Enbridge Energy Management L L C (EEQ) 10-Q 2 Nov 17 2017 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Oct. 30, 2017
Document And Entity Information [Abstract]
Entity Registrant Name	ENBRIDGE ENERGY MANAGEMENT L L C
Entity Central Index Key	1,173,911
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Trading Symbol	EEQ
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		87,569,468
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q3

STATEMENTS OF INCOME

STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income Statement [Abstract]
Equity loss from investment in Enbridge Energy Partners, L.P.	$ (2.5)	$ (1.9)	$ (7.5)	$ (120)
Loss before income tax benefit	(2.5)	(1.9)	(7.5)	(120)
Income tax benefit	0.8	0.6	2.4	1.2
Net loss	$ (1.7)	$ (1.3)	$ (5.1)	$ (118.8)
Net loss per share, (basic and diluted) (in dollars per share)	$ (0.02)	$ (0.02)	$ (0.06)	$ (1.54)
Weighted average shares outstanding (in shares)	86.7	79.1	84.8	76.9
Distribution paid per partner unit (in dollars per share)	$ 0.350	$ 0.583	$ 1.283	$ 1.749

STATEMENTS OF COMPREHENSIVE INC

STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Statement of Comprehensive Income [Abstract]
Net loss	$ (1.7)	$ (1.3)	$ (5.1)	$ (118.8)
Equity in other comprehensive income (loss) of Enbridge Energy Partners, L.P., net of tax benefit of $0.8, $0.6, $2.4 and $1.2, respectively	1.7	1.3	5.1	(13.7)
Comprehensive loss	$ 0	$ 0	$ 0	$ (132.5)

STATEMENTS OF COMPREHENSIVE IN4

STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Statement of Comprehensive Income [Abstract]
Other comprehensive income (loss), tax expense (benefit)	$ 0.8	$ 0.6	$ 2.4	$ 1.2

STATEMENTS OF SHAREHOLDERS' EQU

STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Millions	Total	Accumulated deficit [Member]	Accumulated other comprehensive loss [Member]	Listed Shares [Member]
Stock Issued During Period, Value, Stock Dividend				$ 132.5
Beginning balance at Dec. 31, 2015		$ (1,266.4)	$ (44.1)	1,443.8
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	$ (118.8)	(118.8)
Share distributions		(132.5)
Equity in other comprehensive income (loss) of Enbridge Energy Partners, L.P.	(13.7)		(13.7)
Ending balance at Sep. 30, 2016	0.8	(1,517.7)	(57.8)	1,576.3
Stock Issued During Period, Value, Stock Dividend				107.1
Beginning balance at Dec. 31, 2016		(1,565.6)	(56.5)	1,622.9
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(5.1)	(5.1)
Share distributions		(107.1)
Equity in other comprehensive income (loss) of Enbridge Energy Partners, L.P.	5.1		5.1
Ending balance at Sep. 30, 2017	$ 0.8	$ (1,677.8)	$ (51.4)	$ 1,730

STATEMENTS OF CASH FLOWS

STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Operating activities:
Net loss	$ (5.1)	$ (118.8)
Adjustments to reconcile net loss to net cash in operating activities:
Equity loss from investment in Enbridge Energy Partners, L.P.	7.5	120
Deferred income tax benefit	(2.4)	(1.2)
Net cash used in operating activities	0	0
Investing activities:
Net cash used in investing activities	0	0
Financing activities:
Net cash provided by financing activities	0	0
Net change in cash and cash equivalents	0	0
Cash and cash equivalents at beginning of year	0.8	0.8
Cash and cash equivalents at end of period	$ 0.8	$ 0.8

STATEMENTS OF FINANCIAL POSITIO

STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
ASSETS
Cash	$ 0.8	$ 0.8
Investment in Enbridge Energy Partners, L.P.	0	0
Total Assets	0.8	0.8
LIABILITIES AND SHAREHOLDERS’ EQUITY
Commitments and contingencies
Shareholders' equity
Voting shares - unlimited authorized; (6.60 and 6.17 issued and outstanding at September 30, 2017 and December 31, 2016, respectively)	0	0
Listed shares - unlimited authorized; (87,569,468 and 81,857,162 issued and outstanding at September 30, 2017 and December 31, 2016, respectively)	1,730	1,622.9
Accumulated deficit	(1,677.8)	(1,565.6)
Accumulated other comprehensive loss	(51.4)	(56.5)
Total Liabilities and shareholders’ equity	$ 0.8	$ 0.8

STATEMENTS OF FINANCIAL POSITI8

STATEMENTS OF FINANCIAL POSITION (Parenthetical) - shares	Sep. 30, 2017	Dec. 31, 2016
Voting Shares [Member]
Issued (in shares)	6,600,000	6,170,000
Outstanding (in shares)	6,600,000	6,170,000
Listed Shares [Member]
Issued (in shares)	87,569,468	81,857,162
Outstanding (in shares)	87,569,468	81,857,162

GENERAL

GENERAL	9 Months Ended
	Sep. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
GENERAL	1. GENERAL The terms “we”, “our”, “us” and “Enbridge Energy Management” as used in this report refer collectively to Enbridge Energy Management, LLC unless the context suggests otherwise. Nature of Operations We are a limited partner of Enbridge Energy Partners, L.P., (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., (the General Partner), we manage the Partnership’s business and affairs. The General Partner is an indirect, wholly-owned subsidiary of Enbridge Inc. (Enbridge), an energy infrastructure company based in Calgary, Alberta, Canada. Basis of Presentation The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all of the information and notes required by U.S. GAAP for annual financial statements and notes and should therefore be read in conjunction with our audited annual financial statements and notes presented in our Annual Report on Form 10-K for the year ended December 31, 2016 . In the opinion of management, the interim financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our financial position, results of operations and cash flows for the interim periods reported. These interim financial statements follow the same significant accounting policies as those included in our annual financial statements for the 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 also be read in conjunction with the Partnership’s audited consolidated financial statements and notes 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 September 30, 2017 .

INCOME TAXES

INCOME TAXES	9 Months Ended
	Sep. 30, 2017
Income Tax Disclosure [Abstract]
INCOME TAXES	2. 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 September 30, 2017 . The effective income tax rates for the three and nine months ended September 30, 2017 and 2016 are presented in the following table: Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 (unaudited; in millions except for tax rate amounts) Loss before income tax benefit $ (2.5 ) $ (1.9 ) $ (7.5 ) $ (120.0 ) Income tax benefit 0.8 0.6 2.4 44.3 Tax rate change (0.4 ) (3.7 ) (0.4 ) (3.7 ) Valuation allowance 0.4 3.7 0.4 (39.4 ) Total income tax benefit (1) $ 0.8 $ 0.6 $ 2.4 $ 1.2 Effective income tax rate 32.0 % 31.6 % 32.0 % 1.0 % (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 was previously recorded when the losses were reflected in other comprehensive income.

CONTINGENCIES

CONTINGENCIES	9 Months Ended
	Sep. 30, 2017
Commitments and Contingencies Disclosure [Abstract]
CONTINGENCIES	3. CONTINGENCIES We are in the early stages of discovery in relation to a unitholder derivative action, with trial scheduled in the second quarter of 2018. Accordingly, an estimate of reasonably possible losses, if any, associated with causes of action cannot be made until all of the facts, circumstances and legal theories relating to such claims and the defenses are fully disclosed and analyzed. We have not established any reserves relating to this action. We believe the action is without merit and expect to vigorously defend against it. We believe an unfavorable outcome to be more than remote but less than probable.

SUMMARIZED FINANCIAL INFORMATIO

SUMMARIZED FINANCIAL INFORMATION FOR ENBRIDGE ENERGY PARTNERS, L.P.	9 Months Ended
	Sep. 30, 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. Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 (in millions) Operating revenues $ 616.4 $ 634.6 $ 1,817.6 $ 1,885.6 Operating expenses 350.2 1,083.7 971.3 1,715.9 Operating income (loss) $ 266.2 $ (449.1 ) $ 846.3 $ 169.7 Net income (loss) from continuing operations $ 196.0 $ (543.5 ) $ 607.3 $ (100.1 ) Net income (loss) $ 196.0 $ (574.6 ) $ 550.5 $ (224.5 ) Less: Net income (loss) attributable to: Noncontrolling interest 102.9 (191.9 ) 261.8 (52.8 ) Series 1 preferred unit distributions — 22.5 29.0 67.5 Accretion of discount on Series 1 preferred units — 1.2 8.5 3.5 Net income (loss) attributable to Enbridge Energy Partners, L.P. 93.1 (406.4 ) 251.2 (242.7 ) Less: Net income attributable to the General Partner (1) 11.1 46.2 35.1 158.1 Net income (loss) attributable to common units and i-units (2) $ 82.0 $ (452.6 ) $ 216.1 $ (400.8 ) (1) Net income attributable to the General Partner includes net income attributable to the general partner interest as well as to Class F units and Class E units. (2) The Partnership allocates its net income among the General Partner and limited partners using the two-class method in accordance with applicable authoritative accounting guidance. Under the two-class method, the Partnership allocates its net income after noncontrolling interests to the General Partner and limited partners, including us, according to the distribution formula for available cash as set forth in the Partnership Agreement. We owned approximately 19.5% and 16.3% of the Partnership at September 30, 2017 and 2016 , respectively.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2017
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	5. SUBSEQUENT EVENTS Share Distribution On October 25, 2017 , our board of directors declared a share distribution payable on November 14, 2017 , to shareholders of record as of November 7, 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.

INCOME TAXES (Tables)

INCOME TAXES (Tables)	9 Months Ended
	Sep. 30, 2017
Income Tax Disclosure [Abstract]
Schedule of Effective Income Tax Rate Reconciliation	The effective income tax rates for the three and nine months ended September 30, 2017 and 2016 are presented in the following table: Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 (unaudited; in millions except for tax rate amounts) Loss before income tax benefit $ (2.5 ) $ (1.9 ) $ (7.5 ) $ (120.0 ) Income tax benefit 0.8 0.6 2.4 44.3 Tax rate change (0.4 ) (3.7 ) (0.4 ) (3.7 ) Valuation allowance 0.4 3.7 0.4 (39.4 ) Total income tax benefit (1) $ 0.8 $ 0.6 $ 2.4 $ 1.2 Effective income tax rate 32.0 % 31.6 % 32.0 % 1.0 % (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 was previously recorded when the losses were reflected in other comprehensive income.

SUMMARIZED FINANCIAL INFORMAT15

SUMMARIZED FINANCIAL INFORMATION FOR ENBRIDGE ENERGY PARTNERS, L.P. (Tables)	9 Months Ended
	Sep. 30, 2017
Equity Method Investment, Summarized Financial Information [Abstract]
Schedule of Summarized Financial Information for the Partnership	Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 (in millions) Operating revenues $ 616.4 $ 634.6 $ 1,817.6 $ 1,885.6 Operating expenses 350.2 1,083.7 971.3 1,715.9 Operating income (loss) $ 266.2 $ (449.1 ) $ 846.3 $ 169.7 Net income (loss) from continuing operations $ 196.0 $ (543.5 ) $ 607.3 $ (100.1 ) Net income (loss) $ 196.0 $ (574.6 ) $ 550.5 $ (224.5 ) Less: Net income (loss) attributable to: Noncontrolling interest 102.9 (191.9 ) 261.8 (52.8 ) Series 1 preferred unit distributions — 22.5 29.0 67.5 Accretion of discount on Series 1 preferred units — 1.2 8.5 3.5 Net income (loss) attributable to Enbridge Energy Partners, L.P. 93.1 (406.4 ) 251.2 (242.7 ) Less: Net income attributable to the General Partner (1) 11.1 46.2 35.1 158.1 Net income (loss) attributable to common units and i-units (2) $ 82.0 $ (452.6 ) $ 216.1 $ (400.8 ) (1) Net income attributable to the General Partner includes net income attributable to the general partner interest as well as to Class F units and Class E units. (2) The Partnership allocates its net income among the General Partner and limited partners using the two-class method in accordance with applicable authoritative accounting guidance. Under the two-class method, the Partnership allocates its net income after noncontrolling interests to the General Partner and limited partners, including us, according to the distribution formula for available cash as set forth in the Partnership Agreement.

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income Tax Disclosure [Abstract]
Loss before income tax benefit	$ (2.5)	$ (1.9)	$ (7.5)	$ (120)
Income tax benefit	0.8	0.6	2.4	44.3
Tax rate change	(0.4)	(3.7)	(0.4)	(3.7)
Valuation allowance	0.4	3.7	0.4	(39.4)
Total income tax benefit	$ 0.8	$ 0.6	$ 2.4	$ 1.2
Effective income tax rate	32.00%	31.60%	32.00%	1.00%

SUMMARIZED FINANCIAL INFORMAT17

SUMMARIZED FINANCIAL INFORMATION FOR ENBRIDGE ENERGY PARTNERS, L.P. (Details) - Enbridge Energy Partners LP [Member] - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Operating revenues	$ 616.4	$ 634.6	$ 1,817.6	$ 1,885.6
Operating expenses	350.2	1,083.7	971.3	1,715.9
Operating income (loss)	266.2	(449.1)	846.3	169.7
Net income (loss) from continuing operations	196	(543.5)	607.3	(100.1)
Net income (loss)	196	(574.6)	550.5	(224.5)
Less: Net income attributable to Noncontrolling interest	102.9	(191.9)	261.8	(52.8)
Less: Net income attributable to Series 1 preferred unit distributions	0	22.5	29	67.5
Less: Net income attributable to Accretion of discount on Series 1 preferred units	0	1.2	8.5	3.5
Net income (loss) attributable to Enbridge Energy Partners, L.P.	93.1	(406.4)	251.2	(242.7)
Less: Net income attributable to the General Partner	11.1	46.2	35.1	158.1
Net income attributable to common units and i-units	$ 82	$ (452.6)	$ 216.1	$ (400.8)
Percentage of ownership in Partnership	19.50%	16.30%	19.50%	16.30%

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - Subsequent Event [Member]	Oct. 25, 2017$ / shares
Subsequent Event [Line Items]
Distribution Declaration Date	Oct. 25, 2017
Distribution Payment Date	Nov. 14, 2017
Record Date	Nov. 7, 2017
Distribution per Unit of the Partnership (in dollars per share)	$ 0.35
Number of trading days	10 days