Midcoast Energy Partners (MEP) 8-K Midcoast Energy Partners, L.P. Declares Distribution Increase and Reports Earnings for Third Quarter 2015

Exhibit 99.2

MIDCOAST ENERGY PARTNERS, L.P.

CONSOLIDATED STATEMENTS OF INCOME

	For the three months						For the nine months
	ended September 30,						ended September 30,
	2015			2014			2015			2014
	(unaudited; in millions, except per unit amounts)
Operating revenues:
Operating revenue	$	649.0		$	1,348.8		$	2,252.3		$	4,268.4
Operating revenue - affiliate		12.0			50.6			62.3			174.7
		661.0			1,399.4			2,314.6			4,443.1
Operating expenses:
Cost of natural gas and natural gas liquids		503.3			1,208.5			1,912.0			3,888.4
Cost of natural gas and natural gas liquids - affiliate		19.4			29.7			60.4			98.3
Operating and maintenance		48.8			54.3			131.7			165.5
Operating and maintenance - affiliate		25.2			26.3			75.2			81.0
General and administrative		1.6			2.5			4.6			6.0
General and administrative - affiliate		19.6			23.4			56.5			68.7
Goodwill impairment		-			-			226.5			-
Asset impairment		-			-			12.3			-
Depreciation and amortization		39.2			39.5			118.3			113.3
		657.1			1,384.2			2,597.5			4,421.2
Operating income (loss)		3.9			15.2			(282.9	)		21.9
Interest expense, net		(7.6	)		(3.6	)		(21.5	)		(9.7	)
Equity in earnings of joint ventures		8.9			6.1			20.5			7.1
Other loss		(0.4	)		(0.8	)		(0.2	)		(0.7	)
Income (loss) before income tax expense		4.8			16.9			(284.1	)		18.6
Income tax expense		(3.7	)		(0.9	)		(1.4	)		(2.7	)
Net income (loss)		1.1			16.0			(285.5	)		15.9
Less: Net income (loss) attributable to noncontrolling interest		4.7			9.7			(125.4	)		13.8
Net income (loss) attributable to general and limited partner ownership interest in Midcoast Energy Partners, L.P.	$	(3.6	)	$	6.3		$	(160.1	)	$	2.1
Net income (loss) attributable to limited partner ownership interest	$	(3.5	)	$	6.2		$	(156.8	)	$	2.1
Net income (loss) per limited partner unit (basic and diluted)	$	(0.08	)	$	0.14		$	(3.47	)	$	0.05
Weighted-average limited partner units outstanding		45.2			45.2			45.2			45.2

1

MIDCOAST ENERGY PARTNERS, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the nine months
	ended September 30,
	2015			2014
	(unaudited; in millions)
Cash provided by operating activities:
Net income (loss)	$	(285.5	)	$	15.9
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		118.3			113.3
Goodwill impairment		226.5			-
Derivative fair value net (gains) losses		53.5			(11.5	)
Inventory market price adjustments		5.4			4.8
Asset impairment		12.3			-
Distributions from investment in joint ventures		20.5			6.1
Equity earnings from investment in joint ventures		(20.5	)		(7.1	)
Deferred income taxes		0.2			1.4
Loss on sales of assets		3.2			-
Other		2.4			0.6
Changes in operating assets and liabilities, net of acquisitions:
Receivables, trade and other		13.9			11.5
Due from General Partner and affiliates		38.7			641.7
Accrued receivables		200.6			28.0
Inventory		(9.8	)		(129.1	)
Current and long-term other assets		1.8			(11.5	)
Due to General Partner and affiliates		13.3			(487.4	)
Accounts payable and other		(20.6	)		(50.6	)
Environmental liabilities		-			0.2
Accrued purchases		(177.2	)		(21.3	)
Interest payable		(3.8	)		0.4
Property and other taxes payable		5.4			6.6
Net cash provided by operating activities		198.6			112.0
Cash used in investing activities:
Additions to property, plant and equipment		(155.4	)		(166.6	)
Changes in restricted cash		32.1			55.6
Acquisitions		(43.9	)		-
Proceeds from sales of assets		2.1			-
Investment in joint ventures		(3.0	)		(35.4	)
Distributions from investment in joint ventures in excess of cumulative earnings		9.5			27.0
Other		(1.6	)		(0.8	)
Net cash used in investing activities		(160.2	)		(120.2	)
Cash (used in) provided by financing activities:
Proceeds from long-term debt, net of discounts		-			398.1
Net borrowings under credit facility		60.0			30.0
Distributions to partners		(48.1	)		(37.1	)
Acquisition of noncontrolling interest in subsidiary		-			(350.0	)
Contributions from noncontrolling interest		37.3			111.8
Distributions to noncontrolling interest		(72.0	)		(83.3	)
Net cash (used in) provided by financing activities		(22.8	)		69.5
Net increase in cash and cash equivalents		15.6			61.3
Cash and cash equivalents at beginning of year		-			4.9
Cash and cash equivalents at end of period	$	15.6		$	66.2

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MIDCOAST ENERGY PARTNERS, L.P.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

	September 30,		December 31,
	2015		2014
ASSETS	(unaudited; in millions)
Current assets:
Cash and cash equivalents	$	15.6	$	-
Restricted cash		25.7		42.8
Receivables, trade and other, net of allowance for doubtful accounts of $1.6 million
and $1.8 million, respectively, at September 30, 2015 and December 31, 2014		1.5		15.6
Due from General Partner and affiliates		17.9		49.7
Accrued receivables		29.0		229.6
Inventory		85.9		81.5
Other current assets		136.9		178.1
		312.5		597.3
Property, plant and equipment, net		4,222.7		4,159.7
Goodwill		-		226.5
Intangible assets, net		277.2		247.7
Equity investment in joint ventures		373.7		380.6
Other assets, net		106.7		142.3
Total assets	$	5,292.8	$	5,754.1
LIABILITIES AND PARTNERS’ CAPITAL
Current liabilities:
Due to General Partner and affiliates	$	35.6	$	41.1
Accounts payable and other		89.8		113.8
Accrued purchases		198.0		375.2
Property and other taxes payable		26.3		20.9
Interest payable		1.2		5.0
		350.9		556.0
Long-term debt		820.0		760.0
Other long-term liabilities		49.8		41.5
Total liabilities		1,220.7		1,357.5
Commitments and contingencies
Partners’ capital:
Class A common units (22,610,056 authorized and issued at September 30, 2015 and
December 31,2014)		532.2		634.2
Subordinated units (22,610,056 authorized and issued at September 30, 2015 and
December 31, 2014)		1,072.0		1,174.0
General Partner units (922,859 authorized and issued at September 30, 2015 and
December 31, 2014)		43.6		47.8
Accumulated other comprehensive income		3.3		11.6
Total Midcoast Energy Partners, L.P. partners’ capital		1,651.1		1,867.6
Noncontrolling interest		2,421.0		2,529.0
Total partners’ capital		4,072.1		4,396.6
	$	5,292.8	$	5,754.1

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NET INCOME PER LIMITED PARTNER AND GENERAL PARTNER INTEREST

We allocate our net income among our General Partner and limited partners using the two-class method. Under the two-class method, we allocate our net income to our limited partners, our General Partner and the holders of our IDRs in accordance with the terms of our partnership agreement. We also allocate any earnings in excess of distributions to our limited partners, our General Partner and the holders of the IDRs in accordance with the terms of our partnership agreement. We allocate any distributions in excess of earnings for the period to our General Partner and our limited partners based on their respective proportionate ownership interests in us, after taking into account distributions to be paid with respect to the IDRs, as set forth in our partnership agreement.

Distribution Targets	Portion of Quarterly Distribution Per Unit	Percentage Distributed to Limited Partners	Percentage Distributed to General Partner
Minimum Quarterly Distribution	Up to $0.3125	98%	2%
First Target Distribution	> $0.3125 to $0.359375	98%	2%
Second Target Distribution	> $0.359375 to $0.390625	85%	15%
Third Target Distribution	> $0.390625 to $0.468750	75%	25%
Over Third Target Distribution	In excess of $0.468750	50%	50%

We determined basic and diluted net income (loss) per limited partner unit as follows:

	For the three months						For the nine months
	ended September 30,						ended September 30,
	2015			2014			2015			2014
	(in millions, except per unit amounts)
Net income (loss)	$	1.1		$	16.0		$	(285.5	)	$	15.9
Less: Net income (loss) attributable to noncontrolling interest		4.7			9.7			(125.4	)		13.8
Net income (loss) attributable to general and limited partner
interests in Midcoast Energy Partners, L.P.		(3.6	)		6.3			(160.1	)		2.1
Less distributions:
Total distributed earnings to our General Partner		(0.3	)		(0.3	)		(0.9	)		(0.9	)
Total distributed earnings to our limited partners		(16.2	)		(15.3	)		(47.9	)		(44.1	)
Total distributed earnings		(16.5	)		(15.6	)		(48.8	)		(45.0	)
Overdistributed earnings	$	(20.1	)	$	(9.3	)	$	(208.9	)	$	(42.9	)
Weighted-average limited partner units outstanding		45.2			45.2			45.2			45.2
Basic and diluted earnings per unit:
Distributed earnings per limited partner unit (1)	$	0.36		$	0.34		$	1.06		$	0.98
Overdistributed earnings per limited partner unit (2)		(0.44	)		(0.20	)		(4.53	)		(0.93	)
Net income (loss) per limited partner unit (basic and diluted)	$	(0.08	)	$	0.14		$	(3.47	)	$	0.05

⁽¹⁾ Represents the total distributed earnings to limited partners divided by the weighted-average number of limited partner interests outstanding for the period.

⁽²⁾ Represents the limited partners' share (98%) of distributions in excess of earnings divided by the weighted-average number of limited partner interests outstanding for the period and underdistributed earnings allocated to the limited partners based on the distribution waterfall that is outlined in our partnership agreement.

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SEGMENT INFORMATION

Our business is divided into operating segments, defined as components of the enterprise, about which financial information is available and evaluated regularly by our Chief Operating Decision Maker, collectively comprised of our senior management, in deciding how resources are allocated and performance is assessed.

Each of our reportable segments is a business unit that offers different services and products that are managed separately, since each business segment requires different operating strategies. We conduct our business through two distinct reporting segments:

• Gathering, Processing and Transportation; and

• Logistics and Marketing.

The following tables present certain financial information relating to our business segments and corporate activities:

	For the three months ended September 30, 2015
	Gathering, Processing and Transportation			Logistics and Marketing			Corporate (1)			Total
	(in millions)
Total revenue	$	357.7		$	520.8		$	-		$	878.5
Less: Intersegment revenue		214.3			3.2			-			217.5
Operating revenue		143.4			517.6			-			661.0
Cost of natural gas and natural gas liquids		16.7			506.0			-			522.7
Segment gross margin		126.7			11.6			-			138.3
Operating and maintenance		55.7			18.2			0.1			74.0
General and administrative		17.2			3.0			1.0			21.2
Depreciation and amortization		37.1			2.1			-			39.2
		110.0			23.3			1.1			134.4
Operating income (loss)		16.7			(11.7	)		(1.1	)		3.9
Interest expense, net		-			-			(7.6	)		(7.6	)
Other income (loss)		8.9	(2)		-			(0.4	)		8.5
Income (loss) before income tax expense		25.6			(11.7	)		(9.1	)		4.8
Income tax expense		-			-			(3.7	)		(3.7	)
Net income (loss)	$	25.6		$	(11.7	)	$	(12.8	)	$	1.1
Less: Net income attributable to noncontrolling interest		-			-			4.7			4.7
Net income (loss) attributable to general and limited partner
ownership interests in Midcoast Energy Partners, L.P.	$	25.6		$	(11.7	)	$	(17.5	)	$	(3.6	)

⁽¹⁾ Corporate consists of interest expense, interest income, noncontrolling interest and other costs such as income taxes, which are not allocated tothe business segments.

⁽²⁾ Other income for our Gathering, Processing and Transportation segment includes our equity investment in the Texas Express NGL system.

5

	For the three months ended September 30, 2014
	Gathering, Processing and Transportation			Logistics and Marketing			Corporate (1)			Total
	(in millions)
Total revenue	$	646.3		$	1,252.4		$	-		$	1,898.7
Less: Intersegment revenue		484.9			14.4			-			499.3
Operating revenue		161.4			1,238.0			-			1,399.4
Cost of natural gas and natural gas liquids		20.7			1,217.5			-			1,238.2
Segment gross margin		140.7			20.5			-			161.2
Operating and maintenance		64.9			15.7			-			80.6
General and administrative		21.3			3.1			1.5			25.9
Depreciation and amortization		35.5			4.0			-			39.5
		121.7			22.8			1.5			146.0
Operating income (loss)		19.0			(2.3	)		(1.5	)		15.2
Interest expense, net		-			-			(3.6	)		(3.6	)
Other income		5.3	(2)		-			-			5.3
Income (loss) before income tax expense		24.3			(2.3	)		(5.1	)		16.9
Income tax expense		-			-			(0.9	)		(0.9	)
Net income (loss)	$	24.3		$	(2.3	)	$	(6.0	)	$	16.0
Less: Net income attributable to noncontrolling interest		-			-			9.7			9.7
Net income (loss) attributable to general and limited partner
ownership interests in Midcoast Energy Partners, L.P.	$	24.3		$	(2.3	)	$	(15.7	)	$	6.3

⁽¹⁾ Corporate consists of interest expense, interest income, noncontrolling interest and other costs such as income taxes, which are not allocated to the business segments.

⁽²⁾ Other income for our Gathering, Processing and Transportation segment includes our equity investment in the Texas Express NGL system.

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	As of and for the nine months ended September 30, 2015
	Gathering, Processing and Transportation			Logistics and Marketing			Corporate (1)			Total
	(in millions)
Total revenue	$	1,144.5		$	1,975.3		$	-		$	3,119.8
Less: Intersegment revenue		776.9			28.3			-			805.2
Operating revenue		367.6			1,947.0			-			2,314.6
Cost of natural gas and natural gas liquids		58.5			1,913.9			-			1,972.4
Segment gross margin		309.1			33.1			-			342.2
Operating and maintenance		161.5			45.1			0.3			206.9
General and administrative		48.5			9.0			3.6			61.1
Goodwill impairment		206.1			20.4			-			226.5
Asset impairment		-			12.3			-			12.3
Depreciation and amortization		112.0			6.3			-			118.3
		528.1			93.1			3.9			625.1
Operating loss		(219.0	)		(60.0	)		(3.9	)		(282.9	)
Interest expense, net		-			-			(21.5	)		(21.5	)
Other income (loss)		20.5	(2)		-			(0.2	)		20.3
Loss before income tax expense		(198.5	)		(60.0	)		(25.6	)		(284.1	)
Income tax expense		-			-			(1.4	)		(1.4	)
Net loss		(198.5	)		(60.0	)		(27.0	)		(285.5	)
Less: Net loss attributable to noncontrolling interest		-			-			(125.4	)		(125.4	)
Net income (loss) attributable to general and limited partner
ownership interests in Midcoast Energy Partners, L.P.	$	(198.5	)	$	(60.0	)	$	98.4		$	(160.1	)
Total assets	$	4,983.0	(3)	$	210.2		$	99.6		$	5,292.8
Capital expenditures (excluding acquisitions)	$	132.8		$	11.0		$	3.6		$	147.4

⁽¹⁾ Corporate consists of interest expense, interest income, noncontrolling interest and other costs such as income taxes, which are not allocated to the business segments.

⁽²⁾ Other income for our Gathering, Processing and Transportation segment includes our equity investment in the Texas Express NGL system.

⁽³⁾ Totals assets for our Gathering, Processing and Transportation segment includes $373.7 million for our equity investment in the Texas Express NGL system.

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	As of and for the nine months ended September 30, 2014
	Gathering, Processing and Transportation			Logistics and Marketing		Corporate (1)			Total
	(in millions)
Total revenue	$	2,065.3		$	3,981.2	$	-		$	6,046.5
Less: Intersegment revenue		1,531.2			72.2		-			1,603.4
Operating revenue		534.1			3,909.0		-			4,443.1
Cost of natural gas and natural gas liquids		155.6			3,831.1		-			3,986.7
Segment gross margin		378.5			77.9		-			456.4
Operating and maintenance		196.5			49.8		0.2			246.5
General and administrative		62.4			8.8		3.5			74.7
Depreciation and amortization		105.4			7.9		-			113.3
		364.3			66.5		3.7			434.5
Operating income (loss)		14.2			11.4		(3.7	)		21.9
Interest expense, net		-			-		(9.7	)		(9.7	)
Other income		6.4	(2)		-		-			6.4
Income (loss) before income tax expense		20.6			11.4		(13.4	)		18.6
Income tax expense		-			-		(2.7	)		(2.7	)
Net income (loss)		20.6			11.4		(16.1	)		15.9
Less: Net income attributable to noncontrolling interest		-			-		13.8			13.8
Net income (loss) attributable to general and limited partner
ownership interests in Midcoast Energy Partners, L.P.	$	20.6		$	11.4	$	(29.9	)	$	2.1
Total assets	$	4,955.8	(3)	$	499.2	$	130.2		$	5,585.2
Capital expenditures (excluding acquisitions)	$	149.8		$	8.6	$	3.2		$	161.6

⁽¹⁾ Corporate consists of interest expense, interest income, noncontrolling interest and other costs such as income taxes, which are not allocated to the business segments.

⁽²⁾ Other income for our Gathering, Processing and Transportation segment includes our equity investment in the Texas Express NGL system.

⁽³⁾ Totals assets for our Gathering, Processing and Transportation segment includes $380.2 million for our equity investment in the Texas Express NGL system.

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