HOUSTON, Feb. 4, 2016 /PRNewswire/ -- Spectra Energy
Corp (NYSE: SE) and Spectra Energy Partners (NYSE: SEP) today
announced their 2016-2018 business and financial plan.
Key highlights for Spectra Energy include:
- 2016 distributable cash flow (DCF) of almost $1.4 billion, up 6% from 2015
- Dividend increase of 14 cents per
share annually through 2018; dividend coverage of 1.2x in 2016,
1.3x in 2017, and 1.1x in 2018 which substantially exceeds the
coverage expected in the prior year's financial plan
- 2016 enterprise-wide EBITDA of more than $2.8 billion, with a CAGR of 8% through 2018
Key highlights for Spectra Energy Partners include:
- 2016 DCF of $1.3 billion, up 8.7%
from 2015 with a CAGR of 15.6% through 2018
- Distribution increases of 1.25
cents per unit each quarter through 2018; distribution
coverage of 1.2x in each of the three forecast years – higher than
prior year's financial plan
"Our execution backlog of about $8
billion in secured projects is primarily driven by natural
gas demand and will grow our cash flows during and beyond the plan
period. The strength of our projects in execution gives us
confidence in our ongoing ability to deliver an annual 14-cent per share dividend increase at Spectra
Energy and our quarterly penny-and-a-quarter per unit distribution
increase at Spectra Energy Partners through 2018," said
Greg Ebel, chief executive officer,
Spectra Energy. "Despite commodity prices and the Canadian dollar
being significantly lower than a year ago, our 2016 and 2017 DCF
forecasts and dividend and distribution coverage ratios are
stronger than those we presented to investors a year
ago.
"The fundamentals of a company matter – and in today's business
environment, they matter even more. Our existing infrastructure
assets go to where the lights are – from key supply basins to the
fastest growing North American energy markets. The competitive
advantage of our existing assets, with our expansion projects in
execution, provides an outlook that is more robust than even a year
ago and provides investors with stable and reliable returns," added
Ebel.
Key assumptions underlying the three-year financial plan
include:
- For all three years, natural gas liquids prices of 42 cents per gallon; natural gas prices of
$2.50 per thousand cubic feet (Mcf);
and crude oil prices of $45 per
barrel
- A Canadian-to-U.S. dollar exchange rate of 1.40 for each of the
three years forecast
- Maintenance CapEx of $615 million
in 2016, $625 million in 2017, and
$640 million in 2018
- Cash tax rates of 1.8% in 2016, 4.2% in 2017, and 14.8% in
2018
- Investment of approximately $6
billion in expansion capital over the plan period, with
$3.0 billion invested in 2016,
$1.9 billion in 2017 and $1.2 billion in 2018; SEP's share of CapEx is
about 61% in 2016, 68% in 2017, and 81% in 2018
Spectra Energy and Spectra Energy Partners will discuss their
business outlook and three-year financial plan in greater detail
during an analyst/investor meeting today.
The presentation is scheduled to begin at 8:30 a.m. ET and will be webcast via the
Investors sections of the Spectra Energy and Spectra Energy
Partners websites. The conference call can be accessed by dialing
(888) 252-3715 in the U.S. or Canada, or (706) 634-8942 internationally. The
conference ID is 7888893 or "Spectra Energy 2016 Plan."
A replay of the call will be available until 5 p.m. CT on Tuesday, May
3, 2016, by dialing (800) 585-8367 in the U.S. or
Canada, or (404) 537-3406
internationally, and using the above conference ID. A replay and
transcript also will be available via the Investors sections of the
Spectra Energy and Spectra Energy Partners websites.
Forward-Looking Statements
This release includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements are based on our beliefs and
assumptions. These forward-looking statements are identified by
terms and phrases such as: anticipate, believe, intend, estimate,
expect, continue, should, could, may, plan, project, predict, will,
potential, forecast, and similar expressions. Forward-looking
statements involve risks and uncertainties that may cause actual
results to be materially different from the results
predicted. Factors that could cause actual results to differ
materially from those indicated in any forward-looking statement
include, but are not limited to: the success of a completed
drop-down; state, federal and foreign legislative and regulatory
initiatives that affect cost and investment recovery, have an
effect on rate structure, and affect the speed at and degree to
which competition enters the natural gas and oil industries;
outcomes of litigation and regulatory investigations, proceedings
or inquiries; weather and other natural phenomena, including the
economic, operational and other effects of hurricanes and storms;
the timing and extent of changes in commodity prices, interest
rates and foreign currency exchange rates; general economic
conditions, including the risk of a prolonged economic slowdown or
decline, or the risk of delay in a recovery, which can affect the
long-term demand for natural gas and oil and related services;
potential effects arising from terrorist attacks and any
consequential or other hostilities; changes in environmental,
safety and other laws and regulations; the development of
alternative energy resources; results and costs of financing
efforts, including the ability to obtain financing on favorable
terms, which can be affected by various factors, including credit
ratings and general market and economic conditions; increases in
the cost of goods and services required to complete capital
projects; declines in the market prices of equity and debt
securities and resulting funding requirements for defined benefit
pension plans; growth in opportunities, including the timing and
success of efforts to develop U.S. and Canadian pipeline, storage,
gathering, processing and other related infrastructure projects and
the effects of competition; the performance of natural gas and oil
transmission and storage, distribution, and gathering and
processing facilities; the extent of success in connecting natural
gas and oil supplies to gathering, processing and transmission
systems and in connecting to expanding gas and oil markets; the
effects of accounting pronouncements issued periodically by
accounting standard-setting bodies; conditions of the capital
markets during the periods covered by forward-looking statements;
and the ability to successfully complete merger, acquisition or
divestiture plans; regulatory or other limitations imposed as a
result of a merger, acquisition or divestiture; and the success of
the business following a merger, acquisition or divestiture.
These factors, as well as additional factors that could affect our
forward-looking statements, are described in our filings that we
make with the SEC, which are available via the SEC's website at
www.sec.gov. In light of these risks, uncertainties and
assumptions, the events described in the forward-looking statements
might not occur or might occur to a different extent or at a
different time than we have described. All forward-looking
statements in this release are made as of the date hereof and we
undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
About Spectra Energy and Spectra Energy
Partners
Spectra Energy Corp (NYSE: SE), a FORTUNE 500
company, is one of North America's
leading pipeline and midstream companies. Based in Houston, Texas, the company's operations in
the United States and Canada include more than 21,000 miles of
natural gas, natural gas liquids, and crude oil pipelines;
approximately 300 billion cubic feet (Bcf) of natural gas storage;
4.8 million barrels of crude oil storage; as well as natural gas
gathering, processing, and local distribution operations. Spectra
Energy is the general partner of Spectra Energy Partners (NYSE:
SEP), one of the largest pipeline master limited partnerships in
the United States and owner of the
natural gas and crude oil assets in Spectra Energy's U.S.
portfolio. Spectra Energy also has a 50 percent ownership in DCP
Midstream, the largest producer of natural gas liquids and the
largest natural gas processor in the
United States. Spectra Energy has served North American
customers and communities for more than a century. For more
information, visit www.spectraenergy.com and
www.spectraenergypartners.com.
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SOURCE Spectra Energy Corp; Spectra Energy Partners, LP