To our unitholders and shareholders

D espite one of the most challenging economic environments we have seen, 2009 was a very successful year for the Partnership. Through the year, we maintained our quarterly distribution at $0.99 per unit and our distribution coverage ratio remained healthy, ending with coverage of 1.11 times.

We enhanced our liquidity position, stabilized our credit ratings and addressed our financing needs by entering into a joint-funding agreement for the Alberta Clipper project. We sold non-core natural gas pipeline assets and limited our capital expenditures to those projects that were most strategic. We implemented significant cost saving measures throughout 2009 and made significant progress on our expansion program. We did all the things we said we were going to do in 2009 and were able to deliver adjusted net income results that were 18 percent higher than our expectations at the beginning of the year. The unit price for the Partnership was up 111 percent for 2009, and the three-year shareholder return was 40 percent for the Partnership versus 31 percent for our peers.

On the project front, we completed the 400,000 barrels per day (Bpd) Southern Access Expansion Stage II. In January, 2010 we placed in-service the North Dakota Expansion Phase VI, which added 51,000 Bpd of additional capacity to our North Dakota System. The U.S. portion of Alberta Clipper was approximately 90 percent complete as of January 2010, with construction of the Canadian portion of the Alberta Clipper expansion mechanically complete. We expect that Alberta Clipper will be completed and available for line-fill on April 1, 2010, three months ahead of schedule. This will add significant earnings and cash flow to the Partnership.

Financially, we had a solid year in 2009. Adjusted operating income from the Liquids business was $443.7 million, an increase of $101.5 million from 2008. In our Natural Gas business, adjusted operating income was $154.2 million, a decrease of $16.7 million from 2008. The Partnership adjusted net income for the year was $377.1 million, 6 percent higher than 2008. Adjusted EBITDA was 15 percent higher than 2008.