Spectra Energy Partners Roni Cappadonna General Manager, Investor Relations 713.627.4778 Roni.Cappadonna@enbridge.com
Legal Statements SAFE HARBOR STATEMENT / FORWARD-LOOKING INFORMATION Some of what we ll discuss today concerning future company performance will be forward-looking information 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 Partners Form 10-K and other filings made with the SEC concerning factors that could cause those results to differ from those contemplated in today s discussion. The terms we, our, and us refer to Spectra Energy Partners. Also, this communication includes certain forward looking statements and information ( FLI ) to provide shareholders and potential investors with information about us and our subsidiaries and affiliates, including management s assessment of us and our subsidiaries future plans and operations, which FLI may not be appropriate for other purposes. FLI is typically identified by words such as anticipate, expect, project, estimate, forecast, plan, intend, target, believe, likely and similar words suggesting future outcomes or statements regarding an outlook. All statements other than statements of historical fact may be FLI. Although we believe that the FLI is reasonable based on the information available today and processes used to prepare it, such statements are not guarantees of future performance and you are cautioned against placing undue reliance on FLI. By its nature, FLI involves a variety of assumptions, which are based upon factors that may be difficult to predict and that may involve known and unknown risks and uncertainties and other factors which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by these FLI, including, but not limited to, the following: estimated future dividends; financial strength and flexibility; debt and equity market conditions, including the ability to access capital markets on favorable terms or at all; cost of debt and equity capital; expected supply and demand for crude oil, natural gas, natural gas liquids and renewable energy; prices of crude oil, natural gas, natural gas liquids and renewable energy; economic and competitive conditions; expected exchange rates; inflation; interest rates; tax rates and changes; completion of growth projects; anticipated in-service dates; capital project funding; success of hedging activities; availability and price of labor and construction materials; operational performance and reliability; customer, shareholder, regulatory and other stakeholder approvals and support; regulatory and legislative decisions and actions; public opinion; and weather. We caution that the foregoing list of factors is not exhaustive. Additional information about these and other assumptions, risks and uncertainties can be found in applicable filings with U.S. securities regulators. Due to the interdependencies and correlation of these factors, as well as other factors, the impact of any one assumption, risk or uncertainty on FLI cannot be determined with certainty. Except to the extent required by law, we assume no obligation to publicly update or revise any FLI, whether as a result of new information, future events or otherwise. All FLI in this presentation is expressly qualified in its entirety by these cautionary statements. 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. 2
Investor Value Proposition Stable. Disciplined. Reliable. We go where the lights are connecting diverse supply basins with regional demand markets last mile competitive advantage Stable business model Outstanding asset footprint Prudent financial management Attractive distribution growth Primarily natural gas pipeline focused Fee-based revenues with no direct commodity exposure and minimal volume risk Well-positioned platform for further demand-pull expansion Track record of successful project execution Commitment to investment grade balance sheet Ample liquidity Successful IDR elimination 41 st consecutive quarterly distribution increase Sustainable growth with strong coverage Strong investment-grade customers 3
Premier Asset Footprint Express Pipeline Platte Pipe Line Ozark Gas Texas Eastern SESH Gulfstream Sabal Trail Maritimes & Northeast, US Algonquin Big Sandy East Tennessee US Transmission $2,020 MM Critical gas & liquids infrastructure Unparalleled asset footprint Safe, reliable operations Connecting diverse supply basins with growing demand markets Stable and predictable cash flow No direct commodity exposure Minimal volume exposure Strong investment-grade customers Track record of successful project execution 4
Strategic Focus Maintain Rock solid base; fully subscribed reservation-based contracts with no direct commodity exposure and minimal volume risk Execute ~$2.5B of growth projects in execution Grow Infrastructure footprint with connections to major demand-pull markets offers strong advantage Sabal Trail restored ROW 5
Business Entity Overview 2018e EBITDA Liquids Assets Express Pipeline Platte Pipe Line ~$2.3B U.S. Transmission Assets Algonquin Gas Transmission Big Sandy Pipeline Bobcat Gas Storage East Tennessee Natural Gas Market Hub Partners Ozark Gas Transmission Saltville Gas Storage Texas Eastern Transmission Maritimes & Northeast, US (78%) Sabal Trail Transmission (50%) Gulfstream Natural Gas (50%) Southeast Supply Header (50%) Steckman Ridge (50%) 6
U.S. Transmission
U.S. Transmission Revenue stability in base business U.S. Transmission Reservation Revenue (Based on transmission revenues for 12 months ended 12/31/17) 95% 98% 98% 99% 98% 97% 100% 96% 2017 Usage & Other Revenue 2017 Reservation Revenue Achieved Peak Delivery Days in 2017 Average Remaining Contract Life 9 years 12 years 8 years 8 years 5 years 15 years 25 years 9 years Texas Eastern Gulfstream Algonquin East Tennessee Southeast Supply Header Northeast Maritimes US & Sabal Trail UST TOTAL(1) (1) Includes all UST assets as presented on slide 6 of this presentation Stable core business highlights valuable footprint and provides platform for growth (1) Includes Texas Eastern, Gulfstream, Algonquin, East Tennessee, Southeast Supply Header, Ozark Gas Transmission, Big Sandy and Maritimes & Northeast US 8
U.S. Transmission Contract Portfolio 2017 TETLP & AGT Firm Demand Revenues by Customer Type: LDCs 51% Marketers 26% 2017 US Transmission Firm Demand Revenues by Customer Type: LDCs 41% Marketers 21% Producers 21% Other 2% Pipelines 3% Producers 14% Power Gen 4% Other < 5% Power Gen 12% 2017 Texas Eastern & Algonquin contract renewal rate = 98% 9
U.S. Transmission U.S. Transmission: Secured projects Greenfield pipeline Atlantic Bridge NEXUS PennEast TEAL 2018 Project Bayway Lateral Expected ISD 4Q17 Capital ($MM) NEXUS 1 3Q18 1,300 TEAL 3Q18 200 Atlantic Bridge 2 4Q18 500 30 STEP 4Q18 130 Stratton Ridge 1H19 200 Stratton Ridge 2019+ PennEast 1 2019 260 Lambertville East 2H19 45 Texas-Louisiana Markets 2H19 20 STEP 1) Represents SEP s portion 2) Partial in-service Nov 2017 with remaining in 4Q18 10
Sabal Trail Transmission Timing Through 1H20 1H20-1H21 Post 1H21 Commercial Volumes 70% capacity 90% capacity 100% capacity New interstate pipeline into Florida increases diversity of supply Project Scope: 1+ Bcf/d of capacity connecting Transco Station 85 supply to Florida power generation market CapEx: $3.2B 1 Customers: Florida Power & Light; Duke Energy Facilities: 495 miles of 36 greenfield pipeline; and 21 miles of 24 greenfield pipeline 5 new compressor stations totaling up to 210,000 horsepower; to be phased-in 2017 2021 New metering and regulating stations; creates new Central Florida Hub with interconnects with Gulfstream, FGT and Florida Southeast Connection Volume ramp-up 1) CapEx shown at 100% 11
NEXUS Delivering Prolific Supply to Premium Markets Dawn Hub Enbridge Gas Distribution & Union Gas Interconnects: LDC Power / Industrial Storage Pipeline Route: NEXUS DTE Gas Vector 255 miles of greenfield pipe, moving 1.5 Bcf/d of Marcellus gas to markets in Ohio, Michigan and Ontario Provides a diverse, competitive supply of natural gas to markets along the route Vector Texas Eastern 12
U.S. Transmission Development opportunities Existing, attached gas-fired plant Planned gas-fired plant Our infrastructure footprint with connections to major markets offers strong advantages for our customers Northeast and New England demand continues to increase Power Generation Market Region Expansions Significant opportunities to serve growing natural gas-fired power market in U.S. and Mexico, LNG exports, and U.S. industrial market Exports to Mexico LNG & Industrial 13
Northeast & New England Development opportunities in next 5 years DETROIT NEXUS Dawn Hub DC New England Opportunities NYC PHILADELPHIA BOSTON Philly Market Expansions Northeast / New England Demand continues to increase Solution needed to bring affordable gas to the region Philadelphia Market Market opportunities for industrial and exports $1-3B in opportunities Natural gas fired generation replaces other retiring generation sources 14
Southeast Markets Development opportunities in next 5 years Southeast Markets MS AL GA Power generation opportunities Natural gas power generation - Coal-to-gas conversions - Increase in Florida demand NOLA FL ORLANDO $1-2B in opportunities TAMPA Continued growth in natural gas fired power generation 15
Gulf Coast Markets Development opportunities in next 5 years Gulf Coast TX LA MS Epicenter of demand for LNG and Mexico exports NOLA MT BELVIEU LNG & Industrial $2-4B in opportunities Mexico Exports to Mexico New Gulf Coast natural gas demand drives solid growth opportunities 16
Liquids
Express & Platte Pipelines Express Pipeline 280 kbpd Hardisty Hardisty to Casper Uniquely situated pipeline for import of growing Canadian crude supply Stable, secure fee-for-service revenue Average contract term of 9 years Platte Pipeline 170 kbpd Express Buffalo Edgar Casper to Wood River Casper Enhanced connectivity to provide increased utilization Brings diverse crude supply to the Midwest Mix of producers, refiners, marketers Guernsey Gurley Platte Wood River Salisbury Patoka Potential Commercial Synergies Express-Platte system optimization or expansion Cushing ETCO Market access to Cushing/USGC Extension to Patoka Gulf Coast Markets 18
Finance
SEP Financial Outlook, 2018e-2020e Distributable Cash Flow 2018e 2019e 2020e Ongoing EBITDA ~$2,300 ~$2,320 ~$2,350 Earnings from equity investments ~(280) ~(215) ~(295) Distributions from equity investments ~260 ~315 ~360 Maintenance capital ~(230) ~(250) ~(200) Financing Costs ~(315) Distributions to non-controlling interests ~(50) Equity AFUDC ~(45) Other ~10 Distributable Cash Flow $1,630 - $1,670 ~$1,730 ~$1,800 Coverage 1.1x - 1.2x 1.1x 1.2x 1.1x 1.2x DCF Growth Drivers UST Expansion Projects ++ Lower Maintenance Capital + Cost management + Distribution Growth Secured Capital Program $0.0125/qtr 2018: 1 (~7% vs 2017) 2019/20: 4-6% per year 7% dividend increase in 2018; secured capital program alone delivers 4-6% annual distribution growth through 2020 (1) Subject to BOD approval. 20
Key Balance Sheet Metrics Total Debt 12/31/17 $8.5B Financial Covenant Metrics (1) 4.1x Debt/EBITDA Credit Ratings (2) Available Liquidity (1) Calculated in accordance with the credit agreements; max 5.0x (2) Moody s / S&P / Fitch senior unsecured ratings Baa2 / BBB+ / BBB $0.4B Committed to investment grade balance sheet 21
2017 Credit Exposure Credit Exposures by Counterparty Rating (1) 92% Investment Grade "A" rated or higher "BBB" rated Sub-investment grade 8% BB and Below (1) Credit Exposure reflected after impact of any credit enhancement 22
Consolidated Debt Maturity Profile US$ Millions As of 2/1/18 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $- 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 SEP, LP Texas Eastern Algonquin East Tennessee Express-Platte 23
Secured Projects
Projects in Execution Continue to pursue development projects 2018 2019 Bayway Lateral In-Service Date 4Q17 Note: Execution = customer agreements executed; currently in permitting phase and/or in construction JV projects shown with Spectra Energy Partners' expected portion Counterparties 100% 50/50 100% SUPPLY DEMAND PUSH PULL Est. CapEx (USD $MM) NEXUS (1) 3Q18 1,300 TEAL 3Q18 200 Atlantic Bridge (2) 4Q18 500 STEP 4Q18 130 Stratton Ridge 1H19 200 PennEast (1) 2H19 260 Lambertville East 2H19 45 Texas-Louisiana Markets 2H19 20 1) Represents SEP s portion 2) Partial in-service Nov 2017 with remaining in 4Q18 Total Projects in Execution 30 ~$2.5B 25
Atlantic Bridge Purpose: To allow abundant, economic supplies of natural gas from regional production to flow to the New England & Atlantic Canada markets Project Scope: ~135 MMcf/d expansion of the Algonquin and Maritimes & Northeast Pipelines CapEx: $500MM Customers: Various local distribution companies in New England & Atlantic Canada Project Status: Pre-filed with FERC Jan 2015 Filed FERC application Oct 2015 Received FERC certificate Jan 2017 Partially in-service Nov 2017 with remaining in 4Q18 Preliminary Facilities: New compressor station near Weymouth, MA Continued take-up and relay of the AGT mainline Compressor station unit upgrades in CT Meter station addition and modifications 26
Bayway Lateral NJ Texas Eastern Bayway Refinery City of LINDEN Bayway Lateral STATEN ISLAND NY Purpose: Provides service to an existing power plant and refinery Project Scope: Capacity: 300 MMcf/d CapEx: $30MM Customers: Linden Cogeneration Phillips 66 Project Status: Filed FERC application July 2016 Received FERC certificate via delegate order on July 3, 2017 In-service late 4Q17 Facilities: ~ ½ mile of 24-inch lateral in Linden, New Jersey New meter station with dual delivery meters 27
Lambertville East NY Purpose: Low-risk, organic investment driven by compliance requirements and underpinned by long-term contracts that will provide needed capacity for two existing utility customers ALGONQUIN HANOVER LINDEN MANHATTAN LONG ISLAND 60 MDth Project Scope: Upgrades to the existing Lambertville Compressor Station with an added capacity of 60,000 DTH/d CapEx: $45MM Project Status: Filed FERC application 4Q17 Commence construction 1H19 In-service 2H19 LAMBERTVILLE PA TEXAS EASTERN NJ 28
NEXUS Market Connections: 1.75 Bcf/d of market connections across Ohio Purpose: To serve local distribution companies, power generators and industrial users in Ohio, Michigan, Chicago & Ontario markets Project Scope: 1.5 Bcf/d greenfield pipeline starting in northeastern Ohio to an interconnect with the DTE Gas transportation system at Willow Run, Michigan CapEx: SEP s expected portion $1.3B Customers: Union Gas, DTE Gas, Enbridge Gas Distribution, DTE Electric, CEMI, CNX Gas, Noble Energy, Columbia Gas of Ohio Project Status: Filed FERC application Nov 2015 Received Final EIS Nov 2016 Received FERC certificate Aug 2017 Under construction In-service 3Q18 Preliminary Facilities: 36-inch diameter, ~250-mile pipeline Multiple compressor stations and meters 29
PennEast PA Texas Eastern MD Transco DE PennEast NJ AGT Purpose: Provides a new, direct connection to northeast Pennsylvania production; an opportunity to work with some of our biggest customers and leverage our existing assets Project Scope: 1.1 Bcf/d expansion from northeast PA CapEx: SEP s expected portion $260MM Project Status: Filed FERC application Sep 2015 Received FERC certificate Jan 2018 In-service 2H19 Preliminary Facilities: 120 miles of 36 greenfield pipeline 1 new compressor station Interconnections with major interstate and gathering systems including Texas Eastern and Algonquin in New Jersey 30
South Texas Expansion Project (STEP) Petronila TX Vidor Purpose: Provides Texas Eastern transportation service for Gulf Coast markets Project Scope: ~400 MMcf/d expansion from Vidor to Petronila CapEx: $130MM Project Status: Filed FERC application Dec 2016 Received FERC certificate Feb 2018 In-service 4Q18 Preliminary Facilities: New compression at 2 stations Station reversal work at Mont Belvieu 31
Stratton Ridge Purpose: Provides shippers with a firm transportation service to deliver new incremental production from the growing shale plays to the Gulf Coast Project Scope: ~320 MMcf/d CapEx: $200MM Project Status: Filed FERC application Feb 2017 In-service 1H19 Preliminary Facilities: Modification of three mainline compressor stations and installation of two new compressor stations Brazoria Interconnector Gas Pipeline ( BIG ) acquired to connect Texas Eastern mainline to Stratton Ridge in lieu of constructing a new 16.2-mile lateral BIG is a 30.5-mile 42 intrastate pipeline with 5 interconnects, currently connected to Stratton Ridge 32
Texas Eastern Appalachian Lease (TEAL) OH PA WV Purpose: Provides upstream capacity to deliver Marcellus and Utica supply to NEXUS Gas Transmission Project Scope: 950 MMcf/d expansion of Texas Eastern and reversal of OPEN line to deliver into NEXUS NEXUS to lease the capacity from Texas Eastern CapEx: $200MM Project Status: Filed FERC application Nov 2015 Received final EIS Nov 2016 Received FERC certificate Aug 2017 In-service 3Q18 Preliminary Facilities: Reversal of OPEN facilities with addition of 28,200 HP 4.5 miles of looping on Texas Eastern mainline Connection between OPEN and NEXUS 33
Texas-Louisiana Markets Purpose: Provides firm transportation to power generation and industrial market load along the Texas and Louisiana coasts; and further enhances Texas Eastern as a fully bi-directional pipeline connecting valuable supply basins with long-term valuable market centers Project Scope: Texas Industrial Market Project: 82,500 Dth/d Louisiana Market Project: 75,000 Dth/d CapEx: $20MM Project Status: Filed FERC application Oct 2017 In-service 2H19 Preliminary Facilities: Upgrades to the existing Texas Eastern Gillis Compressor Station 34