Enbridge Energy Partners, L.P. Investment Community Presentation November 2015 en b r i d gep ar tn ers. co m
Investment Highlights Strong Investment Grade & Enterprise Value Stable Outlook Large-Cap MLP Low-risk Growth Underway Defensive cash flow (S&P, Moodys, DBRS) risk profile Total Unitholder Return Ticker Symbol NYSE: EEP…
Our Strategy: Stability + Growth The foundation for delivering sustainable growth Exceptional liquids pipeline infrastructure network Strategic Position Connectivity to large producing basins and key North American refining…
Foundation for Delivering Sustainable Growth Strategic position: strong North American liquids pipeline infrastructure position Competitive Advantages Norman Wells Refiners: Access to multiple crude Western streams Canada Zama…
Foundation for Delivering Sustainable Growth Strategic Position: premier connectivity to key refining centers Enbridge is connected to over 8.6 MMbpd of refining capacity Enbridge Access to Refining Capacity (kbpd) Montreal…
Foundation for Delivering Sustainable Growth Cash-flow stability underpinned by low-risk business model 2019e 32% 2017e 2015e 27% 18% Cost-of-Service/Take-or-Pay Fee-based Commodity Sensitive (before hedging)…
Low Risk Business Model Delivers Stable Cash Flows Liquids pipeline business provides 90% of Partnerships distributable cash flow 2015e EBITDA (1) Cost of Service (Liquids Segment) Utility style regulatory model: return-of and…
Foundation for Delivering Sustainable Growth Premier MLP Sponsor: Enbridge Inc. (ENB) ENB: North American leader in energy delivery Owner and operator of largest crude oil pipeline system 36 billion equity market cap Strong…
Three Pillars of Growth Selective drop-down opportunities from ENB would enhance growth outlook above 2% - 5% annual target 3.6% Distribution Coverage strengthens Single-tier IDR structure EEP Commercially secured organic…
Three Pillars of Growth Commercially Future Growth Drop-Downs Secured Growth Opportunities from sponsor Execute multi-billion Low-cost expansion Substantial drop- dollar commercially and extension down opportunities secured…
Pillar 1: Market Access Well Advanced Transformative low-risk organic growth expected to provide substantial cash flow growth Three major initiatives provide 1.7 MMbpd of increased market access and diversification +50 kbpd +250…
Pillar 2: Expansion & Extension Opportunities Well positioned to pursue additional expansions to meet shipper needs; Phased expansions are attractive in a low crude price environment Market Access Opportunities kbpd 1 Eastern Gulf…
Pillar 3: Enbridge U.S. Liquids Pipelines Drop-Down Selective drop-down opportunities from sponsor support long-term growth outlook Capital Upsize Risk Pipeline System Cost/ Book Option Profile Value* A Eastern Access 0.4 1.5…
EEP Distribution Growth Potential Enhancing visible growth through selective drop downs Illustrative Distribution Growth Profile 5%+ CAGR Base plan With selective drop downs 2015 2016 2017 2018 2019 Embedded Mainline…
Strategic Alignment with Enbridge Enhance EEPs cost of capital 2013 2014 2015 2016-2019e 2012/2013 - Joint 6/2014 Equity 7/2015 ENB Eastern Access & Funding for Restructure to continues review Mainline Expansion Eastern Access…
Executing on our Growth Plan Meaningful growth in earnings and cash flows 2015 2016 2017 2018 2019 Secured Growth Mainline Expansion Eastern Access Mainline Expansion Line 61 0.4B Line 6B Line 61 0.4B Line 67 0.4B expansion &…
Crude Oil Fundamentals & the Enbridge System 17 en b r i d gep ar tn ers. com
WCSB Crude Supply Forecast Western Canadian producers have a long-term investment horizon WCSB continues to grow over the long term 6,000 Incremental 5,000 economics of projects in 4,000 construction Long-term price kbpd…
Oil Sands Blended Supply Outlook Highly transparent supply outlook drives growth Incremental Oil Sands Blended Husky Energy has commenced steam Supply (Cumulative kbpd) operations at the second of two processing plants at the Sunrise…
Pipeline Capacity vs. Supply Outlook Strong demand for pipeline takeaway capacity out of Western Canada Mbpd 7 6 supply outlook 5 4 3 Enbridge 2 Regina Deliveries 1 Other Existing Pipelines Western Canadian…
Bakken Crude Supply Forecast Pipeline access to market enhances producer netbacks Highly productive and economic resource base Bakken Crude Supply vs. Takeaway Capacity Estimated Breakeven in Core Counties (based on IRR of 10%) 60…
Enbridge System Market Reach Key North American markets served by the Enbridge system Enbridge system provides access to multiple premium markets Eastern Canada (Total Capacity = 0.8 MMbpd) Northern PADD II (Total Capacity…
Strong Competitive Position Enbridge system is a reliable, low cost crude oil transportation provider Access to multiple premium markets Rail Other Enbridge Transport Pipelines System (/bbl) (/bbl) (/bbl) WCSB to Chicago Area 15…
Matching Supply Push and Demand Pull Outlook for Lakehead system utilization remains strong Regional takeaway: long-term take-or-pay EEP Lakehead System matches supply and demand Downstream markets: long-term…
Strong Commercial & Fundamental Underpinnings Defensive nature of cash flows position EEP to navigate through commodity price uncertainty Low-risk business model largely mitigates 2015e EBITDA volume sensitivity Demand for crude…
Liquids Pipeline Organic Growth Underway 26 en b r i d gep ar tn ers. com
Bakken Expansion Sandpiper Pipeline EEP pipeline takeaway will reach 580,000 bpd with next phase of expansion Total Secured Capital = Scope: 600 mile, 24/30 pipeline 2.6 B Capacity: 225 kbpd/375 kbpd Target in-service: Late…
Line 3 Replacement Enbridge system operating capacity increases to 2.85 MMbpd from Western Canada into the U.S. Project provides high reliability and assurance to key markets EEP Capital Investment: Border to Superior 2.6…
Delivering Prudent Growth Joint-funding with sponsor enhances EEPs financial flexibility Net Growth Capital Target (MM) Capital EEP In-Service Risk Profile Liquids: Eastern Access (1) Line 6B Replacement, Line 5 and 30 year Cost of…
Financial Outlook and Risk Management 30 en b r i d gep ar tn ers. com
Strengthening Financial Outlook Meaningful growth in cash flows as liquids pipelines growth projects enter service Transformative low-risk Liquids pipeline organic growth capital program underway Joint-funding with sponsor enhances…
Natural Gas Segment Large-scale G&P assets along US Gulf Coast with access to multiple drilling formations 2015e EBITDA 90% Liquids segment; 10% Natural Gas segment Key Assets Natural Gas Deliveries 2.2 bcf/d Gathering and…
EEP Actions to Strengthen MEP Drop-Downs to MEP complement EEPs funding program Re-establish MEP as drop-down MLP; funding source for EEP liquids projects Enhance MEPs ability to deliver distribution growth & maintain 1.0x coverage…
Effective Credit Risk Management Strong counterparty credit risk profile Virtually all Liquids Pipelines customers are either investment grade or have posted security Liquids Pipelines EEP Customer Credit Quality Customer Credit…
Priority One Focus on Safety & Operational Reliability Operational Risk Management Program State-of-the art Liquids Pipelines control center Most extensive maintenance, integrity and inspection program in the history of the North…
Key Takeaways Strategic position Connectivity to large producing basins & key North American refining centers Well positioned to pursue additional phased expansions Low-risk business model delivers stable cash flows Organic growth…
APPENDIX Enbridge Energy Partners, L.P. Investment Community Presentation November 2015
Corporate Structure Enbridge Inc. owns 11.7% of listed shares 42% of EEP (indirect) Enbridge Inc. 100% voting interest (NYSE: ENB) (indirect) (Baa2 / BBB+) Enbridge Energy Management, L.L.C. 2% GP interest (indirect) (NYSE:…
Preferred Unit Restructuring Enhances Partnerships financing flexibility and aligns with Sandpiper project target in-service Strategic alignment with Enbridge Term Prior Restructured Principal / Rate 1.2 Billion / 7.5%…
North American Crude Oil Pricing Differentials Enbridge is the low cost transportation provider and we will continue to grow our pipeline systems Alberta Light Pacific Differentials 45 Current1 WCS - Maya (10) 46 43* WCS WCS - West…
Rail Perspective Pipelines provide the most economical transportation to market Rail Transportation Costs Forecast ForecastRail RailVolumes Volumes kbpd From Western From Western CanadaCanada 8.65 to Western Canada 800 16.05…
Market Access Eastern Access Enhances security of supply and refinery competitiveness Eastern Access ENB Funded Projects Timing EEP/ENB Joint Funded 1. Line 5 Expansion Completed + 50kbpd 2. Spearhead North Completed Expansion +…
Market Access Western USGC Access Enbridges Western USGC Access is the linchpin for Canadian liquids development Western USGC Access Projects Timing 1. Mainline Expansions - Alberta Clipper Completed + 120 kbpd - Southern Access…
Market Access Light Oil Market Access Competitive transportation cost to multiple markets for Canadian light oil and Bakken producers relative to differentials LOMA Projects Timing 1. Mainline Expansions 2014-2017 2. Line 9…
Bakken Infrastructure Largest pipeline transporter of crude oil from the Bakken region to premium markets Enbridge Mainline Saskatchewan System (ENF) North Dakota System (EEP) 210 kbpd Bakken Pipeline (EEP, ENF) 145 kbpd…
Major Projects Execution Results and Status Executing with confidence Proven core competencies have enabled the successful delivery of past and current growth portfolio 50 Executed Projects* 2008 Q3 2015 5% under 28B budget 16…
Enbridge Top 10 Mainline Shippers BP CITGO PDV Midwest ConocoPhillips ExxonMobil/Imperial Oil Flint Hills Marathon PBF Energy Plains All American Shell Suncor 48 en b r i d gep ar tn ers. com
Regulatory Tolling Framework System Regulatory Methodology Lakehead System Base toll Toll indexed to PPI +2.65% Southern Access Cost of Service at 9% ROE; 55% equity, 45% debt rate base + Tax Allowance Alberta Clipper Cost of…
Major Canadian and US Crude Oil Pipeline and Refineries 50 en b r i d gep ar tn ers. com
Alternative Ways to Invest in our MLP Tax Considerations EEQ EEP Allocated Taxable Income Mutual Fund Limitations Unrelated Business Income Tax Schedule K-1 Form 1099 * State Filing Obligations * Form 1099 issued for tax…
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