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SPECTRA ENERGY PARTNERS, LP filed this Form 10-Q on 11/2/2017


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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
 
 
 
FORM 10-Q
 
 
 
 
 
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2017
or
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number 1-33556
 
 
 
 
 
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=11867157&doc=13 
SPECTRA ENERGY PARTNERS, LP
(Exact Name of Registrant as Specified in its Charter)
 
 
 
 
 
Delaware
 
41-2232463
(State or other jurisdiction of incorporation)
 
(IRS Employer Identification No.)
5400 Westheimer Court
Houston, Texas 77056
(Address of principal executive offices, including zip code)
713-627-5400
(Registrant’s telephone number, including area code)
 
 
 
 
 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  ý    Accelerated  filer  ¨    Non-accelerated filer  ¨   
Smaller reporting company  ¨ Emerging growth company  ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý
At September 30, 2017, there were 310,983,868 common units and 6,345,881 general partner units outstanding.
 
 
 
 
 



SPECTRA ENERGY PARTNERS, LP
FORM 10-Q FOR THE QUARTER ENDED
September 30, 2017
INDEX
 
 
 
 
 
 
Page
 
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
 
 
 
Item 1.
 
 
 
Item 1A.
 
 
 
Item 5.
 
 
 
Item 6.
 
 
 
 

2


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This document 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 represent management’s intentions, plans, expectations, assumptions and beliefs about future events. 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 are subject to risks, uncertainties and other factors, many of which are outside our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Factors used to develop these forward-looking statements and that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to:
state, provincial, 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 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;
growth in opportunities, including the timing and success of efforts to develop U.S. and Canadian pipeline, storage, gathering and other related infrastructure projects and the effects of competition;
the performance of natural gas transmission, storage and gathering facilities, and crude oil transportation and storage;
the extent of success in connecting natural gas and oil supplies to transmission and gathering 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.
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 Spectra Energy Partners, LP has described. Spectra Energy Partners, LP undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

3


PART I. FINANCIAL INFORMATION
Item 1.    Financial Statements.

SPECTRA ENERGY PARTNERS, LP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in millions, except per-unit amounts)

 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2017
 
2016
 
2017
 
2016
Operating Revenues
 
 
 
 
 
Transportation of natural gas
$
541

 
$
482

 
$
1,617

 
$
1,441

Transportation of crude oil
94

 
89

 
295

 
262

Storage of natural gas and other
58

 
57

 
176

 
167

Total operating revenues
693

 
628

 
2,088

 
1,870

Operating Expenses
 
 
 
 
 
 
 
Operating, maintenance and other
197

 
225

 
633

 
594

Depreciation and amortization
86

 
78

 
258

 
232

Property and other taxes
36

 
45

 
148

 
135

Total operating expenses
319

 
348

 
1,039

 
961

Operating Income
374

 
280

 
1,049

 
909

Other Income and Expenses
 
 
 
 
 
 
 
Earnings from equity investments
161

 
35

 
239

 
92

Other income and expenses, net
15

 
38

 
109

 
89

Total other income and expenses
176

 
73

 
348

 
181

Interest Expense
75

 
53

 
191

 
165

Earnings Before Income Taxes
475

 
300

 
1,206

 
925

Income Tax Expense
4

 
4

 
14

 
13

Net Income
471

 
296

 
1,192

 
912

Net Income—Noncontrolling Interests
11

 
21

 
87

 
52

Net Income—Controlling Interests
$
460

 
$
275

 
$
1,105

 
$
860

Calculation of Limited Partners’ Interest in Net Income:
 
 
 
 
 
 
 
Net income—Controlling Interests
$
460

 
$
275

 
$
1,105

 
$
860

Less: General partner’s interest in net income
101

 
81

 
284

 
226

Limited partners’ interest in net income
$
359

 
$
194

 
$
821

 
$
634

Weighted average limited partner units outstanding—basic and diluted
311

 
304

 
310

 
296

Net income per limited partner unit—basic and diluted
$
1.15

 
$
0.64

 
$
2.65

 
$
2.14

Distributions paid per limited partner unit
$
0.71375

 
$
0.66375

 
$
2.10375

 
$
1.95375





See Notes to Condensed Consolidated Financial Statements.
4


SPECTRA ENERGY PARTNERS, LP
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited; in millions)

 
 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
 
2017
 
2016
 
2017
 
2016
Net Income
 
$
471

 
$
296

 
1,192

 
$
912

Foreign currency translation adjustments
 
8

 
(4
)
 
15

 
8

Change in unrealized loss on cash flow hedges
 
(3
)
 

 
(3
)
 

Total Comprehensive Income
 
476

 
292

 
1,204

 
920

Less: Comprehensive Income—Noncontrolling Interests
 
11

 
21

 
87

 
52

Comprehensive Income—Controlling Interests
 
$
465

 
$
271

 
$
1,117

 
$
868


See Notes to Condensed Consolidated Financial Statements.
5


SPECTRA ENERGY PARTNERS, LP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited; in millions)

 
 
September 30,
2017
 
December 31,
2016
ASSETS
 
 
 
 
Current Assets
 
 
 
 
Cash and cash equivalents
 
$
107

 
$
216

Receivables, net
 
310

 
380

Inventory
 
40

 
40

Fuel tracker
 
23

 
6

Other
 
24

 
18

Total current assets
 
504

 
660

Investments and Other Assets
 
 
 
 
Investments in and loans to unconsolidated affiliates
 
3,207

 
1,127

Goodwill
 
2,957

 
3,234

Other assets, net
 
134

 
108

Total investments and other assets
 
6,298

 
4,469

Property, Plant and Equipment
 
 
 
 
Cost
 
18,633

 
19,958

Less accumulated depreciation and amortization
 
4,037

 
3,866

Property, plant and equipment, net
 
14,596

 
16,092

Regulatory and Other Assets
 
321

 
385

Total Assets
 
$
21,719

 
$
21,606


See Notes to Condensed Consolidated Financial Statements.
6


SPECTRA ENERGY PARTNERS, LP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited; in millions; number of units in millions)
 
 
September 30,
2017
 
December 31,
2016
LIABILITIES AND EQUITY
 
 
 
 
Current Liabilities
 
 
 
 
Accounts payable
 
$
188

 
$
441

Commercial paper
 
2,033

 
574

Taxes payable
 
76

 
76

Interest payable
 
38

 
79

Current portion of long-term debt
 
506

 
416

Other
 
151

 
193

Total current liabilities
 
2,992

 
1,779

Long-term Debt
 
5,714

 
6,223

Deferred Credits and Other Liabilities
 
 
 
 
Deferred income taxes
 
45

 
42

Regulatory and other liabilities
 
158

 
158

Total deferred credits and other liabilities
 
203

 
200

Commitments and Contingencies
 


 


Equity
 
 
 
 
Partners’ Capital
 
 
 
 
Common units (311.0 and 308.4 units issued and outstanding at September 30, 2017 and December 31, 2016, respectively)
 
11,933

 
11,650

General partner units (6.3 units issued and outstanding at September 30, 2017 and December 31, 2016)
 
537

 
452

Accumulated other comprehensive loss
 
(33
)
 
(45
)
Total partners’ capital
 
12,437

 
12,057

Noncontrolling interests
 
373

 
1,347

Total equity
 
12,810

 
13,404

Total Liabilities and Equity
 
$
21,719

 
$
21,606


See Notes to Condensed Consolidated Financial Statements.
7


SPECTRA ENERGY PARTNERS, LP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in millions)


 
 
Nine Months Ended
September 30,
 
 
2017
 
2016
OPERATING ACTIVITIES
 
 
 
 
Net income
 
$
1,192

 
$
912

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
255

 
237

Deferred income tax expense
 
2

 
4

Earnings from equity investments
 
(239
)
 
(92
)
Distributions from equity investments
 
105

 
87

Other
 
(174
)
 
(78
)
Net cash provided by operating activities
 
1,141

 
1,070

INVESTING ACTIVITIES
 
 
 
 
Capital expenditures
 
(1,592
)
 
(1,546
)
Investments in and loans to unconsolidated affiliates
 
(218
)
 
(181
)
Purchase of intangible, net
 
(40
)
 
(80
)
Distributions from equity investments
 
27

 
45

Distribution to equity investment
 

 
(148
)
Purchases of held-to-maturity securities
 
(15
)
 
(31
)
Proceeds from sales and maturities of held-to-maturity securities
 
13

 
26

Purchases of available-for-sale securities
 
(69
)
 
(550
)
Proceeds from sales and maturities of available-for-sale securities
 
76

 
546

Other changes in restricted funds
 
3

 
7

Net cash outflow from deconsolidation of subsidiary
 
(67
)
 

Other
 
3

 
(2
)
Net cash used in investing activities
 
(1,879
)
 
(1,914
)
FINANCING ACTIVITIES
 
 
 
 
Proceeds from the issuance of long-term debt
 
400

 

Payments for the redemption of long-term debt
 
(816
)
 
(267
)
Net increase in commercial paper
 
1,459

 
701

Distributions to noncontrolling interests
 
(37
)
 
(22
)
Contributions from noncontrolling interests
 
416

 
437

Proceeds from the issuances of units
 
115

 
972

Distributions to partners
 
(907
)
 
(777
)
Other
 
(1
)
 
(3
)
Net cash provided by financing activities
 
629

 
1,041

Net increase (decrease) in cash and cash equivalents
 
(109
)
 
197

Cash and cash equivalents at beginning of period
 
216

 
168

Cash and cash equivalents at end of period
 
$
107

 
$
365

Supplemental Information
 
 
 
 
Property, plant and equipment non-cash accruals
 
$
84

 
$
219




See Notes to Condensed Consolidated Financial Statements.
8


SPECTRA ENERGY PARTNERS, LP
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited; in millions)


 
Partners’ Capital
 
Noncontrolling Interests
 
Total
 
Common
 
General
Partner
 
Accumulated Other
Comprehensive Income (Loss)
December 31, 2016
$
11,650

 
$
452

 
$
(45
)
 
$
1,347

 
$
13,404

Net income
821

 
284

 

 
87

 
1,192

Other comprehensive income

 

 
12

 

 
12

Attributed deferred tax benefit

 
55

 

 

 
55

Issuances of units
113

 
2

 

 

 
115

Distributions to partners
(651
)
 
(256
)
 

 

 
(907
)
Contributions from noncontrolling interests

 

 

 
416

 
416

Distributions to noncontrolling interests

 

 

 
(37
)
 
(37
)
Sabal Trail deconsolidation

 

 

 
(1,440
)
 
(1,440
)
September 30, 2017
$
11,933

 
$
537

 
$
(33
)
 
$
373

 
$
12,810

December 31, 2015
$
10,527

 
$
336

 
$
(50
)
 
$
533

 
$
11,346

Net income
634

 
226

 

 
52

 
912

Other comprehensive income

 

 
8

 

 
8

Attributed deferred tax benefit

 
42

 

 
14

 
56

Issuances of units
952

 
20

 

 

 
972

Distributions to partners
(577
)
 
(200
)
 

 

 
(777
)
Contributions from noncontrolling interests

 

 

 
437

 
437

Distributions to noncontrolling interests

 

 

 
(22
)
 
(22
)
September 30, 2016
$
11,536

 
$
424

 
$
(42
)
 
$
1,014

 
$
12,932




See Notes to Condensed Consolidated Financial Statements.
9


SPECTRA ENERGY PARTNERS, LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. General
The terms “we,” “our,” “us” and “Spectra Energy Partners” as used in this report refer collectively to Spectra Energy Partners, LP and its subsidiaries unless the context suggests otherwise. These terms are used for convenience only and are not intended as a precise description of any separate legal entity within Spectra Energy Partners.
Nature of Operations. Spectra Energy Partners, through its subsidiaries and equity affiliates, is engaged in the transmission, storage and gathering of natural gas and the transportation and storage of crude oil through interstate pipeline systems. We are a Delaware master limited partnership.
We manage our business in two reportable segments: U.S. Transmission and Liquids. The U.S. Transmission segment provides interstate transmission, storage and gathering of natural gas. The Liquids segment provides transportation of crude oil.
On February 27, 2017, Enbridge Inc. (Enbridge) and Spectra Energy Corp (Spectra Energy) completed a merger transaction (the Merger) resulting in Spectra Energy being a wholly owned subsidiary of Enbridge. As a result of the Merger, we became an indirect subsidiary of Enbridge through Enbridge’s ownership of Spectra Energy. As of September 30, 2017, Enbridge and its subsidiaries collectively owned a 75% ownership interest in us (a 73% limited partner interest and a 2% general partner interest), together with 100% of our incentive distribution rights, and the remaining 25% limited partner interest was publicly owned.
Basis of Presentation. The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) for interim consolidated financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all of the information and notes required by U.S. GAAP for annual consolidated financial statements and should therefore be read in conjunction with our annual consolidated financial statements and notes presented in our Annual Report on Form 10-K for the year ended December 31, 2016. In the opinion of management, the condensed consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our financial position, results of operations and cash flows for the interim periods reported. These condensed consolidated financial statements follow the same significant accounting policies as those included in our annual consolidated financial statements for the year ended December 31, 2016, except for the adoption of new standards. See Note 14 for additional information on the adoption of new standards.


10


2. Segment Information
We manage our business in two reportable segments: U.S. Transmission and Liquids. The remainder of our business operations is presented as “Other,” and consists of certain corporate costs.
Condensed Consolidated Statements of Operations
Total Operating Revenues
 
Depreciation and Amortization
 
Segment EBITDA/ Consolidated Earnings Before Income Taxes
 
(in millions)
Three Months Ended September 30, 2017
 
 
 
 
 
U.S. Transmission
$
595

 
$
78

 
$
589

Liquids
98

 
8

 
67

Total reportable segments
693

 
86

 
656

Other

 

 
(21
)
Depreciation and amortization

 

 
86

Interest expense

 

 
75

Interest income and other

 

 
1

Total consolidated
$
693

 
$
86

 
$
475

Three Months Ended September 30, 2016
 
 
 
 
 
U.S. Transmission
$
535

 
$
71

 
$
392

Liquids
93

 
7

 
60

Total reportable segments
628

 
78

 
452

Other

 

 
(21
)
Depreciation and amortization

 

 
78

Interest expense

 

 
53

Interest income and other

 

 

Total consolidated
$
628

 
$
78

 
$
300

Nine Months Ended September 30, 2017
 
 
 
 
 
U.S. Transmission
$
1,783

 
$
234

 
$
1,548

Liquids
305

 
24

 
197

Total reportable segments
2,088

 
258

 
1,745

Other

 

 
(92
)
Depreciation and amortization

 

 
258

Interest expense

 

 
191

Interest income and other

 

 
2

Total consolidated
$
2,088

 
$
258

 
$
1,206

Nine Months Ended September 30, 2016
 
 
 
 
 
U.S. Transmission
$
1,602

 
$
210

 
$
1,209

Liquids
268

 
22

 
174

Total reportable segments
1,870

 
232

 
1,383

Other

 

 
(63
)
Depreciation and amortization

 

 
232

Interest expense

 

 
165

Interest income and other

 

 
2

Total consolidated
$
1,870

 
$
232

 
$
925

    

11


3. Net Income Per Limited Partner Unit and Cash Distributions
We determined basic and diluted net income per limited partner unit as follows:
 
 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
 
2017
 
2016
 
2017
 
2016
 
 
(in millions, except per unit amounts)
Net income—controlling interests
 
$
460

 
$
275

 
$
1,105

 
$
860

Less: Net income attributable to:
 
 
 
 
 
 
 
 
General partner’s interest in general partner units—2%
 
10

 
5

 
23

 
17

General partner’s interest in incentive distribution rights
 
91

 
76

 
261

 
209

Limited partners’ interest in net income attributable to common units
 
$
359

 
$
194

 
$
821

 
$
634

Weighted average limited partner units outstanding—basic and diluted
 
311

 
304

 
310

 
296

Net income per limited partner unit—basic and diluted
 
$
1.15

 
$
0.64

 
$
2.65

 
$
2.14

Our partnership agreement requires that, within 60 days after the end of each quarter, we distribute all of our Available Cash, as defined below, to unitholders of record on the applicable record date.
Available Cash. Available Cash, for any quarter, consists of all cash and cash equivalents on hand at the end of that quarter:
less the amount of cash reserves established by the general partner to:
provide for the proper conduct of business,
comply with applicable law, any debt instrument or other agreement, or
provide funds for minimum quarterly distributions to the unitholders and to the general partner for any one or more of the next four quarters,
plus, if the general partner so determines, all or a portion of cash and cash equivalents on hand on the date of determination of Available Cash for the quarter.
Incentive Distribution Rights. The general partner holds incentive distribution rights beyond the first target distribution in accordance with the partnership agreement as follows:
 
 
 
 
 
Marginal Percentage
Interest in Distributions
Distribution Targets
 
Portion of Quarterly Distribution Per Common Unit
 
Common
Unitholders
 
General
Partner
Minimum Quarterly Distribution
 
$0.30
 
98
%
 
2
%
First Target Distribution
 
above $0.30 up to $0.345
 
98
%
 
2
%
Second Target Distribution
 
above $0.345 up to $0.375
 
85
%
 
15
%
Third Target Distribution
 
above $0.375 up to $0.45
 
75
%
 
25
%
Thereafter
 
above $0.45
 
50
%
 
50
%
To the extent these incentive distributions are made to the general partner, there will be more Available Cash proportionately allocated to our general partner than to holders of common units. A cash distribution of $0.72625 per limited partner unit was declared on November 1, 2017 and is payable on November 29, 2017 to unitholders of record at the close of business on November 13, 2017.
In October 2015, Spectra Energy acquired our 33.3% ownership interest in Sand Hills Pipeline, LLC (Sand Hills) and DCP Southern Hills Pipeline, LLC (Southern Hills). In consideration for this transaction, we retired 21,560,000 of our common units and 440,000 of our general partner units held by Spectra Energy, resulting in a reduction of any associated distributions payable to Spectra Energy. In addition, and as a component of the transaction, Spectra Energy waived its right to receive aggregate quarterly distributions on its incentive distribution rights, if any, by $4 million per quarter for a period of 12 consecutive quarters ending on September 30, 2018.

12


4. Variable Interest Entities
Sabal Trail. We own a 50% interest in Sabal Trail Transmission, LLC (Sabal Trail), a joint venture that operates a pipeline originating in Alabama that transports natural gas to Florida (the Sabal Trail pipeline). Sabal Trail is a variable interest entity (VIE) due to insufficient equity at risk to finance its activities.
On July 3, 2017, the Sabal Trail pipeline was placed into service. In accordance with the Sabal Trail LLC Agreement, upon the commencement of commercial service of the Sabal Trail pipeline, the power to direct Sabal Trail’s activities became shared with its members. Consequently, we are no longer the primary beneficiary and as a result deconsolidated the assets, liabilities and noncontrolling interest related to Sabal Trail at the in-service date.
At deconsolidation, our interest in Sabal Trail was recorded at its fair value of $1.9 billion. We recognized a gain of $106 million related to the remeasurement of the retained equity interest to its fair value. The gain was recorded in Earnings from Equity Investments on the Condensed Consolidated Statements of Operations. The fair value was determined using the income approach which is based on the present value of future cash flows. The inputs used in the development of the fair value, representative of a Level 3 fair value measurement, include, but are not limited to, the amount and timing of projected future cash flows and a 9% discount rate used to measure the risks inherent in the future cash flows.
Subsequent to deconsolidation, we determined that we continue to have the ability to exercise significant influence over Sabal Trail and accounted for it under the equity method. Our maximum exposure to loss is $2.0 billion. We have an investment in Sabal Trail of $1.9 billion as of September 30, 2017, classified as Investments in and Loans to Unconsolidated Affiliates on our Condensed Consolidated Balance Sheets.
Nexus. We own a 50% interest in Nexus Gas Transmission, LLC (Nexus), a joint venture that is constructing a greenfield natural gas pipeline from Ohio to Michigan and leasing capacity on third party pipelines in order to provide transportation of Appalachian Basin natural gas to markets in Ohio, Michigan, and the Dawn Hub in Ontario, Canada through the Vector Pipeline. Nexus is a VIE due to insufficient equity at risk to finance its activities. We determined that we are not the primary beneficiary because the power to direct the activities of Nexus that most significantly impact its economic performance is shared. We account for Nexus under the equity method. Our maximum exposure to loss is $1.0 billion. We have an investment in Nexus of $533 million and $356 million as of September 30, 2017 and December 31, 2016, respectively, classified as Investments in and Loans to Unconsolidated Affiliates on our Condensed Consolidated Balance Sheets.
In December 2016, we issued performance guarantees to a third party and an affiliate on behalf of Nexus. See Note 12 for further discussion of the guarantee arrangement.
PennEast Pipeline. In June 2017, we purchased an additional 10% interest in PennEast Pipeline (PennEast) from PSEG Power Gas Holdings, LLC, increasing our ownership interest in PennEast to 20%. PennEast is a joint venture that is proposing to construct a natural gas pipeline originating in northeastern Pennsylvania, and ending near Pennington, Mercer County, New Jersey. PennEast is a VIE due to insufficient equity at risk to finance its activities. We determined that we are not the primary beneficiary because the power to direct the activities of PennEast that most significantly impact its economic performance is shared. We account for PennEast under the equity method. Our maximum exposure to loss is $274 million. We have an investment in PennEast of $47 million and $11 million as of September 30, 2017 and December 31, 2016, respectively, classified as Investments in and Loans to Unconsolidated Affiliates on our Condensed Consolidated Balance Sheets.
5. Intangible Asset
During the first quarter of 2016 we entered into a project coordination agreement (PCA) with NextEra, Duke Energy Corporation and Williams Partners L.P. In accordance with the agreement, payments were made based on our proportional ownership interest in the Sabal Trail project as certain milestones of the project were met.
As of September 30, 2017, all milestones were achieved and paid, totaling $120 million. As of September 30, 2016, two milestones had been achieved and payments totaling $80 million were made. Payments are classified as Investing Activities — Purchase of Intangible, Net on our Condensed Consolidated Statements of Cash Flows. This PCA is an intangible asset and is classified as Investments and Other Assets — Other Assets, Net on our Condensed Consolidated Balance Sheets.
The intangible asset will be amortized over a period of 25 years beginning at the time of in-service of the Sabal Trail pipeline, which occurred July 3, 2017. Total amortization expense for intangible assets was approximately $1 million for the period ended September 30, 2017. The amortization expense for each of the next five years is estimated to be approximately $5 million.

13


6. Goodwill
We perform our goodwill impairment test annually and evaluate goodwill when events or changes in circumstances indicate that its carrying value may not be recoverable. We completed our annual goodwill impairment test as of April 1, 2017 and no impairments were identified.
We perform our annual review for goodwill impairment at the reporting unit level, which is identified by assessing whether the components of our operating segments constitute businesses for which discrete financial information is available, whether segment management regularly reviews the operating results of those components and whether the economic and regulatory characteristics are similar. We determined that our reporting units are equivalent to our reportable segments.
As permitted under accounting guidance on testing goodwill for impairment, we perform either a qualitative assessment or a quantitative assessment of each of our reporting units based on management’s judgment. With respect to our qualitative assessments, we consider events and circumstances specific to us, such as macroeconomic conditions, industry and market considerations, cost factors and overall financial performance, when evaluating whether it is more likely than not that the fair values of our reporting units are less than their respective carrying amounts.
7. Marketable Securities and Restricted Funds
We routinely invest excess cash and various restricted balances in securities such as commercial paper, corporate debt securities, and other money market securities in the United States, as well as equity securities in Canada. We do not purchase marketable securities for speculative purposes, therefore we do not have any securities classified as trading securities. While we do not routinely sell marketable securities prior to their scheduled maturity dates, some of our investments may be held and restricted for the purposes of funding future capital expenditures and National Energy Board (NEB) regulatory requirements, so these investments are classified as available-for-sale (AFS) marketable securities as they may occasionally be sold prior to their scheduled maturity dates due to the unexpected timing of cash needs. Initial investments in securities are classified as purchases of the respective type of securities (AFS marketable securities or held-to-maturity (HTM) marketable securities). Maturities of securities are classified within Investing Activities - Proceeds from sales and maturities of securities in the Condensed Consolidated Statements of Cash Flows. 
AFS Securities. We had $3 million and $10 million of AFS securities classified as Investments and Other Assets — Other Assets, Net on the Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016, respectively. These investments include $3 million and $1 million of restricted funds held and collected from customers for Canadian pipeline abandonment in accordance with the NEB's regulatory requirements, as of September 30, 2017 and December 31, 2016, respectively, as well as $9 million of restricted funds related to certain construction projects as of December 31, 2016.
At September 30, 2017, the weighted-average contractual maturity of outstanding AFS securities was less than one year.
There were no material gross unrecognized holding gains or losses associated with investments in AFS securities at September 30, 2017 or December 31, 2016.
HTM Securities. All of our HTM securities are restricted funds. We had $4 million and $3 million of money market securities classified as Current Assets — Other on the Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016, respectively. These securities are restricted pursuant to certain Express-Platte pipeline system (Express-Platte) debt agreements.
At September 30, 2017, the weighted-average contractual maturity of outstanding HTM securities was less than one year.
There were no material gross unrecognized holding gains or losses associated with investments in HTM securities at September 30, 2017 or December 31, 2016.
Other Restricted Funds. In addition to the AFS and HTM securities that were restricted funds as described above, we had other restricted funds totaling $2 million and $5 million classified as Investments and Other Assets — Other Assets, Net on the Condensed Consolidated Balance Sheets at September 30, 2017 and December 31, 2016, respectively. These restricted funds are related to certain construction projects.
Changes in restricted balances are presented within Investing Activities on our Condensed Consolidated Statements of Cash Flows.

14


8. Debt
Credit Facility
 
 
Maturity Date
 
Total Facility
 
Commercial Paper Outstanding at September 30, 2017
 
Available
 
 
 
 
(in millions)
Spectra Energy Partners, LP
 
2021-2022
 
$
2,500

 
$
2,033

 
$
467

On September 1, 2017, we amended our credit agreement. We extended the expiration date of the commitment of $2.3 billion to August 2022. The remaining $0.2 billion of commitments will expire in April 2021.
The issuances of commercial paper, letters of credit and revolving borrowings reduce the amount available under the credit facility. As of September 30, 2017, there were no letters of credit issued or revolving borrowings outstanding under the credit facility.
Our credit agreements contain various covenants. Failure to meet those covenants beyond applicable grace periods could result in accelerated due dates and/or termination of the agreements. We were in compliance with these covenants as of September 30, 2017. In addition, our credit agreements allow for acceleration of payments or termination of the agreements due to nonpayment, or in some cases, due to the acceleration of our other significant indebtedness or other significant indebtedness of some of our subsidiaries. Our debt and credit agreements do not contain provisions that trigger an acceleration of indebtedness based solely on the occurrence of a material adverse change in our financial condition or results of operations.
Debt Issuances. On June 7, 2017, we issued $400 million of variable-rate senior unsecured note due in 2020. Net proceeds from the offering were used to fully repay and terminate the variable-rate senior unsecured term loan due in November 2018.
9. Fair Value Measurements
The following presents, for each of the fair value hierarchy levels, assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016:
Description
Condensed Consolidated Balance Sheet Caption
 
September 30, 2017
Total
 
Level 1
 
Level 2
 
Level 3
 
 
 
(in millions)
Canadian equity securities
Investments and other assets — other assets, net
 
$
3

 
$
3

 
$

 
$

Interest rate swaps
Investments and other assets — other assets, net
 
6

 

 
6

 

Total Assets
 
$
9

 
$
3

 
$
6

 
$

 
 
 

 
 
 
 
 
 
Interest rate swaps
Current liabilities — other
 
$
6

 
$

 
$
6

 
$

Total Liabilities
 
$
6

 
$

 
$
6

 
$


Description
Condensed Consolidated Balance Sheet Caption
 
December 31, 2016
Total
 
Level 1
 
Level 2
 
Level 3
 
 
 
(in millions)
Corporate debt securities
Cash and cash equivalents
 
$
145

 
$

 
$
145

 
$

Corporate debt securities
Investments and other assets — other assets, net
 
9

 

 
9

 

Canadian equity securities
Investments and other assets — other assets, net
 
1

 
1

 

 

Interest rate swaps
Investments and other assets — other assets, net
 
9

 

 
9

 

Total Assets
 
$
164

 
$
1

 
$
163

 
$

Level 1
Level 1 valuations represent quoted unadjusted prices for identical instruments in active markets.

15


Level 2 Valuation Techniques
Fair values of our financial instruments that are actively traded in the secondary market, including our long-term debt, are determined based on market-based prices. These valuations may include inputs such as quoted market prices of the exact or similar instruments, broker or dealer quotations, or alternative pricing sources that may include models or matrix pricing tools, with reasonable levels of price transparency.
For interest rate swaps, we utilize data obtained from a third-party source for the determination of fair value. Both the future cash flows for the fixed-leg and floating-leg of our swaps are discounted to present value.
Level 3 Valuation Techniques
Level 3 valuation techniques include the use of pricing models, discounted cash flow methodologies or similar techniques where at least one significant model assumption or input is unobservable. Level 3 financial instruments also include those for which the determination of fair value requires significant management judgment or estimation.
Financial Instruments
The fair values of financial instruments that are recorded and carried at book value are summarized in the following table. Judgment is required in interpreting market data to develop the estimates of fair value. These estimates are not necessarily indicative of the amounts we could have realized in current markets.
 
 
September 30, 2017
 
December 31, 2016
 
 
Book
Value
 
Approximate
Fair Value
 
Book
Value
 
Approximate
Fair Value
 
 
(in millions)
Note receivable, noncurrent (a)
 
$
71

 
$
71

 
$
71

 
$
71

Long-term debt, including current maturities (b)
 
6,256

 
6,635

 
6,672

 
6,855

________ 
(a)
Included within Investments in and Loans to Unconsolidated Affiliates.
(b)
Excludes commercial paper, unamortized items and fair value hedge carrying value adjustments.
The fair value of our long-term debt is determined based on market-based prices as described in the Level 2 valuation technique described above and is classified as Level 2.
The fair values of cash and cash equivalents, restricted cash, short-term investments, accounts receivable, note receivable-noncurrent, accounts payable, commercial paper and short-term money market securities are not materially different from their carrying amounts because of the short-term nature of these instruments or because the stated rates approximate market rates.
During the nine months ended September 30, 2017 and 2016, there were no material adjustments to assets and liabilities measured at fair value on a nonrecurring basis.
10. Risk Management and Hedging Activities
Changes in interest rates expose us to risk as a result of our issuance of variable and fixed-rate debt and commercial paper. We are exposed to foreign currency risk from the Canadian portion of the Express-Platte pipeline. We employ established policies and procedures to manage our risks associated with these market fluctuations, which may include the use of derivatives, mostly around interest rate exposures.

At September 30, 2017, we had “pay floating - receive fixed”  interest rate swaps outstanding with a total notional amount of $0.9 billion to hedge against changes in the fair value of our fixed-rate that arise as a result of changes in market interest rates. These swaps also allow us to transform a portion of the underlying interest payments related to our long-term debt securities from fixed-rate to variable-rate interest payments in order to achieve our desired mix of fixed and variable-rate debt. Our "pay floating - received fixed" interest rate derivative instruments are designated and qualify as fair value hedges.  The gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk is recognized in the Condensed Consolidated Statements of Operations. During the nine months ended September 30, 2017, the amounts recognized were immaterial.

Our earnings and cash flows are also exposed to variability in longer term interest rates ahead of anticipated fixed rate debt issuances. Forward starting interest rate swaps are used to hedge against the effect of future interest rate movements.

16


During the third quarter 2017, we implemented a program to significantly mitigate our exposure to long-term interest rate variability on select forecast term debt issuances by executing $1.1 billion of “pay fixed - receive floating” 10 year interest rate swaps with an average swap rate of 2.4%. The forward starting swaps are designated and qualify as cash flow hedges with the $3 million unrealized loss on the derivative recognized in change in unrealized loss on cash flow hedges on our Condensed Consolidated Statements of Comprehensive Income.

Information about our interest rate swaps that had netting or rights of offset arrangements are as follows:
 
September 30, 2017
 
December 31, 2016
 
Gross Amounts
Presented in
the Condensed
Consolidated
Balance Sheet
 
Amounts Not
Offset in the
Condensed
Consolidated
Balance Sheet
 
Net
Amount
 
Gross Amounts
Presented in
the Condensed
Consolidated
Balance Sheet
 
Amounts Not
Offset in the
Condensed
Consolidated
Balance Sheet
 
Net
Amount
Description
(in millions)
Assets
$
6

 
$

 
$
6

 
$
9

 
$

 
$
9

Liabilities
$
6

 
$

 
$
6

 
$

 
$

 
$

11. Commitments and Contingencies
Environmental
We are subject to various U.S. federal, state and local laws and regulations, as well as Canadian federal and provincial laws, relating to the protection of the environment. These laws and regulations can change from time to time, imposing new obligations on us.
 
Environmental risk is inherent to liquid hydrocarbon and natural gas pipeline operations, and we and our affiliates are, at times, subject to environmental remediation at various contaminated sites. We manage this environmental risk through appropriate environmental policies and practices to minimize any impact our operations may have on the environment. To the extent that we are unable to recover payment for environmental liabilities from insurance or other potentially responsible parties, we will be responsible for payment of liabilities arising from environmental incidents associated with the operating activities of our liquids and natural gas businesses.

Litigation
We are subject to various legal and regulatory actions and proceedings which arise in the normal course of business, including interventions in regulatory proceedings and challenges to regulatory approvals and permits by special interest groups. While the final outcome of such actions and proceedings cannot be predicted with certainty, management believes that the resolution of such actions and proceedings will not have a material impact on our interim consolidated financial position or results of operations.

12. Guarantees
We have various financial guarantees which are issued in the normal course of business. We enter into these arrangements to facilitate a commercial transaction with a third party by enhancing the value of the transaction to the third party. To varying degrees, these guarantees involve elements of performance and credit risk, which are not included on our Condensed Consolidated Balance Sheets. The possibility of having to perform under these guarantees is largely dependent upon future operations of various subsidiaries, investees and other third parties, or the occurrence of certain future events.
In December 2016, we issued performance guarantees to a third party and an affiliate on behalf of an equity method investee. These guarantees were issued to enable the equity method investee to enter into long-term transportation contracts with the third party. While the likelihood is remote, the maximum potential amount of future payments we could have been required to make as of September 30, 2017 was $84 million. These performance guarantees expire in 2032.
As of September 30, 2017, the amounts recorded for the guarantees described above are not material, either individually or in the aggregate.

17


13. Issuances of Common Units
During the nine months ended September 30, 2017, we issued 2.6 million common units to the public under our at-the-market program, and approximately 52,000 general partner units to our general partner in order for it to maintain a 2% general partner interest. Total net proceeds were $115 million, including approximately $2 million of proceeds from our general partner.
14. New Accounting Pronouncements
ADOPTION OF NEW STANDARDS

Simplifying the Measurement of Goodwill Impairment
Effective January 1, 2017, we early adopted Accounting Standards Update (ASU) 2017-04 and applied the standard on a prospective basis. Under the new guidance, goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value; this amount should not exceed the carrying amount of goodwill. The adoption of the pronouncement did not have a material impact on our consolidated financial statements.

Clarifying the Definition of a Business in an Acquisition
Effective January 1, 2017, we early adopted ASU 2017-01 on a prospective basis. The new standard was issued with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (disposals) of assets or businesses. The adoption of the pronouncement did not have a material impact on our consolidated financial statements.

Accounting for Intra-Entity Asset Transfers
Effective January 1, 2017, we early adopted ASU 2016-16 on a modified retrospective basis. The new standard was issued with the intent of improving the accounting for the income tax consequences of intra-entity asset transfers other than inventory. Under the new guidance, an entity should recognize the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. The adoption of the pronouncement did not have a material impact on our consolidated financial statements.

Improvements to Employee Share-Based Payment Accounting
Effective January 1, 2017, we adopted ASU 2016-09 and applied certain amendments on a modified retrospective basis with the remaining amendments applied on a prospective basis. The new standard was issued with the intent of simplifying and improving several aspects of accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The adoption of the pronouncement did not have a material impact on our consolidated financial statements.

Simplifying the Embedded Derivatives Analysis for Debt Instruments
Effective January 1, 2017, we adopted ASU 2016-06 on a modified retrospective basis. The new guidance simplifies the embedded derivative analysis for debt instruments containing contingent call or put options. The adoption of the pronouncement did not have a material impact on our consolidated financial statements.

FUTURE ACCOUNTING POLICY CHANGES

Improvements to Accounting for Hedging Activities
ASU 2017-12 was issued in August 2017 with the main objective of better aligning a company’s risk management activities and the resulting hedge accounting reflected in the financial statements. The amendments allow cash flow hedging of contractually specified components in financial and non-financial items and make fair value hedges of interest rate risks more effective in certain circumstances. Under the new guidance, hedge ineffectiveness is no longer required to be measured and hedging instruments’ fair value changes will be recorded in the same income statement line as the hedged item. The ASU also allows the initial quantitative hedge effectiveness assessment to be performed at any time before the end of the quarter in which the hedge is designated. After initial quantitative testing is performed, an ongoing qualitative effectiveness assessment is permitted. The Company is currently assessing the impact of the new standard on the consolidated financial statements. The accounting update is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted, and is to be applied on a modified retrospective basis.

Clarifying Guidance on the Application of Modification Accounting on Stock Compensation
ASU 2017-09 was issued in May 2017 with the intent to clarify the scope of modification accounting and when it should be applied to a change to the terms or conditions of a share based payment award. Under the new guidance, modification accounting is required for all changes to share based payment awards, unless all of the following conditions are met: 1) there is

18


no change to the fair value of the award, 2) the vesting conditions have not changed, and 3) the classification of the award as an equity instrument or a debt instrument has not changed. The accounting update is effective for annual periods beginning after December 15, 2017 and is to be applied on a prospective basis. The adoption of ASU 2017-09 is not expected to have a material impact on our consolidated financial statements.

Clarifying Guidance on Derecognition and Partial Sales of Nonfinancial Assets
ASU 2017-05 was issued in February 2017 with the intent of clarifying the scope of asset derecognition guidance and accounting for partial sales of nonfinancial assets. The ASU clarifies the scope provisions of nonfinancial assets and how to allocate consideration to each distinct asset, and amends the guidance for derecognition of a distinct nonfinancial asset in partial sale transactions. We are currently assessing the impact of the new standard on the consolidated financial statements. The accounting update is effective for annual and interim periods beginning after December 15, 2017 and is to be applied on a retrospective or modified retrospective basis.

Improving the Presentation of Net Periodic Benefit Cost related to Defined Benefit Plans
ASU 2017-07 was issued in March 2017 primarily to improve the income statement presentation of the components of net periodic pension cost and net periodic postretirement benefit cost for an entity’s sponsored defined benefit pension and other postretirement plans. In addition, only the service-cost component of net benefit cost is eligible for capitalization. The accounting update is effective for annual and interim periods beginning after December 15, 2017 and is to be applied on a retrospective basis for the statement of earnings presentation component and a prospective basis for the capitalization component. The Company is currently assessing the impact of the new standard on the consolidated financial statements.

Accounting for Credit Losses
ASU 2016-13 was issued in June 2016 with the intent of providing financial statement users with more useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. Current treatment uses the incurred loss methodology for recognizing credit losses that delays the recognition until it is probable a loss has been incurred. The amendment adds a new impairment model, known as the current expected credit loss model that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which the Financial Accounting Standards Board believes will result in more timely recognition of such losses. We are currently assessing the impact of the new standard on our consolidated financial statements. The accounting update is effective for annual and interim periods beginning on or after December 15, 2019.

Recognition of Leases
ASU 2016-02 was issued in February 2016 with the intent to increase transparency and comparability among organizations. It requires lessees of operating lease arrangements to recognize lease assets and lease liabilities on the statement of financial position and disclose additional key information about lease agreements. The accounting update also replaces the current definition of a lease and requires that an arrangement be recognized as a lease when a customer has the right to obtain substantially all of the economic benefits from the use of an asset, as well as the right to direct the use of the asset. We are currently assessing the impact of the new standard on our consolidated financial statements. The accounting update is effective for fiscal years beginning after December 15, 2018 and is to be applied using a modified retrospective approach.

Revenue from Contracts with Customers
ASU 2014-09 was issued in 2014 with the intent of significantly enhancing consistency and comparability of revenue recognition practices across entities and industries. The new standard establishes a single, principles-based five-step model to be applied to all contracts with customers and introduces new and enhanced disclosure requirements. The standard is effective January 1, 2018. The new revenue standard permits either a full retrospective method of adoption with restatement of all prior periods presented, or a modified retrospective method with the cumulative effect of applying the new standard recognized as an adjustment to opening retained earnings in the period of adoption. We have decided to adopt the new revenue standard using the modified retrospective method.

We have reviewed a sample of our revenue contracts in order to evaluate the effect of the new standard on our revenue recognition practices. Based on our initial assessment, estimates of variable consideration which will be required under the new standard for certain revenue contracts, may result in changes to the pattern or timing of revenue recognition for those contracts. While we have not yet completed the assessment, we do not expect these changes will have a material impact on revenue or earnings (loss).We have also developed and tested processes to generate the disclosures required under the new standard.

19


Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
INTRODUCTION
Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the accompanying Condensed Consolidated Financial Statements.
EXECUTIVE OVERVIEW
For the three months ended September 30, 2017 and 2016, we reported net income from controlling interests of $460 million and $275 million, respectively. For the nine months ended September 30, 2017 and 2016, we reported net income from controlling interests of $1,105 million and $860 million, respectively.
The highlights for the nine months ended September 30, 2017 included increased earnings driven by natural gas pipeline expansions, the gain as a result of the deconsolidation and remeasurement of Sabal Trail, and higher tariff rates on the Express pipeline, partially offset by merger-related severance costs.
For the three months ended September 30, 2017 and 2016, Distributable Cash Flow was $363 million and $270 million, respectively. For the nine months ended September 30, 2017 and 2016, Distributable Cash Flow was $1,060 million and $916 million, respectively.
A cash distribution of $0.72625 per limited partner unit was declared on November 1, 2017 and is payable on November 29, 2017. We intend to increase our quarterly distribution by one and a quarter cents per unit each quarter through 2017. Our Board of Directors evaluates each distribution decision within the confines of the Partnership agreement and based on an assessment of growth in Distributable Cash Flow.
For the nine months ended September 30, 2017, we had $1,810 million of capital and investment expenditures. We currently project $2.2 billion of capital and investment expenditures for the full year, including expansion capital expenditures of $2.0 billion. These projections exclude contributions from noncontrolling interests.

We are committed to an investment-grade balance sheet and continued prudent financial management of our capital structure. Therefore, financing growth activities will continue to be based on our strong and growing fee-based earnings and cash flows, the issuances of debt and equity securities as well as return of capital from joint venture asset-level financings. As of September 30, 2017, we had access to a $2.5 billion revolving credit facility which is used principally as a back-stop for our commercial paper program.

On February 27, 2017, Enbridge and Spectra Energy completed a merger transaction resulting in Spectra Energy being a wholly owned subsidiary of Enbridge. As a result of the Merger, we became an indirect subsidiary of Enbridge through Enbridge’s ownership of Spectra Energy.
RESULTS OF OPERATIONS
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2017
 
2016
 
2017
 
2016
 
(in millions)
Operating revenues
$
693

 
$
628

 
$
2,088

 
$
1,870

Operating expenses
319

 
348

 
1,039

 
961

Operating income
374

 
280

 
1,049

 
909

Earnings from equity investments
161

 
35

 
239

 
92

Other income and expenses, net
15

 
38

 
109

 
89

Interest expense
75

 
53

 
191

 
165

Earnings before income taxes
475

 
300

 
1,206

 
925

Income tax expense
4

 
4

 
14

 
13

Net income
471

 
296

 
1,192

 
912

Net income—noncontrolling interests
11

 
21

 
87

 
52

Net income—controlling interests
$
460

 
$
275

 
$
1,105

 
$
860


20


Three Months Ended September 30, 2017 Compared to Same Period in 2016
Operating Revenues. The $65 million increase was driven mainly by:
revenues from natural gas pipeline expansions and
higher transportation revenues on the Express pipeline due to expansion and higher tariff rates.
Operating Expenses. The $29 million decrease was driven mainly by:
lower pipeline inspection and other compliance costs related to the 2016 Texas Eastern pipeline incident and
lower property tax accruals, partially offset by
an increase in costs related to natural gas pipeline expansions.
Earnings from equity investments. The $126 million increase was mainly attributable to a gain as a result of the deconsolidation and re-measurement of Sabal Trail.
Other Income and Expenses, Net. The $23 million decrease was mainly attributable to lower allowance for funds used during construction (AFUDC) due to lower capital spending on expansion projects.
Interest Expense. The $22 million increase was mainly attributable to lower capitalized interest due to Sabal Trail being placed into service and higher average long term debt balances.
Nine Months Ended September 30, 2017 Compared to Same Period in 2016
Operating Revenues. The $218 million increase was driven mainly by:
revenues from natural gas pipeline expansions and
higher transportation revenues on the Express pipeline due to expansion and higher tariff rates, partially offset by
lower recoveries of electric power and other costs passed through to gas transmission customers.
Operating Expenses. The $78 million increase was driven mainly by:
merger-related severance costs and
higher costs related to expansion and maintenance, partially offset by
lower property tax accruals and
lower electric power and other costs passed through to gas transmission customers.
Earnings from equity investments. The $147 million increase was mainly attributable to a gain as a result of the deconsolidation and re-measurement of Sabal Trail.
Other Income and Expenses, Net. The $20 million increase was mainly attributable to higher AFUDC and higher equity earnings resulting from higher capital spending on expansion projects.
Interest Expense. The $26 million increase was mainly attributable to Sabal Trail being placed into service and higher average long term debt balances.
Segment Results
Management evaluates segment performance based on earnings before interest, taxes, and depreciation and amortization (EBITDA). Cash, cash equivalents and investments are managed centrally, so the gains and losses on foreign currency remeasurement, and interest and dividend income, are excluded from the segments’ EBITDA. We consider segment EBITDA to be a good indicator of each segment’s operating performance from its continuing operations, as it represents the results of our operations without regard to financing methods or capital structures. Our segment EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate EBITDA in the same manner.

21


Segment EBITDA is summarized in the following table. Detailed discussions follow.
EBITDA by Business Segment
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2017
 
2016
 
2017
 
2016
 
(in millions)
U.S. Transmission
$
589

 
$
392

 
$
1,548

 
$
1,209

Liquids
67

 
60

 
197

 
174

Total reportable segment EBITDA
656

 
452

 
1,745

 
1,383

Other
(21
)
 
(21
)
 
(92
)
 
(63
)
Depreciation and amortization
86

 
78

 
258

 
232

Interest expense
75

 
53

 
191

 
165

Interest income and other
1

 

 
2

 
2

Earnings before income taxes
$
475

 
$
300

 
$
1,206

 
$
925

The amounts discussed below are after eliminating intercompany transactions.
U.S. Transmission
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2017
 
2016
 
Increase (Decrease)
 
2017
 
2016
 
Increase (Decrease)
 
(in millions)
Operating revenues
$
595

 
$
535

 
$
60

 
$
1,783

 
$
1,602

 
$
181

Operating expenses
 
 
 
 
 
 
 
 
 
 
 
     Operating, maintenance and other
181

 
217

 
(36
)
 
582

 
572

 
10

Other income and expenses
175

 
74

 
101

 
347

 
179

 
168

EBITDA
$
589

 
$
392

 
$
197

 
$
1,548

 
$
1,209

 
$
339

 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2017 Compared to Same Period in 2016
Operating Revenues. The $60 million increase was driven by a $67 million increase due to expansion, primarily on the Algonquin pipeline and Texas Eastern pipeline.
Operating Expenses. The $36 million decrease was driven by:
a $19 million decrease primarily due to pipeline inspection costs related to the 2016 Texas Eastern pipeline incident,
a $14 million decrease in property tax accruals,
a $9 million decrease in operating costs, partially offset by
an $8 million increase in costs related to expansion and
a $2 million increase primarily due to merger-related severance costs.
Other Income and Expenses. The $101 million increase was mainly due to a gain as a result of the deconsolidation and remeasurement of Sabal Trail.
Nine Months Ended September 30, 2017 Compared to Same Period in 2016
Operating Revenues. The $181 million increase was driven by:
a $203 million increase due to expansion, primarily on the Algonquin pipeline and Texas Eastern pipeline, partially offset by
a $13 million decrease in recoveries of electric power and other costs passed through to gas transmission customers.

22


Operating Expenses. The $10 million increase was driven by:
a $29 million increase in costs related to expansion and
a $26 million increase primarily due to merger-related severance costs, partially offset by
a $14 million decrease in property tax accruals,
a $13 million decrease in electric power and other costs passed through to gas transmission customers,
a $12 million decrease due to pipeline inspection costs related to the 2016 Texas Eastern pipeline incident and
a $4 million decrease in operating costs.
Other Income and Expenses. The $168 million increase was mainly due to a gain as a result of the deconsolidation and re-measurement of Sabal Trail, higher equity earnings and higher AFUDC resulting from higher capital spending on expansion projects.
Liquids
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2017
 
2016
 
Increase (Decrease)
 
2017
 
2016
 
Increase (Decrease)
 
(in millions)
Operating revenues
$
98

 
$
93

 
$
5

 
$
305

 
$
268

 
$
37

Operating expenses
 
 
 
 
 
 
 
 
 
 
 
     Operating, maintenance and other
28

 
32

 
(4
)
 
104

 
94

 
10

Other income and expenses
(3
)
 
(1
)
 
(2
)
 
(4
)
 

 
(4
)
EBITDA
$
67

 
$
60

 
$
7

 
$
197

 
$
174

 
$
23

Express pipeline revenue receipts, MBbl/d (a)
255

 
235

 
20

 
260

 
234

 
26

Platte PADD II deliveries, MBbl/d
119

 
131

 
(12
)
 
133

 
131

 
2

_______
(a)    Thousand barrels per day.
Three Months Ended September 30, 2017 Compared to Same Period in 2016
Operating Revenues. The $5 million increase in operating revenues was mainly driven by an increase in transportation revenues mainly due to the Express Enhancement expansion project placed into service in October 2016.
Operating Expenses. The $4 million decrease in operating expenses was mainly driven by lower property taxes, power, and maintenance costs.
Nine Months Ended September 30, 2017 Compared to Same Period in 2016
Operating Revenues. The $37 million increase in operating revenues was driven by:
an increase of $21 million in transportation revenues due to the Express Enhancement expansion project placed into service in October 2016,
higher average tariff rates of $12 million on the Express pipeline and
higher Express pipeline volumes of $10 million, partially offset by
lower Platte pipeline volumes and
lower average tariff rates on the Platte pipeline.
Operating Expenses. The $10 million increase in operating expenses was mainly driven by an increase in power, maintenance, and merger-related severance costs.
Other Income and Expenses. The $4 million decrease in other income and expenses was mainly driven by costs related to the retirement of assets.

23


Other
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2017
 
2016
 
Increase (Decrease)
 
2017
 
2016
 
Increase (Decrease)
 
(in millions)
Operating expenses
$
21

 
$
21

 
$

 
$
92

 
$
63

 
$
29

EBITDA
$
(21
)
 
$
(21
)
 
$

 
$
(92
)
 
$
(63
)
 
$
(29
)
Nine Months Ended September 30, 2017 Compared to Same Period in 2016
Operating Expenses. The $29 million increase primarily reflects merger-related severance costs, partially offset by lower allocated governance costs.
Distributable Cash Flow
We define Distributable Cash Flow as EBITDA plus
distributions from equity investments,
other non-cash items affecting net income, less
earnings from equity investments,
interest expense,
equity AFUDC,
net cash paid for income taxes,
distributions to noncontrolling interests, and
maintenance capital expenditures.
Distributable Cash Flow does not reflect changes in working capital balances. Distributable Cash Flow should not be viewed as indicative of the actual amount of cash that we plan to distribute for a given period.
Distributable Cash Flow is the primary financial measure used by our management and by external users of our financial statements to assess the amount of cash that is available for distribution.
Distributable Cash Flow is a non-GAAP measure and should not be considered an alternative to Net Income, Operating Income, cash from operations or any other measure of financial performance or liquidity presented in accordance with GAAP. Distributable Cash Flow excludes some, but not all, items that affect Net Income and Operating Income and these measures may vary among other companies. Therefore, Distributable Cash Flow as presented may not be comparable to similarly titled measures of other companies.
Significant drivers of variances in Distributable Cash Flow between the periods presented are substantially the same as those previously discussed under Results of Operations. Other drivers include the timing of certain cash outflows, such as capital expenditures for maintenance.








24



Reconciliation of Net Income to Non-GAAP “Distributable Cash Flow”
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2017
 
2016
 
2017
 
2016
 
(in millions)
Net income
$
471

 
$
296

 
$
1,192

 
$
912

Add:
 
 
 
 
 
 
 
Interest expense
75

 
53

 
191

 
165

Income tax expense
4

 
4

 
14

 
13

Depreciation and amortization
86

 
78

 
258

 
232

Foreign currency (gain) loss
(1
)
 

 
(1
)
 

Less:
 
 
 
 
 
 
 
Third party interest income

 

 
1

 
2

EBITDA
635

 
431

 
1,653

 
1,320

Add:
 
 
 
 
 
 
 
Earnings from equity investments
(161
)
 
(35
)
 
(239
)
 
(92
)
Distributions from equity investments
54

 
35

 
132

 
132

Other
9

 
9

 
9

 
12

Less:
 
 
 
 
 
 
 
Interest expense
75

 
53

 
191

 
165

Equity AFUDC
14

 
38

 
107

 
84

Net cash paid for income taxes
4

 
2

 
12

 
7

Distributions to noncontrolling interests
12

 
7

 
37

 
22

Maintenance capital expenditures
69

 
70

 
148

 
178

Distributable Cash Flow
$
363

 
$
270

 
$
1,060

 
$
916



25


Annual Goodwill Impairment Test
As permitted under accounting guidance on testing goodwill for impairment, we perform either a qualitative assessment or a quantitative assessment of each of our reporting units based on management’s judgment. With respect to our qualitative assessments, we consider events and circumstances specific to us, such as macroeconomic conditions, industry and market considerations, cost factors and overall financial performance, when evaluating whether it is more likely than not that the fair values of our reporting units are less than their respective carrying amounts.
In connection with our quantitative assessments, we primarily use a discounted cash flow analysis to determine fair values of those reporting units. Key assumptions in the determination of fair value include the use of an appropriate discount rate and estimated future cash flows. In estimating cash flows, we incorporate expected long-term growth rates in key markets served by our operations, regulatory stability, the ability to renew contracts, commodity prices (where appropriate) and foreign currency exchange rates, as well as other factors that affect our reporting units’ revenue, expense and capital expenditure projections.
We performed either a quantitative assessment or a qualitative assessment for each of our reporting units to determine whether it is more likely than not that the respective fair values of these reporting units are less than their carrying amounts, including goodwill as of April 1, 2017 (our annual testing date). Based on the results of our annual goodwill impairment testing, no indicators of impairment were noted and the fair values of the reporting units that we assessed at April 1, 2017 were substantially in excess of their respective carrying values.
No triggering events have occurred with our reporting units since the April 1, 2017 test that would warrant re-testing for goodwill impairment.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2017, we had negative working capital of $2,488 million. This balance includes commercial paper liabilities totaling $2,033 million and current maturities of long-term debt of $506 million. We will rely upon cash flows from operations, including cash distributions received from our equity affiliates, and various financing transactions, which may include debt and/or equity issuances, to fund our liquidity and capital requirements for the next 12 months. We have access to a revolving credit facility, with available capacity of $467 million at September 30, 2017. This facility is used principally as a back-stop for our commercial paper program, which is used to manage working capital requirements and for temporary funding of capital expenditures. We expect to be self-funding and plan to continue to pursue expansion opportunities over the next several years. Capital resources may continue to include commercial paper, short-term borrowings under our current credit facility and possibly securing additional sources of capital including debt and/or equity, including the use of its ATM program as well as return of capital from joint venture asset-level financings. See Note 8 of Notes to Condensed Consolidated Financial Statements for a discussion of the available credit facility and Financing Cash Flows and Liquidity below for a discussion of effective shelf registrations.
Cash Flow Analysis
The following table summarizes the changes in cash flows for each of the periods presented:
 
 
Nine Months Ended
September 30,
 
 
2017
 
2016
 
 
(in millions)
Net cash provided by (used in):
 
 
 
 
Operating activities
 
$
1,141

 
$
1,070

Investing activities
 
(1,879
)
 
(1,914
)
Financing activities
 
629

 
1,041

Net increase (decrease) in cash and cash equivalents
 
(109
)
 
197

Cash and cash equivalents at beginning of the period
 
216

 
168

Cash and cash equivalents at end of the period
 
$
107

 
$
365

Operating Cash Flows
Net cash provided by operating activities increased $71 million to $1,141 million in the nine months ended September 30, 2017 compared to the same period in 2016, driven mainly by higher earnings, partially offset by changes in working capital.

26


Investing Cash Flows
Net cash used in investing activities decreased $35 million to $1,879 million in the nine months ended September 30, 2017 compared to the same period in 2016. The change was mainly driven by:
a decrease of $40 million in payments related to the purchase of intangibles and
a $148 million distribution of debt proceeds back to Gulfstream Natural Gas System, LLC for payment of its matured debt in 2016, partially offset by
a net cash outflow of $67 million resulting from the deconsolidation of Sabal Trail
an increase of $46 million in capital expenditures and
an increase of $37 million in investments in unconsolidated affiliates, mainly due to Sabal Trail.
Capital and Investment Expenditures by Business Segment
 
 
Nine Months Ended
September 30,
 
 
2017
 
2016
 
 
(in millions)
U.S. Transmission
 
$
1,794

 
$
1,673

Liquids
 
16

 
54

Total consolidated
 
$
1,810

 
$
1,727

Capital and investment expenditures for the nine months ended September 30, 2017 consisted of $1,662 million for expansion projects and $148 million for maintenance and other projects.
We project 2017 capital and investment expenditures of approximately $2.2 billion, consisting of $2.0 billion of expansion capital expenditures and $0.2 billion for maintenance and upgrades of existing plants, pipelines and infrastructure to serve growth. These projections exclude contributions from noncontrolling interests.
Financing Cash Flows and Liquidity
Net cash provided by financing activities decreased $412 million to $629 million in the nine months ended September 30, 2017 compared to the same period in 2016. The change was mainly driven by:
an $857 million decrease in proceeds from issuances of units
a $549 million increase in payments for the redemption of long-term debt and
a $130 million increase in distributions to partners, partially offset by
a $758 million increase in issuances of commercial paper, and
a $400 million increase in proceeds from issuance of long-term debt.
During the nine months ended September 30, 2017, we issued 2.6 million common units to the public under our at-the-market program and approximately 52,000 general partner units to our general partner in order for it to maintain a 2% general partner interest. Total net proceeds were $115 million, including approximately $2 million of proceeds from Spectra Energy. The net proceeds were used for general partnership purposes, which may have included debt repayment, capital expenditures and/or additions to working capital. In 2017, we have issued 3.2 million common units to the public under our at-the-market program and approximately 65,000 general partner units to our general partner, for total net proceeds of approximately $141 million, including approximately $3 million of proceeds from Spectra Energy.
Available Credit Facility and Restrictive Debt Covenants. The terms of our credit agreements require us to maintain a ratio of total Consolidated Indebtedness-to-Consolidated EBITDA, as defined in the agreement, of 5.0 to 1 or less. As of September 30, 2017, this ratio was 4.1 to 1. See Note 8 of Notes to Condensed Consolidated Financial Statements for a discussion of the available credit facility and related financial and other covenants.
Cash Distributions. A cash distribution of $0.72625 per limited partner unit was declared on November 1, 2017, payable on November 29, 2017, representing the fortieth consecutive quarterly increase.
Other Financing Matters. We have an effective shelf registration statement on file with the Securities and Exchange Commission (SEC) to register the issuance of unspecified amounts of limited partner common units and various debt securities. We have another effective registration statement on file with the SEC to register the issuance of $1 billion, in the aggregate, of limited partner units over time. This registration has $245 million available as of September 30, 2017.

27


OTHER ISSUES
New Accounting Pronouncements. See Note 14 of Notes to Condensed Consolidated Financial Statements for discussion.
Item 3.
Quantitative and Qualitative Disclosures about Market Risk.
Our exposure to market risk is described in Item 7A of our Annual Report on Form 10-K, for the year ended December 31, 2016. We believe our exposure to market risk has not changed materially since then.
Item 4.
Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934 (Exchange Act) is recorded, processed, summarized, and reported, within the time periods specified by the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to management, including the Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of the management of Spectra Energy Partners (DE) GP, LP (our General Partner), including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2017, and, based upon this evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that these controls and procedures are effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
Under the supervision and with the participation of the management of our General Partner, including the Principal Executive Officer and Principal Financial Officer, we have evaluated changes in internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended September 30, 2017 and found no change that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting.

28


PART II. OTHER INFORMATION
Item 1.
Legal Proceedings.
Except for the matters described below, we have no material pending legal proceedings that are required to be disclosed hereunder. For more information regarding other legal proceedings, including regulatory and environmental matters, see Note 11 of Notes to Condensed Consolidated Financial Statement, which information is incorporated by reference into this Part II.
Paul Morris v. Spectra Energy Partners (DE) GP, LP, Spectra Energy Corp, Defendants, and Spectra Energy Partners, LP,  Nominal Defendant

A putative class action lawsuit asserting direct and derivative claims was filed in the Delaware Court of Chancery in March of 2016 by Paul Morris (“Plaintiff”), a unitholder of Spectra Energy Partners, LP (“SEP”) (the “Lawsuit”). The claims in the Lawsuit relate to a transaction in October 2015 whereby interests in the Sand Hills and Southern Hills pipelines (the “Assets”) were sold by SEP to SE Corp and, subsequent to that transaction, Spectra Energy Corp (“SE Corp”) contributed the Assets to DCP Midstream, a joint venture in which SE Corp owns a 50% interest (the "Transaction"). The Lawsuit alleges that the consideration paid to SEP by SE Corp in exchange for the Assets was approximately $525 million less than the purported value of such Assets. The Lawsuit asserted direct and derivative claims of breach of contract and breach of the implied duty of good faith and fair dealing against Spectra Energy Partners (DE) GP, LP (“SEP GP”) and direct and derivative claims of tortious interference with the SEP Limited Partnership Agreement against SE Corp. SEP is also named as a “nominal” defendant in the derivative claims.

On January 13, 2017, Plaintiff withdrew all of his direct claims. On June 27, 2017, the Court issued a Memorandum and Opinion dismissing the derivative claims of tortious interference against SE Corp and the breach of the implied duty of good faith and fair dealing against SEP GP, leaving only the derivative claim for breach of the Limited Partnership Agreement against SEP GP pending. The relief sought in the complaint includes rescission of the Transaction, damages, interest and attorneys’ fees.

Sierra Club v. Federal Energy Regulatory Commission, Respondent, and Sabal Trail Transmission, LLC et al., Intervenor-Respondents (D.C. Cir.)

Sierra Club and two other non-governmental organizations filed a Petition for Review of Sabal Trail’s FERC certificate on September 20, 2016 in the D.C. Circuit Court of Appeals. On August 22, 2017, the D.C. Circuit issued an opinion denying one of the petitions, and granting the other petition in part, vacating the certificates, and remanding the case to FERC. The specific issue the court remanded to FERC directs FERC to supplement the Environmental Impact Statement (“EIS”) for the project to estimate, or explain why it can’t estimate, the quantity of green-house gases to be released into the environment by the gas-fired generation plants in Florida that will consume the gas transported by Sabal Trail. The court withheld issuance of the mandate requiring vacatur of the certificate until seven days after the disposition of any timely petition for rehearing. On October 6, 2017, Sabal Trail and FERC each filed timely petitions for rehearing. On September 27, 2017, FERC issued its draft supplemental environmental impact statement (“SEIS”) in response to the D.C. Circuit decision. FERC established November 20, 2017 as the date by when public comment on the draft SEIS must be filed.

Item 1A.
Risk Factors.
In addition to the other information set forth in this report, careful consideration should be given to the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016, which could materially affect our financial condition or future results. There have been no material changes to those risk factors.

29


Item 5.
Other Information.
Reference is hereby made to that certain Registration Statement on Form S-3 (No. 333-207862) (the “Registration Statement”), the prospectus included therein (the “Base Prospectus”) and the prospectus supplement related thereto filed on December 8, 2015 pursuant to Rule 424(b)(2) promulgated under the Securities Act of 1933 (the “Prospectus Supplement”). As of November 3, 2017, the legal conclusions contained under the heading “Material United States Federal Income Tax Consequences” in the Registration Statement, the Base Prospectus and the Prospectus Supplement are, subject to the exceptions, limitations and qualifications set forth thereunder, hereby adopted as the legal conclusions of Vinson & Elkins L.L.P., and the disclosure under such heading in the Registration Statement, the Base Prospectus and the Prospectus Supplement is hereby revised to the effect thereof. In addition, filed herewith as Exhibit 8.1 is an opinion of Vinson & Elkins L.L.P. as to tax matters related to the common units registered under such Registration Statement.
Item 6.
Exhibits.
Any agreements included as exhibits to this Form 10-Q may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:
were not intended to be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
may have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement;
may apply contract standards of “materiality” that are different from “materiality” under the applicable securities laws; and
were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement.
We acknowledge that, notwithstanding the inclusion of the foregoing cautionary statements, we are responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this Form 10-Q not misleading.

30


(a) Exhibits
 
 
Exhibit
Number
  
 
 
 
 
 
 
 
Opinion of Vinson & Elkins L.L.P. as to certain tax matters
 
 
 
 
Amendment No. 4 to Amended and Restated Credit Agreement and Extension Agreement as of September 1, 2017 by and among Spectra Energy Partners, LP, as Borrower, Citibank, N.A., as Administrative Agent, and the lenders party thereto (filed as Exhibit 10.1 to Spectra Energy Partners, LP's Form 8-K dated September 7, 2017).

 
 
 
  
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
  
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
  
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
  
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.