Letter to Shareholders

With the restructuring behind us, we will be focused on building upon the Fund’s strong asset base and continuing to deliver reliable returns for our investors.

Enbridge Income Fund (the Fund) successfully transitioned in 2010 to a new corporate structure that is delivering to investors the same attractive value proposition they have come to expect—safe and dependable high cash payouts supported by high-quality, long-life energy infrastructure assets that are well positioned for growth.

On December 17, 2010, under a restructuring plan approved by the Fund’s unitholders earlier in the year, all publicly held trust units of the Fund, as well as a portion of the units held by Enbridge Inc., were exchanged on a one-for-one basis for shares of Enbridge Income Fund Holdings Inc. (the Company). The Company’s common shares were listed on the TSX on December 21, 2010, under the symbol ENF.

Going forward, all public investors will participate in the cash flow of the Fund through their investment in the Company. The scope of activities of the Company will be limited to investing in the Fund and the financial performance of the Company will directly reflect the cash generated from its investment, supported by the great group of operating assets within the Fund.

The Fund delivered another solid performance in 2010, paying out a high proportion of its cash available for distribution to unitholders on the strength of its diversified and growing portfolio of strategically located assets. Earnings for the full year were $12.6 million and cash available for distribution totaled $100.2 million, an increase of 11.2% over 2009. Total distributions to unitholders were $83.7 million, representing cash distributions declared of $1.152 per unit. Unitholder return for the year ended December 31, 2010 was 44.8%.

The Company intends to pay dividends on a quarterly basis. On March 15, 2011 our Board declared an initial quarterly dividend of $0.288 per common share which is equivalent on an annualized basis to the distribution paid by the Fund in 2010. This dividend will be payable on April 15, 2011 to shareholders of record on March 31, 2011. Dividends payable by the Company will be designated as eligible dividends which qualify for the enhanced dividend tax credit available to Canadian residents.

Financial Highlights—Enbridge Income Fund

Outlook

We wish to thank the Fund’s management and staff as well as our independent directors who worked very hard to ensure the success of the restructuring.

The new structure should provide the necessary financial flexibility and access to capital to enable the Fund to execute its business plan and continue to grow in the future, whether organically or by acquisition. With the restructuring behind us and the sponsorship of Enbridge Inc., one of North America’s most successful energy delivery companies, we will be focused on building upon the Fund’s already strong asset base and looking forward to delivering reliable, predictable and growing returns for our investors, just as we always have done.

Gordon G. Tallman Chair, Board of Directors	John Whelen President

 

March 16, 2011