HIGHLIGHTS
(all financial figures are unaudited and in Canadian dollars unless otherwise noted)
- Full year GAAP earnings of
$5,322 million or$2.64 per common share compared with$2,515 million or$1.46 per common share for 2018 - Adjusted earnings of
$5,341 million or$2.65 per common share in 2019 compared with$4,568 million or$2.65 per common share for 2018 - Adjusted earnings before interest, income tax and depreciation and amortization (EBITDA) of
$13,271 million in 2019 compared with$12,849 million for 2018 - Cash Provided by Operating Activities of
$9,398 million in 2019 compared with$10,502 million for 2018 - Distributable Cash Flow (DCF) of
$9,224 million in 2019 compared with$7,618 million for 2018 - Achieved the top-end of full-year DCF per share guidance range of
$4.30 to$4.60 - Reaffirmed 2020 DCF per share guidance range of
$4.50 to$4.80 , and longer term 5 to 7% DCF per share growth outlook, within an equity self-funding model - Increased the quarterly dividend by 9.8% for 2020 to
81 cents per share, reflecting strong operating and financial performance and the Company's outlook - Delivered 100 thousand barrels per day (kbpd) of planned Mainline optimizations, providing much needed egress capacity for Western Canadian producers
- Placed
$7 billion of new projects into service in the fourth quarter, including theUS$0.7 billion investment in the Gray Oak pipeline, the$1.1 billion German Hohe See offshore wind project, and the Canadian segment of the Line 3 Replacement project, under an interim surcharge agreement - Filed regulatory application in support of contracting the Liquids Mainline System on
December 19 , with support from shippers representing over 70% of current throughput Minnesota Public Utilities Commission (MPUC) re-certified the Line 3 Replacement project Final Environmental Impact Statement (FEIS), the Certificate of Need and the Route Permit onFebruary 3, 2020 - Advanced LNG supply strategy with the announcement of agreement to expand our system to supply the Annova LNG facility in the
Port of Brownsville, Texas , and agreements to acquire theRio Bravo pipeline development project and supply the Rio Grande LNG facility - Closed second phase of the Canadian midstream sale, successfully concluding previously announced
$8 billion asset sale program; achieved 4.5x Debt/EBITDA at year end - Announced the
$0.2 billion sale of the Montana-Alberta Tie Line (MATL); further increasing financial flexibility
CEO COMMENT
"2019 was a successful year for
"Each of our core businesses delivered solid results in 2019 that translated into full-year DCF per share at the top-end of our guidance range. The Liquids Mainline System achieved record annual throughput, our gas pipelines were highly utilized, and we're capturing synergies through the amalgamation of our Ontario Utility businesses. In addition to strong business performance, we placed a further
"Despite strong utilization and financial performance across our businesses, we experienced a major incident on our natural gas system in
"In the Liquids Pipeline segment, we delivered on our plan for 100 kbpd of throughput optimizations on the Mainline system by the end of 2019. We're planning for a further 50 kbpd of Mainline optimizations and we're moving forward with a 50 kbpd expansion of the Express Pipeline in 2020. These actions will provide WCSB producers with at least 200 kbpd of much needed additional pipeline capacity.
"On the
"In addition, following almost two years of extensive negotiation with our shippers, we filed the Mainline Contract Offering with the Canada Energy Regulator (CER). The priority access offering is in direct response to what our shippers have asked us for and balances their diverse needs. Ultimately, contracting the Mainline will provide all shippers with priority access at competitive tolls, and supports further improvement in netbacks for WCSB producers. Most notably, it secures long-term demand for Canadian crude oil, while ensuring that all interested shippers can participate in a fair and transparent open season process. For example, we've made this offering accessible to smaller producers by reducing the minimum volume required to contract on the system and introducing a Requirements Contract with very attractive terms. We expect the CER will conduct a thorough review of our application which will include input from
"We've also been advancing our liquids strategy to extend our integrated value chain from
"Our Gas Transmission and Midstream business is awaiting a decision from the
"Also, in Gas Transmission and Midstream, we've again advanced our LNG supply strategy by leveraging our incumbent position in the
Finally, in the fourth quarter, we closed the second phase of the divestiture of our Canadian midstream assets, which completes our
"In summary, we're pleased with the Company's performance in 2019 and the successful completion of the 3-year plan we announced in early 2017 following the Spectra merger. As we look ahead to our new 3-year plan through 2022, our strategic priorities for the business remain focused on optimizing our base business, executing our secured growth program and growing the business through in-franchise, capital efficient investment. The combination of our strong financial position, disciplined capital allocation, and low-risk business model, positions us well to sustain attractive shareholder returns well into the future," concluded
FINANCIAL RESULTS SUMMARY
Financial results for the three and twelve months ended
Three months ended | Twelve months ended | ||||
2019 | 2018 | 2019 | 2018 | ||
(unaudited, millions of Canadian dollars, except per share amounts; | |||||
number of shares in millions) | |||||
GAAP Earnings attributable to common shareholders | 746 | 1,089 | 5,322 | 2,515 | |
GAAP Earnings per common share | 0.37 | 0.60 | 2.64 | 1.46 | |
Cash provided by operating activities | 1,993 | 2,503 | 9,398 | 10,502 | |
Adjusted EBITDA1 | 3,186 | 3,320 | 13,271 | 12,849 | |
Adjusted Earnings1 | 1,228 | 1,166 | 5,341 | 4,568 | |
Adjusted Earnings per common share1 | 0.61 | 0.65 | 2.65 | 2.65 | |
Distributable Cash Flow1 | 2,051 | 1,863 | 9,224 | 7,618 | |
Weighted average common shares outstanding | 2,018 | 1,806 | 2,017 | 1,724 |
1 | Non-GAAP financial measures. Schedules reconciling adjusted EBITDA, adjusted earnings, adjusted earnings per common share and distributable cash flow are available as Appendices to this news release. |
GAAP earnings attributable to common shareholders for the fourth quarter of 2019 decreased by
Adjusted earnings in the fourth quarter 2019 increased by
Adjusted earnings for the year ended 2019 increased by
DCF for the fourth quarter was
Detailed segmented financial information and analysis can be found below under Adjusted EBITDA by Segments.
PROJECT EXECUTION UPDATE
Over the course of 2019, the Company placed
In the fourth quarter, several projects were placed into service, including:
- A
US$0.7 billion investment in the Gray Oak Pipeline, which provides incremental crude pipeline capacity out of the Eagle Ford and Permian basins and is underpinned by long-term take-or-pay transportation contracts. - The
$1.1 billion HoHe See Offshore Wind Project and adjacent expansion, which are both fully operational with a combined capacity of 609MW, and are fully back stopped by a government legislated 20-year revenue support mechanism. - The
$5.0 billion Canadian segment of the Line 3 Replacement project (discussed in the Line 3 Replacement section).
The Company also announced that it has signed a Precedent Agreement to supply the Annova LNG facilities in the
Line 3 Replacement
The
The Company placed the Canadian segment of the Line 3 Replacement into service on
In
Depending on the final in-service date, there is a risk that the project may exceed the Company's total cost estimate of
OTHER BUSINESS UPDATES
On
The application that the Company filed is the result of two years of extensive negotiations with a diverse group of shippers and has been designed to align the interests of its shippers and
The application highlights benefits of the Mainline contract offering for both shippers and the public, including the following:
- Secures long-term demand for WCSB heavy and light barrels in premium markets;
- Supports the best netbacks for WCSB producers;
- Competitive and stable tolls for customers; and
- Flexibility for shippers of all types and sizes to participate by offering both a traditional take-or-pay and producer and refiner requirements contracts.
On
Line 5 Tunnel
On
Gas Transmission and Midstream Rate Cases
One of the Company's strategic priorities is to ensure timely and fair returns on the Company's
NON-CORE ASSET SALES & FINANCING UPDATE
In
On the financing front, the Company continued to execute on its funding plan with term debt issuances in the fourth quarter exceeding
As of
2020 GUIDANCE AND LONGER TERM GROWTH OUTLOOK
At its
- Ensuring safe and reliable operations and providing effective and cost-efficient transportation solutions for customers;
- Enhancing the business through asset optimization, cost efficiencies and low-risk growth;
- Executing on an
$11 billion secured growth capital program, including theU.S. segment of the Line 3 Replacement project; and - Growing core businesses through capital efficient organic growth and disciplined capital allocation.
FOURTH QUARTER AND YEAR-END 2019 FINANCIAL RESULTS
The following table summarizes the Company's GAAP reported results for segment EBITDA, earnings attributable to common shareholders, and cash provided by operating activities for the fourth quarter and full year of 2019.
GAAP SEGMENT EBITDA AND CASH FLOW FROM OPERATIONS
Three months ended | Twelve months ended | |||
2019 | 2018 | 2019 | 2018 | |
(unaudited, millions of Canadian dollars) | ||||
Liquids Pipelines | 1,971 | 978 | 7,681 | 5,331 |
Gas Transmission and Midstream | 638 | 1,254 | 3,371 | 2,334 |
Gas Distribution and Storage | 443 | 449 | 1,747 | 1,711 |
(189) | 83 | 111 | 369 | |
Energy Services | (68) | 374 | 250 | 482 |
Eliminations and Other | 114 | (340) | 429 | (708) |
EBITDA | 2,909 | 2,798 | 13,589 | 9,519 |
Earnings attributable to common shareholders | 746 | 1,089 | 5,322 | 2,515 |
Cash provided by operating activities | 1,993 | 2,503 | 9,398 | 10,502 |
For purposes of evaluating performance, the Company makes adjustments for unusual, infrequent or other non-operating factors to GAAP reported earnings, segment EBITDA, and cash flow provided by operating activities, which allow Management and investors to more accurately compare the Company's performance across periods, normalizing for factors that are not indicative of the underlying business performance. Tables incorporating these adjustments follow below. Schedules reconciling EBITDA, adjusted EBITDA, adjusted EBITDA by segment, adjusted earnings, adjusted earnings per share and DCF to their closest GAAP equivalent are provided in the Appendices to this news release.
DISTRIBUTABLE CASH FLOW
Three months ended | Twelve months ended | |||
2019 | 2018 | 2019 | 2018 | |
(unaudited, millions of Canadian dollars, except per share amounts) | ||||
Liquids Pipelines | 1,720 | 1,728 | 7,041 | 6,617 |
Gas Transmission and Midstream | 948 | 952 | 3,868 | 4,068 |
Gas Distribution and Storage | 481 | 452 | 1,819 | 1,726 |
119 | 98 | 424 | 435 | |
Energy Services | (22) | 73 | 269 | 167 |
Eliminations and Other | (60) | 17 | (150) | (164) |
Adjusted EBITDA1,3 | 3,186 | 3,320 | 13,271 | 12,849 |
Maintenance capital | (342) | (361) | (1,083) | (1,144) |
Interest expense1 | (704) | (675) | (2,716) | (2,735) |
Current income tax1 | (81) | (156) | (386) | (384) |
Distributions to noncontrolling interests and redeemable | ||||
noncontrolling interests1 | (54) | (281) | (204) | (1,182) |
Cash distributions in excess of equity earnings1 | 107 | 51 | 534 | 318 |
Preference share dividends | (96) | (96) | (383) | (364) |
Other receipts of cash not recognized in revenue2 | 30 | 51 | 169 | 208 |
Other non-cash adjustments | 5 | 10 | 22 | 52 |
DCF3 | 2,051 | 1,863 | 9,224 | 7,618 |
Weighted average common shares outstanding | 2,018 | 1,806 | 2,017 | 1,724 |
1 | Presented net of adjusting items. |
2 | Consists of cash received net of revenue recognized for contracts under make-up rights and similar deferred revenue arrangements. |
3 | Schedules reconciling adjusted EBITDA and DCF are available as Appendices to this news release. |
Fourth quarter 2019 DCF increased
- Adjusted EBITDA reflected strong operating performance, increased asset utilization and contributions from assets placed into service in late 2018 and through 2019, offset by the absence of contributions from the sale of assets in the Gas Transmission and Midstream segment during 2018, as well as lower EBITDA from Energy Services crude operations due to narrowing of certain location and quality differentials during the fourth quarter.
- Lower distributions to noncontrolling and redeemable noncontrolling interests following the completion of
Enbridge's buy-in of the publicly held interests in its sponsored vehicles, which were completed in the fourth quarter of 2018. - Higher cash distributions in excess of equity earnings from equity investments primarily due to higher distributions as a result of strong performance, as well as new equity investments placed into service, including the Valley Crossing Pipeline, the NEXUS Gas Transmission Pipeline, and the Big Foot Pipeline.
DCF increased
- Increased adjusted EBITDA contributions from Energy Services for the year 2019 when compared to 2018 due to the widening of certain location and quality differentials benefiting the first half of 2019.
ADJUSTED EARNINGS | Three months ended | Twelve months ended | ||
2019 | 2018 | 2019 | 2018 | |
(unaudited, millions of Canadian dollars, except per share | ||||
Adjusted EBITDA2 | 3,186 | 3,320 | 13,271 | 12,849 |
Depreciation and amortization | (865) | (794) | (3,391) | (3,246) |
Interest expense1 | (687) | (656) | (2,649) | (2,637) |
Income taxes1 | (237) | (421) | (1,381) | (1,122) |
Noncontrolling interests and redeemable | ||||
noncontrolling interests1 | (73) | (188) | (126) | (909) |
Preference share dividends | (96) | (95) | (383) | (367) |
Adjusted earnings2 | 1,228 | 1,166 | 5,341 | 4,568 |
Adjusted earnings per common share | 0.61 | 0.65 | 2.65 | 2.65 |
1 | Presented net of adjusting items. |
2 | Schedules reconciling adjusted EBITDA and adjusted earnings are available as Appendices to this news release. |
Adjusted earnings increased
- Higher depreciation and amortization expense as a result of new assets placed into service, net of depreciation expense no longer recorded for assets which were classified as assets held for sale or sold during second half of 2018.
- Higher interest expense due to the absence of capitalized interest related to assets that were placed into service in late 2018 and 2019.
- Lower income taxes due to lower adjusted earnings before tax for the fourth quarter of 2019 when compared with the fourth quarter of 2018.
Adjusted earnings per share for the fourth quarter of 2019 decreased
For the year ended
Adjusted earnings per share for the year of 2019 are the same as in 2018 as a result of the increased adjusted earnings discussed above being offset on a per share basis by the increase in common shares issued to acquire the outstanding equity securities of the Company's sponsored vehicles, also discussed above.
ADJUSTED EBITDA BY SEGMENTS
Adjusted EBITDA by segment is reported on a Canadian dollar basis. Adjusted EBITDA generated from U.S. dollar denominated businesses was translated at the same average Canadian dollar exchange rates in the fourth quarter of 2019 (
On a full year basis, adjusted EBITDA generated from
A portion of the U.S. dollar earnings is hedged under the Company's enterprise-wide financial risk management program. The offsetting hedge settlements are reported within Eliminations and Other.
LIQUIDS PIPELINES
Three months ended | Twelve months ended | |||
2019 | 2018 | 2019 | 2018 | |
(unaudited, millions of Canadian dollars) | ||||
Mainline System1 | 960 | 997 | 3,900 | 3,847 |
Regional Oil Sands System | 208 | 209 | 856 | 851 |
214 | 201 | 922 | 709 | |
Other2 | 338 | 321 | 1,363 | 1,210 |
Adjusted EBITDA3 | 1,720 | 1,728 | 7,041 | 6,617 |
Operating Data (average deliveries – thousands of bpd) | ||||
Mainline System - ex- | 2,728 | 2,685 | 2,705 | 2,631 |
Regional Oil Sands System5 | 1,864 | 1,856 | 1,817 | 1,830 |
International Joint Tariff (IJT)6 |
1 | Mainline System includes the Canadian Mainline and the Lakehead System, which were previously reported separately. |
2 | Included within Other are Southern Lights Pipeline, Express-Platte System, Bakken System and Feeder Pipelines & Other. |
3 | Schedules reconciling adjusted EBITDA are provided in the Appendices to this news release. |
4 | Mainline System throughput volume represents mainline system deliveries ex- |
5 | Volumes are for the |
6 | The IJT benchmark toll and its components are set in |
Liquids Pipelines adjusted EBITDA decreased
- Mainline System adjusted EBITDA reflected higher throughput, driven by strong supply and continued optimizations of the system, as well as a higher period-over-period International Joint Toll (IJT). In addition, the Canadian portion of the Line 3 Replacement project was placed into service on
December 1, 2019 , with an interim surcharge on all mainline volumes ofUS$0.20 per barrel. However, these increases to EBITDA were more than offset by a lower foreign exchange rate on contracts used to hedgeU.S. dollar denominated revenues from the Canadian portion of the Mainline System (2019:C$1.19 /US; 2018:C$1.26 /US), as well as higher operating costs due to timing of expenditures. Gulf Coast and Mid-Continent System growth was driven by strongGulf Coast demand resulting from favourable price differentials, as well as modest contributions from the Gray Oak Pipeline project that commenced service late in the fourth quarter of 2019, with volume expected to ramp up in the first half of 2020.
Liquids Pipelines adjusted EBITDA increased
Gulf Coast and Mid-Continent System growth was a result of higher volumes on the Flanagan South and Seaway pipelines due to strongGulf Coast demand resulting from favourable price differentials.- Other EBITDA increased primarily due to increased volume throughput on the Bakken Pipeline System driven by strong production in the region.
GAS TRANSMISSION AND MIDSTREAM
Three months ended | Twelve months ended | |||
2019 | 2018 | 2019 | 2018 | |
(unaudited, millions of Canadian dollars) | ||||
US Gas Transmission | 678 | 646 | 2,730 | 2,625 |
Canadian Gas Transmission1 | 191 | 208 | 760 | 983 |
US Midstream | 48 | 54 | 194 | 319 |
Other | 31 | 44 | 184 | 141 |
Adjusted EBITDA2 | 948 | 952 | 3,868 | 4,068 |
1 | Canadian Gas Transmission includes Alliance Pipeline, which was previously reported separately. |
2 | Schedules reconciling adjusted EBITDA are available as Appendices to this news release. |
Gas Transmission and Midstream adjusted EBITDA decreased
- US Gas Transmission adjusted EBITDA reflected a full quarter of contributions from new assets placed into service in late 2018, including Valley Crossing Pipeline and the NEXUS Gas Transmission Pipeline. The increase in EBITDA was partially offset by higher planned integrity expenditures, lower AFUDC on decreased capital spend, as well as both lower revenues and higher operating costs associated with the Texas Eastern pipeline incident in
Lincoln County, Kentucky that occurred in the third quarter of 2019. - Canadian Gas Transmission adjusted EBITDA decreased period-over-period due to a decrease in interruptible service revenue in 2019 as a result of a weaker AECO-Chicago basis.
- US Midstream adjusted EBITDA primarily reflects the impact of lower commodity prices on fractionation margins at Aux Sable partially offset by higher volumes and more favourable margins at DCP Midstream.
Gas Transmission and Midstream adjusted EBITDA decreased
- Canadian Gas Transmission adjusted EBITDA period-over-period results primarily reflect the absence of contributions from the provincially regulated Canadian natural gas gathering and processing business which was sold
October 1, 2018 . The sale of the remaining federally regulated Canadian natural gas gathering and processing assets closed onDecember 31, 2019 . - US Midstream adjusted EBITDA primarily reflects the absence of EBITDA from
Midcoast Operating, L.P. which was sold onAugust 1, 2018 . - Other EBITDA has increased in 2019 primarily due to contributions from the Big Foot Pipeline which was placed into service in the fourth quarter of 2018.
GAS DISTRIBUTION AND STORAGE
Three months ended | Twelve months ended | |||
2019 | 2018 | 2019 | 2018 | |
(unaudited, millions of Canadian dollars) | ||||
444 | 407 | 1,714 | 1,598 | |
Other | 37 | 45 | 105 | 128 |
Adjusted EBITDA1 | 481 | 452 | 1,819 | 1,726 |
Operating Data | ||||
EGI | ||||
Volumes (billions of cubic feet) | 532 | 531 | 1,860 | 1,821 |
Number of active customers (thousands)2 | 3,755 | 3,713 | ||
Heating degree days3 | ||||
Actual | 1,383 | 1,406 | 4,082 | 3,932 |
Forecast based on normal weather4 | 1,314 | 1,310 | 3,849 | 3,843 |
1 | Schedules reconciling adjusted EBITDA are available as Appendices to this news release. |
2 | Number of active customers at the end of the reported period. |
3 | Heating degree days is a measure of coldness that is indicative of volumetric requirements for natural gas utilized for heating purposes in EGI's distribution franchise areas. |
4 | As per Ontario Energy Board approved methodology used in setting rates. |
Gas Distribution and Storage adjusted EBITDA will typically follow a seasonal profile. It is generally highest in the first and fourth quarters of the year reflecting greater volumetric demand during the heating season and lowest in the third quarter as there is generally less volumetric demand during the summer. The magnitude of the seasonal EBITDA fluctuations will vary from year-to-year reflecting the impact of colder or warmer than normal weather on distribution volumes.
Gas Distribution and Storage adjusted EBITDA increased
- EGI adjusted EBITDA increased due to higher distribution charges primarily resulting from increases in distribution rates and customer base, synergies realized from the amalgamation of
EGD and Union Gas , as well as the absence of earnings sharing in 2019 which was recognized in 2018 under EGD's previous incentive rate structure. - These contributions were partially offset due to warmer weather in EGI's franchise areas in the fourth quarter which led to lower utilization, as well as the effects of the accelerated capital cost allowance deductions reflected as a pass through to customers, consistent with the Ontario Energy Board's prescribed deferral account treatment.
- Other Gas Distribution and Storage adjusted EBITDA decreased due to closing of the sale of Enbridge Gas New Brunswick on
October 1, 2019 , andSt. Lawrence Gas Company, Inc. onNovember 1, 2019 .
Gas Distribution and Storage adjusted EBITDA increased
For the year ended
Three months ended | Twelve months ended | |||
2019 | 2018 | 2019 | 2018 | |
(unaudited, millions of Canadian dollars) | ||||
Adjusted EBITDA1 | 119 | 98 | 424 | 435 |
1 | Shedules reconciling adjusted EBITDA are available as Appendices to this news release. |
- Higher adjusted EBITDA as a result of contributions from the
Hohe See Offshore Wind Project , which reached full operating capacity inOctober 2019 . The adjacent expansion project,Albatros , came into service inJanuary 2020 . - Stronger wind resources across the Company's Canadian wind facilities.
- Absence of a positive arbitration settlement of
$11 million from a warranty claim that occurred in the first quarter of 2018. - Weaker wind resources, availability, and higher mechanical repair costs primarily at US wind facilities in the first half of 2019, net of insurance recoveries.
ENERGY SERVICES
Three months ended | Twelve months ended | |||
2019 | 2018 | 2019 | 2018 | |
(unaudited, millions of Canadian dollars) | ||||
Adjusted earnings/(loss) before interest, income | ||||
taxes, and depreciation and amortization1 | (22) | 73 | 269 | 167 |
1 | Schedules reconciling adjusted EBITDA are available as Appendices to this news release. |
Energy Services adjusted EBITDA decreased
- Lower EBITDA contributions from Energy Services crude operations as a result of narrowing of certain location and quality differentials during the fourth quarter.
Full year 2019 Adjusted EBITDA results for Energy Services increased
ELIMINATIONS AND OTHER
Three months ended | Twelve months ended | |||
2019 | 2018 | 2019 | 2018 | |
(unaudited, millions of Canadian dollars) | ||||
Operating and administrative (expenses)/recoveries | (10) | 82 | 66 | 55 |
Realized foreign exchange hedge settlements | (50) | (65) | (216) | (219) |
Adjusted earnings/(loss) before interest, income | ||||
taxes, and depreciation and amortization1 | (60) | 17 | (150) | (164) |
1 | Schedules reconciling adjusted EBITDA are available as Appendices to this news release. |
Operating and administrative costs captured in this segment reflect the cost of centrally delivered services (including depreciation of corporate assets) inclusive of amounts recovered from business units for the provision of those services. Also, as previously noted,
Eliminations and Other adjusted EBITDA decreased
- The timing of the recovery of certain operating and administrative costs allocated to the business segments, partially offset by lower operating and administrative costs.
- Lower realized foreign exchange settlement losses in the fourth quarter of 2019 primarily due to a narrower spread between the average exchange rate of
$1.32 for the fourth quarter of 2019 (Q4 2018:$1.32 ) and the fourth quarter 2019 hedge rate of$1.24 (Q4 2018:$1.20 ).
Eliminations and Other adjusted EBITDA increased
- Lower operating and administrative expenses.
- Lower realized foreign exchange settlement losses in 2019 primarily due to a narrower spread between the average exchange rate of
$1.33 for 2019 (2018:$1.30 ) and the 2019 hedge rate of$1.24 (2018:$1.16 ).
CONFERENCE CALL
The conference call format will include prepared remarks from the executive team followed by a question and answer session for the analyst and investor community only.
DIVIDEND DECLARATION
On
Common Shares1 | |
Preference Shares, Series A | |
Preference Shares, Series B | |
Preference Shares, Series C2 | |
Preference Shares, Series D | |
Preference Shares, Series F | |
Preference Shares, Series H | |
Preference Shares, Series J | |
Preference Shares, Series L | |
Preference Shares, Series N | |
Preference Shares, Series P3 | |
Preference Shares, Series R4 | |
Preference Shares, Series 1 | |
Preference Shares, Series 35 | |
Preference Shares, Series 56 | |
Preference Shares, Series 77 | |
Preference Shares, Series 98 | |
Preference Shares, Series 11 | |
Preference Shares, Series 13 | |
Preference Shares, Series 15 | |
Preference Shares, Series 17 | $0.32188 |
Preference Shares, Series 19 |
1 | The quarterly dividend per common share was increased 9.8% to |
2 | The quarterly dividend per share paid on Series C was decreased to |
3 | The quarterly dividend per share paid on Series P was increased to |
4 | The quarterly dividend per share paid on Series R was increased to |
5 | The quarterly dividend per share paid on Series 3 was decreased to |
6 | The quarterly dividend per share paid on Series 5 was increased to US |
7 | The quarterly dividend per share paid on Series 7 was increased to |
8 | The quarterly dividend per share paid on Series 9 was decreased to |
FORWARD-LOOKING INFORMATION
Forward-looking information, or forward-looking statements, have been included in this news release to provide information about the Company and its subsidiaries and affiliates, including management's assessment of
Although
ABOUT
None of the information contained in, or connected to,
FOR FURTHER INFORMATION PLEASE | ||
Toll Free: (888) 992-0997 | Toll Free: (800) 481-2804 | |
Email: media@enbridge.com | Email: investor.relations@enbridge.com |
NON-GAAP RECONCILIATIONS APPENDICES
This news release contains references to adjusted EBITDA, adjusted earnings, adjusted earnings per common share, and DCF. 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.
Adjusted EBITDA represents EBITDA adjusted for unusual, infrequent or other non-operating factors on both a consolidated and segmented basis. Management uses adjusted EBITDA to set targets and to assess the performance of the Company and its Business Units.
Adjusted earnings represent earnings attributable to common shareholders adjusted for unusual, infrequent or other non-operating factors included in adjusted EBITDA, as well as adjustments for unusual, infrequent or other non-operating factors in respect of depreciation and amortization expense, interest expense, income taxes, noncontrolling interests and redeemable noncontrolling interests on a consolidated basis. Management uses adjusted earnings as another measure of the Company's ability to generate earnings.
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 and redeemable 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.
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.
Our non-GAAP measures described above are not measures that have standardized meaning prescribed by generally accepted accounting principles in
The tables below provide a reconciliation of the non-GAAP measures to comparable GAAP measures.
APPENDIX A
NON-GAAP RECONCILIATIONS – ADJUSTED EBITDA AND ADJUSTED
EARNINGS
CONSOLIDATED EARNINGS
Three months ended | Twelve months ended | |||
2019 | 2018 | 2019 | 2018 | |
(unaudited, millions of Canadian dollars) | ||||
Liquids Pipelines | 1,971 | 978 | 7,681 | 5,331 |
Gas Transmission and Midstream | 638 | 1,254 | 3,371 | 2,334 |
Gas Distribution and Storage | 443 | 449 | 1,747 | 1,711 |
(189) | 83 | 111 | 369 | |
Energy Services | (68) | 374 | 250 | 482 |
Eliminations and Other | 114 | (340) | 429 | (708) |
EBITDA | 2,909 | 2,798 | 13,589 | 9,519 |
Depreciation and amortization | (865) | (794) | (3,391) | (3,246) |
Interest expense | (697) | (661) | (2,663) | (2,703) |
Income tax expense | (433) | (60) | (1,708) | (237) |
Earnings attributable to noncontrolling interests and | ||||
redeemable noncontrolling interests | (72) | (99) | (122) | (451) |
Preference share dividends | (96) | (95) | (383) | (367) |
Earnings attributable to common shareholders | 746 | 1,089 | 5,322 | 2,515 |
ADJUSTED EBITDA TO ADJUSTED EARNINGS
Three months ended | Twelve months ended | |||
2019 | 2018 | 2019 | 2018 | |
(unaudited, millions of Canadian dollars, except per share amounts) | ||||
Liquids Pipelines | 1,720 | 1,728 | 7,041 | 6,617 |
Gas Transmission and Midstream | 948 | 952 | 3,868 | 4,068 |
Gas Distribution and Storage | 481 | 452 | 1,819 | 1,726 |
119 | 98 | 424 | 435 | |
Energy Services | (22) | 73 | 269 | 167 |
Eliminations and Other | (60) | 17 | (150) | (164) |
Adjusted EBITDA | 3,186 | 3,320 | 13,271 | 12,849 |
Depreciation and amortization | (865) | (794) | (3,391) | (3,246) |
Interest expense | (687) | (656) | (2,649) | (2,637) |
Income taxes | (237) | (421) | (1,381) | (1,122) |
Earnings attributable to noncontrolling interests and | ||||
redeemable noncontrolling interests | (73) | (188) | (126) | (909) |
Preference share dividends | (96) | (95) | (383) | (367) |
Adjusted earnings | 1,228 | 1,166 | 5,341 | 4,568 |
Adjusted earnings per common share | 0.61 | 0.65 | 2.65 | 2.65 |
EBITDA TO ADJUSTED EARNINGS
Three months ended | Twelve months ended | ||||||
2019 | 2018 | 2019 | 2018 | ||||
(unaudited, millions of Canadian dollars, except per share amounts) | |||||||
EBITDA | 2,909 | 2,798 | 13,589 | 9,519 | |||
Adjusting items: | |||||||
Change in unrealized derivative fair value (gain)/loss | (754) | 378 | (1,806) | 660 | |||
Hedging program pre-settlement payment | 310 | — | 310 | — | |||
Asset write-down loss | 318 | 32 | 423 | 2,118 | |||
(Gain)/loss on sale of assets | 278 | (72) | 278 | 22 | |||
Employee severance, transition and transformation | |||||||
costs | 52 | 60 | 140 | 203 | |||
Asset monetization transaction costs | — | 23 | — | 88 | |||
Equity investment asset impairment | 34 | 14 | 96 | 47 | |||
Write-down of inventory to the lower of cost or market | 17 | 291 | 188 | 327 | |||
Regulatory liability adjustment | — | (223) | — | (223) | |||
Other | 22 | 19 | 53 | 88 | |||
Total adjusting items | 277 | 522 | (318) | 3,330 | |||
Adjusted EBITDA | 3,186 | 3,320 | 13,271 | 12,849 | |||
Depreciation and amortization | (865) | (794) | (3,391) | (3,246) | |||
Interest expense | (697) | (661) | (2,663) | (2,703) | |||
Income tax expense | (433) | (60) | (1,708) | (237) | |||
Earnings attributable to noncontrolling interests and | |||||||
redeemable noncontrolling interests | (72) | (99) | (122) | (451) | |||
Preference share dividends | (96) | (95) | (383) | (367) | |||
Adjusting items in respect of: | |||||||
Interest expense | 10 | 5 | 14 | 66 | |||
Income taxes | 196 | (361) | 327 | (885) | |||
Earnings attributable to noncontrolling interests and | |||||||
redeemable noncontrolling interests | (1) | (89) | (4) | (458) | |||
Adjusted earnings | 1,228 | 1,166 | 5,341 | 4,568 | |||
Adjusted earnings per common share | 0.61 | 0.65 | 2.65 | 2.65 |
APPENDIX B
NON-GAAP RECONCILIATION – SEGMENTED EBITDA TO ADJUSTED EBITDA
LIQUIDS PIPELINES
Three months ended | Twelve months ended | |||
2019 | 2018 | 2019 | 2018 | |
(unaudited, millions of Canadian dollars) | ||||
Adjusted EBITDA | 1,720 | 1,728 | 7,041 | 6,617 |
Change in unrealized derivative fair value gain/(loss) | 586 | (715) | 976 | (1,077) |
Hedging program pre-settlement payment | (310) | — | (310) | — |
Asset write-down loss | (21) | (32) | (21) | (186) |
Employee severance, transition and transformation | ||||
costs | — | (1) | — | (26) |
Other | (4) | (2) | (5) | 3 |
Total adjustments | 251 | (750) | 640 | (1,286) |
EBITDA | 1,971 | 978 | 7,681 | 5,331 |
GAS TRANSMISSION AND MIDSTREAM
Three months ended | Twelve months ended | |||
2019 | 2018 | 2019 | 2018 | |
(unaudited, millions of Canadian dollars) | ||||
Adjusted EBITDA | 948 | 952 | 3,868 | 4,068 |
Change in unrealized derivative fair value gain/(loss) | — | (1) | — | 24 |
Asset write-down loss - US Midstream | — | — | — | (1,932) |
Asset write-down loss - US Gas Transmission | — | — | (105) | — |
Equity investment asset impairment | (24) | — | (86) | — |
Gain/(loss) on sale of assets | (268) | 72 | (268) | (2) |
Asset monetization transaction costs | — | — | — | (20) |
Employee severance, transition and transformation | ||||
costs | (5) | (3) | (5) | (13) |
Regulatory liability adjustment | — | 223 | — | 223 |
Other | (13) | 11 | (33) | (14) |
Total adjustments | (310) | 302 | (497) | (1,734) |
EBITDA | 638 | 1,254 | 3,371 | 2,334 |
GAS DISTRIBUTION AND STORAGE
Three months ended | Twelve months ended | ||||
2019 | 2018 | 2019 | 2018 | ||
(unaudited; millions of Canadian dollars) | |||||
Adjusted EBITDA | 481 | 452 | 1,819 | 1,726 | |
Change in unrealized derivative fair value gain/(loss) | (21) | 3 | (12) | 6 | |
Loss on sale of assets | (10) | — | (10) | — | |
— | — | — | (9) | ||
Employee severance, transition and transformation | |||||
costs | (8) | (6) | (51) | (12) | |
Other | 1 | — | 1 | — | |
Total adjustments | (38) | (3) | (72) | (15) | |
EBITDA | 443 | 449 | 1,747 | 1,711 |
Three months ended | Twelve months ended | |||
2019 | 2018 | 2019 | 2018 | |
(unaudited, millions of Canadian dollars) | ||||
Adjusted EBITDA | 119 | 98 | 424 | 435 |
Change in unrealized derivative fair value gain/(loss) | — | (1) | 2 | 1 |
Asset write-down loss | (297) | — | (297) | — |
Equity investment asset impairment | (10) | (14) | (10) | (47) |
Loss on sale of assets | — | — | — | (20) |
Other | (1) | — | (8) | — |
Total adjustments | (308) | (15) | (313) | (66) |
EBITDA | (189) | 83 | 111 | 369 |
ENERGY SERVICES
Three months ended | Twelve months ended | |||
2019 | 2018 | 2019 | 2018 | |
(unaudited, millions of Canadian dollars) | ||||
Adjusted EBITDA | (22) | 73 | 269 | 167 |
Change in unrealized derivative fair value gain/(loss) | (29) | 592 | 169 | 642 |
Write-down of inventory to the lower of cost or market | (17) | (291) | (188) | (327) |
Total adjustments | (46) | 301 | (19) | 315 |
EBITDA | (68) | 374 | 250 | 482 |
ELIMINATIONS AND OTHER
Three months ended | Twelve months ended | |||
2019 | 2018 | 2019 | 2018 | |
(unaudited, millions of Canadian dollars) | ||||
Adjusted EBITDA | (60) | 17 | (150) | (164) |
Change in unrealized derivative fair value gain/(loss) | 218 | (256) | 671 | (256) |
Asset monetization transaction costs | — | (23) | — | (68) |
Employee severance, transition and transformation | ||||
costs | (39) | (50) | (84) | (152) |
Other | (5) | (28) | (8) | (68) |
Total adjustments | 174 | (357) | 579 | (544) |
EBITDA | 114 | (340) | 429 | (708) |
APPENDIX C
NON-GAAP RECONCILIATION – CASH PROVIDED BY OPERATING
ACTIVITIES TO DCF
Three months ended | Twelve months ended | |||
2019 | 2018 | 2019 | 2018 | |
(unaudited, millions of Canadian dollars) | ||||
Cash provided by operating activities | 1,993 | 2,503 | 9,398 | 10,502 |
Adjusted for changes in operating assets and liabilities1 | (192) | 28 | 259 | (915) |
1,801 | 2,531 | 9,657 | 9,587 | |
Distributions to noncontrolling interests and redeemable | ||||
noncontrolling interests4 | (54) | (281) | (204) | (1,182) |
Preference share dividends | (96) | (96) | (383) | (364) |
Maintenance capital expenditures2 | (342) | (361) | (1,083) | (1,144) |
Significant adjusting items: | ||||
Other receipts of cash not recognized in revenue3 | 30 | 51 | 169 | 208 |
Employee severance, transition and transformation | ||||
costs | 52 | 59 | 143 | 248 |
Asset monetization costs | — | 23 | — | 107 |
Distributions from equity investments in excess of | ||||
cumulative earnings4 | 154 | 35 | 361 | 326 |
Regulatory liability adjustment | — | (223) | — | (223) |
Hedging program pre-settlement payment | 310 | — | 310 | — |
Other items | 196 | 125 | 254 | 55 |
DCF | 2,051 | 1,863 | 9,224 | 7,618 |
1 | Changes in operating assets and liabilities, net of recoveries. |
2 | Maintenance capital expenditures are expenditures that are required for the ongoing support and maintenance of the existing pipeline system or that are necessary to maintain the service capability of the existing assets (including the replacement of components that are worn, obsolete or completing their useful lives). For the purpose of DCF, maintenance capital excludes expenditures that extend asset useful lives, increase capacities from existing levels or reduce costs to enhance revenues or provide enhancements to the service capability of the existing assets. |
3 | Consists of cash received net of revenue recognized for contracts under make-up rights and similar deferred revenue arrangements. |
4 | Presented net of adjusting items. |
View original content:http://www.prnewswire.com/news-releases/enbridge-inc-reports-strong-fourth-quarter--full-year-2019-results-301005108.html
SOURCE
© Canada Newswire, source