Investor Q & A

Why was Enbridge Income Fund restructured?

On October 31, 2006 the Department of Finance (Canada) announced Canadian federal income tax legislation relating to specified investment flow through trusts ("SIFTs"). As a result, a trust that was a SIFT was no longer entitled to deduct distributions to unitholders. Consequently, the SIFT would pay tax on such non-deductible distributions at the rate equivalent to the combined federal-provincial corporate income tax rate. Enbridge Income Fund (ENF) was a SIFT trust, and was affected by this legislation.

How did this restructuring affect Enbridge Income Fund unitholders?

The Units held by Unitholders were exchanged for shares of Enbridge Income Fund Holdings Inc. (EIFH) on a one to one basis effective December 17, 2010. Unitholders became shareholders in EIFH. Unitholders had a choice either to effect the exchange on a tax-deferred basis if they had embedded gains on their units, or to realize any embedded gain or loss. The deadline was February 28, 2011 and was later extended to May 31, 2011. If the deadline was missed and untiholders require assistance please call (866) 859-5957.

Dividends paid by EIFH will eligible dividends which qualify for the enhanced federal dividend tax credit to shareholders.

amount approximately 2010 distribution of ENF.

What are the tax implications for Enbridge Income Fund unitholders of the restructuring?

Detailed Unitholder tax information can be found in the Tax Restructruing Q & A on the Enbridge Income Fund Investor Relations web site.

What are the tax implications for Enbridge Income Fund and Enbridge Income Fund Holdings Inc. of the restructuring?

ENF ceased to be a SIFT and will not be subject to the SIFT tax as it will continue to distribute all its taxable income to ensure there is no tax at the ENF level. EIFH will be subject to corporate income tax on its taxable income, including income received from ENF.

(Reference: Post Arrangement Structure Diagram below)

When was the Enbridge Income Fund restructuring completed?

The Administrator effected the restructuring of ENF on December 17, 2010. At that time all publicly held units, as well as a portion of Enbridge's interest in ENF, were exchanged on a one-for-one basis for shares of a taxable Canadian corporation, Enbridge Income Fund Holdings Inc. (EIFH). The Fair Market Value determined for December 17, 2010 was $17.66.

What is the investor value proposition for Enbridge Income Fund Holdings Inc.?

EIFH will expect to maintain an investor value proposition similar to ENF's proposition of providing the bulk of the return to its investors in the form of a high cash payout which is safe and dependable. EIFH will also benefit from a modest amount of growth potential supported by further development of ENF's asset base, and potentially by further ENF acquisitions of third party or Enbridge Inc. assets with comparable risk profile as the existing asset base.

When will I receive my first dividend from Enbridge Income Fund Holdings Inc.?

The amount of the annual dividend of the new corporation is approximately the same as the 2010 distribution of ENF and was changed to a quarterly rather than monthly payout. The first (and only) quarterly dividend was paid on April 15, 2011 for shareholders of record March 31, 2011. Thereafter, it was announced on May 9, 2011, that EIFH amended its dividend payment frequency from quarterly back to monthly commencing with the July 2011 monthly dividend, which is payable on August 15, 2011.

What are the benefits of the planned restructuring?

It is anticipated that the reorganized structure of ENF will improve financial flexibility and access to debt and equity markets as well as attract more active and long-term markets for EIFH shares.

Is the Management team of Enbridge Income Fund Holdings Inc. different from Enbridge Income Fund?

No, all previously announced members of the Management team of ENF will continue their same roles and responsibilities under EIFH.

Can I participate in the DRIP program?

Yes, pursuant to the ENF's Distribution Reinvestment Plan (DRIP), participants may elect, without brokerage fees, to automatically reinvest their monthly distributions in additional units of EIFH. Details are available on ENF's website. Investors should contact their respective investment dealer to enroll.

Will the TSX ticker symbol for Enbridge Income Fund Holdings Inc be different from Enbridge Income Fund - ENF.UN?

Yes, on December 17, 2010 Enbridge Income Fund Holdings was listed as ENF.TO on the Toronto Stock Exchange.

What does the new organization structure look like?

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