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ACQUISITIONS AND DISPOSITIONS (Tables) | 12 Months Ended
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Dec. 31, 2021
Business Combinations [Abstract] |
Summary of Estimated Fair Values Assigned to Net Assets and Final Purchase Price Allocation | The following table summarizes the estimated preliminary fair values that were assigned to the net assets of Moda:
| October 12, 2021
(millions of Canadian dollars) |
Fair value of net assets acquired: |
Current assets | 62 |
Property, plant and equipment (a) | 1,480 |
Long-term investments (b) | 427 |
Intangible assets (c) | 1,781 |
Current liabilities | 59 |
Long-term liabilities | 17 |
Goodwill (d) | 268 |
Purchase price: |
Cash | 3,755 |
Contingent consideration (e) | 187 |
| 3,942 |
a) Due to the specialized nature of Moda's property, plant and equipment, which includes groups of assets configured for use as storage facilities, pipelines and export terminals, the depreciated replacement cost approach was adopted as the primary valuation methodology. In determining replacement cost, both indirect costing using relevant inflation indices and direct costing using relevant market quotes were utilized. Adjustments were then applied for physical deterioration as well as functional and economic obsolescence. The fair value of land was determined using a market approach, which is based on rents and offerings for comparable properties. b) Long-term investments represent Moda's 20% equity interest in Cactus II Pipeline, LLC (Cactus II). The fair value of Cactus II was determined using the discounted cash flow method. The discounted cash flow method is an income-based approach to valuation which estimates the present value of future projected benefits from the investment. c) Intangible assets consist primarily of customer relationships associated with long-term take-or-pay contracts. Fair value was determined using an income-based approach by estimating the present value of the after-tax earnings attributable to the contracts, including earnings associated with expected renewal terms, and will be amortized on a straight-line basis over an expected useful life of 10 years. d) Goodwill is primarily attributable to uncontracted future revenues, existing assembled assets that cannot be duplicated at the same cost by a new entrant, and enhanced scale and geographic diversity which provide greater optionality and platforms for future growth. The goodwill balance recognized has been assigned to our Liquids Pipelines segment and is tax deductible over 15 years. e) We agreed to pay additional contingent consideration of up to US$150 million to Moda's former membership interest holders if Moda's monthly volumes of crude oil loaded onto a vessel equal or exceed specified throughput levels. These performance requirements terminate the earlier of December 31, 2023 or the date the final contingent payment is made. The US$150 million of contingent consideration recognized in the purchase price represents the fair value of contingent consideration at the date of acquisition. As at December 31, 2021, there were no changes to the amount of contingent consideration recognized.
Schedule of Supplemental Pro Forma Consolidated Financial Information | Our supplemental pro forma consolidated financial information for the years ended December 31, 2021 and 2020, including the results of operations for Moda as if the Acquisition had been completed on January 1, 2020, are as follows:
Year ended December 31, | 2021 | 2020
(unaudited; millions of Canadian dollars) |  |
Operating revenues | 47,339 |  | 39,435 |
Earnings attributable to common shareholders 1,2 | 5,771 |  | 2,938 |
1 Acquisition-related expenses of $21 million (after-tax $16 million) were excluded from earnings attributable to common shareholders for the year ended December 31 2021 and deducted for the year ended December 31, 2020. 2 Includes the amortization of fair value adjustments recorded for acquired property, plant and equipment, long-term investments and intangible assets of $193 million and $207 million (after-tax of $145 million and $155 million) for the years ended December 31, 2021 and 2020, respectively.

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- Definition Tabular disclosure of pro forma results of operations for a material business acquisition or series of individually immaterial business acquisitions that are material in the aggregate. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (h)(2) -URI http://asc.fasb.org/extlink&oid=79982066&loc=d3e1392-128463 Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (h)(3) -URI http://asc.fasb.org/extlink&oid=79982066&loc=d3e1392-128463 + Details
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- Definition Tabular disclosure of the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed. May include but not limited to the following: (a) acquired receivables; (b) contingencies recognized at the acquisition date; and (c) the fair value of noncontrolling interests in the acquiree. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=123413009&loc=d3e4845-128472 + Details
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