Enbridge : (235 KB)

ENBRIDGE INC.

CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

March 31, 2024

ENBRIDGE INC.

CONSOLIDATED STATEMENTS OF EARNINGS

	Three months ended
	March 31,
	2024	2023
(unaudited; millions of Canadian dollars, except per share amounts)
Operating revenues
Commodity sales	4,145	4,783
Gas distribution sales	1,699	2,279
Transportation and other services	5,194	5,013
Total operating revenues (Note 3)	11,038	12,075
Operating expenses
Commodity costs	4,006	4,636
Gas distribution costs	994	1,594
Operating and administrative	2,134	2,037
Depreciation and amortization	1,193	1,146
Total operating expenses	8,327	9,413
Operating income	2,711	2,662
Income from equity investments	696	517
Other income/(expense) (Note 11)	(551)	102
Interest expense	(905)	(905)
Earnings before income taxes	1,951	2,376
Income tax expense	(386)	(510)
Earnings	1,565	1,866
Earnings attributable to noncontrolling interests	(53)	(49)
Earnings attributable to controlling interests	1,512	1,817
Preference share dividends	(93)	(84)
Earnings attributable to common shareholders	1,419	1,733
Earnings per common share attributable to common shareholders (Note 5)	0.67	0.86
Diluted earnings per common share attributable to common shareholders (Note 5)	0.67	0.85

The accompanying notes are an integral part of these interim consolidated financial statements.

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ENBRIDGE INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three months ended
	March 31,
	2024	2023
(unaudited; millions of Canadian dollars)
Earnings	1,565	1,866
Other comprehensive income/(loss), net of tax
Change in unrealized gain/(loss) on cash flow hedges	116	(45)
Change in unrealized gain/(loss) on net investment hedges	(377)	15
Other comprehensive loss from equity investees	(1)	-
Excluded components of fair value hedges	4	7
Reclassification to earnings of loss on cash flow hedges	-	7
Reclassification to earnings of pension and other postretirement benefits	(4)	(4)
(OPEB) amounts
Foreign currency translation adjustments	1,658	(59)
Other comprehensive income/(loss), net of tax	1,396	(79)
Comprehensive income	2,961	1,787
Comprehensive income attributable to noncontrolling interests	(88)	(64)
Comprehensive income attributable to controlling interests	2,873	1,723
Preference share dividends	(93)	(84)
Comprehensive income attributable to common shareholders	2,780	1,639

The accompanying notes are an integral part of these interim consolidated financial statements.

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ENBRIDGE INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

	Three months ended
	March 31,
	2024	2023
(unaudited; millions of Canadian dollars, except per share amounts)
Preference shares
Balance at beginning and end of period	6,818	6,818
Common shares
Balance at beginning of period	69,180	64,760
Shares issued on exercise of stock options	4	2
Shares issued on vesting of restricted stock units (RSU), net of tax	17	12
Balance at end of period	69,201	64,774
Additional paid-in capital
Balance at beginning of period	268	275
Stock-based compensation	32	20
Stock options exercised	(4)	(1)
Vested RSUs	(22)	(20)
Balance at end of period	274	274
Deficit
Balance at beginning of period	(17,115)	(15,486)
Earnings attributable to controlling interests	1,512	1,817
Preference share dividends	(93)	(84)
Balance at end of period	(15,696)	(13,753)
Accumulated other comprehensive income/(loss) (Note 8)
Balance at beginning of period	2,303	3,520
Other comprehensive income attributable to common shareholders, net of tax	1,361	(94)
Balance at end of period	3,664	3,426
Total Enbridge Inc. shareholders' equity	64,261	61,539
Noncontrolling interests
Balance at beginning of period	3,029	3,511
Earnings attributable to noncontrolling interests	53	49
Other comprehensive income/(loss) attributable to noncontrolling interests, net of tax
Change in unrealized gain on cash flow hedges	6	17
Foreign currency translation adjustments	29	(2)
	35	15
Comprehensive income attributable to noncontrolling interests	88	64
Distributions	(78)	(92)
Contributions	2	4
Other	1	(1)
Balance at end of period	3,042	3,486
Total equity	67,303	65,025
Dividends paid per common share	0.92	0.89

The accompanying notes are an integral part of these interim consolidated financial statements.

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ENBRIDGE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three months ended
	March 31,
	2024	2023
(unaudited; millions of Canadian dollars)
Operating activities
Earnings	1,565	1,866
Adjustments to reconcile earnings to net cash provided by operating activities:
Depreciation and amortization	1,193	1,146
Deferred income tax expense	134	484
Unrealized derivative fair value loss/(gain), net (Note 9)	693	(520)
Income from equity investments	(696)	(517)
Distributions from equity investments	556	453
Other	6	40
Changes in operating assets and liabilities	(300)	914
Net cash provided by operating activities	3,151	3,866
Investing activities
Capital expenditures	(1,185)	(1,129)
Long-term, restricted and other investments	(411)	(413)
Distributions from equity investments in excess of cumulative earnings	266	100
Additions to intangible assets	(42)	(66)
Acquisitions	(6,397)	-
Net change in affiliate loans	-	71
Other	(23)	-
Net cash used in investing activities	(7,792)	(1,437)
Financing activities
Net change in short-term borrowings	(65)	(559)
Net change in commercial paper and credit facility draws	5,828	(2,921)
Debenture and term note issues, net of issue costs	-	4,111
Debenture and term note repayments	(3,781)	(968)
Contributions from noncontrolling interests	2	4
Distributions to noncontrolling interests	(78)	(92)
Preference share dividends	(93)	(84)
Common share dividends	(1,945)	(1,798)
Net change in affiliate loans	14	51
Other	(2)	(33)
Net cash used in financing activities	(120)	(2,289)
Effect of translation of foreign denominated cash and cash equivalents and	161	4
restricted cash
Net change in cash and cash equivalents and restricted cash	(4,600)	144
Cash and cash equivalents and restricted cash at beginning of period	5,985	907
Cash and cash equivalents and restricted cash at end of period	1,385	1,051

The accompanying notes are an integral part of these interim consolidated financial statements.

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ENBRIDGE INC.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

	March 31,	December 31,
	2024	2023
(unaudited; millions of Canadian dollars; number of shares in millions)
Assets
Current assets
Cash and cash equivalents	1,214	5,901
Restricted cash	171	84
Trade receivables and unbilled revenues	4,916	4,410
Other current assets	2,239	2,440
Accounts receivable from affiliates	89	85
Inventory	1,383	1,479
	10,012	14,399
Property, plant and equipment, net	113,445	104,641
Long-term investments	17,438	16,793
Restricted long-term investments	743	717
Deferred amounts and other assets	9,782	8,041
Intangible assets, net	4,528	3,537
Goodwill	34,294	31,848
Deferred income taxes	471	341
Total assets	190,713	180,317
Liabilities and equity
Current liabilities
Short-term borrowings	335	400
Trade payables and accrued liabilities	3,820	4,308
Other current liabilities	3,748	5,659
Accounts payable to affiliates	20	26
Interest payable	934	958
Current portion of long-term debt	5,861	6,084
	14,718	17,435
Long-term debt	81,386	74,715
Other long-term liabilities	10,619	8,653
Deferred income taxes	16,687	15,031
	123,410	115,834
Contingencies (Note 12)
Equity
Share capital
Preference shares	6,818	6,818
Common shares (2,126 and 2,125 outstanding at March 31, 2024 and	69,201	69,180
December 31, 2023, respectively)
Additional paid-in capital	274	268
Deficit	(15,696)	(17,115)
Accumulated other comprehensive income (Note 8)	3,664	2,303
Total Enbridge Inc. shareholders' equity	64,261	61,454
Noncontrolling interests	3,042	3,029
	67,303	64,483
Total liabilities and equity	190,713	180,317

The accompanying notes are an integral part of these interim consolidated financial statements.

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NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements of Enbridge Inc. ("we", "our", "us" and "Enbridge") have been prepared in accordance with generally accepted accounting principles in the United States of America (US GAAP) and Regulation S-X for interim consolidated financial information.

They do not include all of the information and notes required by US GAAP for annual consolidated financial statements and should therefore be read in conjunction with our audited consolidated financial statements and notes for the year ended December 31, 2023. In the opinion of management, the interim consolidated financial statements contain all normal recurring adjustments necessary to present fairly our financial position, results of operations and cash flows for the interim periods reported. These interim consolidated financial statements follow the same significant accounting policies as those included in our audited consolidated financial statements for the year ended December 31, 2023. Amounts are stated in Canadian dollars unless otherwise noted.

Our operations and earnings for interim periods can be affected by seasonal fluctuations within the gas distribution utility businesses, as well as other factors such as supply of and demand for crude oil and natural gas, and may not be indicative of annual results.

Certain comparative figures in our interim consolidated financial statements have been reclassified to conform to the current year's presentation.

2. CHANGES IN ACCOUNTING POLICIES

FUTURE ACCOUNTING POLICY CHANGES

Segment Reporting

Accounting Standards Update (ASU) 2023-07 was issued in November 2023 to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses and to require in interim period financial statements all disclosures about a reportable segment's profit or loss and assets that are currently required annually. The new ASU requires entities to disclose the title and position of the individual or the name of the group or committee identified as the chief operating decision-maker (CODM) of each segment. ASU 2023-07 is effective January 1, 2024, with interim period disclosure requirements effective after January 1, 2025 and should be applied retrospectively to all prior periods presented in the financial statements. We are currently assessing the impact of the new standard on our interim financial statement disclosures for 2025 and the required annual disclosures will be adopted for the year ending December 31, 2024.

Income Tax Disclosures

ASU 2023-09 was issued in December 2023 to improve income tax disclosures by requiring specified categories in the annual rate reconciliation that meet quantitative thresholds and further disaggregation on income taxes paid by jurisdiction. ASU 2023-09 is effective January 1, 2025 and should be applied prospectively, with retrospective application being permitted. We are currently assessing the impact of the new standard on our consolidated financial statements.

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3. REVENUE

REVENUE FROM CONTRACTS WITH CUSTOMERS

Major Products and Services

			Gas
			Distribution	Renewable
Three months ended	Liquids	Gas	and	Power	Eliminations
March 31, 2024	Pipelines	Transmission	Storage	Generation	and Other	Consolidated
(millions of Canadian dollars)
Transportation revenue	3,024	1,341	351	-	-	4,716
Storage and other revenue	62	138	99	-	-	299
Gas distribution revenue	-	-	1,666	-	-	1,666
Electricity revenue	-	-	-	57	-	57
Commodity sales	-	40	-	-	-	40
Total revenue from contracts with customers	3,086	1,519	2,116	57	-	6,778
Commodity sales	3,733	41	-	-	331	4,105
Other revenue1,2	63	6	13	73	-	155
Intersegment revenue	-	6	2	1	(9)	-
Total revenue	6,882	1,572	2,131	131	322	11,038
			Gas
			Distribution	Renewable
Three months ended	Liquids	Gas	and	Power	Eliminations
March 31, 2023	Pipelines	Transmission	Storage	Generation	and Other	Consolidated
(millions of Canadian dollars)
Transportation revenue	2,942	1,384	276	-	-	4,602
Storage and other revenue	64	95	99	-	-	258
Gas distribution revenue	-	-	2,287	-	-	2,287
Electricity revenue	-	-	-	66	-	66
Total revenue from contracts with customers	3,006	1,479	2,662	66	-	7,213
Commodity sales	4,262	-	-	-	521	4,783
Other revenue1,2	30	11	(40)	78	-	79
Intersegment revenue	-	1	3	-	(4)	-
Total revenue	7,298	1,491	2,625	144	517	12,075

• Includes realized and unrealized gains and losses from our hedging program which for the three months ended March 31, 2024 were a net $22 million loss (2023 - $55 million loss).

• Includes revenues from lease contracts for the three months ended March 31, 2024 and 2023 of $140 million and $144 million, respectively.

We disaggregate revenues into categories which represent our principal performance obligations within each business segment. These revenue categories represent the most significant revenue streams in each segment and consequently are considered to be the most relevant revenue information for management to consider in evaluating performance.

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Contract Balances
	Contract	Contract	Contract
	Receivables	Assets	Liabilities
(millions of Canadian dollars)
Balance as at March 31, 2024	2,962	337	2,537
Balance as at December 31, 2023	2,802	400	2,591

Contract receivables represent the amount of receivables derived from contracts with customers.

Contract assets represent the amount of revenues which has been recognized in advance of payments received for performance obligations we have fulfilled (or have partially fulfilled) and prior to the point in time at which our right to payment is unconditional. Amounts included in contract assets are transferred to accounts receivable when our right to receive the consideration becomes unconditional.

Contract liabilities represent payments received for performance obligations which have not been fulfilled. Contract liabilities primarily relate to make-up rights and deferred revenues. Revenue recognized during the three months ended March 31, 2024 included in contract liabilities at the beginning of the period was $151 million. Increases in contract liabilities from cash received, net of amounts recognized as revenues, during the three months ended March 31, 2024 were $117 million.

Performance Obligations

There were no material revenues recognized in the three months ended March 31, 2024 from performance obligations satisfied in previous periods.

Revenues to be Recognized from Unfulfilled Performance Obligations

Total revenues from performance obligations expected to be fulfilled in future periods is $60.5 billion, of which $6.2 billion and $7.9 billion are expected to be recognized during the remaining nine months ending December 31, 2024 and the year ending December 31, 2025, respectively.

The revenues excluded from the amounts above based on optional exemptions available under Accounting Standards Codification (ASC) 606, as explained below, represent a significant portion of our overall revenues and revenues from contracts with customers. Certain revenues such as flow-through operating costs charged to shippers are recognized at the amount for which we have the right to invoice our customers and are excluded from the amounts for revenues to be recognized in the future from unfulfilled performance obligations above. Variable consideration is excluded from the amounts above due to the uncertainty of the associated consideration, which is generally resolved when actual volumes and prices are determined. For example, we consider interruptible transportation service revenues to be variable revenues since volumes cannot be estimated. Additionally, the effect of escalation on certain tolls which are contractually escalated for inflation has not been reflected in the amounts above as it is not possible to reliably estimate future inflation rates. Revenues for periods extending beyond the current rate settlement term for regulated contracts where the tolls are periodically reset by the regulator are excluded from the amounts above since future tolls remain unknown. Finally, revenues from contracts with customers which have an original expected duration of one year or less are excluded from the amounts above.

Mainline Tolling Agreement

On March 4, 2024, the Canadian Energy Regulator (CER) approved the negotiated Mainline tolling settlement. The new tolls are finalized and were in effect on an interim basis on July 1, 2023, and the overall agreement is retroactively effective as of July 1, 2021.

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Recognition and Measurement of Revenues

			Gas
			Distribution	Renewable
	Liquids	Gas	and	Power
Three months ended March 31, 2024	Pipelines	Transmission	Storage	Generation	Consolidated
(millions of Canadian dollars)
Revenues from products transferred at a point in time	-	40	29	-	69
Revenues from products and services transferred over time1	3,086	1,479	2,087	57	6,709
Total revenue from contracts with customers	3,086	1,519	2,116	57	6,778
			Gas
			Distribution	Renewable
	Liquids	Gas	and	Power
Three months ended March 31, 2023	Pipelines	Transmission	Storage	Generation	Consolidated
(millions of Canadian dollars)
Revenues from products transferred at a point in time	-	-	30	-	30
Revenues from products and services transferred over time1	3,006	1,479	2,632	66	7,183
Total revenue from contracts with customers	3,006	1,479	2,662	66	7,213

• Revenue from crude oil and natural gas pipeline transportation, storage, natural gas gathering, compression and treating, natural gas distribution, natural gas storage services and electricity sales.

4. SEGMENTED INFORMATION

Change in Reportable Segments

Effective January 1, 2024, to better align how the CODM reviews operating performance and resource allocation across operating segments, we transferred our Canadian and United States (US) crude oil marketing businesses from the Energy Services segment to the Liquids Pipelines segment. As a result, the Energy Services segment ceased to exist and the remainder of the business, comprising natural gas and power marketing, are now reported in the Eliminations and Other segment. Beginning in the first quarter of 2024, prior period comparable results for segmented information have been recast to reflect the change in reportable segments. This segment reporting change does not have an impact on our consolidated results.

			Gas	Renewable
Three months ended	Liquids	Gas	Distribution	Power	Eliminations
March 31, 2024	Pipelines	Transmission	and Storage	Generation	and Other1	Consolidated
(millions of Canadian dollars)
Operating revenues (Note 3)	6,882	1,572	2,131	131	322	11,038
Commodity and gas distribution costs	(3,635)	(47)	(1,004)	(3)	(311)	(5,000)
Operating and administrative	(1,107)	(561)	(379)	(69)	(18)	(2,134)
Income/(loss) from equity	253	265	-	181	(3)	696
investments
Other income/(expense) (Note 11)	11	36	17	17	(632)	(551)
Earnings/(loss) before interest,
income taxes and depreciation and	2,404	1,265	765	257	(642)	4,049
amortization
Depreciation and amortization						(1,193)
Interest expense						(905)
Income tax expense						(386)
Earnings						1,565
Capital expenditures2	289	495	304	69	43	1,200

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