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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Spectra Energy Partners, LP Common Units Representing Limited Partner Interests (delisted) | NYSE:SEP | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 35.40 | 0 | 01:00:00 |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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41-2232463
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(State or other jurisdiction of incorporation)
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(IRS Employer Identification No.)
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 6.
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•
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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;
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•
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outcomes of litigation and regulatory investigations, proceedings or inquiries;
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•
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weather and other natural phenomena, including the economic, operational and other effects of hurricanes and storms;
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•
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the timing and extent of changes in interest rates and foreign currency exchange rates;
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•
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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;
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•
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potential effects arising from terrorist attacks and any consequential or other hostilities;
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•
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changes in environmental, safety and other laws and regulations;
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•
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the development of alternative energy resources;
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•
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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;
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•
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increases in the cost of goods and services required to complete capital projects;
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•
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growth in opportunities, including the timing and success of efforts to develop U.S. and Canadian pipeline, storage, gathering and other related infrastructure projects and the effects of competition;
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•
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the performance of natural gas transmission, storage and gathering facilities, and crude oil transportation and storage;
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•
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the extent of success in connecting natural gas and oil supplies to transmission and gathering systems and in connecting to expanding gas and oil markets;
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•
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the effects of accounting pronouncements issued periodically by accounting standard-setting bodies;
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•
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conditions of the capital markets during the periods covered by forward-looking statements; and
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•
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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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Three Months Ended
June 30, |
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Six Months Ended
June 30, |
||||||||||||
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2016
|
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2015
|
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2016
|
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2015
|
||||||||
Operating Revenues
|
|
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|
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|
||||||||
Transportation of natural gas
|
$
|
475
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$
|
454
|
|
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$
|
959
|
|
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$
|
918
|
|
Transportation of crude oil
|
87
|
|
|
90
|
|
|
173
|
|
|
174
|
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||||
Storage of natural gas and other
|
56
|
|
|
59
|
|
|
110
|
|
|
117
|
|
||||
Total operating revenues
|
618
|
|
|
603
|
|
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1,242
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|
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1,209
|
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||||
Operating Expenses
|
|
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|
|
|
|
|
||||||||
Operating, maintenance and other
|
190
|
|
|
178
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|
|
369
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|
|
359
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|
||||
Depreciation and amortization
|
77
|
|
|
73
|
|
|
154
|
|
|
146
|
|
||||
Property and other taxes
|
46
|
|
|
30
|
|
|
90
|
|
|
71
|
|
||||
Total operating expenses
|
313
|
|
|
281
|
|
|
613
|
|
|
576
|
|
||||
Operating Income
|
305
|
|
|
322
|
|
|
629
|
|
|
633
|
|
||||
Other Income and Expenses
|
|
|
|
|
|
|
|
||||||||
Earnings from equity investments
|
30
|
|
|
45
|
|
|
57
|
|
|
85
|
|
||||
Other income and expenses, net
|
31
|
|
|
17
|
|
|
51
|
|
|
26
|
|
||||
Total 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
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|
||||
Net Income
|
305
|
|
|
316
|
|
|
616
|
|
|
617
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|
||||
Net Income—Noncontrolling Interests
|
18
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|
|
9
|
|
|
31
|
|
|
17
|
|
||||
Net Income—Controlling Interests
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$
|
287
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|
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$
|
307
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$
|
585
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|
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$
|
600
|
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Calculation of Limited Partners’ Interest in Net Income:
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Net income—Controlling Interests
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$
|
287
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$
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307
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|
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$
|
585
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$
|
600
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Less: General partner’s interest in net income
|
76
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|
|
61
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|
|
145
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|
|
118
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|
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Limited partners’ interest in net income
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$
|
211
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$
|
246
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$
|
440
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$
|
482
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Weighted-average limited partner units outstanding—basic and diluted
|
298
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296
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292
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296
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Net income per limited partner unit—basic and diluted
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$
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0.71
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$
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0.83
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$
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1.51
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$
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1.63
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Distributions paid per limited partner unit
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$
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0.65125
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$
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0.60125
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$
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1.29000
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$
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1.19000
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Three Months Ended
June 30, |
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Six Months Ended
June 30, |
||||||||||||
|
|
2016
|
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2015
|
|
2016
|
|
2015
|
||||||||
Net Income
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|
$
|
305
|
|
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$
|
316
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|
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$
|
616
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|
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$
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617
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Other comprehensive income (loss):
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Foreign currency translation adjustments
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1
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2
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12
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(13
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)
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Total other comprehensive income (loss)
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1
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2
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12
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(13
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)
|
||||
Total Comprehensive Income
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|
306
|
|
|
318
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|
|
628
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|
|
604
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|
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Less: Comprehensive Income—Noncontrolling Interests
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|
18
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|
|
9
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|
|
31
|
|
|
17
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|
||||
Comprehensive Income—Controlling Interests
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|
$
|
288
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|
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$
|
309
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|
|
$
|
597
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|
|
$
|
587
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|
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June 30,
2016 |
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December 31,
2015 |
||||
ASSETS
|
|
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|
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Current Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
171
|
|
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$
|
168
|
|
Receivables, net
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|
286
|
|
|
272
|
|
||
Inventory
|
|
38
|
|
|
37
|
|
||
Fuel tracker
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|
33
|
|
|
41
|
|
||
Other
|
|
25
|
|
|
26
|
|
||
Total current assets
|
|
553
|
|
|
544
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|
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Investments and Other Assets
|
|
|
|
|
||||
Investments in and loans to unconsolidated affiliates
|
|
978
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|
|
904
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|
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Goodwill
|
|
3,236
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3,232
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|
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Other
|
|
98
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|
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44
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|
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Total investments and other assets
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4,312
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4,180
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|
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Property, Plant and Equipment
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|
|
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|
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Cost
|
|
18,597
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17,491
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|
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Less accumulated depreciation and amortization
|
|
3,753
|
|
|
3,654
|
|
||
Net property, plant and equipment
|
|
14,844
|
|
|
13,837
|
|
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Regulatory Assets and Deferred Debits
|
|
324
|
|
|
290
|
|
||
Total Assets
|
|
$
|
20,033
|
|
|
$
|
18,851
|
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
LIABILITIES AND EQUITY
|
|
|
|
|
||||
Current Liabilities
|
|
|
|
|
||||
Accounts payable
|
|
$
|
413
|
|
|
$
|
322
|
|
Commercial paper
|
|
693
|
|
|
476
|
|
||
Taxes accrued
|
|
74
|
|
|
60
|
|
||
Interest accrued
|
|
72
|
|
|
72
|
|
||
Current maturities of long-term debt
|
|
22
|
|
|
283
|
|
||
Other
|
|
127
|
|
|
258
|
|
||
Total current liabilities
|
|
1,401
|
|
|
1,471
|
|
||
Long-term Debt
|
|
5,861
|
|
|
5,845
|
|
||
Deferred Credits and Other Liabilities
|
|
|
|
|
||||
Deferred income taxes
|
|
42
|
|
|
38
|
|
||
Regulatory and other
|
|
156
|
|
|
151
|
|
||
Total deferred credits and other liabilities
|
|
198
|
|
|
189
|
|
||
Commitments and Contingencies
|
|
|
|
|
|
|
||
Equity
|
|
|
|
|
||||
Partners’ Capital
|
|
|
|
|
||||
Common units (302.6 million and 285.1 million units issued and outstanding at June 30, 2016 and December 31, 2015, respectively)
|
|
11,390
|
|
|
10,527
|
|
||
General partner units (6.2 million and 5.8 million units issued and outstanding at June 30, 2016 and December 31, 2015, respectively)
|
|
390
|
|
|
336
|
|
||
Accumulated other comprehensive loss
|
|
(38
|
)
|
|
(50
|
)
|
||
Total partners’ capital
|
|
11,742
|
|
|
10,813
|
|
||
Noncontrolling interests
|
|
831
|
|
|
533
|
|
||
Total equity
|
|
12,573
|
|
|
11,346
|
|
||
Total Liabilities and Equity
|
|
$
|
20,033
|
|
|
$
|
18,851
|
|
|
|
Six Months Ended
June 30, |
||||||
|
|
2016
|
|
2015
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
||||
Net income
|
|
$
|
616
|
|
|
$
|
617
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
158
|
|
|
150
|
|
||
Deferred income tax expense
|
|
4
|
|
|
2
|
|
||
Earnings from equity investments
|
|
(57
|
)
|
|
(85
|
)
|
||
Distributions from equity investments
|
|
52
|
|
|
93
|
|
||
Other
|
|
(20
|
)
|
|
(46
|
)
|
||
Net cash provided by operating activities
|
|
753
|
|
|
731
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
||||
Capital expenditures
|
|
(1,023
|
)
|
|
(604
|
)
|
||
Investments in and loans to unconsolidated affiliates
|
|
(112
|
)
|
|
(34
|
)
|
||
Purchase of intangible, net
|
|
(40
|
)
|
|
—
|
|
||
Distributions from equity investments
|
|
45
|
|
|
35
|
|
||
Distribution to equity investment
|
|
(148
|
)
|
|
—
|
|
||
Purchases of held-to-maturity securities
|
|
(22
|
)
|
|
(22
|
)
|
||
Proceeds from sales and maturities of held-to-maturity securities
|
|
22
|
|
|
22
|
|
||
Purchases of available-for-sale securities
|
|
(315
|
)
|
|
—
|
|
||
Proceeds from sales and maturities of available-for-sale securities
|
|
316
|
|
|
—
|
|
||
Other changes in restricted funds
|
|
4
|
|
|
—
|
|
||
Other
|
|
(2
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
|
(1,275
|
)
|
|
(603
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
||||
Proceeds from the issuance of long-term debt
|
|
—
|
|
|
994
|
|
||
Payments for the redemption of long-term debt
|
|
(267
|
)
|
|
(16
|
)
|
||
Net increase (decrease) in commercial paper
|
|
217
|
|
|
(869
|
)
|
||
Distributions to noncontrolling interests
|
|
(15
|
)
|
|
(16
|
)
|
||
Contributions from noncontrolling interests
|
|
278
|
|
|
90
|
|
||
Proceeds from the issuances of units
|
|
816
|
|
|
184
|
|
||
Distributions to partners
|
|
(504
|
)
|
|
(459
|
)
|
||
Other
|
|
—
|
|
|
(9
|
)
|
||
Net cash provided by (used in) financing activities
|
|
525
|
|
|
(101
|
)
|
||
Net increase in cash and cash equivalents
|
|
3
|
|
|
27
|
|
||
Cash and cash equivalents at beginning of period
|
|
168
|
|
|
140
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
171
|
|
|
$
|
167
|
|
Supplemental Disclosures
|
|
|
|
|
||||
Property, plant and equipment non-cash accruals
|
|
$
|
225
|
|
|
$
|
135
|
|
|
Partners’ Capital
|
|
Noncontrolling Interests
|
|
Total
|
||||||||||||||
|
Common
|
|
General
Partner
|
|
Accumulated Other
Comprehensive Income (Loss)
|
||||||||||||||
December 31, 2015
|
$
|
10,527
|
|
|
$
|
336
|
|
|
$
|
(50
|
)
|
|
$
|
533
|
|
|
$
|
11,346
|
|
Net income
|
440
|
|
|
145
|
|
|
—
|
|
|
31
|
|
|
616
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|||||
Attributed deferred tax benefit
|
—
|
|
|
20
|
|
|
—
|
|
|
4
|
|
|
24
|
|
|||||
Issuances of units
|
800
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
816
|
|
|||||
Distributions to partners
|
(377
|
)
|
|
(127
|
)
|
|
—
|
|
|
—
|
|
|
(504
|
)
|
|||||
Contributions from noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
278
|
|
|
278
|
|
|||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
(15
|
)
|
|||||
June 30, 2016
|
$
|
11,390
|
|
|
$
|
390
|
|
|
$
|
(38
|
)
|
|
$
|
831
|
|
|
$
|
12,573
|
|
December 31, 2014
|
$
|
10,474
|
|
|
$
|
284
|
|
|
$
|
(20
|
)
|
|
$
|
268
|
|
|
$
|
11,006
|
|
Net income
|
482
|
|
|
118
|
|
|
—
|
|
|
17
|
|
|
617
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(13
|
)
|
|||||
Attributed deferred tax benefit
|
—
|
|
|
14
|
|
|
—
|
|
|
2
|
|
|
16
|
|
|||||
Issuances of units
|
180
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
184
|
|
|||||
Distributions to partners
|
(351
|
)
|
|
(108
|
)
|
|
—
|
|
|
—
|
|
|
(459
|
)
|
|||||
Contributions from noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
90
|
|
|
90
|
|
|||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
(16
|
)
|
|||||
June 30, 2015
|
$
|
10,785
|
|
|
$
|
312
|
|
|
$
|
(33
|
)
|
|
$
|
361
|
|
|
$
|
11,425
|
|
Condensed Consolidated Statements of Operations
|
Total Operating Revenues
|
|
Depreciation and Amortization
|
|
Segment EBITDA/Consolidated Earnings Before Income Taxes
|
||||||
|
(in millions)
|
||||||||||
Three Months Ended June 30, 2016
|
|
|
|
|
|
||||||
U.S. Transmission
|
$
|
529
|
|
|
$
|
69
|
|
|
$
|
406
|
|
Liquids
|
89
|
|
|
8
|
|
|
58
|
|
|||
Total reportable segments
|
618
|
|
|
77
|
|
|
464
|
|
|||
Other
|
—
|
|
|
—
|
|
|
(22
|
)
|
|||
Depreciation and amortization
|
—
|
|
|
—
|
|
|
77
|
|
|||
Interest expense
|
—
|
|
|
—
|
|
|
56
|
|
|||
Interest income and other
|
—
|
|
|
—
|
|
|
1
|
|
|||
Total consolidated
|
$
|
618
|
|
|
$
|
77
|
|
|
$
|
310
|
|
Three Months Ended June 30, 2015
|
|
|
|
|
|
||||||
U.S. Transmission
|
$
|
509
|
|
|
$
|
65
|
|
|
$
|
396
|
|
Liquids
|
94
|
|
|
8
|
|
|
78
|
|
|||
Total reportable segments
|
603
|
|
|
73
|
|
|
474
|
|
|||
Other
|
—
|
|
|
—
|
|
|
(18
|
)
|
|||
Depreciation and amortization
|
—
|
|
|
—
|
|
|
73
|
|
|||
Interest expense
|
—
|
|
|
—
|
|
|
63
|
|
|||
Interest income and other
|
—
|
|
|
—
|
|
|
1
|
|
|||
Total consolidated
|
$
|
603
|
|
|
$
|
73
|
|
|
$
|
321
|
|
Six Months Ended June 30, 2016
|
|
|
|
|
|
||||||
U.S. Transmission
|
$
|
1,067
|
|
|
$
|
139
|
|
|
$
|
817
|
|
Liquids
|
175
|
|
|
15
|
|
|
114
|
|
|||
Total reportable segments
|
1,242
|
|
|
154
|
|
|
931
|
|
|||
Other
|
—
|
|
|
—
|
|
|
(42
|
)
|
|||
Depreciation and amortization
|
—
|
|
|
—
|
|
|
154
|
|
|||
Interest expense
|
—
|
|
|
—
|
|
|
112
|
|
|||
Interest income and other
|
—
|
|
|
—
|
|
|
2
|
|
|||
Total consolidated
|
$
|
1,242
|
|
|
$
|
154
|
|
|
$
|
625
|
|
Six Months Ended June 30, 2015
|
|
|
|
|
|
||||||
U.S. Transmission
|
$
|
1,031
|
|
|
$
|
130
|
|
|
$
|
785
|
|
Liquids
|
178
|
|
|
16
|
|
|
142
|
|
|||
Total reportable segments
|
1,209
|
|
|
146
|
|
|
927
|
|
|||
Other
|
—
|
|
|
—
|
|
|
(35
|
)
|
|||
Depreciation and amortization
|
—
|
|
|
—
|
|
|
146
|
|
|||
Interest expense
|
—
|
|
|
—
|
|
|
120
|
|
|||
Interest income and other
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||
Total consolidated
|
$
|
1,209
|
|
|
$
|
146
|
|
|
$
|
624
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
(in millions, except per unit amounts)
|
||||||||||||||
Net income—controlling interests
|
|
$
|
287
|
|
|
$
|
307
|
|
|
$
|
585
|
|
|
$
|
600
|
|
Less:
|
|
|
|
|
|
|
|
|
||||||||
General partner’s interest in net income—2%
|
|
6
|
|
|
6
|
|
|
12
|
|
|
12
|
|
||||
General partner’s interest in net income attributable to incentive distribution rights
|
|
70
|
|
|
55
|
|
|
133
|
|
|
106
|
|
||||
Limited partners’ interest in net income
|
|
$
|
211
|
|
|
$
|
246
|
|
|
$
|
440
|
|
|
$
|
482
|
|
Weighted average limited partner units outstanding—basic and diluted
|
|
298
|
|
|
296
|
|
|
292
|
|
|
296
|
|
||||
Net income per limited partner unit—basic and diluted
|
|
$
|
0.71
|
|
|
$
|
0.83
|
|
|
$
|
1.51
|
|
|
$
|
1.63
|
|
•
|
less the amount of cash reserves established by the general partner to:
|
•
|
provide for the proper conduct of business,
|
•
|
comply with applicable law, any debt instrument or other agreement, or
|
•
|
provide funds for minimum quarterly distributions to the unitholders and to the general partner for any one or more of the next four quarters,
|
•
|
plus, if the general partner so determines, all or a portion of cash and cash equivalents on hand on the date of determination of Available Cash for the quarter.
|
|
|
Total Quarterly Distribution
|
|
Marginal Percentage
Interest in Distributions
|
||||
|
|
Target Per-Unit Amount
|
|
Common
Unitholders
|
|
General
Partner
|
||
Minimum Quarterly Distribution
|
|
$0.30
|
|
98
|
%
|
|
2
|
%
|
First Target Distribution
|
|
up to $0.345
|
|
98
|
%
|
|
2
|
%
|
Second Target Distribution
|
|
above $0.345 up to $0.375
|
|
85
|
%
|
|
15
|
%
|
Third Target Distribution
|
|
above $0.375 up to $0.45
|
|
75
|
%
|
|
25
|
%
|
Thereafter
|
|
above $0.45
|
|
50
|
%
|
|
50
|
%
|
Condensed Consolidated Balance Sheets
|
June 30, 2016
|
|
December 31, 2015
|
||||
|
(in millions)
|
||||||
Assets
|
|
|
|
||||
Current assets
|
$
|
114
|
|
|
$
|
118
|
|
Net property, plant and equipment
|
1,184
|
|
|
773
|
|
||
Regulatory assets and deferred debits
|
41
|
|
|
25
|
|
||
Total Assets
|
$
|
1,339
|
|
|
$
|
916
|
|
Liabilities and Equity
|
|
|
|
||||
Current liabilities
|
$
|
90
|
|
|
$
|
84
|
|
Equity
|
1,249
|
|
|
832
|
|
||
Total Liabilities and Equity
|
$
|
1,339
|
|
|
$
|
916
|
|
|
|
Expiration Date
|
|
Total Credit Facility Capacity
|
|
Commercial
Paper Outstanding at June 30, 2016 |
|
Available
Credit Facility
Capacity
|
||||||
|
|
|
|
(in millions)
|
||||||||||
Spectra Energy Partners, LP
|
|
2021
|
|
$
|
2,500
|
|
|
$
|
693
|
|
|
$
|
1,807
|
|
Description
|
Condensed Consolidated Balance Sheet Caption
|
|
June 30, 2016
|
||||||||||||||
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||||||
|
|
|
(in millions)
|
||||||||||||||
Corporate debt securities
|
Cash and cash equivalents
|
|
$
|
115
|
|
|
$
|
—
|
|
|
$
|
115
|
|
|
$
|
—
|
|
Corporate debt securities
|
Investments and other assets — other
|
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
||||
Canadian equity securities
|
Investments and other assets — other
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Interest rate swaps
|
Investments and other assets — other
|
|
35
|
|
|
—
|
|
|
35
|
|
|
—
|
|
||||
Total Assets
|
|
$
|
160
|
|
|
$
|
1
|
|
|
$
|
159
|
|
|
$
|
—
|
|
Description
|
Condensed Consolidated Balance Sheet Caption
|
|
December 31, 2015
|
||||||||||||||
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||||||
|
|
|
(in millions)
|
||||||||||||||
Corporate debt securities
|
Cash and cash equivalents
|
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
112
|
|
|
$
|
—
|
|
Corporate debt securities
|
Investments and other assets — other
|
|
11
|
|
|
—
|
|
|
11
|
|
|
—
|
|
||||
Interest rate swaps
|
Investments and other assets — other
|
|
14
|
|
|
—
|
|
|
14
|
|
|
—
|
|
||||
Total Assets
|
|
$
|
137
|
|
|
$
|
—
|
|
|
$
|
137
|
|
|
$
|
—
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
|
Book
Value
|
|
Approximate
Fair Value
|
|
Book
Value
|
|
Approximate
Fair Value
|
||||||||
|
|
(in millions)
|
||||||||||||||
Note receivable, noncurrent (a)
|
|
$
|
71
|
|
|
$
|
71
|
|
|
$
|
71
|
|
|
$
|
71
|
|
Long-term debt, including current maturities (b)
|
|
5,885
|
|
|
6,309
|
|
|
6,152
|
|
|
5,906
|
|
(a)
|
Included within Investments in and Loans to Unconsolidated Affiliates.
|
(b)
|
Excludes commercial paper, unamortized items and fair value hedge carrying value adjustments.
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in millions)
|
||||||||||||||
Operating revenues
|
$
|
618
|
|
|
$
|
603
|
|
|
$
|
1,242
|
|
|
$
|
1,209
|
|
Operating expenses
|
313
|
|
|
281
|
|
|
613
|
|
|
576
|
|
||||
Operating income
|
305
|
|
|
322
|
|
|
629
|
|
|
633
|
|
||||
Earnings from equity investments
|
30
|
|
|
45
|
|
|
57
|
|
|
85
|
|
||||
Other income and expenses, net
|
31
|
|
|
17
|
|
|
51
|
|
|
26
|
|
||||
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
|
|
•
|
revenues from expansion projects, primarily on Texas Eastern, and
|
•
|
storage revenues due to new contracts at higher rates, partially offset by
|
•
|
lower recoveries of electric power and other costs passed through to gas transmission customers,
|
•
|
lower processing revenues due mainly to lower volumes and lower prices,
|
•
|
lower crude oil transportation revenues, as a result of lower Platte pipeline volumes, net of increased tariff rates primarily on the Express pipeline, and
|
•
|
lower natural gas transportation revenues primarily from short-term firm transportation on Texas Eastern.
|
•
|
higher costs related to expansion projects,
|
•
|
higher property tax accruals due to the absence of a 2015 tax benefit, and
|
•
|
pipeline inspection and repair costs related to the Texas Eastern incident near Delmont, PA, partially offset by
|
•
|
lower electric power and other costs passed through to gas transmission customers and
|
•
|
lower power costs due to lower usage in 2016 on the Express and Platte pipelines.
|
•
|
higher revenues from expansion projects, primarily on Texas Eastern, partially offset by
|
•
|
lower natural gas transportation revenues mainly from interruptible transportation on Texas Eastern and Maritimes and Northeast Pipeline, L.L.C. (M&N U.S.) and short-term firm transportation on Texas Eastern and Algonquin Gas Transmission, LLC (Algonquin),
|
•
|
lower recoveries of electric power and other costs passed through to gas transmission customers,
|
•
|
lower processing revenues primarily due to lower prices and volumes, and
|
•
|
lower crude oil transportation revenues, as a result of lower volumes on the Platte and Express pipelines, substantially offset by increased tariff rates mainly on the Express pipeline.
|
•
|
higher costs related to expansion projects,
|
•
|
higher property tax accruals due to the absence of a 2015 tax benefit,
|
•
|
pipeline inspection and repair costs related to the Texas Eastern incident near Delmont, PA and
|
•
|
higher operating costs, partially offset by
|
•
|
a prior year non-cash impairment charge on Ozark Gas Gathering, L.L.C. (Ozark Gas Gathering),
|
•
|
lower electric power and other costs passed through to gas transmission customers and
|
•
|
lower power costs due to lower usage in 2016 on the Express and Platte pipelines.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in millions)
|
||||||||||||||
U.S. Transmission
|
$
|
406
|
|
|
$
|
396
|
|
|
$
|
817
|
|
|
$
|
785
|
|
Liquids
|
58
|
|
|
78
|
|
|
114
|
|
|
142
|
|
||||
Total reportable segment EBITDA
|
464
|
|
|
474
|
|
|
931
|
|
|
927
|
|
||||
Other
|
(22
|
)
|
|
(18
|
)
|
|
(42
|
)
|
|
(35
|
)
|
||||
Total reportable segment and other EBITDA
|
442
|
|
|
456
|
|
|
889
|
|
|
892
|
|
||||
Depreciation and amortization
|
77
|
|
|
73
|
|
|
154
|
|
|
146
|
|
||||
Interest expense
|
56
|
|
|
63
|
|
|
112
|
|
|
120
|
|
||||
Other income
|
1
|
|
|
1
|
|
|
2
|
|
|
(2
|
)
|
||||
Earnings before income taxes
|
$
|
310
|
|
|
$
|
321
|
|
|
$
|
625
|
|
|
$
|
624
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||||||||
|
2016
|
|
2015
|
|
Increase (Decrease)
|
|
2016
|
|
2015
|
|
Increase (Decrease)
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Operating revenues
|
$
|
529
|
|
|
$
|
509
|
|
|
$
|
20
|
|
|
$
|
1,067
|
|
|
$
|
1,031
|
|
|
$
|
36
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating, maintenance and other
|
183
|
|
|
156
|
|
|
27
|
|
|
355
|
|
|
327
|
|
|
28
|
|
||||||
Other income and expenses
|
60
|
|
|
43
|
|
|
17
|
|
|
105
|
|
|
81
|
|
|
24
|
|
||||||
EBITDA
|
$
|
406
|
|
|
$
|
396
|
|
|
$
|
10
|
|
|
$
|
817
|
|
|
$
|
785
|
|
|
$
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
a $29 million increase due to expansion projects, primarily on Texas Eastern, and
|
•
|
a $3 million increase in storage revenues due to new contracts at higher rates, partially offset by
|
•
|
a $5 million decrease in recoveries of electric power and other costs passed through to gas transmission customers,
|
•
|
a $4 million decrease in processing revenues primarily due to volumes and lower prices, and
|
•
|
a $4 million decrease in natural gas transportation revenues mainly from short-term firm transportation on Texas Eastern.
|
•
|
a $16 million increase in expansion project costs,
|
•
|
a $9 million increase in property taxes due to the benefit recognized in 2015, and
|
•
|
a $6 million increase due to pipeline inspection and repair costs related to the Texas Eastern incident near Delmont, PA, partially offset by
|
•
|
a $5 million decrease in electric power and other costs passed through to gas transmission customers.
|
•
|
a $57 million increase due to expansion projects, primarily on Texas Eastern, partially offset by
|
•
|
a $10 million decrease in natural gas transportation revenues mainly from interruptible transportation on Texas Eastern and M&N U.S. and short-term firm transportation on Texas Eastern and Algonquin,
|
•
|
a $9 million decrease in recoveries of electric power and other costs passed through to gas transmission customers, and
|
•
|
a $4 million decrease in processing revenues primarily due to lower prices and volumes.
|
•
|
a $31 million increase in expansion project costs,
|
•
|
a $6 million increase due to pipeline inspection and repair costs related to the Texas Eastern incident near Delmont, PA
|
•
|
a $5 million increase in property taxes due to the benefit recognized in 2015, and
|
•
|
a $5 million increase due to operating costs, partially offset by
|
•
|
a $9 million decrease due to a prior year non-cash impairment charge on Ozark Gas Gathering and
|
•
|
a $9 million decrease in electric power and other costs passed through to gas transmission customers.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||||||||
|
2016
|
|
2015
|
|
Increase (Decrease)
|
|
2016
|
|
2015
|
|
Increase (Decrease)
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Operating revenues
|
$
|
89
|
|
|
$
|
94
|
|
|
$
|
(5
|
)
|
|
$
|
175
|
|
|
$
|
178
|
|
|
$
|
(3
|
)
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating, maintenance and other
|
31
|
|
|
34
|
|
|
(3
|
)
|
|
62
|
|
|
68
|
|
|
(6
|
)
|
||||||
Other income and expenses
|
—
|
|
|
18
|
|
|
(18
|
)
|
|
1
|
|
|
32
|
|
|
(31
|
)
|
||||||
EBITDA
|
$
|
58
|
|
|
$
|
78
|
|
|
$
|
(20
|
)
|
|
$
|
114
|
|
|
$
|
142
|
|
|
$
|
(28
|
)
|
Express pipeline revenue receipts, MBbl/d (a)
|
233
|
|
|
235
|
|
|
(2
|
)
|
|
233
|
|
|
242
|
|
|
(9
|
)
|
||||||
Platte PADD II deliveries, MBbl/d
|
143
|
|
|
172
|
|
|
(29
|
)
|
|
132
|
|
|
170
|
|
|
(38
|
)
|
•
|
a $4 million decrease in crude oil transportation revenues, as a result of lower Platte pipeline volumes, partially offset by increased tariff rates mainly on the Express pipeline.
|
•
|
a $4 million decrease in crude oil transportation revenues, as a result of lower Platte and Express pipeline volumes, substantially offset by increased tariff rates mainly on the Express pipeline.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||||||||
|
2016
|
|
2015
|
|
Increase (Decrease)
|
|
2016
|
|
2015
|
|
Increase (Decrease)
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Operating expenses
|
$
|
22
|
|
|
$
|
18
|
|
|
$
|
4
|
|
|
$
|
42
|
|
|
$
|
35
|
|
|
$
|
7
|
|
EBITDA
|
$
|
(22
|
)
|
|
$
|
(18
|
)
|
|
$
|
(4
|
)
|
|
$
|
(42
|
)
|
|
$
|
(35
|
)
|
|
$
|
(7
|
)
|
•
|
distributions from equity investments,
|
•
|
other non-cash items affecting net income, less
|
•
|
earnings from equity investments,
|
•
|
interest expense,
|
•
|
equity AFUDC,
|
•
|
net cash paid for income taxes,
|
•
|
distributions to noncontrolling interests, and
|
•
|
maintenance capital expenditures.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in millions)
|
||||||||||||||
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 (a)
|
32
|
|
|
70
|
|
|
97
|
|
|
124
|
|
||||
Non-cash impairment on 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 noncontrolling interests
|
8
|
|
|
9
|
|
|
15
|
|
|
16
|
|
||||
Maintenance capital expenditures
|
73
|
|
|
73
|
|
|
108
|
|
|
101
|
|
||||
Distributable Cash Flow
|
$
|
275
|
|
|
$
|
321
|
|
|
$
|
646
|
|
|
$
|
675
|
|
(a)
|
Excludes $4 million of distributions from equity investments for the six months ended June 30, 2015.
|
|
|
Six Months Ended
June 30, |
||||||
|
|
2016
|
|
2015
|
||||
|
|
(in millions)
|
||||||
Net cash provided by (used in):
|
|
|
|
|
||||
Operating activities
|
|
$
|
753
|
|
|
$
|
731
|
|
Investing activities
|
|
(1,275
|
)
|
|
(603
|
)
|
||
Financing activities
|
|
525
|
|
|
(101
|
)
|
||
Net increase in cash and cash equivalents
|
|
3
|
|
|
27
|
|
||
Cash and cash equivalents at beginning of the period
|
|
168
|
|
|
140
|
|
||
Cash and cash equivalents at end of the period
|
|
$
|
171
|
|
|
$
|
167
|
|
•
|
a $497 million increase in capital and investment expenditures, and
|
•
|
a $148 million distribution of debt proceeds back to Gulfstream for payment of its matured debt.
|
|
|
Six Months Ended
June 30, |
||||||
|
|
2016
|
|
2015
|
||||
|
|
(in millions)
|
||||||
U.S. Transmission
|
|
$
|
1,098
|
|
|
$
|
599
|
|
Liquids
|
|
37
|
|
|
39
|
|
||
Total consolidated
|
|
$
|
1,135
|
|
|
$
|
638
|
|
•
|
$217 million of net issuances of commercial paper in 2016, compared to $869 million of net redemptions in 2015,
|
•
|
a $632 million increase in proceeds from issuances of units, and
|
•
|
a $188 million increase in contributions from noncontrolling interests, partially offset by
|
•
|
$994 million of net issuances of long-term debt in 2015, and
|
•
|
a $251 million increase in payments for the redemption of long-term debt.
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk.
|
Item 4.
|
Controls and Procedures.
|
Item 1.
|
Legal Proceedings.
|
Item 1A.
|
Risk Factors.
|
Item 6.
|
Exhibits.
|
•
|
were not intended to be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
|
•
|
may have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement;
|
•
|
may apply contract standards of “materiality” that are different from “materiality” under the applicable securities laws; and
|
•
|
were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement.
|
*
|
Filed herewith
|
|
|
|
|
|
|
|
SPECTRA ENERGY PARTNERS, LP
|
||
|
|
|
|
|
|
|
By:
|
|
Spectra Energy Partners (DE) GP, LP,
its general partner
|
|
|
|
|
|
|
|
By:
|
|
Spectra Energy Partners GP, LLC,
its general partner
|
|
|
|
|
|
Date: August 3, 2016
|
|
|
|
/
S
/ G
REGORY
L. E
BEL
|
|
|
|
|
Gregory L. Ebel
President and Chief Executive Officer
|
|
|
|
|
|
Date: August 3, 2016
|
|
|
|
/
S
/ J. P
ATRICK
R
EDDY
|
|
|
|
|
J. Patrick Reddy
Chief Financial Officer
|
1 Year Spectra Energy Partners, LP Common Units Representing Limited Partner Interests (delisted) Chart |
1 Month Spectra Energy Partners, LP Common Units Representing Limited Partner Interests (delisted) Chart |
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