Enbridge’s second quarter details

Highlights

• Second quarter earnings were CAN$577 million and six months earnings were CAN$194 million, both including the impact of a number of unusual, non-recurring or non-operating factors.
• Second quarter and six months adjusted earnings were CAN$505 million and CAN$973 million, respectively, or CAN$0.60 and CAN$1.15 per common share, respectively.
• Second quarter and six months available cash flow from operations were CAN$808 million and CAN$1610 million, respectively, or CAN$0.96 and CAN$1.91 per common share, respectively.
• Enbridge announced 2015 available cash flow from operations guidance of CAN$3.30 to CAN$4 per common share.
• Enbridge reached agreement with Enbridge Income Fund to transfer its Canadian liquids pipelines business and Canadian renewable energy assets for CAN$30.4 billion plus incentive distribution and temporary performance distribution rights.
• Since the end of 2014, Enbridge has completed approximately CAN$3 billion of projects and is on track to complete another CAN$5 billion by the end of 2015.
• A non-cash goodwill impairment charge of CAN$440 million (CAN$167 million after-tax attributable to Enbridge) related to Enbridge Energy Partners, L.P.'s natural gas and natural gas liquids businesses was recorded in the second quarter.

Enbridge Inc. (Enbridge) announced second quarter adjusted earnings of CAN$505 million or CAN$0.60 per common share. Available cash flow from operations (ACFFO) increased to CAN$808 million, or CAN$0.96 per common share, from CAN$516 million, or CAN$0.63 per common share for the second quarter of 2014.

"At the halfway point in the year, we're pleased to report solid second quarter and six-month results," said Al Monaco, President and Chief Executive Officer. "Enbridge's strong adjusted earnings and cash flow growth reflect the strength of our core assets and the ongoing successful execution of our growth capital programme. We remain solidly on track to be within our full year adjusted earnings guidance range of CAN$2.05 - CAN$2.35 per share."

Commencing with the second quarter results, Enbridge is reporting ACFFO as a supplemental metric to assess the performance of its business. Enbridge today announced full year ACFFO guidance of CAN$3.30 - CAN$4 per share.

The transaction

During the second quarter, Enbridge announced an agreement to transfer its Canadian Liquids Pipelines business and Canadian renewable energy assets to Enbridge Income Fund for units of the fund and its subsidiaries valued at CAN$30.4 billion, plus incentive distribution and temporary performance distribution rights (the transaction). The transaction is on track to close in the third quarter of 2015, subject to regulatory approvals and a vote of the public shareholders of Enbridge Income Fund Holdings Inc. (ENF), at a special meeting to be held on 20 August 2015.

The transaction is a key component of Enbridge's financial strategy optimisation announced in December 2014, which included an increase to the company's dividend payout policy. Together, these actions support the company's previously announced 33% dividend increase (which took effect 1 March 2015) and expected dividend per share growth rate of 14 - 16% through to 2018. It is expected to be driven by growing cash flow from existing businesses and the successful execution of the company's CAN$44 billion growth capital programme (over the company's five year planning horizon from 2014 - 2018), CAN$34 billion of which is commercially secured. In addition, the transaction is expected to provide alternative sources of funding for Enbridge's enterprise-wide growth initiatives and enhance its competitiveness for new organic growth opportunities and asset acquisitions.

Edited from press release by Stephanie Roker

Read the article online at: https://www.worldpipelines.com/business-news/03082015/enbridges-second-quarter-details/