Q4 2016 Real-Time Call Brief

Highlights

Our $27 billion secured CapEx program is on track, we put $2 billion in the service last year, with another $6 billion slated for this year.

After accounting for the wildfires, adjusted EBIT and ACFFO per share were up strongly at 14% and 12% for the year, right on top of the midpoint of our guidance.

And recall as well that ACFFO and EPS reflect the $2.3 billion common equity pre-funding we did earlier last year.

We are off to a good start this year as January Ex-Gretna volumes were 2.65 million barrels per day another record.

Guy and his team ready to go, for about a 100,000 barrels per day of line capacity, with other options that should be ready to go in Q2.

In 2019, the replacement of Line 3 will provide industry with another 375,000 barrels per day at new capacity, which we expect to be fully utilized given the forecast growth out of the base.

We were connected to 3.5 million barrels per day of refining markets, which provides producers with great optionality.

Over and above Line 3, we have over 400,000 barrels per day of low and highly executable expansion on opportunities in the queue that can be fixed to match the supply profile.

The fact we are working our plans to add about 175,000 barrels per day capacity that could be available commencer with the Line 3 replacement in 2019.

Secured capital program illustrates strong execution on cost and schedules with and under $10 billion or so put into service in ‘15 and ‘16.

On the Bakken Pipeline System the final easement was released and we have now closed on our 27% investment.

With have sees our fifth European offshore win investment, we have roughly 1,100 megawatts of net capacity under development expected to come in service nicely over the next few years.

In EnBW we have a great partner, who is experienced in European energy and offshore wind, at $1.7 billion it's a meaningful investment and it comes over the 20 year PPA for 100% of the volumes.

I think this is good example of how we already making progress at securing some of the $48 billion pool of probability where the growth projects we talked about when we announced the Spectra combination.

And that inventory will support our 10% to 12% dividend growth projections beyond 2019 for Spectra.

Adjusted EBITDA was up $80 million quarter-over-quarter and little over and little over $500 million for the full year.

For the full year, adjusted EBIT generated by liquids pipeline was up $574 million over 2015.

Fourth quarter EBIT was up by $62 million compared to the fourth quarter of last year, driven by higher contributions in Lakehead system which benefited from record deliveries and a high toll compared to Q4 2015.

Shifting down to gas distribution, the story here is pretty straight forward, adjusted EBIT was up nicely $48 million for the full year and $22 million on a quarter-over-quarter basis.

Moving to Gas Pipelines and Processing, adjusted EBIT was up about $30 million for the full year and $7 million quarter-over-quarter.

EBITDA generated by Green Power Transmission was down $6 million for the quarter and $10 year-over-year.

Energy Services was up $17 million, compared to the fourth quarter of 2015 was down $33 million on a year-over-year basis.

Finishing of the EBIT look eliminations and others or E&O reflects a net unfavorable variance of $22 million quarter-over-quarter and a $103 million year-over-year.

Adjusted EBITDA was close to $4.7 billion, up 12% over 2015 and towards the higher end of our $4.4 billion to $4.8 billion guidance range for the year.

Current income taxes were down $22 million quarter-over-quarter largely due to some one-time tax optimization strategies that were introduced in the third quarter.

Other non-cash adjustments were down $64 million relative to Q4 2015.

Cash distributions and excess and of equity earnings were down $61 million year-over-year.

A positive of variance $186 million in other non-cash adjustments, primarily reflects tolls and fees recollected in cash but didn't recorded in EBIT.

ACFFO per share came in at $4.08, about 10% up over a last year and solely within the guidance we provided at the set of year.

For the quarter fund group ACFFO was up $35 million primarily due to strong earnings and cash-flow performance from Alliance under it's new tolling and service delivery model.

Notwithstanding a relatively low overall fund group payout of about 82%, distributions paid to ENF were up $25 million compared to the fourth quarter of 2015, which enabled ENF to increase its dividend per share full 10% from the rate that prevailed in the fourth quarter of 2015.

All together, for the full year, the fund group generated ACFFO of just over $1.8 billion, well ahead of our $1.75 to $2.05 billion guidance range, and up over a $1 billion year-over-year, due its larger asset based and growing contribution from Alliance.

Over the full year, total distributions paid by the Fund Group to ENF increased by $111 million to $252 million.

ENF raised its monthly dividend by 10% in September 2015 at the time of dropdown and again in January 2016.

Reported 2016 dividends per share were up 17% on a year-over-year basis compared to dividends paid in 2015 as a result of these two increases.

We just announced in January another 10% increase in ENF monthly dividend to $17.01 per share or about $2.05 per share on an annualized basis.

We are projecting the Fund Group of generated ACFFO between $1.9 billion and $2.1 billion this year.

Our updated outlook fully supports the 10% dividend increase we announced in early January and our longer term projections for Fund Group ACFFO continue to support annual increases in ENS dividend for approximately 10% per share through 2019.

In total, we raised over $10 billion Canadian equivalent in long term capital across the Enbridge Group through public markets.

This included large and successful follow on common share offerings by Enbridge Inc.

and Enbridge Income Fund Holdings earlier this year and over $1 billion of new common equity raised for our DRIP and PICK programs.

In the first fourth quarter, we further bolster the balance sheet issuing $750 million of rate reset preferred shares here in Canada and another US $750 million through the hybrid security issuance in the U.S.

Public Market.

Both of these securities received 50% equity credit from Moody's and Standard & Poor's .

Including these hybrids over the course of the year, we've raised total close to $5 billion in common equity or common equity equivalent funding.

At the time our announced of the Spectra acquisition, we set a target of divesting a $2 billion Canadian of non-core assets within a year.

In total we've either sold or have agreed to sold roughly $1.7 billion of miscellaneous or other non-core investments.

We are going from three to six strategic business platforms, which are going to drive out that $40 billion and risk opportunity beyond 2019.

It extends the industry leading ACFFO growth rate and the visibility of our 10% to 12% annual dividend growth outlook into the mid next decade.

We are also making headway and developing execution plans to capture the $540 million in pretax annual run rate synergies that we talked about by 2019.