Slide 1: Q2 Financial Results & Business Update
Q2 Financial Results & Business Update July 29, 2020 Al Monaco, Chief Executive Officer | Colin Gruending, Chief Financial Officer
Slide 2: Legal Notice
Legal Notice Forward-Looking Information This presentation includes certain forward-looking statements and information (FLI) to provide potential investors and shareholders of Enbridge Inc. (Enbridge or the Company) with information about Enbridge and its subsidiaries and affiliates, including manag
Slide 3: Agenda
Agenda ENB Pipeline-Utility Value Proposition • Industry perspectives • Business update • Financial review • Mid-year checkpoint 3
Slide 4: A Changing Energy Landscape
A Changing Energy Landscape Global Oil Demand Outlook1 (MMb/d) ~10 MMb/d There are challenges… but, fundamentals intact Increase to 2030 • Adapting to long-term • Growing global energy energy transition demand; all forms of energy needed • COVID-19 impacts; low energy prices • North American energy
Slide 5: Enbridge Positioned to Win
Enbridge Positioned to Win Resilient through all market cycles Large integrated network Financial Commodity Alberta COVID-19 Crisis Price Forest $16,000 Collapse Fires $100 Deliver to the best markets $14,000 WTI $12,000 $75 $10,000 Diversified sources of cashflow and growth opportunities $8,000 $50
Slide 6: Transparency to Near-Term Growth
Transparency to Near-Term Growth ~4-5% 5-7% Executing $11B Secured Growth DCF/share ~1-2% growth Optimizing the Base Liquids Pipelines •• U.S. Line 3 replacement $4.50 - 4.80 Southern Access expansion • T-South expansion $4.57 • Embedded toll Gas • Atlantic Bridge • System modernizations Transmissio
Slide 7: Q2 Highlights
Q2 Highlights Robust response to • Ongoing safe and reliable delivery of energy COVID-19 ongoing • Ensuring health and safety of our workforce Strong Q2 business • Achieved $1.21 DCF per share performance • Enabled $300M of cost reductions Preserving financial • 2020 funding plan complete (issued $2
Slide 8: Demand Outlook
Demand Outlook N. America Refined Product Demand1 N. America Crude Oil Demand Outlook2 (kbpd) (Rystad – July 2020; kbpd) 12,000 25,000 2019 Demand 10,000 20,000 8,000 -9% July Avg: YoY 15,000 6,000 ~18 mbpd 4,000 -44% 10,000 YoY -13% -41% April Avg: +3 mbpd 2,000 -15% -62% 5,000 ~15 mbpd 0 April Jul
Slide 9: ENB Core Market Deliveries Recovering Faster
ENB Core Market Deliveries Recovering Faster PADD II Refining Margins vs. PADD I2 Western (US$/BBL) Canada $15 PADD II PADD I 75% 73% $12 $9 Eastern Canada $6 70% 86% April July $3 PADD IV PADD II $0 April July April July April July PADD V 87% 86% 88% 98% Heavy Coking Light Sweet Bakken April Ju
Slide 10: Mainline Outlook
Mainline Outlook WCSB Blended Supply Outlook1 2020 Mainline Throughput Outlook (kbpd) (Ex-Gretna throughput) 5,000 3000 Avg. 2020 Pre-COVID Planned Throughput : 2.85mbpd 200-400 100-300 ~1.1 mbpd 2500 Actual kbpd kbpd 4,000 2.84 Actual Forecast Forecast 2000 mbpd 2.44 2.45 - 2.65 2.55 - 2.75 3,000 m
Slide 11: Secured Growth Projects Update
Liquids Pipelines Secured Growth Projects Update WCSB egress additions • Attractive risk-adjusted returns on investment Edmonton • Support additional volumes as demand recovers Hardisty 2019 Mainline Optimizations1 ~100 kbpd AB Mainline Optimizations1 ~50 SK 2020 Mainline Optimizations1 kbpd 2020 Ph
Slide 12: Line 3 Replacement: Minnesota Update
Liquids Pipelines Line 3 Replacement: Minnesota Update Regulatory and Permitting Milestones Regulatory: July 20: MPUC written order denying petitions EIS for reconsideration on Environmental Impact Public EIS / CN / Orders Petitions for Authorization MPUC1 Spill Modelling Consultation RP Decision Is
Slide 13: Great Lakes Tunnel Project
Liquids Pipelines Great Lakes Tunnel Project Critical infrastructure Making a safe pipeline even safer ON State-of-the-art tunnel Superior • Extensive geotechnical review confirmed feasibility and engineering design underway MN Economic benefits of tunnel WI Line 5 • >2 million work hours required M
Slide 14: Mainline Contracting Regulatory Process
Liquids Pipelines Mainline Contracting Regulatory Process Estimated Process Timeline: Contracting Benefits: >70% of volumes Dec 19, 2019 support Filed application • Priority access offering with CER • Toll certainty Regulatory: • Secures prime long term Public Oral markets for WCSB supply CER Hearin
Slide 15: Successfully Executing on Rate Proceedings
Gas Transmission Successfully Executing on Rate Proceedings Texas Eastern Algonquin BC Pipeline Other rate cases in progress: East Tennessee Alliance 2019 Rate Base1 US$6.0B US$2.2B C$2.9B Timeframe Effective Jun 2019 Effective Jun 1, 2020 Effective Jan 1, 2020 Maritimes & Annual EBITDA Increase ~C$
Slide 16: Secured Growth Projects Update
Gas Transmission Secured Growth Projects Update Spruce Ridge In Execution 2020+ T-South Expansion Atlantic Bridge - Phase 2 US$0.1 2020 System Modernization US$0.8 2020 T-South Expansion $1.0 2021 Atlantic Bridge Spruce Ridge $0.5 2021 Phase 2 PennEast US$0.2 2021+ PennEast Other expansion projects:
Slide 17: Secured Utility Growth Update
Gas Distribution and Storage Secured Utility Growth Update Synergy capture ongoing • Supports ability to realize returns in excess of $1B+ ONTARIO St. Laurent Replacement | 2021 of annual the Allowed ROE capital spend1 Customer additions/ community expansions OTTAWA • Y-o-Y growth of 40K new custome
Slide 18: Offshore Wind Growth Update
Renewable Power Offshore Wind Growth Update • Local operational and development expertise Hohe See & Albatros | In Operation • 3 large projects in operations (1 GW1) • Sanctioned 2 additional offshore wind [Location] Albatros projects over the last 12 months Dunkirk | TBD ̶ Saint Nazaire and Fécamp
Slide 19: Strong First Half Financial Performance
Strong First Half Financial Performance ($ millions) Adjusted EBITDA Adjusted Earnings Distributable Cash Flow $5,068 $5,143 $6,977 $7,075 $2,989 $2,801 $2,310 $2,437 Q2 $3,208 $3,312 Q2 $1,349 $1,133 Q2 Q1 Q1 Q1 2019 2020 2019 2020 2019 2020 Q2: $0.67 / share $0.56 / share Q2: $1.14 / share $1.21 /
Slide 20: Q2 2020 Adjusted EBITDA
Q2 2020 Adjusted EBITDA ($ Millions) 2Q20 2Q19 2Q20 vs. 2Q19 Mainline throughput and other light volume deliveries (Seaway/Bakken) Liquids Pipelines 1,744 1,766 Higher IJT toll & L3R Canada Surcharge, stronger U.S. dollar Texas Eastern rate settlement, new assets, stronger US dollar Gas Transm
Slide 21: Q2 2020 DCF per share
Q2 2020 DCF per share ($ Millions, except per share amounts) 2Q20 2Q19 2Q20 vs. 2Q19 Adjusted EBITDA 3,312 3,208 New assets placed into service Cash distributions in excess of equity earnings 210 189 DCP distribution cut announced in Q1 Maintenance capital (135) (269) Timing of spend; full yea
Slide 22: Strong Financial Position
Strong Financial Position 2020 Funding Plan Complete ($B) Industry Leading Credit Ratings2 ~$1.8 - 2.3B ~$1.4B 2021 Prefunding Hybrid Securities Standard & Poors BBB+ Reaffirmed rating on: stable Dec 2019 ~$4B ~$5.5B BBB+ Debt Maturities Debt funding Fitch April 2020 stable $4.0 - 4.51 ~$0.4B Asset
Slide 23: Re-affirming 2020 Financial Outlook
Re-affirming 2020 Financial Outlook 2020 Distributable Cashflow Per Share1 $4.50 – 4.80 Tailwinds/Headwinds to Full Year Guidance • Strong 1H performance $4.42 $4.57 • Stronger USD $4.42 • Cost reductions • Low interest rates $3.68 • Mainline volumes • Lower DCP distribution (announced in Q1) • Texa
Slide 24: 2020 Mid-year Check Point
2020 Mid-year Check Point Priorities YTD Progress 1. Safety & operational reliability • Strong operations; health and safety response to COVID-19 • Comprehensive Gas Transmission integrity program in execution 2. Financial position • Completed 2020 funding plan; initial pre-funding of 2021 needs • $
Slide 25: Executive Leadership Changes
Executive Leadership Changes John Whelen Matthew Akman Allen Capps Retiring - EVP & SVP, Strategy and Power SVP, Corporate Development Chief Development Officer and Energy Services 25
Slide 26: Q&A
Q&A ZENBRIDGE