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CALGARY, ALBERTA--(Marketwire - Feb. 7, 2012) -
HIGHLIGHTS
-- Earnings for the fourth quarter and year ended December 31, 2011 totaled
$16.8 million ($0.46 per common share) and $37.3 million ($1.33 per
common share), respectively.
-- The Company announced a 7.3% dividend increase in November.
-- The Fund's fourth quarter earnings were $6.9 million; earnings for the
full year were $38.2 million.
-- The Fund's cash available for distribution (CAFD) increased 34% in 2011
on the strength of renewable power acquisition and Saskatchewan System
expansion.
-- Monthly dividend of $0.103 per common share declared by the Company's
Board of Directors to be paid on March 15, 2012
Enbridge Income Fund Holdings Inc. ENF (ENF or the Company) announced today earnings of $37.3 million, or $1.33 per common share, for the year ended December 31, 2011, reflecting the performance of its investment in Enbridge Income Fund (the Fund).
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 cash available for distribution (CAFD) totaled $134.3 million for the year ended December 31, 2011, an increase of 34% over 2010. The improvement in CAFD is primarily due to increased cash flow from the Saskatchewan System Phase II Expansion Project and growth in the Fund's Green Power business following the acquisition of wind and solar assets from Enbridge Inc. in October.
"The completion of the Fund's acquisition of the Sarnia Solar Project and the Talbot and Ontario Wind Projects has, as anticipated, had an immediate and significant impact on the Fund's earnings and distributable cash in the fourth quarter," said John Whelen, President, Enbridge Income Fund Holdings, Inc. "We were pleased in turn to be able to increase the dividend paid by Enbridge Income Fund Holdings beginning in November 2011.
"The Fund remains focused on delivering stable, sustainable growth in distributable cash and, where prudent, distributions of distributable cash by pursuing a strategy that combines optimization of existing assets with modest growth via organic expansion or acquisition. Over 2012, the Fund will continue to pursue opportunities to acquire or develop new energy infrastructure that are in keeping with the risk and return profile of its existing businesses. The announcement by NRGreen of its first Alberta waste heat generating facility, expected to be in service in 2013, further contributes to the Fund's strategic objectives of growth and diversification."
In the fourth quarter, the Fund marked a significant milestone in its Saskatchewan System liquids pipeline business.
"We were pleased to receive approval from the National Energy Board of our proposed Bakken Pipeline Project in December 2011. We expect to begin construction of the approximately $190 million, 124-kilometre pipeline extension in the spring of 2012 and to be complete and in service in the first quarter of 2013," said Mr. Whelen.
The Board also announced today the appointment of Harry Roberts to the Board of Directors and Audit Committee of the Corporation.
"We're very pleased to welcome Harry Roberts to the Board," said Mr. Whelen. "Mr. Roberts held a number of senior finance positions during his 20 year career with Petro-Canada, the last as Executive Vice-President and Chief Financial Officer. Following Petro-Canada's merger with Suncor Energy Inc., he held the position of Senior Vice-President, Integration until his retirement in 2010. He brings both a wealth of energy industry experience as well as deep financial expertise and we look forward to his contribution to our Board."
On February 6, 2012, the Company's Board of Directors declared a monthly cash dividend of $0.103 per common share to be paid on March 15, 2012 to shareholders of record at the close of business on February 29, 2012.
FOURTH QUARTER 2011 REVIEW
The audited financial statements and Management's Discussion and Analysis (MD&A) of both ENF and the Fund, which contain additional notes and disclosures, are available on the Company's website at www.enbridgeincomefund.com.
-- The Company's earnings for the fourth quarter and year ended December
31, 2011 were $16.8 million ($0.46 per common share) and $37.3 million
($1.33 per common share), respectively. The Company's earnings reflected
cash distributions received from the Fund, net of income taxes. The
Company's annual effective tax rate of 7.3% for 2011 reflected favorable
tax attributes associated with the acquired renewable assets and
resultant reduction in the taxability of Fund distributions.
-- The Fund completed the acquisition of a portfolio of wind and solar
power generation facilities with a total capacity of close to 370-MW for
an aggregate price of $1.24 billion, inclusive of working capital
adjustments. The assets acquired consist of the 190-MW Ontario Wind
Project, the 99-MW Talbot Wind Project and the 80-MW Sarnia Solar
Project, which is one of the largest operating photovoltaic solar
facilities in North America (Renewable Assets).
-- The Fund's earnings for the three months and year ended December 31,
2011 were $6.9 million and $38.2 million, respectively, and included
increased earnings from the Saskatchewan System and Renewable Assets,
net of higher interest, taxes and administrative costs. Interest expense
included non-cash accretion of the ECT preferred units of $2.5 million
and $6.6 million for the fourth quarter of 2011 and year ended December
31, 2011, respectively. Corporate costs for 2011 included one-time
professional and advisory fees of $3.6 million related to the
acquisition of the Renewable Assets.
-- Comparability of the Fund's earnings for 2011 with the prior year is
impacted by the accounting treatment of the ECT preferred units.
Following a modification to the terms of the ECT preferred units in
December 2010, distributions on ECT preferred units are charged to
equity and are no longer reflected as a corporate cost.
-- The Fund's cash available for distribution for the three months and year
ended December 31, 2011 was $50.4 million and $134.3 million,
respectively, an increase of 98% and 34% over the corresponding periods
of 2010. The increase was primarily driven by higher cash contributions
from the Saskatchewan System and cash flow generated by the Renewable
Assets, net of higher interest and administrative costs.
-- The Fund financed the acquisition of the Renewable Assets with a
combination of debt and equity. Enbridge provided the Fund with a $655.0
million unsecured, subordinated pre-payable 10-year loan at a fixed
interest rate of 6% per annum. The Fund issued 16,051,000 preferred
units of ECT to Enbridge at a price of $18.75 per unit (gross proceeds
of $301.0 million) and 14,616,000 trust units to the Company at a price
of $18.75 per unit (gross proceeds of $274.0 million). To finance its
increased investment in the Fund, the Company completed an offering of
11,707,000 subscription receipts (subsequently converted to common
shares) at a price of $18.75 per unit and issued 2,909,000 common shares
to Enbridge at price of $18.75 per common share for total proceeds of
$274.0 million.
-- In December 2011, the Fund issued $125.0 million of Medium Term Notes at
a fixed interest rate of 4.0%. The proceeds from the issue were used to
repay a portion of the $655.0 million loan provided by Enbridge in
connection with the acquisition of the Renewable Assets.
-- The Company's Board of Directors declared monthly dividends of $0.096
per common share for October and $0.103 per common share for each of
November and December.
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 a 50% interest in the Canadian segment of the Alliance Pipeline, a 100% interest in the various pipelines comprising the Saskatchewan System, and interests in more than 400 megawatts of renewable and alternative power generation capacity through a portfolio that includes the 80-MW Sarnia Solar Project, interests in 314-MW of wind generation across five wind projects and a 50% interest in the NRGreen Limited Partnership's waste-heat generating facilities. Information about Enbridge Income Fund Holdings Inc. is available on the Company's website at www.enbridgeincomefund.com.
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:
-- expected earnings or earnings per share;
-- expected costs related to projects under construction;
-- expected scope and in-service dates for projects under construction;
-- expected timing and amount of recovery of capital costs of assets;
-- expected capital expenditures;
-- expected future dividends, Fund distributions and taxability thereof;
-- the Fund's expected cash available for distribution; and
-- expected future actions of regulators.
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; 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, 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 the Fund's cash available for distribution. Cash available for distribution represents the Fund's cash available to fund distributions on Trust Units and ECT Preferred Units as well as for debt repayments and reserves. This measure is important to shareholders as the Company's objective is to provide a predictable flow of dividends to shareholders and the Company's cash flows are derived from its investment in the Fund. Cash available for distribution is not a measure that has standardized meaning prescribed by Canadian Generally Accepted Accounting Principles (GAAP) and is not considered a GAAP measure. Therefore, this measure may not be comparable with similar measures presented by other issuers. The Fund's Cash Available for Distribution reconciliation is as follows:
Three months ended Year ended
December 31, December 31,
--------------------------------------------
2011 2010 2011 2010
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(millions of Canadian dollars)
Cash provided by operating
activities 53.6 (3.9) 188.4 67.4
Add/(deduct):
ECT preferred unit
distributions - 10.9 - 43.8
Alliance Canada debt repayments (18.2) (16.9) (36.3) (33.9)
Alliance Canada other cash
distributed (retained) 7.5 9.4 (6.3) (6.5)
Green Power joint ventures cash
(retained) (1.3) (1.7) (2.7) (2.5)
Green Power maintenance capital
expenditures (0.2) - (0.2) -
Saskatchewan System maintenance
capital expenditures (2.3) (2.3) (5.4) (4.8)
Change in operating assets and
liabilities in the period 11.3 29.9 (3.2) 36.7
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Cash available for distribution 50.4 25.4 134.3 100.2
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SELECTED FINANCIAL HIGHLIGHTS
ENBRIDGE INCOME FUND HOLDINGS INC.
Three months ended Year ended
December 31, December 31,
------------------------------------------
2011 2010 2011 2010
----------------------------------------------------------------------------
(millions of Canadian dollars,
except share and per share
amounts)
Earnings 16.8 - 37.3 -
Earnings per common share, basic
and diluted 0.46 - 1.33 -
Cash provided by operating
activities 12.5 - 35.7 -
Dividends declared 13.1 - 34.8 -
Dividends per common share 0.302 - 1.166 -
Number of common shares
outstanding 39,741,000 25,125,000
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ENBRIDGE INCOME FUND (1)
Three months ended Year ended
December 31, December 31,
----------------------------------------------
2011 2010 2011 2010
----------------------------------------------------------------------------
(millions of Canadian dollars,
except unit and per unit
amounts)
Earnings
Alliance Canada 13.0 14.1 53.4 57.3
Saskatchewan System 10.7 7.4 42.1 23.4
Green Power 12.3 0.7 14.1 2.5
Corporate (29.1) (18.1) (71.4) (70.6)
----------------------------------------------------------------------------
6.9 4.1 38.2 12.6
Cash available for
distribution(2)
Alliance Canada 17.5 21.3 71.9 76.4
Saskatchewan System 20.2 12.1 78.2 42.2
Green Power 23.9 0.3 27.2 4.5
Corporate (11.2) (8.3) (43.0) (22.9)
----------------------------------------------------------------------------
50.4 25.4 134.3 100.2
Cash provided by operating
activities 53.6 (3.9) 188.4 67.4
Cash distributions declared 36.9 20.9 112.3 83.7
Distributions per trust unit 0.354 0.288 1.392 1.152
Distributions per ECT
preferred unit 0.354 0.288 1.392 1.152
Number of units outstanding
ECT preferred units 54,074,750 38,023,750
Trust units 49,241,000 34,625,000
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(1) Financial Highlights for Enbridge Income Fund have been extracted from financial statements prepared in accordance with pre-changeover accounting standards, Part V of the CICA Handbook.
(2) See Non-GAAP Measures.
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