5)---------------------------------------------------------------------Operating income/(loss) (2.0) (5.2) 285.5Investment and other income 19.3 8.3 76.2Interest and preferred equity charges - (37.6) (122.4)Income taxes (1.1) 10.2 (126.9)---------------------------------------------------------------------Earnings/(loss) applicable to common shareholders 16.2 (24.3) 112.4------------------------------------------------------------------------------------------------------------------------------------------Three months ended March 31, 2003--------------------------------------------------------------------- Gas(millions of Liquids Gas Sponsored Distribution Canadian dollars) Pipelines Pipelines Investments and Services---------------------------------------------------------------------Revenues 194.9 - - 847.1Gas costs - - - (607.1)Operating and administrative (70.4) - - (101.3)Depreciation (37.6) - - (59.0)---------------------------------------------------------------------Operating income/(loss) 86.9 - - 79.7Investment and other income/(expense) 1.0 24.1 15.1 14.3Interest and preferred equity charges (25.7) - - (41.7)Income taxes (15.8) (7.0) (7.3) (20.5)---------------------------------------------------------------------Earnings/(loss) applicable to common shareholders 46.4 17.1 7.8 31.8--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- International Corporate Consolidated---------------------------------------------------------------------Revenues 3.8 - 1,045.8Gas costs - - (607.1)Operating and administrative (4.2) (7.6) (183.5)Depreciation (0.6) (0.8) (98.0)---------------------------------------------------------------------Operating income/(loss) (1.0) (8.4) 157.2Investment and other income/(expense) 16.4 (11.3) 59.6Interest and preferred equity charges (0.4) (42.0) (109.8)Income taxes 0.6 46.8 (3.2)---------------------------------------------------------------------Earnings/(loss) applicable to common shareholders 15.6 (14.9) 103.8------------------------------------------------------------------------------------------------------------------------------------------
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