CALGARY, Dec. 10, 2019 /PRNewswire/ - Enbridge Inc.
(Enbridge or the Company) (TSX:ENB)(NYSE:ENB) announced its 2020
dividend and financial guidance and provided an update on its
strategic priorities, which will be further discussed at the
Company's investor conference today in New York.
Highlights
- A 9.8% increase in the Company's common share dividend to
$0.81/quarter ($3.24 annually), effective March 1, 2020.
- Updated 2020 financial guidance: EBITDA of approximately
$13.7 billion; DCF per share of
$4.50 to $4.80 per share
- Re-affirmation of 5%-7% average long term annual DCF per share
growth outlook, based on an equity self-funded model
- Advancement of Liquids Pipelines U.S. Gulf Coast integrated
value chain strategy
- Canadian segment of the Line 3 Replacement project placed into
service
- Additional spill modelling work on Line 3 Replacement project
completed; revised Final Environmental Impact Statement (FEIS)
submitted to Minnesota Public Utilities Commission (MPUC)
- Regulatory application for Liquids Mainline contracting
expected to be filed before year-end
Strategic Plan
In 2019, Enbridge successfully completed the 3-year strategic
plan it set out following the acquisition of Spectra Energy in
early 2017. Since the acquisition, the Company has fully integrated
the Spectra assets, streamlined its business portfolio through
$8 billion of non-core asset sales,
substantially simplified its corporate structure through the buy-in
of four sponsored vehicles, and significantly enhanced its
financial strength and flexibility, all while continuing to deliver
solid operating and financial performance. Today, Enbridge's low
risk profile, diversified business mix and strategically located
assets generate highly reliable cash flows and the Company is well
positioned for continued growth.
In its 2020 Strategic Plan, the Company is focused on
maintaining resilience and prudently growing its three world-class
core franchises: Liquids Pipelines, Gas Transmission, and Gas
Distribution and Storage. Specific priorities include:
- Ensuring safe and reliable operations and provision of
effective and cost-efficient transportation solutions for
customers
- Enhance the business through asset optimization, cost
efficiencies and low-risk growth
- Executing on $11 billion secured
growth capital program, including the U.S. segment of the Line 3
Replacement project
- Growing core businesses through capital efficient organic
growth, disciplined capital allocation, and preservation of balance
sheet strength and flexibility
CEO Comment
Commenting on the strategic plan, Al
Monaco, President and CEO of Enbridge noted: "Our assets are
essential to meeting North
America's standard of living and economic growth. With the
significant repositioning of the Company now complete following the
Spectra transaction, our asset base and low risk business model
position us very well for the future.
"While we make changes to our plans and priorities to adapt to
the business environment, one thing that will always stay the same
is our focus on the safety and reliability of our systems – this is
the single most important priority for everyone at Enbridge.
"In the near term, our emphasis will be on capital efficient
in-franchise growth and executing our secured capital projects.
We'll continue to maximize operational and financial performance to
provide unique value to our customers. Over the medium to longer
term, Enbridge's diversified asset base, integrated infrastructure
networks and extensive reach provide us with many opportunities to
extend growth. Post 2020, we expect embedded growth and new organic
opportunities to generate annual DCF/share growth of 5-7%, on
average, within a self-funded model.
"We will maintain a disciplined approach to capital allocation.
Our near-term priorities on that front are unchanged, as we focus
on preserving our strong balance sheet, returning capital to
shareholders through our dividend and executing on low risk,
capital efficient organic growth opportunities.
"For the last 25 years, we've reliably grown the business and
returned capital to shareholders through our dividend, which has
consistently grown by 11% annually on average over this time frame.
We are pleased to be providing our shareholders with another strong
dividend increase for 2020, which reflects the strength of our
business, our confidence in the future and our ability to meet the
needs of our customers during both attractive and challenging
commodity cycles and industry conditions."
2020 Financial Outlook
Enbridge provided updated guidance for earnings before interest,
taxes, depreciation and amortization (EBITDA) for 2020 of
approximately $13.7 billion and an
updated guidance range of distributable cash flow per share
(DCF/share) for 2020 of $4.50 to
$4.80 per share.
Separately, Enbridge announced that the quarterly dividend for
2020 will be increased by 9.8% to $0.81 per share,
commencing with the dividend payable on March 1, 2020, to
shareholders of record on February 14, 2020.
Business Development Updates
Liquids USGC Strategy
Yesterday, Enbridge announced a letter of intent with Enterprise
Products Partners L.P. to jointly develop the U.S. Gulf Coast
(USGC) deep-water Sea Port Oil Terminal export facility capable of
fully loading Very Large Crude Carriers, subject to the facility
receiving a deep-water port license. In addition, Enbridge will
advance the development of the Jones Creek Crude Oil Terminal,
which will be fully integrated with the Seaway pipeline system and
will provide connectivity to local refineries as well as export
facilities. In addition to already announced plans to consider an
expansion of the Seaway system, these initiatives represent a
significant step in Enbridge's USGC strategy to provide customers
with enhanced flexibility and last mile connectivity for light and
heavy crude shipments to export markets and local refineries.
Line 3 Replacement
On December 1, Enbridge began
service on the Canadian segment of the Line 3 Replacement project.
This will enhance the safety and reliability of the system in
Canada while providing additional
Mainline flexibility.
On December 9, the MPUC advised
that the Minnesota Department of Commerce has issued an amended
FEIS to reflect additional spill modelling work as directed by the
Minnesota Court of Appeals. The
MPUC has initiated a public comment period on the adequacy of the
FEIS and what actions the MPUC should take with respect to the
Certificate of Need and Route Permit. The public comment period
closes on January 16, 2020 and
provides for a one-day oral comment session for the public on
December 19, 2019.
The Company will require further clarity on regulatory and
permitting process and timing before it is in a position to assess
the implications to the in-service date of the U.S. segment of the
pipeline.
Mainline Contracting
Today, Enbridge notified the Canada Energy Regulator that it
intends to file a regulatory application for contracting the
Mainline system before the end of the year. Enbridge has strong
support for this application from a cross section of producers,
integrated producers and refiners representing a significant share
of current system throughput and through its evidence will
demonstrate that its proposed contract offering addresses customer
needs and serves the public intertest.
Details of Enbridge's Investor Conference
Enbridge will hold its annual investor conference to discuss the
Company's strategic plan and financial outlook at 8:00 a.m.
ET on Tuesday, December 10th, in New York
City.
The conference will be webcast live on the Company's website and
can be accessed via the following link: Sign-up
About Enbridge Inc.
Enbridge Inc. is a leading North American energy
infrastructure company. We safely and reliably deliver the energy
people need and want to fuel quality of life. Our core businesses
include Liquids Pipelines, which transports approximately 25
percent of the crude oil produced in North America; Gas Transmission and Midstream,
which transports approximately 20 percent of the natural gas
consumed in the U.S.; and Utilities and Power Operations, which
serves approximately 3.7 million retail customers in Ontario and Quebec, and generates approximately 1,750 MW
of net renewable power in North
America and Europe. The
Company's common shares trade on the Toronto and New
York stock exchanges under the symbol ENB. For more
information, visit www.enbridge.com
Forward-Looking Information
Forward-looking information, or forward-looking statements,
have been included in this news release to provide information
about Enbridge and its subsidiaries and affiliates, including
management's assessment of our and our 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", "believe", "estimate", "expect",
"forecast", "intend", "likely", "plan", "project", "target" 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 the following: expected
earnings before interest, income taxes and depreciation and
amortization (EBITDA); expected earnings/(loss); expected
earnings/(loss) per share; expected future cash flows and
distributable cash flow (DCF) per share; expected future dividends;
expected performance of the Liquids Pipelines, Gas Transmission and
Midstream, Gas Distribution and Storage, Renewable Power Generation
and Transmission, and Energy Services businesses; financial
strength and flexibility; expectations on sources of liquidity and
sufficiency of financial resources; expected costs related to
announced projects and projects under construction; expected
in-service dates for announced projects and projects under
construction; expected capital expenditures; expected equity
funding requirements for our commercially secured growth program;
expected future growth and expansion opportunities; expectations
about our joint venture partners' ability to complete and finance
projects under construction; expected closing of acquisitions and
dispositions and expected timing thereof; expected future actions
of regulators and related court proceedings; expectations regarding
commodity prices; supply forecasts; expectations regarding the
impact of the stock-for-stock merger transaction completed on
February 27, 2017 between Enbridge
and Spectra Energy Corp (the Merger Transaction) including our
combined scale, financial flexibility, growth program, future
business prospects and performance; the transactions undertaken to
simplify our corporate structure; Line 3 Replacement Program,
including matters relating to the Minnesota Public Utilities
Commission and other regulators; Mainline System contracting and
the regulatory application with respect thereto; our dividend
payout policy; dividend growth and dividend payout expectation; and
expectations resulting from the successful execution of our 2020
Strategic Plan.
Although we believe 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 following: the expected supply of and
demand for crude oil, natural gas, natural gas liquids (NGL) and
renewable energy; prices of crude oil, natural gas, NGL and
renewable energy; exchange rates; inflation; interest rates;
availability and price of labor and construction materials;
operational reliability; customer and regulatory approvals;
maintenance of support and regulatory approvals for our projects;
anticipated in-service dates; weather; the timing and closing of
acquisitions and dispositions; the realization of anticipated
benefits and synergies of the Merger Transaction; governmental
legislation; the success of integration plans; impact of the
dividend policy on our future cash flows; credit ratings; capital
project funding; expected EBITDA; expected earnings/(loss);
expected earnings/(loss) per share; expected future cash flows and
estimated future dividends. Assumptions regarding the expected
supply of and demand for crude oil, natural gas, NGL and renewable
energy, and the prices of these commodities, are material to and
underlie all forward-looking statements, as they may impact current
and future levels of demand for our services. Similarly, exchange
rates, inflation and interest rates impact the economies and
business environments in which we operate and may impact levels of
demand for our 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 EBITDA, expected earnings/(loss), expected earnings/(loss)
per share, expected future cash flows and DCF per share and
estimated future dividends. The most relevant assumptions
associated with forward-looking statements regarding announced
projects and projects under construction, including estimated
completion dates and expected capital expenditures, include the
following: the availability and price of labor and construction
materials; the effects of inflation and foreign exchange rates on
labor and material costs; the effects of interest rates on
borrowing costs; the impact of weather and customer, government and
regulatory approvals on construction and in-service schedules and
cost recovery regimes.
Our forward-looking statements are subject to risks and
uncertainties pertaining to operating performance, regulatory
parameters, changes in regulations applicable to our business,
acquisitions and dispositions, the realization of anticipated
benefits and synergies of the Merger Transaction and the
transactions undertaken to simplify our corporate structure, our
dividend policy, project approval and support, renewals of
rights-of-way, weather, economic and competitive conditions, public
opinion, changes in tax laws and tax rates, changes in trade
agreements, exchange rates, interest rates, commodity prices,
political decisions and supply of and demand for commodities,
including but not limited to those risks and uncertainties
discussed in this news release and in our 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 our
future course of action depends on management's assessment of all
information available at the relevant time. Except to the extent
required by applicable law, Enbridge Inc. 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 forward-looking
statements, whether written or oral, attributable to us or persons
acting on our behalf, are expressly qualified in their entirety by
these cautionary statements.
Non-GAAP Measures
This news release makes reference to non-GAAP measures,
including distributable cash flow (DCF) and DCF per share. DCF is
defined as cash flow provided by operating activities before the
impact of changes in operating assets and liabilities (including
changes in environmental liabilities) less distributions to
non-controlling interests and redeemable non-controlling interests,
preference share dividends and maintenance capital expenditures,
and further adjusted for unusual, non-recurring or non-operating
factors. Management uses DCF to assess performance of the Company
and to set its dividend payout target. Management believes the
presentation of these measures gives useful information to
investors and shareholders as they provide increased transparency
and insight into the performance of the Company.
Reconciliations of forward-looking non-GAAP financial
measures to comparable GAAP measures are not available due to the
challenges and impracticability with estimating some of the items,
particularly certain contingent liabilities and non-cash unrealized
derivative fair value losses and gains which are subject to market
variability. Because of those challenges, a reconciliation of
forward-looking non-GAAP financial measures is not available
without unreasonable effort.
The non-GAAP measures described above are not measures that
have a standardized meaning prescribed by generally accepted
accounting principles in the United
States of America (U.S. GAAP) and are not U.S. GAAP
measures. Therefore, these measures may not be comparable with
similar measures presented by other issuers. A reconciliation of
historical non-GAAP measures to the most directly comparable GAAP
measures is available on the Company's website. Additional
information on non-GAAP measures may be found on the Company's
website, www.sedar.com or www.sec.gov.
FOR FURTHER INFORMATION PLEASE CONTACT:
Media
Jesse Semko
Toll Free: (888) 992-0997
Email: media@enbridge.com
Investment Community
Jonathan Morgan
Toll Free: (800) 481-2804
Email: investor.relations@enbridge.com
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SOURCE Enbridge Inc.