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Published: 2020-05-07
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ENBRIDGE GAS INC.
Supplemental Financial Information (unaudited)
Exhibit to the Consolidated Financial Statements
Earnings Coverage Ratios
The following earnings coverage ratios for Enbridge Gas Inc. (the Company) have been calculated on a consolidated basis for the respective 12 month periods ended March 31, 2020 and December 31, 2019 and are derived from unaudited financial information for the 12 month period ended March 31, 2020 and audited financial information for the 12 month period ended December 31, 2019, in each case prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP).
The earnings coverage ratio gives pro forma effect to the issuance or repayment by the Company, from time to time, of debt securities subsequent to period end. The earnings coverage ratios for the 12 month periods ended March 31, 2020 and December 31, 2019 include pro forma effect of the following:
• a $600 million issuance of 2.9% 10-year medium-term notes and a $600 million issuance of 3.65% 30-year medium-term notes on April 1, 2020; and
• the repayment of a subordinated promissory note in the principal amount of $650 million, bearing interest at a rate of 3.65% per annum, on April 1, 2020.
Adjustments for normal course issuances and repayments of debt subsequent to March 31, 2020 and December 31, 2019 have been made to the March 31, 2020 and December 31, 2019 ratios, respectively. The earnings coverage ratios set forth below do not purport to be indicative of earnings coverage ratios for any future periods.
Twelve Month Period Ended
March 31,December 31,
20202019
Earnings coverage12.22.3
1   Earnings coverage is calculated as earnings before interest and income taxes divided by the sum of interest expense and        capitalized interest.
The Company evaluates its performance using a variety of measures. The earnings coverage ratio discussed above is not defined under U.S. GAAP and, therefore, should not be considered in isolation or as an alternative to, or more meaningful than, earnings as determined in accordance with U.S. GAAP as an indicator of the Company's financial performance or liquidity. This measure is not necessarily comparable to a similarly titled measure of another company.
The Company’s interest requirements, after giving effect to the issuances and repayments discussed above, amounted to approximately $446 million for the 12 month period ended March 31, 2020 (December 31, 2019 - $440 million). The Company’s earnings before interest and income taxes for the 12 month period ended March 31, 2020 were approximately $983 million (December 31, 2019 - $1,014 million), which is 2.2 times the Company’s interest requirements for this period (December 31, 2019 - 2.3 times).