Press Release

Spectra Energy Partners, LP Announces 2018 Guidance, Long Term Financial Outlook and Receipt of Offer to Eliminate Incentive Distribution Rights

HOUSTON, Nov. 29, 2017 /PRNewswire/ -- Spectra Energy Partners, LP (NYSE: SEP) announced today its financial guidance for 2018 as well as its long term financial and business outlook. SEP's performance is expected to continue to benefit from ongoing expansion project execution and solid base business performance over the 2018 – 2020 timeframe. This long term outlook relies upon SEP's disciplined expansion model, strong investment grade balance sheet, solid distribution coverage and a stable, reliable business profile with no direct commodity exposure and limited volume risk.

Spectra Energy Logo. (PRNewsFoto/Spectra Energy Partners, LP)

Business Outlook

Spectra Energy Partners' financial and business outlook for the 2018 – 2020 period continues to be strong. SEP's earnings and cash flow growth are supported by more than $2 billion of projects placed into service in 2017 and an expected incremental $2.5 billion of secured projects to be placed into service over the 2018 – 2019 timeframe, most notably NEXUS and the completion of Atlantic Bridge. Expansion capex net of contributions from non-controlling interests is expected to be $1.4 billion in 2018. Strong gas market fundamentals and SEP's asset footprint connecting to major demand markets and multiple diverse supply basins are expected to provide continued growth opportunities for SEP over the foreseeable future in areas such as the Northeast and Gulf Coast regions of the U.S. 

2018 Distributable Cash Flow Guidance

SEP expects 2018 Distributable Cash Flow (DCF) of $1.63 billion to $1.67 billion. The DCF outlook assumes maintenance capex of $230 million

Distribution Guidance

SEP's distribution growth in 2018 is expected to be $0.0125 per LP unit per quarter, an increase from 2017 of approximately 7%. SEP expects annual total distribution coverage in 2018 of 1.1x to 1.2x. After 2018, the execution of the current secured organic growth plan alone supports distribution growth of 4% – 6% annually in 2019 and 2020, while maintaining distribution coverage of 1.1x to 1.2x. This outlook could be further enhanced with additional organic growth and future drop down transactions.

Target Credit Metrics

SEP expects to maintain its strong investment grade credit profile with enhanced credit metrics through the planning horizon. The partnership's Debt to EBITDA metric is expected to be below 4.0x through 2020.

Offer Received From Enbridge Inc.

Today SEP received a formal offer from Enbridge Inc. (NYSE:ENB), which owns SEP's general partner, to convert all of Enbridge's incentive distribution rights (IDRs) and general partner (GP) economic interests in SEP into a fixed number of additional common units of SEP and a non-economic GP interest in SEP. SEP's board of directors has convened a conflicts committee, comprised of independent members, to review and evaluate Enbridge's proposal. No assurance can be given that Enbridge and SEP will reach agreement on the proposed transaction. The DCF and distribution guidance discussed above does not take into consideration Enbridge's proposal.

Additional information about SEP's financial and business outlook will be discussed at the upcoming Enbridge Inc. investor conferences in New York and Toronto on December 12th and 13th, respectively.

Forward-Looking Statements

This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on our beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an effect on rate structure, and affect the speed at and degree to which  competition enters the natural gas and oil industries; outcomes of litigation and regulatory investigations, proceedings or inquiries; weather and other natural phenomena, including the economic, operational and other effects of hurricanes and storms; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; general economic conditions, including the risk of a prolonged economic slowdown or decline, or the risk of delay in a recovery, which can affect the long-term demand for natural gas and oil and related services; potential effects arising from terrorist attacks and any consequential or other hostilities; changes in environmental, safety and other laws and regulations; the development of alternative energy resources; results and costs of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general market and economic conditions; increases in the cost of goods and services required to complete capital projects; declines in the market prices of equity and debt securities and resulting funding requirements for defined benefit pension plans; growth in opportunities, including the timing and success of efforts to develop U.S. and Canadian pipeline, storage, gathering, processing and other related infrastructure projects and the effects of competition; the performance of natural gas and oil transmission and storage, distribution, and gathering and processing facilities; the extent of success in connecting natural gas and oil supplies to gathering, processing and transmission systems and in connecting to expanding gas and oil markets; the effects of accounting pronouncements issued periodically by accounting standard-setting bodies; conditions of the capital markets during the periods covered by forward-looking statements; and the ability to successfully complete merger, acquisition or divestiture plans; regulatory or other limitations imposed as a result of a merger, acquisition or divestiture; and the success of the business following a merger, acquisition or divestiture. These factors, as well as additional factors that could affect our forward-looking statements, are described under the headings "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Information" in our 2016 Form 10-K, filed on February 24, 2017, and in our other filings made with the Securities and Exchange Commission (SEC), which are available via the SEC's website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. All forward-looking statements in this release are made as of the date hereof and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Reconciliations

Reconciliations of forward looking non-GAAP financial measures to comparable GAAP measures are not available due to the challenges with estimating some of the items and therefore a reconciliation is not available without unreasonable effort.

Spectra Energy Partners

Spectra Energy Partners, LP is one of the largest pipeline master limited partnerships in the United States and connects growing supply areas to high-demand markets for natural gas and crude oil. These assets include more than 15,000 miles of transmission pipelines, approximately 170 billion cubic feet of natural gas storage, and approximately 5.6 million barrels of crude oil storage. Spectra Energy Partners, LP is traded on the New York stock exchange under the symbol SEP; information about the company is available on its website at www.spectraenergypartners.com.

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SOURCE Spectra Energy Partners, LP

Media: Michael Barnes, Toll Free: (888)-992-0997, michael.barnes@enbridge.com; Analysts and Investors: Roni Cappadonna, (713) 627-4778 or Toll Free: (800) 481-2804, roni.cappadonna@enbridge.com