CALGARY, AB, Nov. 6, 2020 /PRNewswire/ - Enbridge Inc.
(Enbridge or the Company) (TSX: ENB) (NYSE: ENB) today reported
strong third quarter 2020 financial results and provided a
quarterly business update.
Third Quarter 2020 Highlights
(all financial figures are unaudited and in Canadian dollars
unless otherwise noted)
- GAAP earnings of $990 million or
$0.49 earnings per common share,
compared with GAAP earnings of $949
million or $0.47 per common
share in 2019
- Adjusted earnings of $961 million
or $0.48 per common share, compared
with $1,124 million or $0.56 per common share in 2019
- Adjusted earnings before interest, income tax and depreciation
and amortization (EBITDA) of $2,997
million, compared with $3,108
million in 2019
- Cash Provided by Operating Activities of $2,302 million, compared with $2,735 million in 2019
- Distributable Cash Flow (DCF) of $2,088
million, compared with $2,105
million in 2019
- Reaffirmed 2020 financial guidance range for 2020 of
$4.50 to $4.80 DCF/share; expect full year results to be
near the mid-point of the range
- Advancing Line 3: Minnesota Pollution Control Agency (MPCA)
contested case hearing concluded with a positive recommendation
from the Administrative Law Judge (ALJ) in advance of November 14th 401 Water Quality Certificate
deadline
- Commenced construction of the 500 MW Fécamp offshore wind farm
and 480 MW Saint Nazaire offshore wind farm construction remains on
track for late 2022 in-service date
- Sanctioned $0.2 billion of
utility growth capital for the London Line Replacement Project
- Completed 2020 debt funding plan and prefunded a portion of
2021 external debt requirements
- Announced emissions reduction targets, including a 35%
reduction in energy intensity by 2030 and net-zero by 2050
- Announced diversity and inclusion goals to increase
representation of diverse groups within our workforce by 2025
- Completed installation of first of its kind solar self-powered
compressor station on Texas Eastern and initiated construction on a
second facility along the Liquids Mainline System
CEO COMMENT - Al Monaco,
President and Chief Executive Officer
"We are pleased with our third quarter results, which reflected
the resilience of our business and predictability of our cash
flows," commented Al Monaco,
President and Chief Executive Officer of Enbridge. "While we are
encouraged by the economic activity and recovery in energy demand,
we are assuming a gradual pace of recovery over the balance of 2020
and into 2021. Importantly, the early and decisive actions we took
to protect the health of our people and mitigate both the
operational and financial impacts to our businesses have positioned
us for the future.
"Each of our core businesses performed well in the third
quarter. Utilization levels in our Gas Transmission, Gas
Distribution and Storage and Renewable Power businesses all
remained strong and their robust commercial underpinnings continue
to deliver reliable cash flows which reflect the low risk
pipeline-utility business we've been talking about.
"In Liquids, Mainline heavy capacity is now fully utilized and
full year volumes are tracking to the guidance range that we
provided in May for the remainder of 2020, and we're on track to
deliver $300 million of cost
reductions in 2020. Our strong performance over the first nine
months gives us confidence that we'll be near the mid-point of the
DCF per share guidance range of $4.50
to $4.80.
"We've continued to make excellent progress on our strategic
priorities. In Gas Transmission, the vast majority of work has been
completed on Texas Eastern to ensure safe and reliable natural gas
delivery and the system has returned to its normal operating
capacity for eastbound service in time for the winter heating
season. Construction on the T-South Expansion, Spruce Ridge and our
modernization program continue to progress well.
"In Liquids, the Line 3 permitting process moved forward with
the MPCA's contested case hearing process culminating in a
favourable recommendation from the ALJ that dismissed all of the
five issues considered. The next step will be for the MPCA
Commissioner to issue the 401 Water Quality Certificate, which we
anticipate by November 14th, and will
support the finalization of the remaining Federal permit.
"In our renewables business, we made good construction progress
on our two newest offshore wind projects in France: Saint
Nazaire, a 480 MW project, is advancing well, on schedule
and we've now begun construction on the 500 MW Fécamp project. In
addition, we expect FID on a third project in 2021. These projects
will further expand our European offshore wind business and
generate high quality cash flows with solid returns.
"Elsewhere on our renewables strategy, we've just put into
service our first solar self-powered compressor station on Texas
Eastern and initiated work on a facility in Alberta along the Liquids Mainline,
collectively delivering low-cost renewable power to our operations.
These will be the first of many self-power projects we are moving
forward on in the months and years to come to ensure we minimize
our environmental footprint.
"I am pleased to announce that Enbridge is committing to further
reduce our own emissions, and to improve our diversity and
inclusion, along with strategies to achieve those targets. These
targets represent a natural evolution of our approach and once
again demonstrate our commitment to industry leadership. Enbridge
has long been a leader in the areas of environmental, social and
governance (ESG) matters and our practices have been fully
integrated within our business operations and our existing
strategies to grow the business.
"Enbridge is very well-positioned for a transitioning energy mix
towards lower carbon fuels over time. Our diversified asset base is
purposefully aligned with the global energy mix and our outlook on
the fundamentals. Our long-lived pipeline and distribution assets
are absolutely essential to the global economy and strategically
connected to the largest demand centers and export markets, which
pull volumes through our systems. And, each business is underpinned
by low risk commercial models that assure the durability of our
cash flows over the long term.
"In the near term, completion of our secured capital program,
and embedded growth within each business, is expected to generate
5% to 7% DCF per share through 2022, and support growing free cash
flow, net of capital and dividend requirements. In the near-term,
our capital allocation priorities remain centered on executing our
secured growth and preserving balance sheet strength and
flexibility. Upon completion of our secured growth, we
will maintain our prudent approach to low risk, low capital
intensity utility-like growth and disciplined capital allocation
including return of capital to shareholders.
"We look forward to sharing our outlook on energy fundamentals
and our approach to the business going forward at our virtual
Investor Day scheduled for December 8,
2020," concluded Mr. Monaco.
FINANCIAL RESULTS REVIEW AND 2020 FINANCIAL OUTLOOK
Financial results for three and nine months ended September 30, 2020, are summarized in the table
below:
|
|
|
|
|
Three months
ended
September 30,
|
|
Nine months ended
September 30,
|
|
2020
|
2019
|
|
2020
|
2019
|
(unaudited,
millions of Canadian dollars, except per share amounts;
number of shares in millions)
|
|
|
|
|
|
GAAP Earnings
attributable to common shareholders
|
990
|
949
|
|
1,208
|
4,576
|
GAAP Earnings per
common share
|
0.49
|
0.47
|
|
0.60
|
2.27
|
Cash provided by
operating activities
|
2,302
|
2,735
|
|
7,527
|
7,405
|
Adjusted
EBITDA1
|
2,997
|
3,108
|
|
10,072
|
10,085
|
Adjusted
Earnings1
|
961
|
1,124
|
|
3,762
|
4,113
|
Adjusted Earnings per
common share1
|
0.48
|
0.56
|
|
1.86
|
2.04
|
Distributable Cash
Flow1
|
2,088
|
2,105
|
|
7,231
|
7,173
|
Weighted average
common shares outstanding
|
2,021
|
2,018
|
|
2,020
|
2,017
|
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 third
quarter of 2020 increased by $41
million or $0.02 per share
compared with the same period in 2019. The period-over-period
comparability of earnings attributable to common shareholders was
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.
Adjusted EBITDA in the third quarter of 2020 decreased by
$111 million compared with the same
period in 2019. The business benefited from incremental earnings
from a positive rate settlement on Texas Eastern, contributions
from new assets that were placed into service in late 2019 and the
first half of 2020 and customer growth and synergy realizations in
Gas Distribution and Storage. The strong core business performance
was more than offset by lower contributions from Energy Services
due to a significant compression of certain key regional, lower
Mainline throughput related to COVID-19, and the absence of
contributions from the federally regulated Canadian natural gas
gathering and processing business sold on December 31, 2019.
Adjusted earnings in the third quarter of 2020 decreased by
$163 million and on a per share basis
by $0.08. The decrease was primarily
driven by lower Adjusted EBITDA as well as a reduction in
capitalized interest and higher depreciation from new assets placed
into service throughout 2019, primarily on the Canadian Line 3
replacement program.
DCF for the third quarter was $2,088
million, a decrease of $17
million over the third quarter of 2019 driven largely by the
net impact of the operating factors noted above, partially offset
by lower maintenance capital due to timing of spend in light of
COVID-19 and higher cash receipts not recognized in EBITDA for
contracts with make-up rights on certain assets within Liquids
Pipelines. These factors are discussed in detail under
Distributable Cashflow.
Detailed segmented financial information and analysis for the
third quarter of 2020 can be found below under Adjusted EBITDA
by Segments.
OUTLOOK AND FINANCIAL POSITION UPDATE
The Company expects to generate DCF per share near the mid-point
of its original guidance range of $4.50 to $4.80.
This outlook reflects our strong performance over the first nine
months of 2020, the $300 million of
enabled full year costs savings, as well as certain offsetting
headwinds anticipated within the fourth quarter.
Mainline volumes are recovering in line with the outlook issued
in May and are projected to be 100-300kbpd lower than the Company's
pre-COVID19 expectations for the fourth quarter. In addition, lower
margins in Energy Services, lower equity distributions from DCP
related to its previously executed distribution cut and higher
integrity costs in Gas Transmission are expected to negatively
impact fourth quarter results relative to full year guidance.
The Company continues to secure debt financings at attractive
rates and proceeds from these offerings were used primarily to
reduce existing indebtedness and partially fund capital projects.
During the third quarter the Company completed the previously
announced US$1.0 billion 60-year
hybrid subordinated notes offering in the
United States debt capital markets. These hybrid notes
qualify for 50% equity treatment from most rating agencies, which
further reinforces the Company's financial strength.
Subsequent to the third quarter, Texas Eastern Transmission, LP,
a wholly owned subsidiary of the Company, issued US$300 million of 20-year tranche Senior Notes by
private placement. Proceeds were used to redeem US$300 million senior notes due December 2020.
The Company has completed its 2020 debt funding plan and
prefunded a portion of its 2021 external debt requirements. In
addition, the Company ended the third quarter with over
$14 billion of available liquidity,
which is sufficient capacity to meet all of its funding
requirements through the end of 2021 without further access to
capital markets. Debt to EBITDA is expected to remain well within
the target range of 4.5x to 5.0x for the full year.
PROJECT EXECUTION UPDATE
The Company continues to advance the development of its
approximately $11 billion inventory
of secured growth projects with approximately $5 billion of growth capital remaining to be
spent through 2022, net of anticipated project level financing
provided by third parties.
In addition, the Company announced today $0.2 billion of utility growth capital for the
London Line Replacement Project. This project will replace two
parallel pipelines connecting the Dawn Hub to residential and
commercial markets in southern Ontario that have reached the end of their
useful lives.
Line 3 Replacement
The $9 billion Line 3 Replacement
Project is a critical integrity project that will enhance the
continued safe and reliable operations of our Mainline System well
into the future reflecting Enbridge's commitment to protecting the
environment.
In the third quarter, the Minnesota Public Utilities Commission
(MPUC) issued its final order to approve the final environmental
impact statement (FEIS) and reinstate the Certificate of Need and
Route Permit and subsequently denied all related petitions for
reconsideration. This action substantially completes the regulatory
review process.
State and federal agencies continue to advance the necessary
environmental permits in parallel. The MPCA contested case hearing
process related to the State's 401 Water Quality Certificate has
been completed. On October 16, 2020,
Enbridge received a favourable recommendation from the ALJ on all
five of the issues considered, which further supports the extensive
regulatory record and the critical nature of this integrity
project. This recommendation will inform the MPCA Commissioner's
decision on the 401 Water Quality Certificate, which the Company
anticipates by the statutory deadline of November 14, 2020.
During the third quarter, the necessary construction stormwater
permit was issued by the MPCA and subsequent to the third quarter,
Enbridge received two of its required permits from the Minnesota
Department of Natural Resources (DNR). The remaining U.S. Army
Corps of Engineers (USACE) and DNR permitting processes are ongoing
and continue to progress in parallel.
Once Enbridge receives all necessary permits and the
Authorization to Construct from the MPUC, the Company expects
Minnesota construction to take 6
to 9 months.
Line 5 and the Great Lakes Tunnel Project
Both the east and west leg of Line 5 crossing the Straits of
Mackinac (the Straits) have been placed back into service, and are
fully operational, after in-line inspections of both lines crossing
the Straits confirmed the safety of the lines and fitness for
operation. The inspections concluded that there had been no damage
to the pipeline itself following the disturbance of an anchor
support identified by the Company earlier this year in July.
As part of Enbridge's agreement with the State of Michigan, the Company plans to
replace the existing Line 5 dual pipelines at the Straits with a
single pipeline encapsulated inside a state-of-the-art tunnel under
the Straits. The Great Lake Tunnel Project will make a safe
pipeline even safer and further demonstrates Enbridge's ongoing
commitment to protect Michigan and
the Great Lakes' natural resource, while providing a reliable
source of energy to the people of Michigan.
The Company has completed an extensive geotechnical assessment
and retained a world-class engineering team to design the tunnel.
Enbridge has filed for all major regulatory and environmental
permits necessary to construct the tunnel and the review processes
for each of these continue to advance on schedule.
OTHER BUSINESS UPDATES
Gas Transmission and Midstream Pressure Restrictions
The Company has lifted pressure restrictions on the Texas
Eastern system related to eastbound service in time for the winter
heating season after executing planned integrity work. Enbridge
continues to prioritize the execution of its comprehensive Gas
Transmission integrity program, which will ensure the continued
safe and reliable operation of its pipeline network, and plans to
have southbound service returned to operation within the next
month.
Gas Transmission and Midstream Rate Cases
The Company finalized three rate proceedings in the first half
of the year on the Texas Eastern, Algonquin and B.C. Pipeline
systems, resulting in good outcomes for both Enbridge and shippers,
further advancing the Company's strategy to ensure fair and timely
cost recovery.
Three additional rate proceedings on East Tennessee, Alliance and the Maritimes
& Northeast US systems were filed in the second quarter and are
progressing on schedule.
Mainline Contracting
The Company continues to advance its application to contract the
Mainline, which is currently being reviewed by the Canada Energy
Regulator (CER). The contract offering reflects two years of
negotiations with shippers and has the support of shippers
transporting 75%+ of mainline volumes. This support reflects the
competitiveness of the offering, which will support the best
netbacks for shippers and secure long-term demand for Western
Canadian crude oil.
In May, the CER issued a hearing order outlining the timelines
for the regulatory review process which includes multiple rounds of
intervenor and CER information requests, written evidence and
Enbridge's replies, concluding in April
2021. The Company expects an oral hearing to occur sometime
after April 2021, but a hearing date
has not yet been set. If a replacement agreement is not in place by
June 30, 2021, the CTS tolls will
continue on an interim basis.
During the third quarter, Enbridge responded to information
requests from the CER and intervenors. The evidence further
supports our view that the proposed tolls meet the regulators fair
return standards and that the contract offering will serve the
public interest.
THIRD QUARTER 2020 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
third quarter of 2020.
GAAP SEGMENT EBITDA AND CASH FLOW FROM OPERATIONS
|
Three months
ended
September 30,
|
Nine months ended
September 30,
|
|
2020
|
2019
|
2020
|
2019
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
Liquids
Pipelines
|
2,090
|
1,646
|
5,280
|
5,710
|
Gas Transmission and
Midstream
|
334
|
772
|
230
|
2,733
|
Gas Distribution and
Storage
|
298
|
252
|
1,285
|
1,304
|
Renewable Power
Generation
|
93
|
82
|
376
|
300
|
Energy
Services
|
(34)
|
91
|
(12)
|
318
|
Eliminations and
Other
|
207
|
(40)
|
(498)
|
315
|
EBITDA
|
2,988
|
2,803
|
6,661
|
10,680
|
|
|
|
|
|
Earnings
attributable to common shareholders
|
990
|
949
|
1,208
|
4,576
|
|
|
|
|
|
Cash provided by
operating activities
|
2,302
|
2,735
|
7,527
|
7,405
|
For purposes of evaluating performance, the Company makes
adjustments for unusual, infrequent or other 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 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.
DISTRIBUTABLE CASH FLOW
|
Three months
ended
September 30,
|
Nine months ended
September 30,
|
|
2020
|
2019
|
2020
|
2019
|
(unaudited,
millions of Canadian dollars, except per share
amounts)
|
|
|
|
|
Liquids
Pipelines
|
1,732
|
1,826
|
5,395
|
5,321
|
Gas Transmission and
Midstream
|
945
|
944
|
3,017
|
2,920
|
Gas Distribution and
Storage
|
315
|
255
|
1,330
|
1,338
|
Renewable Power
Generation
|
93
|
82
|
361
|
305
|
Energy
Services
|
(110)
|
27
|
(37)
|
291
|
Eliminations and
Other
|
22
|
(26)
|
6
|
(90)
|
Adjusted
EBITDA1,3
|
2,997
|
3,108
|
10,072
|
10,085
|
Maintenance
capital
|
(256)
|
(293)
|
(595)
|
(741)
|
Interest
expense1
|
(721)
|
(666)
|
(2,141)
|
(2,012)
|
Current income
tax1
|
(83)
|
(94)
|
(325)
|
(305)
|
Distributions to
noncontrolling interests1
|
(68)
|
(50)
|
(232)
|
(150)
|
Cash distributions in
excess of equity earnings1
|
197
|
144
|
479
|
427
|
Preference share
dividends
|
(94)
|
(96)
|
(284)
|
(287)
|
Other receipts of
cash not recognized in revenue2
|
118
|
53
|
250
|
139
|
Other non-cash
adjustments
|
(2)
|
(1)
|
7
|
17
|
DCF3
|
2,088
|
2,105
|
7,231
|
7,173
|
Weighted average
common shares outstanding
|
2,021
|
2,018
|
2,020
|
2,017
|
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.
|
Third quarter 2020 DCF decreased $17
million compared with the same period of 2019 primarily due
to:
- additional EBITDA contributions due to strong utilization in
our Gas Transmission and Gas Distribution businesses, incremental
earnings from positive rate settlements on Texas Eastern, lower
operating and administrative costs as a result of cost containment
actions and contributions from new assets that were placed into
service in the fourth quarter of 2019 and the first half of
2020;
- more than offset by a decrease in adjusted EBITDA due to lower
Mainline throughput related to COVID-19, the absence of
contributions from the federally regulated Canadian natural gas
gathering and processing businesses sold on December 31, 2019, and lower contributions from
Energy Services;
- lower maintenance capital due to timing of spend in light of
COVID-19 mobility restrictions;
- higher interest expense due to a combination of additional debt
incurred to fund capital expenditures as well as a reduction in
capitalized interest associated with the Canadian portion of Line 3
placed into service in December 2019,
which has been partially offset by lower rates on short-term and
newly issued long-term notes;
- higher cash distributions in excess of equity earnings due new
assets placed into service, including Gray
Oak crude oil pipeline and Hohe See Offshore Wind Project;
partially offset by a 50% distribution cut at DCP Midstream, LP
(DCP Midstream); and
- higher receipts of cash not recognized in revenue due to
approximately $120 million of cash
received on certain take-or-pay contracted assets that contain
make-up right provisions for contracted volumes not shipped which
are not included in Adjusted EBITDA due to revenue recognition
guidance but are included in DCF.
For further detail on business performance refer
to Adjusted EBITDA by Segments.
ADJUSTED
EARNINGS
|
Three months
ended
September 30,
|
Nine months ended
September 30,
|
|
2020
|
2019
|
2020
|
2019
|
(unaudited,
millions of Canadian dollars, except per share
amounts)
|
|
|
|
|
Adjusted
EBITDA1
|
2,997
|
3,108
|
10,072
|
10,085
|
Depreciation and
amortization
|
(935)
|
(844)
|
(2,766)
|
(2,526)
|
Interest
expense2
|
(708)
|
(651)
|
(2,099)
|
(1,962)
|
Income
taxes2
|
(278)
|
(377)
|
(1,133)
|
(1,144)
|
Noncontrolling
interests2
|
(21)
|
(16)
|
(28)
|
(53)
|
Preference share
dividends
|
(94)
|
(96)
|
(284)
|
(287)
|
Adjusted
earnings1
|
961
|
1,124
|
3,762
|
4,113
|
Adjusted earnings
per common share
|
0.48
|
0.56
|
1.86
|
2.04
|
1
|
Schedules
reconciling adjusted EBITDA and adjusted earnings are available as
Appendices to this news release.
|
2
|
Presented net of
adjusting items.
|
Adjusted earnings decreased $163
million and adjusted earnings per share decreased
$0.08 compared with the third quarter
in 2019. The decrease in adjusted EBITDA was driven by the same
factors impacting business performance and adjusted EBITDA as
discussed under Distributable Cash Flow above, as well as
the following factors:
- higher depreciation and amortization expense as a result of new
assets placed into service throughout 2019, primarily on the
Canadian portion of Line 3 which entered service in December 2019; and
- higher interest expense due to debt issued to fund new growth
capital as well as a reduction in capitalized interest associated
with the Canadian portion of Line 3 which has been partially offset
by lower rates on short-term debt and newly issued long-term
notes;
- offset by lower income taxes primarily due to lower
earnings.
ADJUSTED EBITDA BY SEGMENTS
Adjusted EBITDA by segment is reported on a Canadian dollar
basis. Adjusted EBITDA generated from U.S. dollar
denominated businesses was translated at a higher average Canadian
dollar exchange rate in the third quarter of 2020 (C$1.33/US$) when compared with the corresponding
2019 period (C$1.32/US$).
A portion of the 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
September 30,
|
Nine months ended
September 30,
|
|
2020
|
2019
|
2020
|
2019
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
Mainline
System
|
994
|
1,026
|
3,070
|
2,940
|
Regional Oil Sands
System
|
195
|
218
|
605
|
648
|
Gulf Coast and
Mid-Continent System
|
213
|
227
|
714
|
708
|
Other1
|
330
|
355
|
1,006
|
1,025
|
Adjusted
EBITDA2
|
1,732
|
1,826
|
5,395
|
5,321
|
|
|
|
|
|
Operating Data
(average deliveries – thousands of bpd)
|
|
|
|
|
Mainline System -
ex-Gretna volume3
|
2,555
|
2,714
|
2,612
|
2,698
|
Regional Oil Sands
System4
|
1,399
|
1,839
|
1,549
|
1,803
|
International Joint
Tariff (IJT)5
|
$4.27
|
$4.21
|
$4.23
|
$4.17
|
1
|
Included within
Other are Southern Lights Pipeline, Express-Platte System, Bakken
System and Feeder Pipelines & Other.
|
2
|
Schedules
reconciling adjusted EBITDA are provided in the Appendices to this
news release.
|
3
|
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.
|
4
|
Volumes are for
the Athabasca mainline, Athabasca Twin, Waupisoo Pipeline and
Woodland Pipeline and exclude laterals on the Regional Oil Sands
System.
|
5
|
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 third quarter of 2020 was C$1.20/US$ (Q3 2019:
C$1.19/US$).
|
|
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. The offsetting hedge settlements
are reported within Eliminations and Other.
|
Liquids Pipelines adjusted EBITDA decreased $94 million compared to the third quarter of 2019
primarily due to:
- lower Mainline System throughput, with ex-Gretna throughput on average 159 kbpd lower
driven by the impact of COVID-19 on supply and demand for oil and
related products, partially offset by a higher IJT Benchmark Toll
and contributions from the Canadian Line 3 Replacement Program that
was placed into service on December 1,
2019 with an interim surcharge on Mainline System volumes of
US$0.20 per barrel;
- slightly lower Regional Oil Sands contributions despite the
larger decrease in delivered volumes which reflects the fixed fee
obligations of shippers under the take-or-pay arrangements which
underpin the majority of these assets;
- higher contributions from the Gulf Coast and Mid-Continent
System on higher Flanagan South Pipeline throughput and the
collection of revenue on volumes nominated but not shipped, offset
by lower light volume throughput on the Seaway Crude Pipeline
driven by the impact of COVID-19 on the Gulf Coast demand; and
- lower throughput on the Bakken Pipeline System, included in
Other, driven by the impact of lower prices and COVID-19 on supply
and demand for oil and products.
GAS TRANSMISSION AND MIDSTREAM
|
Three months
ended
September 30,
|
Nine months ended
September 30,
|
|
2020
|
2019
|
2020
|
2019
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
US Gas
Transmission1
|
762
|
716
|
2,417
|
2,133
|
Canadian Gas
Transmission1
|
111
|
136
|
354
|
488
|
US
Midstream
|
36
|
43
|
116
|
146
|
Other
|
36
|
49
|
130
|
153
|
Adjusted
EBITDA2
|
945
|
944
|
3,017
|
2,920
|
1
|
US Gas
Transmission includes the Canadian portion of the Maritimes &
Northeast Pipeline which was previously included in Canadian Gas
Transmission. The comparable 2019 adjusted EBITDA has been restated
to reflect this change.
|
2
|
Schedules
reconciling adjusted EBITDA are available as Appendices to this
news release.
|
Gas Transmission and Midstream adjusted EBITDA increased
$1 million compared to the third
quarter of 2019 primarily due to:
- higher revenues in US Gas Transmission due to the recent rate
settlement on Texas Eastern and Algonquin, and higher contributions
from the second phase of the Atlantic Bridge project which was put
into service fourth quarter of 2019, offset by lower revenues on
Texas Eastern due to pressure restrictions; and
- the absence of earnings in Canadian Gas Transmission in 2020
from the federally-regulated portion of the Canadian natural gas
gathering and processing assets that were sold on December 31, 2019, as well as lower commodity
prices impacting Aux Sable.
GAS DISTRIBUTION AND STORAGE
|
Three months
ended
September 30,
|
Nine months ended
September 30,
|
|
2020
|
2019
|
2020
|
2019
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
Enbridge Gas Inc.
(EGI)
|
327
|
255
|
1,286
|
1,270
|
Other
|
(12)
|
—
|
44
|
68
|
Adjusted
EBITDA1
|
315
|
255
|
1,330
|
1,338
|
|
|
|
|
|
Operating
Data
|
|
|
|
|
EGI
|
|
|
|
|
Volumes (billions of
cubic feet)
|
297
|
269
|
1,286
|
1,328
|
Number of active
customers (thousands)2
|
|
|
3,760
|
3,731
|
Heating degree
days3
|
|
|
|
|
Actual
|
90
|
60
|
2,423
|
2,699
|
Forecast based on
normal weather4
|
94
|
97
|
2,533
|
2,535
|
1
|
Schedules
reconciling adjusted EBITDA are available as Appendices to this
news release.
|
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 and Storage adjusted EBITDA increased
$60 million compared to the third
quarter of 2019 primarily due to:
- higher distribution charges resulting from increases in rates
and customer base growth; and
- synergy captures realized from the amalgamation of Enbridge Gas
Distribution Inc. and Union Gas Limited;
- partially offset by the absence of earnings in 2020 from
Enbridge Gas New Brunswick and St. Lawrence Gas Company, Inc. which
were sold on October 1, 2019, and
November 1, 2019, respectively.
RENEWABLE POWER GENERATION
|
Three months
ended
September 30,
|
Nine months ended
September 30,
|
|
2020
|
2019
|
2020
|
2019
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
Adjusted
EBITDA1
|
93
|
82
|
361
|
305
|
1 Schedules
reconciling adjusted EBITDA are available as Appendices to this
news release.
|
Renewable Power Generation adjusted EBITDA increased
$11 million compared to the third
quarter of 2019 primarily due to:
- contributions from the Hohe See Offshore Wind Project, which
reached full operating capacity in October
2019, and the Albatros expansion, which was placed into
service in January 2020;
- partially offset by higher mechanical repair costs at certain
United States wind farms.
ENERGY SERVICES
|
Three months
ended
September 30,
|
Nine months ended
September 30,
|
|
2020
|
2019
|
2020
|
2019
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
Adjusted
EBITDA1
|
(110)
|
27
|
(37)
|
291
|
1 Schedules
reconciling adjusted EBITDA are available as Appendices to this
news release.
|
Energy Services adjusted EBITDA decreased $137 million compared to the third quarter of
2019 as a result of significant compression of location and quality
differentials in certain markets which led to fewer opportunities
to achieve profitable margins on capacity obligations.
ELIMINATIONS AND OTHER
|
Three months
ended
September 30,
|
Nine months ended
September 30,
|
|
2020
|
2019
|
2020
|
2019
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
Operating and
administrative recoveries
|
58
|
24
|
166
|
76
|
Realized foreign
exchange hedge settlements
|
(36)
|
(50)
|
(160)
|
(166)
|
Adjusted
EBITDA1
|
22
|
(26)
|
6
|
(90)
|
1 Schedules
reconciling adjusted EBITDA are available as Appendices to this
news release.
|
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. 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 are
captured in this segment.
Eliminations and Other adjusted EBITDA increased $48 million compared to the third quarter of 2019
due to:
- lower operating and administrative costs as a result of cost
containment actions and timing related to the recovery of certain
operating and administrative costs allocated to the business
segments; and
- lower realized foreign exchange settlement losses primarily due
to a narrower spread between the average exchange rate of
$1.33 for the third quarter of 2020
(Q3 2019:$1.32) and the third quarter
2020 hedge rate of $1.29 (Q3
2019:$1.24).
CONFERENCE CALL
Enbridge will host a conference call and webcast on
November 6, 2020 at 9:00 a.m. Eastern Time (7:00
a.m. Mountain Time) to provide an enterprise wide business
update and review 2020 third 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 9737258#. The call will be audio webcast live at
https://edge.media-server.com/mmc/p/youisrgo. It is recommended
that participants dial in or join the audio webcast fifteen minutes
prior to the scheduled start time. 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
9737258#).
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 November 3, 2020, the Company's
Board of Directors declared the following quarterly dividends. All
dividends are payable on December 1,
2020, to shareholders of record on November 13, 2020.
|
|
Dividend per
share
|
Common
Shares1
|
|
$0.81000
|
Preference Shares,
Series A
|
|
$0.34375
|
Preference Shares,
Series B
|
|
$0.21340
|
Preference Shares,
Series C2
|
|
$0.15975
|
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 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 113
|
|
$0.24613
|
Preference Shares,
Series 134
|
|
$0.19019
|
Preference Shares,
Series 155
|
|
$0.18644
|
Preference Shares,
Series 17
|
|
$0.32188
|
Preference Shares,
Series 19
|
|
$0.30625
|
1
|
The quarterly
dividend per common share was increased 9.8% to $0.81 from $0.738,
effective March 1, 2020.
|
2
|
The quarterly
dividend per share paid on Series C was increased to $0.25458 from
$0.25305 on March 1, 2020, was decreased to $0.16779 from $0.25458
on June 1, 2020 and was decreased to $0.15975 from $0.16779 on
September 1, 2020, due to reset on a quarterly basis following the
date of issuance of the Series C Preference
Shares.
|
3
|
The quarterly
dividend per share paid on Series 11 was decreased to $0.24613 from
$0.275 on March 1, 2020, due to the reset of the annual dividend on
March 1, 2020, and every five years thereafter.
|
4
|
The quarterly
dividend per share paid on Series 13 was decreased to $0.19019 from
$0.275 on June 1, 2020, due to the reset of the annual dividend on
June 1, 2020, and every five years thereafter.
|
5
|
The quarterly
dividend per share paid on Series 15 was decreased to $0.18644 from
$0.275 on September 1, 2020, due to the reset of the annual
dividend on September 1, 2020, and every five years
thereafter.
|
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 corporate vision and strategy, including
strategic priorities and enablers; 2020 financial guidance; the
COVID-19 pandemic and the duration and impact thereof; anticipated
reductions in operating costs and deferrals of secured growth
capital spend; emissions reduction targets; diversity and inclusion
goals; the expected supply of, demand for and prices of crude oil,
natural gas, natural gas liquids, liquified natural gas and
renewable energy; anticipated utilization of our existing assets,
including throughput on the Mainline; expected EBITDA and expected
adjusted EBITDA; expected earnings/(loss) and adjusted
earnings/(loss); expected earnings/(loss) and adjusted
earnings/(loss) per share; expected DCF and DCF per share; expected
future cash flows; expected performance of the Company's
businesses; expected debt-to-EBITDA ratio; financial strength and
flexibility; expectations on sources of liquidity and sufficiency
of financial resources; expected costs related to announced
projects and projects under construction and for maintenance;
expected in-service dates for announced projects and projects under
construction; expected capital expenditures and capital allocation
priorities; expected future growth and expansion opportunities,
including self-power projects; expectations about the Company's
joint ventures and our partners' ability to complete and finance
announced projects and projects under construction; expected
closing of acquisitions and dispositions and the timing thereof;
expected benefits of transactions, including the realization of
efficiencies and synergies; expected future actions of regulators
and courts; toll and rate case discussions and filings, including
Mainline Contracting and the anticipated benefits thereof; Line 3
Replacement Program; Line 5 dual pipelines, Great Lakes Tunnel
Project and related matters; Line 10 of the Texas Eastern system;
interest rates; and exchange rates.
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 COVID-19 pandemic and
the duration and impact thereof; anticipated reductions in
operating costs and deferrals of secured growth; 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, including the current weakness and
volatility of such prices; anticipated utilization of our existing
assets; 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; impact of the Company's dividend policy on its future
cash flows; credit ratings; capital project funding; 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; 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, 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 and 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 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.; Gas Distribution and Storage,
which serves approximately 3.8 million retail customers in
Ontario and Quebec; and Renewable Power Generation, which
generates approximately 1,750 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
|
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,
infrequent or other 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, 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.
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
September 30,
|
Nine months ended
September 30,
|
|
2020
|
2019
|
2020
|
2019
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
Liquids
Pipelines
|
2,090
|
1,646
|
5,280
|
5,710
|
Gas Transmission and
Midstream
|
334
|
772
|
230
|
2,733
|
Gas Distribution and
Storage
|
298
|
252
|
1,285
|
1,304
|
Renewable Power
Generation
|
93
|
82
|
376
|
300
|
Energy
Services
|
(34)
|
91
|
(12)
|
318
|
Eliminations and
Other
|
207
|
(40)
|
(498)
|
315
|
EBITDA
|
2,988
|
2,803
|
6,661
|
10,680
|
Depreciation and
amortization
|
(935)
|
(844)
|
(2,766)
|
(2,526)
|
Interest
expense
|
(718)
|
(644)
|
(2,105)
|
(1,966)
|
Income tax
expense
|
(231)
|
(255)
|
(273)
|
(1,275)
|
Earnings attributable
to noncontrolling interests
|
(20)
|
(15)
|
(25)
|
(50)
|
Preference share
dividends
|
(94)
|
(96)
|
(284)
|
(287)
|
Earnings
attributable to common shareholders
|
990
|
949
|
1,208
|
4,576
|
ADJUSTED EBITDA TO ADJUSTED EARNINGS
|
Three months
ended
September 30,
|
Nine months ended
September 30,
|
|
2020
|
2019
|
2020
|
2019
|
(unaudited,
millions of Canadian dollars, except per share
amounts)
|
|
|
|
|
Liquids
Pipelines
|
1,732
|
1,826
|
5,395
|
5,321
|
Gas Transmission and
Midstream
|
945
|
944
|
3,017
|
2,920
|
Gas Distribution and
Storage
|
315
|
255
|
1,330
|
1,338
|
Renewable Power
Generation
|
93
|
82
|
361
|
305
|
Energy
Services
|
(110)
|
27
|
(37)
|
291
|
Eliminations and
Other
|
22
|
(26)
|
6
|
(90)
|
Adjusted
EBITDA
|
2,997
|
3,108
|
10,072
|
10,085
|
Depreciation and
amortization
|
(935)
|
(844)
|
(2,766)
|
(2,526)
|
Interest
expense
|
(708)
|
(651)
|
(2,099)
|
(1,962)
|
Income tax
expense
|
(278)
|
(377)
|
(1,133)
|
(1,144)
|
Earnings attributable
to noncontrolling interests
|
(21)
|
(16)
|
(28)
|
(53)
|
Preference share
dividends
|
(94)
|
(96)
|
(284)
|
(287)
|
Adjusted
earnings
|
961
|
1,124
|
3,762
|
4,113
|
Adjusted earnings
per common share
|
0.48
|
0.56
|
1.86
|
2.04
|
EBITDA TO ADJUSTED EARNINGS
|
Three months
ended
September 30,
|
Nine months ended
September 30,
|
|
2020
|
2019
|
2020
|
2019
|
(unaudited,
millions of Canadian dollars, except per share
amounts)
|
|
|
|
|
EBITDA
|
2,988
|
2,803
|
6,661
|
10,680
|
Adjusting
items:
|
|
|
|
|
Change in unrealized
derivative fair value (gain)/loss - Foreign exchange
|
(569)
|
170
|
201
|
(854)
|
Change in unrealized
derivative fair value (gain)/loss - Commodity prices
|
(73)
|
(66)
|
(24)
|
56
|
Asset write-down loss
- US Gas Transmission
|
—
|
105
|
—
|
105
|
Equity investment
impairment
|
615
|
—
|
2,351
|
—
|
Equity investment
asset and goodwill impairment - DCP Midstream
|
—
|
62
|
324
|
62
|
Net inventory
adjustment - Energy Services
|
(3)
|
2
|
(1)
|
(83)
|
Texas Eastern
re-establishment of EDIT regulated liability
|
—
|
—
|
159
|
—
|
Employee severance,
transition and transformation costs
|
39
|
23
|
318
|
88
|
Other
|
—
|
9
|
83
|
31
|
Total adjusting
items
|
9
|
305
|
3,411
|
(595)
|
Adjusted
EBITDA
|
2,997
|
3,108
|
10,072
|
10,085
|
Depreciation and
amortization
|
(935)
|
(844)
|
(2,766)
|
(2,526)
|
Interest
expense
|
(718)
|
(644)
|
(2,105)
|
(1,966)
|
Income tax
expense
|
(231)
|
(255)
|
(273)
|
(1,275)
|
Earnings attributable
to noncontrolling interests
|
(20)
|
(15)
|
(25)
|
(50)
|
Preference share
dividends
|
(94)
|
(96)
|
(284)
|
(287)
|
Adjusting items in
respect of:
|
|
|
|
|
Interest
expense
|
10
|
(7)
|
6
|
4
|
Income tax
expense
|
(47)
|
(122)
|
(860)
|
131
|
Earnings attributable
to noncontrolling interests
|
(1)
|
(1)
|
(3)
|
(3)
|
Adjusted
earnings
|
961
|
1,124
|
3,762
|
4,113
|
Adjusted earnings
per common share
|
0.48
|
0.56
|
1.86
|
2.04
|
APPENDIX B
NON-GAAP RECONCILIATION – SEGMENTED EBITDA TO ADJUSTED
EBITDA
LIQUIDS PIPELINES
|
Three months
ended
September 30,
|
Nine months ended
September 30,
|
|
2020
|
2019
|
2020
|
2019
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
Adjusted
EBITDA
|
1,732
|
1,826
|
5,395
|
5,321
|
Change in unrealized
derivative fair value gain/(loss)
|
360
|
(180)
|
(90)
|
390
|
Asset write-down
loss
|
—
|
—
|
(13)
|
(1)
|
Employee severance,
transition and transformation costs
|
(2)
|
—
|
(9)
|
—
|
Other
|
—
|
—
|
(3)
|
—
|
Total
adjustments
|
358
|
(180)
|
(115)
|
389
|
EBITDA
|
2,090
|
1,646
|
5,280
|
5,710
|
GAS TRANSMISSION AND MIDSTREAM
|
Three months
ended
September 30,
|
Nine months ended
September 30,
|
|
2020
|
2019
|
2020
|
2019
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
Adjusted
EBITDA
|
945
|
944
|
3,017
|
2,920
|
Asset write-down loss
- US Gas Transmission
|
—
|
(105)
|
—
|
(105)
|
Equity investment
impairment
|
(615)
|
—
|
(2,351)
|
—
|
Equity investment
asset and goodwill impairment - DCP Midstream
|
—
|
(62)
|
(324)
|
(62)
|
Texas Eastern
re-establishment of EDIT regulated liability
|
—
|
—
|
(159)
|
—
|
Equity earnings
adjustment - DCP Midstream
|
(5)
|
(6)
|
26
|
(10)
|
Employee severance,
transition and transformation costs
|
(4)
|
—
|
(4)
|
—
|
Other
|
13
|
1
|
25
|
(10)
|
Total
adjustments
|
(611)
|
(172)
|
(2,787)
|
(187)
|
EBITDA
|
334
|
772
|
230
|
2,733
|
GAS DISTRIBUTION AND STORAGE
|
Three months
ended
September 30,
|
Nine months ended
September 30,
|
|
2020
|
2019
|
2020
|
2019
|
(unaudited;
millions of Canadian dollars)
|
|
|
|
|
Adjusted
EBITDA
|
315
|
255
|
1,330
|
1,338
|
Change in unrealized
derivative fair value gain
|
11
|
1
|
2
|
9
|
Employee severance,
transition and transformation costs
|
(28)
|
(4)
|
(43)
|
(43)
|
Other
|
—
|
—
|
(4)
|
—
|
Total
adjustments
|
(17)
|
(3)
|
(45)
|
(34)
|
EBITDA
|
298
|
252
|
1,285
|
1,304
|
RENEWABLE POWER GENERATION
|
Three months
ended
September 30,
|
Nine months ended
September 30,
|
|
2020
|
2019
|
2020
|
2019
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
Adjusted
EBITDA
|
93
|
82
|
361
|
305
|
Change in unrealized
derivative fair value gain
|
—
|
—
|
2
|
2
|
Disposition - MATL
transmission assets
|
—
|
—
|
13
|
—
|
Other
|
—
|
—
|
—
|
(7)
|
Total
adjustments
|
—
|
—
|
15
|
(5)
|
EBITDA
|
93
|
82
|
376
|
300
|
ENERGY SERVICES
|
Three months
ended
September 30,
|
Nine months ended
September 30,
|
|
2020
|
2019
|
2020
|
2019
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
Adjusted
earnings/(loss) before interest, income taxes,
and depreciation and amortization
|
(110)
|
27
|
(37)
|
291
|
Change in unrealized
derivative fair value gain/(loss)
|
73
|
66
|
24
|
(56)
|
Net inventory
adjustment
|
3
|
(2)
|
1
|
83
|
Total
adjustments
|
76
|
64
|
25
|
27
|
Earnings/(loss)
before interest, income taxes and
depreciation and amortization
|
(34)
|
91
|
(12)
|
318
|
ELIMINATIONS AND OTHER
|
Three months
ended
September 30,
|
Nine months ended
September 30,
|
|
2020
|
2019
|
2020
|
2019
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
Adjusted
earnings/(loss) before interest, income taxes,
and depreciation and amortization
|
22
|
(26)
|
6
|
(90)
|
Change in unrealized
derivative fair value gain/(loss)
|
198
|
9
|
(115)
|
453
|
Change in corporate
guarantee obligation
|
—
|
—
|
(74)
|
—
|
Investment write-down
loss
|
—
|
—
|
(43)
|
—
|
Employee severance,
transition and transformation costs
|
(5)
|
(19)
|
(262)
|
(45)
|
Other
|
(8)
|
(4)
|
(10)
|
(3)
|
Total
adjustments
|
185
|
(14)
|
(504)
|
405
|
Earnings/(loss)
before interest, income taxes and
depreciation and amortization
|
207
|
(40)
|
(498)
|
315
|
APPENDIX C
NON-GAAP RECONCILIATION – CASH PROVIDED BY OPERATING ACTIVITIES TO
DCF
|
Three months
ended
September 30,
|
Nine months ended
September 30,
|
|
2020
|
2019
|
2020
|
2019
|
(unaudited,
millions of Canadian dollars)
|
|
|
|
|
Cash provided by
operating activities
|
2,302
|
2,735
|
7,527
|
7,405
|
Adjusted for changes
in operating assets and liabilities1
|
(110)
|
(228)
|
(213)
|
451
|
|
2,192
|
2,507
|
7,314
|
7,856
|
Distributions to
noncontrolling interests4
|
(68)
|
(50)
|
(232)
|
(150)
|
Preference share
dividends
|
(94)
|
(96)
|
(284)
|
(287)
|
Maintenance capital
expenditures2
|
(256)
|
(293)
|
(595)
|
(741)
|
Significant adjusting
items:
|
|
|
|
|
Other receipts of cash
not recognized in revenue3
|
118
|
53
|
250
|
139
|
Employee severance,
transition and transformation costs
|
25
|
20
|
304
|
91
|
Distributions from
equity investments in excess of cumulative
earnings4
|
159
|
17
|
412
|
207
|
Other items
|
12
|
(53)
|
62
|
58
|
DCF
|
2,088
|
2,105
|
7,231
|
7,173
|
|
|
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-reports-strong-third-quarter-and-reaffirms-2020-financial-guidance-301167690.html
SOURCE Enbridge Inc.