Enbridge : Financial Statements and MD&A

ENBRIDGE INC.

CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

June 30, 2021

ENBRIDGE INC.

CONSOLIDATED STATEMENTS OF EARNINGS

	Three months ended	Six months ended
	June 30,			June 30,
	2021		2020		2021	2020
(unaudited; millions of Canadian dollars, except per share amounts)
Operating revenues
Commodity sales	6,334		2,936		12,763	10,325
Transportation and other services	3,877		4,326		8,045	7,534
Gas distribution sales	737		694		2,277	2,110
Total operating revenues (Note 3)	10,948		7,956		23,085	19,969
Operating expenses
Commodity costs	6,430		2,858		12,628	10,021
Gas distribution costs	289		250		1,239	1,105
Operating and administrative	1,484		1,801		3,043	3,401
Depreciation and amortization	929		949		1,861	1,831
Total operating expenses	9,132		5,858		18,771	16,358
Operating income	1,816		2,098		4,314	3,611
Income from equity investments	352		327		747	490
Impairment of equity investments (Note 8)	-		-	-	(1,736)
Other income/(expense)
Net foreign currency gain/(loss)	159		526		311	(430)
Other	82		98		191	(93)
Interest expense	(618)		(681)		(1,275)	(1,387)
Earnings before income taxes	1,791		2,368		4,288	455
Income tax expense (Note 10)	(270)		(591)		(753)	(42)
Earnings	1,521		1,777		3,535	413
Earnings attributable to noncontrolling interests	(37)		(36)		(59)	(5)
Earnings attributable to controlling interests	1,484		1,741		3,476	408
Preference share dividends	(90)		(94)		(182)	(190)
Earnings attributable to common shareholders	1,394		1,647		3,294	218
Earnings per common share attributable to common	0.69		0.82		1.63	0.11
shareholders (Note 5)
Diluted earnings per common share attributable to	0.69		0.82		1.63	0.11
common shareholders (Note 5)

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	Six months ended
	June 30,			June 30,
	2021		2020		2021		2020
(unaudited; millions of Canadian dollars)
Earnings	1,521		1,777		3,535		413
Other comprehensive income/(loss), net of tax
Change in unrealized gain/(loss) on cash flow hedges	(157)		(48)		213		(561)
Change in unrealized gain/(loss) on net investment	129		340		222		(375)
hedges
Other comprehensive income from equity investees	24		30		2		20
Excluded components of fair value hedges	(1)		5		(2)		8
Reclassification to earnings of loss on cash flow	61		48		113		80
hedges
Reclassification to earnings of pension and other	6		4		11		7
postretirement benefits (OPEB) amounts
Foreign currency translation adjustments	(835)		(2,701)		(1,631)		2,936
Other comprehensive income/(loss), net of tax	(773)		(2,322)		(1,072)		2,115
Comprehensive income/(loss)	748		(545)		2,463		2,528
Comprehensive (income)/loss attributable to	(9)		50		(6)		(95)
noncontrolling interests
Comprehensive income/(loss) attributable to controlling	739		(495)		2,457		2,433
interests
Preference share dividends	(90)		(94)		(182)		(190)
Comprehensive income/(loss) attributable to common	649		(589)		2,275		2,243
shareholders

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	Six months ended
	June 30,	June 30,
	2021	2020	2021	2020
(unaudited; millions of Canadian dollars, except per share amounts)
Preference shares
Balance at beginning and end of period	7,747	7,747	7,747	7,747
Common shares
Balance at beginning of period	64,772	64,760	64,768	64,746
Shares issued on exercise of stock options	8	3	12	17
Balance at end of period	64,780	64,763	64,780	64,763
Additional paid-in capital
Balance at beginning of period	324	202	277	187
Stock-based compensation	5	5	16	19
Options exercised	(5)	(2)	(8)	(18)
Change in reciprocal interest	-	-	39	12
Other	-	2	-	7
Balance at end of period	324	207	324	207
Deficit
Balance at beginning of period	(8,093)	(7,808)	(9,995)	(6,314)
Earnings attributable to controlling interests	1,484	1,741	3,476	408
Preference share dividends	(90)	(94)	(182)	(190)
Dividends paid to reciprocal shareholder	2	5	5	10
Common share dividends declared	(1,692)	(1,641)	(1,692)	(1,641)
Modified retrospective adoption of ASU 2016-13 Financial Instruments - Credit	-	-	-	(66)
Losses
Other	1	-	-	(4)
Balance at end of period	(8,388)	(7,797)	(8,388)	(7,797)
Accumulated other comprehensive income/(loss) (Note 7)
Balance at beginning of period	(1,675)	3,989	(1,401)	(272)
Other comprehensive income/(loss) attributable to common shareholders, net of	(745)	(2,236)	(1,019)	2,025
tax
Balance at end of period	(2,420)	1,753	(2,420)	1,753
Reciprocal shareholding
Balance at beginning of period	(17)	(47)	(29)	(51)
Change in reciprocal interest	-	-	12	4
Balance at end of period	(17)	(47)	(17)	(47)
Total Enbridge Inc. shareholders' equity	62,026	66,626	62,026	66,626
Noncontrolling interests
Balance at beginning of period	2,930	3,448	2,996	3,364
Earnings attributable to noncontrolling interests	37	36	59	5
Other comprehensive income/(loss) attributable to noncontrolling interests, net
of tax
Change in unrealized loss on cash flow hedges	(3)	(1)	(6)	(3)
Foreign currency translation adjustments	(25)	(85)	(47)	93
Contributions	6	5	9	20
Distributions	(77)	(88)	(143)	(164)
Other	2	-	2	-
Balance at end of period	2,870	3,315	2,870	3,315
Total equity	64,896	69,941	64,896	69,941
Dividends paid per common share	0.835	0.810	1.670	1.620

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

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ENBRIDGE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six months ended

June 30,

2021 2020

(unaudited; millions of Canadian dollars)
Operating activities
Earnings	3,535	413
Adjustments to reconcile earnings to net cash provided by operating activities:
Depreciation and amortization	1,861	1,831
Deferred income tax expense/(recovery)	647	(223)
Changes in unrealized (gain)/loss on derivative instruments, net (Note 9)	(448)	824
Income from equity investments	(747)	(490)
Distributions from equity investments	737	821
Impairment of equity investments (Note 8)	-	1,736
Gain on disposition	(41)	-
Other	(128)	210
Changes in operating assets and liabilities	(625)	103
Net cash provided by operating activities	4,791	5,225
Investing activities
Capital expenditures	(3,463)	(2,352)
Long-term investments and restricted long-term investments	(155)	(335)
Distributions from equity investments in excess of cumulative earnings	246	253
Additions to intangible assets	(118)	(104)
Proceeds from disposition	122	245
Affiliate loans, net	29	27
Net cash used in investing activities	(3,339)	(2,266)
Financing activities
Net change in short-term borrowings	289	(543)
Net change in commercial paper and credit facility draws	739	854
Debenture and term note issues, net of issue costs	3,247	3,479
Debenture and term note repayments	(1,888)	(3,268)
Contributions from noncontrolling interests	9	20
Distributions to noncontrolling interests	(143)	(164)
Common shares issued	3	3
Preference share dividends	(182)	(190)
Common share dividends	(3,382)	(3,280)
Redemption of preferred shares held by subsidiary	(115)	-
Other	(40)	(35)
Net cash used in financing activities	(1,463)	(3,124)
Effect of translation of foreign denominated cash and cash equivalents and	(20)	(14)
restricted cash
Net decrease in cash and cash equivalents and restricted cash	(31)	(179)
Cash and cash equivalents and restricted cash at beginning of period	490	676
Cash and cash equivalents and restricted cash at end of period	459	497

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

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