Slide 1: Q2 2018: Financial Results & Business Update
Q2 2018: Financial Results & Business Update August 3, 2018 Al Monaco, Chief Executive Officer | John Whelen, Chief Financial Officer
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: Agenda
Agenda • Second quarter financial highlights • Strategic and business update • Financial results review Line 3 Replacement 3
Slide 4: Q2 2018 Consolidated Financial Results Summary
Q2 2018 Consolidated Financial Results Summary For the 3 and 6 months ended June 30, $ millions Adjusted EBITDA DCF Adjusted Earnings +23% +40% +65% Q-o-Q Q-o-Q Q-o-Q $3,165 Q2 $1,858 Q2 $1,094 Q2 $2,581 $3,406 $1,324 $662 $2,312 $1,375 Q1 Q1 Q1 $2,187 $1,215 $675 2017 2018 2017 2018 2017 2018 Q2: $
Slide 5: 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 6: Canadian G&P Asset Sale Agreement
Canadian G&P Asset Sale Agreement Western Canadian G&P Assets • Sale of 100% interest in all western Canadian gathering & processing assets to Brookfield Infrastructure • Proceeds of C$4.31B • Transaction expected to close in two phases: – Q4 2018 for BC provincially regulated assets (60%) – Mid 201
Slide 7: $7.5B of Non-Core Asset Sales
$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, 100% interest in all Oklahoma G&P assets select onshore US, and the Hohe See Western Canadian G&P assets offshore renewable assets $1.45B
Slide 8: Line Replacement Project Update
Line 3 Replacement Project Update Critical $9B infrastructure replacement project • Canadian construction program underway – 400 km of pipeline laid; construction to continue in Q3 • Wisconsin segment complete and in-service: ~13 miles • Minnesota approved issuing a Certificate of Need and selected
Slide 9: Enterprise-wide Secured Growth Project Inventory
Enterprise-wide Secured Growth Project Inventory Capital Capital Project Expected ISD ($B) Project Expected ISD ($B) High Pine In service 0.4 CAD Stratton Ridge 1H19 0.2 USD Stampede Lateral In service 0.2 USD PennEast 2H19 0.3 USD Wyndwood In service 0.2 CAD Hohe See Wind & Expansion – Germany 2H19
Slide 10: Key 2018 Project Execution Updates
Key 2018 Project Execution Updates Natural Gas: Natural Gas: NEXUS Valley Crossing Texas Eastern TX Nueces Hub Valley Crossing Pipeline Mexico NEXUS Gas Transmission Brownsville • Construction 80% complete • Construction substantially complete • Significant interest in additional market attachments
Slide 11: Utilities Amalgamation: Regulatory Update
Utilities Amalgamation: Regulatory Update Proposed Structure Timeline – 10 year incentive agreement – Fixed rate escalated at a factor of inflation – Capital tracker – Earnings sharing mechanism Leading Utility Status Franchises ON QC – Hearings completed Union Gas – OEB decision expected Q3/Q4 OTTA
Slide 12: Simplification of Corporate Structure
Simplification of Corporate Structure Benefits for ENB Shareholders Potential Current Structure* Future Structure Simplifies corporate & capital structure Direct ownership of core strategic assets Maximizes cash flow TSX: ENB TSX: ENB NYSE: ENB NYSE: ENB Enhanced credit and funding profile Financial
Slide 13: Q2 2018 Consolidated Adjusted EBITDA Performance
Q2 2018 Consolidated Adjusted EBITDA Performance Adjusted EBITDA Liquids Pipelines 2Q17 2Q18 + Higher throughput and IJT on the Mainline System (C$ Millions, except per share amounts) + Higher average rate on Canadian Mainline FX hedges 1,324 1,629 + New projects placed into service Liquids Pipeline
Slide 14: Q2 2018 Consolidated DCF Performance
Q2 2018 Consolidated DCF Performance (C$ Millions, except per share amounts) 2Q17 2Q18 Consolidated Adjusted EBITDA1 2,581 3,165 2Q18 vs. 2Q17 DCF Maintenance capital (374) (294) + Adjusted EBITDA drivers noted in previous slide Interest expense (631) (703) + Higher maintenance capital on specific L
Slide 15: 2018 DCF/share Guidance Outlook
2018 DCF/share Guidance Outlook Consolidated EBITDA Outlook ($MM) 2018 DCF/share Outlook $4.15 - $4.45 ~$12,500 $3.68 $10,317 $3.68 Q2 Q2 YTD YTD 2017a 2018e 2017a 2018e Strong year to date performance should drive full year DCF/share to the upper half of our guidance range (1) Adjusted EBITDA is a
Slide 16: Spectra Energy Partners (SEP)
Spectra Energy Partners (SEP) Financial Results FY 2018 2Q18 vs. 2Q17 DCF Analysis (US$ millions, except per unit amounts) Q2 2017 Q2 2018 Guidance + Increased earnings from expansion Ongoing EBITDA 548 574 projects placed into service - Lower capitalized interest and an Ongoing DCF 371 402 $1,630 -
Slide 17: Enbridge Energy Partners (EEP)
Enbridge Energy Partners (EEP) Financial Results FY 2018 2Q18 vs. 2Q17 DCF Analysis (US$ millions, except per unit amounts) Q2 2017 Q2 2018 Guidance - Reduction in corporate tax rates pursuant Adjusted EBITDA 397 380 to US Tax Reform & FERC elimination of tax allowance DCF 182 166 $650- $7002 + Bakk
Slide 18: ENF & Fund Group
ENF & Fund Group Financial Results FY 2018 2Q18 vs. 2Q17 Fund Group (C$ millions) Q2 2017 Q2 2018 Guidance DCF Analysis Fund Group DCF 501 678 $2,450 - 2,650* + Higher residual toll and higher throughput on Canadian Mainline Distributions Paid 402 498 + Higher FX hedge rates + Solid contribution fro
Slide 19: Funding Plan Execution
Funding Plan Execution 2018 – 2020 Funding Plan1($C billions) Financing Flexibility $35 Optional 2019 & 2020 DRIP • More than sufficient capital raised to fund current secured Increased Optional hybrid securities funding requirements $30 Financing Optional asset sales Flexibility • Additional capita
Slide 20: Second Quarter Summary
Second Quarter Summary • Strong Q2 financial results – Excellent financial and operating performance across all business units – Expect to be in top half of 2018 DCF/share guidance range of $4.15 to $4.45 /share • Delivering on key strategic priorities – $7.5B of non-core asset sales – Financial fle
Slide 21: Q&A
Q&A ENBRIDGE
Slide 22: Enbridge Income Fund Holdings Inc.
Enbridge Income Fund Holdings Inc. Second Quarter 2018 Supplemental Slides Investor Relations Nafeesa Kassam 403-266-8325 | nafeesa.kassam@enbridge.com
Slide 23: Fund Group Distributable Cash Flow
Fund Group Distributable Cash Flow (C$ Millions) 2Q17 2Q18 Liquids Pipelines 509 772 Gas Pipelines 43 54 Green Power 70 69 Eliminations and Other 14 16 Adjusted EBITDA 636 911 Cash distributions in excess of equity earnings 18 21 Maintenance capital expenditures (10) (19) Interest expense (99) (108)
Slide 24: Fund Group: Key Balance Sheet Metrics
Fund Group: Key Balance Sheet Metrics 6/30/18 Consolidated Fund Group Leverage 42.6% Consolidated Fund Group Debt/EBITDA 4.4x Enbridge Income Fund Credit Ratings(2) BBB(3)/ Baa3 / BBB (High) Enbridge Pipelines Inc. Credit Ratings(4) BBB+ / A (1) As reported, after internal adjustments for trailing t
Slide 25: Spectra Energy Partners
Spectra Energy Partners Second Quarter 2018 Supplemental Slides Investor Relations Roni Cappadonna 713-627-4778 | Roni.Cappadonna@enbridge.com
Slide 26: Spectra Energy Partners (SEP): Distributable Cash Flow
Spectra Energy Partners (SEP): Distributable Cash Flow (US$ Millions) 2Q17 2Q18 US Transmission 497 509 Liquids 65 67 Other (14) (2) Ongoing EBITDA 548 574 ADD: Earnings from equity investments (40) (71) Distributions from equity investments 40 75 Other (1) (4) LESS: Interest expense 60 85 Equity AF
Slide 27: Spectra Energy Partners: Key Balance Sheet Metrics
Spectra Energy Partners: Key Balance Sheet Metrics 6/30/18 Total Debt $8.2B Financial Covenant Metrics(1) 3.8x Debt/EBITDA Credit Ratings(2) Baa2 / BBB+ / BBB Available Liquidity $1.3B (1) Calculated in accordance with the credit agreements; max 5.0x (2) Moody’s / S&P / Fitch senior unsecured rating
Slide 28: Enbridge Energy Partners
Enbridge Energy Partners Second Quarter 2018 Supplemental Slides Investor Relations Roni Cappadonna 713-627-4778 | Roni.Cappadonna@enbridge.com
Slide 29: Enbridge Energy Partners (EEP): Distributable Cash Flow
Enbridge Energy Partners (EEP): Distributable Cash Flow (US$ Millions) 2Q17 2Q18 Liquids 393 384 Other 4 (4) Adjusted EBITDA 397 380 ADD: Distributions in excess of equity earnings (1) 3 LESS: Interest expense, net 104 93 Equity AFUDC 11 16 Income tax benefit (2) - Net income attributable to noncont
Slide 30: Enbridge Energy Partners (EEP): Key Balance Sheet Metrics
Enbridge Energy Partners (EEP): Key Balance Sheet Metrics 06/30/18 Total Debt $6.7B Financial Covenant Metrics(1) 4.5x Debt/EBITDA Credit Ratings(2) Baa3 / BBB / BBB Available Liquidity $0.9B (1) As reported, after internal adjustments for trailing 12 months (2) Moody’s / S&P / Fitch senior unsecure