CALGARY, AB, May 7, 2021 /PRNewswire/ - Enbridge Inc.
(Enbridge or the Company) (TSX: ENB) (NYSE: ENB) today reported
first quarter 2021 financial results, reaffirmed its 2021 financial
outlook, and provided a quarterly business update.
Highlights
(all financial figures are unaudited and
in Canadian dollars unless otherwise noted)
- First quarter GAAP earnings of $1.9
billion or $0.94 per common
share, compared with GAAP loss of $1.4
billion or $0.71 per common
share in 2020
- Adjusted earnings of $1.6 billion
or $0.81 per common share, compared
with $1.7 billion or $0.83 per common share in 2020
- Adjusted earnings before interest, income taxes and
depreciation and amortization (EBITDA) of $3.7 billion, compared with $3.8 billion in 2020
- Cash Provided by Operating Activities of $2.6 billion, compared with $2.8 billion in 2020
- Distributable Cash Flow (DCF) of $2.8
billion or $1.37 per common
share, compared with $2.7 billion or
$1.34 per common share in 2020
- Reaffirmed 2021 full year guidance range of EBITDA of
$13.9 billion to $14.3 billion and DCF per share of $4.70 to $5.00
- Advancing $17 billion secured
capital program with $10 billion
expected to be placed into service in 2021, supporting significant
cash flow growth in 2022
- Construction of the final leg of the U.S. Line 3 Replacement
Project is progressing on schedule towards the targeted Q4 2021
in-service date
- Reached rate settlements in principle with customers on several
Gas Transmission assets, which provide cash flow stability and an
appropriate return on our investments
- Gas Distribution capital growth program advancing; on track for
another 45 thousand customer additions this year
- Sanctioned 4 additional self-power projects for the Liquids
system and placed the 10.5 MW Alberta Solar One facility into
service, reducing pump station CO2 emissions
- Sanctioned the 448 MW Calvados offshore wind farm backed by a
20-year fixed price power purchase agreement
- Announced development of a 20 MW green hydrogen production and
blending project in Quebec through
Gazifere, in partnership with Evolugen
- Closed the previously announced sale of 49% of Enbridge's
interests in three French offshore wind projects under construction
to CPP Investments
- Completed the previously announced purchase of 6.6 million
barrels of storage assets located in Cushing, further advancing our U.S. Gulf Coast
strategy
CEO COMMENT
Commenting on the Company's results and outlook, Al Monaco, President and CEO of Enbridge noted
the following:
"We've had a strong start to the year. Each of our four blue
chip businesses were very highly utilized in the first quarter,
reflecting their resilient demand-pull franchises, top-notch
customers and the ongoing recovery of global economic activity.
"Throughout the pandemic, we've consistently provided North
Americans with safe and reliable access to affordable energy that's
absolutely critical to their daily lives. In the face of the worst
disruption to economic activity and energy markets, we delivered on
our 2020 financial targets set prior to the pandemic.
"Thanks to the hard work of our people, we delivered
operationally again in the first quarter while managing a brutal
winter storm in Texas that had
wide-ranging impacts on North American energy markets.
"Our strong operational performance combined with highly
contracted and utility cash flows translated into strong financial
results. Distributable cash flow for the quarter is up over the
first quarter of last year, which was largely unaffected by the
pandemic. That's an excellent outcome and it shows how resilient
our business is in the most turbulent economic conditions. Our
balance sheet is in great shape and provides us with a lot of
flexibility.
"We also continued to strengthen our base business and are on
track to achieve the cost efficiencies we set out in our 2021
guidance, and are confident in our ability to further enhance
returns through our leading edge technology and innovation labs in
Calgary and Houston.
"On the regulatory front, we've reached agreements in principle
on Maritimes & Northeast U.S, which was recently approved by
FERC, and Alliance U.S. and East
Tennessee, both of which are pending FERC approval. These
filings will ensure that we earn an appropriate return on our
invested capital. In Liquids, the Mainline Contracting initiative
continues to have strong customer support and we're looking forward
to the Canada Energy Regulator hearing, which is set to start this
month.
"We're also advancing the strategic priorities we set out in the
three-year plan that we discussed at Enbridge Day in December.
We're making great progress on our $17
billion secured capital program, which is expected to
generate about $2 billion of
incremental EBITDA annually, and are on track to deliver
$10 billion of that program into
service this year.
"In Liquids, construction of the final leg of the Line 3
Replacement Project in Minnesota
is about half complete and is progressing on schedule to be in
service in the fourth quarter of 2021. In Gas Transmission, we're
moving $3 billion of expansion and
modernization capital forward for in-service later this year. In
Renewables, the foundations on our Saint-Nazaire offshore wind project are being
installed and early construction is advancing on two more utility
scale French projects. Finally, our gas utility continues to grow,
and is on-track to add another 45 thousand customers this year.
"Also in Liquids, we've now finished the design and engineering
for the Line 5 Great Lakes Tunnel, and we're in the process of
selecting a contractor to build this state-of-the-art
infrastructure. This is clearly the best way to replace and
modernize the existing pipelines while maintaining absolutely
essential supply of crude oil and propane that Michigan, Ohio, Indiana, Ontario, Quebec and the surrounding region rely on.
"Completion of our three-year plan is expected to generate
$5-6 billion of annual investment
capacity, beginning in 2022, without the need for external equity.
We'll remain disciplined and deploy capital towards the most
valuable uses, prioritizing balance sheet strength, investment in
low capital intensity growth and regulated utility or utility-like
projects. Beyond that, we'll utilize our remaining investable
capacity on the best opportunities including further organic
growth, and, potentially, share repurchases.
"ESG leadership is essential to our strategy, and that's why
we've been integrating sustainability, diversity and community
engagement practices into our operations for over two decades and
continue to set new goals for ourselves. Last year we set our
net-zero emissions by 2050 target and enhanced diversity goals;
these goals are now linked to company-wide compensation and this
year we also completed our first sustainability linked
loan.
"We're very excited about our zero emissions investment
opportunities that will support our core businesses and help us
achieve our ESG goals. This quarter, we put our first solar
self-powering facility along our Liquids Mainline into service and
sanctioned a second phase comprised of four projects, which will
further support our emissions reduction goals. In addition, a
second facility on our Texas Eastern system in Gas Transmission
should start producing power in May, giving us three solar
self-power facilities in operation.
"We're also building out a portfolio of capital efficient low
carbon energy projects with commercial frameworks and returns that
fit our low risk business model. Our Markham hydrogen blending pilot is now
underway, plus we have four more renewable natural gas projects
under construction in Ontario. In
Quebec, we're now developing a new
20 MW green hydrogen facility with Evolugen and last week we
announced a new partnership with Walker Industries and Comcor
Environmental to develop renewable natural gas projects across
Canada.
"Finally, as global economic activity ramps back up, we're
seeing renewed interest in both crude and LNG exports off the U.S.
Gulf Coast. Our solid regional footprint and premier North American
integrated pipeline networks are ideally positioned to capitalize
on these opportunities and we continue to advance several export
pipeline and crude oil terminal opportunities.
"This year is setting up to be a pivotal one for Enbridge. We've
reaffirmed our EBITDA and cash flow guidance for the year, and
we're executing on our strategic priorities. This gives us great
visibility to 5-7% cash flow growth through 2023, which along with
a growing dividend, translates into a very attractive value
proposition for shareholders."
FINANCIAL RESULTS SUMMARY
Financial results for the three months ended March 31, 2021 and 2020 are summarized in the
table below:
|
|
|
Three months
ended
March 31,
|
|
2021
|
2020
|
(unaudited;
millions of Canadian dollars, except per share amounts; number of
shares in millions)
|
|
|
GAAP Earnings/(loss)
attributable to common shareholders
|
1,900
|
(1,429)
|
GAAP Earnings/(loss)
per common share
|
0.94
|
(0.71)
|
Cash provided by
operating activities
|
2,564
|
2,809
|
Adjusted
EBITDA1
|
3,743
|
3,763
|
Adjusted
Earnings1
|
1,634
|
1,668
|
Adjusted Earnings per
common share1
|
0.81
|
0.83
|
Distributable Cash
Flow1
|
2,761
|
2,706
|
Weighted average
common shares outstanding
|
2,022
|
2,019
|
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 first
quarter of 2021 increased by $3.3
billion or $1.65 per share
compared with the same period in 2020.
The period-over-period comparability of GAAP 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. The first quarter of 2021 was not impacted by
any material impairments. The impact of the mark-to-market value of
derivative financial instruments used to manage foreign exchange
risk resulted in a $0.3 billion
gain ($0.2 billion after-tax).
Conversely, GAAP earnings attributable to common shareholders for
the first quarter of 2020 were negatively impacted by $1.7 billion ($1.3
billion after-tax) of impairments to the carrying value of
Enbridge's equity investment in DCP Midstream LLC, as well as a
$2.0 billion ($1.5 billion after-tax) non-cash, unrealized
derivative fair value loss on the mark-to-market value of
derivative financial instruments used to manage foreign exchange
risks.
Adjusted EBITDA in the first quarter of 2021 decreased by
$20 million compared with the same
period in 2020 and adjusted earnings in the first quarter of 2021
decreased by $34 million, or
$0.02 per share. This is a strong
outcome for the quarter given results in the first quarter of 2020
were largely unaffected by the effects of the pandemic. Results in
the first quarter of 2021 reflect a continued improvement in crude
demand from the pandemic lows of the second quarter of 2020, but
North American crude demand has not yet fully recovered to
pre-pandemic levels.
The CAD to USD exchange rate has weakened approximately 6% in
2021 ($1.27) compared with 2020
($1.35). This negatively impacts the
translation of our USD denominated EBITDA, primarily in the Liquids
Pipelines and Gas Transmission and Midstream businesses. Enbridge's
enterprise-wide financial risk management program has largely
mitigated the impact of this foreign exchange weakening through its
U.S. dollar earnings hedges. Hedge settlement gains and losses are
reported within the Eliminations and Other segment.
DCF for the first quarter was $2.8
billion, an increase of $55
million over the first quarter of 2020, driven largely by
the net impact of the operating factors discussed below and lower
maintenance capital which is expected to be largely offset by
higher spending for the remainder of 2021.
These factors are discussed in detail under Distributable
Cash Flow. Detailed segmented financial information and
analysis can be found below under Adjusted EBITDA by
Segments.
FINANCIAL POSITION
The Company has maintained its strong financial position at the
end of the first quarter which provides financial flexibility to
execute its secured capital program. As the Company executes on its
secured capital program in 2021, it expects to remain within the
target range of 4.5x to 5.0x. The balance sheet is anticipated to
strengthen further in 2022, as projects placed into service in 2021
contribute incremental annualized EBITDA.
The Company issued a USD 500
million 2-year Secured Overnight Financing Rate (SOFR) based
floating rate note taking advantage of historically low interest
rates. This has been reported to be the first SOFR-linked floating
rate note offering by a non-financial issuer in the global fixed
income market. Proceeds of the note were used to refinance debt
that matured in the first quarter. Debt maturities of $1.4 billion over the balance of 2021 remain
manageable and provide the opportunity to refinance at favorable
interest rates.
FINANCIAL OUTLOOK
The Company continues to expect full year 2021 EBITDA and DCF
within the previously provided guidance range of $13.9 to $14.3
billion and $4.70 to
$5.00 per share, respectively. Strong
first quarter results have set Enbridge up well for 2021, and each
of the Company's four core businesses are expected to experience
robust utilization through the balance of the year, with normal
course seasonality.
Maintenance scheduled for several oil sands upgraders and
downstream refineries is now expected to be more concentrated
between April and June than previously anticipated, which should
result in Mainline volumes of approximately 2.6 mmbpd on average
for the second quarter, with higher throughput during the remainder
of the year. The Company continues to expect full year Mainline
throughput to average 2.8 million barrels per day (mmbpd) on
average for 2021 with heavy capacity remaining fully utilized and
light volumes continuing to ramp up over the second half of the
year, including the effects of additional Line 3 capacity in the
fourth quarter.
The Company's full year outlook may be impacted by a number of
additional factors. Contributions from Energy Services are expected
to continue to be negative and a weaker U.S. dollar would impact
the translation of Enbridge's U.S. dollar denominated businesses,
primarily in Liquids Pipelines and Gas Transmission and Midstream.
This foreign exchange impact is expected to be partially offset by
the impact of the Company's enterprise-wide financial risk
management program, the results of which are reported within the
Eliminations and Other segment.
PROJECT EXECUTION UPDATE
The Company's secured growth capital program is now
approximately $17 billion with the
sanctioning of the Calvados offshore wind project in the first
quarter. The capital program is well-diversified across Enbridge's
four growth platforms and all projects are contractually
underpinned by business models that are consistent with Enbridge's
low-risk pipeline-utility model.
In 2021, approximately $10 billion
of capital is expected to be placed into service, and is expected
to generate significant EBITDA growth and free cash flow growth in
2022. These projects include:
- Liquids Pipelines' U.S. Line 3 Replacement Project and Southern
Access Expansion;
- Gas Transmission's T-South and Spruce Ridge expansions of the
B.C. Pipeline, and its 2021 Modernization Program;
- customer connections and reinforcement projects in Gas
Distribution; and
- several other smaller projects in Liquids Pipelines and Gas
Transmission and Midstream.
Line 3 Replacement
Construction of the U.S. portion of the Line 3 Replacement
Project in Minnesota continues to
advance on schedule and is more than 50% complete, utilizing
industry-leading environmental protection measures and construction
techniques. As planned, the majority of pipeline construction was
paused on April 1st due to
seasonal restrictions and is expected to resume around June 1st. Construction on the eight
pump station facilities is continuing.
The Line 3 Replacement Project is a critical integrity project
that will enhance the continued safe and reliable operations of
Enbridge's Mainline System well into the future. The project has
employed over 1,500 Indigenous workers in Canada and the U.S., and contributed over
$650 million in spending within
Indigenous and Tribal communities. In addition, the Company has
worked closely with local health officials to put in place a
comprehensive health and safety program to protect communities and
our crews from COVID-19.
The project is expected to be completed and placed into service
in the fourth quarter of 2021, contributing approximately
$200 million of incremental EBITDA in
2021, and supporting significant free cash flow growth in 2022 and
beyond.
B.C. Pipeline System Expansions
The $1.0 billion T-South
Reliability and Expansion Program and $0.5
billion Spruce Ridge projects continue to advance on
schedule and are expected to be fully in service by the fourth
quarter of 2021.
Combined, these two projects will increase the capacity of the
B.C. Pipeline System by approximately 590 MMcf/d to meet growing
regional demand in B.C. and the U.S. Pacific Northwest through a
combination of compressor station upgrades and the addition of two
new pipeline segments.
Once in-service, the capital costs of these expansion and
reliability projects will be included in rate base and will earn a
rate of return consistent with the system's regulated returns.
European Offshore Wind Projects
In the first quarter, the Company commenced construction of the
448 MW Calvados Offshore Wind Project (Courseulles-sur-Mer) located
off the northwest coast of France.
The project is comprised of 64 wind turbines and is underpinned by
a 20-year fixed price power purchase agreement granted by the
French government with an expected in-service date sometime in
2024. Enbridge's 21.7% share of the total project cost of
approximately €2 billion is €0.6 billion and will be primarily
financed through non-recourse project finance debt.
Construction of the 480 MW Saint-Nazaire and 497 MW Fécamp
Offshore Wind Projects remain on schedule for their respective
planned in-service dates of the end of 2022 and 2023, respectively,
with the first turbine foundation at Saint-Nazaire expected to be installed in the
second quarter of 2021.
Along with the Company's three currently in-service offshore
wind projects, the total gross generation capacity in operation and
under construction in Europe is
more than 2.4 GW, enough to power over 2 million homes with
renewable energy.
The previously announced sale of 49% of Enbridge's interests in
three French offshore wind projects closed during the first
quarter. Enbridge's secured growth capital requirements include the
impact of this transaction. Enbridge's current ownership in the
three French projects under development are:
- Saint-Nazaire France Offshore Wind Project (25.5%);
- Fécamp Offshore Wind Project (17.9%); and
- Calvados Offshore Wind Project (21.7%).
OTHER BUSINESS UPDATES
Mainline Contracting
The Company concluded the written portion of its Mainline
Contracting hearing before the Canada Energy Regulator (CER) with
the filing of Enbridge's reply evidence on April 19th. The contract offering, which reflects
two years of negotiations with shippers, will support the best
shipper netbacks and secure long-term demand for Western Canadian
crude oil.
The CER has scheduled oral cross-examination to begin on
May 19th and has set aside
five weeks of hearing time, to be followed by final oral arguments.
Based on this timing, Enbridge will not receive a decision on its
application in advance of the expiry of the current Competitive
Toll Settlement (CTS) on June 30,
2021. Under the terms of the CTS agreement, the tolls in
effect at the time of expiry are expected to continue on an interim
basis, subject to finalization and refund, if any, until the
Mainline contracts are in place.
Gas Transmission and Midstream Rate Cases
In the first quarter, Enbridge advanced rate cases on the
Alliance U.S., Maritimes and Northeast U.S. and East Tennessee pipelines. On April 30, 2021, the Federal Energy Regulatory
Commission (FERC) approved a Stipulation and Agreement filed with
regards to the Maritimes & Northeast U.S. rate case. An
agreement in principle has been reached on both the Alliance U.S.
and East Tennessee rate cases. A
stipulation and agreement has been filed in the Alliance U.S. rate
case and is pending approval by the FERC and Enbridge expects to
file the stipulation and agreement with the FERC for East Tennessee rate case in the second quarter
of 2021.
The Company's regulatory strategy is to ensure just and
reasonable returns, and timely recovery of the capital invested
into these critical systems.
Line 5 - Great Lakes Tunnel Project
The Great Lakes Tunnel Project (Tunnel Project) will relocate
the Line 5 pipeline into a state-of-the-art tunnel beneath the
Straits of Mackinac (the Straits)
and is the best way to replace and modernize the existing crossing
at the Straits while maintaining an essential supply of energy on
which Michigan and the surrounding
region depend.
The Company received its required permits from the Michigan
Department of Environment Great Lakes and Energy during the first
quarter of 2021, and work on permits and approvals from the U.S.
Army Corp of Engineers (USACE) and the Michigan Public Service
Commission continue to progress.
During the first quarter, Enbridge continued to advance the
Tunnel Project by completing the engineering and design phase. This
step has proven the technical feasibility of the Tunnel Project and
provided the scope of work required to commence construction. The
Company is now moving forward with the selection of a world class
contractor to construct the tunnel. The project is expected to
require more than two million labor hours and the selected
contractor will be required to work with union labor.
Cushing Storage Acquisition
During the first quarter, the Company completed the previously
announced purchase of 6.6 million barrels of storage assets located
in Cushing, Oklahoma for a cash
purchase price of $0.2 billion. These
assets support Enbridge's U.S. Gulf Coast export strategy by
providing additional flexibility on the system and are connected to
the Company's existing network affording the opportunity for
immediate synergy realization.
Solar Self Power Program
Enbridge is continuing to progress its self power strategy which
is one of our pathways to achieve net zero targets. These projects
will directly reduce the Company's Scope 1 and Scope 2 emissions
associated with the transportation of crude oil and natural gas
while generating a return on our investment comparable to our
traditional organic growth projects.
In the first quarter, the Company sanctioned 4 additional solar
projects on the Mainline and Flanagan
South pipelines. These solar projects are co-located at
existing pump stations and are expected to provide a combined 35 MW
of generation when they enter service in late 2022.
The Company currently has two existing facilities in operations,
the 10.5 MW Alberta Solar One project on the Liquids Pipeline
system, and the 2.3 MW Lambertville facility on the Texas Eastern
system. A third facility, a 2.5 MW project at the Heidlersburg
compressor station on the Texas Eastern system is expected to be in
service in the second quarter of 2021.
FIRST QUARTER 2021 FINANCIAL RESULTS
The following table summarizes the Company's GAAP reported
results for segment EBITDA, earnings attributable to common
shareholders and cash provided by operating activities for the
first quarter of 2021.
GAAP SEGMENT EBITDA AND CASH FLOW FROM OPERATIONS
|
Three months
ended
March 31,
|
|
2021
|
2020
|
(unaudited;
millions of Canadian dollars)
|
|
|
Liquids
Pipelines
|
2,039
|
850
|
Gas Transmission and
Midstream
|
973
|
(1,054)
|
Gas Distribution and
Storage
|
634
|
604
|
Renewable Power
Generation
|
156
|
120
|
Energy
Services
|
64
|
121
|
Eliminations and
Other
|
220
|
(966)
|
EBITDA
|
4,086
|
(325)
|
|
|
|
Earnings
attributable to common shareholders
|
1,900
|
(1,429)
|
|
|
|
Cash provided by
operating activities
|
2,564
|
2,809
|
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.
DISTRIBUTABLE CASH FLOW
|
Three months
ended
March 31,
|
|
2021
|
2020
|
(unaudited;
millions of Canadian dollars, except per share
amounts)
|
|
|
Liquids
Pipelines
|
1,881
|
1,919
|
Gas Transmission and
Midstream
|
1,007
|
1,097
|
Gas Distribution and
Storage
|
646
|
609
|
Renewable Power
Generation
|
154
|
118
|
Energy
Services
|
(75)
|
(13)
|
Eliminations and
Other
|
130
|
33
|
Adjusted
EBITDA1,3
|
3,743
|
3,763
|
Maintenance
capital
|
(109)
|
(204)
|
Interest
expense1
|
(677)
|
(711)
|
Current income
tax1
|
(101)
|
(108)
|
Distributions to
noncontrolling interests1
|
(68)
|
(76)
|
Cash distributions in
excess of equity earnings1
|
43
|
72
|
Preference share
dividends
|
(92)
|
(96)
|
Other receipts of
cash not recognized in revenue2
|
19
|
51
|
Other non-cash
adjustments
|
3
|
15
|
DCF3
|
2,761
|
2,706
|
Weighted average
common shares outstanding
|
2,022
|
2,019
|
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.
|
First quarter 2021 DCF increased $55
million compared with the same period of 2020 primarily due
to operational factors discussed below in Adjusted EBITDA by
Segments as well as:
- lower maintenance capital due to timing of spend which is
expected to be largely offset by higher spending for the remainder
of 2021; and
- lower cash distributions in excess of equity earnings primarily
due to the 50% distribution cut at DCP Midstream, LP (DCP
Midstream) which impacted the distributions received by Enbridge
beginning in the second quarter of 2020.
ADJUSTED EARNINGS
|
Three months
ended March 31,
|
|
2021
|
2020
|
(unaudited;
millions of Canadian dollars, except per share
amounts)
|
|
|
Adjusted
EBITDA1
|
3,743
|
3,763
|
Depreciation and
amortization
|
(932)
|
(882)
|
Interest
expense2
|
(665)
|
(696)
|
Income
taxes2
|
(399)
|
(451)
|
Noncontrolling
interests2
|
(21)
|
30
|
Preference share
dividends
|
(92)
|
(96)
|
Adjusted
earnings1
|
1,634
|
1,668
|
Adjusted earnings
per common share
|
0.81
|
0.83
|
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 $34
million and adjusted earnings per share decreased
$0.02 compared with the first quarter
in 2020. The decrease in adjusted earnings was driven by the same
factors impacting business performance and adjusted EBITDA as
discussed under Adjusted EBITDA by Segments below, as well
as the following factors:
- higher depreciation and amortization expense primarily as a
result of new assets placed into service throughout 2020 and recent
Gas Transmission rate settlements; and
- the absence of a positive impact to noncontrolling interests
recorded in the first quarter of 2020 as a result of tax equity
adjustments on certain onshore wind farms.
ADJUSTED EBITDA BY SEGMENTS
Adjusted EBITDA by segment is reported on a Canadian dollar
basis. Adjusted EBITDA generated from U.S. dollar
denominated businesses, primarily within Liquids Pipelines and Gas
Transmission and Midstream, was translated at a lower average
Canadian dollar exchange rate in the first quarter of 2021
(C$1.27/US$) when compared with the
corresponding 2020 period (C$1.35/US$).
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.
Net of the impacts of a weaker average Canadian dollar exchange
rate in the first quarter of 2021 on primarily the Liquids
Pipelines and Gas Transmission and Midstream businesses, results
across each of Enbridge's core businesses were strong. Both Liquids
Pipelines and Gas Transmission and Midstream results, adjusted for
the impact of foreign exchange rates on translation, are
approximately in-line with results in the first quarter of 2020,
despite the fact that the comparable period in 2020 was largely
unaffected by the effects of the pandemic.
LIQUIDS PIPELINES
|
Three months
ended
March 31,
|
|
2021
|
2020
|
(unaudited;
millions of Canadian dollars)
|
|
|
Mainline
System
|
1,131
|
1,107
|
Regional Oil Sands
System
|
237
|
211
|
Gulf Coast and
Mid-Continent System
|
189
|
244
|
Other1
|
324
|
357
|
Adjusted
EBITDA2
|
1,881
|
1,919
|
|
|
|
Operating Data
(average deliveries – thousands of bpd)
|
|
|
Mainline System -
ex-Gretna volume3
|
2,746
|
2,842
|
Regional Oil Sands
System4
|
1,949
|
1,865
|
International Joint
Tariff (IJT)5
|
$4.27
|
$4.21
|
1
|
Other consists of
Southern Lights Pipeline, Express-Platte System, Bakken System,
Gray Oak and Feeder Pipelines & Other.
|
2
|
Schedules
reconciling adjusted EBITDA are available as Appendices to this
news release.
|
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
|
Volumes are for
the Athabasca mainline, Waupisoo Pipeline, Woodland Pipeline and
Wood Buffalo system 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 55% of total Mainline System revenue and the average
effective FX rate for the Canadian portion of the Mainline during
the first quarter of 2021 was C$1.24/US$ (Q1 2020:
C$1.20/US$).
|
|
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 $38 million compared with the first quarter of
2020, primarily due to:
- lower Mainline System contributions due to reduced throughput
compared with the first quarter of 2020, which was largely
unaffected by the impacts of COVID-19 on supply and demand for oil
and related products, offset by a higher IJT Benchmark Toll, higher
CTS surcharges per barrel, and a higher effective FX hedge rate
(C$1.24 in 2021 vs. C$1.20 in 2020) on hedges used to manage foreign
exchange risk of the USD denominated IJT;
- lower contributions from the Seaway Crude Pipeline System,
Flanagan South Pipeline and the Bakken Pipeline System compared
with the first quarter of 2020, which was largely unaffected by the
impacts of COVID-19 on supply and demand for oil and products;
and
- the negative effect of translating U.S. dollar denominated
EBITDA at a lower Canadian to U.S. dollar average exchange rate,
which is largely offset by realized gains in the Eliminations and
Other segment as part of the Company's enterprise-wide financial
risk management program; partially offset by
- higher Regional Oil Sands contributions due to higher
throughput on our Athabasca Mainline and Waupisoo pipelines.
GAS TRANSMISSION AND MIDSTREAM
|
Three months
ended
March 31,
|
|
2021
|
2020
|
(unaudited;
millions of Canadian dollars)
|
|
|
US Gas
Transmission
|
782
|
864
|
Canadian Gas
Transmission
|
142
|
138
|
US
Midstream
|
43
|
45
|
Other
|
40
|
50
|
Adjusted
EBITDA1
|
1,007
|
1,097
|
1
|
Schedules
reconciling adjusted EBITDA are available as Appendices to this
news release.
|
Gas Transmission and Midstream adjusted EBITDA decreased
$90 million compared with the first
quarter of 2020 primarily due to:
- lower contributions in US Gas Transmission due to the absence
in 2021 of the recognition of revenues in 2020 that related to the
settlement of interim rates collected from shippers on Texas
Eastern retroactive to June 1, 2019;
and
- the negative effect of translating U.S. dollar denominated
EBITDA at a lower Canadian to U.S. dollar average exchange rate,
which is largely offset by realized gains in the Eliminations and
Other segment as part of the Company's enterprise-wide financial
risk management program; partially offset by
- contributions from Atlantic Bridge Phase III, which was placed
into service in January of 2021.
GAS DISTRIBUTION AND STORAGE
|
Three months
ended
March 31,
|
|
2021
|
2020
|
(unaudited;
millions of Canadian dollars)
|
|
|
Enbridge Gas Inc.
(EGI)
|
604
|
574
|
Other
|
42
|
35
|
Adjusted
EBITDA1
|
646
|
609
|
|
|
|
Operating
Data
|
|
|
EGI
|
|
|
Volumes (billions
of cubic feet)
|
671
|
638
|
Number of active
customers (millions)2
|
3.8
|
3.7
|
Heating degree
days3
|
|
|
Actual
|
1,807
|
1,727
|
Forecast based on
normal weather4
|
1,924
|
1,923
|
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
$37 million compared with the first
quarter of 2020 primarily due to:
- higher distribution charges resulting from increases in rates
and customer base growth;
- the positive impact of colder weather in 2021 when compared to
2020 of approximately $17 million;
and
- higher storage revenue, mainly related to storage optimization
activities.
When compared with the normal weather forecast embedded in
rates, both the first quarter of 2021 and 2020 experienced warmer
weather than forecasted which unfavorably impacted results. The
first quarter 2021 was negatively impacted by approximately
$24 million while the first quarter
of 2020 was negatively impacted by approximately $41 million.
RENEWABLE POWER GENERATION
|
Three months
ended
March 31,
|
|
2021
|
2020
|
(unaudited;
millions of Canadian dollars)
|
|
|
Adjusted
EBITDA1
|
154
|
118
|
1
|
Schedules
reconciling adjusted EBITDA are available as Appendices to this
news release.
|
Renewable Power Generation adjusted EBITDA increased
$36 million compared with the first
quarter of 2020 primarily due to:
- the promote fee received associated with the closing of the
sale to CPP Investments of 49% of Enbridge's interest in three
French offshore wind projects under development;
- stronger wind production at certain offshore wind facilities;
partially offset by
- lower wind resources at the Canadian and U.S. wind facilities,
including effects of the winter storm in Texas during February
2021.
ENERGY SERVICES
|
Three months
ended
March 31,
|
|
2021
|
2020
|
(unaudited;
millions of Canadian dollars)
|
|
|
Adjusted
EBITDA1
|
(75)
|
(13)
|
1
|
Schedules
reconciling adjusted EBITDA are available as Appendices to this
news release.
|
Energy Services adjusted EBITDA decreased $62 million compared with the first quarter of
2020 as a result of:
- significant compression of location and quality differentials
in certain markets;
- fewer opportunities to achieve profitable transportation
margins on facilities in which Energy Services holds capacity
obligations; and
- effects of the winter storm experienced in Texas and across the U.S. during February 2021.
ELIMINATIONS AND OTHER
|
Three months
ended
March 31,
|
|
2021
|
2020
|
(unaudited;
millions of Canadian dollars)
|
|
|
Operating and
administrative recoveries/(expenses)
|
106
|
79
|
Realized foreign
exchange hedge settlement gains/(losses)
|
24
|
(46)
|
Adjusted
EBITDA1
|
130
|
33
|
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 $97 million compared with the first quarter of
2020 due to realized foreign exchange gains in 2021 compared with
realized foreign exchange losses in 2020 as a result of a narrower
spread between the average exchange rate of $1.27 for the first quarter of 2021 (Q1
2020:$1.35) and the hedge rate of
$1.30 for the first quarter of 2021
(Q1 2020:$1.29).
CONFERENCE CALL
Enbridge will host a conference call and webcast on May 7,
2021 at 9:00 a.m. Eastern Time (7:00 a.m. Mountain Time)
to provide an enterprise wide business update and review 2021 first
quarter results. Analysts, members of the media and other
interested parties can access the call toll free at (833) 233-4460
or within and outside North
America at (647) 689-4543 using the access code of 5072874.
The call will be audio webcast live at
https://event.on24.com/wcc/r/3124984/F009D71DE63AAACA8A0876A0794D31C6.
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 soon 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 (800) 585-8367 or within and outside
North America at (416) 621-4624
(access code 5072874).
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 May 4, 2021, the Company's
Board of Directors declared the following quarterly dividends. All
dividends are payable on June 1, 2021
to shareholders of record on May 14,
2021.
|
Dividend per
share
|
Common
Shares1
|
$0.83500
|
Preference Shares,
Series A
|
$0.34375
|
Preference Shares,
Series B
|
$0.21340
|
Preference Shares,
Series C2
|
$0.15501
|
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 11
|
$0.24613
|
Preference Shares,
Series 13
|
$0.19019
|
Preference Shares,
Series 15
|
$0.18644
|
Preference Shares,
Series 17
|
$0.32188
|
Preference Shares,
Series 19
|
$0.30625
|
1
|
The quarterly
dividend per common share was increased 3% to $0.835 from $0.81,
effective March 1, 2021.
|
2
|
The quarterly
dividend per share paid on Series C was increased to $0.15501 from
$0.15349 on March 1, 2021, due to reset on a quarterly basis
following the date of issuance of the Series C Preference
Shares.
|
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; 2021 financial
guidance; the COVID-19 pandemic and the duration and impact
thereof; energy intensity and 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 DCF and DCF
per share; expected future cash flows; expected dividend growth and
payout ratio; anticipated cost savings; expected performance of the
Company's businesses; expected debt-to-EBITDA ratio; financial
strength and flexibility and investment capacity; 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, investment capacity and capital allocation
priorities; expected future growth and expansion opportunities;
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 Project, including anticipated in-service date, capital
costs, EBITDA and cash flow contribution and economics; and Line 5
dual pipelines, the Great Lakes Tunnel Project and related
matters.
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; 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;
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; anticipated reductions in operating costs; 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; 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.
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 1,763 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 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 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
March 31,
|
|
2021
|
2020
|
(unaudited;
millions of Canadian dollars)
|
|
|
Liquids
Pipelines
|
2,039
|
850
|
Gas Transmission and
Midstream
|
973
|
(1,054)
|
Gas Distribution and
Storage
|
634
|
604
|
Renewable Power
Generation
|
156
|
120
|
Energy
Services
|
64
|
121
|
Eliminations and
Other
|
220
|
(966)
|
EBITDA
|
4,086
|
(325)
|
Depreciation and
amortization
|
(932)
|
(882)
|
Interest
expense
|
(657)
|
(706)
|
Income tax
expense
|
(483)
|
549
|
(Earnings)/loss
attributable to noncontrolling interests
|
(22)
|
31
|
Preference share
dividends
|
(92)
|
(96)
|
Earnings/(loss)
attributable to common shareholders
|
1,900
|
(1,429)
|
ADJUSTED EBITDA TO ADJUSTED EARNINGS
|
Three months
ended
March 31,
|
|
2021
|
2020
|
(unaudited;
millions of Canadian dollars, except per share
amounts)
|
|
|
Liquids
Pipelines
|
1,881
|
1,919
|
Gas Transmission and
Midstream
|
1,007
|
1,097
|
Gas Distribution and
Storage
|
646
|
609
|
Renewable Power
Generation
|
154
|
118
|
Energy
Services
|
(75)
|
(13)
|
Eliminations and
Other
|
130
|
33
|
Adjusted
EBITDA
|
3,743
|
3,763
|
Depreciation and
amortization
|
(932)
|
(882)
|
Interest
expense
|
(665)
|
(696)
|
Income tax
expense
|
(399)
|
(451)
|
(Earnings)/loss
attributable to noncontrolling interests
|
(21)
|
30
|
Preference share
dividends
|
(92)
|
(96)
|
Adjusted
earnings
|
1,634
|
1,668
|
Adjusted earnings
per common share
|
0.81
|
0.83
|
EBITDA TO ADJUSTED EARNINGS
|
Three months
ended
March 31,
|
|
2021
|
2020
|
(unaudited;
millions of Canadian dollars, except per share
amounts)
|
|
|
EBITDA
|
4,086
|
(325)
|
Adjusting
items:
|
|
|
Change in unrealized
derivative fair value (gain)/loss - Foreign exchange
|
(279)
|
1,956
|
Change in unrealized
derivative fair value gain - Commodity prices
|
(139)
|
(476)
|
Equity investment
impairment
|
—
|
1,736
|
Equity investment
asset and goodwill impairment
|
—
|
324
|
Net inventory
adjustment - Energy Services
|
—
|
342
|
Texas Eastern
re-establishment of EDIT regulated liability
|
—
|
159
|
Other
|
75
|
47
|
Total adjusting
items
|
(343)
|
4,088
|
Adjusted
EBITDA
|
3,743
|
3,763
|
Depreciation and
amortization
|
(932)
|
(882)
|
Interest
expense
|
(657)
|
(706)
|
Income tax
(expense)/recovery
|
(483)
|
549
|
(Earnings)/loss
attributable to noncontrolling interests
|
(22)
|
31
|
Preference share
dividends
|
(92)
|
(96)
|
Adjusting items in
respect of:
|
|
|
Interest
(expense)/recovery
|
(8)
|
10
|
Income tax
(expense)/recovery
|
84
|
(1,000)
|
(Earnings)/loss
attributable to noncontrolling interests
|
1
|
(1)
|
Adjusted
earnings
|
1,634
|
1,668
|
Adjusted earnings
per common share
|
0.81
|
0.83
|
APPENDIX B
NON-GAAP RECONCILIATION – ADJUSTED EBITDA TO SEGMENTED
EBITDA
LIQUIDS PIPELINES
|
Three months
ended
March 31,
|
|
2021
|
2020
|
(unaudited;
millions of Canadian dollars)
|
|
|
Adjusted
EBITDA
|
1,881
|
1,919
|
Change in unrealized
derivative fair value gain/(loss)
|
161
|
(1,066)
|
Other
|
(3)
|
(3)
|
Total
adjustments
|
158
|
(1,069)
|
EBITDA
|
2,039
|
850
|
GAS TRANSMISSION AND MIDSTREAM
|
Three months
ended
March 31,
|
|
2021
|
2020
|
(unaudited;
millions of Canadian dollars)
|
|
|
Adjusted
EBITDA
|
1,007
|
1,097
|
Equity investment
impairment
|
—
|
(1,736)
|
Equity investment
asset and goodwill impairment
|
—
|
(324)
|
Texas Eastern
re-establishment of EDIT regulated liability
|
—
|
(159)
|
Equity earnings
adjustment - DCP Midstream, LLC
|
(19)
|
53
|
Other
|
(15)
|
15
|
Total
adjustments
|
(34)
|
(2,151)
|
EBITDA
|
973
|
(1,054)
|
GAS DISTRIBUTION AND STORAGE
|
Three months
ended
March 31,
|
|
2021
|
2020
|
(unaudited;
millions of Canadian dollars)
|
|
|
Adjusted
EBITDA
|
646
|
609
|
Change in unrealized
derivative fair value gain
|
2
|
6
|
Employee severance,
transition and transformation costs
|
(14)
|
(7)
|
Other
|
—
|
(4)
|
Total
adjustments
|
(12)
|
(5)
|
EBITDA
|
634
|
604
|
RENEWABLE POWER GENERATION
|
Three months
ended
March 31,
|
|
2021
|
2020
|
(unaudited;
millions of Canadian dollars)
|
|
|
Adjusted
EBITDA
|
154
|
118
|
Change in unrealized
derivative fair value gain
|
2
|
2
|
Total
adjustments
|
2
|
2
|
EBITDA
|
156
|
120
|
ENERGY SERVICES
|
Three months
ended
March 31,
|
|
2021
|
2020
|
(unaudited;
millions of Canadian dollars)
|
|
|
Adjusted
EBITDA
|
(75)
|
(13)
|
Change in unrealized
derivative fair value gain
|
139
|
476
|
Net inventory
adjustment
|
—
|
(342)
|
Total
adjustments
|
139
|
134
|
EBITDA
|
64
|
121
|
ELIMINATIONS AND OTHER
|
Three months
ended
March 31,
|
|
2021
|
2020
|
(unaudited;
millions of Canadian dollars)
|
|
|
Adjusted
EBITDA
|
130
|
33
|
Change in unrealized
derivative fair value gain/(loss)
|
114
|
(898)
|
Change in corporate
guarantee obligation
|
—
|
(74)
|
Investment write-down
loss
|
—
|
(43)
|
Employee severance,
transition and transformation costs
|
(19)
|
(4)
|
Other
|
(5)
|
20
|
Total
adjustments
|
90
|
(999)
|
EBITDA
|
220
|
(966)
|
APPENDIX C
NON-GAAP RECONCILIATION – CASH PROVIDED BY OPERATING ACTIVITIES TO
DCF
|
Three months
ended
March 31,
|
|
2021
|
2020
|
(unaudited;
millions of Canadian dollars)
|
|
|
Cash provided by
operating activities
|
2,564
|
2,809
|
Adjusted for changes
in operating assets and liabilities1
|
418
|
(194)
|
|
2,982
|
2,615
|
Distributions to
noncontrolling interests4
|
(68)
|
(76)
|
Preference share
dividends
|
(92)
|
(96)
|
Maintenance capital
expenditures2
|
(109)
|
(204)
|
Significant adjusting
items:
|
|
|
Other receipts of cash
not recognized in revenue3
|
19
|
51
|
Employee severance,
transition and transformation costs
|
35
|
11
|
Distributions from
equity investments in excess of cumulative
earnings4
|
61
|
77
|
Other
items
|
(67)
|
328
|
DCF
|
2,761
|
2,706
|
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-first-quarter-2021-financial-results-reaffirms-2021-financial-outlook-301286324.html
SOURCE Enbridge Inc.