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 March 31, 2022

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 2,026,382,505 common shares outstanding as at April 29, 2022.

1

		Page
	PART I
Item 1.	Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4.	Controls and Procedures	45
	PART II
Item 1.	Legal Proceedings	47
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 3.	Defaults Upon Senior Securities	48
Item 4.	Mine Safety Disclosures	48
Item 5.	Other Information	48
Item 6.	Exhibits	49
	Signatures	49

2

GLOSSARY

AOCI	Accumulated other comprehensive loss
ASU	Accounting Standards Update
EBITDA	Earnings before interest, income taxes and depreciation and amortization
EEP	Enbridge Energy Partners, L.P.
Enbridge	Enbridge Inc.
Exchange Act	United States Securities Exchange Act of 1934, as amended
L3R	Line 3 Replacement
LNG	Liquified natural gas
NGL	Natural gas liquids
OCI	Other comprehensive income/(loss)
OEB	Ontario Energy Board
OPEB	Other postretirement benefits
SEP	Spectra Energy Partners, LP
Texas Eastern	Texas Eastern Transmission, LP
the Partnerships	Spectra Energy Partners, LP (SEP) and Enbridge Energy Partners, L.P. (EEP)
US	United States of America
US$	Unites States dollars

3

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; energy intensity and emissions reduction targets and related environmental, social and governance matters; 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; 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 and benefits 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, 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 future actions of regulators and courts; and toll and rate cases discussions and filings, including those relating to Gas Transmission and Midstream and Gas Distribution and Storage.

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; energy transition; 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 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

4

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; 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.

NON-GAAP AND OTHER FINANCIAL MEASURES

Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) in this Quarterly Report on Form 10-Q makes reference to non-GAAP and other financial measures, including EBITDA. EBITDA is defined as earnings before interest, income taxes, depreciation and amortization. Management uses EBITDA to assess performance of Enbridge and to set targets. Management believes the presentation of EBITDA gives useful information to investors as it provides increased transparency and insight into the performance of Enbridge.

The non-GAAP and other financial measures described above are not measures that have a standardized meaning prescribed by generally accepted accounting principles in the United States of America (US GAAP) and are not US GAAP measures. Therefore, these measures may not be comparable with similar measures presented by other issuers. A reconciliation of historical non-GAAP and other financial measures to the most directly comparable GAAP measures is set out in this MD&A and is available on our website. Additional information on non-GAAP and other financial measures may be found on our website, www.sedar.com or www.sec.gov.

5

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ENBRIDGE INC.

CONSOLIDATED STATEMENTS OF EARNINGS

	Three months ended March 31,
	2022	2021
(unaudited; millions of Canadian dollars, except per share amounts)
Operating revenues
Commodity sales	8,325	6,429
Gas distribution sales	2,098	1,540
Transportation and other services	4,674	4,168
Total operating revenues (Note 3)	15,097	12,137
Operating expenses
Commodity costs	8,291	6,198
Gas distribution costs	1,456	950
Operating and administrative	1,875	1,559
Depreciation and amortization	1,055	932
Total operating expenses	12,677	9,639
Operating income	2,420	2,498
Income from equity investments	491	395
Other income
Net foreign currency gain	369	152
Other	89	109
Interest expense	(719)	(657)
Earnings before income taxes	2,650	2,497
Income tax expense (Note 9)	(593)	(483)
Earnings	2,057	2,014
Earnings attributable to noncontrolling interests	(28)	(22)
Earnings attributable to controlling interests	2,029	1,992
Preference share dividends	(102)	(92)
Earnings attributable to common shareholders	1,927	1,900
Earnings per common share attributable to common shareholders (Note 5)	0.95	0.94
Diluted earnings per common share attributable to common shareholders (Note 5)	0.95	0.94

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

6

ENBRIDGE INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three months ended March 31,
	2022	2021
(unaudited; millions of Canadian dollars)
Earnings	2,057	2,014
Other comprehensive income/(loss), net of tax
Change in unrealized gain on cash flow hedges	294	370
Change in unrealized gain on net investment hedges	133	93
Other comprehensive loss from equity investees	—	(22)
Excluded components of fair value hedges	(1)	(1)
Reclassification to earnings of loss on cash flow hedges	57	52
Reclassification to earnings of pension and other postretirement benefits (OPEB) amounts	(2)	5
Foreign currency translation adjustments	(708)	(796)
Other comprehensive loss, net of tax	(227)	(299)
Comprehensive income	1,830	1,715
Comprehensive (income)/loss attributable to noncontrolling interests	(13)	3
Comprehensive income attributable to controlling interests	1,817	1,718
Preference share dividends	(102)	(92)
Comprehensive income attributable to common shareholders	1,715	1,626

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

7

ENBRIDGE INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

	Three months ended March 31,
	2022	2021
(unaudited; millions of Canadian dollars, except per share amounts)
Preference shares
Balance at beginning of period	7,747	7,747
Redemption of preference shares	(737)	—
Balance at end of period	7,010	7,747
Common shares
Balance at beginning of period	64,799	64,768
Shares issued on exercise of stock options	36	4
Share purchases at stated value	(30)	—
Other	(4)	—
Balance at end of period	64,801	64,772
Additional paid-in capital
Balance at beginning of period	365	277
Stock-based compensation	13	11
Options exercised	(34)	(3)
Change in reciprocal interest	—	39
Other	(28)	—
Balance at end of period	316	324
Deficit
Balance at beginning of period	(10,989)	(9,995)
Earnings attributable to controlling interests	2,029	1,992
Preference share dividends	(102)	(92)
Dividends paid to reciprocal shareholder	—	3
Share purchases in excess of stated value	(20)	—
Other	—	(1)
Balance at end of period	(9,082)	(8,093)
Accumulated other comprehensive loss (Note 7)
Balance at beginning of period	(1,096)	(1,401)
Other comprehensive loss attributable to common shareholders, net of tax	(212)	(274)
Balance at end of period	(1,308)	(1,675)
Reciprocal shareholding
Balance at beginning of period	—	(29)
Change in reciprocal interest	—	12
Balance at end of period	—	(17)
Total Enbridge Inc. shareholders’ equity	61,737	63,058
Noncontrolling interests
Balance at beginning of period	2,542	2,996
Earnings attributable to noncontrolling interests	28	22
Other comprehensive income/(loss) attributable to noncontrolling interests, net of tax
Change in unrealized gain/(loss) on cash flow hedges	2	(3)
Foreign currency translation adjustments	(17)	(22)
	(15)	(25)
Comprehensive income/(loss) attributable to noncontrolling interests	13	(3)
Distributions	(60)	(66)
Contributions	6	3
Other	35	—
Balance at end of period	2,536	2,930
Total equity	64,273	65,988
Dividends paid per common share	0.860	0.835

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

8

ENBRIDGE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three months ended March 31,
	2022	2021
(unaudited; millions of Canadian dollars)
Operating activities
Earnings	2,057	2,014
Adjustments to reconcile earnings to net cash provided by operating activities:
Depreciation and amortization	1,055	932
Deferred income tax expense	423	369
Unrealized derivative fair value gain, net (Note 8)	(369)	(315)
Income from equity investments	(491)	(395)
Distributions from equity investments	394	388
(Gain)/loss on dispositions	2	(41)
Other	120	30
Changes in operating assets and liabilities	(252)	(418)
Net cash provided by operating activities	2,939	2,564
Investing activities
Capital expenditures	(1,048)	(2,059)
Long-term investments and restricted long-term investments	(314)	(61)
Distributions from equity investments in excess of cumulative earnings	97	61
Additions to intangible assets	(53)	(65)
Proceeds from disposition	—	122
Affiliate loans, net	—	44
Net cash used in investing activities	(1,318)	(1,958)
Financing activities
Net change in short-term borrowings	89	(27)
Net change in commercial paper and credit facility draws	(283)	1,727
Debenture and term note issues, net of issue costs	2,643	629
Debenture and term note repayments	(1,155)	(912)
Contributions from noncontrolling interests	6	3
Distributions to noncontrolling interests	(60)	(66)
Common shares issued	2	—
Common shares repurchased	(50)	—
Preference share dividends	(91)	(92)
Common share dividends	(1,742)	(1,691)
Redemption of preferred shares held by subsidiary	—	(115)
Redemption of preference shares	(750)	—
Other	(92)	(21)
Net cash used in financing activities	(1,483)	(565)
Effect of translation of foreign denominated cash and cash equivalents and restricted cash	(4)	(7)
Net increase in cash and cash equivalents and restricted cash	134	34
Cash and cash equivalents and restricted cash at beginning of period	320	490
Cash and cash equivalents and restricted cash at end of period	454	524

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

9

ENBRIDGE INC.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

	March 31, 2022	December 31, 2021
(unaudited; millions of Canadian dollars; number of shares in millions)
Assets
Current assets
Cash and cash equivalents	413	286
Restricted cash	41	34
Accounts receivable and other	8,408	6,862
Accounts receivable from affiliates	220	107
Inventory	1,212	1,670
	10,294	8,959
Property, plant and equipment, net	99,346	100,067
Long-term investments	13,361	13,324
Restricted long-term investments	594	630
Deferred amounts and other assets	9,123	8,613
Intangible assets, net	3,895	4,008
Goodwill	32,503	32,775
Deferred income taxes	275	488
Total assets	169,391	168,864
Liabilities and equity
Current liabilities
Short-term borrowings	1,604	1,515
Accounts payable and other	8,512	9,767
Accounts payable to affiliates	112	90
Interest payable	605	693
Current portion of long-term debt	4,379	6,164
	15,212	18,229
Long-term debt	70,490	67,961
Other long-term liabilities	7,431	7,617
Deferred income taxes	11,985	11,689
	105,118	105,496
Contingencies (Note 11)
Equity
Share capital
Preference shares	7,010	7,747
Common shares (2,026 outstanding at March 31, 2022 and December 31, 2021)	64,801	64,799
Additional paid-in capital	316	365
Deficit	(9,082)	(10,989)
Accumulated other comprehensive loss (Note 7)	(1,308)	(1,096)
Total Enbridge Inc. shareholders' equity	61,737	60,826
Noncontrolling interests	2,536	2,542
	64,273	63,368
Total liabilities and equity	169,391	168,864

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

10

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 generally accepted accounting principles in the United States of America (US GAAP) and Regulation S-X for interim consolidated financial information. They do not include all of the information and notes required by US GAAP for annual consolidated financial statements and should therefore be read in conjunction with our audited consolidated financial statements and notes for the year ended December 31, 2021. In the opinion of management, the interim consolidated financial statements contain all 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 follow the same significant accounting policies as those included in our audited consolidated financial statements for the year ended December 31, 2021, except for the adoption of new standards (Note 2). Amounts are stated in Canadian dollars unless otherwise noted.

Our operations and earnings for interim periods can be affected by seasonal fluctuations within the gas distribution utility businesses, as well as other factors such as supply of and demand for crude oil and natural gas, and may not be indicative of annual results.

Certain comparative figures in our interim consolidated financial statements have been reclassified to conform to the current year's presentation.

2. CHANGES IN ACCOUNTING POLICIES

ADOPTION OF NEW ACCOUNTING STANDARDS

Disclosures About Government Assistance

Effective January 1, 2022, we adopted Accounting Standards Update (ASU) 2021-10 on a prospective basis. The new standard was issued in November 2021 to increase the transparency of government assistance to business entities. The ASU adds new disclosure requirements for transactions with governments that are accounted for using a grant or contribution accounting model by analogy. The required disclosures include information about the nature of transactions, accounting policy applied, impacted financial statement line items and significant terms and conditions. The adoption of this ASU did not have a material impact on our consolidated financial statements.

Accounting for Certain Lessor Leases with Variable Lease Payments

Effective January 1, 2022, we adopted ASU 2021-05 on a prospective basis. The new standard was issued in July 2021 to amend lessor accounting for certain leases with variable lease payments that do not depend on a reference index or a rate and would have resulted in the recognition of a loss at lease commencement if classified as a sales-type or a direct financing lease. The ASU amends the classification requirements of such leases for lessors to result in an operating lease classification. The adoption of this ASU did not have a material impact on our consolidated financial statements.

Accounting for Modifications or Exchanges of Certain Equity-Classified Contracts

Effective January 1, 2022, we adopted ASU 2021-04 on a prospective basis. The new standard was issued in May 2021 to clarify issuer accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. The ASU requires an issuer to determine the accounting for the modification or exchange based on the economic substance of the modification or exchange. The adoption of this ASU did not have a material impact on our consolidated financial statements.

11

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity

Effective January 1, 2022, we adopted ASU 2020-06 on a modified retrospective basis. The new standard was issued in August 2020 to simplify accounting for certain financial instruments. The ASU eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The ASU also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. The ASU amends the diluted earnings per share guidance, including the requirement to use if-converted method for all convertible instruments and an update for instruments that can be settled in either cash or shares. The adoption of this ASU did not have a material impact on our consolidated financial statements.

3. REVENUE

REVENUE FROM CONTRACTS WITH CUSTOMERS

Major Products and Services

	Liquids Pipelines	Gas Transmission and Midstream	Gas Distribution and Storage	Renewable Power Generation	Energy Services	Eliminations and Other	Consolidated
Three months ended March 31, 2022
(millions of Canadian dollars)
Transportation revenue	2,685	1,194	251	—	—	—	4,130
Storage and other revenue	51	84	47	—	—	—	182
Gas gathering and processing revenue	—	15	—	—	—	—	15
Gas distribution revenue	—	—	2,098	—	—	—	2,098
Electricity and transmission revenue	—	—	—	62	—	—	62
Total revenue from contracts with customers	2,736	1,293	2,396	62	—	—	6,487
Commodity sales	—	—	—	—	8,325	—	8,325
Other revenue1,2	178	7	4	94	2	—	285
Intersegment revenue	141	—	11	—	10	(162)	—
Total revenue	3,055	1,300	2,411	156	8,337	(162)	15,097

	Liquids Pipelines	Gas Transmission and Midstream	Gas Distribution and Storage	Renewable Power Generation	Energy Services	Eliminations and Other	Consolidated
Three months ended March 31, 2021
(millions of Canadian dollars)
Transportation revenue	2,329	1,121	216	—	—	—	3,666
Storage and other revenue	26	74	58	—	—	—	158
Gas gathering and processing revenue	—	7	—	—	—	—	7
Gas distribution revenue	—	—	1,534	—	—	—	1,534
Electricity and transmission revenue	—	—	—	26	—	—	26
Total revenue from contracts with customers	2,355	1,202	1,808	26	—	—	5,391
Commodity sales	—	—	—	—	6,429	—	6,429
Other revenue1,2	212	12	6	91	—	(4)	317
Intersegment revenue	132	—	9	—	4	(145)	—
Total revenue	2,699	1,214	1,823	117	6,433	(149)	12,137

1 Includes mark-to-market gains from our hedging program for the three months ended March 31, 2022 and 2021 of $94 million and $130 million, respectively.

2 Includes revenues from lease contracts for the three months ended March 31, 2022 and 2021 of $164 million and $159 million, respectively.

12

We disaggregate revenue into categories which represent our principal performance obligations within each business segment. These revenue categories represent the most significant revenue streams in each segment and consequently are considered to be the most relevant revenue information for management to consider in evaluating performance.

Contract Balances

	Contract Receivables	Contract Assets	Contract Liabilities
(millions of Canadian dollars)
Balance as at March 31, 2022	2,784	216	1,913
Balance as at December 31, 2021	2,369	213	1,898

Contract receivables represent the amount of receivables derived from contracts with customers.

Contract assets represent the amount of revenue which has been recognized in advance of payments received for performance obligations we have fulfilled (or partially fulfilled) and prior to the point in time at which our right to the payment is unconditional. Amounts included in contract assets are transferred to accounts receivable when our right to the consideration becomes unconditional.

Contract liabilities represent payments received for performance obligations which have not been fulfilled. Contract liabilities primarily relate to make-up rights and deferred revenue. Revenue recognized during the three months ended March 31, 2022 included in contract liabilities at the beginning of the period is $61 million. Increases in contract liabilities from cash received, net of amounts recognized as revenue during the three months ended March 31, 2022 were $97 million.

Performance Obligations

There was no material revenue recognized in the three months ended March 31, 2022 from performance obligations satisfied in previous periods.

Revenue to be Recognized from Unfulfilled Performance Obligations

Total revenue from performance obligations expected to be fulfilled in future periods is $58.3 billion, of which $5.5 billion and $6.1 billion are expected to be recognized during the remaining nine months ending December 31, 2022 and year ending December 31, 2023, respectively.

The revenues excluded from the amounts above based on optional exemptions available under Accounting Standards Codification (ASC) 606, as explained below, represent a significant portion of our overall revenues and revenues from contracts with customers. Certain revenues such as flow-through operating costs charged to shippers are recognized at the amount for which we have the right to invoice our customers and are excluded from the amounts for revenue to be recognized in the future from unfulfilled performance obligations above. Variable consideration is excluded from the amounts above due to the uncertainty of the associated consideration, which is generally 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. Additionally, the effect of escalation on certain tolls which are contractually 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 tolls are periodically reset by the regulator are excluded from the amounts above since future tolls remain unknown. Finally, revenues from contracts with customers which have an original expected duration of one year or less are excluded from the amounts above.

13

Variable Consideration

During the three months ended March 31, 2022, revenue for the Canadian Mainline has been recognized in accordance with the terms of the Competitive Tolling Settlement, which expired on June 30, 2021. The tolls in place on June 30, 2021 continue on an interim basis until a new commercial arrangement is implemented and are subject to finalization and adjustment applicable to the interim period, if any. Due to the uncertainty of adjustment to tolling pursuant to a Canada Energy Regulator decision and potential customer negotiations, interim toll revenue recognized during the three months ended March 31, 2022 is considered variable consideration.

Recognition and Measurement of Revenues

	Liquids Pipelines	Gas Transmission and Midstream	Gas Distribution and Storage	Renewable Power Generation	Consolidated
Three months ended March 31, 2022
(millions of Canadian dollars)
Revenue from products transferred at a point in time	—	—	16	—	16
Revenue from products and services transferred over time1	2,736	1,293	2,380	62	6,471
Total revenue from contracts with customers	2,736	1,293	2,396	62	6,487

	Liquids Pipelines	Gas Transmission and Midstream	Gas Distribution and Storage	Renewable Power Generation	Consolidated
Three months ended March 31, 2021
(millions of Canadian dollars)