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ACQUISITIONS AND DISPOSITIONS (Tables) | 12 Months Ended
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Dec. 31, 2023
Business Combination and Asset Acquisition [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 Aitken Creek:
| November 1, 2023
(millions of Canadian dollars) |
Fair value of net assets acquired: |
Current assets (a) | 105 |
Property, plant and equipment (b) | 466 |
Current liabilities | 20 |
Long-term liabilities (c) | 130 |
Goodwill (d) | 46 |
Purchase price: |
Cash | 397 |
Additional consideration (e) | 70 |
| 467 |
a) Current assets consist primarily of inventory which is short-term in nature and represents natural gas held in storage. Fair value was determined using the market price of natural gas at the date of acquisition. b) Aitken Creek's property, plant and equipment constitutes an integrated system of cavern storage facilities, associated header pipeline, and land and right-of-ways. The depreciated replacement cost approach was adopted as the primary valuation methodology to determine the fair value of property, plant and equipment, excluding the reservoir storage asset. 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. Fair value of the reservoir storage asset was determined using a residual approach whereby the adjusted purchase price was allocated to the fair value of the net tangible assets, excluding the reservoir storage asset, with the remaining value allocated to the reservoir storage asset. The income approach was also utilized to corroborate that the cash flows attributable to the reservoir storage asset support the residual value. c) Long-term liabilities consist primarily of a deferred income tax liability arising from temporary differences between the tax bases of assets and liabilities and their carrying values for accounting purposes at the date of acquisition. d) Goodwill is primarily attributable to the recognition of a deferred income tax liability. The goodwill balance recognized has been assigned to our Gas Transmission and Midstream segment and is not tax deductible. e) The $70 million of additional consideration recognized in the purchase price represents the fair value of derivative contracts and working gas as at March 31, 2023. The following table summarizes the estimated fair values that were assigned to the net assets of TGE:
| September 27, 2022
(millions of Canadian dollars) |
Fair value of net assets acquired: |
Current assets | 5 |
Property, plant and equipment | 3 |
Long-term investments | 8 |
Intangible assets (a) | 117 |
Long-term assets | 3 |
Current liabilities | 61 |
Long-term debt | 18 |
Long-term liabilities (b) | 105 |
Goodwill (c) | 392 |
Purchase price: |
Cash | 295 |
Contingent consideration (d) | 49 |
| 344 |
a) Intangible assets consist of compensation expected to be earned by TGE on existing development contracts once certain project development milestones are met. Fair value was determined using a discounted cash flow method which is an income-based approach to valuation that estimates the present value of future projected benefits from the contracts. The intangible assets will be amortized on a straight-line basis over an expected useful life of three and a half years. b) Long-term liabilities consist primarily of obligations payable to third parties which are contingent on milestones being met for certain projects. Fair value represents the present value of the future cash flow payments at the date of the TGE Acquisition. c) Goodwill is primarily attributable to expected future returns from new opportunities to develop wind and solar projects, as well as enhanced scale and operational diversity of our renewable projects portfolio. The goodwill balance recognized has been assigned to our Renewable Power Generation segment and is tax deductible over 15 years. d) We agreed to pay additional contingent consideration of up to US$53 million to TGE's former common unit holders if performance milestones are met on certain projects. The US$36 million of contingent consideration recognized in the purchase price represents the fair value of contingent consideration at the date of acquisition. The fair value was determined using an income-based approach. The following table summarizes the estimated 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 co nsideration 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 and was fully settled as at December 31, 2022.
Schedule of Supplemental Pro Forma Consolidated Financial Information | Our supplemental pro forma consolidated financial information for the year ended December 31, 2021, including the results of operations for Moda as if the Moda Acquisition had been completed on January 1, 2020, are as follows:
Year ended December 31, | 2021 |
(unaudited; millions of Canadian dollars) |  |
Operating revenues | 47,339 |  |
Earnings attributable to common shareholders 1,2 | 5,771 |  |
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. 2 Includes the amortization of fair value adjustments recorded for acquired property, plant and equipment, long-term investments and intangible assets of $193 million (after-tax of $145 million) for the year ended December 31, 2021.

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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 -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Paragraph 1 -Section 50 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479907/805-20-50-1 + Details
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