Enbridge Income Fund Holdings Inc. Reports 2018 Second Quarter Results

CALGARY, Aug. 3, 2018 /CNW/ - Enbridge Income Fund Holdings Inc. (TSX: ENF) (ENF or the Company) today reported second quarter 2018 financial results and provided a quarterly business update.

SECOND QUARTER HIGHLIGHTS

(all financial figures are unaudited and in Canadian dollars unless otherwise noted)

Earnings of $758 million or $4.33 per common share for the second quarter and $574 million or $3.28 per common share for the six-month period, materially impacted by a non-operating factor as a result of the adoption of a new International Financial Reporting Standards (IFRS) accounting policy in 2018





or per common share for the second quarter and or per common share for the six-month period, materially impacted by a non-operating factor as a result of the adoption of a new International Financial Reporting Standards (IFRS) accounting policy in 2018 Adjusted earnings of $113 million or $0.64 per common share for the second quarter and $224 million or $1.28 per common share for the first half of 2018





or per common share for the second quarter and or per common share for the first half of 2018 Fund Group Distributable Cash Flow (DCF) of $678 million and $1,369 million for the second quarter and first half of 2018, respectively





and for the second quarter and first half of 2018, respectively Line 3 Replacement Project construction well underway in Canada ; with respect to the US portion of the project, Minnesota Public Utilities Commission (MPUC) voted in favor of the issuance of the Certificate of Need and Route Permit





; with respect to the US portion of the project, Minnesota Public Utilities Commission (MPUC) voted in favor of the issuance of the Certificate of Need and Route Permit A special committee of independent directors has been established to review and consider a proposal from Enbridge Inc. (Enbridge) to acquire all of the outstanding common shares of the Company not currently owned by Enbridge





Fund Group closed an agreement to sell 49% of its interest in its wind and solar renewable power generation assets for $1,050 million

FINANCIAL RESULTS

The Company reported financial results for the three and six months ended June 30, 2018, compared to the same periods in 2017, as summarized in the table below:







Three months ended

Six months ended





June 30,

June 30,

2018 2017

2018 2017 (millions of Canadian dollars)









Earnings/(loss)1 758 (35)

574 (145) Earnings/(loss) per common share1 4.33 (0.25)

3.28 (1.09) Adjusted earnings2 113 77

224 144 Adjusted earnings per common share 0.64 0.54

1.28 1.08 EIPLP adjusted EBITDA2 911 636

1,818 1,259 Fund Group DCF 678 501

1,369 923 Fund Group payout ratio





73% 87%

1 Comparative information for the three and six months ended June 30, 2017 has been retrospectively adjusted to reflect the adoption of IFRS 9. 2 Schedules reconciling adjusted earnings, Enbridge Income Partners LP (EIPLP) adjusted earnings before interest, income taxes and depreciation and amortization (adjusted EBITDA) and DCF are available at www.enbridgeincomefund.com and as Appendices to this news release.

GAAP earnings for the second quarter of 2018 increased by $793 million relative to the same period in 2017 due to a non-operating factor, specifically the adoption of a new IFRS accounting policy on January 1, 2018, resulting in gains and losses arising from changes in the fair value of the Company's investment in the Fund being recognized in earnings, rather than in other comprehensive income. Adjusted earnings for the second quarter increased by $36 million compared to the same period in 2017 as a result of a higher number of ordinary trust units (Fund Units) of Enbridge Income Fund (the Fund) held by the Company and an increase in the Fund Unit distribution in January 2018.

EIPLP adjusted EBITDA was up by $275 million in the second quarter of 2018 relative to the prior year. Period-over-period growth was driven largely by increased tolls, throughput, and more favourable realized foreign exchange hedge settlements on the Canadian Mainline and by incremental earnings from new projects within the Regional Oil Sands System that were brought into service throughout 2017. Alliance Pipeline and the Fund Group's portfolio of green power assets also contributed to EBITDA growth. See EIPLP operating results for further detail.

Fund Group DCF increased as a result of the same factors noted above. The Fund Group, which collectively refers to EIPLP and its subsidiaries and investees, the Fund and Enbridge Commercial Trust, continues to expect that full year results are trending towards the upper end of the DCF guidance range of $2.45 to $2.65 billion.

PROJECT UPDATES

Line 3 Replacement

The $9 billion Line 3 Replacement Project (L3R Project, of which $5.3 billion relates to the Canadian portion owned by the Fund Group) is a critical integrity replacement project that will enhance the safety and reliability of Enbridge's liquids Mainline System including the Company's Canadian Mainline, and provide incremental export capacity to Western Canadian producers and increased security of supply for key refining markets along the Mainline system as well as to markets further downstream.

The project continues to progress well on several fronts. The first phase of pipeline construction is complete in Canada, with approximately 40% of the pipe now laid, and the remainder to be advanced later this year. The U.S. portion of the L3R Project is being constructed by Enbridge Energy Partners L.P. (EEP), a subsidiary of Enbridge. In the U.S., the pipeline replacement work in Wisconsin is now complete and has been placed into service.

In Minnesota, on June 28th, the MPUC voted in favor of issuing a Certificate of Need and a Route Permit for the project. A written order documenting the MPUC's rulings in these dockets is expected to be issued by September 2018. In addition to the MPUC's approval, permits are also required from the U.S. Army Corps of Engineers, state agencies (including the Minnesota Department of Natural Resources and the Minnesota Pollution Control Agency) and local governments in Minnesota. EEP anticipates the receipt of such permits in time to begin construction activities during the first quarter of 2019. Management continues to anticipate an in-service date for the project in the second half of 2019.

Alliance Pipeline

During the first half of 2018, Alliance Pipeline announced an open season for binding bids for additional long-term firm transportation service contracts on the Alliance Pipeline Canada and Alliance Pipeline US systems. The open season closed on May 30, 2018, and the binding commitments did not reach the targets for additional long-term firm transportation service. Based on these results and feedback from producers, Alliance Pipeline is assessing potential alternatives and next steps.

OTHER BUSINESS

Asset Monetization

On August 1, 2018, the Company announced that a subsidiary within the Fund Group closed the sale of a 49% interest in its wind and solar renewable power generation assets to the Canadian Pension Plan Investment Board (CPPIB) for cash proceeds of approximately $1.05 billion. The Fund Group will initially utilize the proceeds to repay credit facility and commercial paper borrowings. Following the conclusion of the special committee process discussed in "Restructuring Proposal" below, management will evaluate whether additional actions to utilize the proceeds are appropriate, including the potential redemption of Trust Units of the Fund.

Restructuring Proposal

On May 18, 2018, the Company announced that it received a non-binding offer from Enbridge to acquire all of the outstanding common shares of ENF not currently owned by Enbridge, in exchange for Enbridge common shares at a fixed exchange ratio based on a 5% premium to ENF's closing common share price on May 16, 2018 (the Proposal). Under the Proposal, the Company's shareholders would receive 0.7029 common shares of Enbridge per ENF common share. The Board of Directors of ENF has established a special committee of independent directors to review and consider the Proposal.

The Proposal is subject to conditions, including the negotiation of a definitive agreement and the review and favorable recommendation by the special committee, approvals by the ENF Board of Directors and the Enbridge Board of Directors, and approvals by the shareholders of the Company. Any definitive agreement is expected to contain customary closing conditions, including standard regulatory notifications and approvals.

The Proposal is part of Enbridge's sponsored vehicle restructuring initiative to simplify its corporate structure. On May 17, 2018, Enbridge announced separate all-share proposals to the respective boards of directors of Enbridge's other sponsored vehicles, including Spectra Energy Partners, LP (SEP), EEP, and Enbridge Energy Management, L.L.C. (EEQ).

Revised FERC Policy on Treatment of Income Taxes

On March 15, 2018, the Federal Energy Regulatory Commission (FERC) changed its long-standing policy on the treatment of income tax amounts included in the rates of pipelines and other entities subject to cost of service rate regulation within a Master Limited Partnership (MLP). On July 18, 2018, the FERC issued an Order that: (1) dismissed all requests for rehearing of its March 15, 2018 revised policy statement and explained that its revised policy statement does not establish a binding rule, but is instead an expression of general policy that the Commission intends to follow in the future; and (2) provides guidance that if an MLP or other tax pass-through pipeline eliminates its income tax allowance from its cost of service pursuant to FERC's Revised Policy Statement, then Accumulated Deferred Income Taxes (ADIT) will similarly be removed from the cost of service and MLP pipelines may also eliminate previously-accumulated sums in ADIT instead of flowing ADIT balances back to ratepayers. As a statement of general policy, the FERC will consider alternative application of its tax allowance and ADIT policy on a case by case basis.

Although the Company is not directly impacted by the FERC actions, under the IJT mechanism, reductions or increases in the EEP tariff rates will create an offsetting revenue increase or decrease, respectively, on the Canadian Mainline system owned by the Fund Group. The impact of the FERC policy change on EEP's tariff rates is subject to, among other things, the outcome of Enbridge's proposal to acquire EEP's publicly owned equity securities which would mitigate the impacts of the policy change on EEP.

DIVIDENDS AND OWNERSHIP STRUCTURE

The ENF Board of Directors announced a cash dividend of $0.1883 per common share to be paid on September 17, 2018 to shareholders of record at the close of business on August 31, 2018, representing a 10% increase year-over-year.

These dividends are designated eligible dividends for Canadian tax purposes, which qualify for the enhanced dividend tax credit.

The Company holds a 70.8 percent Fund Unit interest in the Fund and an approximate 21.8 percent overall economic interest in the Fund Group. The Fund Group is comprised of the Fund, Enbridge Commercial Trust (ECT), EIPLP and the subsidiaries and investees of EIPLP. EIPLP holds the operating entities of the Fund Group.

SECOND QUARTER 2018 FINANCIAL RESULTS

For more information on the operating results of the Company, the Fund and EIPLP, please see the respective Management's Discussion and Analysis on the Company's website at http://www.enbridgeincomefund.com/Find-Shareholder-Information/Reports-and-Filings/English.aspx . The documents are also filed on SEDAR under Enbridge Income Fund Holding Inc.'s profile for the Company and under Enbridge Income Fund's profile for the Fund and EIPLP.

EIPLP OPERATING RESULTS











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June 30,

June 30,

2018 2017

2018 2017 Liquids Pipelines - Average deliveries (thousands of barrels per day)











Canadian Mainline1 2,636 2,449

2,631 2,521

Regional Oil Sands System2 1,719 1,171

1,751 1,228

Canadian Mainline International Joint Tariff (IJT) Residual Toll3 $1.89 $1.62

$1.77 $1.55

Canadian Mainline Effective FX Rate $1.26 $1.04

$1.26 $1.04 Gas Pipelines - Average throughput (millions of cubic feet per day)











Alliance Pipeline Canada 1,584 1,519

1,611 1,574

Alliance Pipeline US 1,706 1,623

1,728 1,674 Green Power (thousands of megawatt hours produced)











Wind Facilities 645 652

1,427 1,358

Solar Facilities 49 49

77 75

Waste Heat Facilities 22 22

52 50

1 Canadian Mainline average throughput volume represents deliveries ex-Gretna, Manitoba, which is made up of United States and eastern Canada deliveries originating from western Canada. 2 Volumes are for the Athabasca mainline, Athabasca Twin, Waupisoo Pipeline and Woodland Pipeline and exclude laterals on the Regional Oil Sands System. 3 US dollars per barrel.

EIPLP ADJUSTED EBITDA1















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June 30,

June 30,

2018 2017

2018 2017 (unaudited; millions of Canadian dollars)









Liquids Pipelines 772 509

1,523 1,002 Gas Pipelines 54 43

117 100 Green Power 69 70

150 136 Eliminations and Other 16 14

28 21 Adjusted EBITDA 911 636

1,818 1,259

1 Adjusted EBITDA is a non-GAAP measure that does not have any standardized meaning prescribed by generally accepted accounting principles in the United States of America (U.S. GAAP). See definition within Non-GAAP Reconciliations Appendices.

EIPLP adjusted EBITDA increased by $275 million and $559 million for the second quarter and first half of 2018, respectively. The key period-over-period performance drivers included:

Higher contributions from the Canadian Mainline on a quarter-to-date and year-to-date basis in 2018 due to higher Canadian Mainline IJT Residual Benchmark Tolls, stronger Canadian Mainline throughput as a result of capacity optimization initiatives implemented in 2017, and higher foreign exchange hedge rates used to record United States dollar denominated Canadian Mainline revenues.

dollar denominated Canadian Mainline revenues. Adjusted EBITDA generated by the Canadian Mainline for the balance of the year will reflect the positive effect of an increase in the Canadian Mainline IJT Residual Benchmark Toll to US$1.92 per barrel effective July 1, 2018 , reflecting, the relative increases in the IJT and the index component of the U.S. portion of the toll.

per barrel effective , reflecting, the relative increases in the IJT and the index component of the U.S. portion of the toll. Growth in Regional Oil Sands on a quarter-to-date and year-to-date basis in 2018 was driven by contributions from new projects placed into service in late 2017, primarily Norlite and Wood Buffalo Extension.

Higher contributions at Alliance Pipeline on a quarter-to-date and year-to-date basis in 2018 was primarily due to an increase in revenues resulting from strong demand for seasonal firm and interruptible service.

Stronger contributions from the Green Power segment, which included stronger wind resources across all wind facilities on a year-to-date basis in 2018; and a net gain of $11 million in the first quarter of 2018 from an arbitration settlement related to the wind facilities located in Quebec .

FUND GROUP DISTRIBUTABLE CASH FLOW1













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June 30,

June 30,

2018 2017

2018 2017 (unaudited; millions of Canadian dollars)









EIPLP adjusted earnings before interest, income taxes and depreciation and amortization 911 636

1,818 1,259

Cash distributions in excess of equity earnings2 21 18

16 7

Maintenance capital expenditures3 (19) (10)

(37) (29)

Interest expense2 (108) (99)

(218) (193)

Current income taxes2 (42) (6)

(86) (30)

Special interest rights distributions - IDR4 (31) (12)

(63) (24)

Other receipts of cash not recognized in revenue5 5 20

34 28

Other adjusting items (8) 4

7 8 EIPLP DCF 729 551

1,471 1,026

Fund and ECT interest expense, net (20) (20)

(37) (41)

ECT incentive fee (31) (30)

(63) (61)

Fund and ECT operating and administrative expense — —

(2) (1) Fund Group DCF 678 501

1,369 923 Distributions paid to Enbridge Inc. 385 323

772 659 Distributions paid to ENF 113 79

224 146 Fund Group distributions declared 498 402

996 805 Fund Group payout ratio





73% 87%

1 DCF is a non-GAAP measure that does not have any standardized meaning prescribed by U.S. GAAP. See definition within Non-GAAP Reconciliations Appendices. 2 These balances are presented net of adjusting items. 3 Maintenance capital expenditures are expenditures that are required for the ongoing support and maintenance of the existing pipeline system or that are necessary to maintain the service capability of the existing assets (including the replacement of components that are worn, obsolete or completing their useful lives). For the purpose of DCF, maintenance capital excludes expenditures that extend asset useful lives, increase capacities from existing levels or reduce costs to enhance revenues or provide enhancements to the service capability of the existing assets. Maintenance capital expenditures occur primarily within EIPLP's Liquids Pipelines segment. 4 Incentive Distribution Right (IDR) refers to the cash component of the Special Interest Rights (SIR) distributions. IDR distributions are declared monthly and paid in cash to holders of the SIR in the following month. 5 Consists of cash received net of revenue recognized for contracts under make-up rights and deferred revenue arrangements.

Fund Group DCF underpins the Fund Group's ability to pay distributions to holders of Fund Units, including the Company. The Fund Group's DCF increased by $178 million and $445 million for the three and six months ended June 30, 2018, respectively. The key period-over-period performance drivers included:

The same business performance factors as discussed in the EIPLP Adjusted EBITDA section above, as well as the net effect of the following:

section above, as well as the net effect of the following: Higher cash distributions received from Alliance Pipeline; partially offset by

Higher interest expense due to lower capitalized interest and higher levels of debt outstanding in 2018;

Higher adjusted current income taxes primarily due to an increase in adjusted earnings before income taxes in 2018; and

Greater IDR cash distributions paid, which increase as Fund Unit distributions increase.

ENBRIDGE INCOME FUND HOLDINGS INC.















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June 30,

June 30,

2018 2017

2018 2017 (unaudited; millions of Canadian dollars)









Distribution income 113 79

224 146 Dividends declared 99 75

197 139

The Company's distribution income represents substantially all of the Company's adjusted earnings and cash flows and is derived from the Fund Unit distributions paid to the Company. For the second quarter and first half of 2018, distribution income increased over the comparable periods of 2017, as a result of a higher monthly Fund Unit distribution of $0.2134 per unit that commenced in January 2018 and the Company investing in additional Fund Units in December 2017.



CONFERENCE CALL

The Company will hold a joint conference call and webcast on August 3, 2018 at 9:00 a.m. Eastern Time (7:00 a.m. Mountain Time) with Enbridge Inc., Enbridge Energy Partners, L.P. and Spectra Energy Partners, LP to provide an enterprise wide business update and review 2018 second quarter financial results. Analysts, members of the media and other interested parties can access the call toll free at (877) 930-8043 or within and outside North America at (253) 336-7522 using the access code of 5369238#. The call will be audio webcast live at https://edge.media-server.com/m6/p/6pm7mqpf. A webcast replay and podcast will be available approximately two hours after the conclusion of the event and a transcript will be posted to the website within 24 hours. The replay will be available for seven days after the call toll-free (855) 859-2056 or within and outside North America at (404) 537-3406 (access code 5369238#).

The conference call format will include prepared remarks from the executive team followed by a question and answer session for the analyst and investor community only. The Company's media and investor relations teams will be available after the call for any additional questions.

FORWARD-LOOKING INFORMATION

Forward-looking information, or forward-looking statements, have been included in this news release to provide information about the Company and its investee, the Fund, and the Fund's direct and indirect investments and joint ventures (collectively, the Fund Group), including management's assessment of future plans and operations of the Company and the Fund Group. This information may not be appropriate for other purposes. Forward-looking statements are typically identified by words such as "anticipate", "expect", "project", "estimate", "forecast", "plan", "intend", "target", "believe", "likely" and similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information or statements included or incorporated by reference in this document include, but are not limited to, statements with respect to the following: 2018 guidance; expected or target DCF; cash flows; financial strength and flexibility; expected performance of the Fund Group's businesses; construction and in-service dates of projects; expected capital expenditures; safety and reliability of pipeline systems; regulatory and customer approvals, including with respect to the Line 3 Replacement project and the expansion of the Alliance Pipeline System; impact of the Proposal and Enbridge's sponsored vehicle restructuring initiative, including the consummation thereof; shareholder returns; future dividends and distributions by the Company and the Fund; and dividend increases.

Although the Company and the Fund Group believe these forward-looking statements are reasonable based on the information available on the date such statements are made and processes used to prepare the information, such statements are not guarantees of future performance and readers are cautioned against placing undue reliance on forward-looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Material assumptions include assumptions about the following: expected supply of and demand for crude oil, natural gas, natural gas liquids (NGL) and renewable energy; prices of crude oil, natural gas, NGL and renewable energy; exchange rates; inflation; interest rates; availability and price of labor and construction materials; operational reliability; customer and regulatory approvals; maintenance of support and regulatory approvals for the Fund Group's projects; government legislation; anticipated construction and in-service dates; weather; the impact of the dividend policy on the Company's or the Fund Group's future cash flows; capital project funding; the Fund Group's credit ratings; EBITDA or adjusted EBITDA; earnings/(loss) or adjusted earnings/(loss); earnings/(loss) per share; future cash flows and future DCF; and dividends or distributions. Assumptions regarding the expected supply of and demand for crude oil, natural gas, NGL and renewable energy, and the prices of these commodities, are material to and underlie all forward-looking statements as they may impact current and future levels of demand for the Fund Group's services. Similarly, exchange rates, inflation and interest rates impact the economies and business environments in which the Company and the Fund Group operate and may impact levels of demand for the Fund Group's services and cost of inputs, and are therefore inherent in all forward-looking statements. Due to the interdependencies and correlation of these macroeconomic factors, the impact of any one assumption on a forward-looking statement cannot be determined with certainty, particularly with respect to earnings/(loss), adjusted EBITDA, DCF and associated per share amounts or estimated dividends or distributions. The most relevant assumptions associated with forward-looking statements on announced projects and projects under construction, including completion dates and capital expenditures include the following: availability and price of labor and construction materials; effects of inflation and foreign exchange rates on labor and material costs; effects of interest rates on borrowing costs; and the impact of weather and customer, government and regulatory approvals on construction and in-service schedules and cost recovery regimes.

The Company's and the Fund Group's forward-looking statements are subject to risks and uncertainties pertaining to future dividends, DCF guidance, operating performance, regulatory parameters, the Proposal and Enbridge's sponsored vehicle restructuring initiative, project approval and support, weather, economic and competitive conditions, public opinion, changes in tax laws and tax rates, changes in trade agreements, exchange rates, interest rates, commodity prices, political decisions and supply of and demand for commodities, including but not limited to those risks and uncertainties discussed in this news release and in the Company's and the Fund Group's other filings with Canadian securities regulators. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these are interdependent and the Company's or the Fund Group's future course of action depends on management's assessment of all information available at the relevant time. Except to the extent required by applicable law, the Company and the Fund Group assume no obligation to publicly update or revise any forward-looking statements made in this news release or otherwise, whether as a result of new information, future events or otherwise. All subsequent forward-looking statements, whether written or oral, attributable to the Company or the Fund Group or persons acting on the Company's or the Fund Group's behalf, are expressly qualified in their entirety by these cautionary statements.

ABOUT ENBRIDGE INCOME FUND HOLDINGS INC.

Enbridge Income Fund Holdings Inc., through its investment in the Fund, indirectly holds high quality, low-risk energy infrastructure assets. The Fund's assets consist of a portfolio of Canadian liquids transportation and storage businesses, including the Canadian Mainline, the Regional Oil Sands System, the Canadian segment of the Southern Lights Pipeline, Class A units entitling the holder to receive defined cash flows from the United States segment of the Southern Lights Pipeline, a 50 percent interest in the Alliance Pipeline, which transports natural gas from Canada to the United States, and interests in more than 1,400 megawatts of renewable and alternative power generation assets. Enbridge Income Fund Holdings Inc. is a publicly traded corporation on the Toronto stock exchange under the symbol ENF; information about the Company is available on the Company's website at www.enbridgeincomefund.com.

None of the information contained in, or connected to, the Company's website is incorporated in or otherwise forms part of this news release.

FOR FURTHER INFORMATION PLEASE CONTACT:

Media Investment Community Jesse Semko Nafeesa Kassam Toll Free: (888) 992-0997 Toll Free: (800) 481-2804 Email: media@enbridge.com Email: investor.relations@enbridge.com

NON-GAAP RECONCILATIONS APPENDICES

This news release contains references to adjusted earnings, adjusted EBITDA and DCF. Adjusted earnings represent the Company's earnings adjusted for non-operating factors. Adjusted EBITDA represents EIPLP earnings before interest, income taxes and depreciation and amortization (EBITDA), adjusted for unusual, non-recurring or non-operating factors on both a consolidated and segmented basis. These factors, referred to as adjusting items, are reconciled and discussed in the financial results sections of this news release and in these appendices.

Fund Group DCF consists of adjusted EBITDA further adjusted for non-cash items, representing cash flow from the Fund Group's underlying businesses, less deductions for maintenance capital expenditures, interest expense, and applicable taxes and further adjusted for unusual, non-recurring or non-operating factors not indicative of the underlying or sustainable cash flows of the business. DCF is important to unitholders as the Fund Group's objective is to provide a predictable flow of distributions to unitholders. DCF represents the Fund Group's cash available to fund distributions to unitholders, as well as for debt repayments and reserves.

Management believes the presentation of adjusted earnings, adjusted EBITDA and DCF are useful to investors and unitholders as they provide increased transparency and insight into the performance of the Company and the Fund Group. Management uses adjusted earnings, adjusted EBITDA and DCF to set targets, including the distribution payout target, and to assess the performance of the Company and the Fund Group. Adjusted earnings, adjusted EBITDA and DCF are not measures that have standardized meanings prescribed by U.S. GAAP and are not U.S. GAAP measures. Therefore, these measures may not be comparable with similar measures presented by other issuers.

The table below provides a reconciliation of the GAAP and non-GAAP measures.

APPENDIX A ENBRIDGE INCOME PARTNERS LP









EBITDA to Adjusted EBITDA











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June 30,

June 30,

2018 2017

2018 2017 (unaudited; millions of Canadian dollars)









Liquids Pipelines 495 781

830 1,431 Gas Pipelines 55 46

118 105 Green Power 71 71

132 139 Eliminations and Other 18 (6)

43 (5) Earnings before interest, income taxes and depreciation and amortization 639 892

1,123 1,670 Adjusting items:











Changes in unrealized derivative fair value (gain)/loss1 264 (280)

557 (445)

Asset write-down loss 10 —

108 —

Equity investment asset impairment — —

22 —

Unrealized (gain)/loss on translation of United States dollar intercompany loan receivable (2) 20

(15) 26

Lease termination costs — —

23 —

Leak remediation costs — 5

— 12

Leak insurance recoveries — (1)

— (4) Adjusted earnings before interest, income taxes and depreciation and amortization 911 636

1,818 1,259

1 Changes in unrealized derivative fair value gains and losses are presented net of amounts realized on the settlement of derivative contracts during the applicable period.

APPENDIX B ENBRIDGE INCOME FUND HOLDINGS INC.









Loss to Adjusted Earnings











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June 30,

June 30,

2018 2017

2018 2017 (millions of Canadian dollars)









Earnings/(loss)1 758 (35)

574 (145) Adjusting items:











Unrealized fair value change in investment, net of tax2 (645) 112

(350) 289 Adjusted earnings 113 77

224 144

1 Comparative information for the three and six months ended June 30, 2017 has been retrospectively adjusted to reflect the adoption of IFRS 9. 2 Represents unrealized fair value changes arising from the fair value of our investment in the Fund, which is referenced to our common share price. Effective January 1, 2018, ENF adopted IFRS 9 Financial Instruments on a retrospective basis, resulting in the unrealized fair value change being recognized in earnings, rather than in other comprehensive income.

APPENDIX C FUND GROUP









Cash Provided by Operating Activities to DCF













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June 30,

June 30,

2018 2017

2018 2017 (unaudited; millions of Canadian dollars)









EIPLP cash provided by operating activities 771 619

1,576 1,181 Adjusted for changes in operating assets and liabilities 6 (75)

(71) (140)

777 544

1,505 1,041 Maintenance capital expenditures1 (19) (10)

(37) (29) Significant adjusting items:









Special interest rights distributions - IDR2 (31) (12)

(63) (24)

Other receipts of cash not recognized in revenue3 5 19

34 27

Lease termination costs — —

23 —

Leak remediation costs — 5

— 12

Leak insurance recoveries — (1)

— (4)

Other adjusting items (3) 6

9 3 EIPLP DCF 729 551

1,471 1,026

Fund and ECT interest expense, net (20) (20)

(37) (41)

ECT incentive fee (31) (30)

(63) (61)

Fund and ECT operating and administrative expense — —

(2) (1) Fund Group DCF 678 501

1,369 923

1 Maintenance capital expenditures are expenditures that are required for the ongoing support and maintenance of the existing pipeline system or that are necessary to maintain the service capability of the existing assets (including the replacement of components that are worn, obsolete or completing their useful lives). For the purpose of DCF, maintenance capital excludes expenditures that extend asset useful lives, increase capacities from existing levels or reduce costs to enhance revenues or provide enhancements to the service capability of the existing assets. Maintenance capital expenditures occur primarily within EIPLP's Liquids Pipelines segment. 2 IDR refers to the cash component of the SIR distributions. IDR distributions are declared monthly and paid in cash to holders of the SIR in the following month. 3 Consists of cash received net of revenue recognized for contracts under make-up rights and similar deferred revenue arrangements.

SOURCE Enbridge Income Fund Holdings Inc.