May 05, 2010 07:00 ET

Enbridge Reports Strong First Quarter Adjusted Earnings of $318 Million or $0.86 Per Common Share

CALGARY, ALBERTA--(Marketwire - May 5, 2010) - Enbridge Inc. (TSX:ENB) (NYSE:ENB) - "Enbridge's favourable first quarter results reflect the continuing success of our growth strategy," said Patrick D. Daniel, President and Chief Executive Officer. "Earnings growth drivers include the crude oil pipeline system and Enbridge Energy Partners, in which Enbridge holds a 27% stake, both of which are benefiting from the investments made in the last several years.

"Enbridge's first quarter adjusted earnings of $318 million, or $0.86 per share, put us firmly on track to achieve our full year adjusted earnings guidance of $2.50 to $2.70 per share," said Mr. Daniel. "2010 will also mark the beginning of accelerated growth in Enbridge's cash flow, where cash flow will grow at a faster rate than earnings, further strengthening our balance sheet and providing a strong base for future growth."

Mr. Daniel noted that Enbridge anticipates double digit growth across its liquids pipelines, natural gas transportation and green energy businesses through the middle of this decade, building on the Company's recent accomplishments.

"In Liquids Pipelines, we continue to see a steady progression of regional opportunities driven by new oil sands projects and expansion of existing projects," said Mr. Daniel. "In the first quarter we were pleased to announce two new projects - additional pipeline and terminal facilities to support expansion of the Christina Lake enhanced oil project, and additional volumes contracted on our Waupisoo Pipeline from the new Leismer project. These projects highlight the benefits we're able to offer oil sands producers in terms of flexible, cost-effective solutions that leverage our existing regional oil sands infrastructure. We enjoy strong customer relationships in the region and look forward to continuing to work collaboratively with our shippers to meet their transportation needs."

Enbridge completed construction of the Alberta Clipper Project in the first quarter. "We are very proud to mark the completion of our largest-ever expansion project and to have brought Alberta Clipper into service on April 1st, on time and on budget," said Mr. Daniel.

Also in the first quarter, Enbridge reached agreement with producers on the key terms of a new incentive tolling settlement (ITS) on the Enbridge mainline system, and filed final tolls with the National Energy Board (NEB). The new ITS is for one year and is extendable if agreed by both Enbridge and the Canadian Association of Petroleum Producers (CAPP). "Enbridge and its customers, through CAPP, continue to realize significant benefits under the ITS agreement, reaffirming the advantages of working cooperatively and in partnership with our customers," commented Mr. Daniel.

"In Green Energy, we advanced our growth plans with finalization of commercial agreements for the development of the 99-megawatt Greenwich Wind Energy Project, bringing our interests in green energy generating capacity in development and in operation to more than 560 megawatts. Our investments in renewable energy align very well with our objective to profitably grow our energy infrastructure business and to deliver superior returns to shareholders."

In January, Enbridge was recognized as one of the Corporate Knights Global 100 Most Sustainable Corporations. Ranked number 16 globally, Enbridge was the top Canadian company on the list. "This is a significant accomplishment and one in which we take particular pride," said Mr. Daniel. "Enbridge's inclusion on the Global 100 list highlights our success in balancing our financial, social and governance performance, and our ability to continue to operate and grow our business in an environmentally responsible way."

"Looking ahead this year and beyond, we expect to continue to deliver exceptional results to our shareholders and a superior total return. The dividend paid in the first quarter of 2010 represented a 15% increase, reflecting our record growth in 2009, and we expect future dividend growth to continue in tandem with anticipated growth in earnings per share," concluded Mr. Daniel. "This is a clear demonstration of the quality of Enbridge's value proposition. Our business model, delivering reliability, income and growth, tends to retain and build value for shareholders even during tough economic times, and to outperform the markets and our peers over the long term.

FIRST QUARTER 2010 OVERVIEW

For more information on Enbridge's growth projects and operating results, please see the Management's Discussion and Analysis which is filed on SEDAR and EDGAR and also available on the Company's website at www.enbridge.com/investor.



-- Enbridge's first quarter results continued to benefit from the
construction of Enbridge's two largest pipeline projects, Alberta
Clipper and Southern Lights. In addition, the earnings contribution from
Enbridge Energy Partners increased period over period due to improved
results within its liquids segment, primarily a result of the Southern
Access Phase II expansion placed in service during April 2009, as well
as the North Dakota Phase VI expansion that entered service on January 1
of this year, on budget and ahead of schedule. These results were
partially offset by decreased earnings from the Energy Services segment
of the Company which in 2009 reflected higher volumes and more
favourable storage and transportation margins.

-- Both the Canadian and U.S. segments of the Alberta Clipper Project were
placed in service on April 1, 2010. The line fill process has begun and
is expected to be complete by the end of September 2010.


For the United States segment of Alberta Clipper, tariffs filed with the Federal Energy Regulatory Commission (FERC) were approved and became effective April 1, 2010. Filings in early 2010 by shippers requesting the FERC to delay the tariff were dismissed by the FERC in March 2010.

Interim tolls for the Enbridge mainline, including recovery of costs related to the Canadian segment of Alberta Clipper, went into effect April 1, 2010 and, as directed by the NEB, reflected the forecasted toll presented in 2007. An NEB hearing has been scheduled for November 2010 to consider Enbridge's final toll application, which includes Alberta Clipper at the full revenue requirement, as well as remaining aspects of the February 2010 shippers' filing. In April 2010, the NEB denied other aspects of the shippers' filing, including the request to suspend the line fill requirement. The Company believes the NEB will approve the final toll and continues to believe the shippers' filing to be without merit.



-- On March 31, 2010, Enbridge announced an agreement with Renewable Energy
Systems Canada Inc. (RES Canada), an affiliate of RES Americas, to
develop a 99-megawatt wind energy project on the northern shore of Lake
Superior, in Ontario. Enbridge has a 90% interest in the Greenwich Wind
Energy Project, with an option to acquire the remaining 10% interest.
RES Canada will construct the project at a total capital cost of
approximately $275 million.

-- On February 3, 2010, Enbridge announced an agreement with Statoil Canada
Ltd. (Statoil) for the addition of the Statoil's Leismer oil sands
project as a shipper on Enbridge's Regional Oil Sands System. This
brings the number of producing oil sands projects connecting to
Enbridge's regional system to six.

-- On January 28, 2010, Enbridge announced an agreement with FCCL
Partnership to provide additional pipeline and terminal facilities to
support expansion of the Christina Lake enhanced oil project, which is
operated by Cenovus Energy Inc. The estimated cost of the additional
facilities is approximately $250 million, with a planned in service date
late in 2011. The additional Christina Lake facilities will include two
375,000 barrel tanks and 26 kilometers of 30-inch diameter pipeline, and
will readily accommodate the current and planned future expansions of
the Christina Lake enhanced oil project.


DIVIDEND DECLARATION

On May 4, 2010, the Enbridge Board of Directors declared quarterly dividends of $ 0.425 per common share and $ 0.34375 per Series A Preferred Share. Both dividends are payable on June 1, 2010 to shareholders of record on May 14, 2010.

CONFERENCE CALL

Enbridge will hold a conference call on Wednesday, May 5, 2010 at 9:00 a.m. Eastern time (7:00 a.m. Mountain time) to discuss the first quarter 2010 results. Analysts, members of the media and other interested parties can access the call at +617-213-8838 or toll-free at 1-866-700-7173 using the access code of 51299006. The call will be audio webcast live at www.enbridge.com/investor. A webcast replay and podcast will be available approximately two hours after the conclusion of the event and a transcript will be posted to the website within 24 hours. The replay at toll-free 1-888-286-8010 or +617-801-6888 (access code 95785283) will be available until May 12, 2010.

The conference call will begin with a presentation by the Company's Chief Executive Officer and Chief Financial Officer, followed by a question and answer period for investment analysts. A question and answer period for members of the media will follow the analysts' session.

The unaudited interim Consolidated Financial Statements and Management's Discussion and Analysis (MD&A), which contain additional notes and disclosures, are available on the Enbridge website.

About Enbridge Inc.

Enbridge Inc. (Enbridge or the Company), a Canadian company, is a North American leader in delivering energy. As a transporter of energy, Enbridge operates, in Canada and the U.S., the world's longest crude oil and liquids transportation system. The Company also has a growing involvement in the natural gas transmission and midstream businesses, and is expanding its interests in renewable and green energy technologies including wind and solar energy, hybrid fuel cells and carbon dioxide sequestration. As a distributor of energy, Enbridge owns and operates Canada's largest natural gas distribution company, and provides distribution services in Ontario, Quebec, New Brunswick and New York State. Enbridge employs approximately 6,000 people, primarily in Canada and the U.S. Enbridge's common shares trade on the Toronto and New York stock exchanges under the symbol ENB. For more information, visit enbridge.com.

Forward-Looking Information

Forward-looking information, or forward-looking statements, have been included in this news release to provide the Company's shareholders and potential investors with information about the Company and its subsidiaries, including management's assessment of Enbridge's and its subsidiaries' future plans and operations. 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. Forward-looking information or statements included or incorporated by reference in this document include, but are not limited to, statements with respect to: expected earnings or adjusted earnings; expected earnings or adjusted earnings per share; expected costs related to projects under construction; expected in-service dates for projects under construction; expected tariffs for pipelines; expected capital expenditures; and estimated future dividends.

Although Enbridge believes that these forward-looking statements are reasonable based on the information available on the date such statements are made and processes 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, inflation and interest rates; the availability and price of labour and pipeline construction materials; operational reliability; customer project approvals; maintenance of support and regulatory approvals for the Company'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 underlie 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 Company's services. Similarly, exchange, inflation and interest rates impact the economies and business environments in which the Company operates, may impact levels of demand for the Company'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 or adjusted earnings and associated per share amounts, or estimated future 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 and foreign exchange rates 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.

Enbridge's forward-looking statements are subject to risks and uncertainties pertaining to operating performance, regulatory parameters, project approval and support, weather, economic and competitive conditions, exchange rates, interest rates, commodity prices and supply and demand for commodities, including but not limited to those risks and uncertainties discussed in this news release and in the Company's other filings with Canadian and United States 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 Enbridge'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, Enbridge assumes 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 Enbridge or persons acting on the Company's behalf are expressly qualified in their entirety by these cautionary statements.

Non-GAAP Measures

This news release contains references to adjusted earnings, which represent earnings or loss applicable to common shareholders adjusted for non-recurring or non-operating factors on both a consolidated and segmented basis. These factors are reconciled and discussed in the financial results sections for the affected business segments within the Company's MD&A. Management believes that the presentation of adjusted earnings provides useful information to investors and shareholders as it provides increased transparency and predictive value. Management uses adjusted earnings to set targets, assess performance of the Company and set the Company's dividend payout target. Adjusted earnings and adjusted earnings for each of the segments are not measures that have a standardized meaning prescribed by Canadian generally accepted accounting principles (Canadian GAAP) and are not considered GAAP measures; therefore, these measures may not be comparable with similar measures presented by other issuers. See Non-GAAP Reconciliations section of the Company's Management's Discussion and Analysis for a reconciliation of the GAAP and non-GAAP measures.



HIGHLIGHTS
Three months ended
March 31,
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(unaudited; millions of Canadian dollars, except per
share amounts) 2010 2009
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Earnings Applicable to Common Shareholders
Liquids Pipelines 134 91
Natural Gas Delivery and Services 120 486
Sponsored Investments 52 30
Corporate 36 (49)
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342 558
Earnings per Common Share 0.93 1.54
Diluted Earnings per Common Share 0.92 1.53
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Adjusted Earnings(1)
Liquids Pipelines 134 97
Natural Gas Delivery and Services 143 152
Sponsored Investments 51 31
Corporate (10) (12)
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318 268
Adjusted Earnings per Common Share(1) 0.86 0.74
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Cash Flow Data
Cash provided by operating activities 646 881
Cash used in investing activities (629) (363)
Cash provided by/(used in) financing activities 84 (726)
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Dividends
Common Share Dividends Declared 161 138
Dividends per Common Share 0.425 0.370
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Shares Outstanding(millions)
Weighted average common shares outstanding 368 362
Diluted weighted average common shares outstanding 371 365
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Operating Data
Liquids Pipelines - Average Deliveries (thousands of
barrels per day)
Enbridge System(2) 2,054 2,027
Enbridge Regional Oil Sands System(3) 236 252
Spearhead Pipeline 112 106
Olympic Pipeline 254 257
Natural Gas Delivery and Services
Gas Pipelines - Average Throughput Volumes (millions of
cubic feet per day)
Alliance Pipeline US 1,680 1,690
Vector Pipeline 1,518 1,587
Enbridge Offshore Pipelines 2,004 1,902
Enbridge Gas Distribution
Volumes (billions of cubic feet) 166 180
Number of active customers(4) (thousands) 1,957 1,912
Degree day deficiency(5)
Actual 1,726 1,925
Forecast based on normal weather 1,763 1,745
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1. Adjusted earnings represent earnings applicable to common shareholders
adjusted for non-recurring or non-operating factors. Adjusted earnings
and adjusted earnings per common share are non-GAAP measures that do not
have any standardized meaning prescribed by GAAP.
2. Enbridge System includes Canadian mainline deliveries in Western Canada
and to the Lakehead System at the United States border as well as Line 8
and Line 9 in Eastern Canada.
3. Volumes are for the Athabasca mainline and the Waupisoo Pipeline and
exclude laterals on the Enbridge Regional Oil Sands System.
4. Number of active customers is the number of natural gas consuming
Enbridge Gas Distribution customers at the end of the period.
5. Degree day deficiency is a measure of coldness which is indicative of
volumetric requirements of natural gas utilized for heating purposes in
Enbridge Gas Distribution's franchise area. It is calculated by
accumulating, for the period, the total number of degrees each day by
which the daily mean temperature falls below 18 degrees Celsius. The
figures given are those accumulated in the Greater Toronto Area.


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