CALGARY,
AB, Nov. 30, 2022 /PRNewswire/ - Enbridge Inc.
(Enbridge or the Company) (TSX: ENB) (NYSE: ENB) announced today
its 2023 financial guidance and an annualized common share dividend
increase from $3.44 to $3.55 per share, or 3.2%, effective March 1, 2023.
HIGHLIGHTS
(All financial figures are unaudited and
in Canadian dollars unless otherwise noted. * identifies non-GAAP
financial measures. See the Non-GAAP and Other Financial Measures
section of this news release)
- Reaffirmed 2022 full year guidance for adjusted earnings before
interest, income taxes and depreciation (EBITDA)* in the top half
of the $15.0 billion to $15.6 billion range and distributable cash flow
(DCF) per share* at just above the midpoint of the $5.20 to $5.50
range
- Announced 2023 EBITDA guidance of $15.9
billion to $16.5 billion and
DCF per share of $5.25 to
$5.65
- Declared 28th consecutive annual common share
dividend increase, raising it by 3.2% to $0.8875 per quarter ($3.55 annualized), effective March 1, 2023
- Announced intent to renew the Company's normal course issuer
bid program for 2023, allowing for the repurchase of up to
$1.5 billion of its outstanding
common shares
CEO COMMENT
Commenting on the Company's outlook, Al
Monaco, President and CEO of Enbridge, noted the
following:
"The global energy crisis is shining a spotlight on the need for
all sources of energy supply to ensure our energy security and
economic competitiveness, while continuing to make progress on
reducing emissions. The crisis also re-affirms the critical role
that Enbridge plays in delivering safe, reliable and affordable
energy each and every day, and our priority to expand North
American energy export infrastructure. Our assets will be an
integral source of energy supply to key markets for decades to
come, and our two-pronged strategy of investing in conventional
energy infrastructure, while ramping up low-carbon investments, has
proven to be the right one.
"Execution of our strategic priorities in 2022 provides a solid
foundation for next year and beyond. Despite challenging global
economic conditions, we expect to generate strong business growth
next year with EBITDA between $15.9
and $16.5 billion, which reflects
just under 6% growth relative to the midpoint of our 2022 guidance
range. This increase stems from a number of factors including
contribution from $3.8 billion of
assets to be placed into service this year, strong expected
utilization of our assets across our core businesses, embedded
revenue escalators, and improved Energy Services results.
"Consistent with our continued positive outlook for our
business, we're pleased to increase our dividend by over 3%,
marking our 28th consecutive annual increase since 1995.
Continuing this track record is consistent with our value
proposition and objective of growing dividends ratably, while
remaining well within our payout range of 60-70% of DCF.
"Since the beginning of this year, we have secured an additional
$8 billion of "middle of the fairway"
organic growth, bringing our secured backlog to $17 billion, executed highly strategic tuck-in
M&A opportunities, and released $1.6
billion in capital at attractive valuations.
"The strength of our core businesses, disciplined approach to
capital allocation, and strong balance sheet places us in a great
position to grow, even in volatile markets as we are experiencing
today. Our financial position will continue to be managed within an
equity self-funding model and we expect leverage to remain at the
lower half of our 4.5-5.0x Debt-to-EBITDA range in 2023."
2023 FINANCIAL OUTLOOK
Enbridge provided 2023 guidance for EBITDA of $15.9 billion to $16.5
billion and DCF per share of between $5.25 to $5.65. In
addition to the information provided below, the Company has posted
supporting materials to the Investor Relations section of the
Enbridge Inc. website (link).
EBITDA Guidance1
($
millions)2
|
2023e
|
Key Growth Drivers
vs. 2022
|
Liquids
Pipelines
|
~$9,000
|
•
Strong Mainline utilization
•
Increased interest in Gray Oak &
Cactus II pipelines
|
Gas Transmission &
Midstream
|
~$4,300
|
•
New assets placed into service
•
TETCO rate settlement
|
Gas Distribution &
Storage
|
~$1,950
|
•
Rate escalation & new customer
additions
|
Renewable Power
Generation
|
~$500
|
•
St. Nazaire contributions (France
offshore wind)
•
TGE development fees; partially offset by
devex
|
Energy
Services
|
~$-
|
•
Contract expiries
•
Improved market conditions
|
Eliminations &
Other
|
~$450
|
•
Impact of foreign exchange hedge
program
|
Adjusted
EBITDA3
|
$15,900-$16,500
|
|
(1) Sensitivities
included within supporting materials (2) Assumes CAD/USD of
$1.30 in 2023 (3) Non-GAAP financial measures. See the Non-GAAP and
Other Financial Measures section of this news release
|
The 2023 planning parameters that form the basis for the guidance
are based on strong utilization across the businesses and reflect
annualized contributions from $3.8
billion of capital anticipated to be placed into service in
2022 and partial year contributions from the $3.1 billion of capital anticipated to be placed
into service in 2023. Liquids Pipelines' guidance includes a
provision against the interim Mainline International Joint Tariff
consistent with the provision recognized in 2022.
DCF Guidance1
($ millions)
2
|
2023e
|
Adjusted
EBITDA3
|
$15,900-$16,500
|
Maintenance Capital
|
~$(1,000)
|
Financing
Costs
|
~$(3,900)
|
Current
Income Taxes
|
~$(500)
|
Distributions to Non-Controlling Interests
|
~$(400)
|
Cash
Distributions in Excess of Equity Earnings
|
~$500
|
Other
Non-Cash Adjustments
|
~$150
|
Distributable Cash
Flow (DCF) 3
|
$10,650-$11,450
|
DCF/Share
Guidance3,4
|
$5.25-$5.65
|
(1) Sensitivities
included within supporting materials (2) Assumes CAD/USD of $1.30
in 2023 (3) Non-GAAP financial measures. See the Non-GAAP and Other
Financial Measures section of this news release (4) On
approximately 2,027 million shares outstanding
|
To mitigate cash flow volatility, the Company has substantially
hedged its budgeted 2023 USD DCF
exposure.
DCF per share guidance reflects higher interest rates on planned
new fixed-rate financings and outstanding floating-rate debt.
Enbridge will continue to actively manage this exposure through its
hedging program and expects to enter 2023 with below 10% of the
debt portfolio exposed to floating interest rates.
Dividend Increase
Enbridge announced the quarterly common share dividend for 2023
will be increased by 3.2% from $0.86
to $0.8875 per common share, commencing with the dividend
payable on March 1, 2023, to shareholders of record
on February 15, 2023.
Capital Investments and Financing Plan
Enbridge expects to deploy approximately $6 billion of capital in 2023, inclusive of
maintenance capital. The balance sheet will remain strong with the
Debt-to-EBITDA ratio* at the end of 2023 expected to be in the
lower half of the Company's 4.5-5.0x target range. The financing
plan includes issuances of approximately $6
billion in incremental debt in 2023, net of maturities, with
no external equity required. The Company has hedged over half of
its anticipated fixed-rate term-debt issuances for 2023.
Enbridge intends to re-file a normal course issuer bid before
year end to repurchase up to $1.5
billion of its common shares. This provides Enbridge with
the capital allocation flexibility to opportunistically return
capital to shareholders through repurchases, while maintaining
focus on growing per share earnings and DCF.
Enbridge Day and Outlook
At Enbridge's annual investor day conference planned for
March 1, 2023, in Toronto and March 2,
2023, in New York,
Management will speak about energy fundamentals, the Company's
strategic priorities, and its capital allocation priorities and
longer-term outlook.
About Enbridge Inc.
At Enbridge, we safely connect millions of people to the
energy they rely on every day, fueling quality of life through our
North American natural gas, oil or renewable power networks and our
growing European offshore wind portfolio. We're investing in modern
energy delivery infrastructure to sustain access to secure,
affordable energy and building on two decades of experience in
renewable energy to advance new technologies including wind and
solar power, hydrogen, renewable natural gas and carbon capture and
storage. We're committed to reducing the carbon footprint of the
energy we deliver, and to achieving net zero greenhouse gas
emissions by 2050. Headquartered in Calgary, Alberta, Enbridge's common shares
trade under the symbol ENB on the Toronto (TSX) and New York (NYSE) stock exchanges. To learn
more, visit us at 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 Enbridge 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'', "likely" 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: Enbridge's strategic plan, priorities and outlook; 2022
and 2023 financial guidance, including projected DCF per share and
adjusted EBITDA and expected growth thereof; expected dividends,
dividend growth and dividend policy; intended normal course issuer
bid and related filing of notice of intent to make a normal course
issuer bid; expected supply of, demand for, exports of and prices
of crude oil, natural gas, natural gas liquids, (NGL) liquefied
natural gas (LNG) and renewable energy; energy transition and low
carbon energy and our approach thereto; anticipated utilization of
our assets; expected future cash flows; expected shareholder
returns and asset returns; expected performance of the Company's
businesses, including customer growth and organic growth
opportunities; financial strength, capacity and flexibility;
financing plan and costs; expectations on leverage, including
Debt-to-EBITDA ratio; forecasted effective tax rate and cash tax
rate; expectations on sources of liquidity and sufficiency of
financial resources; expected in-service dates and costs related to
announced projects and projects under construction and system
expansion, optimization and modernization; expected capital
expenditures and capital allocation priorities; and expected future
growth and expansion opportunities, including secured growth
program and development opportunities.
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 following: the expected supply of,
demand for and prices of crude oil, natural gas, NGL, LNG and
renewable energy; energy transition, including the drivers and pace
thereof; global economic growth and trade; anticipated utilization
of our assets; anticipated cost savings; exchange rates; inflation;
interest rates; the COVID-19 pandemic and the duration and impact
thereof; availability and price of labour and construction
materials; the stability of our supply chain; operational
reliability and performance; customer, regulatory and stakeholder
support and approvals; anticipated construction and in-service
dates; weather; announced and potential acquisition, disposition
and other corporate transactions and projects and the timing and
impact thereof; governmental legislation; litigation; impact of the
Company's dividend policy on its future cash flows; credit ratings;
capital project funding; hedging program; expected EBITDA and
expected adjusted EBITDA; expected earnings/(loss) and adjusted
earnings/(loss); expected earnings/(loss) or adjusted
earnings/(loss) per share; expected future cash flows and expected
future DCF and DCF per share; estimated future dividends; financial
strength and flexibility; debt and equity market conditions;
general economic and competitive conditions; ability of management
to execute key priorities; and the effectiveness of various actions
resulting from the Company's strategic priorities. Assumptions
regarding the expected supply of and demand for crude oil, natural
gas, NGL, LNG 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 the Company's services. Similarly, exchange rates, inflation,
interest rates and the COVID-19 pandemic impact the economies and
business environments in which the Company operates and 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 EBITDA, expected adjusted EBITDA, expected
earnings/(loss), expected adjusted earnings/(loss), expected DCF
and associated per share amounts, 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 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; the impact of
weather; customer, government and regulatory approvals on
construction and in-service schedules and cost recovery regimes;
and the COVID-19 pandemic and the duration and impact
thereof.
Enbridge's forward-looking statements are subject to risks
and uncertainties pertaining to the realization of anticipated
benefits and synergies of projects and transactions, successful
execution of our strategic priorities, operating performance, the
Company's dividend policy, regulatory parameters, changes in
regulations applicable to the Company's business, litigation,
acquisitions and dispositions and other transactions, 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, political decisions,
exchange rates, interest rates, inflation, commodity prices, supply
of and demand for commodities, and the COVID-19 pandemic, including
but not limited to those risks and uncertainties discussed in this
and in the Company's other filings with Canadian and U.S.
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 applicable 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
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 AND OTHER FINANCIAL MEASURES
This news release contains references to EBITDA, adjusted
EBITDA, DCF, and DCF per share. Management believes the
presentation of these metrics gives useful information to investors
and shareholders, as they provide increased transparency and
insight into the performance of the Company.
EBITDA represents earnings before interest, tax,
depreciation and amortization.
Adjusted EBITDA represents EBITDA adjusted for
unusual, infrequent or other non-operating factors on both a
consolidated and segmented basis. Management uses EBITDA and
adjusted EBITDA to set targets and to assess the performance of the
Company and its business units.
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 noncontrolling interests, preference share
dividends and maintenance capital expenditures and further adjusted
for unusual, infrequent or other non-operating factors. Management
also uses DCF to assess the performance of the Company and to set
its dividend payout target.
This news release also contains references to Debt-to-EBITDA,
a non-GAAP ratio which utilizes adjusted EBITDA as one of its
components. Debt-to-EBITDA is used as a liquidity measure to
indicate the amount of adjusted earnings available to pay debt, as
calculated on a GAAP basis, before covering interest, tax,
depreciation and amortization.
Reconciliations of forward-looking non-GAAP financial
measures and non-GAAP ratios to comparable GAAP measures are not
available due to the challenges and impracticability with
estimating certain 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 and non-GAAP ratios is not available without unreasonable
effort.
Our non-GAAP financial measures and non-GAAP ratios described
above are not measures that have standardized meaning prescribed by
generally accepted accounting principles (GAAP) 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 and other financial measures
to the most directly comparable GAAP measures is available in the
Investor Relations section of the Company's website. Additional
information on non-GAAP and other financial measures may be found
in the Company's earnings news releases or in additional
information in the Investor Relations section on the Company's
website, www.sedar.com or www.sec.gov.
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SOURCE Enbridge Inc.