Enbridge Inc. · TSX:ENB
Enbridge — Enbridge Energy Management L L C — Merger or Acquisition (September 2018)
38 slides from Enbridge's merger presentation, Sep 25, 2018
Slide 1: Enbridge Inc. Investment Community Presentation September 2018
Enbridge Inc. Investment Community Presentation September 2018
Slide 2: Legal Notice Forward Looking Information
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: North America's Leading Energy Infrastructure Company
North America’s Leading Energy Infrastructure Company 2018 EBITDA Outlook • Spectra Energy acquisition transitioned by business unit Enbridge into a diversified liquids and Gas Utilities natural gas infrastructure company Power ~$12.5B Liquids • Premium portfolio of strategically positioned Gas Tran
Slide 4: Executing on our 2018-2020 Strategic Priorities
Executing on our 2018-2020 Strategic Priorities Priorities YTD Actions 1. Move to pure regulated pipelines/ $7.5B of non-core asset sales announced; original utility model target $3B for 2018 • On track for 5.0x Debt-to-EBITDA by YE 2018 2. Accelerate de-leveraging • Incremental asset sales provide
Slide 5: Strategic Priority #1: Move to Pure Regulated Pipeline & Utility Model
Strategic Priority #1: Move to Pure Regulated Pipeline & Utility Model $7.5B of Non-Core Asset Sales Midcoast G&P Business Renewables Power Assets Canadian G&P Business 100% interest in Texas and 49% interest in all onshore Canadian, select 100% interest in all Oklahoma G&P assets onshore US, and th
Slide 6: Strategic Priority #2: Accelerate De-leveraging
Strategic Priority #2: Accelerate De-leveraging Funding Plan Execution 2018 – 2020 Funding Plan1 ($C billions) Financing Flexibility $35 Optional: • More than sufficient capital raised to Increased • 2019 & 2020 DRIP fund current secured funding $30 Financing • Hybrid securities • Asset sales Flexib
Slide 7: Strengthening Credit Metrics: Consolidated Debt to EBITDA Outlook
Strengthening Strategic Priority #2: Accelerate Credit De-leveraging Metrics Consolidated Debt to EBITDA Outlook1 8.0x • Strengthening credit metrics as industry leading growth capital spend moderates and new 6.0x Long Term Target: £ 5.0x projects generate significant EBITDA 4.0x • Achieve long-term
Slide 8: Stable Cash Flow Through Commodity Cycles
Strategic Core Businesses Priority #3: Deliver Reliable Stable Cash Through Flow & Dividend Commodity Growth Cycles Pro-forma Historical EBITDA*(C $ Million) • Stable and predictable cash flow $3,000 • High asset utilization rates • Substantially underpinned by long-term commercial agreements $2,000
Slide 9: Record Financial Performance in First Half 2018
Strategic Priority #3: Deliver Reliable Cash Flow & Dividend Growth Record Financial Performance in first half 2018 Historical DCF/share Historical EPS • DCF/share and EPS growth trend resuming in 2018 after temporary dilution from financing Spectra Energy acquisition • Record level of DCF/share and
Slide 10: Line 3 Replacement Project Update
Strategic Priority #3: Deliver Reliable Cash Flow & Dividend Growth Line 3 Replacement Project Update Critical $9B infrastructure replacement project • Canadian construction program well underway – > 400 km of pipeline now laid • Wisconsin segment complete and in-service – ~13 mile segment • Minneso
Slide 11: Enterprise-wide Secured Growth Project Inventory
Strategic Enterprise Priority #3: -wide Deliver Secured Reliable Cash Growth Flow & Dividend Project Growth Inventory Capital Capital Project Expected ISD ($B) Project Expected ISD ($B) High Pine In service 0.4 CAD Stratton Ridge 1H19 0.2 USD Stampede Lateral In service 0.2 USD PennEast 2H19 0.3 USD
Slide 12: 2018 EBITDA and DCF/share Growth Guidance
Strategic Priority #3: Deliver Reliable Cash Flow & Dividend Growth 2018 EBITDA and DCF/share Growth Guidance Consolidated EBITDA Outlook ($MM) 2018 DCF/share Outlook $4.15—$4.45 ~$12,500 $10,317 $3.68 $2.47 $6,571 Q2 Q2 YTD YTD 2017a 2018e 2017a 2018e Strong year to date performance should drive fu
Slide 13: Dividend Growth Outlook
Strategic Priority #3: Deliver Reliable Cash Flow & Dividend Growth Dividend Growth Outlook • 22 years of sustained dividend increases 10% • 10% dividend growth in 2018 3 Year CAGR • 10% 3-year CAGR, 2018-2020 • Conservative payout ratio of below 65% 11% 22 Year CAGR (1996-2017) 1996 2017 Long histo
Slide 14: Streamline the Business: Definitive Agreements with Sponsored Vehicles
Strategic Priority #4: Streamline the Business Definitive agreements reached with Sponsored Vehicles Current Benefits for ENB Shareholders Potential Structure* Future Structure Simplifies corporate & capital structure Increased ownership of core strategic assets Higher retention of cash flow TSX: EN
Slide 15: Simplification Transactions Targeted Timelines
Strategic Simplification Priority #4: Streamline Transactions the Business —Targeted Timelines Prepare & File SEC Review & Written Consent Transaction Draft Registration Effectiveness of Process Closing Statement (S-4) S-4 Prepare & File SEC Review & Obtain Distribution of Proxy Transaction Draft Re
Slide 16: Key Terms of the Restructuring
Strategic Key Terms Priority #4: of Streamline the Restructuring the Business Final • SEP: 1.111 Enbridge common shares for each common unit of SEP, which represents a 9.8% increase to the exchange Consideration ratio offered on May 17, 2018 • EEP: 0.3350 Enbridge common shares for each Class A comm
Slide 17: Extend Growth Potential Beyond 2020
Strategic Post-2020 Priority #5: Growth Extend Growth Potential Beyond 2020 Liquids Gas Offshore Pipelines & Transmission Gas Utilities Capital Allocation Considerations Terminals & Storage Renewables • Competitive advantage • Organic growth potential $5-10B $5-10B $5+B $5-10B • Must fit low-risk pi
Slide 18: Summary
Summary • 2017 was a transformational year – Spectra Energy transaction successfully diversified the business • 2018—2020 Strategic Plan in execution – $7.5B of non-core asset sales – Financial flexibility – Accelerate de-leveraging – Sponsored vehicle simplification agreements – Line 3 Replacement
Slide 19: Liquids Pipelines
Liquids Pipelines Appendix ENBRIDGE
Slide 20: North America's premier crude oil infrastructure portfolio
North America’s premier crude oil infrastructure portfolio 70% of total oil sands production Largest crude oil pipeline network in the world can be transported on the Regional system to • 27,600 km of pipe serving high quality producing Edmonton and Hardisty basins 3.7mmbpd • Connected to the best r
Slide 21: Large, Stable Contributor to Enbridge EBITDA
Large, Stable Contributor to Enbridge EBITDA 2018e EBITDA 2018e LP EBITDA by Business 4% Other Highly Contracted Enbridge 4% Southern Lights Long Term Take-or-Pay 3% Bakken System Common carrier with indexed rate*; Long Term Take-or-Pay Other 4% 14% Regional Oil Sands Long Term Take-or-Pay Gas Utili
Slide 22: Canadian Oil Sands Positioned for Steady, Longer Term Growth
Canadian Oil Sands Positioned for Steady, Longer Term Growth Canadian Oil Sands Supply Forecasts* (KBPD) 6,000 NEB • Expected continued growth in the oil sands CAPP supports Enbridge systems upstream, mainline 5,000 and market access 4,000 CERI • Long term resource potential €’ 170 billion barrels o
Slide 23: Enbridge System Likely to be at Maximum Capacity
Enbridge System Likely to be at Maximum Capacity Mainline Volume Outlook Ex-Gretna Deliveries (KBPD) • Focused on maximizing throughput and Line 3 operating efficiencies 3500 in-service Alberta 2H19 Clipper • 1H18 throughput up 4% from 1H17 3000 Expansion Annual Capacity • Expect to be at or near ca
Slide 24: Export capacity picture remains unclear post 2021
Export capacity picture remains unclear post 2021 Enbridge Mainline Expected to Remain Highly Utilized WCSB Pipeline Utilization Scenarios Post-2021 One New Pipeline Scenario (KBPD) Two New Pipelines Scenario (KBPD) 6,000 6,000 2018 CAPP 2018 CAPP Third party uncontracted capacity Supply Third party
Slide 25: Mainline Competitive Positioning beyond 2020
Mainline Competitive Positioning beyond 2020 • Mainline attributes: – Market reach 1 – Highly competitive tolls .9 mmbpd Sole sourced supply – Operating flexibility Chicago Netback • WCSB production growth outlook remains strong Chicago Pricing* $68 • Mainline directly connected to 1.9 mmbpd of Enbr
Slide 26: Mainline Expansion Opportunities
Mainline Low cost, highly Expansion executable, staged Opportunities expansions to match supply growth Incremental Capacity 2019 Capacity Hardisty (KBPD) +450 kbpd Mainline System DRA Optimization +75 expansion capability BEP Idle* +100 Incremental Capacity 2019+ System Station Upgrades +100 Line 4
Slide 27: Other Development Opportunities
Other Development Opportunities Oil Sands System DAPL Expansion Express-Platte $1-3B in opportunities Hardisty BAKKEN Express DAPL PADD IV Platte Wood River/ Patoka Patoka • Well positioned in oil sands to • Bakken supply growth could drive • Express-Platte system optimization or capture future supp
Slide 28: New Platform Development Opportunities
New Platform Development Opportunities Permian Strategy – Gray Oak USGC Strategy Cushing PERMIAN Mt $2-3B Belvieu Mt in opportunities Freeport Belvieu Freeport Objective: Expand liquids footprint into Permian Basin Objective: Leverage expertise to expand footprint in USGC Opportunity: High drilling
Slide 29: Gas Transmission
Gas Transmission Appendix ENBRIDGE
Slide 30: Premier Gas Transmission Footprint
Premier Gas Transmission Footprint Canadian Gas Transmission & Gas Transmission Midstream Value Proposition • Unparalleled asset footprint • Safe, reliable operations • Connecting diverse supply basins with growing demand markets • Stable and predictable cash flow • No direct commodity exposure • Mi
Slide 31: Strong, Growing & Stable Contributor to Enbridge EBITDA
Strong, Growing & Stable Contributor to Enbridge EBITDA 2018e EBITDA Enbridge • Transmission business predominantly Other 4% Gas Utilities Gas drives GTM earnings 13% & Power Transmission • Significant contribution to stable, fee-based Gas 85% 32% Transmission earnings from transmission businesses &
Slide 32: Solid Gas Transmission Base
Solid Gas Transmission Base GTM Reservation Revenue (Based on revenues for 12 months ended 12/31/17) 98% 97% 99% 97% 99.5% 97% 94% 95% 94% 92% 72% Achieved Peak Delivery N/A Days in 2017 Average 9 12 8 8 5 8 25 17 Life of 4 6 Contract Terms years years years years years years years years lease years
Slide 33: N. American Natural Gas Demand Grows & Diversifies
N. American Natural Gas Demand Grows & Diversifies Natural Gas Demand Growth by Region NA Natural Gas Demand by Sector (Bcf/d increases by 2035) (Bcf/d) 140 120 LNG Exports W. Canada Mexico Exports +3.5 E. Canada 100 +0.6 Other Northeast 80 +3.5 Power Gen W. North Central +2.1 Pacific +1.6 Mountain
Slide 34: Natural Gas Generation Supports Growing Demand
Natural Gas Generation Supports Growing Demand ISO-NE winter stats… natural-gas-fired generation at risk of not being able to get fuel when pipelines are constrained: Natural gas generating capacity more than 4,000MW will increase from 28% of PJM’s total generating capacity mix to (number will incre
Slide 35: Northeast / New England Development Opportunities
Northeast Development opportunities & New in next England 5 years Northeast / New England • Demand continues to increase • Solution needed to bring affordable gas to the region New England BOSTON Philadelphia Market Opportunities • Market opportunities for industrial Dawn Hub and exports DETROIT NYC
Slide 36: Southeast Markets Development Opportunities
Development Southeast opportunities Markets in next 5 years Southeast Markets • Natural gas power generation GA—Coal-to-gas conversions MS —Increase in Florida demand AL Power generation opportunities FL NOLA ORLANDO $1-2B in opportunities TAMPA Continued growth in natural gas fired power generation
Slide 37: Gulf Coast Development Opportunities
Development Gulf Coast opportunities Markets in next 5 years Gulf Coast • Epicenter of demand for LNG and Mexico exports Permian MS Permian LA TX • DCP offers Permian solutions to producers NOLA Offshore US Gulf Coast MT BELVIEU LNG & Industrial $2-4B in opportunities Mexico Offshore Exports to Mexi
Slide 38: Western Canada Development Opportunities
Development Western opportunities Canada in next 5 years Western Canada Montney / Duvernay Producers looking for egress solutions Expansions Alliance T-South AB NGL transmission opportunities BC Montney/Duvernay expansions LNG opportunities TSouth Transmission Opportunities $12B Alliance in opportun
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