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ENBRIDGE INC 8-K Report, Financial Results (Aug 2, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed August 2, 2024
Period End
August 2, 2024
In the record · 2016–202610-K1810-Q268-K238

ENB filed 18 annual reports (10-K), 26 quarterly reports (10-Q) and 238 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Aug ’18Aug ’18
  2. Material agreement8-K · May ’20May ’20
  3. Leadership change8-K · Dec ’22Dec ’22
  4. Leadership change8-K · Sep ’26Sep ’26

01—Abstract

Summary

Summary of the 8-K filed August 2, 2024. Cited figures are marked; the original filing is the authoritative source.

Enbridge's Q2 2024 results (filed via 8-K on August 2, 2024) show GAAP earnings attributable to common shareholders of C$1.85 billiona ($0.86/share), flat year over year, but this was inflated by a C$1.1 billion pre-tax gain on the sale of its Alliance Pipeline and Aux Sable interests to Pembina.

Adjusted EBITDA rose 8% to C$4.3 billionb, while adjusted earnings fell 10% to C$1.25 billion ($0.58/share, down $0.10) on higher interest expense, taxes and depreciation. DCF rose 3% to C$2.9 billion. Management recast 2024 adjusted EBITDA guidance upward to C$17.7–18.3 billion (from C$16.6–17.2 billion) to include the U.S. gas utility acquisitions from Dominion (Questar and EOG/Enbridge Gas Ohio), while keeping DCF per share guidance unchanged at C$5.40–5.80.

Financing was a key focus: the company has fully funded the US$9.4 billionc cash consideration for the acquisitions through common equity (including C$2.5 billion of ATM issuances in Q2), hybrid notes and sale proceeds, and has terminated its ATM program to return to an equity self-funding model. Leverage stood at 4.7x Debt-to-EBITDA at quarter end, which management expects to improve as the acquisitions' roughly US$14 billion of annualized EBITDA contributions build through 2025. Per-share metrics are diluted by the new share issuances, and the Base Business figures (excluding the acquisitions) show Q2 adjusted EBITDA of C$4.1 billion, the more conservative view of organic performance.

Growth commentary included a C$24 billiond secured backlog (with Fécamp offshore wind placed in service and Orange Grove solar, Gray Oak expansion and Blackcomb Pipeline added), an FID on the up-to-2.5 Bcf/d Blackcomb pipeline (expected in service in 2H 2026), a Texas Eastern rate settlement increasing base rates 6% from October 1, 2024, and a PSNC closing expected in Q3 2024. Management reaffirmed its 2023–2026 outlook of 7–9% adjusted EBITDA growth, 4–6% adjusted EPS growth and ~3% DCF per share growth.

02—Key points

Key Highlights

  1. Adjusted EBITDA up 8% to C$4.3B (vs. C$4.0B); Base Business (ex-acquisitions) adjusted EBITDA of C$4.1B, flat-to-up organically
  2. GAAP EPS of $0.86 flat year over year, but boosted by a C$1.1B pre-tax gain on sale of Alliance Pipeline and Aux Sable interests; offset by a C$208M unrealized derivative loss
  3. Adjusted EPS fell to $0.58 from $0.68 (-$0.10) on higher interest expense, income taxes and depreciation, plus dilution from new shares
  4. 2024 adjusted EBITDA guidance recast to C$17.7–18.3B (from C$16.6–17.2B) to include the Dominion gas utility acquisitions; DCF/share guidance held at C$5.40–5.80
  5. Acquisition funding complete (US$9.4B cash consideration); ATM program terminated and company returning to equity self-funding model; Debt-to-EBITDA at 4.7x
  6. Secured growth backlog of C$24B; Blackcomb Pipeline (2.5 Bcf/d) FID and Gray Oak 120 kbpd expansion sanctioned; Orange Grove solar (130 MW, ~US$250M) backed by AT&T PPA
  7. Texas Eastern settlement approved by FERC on July 31 raises base rates 6% from October 1, 2024, with rate certainty through October 2027; quarterly dividend declared at C$0.915 per common share

03—Questions

Frequently Asked Questions

  1. Why did GAAP earnings stay flat when adjusted earnings declined?

    GAAP earnings were supported by a roughly C$1.1 billion pre-tax gain (C$765 million after tax) on the sale of the Alliance Pipeline and Aux Sable interests to Pembina. That gain offset a C$208 million unrealized derivative fair value loss. Adjusted earnings strip out these non-recurring items and fell C$132 million, reflecting higher interest costs, income taxes and depreciation.

  2. How does the acquisition affect Enbridge's leverage and per-share outlook?

    Debt-to-EBITDA was 4.7x at quarter end. Management expects the roughly US$14 billion of acquired assets' annualized EBITDA to strengthen this ratio through 2025. Because the acquisitions were funded partly with new common shares, per-share metrics are diluted in 2024 (weighted shares rose to about 2,137 million from 2,024 million), so the DCF per share guidance of C$5.40–5.80 was held flat despite higher total EBITDA.

  3. What does the guidance change mean, and is the increase organic?

    The C$1.1 billion increase in 2024 adjusted EBITDA guidance (to C$17.7–18.3B) reflects the inclusion of the U.S. gas utility acquisitions, which had previously been excluded. It is not organic growth. Base Business figures, which exclude the acquisitions, show Q2 adjusted EBITDA of about C$4.1B, and six-month base EBITDA of C$8.95B versus C$8.48B a year earlier.

  4. What is the status of the PSNC acquisition and the remaining growth pipeline?

    Questar closed May 31, 2024 for US$4.3 billion including assumed debt. The PSNC closing awaits North Carolina Utilities Commission approval, which management expects in Q3 2024. The secured backlog stands at C$24 billion, including the new Blackcomb Pipeline (expected in service 2H 2026) and Orange Grove solar (expected in service 2025), while Fécamp offshore wind was placed in service and removed from the backlog.

04—Continue

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