ENB – SEP Transaction FAQ

Based on discussions with unitholders and other members of the investment community, the following represent their most frequently asked questions, together with responses by Enbridge. Please refer to the Legal Notice below.

Legal Notice
All information in this communication is made as of [December 31, 2018]. Readers are advised to contact their account administrator or broker, tax advisor and other agents, consultants or advisors for specific questions or advice applicable to their circumstances.

This communication is not all-inclusive and does not purport to contain all of the information that the reader may desire or require with respect to the transaction. None of Enbridge or its affiliates, or any of their respective directors, officers, employees, agents, shareholders or advisors (collectively, the “Representatives”) makes or will make any representation or warranty, express or implied, or shall have any responsibility or liability whatsoever as to, or in relation to, the accuracy, thoroughness or completeness of, or omissions from, any information contained in this communication or in respect of any opinions or other statements expressed herein or omitted herefrom. Each of Enbridge, its affiliates and their respective Representatives expressly disclaims any liability resulting from the use of the information contained herein or otherwise supplied or resulting from the failure to supply additional information. None of Enbridge or its affiliates, or any of their respective Representatives, undertakes to update or otherwise revise or correct any inaccuracies which become apparent in this communication or other information supplied. In furnishing this communication, Enbridge reserves the right to amend or replace this communication at any time and undertakes no obligation to provide the reader with access to any additional information. Readers are solely responsible for satisfying themselves as to the accuracy and completeness of all information contained herein or otherwise supplied.

About Enbridge Acquisition

Q: Where can I find additional information about the transaction?
Q: When did the transaction close?

The transaction closed December 17, 2018.

Q: What was the closing price of Spectra Energy Partners (SEP) and Enbridge Inc. (ENB-NYSE) shares on the closing date?

SEP’s last day of trading was December 14, 2018 and closed at US$35.40 on the New York Stock Exchange; ENB shares closed at US$31.95.

Q: Will Enbridge personnel be able to help with my tax-related questions?

If you have tax related questions, please contact a tax advisor familiar with partnership taxation and specifically, the taxation of Master Limited Partnership unitholders. Enbridge’s investor relations department is not staffed by tax personnel and Enbridge personnel do not provide tax advice.

Q: What were the expected U.S. federal income tax consequences to the SEP unitholders resulting from the transaction and how would the transaction affect their taxes?

The exchange of SEP units for ENB common stock should be treated as a taxable transaction for US federal income tax purposes. The tax consequences of the transaction to each SEP unitholder will be unique and depend on the SEP unitholder’s particular facts and circumstances. You should consult your own tax advisor to determine the specific consequence of the transaction to you, including under the law of any applicable state, local or foreign jurisdiction, and under any applicable US federal laws other than those pertaining to income taxes.

A US holder of SEP units should recognize a taxable gain or loss resulting from the transaction in the same manner as if the unitholder were to sell its units for cash equal to the fair market value of the ENB shares and any cash in lieu of fractional shares that the unitholder receives in exchange for its units. To the extent a unitholder’s prior allocations of depreciation deductions exceed the economic depreciation of the underlying assets, prior depreciation deductions will be recaptured as ordinary income upon the sale. Passive losses that were suspended and not deductible by a unitholder in prior taxable periods may be available to offset all or a portion of any gain (including recapture) recognized by such unitholder.

Q: What were the expected state income tax consequences to the SEP unitholders resulting from the transaction and how will the transaction affect their state taxes?

The taxable transaction will have state income tax consequences. Your most recent Schedule K-1 will report state apportionment factors to help estimate your state income tax impact. You should consult your own tax advisor to determine the specific consequences to you of the transaction.

Q: What tax documents should I have received after the close of the transactions? When should I have received a K-1?

SEP unitholders received a final Schedule K-1 and supporting materials (delivered March 2019). SEP unitholders should have received a final Schedule K-1, an Ownership Schedule, a Sales Worksheet, and a State Tax Schedule as part of that package.

Q: What consideration did I receive for my SEP units?

In general, holders of SEP units received 1.111 shares of ENB common stock for each SEP unit.

No fractional ENB shares were issued in the transaction. SEP unitholders were paid cash in lieu of fractional units.

Q: Can I access the Registration Statement, Proxy Statement/ Prospectus and other documents filed with the SEC by Enbridge online?

Enbridge filed with the SEC a registration statement on Form S-4, which includes a proxy statement for SEP and any other documents in connection with the transaction. Those materials, are available online at www.sec.gov.

Q: Will I receive Enbridge dividends after the transaction?

Declaration of dividends is subject to the discretion of the Enbridge Board of Directors.

Q: What type of dividend does ENB pay?

ENB is classified as a corporation for U.S. federal income tax purposes. A distribution of cash by ENB to a U.S. stockholder will generally be included in such U.S. stockholder’s income as ordinary dividend income to the extent of ENB’s current and accumulated ‘‘earnings and profits’’ as determined under U.S. federal income tax principles. Accordingly, you should expect to generally treat distributions made by Enbridge as ordinary dividend income. The amount of the dividend distribution that each ENB stockholder must include in their income as a U.S. stockholder will be the U.S. dollar value of the Canadian dollar payments made, determined at the spot Canadian dollar/U.S. dollar rate on the date the dividend distribution is includible in such stockholder’s income, regardless of whether the payment is in fact converted into U.S. dollars. Please contact a tax advisor regarding specific tax related questions.

Enbridge should not be considered a passive foreign investment company (PFIC) for the purposes of the U.S. Internal Revenue Code.

ENB is considered to be “a qualified foreign corporation” and the dividends paid on its common shares are considered to be “qualified dividends” as those terms are defined in the U.S. Internal Revenue Code. If you have any questions regarding the taxation of Canadian dividends in your local jurisdiction, please contact your local tax advisor.

Q: How will any Enbridge dividends be reported?

Canadian Enbridge shareholders who received dividends outside of an RRSP, RRIF or DPSP should receive a T5 Supplementary slip from their brokerage firm or intermediary.

Enbridge stockholders will receive an annual IRS Form 1099-DIV reflecting their dividend income.

Non-Resident holders (any holder residing outside of Canada) will also receive an NR4 tax form which shows the non-resident tax that was deducted where applicable.

Q: Is Enbridge’s dividend subject to withholding taxes?

Yes. Withholding taxes apply to dividends paid to U.S. shareholders but may be limited to 15% under the applicable U.S. – Canadian tax treaty. Subject to certain limitations, Canadian tax withheld may be deductible or creditable against your U.S. federal income tax liability. The rules governing the foreign tax credit are complex and involve the application of rules that depend upon a U.S. holder’s particular circumstances. Accordingly, U.S. holders should consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.

Please contact your account administrator or broker for additional information and forms related to filing for exemption from Canadian withholding taxes for U.S. residents.

Q: As an SEP unitholder I received distributions in U.S. dollars – are my Enbridge dividends paid in U.S. dollars?

Enbridge declares its dividend in Canadian dollars. Enbridge common shares trading on the New York Stock Exchange (NYSE) and the Toronto Stock Exchange (TSX) will pay dividends in Canadian dollars. However, Enbridge delivers payment to U.S. holders of Enbridge common shares in U.S. dollars. Fluctuations in the Canadian dollar/U.S. dollar exchange rate may impact the value of any dividend payments received by U.S. holders of Enbridge common shares.

Q: As a unitholder, was there anything I needed to do or forms that I needed to complete in order to have my shares successfully exchanged in accordance with the offer terms?

Units held in book entry form converted automatically and no unitholder action was required.

Unitholders of certificated shares received a letter of transmittal following the transaction closing which provided instructions on how to surrender and exchange their units.

Q: Can you please clarify whether the ENB common stock issued to SEP unitholders will be the ENB US shares traded on the NYSE or the Canadian shares traded on the TSX?

Holders of SEP common units will receive Enbridge stock in connection with the transaction which will be listed on both the TSX and the NYSE.

All of the Enbridge stock is identical and can be traded over the TSX, NYSE or any other trading platforms.

Additional information regarding the exchange of SEP units for Enbridge stock was included in the Form S-4 filed by Enbridge with respect to the transaction.