Enbridge Inc. · TSX:ENB
Enbridge — Q3 2015 Earnings Presentation
23 slides from Enbridge's earnings presentation, 2015
Slide 1: 2015 Third Quarter Financial & Strategic Update
BUSINESS UNIT HEADER IMAGE GOES HERE 2015 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 Financial Highlights • Business Update • Financial Review • Outlook 3
Slide 4: Financial Highlights – Adjusted Earnings and ACFFO
Financial Highlights – Adjusted Earnings* and ACFFO* (millions) Adjusted Earnings ACFFO $2,278 $1,372 $1,165 $1,896 668 399 345 Q3 609 Q3 808 505 516 328 Q2 Q2 492 Q1 468 771 Q1 802 2014 2015 2014 2015 $/Share Q3 $0.41 $0.47 $0.73 $0.79 YTD $1.41 $1.62 $2.30 $2.70 Guidance $2.05-$2.35 $3.30-$4.00 *A
Slide 5: Focused On Customers
Focused On Customers • Opening 1.7 mmbpd of access to Liquids Pipelines Market Access Initiatives the best markets - Full path solution to USGC - Access to WCSB and Bakken crude for Quebec refiners • Stable, low cost tolls • Effective supply chain management ($400mm savings) • Capital optimization L
Slide 6: Project Execution – 2015 Projects
Project Execution – 2015 Projects $8 Billion to be completed in 2015 Estimated Cost Projects ($ Billion) Liquids Pipelines (Alberta Regional Infrastructure): AOC Hangingstone $0.2 Sunday Creek Terminal Expansion $0.2 Woodland Pipeline Expansion Liquids Pipelines (Market Access Initiatives): $0.7
Slide 7: Strategic Context For Offshore Wind
Strategic Context For Offshore Wind • Strategic priority to extend $38B and diversify growth Risked $13B - Natural Gas - Power Generation $25B • Natural extension of onshore Secured wind business - Timely entry point to the European offshore wind ACFFO/share* business • Consistent with ENB value pro
Slide 8: Offshore Wind - Fundamentals
Offshore Wind - Fundamentals EU Generation Profile 1,400 (GWs) 1,200 1,000 800 European Offshore Wind Farms 600 400 200 0 2014 Retirements Additions 2025 Renewables Gas Oil Coal Nuclear EU Offshore Capacity Growth 30 +20 (GWs) 25 20 2020 15 2014 +7 10 +6 5 +2 +2 +1 +1 0 Source: IEA 8
Slide 9: Offshore Wind – Value Proposition
Offshore Wind – Value Proposition • Similar to onshore wind - Proven technology • Strong commercial underpinning - Long term PPAs - Established power markets - Stable political environment, currency • Manageable capital cost risk Proven Technology - Well developed supply chain - Fixed price contract
Slide 10: Rampion Offshore Wind Project – U.K.
Rampion Offshore Wind Project – U.K. Project Details Capacity: 400MW Ownership: 24.9% Investment: $750mm (£370mm) Partners: E.ON (50.1%) Green Investment Bank (25%) Developer & E.ON (25 year O&M contract) Operator: Commercial 15 year PPA (100% of volume) Underpinning: • 20 year Renewable Obligation
Slide 11: Sponsored Vehicles Update
Sponsored Vehicles Update Enbridge Income Fund Holdings (ENF) Enbridge Energy Partners (EEP) • $30.4B drop down • US$1.6B debt issuance completed September 1st completed October 6 • $0.7B equity issuance • Selective drop down announced October 13th1 strategy of $0.5B/year2 announced in October • $1B
Slide 12: Q3 Segmented Adjusted Earnings Variance
Q3 Segmented Adjusted Earnings* Variance Q3 2015 Q3 2015 Adjusted Earnings ($ Millions) Before Drop Downs Q3 2014 As Reported Liquids Pipelines 299 221 195 Gas Distribution 1 (9) 1 Gas Pipelines, Processing (6) 20 (21) & Energy Services Sponsored Investments 120 126 224 Corporate (6) (13) - Incremen
Slide 13: Q3 ACFFO Variance
Q3 ACFFO* Variance ACFFO ($ Millions) Q3 2015 Q3 2014 Variance Operating Cash Flow $1,092 $1,056 +36 Maintenance Capital (204) (259) +55 Preferred Dividends (72) (63) (9) Distributions to NCI (204) (153) (51) Other 56 28 28 2015 ACFFO $668 $609 +59 *Available cash flow from operations (ACFFO) is a n
Slide 14: 2015 Guidance Outlook
2015 Guidance Outlook • ACFFO on track, adjusted EPS trending to lower half $4.00 of range $3.30 • Lower than expected $2.35 results from Line 9 and Aux $2.05 Sable • Volume disruptions in October offset FX and cost management tailwinds Adjusted EPS ACFFO/share *Adjusted earnings is a non-GAAP measu
Slide 15: Financing Flexibility
Financing Flexibility Funding to Date Consolidated Liquidity ($ millions, nominal) ($ billions) Debt Funding $20B Enbridge Gas Distribution 570 $9B Enbridge Pipelines Inc. 1,000 available EEP 1,600 liquidity Equity Funding ENB DRIP 480 EEQ PIK 120 Cash EEP Class A Common Units 300 Unutilized Bank Li
Slide 16: ENF/Fund Q3 Results
ENF/Fund Q3 Results 10% DPS increase September 1; 10% DPS growth outlook through 2019 $ Millions except per share amounts Q3 2015 Q3 2014 Fund Group ACFFO $200 $64 Distributions paid to Enbridge (129) (33) Cash retained (38) (8) Distributions paid to ENF 33 23 ENF (expenses)/recovery 3 (1) ENF Earni
Slide 17: Five Year Growth Outlook
Five Year Growth Outlook $38B capital program drives robust and transparent EPS, ACFFO, and DPS growth through 2019 Adjusted EPS* ACFFO* DPS 11%-13% CAGR 15%-18% CAGR 14%-16% CAGR $ / share $3.02 $1.90 $1.86 2014 2019 2014 2019 2015 2019 *Adjusted earnings and ACFFO are non-GAAP measures. For more i
Slide 18: New Growth Opportunities
New Growth Opportunities Liquids Pipelines • Low-cost mainline expansion programs • Market access expansions/extensions • USGC regional infrastructure Gas Distribution • Retail, commercial, and industrial load growth • System renewal and expansion • Storage and transportation Gas Pipelines & Process
Slide 19: Key Takeaways
Key Takeaways • Strong Q3 and YTD results; on track to achieve full year adjusted EPS and ACFFO guidance ranges • Focused on customers • Solid progress on project execution • Executing sponsored vehicle strategy • Robust five-year plan supports highly transparent growth outlook through 2019 - 15-18%
Slide 20: Question & Answer Period
BUSINESS UNIT HEADER IMAGE GOES HERE Question & Answer Period
Slide 21: Supplemental Slides
BUSINESS UNIT HEADER IMAGE GOES HERE Supplemental Slides
Slide 22: Adjusted Earnings Drop Down Reconciliation – Q3 2015 absolute
Adjusted Earnings Drop Down Reconciliation – Q3 2015 absolute Impact of Impact of Before Canadian Southern Lights / Adjusted Earnings ($ Millions) drop downs Restructuring Alliance US As reported Liquids Pipelines 299 (93) (11) 195 Gas Distribution 1 - - 1 Gas Pipelines, Processing & (6) (1) (14) (2
Slide 23: Adjusted Earnings Drop Down Reconciliation – Q3 2015 variance to Q3 2014
Adjusted Earnings Drop Down Reconciliation – Q3 2015 variance to Q3 2014 Impact of Impact of Before Canadian Southern Lights / Adjusted Earnings ($ Millions) drop downs Restructuring Alliance US As reported 2014 Adjusted Earnings* $345 $345 Liquids Pipelines +78 (93) (11) (26) Gas Distribution +10 -