Business Segments

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Business Segment Data

Business Segments

We manage our business in four reportable segments: Spectra Energy Partners, Distribution, Western Canada Transmission & Processing and Field Services. The remainder of our business operations is presented as “Other,” and consists of unallocated corporate costs and employee benefit plan assets and liabilities, 100%-owned captive insurance subsidiaries and other miscellaneous activities.

Our chief operating decision maker (CODM) regularly reviews financial information about each of these segments in deciding how to allocate resources and evaluate performance. There is no aggregation within our reportable business segments.

Spectra Energy’s presentation of its Spectra Energy Partners segment is reflective of the parent-level focus by our CODM, considering the resource allocation and governance provisions associated with SEP’s master limited partnership structure. SEP maintains a capital and cash management structure that is separate from Spectra Energy’s, is self-funding and maintains its own lines of bank credit and cash management accounts. From a Spectra Energy perspective, our CODM evaluates the Spectra Energy Partners segment as a whole, without regard to any of SEP’s individual businesses.

Spectra Energy Partners provides transmission, storage and gathering of natural gas, as well as the transportation of crude oil through interstate pipeline systems for customers in various regions of the midwestern, northeastern and southern U.S. and Canada. The natural gas transmission and storage operations are primarily subject to the rules and regulations of the Federal Energy Regulatory Commission (FERC). The crude oil transportation operations are primarily subject to regulation by the FERC in the U.S. and the National Energy Board (NEB) in Canada. Our Spectra Energy Partners segment is composed of the operations of SEP, less governance costs, which are included in “Other.”

Distribution provides retail natural gas distribution service in Ontario, Canada, as well as natural gas transmission and storage services to other utilities and energy market participants. These services are provided by Union Gas Limited (Union Gas), and are primarily subject to the rules and regulations of the Ontario Energy Board (OEB).

Western Canada Transmission & Processing provides transmission of natural gas and natural gas gathering and processing services to customers in western Canada, the northern tier of the U.S. and the Maritime Provinces in Canada. This segment conducts business mostly through BC Pipeline, BC Field Services, Canadian Midstream and Maritimes & Northeast Pipeline Limited Partnership (M&N Canada). BC Pipeline, BC Field Services and M&N Canada operations are primarily subject to the rules and regulations of the NEB. See Note 2 for discussion related to the sale of Empress on August 4, 2016.

Field Services gathers, compresses, treats, processes, transports, stores and sells natural gas, produces, fractionates, transports, stores and sells NGLs, recovers and sells condensate, and trades and markets natural gas and NGLs. It conducts operations through DCP Midstream, which is owned 50% by us and 50% by Phillips 66. DCP Midstream gathers raw natural gas through gathering systems connecting to several interstate and intrastate natural gas and NGL pipeline systems, one natural gas storage facility and one NGL storage facility. DCP Midstream operates in a diverse number of regions, including the Permian Basin, Eagle Ford, Niobrara/DJ Basin and the Midcontinent. DCP Midstream Partners, LP (DCP Partners) is a publicly traded master limited partnership, of which DCP Midstream acts as general partner. As of September 30, 2016, DCP Midstream had an approximate 21% ownership interest in DCP Partners, including DCP Midstream’s limited partner and general partner interests.

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 short-term investments are managed at the parent-company levels, so the associated gains and losses from foreign currency transactions 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. Transactions between reportable segments are accounted for on the same basis as transactions with unaffiliated third parties.

Business Segment Data

Condensed Consolidated Statements of Operations
	Unaffiliated Revenues		Intersegment Revenues			Total Operating Revenues			Depreciation and Amortization		Segment EBITDA/ Consolidated Earnings before Income Taxes
	(in millions)
Three Months Ended September 30, 2016
Spectra Energy Partners	$	628	$	—		$	628		$	79	$	464
Distribution	209		—			209			47		77
Western Canada Transmission & Processing	236		—			236			56		93
Field Services	—		—			—			—		12
Total reportable segments	1,073		—			1,073			182		646
Other	2		16			18			11		(30		)
Eliminations	—		(16		)	(16		)	—		—
Depreciation and amortization	—		—			—			—		193
Interest expense	—		—			—			—		133
Interest income and other (a)	—		—			—			—		1
Total consolidated	$	1,075	$	—		$	1,075		$	193	$	291
Three Months Ended September 30, 2015
Spectra Energy Partners	$	612	$	—		$	612		$	74	$	488
Distribution	209		—			209			43		70
Western Canada Transmission & Processing	279		9			288			59		117
Field Services	—		—			—			—		(3		)
Total reportable segments	1,100		9			1,109			176		672
Other	3		16			19			12		(12		)
Eliminations	—		(25		)	(25		)	—		—
Depreciation and amortization	—		—			—			—		188
Interest expense	—		—			—			—		155
Interest income and other (a)	—		—			—			—		(4		)
Total consolidated	$	1,103	$	—		$	1,103		$	188	$	313
Nine Months Ended September 30, 2016
Spectra Energy Partners	$	1,870	$	—		$	1,870		$	234	$	1,408
Distribution	958		—			958			138		351
Western Canada Transmission & Processing	784		15			799			173		313
Field Services	—		—			—			—		1
Total reportable segments	3,612		15			3,627			545		2,073
Other	6		48			54			37		(85		)
Eliminations	—		(63		)	(63		)	—		—
Depreciation and amortization	—		—			—			—		582
Interest expense	—		—			—			—		437
Interest income and other (a)	—		—			—			—		3
Total consolidated	$	3,618	$	—		$	3,618		$	582	$	972
Nine Months Ended September 30, 2015
Spectra Energy Partners	$	1,821	$	—		$	1,821		$	220	$	1,421
Distribution	1,161		—			1,161			133		360
Western Canada Transmission & Processing	929		33			962			184		382
Field Services	—		—			—			—		(253		)
Total reportable segments	3,911		33			3,944			537		1,910
Other	7		47			54			37		(39		)
Eliminations	—		(80		)	(80		)	—		—
Depreciation and amortization	—		—			—			—		574
Interest expense	—		—			—			—		480
Interest income and other (a)	—		—			—			—		(5		)
Total consolidated	$	3,918	$	—		$	3,918		$	574	$	812

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(a) Includes foreign currency transaction gains and losses related to segment EBITDA.