We re delivering steady returns to investors, and we plan to keep it that way.

Transcription

1 We re delivering steady returns to investors, and we plan to keep it that way. ENBRIDGE INCOME FUND HOLDINGS INC. ANNUAL REVIEW 2012

2 OPERATIONS REVIEW 2 LETTER TO SHAREHOLDERS 6 FINANCIAL HIGHLIGHTS 10 CORPORATE GOVERNANCE 11 SHAREHOLDER AND INVESTOR INFORMATION 12 FORWARD-LOOKING INFORMATION 13 ThisisanexcitingtimeforEnbridgeIncome Fund Holdings Inc. and our shareholders. Having successfully completed two large acquisitions in the last 18 months, Enbridge Income Fund s portfolio of energy infrastructure assets today is larger, stronger and more diversified than ever. Through our investment in the Fund, we re benefiting from its enhanced scale and diversity, providingaverystrongplatformonwhichto continue to build value for our investors. The Fund s assets are underpinned by low-risk commercial agreements and our overarching focus, as always, is on the safe and efficient operation of our infrastructure and the generation of reliable and predictable returns for our shareholders. Forward-Looking Information: The Annual Review includes references to forward-looking information. By its nature this information applies certain assumptions and expectations about future outcomes, so we remind you it is subject to risks and uncertainties that affect every business, including ours. The more significant factors and risks that might affect future outcomes are listed and discussed in the Forward-Looking Information section on page 13 of this Annual Review and also in the risks sections of our public disclosure filings, including Management s Discussion and Analysis, available on SEDAR at Enbridge Income Fund Holdings Inc. (ENF or the Company) is a publicly-traded corporation. The Company, through its investment in Enbridge Income Fund (the Fund), holds high-quality, low-risk energy infrastructure assets. The Fund s assets include interests in more than 500 megawatts of renewable and alternative power generation capacity, a portfolio of liquids transportation and storage businesses, and a 50% interest in the Canadian segment of the Alliance Pipeline. Information about Enbridge Income Fund Holdings Inc. is available on the Company s website at enbridgeincomefund.com

3 On the strength of our low-risk business model anddiversifiedasset base, we re confident we ll continue to deliver reliable resultsforour investors. JOHN WHELEN President Go online and watch a conversation with John Whelen enbridgeincomefund.com/ar2012 > 1

4 Fort St. John Edmonton Fort McMurray Hardisty Our portfolio of high-quality, low-risk energy infrastructure assets is stronger and more diversified than ever. Calgary Cromer ENBRIDGE INCOME FUND HOLDINGS INC. Headquarters Calgary, Alberta, Canada Saskatchewan System Liquids Transportation Hardisty Terminals and Caverns Liquids Storage Wind Power Electrical Generation Solar Electrical Generation NRGreen Waste Heat Electrical Generation Alliance Canada Natural Gas Transmission Alliance US (ENB*) Natural Gas Transmission * ENB refers to Enbridge Inc. Chicago Sarnia Toronto 2012 PRO FORMA CAFD* A SUCCESSFUL MIX 34% Liquids Transportation & Storage 46% Green Power Generation 20% Natural Gas Transmission Through the December 2012 acquisition of crude oil storage and renewable energy assets from Enbridge Inc., we ve substantially scaled up and further diversified the Fund s sources of low-risk cash flow, reinforcing value to investors who are seeking a steady and predictable payout of cash flow from low-risk energy infrastructure assets. * Cash Available For Distribution (CAFD) before Corporate expenses, pro forma the acquisition of crude oil storage and renewable energy assets acquired in December 2012 as if these assets were owned by the Fund from January 1, CAFD is a non-gaap measure. For more information, please refer to the Non-GAAP Measures section on page 13 of this Annual Review. 2 < ENBRIDGE INCOME FUND HOLDINGS INC ANNUAL REVIEW

5 PREDICTABLE RETURNS All of the power generated by the Fund s wind, solar and waste heat recovery assets is sold under longterm power purchase or power swap agreements fixedprice contracts that eliminate exposure to fluctuating power prices and provide cash flow stability for our investors. GREEN POWER GENERATION Enbridge Income Fund s renewable and alternative energy assets collectively generate more than 500 megawatts (MW) of environmentally-friendly power. WIND ENERGY The Fund s interests in six wind farms located in Ontario, Saskatchewan and Alberta have the capacity to generate more than 410 MW. Wind is the fastest growing sector of electricity generation in North America and the Fund is one of the largest wind power producers in Canada. SOLAR ENERGY The Fund s three solar projects in Ontario Sarnia, Amherstburg and Tilbury have the capacity to generate a total of 100 MW for the Ontario grid. The Fund is now the largest solar energy generator in Canada. 164,000 homes / 593,000 tonnes The Fund s interests in renewable and alternative energy generation have the capacity to supply 164,000 homes and avoid the emission of approximately 593,000 tonnes of greenhouse gases per year. WASTE HEAT RECOVERY The Fund has interests in an additional 10 MW of power generation through its 50% interest in NRGreen Power, which owns and operates four waste heat recovery facilities along the Alliance pipeline in Saskatchewan. In 2013, NRGreen expects to commission its first OUR GREEN POWER GENERATION ASSETS AT A GLANCE waste heat recovery unit in Alberta at Alliance s Windfall Compressor Station near Whitecourt. The $76-million facility, which will deliver up to 14 MW of electricity, will mark the world s first commercial application of GE s ORegen system, a technology that requires no water and creates no new emissions. Facility Generating Capacity Our Interest Equivalent Homes Supplied Location Ontario Wind 190 MW 100% 60,000 ON Talbot 99 MW 100% 33,000 ON Greenwich 99 MW 100% 33,000 ON Magrath 30 MW 33% 4,620 AB Chin Chute 30 MW 33% 4,620 AB SunBridge 11 MW 50% 2,500 SK Sarnia 80 MW 100% 12,800 ON Amherstburg 15 MW 100% 2,400 ON Tilbury 5 MW 100% 800 ON NRGreen 20 MW 50% 10,000 SK Total 579 MW 524 MW 163,740 Operations Review > 3

6 STABLE CASH FLOWS All 11 million barrels of the Fund s crude oil storage capacity is contracted under long-term takeor-pay agreements with creditworthy counterparties. The contracts have a weighted average remaining term of approximately 22 years, providing cash flow stability for our shareholders. LIQUIDS TRANSPORTATION &STORAGE Enbridge Income Fund s liquids transportation and storage assets are strategically located in growing supply basins. SASKATCHEWAN SYSTEM The Fund s wholly-owned Saskatchewan System is ideally positioned to capture the rapid growth in oil production in the highly prolific Bakken region that spans Saskatchewan, North Dakota, and Montana. The Bakken region has quickly grown to become one of the leading oil producing regions in North America. The Saskatchewan System is comprised of crude oil and liquids pipelines that connect producing Bakken fields with Enbridge Inc. s mainline pipeline to the United States and storage facilities. The Bakken Expansion Program (the Program), which the Fund undertook jointly with Enbridge Energy Partners, went into service in March The Program enables delivery of growing crude oil production in North Dakota to the Enbridge Inc. mainline at Cromer, Manitoba. Production from the Bakken Formation in North Dakota alone has grown from 200,000 barrels per day (bpd) to 700,000 bpd and recent projections estimate that it could reach 1.2 million bpd or more within six years. HARDISTY CONTRACT TERMINALS & STORAGE CAVERNS The Fund owns one of the largest contract crude oil terminals in North America. With approximately 11 million barrels of crude oil storage capacity, the facilities are comprised of 19 aboveground tanks that hold approximately 7.5 million barrels of oil, four belowground storage caverns and two aboveground buffer tanks that provide approximately 3.5 million barrels of storage capacity. The facilities are located adjacent to Enbridge Inc. s mainline system operational terminal and at the junction of key regional receipt and export pipelines. The Bakken Expansion Program went into service in March 2013, increasing takeaway capacity in the prolific Bakken region by 145,000 barrels per day. Predominantly underwritten by take-or-pay contracts, this expansion represents another attractive and stable source of distributable cash flow for the Fund. Enbridge Mainline Weyburn Bakken Regina Estevan Minot Saskatchewan System Carlyle Cromer Bakken Expansion Program North Dakota System (Enbridge Energy Partners) Gretna Clearbrook Superior 4 < ENBRIDGE INCOME FUND HOLDINGS INC ANNUAL REVIEW

7 UNIQUE STRENGTH The Alliance System is designed and well positioned to cost effectively transport high-energy gas gas rich in ethane, propane, butane, and other liquids to premium markets in the United States. The system is expected to be well utilized for years to come. NATURAL GAS TRANSMISSION Enbridge Income Fund has a 50% interest in the Canadian portion of the 3,719-kilometre Alliance System, which transports close to 1.6 billion cubic feet per day of liquids rich natural gas from western Canada and the Bakken region to delivery points near Chicago, Illinois. Alliance Canada consists of 1,560 kilometres of the Alliance System s mainline beginning near Gordondale, Alberta, and connecting to the U.S. portion of the Alliance Pipeline Montney Fort St. John Duvernay Formation Edmonton Calgary Bakken Regina Alliance Pipeline US (ENB) Alliance Pipeline Canada Superior at the Canada/U.S. border near Elmore, Saskatchewan. MARKET ACCESS In the Chicago area, the Alliance System connects with two local natural gas distribution systems and five interstate natural gas pipelines, providing shippers with access to markets in the midwestern and northeastern United States and eastern Canada, as well as access to the Aux Sable Liquid Products Inc. (Aux Sable) fractionation plant, which extracts natural gas liquids from Alliance s high-energy natural gas stream. The Aux Sable plant is one of the largest liquids processing facilities in North America. Aux Sable Liquid Products Inc. (ENB) Chicago The Alliance System traverses the Montney, Duvernay and Bakken plays, where production of liquids rich gas is currently projected to grow to6billioncubic feet per day in the next five years. Our sponsor, Enbridge Inc., holds a 42.7% equity interest in Aux Sable, as well as a 50% interest in Alliance Pipeline U.S. STEADY PERFORMANCE Alliance has take-or-pay contracts in place for virtually all of its firm service capacity through December 1, These contracts ensure that Alliance recovers its costs and earns a return on invested capital regardless of whether volumes are actually shipped, thus providing the Fund with stable and highly predictable cash flows for the next three years. In October 2012, Alliance Canada announced a proposed new service model and toll structure that would apply to the pipeline system after existing firm service contracts expire in Operations Review > 5

8 LETTER TO SHAREHOLDERS John Whelen President Gordon G. Tallman Chair, Board of Directors 2012wasayearofsignificantaccomplishment for the Fund. As a result of two large strategic acquisitionsoverthepast18months,aswell as steady organic growth, we have further strengthened and diversified our portfolio of energy infrastructure assets and sources of low-risk, distributable cash flow. 6 < ENBRIDGE INCOME FUND HOLDINGS INC ANNUAL REVIEW

9 TOTAL SHAREHOLDER RETURN Since the inception of the Fund in 2003, we have steadily built a portfolio of businesses and an investment proposition designed to appeal to investors seeking stability of cash flows through investment in low-risk energy infrastructure businesses. Over the past five years, our total return to shareholders has exceeded 28% on an annualized basis. ENF 28% S&P/TSX 1% The Fund s $1.2-billion acquisition of wind and solar power generation assets from wholly-owned subsidiaries of Enbridge Inc. (Enbridge) in October 2011 (the 2011 acquisition) proved to be a very strong contributor to both earnings and cash flow in The Fund s cash available for distribution increased 46% to $195.6 million, primarily on the strength of the 2011 acquisition. Enbridge Income Fund Holdings Inc. achieved earnings of $59.8 million, or $1.48 per common share, reflecting the performance of the Company s investment in the Fund. The Fund further strengthened its asset base in December 2012, when it acquired another very attractive portfolio of crude oil storage and renewable power generation assets, from Enbridge, for an aggregate price of $1.2 billion (the 2012 acquisition). On the basis of the 2012 acquisition and the completion of the Bakken Expansion Program to increase crude oil pipeline capacity in southeast Saskatchewan, the Company increased its monthly dividend by 8% in December Over the last five years, our total return to shareholders has exceeded 28% on an annualized basis, compared to 1% for the broader market index. We believe our performance confirms the inherent value in our value proposition, which focuses on the delivery of a high payout of cash flow from low-risk energy infrastructure assets. In June 2012, the Company was added to the S&P/TSX Composite Index a direct reflection of the growing size and relevance of our business. We expect index inclusion will enhance the Company s trading liquidity and access to capital as well as help support our ongoing strategy to grow through low-risk expansions and acquisitions. We are confident about the fundamentals and the positioning of our assets and believe that they will continue to be in demand and well utilized for many years to come. GREEN POWER GENERATION We have substantially scaled up the Fund s Green Power business over the past 18 months to the point where we now have a nicely diversified mix of geographically dispersed assets that use wind, solar, and waste heat resources to collectively generate more than 500 MW of environmentally-friendly power. We re very pleased with the overall performance of the portfolio of wind and solar power generation assets in Ontario purchased in the 2011 acquisition. Integration of these facilities into the Fund s asset portfolio went smoothly. The benefits we hoped to achieve through this acquisition are being realized both in terms of the uplift they provided to the Fund s earnings and cash flow, as well as having a more diversified asset and capital base from which to build in the future. An additional 119 MW of renewable power generation capacity in Ontario was purchased in the 2012 acquisition the 99 MW Greenwich Wind Project; the 15 MW Amherstburg Solar Project; and the 5 MW Tilbury Solar Project. The Green Power business segment is also growing organically. Construction of the Whitecourt Recovered Energy Project, which is being undertaken by 50%-owned NRGreen, is scheduled to be in service in the second quarter of This facility will be NRGreen s fifth waste heat recovery unit located Letter to Shareholders > 7

10 BAKKEN EXPANSION The Fund s Bakken Expansion Program went into service in March 2013, enabling delivery of growing crude oil production in North Dakota to the Enbridge Inc. mainline at Cromer, Manitoba. The Bakken region has quickly grown to become one of the leading oil producing regions in North America. along the Alliance Pipeline and its first in Alberta. Once completed, the Whitecourt facility will generate 14 MW of clean energy and will bring the Fund s interests in renewable and alternative power generation to more than 530 MW of capacity. All of our Green Power facilities continue to experience high operational availability and are a great fit with the Fund s low-risk business model. The price at which the power is sold has been fixed under long-term contracts, most of which extend at least 20 years, so we re protected against fluctuations in power prices. LIQUIDS TRANSPORTATION & STORAGE Through the 2012 acquisition, the Fund has transformed into a key player in the crude oil storage business in North America. These assets are also a great fit for the Fund. All the facilities operate under long-term, fixed-fee, take-or-pay storage contracts with creditworthy counterparties for virtually all of the available capacity. The storage contracts have a weighted average remaining contract life of close to 22 years and will generate stable and predictable cash flow for years to come. On our Saskatchewan System, we ve made good progress with our organic growth opportunities centred on enabling delivery of growing crude oil production from the highly prolific Bakken play to the Enbridge mainline terminal at Cromer, Manitoba. In early 2013, we put into service the Bakken Expansion Program, which is a joint initiative between the Fund and Enbridge Energy Partners, L.P. The project was completed on time and within budget and provides substantially termcontracted capacity to bring an additional 145,000 barrels per day of light crude oil to Enbridge s Cromer terminal. NATURAL GAS TRANSMISSION There were also developments in 2012 in the Fund s natural gas transmission business, which is comprised of our 50% interest in the Canadian portion of the Alliance Pipeline, a high-pressure natural gas transmission system that delivers gas from western Canada to utility customers in other pipelines in the Chicago area. Nearly all of Alliance s capacity is fully contracted under existing firm service agreements through December 1, 2015, providing the Fund with stable and highly predictable cash flow for the next three years. In October 2012, Alliance Canada announced a proposed new service model and toll structure that would apply to the pipeline system after existing firm service contracts expire in We believe that this new service offering, together with Alliance s unique capabilities to transport liquids rich gas, will be very appealing to both existing and prospective western Canadian shippers seeking to transport liquids rich gas to premium markets south of the border. 8 < ENBRIDGE INCOME FUND HOLDINGS INC ANNUAL REVIEW

11 AMHERSTBURG SOLAR In 2012, the Fund acquired from Enbridge Inc. the 15 MW Amherstburg Solar Project and the 5 MW Tilbury Solar Project, both of which are ground-mount, thin-film photovoltaic facilities located south of Sarnia, Ontario. The Fund is the largest solar producer in Canada. OUTLOOK We wish to thank the Fund s Manager and dedicated support teams within Enbridge and its affiliates, as well as our independent directors, for all their support during another year of significant growth for the Fund. Over the past 18 months, we ve proven the Fund s ability to finance, execute and successfully integrate largescale acquisitions of complementary infrastructure, and we re very pleased to see how supportive the market has been of those transactions. Our ability to access the capital markets to fund our recent growth initiatives gives us confidence that we ll be able to continue to execute our growth strategy in the future when opportunities arise to expand existing assets or acquire new infrastructure. As the Fund grows, we ll continue to focus on our key strategies: optimizing the value of our existing assets by maximizing their efficiency and ensuring that they remain cost competitive in the long run, while, at all times, focusing on safety and integrity; growing organically to extend or expand our existing assets; and selectively pursuing the acquisition of additional energy infrastructure either from Enbridge Inc. or third parties that fit well with the Fund s low-risk business model. We ll also continue to benefit from our close operating and strategic relationship with Enbridge, one of the most successful developers and operators of energy infrastructure in North America. The Fund has great fundamental strength because of the location of our assets, the vast majority of which are underpinned by long-term contracts, because our asset base is highly diversified, and because of the stability and predictability of the cash flow that we generate. This successful mix provides long-term stability, and gives us confidence that we will continue to deliver reliable and attractive returns to our investors both today and well into the future. GORDON G. TALLMAN Chair, Board of Directors March 6, 2013 JOHN WHELEN President Letter to Shareholders > 9

12 NRGREEN The Fund has a 50% interest in NRGreen Power, which generates electricity using waste heat from Alliance Canada s compressor stations. In 2013, NRGreen expects to put in service its first waste heat recovery unit in Alberta a facility that will deliver up to 14 MW of electricity. FINANCIAL HIGHLIGHTS ENBRIDGE INCOME FUND 1 Year ended December 31, (millions of Canadian dollars, except per unit amounts) Earnings Green Power Liquids Transportation and Storage Alliance Canada Corporate (116.4) (64.9) Retrospective Adjustments Cash available for distribution 2, Cash distributions declared Per unit (dollars per unit) $1.462 $1.392 OPERATING HIGHLIGHTS ENBRIDGE INCOME FUND Year ended December 31, Green Power (thousands of megawatt hours produced) 4 Wind Projects Solar Projects NRGreen (50%) Liquids Transportation and Storage (thousands of barrels per day) 4 Westspur System Saskatchewan Gathering System Weyburn System Virden System Alliance Canada (millions of cubic feet per day) 1, , Financial Highlights for Enbridge Income Fund have been extracted from financial statements prepared in accordance with U.S. GAAP. 2 In accordance with U.S. GAAP, earnings for all 2012 and 2011 periods have been retrospectively adjusted to furnish comparative information related to the 2012 acquisition and the 2011 acquisition. The impact of the retrospective adjustments has been eliminated from cash available for distribution as these cash flows were not available to distribute to unitholders. 3 See Non-GAAP Measures on page 13 of this document. 4 Presented before the effects of retrospective adjustments. 10 < ENBRIDGE INCOME FUND HOLDINGS INC ANNUAL REVIEW

13 BOARD OF DIRECTORS (top row, left to right) Richard (Dick) Auchinleck, J. Richard Bird, M. Elizabeth Cannon (bottom row, left to right) Charles W. Fischer, Ernest F. H. (Harry) Roberts, Gordon G. Tallman CORPORATE GOVERNANCE The Board of Directors and Management are committed to a high standard of Corporate Governance. The Directors and Management have continued to assess the Company s governance policies and practices in light of regulatory initiatives in Canada that have been adopted to improve corporate governance as well as the evolving standards and expectations for governance in the Canadian capital markets. Management is of the view that the Company s governance structures, systems and practices conform with the governance rules and guidelines established by Canadian securities regulatory authorities for public companies. MANAGEMENT Enbridge Management Services Inc., a wholly owned subsidiary of Enbridge Inc., is the Manager of the Company. J. Richard Bird Director Executive Vice President, Chief Financial Officer and Corporate Development, Enbridge Inc. Rod W. Craddock Controller Senior Manager, Corporate Controllers Group, Enbridge Inc. Colin K. Gruending Chief Financial Officer Vice President, Treasury & Tax, Enbridge Inc. Jana L. Jordan Treasurer Senior Director, Treasury, Enbridge Inc. Debra J. Poon Corporate Secretary Senior Legal Counsel, Enbridge Inc. David T. Robottom Director Executive Vice President & Chief Legal Officer, Enbridge Inc. John K. Whelen President Senior Vice President & Controller, Enbridge Inc. Stephen J. Wuori Director President, Liquids Pipelines & Major Projects, Enbridge Inc. BOARD OF DIRECTORS ENBRIDGE INCOME FUND HOLDINGS INC. Richard (Dick) Auchinleck Corporate Director J. Richard Bird Executive Vice President, Chief Financial Officer and Corporate Development, Enbridge Inc. M. Elizabeth Cannon President, University of Calgary Charles W. Fischer Corporate Director Ernest F. H. (Harry) Roberts Corporate Director Gordon G. Tallman Chair, Corporate Director Corporate Governance > 11

14 SHAREHOLDER AND INVESTOR INFORMATION If you have inquiries regarding the following: additional financial information industry and company developments latest news releases or investor presentations any other investment-related inquiries please contact Enbridge Investor Relations at or visit the Enbridge Income Fund Holdings Inc. website at enbridgeincomefund.com EXECUTIVE OFFICE Enbridge Income Fund Holdings Inc. 3000, 425 1st Street S.W. Calgary, Alberta, Canada T2P 3L8 Telephone: Facsimile: MANAGER Enbridge Management Services Inc. 3000, 425 1st Street S.W. Calgary, Alberta, Canada T2P 3L8 Telephone: Facsimile: STOCK EXCHANGE The common shares of Enbridge Income Fund Holdings Inc. are listed in Canada on the Toronto Stock Exchange and trade under the symbol ENF. REGISTRAR AND TRANSFER AGENT CIBC Mellon Trust Company c/o Canadian Stock Transfer Company Inc. 600, 333 7th Avenue S.W. Calgary, Alberta T2P 2Z1 Telephone: Toll free: Internet: canstockta.com AUDITORS PricewaterhouseCoopers LLP QUALIFICATION FOR REGISTERED PLANS Common shares are qualified investments for registered retirement savings plans, registered retirement income funds, deferred profit sharing plans and registered education savings plans. All dividends paid by the Company will be designated as eligible dividends, pursuant to subsection 89(14) of the Income Tax Act. An eligible dividend paid to a Canadian resident is entitled to the enhanced dividend tax credit. MONTHLY CASH DIVIDENDS Enbridge Income Fund Holdings Inc. holds 85.6% of the trust units (units) of Enbridge Income Fund. Distributions on Fund units will generally be paid to unitholders of record as of the close of business on the last business day of each month, and are expected to be paid on or about the 15th day of the following month. The Company s practice is to declare and pay dividends on its common shares on the same record and payment dates as the Fund. DIVIDEND REINVESTMENT AND SHARE PURCHASE PLAN The Company maintains a Dividend Reinvestment Plan (the Plan ). Participants may elect, without brokerage fees, to automatically reinvest dividends in additional common shares of the Company. Details of the Plan are available on the Company s website or from the Registrar and Transfer Agent. Investors should contact their respective investment dealer to enroll. In order to be eligible to participate in the Plan, shareholders must be resident in Canada and hold a minimum of 100 common shares. Shareholders resident outside of Canada will be entitled to participate in the Plan subject to applicable local law. U.S. residents and citizens are not eligible to participate. 12 < ENBRIDGE INCOME FUND HOLDINGS INC ANNUAL REVIEW

15 FORWARD-LOOKING INFORMATION NON-GAAP MEASURES Designed and produced by Karo Group. Printed in British Columbia, Canada by Blanchette Press. This Annual Review contains forwardlooking information ( FLI ) for the purpose of providing management s assessment of future results, activities, developments, plans and operations of Enbridge Income Fund Holdings Inc. (the Company ) and Enbridge Income Fund (the Fund ) to shareholders of the Company and may not be appropriate for other purposes. FLI is often, but not always, identified by words such as anticipate, may, likely, expect, project, estimate, forecast, plan, will, intend, target, believe and similar words suggesting future outcomes or statements regarding an outlook. FLI in the Annual Review include statements with respect to: future cash flow; cash available for distribution; payout and returns to shareholders; income and stability; the Fund s acquisition and growth strategy; the anticipated performance of the Fund s assets; the cost effectiveness and competitiveness of the Alliance System, the Saskatchewan System and other businesses of the Fund; projected growth and demand of crude oil, natural gas and natural gas liquids and for renewable and alternative energy; anticipated construction, completion and impact of specific projects; and the ability of the Fund to execute on its strategy; liquidity and access to capital. Although the Company believes that the FLI is reasonable based on information presently available, such statements are Enbridge is committed to reducing its impact on the environment in every way, including the production of this publication. This report was printed entirely on FSC Certified paper, which is manufactured entirely with wind energy and contains 100% post-consumer recycled fibre. not guarantees of future performance and you are cautioned against placing undue reliance on FLI. FLI inherently involves a variety of assumptions, known and unknown risks, uncertainties and other factors which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied in the FLI contained in the Annual Review. Material assumptions, risks and factors include but are not limited to: expected supply, demand and prices for crude oil, natural gas and natural gas liquids;expected demand for renewable and alternative energy; industry conditions; interest rates; project approvals and timing, availability and price of labour and construction materials; operational reliability and performance; maintenance of customer support; regulatory approvals, legislation and regulations; anticipated in-service dates; weather; competition; and counterparty risk. A discussion of these and other risks are set out in the documents filed by the Company and the Fund with Canadian securities regulators. Except to the extent required by law, neither the Company nor the Fund assume any obligation to publicly update or revise any FLI, whether as a result of new information, future events or otherwise. All FLI in this Annual Review is expressly qualified in its entirety by these cautionary statements. This Annual Review contains references to the Fund s cash available for distribution. Cash available for distribution represents the Fund s cash available to fund distributions on trust units and ECT preferred units as well as for debt repayments and reserves. This measure is important to shareholders as the Company s objective is to provide a predictable flow of dividends to shareholders and the Company s cash flows are derived from its investment in the Fund. Cash available for distribution is not a measure that has standardized meaning prescribed by United States Generally Accepted Accounting Principles (U.S.GAAP) and is not considered a GAAP measure. Therefore, this measure may not be comparable with similar measures presented by other issuers. A reconciliation of the Fund s cash available for distribution to its nearest GAAP measure was provided in the Company s News Release dated February 12, Forward-Looking Information > 13

16 3000, 425 1st Street S.W. Calgary, Alberta, Canada T2P 3L8 Telephone: Fax: Toll-free: enbridgeincomefund.com