PROPERTY, PLANT AND EQUIPMENT

12 Months Ended

Dec. 31, 2012

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT

9. PROPERTY, PLANT AND EQUIPMENT

	Weighted Average
December 31,	Depreciation Rate	2012		2011
(millions of Canadian dollars)
Liquids Pipelines
Pipeline	2.6%	8,249		7,538
Pumping equipment, buildings, tanks and other1	3.1%	5,094		5,017
Land and right-of-way	2.4%	225		232
Under construction	-	1,675		1,111
		15,243		13,898
Accumulated depreciation		(3,432	)	(3,170	)
		11,811		10,728
Gas Distribution
Gas mains, services and other	4.3%	7,583		6,846
Land and right-of-way	2.5%	79		79
Under construction	-	102		137
		7,764		7,062
Accumulated depreciation		(1,912	)	(1,419	)
		5,852		5,643
Gas Pipelines, Processing and Energy Services
Pipeline	4.6%	544		568
Wind turbines, solar panels and other1	4.9%	519		781
Land and right-of-way	4.9%	6		7
Under construction	-	1,477		512
		2,546		1,868
Accumulated depreciation		(350	)	(213	)
		2,196		1,655
Sponsored Investments
Pipeline	3.0%	6,890		6,600
Pumping equipment, buildings, tanks and other1	3.3%	4,787		3,792
Wind turbines, solar panels and other1	4.0%	1,544		1,074
Land and right-of-way	2.4%	642		611
Under construction	-	2,002		913
		15,865		12,990
Accumulated depreciation		(2,770	)	(2,213	)
		13,095		10,777
Corporate
Other	9.4%	105		71
Under construction	-	296		230
		401		301
Accumulated depreciation		(37	)	(30	)
		364		271
		33,318		29,074

1 In December 2012, wholly-owned subsidiaries of Enbridge sold two crude oil storage and three renewable energy assets to the Fund. As a result, at December 31, 2012, $599 million and $338 million of Property, plant and equipment were reclassified from Liquids Pipelines and Gas Pipelines, Processing and Energy Services, respectively, to Sponsored Investments. The December 31, 2011 balances of $600 million and $354 million, in Liquids Pipelines and Gas Pipelines, Processing and Energy Services, respectively, have not been reclassified for presentation purposes.

Depreciation expense for the year ended December 31, 2012 was $1,174 million (2011 - $1,089 million; 2010 - $987 million).

GAS PIPELINES, PROCESSING AND ENERGY SERVICES

In December 2012, the Company recorded an impairment charge of $166 million ($105 million after-tax) related to certain of its Enbridge Offshore Pipelines (Offshore) assets, predominantly located within the Stingray and Garden Banks corridors in the Gulf of Mexico. The Company had been pursuing alternative uses for these assets; however, due to changing competitive conditions in the fourth quarter of 2012, the Company concluded that such alternatives were no longer likely to proceed. In addition, unique to these assets is their significant reliance on natural gas production from shallow water areas of the Gulf of Mexico which have been challenged by macro-economic factors including prevalence of onshore shale gas production, hurricane disruptions, additional regulation and the low natural gas commodity price environment.

The impairment charge was based on the amount by which the carrying values of the assets exceeded fair value, determined using expected discounted future cash flows, and is presented within Operating and administrative expense on the Consolidated Statements of Earnings. The charge is inclusive of $50 million related to abandonment costs now reasonably determined given the expected timing and scope of certain asset retirements.