CALGARY,
AB, July 29, 2022 /CNW/ - Enbridge Inc.
(Enbridge or the Company) (TSX: ENB) (NYSE: ENB) today reported
second quarter 2022 financial results, reaffirmed its 2022
financial outlook and announced $3.6
billion of newly secured growth projects this quarter.
Highlights
(All financial figures are
unaudited and in Canadian dollars unless otherwise noted. *
identifies non-GAAP financial measures. Please refer to
Non-GAAP Reconciliations Appendices.)
- Second quarter GAAP earnings of $0.5
billion or $0.22 per common
share, compared with GAAP earnings of $1.4
billion or $0.69 per common
share in 2021
- Adjusted earnings* of $1.4
billion or $0.67 per common
share*, compared with $1.4
billion or $0.67 per common
share* in 2021
- Adjusted earnings before interest, income taxes and
depreciation and amortization (EBITDA)* of $3.7 billion, compared with $3.3 billion in 2021
- Cash provided by operating activities of $2.5 billion, compared with $2.5 billion in 2021
- Distributable cash flow (DCF)* of $2.7
billion or $1.36 per common
share*, compared with $2.5
billion or $1.24 per common
share* in 2021
- Reaffirmed 2022 full year guidance range for EBITDA of
$15.0 billion to $15.6 billion and DCF per share of $5.20 to $5.50
- Executing the Company's diversified secured capital program
with approximately $4 billion on
track to enter service in 2022, providing visible EBITDA growth in
the years ahead
- Reached a settlement in principle with participants on Texas
Eastern ensuring the system continues to earn an appropriate return
on invested capital
- Sanctioned two projects totaling US$0.4
billion to deliver 1.5 billion cubic feet per day (bcf/d) of
natural gas to Venture Global's Plaquemines LNG facility
- Secured estimated $1.2 billion
expansion of B.C. Pipeline's T-North section to serve growing
regional demand and west coast LNG exports
- Launched a binding open season for a $2.5+ billion expansion of
B.C. Pipeline's T-South section adding approximately 300 million
cubic feet per day of new capacity
- Announced an investment in the 2.1 million tonnes per annum
(mtpa) Woodfibre LNG facility, representing a 30% interest, further
advancing Enbridge's LNG export strategy
- Concluded three successful open seasons for capacity on the
Alliance Pipeline highlighting the unique value of its liquids-rich
transportation capability
- Issued 21st Sustainability Report, demonstrating the Company's
ongoing progress towards the goals set in November 2020
- The Company remains committed to its equity self-funding model
and is on track to achieve Debt to EBITDA of 4.7x or lower by year
end, providing significant financial flexibility
CEO COMMENT
Al Monaco, President and CEO
commented on the following:
"Rising global energy shortages and high commodity prices are
highlighting the importance of secure, affordable, and reliable
energy supply. Energy markets are at a pivotal point, requiring
renewed investment in both conventional and low-carbon energy
supply to meet growing energy demand, while achieving society's
emissions reductions goals. North
America is ideally positioned to play a critical role in
meeting future energy demand with its massive, low-cost and
sustainable resources.
"The current energy outlook validates our dual-pronged strategy
to expand our existing conventional pipeline and export businesses,
while ramping up investment in low-carbon opportunities to drive
future growth platforms. As we execute our strategy, we're
committed to maintaining our low-risk business model which provides
predictable and resilient cash flows in all market
cycles.
"In the second quarter, we continued to progress well on our
strategic priorities.
"Operational performance remained strong, translating into good
second quarter financial results. Through the first six months,
we're tracking to plan and are on target to achieve our full-year
EBITDA and DCF per share guidance.
"Our recently published 21st annual Sustainability
Report provides an update on our performance versus the targets we
set in 2020. Emissions continue to trend positively towards our
2030 interim target, employee diversity is growing, and our safety
results remain industry leading.
"We're progressing discussions with shippers on a new mainline
tolling agreement, with two attractive commercial paths under
evaluation, an incentive tolling or cost-of-service model. Both
options keep us aligned with our customers and provide predictable
cash flows at an appropriate return. We aim to make a decision by
the end of the summer on the best path
forward.
"We're executing on our $10
billion diversified secured growth program with almost
$4 billion on track to enter service
in 2022. And, we've added over $3.6
billion of new projects to our secured backlog, including an
expansion of our B.C. Pipeline System, an extension of Texas
Eastern and an investment in the Woodfibre LNG facility. This
brings the total newly sanctioned growth projects in 2022 to
$4.5 billion. These commercially
secured investments demonstrate the value of our continental
natural gas transmission system's connectivity and cost
competitiveness.
"In May, we sanctioned an extension of our Texas Eastern system
to serve Venture Global's Plaquemines LNG facility in the U.S. Gulf
Coast. Once complete, this will bring the number of directly
connected export facilities to five, and we've secured two
additional projects that will supply Rio Grande and Texas LNG, once
they reach a final investment decision.
"To compliment the great progress we've made on building our
Gulf Coast infrastructure position, we're now executing a
significant component of our natural gas strategy in B.C., which
illustrates the value of our existing position in western
Canada.
"Strong natural gas demand fundamentals and growing exports are
driving a significant opportunity on our B.C. Pipeline System.
We're moving forward with a 535 mmcf/d expansion of the T-North
system stemming from a recent binding open season that garnered
strong commercial support from our customers and is expected to be
in service in 2026. This project will ensure growing regional
supply gets to local and global demand centers.
"We also announced an exciting investment in the 2.1 mtpa
Woodfibre LNG facility, which fits our low-risk pipeline-utility
commercial model and will generate an attractive return. This
investment is a natural extension of our B.C. Pipeline System,
which will supply gas to the facility under a long-term
transportation agreement, and supports further expansion of the
B.C. Pipeline System. Export fundamentals for western Canadian LNG
to Asian markets are strong and the Woodfibre facility provides a
cost-competitive source of supply.
"This investment also aligns very well with our ESG criteria on
two fronts. First, the project has strong local community and
Indigenous support, with the potential for future Indigenous equity
participation. Second, Woodfibre will be among the leaders globally
in emissions per mtpa produced thanks to the use of
hydroelectricity to power the facility.
"With Woodfibre moving forward, we've also announced we're
kicking off an open season on the T-South section of our B.C.
Pipeline to ensure Pacific Northwest demand has access to
affordable, reliable energy. This could result in a $2.5B+
expansion of T-South.
"Our secured growth backlog is now $13
billion with capital to be deployed between now and 2026.
Funding requirements fit well within our $5-6 billion of annual investable capacity, and
we remain committed to our equity self-funding model. Our
disciplined approach to capital investment and low-risk commercial
model support a transparent growth outlook through 2024, and we are
growing the secured backlog supporting growth beyond 2024. We will
continue to prioritize a strong balance sheet, sustainable dividend
growth, attractive organic growth, and share repurchases.
"Through the first half of 2022, we've made excellent progress
advancing our strategic priorities and we believe our strategy will
generate long-term value and an attractive return of capital to
shareholders while supporting growing global demand for secure and
affordable energy needed to bridge to a cleaner energy future.
FINANCIAL RESULTS SUMMARY
Financial results for the three months ended June 30, 2022 and 2021 are summarized in the
table below:
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|
2022
|
2021
|
2022
|
2021
|
(unaudited; millions
of Canadian dollars, except per share amounts;
number of shares in millions)
|
|
|
|
|
GAAP Earnings
attributable to common shareholders
|
450
|
1,394
|
2,377
|
3,294
|
GAAP Earnings per
common share
|
0.22
|
0.69
|
1.17
|
1.63
|
Cash provided by
operating activities
|
2,534
|
2,489
|
5,473
|
5,053
|
Adjusted
EBITDA1
|
3,715
|
3,302
|
7,862
|
7,045
|
Adjusted
Earnings1
|
1,350
|
1,357
|
3,055
|
3,294
|
Adjusted Earnings per
common share1
|
0.67
|
0.67
|
1.51
|
1.48
|
Distributable Cash
Flow1
|
2,747
|
2,503
|
5,819
|
5,264
|
Weighted average common
shares outstanding
|
2,026
|
2,024
|
2,026
|
2,023
|
1 Non-GAAP financial measures. Please refer
to Non-GAAP Reconciliations Appendices.
|
GAAP earnings attributable to common shareholders for the second
quarter of 2022 decreased by $944
million or $0.47 per share
compared with the same period in 2021, primarily due to the impact
of the mark-to-market value of derivative financial instruments
used to manage foreign exchange risk. In the second quarter of
2022, GAAP earnings attributable to common shareholders were
negatively impacted by non-cash, net unrealized derivative fair
value losses of $850 million compared
with unrealized gains of $242 million
in the second quarter of 2021.
The period-over-period comparability of GAAP earnings
attributable to common shareholders is impacted by certain unusual,
infrequent factors or other non-operating factors which are noted
in the reconciliation schedule included in Appendix A of
this news release. Refer to the Management's Discussion &
Analysis for the second quarter of 2022 filed in conjunction
with the second quarter financial statements for a detailed
discussion of GAAP financial results.
Adjusted EBITDA in the second quarter of 2022 increased by
$413 million compared with the same
period in 2021. This was primarily driven by contributions from new
assets placed into service including the U.S. portion of the Line 3
Replacement Project and the acquisition of the Enbridge Ingleside
Energy Center.
Adjusted earnings in the second quarter of 2022 decreased by
$7 million, or less than $0.01 per share, primarily due to higher Adjusted
EBITDA contributions, offset by higher financing costs due to lower
capitalized interest with the completion of the U.S. portion of the
Line 3 Replacement Project along with the impacts of rising
interest rates on floating-rate debt, increased depreciation
expense on new assets placed into service in 2021 and higher income
taxes on higher earnings.
DCF for the second quarter of 2022 increased by $244 million, or $0.12 per share, primarily due to higher Adjusted
EBITDA contributions partially offset by higher cash taxes on
higher taxable earnings and higher financing costs noted
above.
Detailed financial information and analysis can be found below
under Second Quarter 2022 Financial Results.
FINANCIAL OUTLOOK
The Company reaffirms its 2022 financial guidance announced at
its December Investor Day, which included adjusted EBITDA between
$15.0 and $15.6 billion and DCF per share between
$5.20 to $5.50. Results for the first half of 2022 are in
line with expectations and the Company anticipates that its
businesses will continue to experience strong utilization and good
operating results through the balance of the year with normal
course seasonality. Forward financial guidance reflects a provision
in recognition of the uncertainty of future Mainline tolls
associated with the ongoing commercial framework discussions with
shippers.
Strong operational performance is expected to be offset by
challenging market conditions which continue to impact Energy
Services, along with higher financing costs, due to rising interest
rates, relative to 2022 financial guidance.
FINANCING UPDATE
In May of 2022, Enbridge secured a 1-year US$1.5 billion term loan and replaced a maturing
52.5 billion yen term loan
(approximately C$500 million) with a
3-year 84.8 billion yen term loan
(approximately C$800 million) at
attractive rates, with proceeds used to pay existing indebtedness
and for other general corporate purposes.
On June 1, 2022, Enbridge closed
the previously announced redemption of US$200 million outstanding Cumulative Redeemable
Preference Shares, Series J.
The Company expects to continue to fund its secured capital
growth program within its equity self-funding model utilizing
internally generated cash flows and future debt financings while
maintaining its debt-to-EBITDA ratio within the Company's target
range of 4.5 to 5.0x.
SECURED GROWTH PROJECT EXECUTION UPDATE
During the second quarter, the Company added $3.6 billion of growth capital to its secured
capital program, including a US$0.4
billion extension of the Texas Eastern System associated
with Venture Global's Plaquemines LNG project, an estimated
$1.2 billion expansion of B.C.
Pipeline System's T-North section (T-North Expansion), and a
US$1.5 billion investment in the
Woodfibre LNG facility. The commercial terms of these projects,
discussed in more detail below, are consistent with Enbridge's
low-risk business model and demonstrate the value of Enbridge's
existing infrastructure to meet growing demand for
energy.
The Company's current secured growth program is now
approximately $13 billion and in
addition to the newly secured projects announced today, includes
ratable capital requirements for both Gas Transmission's
modernization and Gas Distribution's utility growth programs, as
well as four offshore wind projects in France that are expected to provide a combined
1.5 GW (0.3 GW net) of generation capacity, and a number of other
smaller projects across the business.
Funding of the secured growth program will be provided for
entirely through the Company's $5-6
billion of annual investable capacity, comprised of internally
generated free cash flow and balance sheet capacity.
Venice Extension and Gator Express Meter Projects
The Company has sanctioned the Venice Extension Project and the
Gator Express Meter Project to deliver a combined 1.5 bcf/d of
natural gas to Venture Global's Plaquemines LNG facility located in
Plaquemines Parish, Louisiana.
These projects will involve 36-inch diameter pipe, metering, and
compressor station additions and improvements on the Texas Eastern
System, with a combined estimated capital cost of US$0.4 billion underpinned by long-term
take-or-pay contracts. The Gator Express Meter Project is expected
to be in service in 2023 and the Venice Extension Project is
expected to be in service in 2024.
T-North Expansion
During the second quarter, Enbridge successfully completed a
binding open season for a 535 MMcf/d T-North Expansion project with
an estimated capital cost of $1.2
billion.
The T-North Expansion will consist of compressor unit additions,
pipeline looping and other ancillary station modifications.
Enbridge has now begun the regulatory and permitting process and
plans to file with the Canada Energy Regulator (CER) in 2024.
The project is expected to be placed in service in 2026 and will
be underpinned by a cost-of-service commercial model.
Woodfibre LNG Investment
Today, Enbridge announced it has signed an agreement to invest
in the 2.1 Mtpa (~300 MMcf/d) Woodfibre LNG facility located in
Squamish, B.C. developed by
Pacific Energy Corporation Limited. Enbridge's non-operating
interest will be 30% and will receive a preferred equity
distribution that is consistent with the Company's low-risk
pipeline-utility model. The preferred equity distribution to be
based on capital costs for the investment in the LNG plant and
related facilities to be determined in the first half of
2023.
The total project cost of the Woodfibre LNG facility is
approximately US$5.1 billion and
consists of the liquefaction and floating storage facilities at the
site, as well as an expansion of Fortis BC's' Eagle Gas Pipeline to
transport feedstock from Enbridge's B.C. Pipeline to Woodfibre LNG.
Enbridge will contribute its pro-rata share of construction costs
during project execution, which is expected to be funded through
equity injections of US$0.7 billion
and project level non-recourse debt, the later of which Enbridge's
proportionate share is expected to be approximately US$0.6 billion. Enbridge's investment is expected
to include $0.2 billion of
capitalized interest.
The project holds a 40-year export license and has received all
major environmental permits, including the Squamish Nation
Environmental Agreement. Woodfibre LNG has strong Indigenous
support gained through extensive and meaningful consultation with
local Indigenous Peoples and has signed a benefits agreement with
the Squamish Nation.
The facility is expected to be placed into service in
2027.
BUSINESS UPDATES
Mainline Commercial Framework
The Company is currently advancing two potential commercial
frameworks for the Mainline in parallel: i) a new incentive
rate-making agreement that may be similar to the Competitive Toll
Settlement (CTS) agreement that expired on June 30, 2021, and ii) a Canadian Mainline
cost-of-service application. Either framework is anticipated to
provide attractive risk-adjusted returns for operating the Canadian
Mainline and the range of financial outcomes is not expected to
materially impact Enbridge's financial outlook.
Enbridge has consulted with industry participants and
accordingly shared incentive rate making proposals, supported by
detailed cost information, with an industry negotiation group
comprised of a cross-section of industry participants, including
producers, integrated producers and refiners.
The Company anticipates that it will decide at the end of the
third quarter whether to file either a negotiated incentive tolling
settlement or a cost-of-service application with the Canada Energy
Regulator.
Texas Eastern Transmission, LP (Texas Eastern) Rate
Case
On July 11, 2022, Texas Eastern
requested the chief Administrative Law Judge to suspend the
procedural schedule on its consolidated rate case, as an unopposed
settlement in principle was reached between the participants. Texas
Eastern will be working with the participants to finalize the
Stipulation and Agreement over the next couple of months.
T-South Expansion Open Season
The Company has announced a binding open season to secure the
proposed expansion of the T-South section of its B.C. Pipeline
System for up to 300 MMcf/d with an estimated capital cost of $2.5+
billion. The expansion project is designed to serve demand in the
U.S. Pacific Northwest region. If successful, the Company
anticipates the project would be placed into service in 2028 and be
subject to cost-of-service rates.
Alliance Pipeline (Alliance) Recontracting
During the second quarter of 2022, Alliance successfully
concluded three open seasons for capacity on its system. The
largest of the open seasons resulted in approximately 270 MMcf/d of
incremental long-term firm service, with a volume weighted average
term of 15 years, commencing in November
2022. Recent open seasons have resulted in Alliance being
contracted over 90 percent for both the current and next gas year,
highlighting the value of Alliance's competitive access to
mid-western U.S. gas markets, and as a conduit to the U.S. Gulf
Coast and its LNG market.
Normal Course Issuer Bid (NCIB) Execution
In the second quarter of 2022, Enbridge repurchased and
cancelled approximately 2 million of its common shares for
approximately $100 million as part of
its NCIB.
Enbridge's NCIB commenced on January 5,
2022 and expires on the earlier of January 4, 2023 or when the Company reaches the
approved share repurchase limit of 31,062,331 common shares to an
aggregate amount of up to $1.5
billion. Since inception of the NCIB, the Company has
repurchased approximately 3 million shares.
Enbridge will continue to evaluate opportunities to repurchase
shares pursuant to the Company's NCIB predicated upon maintaining a
strong balance sheet, strong business performance, and evaluated
against the availability and attractiveness of alternative capital
investment opportunities.
SECOND QUARTER 2022 FINANCIAL RESULTS
GAAP Segment EBITDA and Cash Flow from Operations
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2022
|
2021
|
|
2022
|
2021
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Liquids
Pipelines
|
1,818
|
2,044
|
|
4,147
|
4,083
|
Gas Transmission and
Midstream
|
1,119
|
868
|
|
2,133
|
1,841
|
Gas Distribution and
Storage
|
417
|
458
|
|
1,082
|
1,092
|
Renewable Power
Generation
|
122
|
115
|
|
284
|
271
|
Energy
Services
|
(177)
|
(239)
|
|
(278)
|
(175)
|
Eliminations and
Other
|
(704)
|
92
|
|
(349)
|
312
|
EBITDA1
|
2,595
|
3,338
|
|
7,019
|
7,424
|
|
|
|
|
|
|
Earnings
attributable to common shareholders
|
450
|
1,394
|
|
2,377
|
3,294
|
|
|
|
|
|
|
Cash provided by
operating activities
|
2,534
|
2,489
|
|
5,473
|
5,053
|
1
Non-GAAP financial measure. Please refer to Non-GAAP
Reconciliations Appendices.
|
For purposes of evaluating performance, the Company makes
adjustments to GAAP reported earnings, segment EBITDA and cash flow
provided by operating activities for unusual, infrequent or other
non-operating factors, which allow Management and investors to more
accurately compare the Company's performance across periods,
normalizing for factors that are not indicative of underlying
business performance. Tables incorporating these adjustments follow
below. Schedules reconciling EBITDA, adjusted EBITDA, adjusted
EBITDA by segment, adjusted earnings, adjusted earnings per share
and DCF to their closest GAAP equivalent are provided in the
Appendices to this news release.
Adjusted EBITDA By Segment
Adjusted EBITDA generated from U.S. dollar denominated
businesses was translated to Canadian dollars at a higher average
exchange rate (C$1.28/US$) in the
second quarter of 2022 when compared with the second quarter in
2021 (C$1.23/US$). A portion
of U.S. dollar earnings is 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,
|
|
2022
|
2021
|
|
2022
|
2021
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Mainline
System
|
1,223
|
1,050
|
|
2,507
|
2,181
|
Regional Oil Sands
System
|
213
|
231
|
|
458
|
468
|
Gulf Coast and
Mid-Continent System
|
284
|
261
|
|
631
|
450
|
Other
Systems1
|
375
|
302
|
|
716
|
626
|
Adjusted
EBITDA2
|
2,095
|
1,844
|
|
4,312
|
3,725
|
|
|
|
|
|
|
Operating Data
(average deliveries – thousands of bpd)
|
|
|
|
|
|
Mainline System -
ex-Gretna volume3
|
2,782
|
2,623
|
|
2,892
|
2,684
|
International Joint
Tariff (IJT)4
|
$4.27
|
$4.27
|
|
$4.27
|
$4.27
|
Competitive Tolling
Settlement (CTS) Surcharges4
|
$0.26
|
$0.26
|
|
$0.26
|
$0.26
|
Line 3 Replacement
Surcharge4,5
|
$0.94
|
$0.20
|
|
$0.94
|
$0.20
|
1
|
Other consists of
Southern Lights Pipeline, Express-Platte System, Bakken System, and
Feeder
Pipelines & Other.
|
2
|
Non-GAAP financial
measure. Please refer to Non-GAAP Reconciliations
Appendices.
|
3
|
Mainline System
throughput volume represents Mainline System deliveries ex-Gretna,
Manitoba which
is made up of U.S. and Eastern Canada deliveries originating from
Western Canada.
|
4
|
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 55% of total Mainline System
revenue and the average effective FX
rate realized for the Canadian portion of the Mainline during the
second quarter of 2022 was C$1.24/US$
(Q2 2021: C$1.24/US$). The U.S. portion of the Mainline System is
subject to FX translation similar to the
Company's other U.S. based businesses, which are translated at the
average spot rate for a given period.
A portion of this U.S. dollar translation exposure is hedged under
the Company's enterprise-wide financial
risk management program with offsetting hedge settlements reported
within Eliminations and Other. The
Company is currently recording a provision against the IJT in
recognition of the uncertainty of the final
Mainline tolls upon the completion of the Mainline commercial
framework negotiations.
|
5
|
The interim surcharge
of US$0.20 for the Canadian portion of the Line 3 Replacement
Project, which was
placed into service on December 1, 2019, was collected until
October 1, 2021. With the completion of the
U.S. portion of the Line 3 Replacement Project on October 1, 2021,
the interim surcharge was replaced by
the full Line 3 Replacement surcharge.
|
Liquids Pipelines adjusted EBITDA increased $251 million compared with the second quarter of
2021, primarily related to:
- higher Mainline System throughput enabled by incremental Line 3
capacity placed into service October 1,
2021, higher tolls due to the implementation of the full
Line 3 Replacement surcharge of US$0.935 per barrel compared with the surcharge
on the Canadian portion of the project of US$0.20 per barrel in effect prior to
October 2021, partially offset by the
recognition of a provision against the interim Mainline IJT for
barrels shipped in 2022;
- higher contributions from the Gulf Coast and Mid-Continent
System due primarily to the acquisition of the Enbridge Ingleside
Energy Center and higher contributions from the Flanagan South
Pipeline; partially offset by lower contributions from the Seaway
Crude Pipeline System, the Spearhead Pipeline and Cushing storage assets as a result of lower
demand; receipts of cash not recognized in revenue related to
unshipped contracted volumes at the Enbridge Ingleside Energy
Center that have a contractual right to ship at a later date are
recognized in DCF; and
- the positive effect of translating U.S. dollar denominated
EBITDA at a higher Canadian to U.S. dollar average exchange rate,
which is partially offset in the Eliminations and Other segment as
part of the Company's enterprise-wide financial risk management
program.
Gas Transmission And Midstream
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2022
|
2021
|
|
2022
|
2021
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
U.S. Gas
Transmission
|
760
|
721
|
|
1,519
|
1,503
|
Canadian Gas
Transmission
|
151
|
140
|
|
328
|
282
|
U.S.
Midstream
|
131
|
41
|
|
220
|
84
|
Other
|
42
|
33
|
|
75
|
73
|
Adjusted
EBITDA1
|
1,084
|
935
|
|
2,142
|
1,942
|
1
|
Non-GAAP financial
measure. Please refer to Non-GAAP Reconciliations
Appendices.
|
Gas Transmission and Midstream adjusted EBITDA increased
$149 million compared with the second
quarter of 2021, primarily related to:
- higher U.S. Gas Transmission contributions from the Cameron
Extension, Middlesex Extension and the Appalachia to Market
projects placed into service in the fourth quarter of 2021;
- higher Canadian Gas Transmission contributions from the T-South
Expansion and Spruce Ridge projects placed fully into service in
the fourth quarter of 2021 and higher contributions from Enbridge's
investment in the Alliance Pipeline due to higher AECO-Chicago
basis differential, which were partially offset by increased
operating costs incurred in the second quarter of 2022;
- higher U.S. midstream contributions resulting from higher
commodity prices at Enbridge's DCP and Aux
Sable joint ventures; and
- the positive effect of translating U.S. dollar denominated
EBITDA at a higher Canadian to U.S. dollar average exchange rate,
which is partially offset in the Eliminations and Other segment as
part of the Company's enterprise-wide financial risk management
program.
Gas Distribution And Storage
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2022
|
2021
|
|
2022
|
2021
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Enbridge Gas Inc.
(EGI)
|
417
|
419
|
|
1,073
|
1,023
|
Other
|
5
|
42
|
|
23
|
84
|
Adjusted
EBITDA1
|
422
|
461
|
|
1,096
|
1,107
|
|
|
|
|
|
|
Operating
Data
|
|
|
|
|
|
EGI
|
|
|
|
|
|
Volumes
(billions of cubic feet)
|
391
|
352
|
|
1,207
|
1,023
|
Number of active
customers2 (millions)
|
3.8
|
3.8
|
|
3.8
|
3.8
|
Heating degree
days3
|
|
|
|
|
|
Actual
|
495
|
482
|
|
2,523
|
2,289
|
Forecast based on
normal weather4
|
523
|
520
|
|
2,444
|
2,444
|
1
|
Non-GAAP financial
measure. Please refer to Non-GAAP Reconciliations
Appendices.
|
2
|
Number of active
customers is the number of natural gas consuming 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
|
Normal weather is the
weather forecast by EGI in its legacy rate zones, using
the forecasting methodologies approved by the Ontario Energy
Board.
|
Gas Distribution and Storage adjusted EBITDA will typically
follow a seasonal profile. It is generally highest in the first and
fourth quarters of the year reflecting greater volumetric demand
during the heating season. 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.
Gas Distribution & Storage adjusted EBITDA decreased
$39 million compared with the second
quarter of 2021 primarily related to:
- the absence of earnings from Enbridge's minority interest in
Noverco Inc. which was sold on December 30,
2021; and
- the timing of operating costs incurred in the second quarter of
2022 when compared with the second quarter of 2021; partially
offset by
- higher distribution charges at EGI resulting from increases in
rates and customer base.
When compared with the normal weather forecast embedded in
rates, the weather in the second quarter of 2022 and 2021 had no
impact on EBITDA.
Renewable Power Generation
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2022
|
2021
|
|
2022
|
2021
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Adjusted
EBITDA1
|
127
|
113
|
|
287
|
267
|
1
|
Non-GAAP financial
measure. Please refer to Non-GAAP Reconciliations
Appendices.
|
Renewable Power Generation adjusted EBITDA increased
$14 million compared with the second
quarter of 2021 primarily related to:
- stronger wind resources at Canadian and U.S. wind facilities;
and
- higher energy pricing at the Rampion offshore wind
facilities.
Energy Services
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2022
|
2021
|
|
2022
|
2021
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Adjusted
EBITDA1
|
(99)
|
(86)
|
|
(170)
|
(161)
|
1
|
Non-GAAP financial
measure. Please refer to Non-GAAP Reconciliations
Appendices.
|
Energy Services adjusted EBITDA decreased $13 million compared with the second quarter of
2021. The decrease is the result of a more pronounced market
structure backwardation than in the same period of 2021 limiting
storage opportunities and significant compression of location and
quality differentials in certain markets.
Eliminations and Other
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2022
|
2021
|
|
2022
|
2021
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Operating and
administrative recoveries
|
17
|
(19)
|
|
85
|
87
|
Realized foreign
exchange hedge settlement gains
|
69
|
54
|
|
110
|
78
|
Adjusted
EBITDA1
|
86
|
35
|
|
195
|
165
|
1
|
Non-GAAP financial
measure. Please refer to Non-GAAP Reconciliations
Appendices.
|
Operating and administrative recoveries captured in this segment
reflect the cost of centrally delivered services (including
depreciation of corporate assets) inclusive of amounts recovered
from business units for the provision of those services. U.S.
dollar denominated earnings within operating segment results are
translated at average foreign exchange rates during the quarter,
and the offsetting impact of settlements made under the Company's
enterprise foreign exchange hedging program are captured in this
corporate segment.
Eliminations and Other adjusted EBITDA increased
$51 million compared with the second quarter of 2021 due
to:
- the timing of recovery of operating and administrative costs
from the business segments; and
- higher realized foreign exchange gains on hedge
settlements.
Distributable Cash Flow
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2022
|
2021
|
|
2022
|
2021
|
(unaudited; millions
of Canadian dollars; number of shares in millions)
|
|
|
|
|
|
Liquids
Pipelines
|
2,095
|
1,844
|
|
4,312
|
3,725
|
Gas Transmission and
Midstream
|
1,084
|
935
|
|
2,142
|
1,942
|
Gas Distribution and
Storage
|
422
|
461
|
|
1,096
|
1,107
|
Renewable Power
Generation
|
127
|
113
|
|
287
|
267
|
Energy
Services
|
(99)
|
(86)
|
|
(170)
|
(161)
|
Eliminations and
Other
|
86
|
35
|
|
195
|
165
|
Adjusted
EBITDA1,3
|
3,715
|
3,302
|
|
7,862
|
7,045
|
Maintenance
capital
|
(147)
|
(161)
|
|
(251)
|
(270)
|
Interest
expense1
|
(787)
|
(635)
|
|
(1,520)
|
(1,312)
|
Current income
tax1
|
(89)
|
(20)
|
|
(262)
|
(121)
|
Distributions to
noncontrolling interests1
|
(64)
|
(73)
|
|
(124)
|
(141)
|
Cash distributions in
excess of equity earnings1
|
111
|
153
|
|
144
|
196
|
Preference share
dividends
|
(82)
|
(90)
|
|
(173)
|
(182)
|
Other receipts of cash
not recognized in revenue2
|
84
|
32
|
|
125
|
51
|
Other non-cash
adjustments
|
6
|
(5)
|
|
18
|
(2)
|
DCF3
|
2,747
|
2,503
|
|
5,819
|
5,264
|
Weighted average
common shares outstanding
|
2,026
|
2,024
|
|
2,026
|
2,023
|
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
|
Non-GAAP financial
measures. Please refer to Non-GAAP Reconciliations
Appendices.
|
Second quarter 2022 DCF increased $244 million compared
with the same period of 2021 primarily due to operational factors
discussed above contributing to higher Adjusted EBITDA, as well
as:
- higher receipts of cash not recognized in revenue related to
unshipped contracted volumes at the Enbridge Ingleside Energy
Center that have a contractual right to ship at a later date;
offset by
- higher interest expense due to lower capitalized interest
associated with the U.S. portion of the Line 3 Replacement Project
placed into service in the fourth quarter of 2021 as well as higher
debt balances associated with advancing the Company's secured
growth program in 2021 and higher interest rates impacting
floating-rate debt; and
- higher current income tax due to higher taxable earnings and an
increase in U.S. minimum taxes.
Adjusted Earnings
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2022
|
2021
|
|
2022
|
2021
|
(unaudited; millions
of Canadian dollars, except per share amounts)
|
|
|
|
|
|
Adjusted
EBITDA1,2
|
3,715
|
3,302
|
|
7,862
|
7,045
|
Depreciation and
amortization
|
(1,103)
|
(929)
|
|
(2,168)
|
(1,861)
|
Interest
expense2
|
(776)
|
(622)
|
|
(1,498)
|
(1,287)
|
Income
taxes2
|
(388)
|
(269)
|
|
(914)
|
(668)
|
Noncontrolling
interests2
|
(11)
|
(35)
|
|
(38)
|
(56)
|
Preference share
dividends
|
(87)
|
(90)
|
|
(189)
|
(182)
|
Adjusted
earnings1
|
1,350
|
1,357
|
|
3,055
|
2,991
|
Adjusted earnings
per common share1
|
0.67
|
0.67
|
|
1.51
|
1.48
|
1
|
Non-GAAP financial
measures. Please refer to Non-GAAP Reconciliations
Appendices.
|
2
|
Presented net of
adjusting items.
|
Adjusted earnings decreased $7 million and adjusted
earnings per share was consistent when compared with the second
quarter in 2021 primarily due to operational factors discussed
above contributing to higher Adjusted EBITDA, offset by:
- higher depreciation expense on new assets placed into service
throughout 2021, including the U.S. portion of the Line 3
Replacement Project, which was placed into service in the fourth
quarter and the Enbridge Ingleside Energy Center acquired in
October, 2021;
- higher interest expense due to lower capitalized interest
associated with the U.S. portion of the Line 3 Replacement Project
placed into service in the fourth quarter of 2021 as well as higher
debt balances associated with advancing the Company's secured
growth program in 2021 and higher interest rates impacting
floating-rate debt; and
- higher income taxes due to higher taxable earnings and an
increase in U.S. minimum taxes.
CONFERENCE CALL
Enbridge will host a conference call and webcast on
July 29, 2022 at 9:00 a.m. Eastern Time (7:00
a.m. Mountain Time) to provide an enterprise wide business
update and review 2022 second quarter results. Analysts, members of
the media and other interested parties can access the call toll
free at (888) 396-8049 using the participant passcode of 07842067.
The call will be audio webcast live at
https://event.on24.com/wcc/r/3824792/88DB5677122E3804BF607036212 1F8BE.
It is recommended that participants dial in or join the audio
webcast fifteen minutes prior to the scheduled start time. A
webcast replay will be available soon after the conclusion of the
event and a transcript will be posted to the website. The replay
will be available for seven days after the call toll-free (877)
674-7070 (conference ID: 842067).
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.
DIVIDEND DECLARATION
On July 26, 2022, the Company's
Board of Directors declared the following quarterly dividends. All
dividends are payable on September 1,
2022 to shareholders of record on August 15, 2022.
|
Dividend per
share
|
Common
Shares
|
$0.86000
|
Preference Shares,
Series A
|
$0.34375
|
Preference Shares,
Series B2
|
$0.32513
|
Preference Shares,
Series D
|
$0.27875
|
Preference Shares,
Series F
|
$0.29306
|
Preference Shares,
Series H
|
$0.27350
|
Preference Shares,
Series L
|
US$0.30993
|
Preference Shares,
Series N
|
$0.31788
|
Preference Shares,
Series P
|
$0.27369
|
Preference Shares,
Series R
|
$0.25456
|
Preference Shares,
Series 1
|
US$0.37182
|
Preference Shares,
Series 3
|
$0.23356
|
Preference Shares,
Series 5
|
US$0.33596
|
Preference Shares,
Series 7
|
$0.27806
|
Preference Shares,
Series 9
|
$0.25606
|
Preference Shares,
Series 11
|
$0.24613
|
Preference Shares,
Series 13
|
$0.19019
|
Preference Shares,
Series 15
|
$0.18644
|
Preference Shares,
Series 19
|
$0.30625
|
1
|
The quarterly
dividend per common share was
increased 3% to $0.86 from $0.835, effective March
1, 2022.
|
FORWARD-LOOKING INFORMATION
Forward-looking information, or forward-looking statements,
have been included in this news release to provide information
about Enbridge 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: Enbridge's strategic plan, priorities and outlook; 2022
financial guidance, including projected DCF per share and adjusted
EBITDA and expected growth thereof; expected dividends, dividend
growth and dividend policy; expected supply of, demand for, exports
of and prices of crude oil, natural gas, natural gas liquids (NGL),
liquified natural gas (LNG) and renewable energy; energy transition
and low carbon energy and our approach thereto; environmental,
social and governance (ESG) goals, targets and plans, including
greenhouse gas (GHG) emissions intensity and reduction targets, ESG
engagement and disclosure and diversity and inclusion goals;
anticipated utilization of our assets, expected EBITDA and expected
adjusted EBITDA; expected earnings/(loss) and adjusted
earnings/(loss); expected DCF and DCF per share; expected future
cash flows; expected debt-to EBITDA range; expected shareholder
returns and asset returns; expected performance of the Company's
businesses, including customer growth and organic growth
opportunities; financial strength, capacity and flexibility;
financing costs; expectations on leverage, sources of liquidity and
sufficiency of financial resources; expected in-service dates and
costs related to announced projects and projects under construction
and system expansion, optimization and modernization; capital
allocation framework and priorities; impact of weather and
seasonality; share repurchases under normal course issuer bid;
investment capacity; expected future growth and expansion
opportunities, including secured growth program, development
opportunities and low carbon and new energies opportunities and
strategy, including with respect to the Woodfibre LNG investment,
T-North and T-South expansions, and Venice extension project, expected
acquisitions, dispositions and other transactions, and the timing
and benefits thereof; expected future actions and decisions of
regulators and courts and the timing and impact thereof; and toll
and rate case discussions and filings, including with respect to
the Mainline and Texas Eastern, and anticipated timing and impact
therefrom.
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: energy transition,
including the drivers and pace thereof; the COVID-19 pandemic and
the duration and impact thereof; global economic growth and trade;
the expected supply of and demand for crude oil, natural gas, NGL,
LNG and renewable energy; prices of crude oil, natural gas, NGL,
LNG and renewable energy; anticipated utilization of our assets;
anticipated cost savings; exchange rates; inflation; interest
rates; availability and price of labour and construction materials;
the stability of our supply chain; operational reliability and
performance; customer, regulatory and stakeholder support and
approvals; anticipated construction and in-service dates; weather;
announced and potential acquisition, disposition and other
corporate transactions and projects and the timing and impact
thereof; governmental legislation; litigation; credit ratings;
hedging program; expected EBITDA and expected adjusted EBITDA;
expected earnings/(loss) and adjusted earnings/(loss); expected
earnings/(loss) or adjusted earnings/(loss) per share; expected
future cash flows and expected future DCF and DCF per share;
estimated future dividends; financial strength and flexibility;
debt and equity market conditions; and general economic and
competitive conditions. Assumptions regarding the expected supply
of and demand for crude oil, natural gas, NGL, LNG 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, interest rates and the COVID-19 pandemic
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 expected EBITDA, expected
adjusted EBITDA, expected earnings/(loss), expected adjusted
earnings/(loss), expected DCF and associated per share amounts and
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; the timing and closing of
acquisitions, dispositions and other transactions and the
realization of anticipated benefits therefrom; customer, government
and regulatory approvals on construction and in-service schedules
and cost recovery regimes; and the COVID-19 pandemic and the
duration and impact thereof.
Enbridge's forward-looking statements are subject to risks
and uncertainties pertaining to the realization of anticipated
benefits and synergies of projects and transactions, successful
execution of our strategic priorities, operating performance, the
Company's dividend policy, regulatory parameters, changes in
regulations applicable to the Company's business, litigation,
acquisitions and dispositions and other transactions, 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, political decisions,
exchange rates, interest rates, commodity prices, supply of and
demand for commodities and the COVID-19 pandemic, including but not
limited to those risks and uncertainties discussed in this and in
the Company's other filings with Canadian and U.S. 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.
At Enbridge, we safely connect millions of people to the
energy they rely on every day, fueling quality of life through our
North American natural gas, oil or renewable power networks and our
growing European offshore wind portfolio. We're investing in modern
energy delivery infrastructure to sustain access to secure,
affordable energy and building on two decades of experience in
renewable energy to advance new technologies including wind and
solar power, hydrogen, renewable natural gas and carbon capture and
storage. We're committed to reducing the carbon footprint of the
energy we deliver, and to achieving net zero greenhouse gas
emissions by 2050. Headquartered in Calgary, Alberta, Enbridge's common shares
trade under the symbol ENB on the Toronto (TSX) and New York (NYSE) stock exchanges. To learn
more, visit us at enbridge.com
None of the information contained in, or connected to,
Enbridge's website is incorporated in or otherwise forms 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
|
NON-GAAP RECONCILIATIONS APPENDICES
This news release contains references to EBITDA, 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.
EBITDA represents earnings before interest, tax, depreciation
and amortization.
Adjusted EBITDA represents EBITDA adjusted for unusual,
infrequent or other non-operating factors on both a consolidated
and segmented basis. Management uses EBITDA and 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, infrequent or other
non-operating factors included in adjusted EBITDA, as well as
adjustments for unusual, infrequent or other non-operating factors
in respect of depreciation and amortization expense, interest
expense, income taxes and 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, preference share
dividends and maintenance capital expenditures and further adjusted
for unusual, infrequent or other non-operating factors. Management
also uses DCF to assess the performance of the Company and to set
its dividend payout target.
This news release also contains references to Debt to EBITDA, a
non-GAAP ratio which utilizes adjusted EBITDA as one of its
components. Debt to EBITDA is used as a liquidity measure to
indicate the amount of adjusted earnings to pay debt, as calculated
on the basis of generally accepted accounting principles in
the United States of America (U.S.
GAAP), before covering interest, tax, depreciation and
amortization.
Reconciliations of forward-looking non-GAAP financial measures
and non-GAAP ratios to comparable GAAP measures are not available
due to the challenges and impracticability of estimating certain
items, particularly certain contingent liabilities and non-cash
unrealized derivative fair value losses and gains subject to market
variability. Because of those challenges, a reconciliation of
forward-looking non-GAAP financial measures and non-GAAP ratios is
not available without unreasonable effort.
Our non-GAAP financial measures and non-GAAP ratios described
above are not measures that have standardized meaning prescribed by
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,
|
|
2022
|
2021
|
|
2022
|
2021
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Liquids
Pipelines
|
1,818
|
2,044
|
|
4,147
|
4,083
|
Gas Transmission and
Midstream
|
1,119
|
868
|
|
2,133
|
1,841
|
Gas Distribution and
Storage
|
417
|
458
|
|
1,082
|
1,092
|
Renewable Power
Generation
|
122
|
115
|
|
284
|
271
|
Energy
Services
|
(177)
|
(239)
|
|
(278)
|
(175)
|
Eliminations and
Other
|
(704)
|
92
|
|
(349)
|
312
|
EBITDA
|
2,595
|
3,338
|
|
7,019
|
7,424
|
Depreciation and
amortization
|
(1,064)
|
(929)
|
|
(2,119)
|
(1,861)
|
Interest
expense
|
(791)
|
(618)
|
|
(1,510)
|
(1,275)
|
Income tax
expense
|
(133)
|
(270)
|
|
(726)
|
(753)
|
Earnings attributable
to noncontrolling interests
|
(12)
|
(37)
|
|
(40)
|
(59)
|
Preference share
dividends
|
(145)
|
(90)
|
|
(247)
|
(182)
|
Earnings
attributable to common shareholders
|
450
|
1,394
|
|
2,377
|
3,294
|
ADJUSTED EBITDA TO ADJUSTED EARNINGS
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2022
|
2021
|
|
2022
|
2021
|
(unaudited; millions
of Canadian dollars, except per share amounts)
|
|
|
|
|
|
Liquids
Pipelines
|
2,095
|
1,844
|
|
4,312
|
3,725
|
Gas Transmission and
Midstream
|
1,084
|
935
|
|
2,142
|
1,942
|
Gas Distribution and
Storage
|
422
|
461
|
|
1,096
|
1,107
|
Renewable Power
Generation
|
127
|
113
|
|
287
|
267
|
Energy
Services
|
(99)
|
(86)
|
|
(170)
|
(161)
|
Eliminations and
Other
|
86
|
35
|
|
195
|
165
|
Adjusted
EBITDA
|
3,715
|
3,302
|
|
7,862
|
7,045
|
Depreciation and
amortization
|
(1,103)
|
(929)
|
|
(2,168)
|
(1,861)
|
Interest
expense
|
(776)
|
(622)
|
|
(1,498)
|
(1,287)
|
Income tax
expense
|
(388)
|
(269)
|
|
(914)
|
(668)
|
Earnings attributable
to noncontrolling interests
|
(11)
|
(35)
|
|
(38)
|
(56)
|
Preference share
dividends
|
(87)
|
(90)
|
|
(189)
|
(182)
|
Adjusted
earnings
|
1,350
|
1,357
|
|
3,055
|
2,991
|
Adjusted earnings
per common share
|
0.67
|
0.67
|
|
1.51
|
1.48
|
EBITDA TO ADJUSTED EARNINGS
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2022
|
2021
|
|
2022
|
2021
|
(unaudited; millions
of Canadian dollars, except per share amounts)
|
|
|
|
|
|
EBITDA
|
2,595
|
3,338
|
|
7,019
|
7,424
|
Adjusting
items:
|
|
|
|
|
|
Change in unrealized
derivative fair value (gain)/loss
|
850
|
(242)
|
|
417
|
(521)
|
Change in unrealized
derivative fair value (gain)/loss -
Commodity prices
|
16
|
153
|
|
36
|
14
|
Equity earnings
adjustment - DCP Midstream, LLC
|
(36)
|
47
|
|
26
|
66
|
Net inventory
adjustment
|
62
|
—
|
|
72
|
—
|
Enterprise insurance
strategy restructuring expenses
|
100
|
—
|
|
100
|
—
|
Assets
impairment
|
47
|
—
|
|
91
|
—
|
Other
|
81
|
6
|
|
101
|
62
|
Total adjusting
items
|
1,120
|
(36)
|
|
843
|
(379)
|
Adjusted
EBITDA
|
3,715
|
3,302
|
|
7,862
|
7,045
|
Depreciation and
amortization
|
(1,064)
|
(929)
|
|
(2,119)
|
(1,861)
|
Interest
expense
|
(791)
|
(618)
|
|
(1,510)
|
(1,275)
|
Income tax
expense
|
(132)
|
(270)
|
|
(725)
|
(753)
|
Earnings attributable
to noncontrolling interests
|
(12)
|
(37)
|
|
(40)
|
(59)
|
Preference share
dividends
|
(145)
|
(90)
|
|
(247)
|
(182)
|
Adjusting items in
respect of:
|
|
|
|
|
|
Depreciation and
amortization
|
(39)
|
—
|
|
(49)
|
—
|
Interest
expense
|
15
|
(4)
|
|
12
|
(12)
|
Income tax
recovery
|
(256)
|
1
|
|
(189)
|
85
|
Earnings attributable
to noncontrolling interests
|
1
|
2
|
|
2
|
3
|
Preference share
dividends
|
58
|
—
|
|
58
|
—
|
Adjusted
earnings
|
1,350
|
1,357
|
|
3,055
|
2,991
|
Adjusted earnings
per common share
|
0.67
|
0.67
|
|
1.51
|
1.48
|
APPENDIX B
NON-GAAP RECONCILIATION – ADJUSTED
EBITDA TO SEGMENTED EBITDA
LIQUIDS PIPELINES
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2022
|
2021
|
|
2022
|
2021
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Adjusted
EBITDA
|
2,095
|
1,844
|
|
4,312
|
3,725
|
Change in unrealized
derivative fair value gain/(loss)
|
(196)
|
145
|
|
(74)
|
306
|
Property tax
settlement
|
—
|
57
|
|
—
|
57
|
Assets
impairment
|
(47)
|
—
|
|
(47)
|
—
|
Other
|
(34)
|
(2)
|
|
(44)
|
(5)
|
Total
adjustments
|
(277)
|
200
|
|
(165)
|
358
|
EBITDA
|
1,818
|
2,044
|
|
4,147
|
4,083
|
GAS TRANSMISSION AND MIDSTREAM
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2022
|
2021
|
|
2022
|
2021
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Adjusted
EBITDA
|
1,084
|
935
|
|
2,142
|
1,942
|
Equity earnings
adjustment - DCP Midstream, LLC
|
36
|
(47)
|
|
(26)
|
(66)
|
Other
|
(1)
|
(20)
|
|
17
|
(35)
|
Total
adjustments
|
35
|
(67)
|
|
(9)
|
(101)
|
EBITDA
|
1,119
|
868
|
|
2,133
|
1,841
|
GAS DISTRIBUTION AND STORAGE
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2022
|
2021
|
|
2022
|
2021
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Adjusted
EBITDA
|
422
|
461
|
|
1,096
|
1,107
|
Change in unrealized
derivative fair value gain
|
—
|
12
|
|
—
|
14
|
Other
|
(5)
|
(15)
|
|
(14)
|
(29)
|
Total
adjustments
|
(5)
|
(3)
|
|
(14)
|
(15)
|
EBITDA
|
417
|
458
|
|
1,082
|
1,092
|
RENEWABLE POWER GENERATION
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2022
|
2021
|
|
2022
|
2021
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Adjusted
EBITDA
|
127
|
113
|
|
287
|
267
|
Change in unrealized
derivative fair value gain
|
2
|
2
|
|
4
|
4
|
Other
|
(7)
|
—
|
|
(7)
|
—
|
Total
adjustments
|
(5)
|
2
|
|
(3)
|
4
|
EBITDA
|
122
|
115
|
|
284
|
271
|
ENERGY SERVICES
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2022
|
2021
|
|
2022
|
2021
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Adjusted
EBITDA
|
(99)
|
(86)
|
|
(170)
|
(161)
|
Change in unrealized
derivative fair value loss
|
(16)
|
(153)
|
|
(36)
|
(14)
|
Net inventory
adjustment
|
(62)
|
—
|
|
(72)
|
—
|
Total
adjustments
|
(78)
|
(153)
|
|
(108)
|
(14)
|
EBITDA
|
(177)
|
(239)
|
|
(278)
|
(175)
|
ELIMINATIONS AND OTHER
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2022
|
2021
|
|
2022
|
2021
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Adjusted
EBITDA
|
86
|
35
|
|
195
|
165
|
Change in unrealized
derivative fair value gain/(loss)
|
(656)
|
83
|
|
(347)
|
197
|
Impairment of lease
assets
|
—
|
—
|
|
(44)
|
—
|
Enterprise insurance
strategy restructuring expenses
|
(100)
|
—
|
|
(100)
|
—
|
Other
|
(34)
|
(26)
|
|
(53)
|
(50)
|
Total
adjustments
|
(790)
|
57
|
|
(544)
|
147
|
EBITDA
|
(704)
|
92
|
|
(349)
|
312
|
APPENDIX C
NON-GAAP RECONCILIATION – CASH
PROVIDED BY OPERATING ACTIVITIES TO DCF
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2022
|
2021
|
|
2022
|
2021
|
(unaudited; millions
of Canadian dollars, except per share amounts)
|
|
|
|
|
|
Cash provided by
operating activities
|
2,534
|
2,489
|
|
5,473
|
5,053
|
Adjusted for changes in
operating assets and liabilities1
|
(114)
|
(55)
|
|
138
|
363
|
|
2,420
|
2,434
|
|
5,611
|
5,416
|
Distributions to
noncontrolling interests2
|
(64)
|
(73)
|
|
(124)
|
(141)
|
Preference share
dividends
|
(82)
|
(90)
|
|
(173)
|
(182)
|
Maintenance capital
expenditures3
|
(147)
|
(161)
|
|
(251)
|
(270)
|
Significant adjusting
items:
|
|
|
|
|
|
Other receipts of cash
not recognized in revenue4
|
84
|
32
|
|
125
|
51
|
Distributions from
equity investments in excess of
cumulative earnings2
|
143
|
184
|
|
326
|
245
|
Enterprise insurance
strategy restructuring expenses
|
100
|
—
|
|
100
|
—
|
Other items
|
293
|
177
|
|
205
|
145
|
DCF
|
2,747
|
2,503
|
|
5,819
|
5,264
|
1
|
Changes in operating
assets and liabilities, net of recoveries.
|
2
|
Presented net of
adjusting items.
|
3
|
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.
|
4
|
Consists of cash
received, net of revenue recognized, for contracts under make-up
rights and similar deferred
revenue arrangements.
|
View original
content:https://www.prnewswire.com/news-releases/enbridge-reports-second-quarter-2022-financial-results-and-announces-3-6-billion-of-newly-secured-projects-this-quarter-301595853.html
SOURCE Enbridge Inc.