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:
- Solid ongoing quarterly earnings of $0.31 per share
- Successfully advancing $8 billion
in expansion projects in execution
- Third quarter 2016 dividend of $0.405 per share, compared with $0.37 per share in third quarter 2015
- Continue to expect full-year dividend coverage of 1.2
times
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
Tax Effect
|
Net
Income (1)
|
|
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
Tax Effect
|
Net
Income (1)
|
|
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:
- $12 billion – in service and
delivering solid cash flows
- $8 billion – in execution
- $20+ billion – in development
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
Ended September 30,
|
|
|
Nine Months
Ended September 30,
|
|
|
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
Ended September 30,
|
|
Nine Months
Ended September 30,
|
|
|
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
Ended September 30,
|
|
Nine Months
Ended September 30,
|
|
|
|
|
|
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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
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
Earnings
|
|
Less:
Special
Items
|
|
Ongoing
Earnings
|
|
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
Earnings
|
|
Less:
Special
Items
|
|
Ongoing
Earnings
|
|
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
September 30, 2016
|
|
Three Months
Ended
September 30, 2015
|
|
|
Reported
|
|
Less:
Special
Items
|
|
Ongoing
|
|
Reported
|
|
Less:
Special
Items
|
|
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
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/spectra-energy-reports-third-quarter-2016-results-300355415.html
SOURCE Spectra Energy Corp