8-K

ENBRIDGE INC 8-K Report (Nov 3, 2016)

Filed November 3, 2016For Securities:ENBENBMFEBBGFEBRGFEBRZFENBGFENBRFENFFFEBGEFENBFFENBHFENBNFENBOFENBSFEBBNFENNPF

Summary

Enbridge Inc. reported its third-quarter 2016 results, showing a net loss of $103 million ($0.11 per common share) but an adjusted earnings of $437 million ($0.47 per common share). The company highlighted a significant increase in Adjusted EBIT and Available Cash Flow from Operations (ACFFO) compared to the previous year, driven by contributions from new liquid pipeline expansion projects. Key strategic developments include the announcement of a definitive merger agreement with Spectra Energy Corp., aimed at creating a premier North American energy infrastructure company, and progress on asset divestitures, including the sale of South Prairie Region Assets for $1.075 billion. Further strategic moves include the agreement to acquire a $1.5 billion equity interest in the Bakken Pipeline System and the acquisition of the Chapman Ranch Wind Project. Despite a $763 million impairment charge related to the Sandpiper Project, Enbridge reiterated its expectation to remain within its full-year 2016 financial guidance ranges. The company also declared its quarterly dividend of $0.53000 per common share.

Key Highlights

  • 1Reported a Q3 2016 loss of $103 million ($0.11/share) but adjusted earnings of $437 million ($0.47/share).
  • 2Announced a definitive merger agreement with Spectra Energy Corp. to form a premier North American energy infrastructure company, expected to close in Q1 2017.
  • 3Completed 100% acquisition of the Chapman Ranch Wind Project (249 MW) and agreed to acquire a US$1.5 billion equity interest in the Bakken Pipeline System.
  • 4Progressed on its $2 billion asset sale target with the sale of South Prairie Region Assets for $1.075 billion.
  • 5Reported increased Q3 Adjusted EBIT of $1,001 million and ACFFO of $852 million compared to Q3 2015, driven by Liquids Pipelines segment expansion.
  • 6Recorded a US$763 million asset impairment charge for the Sandpiper Project due to deferred development.
  • 7Declared a quarterly common share dividend of $0.53000, payable on December 1, 2016.

Frequently Asked Questions

Enbridge reported a net loss of $103 million, or $0.11 per common share, for the third quarter of 2016. However, adjusted earnings were $437 million, or $0.47 per common share. Adjusted EBIT increased to $1,001 million and Available Cash Flow from Operations (ACFFO) rose to $852 million compared to the same period in 2015, primarily due to contributions from new liquid pipeline expansions.

The most significant development is the announcement of a definitive merger agreement with Spectra Energy Corp., which aims to create a leading North American energy infrastructure company. Enbridge also announced progress on its asset divestiture program, agreeing to sell its South Prairie Region Assets for $1.075 billion, and agreed to acquire a substantial equity interest in the Bakken Pipeline System.

Yes, Enbridge recorded an asset impairment charge of US$763 million related to the Sandpiper Project. This impairment was a result of the decision to defer the project due to lower crude oil production in North Dakota and was primarily attributable to Enbridge Energy Partners, L.P. unit holders.

Despite the impact of the Sandpiper impairment and other factors, Enbridge expects its full-year 2016 financial results to remain within the previously announced guidance ranges.