VARIABLE INTEREST ENTITIES

CONSOLIDATED VARIABLE INTEREST ENTITIES

Enbridge Energy Partners, L.P.

EEP is a publicly-traded Delaware limited partnership and is considered a VIE as its limited partners do not have substantive kick-out rights or participating rights. Through our wholly-owned subsidiary, Enbridge Energy Company, Inc. (EECI), we have the power to direct EEP’s activities and have a significant impact on EEP’s economic performance. Along with an economic interest held through an indirect common interest and general partner interest through EECI, and through our 100% ownership of EECI, we are the primary beneficiary of EEP. As at December 31, 2017 and 2016, our economic interest in EEP was 34.6% and 35.3% respectively. The public owns the remaining interests in EEP.

Enbridge Income Fund

The Fund is an unincorporated open-ended trust established by a trust indenture under the laws of the Province of Alberta and is considered a VIE by virtue of its capital structure. We are the primary beneficiary of the Fund through our combined 82.5% economic interest held indirectly through a common investment in ENF, a direct common interest in the Fund, a preferred unit investment in ECT, a direct common interest in Enbridge Income Partners GP Inc., and a direct common interest in EIPLP. As at December 31, 2016, our combined economic interest was 86.9%. As at December 31, 2017 and 2016, our direct common interest in the Fund was 29.4% and 43.2%, respectively. We also serve in the capacity of Manager of ENF and the Fund Group.

Enbridge Commercial Trust

We have the ability to appoint the majority of the trustees to ECT’s Board of Trustees, resulting in a lack of decision making ability for the holders of the common trust units of ECT. As a result, ECT is considered to be a VIE and although we do not have a common equity interest in ECT, we are considered to be the primary beneficiary of ECT. We also serve in the capacity of Manager of ECT, as part of the Fund Group.

Enbridge Income Partners LP

EIPLP, formed in 2002, is involved in the generation, transportation and storage of energy through interests in its Liquids Pipelines business, including the Canadian Mainline, the Regional Oil Sands System, a 50.0% interest in the Alliance Pipeline, which transports natural gas, and its renewable and alternative power generation facilities. EIPLP is a partnership between an indirect wholly-owned subsidiary of Enbridge and ECT. EIPLP is considered a VIE as its limited partners lack substantive kick-out rights and participating rights. Through a majority ownership of EIPLP’s General Partner, 100% ownership of Enbridge Management Services Inc. (a service provider for EIPLP), and 53.1% of direct common interest in EIPLP, we have the power to direct the activities that most significantly impact EIPLP’s economic performance and have the obligation to absorb losses and the right to receive residual returns that are potentially significant to EIPLP, making us the primary beneficiary of EIPLP. As at December 31, 2017 and 2016, our economic interest in EIPLP was 73.5% and 79.1%, respectively.

Green Power and Transmission

Through various subsidiaries, we have a majority ownership interest in Magic Valley, Wildcat, Keechi Wind Project (Keechi), and New Creek wind farms. These wind farms are considered VIEs as they do not have sufficient equity at risk and are partially financed by tax equity investors. We are the primary beneficiary of these VIEs by virtue of our voting rights, our power to direct the activities that most significantly impact the economic performance of the wind farms, and our obligation to absorb losses.

Enbridge Holdings (DakTex) L.L.C.

Enbridge Holdings (DakTex) L.L.C. (DakTex) is owned 75% by a wholly-owned subsidiary of Enbridge and 25% by EEP, through which we have an effective 27.6% interest in the equity investment, Bakken Pipeline System (Note 12). EEP is the primary beneficiary because it has the power to direct DakTex’s activities that most significantly impact its economic performance. We consolidate EEP and by extension also consolidate DakTex.

Spectra Energy Partners, LP

We acquired a 75% ownership in SEP through the Merger Transaction. SEP is a natural gas and crude oil infrastructure master limited partnership and is considered a VIE as its limited partners do not have substantive kick-out rights or participating rights. We are the primary beneficiary of SEP because we have the power to direct SEP’s activities that most significantly impact its economic performance.

Valley Crossing Pipeline, LLC

Valley Crossing Pipeline, LLC (Valley Crossing), a wholly-owned subsidiary of Enbridge, is constructing a natural gas pipeline to transport natural gas within Texas. Valley Crossing is considered a VIE due to insufficient equity at risk to finance its activities. We are the primary beneficiary of Valley Crossing because we have the power to direct Valley Crossing’s activities that most significantly impact its economic performance.

Other Limited Partnerships

By virtue of a lack of substantive kick-out rights and participating rights, substantially all limited partnerships wholly-owned by us and/or our subsidiaries are considered VIEs. As these entities are 100% owned and directed by us with no third parties having the ability to direct any of the significant activities, we are considered the primary beneficiary.

The following table includes assets to be used to settle liabilities of our consolidated VIEs and liabilities of our consolidated VIEs for which creditors do not have recourse to our general credit as the primary beneficiary. These assets and liabilities are included in the Consolidated Statements of Financial Position.



December 31,	2017	2016
(millions of Canadian dollars)
Assets
Cash and cash equivalents	368	314
Accounts receivable and other	2,132	781
Accounts receivable from affiliates	3	3
Inventory	220	53
	2,723	1,151
Property, plant and equipment, net	68,685	45,720
Long-term investments	6,258	954
Restricted long-term investments	206	83
Deferred amounts and other assets	2,921	2,227
Intangible assets, net	296	488
Goodwill	29	29
Deferred income taxes	145	231
	81,263	50,883
Liabilities
Short-term borrowings	485	—
Accounts payable and other	2,859	1,446
Accounts payable to affiliates	131	105
Interest payable	312	204
Environmental liabilities	35	140
Current portion of long-term debt	2,129	342
	5,951	2,237
Long-term debt	31,469	20,176
Other long-term liabilities	4,301	1,207
Deferred income taxes	3,010	1,753
	44,731	25,373
Net assets before noncontrolling interests	36,532	25,510

We do not have an obligation to provide financial support to any of the consolidated VIEs, with the exception of EIPLP. We are required, when called on by ENF, to backstop equity funding required by EIPLP to undertake the growth program embedded in the assets it acquired in the Canadian Restructuring Plan.

UNCONSOLIDATED VARIABLE INTEREST ENTITIES

Sabal Trail Transmission, LLC

SEP owns a 50% interest in Sabal Trail, a joint venture that operates a pipeline originating in Alabama that transports natural gas to Florida. On July 3, 2017, we discontinued the consolidation of Sabal Trail and accounted for our interest under the equity method. Sabal Trail is a VIE due to insufficient equity at risk to finance its activities. We are not the primary beneficiary because the power to direct Sabal Trail's activities that most significantly impact its economic performance is shared.

Nexus Gas Transmission, LLC

SEP owns a 50% equity investment in Nexus, a joint venture that is constructing a natural gas pipeline from Ohio to Michigan and continuing on to Ontario, Canada. Nexus is a VIE due to insufficient equity at risk to finance its activities. We are not the primary beneficiary because the power to direct Nexus’ activities that most significantly impact its economic performance is shared.

PennEast Pipeline Company, LLC

SEP owned a 10% equity investment in PennEast, which was increased to 20% in June 2017. PennEast is constructing a natural gas pipeline from northeastern Pennsylvania to New Jersey. PennEast is a VIE due to insufficient equity at risk to finance its activities. We are not the primary beneficiary since we do not have the power to direct PennEast’s activities that most significantly impact its economic performance.

We currently hold several equity investments in limited partnerships that are assessed to be VIEs due to limited partners not having substantive kick-out rights or participating rights. We have determined that we do not have the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance. Specifically, the power to direct the activities of a majority of these VIEs is shared amongst the partners. Each partner has representatives that make up an executive committee who makes significant decisions for the VIE and none of the partners may make major decisions unilaterally.

The carrying amount of our interest in VIEs that are unconsolidated and our estimated maximum exposure to loss as at December 31, 2017 and 2016 is presented below.



	Carrying Amount of Investment	Enbridge’s Maximum Exposure to
December 31, 2017	in VIE	Loss
(millions of Canadian dollars)
Aux Sable Liquid Products L.P.¹	300	361
Eolien Maritime France SAS²	69	754
Hohe See Offshore Wind Project³	763	2,484
Illinois Extension Pipeline Company, L.L.C.⁴	686	686
Nexus Gas Transmission, LLC⁵	834	1,678
PennEast Pipeline Company, LLC⁵	69	345
Rampion Offshore Wind Limited⁶	555	679
Sabal Trail Transmissions, LLC⁵	2,355	2,529
Vector Pipeline L.P.⁷	169	278
Other⁴	21	21
	5,821	9,815



	Carrying Amount of Investment	Enbridge’s Maximum Exposure to
December 31, 2016	in VIE	Loss
(millions of Canadian dollars)
Aux Sable Liquid Products L.P.	158	223
Eddystone Rail Company, LLC⁸	19	25
Eolien Maritime France SAS	58	686
Illinois Extension Pipeline Company, L.L.C.	759	759
Rampion Offshore Wind Limited	345	457
Vector Pipeline L.P.	159	289
Other	17	17
	1,515	2,456


1	At December 31, 2017, the maximum exposure to loss includes a guarantee by us for our respective share of the VIE’s borrowing on a bank credit facility.


2	At December 31, 2017, the maximum exposure to loss includes the portion of our parental guarantee that has been committed in project construction contracts in which we would be liable for in the event of default by the VIE and an outstanding affiliate loan receivable for $163 million held by us.


3	At December 31, 2017, the maximum exposure to loss includes the portion of our parental guarantee that has been committed in project construction contracts in which we would be liable for in the event of default by the VIE.


4	At December 31, 2017, the maximum exposure to loss is limited to our equity investment as these companies are in operation and self-sustaining.


5	At December 31, 2017 the maximum exposure to loss is limited to our equity investment and the remaining expected contributions for each joint venture.


6	At December 31, 2017, the maximum exposure to loss includes the portion of our parental guarantee that has been committed in project construction contracts in which we would be liable for in the event of default by the VIE.


7	At December 31, 2017 the maximum exposure to loss includes the carrying value of an outstanding loan issued by us.


8	As at December 31, 2017, Eddystone Rail Company, LLC is a 100% owned subsidiary and therefore is no longer an unconsolidated VIE.

We do not have an obligation to and did not provide any additional financial support to the VIEs during the years ended December 31, 2017 and 2016.