HOUSTON, Feb. 4, 2016 /PRNewswire/ — Spectra Energy Corp (NYSE: SE) and Spectra Energy Partners (NYSE: SEP) today announced their 2016-2018 business and financial plan.
Key highlights for Spectra Energy include:
- 2016 distributable cash flow (DCF) of almost $1.4 billion, up 6% from 2015
- Dividend increase of 14 cents per share annually through 2018; dividend coverage of 1.2x in 2016, 1.3x in 2017, and 1.1x in 2018 which substantially exceeds the coverage expected in the prior year’s financial plan
- 2016 enterprise-wide EBITDA of more than $2.8 billion, with a CAGR of 8% through 2018
Key highlights for Spectra Energy Partners include:
- 2016 DCF of $1.3 billion, up 8.7% from 2015 with a CAGR of 15.6% through 2018
- Distribution increases of 1.25 cents per unit each quarter through 2018; distribution coverage of 1.2x in each of the three forecast years – higher than prior year’s financial plan
“Our execution backlog of about $8 billion in secured projects is primarily driven by natural gas demand and will grow our cash flows during and beyond the plan period. The strength of our projects in execution gives us confidence in our ongoing ability to deliver an annual 14-cent per share dividend increase at Spectra Energy and our quarterly penny-and-a-quarter per unit distribution increase at Spectra Energy Partners through 2018,” said Greg Ebel, chief executive officer, Spectra Energy. “Despite commodity prices and the Canadian dollar being significantly lower than a year ago, our 2016 and 2017 DCF forecasts and dividend and distribution coverage ratios are stronger than those we presented to investors a year ago.
“The fundamentals of a company matter – and in today’s business environment, they matter even more. Our existing infrastructure assets go to where the lights are – from key supply basins to the fastest growing North American energy markets. The competitive advantage of our existing assets, with our expansion projects in execution, provides an outlook that is more robust than even a year ago and provides investors with stable and reliable returns,” added Ebel.
Key assumptions underlying the three-year financial plan include:
- For all three years, natural gas liquids prices of 42 cents per gallon; natural gas prices of $2.50 per thousand cubic feet (Mcf); and crude oil prices of $45 per barrel
- A Canadian-to-U.S. dollar exchange rate of 1.40 for each of the three years forecast
- Maintenance CapEx of $615 million in 2016, $625 million in 2017, and $640 million in 2018
- Cash tax rates of 1.8% in 2016, 4.2% in 2017, and 14.8% in 2018
- Investment of approximately $6 billion in expansion capital over the plan period, with $3.0 billion invested in 2016, $1.9 billion in 2017 and $1.2 billion in 2018; SEP’s share of CapEx is about 61% in 2016, 68% in 2017, and 81% in 2018
Spectra Energy and Spectra Energy Partners will discuss their business outlook and three-year financial plan in greater detail during an analyst/investor meeting today.
The presentation is scheduled to begin at 8:30 a.m. ET and will be webcast via the Investors sections of the Spectra Energy and Spectra Energy Partners websites. The conference call can be accessed by dialing (888) 252-3715 in the U.S. or Canada, or (706) 634-8942 internationally. The conference ID is 7888893 or “Spectra Energy 2016 Plan.”
A replay of the call will be available until 5 p.m. CT on Tuesday, May 3, 2016, by dialing (800) 585-8367 in the U.S. or Canada, or (404) 537-3406 internationally, and using the above conference ID. A replay and transcript also will be available via the Investors sections of the Spectra Energy and Spectra Energy Partners websites.