Slide 1: 2014 Third Quarter Financial & Strategic Update
BUSINESS UNIT HEADER IMAGE GOES HERE 2014 Third Quarter Financial & Strategic Update Al Monaco President & CEO John Whelen Executive Vice President & CFO
Slide 2: Legal Notice
Legal Notice This presentation includes certain forward looking information (FLI) to provide Enbridge shareholders and potential investors with information about Enbridge and management’s assessment of its future plans and operations, which may not be appropriate for other purposes. FLI is typically
Slide 3: Agenda
Agenda • Third Quarter Highlights • Capital Investment Plan (2014 – 2018) • Major Projects Update • Q3 Financial Review & Funding Status • Outlook 3
Slide 4: A Proven Model for Sustainable Value Creation
A Proven Model for Sustainable Value Creation $2.00 Growing Predictable EPS/DPS • Reliable Low Risk Business Model $1.80 - Conservative commercial structures $1.60 $1.40 - Major projects execution $1.20 - Prudent financial management $1.00 - Disciplined investment process $0.80 $0.60 2008 2009 2010
Slide 5: Q3 and YTD 2014 – Adjusted Earnings
Q3 and YTD 2014 – Adjusted Earnings ($ millions) $1,165 $1,072 Q3 Q3 $345 $278 Q2 Q2 $306 $328 $488 Q1 $492 Q1 2013 2014 Year-To-Date Adjusted EPS: $1.33 $1.41 Full Year 2014 $1.84 $2.04 EPS Guidance: *Adjusted earnings is a non-GAAP measure. For more information on non-GAAP measures please refer to
Slide 6: Growth Capital Program
Growth Capital Program* • $44 billion capital program drives growth outlook - Increased opportunity set by $9 billion since 2012 - $15 billion net increase in secured capital since 2012 • Capital program drives 10-12% EPS CAGR through 2018 $Billions $44 $35 $36 $11 $10 $17 5-Year Program 75% Secured
Slide 7: Project Execution Update – Completed Projects
Project Execution Update – Completed Projects $9.7 Billion in-service in 2014 Norealis Pipeline Pipestone & Sexsmith Mainline Lac Alfred & Expansions Massif-du-Sud Blackspring Ridge Estimated Cost Projects ($ Billion) Liquids Pipelines (Alberta Regional Infrastructure): Line 6B Norealis Pipeline $0.
Slide 8: Project Execution – Line 9
Project Execution – Line 9 Line 9 Reversal & Expansion • Program: Eastern Access • Cost: $0.7 billion • Scope: Reversal and Expansion to 300kbpd • Status: - NEB approval in March 2014 (subject to 30 conditions) - Mechanically complete Oct. 15 - Responded to NEB request for additional information - I
Slide 9: Executing the Growth Capital Program
Executing the Growth Capital Program Project management is a core competency Executed Projects Projects in Execution 2008-Q3 2014 Q4 2014 - 2017 $20B $27B 33 of 39 projects under or on schedule 23 of 27 projects under or on schedule completed at <5% under budget <1% over budget
Slide 10: Operational Reliability Report
Operational Reliability Report Moving towards industry leadership 10
Slide 11: Sponsored Vehicles Strategy Update
Sponsored Vehicles Strategy Update Positioned to provide low cost funding and enhance value ($24B Drop Down Inventory) 140% ENF Relative Price Performance Enbridge Income Fund (ENF) 130% Date Yield • $1.8B drop down expands historical pace 120% 1/1/2013 5.2% 10/31/2014 4.6% • Releases capital, accre
Slide 12: Adjusted Earnings
Q3 Segmented Adjusted Earnings* Variance 400 Sponsored Gas Distribution Investments 350 + $40 $345 + $20 + $7 300 $278 Corporate - $34 Adjusted Earnings* 250 + $34 Gas Pipelines, Liquids Processing & $ millions 200 Pipelines Energy Services 150 100 50 0 Q3 2013 Q3 2014 *Adjusted earnings is a non-GA
Slide 13: Full Year 2014 Adjusted EPS Guidance Outlook
Full Year 2014 Adjusted EPS* Guidance Outlook Headwinds $2.04 Energy Services Equity prefunding $1.84 Tailwinds Liquids Pipelines - Line 9B delay 2014 Guidance Range *Adjusted earnings is a non-GAAP measure. For more information on non-GAAP measures please refer to disclosure in MD&A.. 13
Slide 14: Market Price Risk Mitigation
Market Price Risk Mitigation Market price exposure continues to be substantially hedged Average Hedged Rate USD 77% 1.06 CAD/USD Floating 1.47% Rate Debt 69% CDOR/LIBOR Term Debt 3.56% Issuance 88% GOC/UST 0% Exposure (2014 – 2018): % Hedged 100% 14
Slide 15: Enterprise Wide Funding & Liquidity
Enterprise Wide Funding & Liquidity $ Billions (nominal) Enterprise Wide Funding Available Liquidity 20 20 $18 Cash 15 Sponsored Vehicles 15 ENB Equity & DRIP Unutilized ENB Preferred Shares $11 Billion Capacity ENB Debt* & Credit Facilities Available 10 10 $0.8 $0.8 $1.4 5 $8.6 Billion 5 Facility U
Slide 16: Funding Plan (2014-2018)
Funding Plan (2014-2018) Financing requirements remain very manageable $ Billions Maintenance & Integrity Capital 5.0 Secured Growth Capital 22.9 Risked Growth Capital 9.4 37.3 Cash Flow Net of Dividends (15.4) Net Funding Requirement* 21.9 Debt Equity Total Requirement 15.7 Total Requirement 6.2 20
Slide 17: Cost of Equity Optimization and Flexibility
Cost of Equity Optimization and Flexibility Alternative sources of equity exceed $1.9 billion of current common equity requirements Alternative Sources Preferred Shares $1.5B Asset Monetization/Sponsored Vehicle Drop Downs $3.0B Total $4.5B ENB Public Equity ~ 17
Slide 18: Continued Earnings Growth
Continued Earnings Growth $8.3 Billion in-service in 2015 Estimated Cost Projects ($ Billion) Liquids Pipelines (Alberta Regional Infrastructure): AOC Hangingstone $0.2 Sunday Creek Terminal Expansion $0.2 Woodland Pipeline Expansion $0.6 Liquids Pipelines (Market Access Initiatives): Western USGC A
Slide 19: Adjusted Earnings Growth
Adjusted Earnings* Growth • 10-12% average annual EPS growth through 2018 - Highly transparent growth outlook • Several sources of post 2018 growth • $20 billion of Tilted Return Projects • Natural Gas • New Growth Platforms • Sponsored Vehicle Drop Downs • Liquids Pipelines • Liquids Pipelines • $4
Slide 20: Dividend Payout Considerations
Dividend Payout Considerations • High organic growth capital program • Rising internal free cash flow • Progress on equity prefunding • Robustness of equity funding options (sponsored vehicles) 20
Slide 21: Substantial Dividend Growth
Substantial Dividend Growth • EPS Growth • Surplus Cash Flow 2013 2018 21
Slide 22: Question & Answer Period
BUSINESS UNIT HEADER IMAGE GOES HERE Question & Answer Period 22