Supplemental Slides Enbridge Energy Partners, L.P. First Quarter 2015 Earnings Presentation May 1, 2015
Legal Notice This news release includes forward-looking statements and projections, which are statements that do not relate strictly to historical or current facts. These statements frequently use the following words, variations thereon or comparable terminology: “anticipate,” “beli eve ,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “position,” “projection,” “should,” “strategy,” “target,” “will” and similar words. Although the Partnership believes that such forward-looking statements are reasonable based on currently available information, such statements involve risks, uncertainties and assumptions and are not guarantees of performance. Future actions, conditions or events and future results of operations may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine these results are beyond the Partnership’s ability to control or predict. Specific factors that could cause actual results to differ from those in the forward-looking statements include: (1) changes in the demand for or the supply of, forecast data for, and price trends related to crude oil, liquid petroleum, natural gas and NGLs, including the rate of development of the Alberta Oil Sands; (2) the Partnersh ip’s ability to successfully complete and finance expansion projects; (3) the effects of competition, in particular, by other pipeline systems; (4) shut-downs or cutbacks at the Partnership’s facilities or refineries, petrochemical plants, utilities or other businesses for which the Par tnership transports products or to whom the Partnership sells products; (5) hazards and operating risks that may not be covered fully by insurance, including those related to Line 6B and any additional fines and penalties assessed in connection with the crude oil release on that line; (6) changes in or challenges to the Partnership’s tariff rates; (7) changes in laws or regulations to which the Partnership is subject, includi ng compliance with environmental and operational safety regulations that may increase costs of system integrity testing and maintenance; and (8) permitting at federal, state and local levels in regards to the construction of new assets. “Enbridge” refers collectively to Enbridge Inc. and its subsidiaries other than the Partnership and its subsidiaries. Forward- looking statements regarding “drop - down” growth opportunities from Enbridge are further qualified by the fact that Enbridge is under no obligation to offer to sell us interests in its U.S. projects, and we are under no obligation to buy any such interests. Similarly, any forward- looking statements regarding potential “drop - down” transactions of interests in Midcoast Operating to Midcoast Energy Partners are further qualified by the fact that we are under no obligation to sell to Midcoast Energy Partners, L.P. any such interests, and Midcoast Energy Partners, L.P. is under no obligation to buy any such interests. As a result, we do not know when or if any such transactions will occur. Except to the extent required by law, we assume no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. Reference should also be made to the Partnership’s filings with the U.S. Secu rities and Exchange Commission (the “SEC”), including its Annual Report on Form 10 -K for the year ended December 31, 2014 and any subsequently filed Quarterly Report on Form 10-Q for additional factors that may affect results. These filings are available to the public over the Internet at the SEC’s web site ( www.sec.gov ) and at the Partnership’s web site. 1 enbridgepartners.com
Quarter Earnings (Adjusted)* Quarter Ended March 31, 2015 2014 Change Segmented operating income (loss): - Liquids $ 272.4 $ 205.2 $ 67.2 - Natural Gas (1) 7.1 6.7 0.4 - Corporate (4.0) 0.3 (4.3) Operating income 275.5 212.2 63.3 Other income (1) 5.3 1.3 4.0 Allowance for equity used during construction� 23.0 20.7 2.3 Interest expense (76.9) (71.2) (5.7) Income tax expense (2.4) (2.0) (0.4) Less: Net income attributable to: Noncontrolling interest (59.2) (35.6) (23.6) Series 1 preferred unit distributions (22.5) (22.5) - Net income attributable to general and limited partner ownership in EEP 142.8 102.9 39.9 Allocations to general partner (54.3) (34.6) (19.7) Net income allocable to common units and i-units $ 88.5 $ 68.3 $ 20.2 Weighted average common units and i-units outstanding 332.6 326.4 6.2 Net income per common unit and i-unit $ 0.26 $ 0.20 $ 0.06 EBITDA $ 432.2 $ 338.7 $ 93.5 (Unaudited; $ in millions, except per unit in dollars; average units in millions) Excludes the impact of unrealized noncash mark-to-market net gains and losses; among other adjustments – see non-GAAP * reconciliations. (1) Prior year adjusted to reclassify make-up rights adjustment from Operating income to Other income. 2 enbridgepartners.com
Distribution Coverage As declared As paid Q1 2015 Q1 2015 Net income attributable to general and limited partner ownership in EEP $ 140.1 $ 140.1 Option premium amortization (1.0) (1.0) Noncash derivatives fair value gains 2.0 2.0 Make-up rights adjustment (2.6) (2.6) Line 2 hydrotest 0.4 0.4 Accretion of discount on Series 1 preferred units 3.9 3.9 Adjusted net income (1) 142.8 142.8 Series 1 preferred unit distributions 22.5 22.5 Depreciation and amortization 103.0 103.0 Distribution in excess of income from Joint Ventures 1.5 1.5 Maintenance Capex (16.1) (16.1) Distributable Cash Flow $ 253.7 $ 253.7 Cash Distributions 209.6 194.2 PIK Distributions (gross)* 40.3 39.7 Total Distributions $ 249.9 $ 233.9 Cash Coverage Ratio 1.21 1.31 Coverage Ratio 1.02 1.08 Distribution per unit $ 0.5700 $ 0.5700 (Unaudited; $ in millions) (1) Excludes unrealized non-cash mark-to-market adjustments, among other adjustments - see non-GAAP reconciliations. * Notional value of paid in kind distributions. 3 enbridgepartners.com
Segment Operating Income (Adjusted)* Quarter Ended March 31, 2015 2014 Change Liquids Operating revenue 556.9 436.1 120.8 $ $ $ Power (63.6) (50.7) (12.9) Environmental costs (0.8) (5.0) 4.2 Operating and administrative (130.0) (108.4) (21.6) Depreciation and amortization (90.1) (66.8) (23.3) Operating income $ 272.4 $ 205.2 $ 67.2 Quarter Ended March 31, 2014 (1) 2015 Change Natural Gas Gross Margin $ 128.1 $ 152.6 $ (24.5) Operating and administrative (82.7) (108.9) 26.2 Depreciation and amortization (38.3) (37.0) (1.3) Operating income $ 7.1 $ 6.7 $ 0.4 (Unaudited; $ in millions) * Excludes unrealized non-cash mark-to-market adjustments, among other adjustments - see non-GAAP reconciliations. (1) Prior year adjusted operating income was revised to reclassify make-up rights adjustment to other income. 4 enbridgepartners.com
Impact of Line 6B Incident Estimated Costs* As of December Booked in Q1 Total to Date 31, 2014 2015 Total Costs $1,208 $0 $1,208 Less: Insurance Recoveries $547 $0 $547 Total Normalized $661 $0 $661 Unaudited amounts, $ in millions. Represents life-to-date amounts pursuant to impact of the Line 6B incident. *Includes $47.5 million in fines and penalties associated with the Line 6B incident. Due to the absence of sufficient information, we cannot provide a reasonable estimate of our liability for additional fines and penalties that could be assessed in connection of the line 6B incident. As a result, except for the penalties disclosed herein, we have not recorded any liability for expected fines and penalties. 5 enbridgepartners.com
Capital Expenditures Q1 2015 Maintenance Capex $ 19.2 Enhancement Capex (1)(2) $ 492.6 Ending PP&E, net $ 16,157.9 Q1 2015 Major Enhancement Expenditures Q1 2015 North Dakota Expansions (1) $ 116.8 Eastern Access (2) $ 48.4 Mainline Expansion (2) $ 189.6 (Unaudited; $ in millions) (1) Enhancement expenditure is before joint funding, with 37.5% to be funded by third party. (2) Enhancement expenditure is before Eastern Access and Mainline Expansion joint funding, with 75% to be funded by Enbridge. 6 enbridgepartners.com
Book Capitalization 3/31/2015 12/31/2014 Loans from affiliates $ - $ 306.0 Short-term debt - - Long-term debt (1) 6,795.5 6,475.2 Total Debt $ 6,795.5 $ 6,781.2 Partners' capital (1) 9,528.5 9,140.8 Total Capitalization $ 16,324.0 $ 15,922.0 Total Debt / Total Capitalization 42% 43% 3/31/2015 12/31/2014 Amounts outstanding under Credit Facilities $ 1,360.0 $ 1,210.0 Principal amount of Commercial Paper issuances 777.4 562.3 Letters of Credit outstanding 360.2 330.2 Amount we could borrow (2) 877.4 522.5 Total credit available under Credit Facilities (3) $ 3,375.0 $ 2,625.0 (Unaudited; $ in millions) (1) Debt reduced and Partners' Capital increased in 2015 and 2014 by $200 million for Junior Subordinated Notes' equity credit. Partners' Capital excludes Accumulated Other Comprehensive Income and includes Noncontrolling Interest. (2) Includes a $750 million 364-day Credit Facility with Enbridge (U.S.) Inc., an affiiliate of Enbridge. (3) EEP's available liquidity excludes credit available to its affiliates MEP and MOLP under their respective credit agreement. 7 enbridgepartners.com
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