Company: ENBSF
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0000895728-25-000006
Chunk: 99

Company: ENBRIDGE INC
Filing Date: 2025-02-14
Form: 10-K
Item: Item 8
Chunk 99
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 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.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 toward our energy transition goals. The goodwill balance recognized has been assigned to our Gas Transmission segment and is tax deductible over 15 years.

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d)  We entered into six non-interest bearing promissory notes due to Morrow Renewables, the total value of which represents deferred payments of $808 million (US$606 million) due within two years. The first and second payments are due on January 2, 2025 and December 31, 2025, respectively. The $757 million (US$568 million) recognized