|
| ENBRIDGE INC. |
| | Supplemental Financial Information (unaudited) |
| | Exhibit to the Consolidated Financial Statements |
| Earnings Coverage Ratio |
The following earnings coverage ratio for Enbridge Inc. (Enbridge or the Company) has been calculated on a consolidated basis for the 12 month period ended June 30, 2020 and is derived from unaudited financial information 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 preferred shares and debt securities since June 30, 2020, in the case of the June 30, 2020 earnings coverage ratio, including: |
the issuance by Enbridge Inc., of US$1.0 billion of 60-year hybrid subordinated notes payable semi- |
| | | annually in arrears. The notes mature on July 15, 2080 and are redeemable on year 10 and every five years thereafter |
Adjustments for normal course issuances and repayments of debt subsequent to June 30, 2020 would not materially affect the ratios and, as a result, have not been made. The earnings coverage ratio set forth below does not purport to be indicative of earnings coverage ratios for any future periods. |
| | | | Twelve Month Period Ended |
| | | | | June 30, 2020 |
Earnings coverage1 | | | | 1.6 times |
1 Earnings coverage on a net earnings basis is equal to earnings attributable to Enbridge plus net interest expense and income taxes divided by net interest expense plus capitalized interest and preferred share dividend obligations. |
| | | | | | | | | | | | | | | | |
The Company evaluates its performance using a variety of measures. The earnings coverage 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, net 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 dividend requirements on all of its preferred shares after giving pro forma effect to the conversion of certain preferred shares in accordance with their terms, adjusted for changes in dividend amounts on certain preferred shares that took effect as a result of dividend rate adjustments in accordance with the terms of such preferred shares and adjusted to a before tax equivalent using an effective income tax expense rate of 23%, amounted to approximately $491 million for the 12 month period ended June 30, 2020. The Company’s interest requirements amounted to approximately $3,043 million for the 12 month period ended June 30, 2020. The Company’s earnings before interest and income tax for the 12 month period ended June 30, 2020 were approximately $5,740 million, which is 1.6 times the Company’s aggregate dividend and interest requirements for this period. |
|