RISK MANAGEMENT AND FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2013

RISK MANAGEMENT AND FINANCIAL INSTRUMENTS

Schedule of the statements of financial position location and carrying value of the Company's derivative instruments

December 31, 2013	Derivative Instruments Used as Cash Flow Hedges		Derivative Instruments Used as Net Investment Hedges		Non- Qualifying Derivative Instruments		Total Gross Derivative Instruments as Presented		Amounts Available for Offset		Total Net Derivative Instruments
(millions of Canadian dollars)
Accounts receivable and other (Note 8)
Foreign exchange contracts	16		11		51		78		(26	)	52
Interest rate contracts	171		-		12		183		(27	)	156
Commodity contracts	4		-		114		118		(64	)	54
Other contracts	2		-		4		6		-		6
	193		11		181		385		(117	)	268
Deferred amounts and other assets (Note 13)
Foreign exchange contracts	7		33		27		67		(62	)	5
Interest rate contracts	249		-		1		250		(47	)	203
Commodity contracts	9		-		86		95		(67	)	28
Other contracts	1		-		-		1		-		1
	266		33		114		413		(176	)	237
Accounts payable and other (Note 16)
Foreign exchange contracts	(2	)	(4	)	(69	)	(75	)	26		(49	)
Interest rate contracts	(387	)	-		(16	)	(403	)	45		(358	)
Commodity contracts	(14	)	-		(345	)	(359	)	64		(295	)
	(403	)	(4	)	(430	)	(837	)	135		(702	)
Other long-term liabilities (Note 18)
Foreign exchange contracts	(4	)	(31	)	(435	)	(470	)	62		(408	)
Interest rate contracts	(68	)	-		(1	)	(69	)	29		(40	)
Commodity contracts	(2	)	-		(854	)	(856	)	67		(789	)
	(74	)	(31	)	(1,290	)	(1,395	)	158		(1,237	)
Total net derivative asset/(liability)
Foreign exchange contracts	17		9		(426	)	(400	)	-		(400	)
Interest rate contracts	(35	)	-		(4	)	(39	)	-		(39	)
Commodity contracts	(3	)	-		(999	)	(1,002	)	-		(1,002	)
Other contracts	3		-		4		7		-		7
	(18	)	9		(1,425	)	(1,434	)	-		(1,434	)

December 31, 2012	Derivative Instruments Used as Cash Flow Hedges		Derivative Instruments Used as Net Investment Hedges		Non- Qualifying Derivative Instruments		Total Gross Derivative Instruments as Presented		Amounts Available for Offset		Total Net Derivative Instruments
(millions of Canadian dollars)
Accounts receivable and other (Note 8)
Foreign exchange contracts	4		16		210		230		(101	)	129
Interest rate contracts	7		-		9		16		(9	)	7
Commodity contracts	9		-		119		128		(28	)	100
Other contracts	3		-		6		9		-		9
	23		16		344		383		(138	)	245
Deferred amounts and other assets (Note 13)
Foreign exchange contracts	11		79		225		315		(40	)	275
Interest rate contracts	18		-		12		30		(25	)	5
Commodity contracts	1		-		59		60		(32	)	28
Other contracts	2		-		1		3		-		3
	32		79		297		408		(97	)	311
Accounts payable and other (Note 16)
Foreign exchange contracts	(5	)	-		(100	)	(105	)	101		(4	)
Interest rate contracts	(673	)	-		-		(673	)	9		(664	)
Commodity contracts	(3	)	-		(294	)	(297	)	28		(269	)
	(681	)	-		(394	)	(1,075	)	138		(937	)
Other long-term liabilities (Note 18)
Foreign exchange contracts	(41	)	(5	)	(23	)	(69	)	40		(29	)
Interest rate contracts	(290	)	-		(15	)	(305	)	25		(280	)
Commodity contracts	(2	)	-		(387	)	(389	)	32		(357	)
	(333	)	(5	)	(425	)	(763	)	97		(666	)
Total net derivative asset/(liability)
Foreign exchange contracts	(31	)	90		312		371		-		371
Interest rate contracts	(938	)	-		6		(932	)	-		(932	)
Commodity contracts	5		-		(503	)	(498	)	-		(498	)
Other contracts	5		-		7		12		-		12
	(959	)	90		(178	)	(1,047	)	-		(1,047	)

Schedule of the maturity and notional principal or quantity outstanding related to the Company's derivative instruments

December 31, 2013	2014		2015		2016		2017		2018		Thereafter
Foreign exchange contracts - United States dollar forwards - purchase (millions of United States dollars)	710		25		25		413		2		4
Foreign exchange contracts - United States dollar forwards - sell (millions of United States dollars)	2,795		2,751		2,323		2,557		1,649		3,771
Foreign exchange contracts - Euro forwards - purchase (millions of Euros)	5		28		-		-		-		-
Interest rate contracts - short-term borrowings (millions of Canadian dollars)	5,007		5,210		5,030		3,965		274		267
Interest rate contracts - long-term debt (millions of Canadian dollars)	5,736		1,779		1,814		1,090		-		-
Equity contracts (millions of Canadian dollars)	40		41		-		-		-		-
Commodity contracts - natural gas (billions of cubic feet)	17		(8	)	10		11		46		-
Commodity contracts - crude oil (millions of barrels)	(34	)	(29	)	(23	)	(18	)	(9	)	-
Commodity contracts - NGL (millions of barrels)	(10	)	(2	)	-		-		-		-
Commodity contracts - power (megawatt hours (MWH))	55		5		20		40		30		8

December 31, 2012	2013	2014	2015	2016	2017	Thereafter
Foreign exchange contracts - United States dollar forwards - purchase (millions of United States dollars)	558	468	25	25	413	6
Foreign exchange contracts - United States dollar forwards - sell (millions of United States dollars)	2,088	2,402	2,751	2,323	2,557	158
Foreign exchange contracts - Euro forwards - purchase (millions of Euros)	6	-	-	-	-	-
Interest rate contracts - short-term borrowings (millions of Canadian dollars)	3,644	3,591	3,455	3,157	2,841	171
Interest rate contracts - long-term debt (millions of Canadian dollars)	4,590	3,055	1,760	1,142	-	-
Equity contracts (millions of Canadian dollars)	39	36	-	-	-	-
Commodity contracts - natural gas (billions of cubic feet)	55	19	10	10	11	3
Commodity contracts - crude oil (millions of barrels)	37	38	29	23	18	9
Commodity contracts - NGL (millions of barrels)	1	2	-	-	-	-
Commodity contracts - power (MWH)	51	67	48	63	83	66

Schedule of effect of cash flow hedges and net investment hedges on the Company's consolidated earnings and consolidated comprehensive income, before the effect of income taxes

Year ended December 31,	2013		2012		2011
(millions of Canadian dollars)
Amount of unrealized gains/(loss) recognized in OCI
Cash flow hedges
Foreign exchange contracts	56		(12	)	(22	)
Interest rate contracts	814		(46	)	(724	)
Commodity contracts	(9	)	52		72
Other contracts	(2	)	(3	)	6
Net investment hedges
Foreign exchange contracts	(81	)	1		(26	)
	778		(8	)	(694	)
Amount of gains/(loss) reclassified from AOCI to earnings (effective portion)
Foreign exchange contracts1	(8	)	1		1
Interest rate contracts2	107		(1	)	(10	)
Commodity contracts3	1		(3	)	(55	)
Other contracts4	-		2		(2	)
	100		(1	)	(66	)
Amount of gains/(loss) reclassified from AOCI to earnings (ineffective portion and amount excluded from effectiveness testing)
Interest rate contracts2	51		23		11
Commodity contracts3	(3	)	(3	)	5
	48		20		16

1 Reported within Other income/(expense) in the Consolidated Statements of Earnings.

2 Reported within Interest expense in the Consolidated Statements of Earnings.

3 Reported within Commodity costs in the Consolidated Statements of Earnings.

4 Reported within Operating and administrative expense in the Consolidated Statements of Earnings.

Schedule of unrealized gains and losses associated with changes in the fair value of the Company's non-qualifying derivatives

Year ended December 31,	2013		2012		2011
(millions of Canadian dollars)
Foreign exchange contracts1	(738	)	120		(179	)
Interest rate contracts2	(10	)	(2	)	9
Commodity contracts3	(496	)	(765	)	280
Other contracts4	(3	)	(2	)	4
Total unrealized derivative fair value gains/(loss)	(1,247	)	(649	)	114

1 Reported within Transportation and other services revenues (2013 - $352 million loss; 2012 - $150 million gain; 2011 - $77 million loss) and Other income/(expense) (2013 - $386 million loss; 2012 - $30 million loss; 2011 - $102 million loss) in the Consolidated Statements of Earnings.

2 Reported within Interest expense in the Consolidated Statements of Earnings.

3 Reported within Transportation and other services revenues (2013 - $375 million loss; 2012 - $681 million loss; 2011 - $216 million gain), Commodity costs (2013 - $35 million loss; 2012 - $21 million loss; 2011 - $61 million gain) and Operating and administrative expense (2013 - $86 million loss; 2012 - $63 million loss; 2011 - $3 million gain) in the Consolidated Statements of Earnings.

4 Reported within Operating and administrative expense in the Consolidated Statements of Earnings.

Schedule of group credit concentrations and maximum credit exposure, with respect to derivative instruments

December 31,	2013	2012
(millions of Canadian dollars)
Canadian financial institutions	230	306
United States financial institutions	227	129
European financial institutions	192	244
Other1	97	128
	746	807

1 Other is comprised of commodity clearing house and physical natural gas and crude oil counterparties.

Schedule of derivative assets and liabilities measured at fair value

December 31, 2013	Level 1		Level 2		Level 3		Total Gross Derivative Instruments
(millions of Canadian dollars)
Financial assets
Current derivative assets
Foreign exchange contracts	-		78		-		78
Interest rate contracts	-		183		-		183
Commodity contracts	6		42		70		118
Other contracts	-		6		-		6
	6		309		70		385
Long-term derivative assets
Foreign exchange contracts	-		67		-		67
Interest rate contracts	-		250		-		250
Commodity contracts	-		72		23		95
Other contracts	-		1		-		1
	-		390		23		413
Financial liabilities
Current derivative liabilities
Foreign exchange contracts	-		(75	)	-		(75	)
Interest rate contracts	-		(403	)	-		(403	)
Commodity contracts	(9	)	(248	)	(102	)	(359	)
	(9	)	(726	)	(102	)	(837	)
Long-term derivative liabilities
Foreign exchange contracts	-		(470	)	-		(470	)
Interest rate contracts	-		(69	)	-		(69	)
Commodity contracts	-		(701	)	(155	)	(856	)
	-		(1,240	)	(155	)	(1,395	)
Total net financial asset/(liability)
Foreign exchange contracts	-		(400	)	-		(400	)
Interest rate contracts	-		(39	)	-		(39	)
Commodity contracts	(3	)	(835	)	(164	)	(1,002	)
Other contracts	-		7		-		7
	(3	)	(1,267	)	(164	)	(1,434	)

December 31, 2012	Level 1		Level 2		Level 3		Total Gross Derivative Instruments
(millions of Canadian dollars)
Financial assets
Current derivative assets
Foreign exchange contracts	-		230		-		230
Interest rate contracts	-		16		-		16
Commodity contracts	3		7		118		128
Other contracts	-		9		-		9
	3		262		118		383
Long-term derivative assets
Foreign exchange contracts	-		315		-		315
Interest rate contracts	-		30		-		30
Commodity contracts	-		51		9		60
Other contracts	-		3		-		3
	-		399		9		408
Financial liabilities
Current derivative liabilities
Foreign exchange contracts	-		(105	)	-		(105	)
Interest rate contracts	-		(673	)	-		(673	)
Commodity contracts	(9	)	(212	)	(76	)	(297	)
	(9	)	(990	)	(76	)	(1,075	)
Long-term derivative liabilities
Foreign exchange contracts	-		(69	)	-		(69	)
Interest rate contracts	-		(305	)	-		(305	)
Commodity contracts	-		(314	)	(75	)	(389	)
	-		(688	)	(75	)	(763	)
Total net financial asset/(liability)
Foreign exchange contracts	-		371		-		371
Interest rate contracts	-		(932	)	-		(932	)
Commodity contracts	(6	)	(468	)	(24	)	(498	)
Other contracts	-		12		-		12
	(6	)	(1,017	)	(24	)	(1,047	)

Schedule of significant unobservable inputs used in the fair value measurement of Level 3 derivative instruments

December 31, 2013	Fair Value		Unobservable Input	Minimum Price	Maximum Price	Weighted Average Price
(fair value in millions of Canadian dollars)
Commodity contracts - financial1
Natural gas	4		Forward gas price	3.64	5.18	4.37	$/mmbtu	3
Crude	1		Forward crude price	67.52	103.86	72.84	$/barrel
NGL	(8	)	Forward NGL price	1.00	2.26	1.53	$/gallon
Power	(141	)	Forward power price	43.50	67.67	57.62	$/MWH
Commodity contracts - physical1
Natural gas	(22	)	Forward gas price	3.36	5.29	4.18	$/mmbtu	3
Crude	(10	)	Forward crude price	64.73	113.19	92.15	$/barrel
NGL	4		Forward NGL price	0.02	2.68	1.59	$/gallon
Power	(1	)	Forward power price	32.40	38.98	35.07	$/MWH
Commodity options2
Natural gas	2		Option volatility	25%	31%	28%
NGL	7		Option volatility	22%	44%	31%
	(164	)

1 Financial and physical forward commodity contracts are valued using a market approach valuation technique.

2 Commodity options contracts are valued using an option model valuation technique.

3 One million British thermal units (mmbtu).

Schedule of changes in net fair value of derivative assets and liabilities classified as Level 3 in the fair value hierarchy

Year ended December 31,	2013		2012
(millions of Canadian dollars)
Level 3 net derivative asset/(liability) at beginning of period	(24	)	32
Total gains/(loss)
Included in earnings1	(100	)	(69	)
Included in OCI	-		13
Settlements	(40	)	-
Level 3 net derivative liability at end of period	(164	)	(24	)

1 Reported within Transportation and other services revenues, Commodity costs and Operating and administrative expense in the Consolidated Statements of Earnings.

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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- Definition

Tabular disclosure of all significant concentrations of risk, including credit risk and market risk, arising from all financial instruments (as defined), whether from an individual counterparty or groups of counterparties. The disclosure concerning concentrations of risk may consist of the following information: (1) for concentrations of credit risk disclosure may include: (a) information about the (shared) activity, region, or economic characteristic that identifies the concentration, (b) the maximum amount of loss due to credit risk that, based on the gross fair value of the financial instrument, the entity would incur if parties to the financial instruments that make up the concentration failed completely to perform according to the terms of the contracts and the collateral or other security, if any, for the amount due proved to be of no value to the entity, (c) the policy of requiring collateral or other security to support financial instruments subject to credit risk, information about the entity's access to that collateral or other security, and the nature and a brief description of the collateral or other security supporting those financial instruments, and (d) the policy of entering into master netting arrangements to mitigate the credit risk of financial instruments, information about the arrangements for which the entity is a party, and a brief description of the terms of those arrangements, including the extent to which they would reduce the entity's maximum amount of loss due to credit risk and (2) for disclosure of quantitative information about the market risks of financial instruments that is consistent with the way the company manages or adjusts those risks, disclosure may include: (a) more details about current positions and perhaps activity during the period, (b) the hypothetical effects on comprehensive income (or net assets), or annual income, of several possible changes in market prices, (c) a gap analysis of interest rate re-pricing or maturity dates, (d) the duration of the financial instruments, (e) the entity's value at risk from derivatives and from other positions at the end of the reporting period and the average value at risk during the year, or (f) other ways of reporting quantitative information as internally developed.

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