HOUSTON, Aug. 2, 2017 /PRNewswire/ - Spectra Energy Partners, LP (NYSE: SEP) today reported net income of $367 million, including net income from controlling interests of $328 million, for the second quarter ended June 30, 2017, with diluted earnings per limited partner unit of $0.75. The second quarter included non-recurring special items of $29 million, which decreased diluted earnings per limited partner unit by $0.09.
HIGHLIGHTS:
Second quarter 2017 ongoing distributable cash flow (DCF) was $371 million, compared with $281 million in the prior-year quarter. Distributions per limited partner unit for second quarter 2017 were $0.71375, compared with $0.66375 per limited partner unit in the second quarter of 2016.
For the quarter, ongoing earnings before interest, taxes, depreciation and amortization (EBITDA) were $548 million, compared with $448 million in the prior-year quarter. Ongoing net income from controlling interests was $357 million for the quarter, or $0.84 diluted earnings per limited partner unit, compared with $293 million, or $0.73 diluted earnings per limited partner unit in the prior-year quarter. Net income from controlling interests was $328 million for the quarter, or $0.75 diluted earnings per limited partner unit, compared with $287 million, or $0.71 diluted earnings per limited partner unit in the prior-year quarter.
PRESIDENT COMMENT
"Spectra Energy Partners achieved another solid quarter thanks to the reliability and strength of our fee-based business model with no direct commodity exposure and virtually no volume exposure, and further enhanced by the successful execution of our expansion program. The 39th consecutive quarterly cash distribution increase we announced earlier today demonstrates our continued ability to generate both the cash flow and growth we promised investors," said Bill Yardley, chairman and president of Spectra Energy Partners.
"We also made significant progress in advancing SEP's 15 commercially secured projects totaling more than $8 billion in gross expansion opportunity through 2019 – most notably, by placing the Sabal Trail project into service in early July, on time and on budget. The strength of our business model and expansion program continues to give us confidence in our ongoing ability to deliver on the financial commitments we made to our investors," continued Yardley.
SEGMENT RESULTS
U.S. Transmission
Ongoing EBITDA from U.S. Transmission was $497 million in the second quarter 2017, compared with $412 million for the second quarter of 2016, and reflects increased earnings from expansion projects including AIM, Sabal Trail, Gulf Markets and NEXUS. The 2017 and 2016 ongoing results exclude special items of $11 million and $6 million in expenses respectively, both related to the 2016 Texas Eastern pipeline incident. The 2017 ongoing results also exclude $6 million in expense, primarily from merger-related costs.
Liquids
Ongoing EBITDA from Liquids was $65 million in the second quarter 2017, compared with $58 million in the second quarter 2016. These results reflect expansion revenues from the Express Enhancement project placed into service in October 2016 and higher transportation revenues due to higher average tariff rates on the Express Pipeline, partially offset by higher operating costs. The 2017 period excludes a special item of $1 million for merger-related costs.
Other
Ongoing net expenses from "Other" were $14 million and $22 million in the second quarters 2017 and 2016, respectively. The 2017 period excludes special items of $11 million, primarily from merger-related costs.
Interest Expense
Interest expense was $60 million in the second quarter 2017, compared with $56 million in the second quarter 2016, reflecting higher average long-term debt balances in 2017, partially offset by higher capitalized interest.
Liquidity and Capital Expenditures
Total debt outstanding at Spectra Energy Partners as of June 30, 2017 was $7.9 billion, with available liquidity of $1.3 billion.
This year, Spectra Energy Partners has received net proceeds of $85 million through its "At the Market" (ATM) equity issuance program.
Including contributions from noncontrolling interests, Spectra Energy Partners has $1.8 billion of capital expansion spending planned in 2017, which is expected to be funded through a combination of debt, equity issued primarily through its ATM program, and return of capital from joint venture asset-level financings. Including contributions from noncontrolling interests of $126 million, total capital spending for the three months ended June 30, 2017, was $585 million, consisting of $532 million of growth capital expenditures and $53 million of maintenance capital expenditures.
EXPANSION PROJECT UPDATES
Commercially Secured Projects
Sabal Trail was placed into commercial service in early July with 400,000 dekatherms per day (Dth/d) of firm transportation available to meet the peak cooling season needs of Florida Power and Light and an additional 300,000 Dth/d of firm delivery available to serve Duke Energy's new natural gas-fired generation later this year. The 515-mile pipeline will have the capacity to deliver approximately 1.1 billion cubic feet of natural gas per day to the Southeast U.S. once approved future expansions are completed. The successful completion of Sabal Trail demonstrates Spectra Energy Partner's ability to navigate rigorous environmental permitting processes while working with landowners and other key stakeholders.
The Lebanon Extension and phase two of the Gulf Markets Expansion were placed into service earlier this week, several months ahead of schedule and on budget, again demonstrating the success of SEP's project execution model. Construction continues on Access South and Adair Southwest, which are on track for in-service later this year.
Construction also continues on Atlantic Bridge, with initial in-service of the Connecticut facilities scheduled for the fourth quarter of 2017. Full in-service of all project facilities is expected in the second half of 2018.
The Bayway Lateral project received FERC approval in July, with construction expected to begin in early August to achieve its targeted in-service in the first half of 2018.
PennEast and STEP remain on track for their targeted in-service dates in 2018 as does Stratton Ridge with its 2019 in-service date.
Approval of the NEXUS and TEAL projects remains pending before the FERC due to a lack of quorum. While NEXUS' and TEAL's certificate applications remain pending, the record supporting the Final Environmental Impact Statement and Applications are complete and ready for prompt FERC approval once a quorum is restored. As previously indicated, since the quorum at FERC was not in place by the end of June and the FERC Certificates remain pending before the Commission, a 2017 in-service date is not expected. Once the expected approval is received, a revised 2018 in-service date will be identified.
New to SEP's execution backlog are the Texas-Louisiana Market Projects and the Lambertville-East project that demonstrate SEP's ability to leverage its existing asset footprint and expand its demand-pull business profile. The combined $20 million Texas-Louisiana Market projects are a 157,000 Dth/d expansion of Texas Eastern to serve demand-pull markets along the Gulf Coast region and the $45 million Lambertville-East project will provide 60,000 Dth/d of firm transportation service on Texas Eastern's Zone M3. Both projects are expected to be placed into service in the second half of 2019.
Development Projects.
In June, Access Northeast withdrew its pre-filing application from the FERC Docket to recognize the lack of a uniform energy policy in New England that is required to achieve full regional support of natural gas infrastructure for electric generation. While this procedural action places the FERC process on hold, Access Northeast's partners continue to actively pursue a viable commercial and operational model to address New England's need for additional natural gas pipeline infrastructure.
Earlier this week Texas Eastern announced an open season for its Enhanced Electric Reliability Project to serve electric generators in the PJM Interconnection (PJM) and other demand markets within the region. Given the 40 power generators in close proximity to Texas Eastern, we are well positioned to serve this growing market need and deliver reliability to PJM as the region is seeing an increasing dependence upon natural gas with the retirements of coal and nuclear resources. The open season concludes in mid-September.
ADDITIONAL INFORMATION
Additional information about second quarter 2017 earnings can be obtained via the Spectra Energy Partners website: www.spectraenergypartners.com.
Spectra Energy Partners will host a joint webcast with Enbridge Inc. (TSX, NYSE: ENB) on August 3 at 8 a.m. CT. The webcast will be available via the Spectra Energy Partners Events & Presentations page, and the conference call can be accessed by dialing (877) 930-8043 in North America or (253) 336-7522 outside North America. The participant passcode is 51403910#.
A replay of the call will be available via the Spectra Energy Partners Events & Presentations page, or by dialing (855) 859-2056 in North America or (404) 537-3406 outside North America and using the above passcode.
The conference call format will include prepared remarks from the executive team followed by a question and answer session for the analyst and investor community only. Spectra Energy Partners' media and investor relations teams will be available after the call for any additional questions.
Non-GAAP Financial Measures
We use ongoing net income from controlling interests as a measure to evaluate operations of the partnership. This measure is a non-GAAP financial measure as it represents net income from controlling interests, excluding special items. Special items represent certain charges and credits which we believe will not be recurring on a regular basis. We believe that the presentation of ongoing net income from controlling interests provides useful information to investors, as it allows investors to more accurately compare our ongoing performance across periods. The most directly comparable GAAP measure for ongoing net income from controlling interests is net income from controlling interests.
We use earnings from continuing operations before interest, income taxes, and depreciation and amortization (EBITDA) and ongoing EBITDA, non-GAAP financial measures, as performance measures for Spectra Energy Partners, LP. Ongoing EBITDA represents EBITDA, excluding special items. We believe that the presentation of EBITDA and ongoing EBITDA provides useful information to investors, as it allows investors to more accurately compare Spectra Energy Partners, LP's performance across periods. The most directly comparable GAAP measure for EBITDA and ongoing EBITDA for Spectra Energy Partners, LP is net income.
The primary performance measures used by us to evaluate segment performance are segment EBITDA and Other EBITDA. We consider segment EBITDA and Other EBITDA, which are the GAAP measures used to report segment results, to be good indicators of each segment's operating performance from its continuing operations as they represent the results of our segments' operations before depreciation and amortization without regard to financing methods or capital structures. Our segment EBITDA and Other EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate EBITDA in the same manner.
We also use ongoing segment EBITDA as a measure of performance. Ongoing segment EBITDA is a non-GAAP financial measure, as it represents reported segment EBITDA, excluding special items. We believe that the presentation of ongoing segment EBITDA provides useful information to investors, as it allows investors to more accurately compare a segment's ongoing performance across periods. The most directly comparable GAAP measure for ongoing segment EBITDA is segment EBITDA.
We also present Distributable Cash Flow (DCF), which is a non-GAAP financial measure. We believe that the presentation of DCF provides useful information to investors, as it represents the cash generation capabilities of the partnership to support distribution growth. We also use ongoing DCF, which is a non-GAAP financial measure, as it represents DCF, excluding the cash effect of special items. The most directly comparable GAAP measure for DCF and ongoing DCF is net income. We also use DCF coverage, which is a non-GAAP financial measure, as it represents DCF divided by distributions declared on partnership units. The most directly comparable GAAP measure for DCF coverage is Earnings-Per-Unit (EPU).
The non-GAAP financial measures presented in this press release should not be considered in isolation or as an alternative to financial measures presented in accordance with GAAP. These non-GAAP financial measures may not be comparable to similarly titled measures of other partnerships because other partnerships may not calculate these measures in the same manner.
Forward-Looking Statements
This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on our beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an effect on rate structure, and affect the speed at and degree to which competition enters the natural gas and oil industries; outcomes of litigation and regulatory investigations, proceedings or inquiries; weather and other natural phenomena, including the economic, operational and other effects of hurricanes and storms; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; general economic conditions, including the risk of a prolonged economic slowdown or decline, or the risk of delay in a recovery, which can affect the long-term demand for natural gas and oil and related services; potential effects arising from terrorist attacks and any consequential or other hostilities; changes in environmental, safety and other laws and regulations; the development of alternative energy resources; results and costs of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general market and economic conditions; increases in the cost of goods and services required to complete capital projects; declines in the market prices of equity and debt securities and resulting funding requirements for defined benefit pension plans; growth in opportunities, including the timing and success of efforts to develop U.S. and Canadian pipeline, storage, gathering, processing and other related infrastructure projects and the effects of competition; the performance of natural gas and oil transmission and storage, distribution, and gathering and processing facilities; the extent of success in connecting natural gas and oil supplies to gathering, processing and transmission systems and in connecting to expanding gas and oil markets; the effects of accounting pronouncements issued periodically by accounting standard-setting bodies; conditions of the capital markets during the periods covered by forward-looking statements; and the ability to successfully complete merger, acquisition or divestiture plans; regulatory or other limitations imposed as a result of a merger, acquisition or divestiture; and the success of the business following a merger, acquisition or divestiture. These factors, as well as additional factors that could affect our forward-looking statements, are described under the headings "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Information" in our 2016 Form 10-K, filed on February 24, 2017, and in our other filings made with the Securities and Exchange Commission (SEC), which are available via the SEC's website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. All forward-looking statements in this release are made as of the date hereof and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Spectra Energy Partners
Spectra Energy Partners, LP is one of the largest pipeline master limited partnerships in the United States and connects growing supply areas to high-demand markets for natural gas and crude oil. These assets include more than 15,000 miles of transmission pipelines, approximately 170 billion cubic feet of natural gas storage, and approximately 5.6 million barrels of crude oil storage. Spectra Energy Partners, LP is traded on the New York stock exchange under the symbol SEP; information about the company is available on its website at www.spectraenergypartners.com.
FOR FURTHER INFORMATION PLEASE CONTACT: | |
Media: |
Michael Barnes |
Toll Free: (877) 496-8142 | |
Analysts and Investors: |
Roni Cappadonna |
(713) 627-4778 or Toll Free: (800) 481-2804 | |
Spectra Energy Partners, LP | |||||||||||||
Quarterly Highlights | |||||||||||||
June 2017 | |||||||||||||
(Unaudited) | |||||||||||||
(In millions, except per-unit amounts) | |||||||||||||
Reported - These results include the impact of special items | |||||||||||||
Three Months Ended |
Six Months Ended | ||||||||||||
June 30, |
June 30, | ||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||
INCOME |
|||||||||||||
Operating Revenues |
$ |
695 |
$ |
618 |
$ |
1,395 |
$ |
1,242 | |||||
Total Reportable Segment EBITDA |
544 |
464 |
1,089 |
931 | |||||||||
Net Income – Controlling Interests |
328 |
287 |
645 |
585 | |||||||||
EBITDA BY BUSINESS SEGMENT |
|||||||||||||
U.S. Transmission |
$ |
480 |
$ |
406 |
$ |
959 |
$ |
817 | |||||
Liquids |
64 |
58 |
130 |
114 | |||||||||
Total Reportable Segment EBITDA |
544 |
464 |
1,089 |
931 | |||||||||
Other EBITDA |
(25) |
(22) |
(71) |
(42) | |||||||||
Total Reportable Segment and Other EBITDA |
$ |
519 |
$ |
442 |
$ |
1,108 |
$ |
889 | |||||
PARTNERS' CAPITAL |
|||||||||||||
Declared Cash Distribution per Limited Partner Unit |
$ |
0.71375 |
$ |
0.66375 |
$ |
1.41500 |
$ |
1.31500 | |||||
Weighted Average Units Outstanding |
|||||||||||||
Limited Partner Units |
310 |
298 |
310 |
292 | |||||||||
General Partner Units |
6 |
6 |
6 |
6 | |||||||||
DISTRIBUTABLE CASH FLOW |
|||||||||||||
Distributable Cash Flow |
$ |
341 |
$ |
275 |
$ |
697 |
$ |
646 | |||||
CAPITAL AND INVESTMENT EXPENDITURES (a) |
|||||||||||||
Capital Expenditures – U.S. Transmissions |
$ |
1,350 |
$ |
986 | |||||||||
Capital Expenditures – Liquids |
11 |
37 | |||||||||||
Investment Expenditures |
158 |
112 | |||||||||||
Total |
$ |
1,519 |
$ |
1,135 | |||||||||
U.S. TRANSMISSION |
|||||||||||||
Operating Revenues |
$ |
592 |
$ |
529 |
$ |
1,188 |
$ |
1,067 | |||||
Operating Expenses |
|||||||||||||
Operating, Maintenance and Other |
201 |
183 |
401 |
355 | |||||||||
Other Income and Expenses |
89 |
60 |
172 |
105 | |||||||||
EBITDA |
$ |
480 |
$ |
406 |
$ |
959 |
$ |
817 | |||||
LIQUIDS |
|||||||||||||
Operating Revenues |
$ |
103 |
$ |
89 |
$ |
207 |
$ |
175 | |||||
Operating Expenses |
|||||||||||||
Operating, Maintenance and Other |
39 |
31 |
76 |
62 | |||||||||
Other Income and Expenses |
▬ |
▬ |
(1) |
1 | |||||||||
EBITDA |
$ |
64 |
$ |
58 |
$ |
130 |
$ |
114 | |||||
Express Pipeline Revenue Receipts, MBbl/d (b) |
254 |
233 |
263 |
233 | |||||||||
Platte PADD II Deliveries, MBbl/d |
136 |
143 |
140 |
132 | |||||||||
Canadian Dollar Exchange Rate, Average |
1.34 |
1.29 |
1.33 |
1.33 | |||||||||
June 30, 2017 |
June 30, 2016 | ||||||||||||
Debt |
$ |
7,946 |
$ |
7,213 | |||||||||
Actual Units Outstanding |
317 |
315 | |||||||||||
(a) Excludes contributions received from noncontrolling interests of $416 million in 2017 and $278 million in 2016. | |||||||||||||
(b) Thousand barrels per day. |
Spectra Energy Partners, LP | |||||||||||
Condensed Consolidated Statements of Operations | |||||||||||
(Unaudited) | |||||||||||
(In millions) | |||||||||||
Reported - These results include the impact of special items | |||||||||||
Three Months Ended |
Six Months Ended | ||||||||||
June 30, |
June 30, | ||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||
Operating Revenues |
$ |
695 |
$ |
618 |
$ |
1,395 |
$ |
1,242 | |||
Operating Expenses |
352 |
313 |
720 |
613 | |||||||
Operating Income |
343 |
305 |
675 |
629 | |||||||
Other Income and Expenses |
89 |
61 |
172 |
108 | |||||||
Interest Expense |
60 |
56 |
116 |
112 | |||||||
Earnings Before Income Taxes |
372 |
310 |
731 |
625 | |||||||
Income Tax Expense |
5 |
5 |
10 |
9 | |||||||
Net Income |
367 |
305 |
721 |
616 | |||||||
Net Income - Noncontrolling Interests |
39 |
18 |
76 |
31 | |||||||
Net Income - Controlling Interests |
$ |
328 |
$ |
287 |
$ |
645 |
$ |
585 |
Spectra Energy Partners, LP | ||||||||||||
Condensed Consolidated Balance Sheets | ||||||||||||
(Unaudited) | ||||||||||||
(In millions) | ||||||||||||
June 30, 2017 |
June 30, 2016 | |||||||||||
ASSETS |
||||||||||||
Current Assets |
$ |
559 |
$ |
660 | ||||||||
Investment and Other Assets |
4,623 |
4,469 | ||||||||||
Net Property, Plant and Equipment |
17,257 |
16,092 | ||||||||||
Regulatory Assets and Deferred Debits |
443 |
385 | ||||||||||
Total Assets |
$ |
22,882 |
$ |
21,606 | ||||||||
LIABILITIES |
||||||||||||
Current Liabilities |
$ |
2,392 |
$ |
1,779 | ||||||||
Long-term Debt |
6,214 |
6,223 | ||||||||||
Deferred Credits and Other Liabilities |
198 |
200 | ||||||||||
Equity |
14,078 |
13,404 | ||||||||||
Total Liabilities and Equity |
$ |
22,882 |
$ |
21,606 |
Spectra Energy Partners, LP | ||||||||||||
Distributable Cash Flow | ||||||||||||
(Unaudited) | ||||||||||||
(Dollars in millions, except where noted) | ||||||||||||
Three Months Ended |
Six Months Ended | |||||||||||
June 30, |
June 30, | |||||||||||
2017 |
2016 |
2017 |
2016 | |||||||||
Net Income |
$ |
367 |
$ |
305 |
$ |
721 |
$ |
616 | ||||
Add: |
||||||||||||
Interest Expense |
60 |
56 |
116 |
112 | ||||||||
Income Tax Expense |
5 |
5 |
10 |
9 | ||||||||
Depreciation and Amortization |
87 |
77 |
172 |
154 | ||||||||
Foreign Currency (Gain) Loss |
▬ |
1 |
▬ |
▬ | ||||||||
Less: |
||||||||||||
Third Party Interest Income |
▬ |
2 |
1 |
2 | ||||||||
EBITDA |
519 |
442 |
1,018 |
889 | ||||||||
Add:: |
||||||||||||
Earnings from Equity Investments |
(40) |
(30) |
(78) |
(57) | ||||||||
Distributions from Equity Investments (a) |
40 |
32 |
78 |
97 | ||||||||
Other |
(1) |
1 |
▬ |
3 | ||||||||
Less: |
||||||||||||
Earnings from Investments |
60 |
56 |
116 |
112 | ||||||||
Equity AFUDC |
48 |
29 |
93 |
46 | ||||||||
Net Cash Paid for Income Taxes |
3 |
4 |
8 |
5 | ||||||||
Distributions to non-controlling Interests |
13 |
8 |
25 |
15 | ||||||||
Maintenance Capital Expenditures |
53 |
73 |
79 |
108 | ||||||||
Total Distributable Cash Flow |
$ |
341 |
$ |
275 |
$ |
697 |
$ |
646 |
Spectra Energy Partners, LP | ||||||||||||||||||
Reported to Ongoing Distributable Cash Flow Reconciliation | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
(In millions) | ||||||||||||||||||
Three Months Ended | ||||||||||||||||||
June 30, 2017 |
June 30, 2016 | |||||||||||||||||
Reported |
Less: |
Ongoing |
Reported |
Less: |
Ongoing | |||||||||||||
Net Income |
$ |
367 |
$ |
(29) |
$ |
396 |
$ |
305 |
$ |
(6) |
$ |
311 | ||||||
Add: |
||||||||||||||||||
Interest expense |
60 |
- |
60 |
56 |
- |
56 | ||||||||||||
Income tax expense |
5 |
- |
5 |
5 |
- |
5 | ||||||||||||
Depreciation and amortization |
87 |
- |
87 |
77 |
- |
77 | ||||||||||||
Foreign currency loss |
- |
- |
- |
1 |
- |
1 | ||||||||||||
Less: |
||||||||||||||||||
Third party interest income |
- |
- |
- |
2 |
- |
- | ||||||||||||
EBITDA |
519 |
(29) |
548 |
442 |
(6) |
448 | ||||||||||||
Add: |
||||||||||||||||||
Earnings from equity investments |
(40) |
- |
(40) |
(30) |
- |
(30) | ||||||||||||
Distributions from equity investments (a) |
40 |
- |
40 |
32 |
- |
32 | ||||||||||||
Non-cash impairment at Ozark Gas Gathering |
(1) |
- |
(1) |
1 |
- |
1 | ||||||||||||
Other |
- |
- |
- |
- |
- |
- | ||||||||||||
Less: |
||||||||||||||||||
Interest expense |
60 |
- |
60 |
56 |
- |
56 | ||||||||||||
Equity AFUDC |
48 |
- |
48 |
29 |
- |
29 | ||||||||||||
Net cash paid for income taxes |
3 |
3 |
4 |
- |
4 | |||||||||||||
Distributions to non-controlling interests |
13 |
- |
13 |
8 |
- |
8 | ||||||||||||
Maintenance capital expenditures |
53 |
1 |
52 |
73 |
- |
73 | ||||||||||||
Total Distributable Cash Flow |
$ |
341 |
$ |
(30) |
$ |
371 |
$ |
275 |
$ |
(6) |
$ |
281 |
Spectra Energy Partners, LP | |||||||||||
Reported to Ongoing Earnings Reconciliation | |||||||||||
June 2017 Quarter-to-Date | |||||||||||
(Unaudited) | |||||||||||
(In millions) | |||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND |
Reported |
Less: Special Items |
Ongoing | ||||||||
U.S. Transmission |
$ |
480 |
$ |
(17) |
A |
$ |
497 | ||||
Liquids |
64 |
(1) |
B |
65 |
|||||||
Total Reportable Segment EBITDA |
544 |
(18) |
562 | ||||||||
Other |
(25) |
(11) |
B |
(14) |
|||||||
Total Reportable Segment and other EBITDA |
$ |
519 |
$ |
(29) |
$ |
548 |
|||||
EARNINGS |
|||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
519 |
$ |
(29) |
$ |
548 |
|||||
Depreciation and Amortization |
(87) |
— |
(87) | ||||||||
Interest Expense |
(60) |
— |
(60) | ||||||||
Other Income and Expenses |
— |
— |
— | ||||||||
Income Tax Expense |
(5) |
— |
(5) | ||||||||
Total Net Income |
367 |
(29) |
396 | ||||||||
Total Net Income - Noncontrolling Interests |
(39) |
— |
(39) | ||||||||
Total Net Income - Controlling Interests |
$ |
328 |
$ |
(29) |
$ |
357 |
|||||
A - Primarily merger related severance costs and inspection and repair costs related to the Texas Eastern pipeline incident in Pennsylvania. |
|||||||||||
B - Primarily merger-related severance costs |
Spectra Energy Partners, LP | |||||||||||||||
Reported to Ongoing Earnings Reconciliation | |||||||||||||||
June 2017 Year-to-Date | |||||||||||||||
(Unaudited) | |||||||||||||||
(In millions) | |||||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND |
Reported |
Less: Special Items |
Ongoing | ||||||||||||
U.S. Transmission |
$ |
959 |
$ |
(37) |
A |
$ |
996 |
||||||||
Liquids |
130 |
(3) |
B |
133 |
|||||||||||
Total Reportable Segment EBITDA |
1,089 |
(40) |
1,129 |
||||||||||||
Other |
(71) |
(35) |
B |
(36) |
|||||||||||
Total Reportable Segment and other EBITDA |
$ |
1,018 |
$ |
(75) |
$ |
1,093 |
|||||||||
EARNINGS |
|||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
1,018 |
$ |
(75) |
$ |
1,093 |
|||||||||
Depreciation and Amortization |
(172) |
— |
(172) |
||||||||||||
Interest Expense |
(116) |
— |
(116) |
||||||||||||
Other Income and Expenses |
1 |
— |
1 |
||||||||||||
Income Tax Expense |
(10) |
— |
(10) |
||||||||||||
Total Net Income |
721 |
(75) |
796 |
||||||||||||
Total Net Income - Noncontrolling Interests |
(76) |
— |
(76) |
||||||||||||
Total Net Income - Controlling Interests |
$ |
645 |
$ |
(75) |
$ |
720 |
|||||||||
A - Primarily merger related severance costs and inspection and repair costs related to the Texas Eastern pipeline incident in Pennsylvania. |
|||||||||||||||
B - Primarily merger-related severance costs |
|||||||||||||||
Spectra Energy Partners, LP |
|||||||||||||||
Reported to Ongoing Earnings Reconciliation |
|||||||||||||||
June 2016 Quarter-to-Date |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(In millions) |
|||||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND |
Reported |
Less: Special Items |
Ongoing |
||||||||||||
U.S. Transmission |
$ |
406 |
$ |
(6) |
A |
$ |
412 |
||||||||
Liquids |
58 |
— |
58 |
||||||||||||
Total Reportable Segment EBITDA |
464 |
(6) |
470 |
||||||||||||
Other |
(22) |
— |
(22) |
||||||||||||
Total Reportable Segment and other EBITDA |
$ |
442 |
$ |
(6) |
$ |
448 |
|||||||||
EARNINGS |
|||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
442 |
$ |
(6) |
$ |
448 |
|||||||||
Depreciation and Amortization |
(77) |
— |
(77) |
||||||||||||
Interest Expense |
(56) |
— |
(56) |
||||||||||||
Other Income and Expenses |
1 |
— |
1 |
||||||||||||
Income Tax Expense |
(5) |
— |
(5) |
||||||||||||
Total Net Income |
305 |
(6) |
311 |
||||||||||||
Total Net Income - Noncontrolling Interests |
(18) |
— |
(18) |
||||||||||||
Total Net Income - Controlling Interests |
$ |
287 |
$ |
(6) |
$ |
293 |
|||||||||
A- Inspection and repair costs related to the Texas Eastern pipeline incident in Pennsylvania. |
|||||||||||||||
Spectra Energy Partners, LP |
|||||||||||||||
Reported to Ongoing Earnings Reconciliation |
|||||||||||||||
June 2016 Year-to-Date |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(In millions) |
|||||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND |
Reported/Ongoing |
Less: Special Items |
Ongoing |
||||||||||||
U.S. Transmission |
$ |
817 |
$ |
(6) |
A |
$ |
823 |
||||||||
Liquids |
114 |
— |
114 |
||||||||||||
Total Reportable Segment EBITDA |
931 |
(6) |
937 |
||||||||||||
Other |
(42) |
— |
(42) |
||||||||||||
Total Reportable Segment and other EBITDA |
$ |
889 |
$ |
(6) |
$ |
895 |
|||||||||
EARNINGS |
|||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
889 |
$ |
(6) |
$ |
895 |
|||||||||
Depreciation and Amortization |
(154) |
— |
(154) |
||||||||||||
Interest Expense |
(112) |
— |
(112) |
||||||||||||
Other Income and Expenses |
2 |
— |
2 |
||||||||||||
Income Tax Expense |
(9) |
— |
(9) |
||||||||||||
Total Net Income |
616 |
(6) |
622 |
||||||||||||
Total Net Income - Noncontrolling Interests |
(31) |
— |
(31) |
||||||||||||
Total Net Income - Controlling Interests |
$ |
585 |
$ |
(6) |
$ |
591 |
|||||||||
A - Inspection and repair costs related to the Texas Eastern pipeline incident in Pennsylvania. |
|||||||||||||||
SOURCE Spectra Energy Corp.
HOUSTON, Feb. 24, 2017 /PRNewswire/ -- Spectra Energy Partners, LP (NYSE: SEP) today announced it has filed the partnership's Annual Report on Form 10-K with the Securities and Exchange Commission (SEC), for the year that ended December 31, 2016.
The report is available for viewing and downloading through the partnership's website, www.spectraenergypartners.com, on the Investors page under Publications & SEC Filings. Investors may also request a hard copy of the 10-K, free of charge, by e-mailing
IR-SEP@spectraenergy.com.
Spectra Energy Partners, LP (NYSE: SEP) is a Houston-based master limited partnership, formed by Spectra Energy Corp (NYSE: SE). SEP is one of the largest pipeline MLPs in the United States and connects growing supply areas to high-demand markets for natural gas and crude oil. These assets include more than 15,000 miles of transmission pipelines, approximately 170 billion cubic feet of natural gas storage, and approximately 5.6 million barrels of crude oil storage.
SOURCE Spectra Energy Partners, LP
DALLAS, Feb. 23, 2017 /PRNewswire/ -- Alerian announced that following the close of business today, Spectra Energy (NYSE: SE) will be removed from the Alerian Energy Infrastructure Index (AMEI) in a special rebalancing.
The merger between Enbridge Energy (NYSE: ENB) and Spectra Energy was approved on December 15, 2016 by ENB and SE's shareholders and, as of this morning, all required regulatory clearances under the merger agreement have now been met.
The index will be rebalanced in accordance with its existing methodology. Constituent additions to and deletions from the index do not reflect an opinion by Alerian on the investment merits of the respective securities.
About the Alerian Energy Infrastructure Index
The Alerian Energy Infrastructure Index is a composite of North American energy infrastructure companies. The capped, float-adjusted, capitalization-weighted index, whose constituents are engaged in midstream activities involving energy commodities, is disseminated real-time on a price-return basis (AMEI) and on a total-return basis (AMEIX).
About Alerian
Alerian equips investors to make informed decisions about Master Limited Partnerships (MLPs) and energy infrastructure. Its benchmarks, including the flagship Alerian MLP Index (AMZ), are widely used by industry executives, investment professionals, research analysts, and national media to analyze relative performance. As of December 31, 2016, over $17 billion is directly tied to the Alerian Index Series through exchange-traded funds and notes, separately managed accounts, and structured products. For more information, including index values and constituents, research content, and announcements regarding rebalancings, please visit alerian.com.
SOURCE Alerian
Highlights
- All conditions in merger agreement have been met; Transaction expected to close on February 27
- The combined company will be a global energy infrastructure leader and the largest energy infrastructure company in North America with roughly C$166 billion (US$126 billion) enterprise value
- Leading strategic business platforms including liquids and natural gas pipelines, natural gas distribution utilities and renewable power generation
- Industry leading C$27 billion (US$21 billion) of secured growth projects and approximately C$48 billion (US$37 billion) of probability weighted projects under development drives transparent long-term cash flow growth
- 10 to 12 percent average annual dividend increases expected from 2018 through 2024
- Strong, investment grade balance sheet
- Expected run-rate synergies of pre-tax C$540 million (US$415 million) by 2019, and estimated tax savings of C$260 million (US$200 million) beginning in 2019
CALGARY, Alberta and HOUSTON, Feb. 23, 2017 /PRNewswire/ -- Enbridge Inc. (TSX, NYSE:ENB) (Enbridge) and Spectra Energy Corp (NYSE:SE) (Spectra Energy) today announced that the previously announced merger of the two companies (the Transaction) has received all required regulatory clearances under the merger agreement, including from the Canadian Competition Bureau, and is expected to close on February 27, 2017.
"We are very pleased to have now received all required regulatory clearances and we look forward to realizing the significant customer and shareholder benefits of combining these two strong companies," said Al Monaco, President and Chief Executive Officer of Enbridge. "With the completion of the Transaction, Enbridge will become a leading global energy infrastructure company and the largest in North America with roughly C$166 billion (US$126 billion) in enterprise value and the strongest liquids and natural gas infrastructure franchises on the continent. We will have a diverse set of low-risk businesses comprised of a best in class network of crude oil, liquids and natural gas pipelines, a large portfolio of strong, regulated gas distribution utilities and a growing renewable power generation platform. The combined company will be positioned to provide integrated services and first and last mile connectivity to virtually all key liquids and gas supply basins and demand markets in North America."
Mr. Monaco added: "A significant amount of collaboration has allowed us to get to this point. The two companies have completed extensive planning in advance of closing and will be focused on a successful integration. Our teams are well prepared to ensure a smooth transition for our customers, employees and other stakeholders, while maintaining a sharp focus on our number one priority – the safety and reliability of our networks. We look forward to realizing the benefits of this strategic combination while delivering the energy people want and need."
Spectra Energy Chief Executive Officer Greg Ebel, who will become chairman of Enbridge once the Transaction closes, said: "By combining the strength of Enbridge with the strength of Spectra Energy, we are creating an unrivaled company that will provide superior value – now and into the future – for our customers, employees, investors and communities. The Transaction will significantly enhance and extend the dividend growth outlook for Spectra Energy shareholders. No other company in our industry will have this kind of high-return, low-risk model that investors value so highly."
Financial Matters
Enbridge expects the Transaction will support its 12 to 14 percent secured ACFFO per share CAGR guidance over the 2015-2019 planning horizon, and will be strongly additive to the Company's growth outlook beyond that timeframe.
As previously announced, following the closing of the Transaction, Enbridge will have a substantial capital project portfolio, including C$27 billion (US$21 billion) of commercially secured growth projects coming into service between 2017 and 2019, and C$48 billion probability-weighted development project portfolio. The growth program is expected to enable the Company to deliver highly visible ongoing dividend growth of 10 to 12 percent per year, on average, through 2024, while maintaining a conservative payout of 50 to 60 percent of ACFFO.
Enbridge is committed to maintaining its financial strength. In order to further reinforce its financial position and help support continued strong investment grade credit ratings, the Transaction was structured as a share for share exchange. No incremental debt will be incurred on closing of the Transaction. In addition, at the time the Transaction was announced last September, Enbridge set a target of monetizing C$2 billion of non-core assets to provide additional financial strength and flexibility. Approximately C$1.7 billion of that C$2 billion target has been achieved through the sale of its South Prairie Region assets and agreements to sell additional non-core assets. Enbridge management has identified other potential divestments that should enable the Company to meet or exceed this target. No follow-on equity offerings by Enbridge are required to complete funding of the combined secured C$27 billion (US$21 billion) secured growth program through 2019.
The combination is expected to achieve annual run-rate synergies of pre-tax C$540 million (US$415 million) by 2019. Detailed plans have been developed to capture a good portion of these synergies in the current year. In addition, the Company expects that approximately C$260 million (US$200 million) of tax savings can be achieved through utilization of tax losses commencing in 2019.
Guidance for the combined company for 2017 will be provided in conjunction with the first quarter financial results. Enbridge expects to provide a business and integration update for investors in June 2017 and is planning an investor conference in December, at which time additional detail on the Company's strategic priorities and long-range financial outlook will be provided.
Governance and Employee Matters
Enbridge announced today a new Board of Directors that will take effect as of the closing of the Transaction. Under the terms of the Transaction, the Board of Directors of Enbridge will consist of eight members designated by Enbridge, including Mr. Monaco (President and CEO), and five members designated by Spectra Energy, including Mr. Ebel as chairman of the board. Besides Mr. Monaco, the directors designated by Enbridge, all of whom currently serve as directors of Enbridge, are Marcel R. Coutu, J. Herb England, Charles W. Fischer, V. Maureen Kempston Darkes, Rebecca B. Roberts, Dan C. Tutcher and Catherine L. Williams. In addition to Mr. Ebel (Chair), the directors designated by Spectra Energy are Pamela L. Carter, Clarence P. Cazalot, Jr., Michael McShane and Michael E.J. Phelps, all of whom currently serve as directors of Spectra Energy.
Concurrent with the closing of the Transaction, David A. Arledge (Chair), James J. Blanchard and George K. Petty will be retiring from the Enbridge board while F. Anthony Comper, Austin A. Adams, Joseph Alvarado, Peter B. Hamilton, Miranda C. Hubbs and Michael G. Morris will be retiring from the Spectra Energy board. Both Mr. Monaco and Mr. Ebel thank those retiring board members for their contributions to the success of their respective companies. "We're grateful to those retiring board members from the two companies for their leadership, dedication, and guidance. They have provided great stewardship to help build the two very strong organizations that we are combining."
Mr. Monaco added that he looks forward to welcoming Spectra Energy employees to Enbridge. "We're bringing together two exceptional teams with strong values and a shared approach to safety, our stakeholders and our communities. We will move forward together, building from our proven strengths to position Enbridge to deliver infrastructure growth opportunities for our customers and continue to create value for our shareholders."
As previously announced, the headquarters of the combined company will be in Calgary, Alberta. Houston, Texas, will be the combined company's gas pipelines business unit center; Edmonton, Alberta, will remain the business unit center for liquids pipelines, with the business unit centers for gas distribution continuing to be based in Ontario. The combined company at close will have approximately 17,000 employees.
Dividends and Stock Listings
Spectra Energy will make its final common share dividend payment on March 1, 2017, to Spectra shareholders of record on February 15, 2017. In January, Enbridge announced a 10 percent increase in its quarterly common share dividend payable on March 1, 2017, to shareholders of record on February 15, 2017. It is expected that the first quarterly common share dividend post-combination will be payable on June 1, 2017, subject to board approval, and is expected to include a further increase to bring the aggregate increase in Enbridge's quarterly dividend to approximately 15 percent above the prevailing quarterly rate in 2016.
Trading in shares of Spectra Energy on the New York Stock Exchange (NYSE) will be suspended effective as of the opening of trading on February 27, 2017. In connection with the completion of the Transaction, the shares of common stock of Spectra Energy will be delisted from the NYSE and will be de-registered under the U.S. Securities Exchange Act of 1934. Common shares of Enbridge will continue to trade on both the NYSE and the Toronto Stock Exchange under the symbol "ENB".
Enbridge Energy Partners, L.P. (NYSE: EEP) and Spectra Energy Partners, LP (NYSE: SEP) will continue to be publicly traded partnerships headquartered in Houston, Texas. Enbridge Income Fund Holdings Inc. (TSX: ENF) will remain a publicly traded corporation headquartered in Calgary, Alberta. At Transaction closing, Midcoast Energy Partners, L.P. (NYSE: MEP)(Midcoast) will be a publicly traded partnership headquartered in Houston; however as announced on January 27, 2017, all of the outstanding publicly held common units of Midcoast are expected to be acquired by an Enbridge affiliate during the second quarter of 2017 and Midcoast would cease to be a publicly listed entity at that time.
About Enbridge Inc.
Enbridge, a Canadian company, exists to fuel people's quality of life, and has done so for more than 65 years. A North American leader in delivering energy, Enbridge has been ranked on the Global 100 Most Sustainable Corporations index for the past eight years. Enbridge operates the world's longest crude oil and liquids transportation system across Canada and the United States and has a significant and growing involvement in natural gas gathering, transmission and midstream business, as well as an increasing involvement in power transmission. Enbridge owns and operates Canada's largest natural gas distribution company, serving residential, commercial and industrial customers in Ontario, Quebec, New Brunswick and New York State. Enbridge has interests in approximately 2,500 MW of net renewable and alternative generating capacity, and continues to expand into wind, solar and geothermal power. Enbridge employs approximately 9,200 people, primarily in Canada and the United States and has been ranked 15 times on the annual Canada's Top 100 Employers list, including the 2017 index. Enbridge's common shares trade on the Toronto and New York stock exchanges under the symbol ENB. For more information, visit www.enbridge.com.
ABOUT SPECTRA ENERGY CORP
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include approximately 21,000 miles of natural gas and crude oil pipelines; approximately 300 billion cubic feet of natural gas storage; 5.6 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners, LP (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, LLC, which is the general partner of DCP Midstream, LP (NYSE: DCP), the largest natural gas liquids producer and the largest natural gas processor in the United States, and the largest gathering and processing master limited partnership in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com.
FORWARD-LOOKING INFORMATION
This news release includes certain forward looking statements and information (FLI) to provide Enbridge and Spectra Energy shareholders and potential investors with information about Enbridge, Spectra Energy and their respective subsidiaries and affiliates, including each company's management's respective assessment of Enbridge, Spectra Energy and their respective subsidiaries' future plans and operations, which FLI may not be appropriate for other purposes. FLI is typically identified by words such as "anticipate", "expect", "project", "estimate", "forecast", "plan", "intend", "target", "believe", "likely" and similar words suggesting future outcomes or statements regarding an outlook. All statements other than statements of historical fact may be FLI. In particular, this news release contains FLI pertaining to, but not limited to, information with respect to the following: the Transaction; the combined company's scale, financial flexibility and growth program; future business prospects and performance; annual cost, revenue and financing benefits; the expected ACFFO per share growth; future shareholder returns; annual dividend growth and anticipated dividend increases and payment dates; payout of distributable cash flow; financial strength and ability to fund capital program and compete for growth projects; credit ratings; run-rate and tax synergies; potential asset dispositions; leadership and governance structure; head office and business center locations; delisting and de-registration of the common stock of Spectra Energy; the proposed merger of Midcoast with an indirect wholly-owned subsidiary of Enbridge; and investor communications plans.
Although we believe that the FLI is reasonable based on the information available today and processes used to prepare it, such statements are not guarantees of future performance and you are cautioned against placing undue reliance on FLI. By its nature, FLI involves a variety of assumptions, which are based upon factors that may be difficult to predict and that may involve known and unknown risks and uncertainties and other factors which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by these FLI, including, but not limited to, the following: the realization of anticipated benefits and synergies of the Transaction and the timing thereof; the success of integration plans; the focus of management time and attention on the Transaction and other disruptions arising from the Transaction; expected future ACFFO; estimated future dividends; financial strength and flexibility; debt and equity market conditions, including the ability to access capital markets on favourable terms or at all; cost of debt and equity capital; expected supply and demand for crude oil, natural gas, natural gas liquids and renewable energy; prices of crude oil, natural gas, natural gas liquids and renewable energy; economic and competitive conditions; expected exchange rates; inflation; interest rates; changes in tax laws and tax rates; credit ratings; completion of growth projects; anticipated in-service dates; capital project funding; success of hedging activities; the ability of management of Enbridge, its subsidiaries and affiliates to execute key priorities, including those in connection with the Transaction and the proposed merger of Midcoast with an indirect wholly-owned subsidiary of Enbridge; availability and price of labour and construction materials; operational performance and reliability; customer, shareholder, regulatory and other stakeholder approvals and support; regulatory and legislative decisions and actions; public opinion; and weather. We caution that the foregoing list of factors is not exhaustive. Additional information about these and other assumptions, risks and uncertainties can be found in applicable filings with Canadian and U.S. securities regulators, including any proxy statement, prospectus or registration statement filed in connection with the Transaction. Due to the interdependencies and correlation of these factors, as well as other factors, the impact of any one assumption, risk or uncertainty on FLI cannot be determined with certainty.
Except to the extent required by law, we assume no obligation to publicly update or revise any FLI, whether as a result of new information, future events or otherwise. All FLI in this news release is expressly qualified in its entirety by these cautionary statements.
NON-GAAP MEASURES
This news release makes reference to non-GAAP measures, including ACFFO and ACFFO per share. ACFFO is defined as cash flow provided by operating activities before changes in operating assets and liabilities (including changes in environmental liabilities) less distributions to non-controlling interests and redeemable non-controlling interests, preference share dividends and maintenance capital expenditures, and further adjusted for unusual, non-recurring or non-operating factors. Management of Enbridge believes the presentation of these measures gives useful information to investors and shareholders as they provide increased transparency and insight into the performance of Enbridge. Management of Enbridge uses ACFFO to assess performance and to set its dividend payout target. These measures are not measures that have a standardized meaning prescribed by generally accepted accounting principles in the United States of America (U.S. GAAP) and may not be comparable with similar measures presented by other issuers. Additional information on Enbridge's use of non-GAAP measures can be found in Enbridge's Management's Discussion and Analysis (MD&A) available on Enbridge's website and www.sedar.com.
SOURCE Spectra Energy Corp; Enbridge Inc.
HOUSTON, Feb. 17, 2017 /PRNewswire/ -- Spectra Energy Partners, LP (NYSE: SEP) today reported net income of $327 million, including net income from controlling interests of $301 million, for the fourth quarter ended December 31, 2016, with diluted earnings per limited partner unit of $0.70. For the year, net income was $1.24 billion, including net income from controlling interests of $1.16 billion, with diluted earnings per limited partner unit of $2.84. The fourth quarter and yearly results included non-recurring special items of $36 million and $80 million, respectively, which decreased diluted earnings per limited partner unit by $0.11 for the quarter and $0.26 for the year.
Highlights:
Fourth quarter 2016 ongoing DCF was $330 million, compared with $260 million in the prior-year quarter. For the year, ongoing DCF was $1.3 billion, a $90 million increase from $1.21 billion in 2015. Distributions per limited partner unit for 2016 were $2.63, compared with $2.43 per limited partner unit in 2015.
For the quarter, ongoing earnings before interest, taxes, depreciation and amortization (EBITDA) were $510 million, compared with $457 million in the prior-year quarter. For the year, ongoing EBITDA was $1.87 billion, compared with $1.83 billion in 2015.
Ongoing net income from controlling interests was $337 million for the quarter, or $0.81 diluted earnings per limited partner unit, compared with $305 million, or $0.82 diluted earnings per limited partner unit, in the prior-year quarter. Net income from controlling interests was $301 million for the quarter, or $0.70 diluted earnings per limited partner unit, compared with $304 million, or $0.82 diluted earnings per limited partner unit, in the prior-year quarter.
For the year, ongoing net income from controlling interests was $1.24 billion, or $3.10 diluted earnings per limited partner unit, compared with $1.24 billion, or $3.33 diluted earnings per limited partner unit, in 2015. Net income from controlling interests was $1.16 billion in 2016, or $2.84 diluted earnings per limited partner unit, compared with $1.23 billion, or $3.30 diluted earnings per limited partner unit, in 2015.
CEO COMMENT
"Spectra Energy Partners posted strong quarter and year-end results that continue to reflect our ability to generate solid cash flows and increased earnings. The expansion projects we placed into service in 2016 are driving additional value for our investors, as earlier this month we announced our 37th consecutive quarterly distribution increase," said Greg Ebel, chief executive officer, Spectra Energy Partners.
"While the General Partner of Spectra Energy Partners will change once the merger with Enbridge is complete, the stable underpinnings of our business will not. Spectra Energy Partners' strategic and competitive asset footprint – with virtually no direct commodity or volume risk, high-quality demand-pull customers, excellent liquidity, and access to favorable capital markets – will continue to generate steady cash flows. For 2017, we plan to continue our quarterly penny-and-a-quarter distribution increases while maintaining DCF coverage in our targeted range of 1.05 to 1.15 times."
SEGMENT RESULTS
U.S. Transmission
Ongoing EBITDA from U.S. Transmission was $466 million in fourth quarter 2016, compared with $413 million in fourth quarter 2015. Fourth quarter 2016 results reflect increased earnings from expansion projects placed into service in the second half of 2016, as well as higher Allowance for Funds Used During Construction (AFUDC), primarily from the Sabal Trail project. Fourth quarter 2016 results exclude a special item of $36 million for inspection and repair efforts associated with the Texas Eastern pipeline incident.
For the year 2016, ongoing EBITDA for U.S. Transmission was $1.72 billion, compared with $1.61 billion in 2015. The 2016 period excludes a special item of $80 million for inspection and repair efforts associated with the Texas Eastern pipeline incident. The 2015 period excludes a special item of $9 million related to a non-cash impairment of the Ozark Gas Gathering asset.
Liquids
Liquids EBITDA was $63 million in fourth quarter 2016, compared with $62 million in fourth quarter 2015. The increase is attributable to expansion revenue from the Express Enhancement project placed into service in October 2016, which was offset by the absence of equity earnings from Sand Hills and Southern Hills natural gas liquids (NGL) pipelines, which Spectra Energy Partners owned through October 2015.
For the year 2016, EBITDA for Liquids was $237 million, compared with $283 million in 2015.
Other
"Other" net expenses were $19 million in fourth quarter 2016, compared with $18 million in fourth quarter 2015.
For the year 2016, net expenses were $82 million, compared with $66 million in 2015.
Interest Expense
Interest expense was $59 million in fourth quarter 2016, compared with $60 million in fourth quarter 2015.
For the year 2016, interest expense was $224 million, compared with $239 million in 2015.
Liquidity and Capital Expenditures
Total debt outstanding at Spectra Energy Partners as of December 31, 2016, was $7.2 billion. Available liquidity at the end of the quarter was $2.1 billion. Spectra Energy Partners' capital expansion program continues to be funded through a combination of debt and equity.
Including contributions from noncontrolling interests of $743 million, total capital and investment spending for the year was approximately $1.8 billion, and consisted of about $1.5 billion of growth capital expenditures and about $268 million of maintenance capital expenditures. Maintenance capital expenditures include a $28 million special item related to the Texas Eastern pipeline incident.
In 2016, Spectra Energy Partners successfully completed an $800 million debt offering. Also in 2016, Spectra Energy Partners received net proceeds of $579 million through its "At the Market" (ATM) equity issuance program, with $106 million raised in the fourth quarter, plus an additional $501 million from equity issuances to its general partner.
Spectra Energy Partners expects to file its 2016 10-K with the Securities and Exchange Commission on or before March 1, 2017.
EXPANSION PROJECT UPDATES
Spectra Energy Partners' 2016 capital expansion program concluded with six projects placed into service, representing nearly $1.5 billion of capital expansion, including:
Projects Scheduled for 2017 In-Service
Construction on Sabal Trail continues to progress, and the project remains on track to be in-service during the first half of 2017.
The Access South, Adair Southwest, and Lebanon Extension projects commenced construction in January, and are scheduled to be placed in-service in the second half of this year.
The second phase of the Gulf Markets Expansion project continues to advance toward a second half of 2017 in-service date. The project has received all its regulatory permits and is under construction.
Atlantic Bridge received its FERC Certificate of Public Convenience and Necessity in January, and is targeting initial in-service in the fourth quarter of this year.
NEXUS and TEAL anticipate receiving their FERC certificates shortly after FERC again has a quorum. Subject to a prompt issuance of these certificates, the project team has a safe and environmentally responsible plan to place the facilities into service in the fourth quarter of 2017, within the prescribed construction windows, in order to meet shipper requirements. Infrastructure projects are a top priority for the new administration and we are confident it will take swift action to restore a FERC quorum.
Projects Scheduled for 2018 In-Service
The STEP project continues to target in-service in the second half of 2018.
The PennEast project continues to advance as well. FERC is expected to issue its Final Environmental Impact Statement (FEIS) in April, and the project is still targeting a late-2018 in-service date.
Projects Scheduled for 2019 In-Service
The Stratton Ridge project filed its FERC application earlier this month and remains on schedule for in-service in the first half of 2019.
Projects in Development
The Access Northeast project would help alleviate New England's well-documented issues of energy reliability and cost volatility. The project's partners continue to pursue a viable commercial and operational model to provide clean-burning natural gas to gas-fired electric generators in New England in support of the region's emission goals.
While the project has been in discussions on other contracting strategies, including participation among gas distribution companies, the complexity of any regional solution requires clarity among the New England states regarding the support and legal authority for electric distribution companies to contract for project capacity. When the states achieve alignment – in the form of consistent legislative or other legal authority supporting natural gas infrastructure for electric reliability – the project's partners remain able and committed to bringing Access Northeast to New England consumers.
With increasing reliance on natural gas for electric generation, this project provides a critical opportunity to improve New England's future energy reliability, cost volatility and competitiveness. Access Northeast's partners will continue working with state and federal agencies, as well as other stakeholders, to help close gaps in legal authority that are currently prohibiting the region from achieving its significant environmental goals, as the current system configuration requires the continued operation of older, higher emitting generation units, such as coal and oil plants.
Spectra Energy Partners conducted solicitations of interest on the Express Pipeline and Platte Pipeline in late 2016, and is currently conducting subsequent solicitations, which will close by the end of February.
Spectra Energy Partners has secured a commitment from an industrial market shipper in the STX Zone of its Texas Eastern system, and on February 15 launched a Texas-Louisiana Markets open season, which will close in early March, to solicit additional interest.
Non-GAAP Financial Measures
We use ongoing net income from controlling interests as a measure to evaluate operations of the partnership. This measure is a non-GAAP financial measure as it represents net income from controlling interests, excluding special items. Special items represent certain charges and credits which we believe will not be recurring on a regular basis. We believe that the presentation of ongoing net income from controlling interests provides useful information to investors, as it allows investors to more accurately compare our ongoing performance across periods. The most directly comparable GAAP measure for ongoing net income from controlling interests is net income from controlling interests.
We use earnings from continuing operations before interest, income taxes, and depreciation and amortization (EBITDA) and ongoing EBITDA, non-GAAP financial measures, as performance measures for Spectra Energy Partners, LP. Ongoing EBITDA represents EBITDA, excluding special items. We believe that the presentation of EBITDA and ongoing EBITDA provides useful information to investors, as it allows investors to more accurately compare Spectra Energy Partners, LP's performance across periods. The most directly comparable GAAP measure for EBITDA and ongoing EBITDA for Spectra Energy Partners, LP is net income.
The primary performance measures used by us to evaluate segment performance are segment EBITDA and Other EBITDA. We consider segment EBITDA and Other EBITDA, which are the GAAP measures used to report segment results, to be good indicators of each segment's operating performance from its continuing operations as they represent the results of our segments' operations before depreciation and amortization without regard to financing methods or capital structures. Our segment EBITDA and Other EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate EBITDA in the same manner.
We also use ongoing segment EBITDA as a measure of performance. Ongoing segment EBITDA is a non-GAAP financial measure, as it represents reported segment EBITDA, excluding special items. We believe that the presentation of ongoing segment EBITDA provides useful information to investors, as it allows investors to more accurately compare a segment's ongoing performance across periods. The most directly comparable GAAP measure for ongoing segment EBITDA is segment EBITDA.
We also present Distributable Cash Flow (DCF), which is a non-GAAP financial measure. We believe that the presentation of DCF provides useful information to investors, as it represents the cash generation capabilities of the partnership to support distribution growth. We also use ongoing DCF, which is a non-GAAP financial measure, as it represents DCF, excluding the cash effect of special items. The most directly comparable GAAP measure for DCF and ongoing DCF is net income. We also use DCF coverage, which is a non-GAAP financial measure, as it represents DCF divided by distributions declared on partnership units. The most directly comparable GAAP measure for DCF coverage is Earnings-Per-Unit (EPU).
The non-GAAP financial measures presented in this press release should not be considered in isolation or as an alternative to financial measures presented in accordance with GAAP. These non-GAAP financial measures may not be comparable to similarly titled measures of other partnerships because other partnerships may not calculate these measures in the same manner.
Forward-Looking Statements
This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on our beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an effect on rate structure, and affect the speed at and degree to which competition enters the natural gas and oil industries; outcomes of litigation and regulatory investigations, proceedings or inquiries; weather and other natural phenomena, including the economic, operational and other effects of hurricanes and storms; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; general economic conditions, including the risk of a prolonged economic slowdown or decline, or the risk of delay in a recovery, which can affect the long-term demand for natural gas and oil and related services; potential effects arising from terrorist attacks and any consequential or other hostilities; changes in environmental, safety and other laws and regulations; the development of alternative energy resources; results and costs of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general market and economic conditions; increases in the cost of goods and services required to complete capital projects; declines in the market prices of equity and debt securities and resulting funding requirements for defined benefit pension plans; growth in opportunities, including the timing and success of efforts to develop U.S. and Canadian pipeline, storage, gathering, processing and other related infrastructure projects and the effects of competition; the performance of natural gas and oil transmission and storage, distribution, and gathering and processing facilities; the extent of success in connecting natural gas and oil supplies to gathering, processing and transmission systems and in connecting to expanding gas and oil markets; the effects of accounting pronouncements issued periodically by accounting standard-setting bodies; conditions of the capital markets during the periods covered by forward-looking statements; and the ability to successfully complete merger, acquisition or divestiture plans; regulatory or other limitations imposed as a result of a merger, acquisition or divestiture; and the success of the business following a merger, acquisition or divestiture. These factors, as well as additional factors that could affect our forward-looking statements, are described under the headings "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Information" in our 2015 Form 10-K, filed on February 25, 2016, and in our other filings made with the Securities and Exchange Commission (SEC), which are available via the SEC's website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. All forward-looking statements in this release are made as of the date hereof and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Spectra Energy Partners, LP (NYSE: SEP) is a Houston-based master limited partnership, formed by Spectra Energy Corp (NYSE: SE). SEP is one of the largest pipeline MLPs in the United States and connects growing supply areas to high-demand markets for natural gas and crude oil. These assets include more than 15,000 miles of transmission pipelines, approximately 170 billion cubic feet of natural gas storage, and approximately 5.6 million barrels of crude oil storage.
Spectra Energy Partners, LP | ||||||||||||||||
Quarterly Highlights | ||||||||||||||||
December 2016 | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In millions, except per-unit amounts) | ||||||||||||||||
Reported - These results include the impact of special items | ||||||||||||||||
Quarters Ended |
Years Ended | |||||||||||||||
December 31, |
December 31, | |||||||||||||||
2016 |
2015 |
2016 |
2015 | |||||||||||||
INCOME |
||||||||||||||||
Operating Revenues |
$ |
663 |
$ |
634 |
$ |
2,533 |
$ |
2,455 |
||||||||
Total Reportable Segment EBITDA |
493 |
475 |
1,876 |
1,882 |
||||||||||||
Net Income - Controlling Interests |
301 |
304 |
1,161 |
1,225 |
||||||||||||
EBITDA BY BUSINESS SEGMENT |
||||||||||||||||
U.S. Transmission |
$ |
430 |
$ |
413 |
$ |
1,639 |
$ |
1,599 |
||||||||
Liquids |
63 |
62 |
237 |
283 |
||||||||||||
Total Reportable Segment EBITDA |
493 |
475 |
1,876 |
1,882 |
||||||||||||
Other EBITDA |
(19) |
(18) |
(82) |
(66) |
||||||||||||
Total Reportable Segment and Other EBITDA |
$ |
474 |
$ |
457 |
$ |
1,794 |
$ |
1,816 |
||||||||
PARTNERS' CAPITAL |
||||||||||||||||
Declared Cash Distribution per Limited Partner Unit |
$ |
0.68875 |
$ |
0.63875 |
$ |
2.6800 |
$ |
2.4800 |
||||||||
Weighted Average Units Outstanding |
||||||||||||||||
Limited Partner Units |
307 |
290 |
299 |
296 |
||||||||||||
General Partner Units |
6 |
6 |
6 |
6 |
||||||||||||
DISTRIBUTABLE CASH FLOW |
||||||||||||||||
Distributable Cash Flow |
$ |
271 |
$ |
260 |
$ |
1,187 |
$ |
1,205 |
||||||||
Coverage Ratio |
1.1x |
1.2x | ||||||||||||||
CAPITAL AND INVESTMENT EXPENDITURES (a) |
||||||||||||||||
Capital expenditures - U.S. Transmission |
$ |
2,263 |
$ |
1,857 |
||||||||||||
Capital expenditures - Liquids |
71 |
26 |
||||||||||||||
Investment expenditures - Sand Hills/Southern Hills/SESH/Penn East/Nexus
|
251 |
124 |
||||||||||||||
Total |
$ |
2,585 |
$ |
2,007 |
||||||||||||
U.S. TRANSMISSION |
||||||||||||||||
Operating Revenues |
$ |
565 |
$ |
541 |
$ |
2,167 |
$ |
2,087 |
||||||||
Operating Expenses |
||||||||||||||||
Operating, Maintenance and Other |
207 |
184 |
779 |
680 |
||||||||||||
Other Income and Expenses |
72 |
56 |
251 |
192 |
||||||||||||
EBITDA |
$ |
430 |
$ |
413 |
$ |
1,639 |
$ |
1,599 |
||||||||
LIQUIDS |
||||||||||||||||
Operating Revenues |
$ |
98 |
$ |
93 |
$ |
366 |
$ |
368 |
||||||||
Operating Expenses |
||||||||||||||||
Operating, Maintenance and Other |
36 |
36 |
130 |
141 |
||||||||||||
Other Income and Expenses |
1 |
5 |
1 |
56 |
||||||||||||
EBITDA |
$ |
63 |
$ |
62 |
$ |
237 |
$ |
283 |
||||||||
Express Pipeline Revenue Receipts, MBbl/d (b) |
259 |
239 |
241 |
239 |
||||||||||||
Platte PADD II Deliveries, MBbl/d |
127 |
140 |
130 |
162 |
||||||||||||
Canadian Dollar Exchange Rate, Average |
1.33 |
1.34 |
1.33 |
1.28 |
||||||||||||
December 31, |
December 31, | |||||||||||||||
2016 |
2015 | |||||||||||||||
Debt |
$ |
7,213 |
$ |
6,604 |
||||||||||||
Actual Units Outstanding (c) |
315 |
291 |
||||||||||||||
(a) Excludes contributions received from noncontrolling interests of $641 million in 2016 and $216 million in 2015. Excludes sale of Sabal Trail interest of $102 million in 2016.
| ||||||||||||||||
(b) Thousand barrels per day. | ||||||||||||||||
(c) Increase in 2016 resulted from the "At the Market" equity issuance program and equity issuance to Spectra Energy Corp in April 2016. | ||||||||||||||||
Spectra Energy Partners, LP | ||||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
(In millions) | ||||||||||||||||||
Reported - These results include the impact of special items | ||||||||||||||||||
Quarters Ended |
Years Ended | |||||||||||||||||
2016 |
2015 |
2016 |
2015 | |||||||||||||||
Operating Revenues |
$ |
663 |
$ |
634 |
$ |
2,533 |
$ |
2,455 |
||||||||||
Operating Expenses |
344 |
313 |
1,305 |
1,182 |
||||||||||||||
Operating Income |
319 |
321 |
1,228 |
1,273 |
||||||||||||||
Other Income and Expenses |
72 |
60 |
253 |
243 |
||||||||||||||
Interest Expense |
59 |
60 |
224 |
239 |
||||||||||||||
Earnings Before Income Taxes |
332 |
321 |
1,257 |
1,277 |
||||||||||||||
Income Tax Expense |
5 |
4 |
18 |
12 |
||||||||||||||
Net Income |
327 |
317 |
1,239 |
1,265 |
||||||||||||||
Net Income - Noncontrolling Interests |
26 |
13 |
78 |
40 |
||||||||||||||
Net Income - Controlling Interests |
$ |
301 |
$ |
304 |
$ |
1,161 |
$ |
1,225 |
Spectra Energy Partners, LP | |||||||||||
Condensed Consolidated Balance Sheets | |||||||||||
(Unaudited) | |||||||||||
(In millions) | |||||||||||
December 31, |
December 31, | ||||||||||
2016 |
2015 | ||||||||||
ASSETS |
|||||||||||
Current Assets |
$ |
660 |
$ |
544 |
|||||||
Investments and Other Assets |
4,469 |
4,180 |
|||||||||
Net Property, Plant and Equipment |
16,092 |
13,837 |
|||||||||
Regulatory Assets and Deferred Debits |
385 |
290 |
|||||||||
Total Assets |
$ |
21,606 |
$ |
18,851 |
|||||||
LIABILITIES AND EQUITY |
|||||||||||
Current Liabilities |
$ |
1,779 |
$ |
1,471 |
|||||||
Long-term Debt |
6,223 |
5,845 |
|||||||||
Deferred Credits and Other Liabilities |
200 |
189 |
|||||||||
Equity |
13,404 |
11,346 |
|||||||||
Total Liabilities and Equity |
$ |
21,606 |
$ |
18,851 |
|||||||
Spectra Energy Partners, LP | |||||||||||
Distributable Cash Flow | |||||||||||
(Unaudited) | |||||||||||
(Dollars in Millions, except where noted)
Reported – These results include the impact of special items | |||||||||||
Quarters Ended |
Years Ended |
||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||
Net Income |
$ 327 |
$ 317 |
$ 1,239 |
$ 1,265 |
|||||||
Add: |
|||||||||||
Interest expense |
59 |
60 |
224 |
239 |
|||||||
Income tax expense |
5 |
4 |
18 |
12 |
|||||||
Depreciation and amortization |
82 |
75 |
314 |
295 |
|||||||
Foreign currency loss |
1 |
1 |
1 |
6 |
|||||||
Less: |
|||||||||||
Third party interest income |
- |
- |
2 |
1 |
|||||||
EBITDA |
474 |
457 |
1,794 |
1,816 |
|||||||
Add: |
|||||||||||
Earnings from equity investments |
(35) |
(33) |
(127) |
(167) |
|||||||
Distributions from equity investments (a) |
28 |
24 |
160 |
207 |
|||||||
Non-cash impairment at Ozark Gas Gathering |
- |
- |
- |
9 |
|||||||
Other |
1 |
4 |
13 |
12 |
|||||||
Less: |
|||||||||||
Interest expense |
59 |
60 |
224 |
239 |
|||||||
Equity AFUDC |
37 |
26 |
121 |
76 |
|||||||
Net cash paid for income taxes |
3 |
4 |
10 |
12 |
|||||||
Distributions to non-controlling interests |
8 |
8 |
30 |
31 |
|||||||
Maintenance capital expenditures |
90 |
94 |
268 |
314 |
|||||||
Total Distributable Cash Flow |
$ 271 |
$ 260 |
$ 1,187 |
$ 1,205 |
|||||||
Distributions (b) |
$ 1,113 |
$ 976 |
|||||||||
Coverage - DCF/Distributions |
1.1X |
1.2X |
|||||||||
(a) Excludes $403 million of distributions for the twelve month period ended December 31, 2015. | |||||||||||
(b) Includes a $4 million reduction of distribution to Spectra Energy (as holder of incentive distribution rights) per quarter beginning in December 2015. |
Spectra Energy Partners, LP |
|||||||||||||||
Reported to Ongoing Earnings Reconciliation |
|||||||||||||||
December 2016 Quarter-to-Date |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(In millions) |
|||||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND |
Reported Earnings |
Less: Special Items |
Ongoing Earnings |
||||||||||||
U.S. Transmission |
$ |
430 |
$ |
(36) |
A |
$ |
466 |
||||||||
Liquids |
63 |
— |
63 |
||||||||||||
Total Reportable Segment EBITDA |
493 |
(36) |
529 |
||||||||||||
Other |
(19) |
— |
(19) |
||||||||||||
Total Reportable Segment and other EBITDA |
$ |
474 |
$ |
(36) |
$ |
510 |
|||||||||
EARNINGS |
|||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
474 |
$ |
(36) |
$ |
510 |
|||||||||
Depreciation and Amortization |
(82) |
— |
(82) |
||||||||||||
Interest Expense |
(59) |
— |
(59) |
||||||||||||
Other Income and Expenses |
(1) |
— |
(1) |
||||||||||||
Income Tax Expense |
(5) |
— |
(5) |
||||||||||||
Total Net Income |
327 |
(36) |
363 |
||||||||||||
Total Net Income - Noncontrolling Interests |
(26) |
— |
(26) |
||||||||||||
Total Net Income - Controlling Interests |
$ |
301 |
$ |
(36) |
$ |
337 |
|||||||||
A - Inspection and repair costs related to Texas Eastern pipeline incident in Pennsylvania.
|
Spectra Energy Partners, LP |
|||||||||||||||
Reported to Ongoing Earnings Reconciliation |
|||||||||||||||
December 2015 Quarter-to-Date |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(In millions) |
|||||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND |
Reported Earnings |
Less: Special Items |
Ongoing Earnings |
||||||||||||
U.S. Transmission |
$ |
413 |
$ |
— |
$ |
413 |
|||||||||
Liquids |
62 |
— |
62 |
||||||||||||
Total Reportable Segment EBITDA |
475 |
— |
475 |
||||||||||||
Other |
(18) |
— |
(18) |
||||||||||||
Total Reportable Segment and other EBITDA |
$ |
457 |
$ |
— |
$ |
457 |
|||||||||
EARNINGS |
|||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
457 |
$ |
— |
$ |
457 |
|||||||||
Depreciation and Amortization |
(75) |
— |
(75) |
||||||||||||
Interest Expense |
(60) |
(1) |
A |
(59) |
|||||||||||
Other Income and Expenses |
(1) |
— |
(1) |
||||||||||||
Income Tax Expense |
(4) |
— |
(4) |
||||||||||||
Total Net Income |
317 |
(1) |
318 |
||||||||||||
Total Net Income - Noncontrolling Interests |
(13) |
— |
(13) |
||||||||||||
Total Net Income - Controlling Interests |
$ |
304 |
$ |
(1) |
$ |
305 |
|||||||||
A - Net write-off of regulatory assets and liabilities at Ozark Gas Transmission due to discontinuance of regulatory accounting. |
Spectra Energy Partners, LP |
|||||||||||||||
Reported to Ongoing Earnings Reconciliation |
|||||||||||||||
December 2016 Year-to-Date |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(In millions) |
|||||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND |
Reported Earnings |
Less: Special Items |
Ongoing Earnings |
||||||||||||
U.S. Transmission |
$ |
1,639 |
$ |
(80) |
A |
$ |
1,719 |
||||||||
Liquids |
237 |
— |
237 |
||||||||||||
Total Reportable Segment EBITDA |
1,876 |
(80) |
1,956 |
||||||||||||
Other |
(82) |
— |
(82) |
||||||||||||
Total Reportable Segment and other EBITDA |
$ |
1,794 |
$ |
(80) |
$ |
1,874 |
|||||||||
EARNINGS |
|||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
1,794 |
$ |
(80) |
$ |
1,874 |
|||||||||
Depreciation and Amortization |
(314) |
— |
(314) |
||||||||||||
Interest Expense |
(224) |
— |
(224) |
||||||||||||
Other Income and Expenses |
1 |
— |
1 |
||||||||||||
Income Tax Expense |
(18) |
— |
(18) |
||||||||||||
Total Net Income |
1,239 |
(80) |
1,319 |
||||||||||||
Total Net Income - Noncontrolling Interests |
(78) |
— |
(78) |
||||||||||||
Total Net Income - Controlling Interests |
$ |
1,161 |
$ |
(80) |
$ |
1,241 |
|||||||||
A - Inspection and repair costs related to Texas Eastern pipeline incident in Pennsylvania.
|
Spectra Energy Partners, LP |
|||||||||||||||
Reported to Ongoing Earnings Reconciliation |
|||||||||||||||
December 2015 Year-to-Date |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(In millions) |
|||||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND |
Reported Earnings |
Less: Special Items |
Ongoing Earnings |
||||||||||||
U.S. Transmission |
$ |
1,599 |
$ |
(9) |
A |
$ |
1,608 |
||||||||
Liquids |
283 |
— |
283 |
||||||||||||
Total Reportable Segment EBITDA |
1,882 |
(9) |
1,891 |
||||||||||||
Other |
(66) |
— |
(66) |
||||||||||||
Total Reportable Segment and other EBITDA |
$ |
1,816 |
$ |
(9) |
$ |
1,825 |
|||||||||
EARNINGS |
|||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
1,816 |
$ |
(9) |
$ |
1,825 |
|||||||||
Depreciation and Amortization |
(295) |
— |
(295) |
||||||||||||
Interest Expense |
(239) |
(1) |
B |
(238) |
|||||||||||
Other Income and Expenses |
(5) |
— |
(5) |
||||||||||||
Income Tax Expense |
(12) |
— |
(12) |
||||||||||||
Total Net Income |
1,265 |
(10) |
1,275 |
||||||||||||
Total Net Income - Noncontrolling Interests |
(40) |
— |
(40) |
||||||||||||
Total Net Income - Controlling Interests |
$ |
1,225 |
$ |
(10) |
$ |
1,235 |
|||||||||
A - Non-cash impairment at Ozark Gas Gathering.
|
|||||||||||||||
B - Net write-off of regulatory assets and liabilities at Ozark Gas Transmission due to discontinuance of regulatory accounting. |
Spectra Energy Partners, LP |
|||||||||||||
Reported to Ongoing Distributable Cash Flow Reconciliation |
|||||||||||||
Unaudited |
|||||||||||||
(In millions) |
|||||||||||||
Quarters Ended | |||||||||||||
December 31, 2016 |
December 31, 2015 | ||||||||||||
Reported |
Less: |
Ongoing |
Reported |
Less: |
Ongoing | ||||||||
Net Income |
$ 327 |
$ (36) |
$ 363 |
$ 317 |
$ (1) |
$ 318 | |||||||
Add: |
|||||||||||||
Interest expense |
59 |
- |
59 |
60 |
1 |
59 | |||||||
Income tax expense |
5 |
- |
5 |
4 |
- |
4 | |||||||
Depreciation and amortization |
82 |
- |
82 |
75 |
- |
75 | |||||||
Foreign currency loss |
1 |
- |
1 |
1 |
- |
1 | |||||||
Less: |
|||||||||||||
Third party interest income |
- |
- |
- |
- |
- |
- | |||||||
EBITDA |
474 |
(36) |
510 |
457 |
- |
457 | |||||||
Add: |
|||||||||||||
Earnings from equity investments |
(35) |
- |
(35) |
(33) |
- |
(33) | |||||||
Distributions from equity investments |
28 |
- |
28 |
24 |
- |
24 | |||||||
Other |
1 |
- |
1 |
4 |
1 |
3 | |||||||
Less: |
|||||||||||||
Interest expense |
59 |
- |
59 |
60 |
1 |
59 | |||||||
Equity AFUDC |
37 |
- |
37 |
26 |
- |
26 | |||||||
Net cash paid for income taxes |
3 |
- |
3 |
4 |
- |
4 | |||||||
Distributions to non-controlling interests |
8 |
- |
8 |
8 |
- |
8 | |||||||
Maintenance capital expenditures |
90 |
23 |
67 |
94 |
- |
94 | |||||||
Total Distributable Cash Flow |
$ 271 |
$ (59) |
$ 330 |
$ 260 |
$ - |
$ 260 |
Spectra Energy Partners, LP | ||||||||||||
Reported to Ongoing Distributable Cash Flow Reconciliation | ||||||||||||
Unaudited | ||||||||||||
(In millions) | ||||||||||||
Years Ended | ||||||||||||
December 31, 2016 |
December 31, 2015 | |||||||||||
Reported |
Less: |
Ongoing |
Reported |
Less: |
Ongoing | |||||||
Net Income |
$ 1,239 |
$ (80) |
$ 1,319 |
$ 1,265 |
$ (10) |
$ 1,275 | ||||||
Add: |
||||||||||||
Interest expense |
224 |
- |
224 |
239 |
1 |
238 | ||||||
Income tax expense |
18 |
- |
18 |
12 |
- |
12 | ||||||
Depreciation and amortization |
314 |
- |
314 |
295 |
- |
295 | ||||||
Foreign currency loss |
1 |
- |
1 |
6 |
- |
6 | ||||||
Less: |
||||||||||||
Third party interest income |
2 |
- |
2 |
1 |
- |
1 | ||||||
EBITDA |
1,794 |
(80) |
1,874 |
1,816 |
(9) |
1,825 | ||||||
Add: |
||||||||||||
Earnings from equity investments |
(127) |
- |
(127) |
(167) |
- |
(167) | ||||||
Distributions from equity investments |
160 |
- |
160 |
207 |
- |
207 | ||||||
Non-cash impairment at Ozark Gas Gathering |
- |
- |
- |
9 |
9 |
- | ||||||
Other |
13 |
- |
13 |
12 |
1 |
11 | ||||||
Less: |
||||||||||||
Interest expense |
224 |
- |
224 |
239 |
1 |
238 | ||||||
Equity AFUDC |
121 |
- |
121 |
76 |
- |
76 | ||||||
Net cash paid for income taxes |
10 |
- |
10 |
12 |
- |
12 | ||||||
Distributions to non-controlling interests |
30 |
- |
30 |
31 |
- |
31 | ||||||
Maintenance capital expenditures |
268 |
28 |
240 |
314 |
- |
314 | ||||||
Total Distributable Cash Flow |
$ 1,187 |
$ (108) |
$ 1,295 |
$ 1,205 |
$ - |
$ 1,205 | ||||||
Distributions |
1,113 |
1,113 |
976 |
976 | ||||||||
Coverage - DCF/Distributions |
1.1X |
1.2X |
1.2X |
1.2X |
SOURCE Spectra Energy Partners, LP
HOUSTON, Feb. 17, 2017 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) today reported net income of $208 million, including net income from controlling interests of $115 million, for the fourth quarter ended December 31, 2016, with diluted earnings per share of $0.16. For the year, net income was $1.02 billion, including net income from controlling interests of $693 million, with diluted earnings per share of $1.00. The fourth quarter and full-year results included non-recurring special items of $127 million and $243 million, which had income tax effects of $32 million and $88 million, respectively, and decreased diluted earnings per share by $0.13 for the quarter and $0.19 for the year.
Highlights:
For the quarter, ongoing earnings before interest, taxes, depreciation and amortization (EBITDA) were $742 million, compared with $672 million in the prior-year quarter. For the year, ongoing EBITDA was $2.85 billion, compared with $2.75 billion in 2015.
Ongoing DCF for the quarter was $309 million, compared with $201 million in the same quarter last year, and was $1.38 billion for the year, up from $1.29 billion in 2015.
For the quarter, ongoing net income from controlling interests was $202 million, or $0.29 diluted earnings per share, compared with $189 million, or $0.28 diluted earnings per share, in fourth quarter 2015. Net income from controlling interests was $115 million, or $0.16 diluted earnings per share, compared with $(263) million, or $(0.39) diluted earnings per share, in fourth quarter 2015.
For the year, ongoing net income from controlling interests was $829 million, or $1.19 diluted earnings per share, compared with $775 million, or $1.15 diluted earnings per share, in 2015. Net income from controlling interests was $693 million, or $1.00 diluted earnings per share, compared with $196 million, or $0.29 diluted earnings per share, in 2015.
CEO COMMENT
"2016 was a transformational year for Spectra Energy. I'm proud of all we accomplished, but most importantly that we continued our track record of delivering on our commitments to all our stakeholders," said Greg Ebel, chief executive officer, Spectra Energy.
"We delivered strong DCF and dividend coverage. We successfully executed our 2016 growth plan by placing $2 billion of projects into service, and as an added benefit to our customers and investors, placed some of those projects into service ahead of schedule. We added $2.3 billion of projects to our execution backlog, including the $1.5 billion Valley Crossing Pipeline project. DCP Midstream surpassed its 35-cent NGL break-even target, paving the way for the restructuring and simplification it announced in January 2017. And through all this activity we also maintained a healthy balance sheet.
"Our achievements and accomplishments in 2016, coupled with those of the past decade, have positioned us well for 2017 and beyond, as we move closer to completing our combination with Enbridge, which we expect to occur in the first quarter of this year. While we announced our 14-cent per share annual dividend increase for 2017, the combination with Enbridge will greatly accelerate our dividend growth, from 8 percent annually to 15 percent in 2017 and an expected 10 to 12 percent annually through 2024.
"During these past 10 years, we've expanded our footprint, diversified our asset portfolio, reduced our risk profile and provided a dependable, attractive dividend, creating tremendous shareholder value in that process. We have proven to be a stable, disciplined and reliable investment. It has been an honor to serve as CEO for the past eight years, and I am proud of our company and the great people who have contributed to its success. As incoming chairman of the new Enbridge, I look forward to the company taking our next big step. I fully expect we will deliver even greater benefits to our investors, customers, communities and employees."
SEGMENT RESULTS
Spectra Energy Partners
Ongoing EBITDA from Spectra Energy Partners was $537 million in fourth quarter 2016, compared with $484 million in fourth quarter 2015. Fourth quarter 2016 ongoing results reflect increased earnings from expansion projects placed into service in the second half of 2016 in both the natural gas transmission and liquids businesses, as well as higher Allowance for Funds Used During Construction (AFUDC), primarily from the Sabal Trail project. These increases were offset by the absence of equity earnings from Sand Hills and Southern Hills natural gas liquids (NGL) pipelines, which Spectra Energy Partners owned through October 2015. Earnings from these NGL pipeline interests have been reflected in the Field Services segment. Fourth quarter 2016 results exclude a special item of $36 million for inspection and repair efforts associated with the Texas Eastern pipeline incident.
For the year 2016, ongoing EBITDA for Spectra Energy Partners was $2 billion, compared with $1.9 billion in 2015. The 2016 period excludes a special item of $80 million for inspection and repair efforts associated with the Texas Eastern pipeline incident. The 2015 period excludes a special item of $9 million related to a non-cash impairment of the Ozark Gas Gathering asset.
Distribution
Distribution EBITDA was $122 million in fourth quarter 2016, compared with $113 million in fourth quarter 2015. This increase was mainly due to incremental earnings from the Dawn-Parkway expansion projects and colder weather.
For the years 2016 and 2015, EBITDA for Distribution was $473 million.
Western Canada Transmission & Processing
Ongoing EBITDA from Western Canada Transmission & Processing was $105 million in fourth quarter 2016, compared with $123 million in fourth quarter 2015. The segment's ongoing results largely reflect lower gathering and processing revenues. Fourth quarter 2016 results exclude special items of $31 million, primarily from a non-cash loss on the sale of assets, as well as from continued contract demand credits net of insurance recoveries at our Grizzly Valley operations in British Columbia associated with significant flooding in June. Fourth quarter 2015 results exclude special items of $14 million for employee and overhead reductions and a non-cash asset impairment.
For the year 2016, ongoing EBITDA for Western Canada Transmission & Processing was $443 million, compared with $516 million in 2015. The 2016 period excludes special items of $56 million for contract demand credits net of insurance recoveries associated with flooding in British Columbia, employee and overhead reductions, and a non-cash loss on the sale of assets. The 2015 period excludes special items of $25 million related to employee and overhead reduction costs and a non-cash asset impairment.
Field Services
Ongoing EBITDA from Field Services was $(5) million in fourth quarter 2016, compared with $(36) million in fourth quarter 2015. The segment's ongoing results reflect favorable contract realignment efforts, stronger commodity prices, and asset growth, offset by lower volumes in certain geographic regions. Fourth quarter 2016 results exclude special items of $36 million, primarily reflecting income tax expense associated with the transaction converting a C-Corp subsidiary of DCP Midstream to an LLC, as well as transaction costs related to combining DCP Midstream and DCP Partners. The 2015 period excludes special items of $172 million, primarily from non-cash asset impairments. As a reminder, Spectra Energy's EBITDA from Field Services represents the company's 50 percent share of DCP Midstream's net income plus gains from DPM unit issuances.
For the year 2016, ongoing EBITDA for Field Services was $14 million, compared with $(106) million in 2015. The 2016 period excludes special items of $54 million, mainly from converting a C-Corp subsidiary of DCP Midstream to an LLC, transaction costs related to combining DCP Midstream and DCP Partners, and non-cash asset impairments. The 2015 period excludes $355 million in charges, primarily due to non-cash goodwill and asset impairments.
During the fourth quarters of 2016 and 2015, respectively, NGL prices averaged $0.55 per gallon versus $0.42 per gallon, NYMEX natural gas averaged $2.98 per million British thermal units (MMBtu) versus $2.27 per MMBtu, and crude oil averaged approximately $49 per barrel versus $42 per barrel.
On a full-year basis for 2016 and 2015, respectively, NGL prices averaged $0.46 per gallon versus $0.45 per gallon, NYMEX natural gas averaged $2.46 per MMBtu versus $2.66 per MMBtu and crude oil averaged approximately $43 per barrel versus $49 per barrel.
Other
Ongoing net expenses from "Other" were $17 million and $12 million in the fourth quarters of 2016 and 2015, respectively. Fourth quarter 2016 results exclude special items of $24 million for transaction costs related to the proposed merger with Enbridge and captive insurance claims related to the flooding in British Columbia. The 2015 period excludes a special item of $333 million related to non-cash goodwill impairments associated with the Westcoast Energy acquisition in 2002.
For the year 2016, ongoing net expenses from "Other" were $73 million, compared with $51 million in 2015. The 2016 period excludes special items of $53 million for transaction costs and self-insurance charges related to the Texas Eastern pipeline incident and flooding in British Columbia. The 2015 period excludes special items of $333 million related to non-cash goodwill impairments associated with the Westcoast Energy acquisition.
"Other" primarily consists of corporate expenses, including benefits and captive insurance.
Interest Expense
Interest expense was $157 million in fourth quarter 2016, compared with $156 million in fourth quarter 2015.
For the year 2016, interest expense was $594 million, compared with $636 million in 2015.
Income Tax Expense
Income tax expense was $56 million in fourth quarter 2016, compared with an income tax benefit of $3 million in fourth quarter 2015, with effective tax rates of 21 percent and 2 percent, respectively. Excluding the tax impacts of special items in both periods, income tax expense was $88 million in fourth quarter 2016, compared with $65 million in fourth quarter 2015, with effective tax rates of 23 percent and 20 percent, respectively. The higher income tax expense was primarily due to higher earnings.
For the year 2016, income tax expense was $216 million, compared with $161 million in 2015, with effective tax rates of 18 percent and 26 percent, respectively. Excluding the tax impacts of special items in both periods, income tax expense was $304 million in both 2016 and 2015, with effective tax rates of 21 percent and 23 percent, respectively.
Foreign Currency
Net income from controlling interests was lower by $2 million for the quarter and $10 million for the year due to the lower Canadian dollar.
Liquidity and Capital Expenditures
Total debt outstanding at Spectra Energy as of December 31, 2016, was $15.6 billion. Total Spectra Energy liquidity at the end of the quarter was $5.2 billion, including $2.1 billion of available liquidity at Spectra Energy Partners.
Including contributions from noncontrolling interests of $743 million, total capital and investment spending for the year was $3.1 billion, and consisted of about $2.5 billion of growth capital expenditures and $613 million of maintenance capital expenditures. Maintenance capital expenditures include special items of $28 million related to the Texas Eastern pipeline incident and $7 million related to flooding in British Columbia.
Spectra Energy expects to file its 2016 10-K with the SEC on or before March 1, 2017.
EFFECTS OF SPECIAL ITEMS
Fourth Quarter 2016 | |||||
($MM) |
Segment |
EBITDA |
Income Tax |
Net |
DCF |
Ongoing |
$ 742 |
$ (88) |
$ 202 |
$ 309 | |
Adjustments related to Special Items |
|||||
Effects of Texas Eastern pipeline incident |
SEP |
$ (36) |
$ 10 |
$ (18) (2) |
$ (59) (3) |
Effects of flooding in British Columbia |
W. Canada |
(3) |
1 |
(2) |
(10) (3) |
Loss on sale of assets and asset impairment |
W. Canada |
(28) |
7 |
(21) |
- |
Transaction costs related to combining DCP Midstream and DCP Partners |
Field Services |
(14) |
5 |
(9) |
- |
Asset impairment and write-off |
Field Services |
(1) |
1 |
- |
- |
Transaction converting a DCP Midstream entity from C Corp to LLC |
Field Services |
(21) |
8 |
(13) |
- |
Captive insurance claims related to British Columbia flood |
Other |
(5) |
2 |
(3) |
(5) |
Taxes related to non-deductible excess compensation |
Other |
- |
(7) |
(7) |
- |
Transaction costs and prefunding associated with merger |
Other |
(19) |
5 |
(14) |
(65) |
Total Special Items |
$ (127) |
$ 32 |
$ (87) |
$ (139) | |
Reported |
$ 615 |
$ (56) |
$ 115 |
$ 170 | |
(1) Represents net income from controlling interests | |||||
(2) Net of non-controlling interests impact of $8 million | |||||
(3) Includes maintenance capital expenditures of $23 million and $7 million related to Texas Eastern pipeline incident and flooding in British Columbia, respectively |
For the Year 2016 | |||||
($MM) |
Segment |
EBITDA |
Income Tax |
Net |
DCF |
Ongoing |
$ 2,846 |
$ (304) |
$ 829 |
$ 1,383 | |
Adjustments related to Special Items |
|||||
Effects of Texas Eastern pipeline incident |
SEP |
$ (80) |
$ 22 |
$ (39) (2) |
$ (108) (3) |
Effects of flooding in British Columbia |
W. Canada |
(19) |
5 |
(14) |
(26) (3) |
Loss on sale of assets and asset impairment |
W. Canada |
(28) |
7 |
(21) |
- |
Employee and overhead reduction costs |
W. Canada |
(9) |
2 |
(7) |
(9) |
Tax benefit on Empress transaction |
W. Canada |
- |
27 |
27 |
- |
Transaction costs related to combining DCP Midstream and DCP Partners |
Field Services |
(14) |
5 |
(9) |
- |
Employee and overhead reduction costs |
Field Services |
(7) |
3 |
(4) |
- |
Asset impairments and net loss on sale of assets |
Field Services |
(12) |
5 |
(7) |
- |
Transaction converting a DCP Midstream entity from C Corp to LLC |
Field Services |
(21) |
8 |
(13) |
- |
Captive insurance related to Texas Eastern pipeline incident and British Columbia flood |
Other |
(15) |
6 |
(9) |
(15) |
Taxes related to non-deductible excess compensation |
Other |
- |
(7) |
(7) |
- |
Transaction costs and prefunding associated with merger |
Other |
(38) |
5 |
(33) |
(84) |
Total Special Items |
$ (243) |
$ 88 |
$ (136) |
$ (242) | |
Reported |
$ 2,603 |
$ (216) |
$ 693 |
$ 1,141 | |
(1) Represents net income from controlling interests | |||||
(2) Net of non-controlling interests impact of $19 million | |||||
(3) Includes maintenance capital expenditures of $28 million and $7 million related to Texas Eastern pipeline incident and flooding in British Columbia, respectively |
EXPANSION PROJECT UPDATES
For the period 2013-2016, the company has:
Spectra Energy's 2016 capital expansion program concluded with eight projects placed into service, representing $2 billion of capital expansion, including:
Projects Scheduled for 2017 In-Service
Construction on Sabal Trail continues to progress, and the project remains on track to be in-service during the first half of 2017.
The Access South, Adair Southwest, and Lebanon Extension projects commenced construction in January, and are scheduled to be placed in-service in the second half of this year.
The second phase of the Gulf Markets Expansion project continues to advance toward a second half of 2017 in-service date. The project has received all its regulatory permits and is under construction.
Atlantic Bridge received its FERC Certificate of Public Convenience and Necessity in January, and is targeting initial in-service in the fourth quarter of this year.
NEXUS and TEAL anticipate receiving their FERC certificates shortly after FERC again has a quorum. Subject to a prompt issuance of these certificates, the project team has a safe and environmentally responsible plan to place the facilities into service in the fourth quarter of 2017, within the prescribed construction windows, in order to meet shipper requirements. Infrastructure projects are a top priority for the new administration and we are confident it will take swift action to restore a FERC quorum.
Projects in Western Canada continue to advance toward their respective in-service dates, specifically Jackfish Lake (first half of this year) as well as RAM and High Pine (second half of this year). All three projects have received their regulatory permits, and are under construction.
At Union Gas, both the 2017 Dawn-Parkway expansion and the Panhandle Reinforcement projects remain on schedule to be placed in-service in the second half of this year.
In January 2017, DCP Midstream announced a number of significant expansion projects, including compression and infrastructure expansions that will add approximately 40 million cubic feet per day (MMcf/d) of incremental capacity by the summer of 2017 in the DJ Basin, and an 85,000 barrel-per-day expansion of the Sand Hills NGL pipeline expected to come online in the fourth quarter of 2017.
Projects Scheduled for 2018 In-Service
The Bayway Lateral project continues to progress toward an in-service date in the first half of 2018, as does Western Canada's Wyndwood project, while the STEP project continues to target in-service in the second half of 2018.
The Valley Crossing Pipeline is advancing through the regulatory process and continues to target an in-service date in the second half of 2018. Construction is expected to begin in the second quarter of 2017.
The PennEast project continues to advance as well. FERC is expected to issue its Final Environmental Impact Statement (FEIS) in April, and the project is still targeting a late-2018 in-service date.
New to the company's project portfolio this quarter is the Spruce Ridge project, a $500 million supply-push project in Western Canada that is expected to go into service in the second half of 2018. The project involves a 400 MMcf/d expansion of the T-North transmission system, as well as pipeline looping and additional compression, to facilitate T-North producers' access to downstream markets.
DCP Midstream also announced a 200 MMcf/d cryogenic natural gas processing plant in the DJ Basin that is projected to be in-service by the end of 2018.
Projects Scheduled for 2019 In-Service
The Stratton Ridge project filed its FERC application earlier this month and remains on schedule for in-service in the first half of 2019.
Projects in Development
The Access Northeast project would help alleviate New England's well-documented issues of energy reliability and cost volatility. The project's partners continue to pursue a viable commercial and operational model to provide clean-burning natural gas to gas-fired electric generators in New England in support of the region's emission goals.
While the project has been in discussions on other contracting strategies, including participation among gas distribution companies, the complexity of any regional solution requires clarity among the New England states regarding the support and legal authority for electric distribution companies to contract for project capacity. When the states achieve alignment – in the form of consistent legislative or other legal authority supporting natural gas infrastructure for electric reliability – the project's partners remain able and committed to bringing Access Northeast to New England consumers.
With increasing reliance on natural gas for electric generation, this project provides a critical opportunity to improve New England's future energy reliability, cost volatility and competitiveness. Access Northeast's partners will continue working with state and federal agencies, as well as other stakeholders, to help close gaps in legal authority that are currently prohibiting the region from achieving its significant environmental goals, as the current system configuration requires the continued operation of older, higher emitting generation units, such as coal and oil plants.
Spectra Energy Partners conducted solicitations of interest on the Express Pipeline and Platte Pipeline in late 2016, and is currently conducting subsequent solicitations, which will close by the end of February.
Spectra Energy Partners has secured a commitment from an industrial market shipper in the STX Zone of its Texas Eastern system, and on February 15 launched a Texas-Louisiana Markets open season, which will close in early March, to solicit additional interest.
Non-GAAP Financial Measures
We use ongoing net income from controlling interests and ongoing diluted EPS as measures to evaluate operations of the company. These measures are non-GAAP financial measures as they represent net income from controlling interests and diluted EPS, excluding special items. Special items represent certain charges and credits which we believe will not be recurring on a regular basis. We believe that the presentation of ongoing net income from controlling interests and ongoing diluted EPS provides useful information to investors, as it allows investors to more accurately compare our ongoing performance across periods. The most directly comparable GAAP measures for ongoing net income from controlling interests and ongoing diluted EPS are net income from controlling interests and diluted EPS.
We use earnings from continuing operations before interest, income taxes, and depreciation and amortization (EBITDA) and ongoing EBITDA, non-GAAP financial measures, as performance measures for Spectra Energy Corp. Ongoing EBITDA represents EBITDA, excluding special items. We believe that the presentation of EBITDA and ongoing EBITDA provides useful information to investors, as it allows investors to more accurately compare Spectra Energy Corp's performance across periods. The most directly comparable GAAP measure for EBITDA and ongoing EBITDA for Spectra Energy Corp is net income.
The primary performance measures used by us to evaluate segment performance are segment EBITDA and Other EBITDA. We consider segment EBITDA and Other EBITDA, which are the GAAP measures used to report segment results, to be good indicators of each segment's operating performance from its continuing operations as they represent the results of our segments' operations before depreciation and amortization without regard to financing methods or capital structures. Our segment EBITDA and Other EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate EBITDA in the same manner.
We also use ongoing segment EBITDA and ongoing Other EBITDA (net expenses) as measures of performance. Ongoing segment EBITDA and ongoing Other EBITDA are non-GAAP financial measures, as they represent segment EBITDA and Other EBITDA, excluding special items. We believe that the presentation of ongoing segment EBITDA and ongoing Other EBITDA provides useful information to investors, as it allows investors to more accurately compare a segment's or Other's ongoing performance across periods. The most directly comparable GAAP measures for ongoing segment EBITDA and ongoing Other EBITDA are segment EBITDA and Other EBITDA.
We also present Distributable Cash Flow (DCF), which is a non-GAAP financial measure. We believe that the presentation of DCF provides useful information to investors, as it represents the cash generation capabilities of the company to support dividend growth. We also use ongoing DCF, which is a non-GAAP financial measure, as it represents DCF, excluding the cash effect of special items. The most directly comparable GAAP measure for DCF and ongoing DCF is net income. We also use DCF coverage, which is a non-GAAP financial measure, as it represents DCF divided by dividends declared on common stock. The most directly comparable GAAP measure for DCF coverage is EPS.
The non-GAAP financial measures presented in this press release should not be considered in isolation or as an alternative to financial measures presented in accordance with GAAP. These non-GAAP financial measures may not be comparable to similarly titled measures of other companies because other companies may not calculate these measures in the same manner.
Forward-Looking Statements
This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on our beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an effect on rate structure, and affect the speed at and degree to which competition enters the natural gas and oil industries; outcomes of litigation and regulatory investigations, proceedings or inquiries; weather and other natural phenomena, including the economic, operational and other effects of hurricanes and storms; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; general economic conditions, including the risk of a prolonged economic slowdown or decline, or the risk of delay in a recovery, which can affect the long-term demand for natural gas and oil and related services; potential effects arising from terrorist attacks and any consequential or other hostilities; changes in environmental, safety and other laws and regulations; the development of alternative energy resources; results and costs of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general market and economic conditions; increases in the cost of goods and services required to complete capital projects; declines in the market prices of equity and debt securities and resulting funding requirements for defined benefit pension plans; growth in opportunities, including the timing and success of efforts to develop U.S. and Canadian pipeline, storage, gathering, processing and other related infrastructure projects and the effects of competition; the performance of natural gas and oil transmission and storage, distribution, and gathering and processing facilities; the extent of success in connecting natural gas and oil supplies to gathering, processing and transmission systems and in connecting to expanding gas and oil markets; the effects of accounting pronouncements issued periodically by accounting standard-setting bodies; conditions of the capital markets during the periods covered by forward-looking statements; and the ability to successfully complete merger, acquisition or divestiture plans; regulatory or other limitations imposed as a result of a merger, acquisition or divestiture; and the success of the business following a merger, acquisition or divestiture. These factors, as well as additional factors that could affect our forward-looking statements, are described under the headings "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Information" in our 2015 Form 10-K, filed on February 25, 2016, and in our other filings made with the Securities and Exchange Commission (SEC), which are available via the SEC's website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. All forward-looking statements in this release are made as of the date hereof and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include approximately 21,000 miles of natural gas and crude oil pipelines; approximately 300 billion cubic feet of natural gas storage; 5.6 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners, LP (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, LLC, which is the general partner of DCP Midstream, LP (NYSE: DCP), the largest natural gas liquids producer and the largest natural gas processor in the United States, and the largest gathering and processing master limited partnership in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com.
Spectra Energy Corp | |||||||||||
Quarterly Highlights | |||||||||||
December 2016 | |||||||||||
(Unaudited) | |||||||||||
(In millions, except per-share amounts and where noted) | |||||||||||
Reported - These results include the impact of special items | |||||||||||
Quarters Ended |
Years Ended | ||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||
COMMON STOCK DATA |
|||||||||||
Earnings (Loss) Per Share, Diluted |
$ |
0.16 |
$ |
(0.39) |
$ |
1.00 |
$ |
0.29 | |||
Dividends Per Share |
$ |
0.405 |
$ |
0.37 |
$ |
1.62 |
$ |
1.48 | |||
Weighted-Average Shares Outstanding, Diluted |
704 |
673 |
696 |
672 | |||||||
INCOME |
|||||||||||
Operating Revenues |
$ |
1,298 |
$ |
1,316 |
$ |
4,916 |
$ |
5,234 | |||
Total Reportable Segment EBITDA |
656 |
498 |
2,729 |
2,408 | |||||||
Net Income (Loss) - Controlling Interests |
115 |
(263) |
693 |
196 | |||||||
EBITDA BY BUSINESS SEGMENT |
|||||||||||
Spectra Energy Partners |
$ |
501 |
$ |
484 |
$ |
1,909 |
$ |
1,905 | |||
Distribution |
122 |
113 |
473 |
473 | |||||||
Western Canada Transmission & Processing |
74 |
109 |
387 |
491 | |||||||
Field Services |
(41) |
(208) |
(40) |
(461) | |||||||
Total Reportable Segment EBITDA |
656 |
498 |
2,729 |
2,408 | |||||||
Other EBITDA |
(41) |
(345) |
(126) |
(384) | |||||||
Total Reportable Segment and Other EBITDA |
$ |
615 |
$ |
153 |
$ |
2,603 |
$ |
2,024 | |||
DISTRIBUTABLE CASH FLOW |
|||||||||||
Distributable Cash Flow |
$ |
170 |
$ |
194 |
$ |
1,141 |
$ |
1,274 | |||
Coverage Ratio |
1.0x |
1.3x | |||||||||
CAPITAL AND INVESTMENT EXPENDITURES |
|||||||||||
Spectra Energy Partners (a) |
$ |
2,585 |
$ |
2,007 | |||||||
Distribution |
788 |
544 | |||||||||
Western Canada Transmission & Processing |
410 |
360 | |||||||||
Other |
91 |
61 | |||||||||
Total Capital and Investment Expenditures (a) |
$ |
3,874 |
$ |
2,972 | |||||||
Expansion and Investment (a) |
$ |
3,261 |
$ |
2,281 | |||||||
Maintenance and Other |
613 |
691 | |||||||||
Total Capital and Investment Expenditures (a) |
$ |
3,874 |
$ |
2,972 | |||||||
December 31, | |||||||||||
2016 |
2015 | ||||||||||
CAPITALIZATION |
|||||||||||
Common Equity - Controlling Interests |
25.8% |
26.6% | |||||||||
Noncontrolling Interests and Preferred Stock |
17.8% |
13.6% | |||||||||
Total Debt |
56.4% |
59.8% | |||||||||
Total Debt |
$ |
15,628 |
$ |
14,656 | |||||||
Book Value Per Share (b) |
$ |
10.20 |
$ |
9.73 | |||||||
Actual Shares Outstanding (c) |
702 |
671 | |||||||||
(a) Excludes contributions received from noncontrolling interests of $641 million in 2016 and $216 million in 2015. | |||||||||||
(b) Represents controlling interests. | |||||||||||
(c) Increase in 2016 resulted from a newly initiated "At the Market" equity issuance program in March 2016 and equity |
Spectra Energy Corp | ||||||||||||||||
Quarterly Highlights | ||||||||||||||||
December 2016 | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In millions, except where noted) | ||||||||||||||||
Reported - These results include the impact of special items | ||||||||||||||||
Quarters Ended December 31, |
Years Ended December 31, | |||||||||||||||
2016 |
2015 |
2016 |
2015 | |||||||||||||
SPECTRA ENERGY PARTNERS |
||||||||||||||||
Operating Revenues |
$ |
663 |
$ |
634 |
$ |
2,533 |
$ |
2,455 |
||||||||
Operating Expenses |
||||||||||||||||
Operating, Maintenance and Other |
245 |
222 |
917 |
828 |
||||||||||||
Other Income and Expenses |
83 |
72 |
293 |
278 |
||||||||||||
EBITDA |
$ |
501 |
$ |
484 |
$ |
1,909 |
$ |
1,905 |
||||||||
Express Pipeline Revenue Receipts, MBbl/d (a) |
259 |
239 |
241 |
239 |
||||||||||||
Platte PADD II Deliveries, MBbl/d |
127 |
140 |
130 |
162 |
||||||||||||
DISTRIBUTION |
||||||||||||||||
Operating Revenues |
$ |
412 |
$ |
366 |
$ |
1,370 |
$ |
1,527 |
||||||||
Operating Expenses |
||||||||||||||||
Natural Gas Purchased |
181 |
152 |
533 |
691 |
||||||||||||
Operating, Maintenance and Other |
109 |
101 |
366 |
363 |
||||||||||||
Other Income and Expenses |
— |
— |
2 |
— |
||||||||||||
EBITDA |
$ |
122 |
$ |
113 |
$ |
473 |
$ |
473 |
||||||||
Number of Customers, Thousands |
1,459 |
1,437 |
||||||||||||||
Heating Degree Days, Fahrenheit |
2,278 |
2,017 |
6,821 |
7,387 |
||||||||||||
Pipeline Throughput, TBtu (b) |
215 |
165 |
762 |
759 |
||||||||||||
Canadian Dollar Exchange Rate, Average |
1.33 |
1.34 |
1.33 |
1.28 |
||||||||||||
WESTERN CANADA TRANSMISSION & PROCESSING |
||||||||||||||||
Operating Revenues |
$ |
221 |
$ |
323 |
$ |
1,020 |
$ |
1,285 |
||||||||
Operating Expenses |
||||||||||||||||
Natural Gas and Petroleum Products Purchased |
— |
69 |
68 |
193 |
||||||||||||
Operating, Maintenance and Other |
125 |
149 |
551 |
611 |
||||||||||||
Loss on sales of other assets and other, net |
(27) |
— |
(27) |
— |
||||||||||||
Other Income and Expenses |
5 |
4 |
13 |
10 |
||||||||||||
EBITDA |
$ |
74 |
$ |
109 |
$ |
387 |
$ |
491 |
||||||||
Pipeline Throughput, TBtu |
242 |
234 |
922 |
923 |
||||||||||||
Volumes Processed, TBtu |
152 |
165 |
636 |
658 |
||||||||||||
Canadian Dollar Exchange Rate, Average |
1.33 |
1.34 |
1.33 |
1.28 |
||||||||||||
FIELD SERVICES |
||||||||||||||||
Earnings (loss) from Equity Investment in DCP Midstream, LLC |
$ |
(41) |
$ |
(208) |
$ |
(40) |
$ |
(461) |
||||||||
Natural Gas Gathered and Processed/Transported, TBtu/day (c) |
6.1 |
7.1 |
6.5 |
7.1 |
||||||||||||
Natural Gas Liquids Production, MBbl/d (c) |
371 |
409 |
393 |
410 |
||||||||||||
Average Natural Gas Price Per MMBtu (d) |
$ |
2.98 |
$ |
2.27 |
$ |
2.46 |
$ |
2.66 |
||||||||
Average Natural Gas Liquids Price Per Gallon (e) |
$ |
0.55 |
$ |
0.42 |
$ |
0.46 |
$ |
0.45 |
||||||||
Average Crude Oil Price Per Barrel (f) |
$ |
49.15 |
$ |
42.20 |
$ |
43.30 |
$ |
48.80 |
||||||||
(a) Thousand barrels per day. |
||||||||||||||||
(b) Trillion British thermal units. |
||||||||||||||||
(c) Reflects 100% of DCP Midstream volumes. |
||||||||||||||||
(d) Million British thermal units. Average price based on NYMEX Henry Hub. |
||||||||||||||||
(e) Does not reflect results of commodity hedges. | ||||||||||||||||
(f) Average price based on NYMEX calendar month. |
Spectra Energy Corp | |||||||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
(In millions) | |||||||||||||||||||
Reported - These results include the impact of special items | |||||||||||||||||||
Quarters Ended |
Years Ended | ||||||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||||||
Operating Revenues |
$ |
1,298 |
$ |
1,316 |
$ |
4,916 |
$ |
5,234 |
|||||||||||
Operating Expenses |
899 |
1,219 |
3,331 |
3,805 |
|||||||||||||||
Gain (Loss) on Sales of Other Assets and Other, net |
(26) |
— |
(26) |
4 |
|||||||||||||||
Operating Income |
373 |
97 |
1,559 |
1,433 |
|||||||||||||||
Other Income and Expenses |
48 |
(132) |
271 |
(176) |
|||||||||||||||
Interest Expense |
157 |
156 |
594 |
636 |
|||||||||||||||
Earnings (Loss) Before Income Taxes |
264 |
(191) |
1,236 |
621 |
|||||||||||||||
Income Tax Expense (Benefit) |
56 |
(3) |
216 |
161 |
|||||||||||||||
Net Income (Loss) |
208 |
(188) |
1,020 |
460 |
|||||||||||||||
Net Income - Noncontrolling Interests |
93 |
75 |
327 |
264 |
|||||||||||||||
Net Income (Loss) - Controlling Interests |
$ |
115 |
$ |
(263) |
$ |
693 |
$ |
196 |
Spectra Energy Corp | |||||||||||
Condensed Consolidated Balance Sheets | |||||||||||
(Unaudited) | |||||||||||
(In millions) | |||||||||||
December 31, |
December 31, | ||||||||||
2016 |
2015 | ||||||||||
ASSETS |
|||||||||||
Current Assets |
$ |
1,772 |
$ |
1,648 |
|||||||
Investments and Other Assets |
7,354 |
7,056 |
|||||||||
Net Property, Plant and Equipment |
26,208 |
22,918 |
|||||||||
Regulatory Assets and Deferred Debits |
1,508 |
1,301 |
|||||||||
Total Assets |
$ |
36,842 |
$ |
32,923 |
|||||||
LIABILITIES AND EQUITY |
|||||||||||
Current Liabilities |
$ |
3,905 |
$ |
3,392 |
|||||||
Long-term Debt |
13,624 |
12,892 |
|||||||||
Deferred Credits and Other Liabilities |
7,212 |
6,768 |
|||||||||
Preferred Stock of Subsidiaries |
562 |
339 |
|||||||||
Equity |
11,539 |
9,532 |
|||||||||
Total Liabilities and Equity |
$ |
36,842 |
$ |
32,923 |
|||||||
Spectra Energy Corp | ||||||||||||||||
Distributable Cash Flow | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In millions) | ||||||||||||||||
Reported - These results include the impact of special items | ||||||||||||||||
Quarters Ended |
Years Ended | |||||||||||||||
2016 |
2015 |
2016 |
2015 | |||||||||||||
Net Income (Loss) |
$ |
208 |
$ |
(188) |
$ |
1,020 |
$ |
460 |
||||||||
Add: |
||||||||||||||||
Interest expense |
157 |
156 |
594 |
636 |
||||||||||||
Income tax expense (benefit) |
56 |
(3) |
216 |
161 |
||||||||||||
Depreciation and amortization |
192 |
190 |
774 |
764 |
||||||||||||
Foreign currency loss (gain) |
1 |
(1) |
1 |
6 |
||||||||||||
Less: |
||||||||||||||||
Third party interest income (expense) |
(1) |
1 |
2 |
3 |
||||||||||||
EBITDA |
615 |
153 |
2,603 |
2,024 |
||||||||||||
Add: |
||||||||||||||||
(Earnings) loss from equity investments |
2 |
4 |
(108) |
(76) |
||||||||||||
Non-cash impairments at DCP |
1 |
169 |
11 |
366 |
||||||||||||
Distributions from equity investments (a) |
28 |
26 |
161 |
209 |
||||||||||||
Empress non-cash items |
— |
18 |
42 |
42 |
||||||||||||
Non-cash goodwill impairments associated |
— |
333 |
— |
333 |
||||||||||||
Other non-cash asset impairments (b) |
1 |
7 |
1 |
16 |
||||||||||||
Other |
(8) |
(5) |
43 |
25 |
||||||||||||
Less: |
||||||||||||||||
Interest expense |
157 |
156 |
594 |
636 |
||||||||||||
Equity AFUDC |
48 |
38 |
164 |
111 |
||||||||||||
Net cash paid (refund) for income taxes |
(2) |
49 |
(5) |
29 |
||||||||||||
Distributions to noncontrolling interests |
70 |
58 |
246 |
198 |
||||||||||||
Maintenance capital expenditures |
196 |
210 |
613 |
691 |
||||||||||||
Total Distributable Cash Flow |
$ |
170 |
$ |
194 |
$ |
1,141 |
$ |
1,274 |
||||||||
(a) Excludes $403 million in distributions from equity investments for the year ended December 31, 2015. | ||||||||||||||||
(b) Includes non-cash asset impairments at SEP and WCTP. |
Spectra Energy Corp | |||||||||||||||
Reported to Ongoing Earnings Reconciliation | |||||||||||||||
December 2016 Quarter-to-Date | |||||||||||||||
(Unaudited) | |||||||||||||||
(In millions, except per-share amounts) | |||||||||||||||
Reported |
Less: Special |
Ongoing Earnings | |||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND DEPRECIATION AND AMORTIZATION |
|||||||||||||||
Spectra Energy Partners |
$ |
501 |
$ |
(36) |
A |
$ |
537 | ||||||||
Distribution |
122 |
— |
122 | ||||||||||||
Western Canada Transmission & Processing |
74 |
(31) |
B |
105 | |||||||||||
Field Services |
(41) |
(36) |
C |
(5) | |||||||||||
Total Reportable Segment EBITDA |
656 |
(103) |
759 | ||||||||||||
Other |
(41) |
(24) |
D |
(17) | |||||||||||
Total Reportable Segment and Other EBITDA |
$ |
615 |
$ |
(127) |
$ |
742 | |||||||||
EARNINGS |
|||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
615 |
$ |
(127) |
$ |
742 | |||||||||
Depreciation and Amortization |
(192) |
— |
(192) | ||||||||||||
Interest Expense |
(157) |
— |
(157) | ||||||||||||
Interest Income and Other |
(2) |
— |
(2) | ||||||||||||
Income Tax Benefit (Expense) |
(56) |
32 |
(88) | ||||||||||||
Total Net Income |
208 |
(95) |
303 | ||||||||||||
Total Net Income - Noncontrolling Interests |
(93) |
8 |
(101) | ||||||||||||
Total Net Income - Controlling Interests |
$ |
115 |
$ |
(87) |
$ |
202 | |||||||||
EARNINGS PER SHARE, BASIC |
$ |
0.16 |
$ |
(0.13) |
$ |
0.29 | |||||||||
EARNINGS PER SHARE, DILUTED |
$ |
0.16 |
$ |
(0.13) |
$ |
0.29 | |||||||||
A - Effects of Texas Eastern pipeline incident. | |||||||||||||||
B - The effects of flooding in British Columbia, non-cash net loss on sale of assets and non-cash asset impairment. | |||||||||||||||
C - Non-cash asset impairment and write-offs, transaction costs related to combining DCP Midstream and DCP Partners, and taxes related to conversion of a DCP Midstream entity from C Corp to LLC. | |||||||||||||||
D - Captive insurance claims associated with the flooding in British Columbia and transaction costs. | |||||||||||||||
Weighted Average Shares - in millions |
|||||||||||||||
Basic |
702 |
||||||||||||||
Diluted |
704 |
Spectra Energy Corp | |||||||||||||||
Reported to Ongoing Earnings Reconciliation | |||||||||||||||
December 2015 Quarter-to-Date | |||||||||||||||
(Unaudited) | |||||||||||||||
(In millions, except per-share amounts) | |||||||||||||||
Reported |
Less: Special |
Ongoing Earnings | |||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND DEPRECIATION AND AMORTIZATION |
|||||||||||||||
Spectra Energy Partners |
$ |
484 |
$ |
— |
$ |
484 | |||||||||
Distribution |
113 |
— |
113 | ||||||||||||
Western Canada Transmission & Processing |
109 |
(14) |
A |
123 | |||||||||||
Field Services |
(208) |
(172) |
B |
(36) | |||||||||||
Total Reportable Segment EBITDA |
498 |
(186) |
684 | ||||||||||||
Other |
(345) |
(333) |
C |
(12) | |||||||||||
Total Reportable Segment and Other EBITDA |
$ |
153 |
$ |
(519) |
$ |
672 | |||||||||
EARNINGS |
|||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
153 |
$ |
(519) |
$ |
672 | |||||||||
Depreciation and Amortization |
(190) |
— |
(190) | ||||||||||||
Interest Expense |
(156) |
(1) |
D |
(155) | |||||||||||
Interest Income and Other |
2 |
— |
2 | ||||||||||||
Income Tax Benefit (Expense) |
3 |
68 |
(65) | ||||||||||||
Total Net Income |
(188) |
(452) |
264 | ||||||||||||
Total Net Income - Noncontrolling Interests |
(75) |
— |
(75) | ||||||||||||
Total Net Income - Controlling Interests |
$ |
(263) |
$ |
(452) |
$ |
189 | |||||||||
EARNINGS PER SHARE, BASIC |
$ |
(0.39) |
$ |
(0.67) |
$ |
0.28 | |||||||||
EARNINGS PER SHARE, DILUTED |
$ |
(0.39) |
$ |
(0.67) |
$ |
0.28 | |||||||||
A - Employee and overhead reduction costs, and non-cash asset impairment. | |||||||||||||||
B - Employee and overhead reduction costs, non-cash asset impairments, and write-offs. | |||||||||||||||
C - Non-cash goodwill impairments associated with the Westcoast acquisition in 2002. | |||||||||||||||
D - Net write-off of regulatory assets and liabilities at Ozark Gas Transmission due to discontinuance of regulatory accounting. | |||||||||||||||
Weighted Average Shares - in millions |
|||||||||||||||
Basic |
671 |
||||||||||||||
Diluted |
673 |
Spectra Energy Corp | ||||||||||||||||
Reported to Ongoing Earnings Reconciliation | ||||||||||||||||
December 2016 Year-to-Date | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In millions, except per-share amounts) | ||||||||||||||||
Reported |
Less: Special |
Ongoing Earnings | ||||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND DEPRECIATION AND AMORTIZATION |
||||||||||||||||
Spectra Energy Partners |
$ |
1,909 |
$ |
(80) |
A |
$ |
1,989 | |||||||||
Distribution |
473 |
— |
473 | |||||||||||||
Western Canada Transmission & Processing |
387 |
(56) |
B |
443 | ||||||||||||
Field Services |
(40) |
(54) |
C |
14 | ||||||||||||
Total Reportable Segment EBITDA |
2,729 |
(190) |
2,919 | |||||||||||||
Other |
(126) |
(53) |
D |
(73) | ||||||||||||
Total Reportable Segment and Other EBITDA |
$ |
2,603 |
$ |
(243) |
$ |
2,846 | ||||||||||
EARNINGS |
||||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
2,603 |
$ |
(243) |
$ |
2,846 | ||||||||||
Depreciation and Amortization |
(774) |
— |
(774) | |||||||||||||
Interest Expense |
(594) |
— |
(594) | |||||||||||||
Interest Income and Other |
1 |
— |
1 | |||||||||||||
Income Tax Benefit (Expense) |
(216) |
88 |
E |
(304) | ||||||||||||
Total Net Income |
1,020 |
(155) |
1,175 | |||||||||||||
Total Net Income - Noncontrolling Interests |
(327) |
19 |
(346) | |||||||||||||
Total Net Income - Controlling Interests |
$ |
693 |
$ |
(136) |
$ |
829 | ||||||||||
EARNINGS PER SHARE, BASIC |
$ |
1.00 |
$ |
(0.19) |
$ |
1.19 | ||||||||||
EARNINGS PER SHARE, DILUTED |
$ |
1.00 |
$ |
(0.19) |
$ |
1.19 | ||||||||||
A - Effects of Texas Eastern pipeline incident. | ||||||||||||||||
B - Employee and overhead reduction costs, the effects of flooding in British Columbia, non-cash net loss on sale of assets and non-cash asset impairment. | ||||||||||||||||
C - Non-cash asset impairments and write-offs, employee and overhead reduction costs, transaction costs related to combining DCP Midstream and DCP Partners, non-cash loss on sale of assets and taxes related to conversion of a DCP Midstream entity from C Corp to LLC. | ||||||||||||||||
D – Captive insurance associated with Texas Eastern pipeline incident and the flooding in British Columbia and transaction costs. | ||||||||||||||||
E - Includes a tax benefit on Empress transaction. | ||||||||||||||||
Weighted Average Shares - in millions |
||||||||||||||||
Basic |
694 |
|||||||||||||||
Diluted |
696 |
Spectra Energy Corp | |||||||||||||||
Reported to Ongoing Earnings Reconciliation | |||||||||||||||
December 2015 Year-to-Date | |||||||||||||||
(Unaudited) | |||||||||||||||
(In millions, except per-share amounts) | |||||||||||||||
Reported Earnings |
Less: Special |
Ongoing Earnings | |||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND DEPRECIATION AND AMORTIZATION |
|||||||||||||||
Spectra Energy Partners |
$ |
1,905 |
$ |
(9) |
A |
$ |
1,914 | ||||||||
Distribution |
473 |
— |
473 | ||||||||||||
Western Canada Transmission & Processing |
491 |
(25) |
B |
516 | |||||||||||
Field Services |
(461) |
(355) |
C |
(106) | |||||||||||
Total Reportable Segment EBITDA |
2,408 |
(389) |
2,797 | ||||||||||||
Other |
(384) |
(333) |
D |
(51) | |||||||||||
Total Reportable Segment and Other EBITDA |
$ |
2,024 |
$ |
(722) |
$ |
2,746 | |||||||||
EARNINGS |
|||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
2,024 |
$ |
(722) |
$ |
2,746 | |||||||||
Depreciation and Amortization |
(764) |
— |
(764) | ||||||||||||
Interest Expense |
(636) |
(1) |
E |
(635) | |||||||||||
Interest Income and Other |
(3) |
— |
(3) | ||||||||||||
Income Tax Benefit (Expense) |
(161) |
143 |
(304) | ||||||||||||
Total Net Income |
460 |
(580) |
1,040 | ||||||||||||
Total Net Income - Noncontrolling Interests |
(264) |
1 |
(265) | ||||||||||||
Total Net Income - Controlling Interests |
$ |
196 |
$ |
(579) |
$ |
775 | |||||||||
EARNINGS PER SHARE, BASIC |
$ |
0.29 |
$ |
(0.86) |
$ |
1.15 | |||||||||
EARNINGS PER SHARE, DILUTED |
$ |
0.29 |
$ |
(0.86) |
$ |
1.15 | |||||||||
A - Non-cash impairment at Ozark Gas Gathering. |
|||||||||||||||
B - Employee and overhead reduction costs, and non-cash asset impairment. | |||||||||||||||
C - Employee and overhead reduction costs, net gain on asset sales, non-cash goodwill and asset impairments and write-offs. | |||||||||||||||
D - Non-cash goodwill impairments associated with the Westcoast acquisition in 2002. | |||||||||||||||
E - Net write-off of regulatory assets and liabilities at Ozark Gas Transmission due to discontinuance of regulatory accounting. | |||||||||||||||
Weighted Average Shares - in millions |
|||||||||||||||
Basic |
671 |
||||||||||||||
Diluted |
672 |
Spectra Energy Corp | |||||||||||||||||||||||
Reported to Ongoing Distributable Cash Flow Reconciliation | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
(In millions, except where noted) | |||||||||||||||||||||||
Quarters Ended |
Quarter Ended | ||||||||||||||||||||||
Reported |
Less: |
Ongoing |
Reported |
Less: |
Ongoing | ||||||||||||||||||
Net Income (Loss) |
$ |
208 |
$ |
(95) |
$ |
303 |
$ |
(188) |
$ |
(452) |
$ |
264 | |||||||||||
Add: |
|||||||||||||||||||||||
Interest expense |
157 |
— |
157 |
156 |
1 |
155 | |||||||||||||||||
Income tax expense (benefit) |
56 |
(32) |
88 |
(3) |
(68) |
65 | |||||||||||||||||
Depreciation and amortization |
192 |
— |
192 |
190 |
— |
190 | |||||||||||||||||
Foreign currency loss (gain) |
1 |
— |
1 |
(1) |
— |
(1) | |||||||||||||||||
Less: |
|||||||||||||||||||||||
Third party interest income (expense) |
(1) |
— |
(1) |
1 |
— |
1 | |||||||||||||||||
EBITDA |
615 |
(127) |
742 |
153 |
(519) |
672 | |||||||||||||||||
Add: |
|||||||||||||||||||||||
(Earnings) Loss from equity investments |
2 |
35 |
(33) |
4 |
3 |
1 | |||||||||||||||||
Non-cash impairments at DCP |
1 |
1 |
— |
169 |
169 |
— | |||||||||||||||||
Distributions from equity investments |
28 |
— |
28 |
26 |
— |
26 | |||||||||||||||||
Empress non-cash items |
— |
— |
— |
18 |
— |
18 | |||||||||||||||||
Non-cash goodwill impairments associated |
— |
— |
— |
333 |
333 |
— | |||||||||||||||||
with the Westcoast acquisition in 2002 | |||||||||||||||||||||||
Other non-cash asset impairments |
1 |
1 |
— |
7 |
7 |
— | |||||||||||||||||
Other |
(8) |
(19) |
11 |
(5) |
— |
(5) | |||||||||||||||||
Less: |
|||||||||||||||||||||||
Interest expense |
157 |
— |
157 |
156 |
— |
156 | |||||||||||||||||
Equity AFUDC |
48 |
— |
48 |
38 |
— |
38 | |||||||||||||||||
Net cash paid (refund) for income taxes |
(2) |
— |
(2) |
49 |
— |
49 | |||||||||||||||||
Distributions to noncontrolling interests |
70 |
— |
70 |
58 |
— |
58 | |||||||||||||||||
Maintenance capital expenditures |
196 |
30 |
166 |
210 |
— |
210 | |||||||||||||||||
Total Distributable Cash Flow |
$ |
170 |
$ |
(139) |
$ |
309 |
$ |
194 |
$ |
(7) |
$ |
201 |
Spectra Energy Corp | ||||||||||||||||||||||||
Reported to Ongoing Distributable Cash Flow Reconciliation | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
(In millions, except where noted) | ||||||||||||||||||||||||
Years Ended |
Years Ended | |||||||||||||||||||||||
Reported |
Less: |
Ongoing |
Reported |
Less: |
Ongoing | |||||||||||||||||||
Net Income |
$ |
1,020 |
$ |
(155) |
$ |
1,175 |
$ |
460 |
$ |
(580) |
$ |
1,040 | ||||||||||||
Add: |
||||||||||||||||||||||||
Interest expense |
594 |
— |
594 |
636 |
1 |
635 | ||||||||||||||||||
Income tax expense |
216 |
(88) |
304 |
161 |
(143) |
304 | ||||||||||||||||||
Depreciation and amortization |
774 |
— |
774 |
764 |
— |
764 | ||||||||||||||||||
Foreign currency loss (gain) |
1 |
— |
1 |
6 |
— |
6 | ||||||||||||||||||
Less: |
||||||||||||||||||||||||
Third party interest income |
2 |
— |
2 |
3 |
— |
3 | ||||||||||||||||||
EBITDA |
2,603 |
(243) |
2,846 |
2,024 |
(722) |
2,746 | ||||||||||||||||||
Add: |
||||||||||||||||||||||||
Earnings from equity investments |
(108) |
43 |
(151) |
(76) |
(11) |
(65) | ||||||||||||||||||
Non-cash impairments at DCP |
11 |
11 |
— |
366 |
366 |
— | ||||||||||||||||||
Distributions from equity investments |
161 |
— |
161 |
209 |
— |
209 | ||||||||||||||||||
Empress non-cash items |
42 |
— |
42 |
42 |
— |
42 | ||||||||||||||||||
Non-cash goodwill impairments associated |
— |
— |
— |
333 |
333 |
— | ||||||||||||||||||
with the Westcoast acquisition in 2002 | ||||||||||||||||||||||||
Other non-cash asset impairments |
1 |
1 |
— |
16 |
16 |
— | ||||||||||||||||||
Other |
43 |
(19) |
62 |
25 |
— |
25 | ||||||||||||||||||
Less: |
||||||||||||||||||||||||
Interest expense |
594 |
— |
594 |
636 |
— |
636 | ||||||||||||||||||
Equity AFUDC |
164 |
— |
164 |
111 |
— |
111 | ||||||||||||||||||
Net cash paid (refund) for income taxes |
(5) |
— |
(5) |
29 |
— |
29 | ||||||||||||||||||
Distributions to noncontrolling interests |
246 |
— |
246 |
198 |
— |
198 | ||||||||||||||||||
Maintenance capital expenditures |
613 |
35 |
578 |
691 |
— |
691 | ||||||||||||||||||
Total Distributable Cash Flow |
$ |
1,141 |
$ |
(242) |
$ |
1,383 |
$ |
1,274 |
$ |
(18) |
$ |
1,292 | ||||||||||||
Dividends declared |
$ |
1,161 |
$ |
1,161 |
$ |
1,017 |
$ |
1,017 | ||||||||||||||||
Coverage - DCF / Dividend |
1.0x |
1.2x |
1.3x |
1.3x |
SOURCE Spectra Energy Corp
Final regulatory clearance required for closing is under the Canadian Competition Act
CALGARY, Alberta and HOUSTON, Feb. 16, 2017 /PRNewswire/ -- Enbridge Inc. (TSX, NYSE: ENB) (Enbridge) and Spectra Energy Corp (NYSE: SE) (Spectra Energy) announced today that the U.S. Federal Trade Commission (FTC) has cleared the previously announced proposed combination of the two companies.
As part of the clearance, the FTC today voted to accept a proposed consent decree in which Enbridge and Spectra Energy have agreed, following the closing of their proposed combination, to enact firewalls governing the flow of certain information to Enbridge about the Discovery offshore Gulf of Mexico natural gas pipeline system (Discovery), and to take certain other steps limiting Enbridge's potential influence over actions related to Discovery. Spectra Energy holds an ownership interest in Discovery through its indirect ownership interest in DCP Midstream, LP, which holds a 40 percent ownership interest in Discovery. Enbridge, through an affiliate, also has offshore natural gas gathering operations in the Gulf of Mexico. The FTC's decision is accessible via the following link: https://www.ftc.gov/enforcement/cases-proceedings/161-0215/enbridge-spectra-energy.
With this clearance from the FTC, the proposed combination of Enbridge and Spectra Energy has only one remaining regulatory clearance to secure in order to close the transaction: clearance under the Canadian Competition Act. The companies continue to expect the transaction to close in the first quarter of this year.
About Enbridge Inc.
Enbridge Inc., a Canadian company, exists to fuel people's quality of life, and has done so for more than 65 years. A North American leader in delivering energy, Enbridge has been ranked on the Global 100 Most Sustainable Corporations index for the past eight years. Enbridge operates the world's longest crude oil and liquids transportation system across Canada and the U.S., and has a significant and growing involvement in natural gas gathering, transmission and midstream business, as well as an increasing involvement in power transmission. Enbridge owns and operates Canada's largest natural gas distribution company, serving residential, commercial, and industrial customers in Ontario, Quebec, New Brunswick and New York State. Enbridge has interests in more than 2,200 megawatts of net renewable and alternative generating capacity, and continues to expand into wind, solar and geothermal power. Enbridge employs approximately 10,000 people, primarily in Canada and the U.S., and has been ranked 15 times on the annual Canada's Top 100 Employers list, including the 2017 index. Enbridge's common shares trade on the Toronto and New York stock exchanges under the symbol ENB. For more information, visit www.enbridge.com.
About Spectra Energy Corp
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include approximately 21,000 miles of natural gas and crude oil pipelines; approximately 300 billion cubic feet of natural gas storage; 5.6 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners, LP (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, LLC, which is the general partner of DCP Midstream, LP (NYSE: DCP), the largest natural gas liquids producer and the largest natural gas processor in the United States, and the largest gathering and processing master limited partnership in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com.
Forward-Looking Information
Certain information with respect to the proposed combination of Enbridge and Spectra Energy constitutes forward-looking statements. Although Enbridge and Spectra Energy believe these statements are based on information and assumptions which are current, reasonable and complete, these statements are necessarily subject to a variety of risks and uncertainties, including those pertaining to the timing and completion of the proposed combination. A further discussion of the risks and uncertainties facing Enbridge and Spectra Energy can be found in each company's filings with Canadian and United States securities regulators, as applicable. While Enbridge and Spectra Energy make these forward-looking statements in good faith, should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary significantly from those expected. Except as may be required by applicable securities laws, neither Enbridge nor Spectra Energy assume any obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.
SOURCE Spectra Energy Corp; Enbridge Inc.
Quarterly distribution increase of 1.25 cents to $0.68875 per unit
HOUSTON, Feb. 7, 2017 /PRNewswire/ -- Spectra Energy Partners, LP (NYSE: SEP) announced today that the board of directors of its general partner declared a quarterly cash distribution to unitholders of $0.68875 per unit, an increase of 1.25 cents over the previous level of $0.67625 per unit. The cash distribution is payable on February 28, 2017, to unitholders of record at the close of business on February 17, 2017. This quarterly cash distribution equates to $2.755 per unit on an annual basis.
"We are pleased to announce the company's 37th consecutive quarterly cash distribution increase. And due to our ongoing growth and reliable and disciplined approach, we are reaffirming our plan to continue quarterly penny-and-a-quarter distribution increases in 2017 while maintaining distributable cash flow coverage in our targeted range of 1.05 to 1.15 times," said Greg Ebel, chief executive officer, Spectra Energy Partners. "The General Partner of Spectra Energy Partners will change once the merger with Enbridge is complete, but the stable underpinnings of our business will not – Spectra Energy Partners will continue generating reliable cash flows."
This information is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Under rules applicable to publicly-traded partnerships, our distributions to non-U.S. unitholders are subject to withholding tax at the highest effective applicable rate to the extent attributable to income that is effectively connected with the conduct of a U.S. trade or business. Given the uncertainty at the time of making distributions regarding the amount of any distribution that is attributable to income that is so effectively connected, we intend to treat all of our distributions as attributable to our U.S. operations, and as a result, the entire distribution will be subject to withholding.
Non-GAAP Financial Measures
Distributable Cash Flow (DCF) is a non-GAAP financial measure, which represents the cash generation capabilities of the partnership to support distribution growth. The most directly comparable GAAP measure for DCF is net income.
DCF coverage is a non-GAAP financial measure, which represents DCF divided by distributions declared on partnership units. The most directly comparable GAAP measure for DCF coverage is Earnings Per Unit (EPU).
Forward-Looking Statements
This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on our beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an effect on rate structure, and affect the speed at and degree to which competition enters the natural gas and oil industries; outcomes of litigation and regulatory investigations, proceedings or inquiries; weather and other natural phenomena, including the economic, operational and other effects of hurricanes and storms; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; general economic conditions, including the risk of a prolonged economic slowdown or decline, or the risk of delay in a recovery, which can affect the long-term demand for natural gas and oil and related services; potential effects arising from terrorist attacks and any consequential or other hostilities; changes in environmental, safety and other laws and regulations; the development of alternative energy resources; results and costs of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general market and economic conditions; increases in the cost of goods and services required to complete capital projects; declines in the market prices of equity and debt securities and resulting funding requirements for defined benefit pension plans; growth in opportunities, including the timing and success of efforts to develop U.S. and Canadian pipeline, storage, gathering, processing and other related infrastructure projects and the effects of competition; the performance of natural gas and oil transmission and storage, distribution, and gathering and processing facilities; the extent of success in connecting natural gas and oil supplies to gathering, processing and transmission systems and in connecting to expanding gas and oil markets; the effects of accounting pronouncements issued periodically by accounting standard-setting bodies; conditions of the capital markets during the periods covered by forward-looking statements; and the ability to successfully complete merger, acquisition or divestiture plans; regulatory or other limitations imposed as a result of a merger, acquisition or divestiture; and the success of the business following a merger, acquisition or divestiture. These factors, as well as additional factors that could affect our forward-looking statements, are described under the headings "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Information" in our 2015 Form 10-K, filed on February 25, 2016, and in our other filings made with the Securities and Exchange Commission (SEC), which are available via the SEC's website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. All forward-looking statements in this release are made as of the date hereof and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Spectra Energy Partners, LP (NYSE: SEP) is a Houston-based master limited partnership, formed by Spectra Energy Corp (NYSE: SE). SEP is one of the largest pipeline MLPs in the United States and connects growing supply areas to high-demand markets for natural gas and crude oil. These assets include more than 15,000 miles of transmission and gathering pipelines, approximately 170 billion cubic feet of natural gas storage, and approximately 4.8 million barrels of crude oil storage.
SOURCE Spectra Energy Partners, LP
HOUSTON, Jan. 6, 2017 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) and Spectra Energy Partners (NYSE: SEP) will issue their fourth quarter 2016 earnings results before the market opens on Friday, February 17, 2017, in order to coincide with their planned 10-K filings.
Given the proximity of the earnings releases with the anticipated first quarter closing of the merger with Enbridge Inc., Spectra Energy and Spectra Energy Partners will not host a quarterly conference call, but will provide financial results and project updates in their news releases consistent with previous practices, and will be available for individual analyst and investor calls as requested.
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include approximately 21,000 miles of natural gas and crude oil pipelines; approximately 300 billion cubic feet of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, LLC, which is the general partner of DCP Midstream Partners, LP (NYSE: DPM), the largest natural gas liquids producer and the largest natural gas processor in the United States, and the largest gathering and processing master limited partnership in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com.
FORWARD-LOOKING STATEMENTS
This communication includes certain forward looking statements and information ("FLI") to provide Enbridge and Spectra Energy's shareholders and potential investors with information about Enbridge, Spectra Energy and their respective subsidiaries and affiliates, including each company's management's respective assessment of Enbridge, Spectra Energy and their respective subsidiaries' future plans and operations, which FLI may not be appropriate for other purposes. FLI is typically identified by words such as "anticipate", "expect", "project", "estimate", "forecast", "plan", "intend", "target", "believe", "likely" and similar words suggesting future outcomes or statements regarding an outlook. All statements other than statements of historical fact may be FLI. In particular, this document contains FLI pertaining to, but not limited to, information with respect to the proposed transaction jointly announced by Enbridge and Spectra Energy on September 6, 2016.
Although we believe that the FLI is reasonable based on the information available today and processes used to prepare it, such statements are not guarantees of future performance and you are cautioned against placing undue reliance on FLI. By its nature, FLI involves a variety of assumptions, which are based upon factors that may be difficult to predict and that may involve known and unknown risks and uncertainties and other factors which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by these FLI, including, but not limited to, the following: the timing and completion of the transaction, including receipt of regulatory approvals and the satisfaction of other conditions precedent; interloper risk; the realization of anticipated benefits and synergies of the transaction and the timing thereof; the success of integration plans; the focus of management time and attention on the transaction and other disruptions arising from the transaction; estimated future dividends; financial strength and flexibility; debt and equity market conditions, including the ability to access capital markets on favorable terms or at all; cost of debt and equity capital; potential changes in the Enbridge share price which may negatively impact the value of consideration offered to Spectra Energy shareholders; expected supply and demand for crude oil, natural gas, natural gas liquids and renewable energy; prices of crude oil, natural gas, natural gas liquids and renewable energy; economic and competitive conditions; expected exchange rates; inflation; interest rates; tax rates and changes; completion of growth projects; anticipated in-service dates; capital project funding; success of hedging activities; the ability of management of Enbridge, its subsidiaries and affiliates to execute key priorities, including those in connection with the transaction; availability and price of labor and construction materials; operational performance and reliability; customer, regulatory and other stakeholder approvals and support; regulatory and legislative decisions and actions; public opinion; and weather. We caution that the foregoing list of factors is not exhaustive. Additional information about these and other assumptions, risks and uncertainties can be found in applicable filings with Canadian and U.S. securities regulators, including any proxy statement, prospectus or registration statement filed in connection with the transaction. Due to the interdependencies and correlation of these factors, as well as other factors, the impact of any one assumption, risk or uncertainty on FLI cannot be determined with certainty.
Except to the extent required by law, we assume no obligation to publicly update or revise any FLI, whether as a result of new information, future events or otherwise. All FLI in this document is expressly qualified in its entirety by these cautionary statements.
SOURCE Spectra Energy Corp
Increases Annual Dividend to $1.76 from $1.62
HOUSTON, Jan. 5, 2017 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) has announced a 14-cent increase in its annual dividend on its common stock to $1.76 per share, or $0.44 on a quarterly basis. The quarterly cash dividend declared by Spectra Energy on its common stock for the first quarter of 2017 is payable on March 1, 2017, to shareholders of record at the close of business on February 15, 2017.
"Delivering on the commitment we made to our investors, which is underlined by our reliable cash flows, we are again increasing our annual dividend by 14 cents, to $1.76 per share," said Greg Ebel, chief executive officer, Spectra Energy. "Looking forward, our dividend growth projections are further enhanced upon completion of our proposed merger with Enbridge Inc. Including today's announced dividend increase, we anticipate investors of the combined company to benefit from an annualized 15 percent dividend increase in 2017, and then 10 to 12 percent annual increases through at least 2024."
Spectra Energy's proposed merger with Enbridge is expected to close in the first quarter this year.
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include approximately 21,000 miles of natural gas and crude oil pipelines; approximately 300 billion cubic feet of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, LLC, which is the general partner of DCP Midstream Partners, LP (NYSE: DPM), the largest natural gas liquids producer and the largest natural gas processor in the United States, and the largest gathering and processing master limited partnership in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com.
FORWARD-LOOKING STATEMENTS
This communication includes certain forward looking statements and information ("FLI") to provide Enbridge and Spectra Energy's shareholders and potential investors with information about Enbridge, Spectra Energy and their respective subsidiaries and affiliates, including each company's management's respective assessment of Enbridge, Spectra Energy and their respective subsidiaries' future plans and operations, which FLI may not be appropriate for other purposes. FLI is typically identified by words such as "anticipate", "expect", "project", "estimate", "forecast", "plan", "intend", "target", "believe", "likely" and similar words suggesting future outcomes or statements regarding an outlook. All statements other than statements of historical fact may be FLI. In particular, this document contains FLI pertaining to, but not limited to, information with respect to the proposed transaction jointly announced by Enbridge and Spectra Energy on September 6, 2016.
Although we believe that the FLI is reasonable based on the information available today and processes used to prepare it, such statements are not guarantees of future performance and you are cautioned against placing undue reliance on FLI. By its nature, FLI involves a variety of assumptions, which are based upon factors that may be difficult to predict and that may involve known and unknown risks and uncertainties and other factors which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by these FLI, including, but not limited to, the following: the timing and completion of the transaction, including receipt of regulatory approvals and the satisfaction of other conditions precedent; interloper risk; the realization of anticipated benefits and synergies of the transaction and the timing thereof; the success of integration plans; the focus of management time and attention on the transaction and other disruptions arising from the transaction; estimated future dividends; financial strength and flexibility; debt and equity market conditions, including the ability to access capital markets on favorable terms or at all; cost of debt and equity capital; potential changes in the Enbridge share price which may negatively impact the value of consideration offered to Spectra Energy shareholders; expected supply and demand for crude oil, natural gas, natural gas liquids and renewable energy; prices of crude oil, natural gas, natural gas liquids and renewable energy; economic and competitive conditions; expected exchange rates; inflation; interest rates; tax rates and changes; completion of growth projects; anticipated in-service dates; capital project funding; success of hedging activities; the ability of management of Enbridge, its subsidiaries and affiliates to execute key priorities, including those in connection with the transaction; availability and price of labor and construction materials; operational performance and reliability; customer, regulatory and other stakeholder approvals and support; regulatory and legislative decisions and actions; public opinion; and weather. We caution that the foregoing list of factors is not exhaustive. Additional information about these and other assumptions, risks and uncertainties can be found in applicable filings with Canadian and U.S. securities regulators, including any proxy statement, prospectus or registration statement filed in connection with the transaction. Due to the interdependencies and correlation of these factors, as well as other factors, the impact of any one assumption, risk or uncertainty on FLI cannot be determined with certainty.
Except to the extent required by law, we assume no obligation to publicly update or revise any FLI, whether as a result of new information, future events or otherwise. All FLI in this document is expressly qualified in its entirety by these cautionary statements.
SOURCE Spectra Energy Corp
HOUSTON, Dec.15, 2016 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) ("Spectra Energy") announced that during a special stockholder meeting held earlier today, Spectra Energy stockholders voted overwhelmingly to approve the previously announced combination of Spectra Energy with Enbridge Inc. (TSX, NYSE: ENB) ("Enbridge") in a stock-for-stock merger transaction. Approximately 73 percent of the total outstanding shares of Spectra Energy common stock, and approximately 98 percent of the total shares voted at the meeting, were voted in favor of the transaction. Once the transaction is completed, the combination will create the largest energy infrastructure company in North America and one of the largest globally, with a pro-forma enterprise value of approximately C$165 billion (US$127 billion).1
"Today's vote is a critical milestone that moves us closer to creating, with Enbridge, a true global energy infrastructure leader and the most diversified energy infrastructure company in North America, if not the world," said Greg Ebel, chief executive officer, Spectra Energy. "This is a transformational combination – with multiple platforms for organic growth – that will deliver tangible benefits to all Spectra Energy stakeholders. It diversifies our asset base and creates significant financial flexibility that allows us to continue to compete for – and win – the most significant, attractive growth projects. It will provide an expected annualized 15 percent dividend increase in year one, and is expected to increase and extend future annual dividend growth, from Spectra Energy's current rate of about 8 percent annually, to a range of 10 to 12 percent annually through at least 2024, with greatly enhanced distributable cash flow coverage also expected over this timeframe. We believe that no other company in our industry has that kind of high-return, low-risk model that investors value so highly."
Enbridge shareholders also approved the transaction in a vote held earlier today. Spectra Energy's stockholder approval and Enbridge shareholder approval are conditions to the closing of the transaction, but the completion of the transaction remains subject to certain other customary closing conditions.
Assuming timely receipt of the necessary antitrust and other regulatory approvals, and satisfaction of all other closing conditions in the merger agreement, the parties expect to complete the merger in the first quarter of 2017. Both Spectra Energy and Enbridge continue to work to meet the closing conditions in the merger agreement, and have filed applications with certain regulators. Enbridge has received the confirmation required to complete the transaction from the Minister of Transport under the Canada Transportation Act. On November 21, 2016, the Committee on Foreign Investment in the United States ("CFIUS") accepted the joint voluntary notice by Spectra Energy and Enbridge and began its 30-day review period, which will conclude no later than December 20, 2016, unless the review period is extended by CFIUS. As a standard part of the regulatory approval process for transactions of this type, both companies continue to work closely with the Federal Trade Commission and the Canadian Competition Bureau to expeditiously conclude each of their reviews of the transaction.
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include approximately 21,000 miles of natural gas and crude oil pipelines; approximately 300 billion cubic feet of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com.
FORWARD-LOOKING STATEMENTS
This communication includes certain forward looking statements and information ("FLI") to provide Enbridge and Spectra Energy's shareholders and potential investors with information about Enbridge, Spectra Energy and their respective subsidiaries and affiliates, including each company's management's respective assessment of Enbridge, Spectra Energy and their respective subsidiaries' future plans and operations, which FLI may not be appropriate for other purposes. FLI is typically identified by words such as "anticipate", "expect", "project", "estimate", "forecast", "plan", "intend", "target", "believe", "likely" and similar words suggesting future outcomes or statements regarding an outlook. All statements other than statements of historical fact may be FLI. In particular, this document contains FLI pertaining to, but not limited to, information with respect to the proposed transaction jointly announced by Enbridge and Spectra Energy on September 6, 2016.
Although we believe that the FLI is reasonable based on the information available today and processes used to prepare it, such statements are not guarantees of future performance and you are cautioned against placing undue reliance on FLI. By its nature, FLI involves a variety of assumptions, which are based upon factors that may be difficult to predict and that may involve known and unknown risks and uncertainties and other factors which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by these FLI, including, but not limited to, the following: the timing and completion of the transaction, including receipt of regulatory approvals and the satisfaction of other conditions precedent; interloper risk; the realization of anticipated benefits and synergies of the transaction and the timing thereof; the success of integration plans; the focus of management time and attention on the transaction and other disruptions arising from the transaction; estimated future dividends; financial strength and flexibility; debt and equity market conditions, including the ability to access capital markets on favorable terms or at all; cost of debt and equity capital; potential changes in the Enbridge share price which may negatively impact the value of consideration offered to Spectra Energy shareholders; expected supply and demand for crude oil, natural gas, natural gas liquids and renewable energy; prices of crude oil, natural gas, natural gas liquids and renewable energy; economic and competitive conditions; expected exchange rates; inflation; interest rates; tax rates and changes; completion of growth projects; anticipated in-service dates; capital project funding; success of hedging activities; the ability of management of Enbridge, its subsidiaries and affiliates to execute key priorities, including those in connection with the transaction; availability and price of labor and construction materials; operational performance and reliability; customer, regulatory and other stakeholder approvals and support; regulatory and legislative decisions and actions; public opinion; and weather. We caution that the foregoing list of factors is not exhaustive. Additional information about these and other assumptions, risks and uncertainties can be found in applicable filings with Canadian and U.S. securities regulators, including any proxy statement, prospectus or registration statement to be filed in connection with the transaction. Due to the interdependencies and correlation of these factors, as well as other factors, the impact of any one assumption, risk or uncertainty on FLI cannot be determined with certainty.
Except to the extent required by law, we assume no obligation to publicly update or revise any FLI, whether as a result of new information, future events or otherwise. All FLI in this document is expressly qualified in its entirety by these cautionary statements.
1 Enterprise value is based on the closing price of Enbridge common shares on the NYSE on September 2, 2016, and is translated at the spot foreign exchange rate on September 2 at the close of trading.
SOURCE Spectra Energy Corp
HOUSTON, Nov. 2, 2016 /PRNewswire/ -- Spectra Energy Partners, LP (NYSE: SEP) today reported net income of $296 million, including net income from controlling interests of $275 million, for the third quarter ended September 30, 2016, with diluted earnings per limited partner unit of $0.64. The third quarter included a non-recurring special item of $38 million, which decreased diluted earnings per limited partner unit by $0.12.
Highlights:
Third quarter 2016 ongoing distributable cash flow was $313 million, compared with $270 million in the prior-year quarter. Distributions per limited partner unit for third quarter 2016 were $0.67625, compared with $0.62625 per limited partner unit in third quarter 2015.
For the quarter, ongoing earnings before interest, taxes, depreciation and amortization (EBITDA) were $469 million, compared with $467 million in the prior-year quarter.
Ongoing net income from controlling interests was $313 million for the quarter, or $0.76 diluted earnings per limited partner unit, compared with $321 million, or $0.85 diluted earnings per limited partner unit, in the prior-year quarter. Net income from controlling interests was $275 million for the quarter, or $0.64 diluted earnings per limited partner unit, compared with $321 million, or $0.85 diluted earnings per limited partner unit, in the prior-year quarter.
CEO COMMENT
"Spectra Energy Partners' results once again benefited from our robust expansion program, and reflect the strength of our fee-based business model that has no direct commodity exposure, virtually no volume exposure, and high credit-quality customers," said Greg Ebel, chief executive officer, Spectra Energy Partners. "Our base business continues to perform well, and we achieved a renewal rate of more than 98 percent of contracted revenues on our U.S. natural gas pipelines – a very solid indication of the value our customers place on our system and the strategic value of having assets in the ground to build upon. We continue to generate strong and reliable cash flows that support the growth in the distributions we promised to investors at the beginning of the year.
"Spectra Energy Partners is a must-own investment, and will remain a key financing vehicle for our U.S. pipeline projects when the proposed Spectra Energy and Enbridge merger is completed. Upon closing the merger, SEP will maintain its low-risk, stable distributable cash flow model that has served investors so well since its inception. SEP has excellent liquidity and access to capital markets at very attractive rates, allowing it to fund the visible, high-quality growth projects we have in execution today and those that we will move into execution in the future."
SEGMENT RESULTS
U.S. Transmission
Ongoing EBITDA from U.S. Transmission was $430 million in third quarter 2016, compared with $401 million in third quarter 2015. The third quarter 2016 results exclude a special item of $38 million in expense related to the Texas Eastern pipeline incident in Pennsylvania and reflect increased earnings from expansion projects.
Liquids
Liquids EBITDA was $60 million in third quarter 2016, compared with $79 million in third quarter 2015. The decrease is due almost entirely to the absence of equity earnings from Sand Hills and Southern Hills natural gas liquids (NGL) pipelines, which Spectra Energy Partners owned until October 2015.
Other
"Other" net expenses were $21 million in third quarter 2016, compared with $13 million in third quarter 2015, reflecting higher allocated benefits costs.
Interest Expense
Interest expense was $53 million in third quarter 2016, compared with $59 million in third quarter 2015, reflecting higher capitalized interest.
Liquidity and Capital Expenditures
Total debt outstanding at Spectra Energy Partners as of September 30, 2016, was $7.1 billion, with available liquidity of $1.7 billion.
Including contributions from noncontrolling interests, Spectra Energy Partners has $1.8 billion of capital expansion spending planned in 2016, which will be funded through a combination of debt and equity. Including contributions from noncontrolling interests of $437 million, total capital spending for the nine months ended September 30, 2016, was $1.3 billion, consisting of $1.1 billion of growth capital expenditures and $178 million of maintenance capital expenditures.
This year, Spectra Energy Partners has received net proceeds of $493 million through its "At the Market" (ATM) equity issuance program, plus an additional $489 million from equity issuances to its general partner.
EXPANSION PROJECT UPDATES
Spectra Energy Partners placed the Loudon Expansion into service on time in September, while the Express Enhancement and phase one of Gulf Markets came online in October – both earlier than expected. Additionally, the Salem Lateral went into service in October. The AIM project is intended to be fully in service in the fourth quarter.
Construction on Sabal Trail began in the third quarter, with the project scheduled to be placed into service in the first half of 2017.
In the third quarter, Spectra Energy Partners received the FERC Environmental Assessment for Access South, Adair Southwest, and Lebanon Extension, keeping these projects on target for in-service in the second half of 2017.
Atlantic Bridge is expected to receive its FERC certificate in the fourth quarter, keeping the project on schedule for a second half of 2017 in-service date.
FERC certificates are expected for the NEXUS and TEAL projects in the first quarter of 2017, with in-service scheduled for the fourth quarter of 2017.
The Bayway Lateral project is on schedule for its first half of 2018 in-service, and PennEast continues to make progress toward being placed into service in the second half of 2018.
Development work also continues in New England with the Access Northeast project, which is designed to both physically and contractually serve the needs of New England power generators by providing significant additional natural gas transmission capacity into the region, and will improve reliability and save consumers an average of $1 billion a year in energy costs during a normal winter.
The Independent System Operator in New England, which is responsible for operating the electric grid, recently stated that New England's power generation situation is "precarious" during the winter months, and that by 2019 – without immediate action to solidify the region's energy infrastructure – it may be unsustainable during extreme cold conditions.
Spectra Energy – along with co-developers Eversource and National Grid – are extremely disappointed by some of the recent actions by certain New England states. Despite this, Access Northeast remains the solution for the region, and Spectra Energy remains committed to delivering the reliable and affordable energy to help consumers and to help each state meet its energy and environmental goals.
ADDITIONAL INFORMATION
Additional information about third quarter 2016 earnings can be obtained via the Spectra Energy website: www.spectraenergy.com.
The analyst call, held jointly with Spectra Energy, is scheduled for today, Wednesday, November 2, 2016, at 8 a.m. CT. The webcast will be available via the Spectra Energy and Spectra Energy Partners Investors pages. The conference call can be accessed by dialing (888) 252-3715 in the U.S. or Canada, or (706) 634-8942 internationally. The conference ID is 70917863 or "Spectra Energy / Spectra Energy Partners Earnings Call."
A replay of the call will be available until 5 p.m. CT on Friday, December 2, 2016, by dialing (800) 585-8367 in the U.S. or Canada, or (404) 537-3406 internationally, and using the above conference ID. A replay and transcript also will be available via the Spectra Energy and Spectra Energy Partners Investors pages.
Non-GAAP Financial Measures
We use ongoing net income from controlling interests as a measure to evaluate operations of the partnership. This measure is a non-GAAP financial measure as it represents net income from controlling interests, excluding special items. Special items represent certain charges and credits which we believe will not be recurring on a regular basis. We believe that the presentation of ongoing net income from controlling interests provides useful information to investors, as it allows investors to more accurately compare our ongoing performance across periods. The most directly comparable GAAP measure for ongoing net income from controlling interests is net income from controlling interests.
We use earnings from continuing operations before interest, income taxes, and depreciation and amortization (EBITDA) and ongoing EBITDA, non-GAAP financial measures, as performance measures for Spectra Energy Partners, LP. Ongoing EBITDA represents EBITDA, excluding special items. We believe that the presentation of EBITDA and ongoing EBITDA provides useful information to investors, as it allows investors to more accurately compare Spectra Energy Partners, LP's performance across periods. The most directly comparable GAAP measure for EBITDA and ongoing EBITDA for Spectra Energy Partners, LP is net income.
The primary performance measures used by us to evaluate segment performance are segment EBITDA and Other EBITDA. We consider segment EBITDA and Other EBITDA, which are the GAAP measures used to report segment results, to be good indicators of each segment's operating performance from its continuing operations as they represent the results of our segments' operations before depreciation and amortization without regard to financing methods or capital structures. Our segment EBITDA and Other EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate EBITDA in the same manner.
We also use ongoing segment EBITDA as a measure of performance. Ongoing segment EBITDA is a non-GAAP financial measure, as it represents reported segment EBITDA, excluding special items. We believe that the presentation of ongoing segment EBITDA provides useful information to investors, as it allows investors to more accurately compare a segment's ongoing performance across periods. The most directly comparable GAAP measure for ongoing segment EBITDA is segment EBITDA.
We also present Distributable Cash Flow (DCF), which is a non-GAAP financial measure. We believe that the presentation of DCF provides useful information to investors, as it represents the cash generation capabilities of the partnership to support distribution growth. We also use ongoing DCF, which is a non-GAAP financial measure, as it represents DCF, excluding the cash effect of special items. The most directly comparable GAAP measure for DCF and ongoing DCF is net income. We also use DCF coverage, which is a non-GAAP financial measure, as it represents DCF divided by distributions declared on partnership units. The most directly comparable GAAP measure for DCF coverage is Earnings-Per-Unit (EPU).
The non-GAAP financial measures presented in this press release should not be considered in isolation or as an alternative to financial measures presented in accordance with GAAP. These non-GAAP financial measures may not be comparable to similarly titled measures of other partnerships because other partnerships may not calculate these measures in the same manner.
Forward-Looking Statements
This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on our beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an effect on rate structure, and affect the speed at and degree to which competition enters the natural gas and oil industries; outcomes of litigation and regulatory investigations, proceedings or inquiries; weather and other natural phenomena, including the economic, operational and other effects of hurricanes and storms; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; general economic conditions, including the risk of a prolonged economic slowdown or decline, or the risk of delay in a recovery, which can affect the long-term demand for natural gas and oil and related services; potential effects arising from terrorist attacks and any consequential or other hostilities; changes in environmental, safety and other laws and regulations; the development of alternative energy resources; results and costs of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general market and economic conditions; increases in the cost of goods and services required to complete capital projects; declines in the market prices of equity and debt securities and resulting funding requirements for defined benefit pension plans; growth in opportunities, including the timing and success of efforts to develop U.S. and Canadian pipeline, storage, gathering, processing and other related infrastructure projects and the effects of competition; the performance of natural gas and oil transmission and storage, distribution, and gathering and processing facilities; the extent of success in connecting natural gas and oil supplies to gathering, processing and transmission systems and in connecting to expanding gas and oil markets; the effects of accounting pronouncements issued periodically by accounting standard-setting bodies; conditions of the capital markets during the periods covered by forward-looking statements; and the ability to successfully complete merger, acquisition or divestiture plans; regulatory or other limitations imposed as a result of a merger, acquisition or divestiture; and the success of the business following a merger, acquisition or divestiture. These factors, as well as additional factors that could affect our forward-looking statements, are described under the headings "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Information" in our 2015 Form 10-K, filed on February 25, 2016, and in our other filings made with the Securities and Exchange Commission (SEC), which are available via the SEC's website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. All forward-looking statements in this release are made as of the date hereof and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Spectra Energy Partners, LP (NYSE: SEP) is a Houston-based master limited partnership, formed by Spectra Energy Corp (NYSE: SE). SEP is one of the largest pipeline MLPs in the United States and connects growing supply areas to high-demand markets for natural gas and crude oil. These assets include more than 15,000 miles of transmission and gathering pipelines, approximately 170 billion cubic feet of natural gas storage, and approximately 4.8 million barrels of crude oil storage.
Spectra Energy Partners, LP | ||||||||||||||||
Quarterly Highlights | ||||||||||||||||
September 2016 | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In millions, except per-unit amounts) | ||||||||||||||||
Reported - These results include the impact of special items | ||||||||||||||||
Three Months Ended |
Nine Months Ended | |||||||||||||||
September 30, |
September 30, | |||||||||||||||
2016 |
2015 |
2016 |
2015 | |||||||||||||
INCOME |
||||||||||||||||
Operating Revenues |
$ |
628 |
$ |
612 |
$ |
1,870 |
$ |
1,821 |
||||||||
Total Reportable Segment EBITDA |
452 |
480 |
1,383 |
1,407 |
||||||||||||
Net Income - Controlling Interests |
275 |
321 |
860 |
921 |
||||||||||||
EBITDA BY BUSINESS SEGMENT |
||||||||||||||||
U.S. Transmission |
$ |
392 |
$ |
401 |
$ |
1,209 |
$ |
1,186 |
||||||||
Liquids |
60 |
79 |
174 |
221 |
||||||||||||
Total Reportable Segment EBITDA |
452 |
480 |
1,383 |
1,407 |
||||||||||||
Other EBITDA |
(21) |
(13) |
(63) |
(48) |
||||||||||||
Total Reportable Segment and Other EBITDA |
$ |
431 |
$ |
467 |
$ |
1,320 |
$ |
1,359 |
||||||||
PARTNERS' CAPITAL |
||||||||||||||||
Declared Cash Distribution per Limited Partner Unit |
$ |
0.67625 |
$ |
0.62625 |
$ |
1.99125 |
$ |
1.84125 |
||||||||
Weighted Average Units Outstanding |
||||||||||||||||
Limited Partner Units |
304 |
301 |
296 |
297 |
||||||||||||
General Partner Units |
6 |
6 |
6 |
6 |
||||||||||||
DISTRIBUTABLE CASH FLOW |
||||||||||||||||
Distributable Cash Flow |
$ |
270 |
$ |
270 |
$ |
916 |
$ |
945 |
||||||||
CAPITAL AND INVESTMENT EXPENDITURES (a) |
||||||||||||||||
Capital expenditures - U.S. Transmission |
$ |
1,492 |
$ |
1,144 |
||||||||||||
Capital expenditures - Liquids |
54 |
17 |
||||||||||||||
Investment expenditures - Sand Hills/Southern Hills/SESH/Penn |
181 |
91 |
||||||||||||||
Total |
$ |
1,727 |
$ |
1,252 |
||||||||||||
U.S. TRANSMISSION |
||||||||||||||||
Operating Revenues |
$ |
535 |
$ |
515 |
$ |
1,602 |
$ |
1,546 |
||||||||
Operating Expenses |
||||||||||||||||
Operating, Maintenance and Other |
217 |
169 |
572 |
496 |
||||||||||||
Other Income and Expenses |
74 |
55 |
179 |
136 |
||||||||||||
EBITDA |
$ |
392 |
$ |
401 |
$ |
1,209 |
$ |
1,186 |
||||||||
LIQUIDS |
||||||||||||||||
Operating Revenues |
$ |
93 |
$ |
97 |
$ |
268 |
$ |
275 |
||||||||
Operating Expenses |
||||||||||||||||
Operating, Maintenance and Other |
32 |
37 |
94 |
105 |
||||||||||||
Other Income and Expenses |
(1) |
19 |
— |
51 |
||||||||||||
EBITDA |
$ |
60 |
$ |
79 |
$ |
174 |
$ |
221 |
||||||||
Express Pipeline Revenue Receipts, MBbl/d (b) |
235 |
234 |
234 |
239 |
||||||||||||
Platte PADD II Deliveries, MBbl/d |
131 |
167 |
131 |
169 |
||||||||||||
Canadian Dollar Exchange Rate, Average |
1.30 |
1.31 |
1.32 |
1.26 |
||||||||||||
September 30, |
December 31, | |||||||||||||||
2016 |
2015 | |||||||||||||||
Debt |
$ |
7,053 |
$ |
6,604 |
||||||||||||
Actual Units Outstanding (c) |
312 |
291 |
||||||||||||||
(a) Excludes contributions received from noncontrolling interests of $335 million in 2016 and $132 million in 2015. 2016 period also excludes sale of Sabal Trail interest of $102 million. | ||||||||||||||||
(b) Thousand barrels per day. | ||||||||||||||||
(c) Increase in 2016 resulted from the "At the Market" equity issuance program and equity issuance to Spectra Energy Corp in April 2016. |
Spectra Energy Partners, LP | |||||||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
(In millions) | |||||||||||||||||||
Reported - These results include the impact of special items | |||||||||||||||||||
Three Months |
Nine Months |
||||||||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||||||||
Operating Revenues |
$ |
628 |
$ |
612 |
$ |
1,870 |
$ |
1,821 |
|||||||||||
Operating Expenses |
348 |
293 |
961 |
869 |
|||||||||||||||
Operating Income |
280 |
319 |
909 |
952 |
|||||||||||||||
Other Income and Expenses |
73 |
72 |
181 |
183 |
|||||||||||||||
Interest Expense |
53 |
59 |
165 |
179 |
|||||||||||||||
Earnings Before Income Taxes |
300 |
332 |
925 |
956 |
|||||||||||||||
Income Tax Expense |
4 |
1 |
13 |
8 |
|||||||||||||||
Net Income |
296 |
331 |
912 |
948 |
|||||||||||||||
Net Income - Noncontrolling Interests |
21 |
10 |
52 |
27 |
|||||||||||||||
Net Income - Controlling Interests |
$ |
275 |
$ |
321 |
$ |
860 |
$ |
921 |
Spectra Energy Partners, LP | |||||||||||
Condensed Consolidated Balance Sheets | |||||||||||
(Unaudited) | |||||||||||
(In millions) | |||||||||||
September 30, |
December 31, | ||||||||||
2016 |
2015 | ||||||||||
ASSETS |
|||||||||||
Current Assets |
$ |
761 |
$ |
544 |
|||||||
Investments and Other Assets |
4,418 |
4,180 |
|||||||||
Net Property, Plant and Equipment |
15,317 |
13,837 |
|||||||||
Regulatory Assets and Deferred Debits |
355 |
290 |
|||||||||
Total Assets |
$ |
20,851 |
$ |
18,851 |
|||||||
LIABILITIES AND EQUITY |
|||||||||||
Current Liabilities |
$ |
2,261 |
$ |
1,471 |
|||||||
Long-term Debt |
5,454 |
5,845 |
|||||||||
Deferred Credits and Other Liabilities |
204 |
189 |
|||||||||
Equity |
12,932 |
11,346 |
|||||||||
Total Liabilities and Equity |
$ |
20,851 |
$ |
18,851 |
Spectra Energy Partners, LP | |||||||||
Distributable Cash Flow | |||||||||
(Unaudited) | |||||||||
(In millions) | |||||||||
Reported - These results include the impact of special items | |||||||||
Three Months Ended |
Nine Months Ended |
||||||||
2016 |
2015 |
2016 |
2015 |
||||||
Net Income |
$ 296 |
$ 331 |
$ 912 |
$ 948 |
|||||
Add: |
|||||||||
Interest expense |
53 |
59 |
165 |
179 |
|||||
Income tax expense |
4 |
1 |
13 |
8 |
|||||
Depreciation and amortization |
78 |
74 |
232 |
220 |
|||||
Foreign currency loss |
- |
2 |
- |
5 |
|||||
Less: |
|||||||||
Third party interest income |
- |
- |
2 |
1 |
|||||
EBITDA |
431 |
467 |
1,320 |
1,359 |
|||||
Add: |
|||||||||
Earnings from equity investments |
(35) |
(49) |
(92) |
(134) |
|||||
Distributions from equity investments |
35 |
59 |
132 |
183 |
|||||
Non-cash impairment at Ozark Gas Gathering |
- |
- |
- |
9 |
|||||
Other |
9 |
2 |
12 |
8 |
|||||
Less: |
|||||||||
Interest expense |
53 |
59 |
165 |
179 |
|||||
Equity AFUDC |
38 |
23 |
84 |
50 |
|||||
Net cash paid for income taxes |
2 |
1 |
7 |
8 |
|||||
Distributions to non-controlling interests |
7 |
7 |
22 |
23 |
|||||
Maintenance capital expenditures |
70 |
119 |
178 |
220 |
|||||
Total Distributable Cash Flow |
$ 270 |
$ 270 |
$ 916 |
$ 945 |
Spectra Energy Partners, LP |
|||||||||||||||
Reported to Ongoing Earnings Reconciliation |
|||||||||||||||
September 2016 Quarter-to-Date |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(In millions) |
|||||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND |
Reported Earnings |
Less: Special |
Ongoing Earnings |
||||||||||||
U.S. Transmission |
$ |
392 |
$ |
(38) |
A |
$ |
430 |
||||||||
Liquids |
60 |
— |
60 |
||||||||||||
Total Reportable Segment EBITDA |
452 |
(38) |
490 |
||||||||||||
Other |
(21) |
— |
(21) |
||||||||||||
Total Reportable Segment and other EBITDA |
$ |
431 |
$ |
(38) |
$ |
469 |
|||||||||
EARNINGS |
|||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
431 |
$ |
(38) |
$ |
469 |
|||||||||
Depreciation and Amortization |
(78) |
— |
(78) |
||||||||||||
Interest Expense |
(53) |
— |
(53) |
||||||||||||
Income Tax Expense |
(4) |
— |
(4) |
||||||||||||
Total Net Income |
296 |
(38) |
334 |
||||||||||||
Total Net Income - Noncontrolling Interests |
(21) |
— |
(21) |
||||||||||||
Total Net Income - Controlling Interests |
$ |
275 |
$ |
(38) |
$ |
313 |
|||||||||
A - Inspection and repair costs related to Texas Eastern pipeline incident in Pennsylvania |
Spectra Energy Partners, LP |
||||||||
Reported to Ongoing Earnings Reconciliation |
||||||||
September 2015 Quarter-to-Date |
||||||||
(Unaudited) |
||||||||
(In millions) |
||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND DEPRECIATION AND AMORTIZATION |
Reported/ Ongoing |
|||||||
U.S. Transmission |
$ |
401 |
||||||
Liquids |
79 |
|||||||
Total Reportable Segment EBITDA |
480 |
|||||||
Other |
(13) |
|||||||
Total Reportable Segment and other EBITDA |
$ |
467 |
||||||
EARNINGS |
||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
467 |
||||||
Depreciation and Amortization |
(74) |
|||||||
Interest Expense |
(59) |
|||||||
Other Income and Expenses |
(2) |
|||||||
Income Tax Expense |
(1) |
|||||||
Total Net Income |
331 |
|||||||
Total Net Income - Noncontrolling Interests |
(10) |
|||||||
Total Net Income - Controlling Interests |
$ |
321 |
||||||
Spectra Energy Partners, LP | |||||||||||||
Reported to Ongoing Distributable Cash Flow Reconciliation | |||||||||||||
Unaudited | |||||||||||||
(In millions) | |||||||||||||
Three Months Ended |
Three Months Ended |
||||||||||||
September 30, 2016 |
September 30, 2015 |
||||||||||||
Reported |
Less: |
Ongoing |
Reported |
Less: |
Ongoing |
||||||||
Net Income |
$ 296 |
$ (38) |
$ 334 |
$ 331 |
$ - |
$ 331 |
|||||||
Add: |
|||||||||||||
Interest expense |
53 |
- |
53 |
59 |
- |
59 |
|||||||
Income tax expense |
4 |
- |
4 |
1 |
- |
1 |
|||||||
Depreciation and amortization |
78 |
- |
78 |
74 |
- |
74 |
|||||||
Foreign currency loss |
- |
- |
- |
2 |
- |
2 |
|||||||
Less: |
|||||||||||||
Third party interest income |
- |
- |
- |
- |
- |
- |
|||||||
EBITDA |
431 |
(38) |
469 |
467 |
- |
467 |
|||||||
Add: |
|||||||||||||
Earnings from equity investments |
(35) |
- |
(35) |
(49) |
- |
(49) |
|||||||
Distributions from equity investments |
35 |
- |
35 |
59 |
- |
59 |
|||||||
Other |
9 |
- |
9 |
2 |
- |
2 |
|||||||
Less: |
|||||||||||||
Interest expense |
53 |
- |
53 |
59 |
- |
59 |
|||||||
Equity AFUDC |
38 |
- |
38 |
23 |
- |
23 |
|||||||
Net cash paid for income taxes |
2 |
- |
2 |
1 |
- |
1 |
|||||||
Distributions to non-controlling interests |
7 |
- |
7 |
7 |
- |
7 |
|||||||
Maintenance capital expenditures |
70 |
5 |
65 |
119 |
- |
119 |
|||||||
Total Distributable Cash Flow |
$ 270 |
$ (43) |
$ 313 |
$ 270 |
$ - |
$ 270 |
Logo - http://photos.prnewswire.com/prnh/20071107/CLW064
SOURCE Spectra Energy Partners, LP
HOUSTON, Nov. 2, 2016 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) today reported net income of $281 million, including net income from controlling interests of $195 million, for the third quarter ended September 30, 2016, with diluted earnings per share of $0.28. The third quarter results included non-recurring special items, which had income tax effects of $41 million and decreased diluted earnings per share by $0.03.
Highlights:
For the quarter, ongoing earnings before interest, taxes, depreciation and amortization (EBITDA) were $692 million, compared with $634 million in the prior-year quarter.
Ongoing distributable cash flow for the quarter was $280 million, compared with $223 million in the same quarter last year.
For the quarter, ongoing net income from controlling interests was $220 million, or $0.31 diluted earnings per share, compared with $156 million, or $0.23 diluted earnings per share, in third quarter 2015. Net income from controlling interests was $195 million, or $0.28 diluted earnings per share, compared with $174 million, or $0.26 diluted earnings per share, in third quarter 2015.
CEO COMMENT
"Spectra Energy delivered yet another solid quarter, with ongoing results very much in line with our full-year expectations. The strength of our base businesses and growth from our robust expansion program continue to provide outstanding value to investors," said Greg Ebel, chief executive officer, Spectra Energy.
"We have a track record of delivering projects on time and on budget, and we have built on that reputation with projects we placed into service in the third quarter and those scheduled to be in service in the fourth quarter. This is a testament to our execution model, our team, and the strategic value of being able to build upon our existing asset footprint. These expansion projects and the reliable, affordable energy they will supply across North America will serve customers and investors for decades to come. We are equally pleased with the fact that DCP Midstream has already achieved its 35-cent NGL break-even target.
"As we progress toward completing our proposed merger with Enbridge, we remain highly confident in the strategic value of the combination and the ability of the 'new' Enbridge to deliver on the benefits that we outlined for investors when we announced the transaction in September."
EFFECTS OF SPECIAL ITEMS
Third Quarter 2016 |
||||||
($MM) |
Segment |
EBITDA |
Income |
Net |
DCF | |
Ongoing |
$ 692 |
$ (51) |
$ 220 |
$ 280 | ||
Adjustments related to Special Items |
||||||
Costs related to Texas Eastern pipeline incident | ||||||
Inspection and repair costs |
SEP |
$ (38) |
$ 10 |
$ (18) |
(2) |
$ (38) |
Maintenance capital expenditures |
SEP |
- |
- |
- |
(5) | |
Effects of flooding in British Columbia |
W. Canada |
(13) |
3 |
(10) |
(13) | |
Employee and overhead reduction costs |
W. Canada |
(3) |
- |
(3) |
(3) | |
Tax benefit on Empress transaction |
W. Canada |
- |
27 |
27 |
- | |
Employee and overhead reduction costs |
Field Services |
(2) |
1 |
(1) |
- | |
Gain on sale of an asset |
Field Services |
2 |
(1) |
1 |
- | |
Asset impairment |
Field Services |
(3) |
1 |
(2) |
- | |
Transaction costs |
Other |
(19) |
- |
(19) |
(19) | |
Total Special Items |
$ (76) |
$ 41 |
$ (25) |
$ (78) | ||
Reported |
$ 616 |
$ (10) |
$ 195 |
$ 202 | ||
(1) Represents net income from controlling interests |
||||||
(2) Net of non-controlling interests impact of $10 million |
||||||
Third Quarter 2015 |
||||||
($MM) |
Segment |
EBITDA |
Income |
Net |
DCF | |
Ongoing |
$ 634 |
$ (62) |
$ 156 |
$ 223 | ||
Adjustments related to Special Items |
||||||
Employee and overhead reduction costs |
Field Services |
(1) |
1 |
- |
- | |
Gain on sale of an asset |
Field Services |
30 |
(11) |
19 |
- | |
Goodwill impairment |
Field Services |
(3) |
2 |
(1) |
- | |
Total Special Items |
$ 26 |
$ (8) |
$ 18 |
$ - | ||
Reported |
$ 660 |
$ (70) |
$ 174 |
$ 223 | ||
(1) Represents net income from controlling interests |
SEGMENT RESULTS
Spectra Energy Partners
Ongoing EBITDA from Spectra Energy Partners was $502 million in third quarter 2016, compared with $488 million in third quarter 2015. Third quarter 2016 results exclude a special item of $38 million in expense. These results reflect increased earnings from expansion projects, partially offset by the absence of equity earnings from Sand Hills and Southern Hills natural gas liquids (NGL) pipelines, which Spectra Energy Partners owned until October 2015. Earnings from these NGL pipeline interests have been reflected in the Field Services segment.
Distribution
Distribution EBITDA was $77 million in third quarter 2016, compared with $70 million in third quarter 2015. This increase was mainly due to incremental earnings from the 2015 Dawn-Parkway expansion project and higher storage margins.
Western Canada Transmission & Processing
Ongoing EBITDA from Western Canada Transmission & Processing was $109 million in third quarter 2016, compared with $117 million in third quarter 2015. The 2016 period excludes special items of $16 million, which unfavorably affected EBITDA. The segment's results largely reflect lower gathering and processing revenues.
Field Services
Ongoing EBITDA from Field Services was $15 million in third quarter 2016, compared with $(29) million in third quarter 2015. The 2016 and 2015 periods exclude special items of $3 million in net expenses and $26 million in net gains, respectively. The segment's results are primarily attributable to favorable contract realignment efforts, continued cost-saving initiatives and asset growth, partially offset by volume declines in certain geographic regions. As a reminder, Spectra Energy's EBITDA from Field Services represents the company's 50 percent share of DCP Midstream's net income plus gains from DPM unit issuances.
During the third quarters of 2016 and 2015, respectively, NGL prices averaged $0.45 per gallon versus $0.42 per gallon, NYMEX natural gas averaged $2.81 per million British thermal units (MMBtu) versus $2.77 per MMBtu, and crude oil averaged approximately $45 per barrel versus $46 per barrel.
Other
Ongoing net expenses from "Other" were $11 million and $12 million in third quarters 2016 and 2015, respectively. The 2016 period excludes a special item of $19 million in expense. "Other" primarily consists of corporate expenses, including benefits and captive insurance.
Interest Expense
Interest expense was $133 million in third quarter 2016, compared with $155 million in third quarter 2015, primarily due to a reversal of an interest accrual related to the release of tax reserves.
Income Tax Expense
Income tax expense was $10 million in third quarter 2016, compared with $70 million in third quarter 2015, with effective tax rates of 3 percent and 22 percent, respectively. The release of tax reserves contributed to the lower tax expense and lower rate in the quarter. The 2016 period also included a $27 million tax benefit reported as a special item related to the sale of Empress.
Foreign Currency
Net income from controlling interests for the quarter was higher by $4 million.
Liquidity and Capital Expenditures
Total debt outstanding at Spectra Energy as of September 30, 2016, was $15.2 billion, with available liquidity of $5.2 billion. Available liquidity includes a $2 billion credit facility executed at Spectra Energy Capital in September 2016.
Including contributions from noncontrolling interests, Spectra Energy has $3.0 billion of capital expansion spending planned in 2016, $1.8 billion of which will be at Spectra Energy Partners. Including contributions from noncontrolling interests of $437 million, total capital spending for the nine months ended September 30, 2016, was $2.15 billion, comprised of $1.73 billion of growth capital expenditures and $417 million of maintenance capital expenditures.
EXPANSION PROJECT UPDATES
By the end of 2016, the company will have:
U.S. Projects
Spectra Energy Partners placed the Loudon Expansion into service on time in September, while the Express Enhancement and phase one of Gulf Markets came online in October – both earlier than expected. Additionally, the Salem Lateral went into service in October. The AIM project is intended to be fully in service in the fourth quarter.
Construction on Sabal Trail began in the third quarter, with the project scheduled to be placed into service in the first half of 2017.
In the third quarter, Spectra Energy Partners received the FERC Environmental Assessment for Access South, Adair Southwest, and Lebanon Extension, keeping these projects on target for in-service in the second half of 2017.
Atlantic Bridge is expected to receive its FERC certificate in the fourth quarter, keeping the project on schedule for a second half of 2017 in-service date.
FERC certificates are expected for the NEXUS and TEAL projects in the first quarter of 2017, with in-service scheduled for the fourth quarter of 2017.
The Bayway Lateral project is on schedule for its first half of 2018 in-service, and PennEast continues to make progress toward being placed into service in the second half of 2018.
The Valley Crossing Pipeline project continues to advance, and is in the process of submitting the necessary regulatory applications. It has begun right of way acquisitions, and continues to progress toward its second half of 2018 in-service date.
Development work also continues in New England with the Access Northeast project, which is designed to both physically and contractually serve the needs of New England power generators by providing significant additional natural gas transmission capacity into the region, and will improve reliability and save consumers an average of $1 billion a year in energy costs during a normal winter.
The Independent System Operator in New England, which is responsible for operating the electric grid, recently stated that New England's power generation situation is "precarious" during the winter months, and that by 2019 – without immediate action to solidify the region's energy infrastructure – it may be unsustainable during extreme cold conditions.
Spectra Energy – along with co-developers Eversource and National Grid – are extremely disappointed by some of the recent actions by certain New England states. Despite this, Access Northeast remains the solution for the region, and Spectra Energy remains committed to delivering the reliable and affordable energy to help consumers and to help each state meet its energy and environmental goals.
Distribution
At Union Gas, both the Burlington-Oakville and 2016 Dawn-Parkway projects were placed in service this week.
The 2017 Dawn-Parkway expansion continues to make progress toward its second half of 2017 in-service date, as does the Panhandle Reinforcement project.
Western Canada
High Pine received its National Energy Board (NEB) approval in August. With this approval, the construction timeline has shifted, moving the in-service date of this project from the first half of 2017 to the second half of 2017.
In the third quarter, construction began on Jackfish Lake, which will be placed into service in the first half of 2017, and on the RAM project, which will be phased into service through 2018.
The Wyndwood project submitted its application to the NEB in October, and is on track for its first half of 2018 in-service.
ADDITIONAL INFORMATION
Additional information about third quarter 2016 earnings can be obtained via the Spectra Energy website: www.spectraenergy.com.
The analyst call, held jointly with Spectra Energy Partners, is scheduled for today, Wednesday, November 2, 2016, at 8 a.m. CT. The webcast will be available via the Spectra Energy and Spectra Energy Partners Investors pages. The conference call can be accessed by dialing (888) 252-3715 in the U.S. or Canada, or (706) 634-8942 internationally. The conference ID is 70917863 or "Spectra Energy / Spectra Energy Partners Earnings Call."
A replay of the call will be available until 5 p.m. CT on Friday, December 2, 2016, by dialing (800) 585-8367 in the U.S. or Canada, or (404) 537-3406 internationally, and using the above conference ID. A replay and transcript also will be available via the Spectra Energy and Spectra Energy Partners Investors pages.
Non-GAAP Financial Measures
We use ongoing net income from controlling interests and ongoing diluted EPS as measures to evaluate operations of the company. These measures are non-GAAP financial measures as they represent net income from controlling interests and diluted EPS, excluding special items. Special items represent certain charges and credits which we believe will not be recurring on a regular basis. We believe that the presentation of ongoing net income from controlling interests and ongoing diluted EPS provides useful information to investors, as it allows investors to more accurately compare our ongoing performance across periods. The most directly comparable GAAP measures for ongoing net income from controlling interests and ongoing diluted EPS are net income from controlling interests and diluted EPS.
We use earnings from continuing operations before interest, income taxes, and depreciation and amortization (EBITDA) and ongoing EBITDA, non-GAAP financial measures, as performance measures for Spectra Energy Corp. Ongoing EBITDA represents EBITDA, excluding special items. We believe that the presentation of EBITDA and ongoing EBITDA provides useful information to investors, as it allows investors to more accurately compare Spectra Energy Corp's performance across periods. The most directly comparable GAAP measure for EBITDA and ongoing EBITDA for Spectra Energy Corp is net income.
The primary performance measures used by us to evaluate segment performance are segment EBITDA and Other EBITDA. We consider segment EBITDA and Other EBITDA, which are the GAAP measures used to report segment results, to be good indicators of each segment's operating performance from its continuing operations as they represent the results of our segments' operations before depreciation and amortization without regard to financing methods or capital structures. Our segment EBITDA and Other EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate EBITDA in the same manner.
We also use ongoing segment EBITDA and ongoing Other EBITDA (net expenses) as measures of performance. Ongoing segment EBITDA and ongoing Other EBITDA are non-GAAP financial measures, as they represent segment EBITDA and Other EBITDA, excluding special items. We believe that the presentation of ongoing segment EBITDA and ongoing Other EBITDA provides useful information to investors, as it allows investors to more accurately compare a segment's or Other's ongoing performance across periods. The most directly comparable GAAP measures for ongoing segment EBITDA and ongoing Other EBITDA are segment EBITDA and Other EBITDA.
We also present Distributable Cash Flow (DCF), which is a non-GAAP financial measure. We believe that the presentation of DCF provides useful information to investors, as it represents the cash generation capabilities of the company to support dividend growth. We also use ongoing DCF, which is a non-GAAP financial measure, as it represents DCF, excluding the cash effect of special items. The most directly comparable GAAP measure for DCF and ongoing DCF is net income. We also use DCF coverage, which is a non-GAAP financial measure, as it represents DCF divided by dividends declared on common stock. The most directly comparable GAAP measure for DCF coverage is EPS.
The non-GAAP financial measures presented in this press release should not be considered in isolation or as an alternative to financial measures presented in accordance with GAAP. These non-GAAP financial measures may not be comparable to similarly titled measures of other companies because other companies may not calculate these measures in the same manner.
Forward-Looking Statements
This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on our beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an effect on rate structure, and affect the speed at and degree to which competition enters the natural gas and oil industries; outcomes of litigation and regulatory investigations, proceedings or inquiries; weather and other natural phenomena, including the economic, operational and other effects of hurricanes and storms; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; general economic conditions, including the risk of a prolonged economic slowdown or decline, or the risk of delay in a recovery, which can affect the long-term demand for natural gas and oil and related services; potential effects arising from terrorist attacks and any consequential or other hostilities; changes in environmental, safety and other laws and regulations; the development of alternative energy resources; results and costs of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general market and economic conditions; increases in the cost of goods and services required to complete capital projects; declines in the market prices of equity and debt securities and resulting funding requirements for defined benefit pension plans; growth in opportunities, including the timing and success of efforts to develop U.S. and Canadian pipeline, storage, gathering, processing and other related infrastructure projects and the effects of competition; the performance of natural gas and oil transmission and storage, distribution, and gathering and processing facilities; the extent of success in connecting natural gas and oil supplies to gathering, processing and transmission systems and in connecting to expanding gas and oil markets; the effects of accounting pronouncements issued periodically by accounting standard-setting bodies; conditions of the capital markets during the periods covered by forward-looking statements; and the ability to successfully complete merger, acquisition or divestiture plans; regulatory or other limitations imposed as a result of a merger, acquisition or divestiture; and the success of the business following a merger, acquisition or divestiture. These factors, as well as additional factors that could affect our forward-looking statements, are described under the headings "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Information" in our 2015 Form 10-K, filed on February 25, 2016, and in our other filings made with the Securities and Exchange Commission (SEC), which are available via the SEC's website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. All forward-looking statements in this release are made as of the date hereof and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include approximately 21,000 miles of natural gas and crude oil pipelines; approximately 300 billion cubic feet of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com.
Spectra Energy Corp | |||||||||||||||||
Quarterly Highlights | |||||||||||||||||
September 2016 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(In millions, except per-share amounts and where noted) | |||||||||||||||||
Reported - These results include the impact of special items | |||||||||||||||||
Three Months |
Nine Months | ||||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||||
COMMON STOCK DATA |
|||||||||||||||||
Earnings Per Share, Diluted |
$ |
0.28 |
$ |
0.26 |
$ |
0.83 |
$ |
0.68 |
|||||||||
Dividends Per Share |
$ |
0.405 |
$ |
0.37 |
$ |
1.215 |
$ |
1.11 |
|||||||||
Weighted-Average Shares Outstanding, Diluted |
703 |
672 |
693 |
672 |
|||||||||||||
INCOME |
|||||||||||||||||
Operating Revenues |
$ |
1,075 |
$ |
1,103 |
$ |
3,618 |
$ |
3,918 |
|||||||||
Total Reportable Segment EBITDA |
646 |
672 |
2,073 |
1,910 |
|||||||||||||
Net Income - Controlling Interests |
195 |
174 |
578 |
459 |
|||||||||||||
EBITDA BY BUSINESS SEGMENT |
|||||||||||||||||
Spectra Energy Partners |
$ |
464 |
$ |
488 |
$ |
1,408 |
$ |
1,421 |
|||||||||
Distribution |
77 |
70 |
351 |
360 |
|||||||||||||
Western Canada Transmission & Processing |
93 |
117 |
313 |
382 |
|||||||||||||
Field Services |
12 |
(3) |
1 |
(253) |
|||||||||||||
Total Reportable Segment EBITDA |
646 |
672 |
2,073 |
1,910 |
|||||||||||||
Other EBITDA |
(30) |
(12) |
(85) |
(39) |
|||||||||||||
Total Reportable Segment and Other EBITDA |
$ |
616 |
$ |
660 |
$ |
1,988 |
$ |
1,871 |
|||||||||
DISTRIBUTABLE CASH FLOW |
|||||||||||||||||
Distributable Cash Flow |
$ |
202 |
$ |
223 |
$ |
971 |
$ |
1,080 |
|||||||||
CAPITAL AND INVESTMENT EXPENDITURES |
|||||||||||||||||
Spectra Energy Partners (a) |
$ |
1,727 |
$ |
1,252 |
|||||||||||||
Distribution |
577 |
374 |
|||||||||||||||
Western Canada Transmission & Processing |
246 |
241 |
|||||||||||||||
Other |
38 |
41 |
|||||||||||||||
Total Capital and Investment Expenditures (a) |
$ |
2,588 |
$ |
1,908 |
|||||||||||||
Expansion and Investment (a) |
$ |
2,171 |
$ |
1,433 |
|||||||||||||
Maintenance and Other |
417 |
475 |
|||||||||||||||
Total Capital and Investment Expenditures (a) |
$ |
2,588 |
$ |
1,908 |
|||||||||||||
September 30, |
December 31, | ||||||||||||||||
2016 |
2015 | ||||||||||||||||
CAPITALIZATION |
|||||||||||||||||
Common Equity - Controlling Interests |
27.5 |
% |
26.6 |
% | |||||||||||||
Noncontrolling Interests and Preferred Stock |
16.6 |
% |
13.6 |
% | |||||||||||||
Total Debt |
55.9 |
% |
59.8 |
% | |||||||||||||
Total Debt |
$ |
15,198 |
$ |
14,656 |
|||||||||||||
Book Value Per Share (b) |
$ |
10.65 |
$ |
9.73 |
|||||||||||||
Actual Shares Outstanding (c) |
701 |
671 |
|||||||||||||||
(a) Excludes contributions received from noncontrolling interests of $335 million in 2016 and $132 million in 2015. 2016 period also excludes sale of Sabal Trail interest of $102 million. | |||||||||||||||||
(b) Represents controlling interests. |
|||||||||||||||||
(c) Increase in 2016 resulted from a newly initiated "At the Market" equity issuance program in March 2016 and equity issuance to the public in April 2016. |
Spectra Energy Corp | ||||||||||||||||
Quarterly Highlights | ||||||||||||||||
September 2016 | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In millions, except where noted) | ||||||||||||||||
Reported - These results include the impact of special items | ||||||||||||||||
Three Months |
Nine Months | |||||||||||||||
2016 |
2015 |
2016 |
2015 | |||||||||||||
SPECTRA ENERGY PARTNERS |
||||||||||||||||
Operating Revenues |
$ |
628 |
$ |
612 |
$ |
1,870 |
$ |
1,821 |
||||||||
Operating Expenses |
||||||||||||||||
Operating, Maintenance and Other |
251 |
207 |
672 |
606 |
||||||||||||
Other Income and Expenses |
87 |
83 |
210 |
206 |
||||||||||||
EBITDA |
$ |
464 |
$ |
488 |
$ |
1,408 |
$ |
1,421 |
||||||||
Express Pipeline Revenue Receipts, MBbl/d (a) |
235 |
234 |
234 |
239 |
||||||||||||
Platte PADD II Deliveries, MBbl/d |
131 |
167 |
131 |
169 |
||||||||||||
DISTRIBUTION |
||||||||||||||||
Operating Revenues |
$ |
209 |
$ |
209 |
$ |
958 |
$ |
1,161 |
||||||||
Operating Expenses |
||||||||||||||||
Natural Gas Purchased |
46 |
53 |
352 |
539 |
||||||||||||
Operating, Maintenance and Other |
86 |
86 |
257 |
262 |
||||||||||||
Other Income and Expenses |
— |
— |
2 |
— |
||||||||||||
EBITDA |
$ |
77 |
$ |
70 |
$ |
351 |
$ |
360 |
||||||||
Number of Customers, Thousands |
1,450 |
1,429 |
||||||||||||||
Heating Degree Days, Fahrenheit |
196 |
245 |
4,543 |
5,370 |
||||||||||||
Pipeline Throughput, TBtu (b) |
162 |
134 |
547 |
594 |
||||||||||||
Canadian Dollar Exchange Rate, Average |
1.30 |
1.31 |
1.32 |
1.26 |
||||||||||||
WESTERN CANADA TRANSMISSION & PROCESSING |
||||||||||||||||
Operating Revenues |
$ |
236 |
$ |
288 |
$ |
799 |
$ |
962 |
||||||||
Operating Expenses |
||||||||||||||||
Natural Gas and Petroleum Products Purchased |
5 |
32 |
68 |
124 |
||||||||||||
Operating, Maintenance and Other |
141 |
141 |
426 |
462 |
||||||||||||
Other Income and Expenses |
3 |
2 |
8 |
6 |
||||||||||||
EBITDA |
$ |
93 |
$ |
117 |
$ |
313 |
$ |
382 |
||||||||
Pipeline Throughput, TBtu |
214 |
213 |
680 |
689 |
||||||||||||
Volumes Processed, TBtu |
145 |
157 |
484 |
493 |
||||||||||||
Canadian Dollar Exchange Rate, Average |
1.30 |
1.31 |
1.32 |
1.26 |
||||||||||||
FIELD SERVICES |
||||||||||||||||
Earnings (loss) from Equity Investment in DCP Midstream, LLC |
$ |
12 |
$ |
(3) |
$ |
1 |
$ |
(253) |
||||||||
Natural Gas Gathered and Processed/Transported, TBtu/day (c) |
6.4 |
7.3 |
6.7 |
7.1 |
||||||||||||
Natural Gas Liquids Production, MBbl/d (c) |
403 |
421 |
400 |
410 |
||||||||||||
Average Natural Gas Price Per MMBtu (d) |
$ |
2.81 |
$ |
2.77 |
$ |
2.29 |
$ |
2.80 |
||||||||
Average Natural Gas Liquids Price Per Gallon (e) |
$ |
0.45 |
$ |
0.42 |
$ |
0.43 |
$ |
0.46 |
||||||||
Average Crude Oil Price Per Barrel (f) |
$ |
44.94 |
$ |
46.43 |
$ |
41.34 |
$ |
51.00 |
||||||||
(a) Thousand barrels per day. |
||||||||||||||||
(b) Trillion British thermal units. |
||||||||||||||||
(c) Reflects 100% of DCP Midstream volumes. |
||||||||||||||||
(d) Million British thermal units. Average price based on NYMEX Henry Hub. |
||||||||||||||||
(e) Does not reflect results of commodity hedges. |
||||||||||||||||
(f) Average price based on NYMEX calendar month. |
Spectra Energy Corp | |||||||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
(In millions) | |||||||||||||||||||
Reported - These results include the impact of special items | |||||||||||||||||||
Three Months |
Nine Months | ||||||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||||||
Operating Revenues |
$ |
1,075 |
$ |
1,103 |
$ |
3,618 |
$ |
3,918 |
|||||||||||
Operating Expenses |
754 |
714 |
2,432 |
2,582 |
|||||||||||||||
Operating Income |
321 |
389 |
1,186 |
1,336 |
|||||||||||||||
Other Income and Expenses |
103 |
79 |
223 |
(44) |
|||||||||||||||
Interest Expense |
133 |
155 |
437 |
480 |
|||||||||||||||
Earnings Before Income Taxes |
291 |
313 |
972 |
812 |
|||||||||||||||
Income Tax Expense |
10 |
70 |
160 |
164 |
|||||||||||||||
Net Income |
281 |
243 |
812 |
648 |
|||||||||||||||
Net Income - Noncontrolling Interests |
86 |
69 |
234 |
189 |
|||||||||||||||
Net Income - Controlling Interests |
$ |
195 |
$ |
174 |
$ |
578 |
$ |
459 |
Spectra Energy Corp | |||||||||||
Condensed Consolidated Balance Sheets | |||||||||||
(Unaudited) | |||||||||||
(In millions) | |||||||||||
September 30, |
December 31, | ||||||||||
2016 |
2015 | ||||||||||
ASSETS |
|||||||||||
Current Assets |
$ |
1,750 |
$ |
1,648 |
|||||||
Investments and Other Assets |
7,346 |
7,056 |
|||||||||
Net Property, Plant and Equipment |
25,337 |
22,918 |
|||||||||
Regulatory Assets and Deferred Debits |
1,504 |
1,301 |
|||||||||
Total Assets |
$ |
35,937 |
$ |
32,923 |
|||||||
LIABILITIES AND EQUITY |
|||||||||||
Current Liabilities |
$ |
3,687 |
$ |
3,392 |
|||||||
Long-term Debt |
13,094 |
12,892 |
|||||||||
Deferred Credits and Other Liabilities |
7,175 |
6,768 |
|||||||||
Preferred Stock of Subsidiaries |
562 |
339 |
|||||||||
Equity |
11,419 |
9,532 |
|||||||||
Total Liabilities and Equity |
$ |
35,937 |
$ |
32,923 |
Spectra Energy Corp | ||||||||||||||||
Distributable Cash Flow | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In millions) | ||||||||||||||||
Reported - These results include the impact of special items | ||||||||||||||||
Three Months Ended |
Nine Months Ended | |||||||||||||||
2016 |
2015 |
2016 |
2015 | |||||||||||||
Net Income |
$ |
281 |
$ |
243 |
$ |
812 |
$ |
648 |
||||||||
Add: |
||||||||||||||||
Interest expense |
133 |
155 |
437 |
480 |
||||||||||||
Income tax expense |
10 |
70 |
160 |
164 |
||||||||||||
Depreciation and amortization |
193 |
188 |
582 |
574 |
||||||||||||
Foreign currency loss |
— |
4 |
— |
7 |
||||||||||||
Less: |
||||||||||||||||
Third party interest income |
1 |
— |
3 |
2 |
||||||||||||
EBITDA |
616 |
660 |
1,988 |
1,871 |
||||||||||||
Add: |
||||||||||||||||
Earnings from equity investments |
(54) |
(51) |
(110) |
(80) |
||||||||||||
Non-cash impairments at DCP |
3 |
3 |
10 |
197 |
||||||||||||
Distributions from equity investments |
36 |
59 |
133 |
183 |
||||||||||||
Empress non-cash items |
(2) |
(3) |
42 |
24 |
||||||||||||
Non-cash impairment at Ozark Gas Gathering |
— |
— |
— |
9 |
||||||||||||
Other |
30 |
7 |
51 |
30 |
||||||||||||
Less: |
||||||||||||||||
Interest expense |
133 |
155 |
437 |
480 |
||||||||||||
Equity AFUDC |
52 |
33 |
116 |
73 |
||||||||||||
Net cash paid (refund) for income taxes |
7 |
8 |
(3) |
(20) |
||||||||||||
Distributions to non-controlling interests |
62 |
47 |
176 |
140 |
||||||||||||
Maintenance capital expenditures |
173 |
209 |
417 |
481 |
||||||||||||
Total Distributable Cash Flow |
$ |
202 |
$ |
223 |
$ |
971 |
$ |
1,080 |
||||||||
Spectra Energy Corp | ||||||||||||||||
Reported to Ongoing Earnings Reconciliation | ||||||||||||||||
September 2016 Quarter-to-Date | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In millions, except per-share amounts) | ||||||||||||||||
Reported |
Less: |
Ongoing | ||||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND DEPRECIATION AND AMORTIZATION |
||||||||||||||||
Spectra Energy Partners |
$ |
464 |
$ |
(38) |
A |
$ |
502 |
|||||||||
Distribution |
77 |
— |
77 |
|||||||||||||
Western Canada Transmission & Processing |
93 |
(16) |
B |
109 |
||||||||||||
Field Services |
12 |
(3) |
C |
15 |
||||||||||||
Total Reportable Segment EBITDA |
646 |
(57) |
703 |
|||||||||||||
Other |
(30) |
(19) |
D |
(11) |
||||||||||||
Total Reportable Segment and Other EBITDA |
$ |
616 |
$ |
(76) |
$ |
692 |
||||||||||
EARNINGS |
||||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
616 |
$ |
(76) |
$ |
692 |
||||||||||
Depreciation and Amortization |
(193) |
— |
(193) |
|||||||||||||
Interest Expense |
(133) |
— |
(133) |
|||||||||||||
Interest Income and Other |
1 |
— |
1 |
|||||||||||||
Income Tax Benefit (Expense) |
(10) |
41 |
(51) |
|||||||||||||
Total Net Income |
281 |
(35) |
316 |
|||||||||||||
Total Net Income - Noncontrolling Interests |
(86) |
10 |
(96) |
|||||||||||||
Total Net Income - Controlling Interests |
$ |
195 |
$ |
(25) |
$ |
220 |
||||||||||
EARNINGS PER SHARE, BASIC |
$ |
0.28 |
$ |
(0.03) |
$ |
0.31 |
||||||||||
EARNINGS PER SHARE, DILUTED |
$ |
0.28 |
$ |
(0.03) |
$ |
0.31 |
||||||||||
A - Inspection and repair costs related to Texas Eastern pipeline incident in Pennsylvania. | ||||||||||||||||
B - Employee and overhead reduction costs, and the effects of flooding in British Columbia. | ||||||||||||||||
C - Non-cash asset impairment and write-offs, employee and overhead reduction costs, partially offset by gain on sale of an asset. | ||||||||||||||||
D - Transaction costs. | ||||||||||||||||
Weighted Average Shares - in millions |
||||||||||||||||
Basic |
701 |
|||||||||||||||
Diluted |
703 |
Spectra Energy Corp | ||||||||||||||||
Reported to Ongoing Earnings Reconciliation | ||||||||||||||||
September 2015 Quarter-to-Date | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In millions, except per-share amounts) | ||||||||||||||||
Reported |
Less: |
Ongoing | ||||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND DEPRECIATION AND AMORTIZATION |
||||||||||||||||
Spectra Energy Partners |
$ |
488 |
$ |
— |
$ |
488 |
||||||||||
Distribution |
70 |
— |
70 |
|||||||||||||
Western Canada Transmission & Processing |
117 |
— |
117 |
|||||||||||||
Field Services |
(3) |
26 |
A |
(29) |
||||||||||||
Total Reportable Segment EBITDA |
672 |
26 |
646 |
|||||||||||||
Other |
(12) |
— |
(12) |
|||||||||||||
Total Reportable Segment and Other EBITDA |
$ |
660 |
$ |
26 |
$ |
634 |
||||||||||
EARNINGS |
||||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
660 |
$ |
26 |
$ |
634 |
||||||||||
Depreciation and Amortization |
(188) |
— |
(188) |
|||||||||||||
Interest Expense |
(155) |
— |
(155) |
|||||||||||||
Interest Income and Other |
(4) |
— |
(4) |
|||||||||||||
Income Tax Expense |
(70) |
(8) |
(62) |
|||||||||||||
Total Net Income |
243 |
18 |
225 |
|||||||||||||
Total Net Income - Noncontrolling Interests |
(69) |
— |
(69) |
|||||||||||||
Total Net Income - Controlling Interests |
$ |
174 |
$ |
18 |
$ |
156 |
||||||||||
EARNINGS PER SHARE, BASIC |
$ |
0.26 |
$ |
0.03 |
$ |
0.23 |
||||||||||
EARNINGS PER SHARE, DILUTED |
$ |
0.26 |
$ |
0.03 |
$ |
0.23 |
||||||||||
A - Employee and overhead reduction costs, gain on sale of an asset and non-cash goodwill impairment. | ||||||||||||||||
Weighted Average Shares - in millions |
||||||||||||||||
Basic |
671 |
|||||||||||||||
Diluted |
672 |
Spectra Energy Corp | ||||||||||||||||||||||||
Reported to Ongoing Distributable Cash Flow Reconciliation | ||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Three Months Ended |
Three Months Ended | |||||||||||||||||||||||
Reported |
Less: |
Ongoing |
Reported |
Less: |
Ongoing | |||||||||||||||||||
Net Income |
$ |
281 |
$ |
(35) |
$ |
316 |
$ |
243 |
$ |
18 |
$ |
225 |
||||||||||||
Add: |
||||||||||||||||||||||||
Interest expense |
133 |
— |
133 |
155 |
— |
155 |
||||||||||||||||||
Income tax expense (benefit) |
10 |
(41) |
51 |
70 |
8 |
62 |
||||||||||||||||||
Depreciation and amortization |
193 |
— |
193 |
188 |
— |
188 |
||||||||||||||||||
Foreign currency loss |
— |
— |
— |
4 |
— |
4 |
||||||||||||||||||
Less: |
||||||||||||||||||||||||
Third party interest income |
1 |
— |
1 |
— |
— |
— |
||||||||||||||||||
EBITDA |
616 |
(76) |
692 |
660 |
26 |
634 |
||||||||||||||||||
Add: |
||||||||||||||||||||||||
Earnings from equity investments |
(54) |
— |
(54) |
(51) |
(29) |
(22) |
||||||||||||||||||
Non-cash impairment at DCP |
3 |
3 |
— |
3 |
3 |
— |
||||||||||||||||||
Distributions from equity investments |
36 |
— |
36 |
59 |
— |
59 |
||||||||||||||||||
Empress non-cash items |
(2) |
— |
(2) |
(3) |
— |
(3) |
||||||||||||||||||
Other |
30 |
— |
30 |
7 |
— |
7 |
||||||||||||||||||
Less: |
||||||||||||||||||||||||
Interest expense |
133 |
— |
133 |
155 |
— |
155 |
||||||||||||||||||
Equity AFUDC |
52 |
— |
52 |
33 |
— |
33 |
||||||||||||||||||
Net cash paid for income taxes |
7 |
— |
7 |
8 |
— |
8 |
||||||||||||||||||
Distributions to non-controlling interests |
62 |
— |
62 |
47 |
— |
47 |
||||||||||||||||||
Maintenance capital expenditures |
173 |
5 |
168 |
209 |
— |
209 |
||||||||||||||||||
Total Distributable Cash Flow |
$ |
202 |
$ |
(78) |
$ |
280 |
$ |
223 |
$ |
— |
$ |
223 |
||||||||||||
Spectra Energy Corp |
||
Distributable Cash Flow |
||
(In millions) |
||
2016e | ||
Total Reported Net Income |
$ 1,150 | |
Add: |
||
Interest expense |
625 | |
Income tax expense |
315 | |
Depreciation and amortization |
765 | |
EBITDA |
2,855 | |
Add: |
||
Net cash from equity investments |
85 | |
Other |
85 | |
Less: |
||
Interest expense |
625 | |
Equity AFUDC |
145 | |
Cash paid for income taxes |
15 | |
Distributions to non-controlling interests |
255 | |
Maintenance capital expenditures |
615 | |
Total Consolidated Distributable Cash Flow |
$ 1,370 | |
Coverage Ratio |
1.2x | |
Logo - http://photos.prnewswire.com/prnh/20061030/CLM051LOGO
SOURCE Spectra Energy Corp
HOUSTON, Nov. 2, 2016 /PRNewswire/ -- Spectra Energy Partners, LP (NYSE: SEP) announced that the board of directors of its general partner declared a quarterly cash distribution to unitholders of $0.67625 per unit, an increase of 1.25 cents over the previous level of $0.66375 per unit. This is the 36th consecutive quarter that Spectra Energy Partners has increased its quarterly cash distribution. The cash distribution is payable on November 29, 2016, to unitholders of record at the close of business on November 14, 2016. This quarterly cash distribution equates to $2.705 per unit on an annual basis.
This information is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Under rules applicable to publicly-traded partnerships, our distributions to non-U.S. unitholders are subject to withholding tax at the highest effective applicable rate to the extent attributable to income that is effectively connected with the conduct of a U.S. trade or business. Given the uncertainty at the time of making distributions regarding the amount of any distribution that is attributable to income that is so effectively connected, we intend to treat all of our distributions as attributable to our U.S. operations, and as a result, the entire distribution will be subject to withholding.
Spectra Energy Partners, LP (NYSE: SEP) is a Houston-based master limited partnership, formed by Spectra Energy Corp (NYSE: SE). SEP is one of the largest pipeline MLPs in the United States and connects growing supply areas to high-demand markets for natural gas and crude oil. These assets include more than 15,000 miles of transmission and gathering pipelines, approximately 170 billion cubic feet of natural gas storage, and approximately 4.8 million barrels of crude oil storage.
Logo - http://photos.prnewswire.com/prnh/20071107/CLW064
SOURCE Spectra Energy Partners, LP
HOUSTON, Oct. 19, 2016 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) has declared a quarterly cash dividend on its common stock of $0.405 per share, or $1.62 per share on an annualized basis. The dividend is payable on December 6, 2016, to shareholders of record at the close of business on November 11, 2016.
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include approximately 21,000 miles of natural gas and crude oil pipelines; approximately 300 billion cubic feet of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com.
Logo - http://photos.prnewswire.com/prnh/20061030/CLM051LOGO
SOURCE Spectra Energy Corp
HOUSTON, Oct. 5, 2016 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) and Spectra Energy Partners (NYSE: SEP) will announce their third quarter 2016 earnings results before the market opens on Wednesday, November 2, 2016, and will hold a joint investor and analyst conference call at 8 a.m. CT that same day.
The webcast will be available via the Spectra Energy and Spectra Energy Partners Investors pages. The conference call can be accessed by dialing (888) 252-3715 in the U.S. or Canada, or (706) 634-8942 internationally. The conference ID is 70917863 or "Spectra Energy / Spectra Energy Partners Earnings Call."
A replay of the call will be available until 5 p.m. CT on Friday, December 2, 2016, by dialing (800) 585-8367 in the U.S. or Canada, or (404) 537-3406 internationally, and using the above conference ID. A replay and transcript also will be available via the Spectra Energy and Spectra Energy Partners Investors pages.
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include approximately 21,000 miles of natural gas and crude oil pipelines; approximately 300 billion cubic feet of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com.
Logo - http://photos.prnewswire.com/prnh/20061030/CLM051LOGO
Logo - http://photos.prnewswire.com/prnh/20071107/CLW064
SOURCE Spectra Energy Corp; Spectra Energy Partners, LP
Transaction creates increased scale, asset diversity, financial flexibility and an industry leading secured project portfolio and development project inventory
Highlights:
CALGARY, Alberta and HOUSTON, Texas, Sept. 6, 2016 /PRNewswire/ -- Enbridge Inc. (TSX, NYSE:ENB) (Enbridge) and Spectra Energy Corp (NYSE:SE) (Spectra Energy) today announced that they have entered into a definitive merger agreement under which Enbridge and Spectra Energy will combine in a stock-for-stock merger transaction (the "Transaction"), which values Spectra Energy common stock at approximately C$37 billion (US$28 billion), based on the closing price of Enbridge's common shares on September 2, 2016. The combination will create the largest energy infrastructure company in North America and one of the largest globally based on a pro-forma enterprise value of approximately C$165 billion (US$127 billion). The Transaction was unanimously approved by the Boards of Directors of both companies and is expected to close in the first quarter of 2017, subject to shareholder and certain regulatory approvals, and other customary conditions.
Under the terms of the Transaction, Spectra Energy shareholders will receive 0.984 shares of the combined company for each share of Spectra Energy common stock they own. The consideration to be received by Spectra Energy shareholders is valued at US$40.33 per Spectra Energy share, based on the closing price of Enbridge common shares on September 2, 2016, representing an approximate 11.5 percent premium to the closing price of Spectra Energy common stock on September 2, 2016. Upon completion of the Transaction, Enbridge shareholders are expected to own approximately 57 percent of the combined company and Spectra Energy shareholders are expected to own approximately 43 percent. The combined company will be called Enbridge Inc.
This combination brings together two highly complementary platforms to create North America's largest energy infrastructure company and meaningfully enhances customer optionality. With an asset base that includes a diverse set of best-in-class assets comprised of crude oil, liquids and natural gas pipelines, terminal and midstream operations, a regulated utility portfolio and renewable power generation, the combined company will be positioned to provide integrated services and first and last mile connectivity to key supply basins and demand markets. On a combined basis for the 12 months ended June 30, 2016, the company would have generated combined revenues in excess of C$40 billion (US$31 billion) and combined Earnings before Interest and Taxes (EBIT) of C$5.8 billion (US$4.4 billion), and will have the scale, balance sheet strength, financial flexibility and free cash flow to comfortably fund future growth.
"Over the last two years, we've been focused on identifying opportunities that would extend and diversify our asset base and sources of growth beyond 2019," said Al Monaco, President and Chief Executive Officer, Enbridge Inc. "We are accomplishing that goal by combining with the premier natural gas infrastructure company to create a true North American and global energy infrastructure leader. This Transaction is transformational for both companies and results in unmatched scale, diversity and financial flexibility with multiple platforms for organic growth."
Greg Ebel, President and Chief Executive Officer of Spectra Energy, who will become chairman of Enbridge following the closing of the Transaction, said, "The combination of Enbridge and Spectra Energy creates what we believe will be the best, most diversified energy infrastructure company in North America, if not the world. This is an incredible opportunity for both companies and we at Spectra Energy could not be more excited about what it means going forward. Together, the merged company will have what we believe is the finest platform for serving customers in every region of North America and providing investors with the opportunity for superior shareholder returns."
Mr. Monaco added, "Bringing Enbridge and Spectra Energy together makes strong strategic and financial sense, and the all-stock nature of the Transaction provides shareholders of both companies with the opportunity to participate in the significant upside potential of the combined company. With combined secured projects in execution of C$26 billion (US$20 billion) and another C$48 billion (US$37 billion) of projects under development, the Transaction allows us to extend our anticipated 10-12 percent annual dividend growth through 2024. We believe our combination of best-in-class assets, superior growth and strong commercial underpinning of our business will be unrivaled in our sector. Importantly, we will preserve and enhance our shareholder value proposition, which centers on delivering consistent growth with a low-risk business model.
"This is also a combination of two companies, management and staff that have a shared vision and talented teams that are dedicated to serving customers and providing the energy that people want and need, safely and reliably every day. We look forward to welcoming Spectra Energy employees to Enbridge as we move forward as one company. In building on our existing strengths by joining with Spectra Energy, Enbridge will be very well positioned for future growth and continued value creation."
Mr. Ebel added, "The strength of the combined company will support a large capital program to fund the continued development of Spectra Energy's existing, preeminent project inventory in addition to allowing the combined company to compete for and win the most attractive new growth projects - all while maintaining expected strong dividend growth with exceptional coverage. The transaction premium recognizes the strength of Spectra Energy's world-class natural gas pipeline system and significant expansion program, while providing shareholders the opportunity to participate in the unparalleled value creation potential of the combined company. While our assets are largely complementary, our values are shared, and together we will create a best-in-class company for shareholders, employees, customers, and communities alike."
Compelling Value Proposition
Leadership, Governance and Structure
Upon closing of the Transaction, Al Monaco will continue to serve as President and Chief Executive Officer of the combined company. Greg Ebel will serve as non-executive Chairman of Enbridge's Board of Directors.
Enbridge's Board of Directors is expected to have a total of 13 directors consisting of 8 members designated by Enbridge, including Mr. Monaco, and 5 members designated by Spectra Energy, including Mr. Ebel.
The senior management team of the combined entity will be communicated in due course. On closing, the following appointments will take effect:
Guy Jarvis, President, Liquids Pipelines & Major Projects
Bill Yardley, President, Gas Transmission & Midstream
John Whelen, Executive Vice President & Chief Financial Officer
The headquarters of the combined company will be in Calgary, Alberta. Houston, Texas will be the combined company's gas pipelines business unit center; Edmonton, Alberta will remain the business unit center for liquids pipelines, with gas distribution continuing to be based in Ontario.
Enbridge and Spectra Energy will immediately establish an integration planning team composed of leaders from both management teams to prepare for and oversee the effective and timely integration of the businesses. The approach to integration planning will be collaborative, drawing on strong participation from both companies, and ensuring continuity for customers and other stakeholders.
On closing the Enbridge common shares to be issued in connection with the Transaction will be listed on the TSX and NYSE. Spectra Energy common stock will be delisted from the NYSE.
Financial Considerations
Enbridge expects the Transaction to be neutral to its 12 percent to 14 percent secured ACFFO per share CAGR guidance through the 2014-2019 time period, and strongly additive to its growth beyond that timeframe. Enbridge is committed to maintaining the financial strength of the combined company. The funding program is designed to ensure strengthening of the balance sheet with the objective of maintaining strong investment grade credit ratings. Enbridge expects it will divest of approximately $2 billion of non-core assets over the next 12 months to provide additional financial flexibility.
At closing, Enbridge Energy Partners, LP and Spectra Energy Partners, LP are expected to continue to be publicly traded partnerships headquartered in Houston, Texas. Enbridge Income Fund Holdings will remain a publicly traded corporation headquartered in Calgary, Alberta.
Timing and Approvals
The Transaction is expected to close in the first quarter of 2017 subject to the receipt of both companies' shareholder approvals, along with certain regulatory and government approvals, including compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and approval under Canada Competition Act, and the satisfaction of other customary closing conditions.
Advisors
Credit Suisse Securities (Canada), Inc. acted as Lead Financial Advisor and delivered an opinion to Enbridge's Board of Directors. RBC Capital Markets also acted as financial advisor to Enbridge and delivered an opinion to Enbridge's Board of Directors. Sullivan & Cromwell LLP and McCarthy Tétrault LLP were legal advisors to Enbridge.
BMO Capital Markets and Citi acted as Joint Lead Financial Advisors to Spectra Energy's Board of Directors. Wachtell, Lipton, Rosen & Katz and Goodmans LLP acted as legal advisors to Spectra Energy and Skadden, Arps, Slate, Meagher & Flom LLP acted as tax counsel.
CONFERENCE CALL DETAILS
Enbridge and Spectra Energy will hold a joint conference call on September 6, 2016 at 8:00 a.m. Eastern Time (6:00 a.m. Mountain Time) to discuss the Transaction.
The conference call will begin with presentations by Enbridge's President and Chief Executive Officer and Spectra Energy's Chairman, President and Chief Executive Officer, followed by a question and answer period for investment analysts.
Analysts, members of the media and other interested parties can access the call toll-free at 1-866-610-1072 or within and outside North America at 1-973-935-2840 using the access code of 77468882. The call will be audio webcast live at http://event.on24.com/r.htm?e=1261390&s=1&k=27BFA58D1E6D82F42F35E52AF74D0395. A webcast replay and podcast will be available approximately two hours after the conclusion of the event and a transcript will be posted to the website within 24 hours. The replay will be available at toll-free 1-800-585-8367 or within and outside North America at 1-404-537-3406 (access code 77468882) for seven days after the call.
ABOUT ENBRIDGE INC.
Enbridge Inc., a Canadian company, exists to fuel people's quality of life, and has done so for more than 65 years. A North American leader in delivering energy, Enbridge has been ranked on the Global 100 Most Sustainable Corporations index for the past seven years. Enbridge operates the world's longest crude oil and liquids transportation system across Canada and the U.S., and has a significant and growing involvement in natural gas gathering, transmission and midstream business, as well as an increasing involvement in power transmission. Enbridge owns and operates Canada's largest natural gas distribution company, serving residential, commercial, and industrial customers in Ontario, Quebec, New Brunswick and New York State. Enbridge has interests in nearly 2,000 megawatts of net renewable and alternative generating capacity, and continues to expand into wind, solar and geothermal power. Enbridge employs nearly 11,000 people, primarily in Canada and the U.S., and is ranked as one of Canada's Top Employers for 2016.
Enbridge's common shares trade on the Toronto and New York stock exchanges under the symbol ENB. For more information, visit www.enbridge.com.
ABOUT SPECTRA ENERGY CORP
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include approximately 21,000 miles of natural gas and crude oil pipelines; approximately 300 billion cubic feet of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com.
FORWARD-LOOKING INFORMATION
This presentation includes certain forward looking statements and information (FLI) to provide Enbridge and Spectra Energy shareholders and potential investors with information about Enbridge, Spectra Energy and their respective subsidiaries and affiliates, including each company's management's respective assessment of Enbridge, Spectra Energy and their respective subsidiaries' future plans and operations, which FLI may not be appropriate for other purposes. FLI is typically identified by words such as "anticipate", "expect", "project", "estimate", "forecast", "plan", "intend", "target", "believe", "likely" and similar words suggesting future outcomes or statements regarding an outlook. All statements other than statements of historical fact may be FLI. In particular, this news release contains FLI pertaining to, but not limited to, information with respect to the following: the Transaction; the combined company's scale, financial flexibility and growth program; future business prospects and performance; annual cost, revenue and financing benefits; the expected ACFFO per share growth; future shareholder returns; annual dividend growth and anticipated dividend increases; payout of distributable cash flow; financial strength and ability to fund capital program and compete for growth projects; run-rate and tax synergies; potential asset dispositions; leadership and governance structure; and head office and business center locations.
Although we believe that the FLI is reasonable based on the information available today and processes used to prepare it, such statements are not guarantees of future performance and you are cautioned against placing undue reliance on FLI. By its nature, FLI involves a variety of assumptions, which are based upon factors that may be difficult to predict and that may involve known and unknown risks and uncertainties and other factors which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by these FLI, including, but not limited to, the following: the timing and completion of the Transaction, including receipt of regulatory and shareholder approvals and the satisfaction of other conditions precedent; interloper risk; the realization of anticipated benefits and synergies of the Transaction and the timing thereof; the success of integration plans; the focus of management time and attention on the Transaction and other disruptions arising from the Transaction; expected future ACFFO; estimated future dividends; financial strength and flexibility; debt and equity market conditions, including the ability to access capital markets on favourable terms or at all; cost of debt and equity capital; potential changes in the Enbridge share price which may negatively impact the value of consideration offered to Spectra Energy shareholders; expected supply and demand for crude oil, natural gas, natural gas liquids and renewable energy; prices of crude oil, natural gas, natural gas liquids and renewable energy; economic and competitive conditions; expected exchange rates; inflation; interest rates; tax rates and changes; completion of growth projects; anticipated in-service dates; capital project funding; success of hedging activities; the ability of management of Enbridge, its subsidiaries and affiliates to execute key priorities, including those in connection with the Transaction; availability and price of labour and construction materials; operational performance and reliability; customer, shareholder, regulatory and other stakeholder approvals and support; regulatory and legislative decisions and actions; public opinion; and weather. We caution that the foregoing list of factors is not exhaustive. Additional information about these and other assumptions, risks and uncertainties can be found in applicable filings with Canadian and U.S. securities regulators, including any proxy statement, prospectus or registration statement to be filed in connection with the Transaction. Due to the interdependencies and correlation of these factors, as well as other factors, the impact of any one assumption, risk or uncertainty on FLI cannot be determined with certainty.
Except to the extent required by law, we assume no obligation to publicly update or revise any FLI, whether as a result of new information, future events or otherwise. All FLI in this news release is expressly qualified in its entirety by these cautionary statements.
NON-GAAP MEASURES
This news release makes reference to non-GAAP measures, including ACFFO and ACFFO per share. ACFFO is defined as cash flow provided by operating activities before changes in operating assets and liabilities (including changes in environmental liabilities) less distributions to non-controlling interests and redeemable non-controlling interests, preference share dividends and maintenance capital expenditures, and further adjusted for unusual, non-recurring or non-operating factors. Management of Enbridge believes the presentation of these measures gives useful information to investors and shareholders as they provide increased transparency and insight into the performance of Enbridge. Management of Enbridge uses ACFFO to assess performance and to set its dividend payout target. These measures are not measures that have a standardized meaning prescribed by generally accepted accounting principles in the United States of America (U.S. GAAP) and may not be comparable with similar measures presented by other issuers. Additional information on Enbridge's use of non-GAAP measures can be found in Enbridge's Management's Discussion and Analysis (MD&A) available on Enbridge's website and www.sedar.com.
ADDITIONAL INFORMATION ABOUT THE TRANSACTION AND WHERE TO FIND IT
Enbridge will file with the U.S. Securities and Exchange Commission (SEC) a registration statement on Form F-4, which will include a proxy statement of Spectra Energy that also constitutes a prospectus of Enbridge, and any other documents in connection with the Transaction. The definitive proxy statement/prospectus will be sent to the shareholders of Spectra Energy. INVESTORS AND SHAREHOLDERS OF SPECTRA ENERGY ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS, AND ANY OTHER DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE TRANSACTION WHEN THEY BECOME AVAILABLE, AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT ENBRIDGE, SPECTRA ENERGY, THE TRANSACTION AND RELATED MATTERS. The registration statement and proxy statement/prospectus and other documents filed by Enbridge and Spectra Energy with the SEC, when filed, will be available free of charge at the SEC's website at www.sec.gov. In addition, investors and shareholders will be able to obtain free copies of the proxy statement/prospectus and other documents which will be filed with the SEC by Enbridge on Enbridge's website at www.Enbridge.com or upon written request to Enbridge's Investor Relations department, 200, 425 First St. SW, Calgary, AB T2P 3L8 or by calling 800.481.2804 within North America and 403.231.5957 from outside North America, and will be able to obtain free copies of the proxy statement/prospectus and other documents filed with the SEC by Spectra Energy upon written request to Spectra Energy, Investor Relations, 5400 Westheimer Ct. Houston, TX 77056 or by calling 713.627.4610. You may also read and copy any reports, statements and other information filed by Spectra Energy and Enbridge with the SEC at the SEC public reference room at 100 F Street N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at 800.732.0330 or visit the SEC's website for further information on its public reference room. This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to appropriate registration or qualification under the securities laws of such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
PARTICIPANTS IN THE SOLICITATION OF PROXIES
This communication is not a solicitation of proxies in connection with the Transaction. However, Enbridge, Spectra Energy, certain of their respective directors and executive officers and certain other members of management and employees, under SEC rules, may be deemed to be participants in the solicitation of proxies in connection with the Transaction. Information about Enbridge's directors and executive officers may be found in its Management Information Circular dated March 8, 2016 available on its website at www.Enbridge.com and at www.sedar.com. Information about Spectra Energy's directors, executive officers and other members of management and employees may be found in its 2015 Annual Report on Form 10-K filed with the SEC on February 25, 2016, and definitive proxy statement relating to its 2016 Annual Meeting of Shareholders filed with the SEC on March 16, 2016. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the interests of such potential participants in the solicitation of proxies in connection with the Transaction will be included in the proxy statement/prospectus and other relevant materials filed with the SEC when they become available.
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SOURCE Spectra Energy Corp; Enbridge Inc.
HOUSTON, Aug. 9, 2016 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) Chief Financial Officer Pat Reddy will speak at the 2016 Goldman Sachs Power, Utilities, MLP and Pipeline Conference on Thursday, August 11, 2016. Reddy also serves as chief financial officer of Spectra Energy Partners (NYSE: SEP).
The panel is scheduled to begin at 9:45 a.m. ET and will be available via webcast. The panel and webcast link can be accessed via the Investors sections of www.spectraenergy.com. A replay of the webcast will be available for up to one month following the event.
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include approximately 21,000 miles of natural gas and crude oil pipelines; approximately 300 billion cubic feet of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com.
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SOURCE Spectra Energy Corp; Spectra Energy Partners, LP
HOUSTON, Aug. 4, 2016 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) today announced that its indirect subsidiary, Westcoast Energy Inc., has completed the previously announced sale of its ownership interests in Spectra Energy's Canadian natural gas liquids (NGL) business to Plains Midstream Canada ULC, for a cash purchase price of approximately C$267 million (USD $204 million), including approximately C$67 million (USD $51 million) for inventory and working capital.
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include approximately 21,000 miles of natural gas and crude oil pipelines; approximately 300 billion cubic feet of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com.
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SOURCE Spectra Energy Corp
HOUSTON, Aug. 3, 2016 /PRNewswire/ -- Spectra Energy Partners, LP (NYSE: SEP) today reported net income of $305 million, including net income from controlling interests of $287 million, for the second quarter ended June 30, 2016, with diluted earnings per limited partner unit of $0.71. The second quarter included a non-recurring special item of $6 million, which decreased diluted earnings per limited partner unit by $0.02.
Second Quarter Highlights:
Second quarter 2016 ongoing distributable cash flow was $281 million, compared with $321 million in the prior-year quarter. Distributions per limited partner unit for second quarter 2016 were $0.66375, compared with $0.61375 per limited partner unit in second quarter 2015.
For the quarter, ongoing earnings before interest, taxes, depreciation and amortization (EBITDA) were $448 million, compared with $456 million in the prior-year quarter.
Ongoing net income from controlling interests was $293 million for the quarter, or $0.73 diluted earnings per limited partner unit, compared with $307 million, or $0.83 diluted earnings per limited partner unit, in the prior-year quarter. Net income from controlling interests was $287 million for the quarter, or $0.71 diluted earnings per limited partner unit, compared with $307 million, or $0.83 diluted earnings per limited partner unit, in the prior-year quarter.
CEO COMMENT
"Spectra Energy Partners once again demonstrated strong ongoing earnings and cash generation thanks to our solid, fee-based business model – one which has no direct commodity exposure and little volume exposure. Our robust expansion program continued to progress as expected with projects remaining on track for their respective in-service dates," said Greg Ebel, chief executive officer, Spectra Energy Partners. "We have increased our liquidity, enhanced our balance sheet and taken advantage of our access to attractive financing options in order to advance our continued growth."
"We also announced our 35th consecutive quarterly cash distribution increase today, confirming the plans we shared with investors at the start of the year and our portfolio strength and cash flow reliability," continued Ebel.
SEGMENT RESULTS
U.S. Transmission
Ongoing EBITDA from U.S. Transmission was $412 million in second quarter 2016, compared with $396 million in second quarter 2015. These results exclude a special item of $6 million in expense related to the Texas Eastern pipeline incident in Pennsylvania in second quarter 2016 and reflect increased earnings from expansion projects. These results were partially offset by a positive property tax adjustment in second quarter 2015.
Liquids
Liquids' second quarter 2016 EBITDA was $58 million, compared with $78 million in second quarter 2015. The decrease is due almost entirely to the absence of equity earnings from Sand Hills and Southern Hills natural gas liquids (NGL) pipelines, which Spectra Energy Partners owned until October 2015.
Other
"Other" net expenses were $22 million in second quarter 2016, compared with $18 million in second quarter 2015.
Interest Expense
Interest expense was $56 million in second quarter 2016, compared with $63 million in second quarter 2015, reflecting higher capitalized interest.
Liquidity and Capital Expenditures
Total debt outstanding at Spectra Energy Partners as of June 30, 2016, was $6.6 billion, with available liquidity of $2.0 billion. Including contributions from noncontrolling interests, Spectra Energy Partners has $1.8 billion of capital expansion spending planned in 2016, which will be funded through a combination of debt and equity.
Including contributions from noncontrolling interests of $81 million, total capital spending in second quarter 2016 was $559 million, consisting of $486 million of growth capital expenditures and $73 million of maintenance capital expenditures.
Through its "At the Market" (ATM) equity issuance program, Spectra Energy Partners has received net proceeds of $358 million this year.
In addition, in April 2016, Spectra Energy purchased 10.4 million newly issued common units and 0.2 million general partner units of Spectra Energy Partners for total net proceeds of $489 million.
EXPANSION PROJECT UPDATES
The Ozark Conversion project went into service on time and began flowing product in July. Spectra Energy Partners' other projects scheduled for 2016 in-service are on track to meet their timelines, including AIM, Loudon Expansion, Salem Lateral, and Express Enhancement.
Pre-construction work is currently under way on Sabal Trail, with full construction scheduled to begin in late summer, and in-service targeted for early summer 2017.
In July, the NEXUS and TEAL projects received a favorable FERC Draft Environmental Impact Statement (DEIS). The FERC Final Environmental Impact Statement is expected later this year, and the FERC Certificate is expected in first quarter 2017, keeping the projects on track to be in service in fourth quarter 2017.
Spectra Energy Partners also received the FERC Notice of Schedule for Access South, Adair Southwest, and the Lebanon Extension in July, and expects to receive the FERC Environmental Assessment soon, keeping these projects on target for in-service in the second half of 2017.
PennEast received its DEIS in July as well, and is expected to be in service in the second half of 2018.
Atlantic Bridge received its FERC Environmental Assessment in May and continues to move forward toward an in-service date in the second half of 2017.
The South Texas Expansion Project (STEP) in-service date has shifted to fourth quarter 2018 at the request of the customer, Comisión Federal de Electricidad (CFE), the Mexico state-owned power utility.
We continue to make progress on Access Northeast, and anticipate moving the project into execution later this year. Access Northeast is uniquely designed – both physically and contractually – to serve the needs of New England power generators, improve reliability, and save consumers an average of $1 billion per year in energy costs.
Spectra Energy continues working with co-developers Eversource and National Grid to advance state approvals for the customer agreements and is participating in the various processes currently under way:
The Access Northeast solution is designed to meet the needs of New England by maximizing the use of existing utility corridors and the Algonquin and Maritimes & Northeast pipelines, which directly connect to more than 60 percent of the existing ISO-New England gas-fired electric generation capacity and more than 80 percent of the new capacity that has recently cleared the ISO-New England forward capacity market. Access Northeast will cost-effectively deliver affordable natural gas when power generators need it, with new services to handle peak hours, seasonal needs, and quick starts to support intermittent wind and solar energy. In April, FERC issued the Notice of Intent to prepare an Environmental Impact Statement for Access Northeast, which continues to advance toward a late 2018 initial in-service date.
ADDITIONAL INFORMATION
Additional information about second quarter 2016 earnings can be obtained via the Spectra Energy website: www.spectraenergy.com.
The analyst call, held jointly with Spectra Energy, is scheduled for today, Wednesday, August 3, 2016, at 8 a.m. CT. The webcast will be available via the Spectra Energy and Spectra Energy Partners Investors pages. The conference call can be accessed by dialing (888) 252-3715 in the U.S. or Canada, or (706) 634-8942 internationally. The conference ID is 70917862 or "Spectra Energy / Spectra Energy Partners Earnings Call."
A replay of the call will be available until 5 p.m. CT on Friday, September 2, 2016, by dialing (800) 585-8367 in the U.S. or Canada, or (404) 537-3406 internationally, and using the above conference ID. A replay and transcript also will be available via the Spectra Energy and Spectra Energy Partners Investors pages.
Non-GAAP Financial Measures
We use ongoing net income from controlling interests as a measure to evaluate operations of the partnership. This measure is a non-GAAP financial measure as it represents net income from controlling interests, excluding special items. Special items represent certain charges and credits which we believe will not be recurring on a regular basis. We believe that the presentation of ongoing net income from controlling interests provides useful information to investors, as it allows investors to more accurately compare our ongoing performance across periods. The most directly comparable GAAP measure for ongoing net income from controlling interests is net income from controlling interests.
We use earnings from continuing operations before interest, income taxes, and depreciation and amortization (EBITDA) and ongoing EBITDA, non-GAAP financial measures, as performance measures for Spectra Energy Partners, LP. Ongoing EBITDA represents EBITDA, excluding special items. We believe that the presentation of EBITDA and ongoing EBITDA provides useful information to investors, as it allows investors to more accurately compare Spectra Energy Partners, LP's performance across periods. The most directly comparable GAAP measure for EBITDA and ongoing EBITDA for Spectra Energy Partners, LP is net income.
The primary performance measures used by us to evaluate segment performance are segment EBITDA and Other EBITDA. We consider segment EBITDA and Other EBITDA, which are the GAAP measures used to report segment results, to be good indicators of each segment's operating performance from its continuing operations as they represent the results of our segments' operations before depreciation and amortization without regard to financing methods or capital structures. Our segment EBITDA and Other EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate EBITDA in the same manner.
We also use ongoing segment EBITDA as a measure of performance. Ongoing segment EBITDA is a non-GAAP financial measure, as it represents reported segment EBITDA, excluding special items. We believe that the presentation of ongoing segment EBITDA provides useful information to investors, as it allows investors to more accurately compare a segment's ongoing performance across periods. The most directly comparable GAAP measure for ongoing segment EBITDA is segment EBITDA.
We also present Distributable Cash Flow (DCF), which is a non-GAAP financial measure. We believe that the presentation of DCF provides useful information to investors, as it represents the cash generation capabilities of the partnership to support distribution growth. We also use ongoing DCF, which is a non-GAAP financial measure, as it represents DCF, excluding the cash effect of special items. The most directly comparable GAAP measure for DCF and ongoing DCF is net income. We also use DCF coverage, which is a non-GAAP financial measure, as it represents DCF divided by distributions declared on partnership units. The most directly comparable GAAP measure for DCF coverage is Earnings-Per-Unit (EPU).
The non-GAAP financial measures presented in this press release should not be considered in isolation or as an alternative to financial measures presented in accordance with GAAP. These non-GAAP financial measures may not be comparable to similarly titled measures of other partnerships because other partnerships may not calculate these measures in the same manner.
Forward-Looking Statements
This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on our beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an effect on rate structure, and affect the speed at and degree to which competition enters the natural gas and oil industries; outcomes of litigation and regulatory investigations, proceedings or inquiries; weather and other natural phenomena, including the economic, operational and other effects of hurricanes and storms; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; general economic conditions, including the risk of a prolonged economic slowdown or decline, or the risk of delay in a recovery, which can affect the long-term demand for natural gas and oil and related services; potential effects arising from terrorist attacks and any consequential or other hostilities; changes in environmental, safety and other laws and regulations; the development of alternative energy resources; results and costs of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general market and economic conditions; increases in the cost of goods and services required to complete capital projects; declines in the market prices of equity and debt securities and resulting funding requirements for defined benefit pension plans; growth in opportunities, including the timing and success of efforts to develop U.S. and Canadian pipeline, storage, gathering, processing and other related infrastructure projects and the effects of competition; the performance of natural gas and oil transmission and storage, distribution, and gathering and processing facilities; the extent of success in connecting natural gas and oil supplies to gathering, processing and transmission systems and in connecting to expanding gas and oil markets; the effects of accounting pronouncements issued periodically by accounting standard-setting bodies; conditions of the capital markets during the periods covered by forward-looking statements; and the ability to successfully complete merger, acquisition or divestiture plans; regulatory or other limitations imposed as a result of a merger, acquisition or divestiture; and the success of the business following a merger, acquisition or divestiture. These factors, as well as additional factors that could affect our forward-looking statements, are described under the headings "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Information" in our 2015 Form 10-K, filed on February 25, 2016, and in our other filings made with the Securities and Exchange Commission (SEC), which are available via the SEC's website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. All forward-looking statements in this release are made as of the date hereof and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Spectra Energy Partners, LP (NYSE: SEP) is a Houston-based master limited partnership, formed by Spectra Energy Corp (NYSE: SE). SEP is one of the largest pipeline MLPs in the United States and connects growing supply areas to high-demand markets for natural gas and crude oil. These assets include more than 15,000 miles of transmission and gathering pipelines, approximately 170 billion cubic feet of natural gas storage, and approximately 4.8 million barrels of crude oil storage.
Spectra Energy Partners, LP | ||||||||||||||||
Quarterly Highlights | ||||||||||||||||
June 2016 | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In millions, except per-unit amounts) | ||||||||||||||||
Reported - These results include the impact of special items | ||||||||||||||||
Three Months Ended |
Six Months Ended | |||||||||||||||
June 30, |
June 30, | |||||||||||||||
2016 |
2015 |
2016 |
2015 | |||||||||||||
INCOME |
||||||||||||||||
Operating Revenues |
$ |
618 |
$ |
603 |
$ |
1,242 |
$ |
1,209 |
||||||||
Total Reportable Segment EBITDA |
464 |
474 |
931 |
927 |
||||||||||||
Net Income - Controlling Interests |
287 |
307 |
585 |
600 |
||||||||||||
EBITDA BY BUSINESS SEGMENT |
||||||||||||||||
U.S. Transmission |
$ |
406 |
$ |
396 |
$ |
817 |
$ |
785 |
||||||||
Liquids |
58 |
78 |
114 |
142 |
||||||||||||
Total Reportable Segment EBITDA |
464 |
474 |
931 |
927 |
||||||||||||
Other EBITDA |
(22) |
(18) |
(42) |
(35) |
||||||||||||
Total Reportable Segment and Other EBITDA |
$ |
442 |
$ |
456 |
$ |
889 |
$ |
892 |
||||||||
PARTNERS' CAPITAL |
||||||||||||||||
Declared Cash Distribution per Limited Partner Unit |
$ |
0.66375 |
$ |
0.61375 |
$ |
1.31500 |
$ |
1.21500 |
||||||||
Weighted Average Units Outstanding |
||||||||||||||||
Limited Partner Units |
298 |
296 |
292 |
296 |
||||||||||||
General Partner Units |
6 |
6 |
6 |
6 |
||||||||||||
DISTRIBUTABLE CASH FLOW |
||||||||||||||||
Distributable Cash Flow |
$ |
275 |
$ |
321 |
$ |
646 |
$ |
675 |
||||||||
CAPITAL AND INVESTMENT EXPENDITURES (a) |
||||||||||||||||
Capital expenditures - U.S. Transmission |
$ |
986 |
$ |
593 |
||||||||||||
Capital expenditures - Liquids |
37 |
11 |
||||||||||||||
Investment expenditures - Sand Hills/Southern Hills/SESH/Penn East/Nexus |
112 |
34 |
||||||||||||||
Total |
$ |
1,135 |
$ |
638 |
||||||||||||
U.S. TRANSMISSION |
||||||||||||||||
Operating Revenues |
$ |
529 |
$ |
509 |
$ |
1,067 |
$ |
1,031 |
||||||||
Operating Expenses |
||||||||||||||||
Operating, Maintenance and Other |
183 |
156 |
355 |
327 |
||||||||||||
Other Income and Expenses |
60 |
43 |
105 |
81 |
||||||||||||
EBITDA |
$ |
406 |
$ |
396 |
$ |
817 |
$ |
785 |
||||||||
LIQUIDS |
||||||||||||||||
Operating Revenues |
$ |
89 |
$ |
94 |
$ |
175 |
$ |
178 |
||||||||
Operating Expenses |
||||||||||||||||
Operating, Maintenance and Other |
31 |
34 |
62 |
68 |
||||||||||||
Other Income and Expenses |
— |
18 |
1 |
32 |
||||||||||||
EBITDA |
$ |
58 |
$ |
78 |
$ |
114 |
$ |
142 |
||||||||
Express Pipeline Revenue Receipts, MBbl/d (b) |
233 |
235 |
233 |
242 |
||||||||||||
Platte PADD II Deliveries, MBbl/d |
143 |
172 |
132 |
170 |
||||||||||||
Canadian Dollar Exchange Rate, Average |
1.29 |
1.23 |
1.33 |
1.23 |
||||||||||||
June 30, |
December 31, | |||||||||||||||
2016 |
2015 | |||||||||||||||
Debt |
$ |
6,576 |
$ |
6,604 |
||||||||||||
Actual Units Outstanding (c) |
309 |
291 |
||||||||||||||
(a) Excludes contributions received from noncontrolling interests of $176 million in 2016 and $58 million in 2015. | ||||||||||||||||
(b) Thousand barrels per day. | ||||||||||||||||
(c) Increase in 2016 resulted from the "At the Market" equity issuance program and equity issuance to Spectra Energy Corp in April 2016. |
Spectra Energy Partners, LP | |||||||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
(In millions) | |||||||||||||||||||
Reported - These results include the impact of special items | |||||||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||||||||
Operating Revenues |
$ |
618 |
$ |
603 |
$ |
1,242 |
$ |
1,209 |
|||||||||||
Operating Expenses |
313 |
281 |
613 |
576 |
|||||||||||||||
Operating Income |
305 |
322 |
629 |
633 |
|||||||||||||||
Other Income and Expenses |
61 |
62 |
108 |
111 |
|||||||||||||||
Interest Expense |
56 |
63 |
112 |
120 |
|||||||||||||||
Earnings Before Income Taxes |
310 |
321 |
625 |
624 |
|||||||||||||||
Income Tax Expense |
5 |
5 |
9 |
7 |
|||||||||||||||
Net Income |
305 |
316 |
616 |
617 |
|||||||||||||||
Net Income - Noncontrolling Interests |
18 |
9 |
31 |
17 |
|||||||||||||||
Net Income - Controlling Interests |
$ |
287 |
$ |
307 |
$ |
585 |
$ |
600 |
Spectra Energy Partners, LP | |||||||||||
Condensed Consolidated Balance Sheets | |||||||||||
(Unaudited) | |||||||||||
(In millions) | |||||||||||
June 30, |
December 31, | ||||||||||
2016 |
2015 | ||||||||||
ASSETS |
|||||||||||
Current Assets |
$ |
553 |
$ |
544 |
|||||||
Investments and Other Assets |
4,312 |
4,180 |
|||||||||
Net Property, Plant and Equipment |
14,844 |
13,837 |
|||||||||
Regulatory Assets and Deferred Debits |
324 |
290 |
|||||||||
Total Assets |
$ |
20,033 |
$ |
18,851 |
|||||||
LIABILITIES AND EQUITY |
|||||||||||
Current Liabilities |
$ |
1,401 |
$ |
1,471 |
|||||||
Long-term Debt |
5,861 |
5,845 |
|||||||||
Deferred Credits and Other Liabilities |
198 |
189 |
|||||||||
Equity |
12,573 |
11,346 |
|||||||||
Total Liabilities and Equity |
$ |
20,033 |
$ |
18,851 |
Spectra Energy Partners, LP | ||||||||||
Distributable Cash Flow | ||||||||||
(Unaudited) | ||||||||||
(Dollars in Millions, except where noted)
Reported – These results include the impact of special items | ||||||||||
Three Months Ended |
Six Months Ended |
|||||||||
2016 |
2015 |
2016 |
2015 |
|||||||
Net Income |
$ 305 |
$ 316 |
$ 616 |
$ 617 |
||||||
Add: |
||||||||||
Interest expense |
56 |
63 |
112 |
120 |
||||||
Income tax expense |
5 |
5 |
9 |
7 |
||||||
Depreciation and amortization |
77 |
73 |
154 |
146 |
||||||
Foreign currency (gain) loss |
1 |
- |
- |
3 |
||||||
Less: |
||||||||||
Third party interest income |
2 |
1 |
2 |
1 |
||||||
EBITDA |
442 |
456 |
889 |
892 |
||||||
Add: |
||||||||||
Earnings from equity investments |
(30) |
(45) |
(57) |
(85) |
||||||
Distributions from equity investments |
32 |
70 |
97 |
124 |
||||||
Non-cash impairment at Ozark Gas Gathering |
- |
- |
- |
9 |
||||||
Other |
1 |
3 |
3 |
6 |
||||||
Less: |
||||||||||
Interest expense |
56 |
63 |
112 |
120 |
||||||
Equity AFUDC |
29 |
16 |
46 |
27 |
||||||
Net cash paid for income taxes |
4 |
2 |
5 |
7 |
||||||
Distributions to non-controlling interests |
8 |
9 |
15 |
16 |
||||||
Maintenance capital expenditures |
73 |
73 |
108 |
101 |
||||||
Total Distributable Cash Flow |
$ 275 |
$ 321 |
$ 646 |
$ 675 |
||||||
Spectra Energy Partners, LP |
|||||||||||||||
Reported to Ongoing Earnings Reconciliation |
|||||||||||||||
June 2016 Quarter-to-date |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(In millions) |
|||||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND DEPRECIATION AND AMORTIZATION |
Reported Earnings |
Less: Special Items |
Ongoing Earnings |
||||||||||||
U.S. Transmission |
$ |
406 |
$ |
(6) |
A |
$ |
412 |
||||||||
Liquids |
58 |
— |
58 |
||||||||||||
Total Reportable Segment EBITDA |
464 |
(6) |
470 |
||||||||||||
Other |
(22) |
— |
(22) |
||||||||||||
Total Reportable Segment and other EBITDA |
$ |
442 |
$ |
(6) |
$ |
448 |
|||||||||
EARNINGS |
|||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
442 |
$ |
(6) |
$ |
448 |
|||||||||
Depreciation and Amortization |
(77) |
— |
(77) |
||||||||||||
Interest Expense |
(56) |
— |
(56) |
||||||||||||
Other Income and Expenses |
1 |
— |
1 |
||||||||||||
Income Tax Expense |
(5) |
— |
(5) |
||||||||||||
Total Net Income |
305 |
(6) |
311 |
||||||||||||
Total Net Income - Noncontrolling Interests |
(18) |
— |
(18) |
||||||||||||
Total Net Income - Controlling Interests |
$ |
287 |
$ |
(6) |
$ |
293 |
|||||||||
A - Inspection and repair costs related to Texas Eastern pipeline incident in Pennsylvania |
Spectra Energy Partners, LP |
||||||||
Reported to Ongoing Earnings Reconciliation |
||||||||
June 2015 Quarter-to-date |
||||||||
(Unaudited) |
||||||||
(In millions) |
||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND DEPRECIATION AND AMORTIZATION |
Reported/ Ongoing Earnings |
|||||||
U.S. Transmission |
$ |
396 |
||||||
Liquids |
78 |
|||||||
Total Reportable Segment EBITDA |
474 |
|||||||
Other |
(18) |
|||||||
Total Reportable Segment and other EBITDA |
$ |
456 |
||||||
EARNINGS |
||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
456 |
||||||
Depreciation and Amortization |
(73) |
|||||||
Interest Expense |
(63) |
|||||||
Other Income and Expenses |
1 |
|||||||
Income Tax Expense |
(5) |
|||||||
Total Net Income |
316 |
|||||||
Total Net Income - Noncontrolling Interests |
(9) |
|||||||
Total Net Income - Controlling Interests |
$ |
307 |
||||||
Spectra Energy Partners, LP | ||||||||
Reported to Ongoing Distributable Cash Flow Reconciliation | ||||||||
Unaudited | ||||||||
(In millions) | ||||||||
Quarter-To-Date |
Quarter-To-Date | |||||||
June 30, 2016 |
June 30, 2015 | |||||||
Reported |
Less: |
Ongoing |
Reported/ | |||||
Net Income |
$ 305 |
$ (6) |
$ 311 |
$ 316 | ||||
Add: |
||||||||
Interest expense |
56 |
- |
56 |
63 | ||||
Income tax expense |
5 |
- |
5 |
5 | ||||
Depreciation and amortization |
77 |
- |
77 |
73 | ||||
Foreign currency loss |
1 |
- |
1 |
- | ||||
Less: |
||||||||
Third party interest income |
2 |
- |
2 |
1 | ||||
EBITDA |
442 |
(6) |
448 |
456 | ||||
Add: |
||||||||
Earnings from equity investments |
(30) |
- |
(30) |
(45) | ||||
Distributions from equity investments |
32 |
- |
32 |
70 | ||||
Other |
1 |
- |
1 |
3 | ||||
Less: |
||||||||
Interest expense |
56 |
- |
56 |
63 | ||||
Equity AFUDC |
29 |
- |
29 |
16 | ||||
Net cash paid for income taxes |
4 |
- |
4 |
2 | ||||
Distributions to non-controlling interests |
8 |
- |
8 |
9 | ||||
Maintenance capital expenditures |
73 |
- |
73 |
73 | ||||
Total Distributable Cash Flow |
$ 275 |
$ (6) |
$ 281 |
$ 321 | ||||
Logo - http://photos.prnewswire.com/prnh/20071107/CLW064
SOURCE Spectra Energy Partners, LP
HOUSTON, Aug. 3, 2016 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) today reported net income of $221 million, including net income from controlling interests of $149 million, for the second quarter ended June 30, 2016, with diluted earnings per share of $0.21. The second quarter included non-recurring special items. After income taxes of $12 million, non-recurring special items decreased diluted earnings per share by $0.03.
Second Quarter Highlights:
For the quarter, ongoing earnings before interest, taxes, depreciation and amortization (EBITDA) were $655 million, compared with $652 million in the prior-year quarter.
Ongoing distributable cash flow for the quarter was $271 million, compared with $285 million in the same quarter last year.
For the quarter, ongoing net income from controlling interests was $169 million, or $0.24 diluted earnings per share, compared with $156 million, or $0.23 diluted earnings per share in second quarter 2015. Net income from controlling interests was $149 million, or $0.21 diluted earnings per share, compared with $18 million, or $0.03 diluted earnings per share in second quarter 2015.
CEO COMMENT
"Spectra Energy achieved another solid quarter thanks to the strength of our diversified portfolio, and our earnings remain in line with the overall expectations we set at the beginning of the year," said Greg Ebel, chief executive officer, Spectra Energy. "Not only are we making significant progress advancing our projects already in execution, but our project backlog continues to grow, reaching $10 billion this quarter. Notably, we secured the $1.5 billion Valley Crossing Pipeline project to serve Mexico's developing natural gas market. Our excellent liquidity and investment-grade balance sheet, as well as our access to multiple financing options, continue to be significant competitive advantages. These advantages, combined with our limited commodity exposure, give us confidence in our ability to deliver on our commitments to our investors."
EFFECTS OF SPECIAL ITEMS
Second Quarter 2016 |
||||||
($MM) |
Segment |
EBITDA |
Income |
Net |
DCF | |
Ongoing |
$ 655 |
$ (64) |
$ 169 |
$ 271 | ||
Adjustments related to Special Items |
||||||
Costs related to Texas Eastern pipeline incident |
||||||
Self-insurance reserve |
Other |
$ (10) |
$ 4 |
$ (6) |
$ (10) | |
Inspection and repair costs |
SEP |
(6) |
2 |
(3)(2) |
(6) | |
Effects of flooding in British Columbia |
W. Canada |
(3) |
1 |
(2) |
(3) | |
Employee and overhead reduction costs |
W. Canada |
(6) |
2 |
(4) |
(6) | |
Employee and overhead reduction costs |
Field Services |
(5) |
2 |
(3) |
- | |
Loss on asset sale |
Field Services |
(3) |
1 |
(2) |
- | |
Total Special Items |
$ (33) |
$ 12 |
$ (20) |
$ (25) | ||
Reported |
$ 622 |
$ (52) |
$ 149 |
$ 246 | ||
(1) Represents net income from controlling interests (2) Net of non-controlling interests of $1 million |
Second Quarter 2015 |
|||||
($MM) |
Segment |
EBITDA |
Income |
Net |
DCF |
Ongoing |
$ 652 |
$ (72) |
$ 156 |
$ 285 | |
Adjustments related to Special Items |
|||||
Employee and overhead reduction costs |
W. Canada |
$ (11) |
$ 3 |
$ (8) |
$ (11) |
Goodwill impairment |
Field Services |
(194) |
72 |
(122) |
- |
Loss on asset sales |
Field Services |
(12) |
4 |
(8) |
- |
Total Special Items |
$ (217) |
$ 79 |
$ (138) |
$ (11) | |
Reported |
$ 435 |
$ 7 |
$ 18 |
$ 274 | |
(1) Represents net income from controlling interests |
SEGMENT RESULTS
Spectra Energy Partners
Ongoing EBITDA from Spectra Energy Partners was $477 million in second quarter 2016, compared with $478 million in second quarter 2015. Second quarter 2016 results exclude a special item of $6 million in expense. These results reflect increased earnings from expansion projects and the absence of equity earnings from Sand Hills and Southern Hills natural gas liquids (NGL) pipelines, which Spectra Energy Partners owned until October 2015. Earnings from these NGL pipeline interests are now reflected in the Field Services segment. These results were partially offset by a positive property tax adjustment in second quarter 2015.
Distribution
Despite a lower Canadian dollar, Distribution second quarter 2016 EBITDA was $104 million, compared with $98 million in second quarter 2015. This increase was mainly due to incremental earnings from the 2015 Dawn-Parkway expansion project and higher storage margins, as well as colder weather.
Western Canada Transmission & Processing
Ongoing EBITDA from Western Canada Transmission & Processing was $106 million in second quarter 2016, compared with $115 million in second quarter 2015. The 2016 and 2015 periods exclude special items of $9 million and $11 million in expenses, respectively. In line with our expectations, the segment's results reflect lower gathering and processing revenues, lower earnings at Empress, and a lower Canadian dollar, largely offset by lower plant turnaround costs.
Field Services
Ongoing EBITDA from Field Services was $(6) million in second quarter 2016, compared with $(27) million in second quarter 2015. The 2016 and 2015 periods exclude special items of $8 million and $206 million in expenses, respectively. The results for the quarter reflect higher earnings attributable to favorable contract realignment efforts, continued cost-saving initiatives and asset growth. These increases were partially offset by lower commodity prices and lower-margin volume declines. As a reminder, Spectra Energy's EBITDA from Field Services represents the company's 50 percent share of DCP Midstream's net income plus gains from DPM unit issuances.
During the second quarters of 2016 and 2015, respectively, NGL prices averaged $0.46 per gallon versus $0.48 per gallon, NYMEX natural gas averaged $1.95 per million British thermal units (MMBtu) versus $2.64 per MMBtu, and crude oil averaged approximately $46 per barrel versus $58 per barrel.
Other
Ongoing net expenses from "Other" were $26 million and $12 million in the second quarters of 2016 and 2015, respectively. The 2016 period excludes a special item of $10 million in expense. These results reflect higher employee benefits costs, driven by an improvement in the company's stock price, and an increase in business development costs. "Other" primarily consists of corporate expenses, including benefits and captive insurance.
Interest Expense
Interest expense was $153 million in second quarter 2016, compared with $166 million in second quarter 2015, reflecting higher capitalized interest.
Income Tax Expense
Income tax expense was $52 million in second quarter 2016, compared with an income tax benefit of $7 million in second quarter 2015, with effective tax rates of 19 percent and negative 10 percent, respectively. The 2015 period reflects a $72 million tax benefit reported as a special item related to a goodwill impairment at DCP Midstream.
Foreign Currency
Net income from controlling interests for the quarter was higher by $2 million due to a lower Canadian dollar.
Liquidity and Capital Expenditures
Total debt outstanding at Spectra Energy as of June 30, 2016, was $14.8 billion, with available liquidity of $3.5 billion. Including contributions from noncontrolling interests, Spectra Energy has $3.0 billion of capital expansion spending planned in 2016, $1.8 billion of which will be at Spectra Energy Partners.
Including contributions from noncontrolling interests of $81 million, total capital spending in second quarter 2016 was $860 million, comprised of $704 million of growth capital expenditures and $156 million of maintenance capital expenditures.
In April 2016, Spectra Energy issued 16.1 million common shares to the public for total net proceeds of $479 million. The proceeds were used to purchase 10.4 million common units from Spectra Energy Partners.
EXPANSION PROJECT UPDATES
Spectra Energy continues to make progress on securing $35 billion in new projects by the end of the decade. At the end of second quarter 2016, the company had:
Spectra Energy Partners
The Ozark Conversion project went into service on time and began flowing product in July. Spectra Energy Partners' other projects scheduled for 2016 in-service are on track to meet their timelines, including AIM, Loudon Expansion, Salem Lateral, and Express Enhancement.
Pre-construction work is currently under way on Sabal Trail, with full construction scheduled to begin in late summer, and in-service targeted for early summer 2017.
In July, the NEXUS and TEAL projects received a favorable FERC Draft Environmental Impact Statement (DEIS). The FERC Final Environmental Impact Statement is expected later this year, and the FERC Certificate is expected in first quarter 2017, keeping the projects on track to be in service in fourth quarter 2017.
Spectra Energy Partners also received the FERC Notice of Schedule for Access South, Adair Southwest, and the Lebanon Extension in July, and expects to receive the FERC Environmental Assessment soon, keeping these projects on target for in-service in the second half of 2017.
PennEast received its DEIS in July as well, and is expected to be in service in the second half of 2018.
Atlantic Bridge received its FERC Environmental Assessment in May and continues to move forward toward an in-service date in the second half of 2017.
The South Texas Expansion Project (STEP) in-service date has shifted to fourth quarter 2018 to be in line with our expected in-service date for the Valley Crossing Pipeline project.
We continue to make progress on Access Northeast, and anticipate moving the project into execution later this year. Access Northeast is uniquely designed – both physically and contractually – to serve the needs of New England power generators, improve reliability, and save consumers an average of $1 billion per year in energy costs.
Spectra Energy continues working with co-developers Eversource and National Grid to advance state approvals for the customer agreements and is participating in the various processes currently under way:
The Access Northeast solution is designed to meet the needs of New England by maximizing the use of existing utility corridors and the Algonquin and Maritimes & Northeast pipelines, which directly connect to more than 60 percent of the existing ISO-New England gas-fired electric generation capacity and more than 80 percent of the new capacity that has recently cleared the ISO-New England forward capacity market. Access Northeast will cost-effectively deliver affordable natural gas when power generators need it, with new services to handle peak hours, seasonal needs, and quick starts to support intermittent wind and solar energy. In April, FERC issued the Notice of Intent to prepare an Environmental Impact Statement for Access Northeast, which continues to advance toward a late 2018 initial in-service date.
Distribution
The 2016 and 2017 Dawn-Parkway expansions are in construction and are on schedule for their respective in-service dates. Construction also continues on the Burlington-Oakville expansion, which is expected to be in service later this year.
Western Canada
The RAM project is proceeding on schedule, and will phase in from 2016 through 2018, and the High Pine in-service date moved to the first half of 2017 due to the National Energy Board (NEB) review.
The Jackfish Lake project received NEB approval in July, and is anticipated to be placed into service in first quarter 2017, earlier than originally expected.
Projects Moved into Execution in Second Quarter
In June, Spectra Energy was named the successful bidder in the Nueces to Brownsville RFP process conducted by Comisión Federal de Electricidad (CFE), the Mexico state-owned power utility. The Valley Crossing Pipeline project is a $1.5 billion intrastate natural gas pipeline system in South Texas that will help meet Mexico's growing electric generation needs. The approximately 170-mile pipeline, which will have a capacity of 2.6 billion cubic feet per day (Bcf/d) and is scheduled for in-service in fourth quarter 2018, is underpinned by a long-term, fee-based, U.S. dollar-denominated contract with CFE. Valley Crossing will also construct and operate a header system of more than 5 Bcf/d near the Agua Dulce Hub. This project positions Spectra Energy to pursue other incremental upstream regional business as Mexico reforms its energy industry.
The C$265 million Panhandle Reinforcement project is a pipeline expansion to serve incremental industrial market growth in southwestern Ontario. Union Gas submitted the Ontario Energy Board application in June and expects approval in first quarter 2017, with in-service by the end of 2017.
Spectra Energy also filed a FERC application for the Bayway Lateral in July and expects to have this $30 million project in service in the first half of 2018. This lateral, with capacity of 300 million cubic feet per day, will serve a refinery and a cogeneration facility in New Jersey.
ADDITIONAL INFORMATION
Additional information about second quarter 2016 earnings can be obtained via the Spectra Energy website: www.spectraenergy.com.
The analyst call, held jointly with Spectra Energy Partners, is scheduled for today, Wednesday, August 3, 2016, at 8 a.m. CT. The webcast will be available via the Spectra Energy and Spectra Energy Partners Investors pages. The conference call can be accessed by dialing (888) 252-3715 in the U.S. or Canada, or (706) 634-8942 internationally. The conference ID is 70917862 or "Spectra Energy / Spectra Energy Partners Earnings Call."
A replay of the call will be available until 5 p.m. CT on Friday, September 2, 2016, by dialing (800) 585-8367 in the U.S. or Canada, or (404) 537-3406 internationally, and using the above conference ID. A replay and transcript also will be available via the Spectra Energy and Spectra Energy Partners Investors pages.
Non-GAAP Financial Measures
We use ongoing net income from controlling interests and ongoing diluted EPS as measures to evaluate operations of the company. These measures are non-GAAP financial measures as they represent net income from controlling interests and diluted EPS, excluding special items. Special items represent certain charges and credits which we believe will not be recurring on a regular basis. We believe that the presentation of ongoing net income from controlling interests and ongoing diluted EPS provides useful information to investors, as it allows investors to more accurately compare our ongoing performance across periods. The most directly comparable GAAP measures for ongoing net income from controlling interests and ongoing diluted EPS are net income from controlling interests and diluted EPS.
We use earnings from continuing operations before interest, income taxes, and depreciation and amortization (EBITDA) and ongoing EBITDA, non-GAAP financial measures, as performance measures for Spectra Energy Corp. Ongoing EBITDA represents EBITDA, excluding special items. We believe that the presentation of EBITDA and ongoing EBITDA provides useful information to investors, as it allows investors to more accurately compare Spectra Energy Corp's performance across periods. The most directly comparable GAAP measure for EBITDA and ongoing EBITDA for Spectra Energy Corp is net income.
The primary performance measures used by us to evaluate segment performance are segment EBITDA and Other EBITDA. We consider segment EBITDA and Other EBITDA, which are the GAAP measures used to report segment results, to be good indicators of each segment's operating performance from its continuing operations as they represent the results of our segments' operations before depreciation and amortization without regard to financing methods or capital structures. Our segment EBITDA and Other EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate EBITDA in the same manner.
We also use ongoing segment EBITDA and ongoing Other EBITDA (net expenses) as measures of performance. Ongoing segment EBITDA and ongoing Other EBITDA are non-GAAP financial measures, as they represent segment EBITDA and Other EBITDA, excluding special items. We believe that the presentation of ongoing segment EBITDA and ongoing Other EBITDA provides useful information to investors, as it allows investors to more accurately compare a segment's or Other's ongoing performance across periods. The most directly comparable GAAP measures for ongoing segment EBITDA and ongoing Other EBITDA are segment EBITDA and Other EBITDA.
We also present Distributable Cash Flow (DCF), which is a non-GAAP financial measure. We believe that the presentation of DCF provides useful information to investors, as it represents the cash generation capabilities of the company to support dividend growth. We also use ongoing DCF, which is a non-GAAP financial measure, as it represents DCF, excluding the cash effect of special items. The most directly comparable GAAP measure for DCF and ongoing DCF is net income. We also use DCF coverage, which is a non-GAAP financial measure, as it represents DCF divided by dividends declared on common stock. The most directly comparable GAAP measure for DCF coverage is EPS.
The non-GAAP financial measures presented in this press release should not be considered in isolation or as an alternative to financial measures presented in accordance with GAAP. These non-GAAP financial measures may not be comparable to similarly titled measures of other companies because other companies may not calculate these measures in the same manner.
Forward-Looking Statements
This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on our beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an effect on rate structure, and affect the speed at and degree to which competition enters the natural gas and oil industries; outcomes of litigation and regulatory investigations, proceedings or inquiries; weather and other natural phenomena, including the economic, operational and other effects of hurricanes and storms; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; general economic conditions, including the risk of a prolonged economic slowdown or decline, or the risk of delay in a recovery, which can affect the long-term demand for natural gas and oil and related services; potential effects arising from terrorist attacks and any consequential or other hostilities; changes in environmental, safety and other laws and regulations; the development of alternative energy resources; results and costs of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general market and economic conditions; increases in the cost of goods and services required to complete capital projects; declines in the market prices of equity and debt securities and resulting funding requirements for defined benefit pension plans; growth in opportunities, including the timing and success of efforts to develop U.S. and Canadian pipeline, storage, gathering, processing and other related infrastructure projects and the effects of competition; the performance of natural gas and oil transmission and storage, distribution, and gathering and processing facilities; the extent of success in connecting natural gas and oil supplies to gathering, processing and transmission systems and in connecting to expanding gas and oil markets; the effects of accounting pronouncements issued periodically by accounting standard-setting bodies; conditions of the capital markets during the periods covered by forward-looking statements; and the ability to successfully complete merger, acquisition or divestiture plans; regulatory or other limitations imposed as a result of a merger, acquisition or divestiture; and the success of the business following a merger, acquisition or divestiture. These factors, as well as additional factors that could affect our forward-looking statements, are described under the headings "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Information" in our 2015 Form 10-K, filed on February 25, 2016, and in our other filings made with the Securities and Exchange Commission (SEC), which are available via the SEC's website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. All forward-looking statements in this release are made as of the date hereof and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include more than 21,000 miles of natural gas, natural gas liquids, and crude oil pipelines; approximately 300 billion cubic feet (Bcf) of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com and www.spectraenergypartners.com.
Spectra Energy Corp | ||||||||||||||||
Quarterly Highlights | ||||||||||||||||
June 2016 | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In millions, except per-share amounts and where noted) | ||||||||||||||||
Reported - These results include the impact of special items | ||||||||||||||||
Three Months |
Six Months | |||||||||||||||
2016 |
2015 |
2016 |
2015 | |||||||||||||
COMMON STOCK DATA |
||||||||||||||||
Earnings Per Share, Diluted |
$ |
0.21 |
$ |
0.03 |
$ |
0.56 |
$ |
0.42 |
||||||||
Dividends Per Share |
$ |
0.405 |
$ |
0.370 |
$ |
0.810 |
$ |
0.740 |
||||||||
Weighted-Average Shares Outstanding, Diluted |
701 |
672 |
688 |
672 |
||||||||||||
INCOME |
||||||||||||||||
Operating Revenues |
$ |
1,159 |
$ |
1,192 |
$ |
2,543 |
$ |
2,815 |
||||||||
Total Reportable Segment EBITDA |
658 |
447 |
1,427 |
1,238 |
||||||||||||
Net Income - Controlling Interests |
149 |
18 |
383 |
285 |
||||||||||||
EBITDA BY BUSINESS SEGMENT |
||||||||||||||||
Spectra Energy Partners |
$ |
471 |
$ |
478 |
$ |
944 |
$ |
933 |
||||||||
Distribution |
104 |
98 |
274 |
290 |
||||||||||||
Western Canada Transmission & Processing |
97 |
104 |
220 |
265 |
||||||||||||
Field Services |
(14) |
(233) |
(11) |
(250) |
||||||||||||
Total Reportable Segment EBITDA |
658 |
447 |
1,427 |
1,238 |
||||||||||||
Other EBITDA |
(36) |
(12) |
(55) |
(27) |
||||||||||||
Total Reportable Segment and Other EBITDA |
$ |
622 |
$ |
435 |
$ |
1,372 |
$ |
1,211 |
||||||||
DISTRIBUTABLE CASH FLOW |
||||||||||||||||
Distributable Cash Flow |
$ |
246 |
$ |
274 |
$ |
769 |
$ |
852 |
||||||||
CAPITAL AND INVESTMENT EXPENDITURES |
||||||||||||||||
Spectra Energy Partners (a) |
$ |
1,135 |
$ |
638 |
||||||||||||
Distribution |
341 |
207 |
||||||||||||||
Western Canada Transmission & Processing |
133 |
149 |
||||||||||||||
Other |
23 |
29 |
||||||||||||||
Total Capital and Investment Expenditures (a) |
$ |
1,632 |
$ |
1,023 |
||||||||||||
Expansion and Investment (a) |
$ |
1,388 |
$ |
760 |
||||||||||||
Maintenance and Other |
244 |
263 |
||||||||||||||
Total Capital and Investment Expenditures (a) |
$ |
1,632 |
$ |
1,023 |
||||||||||||
June 30, |
December 31, | |||||||||||||||
2016 |
2015 | |||||||||||||||
CAPITALIZATION |
||||||||||||||||
Common Equity - Controlling Interests |
28.9 |
% |
26.6 |
% | ||||||||||||
Noncontrolling Interests and Preferred Stock |
15.0 |
% |
13.6 |
% | ||||||||||||
Total Debt |
56.1 |
% |
59.8 |
% | ||||||||||||
Total Debt |
$ |
14,765 |
$ |
14,656 |
||||||||||||
Book Value Per Share (b) |
$ |
10.84 |
$ |
9.73 |
||||||||||||
Actual Shares Outstanding (c) |
701 |
671 |
||||||||||||||
(a) Excludes contributions received from noncontrolling interests of $176 million in 2016 and $58 million in 2015. | ||||||||||||||||
(b) Represents controlling interests. | ||||||||||||||||
(c) Increase in 2016 resulted from a newly initiated "At the Market" equity issuance program in March 2016 and equity |
Spectra Energy Corp | ||||||||||||
Quarterly Highlights | ||||||||||||
June 2016 | ||||||||||||
(Unaudited) | ||||||||||||
(In millions, except where noted) | ||||||||||||
Reported - These results include the impact of special items | ||||||||||||
Three Months |
Six Months | |||||||||||
2016 |
2015 |
2016 |
2015 | |||||||||
SPECTRA ENERGY PARTNERS |
||||||||||||
Operating Revenues |
$ |
618 |
$ |
603 |
$ |
1,242 |
$ |
1,209 | ||||
Operating Expenses |
||||||||||||
Operating, Maintenance and Other |
216 |
192 |
421 |
399 | ||||||||
Other Income and Expenses |
69 |
67 |
123 |
123 | ||||||||
EBITDA |
$ |
471 |
$ |
478 |
$ |
944 |
$ |
933 | ||||
Express Pipeline Revenue Receipts, MBbl/d (a) |
233 |
235 |
233 |
242 | ||||||||
Platte PADD II Deliveries, MBbl/d |
143 |
172 |
132 |
170 | ||||||||
DISTRIBUTION |
||||||||||||
Operating Revenues |
$ |
284 |
$ |
290 |
$ |
749 |
$ |
952 | ||||
Operating Expenses |
||||||||||||
Natural Gas Purchased |
91 |
103 |
306 |
486 | ||||||||
Operating, Maintenance and Other |
89 |
90 |
171 |
176 | ||||||||
Other Income and Expenses |
— |
1 |
2 |
— | ||||||||
EBITDA |
$ |
104 |
$ |
98 |
$ |
274 |
$ |
290 | ||||
Number of Customers, Thousands |
— |
— |
1,446 |
1,425 | ||||||||
Heating Degree Days, Fahrenheit |
1,032 |
866 |
4,347 |
5,125 | ||||||||
Pipeline Throughput, TBtu (b) |
155 |
132 |
385 |
460 | ||||||||
Canadian Dollar Exchange Rate, Average |
1.29 |
1.23 |
1.33 |
1.23 | ||||||||
WESTERN CANADA TRANSMISSION & PROCESSING |
||||||||||||
Operating Revenues |
$ |
258 |
$ |
304 |
$ |
563 |
$ |
674 | ||||
Operating Expenses |
||||||||||||
Natural Gas and Petroleum Products Purchased |
15 |
25 |
63 |
92 | ||||||||
Operating, Maintenance and Other |
148 |
174 |
285 |
321 | ||||||||
Other Income and Expenses |
2 |
(1) |
5 |
4 | ||||||||
EBITDA |
$ |
97 |
$ |
104 |
$ |
220 |
$ |
265 | ||||
Pipeline Throughput, TBtu |
214 |
220 |
466 |
476 | ||||||||
Volumes Processed, TBtu |
163 |
156 |
339 |
336 | ||||||||
Canadian Dollar Exchange Rate, Average |
1.29 |
1.23 |
1.33 |
1.23 | ||||||||
FIELD SERVICES |
||||||||||||
Earnings (loss) from Equity Investment in DCP Midstream, LLC |
$ |
(14) |
$ |
(233) |
$ |
(11) |
$ |
(250) | ||||
Natural Gas Gathered and Processed/Transported, TBtu/day (c) |
6.7 |
7.0 |
6.8 |
7.1 | ||||||||
Natural Gas Liquids Production, MBbl/d (c) |
416 |
408 |
399 |
404 | ||||||||
Average Natural Gas Price Per MMBtu (d) |
$ |
1.95 |
$ |
2.64 |
$ |
2.02 |
$ |
2.81 | ||||
Average Natural Gas Liquids Price Per Gallon (e) |
$ |
0.46 |
$ |
0.48 |
$ |
0.41 |
$ |
0.48 | ||||
Average Crude Oil Price Per Barrel (f) |
$ |
45.64 |
$ |
57.94 |
$ |
39.54 |
$ |
53.29 | ||||
(a) Thousand barrels per day. | ||||||||||||
(b) Trillion British thermal units. | ||||||||||||
(c) Reflects 100% of DCP Midstream volumes. | ||||||||||||
(d) Million British thermal units. Average price based on NYMEX Henry Hub. | ||||||||||||
(e) Does not reflect results of commodity hedges. | ||||||||||||
(f) Average price based on NYMEX calendar month. |
Spectra Energy Corp | ||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||
(Unaudited) | ||||||||||||
(In millions) | ||||||||||||
Reported - These results include the impact of special items | ||||||||||||
Three Months |
Six Months | |||||||||||
2016 |
2015 |
2016 |
2015 | |||||||||
Operating Revenues |
$ |
1,159 |
$ |
1,192 |
$ |
2,543 |
$ |
2,815 | ||||
Operating Expenses |
788 |
786 |
1,678 |
1,868 | ||||||||
Operating Income |
371 |
406 |
865 |
947 | ||||||||
Other Income and Expenses |
55 |
(167) |
120 |
(123) | ||||||||
Interest Expense |
153 |
166 |
304 |
325 | ||||||||
Earnings Before Income Taxes |
273 |
73 |
681 |
499 | ||||||||
Income Tax Expense |
52 |
(7) |
150 |
94 | ||||||||
Net Income |
221 |
80 |
531 |
405 | ||||||||
Net Income - Noncontrolling Interests |
72 |
62 |
148 |
120 | ||||||||
Net Income - Controlling Interests |
$ |
149 |
$ |
18 |
$ |
383 |
$ |
285 |
Spectra Energy Corp | |||||||||
Condensed Consolidated Balance Sheets | |||||||||
(Unaudited) | |||||||||
(In millions) | |||||||||
June 30, |
December 31, | ||||||||
2016 |
2015 | ||||||||
ASSETS |
|||||||||
Current Assets |
$ |
1,637 |
$ |
1,648 | |||||
Investments and Other Assets |
7,247 |
7,056 | |||||||
Net Property, Plant and Equipment |
24,707 |
22,918 | |||||||
Regulatory Assets and Deferred Debits |
1,456 |
1,301 | |||||||
Total Assets |
$ |
35,047 |
$ |
32,923 | |||||
LIABILITIES AND EQUITY |
|||||||||
Current Liabilities |
$ |
2,786 |
$ |
3,392 | |||||
Long-term Debt |
13,584 |
12,892 | |||||||
Deferred Credits and Other Liabilities |
7,115 |
6,768 | |||||||
Preferred Stock of Subsidiaries |
339 |
339 | |||||||
Equity |
11,223 |
9,532 | |||||||
Total Liabilities and Equity |
$ |
35,047 |
$ |
32,923 |
Spectra Energy Corp | ||||||||||||
Distributable Cash Flow | ||||||||||||
(Unaudited) | ||||||||||||
(In millions) | ||||||||||||
Reported - These results include the impact of special items | ||||||||||||
Three Months Ended |
Six Months Ended | |||||||||||
2016 |
2015 |
2016 |
2015 | |||||||||
Net Income |
$ |
221 |
$ |
80 |
$ |
531 |
$ |
405 | ||||
Add: |
||||||||||||
Interest expense |
153 |
166 |
304 |
325 | ||||||||
Income tax expense (benefit) |
52 |
(7) |
150 |
94 | ||||||||
Depreciation and amortization |
196 |
193 |
389 |
386 | ||||||||
Foreign currency (gain) loss |
2 |
4 |
— |
3 | ||||||||
Less: |
||||||||||||
Third party interest income |
2 |
1 |
2 |
2 | ||||||||
EBITDA |
622 |
435 |
1,372 |
1,211 | ||||||||
Add: |
||||||||||||
(Earnings) Loss from equity investments |
(16) |
(5) |
(56) |
(29) | ||||||||
Non-cash impairments at DCP |
— |
194 |
7 |
194 | ||||||||
Distributions from equity investments |
32 |
70 |
97 |
124 | ||||||||
Empress non-cash items |
12 |
1 |
44 |
23 | ||||||||
Non-cash impairment at Ozark Gas Gathering |
— |
— |
— |
9 | ||||||||
Other |
16 |
17 |
21 |
22 | ||||||||
Less: |
||||||||||||
Interest expense |
153 |
166 |
304 |
325 | ||||||||
Equity AFUDC |
39 |
24 |
64 |
40 | ||||||||
Net cash paid (refund) for income taxes |
12 |
18 |
(10) |
(28) | ||||||||
Distributions to non-controlling interests |
60 |
49 |
114 |
93 | ||||||||
Maintenance capital expenditures |
156 |
181 |
244 |
272 | ||||||||
Total Distributable Cash Flow |
$ |
246 |
$ |
274 |
$ |
769 |
$ |
852 |
Spectra Energy Corp | ||||||||||||
Reported to Ongoing Earnings Reconciliation | ||||||||||||
June 2016 Quarter-to-date | ||||||||||||
(Unaudited) | ||||||||||||
(In millions, except per-share amounts) | ||||||||||||
Reported |
Less: |
Ongoing | ||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND |
||||||||||||
Spectra Energy Partners |
$ |
471 |
$ |
(6) |
A |
$ |
477 | |||||
Distribution |
104 |
— |
104 | |||||||||
Western Canada Transmission & Processing |
97 |
(9) |
B |
106 | ||||||||
Field Services |
(14) |
(8) |
C |
(6) | ||||||||
Total Reportable Segment EBITDA |
658 |
(23) |
681 | |||||||||
Other |
(36) |
(10) |
D |
(26) | ||||||||
Total Reportable Segment and Other EBITDA |
$ |
622 |
$ |
(33) |
$ |
655 | ||||||
EARNINGS |
||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
622 |
$ |
(33) |
$ |
655 | ||||||
Depreciation and Amortization |
(196) |
— |
(196) | |||||||||
Interest Expense |
(153) |
— |
(153) | |||||||||
Income Tax Benefit (Expense) |
(52) |
12 |
(64) | |||||||||
Total Net Income |
221 |
(21) |
242 | |||||||||
Total Net Income - Noncontrolling Interests |
(72) |
1 |
(73) | |||||||||
Total Net Income - Controlling Interests |
$ |
149 |
$ |
(20) |
$ |
169 | ||||||
EARNINGS PER SHARE, BASIC |
$ |
0.21 |
$ |
(0.03) |
$ |
0.24 | ||||||
EARNINGS PER SHARE, DILUTED |
$ |
0.21 |
$ |
(0.03) |
$ |
0.24 | ||||||
A - Inspection and repair costs related to Texas Eastern pipeline incident in Pennsylvania. | ||||||||||||
B - Employee and overhead reduction costs, and the effects of flooding in British Columbia. | ||||||||||||
C - Employee and overhead reduction costs, and loss on the sale of an asset. | ||||||||||||
D - Self-insurance reserve associated with Texas Eastern pipeline incident in Pennsylvania. | ||||||||||||
Weighted Average Shares (reported and ongoing) - in millions | ||||||||||||
Basic |
699 |
|||||||||||
Diluted |
701 |
Spectra Energy Corp | ||||||||||||
Reported to Ongoing Earnings Reconciliation | ||||||||||||
June 2015 Quarter-to-date | ||||||||||||
(Unaudited) | ||||||||||||
(In millions, except per-share amounts) | ||||||||||||
Reported |
Less: |
Ongoing | ||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND |
||||||||||||
Spectra Energy Partners |
$ |
478 |
$ |
— |
$ |
478 | ||||||
Distribution |
98 |
— |
98 | |||||||||
Western Canada Transmission & Processing |
104 |
(11) |
A |
115 | ||||||||
Field Services |
(233) |
(206) |
B |
(27) | ||||||||
Total Reportable Segment EBITDA |
447 |
(217) |
664 | |||||||||
Other |
(12) |
— |
(12) | |||||||||
Total Reportable Segment and Other EBITDA |
$ |
435 |
$ |
(217) |
$ |
652 | ||||||
EARNINGS |
||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
435 |
$ |
(217) |
$ |
652 | ||||||
Depreciation and Amortization |
(193) |
— |
(193) | |||||||||
Interest Expense |
(166) |
— |
(166) | |||||||||
Interest Income and Other |
(3) |
— |
(3) | |||||||||
Income Tax Benefit (Expense) |
7 |
79 |
(72) | |||||||||
Total Net Income |
80 |
(138) |
218 | |||||||||
Total Net Income - Noncontrolling Interests |
(62) |
— |
(62) | |||||||||
Total Net Income - Controlling Interests |
$ |
18 |
$ |
(138) |
$ |
156 | ||||||
EARNINGS PER SHARE, BASIC |
$ |
0.03 |
$ |
(0.20) |
$ |
0.23 | ||||||
EARNINGS PER SHARE, DILUTED |
$ |
0.03 |
$ |
(0.20) |
$ |
0.23 | ||||||
A - Employee and overhead reduction costs. | ||||||||||||
B - Employee and overhead reduction costs, net losses on sale of assets and goodwill impairment. | ||||||||||||
Weighted Average Shares (reported and ongoing) - in millions | ||||||||||||
Basic |
671 |
|||||||||||
Diluted |
672 |
Spectra Energy Corp | ||||||||||||||||||
Reported to Ongoing Distributable Cash Flow Reconciliation | ||||||||||||||||||
Unaudited | ||||||||||||||||||
(In millions, except where noted) | ||||||||||||||||||
Three Months Ended |
Three Months Ended | |||||||||||||||||
Reported |
Less: |
Ongoing |
Reported |
Less: |
Ongoing | |||||||||||||
Net Income |
$ |
221 |
$ |
(21) |
$ |
242 |
$ |
80 |
$ |
(138) |
$ |
218 | ||||||
Add: |
||||||||||||||||||
Interest expense |
153 |
— |
153 |
166 |
— |
166 | ||||||||||||
Income tax expense (benefit) |
52 |
(12) |
64 |
(7) |
(79) |
72 | ||||||||||||
Depreciation and amortization |
196 |
— |
196 |
193 |
— |
193 | ||||||||||||
Foreign currency (gain) loss |
2 |
— |
2 |
4 |
— |
4 | ||||||||||||
Less: |
||||||||||||||||||
Third party interest income |
2 |
— |
2 |
1 |
— |
1 | ||||||||||||
EBITDA |
622 |
(33) |
655 |
435 |
(217) |
652 | ||||||||||||
Add: |
||||||||||||||||||
(Earnings) Loss from equity investments |
(16) |
8 |
(24) |
(5) |
12 |
(17) | ||||||||||||
Non-cash impairment at DCP |
— |
— |
194 |
194 |
— | |||||||||||||
Distributions from equity investments |
32 |
— |
32 |
70 |
— |
70 | ||||||||||||
Empress non-cash items |
12 |
— |
12 |
1 |
— |
1 | ||||||||||||
Other |
16 |
— |
16 |
17 |
— |
17 | ||||||||||||
Less: |
||||||||||||||||||
Interest expense |
153 |
— |
153 |
166 |
— |
166 | ||||||||||||
Equity AFUDC |
39 |
— |
39 |
24 |
— |
24 | ||||||||||||
Net cash paid (refund) for income taxes |
12 |
— |
12 |
18 |
— |
18 | ||||||||||||
Distributions to non-controlling interests |
60 |
— |
60 |
49 |
— |
49 | ||||||||||||
Maintenance capital expenditures |
156 |
— |
156 |
181 |
— |
181 | ||||||||||||
Total Distributable Cash Flow |
$ |
246 |
$ |
(25) |
$ |
271 |
$ |
274 |
$ |
(11) |
$ |
285 |
Spectra Energy Corp |
||
Distributable Cash Flow |
||
(In millions) |
||
2016e | ||
Total Reported Net Income |
$ 1,150 | |
Add: |
||
Interest expense |
625 | |
Income tax expense (benefit) |
315 | |
Depreciation and amortization |
765 | |
EBITDA |
2,855 | |
Add: |
||
Net cash from equity investments |
85 | |
Other |
85 | |
Less: |
||
Interest expense |
625 | |
Equity AFUDC |
145 | |
Cash paid for income taxes |
15 | |
Distributions to non-controlling interests |
255 | |
Maintenance capital expenditures |
615 | |
Total Consolidated Distributable Cash Flow |
$ 1,370 | |
Coverage Ratio |
1.2x |
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SOURCE Spectra Energy Corp
HOUSTON, Aug. 3, 2016 /PRNewswire/ -- Spectra Energy Partners, LP (NYSE: SEP) announced that the board of directors of its general partner declared a quarterly cash distribution to unitholders of $0.66375 per unit, an increase of 1.25 cents over the previous level of $0.65125 per unit. This is the 35th consecutive quarter that Spectra Energy Partners has increased its quarterly cash distribution. The cash distribution is payable on August 26, 2016, to unitholders of record at the close of business on August 15, 2016. This quarterly cash distribution equates to $2.655 per unit on an annual basis.
This information is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Under rules applicable to publicly-traded partnerships, our distributions to non-U.S. unitholders are subject to withholding tax at the highest effective applicable rate to the extent attributable to income that is effectively connected with the conduct of a U.S. trade or business. Given the uncertainty at the time of making distributions regarding the amount of any distribution that is attributable to income that is so effectively connected, we intend to treat all of our distributions as attributable to our U.S. operations, and as a result, the entire distribution will be subject to withholding.
Spectra Energy Partners, LP (NYSE: SEP) is a Houston-based master limited partnership, formed by Spectra Energy Corp (NYSE: SE). SEP is one of the largest pipeline MLPs in the United States and connects growing supply areas to high-demand markets for natural gas and crude oil. These assets include more than 15,000 miles of transmission and gathering pipelines, approximately 170 billion cubic feet of natural gas storage, and approximately 4.8 million barrels of crude oil storage.
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SOURCE Spectra Energy Partners, LP
HOUSTON, July 6, 2016 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) and Spectra Energy Partners (NYSE: SEP) will announce their second quarter 2016 earnings results before the market opens on Wednesday, August 3, 2016, and will hold a joint investor and analyst conference call at 8 a.m. CT that same day.
The webcast will be available via the Spectra Energy and Spectra Energy Partners Investors pages. The conference call can be accessed by dialing (888) 252-3715 in the U.S. or Canada, or (706) 634-8942 internationally. The conference ID is 70917862 or "Spectra Energy / Spectra Energy Partners Earnings Call."
A replay of the call will be available until 5 p.m. CT on Friday, September 2, 2016, by dialing (800) 585-8367 in the U.S. or Canada, or (404) 537-3406 internationally, and using the above conference ID. A replay and transcript also will be available via the Spectra Energy and Spectra Energy Partners Investors pages.
Spectra Energy would like to remind investors and analysts that, in addition to its websites, Spectra Energy may use mobile apps (Invest SE and Invest SEP), or social media platforms, such as Twitter, Facebook, LinkedIn, StockTwits or YouTube, to release material corporate information.
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include more than 21,000 miles of natural gas, natural gas liquids, and crude oil pipelines; approximately 300 billion cubic feet (Bcf) of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com and www.spectraenergypartners.com.
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SOURCE Spectra Energy Corp; Spectra Energy Partners, LP
HOUSTON, July 5, 2016 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) has declared a quarterly cash dividend on its common stock of $0.405 per share, or $1.62 per share on an annualized basis. The dividend is payable on September 7, 2016, to shareholders of record at the close of business on August 12, 2016.
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include more than 21,000 miles of natural gas, natural gas liquids, and crude oil pipelines; approximately 300 billion cubic feet (Bcf) of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com and www.spectraenergypartners.com.
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SOURCE Spectra Energy Corp
HOUSTON, June 13, 2016 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) today announced that its subsidiary, Valley Crossing Pipeline, LLC, has been awarded a 168-mile intrastate natural gas pipeline project by the Comisión Federal de Electricidad (CFE) – Mexico's state-owned utility serving 37 million customers – to provide natural gas transportation services beginning in 2018 to meet Mexico's growing electric generation needs.
"Spectra Energy is pleased to have secured the bid to build and operate this critical infrastructure, which will provide clean-burning and reliable natural gas to support Mexico as its electric generators shift away from fuel oil and imported LNG," said Bill Yardley, president of U.S. Transmission and Storage for Spectra Energy. "Successfully securing this project adds to our already-strong asset portfolio, connects us to another key demand-pull market, and brings us closer to our goal of securing $35 billion in capital expansion projects by the end of this decade, with approximately $20 billion either in execution or in service since 2013."
Valley Crossing will construct and operate a header system of more than 5 billion cubic feet per day (Bcf/d) near the Agua Dulce Hub in Nueces County, Texas, as well as a 2.6 Bcf/d pipeline originating at that header and extending to Brownsville, Texas. There, the pipeline will connect with the Sur de Texas – Tuxpan pipeline, which will extend into Mexico.
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include more than 21,000 miles of natural gas, natural gas liquids, and crude oil pipelines; approximately 300 billion cubic feet (Bcf) of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com.
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SOURCE Spectra Energy Corp
HOUSTON, May 31, 2016 /PRNewswire/ -- Spectra Energy Partners' (NYSE: SEP) Bill Yardley will speak at the Master Limited Partnership Association (MLPA) 2016 Investor Conference on Thursday, June 2, 2016. Yardley is president of U.S. Transmission and Storage for Spectra Energy Corp (NYSE: SE), the general partner of Spectra Energy Partners.
The presentation is scheduled to begin at 3:30 p.m. ET and will be available via webcast. The presentation and webcast link can be accessed via the Spectra Energy Partners Investors section of Spectra Energy's website. A replay of the webcast will be available for up to one month following the event.
Spectra Energy Partners, LP (NYSE: SEP) is a Houston-based master limited partnership, formed by Spectra Energy Corp (NYSE: SE). SEP is one of the largest pipeline MLPs in the United States and connects growing supply areas to high-demand markets for natural gas and crude oil. These assets include more than 15,000 miles of transmission and gathering pipelines, approximately 170 billion cubic feet of natural gas storage, and approximately 4.8 million barrels of crude oil storage.
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SOURCE Spectra Energy Partners, LP
HOUSTON, May 16, 2016 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) today announced that 10 children of company employees have been selected to receive up to $5,000 per year in scholarship funds toward undergraduate study at an accredited college or university in the U.S. or Canada.
"Spectra Energy is proud to continue our 50-plus year tradition of offering a scholarship program for the children of our employees. We are pleased to make an investment in the futures of these exceptional students who demonstrate so much potential," said Greg Ebel, chief executive officer of Spectra Energy. "This year's scholarship recipients excel academically and actively participate in their schools and local communities."
Recipients under the Spectra Energy Scholars Program are graduating high school/secondary school seniors and are chosen annually by an independent committee of judges. The committee selects recipients based on their performance in academics, leadership and participation in school and community activities, honors and awards, work experience and financial need. The scholarships will provide the students up to $20,000 during their four years of undergraduate study.
Two additional students were recognized for their achievements and will each receive a one-time, $2,500 scholarship.
2016 SCHOLARSHIP RECIPIENTS:
Morgan Barron of Brookhaven, MS – A student at Brookhaven Academy and the son of Lane and Becky Barron
McKinzie Chambers of Houston, TX – A student at Saint Agnes Academy and the daughter of Dawn Terrazas-Chambers
Sage Graham of Ethel, MS – A student at Ethel High School and the son of Lynn and Jennifer Graham
Brittany McLaren of Chatham, ON – A student at Chatham-Kent Secondary School and the daughter of David and Carla-Jo McLaren
Chukwuebuka Moneme of Waterloo, ON – A student of St. Davids Secondary School, Waterloo, ON and the son of Chuka and Adaora Moneme
Carys Owen of Chatham, ON – A student at Chatham-Kent Secondary School and the daughter of Jason and Deborah Owen
Sarah Price of Owingsville, KY – A student at Bath County High School and the daughter of Joe and Kim Price
Heather Raun of El Campo, TX – A student at El Campo High School and the daughter of Lance and Kim Raun
Christina Scherer of Scott City, MO – A student at Notre Dame Regional High School and the daughter of Chris and Donna Scherer
Jordan Sharpe of Hanover, ON – A student at John Diefenbaker Senior School and the daughter of Scott Sharpe and Tracy Napper-Sharpe
ONE-TIME RECIPIENTS:
Samantha Brownlee of North Bay, ON – A student at St. Joseph Scollard Hall and the daughter of Kathy Brownlee
Aubrey Goldman of Pulaski, TN – student at Richland High School daughter of Mike and Jennifer Goldman
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include more than 21,000 miles of natural gas, natural gas liquids, and crude oil pipelines; approximately 300 billion cubic feet (Bcf) of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com.
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SOURCE Spectra Energy Corp
HOUSTON, May 4, 2016 /PRNewswire/ --
First Quarter Highlights:
Spectra Energy Partners, LP (NYSE: SEP) today reported first quarter 2016 distributable cash flow of $371 million, compared with $354 million in the prior-year quarter. Distributions per limited partner unit for first quarter 2016 were $0.65125, compared with $0.60125 per limited partner unit in first quarter 2015.
CEO COMMENT
"Spectra Energy Partners grew its earnings and distributable cash flow in the first quarter, despite the continuing weak energy sector fundamentals and a warm winter. Our results once again underline the reliability and strength of our business model," said Greg Ebel, chief executive officer, Spectra Energy Partners. "Our $6 billion of expansion projects continued to progress as expected during the quarter and will add incremental fee-based earnings and cash flow as they enter into service during the 2016-2019 period.
"Illustrating our confidence in the plans we shared with investors at the start of the year, we announced our 34th consecutive quarterly cash distribution increase today – representing more than eight years of steady growth," continued Ebel.
For the quarter, ongoing earnings before interest, taxes, depreciation and amortization (EBITDA) were $447 million, compared with $445 million in the prior-year quarter.
Reported net income from controlling interests was $298 million for first quarter 2016, compared with $293 million in first quarter 2015. Ongoing net income from controlling interests was $298 million for the quarter, compared with $302 million in the prior-year quarter.
SEGMENT RESULTS
U.S. Transmission
Ongoing EBITDA from U.S. Transmission was $411 million in first quarter 2016, compared with $398 million in first quarter 2015. The 2015 period excludes a non-cash special item expense of $9 million. These results reflect increased earnings from expansion projects, partially offset by lower interruptible and short-term contract transportation revenue due to warmer weather.
Liquids
Liquids reported first quarter 2016 EBITDA of $56 million, compared with $64 million in first quarter 2015. The decrease is attributable to the absence of equity earnings from Sand Hills and Southern Hills natural gas liquids (NGL) pipelines, which the company owned until October 2015, partially offset by lower operating costs.
Other
"Other" reported net expenses of $20 million in first quarter 2016, compared with $17 million in first quarter 2015.
Interest Expense
Interest expense was $56 million in first quarter 2016, compared with $57 million in first quarter 2015, driven by higher capitalized interest, offset by higher average long-term debt balances.
Liquidity and Capital Expenditures
Total debt outstanding at Spectra Energy Partners as of March 31, 2016, was $7.0 billion, with available liquidity of $1.4 billion. Including contributions from noncontrolling interests, Spectra Energy Partners has $1.8 billion of capital expansion spending planned in 2016, which will be funded through a combination of debt and equity.
Through its "At the Market" (ATM) equity issuance program, Spectra Energy Partners has received net proceeds of $103 million this year.
In April 2016, Spectra Energy purchased 10.4 million newly issued common units and 0.2 million general partner units of Spectra Energy Partners for total net proceeds of $489 million.
Including contributions from noncontrolling interests of $95 million, total capital spending in first quarter 2016 was $400 million, composed of $365 million of growth capital expenditures and $35 million of maintenance capital expenditures.
EXPANSION PROJECT UPDATES
Spectra Energy Partners has advanced numerous projects across the system. Sabal Trail, a joint venture with NextEra Energy and Duke Energy, received its Certificate of Public Convenience and Necessity from the Federal Energy Regulatory Commission (FERC) in February. This approval authorizes Sabal Trail, subject to certain conditions, to proceed with construction in order to meet a May 2017 in-service date. On April 1, 2016, Sabal Trail ownership agreements were finalized with Spectra Energy Partners, NextEra Energy and Duke Energy owning 50 percent, 42.5 percent and 7.5 percent respectively.
The NEXUS project, a joint venture with DTE Energy, will allow customers to move up to 1.5 billion cubic feet per day (Bcf/d) to Ohio and Michigan markets with access to the Dawn Hub, which is the second largest physically traded gas hub in North America and is owned and operated by Spectra Energy's subsidiary, Union Gas. NEXUS has a strong customer base and is moving forward with support from executed customer agreements with local distribution companies (LDCs), as well as Marcellus and Utica producers.
NEXUS has also signed 13 interconnect agreements with industrial facilities and power generators that could connect incremental load across Northern Ohio of up to 1.75 Bcf/d, which demonstrates strong long-term market support for our route and the project. NEXUS has consistently met its milestones and is on target for a November 2017 in-service date.
The AIM project is now in its second year of construction and more than 60 percent complete. AIM is supported by New England LDCs and is scheduled to meet its planned in-service date in fourth quarter 2016.
Advancements continue in our other projects in execution. Projects on track for in-service dates in 2016 include Loudon Expansion, which received its FERC certificate and commenced construction in March, Ozark, Salem Lateral and the first phase of Gulf Markets. Projects scheduled to go into service in 2017 include Atlantic Bridge, Access South, Adair Southwest, Lebanon Extension, TEAL and the second phase of Gulf Markets.
The PennEast project continues to move forward, and received its notice of schedule from FERC in March. The project has an expected in-service date in the second half of 2018.
Access Northeast, a project under development with Eversource Energy and National Grid, is focused on the New England electric power market and saving consumers money while improving the reliability of the region's energy system. In normal weather conditions, the project could save electric consumers an average of $1 billion a year. Savings during the extreme 2013-2014 winter could have been $2.5 billion with Access Northeast in service.
This solution is designed to meet the needs of New England by maximizing use of existing utility corridors and the Algonquin and Maritimes & Northeast pipelines, which directly connect to more than 60 percent of the existing ISO-New England gas-fired electric generation capacity and more than 80 percent of the new capacity that has recently cleared the ISO-New England forward capacity market. Access Northeast will cost-effectively deliver affordable natural gas when power generators need it, with new tariff services to handle peak hours, seasonal needs and quick starts to support intermittent wind and solar energy.
Access Northeast has executed contracts with electric distribution companies in New Hampshire and Massachusetts totaling more than 50 percent of the 0.9 Bcf/d project design capacity, and processes are under way at state public utility commissions, which are required to approve those contracts. The project anticipates additional contracts as regulatory processes progress in Connecticut, Rhode Island and Maine.
In April, FERC issued the Notice of Intent to prepare an Environmental Impact Statement for the Access Northeast project, which initiates the formal scoping process FERC utilizes to gather input from the public and interested agencies on the project. The project continues to advance toward a late 2018 initial in-service date, and Spectra Energy Partners expects to move Access Northeast into execution later this year.
In the liquids business, the Express Enhancement project is supported by long-term contracts and is on schedule for completion by the end of 2016.
Additional Information
Additional information about first quarter 2016 earnings can be obtained via the Spectra Energy website: www.spectraenergy.com.
The analyst call, held jointly with Spectra Energy, is scheduled for today, Wednesday, May 4, 2016, at 8 a.m. CT. The webcast will be available via the Spectra Energy and Spectra Energy Partners Investors pages. The conference call can be accessed by dialing (888) 252-3715 in the U.S. or Canada, or (706) 634-8942 internationally. The conference ID is 70917861 or "Spectra Energy / Spectra Energy Partners Earnings Call."
A replay of the call will be available until 5 p.m. CT on Friday, June 3, 2016, by dialing (800) 585-8367 in the U.S. or Canada, or (404) 537-3406 internationally, and using the above conference ID. A replay and transcript also will be available via the Spectra Energy and Spectra Energy Partners Investors pages.
Non-GAAP Financial Measures
We use ongoing net income from controlling interests as a measure to evaluate operations of the partnership. This measure is a non-GAAP financial measure as it represents net income from controlling interests, excluding special items. Special items represent certain charges and credits which we believe will not be recurring on a regular basis. We believe that the presentation of ongoing net income from controlling interests provides useful information to investors, as it allows investors to more accurately compare our ongoing performance across periods. The most directly comparable GAAP measure for ongoing net income from controlling interests is net income from controlling interests.
We use earnings from continuing operations before interest, income taxes, and depreciation and amortization (EBITDA) and ongoing EBITDA, non-GAAP financial measures, as performance measures for Spectra Energy Partners, LP. Ongoing EBITDA represents EBITDA excluding special items. We believe that the presentation of EBITDA and ongoing EBITDA provides useful information to investors, as it allows investors to more accurately compare Spectra Energy Partners, LP's performance across periods. The most directly comparable GAAP measure for EBITDA and ongoing EBITDA for Spectra Energy Partners, LP is net income.
The primary performance measure used by us to evaluate segment performance is segment EBITDA. We consider segment EBITDA, which is the GAAP measure used to report segment results, to be a good indicator of each segment's operating performance from its continuing operations as it represents the results of our segments' operations before depreciation and amortization without regard to financing methods or capital structures. Our segment EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate EBITDA in the same manner.
We also use ongoing segment EBITDA as a measure of performance. Ongoing segment EBITDA is a non-GAAP financial measure, as it represents reported segment EBITDA, excluding special items. We believe that the presentation of ongoing segment EBITDA provides useful information to investors, as it allows investors to more accurately compare a segment's ongoing performance across periods. The most directly comparable GAAP measure for ongoing segment EBITDA is segment EBITDA.
We have also presented Distributable Cash Flow (DCF), which is a non-GAAP financial measure. We believe that the presentation of DCF provides useful information to investors, as it represents the cash generation capabilities of the partnership to support distribution growth. The most directly comparable GAAP measure for DCF is net income. We also use DCF coverage, which is a non-GAAP financial measure, as it represents DCF divided by distributions declared on partnership units. The most directly comparable GAAP measure for DCF coverage is Earnings-Per-Unit (EPU).
The non-GAAP financial measures presented in this press release should not be considered in isolation or as an alternative to financial measures presented in accordance with GAAP. These non-GAAP financial measures may not be comparable to similarly titled measures of other partnerships because other partnerships may not calculate these measures in the same manner.
Forward-Looking Statements
This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on our beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an effect on rate structure, and affect the speed at and degree to which competition enters the natural gas and oil industries; outcomes of litigation and regulatory investigations, proceedings or inquiries; weather and other natural phenomena, including the economic, operational and other effects of hurricanes and storms; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; general economic conditions, including the risk of a prolonged economic slowdown or decline, or the risk of delay in a recovery, which can affect the long-term demand for natural gas and oil and related services; potential effects arising from terrorist attacks and any consequential or other hostilities; changes in environmental, safety and other laws and regulations; the development of alternative energy resources; results and costs of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general market and economic conditions; increases in the cost of goods and services required to complete capital projects; declines in the market prices of equity and debt securities and resulting funding requirements for defined benefit pension plans; growth in opportunities, including the timing and success of efforts to develop U.S. and Canadian pipeline, storage, gathering, processing and other related infrastructure projects and the effects of competition; the performance of natural gas and oil transmission and storage, distribution, and gathering and processing facilities; the extent of success in connecting natural gas and oil supplies to gathering, processing and transmission systems and in connecting to expanding gas and oil markets; the effects of accounting pronouncements issued periodically by accounting standard-setting bodies; conditions of the capital markets during the periods covered by forward-looking statements; and the ability to successfully complete merger, acquisition or divestiture plans; regulatory or other limitations imposed as a result of a merger, acquisition or divestiture; and the success of the business following a merger, acquisition or divestiture. These factors, as well as additional factors that could affect our forward-looking statements, are described under the headings "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Information" in our 2014 Form 10-K, filed on February 27, 2015, and in our other filings made with the Securities and Exchange Commission (SEC), which are available via the SEC's website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. All forward-looking statements in this release are made as of the date hereof and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Spectra Energy Partners, LP (NYSE: SEP) is a Houston-based master limited partnership, formed by Spectra Energy Corp (NYSE: SE). SEP is one of the largest pipeline MLPs in the United States and connects growing supply areas to high-demand markets for natural gas and crude oil. These assets include more than 15,000 miles of transmission and gathering pipelines, approximately 170 billion cubic feet of natural gas storage, and approximately 4.8 million barrels of crude oil storage.
Spectra Energy Partners, LP | ||||||||
Quarterly Highlights | ||||||||
March 2016 | ||||||||
(Unaudited) | ||||||||
(In millions, except per-unit amounts) | ||||||||
Reported - These results include the impact of special items | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2016 |
2015 | |||||||
INCOME |
||||||||
Operating Revenues |
$ |
624 |
$ |
606 |
||||
Total Reportable Segment EBITDA |
467 |
453 |
||||||
Net Income - Controlling Interests |
298 |
293 |
||||||
EBITDA BY BUSINESS SEGMENT |
||||||||
U.S. Transmission |
$ |
411 |
$ |
389 |
||||
Liquids |
56 |
64 |
||||||
Total Reportable Segment EBITDA |
467 |
453 |
||||||
Other EBITDA |
(20) |
(17) |
||||||
Total Reportable Segment and Other EBITDA |
$ |
447 |
$ |
436 |
||||
PARTNERS' CAPITAL |
||||||||
Declared Cash Distribution per Limited Partner Unit |
$ |
0.65125 |
$ |
0.60125 |
||||
Weighted Average Units Outstanding |
||||||||
Limited Partner Units |
285 |
295 |
||||||
General Partner Units |
6 |
6 |
||||||
DISTRIBUTABLE CASH FLOW |
||||||||
Distributable Cash Flow |
$ |
371 |
$ |
354 |
||||
CAPITAL AND INVESTMENT EXPENDITURES (a) |
||||||||
Capital expenditures - U.S. Transmission |
$ |
452 |
$ |
233 |
||||
Capital expenditures - Liquids |
16 |
7 |
||||||
Investment expenditures - Sand Hills/Southern Hills/SESH/Penn East/Nexus |
27 |
15 |
||||||
Total |
$ |
495 |
$ |
255 |
||||
U.S. TRANSMISSION |
||||||||
Operating Revenues |
$ |
538 |
$ |
522 |
||||
Operating Expenses |
||||||||
Operating, Maintenance and Other |
172 |
171 |
||||||
Other Income and Expenses |
45 |
38 |
||||||
EBITDA |
$ |
411 |
$ |
389 |
||||
LIQUIDS |
||||||||
Operating Revenues |
$ |
86 |
$ |
84 |
||||
Operating Expenses |
||||||||
Operating, Maintenance and Other |
31 |
34 |
||||||
Other Income and Expenses |
1 |
14 |
||||||
EBITDA |
$ |
56 |
$ |
64 |
||||
Express Pipeline Revenue Receipts, MBbl/d (b) |
233 |
246 |
||||||
Platte PADD II Deliveries, MBbl/d |
124 |
169 |
||||||
Canadian Dollar Exchange Rate, Average |
1.37 |
1.24 |
||||||
March 31, |
December 31, | |||||||
2016 |
2015 | |||||||
Debt |
$ |
6,951 |
$ |
6,604 |
||||
Actual Units Outstanding (c) |
293 |
291 |
||||||
(a) Excludes contributions received from noncontrolling interests of $95 million in 2016 and $58 million in 2015. | ||||||||
(b) Thousand barrels per day. | ||||||||
(c) Increase in 2016 resulted primarily from the "At the Market" equity issuance program |
Spectra Energy Partners, LP | |||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||
(Unaudited) | |||||||||||||||
(In millions) | |||||||||||||||
Reported - These results include the impact of special items | |||||||||||||||
Quarters Ended |
|||||||||||||||
2016 |
2015 |
||||||||||||||
Operating Revenues |
$ |
624 |
$ |
606 |
|||||||||||
Operating Expenses |
300 |
295 |
|||||||||||||
Operating Income |
324 |
311 |
|||||||||||||
Other Income and Expenses |
47 |
49 |
|||||||||||||
Interest Expense |
56 |
57 |
|||||||||||||
Earnings Before Income Taxes |
315 |
303 |
|||||||||||||
Income Tax Expense |
4 |
2 |
|||||||||||||
Net Income |
311 |
301 |
|||||||||||||
Net Income - Noncontrolling Interests |
13 |
8 |
|||||||||||||
Net Income - Controlling Interests |
$ |
298 |
$ |
293 |
Spectra Energy Partners, LP | |||||||||||
Condensed Consolidated Balance Sheets | |||||||||||
(Unaudited) | |||||||||||
(In millions) | |||||||||||
March 31, |
December 31, | ||||||||||
2016 |
2015 | ||||||||||
ASSETS |
|||||||||||
Current Assets |
$ |
585 |
$ |
544 |
|||||||
Investments and Other Assets |
4,231 |
4,180 |
|||||||||
Net Property, Plant and Equipment |
14,257 |
13,837 |
|||||||||
Regulatory Assets and Deferred Debits |
309 |
290 |
|||||||||
Total Assets |
$ |
19,382 |
$ |
18,851 |
|||||||
LIABILITIES AND EQUITY |
|||||||||||
Current Liabilities |
$ |
1,719 |
$ |
1,471 |
|||||||
Long-term Debt |
5,862 |
5,845 |
|||||||||
Deferred Credits and Other Liabilities |
194 |
189 |
|||||||||
Equity |
11,607 |
11,346 |
|||||||||
Total Liabilities and Equity |
$ |
19,382 |
$ |
18,851 |
Spectra Energy Partners, LP | |||||||||
Distributable Cash Flow | |||||||||
(Unaudited) | |||||||||
(Dollars in Millions, except where noted) | |||||||||
Three Months | |||||||||
2016 |
2015 | ||||||||
Net Income |
$ |
311 |
$ |
301 |
|||||
Add: |
|||||||||
Interest expense |
56 |
57 |
|||||||
Income tax expense |
4 |
2 |
|||||||
Depreciation and amortization |
77 |
73 |
|||||||
Foreign currency (gain) loss |
(1) |
3 |
|||||||
EBITDA |
447 |
436 |
|||||||
Add: |
|||||||||
Earnings from equity investments |
(27) |
(40) |
|||||||
Distributions from equity investments (a) |
65 |
54 |
|||||||
Non-cash impairment at Ozark Gas Gathering |
— |
9 |
|||||||
Other |
2 |
3 |
|||||||
Less: |
|||||||||
Interest expense |
56 |
57 |
|||||||
Equity AFUDC |
17 |
11 |
|||||||
Net cash paid for income taxes |
1 |
5 |
|||||||
Distributions to non-controlling interests |
7 |
7 |
|||||||
Maintenance capital expenditures |
35 |
28 |
|||||||
Total Distributable Cash Flow |
$ |
371 |
$ |
354 |
|||||
(a) Excludes $2 million of distributions from equity investments for the three month period ended March 31, 2015. |
Spectra Energy Partners, LP |
|||||||
Reported to Ongoing Earnings Reconciliation |
|||||||
March 2016 Year-to-date |
|||||||
(Unaudited) |
|||||||
(In millions) |
|||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND |
Reported/ Ongoing |
||||||
U.S. Transmission |
$ |
411 |
|||||
Liquids |
56 |
||||||
Total Reportable Segment EBITDA |
467 |
||||||
Other |
(20) |
||||||
Total Reportable Segment and other EBITDA |
$ |
447 |
|||||
EARNINGS |
|||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
447 |
|||||
Depreciation and Amortization |
(77) |
||||||
Interest Expense |
(56) |
||||||
Other Income and Expenses |
1 |
||||||
Income Tax Expense |
(4) |
||||||
Total Net Income |
311 |
||||||
Total Net Income - Noncontrolling Interests |
(13) |
||||||
Total Net Income - Controlling Interests |
$ |
298 |
|||||
Spectra Energy Partners, LP |
|||||||||||||||
Reported to Ongoing Earnings Reconciliation |
|||||||||||||||
March 2015 Year-to-date |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(In millions) |
|||||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND |
Reported Earnings |
Less: Special |
Ongoing Earnings |
||||||||||||
U.S. Transmission |
$ |
389 |
$ |
(9) |
A |
$ |
398 |
||||||||
Liquids |
64 |
— |
64 |
||||||||||||
Total Reportable Segment EBITDA |
453 |
(9) |
462 |
||||||||||||
Other |
(17) |
— |
(17) |
||||||||||||
Total Reportable Segment and other EBITDA |
$ |
436 |
$ |
(9) |
$ |
445 |
|||||||||
EARNINGS |
|||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
436 |
$ |
(9) |
$ |
445 |
|||||||||
Depreciation and Amortization |
(73) |
— |
(73) |
||||||||||||
Interest Expense |
(57) |
— |
(57) |
||||||||||||
Other Income and Expenses |
(3) |
— |
(3) |
||||||||||||
Income Tax Expense |
(2) |
— |
(2) |
||||||||||||
Total Net Income |
301 |
(9) |
310 |
||||||||||||
Total Net Income - Noncontrolling Interests |
(8) |
— |
(8) |
||||||||||||
Total Net Income - Controlling Interests |
$ |
293 |
$ |
(9) |
$ |
302 |
|||||||||
A - Non-cash impairment at Ozark Gas Gathering. |
|||||||||||||||
Spectra Energy Partners, LP Reported to Ongoing Distributable Cash Flow Reconciliation Unaudited (In millions) Three Months Ended March 31, 2016 March 31, 2015 Reported/ Reported Less: Ongoing Net Income $ 311 $ 301 $ (9) $ 310 Add: Interest expense 56 57 - 57 Income tax expense 4 2 - 2 Depreciation and amortization 77 73 - 73 Foreign currency loss (1) 3 - 3 EBITDA 447 436 (9) 445 Add: Earnings from equity investments (27) (40) - (40) Distributions from equity investments 65 54 - 54 Non-cash impairment at Ozark Gas Gathering - 9 9 - Other 2 3 - 3 Less: Interest expense 56 57 - 57 Equity AFUDC 17 11 - 11 Net cash paid for income taxes 1 5 - 5 Distributions to non-controlling interests 7 7 - 7 Maintenance capital expenditures 35 28 - 28 Total Distributable Cash Flow $ 371 $ 354 $ - $ 354
Ongoing
Special Items
Logo - http://photos.prnewswire.com/prnh/20071107/CLW064
SOURCE Spectra Energy Partners, LP
HOUSTON, May 4, 2016 /PRNewswire/ --
First Quarter Highlights:
Spectra Energy Corp (NYSE: SE) today reported first quarter 2016 financial results. For the quarter, ongoing earnings before interest, taxes, depreciation and amortization (EBITDA) were $757 million, compared with $788 million in the prior-year quarter.
Distributable cash flow (DCF) for the quarter was $523 million, compared with $578 million in the same quarter last year.
Ongoing net income from controlling interests was $238 million, or $0.35 diluted earnings per share (EPS), compared with $274 million, or $0.41 diluted EPS in first quarter 2015. Reported net income from controlling interests was $234 million, or $0.35 diluted EPS, compared with $267 million, or $0.40 diluted EPS in first quarter 2015.
CEO COMMENT
"Spectra Energy's solid first quarter results are very much in line with our full year expectations. Our businesses generated strong earnings and cash flow despite continued headwinds in the sector. These results, which illustrate our stable, reliable and disciplined business model, continue to give us confidence in our ability to deliver on the plan we outlined to investors in February," said Greg Ebel, chief executive officer, Spectra Energy.
"Spectra Energy benefits from the flexibility of multiple financing options across the corporation. This allows us to access capital markets at favorable rates and fund our $8 billion of secured expansion projects, as demonstrated by our recent successful equity raises. Those expansion projects are advancing as planned, and we continue to make great progress on projects under development. Most notably, we moved closer to placing Access Northeast – our solution to lower electricity costs and improve electric reliability in New England – into execution," continued Ebel.
SEGMENT RESULTS
Spectra Energy Partners
Ongoing EBITDA from Spectra Energy Partners was $473 million in first quarter 2016, compared with $464 million in first quarter 2015. The 2015 period excludes a non-cash special item expense of $9 million. These results reflect increased earnings from expansion projects in our natural gas transmission business, partially offset by lower interruptible and short-term contract transportation revenue due to warmer weather and the absence of equity earnings from Sand Hills and Southern Hills natural gas liquids (NGL) pipelines, which Spectra Energy Partners owned until October 2015. Earnings from these NGL pipeline interests are now reflected in the Field Services segment.
Distribution
Distribution reported first quarter 2016 EBITDA of $170 million, compared with $192 million in first quarter 2015. This decrease was mainly due to the effect of a lower Canadian dollar and warmer weather, partially offset by incremental earnings from the 2015 Dawn-Parkway expansion project.
Western Canada Transmission & Processing
Western Canada Transmission & Processing reported first quarter 2016 EBITDA of $123 million, compared with $161 million in first quarter 2015. The segment's results reflect the effect of a lower Canadian dollar and lower earnings at Empress, largely due to changes in non-cash mark-to-market commodity-related pricing adjustments associated with the risk management program.
Field Services
Ongoing EBITDA from Field Services was $10 million in first quarter 2016, compared with $(14) million in first quarter 2015. The ongoing results exclude non-cash special item expenses of $7 million in 2016 and a special item expense of $3 million in 2015. Results for the quarter reflect higher earnings attributable to expansions and favorable contract realignment efforts, including a settlement with a producer that DCP announced earlier in the year. These increases were partially offset by lower commodity prices and volume declines in certain geographic regions.
During the first quarters of 2016 and 2015, respectively, NGL prices averaged $0.37 per gallon versus $0.49 per gallon, NYMEX natural gas averaged $2.09 per million British thermal units (MMBtu) versus $2.98 per MMBtu, and crude oil averaged approximately $33 per barrel versus $49 per barrel.
Other
"Other" reported net expenses of $19 million in first quarter 2016, compared with $15 million in first quarter 2015, reflecting higher corporate costs, including employee benefits costs. "Other" primarily consists of corporate expenses, including benefits and captive insurance.
Income Tax Expense
Income tax expense was $98 million in first quarter 2016, compared with $101 million in first quarter 2015, reflecting lower earnings. The effective tax rate was 24 percent in the first quarter of both 2016 and 2015.
Interest Expense
Interest expense was $151 million in first quarter 2016, compared with $159 million in first quarter 2015, reflecting higher capitalized interest and a lower Canadian dollar, partially offset by higher average long-term debt balances.
Foreign Currency
Net income from controlling interests for the quarter was lower by $14 million due to a lower Canadian dollar.
Liquidity and Capital Expenditures
Total debt outstanding at Spectra Energy as of March 31, 2016, was $15.0 billion, with available liquidity of $2.7 billion. Including contributions from noncontrolling interests, Spectra Energy has $3.0 billion of capital expansion spending planned in 2016, $1.8 billion of which will be at Spectra Energy Partners.
Through its newly initiated "At the Market" (ATM) equity issuance program, Spectra Energy has received net proceeds of $383 million this year.
In April 2016, Spectra Energy issued 16.1 million common shares to the public for total net proceeds of $479 million. The proceeds were used to purchase 10.4 million common units from Spectra Energy Partners.
Including contributions from noncontrolling interests of $95 million, total capital spending in first quarter 2016 was $596 million, composed of $508 million of growth capital expenditures and $88 million of maintenance capital expenditures.
EXPANSION PROJECT UPDATES
Spectra Energy continues to make progress on securing $35 billion in new projects by the end of the decade. At the end of first quarter 2016, the company had:
$10.2 billion – in service and delivering solid cash flows
$8.3 billion – in execution, including ~ $2 billion scheduled for 2016 in-service
$20+ billion – in development
Spectra Energy Partners
Spectra Energy Partners has advanced numerous projects across the system. Sabal Trail, a joint venture with NextEra Energy and Duke Energy, received its Certificate of Public Convenience and Necessity from the Federal Energy Regulatory Commission (FERC) in February. This approval authorizes Sabal Trail, subject to certain conditions, to proceed with construction in order to meet a May 2017 in-service date. On April 1, 2016, Sabal Trail ownership agreements were finalized with Spectra Energy Partners, NextEra Energy and Duke Energy owning 50 percent, 42.5 percent and 7.5 percent respectively.
The NEXUS project, a joint venture with DTE Energy, will allow customers to move up to 1.5 billion cubic feet per day (Bcf/d) to Ohio and Michigan markets with access to the Dawn Hub, which is the second largest physically traded gas hub in North America and is owned and operated by Union Gas. NEXUS has a strong customer base and is moving forward with support from executed customer agreements with local distribution companies (LDCs), as well as Marcellus and Utica producers.
NEXUS has also signed 13 interconnect agreements with industrial facilities and power generators that could connect incremental load across Northern Ohio of up to 1.75 Bcf/d, which demonstrates strong long-term market support for our route and the project. NEXUS has consistently met its milestones and is on target for a November 2017 in-service date.
The AIM project is now in its second year of construction and more than 60 percent complete. AIM is supported by New England LDCs and is scheduled to meet its planned in-service date in fourth quarter 2016.
Advancements continue in our other projects in execution. Projects on track for in-service dates in 2016 include Loudon Expansion, which received its FERC certificate and commenced construction in March, Ozark, Salem Lateral and the first phase of Gulf Markets. Projects scheduled to go into service in 2017 include Atlantic Bridge, Access South, Adair Southwest, Lebanon Extension, TEAL and the second phase of Gulf Markets.
The PennEast project continues to move forward, and received its notice of schedule from FERC in March. The project has an expected in-service date in the second half of 2018.
Access Northeast, a project under development with Eversource Energy and National Grid, is focused on the New England electric power market and saving consumers money while improving the reliability of the region's energy system. In normal weather conditions, the project could save electric consumers an average of $1 billion a year. Savings during the extreme 2013-2014 winter could have been $2.5 billion with Access Northeast in service.
This solution is designed to meet the needs of New England by maximizing use of existing utility corridors and the Algonquin and Maritimes & Northeast pipelines, which directly connect to more than 60 percent of the existing ISO-New England gas-fired electric generation capacity and more than 80 percent of the new capacity that has recently cleared the ISO-New England forward capacity market. Access Northeast will cost-effectively deliver affordable natural gas when power generators need it, with new tariff services to handle peak hours, seasonal needs, and quick starts to support intermittent wind and solar energy.
Access Northeast has executed contracts with electric distribution companies in New Hampshire and Massachusetts totaling more than 50 percent of the 0.9 Bcf/d project design capacity, and processes are under way at state public utility commissions, which are required to approve those contracts. The project anticipates additional contracts as regulatory processes progress in Connecticut, Rhode Island and Maine.
In April, FERC issued the Notice of Intent to prepare an Environmental Impact Statement for the Access Northeast project, which initiates the formal scoping process FERC utilizes to gather input from the public and interested agencies on the project. The project continues to advance toward a late 2018 initial in-service date, and Spectra Energy Partners expects to move Access Northeast into execution later this year.
In the liquids business, the Express Enhancement project is supported by long-term contracts and is on schedule for completion by the end of 2016.
Distribution
Union Gas' Dawn storage hub and mainline transmission system continues to expand and is increasingly important in supplying gas to eastern Canada and the U.S. Northeast.
The 2016 and 2017 Dawn Parkway expansions are in construction and are on schedule for their respective in-service dates. Construction has also commenced on the Burlington-Oakville expansion, which is expected to be in service later this year.
Western Canada Transmission & Processing
Two expansion projects on the company's BC Pipeline in Western Canada are underpinned by long-term contracts with Montney producers. The High Pine project will add capacity through pipeline looping and compression, delivering an additional 240 million cubic feet per day (MMcf/d) of capacity growth, with an expected in-service date of late 2016. The project application was filed for approval with Canada's National Energy Board (NEB) in fourth quarter 2015. Wyndwood will add 50 MMcf/d of capacity through the addition of pipeline looping and compressor station modifications, with an expected in-service date of 2018.
The Jackfish Lake project is proceeding on schedule to be in service in 2017; the project application was filed with the NEB in fourth quarter 2015.
The RAM project will increase reliability and maintainability on our fully contracted 1.5 Bcf/d T-South system, is proceeding on schedule, and will phase in from 2016 through 2018. Upon completion, RAM will allow significantly higher summer load factors than previous years to meet increased demands for low-cost British Columbia production in the Pacific Northwest.
Additional Information
Additional information about first quarter 2016 earnings can be obtained via the Spectra Energy website: www.spectraenergy.com.
The analyst call, held jointly with Spectra Energy Partners, is scheduled for today, Wednesday, May 4, 2016, at 8 a.m. CT. The webcast will be available via the Spectra Energy and Spectra Energy Partners Investors pages. The conference call can be accessed by dialing (888) 252-3715 in the U.S. or Canada, or (706) 634-8942 internationally. The conference ID is 70917861 or "Spectra Energy / Spectra Energy Partners Earnings Call."
A replay of the call will be available until 5 p.m. CT on Friday, June 3, 2016, by dialing (800) 585-8367 in the U.S. or Canada, or (404) 537-3406 internationally, and using the above conference ID. A replay and transcript also will be available via the Spectra Energy and Spectra Energy Partners Investors pages.
Non-GAAP Financial Measures
We use ongoing net income from controlling interests and ongoing diluted EPS as measures to evaluate operations of the company. These measures are non-GAAP financial measures as they represent net income from controlling interests and diluted EPS, excluding special items. Special items represent certain charges and credits which we believe will not be recurring on a regular basis. We believe that the presentation of ongoing net income from controlling interests and ongoing diluted EPS provides useful information to investors, as it allows investors to more accurately compare our ongoing performance across periods. The most directly comparable GAAP measures for ongoing net income from controlling interests and ongoing diluted EPS are net income from controlling interests and diluted EPS.
We use earnings from continuing operations before interest, income taxes, and depreciation and amortization (EBITDA) and ongoing EBITDA, non-GAAP financial measures, as performance measures for Spectra Energy Corp. Ongoing EBITDA represents EBITDA excluding special items. We believe that the presentation of EBITDA and ongoing EBITDA provides useful information to investors, as it allows investors to more accurately compare Spectra Energy Corp's performance across periods. The most directly comparable GAAP measure for EBITDA and ongoing EBITDA for Spectra Energy Corp is net income.
The primary performance measure used by us to evaluate segment performance is segment EBITDA. We consider segment EBITDA, which is the GAAP measure used to report segment results, to be a good indicator of each segment's operating performance from its continuing operations as it represents the results of our segments' operations before depreciation and amortization without regard to financing methods or capital structures. Our segment EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate EBITDA in the same manner.
We also use ongoing segment EBITDA and ongoing Other EBITDA (net expenses) as measures of performance. Ongoing segment EBITDA and ongoing Other EBITDA are non-GAAP financial measures, as they represent segment EBITDA and Other EBITDA, excluding special items. We believe that the presentation of ongoing segment EBITDA and ongoing Other EBITDA provides useful information to investors, as it allows investors to more accurately compare a segment's or Other's ongoing performance across periods. The most directly comparable GAAP measures for ongoing segment EBITDA and ongoing Other EBITDA are segment EBITDA and Other EBITDA.
We have also presented Distributable Cash Flow (DCF), which is a non-GAAP financial measure. We believe that the presentation of DCF provides useful information to investors, as it represents the cash generation capabilities of the company to support dividend growth. We also use ongoing DCF, which is a non-GAAP financial measure, as it represents DCF excluding the cash effect of special items. The most directly comparable GAAP measure for DCF and ongoing DCF is net income. We also use DCF coverage, which is a non-GAAP financial measure, as it represents DCF divided by dividends declared on common stock. The most directly comparable GAAP measure for DCF coverage is EPS.
The non-GAAP financial measures presented in this press release should not be considered in isolation or as an alternative to financial measures presented in accordance with GAAP. These non-GAAP financial measures may not be comparable to similarly titled measures of other companies because other companies may not calculate these measures in the same manner.
Forward-Looking Statements
This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on our beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an effect on rate structure, and affect the speed at and degree to which competition enters the natural gas and oil industries; outcomes of litigation and regulatory investigations, proceedings or inquiries; weather and other natural phenomena, including the economic, operational and other effects of hurricanes and storms; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; general economic conditions, including the risk of a prolonged economic slowdown or decline, or the risk of delay in a recovery, which can affect the long-term demand for natural gas and oil and related services; potential effects arising from terrorist attacks and any consequential or other hostilities; changes in environmental, safety and other laws and regulations; the development of alternative energy resources; results and costs of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general market and economic conditions; increases in the cost of goods and services required to complete capital projects; declines in the market prices of equity and debt securities and resulting funding requirements for defined benefit pension plans; growth in opportunities, including the timing and success of efforts to develop U.S. and Canadian pipeline, storage, gathering, processing and other related infrastructure projects and the effects of competition; the performance of natural gas and oil transmission and storage, distribution, and gathering and processing facilities; the extent of success in connecting natural gas and oil supplies to gathering, processing and transmission systems and in connecting to expanding gas and oil markets; the effects of accounting pronouncements issued periodically by accounting standard-setting bodies; conditions of the capital markets during the periods covered by forward-looking statements; and the ability to successfully complete merger, acquisition or divestiture plans; regulatory or other limitations imposed as a result of a merger, acquisition or divestiture; and the success of the business following a merger, acquisition or divestiture. These factors, as well as additional factors that could affect our forward-looking statements, are described under the headings "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Information" in our 2014 Form 10-K, filed on February 27, 2015, and in our other filings made with the Securities and Exchange Commission (SEC), which are available via the SEC's website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. All forward-looking statements in this release are made as of the date hereof and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include more than 21,000 miles of natural gas, natural gas liquids, and crude oil pipelines; approximately 300 billion cubic feet (Bcf) of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com and www.spectraenergypartners.com.
Spectra Energy Corp | ||||||||
Quarterly Highlights | ||||||||
March 2016 | ||||||||
(Unaudited) | ||||||||
(In millions, except per-share amounts and where noted) | ||||||||
Reported - These results include the impact of special items | ||||||||
Three Months | ||||||||
2016 |
2015 | |||||||
COMMON STOCK DATA |
||||||||
Earnings Per Share, Diluted |
$ |
0.35 |
$ |
0.40 |
||||
Dividends Per Share |
$ |
0.405 |
$ |
0.370 |
||||
Weighted-Average Shares Outstanding, Diluted |
675 |
673 |
||||||
INCOME |
||||||||
Operating Revenues |
$ |
1,384 |
$ |
1,623 |
||||
Total Reportable Segment EBITDA |
769 |
791 |
||||||
Net Income - Controlling Interests |
234 |
267 |
||||||
EBITDA BY BUSINESS SEGMENT |
||||||||
Spectra Energy Partners |
$ |
473 |
$ |
455 |
||||
Distribution |
170 |
192 |
||||||
Western Canada Transmission & Processing |
123 |
161 |
||||||
Field Services |
3 |
(17) |
||||||
Total Reportable Segment EBITDA |
769 |
791 |
||||||
Other EBITDA |
(19) |
(15) |
||||||
Total Reportable Segment and Other EBITDA |
$ |
750 |
$ |
776 |
||||
DISTRIBUTABLE CASH FLOW |
||||||||
Distributable Cash Flow |
$ |
523 |
$ |
578 |
||||
CAPITAL AND INVESTMENT EXPENDITURES |
||||||||
Spectra Energy Partners (a) |
$ |
495 |
$ |
255 |
||||
Distribution |
125 |
89 |
||||||
Western Canada Transmission & Processing |
62 |
45 |
||||||
Other |
9 |
14 |
||||||
Total Capital and Investment Expenditures (a) |
$ |
691 |
$ |
403 |
||||
Expansion and Investment (a) |
$ |
603 |
$ |
316 |
||||
Maintenance and Other |
88 |
87 |
||||||
Total Capital and Investment Expenditures (a) |
$ |
691 |
$ |
403 |
||||
March 31, |
December 31, | |||||||
2016 |
2015 | |||||||
CAPITALIZATION |
||||||||
Common Equity - Controlling Interests |
27.9 |
% |
26.6 |
% | ||||
Noncontrolling Interests and Preferred Stock |
13.7 |
% |
13.6 |
% | ||||
Total Debt |
58.4 |
% |
59.8 |
% | ||||
Total Debt |
$ |
14,993 |
$ |
14,656 |
||||
Book Value Per Share (b) |
$ |
10.47 |
$ |
9.73 |
||||
Actual Shares Outstanding (c) |
684 |
671 |
||||||
(a) Excludes contributions received from noncontrolling interests of $95 million in 2016 and $58 million in 2015. | ||||||||
(b) Represents controlling interests. |
||||||||
(c) Increase in 2016 resulted primarily from a newly initiated "At the Market" equity issuance program |
Spectra Energy Corp | ||||||||
Quarterly Highlights | ||||||||
March 2016 | ||||||||
(Unaudited) | ||||||||
(In millions, except where noted) | ||||||||
Reported - These results include the impact of special items | ||||||||
Three Months | ||||||||
2016 |
2015 | |||||||
SPECTRA ENERGY PARTNERS |
||||||||
Operating Revenues |
$ |
624 |
$ |
606 |
||||
Operating Expenses |
||||||||
Operating, Maintenance and Other |
205 |
207 |
||||||
Other Income and Expenses |
54 |
56 |
||||||
EBITDA |
$ |
473 |
$ |
455 |
||||
Express Pipeline Revenue Receipts, MBbl/d (a) |
233 |
246 |
||||||
Platte PADD II Deliveries, MBbl/d |
124 |
169 |
||||||
DISTRIBUTION |
||||||||
Operating Revenues |
$ |
465 |
$ |
662 |
||||
Operating Expenses |
||||||||
Natural Gas Purchased |
215 |
383 |
||||||
Operating, Maintenance and Other |
82 |
86 |
||||||
Other Income and Expenses |
2 |
(1) |
||||||
EBITDA |
$ |
170 |
$ |
192 |
||||
Number of Customers, Thousands |
1,441 |
1,422 |
||||||
Heating Degree Days, Fahrenheit |
3,315 |
4,259 |
||||||
Pipeline Throughput, TBtu (b) |
230 |
328 |
||||||
Canadian Dollar Exchange Rate, Average |
1.37 |
1.24 |
||||||
WESTERN CANADA TRANSMISSION & PROCESSING |
||||||||
Operating Revenues |
$ |
305 |
$ |
370 |
||||
Operating Expenses |
||||||||
Natural Gas and Petroleum Products Purchased |
48 |
67 |
||||||
Operating, Maintenance and Other |
137 |
147 |
||||||
Other Income and Expenses |
3 |
5 |
||||||
EBITDA |
$ |
123 |
$ |
161 |
||||
Pipeline Throughput, TBtu |
252 |
256 |
||||||
Volumes Processed, TBtu |
176 |
180 |
||||||
Canadian Dollar Exchange Rate, Average |
1.37 |
1.24 |
||||||
FIELD SERVICES |
||||||||
Earnings (loss) from Equity Investment in DCP Midstream, LLC |
$ |
3 |
$ |
(17) |
||||
Natural Gas Gathered and Processed/Transported, TBtu/day (c) |
6.9 |
7.1 |
||||||
Natural Gas Liquids Production, MBbl/d (c) |
382 |
399 |
||||||
Average Natural Gas Price Per MMBtu (d) |
$ |
2.09 |
$ |
2.98 |
||||
Average Natural Gas Liquids Price Per Gallon (e) |
$ |
0.37 |
$ |
0.49 |
||||
Average Crude Oil Price Per Barrel (f) |
$ |
33.45 |
$ |
48.63 |
||||
(a) Thousand barrels per day. |
||||||||
(b) Trillion British thermal units. |
||||||||
(c) Reflects 100% of DCP Midstream volumes. |
||||||||
(d) Million British thermal units. Average price based on NYMEX Henry Hub. |
||||||||
(e) Does not reflect results of commodity hedges. |
||||||||
(f) Average price based on NYMEX calendar month. |
Spectra Energy Corp | |||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||
(Unaudited) | |||||||||||||||
(In millions) | |||||||||||||||
Reported - These results include the impact of special items | |||||||||||||||
Three Months | |||||||||||||||
2016 |
2015 | ||||||||||||||
Operating Revenues |
$ |
1,384 |
$ |
1,623 |
|||||||||||
Operating Expenses |
890 |
1,082 |
|||||||||||||
Operating Income |
494 |
541 |
|||||||||||||
Other Income and Expenses |
65 |
44 |
|||||||||||||
Interest Expense |
151 |
159 |
|||||||||||||
Earnings Before Income Taxes |
408 |
426 |
|||||||||||||
Income Tax Expense |
98 |
101 |
|||||||||||||
Net Income |
310 |
325 |
|||||||||||||
Net Income - Noncontrolling Interests |
76 |
58 |
|||||||||||||
Net Income - Controlling Interests |
$ |
234 |
$ |
267 |
Spectra Energy Corp | |||||||||||
Condensed Consolidated Balance Sheets | |||||||||||
(Unaudited) | |||||||||||
(In millions) | |||||||||||
March 31, |
December 31, | ||||||||||
2016 |
2015 | ||||||||||
ASSETS |
|||||||||||
Current Assets |
$ |
1,475 |
$ |
1,648 |
|||||||
Investments and Other Assets |
7,182 |
7,056 |
|||||||||
Net Property, Plant and Equipment |
24,019 |
22,918 |
|||||||||
Regulatory Assets and Deferred Debits |
1,415 |
1,301 |
|||||||||
Total Assets |
$ |
34,091 |
$ |
32,923 |
|||||||
LIABILITIES AND EQUITY |
|||||||||||
Current Liabilities |
$ |
3,163 |
$ |
3,392 |
|||||||
Long-term Debt |
13,190 |
12,892 |
|||||||||
Deferred Credits and Other Liabilities |
7,039 |
6,768 |
|||||||||
Preferred Stock of Subsidiaries |
339 |
339 |
|||||||||
Equity |
10,360 |
9,532 |
|||||||||
Total Liabilities and Equity |
$ |
34,091 |
$ |
32,923 |
Spectra Energy Corp | |||||||||
Distributable Cash Flow | |||||||||
(Unaudited) | |||||||||
(In millions) | |||||||||
Three Months | |||||||||
2016 |
2015 | ||||||||
Net Income |
$ |
310 |
$ |
325 |
|||||
Add: |
|||||||||
Interest expense |
151 |
159 |
|||||||
Income tax expense |
98 |
101 |
|||||||
Depreciation and amortization |
193 |
193 |
|||||||
Foreign currency (gain) loss |
(2) |
(1) |
|||||||
Less: |
|||||||||
Third party interest income |
— |
1 |
|||||||
EBITDA |
750 |
776 |
|||||||
Add: |
|||||||||
(Earnings) Loss from equity investments |
(33) |
(24) |
|||||||
Distributions from equity investments (a) |
65 |
54 |
|||||||
Empress non-cash items |
32 |
22 |
|||||||
Non-cash impairment at Ozark Gas Gathering |
— |
9 |
|||||||
Other |
5 |
5 |
|||||||
Less: |
|||||||||
Interest expense |
151 |
159 |
|||||||
Equity AFUDC |
25 |
16 |
|||||||
Net cash paid (refund) for income taxes |
(22) |
(46) |
|||||||
Distributions to non-controlling interests |
54 |
44 |
|||||||
Maintenance capital expenditures |
88 |
91 |
|||||||
Total Distributable Cash Flow |
$ |
523 |
$ |
578 |
|||||
(a) 2015 period excludes $2 million in distributions from equity investments. | |||||||||
Spectra Energy Corp | ||||||||||||||||
Reported to Ongoing Earnings Reconciliation | ||||||||||||||||
March 2016 Year-to-date | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In millions, except per-share amounts) | ||||||||||||||||
Reported Earnings |
Less: Special Items |
Ongoing Earnings | ||||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND DEPRECIATION AND AMORTIZATION |
||||||||||||||||
Spectra Energy Partners |
$ |
473 |
$ |
— |
$ |
473 |
||||||||||
Distribution |
170 |
— |
170 |
|||||||||||||
Western Canada Transmission & Processing |
123 |
— |
123 |
|||||||||||||
Field Services |
3 |
(7) |
A |
10 |
||||||||||||
Total Reportable Segment EBITDA |
769 |
(7) |
776 |
|||||||||||||
Other |
(19) |
— |
(19) |
|||||||||||||
Total Reportable Segment and Other EBITDA |
$ |
750 |
$ |
(7) |
$ |
757 |
||||||||||
EARNINGS |
||||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
750 |
$ |
(7) |
$ |
757 |
||||||||||
Depreciation and Amortization |
(193) |
— |
(193) |
|||||||||||||
Interest Expense |
(151) |
— |
(151) |
|||||||||||||
Interest Income and Other |
2 |
— |
2 |
|||||||||||||
Income Tax Expense |
(98) |
3 |
(101) |
|||||||||||||
Total Net Income |
310 |
(4) |
314 |
|||||||||||||
Total Net Income - Noncontrolling Interests |
(76) |
— |
(76) |
|||||||||||||
Total Net Income - Controlling Interests |
$ |
234 |
$ |
(4) |
$ |
238 |
||||||||||
EARNINGS PER SHARE, BASIC |
$ |
0.35 |
$ |
— |
$ |
0.35 |
||||||||||
EARNINGS PER SHARE, DILUTED |
$ |
0.35 |
$ |
— |
$ |
0.35 |
||||||||||
A - Non-cash asset impairments and write-offs. | ||||||||||||||||
Weighted Average Shares (reported and ongoing) - in millions |
||||||||||||||||
Basic |
674 |
|||||||||||||||
Diluted |
675 |
Spectra Energy Corp | |||||||||||||||
Reported to Ongoing Earnings Reconciliation | |||||||||||||||
March 2015 Year-to-date | |||||||||||||||
(Unaudited) | |||||||||||||||
(In millions, except per-share amounts) | |||||||||||||||
Reported Earnings |
Less: |
Ongoing Earnings | |||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND DEPRECIATION AND AMORTIZATION |
|||||||||||||||
Spectra Energy Partners |
$ |
455 |
$ |
(9) |
A |
$ |
464 |
||||||||
Distribution |
192 |
— |
192 |
||||||||||||
Western Canada Transmission & Processing |
161 |
— |
161 |
||||||||||||
Field Services |
(17) |
(3) |
B |
(14) |
|||||||||||
Total Reportable Segment EBITDA |
791 |
(12) |
803 |
||||||||||||
Other |
(15) |
— |
(15) |
||||||||||||
Total Reportable Segment and Other EBITDA |
$ |
776 |
$ |
(12) |
$ |
788 |
|||||||||
EARNINGS |
|||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
776 |
$ |
(12) |
$ |
788 |
|||||||||
Depreciation and Amortization |
(193) |
— |
(193) |
||||||||||||
Interest Expense |
(159) |
— |
(159) |
||||||||||||
Interest Income and Other |
2 |
— |
2 |
||||||||||||
Income Tax Expense |
(101) |
4 |
(105) |
||||||||||||
Total Net Income |
325 |
(8) |
333 |
||||||||||||
Total Net Income - Noncontrolling Interests |
(58) |
1 |
(59) |
||||||||||||
Total Net Income - Controlling Interests |
$ |
267 |
$ |
(7) |
$ |
274 |
|||||||||
EARNINGS PER SHARE, BASIC |
$ |
0.40 |
$ |
(0.01) |
$ |
0.41 |
|||||||||
EARNINGS PER SHARE, DILUTED |
$ |
0.40 |
$ |
(0.01) |
$ |
0.41 |
|||||||||
A - Non-cash impairment at Ozark Gas Gathering. | |||||||||||||||
B - Overhead reduction costs. | |||||||||||||||
Weighted Average Shares (reported and ongoing) - in millions |
|||||||||||||||
Basic |
671 |
||||||||||||||
Diluted |
673 |
Spectra Energy Corp | ||||||||||||||||||||||||
Reported to Ongoing Distributable Cash Flow Reconciliation | ||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||
(In millions, except where noted) | ||||||||||||||||||||||||
Three Months Ended |
Three Months Ended | |||||||||||||||||||||||
Reported |
Less: Special Items |
Ongoing |
Reported |
Less: Special Items |
Ongoing | |||||||||||||||||||
Net Income |
$ |
310 |
$ |
(4) |
$ |
314 |
$ |
325 |
$ |
(8) |
$ |
333 |
||||||||||||
Add: |
||||||||||||||||||||||||
Interest expense |
151 |
— |
151 |
159 |
— |
159 |
||||||||||||||||||
Income tax expense |
98 |
(3) |
101 |
101 |
(4) |
105 |
||||||||||||||||||
Depreciation and amortization |
193 |
— |
193 |
193 |
— |
193 |
||||||||||||||||||
Foreign currency (gain) loss |
(2) |
— |
(2) |
(1) |
— |
(1) |
||||||||||||||||||
Less: |
||||||||||||||||||||||||
Third party interest income |
— |
— |
— |
1 |
— |
1 |
||||||||||||||||||
EBITDA |
750 |
(7) |
757 |
776 |
(12) |
788 |
||||||||||||||||||
Add: |
||||||||||||||||||||||||
(Earnings) Loss from equity investments |
(33) |
7 |
(40) |
(24) |
3 |
(27) |
||||||||||||||||||
Distributions from equity investments |
65 |
— |
65 |
54 |
— |
54 |
||||||||||||||||||
Empress non-cash items |
32 |
— |
32 |
22 |
— |
22 |
||||||||||||||||||
Non-cash impairment at Ozark Gas Gathering |
— |
— |
— |
9 |
9 |
— |
||||||||||||||||||
Other |
5 |
— |
5 |
5 |
— |
5 |
||||||||||||||||||
Less: |
||||||||||||||||||||||||
Interest expense |
151 |
— |
151 |
159 |
— |
159 |
||||||||||||||||||
Equity AFUDC |
25 |
— |
25 |
16 |
— |
16 |
||||||||||||||||||
Net cash paid (refund) for income taxes |
(22) |
— |
(22) |
(46) |
— |
(46) |
||||||||||||||||||
Distributions to non-controlling interests |
54 |
— |
54 |
44 |
— |
44 |
||||||||||||||||||
Maintenance capital expenditures |
88 |
— |
88 |
91 |
— |
91 |
||||||||||||||||||
Total Distributable Cash Flow |
$ |
523 |
$ |
— |
$ |
523 |
$ |
578 |
$ |
— |
$ |
578 |
||||||||||||
Logo - http://photos.prnewswire.com/prnh/20061030/CLM051LOGO
SOURCE Spectra Energy Corp
HOUSTON, May 4, 2016 /PRNewswire/ -- Spectra Energy Partners, LP (NYSE: SEP) announced that the board of directors of its general partner declared a quarterly cash distribution to unitholders of $0.65125 per unit, an increase of 1.25 cents over the previous level of $0.63875 per unit. This is the 34th consecutive quarter that Spectra Energy Partners has increased its quarterly cash distribution. The cash distribution is payable on May 27, 2016, to unitholders of record at the close of business on May 16, 2016. This quarterly cash distribution equates to $2.605 per unit on an annual basis.
This information is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Under rules applicable to publicly-traded partnerships, our distributions to non-U.S. unitholders are subject to withholding tax at the highest effective applicable rate to the extent attributable to income that is effectively connected with the conduct of a U.S. trade or business. Given the uncertainty at the time of making distributions regarding the amount of any distribution that is attributable to income that is so effectively connected, we intend to treat all of our distributions as attributable to our U.S. operations, and as a result, the entire distribution will be subject to withholding.
Spectra Energy Partners, LP (NYSE: SEP) is a Houston-based master limited partnership, formed by Spectra Energy Corp (NYSE: SE). SEP is one of the largest pipeline MLPs in the United States and connects growing supply areas to high-demand markets for natural gas and crude oil. These assets include more than 15,000 miles of transmission and gathering pipelines, approximately 170 billion cubic feet of natural gas storage, and approximately 4.8 million barrels of crude oil storage.
Logo - http://photos.prnewswire.com/prnh/20071107/CLW064
SOURCE Spectra Energy Partners, LP
HOUSTON, April 26, 2016 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) has declared a quarterly cash dividend on its common stock of $0.405 per share, or $1.62 per share on an annualized basis. The dividend is payable on June 7, 2016, to shareholders of record at the close of business on May 13, 2016.
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include more than 21,000 miles of natural gas, natural gas liquids, and crude oil pipelines; approximately 300 billion cubic feet (Bcf) of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com and www.spectraenergypartners.com.
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SOURCE Spectra Energy Corp
HOUSTON, April 6, 2016 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) and Spectra Energy Partners (NYSE: SEP) will announce their first quarter 2016 earnings results before the market opens on Wednesday, May 4, 2016, and will hold a joint investor and analyst conference call at 8 a.m. CT that same day.
The webcast will be available via the Spectra Energy and Spectra Energy Partners Investors pages. The conference call can be accessed by dialing (888) 252-3715 in the U.S. or Canada, or (706) 634-8942 internationally. The conference ID is 70917861 or "Spectra Energy / Spectra Energy Partners Earnings Call."
A replay of the call will be available until 5 p.m. CT on Friday, June 3, 2016, by dialing (800) 585-8367 in the U.S. or Canada, or (404) 537-3406 internationally, and using the above conference ID. A replay and transcript also will be available via the Spectra Energy and Spectra Energy Partners Investors pages.
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include more than 21,000 miles of natural gas, natural gas liquids, and crude oil pipelines; approximately 300 billion cubic feet (Bcf) of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com and www.spectraenergypartners.com.
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SOURCE Spectra Energy Corp and Spectra Energy Partners, LP
HOUSTON, April 4, 2016 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) and Spectra Energy Partners, LP (NYSE: SEP) announced today their agreement for Spectra Energy Corp to acquire approximately 9.1 million common units representing limited partner interests in Spectra Energy Partners at a price of $45.96 per unit in a private placement. In addition, Spectra Energy Corp will purchase up to an additional 1.4 million common units in the event that additional shares of its common stock are issued pursuant to the 25-day option granted to the underwriter in Spectra Energy Corp's public offering of common stock. Spectra Energy Corp is the parent company of the general partner of Spectra Energy Partners.
When the initial private placement is complete, Spectra Energy Partners will have approximately 296 million common units outstanding. The Spectra Energy Corp ownership interest in Spectra Energy Partners after this transaction will be 78 percent.
This transaction is being financed with the Spectra Energy common equity issuance announced earlier today.
"The transactions we announced today demonstrate the flexibility and economic benefits associated with having strong and multiple financing options across the Spectra Energy group of companies. The proceeds from these transactions, and the pending sale of our Empress asset, enable us to further execute on our 2016-2018 capital expansion plan. In addition, these transactions allow us to continue to deliver on our DCF, dividend and distribution expectations as well as our DCF coverage levels at Spectra Energy and Spectra Energy Partners as we outlined to investors earlier this year," said Greg Ebel, chairman and CEO of Spectra Energy and Spectra Energy Partners. "Given the results already achieved from our financing activities this year and our current capital plan, our expectation is that we will not need additional Spectra Energy equity in 2016. Spectra Energy Partners' ATM program is expected to continue to operate throughout 2016 and provide substantially all of SEP's remaining equity needs for this calendar year."
The securities to be issued in the private placement have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws.
This news release is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
Forward-Looking Statements
This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on our beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an effect on rate structure, and affect the speed at and degree to which competition enters the natural gas and oil industries; outcomes of litigation and regulatory investigations, proceedings or inquiries; weather and other natural phenomena, including the economic, operational and other effects of hurricanes and storms; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; general economic conditions, including the risk of a prolonged economic slowdown or decline, or the risk of delay in a recovery, which can affect the long-term demand for natural gas and oil and related services; potential effects arising from terrorist attacks and any consequential or other hostilities; changes in environmental, safety and other laws and regulations; the development of alternative energy resources; results and costs of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general market and economic conditions; increases in the cost of goods and services required to complete capital projects; declines in the market prices of equity and debt securities and resulting funding requirements for defined benefit pension plans; growth in opportunities, including the timing and success of efforts to develop U.S. and Canadian pipeline, storage, gathering, processing and other related infrastructure projects and the effects of competition; the performance of natural gas and oil transmission and storage, distribution, and gathering and processing facilities; the extent of success in connecting natural gas and oil supplies to gathering, processing and transmission systems and in connecting to expanding gas and oil markets; the effects of accounting pronouncements issued periodically by accounting standard-setting bodies; conditions of the capital markets during the periods covered by forward-looking statements; and the ability to successfully complete merger, acquisition or divestiture plans; regulatory or other limitations imposed as a result of a merger, acquisition or divestiture; and the success of the business following a merger, acquisition or divestiture. These factors, as well as additional factors that could affect our forward-looking statements, are described in our filings that we make with the SEC, which are available via the SEC's website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. All forward-looking statements in this release are made as of the date hereof and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About Spectra Energy and Spectra Energy Partners
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include more than 21,000 miles of natural gas, natural gas liquids, and crude oil pipelines; approximately 300 billion cubic feet (Bcf) of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century.
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SOURCE Spectra Energy Partners, LP; Spectra Energy Corp
HOUSTON, April 4, 2016 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) today announced that its public offering of 14 million shares of its common stock was priced at $30 per share to the public. Barclays Capital Inc. is acting as the sole underwriter for the offering. The company expects the delivery of the shares to occur on April 8, 2016, subject to customary closing conditions. In addition, Barclays Capital Inc. has a 25-day option to purchase up to 2.1 million additional shares of the company's common stock.
Assuming no exercise of the option to purchase additional shares, Spectra Energy expects to receive gross proceeds from the offering of approximately $420 million (before the underwriting discount and other estimated offering expenses payable by the company). Spectra Energy expects to use the net proceeds from this offering to purchase additional common units from Spectra Energy Partners, LP (NYSE: SEP) in a private placement. Following that transaction, Spectra Energy, which is the parent company of the general partner of Spectra Energy Partners, will hold a 78 percent ownership interest in Spectra Energy Partners.
The offering is being made only by means of a prospectus and related prospectus supplement, copies of which may be obtained by contacting Barclays Capital Inc. by mail at c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by e-mail at Barclaysprospectus@broadridge.com or by telephone at (888) 603-5847.
An electronic copy of the preliminary prospectus supplement and the accompanying prospectus are available from the Securities and Exchange Commission's web site at www.sec.gov.
The shares are being offered pursuant to an effective shelf registration statement that Spectra Energy previously filed with the Securities and Exchange Commission. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdictions.
About Spectra Energy
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include more than 21,000 miles of natural gas, natural gas liquids, and crude oil pipelines; approximately 300 billion cubic feet (Bcf) of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century.
Forward-Looking Statements
This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. Forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Factors used to develop these forward-looking statements and that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: state, provincial, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an effect on rate structure, and affect the speed at and degree to which competition enters the natural gas and oil industries; outcomes of litigation and regulatory investigations, proceedings or inquiries; weather and other natural phenomena, including the economic, operational and other effects of hurricanes and storms; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; general economic conditions, including the risk of a prolonged economic slowdown or decline, or the risk of delay in a recovery, which can affect the long-term demand for natural gas and oil and related services; potential effects arising from terrorist attacks and any consequential or other hostilities; changes in environmental, safety and other laws and regulations; the development of alternative energy resources; results and costs of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general market and economic conditions; increases in the cost of goods and services required to complete capital projects; declines in the market prices of equity and debt securities and resulting funding requirements for defined benefit pension plans; growth in opportunities, including the timing and success of efforts to develop United States and Canadian pipeline, storage, gathering, processing and other related infrastructure projects and the effects of competition; the performance of natural gas and oil transmission and storage, distribution, and gathering and processing facilities; the extent of success in connecting natural gas and oil supplies to gathering, processing and transmission systems and in connecting to expanding gas and oil markets; the effects of accounting pronouncements issued periodically by accounting standard-setting bodies; conditions of the capital markets during the periods covered by forward-looking statements; the ability to successfully complete merger, acquisition or divestiture plans; regulatory or other limitations imposed as a result of a merger, acquisition or divestiture; and the success of the business following a merger, acquisition or divestiture.
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SOURCE Spectra Energy Corp
HOUSTON, April 4, 2016 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) today announced the commencement of an underwritten public offering of 14 million shares of its common stock. Barclays Capital Inc. is acting as the sole underwriter for the offering. In addition, Spectra Energy intends to grant Barclays Capital Inc. a 25-day option to purchase up to 2.1 million shares of its common stock.
Spectra Energy expects to use the net proceeds from this offering to purchase additional common units from Spectra Energy Partners, LP (NYSE: SEP) in a private placement.
The offering is being made only by means of a prospectus and related prospectus supplement, copies of which may be obtained by contacting Barclays Capital Inc. by mail at c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by e-mail at Barclaysprospectus@broadridge.com or by telephone at (888) 603-5847.
An electronic copy of the preliminary prospectus supplement and the accompanying prospectus are available from the Securities and Exchange Commission's web site at www.sec.gov.
The shares are being offered pursuant to an effective shelf registration statement that Spectra Energy previously filed with the Securities and Exchange Commission. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdictions.
About Spectra Energy
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include more than 21,000 miles of natural gas, natural gas liquids, and crude oil pipelines; approximately 300 billion cubic feet (Bcf) of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century.
Forward-Looking Statements
This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. Forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Factors used to develop these forward-looking statements and that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: state, provincial, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an effect on rate structure, and affect the speed at and degree to which competition enters the natural gas and oil industries; outcomes of litigation and regulatory investigations, proceedings or inquiries; weather and other natural phenomena, including the economic, operational and other effects of hurricanes and storms;
the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; general economic conditions, including the risk of a prolonged economic slowdown or decline, or the risk of delay in a recovery, which can affect the long-term demand for natural gas and oil and related services; potential effects arising from terrorist attacks and any consequential or other hostilities; changes in environmental, safety and other laws and regulations; the development of alternative energy resources; results and costs of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general market and economic conditions; increases in the cost of goods and services required to complete capital projects; declines in the market prices of equity and debt securities and resulting funding requirements for defined benefit pension plans; growth in opportunities, including the timing and success of efforts to develop United States and Canadian pipeline, storage, gathering, processing and other related infrastructure projects and the effects of competition; the performance of natural gas and oil transmission and storage, distribution, and gathering and processing facilities; the extent of success in connecting natural gas and oil supplies to gathering, processing and transmission systems and in connecting to expanding gas and oil markets; the effects of accounting pronouncements issued periodically by accounting standard-setting bodies; conditions of the capital markets during the periods covered by forward-looking statements; the ability to successfully complete merger, acquisition or divestiture plans; regulatory or other limitations imposed as a result of a merger, acquisition or divestiture; and the success of the business following a merger, acquisition or divestiture.
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SOURCE Spectra Energy Corp
HOUSTON, April 4, 2016 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) today announced its indirect subsidiary, Westcoast Energy Inc., has entered into a definitive agreement to sell its ownership interests in Spectra Energy's Canadian natural gas liquids (NGL) business to Plains Midstream Canada ULC, a large-scale, experienced operator in the Canadian NGL space, for a cash purchase price of approximately C$200 million plus customary closing adjustments.
The transaction includes Westcoast's Canadian NGL integrated system of assets, consisting of the Empress NGL extraction and fractionation facility, the PTC transmission pipeline, seven NGL terminals and two NGL storage facilities in Western Canada.
"This divestiture reinforces Spectra Energy's intent to focus on investing in stable, fee-based natural gas infrastructure in Western Canada. The Empress NGL business has served us well over the past decade and monetizing it at this time benefits our investors and allows Empress to continue delivering on its successful track record," said Greg Ebel, president and chief executive officer, Spectra Energy.
Subject to customary regulatory approvals and other closing conditions, the transaction is expected to close during the first half of the year.
This release includes "forward-looking statements" within the meaning of applicable securities laws, including Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events. Such statements are subject to risks, uncertainties and other factors, many of which are outside our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Those factors include: the timing and success of the completion of the acquisition and the timing and receipt of required regulatory approvals. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About Spectra Energy
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include more than 21,000 miles of natural gas, natural gas liquids, and crude oil pipelines; approximately 300 billion cubic feet (Bcf) of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com and www.spectraenergypartners.com.
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SOURCE Spectra Energy Corp
HOUSTON, Feb. 25, 2016 /PRNewswire/ -- Spectra Energy Partners, LP (NYSE: SEP) today announced it has filed the partnership's Annual Report on Form 10-K with the Securities and Exchange Commission (SEC), for the year that ended December 31, 2015.
The report is available for viewing and downloading through the partnership's website, www.spectraenergypartners.com, under SEC Filings on the Investors/News page. Investors may also request a hard copy of the 10-K, free of charge, by e-mailing
IR-SEP@spectraenergy.com.
Spectra Energy Partners, LP (NYSE: SEP) is a Houston-based master limited partnership, formed by Spectra Energy Corp (NYSE: SE). SEP is one of the largest pipeline MLPs in the United States and connects growing supply areas to high-demand markets for natural gas and crude oil. These assets include more than 15,000 miles of transmission and gathering pipelines, approximately 170 billion cubic feet of natural gas storage, and approximately 4.8 million barrels of crude oil storage.
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SOURCE Spectra Energy Partners, LP
HOUSTON, Feb. 4, 2016 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) and Spectra Energy Partners (NYSE: SEP) today announced their 2016-2018 business and financial plan.
Key highlights for Spectra Energy include:
Key highlights for Spectra Energy Partners include:
"Our execution backlog of about $8 billion in secured projects is primarily driven by natural gas demand and will grow our cash flows during and beyond the plan period. The strength of our projects in execution gives us confidence in our ongoing ability to deliver an annual 14-cent per share dividend increase at Spectra Energy and our quarterly penny-and-a-quarter per unit distribution increase at Spectra Energy Partners through 2018," said Greg Ebel, chief executive officer, Spectra Energy. "Despite commodity prices and the Canadian dollar being significantly lower than a year ago, our 2016 and 2017 DCF forecasts and dividend and distribution coverage ratios are stronger than those we presented to investors a year ago.
"The fundamentals of a company matter – and in today's business environment, they matter even more. Our existing infrastructure assets go to where the lights are – from key supply basins to the fastest growing North American energy markets. The competitive advantage of our existing assets, with our expansion projects in execution, provides an outlook that is more robust than even a year ago and provides investors with stable and reliable returns," added Ebel.
Key assumptions underlying the three-year financial plan include:
Spectra Energy and Spectra Energy Partners will discuss their business outlook and three-year financial plan in greater detail during an analyst/investor meeting today.
The presentation is scheduled to begin at 8:30 a.m. ET and will be webcast via the Investors sections of the Spectra Energy and Spectra Energy Partners websites. The conference call can be accessed by dialing (888) 252-3715 in the U.S. or Canada, or (706) 634-8942 internationally. The conference ID is 7888893 or "Spectra Energy 2016 Plan."
A replay of the call will be available until 5 p.m. CT on Tuesday, May 3, 2016, by dialing (800) 585-8367 in the U.S. or Canada, or (404) 537-3406 internationally, and using the above conference ID. A replay and transcript also will be available via the Investors sections of the Spectra Energy and Spectra Energy Partners websites.
Forward-Looking Statements
This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on our beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: the success of a completed drop-down; state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an effect on rate structure, and affect the speed at and degree to which competition enters the natural gas and oil industries; outcomes of litigation and regulatory investigations, proceedings or inquiries; weather and other natural phenomena, including the economic, operational and other effects of hurricanes and storms; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; general economic conditions, including the risk of a prolonged economic slowdown or decline, or the risk of delay in a recovery, which can affect the long-term demand for natural gas and oil and related services; potential effects arising from terrorist attacks and any consequential or other hostilities; changes in environmental, safety and other laws and regulations; the development of alternative energy resources; results and costs of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general market and economic conditions; increases in the cost of goods and services required to complete capital projects; declines in the market prices of equity and debt securities and resulting funding requirements for defined benefit pension plans; growth in opportunities, including the timing and success of efforts to develop U.S. and Canadian pipeline, storage, gathering, processing and other related infrastructure projects and the effects of competition; the performance of natural gas and oil transmission and storage, distribution, and gathering and processing facilities; the extent of success in connecting natural gas and oil supplies to gathering, processing and transmission systems and in connecting to expanding gas and oil markets; the effects of accounting pronouncements issued periodically by accounting standard-setting bodies; conditions of the capital markets during the periods covered by forward-looking statements; and the ability to successfully complete merger, acquisition or divestiture plans; regulatory or other limitations imposed as a result of a merger, acquisition or divestiture; and the success of the business following a merger, acquisition or divestiture. These factors, as well as additional factors that could affect our forward-looking statements, are described in our filings that we make with the SEC, which are available via the SEC's website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. All forward-looking statements in this release are made as of the date hereof and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About Spectra Energy and Spectra Energy Partners
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include more than 21,000 miles of natural gas, natural gas liquids, and crude oil pipelines; approximately 300 billion cubic feet (Bcf) of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com and www.spectraenergypartners.com.
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SOURCE Spectra Energy Corp; Spectra Energy Partners, LP
LAKE MARY, Fla., Feb. 3, 2016 /PRNewswire/ -- Sabal Trail Transmission, LLC, a joint venture of Spectra Energy Partners, LP (NYSE: SEP), NextEra Energy, Inc., and Duke Energy, received a certificate of public convenience and necessity from the Federal Energy Regulatory Commission (FERC) to construct and operate the Sabal Trail interstate natural gas pipeline project. This approval authorizes Sabal Trail, subject to certain conditions, to proceed with final preparations to commence construction in the coming months to meet a May 1, 2017, in-service date.
Once complete, the 516-mile pipeline would have the capacity to deliver approximately 1.1 billion cubic feet of natural gas per day to the Southeast U.S., including firm transportation services to Florida Power & Light Company and Duke Energy of Florida.
"Sabal Trail will provide a critically-needed source of domestic, clean-burning, affordable natural gas to the Southeast U.S. to meet the growing demand for natural gas-fired generation, the cleanest and most versatile fuel for powering the region's homes and businesses," said Bill Yardley, president of Sabal Trail Management, LLC and president of U.S. Transmission and Storage, Spectra Energy.
"For more than two and a half years, Sabal Trail has engaged with stakeholders, local community officials, and federal and state agencies to locate and design a pipeline system that will be built and operated safely and efficiently. Receiving this stamp of approval is a testament to our strong history of consultation and successful project execution. We are very pleased to reach this significant milestone and move one step closer to construction of the pipeline, which will diversify the region's energy sources and generate significant economic benefits for local communities."
For more information on Sabal Trail, visit www.sabaltrail.com.
Spectra Energy Partners, LP (NYSE: SEP) is a Houston-based master limited partnership, formed by Spectra Energy Corp (NYSE: SE). SEP is one of the largest pipeline MLPs in the United States and connects growing supply areas to high-demand markets for natural gas and crude oil. These assets include more than 15,000 miles of transmission and gathering pipelines, approximately 170 billion cubic feet of natural gas storage, and approximately 4.8 million barrels of crude oil storage.
NextEra Energy, Inc. (NYSE:NEE) is a leading clean energy company with consolidated revenues of approximately $17.5 billion, approximately 46,300 megawatts of generating capacity, which includes megawatts associated with noncontrolling interests related to NextEra Energy Partners, LP (NYSE:NEP), and approximately 14,300 employees in 27 states and Canada as of year-end 2015. Headquartered in Juno Beach, Fla., NextEra Energy's principal subsidiaries are Florida Power & Light Company, which serves more than 4.8 million customer accounts in Florida and is one of the largest rate-regulated electric utilities in the United States, and NextEra Energy Resources, LLC, which, together with its affiliated entities, is the world's largest generator of renewable energy from the wind and sun. Through its subsidiaries, NextEra Energy generates clean, emissions-free electricity from eight commercial nuclear power units in Florida, New Hampshire, Iowa and Wisconsin. NextEra Energy has been recognized often by third parties for its efforts in sustainability, corporate responsibility, ethics and compliance, and diversity, and has been ranked in the top 10 worldwide for innovativeness and community responsibility as part of Fortune's 2015 list of "World's Most Admired Companies." For more information about NextEra Energy companies, visit these websites: www.NextEraEnergy.com, www.FPL.com, www.NextEraEnergyResources.com.
Duke Energy is the largest electric power holding company in the United States. Its regulated utility operations serve approximately 7.3 million electric customers located in six states in the Southeast and Midwest, representing a population of approximately 23 million people. Its Commercial Portfolio and International business segments own and operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the United States.
Headquartered in Charlotte, N.C., Duke Energy is a Fortune 250 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available at duke-energy.com.
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SOURCE Spectra Energy Partners, LP; Spectra Energy Corp
HOUSTON, Feb. 3, 2016 /PRNewswire/ --
2015 Year-End Highlights:
Spectra Energy Partners, LP (NYSE: SEP) today reported fourth quarter 2015 distributable cash flow (DCF) of $260 million, compared with $245 million in the prior-year quarter. For the year, DCF was $1.21 billion, up $150 million from $1.06 billion in 2014. Distributions per limited partner unit for 2015 were $2.43, compared with $2.245 per limited partner unit in 2014.
"Spectra Energy Partners once again delivered strong quarterly performance, capping off an outstanding year of higher cash flows and increased earnings. Our 2015 results reinforce the strength of our business – one which has no direct commodity exposure and little volume exposure," said Greg Ebel, chief executive officer, Spectra Energy Partners. "The strength of our fee-based model, high credit-quality customers, and the new projects we placed into service on time or early in 2015, continue to drive steady distribution growth, creating value for our investors now and into the future."
For the quarter, earnings before interest, taxes, depreciation and amortization (EBITDA) were $457 million, compared with $424 million in the prior-year quarter. For the year, reported EBITDA was $1.82 billion, up from $1.59 billion in 2014. Ongoing EBITDA for 2015 was $1.83 billion, compared with $1.59 billion in 2014.
In fourth quarter 2015, reported and ongoing net income from controlling interests were $304 million and $305 million, respectively, compared with $283 million in fourth quarter 2014. For the year, reported and ongoing net income from controlling interests were $1.23 billion and $1.24 billion, respectively, compared with $1.0 billion in 2014.
SEGMENT RESULTS
U. S. Transmission
U.S. Transmission reported fourth quarter 2015 EBITDA of $413 million, compared with $369 million in fourth quarter 2014. These results reflect increased earnings in our natural gas transmission business from expansion projects.
Year-end 2015 ongoing EBITDA for U.S. Transmission was $1.61 billion, compared with $1.42 billion in 2014. The 2015 period excludes a special item of $9 million related to a non-cash impairment of the Ozark Gas Gathering asset.
Liquids
Liquids reported fourth quarter 2015 EBITDA of $62 million, compared with $71 million in fourth quarter 2014. The decrease is attributable to lower equity earnings from Sand Hills and Southern Hills natural gas liquids (NGL) pipelines, which the company owned for approximately one month of the quarter.
Year-end 2015 EBITDA for Liquids was $283 million, compared with $240 million in 2014.
Other
"Other" reported net expenses of $18 million and $16 million in fourth quarters 2015 and 2014, respectively.
Year-end 2015 net expenses were $66 million, compared with $64 million in 2014.
ADDITIONAL FINANCIAL INFORMATION
Interest Expense
Interest expense was $60 million in fourth quarter 2015, compared with $55 million in fourth quarter 2014, driven by higher average long term debt balances, partially offset by higher capitalized interest.
Liquidity and Capital Expenditures
Total debt outstanding at Spectra Energy Partners as of December 31, 2015, was $6.6 billion. At the end of the quarter there was available liquidity of $1.7 billion. Spectra Energy Partners' capital expansion program continues to be funded through a combination of debt and equity. Total capital and investment spending for the quarter was $755 million, excluding contributions from noncontrolling interests. The spending consisted of $655 million of growth capital expenditures and $100 million of maintenance capital expenditures.
For the year, total capital and investment spending was approximately $2 billion, excluding contributions from noncontrolling interests, and consisted of about $1.7 billion of growth capital expenditures and about $310 million of maintenance capital expenditures.
In 2015, Spectra Energy Partners received net proceeds of approximately $550 million through its "At the Market" (ATM) equity issuance program, with nearly $200 million raised in the fourth quarter.
EXPANSION PROJECT UPDATES
Spectra Energy Partners has advanced numerous projects across the system. The company filed Federal Energy Regulatory Commission (FERC) certificate applications in the quarter for the Atlantic Bridge, Access South, Adair Southwest, and Lebanon Extension projects.
The NEXUS project, which is supported by local distribution companies (LDCs) as well as Marcellus and Utica producers, also filed its application with FERC, and reached another regulatory milestone in the quarter with the receipt of Ontario Energy Board (OEB) approval for the Canadian utility shippers. The joint venture with DTE will allow customers to move up to 1.5 billion cubic feet per day (Bcf/d) through Ohio and Michigan markets to the Dawn Hub, which is the second largest physically traded gas hub in North America and is owned and operated by Union Gas. NEXUS has secured additional connections with four natural gas distribution companies in Ohio, including the two largest in the state, two natural gas-fired power plants, and three industrial parks, demonstrating the value of the project path connecting to the largest natural gas supply source in North America. These connections could add incremental load across northern Ohio of up to 1.4 Bcf/d. NEXUS is on target for a November 2017 in-service date.
The AIM project, supported by New England LDCs, has made significant construction progress and is well on the way to its planned in-service date in the second half of 2016. A number of other projects are on track to meet their respective in-service dates, including the Sabal Trail, Ozark, Salem Lateral, Gulf Markets, Loudon Expansion, TEAL, and PennEast projects.
In the liquids business, the Express Enhancement project is supported by long-term contracts and is on schedule for completion by the end of 2016. The strong response to this system optimization project demonstrates that the Express pipeline's incumbent position is a substantial advantage in responding quickly to market demand.
Access Northeast is focused on the New England electric power market and saving consumers money while improving the reliability of the region's energy system. This solution maximizes existing infrastructure corridors, by utilizing the Algonquin and Maritimes & Northeast pipelines, which directly connect to more than 60 percent of the ISO-New England power plants. In addition, the four new natural gas-fired electric generation plants that have cleared the 2017 and 2018 ISO-NE forward capacity auctions will be located on the Algonquin pipeline, further demonstrating the company's very strong position in New England.
Access Northeast will carry natural gas from the least expensive supply areas, via multiple optional paths, directly to the majority of the power plants in New England. It will cost-effectively deliver supply when power generators need it, with new tariff services to handle the peak hour, quick start, and seasonal needs.
Access Northeast submitted its FERC pre-file application during the quarter and has recently executed electric distribution contracts in Massachusetts equaling more than 40 percent of the 0.9 Bcf/d capacity designed for generators. Progress is being made in other states, and Access Northeast anticipates state approvals for contracts later this year. The project continues to advance toward a late 2018 initial in-service date.
ADDITIONAL INFORMATION
Additional information about fourth quarter 2015 earnings can be obtained via the Spectra Energy Partners website: www.spectraenergypartners.com.
The analyst call, held jointly with Spectra Energy, is scheduled for today, Wednesday, February 3, 2016, at 8 a.m. CT. The webcast will be available via the Investors sections of the Spectra Energy and Spectra Energy Partners websites. The conference call can be accessed by dialing (888) 252-3715 in the U.S. or Canada, or (706) 634-8942 internationally. The conference ID is 89326071 or "Spectra Energy / Spectra Energy Partners Earnings Call."
A replay of the call will be available until 5 p.m. CT on Tuesday, May 3, 2016, by dialing (800) 585-8367 in the U.S. or Canada, or (404) 537-3406 internationally, and using the above conference ID. A replay and transcript also will be available via the Investors sections of the Spectra Energy and Spectra Energy Partners websites.
Non-GAAP Financial Measures
We use ongoing net income from controlling interests as a measure to evaluate operations of the partnership. This measure is a non-GAAP financial measure as it represents net income from controlling interests, excluding special items. Special items represent certain charges and credits which we believe will not be recurring on a regular basis. We believe that the presentation of ongoing net income from controlling interests provides useful information to investors, as it allows investors to more accurately compare our ongoing performance across periods. The most directly comparable GAAP measure for ongoing net income from controlling interests is reported net income from controlling interests.
We use earnings from continuing operations before interest, income taxes, and depreciation and amortization (EBITDA) and ongoing EBITDA, non-GAAP financial measures, as performance measures for Spectra Energy Partners, LP. Ongoing EBITDA represents EBITDA excluding special items. We believe that the presentation of EBITDA and ongoing EBITDA provides useful information to investors, as it allows investors to more accurately compare Spectra Energy Partners, LP's performance across periods. The most directly comparable GAAP measure for EBITDA and ongoing EBITDA for Spectra Energy Partners, LP is net income.
The primary performance measure used by us to evaluate segment performance is segment EBITDA. We consider segment EBITDA, which is the GAAP measure used to report segment results, to be a good indicator of each segment's operating performance from its continuing operations as it represents the results of our segments' operations before depreciation and amortization without regard to financing methods or capital structures. Our segment EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate EBITDA in the same manner.
We also use ongoing segment EBITDA as a measure of performance. Ongoing segment EBITDA is a non-GAAP financial measure, as it represents reported segment EBITDA excluding special items. We believe that the presentation of ongoing segment EBITDA provides useful information to investors, as it allows investors to more accurately compare a segment's ongoing performance across periods. The most directly comparable GAAP measure for ongoing segment EBITDA is reported segment EBITDA.
We have also presented Distributable Cash Flow (DCF), which is a non-GAAP financial measure. We believe that the presentation of DCF provides useful information to investors, as it represents the cash generation capabilities of the partnership to support distribution growth. The most directly comparable GAAP measure for DCF is net income. We also use DCF coverage, which is a non-GAAP financial measure, as it represents DCF divided by distributions declared on partnership units. The most directly comparable GAAP measure for DCF coverage is reported Earnings-Per-Unit (EPU).
The non-GAAP financial measures presented in this press release should not be considered in isolation or as an alternative to financial measures presented in accordance with GAAP. These non-GAAP financial measures may not be comparable to similarly titled measures of other partnerships because other partnerships may not calculate these measures in the same manner.
Forward-Looking Statements
This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on our beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an effect on rate structure, and affect the speed at and degree to which competition enters the natural gas and oil industries; outcomes of litigation and regulatory investigations, proceedings or inquiries; weather and other natural phenomena, including the economic, operational and other effects of hurricanes and storms; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; general economic conditions, including the risk of a prolonged economic slowdown or decline, or the risk of delay in a recovery, which can affect the long-term demand for natural gas and oil and related services; potential effects arising from terrorist attacks and any consequential or other hostilities; changes in environmental, safety and other laws and regulations; the development of alternative energy resources; results and costs of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general market and economic conditions; increases in the cost of goods and services required to complete capital projects; declines in the market prices of equity and debt securities and resulting funding requirements for defined benefit pension plans; growth in opportunities, including the timing and success of efforts to develop U.S. and Canadian pipeline, storage, gathering, processing and other related infrastructure projects and the effects of competition; the performance of natural gas and oil transmission and storage, distribution, and gathering and processing facilities; the extent of success in connecting natural gas and oil supplies to gathering, processing and transmission systems and in connecting to expanding gas and oil markets; the effects of accounting pronouncements issued periodically by accounting standard-setting bodies; conditions of the capital markets during the periods covered by forward-looking statements; and the ability to successfully complete merger, acquisition or divestiture plans; regulatory or other limitations imposed as a result of a merger, acquisition or divestiture; and the success of the business following a merger, acquisition or divestiture. These factors, as well as additional factors that could affect our forward-looking statements, are described under the headings "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Information" in our 2014 Form 10-K, filed on February 27, 2015, and in our other filings made with the Securities and Exchange Commission (SEC), which are available via the SEC's website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. All forward-looking statements in this release are made as of the date hereof and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Spectra Energy Partners, LP (NYSE: SEP) is a Houston-based master limited partnership, formed by Spectra Energy Corp (NYSE: SE). SEP is one of the largest pipeline MLPs in the United States and connects growing supply areas to high-demand markets for natural gas and crude oil. These assets include more than 15,000 miles of transmission and gathering pipelines, approximately 170 billion cubic feet of natural gas storage, and approximately 4.8 million barrels of crude oil storage.
Spectra Energy Partners, LP | ||||||||||||||||
Quarterly Highlights | ||||||||||||||||
December 2015 | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In millions, except per-unit amounts) | ||||||||||||||||
These results include the impact of special items | ||||||||||||||||
Quarters Ended |
Years Ended | |||||||||||||||
December 31, |
December 31, | |||||||||||||||
2015 |
2014 |
2015 |
2014 | |||||||||||||
INCOME |
||||||||||||||||
Operating Revenues |
$ |
634 |
$ |
599 |
$ |
2,455 |
$ |
2,269 |
||||||||
Total Reportable Segment EBITDA |
475 |
440 |
1,882 |
1,655 |
||||||||||||
Net Income - Controlling Interests |
304 |
283 |
1,225 |
1,004 |
||||||||||||
EBITDA BY BUSINESS SEGMENT |
||||||||||||||||
U.S. Transmission |
$ |
413 |
$ |
369 |
$ |
1,599 |
$ |
1,415 |
||||||||
Liquids |
62 |
71 |
283 |
240 |
||||||||||||
Total Reportable Segment EBITDA |
475 |
440 |
1,882 |
1,655 |
||||||||||||
Other EBITDA |
(18) |
(16) |
(66) |
(64) |
||||||||||||
Total Reportable Segment and Other EBITDA |
$ |
457 |
$ |
424 |
$ |
1,816 |
$ |
1,591 |
||||||||
PARTNERS' CAPITAL |
||||||||||||||||
Declared Cash Distribution per Limited Partner Unit |
$ |
0.63875 |
$ |
0.58875 |
$ |
2.4800 |
$ |
2.2875 |
||||||||
Weighted Average Units Outstanding |
||||||||||||||||
Limited Partner Units |
290 |
293 |
296 |
288 |
||||||||||||
General Partner Units |
6 |
6 |
6 |
6 |
||||||||||||
DISTRIBUTABLE CASH FLOW |
||||||||||||||||
Distributable Cash Flow |
$ |
260 |
$ |
245 |
$ |
1,205 |
$ |
1,055 |
||||||||
Coverage Ratio |
1.2X |
1.3X | ||||||||||||||
CAPITAL AND INVESTMENT EXPENDITURES (a) |
||||||||||||||||
Capital expenditures - U.S. Transmission |
$ |
1,857 |
$ |
1,063 |
||||||||||||
Capital expenditures - Liquids |
26 |
18 |
||||||||||||||
Investment expenditures - Sand Hills/Southern Hills/SESH/Penn East/Nexus |
124 |
160 |
||||||||||||||
Total |
$ |
2,007 |
$ |
1,241 |
||||||||||||
U.S. TRANSMISSION |
||||||||||||||||
Operating Revenues |
$ |
541 |
$ |
508 |
$ |
2,087 |
$ |
1,939 |
||||||||
Operating Expenses |
||||||||||||||||
Operating, Maintenance and Other |
184 |
177 |
680 |
647 |
||||||||||||
Other Income and Expenses |
56 |
38 |
192 |
123 |
||||||||||||
EBITDA |
$ |
413 |
$ |
369 |
$ |
1,599 |
$ |
1,415 |
||||||||
LIQUIDS |
||||||||||||||||
Operating Revenues |
$ |
93 |
$ |
91 |
$ |
368 |
$ |
330 |
||||||||
Operating Expenses |
||||||||||||||||
Operating, Maintenance and Other |
36 |
35 |
141 |
134 |
||||||||||||
Other Income and Expenses |
5 |
15 |
56 |
44 |
||||||||||||
EBITDA |
$ |
62 |
$ |
71 |
$ |
283 |
$ |
240 |
||||||||
Express Pipeline Revenue Receipts, MBbl/d (b) |
239 |
240 |
239 |
223 |
||||||||||||
Platte PADD II Deliveries, MBbl/d |
140 |
168 |
162 |
170 |
||||||||||||
Canadian Dollar Exchange Rate, Average |
1.34 |
1.14 |
1.28 |
1.10 |
||||||||||||
December 31, |
December 31, | |||||||||||||||
2015 |
2014 | |||||||||||||||
Debt |
$ |
6,604 |
$ |
6,077 |
||||||||||||
Actual Units Outstanding |
291 |
301 |
||||||||||||||
(a) Excludes contributions received from noncontrolling interests of $216 million in 2015 and $53 million in 2014. 2014 period includes an investment in SESH of $94 million, used by SESH to retire debt. | ||||||||||||||||
(b) Thousand barrels per day. |
Spectra Energy Partners, LP | ||||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
(In millions) | ||||||||||||||||||
These results include the impact of special items | ||||||||||||||||||
Quarters Ended |
Years Ended | |||||||||||||||||
2015 |
2014 |
2015 |
2014 | |||||||||||||||
Operating Revenues |
$ |
634 |
$ |
599 |
$ |
2,455 |
$ |
2,269 |
||||||||||
Operating Expenses |
313 |
300 |
1,182 |
1,133 |
||||||||||||||
Operating Income |
321 |
299 |
1,273 |
1,136 |
||||||||||||||
Other Income and Expenses |
60 |
52 |
243 |
164 |
||||||||||||||
Interest Expense |
60 |
55 |
239 |
238 |
||||||||||||||
Earnings Before Income Taxes |
321 |
296 |
1,277 |
1,062 |
||||||||||||||
Income Tax Expense |
4 |
6 |
12 |
35 |
||||||||||||||
Net Income |
317 |
290 |
1,265 |
1,027 |
||||||||||||||
Net Income - Noncontrolling Interests |
13 |
7 |
40 |
23 |
||||||||||||||
Net Income - Controlling Interests |
$ |
304 |
$ |
283 |
$ |
1,225 |
$ |
1,004 |
Spectra Energy Partners, LP | |||||||||||
Condensed Consolidated Balance Sheets | |||||||||||
(Unaudited) | |||||||||||
(In millions) | |||||||||||
December 31, |
December 31, | ||||||||||
2015 |
2014 (a) | ||||||||||
ASSETS |
|||||||||||
Current Assets |
$ |
544 |
$ |
555 |
|||||||
Investments and Other Assets |
4,180 |
4,841 |
|||||||||
Net Property, Plant and Equipment |
13,837 |
12,135 |
|||||||||
Regulatory Assets and Deferred Debits |
290 |
247 |
|||||||||
Total Assets |
$ |
18,851 |
$ |
17,778 |
|||||||
LIABILITIES AND EQUITY |
|||||||||||
Current Liabilities |
$ |
1,471 |
$ |
1,482 |
|||||||
Long-term Debt |
5,845 |
5,134 |
|||||||||
Deferred Credits and Other Liabilities |
189 |
156 |
|||||||||
Equity |
11,346 |
11,006 |
|||||||||
Total Liabilities and Equity |
$ |
18,851 |
$ |
17,778 |
|||||||
(a) |
The debt issuance costs of $15 million previously reported in Regulatory Assets and Deferred Credits at December 31, 2014 was retrospectively reclassified as a reduction to Long-term Debt at that date, as a result of the adoption of a new accounting standard. | ||||||||||
Spectra Energy Partners, LP |
||||||||||||||||||||||||
Distributable Cash Flow |
||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||
(in millions) |
||||||||||||||||||||||||
Quarters Ended December 31, |
Years Ended |
|||||||||||||||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||||||||||||||
Net Income |
$ 317 |
$ 290 |
$ 1,265 |
$ 1,027 |
||||||||||||||||||||
Add: |
||||||||||||||||||||||||
Interest expense |
60 |
55 |
239 |
238 |
||||||||||||||||||||
Income tax expense |
4 |
6 |
12 |
35 |
||||||||||||||||||||
Depreciation and amortization |
75 |
72 |
295 |
288 |
||||||||||||||||||||
Foreign currency loss |
1 |
1 |
6 |
3 |
||||||||||||||||||||
Less: |
||||||||||||||||||||||||
Third party interest income |
- |
- |
1 |
- |
||||||||||||||||||||
EBITDA |
457 |
424 |
1,816 |
1,591 |
||||||||||||||||||||
Add: |
||||||||||||||||||||||||
Earnings from equity investments |
(33) |
(40) |
(167) |
(133) |
||||||||||||||||||||
Distributions from equity investments (a) |
24 |
45 |
207 |
165 |
||||||||||||||||||||
Non-cash impairment on Ozark Gas Gathering |
- |
- |
9 |
- |
||||||||||||||||||||
Other |
4 |
(2) |
12 |
8 |
||||||||||||||||||||
Less: |
||||||||||||||||||||||||
Interest expense |
60 |
55 |
239 |
238 |
||||||||||||||||||||
Equity AFUDC |
26 |
13 |
76 |
33 |
||||||||||||||||||||
Net cash paid for income taxes |
4 |
1 |
12 |
6 |
||||||||||||||||||||
Distributions to non-controlling interests |
8 |
7 |
31 |
29 |
||||||||||||||||||||
Maintenance capital expenditures |
94 |
106 |
314 |
270 |
||||||||||||||||||||
Total Distributable Cash Flow |
$ 260 |
$ 245 |
$ 1,205 |
$ 1,055 |
||||||||||||||||||||
Distributions |
$ 976 |
$ 845 |
||||||||||||||||||||||
Coverage Ratio |
1.2x |
1.2x |
||||||||||||||||||||||
(a) Excludes $403 million and $129 million of distributions from equity affiliates for the twelve month period ended December 31, 2015 and 2014, respectively. |
||||||||||||||||||||||||
Spectra Energy Partners, LP |
||||||||||||||||||||||||
Reported to Ongoing Earnings Reconciliation |
||||||||||||||||||||||||
December 2015 Quarter-to-date |
||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||
(In millions) |
||||||||||||||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND DEPRECIATION AND AMORTIZATION |
Reported Earnings |
Special |
Ongoing Earnings |
|||||||||||||||||||||
U.S. Transmission |
$ |
413 |
$ |
— |
$ |
413 |
||||||||||||||||||
Liquids |
62 |
— |
62 |
|||||||||||||||||||||
Total Reportable Segment EBITDA |
475 |
— |
475 |
|||||||||||||||||||||
Other |
(18) |
— |
(18) |
|||||||||||||||||||||
Total Reportable Segment and other EBITDA |
$ |
457 |
$ |
— |
$ |
457 |
||||||||||||||||||
EARNINGS |
||||||||||||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
457 |
$ |
— |
$ |
457 |
||||||||||||||||||
Depreciation and Amortization |
(75) |
— |
(75) |
|||||||||||||||||||||
Interest Expense |
(60) |
1 |
A |
(59) |
||||||||||||||||||||
Other Income and Expenses |
(1) |
— |
(1) |
|||||||||||||||||||||
Income Tax Expense |
(4) |
— |
(4) |
|||||||||||||||||||||
Total Net Income |
317 |
1 |
318 |
|||||||||||||||||||||
Total Net Income - Noncontrolling Interests |
(13) |
— |
(13) |
|||||||||||||||||||||
Total Net Income - Controlling Interests |
$ |
304 |
$ |
1 |
$ |
305 |
||||||||||||||||||
A - Net write-off of regulatory assets and liabilities at Ozark Gas Transmission due to discontinuance of regulatory accounting.
|
||||||||||||||||||||||||
Spectra Energy Partners, LP |
|||||||||||||||
Reported to Ongoing Earnings Reconciliation |
|||||||||||||||
December 2015 Year-to-date |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(In millions) |
|||||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND |
Reported Earnings |
Special |
Ongoing Earnings |
||||||||||||
U.S. Transmission |
$ |
1,599 |
$ |
9 |
A |
$ |
1,608 |
||||||||
Liquids |
283 |
— |
283 |
||||||||||||
Total Reportable Segment EBITDA |
1,882 |
9 |
1,891 |
||||||||||||
Other |
(66) |
— |
(66) |
||||||||||||
Total Reportable Segment and other EBITDA |
$ |
1,816 |
$ |
9 |
$ |
1,825 |
|||||||||
EARNINGS |
|||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
1,816 |
$ |
9 |
$ |
1,825 |
|||||||||
Depreciation and Amortization |
(295) |
— |
(295) |
||||||||||||
Interest Expense |
(239) |
1 |
B |
(238) |
|||||||||||
Other Income and Expenses |
(5) |
— |
(5) |
||||||||||||
Income Tax Expense |
(12) |
— |
(12) |
||||||||||||
Total Net Income |
1,265 |
10 |
1,275 |
||||||||||||
Total Net Income - Noncontrolling Interests |
(40) |
— |
(40) |
||||||||||||
Total Net Income - Controlling Interests |
$ |
1,225 |
$ |
10 |
$ |
1,235 |
|||||||||
A - Asset impairment at Ozark Gas Gathering. |
|||||||||||||||
B - Net write-off of regulatory assets and liabilities at Ozark Gas Transmission due to discontinuance of regulatory accounting.
|
|||||||||||||||
Spectra Energy Partners, LP |
|||||||
Reported to Ongoing Earnings Reconciliation |
|||||||
December 2014 Quarter-to-date |
|||||||
(Unaudited) |
|||||||
(In millions) |
|||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND |
Reported/ |
||||||
U.S. Transmission |
$ |
369 |
|||||
Liquids |
71 |
||||||
Total Reportable Segment EBITDA |
440 |
||||||
Other |
(16) |
||||||
Total Reportable Segment and other EBITDA |
$ |
424 |
|||||
EARNINGS |
|||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
424 |
|||||
Depreciation and Amortization |
(72) |
||||||
Interest Expense |
(55) |
||||||
Other Income and Expenses |
(1) |
||||||
Income Tax Expense |
(6) |
||||||
Total Net Income |
290 |
||||||
Total Net Income - Noncontrolling Interests |
(7) |
||||||
Total Net Income - Controlling Interests |
$ |
283 |
|||||
Spectra Energy Partners, LP |
|||||||||||||||
Reported to Ongoing Earnings Reconciliation |
|||||||||||||||
December 2014 Year-to-date |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(In millions) |
|||||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND |
Reported Earnings |
Special |
Ongoing Earnings |
||||||||||||
U.S. Transmission |
$ |
1,415 |
$ |
— |
$ |
1,415 |
|||||||||
Liquids |
240 |
— |
240 |
||||||||||||
Total Reportable Segment EBITDA |
1,655 |
— |
1,655 |
||||||||||||
Other |
(64) |
— |
(64) |
||||||||||||
Total Reportable Segment and other EBITDA |
$ |
1,591 |
$ |
— |
$ |
1,591 |
|||||||||
EARNINGS |
|||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
1,591 |
$ |
— |
$ |
1,591 |
|||||||||
Depreciation and Amortization |
(288) |
— |
(288) |
||||||||||||
Interest Expense |
(238) |
— |
(238) |
||||||||||||
Other Income and Expenses |
(3) |
— |
(3) |
||||||||||||
Income Tax Expense |
(35) |
23 |
A |
(12) |
|||||||||||
Total Net Income |
1,027 |
23 |
1,050 |
||||||||||||
Total Net Income - Noncontrolling Interests |
(23) |
— |
(23) |
||||||||||||
Total Net Income - Controlling Interests |
$ |
1,004 |
$ |
23 |
$ |
1,027 |
|||||||||
A - Adjustment of federal income tax liabilities related to the dropdown. |
Logo - http://photos.prnewswire.com/prnh/20071107/CLW064
SOURCE Spectra Energy Partners, LP
HOUSTON, Feb. 3, 2016 /PRNewswire/ --
Year-End Highlights:
Spectra Energy Corp (NYSE: SE) today reported fourth quarter and year-end 2015 financial results. For the quarter, ongoing earnings before interest, taxes, depreciation, and amortization (EBITDA) were $672 million, compared with $810 million in the prior-year quarter. For the year, ongoing EBITDA was $2.75 billion, compared with $3.15 billion in the prior year.
Ongoing distributable cash flow (DCF) for the quarter was $201 million, compared with $316 million in the same quarter last year. For the year, ongoing DCF was $1.29 billion, compared with $1.46 billion in 2014.
Fourth quarter 2015 ongoing net income from controlling interests was $189 million, or $0.28 diluted earnings per share (EPS), compared with $316 million, or $0.47 diluted EPS, during the prior-year quarter. Reported net income from controlling interests for the quarter was $(263) million, or $(0.39) diluted EPS, compared with $316 million, or $0.47 diluted EPS, in 2014. Fourth quarter 2015 results include special items of $452 million, or $0.67 diluted EPS, driven largely by non-cash goodwill and asset impairments totaling $445 million.
Ongoing net income from controlling interests was $775 million in 2015, or $1.15 diluted EPS, compared with $1.09 billion, or $1.62 diluted EPS, during the prior year. Reported net income from controlling interests was $196 million in 2015, or $0.29 diluted EPS, compared with $1.08 billion, or $1.61 diluted EPS, in 2014. Full year 2015 results include special items of $579 million, or $0.86 diluted EPS, driven largely by non-cash goodwill and asset impairments totaling $561 million.
Tables detailing the fourth quarter and full-year special items are shown later in this release.
CEO COMMENT
"Our 2015 results illustrate the resiliency of our business model. Even in a year with dramatically lower commodity prices and a lower Canadian dollar than we had projected, we managed to beat our DCF expectations by 7 percent and ended the year with a higher than expected dividend coverage ratio of 1.3 times," said Greg Ebel, chief executive officer, Spectra Energy. "We continued to build on our solid natural gas transmission portfolio, which generates 90 percent of its revenue from long-term, fixed-fee contracts with high credit-quality customers and little volume risk. As a result of this stability, we are positioned to continue providing reliable and growing dividends for our investors, as demonstrated by the 14-cent per share increase for 2016 that we recently announced.
"Looking forward, we continue to have more than $8 billion of contractually secured projects in our execution backlog, 75 percent of which are supported by demand-pull customers such as local utilities. The growing demand for our assets, as well as the decisive actions we took in 2015 to strengthen our business, have prepared us well for 2016 and beyond."
SEGMENT RESULTS
Spectra Energy Partners
Spectra Energy Partners reported fourth quarter 2015 EBITDA of $484 million, compared with $444 million in fourth quarter 2014. These results reflect increased earnings from expansion projects in the natural gas transmission business. The increase was partially offset by lower equity earnings from Sand Hills and Southern Hills natural gas liquids (NGL) pipelines, which Spectra Energy Partners owned for approximately one month of the quarter.
Year-end 2015 ongoing EBITDA for Spectra Energy Partners was $1.91 billion, compared with $1.67 billion in 2014. The 2015 period excludes a special item of $9 million related to a non-cash impairment of the Ozark Gas Gathering asset.
Distribution
Distribution reported fourth quarter 2015 EBITDA of $113 million, compared with $132 million in fourth quarter 2014. The decrease was mainly due to the effect of a lower Canadian dollar.
Year-end 2015 EBITDA for Distribution was $473 million, compared with $552 million in 2014.
Western Canada Transmission & Processing
Western Canada Transmission & Processing fourth quarter 2015 ongoing EBITDA was $123 million, compared with $250 million in fourth quarter 2014. The 2015 period excludes special items of $7 million for employee and overhead reductions and $7 million for a non-cash asset impairment. The segment's ongoing results reflect the effect of a lower Canadian dollar and lower earnings at Empress, largely due to the net effect of the unrealized mark-to-market value associated with the risk management program.
Year-end 2015 ongoing EBITDA for Western Canada Transmission & Processing was $516 million, compared with $754 million in 2014. The 2015 period excludes special items totaling $25 million, which were primarily associated with employee and overhead reductions.
Field Services
Spectra Energy reported ongoing EBITDA from Field Services of $(36) million in fourth quarter 2015, compared with $(18) million in fourth quarter 2014. The 2015 period excludes special items of $172 million, primarily from non-cash asset impairments as a result of the continuing low commodity price environment. The decrease in ongoing EBITDA was primarily attributable to lower commodity prices, partially offset by asset growth, improved operating efficiencies, and other initiatives, as well as the increase in ownership of the Sand Hills and Southern Hills NGL pipelines for approximately two months of the quarter. As a reminder, Spectra Energy's EBITDA from Field Services represents the company's 50 percent share of DCP Midstream's net income plus gains from DPM unit issuances.
During the fourth quarters of 2015 and 2014, respectively, NGL prices averaged $0.42 per gallon versus $0.68 per gallon, NYMEX natural gas averaged $2.27 per million British thermal units (MMBtu) versus $4.00 per MMBtu, and crude oil averaged approximately $42 per barrel versus $73 per barrel.
On a full-year basis for 2015 and 2014, respectively, NGL prices averaged $0.45 per gallon versus $0.89 per gallon, NYMEX natural gas averaged $2.66 per MMBtu versus $4.41 per MMBtu, and crude oil averaged approximately $49 per barrel versus $93 per barrel.
Year-end 2015 ongoing EBITDA for Field Services was $(106) million, compared with $229 million in 2014. The 2015 period excludes special items of $355 million, primarily due to non-cash goodwill and asset impairments. The 2014 period excludes special items of $12 million, primarily due to a non-cash goodwill impairment.
Other
"Other" reported ongoing net expenses of $12 million and a net benefit of $2 million in the fourth quarters of 2015 and 2014, respectively, reflecting higher corporate costs, including employee benefits costs. Full-year 2015 ongoing net expenses for "Other" were $51 million, compared with $58 million in 2014. Both the 2015 quarter and year-end periods exclude a special item of $333 million related to non-cash goodwill impairments associated with the Westcoast acquisition in 2002.
"Other" primarily consists of corporate expenses, including benefits, and captive insurance.
ADDITIONAL FINANCIAL INFORMATION
Interest Expense
Interest expense was $156 million in fourth quarter 2015, compared with $158 million in fourth quarter 2014, reflecting a lower Canadian dollar and lower average rates, partially offset by higher average long-term debt balances.
Income Taxes
Excluding a $62 million tax benefit related to asset impairments in the current quarter, income tax expense was $59 million in fourth quarter 2015, compared with $77 million in fourth quarter 2014. The decrease in tax expense was mainly due to lower earnings and a lower effective state tax rate.
Excluding the tax impact of special items, the effective tax rate was 20 percent in fourth quarter 2015, compared with 17 percent in fourth quarter 2014.
Foreign Currency
Net income from controlling interests for the quarter was lower by $6 million due to the lower Canadian dollar.
Liquidity and Capital Expenditures
Total debt outstanding at Spectra Energy as of December 31, 2015, was $14.7 billion. Total Spectra Energy liquidity at the end of the quarter was $2.8 billion, including $1.7 billion of available liquidity at Spectra Energy Partners. Total capital and investment spending for the quarter was $1.06 billion, excluding contributions from noncontrolling interests. The spending consisted of $848 million of growth capital expenditures and $216 million of maintenance capital expenditures.
For the year, total capital and investment spending was $2.97 billion, excluding contributions from noncontrolling interests, and was mainly comprised of approximately $2.28 billion of growth capital expenditures and $691 million of maintenance capital expenditures.
Effects of Fourth Quarter 2015 Special Items
($MM) |
EBITDA |
Net Income(1) |
EPS |
Cash |
Ongoing |
$ 672 |
$ 189 |
$ 0.28 |
|
Adjustments related to Special Items |
||||
Goodwill impairments (2) |
$ (333) |
$ (333) |
$ (0.49) |
$ 0 |
DCP special items |
(172) |
(110) |
(0.16) |
0 |
Other special items |
(14) |
(9) |
(0.02) |
(7) |
Total Special Items |
$ (519) |
$ (452) |
$ (0.67) |
$ (7) |
Reported |
$ 153 |
$ (263) |
$ (0.39) |
|
(1) Represents net income from controlling interests (2) Recorded in Other at SE |
Effects of Year-to-Date 2015 Special Items
($MM) |
EBITDA |
Net Income(1) |
EPS |
Cash |
Ongoing |
$2,746 |
$ 775 |
$ 1.15 |
|
Adjustments related to Special Items |
||||
Goodwill impairments (2) |
$ (333) |
$ (333) |
$ (0.49) |
$ 0 |
DCP special items |
(355) |
(224) |
(0.33) |
0 |
Other special items |
(34) |
(22) |
(0.04) |
(18) |
Total Special Items |
$ (722) |
$ (579) |
$ (0.86) |
$ (18) |
Reported |
$ 2,024 |
$ 196 |
$ 0.29 |
|
(1) Represents net income from controlling interests (2) Recorded in Other at SE |
EXPANSION PROJECT UPDATES
Spectra Energy continues to make progress on securing $35 billion in new projects by the end of the decade. At the end of 2015, the company had:
Spectra Energy Partners
Spectra Energy Partners has advanced numerous projects across the system. The company filed Federal Energy Regulatory Commission (FERC) certificate applications in the quarter for the Atlantic Bridge, Access South, Adair Southwest, and Lebanon Extension projects.
The NEXUS project, which is supported by local distribution companies (LDCs) as well as Marcellus and Utica producers, also filed its application with FERC, and reached another regulatory milestone in the quarter with the receipt of Ontario Energy Board (OEB) approval for the Canadian utility shippers. The joint venture with DTE will allow customers to move up to 1.5 billion cubic feet per day (Bcf/d) through Ohio and Michigan markets to the Dawn Hub, which is the second largest physically traded gas hub in North America and is owned and operated by Union Gas. NEXUS has secured additional connections with four natural gas distribution companies in Ohio, including the two largest in the state, two natural gas-fired power plants, and three industrial parks, demonstrating the value of the project path connecting to the largest natural gas supply source in North America. These connections could add incremental load across northern Ohio of up to 1.4 Bcf/d. NEXUS is on target for a November 2017 in-service date.
The AIM project, supported by New England LDCs, has made significant construction progress and is well on the way to its planned in-service date in the second half of 2016. A number of other projects are on track to meet their respective in-service dates, including the Sabal Trail, Ozark, Salem Lateral, Gulf Markets, Loudon Expansion, TEAL, and PennEast projects.
In the liquids business, the Express Enhancement project is supported by long-term contracts and is on schedule for completion by the end of 2016. The strong response to this system optimization project demonstrates that the Express pipeline's incumbent position is a substantial advantage in responding quickly to market demand.
Access Northeast is focused on the New England electric power market and saving consumers money while improving the reliability of the region's energy system. This solution maximizes existing infrastructure corridors, by utilizing the Algonquin and Maritimes & Northeast pipelines, which directly connect to more than 60 percent of the ISO-New England power plants. In addition, the four new natural gas-fired electric generation plants that have cleared the 2017 and 2018 ISO-NE forward capacity auctions will be located on the Algonquin pipeline, further demonstrating the company's very strong position in New England.
Access Northeast will carry natural gas from the least expensive supply areas, via multiple optional paths, directly to the majority of the power plants in New England. It will cost-effectively deliver supply when power generators need it, with new tariff services to handle the peak hour, quick start, and seasonal needs.
Access Northeast submitted its FERC pre-file application during the quarter and has recently executed electric distribution contracts in Massachusetts equaling more than 40 percent of the 0.9 Bcf/d capacity designed for generators. Progress is being made in other states, and Access Northeast anticipates state approvals for contracts later this year. The project continues to advance toward a late 2018 initial in-service date.
Distribution
Union Gas' storage and transmission system continues to grow and increase in importance to Eastern Canada and the Northeast U.S.
The 2015 Dawn-Parkway expansion project was placed into service on time and under budget during the quarter. Future growth opportunities also solidified with OEB approvals for the 2016 and 2017 Dawn-Parkway expansions, along with the Burlington-Oakville transmission reinforcement project. These expansion projects are now in execution and on schedule for their respective in-service dates.
Western Canada Transmission & Processing
Western Canada originated two new supply-push projects in 2015, totaling about 290 million cubic feet per day in capacity: High Pine and Wyndwood. These projects are underpinned by long-term contracts with Montney producers holding substantial land bases and seeking markets at Station 2 in British Columbia, AECO in Alberta, as well as export markets via multiple paths. High Pine is on schedule to go into service in 2016, while Wyndwood, which was placed into execution in the fourth quarter, has an expected in-service date of 2018. Both projects will drive growth on the company's BC Pipeline, which provides producer access to downstream markets.
The Jackfish Lake project is proceeding on schedule to be in service in 2017. The RAM project will increase reliability and maintainability on our fully contracted 1.5 Bcf/d T-South system, is proceeding on schedule, and will come on-line in stages, with full in-service in 2018. Upon completion, RAM will allow significantly higher summer load factors than previous years, to meet increased demands for low-cost British Columbia production in the Pacific Northwest.
High Pine, Jackfish Lake and RAM were all filed with the National Energy Board (NEB) during the quarter.
Additional Information
Additional information about fourth quarter 2015 earnings can be obtained via the Spectra Energy website: www.spectraenergy.com.
The analyst call, held jointly with Spectra Energy Partners, is scheduled for today, Wednesday, February 3, 2016, at 8 a.m. CT. The webcast will be available via the Investors sections of the Spectra Energy and Spectra Energy Partners websites. The conference call can be accessed by dialing (888) 252-3715 in the U.S. or Canada, or (706) 634-8942 internationally. The conference ID is 89326071 or "Spectra Energy / Spectra Energy Partners Earnings Call."
A replay of the call will be available until 5 p.m. CT on Tuesday, May 3, 2016, by dialing (800) 585-8367 in the U.S. or Canada, or (404) 537-3406 internationally, and using the above conference ID. A replay and transcript also will be available via the Investors sections of the Spectra Energy and Spectra Energy Partners websites.
Non-GAAP Financial Measures
We use ongoing net income from controlling interests and ongoing diluted EPS as measures to evaluate operations of the company. These measures are non-GAAP financial measures as they represent net income from controlling interests and diluted EPS, excluding special items. Special items represent certain charges and credits which we believe will not be recurring on a regular basis. We believe that the presentation of ongoing net income from controlling interests and ongoing diluted EPS provides useful information to investors, as it allows investors to more accurately compare our ongoing performance across periods. The most directly comparable GAAP measures for ongoing net income from controlling interests and ongoing diluted EPS are reported net income from controlling interests and reported diluted EPS.
We use earnings from continuing operations before interest, income taxes, and depreciation and amortization (EBITDA) and ongoing EBITDA, non-GAAP financial measures, as performance measures for Spectra Energy Corp. Ongoing EBITDA represents EBITDA excluding special items. We believe that the presentation of EBITDA and ongoing EBITDA provides useful information to investors, as it allows investors to more accurately compare Spectra Energy Corp's performance across periods. The most directly comparable GAAP measure for EBITDA and ongoing EBITDA for Spectra Energy Corp is net income.
The primary performance measure used by us to evaluate segment performance is segment EBITDA. We consider segment EBITDA, which is the GAAP measure used to report segment results, to be a good indicator of each segment's operating performance from its continuing operations as it represents the results of our segments' operations before depreciation and amortization without regard to financing methods or capital structures. Our segment EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate EBITDA in the same manner.
We also use ongoing segment EBITDA and ongoing Other EBITDA (net expenses) as measures of performance. Ongoing segment EBITDA and ongoing Other EBITDA are non-GAAP financial measures, as they represent reported segment EBITDA and reported Other EBITDA, excluding special items. We believe that the presentation of ongoing segment EBITDA and ongoing Other EBITDA provides useful information to investors, as it allows investors to more accurately compare a segment's or Other's ongoing performance across periods. The most directly comparable GAAP measures for ongoing segment EBITDA and ongoing Other EBITDA are reported segment EBITDA and reported Other EBITDA.
We have also presented Distributable Cash Flow (DCF), which is a non-GAAP financial measure. We believe that the presentation of DCF provides useful information to investors, as it represents the cash generation capabilities of the company to support dividend growth. We also use ongoing DCF, which is a non-GAAP financial measure, as it represents DCF excluding the cash effect of special items. The most directly comparable GAAP measure for DCF and ongoing DCF is net income. We also use DCF coverage, which is a non-GAAP financial measure, as it represents DCF divided by dividends declared on common stock. The most directly comparable GAAP measure for DCF coverage is reported EPS.
The non-GAAP financial measures presented in this press release should not be considered in isolation or as an alternative to financial measures presented in accordance with GAAP. These non-GAAP financial measures may not be comparable to similarly titled measures of other companies because other companies may not calculate these measures in the same manner.
Forward-Looking Statements
This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on our beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an effect on rate structure, and affect the speed at and degree to which competition enters the natural gas and oil industries; outcomes of litigation and regulatory investigations, proceedings or inquiries; weather and other natural phenomena, including the economic, operational and other effects of hurricanes and storms; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; general economic conditions, including the risk of a prolonged economic slowdown or decline, or the risk of delay in a recovery, which can affect the long-term demand for natural gas and oil and related services; potential effects arising from terrorist attacks and any consequential or other hostilities; changes in environmental, safety and other laws and regulations; the development of alternative energy resources; results and costs of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general market and economic conditions; increases in the cost of goods and services required to complete capital projects; declines in the market prices of equity and debt securities and resulting funding requirements for defined benefit pension plans; growth in opportunities, including the timing and success of efforts to develop U.S. and Canadian pipeline, storage, gathering, processing and other related infrastructure projects and the effects of competition; the performance of natural gas and oil transmission and storage, distribution, and gathering and processing facilities; the extent of success in connecting natural gas and oil supplies to gathering, processing and transmission systems and in connecting to expanding gas and oil markets; the effects of accounting pronouncements issued periodically by accounting standard-setting bodies; conditions of the capital markets during the periods covered by forward-looking statements; and the ability to successfully complete merger, acquisition or divestiture plans; regulatory or other limitations imposed as a result of a merger, acquisition or divestiture; and the success of the business following a merger, acquisition or divestiture. These factors, as well as additional factors that could affect our forward-looking statements, are described under the headings "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Information" in our 2014 Form 10-K, filed on February 27, 2015, and in our other filings made with the Securities and Exchange Commission (SEC), which are available via the SEC's website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. All forward-looking statements in this release are made as of the date hereof and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include more than 21,000 miles of natural gas, natural gas liquids, and crude oil pipelines; approximately 300 billion cubic feet (Bcf) of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com and www.spectraenergypartners.com.
Spectra Energy Corp | ||||||||||||||||
Quarterly Highlights | ||||||||||||||||
December 2015 | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In millions, except per-share amounts and where noted) | ||||||||||||||||
These results include the impact of special items | ||||||||||||||||
Quarters Ended |
Years Ended | |||||||||||||||
2015 |
2014 |
2015 |
2014 | |||||||||||||
COMMON STOCK DATA |
||||||||||||||||
Earnings (Loss) Per Share, Diluted |
$ |
(0.39) |
$ |
0.47 |
$ |
0.29 |
$ |
1.61 |
||||||||
Dividends Per Share |
$ |
0.370 |
$ |
0.370 |
$ |
1.480 |
$ |
1.375 |
||||||||
Weighted-Average Shares Outstanding, Diluted |
673 |
672 |
672 |
672 |
||||||||||||
INCOME |
||||||||||||||||
Operating Revenues |
$ |
1,316 |
$ |
1,600 |
$ |
5,234 |
$ |
5,903 |
||||||||
Total Reportable Segment EBITDA |
498 |
808 |
2,408 |
3,192 |
||||||||||||
Net Income (Loss) - Controlling Interests |
(263) |
316 |
196 |
1,082 |
||||||||||||
EBITDA BY BUSINESS SEGMENT |
||||||||||||||||
Spectra Energy Partners |
$ |
484 |
$ |
444 |
$ |
1,905 |
$ |
1,669 |
||||||||
Distribution |
113 |
132 |
473 |
552 |
||||||||||||
Western Canada Transmission & Processing |
109 |
250 |
491 |
754 |
||||||||||||
Field Services |
(208) |
(18) |
(461) |
217 |
||||||||||||
Total Reportable Segment EBITDA |
498 |
808 |
2,408 |
3,192 |
||||||||||||
Other EBITDA |
(345) |
2 |
(384) |
(58) |
||||||||||||
Total Reportable Segment and Other EBITDA |
$ |
153 |
$ |
810 |
$ |
2,024 |
$ |
3,134 |
||||||||
DISTRIBUTABLE CASH FLOW |
||||||||||||||||
Distributable Cash Flow |
$ |
194 |
$ |
316 |
$ |
1,274 |
$ |
1,460 |
||||||||
Coverage Ratio |
1.3x |
1.6x |
||||||||||||||
CAPITAL AND INVESTMENT EXPENDITURES |
||||||||||||||||
Spectra Energy Partners (a) |
$ |
2,007 |
$ |
1,241 |
||||||||||||
Distribution |
544 |
427 |
||||||||||||||
Western Canada Transmission & Processing |
360 |
473 |
||||||||||||||
Other (b) |
61 |
146 |
||||||||||||||
Total Capital and Investment Expenditures (a,b) |
$ |
2,972 |
$ |
2,287 |
||||||||||||
Expansion and Investment (a,b) |
$ |
2,281 |
$ |
1,547 |
||||||||||||
Maintenance and Other |
691 |
740 |
||||||||||||||
Total Capital and Investment Expenditures (a,b) |
$ |
2,972 |
$ |
2,287 |
||||||||||||
December 31, | ||||||||||||||||
2015 |
2014 | |||||||||||||||
CAPITALIZATION |
||||||||||||||||
Common Equity - Controlling Interests |
26.6 |
% |
32.2 |
% | ||||||||||||
Noncontrolling Interests and Preferred Stock |
13.6 |
% |
9.9 |
% | ||||||||||||
Total Debt |
59.8 |
% |
57.9 |
% | ||||||||||||
Total Debt |
$ |
14,656 |
$ |
14,637 |
||||||||||||
Book Value Per Share (c) |
$ |
9.73 |
$ |
12.16 |
||||||||||||
Actual Shares Outstanding |
671 |
671 |
||||||||||||||
(a) Excludes contributions received from noncontrolling interests of $216 million in 2015 and $53 million in 2014. 2014 period includes an investment in SESH of $94 million, used by SESH to retire debt. | ||||||||||||||||
(b) 2014 period includes an investment in SESH of $95 million, used by SESH to retire debt. | ||||||||||||||||
(c) Represents controlling interests. |
Spectra Energy Corp | |||||||||||||||||||||||||||
Quarters Ended |
Years Ended | ||||||||||||||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||||||||||||||
SPECTRA ENERGY PARTNERS |
|||||||||||||||||||||||||||
Operating Revenues |
$ |
634 |
$ |
599 |
$ |
2,455 |
$ |
2,269 |
|||||||||||||||||||
Operating Expenses |
|||||||||||||||||||||||||||
Operating, Maintenance and Other |
222 |
213 |
828 |
781 |
|||||||||||||||||||||||
Other Income and Expenses |
72 |
58 |
278 |
181 |
|||||||||||||||||||||||
EBITDA |
$ |
484 |
$ |
444 |
$ |
1,905 |
$ |
1,669 |
|||||||||||||||||||
Express Pipeline Revenue Receipts, MBbl/d (a) |
239 |
240 |
239 |
223 |
|||||||||||||||||||||||
Platte PADD II Deliveries, MBbl/d |
140 |
168 |
162 |
170 |
|||||||||||||||||||||||
DISTRIBUTION |
|||||||||||||||||||||||||||
Operating Revenues |
$ |
366 |
$ |
505 |
$ |
1,527 |
$ |
1,843 |
|||||||||||||||||||
Operating Expenses |
|||||||||||||||||||||||||||
Natural Gas Purchased |
152 |
261 |
691 |
879 |
|||||||||||||||||||||||
Operating, Maintenance and Other |
101 |
112 |
363 |
411 |
|||||||||||||||||||||||
Other Income and Expenses |
— |
— |
— |
(1) |
|||||||||||||||||||||||
EBITDA |
$ |
113 |
$ |
132 |
$ |
473 |
$ |
552 |
|||||||||||||||||||
Number of Customers, Thousands |
1,437 |
1,420 |
|||||||||||||||||||||||||
Heating Degree Days, Fahrenheit |
2,017 |
2,527 |
7,387 |
8,111 |
|||||||||||||||||||||||
Pipeline Throughput, TBtu (b) |
165 |
177 |
759 |
713 |
|||||||||||||||||||||||
Canadian Dollar Exchange Rate, Average |
1.34 |
1.14 |
1.28 |
1.10 |
|||||||||||||||||||||||
WESTERN CANADA TRANSMISSION & PROCESSING |
|||||||||||||||||||||||||||
Operating Revenues |
$ |
323 |
$ |
519 |
$ |
1,285 |
$ |
1,902 |
|||||||||||||||||||
Operating Expenses |
|||||||||||||||||||||||||||
Natural Gas and Petroleum Products Purchased |
69 |
114 |
193 |
466 |
|||||||||||||||||||||||
Operating, Maintenance and Other |
149 |
159 |
611 |
687 |
|||||||||||||||||||||||
Other Income and Expenses |
4 |
4 |
10 |
5 |
|||||||||||||||||||||||
EBITDA |
$ |
109 |
$ |
250 |
$ |
491 |
$ |
754 |
|||||||||||||||||||
Pipeline Throughput, TBtu |
234 |
249 |
923 |
934 |
|||||||||||||||||||||||
Volumes Processed, TBtu |
165 |
190 |
658 |
721 |
|||||||||||||||||||||||
Canadian Dollar Exchange Rate, Average |
1.34 |
1.14 |
1.28 |
1.10 |
|||||||||||||||||||||||
FIELD SERVICES |
|||||||||||||||||||||||||||
Equity in Earnings (Loss) of DCP Midstream, LLC |
$ |
(208) |
$ |
(18) |
$ |
(461) |
$ |
217 |
|||||||||||||||||||
Cash Distributions to Spectra Energy |
$ |
— |
$ |
58 |
$ |
— |
$ |
237 |
|||||||||||||||||||
Natural Gas Gathered and Processed/Transported, TBtu/day (d) |
7.1 |
7.4 |
7.1 |
7.3 |
|||||||||||||||||||||||
Natural Gas Liquids Production, MBbl/d (c) |
409 |
447 |
410 |
454 |
|||||||||||||||||||||||
Average Natural Gas Price Per MMBtu (d) |
$ |
2.27 |
$ |
4.00 |
$ |
2.66 |
$ |
4.41 |
|||||||||||||||||||
Average Natural Gas Liquids Price Per Gallon (e) |
$ |
0.42 |
$ |
0.68 |
$ |
0.45 |
$ |
0.89 |
|||||||||||||||||||
Average Crude Oil Price Per Barrel (f) |
$ |
42.20 |
$ |
73.33 |
$ |
48.80 |
$ |
93.06 |
|||||||||||||||||||
(a) Thousand barrels per day. |
Spectra Energy Corp | |||||||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
(In millions) | |||||||||||||||||||
These results include the impact of special items | |||||||||||||||||||
Quarters Ended |
Years Ended | ||||||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||||||
Operating Revenues |
$ |
1,316 |
$ |
1,600 |
$ |
5,234 |
$ |
5,903 |
|||||||||||
Operating Expenses |
1,219 |
1,035 |
3,801 |
3,979 |
|||||||||||||||
Operating Income |
97 |
565 |
1,433 |
1,924 |
|||||||||||||||
Other Income and Expenses |
(132) |
44 |
(176) |
420 |
|||||||||||||||
Interest Expense |
156 |
158 |
636 |
679 |
|||||||||||||||
Earnings (Loss) Before Income Taxes |
(191) |
451 |
621 |
1,665 |
|||||||||||||||
Income Tax Expense (Benefit) |
(3) |
77 |
161 |
382 |
|||||||||||||||
Net Income (Loss) |
(188) |
374 |
460 |
1,283 |
|||||||||||||||
Net Income - Noncontrolling Interests |
75 |
58 |
264 |
201 |
|||||||||||||||
Net Income (Loss) - Controlling Interests |
$ |
(263) |
$ |
316 |
$ |
196 |
$ |
1,082 |
Spectra Energy Corp | |||||||||||
Condensed Consolidated Balance Sheets | |||||||||||
(Unaudited) | |||||||||||
(In millions) | |||||||||||
December 31, |
December 31, | ||||||||||
2015 |
2014 (a) | ||||||||||
ASSETS |
|||||||||||
Current Assets |
$ |
1,648 |
$ |
2,332 |
|||||||
Investments and Other Assets |
7,056 |
8,007 |
|||||||||
Net Property, Plant and Equipment |
22,918 |
22,307 |
|||||||||
Regulatory Assets and Deferred Debits |
1,301 |
1,352 |
|||||||||
Total Assets |
$ |
32,923 |
$ |
33,998 |
|||||||
LIABILITIES AND EQUITY |
|||||||||||
Current Liabilities |
$ |
3,392 |
$ |
3,809 |
|||||||
Long-term Debt |
12,892 |
12,727 |
|||||||||
Deferred Credits and Other Liabilities |
6,768 |
6,806 |
|||||||||
Preferred Stock of Subsidiaries |
339 |
258 |
|||||||||
Equity |
9,532 |
10,398 |
|||||||||
Total Liabilities and Equity |
$ |
32,923 |
$ |
33,998 |
|||||||
(a) |
The debt issuance costs of $42 million previously reported in Regulatory Assets and Deferred Credits at December 31, 2014 was retrospectively reclassified as a reduction to Long-term Debt at that date, as a result of the adoption of a new accounting standard. | ||||||||||
Spectra Energy Corp | ||||||||||||||||
Distributable Cash Flow | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In millions) | ||||||||||||||||
Quarters Ended December 31, |
Years Ended December 31, | |||||||||||||||
2015 |
2014 |
2015 |
2014 | |||||||||||||
Net Income (Loss) |
$ |
(188) |
$ |
374 |
$ |
460 |
$ |
1,283 |
||||||||
Add: |
||||||||||||||||
Interest expense |
156 |
158 |
636 |
679 |
||||||||||||
Income tax expense (benefit) |
(3) |
77 |
161 |
382 |
||||||||||||
Depreciation and amortization |
190 |
196 |
764 |
796 |
||||||||||||
Foreign currency loss (gain) |
(1) |
5 |
6 |
(3) |
||||||||||||
Less: |
||||||||||||||||
Third party interest income |
1 |
— |
3 |
3 |
||||||||||||
EBITDA |
153 |
810 |
2,024 |
3,134 |
||||||||||||
Add: |
||||||||||||||||
Earnings from equity investments |
4 |
(24) |
(76) |
(370) |
||||||||||||
Non-cash impairments at DCP |
169 |
— |
366 |
9 |
||||||||||||
Distributions from equity investments (a) |
26 |
107 |
209 |
416 |
||||||||||||
Empress non-cash items |
18 |
(60) |
42 |
(60) |
||||||||||||
Non-cash goodwill impairments associated |
333 |
— |
333 |
— |
||||||||||||
Other non-cash asset impairments (b) |
7 |
— |
16 |
— |
||||||||||||
Other |
(5) |
(28) |
25 |
(19) |
||||||||||||
Less: |
||||||||||||||||
Interest expense |
156 |
158 |
636 |
679 |
||||||||||||
Equity AFUDC |
38 |
20 |
111 |
53 |
||||||||||||
Net cash paid (refund) for income taxes |
49 |
(16) |
29 |
(8) |
||||||||||||
Distributions to noncontrolling interests |
58 |
47 |
198 |
175 |
||||||||||||
Maintenance capital expenditures |
210 |
280 |
691 |
751 |
||||||||||||
Total Distributable Cash Flow |
$ |
194 |
$ |
316 |
$ |
1,274 |
$ |
1,460 |
||||||||
(a) Excludes $403 million and $230 million in distributions from equity investments for the years ended December 31, 2015 and 2014, respectively. | ||||||||||||||||
(b) Includes non-cash asset impairments at SEP and at WCTP. |
Spectra Energy Corp | ||||||||||||||||
Reported to Ongoing Earnings Reconciliation | ||||||||||||||||
December 2015 Quarter-to-Date | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In millions, except per-share amounts) | ||||||||||||||||
Reported Earnings |
Special Items |
Ongoing Earnings |
||||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND |
||||||||||||||||
Spectra Energy Partners |
$ |
484 |
$ |
— |
$ |
484 |
||||||||||
Distribution |
113 |
— |
113 |
|||||||||||||
Western Canada Transmission & Processing |
109 |
14 |
A |
123 |
||||||||||||
Field Services |
(208) |
172 |
B |
(36) |
||||||||||||
Total Reportable Segment EBITDA |
498 |
186 |
684 |
|||||||||||||
Other |
(345) |
333 |
C |
(12) |
||||||||||||
Total Reportable Segment and Other EBITDA |
$ |
153 |
$ |
519 |
$ |
672 |
||||||||||
EARNINGS |
||||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
153 |
$ |
519 |
$ |
672 |
||||||||||
Depreciation and Amortization |
(190) |
— |
(190) |
|||||||||||||
Interest Expense |
(156) |
1 |
D |
(155) |
||||||||||||
Interest Income and Other |
2 |
— |
2 |
|||||||||||||
Income Tax (Expense) Benefit |
3 |
(68) |
(65) |
|||||||||||||
Total Net Income |
(188) |
452 |
264 |
|||||||||||||
Total Net Income - Noncontrolling Interests |
(75) |
— |
(75) |
|||||||||||||
Total Net Income - Controlling Interests |
$ |
(263) |
$ |
452 |
$ |
189 |
||||||||||
EARNINGS (LOSS) PER SHARE, BASIC |
$ |
(0.39) |
$ |
0.67 |
$ |
0.28 |
||||||||||
EARNINGS (LOSS) PER SHARE, DILUTED |
$ |
(0.39) |
$ |
0.67 |
$ |
0.28 |
||||||||||
A - Overhead reduction costs and non-cash asset impairment. |
||||||||||||||||
B - Overhead reduction costs, non-cash asset impairments and write-offs. | ||||||||||||||||
C - Non-cash goodwill impairments associated with the Westcoast acquisition in 2002. | ||||||||||||||||
D - Net write-off of regulatory assets and liabilities at Ozark Gas Transmission due to discontinuance of regulatory accounting. | ||||||||||||||||
Weighted Average Shares (reported and ongoing) - in millions |
||||||||||||||||
Basic |
671 |
|||||||||||||||
Diluted |
673 |
Spectra Energy Corp |
|||||||||||||||||
Reported to Ongoing Earnings Reconciliation |
|||||||||||||||||
December 2015 Year-to-date |
|||||||||||||||||
(Unaudited) |
|||||||||||||||||
(In millions, except per-share amounts) |
|||||||||||||||||
Reported Earnings |
Special Items |
Ongoing Earnings |
|||||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND |
|||||||||||||||||
Spectra Energy Partners |
$ |
1,905 |
$ |
9 |
A |
$ |
1,914 |
||||||||||
Distribution |
473 |
— |
473 |
||||||||||||||
Western Canada Transmission & Processing |
491 |
25 |
B |
516 |
|||||||||||||
Field Services |
(461) |
355 |
C |
(106) |
|||||||||||||
Total Reportable Segment EBITDA |
2,408 |
389 |
2,797 |
||||||||||||||
Other |
(384) |
333 |
D |
(51) |
|||||||||||||
Total Reportable Segment and Other EBITDA |
$ |
2,024 |
$ |
722 |
$ |
2,746 |
|||||||||||
EARNINGS |
|||||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
2,024 |
$ |
722 |
$ |
2,746 |
|||||||||||
Depreciation and Amortization |
(764) |
— |
(764) |
||||||||||||||
Interest Expense |
(636) |
1 |
E |
(635) |
|||||||||||||
Interest Income and Other |
(3) |
— |
(3) |
||||||||||||||
Income Tax Expense |
(161) |
(143) |
(304) |
||||||||||||||
Total Net Income |
460 |
580 |
1,040 |
||||||||||||||
Total Net Income - Noncontrolling Interests |
(264) |
(1) |
(265) |
||||||||||||||
Total Net Income - Controlling Interests |
$ |
196 |
$ |
579 |
$ |
775 |
|||||||||||
EARNINGS PER SHARE, BASIC |
$ |
0.29 |
$ |
0.86 |
$ |
1.15 |
|||||||||||
EARNINGS PER SHARE, DILUTED |
$ |
0.29 |
$ |
0.86 |
$ |
1.15 |
|||||||||||
A - Non-cash impairment at Ozark Gas Gathering. | |||||||||||||||||
B - Overhead reduction costs and non-cash asset impairment. |
|||||||||||||||||
C - Overhead reduction costs, net gain on asset sales, and non-cash goodwill and asset impairments and write-offs. | |||||||||||||||||
D - Non-cash goodwill impairments associated with the Westcoast acquisition in 2002. | |||||||||||||||||
E - Net write-off of regulatory assets and liabilities at Ozark Gas Transmission due to discontinuance of regulatory accounting. | |||||||||||||||||
Weighted Average Shares (reported and ongoing) - in millions |
|||||||||||||||||
Basic |
671 |
||||||||||||||||
Diluted |
672 |
Spectra Energy Corp | ||||||||
Reported to Ongoing Earnings Reconciliation | ||||||||
December 2014 Quarter-to-date | ||||||||
(Unaudited) | ||||||||
(In millions, except per-share amounts) | ||||||||
Reported/ Ongoing Earnings |
||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND |
||||||||
Spectra Energy Partners |
$ |
444 |
||||||
Distribution |
132 |
|||||||
Western Canada Transmission & Processing |
250 |
|||||||
Field Services |
(18) |
|||||||
Total Reportable Segment EBITDA |
808 |
|||||||
Other |
2 |
|||||||
Total Reportable Segment and Other EBITDA |
$ |
810 |
||||||
EARNINGS |
||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
810 |
||||||
Depreciation and Amortization |
(196) |
|||||||
Interest Expense |
(158) |
|||||||
Interest Income and Other |
(5) |
|||||||
Income Tax Expense |
(77) |
|||||||
Total Net Income |
374 |
|||||||
Total Net Income - Noncontrolling Interests |
(58) |
|||||||
Total Net Income - Controlling Interests |
$ |
316 |
||||||
EARNINGS PER SHARE, BASIC |
$ |
0.47 |
||||||
EARNINGS PER SHARE, DILUTED |
$ |
0.47 |
||||||
Weighted Average Shares (reported and ongoing) - in millions |
||||||||
Basic |
671 |
|||||||
Diluted |
672 |
Spectra Energy Corp | |||||||||||||||
Reported to Ongoing Earnings Reconciliation | |||||||||||||||
December 2014 Year-to-date | |||||||||||||||
(Unaudited) | |||||||||||||||
(In millions, except per-share amounts) | |||||||||||||||
Reported Earnings |
Special Items |
Ongoing Earnings | |||||||||||||
SEGMENT EARNINGS BEFORE INTEREST, TAXES, AND DEPRECIATION AND AMORTIZATION |
|||||||||||||||
Spectra Energy Partners |
$ |
1,669 |
$ |
— |
$ |
1,669 |
|||||||||
Distribution |
552 |
— |
552 |
||||||||||||
Western Canada Transmission & Processing |
754 |
— |
754 |
||||||||||||
Field Services |
217 |
12 |
A |
229 |
|||||||||||
Total Reportable Segment EBITDA |
3,192 |
12 |
3,204 |
||||||||||||
Other |
(58) |
— |
(58) |
||||||||||||
Total Reportable Segment and Other EBITDA |
$ |
3,134 |
$ |
12 |
$ |
3,146 |
|||||||||
EARNINGS |
|||||||||||||||
Total Reportable Segment EBITDA and Other EBITDA |
$ |
3,134 |
$ |
12 |
$ |
3,146 |
|||||||||
Depreciation and Amortization |
(796) |
— |
(796) |
||||||||||||
Interest Expense |
(679) |
— |
(679) |
||||||||||||
Interest Income and Other |
6 |
— |
6 |
||||||||||||
Income Tax Expense |
(382) |
(4) |
(386) |
||||||||||||
Total Net Income |
1,283 |
8 |
1,291 |
||||||||||||
Total Net Income - Noncontrolling Interests |
(201) |
— |
(201) |
||||||||||||
Total Net Income - Controlling Interests |
$ |
1,082 |
$ |
8 |
$ |
1,090 |
|||||||||
EARNINGS PER SHARE, BASIC |
$ |
1.61 |
$ |
0.01 |
$ |
1.62 |
|||||||||
EARNINGS PER SHARE, DILUTED |
$ |
1.61 |
$ |
0.01 |
$ |
1.62 |
|||||||||
A - Loss on sales of assets and goodwill impairment. |
|||||||||||||||
Weighted Average Shares (reported and ongoing) - in millions |
|||||||||||||||
Basic |
671 |
||||||||||||||
Diluted |
672 |
Spectra Energy Corp | ||||||||||||||||||||||||
Reported to Ongoing Distributable Cash Flow Reconciliation | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
(In millions, except where noted) | ||||||||||||||||||||||||
Quarter Ended |
Quarter Ended | |||||||||||||||||||||||
Reported |
Special Items |
Ongoing |
Reported |
Special Items |
Ongoing | |||||||||||||||||||
Net Income (Loss) |
$ |
(188) |
$ |
452 |
$ |
264 |
$ |
374 |
$ |
— |
$ |
374 |
||||||||||||
Add: |
||||||||||||||||||||||||
Interest expense |
156 |
— |
156 |
158 |
— |
158 |
||||||||||||||||||
Income tax expense (benefit) |
(3) |
67 |
64 |
77 |
— |
77 |
||||||||||||||||||
Depreciation and amortization |
190 |
— |
190 |
196 |
— |
196 |
||||||||||||||||||
Foreign currency loss (gain) |
(1) |
— |
(1) |
5 |
— |
5 |
||||||||||||||||||
Less: |
||||||||||||||||||||||||
Third Party Interest Income |
1 |
— |
1 |
— |
— |
— |
||||||||||||||||||
EBITDA |
153 |
519 |
672 |
810 |
— |
810 |
||||||||||||||||||
Add: |
||||||||||||||||||||||||
Earnings from equity investments |
4 |
(3) |
1 |
(24) |
— |
(24) |
||||||||||||||||||
Non-cash impairments at DCP |
169 |
(169) |
— |
— |
— |
— |
||||||||||||||||||
Distributions from equity investments |
26 |
— |
26 |
107 |
— |
107 |
||||||||||||||||||
Empress non-cash items |
18 |
— |
18 |
(60) |
— |
(60) |
||||||||||||||||||
Non-cash goodwill impairments associated |
333 |
(333) |
— |
— |
— |
— |
||||||||||||||||||
Other non-cash asset impairments |
7 |
(7) |
— |
— |
— |
— |
||||||||||||||||||
Other |
(5) |
— |
(5) |
(28) |
— |
(28) |
||||||||||||||||||
Less: |
||||||||||||||||||||||||
Interest expense |
156 |
— |
156 |
158 |
— |
158 |
||||||||||||||||||
Equity AFUDC |
38 |
— |
38 |
20 |
— |
20 |
||||||||||||||||||
Net cash paid (refund) for income taxes |
49 |
— |
49 |
(16) |
— |
(16) |
||||||||||||||||||
Distributions to non-controlling interests |
58 |
— |
58 |
47 |
— |
47 |
||||||||||||||||||
Maintenance capital expenditures |
210 |
— |
210 |
280 |
— |
280 |
||||||||||||||||||
Total Distributable Cash Flow |
$ |
194 |
$ |
7 |
$ |
201 |
$ |
316 |
$ |
— |
$ |
316 |
Spectra Energy Corp | ||||||||||||||||||||||||
Reported to Ongoing Distributable Cash Flow Reconciliation | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
(In millions, except where noted) | ||||||||||||||||||||||||
Year Ended |
Year Ended | |||||||||||||||||||||||
Reported |
Special Items |
Ongoing |
Reported |
Special Items |
Ongoing | |||||||||||||||||||
Net Income |
$ |
460 |
$ |
579 |
$ |
1,039 |
$ |
1,283 |
$ |
8 |
$ |
1,291 |
||||||||||||
Add: |
||||||||||||||||||||||||
Interest expense |
636 |
— |
636 |
679 |
— |
679 |
||||||||||||||||||
Income tax expense |
161 |
143 |
304 |
382 |
4 |
386 |
||||||||||||||||||
Depreciation and amortization |
764 |
— |
764 |
796 |
— |
796 |
||||||||||||||||||
Foreign currency loss (gain) |
6 |
— |
6 |
(3) |
— |
(3) |
||||||||||||||||||
Less: |
||||||||||||||||||||||||
Third Party Interest Income |
3 |
— |
3 |
3 |
— |
3 |
||||||||||||||||||
EBITDA |
2,024 |
722 |
2,746 |
3,134 |
12 |
3,146 |
||||||||||||||||||
Add: |
||||||||||||||||||||||||
Earnings from equity investments |
(76) |
11 |
(65) |
(370) |
(3) |
(373) |
||||||||||||||||||
Non-cash impairments at DCP |
366 |
(366) |
— |
9 |
(9) |
— |
||||||||||||||||||
Distributions from equity investments |
209 |
— |
209 |
416 |
— |
416 |
||||||||||||||||||
Empress non-cash items |
42 |
— |
42 |
(60) |
— |
(60) |
||||||||||||||||||
Non-cash goodwill impairments associated |
333 |
(333) |
— |
— |
— |
— |
||||||||||||||||||
Other non-cash asset impairments |
16 |
(16) |
— |
— |
— |
— |
||||||||||||||||||
Other |
25 |
— |
25 |
(19) |
— |
(19) |
||||||||||||||||||
Less: |
||||||||||||||||||||||||
Interest expense |
636 |
— |
636 |
679 |
— |
679 |
||||||||||||||||||
Equity AFUDC |
111 |
— |
111 |
53 |
— |
53 |
||||||||||||||||||
Net cash paid (refund) for income taxes |
29 |
— |
29 |
(8) |
— |
(8) |
||||||||||||||||||
Distributions to non-controlling interests |
198 |
— |
198 |
175 |
— |
175 |
||||||||||||||||||
Maintenance capital expenditures |
691 |
— |
691 |
751 |
— |
751 |
||||||||||||||||||
Total Distributable Cash Flow |
$ |
1,274 |
$ |
18 |
$ |
1,292 |
$ |
1,460 |
$ |
— |
$ |
1,460 |
||||||||||||
Dividends declared |
$ |
1,017 |
$ |
924 |
||||||||||||||||||||
Coverage - DCF / Dividend |
1.3x |
1.6x |
Logo - http://photos.prnewswire.com/prnh/20061030/CLM051LOGO
SOURCE Spectra Energy Corp
HOUSTON, Feb. 3, 2016 /PRNewswire/ -- Spectra Energy Partners, LP (NYSE: SEP) announced that the board of directors of its general partner declared a quarterly cash distribution to unitholders of $0.63875 per unit, an increase of 1.25 cents over the previous level of $0.62625 per unit. This is the 33rd consecutive quarter that Spectra Energy Partners has increased its quarterly cash distribution. The cash distribution is payable on February 26, 2016, to unitholders of record at the close of business on February 15, 2016. This quarterly cash distribution equates to $2.555 per unit on an annual basis.
This information is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Under rules applicable to publicly-traded partnerships, our distributions to non-U.S. unitholders are subject to withholding tax at the highest effective applicable rate to the extent attributable to income that is effectively connected with the conduct of a U.S. trade or business. Given the uncertainty at the time of making distributions regarding the amount of any distribution that is attributable to income that is so effectively connected, we intend to treat all of our distributions as attributable to our U.S. operations, and as a result, the entire distribution will be subject to withholding.
Spectra Energy Partners, LP (NYSE: SEP) is a Houston-based master limited partnership, formed by Spectra Energy Corp (NYSE: SE). SEP is one of the largest pipeline MLPs in the United States and connects growing supply areas to high-demand markets for natural gas and crude oil. These assets include more than 15,000 miles of transmission and gathering pipelines, approximately 170 billion cubic feet of natural gas storage, and approximately 4.8 million barrels of crude oil storage.
Logo - http://photos.prnewswire.com/prnh/20071107/CLW064
SOURCE Spectra Energy Partners, LP
HOUSTON, Jan. 7, 2016 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) and Spectra Energy Partners (NYSE: SEP) will announce their fourth quarter 2015 earnings results before the market opens on Wednesday, February 3, 2016, and will hold a joint investor and analyst conference call at 8 a.m. CT that same day.
The webcast will be available via the Investors sections of the Spectra Energy and Spectra Energy Partners websites. The conference call can be accessed by dialing (888) 252-3715 in the U.S. or Canada, or (706) 634-8942 internationally. The conference ID is 89326071 or "Spectra Energy / Spectra Energy Partners Earnings Call."
A replay of the call will be available until 5 p.m. CT on Tuesday, May 3, 2016, by dialing (800) 585-8367 in the U.S. or Canada, or (404) 537-3406 internationally, and using the above conference ID. A replay and transcript also will be available via the Investors sections of the Spectra Energy and Spectra Energy Partners websites.
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include more than 21,000 miles of natural gas, natural gas liquids, and crude oil pipelines; approximately 300 billion cubic feet (Bcf) of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com and www.spectraenergypartners.com.
Logo - http://photos.prnewswire.com/prnh/20061030/CLM051LOGO
Logo - http://photos.prnewswire.com/prnh/20071107/CLW064
SOURCE Spectra Energy Corp; Spectra Energy Partners
HOUSTON, Jan. 6, 2016 /PRNewswire/ -- Spectra Energy Corp (NYSE: SE) and Spectra Energy Partners (NYSE: SEP) will discuss their business outlook and financial plan during an analyst/investor meeting on Thursday, February 4, 2016.
Chief Executive Officer Greg Ebel, Chief Financial Officer Pat Reddy, and other executive leaders will deliver remarks and then address audience questions.
The presentation is scheduled to begin at 8:30 a.m. ET and will be webcast via the Investors sections of the Spectra Energy and Spectra Energy Partners websites. The conference call can be accessed by dialing (888) 252-3715 in the U.S. or Canada, or (706) 634-8942 internationally. The conference ID is 7888893 or "Spectra Energy 2016 Plan."
A replay of the call will be available until 5 p.m. CT on Tuesday, May 3, 2016, by dialing (800) 585-8367 in the U.S. or Canada, or (404) 537-3406 internationally, and using the above conference ID. A replay and transcript also will be available via the Investors sections of the Spectra Energy and Spectra Energy Partners websites.
Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in the United States and Canada include more than 21,000 miles of natural gas, natural gas liquids, and crude oil pipelines; approximately 300 billion cubic feet (Bcf) of natural gas storage; 4.8 million barrels of crude oil storage; as well as natural gas gathering, processing, and local distribution operations. Spectra Energy is the general partner of Spectra Energy Partners (NYSE: SEP), one of the largest pipeline master limited partnerships in the United States and owner of the natural gas and crude oil assets in Spectra Energy's U.S. portfolio. Spectra Energy also has a 50 percent ownership in DCP Midstream, the largest producer of natural gas liquids and the largest natural gas processor in the United States. Spectra Energy has served North American customers and communities for more than a century. For more information, visit www.spectraenergy.com and www.spectraenergypartners.com.
Logo - http://photos.prnewswire.com/prnh/20061030/CLM051LOGO
Logo - http://photos.prnewswire.com/prnh/20071107/CLW064
SOURCE Spectra Energy Corp; Spectra Energy Partners, LP
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Status: (subscriber access)
Parent Entities:
Enbridge Inc.
2016 Dawn Parkway Expansion Project (subscriber access)
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Spectra Energy Corp.
Spectra Inc
Union Gas Limited
AGT Project Maple (subscriber access)
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Texas Eastern Transmission, LP
Enbridge Inc.
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Texas Eastern Transmission, LP
Athabasca Twin Capacity Expansion (subscriber access)
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Enbridge Inc.
Atlantic Bridge Project (subscriber access)
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Maritimes & Northeast Pipeline Limited Partnership (Canada)
Maritimes & Northeast Pipeline, L.L.C. (U.S.)
Algonquin Gas Transmission, LLC
Battle Sands Substation Project at Hardisty Terminal (subscriber access)
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Enbridge Inc.
Bay Of Quinte Replacement Pipeline (subscriber access)
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Spectra Energy Corp.
Spectra Inc
Union Gas Limited
Bayway Lateral Project (subscriber access)
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Spectra Energy Corp.
Beaver Lodge Loop Project (subscriber access)
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Enbridge Inc.
Bernville Compressor Station Project (subscriber access)
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Texas Eastern Transmission, LP
Big Foot Oil Pipeline (subscriber access)
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Enbridge Inc.
Bighorn Processing Facility (subscriber access)
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DCP Midstream, LP
Bobcat Gas Storage Cavern 3 (subscriber access)
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Spectra Energy Corp.
Bright Compressor Station (subscriber access)
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Spectra Energy Corp.
Spectra Inc
Union Gas Limited
Broad Run Connector Project (subscriber access)
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Spectra Energy Corp.
Burlington-Oakville Natural Gas Pipeline (subscriber access)
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Spectra Energy Corp.
Spectra Inc
Union Gas Limited
Calvados Offshore Wind (subscriber access)
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Enbridge Inc.
Cameron Extension Project (subscriber access)
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Enbridge Inc.
Canada Mainline Enhancement Phase I (subscriber access)
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Enbridge Inc.
Canada Mainline Enhancement Phase II (subscriber access)
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Enbridge Inc.
Copiah Storage Project (subscriber access)
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Copiah Storage, LLC
DCP DJ Basin NGL Interconnect Pipeline (subscriber access)
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DCP Midstream, LP
DJ Basin Bypass (subscriber access)
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DCP Midstream, LP
Dawn Compressor Station (subscriber access)
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Spectra Energy Corp.
Spectra Inc
Union Gas Limited
Dawn to Corunna Replacement Project, (subscriber access)
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Enbridge Inc.
Dawn to Parkway Expansion Project (subscriber access)
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Enbridge Inc.
Dawn-Parkway Extension Project (subscriber access)
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Union Gas Limited
Spectra Energy Corp.
ETNG Ridgeline Expansion (subscriber access)
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Enbridge Inc.
East-West Tie Transmission Project (EWT) (subscriber access)
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Enbridge Inc.
Edmonton Terminal (South) Expansion Project (subscriber access)
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Enbridge Inc.
Enbridge Edmonton Power Generation Facility (subscriber access)
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Enbridge Inc.
Enbridge Edmonton to Hardisty Pipeline Project (subscriber access)
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Enbridge Inc.
Enbridge Houston Oil Terminal (subscriber access)
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Enbridge Inc.
Enbridge Line 4 Replacement (subscriber access)
Status: (subscriber access)
Parent Entities:
Enbridge Inc.
Enbridge Line 9 Capacity Expansion Project (subscriber access)
Parent Entities:
Enbridge Inc.
Enbridge Line 9A Reversal (Phase I) Project (subscriber access)
Parent Entities:
Enbridge Inc.
Enbridge Line 9B Reversal (subscriber access)
Parent Entities:
Enbridge Inc.
Enbridge Mainline Optimizations (2019-2021) (subscriber access)
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Enbridge Inc.
Enbridge Mainline Optimizations (2022) (subscriber access)
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Enbridge Inc.
Enbridge Solar Self-Powering (subscriber access)
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Enbridge Inc.
Enbridge Southern Lights Reversal Project (subscriber access)
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Enbridge Inc.
Enbridge Venice Extension (subscriber access)
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Parent Entities:
Enbridge Inc.
Enbridge Western Canadian Capacity Optimizations (subscriber access)
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Enbridge Inc.
Enbridge/Murphy Montney Natural Gas Processing Facility (subscriber access)
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Parent Entities:
Murphy Oil Corporation
Enbridge Inc.
Express Pipeline Pumping Expansion (subscriber access)
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Enbridge Inc.
Express Pipeline LLC
Express Pipeline Ltd.
Fecamp Offshore Wind (subscriber access)
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Parent Entities:
Enbridge Inc.
Frontier Project - NGL Pipeline (subscriber access)
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Enbridge Inc.
Frontier Project - NGL Plant (subscriber access)
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Enbridge Inc.
Fécamp Offshore Wind (subscriber access)
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Enbridge Inc.
Genesee CCS Project (subscriber access)
Status: (subscriber access)
Parent Entities:
Enbridge Inc.
Capital Power Corp
Gladiator Pipeline (subscriber access)
Status: (subscriber access)
Parent Entities:
SemGroup Corporation
DCP Midstream, LP
Gray Oak Pipeline (subscriber access)
Status: (subscriber access)
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Phillips 66
Enbridge Inc.
Andeavor
Gray Oak Pipeline, LLC
Greater Philadelphia Expansion Project (subscriber access)
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Texas Eastern Transmission, LP
Gulfstream Phase VI Expansion (subscriber access)
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Enbridge Inc.
Heidelberg Oil Pipeline (subscriber access)
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Enbridge Inc.
High Pine Expansion Project (subscriber access)
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Spectra Energy Corp.
Enbridge Inc.
Ingleside Low Carbon Ammonia Production & Export Facility (subscriber access)
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Enbridge Inc.
Yara International ASA
Yara Clean Ammonia
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Enbridge Inc.
JACOS Pipeline Project (subscriber access)
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Enbridge Inc.
Jackfish Lake Expansion Project (subscriber access)
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Spectra Energy Corp.
Enbridge Inc.
Jones Creek Crude Oil Storage Terminal (subscriber access)
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Enbridge Inc.
Lambertville-East Project (subscriber access)
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Texas Eastern Transmission, LP
Latham Processing Plant - Train 2 (subscriber access)
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Western Midstream Operating, LP
DCP Midstream, LP
Leamington Pipeline (subscriber access)
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Parent Entities:
Spectra Energy Corp.
Spectra Inc
Union Gas Limited
Line 10 Replacement Project (subscriber access)
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Enbridge Inc.
Line 3 Replacement Program (Canada) (subscriber access)
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Enbridge Inc.
Line 3 Replacement Program (United States) (subscriber access)
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Enbridge Inc.
Line 5 Great Lakes Channel Replacement Project (subscriber access)
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Enbridge Inc.
Line 61 Upgrade Project - Phase 1 (subscriber access)
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Enbridge Inc.
Line 61 Upgrade Project - Phase 2 (subscriber access)
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Enbridge Inc.
Line 67 Upgrade Project - Phase 1 (subscriber access)
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Enbridge Inc.
Line 67 Upgrade Project - Phase 2 (subscriber access)
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Enbridge Inc.
Lobo Compressor (subscriber access)
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Spectra Energy Corp.
Spectra Inc
Union Gas Limited
London Lines Replacement Project (subscriber access)
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Parent Entities:
Enbridge Inc.
Middlesex Extension Project (subscriber access)
Status: (subscriber access)
Parent Entities:
Texas Eastern Transmission, LP
Enbridge Inc.
NEXUS Gas Transmission (subscriber access)
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NEXUS Gas Transmission, LLC
New Creek Wind Project (subscriber access)
Status: (subscriber access)
Parent Entities:
Enbridge Inc.
Norlite Pipeline Project (subscriber access)
Status: (subscriber access)
Parent Entities:
Enbridge Inc.
Northern Gateway Project (subscriber access)
Status: (subscriber access)
Parent Entities:
Enbridge Inc.
O’Connor 2 Natural Gas Processing Plant (subscriber access)
Status: (subscriber access)
Parent Entities:
DCP Midstream, LP
Panhandle Reinforcement Pipeline (subscriber access)
Status: (subscriber access)
Parent Entities:
Spectra Energy Corp.
Spectra Inc
Union Gas Limited
Parkway West Compressor (subscriber access)
Parent Entities:
Spectra Energy Corp.
Spectra Inc
Union Gas Limited
RAM Project (subscriber access)
Status: (subscriber access)
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Spectra Energy Corp.
Sabal Trail Transmission Phase I (subscriber access)
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Sabal Trail Transmission, LLC
Sabal Trail Transmission Phase II (subscriber access)
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Sabal Trail Transmission, LLC
Sabal Trail Transmission Phase III (subscriber access)
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Sabal Trail Transmission, LLC
Saint-Nazaire Offshore Wind Farm (subscriber access)
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Enbridge Inc.
EDF Energies Nouvelles
Sand Hills Expansion Project Phase II (subscriber access)
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DCP Midstream, LP
South Texas Expansion Project (STEP) (subscriber access)
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Texas Eastern Transmission, LP
Southern Access Expansion (subscriber access)
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Parent Entities:
Enbridge Inc.
Southern Access Extension (SAX) Pipeline (subscriber access)
Status: (subscriber access)
Parent Entities:
Enbridge Inc.
Southern Hills Extension Project (subscriber access)
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Parent Entities:
DCP Midstream, LP
Southern Hills Pipeline Expansion (4Q20) (subscriber access)
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Parent Entities:
DCP Midstream, LP
Spruce Ridge Project (subscriber access)
Status: (subscriber access)
Parent Entities:
Spectra Energy Corp.
Stampede Offshore Oil Pipeline (subscriber access)
Status: (subscriber access)
Parent Entities:
Enbridge Inc.
Stratton Ridge Expansion Project (subscriber access)
Status: (subscriber access)
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Texas Eastern Transmission, LP
T-North Capacity Expansion (2028) (subscriber access)
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Parent Entities:
Enbridge Inc.
T-South System Expansion (subscriber access)
Status: (subscriber access)
Parent Entities:
Enbridge Inc.
TETCO Venice Lateral Reversal (subscriber access)
Status: (subscriber access)
Parent Entities:
Texas Eastern Transmission, LP
Texas Crude Offshore Loading Terminal (COLT) (subscriber access)
Status: (subscriber access)
Parent Entities:
Enbridge Inc.
Oiltanking GmbH
Texas Eastern Modernization Phase II (subscriber access)
Status: (subscriber access)
Parent Entities:
Texas Eastern Transmission, LP
Enbridge Inc.
Texas Express Expansion (subscriber access)
Status: (subscriber access)
Parent Entities:
Texas Express Pipeline LLC
Enterprise Products Partners
Midcoast Energy Partners, L.P.
Western Midstream Operating, LP
DCP Midstream, LP
Texas-Louisiana Markets Project (subscriber access)
Status: (subscriber access)
Parent Entities:
Texas Eastern Transmission, LP
VCP - Annova LNG Pipeline Extension (subscriber access)
Status: (subscriber access)
Parent Entities:
Enbridge Inc.
VCP Expansion - Texas LNG Project (subscriber access)
Status: (subscriber access)
Parent Entities:
Enbridge Inc.
Valley Crossing Pipeline, LLC
Valley Crossing Agua Dulce Header System (subscriber access)
Status: (subscriber access)
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Valley Crossing Pipeline, LLC
Valley Crossing Pipeline (Border Crossing) (subscriber access)
Status: (subscriber access)
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Valley Crossing Pipeline, LLC
Valley Crossing Pipeline (Intrastate Portion) (subscriber access)
Status: (subscriber access)
Parent Entities:
Valley Crossing Pipeline, LLC
Vito Offshore Pipeline Project (subscriber access)
Status: (subscriber access)
Parent Entities:
Enbridge Inc.
Wood Buffalo Extension Project (subscriber access)
Status: (subscriber access)
Parent Entities:
Enbridge Inc.
Woodland Pipeline Extension Project (subscriber access)
Status: (subscriber access)
Parent Entities:
Enbridge Inc.
Wyndwood Expansion Project (subscriber access)
Status: (subscriber access)
Parent Entities:
Spectra Energy Corp.
Enbridge Inc.
Yorktown Meter Station Upgrade (subscriber access)
Status: (subscriber access)
Parent Entities:
Algonquin Gas Transmission, LLC
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