Spectra Energy Partners reported fourth quarter 2011 net income of $42.0 million, compared with $37.2 million in the prior year quarter.

For the year, net income was up almost $25 million over 2010 with net income reported at $172.0 million, compared with $147.9 million in 2010. Cash available for distribution was $38.0 million for the quarter, compared with $35.0 million in the prior year quarter. For the year, cash available for distribution was $212.4 million, up 22 percent from $174.5 million in 2010. Distributions per limited partner unit for 2011 were $1.87, compared with $1.74 per limited partner unit for 2010, up 7.5 percent.

The increase in net income and cash available for distribution reflects the acquisitions of an additional 24.5 percent interest in Gulfstream on November 30, 2010 and the Big Sandy Pipeline on July 1, 2011. The results also include East Tennessee's Northeastern Tennessee (NET) project coming online September 1, 2011. These increases were partially offset by lower revenues at Ozark.

"I'm pleased to report that 2011 was another solid year for Spectra Energy Partners," said Julie Dill, president and chief executive officer. "With the acquisition of Big Sandy Pipeline, organic growth projects placed into service, achievement of investment grade ratings, and our seventeenth consecutive quarterly distribution increase, SEP continued its record of delivering value to its unitholders."

"As we enter 2012, Spectra Energy Partners will continue its focus as a growth-oriented MLP," Dill continued. "We'll continue to execute a consistent, balanced growth strategy, where strategic acquisitions and organic growth are priorities."

Results from Operations

Spectra Energy Partners reported operating income of $24.6 million for the fourth quarter 2011, compared with $18.5 million in the prior year quarter. Earnings from the Big Sandy acquisition and the East Tennessee NET expansion were partially offset by lower revenues at Ozark.

Equity Investment in Gulfstream Natural Gas System, L.L.C. (Gulfstream)

Spectra Energy Partners recognized $16.3 million of equity earnings from its 49 percent interest in Gulfstream in the fourth quarter 2011, compared with $11.8 million in the prior year quarter. Equity earnings from Gulfstream for 2011 totaled $64.7 million compared with $35.5 million for 2010. The growth for the quarter and year reflects SEP's increased ownership interest in Gulfstream.

For the fourth quarter 2011, Spectra Energy Partners' share of Gulfstream's cash available for distribution was $11.4 million, compared to $8.7 million in the same period of 2010. Spectra Energy Partners' share of Gulfstream's cash available for distribution was $81.0 million for the full year 2011, compared with $43.0 million for 2010.

Equity Investment in Market Hub Partners (MHP)

Spectra Energy Partners recognized $9.1 million of equity earnings from its 50 percent interest in MHP during the fourth quarter 2011. MHP delivered steady results for the quarter when compared with the prior year quarter. Equity earnings from MHP for 2011 totaled $42.6 million, compared with $39.6 million in 2010.

For the quarter, Spectra Energy Partners' share of MHP's cash available for distribution was $9.5 million, compared to $10.9 million in the fourth quarter 2010. Spectra Energy Partners' share of MHP's cash available for distribution was $46.0 million for the full year 2011, compared with $45.6 million for 2010.

Interest Expense

Interest expense for the quarter was $7.8 million, compared to $4.0 million for the prior year due to $500 million of senior notes issued in June 2011.

Income Tax Expense

As a master limited partnership, Spectra Energy Partners is not subject to federal income taxes, but is subject to state income taxes. An income tax expense of $0.3 million was reported for the fourth quarter 2011, compared to a $1.2 million tax benefit in the prior year quarter.

Capital Expenditures and Equity Investments

Spectra Energy Partners spent $20.4 million for expansion and maintenance capital in the Gas Transportation and Storage segment during the quarter and $98.4 million for the year. Investments were made in Gulfstream of $3.8 million for the year and in MHP for $1.8 million for the quarter and $13.5 million for the year.

2012 Financial Outlook

Spectra Energy Partners also announced its 2012 financial outlook, which includes estimated cash available for distribution of $222 million. Estimated capital expenditures for 2012 of $30 million are for the final completion of projects placed into commercial service in 2011.

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