AGM 2020

May 5, 2020

Good afternoon, ladies and gentlemen. My name is Karen Uehara, Vice President and Corporate Secretary of Enbridge. There will be 3 parts to today's meeting. 1st, the formal business portion will address the matters to be voted on today, including questions specific to the resolutions and will be conducted by our Chair, Mr. Greg Evel. In the unlikely event of a technical disruption, Mr. Al Monaco, our President and CEO and Director, will chair the meeting. Next, after the formal business of the meeting, Al Monaco will deliver his remarks to our shareholders. Finally, we will have the question and answer session. Before we begin with the formal business portion of the meeting, I will provide some comments on voting and questions at today's meeting. As a reminder, only registered shareholders and duly appointed proxy holders are able to vote or ask questions. Voting during this meeting can only be done through our virtual voting platform on the webcast. Once you are logged into the webcast with your control number and Enbridge 2020 with a capital E as your password, click the voting icon at the top of the webcast page. The polls are now open. Voting can be completed at any time from now until the end of the formal business of the meeting. Thank you to those of you who have already voted. If you have already voted in advance of the meeting and do not wish to change your vote, you do not need to vote again during the meeting. For those who have not yet voted, we encourage you to vote now. Questions during the meeting can only be submitted through our webcast platform. Once you are logged into the webcast with your control number and password, click the question icon at the top of the webcast page. Type in your question in the text box at the bottom of the messaging screen and then click the send button. If your question relates to a specific motion, please start your question by identifying the motion, so we can address your question at the appropriate time of the meeting. We will save all questions that do not identify which motion they relate to for the general question and answer session following the formal business and the CEO's remarks. If a question is personal in nature, we will follow-up with you individually after the meeting. We will receive the questions and read them out in order for everyone to be aware of the question being dealt with. If you have questions, we encourage you to submit them now. Questions can be submitted throughout the meeting. During the question and answer session, our CEO will answer your questions. If we have a number of questions that are the same or very similar on a topic, we will group the questions and mention that we have received similar questions. During the general question and answer session. At Enbridge, we believe active engagement with our shareholders and stakeholders on an ongoing basis through a variety of avenues is key to transparency, open and informed dialogue and sharing our story. Finally, we would like to remind you that our answers to your questions and our CEO's remarks may contain forward looking information. By its nature, this information contains forecast assumptions and expectations about future outcomes, which are subject to the risks and uncertainties discussed more fully in our public disclosure filings. We also refer you to non GAAP measures. I now welcome the call to the operator and I am the Chair of the Enbridge Board. It is my pleasure to welcome you to the Enbridge's 2020 Annual Meeting of Shareholders. We decided to hold our Annual Shareholders Meeting in an all virtual format this year due to the COVID-nineteen containment and in order to support the health and well-being of our communities, shareholders, employees and stakeholders during the COVID-nineteen outbreak. Our main objective is to ensure that all shareholders have the same opportunities to participate and vote regardless of their geographic location. COVID-nineteen has created extraordinary circumstances and challenges. I would like to acknowledge all those affected and I'd like to thank the Enbridge Board, management team and employees for their part in protecting the health and safety of our employees and the public and ensuring ongoing safety and reliability our facilities. We usually start with a land acknowledgment, but today we are gathered by technology from locations across North America, where indigenous peoples have been and continue to be stewards of the land. So, I'd like to acknowledge and to thank all the peoples whose footsteps have marked these territories for centuries. I now call the meeting to order. As Chair of the Enbridge Board and in accordance with our bylaws, I will act as the Chair of today's meeting. Karen Yajara, Vice President and Corporate Secretary, will act as Secretary. And of course, Al Monaco, our President and Chief Executive Officer is also present at the meeting today. Our external auditors are also available to answer questions as appropriate. In order to ensure that the business of today's meeting proceeds smoothly, Ms. Yajara, who is a shareholder and duly appointed proxy holder, will move and second proposals related to the items of business identified in the notice of meeting. As in past years, we will have a general question and answer session after the formal business of the meeting is completed. As previously noted, during the formal portion of the meeting, we will also pause to address questions and comments submitted by shareholders and proxy holders that are specific to the motions being presented during the meeting. If you are a shareholder or proxy holder with a question that you'd like addressed during the meeting, I ask that you submit your question now. This afternoon, we'll deal with items of business indicated in the notice of meeting and management information circular. Shareholders will first be asked to consider the minutes of the last meeting of shareholders, which was held on May 8, 2019. They will then attend to the regular business of receiving the annual financial statements, together with the accompanying report of Enbridge's auditors. Shareholders will then be asked to elect the directors and vote on the appointment of the auditors for the next year, as well as authorize the directors to fix the auditors' remuneration. This year, shareholders will be asked to consider and approve amendments to and the continuation of the corporation's existing shareholder rights plan. Another item of business to be considered at today's meeting is the ratification, confirmation and approval of certain amendments to Enbridge's General Bylaw 1. Lastly, as has been the case in prior years, shareholders will be asked to cast an advisory vote on the corporation's approach to executive compensation, which is commonly referred to as stay on pay. 11 of our 12 directors are standing for reelection, and the number of directors to be elected today has been fixed at 11 by the Board. Catherine L. Williams was appointed to the Board on November 1, 2007. Ms. Williams is not standing for reelection due to demands on her time and from other commitments. On behalf of the Board of Directors and Management, I'd like to express our sincere gratitude for Kathy's invaluable contributions during her time as the Director of Enbridge. Kathy, your contributions, your insights and wise counsel will be very much missed by all of us. I'd also like to take the opportunity to welcome to the Board Mr. Gregory J. Goff, who joined the Board in February 2020. Mr. Goff has extensive energy industry experience and is a strong addition to the Enbridge Board. I'd also like to thank your CEO, Al Monaco, and the Enbridge Management Group for their fine leadership and also you shareholders for giving me the opportunity to serve as Director and Chair of the Board. Mr. Stephen Bandola, representative of the corporation's registrar and trust agent, Computershare Trust Company of Canada, is in attendance today, and I appoint him to act as scrutineer for the meeting. I will now ask Karen Uehara to confirm the proper notice of the meeting was given and that a quorum is present for the transaction of business. Thank you, Mr. Chair. The notice of availability of proxy related materials for this meeting and form of proxy were mailed on March 20, 2020, to shareholders of record at the close of business on March 9, 2020. Proof of mailing to registered shareholders will be filed with the records of this meeting. The scrutineers report shows 10,009 103 proxies received, representing a total of 1,416,000,000,000 dollars 3,86,045 shares, which is 69.94% of the shares outstanding on March 9, 2020. Based on the Scruton News report, I confirm that a quorum is present for the transaction of business at this meeting. Thank you very much. I declare this meeting to be properly constituted for the transaction of business. Ms. Yajaira, may I please have a motion to approve the minutes of the Annual Meeting of Shareholders held on May 8, 2019. Mr. Chair, I move and second that the minutes of the Annual Meeting of Shareholders held on May 8, 2019, as now submitted to this meeting, be taken as read and approved. Thank you. Can you please advise if any questions specific to this motion were submitted? Mr. Chair, no questions specific to this motion have been submitted. Thank you. As there have been no questions or comments and unless we receive any objections otherwise, we will accept the minutes as approved. The next item of business is the placing before the shareholders of the financial statements and the auditor's report for the year ended December 31, 2019. The financial statements and the auditor's report for the year ended December 31, 2019, are contained in the company's 2019 annual report. The financial statements have been approved by the Board of Directors and are available on the company's website. The corporation's auditors are PricewaterhouseCoopers LLP. Mr. Paul Fitzsimmons of PricewaterhouseCoopers will be available during the general question and answer session, Monaco's remarks to answer any of your questions regarding the auditor's report. The next item on the agenda is the election of directors for the year. 11 directors are to be elected at this meeting. Ms. Uhara, may I please have a nomination for the election of 11 directors to serve on the Ambridge Board for the upcoming year? Mr. Chair, I am pleased to nominate each of the following individuals: Pamela L. Carter, Marcel R. Coutu, Susan M. Cunningham, Gregory L. Evel, J. Herb England, Charles W. Fisher, Gregory J. Goff, V. Maureen Kempston Darks, Theresa S. Madden Al Monaco and Dan C. Titcher for election as Directors of the corporation next annual meeting or until their respective successors have been elected. Thank you, Karen. As no other nominations for Director were received in accordance with the company's advance notice by law, I hereby declare the nominations closed. I will now entertain a motion respecting the election of directors. Mr. Chair, I move and second that Pamela Carter, Marcel Coutu, Susan Cunningham, Gregory Ebel, Herb England, Charles Fisher, Gregory Goff, Maureen Kempston Dark, Teresa Madden, Al Monaco and Dan Toetcher be elected directors of the corporation to hold office until the close of the next annual meeting or until their respective successors have been elected. Thank you. Mr. Chair, no questions specific to this motion were submitted. Thank you. We will now then proceed with the vote. Please record your vote now, remembering that if you have already voted in advance and do not wish to change your vote, no further action is required. The next item of business is the appointment of the corporation's auditors. Price WaterhouseCoopers or its predecessor Price Waterhouse has been the auditors of Enbridge for the past 26 years. The Board of Directors on advice from the Audit, Finance and Risk Committee of the Board recommends their reappointment. Ms. Yohara, may I please have a motion? Mr. Chair, I move and second that PricewaterhouseCoopers LLP be appointed auditors of the corporation to hold office until the close of the next annual meeting of shareholders as such remuneration as shall be fixed by the Board of Directors. Thank you very much. And can you please advise if any questions specific to this motion were submitted? Mr. Chair, no questions specific to this motion have been submitted. Thank you. We will now proceed with a vote on this motion. Please record your vote now, remembering that if you have already voted in advance and do not wish to change your vote, no further action is required. The next item of business is a resolution to ratify, confirm and approve the shareholder rights plan. The shareholder rights plan resolution must be passed for the shareholder rights plan to continue, otherwise it will terminate. The Board of Directors has determined that the continuation of the shareholder rights plan with amendments as described in the management information circular is in the best interest of your corporation and recommends that shareholders vote for this resolution. Ms. Yohara, may I have a motion, please? Mr. Chair, I move and second that the resolution to ratify, confirm and approve the shareholder rights plan, the text of which is set forth on Page 23 of the management information circular for this meeting be and is hereby approved. Thank you. Can you please advise if any questions specific to this motion were submitted? Mr. Chair, no questions specific to this motion have been submitted. Thank you very much. We will now therefore proceed with the vote. Please record your vote now, remembering that if you've already voted in advance and do not wish to change your vote, no further action is required. The next item of business is a resolution to ratify, confirm and approve certain amendments to Enbridge's General Bylaw 1. The Board of Directors has determined that the ratification, confirmation and approval of Enbridge's General Bylaw No. 1 with amendments as described in the management information circular is in the best interest of the corporation and recommends that shareholders vote for this resolution. Ms. Yohara, may I have a motion, please? Mr. Chair, I move and second that the resolution to ratify, confirm and approve General Bylaw No. 1 of Enbridge Inc, the text of which is set forth on Page 23 of the management information circular for this meeting be and is hereby approved. Thank you. And can you please advise if any questions specific to this motion were submitted? Mr. Chair, no questions specific to this motion have been submitted. Thank you. With that, we will now proceed with the vote. Please record your vote now, remembering that if you have already voted in advance and do not wish to change your vote, no further action is required. The next item of business today is an advisory vote on the corporation's approach to executive compensation, commonly known as say on pay. Although this vote is optional and non binding, it gives shareholders an opportunity to provide important input to the Board of Directors. Ms. Yohara, may I please have a motion? Mr. Chair, I move and second that the resolution to accept the approach to executive compensation, a text of which is set forth on Page 24 of the management information circular for this meeting, be and is hereby approved. Thank you. And can you once again advise if any questions specific to this motion were submitted? No, Mr. Chair. No questions specific to this motion were submitted. Thank you. We will now then proceed with the vote. Please record your vote now, remembering that if you have already voted in advance and do not wish to change your vote, no further action is required. Thank you again to all our shareholders who have voted in advance or during today's meeting. We will now pause for a moment for the scrutineer to tabulate the preliminary results of the voting and provide those results to us. Ms. Uhara, do you have a preliminary results of the voting? Yes, Mr. Chair. I have received confirmation from the scrutineer that each of the 11 directors has been elected by at least 85% of the votes cast for the election of directors. The motion to appoint PricewaterhouseCoopers LLP as the corporation's auditors and have the directors fix the approve the shareholder rights plan has been approved by at least 95% of the votes cast on that resolution. The motion to ratify, confirm and approve the amendment to General Bylaw No. 1 of Enbridge Inc. Has been approved by at least 99% of the votes cast on that resolution. And the advisory vote on the approach to executive compensation has been approved by at least 94% of the votes cast on that resolution. Thank you very much, Karen. I declare each of the resolutions considered at today's meeting in respect to those matters as carried. The exact number of votes cast in respect of each matter will be filed on EDGAR and SEDAR and made available on our website. I thank you again for your strong show of support, interest and continued loyalty by attending today's meeting. As all matters of business, I will now turn the call over to Mr. President and Chief Executive Officer to deliver his remarks and conduct the general question and answer session. 2019 marked the close of our 3 year plan to diversify our business to make us even more resilient. Today, we have 3 unmatched franchises: Our best in class liquids pipelines, natural gas transmission and utility businesses deliver energy to the most reliable industrial, commercial and consumer markets. And we have an emerging renewables business that is growing nicely. Every day, we deliver the energy people need to major centers like Vancouver, Seattle, Chicago, Toronto, New York, Boston and many others in between. In the last 3 years, we've taken steps to make us even stronger. We sold $8,000,000,000 of assets that didn't fit at great value for shareholders. We simplified our organization and reduced costs by more than 700,000,000 dollars and our balance sheet is better than it ever has been. In 2019, we made progress on our priorities. We added liquids pipeline capacity, established new rates for our Texas Eastern Gas business and combined our gas distribution utilities. Those actions led to better results for us and our customers, which is what we strive to do. We completed $9,000,000,000 worth of projects, including Line 3 in Canada, Gray Oak in the Gulf Coast, and the Hohese offshore wind farm off the German coast. Distributable cash flow grew to $4.57 per share, exceeding our 2019 budget. We increased our dividend by another 10%, our 25th consecutive annual increase. And at the same time, we reduced leverage to the bottom of our policy range. While we had good results, we experienced an incident in our gas transmission business, which caused a fatality and our hearts go out to the family. No incident is acceptable to us and this tragedy deepens our resolve. Completion of our 3 year plan put us in a strong position to weather 2 unexpected storms, COVID-nineteen and the commodity price crash. This pandemic has threatened the health of millions of people and devastated families, particularly the most vulnerable in our communities. And unfortunately, it's not done yet. COVID is testing everybody's resilience. Now we've been through pandemics and oil shocks before, but this is different. The world has never faced such a severe and immediate economic downturn nor has our industry seen this degree of volatility in energy markets. Jobs lost, businesses shuttered, lives disrupted, all of that happened in just mere weeks. We're all rightly recognizing the heroic efforts of frontline workers like medical professionals and emergency responders. We owe them a lot, there's no doubt about that, and we're not going to forget. In the same way, I'm deeply proud of how our people responded to this crisis, and the Chairman mentioned this. Especially the dedicated women and men across Enbridge who are keeping our systems running safely and reliably for our customers in a very tough time. With their own anxiety and uncertainties, the environment. My very sincere thanks to our people in our control centers, field operations, customer call centers, emergency dispatch and many, many support functions. I'm also very proud of the way we're living our values at this time. Supporting food banks, indigenous nations, social services, mental health, first responders and healthcare providers. When you face a crisis like COVID, we all reassess our priorities and that's what we've done at Enbridge. Safety and reliability are always number 1 on the list, and that won't change. While our strategically positioned assets, diversity of cash flow and strong commercial model protects us from storms like this, we're not immune from COVID and commodity crash storms. We're mitigating the impacts from the downturn by reprioritizing our spend and lowering costs. And even though our balance sheet is strong, we're building more and more financial flexibility. And with $14,000,000,000 of excess liquidity, we can fund our entire capital program and debt maturities well into 2021 without accessing capital markets. That brings me to the role we can play as we start to emerge from this pandemic. The one thing that's very clear today, it's the critical role that energy plays in our economy and day to day life. COVID has brought urgent perspective and a new clarity to the debate about the future of energy. For example, as COVID-nineteen threatened our cities and towns, governments across North America recognized the importance of what we do and declared our assets to be critical infrastructure. Another is that the energy we deliver is a key input to the very products used to fight COVID that you hear about every day on the news. PPE, ventilators and respirators, gloves, testing kits and hospital equipment. Our business enables the supply chains and transportation to restock grocery shelves and deliver what we need. And the jobs, investment and community support our economy thrives on. As we begin to emerge from COVID, the focus shifts to reigniting our economy. Companies like ours boost the economy and major infrastructure projects have always been a key component of that. And with a strong balance sheet and major shovel ready projects, Enbridge is poised to help make the recovery strong and durable. Investing in energy infrastructure is an excellent way to invest in North American jobs now, but it also drives long term growth, innovation and climate solutions. And if you listen carefully to what the experts are saying today, it's clear that climate change is best addressed with innovation across the entire energy system. While we're managing COVID and beginning to get the economy going, we won't lose focus on building a company for the future. That future will be driven more and more by 3 things: excellence in environmental, social and governance or ESG technology and developing our people. Strong ESG is part of our DNA at Enbridge. We're recognized as an ESG leader in our sector and we're very proud of this. We report annually on the ESG factors that our stakeholders care about most, including climate and the energy transition, safety and integrity and community and indigenous engagement. We've set and met emissions reductions targets in the past and we're working to set new targets now. Our natural gas and renewables business provide excellent low carbon growth platforms and we're continuing to invest in low carbon innovation by capturing methane from landfills. Building for the future also means embracing technology. Our business is driven by vast amounts of data. Harnessing that data provides us with a strong competitive advantage. Our technology labs with locations in Houston and Calgary are helping us to take the next step. One of those steps is to optimize all of our 20 crude oil terminals across North America to reduce rate loss and improve utilization, which brings me to our people. We have an extraordinarily talented, hardworking and dedicated team at Enbridge. We believe deeply that diversity is the key driver of success. This is especially true in the energy business. A diverse team in fact allows us to better understand our customers and where our economy is headed. As our people embrace disruption and become even more accustomed to thriving in the face of uncertainty, will become even more resilient. To close, I and the management team thank our Board of Directors for their guidance, especially during this time. And as Greg said, my sincere thanks as well to Kathy Williams for her contributions over the years. The management team has very much benefited from Kathy's financial and energy industry experience and as well welcome to Greg Goff to the Board. His extensive experience in our industry will be very helpful to the management team. So I want to wrap up by saying that despite the current downturn, Enbridge is resilient and well prepared to weather storms just like this. Our resilience, our low risk business and financial strength mean that we're also well positioned for the future, so we can continue our growth for decades to come. As we start to come out of COVID and the focus shifts to economic recovery, jobs and tackling government debt, we're poised to be part of that. And we'll do this while maintaining our focus on safety, reliability and serving our customers and delivering the energy that people need and want every single day. I thank you for listening. Please stay safe, healthy and resilient. And with that, we will take your questions in the question period. Thank you, Mr. Monaco. We will now proceed with the general question and answer session. Ms. Kacem, Enbridge's Director of Investor Relations, will read out questions that have come in today for Mr. Monaco to respond to. Just a reminder that questions may be submitted by registered shareholders and duly appointed proxy holders. Thank you, Ms. Uhara. We have received a general question. I would like to know how the dividend stands due to coronavirus. Will the company still stands behind the dividend? Okay. Well, thank you for that question. Certainly on point and a good question these days. I think for our shareholders, the dividend has always been a very critical part of our value proposition. And as I said, this year, we increased the dividend by another 10%, which makes it the 25th consecutive increase. And we're very proud of that history. And as I said, it's very much part of the value we deliver. Obviously, we're not immune to what's happening around COVID, but I think what's really important here to emphasize is the resiliency to these kinds of downturns. We have a very diverse set of cash flows across entire North American picture. We've got different types of businesses. Our customers are certainly the best in the energy landscape, very well positioned and strong balance sheet. Our own financial policies are very conservative and we've got commercial structures that really generate a highly predictable stream of cash flow. So to get back to the question, the answer is yes. Our intention is to fully maintain the dividend as we go forward. So thank you very much for that question. It's a good one. Thank you, Mr. Monaco. 7 out of the 10 directors are U. S. Directors. Can you comment on the split on a Canadian company board? Also, attendance by Mr. Couto at 87% and Mr. Cunningham at 75% is low. Can you comment on whether directors are providing sufficient time? Okay. Well, I guess on the first part of that question on the split between Canadian and U. S. Directors, I think first of all, in terms of directors, we always search for the most qualified directors. We look for strong business judgment and experience in the industry and outside of the industry. And as I said earlier and referred to in my remarks, I think we certainly have all of that. We generally target to get to the question about half and half for Canadian directors and U. S. Directors and that reflects the mix of the assets and the mix of the cash flows. I think from time to time this comes out of balance just depending on when retirements come up. In fact, Kathy Williams is, as Greg mentioned, retiring from the Board. So that brings us down a little bit in terms of Canadian directors, but we fully expect that over the long term these numbers balance out. In terms of the second part of that question, as far as directors' time and effort, I can assure you that the directors of Enbridge spend a considerable amount of time and effort in the business of the company. They've exhibited extremely strong judgment and we fully believe that they're providing excellent value to the company and to the shareholders. Thank you, Mr. Monaco. Compensation for the Board is over the top for part time work as well as executive compensation. Can you comment on the increase that we've seen over the years? Okay. Well, again, with respect to directors and the compensation versus time, Obviously, we're part of the information that flows to directors on a very continuous basis, not just quarterly, but they're involved in the affairs of the business on an ongoing basis. And in my view, they dedicate considerable time and much into making sure they're aware of what's going on in the business and we certainly tap them for their judgment and their wisdom in the business. So that's our view on the time spent versus compensation. I will also add though that the compensation for directors as is the case with the executive management team is always reviewed in fact annually, and it's compared to the peer group that we're aligned with 19 other companies and the compensation is certainly aligned with those other companies. We target approximately the P50 level and that's where we sit today. Thank you. Executive. Executive. Okay. 1st of all, let me say to this question that the executive team fully understands that we're well compensated. But I think the major point here on the magnitude of compensation and the makeup of it is that we are totally aligned with our shareholders. 90% of my compensation and just about that amount for the rest of the executive team is driven and fully aligned with the equity shareholders view. In addition to that, compensation is performance driven. We look at total shareholder return. We look at growth in distributable cash flow per share. We look at annual financial performance relative to what we guide in the market. We also compensate directly for safety performance and operating performance. The increases that were being referred to, I think, in the question, relate primarily, I would say, to long term incentive payments and bonus percentages that could be earned depending on performance. So again, total alignment there with shareholders. And just to reiterate, we're targeting approximately the midpoint of the group of comparable companies. And I would say generally, we're probably a little bit below that level certainly this year. Maybe I'll just make one more comment about this as far as my personal alignment with shareholders with regard to this question. I think you can check the records on this reinvestment of entire amount of dividends that I have received over the last little while based on the shares that I own, have a fairly large component of my own investment portfolio in the company stock. I reinvest a good chunk of my salary and on top of that additional investments made in 2019. So again, point being that we have great alignment with all of our shareholders. Thank you. Are there more delays in completing Line 3 and has the date of completion been established? Okay. That's a good question. Well, let me start with the last part of that. We don't have a firm date of completion and that is because we're waiting for the permits to come through. We're very hopeful that we'll be getting our permits soon for Line 3 in Minnesota. As the questioner probably knows, we've completed the Canadian portion. So the only segment left to be completed is in Minnesota. We had a very good announcement on Friday by the Minnesota PUC, which gave their final written orders related to the approval of that project. So hopefully, with that other way, we can focus on the actual permitting in Minnesota. And I know the agencies are working very hard on that right now. So hopefully, we'll get through this process quickly and efficiently. I'll say that the agencies are doing a very thorough job of making sure that the permits are well stated so that we can complete the project safely. Thank you, Mr. Monaco. There are no further questions. Okay. Thank you. As there are no more questions, I'll turn it back over to the Chair to conclude today's proceedings. Thank you very much, Al. And thank you to everyone again for attending today's meeting. We appreciate that these are unprecedented times and the value we put on your time and commitment to our company cannot be overstated. Please continue to use your best efforts to stay safe and healthy. You may now disconnect from the broadcast and thank you again for your support.