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Enbridge Poised to Capitalize on Multiple Growing Energy Demand Themes; Extends Growth Outlook through the End of the Decade; Reaffirms Financial Outlook
CALGARY, AB, March 4, 2025 /PRNewswire/ - Enbridge Inc. (Enbridge or the Company) (TSX: ENB) (NYSE: ENB) is reiterating its strategic priorities, demonstrating the visibility of its growth outlook, and reaffirming its financial outlook which will be discussed further at the Company's investor conference today in New York. A virtual broadcast of the event is also available for registered participants (link).
Highlights
Growing secured investment backlog to $29 billion; $2.5 billion of new accretive investments:
Evaluating approximately $50 billion of diversified future investment opportunities through 2030 including, but not limited to:
Generating annual investment capacity1 of $9-$10 billion while maintaining a strong balance sheet and staying within the target debt-to-EBITDA range of 4.5x-5.0x*
Reaffirming average annual growth rate through 2026 of:
Reaffirming 5% average annual growth rates for adjusted EBITDA, adjusted EPS and DCF per share post-2026 and through the decade
Expecting to return approximately $40-$45 billion to shareholders over the next five years through steadily growing dividends2
Reaffirming 2025 full year financial guidance:
All financial figures are unaudited and in Canadian dollars unless otherwise noted. * Identifies non-GAAP financial measures. Please refer to Non-GAAP and Other Financial Measures section of this news release.
1 Investment capacity is defined as free cash flow (DCF minus common share dividends) plus debt-to-EBITDA capacity generated by growing adjusted EBITDA at approximately 5% annually.
2 2025e to 2029e; assuming dividend per share growth up to cash flow growth guidance
CEO Comment
"Global energy demand is growing and will require all forms of energy. Enbridge's diversified infrastructure footprint is uniquely positioned to meet this demand, delivering a balance of oil, natural gas and renewable power across 5 countries, 43 states, and 8 provinces. Our Liquids super systems provide 6 million barrels per day of oil egress from North America's three most prolific oil basins, and our Ingleside facility exported over 1.2 million barrels per day during the second half of 2024. Our Gas Transmission infrastructure is connected to every operating LNG export facility on the Gulf Coast and is within 50 miles of over 40 billion cubic feet per day of data center and power-generation opportunities. Our Gas Distribution customer base is now over 7 million and growing, driven by residential, industrial and power demand. Our Renewables business currently generates over 5 GW of lower-carbon electricity, which continues to be in high demand from both governments and large blue-chip customers. All four of our growing franchises are opportunity-rich, and we're seeing approximately $50 billion of combined new growth opportunities through 2030.
"We are excited to announce $2.5 billion of accretive investments. In Liquids, Enbridge will invest up to $2 billion in the Mainline through 2028 to support the growing need for ratable egress out of Alberta. This investment will maximize existing operating capacity so that our customers have an even safer, and more reliable, cost-effective path to deliver their product to market. In Gas Transmission we are announcing Birch Grove, a 179 million cubic feet per day expansion of T-North Pipeline, which is expected to provide additional egress to our customers in Northern British Columbia and support LNG exports off Canada's west coast. This $0.4 billion expansion is expected to enter service in 2028, bringing the total capacity of T-North to 3.7 billion cubic feet per day. Finally in Gas Distribution, Enbridge also sanctioned a second phase of the T15 project in North Carolina, which should double the capacity of natural gas delivered to Duke's Roxboro plant, as it transitions to gas-fired generation.
"In combination with the $8 billion of projects we sanctioned in 2024, Enbridge's secured growth now sits at $29 billion. We expect to place approximately $23 billion of that secured backlog into service through 2027 and the remainder is slated to enter service through 2029. Enbridge will continue to be disciplined as we continuously high-grade our $50 billion opportunity set through the end of the decade. Rigorous investment criteria, including project-specific hurdle rates and low-risk commercial models, allow us to capture strong risk-adjusted returns and maximize value for our investors.
"Looking ahead, we'll maintain our capital discipline and financial flexibility. Our long-held target debt-to-EBITDA range of 4.5x to 5.0x remains the sweet spot for Enbridge and our steadily growing business can equity self-fund $9-$10 billion of annual growth capital. The visibility of our growth profile is as strong as ever. We are reaffirming our 2023 to 2026 outlook of 7-9% EBITDA growth, 3% DCF per share growth and 4-6% EPS growth, as well as our post-2026 outlook of 5% average annual growth across all three metrics.
"Growing demand for all forms of energy is creating opportunities across all four of our franchises, emphasizing the value of scale and diversification. Our continued commitment to operational excellence gives us confidence that we'll continue our track record of securing attractive projects and leading the way as we deliver safe, reliable and affordable energy everywhere people need it. Reliable cash flows and our visible growth outlook are expected to support consistent dividend increases and predictable capital returns to shareholders, and we believe that our strategic and financial plans offer a first-choice investment opportunity. At Enbridge, Tomorrow is On!"
Financial Outlook
The Company is reaffirming its financial outlook for EBITDA of 7-9% average annual growth through 2026 and its average annual DCF per share and EPS growth outlooks of 3% and 4-6%, respectively, through 2026. Post-2026, and through the end of the decade, Enbridge expects average annual growth of ~5% for adjusted EBITDA, DCF per share and adjusted EPS.
The Company also reaffirms its 2025 financial guidance for adjusted EBITDA and DCF per share.
New Growth Projects and Investments
Liquids Pipelines: Mainline Capital Investment
Enbridge is announcing plans to invest up to $2 billion in the Mainline through 2028. These investments will be focused on further enhancing and sustaining reliability and efficiency aimed at ensuring the Mainline system continues to operate safely and at full capacity to support maximum throughput for years to come.
Mainline investments are expected to earn attractive risk-adjusted returns within the Mainline Tolling Settlement and enter service ratably through 2028.
Gas Transmission: Birch Grove
In June 2024, Westcoast Energy Inc. completed a successful open season to provide additional egress for natural gas producers in northeastern British Columbia to access markets for their growing production, mainly from the prolific Montney formation. As a result, the Company will be proceeding with a 179 million cubic feet per day expansion of its BC Pipeline in northern British Columbia. The Birch Grove project includes pipeline looping and ancillary station modifications, within existing rights of ways, which are expected to be complete in 2028. Including the previously announced Aspen Point expansion, the Birch Grove project is expected to increase the total capacity of the T-North section of the BC Pipeline to ~3.7 billion cubic feet per day.
The project is underpinned by a cost-of-service commercial model and is expected to cost $0.4 billion and enter service in 2028.
Gas Distribution: T-15 Phase 2
In February, Enbridge sanctioned $0.1 billion to expand the scope of T15 to install additional compression, doubling the capacity of the original T15 project. The expanded T15 project is expected to deliver approximately 510 million cubic feet per day of natural gas to Duke Energy's Roxboro plant in North Carolina. Both phases of T15 are expected to cost an aggregate US$0.7 billion and enter service in 2027/2028.
Details of Enbridge's Investor Conference
Enbridge's investor conference will be held today at 7:00 a.m. MT (9:00 a.m. ET). The conference will be webcast live.
Presentations and supporting materials are posted on Enbridge's website in 'Events and Presentations' within the Investor Relations section.
A webcast replay and transcript will be available and posted to Enbridge's website approximately 48 hours after the event.
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 and 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 more than a century of operating conventional energy infrastructure and two decades of experience in renewable power to advance new technologies including hydrogen, renewable natural gas and carbon capture and storage. 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;2025 financial guidance and near and medium term outlooks, including average annual growth rate, adjusted EBITDA, distributable cash flow (DCF) per share and adjusted earnings per share (EPS) and expected growth thereof; expected dividends, dividend growth and dividend policy; expected EBITDA and expected adjusted EBITDA; expected DCF and DCF per share; expected EPS; expected future cash flows including free cash flow; expected shareholder returns; expected performance of the Company's businesses, including organic growth opportunities and secured growth program; financial strength, capacity and flexibility; expectations on leverage; investment capacity; expected in-service dates and costs related to announced projects and projects under construction; expected capital expenditures and capital allocation priorities; expected future growth and expansion opportunities, including secured growth program and development opportunities, including with respect to Mainline capital investment, the Birch Grove project and the expansion of the T15 project; and expected benefits and timing of transactions.
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, natural gas liquids (NGL), liquefied natural gas (LNG), renewable natural gas (RNG) and renewable energy; energy transition, including the drivers and pace thereof; global economic growth and trade; anticipated utilization of our assets; exchange rates; inflation; interest rates; availability and price of labour and construction materials; the stability of our supply chain; operational reliability and performance; maintenance of support and regulatory approvals for our projects; 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; credit ratings; hedging program; expected EBITDA, adjusted EBITDA; expected earnings/(loss) and adjusted earnings/(loss); expected EPS; expected future cash flows and expected future DCF and DCF per share; estimated future dividends; financial strength and flexibility; investment capacity; debt and equity market conditions; and general economic and competitive conditions. Assumptions regarding the expected supply of and demand for crude oil, natural gas, NGL, LNG, RNG 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 and interest rates 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 stability of our supply chain; 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; the timing and closing of acquisitions, dispositions and other transactions and the realization of anticipated benefits therefrom; and customer, government, court and regulatory approvals on construction and in-service schedules and cost recovery regimes.
Enbridge's forward-looking statements are subject to risks and uncertainties pertaining to the successful execution of our strategic priorities; operating performance; the Company's dividend policy, regulatory parameters and decisions; litigation; acquisitions and dispositions and other transactions, and the realization of anticipated benefits therefrom; project approval and support; renewals of rights-of-way; weather; economic and competitive conditions; global geopolitical conditions; political decisions and evolving government trade policies, including potential and announced tariffs, duties, fees, economic sanctions, or other trade measures; public opinion; changes in tax laws and tax rates; exchange rates; interest rates; inflation; commodity prices; and supply of 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 U.S. securities regulators. The impact of any one assumption, 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 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 makes reference to non-GAAP and other financial measures, including earnings before interest, tax, depreciation and amortization (EBITDA), adjusted EBITDA, adjusted earnings and adjusted earnings per share (EPS), distributable cash flow (DCF) and DCF per share, free cash flow, and debt to EBITDA. 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.
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 and noncontrolling interests on a consolidated basis. Management uses adjusted earnings as another measure of the Company's ability to generate earnings and uses EPS to assess the performance of the Company.
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.
Free cash flow represents DCF less dividends and is used by Management as a measure of cash available to spend and in the calculation of Enbridge's investment capacity, or the Company's ability to invest cash without increasing leverage above the applicable target range.
Debt-to-EBITDA is 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.sedarplus.ca or www.sec.gov.
Unless otherwise specified, all dollar amounts in this news release are expressed in Canadian dollars, all references to "dollars" or "$" are to Canadian dollars and all references to "US$" are to US dollars.
