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SUBSEQUENT EVENTS
6 Months Ended
Jun. 30, 2015
SUBSEQUENT EVENTS [Abstract]  
SUBSEQUENT EVENTS

18. SUBSEQUENT EVENTS

 

Distribution to Partners

 

On July 30, 2015, the board of directors of Enbridge Management declared a distribution payable to our partners on August 14, 2015. The distribution will be paid to unitholders of record as of August 7, 2015 of our available cash of $257.9 million at June 30, 2015, or $0.5830 per limited partner unit. Of this distribution, $216.1 million will be paid in cash, $41.0 million will be distributed in i-units to our i-unitholder, Enbridge Management, and due to the i-unit distribution, $0.8 million will be retained from our General Partner from amounts otherwise distributable to it in respect of its general partner interest and limited partner interest to maintain its 2% general partner interest.

 

Amendment of OLP Limited Partnership Agreement

 

Portions of the Eastern Access and Mainline Expansion capital programs have assets that have been placed into service, which generate distributable cash flow, and assets that are still under construction, which require capital funding. These assets are held, respectively, within the Series EA and Series ME of the OLP, which are jointly funded by our General Partner at 75% and by us at 25% under joint funding arrangements. As such, each quarter we and our General Partner receive a distribution for the assets in-service and provide required capital funding contribution requirements for assets under construction in proportion to their respective Series' ownership interests.

 

On July 30, 2015, the partners amended and restated the limited partnership agreement of the OLP pursuant to which our General Partner will temporarily forego Series EA and ME distributions commencing in the quarter ended June 30, 2015 through the quarter ending March 31, 2016. The General Partner's capital funding contribution requirements for each of those two Series, commencing in August 2015, will be reduced by the amount of its foregone cash distributions from the respective Series, until the earlier of December 31, 2016 and the date aggregate reductions in capital contributions for such Series are equal to the foregone cash distributions for such Series. To the extent that the General Partner's portion of capital contributions prior to December 31, 2016 are insufficient to cover the General Partner's foregone cash distributions for a Series, beginning with the distribution related to the first quarter of 2017 for that Series, we will receive reduced cash distributions by up to 50%, and the General Partner will receive a comparable increase in cash distributions each quarter until the General Partner has received an aggregate amount of contribution reductions and distribution increases equal to the amount of foregone cash distributions.

 

Distribution to Series EA Interests

 

On July 30, 2015, the board of directors of Enbridge Management, acting on behalf of Enbridge Pipelines (Lakehead) L.L.C., the managing general partner of the OLP and a holder of the Series EA interests, declared a distribution payable to the holders of the Series EA general and limited partner interests. The OLP will pay the entire distribution of $56.5 million to us.

 

Distribution to Series ME Interests

 

On July 30, 2015, the board of directors of Enbridge Management, acting on behalf of Enbridge Pipelines (Lakehead) L.L.C., the managing general partner of the OLP and a holder of the Series ME interests, declared a distribution payable to the holders of the Series ME general and limited partner interests. The OLP will pay the entire distribution of $14.8 million to us.

 

Series 1 Preferred Unit Amended Agreement

 

On July 30, 2015, we amended our limited partnership agreement to extend the payment deferral of for distributions accruing for the Series 1 Preferred Units through June 30, 2018, and to allow repayment of the accumulated deferral amount in equal amounts over a twelve-quarter period beginning the quarter ending March 31, 2019. In addition, the amendment extends the current preferred distribution accrual rate until June 30, 2020, and extends the date upon which the Series 1 Preferred Units become convertible into Class A common units to June 30, 2018.

 

Distribution from MEP

 

On July 29, 2015, the board of directors of Midcoast Holdings, L.L.C., acting in its capacity as the general partner of MEP, declared a cash distribution payable to MEP's partners on August 14, 2015. The distribution will be paid to unitholders of record as of August 7, 2015, of MEP's available cash of $16.3 million at June 30, 2015, or $0.3525 per limited partner unit. MEP will pay $7.5 million to their public Class A common unitholders, while $8.8 million in the aggregate will be paid to us with respect to our Class A common units, our subordinated units, and to Midcoast Holdings, L.L.C. with respect to its general partner interest.

 

Midcoast Operating Distribution

 

On July 29, 2015, the general partner of Midcoast Operating declared a cash distribution by Midcoast Operating payable to its partners of record as of August 7, 2015. Midcoast Operating will pay $26.2 million to us and $27.9 million to MEP.

 

On July 29, 2015, the partners of Midcoast Operating approved an amendment to Midcoast Operating's limited partnership agreement that would potentially enhance MEP's distributable cash flow, demonstrating our further support of MEP's ongoing cash distribution strategy and growth outlook. The amendment will provide a mechanism for MEP to receive increased quarterly distributions from Midcoast Operating and for us to receive reduced quarterly distributions if MEP's declared distribution exceeds its distributable cash, as that term is defined in Midcoast Operating's limited partnership agreement. Midcoast Operating's adjustment of our distribution will be limited by our pro rata share of the Midcoast Operating quarterly cash distribution and a maximum of $0.005 per unit quarterly distribution increase by MEP. There is no requirement for MEP to compensate us for these adjusted distributions, except for settling the Partnership's capital accounts in a liquidation scenario. The amendment to the limited partnership agreement and the support it provides to MEP's cash distribution is effective with the quarter ended June 30, 2015, and continues through and including the distribution made for the quarter ending December 31, 2017. For the second quarter of 2015, MEP did not receive an increased allocation of cash distributions from the Midcoast Operating as distributable cash flow generated in the second quarter exceeded the cash distribution amount declared for payout by MEP.