National Association of Publicly Traded Partnerships MLP Conference Presentation New York, New York May 21, 2008
Safe Harbor Statement Some of the statements in this document concerning future company performance will be forward-looking within the meanings of the securities laws. Actual results may materially differ from those discussed in these forward-looking statements, and you should refer to the additional information contained in Spectra Energy Partners 10-K and other filings made with the SEC concerning factors that could cause actual results to be different than those contemplated in today's discussion. Reg G Disclosure In addition, today s discussion includes certain non-gaap financial measures as defined under SEC Regulation G. A reconciliation of those measures to the most directly comparable GAAP measures is available on Spectra Energy Partners Investor Relations website at www.spectraenergypartners.com. 2
Key Investment Highlights Attractive Assets Growth Opportunities Strong Sponsorship Experienced Management Financial Strength 3
Cash Available for Distribution ($ millions except per unit amounts) Inception through 1st Quarter 2008 1st Quarter 2008 Adjusted EBITDA $ 19.5 $ 54.5 Cash Available from Equity Investments Less: Gulfstream (24.5%) 8.3 25.3 Market Hub Partners (50%) 8.7 24.4 Cash Interest Expense (net) 1.7 7.8 Maintenance Capital Expenditures 1.0 4.9 Total Cash Available for Distribution $ 33.8 $ 91.5 Cash Available for Distribution per unit $ 0.50 $ 1.35 Original 2008 forecast presented in February $93.4 million for Cash Available for Distribution $1.32 per weighted average unit Inception to date performance illustrates strength of assets 4
Highlights since IPO Distribution Growth Solid Revenue Foundation Substantial Organic Growth Pursue Acquisitions Distribution growth is primary objective for SEP Declared 33 cents per unit on April 24, 2008 3% increase over February distribution Second consecutive quarterly increase Continued building on foundation of contracted capacity Strong demand and increased asset utilization Storage contracts continue to be renewed at higher rates and for longer terms Construction began at all SEP assets ETNG s Glade Spring (February) & CNX (April) Gulfstream s Phase III (April) & Phase IV (January) Market Hub Partner s Egan Cavern 3 (February Drilling began) New expansion projects announced since IPO Moss Bluff Cavern 4 (March) East Tennessee Greenway/Nora Expansion filed with FERC (April) Completed Saltville and P-25 Pipeline acquisition Continue to pursue acquisitions Increased cash distribution per unit by 10% since initial public offering 5
Spectra Energy Partners Growth Strategy Build on contracted position Deliver on organic growth projects Aggressively pursue acquisitions Roanoke Knoxville Atlanta Saltville Gas Storage Closed on April 4, 2008 Moss Bluff Egan Mobile East Tennessee Natural Gas Expansion: Glade Spring/CNX Houston Orlando Market Hub Partners Expansion: Egan Caverns 3 & 4 Moss Bluff Cavern 4 Gulfstream Tampa Expansion: Phase III & IV Miami Note: Texas Eastern, Algonquin, Maritimes & Northeast pipelines owned by Spectra Energy. 6
Projected Capacity and Contracted Position Existing low-risk profile strengthens as additional capacity comes on line Projected Capacity and Contract Position at Year End 2008 East Tennessee Gulfstream Market Hub 2008 System / Working Capacity (Bcf) 1.471 1.077 37 Projected Subscribed Capacity (Bcf) 1.371 1.077 37 Percentage of Contracted Capacity 93% 100% 100% Fully contracted assets provide stable cash flows 7
East Tennessee Natural Gas The Cornerstone Asset Key gateway for Appalachian producers to Mid-Atlantic markets 1.33 Bcf/d current total system capacity 0.140 Bcf/d to be added by year end 1,400 miles of pipeline Connects to Texas Eastern and Transco to reach Gulf Coast supply and Eastern markets 1.1 Bcf Liquefied Natural Gas (LNG) facility Integrated with Saltville Gas Storage assets Average remaining contract life: 9 years ETNG operating data Throughput 2007: 169.6 Bcf (up 24% over 2006) 2006: 136.8 Bcf All time peak day set: 1.02 Bcf on Jan 2, 2008 Set 12 top 25 delivery days during January Appalachian production and off system markets create dynamic opportunities 8
East Tennessee Natural Gas Appalachian Market Dynamics 3.500 Appalachia Production Forecast (ICF April 2008) 3.000 2.500 BCF/Day 2.000 1.500 1.000 2001 2003 2005 2007 2009 2011 2013 2015 2017 2008 2018 growth estimated to be 48% ETNG Appalachian receipts up over 100% since 2004 Appalachian producers nominated over 0.6 Bcf/day during Greenway open season Near term Appalachian profile does not contemplate Marcellus shale opportunities 9
East Tennessee Natural Gas Building on the Cornerstone Successful project execution track record Glade Spring/CNX expansions HP and equipment upgrades Est. 2008 Capex $20 million Greenway/Nora Expansion Looping Total Capex: $19 million Est. 2008 Capex: $14.1 million Capex for 2008: Est $34.1 MM Project Name Description In-Service Capacity (MDth/d) Glade Spring/CNX Horsepower / equipment upgrades Q4 2008 (phased in) 90 Greenway/Nora Expansion 5.65 miles, 24 inch pipe Q4 2008 50 Solid project returns benefiting from existing facility footprint 10
East Tennessee Natural Gas Greenway Open Season Successful open season provides multi-year opportunities Total Requests > 900 Mdth/d Requests by Customer Group Annual Increase in Nominations Power Gen 6% 300 LDCs On system 3% 250 LDCs Off system 200 14% 150 100 50 0 2008 2009 2010 2011 2012 2013+ Producers 71% Marketer 4% Industrials 2% Mdth/d Prolific Appalachian production driving near term expansions 11
Saltville Gas Storage Delivering Growth through Acquisitions Strategically positioned between natural gas supply and end user markets $107 million acquisition from SE $4.65 MM; 4.2 million common units Saltville assets P-25 Pipeline 72 miles of 8 pipe 40,000 Dth/day design capacity Integrated with East Tennessee Natural gas storage facilities 4 Bcf High deliverability salt cavern storage 1.5 Bcf of reservoir storage Potential for 4 Bcf of new cavern space Space developed by third party at no cost to SEP Capital required for facilities only Rate case filed with FERC 35% cost-of-service increase filed pending settlement Higher tariff rates with increased revenue opportunities in 2010 Acquisition allows improved and more efficient services for Saltville and ETNG customers 12
Gulfstream Natural Gas State of the Art System Continue to meet the needs of the fast growing Florida market Southeast Supply Header MS CODEN PENSACOLA AL Florida Gas Transmission Gulfstream TALLAHASSEE GA JACKSONVILLE Phase IV Cypress Pipeline Project TAMPA ORLANDO FL Phase III MIAMI Long term contracts underpin asset profile Capacity: 1.1 Bcf per day 700 mile system Extends across Gulf of Mexico from Coden, Alabama into central Florida 1 of only 2 major pipelines serving Florida markets 7 receipt points; 19 delivery points Average Remaining Contract Life: 19 years Ownership SEP (24.5%) Spectra Energy (25.5%) Williams (50%) Built in 2002 by SE and WMB Total contracted pipeline capacity Current: 0.723 Bcf/d 2009E: 1.25 Bcf/d Fully Contracted Operating data: Throughput 2007: 266 Bcf 2006: 255 Bcf 13
Gulfstream Natural Gas Market Dynamics Power generation drove past growth % Power Generation Fueled by Natural Gas 40% 30% 20% 10% 19% 17% 18% 19% 19% 25% 26% 31% 33% 39% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Change in Fuel Mix for Power Generation Other, 16% Other, 10% Nuclear, 13% Gas, 37% Nuclear, 13% Gas, 44% 2007E GWH 2016E GWH 239,446 308,343 Coal, 24% Oil, 10% Coal, 29% Oil, 4% Gas fired electric generation remains bridge to Florida s energy future Source: Florida Reliability Coordinating Council, August 2007 14
Gulfstream Natural Gas Phase III & IV Expansions Underway Florida still remains one of the fastest growing gas markets Gulfstream Phase III: Construction began April 2008 Est. Capex $32 million 2008: $19.5 million In-service 3Q 2008 1H 2009 Gulfstream Phase IV: Construction began January 2008 Est. Capex $37 million 2008: $26.1 million Phased in-service 2H 2008-1H 2009 Project Name In-Service Capacity (MDth/d) Compression (HP) Pipeline Length (Miles) Phase III Florida Power & Light 3Q 2008 & 1H 2009 345 NA 35 Phase IV Progress Energy 4Q 2008 & 1H 2009 155 45,000 18 Expansions to contribute significant distributable cash growth for SEP by year end 15
Market Hub Partners Strong Demand Supports Expansions MHP assets are located along the Gulf Coast with significant interconnectivity 50 percent owned joint venture with Spectra Energy Corp Avg Remaining Contract Life: 3 yrs Two high-deliverability salt cavern storage facilities Egan 20 Bcf working capacity 38-mile pipeline system 7 interconnects Moss Bluff 15 Bcf working capacity 16 mile pipeline system 5 interconnects Aggregate 35 Bcf working capacity Potential total working capacity of 80 Bcf Current expansions will increase MHP s total storage capacity to 51 Bcf by 2012 16
Market Hub Partners Storage Market Dynamics US supply and demand dynamics necessitate storage services Traditional North American seasonal demand profile Growth in power generation Summer spikes more pronounced Gas vs. power clock balancing is a continuing issue LNG s sporadic market entry Gulf Coast remains likely primary entry point Pipeline constraints Supply and market areas Gulf Coast high deliverability assets best positioned to meet diverse customer needs 17
Market Hub Partners Egan expansions underway Egan is the premier salt cavern asset in North America Egan Cavern 4: SEP s share of total est. Capex: $30 million Est. 2008: $8.2 million Egan Cavern 3: SEP s share of total est. Capex: $70 million Est. 2008: $22.5 million Project Name Egan Cavern 4 Egan Cavern 3 Description 8 Bcf expansion, placed in service in 2006 8 Bcf expansion & 16 miles of 24 pipe In Service Final completion Summer 2008 Phased-in 2H 2009-2H 2012 Strategically positioned to take advantage of supply and market peaking opportunities 18
Market Hub Partners Moss Bluff Moss Bluff is key player in the Texas intrastate market Moss Bluff Cavern 4 SEP s share of total est. Capex: $58 million Est. 2008: $14.9 million Permitted by TX RR Commission Construction to begin 2H 2008 Project Name Description In Service Moss Bluff Cavern 4 6.5 Bcf expansion / pipeline & interconnect upgrades 2H 2011 Strategically located to capture LNG terminal opportunities 19
Well Positioned to Achieve 2008 Target Solid Contract Foundation Additional long term fee-based contracts scheduled to come online at Gulfstream and East Tennessee by year end Increasing asset utilization Minimal and decreasing commodity exposure Advance Expansion Projects Strong Financial Position Pursue Acquisitions East Tennessee s Glade Spring, CNX and Greenway/Nora expansions Gulfstream s Phase III and Phase IV on schedule for phased-in service beginning in 2008 Market Hub Partners Egan Caverns 3 and 4; Moss Bluff Cavern 4 Average 6 times Adjusted EBITDA multiple on organic growth projects Liquidity to pursue growth through expansions $500 million credit agreement $370 million of liquidity as of March 31, 2008 Goal is to maintain investment grade quality; Not currently rated Potential 3 rd party acquisitions Potential dropdowns from Spectra Energy Solid performance to date sets foundation for significant growth beyond 2008 20
Questions & Answers 21
Appendix 22
Regulation G Reconciliation Spectra Energy Partners, LP Non-GAAP Reconciliation for SEC Regulation G National Association of Publicly Traded Partnerships MLP Conference Presentation May 21, 2008 Adjusted Earnings Before Interest, Taxes and Depreciation and Amortization ( EBITDA ) The materials for Spectra Energy Partners National Association of Publicly Traded Partnerships MLP Conference Presentation on May 21, 2008 include a discussion of adjusted EBITDA (earnings before interest, taxes and depreciation and amortization). Adjusted EBITDA is a non- GAAP financial measure. The most directly comparable GAAP measure for adjusted EBITDA is net income plus interest expense, income taxes, and depreciation and amortization, less equity in earnings of Gulfstream and MHP, interest income, and other income and expenses. Cash Available for Distribution The materials for Spectra Energy Partners National Association of Publicly Traded Partnerships MLP Conference Presentation on May 21, 2008 include a discussion of Cash Available for Distribution. Cash Available for Distribution is a non-gaap financial measure. The most directly comparable GAAP measure for Cash Available for Distribution is Adjusted EBITDA (defined above) less net cash paid for interest expense (income), net and maintenance capital expenditures. 23
Regulation G Reconciliation Spectra Energy Partners, LP Adjusted EBITDA and Cash Available for Distribution July 2, 2007 through March 31, 2008 (Unaudited) (In millions) July 2, 2007 to March 31, 2008 Spectra Energy Partners Reconciliation of Non-GAAP "Adjusted EBITDA" and "Cash Available for Distribution" to GAAP "Net Income" Net income $ 179.2 Add: Interest expense 17.8 Income tax expense (benefit) (109.4) Depreciation and amortization 19.1 Less: Equity in earnings of Gulfstream 19.8 Equity in earnings of Market Hub 25.4 Interest income 7.0 Other income (expenses), net - Adjusted EBITDA 54.5 Add: Cash Available for Distribution from Gulfstream 25.3 Cash Available for Distribution from Market Hub 24.4 Less: Cash paid for interest expense, net 7.8 Maintenance capital expenditures 4.9 Cash Available for Distribution $ 91.5 24
Regulation G Reconciliation Spectra Energy Partners, LP Gulfstream - Adjusted EBITDA and Cash Available for Distribution July 2, 2007 through March 31, 2008 (Unaudited) (In millions) Gulfstream July 2, 2007 to March 31, 2008 Reconciliation of Non-GAAP "Adjusted EBITDA" and "Cash Available for Distribution" to GAAP "Net Income" Net income $ 79.7 Add: Interest expense 35.2 Depreciation and amortization 22.2 Less: Other income, net 6.2 Adjusted EBITDA - 100% 130.9 Less: Cash paid for interest expense, net 25.7 Maintenance capital expenditures 1.7 Cash Available for Distribution - 100% $ 103.5 Adjusted EBITDA - 24.5% $ 32.1 Cash Available for Distribution - 24.5% $ 25.3 25
Regulation G Reconciliation Spectra Energy Partners, LP Market Hub Partners - Adjusted EBITDA and Cash Available for Distribution July 2, 2007 through March 31, 2008 (Unaudited) (In millions) Market Hub Partners July 2, 2007 to March 31, 2008 Reconciliation of Non-GAAP "Adjusted EBITDA" and "Cash Available for Distribution" to GAAP "Net Income" Net income $ 50.8 Add: Interest expense 2.0 Income tax expense 0.1 Depreciation and amortization 7.5 Less: Interest income 3.2 Other income, net 6.9 Adjusted EBITDA - 100% 50.3 Less: Cash paid for interest expense, net - Maintenance capital expenditures 1.7 Cash Available for Distribution - 100% $ 48.6 Adjusted EBITDA - 50% $ 25.2 Cash Available for Distribution - 50% $ 24.4 26