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Spectra Energy Partners Reports Year End and Fourth Quarter 2012 Results; Announces 2013 Financial Outlook

  Spectra Energy Partners Reports Year End and Fourth Quarter 2012 Results;
                       Announces 2013 Financial Outlook

PR Newswire

HOUSTON, Feb. 5, 2013

HOUSTON, Feb. 5, 2013 /PRNewswire/ --

  o2012 cash available for distribution up 8% over prior year
  o2012 net income of $193.5 million, up $21.5 million over 2011
  o2013 outlook for cash available for distribution -- $239 million

Spectra Energy Partners, LP (NYSE:SEP) today reported fourth quarter 2012 net
income of $48.1 million, compared with $42.0 million in the prior year
quarter. For the year, net income was up almost $22 million over 2011, with
net income reported at $193.5 million, compared with $172.0 million in 2011.
Cash available for distribution was $53.7 million for the quarter, compared
with $54.8 million in the prior year quarter. For the year, cash available for
distribution was $229.3 million, up from $212.4 million in 2011. Distributions
per limited partner unit for 2012 were $1.95, compared with $1.87 per limited
partner unit for 2011.

(Logo:http://photos.prnewswire.com/prnh/20071107/CLW064)

The increases in net income and cash available for distribution for the year
were mainly driven by the additions of the Big Sandy Pipeline and East
Tennessee's Northeastern Tennessee (NET) assets to our portfolio in the third
quarter 2011, offset by lower revenues at Ozark Gas Transmission.

The current quarter increase in net income reflects the October 31 acquisition
of a 38.76 percent interest in Maritimes and Northeast Pipeline, L.L.C. (M&N
US) and higher revenues from the Big Sandy Pipeline. The decrease in cash
available for distribution for the current quarter reflects higher maintenance
capital expenditures compared with the prior year.

"Spectra Energy Partners had a great 2012 – and we're looking forward to an
even better 2013 and beyond," said Julie Dill, president and chief executive
officer. "Our businesses' performance in 2012 enabled us to announce our 21st
consecutive quarterly distribution increase, marking a history of steady,
dependable quarterly distribution increases for our investors."

"As we enter 2013, we are well-positioned for continued growth," Dill said.
"With the on-going evolution of the energy landscape in the United States, we
continue to see great opportunities to grow Spectra Energy Partners by
executing on our strategy – growth through third party acquisitions, organic
expansions and more than $2 billion of expected drop-downs over the next two
years from our general partner. We believe 2013 will be another very good year
for Spectra Energy Partners and our investors."

Results from Operations

Spectra Energy Partners reported operating income of $26.3 million for the
fourth quarter 2012, compared with $24.6 million in the prior year quarter.
Higher revenues from the Big Sandy Pipeline were partially offset by lower
revenues at Ozark Gas Transmission.

Equity Investments

Fourth quarter 2012 equity earnings were $30 million, compared with $25.4
million for the prior year quarter, and SEP's share of fourth quarter 2012
cash available for distribution from its equity investments was $33.5,
compared with $29.5 million for the prior year quarter. These increases for
the quarter were primarily the result of the acquisition of SEP's interest in
M&N US on October 31, 2012.

For the year, 2012 equity earnings totaled $107.6 million compared with $107.3
million for 2011. SEP's share of cash available for distribution from its
equity investments was $125.9 million for 2012, compared with $127 million for
2011, due mainly to expected lower revenues at Market Hub Partners (MHP) and
higher maintenance costs at Gulfstream Natural Gas System, L.L.C.
(Gulfstream).

Interest Expense

Interest expense for the quarter was $8.2 million, compared to $7.8 million
for the prior year quarter. For 2012, interest expense was $31.3 million, up
from $25.0 million in 2011, due to $500 million of senior notes issued in June
2011.

Income Tax Expense

As a master limited partnership, Spectra Energy Partners is not subject to
federal income taxes, but is subject to state income taxes. An income tax
expense of $0.3 million was reported for both the fourth quarter 2012 and the
prior year quarter. The full year 2012 reflects a $1.4 million tax expense,
compared with a $1.1 million tax expense for 2011.

Capital Expenditures and Equity Investments

Spectra Energy Partners spent $14.6 million for expansion and maintenance
capital in the Gas Transportation and Storage segment during the quarter and
$42.3 million for the year. Investments were made in Market Hub Partners of
$1.1 million for the quarter and $14.9 million for the year. Capital
expenditures for expansion projects were for the final completion of projects
placed into commercial service in 2011.

2013 Financial Outlook

Spectra Energy Partners also announced its 2013 financial outlook, which
includes estimated cash available for distribution of $239 million. The
outlook includes a full year's contribution of the M&N US assets but does not
include unapproved organic growth projects, any other acquisitions or
drop-downs.

Additional Information

The company will discuss both its 2012 performance and 2013 financial outlook
in greater detail during the analyst conference call today. The call is
scheduled for 10:00 a.m. CT today, February 5, 2013. The webcast and
conference call can be accessed via the investor relations section of Spectra
Energy Partners, LP's website or by dialing (888) 252-3715 in the United
States or (706) 634-8942 outside the United States. The Conference ID is
86183152.

Please call in 5 to 10 minutes prior to the scheduled start time. A replay of
the conference call will be available after 1:00 p.m. CT, February 5, 2013,
until 5:00 p.m. CT, May 3, 2013, by dialing (855) 859-2056 with Conference ID
86183152. The international replay number is (404) 537-3406 with Conference ID
86183152. A replay and transcript also will be available by accessing the
investor relations section of Spectra Energy Partners' website at
http://www.spectraenergypartners.com.

Reconciliation of Non-GAAP Financial Measures

This press release includes certain financial measures, including cash
available for distribution and adjusted Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA), that are non-GAAP (Generally Accepted
Accounting Principles) financial measures, as defined under the rules of the
Securities and Exchange Commission (SEC).

Spectra Energy Partners defines adjusted EBITDA as net income plus interest
expense, income taxes, and depreciation and amortization, less equity in
earnings of Gulfstream, MHP and M&N US, interest income, and other income and
expenses, net, which primarily includes non-cash AFUDC.

Spectra Energy Partners defines cash available for distribution as adjusted
EBITDA plus cash available for distribution from Gulfstream, MHP and M&N US
and net preliminary project costs, less interest expense, cash paid for income
taxes, maintenance capital expenditures, excluding the impact of reimbursable
projects, and other non-cash items affecting net income. Cash available for
distribution does not reflect changes in working capital balances. Cash
available for distribution for Gulfstream and MHP is defined on a basis
consistent with Spectra Energy Partners. Cash Available for Distribution for
M&N US includes an adjustment for amortizing bond payments.

This press release is accompanied by a reconciliation of these non-GAAP
financial measures to their nearest GAAP financial measures. Management uses
these financial measures because they are accepted financial indicators used
by investors to compare company performance. In addition, management believes
that these measures provide investors an enhanced perspective of the operating
performance of the Partnership's assets and the cash that the business is
generating. Adjusted EBITDA and cash available for distribution are not
presented as alternatives to net income or cash flow from operations. They
should not be considered in isolation or as substitutes for a measure of
performance prepared in accordance with United States GAAP.

Forward-Looking Statements

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 are based on our beliefs and
assumptions. These forward-looking statements are identified by terms and
phrases such as: anticipate, believe, intend, estimate, expect, continue,
should, could, may, plan, project, predict, will, potential, forecast, and
similar expressions. Forward-looking statements involve risks and
uncertainties that may cause actual results to be materially different from
the results predicted. Factors that could cause actual results to differ
materially from those indicated in any forward-looking statement include, but
are not limited to: state and federal 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
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; 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 related
services; potential effects arising from terrorist attacks and any
consequential or other hostilities; changes in environmental, safety and other
laws and regulations; 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 domestic pipeline, storage, gathering and other
infrastructure projects and the effects of competition; the performance of
natural gas transmission, storage and gathering facilities; the extent of
success in connecting natural gas supplies to transmission and gathering
systems and in connecting to expanding gas markets; the effect of accounting
pronouncements issued periodically by accounting standard-setting bodies;
conditions of the capital markets during the periods covered by the
forward-looking statements; and the ability to successfully complete merger,
acquisition or divestiture plans; regulatory or other limitations imposed as a
result of a merger, acquisition or divestiture; and the success of the
business following a merger, acquisition or divestiture. These factors, as
well as additional factors that could affect our forward-looking statements,
are described in our filings that we make with the Securities and Exchange
Commission (SEC), which are available via the SEC's Web site at www.sec.gov.
In light of these risks, uncertainties and assumptions, the events described
in the forward-looking statements might not occur or might occur to a
different extent or at a different time than we have described. All
forward-looking statements in this release are made as of the date hereof and
we undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.

Spectra Energy Partners, LP (NYSE: SEP) is a Houston-based master limited
partnership, formed by Spectra Energy Corp (NYSE: SE), that owns interests in
natural gas transportation and storage assets in the United States, including
more than 3,500 miles of transmission and gathering pipeline and approximately
57 billion cubic feet (Bcf) of natural gas storage. These assets are capable
of transporting 4.5 Bcf of natural gas per day from growing supply areas to
high-demand markets.

Spectra Energy Partners, LP
Quarterly Highlights
December 2012
(Unaudited)
(In millions, except per-unit amounts)
                              Three Months Ended         Year Ended
                              December 31,               December 31,
STATEMENTS OF                 2012          2011(c)      2012       2011(c)
OPERATIONS
                              $        $        $      $    
Operating revenues            59.0                   236.8       205.0
                                            57.9
Operating expenses            32.7          33.3         118.6      116.8
Operating income              26.3          24.6         118.2      88.2
Equity in earnings of
unconsolidated                30.0          25.4         107.6      107.3
affiliates
Other income and              0.2           (0.1)        0.3        2.1
expenses, net
Interest income               0.1           0.2          0.1        0.5
Interest expense              8.2           7.8          31.3       25.0
Earnings before income        48.4          42.3         194.9      173.1
taxes
Income tax expense            0.3           0.3          1.4        1.1
                              $        $        $      $    
Net income                   48.1                   193.5       172.0
                                            42.0
                              $        $        $      $    
Adjusted EBITDA (a)          35.7                   155.5       121.4
                                            32.9
Cash Available for            $        $        $      $    
Distribution (b)             53.7                   229.3       212.4
                                            54.8
Weighted average units
outstanding
 Limited partner            100.1         96.3         97.3       93.1
units
 General partner            2.1           2.0          2.0        1.9
units
Net income per limited        $        $        $      $    
partner unit                  0.40                    1.69       1.63
                                            0.38
Declared cash distribution    $         $        $      $    
per limited partner unit      0.495          0.475   1.950       1.870
CAPITAL AND INVESTMENT
EXPENDITURES
Capital expenditures - Gas    $        $        $      $    
Transportation & Storage      14.6                    42.3       98.4
                                            20.4
Investment
expenditures
Gulfstream - 49.0%            -             -            -          3.8
Market Hub - 50%              1.1           1.8          14.9       13.5
M&N US - 38.76%               -             -            -          -
Total capital and             $        $        $      $    
investment                    15.7                    57.2      115.7
expenditures                                22.2
                                                         December   December
                                                         31,        31,
                                                         2012       2011
DEBT                                                     $       $    
                                                         1,053.4      707.5
(a) Adjusted EBITDA is defined as net income plus interest expense, income
taxes, and depreciation and amortization, less equity in earnings of
Gulfstream, Market Hub and M&N US, interest income, and other income and
expenses, net, which primarily includes non-cash allowance for funds used
during construction (AFUDC).
(b) Cash Available for Distribution is defined as Adjusted EBITDA plus Cash
Available for Distribution from Gulfstream, Market Hub and M&N US and net
preliminary project costs, less interest expense, cash paid for income tax
expense, maintenance capital expenditures, excluding the impact of
reimbursable projects, and other non-cash amounts. Cash Available for
Distribution does not reflect changes in working capital balances. Cash
Available for Distribution for Gulfstream and Market Hub is defined on a basis
consistent with us. Cash Available for Distribution for M&N U.S. includes an
adjustment for amortizing bond payments. These bond payments are paid out in
second and fourth quarter of each year using operating cash flows. Spectra
Energy Partners, Gulfstream and Market Hub do not make similar bond
payments.
(c) Cash Available for Distribution for the three months and year ended
December 31, 2011 has been revised to reflect the refinement to our definition
that was effective January 1, 2012.

Spectra Energy
Partners
Reconciliation of Non-GAAP "Adjusted EBITDA" and "Cash
Available for Distribution"
(Unaudited)
(In millions)              Three Months Ended                Year Ended
                           December 31,                      December 31,
                           2012             2011(a)          2012      2011(a)
Net income                $           $           $      $   
                           48.1             42.0            193.5     172.0
Add:
Interest expense          8.2              7.8              31.3      25.0
Income tax expense         0.3              0.3              1.4       1.1
Depreciation and           9.4              8.3              37.3      33.2
amortization
Less:
Equity in earnings of      16.7             16.3             63.3      64.7
Gulfstream
Equity in earnings of      9.3              9.1              40.3      42.6
Market Hub
Equity in earnings of      4.0              -                4.0       -
M&N US
Interest income            0.1              0.2              0.1       0.5
Other income and           0.2              (0.1)            0.3       2.1
expenses, net
Adjusted EBITDA            35.7             32.9             155.5     121.4
Add:
Cash Available for
Distribution from          21.0             20.0             78.8      81.0
Gulfstream
Cash Available for
Distribution from          10.4             9.5              45.0      46.0
Market Hub
Cash Available for
Distribution from M&N      2.1              -                2.1       -
US
Preliminary project        -                0.1              -         0.1
costs, net
Less:
Interest expense          8.2              7.8              31.3      25.0
Cash paid for income       -                -                -         -
tax expense
Maintenance capital        7.4              1.8              21.3      13.1
expenditures
Other                      (0.1)            (1.9)            (0.5)     (2.0)
Cash Available for         $           $           $      $   
Distribution               53.7             54.8            229.3     212.4
(a) Cash Available for Distribution for the three months and year ended
December 31, 2011 has been revised to reflect the refinement to our definition
that was effective January 1, 2012.

Gulfstream
Reconciliation of Non-GAAP "Adjusted EBITDA" and
"Cash Available for Distribution"
(Unaudited)
(In millions)            Three Months Ended             Year Ended
                         December 31,                   December 31,
                         2012           2011(a)         2012         2011(a)
Net income              $         $         $        $   
                         34.2            33.2          129.3        132.0
Add:
 Interest            17.6           17.5            70.2         69.9
expense
 Depreciation and    8.9            8.9             35.6         35.4
amortization
Less:
 Other income and    -              -               -            -
expenses, net
Adjusted EBITDA -        60.7           59.6            235.1        237.3
100%
Add:
 Preliminary project    0.1            0.4             0.6          1.1
costs, net
Less:
 Interest            17.6           17.5            70.2         69.9
expense
 Maintenance         0.1            1.7             4.6          2.8
capital expenditures
 Other               0.1            -               -            0.3
Cash Available for       $         $         $        $   
Distribution - 100%      43.0            40.8          160.9       165.4
Adjusted EBITDA -        $         $         $        $   
49.0%                   29.7            29.2          115.2       116.2
Cash Available for       $         $         $        $    
Distribution - 49.0%     21.0            20.0           78.8      81.0
(a) Cash Available for Distribution for the three months and year ended
December 31, 2011 has been revised to reflect the refinement to our definition
that was effective January 1, 2012.

Market Hub
Reconciliation of Non-GAAP "Adjusted EBITDA" and "Cash
Available for Distribution"
(Unaudited)
(In millions)                    Three Months Ended         Year Ended
                                 December 31,               December 31,
                                 2012          2011         2012       2011
Net income                       $        $       $      $   
                                 18.7          18.3        80.7       85.4
Add:
 Interest expense            -             0.1          (0.1)      0.1
(benefit)
 Income tax expense          0.1           -            0.3        0.2
 Depreciation and            2.9           2.8          11.4       10.8
amortization
Less:
 Interest income                0.1           -            0.2        0.1
 Other income and            -             -            -          -
expenses, net
Adjusted EBITDA - 100%           21.6          21.2         92.1       96.4
Less:
 Interest benefit            -             -            (0.1)      (0.1)
 Cash paid for income        0.2           0.2          0.2        0.2
tax expense
 Maintenance capital         0.7           2.0          2.1        4.4
expenditures
Cash Available for               $        $       $      $   
Distribution - 100%              20.7          19.0        89.9       91.9
Adjusted EBITDA - 50%            $        $       $      $   
                                 10.8          10.6        46.1       48.2
Cash Available for               $        $       $      $   
Distribution - 50%               10.4           9.5       45.0       46.0

Maritimes & Northeast
Pipeline
Reconciliation of Non-GAAP "Adjusted EBITDA" and "Cash
Available for Distribution"
(Unaudited)
(In millions)                Three Months Ended           Year Ended
                             December 31,                 December 31,
                             2012(a)        2011(a)       2012(a)    2011(a)
Net income                   $         $        $      $    
                             10.2              -      10.2        -
Add:
 Interest expense        6.5            -             6.5        -
 Income tax expense      0.4            -             0.4        -
 Depreciation and        4.3            -             4.3        -
amortization
Less:
 Other income and        0.1            -             0.1        -
expenses, net
Adjusted EBITDA - 100%       21.3           -             21.3       -
Less:
 Interest expense        6.5            -             6.5        -
 Cash paid for
amortizing bond              10.2           -             10.2       -
payments
 Cash paid for           -              -             -          -
income tax expense
 Maintenance             -              -             -          -
capital expenditures
 Other (b)               (0.8)          -             (0.8)      -
Cash Available for           $         $        $      $    
Distribution - 100%           5.4             -       5.4       -
Adjusted EBITDA -            $         $        $      $    
38.76% (a)                    8.3             -       8.3       -
Cash Available for           $         $        $      $    
Distribution - 38.76%         2.1             -       2.1       -
(a)
(a) M&N US results reflect October 31, 2012 acquisition,
and no (0%) ownership preceding that date.
(b) Amortization of
Loss on Reacquired Debt

SOURCE Spectra Energy Partners, LP

Website: http://www.spectraenergypartners.com
Contact: Media & Analysts, Derick Smith, +1-713-627-4963, for Spectra Energy
Partners, LP
 
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