Slide 1: Q3 Financial Results & Business Update
Q3 Financial Results & Business Update November 6, 2020 Al Monaco, Chief Executive Officer | Colin Gruending, 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 and shareholders of Enbridge Inc. (Enbridge or the Company) with information about Enbridge and its subsidiaries and affiliates, including manag
Slide 3: Agenda
Agenda • Energy perspectives • Business update • Q3 highlights and results • Capital allocation • ESG targets 3
Slide 4: Our View on Energy Fundamentals & Pace of Transition
Our View on Energy Fundamentals & Pace of Transition • Global demand for energy will continue to grow • Economic growth dependent on affordable, reliable, and secure energy • Existing infrastructure is essential and long-lived • Energy transition underway; gradual over time 4
Slide 5: Global Energy Demand Grows through 2040
Global Energy Demand Grows through 2040 Global Primary Energy Demand1 (Gtoe) Forecast Current STEPS assumptions Drivers State to 2040 Range of 8% forecasters Energy “central cases” 2.0 %/yr 2.1 %/yr 2% efficiencies Renewables + 344% 14% Other2 12% 5% Clean energy 5% $600 B/yr $1,200 B/yr Nuclear inv
Slide 6: Global Energy Demand Outlook through 2040
Global Energy Demand Outlook through 2040 Crude Oil Natural Gas Renewables Slowing growth; Becomes dominant Offshore wind & stable long-term base global fuel source solar accelerate MMb/d* Tcf/d Twh** 600 12,000 100 Passenger vehicles 75 Heavy duty 400 8,000 vehicles 50 Maritime/ 4,000 Aviation 200
Slide 7: Resiliency and Longevity of ENB Cash Flows
Resiliency and Longevity of ENB Cash Flows Low-Risk Business Model More than 40+ Industry-leading Resilient through Diversified Sources of Financial Profile all Market Cycles Cash Flow Financial Commodity Alberta COVID-19 Crisis Price Forest 98% 95% $16,000 $14,000 Collapse Fires $100 Gas CoS, Contr
Slide 8: Resiliency and Longevity of ENB Cash Flows: Gas Transmission
Resiliency and Longevity of ENB Cash Flows Gas Transmission Last mile connectivity, demand pull 15 bcfd Large domestic space heating and power market Export market developing 4 bcfd 14 bcfd Long-term contracted, regulated COS1 business 18 bcfd Competitive scale and tariff incumbency Current demand S
Slide 9: Resiliency and Longevity of ENB Cash Flows: Gas Distribution and Storage
Resiliency and Longevity of ENB Cash Flows Gas Distribution and Storage Integrated transmission, distribution and storage ONTARIO Serves 5th largest N. American population center Regulated, COS utility Significant fuel cost advantage OTTAWA Comparable Residential Annual Heating Bills ($/year) $2,597
Slide 10: Resiliency and Longevity of ENB Cash Flows: Liquids Pipelines
Resiliency and Longevity of ENB Cash Flows Liquids Pipelines Demand-pull of long-lived Canadian heavy crude ~1 Lowest cost to best markets mmbd ~1 Contracted/regulatory backstop mmbd Globally competitive refineries 0.3 mmbd 3+ mmbpd 2019 LP EBITDA by Asset & Primary Commercial Framework1 12% Regiona
Slide 11: Demand Pull from Globally Competitive Refineries
Demand Pull from Globally Competitive Refineries Competitive and complex refineries Canadian supply growing to meet USGC demand Nelson Complexity1 Global heavy supply changes 2015 to 2040 (mmbpd) ENB Connected Refineries – U.S. Gulf Coast 16 12 ENB Connected Refineries – Inland U.S. U.S. ENB Connect
Slide 12: Gradual, Disciplined Approach to Energy Transition
Gradual, Disciplined Approach to Energy Transition Actions to Transition Business 1996: Acquired Consumers’ Gas utility Align with fundamentals 2002: First onshore wind farm 2009: First solar farm Diversification of asset mix 2011: First RNG project Low cost, no regret options 2016: First offshore w
Slide 13: Well-Positioned for Energy Transition
Well-Positioned for Energy Transition R H CC R C R R RR Asset portfolio1: • 22 Wind farms - onshore & offshore • 6 Solar energy operations • 5 Waste heat recovery facilities • 1 Hydro facility • 1 Geothermal facility •R 6 RNG facilities •C 3 CNG fueling stations •H 1 Green Power to Gas Hydrogen faci
Slide 14: Well-Positioned for Energy Transition
Well-Positioned for Energy Transition RNG Hydrogen P2G Hydrogen Blending • Renewable natural gas from • North America’s first utility-scale • Pilot project to blend hydrogen into organic landfill waste power-to-gas facility utility gas distribution system • Currently operating two projects in • Part
Slide 15: Liquids Business Update
Liquids Business Update Mainline volume recovery Mainline Throughput Outlook Western Canada in-line with forecast (Ex-Gretna, mmbpd) • Core PADD II refineries Avg. 2020 Pre-COVID 81% 70% utilization (~85%) remains higher Planned Throughput : 2.85mbpd Eastern Canada than average North American utiliz
Slide 16: Line 3 Replacement: Minnesota Update
Line 3 Replacement: Minnesota Update Regulatory and Permitting Remaining Steps Milestones Completed Regulatory: Regulatory: Authorization • Application filed; pending EIS Spill Modelling Public EIS / CN / Orders Petitions for Authorization to Construct issuance of permits MPUC1 Complete Consultation
Slide 17: Gas Transmission Business Update
Gas Transmission Business Update Strong capacity utilization & contract renewals • Record power generation peak days in Q3 $4B of projects in execution • 99% contract renewal on Texas Eastern/Algonquin Atlantic Bridge - Phase 3 US$0.1 2020 2020 integrity program substantially completed System Modern
Slide 18: Gas Utility Business Update
Gas Utility Business Update Customer and rate base growth St. Laurent Replacement | 2021 • Y-o-Y growth of 40K new customers/year ONTARIO Synergy capture progressing to Plan Owen Sound OTTAWA Reinforcement London Line Replacement FID London Line Replacement | 2021 • $0.2B replacement of two parallel
Slide 19: European Offshore Wind Business Update
European Offshore Wind Business Update Advancing Offshore France Projects • Saint Nazaire on track for late 2022 ISD Hohe See & Albatros | In Operation • Construction underway on Fécamp project; expected ISD 2023 Dunkirk | TBD Fécamp | 2023 Rampion | In Operation Coursuelles sur Mer | 2024 Renewable
Slide 20: Q3 Highlights
Q3 Highlights • Achieved DCF/share of $1.03; EBITDA of ~$3B Solid Q3 business • Strong capacity utilization across core businesses performance • Realization of operating cost reductions; $300M full year projected • Re-affirming 2020 DCF/share guidance range of $4.50 - $4.80 • 2020 funding plan compl
Slide 21: Q3 2020 Financial Results Summary
Q3 2020 Financial Results Summary For the 3 and 9 months ended September 30, $ millions Adjusted EBITDA Adjusted Earnings Distributable Cash Flow $10,072 $10,085 $4,113 $7,231 $7,173 $3,762 $2,997 $3,108 Q3 $1,124 Q3 $2,088 $2,105 Q3 $961 Q2 Q2 Q2 Q1 Q1 Q1 2020 2019 2020 2019 2020 2019 Q3: $0.48/ sh
Slide 22: Q3 2020 Adjusted EBITDA
Q3 2020 Adjusted EBITDA ($ Millions) 3Q20 3Q19 3Q20 vs. 3Q19 Light deliveries on Mainline and other systems (Seaway/Bakken) Liquids Pipelines 1,732 1,826 Oil sands supply disruptions (recovered through DCF) Higher IJT toll & L3R Canada Surcharge, lower costs Rate settlements, new assets, low
Slide 23: Q3 2020 DCF per share
Q3 2020 DCF per share ($ Millions, except per share amounts) 3Q20 3Q19 3Q20 vs. 3Q19 Adjusted EBITDA 2,997 3,108 New assets placed into service (Hohe See, Gray Oak) Cash distributions in excess of equity earnings 197 144 DCP distribution cut announced in Q1’20 Maintenance capital (256) (293) I
Slide 24: Re-affirming 2020 Financial Outlook
Re-affirming 2020 Financial Outlook 2020 Distributable Cashflow Per Share1 YTD performance ahead of plan Tailwinds Headwinds $4.50–4.80 GTM rate settlements Mainline throughput $4.57 Cost reductions Energy Services $4.42 Stronger USD Low interest rates Q4 Outlook relative to original gui
Slide 25: Financial Strength and Liquidity
Financial Strength and Liquidity Industry Leading Credit Ratings1 2020 Funding Plan Complete ($B) Reaffirmed rating on: ~$2.1B ~$1.4B Hybrid Securities BBB+ Dec 2019 2021 Prefunding stable ~$4B ~$5.8B Debt Maturities Debt funding BBB+ April 2020 stable ~$4.52 ~$0.4B Asset Sales Secured Growth Capita
Slide 26: Capital Allocation Framework
Capital Allocation Framework Post-2021 Available Capital Priorities $5 - 6B of Financial Capacity 1 Preserve Financial 2 Sustainably Grow 3 Efficiently Strength Dividend Grow the Business Debt 4.5x to <5.0x 60-70% DCF payout • Execute secured growth Capacity1 Debt:EBITDA • High return, high confiden
Slide 27: Today – Industry Leading ESG Performance
Today – Industry Leading ESG Performance Third Party ESG Ratings Best Possible Environmental Social Governance Rating • Set and met GHG • $1B Indigenous • 4 board Committee Chairs reductions targets1 economic spend over are women Enbridge last decade Rating • Industry-leading liquids • 82% board is
Slide 28: Setting Additional ESG Goals for the Future
Setting Additional ESG Goals for the Future Environmental Social Governance • Achieve net zero • Achieve new diversity and • Representation on the emissions by 2050 inclusion goals by 2025 Board of 40% women and • Reduce the emissions 2025 20% ethnic and racial Today Goal groups by 2025 intensity by
Slide 29: Principal Pathways to Reduce Scope 1 & 2 Emissions
Principal Pathways to Reduce Scope 1 & 2 Emissions Modernization Self-Power Decarbonizing Alternative & Innovation With Renewables The Grid Emissions Offsets • Modernize equipment • Solar self powering of • Lower carbon fuel • Planting trees, protecting across the Enbridge electric pump and sources
Slide 30: Upcoming Investor Day
Upcoming Investor Day • Energy fundamentals • Capital allocation framework and priorities • Business updates and growth strategies • 2021 financial and dividend guidance 30
Slide 31: Q&A
Q&A ZENBRIDGE