Slide 1: Q3 2018: Financial Results & Business Update
Q3 2018: Financial Results & Business Update November 2, 2018 Al Monaco, Chief Executive Officer | John Whelen, 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, shareholders and unitholders of Enbridge Inc. (Enbridge or the Company), Enbridge Income Fund Holdings Inc. (ENF), Enbridge Energy Partners, L.
Slide 3: Agenda
Agenda • Progress on strategic priorities and Q3 • Business update • Financial results review Line 3 Replacement 3 3
Slide 4: Progress on Strategic Priorities in 2018
Progress on Strategic Priorities in 2018 First Half Q3 • Strong operating and financial results • Strong Q3 results • $7.5B non-core asset sales announced • $5.7B asset sales proceeds received • Issued $3B hybrids • 4.7x Debt/EBITDA vs 5.0x target (2018) • SV simplification, buy-in offers • Suspende
Slide 5: Q3 2018 Consolidated Financial Results Summary
Q3 2018 Consolidated Financial Results Summary For the 3 and 9 months ended Sep 30, $ millions Adjusted EBITDA DCF Adjusted Earnings $1,585 Q3 $933 Q3 $2,958 Q3 $2,586 $1,334 $1,858 Q2 $1,094 Q2 $3,165 Q2 $632 $2,581 $1,324 $662 $3,406 Q1 $2,312 Q1 $1,375 Q1 $2,187 $1,215 $675 2017 2018 2017 2018 20
Slide 6: Enterprise-wide Secured Growth Project Inventory
Enterprise-wide Secured Growth Project Inventory Capital Capital Project Expected ISD ($B) Project Expected ISD ($B) High Pine In service 0.4 CAD Stratton Ridge 1H19 0.2 USD Stampede Lateral In service 0.2 USD PennEast 2H19 0.3 USD Wyndwood In service 0.2 CAD Hohe See Wind & Expansion – Germany 2H19
Slide 7: New Projects in Service
New Projects in Service Natural Gas: Natural Gas: NEXUS/TEAL - US$1.5B Valley Crossing - US$1.6B ON TORONTO PERMIAN TX Parkway Gulf Coast NY Express MI Dawn Hub Texas Eastern PA Pomelo Vector Connector Texas Eastern Mexico Valley Crossing NEXUS TEAL OH • Providing Marcellus and Utica natural gas to
Slide 8: Line Replacement Project Update
Line 3 Replacement Project Update Critical $9B infrastructure replacement project Edmonton • Canadian construction program well underway – > 850 km of pipeline now laid (over 80%) Hardisty • Wisconsin segment complete and in-service Kerrobert – ~13 mile segment Regina • Minnesota PUC approved issuin
Slide 9: WCSB Crude Oil Market Fundamentals
Liquids Pipelines Business Update WCSB Crude Oil Market Fundamentals Western Canada Oil WCSB Oil Price Enbridge’s Potential Supply Forecasts (KBPD) Differentials ($US/bbl) Pipeline Solutions 6,000 $0 Restoring Capacity 2H2019 Capacity (KBPD) 5,000 Line 3 Replacement +375 CAPP 2018 Supply Forecast -$
Slide 10: Proceeding with Amalgamation
Utilities Business Update Proceeding with Amalgamation OEB Approved Incentive Framework One of the Largest Utility Franchises in North America • Provides regulatory certainty • Allows control and flexibility over operations ON QC Union • Enables significant efficiencies Gas OTTAWA MN EGD Incentive R
Slide 11: FERC Update and Outlook
Gas Transmission Business Update FERC Update and Outlook US Gas Transmission FERC Filings • No material financial impact from FERC policy actions – Does not impact pipelines in corporate structures – Does not impact negotiated rate agreements – 501-G filings demonstrate ROE’s within appropriate rang
Slide 12: Executing on Plan to Simplify Structure
Sponsored Vehicles Executing on Plan to Simplify Structure Targeted Timeline Benefits for SV Shareholders Direct ownership in largest energy infrastructure Company in North America Enhanced dividend coverage Diverse opportunity set for growth beyond 2020 Stronger balance sheet and enhanced credit pr
Slide 13: Consolidated Adjusted EBITDA Performance
Q3 2018 Consolidated Adjusted EBITDA Performance Adjusted EBITDA Liquids Pipelines 3Q17 3Q18 + Higher throughput and IJT on the Mainline System (C$ Millions, except per share amounts) + Higher average rate on Canadian Mainline FX hedges 1,353 1,633 + New projects placed into service Liquids Pipeline
Slide 14: Consolidated DCF Performance
Q3 2018 Consolidated DCF Performance (C$ Millions, except per share amounts) 3Q17 3Q18 Consolidated Adjusted EBITDA1 2,586 2,958 3Q18 vs. 3Q17 DCF Maintenance capital (360) (324) + Adjusted EBITDA drivers noted in previous slide Interest expense (646) (705) + Higher maintenance capital on specific C
Slide 15: Financial Guidance Reiteration
Financial Guidance Reiteration 1 2018 EBITDA & DCF/share Guidance 2 10% Dividend CAGR through 2020 Consolidated EBITDA $3. 2018 DCF/share 68 Outlook ($MM) Outlook $4.15 - $4.45 ~$12,500 $3.68 Q3 Q3 YTD YTD 2017a 2018e 2017a 2018e 2017e 2018e 2019e 2020e Strong year to date performance expected to dr
Slide 16: Spectra Energy Partners (SEP) Financial Results
Spectra Energy Partners (SEP) Financial Results 3Q18 vs. 3Q17 DCF Analysis (US$ millions, except per unit amounts) Q3 2017 Q3 2018 + Increased earnings from expansion Ongoing EBITDA 554 561 projects placed into service - Higher operating and pipeline integrity Ongoing DCF 398 364 costs and maintenan
Slide 17: Enbridge Energy Partners (EEP) Financial Results
Enbridge Energy Partners (EEP) Financial Results 3Q18 vs. 3Q17 DCF Analysis (US$ millions, except per unit amounts) Q3 2017 Q3 2018 + Increased throughput on Bakken Pipeline Adjusted EBITDA 426 403 System - Reduced income tax allowance recovery DCF 194 184 pursuant to US Tax Reform & FERC policy upd
Slide 18: Enbridge Income Fund Holdings (ENF) & Fund Group
Enbridge Income Fund Holdings (ENF) & Fund Group Financial Results 3Q18 vs. 3Q17 Fund Group (C$ millions) Q3 2017 Q3 2018 DCF Analysis Fund Group DCF 488 716 + Higher residual toll and higher throughput on Canadian Mainline Distributions Declared 404 499 + Higher FX hedge rates + New projects placed
Slide 19: Funding Plan Execution
Funding Plan Execution 2018 – 2020 Further Funding Progress Secured Funding Plan1($C billions) • Strong YTD financial performance $35 • $5.7B cash proceeds from non-core assets Increased • Internally generated equity now sufficient to support secured capital program Optional hybrid securities $30 Fi
Slide 20: Executing on our 2018-2020 Strategic Priorities
Q3 Summary Executing on our 2018-2020 Strategic Priorities Priorities YTD Actions 1. Move to pure regulated pipelines/ utility model • $7.5B of non-core asset sales announced in 2018 • Original target $3B • $5.7 billion of asset sales proceeds received in Q3 2. Accelerate de-leveraging • Achieved 5.
Slide 21: Enbridge Day
Enbridge Day 2018 Annual Investment Community Conference Tuesday, December 11 | New York Meeting will also be available via webcast 21
Slide 22: Q&A
Q&A
Slide 23: Enbridge Income Fund Holdings Inc.
Enbridge Income Fund Holdings Inc. Third Quarter 2018 Supplemental Slides
Slide 24: Fund Group: Distributable Cash Flow
Fund Group: Distributable Cash Flow (C$ Millions) 3Q17 3Q18 Liquids Pipelines 548 805 Gas Pipelines 49 52 Green Power 48 52 Eliminations and Other 13 14 Adjusted EBITDA 658 923 Cash distributions in excess of equity earnings 6 15 Maintenance capital expenditures (13) (18) Interest expense (101) (108
Slide 25: Fund Group: Key Balance Sheet Metrics
Fund Group: Key Balance Sheet Metrics 9/30/18 Consolidated Fund Group Leverage 40.2% Consolidated Fund Group Debt/EBITDA 3.8x Enbridge Income Fund Credit Ratings BBB/ Baa3 / BBB (High)(2) Enbridge Pipelines Inc. Credit Ratings BBB+ / A(3) (1) As reported, after internal adjustments for trailing twel
Slide 26: Spectra Energy Partners
Spectra Energy Partners Third Quarter 2018 Supplemental Slides
Slide 27: Spectra Energy Partners (SEP): Distributable Cash Flow
Spectra Energy Partners (SEP): Distributable Cash Flow (US$ Millions) 3Q17 3Q18 US Transmission 505 504 Liquids 67 59 Other (18) (2) Ongoing EBITDA 554 561 ADD: Earnings from equity investments (55) (81) Distributions from equity investments 54 57 Other 9 9 LESS: Interest expense 75 85 Equity AFUDC
Slide 28: Spectra Energy Partners (SEP): Key Balance Sheet Metrics
Spectra Energy Partners (SEP): Key Balance Sheet Metrics 9/30/18 Total Debt $8.9B Financial Covenant Metrics(1) 4.1x Debt/EBITDA Credit Ratings(2) Baa2 / BBB+ / BBB Available Liquidity $1.1B (1) Calculated in accordance with the credit agreements; max 5.0x (2) Moody’s / S&P / Fitch senior unsecured
Slide 29: Enbridge Energy Partners
Enbridge Energy Partners Third Quarter 2018 Supplemental Slides
Slide 30: Enbridge Energy Partners (EEP): Distributable Cash Flow
Enbridge Energy Partners (EEP): Distributable Cash Flow (US$ Millions) 3Q17 3Q18 Liquids 428 402 Other (2) 1 Adjusted EBITDA 426 403 ADD: Distributions in excess of equity earnings, net of NCI 3 4 LESS: Interest expense, net 97 94 Equity AFUDC 12 16 Income tax expense 1 1 Net income attributable to
Slide 31: Enbridge Energy Partners (EEP): Key Balance Sheet Metrics
Enbridge Energy Partners (EEP): Key Balance Sheet Metrics 09/30/18 Total Debt $7.3B Financial Covenant Metrics(1) 4.5x Debt/EBITDA Credit Ratings(2) Baa3 / BBB / BBB Available Liquidity $0.9B (1) As reported, after internal adjustments for trailing 12 months (2) Moody’s / S&P / Fitch senior unsecure