8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

February 5, 2009 (February 5, 2009)

SPECTRA ENERGY CORP

(Exact name of registrant as specified in its charter)

Delaware	1-33007	20-5413139
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

5400 Westheimer Court, Houston, Texas	77056
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code 713-627-5400

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On February 5, 2009, Spectra Energy Corp issued a news release announcing its financial results for the fourth quarter and year ended December 31, 2008. A copy of this news release is attached hereto as Exhibit 99.1. The information in Exhibit 99.1 is being furnished pursuant to this Item 2.02.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

99.1 Press Release of Spectra Energy Corp, dated February 5, 2009

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SPECTRA ENERGY CORP

/s/ J. Patrick Reddy

J. Patrick Reddy

Chief Financial Officer

Date: February 5, 2009

EXHIBIT INDEX

Exhibit Number	Exhibit
99.1	Press Release of Spectra Energy Corp, dated February 5, 2009

EX-99.1

Exhibit 99.1

Media:	Wendy Olson
	(713) 627-4072
	(713) 627-4747 (24-hour media line)
Analysts:	John Arensdorf
	(713) 627-4600
Date:	February 5, 2009

Spectra Energy Reports Year-End and Fourth Quarter 2008 Results,

Announces 2009 Outlook

• 2008 Year-End Results

o Reported diluted earnings per share (EPS) of $1.81, versus $1.51 in 2007. Ongoing diluted EPS of $1.83, versus $1.52 in 2007; results exceeded the 2008 $1.56 EPS employee incentive target by 17 percent

o Reported net income of $1.13 billion, versus $957 million in 2007; ongoing net income of $1.14 billion, versus $965 million in prior year

o Placed $1.8 billion of expansion projects into service, expected to deliver returns on capital employed in excess of 10 to 12 percent targeted range

• Fourth Quarter Results

o Reported net income of $171 million, $0.28 EPS, versus prior year quarter’s $291 million, $0.46 EPS

o Ongoing net income of $197 million, $0.32 EPS, versus $296 million, $0.47 EPS, in prior year quarter

• 2009 Outlook

o 2009 ongoing diluted EPS target of $1.15

o 2009 capital expansion program set at $500 million, recognizing current market environment

o Company expects to place approximately $650 million of capital expansion projects into service

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HOUSTON – Spectra Energy Corp (NYSE: SE) today reported 2008 net income of $1.13 billion, or $1.81 diluted earnings per share (EPS), an increase from $957 million, $1.51 EPS, in 2007. Ongoing 2008 net income was $1.14 billion, or $1.83 EPS, compared with $965 million, $1.52 EPS, in the prior year.

The annual results reflect strong earnings and sound operating performance from all underlying businesses. The company benefited from expansion projects placed into service in both 2007 and 2008 and higher commodity prices during the year.

“We delivered excellent financial results, executed extremely well on the completion of a record $1.8 billion in new projects and increased our dividend 14 percent during the year,” said Greg Ebel, president and chief executive officer, Spectra Energy Corp. “We also took some key, proactive steps to ensure we are well positioned to manage current economic challenges.”

The company reported 2008 fourth quarter net income of $171 million, or $0.28 diluted EPS, compared with $291 million, $0.46 diluted EPS, in the prior year quarter. After removing the effect of the impairment of the company’s investment in the Islander East project, ongoing net income for the 2008 quarter was $197 million, or $0.32 EPS, versus $296 million, or $0.47 EPS, in the 2007 quarter. The decrease is primarily due to lower commodity prices and a lower Canadian dollar.

SEGMENT RESULTS

U.S. Transmission

U.S. Transmission reported fourth quarter 2008 earnings before interest and taxes (EBIT) of $161 million, compared with $221 million in fourth quarter 2007. The decrease includes a $44 million special item for an impairment of the Islander East project caused by adverse legal rulings and unfavorable economic conditions.

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Excluding the above special item, ongoing EBIT for fourth quarter 2008 was $205 million, compared with $221 million in the prior year quarter. The segment benefited from higher EBIT from business expansion projects during the 2008 period. The increase in earnings was offset by lower processing revenues, resulting from lower volumes and prices, and higher development costs associated with ongoing pipeline and storage expansion projects.

Year-end reported EBIT for U.S. Transmission was $844 million, compared with $894 million in 2007.

Distribution

Distribution reported fourth quarter 2008 EBIT of $90 million, compared with $84 million in fourth quarter 2007. These improved results reflect the continued increase in storage and transportation revenues, lower operating costs and increased customer usage as a result of colder weather, which was 13 percent colder than the 2007 quarter. The improvements were partially offset by a weaker Canadian dollar and earnings sharing with customers related to the incentive regulation framework implemented in 2008.

Year-end EBIT for Distribution was $353 million, compared with $322 million in 2007.

Western Canada Transmission & Processing

Western Canada Transmission & Processing reported fourth quarter 2008 EBIT of $65 million, compared with $141 million in fourth quarter 2007. The decrease resulted primarily from lower frac spreads at the Empress operations and a weaker Canadian dollar.

Year-end EBIT for Western Canada Transmission & Processing was $398 million, compared with $359 million in 2007.

Field Services

Field Services reported fourth quarter 2008 EBIT of $69 million, compared with $188 million in fourth quarter 2007. The decrease was primarily driven by lower natural gas

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liquids (NGL) prices, which correlate to lower crude oil prices. Crude oil averaged $59 per barrel in fourth quarter 2008 versus $91 per barrel during the same period in 2007. In addition, the NGL to crude oil relationship decreased quarter over quarter, from 65 percent to 46 percent. The decrease from NGL prices was partially offset by non-cash mark-to-market gains compared with mark-to-market losses in fourth quarter 2007, both from hedges used to protect distributable cash flow at DCP Midstream’s master limited partnership.

For the quarter, DCP Midstream paid distributions of $105 million to Spectra Energy.

Year-end reported EBIT for Field Services was $716 million, compared with $533 million in 2007.

Other

“Other” reported net costs of $21 million in fourth quarter 2008, compared with $56 million reported in fourth quarter 2007, which included $7 million of costs to achieve the launch of Spectra Energy. Excluding these, net corporate costs were $28 million lower in fourth quarter 2008, reflecting lower general corporate and benefits costs.

Year-end reported net costs for “Other” were $78 million, compared with $112 million in 2007.

Interest Expense

Interest expense was $166 million for both the 2008 and 2007 fourth quarters. Interest on higher debt balances in 2008 was offset by lower interest rates and the effects of a lower Canadian dollar.

Interest expense for 2008 was $636 million compared with $633 million in 2007.

Income Taxes

Fourth quarter 2008 income tax expense from continuing operations was $43 million, compared with $128 million reported in fourth quarter 2007. The effective tax rate was 20 percent in fourth quarter 2008, compared with 31 percent in the prior year quarter.

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The lower tax rate this quarter was primarily due to favorable adjustments in 2008 for final 2007 tax returns and lower 2008 state income taxes.

The annual effective tax rate for 2008 was 31 percent compared with 32 percent in 2007.

Special Items Affecting Spectra Energy’s EPS for the Quarter Include:

(in millions, except per share amounts)

	Pre-tax Amount			Tax Effect		Net Income Impact			EPS Impact
Fourth Quarter 2008
Impairment on Islander East Project	$	(44	)	$	14	$	(30	)	$	(0.05	)
Total	$	(44	)	$	14	$	(30	)	$	(0.05	)
Fourth Quarter 2007
Separation Costs	$	(7	)	$	2	$	(5	)	$	(0.01	)
DCP Midstream Stand-alone Costs		(7	)		3		(4	)		(0.01	)
Total	$	(14	)	$	5	$	(9	)	$	(0.02	)

Reconciliation of Reported to Ongoing Net Income

( in millions)

	Quarters Ended December 31,						Years Ended December 31,
	2008			2007			2008		2007
Net Income as Reported	$	171		$	291		$	1,129	$	957
Adjustments to Reported Net Income:
Special Items		30			9			12		25
Discontinued Operations		(4	)		—			—		(17	)
Extraordinary Item		—			(4	)		—		—
Ongoing Net Income	$	197		$	296		$	1,141	$	965

Reconciliation of Reported to Ongoing Diluted EPS

	Quarters Ended December 31,						Years Ended December 31,
	2008			2007			2008		2007
Diluted EPS as Reported	$	0.28		$	0.46		$	1.81	$	1.51
Special Items		0.05			0.02			0.02		0.04
Discontinued Operations		(0.01	)		—			—		(0.03	)
Extraordinary Item		—			(0.01	)		—		—
Diluted EPS, Ongoing	$	0.32		$	0.47		$	1.83	$	1.52

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2009 Outlook

“Despite the current economic conditions, we begin the year in a strong position and expect to end the year strong,” said Ebel.

“While we are not immune to today’s market volatility, our strength permits us to continue completing our ongoing expansion plans and growing our core transmission, storage and distribution earnings over the long term,” he said. “With our commitment to maintain our financial flexibility and investment-grade balance sheet, we are positioned to take advantage of opportunities that may come our way this year.”

Highlights of the 2009 outlook:

• $1.15 ongoing diluted EPS target

• $1.00 per share annual dividend

• 2009 capital expansion budget set at $500 million

• Company expects to place approximately $650 million of capital expansion projects into service by year end, delivering annual EBIT of approximately $80 million, at top end of targeted 10 to 12 percent return on capital employed range

The company will discuss both its 2008 performance and 2009 outlook in greater detail during the call and webcast scheduled for today.

Additional Information

Additional information about the company’s 2008 performance, as well as the 2009 outlook, can be obtained via the Spectra Energy Web site at www.spectraenergy.com.

The analyst call is scheduled for 9 a.m. CT today, Thursday, February 5, to discuss Spectra Energy’s 2008 results, as well as review the 2009 outlook. The conference call can be accessed via the Investors Section of Spectra Energy’s Web site or by dialing (888) 252-3715 in the United States or Canada, or (706) 634-8942 for International. The conference code is “80303277” or “Spectra Energy Earnings Call.”

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Please call five to ten minutes prior to the scheduled start time. A replay of the call will be available until 8:00 p.m. CT, May 5, 2009, by dialing (800) 642-1687 with conference ID 80303277. 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

Spectra Energy’s management uses ongoing net income and ongoing diluted EPS, which are non-GAAP financial measures as they represent net income and diluted EPS from continuing operations, adjusted for special items, as measures 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 net income and 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.

The primary performance measure used by management to evaluate segment performance is segment EBIT from continuing operations, which at the segment level represents all profits from continuing operations (both operating and non-operating) before deducting interest and taxes, and is net of the minority interest expense related to those earnings. Management considers segment EBIT from continuing operations, which is the GAAP measure used to report segment results, to be a good indicator of each segment’s operating performance as it represents the results of our ownership interests in operations without regard to financing methods or capital structures.

Spectra Energy also uses 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. Management believes 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.

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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 levels of supply and demand for natural gas in our areas of operation; 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; our ability to successfully complete and integrate future acquisitions; the extent of success in connecting natural gas supplies to gathering, processing and transmission systems and in connecting to expanding gas markets; 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 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. 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 2007 Form 10-K,

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filed on February 29, 2008, 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 18,300 miles of transmission pipeline, approximately 270 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.

# # #

9

Spectra Energy Corp

Quarterly Highlights

December 2008

(Unaudited)

(In millions, except per share amounts and where noted)

	Quarters Ended December 31,						Years Ended December 31,
	2008			2007			2008			2007
COMMON STOCK DATA
Earnings Per Share From Continuing Operations
Basic	$	0.27		$	0.45		$	1.82		$	1.48
Diluted	$	0.27		$	0.45		$	1.81		$	1.48
Earnings Per Share—Total
Basic	$	0.28		$	0.46		$	1.82		$	1.51
Diluted	$	0.28		$	0.46		$	1.81		$	1.51
Dividends Per Share	$	0.25		$	0.22		$	0.96		$	0.88
Weighted-Average Shares Outstanding
Basic		611			632			622			632
Diluted		612			635			624			635
INCOME
Operating Revenues	$	1,261		$	1,387		$	5,074		$	4,704
Total Reportable Segment EBIT		385			634			2,311			2,108
Income from Discontinued Operations, Net of Tax		4			—			—			17
Net Income		171			291			1,129			957
EBIT BY BUSINESS SEGMENT
U.S. Transmission	$	161		$	221		$	844		$	894
Distribution		90			84			353			322
Western Canada Transmission & Processing		65			141			398			359
Field Services		69			188			716			533
Total Reportable Segment EBIT	$	385		$	634		$	2,311		$	2,108
Other EBIT		(21	)		(56	)		(78	)		(112	)
Interest Expense		(166	)		(166	)		(636	)		(633	)
Interest Income and Other (a)		12			3			28			17
Consolidated Earnings From Continuing Operations Before Income Taxes	$	210		$	415		$	1,625		$	1,380
CAPITAL AND INVESTMENT EXPENDITURES (b)
U.S. Transmission							$	1,400		$	898
Distribution								373			369
Western Canada Transmission & Processing								222			195
Other								35			39
Total Capital and Investment Expenditures							$	2,030		$	1,501
							December 31,
							2008			2007
CAPITALIZATION
Common Equity								34	%		40	%
Minority Interests								4	%		5	%
Total Debt								62	%		55	%
Total Debt							$	10,047		$	9,398
Book Value Per Share							$	9.07		$	10.85
Actual Shares Outstanding								611			632

(a) Other includes foreign currency transaction gains and losses and additional minority interest not allocated to the segment results.

(b) Includes loans to affiliates for capital expansion projects.

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Spectra Energy Corp

Quarterly Highlights

December 2008

(Unaudited)

(In millions, except where noted)

	Quarters Ended December 31,						Years Ended December 31,
	2008			2007			2008			2007
U.S. TRANSMISSION
Operating Revenues	$	395		$	407		$	1,600		$	1,540
Operating Expenses
Operating, Maintenance and Other		162			145			595			473
Depreciation and Amortization		58			55			232			217
Gains on Sales of Other Assets and Other, net		10			7			42			8
Other Income and Expenses, net		(8	)		22			86			85
Minority Interest Expense		16			15			57			49
EBIT	$	161		$	221		$	844		$	894
Proportional Throughput, Tbtu (a)		622			561			2,218			2,202
DISTRIBUTION
Operating Revenues	$	558		$	569		$	1,991		$	1,899
Operating Expenses
Natural Gas Purchased		347			333			1,094			1,059
Operating, Maintenance and Other		88			109			372			361
Depreciation and Amortization		37			43			175			162
Gains on Sales of Other Assets, net		—			—			—			5
Other Income and Expenses, net		4			—			3			—
EBIT	$	90		$	84		$	353		$	322
Number of Customers, thousands								1,309			1,289
Heating Degree Days, Fahrenheit		2,676			2,370			7,491			7,070
Pipeline Throughput, Tbtu		269			254			900			844
WESTERN CANADA TRANSMISSION & PROCESSING
Operating Revenues	$	308		$	414		$	1,482		$	1,266
Operating Expenses
Natural Gas and Petroleum Products Purchased		112			121			496			361
Operating, Maintenance and Other		103			113			445			405
Depreciation and Amortization		33			37			147			135
Other Income and Expenses, net		5			—			5			—
Minority Interest Expense		—			2			1			6
EBIT	$	65		$	141		$	398		$	359
Pipeline Throughput, Tbtu		161			160			615			596
Volumes Processed, Tbtu		172			178			698			709
Empress Inlet Volumes, Tbtu		176			201			820			722
FIELD SERVICES
Equity in Earnings of DCP Midstream, LLC	$	69		$	188		$	716		$	533
EBIT	$	69		$	188		$	716		$	533
Natural Gas Gathered and Processed/Transported, Tbtu/day (b)		7.1			6.9			7.1			6.8
Natural Gas Liquids Production, MBbl/d (b,c)		343			381			360			363
Average Natural Gas Price Per MMBtu (d)	$	6.94		$	6.97		$	9.03		$	6.86
Average Natural Gas Liquids Price Per Gallon	$	0.64		$	1.40		$	1.23		$	1.11
OTHER
Operating Revenues	$	13		$	8		$	45		$	31
Operating Expenses		40			65			125			150
Other Income and Expenses, net		6			1			2			7
EBIT	$	(21	)	$	(56	)	$	(78	)	$	(112	)

(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

11

Spectra Energy Corp

Condensed Consolidated Statements of Operations

(Unaudited)

(In millions)

	Quarters Ended December 31,				Years Ended December 31,
	2008		2007		2008		2007
Operating Revenues	$	1,261	$	1,387	$	5,074	$	4,704
Operating Expenses		967		1,010		3,636		3,291
Gains on Sales of Other Assets and Other, net		10		7		42		13
Operating Income		304		384		1,480		1,426
Other Income and Expenses		89		218		844		649
Interest Expense		166		166		636		633
Minority Interest Expense		17		21		63		62
Earnings From Continuing Operations Before Income Taxes		210		415		1,625		1,380
Income Tax Expense From Continuing Operations		43		128		496		440
Income From Continuing Operations		167		287		1,129		940
Income From Discontinued Operations, net of tax		4		—		—		17
Income Before Extraordinary Items		171		287		1,129		957
Extraordinary Items, net of tax		—		4		—		—
Net Income	$	171	$	291	$	1,129	$	957

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Spectra Energy Corp

Condensed Consolidated Balance Sheets

(Unaudited)

(In millions)

	December 31, 2008		December 31, 2007
ASSETS
Current Assets	$	1,450	$	1,379
Investments and Other Assets		5,950		6,359
Net Property, Plant and Equipment		13,639		14,300
Regulatory Assets and Deferred Debits		885		932
Total Assets	$	21,924	$	22,970
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities	$	3,044	$	2,422
Long-term Debt		8,290		8,345
Deferred Credits and Other Liabilities		4,355		4,540
Minority Interests		695		806
Stockholders’ Equity		5,540		6,857
Total Liabilities and Stockholders’ Equity	$	21,924	$	22,970

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Spectra Energy Corp

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In millions)

	Years Ended December 31,
	2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	1,129		$	957
Adjustments to reconcile net income to net cash provided by operating activities		676			510
Net cash provided by operating activities		1,805			1,467
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used in investing activities		(1,888	)		(1,544	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash provided by (used in) financing activities		214			(191	)
Effect of exchange rate changes on cash		(11	)		63
Net increase (decrease) in cash and cash equivalents		120			(205	)
Cash and cash equivalents at beginning of period		94			299
Cash and cash equivalents at end of period	$	214		$	94

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Spectra Energy Corp

Reported to Ongoing Earnings Reconciliation

December 2008 Quarter-to-date

(In millions, except per-share amounts)

	Reported Earnings			Special Items (Note 1)			Discontinued Operations			Total Adjustments			Ongoing Earnings
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 EBIT 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		12			—			—			—			12
Income Taxes from Continuing Operations		(43	)		(14	)		—			(14	)		(57	)
Discontinued Operations, Net of Tax		4			—			(4	)B		(4	)		—
Total Earnings	$	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

Note 1 - Amounts for special items are net of minority interest, if applicable.

A - Impairment associated with Islander East project.

B - Net results from Nevis and Brazeau River gathering and processing facilities in Western Canada that were sold in the fourth quarter.

Weighted Average Shares (reported and ongoing) - in millions
Basic	611
Diluted	612

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Spectra Energy Corp

Reported to Ongoing Earnings Reconciliation

December 2007 Quarter-to-date

(In millions, except per-share amounts)

	Reported Earnings			Special Items (Note 1)			Extraordinary Item			Total Adjustments			Ongoing Earnings
SEGMENT EARNINGS BEFORE INTEREST AND TAXES FROM CONTINUING OPERATIONS
U.S. Transmission	$	221		$	—		$	—		$	—		$	221
Distribution		84			—						—			84
Western Canada Transmission & Processing		141			—			—			—			141
Field Services		188			7	A		—			7			195
Total Reportable Segment EBIT		634			7			—			7			641
Other		(56	)		7	B		—			7			(49	)
Total Reportable Segment EBIT and Other EBIT	$	578		$	14		$	—		$	14		$	592
EARNINGS
Total Reportable Segment EBIT and Other EBIT	$	578		$	14		$	—		$	14		$	592
Interest Expense		(166	)		—			—			—			(166	)
Interest Income and Other		3			—			—			—			3
Income Taxes from Continuing Operations		(128	)		(5	)		—			(5	)		(133	)
Extraordinary Items, Net of Tax		4			—			(4	)C		(4	)		—
Total Earnings	$	291		$	9		$	(4	)	$	5		$	296
EARNINGS PER SHARE, BASIC	$	0.46		$	0.02		$	(0.01	)	$	0.01		$	0.47
EARNINGS PER SHARE, DILUTED	$	0.46		$	0.02		$	(0.01	)	$	0.01		$	0.47

Note 1 - Amounts for special items are net of minority interest, if applicable

A - Costs to create stand-alone corporate functions at DCP Midstream.

B - Separation costs resulting from the spin-off from Duke Energy.

C - Adjustment of deferred tax liability for deregulated storage at Distribution.

Weighted Average Shares (reported and ongoing)—in millions
Basic	632
Diluted	635

16

Spectra Energy Corp

Reported to Ongoing Earnings Reconciliation

December 2008 Year-to-date

(In millions, except per-share amounts)

	Reported Earnings			Special Items (Note 1)			Total Adjustments			Ongoing Earnings
SEGMENT EARNINGS BEFORE INTEREST AND TAXES FROM CONTINUING OPERATIONS
U.S. Transmission	$	844		$	17	A	$	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 EBIT 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		28			—			—			28
Income Taxes from Continuing Operations		(496	)		(5	)		(5	)		(501	)
Total Earnings	$	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

Note 1 - Amounts for special items are net of minority interest, if applicable.

A - Bankruptcy settlement of customer’s transportation contract and impairment associated with Islander East project.

Weighted Average Shares (reported and ongoing)—in millions
Basic	622
Diluted	624

17

Spectra Energy Corp

Reported to Ongoing Earnings Reconciliation

December 2007 Year-to-date

(In millions, except per-share amounts)

	Reported Earnings			Special Items (Note 1)			Discontinued Operations			Total Adjustments			Ongoing Earnings
SEGMENT EARNINGS BEFORE INTEREST AND TAXES FROM CONTINUING OPERATIONS
U.S. Transmission	$	894		$	—		$	—		$	—		$	894
Distribution		322			—			—			—			322
Western Canada Transmission & Processing		359			—			—			—			359
Field Services		533			16	A		—			16			549
Total Reportable Segment EBIT		2,108			16			—			16			2,124
Other		(112	)		23	B		—			23			(89	)
Total Reportable Segment EBIT and Other EBIT	$	1,996		$	39		$	—		$	39		$	2,035
EARNINGS
Total Reportable Segment EBIT and Other EBIT	$	1,996		$	39		$	—		$	39		$	2,035
Interest Expense		(633	)		—			—			—			(633	)
Interest Income and Other		17			—			—			—			17
Income Taxes from Continuing Operations		(440	)		(14	)		—			(14	)		(454	)
Discontinued Operations, Net of Tax		17			—			(17	)C		(17	)		—
Total Earnings	$	957		$	25		$	(17	)	$	8		$	965
EARNINGS PER SHARE, BASIC	$	1.51		$	0.04		$	(0.03	)	$	0.01		$	1.52
EARNINGS PER SHARE, DILUTED	$	1.51		$	0.04		$	(0.03	)	$	0.01		$	1.52

Note 1 - Amounts for special items are net of minority interest, if applicable.

A - Costs to create stand-alone corporate functions at DCP Midstream.

B - Separation costs resulting from the spin-off from Duke Energy.

C - Sonatrach settlement, Ft. Frances revenue sharing and net results from Nevis and Brazeau River gathering and processing facilities, partially offset by LNG Litigation costs.

Weighted Average Shares (reported and ongoing) - in millions
Basic	632
Diluted	635

18