Enbridge Inc. · TSX:ENB
Enbridge — Q2 2015 Earnings Presentation
22 slides from Enbridge's earnings presentation, 2015
Slide 1: 2015 Second Quarter Financial & Strategic Update
BUSINESS UNIT HEADER IMAGE GOES HERE 2015 Second Quarter Financial & Strategic Update Al Monaco President & CEO John Whelen Executive Vice President & CFO Guy Jarvis President Liquids Pipelines
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 • Second Quarter Highlights • Financial Review • Financial Optimization Update • Business Update & Outlook 3
Slide 4: Importance of ACFFO to Enbridge
Importance of ACFFO* to Enbridge • Available Cash Flow From Operations (ACFFO) - Increases transparency into Enbridge’s cash flow generating capability - Facilitates comparisons with peers • 18% ACFFO CAGR (2014-2018) - Superior dividend growth (14-16% annually) - Strong cash flow dividend coverage
Slide 5: Financial Highlights – Adjusted Earnings and ACFFO
Financial Highlights – Adjusted Earnings* and ACFFO* (millions) Adjusted Earnings ACFFO $1,610 $1,287 Q2 808 $973 516 $820 505 328 Q2 771 Q1 802 492 Q1 468 2014 2015 2014 2015 $/Share Q2 $0.40 $0.60 $0.63 $0.96 YTD $1.00 $1.15 $1.57 $1.91 *Available cash flow from operations (ACFFO) and adjusted ear
Slide 6: Q2 Segmented Adjusted Earnings Variance
Q2 Segmented Adjusted Earnings* Variance $ Millions Adjusted Earnings Q2 2014 Adjusted Earnings* $328 Liquids Pipelines +20 Gas Distribution +30 Gas Pipelines, Processing & Energy Services +47 Sponsored Investments +43 Corporate +37 Total Variance +177 2015 Adjusted Earnings* $505 *Adjusted earnings
Slide 7: 2015 ACFFO Variance
2015 ACFFO* Variance $ Millions Q2 2014 ACFFO $516 Operating Cash Flow +317 Maintenance Capital +55 Preferred Dividends (14) Distributions to NCI (43) Change in Non-Recurring Items (23) Total Variance +292 2015 ACFFO $808 *Available cash flow from operations (ACFFO) is a non-GAAP measure. For more i
Slide 8: 2015e Adjusted EPS Guidance Outlook
2015e Adjusted EPS* Guidance Outlook 2015 Guidance Unchanged Headwinds $2.35 Line 9 Aux Sable $2.05 Tailwinds Energy Services FX, Financing Costs Cost Management 2015 Guidance Range *Adjusted earnings is a non-GAAP measure. For more information on non-GAAP measures please refer to disclosure in MD&A
Slide 9: ACFFO Outlook/Guidance
ACFFO* Outlook/Guidance 2015 ACFFO Guidance highlights significant growth over 2014 and strong dividend coverage 2015 Growth Drivers Growth Capital Projects In Service +++ $4.00/share Mainline Capacity and Toll Increases ++ $3.30/share Reduced maintenance capital ++ $3.02/share 2.5x Dividend Coverag
Slide 10: Financing Flexibility
Financing Flexibility • Strong investment grade credit ratings $ Billions - ‘Stable’ after recent $20 rating actions 20 $18 Cash • Diversified sources of Unutilized $9 Billion funding 15 Capacity Available - Multiple issuers - Multiple markets 10 • Disciplined hedging Facility - Underlying rates are
Slide 11: Financial Optimization Update – Canadian Liquids Business
Financial Optimization Update – Canadian Liquids Business Sets the stage for extended growth ❶Accelerate DPS ❷ Enhanced ❸ Transform ENF ❹ Extend ENB growth growth funding cost beyond 2018 competitiveness On track to close Q3 2015 Dec 3rd Financial Independent Special March 31st June 19th July 20th A
Slide 12: Growth Capital Program (2014 – 2018)
Growth Capital Program* (2014 – 2018) $ Billions $44 Risked $34B commercially secured by in service date unsecured $10 2014 $9.8 2015 $8.7 2016 $0.9 Commercially secured $34 2017 $14.2 In service 2018 $0.4 In execution * Enterprise wide program, includes EEP, ENF & MEP 12
Slide 13: Project Execution – 2015 Projects Completed
Project Execution – 2015 Projects Completed $9 Billion in-service in 2015 Estimated Cost Projects ($ Billion) Liquids Pipelines (Alberta Regional Infrastructure): AOC Hangingstone $0.2 Sunday Creek Terminal Expansion $0.2 Woodland Pipeline Expansion $0.7 Liquids Pipelines (Market Access Initiative
Slide 14: Other Project Updates
Other Project Updates Continued progress on regulatory aspects of capital program Project Status Update Next Steps Line 9 Reversal & • NEB approved the LTO in • Complete testing and Expansion June requiring hydrostatic submit results to NEB tests on three pipe segments Sandpiper • Minnesota PUC appr
Slide 15: Alliance Pipeline
Alliance Pipeline New services offering begins December 2015 • Successful re-contracting • NEB & FERC approved toll applications in July 15
Slide 16: Liquids Mainline Performance & Outlook
Liquids Mainline Performance & Outlook WCSB fundamentals remain strong and continue to support growth on our Mainline Quarterly Throughput ex-Gretna WCSB Crude Oil Production Outlook* 3.0 6,000 2.5 5,000 2.0 4,000 MMbpd 1.5 Q2 2015 3,000 Near Term Oil Sands 2.1 Projects in Service MMbpd 2,000 1.0 20
Slide 17: Low Cost System Expansion and Extension Opportunities
Low Cost System Expansion and Extension Opportunities Low cost phased expansions are attractive in a low price environment Market Access Opportunities kbpd 1 Eastern Gulf Coast Access 350+ 2 Flanagan South / Seaway Expansions 200 3 Line 9 Expansion 70 2 3 4 3 Ex-Superior Expansion Opportunities kbpd
Slide 18: Outlook: Growth through 2018
Outlook Strong EPS and ACFFO growth drives superior DPS growth through 2018 and beyond $ / share $3.02 $1.78 $1.86 2013 2018 2014 2018 2015 2018 Adjusted EPS* ACFFO* per Share DPS 10% - 12% CAGR ~18% CAGR 14% - 16% CAGR (5 year) (4 year) (3 year) Growth through 2018 *Available cash flow from operati
Slide 19: Summary
Summary • Strong Q2 and first half results • On track to achieve full year guidance range - ACFFO*: $3.30 - $4.00/share - Adjusted EPS*: $2.05 - $2.35/share • Strong Mainline volume and growth outlook • Execution of capital program progressing well • Financial strategy optimization on track to close
Slide 20: Question & Answer Period
BUSINESS UNIT HEADER IMAGE GOES HERE Question & Answer Period
Slide 21: Supplemental Slides
Supplemental Slides CENBRIDGE 21
Slide 22: ACFFO Per Share Actuals
ACFFO Per Share Actuals 2015 2014 ACFFO Per Share Definition ($millions) Q2 Q1 Q2 Q1 Cash provided by operating activities 1,350 1,510 812 314 +/- Changes in working capital (94) (136) 127 870 - Distributions to non-controlling interests (192) (185) (149) (148) - Preferred dividends (71) (71) (57) (