UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to           

Commission file number 1-10934

ENBRIDGE INC.
(Exact Name of Registrant as Specified in Its Charter)

Canada	98-0377957
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

200, 425 - 1st Street S.W.

Calgary, Alberta, Canada T2P 3L8

(Address of Principal Executive Offices) (Zip Code)

(403) 231-3900

(Registrant’s Telephone Number, Including Area Code)

_______________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares	ENB	New York Stock Exchange
6.375% Fixed-to-Floating Rate Subordinated Notes Series 2018-B due 2078	ENBA	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

The registrant had 2,025,962,505 common shares outstanding as at October 29, 2021.

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		Page
	PART I
Item 1.	Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	63
Item 4.	Controls and Procedures	63
	PART II
Item 1.	Legal Proceedings	65
Item 1A.	Risk Factors	65
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	65
Item 3.	Defaults Upon Senior Securities	65
Item 4.	Mine Safety Disclosures	65
Item 5.	Other Information	66
Item 6.	Exhibits	66
	Signatures	67

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GLOSSARY

AOCI	Accumulated other comprehensive loss
Army Corps	United States Army Corps of Engineers
ASC	Accounting Standards Codification
ASU	Accounting Standards Update
CPP Investments	Canada Pension Plan Investment Board
DAPL	Dakota Access Pipeline
DCP Midstream	DCP Midstream, LLC
EBITDA	Earnings before interest, income taxes and depreciation and amortization
EEP	Enbridge Energy Partners, L.P.
EIS	Environmental Impact Statement
EMF	Éolien Maritime France SAS
Enbridge	Enbridge Inc.
Enbridge Gas	Enbridge Gas Inc.
Exchange Act	United States Securities Exchange Act of 1934, as amended
FERC	Federal Energy Regulatory Commission
MTN	Medium-term notes
MW	Megawatts
NGL	Natural gas liquids
Noverco	Noverco Inc.
OCI	Other comprehensive income/(loss)
OEB	Ontario Energy Board
OPEB	Other postretirement benefits
PADD II	Petroleum Administration for Defense District - Midwest District
PennEast	PennEast Pipeline Company, L.L.C.
SEP	Spectra Energy Partners, LP
SESH	Southeast Supply Header, L.L.C.
Steckman	Steckman Ridge, LP
Texas Eastern	Texas Eastern Transmission, LP
the Partnerships	Spectra Energy Partners, LP (SEP) and Enbridge Energy Partners, L.P. (EEP)
the State	State of Michigan
the Straits	Straits of Mackinac
US	United States of America
US$	Unites States dollars

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CONVENTIONS

The terms "we", "our", "us" and "Enbridge" as used in this report refer collectively to Enbridge Inc. unless the context suggests otherwise. These terms are used for convenience only and are not intended as a precise description of any separate legal entity within Enbridge.

Unless otherwise specified, all dollar amounts are expressed in Canadian dollars, all references to “dollars”, “$” or “C$” are to Canadian dollars and all references to “US$” are to United States (US) dollars. All amounts are provided on a before tax basis, unless otherwise stated.

FORWARD-LOOKING INFORMATION

Forward-looking information, or forward-looking statements, have been included in this quarterly report on Form 10-Q to provide information about us and our subsidiaries and affiliates, including management’s assessment of our and our subsidiaries’ future plans and operations. This information may not be appropriate for other purposes. Forward-looking statements are typically identified by words such as ‘‘anticipate”, “believe”, “estimate”, “expect”, “forecast”, “intend”, “likely”, “plan”, “project”, “target” and similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information or statements included or incorporated by reference in this document include, but are not limited to, statements with respect to the following: our corporate vision and strategy, including strategic priorities and enablers; the COVID-19 pandemic and the duration and impact thereof; energy intensity and emissions reduction targets and related environmental, social and governance matters; diversity and inclusion goals; expected supply of, demand for and prices of crude oil, natural gas, natural gas liquids (NGL), liquified natural gas (LNG) and renewable energy; energy transition; anticipated utilization of our existing assets; expected earnings before interest, income taxes and depreciation and amortization (EBITDA); expected earnings/(loss); expected future cash flows and distributable cash flow; dividend growth and payout policy; financial strength and flexibility; expectations on sources of liquidity and sufficiency of financial resources; expected strategic priorities and performance of the Liquids Pipelines, Gas Transmission and Midstream, Gas Distribution and Storage, Renewable Power Generation and Energy Services businesses; expected costs related to announced projects and projects under construction; expected in-service dates for announced projects and projects under construction and for maintenance; expected capital expenditures, investment capacity and capital allocation priorities; expected equity funding requirements for our commercially secured growth program; expected future growth and expansion opportunities; expectations about our joint venture partners’ ability to complete and finance projects under construction; expected closing of acquisitions and dispositions and the timing thereof; expected benefits of transactions, including the realization of efficiencies, synergies and cost savings; expected future actions of regulators and courts; toll and rate cases discussions and filings, including Mainline System contracting; anticipated competition; and Line 5 dual pipelines and related litigation and other matters.

Although we believe these forward-looking statements are reasonable based on the information available on the date such statements are made and processes used to prepare the information, such statements are not guarantees of future performance and readers are cautioned against placing undue reliance on forward-looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Material assumptions include assumptions about the following: the COVID-19 pandemic and the duration and impact thereof; the expected supply of and demand for crude oil, natural gas, NGL and renewable energy; prices of crude oil, natural gas, NGL and renewable energy; anticipated utilization of assets; exchange rates; inflation; interest rates; availability and price of labor and construction materials; operational reliability; customer and regulatory approvals; maintenance of support and regulatory approvals for our projects; anticipated in-service dates; weather; the timing and closing of acquisitions and dispositions; the realization of anticipated benefits and synergies of transactions; governmental legislation; litigation; estimated future dividends and impact of our dividend policy on our future cash flows; our credit ratings; capital project funding; hedging program; expected EBITDA; expected earnings/(loss); expected future cash flows; and expected distributable cash flow. Assumptions regarding the expected supply of and demand for crude oil, natural gas, NGL and renewable energy, and the prices of these commodities, are material to and underlie all forward-looking statements, as they may impact current and future levels of demand for our services. Similarly, exchange rates, inflation and interest rates and the COVID-19 pandemic impact the economies and business environments in which we operate and may impact levels of demand for our services and cost of inputs, and are therefore inherent in all forward-looking statements. Due to the interdependencies and correlation of these macroeconomic factors, the impact of any one assumption on a forward-looking statement cannot be determined with certainty, particularly with respect to expected EBITDA, expected

4

earnings/(loss), expected future cash flows, expected distributable cash flow or estimated future dividends. The most relevant assumptions associated with forward-looking statements regarding announced projects and projects under construction, including estimated completion dates and expected capital expenditures, include the following: the availability and price of labor and construction materials; the effects of inflation and foreign exchange rates on labor and material costs; the effects of interest rates on borrowing costs; the impact of weather and customer, government, court and regulatory approvals on construction and in-service schedules and cost recovery regimes; and the COVID-19 pandemic and the duration and impact thereof.

Our forward-looking statements are subject to risks and uncertainties pertaining to the successful execution of our strategic priorities, operating performance, legislative and regulatory parameters; litigation, including with respect to the Dakota Access Pipeline (DAPL) and Line 5 dual pipelines; acquisitions, dispositions and other transactions and the realization of anticipated benefits therefrom; our dividend policy; project approval and support; renewals of rights-of-way; weather; economic and competitive conditions; public opinion; changes in tax laws and tax rates; exchange rates; interest rates; commodity prices; political decisions; the supply of, demand for and prices of commodities; and the COVID-19 pandemic, including but not limited to those risks and uncertainties discussed in this quarterly report on Form 10-Q and in our other filings with Canadian and United States (US) securities regulators. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these are interdependent and our future course of action depends on management’s assessment of all information available at the relevant time. Except to the extent required by applicable law, Enbridge assumes no obligation to publicly update or revise any forward-looking statement made in this quarterly report on Form 10-Q or otherwise, whether as a result of new information, future events or otherwise. All forward-looking statements, whether written or oral, attributable to us or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements.

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ENBRIDGE INC.

CONSOLIDATED STATEMENTS OF EARNINGS

	Three months ended September 30,		Nine months ended September 30,
	2021	2020	2021	2020
(unaudited; millions of Canadian dollars, except per share amounts)
Operating revenues
Commodity sales	7,279	4,595	20,042	14,920
Transportation and other services	3,695	4,075	11,740	11,609
Gas distribution sales	492	440	2,769	2,550
Total operating revenues (Note 3)	11,466	9,110	34,551	29,079
Operating expenses
Commodity costs	7,347	4,443	19,975	14,464
Gas distribution costs	120	83	1,359	1,188
Operating and administrative	1,667	1,554	4,710	4,955
Depreciation and amortization	944	935	2,805	2,766
Total operating expenses	10,078	7,015	28,849	23,373
Operating income	1,388	2,095	5,702	5,706
Income from equity investments	440	315	1,187	805
Impairment of equity investments (Note 8)	(111)	(615)	(111)	(2,351)
Other income/(expense)
Net foreign currency gain/(loss)	(165)	173	146	(257)
Other	109	85	300	(8)
Interest expense	(648)	(718)	(1,923)	(2,105)
Earnings before income taxes	1,013	1,335	5,301	1,790
Income tax expense (Note 10)	(199)	(231)	(952)	(273)
Earnings	814	1,104	4,349	1,517
Earnings attributable to noncontrolling interests	(34)	(20)	(93)	(25)
Earnings attributable to controlling interests	780	1,084	4,256	1,492
Preference share dividends	(98)	(94)	(280)	(284)
Earnings attributable to common shareholders	682	990	3,976	1,208
Earnings per common share attributable to common shareholders (Note 5)	0.34	0.49	1.97	0.60
Diluted earnings per common share attributable to common shareholders (Note 5)	0.34	0.49	1.96	0.60

The accompanying notes are an integral part of these interim consolidated financial statements.

6

ENBRIDGE INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three months ended September 30,		Nine months ended September 30,
	2021	2020	2021	2020
(unaudited; millions of Canadian dollars)
Earnings	814	1,104	4,349	1,517
Other comprehensive income/(loss), net of tax
Change in unrealized gain/(loss) on cash flow hedges	(16)	29	197	(532)
Change in unrealized gain/(loss) on net investment hedges	(206)	154	16	(221)
Other comprehensive income/(loss) from equity investees	(30)	(14)	(28)	6
Excluded components of fair value hedges	(1)	(1)	(3)	7
Reclassification to earnings of loss on cash flow hedges	55	58	168	138
Reclassification to earnings of pension and other postretirement benefits (OPEB) amounts	5	3	16	10
Foreign currency translation adjustments	1,281	(1,119)	(350)	1,817
Other comprehensive income/(loss), net of tax	1,088	(890)	16	1,225
Comprehensive income	1,902	214	4,365	2,742
Comprehensive (income)/loss attributable to noncontrolling interests	(62)	16	(68)	(79)
Comprehensive income attributable to controlling interests	1,840	230	4,297	2,663
Preference share dividends	(98)	(94)	(280)	(284)
Comprehensive income attributable to common shareholders	1,742	136	4,017	2,379

The accompanying notes are an integral part of these interim consolidated financial statements.

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ENBRIDGE INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

	Three months ended September 30,		Nine months ended September 30,
	2021	2020	2021	2020
(unaudited; millions of Canadian dollars, except per share amounts)
Preference shares
Balance at beginning and end of period	7,747	7,747	7,747	7,747
Common shares
Balance at beginning of period	64,780	64,763	64,768	64,746
Shares issued on exercise of stock options	10	1	22	18
Balance at end of period	64,790	64,764	64,790	64,764
Additional paid-in capital
Balance at beginning of period	324	207	277	187
Stock-based compensation	7	6	23	25
Options exercised	(7)	(1)	(15)	(19)
Change in reciprocal interest	—	54	39	66
Other	—	(1)	—	6
Balance at end of period	324	265	324	265
Deficit
Balance at beginning of period	(8,388)	(7,797)	(9,995)	(6,314)
Earnings attributable to controlling interests	780	1,084	4,256	1,492
Preference share dividends	(98)	(94)	(280)	(284)
Dividends paid to reciprocal shareholder	1	4	6	14
Common share dividends declared	(1,692)	(1,640)	(3,384)	(3,281)
Adoption of ASU 2016-13 Financial Instruments - Credit Losses	—	—	—	(66)
Other	—	1	—	(3)
Balance at end of period	(9,397)	(8,442)	(9,397)	(8,442)
Accumulated other comprehensive income/(loss) (Note 7)
Balance at beginning of period	(2,420)	1,753	(1,401)	(272)
Other comprehensive income/(loss) attributable to common shareholders, net of tax	1,060	(854)	41	1,171
Balance at end of period	(1,360)	899	(1,360)	899
Reciprocal shareholding
Balance at beginning of period	(17)	(47)	(29)	(51)
Change in reciprocal interest	—	18	12	22
Balance at end of period	(17)	(29)	(17)	(29)
Total Enbridge Inc. shareholders’ equity	62,087	65,204	62,087	65,204
Noncontrolling interests
Balance at beginning of period	2,870	3,315	2,996	3,364
Earnings attributable to noncontrolling interests	34	20	93	25
Other comprehensive income/(loss) attributable to noncontrolling interests, net of tax
Change in unrealized loss on cash flow hedges	(9)	—	(15)	(3)
Foreign currency translation adjustments	37	(36)	(10)	57
Contributions	4	1	13	21
Distributions	(67)	(68)	(210)	(232)
Redemption of preferred shares held by subsidiary	(293)	—	(293)	—
Other	(1)	(1)	1	(1)
Balance at end of period	2,575	3,231	2,575	3,231
Total equity	64,662	68,435	64,662	68,435
Dividends paid per common share	0.835	0.810	2.505	2.430

The accompanying notes are an integral part of these interim consolidated financial statements.

8

ENBRIDGE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine months ended September 30,
	2021	2020
(unaudited; millions of Canadian dollars)
Operating activities
Earnings	4,349	1,517
Adjustments to reconcile earnings to net cash provided by operating activities:
Depreciation and amortization	2,805	2,766
Deferred income tax expense/(recovery)	789	(82)
Unrealized derivative fair value loss, net (Note 9)	86	200
Income from equity investments	(1,187)	(805)
Distributions from equity investments	1,197	1,145
Impairment of equity investments (Note 8)	111	2,351
Gain on disposition	(41)	—
Other	(87)	222
Changes in operating assets and liabilities	(1,068)	213
Net cash provided by operating activities