Enbridge Inc. · TSX:ENB
Enbridge — Q2 2014 Earnings Presentation
20 slides from Enbridge's earnings presentation, Aug 1, 2014
Slide 1: 2014 Second Quarter Financial & Strategic Update
2014 Second Quarter Financial & Strategic Update August 1, 2014 Al Monaco President & CEO J. Richard Bird Executive Vice President, CFO and Corporate Development John Whelen Senior Vice President, Finance
Slide 2: Q2 2014 – Financial & Strategic Update
Q2 2014 – Financial & Strategic Update • Presenters: Al Monaco President & CEO John Whelen Senior Vice President, Finance • Question & Answer Period 2
Slide 3: Legal Notice
Legal Notice This presentation includes certain forward looking information (FLI) to provide Enbridge shareholders and potential investors with information about Enbridge and management’s assessment of its future plans and operations, which may not be appropriate for other purposes. FLI is typically
Slide 4: Agenda
Agenda • Recap of Financial Results • Recent Developments • Financial Review • Project Execution Update 4
Slide 5: Q2 2014 – Financial Results ($MM)
Q2 2014 – Financial Results ($MM) $794 $820 $306 $328 Q2 Q2 $488 Q1 $492 Q1 2013 2014 Year-To-Date EPS: $1.00 $1.00 $1.84 $2.04 2014 EPS Guidance: * Adjusted earnings and adjusted EPS are non-GAAP measures. For more information on non-GAAP measures please refer to disclosure in news release. 5
Slide 6: EGD Custom Incentive Rate Approval
EGD Custom Incentive Rate Approval • 5-Year term (2014-2019) • ROE set annually – 9.36% in 2014 • Capital spending program approved – average 570 million/yr. • 50/50 sharing up to 300 bps above allowed ROE • Consistent with EPS growth expectations 6
Slide 7: Line Replacement Update
Line 3 Replacement Update • Capital cost estimate finalized – Cdn $4.9 billion – US $2.6 billion • Surcharge: U.S. $0.895/bbl • Low double-digit equity return • Expected in-service: – 2nd half of 2017 7
Slide 8: U.S. Sponsored Vehicles
U.S. Sponsored Vehicles • Re-establish EEP as a strong • First post-IPO drop down sponsored vehicle – 12.6% interest in EEP’s G&P – Preferred Share Purchase business (U.S.$350 Million) – Joint Funding • 4% distribution increase – Receivables Purchase effective August 14, 2014 – Established Midcoast
Slide 9: Northern Gateway Project
Northern Gateway Project • Regulatory phase compete • Focus over next 12+ months: - Satisfy 209 JRP conditions and work with B.C. on 5 conditions for oil pipelines - Continue to engage with communities and First Nations - Finalize cost estimate and commercial agreements
Slide 10: Segmented Earnings Variance
Segmented Earnings* Variance $ Millions Q2 2014 vs. SEGMENT Q2 2013 Liquids Pipelines +61 Gas Distribution -10 Gas Pipelines, Processing and Energy Services -46 Sponsored Investments +25 Corporate -8 TOTAL +22 * Adjusted earnings are non-GAAP measures. For more information on non-GAAP measures pleas
Slide 11: Record Mainline Throughput
Record Mainline Throughput • Record ex-Gretna volumes Quarterly Ex-Gretna Throughput MMbpd delivered 2.5 - 2.1 million bpd in June • Strong Fundamentals 2.0 - Increasing production - Strong PADD II demand 1.5 (BP Whiting) • Capacity Optimization 1.0 - Removal of pressure restrictions - Scheduling &
Slide 12: Full Year 2014 EPS Guidance Outlook
Full Year 2014 EPS Guidance Outlook Headwinds • Energy Services • Equity Prefunding $2.04 $1.84 Tailwinds • Liquids Pipelines Guidance Range * Adjusted earnings are non-GAAP measures. For more information on non-GAAP measures please refer to disclosure in news release. 12
Slide 13: Enterprise Wide Funding and Liquidity Actions
Enterprise Wide Funding and Liquidity Actions FUNDING SOURCES* 2014 ($ Billions) ENB Preferred Shares $1.1 ENB DRIP $0.2 Medium Term Notes $3.3 Bank Credit Facility Additions $0.4 ENB Common Equity Issuance $0.5 EEQ PIK $0.1 TOTAL $5.6 Billion * In Nominal CAD and US Currencies 13
Slide 14: 2013 – 2017 Funding Requirements Excluding Sponsored Investments
2013 – 2017 Funding Requirements Excluding Sponsored Investments ($ billions, as at July 2014) Maintenance Capital 5.6 Secured Growth Capital 28.0 Risked Growth Capital 3.2 36.8 Cash Flow Net of Dividends (14.6) Net Funding Requirement 22.2 Debt Equity Total Requirement 15.1 Total Requirement 7.1 Ca
Slide 15: Cost of Equity Optimization & Flexibility
Cost of Equity Optimization & Flexibility 2013 – 2017 Remaining Requirement $2.0 Billion: $ Billions Preferred Shares $1.3 Asset Monetization/Sponsored Vehicle Drop Downs $3.0 TOTAL $4.3 ENB Public Equity ~ 15
Slide 16: Enterprise Wide Growth Capital In-service 2014
Enterprise Wide Growth Capital In-service 2014 $9.9 Billion In-Service in 2014 Fort McMurray Edmonton Hardisty Kerrobert Regina Estimated Cost Cromer +270 Projects Gretna kbpd ($ Billion) Montreal Liquids Pipelines (Alberta Regional Infrastructure): Norealis Pipeline $0.5 Westover Superior Surmont P
Slide 17: Western U.S. Gulf Coast Access
Western U.S. Gulf Coast Access 1 Associated Mainline Expansions ($1.3B) 1 2 Flanagan South Pipeline ($2.8B) 3 Seaway Pipeline Acquisition + Reversal ($1.3B) 4 Seaway Pipeline Twin + Lateral ($1.2B) Chicago/ Flanagan 2 Cushing Project Status Update 3 • Flanagan South - Construction in progress 4 • Se
Slide 18: Industry Leading EPS & DPS Outlook
Industry Leading EPS & DPS Outlook $42 Billion Enterprise Wide Capital Program An Industry Leading EPS* An Industry Leading DPS Growth Outlook (but lumpy) Growth Outlook (smoother) • EPS Growth • Tilted Return Projects • Surplus Cash Flow - $7.5B Line 3 Replacement • New Growth Platforms • Sponsored
Slide 19: Summary
Summary • Strong first half results • On track to be within full year EPS guidance range of $1.84 - $2.04 • Project execution going well • On pace for 10-12% EPS growth through 2017 19
Slide 20: 2014 Second Quarter Financial & Strategic Update Q&A
2014 Second Quarter Financial & Strategic Update August 1, 2014 Q&A