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Enbridge Reports First Quarter Adjusted Earnings of $488 Million or $0.62 Per Common Share

Wednesday, May 08, 2013

Enbridge Reports First Quarter Adjusted Earnings of $488 Million or $0.62 Per Common Share

07:00 EDT Wednesday, May 08, 2013

CALGARY, ALBERTA--(Marketwired - May 8, 2013) -

HIGHLIGHTS

(all financial figures are unaudited and in Canadian dollars)

  • First quarter earnings were $250 million including unrealized non-cash mark-to-market losses
  • First quarter adjusted earnings were $488 million or $0.62 per common share
  • Enbridge Energy Partners, L.P. increased its cost estimate associated with Line 6B remediation efforts by $175 million ($24 million after-tax attributable to Enbridge)
  • Enbridge continued to execute its financing plan with the issuance of $600 million of Common Shares and US$400 million of Cumulative Redeemable Preference Shares
  • Enbridge announced a $1.2 billion investment in preferred units of Enbridge Energy Partners, L.P.
  • Enbridge secured a $0.3 billion project to provide terminal services for the Surmont Phase 2 project
  • Enbridge secured a 50% interest in the 300-megawatt Blackspring Ridge Wind Project with an expected investment of $0.3 billion
  • Enbridge agreed to invest $0.2 billion in a project to provide pipeline and terminaling services to the proposed Athabasca Oil Corporation Hangingstone Oil Sands Project
  • Senior Vice President of Enterprise Safety and Operational Reliability appointed to provide central coordination of Enbridge's enterprise wide priority on safety and environmental protection
  • Enbridge and Energy Transfer Partners, L.P. agreed to principal terms for joint development of a project to provide access to the eastern Gulf Coast refinery market

Enbridge Inc. (TSX:ENB) (NYSE:ENB) - "Enbridge's businesses performed well in the first quarter," said Al Monaco, President and Chief Executive Officer, Enbridge Inc. (Enbridge or the Company). "Although we are pleased to be off to a good start, we expect more moderate growth for the balance of the year and we are maintaining our full year adjusted earnings guidance target range of $1.74 to $1.90 per share. We continue to be on track and on budget with the execution of a record number of commercially secured growth projects which we expect will provide a foundation for growth beyond 2013. This includes ten projects which will have at least an initial phase go into service by the end of this year."

Operations

The Company continued to realize strong results from its core businesses in the first quarter of 2013. Significant operating highlights included strong throughput on the Canadian Mainline as the combination of strong supply from the oil sands and wide crude oil price differentials between Canadian and United States midwest refinery markets increased long-haul barrels on the Enbridge system. Liquids Pipelines earnings for the first three months of the year were further bolstered by contributions from recently sanctioned assets, including the startup of the Wood Buffalo and Woodland pipelines, as well as earnings from the Company's interest in the Seaway Crude Pipeline System (Seaway Pipeline), which commenced preliminary service in May 2012 and was further expanded in January 2013. Energy Services had another strong quarter as wide location and crude grade differentials provided attractive arbitrage opportunities. Enbridge Gas Distribution Inc. (EGD) also contributed to the overall earnings growth quarter-over-quarter; however, due to the quarterly timing of revenues and costs, EGD is expected to deliver full year results that are comparable with the prior year.

Within Sponsored Investments, the stable performance of the liquids pipelines assets within Enbridge Energy Partners, L.P. (EEP) was offset by a decrease in earnings from its gas gathering and processing businesses which continued to be challenged by the low natural gas and natural gas liquids commodity price environment. In March, EEP received an order from the United States Environmental Protection Agency (EPA) (the Order) requiring additional containment and active recovery of submerged oil relating to the 2010 Line 6B crude oil release. As a result of the Order, EEP recognized an additional accrual of US$175 million ($24 million after-tax attributable to Enbridge) in the first quarter. Contributions from Enbridge Income Fund (the Fund) in the first quarter reflected a full quarter of earnings from renewable energy and crude oil storage assets dropped down to the Fund in late 2012; however, this increase was offset by a small one-time write-off of a regulatory deferral account.

The Company's earnings will continue to reflect, as was the case in the first quarter of 2013, changes in unrealized mark-to-market accounting impacts related to the comprehensive long-term economic hedging program Enbridge has in place to mitigate exposures to interest rate variability and foreign exchange, as well as commodity prices. The Company believes that the hedging program supports the generation of reliable cash flows and dividend growth.

Continued Growth

Addressing crude oil market access challenges continues to be a key driver of Enbridge's growth strategy.

"Increasing North American supply is resulting in a shortage of pipeline takeaway capacity to the right markets. We recognized the importance of reducing transportation bottlenecks some time ago, and we've been working with our customers to find solutions - from improving the efficiency of our liquids pipelines systems to a full suite of market access initiatives that will open new or expanded markets as they come into service this year and next, and all of them are expected to be operating by 2016. These projects will add significant value for our customers and our shareholders," said Mr. Monaco.

Since the beginning of the year, Enbridge has continued to add to its already robust portfolio of commercially secured growth projects.

In Liquids Pipelines, Enbridge announced new agreements with regional oil sands shippers for facilities and transportation services. In March, Enbridge agreed to invest $0.2 billion in a project to provide pipeline and terminaling services to the proposed Athabasca Oil Corporation's (AOC) Hangingstone Oil Sands Project (AOC Hangingstone). Enbridge subsequently announced in May, an agreement with ConocoPhillips Canada Resources Corp. and Total E&P Canada Ltd. (the ConocoPhillips Surmont Partnership) to expand existing infrastructure at the Enbridge Cheecham Terminal to accommodate incremental bitumen production from Surmont's Phase 2 expansion.

"Enbridge is working collaboratively with Alberta producers to deliver transportation solutions that are innovative and cost-effective," said Mr. Monaco. "The reach and flexibility of our existing regional oil sands systems enable us to meet our customers' near-term needs as well as offer scalability to accommodate their future growth."

Enbridge, with joint venture partner Enterprise Products Partners, L.P. (Enterprise), also completed the addition of further pump stations on the Seaway Pipeline, increasing that system's available capacity out of the Cushing, Oklahoma hub to up to 400,000 barrels per day (bpd) depending on crude oil slate. Actual throughput experienced in the first quarter of 2013 was curtailed due to third party takeaway constraints. These constraints are expected to be eliminated in the fourth quarter of 2013 when a lateral from the Seaway Jones Creek tankage to the ECHO crude oil terminal (ECHO Terminal) is completed. However, capacity is also expected to be limited by increased nominations of heavy crude oil until the first quarter of 2014 when the Seaway Pipeline twin is expected to come into service.

"Enbridge continues to advance initiatives to offer new market access options for producers with an emphasis on adding capacity to reach the best markets," said Mr. Monaco. "With the increased capacity on the existing Seaway Pipeline from Cushing to the Western Gulf Coast now in service and serving Houston area refineries, we and our partner, Enterprise are now focused on bringing the Seaway Pipeline twinning into service with another 450,000 bpd of capacity. We are very pleased that this project is running ahead of schedule and is now expected to be available for service in the first quarter of 2014.

"We also announced in February 2013 a new project to create the first pipeline transportation option from the mid-continent to the Eastern Gulf Coast market. With our joint venture partner, Energy Transfer Partners, L.P. we are making progress in developing the Eastern Gulf Crude Access Pipeline, a project to reverse and repurpose an existing, underutilized gas pipeline. Capitalizing on existing infrastructure is key to minimizing the industry's footprint and delivering solutions faster and at lower cost than new build."

In January 2013, the Company announced the further expansion of its mainline system, in both Canada and the United States, by an additional 230,000 bpd, providing greater capacity for producers in the face of increasing North American crude oil supply.

The Bakken remains a core focus for Enbridge and the Bakken Expansion Program was completed and placed into service in March 2013, complemented by the commencement of operations at the Berthold Rail facility in North Dakota.

In April 2013, EEP announced plans to construct the Beckville cryogenic natural gas processing plant, which will bring EEP's processing capacity to approximately 820 million cubic feet per day (mmcf/d) in the Cotton Valley and Haynesville shale regions.

"Execution is one of our top priorities and maintaining and strengthening this core competency is critical to achieving our growth objectives," said Mr. Monaco. "We remain on or ahead of schedule and on or under budget on the majority of our 33 projects currently under development."

Expanding its renewable power platform, Enbridge announced in April the securement of a 50% interest in the development of Blackspring Ridge Wind Project (Blackspring Ridge).

"Blackspring Ridge is the largest wind project in Western Canada and will add significant generating capacity to our green energy portfolio, reinforcing our position as Canada's second largest generator of wind power," said Mr. Monaco. "The site has an excellent wind resource and access to transmission, with the price of electricity substantially fixed through long-term contracts to be sold into the Alberta power pool. In addition to the strong risk-reward profile of these investments, growing our renewable assets contributes to our ability to meet, and exceed, our Neutral Footprint program commitment to generate a kilowatt of renewable energy for every additional kilowatt of power used in our operations. The acquisition of Blackspring Ridge brings our Enbridge-wide interest in renewable generation up to 1,600 megawatts."

In May, Enbridge announced it entered into an agreement to invest $1.2 billion in preferred units issued by EEP to reduce the amount of third party financing required by EEP to fund its share of the Company's organic growth program. Concurrent with the issuance, EEP also announced it expects to exercise its option in both the Eastern Access and Lakehead System Mainline Expansion Joint Funding Agreements to reduce its economic interest and associated funding of these respective projects from 40% to 25% by the June 30, 2013 deadline. EEP will retain the option to increase its economic interest back up to 40% in both projects within one year of the final project in-service dates.

"This financing arrangement and the exercise of the joint funding option will enable EEP to finance its $8.5 billion in growth projects in the most efficient manner with the most amount of flexibility for EEP, benefitting both EEP and Enbridge," said Mr. Monaco.

Enbridge's focus on safety and operational reliability was reinforced in January with the appointment of a new Senior Vice President to provide central coordination of these priorities across the enterprise.

"Our number one goal is achieving industry leadership in the reliability and integrity of our pipelines and facilities, and protection of the environment," said Mr. Monaco. "Being a leader in these areas enables everything else we do - including sustaining the growth of our company into the future."

"Enbridge's top three priorities of safety and operational reliability, execution and extending our growth beyond 2016 will continue to drive our decisions and actions over coming years," concluded Mr. Monaco. "Our value proposition is strong - we're well positioned to expand and to extend into new markets, enabling us to create value for our customers and our shareholders. We have confidence that we'll be able to maintain our industry-leading growth."

FIRST QUARTER 2013 OVERVIEW

For more information on Enbridge's growth projects and operating results, please see the Management's Discussion and Analysis (MD&A) which is filed on SEDAR and EDGAR and also available on the Company's website at www.enbridge.com/InvestorRelations.aspx. We further draw your attention to Note 2, Revision of Prior Period Financial Statements to the Consolidated Financial Statements as at and for the three months ended March 31, 2013 which discusses a non-cash revision to comparative financial statements. The discussion and analysis included herein is based on revised financial results for the three months ended March 31, 2012.

  • Earnings attributable to common shareholders decreased from $261 million in the first quarter of 2012 to $250 million in the first quarter of 2013. The Company has delivered significant earnings growth from operations quarter-over-quarter; however, the positive impact of this growth was more than offset by a number of unusual, non-recurring or non-operating factors, the most significant of which are changes in unrealized derivative fair value gains or losses. Earnings for the three months ended March 31, 2013 were also negatively impacted by the Order relating to the 2010 Line 6B crude oil release, which resulted in an additional accrual of US$175 million ($24 million after-tax attributable to Enbridge) relating to increased additional work required by the Order. Significant operating highlights for the first quarter of 2013 included strong volumes on several Liquids Pipelines assets and contributions from new assets recently placed into service, including the Seaway Pipeline, as well as strong results from both EGD and Energy Services.
  • Enbridge's adjusted earnings for the first quarter of 2013 increased to $488 million from $373 million in the comparative period of 2012. This reflected higher volume throughput and tolls, specifically a higher Canadian Mainline International Joint Tariff Residual Benchmark Toll. Demand for discounted Canadian crude by midwest refiners remained high and drove an increase in long-haul barrels. Higher contracted volumes and new assets placed into service in late 2012 on the Regional Oil Sands System and a full quarter of operations from Enbridge's 50% interest in the Seaway Pipeline, as well as stronger contributions from EGD and Energy Services, also contributed to the adjusted earnings increase. Partially offsetting the adjusted earnings increase were higher preference share dividends related to preference share issuances completed to pre-fund commercially secured growth projects.
  • In the first quarter of 2013, the Company amended its policy for certain operations related to recognition of a regulatory asset equal to the cumulative amount of depreciation expense not yet recovered in tolls but required to be recovered in future tolls under the terms of applicable long term shipper contracts and as approved by federal regulatory authorities. The Company's historic accounting treatment was first adopted in 1999. The Company's auditors, PwC LLP (PwC), agreed with this treatment. Accounting guidance found in ASC 980-340 (previously FAS 92) was deemed to be not applicable to the Company's circumstances given the high degree of assurance over collectability of the regulatory asset afforded by the long-term contracts. Management applied its policy consistently from 1999 to 2012.

    In April 2013, Management became aware that the predominant view among accounting authorities is now that FAS 92 represents a blanket prohibition on the recognition of such regulatory assets. The Company has prepared its financial statements for the three months ended March 31, 2013 following the method now viewed to be appropriate by Management and its auditors, PwC, and will apply this method going forward. Financial statements for prior periods have been revised to permit comparability on a consistent basis. The new method has no effect on cash flow, past or future, and the revisions to the historical periods are not material.
  • On May 8, 2013, Enbridge announced it entered into an agreement to invest $1.2 billion in preferred units issued by EEP. EEP will use the proceeds to finance a portion of its commercially secured growth projects, to repay commercial paper and for general partnership purposes. The preferred units, with a price per unit of $25 (par value), will have a fixed yield of 7.5%, with the rate to be reset every five years. Under the preferred units terms, quarterly cash distributions will not be payable in cash during the first eight quarters and will be added to the redemption value. Quarterly cash distributions will be payable beginning in the ninth quarter and deferred distributions are payable on the fifth anniversary or when redemption of the units takes place. The preferred units will be redeemable at EEP's option on the five-year anniversary of the issuance and every fifth year thereafter, at par and including the deferred distribution. Earlier redemption is permitted under certain events including the ability to redeem the preferred units using the net proceeds from EEP's equity issuances or from the sale of assets and from the issuance of debt, in equal amounts. In the event that the preferred units have not been redeemed in full at the fifth anniversary to the issuance, the deferred distribution will be payable at that time. In addition, on or after June 1, 2016, at Enbridge's sole option, the preferred units can be converted into approximately 43.2 million common units of EEP.
  • Also on May 8, 2013, EEP announced it expects to exercise the option to reduce its funding and associated economic interest in both the Eastern Access project and Lakehead System Mainline Expansion project from 40% to 25% by the June 30, 2013 deadline. The projects are co-funded by Enbridge and EEP. EEP retains the option to increase its economic interest held in each of the projects by up to 15% within one year of the respective final in-service dates.
  • On May 7, 2013, Enbridge announced it had entered into a terminal services agreement with the ConocoPhillips Surmont Partnership to expand existing infrastructure at Enbridge's existing Cheecham Terminal to accommodate incremental bitumen production from Surmont's Phase 2 expansion. The Company will construct two new 450,000 barrel blend tanks and convert an existing tank from blend to diluent service, install receipt and distribution manifolds to facilitate transfers to the Waupisoo Pipeline and upgrade associated measurement equipment. The expansion is expected to come into service in two phases through the fourth quarter of 2014 and first quarter of 2015, at an approximate cost of $0.3 billion.
  • On April 30, 2013, EEP announced plans to construct a cryogenic natural gas processing plant near Beckville (Beckville Plant) in Panola County, Texas, at an expected cost of approximately US$0.1 billion. The Beckville Plant will offer incremental processing capacity for existing and future customers in the Cotton Valley shale region where EEP's East Texas system is located. The Beckville Plant has a planned capacity of 150 mmcf/d and construction of the plant and associated facilities is anticipated to begin in late 2013, with an expected in-service date of 2015.
  • On April 8, 2013, Enbridge secured a 50% interest in the development of the 300-megawatt Blackspring Ridge project, located 50 kilometres (31 miles) north of Lethbridge, Alberta in Vulcan County. The project will be constructed under a fixed price engineering, procurement and construction contract and is expected to be completed by mid-2014. Renewable Energy Credits generated from Blackspring Ridge are contracted to Pacific Gas and Electric Company under a 20-year purchase agreement. The electricity will be sold into the Alberta power pool with pricing fixed on 75% of production through long-term contracts. The Company's total investment in the project is expected to be approximately $0.3 billion.
  • On April 1, 2013, the Fund announced it concluded a settlement (the Settlement) with a group of shippers relating to new tolls on the Westspur System. Pursuant to the Settlement, the tolls on the Westspur System will be fixed and increased annually with reference to a pre-identified inflation index, subject to throughput remaining within a volume band close to volumes recently transported on the Westspur System. The Settlement resulted in an after-tax write-down of approximately $12 million ($4 million after-tax attributable to Enbridge) in the first quarter of 2013 related to a deferred regulatory asset which is not expected to be collected under the terms of the Settlement. At the request of certain shippers who did not execute the Settlement, the National Energy Board has not removed the interim status from the historical tolls and has made the new tolls interim as well. As of May 7, 2013, the Fund continues to work with shippers to resolve the matter.
  • On March 21, 2013, Enbridge announced it entered into an agreement with AOC to provide pipeline and terminaling services to the proposed AOC Hangingstone project in Alberta. Subject to finalization of scope, Phase I of the project will involve construction of a new 47-kilometre (29-mile), 16-inch diameter pipeline from the AOC Hangingstone project site to Enbridge's existing Cheecham Terminal, and related facility modifications at Cheecham. Phase I of the project will provide an initial capacity of 16,000 bpd. Phase 2 of the project, which is subject to commercial approval, would provide up to an additional 60,000 bpd for a total of 76,000 bpd. Subject to regulatory and other approvals, the Phase I facilities are expected to be placed into service in 2015 at an estimated cost of approximately $0.2 billion.
  • On March 14, 2013, EEP received a letter from the EPA with the Order requiring additional containment and active recovery of submerged oil relating to the July 2010 Line 6B leak in Michigan. EEP estimates it will incur additional costs of approximately US$175 million ($24 million after-tax attributable to Enbridge) for the additional work required by the Order. The estimate is an increase to the total estimated costs of US$820 million ($137 million after-tax attributable to Enbridge) related to the Line 6B leak accrual recognized as at December 31, 2012 and excludes fines and penalties. The actual costs incurred may differ from the foregoing estimate as EEP discusses its work plan with the EPA and other regulatory agencies to assure its work plan complies with their requirements. For the three month period ended March 31, 2013, EEP did not receive any payments for insurance receivable claims.
  • On February 15, 2013, Enbridge announced it entered into an agreement with Energy Transfer Partners, L.P. (Energy Transfer) on the terms for joint development of a project to provide access to the eastern Gulf Coast refinery market from the Patoka, Illinois hub. Subject to Federal Energy Regulatory Commission approval, the project will involve the conversion from natural gas service of certain segments of pipeline that are currently in operation as part of the natural gas system of Trunkline Gas Company, LLC, a wholly owned subsidiary of Energy Transfer and Energy Transfer Equity, L.P. The converted pipeline is expected to have a capacity of up to 420,000 bpd to 660,000 bpd, depending on crude slate and the level of subscriptions received in an open season, and is expected to be in service by early 2015. Enbridge and Energy Transfer would each own a 50% interest in the venture. Enbridge's participation in the venture is subject to a minimum level of commitments being obtained in the open season and on completion of due diligence on the conversion cost. Depending on the level of commitments and finalization of scope and capital cost estimates, Enbridge expects to invest approximately US$1.2 billion to US$1.7 billion.
  • On January 11, 2013, Enbridge and its partner Enterprise announced completion of pump station additions and modifications to increase capacity on the Seaway Pipeline available to shippers to approximately 400,000 bpd depending on crude oil slate, an increase from the previous capacity of approximately 150,000 bpd. To date in 2013, actual throughput has been curtailed due to constraints on third party takeaway facilities. A lateral from the Seaway Jones Creek facility to Enterprise's ECHO Terminal in Houston, Texas should eliminate these constraints when it comes into service, expected in the fourth quarter of 2013. However, capacity is also expected to be limited by increased nominations of heavy crude oil until the Seaway Pipeline twin comes into service in the first quarter of 2014.
  • On January 4, 2013, Enbridge announced a further expansion of the Canadian Mainline system between Hardisty, Alberta and the Canada/United States border near Gretna, Manitoba, at an estimated cost of $0.4 billion, along with an announcement to further expand the Lakehead System owned by EEP between Neche, North Dakota and Superior, Wisconsin, at an estimated cost of US$0.2 billion. Subject to regulatory approval, the expansion involves the addition of pumping horsepower sufficient to raise the capacity of both the Canadian Mainline and the Lakehead System by another 230,000 bpd. This expansion is expected to be in service in 2015. The announcement was in addition to the Company's May 2012 announcement of a project to raise capacity on the same sections of the Canadian Mainline and the Lakehead System by 120,000 bpd at an approximate cost of $0.2 billion and US$0.2 billion, respectively, with an expected in-service of mid-2014.

Since the end of 2012, the Company completed the following financing transactions:

  • In May 2013, an Enbridge subsidiary secured a US$500 million revolving credit facility, bringing Enbridge's enterprise-wide general purpose credit facilities to $14.4 billion.
  • On April 16, 2013, Enbridge completed an offering of 13 million Common Shares for gross proceeds of approximately $600 million.
  • On March 27, 2013, Enbridge completed an offering of 16 million Cumulative Redeemable Preference Shares, Series 1, for gross proceeds of US$400 million.
  • On March 1, 2013, Enbridge Energy Management, L.L.C. (EEM) completed the issuance of 10.4 million Listed Shares for net proceeds of approximately US$273 million. EEM subsequently used the net proceeds from the offering to invest in an equal number of i-units of EEP.
  • On February 26, 2013, Enbridge Income Fund Holdings Inc. (ENF) completed the issuance of 3.8 million common shares for gross proceeds of $96 million. ENF subsequently used the proceeds from the issuance of common shares to subscribe for common units of the Fund.
  • In February 2013, EEP increased its 364-day credit facility to $1.1 billion.

DIVIDEND DECLARATION

On April 23, 2013, the Enbridge Board of Directors declared the following quarterly dividends. All dividends are payable on June 1, 2013 to shareholders of record on May 15, 2013.

Common Shares $0.31500
Preference Shares, Series A $0.34375
Preference Shares, Series B $0.25000
Preference Shares, Series D $0.25000
Preference Shares, Series F $0.25000
Preference Shares, Series H $0.25000
Preference Shares, Series J US$0.25000
Preference Shares, Series L US$0.25000
Preference Shares, Series N $0.25000
Preference Shares, Series P $0.25000
Preference Shares, Series R $0.25000
Preference Shares, Series 11 US$0.18080
1 This is the first dividend declared for Preference Shares, Series 1.

CONFERENCE CALL

Enbridge will hold a conference call on Wednesday, May 8, 2013 at 9:00 a.m. Eastern Time (7:00 a.m. Mountain Time) to discuss the first quarter 2013 results. Analysts, members of the media and other interested parties can access the call toll-free at 1-800-447-0521 from within North America and outside North America at 1-847-413-3238, using the access code of 34629096. The call will be audio webcast live at www.enbridge.com/Q1. A webcast replay and podcast will be available approximately two hours after the conclusion of the event and a transcript will be posted to the website within 24 hours. The replay will be available toll-free at 1-888-843-7419 within North America and outside North America at 1-630-652-3042 (access code 34629096) until May 15, 2013.

The conference call will begin with presentations by the Company's President and Chief Executive Officer and the Chief Financial Officer, followed by a question and answer period for investment analysts. A question and answer period for members of the media will then immediately follow.

Enbridge Inc. is a North American leader in delivering energy and has been included on the Global 100 Most Sustainable Corporations in the World ranking for the past five years. As a transporter of energy, Enbridge operates, in Canada and the U.S., the world's longest crude oil and liquids transportation system. The Company also has a significant and growing involvement in the natural gas gathering transmission and midstream businesses, and an increasing involvement in power transmission. As a distributor of energy, Enbridge owns and operates Canada's largest natural gas distribution company, and provides distribution services in Ontario, Quebec, New Brunswick and New York State. As a generator of energy, Enbridge has interests in over 1,600 megawatts of renewable and alternative energy generating capacity and is expanding its interests in wind, solar and geothermal energy. Enbridge employs more than 10,000 people, primarily in Canada and the U.S., and is ranked as one of Canada's Greenest Employers, and one of Canada's Top 100 Employers for 2013. Enbridge is included on the 2012/2013 Dow Jones Sustainability World Index and the Dow Jones Sustainability North American Index. Enbridge's common shares trade on the Toronto and New York stock exchanges under the symbol ENB. For more information, visit www.enbridge.com. None of the information contained in, or connected to, Enbridge's website is incorporated in or otherwise part of this news release.

Forward-Looking Information

Forward-looking information, or forward-looking statements, have been included in this news release to provide the Company's shareholders and potential investors with information about the Company and its subsidiaries and affiliates, including management's assessment of Enbridge's and its subsidiaries' future plans and operations. 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. Forward-looking information or statements included or incorporated by reference in this document include, but are not limited to, statements with respect to: expected earnings/(loss) or adjusted earnings/(loss); expected earnings/(loss) or adjusted earnings/(loss) per share; expected future cash flows; expected costs related to projects under construction; expected in-service dates for projects under construction; expected capital expenditures; estimated future dividends; and expected costs related to leak remediation and potential insurance recoveries.

Although Enbridge believes these forward-looking statements are reasonable based on the information available on the date such statements are made and processes 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, natural gas liquids (NGL) and green energy; prices of crude oil, natural gas, NGL and green energy; expected exchange rates; inflation; interest rates; the availability and price of labour and pipeline construction materials; operational reliability; customer and regulatory approvals; maintenance of support and regulatory approvals for the Company's projects; anticipated in-service dates; and weather. Assumptions regarding the expected supply and demand of crude oil, natural gas, NGL and green energy, and the prices of these commodities, are material to and underlie 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 Company's services. Similarly, exchange rates, inflation and interest rates impact the economies and business environments in which the Company operates, may impact levels of demand for the Company'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/(loss) or adjusted earnings/(loss) and associated per share amounts, or estimated future dividends. The most relevant assumptions associated with forward-looking statements on projects under construction, including estimated in-service date and expected capital expenditures include: the availability and price of labour and construction materials; the effects of inflation and foreign exchange rates 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.

Enbridge's forward-looking statements are subject to risks and uncertainties pertaining to operating performance, regulatory parameters, project approval and support, weather, economic and competitive conditions, tax rate increases, exchange rates, interest rates, commodity prices and supply and demand for commodities, including but not limited to those risks and uncertainties discussed in this news release and in the Company's other filings with Canadian and United States 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 Enbridge'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, Enbridge assumes 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 Enbridge or persons acting on the Company's behalf, are expressly qualified in their entirety by these cautionary statements.

NON-GAAP MEASURES

This news release contains references to adjusted earnings/(loss), which represent earnings or loss attributable to common shareholders 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 of the MD&A for the affected business segments. Management believes the presentation of adjusted earnings/(loss) provides useful information to investors and shareholders as it provides increased transparency and predictive value. Management uses adjusted earnings/(loss) to set targets, assess performance of the Company and set the Company's dividend payout target. Adjusted earnings/(loss) and adjusted earnings/(loss) for each of the segments are not measures that have a standardized meaning prescribed by U.S. GAAP and are not considered GAAP measures; therefore, these measures may not be comparable with similar measures presented by other issuers.

NON-GAAP RECONCILIATIONS

Three months ended
March 31,
2013 2012
(millions of Canadian dollars)
Earnings attributable to common shareholders 250 261
Adjusting items:
Liquids Pipelines
Canadian Mainline - changes in unrealized derivative fair value (gains)/loss 72 (27 )
Canadian Mainline - Line 9 tolling adjustment - (6 )
Gas Distribution
EGD - warmer than normal weather 6 24
Gas Pipelines, Processing and Energy Services
Aux Sable - changes in unrealized derivative fair value gains - (7 )
Energy Services - changes in unrealized derivative fair value loss 30 154
Sponsored Investments
EEP - leak remediation costs 24 -
EEP - changes in unrealized derivative fair value loss 1 -
EEP - NGL trucking and marketing investigation costs - 1
Corporate
Noverco - changes in unrealized derivative fair value gains (1 ) -
Noverco - equity earnings adjustment - 12
Other Corporate - changes in unrealized derivative fair value (gains)/loss 105 (10 )
Other Corporate - foreign tax recovery (4 ) (29 )
Other Corporate - tax rate differences/changes 5 -
Adjusted earnings 488 373
HIGHLIGHTS
Three months ended
March 31,
2013 2012
(unaudited; millions of Canadian dollars, except per share amounts)
Earnings attributable to common shareholders 1
Liquids Pipelines 147 183
Gas Distribution 107 78
Gas Pipelines, Processing and Energy Services 29 (106 )
Sponsored Investments 42 66
Corporate (75 ) 40
250 261
Earnings per common share1 0.32 0.34
Diluted earnings per common share1 0.31 0.34
Adjusted earnings 1,2
Liquids Pipelines 219 150
Gas Distribution 113 102
Gas Pipelines, Processing and Energy Services 59 41
Sponsored Investments 67 67
Corporate 30 13
488 373
Adjusted earnings per common share1 0.62 0.49
Cash flow data
Cash provided by operating activities 793 648
Cash used in investing activities (1,643 ) (928 )
Cash provided by financing activities 420 663
Dividends
Common share dividends declared 254 221
Dividends paid per common share 0.3150 0.2825
Shares outstanding (millions)
Weighted average common shares outstanding 789 757
Diluted weighted average common shares outstanding 801 769
Operating data
Liquids Pipelines - Average deliveries (thousands of barrels per day)
Canadian Mainline3 1,783 1,687
Regional Oil Sands System4 462 333
Spearhead Pipeline 165 144
Gas Distribution - Enbridge Gas Distribution (EGD)
Volumes (billions of cubic feet) 181 161
Number of active customers (thousands) 5 2,042 2,001
Heating degree days6
Actual 1,798 1,490
Forecast based on normal weather 1,871 1,770
Gas Pipelines, Processing and Energy Services - Average throughput volume (millions of cubic feet per day)
Alliance Pipeline US 1,632 1,632
Vector Pipeline 1,720 1,754
Enbridge Offshore Pipelines 1,452 1,501
(1) Earnings attributable to common shareholders and Adjusted earnings, along with corresponding per common share amounts, for the three months ended March 31, 2012 have been revised. See Note 2 to the March 31, 2013 Consolidated Financial Statements.
(2) Adjusted earnings represent earnings attributable to common shareholders adjusted for non-recurring or non-operating factors. Adjusted earnings and adjusted earnings per common share are non-GAAP measures that do not have any standardized meaning prescribed by GAAP.
(3) Canadian Mainline includes deliveries ex-Gretna, Manitoba which is made up of United States and eastern Canada deliveries originating from western Canada.
(4) Volumes are for the Athabasca mainline and Waupisoo Pipeline and exclude laterals on the Regional Oil Sands System.
(5) Number of active customers is the number of natural gas consuming EGD customers at the end of the period.
(6) Heating degree days is a measure of coldness that is indicative of volumetric requirements for natural gas utilized for heating purposes in EGD's franchise area. It is calculated by accumulating, for the fiscal 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 Greater Toronto Area.

FOR FURTHER INFORMATION PLEASE CONTACT:

Contact Information:
Enbridge Inc.
Media
Jennifer Varey
(403) 508-6563 or Toll Free: 1-888-992-0997
jennifer.varey@enbridge.com


Enbridge Inc.
Investment Community
Jody Balko
(403) 231-5720
jody.balko@enbridge.com

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