CALGARY, ALBERTA--(November 8, 2001) Enbridge Inc. today announced
earnings applicable to common shareholders for the nine months
ended September 30, 2001, of $418.7 million, or $2.66 per share,
compared with $322.1 million, or $2.10 per share, for the same
period in 2000. Earnings reflect strong operating results from
the Energy Distribution business, an improved contribution from
International activities, and the positive impacts of provincial
income tax rate reductions. Corporate business activities also
contributed to the increase in earnings.
Earnings for the three months ended September 30, 2001, were $64.8
million, or $0.41 per share, compared with $45.8 million, or $0.28
per share, for the three months ended September 30, 2000. The
increase in third quarter earnings results from the triggering of
Phase III of the Terrace expansion of the Enbridge System and
contributions from corporate business activities.
"Our financial results continue to track our expectations and our
goal of annual double-digit earnings per share growth," said
Patrick D. Daniel, President & Chief Executive Officer. "I am
particularly pleased that all five operating divisions recorded
growth in earnings for the nine months ended September 30."
Mr. Daniel also commented on the Company's longer term outlook.
"Our recent Enbridge Day investment community conference outlined
our strategies and growth prospects. We are in the enviable
position of having significant opportunities for profitable growth
within our core businesses, including expansion of our liquids
pipelines and gas distribution franchise. This core growth will
be supplemented with acquisitions that complement our existing
businesses. We will also utilize the Enbridge Energy Partnership
vehicle to acquire energy infrastructure assets to expand our
scale and scope in the United States. These and other
initiatives should allow us to continue to deliver superior
returns to shareholders."
Enbridge Inc. listed its common shares on the New York Stock
Exchange on October 30. The NYSE listing supports the Company's
objective to increase its North American footprint and expand its
U.S. shareholder base. Enbridge's NYSE trading symbol is ENB, the
same as the Company's Toronto Stock Exchange symbol.
The Enbridge Board of Directors today also declared quarterly
dividends of $0.35 per common share and $0.34375 per Series A
preferred share. Both dividends are payable on December 1, 2001,
to shareholders of record on November 23, 2001.
BUSINESS OUTLOOK
The outlook for Enbridge continues to be positive, reflecting both
the expansion of existing operations and new business
opportunities. The acquisition of Midcoast Energy and the
Enbridge Energy Partnership growth strategy are expected to
increase earnings. The construction of Terrace Phase II,
notification from shippers for construction of Terrace Phase III,
and additional shippers on the Enbridge Athabasca System also will
drive earnings growth. The gas distribution franchise is growing
through the addition of greater than 50,000 new customers per
year.
Energy Transportation South
In October, Enbridge announced that it will purchase, for US$50
million, natural gas gathering, treating and transmission assets
in south Texas from a unit of Williams. Enbridge will acquire 792
kilometres (492 miles) of gas transmission pipelines regulated by
the Federal Energy Regulatory Commission and 480 kilometres (298
miles) of non-FERC regulated assets including gathering systems
and pipeline laterals. Closing of the acquisition is subject to
regulatory approvals, including approval by FERC to remove the gas
transmission pipelines from jurisdiction under the Natural Gas
Act. The acquisition is the first to be completed by Energy
Transportation South, created as a result of the purchase of
Midcoast Energy of Houston in the second quarter of 2001.
Also in October, the Enbridge Energy Partnership announced that it
had signed a definitive purchase agreement to acquire natural gas
gathering, treating, processing and transmission assets in east
Texas (the East Texas System) for cash consideration of US$230.5
million from Koch Midstream Services Company, LLC. The East Texas
System gathers approximately 400 million cubic feet per day of
natural gas for delivery into the Carthage, Texas hub, one of the
United States' most active natural gas marketing and trading
locations.
Energy Distribution
Enbridge Consumers Gas (ECG) has resolved all issues in its 2001
rates case through negotiation rather than the formal hearing
process. This signified a major achievement towards ECG's goal of
improved stakeholder relations. The rates, approved by the
Ontario Energy Board, include the gas volume forecast, capital
expenditures and the base for operating and maintenance expenses
under performance-based regulation. The 2002 rates application
was filed with the OEB in September and included a request for an
increase in the rate of return on deemed common equity.
Preliminary discussions with intervenors suggest that the return
issue will require a hearing, but all other issues potentially
could be settled through negotiation.
Enbridge Atlantic Energy Services Inc. was formed in the third
quarter to sell natural gas commodity contracts to customers in
New Brunswick. It will offer residential, commercial and
industrial customers both variable-rate and fixed-rate, one-year
and two-year contracts. The application for a gas commodity
contract will also allow customers to choose to have Enbridge
Atlantic apply on their behalf for a street service permit from
Enbridge Gas New Brunswick, which provides natural gas
distribution services but cannot sell natural gas directly to
customers.
Emerging Energy Technologies
Phase I of the SunBridge wind power project commenced generation
of renewable energy to the SaskPower grid in the third quarter.
Six turbines have been constructed and three are connected to the
provincial power grid. Construction of 11 remaining turbines is
scheduled to be complete prior to year-end. SaskPower will
purchase the electricity produced at the facility to provide power
for federal government buildings in Saskatchewan and other
customers. The project is expected to produce 11 megawatts of
power from 17 turbines by June 2002, increasing Canada's total
wind-generated power output by 10%.
FINANCIAL RESULTS
Energy Transportation North
Earnings for the nine months ended September 30, 2001, were $135.9
million, compared with $122.2 million for the first nine months of
2000. The higher earnings are primarily the result of increased
contributions from Alliance, the Enbridge Athabasca System and the
Enbridge System, combined with the positive impact of tax rate
reductions. Losses incurred on merchant capacity commitments on
the Alliance and Vector pipelines are smaller than the accrual
recorded in 2000 for such losses. These increases were partially
offset by lower earnings from Vector Pipeline and a loss from the
Aux Sable facilities.
Alliance's increased contribution reflects earnings on a higher
rate base because construction of the pipeline was complete in
late 2000. Last year, Alliance earnings represented an allowance
for equity funds during construction. Higher earnings from the
Enbridge Athabasca System resulted from increases in the
investment base for both tankage and terminal facilities.
Increased Enbridge System earnings from the triggering of Phase
III of the Terrace expansion were partially offset by increased
oil losses. In the third quarter, the Company recorded an
adjustment to oil inventory due to shippers of approximately $3
million, after tax. This was the result of refinements in the oil
loss estimation process, as well as improvements in the accuracy
of measuring oil losses while developing new software
applications. Aux Sable operated at breakeven in the third
quarter which reflects the improved differential between natural
gas and natural gas liquids prices. Vector Pipeline earnings
were affected by higher depreciation and interest expense.
Results for the three months ended September 30, 2001, were higher
by $11.5 million than the same period last year. This was
primarily due to the smaller charge for losses related to merchant
capacity commitments and higher earnings from the Enbridge System
due to the triggering of Terrace Phase III, partially offset by
increased oil losses.
Energy Transportation South
Nine-month earnings were $27.8 million, $8.4 million higher than
the same period last year. The increase was primarily the result
of earnings from Midcoast Energy, acquired in May 2001, and a
dilution gain on the Company's investment in the Enbridge Energy
Partnership. Earnings from the U.S. Liquids System (formerly the
Lakehead System) were lower during the period due to reduced
throughput, an adjustment to oil inventory due to shippers and
one-time costs associated with relocating the Enbridge Energy
Partnership office to Houston.
Third quarter results from Energy Transportation South were $2.1
million less than last year. The U.S. Liquids System experienced
lower throughput and increased oil losses. Midcoast Energy
earnings were affected by a mark-to-market loss on an interest
rate swap that does not qualify for hedge accounting treatment.
Energy Distribution
Earnings from Energy Distribution increased by $52.4 million to
$217.6 million in the first nine months of 2001. The results
include contributions from Enbridge Consumers Gas for the
nine-month period ended June 2001, and income from the Company's
32% investment in Noverco. Due to the seasonal nature of energy
distribution operations, quarterly earnings are not indicative of
full year results.
The increased earnings from Enbridge Consumers Gas reflect the
decrease in provincial income tax rates, earnings on a higher rate
base, higher distribution volumes resulting from colder weather
and cost savings achieved under performance-based regulation. The
weather was 6% colder compared with the same period last year and
was only slightly warmer than normal weather. The increase in
third quarter results reflects continued achievement of operating
cost savings. Enbridge Consumers Gas is adding customers at
better than expected rates. Results from other Energy Distribution
operations approximated last year and the third quarter of 2000.
Energy Services
Earnings from Energy Services were $45.5 million for the nine
months ended September 30, 2001, an increase of $11.4 million over
the same period in 2000. This increase is primarily the result of
the positive impact of tax rate reductions that were greater in
2001 than in 2000. Growth in the water heater rental business and
the merchandise finance program has been offset with declining
margins in other business lines, which has affected both the
nine-month and third quarter results.
International
Earnings increased by $7.6 million to $25.1 million in the first
nine months of 2001. The increase was partially due to the
additional OCENSA and CITCOL ownership interests acquired in the
third quarter of 2000. In addition, higher fees were earned to
operate the Jose Terminal, resulting from the new operating
contract that was finalized in the second quarter of 2001.
Results for the third quarter of 2001 were consistent with the
same period in 2000.
Corporate
Corporate costs totalled $33.2 million for the first nine months
of 2001, compared with $36.3 million for the same period of 2000.
Higher financing costs associated with non-regulated investments
made late in 2000 and the acquisition of Midcoast Energy in May
were incurred during the period. This increase was more than
offset by improved results from corporate business activities and
the positive impact of lower income tax rates.
LIQUIDITY AND CAPITAL RESOURCES
Enbridge expects that cash from operations, commercial paper
issuances, available capacity under credit facilities, and the
issuance of new long-term debt, securities, or equity will be
sufficient to satisfy its liquidity requirements. At September
30, 2001, the Company had approximately $1.25 billion available
through its credit facilities and $1 billion available under a
current shelf prospectus of medium term notes.
Capital expenditures during 2001 have related primarily to Terrace
Phase II, customer growth in the gas distribution franchise area
and maintenance capital. Terrace Phase II construction commenced
during 2001 and has a projected capital cost of $120 million.
While Terrace Phase III has received industry approval,
construction is not expected to commence until 2002. The capital
cost of Phase III is approximately $450 million, of which $135
million is expected to be spent in Canada and the balance in the
U.S. through Enbridge Energy Partners.
The level of long-term investment activity has been reduced
significantly in 2001 as the construction of the Vector and
Alliance pipelines was completed late in the fourth quarter of
2000. The acquisition of Midcoast was financed through existing
commercial paper and credit facilities.
Enbridge will hold a conference call at 2:15 p.m. Mountain time
(4:15 p.m. Eastern time) today to discuss nine-month 2001 results.
The call will be broadcast live on the Internet at
www.enbridge.com/investor. A replay will be available shortly
after the live event.
Enbridge Inc. is a leader in energy transportation, distribution
and services in North America and internationally. As a
transporter of energy, Enbridge operates, in Canada and the U.S.,
the world's longest crude oil and liquids transportation system.
The Company also is involved in international energy projects and
has 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 Ontario, Quebec and New
York State; and is developing a gas distribution system for the
province of New Brunswick. In addition, Enbridge provides retail
energy products and services to a growing number of Canadian and
U.S. markets. The Company employs approximately 6,000 people,
primarily in Canada, the U.S. and South America. Enbridge common
shares trade on The Toronto Stock Exchange in Canada and on The
New York Stock Exchange in the U.S., under the symbol ENB.
Information about Enbridge is available on the Company's web site
at www.enbridge.com.
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 certain 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 Nine months ended September 30, September 30,(unaudited; millions of dollars,------------------------------------- except per share amounts) 2001 2000 2001 2000---------------------------------------------------------------------FINANCIAL Earnings Applicable to Common Shareholders Energy Transportation North 46.1 34.6 135.9 122.2 Energy Transportation South 4.4 6.5 27.8 19.4 Energy Distribution (1.3) (0.7) 217.6 165.2 Energy Services 10.5 9.7 45.5 34.1 International 7.4 7.2 25.1 17.5 Corporate (2.3) (11.5) (33.2) (36.3)--------------------------------------------------------------------- 64.8 45.8 418.7 322.1------------------------------------------------------------------------------------------------------------------------------------------ Operating Revenue Energy Transportation North 179.0 177.5 528.2 527.3 Energy Transportation South 239.6 8.7 457.5 23.8 Energy Distribution 540.3 352.5 2,333.9 1,597.7 Energy Services 116.5 96.6 333.9 277.4 International 7.3 4.8 20.8 13.3 Corporate and Other 1.3 - 3.5 3.3--------------------------------------------------------------------- 1,084.0 640.1 3,677.8 2,442.8------------------------------------------------------------------------------------------------------------------------------------------ Cash Provided By Operating Activities Earnings plus charges/ (credits) not affecting cash 173.7 117.6 639.1 538.4 Changes in operating assets and liabilities 152.7 (66.8) (107.0) (18.2)--------------------------------------------------------------------- 326.4 50.8 532.1 520.2------------------------------------------------------------------------------------------------------------------------------------------ Common Share Dividends 57.0 53.5 170.5 149.9 Per Common Share Amounts Earnings 0.41 0.28 2.66 2.10 Dividends 0.35 0.3225 1.05 0.9475 Weighted Average Common Shares Outstanding (millions) 157.4 153.6OPERATING Energy Transportation (2) Deliveries (thousands of barrels per day) 2,064 2,089 2,174 2,155 Barrel miles (billions) 161 201 521 561 Average haul (miles) 848 1,046 878 950 Energy Distribution (3) Volumes (billion cubic feet) 85 89 382 372 Number of active customers (thousands) 1,566 1,514 1,566 1,514 Degree day deficiency (4) Actual 433 516 3,658 3,451 Forecast based on normal weather 524 550 3,705 3,806---------------------------------------------------------------------(1) Highlights of Energy Distribution reflect the results of Enbridge Consumers Gas and other gas distribution operations on a quarter lag basis for the three and nine months ended June 30, 2001 and 2000.(2) Energy Transportation operating highlights includes the statistics of the 14.5% owned U.S. Liquids System and other wholly-owned liquid pipeline operations.(3) Energy Distribution volumes and the number of active customers are derived from the aggregate of buy/sell and transportation service supply arrangements.(4) 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 STATEMENT OF EARNINGS--------------------------------------------------------------------- Three months ended Nine months ended September 30, September 30,(unaudited; millions of dollars,------------------------------------- except per share amounts) 2001 2000 2001 2000---------------------------------------------------------------------Revenues Gas sales 658.1 262.1 2,326.4 1,267.3 Transportation 276.4 257.0 906.7 817.3 Energy services 149.5 121.0 444.7 358.2--------------------------------------------------------------------- 1,084.0 640.1 3,677.8 2,442.8---------------------------------------------------------------------Expenses Gas costs 562.8 187.7 1,924.1 867.8 Operating and administrative 259.3 224.2 731.4 645.3 Depreciation 118.2 102.1 343.5 334.2--------------------------------------------------------------------- 940.3 514.0 2,999.0 1,847.3---------------------------------------------------------------------Operating Income 143.7 126.1 678.8 595.5Investment and Other Income 57.3 42.9 180.8 155.7Interest Expense (121.9) (107.1) (342.0) (311.1)--------------------------------------------------------------------- 79.1 61.9 517.6 440.1Income Taxes (8.0) (10.6) (80.5) (101.4)--------------------------------------------------------------------- 71.1 51.3 437.1 338.7Preferred Security Distributions (4.5) (3.8) (13.2) (11.5)Preferred Share Dividends (1.8) (1.7) (5.2) (5.1)---------------------------------------------------------------------Earnings Applicable to Common Shareholders 64.8 45.8 418.7 322.1------------------------------------------------------------------------------------------------------------------------------------------Earnings Per Common Share 0.41 0.28 2.66 2.10Diluted Earnings Per Common Share 0.41 0.28 2.64 2.09------------------------------------------------------------------------------------------------------------------------------------------Weighted Average Common Shares Outstanding (millions) 157.4 153.6------------------------------------------------------------------------------------------------------------------------------------------See accompanying notes to the consolidated financial statements.ENBRIDGE INC.CONSOLIDATED STATEMENT OF RETAINED EARNINGS--------------------------------------------------------------------- Nine months ended September 30, -------------------(unaudited; millions of dollars) 2001 2000---------------------------------------------------------------------Retained Earnings at Beginning of Period 581.3 503.1Earnings Applicable to Common Shareholders 418.7 322.1Common Share Dividends (170.5) (149.9)Effect of Change in Accounting for Income Taxes - (112.0)---------------------------------------------------------------------Retained Earnings at End of Period 829.5 563.3------------------------------------------------------------------------------------------------------------------------------------------See accompanying notes to the consolidated financial statements.ENBRIDGE INC.CONSOLIDATED STATEMENT OF CASH FLOWS--------------------------------------------------------------------- Three months ended Nine months ended September 30, September 30, -------------------------------------(unaudited; millions of dollars) 2001 2000 2001 2000---------------------------------------------------------------------Cash Provided By Operating Activities Earnings 71.1 51.3 437.1 338.7 Charges/(Credits) not affecting cash Depreciation 118.2 102.1 343.5 334.2 Equity earnings in excess of cash distributions 11.4 (6.2) 0.3 (40.3) Gain on reduction of ownership interest - - (11.5) - Future income taxes (29.3) (27.2) (105.1) (80.3) Other 2.3 (2.4) (25.2) (13.9) Changes in operating assets and liabilities 152.7 (66.8) (107.0) (18.2)--------------------------------------------------------------------- 326.4 50.8 532.1 520.2---------------------------------------------------------------------Investing Activities Acquisition of Midcoast Energy Resources, Inc. - - (561.8) - Long-term investments (0.6) (256.3) (36.4) (475.1) Additions to property, plant and equipment (173.0) (84.4) (388.7) (226.1) Changes in construction payable 7.1 14.9 (26.8) (14.3) Other 0.7 3.1 (3.1) 2.2--------------------------------------------------------------------- (165.8) (322.7) (1,016.8) (713.3)---------------------------------------------------------------------Financing Activities Variable rate financing, net 29.2 161.2 684.1 (561.4) Fixed rate debt issued - 200.0 505.6 841.2 Fixed rate debt repayments (207.5) (6.2) (548.8) (107.6) Non-controlling interests (1.3) (1.2) (3.0) 16.9 Common shares issued 2.5 5.5 19.7 168.3 Preferred security distributions (4.5) (3.8) (13.2) (11.5) Preferred share dividends (1.8) (1.7) (5.2) (5.1) Common share dividends (57.0) (53.5) (170.5) (149.9)--------------------------------------------------------------------- (240.4) 300.3 468.7 190.9---------------------------------------------------------------------Increase/(Decrease) in Cash (79.8) 28.4 (16.0) (2.2)Cash at Beginning of Period 130.8 23.0 67.0 53.6---------------------------------------------------------------------Cash at End of Period 51.0 51.4 51.0 51.4------------------------------------------------------------------------------------------------------------------------------------------See accompanying notes to the consolidated financial statements.ENBRIDGE INC.CONSOLIDATED STATEMENT OF FINANCIAL POSITION--------------------------------------------------------------------- September 30, December 31,(millions of dollars) 2001 2000--------------------------------------------------------------------- (unaudited)Assets Cash 51.0 67.0 Accounts receivable and other 1,175.3 747.5 Gas in storage 644.0 519.8--------------------------------------------------------------------- 1,870.3 1,334.3 Property, plant and equipment, net 7,884.5 7,160.0 Long-term investments 1,770.6 1,689.5 Deferred charges and other assets 501.8 384.4 Goodwill 282.9 ---------------------------------------------------------------------- 12,310.1 10,568.2------------------------------------------------------------------------------------------------------------------------------------------Liabilities and Shareholders' Equity Short-term borrowings 312.0 261.3 Accounts payable and other 947.7 420.7 Interest payable 96.2 109.3 Current portion of long-term liabilities 224.0 468.6--------------------------------------------------------------------- 1,579.9 1,259.9 Long-term debt 6,855.1 5,592.7 Deferred credits 42.3 69.2 Future income taxes 664.8 756.6 Non-controlling interests 127.4 126.4--------------------------------------------------------------------- 9,269.5 7,804.8Shareholders' equity Share capital Preferred securities 339.9 340.4 Preferred shares 125.0 125.0 Common shares 1,872.3 1,852.6 Retained earnings 829.5 581.3 Foreign currency translation adjustment 2.1 (7.7) Reciprocal shareholding (128.2) (128.2)--------------------------------------------------------------------- 3,040.6 2,763.4--------------------------------------------------------------------- 12,310.1 10,568.2------------------------------------------------------------------------------------------------------------------------------------------See accompanying notes to the consolidated financial statements.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles and should be read in conjunction with the consolidated
financial statements and notes thereto included in Enbridge Inc.'s
2000 Annual Report. These interim financial statements are
prepared on a basis consistent with those included in the 2000
Annual Report and follow the same accounting policies and methods
of application.
Earnings for interim periods may not be indicative of results for
the fiscal year due to weather variations and other factors.
Certain reclassifications have been made to the prior period
financial statements to conform to the current year presentation.
1. SEGMENTED INFORMATION(unaudited; millions of dollars)Three months ended September 30, 2001--------------------------------------------------------------------- Energy Energy Inter- Transportation Distri- Energy nat- Corporate Consol- North South bution Services ional and Other idated---------------------------------------------------------------------Revenues 179.0 239.6 540.3 116.5 7.3 1.3 1,084.0Gas costs - 192.9 359.3 10.6 - - 562.8Operating and administration 71.1 21.2 99.5 59.7 4.4 3.4 259.3Depreciation 34.1 9.8 48.0 24.8 0.5 1.0 118.2 -------------------------------------------------------Operating income/(loss) 73.8 15.7 33.5 21.4 2.4 (3.1) 143.7Investment and other income 14.3 7.0 10.6 1.3 4.3 19.8 57.3Interest and preferred equity charges (26.9) (13.2) (40.3) (5.5) - (42.3) (128.2)Income taxes (15.1) (5.1) (5.1) (6.7) 0.7 23.3 (8.0) -------------------------------------------------------Earnings/(loss) applicable to common shareholders 46.1 4.4 (1.3) 10.5 7.4 (2.3) 64.8 ------------------------------------------------------- -------------------------------------------------------Three months ended September 30, 2001--------------------------------------------------------------------- Energy Energy Inter- Transportation Distri- Energy nat- Corporate Consol- North South bution Services ional and Other idated---------------------------------------------------------------------Revenues 177.5 8.7 352.5 96.6 4.8 - 640.1Gas costs - - 185.8 1.9 - - 187.7Operating and administration 59.1 4.6 87.8 64.8 3.8 4.1 224.2Depreciation 38.9 1.8 53.2 7.0 - 1.2 102.1 -------------------------------------------------------Operating income/(loss) 79.5 2.3 25.7 22.9 1.0 (5.3) 126.1Investment and other income (0.9) 8.4 15.4 0.1 5.7 14.2 42.9Interest and preferred equity charges (27.1) (0.4) (40.6) (7.0) - (37.5) (112.6)Income taxes (16.9) (3.8) (1.2) (6.3) 0.5 17.1 (10.6) -------------------------------------------------------Earnings/ (loss) applicable to common shareholders 34.6 6.5 (0.7) 9.7 7.2 (11.5) 45.8 ------------------------------------------------------- -------------------------------------------------------Nine months ended September 30, 2001--------------------------------------------------------------------- Energy Energy Inter- Transportation Distri- Energy nat- Corporate Consol- North South bution Services ional and Other idated---------------------------------------------------------------------Revenues 528.2 457.5 2,333.9 333.9 20.8 3.5 3,677.8Gas costs - 362.8 1,534.0 27.3 - - 1,924.1Operating and administration 199.4 44.4 283.0 178.0 14.0 12.6 731.4Depreciation 101.0 19.7 144.5 74.3 1.1 2.9 343.5 -------------------------------------------------------Operating income/(loss) 227.8 30.6 372.4 54.3 5.7 (12.0) 678.8Investment and other income 37.0 33.3 39.2 9.4 19.3 42.6 180.8Interest and preferred equity charges (79.1) (18.4) (120.4) (23.7) (0.1) (118.7) (360.4)Income taxes (49.8) (17.7) (73.6) 5.5 0.2 54.9 (80.5) -------------------------------------------------------Earnings/(loss) applicable to common shareholders 135.9 27.8 217.6 45.5 25.1 (33.2) 418.7 ------------------------------------------------------- -------------------------------------------------------Nine months ended September 30, 2000--------------------------------------------------------------------- Energy Energy Inter- Transportation Distri- Energy nat- Corporate Consol- North South bution Services ional and Other idated---------------------------------------------------------------------Revenues 527.3 23.8 1,597.7 277.4 13.3 3.3 2,442.8Gas costs - - 862.3 5.5 - - 867.8Operating and administration 174.9 13.2 262.0 168.5 12.1 14.6 645.3Depreciation 117.3 5.5 156.9 48.3 - 6.2 334.2 -------------------------------------------------------Operating income/(loss) 235.1 5.1 316.5 55.1 1.2 (17.5) 595.5Investment and other income 21.5 27.0 59.3 4.9 15.2 27.8 155.7Interest and preferred equity charges (80.5) (1.4) (122.6) (21.1) - (102.1) (327.7)Income taxes (53.9) (11.3) (88.0) (4.8) 1.1 55.5 (101.4) -------------------------------------------------------Earnings/(loss) applicable to common shareholders 122.2 19.4 165.2 34.1 17.5 (36.3) 322.1 ------------------------------------------------------- -------------------------------------------------------
2. ACQUISITION
(unaudited)
On May 11, 2001, the Company acquired all the outstanding shares
of Midcoast Energy Resources, Inc., a Houston-based energy
company, for cash consideration of $561.8 million and the
assumption of long-term debt. The acquisition has been accounted
for using the purchase method with the results of operations
included in the consolidated financial statements from the date of
acquisition. Goodwill is being amortized over 30 years.
Fair Value of Assets Acquired: ($ millions) ------------- Property, plant and equipment $ 677.3 Working capital 9.9 Goodwill 281.8 Future income taxes (39.0) Other non-current assets 37.8 ------------- 967.8 -------------Purchase Price: Cash 554.5 Long-term debt assumed 406.0 Transaction costs 7.3 ------------- 967.8 ----------------------------------------------------------------------------------Supplementary Financial Information Number of Shares ------------------Common Shares - issued and outstanding 162,833,586(voting equity shares)Preference Shares, Series A 5,000,000(non-voting equity shares)Total vested and exercisable stock options 2,265,027
The Company has a Shareholder Rights plan designed to encourage
the fair treatment of shareholders in connection with any takeover
offer for the Company. Rights issued under the plan become
exercisable when a person, and any related parties, acquires or
announces its intention to acquire 20% or more of the Company's
outstanding common shares without complying with certain
provisions set out in the plan or without approval of the Board of
Directors of the Company. Should such an acquisition or
announcement occur, each rights holder, other than the acquiring
person and related parties, will have the right to purchase common
shares of the Company at a 50% discount to the market price at
that time.
Supplementary information as at October 26, 2001.