10-QPeriod: Q3 FY2024

ENBRIDGE INC Quarterly Report for Q3 Ended Sep 30, 2024

Filed November 1, 2024For Securities:ENBENBMFEBBGFEBRGFEBRZFENBGFENBRFENFFFEBGEFENBFFENBHFENBNFENBOFENBSFEBBNFENNPF

Summary

Enbridge Inc. (ENB) reported strong third-quarter 2024 results, driven by significant contributions from recently acquired U.S. gas utilities and robust performance across its Liquids Pipelines and Gas Transmission segments. Total operating revenues increased to $14.88 billion from $9.84 billion in the prior year, largely due to the consolidation of the East Ohio Gas Company (EOG), Questar Gas Company, and Public Service Company of North Carolina, Inc. (PSNC) acquired during the year. These acquisitions have expanded Enbridge's regulated natural gas distribution footprint and are expected to provide long-term growth. Despite higher interest expenses and depreciation from these acquisitions, earnings attributable to common shareholders rose to $1.29 billion ($0.59 per share) from $532 million ($0.26 per share) in Q3 2023, reflecting improved operational performance and the positive impact of certain non-operating factors. The company also successfully executed a significant portion of its financing plan, reinforcing its financial flexibility to support ongoing and future growth initiatives. The company's strategic focus on energy transition continues with the acquisition of renewable natural gas (RNG) facilities and ongoing investments in renewable power generation projects. Management remains confident in the company's ability to generate stable cash flows, support dividend growth, and create long-term shareholder value, supported by its diversified asset base and disciplined capital allocation. The successful integration of the acquired U.S. gas utilities is a key near-term priority. Enbridge reiterated its commitment to financial strength and flexibility, maintaining substantial liquidity and adhering to its debt covenants.

Key Highlights

  • 1Total operating revenues significantly increased to $14.88 billion for the three months ended September 30, 2024, compared to $9.84 billion in the prior year, primarily driven by the acquisitions of EOG, Questar, and PSNC.
  • 2Earnings attributable to common shareholders more than doubled to $1.29 billion ($0.59 per share) for the three months ended September 30, 2024, from $532 million ($0.26 per share) in the same period last year.
  • 3The company successfully completed the acquisition of three U.S. gas utilities (EOG, Questar, and PSNC) in 2024, significantly expanding its regulated natural gas distribution business.
  • 4EBITDA for the Liquids Pipelines segment increased due to higher Mainline System tolls and improved contributions from the Southern Lights Pipeline.
  • 5The Gas Transmission segment saw improved EBITDA driven by favorable contracting, lower operating costs on U.S. assets, and contributions from recent acquisitions, partially offset by the divestiture of Alliance Pipeline and Aux Sable interests.
  • 6Enbridge's financial position remains strong, with total committed credit facilities of $23.7 billion and net available liquidity of $17.1 billion as of September 30, 2024.
  • 7The company is actively managing its debt profile, completing substantial long-term debt issuances and repayments during the nine-month period, and remains in compliance with all debt covenants.

Frequently Asked Questions

The substantial increase in operating revenues to $14.88 billion, up from $9.84 billion in Q3 2023, is primarily attributed to the consolidation of three major U.S. gas utility acquisitions: The East Ohio Gas Company (EOG), Questar Gas Company, and Public Service Company of North Carolina, Inc. (PSNC), which were completed in 2024.

The acquisitions have positively impacted Enbridge's profitability. Earnings attributable to common shareholders more than doubled year-over-year, reaching $1.29 billion ($0.59 per share) in Q3 2024, compared to $532 million ($0.26 per share) in Q3 2023. This growth is supported by improved segment performance and the integration of these new regulated utility assets, despite increased interest expenses and depreciation related to these transactions.

Enbridge maintains a strong liquidity position, with $17.1 billion in net available liquidity as of September 30, 2024, comprising $15.2 billion in available credit facilities and $1.9 billion in unrestricted cash. The company actively manages its debt through ongoing issuances and repayments, and has substantial committed credit facilities. As of the reporting date, Enbridge was in compliance with all its debt covenants.

Enbridge anticipates continued strong performance across its segments. The Liquids Pipelines segment benefits from higher tolls and improved throughput. The Gas Transmission segment is enhanced by favorable contracting and recent acquisitions. The Gas Distribution and Storage segment is seeing growth from new utility acquisitions and rate increases. Renewable Power Generation continues to develop projects, contributing to the company's energy transition strategy. Management is confident in the stable cash flow generation from these diversified assets.