8-K

ENBRIDGE INC 8-K Report (May 8, 2013)

Filed May 8, 2013For Securities:ENBENBMFEBBGFEBRGFEBRZFENBGFENBRFENFFFEBGEFENBFFENBHFENBNFENBOFENBSFEBBNFENNPF

Summary

Enbridge Inc. (ENB) filed an 8-K report on May 8, 2013, detailing its first quarter 2013 financial results and operational updates. The company reported adjusted earnings of $488 million, or $0.62 per common share, a notable increase from the previous year, driven by strong performance in its Liquids Pipelines segment and contributions from new assets. Key developments include significant capital investments in growth projects, particularly in expanding crude oil and natural gas infrastructure to address market access challenges. Enbridge also announced an increased cost estimate for remediation efforts related to the Line 6B crude oil release and continued to execute its financing plan through the issuance of common and preference shares. The company maintained its full-year adjusted earnings guidance, signaling confidence in its ongoing project execution and future growth prospects.

Key Highlights

  • 1Enbridge reported first quarter 2013 adjusted earnings of $488 million or $0.62 per common share, up from $373 million or $0.49 per share in Q1 2012.
  • 2The company increased its cost estimate for Line 6B remediation efforts by $175 million ($24 million after-tax attributable to Enbridge).
  • 3Enbridge continued to execute its financing strategy, issuing $600 million of Common Shares and US$400 million of Cumulative Redeemable Preference Shares.
  • 4Significant new project investments were announced, including a $1.2 billion investment in preferred units of Enbridge Energy Partners, L.P. (EEP), a $0.3 billion project for Surmont Phase 2 terminal services, and a $0.3 billion investment in the Blackspring Ridge Wind Project.
  • 5The company announced a $0.2 billion project to provide pipeline and terminaling services for the Athabasca Oil Corporation Hangingstone Oil Sands Project.
  • 6Enbridge announced principal terms for a joint development with Energy Transfer Partners, L.P. to provide access to the eastern Gulf Coast refinery market.
  • 7A new Senior Vice President of Enterprise Safety and Operational Reliability was appointed to centralize safety and environmental protection efforts.

Frequently Asked Questions

Enbridge reported first quarter 2013 adjusted earnings of $488 million ($0.62 per common share), an increase from $373 million ($0.49 per common share) in the first quarter of 2012. This improvement was driven by higher throughput and tolls in the Liquids Pipelines segment and contributions from new assets. Reported earnings attributable to common shareholders decreased to $250 million ($0.32 per share) from $261 million ($0.34 per share) in Q1 2012, primarily due to changes in unrealized derivative fair value gains/losses and a $175 million accrual for Line 6B remediation.

Enbridge announced several key growth initiatives, including a $1.2 billion investment in preferred units of Enbridge Energy Partners, L.P. (EEP) to fund its growth program. They also secured a $0.3 billion project to provide terminal services for the Surmont Phase 2 project, a 50% interest in the $0.3 billion Blackspring Ridge Wind Project, and a $0.2 billion project for pipeline and terminaling services to the Athabasca Oil Corporation Hangingstone Oil Sands Project. Additionally, Enbridge is jointly developing a project with Energy Transfer Partners, L.P. to access the eastern Gulf Coast refinery market.

Enbridge Energy Partners, L.P. (EEP) increased its cost estimate for remediation efforts related to the 2010 Line 6B crude oil release by $175 million ($24 million after-tax attributable to Enbridge) due to an EPA order requiring additional containment and recovery of submerged oil. The company also noted that its total remediation costs for Line 6B are expected to exceed its insurance coverage limits.

Enbridge is executing a multi-faceted financing plan. In Q1 2013, it issued approximately $600 million of common shares and US$400 million of Cumulative Redeemable Preference Shares. The company also secured a US$500 million revolving credit facility, bringing its enterprise-wide general purpose credit facilities to $14.4 billion. The recent $1.2 billion investment in EEP's preferred units is also part of its financing strategy to support growth projects.