Enhanced Investments - Financial Portal

Published: 2022-07-29



		ENBRIDGE INC.

				CONSOLIDATED FINANCIAL STATEMENTS

		(unaudited)

		June 30, 2022

ENBRIDGE INC.
	CONSOLIDATED STATEMENTS OF EARNINGS
		Three months ended		Six months ended
			June 30,		June 30,
			2022			2021	2022		2021
								(unaudited; mil ions of Canadian dol ars, except per share amounts)

								Operating revenues

								Commodity sales	8,108		6,334	16,433			12,763
								Gas distribution sales	905	737	3,003			2,277
								Transportation and other services	4,202		3,877	8,876			8,045
								Total operating revenues (Note 3)	13,215		10,948	28,312			23,085
								Operating expenses
								Commodity costs	8,181		6,430	16,472			12,628
								Gas distribution costs	456	289	1,912			1,239
								Operating and administrative	1,994		1,484	3,869			3,043
								Depreciation and amortization	1,064		929	2,119			1,861
								Total operating expenses	11,695		9,132	24,372			18,771
								Operating income	1,520		1,816	3,940			4,314
								Income from equity investments	510	352	1,001			747
								Other income/(expense)
								Net foreign currency gain/(loss)	(581)	159	(212)			311
								Other	82	82	171			191
								Interest expense	(791)	(618)	(1,510)			(1,275)
								Earnings before income taxes	740	1,791	3,390			4,288
								Income tax expense (Note 9)	(133)	(270)	(726)			(753)
								Earnings	607	1,521	2,664			3,535
								Earnings attributable to noncontrol ing interests	(12)	(37)	(40)		(59)
								Earnings attributable to control ing interests	595	1,484	2,624			3,476
								Preference share dividends	(145)	(90)	(247)			(182)
								Earnings attributable to common shareholders	450	1,394	2,377			3,294
								Earnings per common share attributable to common
								shareholders (Note 5)	0.22	0.69	1.17			1.63
								Diluted earnings per common share attributable to
								common shareholders (Note 5)	0.22	0.69	1.17			1.63
								The accompanying notes are an integral part of these interim consolidated financial statements.
									1

ENBRIDGE INC.
	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
		Three months ended		Six months ended
			June 30,		June 30,
			2022			2021	2022			2021

	(unaudited; mil ions of Canadian dol ars)

	Earnings		607			1,521	2,664			3,535
	Other comprehensive income/(loss), net of tax
	Change in unrealized gain/(loss) on cash flow hedges		352			(157)	646			213
	Change in unrealized gain/(loss) on net investment
	hedges		(386)			129	(253)			222
	Other comprehensive income from equity investees		—			24	—		2
	Excluded components of fair value hedges		(4)			(1)	(5)		(2)
	Reclassification to earnings of loss on cash flow
	hedges		52			61	109			113
	Reclassification to earnings of pension and other
	postretirement benefits (OPEB) amounts		(3)			6	(5)		11
	Foreign currency translation adjustments		1,881				(835)	1,173			(1,631)
	Other comprehensive income/(loss), net of tax		1,892				(773)	1,665			(1,072)
	Comprehensive income		2,499				748	4,329			2,463
	Comprehensive income attributable to noncontrol ing
	interests		(58)			(9)	(71)		(6)
	Comprehensive income attributable to control ing
	interests		2,441				739	4,258			2,457
	Preference share dividends		(145)			(90)	(247)			(182)
	Comprehensive income attributable to common
	shareholders		2,296				649	4,011			2,275
	The accompanying notes are an integral part of these interim consolidated financial statements.
									2

ENBRIDGE INC.
	CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
		Three months ended		Six months ended
			June 30,	June 30,
		2022				2021	2022			2021

					(unaudited; mil ions of Canadian dol ars, except per share amounts)
					Preference shares
	Balance at beginning of period		7,010				7,747	7,747			7,747
	Redemption of preference shares		(192)				—	(929)			—
					Balance at end of period		6,818				7,747	6,818		7,747
					Common shares
	Balance at beginning of period		64,801				64,772	64,799			64,768
	Shares issued on exercise of stock options		12			8	48			12
	Share purchases at stated value		(58)			—	(88)			—
	Other		—			—		(4)	—
					Balance at end of period		64,755				64,780	64,755		64,780
					Additional paid-in capital
	Balance at beginning of period		316				324	365			277
	Stock-based compensation		5			5	18			16
	Options exercised		(11)			(5)	(45)			(8)
	Change in reciprocal interest		—			—		—	39
	Other		(5)			—	(33)			—
					Balance at end of period		305				324	305		324
					Deficit
	Balance at beginning of period		(9,082)				(8,093) (10,989)	(9,995)
	Earnings attributable to control ing interests		595				1,484	2,624			3,476
	Preference share dividends		(145)				(90)	(247)			(182)
	Common share dividends declared		(1,743)				(1,692)	(1,743)			(1,692)
	Dividends paid to reciprocal shareholder		—			2		—	5
	Share purchases in excess of stated value		(43)			—	(63)			—
	Other		—			1		—	—
					Balance at end of period	(10,418)				(8,388) (10,418)	(8,388)
					Accumulated other comprehensive income/(loss) (Note 7)
	Balance at beginning of period		(1,308)				(1,675)	(1,096)			(1,401)
	Other comprehensive income/(loss) attributable to common shareholders, net
	of tax		1,846				(745)	1,634			(1,019)
					Balance at end of period		538				(2,420)	538		(2,420)
					Reciprocal shareholding
	Balance at beginning of period		—			(17)		—	(29)
	Change in reciprocal interest		—			—		—	12
					Balance at end of period		—			(17)		—	(17)
					Total Enbridge Inc. shareholders’ equity		61,998				62,026	61,998		62,026
					Noncontrol ing interests
	Balance at beginning of period		2,536				2,930	2,542			2,996
	Earnings attributable to noncontrol ing interests		12			37	40			59
	Other comprehensive income/(loss) attributable to noncontrol ing interests, net
	of taxChange in unrealized loss on cash flow hedges
			(8)			(3)		(6)	(6)
	Foreign currency translation adjustments		54			(25)	37			(47)
			46			(28)	31			(53)

	Comprehensive income attributable to noncontrol ing interests		58			9	71			6
	Distributions		(67)			(77)	(127)			(143)
	Contributions		2			6		8	9
	Other		10			2	45			2
					Balance at end of period		2,539				2,870	2,539		2,870
					Total equity		64,537				64,896	64,537		64,896
					Dividends paid per common share		0.860				0.835	1.720		1.670
					The accompanying notes are an integral part of these interim consolidated financial statements.
									3

ENBRIDGE INC.
	CONSOLIDATED STATEMENTS OF CASH FLOWS
		Six months ended
			June 30,
					2022			2021
				(unaudited; mil ions of Canadian dol ars)
				Operating activities
				Earnings		2,664			3,535
				Adjustments to reconcile earnings to net cash provided by operating activities:
				Depreciation and amortization		2,119			1,861
				Deferred income tax expense		469			647
				Unrealized derivative fair value (gain)/loss, net (Note 8)		415			(448)
				Income from equity investments		(1,001)			(747)
				Distributions from equity investments		878			737
				Gain on disposition		—		(41)
				Other		67		(128)
				Changes in operating assets and liabilities		(138)			(363)
				Net cash provided by operating activities		5,473			5,053
				Investing activities
				Capital expenditures		(2,002)			(3,725)
				Long-term investments and restricted long-term investments		(388)			(155)
				Distributions from equity investments in excess of cumulative earnings		296			246
				Additions to intangible assets		(91)		(118)
				Proceeds from disposition		—		122
				Affiliate loans, net		65		29
				Net cash used in investing activities		(2,120)			(3,601)
				Financing activities
				Net change in short-term borrowings		105			289
				Net change in commercial paper and credit facility draws		1,031			739
				Debenture and term note issues, net of issue costs		2,642			3,247
				Debenture and term note repayments		(1,333)			(1,888)
				Contributions from noncontrol ing interests		8		9
				Distributions to noncontrol ing interests		(127)			(143)
				Common shares issued		3		3
				Common shares repurchased		(151)			—
				Preference share dividends		(173)			(182)
				Common share dividends		(3,485)			(3,382)
				Redemption of preferred shares held by subsidiary		—		(115)
				Redemption of preference shares		(1,003)			—
				Other		(122)			(40)
				Net cash used in financing activities		(2,605)			(1,463)
				Effect of translation of foreign denominated cash and cash equivalents and
				restricted cash		20		(20)
				Net change in cash and cash equivalents and restricted cash		768			(31)
				Cash and cash equivalents and restricted cash at beginning of period		320			490
				Cash and cash equivalents and restricted cash at end of period		1,088			459
				The accompanying notes are an integral part of these interim consolidated financial statements.
							4

ENBRIDGE INC.
	CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
		June 30,	December 31,
		2022		2021
					(unaudited; mil ions of Canadian dol ars; number of shares in mil ions)
					Assets
					Current assets
	Cash and cash equivalents					1,045		286
	Restricted cash					43	34
	Accounts receivable and other					7,545		6,862
	Accounts receivable from affiliates					248	107
	Inventory					1,546		1,670
						10,427		8,959
					Property, plant and equipment, net	101,290		100,067
					Long-term investments	13,687		13,324
					Restricted long-term investments	543	630
					Deferred amounts and other assets	9,360		8,613
					Intangible assets, net	3,916		4,008
					Goodwil	33,277		32,775
					Deferred income taxes	316	488
					Total assets	172,816		168,864
					Liabilities and equity
					Current liabilities
	Short-term borrowings					1,620		1,515
	Accounts payable and other					8,206		9,767
	Accounts payable to affiliates					257	90
	Interest payable					704	693
	Current portion of long-term debt					7,188		6,164
						17,975		18,229
					Long-term debt	70,005		67,961
					Other long-term liabilities	7,799		7,617
					Deferred income taxes	12,500		11,689
						108,279		105,496
					Contingencies (Note 11)Equity

	Share capital
	Preference shares					6,818		7,747
	Common shares (2,025 and 2,026 outstanding at June 30, 2022 and
	December 31, 2021)					64,755		64,799
	Additional paid-in capital					305	365
	Deficit					(10,418)		(10,989)
	Accumulated other comprehensive income/(loss) (Note 7)					538	(1,096)
	Total Enbridge Inc. shareholders' equity					61,998		60,826
	Noncontrol ing interests					2,539		2,542
						64,537		63,368
					Total liabilities and equity	172,816		168,864
					The accompanying notes are an integral part of these interim consolidated financial statements.
							5

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
	(unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements of Enbridge Inc. ("we", "our", "us" and "Enbridge") have been prepared in accordance with general y accepted accounting principles in the United States of America (US GAAP) and Regulation S-X for interim consolidated financial information. They do not include al of the information and notes required by US GAAP for annual consolidated financial statements and should therefore be read in conjunction with our audited consolidated financial statements and notes for the year ended December 31, 2021. In the opinion of management, the interim consolidated financial statements contain al normal recurring adjustments necessary to present fairly our financial position, results of operations and cash flows for the interim periods reported. These interim consolidated financial statements fol ow the same significant accounting policies as those included in our audited consolidated financial statements for the year ended December 31, 2021, except for the adoption of new standards (Note 2). Amounts are stated in Canadian dol ars unless otherwise noted.
Our operations and earnings for interim periods can be affected by seasonal fluctuations within the gas distribution utility businesses, as wel as other factors such as supply of and demand for crude oil and natural gas, and may not be indicative of annual results.
Certain comparative figures in our interim consolidated financial statements have been reclassified to conform to the current year's presentation.
2. CHANGES IN ACCOUNTING POLICIES
ADOPTION OF NEW ACCOUNTING STANDARDSDisclosures About Government AssistanceEffective January 1, 2022, we adopted Accounting Standards Update (ASU) 2021-10 on a prospective basis. The new standard was issued in November 2021 to increase the transparency of government assistance to business entities. The ASU adds new disclosure requirements for transactions with governments that are accounted for using a grant or contribution accounting model by analogy. The required disclosures include information about the nature of transactions, accounting policy applied, impacted financial statement line items and significant terms and conditions. The adoption of this ASU did not have a material impact on our consolidated financial statements.
Accounting for Certain Lessor Leases with Variable Lease PaymentsEffective January 1, 2022, we adopted ASU 2021-05 on a prospective basis. The new standard was issued in July 2021 to amend lessor accounting for certain leases with variable lease payments that do not depend on a reference index or a rate and would have resulted in the recognition of a loss at lease commencement if classified as a sales-type or a direct financing lease. The ASU amends the classification requirements of such leases for lessors to result in an operating lease classification. The adoption of this ASU did not have a material impact on our consolidated financial statements.
Accounting for Modifications or Exchanges of Certain Equity-Classified ContractsEffective January 1, 2022, we adopted ASU 2021-04 on a prospective basis. The new standard was issued in May 2021 to clarify issuer accounting for modifications or exchanges of freestanding equity-classified written cal options that remain equity classified after modification or exchange. The ASU requires an issuer to determine the accounting for the modification or exchange based on the economic substance of the modification or exchange. The adoption of this ASU did not have a material impact on our consolidated financial statements.
		6

Accounting for Convertible Instruments and Contracts in an Entity’s Own EquityEffective January 1, 2022, we adopted ASU 2020-06 on a modified retrospective basis. The new standard was issued in August 2020 to simplify accounting for certain financial instruments. The ASU eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The ASU also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. The ASU amends the diluted earnings per share guidance, including the requirement to use if-converted method for al convertible instruments and an update for instruments that can be settled in either cash or shares. The adoption of this ASU did not have a material impact on our consolidated financial statements.
3. REVENUE
REVENUE FROM CONTRACTS WITH CUSTOMERSMajor Products and Services
		Gas		Gas
			Transmission		Distribution	Renewable
	Liquids	and		and		Power	Energy	Eliminations	Three months endedJune 30, 2022(mil ions of Canadian dol ars)
	Pipelines		Midstream	Storage		Generation	Services	and Other Consolidated

Transportation revenue		2,565	1,200		157					—	—	—	3,922
Storage and other revenue		64	83		99					—	—	—	246
Gas gathering and processing
revenue		—	6		—					—	—	—	6
Gas distribution revenue		—	—		919					—	—	—	919
Electricity and transmission
revenue		—	—		—					81	—	—	81
Total revenue from contracts with
customers		2,629	1,289		1,175					81	—	—	5,174
Commodity sales		—	—		—					—	8,108	—	8,108
Other revenue1,2		(145)	11		(37)					74	30	—	(67)
Intersegment revenue		154	1		—					—	—	(155)	—
Total revenue		2,638	1,301		1,138					155	8,138	(155)		13,215
		Gas		Gas
			Transmission		Distribution	Renewable
	Liquids	and		and		Power	Energy	Eliminations	Three months endedJune 30, 2021(mil ions of Canadian dol ars)
	Pipelines		Midstream	Storage		Generation	Services	and Other Consolidated

Transportation revenue		2,157	1,046		150					—	—	—	3,353
Storage and other revenue		37	63		51					—	—	—	151
Gas gathering and processing
revenue		—	10		—					—	—	—	10
Gas distribution revenue		—	—		725					—	—	—	725
Electricity and transmission
revenue		—	—		—					55	—	—	55
Total revenue from contracts with
customers		2,194	1,119		926					55	—	—	4,294
Commodity sales		—	—		—					—	6,334	—	6,334
Other revenue1,2		215	9		12					77	1	6	320
Intersegment revenue		138	—		15					—	10	(163)	—
Total revenue		2,547	1,128		953					132	6,345	(157)		10,948
					7

	Gas		Gas
		Transmission		Distribution	Renewable
Liquids	and		and		Power	Energy	Eliminations	Six months endedJune 30, 2022(mil ions of Canadian dol ars)
PipelinesMidstreamStorage		Generation	Services	and Other Consolidated

								Transportation revenue	5,250	2,394	408	—	—	—	8,052
								Storage and other revenue	115	167	146	—	—	—	428
								Gas gathering and processing
								revenue	—	21	—	—	—	—	21
								Gas distribution revenue	—	—	3,017	—	—	—	3,017
								Electricity and transmission
								revenue	—	—	—	143	—	—	143
								Total revenue from contracts with
								customers	5,365	2,582	3,571	143	—	—		11,661
								Commodity sales	—	—	—	— 16,433	—	16,433
								Other revenue1,2	33	18	(33)	168	32	—	218
								Intersegment revenue	295	1	11	—	10	(317)	—
								Total revenue	5,693	2,601	3,549	311 16,475	(317)	28,312
	Gas		Gas
		Transmission		Distribution	Renewable
Liquids	and		and		Power	Energy	Eliminations	Six months endedJune 30, 2021(mil ions of Canadian dol ars)
PipelinesMidstreamStorage		Generation	Services	and Other Consolidated

								Transportation revenue	4,486	2,167	366	—	—	—	7,019
								Storage and other revenue	63	137	109	—	—	—	309
								Gas gathering and processing
								revenue	—	17	—	—	—	—	17
								Gas distribution revenue	—	—	2,259	—	—	—	2,259
								Electricity and transmission
								revenue	—	—	—	81	—	—	81
								Total revenue from contracts with
								customers	4,549	2,321	2,734	81	—	—	9,685
								Commodity sales	—	—	—	— 12,763	—	12,763
								Other revenue1,2	427	21	18	168	1	2	637
								Intersegment revenue	270	—	24	—	14	(308)	—
								Total revenue	5,246	2,342	2,776	249 12,778	(306)	23,085
								1 Includes mark-to-market gains/(losses) from our hedging program for the three months ended June 30, 2022 and 2021 of $198
								mil ion loss and $131 mil ion gain, respectively. For the six months ended June 30, 2022 and 2021, Other revenue includes a $104 mil ion mark-to-market loss and a $261 mil ion mark-to-market gain, respectively.
								2 Includes revenues from lease contracts for the three months ended June 30, 2022 and 2021 of $143 mil ion and $143 mil ion,
								respectively, and for the six months ended June 30, 2022 and 2021 of $307 mil ion and $302 mil ion, respectively.
								We disaggregate revenues into categories which represent our principal performance obligations within each business segment. These revenue categories represent the most significant revenue streams in each segment and consequently are considered to be the most relevant revenue information for management to consider in evaluating performance.
				8

Contract Balances
	Contract	Contract	Contract
	Receivables	Assets	Liabilities
(mil ions of Canadian dol ars)Balance as at June 30, 2022
					2,256	223	2,043
Balance as at December 31, 2021					2,369	213	1,898
Contract receivables represent the amount of receivables derived from contracts with customers.
Contract assets represent the amount of revenues which have been recognized in advance of payments received for performance obligations we have fulfil ed (or partial y fulfil ed) and prior to the point in time at which our right to payment is unconditional. Amounts included in contract assets are transferred to accounts receivable when our right to receive the consideration becomes unconditional.
Contract liabilities represent payments received for performance obligations which have not been fulfil ed. Contract liabilities primarily relate to make-up rights and deferred revenues. Revenue recognized during the three and six months ended June 30, 2022 included in contract liabilities at the beginning of the period is $21 mil ion and $82 mil ion, respectively. Increases in contract liabilities from cash received, net of amounts recognized as revenues, during the three and six months ended June 30, 2022 were $131 mil ion and $228 mil ion, respectively.
Performance ObligationsThere were no material revenues recognized in the three and six months ended June 30, 2022 from performance obligations satisfied in previous periods.
Revenues to be Recognized from Unfulfilled Performance ObligationsTotal revenues from performance obligations expected to be fulfil ed in future periods are $58.3 bil ion, of which $3.7 bil ion and $6.3 bil ion are expected to be recognized during the remaining six months ending December 31, 2022 and the year ending December 31, 2023, respectively.
The revenues excluded from the amounts above based on optional exemptions available under Accounting Standards Codification 606, as explained below, represent a significant portion of our overal revenues and revenues from contracts with customers. Certain revenues such as flow-through operating costs charged to shippers are recognized at the amount for which we have the right to invoice our customers and are excluded from the amounts for revenues to be recognized in the future from unfulfil ed performance obligations above. Variable consideration is excluded from the amounts above due to the uncertainty of the associated consideration, which is general y resolved when actual volumes and prices are determined. For example, we consider interruptible transportation service revenues to be variable revenues since volumes cannot be estimated. Additional y, the effect of escalation on certain tol s which are contractual y escalated for inflation has not been reflected in the amounts above as it is not possible to reliably estimate future inflation rates. Revenues for periods extending beyond the current rate settlement term for regulated contracts where the tol s are periodical y reset by the regulator are excluded from the amounts above since future tol s remain unknown. Final y, revenues from contracts with customers which have an original expected duration of one year or less are excluded from the amounts above.
				9

Variable ConsiderationDuring the three and six months ended June 30, 2022, revenue for the Canadian Mainline has been recognized in accordance with the terms of the Competitive Tol ing Settlement, which expired on June 30, 2021. The tol s in place on June 30, 2021 continue on an interim basis until a new commercial arrangement is implemented and are subject to finalization and adjustment applicable to the interim period, if any. Due to the uncertainty of adjustment to tol ing pursuant to a Canada Energy Regulator (CER) decision and potential customer negotiations, interim tol revenue recognized during the three and six months ended June 30, 2022 is considered variable consideration.
Recognition and Measurement of Revenues
		Gas
			Transmission	Gas		Renewable
	Liquids	and			Distribution	Power	Three months endedJune 30, 2022(mil ions of Canadian dol ars)
	Pipelines		Midstream		and Storage	Generation Consolidated

Revenues from products transferred at a point in time								—	—	20	—	20
Revenues from products and services transferred over
time1								2,629	1,289	1,155	81	5,154
Total revenue from contracts with customers								2,629	1,289	1,175	81	5,174
		Gas
			Transmission	Gas		Renewable
	Liquids	and			Distribution	Power	Three months endedJune 30, 2021(mil ions of Canadian dol ars)Revenues from products transferred at a point in time
	Pipelines		Midstream		and Storage	Generation Consolidated
								—	—	17	—	17
Revenues from products and services transferred over
time1								2,194	1,119	909	55	4,277
Total revenue from contracts with customers								2,194	1,119	926	55	4,294
		Gas
			Transmission	Gas		Renewable
	Liquids	and			Distribution	Power	Six months endedJune 30, 2022(mil ions of Canadian dol ars)
	Pipelines		Midstream		and Storage	Generation Consolidated

Revenues from products transferred at a point in time								—	—	36	—	36
Revenues from products and services transferred over
time1								5,365	2,582	3,535	143	11,625
Total revenue from contracts with customers								5,365	2,582	3,571	143	11,661
		Gas
			Transmission	Gas		Renewable
	Liquids	and			Distribution	Power	Six months endedJune 30, 2021(mil ions of Canadian dol ars)Revenues from products transferred at a point in time
	Pipelines		Midstream		and Storage	Generation Consolidated
								—	—	34	—	34
Revenues from products and services transferred over
time1								4,549	2,321	2,700	81	9,651
Total revenue from contracts with customers								4,549	2,321	2,734	81	9,685
1 Revenue from crude oil and natural gas pipeline transportation, storage, natural gas gathering, compression and treating, natural
gas distribution, natural gas storage services and electricity sales.
	10

4. SEGMENTED INFORMATION
		Gas		Gas
			Transmission		Distribution	Renewable
	Liquids	and		and		Power	Energy	Eliminations	Three months endedJune 30, 2022(mil ions of Canadian dol ars)
	Pipelines		Midstream	Storage		Generation	Services	and Other Consolidated

Operating revenues		2,638	1,301		1,138							155	8,138	(155)		13,215
Commodity and gas distribution
costs		(16)	—		(463)							(4) (8,305)	151		(8,637)
Operating and administrative		(976)	(545)		(281)							(53)	(11)	(128)		(1,994)
Income/(loss) from equity
investments		153	335		1							23	—	(2)	510
Other income/(expense)		19	28		22			1	1		(570)	(499)
Earnings/(loss) before interest,
income taxes, and depreciation and amortization
		1,818	1,119		417							122	(177)	(704)	2,595
Depreciation and amortization												(1,064)
Interest expense												(791)
Income tax expense												(133)
Earnings										607
Capital expenditures1		273	333		334							11	—	12	963
		Gas		Gas
			Transmission		Distribution	Renewable
	Liquids	and		and		Power	Energy	Eliminations	Three months endedJune 30, 2021(mil ions of Canadian dol ars)
	Pipelines		Midstream	Storage		Generation	Services	and Other Consolidated

Operating revenues		2,547	1,128		953							132	6,345	(157)		10,948
Commodity and gas distribution
costs		(7)	—		(299)							— (6,567)	154		(6,719)
Operating and administrative		(673)	(424)		(242)							(37)	(9)	(99)		(1,484)
Income from equity investments		180	132		27							13	—	—	352
Other income/(expense)		(3)	32		19			7	(8)		194	241
Earnings/(loss) before interest,
income taxes, and depreciation and amortization
		2,044	868		458							115	(239)	92	3,338
Depreciation and amortization										(929)
Interest expense										(618)

Income tax expense										(270)

Earnings												1,521
Capital expenditures1		567	547		300			2	—		9	1,425
					11

	Gas		Gas
		Transmission		Distribution	Renewable
Liquids	and		and		Power	Energy	Eliminations	Six months endedJune 30, 2022(mil ions of Canadian dol ars)
PipelinesMidstreamStorage		Generation	Services	and Other Consolidated

								Operating revenues		5,693	2,601		3,549						311 16,475	(317)		28,312
								Commodity and gas distribution
	(27)	—		(1,931)								(8) (16,732)	314	(18,384)
								costs
								Operating and administrative	(1,923)	(1,075)		(580)						(101)	(25)		(165)			(3,869)
								Income/(loss) from equity
								investments		368	556		1						78	—		(2)	1,001
								Other income/(expense)		36	51		43	4	4			(179)	(41)
								Earnings/(loss) before interest,
								income taxes, and depreciation and amortization
	4,147	2,133		1,082								284	(278)	(349)	7,019
								Depreciation and amortization				(2,119)
								Interest expense											(1,510)
								Income tax expense									(726)
								Earnings								2,664
								Capital expenditures1		818	562		600						17	—		24	2,021
	Gas		Gas
		Transmission		Distribution	Renewable
Liquids	and		and		Power	Energy	Eliminations	Six months endedJune 30, 2021(mil ions of Canadian dol ars)
PipelinesMidstreamStorage		Generation	Services	and Other Consolidated

								Operating revenues		5,246	2,342		2,776						249 12,778	(306)		23,085
								Commodity and gas distribution
								costs		(10)	—		(1,257)						— (12,920)	320		(13,867)
								Operating and administrative	(1,492)	(858)		(514)						(80)	(23)		(76)			(3,043)
								Income from equity investments		334	314		49						50	—		—	747
								Other income/(expense)		5	43		38						52	(10)		374	502
								Earnings/(loss) before interest,
								income taxes, and depreciation and amortization
	4,083	1,841		1,092								271	(175)	312	7,424
								Depreciation and amortization				(1,861)
								Interest expense				(1,275)

								Income tax expense		(753)

								Earnings									3,535
								Capital expenditures1		1,923	1,029		519	7	—			21	3,499
									1 Includes al owance for equity funds used during construction.
				12

5. EARNINGS PER COMMON SHARE AND DIVIDENDS PER SHARE
BASICEarnings per common share is calculated by dividing earnings attributable to common shareholders by the weighted average number of common shares outstanding. On December 30, 2021, we closed the sale of our minority ownership in Noverco Inc. (Noverco). For the three and six months ended June 30, 2021, the weighted average number of common shares outstanding was reduced by our pro-rata weighted average interest in our own common shares of approximately 2 mil ion and 3 mil ion, respectively, resulting from our reciprocal investment in Noverco.
DILUTEDThe treasury stock method is used to determine the dilutive impact of stock options and restricted stock units (RSU). This method assumes any proceeds from the exercise of stock options would be used to purchase common shares at the average market price during the period.
Weighted average shares outstanding used to calculate basic and diluted earnings per share are as fol ows:
	Three months ended		Six months ended
		June 30,		June 30,
		2022			2021	2022			2021
(number of shares in mil ions)
Weighted average shares outstanding		2,026				2,024	2,026			2,023
Effect of dilutive options and RSUs		4			2	4		1
Diluted weighted average shares outstanding		2,030				2,026	2,030			2,024
For the three months ended June 30, 2022 and 2021, 3.2 mil ion and 20.5 mil ion, respectively, of anti-dilutive stock options with a weighted average exercise price of $59.29 and $50.66, respectively, were excluded from the diluted earnings per common share calculation.
For the six months ended June 30, 2022 and 2021, 8.0 mil ion and 24.0 mil ion, respectively, of anti-dilutive stock options with a weighted average exercise price of $56.72 and $51.10, respectively, were excluded from the diluted earnings per common share calculation.
							13

DIVIDENDS PER SHAREOn July 26, 2022, our Board of Directors declared the fol owing quarterly dividends. Al dividends are payable on September 1, 2022 to shareholders of record on August 15, 2022.
	Dividend per share
Common Shares1		$0.86000
Preference Shares, Series A		$0.34375
Preference Shares, Series B2		$0.32513
Preference Shares, Series D		$0.27875
Preference Shares, Series F		$0.29306
Preference Shares, Series H		$0.27350
Preference Shares, Series L		US$0.30993
Preference Shares, Series N		$0.31788
Preference Shares, Series P		$0.27369
Preference Shares, Series R		$0.25456
Preference Shares, Series 1		US$0.37182
Preference Shares, Series 3		$0.23356
Preference Shares, Series 5		US$0.33596
Preference Shares, Series 7		$0.27806
Preference Shares, Series 9		$0.25606
Preference Shares, Series 11		$0.24613
Preference Shares, Series 13		$0.19019
Preference Shares, Series 15		$0.18644
Preference Shares, Series 19		$0.30625
1 The quarterly dividend per common share was increased 3% to $0.86 from $0.835, effective March 1, 2022.2 The quarterly dividend per share paid on Preference Shares, Series B was increased to $0.32513 from $0.21340 on June 1, 2022
due to reset of the annual dividend on June 1, 2022. On June 1, 2022, al outstanding Preference Shares, Series C were converted to Preference Shares, Series B.
PREFERENCE SHARE REDEMPTIONSOn March 1, 2022, we redeemed our $750 mil ion outstanding Cumulative Redeemable Minimum Rate Reset Preference Shares, Series 17. On June 1, 2022, we also redeemed our US$200 mil ion outstanding Cumulative Redeemable Preference Shares, Series J. Dividends are cumulative, payable quarterly and are included in Preference share dividends in the Consolidated Statements of Earnings.
6. DEBT
CREDIT FACILITIESThe fol owing table provides details of our committed credit facilities as at June 30, 2022:
				Total
			Maturity1	Facilities	Draws2	Available
(mil ions of Canadian dol ars)
Enbridge Inc.			2023-2026	10,818	9,153	1,665
Enbridge (U.S.) Inc.			2023-2026	7,095	4,493	2,602
Enbridge Pipelines Inc.			2024	2,000	797	1,203
Enbridge Gas Inc.			2023	2,000	1,620				380
Total committed credit facilities						21,913	16,063	5,850
	1 Maturity date is inclusive of the one-year term out option for certain credit facilities.2 Includes facility draws and commercial paper issuances that are back-stopped by credit facilities.
On February 10, 2022, we renewed our three year $1.0 bil ion sustainability-linked credit facility, extending the maturity date out to July 2025.
								14

On May 17, 2022, we entered into a three year term loan with a syndicate of Japanese banks for approximately $806 mil ion (¥84.8 bil ion), which wil mature in May 2025 and replaces the approximately $499 mil ion (¥52.5 bil ion) term loan that matured in May 2022. Additional y, on May 24, 2022, we entered into a 364-day term loan for approximately $1.9 bil ion, which wil mature in May 2023.
On June 23, 2022, we renewed approximately $5.5 bil ion of our 364-day extendible credit facilities to July 2024, which includes a one-year term out provision from July 2023.
On July 15 and 22, 2022, we renewed $3.0 bil ion of our five year credit facilities, extending the maturity date out to July 2027. We also extended approximately $4.8 bil ion of our 364-day extendible credit facilities to July 2024, which includes a one-year term out provision, from July 2023. As part of the renewal, we also increased our credit facilities by approximately $481 mil ion.
In addition to the committed credit facilities noted above, we maintain $1.3 bil ion of uncommitted demand letter of credit facilities, of which $791 mil ion was unutilized as at June 30, 2022. As at December 31, 2021, we had $1.3 bil ion of uncommitted demand letter of credit facilities, of which $854 mil ion was unutilized.
Our credit facilities carry a weighted average standby fee of 0.1% per annum on the unused portion and draws bear interest at market rates. Certain credit facilities serve as a back-stop to the commercial paper programs and we have the option to extend such facilities, which are currently scheduled to mature from 2023 to 2027.
As at June 30, 2022 and December 31, 2021, commercial paper and credit facility draws, net of short-term borrowings and non-revolving credit facilities that mature within one year, of $12.3 bil ion and $11.3 bil ion, respectively, were supported by the availability of long-term committed credit facilities and, therefore, have been classified as long-term debt.
LONG-TERM DEBT ISSUANCESDuring the six months ended June 30, 2022, we completed the fol owing long-term debt issuances totaling $750 mil ion and US$1.5 bil ion:
		Principal
Company	Issue Date	Amount
(mil ions of Canadian dol ars unless otherwise stated)Enbridge Inc.
	January 2022		5.00% hybrid fixed-to-fixed subordinated notes due January 2082	$750
	February 2022		Floating rate senior notes due February 20241	US$600
	February 2022		2.15% senior notes due February 2024	US$400
	February 2022		2.50% senior notes due February 2025	US$500
1 Notes carry an interest rate set to equal the Secured Overnight Financing Rate plus a margin of 63 basis points.
				15

LONG-TERM DEBT REPAYMENTSDuring the six months ended June 30, 2022, we completed the fol owing long-term debt repayments totaling US$784 mil ion and $334 mil ion:
		Principal
Company	Repayment Date	Amount
(mil ions of Canadian dol ars unless otherwise stated)Enbridge Inc.
	February 2022		Floating rate notes1	US$750
	February 2022		4.85% medium-term notes	$200
Enbridge Gas Inc.
	April 2022		4.85% medium-term notes	$125
Enbridge Pipelines (Southern Lights) L.L.C.
	June 2022		3.98% senior notes	US$34
Enbridge Southern Lights LP
	June 2022		4.01% senior notes	$9
1 Notes carried an interest rate set to equal the three-month London Interbank Offered Rate plus a margin of 50 basis points.
SUBORDINATED TERM NOTESAs at June 30, 2022 and December 31, 2021, our fixed-to-floating rate and fixed-to-fixed rate subordinated term notes had a principal value of $8.6 bil ion and $7.7 bil ion, respectively.
FAIR VALUE ADJUSTMENTAs at June 30, 2022 and December 31, 2021, the net fair value adjustments to total debt assumed in a historical acquisition were $635 mil ion and $667 mil ion, respectively.
During the three and six months ended June 30, 2022, amortization of the fair value adjustment recorded as a reduction to Interest expense in the Consolidated Statements of Earnings was $11 mil ion (June 30, 2021 - $13 mil ion) and $22 mil ion (June 30, 2021 - $25 mil ion), respectively.
DEBT COVENANTSOur credit facility agreements and term debt indentures include standard events of default and covenant provisions whereby accelerated repayment and/or termination of the agreements may result if we are to default on payment or violate certain covenants. As at June 30, 2022, we are in compliance with al covenant provisions.
					16

7. COMPONENTS OF ACCUMULATED OTHER COMPREHENSIVE INCOME/
(LOSS)
Changes in Accumulated other comprehensive income/(loss) (AOCI) attributable to our common shareholders for the six months ended June 30, 2022 and 2021 are as fol ows:
		Excluded				Pension
	Cash	Components	Net	Cumulative			and
	Flow	of Fair Value		Investment	Translation		Equity	OPEB
	Hedges	Hedges	Hedges	Adjustment		Investees	Adjustment	Total
(mil ions of Canadian dol ars)
Balance as at January 1, 2022		(897)			—	(166)				56	(5)	(84) (1,096)
Other comprehensive income/(loss)
retained in AOCI		854			(5)	(253)				1,136	—	— 1,732
Other comprehensive loss/(income)
reclassified to earningsInterest rate contracts1
		142			—	—				—	—	—	142
Foreign exchange contracts2		(4)			—	—				—	—	—	(4)
Other contracts3		2			—	—				—	—	—	2
Amortization of pension and OPEB
									actuarial gain4	—			—	—			—	—			(6)	(6)
		994			(5)	(253)				1,136	—				(6) 1,866
Tax impact
Income tax on amounts retained in
									AOCI	(202)			—	—			—	—	—	(202)
Income tax on amounts reclassified to
									earnings	(31)			—	—			—	—			1	(30)
		(233)			—	—				—	—				1	(232)
Balance as at June 30, 2022		(136)			(5)	(419)				1,192	(5)	(89)	538
		Excluded				Pension
	Cash	Components	Net	Cumulative			and
	Flow	of Fair Value		Investment	Translation		Equity	OPEB
	Hedges	Hedges	Hedges	Adjustment		Investees	Adjustment	Total
(mil ions of Canadian dol ars)Balance as at January 1, 2021
		(1,326)			5	(215)				568	66	(499) (1,401)
Other comprehensive income/(loss)
retained in AOCI		294			(2)	251				(1,584)	1	— (1,040)
Other comprehensive loss/(income)
reclassified to earningsInterest rate contracts1
		142			—	—				—	—	—	142
Foreign exchange contracts2		3			—	—				—	—	—	3
Other contracts3		1			—	—				—	—	—	1
Amortization of pension and OPEB
									actuarial loss4	—			—	—			—	—	14	14
Other		17			—	—				(20)	3	—	—
		457			(2)	251				(1,604)	4	14	(880)
Tax impact
Income tax on amounts retained in
									AOCI	(75)			—	(29)			—	1	—	(103)
Income tax on amounts reclassified to
									earnings	(33)			—	—			—	—			(3)	(36)
		(108)			—	(29)				—	1				(3)	(139)
Balance as at June 30, 2021		(977)			3	7				(1,036)	71	(488) (2,420)
	1 Reported within Interest expense in the Consolidated Statements of Earnings.2 Reported within Transportation and other services revenues and Net foreign currency gain/(loss) in the Consolidated Statements
of Earnings.
3 Reported within Operating and administrative expense in the Consolidated Statements of Earnings.4 These components are included in the computation of net periodic benefit costs and are reported within Other income/(expense)
in the Consolidated Statements of Earnings.
		17

8. RISK MANAGEMENT AND FINANCIAL INSTRUMENTS
MARKET RISKOur earnings, cash flows and other comprehensive income/(loss) (OCI) are subject to movements in foreign exchange rates, interest rates, commodity prices and our share price (col ectively, market risks). Formal risk management policies, processes and systems have been designed to mitigate these risks.
The fol owing summarizes the types of market risks to which we are exposed and the risk management instruments used to mitigate them. We use a combination of qualifying and non-qualifying derivative instruments to manage the risks noted below.
Foreign Exchange RiskWe generate certain revenues, incur expenses, and hold a number of investments and subsidiaries that are denominated in currencies other than Canadian dol ars. As a result, our earnings, cash flows and OCI are exposed to fluctuations resulting from foreign exchange rate variability.
We employ financial derivative instruments to hedge foreign currency denominated earnings exposure. A combination of qualifying cash flow, fair value and non-qualifying derivative instruments is used to hedge anticipated foreign currency denominated revenues and expenses, and to manage variability in cash flows. We hedge certain net investments in United States (US) dol ar denominated investments and subsidiaries using US dol ar denominated debt.
Interest Rate RiskOur earnings and cash flows are exposed to short-term interest rate variability due to the regular repricing of our variable rate debt, primarily commercial paper. We monitor our debt portfolio mix of fixed and variable rate debt instruments to manage a consolidated portfolio of floating rate debt within the Board of Directors approved policy limit of a maximum of 30% of floating rate debt as a percentage of total debt outstanding. We primarily use qualifying derivative instruments to manage interest rate risk. Pay fixed-receive floating interest rate swaps may be used to hedge against the effect of future interest rate movements. We have implemented a program to mitigate the impact of short-term interest rate volatility on interest expense via execution of floating-to-fixed interest rate swaps with an average swap rate of 1.9%.
We are exposed to changes in the fair value of fixed rate debt that arise as a result of the changes in market interest rates. Pay floating-receive fixed interest rate swaps are used, when applicable, to hedge against future changes to the fair value of fixed rate debt which mitigates the impact of fluctuations in the fair value of fixed rate debt via execution of fixed-to-floating interest rate swaps. As at June 30, 2022, we do not have any pay floating-receive fixed interest rate swaps outstanding.
Our earnings and cash flows are also exposed to variability in longer term interest rates ahead of anticipated fixed rate term debt issuances. Forward starting interest rate swaps are used to hedge against the effect of future interest rate movements. We have established a program including some of our subsidiaries to mitigate our exposure to long-term interest rate variability on select forecast term debt issuances via execution of floating-to-fixed interest rate swaps with an average swap rate of 2.2%.
Commodity Price RiskOur earnings and cash flows are exposed to changes in commodity prices as a result of our ownership interests in certain assets and investments, as wel as through the activities of our energy services subsidiaries. These commodities include natural gas, crude oil, power and natural gas liquids (NGL). We employ financial and physical derivative instruments to fix a portion of the variable price exposures that arise from physical transactions involving these commodities. We use primarily non-qualifying derivative instruments to manage commodity price risk.
	18

Equity Price RiskEquity price risk is the risk of earnings fluctuations due to changes in our share price. We have exposure to our own common share price through the issuance of various forms of stock-based compensation, which affect earnings through revaluation of the outstanding units every period. We use equity derivatives to manage the earnings volatility derived from one form of stock-based compensation, restricted share units. We use a combination of qualifying and non-qualifying derivative instruments to manage equity price risk.
TOTAL DERIVATIVE INSTRUMENTSWe general y have a policy of entering into individual International Swaps and Derivatives Association, Inc. (ISDA) agreements, or other similar derivative agreements, with the majority of our financial derivative counterparties. These agreements provide for the net settlement of derivative instruments outstanding with specific counterparties in the event of bankruptcy or other significant credit events, and reduce our credit risk exposure on financial derivative asset positions outstanding with the counterparties in those circumstances.
The fol owing table summarizes the Consolidated Statements of Financial Position location and carrying value of our derivative instruments, as wel as the maximum potential settlement amounts in the event of the specific circumstances described above. Al amounts are presented gross in the Consolidated Statements of Financial Position.
	Derivative	Derivative
	Instruments	Instruments	Non-		Total Gross
	Used as	Used as	QualifyingDerivative		Derivative	Amounts	Total Net
	Cash Flow	Fair Value			Instruments	Available	Derivative
June 30, 2022	Hedges	Hedges		Instruments	as Presented	for Offset	Instruments
(mil ions of Canadian dol ars)Accounts receivable and other
Foreign exchange contracts								—	—	140	140		(41)		99
Interest rate contracts								341	—	1	342		(21)	321
Commodity contracts								—	—	358	358		(254)	104
Other contracts								2	—	6	8				—	8
								343	—	505	848	1	(316)	532
Deferred amounts and other assets
Foreign exchange contracts								—	20	183	203		(123)		80
Interest rate contracts								566	—	—	566				—	566
Commodity contracts								—	—	60	60		(22)		38
Other contracts								2	—	2	4				—	4
								568	20	245	833		(145)	688
Accounts payable and other
Foreign exchange contracts								—	(31)	(221)	(252)		41	(211)
Interest rate contracts								(10)	—	(41)	(51)		21	(30)
Commodity contracts								(23)	—	(415)	(438)	254	(184)
								(33)	(31)	(677)	(741)	1	316	(425)
Other long-term liabilities
Foreign exchange contracts								—	(8)	(574)	(582)	123	(459)
Interest rate contracts								(3)	—	—	(3)		—	(3)
Commodity contracts								(19)	—	(119)	(138)		22	(116)
								(22)	(8)	(693)	(723)	145	(578)
Total net derivative assets/(liabilities)
Foreign exchange contracts								—	(19)	(472)	(491)		—	(491)
Interest rate contracts								894	—	(40)	854				—	854
Commodity contracts								(42)	—	(116)	(158)		—	(158)
Other contracts								4	—	8	12				—	12
								856	(19)	(620)	217				—	217
1 As at June 30, 2022, $84 mil ion and $128 mil ion were reported within Accounts receivable from affiliates and Accounts payable
to affiliates, respectively, in the Consolidated Statements of Financial Position.
		19

	Derivative	Derivative
	Instruments	Instruments	Non-		Total Gross
	Used as	Used as	QualifyingDerivative		Derivative	Amounts	Total Net
	Cash Flow	Fair Value			Instruments	Available	Derivative
December 31, 2021	Hedges	Hedges		Instruments	as Presented	for Offset	Instruments
(mil ions of Canadian dol ars)Accounts receivable and other
Foreign exchange contracts								—	—	259							259	(41)	218
Interest rate contracts								64	—	—							64	—	64
Commodity contracts								—	—	204							204	(129)				75
Other contracts								—	—	2							2	—	2
								64	—	465							529	(170)	359
Deferred amounts and other assets
Foreign exchange contracts								—	—	240							240	(61)	179
Interest rate contracts								88	—	—							88	(1)	87
Commodity contracts								—	—	29							29	(13)				16
Other contracts								—	—	3							3	—	3
								88	—	272							360	(75)	285
Accounts payable and other
Foreign exchange contracts								(15)	(112)	(176)							(303)	41	(262)
Interest rate contracts		(150)								—	—							(150)	—	(150)
Commodity contracts								(14)	—	(250)							(264)	129	(135)
		(179)	(112)	(426)							(717)	170	(547)
Other long-term liabilities
Foreign exchange contracts								—	—	(423)							(423)	61	(362)
Interest rate contracts								(1)	—	(23)							(24)	1	(23)
Commodity contracts								(17)	—	(67)							(84)	13	(71)
								(18)	—	(513)							(531)	75	(456)
Total net derivative assets/(liabilities)
Foreign exchange contracts								(15)	(112)	(100)							(227)	—	(227)
Interest rate contracts								1	—	(23)							(22)	—	(22)
Commodity contracts								(31)	—	(84)							(115)	—	(115)
Other contracts								—	—	5							5	—	5
								(45)	(112)	(202)							(359)	—	(359)
The fol owing table summarizes the maturity and notional principal or quantity outstanding related to our derivative instruments.
June 30, 2022		2022		2023	2024		2025	2026 Thereafter	Total
Foreign exchange contracts - US dol ar forwards -
purchase (mil ions of US dol ars)			762	— 1,000		500	—	— 2,262
Foreign exchange contracts - US dol ar forwards - sel
(mil ions of US dol ars)		4,900 6,384 5,134 3,962 3,362									1,082 24,824
Foreign exchange contracts - British pound (GBP)
forwards - sel (mil ions of GBP)									14	29	30		30	28	32	163
Foreign exchange contracts - Euro forwards - sel (mil ions
of Euro)									68	92	91		86	85					343	765
Foreign exchange contracts - Japanese yen forwards -
purchase (mil ions of yen)									—	—	— 84,800			—	— 84,800
Interest rate contracts - short-term debt pay fixed rate
(mil ions of Canadian dol ars)		5,242 1,346	132		30	26	64 6,840
Interest rate contracts - long-term debt pay fixed rate
(mil ions of Canadian dol ars)		3,052 2,626 1,718			573	—	— 7,969
Equity contracts (mil ions of Canadian dol ars)									—	36	30		11	—	—	77
Commodity contracts - natural gas (bil ions of cubic feet)1			120	47	17		11	—	—	195
Commodity contracts - crude oil (mil ions of barrels)1									10	—	—							—	—	—	10
Commodity contracts - power (megawatt per hour) (MW/H)		(24)	(43)	(43)		(43)	—	—	(40) 2
1 Total is a net purchase/(sale) of underlying commodity.2 Total is an average net purchase/(sale) of power.
		20

Fair Value DerivativesFor foreign exchange derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivative is included in Net foreign currency gain/(loss) or Interest expense in the Consolidated Statements of Earnings. The offsetting loss or gain on the hedged item attributable to the hedged risk is included in Net foreign currency gain/(loss) in the Consolidated Statements of Earnings. Any excluded components are included in the Consolidated Statements of Comprehensive Income.
	Three months ended		Six months ended
		June 30,		June 30,
		2022			2021	2022			2021
(mil ions of Canadian dol ars)Unrealized gain/(loss) on derivative
		23			(32)	99		(35)
Unrealized gain/(loss) on hedged item		(2)			32	(89)		28
Realized loss on derivative		(21)			—	(96)		(39)
Realized gain on hedged item		—			—	85		45
The Effect of Derivative Instruments on the Statements of Earnings and Comprehensive IncomeThe fol owing table presents the effect of cash flow hedges and fair value hedges on our consolidated earnings and consolidated comprehensive income, before the effect of income taxes:
	Three months ended		Six months ended
		June 30,		June 30,
		2022			2021	2022			2021
(mil ions of Canadian dol ars)Amount of unrealized gain/(loss) recognized in OCI
Cash flow hedges
							Foreign exchange contracts		—	(5)	2	(25)
							Interest rate contracts		480	(203)	857		294
							Commodity contracts		(15)	4	(11)	(4)
							Other contracts		(3)	1	—	4
Fair value hedges
							Foreign exchange contracts		(4)	(1)	(5)	(2)
		458			(204)	843			267
Amount of (gain)/loss reclassified from AOCI to earnings
Foreign exchange contracts1		—			2	13		3
Interest rate contracts2		66			79	142			142
Commodity contracts		—			(1)	—		—
Other contracts3		—			1	2		1
									66	81	157		146
1 Reported within Transportation and other services revenues and Net foreign currency gain/(loss) in the Consolidated Statements
of Earnings.
2 Reported within Interest expense in the Consolidated Statements of Earnings.3 Reported within Operating and administrative expense in the Consolidated Statements of Earnings.
We estimate that a gain of $68 mil ion of AOCI related to unrealized cash flow hedges wil be reclassified to earnings in the next 12 months. Actual amounts reclassified to earnings depend on the foreign exchange rates, interest rates and commodity prices in effect when derivative contracts that are currently outstanding mature. For al forecasted transactions, the maximum term over which we are hedging exposures to the variability of cash flows is 42 months as at June 30, 2022.
								21

Non-Qualifying DerivativesThe fol owing table presents the unrealized gains and losses associated with changes in the fair value of our non-qualifying derivatives:
	Three months ended		Six months ended
		June 30,		June 30,
		2022			2021	2022			2021
(mil ions of Canadian dol ars)Foreign exchange contracts1
		(806)			218	(373)			454
Interest rate contracts2		(16)			—	(16)		2
Commodity contracts3		38			(90)	(30)		(18)
Other contracts4		—			5	4		10
Total unrealized derivative fair value gain/(loss), net		(784)			133	(415)			448
1 For the respective six months ended periods, reported within Transportation and other services revenues (2022 - $65 mil ion loss;
2021 - $292 mil ion gain) and Net foreign currency gain/(loss) (2022 - $308 mil ion loss; 2021 - $162 mil ion gain) in the Consolidated Statements of Earnings.
2 Reported as an (increase)/decrease within Interest expense in the Consolidated Statements of Earnings.3 For the respective six months ended periods, reported within Transportation and other services revenues (2022 - $25 mil ion gain;
2021 - $3 mil ion loss), Commodity sales (2022 - $109 mil ion gain; 2021 - $144 mil ion gain), Commodity costs (2022 - $167 mil ion loss; 2021 - $166 mil ion loss) and Operating and administrative expense (2022 - $3 mil ion gain; 2021 - $7 mil ion gain) in the Consolidated Statements of Earnings.
4 Reported within Operating and administrative expense in the Consolidated Statements of Earnings.
LIQUIDITY RISK
	Liquidity risk is the risk that we wil not be able to meet our financial obligations, including commitments and guarantees, as they become due. In order to mitigate this risk, we forecast cash requirements over a 12-month rol ing time period to determine whether sufficient funds wil be available and maintain substantial capacity under our committed bank lines of credit to address any contingencies. Our primary sources of liquidity and capital resources are funds generated from operations, the issuance of commercial paper and draws under committed credit facilities and long-term debt, which includes debentures and medium-term notes. Our shelf prospectuses with securities regulators enable ready access to either the Canadian or US public capital markets, subject to market conditions. In addition, we maintain sufficient liquidity through committed credit facilities with a diversified group of banks and institutions which, if necessary, enables us to fund al anticipated requirements for approximately one year without accessing the capital markets. We are in compliance with al the terms and conditions of our committed credit facility agreements and term debt indentures as at June 30, 2022. As a result, al credit facilities are available to us and the banks are obligated to fund and have been funding us under the terms of the facilities.
CREDIT RISK
	Entering into derivative instruments may result in exposure to credit risk from the possibility that a counterparty wil default on its contractual obligations. In order to mitigate this risk, we enter into risk management transactions primarily with institutions that possess strong investment grade credit ratings. Credit risk relating to derivative counterparties is mitigated through maintenance and monitoring of credit exposure limits and contractual requirements, netting arrangements and ongoing monitoring of counterparty credit exposure using external credit rating services and other analytical tools.
							22

We have credit concentrations and credit exposure, with respect to derivative instruments, in the fol owing counterparty segments:
	June 30,	December 31,
	2022		2021
(mil ions of Canadian dol ars)Canadian financial institutions
				638	424
US financial institutions				254	130
European financial institutions				350	181
Asian financial institutions				118	30
Other1				233	122
				1,593		887
	1 Other is comprised of commodity clearing house and physical natural gas and crude oil counterparties.
As at June 30, 2022, we did not provide any letters of credit in lieu of providing cash col ateral to our counterparties pursuant to the terms of the relevant ISDA agreements. We held no cash col ateral on derivative asset exposures as at June 30, 2022 and December 31, 2021.
Gross derivative balances have been presented without the effects of col ateral posted. Derivative assets are adjusted for non-performance risk of our counterparties using their credit default swap spread rates, and are reflected at fair value. For derivative liabilities, our non-performance risk is considered in the valuation.
Credit risk also arises from trade and other long-term receivables, and is mitigated through credit exposure limits and contractual requirements, assessment of credit ratings and netting arrangements. Within Enbridge Gas Inc., credit risk is mitigated by the utility's large and diversified customer base and the ability to recover an estimate for expected credit losses through the ratemaking process. We actively monitor the financial strength of large industrial customers, and in select cases, have obtained additional security to minimize the risk of default on receivables. General y, we utilize a loss al owance matrix which contemplates historical credit losses by age of receivables, adjusted for any forward-looking information and management expectations to measure lifetime expected credit losses of receivables. The maximum exposure to credit risk related to non-derivative financial assets is their carrying value.
FAIR VALUE MEASUREMENTSOur financial assets and liabilities measured at fair value on a recurring basis include derivative and other financial instruments. We also disclose the fair value of other financial instruments not measured at fair value. The fair value of financial instruments reflects our best estimates of market value based on general y accepted valuation techniques or models and is supported by observable market prices and rates. When such values are not available, we use discounted cash flow analysis from applicable yield curves based on observable market inputs to estimate fair value.
FAIR VALUE OF FINANCIAL INSTRUMENTSWe categorize our financial instruments measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement.
Level 1Level 1 includes financial instruments measured at fair value based on unadjusted quoted prices for identical assets and liabilities in active markets that are accessible at the measurement date. An active market for a financial instrument is considered to be a market where transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Our Level 1 instruments consist primarily of exchange-traded derivatives used to mitigate the risk of crude oil price fluctuations, investments in exchange-traded equity funds held by our captive insurance subsidiaries, as wel as restricted long-term investments in Canadian equity securities that are held in trust in accordance with the CER's regulatory requirements under the Land Matters Consultation Initiative (LMCI).
					23

Level 2Level 2 includes financial instrument valuations determined using directly or indirectly observable inputs other than quoted prices included within Level 1. Financial instruments in this category are valued using models or other industry standard valuation techniques derived from observable market data. Such valuation techniques include inputs such as quoted forward prices, time value, volatility factors and broker quotes that can be observed or corroborated in the market for the entire duration of the financial instrument. Derivatives valued using Level 2 inputs include non-exchange traded derivatives such as over-the-counter foreign exchange forward and cross currency swap contracts, interest rate swaps, physical forward commodity contracts, as wel as commodity swaps and options for which observable inputs can be obtained.
We have also categorized the fair value of our long-term debt, investments in debt securities held by our captive insurance subsidiaries, and restricted long-term investments in Canadian government bonds held in trust in accordance with the CER's regulatory requirements under the LMCI as Level 2. The fair value of our available-for-sale preferred share investment is based on the redemption value, which equals the face value plus accrued and unpaid interest periodical y reset based on market interest rates. The fair value of our long-term debt is based on quoted market prices for instruments of similar yield, credit risk and tenor. When possible, the fair value of our restricted long-term investments is based on quoted market prices for similar instruments and, if not available, based on broker quotes.
Level 3Level 3 includes derivative valuations based on inputs which are less observable, unavailable or where the observable data does not support a significant portion of the derivative’s fair value. General y, Level 3 derivatives are longer dated transactions, occur in less active markets, occur at locations where pricing information is not available or have no binding broker quote to support Level 2 classification. We have developed methodologies, benchmarked against industry standards, to determine fair value for these derivatives based on extrapolation of observable future prices and rates. Derivatives valued using Level 3 inputs primarily include long-dated derivative power, NGL and natural gas contracts, basis swaps, commodity swaps, and power and energy swaps, as wel as physical forward commodity contracts. We do not have any other financial instruments categorized in Level 3.
We use the most observable inputs available to estimate the fair value of our derivatives. When possible, we estimate the fair value of our derivatives based on quoted market prices. If quoted market prices are not available, we use estimates from third party brokers. For non-exchange traded derivatives classified in Levels 2 and 3, we use standard valuation techniques to calculate the estimated fair value. These methods include discounted cash flows for forwards and swaps and Black-Scholes-Merton pricing models for options. Depending on the type of derivative and nature of the underlying risk, we use observable market prices (interest, foreign exchange, commodity and share price) and volatility as primary inputs to these valuation techniques. Final y, we consider our own credit default swap spread as wel as the credit default swap spreads associated with our counterparties in our estimation of fair value.
	24

We have categorized our derivative assets and liabilities measured at fair value as fol ows:
				Total Gross
				Derivative
June 30, 2022	Level 1	Level 2	Level 3	Instruments
(mil ions of Canadian dol ars)
Financial assets
Current derivative assets
					Foreign exchange contracts		—	140		—		140
					Interest rate contracts		—	342		—		342
					Commodity contracts		50	180	128			358
					Other contracts		—	8	—		8
							50	670	128			848
Long-term derivative assets
					Foreign exchange contracts		—	203		—		203
					Interest rate contracts		—	566		—		566
					Commodity contracts		—	23	37			60
					Other contracts		—	4	—		4
							—	796	37			833
Financial liabilities
Current derivative liabilities
					Foreign exchange contracts		—	(252)		—		(252)
					Interest rate contracts		—	(51)		—		(51)
					Commodity contracts		(9)	(256)	(173)			(438)
							(9)	(559)	(173)			(741)
Long-term derivative liabilities
					Foreign exchange contracts		—	(582)		—		(582)
					Interest rate contracts		—	(3)	—		(3)
					Commodity contracts		—	(39)	(99)			(138)
							—	(624)	(99)			(723)
Total net financial assets/(liabilities)
					Foreign exchange contracts		—	(491)		—		(491)
					Interest rate contracts		—	854		—		854
					Commodity contracts		41	(92)	(107)			(158)
					Other contracts		—	12		—		12
							41	283	(107)			217
						25

				Total Gross
				Derivative
December 31, 2021	Level 1	Level 2	Level 3	Instruments
(mil ions of Canadian dol ars)
Financial assets
Current derivative assets
Foreign exchange contracts						—	259		—			259
Interest rate contracts						—	64		—			64
Commodity contracts						38	71	95				204
Other contracts						—	2	—			2
						38	396	95				529
Long-term derivative assets
Foreign exchange contracts						—	240		—			240
Interest rate contracts						—	88		—			88
Commodity contracts						—	21		8			29
Other contracts						—	3	—			3
						—	352		8			360
Financial liabilities
Current derivative liabilities
Foreign exchange contracts						—	(303)		—			(303)
Interest rate contracts						—	(150)		—			(150)
Commodity contracts						(52)	(66)	(146)				(264)
						(52)	(519)	(146)				(717)
Long-term derivative liabilities
Foreign exchange contracts						—	(423)		—			(423)
Interest rate contracts						—	(24)		—			(24)
Commodity contracts						—	(19)	(65)				(84)
						—	(466)	(65)				(531)
Total net financial assets/(liabilities)
Foreign exchange contracts						—	(227)		—			(227)
Interest rate contracts						—	(22)		—			(22)
Commodity contracts						(14)					7	(108)		(115)
Other contracts						—	5	—			5
						(14)	(237)	(108)				(359)
The significant unobservable inputs used in the fair value measurement of Level 3 derivative instruments were as fol ows:
						Fair	Unobservable	Minimum	Maximum	Weighted					Unit of
June 30, 2022						Value	Input	Price	Price	Average Price	Measurement
(fair value in mil ions of Canadian dol ars)Commodity contracts - financial1
Natural gas						(11)	Forward gas price	5.10	8.55	6.65	$/mmbtu2
Crude							(8)			Forward crude price	84.71	135.22	105.63				$/barrel
Power						(65)			Forward power price	41.77	244.81	91.29				$/MW/H
Commodity contracts - physical1
Natural gas						(39)	Forward gas price	3.58	20.21	6.36	$/mmbtu2
Crude							16			Forward crude price	100.75	144.94	122.72				$/barrel
						(107)
1 Financial and physical forward commodity contracts are valued using a market approach valuation technique.2 One mil ion British thermal units (mmbtu).

					26

If adjusted, the significant unobservable inputs disclosed in the table above would have a direct impact on the fair value of our Level 3 derivative instruments. The significant unobservable inputs used in the fair value measurement of Level 3 derivative instruments include forward commodity prices. Changes in forward commodity prices could result in significantly different fair values for our Level 3 derivatives.
Changes in net fair value of derivative assets and liabilities classified as Level 3 in the fair value hierarchy were as fol ows:
	Six months ended
		June 30,
	2022		2021
(mil ions of Canadian dol ars)
Level 3 net derivative liability at beginning of period		(108)		(191)
Total gain/(loss)
Included in earnings1		14	(143)
Included in OCI		(11)	(12)
Settlements		(2)	168
Level 3 net derivative liability at end of period		(107)		(178)
1 Reported within Transportation and other services revenues, Commodity costs and Operating and administrative expense in the
Consolidated Statements of Earnings.
There were no transfers into or out of Level 3 as at June 30, 2022 or December 31, 2021.
NET INVESTMENT HEDGESWe currently have designated a portion of our US dol ar denominated debt, as wel as a portfolio of foreign exchange forward contracts in prior periods, as a hedge of our net investment in US dol ar denominated investments and subsidiaries.
During the six months ended June 30, 2022 and 2021, we recognized an unrealized foreign exchange loss of $257 mil ion and gain of $251 mil ion, respectively, on the translation of US dol ar denominated debt. During the six months ended June 30, 2022 and 2021, we recognized nil on the change in fair value of our outstanding foreign exchange forward contracts in OCI and nil in OCI associated with the settlement of foreign exchange forward contracts or with the settlement of US dol ar denominated debt that had matured during the period.
FAIR VALUE OF OTHER FINANCIAL INSTRUMENTSCertain long-term investments in other entities with no actively quoted prices are classified as Fair Value Measurement Alternative (FVMA) investments and are recorded at cost less impairment. The carrying value of FVMA investments totaled $52 mil ion as at June 30, 2022 and December 31, 2021.
We have Restricted long-term investments held in trust totaling $194 mil ion and $217 mil ion as at June 30, 2022 and December 31, 2021, respectively, which are classified as Level 1 in the fair value hierarchy. We also have Restricted long-term investments held in trust totaling $349 mil ion and $413 mil ion as at June 30, 2022 and December 31, 2021, respectively, which are classified as Level 2 in the fair value hierarchy. Level 1 and Level 2 Restricted long-term investments are recognized at fair value. These securities are classified as restricted funds which are col ected from customers and held in trust for the purpose of funding pipeline abandonment in accordance with regulatory requirements. There were unrealized holding losses of $71 mil ion and $131 mil ion for the three and six months ended June 30, 2022, respectively (2021 - gains of $20 mil ion and losses of $25 mil ion, respectively).
				27

We have whol y-owned captive insurance subsidiaries whose principal activity is providing insurance and reinsurance coverage for certain insurable property and casualty risk exposures in the US and Canada of our operating subsidiaries and certain equity investments. As at June 30, 2022, the fair value of investments in equity funds and debt securities held by our captive insurance subsidiaries was $322 mil ion (December 31, 2021 - $304 mil ion). These investments in equity funds and debt securities are recognized at fair value, classified as Level 1 and Level 2 in the fair value hierarchy, respectively, and are recorded in Long-term investments in the Consolidated Statements of Financial Position. There were unrealized holding losses of $19 mil ion and $27 mil ion for the three and six months ended June 30, 2022, respectively (2021 - gains of $4 mil ion and $3 mil ion, respectively).
As at June 30, 2022 and December 31, 2021, our long-term debt had a carrying value of $77.5 bil ion and $74.4 bil ion, respectively, before debt issuance costs and a fair value of $73.1 bil ion and $82.0 bil ion, respectively. We also have non-current notes receivable carried at book value and recorded in Deferred amounts and other assets in the Consolidated Statements of Financial Position. As at June 30, 2022 and December 31, 2021, the non-current notes receivable had a carrying value of $840 mil ion and $954 mil ion, respectively, which also approximates their fair value.
The fair value of financial assets and liabilities other than derivative instruments, long-term investments, restricted long-term investments, long-term debt and non-current notes receivable described above approximate their carrying value due to the short period to maturity.
9. INCOME TAXES
The effective income tax rates for the three months ended June 30, 2022 and 2021 were 18.0% and 15.1%, respectively, and for the six months ended June 30, 2022 and 2021 were 21.4% and 17.6%, respectively.
The period-over-period increases in the effective income tax rates were due to the effect of rate-regulated accounting for income taxes relative to earnings, an increase in US minimum tax, and the release of previously recognized uncertain tax positions in 2021.
10. PENSION AND OTHER POSTRETIREMENT BENEFITS
	Three months ended		Six months ended
		June 30,		June 30,
		2022			2021	2022			2021
(mil ions of Canadian dol ars)Service cost
		45			48	90		96
Interest cost1		41			32	82		64
Expected return on plan assets1		(98)			(84)	(196)			(168)
Amortization of actuarial (gain)/loss1		(1)			14	(2)		28
Net periodic benefit (credit)/cost		(13)			10	(26)		20
1 Reported within Other income/(expense) in the Consolidated Statements of Earnings.
							28

11. CONTINGENCIES
We and our subsidiaries are involved in various legal and regulatory actions and proceedings which arise in the normal course of business, including interventions in regulatory proceedings and chal enges to regulatory approvals and permits. While the final outcome of such actions and proceedings cannot be predicted with certainty, management believes that the resolution of such actions and proceedings wil not have a material impact on our interim consolidated financial position or results of operations.
TAX MATTERSWe and our subsidiaries maintain tax liabilities related to uncertain tax positions. While ful y supportable in our view, these tax positions, if chal enged by tax authorities, may not be ful y sustained on review.
	29