ENB - Earnings call transcript Q2 2018

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Operator

Welcome to the Enbridge Incorporated, Enbridge Income Fund Holdings, Enbridge Energy Partners and Spectra Energy Partners' Second Quarter 2018 Financial Results Conference Call. My name is Carmen, and I will be your operator for today's call. At this time, all participants are in a listen-only mode.

Following the presentation, we will conduct a question-and-answer session for the investment community. Please note that this conference is being recorded. the to turn Investor Gould, now Relations. will call Jonathan over Director, I begin. you Jonathan, may

Jonathan Gould

call. and you, Thank the vehicle XXXX are and to morning, and President Enbridge sponsored You, Officer. President EVP Transmission this of and CEO; EVP earnings Al and Officer; quarter EVP Monaco, Pipelines; Development second Liquids Midstream; Guy Financial Great. joint Whelen, Good of Bill Vern Inc. Carmen everyone, me morning With and welcome and Gas Chief John Jarvis, and Chief President Yardley, EVP,

entities vehicles for strategy Our the order joint throughout. include enterprise-wide, while again a call perspective strategic, sponsored on commentary and provide will performance all incorporating discussion of and specific financial of the Enbridge each to consistent the in of

usual, the encourage is A available phone will per shortly with this the on thereafter. along of I slides. later the and posted to transcript supporting listening podcast call website and line the webcast will the those follow be replay a to be today of online call As

terms broad limited available, we have only. calls agenda will investment the of prioritize Q&A, time we from and the In given community

If please inquiries our to one to hour, direct team be to the of not to able target happy you're again get respond everybody. who'll call your be going We're to roughly member communications immediately. to a the media, keeping and may

we as for questions available your follow-up limit ensure be your always, But please questions our So, will detailed necessary. Investor a to afterwards. more and and team as that one you for will Relations follow-up

information future call. on refer we'll and to expectations By about out information outcomes. we Before point assumptions begin, its this nature, forecasts, I'll today's contains that forward-looking

significant both SEDAR risks affecting in are it's its and available more ours. on you disclosure factors affiliates and our public subject and business the and risks the includes a to that systems. including remind summary could we Enbridge that and filings of uncertainties affect the Slide X discussed every EDGAR So, fully

that, I now the will call Al turn over with to So, Monaco.

Albert Monaco

busy Thanks, and on Jonathan. fronts. many a Good Enbridge at quarter been strong morning, everyone. It's

Day our we I'll So, shaping start that the we've our and on up. out priorities John at then recap on rest made numbers good of update QX year financing in review followed a laid vehicles regulatory usual, by business and as Enbridge progress plan. how by more financial is will I'll highlighting performance the including update. the then the detail and, sponsored the the

Turning to X. slide

across results the As strong were with board. QX, the QX

based I we the above two sheet. and Quarter halfway and we've we'll the we're what On pure financial of utilities non-core biggest significantly XX% moved outlined billion pipeline So, or agreements as same or X.X quarter CAD CAD delivering growth to We're the these range, be Operationally, our projects. of we're all slide top pipes which months than X.XX by the target at to from year-over-year at pipes Mainline time our full guidance a comparable quickly share Q is secured the this balance distributable we we plan. record is funding that This cylinders our came model numbers flow the flow for Liquids expect big strong been cash last on shows half. natural billion $XX our we've but in the gas post first secured is our projects throughput results remember Spectra. asset picture up now the the sell our think driver coming, few the that on the These delivered double performed and just reliable performance this very businesses and DCF view of year, through cash per and share to year CAD we and utility and X. expected delivering we've over see both billion first last core reflect and here, year in And fired utility per on with in progress concluding half monetize strengthening we X a We've growth made of set. assets, the since more growth. well.

of sales a with QX long-term A to hybrid of Our goal to financings things the call achieve days couple worth here. year. ago, EBITDA And our of couple clearly of the CAD now is out is asset by five EBITDA times debt X.X sight. our in this outlook, we target debt closed five end the billion our and XXXX times of to

our is even XXXX. nature so, target shows our to trajectory assets. of on X.X long-term by But low that outlook growth risk gets our based times secured us First, a the

plan the of X Second, three-year sales. through only included CAD XXXX billion asset

X.X gives added CAD us even billion So flexibility. the more financial

And the clearer back later line became Line growth you on. we're was XX to flow sight that cash in the As come our saw route on I'll one from of targets. Minnesota. delivering results, to as X growth needed XXXX permitting on June approved

and are to by is acquisition the of committees. of of our gone considered key made we've now right Spectra we're Those up special structure. Another priority each being And sponsored has track to streamline roll synergies. our the offers very public the offers vehicles. well, with on business Integration and all

and year. opportunities American opportunity We'll later extend update our acquisition new point us has North growth positioned expand fundamentals with strong, Lastly, very uniquely you energy developing beyond Enbridge XXXX. that more We set. Days to we're the this that remain Spectra on to at believe

minutes Let update X. me Canadian slide on the on sale now G&P starting with asset a the business few spend

bit here. of a context First,

received with the on financing the and CAD billion our well also G&P the accelerated as market. The was opportunistically proceeds target, pipe focus X.X core mentioned. assets we in summarizes CAD This this good forward takeaway best-in-class as the for deals are and strong worth X have tax I company. lowest target utility asset financial. deals both on minimal allocation sale its that above have X.X and we multiple a core noting that by we cash could value a the here all well in first was expectations on CAD While decision capital closed, on Slide also the Canadian at the were offer. our it the in strategic flex risk if valuation times XX utility we to The bidders, of how being The so exceeded and advanced trigger franchises and our process assets as now highlights totaling in parallel that the focused the And we've here two valuable the billion billion. on the X that today's hold noncore interest sound and saw pull pipeline process capital we own, three added roughly redeploying is as deals that it came but EBITDA, year our and out brought door and we strongest deleveraging ran hit leakage. asset competitive recycled these is

Each along reminder, future a our gas position As Alberta business from to we assets, our to T-South, pipeline for BC BC and system T-North core and highly Chicago. strategic are with retained expansion. liquids-rich Alliance the and

importantly, just and technology permit. steel you EIS we preferred X. and infrastructure route significant construction to Now, route, when the a here economies, again, Most to in concerns route more The economic and and XXXX next. with in approved it provide extensive history, we will be on refiners tribal X it's regional provides also to for recap impact, replacement of done Need full increased is and owners it PUC-approved a significant Line a X a and jobs route. replaces stakeholders, in leading of and assured flow, the rigorous of to which reliability X the account minimizes a on nations, this all of in process same cash tax our and nations, input local The acknowledges, a of And took surveys will great-paying driver very are reliable is X After disruption reached tribal latest big project. see what's boost and virtually property update a critical land Line and this are know benefits Local slide revenue. into let as designed by included cultural from the that will the millions are the everybody. we world-class milestone along which nice Minnesota, Certificate annual the capacity Line important supply. methods, our environmental And, benefits the finally, PUC outline but Line and so our me ever will project entire but route. our be that largest customers. it

industry. the a it's So outcome great for

case that We're and on to a September. our today's me pipe good by maintaining still, of execution we're PUC you've QX to by from And year. estimates, we billion the in of should model terms big stakeholders makes secured slide to note, in inventory. of the Wisconsin. our say tied the it's for through we're we is of be So projects. process XX% this On segment cost think position there's Canada, And permits the as of if heard on from remainder as thing on the and Overall, be making begin XXXX the we here. input for PUC And QX in we there said is of be ground, that next be to the success really respectfully. federal it's stood to through state better, I and the here in collaboratively and the past. XXXX and and out done service we've see order season. the in we're completed X was very work half work in construction next, the that secured environment. course, here, in written expect a Final us headway but And the certainly projects is before, clearly in how get one milestone. working track $XX construction what's Elsewhere, approval in in that preparing for and the the and still We'll second

and offshore of full slate you lateral European the B.C. wind to We're brought UK It's region of on construction NEXUS in Rampion into Stampede year. to in-service. remaining and QX offshore $X here, is $X we offshore a in the including This experience farm us. update and the here overall quick completed Slide bring commercial by Bill done, couple projects oil what build late we billion Michigan large And As commodity. the diversified a we've for achievement working on very important we're gained going specifically is well this into for here the QX, about to also in commitments. had operation. and this been that's is billion great two team already. service track facility, done expecting nicely XX% here on XX see projects the We're was a first size, deal side projects year; the and an increase Ohio. the of gas volume in and T-North for are on gas of

interconnects with service is later as the everyone Coast deliveries opportunity Valley future. in there Construction region hope We see pretty in growing that on capitalize strong we're building to out and that the be cost Texas continue you knows, in low power us QX. in and big have the It's for which, update should another pipe links accept in ready North in to demand U.S. on for think export the Gulf along to that year. network supply to gas to part we we'll drive is the in once is the complete the Crossing an I much project line, American set now gas-fired for momentum South interest Mexico. is going of

So two projects. progress good these on

our maintaining now our a a high two standards Gas see would come that capital We're and And you two we otherwise that By more decision for for together. utilities slide XX safety and By on plan to may includes savings term would be remember these and our on from and escalation if mechanism. amalgamate Ontario streamlining, doing OEB in Moving that, close be Cost to is would separate. efficient has getting we utilities. rates and all here, tracker. kept what Union very can they we improvements actually customers and this this been can hearings sharing earnings thorough and an the wrapped while reduce now The one EGD update in process. the to through OEB shareholders evidence regulatory an June. a flow applied a XX-year service. we've rate to up Again,

in it's is to at XXXX. OEB's that we'll whether point, decision we'll the hands QX. determine out, we move obviously it be the at or really, sometime in decision now with think to look So this amalgamation in for Once a ahead QX starting able

brief slide me, sponsored to for the Lastly on rollout. XX vehicle update with a on

May each for perspective, knows shareholders everyone these of financing Enbridge provide the reliable vehicles. with Rolling retained would be investors at our respective in offers them cash our in of a sponsored unitholders the from will we a public the one source of SV the So under getting streamlined roof, of it, our all simplify credit vehicles' From vehicles look each and and bring buy security. profile. the From their in structure cost-effective longer maximizing made our Enbridge, strengthening perspective, of and flow a sponsored in and vehicles or to of no each to floats. ownership assets

We a we've cost of vehicles. pronouncements offer, better PUC on liquidity. results continue an We that each accepted. the a and have base, we the on vehicles enhanced are offers asset at recent change credit to believe from Line asset several that Enbridge positive optimistic lower strategy, The FERC the our well-diversified since Obviously, as our And compelling. the a offers decision growth good very benefited these and outlook, a sales, capital has to be sponsored profile, X. view and strong including milestones will this don't stronger made announced, our of remain this sponsored

I'll that, it to hand over for However, QX be provide as results win-win With need to shareholders. John update. to now always, the all the transactions

John K. Whelen

comparison morning, XXXX report that an reflects slide XX financial noting we've to combination and of here I'll look. provide And the first Well, of a everyone. been with QX through is this strength quarter-over-quarter and company. combined the the for thanks, quarter-over-quarter pick the good It's Al, up on able review time apples-to-apples, coming performance worth clearly of in the for quarter.

adjusted consolidated strong in As underlying XXX by adjusted of over of period relative you performance for can compared the Pipelines impact million CAD quarter, the see, last up across execution ongoing our of a EBITDA project CAD EBITDA driven all same million businesses. successful up Liquids to XXX little to QX the was operating year. was XXXX, and over

revenue at XXXX, product higher to introduced the the which in blended rates. part in growth Here, the including driven U.S. to very a million were allows by us over hedge unutilized program we per Average higher a that otherwise tolls X.X on was capacity. Mainline ship fill heavy lines a from late initiatives benefited Mainline barrels factors. on few optimization our day, strong and by light capacity deliveries facilitated also dollar light

spot see impact in higher second service our several significant Secondly, part pipelines. for that which latter into access QX resulted market volume a the placed of regional sands And results oil of reflect crude to during the in demand shipments the we continued downstream XXXX. Gulf projects strong Coast finally, were on U.S. quarter,

slide, was and CAD up quarter compared second Midstream Gas when to XXX down of Transmission million the XXXX. Moving the

growth the impact during XXXX, Here, systems. Eastern online adjusted well including a as other Sabal number projects several in smaller expansion primarily of EBITDA Trail Algonquin period-over-period projects of reflects on the and Texas as brought

benefited Lastly, from fractionation Aux and throughput Sable DCP and from higher prices commodity margins. both increased and

of the into service also reflecting last CAD on was Both normal XX about Gas significantly XX the a was expansion in attractive widening prolonged differentials, contributions driven This a year. Green year. very to location of million in offshore UK by was project quality from by franchises quarter-over-quarter of XXXX. adjusted of Services of Rampion million EBITDA improvement month benefited the several quarter Al from margins. opportunities capacity increasing CAD full driven quarter utility CAD in by increased The during this million at basis, season and lock up Turning strong the to XX projects primarily than which EBITDA the a wind increase distribution, in which crude also placed gas as provided EBITDA when with per year. heating operating April QX earlier, compared Union reached quarter-over-quarter. last performance colder Power Energy oil had which, mentioned to primarily another about in second

Eliminations to and Other. turning Finally,

hedge primarily quarter-over-quarter last the year. to XX Canadian we where reminder, O&A a also gains by As to due losses improvement lower The stronger is QX more and FX is up pick we about any million corporate and a of dollar this when with to segment corporate where is hedge book associated losses QX program. favorable unallocated driven in of look and our CAD XXXX hedging rates compared hedge

So all, well another strong the into of the us which has year. set up quarter all heading half in quite second

slide to strong a performance Moving cash Quarter-over-quarter, XXX the large lens. XX slide. through. business flow distributable XX% EBITDA was went change Other in on flow very part total in cash uptick significant impacting up broken in this through that the on, summarizes CAD the I the by of just are factors close DCF million, driven out

incremental Cash impact joint in maintenance business You'll well with our or slightly billion. back-end than Maintenance will QX guidance into also the second is be number during after partially coming during a subsidiaries lower investments see distributions benefited our little issue. at CapEx service while XXXX. last from of owned improved our a of than quarter still projects year. annual X.X capital as the performance from quarter last as of new expenditures equity ventures, primarily flow of CAD normal, result maintenance this of a as the loaded maintenance full was were more capital a year expect but work timing we year year that higher spending of line in This

share Halfway for the generated about the in achieve the synergies to mind, relative Over to and on up a our guidance. the that from X.XX, to X.XX noted above shaping of let's of impact came we're we're to core service our continued year, and per the is transmission quarter And of seen in the when through clear at new operating our This Al performance full growth we're performance slide resulted very the wider CAD on turn X.XX. CAD basis little into per opportunities XXXX. year in systems strong businesses, As with Al savings acquisition. the how at XX% quarter ahead being strong services. we've uplift from up share CAD an business, already our has liquids have Spectra increase base good gas already and projects energy differentials of and following range by has briefly commodity a track stronger on and DCF our volumes XX which higher of well the within realization second and the and guidance spot reliable of coming margin prices cost and expectations. first results mentioned, DCF arbitrage both strong to reflection compared outlook big that

our of per top turn going at our share we the guidance range expect the a now remainder in for quarter. second deliver range. sponsored June to unchanged. the in of vehicles half positive guidance our the and solid I'm of to performance now to annual DCF the of the year, the is Looking balance performance XXXX, end of our through But given very outlook

our Based and the base tax policy increase impact end the Put is implication is to benefit be after for related into DCF to response announced, of rate regulated account mentioned the addition potential continues future could as way, the disallowance. to In its will our cost to and income second of to July, results. the execution what challenges. turning is year-to-date request announced year. subject starting SEP to by our on expected ultimate rate our at the impacts to the uncertainties first on allowance to framework on earlier in of tax last dependent brought to from With timing is think there accretive the a collection of CAD U.S. timing a policy now a of another range. tax from cases assessing to each service elimination I'll SEP's At SEP on of and XX view, ongoing to in outcome income implications. of into but uncertainties reduction to be distribution from from of or the performance, that of Al with the tax or Spectra number and to relative ADIT to changes performance base including largely order allowance approximately rehearing I'm quarter the EBITDA the the very here, tax If XXXX. CAD story its cases. effect quarter recent a announcement, increased XX, implemented, DCF the DCF the contributions owned Again, on respect offset we respect and other this I reform It's rates number the FERC's quarterly projects steady its an in increased much continuing days of slide of million MLPs. second to other near-term briefly, all the again of last incremental distribution XXXX pipelines over team respect outcome future early by we assess As the within final settlement announcement here quarter, about impact the be both to and service X.XXXX on applied the and SEP X% the by where the assets be with in rate go to customer Energy through comment removal the the revenue translated immaterial estimate guidance ongoing original of track the year-over-year. is remains Similar assessment the stage, coverage organic regulatory by course policy quarter the with policy per of deliver XXXX. and of ongoing Partners was growth into most long-term taking the is were unit an this how SVs things which as equal. the on FERC and placed

Turning Enbridge low-risk Partners XXXX. on post business of Energy EEP XX. results model to deliver now indicative restructuring slide to early steady continues EEP its or in

lower last and decrease QX EBITDA was U.S. year. on mainline of slightly disallowance results to the were The mostly income QX to DCF FERC than attributable due Lakehead reform weaker However, tax tax policy. and the

a recall toll may the collected through a the is of to Lakehead surcharge changes You facility that FERC portion mechanism, service which definition. with adjusts of cost

incremental allowance offset placed So and impact was of reform it were impact of already of service partially change EEP, quarter into to tax forecast that, our service tax eliminate EEP's from of and would approximately MLPs pipeline by results cost rate of FERC the year. of CAD ADIT EEP's impacting contribution elimination XXXX. a the the which add in the in June Bakken the per XXXX. interest the to With to in full a at system, million ability in of early the The respect Lakehead generate to from on policy for DCF is is isolation, XX performance assessment lower base

million U.S. approximately estimated allowance which However, negative for the tax offset impact at year. and we XXX tax CAD partially elimination of reform previously the this only of the per would MLPs,

well residual by earlier, mostly end was convert Canadian hedges to This rate oil XXX exchange placed Mainline with Liquids firm dollar business strong increase into on Bolstered with quarter from sands Turning and second Group our toll were second Fund the Alliance DCF the year tool of that used service of trend quarter Fund a higher higher mentioned as Group as the Fund pipelines Group, last the driven whereas contributions contributing were higher up demand to from upper guidance Group and Canadian XXXX the those the another U.S. to effective from benchmark for the by performance continued higher about for service the ENF towards continues a benefited into regional CAD strong Pipelines new million Also revenue and throughput XXXX. to XX Group dollars. DCF slide highlights in strong second I its pipeline. on Fund quarter, continued range. performance Fund shorter term DCF along

increase not the or revenue actions, U.S. the Mainline directly on or decrease FERC increases create in tariff Although rates under an the Group Canadian the by Fund will Mainline. is mechanism, impacted on IJT reductions the offsetting

As just toll can increase, if eliminated ADIT equal, base. other should all Mainline U.S. rate added be things and noted, to

preserve action on this itself an buy-in to tax nearly FSM Mainline, the other Lakehead's However, to tolls on of would unitholders, in the would That service rates. offset of sufficient be allowance revenue cost said, of not negative from elimination of its the any to at potential undertaken to serve fund. allowance a tax the U.S. including any public a offset uplift impact

some very the first we XXXX, made funding. on good really So finally, XX, progress half turning now have in of slide to

lean we hybrid the of from the through priorities. of from enable first debt-to-EBITDA number and strategic could Canadian just forward. indicate achieve see through the sales these given longer-term that going growth provided times of in our on from proceeds I of a metric that and issuance, which later XXXX. our end We'll to target funding year to Proceeds actions of to would the has turning ultimately support the from flexibility sheet to we've G&P total plan, generated development track and EBITDA X.X of the closed our position. next can excess secured in X our these including we've external have closing program the or than our DRIP continue of with incremental The hybrid business conjunction can additional remain year on low-risk recent us graphic finalize of long-term this those of DRIP this a our year that together planned by of comfortable equity flexibility half the deliver the to of the credit right the flexibility strengthens deploy and targets G&P plan. the a well left-hand with Canadian funding tranche we our completed sales all we growth strong more in very asset comfortably securities week targets capital DRIP, billion actually the sale the the much consideration of you financing projections required the to earlier this to As raised the further finance on reduction first the CAD side slide, credit we earlier-than-planned with with continue earlier into proceeds maintain to off The create transaction of nature take there. our divestiture will asset further metric of even of the year long-term and asset balance to reduction planned desired debt financing would long-term say and suspension together strengthen

in turn very into last results all, positions the to a half progress heading back the and good that, up. quarter sheet on it all the with balance of strong solid which us So, Al I'll well With year. very wrap to

Albert Monaco

now XX Thank This you, John. slide here. on is

upper done come accelerating than target, growth very cash and been put sale program de-leveraging more increasing half. just ourselves many efficiency the Enbridge on on capital We're the the results that's generating our this QX our doubled giving huge of are heard, full-year position projects in and a business We billion And, financial progress streamlining course, We're on organic program us the reached were We're target. of delivering and likely executing in X in and to year on additional flexibility, and well Minnesota. for flow. that's priorities. asset operator Q&A. in cost to while productive slated the our With and milestone of structure. As with to it the quarter open on we been simplifying The at execution with you've the line the through it's back the CAD guidance Line up fronts. the hand this focus a year. pleased strong finally, to achieve I'll rest decision that, through And to we'll now on continue X the

Operator

Thank you.

session. question-and-answer We will now begin the

Our from first Tonet Jeremy question with JPMorgan. is

Jeremy Bryan Tonet

Good morning.

Albert Monaco

Jeremy. Hi,

Jeremy Bryan Tonet

with dig Line very just X little here, a some wanted here, replacement off material just progress quarter more Minnesota. with in in Mainline start wanted the to to but bit in the I

half there. guys Just gives of there more wondering could lot of and on been development you There's a if Timeline unexpected of like issues seems been what still bunch in water with there's pipeline confidence back that's permits. XXXX. you permits a expand of a kind the bit

any you So just Thanks. be there where going? barrels Could if there's projects? downstream And like lead there? expansion, need this anything you expanding then Flanagan? to would X, helpful. do wondering Line more successful new upon color report other And expansions then growth to these see Do

Albert Monaco

I'll we'll Okay. generally with just the That's Jeremy, start it get quite Maybe a here. list, environment. after but

fulsome, I covered been here, process, which was including out, routes land we've to significant stakeholders. extensive all case to issues And stead As and that's consultation work what remarks Remember are is is of tied I this in here, my arise. referred thoroughness here, entire you factor, the that But us pointed done that XX% difficult. think what's already the probably things think potential with through other very good in very all yes, and the in hold EIS around might got the I the Jeremy, really the going up. big the of

finalize process, I stead hold permits to long project. been for we here normal and that federal it's kind state So as think good in this are a that's but of us the going

On think that. to Guy get other I of I'll things some specifically, that's the So speak the maybe, big to picture.

D. Guy Jarvis

years. I that, have Yeah, the thing would lot add construction over the to we in experience think only Al, is of I a that Minnesota

we to at planning, that. on get be handle we'll we able it really once gets which the to we build a construction So feel pace to when around good have

So is our date. the in-service in combination experience our Al's driving construction that's it. of confidence The what's and really comments driving

this, the terms to barrels be of conjunction expansion of we'll where go. In Access with going Southern In are pipeline. the our completing

So into core only market into that's going access we've where our to pipelines barrels got to in – put our where not position a get the been as through superior have our move ability levels the high, market apportionment well. to and but us into

we're shape So there. in we think good

issued from reports discussions of resulting as the were all the that. of of are that to in to, nothing are some follow-up terms of to Line report. State In X, new and really We've now Michigan required our we

Jeremy Bryan Tonet

XXX FERC point? it terms question, just fold-in could. that July. With on That's it helpful. just were wondering like based on Spectra, of was today, regards the the expectation if kind or I out, at when million CAD last to impact, was a one seems And Thanks. north was non-material laid that be predicated revisions And could in the

that wondering into how And the to just the if so, And you process? comment, plays this think understand able extent correctly? I to you're

Albert Monaco

your your I'll much remarks. which with up Maybe I think behind I the to pretty John's think impact, Well, of summary lines question. respond to what's try Okay.

we really factors. others. time when were on was all, roll-up the and of was it out with here, but one announcement certainly The at strategy FERC of the them, situation there First came based several

And no sponsored strategy we're in today how change roll there to looking vehicles. up so, at really the the is

compelling vehicles think at in I the the of And, and these it with longer all essence view, runway think raise a you together. respect at remain reliability when the how effectiveness the good Jeremy, can to the here time so very least of are of have offers factors of at look terms I and capital. we've in the made don't really, sponsored is, they how our term really the

the and sponsored from Enbridge that's think business. I both vehicles a on from the perspective stand-alone

ability the dampened vehicles least has at the in view think I So our compromised. grow for been to and

going to refer to Secondly, there the respect the uncertainty applied. to be rules some are heard of you John how with

going stand-alone typically roll-up think, balance us of general each at that As I binding case-by-case the broader policy, think, is obviously is all has think capital, those. not of liquidity. These benefits and of things and of quite you expressions they that strong base, biggest very measures through to in I XXXX dividend those asset their obviously the overall say, be would and versus one the terms and this you Maybe as final it's is flow is these in Enbridge, strong. transparency there's spot, determination. point go in Inc. be owners when well-diversified issues, terms outlook. to of significant are of And rule. bring sponsored know, the a on receive to their you look that consideration vehicles objective cash much all-in-one And the energy looked of growth I mentioned, on sheet, with can at distributable the heard terms a a cost I've better lower going

this the the you So obviously think I little shareholders from vehicle terms roll-up. of while. gets of from over of the seen Enbridge positive see if would some that you've already the unitholders sponsored of look announcements what actually And impact in benefit kind to last share at price some and this

Operator

question our And is next from BMO. with Ben Pham

Ben Pham

Okay. Thanks. Good morning.

Albert Monaco

Hello.

Ben Pham

more that in one on question. it you is to share. bucket, last you've growth ahead put earnings question keep to It well – I'll started bit your and the this at is and quarter, quarter, when last slides looks the like The hi. moving of really per a three Hey, at least EPS looks look all the of in like quarter-over-quarter. year

does are extent? into more trajectory play dividend and that looking before with some than earnings at now you to reform So, tax U.S.

John K. Whelen

share that. to earnings don't it's share earnings on in guide to John. particular this quite look, always and stage. EPS We share Ben, at per per We addition DCF and at always frankly, per report

seeing guiding are we're we'll I on the share. say DCF At over right, important uplift to EPS moment, continue our per So, that and time that. to some and you're strong would report in both we're

flow ours, are critically like earnings So, both cash company and important.

Albert Monaco

we're to at I meant important. – very coming necessarily think back, on was Yeah. focusing that years we elevating were don't now that's John transparency projects elevated flow a on the ensure we and that deemphasizing that really of from it distributable guess be us to when all we're said, it but Ben, focus the continue as the I if cash, doing. cash few it go EPS, was the so, both you

Ben Pham

All right. John. Thanks, Al. Thanks,

Albert Monaco

Okay. Thank you.

Operator

Thank you.

with question Securities. next is Our from TD Ezergailis Linda

Linda Ezergailis

you. Congratulations a strong on Thank quarter.

Albert Monaco

Hi, Linda.

Linda Ezergailis

we given Maybe for look you've can in initiatives cetera. deleveraging, that on Hi. update an picture et just growth big made financing, progress your significant

export Specifically, option exercise what within Coast any an And the must front? its Enbridge Gray or there pipeline maybe context, your gas and for Gulf on finance developments those to be Permian and that U.S. to Oak in how might place strategies, comment acquire you initiatives. on the can you interest and oil are

Albert Monaco

Okay. a oil Well, you've and question. is called great gas, out good and both it's which

So, Bill Coast maybe can then Guy we'll the particularly and is Oak first, do and attack the Gray what side. attack Gulf maybe have gas

D. Guy Jarvis

Yeah.

and they We're the going into get to ramping speaking, we in region and broadly think think pursue every like given in our very to interested continue We American it's up say ever efforts of terms are So, – the assets other the we our obviously Not there. I how of nature movements, North region. the more be to it than to opportunity in oil one of Gulf competitive with to Coast. important U.S. been. what exactly than relates important it's them down

continuing to In terms to stay a that in season looking shipper to to support. that the and decision of to pleased make and are We're assessment that project, overall have second probably our the close on the we'll here see open fourth additional of Oak in Gray Oak, Gray developments be some continue to seems kind we resulted finalize of on quarter.

Linda Ezergailis

you. Thank

William T. Yardley

well way up fortunate actually the lines turning side, gas the with guess I Mexico. exports exports with we've Yeah, our and LNG to to in footprint pretty been the

I in we're shape great think Valley Crossing getting on and it complete.

Eastern a Crossing, have and actually expansions well-positioned Valley and Cameron number of Corpus for that Freeport connect also Sabine We and happens Brownsville. Pass, anything in we Texas really or into and through

plus Permian, of those nice lot the coast for of growth had of a to in gets And some the capture both position that'll I as the be the along in the participate with Regarding pretty Permian DCP some built expansions out opportunities good export east. we Permian which industrial opportunities there. to needed think we're the has

Linda Ezergailis

great. you. Thank That's

Albert Monaco

Thanks, Okay. Linda.

Operator

you. Thank

of Dennis from America. Bank is question with Coleman next Our

Albert Monaco

Dennis. Hi,

Dennis P. Coleman

Yes. Good morning. taking question. Good morning. my Thanks for

to in issues side? the were a on issues that OEB with What the you'd at of which Any of mentioned me. what to and decision the concern? for distribution sort the decide mind. hearings that particular couple do, a look the my in question be sort You might Just have raised of raised

Albert Monaco

question, That's a Oh, Dennis. good okay.

work proposals, regulation guess. in of that the factor this arises. so, the kinds that it's unusual something been decade that's and particular is typically, case, given case. be believe last performance-based all with Typically, over I just our applied productivity done usually In these shouldn't we the not So, or

of Other years. for that, order we've here, applied in position. can structure The XX be make productivity a think need we comes initial recovered investments So, we this pretty XX-year properly. in in usually than We the parts that up. think term that I the ensure term we're solid to

that well result think in like for we term passing the the our cost I in terms through of outlook, savings. as and outcome will So, customers XX-year best

these as in two with broad Dennis. to say, than Nothing to comment we particular So, would other outline evaluate that decisions when make the get are usual, I they back, sense. the have to areas, those them see if we'll

up just really, So, what making discipline lines process can it that our of and do. with sure part we it's of

Dennis P. Coleman

Great. for Great. that. Thanks

this through volume? Is of second other we before there volumes the on one the Just we detailed upside more one. Mainline. any you Obviously, volumes expect that with LXR? to very get have that year expanded strong half the Should to

D. Guy Jarvis

a volumes we've this little August stronger the the very first is We're moving strong seen again. in outlook what than half. is probably And and Guy. even quarter Yeah.

capability lining So, on supply they up can their We're comfortable really on kind available. is is It's should, our own the the with Mainline that incremental sure should. at way we the margin, refineries it operating capacity making the much make end have of the do available situation perform throughput. and just the like that how we

the within margin, little for nothing the dynamic around a there's probably market going to and on change So, that's whatnot. upside, of potential but a pricing Alberta bit

Dennis P. Coleman

me. it for for That's Thanks that. Okay.

Albert Monaco

Okay. Thanks, Dennis.

Operator

Thank you.

Our Kwan is next from RBC Markets. with Robert Capital question

Robert Kwan

Morning.

you on some of but headwinds sets in make range. to what both seeing XXXX XXXX the any And kind about you floated share CAD you're can tailwinds each? both just well X with to wondering as comments out and that can with you talk the Just the of of guidance, guidance originally

John K. Whelen

that Well, continue I as It's the performance We looking this our and we particular think if business will Robert. at XXXX, John. a really steady change the is of reliable day. see at end expected, you're think and Certainly, don't out stage. beyond of the

that But years. goodness I to the seen don't year could to of point, Some this carry our about long-range forecast. into we've would impacts cause at well think thinking start this us subsequent

Robert Kwan

Okay. on just And then – sorry.

Albert Monaco

Robert add we Guy's given – in the the sorry, timing just just liquids where the see there And thing pipelines given just coming business is in. anyway, maybe only – other to of on side potentially

us impact doesn't this period. through three-year it think I

overall, to think downsides John's from the Probably right. I So, as nothing and much far upsides original as target. add

Robert Kwan

and turning just it. finishing here Got Maybe the on FERC announcements.

wondering, noted potential in about that the top And your terms You items you are still of you terms subsidiaries? materiality feel the a to number two just I'm of the can talk in and uncertain. as in mind that around or moving view you three items you of impact

John K. Whelen

that's just where, was drawn really could basis. talked on as week seen Robert, I case-by-case that full corporately even and recovery allowance a of for of be And question MLPs, into an dismissed a cases. the think for evaluating is that has owned They example, a left of quite or result what's there those I Well, tax been unclear. application some cases impression evaluated things a this policy the think, be about announced we've

whether that different I treat big decision issued you think of or the of chime in on should supportive ADIT the way it the the fairly they FERC one. subject think, was that end the in, the applied any this which perspectives there taking, particularly to clear event, not, written was you NOI entirely day respect direction thing to they a I was forward and the Bill earlier. So, that's going At with was FERC might will, how of how were the were might if be want and

ongoing out fronts, will this thoughts your if I don't cases with of of to So on there's Bill, dialogue and any think rate know, if there. a how both go I through uncertainty got you amount play customers. significant those were actually you just

William T. Yardley

that not clarity that I provided getting hard after rate sure went clarifications get don't strategy. XX, we July to lot It's I'm But when decision the a Mississippi of us. it and that. whole the for without whole filed, into receive a lot to River It's case long Bill, it know, sure, is, Robert. then for add not enable I guess

So, just our lot to we we into with And still have rate cases, amount we us to it getting much evaluate detail, a own fair without too file about. as left a to look think Robert.

John K. Whelen

Robert, structures. think within MLP risky rate-regulated, regulatory that holding environment a regulatory FERC-regulated I environment people we remains It's pipelines the for suggest, uncertain.

Robert Kwan

Got it.

so to limited apply FERC Section respect uncertainty X, the it Is got. what your sounds it would you've So, fair? pursue much keep full set to what that just going how with from to whether perspective and your not X is you like say Section forward or uncertainty more is as

John K. Whelen

That's right.

Robert Kwan

Thank great. That's you.

Albert Monaco

Okay. Thanks, Robert.

Operator

you. Thank

Our next question Andrew Suisse. from with is Kuske Credit

Andrew Kuske

morning. Good Thank you.

tolling in price about bit with and got move just sentiment been the the around the some round approval, the commodity the you could that obviously stepping scheme things? how LXR government into and negotiations which grand Trans just customers from in sets up is talk settlement corner for you've little there's of next given then you Just really Mountain, the of changes a the

Albert Monaco

sentiment. Well start respect to maybe with off, it I'll general Andrew,

issues everybody to I competitive talked forward. we additional committing we from I in hesitation some upstream moving least capital say still likely on the forward mean it's clarity of with point projects that there's going a until fair customer of – still think there's some Canada lot view, or see to, about at

that's So big picture. think the I

We would though are some I see say. starting to shoots green

day and that yesterday on You heard some front. the before comments

oil source strong the the quite past and developed many, to continues a price be many it has predictably can of in very So, in reserves been environment. times be sands discounted the that right

front. So, turnaround a maybe of starting that see to on bit a we're little

maybe on just the side, comment CTF maybe have So, Guy on that. we'll

D. Guy Jarvis

Yeah.

of the the call would Line our so CTS know level we've after lot What I got another renewed because the now seen pipelines much do, to shippers customers of, of right is in that's to to it's going that amongst kind it work as we marketplace is we've just are approval competing dealing interest have happen, don't I growing do looking of of means. going I admittedly and and what that that timing one certainty our we're get a issues that think be make how to with and to a the to as of going around think they're uncertainty if interest X, acquire. seen which status with tolled and we forward some

and in So, competitive of the confident the we're deals. of types negotiating history our very Mainline these situation of

now. those our we're So, with up to conversations right customers ramp beginning

Andrew Kuske

Lights And and optionality then what you on one maybe just negotiations follow-up. interplay you then the think How you just there? could do about the do of have CTS and the Southern

D. Guy Jarvis

Yeah.

and some So were down would Southern obviously, Mainline, not say the we the a up to that reversal based of Southern tolling agreement is at wrap path feedback be sure number on nature ours certain a CTS I'm even we're CTS that of not interests and a form looking current agreement. CTS the pipeline, getting If does going Lights tolling We're currently different to from that can't of we the for Lights. the pursuing of our go of customers. encompass, the in into that that for options of

profile us So that it similar and financial may a provides performance, different returns. framework be risk

Andrew Kuske

Okay. you. Thank

Albert Monaco

Thanks, Okay. Andrew.

Operator

Thank you.

with Taylor Matthew from Tudor is question next Pickering Our

Matthew Taylor

question. Hey. Good morning, taking for guys. my Thanks

Albert Monaco

morning. Good

Matthew Taylor

you're Yeah. With barrels near type opportunities do your of partner you seeing to possibly capacity Coast? fall, direct using Seaway just to thinking talking publicly could this that the sometime more increase about to Gulf term DRAs more what

D. Guy Jarvis

wide Flanagan manifest the Alberta to-date spreads from the Guy. performance open so pretty right Yeah, volumes Gulf. We're itself the are year. down in that now Obviously, to South, so it's the seeing and this

there's continuing there barrels space demand system. of get across if there. our levels we're high directed apportionment, as the seeing everywhere for these this barrels have We But strong

move is I the So that make. it our the the characterize Mainline would Gulf, decision into I think we the that's have ability to way if shippers

Matthew Taylor

a then XXXX guidance? can me to And as was contemplated impact the great. And you follow-up, maybe understand That's this in Okay. maybe potential there? just your help

D. Guy Jarvis

be for performance, supportive very John referencing to the we've be of the been We're It with results the uplift that all spoke viewed our significant not itself, Seaway factored obviously is to and on enterprise plan. in, of our it. you're expansion of a engaged to would balance Mainline really with other that year the earlier. into forecast at all If

Matthew Taylor

Thanks my That's Okay. for great. taking questions.

Albert Monaco

Matthew. Thanks,

Operator

Thank you.

question with Markets. comes Robert next from Our Catellier CIBC Capital

Robert Catellier

needs understandably Al, back get wanted just to I to to morning. the in situation. comments earlier strategy. a you that be win-win simplification Good mentioned it Hi. your

the address a you've So us help already the particularly the I'm if looks intangibles from could wondering on, and financial reputational only some you of characterize if you perspective And whatnot? touched not what like, issues could risk of that like the the but subsidiaries. win-win

Albert Monaco

we've impact the simplifying would I Well, there from that let And to, number we benefits benefits and a to distributable of as really transparency kinds me to think, share of think a concern. cash per here. one, think, see This the of we the versus we're things has elevate of we outlined, at on comes Maybe would the or benefits accretive transaction that way is for I I of obviously strategy. speak contemplating the we broader this look actions, Robert, is get when the cash out thought these it rolled through been the us the down the think flows, when which simplification. we

things So value come us. to both a And I will to be about. It from perspective us. for those hopefully that are of effective think needs important

in things assessment. of all So our weigh we those

mean are sure offers. all I not So mean, you implications. say. probably strong I'm that's these very can by reputational I what

they with And through it have to the offers, very have relationships we'll process We what special is see good evaluating back comprehensive are and committees. going comes a the that with.

step that's I So here. next the think

Robert Catellier

that's help does concerning Actually, I on wondering solution, best the and was if second in you. some X. Yeah. as on My question X? for solution views Thank Line is just the what there clarity recent that ultimate put Enbridge Line it. the was reports anything

D. Guy Jarvis

Yeah.

these So again. there's surprise that's think out I reports that us. has don't it's a Guy been in to come anything

one of and ability them the through the been more I their the to the state with going think our benefits understanding of fulsomely of situation. allow has engage work to improve

that. indicate think terms place a suggest one the within long-term that I is it tunnel and the that did the there report of would the outcome straits in construct pipelines to best we across potentially term outcome, longer the submitted

working to are we continue option. evaluate So hard that to

option, this summer. with working to willing are we'll our the way and consider We that that through state long-term be

Albert Monaco

a one bit of context just Maybe this Robert. on I'd that to like add,

it's of and very comfortable, a the the constructed could I And what think, over way the pressure steel and thickness very the steel, has operate reasons, very relative it first X of safely we the number at. feel particularly to all, given decades. it's Line for low operated of operating very, at

we're communities measures them I when in of talking about So would these the of additional and category stakeholders put kinds comfort giving solutions, here. of

everybody So just I reports and in the an game very effective the outlining are done I job here a option the little bit good that, think that team's a think more does comfort. end gives And that's here.

Robert Catellier

Okay.

for just think to Just the Enbridge the whether you tunnel or direction the follow-up assets? is multi-utility then, Guy, a would be one leaning

D. Guy Jarvis

of that we potential represent the benefits utilities. comment on we that understand one the Yeah, the to so for given me only that hard of to region. Certainly,

I – think to the willing we indicated that. would know like that we state something participate I be or in we've to

how players region in we'll state. see So, other the the just and view it to the have it with play out

Robert Catellier

you. Okay. Great. Thank

Albert Monaco

Thanks, Rob. Okay.

Operator

Thank you.

with Our next question comes Morningstar. from Gemino Joe

Joe Gemino

question's already. Thank you. been answered My Hi.

Albert Monaco

Okay. Thanks, Joe.

Operator

question And our with Bank next Kenny is National Finance. from Patrick

Pat Kenny

guys. Yeah. Good morning,

displacing competitive you you be your might keep Chicago downstream also help ramping open you wanted firm then somewhat of your What Rover shippers. can Alliance what get up Just support market Alliance-Williams to think other why longer the opportunities up And and season, do just down as well, successful. service, wondering term? into with thoughts pursuing access from coming Alliance to Vector, partner wasn't on to it NEXUS

William T. Yardley

Bill. Hey, It's Patrick.

season I think bit the as desire of down saw twist a certainly a far contracts. write went, on to we their longer-term As little different to sit producers' and open expectations

it's board amount then We it shortly is starts Alliance probably come with, are a that I Rover here the that. a still on into can up there and and days Midwest and NEXUS slightly drawing up to may offering of early going when we supply but back There between area. think fair be different coming

and that the some going focused the on others filling Midwest XX% hub I of think we'd team. and both there, I We're have and it's actually leads there for up think commercial the side actually certainly for downstream on Vector to opportunities participate. produce NEXUS remains love good to pretty from the

along likely a the stay lot and gas of So, we've interconnects that that in Michigan potentially to way added to markets. remember all with is in Ohio the

responsive. So, believe. not hub as be hope some that crowded as I may that's somewhat Midwest

Pat Kenny

were update some any Great. and Mainline. Guy, a Okay. switching forth for back the And on in process. you Wondering, work Mainline here on then air much there do there's in still had incremental current the of levels? potentially progress? think we successful from that you those a throughput nomination Guy barrels, to And how Is the shippers with could eliminating if back revising question see you if

D. Guy Jarvis

Yeah.

And causing on difficult the us the than by then very continue some process we're to be. throughput. back it are it producing is, legitimate concerned out is making your the integrity that needs barrels Mainline particularly our and very, that to for not nomination believe community. that to the seeing backed that just to it's nomination of what that's barrels the impact is point, the customers to of We're we process So, to of pain and legitimate less up, optimize

of bit process expedited to file and and fall decision then we them, that NEB, plan and it. plan. it will to with we working It's a new through a will try – our an we that seek we review do we we We'll are we a this with So, a shippers on have the go once are consulting with plan surrounding early finalized. as with plan go the

mid-month Speaking and a on on of high, ourselves – end short apportionment we implications we find is the we to the faced that are some this crude. Mainline, got of the levels falling pipeline issues the situation year then up where in high

can end the and level, is eliminate of the to we miss to thought make of that simply real actually move in And this are machinations element at market granted XX% to are find get barrels upset would going that when So, are our in that that right at early we we them. is barrels and the schedule and there the we up the and space month it gets and the the we've is got that many the windows move. make apportionment so day barrels we sure into other those try that system just can't on nominated so oftentimes

have out, accepted versus I end is at what throughput seeing you, we exact the And don't understand up. for month we work month that not on hard month have on our the every work the nominations that on customers number of that have work we matching we're hard barrel. to hard the and importance our So, for and but is in because what an of that think to I is and customers have to

Pat Kenny

I one Appreciate if then that last could. And John, for All right. one color. just

confirm to the of the elimination on DRIP. wanted Just timing of

no secured maybe new at time an are on the comment on can in around from DRIP for keeping looking major as the projects coming there's and near term then for place your thoughts DRIP? turning you maybe least, we off proceeds sale assuming in option So, Canadian just And Midstream shareholders. early non-dilutive the a over XXXX at

John K. Whelen

Right.

that probably It'd the a be be timing the that think undertaken at, quarter. is Patrick. fourth I in looking decision we'll

look the my taken in we've it the I company, overall As plan for this of think, said certainly yeah. in we'll at DRIP context at how emerging that respect proceeds remarks, I an it to prepared with represents the in. option itself, point the is the With but

DRIP, to the think to shut something elimination but complete than through want have I off. that point this more people to the day. what that. we look we'd through the intensive we to could through to based discount significant looking of and We're the it to that's so I think consider continue the at we'd of the about. period, amounts growth at DRIP that's evaluate the a history But very participate pay would have how thing who our works, going on program, logical we equity at Rather look that is program the that simply DRIP a probably end DRIP, it that issuing of been of on a think to be

Pat Kenny

great. right. Thanks, everybody. All That's

Operator

have at are over remarks. call we And and I any now turn for to will the limit this you. Gould time. Thank take reached final our time further Jonathan not able to questions

Jonathan Gould

a Carmen. will We IR any But additional right you, team lot over gone ups of Thank Great. we've and follow you take ground away as time. little available be bit to covered here, may that always, our a have.

Roni contacts a reminder, Energy IR and Fund, Enbridge, follow-ups. Spectra related all for Nafeesa Inc. as So, and myself Income Energy Kassam Enbridge matters, Cappadonna Enbridge for Partners are for related Partners

time have again, thanks a your day. interest and and for great everyone, the companies So in Enbridge

Operator

Thank today's and This for Thank participating. you, you gentlemen. concludes ladies conference.

You may disconnect. now

Enbridge (ENB) 3 Aug 182018 Q2 Earnings call transcript