8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 30, 2010

SPECTRA ENERGY PARTNERS, LP

(Exact name of registrant as specified in its charter)

Delaware	001-33556	41-2232463
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
5400 Westheimer Court, Houston, Texas		77056
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code 713-627-5400

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

EXPLANATORY NOTE

On November 30, 2010, Spectra Energy Partners, LP (Spectra Energy Partners) filed a Current Report on Form 8-K (the Initial Report) to report, among other things, the closing of its acquisition of an additional 24.5% interest in Gulfstream Natural Gas, L.L.C. (Gulfstream) from a subsidiary of Spectra Energy Corp (Spectra Energy) for approximately $330 million in aggregate consideration. Spectra Energy Partners is filing this amendment to the Initial Report to provide unaudited Gulfstream interim financial statements and pro forma Spectra Energy Partners condensed consolidated financial information reflecting the acquisition of the additional 24.5% interest in Gulfstream and related financing transactions. The required audited historical financial statements of Gulfstream have been previously reported by Spectra Energy Partners under Item 15 of its Annual Report on Form 10-K (File No. 001-33556) filed with the Securities and Exchange Commission on March 11, 2010, and are therefore not included herein pursuant to General Instruction B.3 of Form 8-K. The required unaudited interim financial statements and unaudited pro forma condensed consolidated financial information are filed as exhibits to this report. No other modifications to the Initial Report are being made by this amendment. This amendment should be read in conjunction with the Initial Report, which provides a more complete description of the acquisition.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired.

Omitted from this filing pursuant to General Instruction B.3 of Form 8-K are the audited historical financial statements of Gulfstream as of December 31, 2009, and for the three years in the period ended December 31, 2009, as previously filed under Item 15 of Spectra Energy Partners’ Annual Report on Form 10-K (File No. 001-33556) filed with the Securities and Exchange Commission on March 11, 2010.

The unaudited financial statements of Gulfstream as of and for the nine months ended September 30, 2010 are filed as Exhibit 99.1 to this Current Report.

(b) Pro Forma Financial Information.

The unaudited pro forma condensed consolidated financial information of Spectra Energy Partners as of September 30, 2010 and related statements of operations for the year ended December 31, 2009 and nine months ended September 30, 2010 are filed as Exhibit 99.2 to this Current Report.

(c) Exhibits.

Exhibit Number	Description
99.1	Unaudited financial statements of Gulfstream.
99.2	Pro forma condensed consolidated financial information of Spectra Energy Partners.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SPECTRA ENERGY PARTNERS, LP
By:	Spectra Energy Partners (DE) GP, LP, its general partner
By:	Spectra Energy Partners GP, LLC, its general partner

/s/ Laura Buss Sayavedra

Laura Buss Sayavedra

Vice President and Chief Financial Officer

Date: December 20, 2010

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EXHIBIT INDEX

Exhibit Number	Description
99.1	Unaudited financial statements of Gulfstream.
99.2	Pro forma condensed consolidated financial information of Spectra Energy Partners.

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EX-99.1

Exhibit 99.1

GULFSTREAM NATURAL GAS SYSTEM, L.L.C.

STATEMENTS OF OPERATIONS

(Unaudited)

	Nine Months  Ended September 30,
	2010		2009
	(In millions)
Operating Revenues
Transportation of natural gas	$	201.4	$	183.8
Other		2.1		1.2
Total operating revenues		203.5		185.0
Operating Expenses
Operating, maintenance and other		14.9		14.6
Depreciation and amortization		26.3		25.8
Property and other taxes		13.6		12.4
Total operating expenses		54.8		52.8
Operating Income		148.7		132.2
Other Income and Expenses		0.6		1.3
Interest Expense		52.4		43.7
Net Income	$	96.9	$	89.8

See Notes to Financial Statements.

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GULFSTREAM NATURAL GAS SYSTEM, L.L.C.

BALANCE SHEETS

(Unaudited)

	September 30, 2010		December 31, 2009
	(In millions)
ASSETS
Current Assets
Cash and cash equivalents	$	94.2	$	63.0
Receivables, net		22.8		22.3
Other		11.4		9.2
Total current assets		128.4		94.5
Property, Plant and Equipment
Cost		2,045.6		2,036.5
Less accumulated depreciation and amortization		238.3		212.0
Net property, plant and equipment		1,807.3		1,824.5
Regulatory Assets and Deferred Debits
Regulatory tax asset		24.2		24.4
Unamortized debt expense		7.5		8.2
Total regulatory assets and deferred debits		31.7		32.6
Total Assets	$	1,967.4	$	1,951.6
LIABILITIES AND MEMBERS’ EQUITY
Current Liabilities
Accounts payable	$	6.0	$	8.5
Taxes accrued		14.1		2.1
Interest accrued		27.6		10.0
Accrued liabilities		1.3		2.2
Fuel tracker liabilities		4.9		3.7
Natural gas imbalance payables		1.5		—
Total current liabilities		55.4		26.5
Long-term Debt		1,148.9		1,148.8
Other Long-term Liabilities		0.4		—
Commitments and Contingencies
Members’ Equity
Members’ equity		752.1		764.7
Accumulated other comprehensive income		10.6		11.6
Total members’ equity		762.7		776.3
Total Liabilities and Members’ Equity	$	1,967.4	$	1,951.6

See Notes to Financial Statements.

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GULFSTREAM NATURAL GAS SYSTEM, L.L.C.

STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30,
	2010			2009
	(In millions)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	96.9		$	89.8
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		27.1			26.5
Allowance for funds used during construction—equity		(0.3	)		(0.5	)
Other		26.5			27.1
Net cash provided by operating activities		150.2			142.9
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(9.7	)		(47.3	)
Net cash used in investing activities		(9.7	)		(47.3	)
CASH FLOWS FROM FINANCING ACTIVITIES
Capital contributions from members		11.0			32.9
Distributions to members		(120.3	)		(396.6	)
Proceeds from the issuance of long-term debt		—			299.0
Net cash used in financing activities		(109.3	)		(64.7	)
Net increase in cash and cash equivalents		31.2			30.9
Cash and cash equivalents at beginning of period		63.0			63.0
Cash and cash equivalents at end of period	$	94.2		$	93.9

See Notes to Financial Statements.

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GULFSTREAM NATURAL GAS SYSTEM, L.L.C.

STATEMENTS OF MEMBERS’ EQUITY AND COMPREHENSIVE INCOME

(Unaudited)

	Spectra Energy Corp			Spectra Energy Partners, LP			The Williams Companies, Inc.			Williams Partners, L.P.			Total
	(In millions)
Balance December 31, 2009	$	198.0		$	190.2		$	388.1		$	—		$	776.3
Net income		24.7			23.7			29.0			19.5			96.9
Reclassification of cash flow hedges into earnings		(0.3	)		(0.2	)		(0.3	)		(0.2	)		(1.0	)
Total comprehensive income														95.9
Capital contributions from members		2.8			2.7			3.3			2.2			11.0
Distributions to members		(30.7	)		(29.5	)		(40.9	)		(19.2	)		(120.3	)
Attributed deferred tax expense		(0.1	)		—			(0.1	)		—			(0.2	)
Balance September 30, 2010	$	194.4		$	186.9		$	379.1		$	2.3		$	762.7
Balance December 31, 2008	$	269.9		$	259.3		$	529.2		$	—		$	1,058.4
Net income		22.9			22.0			44.9			—			89.8
Reclassification of cash flow hedges into earnings		(0.3	)		(0.2	)		(0.5	)		—			(1.0	)
Total comprehensive income														88.8
Capital contributions from members		8.4			8.0			16.5			—			32.9
Distributions to members		(101.1	)		(97.2	)		(198.3	)		—			(396.6	)
Attributed deferred tax expense		—			—			(0.1	)		—			(0.1	)
Balance September 30, 2009	$	199.8		$	191.9		$	391.7		$	—		$	783.4

See Notes to Financial Statements.

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GULFSTREAM NATURAL GAS SYSTEM, L.L.C.

Notes to Financial Statements

1. Summary of Operations and Significant Accounting Policies

Nature of Operations. Gulfstream Natural Gas System, L.L.C. (collectively, “we”, “our”, “us” and “company”) owns an approximate 745-mile interstate natural gas pipeline system and is owned 25.5% by a subsidiary of Spectra Energy Corp (Spectra Energy), 24.5% by Spectra Energy Partners, LP (Spectra Energy Partners) and 50% by affiliates of, or entities controlled by The Williams Companies, Inc. (Williams). We are operated under joint management by Spectra Energy, which provides the business functions, and Williams, which provides the technical functions. We transport natural gas from Mississippi and Alabama, crossing the Gulf of Mexico to markets in central and southern Florida. Our interstate natural gas transmission operations are subject to the rules and regulations of the Federal Energy Regulatory Commission (FERC). We were formed on May 17, 1999 as a Delaware limited liability company.

Basis of Presentation. The financial statements reflect the results of operations, financial position and cash flows of our company. The financial statements do not include any of the assets, liabilities, revenues or expenses of the members. These interim financial statements should be read in conjunction with the financial statements included in Spectra Energy Partners’ Annual Report on Form 10-K for the year ended December 31, 2009, and reflect all normal recurring adjustments that are, in our opinion, necessary to fairly present our results of operations and financial position.

Use of Estimates. To conform with generally accepted accounting principles (GAAP) in the United States, we make estimates and assumptions that affect the amounts reported in the Financial Statements and Notes to Financial Statements. Although these estimates are based on our best available knowledge at the time, actual results could differ.

2. Fair Value Measurements

The following table presents, for each of the fair value hierarchy levels, assets that are measured at fair value on a recurring basis:

		September 30, 2010
Description	Balance Sheet Caption	Total		Level 1		Level 2		Level 3
		(in millions)
Short-term money market securities	Cash and cash equivalents	$	92.9	$	92.9	$	—	$	—
Total Assets		$	92.9	$	92.9	$	—	$	—

		December 31, 2009
Description	Balance Sheet Caption	Total		Level 1		Level 2		Level 3
		(in millions)
Short-term money market securities	Cash and cash equivalents	$	59.2	$	59.2	$	—	$	—
Total Assets		$	59.2	$	59.2	$	—	$	—

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

Financial Instruments. There was no material change in fair value from December 31, 2009 for financial instruments recorded and carried at book value. Judgment is required in interpreting market data to develop the estimates of fair value.

During the 2010 and 2009 periods, there were no adjustments to assets measured at fair value on a nonrecurring basis.

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3. Hedging Activities

Interest Rate (Cash Flow) Hedges. We are exposed to the impact of market fluctuations in interest rates. To protect from increasing interest rates and the resulting higher cost of the debt that was issued in 2005, we locked in existing interest rates by using financial derivatives (swaps) for hedge strategies. The total amount of the debt in 2005 was $850.0 million of which $500.0 million was hedged. The associated interest rate swaps were terminated on October 12, 2005, prior to the issuance of the related debt. These derivatives were initially recorded on the Balance Sheets at their fair value as AOCI. Deferred gains of $10.6 million in AOCI as of September 30, 2010 will continue to be amortized to interest expense over the term of the debt issued (November 2015.) The total amortization for the nine months ended September 30, 2010 and 2009 was $1.0 million in each period.

4. Commitments and Contingencies

Environmental. We are subject to various federal, state and local regulations regarding air and water quality, hazardous and solid waste disposals and other environmental matters. We believe there are no matters outstanding that upon resolution will have a material adverse effect on our results of operations, financial position or cash flows.

Litigation. We are involved in legal, tax and regulatory proceedings in various forums, including matters regarding contracts, performance and other matters, arising in the ordinary course of business, some of which may involve substantial monetary amounts. We have insurance for certain of these losses should they be incurred. We believe that the final disposition of these proceedings will not have a material adverse effect on our results of operations, financial position or cash flows.

5. New Accounting Pronouncement

The following new accounting pronouncement was adopted during the nine months ended September 30, 2010:

In June 2009, the Financial Accounting Standards Board issued an accounting standard which is intended to address (1) the effects on certain consolidation provisions as a result of the elimination of the concept of qualifying special-purpose entities and (2) constituent concerns about the application of certain consolidation provisions including those in which the accounting and disclosures do not always provide timely and useful information about an enterprise’s involvement in a variable interest entity. The adoption of the provisions of this standard on January 1, 2010 did not have any impact on our consolidated results of operations, financial position or cash flows.

6. Subsequent Event

On November 30, 2010, Spectra Energy Partners acquired an additional 24.5% interest in us from a subsidiary of Spectra Energy, for a total ownership percentage of 49%.

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EX-99.2

EXHIBIT 99.2

PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

On November 30, 2010, Spectra Energy Partners, LP (Spectra Energy Partners) acquired an additional 24.5% interest in Gulfstream Natural Gas, LLC (Gulfstream) from a subsidiary of Spectra Energy Corp (Spectra Energy) for approximately $330 million in aggregate consideration. The consideration was comprised of approximately $66.0 million in newly issued units, the assumption of $7.4 million in debt owed to Spectra Energy Capital LLC, a subsidiary of Spectra Energy and $256.6 million in cash, which was funded through borrowings under Spectra Energy Partners’ credit facility. Following the acquisition, Spectra Energy Partners’ own a 49% interest in Gulfstream. The primary asset owned by Gulfstream is the approximately 745-mile Gulfstream Natural Gas System, which extends from Pascagolua, Mississippi and Mobile, Alabama across the Gulf of Mexico and into Florida.

Following the acquisition of Gulfstream, Spectra Energy Partners issued an underwritten public offering of 6,250,000 of its common units representing limited partner interests, which does not reflect any common units that may be sold to the underwriters upon exercise of their option to purchase additional common units. The net proceeds from this offering were approximately $201.4 million, including our general partner’s proportionate capital contribution after deducting the underwriting discount. The proceeds were used to repay the $7.4 million loan assumed in the Gulfstream acquisition. The remaining $189.8 million in net proceeds, (other than proceeds from our general partner’s proportionate capital contribution), was used to purchase qualifying investment grade securities, which were assigned as collateral to secure the new term loan of an approximately equal principal amount. The proceeds of the term loan were used to repay revolving borrowings, which were incurred to fund a portion of the consideration of the Gulfstream acquisition. The approximately $4.2 million in proceeds from our general partner’s proportionate capital contribution were used for general partnership purposes.

The following unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2009 and for the nine months ended September 30, 2010 have been prepared as if the acquisition, debt issuance and equity issuance had occurred on January 1, 2009 and January 1, 2010, respectively. The unaudited pro forma condensed consolidated balance sheet at September 30, 2010 has been prepared as if the acquisition and equity issuance had occurred on September 30, 2010.

The unaudited pro forma condensed consolidated financial information reflects pro forma adjustments that are described in the accompanying notes and are based upon available information and certain assumptions we believe are reasonable but are subject to change. In our opinion, all adjustments that are necessary to present fairly the pro forma information have been made. The following unaudited pro forma condensed consolidated financial information does not purport to represent what Spectra Energy Partners’ results of operations would have been if the acquisition, debt issuance and equity issuance had occurred on January 1, 2009 or January 1, 2010 or what its financial position would have been if the acquisition, debt issuance and equity issuance had occurred on September 30, 2010 and are not necessarily indicative of Spectra Energy Partners’ operations going forward.

The unaudited pro forma condensed consolidated financial information should be read in conjunction with Spectra Energy Partners’ historical financial statements and related notes filed in its 2009 Form 10-K and in its Form 10-Q for the periods ended March 31, 2010, June 30, 2010 and September 30, 2010.

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SPECTRA ENERGY PARTNERS, LP

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

(In millions, except per-unit amounts)

	Year Ended December 31, 2009
	Spectra Energy Partners, LP		Pro Forma Adjustments - Additional 24.5% Interest in Gulfstream		Pro Forma Adjustments - Other			Pro Forma Spectra Energy Partners, LP
Operating Revenues
Transportation of natural gas	$	150.7	$	—	$	—		$	150.7
Storage of natural gas and other		28.2		—		—			28.2
Total operating revenues		178.9		—		—			178.9
Operating Expenses
Operating, maintenance and other		60.3		—		—			60.3
Depreciation and amortization		28.5		—		—			28.5
Property and other taxes		7.3		—		—			7.3
Total operating expenses		96.1		—		—			96.1
Operating Income		82.8		—		—			82.8
Other Income and Expenses
Equity in earnings of unconsolidated affiliates		70.7		30.4		—			101.1
Other income and expenses, net		0.1		—		—			0.1
Total other income and expenses		70.8		30.4		—			101.2
Interest Income		0.2		—		0.4	(a)		0.6
Interest Expense		16.7		—		1.6	(b)		18.3
Earnings Before Income Taxes		137.1		30.4		(1.2	)		166.3
Income Tax Expense		1.2		—		—			1.2
Net Income	$	135.9	$	30.4	$	(1.2	)	$	165.1
Weighted-average limited partner units outstanding—basic and diluted		76.4		n/a		8.2	(c)		84.6
Net income per limited partner unit—basic and diluted	$	1.71		n/a		n/a		$	1.87

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SPECTRA ENERGY PARTNERS, LP

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

(In millions, except per-unit amounts)

	Nine Months Ended September 30, 2010
	Spectra Energy Partners, LP		Pro Forma Adjustments - Additional 24.5% Interest in Gulfstream		Pro Forma Adjustments - Other			Pro Forma Spectra Energy Partners, LP
Operating Revenues
Transportation of natural gas	$	125.5	$	—	$	—		$	125.5
Storage of natural gas and other		21.4		—		—			21.4
Total operating revenues		146.9		—		—			146.9
Operating Expenses
Operating, maintenance and other		49.5		—		—			49.5
Depreciation and amortization		22.2		—		—			22.2
Property and other taxes		6.0		—		—			6.0
Total operating expenses		77.7		—		—			77.7
Operating Income		69.2		—		—			69.2
Other Income and Expenses
Equity in earnings of unconsolidated affiliates		54.0		23.7		—			77.7
Other income and expenses, net		0.4		—		—			0.4
Total other income and expenses		54.4		23.7		—			78.1
Interest Income		0.1		—		0.3	(a)		0.4
Interest Expense		12.2		—		1.0	(b)		13.2
Earnings Before Income Taxes		111.5		23.7		(0.7	)		134.5
Income Tax Expense		0.8		—		—			0.8
Net Income	$	110.7	$	23.7	$	(0.7	)	$	133.7
Weighted-average limited partner units outstanding—basic and diluted		80.3		n/a		8.2	(c)		88.5
Net income per limited partner unit—basic and diluted	$	1.29		n/a		n/a		$	1.42

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SPECTRA ENERGY PARTNERS, LP

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited)

(In millions)

	As of September 30, 2010
	Spectra Energy Partners, LP			Pro Forma Adjustments - Additional 24.5% Interest in Gulfstream (d)			Pro Forma Adjustments  - - Other			Pro Forma Spectra Energy Partners, LP
ASSETS
Current Assets
Cash and cash equivalents	$	10.4		$	—		$	4.2	(h)	$	14.6
Receivables, net		22.6			—			—			22.6
Other		6.8			—			—			6.8
Total current assets		39.8			—			4.2			44.0
Investments and Other Assets
Investments in unconsolidated affiliates		542.9			186.0			—			728.9
Goodwill		267.9			—			—			267.9
Other investments		—			—			189.8	(e)		189.8
Total investments and other assets		810.8			186.0			189.8			1,186.6
Property, Plant and Equipment
Cost		1,144.3			—			—			1,144.3
Less accumulated depreciation and amortization		200.8			—			—			200.8
Net property, plant and equipment		943.5			—			—			943.5
Regulatory Assets and Deferred Debits		16.1			—			—			16.1
Total Assets	$	1,810.2		$	186.0		$	194.0		$	2,190.2
LIABILITIES AND PARTNERS’ CAPITAL
Current Liabilities
Accounts payable	$	12.5		$	—		$	—		$	12.5
Taxes accrued		4.7			—			—			4.7
Interest accrued		2.9			—			—			2.9
Note payable—affiliates		33.0			7.4			(7.4	)(f)		33.0
Other		7.9			—			—			7.9
Total current liabilities		61.0			7.4			(7.4	)		61.0
Long-term Debt		380.0			256.6			—	(g)		636.6
Deferred Credits and Other Liabilities
Deferred income taxes		10.4			—			—			10.4
Other		3.8			—			—			3.8
Total deferred credits and other liabilities		14.2			—			—			14.2
Commitments and Contingencies
Partners’ Capital
Common units		1,326.3			(79.0	)		197.2	(h)		1,444.5
General partner units		29.4			(1.6	)		4.2	(h)		32.0
Accumulated other comprehensive income (loss)		(0.7	)		2.6			—			1.9
Total partners’ capital		1,355.0			(78.0	)		201.4			1,478.4
Total Liabilities and Partners’ Capital	$	1,810.2		$	186.0		$	194.0		$	2,190.2

(a) Reflects the interest income that would have been earned on the qualifying securities described in (e), using an estimated average return based on the current market and assuming these securities would have remained outstanding for the full period.

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(b) Reflects interest expense that would have been incurred on new borrowings of $256.6 million ($68.5 million drawn on the existing revolving credit facility and $188.1 million issued on a new term loan). Both the revolving credit facility and new term loan bear interest based on the one-month London InterBank Offered Rate (LIBOR).

(c) Reflects issuance of 1.9 million units to Spectra Energy on November 30, 2010 as consideration in the Gulfstream acquisition and 6.3 million units issued in connection with the equity offering on December 2, 2010.

For purposes of this calculation, we assumed that (1) distributions would have been paid on all outstanding units based on the historically declared per-unit amount for each quarterly period in 2009 and for the nine months ended September 30, 2010, and (2) the additional limited partner units issued, as described above, have been outstanding since the beginning of each period presented.

	Year Ended December 31, 2009
	Historical		Pro Forma
	(in millions)
Net income	$	135.9	$	165.1
Less:
General partner’s interest in net income—2%		2.7		3.3
General partner’s interest in net income attributable to incentive distribution rights		3.0		3.3
Limited partners’ interest in net income	$	130.2	$	158.5
Weighted-average limited partner units outstanding—basic and diluted		76.4		84.6
Net income per limited partner unit—basic and diluted	$	1.71	$	1.87

	Nine Months Ended September 30, 2010
	Historical		Pro Forma
	(in millions)
Net income	$	110.7	$	133.7
Less:
General partner’s interest in net income—2%		2.2		2.7
General partner’s interest in net income attributable to incentive distribution rights		5.2		5.7
Limited partners’ interest in net income	$	103.3	$	125.3
Weighted-average limited partner units outstanding—basic and diluted		80.3		88.5
Net income per limited partner unit—basic and diluted	$	1.29	$	1.42

(d) Reflects the acquisition of an additional 24.5% interest in Gulfstream.

i. $186.0 million increase in Spectra Energy Partners’ investment in Gulfstream recorded at Spectra Energy’s book value since the transaction represents a transaction between entities under common control;

ii. $7.4 million assumption of loan payable to a subsidiary of Spectra Energy;

iii. $256.6 million of borrowings under Spectra Energy Partners’ existing credit facility;

iv. issuance of 1,938,435 common units and 39,560 general partner units valued at $33.37 per unit, representing an aggregate value of approximately $66.0 million. The per unit value represents 97% of the volume weighted-average price of our common units calculated for the 20-business day period ended on November 23, 2010;

v. a reduction in partners’ capital resulting from the excess of the Gulfstream purchase price over the investment recorded in Gulfstream, and

vi. the proportional share of Gulfstream’s historical accumulated other comprehensive income of $2.6 million.

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(e) Reflects the purchase of $189.8 million of qualifying investment grade securities using a portion of the proceeds from the equity offering. These securities are pledged as collateral for the borrowings under the new term loan as described in (g).

(f) Reflects the repayment of the $7.4 million loan with a subsidiary of Spectra Energy that was assumed as a portion of the consideration for the Gulfstream acquisition.

(g) Reflects proceeds from a new term loan of $188.1 million that was used to pay down the existing revolving credit facility, resulting in no net change in long-term debt. The new term loan is secured by investment grade securities as described in (e) and matures in July 2012.

(h) Reflects $201.4 million of net proceeds from the issuance of 6.3 million common units and 0.1 million of general partner units on December 2, 2010. The proceeds from the issuance of common units was used to repay the $7.4 million loan with a subsidiary of Spectra Energy as described in (f) and the remaining $189.8 million was used to purchase qualifying investment grade securities as described in (e). The proceeds of $4.2 million from the general partner units will be used for general partnership purposes.

As of September 30, 2010, no material transaction costs had been incurred for this acquisition. Spectra Energy Partners expects to incur approximately $0.7 million of costs associated with the acquisition of an additional 24.5% interest in Gulfstream over the twelve months subsequent to September 30, 2010.

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