CALGARY,
AB, Aug. 4, 2023 /PRNewswire/ - Enbridge Inc.
(Enbridge or the Company) (TSX: ENB) (NYSE: ENB) today reported
second quarter 2023 financial results and reaffirmed its 2023
financial outlook.
Highlights
(All financial figures are unaudited and
in Canadian dollars unless otherwise noted. * identifies non-GAAP
financial measures. Please refer to Non-GAAP Reconciliations
Appendices.)
- Second quarter GAAP earnings of $1.8
billion or $0.91 per common
share, compared with GAAP earnings of $0.5
billion or $0.22 per common
share in 2022
- Adjusted earnings* of $1.4
billion or $0.68 per common
share*, compared with $1.4 billion or
$0.67 per common share in 2022
- Adjusted earnings before interest, income taxes and
depreciation and amortization (EBITDA)* of $4.0 billion, an increase of 8%, compared with
$3.7 billion in 2022
- Cash provided by operating activities of $3.4 billion, compared with $2.5 billion in 2022
- Distributable cash flow (DCF)* of $2.8
billion, an increase of 1%, compared with $2.7 billion in 2022
- Reaffirmed 2023 full year financial guidance for EBITDA and DCF
and medium-term outlook
- Planning construction of the first phase of the Rio Bravo
Pipeline which will transport 2.6 bcf per day of natural gas
feedstock to supply Rio Grande LNG
- Extended and upsized the Flanagan South Pipeline (FSP) binding
open season for US Gulf Coast delivery service
- Issued $0.4 billion aggregate
amount of sustainability-linked bonds (SLB) in Canada, further strengthening Enbridge's
commitment to its emissions reduction goals
- Issued 22nd Sustainability Report, demonstrating the Company's
ongoing progress towards goals set in November 2020
- On track to achieve Debt-to-EBITDA in the lower half of the
target range by year end, providing financial flexibility and
demonstrating commitment to our equity-self funding model
CEO COMMENT
"Continuing our strong start to the year, Enbridge's four
businesses delivered another solid quarter of financial
performance. Our first-choice customer service offering and
operating reliability continue to result in high utilization across
our systems. We continue to execute on our strategic priorities and
are on track to achieve our full-year EBITDA and DCF per share
guidance.
"During the first half of the year, we reached a win-win-win
settlement with our customers on the Mainline, which further
enhances the utility-like profile of our cash flow. We've seen
record Mainline volumes and strong uptake on the Flanagan South
open season and sanctioned the Enbridge Houston Oil Terminal, which
will further strengthen the competitive position of the
Mainline.
"We are pleased Rio Grande LNG reached FID and look forward to
starting construction on our Rio
Bravo pipeline project after obtaining necessary regulatory
approvals. In Gas Distribution, we are expecting another strong
year of customer growth and have negotiated a partial settlement on
our rebasing application. Construction of our French offshore wind
projects are ongoing with the first turbines installed at Fécamp.
We have more than 4.5GW of onshore renewable projects under
development and anticipate reaching FID on certain projects by
year-end.
"Through the first half of 2023, we also continued to deliver on
our capital allocation commitments. We executed on $1.1 billion of accretive tuck-in M&A and are
on track to place approximately $3
billion of capital into service this year. Our balance sheet
is in great shape, with Debt-to-EBITDA at the bottom end of our
target range. Financial strength remains a key priority as we
deploy our $6 billion of annual
investment capacity within our equity self-funded model.
"We also published our 22nd annual Sustainability Report
highlighting our long-standing focus on sustainable practices and
our industry-leading performance across environmental, social and
governance issues. Across our business we have integrated emission
reduction considerations into our capital allocation process and
continue to align executive compensation to performance on our ESG
strategies.
"Enbridge's resilient, low risk business model is supported by
our scale, diversification and high quality cash flows which
positions us to withstand market volatility and deliver predictable
results. Looking forward, financial discipline, execution of our
secured capital program, and deployment of our discretionary
investment capacity gives us confidence that we'll generate 4-6%
EBITDA growth per year through 2025 and approximately 5%
thereafter.
"We believe natural gas and oil will remain critical components
of our energy supply mix across a paced energy transition. Our
asset network is large, diverse, and unmatched, providing
conventional energy infrastructure and lower-carbon opportunities
supporting dividend growth and long term shareholder returns, which
positions us as a first choice investment opportunity."
FINANCIAL RESULTS SUMMARY
Financial results for the three and six months ended
June 30, 2023 and 2022 are summarized
in the table below:
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
(unaudited; millions
of Canadian dollars, except per share amounts;
number of shares in millions)
|
|
|
|
|
|
GAAP Earnings
attributable to common shareholders
|
1,848
|
450
|
|
3,581
|
2,377
|
GAAP Earnings per
common share
|
0.91
|
0.22
|
|
1.77
|
1.17
|
Cash provided by
operating activities
|
3,439
|
2,534
|
|
7,305
|
5,473
|
Adjusted
EBITDA1
|
4,008
|
3,715
|
|
8,476
|
7,862
|
Adjusted
Earnings1
|
1,380
|
1,350
|
|
3,106
|
3,055
|
Adjusted Earnings per
common share1
|
0.68
|
0.67
|
|
1.53
|
1.51
|
Distributable Cash
Flow1
|
2,783
|
2,747
|
|
5,963
|
5,819
|
Weighted average common
shares outstanding
|
2,024
|
2,026
|
|
2,025
|
2,026
|
1 Non-GAAP
financial measures. Please refer to Non-GAAP Reconciliations
Appendices.
|
GAAP earnings attributable to common shareholders for the second
quarter of 2023 increased by $1,398 million or $0.69 per share compared with the same period in
2022, primarily due to operating performance factors discussed
below and a non-cash, unrealized derivative fair value gain of
$550 million ($422 million after-tax) in 2023, compared to a
net loss of $866 million ($663
million after-tax) in 2022, reflecting changes in the
mark-to-market value of derivative financial instruments used to
manage foreign exchange and interest rate risks.
The period-over-period comparability of GAAP earnings
attributable to common shareholders is impacted by certain unusual,
infrequent factors or other non-operating factors which are noted
in the reconciliation schedule included in Appendix A of
this news release. Refer to the Company's Management's
Discussion & Analysis for the second quarter of 2023 filed
in conjunction with the second quarter financial statements for a
detailed discussion of GAAP financial results.
Adjusted EBITDA in the second quarter of 2023 increased by
$293 million compared with the same period in 2022. This was
primarily driven by contributions from increased economic interests
in the Gray Oak Pipeline and the Cactus II Pipeline during the
second half of 2022 and early 2023, higher ex-Gretna volumes on the Mainline and the
recognition of a lower provision against the interim Mainline IJT.
These factors were partially offset by a decrease in earnings from
our reduced interest in DCP Midstream, LLC (DCP), lower commodity
prices impacting DCP and Aux Sable
and the timing of Gas Distribution storage demand and
transportation costs.
Adjusted earnings in the second quarter of 2023 increased by
$30 million, or $0.01 per share,
primarily due to higher Adjusted EBITDA contributions discussed
above, offset by higher financing costs due to higher interest
rates, higher depreciation expense from assets placed into service
last year, and higher earnings attributable to non-controlling
interests from the sale of an 11.57% non-operating interest in
seven Enbridge-operated pipelines to Athabasca Indigenous
Investments in Q3, 2022.
DCF for the second quarter of 2023 increased by
$36 million, primarily due to higher Adjusted EBITDA
contributions partially offset by the timing of maintenance capital
spend, higher financing costs due to higher interest rates and
higher distributions to noncontrolling interests as noted
above.
Detailed financial information and analysis can be found below
under Second Quarter 2023 Financial Results.
FINANCIAL OUTLOOK
The Company reaffirms its 2023 financial guidance for EBITDA and
DCF. Results for the first six months of 2023 are in line with the
Company's expectations and the Company anticipates that its
businesses will continue to experience strong capacity utilization
and operating performance through the balance of the year with
normal course seasonality.
Strong operational performance in the first half of the year is
expected to be offset by higher financing costs, due to increased
interest rates, and a lower toll on the Mainline.
FINANCING UPDATE
In May of 2023, Enbridge issued a three-tranche Canadian debt
offering consisting of $600 million
of 5-year notes, $400 million of
10-year sustainability-linked bonds, and $500 million of 30-year notes for an aggregate
principal amount of $1.5 billion. The
SLB incorporates Enbridge's 35% emissions intensity reduction
target by 2030 further demonstrating Enbridge's ongoing commitment
to achieving its ESG targets. These debt offerings were hedged at
rates favorable to market rates. The Company's
sustainability-linked financings now total approximately
$8 billion.
The Company continues to be rated BBB+, or equivalent, by all
four of its credit rating agencies, with stable outlooks,
reflecting Enbridge's financial strength and low-risk commercial
model. Enbridge anticipates exiting 2023 with its Debt-to-EBITDA
metric within the lower half of the target range while continuing
to fund its secured capital growth program within its equity
self-funding model.
SECURED GROWTH PROJECT EXECUTION UPDATE
During the second quarter, the Company added $1.8 billion of growth capital to its secured
capital program, including the US$1.2
billion Rio Bravo Pipeline and the addition of US$0.2 billion to Gas Transmission's
modernization program.
The Company's current secured growth program is now
approximately $19 billion with the
Company expecting to place approximately $3
billion into service in 2023 inclusive of the Gas
Transmission's Modernization and Gas Distribution's Utility Growth
Capital programs. The secured growth program is underpinned by
commercial frameworks consistent with Enbridge's low-risk
model.
BUSINESS UPDATES
Enbridge to proceed with construction of the Rio Bravo
Pipeline
In July 2023, NextDecade
Corporation's (NextDecade) Rio Grande LNG export facility reached a
final investment decision. As a result, the construction on our
previously announced Rio Bravo Pipeline project will proceed after
obtaining necessary regulatory approvals. The first phase of the
Rio Bravo Pipeline will transport 2.6 billion cubic feet per day of
natural gas feedstock to NextDecade's Rio Grande LNG export
facility in the Port of Brownsville,
Texas. The project is expected to achieve commercial
operations in 2026.
This project enhances Enbridge's infrastructure to feed LNG
facilities in the region and strengthens the Company's footprint in
South Texas.
Enbridge extends Flanagan South Open Season
The Company extended and upsized an open season for long-term
contracted service on Flanagan South Pipeline. FSP provides service
from the Enbridge Mainline originating at Enbridge's Flanagan
Terminal in Illinois and delivers
near Houston, TX through the
Seaway Pipeline. If the open season is successful, FSP will
approach 90% term-contracted on its 720 kbpd nameplate capacity,
reinforcing strong utilization on the full pathway through the
Mainline.
Mainline Tolling Agreement
Enbridge has reached an agreement in principle on a negotiated
settlement (the settlement) with shippers for tolls on its Mainline
pipeline system. The settlement covers both the Canadian and US
portions of the Mainline and will see the Mainline continuing to
operate as a common carrier system available to all shippers on a
monthly nomination basis. The settlement is subject to regulatory
and other approvals and the term is seven and a half years through
the end of 2028, with new interim tolls effective on July 1, 2023.
The settlement will include:
- an International Joint Toll (IJT), for heavy crude oil
movements from Hardisty to
Chicago, comprised of a Canadian
Mainline Toll of $1.65 per barrel
plus a Lakehead System Toll of US$2.57 per barrel, plus the applicable Line 3
Replacement surcharge;
- toll escalation for operation, administration, and power costs
tied to US consumer price and power indices;
- tolls will continue to be distance and commodity adjusted, and
will utilize a dual currency IJT; and
- a financial performance collar providing incentives for
Enbridge to optimize throughput and cost, but also providing
downside protection in the event of extreme supply or demand
disruptions or unforeseen operating cost exposure. This performance
collar is intended to ensure the Mainline will earn 11% to 14.5%
returns, on a deemed 50% equity capitalization, which is similar to
the returns earned on average during the previous tolling
agreement.
Approximately 70% of Mainline deliveries are tolled under this
settlement, while approximately 30% of deliveries are tolled on a
full path basis to markets downstream of the Mainline. The
other continuing feature is that the Mainline toll (Line 3
replacement surcharge) will flex up or down US$0.035 per barrel for 50,000 barrel per day
changes in throughput.
The expected financial outcome from this settlement is in line
with previously reported financial results after taking into
consideration the previously recognized provision. Enbridge expects
to file the settlement with the Canada Energy Regulator (CER) by
October 2023.
Normal Course Issuer Bid (NCIB) Execution
In the second quarter of 2023, Enbridge repurchased and
cancelled approximately 2.5 million of its common shares equating
to approximately $125 million as part of its 2023 NCIB
program.
Enbridge's current NCIB program commenced on January 6, 2023 and expires on the earlier
of January 5, 2024 or when the
Company reaches the approved share repurchase limit of 27,938,163
common shares to an aggregate amount of up to $1.5 billion.
Enbridge will continue to evaluate opportunities to repurchase
shares pursuant to the Company's NCIB program predicated upon
maintaining a strong balance sheet, and evaluated against the
availability and attractiveness of alternative capital investment
opportunities.
SECOND QUARTER 2023 FINANCIAL RESULTS
GAAP Segment EBITDA and Cash Flow from Operations
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Liquids
Pipelines
|
2,451
|
1,818
|
|
4,814
|
4,147
|
Gas Transmission and
Midstream
|
1,042
|
1,119
|
|
2,247
|
2,133
|
Gas Distribution and
Storage
|
367
|
417
|
|
1,083
|
1,082
|
Renewable Power
Generation
|
129
|
122
|
|
265
|
284
|
Energy
Services
|
22
|
(177)
|
|
23
|
(278)
|
Eliminations and
Other
|
529
|
(704)
|
|
535
|
(349)
|
EBITDA1
|
4,540
|
2,595
|
|
8,967
|
7,019
|
|
|
|
|
|
|
Earnings
attributable to common shareholders
|
1,848
|
450
|
|
3,581
|
2,377
|
|
|
|
|
|
|
Cash provided by
operating activities
|
3,439
|
2,534
|
|
7,305
|
5,473
|
1
Non-GAAP financial measure. Please refer to Non-GAAP
Reconciliations Appendices.
|
For purposes of evaluating performance, the Company makes
adjustments to GAAP reported earnings, segment EBITDA and cash flow
provided by operating activities for unusual, infrequent or other
non-operating factors, which allow Management and investors to more
accurately compare the Company's performance across periods,
normalizing for factors that are not indicative of underlying
business performance. Tables incorporating these adjustments follow
below. Schedules reconciling EBITDA, adjusted EBITDA, adjusted
EBITDA by segment, adjusted earnings, adjusted earnings per share
and DCF to their closest GAAP equivalent are provided in the
Appendices to this news release.
Adjusted EBITDA By Segment
Adjusted EBITDA generated from U.S. dollar denominated
businesses was translated to Canadian dollars at a higher average
exchange rate (C$1.34/US$) in the
second quarter of 2023 when compared with the same quarter in 2022
(C$1.28/US$). A significant portion
of U.S. dollar earnings are hedged under the Company's
enterprise-wide financial risk management program. The hedge
settlements are reported within Eliminations and Other.
Liquids Pipelines
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Mainline
System
|
1,453
|
1,223
|
|
2,790
|
2,507
|
Regional Oil Sands
System
|
249
|
213
|
|
480
|
458
|
Gulf Coast and
Mid-Continent Systems1
|
429
|
284
|
|
848
|
631
|
Other
Systems2
|
340
|
375
|
|
707
|
716
|
Adjusted
EBITDA3
|
2,471
|
2,095
|
|
4,825
|
4,312
|
|
|
|
|
|
|
Operating Data
(average deliveries – thousands of bpd)
|
|
|
|
|
|
Mainline System
volume4
|
2,991
|
2,782
|
|
3,056
|
2,892
|
International Joint
Tariff (IJT)5
|
$4.27
|
$4.27
|
|
$4.27
|
$4.27
|
Competitive Tolling
Settlement (CTS) Surcharges6
|
$0.26
|
$0.26
|
|
$0.26
|
$0.26
|
Line 3 Replacement
Surcharge5,6
|
$0.77
|
$0.94
|
|
$0.80
|
$0.94
|
1
|
Consists of Flanagan
South Pipeline, Seaway Pipeline, Gray Oak Pipeline, Cactus II
Pipeline, Enbridge Ingleside Energy Center, and others.
|
2
|
Other consists of
Southern Lights Pipeline, Express-Platte System, Bakken System, and
others.
|
3
|
Non-GAAP financial
measure. Please refer to Non-GAAP Reconciliations
Appendices.
|
4
|
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.
|
5
|
The IJT benchmark toll,
for heavy crude oil movements from Hardisty, AB to Chicago, IL, and
its components are set in U.S. dollars. For the second quarter, the
entire Mainline System was subject to FX translation similar to the
Company's other U.S. based businesses, which are translated at the
average spot rate for a given period. A portion of this U.S. dollar
translation exposure is hedged under the Company's enterprise-wide
financial risk management program with offsetting hedge settlements
reported within Eliminations and Other. Effective July 1, 2023 the
Company is collecting a new interim toll in line with the agreement
in principle on a negotiated settlement for tolls on the Mainline
pipeline system.
|
6
|
Effective July 1, 2022,
the Line 3 Replacement Surcharge, exclusive of the receipt
terminalling surcharge, will be determined on a monthly basis by a
volume ratchet based on the 9-month rolling average of ex-Gretna
volumes. Each 50 kbpd volume ratchet above 2,835 kbpd (up to 3,085
kbpd) applies a US$0.035/bbl discount whereas each 50 kbpd volume
ratchet below 2,350 kbpd (down to 2,050 kbpd) adds a US$0.04/bbl
charge. Refer to Enbridge's Application for a Toll Order respecting
the implementation of the Line 3 Replacement Surcharges and CER
Order TO-003-2021 for further details.
|
Liquids Pipelines adjusted EBITDA increased $376 million
compared with the second quarter of 2022, primarily related to:
- higher Mainline System average throughput, higher Line 9
deliveries to Eastern Canada and
the recognition of a lower provision against the interim Mainline
IJT, net of a lower L3R surcharge;
- higher contributions from the Gulf Coast and Mid-Continent
System due primarily to increased ownership of the Gray Oak
Pipeline and Cactus II Pipeline acquired in the second half of 2022
and early 2023, and higher volumes from Flanagan South Pipeline and
Enbridge Ingleside Energy Center; and
- the favorable effect of translating US dollar earnings at a
higher average exchange rate in 2023 compared to the same period in
2022; partially offset by
- higher power costs as a result of increased volumes and power
prices.
Gas Transmission And Midstream
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
U.S. Gas
Transmission
|
811
|
760
|
|
1,736
|
1,519
|
Canadian Gas
Transmission
|
140
|
151
|
|
322
|
328
|
Midstream
|
35
|
131
|
|
69
|
220
|
Other
|
47
|
42
|
|
95
|
75
|
Adjusted
EBITDA1
|
1,033
|
1,084
|
|
2,222
|
2,142
|
1 Non-GAAP
financial measure. Please refer to Non-GAAP Reconciliations
Appendices.
|
- Gas Transmission and Midstream adjusted EBITDA decreased
$51 million compared with the second
quarter of 2022, primarily related to:
- a reduction in earnings from our investment in DCP as a result
of our decreased interest due to the joint venture merger
transaction with Phillips 66 that closed during the third quarter
in 2022;
- lower commodity prices impacting our DCP and Aux Sable joint ventures;
- lower volumes shipped on Alliance due to a lower Chicago-AECO
differential;
- higher operating and administrative costs; partially offset
by
- the favorable effect of translating US dollar earnings at a
higher average exchange rate in 2023 compared to the same period in
2022; and
- contributions from the Tres Palacios acquisition in second
quarter of 2023.
Gas Distribution And Storage
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Enbridge Gas Inc.
(EGI)
|
358
|
417
|
|
1,057
|
1,073
|
Other
|
9
|
5
|
|
26
|
23
|
Adjusted
EBITDA1
|
367
|
422
|
|
1,083
|
1,096
|
|
|
|
|
|
|
Operating
Data
|
|
|
|
|
|
EGI
|
|
|
|
|
|
Volumes
(billions of cubic feet)
|
426
|
391
|
|
1,193
|
1,207
|
Number of active
customers2 (millions)
|
3.9
|
3.8
|
|
3.9
|
3.8
|
Heating degree
days3
|
|
|
|
|
|
Actual
|
477
|
495
|
|
2,205
|
2,523
|
Forecast based on
normal weather4
|
515
|
523
|
|
2,407
|
2,444
|
1
|
Non-GAAP financial
measure. Please refer to Non-GAAP Reconciliations
Appendices.
|
2
|
Number of active
customers is the number of natural gas consuming customers at the
end of the reported period.
|
3
|
Heating degree days
is a measure of coldness that is indicative of volumetric
requirements for natural gas utilized for heating purposes in EGI's
distribution franchise areas.
|
4
|
Normal weather is
the weather forecast by EGI in its legacy rate zones, using the
forecasting methodologies approved by the Ontario Energy
Board.
|
Gas Distribution and Storage adjusted EBITDA will typically follow
a seasonal profile. It is generally highest in the first and fourth
quarters of the year reflecting greater volumetric demand during
the heating season. The magnitude of the seasonal EBITDA
fluctuations will vary from year-to-year reflecting the impact of
colder or warmer than normal weather on distribution volumes.
Adjusted EBITDA for the second quarter was negatively impacted
by $55 million primarily explained by the following
significant business factors:
- reversal of first quarter favorable timing of storage demand
and transportation costs of $33
million; and
- higher operating and administrative costs; partially offset
by
- higher distribution charges at Enbridge Gas resulting from
increases in rates and customer base.
When compared with the normal weather forecast embedded in
rates, the impact of weather was negligible for the second quarter
of 2023 and 2022.
Renewable Power Generation
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Adjusted
EBITDA1
|
132
|
127
|
|
271
|
287
|
1 Non-GAAP
financial measure. Please refer to Non-GAAP Reconciliations
Appendices.
|
Renewable Power Generation adjusted EBITDA increased
$5 million compared with the second quarter of 2022 primarily
related to:
- Contributions from the Saint-Nazaire Offshore Wind Project,
which reached full operating capacity in December 2022; partially offset by
- weaker wind resources at North American wind facilities;
and
- lower energy pricing at European offshore wind facilities.
Energy Services
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Adjusted
EBITDA1
|
(30)
|
(99)
|
|
(36)
|
(170)
|
1 Non-GAAP
financial measure. Please refer to Non-GAAP Reconciliations
Appendices.
|
Adjusted EBITDA from Energy Services is dependent on market
conditions and results achieved in one period may not be indicative
of results to be achieved in future periods.
Energy Services adjusted EBITDA increased $69 million
compared with the second quarter of 2022 primarily related to:
- expiration of transportation commitments; and
- less pronounced market structure backwardation as compared to
the same period of 2022.
Eliminations and Other
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Operating and
administrative recoveries
|
31
|
17
|
|
78
|
85
|
Realized foreign
exchange hedge settlement gains
|
4
|
69
|
|
33
|
110
|
Adjusted
EBITDA1
|
35
|
86
|
|
111
|
195
|
1 Non-GAAP
financial measure. Please refer to Non-GAAP Reconciliations
Appendices.
|
Operating and administrative recoveries captured in this segment
reflect the cost of centrally delivered services (including
depreciation of corporate assets) inclusive of amounts recovered
from business units for the provision of those services. U.S.
dollar denominated earnings within operating segment results are
translated at average foreign exchange rates during the quarter,
and the impact of settlements made under the Company's enterprise
foreign exchange hedging program are captured in this corporate
segment.
Eliminations and Other adjusted EBITDA decreased
$51 million compared with the second quarter of 2022 due to
lower realized foreign exchange gains on hedge settlements.
Distributable Cash Flow
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
(unaudited; millions
of Canadian dollars; number of shares in millions)
|
|
|
|
|
|
Liquids
Pipelines
|
2,471
|
2,095
|
|
4,825
|
4,312
|
Gas Transmission and
Midstream
|
1,033
|
1,084
|
|
2,222
|
2,142
|
Gas Distribution and
Storage
|
367
|
422
|
|
1,083
|
1,096
|
Renewable Power
Generation
|
132
|
127
|
|
271
|
287
|
Energy
Services
|
(30)
|
(99)
|
|
(36)
|
(170)
|
Eliminations and
Other
|
35
|
86
|
|
111
|
195
|
Adjusted
EBITDA1,3
|
4,008
|
3,715
|
|
8,476
|
7,862
|
Maintenance
capital
|
(226)
|
(147)
|
|
(399)
|
(251)
|
Interest
expense1
|
(921)
|
(787)
|
|
(1,847)
|
(1,520)
|
Current income
tax1
|
(84)
|
(89)
|
|
(264)
|
(262)
|
Distributions to
noncontrolling interests1
|
(103)
|
(64)
|
|
(195)
|
(124)
|
Cash distributions in
excess of equity earnings1
|
138
|
111
|
|
203
|
144
|
Preference share
dividends1
|
(86)
|
(82)
|
|
(170)
|
(173)
|
Other receipts of cash
not recognized in revenue2
|
40
|
84
|
|
123
|
125
|
Other non-cash
adjustments
|
17
|
6
|
|
36
|
18
|
DCF3
|
2,783
|
2,747
|
|
5,963
|
5,819
|
Weighted average
common shares outstanding
|
2,024
|
2,026
|
|
2,025
|
2,026
|
1
Presented net of adjusting items.
|
2
Consists of cash received, net of revenue recognized, for
contracts under make-up rights and similar deferred revenue
arrangements.
|
3
Non-GAAP financial measures. Please refer to Non-GAAP
Reconciliations Appendices.
|
Second quarter 2023 DCF increased $36 million compared
with the same period of 2022 primarily due to operational factors
discussed above contributing to higher Adjusted EBITDA, partially
offset by:
- higher interest rates primarily impacting floating-rate
debt;
- accelerated timing of maintenance capital spend; and
- higher distributions to noncontrolling interests from the sale
of 11.57% non-operating interest in seven Enbridge-operated
pipelines to Athabasca Indigenous Investments in Q3, 2022.
Adjusted Earnings
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
(unaudited; millions
of Canadian dollars, except per share amounts)
|
|
|
|
|
|
Adjusted
EBITDA1,2
|
4,008
|
3,715
|
|
8,476
|
7,862
|
Depreciation and
amortization
|
(1,172)
|
(1,103)
|
|
(2,354)
|
(2,168)
|
Interest
expense2
|
(928)
|
(776)
|
|
(1,843)
|
(1,498)
|
Income
taxes2
|
(376)
|
(388)
|
|
(889)
|
(914)
|
Noncontrolling
interests2
|
(65)
|
(11)
|
|
(113)
|
(38)
|
Preference share
dividends
|
(87)
|
(87)
|
|
(171)
|
(189)
|
Adjusted
earnings1
|
1,380
|
1,350
|
|
3,106
|
3,055
|
Adjusted earnings
per common share1
|
0.68
|
0.67
|
|
1.53
|
1.51
|
1
Non-GAAP financial measures. Please refer to Non-GAAP
Reconciliations Appendices.
|
2
Presented net of adjusting items.
|
Adjusted earnings increased $30 million and adjusted earnings
per share increased by $0.01 when
compared with the second quarter in 2022 primarily due to
operational factors discussed above contributing to higher Adjusted
EBITDA, offset by:
- higher interest expense due to higher interest rates impacting
floating-rate debt;
- higher depreciation from assets place into service in 2022;
and
- higher earnings attributable to noncontrolling interests from
the sale of 11.57% non-operating interest in seven
Enbridge-operated pipelines to Athabasca Indigenous Investments in
Q3, 2022.
CONFERENCE CALL
Enbridge will host a conference call and webcast on
August 4, 2023 at 9:00 a.m. Eastern Time (7:00
a.m. Mountain Time) to provide a business update and review
2023 second quarter results. Analysts, members of the media and
other interested parties can access the call toll free at
1-800-606-3040. The call will be audio webcast live at
https://events.q4inc.com/attendee/377233726. It is recommended that
participants dial in or join the audio webcast fifteen minutes
prior to the scheduled start time. A webcast replay will be
available soon after the conclusion of the event and a transcript
will be posted to the website. The replay will be available for
seven days after the call toll-free 1-(800)-606-3040 (conference
ID: 9581867).
The conference call format will include prepared remarks from
the executive team followed by a question and answer session for
the analyst and investor community only. Enbridge's media and
investor relations teams will be available after the call for any
additional questions.
DIVIDEND DECLARATION
On July 31, 2023, our Board of
Directors declared the following quarterly dividends. All dividends
are payable on September 1, 2023 to
shareholders of record on August 15,
2023.
|
Dividend per
share
|
Common
Shares
|
$0.88750
|
Preference Shares,
Series A
|
$0.34375
|
Preference Shares,
Series B
|
$0.32513
|
Preference Shares,
Series D
|
$0.33825
|
Preference Shares,
Series F1
|
$0.34613
|
Preference Shares,
Series G2
|
$0.43858
|
Preference Shares,
Series H
|
$0.27350
|
Preference Shares,
Series L
|
US$0.36612
|
Preference Shares,
Series N
|
$0.31788
|
Preference Shares,
Series P
|
$0.27369
|
Preference Shares,
Series R
|
$0.25456
|
Preference Shares,
Series 13
|
US$0.41898
|
Preference Shares,
Series 3
|
$0.23356
|
Preference Shares,
Series 5
|
US$0.33596
|
Preference Shares,
Series 7
|
$0.27806
|
Preference Shares,
Series 9
|
$0.25606
|
Preference Shares,
Series 11
|
$0.24613
|
Preference Shares,
Series 13
|
$0.19019
|
Preference Shares,
Series 15
|
$0.18644
|
Preference Shares,
Series 19
|
$0.38825
|
1
|
The quarterly
dividend per share paid on Preference Shares, Series F was
increased to $0.34613 from $0.29306 on June 1, 2023 due to reset of
the annual dividend on June 1, 2023.
|
2
|
The first quarterly
dividend on Preference Shares, Series G will be paid on September
1, 2023. On June 1, 2023, 1,827,695 of the outstanding Preference
Shares, Series F were converted into Preference Shares, Series
G.
|
3
|
The quarterly
dividend per share paid on Preference Shares, Series 1 was
increased to US$0.41898 from US$0.37182 on June 1, 2023 due to
reset of the annual dividend on June 1, 2023.
|
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 our
strategic priorities and outlook; 2023 financial guidance and near
and medium term outlooks, including projected DCF per share and
adjusted EBITDA and expected growth thereof; expected dividends,
dividend growth and dividend policy; expected supply of, demand
for, exports of and prices of crude oil, natural gas, natural gas
liquids (NGL), liquified natural gas (LNG) and renewable energy;
energy transition and low carbon energy and our approach thereto;
environmental, social and governance (ESG) goals, practices and
performance; anticipated utilization of our assets; expected EBITDA
and expected adjusted EBITDA; expected earnings/(loss) and adjusted
earnings/(loss); expected DCF and DCF per share; expected future
cash flows; expected shareholder returns and asset returns;
expected performance of the Company's businesses; financial
strength and flexibility; financing costs; expectations on
leverage, including debt-to EBITDA ratio; sources of liquidity and
sufficiency of financial resources; expected in-service dates and
costs related to announced projects and projects under
construction; investable capacity, and capital allocation framework
and priorities; share repurchases under our normal course issuer
bid; impact of weather and seasonality; expected future growth and
expansion opportunities, including secured growth program,
development opportunities, customer growth and low carbon
opportunities and strategy, including with respect to the Rio Bravo
Pipeline, Gas Transmission's modernization program, Gas
Distribution's utility growth capital program, and renewable power
projects; Flanagan South Pipeline open season; expected future
actions and decisions of regulators and courts and the timing and
impact thereof; and toll and rate case discussions and filings,
including with respect to the Mainline settlement in principle and
Gas Distribution's rate rebasing application, and anticipated
timing and impact therefrom.
Although Enbridge believes these forward-looking statements
are reasonable based on the information available on the date such
statements are made and processes used to prepare the information,
such statements are not guarantees of future performance and
readers are cautioned against placing undue reliance on
forward-looking statements. By their nature, these statements
involve a variety of assumptions, known and unknown risks and
uncertainties and other factors, which may cause actual results,
levels of activity and achievements to differ materially from those
expressed or implied by such statements. Material assumptions
include assumptions about the following: the expected supply of and
demand for crude oil, natural gas, NGL, LNG and renewable energy;
prices of crude oil, natural gas, NGL, LNG and renewable energy;
anticipated utilization of our assets; exchange rates; inflation;
interest rates; availability and price of labour and construction
materials; the stability of our supply chain; operational
reliability and performance; maintenance of support and regulatory
approvals for our projects and rate applications; anticipated
in-service dates; weather; announced and potential acquisition,
disposition and other corporate transactions and projects and the
timing and benefits thereof; governmental legislation; litigation;
credit ratings; hedging program; expected EBITDA and expected
adjusted EBITDA; expected earnings/(loss) and adjusted
earnings/(loss); expected earnings/(loss) or adjusted
earnings/(loss) per share; expected future cash flows; expected
future DCF and DCF per share; estimated future dividends; financial
strength and flexibility; debt and equity market conditions; and
general economic and competitive conditions. Assumptions regarding
the expected supply of and demand for crude oil, natural gas, NGL,
LNG and renewable energy and the prices of these commodities are
material to and underlie all forward-looking statements, as they
may impact current and future levels of demand for our services.
Similarly, exchange rates, inflation and interest rates impact the
economies and business environments in which we operate and may
impact levels of demand for our services and cost of inputs and are
therefore inherent in all forward-looking statements. 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 stability of our supply
chain; the effects of inflation and foreign exchange rates on
labour and material costs; the effects of interest rates on
borrowing costs; the impact of weather; the timing and closing of
acquisitions, dispositions and other transactions and the
realization of anticipated benefits therefrom; and customer,
government, court and regulatory approvals on construction and
in-service schedules.
Enbridge's forward-looking statements are subject to risks
and uncertainties pertaining to the successful execution of our
strategic priorities; operating performance; regulatory parameters;
litigation; acquisitions and dispositions and other transactions,
and the realization of anticipated benefits therefrom; project
approval and support; renewals of rights-of-way; weather; economic
and competitive conditions; global geopolitical conditions;
political decisions; public opinion; dividend policy; changes in
tax laws and tax rates; exchange rates; interest rates; inflation;
commodity prices; and supply of and demand for commodities,
including but not limited to those risks and uncertainties
discussed in this news release and in Enbridge's other filings with
Canadian and U.S. securities regulators. The impact of any one
assumption, risk, uncertainty or factor on a particular
forward-looking statement is not determinable with certainty, as
these are interdependent and our 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 statement 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 us or persons acting on our behalf, are expressly
qualified in their entirety by these cautionary statements.
ABOUT ENBRIDGE INC.
At Enbridge, we safely connect
millions of people to the energy they rely on every day, fueling
quality of life through our North American natural gas, oil or
renewable power networks and our growing European offshore wind
portfolio. We're investing in modern energy delivery infrastructure
to sustain access to secure, affordable energy and building on two
decades of experience in renewable energy to advance new
technologies including wind and solar power, hydrogen, renewable
natural gas and carbon capture and storage. We're committed to
reducing the carbon footprint of the energy we deliver, and to
achieving net zero greenhouse gas emissions by 2050. Headquartered
in Calgary, Alberta, Enbridge's
common shares trade under the symbol ENB on the Toronto (TSX) and New York (NYSE) stock exchanges. To learn
more, visit us at enbridge.com
None of the information contained in, or connected to,
Enbridge's website is incorporated in or otherwise forms part of
this news release.
FOR FURTHER
INFORMATION PLEASE CONTACT:
|
|
|
Enbridge Inc. –
Media
|
|
Enbridge Inc. –
Investment Community
|
Jesse Semko
|
|
Rebecca
Morley
|
Toll Free: (888)
992-0997
|
|
Toll Free: (800)
481-2804
|
Email:
media@enbridge.com
|
|
Email:
investor.relations@enbridge.com
|
NON-GAAP RECONCILIATIONS APPENDICES
This news release contains references to EBITDA, adjusted
EBITDA, adjusted earnings, adjusted earnings per common share and
DCF. Management believes the presentation of these metrics gives
useful information to investors and shareholders, as they provide
increased transparency and insight into the performance of the
Company.
EBITDA represents earnings before interest, tax,
depreciation and amortization.
Adjusted EBITDA represents EBITDA adjusted for unusual,
infrequent or other non-operating factors on both a consolidated
and segmented basis. Management uses EBITDA and adjusted EBITDA to
set targets and to assess the performance of the Company and its
business units.
Adjusted earnings represent earnings attributable to common
shareholders adjusted for unusual, infrequent or other
non-operating factors included in adjusted EBITDA, as well as
adjustments for unusual, infrequent or other non-operating factors
in respect of depreciation and amortization expense, interest
expense, income taxes and noncontrolling interests on a
consolidated basis. Management uses adjusted earnings as another
measure of the Company's ability to generate earnings.
DCF is defined as cash flow provided by operating
activities before the impact of changes in operating assets and
liabilities (including changes in environmental liabilities) less
distributions to noncontrolling interests, preference share
dividends and maintenance capital expenditures and further adjusted
for unusual, infrequent or other non-operating factors. Management
also uses DCF to assess the performance of the Company and to set
its dividend payout target.
This news release also contains references to Debt-to-EBITDA, a
non-GAAP ratio which utilizes adjusted EBITDA as one of its
components. Debt-to-EBITDA is used as a liquidity measure to
indicate the amount of adjusted earnings to pay debt, as calculated
on the basis of generally accepted accounting principles in
the United States of America (U.S.
GAAP), before covering interest, tax, depreciation and
amortization.
Reconciliations of forward-looking non-GAAP financial measures
and non-GAAP ratios to comparable
GAAP measures are not available due to the challenges and
impracticability of estimating certain items, particularly certain
contingent liabilities and non-cash unrealized derivative fair
value losses and gains subject to market variability. Because of
those challenges, a reconciliation of forward-looking non-GAAP
financial measures and non-GAAP ratios is not available without
unreasonable effort.
Our non-GAAP financial measures and non-GAAP ratios described
above are not measures that have standardized meaning prescribed by
U.S. GAAP and are not U.S. GAAP measures. Therefore, these measures
may not be comparable with similar measures presented by other
issuers.
The tables below provide a reconciliation of the non-GAAP
measures to comparable GAAP measures.
APPENDIX A
NON-GAAP RECONCILIATIONS – ADJUSTED
EBITDA AND ADJUSTED EARNINGS
CONSOLIDATED EARNINGS
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Liquids
Pipelines
|
2,451
|
1,818
|
|
4,814
|
4,147
|
Gas Transmission and
Midstream
|
1,042
|
1,119
|
|
2,247
|
2,133
|
Gas Distribution and
Storage
|
367
|
417
|
|
1,083
|
1,082
|
Renewable Power
Generation
|
129
|
122
|
|
265
|
284
|
Energy
Services
|
22
|
(177)
|
|
23
|
(278)
|
Eliminations and
Other
|
529
|
(704)
|
|
535
|
(349)
|
EBITDA
|
4,540
|
2,595
|
|
8,967
|
7,019
|
Depreciation and
amortization
|
(1,137)
|
(1,064)
|
|
(2,283)
|
(2,119)
|
Interest
expense
|
(883)
|
(791)
|
|
(1,788)
|
(1,510)
|
Income tax
expense
|
(519)
|
(133)
|
|
(1,029)
|
(726)
|
Earnings attributable
to noncontrolling interests
|
(66)
|
(12)
|
|
(115)
|
(40)
|
Preference share
dividends
|
(87)
|
(145)
|
|
(171)
|
(247)
|
Earnings
attributable to common shareholders
|
1,848
|
450
|
|
3,581
|
2,377
|
ADJUSTED EBITDA TO ADJUSTED EARNINGS
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
(unaudited; millions
of Canadian dollars, except per share amounts)
|
|
|
|
|
|
Liquids
Pipelines
|
2,471
|
2,095
|
|
4,825
|
4,312
|
Gas Transmission and
Midstream
|
1,033
|
1,084
|
|
2,222
|
2,142
|
Gas Distribution and
Storage
|
367
|
422
|
|
1,083
|
1,096
|
Renewable Power
Generation
|
132
|
127
|
|
271
|
287
|
Energy
Services
|
(30)
|
(99)
|
|
(36)
|
(170)
|
Eliminations and
Other
|
35
|
86
|
|
111
|
195
|
Adjusted
EBITDA
|
4,008
|
3,715
|
|
8,476
|
7,862
|
Depreciation and
amortization
|
(1,172)
|
(1,103)
|
|
(2,354)
|
(2,168)
|
Interest
expense
|
(928)
|
(776)
|
|
(1,843)
|
(1,498)
|
Income tax
expense
|
(376)
|
(388)
|
|
(889)
|
(914)
|
Earnings attributable
to noncontrolling interests
|
(65)
|
(11)
|
|
(113)
|
(38)
|
Preference share
dividends
|
(87)
|
(87)
|
|
(171)
|
(189)
|
Adjusted
earnings
|
1,380
|
1,350
|
|
3,106
|
3,055
|
Adjusted earnings
per common share
|
0.68
|
0.67
|
|
1.53
|
1.51
|
EBITDA TO ADJUSTED EARNINGS
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
(unaudited; millions
of Canadian dollars, except per share amounts)
|
|
|
|
|
|
EBITDA
|
4,540
|
2,595
|
|
8,967
|
7,019
|
Adjusting
items:
|
|
|
|
|
|
Change in unrealized
derivative fair value (gain)/loss - Foreign exchange
|
(504)
|
850
|
|
(1,036)
|
417
|
Change in unrealized
derivative fair value (gain)/loss - Commodity prices
|
(45)
|
16
|
|
(53)
|
36
|
CTS Realized hedge
loss
|
—
|
—
|
|
638
|
—
|
Litigation settlement
gain
|
—
|
—
|
|
(68)
|
—
|
Equity earnings
adjustment - DCP Midstream, LLC
|
—
|
(36)
|
|
(8)
|
26
|
Net inventory
adjustment
|
(7)
|
62
|
|
(6)
|
72
|
Assets
impairment
|
—
|
47
|
|
—
|
91
|
Insurance strategy
restructuring expenses
|
—
|
100
|
|
—
|
100
|
Other
|
24
|
81
|
|
42
|
101
|
Total adjusting
items
|
(532)
|
1,120
|
|
(491)
|
843
|
Adjusted
EBITDA
|
4,008
|
3,715
|
|
8,476
|
7,862
|
Depreciation and
amortization
|
(1,137)
|
(1,064)
|
|
(2,283)
|
(2,119)
|
Interest
expense
|
(883)
|
(791)
|
|
(1,788)
|
(1,510)
|
Income tax
expense
|
(519)
|
(132)
|
|
(1,029)
|
(725)
|
Earnings attributable
to noncontrolling interests
|
(66)
|
(12)
|
|
(115)
|
(40)
|
Preference share
dividends
|
(87)
|
(145)
|
|
(171)
|
(247)
|
Adjusting items in
respect of:
|
|
|
|
|
|
Depreciation and
amortization
|
(35)
|
(39)
|
|
(71)
|
(49)
|
Interest
expense
|
(45)
|
15
|
|
(55)
|
12
|
Income tax
expense
|
143
|
(256)
|
|
140
|
(189)
|
Earnings attributable
to noncontrolling interests
|
1
|
1
|
|
2
|
2
|
Preference share
dividends
|
—
|
58
|
|
—
|
58
|
Adjusted
earnings
|
1,380
|
1,350
|
|
3,106
|
3,055
|
Adjusted earnings
per common share
|
0.68
|
0.67
|
|
1.53
|
1.51
|
APPENDIX B
NON-GAAP RECONCILIATION – ADJUSTED
EBITDA TO SEGMENTED EBITDA
LIQUIDS PIPELINES
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Adjusted
EBITDA
|
2,471
|
2,095
|
|
4,825
|
4,312
|
Change in unrealized
derivative fair value gain/(loss) - Foreign exchange
|
17
|
(196)
|
|
630
|
(74)
|
CTS Realized hedge
loss
|
—
|
—
|
|
(638)
|
—
|
Assets
impairment
|
—
|
(47)
|
|
—
|
(47)
|
Litigation settlement
gain
|
—
|
—
|
|
68
|
—
|
Other
|
(37)
|
(34)
|
|
(71)
|
(44)
|
Total
adjustments
|
(20)
|
(277)
|
|
(11)
|
(165)
|
EBITDA
|
2,451
|
1,818
|
|
4,814
|
4,147
|
GAS TRANSMISSION AND MIDSTREAM
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Adjusted
EBITDA
|
1,033
|
1,084
|
|
2,222
|
2,142
|
Equity earnings
adjustment - DCP Midstream, LLC
|
—
|
36
|
|
8
|
(26)
|
Other
|
9
|
(1)
|
|
17
|
17
|
Total
adjustments
|
9
|
35
|
|
25
|
(9)
|
EBITDA
|
1,042
|
1,119
|
|
2,247
|
2,133
|
GAS DISTRIBUTION AND STORAGE
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Adjusted
EBITDA
|
367
|
422
|
|
1,083
|
1,096
|
Other
|
—
|
(5)
|
|
—
|
(14)
|
Total
adjustments
|
—
|
(5)
|
|
—
|
(14)
|
EBITDA
|
367
|
417
|
|
1,083
|
1,082
|
RENEWABLE POWER GENERATION
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Adjusted
EBITDA
|
132
|
127
|
|
271
|
287
|
Change in unrealized
derivative fair value gain - Foreign exchange
|
2
|
2
|
|
4
|
4
|
Other
|
(5)
|
(7)
|
|
(10)
|
(7)
|
Total
adjustments
|
(3)
|
(5)
|
|
(6)
|
(3)
|
EBITDA
|
129
|
122
|
|
265
|
284
|
ENERGY SERVICES
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Adjusted
EBITDA
|
(30)
|
(99)
|
|
(36)
|
(170)
|
Change in unrealized
derivative fair value gain/(loss) - Commodity prices
|
45
|
(16)
|
|
53
|
(36)
|
Net inventory
adjustment
|
7
|
(62)
|
|
6
|
(72)
|
Total
adjustments
|
52
|
(78)
|
|
59
|
(108)
|
EBITDA
|
22
|
(177)
|
|
23
|
(278)
|
ELIMINATIONS AND OTHER
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Adjusted
EBITDA
|
35
|
86
|
|
111
|
195
|
Change in unrealized
derivative fair value gain/(loss) - Foreign exchange
|
485
|
(656)
|
|
402
|
(347)
|
Impairment of lease
assets
|
—
|
—
|
|
—
|
(44)
|
Insurance strategy
restructuring expenses
|
—
|
(100)
|
|
—
|
(100)
|
Other
|
9
|
(34)
|
|
22
|
(53)
|
Total
adjustments
|
494
|
(790)
|
|
424
|
(544)
|
EBITDA
|
529
|
(704)
|
|
535
|
(349)
|
APPENDIX C
NON-GAAP RECONCILIATION – CASH PROVIDED BY
OPERATING ACTIVITIES TO DCF
|
Three months
ended
June 30,
|
|
Six months ended
June 30,
|
|
2023
|
2022
|
|
2023
|
2022
|
(unaudited; millions
of Canadian dollars)
|
|
|
|
|
|
Cash provided by
operating activities
|
3,439
|
2,534
|
|
7,305
|
5,473
|
Adjusted for changes in
operating assets and liabilities1
|
(314)
|
(39)
|
|
(1,228)
|
138
|
|
3,125
|
2,495
|
|
6,077
|
5,611
|
Distributions to
noncontrolling interests2
|
(103)
|
(64)
|
|
(195)
|
(124)
|
Preference share
dividends2
|
(86)
|
(82)
|
|
(170)
|
(173)
|
Maintenance
capital3
|
(226)
|
(147)
|
|
(399)
|
(251)
|
Significant adjusting
items:
|
|
|
|
|
|
Other receipts of cash
not recognized in revenue4
|
40
|
84
|
|
123
|
125
|
Distributions from
equity investments in excess of cumulative
earnings2
|
40
|
143
|
|
195
|
326
|
CTS Realized hedge
loss, net of tax
|
—
|
—
|
|
479
|
—
|
Litigation settlement
gain
|
—
|
—
|
|
(68)
|
—
|
Enterprise insurance
strategy restructuring expenses
|
—
|
100
|
|
—
|
100
|
Other items
|
(7)
|
218
|
|
(79)
|
205
|
DCF
|
2,783
|
2,747
|
|
5,963
|
5,819
|
1
|
Changes in operating
assets and liabilities, net of recoveries.
|
2
|
Presented net of
adjusting items.
|
3
|
Maintenance capital
includes expenditures that are required for the ongoing support and
maintenance of the existing pipeline system or that are necessary
to maintain the service capability of the existing assets
(including the replacement of components that are worn, obsolete or
completing their useful lives). For the purpose of DCF, maintenance
capital excludes expenditures that extend asset useful lives,
increase capacities from existing levels or reduce costs to enhance
revenues or provide enhancements to the service capability of the
existing assets.
|
4
|
Consists of cash
received, net of revenue recognized, for contracts under make-up
rights and similar deferred revenue arrangements.
|
View original
content:https://www.prnewswire.com/news-releases/enbridge-reports-strong-second-quarter-2023-financial-results-and-reaffirms-financial-guidance-and-outlook-301893329.html
SOURCE Enbridge Inc.