RESULTS OF OPERATIONS

Our results of operations consist of our share of earnings of the Partnership attributed to the i-units we own. At September 30, 2009 and 2008, through our ownership of i-units, we had an approximate 13.4 percent and 14.5 percent limited partner interest in the Partnership, respectively. Our percentage ownership of the Partnership will change over time as the number of i-units we own becomes a different percentage of the total units outstanding due to our ownership of additional i-units and other issuances of limited partner interests by the Partnership.

The information set forth under "Part I, Item 2-Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Partnership's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009 is hereby incorporated by reference, as our results of operation, financial position and cash flows are dependent on the results of operations, financial position and cash flows of the Partnership.

The following table presents the Partnership's allocation of net income to the general partner and limited partners for the periods presented.

                                      For the three months ended                   For the nine months ended
                                             September 30,                               September 30,
                                      2009                   2008                 2009                   2008
                                                             (unaudited; in millions)
Net income attributable to
general and limited partner
ownership interests in
Enbridge Energy Partners,
L.P.                              $       57.2           $      119.4         $      243.3           $      281.3
Less: net income allocated
to the general partner                   (13.9 )                (14.1 )              (42.7 )                (35.8 )

Net income allocated to
limited partners                  $       43.3           $      105.3         $      200.6           $      245.5

Our net income of $3.3 million and $9.5 million for the three months ended September 30, 2009 and 2008, respectively, and $16.6 million and $26.7 million for the nine months ended September 30, 2009 and 2008, respectively, represents equity in earnings attributable to the i-units that we own, increased or decreased by the gain or loss we recognized in the nine months ended September 30, 2008 for adjustments the Partnership makes to its capital accounts when it issues additional common units reduced by deferred income tax expense. We refer to the adjustments the Partnership makes to its capital accounts as capital account adjustments. Deferred income tax expense is calculated based on the difference between the accounting and tax basis of our investment in the Partnership and the combined federal and state income tax rate of 38.2% and 36.6% for the three and nine month periods ended September 30, 2009 and 2008, respectively, applied to our share of the earnings of the Partnership for the respective periods.

Our earnings decreased by $6.2 million for the three months ended September 30, 2009 as compared to the same period in 2008, primarily due to a $9.5 million decrease in equity income from the Partnership resulting from the decrease in its net income in relation to the same period in 2008. This decrease was offset by a decrease in income taxes of $3.3 million associated with the decrease in our net income.

For the nine months ended September 30, 2009, our net income decreased by $10.1 million as compared to the same period in 2008. The decrease is primarily attributable to the $9.2 million decrease in equity income from the Partnership resulting from the decrease in its net income in relation to the same period in 2008, coupled with $6.4 million of pre-tax net gains we recognized during the nine months ended September 30, 2008 for capital account adjustments, discussed below. We did not recognize similar gains for unit issuances by the Partnership during the nine months ended September 30, 2009. The decrease was offset by a decrease in income taxes of $5.5 million associated with the decrease in our net income.

The Partnership records an adjustment to the carrying value of its book capital accounts when it issues additional common units and the new issuance price per unit is greater than or less than the average cost per unit for each class of units. We refer to these adjustments as capital account adjustments. Beginning January 1, 2009, in conjunction with our adoption of the authoritative accounting guidance for noncontrolling interests in consolidated financial statements, we recognize any capital account adjustments recorded by the Partnership to the book capital account it maintains for our i-units by increasing or decreasing our investment in the Partnership and recording a corresponding capital account adjustment directly to "Stockholders' equity" on our statement of financial position. We adopted prospectively the applicable authoritative guidance, except for any applicable presentation and disclosure requirements. Prior to our adoption of this guidance, we historically recognized the capital account adjustment recorded by the Partnership to the book capital account it maintains for our i-units by increasing or decreasing our investment in the Partnership and recording a corresponding gain or loss in our statement of income. Gain or loss recognition is an accounting convention we have historically applied as our method of recognizing these capital account adjustments made by the Partnership.

LIQUIDITY AND CAPITAL RESOURCES

Our authorized capital structure consists of two classes of membership interests: (1) our listed shares, which represent limited liability company interests with limited voting rights, and (2) our voting shares, which represent limited liability company interests with full voting rights. At September 30, 2009, our issued capitalization consisted of $646.4 million associated with our 16,052,737 Listed Shares outstanding.

The number of our shares outstanding, including the voting shares owned by the general partner, will at all times equal the number of i-units we own in the Partnership. Typically, the general partner and owners of the Partnership's Class A and B common units will receive distributions from the Partnership in cash. Instead of receiving cash distributions on the i-units we own, however, we receive additional i-units under the terms of the Partnership's partnership agreement. The amount of additional i-units we receive is calculated by dividing the amount of the cash distribution paid by the Partnership on each of its Class A and B common units by the average closing price of one of our listed shares on the New York Stock Exchange, or NYSE, for the 10-trading day period immediately preceding the ex-dividend date for our shares, multiplied by the number of our shares outstanding on the record date. We make share distributions to our shareholders concurrently with the i-unit distributions we receive from the Partnership that increases the number of i-units we own. As a result of our share distributions, the number of shares outstanding is equal to the number of i-units that we own in the Partnership.

INCOME TAXES

Our income tax expense of $2.6 million for the three months ended September 30, 2009 is $3.3 million less than the $5.9 million we incurred for the same period in 2008. The decrease in income tax expense for the three months ended September 30, 2009 was due to the decrease in our taxable income primarily associated with lower equity income from the Partnership.

For the nine months ended September 30, 2009, our income tax expense decreased by $5.5 million to $10.3 million as compared to the $15.8 million that we incurred for the same period in 2008. The decrease in income tax expense for the nine months ended September 30, 2009 was due to the decrease in our taxable income primarily associated with the lower equity income from the Partnership coupled with the decrease in gains we recognized from the Partnership's sale of its Class A common units.

We computed our income tax expense for the nine months ended September 30, 2009 by applying a 38.2% effective income tax rate to our pre-tax income, which represents the federal statutory rate of 35.0% and the effective state income tax rate of 3.2%. We computed our income tax expense for the nine months ended September 30, 2008 by applying a 36.6% effective income tax rate to our pre-tax income, which represents the

federal statutory rate of 35.0% and the effective state income tax rate of 1.6%. The increase in the effective state income tax rate was due to the apportionment of greater amounts of income to states with higher state income tax rates.

SUBSEQUENT EVENTS

We have evaluated events subsequent to September 30, 2009 through November 4, 2009, the date we issued these financial statements, and identified the events presented below.

Share Distribution

On October 29, 2009, our board of directors declared a share distribution payable on November 13, 2009 to shareholders of record as of November 5, 2009, based on the $0.990 per limited partner unit distribution declared by the Partnership. The Partnership's distribution increases the number of i-units we own. The amount of this increase is calculated by dividing the cash amount distributed by the Partnership per common unit, by the average closing price of one of our listed shares on the New York Stock Exchange, or NYSE, for the 10-trading day period immediately preceding the ex-dividend date for our shares multiplied by the number of shares outstanding on the record date. We distribute additional listed shares to our listed shareholders and additional shares to the general partner in respect of these additional i-units.