Slide 1: Vern Yu, Executive Vice President & Chief Financial Officer
Vern Yu Executive Vice President & 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: 2021 Reflections
2021 Reflections Systems Highly Utilized Visible Capital Program (deliveries as a % of 3-year avg.) Placed Into 2021 Projects Service Developments ~103%2 ~105%3 ~101%1 Liquids • Line 3 Replacement • 90kbpd FSP Expansion 100 % • Southern Access • Capital Power MoU Pipelines • Ingleside Energy Center
Slide 4: Big Picture
Big Picture Diversified Asset Base1 Predictable Cash Flows Financial Strength 98% BBB+ Gas Transmission Credit Liquids Pipelines ~$180B Gas rating Enterprise Distribution Value2 Renewables & Contracted or cost-of-service Across all four rating agencies New Energies Visible Organic Growth3 Discipline
Slide 5: Financial Strength and Flexibility
Financial Strength and Flexibility 6.0x 5.5x Debt/EBITDA Financial Parameters 2022e Target Target Range: 4.5x – 5.0x1 Debt to EBITDA ≤4.7 4.5 – 5.0x 5.0x Dividend Payout of DCF/s ~65% 60-70% 4.5x % of customers with Substantially all 4.0x Investment Grade Rating1 ~95% investment grade 3.5x Self-fund
Slide 6: Our Capital Allocation Track Record
Our Capital Allocation Track Record Actions since 2017 Capital Simplification Organic Asset Dividend2 Recycling Growth Acquistions1 $9 $13 $36 $8 $36 billion billion billion billion billion ~12x EBITDA; Increased Generate low risk ~9x EBITDA 7% CAGR; Non-core asset existing asset & contracted multip
Slide 7: Surfacing Shareholder Value
Surfacing Shareholder Value Centralized Operations Extended Cash Strengthened Low-Risk & Project Execution Taxability Horizon1 Business Model Achieved cost reductions ($ millions) Value of tax loss carry forward ($ billions) Business risk rating by Credit Agency $14 ~$1.2B Low Business Risk $12 $10
Slide 8: Disciplined Capital Allocation
Disciplined Capital Allocation 1 Protect Balance Sheet • Preserve financial strength and flexibility • Ratable dividend increases up to medium-term DCF/s growth 2 Sustainable Return of Capital • Periodic share repurchases1 • Prioritize low-capital intensity & utility-like growth 3 Further Organic Gr
Slide 9: 2022+ Capital Allocation
2022+ Capital Allocation Base Return of Capital Annual Investable Capacity $~11B (~65% of DCF) Excess Allocation • Other organic growth Select • Share repurchases $~7B+ best option $5-6B • Asset acquisitions • Deleveraging ~$2B Core Allocation • Core growth allocation $3-4B • Low-capital and utility
Slide 10: Capital Allocation Preferences
Capital Allocation Preferences CORE ALLOCATION EXCESS ALLOCATION ~$3-4B/year ~$2B/year Other Zero Capital Utility-Like Organic Share Asset Pay Down Capital Efficient Capital Growth1 Repurchases Acquisitions Further Debt Organic Capital Equity IRR: Infinite 15%+ 9-14% 10%+ Enhance Low capital Regulat
Slide 11: Mature Investment Framework
Mature Investment Framework Further Capital Allocation Organic Share Repurchases Asset Acquisition Debt Repayment Choices Growth • Strategy • Commercial • Long term resiliency Initial Screen • Fundamentals • Executability • Permitting & • ESG • Country risk stakeholder risks • Project economics • Te
Slide 12: Share Repurchase Program
Share Repurchase Program Criteria Up to $1.5B Commencing in Q1 20221 Balance sheet metrics & financial flexibility Open market purchases Assessment of investment alternatives Non-programmatic Fundamental value of shares Share repurchases are a benchmark for capital investment and support further DCF
Slide 13: 2022 Planning Parameters
2022 Planning Parameters Base Business: • Revenue inflators and productivity enhancements • Assumes robust utilization across our systems • Includes provision for final Mainline tolls • FX Rate of $1.25 CAD/USD1 Capital Projects: • Annualized impact of $14B2 placed into service in 2021 • Assumes sec
Slide 14: 2022 Financial Guidance
2022 Financial Guidance 27th Adjusted EBITDA1 DCF/share1 Dividends/share consecutive annual ($B) $5.20 - $5.50 increase $15.0 - $15.6 $13.9 - $14.3 $4.70 - $5.00 $3.44 $3.34 2020 2021e 2022e 2020 2021e 2022e 2020 2021e 2022e Annual growth across all metrics reflects strong business performance and c
Slide 15: 2022 EBITDA Guidance
2022 EBITDA Guidance ($ Millions) 2022e Growth Drivers vs. 2021 Mainline volume recovery; Avg. 2.95 mmbpd2 Liquids Pipelines ~8,800 Full year of Line 3R Surcharge Ingleside Energy Center Acquisition Gas Transmission ~4,000 New assets placed into service Rate escalation, new customer adds,
Slide 16: 2022 DCF Guidance
2022 DCF Guidance ($ Millions) 2022e Adjusted EBITDA1 (from prior slide) $15,000-$15,600 Quarterly Profile EBITDA & DCF3 Maintenance Capital ~(1,000) Financing Costs ~(3,300) Current Income Taxes2 ~(450) Distributions to Non-controlling Interests ~(300) Cash Distributions in Excess of Equity Earning
Slide 17: Strengthening Our Base Business
Strengthening Our Base Business Regulatory Update Built-in Revenue Cost and Productivity Escalators1 Improvements Texas Eastern • + ~C$125M EBITDA (% of EBITDA) Algonquin • + ~C$25M EBITDA Regulatory recovery • + ~C$10M EBITDA mechanisms BC Pipeline East Tennessee • + ~C$10M EBITDA ~15% Alliance U.S
Slide 18: Secured Growth Through 2024
Secured Growth Through 2024 Commercial Expected Project Framework ISD Capital ($B) Line 3R – U.S. Portion Contracted In Service 4.0 USD Executing on Secured Program Liquids Pipelines Southern Access Expansion COS In Service 0.5 USD Other Expansions TOP In Service 0.2 USD $17B Modernization Program C
Slide 19: Equity Self-Funded Model
Equity Self-Funded Model 2022 Funding Plan Industry-Leading Credit Ratings ($B) Reaffirmed rating on: ~$6.5 ~$7 Debt Maturities Baa1 June 2021 Debt Funding Stable BBB+ ~$4.5 Stable Dec 2020 Secured Growth ~$5 Capital Spend Internal Cash Flow1 BBB High July 2021 ~$1 Maintenance Stable Uses Sources BB
Slide 20: Visible 3-Year Plan Outlook
Visible 3-Year Plan Outlook DCF/share1 5-7% • Optimize asset return CAGR through Deploy 2024 – Revenue inflators Excess Execute Capacity Revenue Inflators & Secured – Productivity enhancements Capital Productivity Program Enhancements • Deliver secured organic growth • Deploy excess investable capac