Enbridge Inc. · TSX:ENB
Enbridge — Q4 2013 Earnings Presentation
25 slides from Enbridge's earnings presentation, Feb 14, 2014
Slide 1: 2013 Fourth Quarter Financial & Strategic Update
2013 Fourth Quarter Financial & Strategic Update February 14, 2014 Al Monaco President & CEO J. Richard Bird Executive Vice President, CFO and Corporate Development
Slide 2: Q4 2013 – Financial & Strategic Update
Q4 2013 – Financial & Strategic Update • Presenters: Al Monaco President & CEO J. Richard Bird Executive Vice President, CFO and Corporate Development • Question & Answer Period 2
Slide 3: 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 4: Agenda
Agenda • Highlights • Progress on Strategic Priorities • Financial Results & Funding Status • Outlook 4
Slide 5: Organization
Organization Greg Harper President, Gas Pipelines & Processing Steve Wuori Strategic Advisor, Office of the President & CEO Guy Jarvis President, Liquids Pipelines 5
Slide 6: Q4 2013 – Financial Results: Adjusted Earnings
Q4 2013 – Financial Results Adjusted Earnings* (CAD$ Millions) 362 Q4 327 Q4 278 Q3 Q3 Full Year Full Year 267 $1,434 306 Q2 $1,241 274 Q2 Q1 488 Q1 373 2012 2013 Full Year 11% EPS $1.61 $1.78 * Adjusted earnings and adjusted EPS are non-GAAP measures. For more information on non-GAAP measures pleas
Slide 7: Value Proposition
Value Proposition * Adjusted earnings and adjusted EPS are non-GAAP measures. For more information on non-GAAP measures please refer to disclosure in news release. 7
Slide 8: 1. Focus on Safety & Operational Reliability
1. Focus on Safety & Operational Reliability • Operation Risk Management Program • Continuation of Extensive Integrity Management Programs • Emphasis on Governance, Systems and Safety Culture GE Phased Array Tool (DUO) 8
Slide 9: 2. Execute the Growth Capital Program
2. Execute the Growth Capital Program 2013 MP Projects Placed Into Service Projects In-service COMPLETED: In-Service Date Massif du Sud Wind Project ($0.2B) January $3 B Seaway – Reversal/Expansion ($0.1B) January Bakken Expansion Program ($0.5B) March Completed at 2% under total budget 10 of 11 pro
Slide 10: 3. Extend and Diversify Growth
3. Extend and Diversify Growth $6 Billion in New Growth Projects Secured in 2013 $3.0 B $1.5 B $0.7 B $0.7 B Q1 Q2 Q3 Q4 • Canadian Mainline • Blackspring Ridge Wind • St. Robert Bellarmin • Wood Buffalo Extension (AB Clipper to 800 kbpd) Project Wind Project • Norlite Diluent Pipeline • U.S. Mainli
Slide 11: Recent Developments – Projects Secured
Recent Developments – Projects Secured Sunday Creek Terminal Keechi Creek Wind Project • $0.2 billion in capital • $0.2 billion in capital • In-service Q3 2015 • In-service Q1 2015 • New 350,000 barrel tank • 110 Megawatts • Located in northern Alberta • Located in Jack County, Texas 11
Slide 12: Regulatory Updates
Regulatory Updates • Northern Gateway: Recommended for Approval – NEB: Joint Review Panel with Conditions • Greater Toronto Area Project: Approved – Ontario Energy Board • Alberta Clipper Expansions: Approved in Canada – NEB/DOS Pending in United States • Edmonton to Hardisty: Recommended for Approv
Slide 13: Segmented Earnings Variance
Segmented Earnings* Variance Q4 2013 FY 2013 SEGMENT vs. vs. Q4 2012 FY 2012 ($ Millions) ($ Millions) Liquids Pipelines + 28 + 115 Gas Distribution +4 – Gas Pipelines, Processing and Energy Services - 25 + 27 Sponsored Investments + 21 + 49 Corporate +7 +2 TOTAL + 35 + 193 * Adjusted earnings are n
Slide 14: Pre-funding Impact on 2013 EPS
Pre-funding Impact on 2013 EPS Earnings Per Share (EPS) Unbudgeted Preferred Share Issuance $1.82 1.9 cents Unbudgeted Common Share Issuance 1.9 cents $1.78 - $0.00 1 NOTE: Net of resulting interest expense saving or interest income increase 14
Slide 15: Enterprise Wide Funding and Liquidity Actions
Enterprise Wide Funding and Liquidity Actions FUNDING SOURCES Full Year 2013 ($ Billions) ENB Common Equity Offering $0.6 Noverco’s Secondary Offering $0.2 ENB Preferred Shares $1.5 ENB DRIP $0.4 EEP Common Unit Offering $0.5 EEP PIK $0.1 ENF Common Share Offering $0.1 MEP Initial Equity Offering $0
Slide 16: Available Liquidity
Available Liquidity Consolidated Credit Facilities & Cash* $18.0 Cash $12.9 Billion Unutilized Available $ Billion Capacity Liquidity Facility Usage $0.0 Liquidity Position as at Year End 2013 * Includes Enbridge Inc., Enbridge Energy Partners LP, Enbridge Income Fund 16
Slide 17: 2013 – 2017 Funding Requirements
2013 – 2017 Funding Requirements Excluding Sponsored Investments ($ billions, as at February 2014) Maintenance Capital 6.6 Secured Growth Capital 23.4 Risked Growth Capital 5.2 35.2 Cash Flow Net of Dividends (14.6) Net Funding Requirement 20.6 Debt Equity Total Requirement 14.6 Total Requirement 6.
Slide 18: Cost of Equity Optimization & Flexibility
Cost of Equity Optimization & Flexibility 2013 – 2017 Remaining Requirement $2.0 Billion: $ Billions Preferred Shares $1.8 Sponsored Vehicle Drop Downs $4.0 (Including Midcoast Energy Partners) New U.S. Co-Funding Vehicle $1.0 TOTAL $6.8 ENB Public Equity ~ 18
Slide 19: 2014 Earnings Guidance Recap
2014 Earnings Guidance Recap 2014 Adjusted EPS* Guidance Range $2.04 $1.84 $1.78 2013 2014e * Adjusted earnings and adjusted EPS are non-GAAP measures. For more information on non-GAAP measures please refer to disclosure in news release. 19
Slide 20: Enterprise Wide Growth Capital In-service 2014
Enterprise Wide Growth Capital In-service 2014 $9.3 Billion In-Service in 2014 Fort McMurray Edmonton Hardisty Kerrobert Regina Cromer +270 Estimated Cost Gretna kbpd Montreal Projects ($ Billion) Liquids Pipelines (Alberta Regional Infrastructure): Superior Westover Norealis Pipeline $0.5 Surmont P
Slide 21: Enterprise Wide Growth Capital In-service 2015
Enterprise Wide Growth Capital In-service 2015 $9.1 Billion In-Service in 2015 Fort McMurray Edmonton Hardisty Kerrobert Regina Cromer Estimated Cost Gretna Projects Montreal ($ Billion) Liquids Pipelines (Alberta Regional Infrastructure): Westover Superior AOC Hangingstone $0.1 Athabasca Pipeline T
Slide 22: Enterprise Wide Growth Capital Program (By In-service Date)
Enterprise Wide* Growth Capital Program (By In-service Date) - Unsecured - Commercially Secured $35 B $36 B $36 B $7 B $10 B $17 B $29 B $26 B $18 B Enbridge Day 2012 Enbridge Day 2013 Current** (2012 – 2016) (2013 – 2017) (2013 – 2017) * Includes ENB, EEP, and ENF ** As at February 2014 22
Slide 23: Industry Leading EPS & DPS Outlook
Industry Leading EPS & DPS Outlook An Industry Leading EPS* An Industry Leading DPS Growth Outlook (but lumpy) Growth Outlook (smoother) • EPS Growth • Tilted Return • Surplus Projects Cash Flow • New Growth Platforms • Sponsored Vehicle Drop Downs 2012 2017 2012 2017 * Adjusted earnings are non-GAA
Slide 24: Summary
Summary • Strong Financial Results • Excellent Progress in the 3 Strategic Priorities 1. Safety & Operational Reliability 2. Execute the Growth Capital Program 3. Extend and Diversify Growth • ~$18 Billion Coming into Service in 2014/2015 • $36 Billion Capital Program, Drives 10-12% EPS Growth Throu
Slide 25: 2013 Fourth Quarter Financial & Strategic Update Q&A
2013 Fourth Quarter Financial & Strategic Update February 14, 2014 Q&A