Enbridge Inc. · TSX:ENB
Enbridge — Investor Presentation (September 2018)
38 slides from Enbridge's investor presentation, September 2018
Slide 1: Investment Community Presentation September 2018
Enbridge Inc. Investment Community Presentation September 2018
Slide 2: Legal Notice
Legal Notice Forward Looking Information This presentation includes certain forward looking statements and information (FLI) to provide potential investors, shareholders and unitholders of Enbridge Inc. (Enbridge or the Company), Enbridge Income Fund Holdings Inc. (ENF), Enbridge Energy Partners, L.
Slide 3: North America's Leading Energy Infrastructure Company
North America’s Leading Energy Infrastructure Company 2018 EBITDA Outlook • Spectra Energy acquisition transitioned by business unit Gas Utilities Enbridge into a diversified liquids and Power natural gas infrastructure company ~$12.5B Liquids • Premium portfolio of strategically positioned Gas Tran
Slide 4: Executing on our 2018-2020 Strategic Priorities
Executing on our 2018-2020 Strategic Priorities Priorities YTD Actions 1. Move to pure regulated pipelines/ utility model $7.5B of non-core asset sales announced; original target $3B for 2018 2. Accelerate de-leveraging • On track for 5.0x Debt-to-EBITDA by YE 2018 • Incremental asset sales provide
Slide 5: $7.5B of Non-Core Asset Sales
Strategic Priority #1: Move to Pure Regulated Pipeline & Utility Model $7.5B of Non-Core Asset Sales Midcoast G&P Business Renewables Power Assets Canadian G&P Business 100% interest in Texas and 49% interest in all onshore Canadian, select 100% interest in all Oklahoma G&P assets onshore US, and th
Slide 6: Funding Plan Execution
Strategic Priority #2: Accelerate De-leveraging Funding Plan Execution 2018 – 2020 Funding Plan1($C billions) Financing Flexibility $35 Optional: • More than sufficient capital raised to Increased • 2019 & 2020 DRIP $30 Financing • Hybrid securities fund current secured funding • Asset sales Flexibi
Slide 7: Strengthening Credit Metrics
Strategic Priority #2: Accelerate De-leveraging Strengthening Credit Metrics Consolidated Debt to EBITDA Outlook1 8.0x • Strengthening credit metrics as industry leading growth capital 6.0x spend moderates and new Long Term Target: ≤ 5.0x projects generate significant EBITDA 4.0x • Achieve long-term
Slide 8: Core Businesses Stable Through Commodity Cycles
Strategic Priority #3: Deliver Reliable Cash Flow & Dividend Growth Core Businesses Stable Through Commodity Cycles Pro-forma Historical EBITDA*(C $ Million) • Stable and predictable cash flow $3,000 • High asset utilization rates • Substantially underpinned by long- term commercial agreements $2,00
Slide 9: Record Financial Performance in first half 2018
Strategic Priority #3: Deliver Reliable Cash Flow & Dividend Growth Record Financial Performance in first half 2018 Historical DCF/share Historical EPS • DCF/share and EPS growth trend resuming in 2018 after temporary dilution from financing Spectra Energy acquisition • Record level of DCF/share and
Slide 10: Line 3 Replacement Project Update
Strategic Priority #3: Deliver Reliable Cash Flow & Dividend Growth Line 3 Replacement Project Update Critical $9B infrastructure replacement project • Canadian construction program well underway – > 400 km of pipeline now laid • Wisconsin segment complete and in-service – ~13 mile segment • Minneso
Slide 11: Enterprise-wide Secured Growth Project Inventory
Strategic Priority #3: Deliver Reliable Cash Flow & Dividend Growth Enterprise-wide Secured Growth Project Inventory Capital Capital Project Expected ISD ($B) Project Expected ISD ($B) High Pine In service 0.4 CAD Stratton Ridge 1H19 0.2 USD Stampede Lateral In service 0.2 USD PennEast 2H19 0.3 USD
Slide 12: 2018 EBITDA and DCF/share Growth Guidance
Strategic Priority #3: Deliver Reliable Cash Flow & Dividend Growth 2018 EBITDA and DCF/share Growth Guidance Consolidated EBITDA Outlook ($MM) 2018 DCF/share Outlook $4.15 - $4.45 ~$12,500 $3.68 $10,317 $3.68 $2.47 $6,571 Q2 Q2 YTD YTD 2017a 2018e 2017a 2018e Strong year to date performance should
Slide 13: Dividend Growth Outlook
Strategic Priority #3: Deliver Reliable Cash Flow & Dividend Growth Dividend Growth Outlook • 22 years of sustained dividend increases 10% • 10% dividend growth in 2018 3 Year CAGR • 10% 3-year CAGR, 2018-2020 • Conservative payout ratio of below 65% 11% 22 Year CAGR (1996-2017) 1996 2017 Long histo
Slide 14: Definitive agreements reached with Sponsored Vehicles
Strategic Priority #4: Streamline the Business Definitive agreements reached with Sponsored Vehicles Benefits for ENB Shareholders Current Potential Simplifies corporate & capital structure Structure* Future Structure Increased ownership of core strategic assets Higher retention of cash flow TSX: EN
Slide 15: Simplification Transactions - Targeted Timelines
Strategic Priority #4: Streamline the Business Simplification Transactions - Targeted Timelines Prepare & File SEC Review & Written Consent Transaction Draft Registration Statement (S-4) Effectiveness of S-4 Process Closing Prepare & File SEC Review & Obtain Distribution of Proxy Transaction Draft R
Slide 16: Key Terms of the Restructuring
Strategic Priority #4: Streamline the Business Key Terms of the Restructuring Final • SEP: 1.111 Enbridge common shares for each common unit of SEP, which represents a 9.8% increase to the exchange Consideration ratio offered on May 17, 2018 • EEP: 0.3350 Enbridge common shares for each Class A comm
Slide 17: Post-2020 Growth Potential
Strategic Priority #5: Extend Growth Beyond 2020 Post-2020 Growth Potential Liquids Gas Offshore Capital Allocation Considerations Pipelines & Transmission Gas Utilities Renewables Terminals & Storage • Competitive advantage • Organic growth potential $5-10B $5-10B $5+B $5-10B • Must fit low-risk pi
Slide 18: Summary
Summary • 2017 was a transformational year – Spectra Energy transaction successfully diversified the business • 2018 - 2020 Strategic Plan in execution – $7.5B of non-core asset sales – Financial flexibility – Accelerate de-leveraging – Sponsored vehicle simplification agreements – Line 3 Replacemen
Slide 19: Liquids Pipelines Appendix
Liquids Pipelines Appendix ENBRIDGE
Slide 20: North America's premier crude oil infrastructure portfolio
North America’s premier crude oil infrastructure portfolio 70% Largest crude oil pipeline network in the world of total oil sands production can be transported on the Regional system to Edmonton and Hardisty • 27,600 km of pipe serving high quality producing basins 3.7mmbpd • Connected to the best r
Slide 21: Large, Stable Contributor to Enbridge EBITDA
Large, Stable Contributor to Enbridge EBITDA 2018e EBITDA 2018e LP EBITDA by Business 4% Other Highly Contracted Enbridge 4% 3% Southern Lights Bakken System Long Term Take-or-Pay Common carrier with indexed rate*; Long Term Take-or-Pay Other 4% 14% Regional Oil Sands Long Term Take-or-Pay Gas Utili
Slide 22: Canadian Oil Sands Positioned for Steady, Longer Term Growth
Canadian Oil Sands Positioned for Steady, Longer Term Growth Canadian Oil Sands Supply Forecasts* (KBPD) 6,000 NEB • Expected continued growth in the oil sands 5,000 CAPP supports Enbridge systems upstream, mainline and market access 4,000 CERI • Long term resource potential ‒ 170 billion barrels of
Slide 23: Enbridge System Likely to be at Maximum Capacity
Enbridge System Likely to be at Maximum Capacity Mainline Volume Outlook Ex-Gretna Deliveries (KBPD) • Focused on maximizing throughput and Line 3 3500 in-service operating efficiencies Alberta 2H19 Clipper • 1H18 throughput up 4% from 1H17 3000 Expansion Annual Capacity 2500 • Expect to be at or ne
Slide 24: Enbridge Mainline Expected to Remain Highly Utilized
Export capacity picture remains unclear post 2021 Enbridge Mainline Expected to Remain Highly Utilized WCSB Pipeline Utilization Scenarios Post-2021 One New Pipeline Scenario (KBPD) Two New Pipelines Scenario (KBPD) 6,000 6,000 2018 CAPP 2018 CAPP Third party uncontracted capacity Order of Capacity
Slide 25: Mainline Competitive Positioning beyond 2020
Mainline Competitive Positioning beyond 2020 • Mainline attributes: – Market reach 1.9 mmbpd – Highly competitive tolls – Operating flexibility Sole sourced supply Chicago Netback • WCSB production growth outlook remains strong Chicago Pricing* $68 Enbridge Toll** ($6) • Mainline directly connected
Slide 26: Mainline Expansion Opportunities $2-4B
Low cost, highly executable, staged expansions to match supply growth Mainline Expansion Opportunities Hardisty Incremental Capacity 2019 Capacity (KBPD) +450 kbpd Mainline System DRA Optimization +75 expansion capability BEP Idle* +100 Incremental Capacity 2019+ System Station Upgrades +100 Line 4
Slide 27: Other Development Opportunities $1-3B
Other Development Opportunities Oil Sands System DAPL Expansion Express-Platte $1-3B Hardisty in opportunities BAKKEN Express DAPL PADD IV Platte Wood River/ Patoka Patoka • Well positioned in oil sands to • Bakken supply growth could drive • Express-Platte system optimization or capture future supp
Slide 28: New Platform Development Opportunities $2-3B
New Platform Development Opportunities Permian Strategy – Gray Oak USGC Strategy Cushing PERMIAN Mt Belvieu Mt $2-3B in opportunities Belvieu Freeport Freeport Objective: Expand liquids footprint into Permian Basin Objective: Leverage expertise to expand footprint in USGC Opportunity: High drilling
Slide 29: Gas Transmission Appendix
Gas Transmission Appendix ENBRIDGE
Slide 30: Premier Gas Transmission Footprint
Premier Gas Transmission Footprint Canadian Gas Transmission & Midstream Gas Transmission Value Proposition • Unparalleled asset footprint • Safe, reliable operations • Connecting diverse supply basins with growing demand markets • Stable and predictable cash flow • No direct commodity exposure • Mi
Slide 31: Strong, Growing & Stable Contributor to Enbridge EBITDA
Strong, Growing & Stable Contributor to Enbridge EBITDA 2018e EBITDA Enbridge • Transmission business predominantly Other 4% Gas Utilities 13% Gas drives GTM earnings & Power Transmission 85% • Significant contribution to stable, fee-based Gas 32% Transmission earnings from transmission businesses &
Slide 32: Solid Gas Transmission Base
Solid Gas Transmission Base GTM Reservation Revenue (Based on revenues for 12 months ended 12/31/17) 98% 97% 99% 97% 99.5% 94% 95% 97% 94% 92% 72% Achieved Peak Delivery N/A Days in 2017 Average Contract 9 12 8 8 5 8 25 17 Life of 4 6 Terms years years years years years years years years lease years
Slide 33: N. American Natural Gas Demand Grows & Diversifies
N. American Natural Gas Demand Grows & Diversifies Natural Gas Demand Growth by Region NA Natural Gas Demand by Sector (Bcf/d increases by 2035) (Bcf/d) 140 120 LNG Exports W. Canada +3.5 E. Canada Mexico Exports +0.6 100 Other Northeast 80 W. North Central +3.5 Power Gen Pacific +2.1 +1.6 Mountain
Slide 34: Natural Gas Generation Supports Growing Demand
Natural Gas Generation Supports Growing Demand ISO-NE winter stats… natural-gas-fired generation at risk of not being able to get fuel when pipelines are constrained: Natural gas generating capacity more than 4,000MW will increase from 28% of PJM’s total generating capacity mix to 35%, slightly exce
Slide 35: Northeast & New England $1-3B
Development opportunities in next 5 years Northeast & New England Northeast / New England • Demand continues to increase • Solution needed to bring affordable gas to the region New England BOSTON Philadelphia Market Opportunities • Market opportunities for industrial Dawn Hub and exports DETROIT NYC
Slide 36: Southeast Markets $1-2B
Development opportunities in next 5 years Southeast Markets Southeast Markets • Natural gas power generation GA MS - Coal-to-gas conversions - Increase in Florida demand AL Power generation opportunities FL NOLA ORLANDO $1-2B in opportunities TAMPA Continued growth in natural gas fired power generat
Slide 37: Gulf Coast Markets $2-4B
Development opportunities in next 5 years Gulf Coast Markets Gulf Coast • Epicenter of demand for LNG and Mexico exports Permian MS Permian LA TX • DCP offers Permian solutions to producers NOLA Offshore US Gulf Coast MT BELVIEU LNG & Industrial $2-4B in opportunities Mexico Offshore Exports to Mexi
Slide 38: Western Canada $1-2B
Development opportunities in next 5 years Western Canada Western Canada Montney / Duvernay • Producers looking for egress solutions Expansions ‒ Alliance ‒ T-South AB ‒ NGL transmission opportunities BC ‒ Montney/Duvernay expansions ‒ LNG opportunities T-South Transmission Opportunities Alliance $1-