**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

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**FORM 10-K**

| x                                               |   | **ANNUAL REPORT PURSUANT TO SECTION 13  OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|-------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|
| **For the fiscal year ended DECEMBER 31, 2005** |
| **OR**                                          |
| o                                               |   | **TRANSITION REPORT PURSUANT TO  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**  |

 

**For the transition period from                to                **

**CommissionFile Number: 1-31383**

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**ENBRIDGE ENERGY MANAGEMENT, L.L.C.**

(Exact name of Registrantas specified in its charter)

| **Delaware**                     |   | **61-1414604**                        |
|----------------------------------|--------|---------------------------------------|
| (State or other  jurisdiction of |   | (I.R.S. Employer  Identification No.) |
| incorporation or  organization)  |   | ** **                            |

 

**1100 Louisiana,Suite 3300Houston, Texas 77002**

(Address of principalexecutive offices and zip code)

**(713) 821-2000**

(Registrant’s telephone number, including area code)

Securities registeredpursuant to Section 12(b) of the Act:

| **Title of each class**                                  |   | **Name of  each exchange on which registered** |
|----------------------------------------------------------|--------|------------------------------------------------|
| Shares  representing limited liability company interests |   | New York Stock  Exchange                       |

 

Securities registeredpursuant to Section 12(g) of the Act: **NONE**

Indicateby check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405of the Securities Act. Yes o  No x

Indicateby check mark if the registrant is not required to file reports pursuant to Section 13or Section 15(d) of the Act. Yes o  No x

Indicateby check mark whether the Registrant (1) has filed all reports required tobe filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that theRegistrant was required to file such reports), and (2) has been subject tosuch filing requirements for the past 90 days. Yes x  No o

Indicateby check mark if disclosure of delinquent filers pursuant to Item 405 ofRegulation S-K is not contained herein, and will not be contained, to the bestof the Registrant’s knowledge, in definitive proxy or information statementsincorporated by reference in Part III of this Form 10-K or anyamendment to this Form 10-K. x

Indicateby check mark whether the registrant is a large accelerated filer, anaccelerated filer, or a non-accelerated filer. See definition of “acceleratedfiler and large accelerated filer” in Rule 12b-2 of the Exchange Act. LargeAccelerated Filer o  AcceleratedFiler x Non-Accelerated Filer o

Indicateby check mark whether the registrant is a shell company (as defined in Rule 12b-2of the Exchange Act). Yes o No x

As ofJune 30, 2005, the aggregate market value of the Registrant’s ListedShares held by non-affiliates of the Registrant was $472,819,913 based on thelast reported sale price of such Listed Shares on the New York Stock Exchangeon that date.

As of February 17,2006, the Registrant has 11,933,018 Listed Shares outstanding.

**DOCUMENTSINCORPORATED BY REFERENCE:**

**Annual Report on Form 10-Kof Enbridge Energy Partners, L.P. for the year ended December 31, 2005**

 

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**TABLE OF CONTENTS**

|                                                 | ** ** | ** **                                                                                                          | ** ** | **Page** |
|-------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------|------------|----------|
|                                            | ** ** | **PART I**                                                                                                     |       |     |
| **Item 1.**                                     |       | Business                                                                                                            |       | 3        |
| **Item 1A.**                                    |       | Risk Factors                                                                                                        |       | 5        |
| **Item 1B.**                                    |       | Unresolved Staff Comments                                                                                           |       | 7        |
| **Item 2.**                                     |       | Properties                                                                                                          |       | 7        |
| **Item 3.**                                     |       | Legal Proceedings                                                                                                   |       | 7        |
| **Item  4.**                                    |       | Submission of Matters to a Vote of Security Holders                                                                 |       | 7        |
| ** **                                      | ** ** | **PART II**                                                                                                    |       |     |
| **Item 5.**                                     |       | Market  for Registrant’s Common Equity, Related Stockholder Matters and Issuer  Purchases of Equity Securities |       | 8        |
| **Item  6.**                                    |       | Selected  Financial Data                                                                                            |       | 9        |
| **Item 7.**                                     |       | Management’s  Discussion and Analysis of Financial Condition and Results of Operations                         |       | 9        |
| **Item 7A.**                                    |       | Quantitative  and Qualitative Disclosures About Market Risk                                                         |       | 12       |
| **Item 8.**                                     |       | Financial  Statements and Supplementary Data                                                                        |       | 13       |
| **Item 9.**                                     |       | Changes  in and Disagreements with Accountants on Accounting and Financial Disclosure                               |       | 13       |
| **Item  9A.**                                   |       | Controls  and Procedures                                                                                            |       | 13       |
| **Item  9B.**                                   |       | Other  Information                                                                                                  |       | 14       |
| ** **                                      | ** ** | **PART III**                                                                                                   |       |     |
| **Item 10.**                                    |       | Directors  and Executive Officers of the Registrant                                                                 |       | 15       |
| **Item  11.**                                   |       | Executive  Compensation                                                                                             |       | 19       |
| **Item 12.**                                    |       | Security  Ownership of Certain Beneficial Owners and Management                                                     |       | 25       |
| **Item 13.**                                    |       | Certain  Relationships and Related Transactions                                                                     |       | 27       |
| **Item 14.**                                    |       | Principal  Accountant Fees and Services                                                                             |       | 28       |
| ** **                                      | ** ** | **PART IV**                                                                                                    |       |     |
| **Item 15.**                                    |       | Exhibits,  Financial Statement Schedules                                                                            |       | 29       |
| **Signatures**                                  |       | 30                                                                                                                  |
| **Index  to Consolidated Financial Statements** |       | F-1                                                                                                                 |

 

*This Annual Reporton Form 10-K contains forward-looking statements. Theseforward-looking statements are identified as any statement that does notrelate strictly to historical or current facts. They use words such as “anticipate,”“believe,” “continue,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,”“position,” “projection,” “strategy,” “could,” “should” or “will” or thenegative of those terms or other variations of them or comparable terminology.In particular, statements, expressed or implied, concerning future actions,conditions or events or future operating results or the ability to generaterevenue, income or cash flow are forward-looking statements. Forward-lookingstatements are not guarantees of performance. They involve risks, uncertaintiesand assumptions. Future actions, conditions or events and future results ofoperations may differ materially from those expressed in these forward-lookingstatements. Many of the factors that will determine these results are beyondthe ability of Enbridge Energy Management, L.L.C. to control or predict. Foradditional discussion of risks, uncertainties and assumptions, see “Item 1A.Risk Factors” included elsewhere in this Form 10-K.*

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**PART I**

**Item 1.**                        Business

**OVERVIEW**

In this report, unless the context requires otherwise,references to “we,” “us,” “our,” the “Company,” or “Enbridge Management” areintended to mean Enbridge Energy Management, L.L.C. and its consolidatedsubsidiary. Our shares, representing limited liability company interests, whichwe refer to as our Listed Shares, are traded on the New York Stock Exchange, orNYSE, under the symbol “EEQ.” References to our “shares” in this Annual Reportmean, collectively, our Listed Shares and our voting shares.

We are a publicly-traded Delaware limitedliability company that was formed on May 14, 2002. We are a limitedpartner in Enbridge Energy Partners, L.P. (the “Partnership”), through ourownership of i-units, a special class of the Partnership’s limitedpartner interests. The Partnership’s Class A common units are traded onthe NYSE under the symbol “EEP.” Under a delegation of control agreement amongus, the Partnership and its general partner, Enbridge Energy Company, Inc.(the “General Partner”), we manage the Partnership’s business and affairs. TheGeneral Partner is an indirect, wholly-owned subsidiary of Enbridge Inc.,an energy company located in Calgary, Canada that we refer to herein asEnbridge.

As of December 31, 2005 and 2004, we owned anapproximate 17.5 percent and 18.1 percent limited partnership interest of thePartnership, respectively. At December 31, 2005, the General Partner owned1.30 (100 percent) voting shares, as well as 2,015,852 (17.2 percent) ListedShares, while the remaining 9,689,095 (82.8 percent) Listed Shares are held bythe public. Our performance depends on the operations and management of thePartnership. Accordingly, we incorporate by reference the Partnership’s AnnualReport on Form 10-K for the year ended December 31, 2005 (the “Partnership’s 10-K”).

On October 17, 2002, we became a limited partnerin the Partnership and, pursuant to a delegation of control agreement, assumedthe management of the Partnership’s business and affairs. The delegation of controlagreement provides that we will not amend or propose to amend the Partnership’spartnership agreement, allow a merger or consolidation involving thePartnership, allow a sale or exchange of all or substantially all of the assetsof the Partnership or dissolve or liquidate the Partnership without theapproval of the General Partner.

The General Partner remains responsible to thePartnership for actions taken or omitted by us while serving as the delegate ofthe General Partner as if the General Partner had taken or omitted to take suchactions. The General Partner owns all of our voting shares. The General Partnerhas agreed not to voluntarily withdraw as general partner of the Partnershipand has agreed not to transfer its interest as general partner of thePartnership unless the transferee agrees in writing to be bound by the termsand conditions of the delegation of control agreement that apply to the GeneralPartner.

Under its partnership agreement, except for theavailable cash that the Partnership is required to retain in respect of thei-units, the Partnership distributes all of its available cash to its generalpartner and holders of its common units on a quarterly basis. The amount ofcash distributed by the Partnership depends on the operations of thePartnership and its subsidiaries and is determined by our board of directors inaccordance with the Partnership’s partnership agreement. We do not, however,receive distributions of cash in respect of the i-units we own and do nototherwise have any cash flow attributable to our ownership of the i-units.Instead, when the Partnership makes distributions of cash to its generalpartner and holders of its common units, the number of i-units we own increasesautomatically under the Partnership’s partnership agreement and the amount ofavailable cash that is attributable to the i-units is retained by thePartnership. The amount of this increase is calculated by dividing the amountof the cash distribution paid by the Partnership on each of its common units bythe average closing price of one of our Listed Shares on the NYSE as determinedfor a 10-trading day period ending on the trading day 

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immediately prior to theex-dividend date for our shares. Concurrently, with the increase in the numberof i-units we own, we make distributions on our shares in the form ofadditional shares, with the result that the number of shares that are thenoutstanding equal the number of i-units that we own.

We have elected to be treated as a corporation forfederal income tax purposes. Therefore, an owner of our shares does not reporton its federal income tax return any of our items of income, gain, loss anddeduction relating to an investment in us. We are subject to federal income taxon our taxable income; however, the i-units owned by us generally are notentitled to allocations of income, gain, loss or deduction of the Partnershipunless there is a liquidation of the Partnership. Therefore, we do notanticipate that we will have material amounts of taxable income resulting fromour ownership of the i-units unless we enter into a sale or exchange of thei-units, or the Partnership is liquidated.

The Partnership recognizes the delegation of rightsand powers to us, and indemnifies and protects us, our officers and ourdirectors to the same extent as it does with respect to the General Partnerunder the Partnership’s partnership agreement. In addition, the Partnershipreimburses us for expenses to the same extent as it does with respect to theGeneral Partner under the Partnership’s partnership agreement and reimburses usfor any Texas franchise taxes and any other foreign, state and local taxes nototherwise paid or reimbursed pursuant to a tax indemnification agreementbetween Enbridge and us.

The delegation of controlagreement with the General Partner continues until:

·       eitherthe General Partner has withdrawn (whether voluntarily or involuntarily) or hasbeen removed as the general partner of the Partnership;

·       allof our shares are owned by the general partner of the Partnership or itsaffiliates, and termination of the delegation of control agreement has beenapproved by us and the general partner of the Partnership; or

·       terminationof the delegation of control agreement has been approved by us, the GeneralPartner, the record holders of a majority of the outstanding Listed Shares(other than the General Partner, the record holder of the voting shares ortheir respective affiliates) and the record holders of the majority of thevoting shares.

The General Partner is the only general partner of thePartnership. The General Partner retains its general partner interest andshares in the profits, losses and distributions from the Partnership.

If the General Partner’spower and authority as general partner are modified in the partnershipagreement of the Partnership, then the power and authority delegated to us willbe modified on the same basis. The delegation of control agreement can beamended by all parties to the agreement except for any amendment that, in thesole discretion of our board of directors, would reduce the time for any noticeto which owners of our shares are entitled or would materially adversely affectthe rights or preferences of the holders of our shares.

**EMPLOYEES**

We have entered intoagreements with the General Partner and several of its affiliates to provide uswith the necessary services and support personnel, who act on our behalf as ouragents.

**AVAILABLE INFORMATION**

We file annual, quarterly and other reports and otherinformation with the Securities and Exchange Commission (“SEC”) under theSecurities Exchange Act of 1934 (the “Exchange Act”). You may read and copy anymaterials that we file with the SEC at the SEC’s Public Reference Room at100F Street, NE, Washington, DC 20549. You may obtain additional informationabout the Public Reference Room by calling the SEC at 1-800-SEC-0330.In addition, the SEC maintains an Internet site at *http://www.sec.gov*

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that contains reports,proxy and information statements and other information regarding issuers thatfile electronically with the SEC, including us.

We also make availablefree of charge on or through our Internet website at *http://www.enbridgemanagement.com*, our Annual Report on Form 10-K, Quarterly Reportson Form 10-Q, Current Reports on Form 8-K and otherinformation statements, and if applicable, amendments to those reports filed orfurnished pursuant to Section 13(a) of the Exchange Act as soon asreasonably practicable after we electronically file such material with, orfurnish it to, the SEC. Information contained on our website is not part ofthis report.

**Item 1A.**                RiskFactors

As discussed above, ourresults of operations, financial position and cash flows depend upon theresults of operations, financial position and cash flows of the Partnership.Consequently, risks and uncertainties affecting the Partnership will directlyaffect our results of operations, financial position and cash flows and couldcause actual results to differ from the forward-looking statements herein.For a discussion of the risk factors that could affect the Partnership’s actualresults and cause such results to differ from forward-looking statementscontained herein and in the Partnership’s Annual Report, please read “RiskFactors” contained in Part I, Item 1A of the Partnership’s 10-K,which discussion is incorporated herein by reference.

**Thevalue of the quarterly distribution of an additional fractional share may beless than the quarterly distribution of cash that the Partnership’s commonunitholders will receive per common unit.**

The fraction of anEnbridge share to be issued per share outstanding with each quarterlydistribution is based on the average closing price of our Listed Shares for theten consecutive trading days preceding the ex-dividend date for our shares.Because the market price of our Listed Shares may vary substantially over time,the market value on the date you receive a distribution of additional sharesmay vary substantially from the cash you would have received had you ownedcommon units of the Partnership instead of our shares.

**ThePartnership may issue additional common or other classes of units, and we mayissue additional shares, which would dilute your ownership interest.**

The issuance ofadditional common or other classes of units by the Partnership or shares by us,other than our quarterly distributions to you, may have the following effects:

·       theamount available for distributions on each share may decrease;

·       therelative voting power of each previously outstanding share may decrease; and

·       themarket price of the Listed Shares may decline.

Additionally, the publicsale by the General Partner of a significant portion of the 3,912,750 Class Bcommon units that it currently owns could reduce the market price of the Class Acommon units and, indirectly, our shares. The Partnership’s partnershipagreement allows the General Partner to cause the Partnership to register forpublic sale any units held by the General Partner or its affiliates. A publicsale of the Class B common units currently held by the General Partnercould absorb some of the trading market demand for the outstanding Class Acommon units, which indirectly could reduce the market price of our shares. Inaddition, the General Partner may sell its Class B common units in privatetransactions at any time, which could have a similar effect on the market forthe outstanding Class A common units and, indirectly, the shares.

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**Becauseour only assets are the Partnership’s i-units that we own, our financialcondition and results of operations depend solely upon the performance of thePartnership.**

We are a limited partner of the Partnership and ouronly asset is the Partnership’s i-units that we own. If the Partnership decreasesthe cash distributions it pays to common unitholders, the value ofdistributions of shares to holders of our shares will decrease as well.

Furthermore, we mayestablish cash reserves at the Partnership that in our reasonable discretionare necessary to fund the Partnership’s future operating and capitalexpenditures, provide for the proper conduct of business, comply withapplicable laws or agreements to which the Partnership is a party, or providefunds for future distributions to partners. These cash reserves affect theamount of cash available for distribution to holders of the Partnership’scommon units and, consequently, the distributions on your shares.

**Sharesare subject to purchase provisions that could result in your having to sellyour shares at a time or price that may be unfavorable to you.**

If Enbridge exercises anyof its rights to purchase our shares, you will be required to sell your sharesat a time or price that may be undesirable, and you could receive less than youpaid for your shares. Any sale of our shares to Enbridge or otherwise for cashwill be a taxable transaction to the owner of the shares sold. Accordingly, again or loss will be recognized on the sale equal to the difference between thecash received and the owner’s tax basis in the shares sold.

**If weare not fully reimbursed or indemnified for obligations and liabilities weincur in managing the business and affairs of the Partnership, we may be unableto pay those liabilities and the value of our shares could decline.**

Under the delegation of controlagreement, we have been delegated management of the Partnership and itsoperating subsidiaries. To the extent we incur liabilities or other obligationsin connection with our performance under the delegation of control agreement,we are entitled to be reimbursed or indemnified by the Partnership to the sameextent as the General Partner under the Partnership’s partnership agreement. Inthe event the Partnership and the General Partner are either unwilling orunable to reimburse or indemnify us, we likely will be unable to satisfy theseliabilities or obligations. Additionally, our right to reimbursement orindemnification is limited under certain circumstances, including if we act inbad faith or if we violate laws, like the U.S. federal securities laws, whereindemnification may be against public policy.

**Theshares you own are not entitled to vote to elect our directors, and, therefore,you will have little or no opportunity to influence or change our management.**

You have little or no opportunity to influence orchange our management, because the General Partner owns all of our votingshares eligible to vote in the election of our directors.

The General Partner hasdelegated to us substantially all of its rights and powers to manage thebusiness and affairs of the Partnership, subject to the General Partner’s rightto approve specified actions. Furthermore, if a person or group owns 20% ormore of the aggregate number of issued and outstanding common units and our shares,that person or group may not vote its shares. This limitation does not apply toEnbridge and its affiliates.

**If inthe future we cease to manage the business and affairs of the Partnership, wemay be deemed to be an investment company under the Investment Company Act of1940.**

If we cease to manage thePartnership’s business and are deemed to be an investment company under theInvestment Company Act of 1940, we would either have to register as aninvestment company under 

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theInvestment Company Act, obtain exemptive relief from the SEC, or modify ourorganizational structure or our contract rights to fall outside the definitionof an investment company. Registering as an investment company could, amongother things, materially limit our ability to engage in transactions with ouraffiliates, including the purchase and sale of certain securities or otherproperty to or from our affiliates, restrict our ability to borrow funds orengage in other transactions involving leverage and require us to add directorswho are independent of us or our affiliates.

**Theinterests of Enbridge may differ from our interests, theinterests of our shareholders and the interests of limited partners of thePartnership.**

Enbridge indirectly owns 100% of the General Partnerand elects all of its directors. The General Partner owns all of our votingshares and elects all of our directors. Furthermore, some of the Partnership’sdirectors and officers are also directors and officers of Enbridge.Consequently, conflicts of interest could arise between the Partnership’sunitholders and Enbridge.

Our limited liabilitycompany agreement and the Partnership’s partnership agreement limit thefiduciary duties of our board of directors and the Partnership to ourshareholders and the Partnership’s unitholders. These restrictions allow ourboard of directors and the General Partner to resolve conflicts of interest byconsidering the interests of all the parties to the conflict, including ourinterests, the interests of the Partnership and the interests of the GeneralPartner. Additionally, these limitations reduce the rights of our shareholdersand the rights of the Partnership’s unitholders under the Partnership’spartnership agreement to sue our board of directors and the board of directorsof the General Partner should they act in a way that, were it not for theselimitations of liability, would constitute a breach of their fiduciary duties.

**Item 1B.**               UnresolvedStaff Comments

None.

**Item 2.**                        Properties

None.

**Item 3.**                        LegalProceedings

We are a participant invarious legal proceedings arising in the ordinary course of business. Some ofthese proceedings are covered, in whole or in part, by insurance. We believethat the outcome of all these proceedings will not, individually or inaggregate, have a material adverse effect on our financial condition.

**Item 4.**                        Submissionof Matters to a Vote of Security Holders

None.

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**PART II**

**Item 5.**                        Marketfor Registrant’s Common Equity and Related Stockholder Matters

OurListed Shares and traded on the NYSE under the symbol “EEQ.” The quarterlyprice ranges per Listed Share are summarized as follows:

| ** **              | ** ** | **Market Price Data** | ** ** |
|-------------------------|------------|---------------------------------|------------|
| ** **              | ** ** | **2005**                        | ** ** | **2004** | ** ** |
| **Quarter ended:** | ** ** | ** **                      | ** ** | **Low** | ** ** | **High** | ** ** | **Low** | ** ** | **High** | ** ** |
| March 31           |       | $                               | 47.51      |   | $ | 54.12 |   | $ | 45.86 |   | $ | 49.69 |   |
| June 30            |       | $                               | 47.08      |   | $ | 52.35 |   | $ | 39.75 |   | $ | 49.85 |   |
| September 30       |       | $                               | 50.12      |   | $ | 55.98 |   | $ | 42.02 |   | $ | 44.80 |   |
| December 31        |       | $                               | 43.25      |   | $ | 55.50 |   | $ | 42.96 |   | $ | 49.39 |   |
|                         |            |                                 |            |  |  |  |  |  |  |  |  |  |  |  |  |

 

On February 17, 2006, the last reported salesprice of the Listed Shares on the NYSE was $46.30. There were approximately 8,600holders of our Listed Shares as of February 17, 2006, which includesindividual participants in security positions listings.

*Distributions.**  *Under the terms of our limitedliability company agreement, except in connection with our liquidation, we donot pay distributions on our Listed Shares in cash, but instead, we makedistributions on our Listed Shares in additional shares or fractions of shares.At the same time the Partnership makes a distribution on its common units andi-units, we distribute on each of our shares that fraction of a sharedetermined by dividing the amount of the cash distribution to be made by thePartnership on each common unit by the average market price of a sharedetermined for the ten-trading day period ending on the trading day immediatelyprior to the ex-dividend date for our Listed Shares.

Thefollowing table sets forth the share distributions, as approved by the board ofdirectors, for each period in the years ended December 31, 2005 and 2004.

| **Dividend  Declaration Date** | ** ** | ** **                  | ** ** | **Dividend  Payment Date** | ** ** | **Record Date** | ** ** | **Distribution  per Unit  of the  Partnership** | ** ** | **Average  Closing Price  of the  Listed Shares** | ** ** | **Additional   i-units owned** | ** ** | **Shares  distributed  to Public** | ** ** | **Shares  distributed to  General  Partner** | ** ** |
|-------------------------------------|------------|-----------------------------|------------|---------------------------------|------------|----------------------|------------|-----------------------------------------------------------|------------|------------------------------------------------------------------|------------|------------------------------------------|------------|-----------------------------------------|------------|---------------------------------------------------|------------|
| **2005**                            | ** ** | ** **                  | ** ** | ** **                      | ** ** |                 | ** ** | ** **                                                |       |                                                             | ** ** | ** **                               |       |                                    | ** ** | ** **                                        |       |   | ** ** | ** ** |   |   | ** ** | ** ** |   |
| October 26, 2005          |       | November 14, 2005 |       | November 3, 2005      |       |                 | $          | 0.925                                                     | ** ** |                                                             |       | $                                        | 51.278     | ** **                              |       |                                              | 207,393    | ** ** |   |   | 171,675 | ** ** |   |   | 35,718 | ** ** |   |
| July 28, 2005                  |       | August 12, 2005        |       | August 5, 2005             |       |                 | $          | 0.925                                                     | ** ** |                                                             |       | $                                        | 54.667     | ** **                              |       |                                              | 191,301    | ** ** |   |   | 158,355 | ** ** |   |   | 32,946 | ** ** |   |
| April 25, 2005                 |       | May 13, 2005           |       | May 4, 2005                |       |                 | $          | 0.925                                                     | ** ** |                                                             |       | $                                        | 50.122     | ** **                              |       |                                              | 204,865    | ** ** |   |   | 169,583 | ** ** |   |   | 35,282 | ** ** |   |
| January 24, 2005               |       | February 14, 2005      |       | February 3, 2005           |       |                 | $          | 0.925                                                     | ** ** |                                                             |       | $                                        | 50.681     | ** **                              |       |                                              | 198,980    | ** ** |   |   | 164,711 | ** ** |   |   | 34,269 | ** ** |   |
|                                |       |                        |       |                            |       |                 |       | ** **                                                |       |                                                             |       | ** **                               |       |                                    | 802,539    | ** **                                        |       |   | 664,324 | ** ** |   |   | 138,215 | ** ** |   |
| **2004**                            |       |                        |       |                            |       |                 |       | ** **                                                |       |                                                             |       | ** **                               |       |                                    |       | ** **                                        |       |   |   | ** ** |   |   |   | ** ** |   |
| October 22, 2004               |       | November 12, 2004      |       | November 1, 2004           |       |                 | $          | 0.925                                                     | ** ** |                                                             |       | $                                        | 43.979     | ** **                              |       |                                              | 224,576    | ** ** |   |   | 185,899 | ** ** |   |   | 38,677 | ** ** |   |
| July 22, 2004                  |       | August 13, 2004        |       | August 2, 2004             |       |                 | $          | 0.925                                                     | ** ** |                                                             |       | $                                        | 43.885     | ** **                              |       |                                              | 220,412    | ** ** |   |   | 182,452 | ** ** |   |   | 37,960 | ** ** |   |
| April 26, 2004                 |       | May 14, 2004           |       | May 5, 2004                |       |                 | $          | 0.925                                                     | ** ** |                                                             |       | $                                        | 45.972     | ** **                              |       |                                              | 206,253    | ** ** |   |   | 170,732 | ** ** |   |   | 35,521 | ** ** |   |
| January 22, 2004               |       | February 13, 2004      |       | February 2, 2004           |       |                 | $          | 0.925                                                     | ** ** |                                                             |       | $                                        | 49.246     | ** **                              |       |                                              | 188,998    | ** ** |   |   | 156,448 | ** ** |   |   | 32,550 | ** ** |   |
|                                |       |                        |       |                            |       |                 |       | ** **                                                |       |                                                             |       | ** **                               |       |                                    | 840,239    | ** **                                        |       |   | 695,531 | ** ** |   |   | 144,708 | ** ** |   |

 

In 2005 and 2004, we had non-cash investing activitiesin the form of the distributions from the i-units and corresponding non-cashfinancing activities in the form of the distributions to the shareholders ofour Listed Shares of $41.5 million and $38.3 million, respectively.

On January 30, 2006, our board of directorsdeclared a share distribution payable on February 14, 2006, toshareholders of record as of February 7, 2006, based on the $0.925 percommon unit distribution declared by the Partnership. The Partnership’sdistribution increases the number of i-units we own. The amount of i-units wereceived from the Partnership on February 14, 2005 was 228,071.

The total i-units distributedto us was computed by dividing $0.925, the cash amount distributed per commonunit, by $47.47, the average closing price of the Listed Shares on the NYSE forthe ten 

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consecutivetrading days prior to the ex-dividend date, multiplied by 11,704,948, thenumber of shares outstanding prior to the distribution. We distributedadditional Listed Shares to the holders of our Listed Shares and additionalshares to the General Partner in respect of these additional i-units.

**Item 6.**                        SelectedFinancial Data

Thefollowing table sets forth our summary financial data for the periods and atthe dates indicated. We derived the table from our consolidated financialstatements and notes thereto, and it should be read in conjunction with thoseconsolidated financial statements. See also “Item 7. Management’sDiscussion and Analysis of Financial Condition and Results of Operations.”

| ** **                                                       | ** ** | **Year ended  December 31,  2005** | ** ** | **Year ended  December 31,  2004** | ** ** | **Year ended  December 31,  2003** | ** ** | **May 14, 2002  (inception) through  December 31, 2002** | ** ** |
|------------------------------------------------------------------|------------|----------------------------------------------|------------|----------------------------------------------|------------|----------------------------------------------|------------|-----------------------------------------------------------------------------------|------------|
| ** **                                                       | ** ** | **(in millions, except per share amounts)**  | ** ** |
| Equity income  from investment in Enbridge Energy Partners, L.P. |       |                                         | $          | 12.0                                         |       |                                         |       | $                                                                                 | 21.6       |   |   |   | $ | 18.9 |   |   |   | $ | 4.7 |   |   |
| Gain on issuance  of units by Enbridge Energy Partners, L.P      |       |                                         | 10.3       |                                         |       |                                         | 7.2        |                                                                              |       |   | 16.2 |   |   |   | — |   |   |
| Income tax  expense                                              |       |                                         | (9.9       | )                                            |       |                                         | (10.1      | )                                                                                 |       |   | (12.3 | ) |   |   | (1.6 | ) |   |
| Net income                                                       |       |                                         | $          | 12.4                                         |       |                                         |       | $                                                                                 | 18.7       |   |   |   | $ | 22.8 |   |   |   | $ | 3.1 |   |   |
| Basic and diluted  earnings per share                            |       |                                         | $          | 1.10                                         |       |                                         |       | $                                                                                 | 1.78       |   |   |   | $ | 2.35 |   |   |   | $ | 1.05 |   |   |
| Weighted average shares  outstanding                             |       |                                         | 11.3       |                                         |       |                                         | 10.5       |                                                                              |       |   | 9.7 |   |   |   | 2.9 |   |   |
| Equivalent  distribution value per share(1)                      |       |                                         | $          | 3.70                                         |       |                                         |       | $                                                                                 | 3.70       |   |   |   | $ | 3.70 |   |   |   | $ | 0.90 |   |   |
| Number of  additional shares distributed                         |       |                                         | 0.80       |                                         |       |                                         | 0.84       |                                                                              |       |   | 0.83 |   |   |   | 0.23 |   |   |
| Total assets at  December 31                                |       |                                         | $          | 366.5                                        |       |                                         |       | $                                                                                 | 376.6      |   |   |   | $ | 358.0 |   |   |   | $ | 332.6 |   |   |

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(1)                Represents thecash distribution paid on each common unit of the Partnership for each periodshown. As more fully discussed in Note 3 to our consolidated financialstatements included in this annual report beginning on page F-1, wereceive distributions of additional i-units rather than cash.

Selected financial data ofthe Partnership is found in Part II, Item 6. of the Partnership’s 10-K,which is hereby incorporated by reference as our results of operation,financial position and cash flows are dependent on the results of operation,financial position and the cash flows of the Partnership.

**Item 7.**                        Management’sDiscussion and Analysis of Financial Condition and Results of Operations

The following discussionand analysis of our financial condition and results of operations is based onour consolidated financial statements. The discussion and analysis should beread in conjunction with our consolidated financial statements and accompanyingnotes beginning on page F-1 of this report.

**BUSINESS OVERVIEW**

We are a Delaware limited liability company that wasformed on May 14, 2002. We have elected to be treated as a corporation forU.S. federal income tax purposes. The General Partner owns all of our votingshares and is an indirect, wholly-owned subsidiary of Enbridge.

By agreement with the Partnership and the GeneralPartner, we manage the business and affairs of the Partnership, subject to theGeneral Partner’s right to approve specified actions.

The information set forth under “Part II, Item 7.Management’s Discussion and Analysis of Financial Condition and Results ofOperations,” in the Partnership’s 10-K for the year ended December 31,2005, is hereby incorporated by reference as our results of operation,financial position and cash flows are dependent on the results of operation,financial position and cash flows of the Partnership.

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**CRITICAL ACCOUNTING POLICIES**

Our consolidated financialstatements are prepared in accordance with accounting principles generallyaccepted in the United States of America, which we refer to herein as U.S.GAAP. The preparation of these consolidated financial statements in conformitywith U.S. GAAP requires our management to make estimates and assumptions thataffect the reported amount of assets, liabilities, revenues and expenses, andthe disclosure of contingent assets and liabilities. Our management evaluatesthese estimates on an ongoing basis, utilizing historical experience,consultation with experts and other methods considered reasonable in theparticular circumstances. Nevertheless, actual results may differ significantlyfrom these estimates. Any effects on the consolidated financial statementsresulting from revisions to these estimates are recorded in the period in whichthe facts that give rise to the revision become known.

**Accountingfor Investment in Enbridge Energy Partners, L.P.**

We use the equity methodof accounting for our ownership interest in the Partnership’s net income andcomprehensive income because we exercise significant influence over thePartnership. We record our share of earnings of the Partnership in the periodin which it is earned. At December 31, 2005 and 2004, we ownedapproximately 17.5 percent and 18.1 percent of the Partnership, respectively.Our ownership percentage changes as the Partnership distributes i-units andissues additional Class A common units. Changes in the calculation of theownership percentage affects our net income and comprehensive income.

**Gainon issuance of units by Enbridge Energy Partners, L.P.**

We recognize a gain orloss when our ownership interest in the Partnership is diluted. This occurswhen the Partnership issues additional Class A common units and we do notparticipate in the issuance. To the extent the new issuance price per unit isgreater than or less than our adjusted average cost per unit, such amount isfurther adjusted and a gain/(loss) is recognized.

**Off-Balance Sheet Arrangements**

We have no off-balancesheet arrangements.

**RESULTS OF OPERATIONS**

Our results of operations consist of our share ofearnings of the Partnership attributable to the i-units we own. At December 31,2005, 2004 and 2003, through our ownership of i-units, we had an approximate 17.5percent, 18.1 percent and 18.2 percent limited partner interest in thePartnership, respectively. Our percentage ownership in the Partnership willchange over time as the number of i-units we own becomes a different percentageof the total units outstanding due to our ownership of additional i-units andother issuances of additional common units by the Partnership.

Thefollowing table presents the Partnership’s allocation of net income to itsGeneral Partner and limited partners for the periods presented.

| ** **                                         | ** ** | **Year ended December 31,** | ** ** |
|----------------------------------------------------|------------|--------------------------------------------|------------|
| ** **                                         | ** ** | **2005**                                   | ** ** | **2004** | ** ** | **2003** | ** ** |
| ** **                                         | ** ** | **(in millions)**                     | ** ** |
| Net income (loss)  of the Partnership              |       | $                                          | 89.2       |   | $ | 138.2 |   | $ | 111.7 |   |
| Less: net income  allocated to the General Partner |       | (23.5                                      | )          | (22.5 | ) | (19.6 | ) |
| Net income (loss)  allocated to limited partners   |       | $                                          | 65.7       |   | $ | 115.7 |   | $ | 92.1 |   |

 

Our net income of $12.4 million, $18.7 million and$22.8 million for the years ended December 31, 2005, 2004 and 2003 respectively,represents equity in earnings attributable to the i-units that we own, plus thedilution gain from the Partnership’s issuance of units, reduced by deferredincome tax expense. Deferred income tax expense is calculated based on thedifference between the accounting and tax basis of 

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our investment in thePartnership and the combined federal and state income tax rate of 37.3%, in 2005,and 35% in 2004 and 2003, of our share of the earnings of the Partnership. Ourearnings were lower in 2005 than 2004 by $6.3 million primarily due tolower equity income from investment in the Partnership and a $1.6 millioncharge for cumulative state income taxes on the differences between book andtaxable net income resulting from the amendment to the delegation of controlagreement, partially offset by the Partnership having issuances of more commonunits in 2005 than 2004.

Our net income was $18.7 million and$22.8 million for the years ended December 31, 2004 and 2003,respectively. The decrease in net earnings in 2004 was primarily due to lowerdilution gains of $9.0 million recognized in 2004 primarily due to thePartnership having issued fewer common units in 2004 as compared with 2003.

Both basic and diluted earnings per share are calculatedby dividing our net income by our weighted-average number of outstandingshares during the period. Earnings per share was $1.10 for the year ended December 31,2005 as compared with $1.78 for the year ended December 31, 2004. Earningsper share was $1.78 for the year ended December 31, 2004 compared with$2.35 for the year ended December 31, 2003. The decrease in earnings pershare from 2003 to 2004 and from 2004 to 2005 is attributable to lower netincome and slightly higher weighted average shares outstanding and a highereffective tax rate in 2005.

We do not have anysecurities outstanding that may be converted into or exercised for our shares.

**LIQUIDITY AND CAPITAL RESOURCES**

Our authorized capital structure consists of twoclasses of membership interests: (1) our Listed Shares, which representlimited liability company interests with limited voting rights, and (2) ourvoting shares. At December 31, 2005, our issued capitalization consistedof $454.0 million associated with our 11,704,947 outstanding Listed Shares. At December 31,2004, our issued capitalization consisted of $412.5 million associated with our10,902,408 outstanding Listed Shares.

The number of our shares outstanding, including thevoting shares owned by the General Partner, will at all times equal the numberof i-units we own in the Partnership. Typically, the General Partner and ownersof the Partnership’s common units receive distributions from the Partnership incash. Instead of receiving cash distributions, however, the number of i-unitswe own increases automatically under the Partnership’s partnership agreement.The amount of this increase is calculated by dividing the distribution per unitby the closing price of one of our Listed Shares on the NYSE as determined fora 10-trading day period ending on the trading day immediately prior tothe ex-dividend date for our Listed Shares. At the same time that the number ofi-units we own increases, we will make a distribution on our shares in the formof additional shares, with the result that the number of shares that are thenoutstanding will equal the number of i-units that we own.

We used substantially all of the net proceeds from ourinitial public offering to purchase i-units from the Partnership and tocompensate Enbridge (the ultimate parent company of the General Partner) forits purchase provisions and tax indemnities. Under the Enbridge purchaseprovisions, which are a part of our limited liability company agreement,Enbridge has the right, under limited circumstances, to purchase ouroutstanding shares. In addition, Enbridge generally agreed to indemnify us forany tax liability attributable to our formation, our management of thePartnership or our ownership of the i-units. Additionally, Enbridge generallyagreed to indemnify us for any taxes arising from a transaction involving thei-units to the extent the transaction does not generate sufficient cash to paysuch taxes, in each case, other than any Texas franchise taxes or any similarcapital-based other foreign, state or local taxes that are required to be paidor reimbursed by the Partnership under the delegation of control agreement.

If we incur liabilities or other obligations inconnection with the performance of our obligations under the delegation of controlagreement, we are entitled to be reimbursed or to be indemnified by the 

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Partnership or the GeneralPartner. Thus, we expect that our expenditures associated with managing thebusiness and affairs of the Partnership and the reimbursement of these expensesthat we receive will continue to be equal. As stated above, we do not receivequarterly distributions of cash on the i-units we hold. Therefore, we expectneither to generate nor to require significant amounts of cash in ongoingoperations. Any net cash proceeds we receive from the sale of additional shareswill immediately be used to purchase additional i-units. Accordingly, we do notanticipate any other sources of or needs for additional liquidity.

We are not permitted toborrow money or incur debt other than with Enbridge and its affiliates withoutthe approval of holders owning at least a majority of our shares.

**INCOME TAXES**

We are a limited liability company that has elected tobe treated as a corporation for federal income tax purposes. Deferred incometax assets and liabilities are recognized for temporary differences between thebasis of our assets and liabilities for financial reporting and income taxpurposes.

Pursuant to a delegation of control agreement with theGeneral Partner, the Partnership has agreed to reimburse us and EnbridgeManagement Services, L.L.C., our wholly-owned subsidiary (“EMS”), for anydirect and indirect expenses we or EMS incur to the same extent as it does withrespect to the General Partner as general partner, including certain taxexpenses.

The delegation of controlagreement with the General Partner was amended effective February 21, 2005. As a result of the amendment, theGeneral Partner bears the economic impact for our taxes only in the event we donot have sufficient cash to pay them. Accordingly, we began accruing stateincome taxes in 2005 in addition to federal income taxes. The effective taxrate used in computing the income tax provision is 37.3%, which represents thefederal statutory rate of 35.0% and the effective state rate of 2.3% (beforethe impact of the increase in the state tax rate on the cumulative differencesbetween book and taxable net income).

**RECENT ACCOUNTING PRONOUNCEMENTS**

***Accounting Changes and Error Corrections***

In May 2005, the FinancialAccounting Standards Board issued Statement of Financial Accounting Standards No. 154,*Accounting Changes and Error Corrections, areplacement of APB Opinion No. 20 and FASB Statement No. 3*.Under this statement, voluntary changes in accounting principles are requiredto be applied retrospectively for the direct effects of a change to priorperiods’ financial statements, unless such application is impracticable.Retrospective application refers to reflecting a change in accounting principlein the financial statements of prior periods as if the principle had alwaysbeen used. When retrospective application is determined to be impracticable,this statement requires the new accounting principle to be applied to thebalances of assets and liabilities as of the beginning of the earliest periodfor which retrospective treatment is practicable with a correspondingadjustment to the opening balance of retained earnings. This statement retainsthe guidance in APB Opinion No. 20 for reporting the corrections of errorsand changes in accounting estimates. This statement is effective for accountingchanges and corrections of errors made in fiscal years beginning after December 15,2005, with early adoption permitted. Our adoption of this statement on January 1,2006, will affect our consolidated financial statements for any changes inaccounting principles we may make in 2006 and future periods, or newpronouncements we adopt that do not provide transition provisions.

**Item 7A.     Quantitativeand Qualitative Disclosure About Market Risk**

The nature of our business and operations is such thatno activities or transactions of the type requiring discussion under this itemare conducted.

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For a discussion of thesematters as they pertain to the Partnership, please read “Part II, Item 7A.”of the Partnership’s 10-K, which is hereby incorporated by reference asactivities of the Partnership have an impact on our results of operations andfinancial position.

**Item 8.        FinancialStatements and Supplementary Data**

Our consolidated financial statements, together withthe notes thereto and the report of the independent registered publicaccounting firm, and unaudited supplementary information, begin on page F-1of this Report and are hereby incorporated by reference.

The consolidated financialstatements of the Partnership, together with the notes thereto, the report ofthe independent registered public accounting firm and unaudited supplementaryinformation, can be found in the Partnership’s 10-K in “Part II,Item 8,” which is hereby incorporated by reference as activities of thepartnership have an impact on our results of operations and financial position.

**Item 9.        Changesin and Disagreements with Accountants on Accounting and Financial Disclosure.**

None.

**Item 9A.     Controlsand Procedures.**

**DISCLOSURE CONTROLS AND PROCEDURES**

Enbridge Management andEnbridge maintain systems of disclosure controls and procedures designed toprovide reasonable assurance that we are able to record, process, summarize andreport the information required in our annual and quarterly reports under theExchange Act. Our management has evaluated the effectiveness of our disclosurecontrols and procedures as of December 31, 2005. Based upon thatevaluation, our principal executive officer and principal financial officerconcluded that our disclosure controls and procedures are effective toaccomplish their purpose. In conducting this assessment, our management reliedon similar evaluations conducted by employees of Enbridge affiliates whoprovide certain treasury, accounting and other services on our behalf. Nochanges in our internal control over financial reporting were made during thethree months ended December 31, 2005, that would materially affect ourinternal control over financial reporting.

**INTERNALCONTROL OVER FINANCIAL REPORTING**

***Management’s Report on Internal Control Over FinancialReporting***

Our management is responsible for establishing andmaintaining adequate internal control over our financial reporting as such termis defined in the Securities Exchange Act Rule 13a-15(f).

Our internal control over financial reporting is aprocess designed under the supervision and with the participation of ourprincipal executive and principal financial officers to provide reasonableassurance regarding the reliability of our financial reporting and the preparation of our financialstatements for external reporting purposes in accordance with U.S. GAAP.

Our internal control over financial reporting includes policiesand procedures that:

·       Pertain to the maintenanceof records that, in reasonable detail, accurately and fairly reflect ourtransactions and dispositions of our assets;

·       Provide reasonableassurance that our transactions are recorded as necessary to permit preparationof our financial statements in accordance with U.S. GAAP, and that our receiptsand expenditures are being made only in accordance with the authorization ofour management and directors; and

·       Provide reasonableassurance that unauthorized acquisition, use or disposition of our assets thatcould have a material effect on our financial statements is prevented or timelydetected.

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Our internal control over financial reporting may notprevent or detect all misstatements because of its inherent limitations.Additionally, projections of any evaluation of effectiveness to future periodsare subject to the risk that controls may become inadequate because of changesin conditions, or deterioration in the degree of compliance with our policiesand procedures.

Our management assessed the effectiveness of our internalcontrol over financial reporting as of December 31, 2005, based on theframework established in *Internal Control—IntegratedFramework* issued by the Committee of Sponsoring Organizations of theTreadway Commission (COSO). Based on this assessment, our management concludedthat our internal control over financial reporting is effective as of December 31,2005.

Our management’sassessment of the effectiveness of our internal control over financialreporting as of December 31, 2005 has been audited by PricewaterhouseCoopersLLP, an independent registered public accounting firm, as stated in theirreport beginning on page F-2.

**Item 9B.     OtherInformation**

None.

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**PART III**

**Item 10.**                 Directorsand Executive Officers of the Registrant

**(a)   DIRECTORSAND EXECUTIVE OFFICERS OF THE REGISTRANT**

Our business and affairs are managed by our board ofdirectors.

Setforth below is certain information concerning the directors and executiveofficers of the General Partner and us as the delegate of the General Partnerunder a delegation of control agreement among the Partnership, the GeneralPartner and us. All directors of the General Partner are elected annually andmay be removed by Enbridge Pipelines Inc. (“Enbridge Pipelines”), as the solestockholder of the General Partner. All directors were elected and may beremoved by the General Partner, as the sole holder of our voting shares. All ofour officers and those of the General Partner serve at the discretion of therespective boards of directors of the General Partner and us. All directors andofficers of the General Partner hold identical positions with us.

| **Name**       | ** ** | ** ** | ** ** | **Age**                                                                                                      | ** ** | **Position** |
|----------------|------------|------------|------------|--------------------------------------------------------------------------------------------------------------|------------|--------------|
| J.A. Connelly  |       | 59         |       | Director                                                                                                     |
| P.D. Daniel    |       | 59         |       | Director                                                                                                     |
| E.C. Hambrook  |       | 68         |       | Director                                                                                                     |
| M.O. Hesse     |       | 63         |       | Director                                                                                                     |
| G.K. Petty     |       | 64         |       | Director                                                                                                     |
| D.C. Tutcher   |       | 56         |       | President and Director                                                                                       |
| J.R. Bird      |       | 56         |       | Group Vice  President—Liquids Transportation and Director                                               |
| L.A. Zupan     |       | 50         |       | Vice President—Liquids  Transportation Operations                                                       |
| M.A. Maki      |       | 41         |       | Vice President—Finance                                                                                  |
| T.L. McGill    |       | 51         |       | Vice  President—Commercial Activity & Business Development &  Chief Operating Officer |
| A.D. Meyer     |       | 49         |       | Vice President—Liquids  Transportation Technology                                                       |
| R.L. Adams     |       | 41         |       | Vice President—Operations  and Technologies                                                             |
| D.V. Krenz     |       | 54         |       | Vice President                                                                                               |
| V.D. Yu        |       | 39         |       | Treasurer                                                                                                    |
| J.L. Balko     |       | 40         |       | Controller                                                                                                   |
| E.C. Kaitson   |       | 49         |       | Assistant Secretary                                                                                          |
| B.A. Stevenson |       | 50         |       | Corporate Secretary                                                                                          |

 

J.A. Connelly was elected a director of the GeneralPartner in January 2003 and serves as the Chairman of its Audit, Finance &Risk Committee. Mr. Connelly served as Executive Vice President, SeniorVice President and Vice President of the Coastal Corporation from 1988 to 2001.Mr. Connelly is a business consultant providing executive managementconsulting services.

P.D. Daniel was elected a director of the GeneralPartner in July 1996 and served as its President from July 1996through October 1997. Mr. Daniel has served as President of Enbridgesince September 2000 and as Chief Executive Officer of Enbridge since January 2001.Prior to that time Mr. Daniel also served as President & ChiefOperating Officer—Energy Delivery of Enbridge from June 1998 to December 2000.He currently serves as a director of EnCana Corporation.

E.C. Hambrook was elected a director of the GeneralPartner in January 1992 and serves on its Audit, Finance & RiskCommittee. Mr. Hambrook serves as Chairman of the board of directors ofthe General Partner. Mr. Hambrook has served as President of HambrookResources, Inc. since its inception in 1991. Hambrook Resources, Inc.is a real estate investment, marketing and sales company.

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M.O. Hesse was elected a director of the GeneralPartner in March 2003 and serves as a member of its Audit, Finance &Risk Committee. Ms. Hesse was President and CEO of Hesse Gas Company from1990 through 2003. She served as Chairman of the U.S. Federal Energy RegulatoryCommission from 1986 to 1989. Ms. Hesse also served as Senior VicePresident, First Chicago Corporation and Assistant Secretary for Management andAdministration, U.S. Department of Energy. She currently serves as a directorof Arizona Public Service Company, Pinnacle West Capital Corporation, and TerraIndustries, Inc.

G.K. Petty was elected a director of the GeneralPartner in February 2001 and serves on its Audit, Finance & RiskCommittee. Mr. Petty has served as a director of Enbridge since January 2001.Mr. Petty served as President and Chief Executive Officer of TelusCorporation, a Canadian telecommunications company, from November 1994 to November 1999.Mr. Petty is a business consultant providing executive managementconsulting services to the telecommunications industry.

D.C. Tutcher was elected a director and President ofthe General Partner in June 2001. He also currently serves as Group VicePresident, Transportation South of Enbridge. He was previously Chairman of theBoard, President and Chief Executive Officer of Midcoast Energy Resources, Inc.from its formation in 1992 until it was acquired by Enbridge on May 11,2001.

J.R. Bird served as a director of the General Partnerfrom September 2000 to January 2003 and was reelected as a Directorin October 2003. He was elected Group Vice President, LiquidsTransportation of the General Partner in May 2005 and Vice President,Liquids Transportation in January 2003. He served as President from September 2000until June 2001. He has also served as Group Vice President, LiquidsPipelines since May 2005, prior to which he was Group Vice President,Transportation North of Enbridge since May 2001 and President of EnbridgePipelines since September 2000. Prior to that time he served as Group VicePresident, Transportation from September 2000 through April 2001 andas Senior Vice President, Corporate Planning and Development of Enbridge from August 1997through August 2000.

L.A. Zupan was elected Vice President, Liquids TransportationOperations of the General Partner in July 2004. Prior to that he hasserved as Vice President, Development & Services for EnbridgePipelines since 2000 and prior to that as Director, Information Technology.

M.A. Maki was elected Vice President, Finance of theGeneral Partner in July 2002. Prior to that time, he served as Controllerof the General Partner since June 2001, and prior to that, as Controllerof Enbridge Pipelines since September 1999.

T.L. McGill was elected Vice President, Commercial Activityand Business Development of the General Partner in April 2002 and ChiefOperating Officer in July 2004. Prior to that time, Mr. McGill wasPresident of Columbia Gulf Transmission Company from January 1996 to March 2002.

A.D. Meyer was elected Vice President, LiquidsTransportation Technology, of the General Partner in July 2003. He alsocontinues to serve as Vice President, Technology, Enbridge Pipelines since hisappointment in July 1999 and as President, Gateway Pipeline Inc. since hisappointment in June 2005. Prior to that time he served as President,Enbridge Pipelines (Athabasca) Inc. from October 1997 to July 1999and as Vice President, Liquids Marketing with Enbridge for the same period.

R.L. Adams was elected Vice President, Operations andTechnologies of the General Partner in April 2003. Prior to his currentposition, he was Director of Technology & Operations for the GeneralPartner since 2001, and Director of Field Operations and Technical Services andDirector of Commercial Activities for Ocensa/Enbridge in Bogota, Columbia from1997 to 2001.

D.V. Krenz was elected Vice President of the GeneralPartner in January 2005. Prior to that, he was President of Shell GasTransmission, LLC (previously Shell Gas Pipelines Co.) from March 1996 to December 2004.

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V.D. Yu was elected Treasurer of the General Partnerin July 2005 and is also an Assistant Treasurer of Enbridge. Since July 2002,he was Director, Financial Management at Enbridge and previously Manager,Capital Markets and Risk Management.

J.L. Balko was elected Controller of the GeneralPartner in April 2003. Prior to that time, she served as Chief Accountantof the General Partner from October 1999 to April 2003.

E.C. Kaitson was elected Assistant Secretary of theGeneral Partner in July 2004. He served as Corporate Secretary of theGeneral Partner from October 2001 to July 2004. He also currentlyserves as Associate General Counsel of Enbridge. He was previously AssistantCorporate Secretary and General Counsel of Midcoast Energy Resources, Inc.from 1997 until Enbridge acquired it on May 11, 2001.

B.A. Stevenson was electedCorporate Secretary of the General Partner in July 2004. Between 2000 and2004 Mr. Stevenson held management positions with Reliant Energy, Inc.and Arthur Andersen LLP. Prior to that Mr. Stevenson was General Counsel &Corporate Secretary of Alberta Natural Gas Company Ltd, a Canadian gasprocessing and transmission company, that was acquired by TransCanada Pipelines.

**(b) SECTION 16(a) BENEFICIALOWNERSHIP REPORTING COMPLIANCE**

Section 16(a) ofthe Exchange Act requires our directors, executive officers and 10% beneficialowners to file with the SEC reports of ownership and changes in ownership ofour equity securities and to furnish us with copies of all reports filed. Basedsolely on the review of the reports furnished to us, we believe that, duringfiscal year 2005, all Section 16(a) filing requirements applicable toEnbridge Management’s directors, executive officers and greater than 10%beneficial owners were met.

**(c) GOVERNANCE MATTERS**

We are a “controlled company,” as that term is used inNYSE Rule 303A, because all of our voting shares are owned by the GeneralPartner. Because we are a controlled company, the NYSE listing standards do notrequire that we or the General Partner have a majority of independent directorsor a nominating or compensation committee of the General Partner’s board ofdirectors.

The NYSE listing standardsrequire our CEO to annually certify that he is not aware of any violation bythe Partnership of the NYSE corporate governance listing standards.Accordingly, this certification was provided as required to the NYSE on October 14,2005.

**AUDIT, FINANCE & RISK COMMITTEE**

We have an Audit, Finance & Risk Committee(the “Audit Committee”) comprised of four board members who are independent asthe term is used in Section 10A of the Exchange Act, as amended. None ofthese members are relying upon any exemptions from the independencerequirements of Section 10A of the Exchange Act, as amended. The membersof our Audit Committee are M.O. Hesse, E.C. Hambrook, G.K. Petty and J.A.Connelly. Our Audit Committee provides independent oversight with respect toour internal controls, accounting policies, financial reporting, internal auditfunction and the report of the independent registered public accounting firm.Our Audit Committee also reviews the scope and quality, including theindependence and objectivity of the independent and internal auditors and thefees paid for both audit and non-audit work and makes recommendationsconcerning audit matters, including the engagement of the independent auditors,to the board of directors.

The charter of our Audit Committee is filed as anexhibit to this annual report on Form 10-K and is available on  our website at *www.enbridgemanagement.com*. The Charter of our AuditCommittee complies with the listing standards of the NYSE currently applicableto us.

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Our board of directors has determined that M.O. Hesse,E.C. Hambrook and J.A. Connelly qualify as “Audit Committee financial experts”as defined in Item 401(h) of SEC Regulation S-K and are independentas that term is used in Item 7(d)(3)(iv) of Schedule 14A under theExchange Act.

Our Audit Committee hasestablished procedures for the receipt, retention and treatment of complaintswe receive regarding accounting, internal accounting controls or auditingmatters and the confidential, anonymous submission by our employees of concernsregarding questionable accounting or auditing matters. Persons wishing tocommunicate with our Audit Committee may do so by writing in care of Chairman,Audit Committee, c/o Enbridge Energy Management, L.L.C., 1100 Louisiana, Suite 3300,Houston, Texas 77002.

**CODEOF ETHICS, STATEMENT OF BUSINESS CONDUCT AND CORPORATE GOVERNANCE GUIDELINES**

We have adopted a Code of Ethics applicable to oursenior financial officers, including our principal executive officer, principalfinancial officer and principal accounting officer. A copy of our Code ofEthics for Senior Financial Officers is available on our Internet website at *www.enbridgemanagement.com* and is includedherein as Exhibit 14.1. We intend to post on our Internet website anyamendments to or waivers of our Code of Ethics for Senior Financial Officers.Additionally, this material is available in print, free of charge, to anyperson who requests the information. Persons wishing to obtain this printed materialshould submit a request to Corporate Secretary, c/o Enbridge Energy Management,L.L.C., 1100 Louisiana, Suite 3300, Houston, TX 77002.

We also have a Statement of Business Conductapplicable to all of our employees, officers and directors. A copy of theStatement of Business Conduct is available on our website at *www.enbridgemanagement.com*. We intend topost on our website any amendments to or waivers of our Statement of BusinessConduct. Additionally, this material is available in print, free of charge, toany person who requests the information. Persons wishing to obtain this printedmaterial should submit a request to Corporate Secretary, c/o Enbridge EnergyManagement, L.L.C., 1100 Louisiana, Suite 3300, Houston TX 77002.

We also have a statementof Corporate Governance Guidelines that sets forth the expectation of how theboard of directors should function and the board of directors’ position withrespect to key corporate governance issues. A copy of the Corporate GovernanceGuidelines is available on our website at *www.enbridgemanagement.com*.We intend to post on our website any amendments to our Corporate GovernanceGuidelines. Additionally, this material is available in print, free of charge,to any person who requests the information. Persons wishing to obtain thisprinted material should submit a request to Corporate Secretary, c/o EnbridgeEnergy Management, L.L.C., 1100 Louisiana, Suite 3300, Houston TX 77002.

**EXECUTIVESESSIONS OF NON-MANAGEMENT DIRECTORS**

Our non-management directors meet at regularlyscheduled executive sessions without management. J.A. Connelly or E.C. Hambrookserve as the presiding director at those executive sessions. Persons wishing tocommunicate with our non-management directors may do so by writing in care ofChairman, Board of Directors, Enbridge Energy Management, L.L.C., 1100Louisiana, Suite 3300, Houston, Texas 77002.

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**Item 11.**                 ExecutiveCompensation

The following table setsforth the annual, long-term and other compensation for all services provided inall capacities to Enbridge Management and the Partnership for the fiscal yearsended December 31, 2005, 2004 and 2003 of the Chief Executive Officer andfour of our other executive officers with the highest salary and bonuscompensation charged to Enbridge Management and the Partnership in the 2005fiscal year (the “Named Executive Officers”). The Partnership bears an allocableportion of these officers’ total compensation that is based on the approximatepercentage of time each of these officers devote to Enbridge Management and thePartnership. The other affiliates of Enbridge, to whom these officers alsorender services, bear the remainder of the compensation expenses of theseofficers.

***SummaryCompensation Table***

| Name & Principal  Position | ** ** | ** ** | ** ** | **Year** | ** ** | **Salary  ($)** | ** ** | **Bonus  ($)** | ** ** | **Other Annual  Compen-  sation**(1)(2)  ($) | ** ** | **Restricted  Stock  Award(s)  ($)** | ** ** | **Securities  Underlying  Options/  SARs**(3)  (#) | ** ** | **LTIP  Payouts  ($)** | ** ** | **All Other  Compen-  sation**(4)  ($) | ** ** | **Approximate  Percentage of  Time Devoted  to Enbridge  Management  and the  Partnership** | ** ** |
|------------------------------------------|------------|------------|------------|----------|------------|-----------------|------------|----------------|------------|---------------------------------------------------|------------|--------------------------------------|------------|----------------------------------------------------|------------|------------------------|------------|---------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------|------------|
| D.C. Tutcher                             |       |       | 2005       |     |       | 343,750         |       | 235,000        |       |                                              | 30,000     |                                 |       |                                               | —     |                   |       |                                        | 34,000     |                                                                                                            |       |   | — |   |   |   | 17,897 |   |   |   | 90 |   |   |
| President                                |       |       | 2004       |     |       | 322,000         |       | 270,000        |       |                                              | 30,000     |                                 |       |                                               | —     |                   |       |                                        | 17,000     |                                                                                                            |       |   | — |   |   |   | 12,350 |   |   |   |   |   |   |
|                                          |       |       | 2003       |     |       | 309,750         |       | 235,000        |       |                                              | 35,000     |                                 |       |                                               | —     |                   |       |                                        | 50,000     |                                                                                                            |       |   | — |   |   |   | 10,000 |   |   |   |   |   |   |
| T.L. McGill                              |       |       | 2005       |     |       | 267,750         |       | 143,894        |       |                                              | 20,000     |                                 |       |                                               | —     |                   |       |                                        | 20,400     |                                                                                                            |       |   |   |   |   |   | 12,886 |   |   |   | 90 |   |   |
| Vice  President—                    |       |       | 2004       |     |       | 231,385         |       | 126,500        |       |                                              | 20,000     |                                 |       |                                               | —     |                   |       |                                        | 20,000     |                                                                                                            |       |   | — |   |   |   | 11,044 |   |   |   |   |   |   |
| Commercial                               |       |       | 2003       |     |       | 221,000         |       | 89,800         |       |                                              | 20,000     |                                 |       |                                               | —     |                   |       |                                        | 23,200     |                                                                                                            |       |   | — |   |   |   | 6,361 |   |   |   |   |   |   |
| Activity &  Business            |       |       |       |     |       |            |       |           |       |                                              |       |                                 |       |                                               |       |                   |       |                                        |       |                                                                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Development                              |       |       |       |     |       |            |       |           |       |                                              |       |                                 |       |                                               |       |                   |       |                                        |       |                                                                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |
| E.C. Kaitson                             |       |       | 2005       |     |       | 182,685         |       | 54,839         |       |                                              | 10,000     |                                 |       |                                               | —     |                   |       |                                        | 11,600     |                                                                                                            |       |   | — |   |   |   | 11,384 |   |   |   | 90 |   |   |
| Assistant Secretary                      |       |       | 2004       |     |       | 174,055         |       | 59,900         |       |                                              | 10,000     |                                 |       |                                               | —     |                   |       |                                        | 6,500      |                                                                                                            |       |   | — |   |   |   | 10,643 |   |   |   |   |   |   |
| and Associate General                    |       |       | 2003       |     |       | 168,000         |       | 35,400         |       |                                              | 10,000     |                                 |       |                                               | —     |                   |       |                                        | 5,900      |                                                                                                            |       |   | — |   |   |   | 8,375 |   |   |   |   |   |   |
| Counsel                                  |       |       |       |     |       |            |       |           |       |                                              |       |                                 |       |                                               |       |                   |       |                                        |       |                                                                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |
| M.A. Maki                                |       |       | 2005       |     |       | 197,500         |       | 84,840         |       |                                              | 20,000     |                                 |       |                                               | —     |                   |       |                                        | 11,400     |                                                                                                            |       |   | — |   |   |   | 10,288 |   |   |   | 90 |   |   |
| Vice  President—                    |       |       | 2004       |     |       | 171,365         |       | 87,300         |       |                                              | 20,000     |                                 |       |                                               | —     |                   |       |                                        | 15,000     |                                                                                                            |       |   | — |   |   |   | 9,444 |   |   |   |   |   |   |
| Finance                                  |       |       | 2003       |     |       | 161,750         |       | 71,400         |       |                                              | 20,000     |                                 |       |                                               | —     |                   |       |                                        | 16,700     |                                                                                                            |       |   | — |   |   |   | 7,100 |   |   |   |   |   |   |
| R.L. Adams                               |       |       | 2005       |     |       | 176,070         |       | 75,600         |       |                                              | 20,000     |                                 |       |                                               | —     |                   |       |                                        | 10,800     |                                                                                                            |       |   |   |   |   |   | 8,950 |   |   |   | 90 |   |   |
| Vice President—                     |       |       | 2004       |     |       | 161,960         |       | 81,600         |       |                                              | 20,000     |                                 |       |                                               | —     |                   |       |                                        | 10,000     |                                                                                                            |       |   | — |   |   |   | 8,339 |   |   |   |   |   |   |
| Operations and                           |       |       | 2003       |     |       | 151,000         |       | 54,100         |       |                                              | 26,229     |                                 |       |                                               | —     |                   |       |                                        | 7,500      |                                                                                                            |       |   | — |   |   |   | 7,568 |   |   |   |   |   |   |
| Technology                               |       |       |       |     |       |            |       |           |       |                                              |       |                                 |       |                                               |       |                   |       |                                        |       |                                                                                                            |       |   |   |   |   |   |   |   |   |   |   |   |   |

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(1)                 Amounts in this column include: the flexibleperquisites allowance (as described in Note 2 below), flexible creditspaid as additional compensation (as described in Note 2 below), one-timepayments for termination benefits, and the taxable benefit from loans byEnbridge made before the effective date of the Sarbanes-Oxley Act, which weregranted for relocation or hiring incentive purposes (and amounts reimbursed forthe payment of taxes relating to such benefit).

(2)                 Effective July 1, 2001, Enbridge adopted aflexible benefit program pursuant to which employees receive an amount of flexcredits based on their family status and base salary. Beginning in fiscal 2003,the Named Executive Officers were given a Flexible Perquisites Allowance tocover perquisites that may have been previously paid on behalf of eachexecutive. Flex credits can be (a) used to purchase various benefits (suchas extended health or dental coverage, disability insurance and life insurance)on the same terms as are available to all employees; (b) applied ascontributions to the Stock Purchase and Savings Plan (as described inNote 3 below); or (c) paid to the employee as additionalcompensation. In 2005, Mr. Tutcher received perquisites and other personalbenefits totaling $30,000, all of which related to his Flexible PerquisitesAllowance; Mr. McGill received perquisites and other personal benefitstotaling $20,000, all of which related to his Flexible Perquisites Allowance; Mr. Makireceived perquisites and other personal benefits totaling $20,000, all of whichrelated to his Flexible Perquisites Allowance; Mr. Kaitson receivedperquisites and other personal benefits totaling $10,000, all of which relatedto his Flexible Perquisites Allowance, and Mr. Adams received perquisitesand other personal benefits totaling $20,000 all of which related to hisFlexible Perquisites Allowance.

19

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(3)                 Each option entitles the holder to acquire theindicated number of shares of Enbridge common stock. The costs associated withrecognizing the fair value of the options as compensation expense are borne bythe Partnership. Additional information is provided in the following sectionlabeled “Stock Options”.

(4)                 Employees in the United States participatein the Enbridge Employee Services, Inc. Savings Plan (the “401(k) Plan”)under which employees may contribute up to 50% of their base salary, withemployee contributions up to 5% matched by Enbridge (all subject to thecontribution limits specified in the Internal Revenue Code). Enbridge’scontributions are used to purchase Enbridge shares at market value and theemployees’ contributions may be used to purchase Enbridge shares or ninedesignated funds. During 2005, Enbridge made contributions of $10,500, $10,500,$9,134.34, $9,875.06, and $8,571.53, respectively, to the 401(k) Plan forthe benefit of Mr. Tutcher, Mr. McGill, Mr. Kaitson, Mr. Maki,and Mr. Adams. Mr. Tutcher also received $5,000 as reimbursement forprofessional financial services. Additionally, during 2005 Enbridge EmployeeServices, Inc. paid term life insurance premiums of $540, $529, $393,$413, and $378 for the benefit of Mr. Tutcher, Mr. McGill, Mr. Kaitson,Mr. Maki, and Mr. Adams, respectively. In 2005, Enbridge EmployeeServices, Inc. also furnished Messrs. Tutcher, McGill and Kaitsonwith parking benefits, at an annual cost of $1,857.

***Stock Options***

We do not maintain any compensationplans for the benefit of the Named Executive Officers under which equity interestsin us or the Partnership may be awarded. In 2004, Enbridge began allocating tous the compensation expense it recognized in connection with recording the fairvalue of its outstanding stock options granted to certain of our officers,including the Named Executive Officers. Prior to 2004, we were not allocatedany expense associated with stock option grants. The stock options are grantedto the Named Executive Officers pursuant to the Enbridge Incentive Stock OptionPlan, which is a long-term incentive plan administered by the Human Resources &Compensation Committee of Enbridge. The stock option grants are denominated inCanadian dollars, or CAD. The following two tables set forth informationconcerning options granted and exercised during 2005 by the Named ExecutiveOfficers under the Enbridge stock option plans:

***Options/SAR Grantsin Last Fiscal Year***

| **Individual Grants** | ** ** | **Potential Realizable**                                     | ** ** |
|----------------------------|------------|-------------------------------------------------------------------|------------|
| ** **                 | ** ** | **Number of  Securities  Underlying  Options/SARs  Granted** | ** ** | **Percent of Total  Options/SARs  Granted to  Employees in** | ** ** | **Exercise or  Base Price** | ** ** | ** ** | ** ** | **Value at Assumed   Annual Rates of  Stock Price  Appreciation for   Options Term** | ** ** |
| **Name**                   | ** ** | ** **                                                        | ** ** | **(#)** | ** ** | **Fiscal Year** | ** ** | **($CAD/Sh)** | ** ** | **Expiration Date** | ** ** | **5% $CAD** | ** ** | **10% $CAD** | ** ** |
| D.C. Tutcher               |       |                                                              | 34,000     |   |   |   | 2.22 | % |   |   | 31.68 |   |   | February 3, 2015 |   |   | 677,395 |   |   | 1,716,651 |   |
| T.L. McGill                |       |                                                              | 20,400     |   |   |   | 1.33 | % |   |   | 31.68 |   |   | February 3, 2015 |   |   | 406,437 |   |   | 1,029,991 |   |
| E.C. Kaitson               |       |                                                              | 11,600     |   |   |   | 0.76 | % |   |   | 31.68 |   |   | February 3, 2015 |   |   | 231,111 |   |   | 585,681 |   |
| M.A. Maki                  |       |                                                              | 11,400     |   |   |   | 0.74 | % |   |   | 31.68 |   |   | February 3, 2015 |   |   | 227,127 |   |   | 575,583 |   |
| R.L. Adams                 |       |                                                              | 10,800     |   |   |   | 0.70 | % |   |   | 31.68 |   |   | February 3, 2015 |   |   | 215,173 |   |   | 545,289 |   |
|                            |            |                                                                   |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

 

20

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***AggregatedOption/SAR Exercises in Last Fiscal Year and Fiscal Year End Option/SAR Values***

| ** **   | ** ** | **Shares Acquired** | ** ** | ** **                | ** ** | **Number of Securities  Underlying Unexercised   Options/SARs At Fiscal  Year-End **(1) | ** ** | **Value of Unexercised In-  The-Money Options/SARS   At Fiscal Year-End** | ** ** |
|--------------|------------|--------------------------|------------|---------------------------|------------|----------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------|------------|
| **Name**     | ** ** | ** **               | ** ** | **on Exercise  (#)** | ** ** | **Value Realized  ($CAD)**                                                                                            | ** ** | **Exercisable  (#)**                                                                                         | ** ** | **Unexercisable  (#)** | ** ** | **Exercisable  ($CAD)** | ** ** | **Unexercisable  ($CAD)** | ** ** |
| D.C. Tutcher |       |                     | —     |                      |       |                                                                                                                       | —     |                                                                                                         |       |   | 575,194 |   |   |   | 214,500 |   |   | 9,826,198 |   |   | 2,622,450 |   |   |
| T.L. McGill  |       |                     | 34,500     |                      |       |                                                                                                                       | 365,788    |                                                                                                         |       |   | 33,200 |   |   |   | 85,100 |   |   | 466,148 |   |   | 938,522 |   |   |
| E.C. Kaitson |       |                     | —     |                      |       |                                                                                                                       |       |                                                                                                         |       |   | 121,420 |   |   |   | 31,400 |   |   | 2,577,113 |   |   | 309,273 |   |   |
| M.A. Maki    |       |                     | —     |                      |       |                                                                                                                       | —     |                                                                                                         |       |   | 46,200 |   |   |   | 54,600 |   |   | 685,031 |   |   | 609,135 |   |   |
| R.L. Adams   |       |                     | 24,900     |                      |       |                                                                                                                       | 237,299    |                                                                                                         |       |   | — |   |   |   | 36,600 |   |   | — |   |   | 373,808 |   |   |
|              |            |                          |            |                           |            |                                                                                                                            |            |                                                                                                              |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

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(1)                The number ofsecurities underlying unexercised options/SARs at May 20, 2005, wereadjusted for a 2-for-1 stock split declared by Enbridge on itsshares.

Enbridgealso maintains a long-term, performance-based stock unit plan (the “PSUPlan”). Under the PSU Plan, participating executives receive annual grants ofPSUs. The initial value of each of these PSUs is equivalent to the market valueof one Enbridge share. Each award may be paid out at the end of a three-yearperformance cycle based on:

1)     the marketvalue of the Enbridge share at the end of the three-year period;

2)     additionalPSUs representing dividends paid during the three-year period; and

3)     Enbridge’stotal shareholder return over a three-year period relative to a peer group of companiesestablished in advance by Enbridge’s Human Resources & Compensation Committee.Payments under the PSU Plan may be increased up to 200% of the original awardwhen Enbridge outperforms its peer group.

If performance fails tomeet threshold performance levels, no payments are made. Enbridge does notissue any shares in connection with the PSU Plan. The compensation expenseassociated with recognizing the fair value of the outstanding stock unitsattributable to our executive officers that participate in the PSU Plan areallocated to us and expensed in our consolidated statements of income. Thefollowing table sets forth the grants made to the Named Executive Officersduring 2005 pursuant to the PSU Plan:

***Long-Term IncentivePlan Awards Table***

| ** **   | ** ** | **Securities, Units** | ** ** | ** **                         | ** ** | **Estimated Future Payouts Under  Non-Securities-Price-Based Plans**  | ** ** |
|--------------|------------|----------------------------|------------|------------------------------------|------------|-------------------------------------------------------------------------------------------|------------|
| **Name**     | ** ** | ** **                 | ** ** | **or Other Rights  (#)** | ** ** | **Performance or Other  Period Until Maturation or Payout** | ** ** | **Threshold**(1)  (#) | ** ** | **Target**(2)  (#) | ** ** | **Maximum**(3)  (#) | ** ** |
| D.C. Tutcher |       |                       | 7,090      |                               |       | January 1, 2005-December 31,  2007                                              |       |   | 284 |   |   |   | 7,090 |   |   |   | 14,180 |   |   |
| T.L. McGill  |       |                       | 2,880      |                               |       | January 1, 2005-December 31,  2007                                              |       |   | 115 |   |   |   | 2,880 |   |   |   | 5,760 |   |   |
| E.C. Kaitson |       |                       | —     |                               |       | January 1, 2005-December 31,  2007                                              |       |   | — |   |   |   | — |   |   |   | — |   |   |
| M.A. Maki    |       |                       | 2,140      |                               |       | January 1, 2005-December 31,  2007                                              |       |   | 86 |   |   |   | 2,140 |   |   |   | 4,280 |   |   |
| R.L. Adams   |       |                       | 2,020      |                               |       | January 1, 2005-December 31, 2007                                               |       |   | 81 |   |   |   | 2,020 |   |   |   | 4,040 |   |   |
|              |            |                            |            |                                    |            |                                                                                           |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

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(1)                “Threshold” refersto the minimum amount payable for a certain level of performance under the PSUPlan.

(2)                “Target” refers tothe amount payable if the specified performance target is reached.

(3)                “Maximum”refers to the maximum payout possible as specified under the PSU Plan.

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***Pension Plan***

The following tables illustrate the benefits payableunder the defined benefit component of Enbridge’s trusteed non-contributorypension plans (the “Plan”), which apply to the Named Executive Officers of thePartnership. The tables illustrate the total annual pension entitlementsassuming the eligibility requirements for an unreduced pension have beensatisfied. Plan benefits that exceed maximum pension rules applicable toregistered plan benefits are paid from the Enbridge supplemental pension plan.Other trusteed pension plans, with varying contribution formulae and benefits,cover the balance of employees.

For service prior to January 1, 2000, the Planprovides a yearly pension payable after age 60 in the normal form(60 percent joint and last survivor) equal to: (a) 1.6 percentof the average of the participant’s highest annual salary during threeconsecutive years out of the last ten years of credited service multiplied by (b) thenumber of credited years of service. The pension is offset, after age 65, by50 percent of the participant’s Social Security benefit, prorated by yearsin which the participant has both credited service and Social Securitycoverage. An unreduced pension is payable if retirement is after age 55 with 30or more years of service, or after age 60. Early retirement reductions apply ifa participant retires and does not meet these requirements. Retirement benefitspaid from the Plan are indexed at 50 percent of the annual increase in theconsumer price index.

For service after December 31,1999, the Plan provides for senior management employees, including the NamedExecutive Officers, a yearly pension payable after age 60 in the normal form(60 percent joint and last survivor) equal to: (a) 2 percent ofthe sum of (i) the average of the participant’s highest annual base salaryduring three consecutive years out of the last ten years of credited serviceand (ii) the average of the participant’s three highest annual performancebonus periods, represented in each period by 50 percent of the actualbonus paid, in respect of the last five years of credited services, multipliedby (b) the number of credited years of service. An unreduced pension ispayable if retirement is after age 55 with 30 or more years of service, orafter age 60. Early retirement reductions apply if a participant retires anddoes not meet these requirements. Retirement benefits paid from the Plan areindexed at 50 percent of the annual increase in the consumer price index.

***Pension Plan Tables***

**ServicePrior to January 1, 2000, before Social Security Offset**

| ** **                 | ** ** | **Years of Credited Service** | ** ** |
|----------------------------|------------|----------------------------------------------|------------|
| **Remuneration(1)**        | ** ** | ** **                                   | ** ** | **10** | ** ** | **15** | ** ** | **20** | ** ** | **25** | ** ** | **30** | ** ** | **35** | ** ** |
| $   200,000 |       | $                                            | 32,000     |   | $ | 48,000 |   | $ | 64,000 |   | $ | 80,000 |   | $ | 96,000 |   | $ | 112,000 |   |
| 250,000                    |       | 40,000                                       |       | 60,000 |   | 80,000 |   | 100,000 |   | 120,000 |   | 140,000 |   |
| 300,000                    |       | 48,000                                       |       | 72,000 |   | 96,000 |   | 120,000 |   | 144,000 |   | 168,000 |   |
| 350,000                    |       | 56,000                                       |       | 84,000 |   | 112,000 |   | 140,000 |   | 168,000 |   | 196,000 |   |
| 400,000                    |       | 64,000                                       |       | 96,000 |   | 128,000 |   | 160,000 |   | 192,000 |   | 224,000 |   |
| 450,000                    |       | 72,000                                       |       | 108,000 |   | 144,000 |   | 180,000 |   | 216,000 |   | 252,000 |   |
| 500,000                    |       | 80,000                                       |       | 120,000 |   | 160,000 |   | 200,000 |   | 240,000 |   | 280,000 |   |
| 550,000                    |       | 88,000                                       |       | 132,000 |   | 176,000 |   | 220,000 |   | 264,000 |   | 308,000 |   |
| 600,000                    |       | 96,000                                       |       | 144,000 |   | 192,000 |   | 240,000 |   | 288,000 |   | 336,000 |   |
| 650,000                    |       | 104,000                                      |       | 156,000 |   | 208,000 |   | 260,000 |   | 312,000 |   | 364,000 |   |
| 700,000                    |       | 112,000                                      |       | 168,000 |   | 224,000 |   | 280,000 |   | 336,000 |   | 392,000 |   |
| 750,000                    |       | 120,000                                      |       | 180,000 |   | 240,000 |   | 300,000 |   | 360,000 |   | 420,000 |   |
| 800,000                    |       | 128,000                                      |       | 192,000 |   | 256,000 |   | 320,000 |   | 384,000 |   | 448,000 |   |
|                            |            |                                              |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

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**ServiceAfter December 31, 1999**

| **Remuneration**(1)   | ** ** | ** ** | ** ** | **10**  | ** ** | **15**  | ** ** | **20**  | ** ** | **25**  | ** ** | **30**  | ** ** | **35** | ** ** |
|-----------------------|------------|------------|------------|---------|------------|---------|------------|---------|------------|---------|------------|---------|------------|--------|------------|
| $   200,000 |       | $          | 40,000     |    | $          | 60,000  |       | $       | 80,000     |    | $          | 100,000 |       | $      | 120,000    |   | $ | 140,000 |   |
| 250,000               |       | 50,000     |       | 75,000  |       | 100,000 |       | 125,000 |       | 150,000 |       | 175,000 |       |
| 300,000               |       | 60,000     |       | 90,000  |       | 120,000 |       | 150,000 |       | 180,000 |       | 210,000 |       |
| 350,000               |       | 70,000     |       | 105,000 |       | 140,000 |       | 175,000 |       | 210,000 |       | 245,000 |       |
| 400,000               |       | 80,000     |       | 120,000 |       | 160,000 |       | 200,000 |       | 240,000 |       | 280,000 |       |
| 450,000               |       | 90,000     |       | 135,000 |       | 180,000 |       | 225,000 |       | 270,000 |       | 315,000 |       |
| 500,000               |       | 100,000    |       | 150,000 |       | 200,000 |       | 250,000 |       | 300,000 |       | 350,000 |       |
| 550,000               |       | 110,000    |       | 165,000 |       | 220,000 |       | 275,000 |       | 330,000 |       | 385,000 |       |
| 600,000               |       | 120,000    |       | 180,000 |       | 240,000 |       | 300,000 |       | 360,000 |       | 420,000 |       |
| 650,000               |       | 130,000    |       | 195,000 |       | 260,000 |       | 325,000 |       | 390,000 |       | 455,000 |       |
| 700,000               |       | 140,000    |       | 210,000 |       | 280,000 |       | 350,000 |       | 420,000 |       | 490,000 |       |
| 750,000               |       | 150,000    |       | 225,000 |       | 300,000 |       | 375,000 |       | 450,000 |       | 525,000 |       |
| 800,000               |       | 160,000    |       | 240,000 |       | 320,000 |       | 400,000 |       | 480,000 |       | 560,000 |       |
|                       |            |            |            |         |            |         |            |         |            |         |            |         |            |        |            |  |  |  |  |  |  |

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(1)                “Remuneration”refers to annual salary and that portion of the annual bonus eligible forinclusion in final average earnings.

Mr. Tutcher accumulates pension credits equal to4.0 percent for each year of service to his tenth anniversary ofemployment with Enbridge.

Forpurposes of computing the total retirement benefit of the Named ExecutiveOfficers, the following table sets forth the service accrued prior toJanuary 1, 2000, (“Pre 2000 Service”) and service accrued afterDecember 31, 1999 (“Post 1999 Service”) by the Named Executive Officers atDecember 31, 2004. These figures include the additional service mentionedin the previous paragraph.

| **Name**     | ** ** | ** ** | ** ** | **Age** | ** ** | **Pre 2000 Service** | ** ** | **Post 1999 Service** | ** ** |
|--------------|------------|------------|------------|---------|------------|--------------------------------|------------|---------------------------------|------------|
| D.C. Tutcher |       |       | 56         |    |       |                           | —     |                            |       |   | 4.58 |   |   |
| T.L. McGill  |       |       | 51         |    |       |                           | —     |                            |       |   | 3.83 |   |   |
| E.C. Kaitson |       |       | 49         |    |       |                           | —     |                            |       |   | 4.58 |   |   |
| M.A. Maki    |       |       | 41         |    |       |                           | 13.32      |                            |       |   | 6.00 |   |   |
| R.L. Adams   |       |       | 41         |    |       |                           | 14.70      |                            |       |   | 4.50 |   |   |

 

***Employment Agreements***

Messrs. Tutcher andKaitson have executive employment agreements with Enbridge. The agreementscommenced on May 11, 2001, and continue until the earlier of (i) avoluntary retirement in accordance with the retirement policies established forsenior employees of Enbridge (ii) a voluntary resignation which is not aconstructive dismissal, or (iii) termination based on disability, death,cause or by either party. The agreements provide that in the event oftermination of employment, the executive agrees to keep confidential allinformation of a confidential or proprietary nature and further agrees not touse such information for personal advantage. The agreements also provide for abase salary, annual reviews, discretionary raises, participation in short andlong-term incentive plans of Enbridge, and severance payments in the amount oftwo years compensation in the event of termination by Enbridge.

 

23

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***Director Compensation***

Enbridge employees who are members of the board ofdirectors of the General Partner of Enbridge Management do not receive anyadditional compensation for serving in those capacities.

During 2005, members of the board of directors of theGeneral Partner and Enbridge Management who are not employees received anaggregate annual fee of $30,000, paid quarterly, plus $1,000 per day for eachmeeting attended of the board of directors or committees of the board. Inaddition, each non-employee director is reimbursed for out-of-pocket expensesin connection with attending meetings of the board of directors or committeesand an additional $500 for meetings requiring out of state travel. The directorwho serves as chairman of the audit committees is paid an additional $7,500 peryear and the director who serves as chairman of the boards is paid anadditional $10,000 per year, paid quarterly.

As of January 1, 2006, the Director CompensationPlan was amended to increase the annual retainer to $75,000 and additionalmeeting fees were eliminated. The retainers paid to the directors serving aschairman of the boards and chairman of the audit committees will remain atcurrent levels. The out of state travel fee will be increased to $1,500. Aspart of this change to the Director Compensation Plan, the directors voted toamend the Corporate Governance Guidelines to incorporate an expectation thatnon-employee directors will hold a personal investment in either or bothEnbridge Energy Partners, L.P. or Enbridge Management, of at least two times theannual board retainer (i.e., 2 X $75,000 = $150,000). Directors would beexpected to achieve the foregoing level of share ownership by the later ofJanuary 1, 2011 or five years from the date they became a director.

The General Partner indemnifies each director foractions associated with being a director to the full extent permitted underDelaware law and maintains errors and omissions insurance.

Messrs. Hambrook and Connelly served on a pricingcommittee in 2005 in connection with public offerings to sell limitedpartnership interest in the Partnership. As compensation for serving on thepricing committee, they each received a fee of $1,000 per meeting.

Messrs. Hambrook andConnelly and Ms. Hesse also served on a special committee during 2005 inconnection with an evaluation of a proposed transaction with an Enbridgeaffiliate. As compensation for serving on the special committee, they eachreceived a fee of $1,000 per meeting and Mr. Hambrook received $3,000 forserving as the chairman of that committee.

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**Item 12.**                 SecurityOwnership of Certain Beneficial Owners and Management

*(a)**          SecurityOwnership of Certain Beneficial Owners*

The following table sets forth information as of February 15,2006, unless otherwise noted, with respect to persons known by EnbridgeManagement to be the beneficial owners of more than 5% of our shares:

| ** **                                                                                                                                      | ** ** | **Listed Shares**(1) | ** ** |
|-------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------|------------|
| **Name and Address of Beneficial Owner**                                                                               | ** ** | ** **                | ** ** | **Number of Shares** | ** ** | **Percent of Class** | ** ** |
| Enbridge Energy  Company, Inc.(1)(2)  1100 Louisiana, Suite 3300  Houston, TX 77002                                                   |       |                      | 2,055,132  |   |   |   | 17.2 | % |   |
| Oppenheimer  Funds, Inc.(3)  Two World Financial Center  225 Liberty Street, 11th Floor  New York, NY 10281                                |       |                      | 714,999    |   |   |   | 6.0 | % |   |
| Goldman,  Sachs & Co.(4)  The Goldman Sachs Group, Inc.  85 Broad St.  New York, NY 10004                                         |       |                      | 968,147    |   |   |   | 8.1 | % |   |
| Kayne Anderson Capital  Advisors, L.P.(5)  Kayne Anderson Capital Advisors, L.P.  1800 Avenue of the Stars, Second Floor  Los Angeles, CA 90067 |       |                      | 1,262,896  |   |   |   | 10.6 | % |   |
| Neuberger  Berman, Inc.(6)  605 3rd Avenue  New York, NY 10158                                                                             |       |                      | 1,812,009  |   |   |   | 15.2 | % |   |
|                                                                                                                                                 |            |                           |            |  |  |  |  |  |  |  |  |

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(1)                As of February 17,2006, there were 11,933,018 issued and outstanding Listed Shares. In all caseswe will vote, or refrain from voting, the Partnership’s i-units that we own inthe manner that the owners of our shares, including our voting shares, vote, orrefrain from voting, their shares through the provisions in the Partnership’spartnership agreement and our limited liability company agreement. The numberof our outstanding shares and the number of the Partnership’s i-units will atall times be equal.

(2)                The GeneralPartner also owns 100% of our voting shares, which are not Listed Shares.

(3)                As per its reporton Schedule 13G filed February 8, 2006, Oppenheimer Funds, Inc. hasshared dispositive power as to all shares indicated, and Oppenheimer CapitalIncome Fund has sole voting power and shared dispositive power as to all sharesincluded. Oppenheimer Funds, Inc. disclaims beneficial ownership of allshares indicated. The address of Oppenheimer Funds, Inc. is Two WorldFinancial Center, 225 Liberty Street, 11th Floor, New York, NY 10281, and theaddress of Oppenheimer Capital Income Fund is 6803 South Tucson Way,Centennial, CO 80112.

(4)                As per its reporton Schedule 13G filed February 1, 2006, Goldman, Sachs & Co.and The Goldman Sachs Group, Inc. has shared voting power and shareddispositive power as to all shares indicated. Goldman, Sachs & Co. andThe Goldman Sachs Group, Inc. each disclaim beneficial ownership of thesecurities beneficially owned by (a) any client accounts with respect towhich Goldman, Sachs & Co. or its employees have voting or investmentdiscretion or both, and (b) certain investment entities, of which asubsidiary of The Goldman Sachs Group, Inc. or Goldman, Sachs &Co. is the general partner, managing general partner or other manager, to theextent interests in such entities are held by persons other than The GoldmanSachs Group, Inc., Goldman, Sachs & Co.or their affiliates. The 

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addressof Goldman, Sachs & Co. and the Goldman Sachs Group, Inc. is85 Broad Street, New York, NY 10004.

(5)                Kayne AndersonCapital Advisors, L.P. and Richard A. Kayne reported shared votingpower and shared dispositive power with respect to all of such shares in itsreport on Form SC 13G filed February 9, 2006. Kayne AndersonCapital Advisors, L.P. disclaims beneficial ownership of the securitiesreported, except those attributable to it by virtue of its general partnerinterests in the limited partnerships. Mr. Kayne disclaims beneficialownership of the securities reported, except those held by him or attributableto him by virtue of his limited partnership interests in the limitedpartnerships, his indirect interest in the interest of Kayne Anderson CapitalAdvisors, L.P. in the limited partnerships, and his ownership of commonstock of the registered investment company.

(6)                As per its reporton Schedule 13G/A filed February 15, 2006, Neuberger Berman, LLC has solevoting power as to 1,564,196 shares and shared dispositive power as to 1,812,009shares. The address of Neuberger Berman, Inc. and Neuberger Berman, LLC is605 Third Avenue, New York, NY 10158-3698.

We do not have any shares that have been approved for issuanceunder an equity compensation plan.

*(b)**          SecurityOwnership of Management and Directors*

Thefollowing table sets forth information as of February 15, 2006, regardingthe beneficial ownership of our Listed Shares by all directors and of executiveofficers Enbridge Management.

| ** **                                                | ** ** | **Enbridge Management Shares**(1) | ** ** |
|-----------------------------------------------------------|------------|---------------------------------------------|------------|
| ** **                                                | ** ** | **Number of Shares**              | ** ** | **Percent of Class** | ** ** |
| J.A. Connelly                                             |       |                                        | —     |   |   |   | — |   |   |
| P.D. Daniel                                               |       |                                        | —     |   |   |   | — |   |   |
| E.C. Hambrook                                             |       |                                        | 1,163.30   |   |   |   | * |   |   |
| M.O. Hesse                                                |       |                                        | 6,966.20   |   |   |   | * |   |   |
| G.K. Petty                                                |       |                                        | 877.80     |   |   |   | * |   |   |
| D.C. Tutcher                                              |       |                                        | 29,306.50  |   |   |   | * |   |   |
| J.R. Bird                                                 |       |                                        | 9,754      |   |   |   | * |   |   |
| L.A. Zupan                                                |       |                                        | —     |   |   |   | — |   |   |
| M.A. Maki                                                 |       |                                        | —     |   |   |   | — |   |   |
| T.L. McGill                                               |       |                                        | 1,238      |   |   |   | * |   |   |
| A.D. Meyer                                                |       |                                        | —     |   |   |   | — |   |   |
| R.L. Adams                                                |       |                                        | —     |   |   |   | — |   |   |
| D.V. Krenz                                                |       |                                        | —     |   |   |   | — |   |   |
| V.D. Yu                                                   |       |                                        | —     |   |   |   | — |   |   |
| J.L. Balko                                                |       |                                        | —     |   |   |   | — |   |   |
| E.C. Kaitson                                              |       |                                        | —     |   |   |   | — |   |   |
| B.A. Stevenson                                            |       |                                        | —     |   |   |   | — |   |   |
| Directors and Executive  Officers as a group (15 persons) |       |                                        | 49,305.80  |   |   |   | * |   |   |

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*                    Less than 1%

(1)                Each beneficialowner has sole voting and investment power with respect to all the sharesattributed to him/her.

26

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**Item 13.**                 CertainRelationships and Related Transactions

**MANAGEMENTARRANGEMENTS AND RELATED AGREEMENTS**

Under the delegation of control agreement, the GeneralPartner delegated, and we assumed, all of the General Partner’s power andauthority to manage the business and affairs of the Partnership and itssubsidiaries subject to certain approval rights retained by the GeneralPartner. At the same time, we entered into an Agency Agreement with EnbridgeManagement Services, L.L.C., our wholly-owned subsidiary, under which EMSagreed to serve as our agent to carry out the ordinary course, day-to-dayactivities of the Partnership under the authority delegated to us by theGeneral Partner.

The Partnership has agreed to reimburse EMS and usunder the delegation of control agreement for any direct and indirect expenseswe or EMS incur to the same extent as it does with respect to the GeneralPartner as general partner. In addition, the Partnership will reimburse EMS andus for any Texas franchise taxes and any other foreign, state and local taxesnot otherwise paid or reimbursed pursuant to the tax indemnification agreementbetween Enbridge and us. The Partnership has also agreed to indemnify andprotect us, EMS and our respective officers and directors in performing thesemanagement and control functions to the same extent as it does with respect tothe General Partner as general partner.

For the years ended December 31, 2005, 2004 and2003, all expenses in connection with the management of the business andaffairs of the Partnership were paid by the Partnership.

Because neither we nor EMS have employees, we haveentered into various service agreements with Enbridge and certain of itssubsidiaries to fulfill our obligations under the delegation of controlagreement and the agency agreement. These service agreements allow EMS and usto obtain from Enbridge and its subsidiaries various administrative,operational, technical and professional services and the use of relatedpersonnel. The Partnership directly reimburses Enbridge and its subsidiariesfor the actual amount of direct and indirect expenses they incur and paymentsthey make on our behalf and that of EMS in connection with the services andpersonnel provided to EMS and us. In other cases, Enbridge allocates to its affiliatesan agreed percentage of the total expenses with respect to a particular type ofservice provided by Enbridge to all of its affiliates, including EMS and us. Ineither case, the Partnership pays directly or reimburses EMS and us for anyamounts that EMS or we incur under the service agreements. The serviceagreements also provide that Enbridge and its affiliates will indemnify EMS andus for certain losses and defend us against certain claims in connection withproviding or failing to provide the agreed services. Similarly, EMS and we haveagreed to indemnify Enbridge and its affiliates for certain losses and defendthem against certain claims as a result of their provision of the agreedservices.

For the years ended December 31,2005, 2004 and 2003, expenses for services and personnel provided under theservices agreements were paid by the Partnership.

**SUPPORTIVEARRANGEMENTS WITH ENBRIDGE**

In connection with ourinitial public offering in October 2002, we entered into a taxindemnification agreement and purchase provisions with Enbridge. Under the taxindemnification agreement, Enbridge has agreed to indemnify us for any taxliability attributable to our formation, our management of the business andaffairs of the Partnership and for any taxes arising out of a transactioninvolving the i-units we own to the extent the transaction does not generatesufficient cash to pay our taxes with respect to such transaction. Under thepurchase provisions, Enbridge has the right to purchase our outstanding Listed Sharesin connection with certain significant events involving the Partnership andalso whenever Enbridge owns more than 80% of our outstanding Listed Shares. Wepaid Enbridge $500,000 in consideration of its obligations under the taxindemnification agreement and purchase provisions.

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**CONFLICTSOF INTEREST AND FIDUCIARY DUTIES**

Conflicts of interest mayarise because of the relationship between Enbridge, the General Partner, thePartnership and us. Our directors and officers have fiduciary duties to manageour business in a manner beneficial to us and to the holders of our shares.However, these fiduciary duties have been modified pursuant to the terms of ourlimited liability company agreement. Simultaneously, some of our directors andofficers are also directors and officers of Enbridge and the General Partnerand have fiduciary duties to manage the business of Enbridge or the GeneralPartner and the Partnership in a manner beneficial to Enbridge and itsshareholders or the General Partner, the Partnership and their respectiveshareholders or unitholders, as the case may be. Furthermore, through itsownership of our voting shares, the General Partner has the sole power to electall of our directors. The resolution of these conflicts of interest may notalways be in our best interest or in the best interest of our shareholders.

**SECURITYOWNERSHIP AND DISTRIBUTIONS**

In connection with our formation on May 14, 2002,we issued the General Partner one voting share in consideration of the GeneralPartner’s initial contribution to us. In connection with our initial publicoffering on October 17, 2002, the General Partner acquired 1,550,000 ofour Listed Shares at a price of $39.00 per share. We make quarterly sharedistributions pursuant to the provisions of our limited liability companyagreement as described in Part II, Item 5 of this Annual Report. At February 17,2006, the General Partner owned approximately 2,055,131 or approximately 17.2%,of our Listed Shares and 1.33, or 100%, of our voting shares.

At February 17, 2006,we owned 11,933,019 i-units, constituting all of the outstanding i-units and anapproximate 17.8% limited partner interest in the Partnership. For furtherdiscussion of Ownership and Distributions as it pertains to the Partnership,please read “Part III, Item 13.” of the Partnership’s Annual Reporton Form 10-K for the year ended December 31, 2005, which is herebyincorporated by reference.

**OTHERRELATIONSHIPS AND RELATED TRANSACTIONS OF THE PARTNERSHIP**

For a discussion of otherrelationships and related transactions as they pertain to the Partnership,please read “Part III, Item 13.” of the Partnership’s Annual Report,which is hereby incorporated by reference.

**Item 14.**                 PrincipalAccountant Fees and Services

Thefollowing table sets forth the aggregate fees billed for professional servicesrendered by PricewaterhouseCoopers LLP, Enbridge Management’s principalindependent auditors, for each of our last two fiscal years.

| ** **          | ** ** | **For the years ended  December 31,** | ** ** |
|---------------------|------------|-----------------------------------------------------------|------------|
| ** **          | ** ** | **2005**                                                  | ** ** | **2004** | ** ** |
| Audit fees(1)       |       | $                                                         | 106,710    |   | $ | 119,850 |   |
| Audit related  fees |       | —                                                    |       | — |   |
| Tax fees            |       | —                                                    |       | — |   |
| All other fees      |       | —                                                    |       | — |   |
| Total               |       | $                                                         | 106,710    |   | $ | 119,850 |   |

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(1)                Audit fees consistof fees billed for professional services rendered for the audit of the consolidatedfinancial statements and review of the interim consolidated financialstatements.

Engagements for services provided byPricewaterhouseCoopers LLP are subject to pre-approval by the Audit, Finance &Risk Committee of our Board of Directors, or services up to $50,000 may be 

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approved by the Chairmanof the Audit, Finance & Risk Committee, under Board of Directorsdelegated authority. All services in 2005 and 2004 were approved by the Audit,Finance & Risk Committee.

All fees, including theamounts shown above, that are billed by PricewaterhouseCoopers LLP for servicesrendered are paid by the Partnership on behalf of Enbridge Management.

**PART IV**

**Item 15.**                 Exhibits,Financial Statement Schedules

The followingdocuments are filed as a part of this report:

*(1)**         FinancialStatements, which are incorporated by reference in Item 8 are includedbeginning on page F-1*

a.                  Report ofPricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.

b.                 ConsolidatedStatements of Income for the years ended December 31, 2005, 2004 and 2003.

c.                  ConsolidatedStatements of Comprehensive Income for the years ended December 31, 2005,2004 and 2003.

d.                 ConsolidatedStatements of Cash Flows for the years ended December 31, 2005, 2004 and2003.

e.                  ConsolidatedStatements of Financial Position for the years ended December 31, 2005 and2004.

f.                    ConsolidatedStatements of Partners’ Capital for the years ended December 31, 2005,2004 and 2003.

g.                  Notes to theConsolidated Financial Statements.

*(2)**         FinancialStatement Schedules.*

All schedules havebeen omitted because they are not applicable, any required information is shownin the Consolidated Financial Statements or Notes thereto, or the requiredinformation is immaterial.

*(3)**         Exhibits.*

Reference is made to the “Index of Exhibits” followingthe signature page, which is hereby incorporated into this Item.

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**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) ofthe Securities Exchange Act of 1934, the Registrant has duly caused this Reportto be signed on its behalf by the undersigned, thereunto duly authorized.

|   | ENBRIDGE ENERGY MANAGEMENT,  LLC

(Registrant) |
|--------|------------------------------------------------|
|   | By:                                            |   | /s/  DAN C. TUTCHER |
|   |                                           |   | Dan C. Tutcher |
|   |                                           |   | *(President)* |

 

Date: February 22 , 2006

Pursuant to the requirements of the SecuritiesExchange Act of 1934, this Report has been signed below on February 22,2006, by the following persons on behalf of the Registrant and in thecapacities indicated.

|                                | **Name** | ** **                    | ** ** | ** ** | **Title** | ** ** | ** ** | ** ** | **Date** | ** ** | ** ** |
|--------------------------------|----------|-------------------------------|------------|------------|-----------|------------|------------|------------|----------|------------|------------|
| /s/  DAN C.  TUTCHER |     | President and  Director       |       |       |      |
|  DAN  C. TUTCHER          |     | (Principal Executive Officer) |       |       |      |
| /s/ M.A. MAKI             |     | Vice President—Finance   |       |       |      |
| M.A. MAKI                      |     | (Principal Financial Officer) |       |       |      |
| /s/ J.A. CONNELLY    |     | Director                      |       |       |      |
| J.A. CONNELLY                  |     |                          |       |       |      |
| /s/ G.K. PETTY            |     | Director                      |       |       |      |
| G.K. PETTY                     |     |                          |       |       |      |
| /s/ M.O. HESSE            |     | Director                      |       |       |      |
| M.O. HESSE                     |     |                          |       |       |      |
| /s/ E.C. HAMBROOK         |     | Director                      |       |       |      |
| E.C. HAMBROOK                  |     |                          |       |       |      |
| /s/ P.D. DANIEL           |     | Director                      |       |       |      |
| P.D. DANIEL                    |     |                          |       |       |      |
| /s/ J.R. BIRD             |     | Director                      |       |       |      |
| J.R. BIRD                      |     |                          |       |       |      |

 

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**INDEX TO EXHIBITS**

Eachexhibit identified below is filed as a part of this annual report. Exhibitsincluded in this filing are designated by an asterisk (“*”); all exhibits notso designated are incorporated by reference to a prior filing as indicated. Exhibitsdesignated with a “+” constitute a management contract or compensatory planarrangement required to be filed as an exhibit to this report pursuant to Item15(c) of Form 10-K.

| Exhibit  Number | ** ** | **Description** |
|-----------------|------------|-----------------|
|            | **3.1**    |            |   | Certificate  of Formation of Enbridge Energy Management, L.L.C. (Exhibit 3.1 to  Enbridge Management’s Registration Statement on Form S-1 filed on  May 31, 2002). |
|            | **3.2**    |            |   | Amended  and Restated Limited Liability Company Agreement of Enbridge Energy  Management, L.L.C. (including Purchase Provisions adopted by Enbridge)  (Exhibit 3.2 to Enbridge Management’s Quarterly Report on Form 10-Q  filed on November 25, 2002). |
|            | **10.1**   |            |   | Tax  Indemnification Agreement (Exhibit 10.1 to Enbridge Management’s  Quarterly Report on Form 10-Q filed on November 25, 2002). |
|            | **10.2**   |            |   | Delegation  of Control Agreement (Exhibit 10.2 to Enbridge Management’s Quarterly  Report on Form 10-Q filed on November 25, 2002). |
|            | **10.2.1** |            |   | First  Amending Agreement to the Delegation of Control Agreement dated  October 17, 2002 (Exhibit 10.1 to Enbridge Management’s Quarterly  Report on Form 10-Q filed on May 5, 2005). |
|            | **10.3**   |            |   | Amended  and Restated Treasury Services Agreement (Exhibit 10.3 to Enbridge  Management’s Quarterly Report on Form 10-Q filed on  November 25, 2002). |
|            | **10.4**   |            |   | Operational  Services Agreement (Exhibit 10.4 to Enbridge Management’s Quarterly  Report on Form 10-Q filed on November 25, 2002). |
|            | **10.5**   |            |   | General  and Administrative Services Agreement (Exhibit 10.5 to Enbridge  Management’s Quarterly Report on Form 10-Q filed on  November 25, 2002). |
|            | **10.6**   | **+**           |   | Executive  Employment Agreement, dated May 11, 2001, between Dan C. Tutcher, as  Executive, and Enbridge Inc., as Corporation (Exhibit 10.26 to the  Partnership’s Annual Report on Form 10-K filed on March 28,  2003). |
|            | **10.7**   | **+**           |   | Executive  Employment Agreement, dated May 11, 2001, between E. Chris Kaitson, as  Executive, and Enbridge Inc., as Corporation (Exhibit 10.27 to the  Partnership’s Annual Report on Form 10-K filed on March 28,  2003). |
|            | **10.8**   |            |   | First  Amending Agreement to the Delegation of Control Agreement dated as of  February 21, 2005 (Exhibit 10.1 to Enbridge Management’s Quarterly  Report on Form 10-Q filed May 5, 2005). |
|            | **14.1**   |            |   | Code  of Ethics for Senior Financial Officers (Exhibit 14.1 to Enbridge  Management’s Annual Report on Form 10-K filed on March 12,  2004). |
|            | **21.1**   |            |   | Subsidiaries  of the Registrant (Exhibit 21.1 to Enbridge Management’s Annual Report  on Form 10-K filed on March 12, 2004). |
|            | **31.1**   | *****           |   | Certification  of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley  Act of 2002. |
|            | **31.2**   | *****           |   | Certification  of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley  Act of 2002. |
|            | **32.1**   | *****           |   | Certification  of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley  Act of 2002. |
|            | **32.2**   | *****           |   | Certification  of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley  Act of 2002. |
|            | **99.1**   |            |   | Charter  of the Audit, Finance & Risk Committee of Enbridge Energy  Management, L.L.C. (Exhibit 99.1 to Enbridge Management’s Annual Report  on Form 10-K filed on February 25, 2005.) |
|            | **99.2**   | *****           |   | Enbridge  Energy Partners, L.P. Annual Report on Form 10-K for the year  ended December 31, 2005. |

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Copies of Exhibits may beobtained upon written request of any shareholder to Investor Relations,Enbridge Energy Management, L.L.C., 1100 Louisiana Street, Suite 3300,Houston, Texas 77002.

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**INDEXTO CONSOLIDATED FINANCIAL STATEMENTS,SUPPLEMENTARY INFORMATION ANDFINANCIAL STATEMENT SCHEDULES**

**ENBRIDGEENERGY MANAGEMENT, L.L.C.**

**FinancialStatements**

|                                                                                                                         | ** ** | **Page** | ** ** |
|-------------------------------------------------------------------------------------------------------------------------|------------|----------|------------|
| Report of Independent Registered Public Accounting  Firm                                                                |       |     | F-2        |   |   |
| Consolidated Statements of Income for each of the  years ended December 31, 2005, 2004 and 2003                    |       |     | F-4        |   |   |
| Consolidated Statements of Comprehensive Income for  each of the years ended December 31, 2005, 2004 and 2003      |       |     | F-5        |   |   |
| Consolidated Statements of Cash Flows for each of the  years ended December 31, 2005, 2004 and 2003                |       |     | F-6        |   |   |
| Consolidated Statements of Financial Position as of  December 31, 2005 and 2004                                    |       |     | F-7        |   |   |
| Consolidated  Statement of Stockholders’ Equity for each of the years ended  December 31, 2005, 2004 and 2003 |       |     | F-8        |   |   |
| Notes to the  Consolidated Financial Statements                                                                         |       |     | F-9        |   |   |

 

**FINANCIAL STATEMENT SCHEDULES**

Financial statement schedules not included in thisReport have been omitted because they are not applicable. Any requiredinformation is shown in the consolidated financial statements or notes thereto,or the required information is immaterial.

F-1

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**Reportof Independent Registered Public Accounting Firm**

To the Board of Directors and Shareholders of EnbridgeEnergy Management, L.L.C.

We have completedintegrated audits of Enbridge Energy Management, L.L.C.’s 2005 and 2004consolidated financial statements and of its internal control over financialreporting as of December 31, 2005 and an audit of its 2003 consolidatedfinancial statements in accordance with the standards of the Public CompanyAccounting Oversight Board (United States). Our opinions, based on our audits,are presented below.

*Consolidatedfinancial statements*

In our opinion, theaccompanying consolidated financial statements listed in the accompanying indexpresent fairly, in all material respects, the financial position of EnbridgeEnergy Management L.L.C. and its subsidiary (the ‘‘Company’’) at December 31,2005 and 2004, and the results of their operations and their cash flows foreach of the three years in the period ended December 31, 2005 inconformity with accounting principles generally accepted in the United Statesof America. These financial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these financialstatements based on our audits. We conducted our audits of these statements inaccordance with the standards of the Public Company Accounting Oversight Board(United States). Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit of financial statements includes examining, ona test basis, evidence supporting the amounts and disclosures in the financialstatements, assessing the accounting principles used and significant estimatesmade by management, and evaluating the overall financial statementpresentation. We believe that our audits provide a reasonable basis for ouropinion.

*Internal controlover financial reporting*

Also, in our opinion, management’s assessment,included in Management’s Report on Internal Control Over Financial Reportingappearing under Item 9A, that the Company maintained effective internal controlover financial reporting as of December 31, 2005 based on criteriaestablished in *Internal Control—Integrated Framework*issued bythe Committee of Sponsoring Organizations of the Treadway Commission (‘‘COSO’’),is fairly stated, in all material respects, based on those criteria. Furthermore,in our opinion, the Company maintained, in all material respects, effectiveinternal control over financial reporting as of December 31, 2005, basedon *InternalControl—Integrated Framework*issued by the COSO. The Company’smanagement is responsible for maintaining effective internal control over financialreporting and for its assessment of the effectiveness of internal control overfinancial reporting. Our responsibility is to express opinions on management’sassessment and on the effectiveness of the Company’s internal control overfinancial reporting based on our audit. We conducted our audit of internalcontrol over financial reporting in accordance with the standards of the PublicCompany Accounting Oversight Board (United States). Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whethereffective internal control over financial reporting was maintained in allmaterial respects. An audit of internal control over financial reportingincludes obtaining an understanding of internal control over financial reporting,evaluating management’s assessment, testing and evaluating the design andoperating effectiveness of internal control, and performing such otherprocedures as we consider necessary in the circumstances. We believe that ouraudit provides a reasonable basis for our opinions.

A company’s internal control over financial reportingis a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles. A company’sinternal control over financial reporting includes those policies andprocedures that (i) pertain to the maintenance 

F-2

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of records that, inreasonable detail, accurately and fairly reflect the transactions anddispositions of the assets of the company; (ii) provide reasonableassurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accountingprinciples, and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directors of thecompany; and (iii) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of thecompany’s assets that could have a material effect on the financial statements.

Because of its inherentlimitations, internal control over financial reporting may not prevent ordetect misstatements. Also, projections of any evaluation of effectiveness tofuture periods are subject to the risk that controls may become inadequatebecause of changes in conditions, or that the degree of compliance with thepolicies or procedures may deteriorate.

PricewaterhouseCoopers LLP

Houston, TexasFebruary 22, 2006

F-3

----

**ENBRIDGEENERGY MANAGEMENT, L.L.C.**

**CONSOLIDATEDSTATEMENTS OF INCOME**

| ** **                                                            | ** ** | **For the Year Ended December 31,**                                  | ** ** |
|-----------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------|------------|
| ** **                                                            | ** ** | **2005**                                                                                      | ** ** | **2004** | ** ** | **2003** | ** ** |
| ** **                                                            | ** ** | **(dollars and shares in millions,  except per share amounts)** | ** ** |
| Equity income from investment in Enbridge Energy  Partners, L.P.      |       | $                                                                                             | 12.0       |   | $ | 21.6 |   | $ | 18.9 |   |
| Gain on issuance  of units by Enbridge Energy Partners, L.P. (Note 4) |       | 10.3                                                                                          |       | 7.2 |   | 16.2 |   |
| Income before  income tax expense                                     |       | 22.3                                                                                          |       | 28.8 |   | 35.1 |   |
| Income tax  expense (Note 6)                                          |       | (9.9                                                                                          | )          | (10.1 | ) | (12.3 | ) |
| Net income                                                            |       | $                                                                                             | 12.4       |   | $ | 18.7 |   | $ | 22.8 |   |
| Net income per  share, basic and diluted                              |       | $                                                                                             | 1.10       |   | $ | 1.78 |   | $ | 2.35 |   |
| Weighted average shares  outstanding                                  |       | 11.3                                                                                          |       | 10.5 |   | 9.7 |   |

 

The accompanying notes are an integral part of these consolidated financial statements.

F-4

----

**ENBRIDGEENERGY MANAGEMENT, L.L.C.**

**CONSOLIDATEDSTATEMENTS OF COMPREHENSIVE INCOME**

| ** **                                                                                                                        | ** ** | **For the Year Ended December 31,** | ** ** |
|-----------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------|------------|
| ** **                                                                                                                        | ** ** | **2005**                                                     | ** ** | **2004** | ** ** | **2003** | ** ** |
| ** **                                                                                                                        | ** ** | **(dollars in millions)**                          | ** ** |
| Net income                                                                                                                        |       | $                                                            | 12.4       |   | $ | 18.7 |   | $ | 22.8 |   |
| Equity in other  comprehensive loss of Enbridge Energy Partners, L.P., net of tax benefit of  $12.6, $3.5, and $4.4, respectively |       | (19.8                                                        | )          | (6.7 | ) | (5.2 | ) |
| Comprehensive (loss)  income                                                                                                      |       | $                                                            | (7.4       | ) | $ | 12.0 |   | $ | 17.6 |   |

 

The accompanying notes are an integral part of these consolidated financial statements.

F-5

----

**ENBRIDGEENERGY MANAGEMENT, L.L.C.CONSOLIDATED STATEMENTS OF CASH FLOWS**

| ** **                                                                    | ** ** | **For the Year Ended  December 31,** | ** ** |
|-------------------------------------------------------------------------------|------------|----------------------------------------------------------|------------|
| ** **                                                                    | ** ** | **2005**                                                 | ** ** | **2004** | ** ** | **2003** | ** ** |
| ** **                                                                    | ** ** | **(in millions)**                                   | ** ** |
| Cash provided from  operating activities                                      |       |                                                     |       |   |   |   |   |
| Net income                                                                    |       | $                                                        | 12.4       |   | $ | 18.7 |   | $ | 22.8 |   |
| Adjustments to reconcile  net income to cash flows from operating activities: |       |                                                     |       |   |   |   |   |
| Equity income from investment in Enbridge Energy  Partners, L.P.              |       | (12.0                                                    | )          | (21.6 | ) | (18.9 | ) |
| Gain on issuance of units by Enbridge Energy  Partners, L.P.                  |       | (10.3                                                    | )          | (7.2 | ) | (16.2 | ) |
| Income tax expense                                                            |       | 9.9                                                      |       | 10.1 |   | 12.3 |   |
| Net cash flows  from operating activities                                     |       | —                                                   |       | — |   | — |   |
| Net cash flows  from investing activities                                     |       | —                                                   |       | — |   | — |   |
| Net cash flows  from financing activities                                     |       | —                                                   |       | — |   | — |   |
| Net change in  cash and cash equivalents                                      |       | —                                                   |       | — |   | — |   |
| Cash and cash  equivalents at beginning of period                             |       | —                                                   |       | — |   | — |   |
| Cash and cash  equivalents at end of period                                   |       | $                                                        | —     |   | $ | — |   | $ | — |   |

 

The accompanying notes are an integral part of these consolidated financial statements.

F-6

----

**ENBRIDGEENERGY MANAGEMENT, L.L.C.**

**CONSOLIDATEDSTATEMENTS OF FINANCIAL POSITION**

| ** **                                                                                                 | ** ** | **December 31,**               | ** ** |
|------------------------------------------------------------------------------------------------------------|------------|-------------------------------------|------------|
| ** **                                                                                                 | ** ** | **2005**                            | ** ** | **2004** | ** ** |
| ** **                                                                                                 | ** ** | **(dollars in millions)** | ** ** |
| **ASSETS**                                                                                                 |       |                                |       |   |   |
| Investment in Enbridge Energy Partners, L.P.                                                               |       | $                                   | 366.5      |   | $ | 376.6 |   |
|                                                                                                       |       | $                                   | 366.5      |   | $ | 376.6 |   |
| **LIABILITY AND STOCKHOLDERS’ EQUITY**                                                                |       |                                |       |   |   |
| Deferred income tax liability (Note 6)                                                                |       | $                                   | 13.4       |   | $ | 16.1 |   |
| Stockholders’  equity (Note 3)                                                                   |       |                                |       |   |   |
| Voting shares—unlimited authorized; 1.30 in 2005 and  1.21 in 2004 issued and outstanding             |       | —                              |       | — |   |
| Listed shares—unlimited authorized; 11,704,947 in  2005 and 10,902,408 in 2004 issued and outstanding |       | 454.0                               |       | 412.5 |   |
| Accumulated  deficit                                                                                       |       | (66.3                               | )          | (37.2 | ) |
| Accumulated other  comprehensive loss                                                                      |       | (34.6                               | )          | (14.8 | ) |
|                                                                                                       |       | 353.1                               |       | 360.5 |   |
|                                                                                                       |       | $                                   | 366.5      |   | $ | 376.6 |   |

 

The accompanying notes are an integral part of these consolidated financial statements.

F-7

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**ENBRIDGE ENERGY MANAGEMENT, L.L.C. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY**

| ** **                                                            | ** ** | **For the Years Ended December 31,** | ** ** |
|-----------------------------------------------------------------------|------------|---------------------------------------------------------------|------------|
| ** **                                                            | ** ** | **2005**                                                      | ** ** | **2004** | ** ** | **2003** | ** ** |
| ** **                                                            | ** ** | **Shares**                                                    | ** ** | **Amount** | ** ** | **Shares** | ** ** | **Amount** | ** ** | **Shares** | ** ** | **Amount** | ** ** |
| ** **                                                            | ** ** | **(dollars in millions)**                           | ** ** |
| **Voting shares**                                                     |       |                                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning balance                                                     |       | 1.21                                                          |       |   | $ | — |   |   | 1.12 |   |   | $ | — |   |   | 1.02 |   |   | $ | — |   |   |
| Issuance of voting shares to Enbridge Energy  Company, Inc.      |       | —                                                        |       |   | — |   |   | — |   |   | — |   |   | — |   |   | — |   |   |
| Share dividends (Note 3)                                              |       | 0.09                                                          |       |   | — |   |   | 0.09 |   |   | — |   |   | 0.10 |   |   | — |   |   |
| Ending balance                                                        |       | 1.30                                                          |       |   | — |   |   | 1.21 |   |   | — |   |   | 1.12 |   |   | — |   |   |
| **Listed shares**                                                     |       |                                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning balance                                                     |       | 10,902,408                                                    |       |   | 412.5 |   |   | 10,062,169 |   |   | 374.2 |   |   | 9,228,654 |   |   | 338.9 |   |   |
| Initial public offering of Listed Shares                              |       | —                                                        |       |   | — |   |   | — |   |   | — |   |   | — |   |   | (0.1 | ) |   |
| Share dividends (Note 3)                                              |       | 802,539                                                       |       |   | 41.5 |   |   | 840,239 |   |   | 38.3 |   |   | 833,515 |   |   | 35.4 |   |   |
| Ending balance                                                        |       | 11,704,947                                                    |       |   | 454.0 |   |   | 10,902,408 |   |   | 412.5 |   |   | 10,062,169 |   |   | 374.2 |   |   |
| **Accumulated deficit**                                               |       |                                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning balance                                                     |       |                                                          |       |   | (37.2 | ) |   |   |   |   | (17.6 | ) |   |   |   |   | (5.0 | ) |   |
| Net income                                                            |       |                                                          |       |   | 12.4 |   |   |   |   |   | 18.7 |   |   |   |   |   | 22.8 |   |   |
| Share dividends (Note 3)                                              |       |                                                          |       |   | (41.5 | ) |   |   |   |   | (38.3 | ) |   |   |   |   | (35.4 | ) |   |
| Ending balance                                                        |       |                                                          |       |   | (66.3 | ) |   |   |   |   | (37.2 | ) |   |   |   |   | (17.6 | ) |   |
| **Accumulated other comprehensive  loss**                             |       |                                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning balance                                                     |       |                                                          |       |   | (14.8 | ) |   |   |   |   | (8.1 | ) |   |   |   |   | (2.9 | ) |   |
| Equity in other comprehensive loss of Enbridge  Energy Partners, L.P. |       |                                                          |       |   | (19.8 | ) |   |   |   |   | (6.7 | ) |   |   |   |   | (5.2 | ) |   |
| Ending balance                                                        |       |                                                          |       |   | (34.6 | ) |   |   |   |   | (14.8 | ) |   |   |   |   | (8.1 | ) |   |
| **Total stockholders’ equity**                                   |       |                                                          |       |   | $ | 353.1 |   |   |   |   |   | $ | 360.5 |   |   |   |   |   | $ | 348.5 |   |   |

 

The accompanying notes are an integral part of these consolidated financial statements.

F-8

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**ENBRIDGE ENERGY MANAGEMENT, L.L.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**1.**                 GENERAL

Enbridge EnergyManagement, L.L.C. and its subsidiary, referred to herein as “we,” “us,” “our,”the “Company,” or “Enbridge Management”, is a publicly traded Delaware limitedliability company that was formed on May 14, 2002. Enbridge Management’sListed Shares (“Listed Shares”) are traded on the New York Stock Exchange (“NYSE”)under the symbol “EEQ.” We are a limited partner of Enbridge Energy Partners,L.P. (the “Partnership”) through our ownership of i-units, a special class ofthe Partnership’s limited partner interests. The Partnership’s Class Acommon units are traded on the NYSE under the symbol “EEP.” By agreement withthe Partnership and its general partner, Enbridge Energy Company, Inc., (“theGeneral Partner”), we manage the Partnership’s business and affairs. TheGeneral Partner is an indirect, wholly-owned subsidiary ofEnbridge Inc. (“Enbridge”), an energy company based in Calgary, Alberta. TheGeneral Partner owns 1.30 or 100% of our Voting shares, as well as 2,015,852Listed Shares, or 17.2%, while the remaining 9,689,095 of our Listed Shares, or82.8%, were held by the public at December 31, 2005.

**2.**                 SUMMARYOF SIGNIFICANT ACCOUNTING POLICIES

We prepare ourconsolidated financial statements in accordance with accounting principlesgenerally accepted in the United States of America. Our preparation of theseconsolidated financial statements requires us to make estimates and assumptionsthat affect the reported amount of assets, liabilities, revenues and expenses,and the disclosure of contingent assets and liabilities. We evaluate theseestimates utilizing historical experience, consultation with experts and othermethods we consider reasonable in the circumstances. Nevertheless, actualresults may differ significantly from these estimates. We record the effect ofany revisions to these estimates in our consolidated financial statements inthe period in which the facts that give rise to the revision become known.

***Principles ofconsolidation***

The consolidated financialstatements include the accounts of Enbridge Management and its wholly-ownedsubsidiary, Enbridge Management Services, L.L.C., on a consolidated basis. Allsignificant intercompany transactions and balances have been eliminated inconsolidation.

***Accounting for investment in Enbridge Energy Partners,L.P.***

We use the equity methodof accounting for our ownership in the Partnership because we exercisesignificant influence over the Partnership per a delegation of controlagreement. Our share of earnings of the Partnership is recorded in the periodin which it is earned. As of December 31, 2005, 2004 and 2003, we ownedapproximately 17.5%, 18.1%, and 18.2% in the Partnership, respectively.

***Gain on issuance of units by Enbridge Energy Partners,L.P.***

We recognize a gain orloss when our ownership interest in the Partnership is diluted. This occurswhen the Partnership issues additional Class A common units and we do notparticipate in the issuance. To the extent the new issuance price per unit isgreater than or less than our average cost per unit, a gain/(loss) isrecognized.

F-9

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**ENBRIDGE ENERGY MANAGEMENT, L.L.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

***Net income per share***

Both basic and dilutedearnings per share are computed based on the weighted-average number ofshares outstanding during each period. There are no securities outstanding thatmay be converted into or exercised for our shares.

***Income taxes***

We are a limited liability company that has elected tobe treated as a corporation for federal income tax purposes. Deferred incometax assets and liabilities are recognized for temporary differences between thebasis of our assets and liabilities for financial reporting and tax purposes.Changes in tax legislation are included in the relevant computations in theperiod in which such changes are effective. Currently, the only temporarydifference (and associated deferred tax expense) results from recording ourequity in the earnings of the Partnership which will not become taxable untilthe Partnership is liquidated, or the i-units are otherwise monetized.

We are a party to a tax indemnification agreement withEnbridge. Pursuant to this tax indemnification agreement, Enbridge agreed toindemnify us from any tax liability attributable to our formation or ourmanagement of the business and affairs of the Partnership, and from any taxesarising out of a transaction involving the i-units owned to the extent thetransaction does not generate sufficient cash to pay our taxes with respect tosuch transaction in each case, other than any Texas franchise taxes and anyother similar capital-based foreign, state or local taxes that are required tobe paid or reimbursed by the Partnership under the delegation of controlagreement.

The delegation of controlagreement with the General Partner was amended effective February 21,2005. The effect of the amendment is that the General Partner bears theeconomic impact for our taxes only in the event we do not have sufficient cashto pay them. As a result, we began accruing state income taxes in 2005 inaddition to federal income tax. The effective tax rate used in computing the incometax provision in 2005 is 37.3%, which represents the federal statutory rate of35.0% and the effective state rate of 2.3% (before the impact of the increasein the state tax rate on the cumulative differences between book and taxablenet income).

***Comprehensive income***

Comprehensive incomediffers from net income due to the equity in other comprehensive (loss) incomeof the Partnership.

***New Accounting Pronouncements***

**AccountingChanges and Error Corrections**

In May 2005, the FASBissued Statement of Financial Accounting Standards No. 154, *Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20and FASB Statement No. 3*. Under this statement, voluntarychanges in accounting principle are required to be applied retrospectively forthe direct effects of a change to prior periods’ financial statements, unlesssuch application is impracticable. Retrospective application refers toreflecting a change in accounting principle in the financial statements ofprior periods as if the principle had always been used. When retrospectiveapplication is determined to be impracticable, this statement requires the newaccounting principle to be applied to the balances of assets and liabilities asof the beginning of the earliest period for which retrospective treatment is 

F-10

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**ENBRIDGE ENERGY MANAGEMENT, L.L.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

practicablewith a corresponding adjustment to the opening balance of retained earnings.This statement retains the guidance in APB Opinion No. 20 for reportingthe corrections of errors and changes in accounting estimates. This statementis effective for accounting changes and corrections of errors made in fiscalyears beginning after December 15, 2005, with early adoption permitted.Our adoption of this statement will affect our consolidated financialstatements for any changes in accounting principle we may make in the future,and new pronouncements we adopt that do not provide transition provisions.

**3.**                 SHAREDISTRIBUTIONS

Our authorized capital structure consists of twoclasses of interests: (1) Listed Shares, which represent limited liabilitycompany interests with limited voting rights, and (2) Voting Shares, allof which are held by the General Partner. Prior to our October 17, 2002initial public offering of Listed Shares, the issued capitalization consistedof cash contributed by the General Partner for one voting share.

We make share distributions at the same time that thePartnership declares and makes cash distributions to its General Partner andthe holders of its common units, which occurs on a quarterly basis. We do not,however, receive distributions of cash in respect of the i-units we own and donot otherwise have any cash flow attributable to our ownership of the i-units.Instead, when the Partnership makes distributions of cash to its generalpartner and holders of its common units, the number of i-units we own increasesautomatically under the Partnership’s partnership agreement. The amount of thisincrease is calculated by dividing the amount of the cash distribution paid bythe Partnership on each of its common units by the average closing price of oneof our Listed Shares on the NYSE as determined for a 10-trading dayperiod ending on the trading day immediately prior to the ex-dividend date forour shares multiplied by the number of shares outstanding on the record date. Concurrentlywith the increase in the number of i-units that we own, we make sharedistributions, with the result that the number of our shares, that are thenoutstanding, equal the number of i-units that we own in the Partnership.

F-11

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**ENBRIDGE ENERGY MANAGEMENT, L.L.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

Thefollowing table sets forth the share distributions, as approved by our Board ofDirectors for each period in the years ended December 31, 2005, 2004 and2003.

| **Dividend  Declaration Date** | ** ** | ** **              | ** ** | **Dividend  Payment Date** | ** ** | **Record Date** | ** ** | **Distribution  per Unit  of the  Partnership** | ** ** | **Average  Closing  Price of  the Listed   Shares** | ** ** | **Additional  i-units  owned** | ** ** | **Listed  Shares  distributed  to Public** | ** ** | **Listed  Shares  distributed  to General  Partner** | ** ** |
|-------------------------------------|------------|-------------------------|------------|---------------------------------|------------|----------------------|------------|-----------------------------------------------------------|------------|--------------------------------------------------------------------|------------|--------------------------------|------------|--------------------------------------------|------------|-----------------------------------------------------------|------------|
| **2005**                            |       |                    |       |                            |       |                 |       |                                                      |       |                                                               |       |                           |       |                                       |       |                                                      |       |   |   |   |   |   |   |   |   |
| October 26, 2005               |       | November 14,  2005 |       | November 3,  2005          |       |                 | $          | 0.925                                                     |       |                                                               |       | $                              | 51.28      |                                       |       |                                                      | 207,393    |   |   |   | 171,675 |   |   |   | 35,718 |   |   |
| July 28, 2005                  |       | August 12,  2005   |       | August 5,  2005            |       |                 | $          | 0.925                                                     |       |                                                               |       | $                              | 54.67      |                                       |       |                                                      | 191,301    |   |   |   | 158,355 |   |   |   | 32,946 |   |   |
| April 25, 2005                 |       | May 13,  2005      |       | May 4,  2005               |       |                 | $          | 0.925                                                     |       |                                                               |       | $                              | 50.12      |                                       |       |                                                      | 204,865    |   |   |   | 169,583 |   |   |   | 35,282 |   |   |
| January 24, 2005               |       | February 14,  2005 |       | February 3,  2005          |       |                 | $          | 0.925                                                     |       |                                                               |       | $                              | 50.68      |                                       |       |                                                      | 198,980    |   |   |   | 164,711 |   |   |   | 34,269 |   |   |
|                                |       |                    |       |                            |       |                 |       |                                                      |       |                                                               |       |                           |       |                                       | 802,539    |                                                      |       |   | 664,324 |   |   |   | 138,215 |   |   |
| **2004**                            |       |                    |       |                            |       |                 |       |                                                      |       |                                                               |       |                           |       |                                       |       |                                                      |       |   |   |   |   |   |   |   |   |
| October 22, 2004               |       | November 12,  2004 |       | November 1,  2004          |       |                 | $          | 0.925                                                     |       |                                                               |       | $                              | 43.98      |                                       |       |                                                      | 224,576    |   |   |   | 185,899 |   |   |   | 38,677 |   |   |
| July 22, 2004                  |       | August 13,  2004   |       | August 2,  2004            |       |                 | $          | 0.925                                                     |       |                                                               |       | $                              | 43.89      |                                       |       |                                                      | 220,412    |   |   |   | 182,452 |   |   |   | 37,960 |   |   |
| April 26, 2004                 |       | May 14,  2004      |       | May 5,  2004               |       |                 | $          | 0.925                                                     |       |                                                               |       | $                              | 45.97      |                                       |       |                                                      | 206,253    |   |   |   | 170,732 |   |   |   | 35,521 |   |   |
| January 22, 2004               |       | February 13,  2004 |       | February 2,  2004          |       |                 | $          | 0.925                                                     |       |                                                               |       | $                              | 49.25      |                                       |       |                                                      | 188,998    |   |   |   | 156,448 |   |   |   | 32,550 |   |   |
|                                |       |                    |       |                            |       |                 |       |                                                      |       |                                                               |       |                           |       |                                       | 840,239    |                                                      |       |   | 695,531 |   |   |   | 144,708 |   |   |
| **2003**                            |       |                    |       |                            |       |                 |       |                                                      |       |                                                               |       |                           |       |                                       |       |                                                      |       |   |   |   |   |   |   |   |   |
| October 22, 2003               |       | November 14,  2003 |       | November 4,  2003          |       |                 | $          | 0.925                                                     |       |                                                               |       | $                              | 46.60      |                                       |       |                                                      | 196,417    |   |   |   | 162,590 |   |   |   | 33,827 |   |   |
| July 23, 2003                  |       | August 14,  2003   |       | August 4,  2003            |       |                 | $          | 0.925                                                     |       |                                                               |       | $                              | 46.63      |                                       |       |                                                      | 191,910    |   |   |   | 158,859 |   |   |   | 33,051 |   |   |
| April 24, 2003                 |       | May 15,  2003      |       | May 2,  2003               |       |                 | $          | 0.925                                                     |       |                                                               |       | $                              | 39.84      |                                       |       |                                                      | 219,501    |   |   |   | 181,698 |   |   |   | 37,803 |   |   |
| January 23, 2003               |       | February 14,  2003 |       | February 4,  2003          |       |                 | $          | 0.925                                                     |       |                                                               |       | $                              | 37.82      |                                       |       |                                                      | 225,687    |   |   |   | 186,818 |   |   |   | 38,869 |   |   |
|                                |       |                    |       |                            |       |                 |       |                                                      |       |                                                               |       |                           |       |                                       | 833,515    |                                                      |       |   | 689,965 |   |   |   | 143,550 |   |   |

 

We had non-cash operating activities in the form ofi-units distributed to us by the Partnership and corresponding non-cashfinancing activities in the form of our share distributions to the ListedShareholders in amounts of $41.5 million, $38.3 million, and$35.4 million as of December 31, 2005, 2004, and 2003, respectively.

On January 30, 2006,our Board of Directors declared a share distribution payable on February 14,2006, to shareholders of record as of February 7, 2006, based on the$0.925 per common unit distribution declared by the Partnership. ThePartnership’s distribution increases the number of i-units we own. The amountof this increase is calculated by dividing the amount of the cash distributionpaid by the Partnership on each common unit by the average market price of oneof our Listed Shares as determined for the 10-trading day period endingon the trading day immediately prior to the ex-dividend date for our shares. Wedistributed additional Listed Shares to the Listed Shareholders and additionalVoting Shares to the General Partner, in respect of these additional i-units.

**4. GAINON ISSUANCES OF UNITS BY ENBRIDGE ENERGY PARTNERS, L.P.**

The following table presents the gains we recognizedfor the dilution of our ownership resulting from the issuances of additionalPartnership units. Our ownership is diluted whenever the Partnership issuesunits and we do not participate in the offering.

F-12

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**ENBRIDGE ENERGY MANAGEMENT, L.L.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

 

| **Issuance Date** | ** ** | ** **                                        | ** ** | **Number of  Class A  Common  units Issued** | ** ** | **Offering Price  per Class A  Common unit** | ** ** | **Net Proceeds to  the Partnership**(1) | ** ** | **Ownership  Percent before  Issuance** | ** ** | **Ownership  Percent after  Issuance** | ** ** | **Dilution Gain**(2) | ** ** |
|------------------------|------------|---------------------------------------------------|------------|-------------------------------------------------------------|------------|------------------------------------------------------------------|------------|--------------------------------------------------------|------------|----------------------------------------------|------------|---------------------------------------------|------------|---------------------------|------------|
| ** **             | ** ** | **($ in millions, except per unit amounts)** | ** ** |
| **2005:**              |       |                                              |       |                                                        |       |                                                             |       |                                                   |       |                                         |       |                                        |       |                      |       |   |   |   |   |   |   |   |   |   |   |
| December 2005     |       |                                              | 136,200    |                                                        |       |                                                             | $          | 46.000                                                 |       |                                         |       | $                                           | 6.2        |                      |       |   | 17.5 | % |   |   | 17.5 | % |   |   | $ | 0.2 |   |   |
| November 2005     |       |                                              | 3,000,000  |                                                        |       |                                                             | $          | 46.000                                                 |       |                                         |       | 135.0                                       |       |                      |       | 18.4 | % |   |   | 17.5 | % |   |   | 4.5 |   |   |
| February 2005     |       |                                              | 2,506,500  |                                                        |       |                                                             | $          | 49.875                                                 |       |                                         |       | 127.5                                       |       |                      |       | 18.1 | % |   |   | 17.3 | % |   |   | 5.6 |   |   |
| **2005 Totals**        |       |                                              | 5,642,700  |                                                        |       |                                                             |       |                                                   |       |                                         | $          | 268.7                                       |       |                      |       |   |   |   |   |   |   |   |   | $ | 10.3 |   |   |
| **2004:**              |       |                                              |       |                                                        |       |                                                             |       |                                                   |       |                                         |       |                                        |       |                      |       |   |   |   |   |   |   |   |   |   |   |
| September 2004    |       |                                              | 3,680,000  |                                                        |       |                                                             | $          | 47.900                                                 |       |                                         |       | $                                           | 172.2      |                      |       |   | 18.9 | % |   |   | 17.8 | % |   |   | $ | 6.3 |   |   |
| January 2004      |       |                                              | 450,000    |                                                        |       |                                                             | $          | 50.300                                                 |       |                                         |       | 22.0                                        |       |                      |       | 18.2 | % |   |   | 18.2 | % |   |   | 0.9 |   |   |
| **2004  Totals**       |       |                                              | 4,130,000  |                                                        |       |                                                             |       |                                                   |       |                                         | $          | 194.2                                       |       |                      |       |   |   |   |   |   |   |   |   | $ | 7.2 |   |   |
| **2003:**              |       |                                              |       |                                                        |       |                                                             |       |                                                   |       |                                         |       |                                        |       |                      |       |   |   |   |   |   |   |   |   |   |   |
| December 2003     |       |                                              | 5,000,000  |                                                        |       |                                                             | $          | 50.300                                                 |       |                                         |       | $                                           | 245.3      |                      |       |   | 19.4 | % |   |   | 18.2 | % |   |   | $ | 11.2 |   |   |
| May 2003          |       |                                              | 3,850,000  |                                                        |       |                                                             | $          | 44.790                                                 |       |                                         |       | 169.0                                       |       |                      |       | 20.7 | % |   |   | 19.4 | % |   |   | 5.0 |   |   |
| **2003 Totals**        |       |                                              | 8,850,000  |                                                        |       |                                                             |       |                                                   |       |                                         | $          | 414.3                                       |       |                      |       |   |   |   |   |   |   |   |   | $ | 16.2 |   |   |

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(1)                Net ofunderwriters’ fees and discounts, commissions and issuance expenses andincluding contributions from the General Partner to maintain its 2% generalpartner interest.

(2)                Beforethe effect of income taxes.

**5. RELATED PARTY TRANSACTIONS**

At the time of our initial public offering, we becamea limited partner in the Partnership and, pursuant to a delegation of controlagreement among us, the General Partner and the Partnership, assumed themanagement of the Partnership’s business and affairs. Pursuant to thisagreement, we have assumed substantially all of the General Partner’s power andauthority to manage the business and affairs of the Partnership and itssubsidiaries. The delegation of control agreement provides that we will notamend or propose to amend the Partnership’s partnership agreement, allow amerger or consolidation involving the Partnership, allow a sale or exchange ofall or substantially all of the assets of the Partnership or dissolve orliquidate the Partnership without the approval of the General Partner.

The General Partner remains responsible to thePartnership for actions taken or omitted by us while serving as the delegate ofthe General Partner as if the General Partner had itself taken or omitted totake such actions. The General Partner owns all of our Voting Shares. TheGeneral Partner has agreed not to voluntarily withdraw as general partner ofthe Partnership and has agreed not to transfer its interest as general partnerof the Partnership unless the transferee agrees in writing to be bound by theterms and conditions for the delegation of control agreement that apply to thegeneral partner.

The Partnership recognizes the delegation of rightsand powers to us and indemnifies and protects us and, our officers anddirectors to the same extent as it does with respect to the General Partner. Inaddition, the Partnership reimburses our expenses to the same extent as it doeswith respect to the General Partner as general partner. The Partnership alsoreimburses us for any Texas franchise taxes and any other similar capital-basedforeign, state and local taxes not otherwise paid or reimbursed by Enbridgepursuant to the tax indemnification agreement.

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**ENBRIDGE ENERGY MANAGEMENT, L.L.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

Enbridge Employee Services, Inc.(“EES”) is a wholly-owned subsidiary of the General Partner and providesemployees and related employee benefits services to us, the General Partner,the Partnership and the Partnership’s operating partnerships and subsidiaries(collectively, the “Group”). Employees of EES are assigned to work for one ormore members of the Group. The direct costs of all compensation, benefitsexpenses, and employer expenses for these employees are charged by EES to theappropriate members of the Group. EES does not include profit or margin oncosts charged to the members of the Group. For the periods ending December 31,2005, 2004 and 2003, all employee related costs from EES were charged to thePartnership.

**6. INCOME TAXES**

Our long-term deferred income tax liability of $13.4million and $16.1 million as of December 31, 2005 and 2004, results fromthe deferred income tax expense associated with recording our equity inearnings of the Partnership and our share of the other comprehensive income ofthe Partnership. The terms of the i-units provide that the units owned byus will not be allocated income, gain, loss or deductions of the Partnershipuntil such time that we dispose of our investment in the Partnership, thusresulting in the deferred tax liability.

The delegation of control agreement with the GeneralPartner was amended effective February 21, 2005. The effect of theamendment is that the General Partner bears the economic impact for our taxesonly in the event we do not have sufficient cash to pay them. As a result, webegan accruing state income taxes in 2005 in addition to federal income tax. Theeffective tax rate used in computing the income tax provision in 2005 is 37.3%,which represents the federal statutory rate of 35.0% and the effective staterate of 2.3% (before the impact of the increase in the state tax rate on thecumulative differences between book and taxable net income).

Our income tax expense of$9.9 million for the year ended December 31, 2005, is $0.2 million lessthan the $10.1 million we incurred for the same period in 2004. The decreasewas primarily due to lower equity income from our investment in thePartnership, partially offset by an increase from a $1.6 million charge forcumulative state income taxes on the differences between book and taxable netincome resulting from the amendment to the delegation of control agreement.

**7. SUBSEQUENT EVENTS**

***Share distribution***

On January 30, 2006,our Board of Directors declared a share distribution payable on February 14,2006, to shareholders of record on February 7, 2006, based on the $0.925per common unit cash distribution declared by the Partnership. We received 228,071i-units from the Partnership, which is computed by dividing $0.925, thecash amount distributed per common unit, by $47.47, the average closing priceof our Listed Shares on the NYSE for the period ten days prior to the ex-dividenddate, multiplied by 11,704,948, the number of shares outstanding prior to thedistribution. We distributed 228,071 additional Listed Shares to the ListedShareholders and additional shares to the General Partner in respect of theseadditional i-units.

**8.SUMMARIZED FINANCIAL INFORMATION FOR ENBRIDGE ENERGY PARTNERS, L.P.**

EnbridgeEnergy Partners, L.P. and its consolidated subsidiaries is a publicly-tradedDelaware limited partnership that owns and operates crude oil and liquidpetroleum transportation and storage assets, and 

F-14

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**ENBRIDGE ENERGY MANAGEMENT, L.L.C. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

natural gas gathering, treating, processing, transportationand marketing assets in the United States of America. The Class A CommonUnits of Enbridge Energy Partners are traded on the New York Stock Exchange (“NYSE”)under the symbol “EEP.”

| ** **             | ** ** | **2005**               | ** ** | **2004** | ** ** | **2003** | ** ** |
|------------------------|------------|------------------------|------------|----------|------------|----------|------------|
| ** **             | ** ** | **(in millions)** | ** ** |
| Operating revenues     |       |                   | $          | 6,476.9  |       |     | $          | 4,291.7 |   | $ | 3,172.3 |   |
| Operating  expenses    |       |                   | 6,285.0    |     |       | 4,054.5  |       | 2,978.0 |   |
| Operating income       |       |                   | $          | 191.9    |       |     | $          | 237.2 |   | $ | 194.3 |   |
| Net income             |       |                   | $          | 89.2     |       |     | $          | 138.2 |   | $ | 111.7 |   |
| Current assets         |       |                   | $          | 985.3    |       |     | $          | 633.8 |   | $ | 408.8 |   |
| Long-term  assets      |       |                   | $          | 3,443.1  |       |     | $          | 3,136.9 |   | $ | 2,823.0 |   |
| Current  liabilities   |       |                   | $          | 971.3    |       |     | $          | 564.3 |   | $ | 588.6 |   |
| Long-term  liabilities |       |                   | $          | 2,093.3  |       |     | $          | 1,808.5 |   | $ | 1,329.9 |   |
| Partners’ capital |       |                   | $          | 1,363.8  |       |     | $          | 1,397.9 |   | $ | 1,313.3 |   |

 

**9.SUPPLEMENTAL SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)**

| ** **                                      | ** ** | **First**                                                                        | ** ** | **Second** | ** ** | **Third** | ** ** | **Fourth** | ** ** | **Total** | ** ** |
|-------------------------------------------------|------------|----------------------------------------------------------------------------------|------------|------------|------------|-----------|------------|------------|------------|-----------|------------|
| ** **                                      | ** ** | **(dollars in millions, except per unit amounts)** | ** ** |
| **2005 Quarters**                               |       |                                                                             |       |       |       |      |       |       |       |      |       |   |   |   |   |
| Net income (loss)                               |       | $                                                                                | 4.4        |       |       | $         | 2.2        |       |       | $         | (2.2       | ) |   | $ | 8.0 |   |   | $ | 12.4 |   |
| Net income (loss)  per share, basic and diluted |       | $                                                                                | 0.40       |       |       | $         | 0.20       |       |       | $         | (0.19      | ) |   | $ | 0.69 |   |   | $ | 1.10 |   |
| **2004  Quarters**                              |       |                                                                             |       |       |       |      |       |       |       |      |       |   |   |   |   |
| Net income                                      |       | $                                                                                | 3.9        |       |       | $         | 3.8        |       |       | $         | 6.8        |   |   | $ | 4.2 |   |   | $ | 18.7 |   |
| Net income per share,  basic and diluted        |       | $                                                                                | 0.38       |       |       | $         | 0.37       |       |       | $         | 0.65       |   |   | $ | 0.38 |   |   | $ | 1.78 |   |

 

F-15

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