CALGARY, May 10, 2019
/CNW/ - Enbridge Inc. (Enbridge or the Company) (TSX:ENB)
(NYSE:ENB) today reported first quarter 2019 financial results and
provided a quarterly business update.
FIRST QUARTER 2019 HIGHLIGHTS
(all financial
figures are unaudited and in Canadian dollars unless otherwise
noted)
- GAAP earnings of $1,891 million
or $0.94 per common share for the
first quarter of 2019, compared to $445
million or $0.26 per common
share in the first quarter of 2018, both including the impact of a
number of unusual, non-recurring or non-operating factors
- Adjusted earnings was $1,640
million or $0.81 per common
share for the first quarter of 2019, compared to $1,375 million or $0.82 per common share in the first quarter of
2018
- Adjusted earnings before interest, income tax and depreciation
and amortization (EBITDA) was $3,769
million for the first quarter of 2019, compared to
$3,406 million in the first quarter
of 2018
- Cash Provided by Operating Activities was $2,176 million for the first quarter of 2019,
compared to $3,194 million for the
first quarter of 2018
- Distributable Cash Flow (DCF) was $2,758
million for the first quarter of 2019, compared to
$2,312 million for the first quarter
of 2018
- Reaffirmed financial guidance range for 2019 Distributable Cash
Flow per Share of $4.30 to
$4.60/share
- Progressed execution of Line 3 Replacement project: Canadian
segment construction expected to be completed by end of
May 2019; Minnesota Public Utilities
Commission (MPUC) denied all petitions to reconsider its project
approvals; obtained a new permitting timeline from Minnesota environmental permitting agencies;
based on the new timeline, project in-service date targeted for the
second half of 2020
- Announced today a successful open season supporting a
$0.2 billion expansion of the
Dawn-Parkway gas transmission system
- Announced plans to launch a binding open season in mid-July to
secure firm transportation agreements on the Liquids Mainline
System upon expiry of the Competitive Toll Settlement (CTS)
agreement in June 2021
- Achieved a Debt:EBITDA metric of 4.7x on a trailing twelve
month basis based on Management's calculation methodology, well
within the Company's target leverage range of "4.5x to comfortably
below 5.0x"
- Moody's upgraded Enbridge's senior unsecured debt rating from
Baa3 to Baa2 while maintaining a positive outlook on the
rating
CEO COMMENT
"We're very pleased with our strong start to 2019," commented
Al Monaco, President and Chief
Executive Officer of Enbridge. "Operationally, all of our systems
are running well and near capacity. In fact, we hit record
throughput levels this quarter on the Liquids Mainline System. In
addition, our gas transmission systems were in high demand given
the colder weather we experienced in our franchises this winter,
and the Ontario gas utility
business hit record dispatch days in January and February. We also
benefited from strong margins in our Energy Services business this
quarter.
"This strong operating performance, in combination with new
projects that came into service this past year, drove record EBITDA
in the first quarter, although the Line 3 in-service delay to 2020,
relative to our full year 2019 budget, will offset this first
quarter strength. Our 2019 DCF guidance range is unchanged at
$4.30 to $4.60 per share.
"Each of the business units demonstrated progress on key
initiatives this quarter. Our Liquids Pipelines team continued
discussions with customers on the terms of a new commercial
framework for the Liquids Mainline System to replace the existing
CTS tolling agreement expiring in 2021. We expect to be in a
position to launch an open season in mid-July, with the goal of
bringing forward a new toll filing to the regulator by
year-end.
"Our Gas Transmission team has been advancing rate case
discussions for the Texas Eastern system, and the business
development group is active in the US Gulf Coast right now
assessing opportunities to support LNG development.
"Within the Gas Utility business, this was the first quarter of
combined operations and we've begun driving out efficiencies. We've
also secured an additional expansion of the Dawn to Parkway
transmission system, a low risk organic growth project that
supports increasing gas flows into our franchise areas and further
into the U.S. northeast.
"We're also pleased with the ongoing execution progress being
made on the Line 3 replacement project. Firstly, in Canada, we expect to have construction
complete on this segment of the line by the end of May. And in
Minnesota, we now have permitting
timelines from the state's agencies that support issuance of the
environmental permitting by November. We're working closely with
these agencies and we expect to bring the full project into service
within the second half of 2020, subject to timely permitting
approvals.
"Finally, from a strategic standpoint, the actions we've taken
over the past year have put us in a position of strength going
forward, and we're seeing the benefits of this already. The
operating and financial performance of our core low risk businesses
have been strong and reliable. Our balance sheet has been
reinforced and we now have significant financial flexibility which
has, among other things, enabled us to eliminate our DRIP and move
to a self-funded growth model. And we're also seeing significant
efficiencies take hold, namely, elimination of our sponsored
vehicles, amalgamation of our two Ontario utilities, and debt restructuring from
the structural streamlining that has taken place.
"In summary, it was another strong quarter for Enbridge across
all of the business units. We're pleased with the operational and
financial performance, and we'll continue to advance our key
strategic priorities throughout the balance of the year, with an
enhanced focus on capital allocation, growth and return on
investment to maximize shareholder value," concluded Mr.
Monaco.
FINANCIAL RESULTS SUMMARY
Financial results for the three months ended March 31, 2019, are summarized in the table
below:
|
|
|
Three months
ended
March 31,
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars, except per share amounts; number of
shares in millions)
|
|
|
GAAP Earnings
attributable to common shareholders
|
1,891
|
445
|
GAAP Earnings per
common share
|
0.94
|
0.26
|
Cash provided by
operating activities
|
2,176
|
3,194
|
Adjusted
EBITDA1
|
3,769
|
3,406
|
Adjusted
Earnings1
|
1,640
|
1,375
|
Adjusted Earnings per
common share1
|
0.81
|
0.82
|
Distributable Cash
Flow1
|
2,758
|
2,312
|
Weighted average
common shares outstanding
|
2,016
|
1,685
|
1 Non-GAAP
financial measures. Schedules reconciling adjusted EBITDA, adjusted
earnings, adjusted earnings per common
share and distributable cash flow are available as an Appendix to
this news release.
|
GAAP earnings attributable to common shareholders for the first
quarter of 2019 increased by $1,446
million or $0.68 per share
compared to the same period in 2018. The period-over-period
comparability of earnings attributable to common shareholders was
impacted by certain unusual and infrequent factors, including the
absence in 2019 of a non-cash charge resulting from the write down
of assets held for sale in 2018 and the change in non-cash
derivative fair value gains and losses. Also driving higher GAAP
earnings was the impact of stronger business performance as
described below.
Adjusted earnings in the first quarter 2019 increased by
$265 million. The increase was
primarily driven by strong operating results and operating cost
efficiencies across many of the Company's business units, partially
offset by the loss of contributions from assets which were sold
during 2018. On a per share basis, adjusted earnings decreased by
$0.01 per share compared to the same
period in 2018, reflecting a higher share count after Enbridge's
common equity financed acquisition of all of the outstanding equity
securities of its sponsored vehicles not beneficially owned during
the fourth quarter of 2018.
DCF for the first quarter was $2,758
million, an increase of $446 million over the comparable prior period in
2018, driven largely by the same factors noted above.
Detailed segmented financial information and analysis can be
found below under Adjusted EBITDA by Segments.
SECURED PROJECT UPDATE
The Company announced today that it is proceeding with a
$0.2 billion expansion of the Dawn to
Parkway gas transmission system in Ontario. This expansion is underpinned by a
successful open season that generated roughly 75 mmcf/d of
incremental capacity commitments over a 15-year term to meet
growing demand in Ontario and the
U.S. Northeast. The Company will apply for cost of service
regulatory treatment under the Incremental Capital Module of its
new incentive framework approved by the Ontario Energy Board (OEB).
The project is expected to come into service by the end of
2021.
In the first quarter, the Company had also announced
$0.3 billion of new pipeline and
utility growth capital projects, which included the East-West Tie
(EWT) Transmission Project and the acquisition of the Generation
Pipeline.
The EWT Transmission Project will add capacity between
Wawa and Thunder Bay to support electricity supply to
Northwest Ontario. Enbridge
currently has a 25% equity interest in EWT and plans to invest
approximately $0.2 billion for its
share of the project. The project is supported by a cost of service
framework and is expected to be in service in late 2021. All major
permitting is now secured and the construction phase is proceeding
with work along the right of way expected to begin in June.
Generation Pipeline is a 355 million cubic feet a day pipeline
that serves power generation and industrial load in northern
Ohio and will interconnect with
the Nexus Pipeline. Enbridge's share of the acquisition is
approximately US$0.1 billion and the
pipeline is fully contracted with long term agreements. The
transaction is expected to close in the second half of 2019.
PROJECT EXECUTION UPDATE
The Company now has a $16 billion
inventory of secured projects at various stages of execution which
are scheduled to come into service between 2019 and 2023. The
individual projects that make up the secured program are all
supported by long-term take-or-pay contracts, cost-of-service
frameworks or similar low-risk commercial arrangements and are
diversified across a wide range of business platforms and
regulatory jurisdictions.
Of these projects, roughly $3
billion are expected to come into service later in 2019.
This includes the Gray Oak pipeline, of which Enbridge holds a
22.8% ownership interest. Project execution forecasts have been
refreshed to reflect updated construction cost estimates and
timing. Gray Oak is expected to come into service in the fourth
quarter of 2019 with Enbridge's share of the capital cost expected
to be US$0.7 billion. This project
continues to have an attractive risk/return profile and forms a
part of Enbridge's strategy to further build out its pipeline
network in the US Gulf Coast.
LINE 3 REPLACEMENT UPDATE
The Line 3 Replacement Project is a critical integrity
replacement project that will enhance the safety and reliability of
the Enbridge Liquids Mainline System.
Construction on the Canadian segment of the pipeline is expected
to be completed by the end of May. The pipeline replacement work in
Wisconsin is complete and was
placed into service in 2018. Regulatory and permitting work in
North Dakota is complete and
construction is expected to be undertaken in 2020 in conjunction
with adjacent construction spreads.
In Minnesota, the MPUC has
finalized all of its written orders and has denied all petitions to
reconsider its regulatory decisions. The permitting process is
under way with all relevant federal and state agencies, including
the U.S. Army Corps of Engineers, the Minnesota Department of
Natural Resources (DNR), the Minnesota Pollution Control Agency
(PCA), as well as other local government agencies in
Minnesota. During the quarter, the DNR and the PCA published
processes and timelines for issuing their environmental permitting
by November 2019. Enbridge
anticipates that the remaining Federal permits will be finalized
approximately 30 to 60 days thereafter. This new permitting
schedule updates the Company's prior expectation for the receipt of
final State permits in the second quarter of 2019, which
underpinned an expected in-service date before the end of 2019. In
light of this new permitting timeline, the Company is developing a
revised construction schedule and related cost estimates for the
Line 3 Replacement Project. However, as previously disclosed, based
on the new permitting timeline, the Company expects an in-service
date during the second half of 2020.
Construction costs for the Line 3 Replacement Project are
tracking below budget in Canada
and above budget in the U.S. due to permitting delays in
Minnesota. Depending on the final
in service date, there is a risk that the project will exceed the
Company's total cost estimate of $9
billion. However, the Company does not anticipate any
capital cost impacts that are material to Enbridge's financial
position and outlook.
OTHER BUSINESS UPDATES
Enbridge has been advancing discussions with industry on the
terms of a new commercial framework for the Liquids Mainline System
to replace the existing Competitive Toll Settlement that expires in
June 2021. The Company plans to
launch an open season in mid-July
2019, with the goal of bringing forward a toll filing to its
regulator, the National Energy Board (NEB), by year-end.
One of the Company's strategic priorities is to ensure timely
and fair returns on existing and new capital additions to the
Company's U.S. natural gas transmission systems. Enbridge continues
to actively work with the Federal Energy Regulatory Commission
(FERC) and with customers to advance all outstanding rate
proceedings. Discussions continue on the Section 4 rate case
previously initiated for the Texas Eastern system, with the
expectation of having a negotiated settlement in place before the
end of the year. Enbridge is nearing an agreement in principle with
customers on a Section 5 settlement on the East Tennessee system resulting in an
immaterial revenue reduction. A Section 4 rate case proceeding is
planned for the first half of next year on this system. The Company
is also preparing to enter into early stage rate discussions with
customers on the Algonquin system in the coming months. FERC's
501-G processes on all of the Company's other pipelines have been
closed out or settled with no material impact to revenue.
FINANCING UPDATE
In 2018 the Company reached agreements to sell over $7.8 billion of non-core assets. The Company has
now received proceeds from asset sales of approximately
$5.7 billion, with the balance
expected by mid-2019. These proceeds have provided the Company with
significant additional financial flexibility to further strengthen
the balance sheet and fund the secured growth program. As of
March 31, 2019, the Company's
consolidated Debt to EBITDA ratio was 4.7x on a trailing twelve
month basis. This is in line with its updated long term target
credit metric range of 4.5x to comfortably below 5.0x Debt to
EBITDA.
The sponsored vehicle buy-ins completed in the fourth quarter of
2018 have also provided an opportunity to simplify the Company's
debt financing structure and strategy. Actions subsequently taken
include:
- Completion of a $1.6 billion
exchange of Enbridge Income Fund term debt for notes of Enbridge
Inc.
- The amendment of certain covenants in the Enbridge Energy
Partners, L.P. (EEP) and Spectra Energy Partners LP (SEP) trust
indentures and entry into a "cross guarantee" arrangement with
Enbridge Inc.
- The redemption of US$400 million
of EEP junior subordinated notes
- The retirement/redemption of Westcoast Energy Inc. preferred
shares and debt securities
The Company believes that these changes to its debt funding
structure and financing strategy have substantially reduced
structural subordination, will further enhance the credit profile
of the consolidated Enbridge group and will reduce its cost of
capital over the longer term.
On January 25, 2019, Moody's
Investors Service announced that it had upgraded Enbridge Inc.'s
senior unsecured debt rating to Baa2 with a positive outlook. Each
of Standard & Poor's, Fitch and DBRS have recently reaffirmed
Enbridge Inc.'s senior unsecured debt rating at BBB+, BBB+ and BBB
High, respectively.
Given the progress on leverage reduction, the Company announced
in the fourth quarter of 2018 that it would suspend its DRIP
effective with the dividend payment on December 1, 2018, which was earlier than
originally contemplated. With this action, the Company has now
moved to a fully self-funded financing model and will no longer
require external equity to support its growth program going
forward.
EXECUTIVE LEADERSHIP CHANGES
Today Enbridge announced the following executive leadership
changes, effective June 1, 2019.
Colin Gruending is appointed
Executive Vice President & Chief Financial Officer. In this
role Colin will have accountability for Enbridge's finance and
accounting functions inclusive of: Corporate Accounting, Financial
Planning and Analysis, Treasury, Tax, Risk and Insurance, Audit and
Investor Relations. Colin most recently held the position of Senior
Vice President, Corporate Development & Investment Review.
During his 20+ years with Enbridge, Colin has held a series of
senior finance and accounting leadership positions. Colin has a
Bachelor of Commerce, is a Chartered Professional Accountant and a
Chartered Financial Analyst.
John Whelen is appointed
Executive Vice President & Chief Development Officer. In this
role, he will be responsible for Corporate Development, Strategic
Planning and Investment Review. In addition, he will provide
executive oversight of our Renewable Power Generation &
Transmission and Energy Services business units. John most recently
held the position of Executive Vice President & Chief Financial
Officer since 2014. During his 26+ years with Enbridge, John has
held a series of executive positions in both finance and corporate
development. John has a Master of Business Administration and a
Bachelor of Science (Economics).
Vern Yu is appointed President
& Chief Operating Officer, Liquids Pipelines and will report to
Guy Jarvis, Executive Vice
President, Liquids Pipelines. In this role, Vern will be
accountable for Operations (US and Canada), Engineering and Asset Management, and
Pipeline Control of the Liquid Pipelines business unit. Prior to
this role, Vern was Executive Vice President & Chief
Development Officer. During his 25+ year tenure with Enbridge Vern
has held executive roles in finance and corporate development as
well as leading the business and market development activities for
Liquids Pipelines. Vern has a Master of Business Administration,
Bachelor of Applied Science (Engineering) and is a Professional
Engineer.
These key internal appointments reinforce the effectiveness of
executive succession and highlights Enbridge's approach to
developing and progressing internal talent.
FIRST QUARTER 2019 FINANCIAL RESULTS
The following table summarizes the Company's GAAP reported
results for segment EBITDA, earnings attributable to common
shareholders, and cash provided by operating activities for the
first quarter of 2019.
GAAP SEGMENT EBITDA AND CASH FLOW FROM OPERATIONS
|
Three months
ended
March 31,
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
Liquids
Pipelines
|
2,072
|
1,156
|
Gas Transmission and
Midstream
|
1,020
|
126
|
Gas
Distribution
|
662
|
636
|
Renewable Power
Generation and Transmission
|
124
|
109
|
Energy
Services
|
6
|
169
|
Eliminations and
Other
|
248
|
(279)
|
EBITDA
|
4,132
|
1,917
|
|
|
|
Earnings
attributable to common shareholders
|
1,891
|
445
|
|
|
|
Cash provided by
operating activities
|
2,176
|
3,194
|
For purposes of evaluating performance, the Company makes
adjustments for unusual, non-recurring or non-operating factors to
GAAP reported earnings, segment EBITDA, and cash flow provided by
operating activities, which allow Management and investors to more
accurately compare the Company's performance across periods,
normalizing for factors that are not indicative of the underlying
business performance. Tables incorporating these adjustments follow
below. Schedules reconciling EBITDA, adjusted EBITDA, adjusted
EBITDA by segment, adjusted earnings, adjusted earnings per common
share and DCF to their closest GAAP equivalent are provided in the
Appendices to this news release.
DISTRIBUTABLE CASH FLOW
|
Three months
ended
March 31,
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars, except per share
amounts)
|
|
|
Liquids
Pipelines
|
1,729
|
1,627
|
Gas Transmission and
Midstream
|
1,040
|
1,046
|
Gas
Distribution
|
693
|
646
|
Renewable Power
Generation and Transmission
|
123
|
139
|
Energy
Services
|
176
|
22
|
Eliminations and
Other
|
8
|
(74)
|
Adjusted
EBITDA1,3
|
3,769
|
3,406
|
Maintenance
capital
|
(179)
|
(165)
|
Interest
expense1
|
(684)
|
(652)
|
Current income
tax1
|
(158)
|
(75)
|
Distributions to
noncontrolling interests and redeemable noncontrolling
interests
|
(46)
|
(293)
|
Cash distributions in
excess of equity earnings1
|
94
|
63
|
Preference share
dividends
|
(95)
|
(87)
|
Other receipts of
cash not recognized in revenue2
|
53
|
76
|
Other non-cash
adjustments
|
4
|
39
|
DCF3
|
2,758
|
2,312
|
Weighted average
common shares outstanding
|
2,016
|
1,685
|
1
|
Presented net of
adjusting items.
|
2
|
Consists of cash
received net of revenue recognized for contracts under make-up
rights and similar deferred revenue arrangements.
|
3
|
Schedules
reconciling adjusted EBITDA and DCF are available as an Appendix to
this news release.
|
First quarter 2019 DCF increased by $446
million compared to the same period in 2018. The key drivers
of quarter-over-quarter growth are summarized below:
- An increase in adjusted EBITDA primarily due to strong business
performance across most business segments and incremental
contributions from new projects placed into service. For further
detail on business performance refer to Adjusted EBITDA by
Segments below.
- Lower distributions to noncontrolling interest following the
completion of Enbridge's buy-in of the publicly held interest in
its sponsored vehicles, which were completed in separate
transactions, in the fourth quarter of 2018.
- Higher equity distributions from equity investments due to
strong performance as well as new equity investments placed into
service.
Partially offsetting the DCF growth drivers noted above
were:
- Higher financing costs resulting from incremental debt,
preferred shares and hybrid securities issued since the first
quarter of 2018, partially offset by interest expense savings from
debt repayments made in the second half of 2018.
- Higher current tax, which in part reflected higher earnings
before income tax generated from operating segments.
ADJUSTED
EARNINGS
|
Three months
ended March 31,
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars, except per share
amounts)
|
|
|
Adjusted
EBITDA2
|
3,769
|
3,406
|
Depreciation and
amortization
|
(840)
|
(824)
|
Interest
expense1
|
(668)
|
(622)
|
Income
taxes1
|
(488)
|
(256)
|
Noncontrolling
interests and redeemable noncontrolling
interests1
|
(38)
|
(240)
|
Preference share
dividends
|
(95)
|
(89)
|
Adjusted
earnings2
|
1,640
|
1,375
|
Adjusted earnings
per common share
|
0.81
|
0.82
|
1
|
Presented net of
adjusting items.
|
2
|
Schedules
reconciling adjusted EBITDA and adjusted earnings are available as
an Appendix to this news release.
|
Adjusted earnings increased by $265
million for the first quarter of 2019 compared to the same
period in 2018. Growth in adjusted earnings was driven by the same
factors impacting business performance and adjusted EBITDA as
discussed under Distributable Cash Flow above. Other notable
quarter-over-quarter drivers were:
- Lower earnings attributable to noncontrolling interest
following the completion of Enbridge's buy-in of the publicly held
interest in its sponsored vehicles, which were completed in
separate transactions, in the fourth quarter of 2018.
Partially offsetting the adjusted earnings growth drivers noted
above:
- Higher depreciation and amortization expense as a result of
placing new assets into service, net of depreciation expense no
longer recorded for assets which were classified as assets held for
sale or sold during 2018.
- Higher income tax expense, in part due to higher earnings
before tax and a higher effective income tax rate. The
period-over-period increase in the effective income tax rate is
partly due to the buy-in of the US Master Limited Partnerships
(MLP), Enbridge Energy Partners, L.P. and Spectra Energy Partners,
LP, which results in the Company being taxed on 100% of the MLP
earnings rather than the Company's proportionate share of their
earnings.
Adjusted earnings per share for the first quarter of 2019
decreased by $0.01 compared with the
first quarter of 2018. The increase in adjusted earnings noted
above, was offset on a per share basis by the issuance of
approximately 297 million common shares to acquire, in separate
transactions, all of the outstanding equity securities of its
sponsored vehicles not beneficially owned by Enbridge during the
fourth quarter of 2018.
ADJUSTED EBITDA BY SEGMENTS
Adjusted EBITDA by segment is reported on a Canadian dollar
basis. Adjusted EBITDA generated from United
States dollar denominated businesses were translated at
stronger average Canadian dollar exchange rates in the first
quarter of 2019 (C$1.33/$US) when
compared to the corresponding 2018 period (C$1.26/$US). A portion of the United
States dollar earnings are hedged under the Company's
enterprise-wide financial risk management program. The offsetting
hedge settlements are reported within Eliminations and Other.
LIQUIDS PIPELINES
|
Three months
ended
March 31,
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
Mainline
System1
|
964
|
942
|
Regional Oil Sands
System
|
227
|
222
|
Gulf Coast and
Mid-Continent System
|
216
|
178
|
Other2
|
322
|
285
|
Adjusted
EBITDA3
|
1,729
|
1,627
|
|
|
|
Operating Data
(average deliveries – thousands of bpd)
|
|
|
Mainline System -
ex-Gretna volume4
|
2,717
|
2,625
|
Regional Oil Sands
System5
|
1,751
|
1,629
|
International Joint
Tariff (IJT)6
|
$4.15
|
$4.07
|
1
|
Mainline System
includes the Canadian Mainline and the Lakehead System, which were
previously reported separately.
|
2
|
Included within
Other are Southern Lights Pipeline, Express-Platte System, Bakken
System and Feeder Pipelines & Other.
|
3
|
Schedules
reconciling adjusted EBITDA are provided in the Appendices to this
news release.
|
4
|
Mainline System
throughput volume represents mainline system deliveries ex-Gretna,
Manitoba which is made up of United States and eastern Canada
deliveries originating from western Canada.
|
5
|
Volumes are for
the Athabasca mainline, Athabasca Twin, Waupisoo Pipeline and
Woodland Pipeline and exclude laterals on the Regional Oil Sands
System.
|
6
|
The IJT benchmark
toll and its components are set in United States dollars and the
majority of the Company's foreign exchange risk on the Canadian
portion of the Mainline is hedged. The Canadian portion of the
Mainline represents approximately 45% of total Mainline System
revenue and the average effective FX rate for the Canadian portion
of the Mainline during the first quarter of 2019 was US$1.19 (Q1
2018: US$1.25).
|
|
The US portion of
the Mainline System is subject to FX translation similar to the
Company's other US based businesses, which are translated at the
average spot rate for a given period. A portion of this US dollar
translation exposure is hedged under the Company's enterprise-wide
financial risk management program. The offsetting hedge settlements
are reported within Eliminations and Other.
|
Liquids Pipelines adjusted EBITDA increased by $102 million for the first quarter of 2019 when
compared to the same period in 2018. The key quarter-over-quarter
performance drivers are summarized below:
- Mainline System EBITDA contribution increased primarily due to
higher throughput, driven by strong supply and continued
optimizations of the system. Also contributing to higher EBITDA was
a period-over-period increase in the International Joint Tariff.
The increase was partially offset by a lower foreign exchange rate
on contracts used to hedge United
States dollar denominated revenues from the Canadian portion
of the Mainline System.
- Regional Oil Sands System contribution increased in part due to
incremental EBITDA generated from the AOC Lateral Acquisition,
which closed in early 2019.
- Gulf Coast and Mid-Continent System growth was driven by higher
spot volumes on Flanagan South and
Seaway pipelines due to the redirection of volumes to the Gulf
Coast resulting from refinery outages.
- Other increased primarily as a result of strong throughput on
the Bakken Pipeline System.
GAS TRANSMISSION AND MIDSTREAM
|
Three months
ended
March 31,
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
US Gas
Transmission
|
718
|
650
|
Canadian Gas
Transmission1
|
215
|
281
|
US
Midstream
|
52
|
82
|
Other
|
55
|
33
|
Adjusted
EBITDA2
|
1,040
|
1,046
|
1
|
Canadian Gas
Transmission includes Alliance Pipeline, which was previously
reported separately.
|
2
|
Schedules reconciling
adjusted EBITDA are available as an Appendix to this news
release.
|
Gas Transmission and Midstream adjusted EBITDA decreased by
$6 million for the first quarter of
2019 when compared to the same period in 2018. The key
quarter-over-quarter performance drivers are summarized below:
- US Gas Transmission adjusted EBITDA benefited from incremental
contributions from new pipelines placed into service in late 2018,
including Valley Crossing.
- Canadian Gas Transmission reflected the absence of EBITDA from
the provincially regulated Canadian natural gas gathering and
processing business which was sold on October 1, 2018. The sale of the remaining NEB
regulated assets is expected to close by mid-2019.
- US Midstream adjusted EBITDA reflected the absence of EBITDA
from Midcoast Operating, L.P. which was sold on August 1, 2018.
- Other adjusted EBITDA growth was driven by contributions from
the Big Foot Oil and Gas offshore pipelines.
GAS DISTRIBUTION
|
Three months
ended
March 31,
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
Enbridge Gas Inc.
(EGI)
|
642
|
573
|
Other
|
51
|
73
|
Adjusted
EBITDA1
|
693
|
646
|
|
|
|
Operating
Data
|
|
|
EGI
|
|
|
Volumes (billions of
cubic feet)
|
719
|
669
|
Number of active
customers (thousands)2
|
3,722
|
3,677
|
Heating degree
days3
|
|
|
Actual
|
2,046
|
1,900
|
Forecast based on
normal weather4
|
1,922
|
1,920
|
1
|
Schedules
reconciling adjusted EBITDA are available as an Appendix to this
news release.
|
2
|
Number of active
customers at the end of the reported period.
|
3
|
Heating degree
days is a measure of coldness that is indicative of volumetric
requirements for natural gas utilized for heating purposes in EGI's
distribution franchise areas.
|
4
|
As per OEB
approved methodology used in setting rates.
|
Enbridge Gas Distribution (EGD) and Union Gas (UG) were
amalgamated on January 1, 2019. The
amalgamated company has been renamed Enbridge Gas Inc. (EGI). Post
amalgamation the financial results of EGI reflect the combined
performance of the two legacy utility operations.
Gas Distribution adjusted EBITDA will typically follow a
seasonal profile. It is generally highest in the first and fourth
quarters of the year reflecting greater volumetric usage during the
heating season, and lowest in the third quarter as there is
generally less volumetric usage during the summer. The magnitude of
the seasonal EBITDA fluctuations will vary from year-to-year
reflecting the impact of colder or warmer than normal weather on
distribution volumes in a given quarter.
Gas Distribution adjusted EBITDA increased by $47 million for the first quarter 2019 when
compared to the same period in 2018. The key quarter-over-quarter
performance drivers are summarized below:
- Colder weather in EGI's franchise areas in the first quarter of
2019 driving higher utilization relative to 2018, along with higher
distribution charges primarily resulting from increases in
distribution rates and customer base, and absence of earnings
sharing which was recorded in the first quarter of 2018 under EGD's
previous incentive rate structure.
- The colder weather in the first quarter of 2019 when compared
to the normal weather forecast embedded in rates, positively
impacted EBITDA by approximately $33 million.
RENEWABLE POWER GENERATION AND TRANSMISSION
|
Three months
ended March 31,
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
Adjusted
EBITDA1
|
123
|
139
|
|
|
|
1
|
Schedules
reconciling adjusted EBITDA are available as an Appendix to this
news release.
|
Renewable Power Generation and Transmission adjusted EBITDA
decreased by $16 million for the
first quarter of 2019 when compared to the same period in 2018. The
key quarter-over-quarter performance drivers are summarized
below:
- Weaker wind resources primarily at US wind farms.
- Absence of a positive arbitration settlement of $11 million from a warranty claim that occurred
in the first quarter of 2018.
- These impacts were partially offset by a full quarter of EBITDA
contribution from the Rampion Offshore Wind Project and stronger
operating performance at certain Canadian wind farms.
ENERGY SERVICES
|
Three months
ended
March 31,
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
Adjusted
EBITDA1
|
176
|
22
|
1
|
Schedules
reconciling adjusted EBITDA are available as an Appendix to this
news release.
|
Energy Services adjusted EBITDA increased by $154 million for the first quarter of 2019 when
compared to the same period in 2018. The key quarter-over-quarter
performance drivers are summarized below:
- Higher EBITDA contributions from Energy Services crude
operations due to the widening of certain location and quality
differentials during the second half of 2018, which increased
opportunities to generate profitable margins that were realized
during the first quarter of 2019.
ELIMINATIONS AND OTHER
|
Three months
ended March 31,
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
Operating and
administrative
|
63
|
(32)
|
Realized foreign
exchange hedge settlements
|
(55)
|
(42)
|
Adjusted
earnings/(loss) before interest, income taxes,
|
|
|
and depreciation
and amortization1
|
8
|
(74)
|
1
|
Schedules
reconciling adjusted EBITDA are available as an Appendix to this
news release.
|
Operating and administrative costs captured in this segment
reflect the cost of centrally delivered services (including
depreciation of corporate assets) net of amounts recovered from
business units for the provision of those services. Also, as
previously noted, US dollar denominated earnings within the segment
results are translated at average foreign exchange rates during the
quarter. The offsetting impact of settlements made under the
Company's enterprise foreign exchange hedging program is captured
in this segment.
Eliminations and Other adjusted EBITDA increased by $82 million for the first quarter of 2019, when
compared to the same period in 2018. The key quarter-over-quarter
performance drivers are summarized below:
- Lower operating and administrative costs in 2019, compounded by
the timing of the recovery of certain operating and administrative
costs allocated to the business segments in 2018, which were more
heavily weighted to the second half.
- Higher realized foreign exchange hedge settlement losses due to
higher hedged amounts and a stronger United States dollar in the first quarter of
2019 ($1.33) when compared to the
first quarter of 2018 ($1.26), which
more than offset the more favourable hedge rate in the first
quarter of 2019 ($1.24) relative to
the first quarter of 2018 ($1.16).
CONFERENCE CALL
Enbridge will host a conference call and webcast on May 10,
2019 at 9:00 a.m. Eastern Time (7:00 a.m. Mountain Time)
to provide an enterprise wide business update and review 2019 first
quarter financial results. Analysts, members of the media and other
interested parties can access the call toll free at (877) 930-8043
or within and outside North
America at (253) 336-7522 using the access code of 4987355#.
The call will be audio webcast live at
https://edge.media-server.com/m6/p/u7by2zc5. A webcast replay and
podcast will be available approximately two hours after the
conclusion of the event and a transcript will be posted to the
website within 24 hours. The replay will be available for seven
days after the call toll-free (855) 859-2056 or within and outside
North America at (404) 537-3406
(access code 4987355#).
The conference call format will include prepared remarks from
the executive team followed by a question and answer session for
the analyst and investor community only. Enbridge's media and
investor relations teams will be available after the call for any
additional questions.
FORWARD-LOOKING INFORMATION
Forward-looking
information, or forward-looking statements, have been included in
this news release to provide information about the Company and its
subsidiaries and affiliates, including management's assessment of
Enbridge and its subsidiaries' future plans and operations. This
information may not be appropriate for other purposes.
Forward-looking statements are typically identified by words such
as ''anticipate'', ''expect'', ''project'', ''estimate'',
''forecast'', ''plan'', ''intend'', ''target'', ''believe'',
"likely" and similar words suggesting future outcomes or statements
regarding an outlook. Forward-looking information or statements
included or incorporated by reference in this document include, but
are not limited to, statements with respect to the following:
expected EBITDA or expected adjusted EBITDA; expected
earnings/(loss) or adjusted earnings/(loss); expected
earnings/(loss) or adjusted earnings/(loss) per share; expected DCF
or DCF per share; expected future cash flows; expected performance
of the Company's businesses; financial strength and flexibility;
expectations on sources of liquidity and sufficiency of financial
resources; expected credit metrics and debt to EBITDA levels;
expected cost of capital and costs related to announced projects
and projects under construction; expected in-service dates for
announced projects and projects under construction; expected
capital expenditures; expected equity funding requirements for our
commercially secured growth program; our United States Line 3
Replacement Program; expected future growth and expansion
opportunities; expectations about the Company's joint venture
partners' ability to complete and finance projects under
construction; expected closing of acquisitions and dispositions and
the timing thereof; expected future actions of regulators;
expectations regarding commodity prices; supply forecasts;
expectations regarding the impact of the stock-for-stock merger
transaction between Enbridge and Spectra Energy Corp (the Merger
Transaction) including the combined Company's scale, financial
flexibility, growth program, future business prospects and
performance and streamlining opportunities; the transactions
undertaken to simplify our corporate structure; plans to
launch a binding open season for the Liquids Mainline System; toll
and rate case discussions and filings; dividend growth and
dividend payout expectation; and expectations resulting from the
successful execution of our 2018-2020 Strategic Plan.
Although Enbridge believes these forward-looking statements
are reasonable based on the information available on the date such
statements are made and processes used to prepare the information,
such statements are not guarantees of future performance and
readers are cautioned against placing undue reliance on
forward-looking statements. By their nature, these statements
involve a variety of assumptions, known and unknown risks and
uncertainties and other factors, which may cause actual results,
levels of activity and achievements to differ materially from those
expressed or implied by such statements. Material assumptions
include assumptions about the following: the expected supply of and
demand for crude oil, natural gas, natural gas liquids (NGL) and
renewable energy; prices of crude oil, natural gas, NGL and
renewable energy; exchange rates; inflation; interest rates;
availability and price of labour and construction materials;
operational reliability; customer and regulatory approvals;
maintenance of support and regulatory approvals for the Company's
projects; anticipated in-service dates; weather; the timing and
closing of dispositions; the realization of anticipated benefits
and synergies of the Merger Transaction; governmental legislation;
acquisitions and the timing thereof; the success of integration
plans; impact of our dividend policy on the Company's future cash
flows; credit ratings; capital project funding; expected EBITDA or
expected adjusted EBITDA; expected earnings/(loss) or adjusted
earnings/(loss); expected earnings/(loss) or adjusted
earnings/(loss) per share; expected future cash flows and expected
future DCF and DCF per share; and estimated future dividends.
Assumptions regarding the expected supply of and demand for crude
oil, natural gas, NGL and renewable energy, and the prices of these
commodities, are material to and underlie all forward-looking
statements, as they may impact current and future levels of demand
for the Company's services. Similarly, exchange rates, inflation
and interest rates impact the economies and business environments
in which the Company operates and may impact levels of demand for
the Company's services and cost of inputs, and are therefore
inherent in all forward-looking statements. Due to the
interdependencies and correlation of these macroeconomic factors,
the impact of any one assumption on a forward-looking statement
cannot be determined with certainty, particularly with respect to
the impact of the Merger Transaction on the Company, expected
EBITDA, expected adjusted EBITDA, earnings/(loss), expected
adjusted earnings/(loss) and associated per share amounts, or
estimated future dividends. The most relevant assumptions
associated with forward-looking statements regarding announced
projects and projects under construction, including estimated
completion dates and expected capital expenditures, include the
following: the availability and price of labour and construction
materials; the effects of inflation and foreign exchange rates on
labour and material costs; the effects of interest rates on
borrowing costs; the impact of weather and customer, government and
regulatory approvals on construction and in-service schedules and
cost recovery regimes.
Enbridge's forward-looking statements are subject to risks
and uncertainties pertaining to the realization of anticipated
benefits and synergies of the Merger Transaction, operating
performance, regulatory parameters, changes in regulations
applicable to our business, acquisitions and dispositions, the
transactions undertaken to simplify our corporate structure, our
dividend policy, project approval and support, renewals of rights
of way, weather, economic and competitive conditions, public
opinion, changes in tax laws and tax rates, changes in trade
agreements, exchange rates, interest rates, commodity prices,
political decisions and supply of and demand for commodities,
including but not limited to those risks and uncertainties
discussed in this news release and in the Company's other filings
with Canadian and United States
securities regulators. The impact of any one risk, uncertainty or
factor on a particular forward-looking statement is not
determinable with certainty as these are interdependent and
Enbridge's future course of action depends on management's
assessment of all information available at the relevant time.
Except to the extent required by applicable law, Enbridge assumes
no obligation to publicly update or revise any forward-looking
statements made in this news release or otherwise, whether as a
result of new information, future events or otherwise. All
forward-looking statements, whether written or oral, attributable
to Enbridge or persons acting on the Company's behalf, are
expressly qualified in their entirety by these cautionary
statements.
ABOUT ENBRIDGE INC.
Enbridge Inc. (the Company) is
North America's premier energy
infrastructure company with strategic business platforms that
include an extensive network of crude oil, liquids and natural gas
pipelines, regulated natural gas distribution utilities and
renewable power generation. The Company safely delivers an average
of 2.9 million barrels of crude oil each day through its Mainline
and Express Pipeline; accounts for approximately 62% of U.S.-bound
Canadian crude oil exports; and moves approximately 20% of all
natural gas consumed in the U.S., serving key supply basins and
demand markets. The Company's regulated utilities serve
approximately 3.7 million retail customers in Ontario, Quebec, and New
Brunswick. Enbridge also has interests in more than 1,750 MW
of net renewable generating capacity in North America and Europe. The Company has ranked on the Global
100 Most Sustainable Corporations index for the past nine years;
its common shares trade on the Toronto and New
York stock exchanges under the symbol ENB.
Life takes energy and Enbridge exists to fuel people's
quality of life. For more information, visit
www.enbridge.com.
None of the information contained in, or connected to,
Enbridge's website is incorporated in or otherwise part of this
news release.
FOR FURTHER
INFORMATION PLEASE CONTACT:
|
|
Enbridge Inc. –
Media
|
Enbridge Inc. –
Investment Community
|
Jesse
Semko
|
Jonathan
Gould
|
Toll Free: (888)
992-0997
|
Toll Free: (800)
481-2804
|
Email:
media@enbridge.com
|
Email:
investor.relations@enbridge.com
|
DIVIDEND DECLARATION
On April 23, 2019, our Board of
Directors declared the following quarterly dividends. All dividends
are payable on June 1, 2019, to
shareholders of record on May 15,
2019.
|
Dividend per
share
|
Common
Shares
|
$0.73800
|
Preference Shares,
Series A
|
$0.34375
|
Preference Shares,
Series B
|
$0.21340
|
Preference Shares,
Series C1
|
$0.25395
|
Preference Shares,
Series D
|
$0.27875
|
Preference Shares,
Series F
|
$0.29306
|
Preference Shares,
Series H
|
$0.27350
|
Preference Shares,
Series J
|
US$0.30540
|
Preference Shares,
Series L
|
US$0.30993
|
Preference Shares,
Series N
|
$0.31788
|
Preference Shares,
Series P2
|
$0.27369
|
Preference Shares,
Series R
|
$0.25000
|
Preference Shares,
Series 1
|
US$0.37182
|
Preference Shares,
Series 3
|
$0.25000
|
Preference Shares,
Series 53
|
US$0.33596
|
Preference Shares,
Series 74
|
$0.27806
|
Preference Shares,
Series 9
|
$0.27500
|
Preference Shares,
Series 11
|
$0.27500
|
Preference Shares,
Series 13
|
$0.27500
|
Preference Shares,
Series 15
|
$0.27500
|
Preference Shares,
Series 17
|
$0.32188
|
Preference Shares,
Series 19
|
$0.30625
|
1
|
The quarterly
dividend per share paid on Series C was decreased to $0.25395 from
$0.25459 on March 1, 2019, due to reset on a quarterly basis
following the date of issuance of the Series C Preference
Shares.
|
2
|
The quarterly
dividend per share paid on Series P was increased to $0.27369 from
$0.25000 on March 1, 2019, due to reset of the annual dividend on
March 1, 2019, and every five years thereafter.
|
3
|
The quarterly
dividend per share paid on Series 5 was increased to US$0.33596
from US$0.27500 on March 1, 2019, due to reset of the annual
dividend on March 1, 2019, and every five years
thereafter.
|
4
|
The quarterly
dividend per share paid on Series 7 was increased to $0.27806 from
$0.27500 on March 1, 2019, due to reset of the annual dividend on
March 1, 2019, and every five years thereafter.
|
NON-GAAP RECONCILIATIONS APPENDICES
This news release contains references to adjusted EBITDA,
adjusted earnings, adjusted earnings per common share, and DCF.
Management believes the presentation of these metrics gives useful
information to investors and shareholders as they provide increased
transparency and insight into the performance of the Company.
Adjusted EBITDA represents EBITDA adjusted for unusual,
non-recurring or non-operating factors on both a consolidated and
segmented basis. Management uses adjusted EBITDA to set targets and
to assess the performance of the Company and its Business
Units.
Adjusted earnings represent earnings attributable to common
shareholders adjusted for unusual, non-recurring or non-operating
factors included in adjusted EBITDA, as well as adjustments for
unusual, non-recurring or non-operating factors in respect of
depreciation and amortization expense, interest expense, income
taxes, noncontrolling interests and redeemable noncontrolling
interests on a consolidated basis. Management uses adjusted
earnings as another measure of the Company's ability to generate
earnings.
DCF is defined as cash flow provided by operating
activities before the impact of changes in operating assets and
liabilities (including changes in environmental liabilities) less
distributions to noncontrolling interests and redeemable
noncontrolling interests, preference share dividends and
maintenance capital expenditures, and further adjusted for unusual,
non-recurring or non-operating factors. Management also uses DCF to
assess the performance of the Company and to set its dividend
payout target.
Reconciliations of forward looking non-GAAP financial measures
to comparable GAAP measures are not available due to the challenges
and impracticability with estimating some of the items,
particularly certain contingent liabilities, and non-cash
unrealized derivative fair value losses and gains which are subject
to market variability. Because of those challenges, a
reconciliation of forward looking non-GAAP financial measures is
not available without unreasonable effort.
Our non-GAAP measures described above are not measures that have
standardized meaning prescribed by generally accepted accounting
principles in the United States of
America (U.S. GAAP) and are not U.S. GAAP measures.
Therefore, these measures may not be comparable with similar
measures presented by other issuers.
The tables below provide a reconciliation of the non-GAAP
measures to comparable GAAP measures.
APPENDIX A
NON-GAAP RECONCILIATIONS – ADJUSTED
EBITDA AND ADJUSTED EARNINGS
CONSOLIDATED EARNINGS
|
Three months
ended
March 31,
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
Liquids
Pipelines
|
2,072
|
1,156
|
Gas Transmission and
Midstream
|
1,020
|
126
|
Gas
Distribution
|
662
|
636
|
Renewable Power
Generation and Transmission
|
124
|
109
|
Energy
Services
|
6
|
169
|
Eliminations and
Other
|
248
|
(279)
|
EBITDA
|
4,132
|
1,917
|
Depreciation and
amortization
|
(840)
|
(824)
|
Interest
expense
|
(685)
|
(656)
|
Income tax
(expense)/recovery
|
(584)
|
73
|
(Earnings)/loss
attributable to noncontrolling interests and redeemable
|
|
|
noncontrolling
interests
|
(37)
|
24
|
Preference share
dividends
|
(95)
|
(89)
|
Earnings
attributable to common shareholders
|
1,891
|
445
|
ADJUSTED EBITDA TO ADJUSTED EARNINGS
|
Three months
ended
March 31,
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars, except per share
amounts)
|
|
|
Liquids
Pipelines
|
1,729
|
1,627
|
Gas Transmission and
Midstream
|
1,040
|
1,046
|
Gas
Distribution
|
693
|
646
|
Renewable Power
Generation and Transmission
|
123
|
139
|
Energy
Services
|
176
|
22
|
Eliminations and
Other
|
8
|
(74)
|
Adjusted
EBITDA
|
3,769
|
3,406
|
Depreciation and
amortization
|
(840)
|
(824)
|
Interest
expense
|
(668)
|
(622)
|
Income
taxes
|
(488)
|
(256)
|
Noncontrolling
interests and redeemable noncontrolling interests
|
(38)
|
(240)
|
Preference share
dividends
|
(95)
|
(89)
|
Adjusted
earnings
|
1,640
|
1,375
|
Adjusted earnings
per common share
|
0.81
|
0.82
|
EBITDA TO ADJUSTED EARNINGS
|
Three months
ended March 31,
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars, except per share
amounts)
|
|
|
EBITDA
|
4,132
|
1,917
|
Adjusting
items:
|
|
|
Change in unrealized
derivative fair value (gain)/loss
|
(436)
|
277
|
Asset write-down
loss
|
—
|
1,057
|
Employee severance,
transition and transformation costs
|
44
|
97
|
Equity investment
asset impairment
|
—
|
33
|
Other
|
29
|
25
|
Total adjusting
items
|
(363)
|
1,489
|
Adjusted
EBITDA
|
3,769
|
3,406
|
Depreciation and
amortization
|
(840)
|
(824)
|
Interest
expense
|
(685)
|
(656)
|
Income tax
(expense)/recovery
|
(584)
|
73
|
(Earnings)/loss
attributable to noncontrolling interests and redeemable
|
|
|
noncontrolling
interests
|
(37)
|
24
|
Preference share
dividends
|
(95)
|
(89)
|
Adjusting items in
respect of:
|
|
|
Interest
expense
|
17
|
34
|
Income
taxes
|
96
|
(329)
|
Noncontrolling
interests and redeemable noncontrolling interests
|
(1)
|
(264)
|
Adjusted
earnings
|
1,640
|
1,375
|
Adjusted earnings
per common share
|
0.81
|
0.82
|
APPENDIX B
NON-GAAP RECONCILIATION – SEGMENTED EBITDA TO ADJUSTED
EBITDA
LIQUIDS PIPELINES
|
Three months
ended
March 31,
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
Adjusted
EBITDA
|
1,729
|
1,627
|
Change in unrealized
derivative fair value gain/(loss)
|
343
|
(298)
|
Asset write-down loss
- asset held for sale
|
—
|
(144)
|
Employee severance,
transition and transformation costs
|
—
|
(26)
|
Other
|
—
|
(3)
|
Total
adjustments
|
343
|
(471)
|
EBITDA
|
2,072
|
1,156
|
GAS TRANSMISSION AND MIDSTREAM
|
Three months
ended
March 31,
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
Adjusted
EBITDA
|
1,040
|
1,046
|
Change in unrealized
derivative fair value gain
|
—
|
6
|
Asset write-down loss
- US Midstream
|
—
|
(913)
|
Employee severance,
transition and transformation costs
|
—
|
(7)
|
Other
|
(20)
|
(6)
|
Total
adjustments
|
(20)
|
(920)
|
EBITDA
|
1,020
|
126
|
GAS DISTRIBUTION
|
Three months
ended March 31,
|
|
2019
|
2018
|
(unaudited;
millions of Canadian dollars)
|
|
|
Adjusted
EBITDA
|
693
|
646
|
Change in unrealized
derivative fair value gain
|
4
|
1
|
Noverco Inc. equity
earnings adjustment
|
—
|
(9)
|
Employee severance,
transition and transformation costs
|
(35)
|
(2)
|
Total
adjustments
|
(31)
|
(10)
|
EBITDA
|
662
|
636
|
RENEWABLE POWER GENERATION AND TRANSMISSION
|
Three months
ended
March 31,
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
Adjusted
EBITDA
|
123
|
139
|
Change in unrealized
derivative fair value gain
|
1
|
3
|
Equity investment
asset impairment
|
—
|
(33)
|
Total
adjustments
|
1
|
(30)
|
EBITDA
|
124
|
109
|
ENERGY SERVICES
|
Three months
ended March 31,
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
Adjusted
EBITDA
|
176
|
22
|
Change in unrealized
derivative fair value gain/(loss)
|
(164)
|
147
|
Write-down of
inventory to the lower of cost or market
|
(6)
|
—
|
Total
adjustments
|
(170)
|
147
|
EBITDA
|
6
|
169
|
ELIMINATIONS AND OTHER
|
Three months
ended
March 31,
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
Adjusted
earnings/(loss) before interest, income taxes, and depreciation
and
|
|
|
amortization
|
8
|
(74)
|
Change in unrealized
derivative fair value gain/(loss)
|
252
|
(136)
|
Employee severance,
transition and transformation costs
|
(9)
|
(62)
|
Other
|
(3)
|
(7)
|
Total
adjustments
|
240
|
(205)
|
Earnings/(loss)
before interest, income taxes, and depreciation and
|
|
|
amortization
|
248
|
(279)
|
APPENDIX C
NON-GAAP RECONCILIATION – CASH PROVIDED BY OPERATING ACTIVITIES TO
DCF
|
Three months
ended
March 31,
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
Cash provided by
operating activities
|
2,176
|
3,194
|
Adjusted for changes
in operating assets and liabilities1
|
667
|
(622)
|
|
2,843
|
2,572
|
Distributions to
noncontrolling interests and redeemable noncontrolling
interests
|
(46)
|
(293)
|
Preference share
dividends
|
(95)
|
(87)
|
Maintenance capital
expenditures2
|
(179)
|
(165)
|
Significant adjusting
items:
|
|
|
Other receipts of
cash not recognized in revenue3
|
53
|
76
|
Employee severance,
transition and transformation costs
|
44
|
132
|
Distributions from
equity investments in excess of cumulative
earnings4
|
61
|
57
|
Other
items
|
77
|
20
|
DCF
|
2,758
|
2,312
|
1
|
Changes in
operating assets and liabilities, net of recoveries.
|
2
|
Maintenance
capital expenditures are expenditures that are required for the
ongoing support and maintenance of the existing pipeline system or
that are necessary to maintain the service capability of the
existing assets (including the replacement of components that are
worn, obsolete or completing their useful lives). For the purpose
of DCF, maintenance capital excludes expenditures that extend asset
useful lives, increase capacities from existing levels or reduce
costs to enhance revenues or provide enhancements to the service
capability of the existing assets.
|
3
|
Consists of cash
received net of revenue recognized for contracts under make-up
rights and similar deferred revenue arrangements.
|
4
|
Presented net of
adjusting items.
|
View original
content:http://www.prnewswire.com/news-releases/enbridge-inc-reports-strong-first-quarter-2019-results-300847894.html
SOURCE Enbridge Inc.