Transportation & Logistics: Derivatives & hedging (ASC 815)

Year ended December 31,	2025	2024	2023
(millions of Canadian dollars)
Earnings	7,789	5,631	6,058
Other comprehensive income/(loss), net of tax
Change in unrealized gain on cash flow hedges	28	73	220
Gain/(loss) on net investment hedges (Note 23)	419	( 1,305	409
Other comprehensive income/(loss) from equity investees and other investments	24	( 10	6
Excluded components of fair value hedges	14	9	12
Reclassification to earnings of loss on cash flow hedges	27	23	14
Reclassification to earnings of pension and other postretirement benefits (OPEB) amounts	( 30	( 16	( 18
Reclassification of actuarial gain on pension and OPEB from regulatory assets	38	—	—
Actuarial gain/(loss) on pension and OPEB	126	248	( 130
Foreign currency translation adjustments	( 3,134	5,895	( 1,728
Other comprehensive income/(loss), net of tax	( 2,488	4,917	( 1,215
Comprehensive income	5,301	10,548	4,843
Comprehensive (income)/loss attributable to noncontrolling interests and redeemable noncontrolling interest	( 244	( 295	131
Comprehensive income attributable to controlling interests	5,057	10,253	4,974
Preference share dividends	( 419	( 388	( 352
Comprehensive income attributable to common shareholders	4,638	9,865	4,622

The accompanying notes are an integral part of these consolidated financial statements.

ENBRIDGE INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

The fair value of our floating to fixed interest rate swap agreements was estimated to be an asset of $32 million as of December 31, 2025 based on the present value of expected future cash flows. These interest rate swap agreements are accounted for as cash flow hedges.

Foreign Currency Exchange Rate Risk

Our primary exposure to foreign currency exchange rate risk relates to our ship construction contracts denominated in Euros, our foreign currency denominated debt and our international business operations. On a regular basis, we enter into foreign currency forward contracts and, from time to time, we utilize cross-currency swap agreements and collar options to manage portions of the exposure to movements in foreign currency exchange rates.

The estimated fair value, as of December 31, 2025, of our Euro-denominated forward contracts associated with our ship construction contracts was an asset of $114 million, based on the present value of expected future cash flows. As of December 31, 2025, the aggregate cost of our ships on order, not including ships on order by our Partner Brands, was approximately $11.3 billion, of which we had deposited $1.0 billion as of such date. Approximately 64.1% and 43.4% of the aggregate cost of the ships under construction was exposed to fluctuations in the Euro exchange rate at December 31, 2025 and 2024, respectively. A hypothetical 10% strengthening of the Euro as of December 31, 2025, assuming no changes in comparative interest rates, would result in a $727 million increase in the United States dollar cost of the foreign currency denominated ship construction contracts exposed to fluctuations in the Euro exchange rate. Our foreign currency forward contract agreements are accounted for as cash flow or net investment hedges depending on the designation of the related hedge.