Slide 1: Q3 2019: Financial Results & Business Update
Q3 2019: Financial Results & Business Update November 8, 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: Executive Leadership Changes
Executive Leadership Changes Guy Jarvis Vern Yu Retiring - EVP Liquids Pipelines EVP Liquids Pipelines 3
Slide 4: Q3 Highlights
Q3 Highlights Delivering • Record Q3 EBITDA strong financial • Expect to exceed the mid-point of 2019 DCF/share guidance range results • Received $0.4B asset sales proceeds; 4.6x Debt:EBITDA Optimizing • Advancing ~100 kbpd Mainline capacity optimizations the base • Preparing CER application for Mai
Slide 5: Q3 2019 Financial Results Summary
Q3 2019 Financial Results Summary For the 3 and 9 months ended Sep 30, $ millions Adjusted EBITDA Adjusted Earnings Distributable Cash Flow $3,108 Q3 $2,958 $1,124 Q3 $2,105 Q3 $933 $1,585 $3,208 Q2 $1,349 Q2 Q2 $3,165 $2,310 $1,094 $1,858 $3,769 Q1 $1,640 Q1 $2,758 $3,406 $1,375 $2,312 Q1 2018 2019
Slide 6: Line 3 Replacement Project
Liquids Business Update Line 3 Replacement Project Canada Edmonton ~$5B • Reached agreement to place into service Dec 1 Canadian segment – Immediately enhances safety and reliability of the system Hardisty Capital cost – Interim surcharge of US$0.20 per barrel Kerrobert Canadian Regina United States
Slide 7: Line 3 Replacement - Minnesota Project Milestones
Liquids Business Update Line 3 Replacement - Minnesota Project Milestones Anticipated Sequence of Milestones Regulatory: MPUC EIS Spill Modelling & EIS Adequacy Reinstate Authorization Petitions for MPUC Public Consultation Decision CN / RP Reconsideration to Construct State Permitting: 401 Permit F
Slide 8: Incremental WCSB Egress
Liquids Business Update Incremental WCSB Egress 2019 Mainline Optimizations Express Pipeline Open Season Hardisty Edmonton Hardisty Kerrobert Regina Express ~100kbpd Cromer 50kbpd Gretna Expansion System optimizations Superior PADD IV Wood River/ Patoka • Delivery and receipt point optimization • Su
Slide 9: Incremental Downstream Capacity
Liquids Business Update Incremental Downstream Capacity Expanding Access to U.S. Gulf Coast Seaway Expansion • Plan to launch open season for up to 200 kbpd new capacity Capacity • Pump station modifications of up to • ISD: 2020 / 2022 ~1.1 mbpd DAPL Bakken Pipeline System • Open season extended to
Slide 10: Mainline Fundamentals & Customer Profile
Liquids Business Update Mainline Fundamentals & Customer Profile Throughput underpinned by demand pull shippers Top 10 Mainline shippers by business model 1 Integrated 6 Integrated 2 Integrated 7 Integrated 3 Integrated 8 Refiner 4 Refiner 9 Refiner 5 Refiner 10 Integrated Mainline shippers mix 1.9
Slide 11: Mainline Tolling Framework
Liquids Business Update Mainline Tolling Framework Mainline tolling CTS incentivized Stable CTS Hardisty to framework benefits capacity increases Chicago joint toll Optimizations Incentive Tolling Agreements (ITA) Expansions ~1% Annual Toll increase Current Competitive Term Contract 2011 - 2019 Ship
Slide 12: Attractiveness of Mainline Offering
Liquids Business Update Attractiveness of Mainline Offering • Long term contract alternatives Average tolls in-line 2021e WCSB producer – Take-or-pay contracts with CTS netbacks – Requirements contracts • Strongest netback for WCSB crude – Attractive toll; consistent with CTS levels ~1% Competitive
Slide 13: Contracting Next Steps
Liquids Business Update Contracting Next Steps Canada Energy Regulator (CER) Process Indicative Timeline • In Sep 2019, the CER determined that Enbridge needs approval of the offering before Mid-2021 conducting an open season • Preparing application and related evidence Prepare & file CER Hearings O
Slide 14: Rate Case Proceedings
Gas Transmission Business Update Rate Case Proceedings Texas Eastern: East Tennessee: Algonquin: • Section 4 Rate Case filed Nov 2018 • Filed settlement agreement in May and • Commenced rate discussions with • Filed rate case settlement agreement with received FERC approval on Oct 1, 2019; customers
Slide 15: LNG Business Development
Gas Transmission Business Update LNG Business Development Focus on US Gulf Coast Markets • Assets well-positioned along the U.S. Gulf Coast to successfully compete for LNG opportunities Cameron • Serving 2 operational LNG facilities and several TX Extension Venice Cameron LNG Extension other facilit
Slide 16: Utility Business Update
Utility Business Update Amalgamation Progress Utility Expansion Opportunities • Synergy realization on track ONTARIO 2019 Rate Application OTTAWA • Rates approved by Ontario Energy Board (OEB) in Owen Sound September Reinforcement • April 1, 2019 retroactive effective date TORONTO $0.4B Capital cost
Slide 17: Enterprise-wide Secured Growth Project Inventory
Enterprise-wide Secured Growth Project Inventory Project Expected ISD Capital ($B) AOC Lateral Acquisition In-service 0.3 CAD Gray Oak Pipeline Offshore Wind - Germany Stratton Ridge In-service 0.2 USD Generation Pipeline Acquisition In-service 0.1 USD 2019 Hohe See Wind & Expansion 4Q19 1.1 CAD Gra
Slide 18: Adjusted EBITDA
Q3 2019 Financial Performance Adjusted EBITDA C$ millions Performance Drivers: $193 Higher Mainline volumes and IJT $29 Liquids Pipelines Strong downstream pipeline volumes $17 $3,108 $9 Absence of EBITDA from Asset Sales Gas Transmission New assets placed into service ($94) ($4) Higher di
Slide 19: DCF per share
Q3 2019 Financial Performance DCF per share Per share (C$) Performance Drivers: EBITDA EBITDA growth (prior slide) Maintenance capital Lower expenditures due to assets sold Lower financing costs, i.e. asset sales $1.04 Financing costs proceeds Current income taxes Higher taxes on higher earn
Slide 20: Re-affirming 2019 Financial Outlook
Re-affirming 2019 Financial Outlook Q1-Q3 STRENGTH • Liquids Pipelines throughput 2019 Distributable Cash Flow/share 1 • Energy Services expected to • Gas Distribution weather impacts Exceed the $4.30 – 4.60 Midpoint • O&A cost performance $4.42 Q4 GUIDANCE VARIANCES: • Line 3R delay $3.68 • Gas Tra
Slide 21: Financial Strength & Flexibility
Financial Strength & Flexibility Consolidated DEBT to EBITDA1 Non-Core Asset Sales 6.0x Proceeds ($B) Closed 5.5x Target Range: Midcoast G&P Business $1.5 Aug. 1, 2018 4.5x to 5.0x (US$1.1B) 1.7 5.0x Renewables Power Assets Aug. 1, 2018 4.5x Canadian G&P Business (BC regulated) 2.5 Oct. 1, 2018 4.0x
Slide 22: Enbridge Day
2019 Enbridge Day Investment Community Conference New York Toronto Tuesday, December 10 Wednesday, December 11 Conference & webcast Investor lunch
Slide 23: 2019 Strategic Priorities
2019 Strategic Priorities Priorities YTD Status • Strong operating performance across the businesses Achieve 2019 DCF guidance range 1. of $4.30 – 4.60/share • Full year DCF/share expected to exceed the mid-point of guidance range • Canadian segment to come into service Dec. 2019 2. Advance Line 3 R
Slide 24: Q&A
Q&A ZENBRIDGE