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Press release from Marketwire

Enbridge Income Fund Holdings Inc. Announces Post-Restructuring Results

Highlights - Restructuring completed December 17, 2010. - Saskatchewan System Phase II Expansion substantially completed in December 2010. - Enbridge Income Fund cash available for distribution increased by $10.1 million, or 11.2%, over 2009. - The Fund proceeds with joint Bakken Expansion Program.

Wednesday, February 02, 2011

Enbridge Income Fund Holdings Inc. Announces Post-Restructuring Results09:00 EST Wednesday, February 02, 2011CALGARY, ALBERTA--(Marketwire - Feb. 2, 2011) - Enbridge Income Fund Holdings Inc. (TSX:ENF) ("EIFH" or the "Company") announced today earnings of $1.2 million or $0.05 per common share, reflecting the impact of its investment in Enbridge Income Fund (the "Fund") from the date of restructuring, December 17, 2010, to December 31, 2010. On December 17, 2010, under a Plan of Arrangement approved by unitholders earlier in the year, all publicly held trust units of the Fund as well as a portion of the units held by Enbridge Inc., were exchanged on a one for one basis for shares of EIFH. The EIFH shares were listed on the TSX on December 21, 2010.Going forward, all public investors will participate in the earnings and cash flow of the Fund through their investment in EIFH. The scope of activities of EIFH will be limited to investing in the Fund and the financial performance of EIFH will directly reflect the underlying performance of the operating assets held within the Fund. The Fund, itself, continued to deliver solid performance in 2010. Earnings for the full year were $12.6 million and cash available for distribution totaled $100.2 million, an increase of 11.2% over 2009."The fourth quarter 2010 marked our transition to a new structure, but for our investors, our value proposition of a safe and dependable high cash payout vehicle supported by high quality, long life energy infrastructure assets has not changed," said John Whelen, President of the Fund's Administrator, Enbridge Management Services Inc. "Our new structure is expected to provide the necessary financial flexibility and access to capital that will enable the Fund to execute its business plan and continue to grow in the future, whether organically or by acquisition."In the fourth quarter 2010, the Phase II expansion of the Fund's Saskatchewan System was substantially completed and new project assets were declared in-service in December 2010; this will increase crude oil capacity across the system by approximately 125,000 barrels per day (bpd) and is expected to generate significant incremental earnings and cash flow for the Fund and for EIFH. Remaining construction activities to complete the NGL conversion project and residual seasonal and restoration work will be completed in the first quarter of 2011.The Fund will also proceed with a joint project with its affiliate Enbridge Energy Partners, L.P. to further expand crude oil pipeline capacity to accommodate growing production from the Bakken and Three Forks formations located in Montana and North Dakota. The Bakken Expansion Program will increase takeaway capacity from the Bakken area by an initial 145,000 bpd, which can be readily expanded to 325,000 bpd.The Bakken Expansion Program is expected to be in service in 2013, with the Fund's share of expenditures estimated to be $190.0 million."The Bakken Formation continues to offer tremendous growth opportunities for our crude oil gathering business," said Mr. Whelen. "With its extensive existing infrastructure, and connection to the Enbridge Mainline System, the Saskatchewan System is able to offer producers attractive transportation options, and is expected to benefit from the continued growth in crude oil production."Similarly, the Fund's natural gas assets are also very well positioned to benefit from continued growth in natural gas production in the regions it serves, notably through development of liquids rich natural gas in the Montney Formation in northeastern B.C. We believe Alliance Canada's proximity to stable and growing supplies of liquids rich gas, and its unique ability to efficiently deliver high BTU content gas streams will help ensure that the pipeline will continue to be fully utilized after the expiry of the primary term of its existing capacity commitments in 2015."The Fund's Green Energy assets continued to deliver steady results in the fourth quarter and over the full year.Former holders of Fund trust units are reminded that they have until February 28, 2011 to choose either to effect the exchange on a tax-deferred basis if they have embedded gains on their units, or to realize any embedded gain or loss. More information, and tools to assist in making this choice, is available on the EIFH website at www.enbridgeincomefund.com.FORWARD LOOKING INFORMATIONIn 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 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 and Fund distributions;the Fund's expected cash available for distribution.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 and 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 MEASURESThis 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 endedYear endedDecember 31,December 31,(millions of Canadian dollars)2010200920102009Cash Provided by Operating Activities(3.9)9.167.494.2ECT preferred unit distributions10.910.943.843.8Alliance Canada debt repayments(16.9)(15.5)(33.9)(31.0)Alliance Canada cash (retained)/distributed9.43.0(6.5)(16.5)Green Power cash retained(1.7)(0.8)(2.5)(2.0)Saskatchewan System maintenance capital expenditures(2.3)(2.7)(4.8)(5.6)Change in operating assets and liabilities in the period29.917.936.77.2Cash Available for Distribution25.421.9100.290.1Enbridge Income Fund Holdings Inc. Financial PerformancePeriod from March 26, 2010, date of incorporation, to December 31, 2010(millions of dollars, except per share amounts)Earnings 1.2Earnings per Common Share, basic and diluted $0.05Cash flow from operating activities -Dividends Declared Dividends per Common Share -The Company's earnings and cash flows are derived from its investment in the Fund which is accounted for using the equity method of accounting. Earnings for the period ended December 31, 2010 of $1.2 million ($0.05 per common share) reflected the Company's share of the Fund's earnings attributable to common shareholders of $1.7 million from the date of the Plan of Arrangement (the "Plan"), December 17, 2010, to December 31, 2010. No distributions were received from the Fund from the date of the Plan, December 17, 2010, to December 31, 2010, nor were any dividends declared to the Company's shareholders during this period.Enbridge Income Fund Financial PerformanceA summary of the financial results of the Company's investee, Enbridge Income Fund, for the three months and years ended December 31, 2010 and 2009 is provided below.Three Months EndedYear EndedDecember 31,December 31,2010200920102009(millions of Canadian dollars)EarningsAlliance Canada14.115.357.359.3Saskatchewan System7.45.123.419.7Green Power0.70.42.54.0Corporate(18.1)(17.2)(70.6)(70.0)Enbridge Income Fund Earnings4.13.612.613.0Cash Available for Distribution (CAFD)Alliance Canada21.318.076.471.7Saskatchewan System12.18.342.234.5Green Power0.31.24.54.7Corporate(8.3)(5.6)(22.9)(20.8)Enbridge Income Fund CAFD25.421.9100.290.1The Fund's earnings and CAFD totalled $12.6 million and $100.2 million, respectively, for the year ended December 31, 2010. The Fund's earnings and cash available for distribution reflected stable returns from Alliance Canada and the Green Power segment, as well as growth attributable to Phase II of the Saskatchewan System Capacity Expansion, which was substantially completed and declared in-service in December 2010. The Fund's earnings for the year ended December 31, 2010 were impacted by costs related to one-time events, including the Virden crude oil release and the Plan to restructure the Fund.Consistent with expectations, Alliance Canada recorded year-over-year declines in earnings due to a reduced return on equity on its declining investment base, partially offset by an increase in its deemed income tax recovery. Alliance Canada CAFD increased in 2010 due to a one-time distribution associated with a favourable litigation settlement.Saskatchewan System earnings and CAFD for the year ended December 31, 2010 increased over 2009 by 18.8% and 22.3%, respectively, owing to growth in customer connections and new project assets declared in-service in December 2010 from the Phase II expansion. Saskatchewan System earnings for the year ended December 31, 2010 included pre-tax costs of $1.5 million related to the April 2010 Virden crude oil release, net of estimated insurance proceeds.Green Power earnings for 2009 included an unrealized non-cash derivative gain. After removing the impact of this item, Green Power earnings of $2.5 million for 2010 are comparable with the prior year. Green Power's waste heat generation facilities delivered improved operating performance in 2010 compared with 2009, whereas the wind energy assets experienced lower production due to lower wind resources than were experienced in the prior year.Corporate costs include distributions on preferred units of ECT, a subsidiary of the Fund, as well as corporate financing costs, incentive fees, current and future income taxes and management and administrative costs. ECT Preferred Unit distributions were declared at a rate of $1.152 per unit in 2010, consistent with the prior year, and totalled $43.8 million. In 2011, due to an amendment of the terms and conditions of the ECT Preferred Units, distributions on such units will no longer be reflected as a corporate cost but rather a charge to equity in the same fashion as common trust unit distributions.Corporate costs incurred in 2010 also included one-time legal and other professional fees associated with restructuring the Fund of $1.8 million. Compared with 2009, corporate costs for the year ended December 31, 2010 also reflected higher interest expense and lower income taxes.ABOUT ENBRIDGE INCOME FUND HOLDINGS INC.Enbridge Income Fund Holdings Inc. is a publicly traded corporation. The Company holds an investment in Enbridge Income Fund, a premier income fund in Canada with a low-risk profile focused on 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 a 50% interest in each of NRGreen Limited Partnership and the Sunbridge wind project, as well as a 33% interest in each of the Magrath and Chin Chute wind projects. Information about Enbridge Income Fund Holdings Inc. is available on the Company's web site at www.enbridgeincomefund.com.FOR FURTHER INFORMATION PLEASE CONTACT: Jennifer VareyEnbridge Income Fund Holdings Inc.Media(403) 508-6563jennifer.varey@enbridge.comORPatrick MurrayEnbridge Income Fund Holdings Inc.Investment Community(403) 508-3136patrick.murray@enbridge.comwww.enbridgeincomefund.com