Enbridge, Inc. (ENB)
December 06, 2012 4:30 pm ET
Jody L. Balko - Vice President of Human Resources & Administration
Al Monaco - Chief Executive Officer, President and Director
J. Richard Bird - Chief Financial Officer and Executive Vice President of Corporate Development
Stephen John Wuori - President of Liquids Pipelines & Major Projects
Linda Ezergailis - TD Securities Equity Research
Theodore Durbin - Goldman Sachs Group Inc., Research Division
Matthew Akman - Scotiabank Global Banking and Markets, Research Division
Andrew M. Kuske - Crédit Suisse AG, Research Division
David McColl - Morningstar Inc., Research Division
Robert Kwan - RBC Capital Markets, LLC, Research Division
Steven I. Paget - FirstEnergy Capital Corp., Research Division
Paul Lechem - CIBC World Markets Inc., Research Division
John D. Edwards - Morgan Keegan & Company, Inc., Research Division
Pierre Lacroix - Desjardins Securities Inc., Research Division
Juan Plessis - Canaccord Genuity, Research Division
David Noseworthy - CIBC World Markets Inc., Research Division
Good afternoon, ladies and gentlemen, and welcome to the Enbridge Inc. 2013 Guidance Conference Call.
I would now like to turn the meeting over to Jody Balko, Vice President, Investor Relations and Enterprise Risk.
Jody L. Balko
Thank you. Good afternoon, and welcome to the Enbridge Inc.'s 2013 Guidance Call. With me this afternoon are Al Monaco, President and Chief Executive Officer; Richard Bird, Executive Vice President, Chief Financial Officer and Corporate Development; Steve Wuori, President of Liquids Pipelines; and John Whalen, Senior Vice President and Controller.
This call is webcast, and I encourage those listening on the phone lines to view the supporting slides which are available on our website. A replay and podcast of the call will be available later today, and a transcript will be posted to our website shortly thereafter.
The Q&A format will be the same as always. We'll take questions from the analyst community first, and then invite questions from the media. [Operator Instructions]. Lastly, I would also reminded you the Jonathan Gould and I will be available after the call for any follow-up questions that you may have.
Before we begin, I'd like to point out that we may refer to forward-looking information during the call. By its nature, this information applies certain assumptions and expectations about future outcomes, so we remind you it is subject to the risks and uncertainties affecting every business, including ours. This slide includes a summary of the more significant factors and risks that might affect future outcomes for Enbridge, which are also discussed more fully in our public disclosure filings available on both the SEDAR and EDGAR systems.
With that, I will now turn the call over to Al Monaco.
Thanks, Jody, and good afternoon, everyone. First of all, let me apologize for what appears to be a late cross of the news release items that we had. I'm not sure what happened there, but we'll hopefully make sure that, that doesn't happen again.
Today, though, we're very pleased to provide the highlights of 3 positive items that reflect the strong outlook we have for Enbridge. These are an increase in the quarterly dividend, our 2003 earnings guidance picture and a significant development on our crude oil market access strategies. That is, of course, that we are proceeding with the $6.2 billion Light Oil Market Access Program, which I'm going to come back to in a few minutes.
We've also had 2 other announcements in the last month that I'll recap this afternoon to give the fuller picture of what's been happening here. All in all, 2012 is shaping up to be a very strong year on a number of fronts, including some $14 billion in new secured capital investments that will drive earnings growth for years to come.
Earlier today -- I'm now onto Slide 4. Earlier today, our Board of Directors approved an increase in the quarterly dividend to $1.26 per share, which equates to an annualized increase of just under 12% for 2013. This increase reflects management's and the board's confidence in both our near-term and medium-term outlook in our ability to grow earnings and cash flow.
As shown on the chart that you have, we continue the string of strong dividend growth, which illustrates the predictability of our financial performance and the strength of the business model. Based on the $1.26 per share dividend in our earnings expectations for the next year, our dividend payout ratio is consistent with 2012 and remains near the top end of our payout range policy of between 60% to 70% of earnings.
Onto the next slide, you can see we have our 2013 EPS guidance range relative to our 2012 guidance and 2011 actual results. As you see, we expect EPS to be in the range of $1.74 to $1.90 per share. The midpoint of that range would generate a 2-year annual growth rate of just under 12%, which are the first 2 years of our 5-year plan. So if we can achieve that, it would represent another strong industry-leading year for EPS growth in 2013.
Now this is particularly notable in that 2013 will be a very large capital spend year, and we won't see the earnings contribution for many of the large projects currently under construction until 2014 and beyond. Richard's going to provide some details on our expectations for 2013 in a few minutes.
Let me now spend a few moments on recent Liquids Pipelines activity, beginning with the Edmonton to Hardisty mainline expansion. Now this will be a 36-inch line that will tie into our Alberta Clipper line at Hardisty and be capable of moving up to 800,000 barrels per day. The initial capacity will be 570,000. This is a very important outcome in that the expansion will provide much needed capacity required by industry. Significant production growth is expected in Western Canada, and a lot of that crude is destined for Edmonton. So adding this capacity between Edmonton and Hardisty is going to meet the demand that is expected in Edmonton and the patterns that we'll see between Edmonton and Hardisty. We expect to have that project ready for service as early as mid-2015, and the line will be built within existing right of way.
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