Enbridge Inc. · TSX:ENB
Enbridge — Barclays Energy Conference 2017
24 slides from Enbridge's conference presentation, Sep 6, 2017
Slide 1: Investment Community Presentation
Enbridge Inc. Investment Community Presentation Barclays Energy Conference - September 6, 2017 John Whelen, EVP & CFO
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”) with information about Enbridge and its subsidiaries and affiliates, including management’s asses
Slide 3: Enbridge – A "Must-own" Investment
Enbridge – A “Must-own” Investment 2016 Pro-forma EBIT • Leading diversified energy infrastructure position in North America Gas Transmission & Midstream Liquids • Low risk business profile with minimal volume and commodity exposure Gas Utilities Power • Organically driven secured capital program •
Slide 4: Low Risk Business Model
Low Risk Business Model Supports stable and predictable cash flows Low Risk Investment Grade Business Model Customers Stable, Predictable Results: Guidance vs Actual ($/share) 3.00 4.50 4.00 2.50 96% 93% 3.50 2.00 3.00 2.50 1.50 2.00 1.00 1.50 1.00 of cash flow underpinned of revenue from investment
Slide 5: Key Corporate Priorities
Key Corporate Priorities • 6 leading platforms • Safety & operational reliability • Focus on optimizing returns • Disciplined capital allocation • Low risk commercial models • Efficiency and effectiveness • Visible dividend growth • Balance sheet strength • Sponsored Vehicles Focused on maximizing s
Slide 6: Liquids Pipelines Businesses
Liquids Pipelines Businesses Diversified low risk asset portfolio 2016 Pro Forma LP EBIT by Business Liquids Pipelines 100% 5% Other Highly Contracted 50% 4% Southern Lights Pipeline Long Term Take or Pay 90% 5% Common carrier with 9% Bakken System indexed rate*; Long Term 80% Take or Pay 6% Regiona
Slide 7: Advancing Line 3 Replacement
Advancing Line 3 Replacement Integrity project providing increased system capacity • Beginning construction on certain segments in Line 3 Replacement Canada and Wisconsin Edmonton Hardisty • Updated capital costs of C$5.3B and US$2.9B Kerrobert – 9% increase over 2014 sanctioned costs Regina Complet
Slide 8: Gas Transmission & Midstream Businesses
Gas Transmission & Midstream Businesses Critical infrastructure connecting growing supply to key markets Gas Transmission • Connecting to key demand pull & Midstream markets: US Northeast, US 35% Southeast, US Gulf Coast • Strategic footprint located in prolific Montney and Duvernay regions • Access
Slide 9: Gas Distribution Utility Businesses
Gas Distribution Utility Businesses Key element of Enbridge’s low risk business profile ON • Largest and best situated gas distribution franchises in Canada • Highly valued asset base underpinned QC by regulated, low risk business model Union Gas with incentive upside EGD • Exceptional ongoing rate
Slide 10: Renewable Power Business
Renewable Power Business Platform aligns with Enbridge’s strategy and value proposition Renewable Power Generation Footprint (Net MWs, Operational Assets) 2,000 1,000 0 2005 2010 Current • One of the largest wind and solar power generation portfolios in Canada • Strong fundamentals • Low risk commer
Slide 11: Offshore Wind Power Generation Platform
Offshore Wind Power Generation Platform 1,000 MW low risk offshore wind capacity secured and under development Enbridge Offshore Wind Projects Capital Investment ($C, Billions) $9 Development $7.4B $6 $4.5B Secured $3 $2.9B $0 Rampion Hohe See Hohe See Expansion Saint-Nazaire Courseulles-sur-Mer Fec
Slide 12: Highly Transparent, Secured Growth Portfolio
Highly Transparent, Secured Growth Portfolio $31B of diversified low risk projects drives significant near term cash flow Project Expected ISD Capital (C$B) Project Expected ISD Capital (C$B) Regional Oil Sands Optimization, Wynwood 1H18 0.2 CAD Athabasca Twin in service 1.3 CAD Valley Crossing Pipe
Slide 13: Recently Secured Growth Projects
Recently Secured Growth Projects $3.6 billion of attractive organic expansions Hohe See Offshore Wind & Spruce Ridge: $0.5B T-South Expansion: $1.0B Expansion: $2.1B DENMARK BC Station 2 Aitkin Creek Plant BC Hohe See McMahon Hohe See Plant Expansion 112MW Station 2 T-South 497MW Hohe See AB Vancouv
Slide 14: Financial Strength
Financial Strength Prudent funding and balance sheet management Metric Long Term Target Consolidated Pro Forma Debt to EBITDA End of year Credit Ratings Strong, Investment Grade 6.9x Dividend Payout 50-60% ACFFO 6.2x 5.0x FFO / Debt ≥15% Debt / EBITDA ≤5.0x Liquidity >1x forward 12 mos. capex Floati
Slide 15: Merger Integration Update
Merger Integration Update Synergy capture on track Synergy Targets Forecast annual run rate synergies by 2019 Stream $CAD MM Supply chain optimization Cost 540 Tax Other costs Tax 260 $800Million Timing 2017 2018 2019 Cost synergy capture ~50% ~80% 100% General O&A costs Tax synergy capture 0% 0% 10
Slide 16: Long Term Dividend Growth Outlook
Long Term Dividend Growth Outlook 10-12% CAGR through 2024 Dividend / Share Outlook • 15% dividend increase in 2017 • 10-12% annual dividend growth (2017-2024) • Conservative payout ratio of 50% - 60% Dividend growth beyond 2019 supported by: $2.44 • Organic growth development projects $2.12 • Ongoi
Slide 17: Value Proposition
Value Proposition: Premium Shareholder Returns at Low Risk 22 Years of Dividend Increases +15% +14% Strong, Organic 11% +33% 22 Year CAGR Growth 1996 2017e ENB Total Shareholder Return Enbridge 17% Superior, Steady & Low Risk Growing Business 20 Year CAGR Cash Flow Model S&P 500 Energy S&P 500 1997
Slide 18: Q&A
Q&A
Slide 19: APPENDICES
APPENDICES
Slide 20: Mainline – Potential Future Expansions
Mainline – Potential Future Expansions Low cost, highly executable, staged expansions to match supply Incremental Capacity 2019 Capacity (KBPD) +500 System DRA Optimization +75 kbpd BEP Idle* +100 Incremental Capacity 2019+ Superior System Station Upgrades +100 Line 4 Capacity Restoration +75 Line 1
Slide 21: Project Execution
Project Execution Select project updates Liquids: AB Clipper (L67) Natural Gas: NEXUS Natural Gas: Valley Crossing TX Texas Eastern Nueces Valley Crossing Pipeline Brownsville Mexico • Amended EIS issued • Commercial agreements in place • Vast majority of permits received • Inter-agency consultation
Slide 22: Enterprise-Wide Funding Plan
Enterprise-Wide Funding Plan Significant funding activities in Q2 bolsters balance sheet and enhances liquidity Enbridge Financing Execution Enbridge Group Funding Requirements C$ Billion 1 YTD 2017 3 Years (2017e – 2019e) Equity Funding2 ENB Common Shares (DRIP) $0.5 Ample Alternative $10 $8 Equity
Slide 23: Financial Guidance Affirmed
Financial Guidance Affirmed Drivers of accelerated ACFFO growth through 2H17 Mainline volumes strengthen Consolidated FX hedging program 100% $1.20 Ex-Gretna (MMbpd) 80% Hedge % 75% 75% $1.15 Hedge Rate 2.6 2.4 50% $1.10 25% $1.05 0% $1.00 1Q17a 2Q17a 3Q17e 4Q17e 1H17 2H17 Cost synergies realized Pr
Slide 24: Major Canadian and U.S. Crude Oil Pipelines
MEXICO ase See, ‘Thousands of Barrels per Day seruary 207 Snnest Sousa: Enbridge Rail Terminal (@)) Enbridge Rail Terminal ‘Source: Oi & Gas Journal (OG) Se a2 Goint Gwnership) Worle Reining Suey, December 2098 Serer, ae CANADA hes : Qe UNITED STATES Race or AMERICA = Major Canadian and U.S. Crude O