8-K

ENBRIDGE INC 8-K Report (Feb 17, 2017)

Filed February 17, 2017For Securities:ENBENBMFEBBGFEBRGFEBRZFENBGFENBRFENFFFEBGEFENBFFENBHFENBNFENBOFENBSFEBBNFENNPF

Summary

Enbridge Inc. reported its fourth quarter and full-year 2016 financial results, showcasing solid performance driven by its Liquids Pipelines segment, which recovered strongly after the Alberta wildfires. The company highlighted significant progress in advancing its growth strategy, notably the transformative merger with Spectra Energy, which is on track to close in the first quarter of 2017. This merger is expected to create a premier North American energy infrastructure company with a robust growth pipeline and strong dividend growth prospects. Financially, Enbridge reported positive earnings and available cash flow from operations for both the quarter and the full year, exceeding initial guidance. The company also demonstrated its commitment to returning value to shareholders by announcing a 10% increase in its quarterly dividend, with expectations for further increases post-merger. Strategic asset monetizations and capital raises were executed to enhance financial flexibility and support growth initiatives, including investments in offshore wind projects in Germany and the Bakken Pipeline System.

Key Highlights

  • 1Enbridge reported strong fourth quarter and full-year 2016 results, with adjusted earnings of $522 million and $2,078 million, respectively, and available cash flow from operations (ACFFO) of $879 million and $3,713 million.
  • 2The merger with Spectra Energy Corp. received overwhelming shareholder approval and is on track for closing in Q1 2017, creating a leading North American energy infrastructure company.
  • 3Enbridge announced a 10% increase in its quarterly common share dividend to $0.583 per share, marking the 22nd consecutive year of dividend increases.
  • 4The company successfully executed its growth capital program, bringing $2 billion of projects into service in 2016 and expects to place an additional $6 billion into service in 2017.
  • 5Significant strategic moves include the acquisition of an interest in the Bakken Pipeline System and the acquisition of a 50% interest in the Hohe See Offshore Wind Project in Germany, reinforcing diversification and long-term growth.
  • 6The company continued its asset monetization plan, raising over $3.7 billion in capital in Q4 2016 and progressing towards its $2 billion asset monetization target.
  • 7The Northern Gateway Project application was dismissed by the Canadian Federal Government, resulting in a $373 million impairment charge for Enbridge.

Frequently Asked Questions

For the fourth quarter of 2016, Enbridge reported earnings of $365 million ($0.39 per common share) and adjusted earnings of $522 million ($0.56 per common share). For the full year 2016, earnings were $1,776 million ($1.95 per common share) and adjusted earnings were $2,078 million ($2.28 per common share). Available cash flow from operations (ACFFO) for the full year was $3,713 million ($4.08 per common share).

The merger with Spectra Energy received overwhelming shareholder approval from both companies and is on track to close in the first quarter of 2017. This combination is expected to create North America's premier energy infrastructure company, significantly enhancing Enbridge's natural gas footprint and diversifying growth opportunities. The combined company anticipates supporting dividend growth of 10-12% annually through 2024.

Enbridge announced a 10% increase in its quarterly common share dividend to $0.583 per share, payable on March 1, 2017. This marks the 22nd consecutive year of dividend increases. Upon closing the Spectra Energy merger, the company expects to further increase its quarterly dividend, bringing the aggregate increase to approximately 15% above the 2016 rate and maintaining an expected 10-12% annual dividend growth through 2024.

Enbridge successfully brought $2 billion of capital projects into service in 2016 and anticipates placing an additional $6 billion into service in 2017, including projects like the Regional Oil Sands Optimization project and the Norlite Pipeline System. Furthermore, the company made strategic investments in offshore wind in Germany (Hohe See Offshore Wind Project) and acquired an interest in the Bakken Pipeline System, diversifying its energy portfolio and securing future growth.