Slide 1: Q1 2018: Financial Results & Business Update
Q1 2018: Financial Results & Business Update May 10, 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 • First Quarter Highlights • Business Update • Financial Results Review Line 3 Replacement 3
Slide 4: Realizing Benefits From Spectra Energy Transaction
Realizing Benefits From Spectra Energy Transaction Strategic Benefits Leading North American Infrastructure Footprint • Broadened asset mix and footprint • Enhanced low risk value proposition Financial Benefits • Earnings and cash flow accretion • Cost synergies • All stock deal accelerated balance
Slide 5: Q1 Highlights
Q1 Highlights Solid operating performance across the businesses Strong Q1 financial results $3.2 billion of asset sales announced $3.1 billion of hybrid security issuances Advancing $7 billion of projects for 2018 in-service Progressing Line 3 Replacement regulatory process Assessing new project opp
Slide 6: Q1 2018 Consolidated Financial Results Summary
Q1 2018 Consolidated Financial Results Summary For the 3 months ended Mar 31, $ millions Adjusted EBITDA DCF Adjusted Earnings $3,406 $2,312 $1,375 $2,187 $1,215 $675 2017 2018 2017 2018 2017 2018 Q1: $1.03/share $1.37/share Q1: $0.57/share $0.82/share Strong first quarter results; Full year guidanc
Slide 7: Asset Sales Announced
Asset Sales Announced Midcoast G&P Business • Sale of 100% interest in Midcoast Operating L.P. Anadarko System to ArcLight Capital Partners Texas Anadarko OK AR Express Basin – Natural gas G&P assets N. Texas System – Ownership interest in Texas Express NGL pipeline E. Texas – Logistics business Sys
Slide 8: Asset Sales Announced
Asset Sales Announced Renewables Power Assets • Sale of 49% interest to Canada Pension Plan: – All Canadian and select US wind and solar power assets – Hohe See offshore wind project in Germany • Proceeds of C$1.75B • CPP provides ~C$0.5B of additional funding contributions to Hohe See in 2018/19 •
Slide 9: Further Asset Sales Potential
Further Asset Sales Potential $10B Non-Core Assets Considerations: • $3 billion achieves 2018 target, consistent with strategic priority $3B • Flexible process allows for execution of accelerated SOLD Further asset sales in 2018 Asset Sales Potential • Will determine the magnitude based on valuation
Slide 10: Ahead of Schedule on Hybrid Financing
Ahead of Schedule on Hybrid Financing Hybrid Instrument Issuances • Target $4 billion in 2018 Retail • Well ahead of schedule Global Institutional Canadian Institutional • Strong investor demand $900 Remaining US Institutional • Many sources to fulfill remainder $3,100 Achieved Target Options Strong
Slide 11: Line 3 Replacement Project Update
Line 3 Replacement Project Update • ALJ Report confirms need but recommends alternate route • Minnesota Public Utility Commission to vote late June Summary of Potentially Exposed Resources of Concern from Release of Crude Oil (Acres) Resources of Concern (acres)* Enbridge’s Route Alternative Preferr
Slide 12: Enterprise-wide Secured Growth Project Inventory
Enterprise-wide Secured Growth Project Inventory Capital Capital Project Expected ISD ($B) Project Expected ISD ($B) High Pine In service 0.4 CAD Stratton Ridge 1H19 0.2 USD Stampede Lateral In service 0.2 USD PennEast 2H19 0.3 USD Wyndwood In service 0.2 CAD Hohe See Wind & Expansion – Germany 2H19
Slide 13: Project Execution Highlights
Project Execution Highlights Natural Gas: Natural Gas: Renewables: NEXUS Valley Crossing Rampion Texas Eastern TX Nueces Hub Rampion Valley NEXUS Crossing Gas Transmission Pipeline Offshore wind assets Mexico Under construction Brownsville In pre-construction In development • Construction 20% comple
Slide 14: Business Development Update
Business Development Update Natural Gas: Liquids Pipelines: Natural Gas: Alliance Gray Oak South Texas and USGC PERMIAN TX PERMIAN Alliance Gulf Coast System TX Express Pomelo Connector EAGLE FORD Valley Mexico Mexico Crossing • Received strong prior expressions of • Project proceeding with PSXP/AND
Slide 15: Q1 2018 Consolidated Adjusted EBITDA Performance
Q1 2018 Consolidated Adjusted EBITDA Performance Adjusted EBITDA Liquids Pipelines 1Q17 1Q18 + Higher throughput and IJT on the Mainline System (C$ Millions, except per share amounts) + Higher average rate on Canadian Mainline FX hedges 1,325 1,627 + New projects placed into service Liquids Pipeline
Slide 16: Q1 2018 Consolidated DCF Performance
Q1 2018 Consolidated DCF Performance (C$ Millions, except per share amounts) 1Q17 1Q18 Consolidated Adjusted EBITDA1 2,187 3,406 1Q18 vs. 1Q17 DCF Analysis Maintenance capital (182) (165) DCF Interest expense (479) (652) + Adjusted EBITDA drivers noted in previous slide Current income tax (41) (75)
Slide 17: 2018 Updated Quarterly Profile & FY Projection
2018 Updated Quarterly Profile & FY Projection Re-allocation of FX Earnings Hedges Adjusted EBITDA Previous Quarterly Profile 2018e Guidance (% of Full Year Projection) Guidance Updated 2018 EBITDA Guidance ($MM) 2018e 2018e 30% Liquids Pipelines ~6,350 ~6,425 20% Gas Transmission & Midstream ~3,900
Slide 18: Spectra Energy Partners (SEP)
Spectra Energy Partners (SEP) Financial Results FY 2018 (US$ millions, except per unit amounts) Q1 2017 Q1 2018 Guidance 1Q18 vs. 1Q17 DCF Analysis Ongoing EBITDA 545 571 + Increased earnings from expansion projects placed into service Ongoing DCF 403 453 $1,630 - 1,670 Distribution Coverage + Highe
Slide 19: Enbridge Energy Partners (EEP)
Enbridge Energy Partners (EEP) Financial Results FY 2018 Q1 2017 Q1 2018 Guidance 1Q18 vs. 1Q17 DCF Analysis (US$ millions, except per unit amounts) Adjusted EBITDA 414 430 + Recognition of the ROE component of DCF 198 212 $650- $7002 revenue under-collection in 2017 Distribution Coverage (as declar
Slide 20: ENF & Fund Group
ENF & Fund Group Financial Results FY 2018 1Q18 vs. 1Q17 Fund Group (C$ millions) Q1 2017 Q1 2018 Guidance DCF Analysis Fund Group DCF 422 691 $2,450 - 2,650* + Higher residual toll and higher Distributions Paid 403 498 throughput on Canadian Mainline Fund Group Debt/EBITDA1 6.0x 4.8x < 5.0x by end
Slide 21: Funding Progress
Funding Progress 2018 Financing Plan Execution 2018 – 2020 Funding Plan*($C billions) C$ Billion1,4,5 Market Amount3 $45 ENB Follow-on Common Equity (Pre-funding) CAD/US Private $1.5 $40 ENF Follow-on Common Equity (Pre-funding) CAD Public 0.6 Optional asset sales / Common Equity $2.1 $35 Optional h
Slide 22: Executing on Our Strategic Priorities in Q1
Executing on Our Strategic Priorities in Q1 2018 – 2020 Strategic Priorities 1. Move to pure regulated pipelines / utility model $3.2 billion of asset sales announced 2. Accelerate de-leveraging $3.1 billion of hybrid security issuances 3. Deliver premium cash flow & dividend growth Advancing $7B of
Slide 23: Q&A
Q&A ENBRIDGE
Slide 24: Enbridge Income Fund Holdings Inc.
Enbridge Income Fund Holdings Inc. First Quarter 2018 Supplemental Slides Investor Relations Nafeesa Kassam 403-266-8325 | nafeesa.kassam@enbridge.com
Slide 25: Fund Group Distributable Cash Flow
Fund Group Distributable Cash Flow (C$ Millions) 1Q17 1Q18 Liquids Pipelines 493 751 Gas Pipelines 57 63 Green Power 66 81 Eliminations and Other 7 12 Adjusted EBITDA 623 907 Cash distributions less than equity earnings (11) (5) Maintenance capital expenditures (19) (18) Interest expense (94) (110)
Slide 26: Fund Group: Key Balance Sheet Metrics
Fund Group: Key Balance Sheet Metrics 3/31/18 Consolidated Fund Group Leverage 42.1% Consolidated Fund Group Debt/EBITDA 4.8x 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 t
Slide 27: Investor Value Proposition
Investor Value Proposition Providing investors with predictable and growing cash flow Premier Canadian energy infrastructure income investment 1. 2. 3. 4. Outstanding Low risk Visible growth Strong sponsor asset footprint business model • High quality, strategically • Minimal commodity price • 10% a
Slide 28: Spectra Energy Partners
Spectra Energy Partners First Quarter 2018 Supplemental Slides Investor Relations Roni Cappadonna 713-627-4778 | Roni.Cappadonna@enbridge.com
Slide 29: Spectra Energy Partners (SEP): Distributable Cash Flow
Spectra Energy Partners (SEP): Distributable Cash Flow (US$ Millions) 1Q17 1Q18 US Transmission 499 504 Liquids 68 68 Other (22) (1) Ongoing EBITDA 545 571 ADD: Earnings from equity investments (38) (58) Distributions from equity investments 38 60 Other 1 1 LESS: Interest expense 56 85 Equity AFUDC
Slide 30: Spectra Energy Partners: Key Balance Sheet Metrics
Spectra Energy Partners: Key Balance Sheet Metrics 3/31/18 Total Debt $8.6B Financial Covenant Metrics(1) 4.1x Debt/EBITDA Credit Ratings(2) Baa2 / BBB+ / BBB Available Liquidity $1.0B (1) Calculated in accordance with the credit agreements; max 5.0x (2) Moody’s / S&P / Fitch senior unsecured rating
Slide 31: Investor Value Proposition
Investor Value Proposition Stable. Disciplined. Reliable. We go “where the lights are” – connecting diverse supply basins with regional demand markets – “last mile” competitive advantage Attractive Stable Outstanding Prudent financial distribution business model asset footprint management growth • P
Slide 32: Enbridge Energy Partners
Enbridge Energy Partners First Quarter 2018 Supplemental Slides Investor Relations Roni Cappadonna 713-627-4778 | Roni.Cappadonna@enbridge.com
Slide 33: Enbridge Energy Partners (EEP): Distributable Cash Flow
Enbridge Energy Partners (EEP): Distributable Cash Flow (US$ Millions) 1Q17 1Q18 Liquids 396 432 Other 18 (2) Adjusted EBITDA 414 430 ADD: Distributions in excess of equity earnings 1 7 Other 1 1 LESS: Interest expense, net 100 96 Equity AFUDC 10 16 Income tax benefit 2 - Net income attributable to
Slide 34: Enbridge Energy Partners (EEP): Key Balance Sheet Metrics
Enbridge Energy Partners (EEP): Key Balance Sheet Metrics 03/31/18 Total Debt $6.7B Financial Covenant Metrics(1) 4.3x Debt/EBITDA Credit Ratings(2) Baa3 / BBB / BBB Available Liquidity $1.4B (1) As reported, after internal adjustments for trailing 12 months (2) Moody’s / S&P / Fitch senior unsecure
Slide 35: Investor Value Proposition
Investor Value Proposition Attractive long-term risk-return proposition Low risk, pure-play liquids pipeline MLP provides attractive risk-adjusted returns for unitholders Pure-play liquids Low risk Prudent financial Moderate pipeline MLP business model management visible growth • Exceptional North •