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Enbridge Energy Partners
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Dan C. Tutcher
President, Enbridge Energy Partners
Business Strategy
EEP Business Strategy | | Enbridge Objectives |
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[CHART] | | • Low cost of capital vehicle to acquire mature energy transportation assets in U.S. |
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| • Limited capital commitment with effective control through 2% general partner interest |
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| • GP incentive distributions provide future upside |
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Investment in Growth Opportunities
• Disciplined Acquisition Program Spawns Additional Acquisitive and Organic Growth Opportunities
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Note: Acquisitions shown as of date announced.
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Spawning Growth
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Spawning Growth:
Natural Gas Example
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| ETX | NETX | | |
| | | ETX Transmission | |
| ANADARKO | ZYBACH | | |
PRODUCERS | | | | MARKETS |
| PALO DURO | | | |
| | | | |
| NTX1 | NTX2 | | |
| | | | |
| | NTX Link | | |
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Abbreviations: East Texas (ETX), Northeast Texas (NETX), North Texas (NTX)
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Natural Gas Drilling
Lower 48 States
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Current to September 16, 2005
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Natural Gas Systems
| | • Focus is Mid-Continent and U.S. Gulf Coast where long-term supply and production outlooks are positive |
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| | • Strategy is to develop “Circles of Influence” by capitalizing on close to the customer advantages |
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Natural Gas
Access to Multiple Markets
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Crude Oil Infrastructure
Development Plan Overview
[GRAPHIC] | 1. Athabasca Pipeline Expansion (2006) |
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2. Waupisoo Pipeline (2008) |
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3. Southern Access Mainline Expansion (2009) |
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4. Spearhead Pipeline (2006) |
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5. U.S. Gulf Coast (2006) |
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6. Eastern Access (2008) |
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7. Southern Access Patoka/ Wood River Extension (2009) |
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8. Southern Access St. Paul Extension (2009) |
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9. Gateway Pipeline (2010) |
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Southern Access Expansion & Extension Program
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Stable Distributions
• Long-life Assets Underpin Stable Distributions to Partners
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• Projected high level of capital expenditures on internal growth projects over the next few years is anticipated to limit distribution increase potential
Note: Annualized fourth quarter distribution, except 2005 is annualized current rate
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Diversification
• Acquisition of Natural Gas Systems Has Significantly Diversified the Partnership
2001 EBITDA | | 2004 EBITDA |
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[CHART] | | [CHART] |
(1) Acquired in November 2001
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Solid Total Returns
• EEP Has Generated a 10% CAGR Since December 1998
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Note: Growth of $10,000 investment assuming re-investment of dividends
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Enbridge Energy Partners
[GRAPHIC]
Dan C. Tutcher
President, Enbridge Energy Partners
Appendix
MLP Structure
[CHART] | | • Enbridge is General Partner, through indirect subsidiary EECI, and has effective 11% interest in the Partnership |
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| • EEM is limited liability company - only asset is interest in EEP. EEM pays nontaxable in-kind quarterly distributions - sale of EEM shares taxed as capital gains |
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| • EEP is nontaxable master limited partnership - allocates taxable income to partners. EEP makes quarterly cash distributions - treated as reductions of tax cost basis |
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Appendix
Natural Gas Demand & Supply
Source: Purvin & Gertz 2005 Market Outlook
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Appendix
Commodity Price Exposure
• Cash Flow at Risk (CFaR) is Closely Monitored to Control Exposure Within Tolerance Limit
[CHART] | | • Major portion of cash flow derived from predictable fixed fee or cost of service revenue arrangements |
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| • Direct commodity price exposure is reduced through hedging program |
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| • Exposure to interest rate volatility is subject to conservative debt structure policy (0-20% floating debt target) |
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| • Largest exposure to non-controllable risk is commodity volumes |
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Enbridge Energy Partners
[GRAPHIC]
Dan C. Tutcher
President, Enbridge Energy Partners
