Spectra Energy Announces 2011 Financial Plan

Earnings Per Share Target of $1.65

Includes Dividend Increase and Continued Earnings Growth

Dec 08, 2010, 08:00 ET from Spectra Energy Corp

HOUSTON, Dec. 8, 2010 /PRNewswire-FirstCall/ -- Spectra Energy Corp (NYSE: SE) today announced its board of directors has approved the company's financial plan for 2011, which assumes the following:

(Logo: http://photos.prnewswire.com/prnh/20061030/CLM051LOGO )

  • Ongoing diluted earnings per share (EPS) target of $1.65, approximately 15 percent above 2010 target of $1.42.
  • A 4 percent increase in the quarterly dividend from the current $0.25 per share to $0.26 per share, to be effective first quarter 2011.
  • Investment of approximately $1.4 billion in expansion capital.

"As we close out 2010, we are on track to meet the financial goals we set for the year, including exceeding our stated 2010 ongoing EPS target of $1.42. We have successfully executed on our growth plan this year, placing into service, on time and on budget, five projects totaling $900 million in expansion capital, with returns on capital employed well in excess of our targeted 10 to 12 percent range," said Greg Ebel, president and chief executive officer, Spectra Energy Corp. “We continue to see capital investment opportunities of at least $1 billion per year for the foreseeable future.”

"Additionally, with last week's dropdown of an additional 24.5 percent interest in Gulfstream Natural Gas System, we continued growing our master limited partnership, Spectra Energy Partners, and strengthened our balance sheet," he added.

"We are pleased to be able to include in our 2011 financial plan a dividend increase, and as earnings growth continues, we would expect future dividend increases consistent with a targeted payout of up to 65 percent," said Ebel. "In addition, given its leading position in key producing areas such as the Eagle Ford, Permian and Wattenberg basins, we expect continued earnings growth, on a commodity-neutral basis, at DCP Midstream. A portion of that growth will be funded by DCP Midstream Partners, which will allow DCP Midstream to continue paying attractive dividends to its parent sponsors, Spectra Energy and ConocoPhillips."

Key assumptions underlying the 2011 financial plan include:

  • Oil - $85.00 per barrel
  • Composite natural gas liquids (NGL) price - $1.00 per gallon
  • NGL-to-crude oil relationship - 50 percent
  • Natural gas - $4.25 per million British thermal units
  • Canadian/U.S. dollar exchange rate - $1.05

The company will discuss its 2011 outlook in greater detail, including 2011 EBIT by business segment, during an analyst meeting in New York and webcast scheduled for 9:00 a.m. ET on Thursday, January 20, 2011. Additional details will be relayed at a later date.

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 are based on our beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: 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; outcomes of litigation and regulatory investigations, proceedings or inquiries; 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; general economic conditions, including the risk of a prolonged economic slowdown or decline, or the risk of delay in a recovery, which can affect the long-term demand for natural gas and related services; potential effects arising from terrorist attacks and any consequential or other hostilities; changes in environmental, safety and other laws and regulations; results and costs 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; growth in opportunities, including the timing and success of efforts to develop U.S. and Canadian pipeline, storage, gathering, processing and other infrastructure projects and the effects of competition; the performance of natural gas transmission and storage, distribution, and gathering and processing facilities; the extent of success in connecting natural gas supplies to gathering, processing and transmission systems and in connecting to expanding gas markets; the effects of accounting pronouncements issued periodically by accounting standard-setting bodies; conditions of the capital markets during the periods covered by the forward-looking statements; and the ability to successfully complete merger, acquisition or divestiture plans; regulatory or other limitations imposed as a result of a merger, acquisition or divestiture; and the success of the business following a merger, acquisition or divestiture. These factors, as well as additional factors that could affect our forward-looking statements, are described under the headings "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Information" in our 2009 Form 10-K, filed on February 25, 2010, 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. All forward-looking statements in this release are made as of the date hereof and 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 305 billion cubic feet of storage, as well as natural gas gathering and processing, natural gas liquids operations and local distribution assets. The company also has a 50 percent ownership in DCP Midstream, one of the largest natural gas gatherers and processors in the United States. Spectra Energy is a member of both the Dow Jones Sustainability Index North America and the U.S. S&P 500 Carbon Disclosure Leadership Index. For more information, visit www.spectraenergy.com

SOURCE Spectra Energy Corp