Company: ENBSF
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000895728-25-000012
Chunk: 36

Company: ENBRIDGE INC
Filing Date: 2025-05-09
Form: 10-Q
Item: Item 1
Chunk 36
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 results of operations for EOG as if the EOG Acquisition had been completed on January 1, 2023, was as follows:Three months ended March 31,2024(unaudited; millions of Canadian dollars) Operating revenues11,346 Earnings attributable to common shareholders1,476 Acquisition of RNG FacilitiesOn January 2, 2024, through a wholly-owned US subsidiary, we acquired six Morrow Renewables operating landfill gas-to-renewable natural gas (RNG) production facilities (Tomorrow RNG) located in Texas and Arkansas for total consideration of $1.3 billion (US$1.0 billion), of which $584 million (US$439 million) was paid at close and an additional deferred consideration is payable within two years with a fair value of $757 million (US$568 million) (the RNG Facilities Acquisition). The acquired assets align with and advance our lower-carbon strategy.

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The following table summarizes the estimated fair values that were assigned to the net assets of Tomorrow RNG:January 2, 2024(millions of Canadian dollars)Fair value of net assets acquired:Current assets31 Intangible assets (a)925 Property, plant and equipment (b)174 Current liabilities5 Goodwill (c)223 Purchase price:Cash584 Deferred consideration (d):Current portion of long-term debt550 Long-term debt207 Other adjustments7 1,348 a)  Intangible assets consist of long-term gas supply agreements with the respective facility's landfill owner. Fair value was determined using an income-based approach, specifically the multi-period excess earnings method, by estimating the present value of the after-tax cash flows attributable to the gas rights. The intangible assets will be amortized on a straight-line basis over the term of the respective agreement, inclusive of extension options, which range from 13 to 42 years (approximately nine years to the next extension period on a weighted-average basis).b)  Tomorrow RNG's property, plant and equipment constitutes specialized landfill gas plant and equipment which collects gas produced by waste decomposition, treats and compresses the gas to pipeline specifications. The direct method of replacement cost was used to determine the majority of the fair value of property, plant and equipment. Adjustments were then applied for estimated physical deterioration.c)  Goodwill is primarily attributable to expected future returns from a portfolio of both operating and scalable RNG assets, furthering the diversity of our renewable projects portfolio and accelerating progress