Slide 1: Q2 2019: Financial Results & Business Update
Q2 2019: Financial Results & Business Update August 2, 2019 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 ENB Value Proposition • Second quarter highlights • Business update • Financial performance • Mid-year priorities recap 3
Slide 4: Strong Q2 and 1H 2019 Financial Results
Strong Q2 and 1H 2019 Financial Results For the 3 and 6 months ended June 30, $ millions Adjusted EBITDA Adjusted Earnings DCF $3,208 Q2 $2,310 $3,165 $1,349 Q2 Q2 $1,094 $1,858 $3,406 $3,769 $1,640 $2,758 Q1 Q1 $2,312 Q1 $1,375 2018 2019 2018 2019 2018 2019 Q2: $0.65/ share $0.67/ share 3% Q2: $1.1
Slide 5: Liquids Business Update: Near-Term Optimizations/Expansions
Liquids Business Update Near-Term Optimizations/Expansions Bakken Pipeline System 2019 Mainline Optimizations Express Pipeline Open Season Open Season BAKKEN Edmonton Hardisty Hardisty 50kbpd Expansion Kerrobert DAPL Regina Cromer Express Wood River/ 85kbpd Gretna Patoka System optimizations Superio
Slide 6: Mainline Contract Offering
Liquids Business Update Mainline Contract Offering Mainline Contracting Timeline Key Offering Features • Open Season launched on Aug 2 • Priority access for contracted volume • Offering open for 60 days • Contract terms 8 to 20 years • Toll discounts for longer terms and • File with NEB by end of 20
Slide 7: Line 3 Replacement Project – U.S.
Liquids Business Update Line 3 Replacement Project – U.S. Minnesota • EIS court appeal decision found one deficiency - 8 other items dismissed Update • Minnesota Supreme Court to determine whether to hear appeals of items dismissed (by Sept 3) • MPUC to determine process/timeline to remediate EIS de
Slide 8: Line 5 Developments
Liquids Business Update Line 5 Developments • Operating the pipeline reliably for over 65 years Lake Superior ON • Critical energy infrastructure • Safety and integrity continually MN Line 5 Lake validated by the regulator (PHMSA) Huron WI MI 540,000 Lake Michigan Sarnia Barrels of NGLs & light crud
Slide 9: Gas Transmission Business Update
Gas Transmission Business Update • LNG – US Gulf Coast US Gulf Coast Markets Cameron Extension Venice – Leveraging our footprint Cameron LNG Extension TX Stratton Plaquemines – Serving existing and developing LNG facilities Ridge LA LNG Texas – 1 project recently placed in service; US$0.6B Eastern S
Slide 10: Utility Business Update
Utility Business Update • In-franchise Expansion ONTARIO – $0.2B modernization and reinforcement projects OTTAWA in Windsor and Owen Sound – $0.2B expansion of Dawn to Parkway system Owen Sound Reinforcement • Customer additions/community expansions – Y-O-Y growth of ~50K in active customers TORONTO
Slide 11: Offshore Wind Business Update
Offshore Wind Business Update Renewable Power Declining Costs for Aligns with Enbridge Fundamentals (Electricity Capacity, GW) $125 Renewables ($/KWh) Value Proposition 6,000 Source: IEA Liquids Offshore Increasingly & Gas Wind 5,000 $100 renewables are Attractive low lowest cost risk returns 4,000
Slide 12: European Offshore Wind Projects
European Offshore Wind Projects European Fundamentals Growing Asset Footprint (facility | est. ISD) Higher barriers to entry Hohe See | 3Q19 Few well-capitalized players Expansion | 4Q19 Mega-scale projects Saint Nazaire | Late 2022 Rampion | 2Q18 • FID Aug 2019 Dunkirk | TBD Contracted offtake, dou
Slide 13: Enterprise-wide Secured Growth Project Inventory
Enterprise-wide Secured Growth Project Inventory Project Expected ISD Capital ($B) AOC Lateral Acquisition In-service 0.3 CAD Stratton Ridge In-service 0.2 USD 2019 Generation Pipeline Acquisition 2H19 0.1 USD Hohe See Wind & Expansion – Germany 2H19 1.1 CAD Gray Oak Pipeline 4Q19 0.7 USD Utility Gr
Slide 14: Consolidated Adjusted EBITDA
Q2 2019 Financial Performance Consolidated Adjusted EBITDA Q2 2019 vs. Q2 2018 Adjusted EBITDA Liquids Pipelines (C$ Millions) Q2 2018 Q2 2019 + Higher throughput and tolls on Mainline System + Higher volumes FSP and Seaway pipelines + Higher Bakken Pipeline volumes Liquids Pipelines 1,629 1,766 + S
Slide 15: Consolidated DCF
Q2 2019 Financial Performance Consolidated DCF Q2 2019 vs. Q2 2018 Distributable Cash Flow + Adjusted EBITDA drivers noted in previous slide (C$ Millions, except per share amounts) Q2 2018 Q2 2019 + Lower maintenance capital expenditures, due to timing of expenditure profile in 2019 Consolidated Adj
Slide 16: Re-affirming 2019 Financial Outlook
Re-affirming 2019 Financial Outlook Q1-Q2 STRENGTH 2019 Distributable Cash Flow (Consolidated DCF/share ) 1 • Energy Services • Liquids Pipelines $4.42 $4.30 – 4.60 • Gas Distribution Q3-Q4 GUIDANCE VARIANCES: $3.68 • Line 3 delay • GTM integrity expense • O&A timing • Moderating Energy Services mar
Slide 17: Financial Strength & Flexibility
Financial Strength & Flexibility Consolidated DEBT to EBITDA1 Enbridge Inc. Sr. Unsecured Debt Ratings 6.0x 5.5x Standard & Poors BBB+ stable Target Range: 4.5x to 5.0x 5.0x Fitch BBB+ stable 4.5x 4.0x DBRS BBB High stable 3.5x Moody’s Baa2 Upgraded positive Jan. ‘19 3.0x 2016 2017 2018 2019e 2020e
Slide 18: 2019 Mid-year Assessment
2019 Mid- year assessment Priorities YTD Status 1. Achieve 2019 DCF guidance range of $4.30 – 4.60/share • Strong operating performance across the businesses • Expect to be around the midpoint of the range • Canadian construction substantially complete 2. Advance Line 3 Replacement • Appeal court id
Slide 19: Q&A
Q&A ZENBRIDGE