Enbridge Energy Management L L C (EEQ) 10-Q 10 May 17 2017 Q1 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 08, 2017
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Entity Registrant Name	ENBRIDGE ENERGY MANAGEMENT L L C
Entity Central Index Key	1,173,911
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Trading Symbol	EEQ
Entity Common Stock, Shares Outstanding		83,983,811

STATEMENTS OF INCOME

STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Equity loss from investment in Enbridge Energy Partners, L.P. (Note 1)		$ (2.5)	$ (116.2)
Loss before income tax benefit		(2.5)	(116.2)
Income tax benefit (Note 3)	[1]	0.8	0
Net loss		$ (1.7)	$ (116.2)
Net loss per share, (basic and diluted) (in dollars per share)		$ (0.02)	$ (1.56)
Weighted average shares outstanding (in shares)		82.9	74.7
[1]	Amortization of accumulated other comprehensive income into earnings is recorded before tax to recognize the related tax benefit. Recognition of the tax benefit in earnings does not impact the balance of the deferred tax asset and associated full valuation allowance, which were previously recorded when the losses were reflected in Other Comprehensive Income.

STATEMENTS OF COMPREHENSIVE INC

STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Net loss	$ (1.7)	$ (116.2)
Equity in other comprehensive income (loss) of Enbridge Energy Partners, L.P., net of tax benefit of $0.8 million and $0.0 million, respectively	1.7	(16.4)
Comprehensive loss	$ 0	$ (132.6)

STATEMENTS OF COMPREHENSIVE IN4

STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Other comprehensive income (loss), tax expense (benefit)	$ 0.8	$ 0

STATEMENTS OF CASH FLOWS

STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash provided by operating activities:
Net loss	$ (1.7)	$ (116.2)
Adjustments to reconcile net loss to net cash in operating activities:
Equity loss from investment in Enbridge Energy Partners, L.P.	2.5	116.2
Changes in operating assets and liabilities:
Deferred income taxes	(0.8)	0
Other	0	(0.1)
Net cash used in operating activities	0	(0.1)
Cash used in investing activities:
Net cash used in investing activities	0	0
Cash provided by financing activities:
Net cash provided by financing activities	0	0
Net decrease in cash and cash equivalents	0	(0.1)
Cash and cash equivalents at beginning of year	0.8	0.8
Cash and cash equivalents at end of period	$ 0.8	$ 0.7

STATEMENTS OF FINANCIAL POSITIO

STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
ASSETS
Cash	$ 0.8	$ 0.8
Assets, Total	0.8	0.8
LIABILITIES AND SHAREHOLDERS' EQUITY
Commitments and contingencies
Shareholders' equity (Note 2)
Voting shares-unlimited authorized; 6.33 and 6.17 issued and outstanding at March 31, 2017 and December 31, 2016, respectively	0	0
Listed shares-unlimited authorized; 83,983,811 and 81,857,162 issued and outstanding at March 31, 2017 and December 31, 2016, respectively	1,670.6	1,622.9
Accumulated deficit	(1,615)	(1,565.6)
Accumulated other comprehensive loss	(54.8)	(56.5)
Total shareholders' equity	0.8	0.8
Total liabilities and stockholders' equity	$ 0.8	$ 0.8

STATEMENTS OF FINANCIAL POSITI7

STATEMENTS OF FINANCIAL POSITION (Parenthetical) - shares	Mar. 31, 2017	Dec. 31, 2016
Voting Shares [Member]
Issued (in shares)	6.33	6.17
Outstanding (in shares)	6.33	6.17
Listed Shares [Member]
Issued (in shares)	83,983,811	81,857,162
Outstanding (in shares)	83,983,811	81,857,162

BASIS OF PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION	1. BASIS OF PRESENTATION We are a limited partner of Enbridge Energy Partners, L.P., which we refer to as the Partnership, through our ownership of i-units, a special class of the Partnership’s limited partner interests. Under a delegation of control agreement among us, the Partnership and its general partner, Enbridge Energy Company, Inc., referred to as the General Partner, we manage the Partnership’s business and affairs. The General Partner is an indirect, wholly-owned subsidiary of Enbridge Inc., an energy company based in Calgary, Alberta, Canada that we refer to herein as Enbridge. We have prepared the accompanying unaudited interim financial statements in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, they contain all adjustments, consisting only of normal recurring adjustments, which management considers necessary to present fairly our financial position at March 31, 2017, our results of operations for the three months ended March 31, 2017 and 2016 and our cash flows for the three months ended March 31, 2017 and 2016. We derived our statements of financial position as of December 31, 2016 from the audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016. Our results of operations for the three months ended March 31, 2017 and 2016 should not be taken as indicative of the results to be expected for the full year. The unaudited interim financial statements should be read in conjunction with our financial statements and notes thereto presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016. Our results of operations, financial position and cash flows are dependent on the results of operations, financial position and cash flows of the Partnership. As a result, these unaudited interim financial statements should be read in conjunction with the Partnership’s audited consolidated financial statements and notes thereto presented in its Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as well as the Partnership’s unaudited interim consolidated financial statements presented in its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2017. Partnership Incentive and Other Distributions The Partnership Agreement does not permit capital deficits to accumulate in the capital account of any limited partner and thus requires that such capital account deficits are brought to zero, or “cured,” by additional allocations from the positive capital accounts of the common units, i-units, and General Partner, generally on a pro-rata basis. Until we discontinued equity accounting for our investment in the Partnership on March 31, 2016, our equity income from the Partnership was reduced for our pro-rata share of such reallocations needed to cure the capital account deficits of the Class A and Class B common units. During the first quarter of 2016, our share of losses in the Partnership, driven primarily from curing losses, exceeded the carrying amount of our investment in the Partnership. As a result, we ceased recognition of our equity interest in the earnings of the Partnership when the carrying amount of our investment was reduced to zero. We do not recognize additional losses as we are not obligated to provide further financial support to the Partnership. Further, our accumulated other comprehensive income is comprised of our historical interest in the Partnership’s other comprehensive income, which is based primarily on the effective mark-to-market changes in the Partnership’s underlying cash flow hedge contracts. We amortize into earnings the accumulated other comprehensive loss as of March 31, 2016, on a straight-line basis over the remaining term of the Partnership’s underlying hedge contracts.

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY	3 Months Ended
	Mar. 31, 2017
Stockholders' Equity Note [Abstract]
SHAREHOLDERS' EQUITY	2. SHAREHOLDERS’ EQUITY For the three months 2017 2016 (in millions) Listed Shares: Beginning balance $ 1,622.9 $ 1,443.8 Share distributions 47.7 42.7 Ending balance $ 1,670.6 $ 1,486.5 Accumulated deficit: Beginning balance $ (1,565.6 ) $ (1,266.4 ) Net loss (1.7 ) (116.2 ) Share distributions (47.7 ) (42.7 ) Ending balance $ (1,615.0 ) $ (1,425.3 ) Accumulated other comprehensive loss: Beginning balance $ (56.5 ) $ (44.1 ) Equity in other comprehensive income (loss) of the Partnership 1.7 (16.4 ) Ending balance $ (54.8 ) $ (60.5 ) Total Shareholders’ equity $ 0.8 $ 0.7 Share Distributions The following table sets forth the details regarding our share distributions, as approved by our board of directors, for the three months ended March 31, 2017: Distribution Record Date Distribution Distribution Average Additional Listed Shares January 26, 2017 February 7, 2017 February 14, 2017 $ 0.5830 $ 22.44 2,126,649 1,878,115 248,534 We had non-cash operating activities in the form of i-units distributed to us by the Partnership and corresponding non-cash financing activities in the form of share distributions to our shareholders in the amounts of $47.7 million and $42.7 million during the three months ended March 31, 2017 and 2016, respectively.

INCOME TAXES

INCOME TAXES	3 Months Ended
	Mar. 31, 2017
Income Tax Disclosure [Abstract]
INCOME TAXES	3. INCOME TAXES The terms of the i-units provide that the units owned by us will not be allocated income, gain, loss or deductions of the Partnership for tax purposes until such time that we dispose of our investment in the Partnership. As a result, actual realization of any long-term deferred income tax asset or liability would only occur upon liquidation of our investment in the Partnership. Based on the estimates of our future operating income included in our forecasts, including curing impacts, we have concluded that it is not more likely than not that our deferred tax assets will be realized. As a result, we continue to maintain a full valuation allowance on those tax assets as of March 31, 2017. For the three months ended March 31, 2017 2016 (unaudited; in millions except for tax rate amounts) Loss before income tax benefit $ (2.5 ) $ (116.2 ) Income tax benefit 0.8 43.4 Valuation allowance — (43.4 ) Total income tax benefit (1) $ 0.8 $ — Effective income tax rate 30.8 % — % (1) Amortization of accumulated other comprehensive income into earnings is recorded before tax to recognize the related tax benefit. Recognition of the tax benefit in earnings does not impact the balance of the deferred tax asset and associated full valuation allowance, which were previously recorded when the losses were reflected in Other Comprehensive Income.

SUMMARIZED FINANCIAL INFORMATIO

SUMMARIZED FINANCIAL INFORMATION FOR ENBRIDGE ENERGY PARTNERS, L.P.	3 Months Ended
	Mar. 31, 2017
Equity Method Investment, Summarized Financial Information [Abstract]
SUMMARIZED FINANCIAL INFORMATION FOR ENBRIDGE ENERGY PARTNERS, L.P.	4. SUMMARIZED FINANCIAL INFORMATION FOR ENBRIDGE ENERGY PARTNERS, L.P. For the three months 2017 2016 (in millions) Operating revenue $ 1,178.7 $ 1,061.6 Operating expenses 931.4 793.6 Operating income $ 247.3 $ 268.0 Net income $ 157.4 $ 172.4 Less: Net income attributable to: Noncontrolling interest 68.3 68.8 Series 1 preferred unit distributions 22.5 22.5 Accretion of discount on Series 1 preferred units 1.2 1.1 Net income attributable to Enbridge Energy Partners, L.P. $ 65.4 $ 80.0 Less: Net income attributable to the General Partner (1) 11.3 55.9 Net income attributable to common units and i-units (2) $ 54.1 $ 24.1 (1) Net income attributable to the General Partner includes net income attributable to the general partner interest as well as to Class D units, Class E units, and IDUs. (2) The Partnership allocates its net income among the holders of Preferred Units, the General Partner and limited partners first using preferred unit distributions and then the two-class method in accordance with applicable authoritative accounting guidance. Under the two-class method, the Partnership allocates its net income, after noncontrolling interest and preferred unit distributions, to the General Partner and its limited partners, including us, according to the distribution formula for available cash as set forth in the Partnership Agreement. We owned approximately 16.9% and 15.6% of the Partnership at March 31, 2017 and 2016, respectively.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2017
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	5. SUBSEQUENT EVENTS Share Distribution On April 27, 2017, our board of directors declared a share distribution payable on May 15, 2017, to shareholders of record as of May 8, 2017, based on the $0.35 per limited partner unit distribution declared by the Partnership. The Partnership’s distribution increases the number of i-units that we own. The amount of this increase is calculated by dividing the cash amount distributed by the Partnership per common unit by the average closing price of one of our Listed Shares on the New York Stock Exchange for the 10 trading day period immediately preceding the ex-dividend date for our shares, multiplied by the number of shares outstanding on the record date. We distribute additional Listed Shares to our shareholders and additional voting shares to the General Partner in respect of these additional i-units.

SHAREHOLDERS' EQUITY (Tables)

SHAREHOLDERS' EQUITY (Tables)	3 Months Ended
	Mar. 31, 2017
Stockholders' Equity Note [Abstract]
Schedule of Changes in Shareholders' Equity	The following table presents significant changes in Shareholders’ equity during the three months ended March 31, 2017 and 2016. For the three months 2017 2016 (in millions) Listed Shares: Beginning balance $ 1,622.9 $ 1,443.8 Share distributions 47.7 42.7 Ending balance $ 1,670.6 $ 1,486.5 Accumulated deficit: Beginning balance $ (1,565.6 ) $ (1,266.4 ) Net loss (1.7 ) (116.2 ) Share distributions (47.7 ) (42.7 ) Ending balance $ (1,615.0 ) $ (1,425.3 ) Accumulated other comprehensive loss: Beginning balance $ (56.5 ) $ (44.1 ) Equity in other comprehensive income (loss) of the Partnership 1.7 (16.4 ) Ending balance $ (54.8 ) $ (60.5 ) Total Shareholders’ equity $ 0.8 $ 0.7
Schedule of Share Distribution	The following table sets forth the details regarding our share distributions, as approved by our board of directors, for the three months ended March 31, 2017: Distribution Record Date Distribution Distribution Average Additional Listed Shares January 26, 2017 February 7, 2017 February 14, 2017 $ 0.5830 $ 22.44 2,126,649 1,878,115 248,534

INCOME TAXES (Tables)

INCOME TAXES (Tables)	3 Months Ended
	Mar. 31, 2017
Income Tax Disclosure [Abstract]
Schedule of Effective Income Tax Rate Reconciliation	For the three months ended March 31, 2017 2016 (unaudited; in millions except for tax rate amounts) Loss before income tax benefit $ (2.5 ) $ (116.2 ) Income tax benefit 0.8 43.4 Valuation allowance — (43.4 ) Total income tax benefit (1) $ 0.8 $ — Effective income tax rate 30.8 % — % (1) Amortization of accumulated other comprehensive income into earnings is recorded before tax to recognize the related tax benefit. Recognition of the tax benefit in earnings does not impact the balance of the deferred tax asset and associated full valuation allowance, which were previously recorded when the losses were reflected in Other Comprehensive Income.

SUMMARIZED FINANCIAL INFORMAT15

SUMMARIZED FINANCIAL INFORMATION FOR ENBRIDGE ENERGY PARTNERS, L.P. (Tables)	3 Months Ended
	Mar. 31, 2017
Equity Method Investment, Summarized Financial Information [Abstract]
Schedule of Summarized Financial Information for the Partnership	For the three months 2017 2016 (in millions) Operating revenue $ 1,178.7 $ 1,061.6 Operating expenses 931.4 793.6 Operating income $ 247.3 $ 268.0 Net income $ 157.4 $ 172.4 Less: Net income attributable to: Noncontrolling interest 68.3 68.8 Series 1 preferred unit distributions 22.5 22.5 Accretion of discount on Series 1 preferred units 1.2 1.1 Net income attributable to Enbridge Energy Partners, L.P. $ 65.4 $ 80.0 Less: Net income attributable to the General Partner (1) 11.3 55.9 Net income attributable to common units and i-units (2) $ 54.1 $ 24.1 (1) Net income attributable to the General Partner includes net income attributable to the general partner interest as well as to Class D units, Class E units, and IDUs. (2) The Partnership allocates its net income among the holders of Preferred Units, the General Partner and limited partners first using preferred unit distributions and then the two-class method in accordance with applicable authoritative accounting guidance. Under the two-class method, the Partnership allocates its net income, after noncontrolling interest and preferred unit distributions, to the General Partner and its limited partners, including us, according to the distribution formula for available cash as set forth in the Partnership Agreement.

SHAREHOLDERS' EQUITY (Schedule

SHAREHOLDERS' EQUITY (Schedule of Changes in Shareholders' Equity) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Beginning balance	$ 0.8
Net loss	(1.7)	$ (116.2)
Equity in other comprehensive income (loss) of the Partnership	1.7	(16.4)
Ending balance	0.8	0.7
Accumulated Deficit [Member]
Beginning balance	(1,565.6)	(1,266.4)
Net loss	(1.7)	(116.2)
Share distributions	(47.7)	(42.7)
Ending balance	(1,615.1)	(1,425.3)
Accumulated Other Comprehensive Loss [Member]
Beginning balance	(56.5)	(44.1)
Equity in other comprehensive income (loss) of the Partnership	1.7	(16.4)
Ending balance	(54.8)	(60.5)
Listed Shares [Member]
Beginning balance	1,622.9	1,443.8
Share distributions	47.7	42.7
Ending balance	$ 1,670.6	$ 1,486.5

SHAREHOLDERS' EQUITY (Schedul17

SHAREHOLDERS' EQUITY (Schedule of Share Distributions) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Non-cash financing activities	$ 47.7	$ 42.7
First Quarter Distribution [Member]
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Distribution Declaration Date	Jan. 26, 2017
Record Date	Feb. 7, 2017
Distribution Payment Date	Feb. 14, 2017
Distribution per Unit of the Partnership (in dollars per share)	$ 0.5830
Additional i-units owned	2,126,649
First Quarter Distribution [Member] | Public [Member]
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Additional i-units owned	1,878,115
First Quarter Distribution [Member] | General Partner of Enbridge Energy Partners LP [Member]
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Additional i-units owned	248,534
First Quarter Distribution [Member] | Weighted Average [Member]
Distribution Made to Limited Liability Company (LLC) Member [Line Items]
Average Closing Price of the Listed Shares	$ 22.44

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Effective income tax rates we used in computing the income tax provisions:
Loss before income tax benefit		$ 2.5	$ 116.2
Income tax benefit		0.8	43.4
Valuation allowance		0	(43.4)
Total income tax benefit	[1]	$ 0.8	$ 0
Effective income tax rate		30.80%	0.00%
[1]	Amortization of accumulated other comprehensive income into earnings is recorded before tax to recognize the related tax benefit. Recognition of the tax benefit in earnings does not impact the balance of the deferred tax asset and associated full valuation allowance, which were previously recorded when the losses were reflected in Other Comprehensive Income.

SUMMARIZED FINANCIAL INFORMAT19

SUMMARIZED FINANCIAL INFORMATION FOR ENBRIDGE ENERGY PARTNERS, L.P. (Details) - Enbridge Energy Partners LP [Member] - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Operating revenue		$ 1,178.7	$ 1,061.6
Operating expenses		931.4	793.6
Operating income		247.3	268
Net income		157.4	172.4
Less: Net income attributable to Noncontrolling interest		68.3	68.8
Less: Net income attributable to Series 1 preferred unit distributions		22.5	22.5
Less: Net income attributable to Accretion of discount on Series 1 preferred units		1.2	1.1
Net income attributable to Enbridge Energy Partners, L.P.		65.4	80
Less: Net income attributable to the General Partner		11.3	55.9	[1]
Net income attributable to common units and i-units	[2]	$ 54.1	$ 24.1
Percentage of ownership in Partnership		16.90%	15.60%
[1]	Net income attributable to the General Partner includes net income attributable to the general partner interest as well as to Class D units, Class E units, and IDUs.
[2]	The Partnership allocates its net income among the holders of Preferred Units, the General Partner and limited partners first using preferred unit distributions and then the two-class method in accordance with applicable authoritative accounting guidance. Under the two-class method, the Partnership allocates its net income, after noncontrolling interest and preferred unit distributions, to the General Partner and its limited partners, including us, according to the distribution formula for available cash as set forth in the Partnership Agreement.

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - Subsequent Event [Member]	1 Months Ended
	Apr. 27, 2017$ / shares
Subsequent Event [Line Items]
Distribution Declaration Date	Apr. 27, 2017
Distribution Payment Date	May 15, 2017
Record Date	May 8, 2017
Distribution per Unit of the Partnership (in dollars per share)	$ 0.35
Number of trading days	10 days