UBS MLP Conference Partnership Overview September 19-20, 2007
Forward Looking Statements Some of the statements in this presentation concerning future performance will be forwardlooking within the meanings of the securities laws. Forward-looking statements are not guarantees of future performance or an assurance that our current assumptions and projections are valid. Actual results may differ materially from those projected. Except for historical information contained herein, the matters discussed in this presentation include forward looking statements that involve risks and uncertainties. You are encouraged to closely consider the additional disclosures and risk factors contained in the prospectus that discuss in detail the factors that could cause future results to be different than contemplated in today s discussion. Investing in common units involves risks associated with Spectra Energy Partners business, the partnership structure and tax characteristics of the common units. Please read the Risk Factors section of the prospectus. In addition, today s presentation 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 in the prospectus. 1
SEP Representatives Name Lon C. Mitchell, Jr. Position Vice President & Chief Financial Officer Background 29 years of diverse energy industry experience 7 years with Duke/Spectra Energy as financial officer of various unregulated operations 9 years with Pacificorp regulated and unregulated entities 13 years with Pennzoil John Arensdorf VP Investor Relations, Spectra Energy Corp 25 years with Spectra Energy / Duke 10 years in Investor Relations Prior to Investor Relations, experience in other financial disciplines in the company M. Sean Blakley Director, Investor & Public Relations 7 years in Spectra Energy tax research & planning group 17 years experience in tax research & planning in the energy industry Certified Public Accountant in Texas 2
SEP Management Team Name Martha B. Wyrsch C. Gregory Harper Lon C. Mitchell, Jr. Position Chairman of the SEP Board President, Chief Executive Officer & Director Vice President & Chief Financial Officer 3
SEP Board of Directors Name Martha B. Wyrsch GP Board Position Chairman of the Board Affiliation President and CEO, Spectra Energy Transmission C. Gregory Harper Director President and CEO of SEP William S. Garner, Jr. Director Group Executive, General Counsel and Secretary of Spectra Energy Gregory J. Rizzo Director Group Vice President of U.S. Regulatory and Project Management for Spectra Energy Transmission Steven D. Arnold Independent Director President of Bordley Management Co. Former SVP, Prudential Capital Group Stewart A. Bliss Nora M. Brownell Independent Director Independent Director Independent financial consultant and senior business advisor Former lead director of Kinder Morgan, Inc. Former FERC Commissioner Former SVP, Meridian Bancorp 4
Key Investment Highlights Elements of SEP s Compelling Investment Profile Attractive Assets Growth Opportunities Strong Sponsorship Experienced Management Portfolio Strategically Positioned Provides Stable Cash Flows Growth-Oriented Business Strategies Visible Growth from Identified Organic Projects Focus on Acquisitions Increase Contracted Capacity by Marketing Diverse Supply Sources / Attractive End Markets Storage Poised to Capture Gulf Coast LNG Opportunities Beneficial Affiliation with Spectra Energy Alignment of Interests Access to Deal Flow Provides Support Services Veteran Leadership Team with Extensive Industry Experience Access to and Alignment with Senior Management of Spectra Energy Financial Strength Strong and Flexible Financial Position 5
Asset Portfolio East Tennessee Natural Gas (100%) 1,400 mile interstate natural gas pipeline 1.3 Bcf/d of capacity 19 receipt points 175 delivery points 1.0 Bcf LNG storage facility Gulfstream Natural Gas (24.5%) 690 mile interstate natural gas pipeline 1.1 Bcf/d of capacity 1.25 Bcf/d by 2009 7 receipt points 19 delivery points Market Hub Partners (50%) 2 high deliverability salt cavern storage facilities 35 Bcf capacity 58 miles of pipeline 12 interconnects Roanoke Nashville Knoxville Moss Bluff Houston Texas Eastern Egan Chattanooga Mobile Atlanta Tampa Orlando East Tennessee Natural Gas Market Hub Partners Gulfstream Miami Note: Texas Eastern pipeline will be retained by Spectra Energy. 6
Cash Flow Certainty Capacity Reservation Fees Underpin Stable Cash Flows 2006 Revenue Composition East Tennessee Gulfstream Market Hub Capacity Reservation Fees Variable Fees Interruptible Contracts 97.7% 1.7% 0.6% 85.6% 2.9% 11.5% 90.0% 0.0% 10.0% $85 million of estimated cash flow available for distribution, almost equally contributed by each asset 7
East Tennessee Natural Gas The Partnership s Cornerstone Asset IL TN Midwestern Gas IN KY NASHVILLE Tennessee Gas Texas Eastern Columbia Gulf KNOXVILLE East Tennessee Jewell Ridge Lateral NC WV Patriot Saltville Extension Gas Storage Kingsport LNG Facility Transco ROANOKE CHARLOTTE VA Managed on a fully-integrated basis with Spectra Energy s U.S. pipeline and storage assets Base market provides solid foundation; new markets provide growth Geographic region provides significant barriers to entry Offers consumers diversity of supplies Tennessee Gas Columbia Gulf MS Texas Eastern AL CHATTANOOGA Southern Natural Gas GA ATLANTA SC Offers producers market reach Current expansion projects: Jewell Ridge in service (228 Mdth/d) Equitable Nora in service (10 Mdth/d) Equitable Jewell Ridge Q4 2008 (40 Mdth/d) Ability to reach off-system customers Primary transportation alternative for on-system customers; off-system customers represent growth opportunity Note: Texas Eastern pipeline and Saltville Gas Storage retained by Spectra Energy. 8
Gulfstream Natural Gas System Key Growth Vehicle for the Partnership State-of-the-art interstate natural gas transmission system Southeast Supply Header AL GA Cypress Pipeline Project One of two major pipelines that serves the nation s fourth most populous state System is only 5 years old MS CODEN Florida Gas Transmission PENSACOLA TALLAHASSEE JACKSONVILLE Approximately $1.7 billion invested to date Gulfstream TAMPA ORLANDO Long-term firm transportation contracts in place Phase IV Meaningful long-term growth opportunities Phase III 2H 2008 / 1H 2009 Phase IV 2H 2008 / 1H 2009 G2 (potential future expansion) Open season process initiated FL Phase III MIAMI 9
Market Hub Partners Strategically Located Storage Facilities TX Growing Onshore Supply Moss Bluff LA Egan MS Growing SE Markets Growing NE Markets Two high deliverability salt cavern natural gas storage facilities Aggregate working gas storage capacity of approximately 35 Bcf Planned expansions take capacity to approximately 47Bcf by 2011 Access to natural gas supplies from Texas, Louisiana and growing imports of LNG to the Gulf Coast SEP owns a 50% interest Interconnecting Pipelines Egan Moss Bluff Emerging LNG Supply ANR Columbia Gulf Florida Gas Tennessee Texas Eastern Texas Gas Trunkline Gas Enterprise Intrastate Kinder Morgan Texas NGPL Kinder Morgan Tejas Texas Eastern Well positioned to serve growing demand for storage services, including requirements of LNG imports 10
Asset Portfolio Maritimes & Northeast Algonquin Roanoke Nashville Knoxville Texas Eastern Chattanooga Atlanta Moss Bluff Egan Mobile East Tennessee Natural Gas Houston Orlando Tampa Market Hub Partners Gulfstream Miami Note: Texas Eastern, Algonquin, Maritimes & Northeast pipelines retained by Spectra Energy. 11
Financial Highlights and Objectives SEP Will Maintain a Strong and Flexible Financial Position Objectives Maintain stable and increasing distributable cash flows Maintain strong balance sheet Provide flexibility for opportunistic growth and expansion Pursue potential acquisitions from third parties and / or Spectra Energy Financial Highlights Attractive cash flow profile Fee-based businesses Long-term contracts and customer relationships Visible growth opportunities Almost no direct commodity price exposure Distribution support through subordination structure 12
Minimum Cash Flow for Distributions ($ in millions, except per unit data) Twelve months ending June 30, 2008 Net Income $72.4 Add: Depreciation and amortization 21.5 Interest expense 26.9 Less: Equity in earnings from Gulfstream and MHP 53.6 Interest income 8.4 Cash reserve 4.1 Provides 1.05x Coverage Ratio Adjusted EBITDA 54.8 Add: Interest income 8.4 Estimated cash available for distribution from Gulfstream 23.8 Estimated cash available for distribution from MHP 32.9 Less: Cash interest expense (income), net 26.9 Maintenance capital expenditures 11.8 Minimum estimated cash available for distribution $81.1 Per unit minimum annual distribution $1.20 Annual distributions to: Public common unitholders 13.8 Spectra Energy 67.3 Total distributions to unitholders and GP at the initial distribution rate $81.1 13
Key Investment Highlights Attractive Assets Growth Opportunities Strong Sponsorship Experienced Management Algonquin Maritimes & Northeast Financial Strength Nashville Knoxville Roanoke Texas Eastern Chattanooga Atlanta Moss Bluff Egan Mobile East Tennessee Natural Gas Houston Orlando Tampa Market Hub Partners Gulfstream Miami Note: Texas Eastern, Algonquin, Maritimes & Northeast pipelines retained by Spectra Energy. 14