Enbridge Inc. · TSX:ENB
Enbridge — Q2 2013 Earnings Presentation
25 slides from Enbridge's earnings presentation, Aug 1, 2013
Slide 1: 2013 Second Quarter Financial & Strategic Update
2013 Second Quarter Financial & Strategic Update August 1, 2013 Al Monaco President & CEO J. Richard Bird Executive Vice President, CFO and Corporate Development
Slide 2: Q2 2013 – Financial & Strategic Update
Q2 2013 – Financial & Strategic Update • Presenters: Al Monaco President & CEO J. Richard Bird Executive Vice President, CFO and Corporate Development • 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 • Earnings Outlook • Business Development and Major Projects Update • Q2 Financial Update • Progress on Key Priorities & Long Term Outlook 4
Slide 5: Q2 2013 – Financial Results: Adjusted Earnings
Q2 2013 – Financial Results Adjusted Earnings ($ Millions) 306 Q2 274 Q2 $794 $647 488 Q1 373 Q1 2012 2013 Year-To-Date 18% EPS $0.85 $1.00 * 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: Recent Developments: Alberta Regional Infrastructure
Recent Developments Alberta Regional Infrastructure Woodland Pipeline Extension Surmont Phase 2 Expansion Fort McMurray Alberta Woodland Pipeline Cheecham Athabasca Twin Woodland Pipeline Extension Waupisoo Pipeline Athabasca Pipeline Edmonton Hardisty • 36” Pipeline (385 km) • 2 – 450 kbbl tanks &
Slide 7: Recent Developments: Enbridge Gas Distribution
Recent Developments Enbridge Gas Distribution Achieved ROE 2008-2012 GTA Project - $700 MM Buttonville Station GTA Project Keele/CNR Station Albion Rd Station GTA Project Jonesville Station Parkway West Station 7
Slide 8: Recent Developments: Renewable Power Generation
Recent Developments Renewable Power Generation St. Robert Bellarmin Blackspring Ridge Wind Project Wind Project • 82 MW facility • 300 MW facility • ENB capital = $0.1 billion • ENB capital = $0.3 billion • Operational as at October 2012 • In-service in Q2 2014 8
Slide 9: Recent Developments – EEP Strategy
Recent Developments – EEP Strategy 1. $1.2 Billion Preferred Share Investment in EEP 2. ENB – EEP Accounts Receivable Purchase Agreement 3. EEP Exercised Option to Reduce Joint-Funding Agreement Investments 4. Initial Public Offering of Midcoast Energy Partners, L.P. (MEP) 9
Slide 10: Capital Program Execution Update
Capital Program Execution Update Projects In-service Projects In-service 2012 – 1H 2013 2H 2013-2014 $3 B $12 B 10 of 10 projects delivered 16 of 20 projects on or ahead of schedule on or ahead of schedule 10% Under Budget < 1% Over Budget Major Projects Advantage: • Experienced Project Management T
Slide 11: Capital Program Execution Update: Mainline Expansions & Western USGC
Capital Program Execution Update Mainline Expansions & Western USGC Mainline Expansions Western USGC Access Enbridge Mainline Edmonton System Hardisty Kerrobert Flanagan, Illinois Forest Regina Spearhead Pipeline Quincy Cromer Key Gretna Alberta Clipper Expansion Gunn (Line 67) Humboldt Superior Fla
Slide 12: Line 37 Update
Line 37 Update Alberta Woodland Pipeline Fort McMurray Wood Buffalo Pipeline Line 37 Cheecham Terminal Waupisoo Pipeline Athabasca Pipeline Edmonton Hardisty • All impacted lines have been returned to service 12
Slide 13: Segmented Earnings Variance
Segmented Earnings* Variance SEGMENT Q2 2013 vs. Q2 2012 ($ Millions) Liquids Pipelines +18 Gas Distribution -4 Gas Pipelines, Processing and Energy Services +26 Sponsored Investments +11 Corporate - 19 TOTAL +32 * Adjusted earnings are non-GAAP measures. For more information on non-GAAP measures pl
Slide 14: Full Year 2013 EPS Guidance Outlook
Full Year 2013 EPS Guidance Outlook Headwinds • Seaway • Equity Prefunding • LP Mainline $1.90 $1.74 Tailwinds • Energy Services • Noverco • Gas Distribution Guidance Range * Adjusted earnings are non-GAAP measures. For more information on non-GAAP measures please refer to disclosure in news release
Slide 15: Enterprise Wide Funding and Liquidity Actions
Enterprise Wide Funding and Liquidity Actions FUNDING SOURCES 2013 Year-To-Date ($ Billions) ENB Common Equity Offering $0.6 Noverco’s Secondary Offering $0.2 ENB Preferred Shares $1.0 EEP I-Shares Offering $0.3 ENF Common Share Offering $0.1 Medium Term Notes $0.7 Credit Facility Additions $2.5 TOT
Slide 16: Available Liquidity
Available Liquidity Consolidated Credit Facilities & Cash* 16.2 Cash Cash $12.9 Billion $ Billion Unutilized $9.5 Billion Capacity Available Unutilized Available Liquidity Capacity Liquidity Facility Usage Facility Usage 0 Enbridge Day July 2013 * Includes Enbridge Inc., Enbridge Energy Partners LP,
Slide 17: 2012 to 2016 Funding Requirements
2012 to 2016 Funding Requirements Excluding Sponsored Investments ($ billions, as at July 2013) 2012 – 2016 Capital Program 35.0 Cash Flow Net of Dividends (10.8) Net Funding Required 24.2 Debt Equity Total Requirement 16.9 Total Requirement 7.3 2012 – 2016 Maturities 3.3 2012 – 2013 Common Share Is
Slide 18: Tilted Return Profile Contracts
Tilted Return Profile Contracts Project Level Return On Equity 20% 15% Low Double Digits Full Life DCF ROE 10% 5% 0% Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7+ 18
Slide 19: Secured Capital by Return Profile
Secured Capital by Return Profile Flat Profile Tilted Profile ($ Billions) ($ Billions) Liquids Pipelines $2.0 $2.4 – Alberta Regional Infrastructure Liquids Pipelines $7.7 $10.9 – Market Access Initiatives Gas Pipelines $2.0 $1.1 Gas Distribution $0.7 − Green Power − $1.5 TOTAL $12.4 $15.9 19
Slide 20: Interest Rate Sensitivity & Exposure
Interest Rate Sensitivity & Exposure • Interest Rate Protection in Cost of Service Business – Pass through of actual debt costs – ROE formula escalates with long bond rates • Inflation Protection Imbedded in Toll Escalators – Natural hedge when rates rise due to an inflationary environment • Signifi
Slide 21: Progress On Key Priorities
Progress On Key Priorities 1. Safety & Operational Reliability • Integrity Program • Process & Procedures • Safety Culture 2. Execution • Major Projects Management • Financial Strength • Human Resources 3. Extend Growth Beyond 2016 • Build on Core Businesses • Advance New Platforms 21
Slide 22: Enterprise Wide Capital (2012-2016) $37 B
Enterprise Wide Capital* (2012-2016) *Includes ENB, EEP, and ENF $37 B Project Cost by In-Service Date $9 (2012 -2016) Unsecured Billion 2012 $3 2013 YTD ROY $5 $28 2014 $9 Commercially Secured Billion 2015 $8 2016 $3 $, Billions 1 Unsecured growth capital is included in the funding plan 22
Slide 23: Long Term EPS Growth Outlook
Long Term EPS Growth Outlook Adjusted EPS* Growth $3.00 • Tilted Return Projects • 2016 Risked Unsecured • New Growth Platforms • Sponsored Vehicle Drop Downs $0.00 2011 2016 * Adjusted earnings are non-GAAP measures. For more information on non-GAAP measures please refer to disclosure in news relea
Slide 24: Summary
Summary • Q2 financial results in line with expectations; maintaining full year EPS guidance of $1.74 – $1.90/share • Executing business strategies across the enterprise, with total commercially secured growth capital of $28B • Project execution advancing very well 24
Slide 25: 2013 Second Quarter Financial & Strategic Update Q&A
2013 Second Quarter Financial & Strategic Update August 1, 2013 Q&A