8-K

ENBRIDGE INC 8-K Report (Nov 4, 2010)

Filed November 4, 2010For Securities:ENBENBMFEBBGFEBRGFEBRZFENBGFENBRFENFFFEBGEFENBFFENBHFENBNFENBOFENBSFEBBNFENNPF

Summary

Enbridge Inc. (ENB) filed a Form 6-K on November 3, 2010, which incorporates supplemental United States GAAP disclosures as of June 30, 2010. The report provides detailed information on the company's financial position, including accounts receivable, inventory, and accounts payable, along with disclosures on earnings per share calculation and risk management strategies. Key areas highlighted include Enbridge's comprehensive approach to managing market price risk, encompassing foreign exchange, interest rate, and commodity price risks through various hedging instruments and internal policies. The filing also details the company's liquidity and credit risk management, alongside the fair value of its financial instruments, including a breakdown of derivative instruments by fair value hierarchy. Investors can gain insights into the company's financial health and its strategies for mitigating financial risks.

Key Highlights

  • 1Supplemental United States GAAP disclosures provided as of June 30, 2010.
  • 2Detailed breakdown of Accounts Receivable, Inventory, and Accounts Payable figures in millions of Canadian dollars.
  • 3Explanation of Earnings Per Share calculation, including the impact of dilutive options and Enbridge's investment in Noverco.
  • 4Comprehensive risk management section outlining strategies for foreign exchange, interest rate, and commodity price risks.
  • 5Disclosure of the company's use of derivative instruments for hedging purposes, with a breakdown by type and fair value hierarchy.
  • 6Information on liquidity risk management, emphasizing sources of funding and credit facilities.
  • 7Details on credit risk management, including concentrations and mitigation strategies.
  • 8Fair value of financial instruments, including derivative instruments, categorized by the fair value hierarchy (Level 1, 2, 3).

Frequently Asked Questions

This Form 6-K filing primarily serves to provide supplemental United States GAAP disclosures for Enbridge Inc. as of June 30, 2010. It aims to offer additional financial information to investors that may be required under U.S. GAAP, supplementing the company's regular financial reporting.

Enbridge employs a formal risk management framework to mitigate market price risks, including foreign exchange, interest rates, and commodity prices. This involves using financial instruments like forward contracts and swaps, adhering to formal policies, and utilizing metrics like Earnings at Risk (EaR) to monitor and control exposures within defined limits.

Enbridge uses derivative instruments for cash flow hedges, net investment hedges, and non-qualifying purposes. These include foreign exchange contracts, interest rate contracts, and commodity contracts. The company values these instruments using a three-level fair value hierarchy based on the observability of inputs: Level 1 (quoted prices), Level 2 (observable inputs), and Level 3 (unobservable inputs).

Enbridge manages liquidity through a combination of cash generated from operations, commercial paper issuances, and draws under committed credit facilities. The company maintains shelf prospectuses for access to public capital markets and ensures sufficient liquidity through its credit facilities to fund anticipated requirements for a year without needing to access capital markets, expecting to remain in compliance with all facility terms.