Financial Plan & Outlook

Transcription

1 2015 FINANCIAL PLAN & OUTLOOK Financial Plan & Outlook

2 Safe Harbor Statement Some of the statements in this document concerning future company performance will be forward-looking within the meanings of the securities laws. Actual results may materially differ from those discussed in these forward-looking statements, and you should refer to the additional information contained in Spectra Energy s Form 10-K and other filings made with the SEC concerning factors that could cause those results to be different than contemplated in today's discussion. Reg G Disclosure In addition, today s discussion includes certain non-gaap financial measures as defined under SEC Regulation G. A reconciliation of those measures to the most directly comparable GAAP measures is available on our website FINANCIAL PLAN & OUTLOOK 2

3 Today s Agenda Business Overview Financial Plan Field Services Western Canada Distribution SEP: Liquids SEP: US Transmission Greg Ebel Pat Reddy Wouter Van Kempen Mark Fiedorek Steve Baker Duane Rae Bill Yardley Q&A 2015 FINANCIAL PLAN & OUTLOOK 3

4 2015 FINANCIAL PLAN & OUTLOOK Business Overview Greg Ebel President & CEO, Spectra Energy & Spectra Energy Partners

5 What You Will Hear Today Outstanding asset footprint provides a strong base business and a well-positioned platform for ongoing expansion We go where the lights are connecting supply to demand 2015 FINANCIAL PLAN & OUTLOOK 5

6 What You Will Hear Today Outstanding asset footprint provides a strong base business and a well-positioned platform for ongoing expansion DCF forecast has essentially no incremental commodity downside Uniquely stable platform to continue building upon 2015 FINANCIAL PLAN & OUTLOOK 6

7 SE Portfolio: Limited Commodity Exposure Historical SE EBITDA ($MM) $3.1B $371 $2.9B 25% 69% 7% 88% $569 $55 $151 $251 DCP Empress Fee-based earnings $80 $206 $ Plan Commodity-based businesses contribution to EBITDA in Plan: about 1% DCP Distributions to SE excluding Tax Distributions ($MM) Plan assumes no DCP distributions $0 $0 $ e 2016e 2017e DCF estimates are not dependent on any improvement in commodity prices As in the past, DCP will manage through this low commodity cycle using self-help measures Empress results are immaterial to DCF Further decline in commodity prices would have negligible impact on SE s DCF However, if prices improve, there is upside 2015 FINANCIAL PLAN & OUTLOOK 7

8 What You Will Hear Today Outstanding asset footprint provides a strong base business and a well-positioned platform for ongoing expansion DCF forecast has essentially no incremental commodity downside $9.5B of expansion projects currently in execution will extend earnings & cash growth beyond 3-year plan Spectra Energy s projects in execution remain fully on track 2015 FINANCIAL PLAN & OUTLOOK 8

9 Expansion Projects In 2014, we committed to secure $35B by the end of the decade Currently, ~$16.5B is in-service or commercially secured Increasing supplies of domestic resources continue to support North American infrastructure build-out Over 20 secured projects in execution Optimizing our steel in the ground Actively pursuing additional opportunities incremental to the 3-year plan 2015 FINANCIAL PLAN & OUTLOOK 9

10 What You Will Hear Today Outstanding asset footprint provides a strong base business and a well-positioned platform for ongoing expansion DCF forecast has essentially no incremental commodity downside $9.5B of expansion projects currently in execution will extend earnings & cash growth beyond 3-year plan Plan supports dividend growth of $0.14/year with coverage at or above 1.0x Spectra Energy will continue to grow real results through real world cycles 2015 FINANCIAL PLAN & OUTLOOK 10

11 2015 FINANCIAL PLAN & OUTLOOK Financial Plan Pat Reddy Chief Financial Officer

12 Ongoing Objectives for Long-Term Value Creation Continue to Deliver dividend and distribution growth Execute growth plan on time & on budget Exercise prudent financial management Attractive, sustainable dividend and distribution growth through challenging commodity and economic cycles 14 /year SE dividend growth and 1.25 /quarter SEP distribution growth through 2017 (1) Cash flows supported by a growing, diverse portfolio of fee-based revenues with minimal commodity exposure $35 billion in expansion through the end of the decade with attractive returns $7 billion in service ~$9.5 billion in execution Majority of growth capex through 2017 at SEP to be funded at SEP No SE equity issuance expected Disciplined financial management and balance sheet flexibility Committed to SE & SEP investment grade balance sheets Utilize MLP and C-Corp structures to support growth (1) Subject to BOD approval 2015 FINANCIAL PLAN & OUTLOOK 12

13 2015 FX and DCP Commodity Assumptions $1.00 Natural Gas Liquids ($/gal) $5.00 Natural Gas ($/MMBtu) $0.75 $0.89 $0.55 $4.00 $3.00 $4.41 $3.60 $0.50 $2.00 $0.25 $1.00 $ e 2016e 2017e $ e 2016e 2017e $100 Crude Oil ($/Bbl) $1.50 FX (CAD/USD) $75 $93 $60 $1.25 $1.00 $1.10 $1.15 $50 $25 $ e 2016e 2017e $0.75 $0.50 $0.25 $0.00 SENSITIVITY +/- 1 Net income $3MM DCF $4MM e 2016e 2017e 2015 FINANCIAL PLAN & OUTLOOK 13

14 Spectra Energy 2015e-17e Ongoing EBITDA estimates reflect flat commodity prices and FX EBITDA by Segment ($MM) (1) 2015e 2016e 2017e Spectra Energy Partners $1,815 $1,995 $2,255 Distribution Western Canada Transmission & Processing Field Services (2) (35) 0 20 Other (80) (75) (75) EBITDA $2,840 $3,125 $3,465 (1) For Spectra Energy consolidated reporting, corporate costs allocated to SEP have been added back to SEP s EBITDA and included in the Other EBITDA amount: 2015e, $60, 2016e, $60; 2017e, $60. Also, as an MLP, SEP is a nontax-paying entity. Therefore, for Spectra Energy consolidated reporting, the Deferred Tax Liability impact of AFUDC is reflected in the SEP segment rather than included with SEP s stand-alone reporting. 2015e, $30; 2016e, $30; 2017e, $35. (2) Represents equity earnings of DCP + gains from DPM equity issuances. DPM equity issuance gains: 2015e, $30; 2016e, $40; 2017e, $45. DCP stand-alone EBITDA (100%): 2015e, $730; 2016e, $900; 2017e, $1,070. EBITDA secure through plan period with solid base and growth projects in execution 2015 FINANCIAL PLAN & OUTLOOK 14

15 Spectra Energy 2015e-17e Distributable Cash Flow estimates reflect flat commodity prices and FX SE Distributable Cash Flow ($MM) 2015e 2016e 2017e EBITDA $ 2,840 $ 3,125 $ 3,465 ADD: Equity in earnings of unconsolidated affiliates (130) (250) (355) Distributions from unconsolidated affiliates Other LESS: Interest expense Distributions to non-controlling interests Maintenance capital expenditures Equity AFUDC Cash paid/(refund) for income taxes (1) Distributable Cash Flow $ 1,205 $ 1,120 $ 1,220 Annual Dividend per Share (2) $1.48 $1.62 $1.76 Dividends Declared (2) $1,020 $1,120 $1,215 DCF per Share $ 1.79 $ 1.66 $ 1.80 Dividend Coverage 1.2x 1.0x 1.0x (1) Estimated cash tax rates: 2015, 0.5%; 2016, 18.9%; 2017, 21.0% (2) Subject to BOD approval; assumes a $0.14 per share annual increase 2015 FINANCIAL PLAN & OUTLOOK 15

16 DCP Commodity Recovery Scenario $1.00 $0.75 $0.50 Natural Gas Liquids ($/gal) $0.90 $0.70 $0.55 $0.80 $0.55 $5 $4 $3 $2 Natural Gas ($/MMBtu) $3.96 $3.60 $3.90 $4.20 $3.60 $0.25 $1 $ e 2016e 2017e $ e 2016e 2017e $100 $75 $50 $25 $0 Crude Oil ($/Bbl) $93 $70 $75 $60 $ e 2016e 2017e DCP Commodity Sensitivities (SE s 50% portion) Assumption Price Change Annual EBITDA Sensitivity NGLs ($/gal) $0.55 +/- $0.01 ~$5.5MM Nat Gas NYMEX ($/MMBtu) $3.60 +/- $0.10 ~$4.5MM Crude - WTI ($/Bbl) $60 +/- $1.00 ~$2.5MM 2015 FINANCIAL PLAN & OUTLOOK 16

17 Commodity Recovery Scenario $4,000 $3,000 Plan (1) vs Commodity Recovery Scenario ($MM) $125 $215 Coverage: in Plan (1) in Commodity Recovery Scenario 2016e 1.0x 1.05x 2017e 1.0x 1.12x $2,000 $1,000 $3,125 $3,465 $55 $135 $1,120 $1,220 $0 2016e 2017e 2016e 2017e EBITDA DCF Plan (1) EBITDA Incremental EBITDA with Commodity Recovery Plan (1) DCF Incremental DCF with Commodity Recovery (1) estimates reflect flat commodity prices and FX 2015 FINANCIAL PLAN & OUTLOOK 17

18 Spectra Energy Partners 2015e-17e Distributable Cash Flow SEP Distributable Cash Flow ($MM) 2015e 2016e 2017e EBITDA by segment: U.S. Transmission Liquids Other TOTAL EBITDA $1, (70) $1,725 $1, (65) $1,905 $1, (65) $2,160 ADD: Equity in earnings of unconsolidated affiliates (160) (250) (330) Distribution from unconsolidated affiliates Other LESS: Interest expense Distributions to non-controlling interests Maintenance capital expenditures Equity AFUDC Net cash paid for income taxes Distributable Cash Flow $1,110 $ 1,195 $ 1,410 Distribution Declared (1) $1,005 $1,185 $1,360 Annual Distribution per Unit (1) $2.43 $2.63 $2.83 Distribution Coverage 1.1x 1.0x 1.0x (1) Subject to BOD approval; assumes a $ per LP unit quarterly increase 2015 FINANCIAL PLAN & OUTLOOK 18

19 TA R G E T I N - S E R V I C E D AT E $7+ Billion Projects in Execution - Largely Demand Pull (1)(2) UST Liquids Distribution W. Canada (1) Execution = customer agreements executed; currently in permitting phase and/or in construction (2) Excludes DCP financed projects of $1.9B (100%) (3) Spectra Energy s expected portion Est. CapEx ($MM) Segment In-Service Counter- parties Red Lake 3Q Dawn Parkway 4Q OPEN 4Q Uniontown to Gas City (U2GC) 4Q15 60 Ozark Partial Conversion 1H16 50 Salem Lateral 2H16 60 AIM 2H16 1,000 Loudon 2H Dawn Parkway 2H Burlington Oakville 2H Jackfish Lake 2H16-2H Gulf Markets 2H16-2H Sabal Trail (3) 1H17 1,600 STEP 1H RAM 1H Access South & Adair Southwest 2H PennEast (3) 2H NEXUS (3) 2H ,000 Atlantic Bridge 2H ,000 Corpus Christi Lateral 2H17 <50 Stratton Ridge 1H Total SE & SEP Projects in Execution $7,260 7,710 SUPPLY PUSH 100% 100% 50/50 DEMAND PULL 2015 FINANCIAL PLAN & OUTLOOK 19

20 Robust Expansion Capex Leads to Significant EBITDA Growth 2015 & Beyond $4.0 $3.5 Expansion CapEx by Segment ($B) Western Canada Distribution Liquids UST $800 $700 Incremental EBITDA from Projects Currently in Execution ($B) +~$800MM by 2020e $3.0 $2.5 $2.5 $2.8 $2.8 $600 $500 $2.0 $400 $1.5 $300 $1.0 $200 $0.5 $100 $ e 2016e 2017e $0 2015e 2016e 2017e 2020e estimates reflect flat commodity prices and FX 2015 FINANCIAL PLAN & OUTLOOK 20

21 Financing Strategy U.S. growth capital projects financed with 50/50 debt and SEP equity over the long-term Will access capital markets opportunistically using our multiple currencies Will maximize use of SEP At-the-Market equity program expanding to $500MM in 2015 SE & SEP committed to maintaining investment grade balance sheets & significant liquidity Growth anchored by long-term, fee-based capital projects Committed to maintaining financial flexibility, liquidity and investment grade balance sheets 2015 FINANCIAL PLAN & OUTLOOK 21

22 Key Balance Sheets Metrics 12/31/14 Projected 12/31/ /31/14 Projected 12/31/2015 Total Debt $14.7B $16.0B $ 6.1B $6.9B Financial Covenant Metrics 58% 58% 3.7x 3.8x Debt/Cap (1) Debt/Cap (1) Debt/EBITDA (1) Debt/EBITDA (1) Credit Ratings Baa2 / BBB- / BBB (2) Baa2 / BBB / BBB (2) Available Liquidity $2.4B (3) $2.6B (3) $1.2B $1.3B (1) Calculated in accordance with the credit agreements; max 65% and 5.0x, respectively (2) Moody s / S&P / Fitch senior unsecured ratings (3) Total enterprise 2015 FINANCIAL PLAN & OUTLOOK 22

23 Delivering Long-term Value for Shareholders SE Annual Dividends Paid ($/share) (1) SEP Annual Distributions Paid ($/LP unit) (1) $1.38 $1.48 $1.62 $ % $2.25 $2.43 $2.63 $ % e 2016e 2017e e 2016e 2017e Strength of diverse portfolio ensures ongoing shareholder value through various business and commodity cycles (1) Subject to BOD approval 2015 FINANCIAL PLAN & OUTLOOK 23

24 2015 FINANCIAL PLAN & OUTLOOK Field Services Wouter van Kempen Chairman, President & CEO, DCP Midstream Chairman & CEO, DCP Midstream Partners

25 Field Services: Long-term Fundamentals Improve Over Time DCP Midstream is a leader in a must-run industry 2015: Managing through the downturn Weak global demand fundamentals Supply outpacing demand E&P production forecasts uncertain Horizontal drilling Created significant spike in production Sharper decline rates 2,500 2,000 1,500 Historic U.S. Rig Count Gas 2016: Positioning for the long-term Strong diversified economy Demand growth expected LPG/LNG exports PDH facilities Gas-fired generation Cracker capacity expansions online Global economy & demand expected to pick up 1, Oil Combined oil & gas rig decline from 2014 peak Multi-year strategy / positioning for the long-term 2015 FINANCIAL PLAN & OUTLOOK 25

26 Field Services: Prudent Management Through Cycles $160 $120 $80 $40 Historical Commodity Price Cycles NGLs ($/gal) Crude ($/Bbl) $2.00 $1.50 $1.00 $ : Adjust to market collapse Cost reductions & efficiencies Capital flexibility Managed headcount Maintained strength of DPM : Growth mode Executed growth in key basins Integrated G&P with downstream logistics 2015: Prudent growth Tempering growth & managing balance sheet Improving operations and reliability Strengthening contract portfolio Restructuring for long term sustainability Cost reductions and efficiencies Capital flexibility $ $0.00 Strategic discipline through economic cycles 2015 FINANCIAL PLAN & OUTLOOK 26

27 Field Services: Footprint in Core Areas of Key Basins DJ Basin/North 64 Plants (1) ~68,000 miles of Pipeline (1) Strategic assets backed by strong producers Top 10 customers make up ~40% of margin / gas volume Midcontinent Permian DCP Midstream DCP Midstream Partners Storage Facility Fractionator and/or Plant Natural Gas Plant Eagle Ford/South Plant Under Construction NGL Pipeline Natural Gas Pipeline (1) Statistics include all assets in service as of December 31, 2014, and are consolidated, including DPM Louisiana Prudent growth Maintain strong position in key basins Placing current projects into service in 2015: Zia II, Lucerne 2, Keathley Canyon Scaling capital Timing of expansion opportunities tied to production activity Positioning DCP for industry recovery Ready to execute on discretionary organic opportunities Preparing for commodity recovery and capacity needs Permits in progress or in hand in the DJ Basin, Eagle Ford and Permian 2015 FINANCIAL PLAN & OUTLOOK 27

28 (MMcf/d) Field Services: Capital Efficiency Asset ramp-up highlights capital efficiency & improves return on capital Processing Capacity Additions Q14 O Connor Exp. 1Q14 Goliad Plant 4Q13 O Connor Plant 3Q13 Rawhide Plant 1Q13 Eagle Plant 2012 Permian Exp. 1Q12 Mewbourn Plant (1) Consolidated, includes DPM; (2) Average utilization based on the average plant throughput for December NGL Pipeline Throughput (MBPD, 100% view) Throughput on Sand Hills & Southern Hills 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 ~850 MMcf/d New processing capacity since 2011 (1) ~85% Utilization (2) 4Q14 avg. utilization 105% of 230 MBbls/d 2014e exit rate 2015 FINANCIAL PLAN & OUTLOOK 28

29 Field Services: 2015 Forecast DCP Midstream Consolidated (1) ($MM) DCP EBITDA $730 Growth Capex 550 Maintenance Capex 250 DPM Distributions to DCP ($MM) LP Distributions $75 GP Distributions 125 DCP Midstream Commodity Sensitivities (1) Assumption (1) Consolidated, includes DPM (100%) (2) Other includes logistics and marketing margins Price Change Annual EBITDA Sensitivity NGLs ($/gal) $0.55 +/- $0.01 $11MM Nat Gas NYMEX ($/MMBtu) $3.60 +/- $0.10 $9MM Crude - NYMEX ($/Bbl) $60 +/- $1.00 $5MM 2015 DCP Midstream Margin by Contract Type (1) 35% Fee 40% Percentage of Proceeds 20% Other (2) 5% Keepwhole 2015 FINANCIAL PLAN & OUTLOOK 29

30 Field Services: Summary Must run business with competitive footprint and geographic diversity Proven track record through commodity cycles Controlling costs, transforming company for the long-term History of strong cash generation and returns $2.7 billion of distributions to Spectra Energy & Phillips 66 from Remain focused on operational safety and capital efficiency Industry leading safety performance Long-term strategy supported by industry fundamentals Permitting for optionality, preparing for industry recovery Positioning the enterprise for the long-term 2015 FINANCIAL PLAN & OUTLOOK 30

31 2015 FINANCIAL PLAN & OUTLOOK Western Canada: Continued Solid Performance & Growth Mark Fiedorek President, SET West

32 Western Canada: 2014 Highlights Placed North Montney project into service in 2Q14 Fully contracted T-South yearround service and secured $500MM of pipeline expansion projects Substantially de-risked Empress commodity exposure Obtained Westcoast Connector s Environmental Assessment Certificate 2015 FINANCIAL PLAN & OUTLOOK 32

33 Western Canada: Attractive Footprint BC BC Pipeline Western Canadian Gathering & Processing AB SK Empress MB ON QC Maritimes & Northeast, Canada NB NS BC Pipeline: Natural Gas Transmission Miles of Pipe: 1,800 Pipeline Capacity: 2.9 Bcf/d Major Markets: BC, AB, US Pacific NW Natural Gas Gathering & Processing Miles of Gathering Pipe: 2,200 Processing Plants/Capacity: 19 plants / 3.7 Bcf/d Major Markets: BC, AB Empress System: Natural Gas Liquids Miles of Pipe: 590 Extraction / Fractionation Capacity: 2.4 Bcf/d / 63,000 Bbls/d Storage Capacity: 4+ MMBbls Major Markets: W. Canada, Northern US Maritimes & Northeast, Canada: Natural Gas Trans. Miles of Pipe: 540 Pipeline Capacity: 0.55 Bcf/d Major Markets: Atlantic Canada 2015 FINANCIAL PLAN & OUTLOOK 33

34 Western Canada: Stable Base Portfolio 2015e EBTIDA SEP: Liquids SEP: UST Distribution Western Canada $630 MM 95% Fee-Based 54% 27% Nat Gas G&P Transmission M&N Canada Fee-based contracts Regulated fee-for-service Regulated fee-for-service 14% 5% Empress - NGLs Risk management program mitigates volatility Fee Based: G&P, Transmission and M&N Canada G&P Long-term fee-based contract profile Transmission and Maritimes - Stable regulated fee for service returns Focus on cost management Commodity Based: Empress 2015 volumes financially hedged Expect ongoing cash of $30MM Stable fee based business will weather low price commodity environment 2015 FINANCIAL PLAN & OUTLOOK 34

35 Western Canada: Business Development Transmission Traditional markets are growing Resurgent industrial and power generation activity Small scale LNG projects Expansion projects PRINCE RUPERT KITIMAT T-North Liard Jackfish Lake Horn River Montney Deep Basin Cordova AB Execution Projects In-Service Est. CapEx ($MM) Jackfish Lake 2016/2017 $200 RAM 2017 $300 BC T-South RAM Duvernay Abundant supply and low natural gas prices driving market growth VANCOUVER SEATTLE CALGARY PORTLAND Small Scale LNG Projects Industrial Load Projects 2015 FINANCIAL PLAN & OUTLOOK 35

36 Western Canada: Business Development Gathering & Processing Resource development driving producer services BC s world class gas supply is growing Development opportunities pre-lng Positive FID decision on LNG will drive large scale opportunities Spectra Energy value proposition Leverage attractive footprint for scaled pre- LNG development Long term firm fee based contracts Originate investments of $300MM -$500MM in ,000 3,500 3,000 2,500 2,000 1,500 1,000 Montney Tight Gas Production (MMCf/d) North Montney BC South Montney BC Alberta Secure additional firm fee based G&P opportunities FINANCIAL PLAN & OUTLOOK 36

37 Western Canada: Business Development LNG Large scale LNG export driving growth in the next decade Westcoast Connector project obtained Environmental Assessment Certificate in 2014 Strategic advantage of dual pipelines enables additional solutions for emerging multinational LNG players Spectra Energy is well positioned to provide upstream Transmission and G&P services pre and post LNG ramp-up PRINCE RUPERT KITIMAT Westcoast Connector BC Liard Horn River Montney Deep Basin Cordova Duvernay AB LNG development driving Western Canada growth beyond 2020 VANCOUVER SEATTLE CALGARY PORTLAND 2015 FINANCIAL PLAN & OUTLOOK 37

38 Western Canada: Priorities Sustain base portfolio: - Contract renewals - NGL risk management - Cost management Place $500MM Transmission projects into service in 2016 and 2017 Originate additional Gathering and Processing opportunities Secure LNG related origination opportunities 2015 FINANCIAL PLAN & OUTLOOK 38

39 2015 FINANCIAL PLAN & OUTLOOK Union Gas: Stability & Growth Steve Baker President, Union Gas Limited

40 Union Gas: Foundation for Growth National Energy Board approval of eastern Canadian LDC tolls settlement Toll certainty for eastern customers Catalyst supporting Dawn- Parkway expansions Ontario Energy Board approval of 2015 Dawn- Parkway expansion and rate recovery Advancing 2016 Dawn-Parkway expansion through regulatory process Safe and reliable operations 2015 FINANCIAL PLAN & OUTLOOK 40

41 Union Gas: Regulatory Framework Supporting Growth Ontario Energy Board approved Incentive Regulation Mechanism 5-year term: ~ 9% base ROE Attractive features: Earnings sharing provides 150 bps upside opportunity over allowed ROE Predetermined rate adjustments for major capital expansions Annual rate increase set at 40% of inflation Emerging opportunities Unregulated CNG/LNG - Transportation and Mining Extend service to new communities Ontario government grant and loan program Framework provides stable platform for growth through FINANCIAL PLAN & OUTLOOK 41

42 Union Gas: Asset Strength and Flexibility Dawn Hub is 2 nd largest physical gas trading hub in North America Continued customer interest for Dawn Hub supplies and short haul transportation from Dawn to eastern markets NEB approval of LDC settlement supports Dawn access and transmission system expansion New Appalachian supply projects, like NEXUS, are advancing to connect new supply to Dawn Hub Changing supply & demand dynamics increasing the importance of the Dawn Hub & Dawn-Parkway system MI DETROIT OH Texas Eastern Dawn Hub Kirkwall Parkway ON TORONTO MARCELLUS / UTICA SUPPLY QC NIAGARA FALLS Increasing flows PA Decreasing flows U.S. Northeast NY Increasing Dawn flows Union Gas service territory 2015 FINANCIAL PLAN & OUTLOOK 42

43 Union Gas: Major Growth Projects Largest expansions in Union Gas history Execution Projects Est CapEx ($MM) In Service 2015 Dawn-Parkway $390 2H Dawn-Parkway 360 2H16 Burlington-Oakville 100 2H16 Execution Total $850 Development Projects 2017 Dawn-Parkway $730 2H Dawn-Parkway 280 2H18 Development Total $1,010 Total $1,860 MI DETROIT OH Dawn Hub Kirkwall Parkway ON TORONTO MARCELLUS / UTICA SUPPLY QC NIAGARA FALLS U.S. Northeast PA NY ~$150M EBITDA increase by 2019 Texas Eastern Increasing flows Decreasing flows Increasing Dawn flows Union Gas service territory 2015 FINANCIAL PLAN & OUTLOOK 43

44 Union Gas: 2015 to 2017 Priorities Build off strength and stability of base assets Execute 2015 and 2016 Dawn-Parkway expansions Advance 2017 and 2018 Dawn-Parkway expansions Union Gas delivering stability and growth 2015 FINANCIAL PLAN & OUTLOOK 44

45 2015 FINANCIAL PLAN & OUTLOOK Liquids: Growth from a Solid Base Duane Rae President, Spectra Energy Liquids

46 Liquids: Fee for Service Business with Secure Revenue Fee for service and no direct commodity exposure Access to growing supply Delivery to premium markets Express and Platte are demand-pull pipelines offering competitive toll advantage Express, Southern Hills, Sand Hills supported by long-term take-or-pay contracts Demand for Platte service has continuously exceeded capacity since 2005 Hardisty Express Pipeline Sand Hills Casper Guernsey Express-Platte Pipeline System Conway Platte Pipeline Wood River Southern Hills Mont Belvieu 2015 FINANCIAL PLAN & OUTLOOK 46

47 Liquids: Expansion on Top of Solid Growing Base Annual toll escalation on all four pipelines New Express contracts with higher tolls displacing legacy contracts Volume ramping up on Sand Hills and Southern Hills 10% per annum growth without expansion capital Liquids EBITDA ($MM) Capital Plan Base 20% per annum growth with modest 50 expansion capital program Growth from the expansion capital program continues to add to the secure, steady growth of the base business 2015 FINANCIAL PLAN & OUTLOOK 47

48 Liquids: Well-positioned in Challenging Environment Commodity prices have no impact on EBITDA growth in plan horizon Support for large crude oil and NGL infrastructure projects is challenging Incremental expansions of our existing assets are advantaged Current pricing advantages liquids pipelines over other transportation Long-term additions to liquids pipeline infrastructure still required In a volatile commodity environment, existing assets provide platform for stable, secure growth 2015 FINANCIAL PLAN & OUTLOOK 48

49 Liquids: Attractive Growth Opportunities Cost-effective optimization/ expansion of Express-Platte pipeline and terminals Low cost crude to California refiners with Inland California Express Continued build-out of Sand Hills and Southern Hills bringing NGLs to premium Gulf Coast market Twinning Express-Platte to connect oil sands, Bakken and Rockies to Midwest and beyond Synergy pipeline bringing oil sands crude to Hardisty for export Project Type Near-Term Crude Oil Development Sand Hills & Southern Hills Build-Out Longer-Term, Large Scale Crude Oil Development (1) Net to SEP Examples Express enhancement, Express-Platte terminals & connections, Inland California Express (ICE) Red Lake (in execution), extensions, expansions, connections Est. CapEx (1) ($MM) In-Service $ $ Express-Platte Twinning, Synergy Pipeline $5, Positioned for incremental near-term growth and large-scale long-term growth 2015 FINANCIAL PLAN & OUTLOOK 49

50 Liquids: Priorities On-system expansion of pipe and terminals Continuing optimization to meet market demand Ramp existing contracts and access new supply on Sand Hills & Southern Hills Add new connections, construct laterals and expand capacity Continue to advance long-term, large-scale crude oil growth projects Liquids business provides solid and secure growth on base business with opportunity for significant long-term growth 2015 FINANCIAL PLAN & OUTLOOK 50

51 2015 FINANCIAL PLAN & OUTLOOK U.S. Transmission: Capitalizing on our Momentum Bill Yardley President, U.S. Transmission & Storage

52 U.S. Transmission: Growth Now and in the Future Power Generation Supply to Markets Demand Market Growth Northeast & New England Record throughput the last 3 winters Strong market opportunities from LDCs, power generators and industrial customers Marcellus / Utica Marcellus flowing 5 Bcf/d into our system, growing at 110% annually 30% of Appalachian supply comes into Texas Eastern LNG & Mexico Exports Southeast & Gulf Coast Power Generation Significant incremental growth from power generation coal conversions Industrial, petrochemical & power generation in Gulf Coast LNG and Mexico export markets FIN AN CIAL P LAN & OUT LOOK 52

53 U.S. Transmission: Strong and Growing Portfolio 2015e EBITDA $2,500 EBITDA with Growth Projects ($MM) Western Canada Distribution SEP: U.S. Transmission $1,520MM $2,000 $1,500 $1,000 $500 Execution Projects Base SEP: Liquids $0 2015e 2016e 2017e 2018e 2019e 2020e Rock Solid Base EBITDA Fully Subscribed Reservation charge contracts 8 year average contract term Strong Growth from execution projects 2015 FINANCIAL PLAN & OUTLOOK 53

54 Execution Projects: Delivering Incremental EBITDA UST executing on ~$6B of projects that deliver $700MM EBITDA by 2020 Dawn Hub NEXUS PennEast OPEN U2GC Adair Southwest Ozark Conversion Loudon Access South Sabal Trail STEP Atlantic Bridge Gulf Markets Expansion Stratton Ridge Greenfield pipeline AIM Salem Lateral Est. CapEx ($MM) In-Service Project OPEN 500 2H15 U2GC 60 2H15 Ozark Conversion 50 1H16 Salem Lateral 60 2H16 AIM 1,000 2H16 Loudon 50 2H16 Gulf Markets 150 2H16/2H17 Sabal Trail (1) 1,600 1H17 Atlantic Bridge 750 1,000 2H17 (1) NEXUS 800 1,000 2H17 Access South & Adair Southwest 350 2H17 PennEast(1) 100 2H17 STEP 130 1H17 Stratton Ridge 200 1H19 Total $ 5,800 (1) Spectra Energy s expected portion FIN AN CIAL P LAN & OUT LOOK 54

55 U.S. Transmission: Northeast Expansion Access Northeast ~$5B of investment in execution and development UTICA MARCELLUS PennEast Atlantic Bridge AIM Salem Lateral Northeast and New England demand continues to increase Our infrastructure footprint with connections to major markets offers strong advantage Market pull with strong, credit-worthy customers Northeast market expansion Execution Projects In-Service Est. CapEx ($MM) Salem Lateral 2H16 60 AIM 2H16 1,000 Atlantic Bridge 2H ,000 PennEast (1) 2H Development Projects Access Northeast (1) Additional NE market expansion (1) Spectra Energy s expected portion 2H18 2H18 3, FINANCIAL PLAN & OUTLOOK 55

56 U.S. Transmission: Access Northeast Gas-fired power plant connected to Access Northeast Project Gas-fired power plant not connected PORTLAND Maritimes & Northeast Direct connection with Northeast generators UTICA MARCELLUS Wright, NY Algonquin Gas Transmission BOSTON Takes advantage of existing infrastructure Built to handle the peaks Timely Scalable for future growth Multiple supply options NEW YORK Texas Eastern Serves over 70% of New England generation will provide fuel for 5,000 MW of electric generation 2015 FINANCIAL PLAN & OUTLOOK 56

57 U.S. Transmission: Marcellus/Utica Expansion U2GC Access South NEXUS Dawn Hub OPEN Adair Southwest Loudon ~$4B of investment in execution and development Appalachian gas flowing into Texas Eastern continues to grow NEXUS will connect Texas Eastern to Union Gas, creating a direct path to new markets Future opportunities to expand Texas Eastern to serve power generation, industrial and Gulf Coast markets Execution Projects In-Service Est. CapEx ($MM) OPEN 2H U2GC 2H15 60 NEXUS (1) 2H ,000 Access South & Adair SW 2H Development Projects Midwest 2H17 Power Generation Marcellus to Gulf (1) Spectra Energy s expected portion 2, FINANCIAL PLAN & OUTLOOK 57

58 U.S. Transmission: Southeast & Gulf Coast Expansion Ozark Conversion Industrial Sabal Trail ~$4B of investment in execution and development Sabal Trail will serve Florida power generation market Consistent growth in revenues from contracted projects through 2019 Huge potential to serve growing Mexico power market, LNG exports, and U.S. industrial and power markets Execution Projects In-Service Est. CapEx ($MM) STEP Stratton Ridge Gulf Markets Ozark Partial Conversion 1H16 50 Gulf Markets 2H16-2H Sabal Trail (1) 1H17 1,600 Stratton Ridge 1H STEP 1H Development Projects Exports LNG & Industrial Exports to Mexico 2H18 2H (1) Spectra Energy s expected portion 2015 FINANCIAL PLAN & OUTLOOK 58

59 U.S. Transmission: Priorities Sign an average of $2B/year in expansion projects through 2017 Sign deals for projects in New England, the Northeast and the Gulf Safely and successfully advance execution projects Place OPEN & U2GC in service in 2015; keep all other execution projects on schedule Ensure re-contracting of base revenue through end of decade Continue momentum, strengthen base business, and deliver incremental growth projects 2015 FINANCIAL PLAN & OUTLOOK 59

60 2015 FINANCIAL PLAN & OUTLOOK Key Takeaways Greg Ebel President & CEO, Spectra Energy & Spectra Energy Partners

61 What You Heard Today Outstanding asset footprint provides a strong base business and a well-positioned platform for ongoing expansion DCF forecast has essentially no incremental commodity downside $9.5B of expansion projects currently in execution will extend earnings & cash growth beyond 3-year plan Plan supports dividend growth of $0.14/year with coverage at or above 1.0x Spectra Energy will continue to grow real results through real world cycles 2015 FINANCIAL PLAN & OUTLOOK 61

62