Enhanced Investments - Financial Portal

Published: 2020-11-06

ENBRIDGE INC.
	CONSOLIDATED FINANCIAL STATEMENTS
		(unaudited)
September 30, 2020

ENBRIDGE INC.
	CONSOLIDATED STATEMENTS OF EARNINGS
		Three months ended	Nine months ended
		September 30,	September 30,
				2020	2019	2020			2019
							(unaudited; millions of Canadian dollars, except per share amounts)Operating revenues
							Commodity sales	4,595			7,396	14,920		22,444
							Transportation and other services	4,075			3,748	11,609		12,188
							Gas distribution sales	440	454	2,550			3,085
							Total operating revenues (Note 3)	9,110			11,598	29,079		37,717
							Operating expenses
							Commodity costs	4,443			7,216	14,464		21,910
							Gas distribution costs	83	104	1,188			1,623
							Operating and administrative	1,554			1,741	4,955		5,061
							Depreciation and amortization	935	844	2,766			2,526
							Impairment of long-lived assets	—	105			—	105
							Total operating expenses	7,015			10,010	23,373		31,225
							Operating income	2,095			1,588	5,706		6,492
							Income from equity investments	315	333			805	1,159
							Impairment of equity investments (Note 9)	(615)	—	(2,351)			—
							Other income/(expense)
							Net foreign currency gain/(loss)	173	(43)	(257)			311
							Other	85	81			(8)	192
							Interest expense	(718)	(644)	(2,105)			(1,966)
							Earnings before income taxes	1,335			1,315	1,790		6,188
							Income tax expense (Note 11)	(231)	(255)	(273)			(1,275)
							Earnings	1,104			1,060	1,517		4,913
							Earnings attributable to noncontrolling interests	(20)	(15)			(25)	(50)
							Earnings attributable to controlling interests	1,084			1,045	1,492		4,863
							Preference share dividends	(94)	(96)	(284)			(287)
							Earnings attributable to common shareholders	990	949	1,208			4,576
							Earnings per common share attributable to common
				0.49	0.47	0.60			2.27
							shareholders (Note 5)
							Diluted earnings per common share attributable to
				0.49	0.47	0.60			2.27
							common shareholders (Note 5)
							See accompanying notes to the interim consolidated financial statements.
									1

ENBRIDGE INC.
	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
		Three months ended	Nine months ended
		September 30,	September 30,
				2020	2019	2020			2019

	(unaudited; mil ions of Canadian dol ars)

	Earnings		1,104			1,060	1,517			4,913
	Other comprehensive income/(loss), net of tax
	Change in unrealized gain/(loss) on cash flow hedges			29	(170)	(532)			(597)
	Change in unrealized gain/(loss) on net investment
	hedges			154	(74)	(221)			147
	Other comprehensive income/(loss) from equity
	investees			(14)	2			6	19
	Excluded components of fair value hedges			(1)	—			7	—
	Reclassification to earnings of loss on cash flow
	hedges			58	28			138	74
	Reclassification to earnings of pension and other
	postretirement benefits amounts			3	1			10	44
	Foreign currency translation adjustments		(1,119)			704	1,817			(1,898)
	Other comprehensive income/(loss), net of tax			(890)	491	1,225			(2,211)
	Comprehensive income			214	1,551	2,742			2,702
	Comprehensive (income)/loss attributable to
	noncontrol ing interests			16	(41)			(79)	23
	Comprehensive income attributable to control ing
	interests			230	1,510	2,663			2,725
	Preference share dividends			(94)	(96)	(284)			(287)
	Comprehensive income attributable to common
	shareholders			136	1,414	2,379			2,438
	See accompanying notes to the interim consolidated financial statements.
										2

ENBRIDGE INC.
	CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
		Three months ended	Nine months ended
		September 30,	September 30,
		2020			2019	2020			2019

				(unaudited; mil ions of Canadian dol ars, except per share amounts)
				Preference shares (Note 5)
	Balance at beginning and end of period		7,747			7,747	7,747			7,747
				Common shares (Note 5)
	Balance at beginning of period		64,763			64,732	64,746			64,677
	Shares issued on exercise of stock options							1	3				18	58
				Balance at end of period		64,764			64,735	64,764			64,735
				Additional paid-in capital
	Balance at beginning of period		207			194	187			—
	Stock-based compensation							6	7				25	28
	Options exercised							(1)	(2)	(19)			(51)
	Change in reciprocal interest							54	—				66	109
	Repurchase of noncontrol ing interest							—	—				—	65
	Other							(1)	7				6	55
				Balance at end of period		265			206	265			206
				Deficit
	Balance at beginning of period		(7,797)			(3,392)	(6,314)			(5,538)
	Earnings attributable to control ing interests		1,084			1,045	1,492			4,863
	Preference share dividends							(94)	(96)	(284)			(287)
	Dividends paid to reciprocal shareholder							4	5				14	14
	Common share dividends declared		(1,640)			(1,493)	(3,281)			(2,993)
	Modified retrospective adoption of ASU 2016-13 Financial Instruments - Credit
	Losses (Note 2)							—	—	(66)			—
	Other							1	(1)				(3)	9
				Balance at end of period		(8,442)			(3,932)	(8,442)			(3,932)
				Accumulated other comprehensive income/(loss) (Note 8)
	Balance at beginning of period		1,753			124	(272)			2,672
	Other comprehensive income/(loss) attributable to common shareholders, net of
			(854)			465	1,171			(2,138)
	tax
	Other							—	(7)				—	48
				Balance at end of period		899			582	899			582
				Reciprocal shareholding
	Balance at beginning of period							(47)	(51)	(51)			(88)
	Change in reciprocal interest							18	—				22	37
				Balance at end of period							(29)	(51)	(29)		(51)
				Total Enbridge Inc. shareholders’ equity		65,204			69,287	65,204			69,287
				Noncontrol ing interests
	Balance at beginning of period		3,315			3,451	3,364			3,965
	Earnings attributable to noncontrol ing interests							20	15				25	50
	Other comprehensive income/(loss) attributable to noncontrol ing interests, net
	of tax
	Change in unrealized loss on cash flow hedges							—	(1)				(3)	(6)
	Foreign currency translation adjustments							(36)	27				57	(67)
								(36)	26				54	(73)

	Comprehensive income/(loss) attributable to noncontrol ing interests							(16)	41				79	(23)
	Contributions							1	1				21	10
	Distributions							(68)	(94)	(232)			(194)
	Repurchase of noncontrol ing interest							—	—				—	(65)
	Redemption of preferred shares held by subsidiary							—	—				—	(300)
	Other							(1)	(10)		(1)	(4)
				Balance at end of period		3,231			3,389	3,231			3,389
				Total equity		68,435			72,676	68,435			72,676
				Dividends paid per common share		0.810			0.738	2.430			2.214
				Earnings per common share attributable to common shareholders (Note 5)		0.49			0.47	0.60			2.27
				Diluted earnings per common share attributable to common shareholders (Note 5)		0.49			0.47	0.60			2.27
				See accompanying notes to the interim consolidated financial statements.
									3

ENBRIDGE INC.
	CONSOLIDATED STATEMENTS OF CASH FLOWS
		Nine months ended
		September 30,
				2020		2019
			(unaudited; mil ions of Canadian dol ars)
			Operating activities
			Earnings		1,517		4,913
			Adjustments to reconcile earnings to net cash provided by operating activities:
			Depreciation and amortization		2,766		2,526
			Deferred income tax (recovery)/expense					(82)	983
			Changes in unrealized (gain)/loss on derivative instruments, net (Note 10)					200	(1,005)
			Earnings from equity investments		(805)		(1,159)
			Distributions from equity investments		1,145		1,442
			Impairment of equity investments (Note 9)		2,351		—
			Impairment of long-lived assets				—	105
			Other					222	51
			Changes in operating assets and liabilities					213	(451)
			Net cash provided by operating activities		7,527		7,405
			Investing activities
			Capital expenditures		(3,790)		(3,928)
			Long-term investments and restricted long-term investments		(413)		(1,018)
			Distributions from equity investments in excess of cumulative earnings					438	285
			Additions to intangible assets		(154)		(136)
			Proceeds from dispositions					265	—
			Loans to affiliates, net				10	(232)
			Net cash used in investing activities		(3,644)		(5,029)
			Financing activities
			Net change in short-term borrowings				71	245
			Net change in commercial paper and credit facility draws					231	3,365
			Debenture and term note issues, net of issue costs		4,834		2,553
			Debenture and term note repayments		(3,517)		(2,994)
			Contributions from noncontrol ing interests				21	10
			Distributions to noncontrol ing interests		(232)		(194)
			Common shares issued				3	18
			Preference share dividends		(284)		(287)
			Common share dividends		(4,920)		(4,480)
			Redemption of preferred shares held by subsidiary				—	(300)
			Other					(52)	(60)
			Net cash used in financing activities		(3,845)		(2,124)
			Effect of translation of foreign denominated cash and cash equivalents and
						(22)	(17)
			restricted cash
			Net increase in cash and cash equivalents and restricted cash				16	235
			Cash and cash equivalents and restricted cash at beginning of period					676	637
			Cash and cash equivalents and restricted cash at end of period					692	872
			See accompanying notes to the interim consolidated financial statements.
							4

ENBRIDGE INC.
	CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
		September 30,		December 31,
			2020		2019
						(unaudited; mil ions of Canadian dol ars; number of shares in mil ions)
						Assets
						Current assets
	Cash and cash equivalents		657		648
	Restricted cash		35		28
	Accounts receivable and other		4,333		6,781
	Accounts receivable from affiliates		31		69
	Inventory		1,368		1,299
								6,424	8,825
						Property, plant and equipment, net		95,990	93,723
						Long-term investments		14,513	16,528
						Restricted long-term investments		527	434
						Deferred amounts and other assets		8,089	7,433
						Intangible assets, net		2,122	2,173
						Goodwil		33,832	33,153
						Deferred income taxes		991	1,000
						Total assets		162,488	163,269
						Liabilities and equity
						Current liabilities
	Short-term borrowings		969		898
	Accounts payable and other		6,381		10,063
	Accounts payable to affiliates		4		21
	Interest payable		628		624
	Current portion of long-term debt		3,616		4,404
								11,598	16,010
						Long-term debt		62,967	59,661
						Other long-term liabilities		9,253	8,324
						Deferred income taxes		10,235	9,867
								94,053	93,862
						Contingencies (Note 13)Equity

	Share capital
	Preference shares		7,747		7,747
	Common shares (2,025 outstanding at September 30, 2020 and December 31,
			64,764		64,746
	2019)
	Additional paid-in capital		265		187
	Deficit		(8,442)		(6,314)
	Accumulated other comprehensive income/(loss) (Note 8)		899		(272)
	Reciprocal shareholding		(29)		(51)
	Total Enbridge Inc. shareholders’ equity		65,204		66,043
	Noncontrol ing interests		3,231		3,364
								68,435	69,407
						Total liabilities and equity		162,488	163,269
						See accompanying notes to the 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 (U.S. GAAP) and Regulation S-X for interim consolidated financial information. They do not include al of the information and notes required by U.S. 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, 2019. 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, 2019, 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 the supply of and demand for crude oil and natural gas, and may not be indicative of annual results.
2. CHANGES IN ACCOUNTING POLICIES ADOPTION OF NEW ACCOUNTING STANDARDS Reference Rate ReformEffective July 1, 2020, we adopted Accounting Standards Update (ASU) 2020-04 on a prospective basis. The new standard was issued in March 2020 to provide temporary optional guidance in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying general y accepted accounting principles when accounting for contract modifications, hedging relationships and other transactions impacted by rate reform, subject to meeting certain criteria. ASU 2020-04 is effective until December 31, 2022. The adoption of this ASU did not have a material impact on our consolidated financial statements.
Clarifying Interaction between Collaborative Arrangements and Revenue from Contracts with CustomersEffective January 1, 2020, we adopted ASU 2018-18 on a retrospective basis. The new standard was issued in November 2018 to provide clarity on when transactions between entities in a col aborative arrangement should be accounted for under the new revenue standard, Accounting Standards Codification (ASC) 606. In determining whether transactions in col aborative arrangements should be accounted for under the revenue standard, the update specifies that entities shal apply unit of account guidance to identify distinct goods or services and whether such goods and services are separately identifiable from other promises in the contract. ASU 2018-18 also precludes entities from presenting transactions with a col aborative partner which are not in scope of the new revenue standard together with revenue from contracts with customers. The adoption of this ASU did not have a material impact on our consolidated financial statements.
		6

Disclosure EffectivenessEffective January 1, 2020, we adopted ASU 2018-13 on both a retrospective and prospective basis depending on the change. The new standard was issued to improve the disclosure requirements for fair value measurements by eliminating and modifying some disclosures, while also adding new disclosures. The adoption of this ASU did not have a material impact on our consolidated financial statements.
Accounting for Credit LossesEffective January 1, 2020, we adopted ASU 2016-13 on a modified retrospective basis.
The new standard was issued in June 2016 with the intent of providing financial statement users with more useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The previous accounting treatment used the incurred loss methodology for recognizing credit losses that delayed the recognition until it was probable a loss had been incurred. The accounting update adds a new impairment model, known as the current expected credit loss model, which is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an al owance its estimate of expected credit losses, which the Financial Accounting Standards Board believes results in more timely recognition of such losses.
Further, ASU 2018-19 was issued in November 2018 to clarify that operating lease receivables should be accounted for under the new leases standard, ASC 842, and are not within the scope of ASC 326, Financial Instruments - Credit Losses.
For accounts receivable, a loss al owance matrix is utilized to measure lifetime expected credit losses. The matrix contemplates historical credit losses by age of receivables, adjusted for any forward-looking information and management expectations. Other loan receivables and off-balance sheet commitments in scope of the new standard utilize a discounted cash flow methodology which calculates the current expected credit losses based on historical default probability rates associated with the credit rating of the counterparty and the related term of the loan or commitment, adjusted for forward-looking information and management expectations.
On January 1, 2020, we recorded $66 mil ion of additional Deficit on our Statements of Financial Position in connection with the adoption of ASU 2016-13. The adoption of this ASU did not have a material impact on the Consolidated Statements of Earnings, Comprehensive Income or Cash Flows during the period.
FUTURE ACCOUNTING POLICY CHANGES Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity ASU 2020-06 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. ASU 2020-06 is effective January 1, 2022 and should be applied on a ful or modified retrospective basis, with early adoption permitted on January 1, 2021. We are currently assessing the impact of the new standard on our consolidated financial statements.
	7

Clarifying Interaction between Equity Securities, Equity Method Investments and Derivatives
ASU 2020-01 was issued in January 2020 and clarifies that observable transactions should be considered for the purpose of applying the measurement alternative in accordance with ASC 321 immediately before the application or upon discontinuance of the equity method of accounting. Furthermore, the ASU clarifies that forward contracts or purchased options on equity securities are not out of scope of ASC 815 guidance only because, upon the contracts’ exercise, the equity securities could be accounted for under the equity method of accounting or fair value option. ASU 2020-01 is effective January 1, 2021, with early adoption permitted, and is applied prospectively. The adoption of ASU 2020-01 is not expected to have a material impact on our consolidated financial statements.
Accounting for Income TaxesASU 2019-12 was issued in December 2019 with the intent of simplifying the accounting for income taxes. The accounting update removes certain exceptions to the general principles in ASC 740 as wel as provides simplification by clarifying and amending existing guidance. ASU 2019-12 is effective January 1, 2021, and entities are permitted to adopt the standard early. We are currently assessing the impact of the new standard on our consolidated financial statements.
Disclosure EffectivenessASU 2018-14 was issued in August 2018 to improve disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendment modifies the current guidance by adding and removing several disclosure requirements while also clarifying the guidance on current disclosure requirements. ASU 2018-14 is effective January 1, 2021, and entities are permitted to adopt the standard early. The adoption of ASU 2018-14 is not expected to have a material impact on our consolidated financial statements.
3. REVENUES
REVENUE FROM CONTRACTS WITH CUSTOMERS Major Products and Services
		Gas		Gas
			Transmission		Distribution	Renewable
	Liquids	and		and		Power	Energy	Eliminations	Three months endedSeptember 30, 2020(mil ions of Canadian dol ars)
	Pipelines		Midstream	Storage		Generation	Services	and Other Consolidated

Transportation revenues		2,234	1,077		128					—	—		—	3,439
Storage and other revenues		22	64		51					—	—		—	137
Gas gathering and processing
		—	7		—					—	—		—	7
revenues
Gas distribution revenue		—	—		448					—	—		—	448
Electricity and transmission
revenues		—	—		—					46	—		—	46
Total revenue from contracts with
customers		2,256	1,148		627					46	—		—	4,077
Commodity sales		—	—		—					—	4,595		—	4,595
Other revenues1,2		360	14		(8)					80	(3)		(5)	438
Intersegment revenues		157	—		2					—	4	(163)	—
Total revenues		2,773	1,162		621					126	4,596		(168)	9,110
				8

	Gas		Gas
		Transmission		Distribution	Renewable
Liquids	and		and		Power	Energy	Eliminations	Three months endedSeptember 30, 2019(mil ions of Canadian dol ars)
PipelinesMidstreamStorage		Generation	Services	and Other Consolidated

								Transportation revenues	2,305	1,073		135			—	—		—	3,513
								Storage and other revenues	31	69		48			—	—		—	148
								Gas gathering and processing
	—	98		—							—	—	—	98
								revenues
								Gas distribution revenues	—	—		470			—	—		—	470
								Electricity and transmission
								revenues	—	—		—			46	—		—	46
								Total revenue from contracts with
								customers	2,336	1,240		653			46	—		—	4,275
								Commodity sales	—	—		—			—	7,396		—	7,396
								Other revenues1,2	(156)	23		(21)			82	(1)		—	(73)
								Intersegment revenues	88	1		3			—	8	(100)	—
								Total revenues	2,268	1,264		635			128	7,403		(100)		11,598
	Gas		Gas
		Transmission		Distribution	Renewable
Liquids	and		and		Power	Energy	Eliminations	Nine months endedSeptember 30, 2020(mil ions of Canadian dol ars)
PipelinesMidstreamStorage		Generation	Services	and Other Consolidated

								Transportation revenues	6,815	3,458		494			—	—		—		10,767
								Storage and other revenues	72	209		154			—	—		—	435
								Gas gathering and processing
	—	19		—							—	—	—	19
								revenues
								Gas distribution revenue	—	—		2,551			—	—		—	2,551
								Electricity and transmission
								revenues	—	—		—			150	—		—	150
								Total revenue from contracts with
								customers	6,887	3,686		3,199			150	—		—		13,922
								Commodity sales	—	—		—			— 14,920	—		14,920
								Other revenues1,2	(59)	35		(1)			279	1	(18)	237
								Intersegment revenues	424	1		8			—	22		(455)	—
								Total revenues	7,252	3,722		3,206			429 14,943	(473)		29,079
			9

	Gas		Gas
		Transmission		Distribution	Renewable
Liquids	and		and		Power	Energy	Eliminations	Nine months endedSeptember 30, 2019(mil ions of Canadian dol ars)
PipelinesMidstreamStorage		Generation	Services	and Other Consolidated

								Transportation revenues		6,749	3,323		555		—	—	—		10,627
								Storage and other revenues		83	168		154		—	—	—	405
								Gas gathering and processing
								revenues		—	329		—		—	—	—	329
								Gas distribution revenues		—	—		3,080		—	—	—	3,080
								Electricity and transmission
								revenues		—	—		—		139	—	—	139
								Commodity sales		—	3		—		—	—	—	3
								Total revenue from contracts with
								customers		6,832	3,823		3,789		139	—	—		14,583
								Commodity sales		—	—		—		— 22,441	—	22,441
								Other revenues1,2		383	43		5		278	(2)	(14)	693
								Intersegment revenues		280	4		9		—	55	(348)	—
								Total revenues		7,495	3,870		3,803		417 22,494	(362)	37,717
								1 Includes mark-to-market gains/(losses) from our hedging program for the three months ended September 30, 2020 and 2019 of
								$276 mil ion gain and $236 mil ion loss, respectively, and for the nine months ended September 30, 2020 and 2019 of $298 mil ion loss and $148 mil ion gain, respectively.
								2 Includes revenues from lease contracts for the three months ended September 30, 2020 and 2019 of $144 mil ion and $143
								mil ion, respectively, and for the nine months ended September 30, 2020 and 2019 of $459 mil ion and $458 mil ion, respectively.
								We disaggregate revenues into categories which represent our principal performance obligations within each business segment because 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.
								Contract Balances
							Contract		Contract
					Receivables		Assets		Liabilities
								(mil ions of Canadian dol ars)Balance as at December 31, 2019
						2,099	216					1,424
								Balance as at September 30, 2020		1,499	236			1,691
								Contract receivables represent the amount of receivables derived from contracts with customers.
								Contract assets represent the amount of revenues which has 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 nine months ended September 30, 2020 included in contract liabilities at the beginning of the period was $22 mil ion and $129 mil ion, respectively. Increases in contract liabilities from cash received, net of amounts recognized as revenues during the three and nine months ended September 30, 2020 were $189 mil ion and $369 mil ion, respectively.
								Performance Obligations There were no material revenues recognized in the three and nine months ended September 30, 2020 from performance obligations satisfied in previous periods.
				10

Revenues to be Recognized from Unfulfilled Performance ObligationsTotal revenues from performance obligations expected to be fulfil ed in future periods is $63.0 bil ion, of which $1.8 bil ion and $6.6 bil ion is expected to be recognized during the three months ending December 31, 2020 and the year ending December 31, 2021, respectively.
The revenues excluded from the amounts above based on optional exemptions available under ASC 606, as explained below, represent a significant portion of our overal revenues and revenue 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, revenue from contracts with customers which have an original expected duration of one year or less are excluded from the amounts above.
Recognition and Measurement of Revenues
		Gas		Gas
			Transmission		Distribution	Renewable
	Liquids	and		and		Power	Energy	Three months endedSeptember 30, 2020(mil ions of Canadian dol ars)
	Pipelines		Midstream	Storage		Generation	Services Consolidated

Revenues from products transferred at a point
in time		—	—		15			—	—	15
Revenues from products and services
transferred over time1		2,256	1,148		612			46	—	4,062
Total revenue from contracts with customers		2,256	1,148		627			46	—	4,077
		Gas		Gas
			Transmission		Distribution	Renewable
	Liquids	and		and		Power	Energy	Three months endedSeptember 30, 2019(mil ions of Canadian dol ars)Revenues from products transferred at a point
	Pipelines		Midstream	Storage		Generation	Services Consolidated
in time		—	—		17			—	—	17
Revenues from products and services
transferred over time1		2,336	1,240		636			46	—	4,258
Total revenue from contracts with customers		2,336	1,240		653			46	—	4,275
		Gas		Gas
			Transmission		Distribution	Renewable
	Liquids	and		and		Power	Energy	Nine months endedSeptember 30, 2020(mil ions of Canadian dol ars)
	Pipelines		Midstream	Storage		Generation	Services Consolidated

Revenues from products transferred at a point
in time		—	—		45			—	—	45
Revenues from products and services
transferred over time1		6,887	3,686		3,154					150	—	13,877
Total revenue from contracts with customers		6,887	3,686		3,199					150	—	13,922
			11

	Gas		Gas
		Transmission		Distribution	Renewable
Liquids	and		and		Power	Energy	Nine months endedSeptember 30, 2019(mil ions of Canadian dol ars)Revenues from products transferred at a point
PipelinesMidstreamStorage		Generation	Services Consolidated
							in time	—	3		51			—	—		54
							Revenues from products and services
							transferred over time1	6,832	3,820		3,738						139	—		14,529
							Total revenue from contracts with customers	6,832	3,823		3,789						139	—		14,583
							1 Revenues 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.
							4. SEGMENTED INFORMATION
Gas	Gas
Transmission		Distribution	Renewable
									Liquids	and	and		Power		Energy	Eliminations	Three months endedSeptember 30, 2020(mil ions of Canadian dol ars)
									Pipelines	Midstream	Storage		Generation		Services	and Other Consolidated

							Revenues			2,773	1,162	621		126		4,596	(168)		9,110
							Commodity and gas distribution
							costs			(5)	—	(87)		— (4,613)			179		(4,526)
							Operating and administrative			(811)	(432)	(243)		(57)		(15)						4	(1,554)
							Income/(loss) from equity
							investments			118	191	(13)		22						(3)		—	315
							Impairment of equity investments			—	(615)	—		—						—		—	(615)
							Other income			15	28	20		2						1	192	258
							Earnings/(loss) before interest,
							income taxes, and depreciation and amortization
										2,090	334	298		93		(34)	207		2,988
							Depreciation and amortization					(935)
							Interest expense																(718)
							Income tax expense																(231)
							Earnings													1,104
							Capital expenditures1			442	642	339		11						1	22	1,457
Gas	Gas
Transmission		Distribution	Renewable
									Liquids	and	and		Power		Energy	Eliminations	Three months endedSeptember 30, 2019(mil ions of Canadian dol ars)
									Pipelines	Midstream	Storage		Generation		Services	and Other Consolidated

							Revenues			2,268	1,264	635		128		7,403	(100)		11,598
							Commodity and gas distribution
							costs			(12)	—	(132)		— (7,287)			111		(7,320)
							Operating and administrative			(815)	(550)	(267)		(55)		(19)	(35)		(1,741)
							Impairment of long-lived assets			—	(105)	—		—						—		—	(105)
							Income/(loss) from equity
							investments			205	135	(11)		5						—		(1)	333
							Other income/(expense)			—	28	27		4						(6)	(15)	38
							Earnings/(loss) before interest,
							income taxes, and depreciation and amortization
										1,646	772	252		82						91	(40)	2,803
							Depreciation and amortization					(844)
							Interest expense					(644)

							Income tax expense					(255)

							Earnings																1,060
							Capital expenditures1			442	436	247		2						—	32	1,159
		12

	Gas		Gas
		Transmission		Distribution	Renewable
Liquids	and		and		Power	Energy	Eliminations	Nine months endedSeptember 30, 2020(mil ions of Canadian dol ars)
PipelinesMidstreamStorage		Generation	Services	and Other Consolidated

								Revenues		7,252	3,722		3,206						429 14,943	(473)		29,079
								Commodity and gas distribution
								costs		(13)	—		(1,213)						— (14,877)	451		(15,652)
								Operating and administrative	(2,458)	(1,377)		(761)						(144)	(72)		(143)			(4,955)
								Income/(loss) from equity
								investments		463	284		2						59	(3)		—	805
								Impairment of equity investments		—	(2,351)		—						—	—		—			(2,351)
								Other income/(expense)		36	(48)		51						32	(3)		(333)	(265)
								Earnings/(loss) before interest,
								income taxes, and depreciation and amortization
	5,280	230		1,285								376	(12)	(498)	6,661
								Depreciation and amortization				(2,766)
								Interest expense											(2,105)
								Income tax expense									(273)
								Earnings								1,517
								Capital expenditures1		1,503	1,462		765						41	2	63	3,836
	Gas		Gas
		Transmission		Distribution	Renewable
Liquids	and		and		Power	Energy	Eliminations	Nine months endedSeptember 30, 2019(mil ions of Canadian dol ars)
PipelinesMidstreamStorage		Generation	Services	and Other Consolidated

								Revenues		7,495	3,870		3,803						417 22,494	(362)		37,717
								Commodity and gas distribution
								costs		(25)	—		(1,740)						(2) (22,125)	359		(23,533)
								Operating and administrative	(2,392)	(1,626)		(829)						(137)	(53)		(24)			(5,061)
								Impairment of long-lived assets		—	(105)		—						—	—		—	(105)
								Income from equity investments		606	525		2						23	3	—	1,159
								Other income/(expense)		26	69		68						(1)	(1)		342	503
								Earnings before interest, income
								taxes, and depreciation and amortization
	5,710	2,733		1,304								300	318	315			10,680
								Depreciation and amortization				(2,526)
								Interest expense				(1,966)

								Income tax expense				(1,275)

								Earnings									4,913
								Capital expenditures1		1,984	1,254		643						18	2	71	3,972
									1 Includes al owance for equity funds used during construction.
								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. The weighted average number of common shares outstanding has been reduced by our pro-rata weighted average interest in our own common shares of 5 mil ion for the three and nine months ended September 30, 2020 and 6 mil ion for the three and nine months ended September 30, 2019, resulting from our reciprocal investment in Noverco Inc. (Noverco).
				13

DILUTEDThe treasury stock method is used to determine the dilutive impact of stock options. 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	Nine months ended
	September 30,	September 30,
			2020	2019	2020			2019
(number of common shares in mil ions)
Weighted average shares outstanding		2,021			2,018	2,020			2,017
Effect of dilutive options			—	2		1	3
Diluted weighted average shares outstanding		2,021			2,020	2,021			2,020
For the three months ended September 30, 2020 and 2019, 34.1 mil ion and 21.9 mil ion, respectively, anti-dilutive stock options with a weighted average exercise price of $50.55 and $52.75, respectively, were excluded from the diluted earnings per common share calculation.
For the nine months ended September 30, 2020 and 2019, 28.5 mil ion and 17.9 mil ion, respectively, anti-dilutive stock options with a weighted average exercise price of $51.85 and $53.48, respectively, were excluded from the diluted earnings per common share calculation.
							14

DIVIDENDS PER SHAREOn November 3, 2020, our Board of Directors declared the fol owing quarterly dividends. Al dividends are payable on December 1, 2020 to shareholders of record on November 13, 2020.
	Dividend per share
Common Shares1		$0.81000
Preference Shares, Series A		$0.34375
Preference Shares, Series B		$0.21340
Preference Shares, Series C2		$0.15975
Preference Shares, Series D		$0.27875
Preference Shares, Series F		$0.29306
Preference Shares, Series H		$0.27350
Preference Shares, Series J		US$0.30540
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 113		$0.24613
Preference Shares, Series 134		$0.19019
Preference Shares, Series 155		$0.18644
Preference Shares, Series 17		$0.32188
Preference Shares, Series 19		$0.30625
1 The quarterly dividend per common share was increased 9.8% to $0.81 from $0.738, effective March 1, 2020. 2 The quarterly dividend per share paid on Series C was increased to $0.25458 from $0.25305 on March 1, 2020, was decreased to
$0.16779 from $0.25458 on June 1, 2020 and was decreased to $0.15975 from $0.16779 on September 1, 2020, due to reset on a quarterly basis fol owing the date of issuance of the Series C Preference Shares.
3 The quarterly dividend per share paid on Series 11 was decreased to $0.24613 from $0.275 on March 1, 2020, due to the reset of
the annual dividend on March 1, 2020, and every five years thereafter.
4 The quarterly dividend per share paid on Series 13 was decreased to $0.19019 from $0.275 on June 1, 2020, due to the reset of
the annual dividend on June 1, 2020, and every five years thereafter.
5 The quarterly dividend per share paid on Series 15 was decreased to $0.18644 from $0.275 on September 1, 2020, due to the
reset of the annual dividend on September 1, 2020, and every five years thereafter.
6. ACQUISITIONS AND DISPOSITIONS
Line 10 Crude Oil PipelineIn the first quarter of 2018, we satisfied the condition as set out in our agreements for the sale of our Line 10 crude oil pipeline (Line 10), which originates near Hamilton, Ontario and terminates at West Seneca, New York. Our subsidiaries, Enbridge Pipelines Inc. and Enbridge Energy Partners, L.P. (EEP), owned the Canadian and United States portions of Line 10, respectively, and the related assets were included in our Liquids Pipelines segment. The transaction closed on June 1, 2020. No gain or loss on disposition was recorded.
			15

Montana-Alberta Tie LineIn the fourth quarter of 2019, we committed to a plan to sel the Montana-Alberta Tie Line (MATL) transmission assets, a 345 kilometer transmission line from Great Fal s, Montana to Lethbridge, Alberta. Its related assets were included in our Renewable Power Generation segment. The purchase and sale agreement was signed in January 2020. On May 1, 2020 we closed the sale of MATL for cash proceeds of approximately $189 mil ion. After closing adjustments, a gain on disposal of $4 mil ion was included in Other income/(expense) in the Consolidated Statements of Earnings for the nine months ended September 30, 2020.
Ozark Gas TransmissionIn the first quarter of 2020, we agreed to sel our Ozark Gas Transmission and Ozark Gas Gathering assets (Ozark assets). The Ozark assets are composed of a 590 kilometer transmission system that extends from southeastern Oklahoma through Arkansas to southeastern Missouri, and a fee-based 330 mile gathering system that accesses Fayettevil e Shale and Arkoma production. These assets were included in our Gas Transmission and Midstream segment.
On April 1, 2020 we closed the sale of the Ozark assets for cash proceeds of approximately $63 mil ion (US$45 mil ion). After closing adjustments, a gain on disposal of $1 mil ion (US$1 mil ion) was included in Other income/(expense) in the Consolidated Statements of Earnings for the nine months ended September 30, 2020.
7. DEBT CREDIT FACILITIESThe fol owing table provides details of our committed credit facilities as at September 30, 2020:

		Total
	Maturity	Facilities	Draws1	Available
(mil ions of Canadian dol ars)
Enbridge Inc.	2021-2024	11,980	6,420	5,560
Enbridge (U.S.) Inc.	2022-2024	7,347	995	6,352
Enbridge Pipelines Inc.	20222	3,000	1,938	1,062
Enbridge Gas Inc.	20222	2,000	969	1,031
Total committed credit facilities					24,327	10,322	14,005
	1 Includes facility draws and commercial paper issuances that are back-stopped by credit facility.2 Maturity date is inclusive of the one-year term out option.
On February 24, 2020, Enbridge Inc. entered into a two year, non-revolving credit facility for US$1.0 bil ion with a syndicate of lenders.
On February 25, 2020, Enbridge Inc. entered into two, one year, non-revolving, bilateral credit facilities for a total of US$500 mil ion.
On March 31, 2020, Enbridge Inc. entered into a one year, revolving, syndicated credit facility for $1.7 bil ion. On April 9, 2020, Enbridge Inc. exercised an accordion provision and increased the facility to $3.0 bil ion.
On July 23 and 24, 2020, we extended approximately $10.0 bil ion of our 364 day extendible credit facilities to July 2022, inclusive of a one-year term out provision.
					16

In addition to the committed credit facilities noted above, we maintain $861 mil ion of uncommitted demand credit facilities, of which $524 mil ion were unutilized as at September 30, 2020. As at December 31, 2019, we had $916 mil ion of uncommitted credit facilities, of which $476 mil ion were unutilized.
Our credit facilities carry a weighted average standby fee of 0.3% 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 2021 to 2024.
As at September 30, 2020 and December 31, 2019, commercial paper and credit facility draws, net of short-term borrowings and non-revolving credit facilities that mature within one year, of $8.7 bil ion and $9.0 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 ISSUANCES During the nine months ended September 30, 2020, we completed the fol owing long-term debt issuances totaling $2.5 bil ion and US$1.8 bil ion:
	Principal
Company Issue Date	Amount
(mil ions of Canadian dol ars, unless otherwise stated)Enbridge Inc.
		February 2020	Floating rate notes	US$750
		May 2020	3.20% medium-term notes	$750
		May 2020	2.44% medium-term notes	$550
		July 2020	Fixed-to-fixed subordinated term notes	US$1,000
Enbridge Gas Inc.
		April 2020	2.90% medium-term notes	$600
		April 2020	3.65% medium-term notes	$600
On October 1, 2020, Texas Eastern Transmission, LP (Texas Eastern), a whol y-owned operating subsidiary of Spectra Energy Partners, LP (SEP) issued US$300 mil ion of 3.10% 20-year senior notes payable semi-annual y in arrears and redeemed US$300 mil ion of 4.13% senior notes due December 1, 2020. The newly issued notes mature on October 1, 2040.
				17

LONG-TERM DEBT REPAYMENTS During the nine months ended September 30, 2020, we completed the fol owing long-term debt repayments totaling $1.2 bil ion and US$1.7 bil ion:
	Principal
Company Repayment Date	Amount
(mil ions of Canadian dol ars, unless otherwise stated)Enbridge Inc.
		January 2020	Floating rate notes	US$700
		March 2020	4.53% medium-term notes	$500
		June 2020	Floating rate notes	US$500
Enbridge Pipelines (Southern Lights) L.L.C.
		June 2020	3.98% senior notes	US$26
Enbridge Pipelines Inc.
		April 2020	4.45% medium-term notes	$350
Enbridge Southern Lights LP
		June 2020	4.01% senior notes	$7
Spectra Energy Partners, LP
		January 2020	6.09% senior secured notes	US$111
		June 2020	Floating rate notes	US$400
Westcoast Energy Inc.
		January 2020	9.90% debentures	$100
		July 2020	4.57% medium-term notes	$250
SUBORDINATED TERM NOTESAs at September 30, 2020 and December 31, 2019, our fixed-to-floating and fixed-to-fixed subordinated term notes had a principal value of $8.0 bil ion and $6.6 bil ion, respectively.
FAIR VALUE ADJUSTMENTAs at September 30, 2020, the net fair value adjustment for total debt assumed in the acquisition of Spectra Energy was $783 mil ion. During the three and nine months ended September 30, 2020, the amortization of the fair value adjustment, recorded as a reduction to Interest expense in the Consolidated Statements of Earnings, was $13 mil ion and $42 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 were to default on payment or violate certain covenants. As at September 30, 2020, we were in compliance with al debt covenants.
					18

8. COMPONENTS OF ACCUMULATED OTHER COMPREHENSIVE INCOME Changes in Accumulated Other Comprehensive Income (AOCI) attributable to our common shareholders for the nine months ended September 30, 2020 and 2019 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, 2020		(1,073)			—	(317)					1,396	67	(345)	(272)
Other comprehensive income/(loss)
		(696)			7	(228)					1,760	8			—	851
retained in AOCI
Other comprehensive (income)/loss
reclassified to earnings
Interest rate contracts1		179			—	—					—	—			—	179
Commodity contracts2		(1)			—	—					—	—			—	(1)
Foreign exchange contracts3		3			—	—					—	—			—	3
Other contracts4		(1)			—	—					—	—			—	(1)
Amortization of pension and other
postretirement benefits (OPEB) actuarial loss and prior service costs5		—			—	—					—	—			13	13
		(516)			7	(228)					1,760	8			13 1,044
Tax impact
Income tax on amounts retained in AOCI
		167			—	7					—	(2)			—	172
Income tax on amounts reclassified to earnings
		(42)			—	—					—	—			(3)	(45)
		125			—	7					—	(2)			(3)	127
Balance as at September 30, 2020		(1,464)			7	(538)					3,156	73	(335)	899
						Pension
			Net	Cumulative			and
	Cash Flow			Investment	Translation		Equity	OPEB
		Hedges		Hedges	Adjustment					Investees	Adjustment		Total
(mil ions of Canadian dol ars)Balance as at January 1, 2019
		(770)	(598)					4,323	34	(317)	2,672
Other comprehensive income/(loss) retained in
		(845)	167					(1,831)	26	—	(2,483)
AOCI
Other comprehensive (income)/loss reclassified to
earnings
Interest rate contracts1		108	—					—	—	—	108
Foreign exchange contracts3		4	—					—	—	—	4
Other contracts4		(4)	—					—	—	—	(4)
Amortization of pension and OPEB actuarial loss
		—	—					—	—	59	59
and prior service costs5
		(737)	167					(1,831)	26	59	(2,316)
Tax impact
Income tax on amounts retained in AOCI		254	(20)					—	(7)	—	227
Income tax on amounts reclassified to earnings		(34)	—					—	—	(15)	(49)
		220	(20)					—	(7)	(15)	178
Other		—	—					—	(7)	55	48
Balance as at September 30, 2019		(1,287)	(451)					2,492	46	(218)	582
	1 Reported within Interest expense in the Consolidated Statements of Earnings.2 Reported within Transportation and other services revenue, Commodity sales revenues, Commodity costs and Operating and
administrative expense in the Consolidated Statements of Earnings.
3 Reported within Transportation and other services revenues and Net foreign currency gain/(loss) in the Consolidated Statements
of Earnings.
4 Reported within Operating and administrative expense in the Consolidated Statements of Earnings.5 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.
										19

9. IMPAIRMENT OF EQUITY INVESTMENTS Steckman Ridge, LPSteckman Ridge, LP (Steckman) is engaged in the storage of natural gas, is owned 50% by Enbridge, and is recorded as an equity method investment. During the quarter, Steckman’s forecasted performance was adjusted for the expectation that future available capacity wil be re-contracted at lower than expected rates and an other than temporary impairment loss on our investment of $221 mil ion for the three and nine months ended September 30, 2020 was recorded based on a discounted cash flow analysis. The carrying value of this investment as at September 30, 2020 and December 31, 2019 was $96 mil ion and $222 mil ion, respectively.
Southeast Supply Header, L.L.C. Southeast Supply Header, L.L.C. (SESH) provides natural gas transmission services from east Texas and northern Louisiana to the southeast markets of the Gulf Coast. SESH is owned 50% by Enbridge and is recorded as an equity method investment. The forecasted performance of SESH was revised this quarter to reflect downward revisions to future negotiated rates as wel as higher than expected available capacity levels, caused primarily by a significant contract expiry. An other than temporary impairment loss on our investment of $394 mil ion for the three and nine months ended September 30, 2020 was recorded based on a discounted cash flow analysis. The carrying value of this investment as at September 30, 2020 and December 31, 2019 was $87 mil ion and $484 mil ion, respectively.
DCP Midstream, LLCDCP Midstream, LLC (DCP Midstream), a 50% owned equity method investment of Enbridge, holds an equity interest in DCP Midstream, LP. A decline in the market price of DCP Midstream, LP’s publicly traded units during the first quarter of 2020 resulted in an other than temporary impairment loss on our investment in DCP Midstream of nil and $1.7 bil ion for the three and nine months ended September 30, 2020, respectively. In addition, we incurred losses of $324 mil ion through our equity earnings pick up in relation to asset and goodwil impairment losses recorded by DCP Midstream, LP. The carrying value of our investment in DCP Midstream as at September 30, 2020 and December 31, 2019 was $340 mil ion and $2.2 bil ion, respectively.
Our investments in Steckman, SESH, and DCP Midstream form part of our Gas Transmission and Midstream segment. The impairment losses were recorded within Impairment of Equity Investments in the Consolidated Statements of Earnings.
10. RISK MANAGEMENT AND FINANCIAL INSTRUMENTS
MARKET RISKOur earnings, cash flows and Other Comprehensive Income (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 Risk We 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.
	20

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 dol ar denominated investments and subsidiaries using foreign currency derivatives and United States dol ar denominated debt. Interest Rate Risk Our 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 significantly 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 3.0%.
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 September 30, 2020, 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 within 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 2.3%. Commodity Price Risk Our 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 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. Equity Price Risk Equity 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.
COVID-19 PANDEMIC RISK The spread of the COVID-19 pandemic has caused significant volatility in Canada, the United States and international markets. While we have taken proactive measures to deliver energy safely and reliably during this pandemic, given the ongoing dynamic nature of the circumstances surrounding COVID-19, the impact of this pandemic on our business remains uncertain.
	21

TOTAL DERIVATIVE INSTRUMENTSWe general y have a policy of entering into individual International Swaps and Derivatives Association, Inc. 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 maximum potential settlement amounts in the event of these specificcircumstances. Al amounts are presented gross in the Consolidated Statements of Financial Position.
	Derivative	Derivative	Derivative			Total Gross
	Instruments	Instruments	Instruments	Non-		Derivative
	Used as	Used as Net	Used as	Qualifying		Instruments		Amounts	Total Net
	Cash Flow	Investment	Fair Value		Derivative		as	Available	Derivative
September 30, 2020	Hedges	Hedges	Hedges		Instruments	Presented		for Offset	Instruments
(mil ions of Canadian dol ars)Accounts receivable and other
Foreign exchange contracts										—	—		4	52			56		(23)			33
Commodity contracts										1	—		—	158			159		(82)			77
										1	—		4	210			215	1		(105)	110
Deferred amounts and other assets
Foreign exchange contracts										19	—		23	184			226		(111)	115
Interest rate contracts										8	—		—	—			8					(3)	5
Commodity contracts										2	—		—	64			66		(29)			37
										29	—		23	248			300		(143)	157
Accounts payable and other
Foreign exchange contracts										(5)	—		(2)	(376)			(383)					23	(360)
Interest rate contracts		(167)		—		—	(5)			(172)					—	(172)
Commodity contracts										—	—		—	(160)			(160)					82	(78)
Other contracts										—	—		—	(2)			(2)					—	(2)
		(172)		—		(2)	(543)			(717)	2		105	(612)
Other long-term liabilities
Foreign exchange contracts										—	—		—	(1,140)		(1,140)			111	(1,029)
Interest rate contracts		(566)		—		—	(23)			(589)					3	(586)
Commodity contracts										—	—		—	(80)			(80)					29	(51)
Other contracts										(4)	—		—	(5)			(9)					—	(9)
		(570)		—		—	(1,248)		(1,818)			143	(1,675)
Total net derivative assets/(liabilities)
Foreign exchange contracts										14	—		25	(1,280)		(1,241)						—	(1,241)
Interest rate contracts		(725)		—		—	(28)			(753)					—	(753)
Commodity contracts										3	—		—	(18)			(15)					—	(15)
Other contracts										(4)	—		—	(7)			(11)					—	(11)
		(712)		—		25	(1,333)		(2,020)						—	(2,020)
1 As at September 30, 2020, $215 mil ion was reported within Accounts receivable and other and nil within Accounts receivable
from affiliates on the Consolidated Statements of Financial Position.
2 As at September 30, 2020, $716 mil ion was reported within Accounts payable and other and $1 mil ion within Accounts payable
to affiliates on the Consolidated Statements of Financial Position.
			22

	Derivative	Derivative			Total Gross
	Instruments	Instruments	Non-		Derivative
	Used as	Used as Net	Qualifying		Instruments		Amounts	Total Net
	Cash Flow	Investment		Derivative		as	Available	Derivative
December 31, 2019	Hedges	Hedges		Instruments	Presented		for Offset	Instruments
(mil ions of Canadian dol ars)Accounts receivable and other
Foreign exchange contracts									—	—	161			161		(78)			83
Commodity contracts									—	—	163			163		(47)	116
Other contracts									1	—	3			4					—	4
									1	—	327			328	1		(125)	203
Deferred amounts and other assets
Foreign exchange contracts									10	—	71			81		(42)			39
Commodity contracts									—	—	17			17					(2)	15
Other contracts									2	—	1			3					—	3
									12	—	89			101		(44)			57
Accounts payable and other
Foreign exchange contracts									(5)			(13)	(392)			(410)					78	(332)
Interest rate contracts		(353)			—	—			(353)					—	(353)
Commodity contracts									—	—	(173)			(173)					47	(126)
		(358)											(13)	(565)			(936)	2		125	(811)
Other long-term liabilities
Foreign exchange contracts									—	—	(934)			(934)					42	(892)
Interest rate contracts		(181)			—	—			(181)					—	(181)
Commodity contracts									(5)	—	(60)			(65)					2	(63)
		(186)			—	(994)		(1,180)						44	(1,136)
Total net derivative assets/(liabilities)
Foreign exchange contracts									5			(13)	(1,094)		(1,102)						—	(1,102)
Interest rate contracts		(534)			—	—			(534)					—	(534)
Commodity contracts									(5)	—	(53)			(58)					—	(58)
Other contracts									3	—	4			7					—	7
		(531)											(13)	(1,143)		(1,687)						—	(1,687)
1 As at December 31, 2019, $327 mil ion was reported within Accounts receivable and other and $1 mil ion within Accounts
receivable from affiliates on the Consolidated Statements of Financial Position.
2 As at December 31, 2019, $920 mil ion was reported within Accounts payable and other and $16 mil ion within Accounts payable
to affiliates on the Consolidated Statements of Financial Position.
		23

The fol owing table summarizes the maturity and notional principal or quantity outstanding related to our derivative instruments.
September 30, 2020	2020	2021	2022	2023	2024 Thereafter	Total
Foreign exchange contracts - United States dol ar
							forwards - purchase (mil ions of United States dol ars)
	1,117	500 1,750		—	—			—	3,367
Foreign exchange contracts - United States dol ar
							forwards - sel (mil ions of United States dol ars)	1,593 5,631 5,703 3,784 1,856						—	18,567
Foreign exchange contracts - British pound (GBP)
							forwards - sel (mil ions of GBP)		70	27	28	29	30		90		274
Foreign exchange contracts - Euro forwards - sel
							(mil ions of Euro)		23	94	94	92	91		514		908
Foreign exchange contracts - Japanese yen
							forwards - purchase (mil ions of yen)		—	— 72,500		—	—		—	72,500
Interest rate contracts - short-term pay fixed rate
							(mil ions of Canadian dol ars)	1,265 4,129		407	48	35		121	6,005
Interest rate contracts - long-term debt pay fixed rate
							(mil ions of Canadian dol ars)		508 1,584 2,035 1,368				—		—	5,495
Equity contracts (mil ions of Canadian dol ars)		19	44	7	11	—			—		81
Commodity contracts - natural gas (bil ions of cubic
							feet)3		25	60	31	18	10		10		154
Commodity contracts - crude oil (mil ions of barrels)3	4	12	1	—	—			—		17
Commodity contracts - power (megawatt per hour)
							(MW/H)		65	(3)	(43)	(43)	(43)		(43) 1	(30) 2
1 Thereafter includes an average net purchase/(sale) of power of (43) MW/H for 2025.2 Total is an average net purchase/(sale) of power.3 Total is a net purchase/(sale) of underlying commodity.
Fair Value DerivativesFor foreign exchange derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the derivative as wel as 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			Nine months ended
			September 30,		September 30,
			2020	2019					2020	2019
(mil ions of Canadian dol ars)Unrealized gain/(loss) on derivative
			(60)	—				25	—
Unrealized gain/(loss) on hedged item			59	—				(6)	—
Realized loss on derivative			—	—					(12)	—
	24

The Effect of Derivative Instruments on the Statements of Earnings and Comprehensive Income
The fol owing table presents the effect of cash flow hedges, fair value hedges and net investment hedges on our consolidated earnings and consolidated comprehensive income, before the effect of income taxes:
	Three months ended	Nine months ended
	September 30,	September 30,
			2020	2019	2020		2019
(mil ions of Canadian dol ars)Amount of unrealized gain/(loss) recognized in OCI
Cash flow hedges
						Foreign exchange contracts		—	2		6	(11)
						Interest rate contracts		41	(231)	(709)		(812)
						Commodity contracts		(1)	(1)		8	(22)
						Other contracts		—	1		(6)	6
Fair value hedges
						Foreign exchange contracts		(1)	—		7	—
Net investment hedges
						Foreign exchange contracts		17	(1)		13	1
			56	(230)	(681)		(838)
Amount of (gain)/loss reclassified from AOCI to earnings
						Foreign exchange contracts1		1	2		3	4
						Interest rate contracts2		76	36		179	108
						Commodity contracts		(1)	—		(1)	—
						Other contracts3		(1)	(1)		(1)	(4)
								75	37		180	108
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 loss of $99 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 39 months as at September 30, 2020.
							25

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	Nine months ended
	September 30,	September 30,
			2020	2019	2020			2019
(mil ions of Canadian dol ars)Foreign exchange contracts1
			571	(179)	(186)			849
Interest rate contracts2			(13)	—		(28)	178
Commodity contracts3			69	73		25	(26)
Other contracts4			(3)	(1)		(11)	4
Total unrealized derivative fair value gain/(loss), net			624	(107)	(200)			1,005
1 For the respective nine months ended periods, reported within Transportation and other services revenues (2020 - $87 mil ion
loss; 2019 - $366 mil ion gain) and Net foreign currency gain/(loss) (2020 - $99 mil ion loss; 2019 - $483 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 nine months ended periods, reported within Transportation and other services revenues (2020 - $8 mil ion gain;
2019 - $15 mil ion loss), Commodity sales (2020 - $176 mil ion loss; 2019 - $418 mil ion loss), Commodity costs (2020 - $195 mil ion gain; 2019 - $382 mil ion gain) and Operating and administrative expense (2020 - $2 mil ion loss; 2019 - $25 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. We also maintain current shelf prospectuses with securities regulators which enables ready access to either the Canadian or United States 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 September 30, 2020. 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.
							26

We have credit concentrations and credit exposure, with respect to derivative instruments, in the fol owing counterparty segments:
	September 30,		December 31,
		2020		2019
(mil ions of Canadian dol ars)Canadian financial institutions
		190		146
United States financial institutions		79		40
European financial institutions		25		3
Asian financial institutions		91		92
Other1		114		113
		499		394
	1 Other is comprised of commodity clearing house and physical natural gas and crude oil counterparties. As at September 30, 2020, we provided letters of credit totaling nil in lieu of providing cash col ateral to our counterparties pursuant to the terms of the relevant International Swaps and Derivatives Association agreements. We held no cash col ateral on derivative asset exposures as at September 30, 2020 and December 31, 2019. 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. (Enbridge Gas), credit risk is mitigated by the utilities' large and diversified customer base and the ability to recover an estimate for doubtful accounts 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 classify and provide for receivables older than 30 days as past due. 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 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 derivative 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 derivatives 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 derivative 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.
					27

Level 2Level 2 includes derivative valuations determined using directly or indirectly observable inputs other than quoted prices included within Level 1. Derivatives 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 derivative. 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 held to maturity preferred share investment and long-term debt as Level 2. The fair value of our held to maturity preferred share investment is primarily based on the yield of certain Government of Canada bonds. The fair value of our long-term debt is based on quoted market prices for instruments of similar yield, credit risk and tenor. 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 derivatives’ 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, crude, NGL and natural gas contracts, basis swaps, commodity swaps and energy swaps. 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, including discounted cash flows for forwards and swaps. Depending on the type of derivative and nature of the underlying risk, we use observable market prices (interest, foreign exchange, commodity and share price) 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.
	28

We have categorized our derivative assets and liabilities measured at fair value as fol ows:
				Total Gross
				Derivative
September 30, 2020	Level 1	Level 2	Level 3	Instruments

(mil ions of Canadian dol ars)
Financial assets
Current derivative assets
					Foreign exchange contracts		—	56		—		56
					Commodity contracts		16	47	96			159
							16	103	96			215
Long-term derivative assets
					Foreign exchange contracts		—	226		—		226
					Interest rate contracts		—	8	—		8
					Commodity contracts		13	47		6		66
							13	281		6		300
Financial liabilities
Current derivative liabilities
					Foreign exchange contracts		—	(383)		—		(383)
					Interest rate contracts		—	(172)		—		(172)
					Commodity contracts		(16)	(28)	(116)			(160)
					Other contracts		—	(2)	—		(2)
							(16)	(585)	(116)			(717)
Long-term derivative liabilities
					Foreign exchange contracts		—	(1,140)		—			(1,140)
					Interest rate contracts		—	(589)		—		(589)
					Commodity contracts		(11)	(19)	(50)			(80)
					Other contracts		—	(9)	—		(9)
							(11)	(1,757)	(50)				(1,818)
Total net financial assets/(liabilities)
					Foreign exchange contracts		—	(1,241)		—			(1,241)
					Interest rate contracts		—	(753)		—		(753)
					Commodity contracts		2	47	(64)			(15)
					Other contracts		—	(11)		—		(11)
							2	(1,958)	(64)				(2,020)
						29

				Total Gross
				Derivative
December 31, 2019	Level 1	Level 2	Level 3	Instruments

(mil ions of Canadian dol ars)
Financial assets
Current derivative assets
Foreign exchange contracts						—	161		—			161
Interest rate contracts						—	33	130				163
Commodity contracts						—	4	—			4
						—	198	130				328
Long-term derivative assets
Foreign exchange contracts						—	81		—			81
Commodity contracts						—	12		5			17
Other contracts						—	3	—			3
						—	96		5			101
Financial liabilities
Current derivative liabilities
Foreign exchange contracts						—	(410)		—			(410)
Interest rate contracts						—	(353)		—			(353)
Commodity contracts						(5)	(23)	(145)				(173)
						(5)	(786)	(145)				(936)
Long-term derivative liabilities
Foreign exchange contracts						—	(934)		—			(934)
Interest rate contracts						—	(181)		—			(181)
Commodity contracts						—	(6)	(59)				(65)
						—	(1,121)	(59)						(1,180)
Total net financial assets/(liabilities)
Foreign exchange contracts						—	(1,102)		—					(1,102)
Interest rate contracts						—	(534)		—			(534)
Commodity contracts						(5)	16	(69)				(58)
Other contracts						—	7	—			7
						(5)	(1,613)	(69)						(1,687)
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
September 30, 2020							Value	Input	Price	Price	Average Price	Measurement
(fair value in mil ions of Canadian dol ars)Commodity contracts - financial1
Natural gas								(5)	Forward gas price	2.00	5.51	3.53	$/mmbtu2
Crude								13		Forward crude price	24.11	54.70	39.72				$/barrel
Power							(49)		Forward power price	21.76	65.93	53.79				$/MW/H
Commodity contracts - physical1
Natural gas								4	Forward gas price	1.04	6.77	3.52	$/mmbtu2
Crude							(29)		Forward crude price	35.01	57.60	42.50				$/barrel
NGL								2		Forward NGL price	0.26	1.32	0.61	$/gallon
							(64)
1 Financial and physical forward commodity contracts are valued using a market approach valuation technique.2 One mil ion British thermal units (mmbtu).

					30

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:
	Nine months ended
	September 30,
	2020	2019
(mil ions of Canadian dol ars)
Level 3 net derivative liability at beginning of period			(69)	(11)
Total gain/(loss) unrealized
Included in earnings1			(40)	67
Included in OCI			7	(22)
Settlements			38	(98)
Level 3 net derivative liability at end of period			(64)	(64)
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 September 30, 2020 or December 31, 2019. 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 $56 mil ion and $99 mil ion as at September 30, 2020 and December 31, 2019, respectively. Two equity method investments, SESH and Steckman, are carried at their estimated fair values of $87 mil ion and $96 mil ion, respectively, at September 30, 2020 as a result of other than temporary impairment losses recorded during the current period (Note 9). The fair values are determined based on a discounted cash flow model using inputs not observable in the market, and thus represent Level 3 measurements. We applied an 8% weighted average cost of capital and a long-term revenue growth rate of 0.5% to estimate the fair value of SESH, and a 9% weighted average cost of capital and a long-term revenue growth rate of 1% to estimate the fair value of Steckman.
We have Restricted long-term investments held in trust totaling $527 mil ion and $434 mil ion as at September 30, 2020 and December 31, 2019, respectively, which are recognized at fair value. We have a held-to-maturity preferred share investment carried at its amortized cost of $566 mil ion and $580 mil ion as at September 30, 2020 and December 31, 2019, respectively. These preferred shares are entitled to a cumulative preferred dividend based on the yield of 10-year Government of Canada bonds plus a margin of 4.38%. The fair value of this preferred share investment is $566 mil ion and $580 mil ion as at September 30, 2020 and December 31, 2019, respectively. As at September 30, 2020 and December 31, 2019, our long-term debt had a carrying value of $66.9 bil ion and $64.4 bil ion, respectively, before debt issuance costs and a fair value of $74.1 bil ion and $70.5 bil ion, respectively.
				31

We 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 September 30, 2020 and December 31, 2019, the non-current notes receivable had a carrying value of $1.1 bil ion and $1.0 bil 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.
NET INVESTMENT HEDGESWe currently have designated a portion of our United States 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 United States dol ar denominated investments and subsidiaries. During the nine months ended September 30, 2020 and 2019, we recognized an unrealized foreign exchange loss of $226 mil ion and a gain of $166 mil ion, respectively, on the translation of United States dol ar denominated debt and unrealized gain of $13 mil ion and a gain of $1 mil ion, respectively, on the change in fair value of our outstanding foreign exchange forward contracts in OCI. During the nine months ended September 30, 2020 and 2019, we recognized realized losses of $15 mil ion and nil, respectively, in OCI associated with the settlement of foreign exchange forward contracts and recognized realized losses of nil, in OCI associated with the settlement of United States dol ar denominated debt that had matured during the period.
11. INCOME TAXES
The effective income tax rates for the three months ended September 30, 2020 and 2019 were 17.3% and 19.4%, respectively and for the nine months ended September 30, 2020 and 2019 were 15.3% and 20.6%, respectively.
The period-over-period change in the effective income tax rates is due to the effect of rate-regulated accounting for income taxes and the benefit of foreign rate differentials being partial y offset by higher United States minimum tax relative to the change in earnings period-over-period.
12. PENSION AND OTHER POSTRETIREMENT BENEFITS
	Three months ended	Nine months ended
	September 30,	September 30,
			2020	2019	2020			2019
(mil ions of Canadian dol ars)Service cost
			50	50		150	152
Interest cost			44	51		131	152
Expected return on plan assets			(90)	(84)	(270)			(252)
Amortization of actuarial loss and prior service costs			9	7		28	22
Net periodic benefit costs			13	24		39	74
During the nine months ended September 30, 2020, we incurred $236 mil ion in severance costs related to our voluntary workforce reduction program. Severance costs are included in Operating and administrative expense in the Consolidated Statements of Earnings.
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13. 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.
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