CALGARY, ALBERTA — (Marketwired) — 11/04/14 — HIGHLIGHTS
(all financial figures are unaudited and in Canadian dollars)
Enbridge Income Fund Holdings Inc. (TSX: ENF) (ENF or the Company) announced today earnings of $21.7 million or $0.38 per common share for the three months ended September 30, 2014 and earnings of $65.1 million or $1.15 per common share for the nine months ended September 30, 2014.
On September 22, 2014, the Company and Enbridge Income Fund (the Fund) announced that indirect wholly-owned subsidiaries of the Fund entered into agreements with indirect wholly-owned subsidiaries of Enbridge Inc. (Enbridge) to acquire a 50% interest in the U.S. segment of the Alliance Pipeline and subscribe for and purchase Class A Units which will provide a defined cash flow stream from the Southern Lights Pipeline for $1.76 billion (the Transaction). Closing of the Transaction is subject to customary regulatory approval and is anticipated in November, 2014. The Company intends to increase the dividend on its common shares by 12% upon closing. If the Transaction does not close by November 14, 2014, the Company will declare its customary monthly dividend at that time for payment on December 15, 2014.
The Company–s financial performance is a direct reflection of the Fund–s ability to generate cash for distribution to its unitholders. The Fund–s CAFD totaled $206.9 million for the nine months ended September 30, 2014, an increase of 4.4% over the prior year. The improvement in CAFD was primarily due to increased cash flow generated by the Liquids Transportation and Storage segment resulting from improved throughputs as well as a full period of cash flow from the Bakken Expansion which commenced service on March 1, 2013. The Fund–s third quarter earnings were $24.3 million and nine months earnings were $89.8 million, both including the impact of certain one-time, non-recurring items, including advisory fees and an unrealized gain on a foreign exchange payment feature associated with the Transaction. On an adjusted basis, the Fund–s third quarter and nine months earnings were $21.4 million and $90.2 million, respectively.
“Our business continues to deliver solid and consistent performance as demonstrated by our third quarter results,” said Enbridge Income Fund Holdings Inc. President Perry Schuldhaus. “At $1.76 billion, the Transaction with Enbridge is the most significant the Fund has undertaken since its inception in 2003.
“This is an outstanding transaction for the Fund as it offers many benefits such as further diversifying the Fund–s portfolio of assets and its sources of low risk cash flow. Moreover, expected additional cash flow accretion will also enable the Fund to build cash resources to support investment in further growth. We anticipate closing in November and the cash flow generated from the Alliance U.S. and Southern Lights pipelines will support the planned 12% dividend increase on a sustained basis,” added Mr. Schuldhaus.
The Company also announced the resignation of Mr. Richard (Dick) Auchinleck from its Board of Directors and the resignation of Mr. Auchinleck and Mr. David T. Robottom from the Board of Trustees of Enbridge Commercial Trust (ECT). Mr. John K. Whelen has been appointed by Enbridge Inc. as Trustee of ECT to replace Mr. Robottom. Mr. Whelen is the Chief Financial Officer of Enbridge Inc. and was the President of the Company from December 17, 2010 to January 1, 2014. The Company also appointed Ms. Wanda M. Opheim, Senior Vice President, Finance of Enbridge Inc. as Chief Financial Officer, replacing Mr. Colin Gruending, effective following the close of the Transaction. Mr. Gruending has been appointed Vice President Corporate Development and Planning of Enbridge Inc.
“I would like to thank Mr. Auchinleck for his dedication and counsel to the Company and to the Fund. He has served on our Board and the ECT Board since their inception,” concluded Mr. Schuldhaus. “I would also like to acknowledge the contributions of Mr. Robottom to the stewardship of ECT during his time as a Trustee.”
THIRD QUARTER 2014 REVIEW
The unaudited financial statements and Management–s Discussion and Analysis (MD&A) of both the Company and the Fund, which contain additional notes and disclosures, are available on the Company–s website at .
ABOUT ENBRIDGE INCOME FUND HOLDINGS INC.
Enbridge Income Fund Holdings Inc. is a publicly traded corporation. The Company, through its investment in Enbridge Income Fund, holds high quality, low risk energy infrastructure assets. The Fund–s assets include interests in more than 500 megawatts of renewable and alternative power generation capacity, a portfolio of liquids transportation and storage businesses and a 50% interest in the Canadian segment of the Alliance Pipeline. Information about Enbridge Income Fund Holdings Inc. is available on the Company–s website at .
FORWARD LOOKING INFORMATION
In the interest of providing the Company–s shareholders and potential investors with information about the Company and its investee, the Fund, and the Fund–s subsidiaries and joint ventures, including management–s assessment of the Company–s and the Fund–s future plans and operations, certain information provided in this News Release constitutes forward-looking statements or information (collectively, “forward-looking statements”). This information may not be appropriate for other purposes. Forward-looking statements are typically identified by words such as “anticipate”, “expect”, “project”, “estimate”, “forecast”, “plan”, “intend”, “target”, “believe” and similar words suggesting future outcomes or statements regarding an outlook. In particular, forward-looking statements include:
Although the Company believes that these forward-looking statements are reasonable based on the information available on the date such statements are made and processes are used to prepare the information, such statements are not guarantees of future performance and readers are cautioned against placing undue reliance on forward-looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Material assumptions include assumptions about: the expected supply and demand for crude oil, natural gas and natural gas liquids; prices of crude oil, natural gas and natural gas liquids; expected exchange rates; inflation; interest rates; the availability and price of labour and pipeline construction materials; operational reliability; customer project approvals; maintenance of support and regulatory approval for the Fund–s projects and transactions; anticipated in-service dates and weather. Assumptions regarding the expected supply and demand of crude oil, natural gas and natural gas liquids, and the prices of these commodities, are material to and underlay all forward-looking statements. These factors are relevant to all forward-looking statements as they may impact current and future levels of demand for the Fund–s services. Similarly, exchange rates, inflation and interest rates impact the economies and business environments in which the Company and the Fund operates, may impact levels of demand for the Fund–s services and cost of inputs, and are therefore inherent in all forward-looking statements. Due to the interdependencies and correlation of these macroeconomic factors, the impact of any one assumption on a forward-looking statement cannot be determined with certainty, particularly with respect to expected earnings and associated per unit or per share amounts, or estimated future distributions or dividends. The most relevant assumptions associated with forward-looking statements on projects under construction, including estimated in-service dates and expected capital expenditures, include: the availability and price of labour and pipeline construction materials; the effects of inflation on labour and material costs; the effects of interest rates on borrowing costs; and the impact of weather, customer and regulatory approvals on construction schedules.
The Company–s forward-looking statements, and forward looking statements with respect to the Fund, are subject to risks and uncertainties pertaining to operating performance, regulatory parameters, project approval and support, weather, economic conditions, changes in tax law and tax rate increases, exchange rates, interest rates and commodity prices, including but not limited to those risks and uncertainties discussed in this News Release and in the Company–s and the Fund–s other filings with Canadian securities regulators. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these are interdependent and the Company–s and the Fund–s future course of action depends on management–s assessment of all information available at the relevant time. Except to the extent required by law, the Company and the Fund assume no obligation to publicly update or revise any forward-looking statements made in this News Release or otherwise, whether as a result of new information, future events or otherwise. All subsequent forward-looking statements whether written or oral, attributable to the Company or the Fund or persons acting on the Company–s or the Fund–s behalf, are expressly qualified in their entirety by these cautionary statements.
NON-GAAP MEASURES
This News Release contains references to adjusted earnings and cash available for distribution (CAFD). Adjusted earnings represents earnings adjusted for unusual, non-recurring or non-operating factors on both a consolidated and segmented basis. These factors, referred to as adjusting items, are reconciled and discussed in the financial results sections for the affected business segments. CAFD represents the Fund–s cash available to fund distributions on trust units and ECT preferred units as well as for debt repayments and reserves. CAFD consists of operating cash flow from the Fund–s underlying businesses less deductions for maintenance capital expenditures, the Fund–s administrative and operating expenses, corporate segment interest expense, applicable taxes and other reserves determined by the Manager. CAFD is important to unitholders as the Fund–s objective is to provide a predictable flow of distributable cash to unitholders. Management believes the presentation of adjusted earnings and CAFD provides useful information to investors and unitholders as it provides increased transparency and predictive value. Management uses adjusted earnings and CAFD to set targets, including the Fund–s distribution payout target, and to assess the performance of the Company. Adjusted earnings and CAFD are not measures that have standardized meaning prescribed by United States Generally Accepted Accounting Principles (U.S. GAAP) and are not considered U.S. GAAP measures. Therefore, these measures may not be comparable with similar measures presented by other issuers. Please refer to the earnings reconciliation within the financial results for each business segment and the CAFD reconciliation within this MD&A. The Fund–s adjusted earnings and CAFD reconciliations are as follows:
Contacts:
Enbridge Income Fund Holdings Inc.
Media
Graham White
(403) 508-6563 / (888) 992-0997
Enbridge Income Fund Holdings Inc.
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Teri Majer
(403) 508-3185