Slide 1: 2016 First Quarter Financial & Strategic Update
2016 First Quarter Financial & Strategic Update Q1 Earnings Call 12 May 2016 Al Monaco, President & CEO John Whelen, Executive Vice President & CFO
Slide 2: Legal Notice
Legal Notice This presentation includes certain forward looking information (FLI) to provide Enbridge shareholders and potential investors with information about Enbridge and its subsidiaries and affiliates, including management’s assessment of Enbridge and its subsidiaries’ future plans and operati
Slide 3: Agenda
Agenda • Northern Alberta update • First quarter highlights • Business update • Financial review • Outlook SLIDE 3
Slide 4: Northern Alberta Update
Northern Alberta Update Current priorities 1. Safety of the public and our people 2. Protect our assets and the environment 3. Disciplined plan to restart operations Photo: Cheecham Terminal SLIDE 4
Slide 5: Northern Alberta Update: Status of operations
Northern Alberta Update Status of operations • Cheecham Terminal returned to service May 11 • Waupisoo restarted • Initiating service on Woodland shortly • Expect to initiate service on Athabasca over the weekend Athabasca Pipeline Athabasca Pipeline Twin & Expansion Waupisoo Pipeline Wood Buffalo E
Slide 6: Highlights
Highlights • Strong Q1 operating and financial results • Major Projects execution progressing well • Continuing to develop opportunities to extend growth beyond 2019 • Addressed equity funding needs through 2017 SLIDE 6
Slide 7: Financial Highlights
Financial Highlights Adjusted EBIT* ACFFO* Adjusted Earnings* $ Millions $ Millions, except per share $ Millions, except per share amounts amounts $1,374 $1,114 $1,031 $802 $663 $468 2015 2016 2015 2016 2015 2016 Q1 $1,031 $1,374 $0.95 $1.27 $0.56 $0.76 FY Guidance $4,400-$4,800 $3.80-$4.50 *Availab
Slide 8: Low Risk Business Model
Low Risk Business Model Provides strong and predictable results in all environments 95% of cash flow 95% of credit exposure 80% of Mainline <5% of earnings subject to underpinned by strong, from investment grade revenue is generated by market price risks including long term commercial customers or s
Slide 9: Liquids Pipelines Strategic and Competitive Position
Liquids Pipelines Strategic and Competitive Position Production growth with limited ❶ alternative takeaway capacity ❷Predictable, stable tolls IJT Benchmark Toll* $4 $2 $0 2011 2012 2013 2014 2015 * USD per barrel for heavy crude from Hardisty to Chicago; Strong demand from refineries excludes surch
Slide 10: Executing Commercially Secured Growth Program
Executing Commercially Secured Growth Program Secured Capital Program GTA Expansion Projects coming into service • In service March 2016 2015-2019 • Largest EGD project to date ($0.9B) $26B • Serves growing customer base $17B • Increases capacity and basin optionality In Execution Q2 2016 - 2019 Lin
Slide 11: Strategic Context for Offshore Wind
Strategic Context for Offshore Wind • Strategic priority to extend & Consistent with ENB value proposition diversify growth Liquids Renewable & Gas Power ‒ Natural Gas Strong market fundamentals ‒ Power Generation Strong commercial underpinnings • Natural extension of onshore Minimal commodi
Slide 12: Offshore Wind Fundamentals
Offshore Wind Fundamentals Forecast Generation Growth – 20251,2 European Offshore Wind Farms GWs 500 250 0 North America Europe Gas Other Renewables Attributes: • Proven technology • Strong commercial underpinnings Project Rampion • Long term PPAs • Established power markets • Stable environment & c
Slide 13: Investment in Offshore Wind Developer
Investment in Offshore Wind Developer Éolien Maritime France (“EMF”) • Investment Summary: ‒ 50% co-development ‒ 3 advanced stage projects (1,400 MWs) ‒ 20 year fixed price PPA (offtake: EDF) ‒ Advanced permitting, capital estimate • Value Proposition: ‒ Large investment opportunity ($4.5B) ‒ Indiv
Slide 14: Q1 2016 Segmented Adjusted EBIT Variance
Q1 2016 Segmented Adjusted EBIT Variance Strong performance driven by Liquids Pipelines and Gas Distribution ADJUSTED EBIT ($ MILLIONS) Q1 2015 Q1 2016 Variance Liquids Pipelines 731 1,084 +353 Gas Distribution 198 240 +42 Gas Pipelines and Processing 90 87 (3) Green Power and Transmission 57 48 (9)
Slide 15: Q1 2016 ACFFO Variance
Q1 2016 ACFFO Variance Favourable operating performance partially offset by higher financing costs ($ MILLIONS) Q1 2015 Q1 2016 Variance Consolidated Adjusted EBIT 1,031 1,374 +343 Depreciation and amortization 474 559 +85 Maintenance capital (152) (151) +1 Interest expense (293) (394) (101) Current
Slide 16: 2016 Adjusted EBIT & ACFFO Guidance
2016 Adjusted EBIT & ACFFO Guidance Adjusted EBIT ACFFO/share • Adjusted EBIT on track $4.50 $4.8B • ACFFO per Share impacted by: $4.4B $3.80 $3.72 ‒ $2.3B ENB equity issuance $3.02 2016e 2014 2015 2016e SLIDE 16
Slide 17: ENF & Fund Group Q1 Results
ENF & Fund Group Q1 Results Strong operational performance provides support for January 2016 10% DPS increase ($ MILLIONS, Except per share amounts) Q1 2015 Q1 2016 Variance EIPLP ACFFO 128 569 +441 Fund and ECT operating, administrative and interest expense (32) (54) (22) Fund Group ACFFO 96 515 +4
Slide 18: ENF & Fund Group 2016 Guidance
ENF & Fund Group 2016 Guidance ENF Dividends Per Share Fund Group ACFFO $2.50 $2.05B $2.00 $1.87 $1.75B $1.50 $1.00 $0.50 $0.00 2014 2015 2016 … 2019e 2016e SLIDE 18
Slide 19: Financial Strength and Flexibility
Financial Strength and Flexibility Over $4 Billion in new capital raise thus far in 2016; Bolsters balance sheet and further strengthens liquidity position Financing Activity Available Liquidity3 2016 Year to Date $ Billions $ billions (1 USD = 1 CAD) Primary Market 12 Equity Funding1 ENB Common Sha
Slide 20: Funding Progress
Funding Progress Equity raised in 2016 more than sufficient to fund commercially secured growth through 2017; remaining requirement very manageable Secured Capital Funding Requirement (2015 – 2019) Remaining Funding Requirements Nominal dollars (billions) 2016 – 2019 ($ billions) 40 Equity requireme
Slide 21: Five Year Secured Growth Outlook
Five Year Secured Growth Outlook $26B secured growth drives robust and highly transparent growth ACFFO* DPS Dividend Coverage 12-14%+ CAGR 10-12%+ CAGR ~2.0x ACFFO (Secured Program) (Secured Program) $2.12 $3.02 2014 2019 2016 2019 Average Additional upside from unsecured projects under development
Slide 22: Key Takeaways
Key Takeaways •Strong first quarter, in line with expectations •Solid business model supports predictable growth •Good progress on executing secured capital program •Strong financial position and flexibility •Secured growth outlook intact •Progress on extending and diversifying growth SLIDE 22
Slide 23: Q&A
Q&A
Slide 24: Supplemental information
ENBRIDGE Supplemental information
Slide 25: Strong Counterparty Credit Profile
Strong Counterparty Credit Profile Major liquids pipeline systems underpinned by strong, investment grade customers MAINLINE TOP 10 SHIPPERS REGIONAL OIL SANDS TOP 10 SHIPPERS Shipper 1: Integrated AA+/Aaa Shipper 1: Integrated A-/Baa1 Shipper 2: Integrated A-/A3 Shipper 2: Integrated AA+/NR Shipper