ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 41-2232463 | |
(State or other jurisdiction of incorporation) | (IRS Employer Identification No.) |
Page | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 6. | ||
• | 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. |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Operating Revenues | |||||||
Transportation of natural gas | $ | 484 | $ | 464 | |||
Transportation of crude oil | 86 | 84 | |||||
Storage of natural gas and other | 54 | 58 | |||||
Total operating revenues | 624 | 606 | |||||
Operating Expenses | |||||||
Operating, maintenance and other | 179 | 181 | |||||
Depreciation and amortization | 77 | 73 | |||||
Property and other taxes | 44 | 41 | |||||
Total operating expenses | 300 | 295 | |||||
Operating Income | 324 | 311 | |||||
Other Income and Expenses | |||||||
Earnings from equity investments | 27 | 40 | |||||
Other income and expenses, net | 20 | 9 | |||||
Total other income and expenses | 47 | 49 | |||||
Interest Expense | 56 | 57 | |||||
Earnings Before Income Taxes | 315 | 303 | |||||
Income Tax Expense | 4 | 2 | |||||
Net Income | 311 | 301 | |||||
Net Income—Noncontrolling Interests | 13 | 8 | |||||
Net Income—Controlling Interests | $ | 298 | $ | 293 | |||
Calculation of Limited Partners’ Interest in Net Income: | |||||||
Net income—Controlling Interests | $ | 298 | $ | 293 | |||
Less: General partner’s interest in net income | 69 | 57 | |||||
Limited partners’ interest in net income | $ | 229 | $ | 236 | |||
Weighted-average limited partner units outstanding—basic and diluted | 285 | 295 | |||||
Net income per limited partner unit—basic and diluted | $ | 0.80 | $ | 0.80 | |||
Distributions paid per limited partner unit | $ | 0.63875 | $ | 0.58875 |
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
Net Income | $ | 311 | $ | 301 | ||||
Other comprehensive income (loss): | ||||||||
Foreign currency translation adjustments | 11 | (15 | ) | |||||
Total other comprehensive income (loss) | 11 | (15 | ) | |||||
Total Comprehensive Income | 322 | 286 | ||||||
Less: Comprehensive Income—Noncontrolling Interests | 13 | 8 | ||||||
Comprehensive Income—Controlling Interests | $ | 309 | $ | 278 |
March 31, 2016 | December 31, 2015 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 214 | $ | 168 | ||||
Receivables, net | 264 | 272 | ||||||
Inventory | 40 | 37 | ||||||
Fuel tracker | 44 | 41 | ||||||
Other | 23 | 26 | ||||||
Total current assets | 585 | 544 | ||||||
Investments and Other Assets | ||||||||
Investments in and loans to unconsolidated affiliates | 894 | 904 | ||||||
Goodwill | 3,236 | 3,232 | ||||||
Other | 101 | 44 | ||||||
Total investments and other assets | 4,231 | 4,180 | ||||||
Property, Plant and Equipment | ||||||||
Cost | 17,976 | 17,491 | ||||||
Less accumulated depreciation and amortization | 3,719 | 3,654 | ||||||
Net property, plant and equipment | 14,257 | 13,837 | ||||||
Regulatory Assets and Deferred Debits | 309 | 290 | ||||||
Total Assets | $ | 19,382 | $ | 18,851 |
March 31, 2016 | December 31, 2015 | |||||||
LIABILITIES AND EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 286 | $ | 322 | ||||
Commercial paper | 806 | 476 | ||||||
Taxes accrued | 56 | 60 | ||||||
Interest accrued | 36 | 72 | ||||||
Current maturities of long-term debt | 283 | 283 | ||||||
Other | 252 | 258 | ||||||
Total current liabilities | 1,719 | 1,471 | ||||||
Long-term Debt | 5,862 | 5,845 | ||||||
Deferred Credits and Other Liabilities | ||||||||
Deferred income taxes | 39 | 38 | ||||||
Regulatory and other | 155 | 151 | ||||||
Total deferred credits and other liabilities | 194 | 189 | ||||||
Commitments and Contingencies | ||||||||
Equity | ||||||||
Partners’ Capital | ||||||||
Common units (286.9 million and 285.1 million units issued and outstanding at March 31, 2016 and December 31, 2015, respectively) | 10,654 | 10,527 | ||||||
General partner units (5.9 million and 5.8 million units issued and outstanding at March 31, 2016 and December 31, 2015, respectively) | 356 | 336 | ||||||
Accumulated other comprehensive loss | (39 | ) | (50 | ) | ||||
Total partners’ capital | 10,971 | 10,813 | ||||||
Noncontrolling interests | 636 | 533 | ||||||
Total equity | 11,607 | 11,346 | ||||||
Total Liabilities and Equity | $ | 19,382 | $ | 18,851 |
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net income | $ | 311 | $ | 301 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 79 | 75 | ||||||
Deferred income tax expense | 1 | 1 | ||||||
Earnings from equity investments | (27 | ) | (40 | ) | ||||
Distributions from equity investments | 26 | 38 | ||||||
Other | (93 | ) | (94 | ) | ||||
Net cash provided by operating activities | 297 | 281 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Capital expenditures | (468 | ) | (240 | ) | ||||
Investments in and loans to unconsolidated affiliates | (27 | ) | (15 | ) | ||||
Purchase of intangible | (48 | ) | — | |||||
Distributions from equity investments | 39 | 18 | ||||||
Purchases of held-to-maturity securities | (11 | ) | (10 | ) | ||||
Proceeds from sales and maturities of held-to-maturity securities | 3 | 3 | ||||||
Purchases of available-for-sale securities | (161 | ) | — | |||||
Proceeds from sales and maturities of available-for-sale securities | 163 | — | ||||||
Other changes in restricted funds | 4 | — | ||||||
Other | (2 | ) | — | |||||
Net cash used in investing activities | (508 | ) | (244 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Proceeds from the issuance of long-term debt | — | 994 | ||||||
Net increase (decrease) in commercial paper | 330 | (786 | ) | |||||
Distributions to noncontrolling interests | (7 | ) | (7 | ) | ||||
Contributions from noncontrolling interests | 95 | 58 | ||||||
Proceeds from the issuances of units | 82 | 40 | ||||||
Distributions to partners | (243 | ) | (226 | ) | ||||
Other | — | (8 | ) | |||||
Net cash provided by financing activities | 257 | 65 | ||||||
Net increase in cash and cash equivalents | 46 | 102 | ||||||
Cash and cash equivalents at beginning of period | 168 | 140 | ||||||
Cash and cash equivalents at end of period | $ | 214 | $ | 242 | ||||
Supplemental Disclosures | ||||||||
Property, plant and equipment non-cash accruals | $ | 142 | $ | 67 |
Partners’ Capital | Noncontrolling Interests | Total | |||||||||||||||||
Common | General Partner | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||
December 31, 2015 | $ | 10,527 | $ | 336 | $ | (50 | ) | $ | 533 | $ | 11,346 | ||||||||
Net income | 229 | 69 | — | 13 | 311 | ||||||||||||||
Other comprehensive income | — | — | 11 | — | 11 | ||||||||||||||
Attributed deferred tax benefit | — | 10 | — | 2 | 12 | ||||||||||||||
Issuances of units | 80 | 2 | — | — | 82 | ||||||||||||||
Distributions to partners | (182 | ) | (61 | ) | — | — | (243 | ) | |||||||||||
Contributions from noncontrolling interests | — | — | — | 95 | 95 | ||||||||||||||
Distributions to noncontrolling interests | — | — | — | (7 | ) | (7 | ) | ||||||||||||
March 31, 2016 | $ | 10,654 | $ | 356 | $ | (39 | ) | $ | 636 | $ | 11,607 | ||||||||
December 31, 2014 | $ | 10,474 | $ | 284 | $ | (20 | ) | $ | 268 | $ | 11,006 | ||||||||
Net income | 236 | 57 | — | 8 | 301 | ||||||||||||||
Other comprehensive loss | — | — | (15 | ) | — | (15 | ) | ||||||||||||
Attributed deferred tax benefit | — | 7 | — | — | 7 | ||||||||||||||
Issuances of units | 39 | 1 | — | — | 40 | ||||||||||||||
Distributions to partners | (173 | ) | (53 | ) | — | — | (226 | ) | |||||||||||
Contributions from noncontrolling interests | — | — | — | 58 | 58 | ||||||||||||||
Distributions to noncontrolling interests | — | — | — | (7 | ) | (7 | ) | ||||||||||||
March 31, 2015 | $ | 10,576 | $ | 296 | $ | (35 | ) | $ | 327 | $ | 11,164 |
Condensed Consolidated Statements of Operations | Total Operating Revenues | Depreciation and Amortization | Segment EBITDA/Consolidated Earnings Before Income Taxes | ||||||||
(in millions) | |||||||||||
Three Months Ended March 31, 2016 | |||||||||||
U.S. Transmission | $ | 538 | $ | 70 | $ | 411 | |||||
Liquids | 86 | 7 | 56 | ||||||||
Total reportable segments | 624 | 77 | 467 | ||||||||
Other | — | — | (20 | ) | |||||||
Depreciation and amortization | — | — | 77 | ||||||||
Interest expense | — | — | 56 | ||||||||
Interest income and other | — | — | 1 | ||||||||
Total consolidated | $ | 624 | $ | 77 | $ | 315 | |||||
Three Months Ended March 31, 2015 | |||||||||||
U.S. Transmission | $ | 522 | $ | 65 | $ | 389 | |||||
Liquids | 84 | 8 | 64 | ||||||||
Total reportable segments | 606 | 73 | 453 | ||||||||
Other | — | — | (17 | ) | |||||||
Depreciation and amortization | — | — | 73 | ||||||||
Interest expense | — | — | 57 | ||||||||
Interest income and other | — | — | (3 | ) | |||||||
Total consolidated | $ | 606 | $ | 73 | $ | 303 |
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
(in millions, except per unit amounts) | ||||||||
Net income—controlling interests | $ | 298 | $ | 293 | ||||
Less: | ||||||||
General partner’s interest in net income—2% | 6 | 6 | ||||||
General partner’s interest in net income attributable to incentive distribution rights | 63 | 51 | ||||||
Limited partners’ interest in net income | $ | 229 | $ | 236 | ||||
Weighted average limited partner units outstanding—basic and diluted | 285 | 295 | ||||||
Net income per limited partner unit—basic and diluted | $ | 0.80 | $ | 0.80 |
• | 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. |
Total Quarterly Distribution | Marginal Percentage Interest in Distributions | |||||||
Target Per-Unit Amount | Common Unitholders | General Partner | ||||||
Minimum Quarterly Distribution | $0.30 | 98 | % | 2 | % | |||
First Target Distribution | 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 | % |
Condensed Consolidated Balance Sheets | March 31, 2016 | December 31, 2015 | |||||
(in millions) | |||||||
Assets | |||||||
Current assets | $ | 156 | $ | 118 | |||
Net property, plant and equipment | 960 | 773 | |||||
Regulatory assets and deferred debits | 40 | 25 | |||||
Total Assets | $ | 1,156 | $ | 916 | |||
Liabilities and Equity | |||||||
Current liabilities | $ | 80 | $ | 84 | |||
Equity | 1,076 | 832 | |||||
Total Liabilities and Equity | $ | 1,156 | $ | 916 |
Expiration Date | Total Credit Facility Capacity | Commercial Paper Outstanding at March 31, 2016 | Available Credit Facility Capacity | |||||||||||
(in millions) | ||||||||||||||
Spectra Energy Partners, LP | 2019 | $ | 2,000 | $ | 806 | $ | 1,194 |
Description | Condensed Consolidated Balance Sheet Caption | March 31, 2016 | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
(in millions) | |||||||||||||||||
Corporate debt securities | Cash and cash equivalents | $ | 155 | $ | — | $ | 155 | $ | — | ||||||||
Corporate debt securities | Investments and other assets — other | 9 | — | 9 | — | ||||||||||||
Interest rate swaps | Investments and other assets — other | 31 | — | 31 | — | ||||||||||||
Total Assets | $ | 195 | $ | — | $ | 195 | $ | — |
Description | Condensed Consolidated Balance Sheet Caption | December 31, 2015 | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
(in millions) | |||||||||||||||||
Corporate debt securities | Cash and cash equivalents | $ | 112 | $ | — | $ | 112 | $ | — | ||||||||
Corporate debt securities | Investments and other assets — other | 11 | — | 11 | — | ||||||||||||
Interest rate swaps | Investments and other assets — other | 14 | — | 14 | — | ||||||||||||
Total Assets | $ | 137 | $ | — | $ | 137 | $ | — |
March 31, 2016 | December 31, 2015 | |||||||||||||||
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) | 6,152 | 6,241 | 6,152 | 5,906 |
(a) | Included within Investments in and Loans to Unconsolidated Affiliates. |
(b) | Excludes commercial paper, unamortized items and fair value hedge carrying value adjustments. |
March 31, 2016 | December 31, 2015 | ||||||||||||||||||||||
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 | $ | 31 | $ | — | $ | 31 | $ | 14 | $ | — | $ | 14 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
(in millions) | |||||||
Operating revenues | $ | 624 | $ | 606 | |||
Operating expenses | 300 | 295 | |||||
Operating income | 324 | 311 | |||||
Earnings from equity investments | 27 | 40 | |||||
Other income and expenses, net | 20 | 9 | |||||
Interest expense | 56 | 57 | |||||
Earnings before income taxes | 315 | 303 | |||||
Income tax expense | 4 | 2 | |||||
Net income | 311 | 301 | |||||
Net income—noncontrolling interests | 13 | 8 | |||||
Net income—controlling interests | $ | 298 | $ | 293 |
• | revenues from expansion projects, primarily on Texas Eastern, partially offset by |
• | lower natural gas transportation revenues mainly from interruptible transportation and other revenues on Texas Eastern, firm transportation on Algonquin Gas Transmission, L.L.C. (Algonquin), and interruptible transportation on Maritimes and Northeast Pipeline, L.L.C. (M&N U.S.), and |
• | lower recoveries of electric power and other costs passed through to gas transmission customers. |
• | higher costs related to expansion projects, mostly electric power costs and ad valorem taxes, partially offset by |
• | a prior year non-cash impairment charge on Ozark Gas Gathering, L.L.C. (Ozark Gas Gathering), and |
• | lower electric power and other costs passed through to gas transmission customers. |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
(in millions) | |||||||
U.S. Transmission | $ | 411 | $ | 389 | |||
Liquids | 56 | 64 | |||||
Total reportable segment EBITDA | 467 | 453 | |||||
Other | (20 | ) | (17 | ) | |||
Total reportable segment and other EBITDA | 447 | 436 | |||||
Depreciation and amortization | 77 | 73 | |||||
Interest expense | 56 | 57 | |||||
Other income | 1 | (3 | ) | ||||
Earnings before income taxes | $ | 315 | $ | 303 |
Three Months Ended March 31, | |||||||||||
2016 | 2015 | Increase (Decrease) | |||||||||
(in millions) | |||||||||||
Operating revenues | $ | 538 | $ | 522 | $ | 16 | |||||
Operating expenses | |||||||||||
Operating, maintenance and other | 172 | 171 | 1 | ||||||||
Other income and expenses | 45 | 38 | 7 | ||||||||
EBITDA | $ | 411 | $ | 389 | $ | 22 | |||||
• | a $28 million increase due to expansion projects, primarily on Texas Eastern, partially offset by |
• | a $7 million decrease in natural gas transportation revenues mainly from interruptible transportation and other revenues on Texas Eastern, firm transportation on Algonquin, and interruptible transportation on M&N U.S., and |
• | a $4 million decrease in recoveries of electric power and other costs passed through to gas transmission customers. |
• | a $15 million increase in expansion project costs, mostly electric power costs and ad valorem taxes, partially offset by |
• | a $9 million decrease due to a prior year non-cash impairment charge on Ozark Gas Gathering, and |
• | a $4 million decrease in electric power and other costs passed through to customers. |
Three Months Ended March 31, | |||||||||||
2016 | 2015 | Increase (Decrease) | |||||||||
(in millions) | |||||||||||
Operating revenues | $ | 86 | $ | 84 | $ | 2 | |||||
Operating expenses | |||||||||||
Operating, maintenance and other | 31 | 34 | (3 | ) | |||||||
Other income and expenses | 1 | 14 | (13 | ) | |||||||
EBITDA | $ | 56 | $ | 64 | $ | (8 | ) | ||||
Express pipeline revenue receipts, MBbl/d (a) | 233 | 246 | (13 | ) | |||||||
Platte PADD II deliveries, MBbl/d | 124 | 169 | (45 | ) |
Three Months Ended March 31, | |||||||||||
2016 | 2015 | Increase (Decrease) | |||||||||
(in millions) | |||||||||||
Operating expenses | $ | 20 | $ | 17 | $ | 3 | |||||
EBITDA | $ | (20 | ) | $ | (17 | ) | $ | (3 | ) |
• | 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. |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
(in millions) | |||||||
Net income | $ | 311 | $ | 301 | |||
Add: | |||||||
Interest expense | 56 | 57 | |||||
Income tax expense | 4 | 2 | |||||
Depreciation and amortization | 77 | 73 | |||||
Foreign currency (gain) loss | (1 | ) | 3 | ||||
EBITDA | 447 | 436 | |||||
Add: | |||||||
Earnings from equity investments | (27 | ) | (40 | ) | |||
Distributions from equity investments (a) | 65 | 54 | |||||
Non-cash impairment on Ozark Gas Gathering | — | 9 | |||||
Other | 2 | 3 | |||||
Less: | |||||||
Interest expense | 56 | 57 | |||||
Equity AFUDC | 17 | 11 | |||||
Net cash paid for income taxes | 1 | 5 | |||||
Distributions to noncontrolling interests | 7 | 7 | |||||
Maintenance capital expenditures | 35 | 28 | |||||
Distributable Cash Flow | $ | 371 | $ | 354 |
(a) | Excludes $2 million of distributions from equity investments for the three months ended March 31, 2015. |
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
(in millions) | ||||||||
Net cash provided by (used in): | ||||||||
Operating activities | $ | 297 | $ | 281 | ||||
Investing activities | (508 | ) | (244 | ) | ||||
Financing activities | 257 | 65 | ||||||
Net increase in cash and cash equivalents | 46 | 102 | ||||||
Cash and cash equivalents at beginning of the period | 168 | 140 | ||||||
Cash and cash equivalents at end of the period | $ | 214 | $ | 242 |
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
(in millions) | ||||||||
U.S. Transmission | $ | 479 | $ | 237 | ||||
Liquids | 16 | 18 | ||||||
Total consolidated | $ | 495 | $ | 255 |
• | $330 million of net issuances of commercial paper in 2016, compared to $786 million of net redemptions in 2015, |
• | a $42 million increase in proceeds from issuances of units, and |
• | a $37 million increase in contributions from noncontrolling interests, partially offset by |
• | $994 million of net issuances of long-term debt in 2015, and |
• | a $17 million increase in distributions to partners. |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk. |
Item 4. | Controls and Procedures. |
Item 1. | Legal Proceedings. |
Item 1A. | Risk Factors. |
Item 6. | Exhibits. |
• | 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. |
(a) Exhibits | ||
Exhibit Number | ||
*10.1 | Third Amendment to Second Amended and Restated Limited Liability Company Agreement of Gulfstream Natural Gas System, L.L.C. | |
*31.1 | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
*31.2 | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
*32.1 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
*32.2 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
*101.INS | XBRL Instance Document. | |
*101.SCH | XBRL Taxonomy Extension Schema. | |
*101.CAL | XBRL Taxonomy Extension Calculation Linkbase. | |
*101.DEF | XBRL Taxonomy Extension Definition Linkbase. | |
*101.LAB | XBRL Taxonomy Extension Label Linkbase. | |
*101.PRE | XBRL Taxonomy Extension Presentation Linkbase. |
* | Filed herewith |
SPECTRA ENERGY PARTNERS, LP | ||||
By: | Spectra Energy Partners (DE) GP, LP, its general partner | |||
By: | Spectra Energy Partners GP, LLC, its general partner | |||
Date: May 5, 2016 | /S/ GREGORY L. EBEL | |||
Gregory L. Ebel President and Chief Executive Officer | ||||
Date: May 5, 2016 | /S/ J. PATRICK REDDY | |||
J. Patrick Reddy Chief Financial Officer |
1) | I have reviewed this quarterly report on Form 10-Q of Spectra Energy Partners, LP; |
2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4) | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5) | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 5, 2016 | /s/ Gregory L. Ebel | ||
Gregory L. Ebel President and Chief Executive Officer Spectra Energy Partners GP, LLC General Partner of Spectra Energy Partners (DE) GP, LP General Partner of Spectra Energy Partners, LP |
1) | I have reviewed this quarterly report on Form 10-Q of Spectra Energy Partners, LP; |
2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4) | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5) | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: May 5, 2016 | /s/ J. Patrick Reddy | ||
J. Patrick Reddy Chief Financial Officer Spectra Energy Partners GP, LLC General Partner of Spectra Energy Partners (DE) GP, LP General Partner of Spectra Energy Partners, LP |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Spectra Energy Partners, LP. |
Date: May 5, 2016 | /s/ Gregory L. Ebel | ||
Gregory L. Ebel President and Chief Executive Officer Spectra Energy Partners GP, LLC General Partner of Spectra Energy Partners (DE) GP, LP General Partner of Spectra Energy Partners, LP |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Spectra Energy Partners, LP. |
Date: May 5, 2016 | /s/ J. Patrick Reddy | ||
J. Patrick Reddy Chief Financial Officer Spectra Energy Partners GP, LLC General Partner of Spectra Energy Partners (DE) GP, LP General Partner of Spectra Energy Partners, LP |
Document and Entity Information |
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Mar. 31, 2016
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Document and Entity Information [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Mar. 31, 2016 |
Document Fiscal Year Focus | 2016 |
Document Fiscal Period Focus | Q1 |
Trading Symbol | SEP |
Entity Registrant Name | SPECTRA ENERGY PARTNERS, LP |
Entity Central Index Key | 0001394074 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 286,869,925 |
Entity General Partner, Units Outstanding | 5,854,488 |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2016 |
Mar. 31, 2015 |
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Net Income | $ 311 | $ 301 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 11 | (15) |
Total other comprehensive income (loss) | 11 | (15) |
Total Comprehensive Income | 322 | 286 |
Less: Comprehensive Income—Noncontrolling Interests | 13 | 8 |
Comprehensive Income—Controlling Interests | $ 309 | $ 278 |
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - shares shares in Millions |
Mar. 31, 2016 |
Dec. 31, 2015 |
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Common units, units issued | 286.9 | 285.1 |
Common units, units outstanding | 286.9 | 285.1 |
General partner units, units issued | 5.9 | 5.8 |
General partner units, units outstanding | 5.9 | 5.8 |
General |
3 Months Ended |
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Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | 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. As of March 31, 2016, Spectra Energy Corp (Spectra Energy) and its subsidiaries collectively owned 77% of us and the remaining 23% was publicly owned. Basis of Presentation. The accompanying Condensed Consolidated Financial Statements include our accounts and the accounts of our majority-owned subsidiaries, after eliminating intercompany transactions and balances. These interim financial statements should be read in conjunction with the consolidated financial statements included in our Annual Report on Form 10-K, for the year ended December 31, 2015, and reflect all normal recurring adjustments that are, in our opinion, necessary to fairly present our results of operations and financial position. Amounts reported in the Condensed Consolidated Statements of Operations are not necessarily indicative of amounts expected for the respective annual periods. Spectra Energy and its affiliates are solely responsible for providing the employees and other personnel necessary to conduct our operations. Our costs of doing business have been reflected in our financial accounting records for the periods presented. These costs include direct charges and allocations from Spectra Energy and its affiliates for business services, such as payroll, accounts payable and facilities management; corporate services, such as finance and accounting, legal, human resources, investor relations, public and regulatory policy, and senior executives; and pension and other post-retirement benefit costs. 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 Condensed Consolidated Financial Statements and Notes to Condensed Consolidated Financial Statements. Although these estimates are based on our best available knowledge at the time, actual results could differ. |
Business Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segments | Business Segments 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. Our chief operating decision maker regularly reviews financial information about both segments in deciding how to allocate resources and evaluate performance. There is no aggregation of segments within our reportable business segments. The U.S. Transmission segment provides interstate transmission, storage and gathering of natural gas. Substantially all of our operations are subject to the Federal Energy Regulatory Commission (FERC) and the Department of Transportation’s (DOT’s) rules and regulations. Our investments in Gulfstream Natural Gas System, LLC (Gulfstream), Southeast Supply Header, LLC (SESH) and Steckman Ridge, LP are included in U.S. Transmission. The Liquids segment provides transportation of crude oil. The Express-Platte pipeline system (Express-Platte) is a crude oil pipeline system that connects Canadian and U.S. producers to refineries in the U.S. Rocky Mountain and Midwest regions. These operations are primarily subject to the rules and regulations of the FERC and the National Energy Board (NEB). We held direct one-third ownership interests in DCP Sand Hills Pipeline, LLC (Sand Hills) and DCP Southern Hills Pipeline, LLC (Southern Hills) until October 30, 2015. Our reportable segments offer different products and services and are managed separately as business units. 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. 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. Business Segment Data
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Net Income Per Limited Partner Unit and Cash Distributions |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Limited Partner Unit and Cash Distributions | Net Income Per Limited Partner Unit and Cash Distributions The following table presents our net income per limited partner unit calculations:
Our partnership agreement requires that, within 60 days after the end of each quarter, we distribute all of our Available Cash, as defined, 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:
Incentive Distribution Rights. The general partner holds incentive distribution rights beyond the first target distribution in accordance with the partnership agreement as follows:
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 $0.65125 per limited partner unit was declared on May 4, 2016 and is payable on May 27, 2016 to unitholders of record at the close of business on May 16, 2016. There is a reduction in the aggregate quarterly distributions, if any, to Spectra Energy, (as holder of incentive distribution rights), by $4 million per quarter for a period of 12 consecutive quarters ending on September 30, 2018 as a result of the sale of our interests in Sand Hills and Southern Hills to Spectra Energy. |
Transaction with Affiliate |
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Mar. 31, 2016 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
Transaction with Affiliate | Transaction with Affiliate At March 31, 2016 and December 31, 2015, our Condensed Consolidated Balance Sheets include $148 million in Current Liabilities — Other related to the debt proceeds distributed to us by Gulfstream, which we will contribute back to Gulfstream when its current debt matures in the second quarter of 2016. |
Variable Interest Entities |
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Variable Interest Entity Disclosure [Text Block] | Variable Interest Entities Sabal Trail. As of March 31, 2016, we owned a 59.5% interest in Sabal Trail Transmission, LLC (Sabal Trail), a joint venture that is constructing a natural gas pipeline to transport natural gas to Florida. Sabal Trail is a variable interest entity (VIE) due to insufficient equity at risk to finance its activities. We determined that we are the primary beneficiary because we direct the activities of Sabal Trail that most significantly impact its economic performance and we consolidate Sabal Trail in our financial statements. The current estimate of the total remaining construction cost is approximately $1.9 billion. The following summarizes assets and liabilities for Sabal Trail as of March 31, 2016 and December 31, 2015, respectively:
Nexus. We own a 50% interest in Nexus Gas Transmission, LLC (Nexus), a joint venture that is constructing a natural gas pipeline from Ohio to Michigan and continuing on to Ontario, Canada. 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 $117 million and $90 million as of March 31, 2016 and December 31, 2015, respectively, classified as Investments in and Loans to Unconsolidated Affiliates on our Condensed Consolidated Balance Sheets. |
Intangible Asset |
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Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Disclosure [Text Block] | Intangible Asset During the first quarter of 2016 we entered into a project coordination agreement (PCA) with NextEra Energy, Inc. (NextEra), Duke Energy Corporation and Williams Partners L.P. In accordance with the agreement, payments will be made, based on our proportional ownership interest in the Sabal Trail project, as certain milestones of the project are met. As of March 31, 2016 the first milestone was achieved and paid consisting of $48 million. This PCA is an intangible asset and is classified as Investments and Other Assets - Other on our Condensed Consolidated Balance Sheet. The intangible asset will be amortized over a period of 25 years beginning at the time of in-service of Sabal Trail, which is expected to occur during the first half of 2017. |
Marketable Securities and Restricted Funds |
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Investments, Debt and Equity Securities [Abstract] | |
Marketable Securities and Restricted Funds | Marketable Securities and Restricted Funds We routinely invest excess cash and various restricted balances in securities such as commercial paper, corporate debt securities, and money market funds in the United States. 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, 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 proceeds from sales and maturities of securities in the Condensed Consolidated Statements of Cash Flows. AFS Securities. We had $9 million and $11 million of AFS securities classified as Investments and Other Assets - Other on the Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015, respectively. These investments are restricted funds related to certain construction projects. There were no material gross unrecognized holding gains or losses associated with investments in AFS securities at March 31, 2016 or December 31, 2015. HTM Securities. All of our HTM securities are restricted funds. We had $11 million and $3 million of money market securities classified as Current Assets - Other on the Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015, respectively. These securities are restricted pursuant to certain Express-Platte debt agreements. At March 31, 2016, 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 March 31, 2016 or December 31, 2015. Other Restricted Funds. In addition to the AFS and HTM securities that were restricted funds as described above, we had other restricted funds totaling $10 million and $14 million classified as Investments and Other Assets - Other on the Condensed Consolidated Balance Sheets at March 31, 2016 and December 31, 2015, respectively. As of March 31, 2016, included in this balance are $1 million related to funds held and collected from customers for Canadian pipeline abandonment in accordance with the NEB's regulatory requirements and $9 million are related to certain construction projects. Changes in restricted balances are presented within Cash Flows from Investing Activities on our Condensed Consolidated Statements of Cash Flows. |
Debt and Credit Facility |
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Debt and Credit Facility | Debt and Credit Facility Available Credit Facility and Restricted Debt Covenants
The issuances of commercial paper, letters of credit and revolving borrowings reduce the amount available under the credit facility. As of March 31, 2016, there were no letters of credit issued or revolving borrowings outstanding under the credit facility. Our credit agreements contain various covenants, including the maintenance of a consolidated leverage ratio, as defined in the agreements. Failure to meet those covenants beyond applicable grace periods could result in accelerated due dates and/or termination of the agreements. As of March 31, 2016, we were in compliance with those covenants. 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. As noted above, 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 March 31, 2016, this ratio was 3.7 to 1. |
Fair Value Measurements |
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Fair Value Measurements | Fair Value Measurements The following presents, for each of the fair value hierarchy levels, assets that are measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015.
Level 1 Level 1 valuations represent quoted unadjusted prices for identical instruments in active markets. 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.
________
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 - affiliates 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 three months ended March 31, 2016 and 2015, there were no material adjustments to assets and liabilities measured at fair value on a nonrecurring basis. |
Risk Management and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risk Management and Hedging Activities | 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 Express-Platte (Express Canada). 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. For interest rate derivative instruments that 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. There were no significant amounts of gains or losses recognized in net income during the three months ended March 31, 2016. At March 31, 2016, we had “pay floating — receive fixed” interest rate swaps outstanding with a total notional amount of $900 million to hedge against changes in the fair value of our fixed-rate debt 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 fixed-rate debt securities into variable-rate interest payments in order to achieve our desired mix of fixed and variable-rate debt. Information about our interest rate swaps that had netting or rights of offset arrangements are as follows:
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Commitments and Contingencies |
3 Months Ended |
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Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Environmental We are subject to various federal, state and local laws and regulations regarding air and water quality, hazardous and solid waste disposal and other environmental matters. These laws and regulations can change from time to time, imposing new obligations on us. Like others in the energy industry, we and our affiliates are responsible for environmental remediation at various contaminated sites. These include some properties that are part of our ongoing operations, sites formerly owned or used by us, and sites owned by third parties. Remediation typically involves management of contaminated soils and may involve groundwater remediation. Managed in conjunction with relevant federal, state/provincial and local agencies, activities vary with site conditions and locations, remedial requirements, complexity and sharing of responsibility. If remediation activities involve statutory joint and several liability provisions, strict liability, or cost recovery or contribution actions, we or our affiliates could potentially be held responsible for contamination caused by other parties. In some instances, we may share liability associated with contamination with other potentially responsible parties, and may also benefit from contractual indemnities that cover some or all cleanup costs. All of these sites generally are managed in the normal course of business or affiliated operations. Litigation Litigation and Legal Proceedings. We are involved in legal, tax and regulatory proceedings in various forums arising in the ordinary course of business, including matters regarding contract and payment claims, some of which involve substantial monetary amounts. We have insurance coverage for certain of these losses should they be incurred. We believe that the final disposition of these proceedings will not have a material effect on our consolidated results of operations, financial position or cash flows. Legal costs related to the defense of loss contingencies are expensed as incurred. We had no material reserves for legal matters recorded as of March 31, 2016 or December 31, 2015 related to litigation. |
Issuances of Common Units |
3 Months Ended |
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Mar. 31, 2016 | |
Issuances of Common Units [Abstract] | |
Issuances of Common Units | Issuances of Common Units During the three months ended March 31, 2016, we issued 1.7 million common units to the public under our at-the-market program, and approximately 35,000 general partner units to Spectra Energy. Total net proceeds were $82 million, including approximately $2 million of proceeds from Spectra Energy. |
New Accounting Pronouncements |
3 Months Ended |
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Mar. 31, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation,” which amends the consolidation guidance around reporting entities that invest in development stage entities. We adopted the consolidation guidance of this amendment on January 1, 2016 and applied it retrospectively with no material effect on our consolidated results of operations, financial position, or cash flows. This ASU did result in certain of our entities being classified as Variable Interest Entities. See Note 5 for discussion of our Variable Interest Entities. In February 2015, the FASB issued ASU No. 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis,” which makes changes to both the variable interest model and the voting model. These changes will require reevaluation of certain entities for consolidation and will require us to revise our documentation regarding the consolidation or deconsolidation of such entities. We adopted this standard on January 1, 2016 with no material effect on our consolidated operations, financial position, or cash flows. In September 2015, the FASB issued ASU No. 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments,” to simplify accounting for adjustments made to provisional amounts recognized in a business combination and to eliminate the retrospective accounting for those adjustments. We adopted this standard on January 1, 2016, and it has not had a material impact on our consolidated operations, financial position, or cash flows. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)," to improve the financial reporting around leasing transactions. The new guidance requires companies to begin recording assets and liabilities arising from those leases classified as operating leases under previous guidance. Furthermore, the new guidance will require significant additional disclosures about the amount, timing and uncertainty of cash flows from leases. Topic 842 retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in previous guidance. The result of retaining a distinction between finance leases and operating leases is that under the lessee accounting model in Topic 842, the effect of leases in the statement of comprehensive income and the statement of cash flows is largely unchanged from previous guidance. This ASU is effective for us January 1, 2019. We are currently evaluating this ASU and its potential impact on us. In March 2016, the FASB issued ASU No. 2016-05, "Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships," which clarifies the hedge accounting impact when there is a change in one of the counterparties to the derivative contract (i.e. novation). This ASU is effective for us January 1, 2017. This ASU is not expected to have a material impact on our consolidated results of operations, financial position or cash flow. In March 2016, the FASB issued ASU No. 2016-06, “Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments,” which simplifies the embedded derivative analysis for debt instruments containing contingent call or put options. This ASU is effective for us January 1, 2017. This ASU is not expected to have a material impact on our consolidated results of operations, financial position or cash flow. In March 2016, the FASB issued ASU No. 2016-07, "Investments-Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting," which eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. This ASU is effective for us January 1, 2017. We are currently evaluating this ASU and its potential impact on us. In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” to clarify implementation guidance on principal versus agent considerations. This ASU is effective for us on January 1, 2018. We are currently evaluating this ASU and its potential impact on us. In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,” to clarify implementation guidance on performance obligations and licensing. This ASU is effective for us on January 1, 2018. We are currently evaluating this ASU and its potential impact on us. |
Subsequent Events |
3 Months Ended |
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Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Subsequent Events On April 1, 2016, NextEra purchased a 9.5% interest in Sabal Trail from us. Consideration for this transaction consisted of approximately $109 million cash. Upon completion, our ownership interest in Sabal Trail decreased to 50%. On April 29, 2016, we amended our credit agreement. The total capacity was increased to $2.5 billion and the expiration date was extended to April 2021. In April 2016, we issued 10.4 million common units and 0.2 million general partner units to Spectra Energy in a private placement transaction. Total net proceeds were $489 million, including $10 million for general partner units in order to maintain Spectra Energy's 2% general partner interest. We intend to use the proceeds from this purchase for general partnership purposes, including the funding of our current expansion capital plan. Following this transaction, Spectra Energy holds a 78% interest in us. |
Summary of Operations and Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2016 | |
Variable Interest Entity [Line Items] | |
Use of Estimates, Policy | 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 Condensed Consolidated Financial Statements and Notes to Condensed Consolidated Financial Statements. Although these estimates are based on our best available knowledge at the time, actual results could differ. |
Fair Value Measurement, Policy | Level 1 Level 1 valuations represent quoted unadjusted prices for identical instruments in active markets. 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. |
Derivatives, Offsetting Fair Value Amounts, Policy | For interest rate derivative instruments that 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. |
Sabal Trail | |
Variable Interest Entity [Line Items] | |
Consolidation, Variable Interest Entity, Policy | Sabal Trail is a variable interest entity (VIE) due to insufficient equity at risk to finance its activities. We determined that we are the primary beneficiary because we direct the activities of Sabal Trail that most significantly impact its economic performance and we consolidate Sabal Trail in our financial statements. |
Nexus | |
Variable Interest Entity [Line Items] | |
Consolidation, Variable Interest Entity, Policy | 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. |
Business Segments (Tables) |
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Business Segment Data | Business Segment Data
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Net Income Per Limited Partner Unit and Cash Distributions (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Limited Partner Unit Calculations | The following table presents our net income per limited partner unit calculations:
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Incentive Distribution Rights in Accordance with Partnership Agreement | Incentive Distribution Rights. The general partner holds incentive distribution rights beyond the first target distribution in accordance with the partnership agreement as follows:
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Variable Interest Entities (Tables) |
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Schedule of Variable Interest Entities [Table Text Block] | The following summarizes assets and liabilities for Sabal Trail as of March 31, 2016 and December 31, 2015, respectively:
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Debt and Credit Facility (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Credit Facility Summary | Available Credit Facility and Restricted Debt Covenants
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The following presents, for each of the fair value hierarchy levels, assets that are measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015.
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Fair Values of Financial Instruments That are Recorded and Carried at Book Value | 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.
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Risk Management and Hedging Activities Derivative Assets and Liabilities Offsetting (Tables) |
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Derivative Assets And Liabilities Offsetting Table [Text Block] | Information about our interest rate swaps that had netting or rights of offset arrangements are as follows:
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General (Details) |
Mar. 31, 2016 |
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Spectra Energy Corp | |
Business Acquisition | |
Ownership percentage by parent | 77.00% |
Publicly Owned | |
Business Acquisition | |
Ownership percentage by public | 23.00% |
Business Segments (Additional Information) (Details) |
3 Months Ended |
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Mar. 31, 2016
reportable_segments
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Segment Reporting Information | |
Number of reportable segments | 2 |
Business Segment Data (Details) - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2016 |
Mar. 31, 2015 |
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Segment Reporting Information | ||
Total operating revenues | $ 624 | $ 606 |
Depreciation and amortization | 77 | 73 |
Interest expense | 56 | 57 |
Interest income and other | 1 | (3) |
Earnings from continuing operations before income taxes | 315 | 303 |
US Transmission | ||
Segment Reporting Information | ||
Total operating revenues | 538 | 522 |
Earnings before interest taxes depreciation and amortization | 411 | 389 |
Depreciation and amortization | 70 | 65 |
Liquids | ||
Segment Reporting Information | ||
Total operating revenues | 86 | 84 |
Earnings before interest taxes depreciation and amortization | 56 | 64 |
Depreciation and amortization | 7 | 8 |
Other | ||
Segment Reporting Information | ||
Earnings before interest taxes depreciation and amortization | (20) | (17) |
Total Operating Segments | ||
Segment Reporting Information | ||
Total operating revenues | 624 | 606 |
Earnings before interest taxes depreciation and amortization | 467 | 453 |
Depreciation and amortization | $ 77 | $ 73 |
Net Income Per Limited Partner Unit and Cash Distributions (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | |
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Mar. 31, 2016 |
Mar. 31, 2015 |
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Related Party Transaction [Line Items] | ||
Net income—controlling interests | $ 298 | $ 293 |
Less: General partner’s interest in net income | 69 | 57 |
Limited partners’ interest in net income | $ 229 | $ 236 |
Weighted-average limited partner units outstanding—basic and diluted | 285 | 295 |
Net income per limited partner unit—basic and diluted | $ 0.80 | $ 0.80 |
Partnership Interest | ||
Related Party Transaction [Line Items] | ||
Less: General partner’s interest in net income | $ 6 | $ 6 |
General partner's interest in net income, ownership interest percentage | 2.00% | 2.00% |
Incentive Distribution Rights | ||
Related Party Transaction [Line Items] | ||
Less: General partner’s interest in net income | $ 63 | $ 51 |
Net Income Per Limited Partner Unit and Cash Distributions (Additional Information) (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | |
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May. 04, 2016 |
Mar. 31, 2016 |
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Equity [Abstract] | ||
Distribution Made To Member Or Limited Partner Distribution Period | 60 days | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Distributions to be paid to unit holders | $ 0.65125 | |
Distribution to limited partner, declaration date | May 04, 2016 | |
Distribution made to limited partner, distribution date | May 27, 2016 | |
Distribution made to limited partner, date of record | May 16, 2016 | |
Contribution from Parent | $ 4 |
Transaction with Affiliate (Details) - USD ($) $ in Millions |
Mar. 31, 2016 |
Dec. 31, 2015 |
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Related Party Transaction [Line Items] | ||
Other | $ 252 | $ 258 |
Gulfstream | Unconsolidated Affiliates | ||
Related Party Transaction [Line Items] | ||
Other | $ 148 |
Intangible Asset (Details) - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2016 |
Mar. 31, 2015 |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||
Purchase of intangible | $ 48 | $ 0 |
Marketable Securities and Restricted Funds - Schedule of Available-for-Sale Securities (Details) - USD ($) $ in Millions |
Mar. 31, 2016 |
Dec. 31, 2015 |
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Corporate Debt Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain (Loss), before Tax | $ 0 | $ 0 |
Commercial Paper | Investments and Other Assets - Other | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities | $ 9 | $ 11 |
Marketable Securities and Restricted Funds - Schedule of Held-to-Maturity Securities (Details) - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2016 |
Dec. 31, 2015 |
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Current Assets - Other | Money Market Funds | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Held-to-maturity, fair value | $ 11 | $ 3 |
Maximum | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Held-to-maturity securities, contractual maturity | 1 year | |
Corporate Debt Securities | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain | $ 0 | $ 0 |
Marketable Securities and Restricted Funds Schedule of Gain (Loss) on Investments (Details) - Investments and Other Assets - Other - USD ($) $ in Millions |
Mar. 31, 2016 |
Dec. 31, 2015 |
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Gain (Loss) on Investments [Line Items] | ||
Restricted Cash and Cash Equivalents, Noncurrent | $ 10 | $ 14 |
Canadian Pipeline Abandonment Requirement [Member] | ||
Gain (Loss) on Investments [Line Items] | ||
Restricted Cash and Cash Equivalents, Noncurrent | 1 | |
Project Costs [Member] | ||
Gain (Loss) on Investments [Line Items] | ||
Restricted Cash and Cash Equivalents, Noncurrent | $ 9 |
Debt and Credit Facility (Additional Information) (Details) $ in Millions |
3 Months Ended | |
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Mar. 31, 2016
USD ($)
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Dec. 31, 2015
USD ($)
|
|
Line of Credit Facility [Line Items] | ||
Expiration Date | 2019 | |
Total Credit Facility Capacity | $ 2,000 | |
Commercial Paper Outstanding at March 31, 2016 | 806 | $ 476 |
Available Credit Facility Capacity | $ 1,194 | |
Debt To EBITDA Ratio | 3.7 | |
Maximum | ||
Line of Credit Facility [Line Items] | ||
Debt To EBITDA Ratio | 5.0 |
Fair Value Measurements - Fair Values of Financial Instruments Recorded and Carried at Book Value (Details) - USD ($) $ in Millions |
Mar. 31, 2016 |
Dec. 31, 2015 |
|||||
---|---|---|---|---|---|---|---|
Book Value | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||||||
Note receivable, noncurrent | [1] | $ 71 | $ 71 | ||||
Long-term debt, including current maturities | [2] | 6,152 | 6,152 | ||||
Approximate Fair Value | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | |||||||
Note receivable, noncurrent | [1] | 71 | 71 | ||||
Long-term debt, including current maturities | [2] | $ 6,241 | $ 5,906 | ||||
|
Risk Management and Hedging Activities (Details) - Interest Rate Swap - USD ($) $ in Millions |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Derivative [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | $ 31 | $ 14 |
Derivative Asset, Fair Value, Amount Not Offset Against Collateral | 0 | 0 |
Derivative Asset | $ 31 | $ 14 |
Risk Management and Hedging Activities Risk Management and Hedging Activities - Additional Detail (Details) $ in Millions |
Mar. 31, 2016
USD ($)
|
---|---|
Interest Rate Swap | |
Derivative [Line Items] | |
Derivative, Notional Amount | $ 900 |
Issuances of Common Units (Additional Information) (Detail) - USD ($) shares in Thousands, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Issuances of Common Units [Line Items] | ||
Proceeds from issuance of common units | $ 82 | $ 40 |
Limited Partners Common | ||
Issuances of Common Units [Line Items] | ||
Partners units issued (in shares) | 1,700 | |
General Partner | ||
Issuances of Common Units [Line Items] | ||
Partners units issued (in shares) | 35 | |
Proceeds from issuance of common units | $ 2 |
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