Resilience. Discipline. Growth. 2020 Investor Day Enbridge Inc. TSX/NYSE: ENB
Contents Legal Notice 03 Opening Remarks 05 Strategic Overview 07 Finance 19 Gas Distribution and Storage 29 Gas Transmission 38 Liquids Pipelines 48 Renewable Power 59 Closing Remarks 68
Non-GAAP Measures This presentation makes reference to non-GAAP measures, including adjusted earnings before interest, income taxes, depreciation and amortization (Adjusted EBITDA), adjusted earnings, adjusted earnings per share,…
Enbridge Inc. TSX/NYSE: ENB 2020 Investor Day Agenda Eastern Time Strategic Overview Al Monaco 9:00 Corporate Finance Colin Gruending 9:30 Q&A: Strategy & Finance Panel 9:50 Break 10:10 Gas Utility Cynthia Hansen 10:20 Gas…
Al Monaco President & CEO, Enbridge 2020 Investor Day Our Value Proposition ENB Business Model Delivers Superior Value Best in class infrastructure franchises 15% Resiliency and longevity of cash flows 11% Enbridge 10%…
Todays Approach Strategic & Business Unit Financial Outlook Review Strategic position Longevity of cash flows Energy fundamentals Enhancing returns Growing the business Growing the business Financial policies and outlook Four…
Longevity of Cash Flows Liquids Pipelines Gas Transmission Gas Distribution Serves 12mmbpd of refining capacity Serves 170M people in regional markets Serves 15M people in utility franchise 1 15 bcfd Current demand Gas-fired…
Disciplined, Gradual Approach to Transition 1949 2010 2020 5% Renewable Power 2% & Other Asset Mix: 100% 33% 65% 42% 53% Natural Gas Liquids Transmission, Pipelines Dist. & Storage EV: 75 MM* 40 B 160 B Approach to Transition…
Positioned For Low-Carbon Opportunities Renewable Hydrogen Blending Carbon Capture Natural Gas Power-to-Gas Hydrogen & Storage Technology and business Capitalizing on future of hydrogen through gas distribution Leverages liquids…
Economic Pathways to Achieving Emissions Targets Modernization Self-Power Decarbonizing Emissions & Innovation With Renewables The Grid Offsets Modernize equipment Solar self-powering of Utilizing lower carbon Planting trees…
Growing Global Energy Demand Primary Energy Demand1 Society Depends on Affordable & Reliable Energy (Gtoe) 90% of 80%+ of Hydrogen will take +20% petrochemical energy end-use demand time to be cost competitive3 needs met by crude…
Midstream Landscape Last Decade Near to Medium Term Supernormal; Normalizing capital growth; Growth: Large Capital projects Boost existing asset returns Funding: External Internal Permitting/Regulatory: Manageable Challenging…
1 Enhance Returns from Existing Business 2 Execute Secured Capital Program 3 Further Organic Opportunity Sources of Incremental EBITDA Revenue Growth Cost and Productivity Technology + Mainline IJT inflator Improvements Innovation…
1 Enhance Returns from Existing Business 2 Execute Secured Capital Program 3 Further Organic Opportunity 16B Secured Program Through 2023 Capital (B)* Primary Commercial Framework(s) Incremental EBITDA Growth from Secured…
1 Enhance Returns from Existing Business 2 Execute Secured Capital Program 3 Further Organic Opportunity Organic Opportunity Set Post 2023 Gas Gas Liquids Transmission Distribution Pipelines Renewables & Storage 10B 6B 7B 5B…
Capital Allocation Framework Priorities Deployment of 5-6B of Annual Financial Capacity 1 Preserve High Priority Investments Deployment of Incremental Financial Strength Drive Sustainable Long- Capacity Drives Additional Term Growth…
Finance Colin Gruending Executive Vice President & Chief Financial Officer 2020 Accomplishments Resiliency of low-risk business Delivering on Our Commitments Historic Guidance Achievement model proven again in 2020…
Financial Strength & Flexibility Entering 2020 Exiting 20203 Average Credit Rating BBB+ Global BBB+ disruption Available Liquidity 9B from 13B COVID-19 Incremental Cost Management - 300M+ cost reduction % of customers with…
Visible 3-Year Plan Outlook 5-7% DCF/s1 Growth 4.50 - 4.80 4.70 - 5.00 Near the Midpoint of Range 2020e 2021e 2022e 2023e Our embedded growth and secured capital program will drive 5-7% cashflow growth through 2023 (1)…
Secured Growth Program Project Commercial Framework Expected ISD Capital (B) Total Capital by In-Service Year Line 3R U.S. Portion Toll Surcharge 2021 2.9 USD Liquids Southern Access Expansion Toll Surcharge 2021 0.5 USD…
Strong Credit & ESG Ratings Industry-Leading Credit Ratings1 Industry-Leading ESG Ratings Reaffirmed rating on: Relative performance 2nd among midstream peers BBB+ Dec. 2020 stable Top among midstream peers BBB+ April 2020 A…
Capital Allocation Considerations Capital Allocation Choices Our View Current Focus Maintain leverage policy range and BBB+ Debt Repayment Unchanged credit rating Grow at sustainable rate; trend to Maintain & Grow Dividend Continued…
Returns-Based Preferences Prospective Returns on Capital (EV/EBITDA) CORE ALLOCATIONS ALTERNATIVES 22x 3-4B/year 2B/year 8-11x 7-10x 8-10x 6-8x 3-6x 4x Complete Low Capital Regulated Utility Share Traditional New High…
Committed to a Proven Formula Financial Low Risk Disciplined Superior Strength & Business Capital Shareholder Flexibility Model Allocation Returns Proven Track Record: 14 years of consistently meeting annual financial guidance…
Gas Distribution & Storage Cynthia Hansen EVP & President, Gas Distribution & Storage 2020 Accomplishments Uninterrupted and reliable service during pandemic Strong cash flow growth driven by robust customer additions and…
Three Key Questions 1 Why are we highly confident 2 How will we invest capital in in the longevity of cash flows this business and optimize returns from this business for decades to come 3 What is our outlook and strategy for…
Unassailable Natural Gas Fundamentals Critical Reliable Affordable Ontarios Residential & Ontarios Industrial Ontario Peak Energy Demand Comparable Residential Commercial Space Process Load1 (MW) Annual Heating Bills Heating Load1…
Longevity of Cash Flows Utility Rate Base Growth Stable, Growing Utility EBITDA1 (in MMs) (in MMs) 14,000 2,000 12,000 1,500 10,000 8,000 1,000 6,000 4,000 500 2,000 0 0 2012 2013 2014 2015 2016 2017 2018 2019 2020e…
Strategic Priorities Enhance Returns from Execute Secured Further Organic Existing Business Capital Program Opportunities Dawn Storage Facility Revenue escalators Replacements/reinforcements In-franchise customer growth…
Growth in Distribution Rate Base Customer growth and community 1- 1.5B/yr of annual utility spend expansion 5-year capital plan (2020-2024)1 45K new customer additions annually Over 200 expansion projects 1.4 System reinforcements…
Storage and Transmission Opportunities Dawn-Parkway Dawn-Parkway Investment Growing Storage Demand transmission provides Opportunities Historical Storage Sales (PJ) essential connections 140.00 for gas supply to serve Eastern Canada…
Low Carbon Gas Technology Trends Strong History of Innovation Benefits of RNG and N. America RNG Hydrogen Growth Outlook (Bcf/d) Replacement of cast iron pipes RNG Reduced GHG emissions 21% below 1990 levels1 Reduces CO2 emissions…
Low Carbon Strategy We are taking a disciplined approach to our investments: Prove out technology then expand Leverage our 3.8 million customer connections Limited capital at risk Rate base or comparable commercial model Dufferin…
Gas Transmission Bill Yardley President & Executive Vice President, Gas Transmission & Midstream 2020 Accomplishments Generated expected results despite economic disruptions Delivered 160M+ of additional EBITDA through…
Three Key Questions 1 Why will natural gas remain 2 How will we invest capital to core to the energy mix and drive medium to long-term cash flow growth why are we confident in the longevity of our cash flows 3 How will we drive…
Essential Low-Cost Energy Source Natural gas primary fuel for power generation Most economic source of heating New England 40% Relative cost of heating an 326% average home in New England More expensive Natural Gas2 than gas PJM…
N. American Demand Growth N. American Natural Gas Demand Integrated Resource Plan1 10% (bcf/d) 9% 33% 140 30% 15% 120 17% 100 2020 2035 80 15% 60 demand 21% 23% 13% increase Natural Gas Renewables 40 Coal 29% Nuclear 20…
Three Key Questions 2 How will we invest capital to 1 Why will natural gas remain core to the energy mix and drive medium to long-term why are we confident in the longevity of our cash flows cash flow growth 3 How will we drive…
Rate Proceedings 2020 2021 2022+ Rate Settlements Underway: Recovery of integrity and East Tennessee modernization costs Alliance US Transparency to rate M&N US certainty and reliable base business cash flows Proactive…
System Modernization Opportunities across footprint to upgrade existing infrastructure 0.9B Invested in Improve efficiency by replacing aging the System in 2020 infrastructure and modernizing fleet Enhanced emission standards…
Three Key Questions 3 How will we drive growth 1 Why will natural gas remain core to the energy mix and through N. American why are we confident in the longevity of our cash flows exports 2 How will we invest capital to drive…
LNG Export Opportunities N. American LNG Export Competitiveness N. American LNG Market Share mmtpa Resource life Cost to produce 200 Geopolitical stability Access to capital N. American LNG Capacity 150 Enbridge Strategic Fit…
Gas Transmission - Summary Affordable and reliable natural gas Enhance Returns from Existing Business Rate strategy is vital to meeting N. American Cost management energy needs Technological advancements Our network provides…
Liquids Pipelines Vern Yu Executive Vice President & President, Liquids Pipelines 2020 Accomplishments Reliable operations and strong safety performance in challenging COVID-19 environment 92% YTD mainline utilization vs.…
Three Key Questions 1 Why are we highly confident 2 How will we boost returns and in the longevity of our cash Free Cash Flow with zero/low capital-intensive investments flows for decades to come 3 How will we drive growth…
Reliable and Sustained Growth Liquids Pipelines EBITDA +5B 8yr EBITDA ( billions) growth 8 Long-term fundamentals drives strong crude oil 6 demand for decades Integrated system connects 4 most sophisticated demand- pull…
N. America Supply Remains Essential Global Remaining Crude Oil & Condensate Feedstock Resources ESG Scores1 (billion barrels) (aggregated) 300 100 90 80 70 200 60 50 100 300 40 30 Billion barrels 800 Billion Barrels in N.…
Resilient Long-term Demand Competitive and complex refineries Core Markets in PADD II PADD III & U.S. Gulf Coast Nelson Complexity1 & Eastern Canada (mmbpd) Increased market share of 3.0 Canadian heavy in USGC ENB Connected…
Long-term Durability of Our Strategy N. American crude oil production is critical to long-term global demand Our system is connected to the 1 most competitive and complex refineries mmbd in the world Canadian heavy supply provides…
Strategic Priorities Enhance Returns from Execute Secured Further Organic Existing Business Capital Program Opportunities Continued system optimization Line 3 US Low-cost system wide Maximize efficiencies Southern Access to 1.2…
Mainline Contracting Striking a Balance Contracting Timeline Cost of Service Alternative Refiner / Integrated Impact to Enbridge Benefit Producer Producer Dec 19, 2019 Filed Application with CER Enhances low-risk Reasonable risk-…
Integrated Value Chain Drives Growth OIL SANDS (WCSB) Strategic Focus Areas 1 Capture Oil Sands growth through 1 low-cost Mainline expansions Expand and extend our heavy BAKKEN 2 advantage to meet USGC demand 2 Port Arthur 3…
Three Key Questions 3 How will we drive growth 1 Why are we highly confident through USGC terminalling in the longevity of our cash flows for decades to come and export infrastructure 2 How will we boost returns and Free Cash…
Terminalling and Export Infrastructure Enbridge Houston Oil Terminal Emerging and deepening market in Houston as a 2B Seaway Houston source for global heavy crude supply of opportunities Need for a fully integrated heavy crude…
Renewable Power Matthew Akman Senior Vice President Strategy & Power 2020 Accomplishments Construction of 480MW Saint Nazaire project advancing as planned Sanctioned 500MW Fcamp offshore wind farm Progressed solar…
Three Key Questions 1 What is our strategy to 2 How will we grow our offshore generate strong risk- wind business adjusted returns in the renewables business 3 How will self-powering pipeline assets create new attractive…
Our Renewable Power Capabilities Ongoing Focus Expanded Focus Construction Operations Development Direct involvement in N. America team Earlier stage French projects 2.2 GW operated1 Resource assessment Building expertise…
Current Focus to Maximize Returns Uniquely Positioned to Returns by Development Phase Compete in Offshore Wind Shifting towards early-stage entry to maximize returns Strong execution track record Capture development premium…
Three Key Questions 2 How will we grow our 1 What is our strategy to generate strong risk-adjusted offshore wind business returns in the renewables business 3 How will self-powering pipeline assets create new attractive…
Focused on European Offshore Wind Under Renewable power: construction In development (facility est. ISD) In operation Hohe See & Albatros In Operation Coursuelles sur Mer Under construction / FID Saint Nazaire Dunkirk Projects In…
Next Frontier: Floating Offshore Wind 1/3 of the worlds population Floating OSW Potential1 Future Floating OSW Tender Locations2 lives within 100km of shoreline Share of Potential French Floating OSW Deeper offshore areas offshore…
Self-Powering the Pipeline Capture value through extension into power procurement value chain Leverage renewable capability to earn power returns previously paid to third parties Swapping steel for fuel at utilities to turn O&M into…
Growing Renewables Portfolio ENBs Renewable Generation (Gross GW/Net GW) N. American and European presence Over 20 utility scale projects in multiple Canadian, U.S. 0.3 Self-Power Opportunities and European markets 8 2.5 Europe…
Compelling Value Proposition Best in class infrastructure franchises Yield 8% Resiliency and longevity of cash flows Transparent long-term growth outlook Growth 5-7% Growing investable free cash flow Capital Appreciation ++%…
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