Spectra Energy Announces 2010 Financial Outlook

Positioned to See More Than 20 Percent Earnings Growth in 2010

Jan 22, 2010, 08:30 ET from Spectra Energy Corp

HOUSTON, Jan. 22 /PRNewswire-FirstCall/ -- Spectra Energy Corp (NYSE: SE) today announced its financial outlook for 2010.  Highlights of the 2010 plan include:

  • Ongoing diluted earnings per share (EPS) target of $1.42.
  • Expected 2010–2012 compound annual EPS growth rate in 8 to 10 percent range.
  • Maintain annual dividend of at least $1.00 per share.
  • $900 million of capital expansion projects to be placed into service by year-end, delivering returns on capital employed (ROCE) of greater than 12 percent.
  • 2010–2014 capital expansion program of at least $5 billion with average ROCE in 12 to 14 percent range.

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"We're pleased with our efforts last year. We took a number of steps that position us extremely well and we expect to see more than 20 percent earnings growth in 2010," said Greg Ebel, president and chief executive officer, Spectra Energy Corp.  "We begin this year strong and, as always, are focused on results, strategic growth and long-term positioning."

"Our assets are ideally situated and the long-term fundamentals for our industry are bright.  Our dependable earnings from solid, fee-based businesses support an attractive dividend and, based on the numerous projects we contracted last year, we expect growth from these businesses to continue unabated.  In addition, the steady cash flow we realize from DCP Midstream continues to assist in the financing of our expansion efforts," continued Ebel.

The company will discuss its 2010 outlook in greater detail during an analyst meeting and webcast scheduled for 9 a.m. ET today, Friday, January 22.

The conference call can be accessed via the Investors Section of Spectra Energy's Web site at www.spectraenergy.com or by dialing (888) 252-3715 in the United States or Canada, or (706) 634-8942 for International. The conference code is "48438521."  

Non-GAAP Financial Measures

Spectra Energy's management uses ongoing diluted Earnings-per-Share (EPS), which is a non-GAAP financial measure as it represents diluted EPS from continuing operations, adjusted for special items, as a measure to evaluate operations of the company. Special items represent certain charges and credits which management believes will not be recurring on a regular basis. Management believes that the presentation of ongoing diluted EPS provides useful information to investors, as it allows them to more accurately compare the company's ongoing performance across periods. Ongoing diluted EPS is also used as a basis for employee incentive bonuses.

Spectra Energy uses Return on Capital Employed (ROCE) as a measure of the profitability of capital projects.  ROCE is a non-GAAP financial measure and may not be defined and calculated by other companies in the same manner.  ROCE as it relates to capital expansion projects is calculated by Spectra Energy as earnings before interest and taxes generated by a project divided by the total cost of a project. 

Forward-Looking Statements

This release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events. One can typically identify forward-looking statements by the use of forward-looking words such as: may, will, could, project, believe, expect, estimate, continue, potential, plan, forecast and other similar words. Such statements are subject to risks, uncertainties and other factors, many of which are outside our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Those factors include: the implementation of state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an effect on rate structure, and affect the speed at and degree to which competition enters the natural gas industries; the outcome of litigation and regulatory investigations, proceedings or inquiries; the effect of weather and other natural phenomena, including the economic, operational and other effects of hurricanes and storms; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; our ability to obtain financing on favorable terms, which can be affected by various factors, including our credit ratings and general economic conditions; the levels of supply and demand for natural gas in our areas of operation; the results of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general market and economic conditions; increases in the cost of goods and services required to complete capital projects; declines in the market prices of equity and debt securities and resulting funding requirements for defined benefit pension plans; the effects of accounting pronouncements issued periodically by accounting standard-setting bodies; the extent of success in connecting natural gas supplies to gathering, processing and transmission systems and in connecting to expanding gas markets; our ability to identify opportunities for our business units and the timing and success of efforts to develop pipeline, storage, gathering, processing and other infrastructure projects; and our ability to successfully complete and integrate future acquisitions. These factors, as well as additional factors that could affect our forward-looking statements, are described under the headings "Risk Factors" and "Forward-Looking Statements" in our 2008 Form 10-K, filed on February 27, 2009, and in our other filings made with the Securities and Exchange Commission (SEC), which are available via the SEC's Web site at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Spectra Energy Corp (NYSE: SE), a FORTUNE 500 company, is one of North America's premier natural gas infrastructure companies serving three key links in the natural gas value chain: gathering and processing, transmission and storage, and distribution. For nearly a century, Spectra Energy and its predecessor companies have developed critically important pipelines and related infrastructure connecting natural gas supply sources to premium markets. Based in Houston, Texas, the company operates in the United States and Canada approximately 19,100 miles of transmission pipeline, approximately 285 billion cubic feet of storage, natural gas gathering and processing, natural gas liquids operations and local distribution assets. Spectra Energy Corp also has a 50 percent ownership in DCP Midstream, one of the largest natural gas gatherers and processors in the United States. For more information, visit www.spectraenergy.com.

SOURCE Spectra Energy Corp