Analyzing Enbridge Energy Partners’ Contract Structures



Stable cash flows

Enbridge Energy Partners’ (EEP) Liquids pipeline business generates more than 90% of its distributable cash flow. The Liquids segment’s cost-of-service contracts account for half of EEP’s 2016 estimated EBITDA (earnings before interest, tax, depreciation, and amortization).

Fee-based contracts account for the remaining chunk of EEP’s EBITDA. The commodity-sensitive contracts of EEP’s Natural Gas segment account for a minuscule part of EEP’s EBITDA. The graph above depicts contributions from different contract structures to EEP’s earnings.

Next, let’s look at the remaining contract life of Enbridge Energy Partners’ Liquids segment’s contracts.

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