8-K

ENBRIDGE INC 8-K Report (Nov 6, 2013)

Filed November 6, 2013For Securities:ENBENBMFEBBGFEBRGFEBRZFENBGFENBRFENFFFEBGEFENBFFENBHFENBNFENBOFENBSFEBBNFENNPF

Summary

Enbridge Inc. (ENB) reported its third quarter 2013 financial results, demonstrating continued growth in adjusted earnings per share and advancing a substantial pipeline and energy infrastructure growth plan. The company announced several key project developments, including the progression of the Woodland Pipeline Extension, Wood Buffalo Extension Pipeline, and the Norlite Pipeline System, collectively representing billions of dollars in future investment. These projects underscore Enbridge's strategic focus on expanding its oil sands infrastructure and capitalizing on North American energy demand. Financially, Enbridge reported solid operational performance across its segments. While the reported earnings were impacted by various non-recurring items and accounting adjustments, adjusted earnings showcased resilience. The company also actively managed its capital structure, issuing debt and preference shares to fund its extensive growth pipeline, which totals $29 billion in commercially secured projects expected to come online between 2013 and 2017. The company reaffirmed its positive outlook for full-year adjusted earnings per share within its guidance range.

Key Highlights

  • 1Enbridge is proceeding with the Woodland Pipeline Extension Project with an estimated investment of approximately $0.6 billion.
  • 2The company will construct facilities and provide transportation services for the JACOS Hangingstone Oil Sands Project for an approximate investment of $0.1 billion.
  • 3Enbridge secured commercial support for the $1.6 billion Wood Buffalo Extension Pipeline and the $1.4 billion Norlite Pipeline System, both crucial for the Athabasca oil sands region.
  • 4Nine-month adjusted earnings per share increased 12% to $1.33, and adjusted earnings for the third quarter were $0.34 per common share.
  • 5The company continues to execute its $36 billion growth plan, highlighting successful capital market activities including medium-term note and preference share issuances.
  • 6Enbridge's five-year strategic plan projects 10% to 12% average annual growth in adjusted earnings per share and dividends.
  • 7The company reported a $13 million after-tax accrual for the June 2013 Line 37 crude oil release, bringing the total estimated costs to $53 million before insurance recoveries.

Frequently Asked Questions

Enbridge announced significant advancements in its oil sands infrastructure, including proceeding with the Woodland Pipeline Extension Project ($0.6 billion), constructing facilities for the JACOS Hangingstone Oil Sands Project ($0.1 billion), securing commercial support for the Wood Buffalo Extension Pipeline ($1.6 billion), and the Norlite Pipeline System ($1.4 billion). These projects are designed to enhance capacity and serve the growing oil sands production.

For the nine months ended September 30, 2013, Enbridge's adjusted earnings per share increased by 12% to $1.33, compared to $1.19 in the prior year. Third quarter adjusted earnings per share remained stable at $0.34. The company's adjusted earnings increased to $278 million from $267 million in the same quarter of the previous year, primarily driven by stronger contributions from its Sponsored Investments segment.

Enbridge has $29 billion of enterprise-wide commercially secured projects expected to come into service between 2013 and 2017. These projects are expected to drive significant shareholder value and maintain industry-leading growth beyond 2017, aligning with the company's strategic plan to achieve 10% to 12% average annual growth in adjusted earnings per share and dividends over the next five years.

Reported earnings were affected by several items, including changes in unrealized derivative fair value gains/losses. Additionally, there were out-of-period adjustments in Gas Distribution related to deferred gas transportation costs and in Liquids Pipelines related to make-up rights and tax recoveries. Enbridge also increased its accrual for the June 2013 Line 37 crude oil release by $13 million after-tax, bringing the total estimated costs to $53 million before insurance recoveries.