Enbridge Inc. · TSX:ENB
Enbridge — Investor Presentation (November 2018)
35 slides from Enbridge's investor presentation, November 2018
Slide 1: Investment Community Presentation
Enbridge Inc. Investment Community Presentation November 2018
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: North America's Leading Energy Infrastructure Company
North America’s Leading Energy Infrastructure Company 2018 EBITDA Outlook • Spectra Energy acquisition transitioned by business unit Gas Utilities Enbridge into a diversified liquids and Power natural gas infrastructure company ~$12.5B Liquids • Premium portfolio of strategically positioned Gas Tran
Slide 4: 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 in 2018 • Original target $3B • $5.7 billion of asset sales proceeds received in Q3 2. Accelerate de-leveraging • 4.7x consolidated Debt
Slide 5: $7.5B of Non-Core Asset Sales
Strategic Priority #1: Move to Pure Regulated Pipeline & Utility Model $7.5B of Non-Core Asset Sales Midcoast G&P Business Renewables Power Assets Canadian G&P Business 100% interest in Texas and 49% interest in all onshore Canadian, select 100% interest in all Oklahoma G&P assets onshore US, and th
Slide 6: Funding Plan Execution
Strategic Priority #2: Accelerate De-leveraging Funding Plan Execution 2018 – 2020 Further Funding Progress Secured Funding Plan1($C billions) $35 • Strong YTD financial performance Increased Optional hybrid securities $30 Financing Flexibility Optional asset sales • $5.7B cash proceeds from non-cor
Slide 7: Strengthening Credit Metrics
Strategic Priority #2: Accelerate De-leveraging Strengthening Credit Metrics Consolidated Debt to EBITDA Profile1 As presented at ENB Days 2017 • Strengthening credit metrics as industry leading growth capital spend moderates and new projects 8.0x generate significant EBITDA 6.0x • Q3 2018 Debt to E
Slide 8: Core Businesses Stable Through Commodity Cycles
Strategic Priority #3: Deliver Reliable Cash Flow & Dividend Growth Core Businesses Stable Through Commodity Cycles Pro-forma Historical EBITDA*(C $ Million) • Stable and predictable cash flow $3,000 • High asset utilization rates • Substantially underpinned by long- term commercial agreements $2,00
Slide 9: Record Financial Performance in 2018
Strategic Priority #3: Deliver Reliable Cash Flow & Dividend Growth Record Financial Performance in 2018 Historical DCF/share Historical EPS • DCF/share and EPS growth trend resuming in 2018 after temporary dilution from financing Spectra Energy acquisition 3Q18 $0.93/share 3Q18 • Record level of DC
Slide 10: Enterprise-wide Secured Growth Project Inventory
Strategic Priority #3: Deliver Reliable Cash Flow & Dividend Growth Enterprise-wide Secured Growth Project Inventory Capital Capital Project Expected ISD ($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
Slide 11: New Projects in Service
Strategic Priority #3: Deliver Reliable Cash Flow & Dividend Growth New Projects in Service Natural Gas: Natural Gas: NEXUS/TEAL - US$1.5B Valley Crossing - US$1.6B ON TORONTO PERMIAN TX Parkway Gulf Coast NY Express MI Dawn Hub Texas Eastern PA Pomelo Vector Connector Texas Eastern Mexico Valley Cr
Slide 12: Line 3 Replacement Project Update
Strategic Priority #3: Deliver Reliable Cash Flow & Dividend Growth Line 3 Replacement Project Update Critical $9B infrastructure replacement project Edmonton • Canadian construction program well underway – > 850 km of pipeline now laid (over 80%) Hardisty • Wisconsin segment complete and in-service
Slide 13: Financial Guidance Reiteration
Strategic Priority #3: Deliver Reliable Cash Flow & Dividend Growth Financial Guidance Reiteration 1 2018 EBITDA & DCF/share Guidance 2 10% Dividend CAGR through 2020 Consolidated EBITDA $3. 2018 DCF/share 68 Outlook ($MM) Outlook $4.15 - $4.45 ~$12,500 $3.68 Q3 Q3 YTD YTD 2017a 2018e 2017a 2018e 20
Slide 14: Executing on Plan to Simplify Structure
Strategic Priority #4: Streamline the Business Executing on Plan to Simplify Structure Targeted Timeline Benefits for SV Shareholders Direct ownership in largest energy infrastructure Company in North America Enhanced dividend coverage Diverse opportunity set for growth beyond 2020 Stronger balance
Slide 15: Proceeding with Utilities Amalgamation
Strategic Priority #4: Streamline the Business Proceeding with Utilities Amalgamation OEB Approved Incentive Framework One of the Largest Utility Franchises in North America • Provides regulatory certainty • Allows control and flexibility over operations ON QC Union • Enables significant efficiencie
Slide 16: Post-2020 Growth Potential
Strategic Priority #5: Extend Growth Beyond 2020 Post-2020 Growth Potential Liquids Gas Offshore Capital Allocation Considerations Pipelines & Transmission Gas Utilities Renewables Terminals & Storage • Competitive advantage • Organic growth potential $5-10B $5-10B $5+B $5-10B • Must fit low-risk pi
Slide 17: Summary
Summary • 2017 was a transformational year – Spectra Energy transaction successfully diversified the business • 2018 - 2020 Strategic Plan in execution – Strong financial performance – $7.5B of non-core asset sales – Accelerated de-leveraging – Sponsored vehicle buy-in agreements – Line 3 Replacemen
Slide 18: Liquids Pipelines Appendix
Liquids Pipelines _ Appendix
Slide 19: North America's premier crude oil infrastructure portfolio
North America’s premier crude oil infrastructure portfolio 70% Largest crude oil pipeline network in the world of total oil sands production can be transported on the Regional system to Edmonton and Hardisty • 27,600 km of pipe serving high quality producing basins 3.7mmbpd • Connected to the best r
Slide 20: Large, Stable Contributor to Enbridge EBITDA
Large, Stable Contributor to Enbridge EBITDA 2018e EBITDA 2018e LP EBITDA by Business 4% Other Highly Contracted Enbridge 4% 3% Southern Lights Bakken System Long Term Take-or-Pay Common carrier with indexed rate*; Long Term Take-or-Pay Other 4% 14% Regional Oil Sands Long Term Take-or-Pay Gas Utili
Slide 21: Enbridge Mainline Expected to Remain Highly Utilized
Export capacity picture remains unclear post 2021 Enbridge Mainline Expected to Remain Highly Utilized WCSB Pipeline Utilization Scenarios Post-2021 One New Pipeline Scenario (KBPD) Two New Pipelines Scenario (KBPD) 6,000 6,000 2018 CAPP 2018 CAPP Third party uncontracted capacity Order of Capacity
Slide 22: Mainline Competitive Positioning beyond 2020
Mainline Competitive Positioning beyond 2020 • Mainline attributes: – Market reach 1.9 mmbpd – Highly competitive tolls – Operating flexibility Sole sourced supply Chicago Netback • WCSB production growth outlook remains strong Chicago Pricing* $68 Enbridge Toll** ($6) • Mainline directly connected
Slide 23: Mainline & Downstream Expansion Opportunities
Low cost, highly executable, staged expansions to match supply growth Mainline & Downstream Expansion Opportunities Hardisty Incremental Capacity Post Line 3 Capacity (KBPD) +450 kbpd Mainline System DRA Optimization +75 expansion capability BEP Idle* +100 Incremental Capacity 2020+ Line 4 Capacity
Slide 24: Other Development Opportunities
Other Development Opportunities Oil Sands System DAPL Expansion Express-Platte $1-3B Hardisty in opportunities BAKKEN Express DAPL PADD IV Platte Wood River/ Patoka Patoka • Well positioned in oil sands to • Bakken supply growth could drive • Express-Platte system optimization or capture future supp
Slide 25: New Platform Development Opportunities
New Platform Development Opportunities Permian Strategy – Gray Oak USGC Strategy Cushing PERMIAN Mt Belvieu Mt $2-3B in opportunities Belvieu Freeport Freeport Objective: Expand liquids footprint into Permian Basin Objective: Leverage expertise to expand footprint in USGC Opportunity: High drilling
Slide 26: Gas Transmission Appendix
Gas Transmission Appendix ZENBRIDGE
Slide 27: Premier Gas Transmission Footprint
Premier Gas Transmission Footprint Canadian Gas Transmission & Midstream Gas Transmission Value Proposition • Unparalleled asset footprint • Safe, reliable operations • Connecting diverse supply basins with growing demand markets • Stable and predictable cash flow • No direct commodity exposure • Mi
Slide 28: Strong, Growing & Stable Contributor to Enbridge EBITDA
Strong, Growing & Stable Contributor to Enbridge EBITDA 2018e EBITDA Enbridge • Transmission business predominantly Other 4% Gas Utilities 13% Gas drives GTM earnings & Power Transmission 85% • Significant contribution to stable, fee-based Gas 32% Transmission earnings from transmission businesses &
Slide 29: Solid Gas Transmission Base
Solid Gas Transmission Base GTM Reservation Revenue (Based on revenues for 12 months ended 12/31/17) 98% 97% 99% 97% 99.5% 94% 95% 97% 94% 92% 72% Achieved Peak Delivery N/A Days in 2017 Average Contract 9 12 8 8 5 8 25 17 Life of 4 6 Terms years years years years years years years years lease years
Slide 30: FERC Update and Outlook
FERC Update and Outlook US Gas Transmission FERC Filings • No material financial impact from FERC policy actions – Does not impact pipelines in corporate structures – Does not impact negotiated rate agreements – 501-G filings demonstrate ROE’s within appropriate range • Texas Eastern rate case on tr
Slide 31: N. American Natural Gas Demand Grows & Diversifies
N. American Natural Gas Demand Grows & Diversifies Natural Gas Demand Growth by Region NA Natural Gas Demand by Sector (Bcf/d increases by 2035) (Bcf/d) 140 120 LNG Exports W. Canada +3.5 E. Canada 100 Mexico Exports +0.6 Other Northeast 80 W. North Central +3.5 Power Gen Pacific +2.1 +1.6 Mountain
Slide 32: Northeast & New England
Development opportunities in next 5 years Northeast & New England Northeast / New England • Demand continues to increase • Solution needed to bring affordable gas to the region New England BOSTON Philadelphia Market Opportunities • Market opportunities for industrial Dawn Hub and exports DETROIT NYC
Slide 33: Southeast Markets
Development opportunities in next 5 years Southeast Markets Southeast Markets • Natural gas power generation GA MS - Coal-to-gas conversions - Increase in Florida demand AL Power generation opportunities FL NOLA ORLANDO $1-2B in opportunities TAMPA Continued growth in natural gas fired power generat
Slide 34: Gulf Coast Markets
Development opportunities in next 5 years Gulf Coast Markets Gulf Coast • Epicenter of demand for LNG and Mexico exports Permian MS Permian LA TX • DCP offers Permian solutions to producers NOLA Offshore US Gulf Coast MT BELVIEU LNG & Industrial $2-4B in opportunities Mexico Offshore Exports to Mexi
Slide 35: Western Canada
Development opportunities in next 5 years Western Canada Western Canada Montney / Duvernay • Producers looking for egress solutions Expansions ‒ Alliance ‒ T-South AB ‒ NGL transmission opportunities BC ‒ Montney/Duvernay expansions ‒ LNG opportunities T-South Transmission Opportunities Alliance $1-