Slide 1: Q1 2020 Financial Results & Business Update
Q1 2020 Financial Results & Business Update May 7, 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: COVID-19 Response & Business Continuity
COVID-19 Response & Business Continuity Our People Our Response Our Approach Financial Commodity Alberta $16,000 Crisis WTI Price Collapse Forest Fires $100 $14,000 $12,000 $75 $10,000 WCS $8,000 $50 $6,000 $4,000 $25 $2,000 Adjusted EBITDA $0 $0 2008 2010 2012 2014 2016 2018 2020e • Control centers
Slide 4: Highlights
Highlights • Strong operating performance Strong Q1 Results • Achieved $1.34 DCF/share • Results exceed budget • Sold $0.4B of assets Advanced Strategic • Texas Eastern rate settlement approved Priorities • Advanced permitting on Line 3 Replacement Project • Reducing costs by ~$0.3B 2020 Bolstering
Slide 5: Q1 Financial Results Summary ($ millions)
Q1 Financial Results Summary ($ millions) Adjusted EBITDA Adjusted Earnings Distributable Cash Flow $3,769 $3,763 $2,758 $2,706 $1,640 $1,668 Q1 2019 Q1 2020 Q1 2019 Q1 2020 Q1 2019 Q1 2020 Q1: $0.81 / share $0.83 / share Q1: $1.37 / share $1.34 / share Re-affirming 2020 DCF/share guidance of $4.50
Slide 6: Low Risk Pipeline-Utility Business Model
Low Risk Pipeline-Utility Business Model 40+ Diversified Sources Best-in-Class 2020e EBITDA of Cash Flows (EBITDA) Commercial Underpinning Commercial Profile Gas Liquids Pipelines Transmission 98% • Gas distribution utility • U.S. Gas Transmission (i.e. COS/ TETCO, East Tennessee, Gas Distribution C
Slide 7: Gas Transmission Resiliency
Gas Transmission Resiliency 15 bcfd Q1 Performance Gas pipelines highly utilized $3.7B 4 bcfd 14 TETCO rate settlement implemented April 1 18 bcfd 2020e GTM Achieved >99% re-contracting on TETCO and Algonquin EBITDA bcfd 27% 2020 Outlook of Consolidated EBITDA • Continued execution of system
Slide 8: Gas Distribution & Storage Resiliency
Gas Distribution & Storage Resiliency Q1 Performance ONTARIO Growth from new customers and community expansions $1.8B Capturing utility combination synergies 2020e GDS Warmer than normal weather in Q1 EBITDA OTTAWA 2020 Outlook • Regulatory framework protects cash flows DAWN • Limited COVID-19
Slide 9: Renewable Power Generation Resiliency
Renewable Power Generation Resiliency North America Europe Q1 Performance Wind and solar facilities ran well $0.5B New German offshore wind farm in service 2020e Power Saint-Nazaire France offshore wind farm EBITDA construction in progress 2020 Outlook • Expect to perform in line with expect
Slide 10: Liquids Pipelines Resiliency
Liquids Pipelines Resiliency ~1 Q1 Performance mmbd Record throughput on the Mainline system ~1 $7.5B mmbd Downstream market access pipelines highly utilized 2020e LP 0.3 Advanced permitting on Line 3 replacement project EBITDA mmbd 3+ mmbpd 2019 Liquids Pipelines EBITDA by Asset1 System-wide
Slide 11: COVID-19 Impact on Demand - Supply
COVID-19 Impact on Demand - Supply Unprecedented Reduction in N.A. 2020 Crude Oil Demand Outlook2 North America Energy Demand (kpbd, as of April 24, 2020) Jan’20 to April’201 Pre-Covid19 Demand Outlook 20,000 Gasoline demand Vehicle miles travelled down significantly -38% ~3.6 mmbpd 15,000 Post-Covi
Slide 12: Enbridge Core Markets Resiliency
Enbridge Core Markets Resiliency North America Refinery Utilization1 Core Markets in PADD II & Refining Margins vs. PADD I2 (April Avg) US Midwest PADD I Eastern Canada $8 $6 Western • ~3 mmbpd of refinery demand; greater Canada $4 than 2 mmbpd reliant on ENB system $2 66% • High refinery utilizatio
Slide 13: Why the ENB Mainline has always been heavily utilized
Why the ENB Mainline has always been heavily utilized Mainline Throughput Heavy Oil Apportionment Mainline Key Attributes (Ex-Gretna, kbpd) (Apportionment %) 3,000 80% 70% Direct connection to 2,500 heavy oil refineries 60% 2,000 50% Shippers have optionality to multiple markets 1,500 40% 30% Low an
Slide 14: Mainline Outlook
Mainline Outlook WCSB Blended Supply Outlook & Disposition of April Reduced Supply Mainline Throughput Outlook (Ex-Gretna throughput, kbpd) (kbpd) 1,200 ~1.1 mmbpd 3000 Avg. 2020 Planned Throughput : 2.85mbpd1 5,000 First 400-600 200-400 100-300 ~1-1.5 1,000 Rail Volumes 2500 kbpd kbpd kbpd 4,000 MM
Slide 15: Attractive Mainline Offering
Attractive Mainline Offering Strong Shipper Support Contract Offering Balances 2021e WCSB Producer Netbacks Shipper Needs ~75% Priority access Shipper Best Support* markets Toll certainty & competitive toll drives strongest Secures prime long term netback *based on 2019 throughput markets for WCSB p
Slide 16: Demand-Pull Supports Strong Contracting Outcome
Demand-Pull Supports Strong Contracting Outcome 3.1 mmbpd Demand Pull from Core Markets in PADD II & PADD III & U.S. Gulf Coast Premium Markets Eastern Canada (mmbpd) Market share of Canadian heavy 3.0 in USGC is increasing 2.5 2.2 2.0 0.3 1.5 ~30% 50+% 1.0 1.9 0.3 mmbpd 0.5 Line 9 take-or-pay 2018
Slide 17: Mainline Contracting Regulatory Process
Mainline Contracting Regulatory Process Estimated Process Timeline: Dec 19, 2019 2Q 2021 Filed Application Regulatory: with CER Public Hearing Information Oral CER Hearings & Decisions Comment Orders Decision Requests Hearing Period (Feb 7) Issued New Mainline Commercial: Open Season Framework in Ef
Slide 18: Line 3 Replacement: Minnesota Update
Line 3 Replacement: Minnesota Update Regulatory and Permitting Milestones MPUC process updates • EIS, Certificate of Need and Route Regulatory: Permit reinstated EIS • MPUC orders issued May 1; delayed Public EIS / CN / Orders Petitions for Authorization MPUC Spill Modelling Consultation RP Decision
Slide 19: 3-Year Plan Priorities Supplemented by Bolstering Actions
3-Year Plan Priorities Supplemented by Bolstering Actions 3 Year Plan Priorities 2020 Bolstering Actions • Safety & operational reliability COVID-19 business continuity plans • Balance sheet strength and flexibility Increased available liquidity to $14 billion • Optimize the base business Redu
Slide 20: Q1 2020 Adjusted EBITDA
Q1 2020 Adjusted EBITDA ($ Millions, except per share amounts) 1Q20 1Q19 1Q20 vs. 1Q19 Liquids Pipelines 1,919 1,729 Mainline throughput & tolls; Strong downstream pipeline volume Texas Eastern rate case settlement Gas Transmission & Midstream 1,097 1,040 Sale of Canadian G&P assets Customer
Slide 21: Q1 2020 Distributable Cash Flow
Q1 2020 Distributable Cash Flow ($ Millions, except per share amounts) 1Q20 1Q19 1Q20 vs. 1Q19 Adjusted EBITDA 3,763 3,769 Cash distributions in excess of equity earnings 72 94 Lower equity distributions from Alliance & Aux Sable Maintenance capital (204) (179) Timing; full year in line with gui
Slide 22: Secured Growth Capital
Secured Growth Capital Projects in Execution ($ Billions) Capital Expenditures through 1Q20 Commercial Project Expected ISD ($B) ($B) Framework High-quality portfolio of projects: Line 3R – U.S. Portion TBD1 2.9 USD 1.4 USD Toll Surcharge Southern Access to 1.2 mmbpd 2H20 0.5 USD 0.5 USD Toll Surcha
Slide 23: Preserve and Strengthen Financial Position
Preserve and Strengthen Financial Position Available Liquidity ($B) 2020 Funding Plan ($B) 15 12 ~$14B ~$1.5B 9 Debt funding remaining ~$4B Debt Maturities 6 ~$4B Debt funding completed ~$4.5B1 3 Secured Growth ~$4B Capital Spend Cash Flow net of common dividends ~$1B Maintenance 0 April 2020 Uses S
Slide 24: $0.4B of Asset Sales
$0.4B of Asset Sales Montana Alberta Tie Line Ozark Gas Transmission 49% Interest in Offshore Wind Construction Ozark Gas Development $0.2B AB $0.1B system $0.1B Proceeds Proceeds Proceeds OK AR MATL Fecamp MT Coursuelles sur Mer St. Nazaire • 345 km electricity transmission line from • Non-core gas
Slide 25: Strong Customer Base
Strong Customer Base Enterprise Counterparty Credit Profile1 Liquids Gas Gas Distribution • Resilient customer base Pipelines Transmission & Storage Renewables ̶ Refiners, utilities, integrated producers, etc. ~97% ~91% ~100% ~99% • Strong credit protections in place for below investment Investment
Slide 26: Best-in-Class Risk Profile
Best-in-Class Risk Profile Business Risk Rating Agency Credit Metric Assessment The company has limited direct commodity price exposure, with approximately 98% BBB+ Excellent of its cash flows stemming from low-risk take-or-pay, fixed fee, or cost-of-service-type stable contracts, which underline th
Slide 27: Cost Reductions
Cost Reductions • Outside services and supply chain costs $300M • Cost efficiencies Cost Reductions • Voluntary retirement programs • Company-wide salary roll-backs Continued optimization of base operations, without sacrificing safety and reliability of operations 27
Slide 28: 2020 Financial Outlook Sensitivities
2020 Financial Outlook Sensitivities LP Mainline Sensitivities 2020 Bolstering Actions Volume Sensitivity(1) (Impact on Q2-Q4 DCF(1)/share) (Impact on Q2-Q4 DCF(1)/share) EBITDA IMPACT Q2-Q4 (net of power) Avg. volume Target O&A Mainline volumes 500 400 300 200 100 estimated Reductions Volume Remain
Slide 29: Re-affirming 2020 Financial Outlook
Re-affirming 2020 Financial Outlook 2020 Distributable Cash Flow/share1 TAILWINDS $4.50 – 4.80 • Strong Q1 performance $4.57 • Stronger USD • Low interest rates • Cost reductions HEADWINDS • Mainline volumes • Energy services • DCP distribution cut • Aux Sable margins 2019 2020e Full-year DCF/share
Slide 30: 2020 Priorities
2020 Priorities Safety & operational reliability Balance sheet strength and flexibility Optimize the base business Disciplined capital allocation Execute secured capital program Grow organically Maximizing shareholder value through low-risk pipeline-utility model 30
Slide 31: Q&A
Q&A ZENBRIDGE