8-K

ENBRIDGE INC 8-K Report (Nov 5, 2015)

Filed November 5, 2015For Securities:ENBENBMFEBBGFEBRGFEBRZFENBGFENBRFENFFFEBGEFENBFFENBHFENBNFENBOFENBSFEBBNFENNPF

Summary

Enbridge Inc. (ENB) reported its third quarter 2015 financial results, which were significantly impacted by unusual, non-recurring, or non-operating factors, leading to a reported net loss of $609 million. However, the company highlighted adjusted earnings of $399 million ($0.47 per share) and available cash flow from operations (ACFFO) of $668 million ($0.79 per share), demonstrating underlying operational strength. Key events during the quarter included the completion of a major restructuring plan involving the transfer of its Canadian liquids pipelines and certain renewable energy assets to Enbridge Income Fund, enhancing its sponsored vehicle strategy and financial flexibility. The company also reported significant project advancements, including the completion of a phase of the Mainline Expansion and the Woodland Pipeline Extension, boosting capacity. Despite a delay in the Line 9 project impacting full-year earnings guidance slightly, Enbridge reaffirmed its confidence in delivering robust long-term growth, projecting compound average annual adjusted earnings per share growth of 11-13% and ACFFO per share growth of 15-18% through 2019, supported by a substantial $38 billion growth program. The company also announced a new acquisition in the Rampion Offshore Wind Project in the UK and declared its quarterly dividend.

Key Highlights

  • 1Reported a third quarter net loss of $609 million, but posted adjusted earnings of $399 million ($0.47/share) and ACFFO of $668 million ($0.79/share).
  • 2Completed a significant Canadian Restructuring Plan, transferring liquids pipelines and renewable energy assets to Enbridge Income Fund, advancing the sponsored vehicle strategy.
  • 3Successfully completed phases of the Mainline Expansion (adding 230,000 bpd capacity) and the Woodland Pipeline Extension (adding 400,000 bpd capacity).
  • 4The National Energy Board approved Line 9 hydrostatic testing, with service expected in December 2015, although its delay impacted full-year earnings guidance.
  • 5Raised approximately $3.7 billion in term debt financing through subsidiaries and its affiliate Enbridge Income Fund Holdings Inc. announced a $700 million equity offering.
  • 6Announced the acquisition of a 24.9% interest in the Rampion Offshore Wind Project in the UK for an estimated investment of $750 million.
  • 7Declared a quarterly common share dividend of $0.46500, payable on December 1, 2015.

Frequently Asked Questions

The reported net loss of $609 million was largely due to unusual, non-recurring, or non-operating factors, including changes in unrealized derivative fair value, one-time impacts from the Canadian Restructuring Plan (such as a loss on de-designation of interest rate hedges and write-off of a regulatory asset), and transaction costs. Adjusted earnings, which exclude these items, remained positive.

The Canadian Restructuring Plan, which transferred Canadian liquids pipelines and certain renewable energy assets to Enbridge Income Fund, is expected to advance Enbridge's sponsored vehicle strategy, bolster financial strength and flexibility, expand access to funding, and enhance returns on invested capital. It also supports the company's dividend growth targets.

Enbridge remains confident in its long-term growth prospects, projecting compound average annual adjusted earnings per share growth of 11-13% and ACFFO per share growth of 15-18% through 2019. This outlook is supported by a $38 billion growth program, with $24 billion already secured and in execution.

The delay in the Line 9 project, which was initially expected to be in service in early 2015 but is now slated for December 2015, will impact full-year 2015 adjusted earnings. Enbridge now expects its 2015 adjusted earnings per share to fall within the lower half of its previously issued guidance range of $2.05 to $2.35. The impact on ACFFO is less significant, with the 2015 ACFFO outlook remaining unchanged.