8-K

ENBRIDGE INC 8-K Report (May 11, 2011)

Filed May 11, 2011For Securities:ENBENBMFEBBGFEBRGFEBRZFENBGFENBRFENFFFEBGEFENBFFENBHFENBNFENBOFENBSFEBBNFENNPF

Summary

Enbridge Inc. reported its first quarter 2011 financial results, demonstrating solid performance across its diverse energy infrastructure segments. The company achieved adjusted earnings of $334 million, or $0.89 per common share, a 5% increase compared to the prior year, and total earnings of $393 million, a 15% increase. This performance positions Enbridge favorably to meet its full-year adjusted earnings guidance. A significant development highlighted in the report is the agreement reached with shippers on a 10-year Competitive Toll Settlement (CTS) for the Canadian Mainline system. This agreement is expected to ensure long-term stability and competitiveness for shippers, reinforcing Enbridge's mainline system's position and supporting its outlook for sustained earnings growth. The company also announced several growth initiatives, including investments in renewable power, U.S. natural gas gathering and processing, and gas distribution, signaling continued strategic expansion. Furthermore, Enbridge announced a proposed two-for-one stock split, subject to shareholder approval, which aims to enhance liquidity and accessibility for investors. The company also reiterated its commitment to returning value to shareholders through a growing dividend, which saw a 15% increase in the first quarter, reflecting strong past performance and confidence in future earnings and cash flow growth.

Key Highlights

  • 1Reported Q1 2011 adjusted earnings of $334 million ($0.89 per share), a 5% increase year-over-year.
  • 2Achieved total earnings of $393 million for Q1 2011, a 15% increase year-over-year.
  • 3Reached a 10-year Competitive Toll Settlement (CTS) with shippers for the Canadian Mainline system, aimed at ensuring long-term stability and competitiveness.
  • 4Initiated $600 million in new investments across renewable power, U.S. natural gas, and gas distribution segments.
  • 5Announced a proposed two-for-one stock split, subject to shareholder and regulatory approval.
  • 6Declared a quarterly dividend of $0.49 per common share, representing a 15% increase over the previous year's dividend.
  • 7Recognized for sustainability, being named to the Global 100 Most Sustainable Corporations list and Canada's Greenest Employers.

Frequently Asked Questions

The 10-year Competitive Toll Settlement (CTS) with shippers is a significant development for Enbridge's Canadian Mainline system. It aims to provide a stable and competitive toll for shippers, thereby reinforcing the mainline's competitive position, preserving throughput, and potentially enabling market extensions. This agreement is expected to contribute to the long-term sustainability of earnings from this key asset.

Enbridge is actively pursuing growth through various initiatives. These include investments in renewable energy projects (solar and wind), expansion of U.S. natural gas gathering and processing facilities, increased investment in Quebec gas distribution, and expansion of unregulated natural gas storage capacity in Ontario. Additionally, Enbridge Energy Partners, L.P. announced an expansion of its East Texas system.

Enbridge is on track to achieve its full-year adjusted earnings guidance of $2.75 to $2.95 per share. The company expects future dividend growth to continue, benefiting from strong growth in earnings and cash flow per share.

The report acknowledges ongoing clean-up and remediation efforts related to past crude oil releases from Enbridge Energy Partners, L.P. (EEP)'s Line 6B and Line 6A. EEP continues to make progress on remediation for Line 6B, with an estimated cost of US$550 million (net to Enbridge after-tax). For Line 6A, remediation is substantially complete with an estimated cost of US$45 million (net to Enbridge after-tax, before insurance recoveries). Insurance is expected to cover substantially all costs related to these releases, excluding fines and penalties.