Cómo valoras la actitud del burro con respecto a la situación que tenía Shrek?

The Fund’s financial assets and liabilities measured at fair value on a recurring basis include derivative instruments. The fair value of derivative instruments reflects the Fund’s best estimates of market value based on generally accepted valuation techniques or models and supported by observable market prices and rates. When such values are not available, the Fund uses discounted cash flow analysis from applicable yield curves based on observable market inputs to estimate fair value.

At September 30, 2012, the Fund’s long-term debt had a fair value of $1,255.6 million (December 31, 2011 - $693.5 million). This fair value measurement has been classified as a level 2 fair value

measurement.

Fair Value of Financial Instruments

The Fund categorizes its financial assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement.

Level 1

Level 1 includes financial instruments measured at fair value based on unadjusted quoted prices for identical assets and liabilities in active markets that are accessible at the measurement date. An active market for a financial instrument is considered to be a market where transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. The Fund did not have any financial instruments categorized as Level 1 as at September 30, 2012 or December 31, 2011.

Level 2

Level 2 includes financial instrument valuations determined using directly or indirectly observable inputs other than quoted prices included within Level 1. Financial instruments in this category are valued using models or other industry standard valuation techniques derived from observable market data. Such valuation techniques include inputs such as quoted forward prices, time value, volatility factors and broker quotes that can be observed or corroborated in the market for the entire duration of the financial

instrument. Financial instruments valued using Level 2 inputs include non-exchange traded derivatives such as over-the-counter interest rate swaps for which observable inputs can be obtained.

THIRD QUARTER REPORT | 46 Level 3

Level 3 includes financial instrument valuations based on inputs which are less observable, unavailable or where the observable data does not support a significant portion of the financial instruments’ fair value. Generally, Level 3 financial instruments are longer dated transactions, occur in less active markets, occur at locations where pricing information is not available or have no binding broker quote to support Level 2 classification. The Fund has developed methodologies, benchmarked against industry standards, to determine fair value for these financial instruments based on extrapolation of observable future prices and rates. Financial instruments valued using Level 3 inputs include long-dated derivative commodity

contracts.

The Fund uses the most observable inputs available to estimate the fair value of its financial instruments. When possible, the Fund estimates the fair value of its financial instruments based on quoted market prices. If quoted market prices are not available, the Fund uses estimates from third party brokers. For non-exchange traded derivatives classified in Levels 2 and 3, the Fund uses standard valuation techniques to calculate the estimated fair value. These methods include discounted cash flows for forwards and swaps. Depending on the type of financial instrument and nature of the underlying risk, the Fund uses observable market prices (interest, foreign exchange and commodity) and volatility as primary inputs to these valuation techniques. Finally, the Fund considers its own credit default swap spread as well as the credit default swap spreads associated with its counterparties in its estimation of fair value. The Fund has categorized its derivative assets and liabilities measured at fair value as follows:

September 30, 2012 Level 1 Level 2 Level 3 Total

(millions of Canadian dollars)

Financial assets

Current derivative assets - 0.2 - 0.2

Long-term derivative assets - 0.4 1.2 1.6

Financial liabilities

Current derivative liabilities - (1.9) (0.2) (2.1) Long-term derivative liabilities - (9.6) (0.5) (10.1)

Total net asset/(liability) - (10.9) 0.5 (10.4)

December 31, 2011 Level 1 Level 2 Level 3 Total

(millions of Canadian dollars)

Financial assets

Current derivative assets - 0.3 - 0.3

Long-term derivative assets - 1.2 - 1.2

Financial liabilities

Current derivative liabilities - (2.0) (1.0) (3.0) Long-term derivative liabilities - (9.1) (6.8) (15.9)

Total net asset/(liability) - (9.6) (7.8) (17.4)

The significant unobservable inputs used in the fair value measurement of Level 3 derivative instruments were as follows: Fair value at September 30, 2012 (millions of Canadian

dollars) Unobservable Input Minimum Price Maximum Price Average Price Weighted

Commodity Contracts – Financial1

Natural Gas (0.1) Forward Gas Price 3.08 3.08 3.08 $/mmbtu2

Power 0.6 Forward Power Price 49.75 64.14 55.72 $/MWH

1 Financial forward commodity contracts are valued using a market approach valuation technique. 2 One million British thermal units (mmbtu).

If adjusted, the significant unobservable inputs disclosed in the table above would have a direct impact on the fair value of the Fund’s Level 3 derivative instruments. The significant unobservable inputs used in the

THIRD QUARTER REPORT | 47

in forward commodity prices would result in significantly different fair values for long positions, with offsetting impacts to short positions.

Changes in net fair value of derivative assets and liabilities classified as Level 3 in the fair value hierarchy were as follows:

Three months ended

September 30, Nine months ended September 30,

2012 2011 2012 2011

(unaudited; millions of Canadian dollars)

Level 3 net derivative asset/(liability) at beginning of period (4.6) (5.1) (7.8) 1.2

Total gains/(losses), unrealized

Included in earnings1 _{(0.7) 0.4 (1.1) 1.2} Included in OCI 5.8 (2.6) 9.4 (9.8)

Settlements2 - 0.1 - 0.2

Transfers into Level 3 - - - -

Level 3 net derivative asset/(liability) at end of period 0.5 (7.2) 0.5 (7.2)

1 Gain/(loss) reported within Revenues in the Consolidated Statement of Earnings. Represents the total change in unrealized gain/(loss) relating to Level 3 derivative instruments still held at period end.

2 Represents the realized fair value of Level 3 derivative instruments settled during the period.

The Fund’s policy is to recognize transfers as of the last day of the reporting period. There were no transfers between levels as of September 30, 2012 or December 31, 2011.

11. RELATED PARTY TRANSACTIONS

In the second quarter of 2012, Enbridge Income Fund Holdings Inc. (the Company) and the Fund entered into a subordinated demand loan whereby the Company may make cash advances to the Fund. The Company made cash advances to the Fund of $5.6 million in the second quarter of 2012 and $1.3 million in the third quarter of 2012. Interest on the demand loan is charged to the Fund at 4.25% per annum.

12. COMMITMENTS

At September 30, 2012, the Fund has signed contracts for the purchase of services, pipe and other materials totaling $46.6 million which are expected to be paid within the next two years.

13. SUBSEQUENT EVENT

On October 25, 2012, the Fund entered into an agreement to acquire crude oil storage facilities and renewable power generation facilities owned by direct and indirect subsidiaries of Enbridge, a related party, for an aggregate value of $1.164 billion (the “Transaction”). The crude oil storage facilities consist of the Hardisty Contract Terminals and Hardisty Storage Caverns. The renewable power generation facilities consist of 100% interests in the 99-megawatt (MW) Greenwich Wind Project, 15-MW

Amherstburg Solar Project and 5-MW Tilbury Solar Project. The Transaction will be accounted for as a transaction among entities under common control, similar to a pooling of interests, whereby the assets and liabilities acquired will be recorded at Enbridge’s historic carrying values. A portion of the Transaction will be funded by the Company which will increase its equity investment in the Fund. The Company has entered into an agreement with a syndicate of investment dealers for the sale of an aggregate 9,597,000 subscription receipts of the Company at a price of $23.15 per subscription receipt for gross proceeds of $222.2 million which will be used to purchase common trust units of the Fund. Upon completion of the Transaction, each holder of a subscription receipt will automatically receive one common share of the Company without further consideration. The Transaction is subject to approval by shareholders, completion of the financing and receipt of regulatory and third party approvals.

Enbridge Income Fund Holdings Inc.’s common shares trade on the Toronto Stock Exchange under the symbol ENF.

Enbridge Income Fund Holdings Inc. 3000, 425 – 1st Street S.W.

Calgary, Alberta, Canada T2P 3L8 Telephone: 403.231.3900 Fax: 403.231.3920 Toll-free: 866.859.5957 enbridgeincomefund.com