CALGARY, ALBERTA--(Marketwire - Aug. 3, 2011) -
HIGHLIGHTS
-- Second quarter and six month earnings totaled $6.8 million ($0.27 per
common share) and $13.7 million ($0.54 per common share), respectively.
-- The Fund generates higher earnings and cash flow following expansion of
Saskatchewan System.
-- The Fund's joint Bakken expansion program on track for January 2013.
-- ENF and the Fund evaluate proposal from Enbridge to acquire three
renewable energy assets.
-- Monthly dividend payment commences with the July 2011 dividend to be
paid on August 15, 2011.
-- August monthly dividend of $0.096 per share to be paid on September 15,
2011.
Enbridge Income Fund Holdings Inc. (TSX:ENF) (ENF or the Company) announced today earnings of $6.8 million, or $0.27 per common share, for the three months ended June 30, 2011, and earnings of $13.7 million, or $0.54 per common share, for the six months ended June 30, 2011, reflecting the performance of its investment in Enbridge Income Fund (the Fund).
The Company declared a second quarter dividend of $0.288 per share on May 9, 2011, and, as previously announced will begin paying dividends on a monthly basis, commencing with the payment of $0.096 per common share dividend declared on July 15, 2011 and payable on August 15, 2011 to shareholders of record on August 2, 2011.
The Company's financial performance is a direct reflection of the Fund's ability to generate cash for distribution to its unit holders. The Fund's cash available for distribution (CAFD) totaled $25.3 million for the second quarter of 2011 and $57.0 million for the first half of 2011, increases of 6.8% and 19.5%, respectively, compared with the same periods of 2010. The improvement in CAFD is primarily due to increased cash flow from an expanded Saskatchewan System, partially offset with increased interest expense on debt incurred to fund the expansion and higher taxes.
"We are seeing higher revenues and cash flow from our crude oil and liquids transportation business with the Phase II Expansion Project on our Saskatchewan System coming into service," said John Whelen, President of Enbridge Income Fund Holdings Inc. "We are also making steady progress on the Bakken Expansion Program and in May completed the reactivation and reversal of Line EX-02, a segment of existing pipe that will contribute to our ability to bring North Dakota production north, through the Saskatchewan System and into the Enbridge mainline.
"This initial step is an important component of the larger Bakken Expansion Program being undertaken by the Fund and by our affiliate Enbridge Energy Partners in the U.S. It's an innovative and cost effective solution to meet shippers' needs for more pipeline capacity out of the region. The total cost for the Fund's portion of the Bakken Expansion Program is estimated at $190 million, and we expect it to begin generating revenue and cash flow for the Fund early in 2013."
"We believe the Fund's growth prospects are strong," said Mr. Whelen. "Our most recent projections of production growth in North Dakota suggest that there may be opportunity to further increase the capacity of the facilities planned to transport Bakken crude. In addition, as announced in May, a joint special committee of our independent directors is carefully reviewing a proposed transaction through which Enbridge would sell the Fund a portfolio of wind and solar power generation facilities with a total capacity of close to 370 megawatts (MW) for a proposed price of $1.3 billion.
"This proposed transaction would, if completed, very substantially scale up our Green Power business and significantly diversify the Company's overall asset base," said Mr. Whelen. "All of these assets are underpinned by long-term fixed price power sales contracts and are a good fit for the Fund's low risk investment profile."
The Company and the Fund anticipate receiving the joint special committee's recommendation later in August. If recommended by the joint special committee, the proposed transfer would be subject to all necessary approvals, including approval by the Boards of the Company and the Fund, regulators, and the Company's shareholders, other than Enbridge and its affiliates.
SECOND QUARTER 2011 REVIEW
The unaudited interim financial statements and Management's Discussion and Analysis (MD&A) of both ENF and the Fund, which contain additional notes and disclosures, are available on the Company's website at www.enbridgeincomefund.com.
-- The Company's earnings for the three and six months ended June 30, 2011
were $6.8 million ($0.27 per common share) and $13.7 million ($0.54 per
common share), respectively. The Company had no operating activities
during the comparable period of 2010. The Company's earnings reflected
distribution income received on its investment in the Fund, which
declared distributions of $0.346 per unit in each of the first and
second quarters 2011, net of income taxes.
-- The Fund's cash available for distribution for the three and six months
ended June 30, 2011 was $25.3 million and $57.0 million, respectively,
increases of 6.8% and 19.5% from the same periods in 2010. These
increases were primarily representative of higher cash contributions
from the Saskatchewan System and a receipt of litigation claim that was
included in the distribution from Alliance Canada received in the first
quarter of 2011, partially offset by higher financing costs incurred to
support the Fund's growth.
-- A joint special committee of independent directors was formed in May
2011 to evaluate the proposal from Enbridge Inc. for the sale to the
Fund of a portfolio of wind and solar power generation facilities with a
total capacity of close to 370-MW for a proposed price of $1.3 billion.
The assets included in the proposal are the 190-MW Enbridge Ontario Wind
Project, the 99-MW Talbot Wind Energy project, and the 80-MW Sarnia
Solar Project, which is one of the largest operating photovoltaic solar
facilities in North America.
-- On May 9, 2011, the Company's Board of Directors declared a second
quarter dividend of $0.288 per share, which represented a level
consistent with annual distributions paid to unit holders of the Fund in
2010. The dividend was paid on July 15, 2011 to shareholders of record
on June 30, 2011. Monthly dividend payment frequency will commence with
the July 2011 monthly dividend, which will be paid on August 15, 2011.
-- On August 2, 2011, the Company's Board of Directors declared a monthly
cash dividend of $0.096 per common share to be paid on September 15,
2011 to shareholders of record at the close of business on August 31,
2011. The Company's dividends are designated as eligible dividends for
Canadian tax purposes which qualify for the enhanced dividend tax
credit.
ABOUT ENBRIDGE INCOME FUND HOLDINGS INC.
Enbridge Income Fund Holdings Inc. is a publicly traded corporation. The Company holds an investment in Enbridge Income Fund, a premier income fund in Canada with a low-risk profile focused on energy infrastructure assets. The Fund's assets include a 50% interest in the Canadian segment of the Alliance Pipeline, a 100% interest in the various pipelines comprising the Saskatchewan System and a 50% interest in each of NRGreen Limited Partnership and the Sunbridge wind project, as well as a 33% interest in each of the Magrath and Chin Chute wind projects. Information about Enbridge Income Fund Holdings Inc. is available on the Company's web site at www.enbridgeincomefund.com.
FORWARD LOOKING INFORMATION
In the interest of providing the Company's shareholders and potential investors with information about the Company and its investee, the Fund, and the Fund's subsidiaries and joint ventures, including management's assessment of the Company's and the Fund's future plans and operations, certain information provided in this News Release constitutes forward-looking statements or information (collectively, "forward-looking statements"). This information may not be appropriate for other purposes. Forward-looking statements are typically identified by words such as "anticipate", "expect", "project", "estimate", "forecast", "plan", "intend", "target", "believe" and similar words suggesting future outcomes or statements regarding an outlook. In particular, forward-looking statements include:
-- expected costs related to projects under construction; -- expected scope and in-service dates for projects under construction; -- expected timing and amount of recovery of capital costs of assets; -- expected capital expenditures; -- expected future dividends and Fund distributions; -- the Fund's expected cash available for distribution.
Although the Company believes that these forward-looking statements are reasonable based on the information available on the date such statements are made and processes are used to prepare the information, such statements are not guarantees of future performance and readers are cautioned against placing undue reliance on forward-looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Material assumptions include assumptions about: the expected supply and demand for crude oil, natural gas and natural gas liquids; prices of crude oil, natural gas and natural gas liquids; expected exchange rates; inflation; interest rates; the availability and price of labour and pipeline construction materials; operational reliability; customer project approvals; maintenance of support and regulatory approval for the Fund's projects; anticipated in-service dates and weather. Assumptions regarding the expected supply and demand of crude oil, natural gas and natural gas liquids, and the prices of these commodities, are material to and underlay all forward-looking statements. These factors are relevant to all forward-looking statements as they may impact current and future levels of demand for the Fund's services. Similarly, exchange rates, inflation and interest rates impact the economies and business environments in which the Company and the Fund operates, may impact levels of demand for the Fund's services and cost of inputs, and are therefore inherent in all forward-looking statements. Due to the interdependencies and correlation of these macroeconomic factors, the impact of any one assumption on a forward-looking statement cannot be determined with certainty, particularly with respect to expected earnings and associated per unit or per share amounts, or estimated future distributions or dividends. The most relevant assumptions associated with forward-looking statements on projects under construction, including estimated in-service dates and expected capital expenditures, include: the availability and price of labour and pipeline construction materials; the effects of inflation on labour and material costs; the effects of interest rates on borrowing costs; and the impact of weather and customer and regulatory approvals on construction schedules.
The Company's forward-looking statements, and forward looking statements with respect to the Fund, are subject to risks and uncertainties pertaining to operating performance, regulatory parameters, project approval and support, weather, economic conditions, exchange rates, interest rates and commodity prices, including but not limited to those risks and uncertainties discussed in this News Release and in the Company's and the Fund's other filings with Canadian securities regulators. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these are interdependent and the Company's and the Fund's future course of action depends on management's assessment of all information available at the relevant time. Except to the extent required by law, the Company and the Fund assume no obligation to publicly update or revise any forward-looking statements made in this News Release or otherwise, whether as a result of new information, future events or otherwise. All subsequent forward-looking statements whether written or oral, attributable to the Company or the Fund or persons acting on the Company's or the Fund's behalf, are expressly qualified in their entirety by these cautionary statements.
NON-GAAP MEASURES
This News Release contains references to the Fund's cash available for distribution. Cash available for distribution represents the Fund's cash available to fund distributions on Trust Units and ECT Preferred Units as well as for debt repayments and reserves. This measure is important to shareholders as the Company's objective is to provide a predictable flow of dividends to shareholders and the Company's cash flows are derived from its investment in the Fund. Cash available for distribution is not a measure that has standardized meaning prescribed by Canadian Generally Accepted Accounting Principles (GAAP) and is not considered a GAAP measure. Therefore, this measure may not be comparable with similar measures presented by other issuers. The Fund's Cash Available for Distribution reconciliation is as follows:
Three months ended, Six months ended,
June 30, June 30,
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2011 2010 2011 2010
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(millions of Canadian dollars)
Cash provided by operating
activities 34.6 11.6 81.9 35.2
Add/(deduct):
ECT preferred unit
distributions - 10.9 - 21.9
Alliance Canada maintenance
capital expenditures (0.1) (1.2) (0.5) (1.8)
Alliance Canada debt repayments (18.1) (17.0) (18.1) (17.0)
Alliance Canada other cash
retained 7.3 7.3 (1.4) (3.4)
Green Power cash retained (0.6) (0.5) (1.0) (0.8)
Saskatchewan System maintenance
capital expenditures (1.3) (0.4) (2.0) (1.4)
Change in operating assets and
liabilities in the period 3.5 13.0 (1.9) 15.0
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Cash available for distribution 25.3 23.7 57.0 47.7
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SELECTED FINANCIAL HIGHLIGHTS
ENBRIDGE INCOME FUND HOLDINGS INC.
Three months ended Six months ended
June 30, June 30,
-------------------------------------------
2011 2010 2011 2010
----------------------------------------------------------------------------
(millions of dollars, except
share and per share amounts)
Earnings 6.8 - 13.7 -
Earnings per common share,
basic and diluted 0.27 - 0.54 -
Cash provided by operating
activities 8.7 - 8.7 -
Dividends declared 7.2 - 14.5 -
Dividends per common share 0.288 - 0.576 -
Number of common shares
outstanding 25,125,000 - 25,125,000 -
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ENBRIDGE INCOME FUND(1)
Three months ended Six months ended
June 30, June 30,
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2011 2010 2011 2010
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(millions of Canadian
dollars, except unit and
per unit amounts)
Earnings
Alliance Canada 13.4 14.3 26.7 28.8
Saskatchewan System 10.4 5.1 20.3 10.0
Green Power 0.9 0.6 1.8 1.5
Corporate (13.6) (18.5) (25.2) (35.2)
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11.1 1.5 23.6 5.1
Cash available for
distribution(2)
Alliance Canada 17.5 18.6 37.1 36.6
Saskatchewan System 18.0 10.5 36.9 19.5
Green Power 1.3 1.2 2.7 2.9
Corporate (11.5) (6.6) (19.7) (11.3)
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25.3 23.7 57.0 47.7
Cash provided by operating
activities 34.6 11.6 81.9 35.2
Cash distributions declared 25.1 20.9 50.3 41.8
Distributions per trust
unit 0.346 0.288 0.692 0.576
Distributions per ECT
preferred unit 0.346 0.288 0.692 0.576
Number of units outstanding
ECT preferred units 38,023,750 38,023,750
Trust units 34,625,000 34,625,000
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(1) Financial Highlights for Enbridge Income Fund have been extracted from
financial statements prepared in accordance with pre-changeover
accounting standards, Part V of the CICA Handbook.
(2) See Non-GAAP Measures.
Contact Information:
Jennifer Varey
Media
(403) 508-6563
jennifer.varey@enbridge.com
Enbridge Income Fund Holdings Inc.
Teri Majer
Investment Community
(403) 508-3185
teri.majer@enbridge.com
www.enbridgeincomefund.com