Enbridge Inc. · TSX:ENB
Enbridge — Q1 2014 Earnings Presentation
21 slides from Enbridge's earnings presentation, May 7, 2014
Slide 1: 2014 First Quarter Financial & Strategic Update
2014 First Quarter Financial & Strategic Update May 7, 2014 Al Monaco President & CEO J. Richard Bird Executive Vice President, CFO and Corporate Development
Slide 2: Q1 2014 – Financial & Strategic Update
Q1 2014 – 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 • Overview • Project Development & Execution Update • Q1 Financial Review • Outlook & Strategic Priorities 4
Slide 5: Q1 2014 – Financial Results
Q1 2014 – Financial Results Adjusted Earnings* ($ Millions) 488 Q1 492 Q1 2013 2014 Year-To-Date EPS $0.62 $0.60 $1.84 $1.94 $2.04 2014 EPS Guidance: * Adjusted earnings and adjusted EPS are non-GAAP measures. For more information on non-GAAP measures please refer to disclosure in news release. 5
Slide 6: Line Replacement
Line 3 Replacement • Shipper Support: – CAPP/RSG • Capital Investment: – $7 billion (ENB/EEP) • Line 3: – Part of Enbridge Mainline System – Replacing all remaining segments downstream of Hardisty • Expected Completion: – 2nd Half of 2017 • 15 Year Toll Surcharge • Status: – Regulatory/Consultation
Slide 7: Benefits of Line Replacement
Benefits of Line 3 Replacement • Benefits to Industry: – High reliability and assurance to key markets – Increased scheduling flexibility – Reduced scheduling impacts of future maintenance • Supports our #1 Priority – Safety and Operational Reliability • Positive Investment Attributes – Avoids $1.1
Slide 8: Regulatory Updates
Regulatory Updates Project and Regulatory Body Regulatory Status Northern Gateway: – Joint Review Panel • Recommended for Approval with conditions – Federal Cabinet • Decision pending Alberta Clipper Expansions: – NEB • Approved – State (MN) • Minnesota Ph1: Approved | Ph2: Pending – Department of S
Slide 9: Enterprise Wide Growth Capital In-service 2014
Enterprise Wide Growth Capital In-service 2014 $9.4 Billion In-Service in 2014 Fort McMurray Edmonton Hardisty Kerrobert Regina Estimated Cost Cromer +270 Projects Gretna kbpd ($ Billion) Montreal Liquids Pipelines (Alberta Regional Infrastructure): Norealis Pipeline $0.5 Westover Superior Surmont P
Slide 10: Western U.S. Gulf Coast Access
Western U.S. Gulf Coast Access 1 Associated Mainline Expansions ($1.3B) 1 2 Flanagan South Pipeline ($2.7B) 3 Seaway Pipeline Acquisition + Reversal ($1.3B) 4 Seaway Pipeline Twin + Lateral ($1.1B) Chicago/ Flanagan 2 Cushing Project Status Update 3 • Flanagan South construction 98% complete 4 • Sea
Slide 11: Enterprise Wide Growth Capital In-service 2015
Enterprise Wide Growth Capital In-service 2015 $9.2 Billion In-Service in 2015 Fort McMurray Edmonton Hardisty Kerrobert Regina Cromer Estimated Cost Gretna Projects Montreal ($ Billion) Liquids Pipelines (Alberta Regional Infrastructure): Westover Superior AOC Hangingstone $0.1 Athabasca Pipeline T
Slide 12: Segmented Earnings Variance
Segmented Earnings* Variance Q1 2014 SEGMENT vs. Q1 2013 ($ Millions) Liquids Pipelines -1 Gas Distribution -10 Gas Pipelines, Processing and Energy Services - Sponsored Investments +17 Corporate -2 TOTAL +4 * Adjusted earnings are non-GAAP measures. For more information on non-GAAP measures please
Slide 13: Full Year 2014 EPS Guidance Outlook
Full Year 2014 EPS Guidance Outlook $2.04 Headwinds ~ $1.84 Tailwinds ~ Guidance Range * Adjusted earnings are non-GAAP measures. For more information on non-GAAP measures please refer to disclosure in news release. 13
Slide 14: Enterprise Wide Funding and Liquidity Actions
Enterprise Wide Funding and Liquidity Actions FUNDING SOURCES 2014 ($ Billions) ENB Preferred Shares $0.3 ENB DRIP $0.1 Medium Term Notes $1.8 Bank Credit Facility Additions* $0.4 TOTAL $2.6 Billion * In Nominal CAD and US Currencies 14
Slide 15: 2013 – 2017 Funding Requirements
2013 – 2017 Funding Requirements Excluding Sponsored Investments ($ billions, as at May 2014) Maintenance Capital 5.6 Secured Growth Capital 27.3 Risked Growth Capital 3.2 36.1 Cash Flow Net of Dividends (14.6) Net Funding Requirement 21.5 Debt Equity Total Requirement 14.8 Total Requirement 6.7 Cas
Slide 16: Cost of Equity Optimization & Flexibility
Cost of Equity Optimization & Flexibility 2013 – 2017 Remaining Requirement $2.6 Billion: $ Billions Preferred Shares $1.8 Asset Monetization/Sponsored Vehicle Drop $3.0 Downs TOTAL $4.8 ENB Public Equity ~ 16
Slide 17: Secured Growth Project Investments
Secured Growth Project Investments $10 Billion in New Growth Projects Secured Since Enbridge Day Return Profile Flat Tilted ($ Billions) ($ Billions) Line 3 Replacement Project - $6.8 Wood Buffalo Extension $1.6 - Norlite Diluent Pipeline $1.0 - Sunday Creek Terminal Expansion - $0.2 Keechi Creek Wi
Slide 18: 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 - $7B Line 3 Replacement • New Growth Platforms • Sponsored Vehicle Drop Downs 2012 2017 2012 2017 * Adju
Slide 19: Progress on Key Priorities
Progress on Key Priorities 1. Focus on Safety & Operational Reliability • Enterprise Wide Maintenance and Integrity Investment • Operational Risk Management Program • Path to Industry Leadership 2. Execute the Growth Capital Program • Project Management • Financial Strength & Liquidity • Human Capit
Slide 20: Summary
Summary • Solid Q1 Financial Results; maintaining full year EPS guidance of $1.84 – $2.04/share • $36 Billion in commercially secured growth through 2017 • Projects advancing well • $10 Billion in new projects and tilted returns provide assurance of industry leading EPS growth to 2017 and beyond • I
Slide 21: 2014 First Quarter Financial & Strategic Update Q&A
2014 First Quarter Financial & Strategic Update May 7, 2014 Q&A