RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Tables)
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12 Months Ended |
Dec. 31, 2024 |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] |
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| Schedule of the Consolidated Statements of Financial Position Location And Carrying Value of Derivative Instruments |
The following table summarizes the Consolidated Statements of Financial Position location and carrying value of our derivative instruments, as well as the maximum potential settlement amounts, in the event of the specific circumstances described above. | | | | | | | | | | | | | | | | | | | | | | | December 31, 2024 | Derivative Instruments Used as Cash Flow Hedges | | Derivative
Instruments
Used as
Fair Value Hedges | Non- Qualifying Derivative Instruments | Total Gross Derivative Instruments as Presented | Amounts Available for Offset | Total Net Derivative Instruments | | (millions of Canadian dollars) | | | | | | | | Other current assets | | | | | | | | Foreign exchange contracts | — | | | 78 | | 47 | | 125 | | (29) | | 96 | | Interest rate contracts | 44 | | | — | | 23 | | 67 | | (39) | | 28 | | Commodity contracts | 2 | | | — | | 360 | | 362 | | (191) | | 171 | | Other contracts | — | | | — | | 3 | | 3 | | — | | 3 | | | | 46 | | | 78 | | 433 | | 557 | | (259) | | 298 | | Deferred amounts and other assets | | | | | | | | Foreign exchange contracts | — | | | — | | 83 | | 83 | | (71) | | 12 | | Interest rate contracts | 9 | | | — | | 137 | | 146 | | (27) | | 119 | | Commodity contracts | — | | | — | | 197 | | 197 | | (39) | | 158 | | | | | | | | | | | | 9 | | | — | | 417 | | 426 | | (137) | | 289 | | Other current liabilities | | | | | | | | Foreign exchange contracts | — | | | (73) | | (731) | | (804) | | 29 | | (775) | | Interest rate contracts | (58) | | | — | | (22) | | (80) | | 39 | | (41) | | Commodity contracts | — | | | — | | (451) | | (451) | | 191 | | (260) | | | | | | | | | | | (58) | | | (73) | | (1,204) | | (1,335) | | 259 | | (1,076) | | Other long-term liabilities | | | | | | | | Foreign exchange contracts | — | | | — | | (1,579) | | (1,579) | | 71 | | (1,508) | | Interest rate contracts | — | | | — | | (80) | | (80) | | 27 | | (53) | | Commodity contracts | (1) | | | — | | (238) | | (239) | | 39 | | (200) | | | | | | | | | | | (1) | | | — | | (1,897) | | (1,898) | | 137 | | (1,761) | | Total net derivative asset/(liability) | | | | | | | | Foreign exchange contracts | — | | | 5 | | (2,180) | | (2,175) | | — | | (2,175) | | Interest rate contracts | (5) | | | — | | 58 | | 53 | | — | | 53 | | Commodity contracts | 1 | | | — | | (132) | | (131) | | — | | (131) | | Other contracts | — | | | — | | 3 | | 3 | | — | | 3 | | | | (4) | | | 5 | | (2,251) | | (2,250) | | — | | (2,250) | |
| | | | | | | | | | | | | | | | | | | | | | | December 31, 2023 | Derivative Instruments Used as Cash Flow Hedges | | Derivative Instruments Used as Fair Value Hedges | Non-Qualifying Derivative Instruments | Total Gross Derivative Instruments as Presented | Amounts Available for Offset | Total Net Derivative Instruments | | (millions of Canadian dollars) | | | | | | | | Other current assets | | | | | | | | Foreign exchange contracts | — | | | 41 | | 98 | | 139 | | (32) | | 107 | | Interest rate contracts | 31 | | | — | | 34 | | 65 | | (32) | | 33 | | Commodity contracts | — | | | — | | 418 | | 418 | | (270) | | 148 | | Other contracts | — | | | — | | 1 | | 1 | | (1) | | — | | | | 31 | | | 41 | | 551 | | 623 | | (335) | | 288 | | Deferred amounts and other assets | | | | | | | | Foreign exchange contracts | — | | | 16 | | 319 | | 335 | | (122) | | 213 | | Interest rate contracts | 51 | | | — | | 2 | | 53 | | (21) | | 32 | | Commodity contracts | — | | | — | | 75 | | 75 | | (41) | | 34 | | | | | | | | | | | | 51 | | | 16 | | 396 | | 463 | | (184) | | 279 | | Other current liabilities | | | | | | | | Foreign exchange contracts | — | | | (44) | | (84) | | (128) | | 32 | | (96) | | Interest rate contracts | (183) | | | — | | (3) | | (186) | | 32 | | (154) | | Commodity contracts | (11) | | | — | | (412) | | (423) | | 270 | | (153) | | Other contracts | — | | | — | | (1) | | (1) | | 1 | | — | | | | (194) | | | (44) | | (500) | | (738) | | 335 | | (403) | | Other long-term liabilities | | | | | | | | Foreign exchange contracts | — | | | (17) | | (481) | | (498) | | 122 | | (376) | | Interest rate contracts | (3) | | | — | | (85) | | (88) | | 21 | | (67) | | Commodity contracts | (7) | | | — | | (159) | | (166) | | 41 | | (125) | | | | | | | | | | | | (10) | | | (17) | | (725) | | (752) | | 184 | | (568) | | Total net derivative liability | | | | | | | | Foreign exchange contracts | — | | | (4) | | (148) | | (152) | | — | | (152) | | Interest rate contracts | (104) | | | — | | (52) | | (156) | | — | | (156) | | Commodity contracts | (18) | | | — | | (78) | | (96) | | — | | (96) | | Other contracts | — | | | — | | — | | — | | — | | — | | | | (122) | | | (4) | | (278) | | (404) | | — | | (404) | |
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| Schedule of The Maturity And Notional Principal or Quantity Outstanding Related to Derivative Instruments |
The following table summarizes the maturity and notional principal or quantity outstanding related to our derivative instruments: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2024 | | | | 2023 | | | As at December 31, | 2025 | 2026 | 2027 | 2028 | 2029 | Thereafter | | Total | | Total | | Foreign exchange contracts - US dollar forwards - purchase (millions of US dollars) | 1,245 | | — | | — | | — | | — | | — | | | 1,245 | | | 1,860 | | | Foreign exchange contracts - US dollar forwards - sell (millions of US dollars) | 6,406 | | 5,627 | | 4,811 | | 3,522 | | 1,248 | | — | | | 21,614 | | | 24,747 | | | Foreign exchange contracts - British pound (GBP) forwards - sell (millions of GBP) | 30 | | 28 | | 32 | | — | | — | | — | | | 90 | | | 120 | | | Foreign exchange contracts - Euro forwards - sell (millions of Euro) | 126 | | 121 | | 81 | | 67 | | 66 | | 129 | | | 590 | | | 731 | | | Foreign exchange contracts - Japanese yen forwards - purchase (millions of yen) | 84,800 | | — | | — | | — | | — | | — | | | 84,800 | | | 84,800 | | | Interest rate contracts - short-term pay fixed rate (millions of Canadian dollars) | 2,296 | | 1,737 | | 676 | | 49 | | 13 | | — | | | 4,771 | | | 9,018 | | | Interest rate contracts - short-term receive fixed rate (millions of Canadian dollars) | — | | — | | — | | — | | — | | — | | | — | | | 2,015 | | | Interest rate contracts - long-term pay fixed rate (millions of Canadian dollars)1 | 4,531 | | 753 | | — | | — | | — | | — | | | 5,284 | | | 5,162 | | | Interest rate contracts - costless collar (millions of Canadian dollars) | 1,938 | | 268 | | 104 | | 6 | | — | | — | | | 2,316 | | | 1,139 | | | Equity contracts (millions of Canadian dollars) | — | | — | | — | | — | | — | | — | | | — | | | 47 | | | Commodity contracts - natural gas (billions of cubic feet)2 | 154 | | 79 | | 37 | | 11 | | 5 | | 2 | | | 288 | | | 86 | | | Commodity contracts - crude oil (millions of barrels)2 | 6 | | 15 | | 1 | | 1 | | 1 | | 1 | | | 25 | | | 6 | | | | | | | | | | | | | | | Commodity contracts - power (megawatt per hour (MW/H)) | 61 | | 24 | | (31) | | (49) | | (30) | | — | | | (5) | | 3 | (22) | | 3 |
1Represents the notional amount of long-term debt issuances hedged. 2Represents the notional amount of net purchase/(sale). 3Total is an average net purchase/(sale) of power.
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| Schedule of Effect of Cash Flow Hedges and Net Investment Hedges on Consolidated Earnings and Consolidated Comprehensive Income, Before Income Taxes |
The following table presents foreign exchange derivative instruments that are designated and qualify as fair value hedges. The realized and unrealized gain or loss on the derivative is included in Other income/(expense) or Interest expense in the Consolidated Statements of Earnings. The offsetting loss or gain on the hedged item attributable to the hedged risk is included in Other income/(expense) in the Consolidated Statements of Earnings. Any excluded components are included in the Consolidated Statements of Comprehensive Income.
| | | | | | | | | | Year ended December 31, | 2024 | 2023 | | (millions of Canadian dollars) | | | Unrealized loss on derivative | (3) | | (132) | | Unrealized gain on hedged item | 6 | | 131 | | Realized gain/(loss) on derivative | 26 | | (47) | | Realized loss on hedged item | (79) | | — | |
The following table presents the effect of cash flow hedges and fair value hedges on our consolidated earnings and comprehensive income, before the effect of income taxes:
| | | | | | | | | | | | | Year ended December 31, | 2024 | 2023 | 2022 | | (millions of Canadian dollars) | | | | Amount of unrealized gain/(loss) recognized in OCI | | | | Cash flow hedges | | | | Foreign exchange contracts | — | | — | | 3 | | Interest rate contracts | 67 | | 201 | | 1,151 | | Commodity contracts | 19 | | 68 | | (53) | | Other contracts | 1 | | (2) | | (4) | | Fair value hedges | | | | Foreign exchange contracts | (42) | | 15 | | (35) | | | | | | | | | | | | 45 | | 282 | | 1,062 | | Amount of (income)/loss reclassified from AOCI to earnings | | | | Foreign exchange contracts1 | 53 | | — | | 13 | | Interest rate contracts2 | 31 | | 28 | | 186 | | Commodity contracts3 | (1) | | — | | — | | Other contracts4 | — | | — | | 4 | | | | 83 | | 28 | | 203 | |
1Reported within Interest expense and Other income/(expense) in the Consolidated Statements of Earnings. 2Reported within Interest expense in the Consolidated Statements of Earnings. 3Reported within Transportation and other services revenues in the Consolidated Statements of Earnings. 4Reported within Operating and administrative expense in the Consolidated Statements of Earnings.
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| Schedule of Unrealized Gains and Losses Associated With Changes in The Fair Value of Non-Qualifying Derivatives |
The following table presents the unrealized gains and losses associated with changes in the fair value of our non-qualifying derivatives:
| | | | | | | | | | | | | Year ended December 31, | 2024 | 2023 | 2022 | | (millions of Canadian dollars) | | | | Foreign exchange contracts1 | (2,033) | | 1,292 | | (1,344) | | Interest rate contracts2 | 112 | | (63) | | 10 | | Commodity contracts3 | (163) | | (41) | | 50 | | Other contracts4 | 2 | | (8) | | 4 | | Total unrealized derivative fair value gain/(loss), net | (2,082) | | 1,180 | | (1,280) | |
1For the respective years ended, reported within Transportation and other services revenues (2024 - nil ; 2023 - $645 million gain; 2022 - $238 million loss) and Other income/(expense) (2024 - $2,033 million loss; 2023 - $647 million gain; 2022 - $1,106 million loss) in the Consolidated Statements of Earnings. 2Reported within Interest expense in the Consolidated Statements of Earnings. 3For the respective years ended, reported within Transportation and other services revenues (2024 - $23 million loss; 2023 - $35 million loss; 2022 - $13 million gain), Commodity sales (2024 - $92 million loss; 2023 - $153 million gain; 2022 - $89 million gain), Commodity costs (2024 - $31 million loss; 2023 - $94 million loss; 2022 - $102 million loss) and Operating and administrative expense (2024 - $17 million loss; 2023 - $65 million loss; 2022 - $50 million gain) in the Consolidated Statements of Earnings. 4Reported within Operating and administrative expense in the Consolidated Statements of Earnings
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| Schedule of Group Credit Concentrations and Maximum Credit Exposure, With Respect to Derivative Instruments |
We have credit concentrations and credit exposure, with respect to derivative instruments, in the following counterparty segments:
| | | | | | | | | | December 31, | 2024 | 2023 | | (millions of Canadian dollars) | | | Canadian financial institutions | 344 | | 457 | | US financial institutions | 128 | | 252 | | European financial institutions | 116 | | 107 | | Asian financial institutions | 53 | | 121 | | Other1 | 332 | | 125 | | | | 973 | | 1,062 | |
1Other is comprised of commodity clearing house and crude oil, natural gas and power counterparties.
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| Schedule of Derivative Assets and Liabilities Measured at Fair Value |
We have categorized our derivative assets and liabilities measured at fair value as follows:
| | | | | | | | | | | | | | | | December 31, 2024 | Level 1 | Level 2 | Level 3 | Total Gross Derivative Instruments | | (millions of Canadian dollars) | | | | | Financial assets | | | | | Current derivative assets | | | | | Foreign exchange contracts | — | | 125 | | — | | 125 | | Interest rate contracts | — | | 67 | | — | | 67 | | Commodity contracts | 34 | | 72 | | 256 | | 362 | | Other contracts | — | | 3 | | — | | 3 | | | | 34 | | 267 | | 256 | | 557 | | Long-term derivative assets | | | | | Foreign exchange contracts | — | | 83 | | — | | 83 | | Interest rate contracts | — | | 146 | | — | | 146 | | Commodity contracts | 1 | | 14 | | 182 | | 197 | | Other contracts | — | | — | | — | | — | | | | 1 | | 243 | | 182 | | 426 | | Financial liabilities | | | | | Current derivative liabilities | | | | | Foreign exchange contracts | — | | (804) | | — | | (804) | | Interest rate contracts | — | | (80) | | — | | (80) | | Commodity contracts | (52) | | (116) | | (283) | | (451) | | Other contracts | — | | — | | — | | — | | | (52) | | (1,000) | | (283) | | (1,335) | | Long-term derivative liabilities | | | | | Foreign exchange contracts | — | | (1,579) | | — | | (1,579) | | Interest rate contracts | — | | (80) | | — | | (80) | | Commodity contracts | (1) | | (31) | | (207) | | (239) | | Other contracts | — | | — | | — | | — | | | | (1) | | (1,690) | | (207) | | (1,898) | | Total net derivative asset/(liability) | | | | | Foreign exchange contracts | — | | (2,175) | | — | | (2,175) | | Interest rate contracts | — | | 53 | | — | | 53 | | Commodity contracts | (18) | | (61) | | (52) | | (131) | | Other contracts | — | | 3 | | — | | 3 | | | | (18) | | (2,180) | | (52) | | (2,250) | |
| | | | | | | | | | | | | | | | December 31, 2023 | Level 1 | Level 2 | Level 3 | Total Gross Derivative Instruments | | (millions of Canadian dollars) | | | | | Financial assets | | | | | Current derivative assets | | | | | Foreign exchange contracts | — | | 139 | | — | | 139 | | Interest rate contracts | — | | 65 | | — | | 65 | | Commodity contracts | 142 | | 103 | | 173 | | 418 | | Other contracts | — | | 1 | | — | | 1 | | | | 142 | | 308 | | 173 | | 623 | | Long-term derivative assets | | | | | Foreign exchange contracts | — | | 335 | | — | | 335 | | Interest rate contracts | — | | 53 | | — | | 53 | | Commodity contracts | — | | 24 | | 51 | | 75 | | | | | | | | | — | | 412 | | 51 | | 463 | | Financial liabilities | | | | | Current derivative liabilities | | | | | Foreign exchange contracts | — | | (128) | | — | | (128) | | Interest rate contracts | — | | (186) | | — | | (186) | | Commodity contracts | (136) | | (76) | | (211) | | (423) | | Other contracts | — | | (1) | | — | | (1) | | | | (136) | | (391) | | (211) | | (738) | | Long-term derivative liabilities | | | | | Foreign exchange contracts | — | | (498) | | — | | (498) | | Interest rate contracts | — | | (88) | | — | | (88) | | Commodity contracts | — | | (22) | | (144) | | (166) | | | | | | | | | — | | (608) | | (144) | | (752) | | Total net derivative asset/(liability) | | | | | Foreign exchange contracts | — | | (152) | | — | | (152) | | Interest rate contracts | — | | (156) | | — | | (156) | | Commodity contracts | 6 | | 29 | | (131) | | (96) | | Other contracts | — | | — | | — | | — | | | | 6 | | (279) | | (131) | | (404) | |
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| Schedule of Significant Unobservable Inputs Used in The Fair Value Measurement of Level 3 Derivative Instruments |
The significant unobservable inputs used in the fair value measurement of Level 3 derivative instruments were as follows: | | | | | | | | | | | | | | | | | | | | | | December 31, 2024 | Fair Value | Unobservable Input | Minimum Price/Volatility | Maximum Price/Volatility | Weighted Average Price/Volatility | Unit of Measurement | | (fair value in millions of Canadian dollars) | | | | | | | Commodity contracts - financial1 | | | | | | | | Natural gas | (5) | | Forward gas price | 3.73 | 9.85 | 4.12 | $/mmbtu2 | | Crude | (13) | | Forward crude price | 73.54 | 104.42 | 97.44 | $/barrel | | | | | | | | | Power | (44) | | Forward power price | 31.17 | 229.29 | 68.51 | $/MW/H | Commodity contracts - physical1 | | | | | | | | Natural gas | (80) | | Forward gas price | 1.40 | 22.57 | 4.12 | $/mmbtu2 | | Crude | 22 | | Forward crude price | 77.31 | 118.28 | 99.76 | $/barrel | | | | | | | | | Power | (98) | | Forward power price | 12.94 | 211.42 | 70.30 | $/MW/H | Commodity options3 | | | | | | | | Natural gas | 166 | | Forward gas price | 2.44 | 7.09 | 4.44 | $/mmbtu2 | | | Price volatility | 3 | % | 77 | % | 50 | % | | | | (52) | | | | | | |
1Financial and physical forward commodity contracts are valued using a market approach valuation technique. 2One million British thermal units (mmbtu). 3Commodity options contracts are valued using an option model valuation technique.
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| Schedule of Changes in Net Fair Value of Derivative Assets and Liabilities Classified as Level 3 in the Fair Value Hierarchy |
Changes in the net fair value of derivative assets and liabilities classified as Level 3 in the fair value hierarchy were as follows:
| | | | | | | | | | Year ended December 31, | 2024 | 2023 | | (millions of Canadian dollars) | | | Level 3 net derivative liability at beginning of year | (131) | | (136) | | Total gain/(loss), unrealized | | | Included in earnings1 | (92) | | (48) | | Included in OCI | 19 | | 67 | | | Included in regulatory assets/liabilities | 130 | | — | | Settlements | 22 | | (14) | | Level 3 net derivative liability at end of year | (52) | | (131) | |
1Reported within Transportation and other services revenues, Commodity costs and Operating and administrative expense in the Consolidated Statements of Earnings.
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