Enbridge Reports Earnings of $639.9 Million for the Nine Months Ended September 30, 2003.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)--Oct. 30, 2003 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 $639.9 million for the nine months ended September September: see month. 30, 2003, or $3.87 per share, compared with $542.5 million, or $3.42 per share, for the same period in 2002. Earnings for the three months ended September 30, 2003 are $90.7 million, or $0.54 per share, compared with a loss of $3.9 million, or $0.03 per share, for the same period in 2002. The 2003 results include a $169.1 million gain on the transfer of assets The conveyance of something of value from one person, place, or situation to another. The law recognizes that persons are generally entitled to transfer their assets to whomever they wish and for whatever reason. The most common means of transfer are wills, trusts, and gifts. 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 ), whereas the prior year reflected a $240.0 million gain on the sale of the retail services business, both 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. and recorded in the respective second quarters. The third quarter of 2002 included a $76.3 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. of the Enbridge Midcoast Energy assets. Excluding these gains and the writedown, earnings have improved significantly from the prior year. This is primarily a result of higher natural gas volumes on the gas distribution system due to colder than normal weather, higher earnings from additional interests in the Alliance Pipeline and higher earnings on the Enbridge crude oil system following the Terrace expansion. Enbridge President & Chief Executive Officer Patrick D. Daniel noted, "The third quarter again highlights Enbridge's ability to generate consistent and sustained earnings growth from its low risk infrastructure asset base. Earnings per share for the nine months, after excluding significant non-recurring factors, are higher by approximately 8% on a year over year basis. Looking forward, robust continental energy demand fundamentals and increasing energy supply from Canada will support continued growth. Enbridge is positioned to benefit from these fundamentals and has a significant inventory of new projects that are in various stages of development." On October 30, 2003, the Enbridge Board of Directors declared quarterly dividends of $0.415 per common share and $0.34375 per Series A Preferred Share. Both dividends are payable on December 1, 2003 to shareholders of record on November 14, 2003. The Company has previously provided guidance for full year 2003 earnings per common share of $2.80 - $2.90, excluding significant non-recurring factors. The Company expects full year 2003 earnings per common share in the lower half of that range.
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Consolidated Earnings/(Loss)
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Three months Nine months
ended ended
(millions of Canadian dollars) September 30, September 30,
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2003 2002 2003 2002
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Energy Transportation
North 78.4 61.7 395.4 182.9
Energy Transportation
South 7.1 (60.2) 31.8 (38.6)
Gas Distribution and
Services 6.3 (1.9) 209.2 137.3
International 17.9 16.4 52.1 50.4
Corporate (19.0) (19.9) (48.6) (31.8)
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90.7 (3.9) 639.9 300.2
Discontinued Operations - - - 242.3
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90.7 (3.9) 639.9 542.5
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Significant non-recurring factors and variances affecting consolidated earnings are as follows: -- Energy Transportation North includes a $169.1 million after-tax gain on the sale of assets to Enbridge Income Fund (EIF) recorded in the second quarter of 2003. -- Energy Transportation South included a $76.3 million after-tax writedown of the Enbridge Midcoast Energy assets recorded in the third quarter of 2002. -- Energy Transportation South 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 on an 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 ) unit issuance in the second quarter of 2003, whereas the prior year included a $6.1 million dilution gain in the first quarter. -- Gas Distribution and Services includes the positive effect of colder than normal weather of $44.2 million in 2003, including $2.5 million in the third quarter. In the nine months ended September 30, 2002, warm weather negatively affected earnings by $29.4 million; however, during the third quarter weather was colder, which increased earnings by $10.0 million. The positive weather effect in 2003 is partially offset by a $7.1 million regulatory disallowance dis·al·low tr.v. dis·al·lowed, dis·al·low·ing, dis·al·lows 1. To refuse to allow: "[The government] related to a prior year and recorded in the first quarter of 2003. -- Corporate included a $17.8 after-tax million 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 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 enhance earnings in 2003 include the additional ownership interest in Alliance, Terrace 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 , which was placed into service April 1, 2003, improved results from gas service activities and higher earnings from EEP 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. These positive factors are partially offset by the absence of earnings from Enbridge Midcoast Energy, sold to an affiliate of Enbridge in October 2002, and 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. .
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Energy Transportation North
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Three months Nine months
ended ended
(millions of Canadian dollars) September 30, September 30,
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2003 2002 2003 2002
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Enbridge System 43.2 33.9 113.5 102.2
Athabasca System 12.1 11.1 35.2 30.6
NW System 2.1 2.7 6.2 7.1
Saskatchewan System - 1.6 3.1 4.9
Alliance Pipeline (US) 9.3 4.5 27.0 13.8
Alliance Pipeline
(Canada) - 4.7 19.6 15.2
Vector Pipeline 1.7 2.6 6.0 5.0
Enbridge Income Fund 7.5 - 7.5 -
Other 2.5 0.6 8.2 4.1
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78.4 61.7 226.3 182.9
Gain on sale of assets
to Enbridge Income Fund - - 169.1 -
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78.4 61.7 395.4 182.9
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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 on April 1, 2003. To a lesser degree, the timing of operating and maintenance expenses also favourably impacted earnings in the third quarter of 2003. -- Higher earnings from the Athabasca 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. . -- Alliance Pipeline (US) earnings reflect the additional ownership interests of 15.7% acquired in the fourth quarter of 2002, 1.1% in March 2003 and 11.8% in April 2003, of which 1.1% is expected to close in the fourth quarter of 2003. -- Vector earnings reflect increased volumes 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:
injections. This is offset in part by the cumulative effect of a change in depreciable depreciable Of, relating to, or being a long-term tangible asset that is subject to depreciation. life from 20 to 25 years in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with FERC FERC Federal Energy Regulatory Commission FERC FEMA Emergency Response Capability guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. which was recorded in the third quarter of 2002. -- EIF commenced operations July 1, 2003 and the earnings from this investment more than offset the 2002 third quarter earnings from the Saskatchewan System and Alliance Pipeline (Canada), which are now included in EIF. However, the interest in Alliance Pipeline (Canada) was only 21.4% in 2002 and had increased to 50% prior to the disposition to EIF.
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Energy Transportation South
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Three months Nine months
ended ended
(millions of Canadian dollars) September 30, September 30,
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2003 2002 2003 2002
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Enbridge Energy Partners 6.0 4.5 19.7 13.3
Feeder Pipelines and
Other 1.1 2.7 2.9 7.1
Enbridge Midcoast Energy - 8.9 - 11.2
Enbridge Energy Partners
dilution gain - - 9.2 6.1
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7.1 16.1 31.8 37.7
Writedown of Enbridge
Midcoast Energy assets - (76.3) - (76.3)
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7.1 (60.2) 31.8 (38.6)
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--------------------------------------
-- Higher earnings from EEP are due to the acquisition of the Enbridge Midcoast Energy assets in October 2002. -- 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 reflect lower earnings from Frontier as a result of lower tolls and volumes as well as higher costs on the Toledo System. -- In each year, EEP issued additional common units. Enbridge did not participate in these offerings, resulting in dilution gains.
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Gas Distribution and Services
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Three months Nine months
ended ended
(millions of Canadian dollars) September 30, September 30,
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2003 2002 2003 2002
--------------------------------
Enbridge Gas Distribution 2.8 (2.0) 171.5 108.8
Noverco 0.6 1.3 22.6 24.6
CustomerWorks/ECS 4.5 2.5 13.3 8.0
Enbridge Gas New Brunswick 1.3 0.4 3.4 2.4
Aux Sable (1.6) (0.9) (8.2) (3.4)
Other Gas Distribution
Operations 0.3 1.0 7.6 6.8
Gas Services (0.6) (4.4) (1.2) (9.8)
Other (1.0) 0.2 0.2 (0.1)
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6.3 (1.9) 209.2 137.3
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-- Higher earnings in 2003 are attributable to the colder than normal weather experienced in the Enbridge Gas Distribution franchise area, amounting to $44.2 million. During the comparative nine months of 2002, weather was warmer than normal, resulting in a $29.4 million reduction in earnings. In 2003, degree days, which are used as a measure of coldness, were 19.3% greater than 2002 and 13.8% greater than the forecast based on normal weather.
Three months Nine months
(millions of Canadian dollars ended ended
except number of degree days) September 30, September 30,
-------------------------------------------------------------------
2003 2002 2003 2002
------------------------------------
Actual degree days 801 851 4,007 3,358
Forecast degree days
based on normal weather 714 699 3,521 3,631
Earnings increase/(decrease)
due to weather 2.5 10.0 44.2 (29.4)
-- 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. The improved earnings in the third quarter of 2003 include the positive effect of the 2003 rate settlement and a decrease in operating and maintenance expenses. Operating and maintenance expenses were higher in the first and second quarters as a result of colder than normal weather and the timing of expenditures. -- 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 are based on a fixed fee assuming normal activity and reflect growth in the CustomerWorks customer base. -- 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. -- The loss of $1.2 million for Gas Services in 2003 is an improvement of $8.6 million from the same period last 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, reducing merchant capacity losses on Alliance and Vector.
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International
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Three months Nine months
ended ended
(millions of Canadian dollars) September 30, September 30,
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2003 2002 2003 2002
--------------------------------
OCENSA/CITCol 8.1 9.8 24.0 28.1
CLH 11.4 7.6 32.5 23.9
Jose Terminal and Other (1.6) (1.0) (4.4) (1.6)
--------------------------------
17.9 16.4 52.1 50.4
--------------------------------
--------------------------------
-- Earnings from OCENSA/CITCol decreased due to lower incentive earnings from CITCol, consistent with prior quarters. -- 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 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 and the results of the Technology business. Corporate Corporate costs total $48.6 million for the nine months ended September 30, 2003 compared to $31.8 million for the same period in 2002. The 2002 results included a $17.8 million after-tax gain on the sale of marketable securities. For the three months ended September 30, 2003, corporate costs are $19.0 million compared to $19.9 million for the same period in 2002. Enbridge will hold a conference call at 2:15 p.m. Mountain time (4:15 p.m. Eastern time) today to discuss the third quarter 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 1488876#. The interim financial statements and MD&A are available on Enbridge's website. 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 U.S., 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 and Quebec 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 4,000 people, primarily in Canada, the U.S. 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 U.S. 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 relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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. |
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