Good morning. My name is Krista and I will be your conference operator today. At this time I would like to welcome everyone to the Spectra Energy and Spectra Energy Partners Third-Quarter Earnings Conference Call. Now I would like to turn the call over to your Chief Communications Officer, Julie Dill. Please go ahead.

Thank you, Krista, and good morning, everyone. Appreciate you joining us today for our review of Spectra Energy's and Spectra Energy Partners' 2016 third-quarter results. With me today are Greg Ebel, President and CEO of both Spectra Energy and Spectra Energy Partners; Pat Reddy, Chief Financial Officer of both companies; and Bill Yardley, President of our U.S. Transmission business. You'll hear from both Greg and Pat this morning as they go through our results for the quarter and provide updates on our growth projects and the proposed merger with Enbridge. And Bill is here to help field questions related to U.S. transmission. You'll hear from Greg and Pat this morning – sorry, as always, we'll leave plenty of time for your questions. Our Safe Harbor statements are contained within our presentation materials and available on our website. These statements are important and integral to all our remarks, so -- so I would ask that you refer to them as you review our material. Also contained in our presentation materials are certain non-GAAP measures that we reconcile to the most directly comparable GAAP measures, and those reconciliations are also available on our website. With that, let me turn things over to Greg.

Well, thanks very much, Julie, and good morning, everybody. Before we have Pat go through our financial results for the quarter, I wanted to give you a quick update on the status of our proposed merger with Enbridge. This is, as you know, a transformational combination that will deliver tangible benefits to all Spectra Energy's stakeholders. By merging our best-in-class natural gas and liquids assets, we've become the largest energy infrastructure company in North America. And with that come some very clear and specific benefits for Spectra Energy's shareholders. First, it delivers an upfront premium; and through the share exchange it allows for participation in what we expect will be meaningful value uplift on a combined basis. Second, the transaction is expected to be completed on a tax-deferred basis. Next, and more importantly, it provides for an expected annualized 15% dividend increase in year one. And then it's expected to increase and extend future annual dividend growth from Spectra Energy's current rate of about 8% per year to a range of 10% to 12% annually through at least 2024, with greatly enhanced dividend coverage also expected over this timeframe. No other company in our industry has that kind of high-return, low-risk model. It diversifies our asset base and creates significant financial flexibility that allows us to continue to compete for and win the most significant attractive growth projects. We've said on many occasions that we'd like to grow our liquids footprint, and this transaction does that on an accelerated basis, adding what is clearly North America's premier, most critical liquids pipeline network. It also allows for continued development and execution of Spectra Energy's existing attractive U.S. expansion program within a more robust entity. And upon closing of the proposed merger, SEP will maintain its low-risk, stable cash flow model with…

Well, thanks, Greg, and good morning, everyone. As you've seen in our news releases, Spectra Energy and Spectra Energy Partners delivered solid, ongoing earnings and cash for the quarter. These results reflect the strength of our diverse portfolio and are well in line with our full-year expectations. Before I get into the details of the ongoing results, I want to discuss some special items we recorded in the quarter. The first item relates to the continued inspection and repair efforts associated with the Texas Eastern pipeline incident that occurred earlier this year in Pennsylvania. SEP recorded a special item of $38 million in the quarter. Year-to-date related expenses have totaled $54 million, including $44 million at SEP and $10 million at SE Other. In total, we expect to incur special item costs in the range of $75 million to $100 million related to these activities. Most of these costs are anticipated to be incurred in 2016. The next two special items, totaling $16 million adversely affected EBITDA in our Western Canada Business segment; $13 million is attributable to revenue credits and property repairs resulting from significant flooding earlier in the year that affected our Grizzly Valley operations in British Columbia. We're continuing to work with our third-party insurance providers to further refine the full impact of the floods. We also recorded a $3 million charge for employee and overhead reductions that resulted from the sale of Empress. There was one other special item related to this sale, a $27 million tax benefit that did not affect EBITDA or cash but did affect net income. Field Services recorded three special items related to employee and overhead cost reductions; an asset impairment and a gain on the sale of an asset netting to a negative $3 million. Lastly, Spectra Energy Other included…

Thanks very much, Pat. Well, it's been a very busy but exceptionally productive quarter for us. During the third quarter we delivered strong earnings and cash generation results. Our performance year-to-date is tracking very well with the targets we set out at the beginning of the year, underscoring the strength of our overall portfolio. We reduced our commodity exposure with the sale of Empress NGL business in August. As Pat just mentioned, we further enhanced our competitive position as a result of the successful execution of our capital market strategy. Importantly, we have plenty of flexibility to finance any expansion needs occurring prior to the close of our proposed merger with Enbridge. We achieved a renewal rate of more than 98% of contracted revenues on our U.S. natural gas pipeline system once again. This affirms the value of our underlying base business and the advantage of having pipe in the ground. And I'm pleased to report that we are ready to meet our customer obligations in time for winter heating season on our Texas Houston pipeline system after the incident we had in Pennsylvania earlier this year. I want to give a quick shout out to our dedicated men and women who worked so hard and responded so well to make this possible. I'm especially proud of how DCP has executed on its turnaround plan. The business results have substantially improved over the course of the year and DCP is now reporting positive results to its parent, which positions DCP well going forward. They have already achieved their $0.35 NGL cash breakeven target. Lastly, our expansion plans continue to move forward. So let me update you on the progress that we've made on our secured projects in execution. Let's start with the projects we put into service this year. As…

Thank you, Greg. So we'll open the lines for your questions, but you'll understand that we are limited in what we can say about the proposed Enbridge merger. We can address information that is public related to timing, our process, and progress to-date, but we cannot speak to future plans or expectations during this call. So with that, Krista, would you please provide instructions on how folks can ask questions?

And your first question comes from the line of Darren Horowitz with Raymond James. Your line is open.

Good morning, guys.

Good morning. Darren.

Greg, if I could, either for you or Bill -- and I know it's frustrating, and we appreciate that. But can you give us an updated timeline of expectations on Access Northeast? I think the last time we left this, we had hoped to be through the Massachusetts Supreme Judicial Court that was -- that should've been underway. And then, of course, on to the Connecticut request for proposals. And I think that that had pointed at least hopefully to getting a FERC decision -- outside of the state issues, maybe a FERC decision around the Algonquin tariff soon. So I'm just curious where we stand now and where we're going to go?

Yes, I'll let Bill respond to that. Obviously, he's spending a lot of time on this issue in order to serve those consumers. And you're right, we've had – not where we thought we would be. But that being said, I know Bill is good at Plans A, B, C, D, and E so maybe we can just turn it to Bill.

Yeah, Darren, so -- you know the frustration we've got here. Let's say -- I think Greg outlined pretty well the need, and the resolve really the partnership to get something done. You know, we have shifted our focus a bit, and said okay, so there are some electric distribution companies that will still stick with us and can legally stick with us, but at the same time, there's a lot of unmet local distribution company load. And I think, just to highlight something here, it supports the incremental build, the Algonquin system build that we've done, putting AIM into service now, Atlantic Bridge next year. And this is a project that can be morphed into something that meets both electric and LDC needs. Now, from a timeline perspective that's obviously we're kind of back to the drawing board on going back to the local distribution companies, so that's going to take a little bit more time. Probably makes this into a 2019 effort when we reformulate it. There's one other avenue which -- there's probably a couple other avenues. But the other logical one is to do something legislatively. And -- the Massachusetts legislature does reconvene early next year, and we may contemplate trying to throw something in there. Because overall – and this is part of the frustration – we're supportive of this; the overall governors in the region are supportive of it; there have just been some adverse rulings that have set us back a bit.

Yes, yes. I appreciate the update. And then if I could shift to NEXUS (29:27) contract. Where do you guys stand out from a capacity commitment perspective? And from an interconnect perspective, I know that – I think that had grown from 1.4 Bcf a day to almost 1.8 Bcf a day. Has anything changed there?

Yes, that's about right. So we're a little over 60% subscribed now with the new Dominion contract, and I think that Dominion contract kind of reaffirms – it was one of the interconnects we talked about – that 1.8 Bcf, we're still around that same number. One piece of good news I'd say is that a lot of the producers are taking note of that, and they are re-engaging and trying to figure out how they can serve some of that load in Ohio.

Okay. Go ahead, Bill; sorry.

I think the other thing is – just the other thing, Darren, is just the Michigan PSC being supportive of DTE's contracts as well. That's been an important development. So you now have the distribution companies fully approved, if you will, for their contracts when you throw in Enbridge's and Union's as well.

So with all that being said, Greg, when you guys think about marketed pipe out in the northwest side of that basin, and more and more companies taking notice of what Colombia did and what's happened, has anything changed in terms of the magnitude or timing of supply push out of that side of the basin into the markets that are willing to accept it?

No, I wouldn't say so. And remember, there's not any difference on the supply push side, although as you know there's a great desire to get as much supply to market as possible. This is still very much a demand-pull type, which is unique from a lot of others, right? So I think just as we've seen in the last 18 months that has not changed, demand-pull, people getting access to relatively cheap source of energy – except for those people in New England. That's the real driver out of the whole Marcellus and Utica region. Bill, I don't know if you'd add to that?

Yes, just the only thing I'd add is that it probably gives us more confidence, the interest we're seeing from the producers and some of the – if we do have open capacity when we go into service late 2017, filling that up at some rate. Because the production is there and the interest is there, I think we're feeling pretty good about that.

You know, the other thing, Darren, that you've probably noted was DTE; I don't know if you cover them. But DTE bought some gathering assets and gas assets in the region. It's those types of, shall we say, interconnections between the various partners in this project with the demand side, I also think, gives us a lot more confidence. So this is -- as we've said from the get-go, this project will be great to get into service late next year.

Thank you very much, guys, and I appreciate it.

Thanks, Darren.

And your next question comes from the line of Brian Gamble with Simmons & Company. Your line is open.

Good morning, team.

Good morning.

Maybe another follow up on Access. Bill, if you do shift more to the LDC focus, obviously you have to start over in some respects. Does it eliminate some of the parties that are causing you headache now? Or do they still have an avenue into that type of trajectory from a project standpoint?

Yes, I think the trick here is to, as we add LDCs in certain states, is to make sure that we're balancing the equation so that every state feels as though they are paying their fair share. I think that's important to the governors. That's important to the project. So there's a bit of a balancing act. I kind of hoped that the partnership would have come out with a specific project at this point, but as you can probably appreciate, it's going to take a little time to work our way through that.

Great. And I guess further on that, if we do make that shift, what are kind of the first couple steppingstones that we would be looking to hit on that path?

Yeah, I'd say either later this year or early next year you could see an announcement of some kind as to what contracts we're either negotiating or have negotiated. The discussions have been good. I think overall everyone knows that there's a need that needs to be met. There have been some projects into the area that haven't materialized, and that's left behind some residual demand. That's another sort of good part of this is that, once we do have a project, having demand pull generally helps in the atmosphere that we're in with protests or those that don't want us to succeed, so I'd say early next year, maybe late this year, you can look for some sort of direction towards contracting.

Great. Then maybe a follow-up on the C-Corps combination, and I'll try to stick to Julie's fairway here with the question. I guess in regards to looking at the combination from an HSR approval standpoint in the U.S. and a Canadian Competition Bureau approval in Canada, has there been anything that has changed from a asset overlap standpoint that needs to be addressed to get those approvals to completion? I guess anything new or anything that they had previously thought was going to be an issue that now is an issue that we need to have dealt with before that gets concluded?

No. I would say -- well, first of all, we've only put our filings in, and the initial 30-day window for feedback doesn't end until today or tomorrow. So from our perspective, nothing's changed. But obviously we haven't heard back from the regulatory authorities. So when we do, then we'll look at that. But as we said from the get-go, there's very little overlap from assets and we're not aware of anything that would have changed either from our perspective or Enbridge's perspective.

Great. I didn't mean to imply that there was. I just wanted to make sure we were still on a path. Seems rather conclusive to me, but...

Yeah.

...you never know what regulators are going to say, right?

Indeed.

Anyway. Well, I appreciate the color, guys. That's all I had.

Thank you.

Your next question comes from the line of Jean Ann Salisbury with Bernstein. Your line is open.

Hi, guys, just a couple on your projects. So, on NEXUS, have a good sense of the FERC approval timeline and process; but can you just remind us of the process and timing of the state-issued permits that you need, and maybe any potential issues that you foresee here?

So, most of this will be wrapped up by the end of this year. You know, once we get the FERC certificate late in -- late this year is what we're expecting, maybe early next year – first quarter, I believe. Certain state permits will necessarily follow that. So the hope is to get a notice to proceed by mid first quarter, and have all permits done by then. We have to get certain construction moving in March to get through the bat tree clearings (37:08), which we don't have a lot of, but we've got some that we want to get done before April 1. And then we're on to the rest of the construction. So I would say FERC and state permits all coming in roughly the same time in that January/February timeframe.

Got it. And on the construction before April 1, if, for whatever reason, it ends up taking a few more weeks, then how much does that push back the timing?

Yes, luckily we don't have a ton of tree clearing where the bat habitats are.

Yeah.

But if we, for whatever reason, can't get it finished, we'd probably come back in the October timeframe or whenever we're allowed back in. And then it would be in service shortly after that.

Okay, thanks. Then as a follow-up, if Dakota Access comes online next year, it seems like it could create significant volume pressure on Platte. Is that fair? And is that in your outlook?

Yeah, we've obviously given that thought. As you know, we're also out -- as we mentioned on the call, out on an open season on Platte. And we think that that's a way to fill in part of that, should that occur. Of course, Platte is a relatively small element of the overall Express Platte entity. I think about 80% come from the Express side, which are under long-term contracts. So I think they average around nine years. But yeah, that's like any new pipe in any region always has some – has some risk to it I guess. But I think we've taken that into account, A, and, B, we'll see how this open season goes. That's a good opportunity to fill in or expand, as the case may be, depending on the results from that open season.

Cool. Thank you. That's all for me.

Thanks.

Your next question comes from the line of Brandon Blossman with Tudor, Pickering, Holt & Company. Your line is open.

Good morning, everyone.

Hi, Brandon. Good morning.

Let's see; a couple quick ones. Valley Crossing financing, has the decision been made there as to what entity will raise capital for that?

Well, at this point in time, we'll raise the capital at Spectra Energy. Several reasons for that. One, it just hasn't got too far along at this point in time. But two, as you might recall with the extension of bonus depreciation, the tax benefits for us to do that at the corporate level at this point in time make all the sense in the world. That being said, I wouldn't be surprised that over time you would find itself down into the MLP, and I think that would be positive for investors, assuming that investors are looking for continued growth at SEP, which I hope they are. So at this point in time, we'll finance it at the corporate level. But again, don't be surprised to see it move over time once it's completed.

All right; perfect. Makes sense and very helpful. Sabal Trail construction starting here; it sounds like on time. Is that correct? And then a follow-up on that; is there any concern or interaction with just being able to get that gas off of Transco?

Yeah. Construction is proceeding nicely, as we would expect, both from clearing, multiple spreads, et cetera. So see no issues at this time on that front. And as far as we are aware, don't see any issues with Transco's element of that, if you will, the upstream element of that. As you know, they are building along and making changes along existing right-of-way and assets, so full steam ahead.

All right, great. That's all I need. Thank you very much.

Thank you.

Your next question comes from the line of Nick Raza, Citi. Your line is open.

Thank you. Good morning, guys. Just a quick couple of questions, follow-up questions on NEXUS. Specifically, there was a notice from the FWS, or the U.S. Fishery and Wildlife Service, saying that they would provide a biological opinion by March of 2017. Does that in any way impact the timeline of the final EIS issuance?

No. That's – that's not that unusual. And again, that report won't hold up the actual FERC certificate, either. So I saw the posting as well where we're aware of it we did get a few questions on that, but not that unusual, A; and will not hold up the FERC certificate.

Great, great. And then, if for instance or for any reason the certificate is delayed by say a month or two and you have to move the construction timeline a little bit as well, is there an issue that we should be worried about? Like the construction moving into winter and you having difficulties just digging up the ground, et cetera.

No. I mean we're used to working in -- as you can imagine, with our assets all over North America -- rain, fog, sleet, snow. We work through it. So it's not a construction issue at all. It's just making sure you can get the clearings done in advance and then you can build all year round from a weather perspective. It's really just about making sure you've got the permits and you're hitting the windows, for example, on the bat issue.

Fair enough. And then I guess the last question that I'll ask is relating to the concern that the Dawn market could just be flooded with a lot of gas once Rover and NEXUS come online; and obviously TransCanada announced that they are trying to incentivize more volumes on their mainline. Any thoughts on that?

Well, on the former question, I'd say there's always -- that's one of the great challenges with pipelines. People build pipelines to go to markets where they can get a better price for their product; and inevitably when you build the pipeline it does -- it can reduce the basis and lower that price. But I think producers take that into account, A. B, remember there's the other end of the pipe, the demand side of the pipe. And those folks like that, and obviously that's good for additional demand, so it does settle out. On the TransCanada front, I really don't have too much comment about that. I guess we'll have to see. Still believe that we are very competitive. They'll have to obviously get contracts from producers. I don't think they'll get contracts from people in the East demand side, since they already hold contracts. So we'll just have to see how that shakes out, but really don't see that as a competitive threat to NEXUS.

Fair enough. That's all I had, guys. Thanks.

Thank you.

Your next question comes from the line of Kristina Kazarian with Deutsche Bank. Your line is open.

Good morning guys.

Good morning, Kristina.

A quick question on AIM. I know the release talked about how we're still expecting in-service on time. Can you just give me an update, though, and remind me where I stand around -- I think that was on hold around the Hudson River portion, and if there is any update I should be thinking about there?

Sure, it's Bill. So yeah, so we're in service with about a little over 70% of the capacity today, and we expect the drill to be completed in the coming weeks. And will be in full service mid-December, end of the year.

Okay, thanks. Then just a bigger – digging into a bigger-picture topic as well, I know you guys talked about a lot of projects, and increased regulatory challenges that we see in the press. Can you guys just touch on general thoughts on maybe big-picture how you guys are going to handle these issues as they seem to be coming up more and more often on a go-forward basis?

Yes. You know, I'll tell you this: This is a competitive advantage for us, and I'm not sure I'm keen on disclosing our entire playbook, but I think we've got a long history of being on the ground early and being on the ground for decades which -- even if we may not have something going on in a region at the time, really leads to an advantage down the road when you do have projects. That's one. Two, as you well know and I think you've seen some others follow us in this regard, the partnerships have been extremely valuable to us, whether it's the partnerships with the NextEras and Dukes of the world in the southeast, or whether it's the Eversource and Grids and ConEd et cetera. Those have been extremely helpful, obviously; DTE and Enbridge distribution on the NEXUS front, as well as our Union folks. And then the other thing that I think is really important that we're looking at and I would say spending more time with the powers that be in understanding is just the demand pull side of this. And how much that industry, consumers, poverty groups are interested in lowering the cost of energy for people who, through no fault of their own, find themselves disadvantaged in the region for economic growth and well being because of infrastructure. I think that story is starting to gain traction. At 2% or less growth in the United States on a GDP front, you've got to find some way to provide a little relief to consumers. So I think that story is fronting with our partners and the long-term involvement there. That's going to continue. We work that harder and harder every year, Kristina, and I think we will continue to do so. And that creates a lot of success for us.

Perfect. Thanks, guys.

There are no further questions at this time. I will turn the call back over to the presenters.

Thank you, Krista, and thanks, everyone, for joining us today on the call. As always, if you have any additional questions, please feel free to give Roni Cappadonna or me a call. Have a great and safe day. Thanks.

Thank you.

This concludes today's conference call. You may go ahead now and disconnect.