CALGARY, Aug, 2, 2019
/CNW/ - Enbridge Inc. (Enbridge or the Company) (TSX:ENB)
(NYSE:ENB) today reported second quarter 2019 financial results and
provided a quarterly business update.
SECOND QUARTER 2019 HIGHLIGHTS
(all financial
figures are unaudited and in Canadian dollars unless otherwise
noted)
- GAAP earnings of $1,736 million
or $0.86 per common share for the
second quarter of 2019, compared to $1,071
million or $0.63 per common
share in the second quarter of 2018, both including the impact of a
number of unusual, non-recurring or non-operating factors
- Adjusted earnings of $1,349
million or $0.67 per common
share for the second quarter of 2019, compared to $1,094 million or $0.65 per common share in the second quarter of
2018
- Adjusted earnings before interest, income tax and depreciation
and amortization (EBITDA) of $3,208
million for the second quarter of 2019, compared to
$3,165 million in the second quarter
of 2018
- Cash Provided by Operating Activities of $2,494 million for the second quarter of 2019,
compared to $3,344 million for the
second quarter of 2018
- Distributable Cash Flow (DCF) of $2,310
million for the second quarter of 2019, compared to
$1,858 million for the second quarter
of 2018
- Reaffirmed financial guidance range for 2019 DCF per Share of
$4.30 to $4.60/share
- Launched a binding open season to secure contracted priority
access transportation agreements on the Liquids Mainline System
upon expiry of the Competitive Toll Settlement (CTS) agreement in
June 2021
- Launched a binding open season for a 50 kbpd expansion of the
Express liquids pipeline for service in the first quarter of
2020
- Announced $2 billion of new
secured growth projects across the utilities and renewable power
businesses
- Selected by Venture Global to serve their Plaquemines LNG
project in Louisiana through a
reversal and expansion of a Texas Eastern lateral pipeline, subject
to achieving a positive final investment decision on the LNG
plant
- Brought the US$0.2 billion
Stratton Ridge Texas Eastern mainline expansion into service
CEO COMMENT
"We're very pleased to deliver another strong quarter of
operating and financial results," commented Al Monaco, President and Chief Executive Officer
of Enbridge. "Operationally, all of our core systems continue to
run close to full capacity. We saw strong demand to move crude
volumes on our system from Western
Canada and the Bakken through to U.S. Gulf Coast markets;
our gas transmission business remained in high demand; the
Ontario gas utility saw high
volumes during a colder than normal second quarter; and, we also
benefited from attractive optimization opportunities in our Energy
Services business. Importantly, we've added $2.5 billion of secured capital projects this
year, across our businesses, with attractive commercial frameworks
that align well with our low risk pipeline-utility model and extend
our growth beyond 2020.
"Our operating performance, in combination with new projects
that came into service over the past year, drove record second
quarter EBITDA and DCF. As a result, we continue to anticipate full
year results to be about the middle of our 2019 DCF guidance range
of $4.30 to $4.60 per share.
"In addition to the strong results, we advanced key initiatives
in each of our business units during the quarter. Liquids Pipelines
launched an open season today for contracted capacity on the
Mainline. Liquids Pipelines is also moving forward with Mainline
system optimizations that will be ready later this year, as well as
an expansion of the Express pipeline to be placed into service in
early 2020.
"On the U.S. portion of our Line 3 Replacement Project
execution, in Minnesota, we're
awaiting further guidance from the Public Utilities Commission on
the process and timing to address the Environmental Impact
Statement deficiency identified by the Minnesota Appeals Court in
June. The Minnesota PUC has publicly stated that it can deal with
this matter expeditiously and the State permitting agencies have
indicated their commitment to keep their permitting processes
moving forward during this period, which we view positively.
"In Gas Transmission we continue to advance rate case
discussions for the Texas Eastern and Algonquin systems. In the
U.S. Gulf Coast, we are actively pursuing opportunities to support
LNG development by leveraging our incumbent pipeline position in
the region; a good example being our recent selection by Venture
Global to provide transportation services to their Plaquemines LNG
project in Louisiana.
"Within the Gas Utility business we've recently secured two new
capital projects, totaling $0.2
billion, to reinforce the distribution network within our
existing franchise area, which will deliver strong cost of service
utility returns. We also continue to implement initiatives to drive
efficiencies from the recent amalgamation.
"In our Power business, we also announced today that we're
moving forward on the first of our four offshore wind farms under
development in France, with our
partner EDF Renouvelables. The 480MW Saint-Nazaire offshore wind farm will be
located off the northwest French coast. Our $1.8 billion gross investment is underpinned by a
fixed price power purchase agreement that is right in-line with our
low risk business model, while providing a strong equity return.
Looking ahead, we see significant potential to grow our European
offshore renewable power generation business, which will help to
further extend the Company's growth post-2020.
"Strategically, the actions we took over the past year to
streamline, strengthen the balance sheet and move to a pure
pipeline and utility model, have further de-risked the business and
put us in a position of strength to capitalize on opportunities
going forward. We remain focused on our key priorities for the
year, which include strong operating and financial results,
delivering reliable returns, adding to the secured project
inventory, maintaining our financial strength and the continued
self-funding of new growth capital. In seeking to extend growth, we
plan to place an even greater emphasis on capturing the very best
of a large suite of in-franchise organic growth opportunities. We
believe that these actions will maximize shareholder value and
deliver on our attractive investor value proposition.
"Finally, yesterday we experienced a rupture on one of our Texas
Eastern natural gas pipelines near Danville, Kentucky. There has been one
confirmed fatality, and we're deeply saddened by this. Our first
concern is for those impacted by this incident and ensuring the
safety of the community. Our team is on-site providing necessary
support and resources to the community. In addition, the National
Transportation Safety Board is on-site conducting an investigation
and we are actively supporting their work. The impacted
pipeline will not be returned into service until it is absolutely
safe to do so. This serves as a critical reminder as to why the
safety of our systems has and always will remain our number one
priority.
"In summary, it was another strong quarter for the Company and
we're pleased with the performance across each of the business
units as well as the progress being made on key priorities,"
concluded Mr. Monaco.
FINANCIAL RESULTS SUMMARY
Financial results for the three and six months ended
June 30, 2019, are summarized in the
table below:
|
|
|
|
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2019
|
2018
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars, except per share amounts; number of
shares in millions)
|
|
|
|
|
|
GAAP Earnings
attributable to common shareholders
|
1,736
|
1,071
|
|
3,627
|
1,516
|
GAAP Earnings per
common share
|
0.86
|
0.63
|
|
1.80
|
0.90
|
Cash provided by
operating activities
|
2,494
|
3,344
|
|
4,670
|
6,538
|
Adjusted
EBITDA1
|
3,208
|
3,165
|
|
6,977
|
6,571
|
Adjusted
Earnings1
|
1,349
|
1,094
|
|
2,989
|
2,469
|
Adjusted Earnings per
common share1
|
0.67
|
0.65
|
|
1.48
|
1.47
|
Distributable Cash
Flow1
|
2,310
|
1,858
|
|
5,068
|
4,170
|
Weighted average
common shares outstanding
|
2,018
|
1,695
|
|
2,017
|
1,690
|
1
|
Non-GAAP financial
measures. Schedules reconciling adjusted EBITDA, adjusted earnings,
adjusted earnings per common share and distributable cash flow are
available as Appendices to this news release.
|
GAAP earnings attributable to common shareholders for the second
quarter of 2019 increased by $665
million or $0.23 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, the most
prominent being the change in non-cash derivative fair value gains
and losses between periods. Partially offsetting the increase in
GAAP earnings attributable to common shareholders was a non-cash,
write-down of crude oil and natural gas inventories to the lower of
cost or market in the Energy Services business.
Adjusted earnings in the second quarter 2019 increased by
$255 million. The increase was
primarily driven by strong operating results across many of the
Company's business units and from new projects placed into service
in late 2018, partially offset by the loss of contributions from
assets that were sold during 2018. On a per share basis, adjusted
earnings increased by $0.02 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 second quarter was $2,310
million, an increase of $452
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
$2 billion of new growth projects
across several business units, which in combination with projects
announced in the first quarter, provides further visibility to the
Company's growth post 2020.
Enbridge Gas Inc. (EGI) will proceed with $0.2 billion of system modernization and
reinforcement work in Windsor and
Owen Sound, Ontario. These new
capital projects will earn a cost of service return under the newly
approved incentive based rate-making structure. These projects are
expected to come into service in the fourth quarter 2020.
The Company is also moving forward with its first offshore wind
project in France. The
Saint-Nazaire project is backed by
a 20-year fixed price power purchase agreement with the French
State, with unique power production protection, providing for a
strong return underpinned by a solid commercial model. Enbridge is
a 50% partner in the development company with EDF Renouvelables.
The Company's share of the total investment in the project is
$1.8 billion. Enbridge's equity
contribution will be $0.3 billion,
with the remainder of the construction financed through
non-recourse project level debt. This project is expected to come
into service in late 2022.
In the Gas Transmission business, although not included in the
Company's secured capital, Enbridge recently secured the rights to
serve Venture Global's Plaquemines LNG project in Louisiana through a $0.5 billion reversal and expansion of a Texas
Eastern lateral pipeline, subject to achieving a positive final
investment decision on the LNG plant.
MAINLINE CONTRACTING
On August 2, following several
months of consultations and negotiations with the Company's
shippers, Enbridge launched an open season for transportation
services on the Liquids Mainline System. Following completion of
the Line 3 Replacement project, Mainline capacity will be 3.225
mbpd, of which up to 2.9 mbpd will be contracted with the remaining
325 kbpd remaining in spot service. The open season will
provide shippers with the opportunity to enter into long-term
contracts for priority access on the Mainline System upon maturity
of the current CTS agreement on June 30,
2021.
Key terms of the offering include:
- Take-or-pay and/or requirements contract structure
- 8-20 year term with discounts for larger volumes and longer
duration
- 10% spot capacity availability
The offering has been structured to ensure a fair and
transparent process for all potential shippers, including small
volume producers. The open season will run through October 2, 2019.
WCSB EGRESS INITIATIVES
In late 2019, the Company expects to deliver approximately 85
kbpd of incremental Mainline throughput, which is near the top of
its previously guided range of 50-100 kbpd. This additional
throughput will be achieved within the Company's current system
capacity and operating parameters through crude delivery and
receipt window efficiencies, optimization of crude quality slates,
as well as the recovery of Line 4 capacity, which had been
previously planned for in early 2020. Together, these capital
efficient initiatives will provide much needed and cost effective
near-term egress for Western Canadian Sedimentary Basin (WCSB)
production.
On July 3, the Company launched an
open season to support a 50 kbpd expansion of the Express pipeline.
This expansion will provide additional takeaway capacity out of the
WCSB to serve the PADD IV market and is expected to be available by
the first quarter of 2020.
PROJECT EXECUTION UPDATE
The Company now has an inventory of approximately $19 billion of secured projects at various stages
of execution, which includes approximately $2.5 billion of projects secured year to date.
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.
In the second quarter, the Company brought the US$0.2 billion Texas Eastern Stratton Ridge
mainline expansion project into service. The project is underpinned
by a long-term take-or-pay contracts and further advances the
Company's U.S. Gulf Coast LNG export strategy.
Of the remaining projects targeted for completion in 2019, the
two largest are the US$0.7 billion
investment in the Gray Oak pipeline and the $1.1 billion HoHe See offshore wind power project
in Germany. The Gray Oak pipeline
is on track for completion by the end of the year, with volumes
expected to ramp up in the first quarter of 2020 given the pressing
need for incremental crude export capacity out of the Permian
basin.
Execution of the 497MW HoHe See project continues to advance as
planned with first power achieved in mid-July and full operations
expected in the fourth quarter of 2019 as the remaining turbines
are connected to the grid.
Line 3 Replacement
The $9 billion Line 3 Replacement
Project is a significant component of the Company's secured project
inventory. It is a critical integrity replacement project that will
enhance the safety and reliability of Enbridge's Liquids Mainline
System.
The Canadian segment of the pipeline replacement work is now
substantially complete. In Wisconsin the replacement pipeline was placed
into service in 2018 and the remainder of the U.S. portion in
North Dakota, which is
substantially permitted, and Minnesota is still to be constructed. In
Minnesota, 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, the Minnesota Pollution Control
Agency, as well as other local government agencies in Minnesota.
On June 3, 2019, the Minnesota Court of Appeals rendered a decision
on the Minnesota Public Utilities Commission's (MPUC) adequacy
determination of the Environmental Impact Statement (EIS). While
denying eight of the nine appealed items, the Minnesota Court of Appeals identified one
issue that led them to reverse the adequacy determination. The
Court remanded and directed the MPUC to perform spill modeling
analysis within the Lake Superior Watershed. On July 3, 2019, several parties to the original
appeal of the EIS, petitioned for Minnesota Supreme Court review of
the Minnesota Court of Appeals
June 3, 2019 decision. The MPUC and
Enbridge responded to those petitions on July 23, 2019 and the Minnesota Supreme Court is
expected to decide whether to accept or decline further review by
September 3, 2019.
As for environmental permits, the spill modelling required by
the Court of Appeals is a prerequisite to finalizing other state
permits. At this time, Enbridge cannot determine when all necessary
permits will be issued pending receipt of further information from
the MPUC on a timeline to complete this work. The MPUC's statement
on July 3, 2019 indicated that the
agency will seek public comment and work expeditiously to address
the EIS deficiency. Additionally, the State permitting agencies
have confirmed they will continue to advance their permitting work
in parallel with MPUC process. The Company expects to hear from the
MPUC regarding their updated process and timelines, after which the
Company expects permitting agencies to re-align their timelines to
the MPUC process.
Depending on the final in-service date, there is a risk that the
project may exceed the Company's total cost estimate of
$9 billion for the combined Line 3
replacement project. However, at this time, the Company does not
anticipate any capital cost impacts that would be material to
Enbridge's financial position and outlook.
GAS TRANSMISSION REGULATORY PROCESS UPDATE
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 and intervenors to advance rate
proceedings and settlement discussions on Texas Eastern, Algonquin
and East Tennessee. For Texas Eastern, settlement discussions
continue, with the expectation of achieving a negotiated settlement
or commencing a rate case hearing. In either case the path to
resolution is expected to be determined before the end of the
year. The Company has also commenced early stage rate
discussions with Algonquin customers with the expectation of a
pre-packaged settlement on that system. Lastly, for East Tennessee, a settlement agreement was
filed on May 23, 2019 and an order
from the FERC is expected shortly.
FINANCING UPDATE
In 2018, Enbridge reached agreements to sell over $7.8 billion of non-core assets. Proceeds from
these asset sales have provided the Company with significant
additional financial flexibility to further strengthen the balance
sheet and self-fund its secured growth program, including
$2 billion of newly secured projects
in the second quarter. As of June 30,
2019, the Company's consolidated Debt-to-EBITDA ratio was
4.6x on a trailing twelve month basis. This is well within the
Company's long term target credit metric range of 4.5x to below
5.0x Debt-to-EBITDA.
The delay in the Line 3 Replacement project in-service date from
late 2019 is not expected to have a material impact on leverage
ratios. While the trajectory of further leverage reduction below
the target credit metric range, absent new investments, may shift
out slightly, credit metrics are expected to remain well within the
Company's long-term guidance range.
SECOND 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
second quarter of 2019.
GAAP SEGMENT EBITDA AND CASH FLOW FROM OPERATIONS
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2019
|
2018
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
|
Liquids
Pipelines
|
1,992
|
1,322
|
|
4,064
|
2,478
|
Gas Transmission and
Midstream
|
941
|
1,014
|
|
1,961
|
1,140
|
Gas
Distribution
|
390
|
370
|
|
1,052
|
1,006
|
Renewable Power
Generation and Transmission
|
94
|
126
|
|
218
|
235
|
Energy
Services
|
221
|
35
|
|
227
|
204
|
Eliminations and
Other
|
107
|
(118)
|
|
355
|
(397)
|
EBITDA
|
3,745
|
2,749
|
|
7,877
|
4,666
|
|
|
|
|
|
|
Earnings
attributable to common shareholders
|
1,736
|
1,071
|
|
3,627
|
1,516
|
|
|
|
|
|
|
Cash provided by
operating activities
|
2,494
|
3,344
|
|
4,670
|
6,538
|
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
June 30,
|
|
Six months ended
June 30,
|
|
2019
|
2018
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars, except per share
amounts)
|
|
|
|
|
|
Liquids
Pipelines
|
1,766
|
1,629
|
|
3,495
|
3,256
|
Gas Transmission and
Midstream
|
936
|
1,032
|
|
1,976
|
2,078
|
Gas
Distribution
|
390
|
369
|
|
1,083
|
1,015
|
Renewable Power
Generation and Transmission
|
100
|
125
|
|
223
|
264
|
Energy
Services
|
88
|
62
|
|
264
|
84
|
Eliminations and
Other
|
(72)
|
(52)
|
|
(64)
|
(126)
|
Adjusted
EBITDA1,3
|
3,208
|
3,165
|
|
6,977
|
6,571
|
Maintenance
capital
|
(269)
|
(294)
|
|
(448)
|
(459)
|
Interest
expense1
|
(662)
|
(703)
|
|
(1,346)
|
(1,355)
|
Current income
tax1
|
(53)
|
(82)
|
|
(211)
|
(157)
|
Distributions to
noncontrolling interests and redeemable noncontrolling
interests
|
(54)
|
(306)
|
|
(100)
|
(599)
|
Cash distributions in
excess of equity earnings1
|
189
|
114
|
|
283
|
177
|
Preference share
dividends
|
(96)
|
(87)
|
|
(191)
|
(174)
|
Other receipts of
cash not recognized in revenue2
|
33
|
28
|
|
86
|
104
|
Other non-cash
adjustments
|
14
|
23
|
|
18
|
62
|
DCF3
|
2,310
|
1,858
|
|
5,068
|
4,170
|
Weighted average
common shares outstanding
|
2,018
|
1,695
|
|
2,017
|
1,690
|
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 Appendices to
this news release.
|
Second quarter 2019 DCF increased by $452
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 base
operating performance and incremental contributions from new
projects placed into service, partially offset by the absence of
contributions from non-core assets sold in 2018. For further detail
on business performance refer to Adjusted EBITDA by Segments
below.
- Lower distributions to noncontrolling and redeemable
noncontrolling interests following the completion of Enbridge's
buy-in of the publicly held interest in its sponsored vehicles,
which were completed in the fourth quarter of 2018.
- Higher equity distributions in excess of equity earnings from
equity investments due to strong performance as well as new equity
investments placed into service.
- Lower financing costs due to interest expense savings from the
application of proceeds from last year's non-core asset sales to
debt reduction, partially offset by incremental debt and hybrid
securities issued over the same period.
- Lower maintenance capital due to timing of maintenance
requirements and spend in 2019.
- Lower current taxes due to timing of recognition of newly
enacted Canadian tax legislation coming into effect in the second
half of 2019.
ADJUSTED
EARNINGS
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2019
|
2018
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars, except per share
amounts)
|
|
|
|
|
|
Adjusted
EBITDA2
|
3,208
|
3,165
|
|
6,977
|
6,571
|
Depreciation and
amortization
|
(842)
|
(829)
|
|
(1,682)
|
(1,653)
|
Interest
expense1
|
(643)
|
(677)
|
|
(1,311)
|
(1,299)
|
Income
taxes1
|
(279)
|
(233)
|
|
(767)
|
(489)
|
Noncontrolling
interests and redeemable noncontrolling
interests1
|
1
|
(243)
|
|
(37)
|
(483)
|
Preference share
dividends
|
(96)
|
(89)
|
|
(191)
|
(178)
|
Adjusted
earnings2
|
1,349
|
1,094
|
|
2,989
|
2,469
|
Adjusted earnings
per common share
|
0.67
|
0.65
|
|
1.48
|
1.47
|
1
|
Presented net of
adjusting items.
|
2
|
Schedules
reconciling adjusted EBITDA and adjusted earnings are available as
Appendices to this news release.
|
Adjusted earnings increased by $255
million for the second 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:
- 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.
- Lower financing costs due to interest expense savings from debt
repayments since the second half of 2018, partially offset by
incremental debt and hybrid securities issued over the same
period.
- 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.
- Lower earnings attributable to noncontrolling interests
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.
Adjusted earnings per share for the second quarter of 2019
increased by $0.02 compared with the
second quarter of 2018. The increase in adjusted earnings noted
above, was partially 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 U.S. dollar
denominated businesses were translated at stronger average Canadian
dollar exchange rates in the second quarter of 2019 (C$1.34/$US) when compared to the corresponding
2018 period (C$1.29/$US). A portion
of the U.S. 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
June 30,
|
|
Six months ended
June 30,
|
|
2019
|
2018
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
|
Mainline
System1
|
950
|
956
|
|
1,914
|
1,898
|
Regional Oil Sands
System
|
203
|
207
|
|
430
|
428
|
Gulf Coast and
Mid-Continent System
|
265
|
161
|
|
481
|
339
|
Other2
|
348
|
305
|
|
670
|
591
|
Adjusted
EBITDA3
|
1,766
|
1,629
|
|
3,495
|
3,256
|
|
|
|
|
|
|
Operating Data
(average deliveries – thousands of bpd)
|
|
|
|
|
|
Mainline System -
ex-Gretna volume4
|
2,661
|
2,636
|
|
2,689
|
2,631
|
Regional Oil Sands
System5
|
1,818
|
1,719
|
|
1,785
|
1,751
|
International Joint
Tariff (IJT)6
|
$4.15
|
$4.07
|
|
$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 U.S. 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 second quarter of 2019 was US$1.19 (Q2 2018:
US$1.26).
|
|
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 $137 million for the second quarter of 2019 when
compared to the same period in 2018. The key quarter-over-quarter
performance drivers are summarized below:
- Mainline System EBITDA reflected higher throughput, driven by
strong supply and continued optimizations of the system as well as
a period-over-period increase in the IJT. However, these increases
to EBITDA were more than offset by a lower foreign exchange rate on
contracts used to hedge U.S. dollar denominated revenues from the
Canadian portion of the Mainline System.
- Gulf Coast and Mid-Continent System growth was driven by higher
volumes on Flanagan South and Seaway
pipelines due to the redirection of volumes to the Gulf Coast
resulting from PADD II refinery outages.
- Other increased primarily as a result of strong throughput on
the Bakken Pipeline System.
GAS TRANSMISSION AND MIDSTREAM
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2019
|
2018
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
|
US Gas
Transmission
|
645
|
668
|
|
1,363
|
1,318
|
Canadian Gas
Transmission1
|
191
|
245
|
|
406
|
526
|
US
Midstream
|
51
|
86
|
|
103
|
168
|
Other
|
49
|
33
|
|
104
|
66
|
Adjusted
EBITDA2
|
936
|
1,032
|
|
1,976
|
2,078
|
1
|
Canadian Gas
Transmission includes Alliance Pipeline, which was previously
reported separately.
|
2
|
Schedules
reconciling adjusted EBITDA are available as Appendices to this
news release.
|
Gas Transmission and Midstream adjusted EBITDA decreased by
$96 million for the second 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 decreased due to higher
planned integrity expenditures that are expected to continue over
the remainder of the year, partially offset by incremental
contributions from new pipelines placed into service in late 2018,
including Valley Crossing.
- Canadian Gas Transmission EBITDA period-over-period results
primarily reflect the absence of contributions 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 in the second half of
2019.
- US Midstream adjusted EBITDA primarily reflects the absence of
EBITDA from Midcoast Operating, L.P. which was sold on August 1, 2018.
- Other adjusted EBITDA growth is driven by contributions from
the Big Foot Oil and Gas offshore pipelines which was placed into
service during 2018.
GAS DISTRIBUTION
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2019
|
2018
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
|
Enbridge Gas Inc.
(EGI)
|
373
|
354
|
|
1,015
|
926
|
Other
|
17
|
15
|
|
68
|
89
|
Adjusted
EBITDA1
|
390
|
369
|
|
1,083
|
1,015
|
|
|
|
|
|
|
Operating
Data
|
|
|
|
|
|
EGI
|
|
|
|
|
|
Volumes (billions of
cubic feet)
|
340
|
350
|
|
1,059
|
1,019
|
Number of active
customers (thousands)2
|
|
|
|
3,723
|
3,679
|
Heating degree
days3
|
|
|
|
|
|
Actual
|
593
|
557
|
|
2,639
|
2,457
|
Forecast based on
normal weather4
|
516
|
517
|
|
2,438
|
2,437
|
1
|
Schedules
reconciling adjusted EBITDA are available as Appendices 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 Ontario
Energy Board approved methodology used in setting
rates.
|
Enbridge Gas Distribution and Union Gas 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 $21 million for the second quarter 2019 when
compared to the same period in 2018. The key quarter-over-quarter
performance drivers are summarized below:
- Increased earnings of $4 million
resulting from colder weather in EGI's franchise areas in the
second quarter of 2019 driving higher utilization relative to 2018,
along with higher distribution charges primarily resulting from
increases in distribution rates and customer base.
- The colder weather in the second quarter of 2019 when compared
to the normal weather forecast embedded in rates, positively
impacted EBITDA by approximately $19
million.
RENEWABLE POWER GENERATION AND TRANSMISSION
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2019
|
2018
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
|
Adjusted
EBITDA1
|
100
|
125
|
|
223
|
264
|
1
|
Schedules
reconciling adjusted EBITDA are available as Appendices to this
news release.
|
Renewable Power Generation and Transmission adjusted EBITDA
decreased by $25 million for the
second 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 and weaker
solar radiance at the Company's solar facilities.
- These impacts were partially offset by higher contributions
from the Rampion Offshore Wind Project and stronger operating
performance at certain Canadian wind farms.
ENERGY SERVICES
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2019
|
2018
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
|
Adjusted
EBITDA1
|
88
|
62
|
|
264
|
84
|
1
|
Schedules
reconciling adjusted EBITDA are available as Appendices to this
news release.
|
Energy Services adjusted EBITDA increased by $26 million for the second 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 and into the first
quarter of 2019, which increased opportunities to generate
profitable transportation margins that were realized during the
first and second quarters of 2019.
ELIMINATIONS AND OTHER
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2019
|
2018
|
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
|
Operating and
administrative
|
(11)
|
1
|
|
52
|
(31)
|
Realized foreign
exchange hedge settlements
|
(61)
|
(53)
|
|
(116)
|
(95)
|
Adjusted loss
before interest, income taxes, and
|
|
|
|
|
|
depreciation
and amortization1
|
(72)
|
(52)
|
|
(64)
|
(126)
|
1
|
Schedules
reconciling adjusted EBITDA are available as Appendices 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, U.S. 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 loss before interest, income
taxes and depreciation and amortization decreased by $20 million for the second quarter of 2019, when
compared to the same period in 2018. The key quarter-over-quarter
performance drivers are summarized below:
- Higher operating and administrative costs in 2019 due to timing
of the recovery of certain operating and administrative costs
allocated to the business segments in 2018.
- Higher realized foreign exchange hedge settlement losses
primarily due to higher notional amount of foreign currency
derivatives, partially offset by a smaller unfavourable spread
between the average exchange rate of $1.34 for the second quarter of 2019 (Q2 2018:
$1.29) and the second quarter 2019
hedge rate of $1.24 (Q2 2018:
$1.16).
CONFERENCE CALL
Enbridge will host a conference call and webcast on
August 2, 2019 at 9:00 a.m. Eastern Time (7:00
a.m. Mountain Time) to provide an enterprise wide business
update and review 2019 second 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 8543168#. The call will be audio webcast live at
https://edge.media-server.com/mmc/p/jiy5jnxx. 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 8543168#).
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; expected future growth and
expansion opportunities, including optimization plans; 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 and courts; expectations regarding
commodity prices; supply forecasts; expectations regarding the
impact of transactions, including the transactions undertaken to
simplify our corporate structure; plans to launch binding open
seasons, including the terms and timing thereof; toll and rate case
discussions and filings; and dividend growth and dividend payout
expectation.
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 acquisitions and dispositions; the realization of
anticipated benefits and synergies of transactions; governmental
legislation; litigation; 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 expected EBITDA, expected adjusted EBITDA, earnings/(loss),
expected adjusted earnings/(loss), expected DCF 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 projects and transactions, operating
performance, our dividend policy, regulatory parameters, changes in
regulations applicable to our business, acquisitions and
dispositions, litigation, 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. is a leading
North American energy infrastructure company. We safely and
reliably deliver the energy people need and want to fuel quality of
life. Our core businesses include Liquids Pipelines, which
transports approximately 25 percent of the crude oil produced in
North America; Gas Transmission
and Midstream, which transports approximately 20 percent of the
natural gas consumed in the U.S.; and Utilities and Power
Operations, which serves approximately 3.7 million retail customers
in Ontario, Quebec, and New
Brunswick, and generates approximately 1,600 MW of net
renewable power in North America
and Europe. The Company's common
shares trade on the Toronto and
New York stock exchanges under the
symbol ENB. 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
Morgan
|
Toll Free: (888)
992-0997
|
Toll Free: (800)
481-2804
|
Email:
media@enbridge.com
|
Email:
investor.relations@enbridge.com
|
DIVIDEND DECLARATION
On August 1, 2019, the Company's
Board of Directors declared the following quarterly dividends. All
dividends are payable on September 1,
2019, to shareholders of record on August 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
|
$0.25647
|
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 R3
|
$0.25456
|
Preference Shares,
Series 1
|
US$0.37182
|
Preference Shares,
Series 3
|
$0.25000
|
Preference Shares,
Series 54
|
US$0.33596
|
Preference Shares,
Series 75
|
$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 and was increased to $0.25647 from
$0.25395 on June 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 R was increased to $0.25456 from
$0.25000 on June 1, 2019, due to the reset of the annual dividend
on June 1, 2019, and every five years thereafter
|
4
|
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
|
5
|
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
June 30,
|
Six months ended
June 30,
|
|
2019
|
2018
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
Liquids
Pipelines
|
1,992
|
1,322
|
4,064
|
2,478
|
Gas Transmission and
Midstream
|
941
|
1,014
|
1,961
|
1,140
|
Gas
Distribution
|
390
|
370
|
1,052
|
1,006
|
Renewable Power
Generation and Transmission
|
94
|
126
|
218
|
235
|
Energy
Services
|
221
|
35
|
227
|
204
|
Eliminations and
Other
|
107
|
(118)
|
355
|
(397)
|
EBITDA
|
3,745
|
2,749
|
7,877
|
4,666
|
Depreciation and
amortization
|
(842)
|
(829)
|
(1,682)
|
(1,653)
|
Interest
expense
|
(637)
|
(690)
|
(1,322)
|
(1,346)
|
Income tax
(expense)/recovery
|
(436)
|
97
|
(1,020)
|
170
|
(Earnings)/loss
attributable to noncontrolling interests and
|
|
|
|
|
redeemable
noncontrolling interests
|
2
|
(167)
|
(35)
|
(143)
|
Preference share
dividends
|
(96)
|
(89)
|
(191)
|
(178)
|
Earnings
attributable to common shareholders
|
1,736
|
1,071
|
3,627
|
1,516
|
ADJUSTED EBITDA TO ADJUSTED EARNINGS
|
Three months
ended
June 30,
|
Six months ended
June 30,
|
|
2019
|
2018
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars, except per share
amounts)
|
|
|
|
|
Liquids
Pipelines
|
1,766
|
1,629
|
3,495
|
3,256
|
Gas Transmission and
Midstream
|
936
|
1,032
|
1,976
|
2,078
|
Gas
Distribution
|
390
|
369
|
1,083
|
1,015
|
Renewable Power
Generation and Transmission
|
100
|
125
|
223
|
264
|
Energy
Services
|
88
|
62
|
264
|
84
|
Eliminations and
Other
|
(72)
|
(52)
|
(64)
|
(126)
|
Adjusted
EBITDA
|
3,208
|
3,165
|
6,977
|
6,571
|
Depreciation and
amortization
|
(842)
|
(829)
|
(1,682)
|
(1,653)
|
Interest
expense
|
(643)
|
(677)
|
(1,311)
|
(1,299)
|
Income
taxes
|
(279)
|
(233)
|
(767)
|
(489)
|
Noncontrolling
interests and redeemable noncontrolling interests
|
1
|
(243)
|
(37)
|
(483)
|
Preference share
dividends
|
(96)
|
(89)
|
(191)
|
(178)
|
Adjusted
earnings
|
1,349
|
1,094
|
2,989
|
2,469
|
Adjusted earnings
per common share
|
0.67
|
0.65
|
1.48
|
1.47
|
EBITDA TO ADJUSTED EARNINGS
|
Three months
ended
June 30,
|
Six months ended
June 30,
|
|
2019
|
2018
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars, except per share
amounts)
|
|
|
|
|
EBITDA
|
3,745
|
2,749
|
7,877
|
4,666
|
Adjusting
items:
|
|
|
|
|
Change in unrealized
derivative fair value (gain)/loss
|
(695)
|
282
|
(1,131)
|
559
|
Asset write-down
loss
|
—
|
10
|
—
|
1,067
|
Employee severance,
transition and transformation costs
|
21
|
29
|
65
|
126
|
Equity investment
asset impairment
|
—
|
—
|
—
|
33
|
Asset monetization
costs
|
—
|
20
|
—
|
20
|
Write-down of
inventory to the lower of cost or market
|
138
|
16
|
144
|
16
|
Other
|
(1)
|
59
|
22
|
84
|
Total adjusting
items
|
(537)
|
416
|
(900)
|
1,905
|
Adjusted
EBITDA
|
3,208
|
3,165
|
6,977
|
6,571
|
Depreciation and
amortization
|
(842)
|
(829)
|
(1,682)
|
(1,653)
|
Interest
expense
|
(637)
|
(690)
|
(1,322)
|
(1,346)
|
Income tax
(expense)/recovery
|
(436)
|
97
|
(1,020)
|
170
|
(Earnings)/loss
attributable to noncontrolling interests
|
|
|
|
|
and redeemable
noncontrolling interests
|
2
|
(167)
|
(35)
|
(143)
|
Preference share
dividends
|
(96)
|
(89)
|
(191)
|
(178)
|
Adjusting items in
respect of:
|
|
|
|
|
Interest
expense
|
(6)
|
13
|
11
|
47
|
Income
taxes
|
157
|
(330)
|
253
|
(659)
|
Noncontrolling
interests and redeemable noncontrolling interests
|
(1)
|
(76)
|
(2)
|
(340)
|
Adjusted
earnings
|
1,349
|
1,094
|
2,989
|
2,469
|
Adjusted earnings
per common share
|
0.67
|
0.65
|
1.48
|
1.47
|
APPENDIX B
NON-GAAP RECONCILIATION – SEGMENTED EBITDA TO ADJUSTED
EBITDA
LIQUIDS PIPELINES
|
Three months
ended
June 30,
|
Six months ended
June 30,
|
|
2019
|
2018
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
Adjusted
EBITDA
|
1,766
|
1,629
|
3,495
|
3,256
|
Change in unrealized
derivative fair value gain/(loss)
|
227
|
(275)
|
570
|
(573)
|
Asset write-down loss
- asset held for sale
|
—
|
(10)
|
—
|
(154)
|
Employee severance,
transition and transformation costs
|
—
|
(2)
|
—
|
(28)
|
Other
|
(1)
|
(20)
|
(1)
|
(23)
|
Total
adjustments
|
226
|
(307)
|
569
|
(778)
|
EBITDA
|
1,992
|
1,322
|
4,064
|
2,478
|
GAS TRANSMISSION AND MIDSTREAM
|
Three months
ended
June 30,
|
Six months ended
June 30,
|
|
2019
|
2018
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
Adjusted
EBITDA
|
936
|
1,032
|
1,976
|
2,078
|
Change in unrealized
derivative fair value gain/(loss)
|
—
|
(4)
|
—
|
2
|
Asset write-down loss
- US Midstream
|
—
|
—
|
—
|
(913)
|
Employee severance,
transition and transformation costs
|
—
|
—
|
—
|
(7)
|
Other
|
5
|
(14)
|
(15)
|
(20)
|
Total
adjustments
|
5
|
(18)
|
(15)
|
(938)
|
EBITDA
|
941
|
1,014
|
1,961
|
1,140
|
GAS DISTRIBUTION
|
Three months
ended
June 30,
|
Six months ended
June 30,
|
|
2019
|
2018
|
2019
|
2018
|
(unaudited;
millions of Canadian dollars)
|
|
|
|
|
Adjusted
EBITDA
|
390
|
369
|
1,083
|
1,015
|
Change in unrealized
derivative fair value gain
|
4
|
2
|
8
|
3
|
Noverco Inc. equity
earnings adjustment
|
—
|
—
|
—
|
(9)
|
Employee severance,
transition and transformation costs
|
(4)
|
(1)
|
(39)
|
(3)
|
Total
adjustments
|
—
|
1
|
(31)
|
(9)
|
EBITDA
|
390
|
370
|
1,052
|
1,006
|
RENEWABLE POWER GENERATION AND TRANSMISSION
|
Three months
ended
June 30,
|
Six months ended
June 30,
|
|
2019
|
2018
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
Adjusted
EBITDA
|
100
|
125
|
223
|
264
|
Change in unrealized
derivative fair value gain
|
1
|
1
|
2
|
4
|
Equity investment
asset impairment
|
—
|
—
|
—
|
(33)
|
Other
|
(7)
|
—
|
(7)
|
—
|
Total
adjustments
|
(6)
|
1
|
(5)
|
(29)
|
EBITDA
|
94
|
126
|
218
|
235
|
ENERGY SERVICES
|
Three months
ended
June 30,
|
Six months ended
June 30,
|
|
2019
|
2018
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
Adjusted
EBITDA
|
88
|
62
|
264
|
84
|
Change in unrealized
derivative fair value gain/(loss)
|
271
|
(11)
|
107
|
136
|
Write-down of
inventory to the lower of cost or market
|
(138)
|
(16)
|
(144)
|
(16)
|
Total
adjustments
|
133
|
(27)
|
(37)
|
120
|
EBITDA
|
221
|
35
|
227
|
204
|
ELIMINATIONS AND OTHER
|
Three months
ended
June 30,
|
Six months ended
June 30,
|
|
2019
|
2018
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
Adjusted loss before
interest, income taxes, and
|
|
|
|
|
depreciation and
amortization
|
(72)
|
(52)
|
(64)
|
(126)
|
Change in unrealized
derivative fair value gain/(loss)
|
192
|
5
|
444
|
(131)
|
Asset monetization
costs
|
—
|
(20)
|
—
|
(20)
|
Employee severance,
transition and transformation costs
|
(17)
|
(26)
|
(26)
|
(88)
|
Other
|
4
|
(25)
|
1
|
(32)
|
Total
adjustments
|
179
|
(66)
|
419
|
(271)
|
Earnings/(loss)
before interest, income taxes, and
|
|
|
|
|
depreciation
and amortization
|
107
|
(118)
|
355
|
(397)
|
APPENDIX C
NON-GAAP RECONCILIATION – CASH PROVIDED BY OPERATING ACTIVITIES TO
DCF
|
Three months
ended
June 30,
|
Six months ended
June 30,
|
|
2019
|
2018
|
2019
|
2018
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
Cash provided by
operating activities
|
2,494
|
3,344
|
4,670
|
6,538
|
Adjusted for changes
in operating assets and liabilities1
|
12
|
(978)
|
679
|
(1,600)
|
|
2,506
|
2,366
|
5,349
|
4,938
|
Distributions to
noncontrolling interests and redeemable noncontrolling
interests
|
(54)
|
(306)
|
(100)
|
(599)
|
Preference share
dividends
|
(96)
|
(87)
|
(191)
|
(174)
|
Maintenance capital
expenditures2
|
(269)
|
(294)
|
(448)
|
(459)
|
Significant adjusting
items:
|
|
|
|
|
Other receipts of
cash not recognized in revenue3
|
33
|
28
|
86
|
104
|
Employee severance,
transition and transformation costs
|
27
|
38
|
71
|
170
|
Distributions from
equity investments in excess of cumulative
earnings4
|
129
|
75
|
190
|
188
|
Other
items
|
34
|
38
|
111
|
2
|
DCF
|
2,310
|
1,858
|
5,068
|
4,170
|
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-second-quarter-2019-results-300895540.html
SOURCE Enbridge Inc.