Enbridge Reports 2003 Earnings of $667.2 Million and Increases Quarterly Dividends by 10.2%.Energy Editors/Business Editors CALGARY Calgary (kăl`gərē), city (1991 pop. 710,677), S Alta., Canada, at the confluence of the Bow and Elbow rivers. The largest city in Alberta and the fastest-growing major city in Canada, Calgary is a corporate, transportation, and financial , Alberta--(BUSINESS WIRE)--Jan. 27, 2004 Enbridge Enbridge TSX: ENB NYSE: ENB is a Calgary, Alberta based company which is focused on three core businesses: crude oil and liquids pipelines, natural gas pipelines, and natural gas distribution. The company has over 4,000 employees, mostly in Canada, the U.S. Inc. today announced earnings applicable to common shareholders of $667.2 million for the year ended December December: see month. 31, 2003, or $4.03 per share, compared with $576.5 million, or $3.60 per share, in 2002. Contributing to the increase are higher earnings due to crude oil pipeline expansion, a higher ownership interest in the Alliance Pipeline, higher earnings at Enbridge Gas Distribution due to colder than normal weather, as well as higher earnings from additional equity earnings from Enbridge Energy Partners, L.P. (EEP EEP Export Enhancement Program EEP Ecosystem Enhancement Program EEP Early Entrance Program (University of Washington) EEP Equal Error Protection EEP Einstein Equivalence Principle EEP Emergency Evacuation Plan ) and CLH CLH Hard Clam (FAO species code) CLH Compañía Logística de Hidrocarburos CLH, SA CLH California Lutheran Homes CLH Cleft-Limb-Heart Malformation Syndrome CLH Lufthansa Cityline Airlines (ICAO code) of Spain Spain, Span. España (āspä`nyä), officially Kingdom of Spain, constitutional monarchy (2005 est. pop. 40,341,000), 194,884 sq mi (504,750 sq km), including the Balearic and Canary islands, SW Europe. . Fourth quarter earnings for 2003 are $27.3 million, or $0.16 per share, compared with $34.0 million or $0.18 per share for the fourth quarter in 2002. The fourth quarter of 2003 reflects earnings improvements from the liquids pipelines comprising the Enbridge System, which is more than offset by regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. decisions at Enbridge Gas Distribution and higher corporate costs. The prior year's quarter includes a loss of $5.9 million due to closing adjustments on the sale of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. assets of Enbridge Midcoast Energy. Consistent with this profitability and the Company's positive outlook, the Board of Directors announced an increase in the quarterly dividend from $0.415 per common share to $0.4575 per common share. The Board of Directors also declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. a quarterly dividend of $0.34375 per Series A Preferred Share. Both dividends are payable on March 1, 2004 to shareholders of record on February February: see month. 13, 2004. "2003 was another excellent year for Enbridge as we grew earnings again, to $2.84 per common share excluding unusual items, in line with our previous guidance," stated Patrick D. Daniel Daniel, book of the Bible Daniel, book of the Bible. It combines "court" tales, perhaps originating from the 6th cent. B.C., and a series of apocalyptic visions arising from the time of the Maccabean emergency (167–164 B.C. , President & Chief Executive Officer. "While growing earnings in each of our five operating segments, we made good progress on all of our strategic priorities, positioning Enbridge extremely well within the industry. We completed several strategic asset acquisitions and we are making significant progress in expanding the market for Western Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. oil producers. We also established a premier Canadian Income Trust, Enbridge Income Fund, seeded with assets from Enbridge." Mr. Daniel added, "The balance sheet is strong and we continue to pursue multiple growth opportunities in 2004. Based on our outlook for 2004, it is our expectation that earnings, excluding unusual items, will be in the range of $3.00 to $3.10 per common share."
Consolidated Earnings (1)
(millions of Three months ended Twelve months ended
Canadian dollars) December 31, December 31,
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2003 2002 2003 2002
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Liquids Pipelines 53.0 37.0 213.5 189.6
Gas Pipelines 17.5 13.8 70.1 47.8
Sponsored Investments 28.8 (3.5) 234.3 (51.1)
Gas Distribution and
Services (64.2) (18.5) 153.6 124.3
International 20.2 17.6 72.3 68.0
Corporate (28.0) (12.4) (76.6) (44.4)
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27.3 34.0 667.2 334.2
Discontinued Operations - - - 242.3
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27.3 34.0 667.2 576.5
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(1) In 2003, the Company changed its financial reporting segments to
better reflect the business operations and management structure
of the Company. All financial information has been restated to
reflect the new segments. Prior year resegmentation is available
on the Enbridge website at www.enbridge.com/investor.
Significant non-recurring factors and variances affecting consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: earnings are as follows: -- Sponsored Investments includes a $169.1 million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. gain on the sale of assets to Enbridge Income Fund (EIF EIF Eukaryotic Initiation Factor EIF Eukaryotic Translation Initiation Factor EIF European Investment Fund EIF Edinburgh International Festival EIF Entry Into Force EIF Entertainment Industry Foundation EIF European Interoperability Framework ) recorded in the second quarter of 2003. -- Sponsored Investments included an $82.2 million after-tax writedown writedown A reduction in the value of an asset carried on a firm's financial statements. For example, the firm's accountants, believing the inventory is overvalued, may decide to take a writedown by reducing inventory valuation. recorded in 2002, including a $5.9 million after-tax writedown recorded in the fourth quarter, relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Enbridge Midcoast Energy (Midcoast) assets. -- Sponsored Investments includes a $9.2 million dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. gain in the second quarter of 2003, and a $11.1 million dilution gain in the fourth quarter of 2003, both relating to unit issuances by EEP. The prior year included only one dilution gain from EEP of $6.1 million in the first quarter. -- Gas Distribution and Services includes the positive effect of colder than normal weather of $46.1 million in 2003. In 2002, warm weather negatively affected earnings by $29.3 million. The positive weather effect in 2003 is partially offset by several regulatory disallowances in 2003, including $7.1 million in the first quarter, a $26.0 million regulatory receivable writedown in the fourth quarter and $4.6 million related to an outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. disallowance dis·al·low tr.v. dis·al·lowed, dis·al·low·ing, dis·al·lows 1. To refuse to allow: "[The government] also in the fourth quarter. -- The results of Noverco, included in Gas Distribution and Services, reflect a $6.0 million dilution gain relating to a unit issuance by Gaz Metro The code name for Microsoft's XPS document format. See XML Paper Specification. Limited Partnership. -- Corporate included a $17.8 million after-tax gain on a sale of marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has recorded in the first quarter of 2002. -- The second quarter of each year includes the effect of the Alberta Alberta (ălbûr`tə), province (2001 pop. 2,974,807), 255,285 sq mi (661,188 sq km), including 6,485 sq mi (16,796 sq km) of water surface, W Canada. 0.5% tax rate reductions. The 2003 results also include the effect of a higher federal future tax rate since federal surtax An additional charge on an item that is already taxed. A surtax is a tax on a tax. For example, if a person pays one hundred dollars of tax on one thousand dollars of income, a 5 percent surtax would amount to an additional five dollars. will apply when large corporations tax is eliminated. These tax rate changes result in a $7.1 million net charge to earnings in the second quarter of 2003 compared with a net recovery of $1.4 million in the comparable period of the prior year. -- Discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. included a $240.0 million after-tax gain on the sale of the retail Energy Services business in 2002. Operating factors that enhanced earnings in 2003 include the additional ownership interest in Alliance and Vector, commencement of Terrace terrace, a level field built on top of a hillslope into the floor of a deep valley to improve cultivation of crops. Terracing uses the runoff from the hill to increase soil retentiveness and arability and is often part of a larger irrigation system that includes Phase III Noun 1. phase III - a large clinical trial of a treatment or drug that in phase I and phase II has been shown to be efficacious with tolerable side effects; after successful conclusion of these clinical trials it will receive formal approval from the FDA on April 1, 2003, as well as, higher earnings from EEP and from CLH of Spain. These positive factors are partially offset by the absence of earnings from Midcoast, which was sold to EEP in October October: see month. 2002, an increased loss from Aux Sable sable, species of marten, Martes zibellina, found in Siberia, N European Russia, and N Finland. This carnivorous mammal is highly valued for its thick, soft fur, which is dark brown or black, sometimes with white underparts and sometimes flecked with silver. and additional corporate expenses.
Liquids Pipelines
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(millions of Three months ended Twelve months ended
Canadian dollars) December 31, December 31,
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2003 2002 2003 2002
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Enbridge System 48.5 21.5 162.0 123.7
Athabasca System 9.6 10.6 44.8 41.2
NW System 2.1 2.4 8.3 9.5
Saskatchewan System - 1.5 3.1 6.4
Feeder Pipelines and Other (7.2) 1.0 (4.7) 8.8
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53.0 37.0 213.5 189.6
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----------------------------------------
-- Enbridge System earnings include incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. earnings from Terrace as Phase III was placed into service ahead of schedule on April 1, 2003, lower depreciation rates as approved by the National Energy Board, and power savings realized in the fourth quarter of 2003. Contributing to the year-over-year variance The discrepancy between what a party to a lawsuit alleges will be proved in pleadings and what the party actually proves at trial. In Zoning law, an official permit to use property in a manner that departs from the way in which other property in the same locality is the negative effect of an adjustment to the power allowance credit due to shippers in the fourth quarter of 2002 as a result of Terrace operating at less than capacity. -- Higher earnings from the Athabasca Athabasca (ăthəbăs`kə), river, 765 mi (1,231 km) long, rising in the Columbia snowfield of the Canadian Rockies near the Alta.–British Columbia line and flowing N through Jasper National Park, then NE and N across central Alta. System are primarily the result of the completion of additional facilities and tankage tankage made from heat-digested animal abattoir residues without gut contents, hide, horn, hoof. Concentrated and dried and possessing a high biological value protein content of 60%. See also meat meal. including the Hardisty, Alberta Hardisty, Alberta is a town in Flagstaff County in Alberta, Canada. It is located in east-central Alberta, km ( mi) from the Saskatchewan border, near the crossroads of Highway 13 and Highway 881, in the Battle River Valley. storage project. -- The Saskatchewan Saskatchewan, province, Canada Saskatchewan (səskăch`əwən, –wän', săs'–), province (2001 pop. 978,933), 251,700 sq mi (651,903 sq km), W Canada. System is included in the results of EIF, in the Sponsored Investments segment, effective June June: see month. 30, 2003. -- Feeder feeder abbreviation for self-feeders. Used in feeding groups of animals at intervals of several days. Feed has to be dry and comminuted so that it will run down the spouts from the hopper into the troughs. Pipelines and Other reflects a provision for costs associated with toll challenges on the Frontier On the Frontier: A Melodrama in Two Acts, by W. H. Auden and Christopher Isherwood, was the third and last play in the Auden-Isherwood collaboration, first published in 1938. pipeline. In addition, the fourth quarter of 2003 includes higher liquids pipelines business development costs. Other factors contributing to the earnings variance include lower tolls on the Frontier frontier, in U.S. history, the border area of settlement of Europeans and their descendants; it was vital in the conquest of the land between the Atlantic and the Pacific. pipeline and the prior year included a revenue adjustment on the Toledo Toledo, city, Spain Toledo, city (1990 pop. 60,671), capital of Toledo province, central Spain, in Castile–La Mancha, on a granite hill surrounded on three sides by a gorge of the Tagus River. pipeline.
Gas Pipelines
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(millions of Canadian Three months ended Twelve months ended
dollars) December 31, December 31,
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2003 2002 2003 2002
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Alliance Pipeline (US) 13.3 5.8 40.3 19.6
Alliance Pipeline (Canada) - 5.9 19.6 21.1
Vector Pipeline 4.2 2.1 10.2 7.1
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17.5 13.8 70.1 47.8
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----------------------------------------
-- Alliance Pipeline (US) earnings reflect the additional ownership interests of 15.7% acquired in the fourth quarter of 2002, 1.1% in March 2003, 10.7% in April 2003, and 1.1% in October 2003. -- Alliance Pipeline (Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of ) is included in the results of EIF, in the Sponsored Investments segment, effective June 30, 2003. Prior to its sale to EIF, the Company's ownership interest in Alliance Pipeline (Canada) was 50%. The Company acquired an additional ownership interest of 16.8% in the fourth quarter of 2002 and 11.8% in April 2003. -- Vector earnings reflect increased transportation volumes and higher transportation margins due to both colder than normal weather in eastern Canada Eastern Canada (also the Eastern provinces) is the region of Canada generally considered to be east of Manitoba, consisting of the following provinces:
is further enhanced by an additional ownership interest of 15.0% acquired in the fourth quarter of 2003.
Sponsored Investments
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(millions of Canadian Three months ended Twelve months ended
dollars) December 31, December 31,
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2003 2002 2003 2002
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Enbridge Energy Partners 7.6 6.2 27.3 19.5
Enbridge Income Fund 10.1 - 17.6 -
Enbridge Midcoast Energy - (3.8) - 5.5
Gain on sale of assets to
EIF - - 169.1 -
Writedown of Midcoast
assets - (5.9) - (82.2)
Dilution Gains 11.1 - 20.3 6.1
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28.8 (3.5) 234.3 (51.1)
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-- In October 2002, the Company completed the sale of the Enbridge Midcoast Energy assets to EEP. Higher earnings from EEP in 2003 reflect incremental earnings from this and other acquisitions, and higher volumes on gas transmission assets. -- EIF commenced operations June 30, 2003. -- In each year, EEP issued additional common units. Enbridge did not participate in these offerings, resulting in dilution gains.
Gas Distribution and Services
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(millions of Canadian Three months ended Twelve months ended
dollars) December 31, December 31,
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2003 2002 2003 2002
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Enbridge Gas Distribution (68.5) (23.5) 103.0 85.3
CustomerWorks/ECS 3.6 2.7 16.9 10.7
Noverco 1.6 (4.0) 24.2 20.6
Other Gas Distibution (1.0) (0.7) 6.6 6.2
Enbridge Gas New Brunswick 1.0 1.2 4.4 3.6
Gas Services (4.7) 2.0 (5.9) (7.8)
Aux Sable 1.3 0.3 (6.9) (3.1)
Other 2.5 3.5 11.3 8.8
--------------------------------------
(64.2) (18.5) 153.6 124.3
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-- Higher earnings in 2003 are the result of higher distribution volumes attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the colder than normal weather experienced in the Enbridge Gas Distribution franchise area, amounting to $46.1 million. During 2002, weather was warmer than normal, resulting in a $29.3 million reduction in earnings. In 2003, degree days, which are used as a measure of coldness, were 19.8% greater than 2002 and 13.0% greater than the forecast based on normal weather.
(millions of Canadian dollars Twelve months ended
except number of degree days) December 31,
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2003 2002
-------------------
Actual degree days 4,029 3,362
Forecast degree days based on normal weather 3,565 3,700
Earnings increase/(decrease) due to weather 46.1 (29.3)
-- The positive effect of weather in the current year is offset, in part, by a $7.1 million regulatory disallowance related to long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. transportation contracts recognized in the first quarter of 2003, a $4.6 million regulatory disallowance related to affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. outsourcing, and a $26.0 million write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of a regulatory receivable, both in the fourth quarter of 2003. Operating and maintenance expenses were also higher in 2003. -- The main component of CustomerWorks/ECS earnings in 2003 is the contribution from CustomerWorks. The primary operations of Enbridge Commercial Services (ECS See eComStation. ) were rebundled in Enbridge Gas Distribution at the end of 2002. In 2002, earnings from CustomerWorks were affected by activity levels, including customer service calls, which were lower due to warmer weather. In 2003, earnings reflect higher weather related customer service call volumes and growth in the CustomerWorks customer base. -- The 2003 operating results for Noverco include a $6.0 million dilution gain, resulting from a Gaz Metro Limited Partnership unit issuance that Noverco did not participate in. This gain was recorded in the fourth quarter. -- The loss of $5.9 million for Gas Services in 2003 is an improvement of $1.9 million from the prior year. The improvement is due primarily to the commencement of fee-based gas service management contracts with certain U.S.-based companies in late 2002 and increased demand for natural gas and associated transmission service that reduced merchant capacity losses on Alliance and Vector. The variance in the fourth quarter is a result of estimate to actual entries primarily related to prior quarter activity. -- The loss from Aux Sable reflects the combined effect of higher natural gas prices and lower ethane ethane (ĕth`ān), CH3CH3, gaseous hydrocarbon. It is a continuous-chain alkane. As a constituent of natural gas, it is used for fuel. It can be prepared by cracking and fractional distillation of petroleum. prices, most significantly during the second quarter. The results from Aux Sable in 2003 also reflect the increase in ownership interest from 21.4% to 42.7% offset by lower depreciation as the acquisition of the additional interest was at a discount to the book value.
International
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(millions of Three months ended Twelve months ended
Canadian dollars) December 31, December 31,
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2003 2002 2003 2002
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OCENSA/CITCol 8.3 7.2 32.3 35.3
CLH 13.8 9.4 46.3 33.3
Jose Terminal and Other (1.9) 1.0 (6.3) (0.6)
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20.2 17.6 72.3 68.0
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-- Earnings from OCENSA/CITCol decreased due to lower incentive earnings from CITCol. -- Operating results from CLH reflect increased volumes and the impact of the stronger Euro, partially offset by a reduction in marine fleet revenues due to the scheduled retirement of certain ships. -- As a result of a breach of the Jose JOSE Jealous One's Still Envy (song) JOSE Joint Optics Structures Experiment Terminal operating agreement by PDVSA PDVSA Petroleos De Venezuela, SA , the Venezuelan state oil company, the SWEC SWEC Stone Webster Engineering Corporation SWEC Sydney Women's Endosurgery Centre (Australia) SWEC Southwestern Electric Cooperative SWEC Center for the Study of Wireless Electromagnetic Compatibility Partnership has filed a notice of contract termination Defense procurement: the cessation or cancellation, in whole or in part, of work under a prime contract or a subcontract thereunder for the convenience of, or at the option of, the government, or due to failure of the contractor to perform in accordance with the terms of the contract (default). and has filed for international arbitration International arbitration is the established method today for resolving disputes between parties to international commercial agreements. As with arbitration generally, it is a creature of contract, i.e. , as provided for in the operating agreement An operating agreement is an agreement among limited liability company ("LLC") members governing the LLC's business, and Member's financial and management rights and duties. No state requires an LLC to have an Operating agreement. . The Company ceased recognition of earnings commencing February 1, 2003. Other is primarily administration and business development costs, as well as, the results of the Technology business.
Corporate
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(millions of Three months ended Twelve months ended
Canadian dollars) December 31, December 31,
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2003 2002 2003 2002
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Corporate (28.0) (12.4) (76.6) (44.4)
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-- During 2003, the Company incurred slightly lower financing costs more than offset by various negative factors in the fourth quarter including increased business development costs, an expense for stock-based compensation and other corporate costs primarily relating to prior year business dispositions and final settlements. The Company adopted the fair value based method of accounting for stock-based compensation effective January January: see month. 1, 2003. -- The 2002 results included a $17.8 million after-tax gain on the sale of marketable securities. Enbridge will hold a conference call at 2:15 p.m. Mountain time (4:15 p.m. Eastern time) today to discuss the annual results. The call can be accessed at 1-800-375-9259 and will be broadcast live on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.enbridge.com/investor. A replay will be available shortly thereafter at 1-800-408-3053 using the access code 1520293#. The annual audited financial statements and MD&A will be available on Enbridge's website in February. Enbridge Inc. is a leader in energy transportation and distribution in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and internationally. As a transporter of energy, Enbridge operates, in Canada and the United States The United States and Canada share a unique legal relationship. U.S. law looks northward with a mixture of optimism and cooperation, viewing Canada as an integral part of U.S. economic and environmental policy. , the world's longest crude oil and liquids pipeline system. The Company also has international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. and a growing involvement in the natural gas transmission and midstream mid·stream n. 1. The middle part of a stream. 2. The part of a course that is neither at the beginning nor at the end: the midstream of life. Noun 1. businesses. As a distributor of energy, Enbridge owns and operates Canada's largest natural gas distribution company, which provides distribution services in the provinces of Ontario Ontario, city, United States Ontario, city (1990 pop. 133,179), San Bernardino co., S Calif., near Los Angeles, in a region of vineyards; inc. 1891. and Quebec Quebec, city, Canada Quebec, Fr. Québec, city (1991 pop. 167,517), provincial capital, S Que., Canada, at the confluence of the St. Lawrence and St. Charles rivers. and in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of State; and is developing a gas distribution system for the Province of New Brunswick New Brunswick, province, Canada New Brunswick, province (2001 pop. 729,498), 28,345 sq mi (73,433 sq km), including 519 sq mi (1,345 sq km) of water surface, E Canada. . The Company employs approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 4,000 people, primarily in Canada, the United States and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. . Enbridge common shares trade on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. in Canada and on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. in the United States under the symbol ENB. Information about Enbridge is available on the Company's website at www.enbridge.com. When used in this news release, the words "anticipate", "expect", "project", "believe", "estimate", "forecast" and similar expressions are intended to identify forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , which include statements relating to pending and proposed projects. Such statements are subject to risks, uncertainties and assumptions pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to operating performance, regulatory parameters, weather and economic conditions and, in the case of pending and proposed projects, risks relating to design and construction, regulatory processes, obtaining financing and performance of other parties, including partners, contractors and suppliers.
NOTE TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. SEGMENTED INFORMATION
(millions of Canadian dollars)
ENBRIDGE INC.
HIGHLIGHTS(1)
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Three months ended Year ended
(unaudited; millions of December 31, December 31,
Canadian dollars, --------------------------------------
except per share amounts) 2003 2002 2003 2002
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FINANCIAL
Earnings Applicable to
Common Shareholders
Liquids Pipelines 53.0 37.0 213.5 189.6
Gas Pipelines 17.5 13.8 70.1 47.8
Sponsored Investments 28.8 (3.5) 234.3 (51.1)
Gas Distribution and
Services (64.2) (18.5) 153.6 124.3
International 20.2 17.6 72.3 68.0
Corporate (28.0) (12.4) (76.6) (44.4)
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Continuing operations 27.3 34.0 667.2 334.2
Discontinued operations - - - 242.3
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27.3 34.0 667.2 576.5
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Cash Provided By/(Used In)
Operating Activities
Earnings plus
charges/(credits) not
affecting cash 132.8 37.5 965.0 732.7
Changes in operating assets
and liabilities (334.5) (41.6) (569.8) 151.6
Cash provided by
operating activities
of discontinued operations - - - 26.3
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(201.7) (4.1) 395.2 910.6
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Common Share Dividends 71.3 64.6 283.9 251.1
Per Common Share Amounts
Earnings from continuing
operations 0.16 0.20 4.03 2.09
Earnings from
discontinued operations - (0.02) - 1.51
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0.16 0.18 4.03 3.60
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Dividends 0.415 0.380 1.660 1.520
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Weighted Average Common
Shares Outstanding (millions) 165.5 160.3
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OPERATING
Liquids Pipelines(2)
Deliveries (thousands of
barrels per day) 2,356 2,152 2,189 2,088
Barrel miles (billions) 188 183 710 705
Average haul (miles) 870 923 889 925
Gas Distribution(3)
Volumes (billion
cubic feet) 47 47 458 410
Number of active
customers (thousands) 1,679 1,623 1,679 1,623
Degree day deficiency(4)
Actual 22 4 4,029 3,362
Forecast based on
normal weather 44 69 3,565 3,700
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1. Highlights of Gas Distribution reflect the results of Enbridge
Gas Distribution and other gas distribution operations for the
three months and the year ended September 30, 2003 and 2002.
2. Liquids Pipelines operating highlights include the statistics of
the Lakehead System and wholly-owned liquid pipeline operations.
3. Gas Distribution volumes and the number of active customers are
derived from the aggregate system supply and direct purchase gas
supply arrangements.
4. Degree-day deficiency is a measure of coldness. It is calculated
by accumulating for each day in 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 Toronto area.
ENBRIDGE INC.
CONSOLIDATED STATEMENTS OF EARNINGS
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Three months ended Year ended
(unaudited; millions of December 31, December 31,
Canadian dollars, ---------------------------------------
except per share amounts) 2003 2002 2003 2002
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Revenues
Gas sales 433.0 359.9 3,061.7 2,987.7
Transportation 351.4 247.1 1,560.6 1,296.6
Energy services 69.9 50.5 233.0 263.2
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854.3 657.5 4,855.3 4,547.5
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Expenses
Gas costs 419.4 292.1 2,720.1 2,578.0
Operating and
administrative 223.7 170.9 800.8 834.1
Depreciation 109.0 100.5 443.0 403.9
Writedown of Enbridge
Midcoast Energy assets - 5.3 - 122.7
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752.1 568.8 3,963.9 3,938.7
--------------------------------------------------------------------
Operating Income 102.2 88.7 891.4 608.8
Investment and Other Income 53.7 67.9 208.2 283.1
Gain on Sale of Assets to
Enbridge Income Fund - - 239.9 -
Interest Expense (114.2) (101.2) (451.3) (422.0)
--------------------------------------------------------------------
41.7 55.4 888.2 469.9
Income Taxes (6.0) (12.6) (187.4) (102.1)
--------------------------------------------------------------------
Earnings from Continuing
Operations 35.7 42.8 700.8 367.8
Earnings from Discontinued
Operations - - - 242.3
--------------------------------------------------------------------
Earnings 35.7 42.8 700.8 610.1
Preferred Security
Distributions (6.6) (7.1) (26.7) (26.7)
Preferred Share Dividends (1.8) (1.7) (6.9) (6.9)
--------------------------------------------------------------------
Earnings Applicable to
Common Shareholders 27.3 34.0 667.2 576.5
--------------------------------------------------------------------
--------------------------------------------------------------------
Earnings Applicable to
Common Shareholders
Continuing Operations 27.3 34.0 667.2 334.2
Discontinued Operations - - - 242.3
--------------------------------------------------------------------
27.3 34.0 667.2 576.5
--------------------------------------------------------------------
--------------------------------------------------------------------
Earnings Per Common Share
Continuing Operations 0.16 0.20 4.03 2.09
Discontinued Operations - (0.02) - 1.51
--------------------------------------------------------------------
0.16 0.18 4.03 3.60
--------------------------------------------------------------------
--------------------------------------------------------------------
Diluted Earnings Per
Common Share
Continuing Operations 0.16 0.19 4.00 2.06
Discontinued Operations - (0.01) - 1.50
--------------------------------------------------------------------
0.16 0.18 4.00 3.56
--------------------------------------------------------------------
--------------------------------------------------------------------
ENBRIDGE INC.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(unaudited; millions of Canadian dollars)
------------------------------------------------------------------
Year ended December 31, 2003 2002
------------------------------------------------------------------
Retained Earnings at Beginning of Year 1,128.1 812.3
Earnings Applicable to Common Shareholders 667.2 576.5
Effect of Change in Accounting for
Stock-Based Compensation - (5.4)
Preferred Securities Issue Costs - (4.2)
Common Share Dividends (283.9) (251.1)
------------------------------------------------------------------
Retained Earnings at End of Year 1,511.4 1,128.1
------------------------------------------------------------------
------------------------------------------------------------------
ENBRIDGE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------------------------------------
Three months ended Year ended
December 31, December 31,
-------------------------------------------------------------------
(unaudited; millions of
Canadian dollars) 2003 2002 2003 2002
-------------------------------------------------------------------
Cash Provided By/(Used In)
Operating Activities
Earnings from continuing
operations 35.7 42.9 700.8 367.8
Charges/(credits) not
affecting cash
Depreciation 109.0 100.5 443.0 403.9
Equity earnings less
than/(in excess of) cash
distributions 20.5 (22.5) (22.1) (44.6)
Gain on sale of assets to
Enbridge Income Fund - - (239.9) -
Gain on reduction of
ownership interest (30.8) - (50.0) (10.0)
Gain on sale of securities - - - (21.4)
Writedown of EGD
regulatory receivable 26.0 - 26.0 -
Writedown of Enbridge
Midcoast Energy Assets - 5.3 - 122.7
Future income taxes (41.3) (115.4) 86.8 (64.7)
Other 13.7 26.7 20.4 (21.0)
Changes in operating assets
and liabilities (334.5) (41.6) (569.8) 151.6
Cash provided by operating
activities of discontinued
operations - - - 26.3
-------------------------------------------------------------------
(201.7) (4.1) 395.2 910.6
-------------------------------------------------------------------
Investing Activities
Acquisitions - - (78.3) (289.3)
Long-term investments (2.7) (819.2) (50.5)(1,282.7)
Additions to property,
plant and equipment (119.4) (187.9) (391.3) (729.9)
Proceeds on redemption of
Enbridge Commercial
Trust Preferred Units - - 24.9 -
Sale of assets to Enbridge
Income Fund - - 331.2 -
Sale of Energy
Services business - - - 993.3
Sale of Enbridge Midcoast
Energy assets - 529.3 - 529.3
Sale of securities
and other assets - 64.8 - 184.3
Repayments by/(loans to)
affiliate (3.6) 135.8 427.2 358.1
Changes in construction
payable 0.6 (2.6) (3.7) (14.8)
Other - (6.9) - -
-------------------------------------------------------------------
(125.1) (286.7) 259.5 (251.7)
-------------------------------------------------------------------
Financing Activities
Net change in short-term
borrowings and short-term
debt 797.7 (145.3) 359.8 (1,180.9)
Long-term debt issues - - 150.0 247.4
Long-term debt repayments (400.0) (125.0) (725.0) (382.7)
Non-recourse long-term debt
issued by joint ventures 12.7 - 538.3 -
Non-recourse long-term debt
repaid by joint ventures - - (663.8) -
Non-controlling interests (0.8) 3.9 (4.0) 0.2
Preferred securities issued - - - 193.5
Common shares issued 16.4 3.5 70.9 293.1
Enbridge Energy Management
shares issued - 421.9 - 421.9
Preferred security
distributions (6.6) (7.1) (26.7) (26.7)
Preferred share dividends (1.8) (1.8) (6.9) (6.9)
Common share dividends (71.3) (64.6) (283.9) (251.1)
-------------------------------------------------------------------
346.3 85.5 (591.3) (692.2)
-------------------------------------------------------------------
Increase/(Decrease) in Cash 19.5 (205.3) 63.4 (33.3)
Cash at Beginning of Period 84.6 246.0 40.7 74.0
-------------------------------------------------------------------
Cash at End of Period 104.1 40.7 104.1 40.7
-------------------------------------------------------------------
ENBRIDGE INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(unaudited, millions of Canadian dollars)
--------------------------------------------------------------------
December 31, 2003 2002
--------------------------------------------------------------------
ASSETS
Current Assets
Cash 104.1 40.7
Accounts receivable and other 1,138.8 817.5
Gas in storage 809.8 583.8
--------------------------------------------------------------------
2,052.7 1,442.0
Property, Plant and Equipment, net 8,530.9 6,947.6
Long-Term Investments 2,390.9 3,371.5
Receivable from Affiliate 169.8 701.5
Deferred Amounts and Other Assets 486.5 315.8
Future Income Taxes 192.5 209.0
--------------------------------------------------------------------
13,823.3 12,987.4
--------------------------------------------------------------------
--------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings 649.6 247.5
Accounts payable and other 894.1 714.1
Interest payable 97.0 102.6
Current maturities and short-term debt 674.9 652.3
Non-recourse current maturities and
short-term debt 34.2 -
--------------------------------------------------------------------
2,349.8 1,716.5
Long-Term Debt 5,243.1 6,040.3
Non-Recourse Long-term Debt 752.4 -
Future Income Taxes 829.0 837.4
Non-Controlling Interests 523.0 560.8
--------------------------------------------------------------------
9,697.3 9,155.0
--------------------------------------------------------------------
Shareholders' Equity
Share capital
Preferred securities 532.4 533.7
Preferred shares 125.0 125.0
Common shares 2,239.9 2,169.0
Retained earnings 1,511.4 1,128.1
Foreign currency translation
adjustment (147.0) 12.3
Reciprocal shareholding (135.7) (135.7)
--------------------------------------------------------------------
4,126.0 3,832.4
--------------------------------------------------------------------
13,823.3 12,987.4
--------------------------------------------------------------------
--------------------------------------------------------------------
Three months ended December 31, 2003
--------------------------------------------------------------------
Gas
Liquids Gas Sponsored Distribution
Pipelines Pipelines Investments and Services
--------------------------------------------------------------------
Revenues 211.6 75.9 - 554.9
Gas costs - - - (419.4)
Operating and
administrative (78.3) (14.5) - (106.3)
Depreciation (31.1) (16.9) - (58.8)
--------------------------------------------------------------------
Operating
income/(loss) 102.2 44.5 - (29.6)
Investment and other
income/(expense) 1.9 2.9 48.0 (15.9)
Interest and
preferred
equity charges (25.1) (18.1) - (40.9)
Income taxes (26.0) (11.8) (19.2) 22.2
--------------------------------------------------------------------
Earnings applicable
to common
shareholders 53.0 17.5 28.8 (64.2)
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
International Corporate Consolidated
--------------------------------------------------------------------
Revenues 11.9 - 854.3
Gas costs - - (419.4)
Operating and administrative (12.8) (11.8) (223.7)
Depreciation (0.4) (1.8) (109.0)
--------------------------------------------------------------------
Operating income/(loss) (1.3) (13.6) 102.2
Investment and other
income/(expense) 22.0 (5.2) 53.7
Interest and preferred
equity charges (0.1) (38.4) (122.6)
Income taxes (0.4) 29.2 (6.0)
--------------------------------------------------------------------
Earnings applicable
to common shareholders 20.2 (28.0) 27.3
--------------------------------------------------------------------
--------------------------------------------------------------------
Three months ended December 31, 2002
--------------------------------------------------------------------
Gas
Liquids Gas Sponsored Distribution
Pipelines Pipelines Investments and Services
--------------------------------------------------------------------
Revenues 194.2 - 78.6 377.3
Gas costs - - (69.5) (222.6)
Operating and
administrative (70.0) - (10.7) (79.6)
Depreciation (40.4) - - (58.3)
Writedown of
Midcoast assets (5.3)
--------------------------------------------------------------------
Operating
income/(loss) 83.8 - (6.9) 16.8
Investment and other 0.1 19.8 13.6 2.6
income/(expense)
Interest and
preferred equity
charges (25.6) - (2.1) (37.8)
Income taxes (21.3) (6.0) (8.1) (0.1)
--------------------------------------------------------------------
Earnings applicable
to common shareholders 37.0 13.8 (3.5) (18.5)
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
International Corporate Consolidated
--------------------------------------------------------------------
Revenues 7.4 - 657.5
Gas costs - - (292.1)
Operating and administrative (7.6) (3.0) (170.9)
Depreciation (0.8) (1.0) (100.5)
Writedown of Midcoast assets (5.3)
--------------------------------------------------------------------
Operating income/(loss) (1.0) (4.0) 88.7
Investment and other 18.0 13.8 67.9
income/(expense)
Interest and preferred equity
charges (0.7) (43.8) (110.0)
Income taxes 1.3 21.6 (12.6)
--------------------------------------------------------------------
Earnings applicable
to common shareholders 17.6 (12.4) 34.0
--------------------------------------------------------------------
--------------------------------------------------------------------
Year ended December 31, 2003
--------------------------------------------------------------------
Gas
Liquids Gas Sponsored Distribution
Pipelines Pipelines Investments and Services
--------------------------------------------------------------------
Revenues 821.5 222.1 - 3,785.4
Gas costs - - - (2,720.1)
Operating and
administrative (288.8) (41.2) - (415.9)
Depreciation (142.6) (56.7) - (237.6)
--------------------------------------------------------------------
Operating
income/(loss) 390.1 124.2 - 411.8
Investment and other
income/(expense) 3.4 36.6 113.1 19.8
Gain on sale
of assets - - 239.9 -
Interest and
preferred equity
charges (102.1) (58.7) - (162.2)
Income taxes (77.9) (32.0) (118.7) (115.8)
--------------------------------------------------------------------
Earnings applicable
to common shareholders 213.5 70.1 234.3 153.6
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
International Corporate Consolidated
--------------------------------------------------------------------
Revenues 26.2 0.1 4,855.3
Gas costs - - (2,720.1)
Operating and administrative (30.5) (24.4) (800.8)
Depreciation (2.0) (4.1) (443.0)
--------------------------------------------------------------------
Operating income/(loss) (6.3) (28.4) 891.4
Investment and other
income/(expense) 78.1 (42.8) 208.2
Gain on sale of assets - - 239.9
Interest and preferred
equity charges (0.5) (161.4) (484.9)
Income taxes 1.0 156.0 (187.4)
--------------------------------------------------------------------
Earnings applicable
to common shareholders 72.3 (76.6) 667.2
--------------------------------------------------------------------
--------------------------------------------------------------------
Year ended December 31, 2002
--------------------------------------------------------------------
Gas
Liquids Gas Sponsored Distribution
Pipelines Pipelines Investments and Services
--------------------------------------------------------------------
Revenues 787.7 - 1,219.0 2,513.5
Gas costs - - (1,051.4) (1,526.6)
Operating and
administrative (282.5) - (109.5) (410.4)
Depreciation (150.6) - (17.3) (229.5)
Writedown of
Midcoast assets (122.7)
--------------------------------------------------------------------
Operating
income/(loss) 354.6 - (81.9) 347.0
Investment and other
income/(expense) 4.8 66.3 44.8 32.1
Interest and
preferred
equity charges (99.8) - (28.1) (161.7)
Income taxes (70.0) (18.5) 14.1 (93.1)
--------------------------------------------------------------------
Earnings/(loss)
from continuing
operations 189.6 47.8 (51.1) 124.3
--------------------------------------------------------------------
--------------------------------------------------------------------
Earnings from
discontinued
operations
--------------------------------------------------------------------
Earnings
applicable
to common
shareholders
--------------------------------------------------------------------
--------------------------------------------------------------------
--------------------------------------------------------------------
International Corporate Consolidated
--------------------------------------------------------------------
Revenues 27.2 0.1 4,547.5
Gas costs - - (2,578.0)
Operating and administrative (19.0) (12.7) (834.1)
Depreciation (2.9) (3.6) (403.9)
Writedown of Midcoast assets (122.7)
--------------------------------------------------------------------
Operating income/(loss) 5.3 (16.2) 608.8
Investment and other
income/(expense) 64.0 71.1 283.1
Interest and preferred equity
charges (1.6) (164.4) (455.6)
Income taxes 0.3 65.1 (102.1)
--------------------------------------------------------------------
Earnings/(loss) from
continuing operations 68.0 (44.4) 334.2
--------------------------------------------------------------------
--------------------------------------------------------------------
Earnings from discontinued
operations 242.3
--------------------------------------------------------------------
Earnings applicable
to common shareholders 576.5
--------------------------------------------------------------------
--------------------------------------------------------------------
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