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" section of this news release.)
- Full year GAAP earnings of
$5.8 billion or$2.87 per common share, compared with GAAP earnings of$3.0 billion or$1.48 per common share in 2020 - Adjusted earnings* of
$5.6 billion or$2.74 per common share*, compared with$4.9 billion or$2.42 per common share* in 2020 - Adjusted earnings before interest, income taxes and depreciation and amortization (EBITDA)* of
$14.0 billion , compared with$13.3 billion in 2020 - Cash provided by operating activities of
$9.3 billion , compared with$9.8 billion in 2020 - Distributable cash flow (DCF)* of
$10.0 billion or$4.96 per common share*, compared with$9.4 billion or$4.67 per common share* in 2020 - Reaffirmed 2022 full year guidance range for EBITDA of
$15.0 billion to$15.6 billion and DCF per share of$5.20 to$5.50 - Increased the 2022 quarterly dividend by 3% to
$0.86 ($3.44 annually) per share reflecting the 27th consecutive annual increase - Placed approximately
$10 billion of capital projects into service in 2021, which is expected to generate significant EBITDA growth in 2022 - Advanced the current
$10 billion secured growth program, which supports the Company's 5 to 7% DCF per share growth through 2024 - Successfully closed the previously announced
US$3.0 billion acquisition ofModa Midstream Operating LLC including the Ingleside Energy Center - Announced
US$0.4 billion Texas Eastern Phase II Modernization program to upgrade and electrify aging compressors increasing safety and reliability and lowering emissions - Announced
US$0.1 billion Appalachia to Market Phase II system expansion, expanding natural gas supply into theU.S. Northeast to meet growing local demand - Executed pipeline transportation precedent agreement with
Texas LNG Brownsville LLC for aUS$0.4 billion expansion of the Valley Crossing Pipeline to supply its LNG export terminal - Entered into a Memorandum of Understanding with
Lehigh Cement and announced Letters of Intent with local Indigenous Nations to develop the Open Access Wabamun Carbon Hub - Advanced ESG priorities by executing on emissions reduction pathways and increasing the diversity of
Enbridge's leadership and Board of Directors - Announced additional measures to further align the business with our net-zero emissions goals
- Completed the previously announced
$1.1 billion sale ofEnbridge's interest inNoverco Inc. (Noverco ), providing for additional financial flexibility - Announced the approval by the
Toronto Stock Exchange (TSX) ofEnbridge's normal course issuer bid (NCIB) of up to$1.5 billion - Issued
$750 million of 60-year hybrid debt in the Canadian debt markets with proceeds to be used to redeem the$750 million Enbridge Inc. Preferred Shares - Series 17
CEO COMMENT
"The last year has once again demonstrated the importance of reliable and affordable energy to the world's social and economic well-being. While it's clear we need to reduce global emissions to achieve our climate objectives, it's also important that we transition our energy systems prudently by ensuring adequate supply of conventional energy, while increasing lower-carbon forms of energy. That approach is driving our strategies at
"2021 was a pivotal year for
"Operationally, each of our businesses performed well, driven by a rebound in the global economy, customer demand, and the critical role our assets play in delivering essential energy supply. We placed
"Financially, we achieved solid results, near the top of our DCF per share guidance range for the year. And, we sold
"We also advanced our strategic priorities and added
"In Liquids Pipelines, we closed the acquisition of the Ingleside Energy Center,
"We're also executing on our carbon capture strategy. For example, our recently announced partnerships and collaboration with Capital Power,
"In Gas Transmission, we placed our Cameron Extension project into service supplying the Calcasieu Pass LNG facility, and our agreement to serve Texas LNG further extends our
"At our Utility, we added more than 40 thousand natural gas customers last year, and continued to develop new low-carbon projects that fit well within our low-risk commercial model and lower emissions for our customers. We now have seven renewable natural gas projects operating or under construction with a healthy backlog of new projects in development. Our new hydrogen blending facility in
"In Renewables, construction of four offshore wind projects off the coast of
"Throughout 2021, we accelerated our leadership in all aspects of environmental, social and governance performance. We've embedded our goals into our business and capital allocation framework, and aligned those plans with enterprise-wide compensation. On our diversity and inclusion goals, we've added diversity at all levels of the organization, including the Board of Directors. We're also making good progress towards our medium and long-term emissions goals across our operations. And, we've added new Scope 3 metrics to track the emissions intensity of the energy we deliver and our contribution to reducing global emissions through demand-side management programs and our growing renewable and low-carbon investments. Our demand-side management programs at the utility, for example, have helped our customers avoid 55 million tonnes of greenhouse gas emissions over the last 26 years.
"As our shareholders and other stakeholders know, we are committed to leadership in sustainably delivering affordable, reliable and secure energy to millions of people in
"These measures include ensuring that investment decision making reflects our interim and long-term targets, working with our supply chain to lower Scope 3 emissions, and developing lower carbon partnerships to drive innovation across our businesses. We will also continue to work proactively with the organizations developing science-based guidelines for emissions targets in the midstream sector, and in May, our 21st annual sustainability report will include scenario analysis based on a net-zero emissions pathway.
"In 2022, we're positioned to grow EBITDA and DCF per share by over 8%. Execution of our secured growth program and embedded growth supports our 5-7% distributable cash flow per share compound annual growth from 2021 to 2024. This visible cash flow growth outlook and a healthy balance sheet supports our 27th consecutive annual dividend increase, reinforcing the importance we place on returning capital as part of our shareholder value proposition.
"Looking forward to our 3-year planning horizon, we expect to have
"The strong demand for our system capacity and execution on our secured capital continues to drive stable and growing cash flows. As we look to the future, embedded conventional and low-carbon organic growth opportunities across our assets, along with our disciplined approach to investment, provides a compelling growth outlook and value proposition for our shareholders."
FINANCIAL RESULTS SUMMARY
Financial results for the three months and year ended
Three months ended | Year ended | ||||
2021 | 2020 | 2021 | 2020 | ||
(unaudited; millions of Canadian dollars, except per share amounts; | |||||
GAAP Earnings attributable to common shareholders | 1,840 | 1,775 | 5,816 | 2,983 | |
GAAP Earnings per common share | 0.91 | 0.88 | 2.87 | 1.48 | |
Cash provided by operating activities | 2,302 | 2,254 | 9,256 | 9,781 | |
Adjusted EBITDA1 | 3,687 | 3,201 | 14,001 | 13,273 | |
Adjusted Earnings1 | 1,376 | 1,132 | 5,551 | 4,894 | |
Adjusted Earnings per common share1 | 0.68 | 0.56 | 2.74 | 2.42 | |
Distributable Cash Flow1 | 2,487 | 2,209 | 10,041 | 9,440 | |
Weighted average common shares outstanding | 2,024 | 2,022 | 2,023 | 2,020 |
1 Non-GAAP financial measures. Please refer to "Non-GAAP Reconciliations Appendices" section of this news release. |
GAAP earnings attributable to common shareholders for the fourth quarter of 2021 increased by
On a full year basis, GAAP earnings attributable to common shareholders for 2021 increased by
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 annual Management Discussion & Analysis for 2021 filed in conjunction with the year-end financial statements for a detailed discussion of GAAP financial results.
Adjusted earnings in the fourth quarter of 2021 increased by
Full year adjusted earnings for 2021 increased by
Adjusted EBITDA in the fourth quarter of 2021 increased by $486 million compared with the same period in 2020. This is primarily driven by contributions from the
Full year adjusted EBITDA for 2021 increased by $728 million compared with the same period in 2020. This is primarily driven by the same factors discussed above and partially offset by weaker contributions from Energy Services. The average CAD to USD exchange rate in 2021 fell approximately 7% to
DCF for the fourth quarter was
DCF for the year ended
In addition to the items discussed above, adjusted EBITDA, adjusted earnings and DCF were each impacted by the recognition of a provision in the fourth quarter against the interim Mainline International Joint Toll (IJT) for barrels shipped
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 is currently rated BBB+, or equivalent, by all four of its credit rating agencies, reflecting
In
FINANCIAL OUTLOOK
The Company reaffirms its 2022 financial guidance, announced in December, which included adjusted EBITDA between
Growth in 2022 is anticipated to be driven by an increase in Mainline volumes, which are expected to average 2.95 million barrels per day (mmbpd), full year contributions from projects placed into service during 2021, including the Line 3
SECURED GROWTH PROJECT EXECUTION UPDATE
In 2021,
- the
US$4.0 billion U.S. segment of the Line 3Replacement Project and associatedUS$0.5 billion Southern Access Expansion to 1.2 mmbpd; - the
US$0.1 billion 90 thousand barrel per day (kbpd) expansion of Flanagan South; - the
$1.0 billion T-South Reliability and Expansion Program and the$0.4 billion Spruce Ridge Project , which increased capacity on the B.C. Pipeline; - Gas Transmission's
US$1.0 billion 2021 Modernization Program; - the
US$0.1 billion Cameron Extension along theU.S. Gulf Coast providing natural gas to service Calcasieu Pass LNG; - the combined
US$0.1 billion Appalachia to Market and Middlesex Extension projects, which support reliable natural gas supply into theU.S. Northeast; and - Gas Distribution's
$0.9 billion 2021 Utility Growth capital.
In the fourth quarter,
Today,
The Company also announced the
Inclusive of newly sanctioned capital, the Company's current secured growth program is approximately
OTHER BUSINESS UPDATES
On
The Company is currently advancing two potential commercial frameworks for the Mainline in parallel: i) a new incentive rate-making agreement that may be similar to the Competitive Toll Settlement (CTS) agreement that expired on
Either framework is anticipated to provide attractive risk-adjusted returns for operating the Canadian Mainline and the range of financial outcomes is not expected to materially impact
As per the terms of the CTS,
Carbon Capture and Storage (CCS)
The MoU with Lehigh combined with the previously announced MoU with Capital Power Corporation (Capital Power) announced on
Additionally, on
Normal Course Issuer Bid
On
Share repurchases made pursuant to the Company's NCIB will be predicated upon maintaining a strong balance sheet, strong business performance, and the availability and attractiveness of alternative capital investment opportunities.
The NCIB implementation provides flexibility to repurchase our common shares and creates an additional avenue to supplement the return of capital to shareholders, while increasing per share earnings and distributable cash flow.
ESG LEADERSHIP UPDATE
The Company has integrated its ESG goals into enterprise-wide incentive compensation and
Through 2021, the Company estimates that GHG emissions intensity is approximately 21% lower than its 2018 baseline and progressing towards its 2030 goal. Additionally, in 2021 the Company expanded emissions reporting to include new metrics designed to measure the emissions intensity of the energy delivered and the emissions avoided through over two decades of investment in renewables, low-carbon fuels and demand side management programs.
- ensure that investment decisions align with
Enbridge's interim and long-term emissions reduction goals; - continue to work proactively with the organizations developing science-based guidelines for emissions targets in the midstream sector;
- work with key suppliers to support the further reduction of Scope 3 emissions;
- update TCFD disclosures in the Company's 21st annual sustainability report to include scenario analysis based on a net-zero emissions pathway; and
- further develop low-carbon energy partnerships to drive innovation across our business, with a focus on renewable power, renewable natural gas, hydrogen and carbon capture.
FOURTH QUARTER AND YEAR-END 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 fourth quarter and full year of 2021.
GAAP SEGMENT EBITDA AND CASH FLOW FROM OPERATIONS
Three months ended | Year ended | ||||
2021 | 2020 | 2021 | 2020 | ||
(unaudited; millions of Canadian dollars) | |||||
Liquids Pipelines | 2,141 | 2,403 | 7,897 | 7,683 | |
Gas Transmission and Midstream | 946 | 857 | 3,671 | 1,087 | |
Gas Distribution and Storage | 743 | 463 | 2,117 | 1,748 | |
146 | 147 | 508 | 523 | ||
Energy Services | 66 | (224) | (313) | (236) | |
Eliminations and Other | 165 | 385 | 356 | (113) | |
EBITDA1 | 4,207 | 4,031 | 14,236 | 10,692 | |
Earnings attributable to common shareholders | 1,840 | 1,775 | 5,816 | 2,983 | |
Cash provided by operating activities | 2,302 | 2,254 | 9,256 | 9,781 |
1 Non-GAAP financial measure. Please refer to "Non-GAAP Reconciliations Appendices" section of this news release. |
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 | Year ended | ||||
2021 | 2020 | 2021 | 2020 | ||
(unaudited; millions of Canadian dollars, except per share amounts) | |||||
Liquids Pipelines | 2,108 | 1,787 | 7,731 | 7,182 | |
Gas Transmission and Midstream | 922 | 878 | 3,850 | 3,895 | |
Gas Distribution and Storage | 450 | 492 | 1,853 | 1,822 | |
140 | 146 | 496 | 507 | ||
Energy Services | (83) | (82) | (360) | (119) | |
Eliminations and Other | 150 | (20) | 431 | (14) | |
Adjusted EBITDA1,3 | 3,687 | 3,201 | 14,001 | 13,273 | |
Maintenance capital | (274) | (320) | (686) | (915) | |
Interest expense1 | (747) | (705) | (2,724) | (2,846) | |
Current income tax1 | (142) | (17) | (352) | (342) | |
Distributions to noncontrolling interests | (64) | (68) | (271) | (300) | |
Cash distributions in excess of equity earnings1 | 65 | 170 | 313 | 649 | |
Preference share dividends | (93) | (96) | (367) | (380) | |
Other receipts of cash not recognized in revenue2 | 53 | 42 | 127 | 292 | |
Other non-cash adjustments | 2 | 2 | — | 9 | |
DCF3 | 2,487 | 2,209 | 10,041 | 9,440 | |
Weighted average common shares outstanding | 2,024 | 2,022 | 2,023 | 2,020 |
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" section of this news release. |
Fourth quarter 2021 DCF increased
- lower Gas Distribution and Storage maintenance capital related to timing of spend; partially offset by,
- higher current income tax due to higher earnings and the timing of recognition of
U.S. minimum taxes; - higher interest expense due to lower capitalized interest associated with the
U.S. portion of the Line 3Replacement Project placed into service in the fourth quarter of 2021; and, - lower cash distributions in excess of equity earnings primarily as a result of higher equity earnings (reflected in Adjusted EBITDA) at certain equity investments that have not experienced higher corresponding cash distributions in the quarter.
Full year 2021 DCF increased
ADJUSTED EARNINGS
Three months ended | Year ended | ||||
2021 | 2020 | 2021 | 2020 | ||
(unaudited; millions of Canadian dollars, except per share amounts) | |||||
Adjusted EBITDA1 | 3,687 | 3,201 | 14,001 | 13,273 | |
Depreciation and amortization | (1,047) | (946) | (3,852) | (3,712) | |
Interest expense2 | (734) | (694) | (2,675) | (2,793) | |
Income taxes2 | (406) | (304) | (1,429) | (1,437) | |
Noncontrolling interests2 | (31) | (29) | (121) | (57) | |
Preference share dividends | (93) | (96) | (373) | (380) | |
Adjusted earnings1 | 1,376 | 1,132 | 5,551 | 4,894 | |
Adjusted earnings per common share | 0.68 | 0.56 | 2.74 | 2.42 |
1 | Non-GAAP financial measures. Please refer to "Non-GAAP Reconciliations Appendices" section of this news release. |
2 | Presented net of adjusting items. |
Adjusted earnings increased
- higher depreciation expense on new assets placed into service throughout 2021, including the
U.S. portion of the Line 3Replacement Project , which was placed into service in the fourth quarter, and the Ingleside Energy Center, acquired in October; and - higher interest expense due to lower capitalized interest associated with the
U.S. portion of the Line 3Replacement Project .
Full year adjusted earnings increased
ADJUSTED EBITDA BY SEGMENTS
Fourth quarter adjusted EBITDA generated from U.S. dollar denominated businesses was translated to Canadian dollars at a lower average exchange rate of
LIQUIDS PIPELINES
Three months ended | Year ended | ||||
2021 | 2020 | 2021 | 2020 | ||
(unaudited; millions of Canadian dollars) | |||||
Mainline System | 1,202 | 1,032 | 4,466 | 4,102 | |
Regional Oil Sands System | 234 | 234 | 927 | 839 | |
317 | 206 | 1,019 | 920 | ||
Other Systems1 | 355 | 315 | 1,319 | 1,321 | |
Adjusted EBITDA2 | 2,108 | 1,787 | 7,731 | 7,182 | |
Operating Data (average deliveries – thousands of bpd) | |||||
Mainline System - ex- | 3,014 | 2,651 | 2,765 | 2,622 | |
Regional Oil Sands System4 | 1,983 | 1,919 | 1,929 | 1,641 | |
International Joint Tariff (IJT)5 | |||||
Competitive Tolling Settlement (CTS) Surcharges5 | |||||
Line 3 Replacement Surcharge5,6 |
1 | Other consists of Southern Lights Pipeline, Express-Platte System, Bakken System, and Feeder Pipelines & Other. |
2 | Non-GAAP measure. Please refer to "Non-GAAP Reconciliations Appendices" section of this news release. |
3 | Mainline System throughput volume represents mainline system deliveries ex- |
4 | Volumes are for the Athabasca Pipeline, Waupisoo Pipeline, Woodland Pipeline and |
5 | The IJT benchmark toll and its components are set in |
6 | The interim surcharge of |
Liquids Pipelines adjusted EBITDA increased
- higher Mainline System throughput enabled by incremental Line 3 capacity placed into service
October 1 , higher tolls due to the implementation of the full Line 3 Replacement surcharge ofUS$0.935 per barrel beginningOctober 2021 compared with the surcharge on the Canadian portion of the project ofUS$0.20 per barrel and a higher effective foreign exchange hedge rate (C$1.27 in 2021 vs.C$1.21 in 2020) on hedges used to manage foreign exchange risk of theU.S. dollar denominated Canadian Mainline revenue, partially offset by the recognition of a provision against the interim Mainline IJT for barrels shippedbetween July 1 and December 31, 2021 ; and - higher contributions from the
Gulf Coast and Mid-Continent System due primarily to the acquisition of the Ingleside Energy Center in the fourth quarter of 2021 and higher contributions from the Seaway Crude Pipeline System; partially offset by - the negative effect of translating
U.S. dollar denominated EBITDA at a lower Canadian toU.S. dollar average exchange rate, which is partially offset by realized hedge gains in the Eliminations and Other segment as part of the Company's enterprise-wide financial risk management program.
Full year 2021 Liquids Pipeline adjusted EBITDA increased
GAS TRANSMISSION AND MIDSTREAM
Three months ended | Year ended | ||||
2021 | 2020 | 2021 | 2020 | ||
(unaudited; millions of Canadian dollars) | |||||
670 | 673 | 2,905 | 3,090 | ||
Canadian Gas Transmission | 125 | 140 | 537 | 494 | |
91 | 40 | 260 | 156 | ||
Other | 36 | 25 | 148 | 155 | |
Adjusted EBITDA1 | 922 | 878 | 3,850 | 3,895 |
1 Non-GAAP financial measure. Please refer to "Non-GAAP Reconciliations Appendices" section of this news release. |
Gas Transmission and Midstream adjusted EBITDA increased
- higher
U.S. Gas Transmission contributions from the Atlantic Bridge Phase III project, placed into service inJanuary 2021 , and increased revenue due to the absence of pressure restrictions that existed on the Texas Eastern system in 2020; - higher
U.S. midstream contributions resulting from higher commodity prices atEnbridge's Aux Sable and DCP joint ventures; partially offset by - lower Canadian Gas Transmission contributions due to the timing of operating and administrative expenses, realized in the fourth quarter of 2021, partially offset by higher contributions from the final phases of the T-South Expansion and Spruce Ridge projects placed into service in the quarter; and
- the negative effect of translating
U.S. dollar denominated EBITDA at a weakerU.S dollar average exchange rate, primarily impactingU.S. Gas Transmission andU.S. Midstream results, partially offset by realized gains in the Eliminations and Other segment related to the Company's enterprise-wide financial risk management program.
Full year 2021 Gas Transmission and Midstream adjusted EBITDA decreased
GAS DISTRIBUTION AND STORAGE
Three months ended | Year ended | ||||
2021 | 2020 | 2021 | 2020 | ||
(unaudited; millions of Canadian dollars) | |||||
427 | 455 | 1,744 | 1,741 | ||
Other | 23 | 37 | 109 | 81 | |
Adjusted EBITDA1 | 450 | 492 | 1,853 | 1,822 | |
Operating Data | |||||
EGI | |||||
Volumes (billions of cubic feet) | 560 | 507 | 1,943 | 1,793 | |
Number of active customers2 (millions) | 3.8 | 3.8 | |||
Heating degree days3 | |||||
Actual | 1,144 | 1,234 | 3,494 | 3,657 | |
Forecast based on normal weather4 | 1,317 | 1,310 | 3,855 | 3,843 |
1 | Non-GAAP financial measure. Please refer to "Non-GAAP Reconciliations Appendices" section of 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. Results include contributions from
Gas Distribution and Storage adjusted EBITDA decreased
- the negative impact of warmer weather in 2021 of approximately
$16 million ; and - higher operating and administrative costs largely related to timing of operational, pipeline integrity and safety costs between quarters; partially offset by
- higher distribution charges resulting from increases in rates and customer base.
When compared with the normal weather forecast embedded in rates, the warmer weather in the fourth quarter of 2021 negatively impacted EBITDA by approximately
Full year 2021 Gas Distribution and Storage adjusted EBITDA increased
Three months ended | Year ended | ||||
2021 | 2020 | 2021 | 2020 | ||
(unaudited; millions of Canadian dollars) | |||||
Adjusted EBITDA1 | 140 | 146 | 496 | 507 |
1 | Non-GAAP financial measure. Please refer to "Non-GAAP Reconciliations Appendices" section of this news release. |
Full year 2021
- weaker wind resources at
U.S. wind facilities, including effects from the winter storm inTexas duringFebruary 2021 ; and - the absence of reimbursements received in 2020 at certain Canadian wind facilities from a change in operator; partially offset by
- the promote fee received associated with the closing of the sale of 49% of
Enbridge's interest in three French offshore wind projects in construction to CPP Investments, which closed in the first quarter of 2021.
ENERGY SERVICES
Three months ended | Year ended | ||||
2021 | 2020 | 2021 | 2020 | ||
(unaudited; millions of Canadian dollars) | |||||
Adjusted EBITDA1 | (83) | (82) | (360) | (119) |
1 | Non-GAAP financial measure. Please refer to "Non-GAAP Reconciliations Appendices" section of this news release. |
Energy Services adjusted EBITDA decreased
- significant compression of location and quality differentials in certain markets along with limited storage opportunities due to market price backwardation; and
- adverse impacts from the major winter storm experienced across the
U.S. Midwest duringFebruary 2021 .
These conditions lead to fewer opportunities to achieve profitable transportation margins on facilities in which Energy Services holds capacity obligations.
ELIMINATIONS AND OTHER
Three months ended | Year ended | ||||
2021 | 2020 | 2021 | 2020 | ||
(unaudited; millions of Canadian dollars) | |||||
Operating and administrative recoveries | 103 | (8) | 256 | 158 | |
Realized foreign exchange hedge settlement gains/(losses) | 47 | (12) | 175 | (172) | |
Adjusted EBITDA1 | 150 | (20) | 431 | (14) |
1 | Non-GAAP financial measure. Please refer to "Non-GAAP Reconciliations Appendices" section of 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.
Eliminations and Other adjusted EBITDA increased
- higher realized foreign exchange gains compared with realized foreign exchange losses in 2020 as a result of a weakening
U.S. dollar average exchange rate of$1.26 for the fourth quarter of 2021 (Q4 2020:$1.30 ) compared with a hedge rate of$1.30 for the fourth quarter of 2021 (Q4 2020:$1.29 ); and - the annualized benefit of cost containment initiatives executed in 2020.
Full year 2021 Eliminations and Other adjusted EBITDA increased
CONFERENCE CALL
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.
DIVIDEND DECLARATION
On
Dividend per share | |
Common Shares1 | |
Preference Shares, Series A | |
Preference Shares, Series B | |
Preference Shares, Series C2 | |
Preference Shares, Series D | |
Preference Shares, Series F | |
Preference Shares, Series H | |
Preference Shares, Series J | |
Preference Shares, Series L | |
Preference Shares, Series | |
Preference Shares, Series P | |
Preference Shares, Series R | |
Preference Shares, Series 1 | |
Preference Shares, Series 3 | |
Preference Shares, Series 5 | |
Preference Shares, Series 7 | |
Preference Shares, Series 9 | |
Preference Shares, Series 11 | |
Preference Shares, Series 13 | |
Preference Shares, Series 15 | |
Preference Shares, Series 17 | $0.32188 |
Preference Shares, Series 19 |
1 | The quarterly dividend per common share was increased 3% to |
2 | The quarterly dividend per share paid on Series C was increased to |
FORWARD-LOOKING INFORMATION
Forward-looking information, or forward-looking statements, have been included in this news release to provide information about
Although
ABOUT
None of the information contained in, or connected to,
FOR FURTHER INFORMATION PLEASE CONTACT: | ||
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 a GAAP basis) 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 which are 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 generally accepted accounting principles in
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 | Year ended | ||||
2021 | 2020 | 2021 | 2020 | ||
(unaudited; millions of Canadian dollars) | |||||
Liquids Pipelines | 2,141 | 2,403 | 7,897 | 7,683 | |
Gas Transmission and Midstream | 946 | 857 | 3,671 | 1,087 | |
Gas Distribution and Storage | 743 | 463 | 2,117 | 1,748 | |
146 | 147 | 508 | 523 | ||
Energy Services | 66 | (224) | (313) | (236) | |
Eliminations and Other | 165 | 385 | 356 | (113) | |
EBITDA | 4,207 | 4,031 | 14,236 | 10,692 | |
Depreciation and amortization | (1,047) | (946) | (3,852) | (3,712) | |
Interest expense | (732) | (685) | (2,655) | (2,790) | |
Income tax expense | (463) | (501) | (1,415) | (774) | |
Earnings attributable to noncontrolling interests | (32) | (28) | (125) | (53) | |
Preference share dividends | (93) | (96) | (373) | (380) | |
Earnings attributable to common shareholders | 1,840 | 1,775 | 5,816 | 2,983 |
ADJUSTED EBITDA TO ADJUSTED EARNINGS
Three months ended | Year ended | ||||
2021 | 2020 | 2021 | 2020 | ||
(unaudited; millions of Canadian dollars, except per share amounts) | |||||
Liquids Pipelines | 2,108 | 1,787 | 7,731 | 7,182 | |
Gas Transmission and Midstream | 922 | 878 | 3,850 | 3,895 | |
Gas Distribution and Storage | 450 | 492 | 1,853 | 1,822 | |
140 | 146 | 496 | 507 | ||
Energy Services | (83) | (82) | (360) | (119) | |
Eliminations and Other | 150 | (20) | 431 | (14) | |
Adjusted EBITDA | 3,687 | 3,201 | 14,001 | 13,273 | |
Depreciation and amortization | (1,047) | (946) | (3,852) | (3,712) | |
Interest expense | (734) | (694) | (2,675) | (2,793) | |
Income tax expense | (406) | (304) | (1,429) | (1,437) | |
Earnings attributable to noncontrolling interests | (31) | (29) | (121) | (57) | |
Preference share dividends | (93) | (96) | (373) | (380) | |
Adjusted earnings | 1,376 | 1,132 | 5,551 | 4,894 | |
Adjusted earnings per common share | 0.68 | 0.56 | 2.74 | 2.42 |
EBITDA TO ADJUSTED EARNINGS
Three months ended | Year ended | ||||
2021 | 2020 | 2021 | 2020 | ||
(unaudited; millions of Canadian dollars, except per share amounts) | |||||
EBITDA | 4,207 | 4,031 | 14,236 | 10,692 | |
Adjusting items: | |||||
Change in unrealized derivative fair value gain - Foreign exchange | (112) | (1,057) | (197) | (856) | |
Change in unrealized derivative fair value (gain)/loss - Commodity prices | (155) | 146 | (53) | 122 | |
Equity investment impairment | — | — | 111 | 2,351 | |
Equity investment asset and goodwill impairment | — | — | — | 324 | |
Gain on sale of | (303) | — | (303) | — | |
Texas Eastern re-establishment of EDIT regulated liability | — | — | — | 159 | |
Employee severance, transition and transformation costs | 41 | 34 | 147 | 339 | |
Other | 9 | 47 | 60 | 142 | |
Total adjusting items | (520) | (830) | (235) | 2,581 | |
Adjusted EBITDA | 3,687 | 3,201 | 14,001 | 13,273 | |
Depreciation and amortization | (1,047) | (946) | (3,852) | (3,712) | |
Interest expense | (732) | (685) | (2,655) | (2,790) | |
Income tax expense | (463) | (501) | (1,415) | (774) | |
Earnings attributable to noncontrolling interests | (32) | (28) | (125) | (53) | |
Preference share dividends | (93) | (96) | (373) | (380) | |
Adjusting items in respect of: | |||||
Interest expense | (2) | (9) | (20) | (3) | |
Income tax expense | 57 | 197 | (14) | (663) | |
Earnings attributable to noncontrolling interests | 1 | (1) | 4 | (4) | |
Adjusted earnings | 1,376 | 1,132 | 5,551 | 4,894 | |
Adjusted earnings per common share | 0.68 | 0.56 | 2.74 | 2.42 |
APPENDIX B
NON-GAAP RECONCILIATION – ADJUSTED EBITDA TO SEGMENTED EBITDA
LIQUIDS PIPELINES
Three months ended | Year ended | ||||
2021 | 2020 | 2021 | 2020 | ||
(unaudited; millions of Canadian dollars) | |||||
Adjusted EBITDA | 2,108 | 1,787 | 7,731 | 7,182 | |
Change in unrealized derivative fair value gain | 36 | 635 | 120 | 545 | |
Property tax settlement | — | — | 57 | — | |
Asset write-down loss | — | (17) | — | (30) | |
Other | (3) | (2) | (11) | (14) | |
Total adjustments | 33 | 616 | 166 | 501 | |
EBITDA | 2,141 | 2,403 | 7,897 | 7,683 |
GAS TRANSMISSION AND MIDSTREAM
Three months ended | Year ended | ||||
2021 | 2020 | 2021 | 2020 | ||
(unaudited; millions of Canadian dollars) | |||||
Adjusted EBITDA | 922 | 878 | 3,850 | 3,895 | |
Equity investment impairment | — | — | (111) | (2,351) | |
Equity investment asset and goodwill impairment | — | — | — | (324) | |
Texas Eastern re-establishment of EDIT regulated liability | — | — | — | (159) | |
Equity earnings adjustment - | 60 | (4) | (44) | 22 | |
Other | (36) | (17) | (24) | 4 | |
Total adjustments | 24 | (21) | (179) | (2,808) | |
EBITDA | 946 | 857 | 3,671 | 1,087 |
GAS DISTRIBUTION AND STORAGE
Three months ended | Year ended | ||||
2021 | 2020 | 2021 | 2020 | ||
(unaudited; millions of Canadian dollars) | |||||
Adjusted EBITDA | 450 | 492 | 1,853 | 1,822 | |
Change in unrealized derivative fair value gain/(loss) | 2 | (12) | 14 | (10) | |
Gain on sale of | 303 | — | 303 | — | |
Employee severance, transition and transformation costs | (11) | (16) | (49) | (51) | |
Other | (1) | (1) | (4) | (13) | |
Total adjustments | 293 | (29) | 264 | (74) | |
EBITDA | 743 | 463 | 2,117 | 1,748 |
Three months ended | Year ended | ||||
2021 | 2020 | 2021 | 2020 | ||
(unaudited; millions of Canadian dollars) | |||||
Adjusted EBITDA | 140 | 146 | 496 | 507 | |
Change in unrealized derivative fair value gain | 2 | 1 | 8 | 3 | |
Realized hedges | 13 | — | 13 | — | |
Equity earnings adjustment | (8) | — | (8) | — | |
Disposition - MATL transmission assets | — | — | — | 13 | |
Other | (1) | — | (1) | — | |
Total adjustments | 6 | 1 | 12 | 16 | |
EBITDA | 146 | 147 | 508 | 523 |
ENERGY SERVICES
Three months ended | Year ended | ||||
2021 | 2020 | 2021 | 2020 | ||
(unaudited; millions of Canadian dollars) | |||||
Adjusted EBITDA | (83) | (82) | (360) | (119) | |
Change in unrealized derivative fair value gain/(loss) | 155 | (146) | 53 | (122) | |
Net inventory adjustment | (6) | 4 | (6) | 5 | |
Total adjustments | 149 | (142) | 47 | (117) | |
EBITDA | 66 | (224) | (313) | (236) |
ELIMINATIONS AND OTHER
Three months ended | Year ended | ||||
2021 | 2020 | 2021 | 2020 | ||
(unaudited; millions of Canadian dollars) | |||||
Adjusted EBITDA | 150 | (20) | 431 | (14) | |
Change in unrealized derivative fair value gain | 72 | 433 | 55 | 318 | |
Change in corporate guarantee obligation | — | — | — | (74) | |
Investment write-down loss | — | — | — | (43) | |
Employee severance, transition and transformation costs | (27) | (17) | (87) | (279) | |
Other | (30) | (11) | (43) | (21) | |
Total adjustments | 15 | 405 | (75) | (99) | |
EBITDA | 165 | 385 | 356 | (113) |
APPENDIX C
NON-GAAP RECONCILIATION – CASH PROVIDED BY OPERATING ACTIVITIES TO DCF
Three months ended | Year ended | ||||
2021 | 2020 | 2021 | 2020 | ||
(unaudited; millions of Canadian dollars) | |||||
Cash provided by operating activities | 2,302 | 2,254 | 9,256 | 9,781 | |
Adjusted for changes in operating assets and liabilities1 | 548 | 120 | 1,616 | (93) | |
2,850 | 2,374 | 10,872 | 9,688 | ||
Distributions to noncontrolling interests | (64) | (68) | (271) | (300) | |
Preference share dividends | (93) | (96) | (367) | (380) | |
Maintenance capital expenditures2 | (274) | (320) | (686) | (915) | |
Significant adjusting items: | |||||
Other receipts of cash not recognized in revenue3 | 53 | 42 | 127 | 292 | |
Employee severance, transition and transformation costs | 39 | 31 | 147 | 335 | |
Distributions from equity investments in excess of cumulative earnings4 | 121 | 263 | 418 | 675 | |
Other items | (145) | (17) | (199) | 45 | |
DCF | 2,487 | 2,209 | 10,041 | 9,440 | |
DCF per common share | 1.23 | 1.09 | 4.96 | 4.67 |
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. |
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