Slide 1: Enbridge 2018 Annual Investor Day
Enbridge 2018 ANNUAL INVESTOR DAY NEXUS pipeline project December 2018
Slide 2: Contents
Contents Legal Notice 01 Opening Remarks 03 Strategic Overview 05 Gas Transmission and Midstream 15 Utilities 23 Liquids Pipelines 28 Corporate Finance 41 Concluding Remarks 51
Slide 3: 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 4: Non-GAAP Measures
otherwise. All FLI in this presentation and all subsequent FLI, whether written or oral, attributable to Enbridge, or any of its subsidiaries or affiliates, or persons acting on their behalf, are expressly qualified in its entirety by these cautionary statements. Non-GAAP Measures This presentation
Slide 5: Safety Moment: Building Evacuation Procedures
Enbridge Investor Day December 11, 2018 New York City Safety Moment Building Evacuation Procedures 2 Enbridge Investor Day 3
Slide 6: Agenda
Agenda Strategic Overview Al Monaco 8:30 Gas Transmission & Midstream Bill Yardley 9:30 Utilities Cynthia Hansen 10:15 Break 10:30 Liquids Pipelines Guy Jarvis 10:45 Corporate Finance John Whelen 11:30 Concluding Remarks Al Monaco 12:15 3 Legal Notice Forward Looking Information This presentation in
Slide 7: Strategic Overview Highlights
Strategic Overview Al Monaco President & CEO Highlights 2019 DCF guidance $4.30 - $4.60 per share 2019 dividend increase 10% DCF/share and DPS CAGR through 2020 10% Newly secured projects $1.8B Annual DCF/share growth rate post-2020 5-7% • Contract proposal Liquids Pipelines Mainline • Throughput op
Slide 8: Enbridge Transformation
Enbridge Transformation 2016 2018 EBITDA $6.9B $12.5B EBITDA by Business 20% 45% Natural Gas Natural Gas Total Assets by Geography 50% 60% U.S. U.S. Delivering North America’s Energy 25% 22% 2 Bcf/d of North America’s of North America’s of gas distributed in Crude Oil Natural Gas Ontario Transported
Slide 9: Major 2018 Accomplishments
Major 2018 Accomplishments Priorities Actions 1. Deliver cash flow & dividend growth • Strong financial and operating performance • $7B projects brought into service 2. Move to pure regulated model • $7.8B of non-core asset sales 3. Accelerate de-leveraging • 4.7x Debt-to-EBITDA; DRIP suspended • On
Slide 10: Longevity of Energy Infrastructure
Longevity of Energy Infrastructure Crude Oil (MMb/d) Natural Gas (Bcf/d) Global Demand Global Demand 522 106 93 352 2016 2040 2016 2040 N. America Demand & Supply N. America Demand & Supply 25 128 22 113 20 19 95 93 Demand Supply 2016 2040 2016 2040 North America well-positioned to meet global deman
Slide 11: Gas Transmission – Strategic Growth Prospects
Gas Transmission – Strategic Growth Prospects • Premier demand-pull driven asset base serving key regional markets • Positioned for significant growth in 4 key regions 1-2% • Rate cases per year base business • System modernization growth post-2020 • T-South expansion $3B • T-North expansions Secure
Slide 12: Liquids Pipelines – Strategic Growth Prospects
Liquids Pipelines – Strategic Growth Prospects • Critical link from WCSB to premium Midwest and USGC refining markets • Leverage existing footprint to expand crude export capacity and develop integrated USGC platform • Mainline toll framework 2-3% • Throughput optimization per year base business • T
Slide 13: Capital Available to Invest - 2020 & Beyond
Capital Available to Invest - 2020 & Beyond $12 Dividends Maintenance $6 Capital Debt $5-6B Capacity ~$3.5B $0 Cash Flow from Free Cash Flow Available Capital Operations In 2020 and beyond, Enbridge will generate $5-6B annually for reinvestment 13 Capital Allocation Framework Organic Debt Share Divi
Slide 14: Capital Allocation Priorities
Capital Allocation Priorities Current Options Rank Rationale Guideposts for Action Organic Attractive opportunities • Availability of core low risk projects Growth High Protects base, advances strategy • Accretive to value and DCF/share Debt Preserves optionality • Emerging opportunities justi
Slide 15: Focus on Energy Sustainability
Focus on Energy Sustainability GDP vs Energy Demand Growth* 2.0 • Energy demand growth decoupled Global GDP 1.6 from GDP 1.2 Energy CO2 • Reduced emissions to below 0.8 Demand 1992 levels (U.S.) 0.4 0.0 2000 2002 2004 2006 2008 2010 2012 2014 2016 • Oilsands lowered intensity by 21% • Demand managem
Slide 16: Enbridge’s Value Proposition
Enbridge’s Value Proposition • Leading energy infrastructure position • Low-risk pure regulated business model • Strong investment grade credit profile • 10% DCF and dividend through 2020 • 5-7% DCF growth beyond 2020 Long-life attractive growing yield with lowest risk profile in the sector 19 Q&A E
Slide 17: Gas Transmission & Midstream
Gas Transmission & Midstream Bill Yardley President & EVP, Gas Transmission & Midstream Premier Gas Transmission Footprint Our asset Canadian Gas footprint is Transmission unparalleled & provides a solid base for growth 2018 Accomplishments • Placed 11 projects into service valued at ~$6B, including
Slide 18: Natural Gas Demand is Growing & Diversified
Natural Gas Demand is Growing & Diversified N. Gas Demand Growth by Region (Bcf/d increases by 2035) N. Gas Demand by Sector (N. America, Bcf/d) LNG Exports W. Canada +2.5 E. Canada +0.6 Mexico Exports Other Northeast Power Gen West Coast Rockies +3.1 +0.4 +1.3 Midwest +2.8 Industrial South +3.5 Res
Slide 19: Gas Transmission – Strategic Priorities
Gas Transmission – Strategic Priorities Optimize the Execute Grow the Business Base Business Secured Projects • Leverage premier gas • Follow on successful • Traditional markets: transmission assets project execution record Northeast, TETLP, Alliance, from 2018 Gulf Coast/Southeast • Implement rate
Slide 20: Optimizing the Base – Rate Base Growth
Optimizing the Base – Rate Base Growth Key Drivers: • Growth in system net plant value • Realignment of the depreciation rate/ negative salvage Texas Eastern BC Pipeline • System maintenance and modernization increases in the U.S. and Canada East Tennessee Algonquin Rate base growth drives 1-2% DCF
Slide 21: Well-positioned for Future Growth
Well-positioned for Future Growth Western Canada Our assets have the first & last mile advantage Northeast & New England $2-3B per year in opportunities post 2020 Gulf Coast Markets Southeast Markets 9 Northeast & New England Northeast / New England • Continued commercial / residential load growth •
Slide 22: Southeast Markets
Southeast Markets Southeast Markets GA • Generating capacity in Florida is expected MS to grow by 15+% by 2026 AL • Majority of this growth is projected to be Power Generation natural gas-fired generation Opportunities FL NOLA ORLANDO TAMPA $1-2B in opportunities Continued growth in natural gas fire
Slide 23: Western Canada
Western Canada Western Canada T-North • Growing supply presents many Montney / Duvernay infrastructure opportunities to support Expansions Montney and Duvernay: − Pipeline expansions: T-North, T-South, AB Alliance BC − NGL infrastructure solutions − Greenfield LNG T-South Transmission Opportunities
Slide 24: Q&A
Q&A CENBRIDGE Enbridge Investor Day 22
Slide 25: Utilities: Our Premium Utility
Utilities Cynthia Hansen Executive Vice President, Utilities and Power Operations Our Premium Utility Combined Rate Base Growth (C$,B) Tier 1 North American Gas Utility 12 10 • Largest volume and fastest growing franchise 8 Union Gas – 12+ million people and businesses 6 – 3.7 million meters 4 – 50,
Slide 26: Utilities - Strategic Priorities
Utilities - Strategic Priorities Optimize the Execute Grow the Business Base Business Secured Projects • Focus on operational • Deliver near-term in- • Secure future in-franchise efficiencies and capture franchise rate base growth growth and expand to new synergies from communities amalgamation • Ex
Slide 27: Amalgamation Benefits
Amalgamation Benefits Low risk earnings growth Utility ROE 10% • Benefits accrue immediately to Enbridge Expected Amalgamation activities underway range of Actual ROE • Integration has already commenced 9% • Common enterprise platforms ~9% Allowed ROE Major synergy capture areas • Operations & work
Slide 28: Expansion of Dawn Hub and Transmission
Expansion of Dawn Hub and Transmission Successful track record of phased growth MONTREAL of transmission system ON VT • 3 year 1.2 Bcf expansion delivered on time/budget NH • New 2021/22 Expansion Open Season positively received by Ontario and US NE markets TORONTO NY DAWN HUB Market leader in stora
Slide 29: Utilities - Summary
Utilities - Summary • Largest and fastest growing gas utility franchise in North America • Steady annual growth opportunities through new customer additions and system expansions • Amalgamation synergies 1-2% • Cost management per year base business • Revenue escalators growth post-2020 • Storage &
Slide 30: Liquids Pipelines
Liquids Pipelines Guy Jarvis President & EVP, Liquids Pipelines Excellent Foundation for Continued Growth Transports Transports ~2/3rds ~25% of all crude oil of Canadian produced in crude exports N. America • Connected to 9 MMbpd of downstream refining capacity • Well positioned to expand USGC expor
Slide 31: WCSB Fundamentals
WCSB Fundamentals Producers Focusing on Cost WCSB Oil Supply (kbpd) Efficiency and Technology 6,000 CAPP 2018 Supply Forecast 5,000 >1 4,000 MMb/d Growth by 2035 3,000 Oil sands heavy 2,000 Upgraded light 1,000 Conventional - 2015 2020 2025 2030 2035 Supply is expected to grow sustainably with deplo
Slide 32: Liquids Pipeline - Strategic Priorities
Liquids Pipeline - Strategic Priorities Optimize the Execute Grow the Business Base Business Secured Projects • Execute Mainline system • Place Line 3 replacement • Continued Mainline optimizations into service 2H 2019 optimization − 2019 optimizations • Place Southern Access • Expand the Market Acc
Slide 33: Mainline Positioning & Competitiveness
Mainline Positioning & Competitiveness Strong Demand from Premium Markets WCSB Capacity Dispatch (kbpd) 6,000 3rd Party Spot CAPP 2018 1.9 mmbpd 5,000 Sole sourced supply 4,000 Enbridge Mainline 3,000 2,000 TMX KXL Contracted Capacity 1,000 >1.1 mmbpd Downstream take-or-pay - Western Canada Demand c
Slide 34: Mainline Tolling Approach - Overview of offering
Mainline Tolling Approach - Overview of offering Key Features of Offering Next steps • Priority Access for contracted volume • Finalize commercial framework • Contract term up to 20 years • Submit regulatory applications • Contracts tailored to shipper type • Effective mid-2021 • Toll discounts for
Slide 35: Line 3 Replacement
Line 3 Replacement • Canadian construction program well underway – over 80% of pipeline laid Edmonton – Expected completion – July 1, 2019 Hardisty 370 kbpd • Wisconsin segment complete and in-service Kerrobert • Regulatory and permitting activities Regina In service progressing well in Minnesota se
Slide 36: Mainline Optimizations 2020
Mainline Optimizations 2020 Bakken Pipeline (BPEP) Idle Edmonton • Idle pipeline to free up the remaining capacity for WCSB egress Hardisty Kerrobert 200 System Optimization kbpd • Crude slates/DRA Regina Cromer Line 4 Restoration Gretna • Terminal and scheduling optimization to restore Line 4 to it
Slide 37: Additional Throughput Planned & Achievable
Additional Throughput Planned & Achievable Ex-WCSB Egress +150 +300 +370 Southern System Lights Optimizations & Reversal L3 Enhancements Replacement Capacity 2015 2018 2023 Assets allow for incremental throughput to be brought on line for an industry solution 15 Market Access - Potential Growth • Ma
Slide 38: Express Pipeline – Potential Growth
Express Pipeline – Potential Growth • DRA/Pump station program expected to increase capacity up to 60kbpd Hardisty • Potential ISD – Late 2019 60 • Range of market access options kbpd – Increased local demand – Wood River Express – Cushing PADD IV $0.2B – Rail markets in opportunities Platte Wood Ri
Slide 39: Regional Pipelines – Potential Growth
Regional Pipelines – Potential Growth BAKKEN DAPL $1.0B in opportunities Patoka • Oil sands development will continue to drive need for • Growing Bakken production will drive the need for regional infrastructure to support growth additional pipeline solutions • Trunkline expansion potential – Athaba
Slide 40: USGC - Secured Growth
USGC - Secured Growth Gray Oak Pipeline • 22.8% joint venture interest • Partners include P66 and Marathon • Crude oil transportation from the Permian and PERMIAN Eagle Ford basins to destinations in Corpus Christi and Freeport • Capacity of 900,000 barrels per day with strong Gray Oak customer comm
Slide 41: Base Business Post-2020 Growth Opportunities
Base Business Post-2020 Growth Opportunities • Productivity Efficiencies • Power management • Index tolls Toll Escalators • CTS toll escalation • Mainline Throughput Optimization • Alberta Regional assets • Market Access pipelines • Toll certainty underpins Mainline Toll Framework optimization effor
Slide 42: Q&A
Q&A ENBRIDGE Enbridge Investor Day 40
Slide 43: Corporate Finance: 2018 Recap
Corporate Finance John Whelen Executive VP & Chief Financial Officer 2018 Recap Long-term Capital Raising Asset Sales – ~$8.3B since December 1, 2017 – $7.8B of asset sales announced in 2018; – $5.7B closed to date Business Risk Reduction Leverage Reduction – Sale of G&P businesses – Ahead of 2018 D
Slide 44: Looking Forward – 2019 and Beyond
Looking Forward – 2019 and Beyond Enduring Finance Priorities Current Implementation Focus • Financial strength and flexibility • Self funding of secured capital program • Access to low cost of capital • Strong investment grade ratings • Managing controllable risks • Proactive hedging of market pric
Slide 45: Our Low Risk Business Model
Our Low Risk Business Model Hedging Controllable Risks Consolidated Cash Flow at Risk1 2019 Consolidated FX Hedge Position4 0% 20% 40% 60% 80% 100% FX - Cash Flow Basis ~60% FX - Earnings Basis ~85% 2019 Consolidated Debt Position <2% Fixed Fixed RateTotal Rate/ TotalDebt Debt3 ~95% Cash flow at ris
Slide 46: Financial Strength & Flexibility
Financial Strength & Flexibility Consolidated DEBT to EBITDA1 Enbridge Inc. Sr. Unsecured Debt Ratings2 BBB+ 7.0x 6.0x Standard & Poors stable 2018 Target ≤ 5.0x 5.0x 4.0x Fitch BBB+ stable 3.0x 2.0x DBRS BBB High stable 1.0x 0.0x 2014 2015 2016 2017 2018e Moody’s Baa3 positive Consolidated Cap Ex (
Slide 47: Simplification and Optimization
Simplification and Optimization Debt Funding Structure and Strategy After Proposed • Discontinuation of issuance by intermediate Sponsored Vehicle Buy-ins* HoldCos - EIF, SEP, EEP, Westcoast, SE Capital • Enbridge Income Fund exchange of senior term notes • Cross guarantees of Enbridge Inc. senior t
Slide 48: Enterprise-wide Secured Growth Project Inventory
Enterprise-wide Secured Growth Project Inventory Project Expected ISD Capital ($B) Project Expected ISD Capital ($B) High Pine In service 0.4 CAD Stratton Ridge 1H19 0.2 USD Stampede Lateral In service 0.2 USD Hohe See Wind & Expansion – Germany 2H19 1.1 CAD Wyndwood In service 0.2 CAD AOC Lateral A
Slide 49: Financial Outlook
Financial Outlook Distributable Cash Flow (DCF) Consolidated EBITDA1 ($MM, except per share amounts) 2019 Guidance 2020 Guidance ~$14,800 Adjusted EBITDA1 ~$13,000 ~$14,800 ~$12,5004 ~$13,000 Maintenance capital ~(1,200) ~(1,200) Current income taxes2 ~(400) ~(500) Financing costs ~(3,000) Distribut
Slide 50: Dimensioning Organic Growth Potential
Dimensioning Organic Growth Potential 2020 and beyond Potential Opportunity Set Capital Allocation Organic Growth Utilities Alternatives Extensions Debt repayment Expansions Expected Share repurchase Greenfield Investment Dividend policy Asset acquisitions Opportunity Asset sales Natural (probabilit
Slide 51: Longer-term Financial Outlook
Longer-term Financial Outlook • Embedded Growth: 1-2% Consolidated DCF/share – Indexed tolls – Volume ramp-up $4.85- – Efficiency gains 5.15 • Self-funded investment: 4-5% $4.15- $4.30- 4.45 4.60 $3.68 – $5-6B of capital annually 5-7% Long Term Growth Outlook 2017 2018e 2019e 2020e 2021+ Attractive
Slide 52: Q&A
Q&A CENBRIDGE Enbridge Investor Day 50
Slide 53: Concluding Remarks: Enbridge’s Value Proposition
Concluding Remarks December 11, 2018 New York City Enbridge’s Value Proposition • Leading energy infrastructure position • Low-risk pure regulated business model • Strong investment grade credit profile • 10% DCF and dividend through 2020 • 5-7% DCF growth beyond 2020 Long-life attractive growing yi
Slide 54: Q&A
Q&A CENBRIDGE Enbridge Investor Day 52
Slide 55: Enbridge contact details
Enbridge 200, 425 1st Street S.W. Calgary, Alberta, Canada T2P 3L8 www.enbridge.com Contact us: investor.relations@enbridge.com 1.800.481.2804 Enbridge Investor Day 53