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by Enbridge Energy, Limited Partnership
October 3rd, 2005


















 

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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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      Low cost of capital vehicle to acquire mature energy transportation assets in U.S.

 

 

 

      Limited capital commitment with effective control through 2% general partner interest

 

 

 

      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

 

 

 

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

 

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1.  Athabasca Pipeline Expansion (2006)

 

2.  Waupisoo Pipeline (2008)

 

3.  Southern Access Mainline Expansion (2009)

 

4.  Spearhead Pipeline (2006)

 

5.  U.S. Gulf Coast (2006)

 

6.  Eastern Access (2008)

 

7.  Southern Access Patoka/ Wood River Extension (2009)

 

8.  Southern Access St. Paul Extension (2009)

 

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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(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

 

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Dan C. Tutcher

President, Enbridge Energy Partners

 



 

Appendix
MLP Structure

 

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•     Enbridge is General Partner, through indirect subsidiary EECI, and has effective 11% interest in the Partnership

 

 

 

•     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

 

 

 

•     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

 

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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

 

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•     Major portion of cash flow derived from predictable fixed fee or cost of service revenue arrangements

 

 

 

•     Direct commodity price exposure is reduced through hedging program

 

 

 

•     Exposure to interest rate volatility is subject to conservative debt structure policy (0-20% floating debt target)

 

 

 

•     Largest exposure to non-controllable risk is commodity volumes

 

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Enbridge Energy Partners

 

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Dan C. Tutcher

President, Enbridge Energy Partners