7. VARIABLE INTEREST ENTITIES

Enbridge Holdings (DakTex) L.L.C.

On April 27, 2017, we finalized a joint funding arrangement with our General Partner with respect to our equity investment in the Bakken Pipeline System, held through our investment subsidiary, Enbridge Holdings (DakTex) L.L.C. (DakTex). DakTex is now owned 75% by our General Partner and 25% by us. DakTex owns a 75% equity interest in MarEn Bakken Company LLC (MarEn). For more information regarding our equity investment, refer to Note 8. Equity Investments in Joint Ventures.

DakTex is considered a variable interest entity (VIE) consolidated by us. We have authority as managing member to exclusively manage the business and affairs of DakTex, subject to certain protective voting rights and are subject to removal as managing member only upon certain fundamental changes. We are the primary beneficiary of Daktex because (i) as the managing partner we have the power to direct the activities of DakTex that most significantly impact its economic performance; and (ii) we have the obligation to absorb losses and the right to receive residual returns that potentially could be significant to DakTex.

DakTex does not have any liabilities. Its sole asset is its investment in MarEn. At June 30, 2017, the carrying amount of DakTex’s investment in MarEn was $1,544.3 million.