Supplemental Slides Enbridge Energy Partners, L.P. Fourth Quarter 2014 Earnings & 2015 Financial Guidance Presentation February 19, 2015
Legal Notice This presentation 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,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “position,” “projection,” “should,” “strategy,” “target”, “will” and similar words. Although Enbridge Energy Partners, L.P. (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 Partnership’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 Partnership 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, including 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. Forward-looking statements regarding “drop - down” growth opportunities from Enbridge Inc. are further qualified by the fact that Enbridge Inc. 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. The Partnership’s forward looking statements are subject to risks and uncertainties pertaining to operating performance, regulatory parameters, project approval and support, weather, economic conditions, interest rates and commodity prices, including but not limited to those discussed more extensively in our filings with the U.S. securities regulators. The effect of any one risk, uncertainty or factor on any particular forward looking statement is not determinable with certainty as these are independent and our future course of action depends on management’s assessment of all information available at the relevant time. 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. Securities and Exchange Commission (the “SEC”), including its Annual Report on Form 10-K for the year ended December 31, 2014, 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 December 31, 2014 2013 Change Segmented operating income (loss): - Liquids $ 306.4 $ 185.8 $ 120.6 - Natural Gas 5.1 4.4 0.7 - Corporate (3.7) (2.2) (1.5) Operating income 307.8 188.0 119.8 Other income 7.0 (2.1) 9.1 Allowance for equity used during construction� 9.4 17.9 (8.5) Interest expense (82.2) (73.1) (9.1) Income tax expense (3.5) (1.2) (2.3) Less: Net income attributable to: Noncontrolling interest (83.5) (34.0) (49.5) Series 1 preferred unit distributions (22.5) (22.4) (0.1) Net income attributable to general and limited partner ownership in EEP 132.5 73.1 59.4 Allocations to general partner (43.6) (33.9) (9.7) Net income allocable to common units and i-units $ 88.9 $ 39.2 $ 49.7 Weighted average common units and i-units outstanding 329.8 325.2 4.6 Net income per common unit and i-unit $ 0.27 $ 0.12 $ 0.15 Adjusted EBITDA $ 443.3 $ 303.3 $ 140.0 (Unaudited; $ in millions, except per unit in dollars; average units in millions) * Excludes the impact of: (a) unrealized noncash mark-to-market net gains and losses; and (b) additional environmental costs, net of insurance recoveries, associated w ith the incident on Line 6B; among other adjustments – see non-GAAP reconciliations. 2 enbridgepartners.com
Distribution Coverage As declared As paid As declared As paid Q4 2014 Q4 2014 YTD 2014 YTD 2014 Net income attributable to general and limited partner ownership in EEP $ 214.1 $ 214.1 $ 371.8 $ 371.8 Option premium amortization (0.9) (0.9) (4.1) (4.1) Noncash derivatives fair value gains (99.6) (99.6) (33.8) (33.8) Make-up rights adjustment (2.0) (2.0) 6.5 6.5 Line 6B incident expense, net of recoveries 1.0 1.0 88.9 88.9 Non-core asset impairment 11.9 11.9 11.9 11.9 Severance costs 4.2 4.2 4.2 4.2 Accretion of discount on Series 1 preferred units 3.8 3.8 14.9 14.9 Adjusted net income 132.5 132.5 460.3 460.3 Series 1 preferred unit distributions 22.5 22.5 90.0 90.0 Depreciation and amortization 91.3 91.3 365.0 365.0 Distribution in excess of income from Joint Ventures (0.1) (0.1) 2.7 2.7 Maintenance Capex (31.8) (31.8) (108.7) (108.7) Distributable Cash Flow $ 214.4 $ 214.4 $ 809.3 $ 809.3 Cash Distributions 194.2 183.7 743.6 727.8 PIK Distributions (gross)* 39.7 38.1 151.3 146.9 Total Distributions $ 233.9 $ 221.8 $ 894.9 $ 874.7 Cash Coverage Ratio 1.10 1.17 1.09 1.11 Coverage Ratio 0.92 0.97 0.90 0.93 Distribution per unit $ 0.5700 $ 0.5550 $ 2.2235 $ 2.1970 (Unaudited; $ in millions) * Notional value of paid in kind distributions. 3 enbridgepartners.com
Segment Operating Income (Adjusted)* Quarter Ended December 31, 2014 2013 Change Liquids Operating revenue $ 603.8 $ 420.1 $ 183.7 Power (62.6) (41.9) (20.7) Environmental costs (3.0) (2.3) (0.7) Operating and administrative (147.7) (126.2) (21.5) Depreciation and amortization (84.1) (63.9) (20.2) Adjusted Operating income $ 306.4 $ 185.8 $ 120.6 (Quarterly information is unaudited; $ in millions) Quarter Ended December 31, Natural Gas 2014 2013 Change Gross Margin $ 143.9 $ 151.6 $ (7.7) Operating and administrative (100.7) (110.7) 10.0 Depreciation and amortization (38.1) (36.5) (1.6) Adjusted Operating income $ 5.1 $ 4.4 $ 0.7 (Unaudited; $ in millions) * Excludes the impact of: (a) unrealized noncash mark-to-market net gains and losses; and (b) additional environmental costs, net of insurance recoveries, associated with the incident on Line 6B; among other adjustments - see non-GAAP reconciliations. 4 enbridgepartners.com
Impact of Line 6B Incident Estimated Costs* As of Booked in Q4 September 30, Total to Date 2014 2014 Total Costs $1,208 $1,209 $1 Less: Insurance Recoveries $547 $0 $547 Total Normalized $661 $1 $662 Unaudited, $ 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 Q4 2014 FY 2014 Maintenance Capex $ 38.8 $ 129.8 Enhancement Capex (1)(2) $ 737.7 $ 2,669.6 Ending PP&E, net $ 15,692.7 Q4 2014 Major Enhancement Expenditures Q4 2014 FY 2014 North Dakota Expansions (1) $ 219.0 $ 366.4 Eastern Access (2) $ 73.9 $ 706.8 Mainline Expansion (2) $ 256.4 $ 712.6 (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 Inc. 6 enbridgepartners.com
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