Slide 1: 2015 Fourth Quarter Financial & Strategic Update
2015 Fourth Quarter Financial & Strategic Update Q4 Earnings Call 19 February 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 •2015 Highlights •Business Update •Financial Review •Priorities & Outlook SLIDE 3
Slide 4: Financial Highlights – Adjusted Earnings & ACFFO
Financial Highlights – Adjusted Earnings & ACFFO* Strong year-over-year results driven by resilient business model Adjusted Earnings ACFFO $3,154 $1,866 23% increase $1,574 494 16% $2,506 876 ACFFO/share increase EPS Q4 Q4 610 409 399 668 345 Q3 609 Q3 505 Q2 808 328 Q2 516 492 468 771 Q1 802 Q1 $/S
Slide 5: Strong Liquids Pipelines Performance and Outlook
Strong Liquids Pipelines Performance and Outlook 3.0 Quarterly Throughput Mainline at full capacity: 2.5 ex Gretna (mmbpd) * Record 2.6 mmbpd throughput in January 2.0 January 1.5 Throughput 1.0 0.5 0.0 2011 2012 2013 2014 2015 Oil Sands Growth ~800 kbpd oil sands supply growth through 20191 WCSB sh
Slide 6: Liquids Business Competitive Position & Market Reach
Liquids Business Competitive Position & Market Reach MARKET CAPACITY (KBPD) Mainline Connected 1,900 Refineries Mainline Connected Markets (Pipelines) Stable, competitive tolls PADD II 200 $6 IJT Benchmark Toll* Cushing/USGC 775 $4 Quebec/Ontario 300 $2 Patoka 300 Total Pipeline Access 1,575 $0 2011
Slide 7: Low Risk Business Model
Low Risk Business Model Insulated from market price, volume and credit risk Earnings At Risk* at Dec. 31 <5% of business subject to direct commodity price exposure 95% of cash flow underpinned by strong, long term Strong Commercial Constructs commercial constructs ** Counterparty Credit Profile*** 9
Slide 8: 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 AAA/Aaa Shipper 1: Integrated A-/Baa1 Shipper 2: Integrated A/Baa1 Shipper 2: Integrated AAA Shipper 3
Slide 9: Recent Execution Highlights
Recent Execution Highlights $2 billion in projects placed into service; 600 kbpd of new market access for customers Q4 PROJECTS IN SERVICE CAPITAL Line 9 Reversal and Expansion $0.7B • Reversal and expansion to 300 kbpd AOC Hangingstone $0.2B • 16 inch lateral connects to Cheecham Terminal • 16 kbpd
Slide 10: Sandpiper & Line 3 Update
Sandpiper & Line 3 Update Expected in-service dates early 2019; Near-term capital requirements are significantly lower MPUC Regulatory Timeline Clarified • Certificate of Need/Route Permit processes rejoined • EIS to precede evidentiary phase • Expected ISD early 2019 • Shift ~$2 billion and ~$3 bil
Slide 11: Extend and Diversify Growth
Extend and Diversify Growth Canadian Midstream Strategy: Tupper Main and Tupper West Natural Gas Plants Strategic Fit • Expands Canadian midstream footprint and scale • Strengthens position within the Montney • Strong commercial underpinning • Expansion opportunities Project Details Ownership: 100%
Slide 12: Extend and Diversify Growth
Extend and Diversify Growth Power Generation and Transmission Strategy: Rampion & New Creek Wind Generation Strategic Fit Rampion Offshore Wind New Creek Wind Project • Strong fundamentals • Long term contracts • Manageable risks • Strong risk-adjusted returns Project Details Project Details Capacit
Slide 13: Rampion Offshore Wind - Progress Update
Rampion Offshore Wind - Progress Update First foundation installed February 11, 2016 SLIDE 13
Slide 14: Secured Capital Program 2016-2019
Secured Capital Program 2016-2019 Secured growth capital continues to underpin industry leading growth through 2019 Secured Capital Program Secured Projects In Service 2016 - 2019 Projects coming into service 2015-2019 PROJECTS EST. COST ($B) $26B 2016 JACOS/ Nexen Hangingstone Heidelberg Lateral Pi
Slide 15: Q4 & Full-year Segmented Adjusted Earnings Variance
Q4 & Full-year Segmented Adjusted Earnings* Variance ADJUSTED EARNINGS ($ MILLIONS) Q4 FY 2014 Adjusted Earnings 409 1,574 Liquids Pipelines + 103 + 161 Gas Distribution (10) + 33 Gas Pipelines, Processing & Energy Services (28) (38) Sponsored Investments +9 + 105 Corporate + 19 + 43 Incremental NCI
Slide 16: Q4 & Full-year ACFFO Variance
Q4 & Full-year ACFFO* Variance ACFFO ($ MILLIONS) Q4 FY 2014 ACFFO 610 2,506 Operating Cash Flow (Before changes in working capital) + 102 + 480 Maintenance Capital + 112 + 250 Preferred Dividends (3) (43) Distributions to NCI (49) (180) Other + 104 + 141 2015 ACFFO 876 3,154 Please refer to the MD&
Slide 17: 2016 ACFFO & EBIT Guidance Outlook
2016 ACFFO & EBIT Guidance Outlook ACFFO/share Adjusted EBIT GROWTH DRIVERS $4.50 $4.8B Liquids Pipelines +++ $3.72 $3.80 $4.4B Gas Distribution + Gas Pipelines & Processing + $3.02 OTHER ACFFO ASSUMPTIONS Maintenance Capital $800 – 850M Current Income Tax $100 – 150M 2014 2015 2016e 2016e *Availabl
Slide 18: ENF & Fund Group Q4 and Full-year Results
ENF & Fund Group Q4 and Full-year Results 10% DPS increase September 2015; 10% DPS increase January 2016 The Fund Group Assets: $ MILLIONS Liquids Assets EXCEPT PER SHARE AMOUNTS Q4 2015 Q4 Variance FY 2015 FY Variance • Canadian Mainline Fund Group ACFFO* 456 +392 834 +467 • Regional Oil Sands Pipe
Slide 19: ENF & Fund Group 2016 Guidance
ENF & Fund Group 2016 Guidance ENF Dividends Per Share Fund Group ACFFO ACFFO GROWTH DRIVERS $2.50 Liquids Pipelines +++ $2.05B Gas Pipelines ~ $2.00 $1.87 $1.75B Green Power ~ $1.50 OTHER ACFFO ASSUMPTIONS Maintenance Capital $125 – 175M $1.00 Current Income Tax $70 – 90M $0.50 $0.00 2014 2015 2016
Slide 20: Consolidated Five-Year Funding Requirement
Consolidated Five-Year Funding Requirement Funding requirement for secured program and other capital requirements Secured Capital Program Consolidated Secured Capital Funding Plan (2015 - 2019) Projects coming into service 2015-2019 ($ billions) Core Maintenance & Integrity Capital1 8.61 $26B Total
Slide 21: Financing Flexibility
Financing Flexibility Alternative funding sources and ample liquidity provide flexibility to manage through capital market disruptions Diversified Funding Sources Consolidated Liquidity Equity or asset based funding ($ billions) DEBT HYBRID EQUITY $20B Can US Global Can US Global Can US Global $9B E
Slide 22: Strong Financial Position
Strong Financial Position Strong and stable credit ratings provide ready access to debt capital to fund growth program Strong credit ratings supported by: EPI EGD ENB FUND EEP • Low business risk (rated “A” by BBB BBB Moody’s; “Excellent” by S&P) DBRS A A (High) (High) BBB • Minimal commodity price
Slide 23: Priorities in the Current Environment
Priorities in the Current Environment 1. Focus on our customers • Safety, reliability and access to the best markets • Efficiency and cost containment 2. Execute commercially secured capital program • $18 billion remaining through 2019 3. Maintain financial strength and flexibility • Strong credit r
Slide 24: Opportunities to Extend & Diversify Growth
Opportunities to Extend & Diversify Growth Substantial opportunity set drives growth beyond secured outlook Liquids Pipelines Key investment criteria • Low-cost mainline expansion programs • Market access expansions/extensions • Strategic alignment • USGC regional infrastructure • Solid fundamentals
Slide 25: Five Year Secured Growth Outlook
Five Year Secured Growth Outlook $26B secured capital program alone drives robust and transparent ACFFO and DPS growth through 2019 with potential for upside ACFFO* DPS Dividend Coverage 12-14%+ CAGR 10-12%+ CAGR ~2.0x ACFFO (Secured Program) (Secured Program) $2.12 $3.02 2014 2019 2016 2019 Average
Slide 26: Q&A
Q&A
Slide 27: Supplemental information
ENBRIDGE Supplemental information
Slide 28: Q4 & Full-year Segmented Adjusted Earnings Variance
Q4 & Full-year Segmented Adjusted Earnings1 Variance ADJUSTED EARNINGS Q4 2015 Q4 2015 Q4 2014 FY 2015 FY 2015 FY 2014 ($ MILLIONS) AS PRESENTED* AS REPORTED AS REPORTED AS PRESENTED* AS REPORTED AS REPORTED Liquids Pipelines 302 64 199 1,019 691 858 Gas Distribution 58 58 68 210 210 177 Gas Pipelin
Slide 29: ENF & Fund Group Q4 and Full-year Results
ENF & Fund Group Q4 and Full-year Results $ MILLIONS EXCEPT PER SHARE AMOUNTS Q4 2015 Q4 2014 FY 2015 FY 2014 Fund Group ACFFO* 456 64 834 367 Distributions paid to Enbridge (296) (41) (517) (141) Cash (retained)/utilized (118) 7 (176) (127) Distributions paid to ENF 42 30 141 99 ENF expenses (1) (2