HOUSTON, May 4, 2016 /PRNewswire/ --
First Quarter Highlights:
- Distributable cash flow of $523
million and declared dividends of $284 million
- 2015 expansion projects at U.S. Transmission and Distribution
continued to add to EBITDA and cash generation
- $8 billion of expansion projects
in execution advancing as planned
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
Ended March 31,
|
|
|
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
Ended March 31,
|
|
|
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
Ended March 31,
|
|
|
|
|
|
|
|
|
|
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
Ended March 31,
|
|
|
|
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:
Special Items
|
|
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
March 31, 2016
|
|
Three Months
Ended
March 31, 2015
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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SOURCE Spectra Energy Corp