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 4, 2010 (February 4, 2010)

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 4, 2010, Spectra Energy Corp issued a news release announcing its financial results for the fourth quarter and year ended December 31, 2009. 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 4, 2010

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 4, 2010

EXHIBIT INDEX

Exhibit Number	Exhibit
99.1	Press Release of Spectra Energy Corp, dated February 4, 2010

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 4, 2010

Spectra Energy Reports Fourth Quarter and Year-End 2009 Results

o $1.18 ongoing 2009 diluted earnings per share (EPS); exceeded $1.15 EPS target.

o Placed $650 million of expansion projects into service, delivering returns on capital employed of more than 12 percent.

o Almost $3 billion in new expansion growth projects secured through customer contracts signed in 2009.

o 2010 expectation of $1.42 EPS; 8 to 10 percent compound annual EPS growth rate for 2010 to 2012.

HOUSTON – 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.

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.

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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

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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

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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.

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Special Items Affecting Spectra Energy’s EPS for the Quarters Include: (in millions, except per-share amounts)
	Pre-tax Amount			Tax Effect		Net Income– Controlling Interests 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 December 31,						Years Ended 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 December 31,						Years Ended 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.”

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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 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.

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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

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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.

# # #

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Spectra Energy Corp

Quarterly Highlights

December 2009

(Unaudited)

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

	Quarters Ended December 31,						Years Ended 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.

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Spectra Energy Corp

Quarterly Highlights

December 2009

(Unaudited)

(In millions, except where noted)

	Quarters Ended December 31,						Years Ended 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

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Spectra Energy Corp

Condensed Consolidated Statements of Operations

(Unaudited)

(In millions)

	Quarters Ended December 31,				Years Ended 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

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Spectra Energy Corp

Condensed Consolidated Balance Sheets

(Unaudited)

(In millions)

	December 31, 2009		December 31, 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

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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

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Spectra Energy Corp

Reported to Ongoing Earnings Reconciliation

December 2009 Quarter-to-date

(In millions, except per-share amounts)

		Reported Earnings			Discontinued Operations			Total Adjustments			Ongoing 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

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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			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 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

15

Spectra Energy Corp

Reported to Ongoing Earnings Reconciliation

December 2009 Year-to-date

(In millions, except per-share amounts)

		Reported Earnings			Special Items			Discontinued Operations			Total Adjustments			Ongoing Earnings
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

16

Spectra Energy Corp

Reported to Ongoing Earnings Reconciliation

December 2008 Year-to-date

(In millions, except per-share amounts)

		Reported Earnings			Special Items			Discontinued Operations			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 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

17