Spectra Energy Reports Fourth Quarter and Year-End 2009 Results
HOUSTON, Feb. 4 /PRNewswire-FirstCall/ --
- $1.18 ongoing 2009 diluted earnings per share (EPS); exceeded $1.15 EPS target.
- Placed $650 million of expansion projects into service, delivering returns on capital employed of more than 12 percent.
- Almost $3 billion in new expansion growth projects secured through customer contracts signed in 2009.
- 2010 expectation of $1.42 EPS; 8 to 10 percent compound annual EPS growth rate for 2010 to 2012.
Spectra Energy Corp (NYSE: SE) today reported 2009 net income from controlling interests of $848 million, or $1.32 diluted EPS, compared with $1.13 billion, or $1.81 diluted EPS in 2008. Ongoing 2009 net income was $758 million, or $1.18 diluted EPS, compared with $1.14 billion, $1.83 diluted EPS, in the prior year.
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2009 year-end results reflect strong earnings growth from expansion projects brought into service in both 2008 and 2009. These results were more than offset by lower commodity prices relative to the record-high prices seen in 2008 and a weaker Canadian dollar.
The company reported 2009 fourth quarter net income from controlling interests of $219 million, or $0.34 diluted EPS, compared with $171 million, $0.28 diluted EPS, in the prior year quarter. Ongoing net income from controlling interests for the 2009 quarter was $217 million, or $0.33 diluted EPS, versus $197 million, $0.32 diluted EPS, in the prior year quarter.
The 2009 fourth quarter results reflect the effects of improving commodity prices, a stronger Canadian dollar and increased gathering and processing revenues at Western Canada Transmission & Processing.
"We experienced solid earnings and strong performance from our core, fee-based businesses last year. We also executed extremely well on our capital expansion projects and signed multiple new customer contracts, which will fuel continued growth," said Greg Ebel, president and chief executive officer, Spectra Energy Corp. "We finished the year financially strong and that momentum gives us confidence in our ability to achieve 20 percent earnings growth this year."
"We will continue our focus on securing new growth opportunities for the future, as well as executing on our current portfolio of attractive expansion projects – projects that will deliver returns in excess of 12 percent, and that underpin our strong, sustainable earnings growth," said Ebel.
SEGMENT RESULTS
U.S. Transmission
U.S. Transmission reported fourth quarter 2009 earnings before interest and taxes (EBIT) of $204 million, compared with $161 million in fourth quarter 2008. The 2008 period included a $44 million special item for an impairment of the Islander East project.
Ongoing EBIT for fourth quarter 2009 was $204 million and, excluding the above special item, compares with $205 million in the prior year quarter. The segment benefited during the 2009 quarter from business expansion projects placed into service during 2009. These earnings were offset by the timing of operating and maintenance expenses, including increased pipeline integrity and lower capitalized costs. In addition, the 2008 quarter included a favorable customer settlement.
Year-end reported EBIT for U.S. Transmission was $894 million, compared with $844 million in 2008.
Distribution
Distribution reported fourth quarter 2009 EBIT of $96 million, compared with $90 million in fourth quarter 2008. Excluding the effect of a stronger Canadian dollar, earnings were $7 million lower than in the 2008 quarter, primarily a result of warmer weather.
Year-end reported EBIT for Distribution was $336 million, compared with $353 million in 2008.
Western Canada Transmission & Processing
Western Canada Transmission & Processing reported fourth quarter 2009 EBIT of $120 million, compared with $65 million in fourth quarter 2008. Beyond the effect of the stronger Canadian dollar, which added $16 million to earnings this quarter compared with last year, the increase was due mainly to higher frac spreads affecting our Empress natural gas liquids (NGL) earnings. The segment also benefited from improved results in the base gathering and processing business, primarily driven by higher contracted volumes and revenues from expansions.
Year-end reported EBIT for Western Canada Transmission & Processing was $343 million, compared with $398 million in 2008.
Field Services
Field Services reported fourth quarter 2009 EBIT of $77 million, compared with $69 million in fourth quarter 2008. The increase in earnings was driven by higher commodity prices. During fourth quarter 2009, crude oil averaged approximately $76 per barrel, compared with approximately $59 per barrel in the prior year quarter, and the NGL to crude relationship averaged 53 percent versus 46 percent in fourth quarter 2008.
These results were partially offset by non-cash mark-to-market losses in fourth quarter 2009, compared with gains in fourth quarter 2008 on hedges used to protect distributable cash flow at DCP Midstream's master limited partnership. Volumes were lower in fourth quarter 2009 versus 2008; however, drilling activity and rig counts around DCP Midstream's assets have continued to increase since the first half of 2009.
DCP Midstream paid distributions of $70 million to Spectra Energy for the 2009 quarter and $100 million for the year.
Year-end reported EBIT for Field Services was $296 million, compared with $716 million in 2008.
Other
"Other" reported net costs of $28 million in fourth quarter 2009, compared with net costs of $21 million in fourth quarter 2008. This increase primarily reflects higher benefit costs.
Year-end reported net costs for "Other" were $74 million, compared with $78 million in 2008.
Interest Expense
Interest expense was $154 million for fourth quarter 2009, compared with $166 million for the 2008 quarter. The decrease was primarily due to the benefit of interest rate swaps and lower commercial paper balances, partially offset by the effects of a stronger Canadian dollar during the 2009 quarter.
Interest expense for 2009 was $610 million, compared with $636 million in 2008.
Income Taxes
Fourth quarter 2009 income tax expense from continuing operations was $93 million, compared with $43 million in fourth quarter 2008. The increase was primarily a result of higher earnings in 2009. The effective tax rate was 28 percent in fourth quarter 2009, compared with 19 percent in fourth quarter 2008. The lower effective tax rate in fourth quarter 2008 was due to favorable adjustments in 2008 for final 2007 tax returns, and lower 2008 state income taxes.
Special Items Affecting Spectra Energy's EPS for the Quarters Include:
(in millions, except per-share amounts)
Net Income
–Controlling
Pre-tax Interests
Amount Tax Effect Impact EPS Impact
------- ---------- ------------ ----------
Fourth Quarter 2009 $– $– $– $–
=== === === ===
Fourth Quarter 2008
Impairment on Islander
East Project $(44) $14 $(30) $(0.05)
---- --- ---- ------
Total Special Items $(44) $14 $(30) $(0.05)
==== === ==== ======
Reconciliation of Reported to Ongoing Net Income
(in millions)
Quarters Ended Years Ended
December 31, December 31,
2009 2008 2009 2008
---- ---- ---- ----
Net Income – Controlling Interests as
Reported $219 $171 $848 $1,129
Adjustments to Reported Net Income –
Controlling Interests:
Special Items – 30 (85) 12
Discontinued Operations (2) (4) (5) –
-
Ongoing Net Income $217 $197 $758 $1,141
==== ==== ==== ======
Reconciliation of Reported to Ongoing Diluted EPS
-------------------------------------------------
Quarters Ended Years Ended
December 31, December 31,
2009 2008 2009 2008
---- ---- ---- ----
Diluted EPS as Reported $0.34 $0.28 $1.32 $1.81
Special Items – 0.05 (0.13) 0.02
Discontinued Operations (0.01) (0.01) (0.01) –
----- ----- ----- -
Diluted EPS, Ongoing $0.33 $0.32 $1.18 $1.83
===== ===== ===== =====
Additional Information
Additional information about fourth quarter and year-end 2009 earnings can be obtained on the Spectra Energy Web site: www.spectraenergy.com. The Analyst call is scheduled for 9 a.m. CT today, February 4, to discuss Spectra Energy's fourth quarter and year-end 2009 results. The webcast can be accessed on the Investors Section of Spectra Energy's Web site and the conference call can be accessed by dialing (888) 252-3715 in the United States or Canada, or (706) 634-8942 for International. The conference code is "50016150" or "Spectra Energy Quarterly Earnings Call."
Please call five to ten minutes prior to the scheduled start time. A replay of the call will be available until 5:00 p.m. CT, May 3, 2010, by dialing (800) 642-1687 with conference ID 50016150. The international replay number is (706) 645-9291, with above conference ID. A replay and transcript also will be available by accessing the Investors Section of the company's Web site.
Non-GAAP Financial Measures
We use ongoing net income and ongoing diluted EPS, which are non-GAAP financial measures as they represent net income (controlling interests) and diluted EPS, adjusted for special items and discontinued operations, as measures to evaluate operations of the company. Special items represent certain charges and credits which we believe will not be recurring on a regular basis, and discontinued operations do not represent our ongoing core business. We believe that the presentation of ongoing net income and ongoing diluted EPS provide useful information to investors, as it allows them to more accurately compare our ongoing performance across periods.
The primary performance measure used by us to evaluate segment performance is segment EBIT from continuing operations, which at the segment level represents earnings from continuing operations (both operating and non-operating) before interest and taxes, net of noncontrolling interests related to those earnings. We consider segment EBIT, which is the GAAP measure used to report segment results, to be a good indicator of each segment's operating performance from its continuing operations as it represents the results of our ownership interest in operations without regard to financing methods or capital structures.
We also use ongoing segment and Other EBIT as a measure of performance. Ongoing segment and Other EBIT is a non-GAAP financial measure as it represents reported segment and Other EBIT adjusted for special items. We believe that the presentation of ongoing segment and Other EBIT provides useful information to investors, as it allows them to more accurately compare a segment's or Other's ongoing performance across periods. The most directly comparable GAAP measure for ongoing segment or Other EBIT is reported segment or Other EBIT, which represents EBIT from continuing operations, including any special items.
We use 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, more than 285 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 was recently ranked by FORTUNE as the world's "most admired" pipeline company. For more information, visit www.spectraenergy.com.
Spectra Energy Corp
Quarterly Highlights
December 2009
(Unaudited)
(In millions, except per-share amounts and where noted)
Quarters Ended Years Ended
December 31, December 31,
------------ ------------
2009 2008 2009 2008
------------------------------ ------------ -------------
COMMON STOCK DATA
Earnings Per Share From Continuing
Operations
Basic $0.34 $0.27 $1.31 $1.82
Diluted $0.33 $0.27 $1.31 $1.81
Earnings Per Share
Basic $0.34 $0.28 $1.32 $1.82
Diluted $0.34 $0.28 $1.32 $1.81
Dividends Per Share $0.25 $0.25 $1.00 $0.96
Weighted-Average Shares Outstanding
Basic 647 611 642 622
Diluted 650 612 643 624
------------------------------ ------------ -------------
INCOME
Operating Revenues $1,298 $1,261 $4,552 $5,074
Total Reportable Segment EBIT 497 385 1,869 2,311
Income from Discontinued
Operations, Net of Tax 2 3 5 2
Net Income - Controlling Interests 219 171 848 1,129
------------------------------ ------------ -------------
EBIT BY BUSINESS SEGMENT
U.S. Transmission $204 $161 $894 $844
Distribution 96 90 336 353
Western Canada Transmission &
Processing 120 65 343 398
Field Services 77 69 296 716
-- -- --- ---
Total Reportable Segment EBIT 497 385 1,869 2,311
Other EBIT (28) (21) (74) (78)
--- --- --- ---
Total Reportable Segment and Other
EBIT $469 $364 $1,795 $2,233
==== ==== ====== ======
------------------------------ ------------ -------------
CAPITAL AND INVESTMENT EXPENDITURES (a)
U.S. Transmission $727 $1,400
Distribution 224 373
Western Canada Transmission & Processing 353 222
Other 32 35
-- --
Total Capital and Investment Expenditures $1,336 $2,030
====== ======
December 31,
------------
2009 2008
------------------------------ ----------------
CAPITALIZATION
Common Equity - Controlling Interests 40% 34%
Noncontrolling Interests and Preferred Stock 4% 4%
Total Debt 56% 62%
------------------------------ ----------------
Total Debt $9,918 $10,047
Book Value Per Share (b) $11.01 $9.07
Actual Shares Outstanding 647 611
(a) Includes loans to affiliates for capital expansion projects.
(b) Represents controlling interests.
Spectra Energy Corp
Quarterly Highlights
December 2009
(Unaudited)
(In millions, except where noted)
Quarters Ended Years Ended
December 31, December 31,
-------------- ------------
2009 2008 2009 2008
----------------------- ----------- ------------
U.S. TRANSMISSION
Operating Revenues $444 $395 $1,690 $1,600
Operating Expenses
Operating, Maintenance and Other 187 162 577 595
Depreciation and Amortization 64 58 246 232
Gains on Sales of Other Assets
and Other, net - 10 11 42
Other Income and Expenses 31 (8) 91 86
Noncontrolling Interests 20 16 75 57
-- -- -- --
EBIT $204 $161 $894 $844
---- ---- ---- ----
Proportional Throughput, TBtu (a) 680 622 2,574 2,218
----------------------- ----------- ------------
DISTRIBUTION
Operating Revenues $509 $558 $1,745 $1,991
Operating Expenses
Natural Gas Purchased 261 347 878 1,094
Operating, Maintenance and Other 106 88 358 372
Depreciation and Amortization 46 37 172 175
Other Income and Expenses - 4 (1) 3
EBIT $96 $90 $336 $353
--- --- ---- ----
Number of Customers, Thousands 1,325 1,309
Heating Degree Days, Fahrenheit 2,471 2,676 7,435 7,491
Pipeline Throughput, TBtu 220 269 809 900
----------------------- ----------- ------------
WESTERN CANADA TRANSMISSION & PROCESSING
Operating Revenues $345 $308 $1,115 $1,482
Operating Expenses
Natural Gas and Petroleum Products
Purchased 79 112 222 496
Operating, Maintenance and Other 108 103 407 445
Depreciation and Amortization 39 33 144 147
Other Income and Expenses 1 5 1 5
Noncontrolling Interests - - - 1
- - - -
EBIT $120 $65 $343 $398
---- --- ---- ----
Pipeline Throughput, TBtu 158 161 604 615
Volumes Processed, TBtu 161 172 655 698
Empress Inlet Volumes, TBtu 159 176 737 820
----------------------- ----------- ------------
FIELD SERVICES
Equity in Earnings of DCP
Midstream, LLC $77 $69 $296 $716
EBIT $77 $69 $296 $716
--- --- ---- ----
Natural Gas Gathered and
Processed/Transported, TBtu/day (b) 6.8 7.1 6.9 7.1
Natural Gas Liquids
Production, MBbl/d (b,c) 369 343 358 360
Average Natural Gas Price
Per MMBtu (d) $4.17 $6.94 $3.99 $9.03
Average Natural Gas
Liquids Price Per Gallon $0.96 $0.64 $0.71 $1.23
----------------------- ----------- ------------
OTHER
Operating Revenues $11 $13 $47 $45
Operating Expenses 40 40 130 125
Other Income and Expenses 1 6 9 2
EBIT $(28) $(21) $(74) $(78)
---- ---- ---- ----
(a) Trillion British thermal units
(b) Includes 100% of DCP Midstream volumes
(c) Thousand barrels per day
(d) Million British thermal units. Average price based on NYMEX Henry
Hub
Spectra Energy Corp
Condensed Consolidated Statements of Operations
(Unaudited)
(In millions)
Quarters Ended Years Ended
December 31, December 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Operating Revenues $1,298 $1,261 $4,552 $5,074
Operating Expenses 918 967 3,088 3,636
Gains on Sales of Other
Assets and Other, net - 10 11 42
---- ---- ---- ----
Operating Income 380 304 1,475 1,480
---- ---- ---- ----
Other Income and Expenses 104 89 406 844
Interest Expense 154 166 610 636
---- ---- ---- ----
Earnings From Continuing
Operations Before Income Taxes 330 227 1,271 1,688
Income Tax Expense From
Continuing Operations 93 43 353 496
---- ---- ---- ----
Income From Continuing Operations 237 184 918 1,192
Income From Discontinued
Operations, net of tax 2 3 5 2
---- ---- ---- ----
Net Income 239 187 923 1,194
Net Income -
Noncontrolling Interests 20 16 75 65
---- ---- ---- ----
Net Income - Controlling
Interests $219 $171 $848 $1,129
==== ==== ==== ======
Spectra Energy Corp
Condensed Consolidated Balance Sheets
(Unaudited)
(In millions)
December 31, December 31,
2009 2008
---- ----
ASSETS
Current Assets $1,429 $1,450
Investments and Other Assets 6,356 5,950
Net Property, Plant and Equipment 15,347 13,639
Regulatory Assets and Deferred Debits 947 885
----- -----
Total Assets $24,079 $21,924
======= =======
LIABILITIES AND EQUITY
Current Liabilities $2,495 $3,044
Long-term Debt 8,947 8,290
Deferred Credits and Other Liabilities 4,747 4,355
Preferred Stock of Subsidiaries 225 225
Equity 7,665 6,010
----- -----
Total Liabilities and Equity $24,079 $21,924
======= =======
Spectra Energy Corp
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In millions)
Years Ended
December 31,
------------
2009 2008
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $923 $1,194
Adjustments to reconcile net income to net
cash provided by operating activities 837 611
------ ------
Net cash provided by operating activities 1,760 1,805
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used in investing activities (1,000) (1,888)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash provided by (used in) financing
activities (803) 214
------ ------
Effect of exchange rate changes on cash 25 (11)
------ ------
Net increase (decrease) in cash and cash equivalents (18) 120
Cash and cash equivalents at beginning of period 214 94
------ ------
Cash and cash equivalents at end of period $196 $214
====== ======
Spectra Energy Corp
Reported to Ongoing Earnings Reconciliation
December 2009 Quarter-to-date
(In millions, except per-share amounts)
Discont Total
Reported -inued Adjust- Ongoing
Earnings Operations -ments Earnings
-------- ---------- ------ --------
SEGMENT EARNINGS BEFORE INTEREST AND
TAXES FROM CONTINUING OPERATIONS
------------------------------------
U.S. Transmission $204 $- $- $204
Distribution 96 - - 96
Western Canada Transmission &
Processing 120 - - 120
Field Services 77 - - 77
-------- ---------- ------ --------
Total Reportable Segment EBIT 497 - - 497
-------- ---------- ------ --------
Other (28) - - (28)
-------- ---------- ------ --------
Total Reportable Segment and Other
EBIT $469 $- $- $469
======== ========== ======= ======
EARNINGS
------------------------------------
Total Reportable Segment EBIT and
Other EBIT $469 $- $- $469
Interest Expense (154) - - (154)
Interest Income and Other 15 - - 15
Income Taxes from Continuing
Operations (93) - - (93)
Discontinued Operations, net of Tax 2 (2) A (2) -
-------- ---------- ------ --------
Total Earnings $239 $(2) $(2) $237
Total Earnings -Noncontrolling Interests (20) - - (20)
-------- ---------- ------ --------
Total Earnings -Controlling Interests $219 $(2) $(2) $217
======== ========== ======= ======
EARNINGS PER SHARE, BASIC $0.34 $- $- $0.34
------------------------------------ ======== ========== ======= ======
EARNINGS PER SHARE, DILUTED $0.34 $(0.01) $(0.01) $0.33
------------------------------------ ======== ========== ======= ======
A - Primarily Sonatrach settlement.
Weighted Average Shares (reported and ongoing) - in millions
Basic 647
Diluted 650
Spectra Energy Corp
Reported to Ongoing Earnings Reconciliation
December 2008 Quarter-to-date
(In millions, except per-share amounts)
Discont-
-inued Total Ongoing
Reported Special Opera- Adjust- Earn-
Earnings Items tions ments ings
-------- ------- -------- ------- ------
SEGMENT EARNINGS BEFORE INTEREST AND
TAXES FROM CONTINUING OPERATIONS
---------------------------------
U.S. Transmission $161 $44 A $- $44 $205
Distribution 90 - - - 90
Western Canada Transmission &
Processing 65 - - - 65
Field Services 69 - - - 69
-------- ------- -------- ------- ------
Total Reportable Segment EBIT 385 44 - 44 429
Other (21) - - - (21)
-------- ------- -------- ------- ------
Total Reportable Segment and
Other EBIT $364 $44 $- $44 $408
======== ====== ======== ======== =====
EARNINGS
---------------------------------
Total Reportable Segment EBIT and
Other EBIT $364 $44 $- $44 $408
Interest Expense (166) - - - (166)
Interest Income and Other 29 - - - 29
Income Taxes from Continuing
Operations (43) (14) - (14) (57)
Discontinued Operations, net of Tax 3 - (3)B (3) -
-------- ------- -------- ------- ------
Total Earnings $187 $30 $(3) $27 $214
Total Earnings - Noncontrolling
Interests (16) - (1) $(1) (17)
-------- ------- -------- ------- ------
Total Earnings - Controlling
Interests $171 $30 $(4) $26 $197
======== ====== ======== ======== =====
EARNINGS PER SHARE, BASIC $0.28 $0.05 $(0.01) $0.04 $0.32
--------------------------------- ======== ====== ======== ======== =====
EARNINGS PER SHARE, DILUTED $0.28 $0.05 $(0.01) $0.04 $0.32
--------------------------------- ======== ====== ======== ======== =====
A - Impairment associated with Islander East project.
B - Net results from Nevis and Brazeau River gathering and processing
facilities in Western Canada.
Weighted Average Shares (reported and ongoing) - in millions
Basic 611
Diluted 612
Spectra Energy Corp
Reported to Ongoing Earnings Reconciliation
December 2009 Year-to-date
(In millions, except per-share amounts)
Discont-
-inued Total Ongoing
Reported Special Opera- Adjust- Earn-
Earnings Items tions ments ings
-------- ------- -------- ------- ------
SEGMENT EARNINGS BEFORE INTEREST
AND TAXES FROM CONTINUING OPERATIONS
-------------------------------------
U.S. Transmission $894 $- $- $- $894
Distribution 336 - - - 336
Western Canada Transmission &
Processing 343 - - - 343
Field Services 296 (135)A - (135) 161
Total Reportable Segment EBIT 1,869 (135) - (135) 1,734
Other (74) - - - (74)
-------- ------- -------- ------- ------
Total Reportable Segment and
Other EBIT $1,795 $(135) $- $(135) $1,660
======== ====== ======== ======== =====
EARNINGS
-------------------------------------
Total Reportable Segment EBIT and
Other EBIT $1,795 $(135) $- $(135) $1,660
Interest Expense (610) - - - (610)
Interest Income and Other 86 - - - 86
Income Taxes from Continuing
Operations (353) 50 - 50 (303)
Discontinued Operations, net of Tax 5 - (5)B (5) -
-------- ------- -------- ------- ------
Total Earnings $923 $(85) $(5) $(90) $833
Total Earnings - Noncontrolling
Interests (75) - - - (75)
-------- ------- -------- ------- ------
Total Earnings - Controlling
Interests $848 $(85) $(5) $(90) $758
======== ====== ======== ======== =====
EARNINGS PER SHARE, BASIC $1.32 $(0.13) $(0.01) $(0.14) $1.18
-------------------------------- ======== ====== ======== ======== =====
EARNINGS PER SHARE, DILUTED $1.32 $(0.13) $(0.01) $(0.14) $1.18
-------------------------------- ======== ====== ======== ======== =====
A - Recognition of a deferred gain associated with units previously issued
by DCP Midstream's master limited partnership.
B - Primarily Sonatrach settlement.
Weighted Average Shares (reported and ongoing) - in millions
Basic 642
Diluted 643
Spectra Energy Corp
Reported to Ongoing Earnings Reconciliation
December 2008 Year-to-date
(In millions, except per-share amounts)
Discont-
-inued Total Ongoing
Reported Special Opera- Adjust- Earn-
Earnings Items tions ments ings
-------- ------- -------- ------- ------
SEGMENT EARNINGS BEFORE INTEREST AND
TAXES FROM CONTINUING OPERATIONS
---------------------------------
U.S. Transmission $844 $17A $- $17 $861
Distribution 353 - - - 353
Western Canada Transmission &
Processing 398 - - - 398
Field Services 716 - - - 716
Total Reportable Segment EBIT 2,311 17 - 17 2,328
Other (78) - - - (78)
-------- ------- ------ ------ -------
Total Reportable Segment and
Other EBIT $2,233 $17 $- $17 $2,250
======== ====== ====== ====== ======
EARNINGS
---------------------------------
Total Reportable Segment EBIT and
Other EBIT $2,233 $17 $- $17 $2,250
Interest Expense (636) - - - (636)
Interest Income and Other 91 - - - 91
Income Taxes from Continuing
Operations (496) (5) - (5) (501)
Discontinued Operations, net of Tax 2 - (2)B (2) -
Total Earnings $1,194 $12 $(2) $10 $1,204
Total Earnings - Noncontrolling
Interests (65) - 2 $2 (63)
-------- ------- ------ ------ -------
Total Earnings - Controlling
Interests $1,129 $12 $- $12 $1,141
======== ====== ====== ====== ======
EARNINGS PER SHARE, BASIC $1.82 $0.02 $- $0.02 $1.84
-------------------------------- ======== ====== ====== ====== ======
EARNINGS PER SHARE, DILUTED $1.81 $0.02 $- $0.02 $1.83
-------------------------------- ======== ====== ====== ====== ======
A - Bankruptcy settlement of customer's transportation contract and
impairment associated with Islander East project.
B - Net results from Nevis and Brazeau River gathering and processing
facilities in Western Canada.
Weighted Average Shares (reported and ongoing) - in millions
Basic 622
Diluted 624
SOURCE Spectra Energy
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