10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2012

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to            

Commission file number 1-33007

SPECTRA ENERGY CORP

(Exact Name of Registrant as Specified in its Charter)

Delaware	20-5413139
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

5400 Westheimer Court

Houston, Texas 77056

(Address of principal executive offices, including zip code)

713-627-5400

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of Exchange Act.

Large accelerated filer  x    Accelerated filer  ¨    Non-accelerated filer  ¨    Smaller reporting company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Number of shares of Common Stock, $0.001 par value, outstanding as of March 31, 2012: 652,738,453

SPECTRA ENERGY CORP

FORM 10-Q FOR THE QUARTER ENDED

March 31, 2012

INDEX

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)		4
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2012 and 2011		4
	Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2012 and 2011		5
	Condensed Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011		6
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2012 and 2011		8
	Condensed Consolidated Statements of Equity for the three months ended March 31, 2012 and 2011		9
	Notes to Condensed Consolidated Financial Statements		10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		31
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		40
Item 4.	Controls and Procedures		40
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		41
Item 1A.	Risk Factors		41
Item 6.	Exhibits		41
	Signatures		42

2

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management’s beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as: anticipate, believe, intend, estimate, expect, continue, should, could, may, plan, project, predict, will, potential, forecast, and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to:

• state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, have an effect on rate structure, and affect the speed at and degree to which competition enters the natural gas industries;

• outcomes of litigation and regulatory investigations, proceedings or inquiries;

• weather and other natural phenomena, including the economic, operational and other effects of hurricanes and storms;

• the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates;

• general economic conditions, including the risk of a prolonged economic slowdown or decline, or the risk of delay in a recovery, which can affect the long-term demand for natural gas and related services;

• potential effects arising from terrorist attacks and any consequential or other hostilities;

• changes in environmental, safety and other laws and regulations;

• the development of alternative energy resources;

• 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;

• growth in opportunities, including the timing and success of efforts to develop U.S. and Canadian pipeline, storage, gathering, processing and other related infrastructure projects and the effects of competition;

• the performance of natural gas transmission and storage, distribution, and gathering and processing facilities;

• the extent of success in connecting natural gas supplies to gathering, processing and transmission systems and in connecting to expanding gas markets;

• the effects of accounting pronouncements issued periodically by accounting standard-setting bodies;

• conditions of the capital markets during the periods covered by these forward-looking statements; and

• the ability to successfully complete merger, acquisition or divestiture plans; regulatory or other limitations imposed as a result of a merger, acquisition or divestiture; and the success of the business following a merger, acquisition or divestiture.

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 Spectra Energy Corp has described. Spectra Energy Corp undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

SPECTRA ENERGY CORP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In millions, except per-share amounts)

	Three Months Ended March 31,
	2012		2011
Operating Revenues
Transportation, storage and processing of natural gas	$	831	$	791
Distribution of natural gas		505		607
Sales of natural gas liquids		149		177
Other		59		37
Total operating revenues		1,544		1,612
Operating Expenses
Natural gas and petroleum products purchased		433		485
Operating, maintenance and other		321		314
Depreciation and amortization		184		175
Property and other taxes		88		85
Total operating expenses		1,026		1,059
Gains on Sales of Other Assets and Other, net		1		4
Operating Income		519		557
Other Income and Expenses
Equity in earnings of unconsolidated affiliates		118		106
Other income and expenses, net		16		6
Total other income and expenses		134		112
Interest Expense		157		155
Earnings From Continuing Operations Before Income Taxes		496		514
Income Tax Expense From Continuing Operations		137		139
Income From Continuing Operations		359		375
Income From Discontinued Operations, net of tax		2		7
Net Income		361		382
Net Income—Noncontrolling Interests		28		25
Net Income—Controlling Interests	$	333	$	357
Common Stock Data
Weighted-average shares outstanding
Basic		652		649
Diluted		655		651
Earnings per share from continuing operations
Basic and Diluted	$	0.51	$	0.54
Earnings per share
Basic and Diluted	$	0.51	$	0.55
Dividends per share	$	0.28	$	0.26

See Notes to Condensed Consolidated Financial Statements.

4

SPECTRA ENERGY CORP

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In millions)

	Three Months Ended March 31,
	2012		2011
Net Income	$	361	$	382
Other comprehensive income
Foreign currency translation adjustments		162		191
Unrealized mark-to-market net gain on hedges		—		1
Reclassification of cash flow hedges into earnings		2		3
Pension and benefits impact		5		8
Other		—		8
Total Comprehensive Income, net of tax		530		593
Less: Comprehensive Income—Noncontrolling Interests		30		28
Comprehensive Income—Controlling Interests	$	500	$	565

See Notes to Condensed Consolidated Financial Statements.

5

SPECTRA ENERGY CORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions)

	March 31, 2012		December 31, 2011
ASSETS
Current Assets
Cash and cash equivalents	$	105	$	174
Receivables, net		816		962
Inventory		258		393
Other		258		235
Total current assets		1,437		1,764
Investments and Other Assets
Investments in and loans to unconsolidated affiliates		2,090		2,064
Goodwill		4,492		4,420
Other		519		530
Total investments and other assets		7,101		7,014
Property, Plant and Equipment
Cost		24,575		23,932
Less accumulated depreciation and amortization		5,897		5,674
Net property, plant and equipment		18,678		18,258
Regulatory Assets and Deferred Debits		1,143		1,102
Total Assets	$	28,359	$	28,138

See Notes to Condensed Consolidated Financial Statements.

6

SPECTRA ENERGY CORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions, except per-share amounts)

	March 31, 2012		December 31, 2011
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	408	$	498
Short-term borrowings and commercial paper		1,031		1,052
Taxes accrued		87		82
Interest accrued		165		178
Current maturities of long-term debt		1,021		525
Other		557		766
Total current liabilities		3,269		3,101
Long-term Debt		9,749		10,146
Deferred Credits and Other Liabilities
Deferred income taxes		4,062		3,940
Regulatory and other		1,797		1,797
Total deferred credits and other liabilities		5,859		5,737
Commitments and Contingencies
Preferred Stock of Subsidiaries		258		258
Equity
Preferred stock, $0.001 par, 22 million shares authorized, no shares outstanding		—		—
Common stock, $0.001 par, 1 billion shares authorized, 653 million and 651 million shares outstanding at March 31, 2012 and December 31, 2011, respectively		1		1
Additional paid-in capital		4,822		4,814
Retained earnings		2,125		1,977
Accumulated other comprehensive income		1,440		1,273
Total controlling interests		8,388		8,065
Noncontrolling interests		836		831
Total equity		9,224		8,896
Total Liabilities and Equity	$	28,359	$	28,138

See Notes to Condensed Consolidated Financial Statements.

7

SPECTRA ENERGY CORP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In millions)

	Three Months Ended March 31,
	2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	361		$	382
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		187			178
Deferred income tax expense		74			109
Equity in earnings of unconsolidated affiliates		(118	)		(106	)
Distributions received from unconsolidated affiliates		114			104
Other		(72	)		55
Net cash provided by operating activities		546			722
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(343	)		(329	)
Investments in and loans to unconsolidated affiliates		—			(4	)
Acquisitions		(30	)		—
Purchases of held-to-maturity securities		(861	)		(214	)
Proceeds from sales and maturities of held-to-maturity securities		734			186
Purchases of available-for-sale securities		—			(548	)
Proceeds from sales and maturities of available-for-sale securities		14			576
Distributions received from unconsolidated affiliates		5			—
Other changes in restricted funds		79			(10	)
Other		—			11
Net cash used in investing activities		(402	)		(332	)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments for the redemption of long-term debt		—			(36	)
Net decrease in short-term borrowings and commercial paper		(26	)		(182	)
Net increase in revolving credit facilities borrowings		—			13
Distributions to noncontrolling interests		(27	)		(23	)
Dividends paid on common stock		(185	)		(170	)
Other		24			16
Net cash used in financing activities		(214	)		(382	)
Effect of exchange rate changes on cash		1			2
Net increase (decrease) in cash and cash equivalents		(69	)		10
Cash and cash equivalents at beginning of period		174			130
Cash and cash equivalents at end of period	$	105		$	140
Supplemental Disclosures
Property, plant and equipment noncash accruals	$	157		$	112

See Notes to Condensed Consolidated Financial Statements.

8

SPECTRA ENERGY CORP

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In millions)

	Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income
									Foreign Currency Translation Adjustments		Other			Noncontrolling Interests			Total
December 31, 2011	$	1	$	4,814		$	1,977		$	1,832	$	(559	)	$	831		$	8,896
Net income		—		—			333			—		—			28			361
Other comprehensive income		—		—			—			160		7			2			169
Dividends on common stock		—		—			(185	)		—		—			—			(185	)
Stock-based compensation		—		(1	)		—			—		—			—			(1	)
Distributions to noncontrolling interests		—		—			—			—		—			(25	)		(25	)
Spectra Energy common stock issued		—		9			—			—		—			—			9
March 31, 2012	$	1	$	4,822		$	2,125		$	1,992	$	(552	)	$	836		$	9,224
December 31, 2010	$	1	$	4,726		$	1,487		$	2,010	$	(415	)	$	678		$	8,487
Net income		—		—			357			—		—			25			382
Other comprehensive income		—		—			—			188		20			3			211
Dividends on common stock		—		—			(170	)		—		—			—			(170	)
Stock-based compensation		—		14			—			—		—			—			14
Distributions to noncontrolling interests		—		—			—			—		—			(23	)		(23	)
March 31, 2011	$	1	$	4,740		$	1,674		$	2,198	$	(395	)	$	683		$	8,901

See Notes to Condensed Consolidated Financial Statements.

9

SPECTRA ENERGY CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. General

The terms “we,” “our,” “us” and “Spectra Energy” as used in this report refer collectively to Spectra Energy Corp and its subsidiaries unless the context suggests otherwise. These terms are used for convenience only and are not intended as a precise description of any separate legal entity within Spectra Energy.

Nature of Operations. Spectra Energy Corp, through its subsidiaries and equity affiliates, owns and operates a large and diversified portfolio of complementary natural gas-related energy assets, operating in three key areas of the natural gas industry: gathering and processing, transmission and storage, and distribution. We provide transportation and storage of natural gas to customers in various regions of the northeastern and southeastern United States, the Maritime Provinces in Canada and the Pacific Northwest in the United States and Canada, and in the province of Ontario, Canada. We also provide natural gas sales and distribution services to retail customers in Ontario, and natural gas gathering and processing services to customers in western Canada. In addition, we own a 50% interest in DCP Midstream, LLC (DCP Midstream), one of the largest natural gas gatherers and processors in the United States.

Basis of Presentation. The accompanying Condensed Consolidated Financial Statements include our accounts and the accounts of our majority-owned subsidiaries. These interim financial statements should be read in conjunction with the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2011, and reflect all normal recurring adjustments that are, in our opinion, necessary to fairly present our results of operations and financial position. Amounts reported in the Condensed Consolidated Statements of Operations are not necessarily indicative of amounts expected for the respective annual periods due to the effects of seasonal temperature variations on energy consumption, primarily in our gas distribution operations, as well as changing commodity prices on certain of our processing operations and other factors.

During the third quarter of 2011, we identified errors in our previously issued Condensed Consolidated Statements of Cash Flows related to the accounting for rollovers of outstanding borrowings under our revolving bank credit facilities. These rollovers, which are extensions of borrowings beyond their scheduled due dates that did not involve the exchange of cash, were previously accounted for as cash activities and resulted in the overstatement of both Proceeds from the Issuance of Long-Term Debt and Payments for the Redemption of Long-Term Debt for the three months ended March 31, 2011. Cash and Cash Equivalents and Net Cash Used In Financing Activities as previously reported are not affected by the errors. We evaluated materiality from both a qualitative and a quantitative perspective and concluded that the errors are immaterial to our previously issued Condensed Consolidated Statements of Cash Flows.

In addition to making this correction, effective the third quarter of 2011, we elected to present cash borrowings and repayments under our revolving bank credit facilities on a net basis for all periods presented as Net Increase in Revolving Credit Facilities Borrowings. As these periodic borrowings and repayments are generally of significant amounts and had terms of 90 days or less, we believe our current presentation provides users with more meaningful and relevant information about our long-term debt financing activities.

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The correction and change in presentation reflected on the Condensed Consolidated Statement of Cash Flows are as follows:

	Proceeds From the Issuance of Long-Term Debt			Payments For the Redemption of Long-Term Debt
	(in millions)
Three Months Ended March 31, 2011
As previously reported	$	919		$	(942	)
Less non-cash activity		(896	)		896
As corrected		23			(46	)
Less revolving credit facility activity		(23	)		10
Long-term debt activity	$	—		$	(36	)

Use of Estimates. To conform with generally accepted accounting principles (GAAP) in the United States, we make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and Notes to Condensed Consolidated Financial Statements. Although these estimates are based on our best available knowledge at the time, actual results could differ.

2. Business Segments

We manage our business in four reportable segments: U.S. Transmission, Distribution, Western Canada Transmission & Processing and Field Services. The remainder of our business operations is presented as “Other,” and consists of unallocated corporate costs, 100%-owned captive insurance subsidiaries, employee benefit plan assets and liabilities, and other miscellaneous activities.

Our chief operating decision maker regularly reviews financial information about each of these segments in deciding how to allocate resources and evaluate performance. There is no aggregation of segments within our reportable business segments.

U.S. Transmission provides transportation and storage of natural gas for customers in various regions of the northeastern and southeastern United States and the Maritime Provinces in Canada. The natural gas transmission and storage operations in the U.S. are primarily subject to the rules and regulations of the Federal Energy Regulatory Commission (FERC). Spectra Energy Partners, LP (Spectra Energy Partners), a master limited partnership, is part of the U.S. Transmission segment.

Distribution provides retail natural gas distribution service in Ontario, Canada, as well as natural gas transportation and storage services to other utilities and energy market participants. These services are provided by Union Gas Limited (Union Gas), and are primarily subject to the rules and regulations of the Ontario Energy Board (OEB).

Western Canada Transmission & Processing provides transportation of natural gas, natural gas gathering and processing services, and natural gas liquids (NGLs) extraction, fractionation, transportation, storage and marketing to customers in western Canada and the northern tier of the United States. This segment conducts business mostly through BC Pipeline, BC Field Services, and the NGL marketing and Canadian Midstream businesses. BC Pipeline and BC Field Services operations are primarily subject to the rules and regulations of Canada’s National Energy Board (NEB).

Field Services gathers, processes, treats, compresses, transports and stores natural gas. In addition, this segment also fractionates, transports, gathers, treats, processes, stores, markets and trades NGLs. It conducts operations through DCP Midstream, which is owned 50% by us and 50% by Phillips 66. DCP Midstream gathers raw natural gas through gathering systems located in nine major conventional and non-conventional natural gas

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producing regions: Mid-Continent, Rocky Mountain, East Texas-North Louisiana, Barnett Shale, Gulf Coast, South Texas, Central Texas, Antrim Shale and Permian Basin. DCP Midstream has a 27% ownership interest in DCP Midstream Partners, LP (DCP Partners), a master limited partnership.

During the third quarter of 2011, ConocoPhillips announced plans to separate its business into two stand-alone publicly traded companies. ConocoPhillips’ 50% ownership interest in DCP Midstream was transferred to the new downstream company, Phillips 66, on May 1, 2012. DCP Midstream does not anticipate that the change in ownership will have a material impact on its operations.

Our reportable segments offer different products and services and are managed separately as business units. Management evaluates segment performance based on earnings before interest and taxes (EBIT), which represents earnings from continuing operations (both operating and non-operating) before interest and taxes, net of noncontrolling interests related to those earnings. Cash, cash equivalents and short-term investments are managed centrally, so the associated realized and unrealized gains and losses from foreign currency transactions and interest and dividend income on those balances are excluded from the segments’ EBIT. Transactions between reportable segments are accounted for on the same basis as transactions with unaffiliated third parties.

Business Segment Data

	Unaffiliated Revenues		Intersegment Revenues			Total Operating Revenues (a)			Segment EBIT/ Consolidated Earnings from Continuing Operations before Income Taxes (a)
			(in millions)
Three Months Ended March 31, 2012
U.S. Transmission	$	493	$	2		$	495		$	271
Distribution		597		—			597			151
Western Canada Transmission & Processing		453		13			466			138
Field Services		—		—			—			93
Total reportable segments		1,543		15			1,558			653
Other		1		20			21			(29	)
Eliminations		—		(35	)		(35	)		—
Interest expense		—		—			—			157
Interest income and other (b)		—		—			—			29
Total consolidated	$	1,544	$	—		$	1,544		$	496
Three Months Ended March 31, 2011
U.S. Transmission	$	481	$	2		$	483		$	279
Distribution		696		—			696			167
Western Canada Transmission & Processing		433		6			439			141
Field Services		—		—			—			81
Total reportable segments		1,610		8			1,618			668
Other		2		15			17			(24	)
Eliminations		—		(23	)		(23	)		—
Interest expense		—		—			—			155
Interest income and other (b)		—		—			—			25
Total consolidated	$	1,612	$	—		$	1,612		$	514

(a) Excludes amounts associated with entities included in discontinued operations.

(b) Includes foreign currency transaction gains and losses and the add-back of noncontrolling interests related to segment EBIT.

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3. Regulatory Matters

Union Gas. Since 2012 is the final year in Union Gas’ current multi-year incentive regulation framework, Union Gas filed an application with the OEB in November 2011 to set their distribution rates effective January 1, 2013. Union Gas plans to file their application for a new multi-year incentive regulation framework after receiving the OEB decision on their 2013 rate application. The OEB decision on Union Gas’ rate application is expected in late 2012.

4. Income Taxes

Income tax expense from continuing operations for the three months ended March 31, 2012 was $137 million, compared to $139 million for the same period in 2011. The lower income tax expense resulted from lower earnings from continuing operations and a lower Canadian effective tax rate, substantially offset by favorable tax adjustments in the first quarter of 2011.

The effective tax rate for income from continuing operations for the three months ended March 31, 2012 was 28%, compared to 27% for the same period in 2011. The lower effective tax rate in the first quarter of 2011 was primarily due to favorable tax adjustments.

No material net change in uncertain tax benefits was recognized during the three months ended March 31, 2012. No material increases or decreases in uncertain tax benefits are expected to occur in the next 12 months.

5. Discontinued Operations

Discontinued operations is mostly comprised of the net effects of a settlement arrangement related to prior liquefied natural gas contracts. See Note 8 for further discussion.

The following table summarizes results classified as Income From Discontinued Operations, Net of Tax in the accompanying Condensed Consolidated Statements of Operations:

	Revenues		Pre-tax Earnings		Income Tax Expense		Income From Discontinued Operations, Net of Tax
	(in millions)
Three Months Ended March 31, 2012
Other	$	57	$	3	$	1	$	2
Total consolidated	$	57	$	3	$	1	$	2
Three Months Ended March 31, 2011
Other	$	84	$	10	$	3	$	7
Total consolidated	$	84	$	10	$	3	$	7

6. Earnings per Common Share

Basic earnings per common share (EPS) is computed by dividing net income from controlling interests by the weighted-average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income from controlling interests by the diluted weighted-average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other agreements to issue common stock, such as stock options, stock-based performance unit awards and phantom stock awards, were exercised, settled or converted into common stock.

Weighted-average shares used to calculate diluted EPS includes the effect of certain options and restricted stock awards. Certain other options related to approximately five million shares for the three months ended March 31, 2011 were not included in the calculation of diluted EPS because the option exercise prices were greater than the average market price of the shares during these periods.

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The following table presents our basic and diluted EPS calculations:

	Three Months Ended March 31,
	2012		2011
	(in millions, except per-share amounts)
Income from continuing operations, net of tax—controlling interests	$	331	$	350
Income from discontinued operations, net of tax—controlling interests		2		7
Net income—controlling interests	$	333	$	357
Weighted-average common shares, outstanding
Basic		652		649
Diluted		655		651
Basic and diluted earnings per common share (a)
Continuing operations	$	0.51	$	0.54
Discontinued operations, net of tax		—		0.01
Total basic and diluted earnings per common share	$	0.51	$	0.55

(a) Quarterly earnings-per-share amounts are stand-alone calculations and may not be additive to full-year amounts due to rounding.

7. Inventory

Inventory consists of natural gas and NGLs held in storage for transmission and processing, and also includes materials and supplies. Natural gas inventories primarily relate to the Distribution segment in Canada and are valued at costs approved by the OEB. The difference between the approved price and the actual cost of gas purchased is recorded in either accounts receivable or other current liabilities, as appropriate, for future disposition with customers, subject to approval by the OEB. The remaining inventory is recorded at cost, primarily using average cost. The components of inventory are as follows:

	March 31, 2012		December 31, 2011
	(in millions)
Natural gas	$	137	$	263
NGLs		46		58
Materials and supplies		75		72
Total inventory	$	258	$	393

8. Investments in and Loans to Unconsolidated Affiliates

Our most significant investment in unconsolidated affiliates is our 50% investment in DCP Midstream, which is accounted for under the equity method of accounting. The following represents summary financial information for DCP Midstream, presented at 100%:

	Three Months Ended March 31,
	2012		2011
	(in millions)
Operating revenues	$	2,902	$	2,929
Operating expenses		2,694		2,755
Operating income		208		174
Net income		155		125
Net income attributable to members’ interests		144		133

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DCP Midstream recorded gains on sales of common units of DCP Partners to equity in the first quarters of 2012 and 2011. Our proportionate 50% share, totaling $21 million and $14 million, respectively, was recorded in Equity in Earnings of Unconsolidated Affiliates in the Condensed Consolidated Statements of Operations.

Related Party Transactions. In 2008, we entered into a settlement agreement related to certain liquefied natural gas transportation contracts under which one of our subsidiaries’ claims were satisfied pursuant to commercial transactions involving the purchase of propane from certain parties. We subsequently entered into associated agreements with affiliates of DCP Midstream for the sale of these propane volumes. Net purchases and sales of propane under these arrangements are reflected as discontinued operations.

Sales of propane to affiliates of DCP Midstream are as follows:

	Three Months Ended March 31,
	2012		2011
	(in millions)
Sales of propane	$	57	$	84

9. Marketable Securities and Restricted Funds

We routinely invest excess cash and various restricted balances in securities such as commercial paper, bankers acceptances, corporate debt securities, treasury bills and money market funds in the United States and Canada. We do not purchase marketable securities for speculative purposes, nor do we routinely sell marketable securities prior to their scheduled maturity dates. Therefore, we do not have any securities classified as trading securities. A portion of our investments of restricted funds, primarily insurance-related funds, are classified as available-for-sale marketable securities as they may occasionally be sold prior to their scheduled maturity dates due to unexpected cash needs. Initial investments in securities are classified as purchases of the respective type of securities (available-for-sale (AFS) marketable securities or held-to-maturity (HTM) marketable securities). Maturities of securities are classified within proceeds from sales and maturities of securities in the Condensed Consolidated Statements of Cash Flows.

AFS Securities. We had no restricted AFS securities classified as Current Assets—Other as of March 31, 2012 and $14 million as of December 31, 2011, and $3 million as of March 31, 2012 and December 31, 2011 classified as Investments and Other Assets—Other. These restricted funds are related to insurance.

During 2010, we invested a portion of the proceeds from Spectra Energy Partners’ issuance of common units to the public in AFS marketable securities. These investments were pledged as collateral against Spectra Energy Partners’ term loan. Spectra Energy Partners’ term loan was repaid in June 2011 and the related investments were liquidated.

At March 31, 2012, the weighted-average contractual maturity of outstanding AFS securities was less than one year.

There were no gross unrealized holding gains or losses associated with investments in AFS securities at March 31, 2012 or December 31, 2011. Estimated fair values of AFS securities follow:

	Estimated Fair Value
	March 31, 2012		December 31, 2011
	(in millions)
Corporate debt securities	$	18	$	18
Canadian government securities		—		14
Money market funds		3		3
Total available-for-sale investments	$	21	$	35

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HTM Securities. HTM marketable securities, totaling $266 million as of March 31, 2012 and $162 million as of December 31, 2011, are classified as Investments and Other Assets—Other, and $28 million as of March 31, 2012 are classified as Current Assets—Other. These securities are restricted funds pursuant to certain Maritimes & Northeast Pipeline Limited Partnership (M&N LP) debt agreements. These funds, plus future cash from operations that would otherwise be available for distribution to the partners of M&N LP, are placed in escrow until the balance in escrow is sufficient to fund all future debt service on the M&N LP notes. The notes payable, totaling $208 million as of March 31, 2012, have semi-annual interest and principal payments and are due in 2019.

At March 31, 2012, the weighted-average contractual maturity of outstanding HTM securities was less than one year.

There were no gross unrecognized holding gains or losses associated with investments in HTM securities at March 31, 2012 or December 31, 2011. Estimated fair values of HTM securities follow:

	Estimated Fair Value
	March 31, 2012		December 31, 2011
	(in millions)
Canadian government securities	$	143	$	107
Bankers acceptance notes		151		55
Total held-to-maturity investments	$	294	$	162

Other Restricted Funds. In addition to the AFS and HTM securities described above, we had restricted funds totaling $37 million at March 31, 2012 and $35 million at December 31, 2011 classified as Current Assets—Other, and $79 million at December 31, 2011 classified as Investments and Other Assets—Other. These restricted funds are primarily related to additional amounts for the M&N LP debt service requirements.

Changes in restricted balances are presented with Cash Flows from Investing Activities on our Condensed Consolidated Statements of Cash Flows.

10. Debt and Credit Facilities

Available Credit Facilities and Restrictive Debt Covenants

	Expiration Date	Total Credit Facilities Capacity		Outstanding at March 31, 2012						Available Credit Facilities Capacity
				Commercial Paper		Letters of Credit		Total
		(in millions)
Spectra Energy Capital, LLC (a)
Multi-year syndicated	2016	$	1,500	$	836	$	6	$	842	$	658
Westcoast Energy Inc. (b)
Multi-year syndicated	2016		300		—		—		—		300
Union Gas (c)
Multi-year syndicated	2016		401		155		—		155		246
Spectra Energy Partners (d)
Multi-year syndicated	2016		700		40		—		40		660
Total		$	2,901	$	1,031	$	6	$	1,037	$	1,864

(a) Credit facility contains a covenant requiring our consolidated debt-to-total capitalization ratio, as defined in the agreement, to not exceed 65%. This ratio was 58% at March 31, 2012.

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(b) U.S. dollar equivalent at March 31, 2012. The credit facility is 300 million Canadian dollars and contains a covenant that requires the Westcoast non-consolidated debt-to-total capitalization ratio to not exceed 75%. The ratio was 45% at March 31, 2012.

(c) U.S. dollar equivalent at March 31, 2012. The credit facility is 400 million Canadian dollars and contains a covenant that requires the Union Gas debt-to-total capitalization ratio to not exceed 75% and a provision which requires Union Gas to repay all borrowings under the facility for a period of two days during the second quarter of each year. The ratio was 66% at March 31, 2012.

(d) Credit facility contains a covenant that requires Spectra Energy Partners to maintain a ratio of total Debt-to-Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), as defined in the credit agreement, of 5.0 of less. As of March 31, 2012, this ratio was 2.7. Adjusted EBITDA is a non-GAAP measure. Because Adjusted EBITDA excludes some, but not all, items that affect net income and is defined differently by companies in our industry, Spectra Energy Partners’ definition of Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Adjusted EBITDA should not be considered an alternative to net income, operating income, cash from operations or any other measure of financial performance or liquidity presented in accordance with GAAP.

The issuances of commercial paper, letters of credit and revolving borrowings reduce the amounts available under the credit facilities. As of March 31, 2012, there were no revolving borrowings outstanding.

Our credit agreements contain various covenants, including the maintenance of certain financial ratios. Failure to meet those covenants beyond applicable grace periods could result in accelerated due dates and/or termination of the agreements. As of March 31, 2012, we were in compliance with those covenants. In addition, our credit agreements allow for acceleration of payments or termination of the agreements due to nonpayment, or in some cases, due to the acceleration of other significant indebtedness of the borrower or some of its subsidiaries. Our debt and credit agreements do not contain provisions that trigger an acceleration of indebtedness based solely on the occurrence of a material adverse change in our financial condition or results of operations.

As noted above, the terms of our Spectra Energy Capital, LLC (Spectra Capital) credit agreement require our consolidated debt-to-total capitalization ratio, as defined in the agreement, to be 65% or lower. Per the terms of the new agreement, collateralized debt and Spectra Energy Partners’ debt and equity are excluded in the calculation of the ratio. This ratio was 58% at March 31, 2012.

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11. Fair Value Measurements

The following table presents, for each of the fair value hierarchy levels, assets and liabilities that are measured and recorded at fair value on a recurring basis:

Description	Condensed Consolidated Balance Sheet Caption	March 31, 2012
		Total		Level 1		Level 2		Level 3
		(in millions)
Corporate debt securities	Cash and cash equivalents	$	61	$	—	$	61	$	—
Corporate debt securities	Current assets—other		12		—		12		—
Derivative assets—interest rate swaps	Current assets—other		10		—		10		—
Corporate debt securities	Investments and other assets—other		6		—		6		—
Derivative assets—interest rate swaps	Investments and other assets—other		45		—		45		—
Money market funds	Investments and other assets—other		3		3		—		—
Total Assets		$	137	$	3	$	134	$	—
Derivative liabilities—natural gas purchase contracts	Current liabilities— other	$	1	$	—	$	—	$	1
Derivative liabilities—natural gas purchase contracts	Deferred credits and other liabilities—regulatory and other		14		—		—		14
Derivative liabilities—interest rate swaps	Deferred credits and other liabilities—regulatory and other		16		—		16		—
Total Liabilities		$	31	$	—	$	16	$	15
Description	Condensed Consolidated Balance Sheet Caption	December 31, 2011
		Total		Level 1		Level 2		Level 3
		(in millions)
Corporate debt securities	Cash and cash equivalents	$	49	$	—	$	49	$	—
Canadian government securities	Current assets—other		14		14		—		—
Corporate debt securities	Current assets—other		2		—		2		—
Corporate debt securities	Investments and other assets—other		16		—		16		—
Derivative assets—interest rate swaps	Investments and other assets—other		66		—		66		—
Money market funds	Investments and other assets—other		3		3		—		—
Total Assets		$	150	$	17	$	133	$	—
Derivative liabilities—natural gas purchase contracts	Current liabilities—other	$	1	$	—	$	—	$	1
Derivative liabilities—natural gas purchase contracts	Deferred credits and other liabilities—regulatory and other		13		—		—		13
Derivative liabilities—interest rate swaps	Deferred credits and other liabilities—regulatory and other		16		—		16		—
Total Liabilities		$	30	$	—	$	16	$	14

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The following table presents changes in Level 3 assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs:

	Three Months Ended March 31,
	2012			2011
	(in millions)
Long-term derivative assets (liabilities)
Fair value, beginning of period	$	(14	)	$	(6	)
Total realized/unrealized gains (losses):
Included in earnings		1			(1	)
Included in other comprehensive income		(2	)		1
Fair value, end of period	$	(15	)	$	(6	)
Total gains for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets/liabilities held at the end of the period	$	1		$	3

Level 1

Level 1 valuations represent quoted unadjusted prices for identical instruments in active markets.

Level 2 Valuation Techniques

Fair values of our financial instruments that are actively traded in the secondary market, including our long-term debt, are determined based on market-based prices. These valuations may include inputs such as quoted market prices of the exact or similar instruments, broker or dealer quotations, or alternative pricing sources that may include models or matrix pricing tools, with reasonable levels of price transparency.

For interest rate swaps, we utilize data obtained from a third-party source for the determination of fair value. Both the future cash flows for the fixed-leg and floating-leg of our swaps are discounted to present value. In addition, credit default swap rates are used to develop the adjustment for credit risk embedded in our positions. We believe that since some of the inputs and assumptions for the calculations of fair value are derived from observable market data, a Level 2 classification is appropriate.

Level 3 Valuation Techniques

We do not have significant amounts of assets or liabilities measured and reported using Level 3 valuation techniques, which include the use of pricing models, discounted cash flow methodologies or similar techniques where at least one significant model assumption or input is unobservable. Level 3 financial instruments also include those for which the determination of fair value requires significant management judgment or estimation.

Financial Instruments

The fair values of financial instruments that are recorded and carried at book value are summarized in the following table. Judgment is required in interpreting market data to develop the estimates of fair value. These estimates are not necessarily indicative of the amounts we could have realized in current markets.

	March 31, 2012				December 31, 2011
	Book Value		Approximate Fair Value		Book Value		Approximate Fair Value
	(in millions)
Note receivable, noncurrent (a)	$	71	$	71	$	71	$	71
Long-term debt, including current maturities (b)		10,709		12,470		10,600		12,398

(a) Included within Investments in and Loans to Unconsolidated Affiliates.

(b) Excludes unamortized items and a fair value hedge carrying value adjustment.

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The fair values of our note receivable-noncurrent and long-term debt are determined based on market-based prices as described in the Level 2 valuation technique described above.

The fair values of cash and cash equivalents, restricted cash, short-term investments, accounts receivable, accounts payable, short-term borrowings and commercial paper are not materially different from their carrying amounts because of the short-term nature of these instruments or because the stated rates approximate market rates.

During the 2012 and 2011 periods, there were no material adjustments to assets and liabilities measured at fair value on a nonrecurring basis.

12. Risk Management and Hedging Activities

We are exposed to the impact of market fluctuations in the prices of NGLs and natural gas purchased as a result of our investment in DCP Midstream, and the ownership of NGL marketing operations in western Canada and the processing plants associated with our U.S. pipeline assets. Exposure to interest rate risk exists as a result of the issuance of variable and fixed-rate debt and commercial paper. We are exposed to foreign currency risk from our Canadian operations. We employ established policies and procedures to manage our risks associated with these market fluctuations, which may include the use of derivatives, primarily around interest rate exposures.

DCP Midstream manages their direct exposure to market prices separate from Spectra Energy, and utilizes various risk management strategies, including the use of commodity derivatives.

At March 31, 2012, we had “pay floating—receive fixed” interest rate swaps outstanding with a total notional principal amount of $2,100 million to hedge against changes in the fair value of our fixed-rate debt that arise as a result of changes in market interest rates. These swaps also allow us to transform a portion of the underlying interest payments related to our long-term fixed-rate debt securities into variable-rate interest payments in order to achieve our desired mix of fixed and variable-rate debt.

Other than interest rate swaps described above, we did not have any significant derivatives outstanding during the three months ended March 31, 2012.

13. Commitments and Contingencies

Environmental

We are subject to various U.S. federal, state and local laws and regulations, as well as Canadian federal and provincial laws, regarding air and water quality, hazardous and solid waste disposal and other environmental matters. These laws and regulations can change from time to time, imposing new obligations on us.

Like others in the energy industry, we and our affiliates are responsible for environmental remediation at various contaminated sites. These include some properties that are part of our ongoing operations, sites formerly owned or used by us, and sites owned by third parties. Remediation typically involves management of contaminated soils and may involve groundwater remediation. Managed in conjunction with relevant federal, state/provincial and local agencies, activities vary with site conditions and locations, remedial requirements, complexity and sharing of responsibility. If remediation activities involve statutory joint and several liability provisions, strict liability, or cost recovery or contribution actions, we or our affiliates could potentially be held responsible for contamination caused by other parties. In some instances, we may share liability associated with contamination with other potentially responsible parties, and may also benefit from insurance policies or contractual indemnities that cover some or all cleanup costs. All of these sites generally are managed in the normal course of business or affiliated operations.

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Included in Deferred Credits and Other Liabilities—Regulatory and Other on the Condensed Consolidated Balance Sheets are undiscounted liabilities related to extended environmental-related activities totaling $15 million at March 31, 2012 and $16 million as of December 31, 2011. These liabilities represent provisions for costs associated with remediation activities at some of our current and former sites, as well as other environmental contingent liabilities.

Litigation

Litigation and Legal Proceedings. We are involved in legal, tax and regulatory proceedings in various forums arising in the ordinary course of business, including matters regarding contract and payment claims, some of which involve substantial monetary amounts. We have insurance coverage for certain of these losses should they be incurred. We believe that the final disposition of these proceedings will not have a material effect on our consolidated results of operations, financial position or cash flows.

Legal costs related to the defense of loss contingencies are expensed as incurred. We had no material reserves recorded as of March 31, 2012 or December 31, 2011 related to litigation.

Other Commitments and Contingencies

See Note 14 for a discussion of guarantees and indemnifications.

14. Guarantees and Indemnifications

We have various financial guarantees and indemnifications which are issued in the normal course of business. As discussed below, these contracts include financial guarantees, stand-by letters of credit, debt guarantees, surety bonds and indemnifications. We enter into these arrangements to facilitate a commercial transaction with a third party by enhancing the value of the transaction to the third party. To varying degrees, these guarantees involve elements of performance and credit risk, which are not included on the Condensed Consolidated Balance Sheets. The possibility of having to perform under these guarantees and indemnifications is largely dependent upon future operations of various subsidiaries, investees and other third parties, or the occurrence of certain future events.

We have issued performance guarantees to customers and other third parties that guarantee the payment and performance of other parties, including certain non-100%-owned entities. In connection with our spin-off from Duke Energy Corporation (Duke Energy) in 2007, certain guarantees that were previously issued by us were assigned to, or replaced by, Duke Energy as guarantor in 2006. For any remaining guarantees of other Duke Energy obligations, Duke Energy has indemnified us against any losses incurred under these guarantee arrangements. The maximum potential amount of future payments we could have been required to make under these performance guarantees as of March 31, 2012 was approximately $406 million, which has been indemnified by Duke Energy as discussed above. One of these outstanding performance guarantees, which has a maximum potential amount of future payment of $201 million, expires in 2028. The remaining guarantees have no contractual expirations.

We have also issued joint and several guarantees to some of the Duke/Fluor Daniel (D/FD) project owners, guaranteeing the performance of D/FD under its engineering, procurement and construction contracts and other contractual commitments in place at the time of our spin-off from Duke Energy. D/FD is one of the entities transferred to Duke Energy in connection with our spin-off. Substantially all of these guarantees have no contractual expiration and no stated maximum amount of future payments that we could be required to make. Fluor Enterprises Inc., as 50% owner in D/FD, has issued similar joint and several guarantees to the same D/FD project owners.

Westcoast Energy Inc. (Westcoast), a 100%-owned subsidiary, has issued performance guarantees to third parties guaranteeing the performance of unconsolidated entities, such as equity method investments, and of entities previously sold by Westcoast to third parties. Those guarantees require Westcoast to make payment to the guaranteed third party upon the failure of such unconsolidated or sold entity to make payment under some of

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its contractual obligations, such as debt agreements, purchase contracts and leases. Certain guarantees that were previously issued by Westcoast for obligations of entities that remained a part of Duke Energy are considered guarantees of third party performance; however, Duke Energy has indemnified us against any losses incurred under these guarantee arrangements.

We have entered into various indemnification agreements related to purchase and sale agreements and other types of contractual agreements with vendors and other third parties. These agreements typically cover environmental, tax, litigation and other matters, as well as breaches of representations, warranties and covenants. Typically, claims may be made by third parties for various periods of time depending on the nature of the claim. Our potential exposure under these indemnification agreements can range from a specified amount, such as the purchase price, to an unlimited dollar amount, depending on the nature of the claim and the particular transaction. We are unable to estimate the total potential amount of future payments under these indemnification agreements due to several factors, such as the unlimited exposure under certain guarantees.

As of March 31, 2012, the amounts recorded for the guarantees and indemnifications, described above, including the indemnifications by Duke Energy to us, are not material, both individually and in the aggregate.

15. Employee Benefit Plans

Retirement Plans. We have a qualified non-contributory defined benefit (DB) retirement plan for U.S. employees and non-qualified, non-contributory, unfunded defined benefit plans which cover certain current and former U.S. executives. Our Westcoast subsidiary maintains qualified and non-qualified, contributory and non-contributory, DB and defined contribution (DC) retirement plans covering substantially all employees of our Canadian operations.

Our policy is to fund our retirement plans, where applicable, on an actuarial basis to provide assets sufficient to meet benefits to be paid to plan participants or as required by legislation or plan terms. We made contributions of $6 million to our U.S. retirement plans in the three-month period ended March 31, 2012 and $5 million for the same period in 2011. We made total contributions to the Canadian DC and qualified DB plans of $17 million during both of the three-month periods ended March 31, 2012 and 2011. We anticipate that we will make total contributions of approximately $25 million to the U.S. plans and approximately $105 million to the Canadian plans in 2012.

Qualified and Non-Qualified Pension Plans—Components of Net Periodic Pension Cost

	Three Months Ended March 31,
	2012			2011
	(in millions)
U.S.
Service cost benefit earned	$	3		$	3
Interest cost on projected benefit obligation		6			6
Expected return on plan assets		(8	)		(8	)
Amortization of loss		4			3
Net periodic pension cost	$	5		$	4
Canada
Service cost benefit earned	$	7		$	5
Interest cost on projected benefit obligation		13			14
Expected return on plan assets		(15	)		(12	)
Amortization of loss		9			6
Net periodic pension cost	$	14		$	13

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Other Post-Retirement Benefit Plans. We provide certain health care and life insurance benefits for retired employees on a contributory and non-contributory basis. Employees are eligible for these benefits if they have met age and service requirements at retirement, as defined in the plans.

Other Post-Retirement Benefit Plans—Components of Net Periodic Benefit Cost

	Three Months Ended March 31,
	2012			2011
	(in millions)
U.S.
Interest cost on accumulated post-retirement benefit obligation	$	3		$	3
Expected return on plan assets		(1	)		(1	)
Net periodic other post-retirement benefit cost	$	2		$	2
Canada
Service cost benefit earned	$	2		$	1
Interest cost on accumulated post-retirement benefit obligation		2			2
Net periodic other post-retirement benefit cost	$	4		$	3

Retirement/Savings Plan

We have employee savings plans available to both U.S. and Canadian employees. Employees may participate in a matching contribution formula where we provide a matching contribution up to 100% of before tax employee contributions, of up to 6% of eligible pay per pay period for U.S. employees and up to 5% of eligible pay per pay period for Canadian employees. We expensed pre-tax employer matching contributions of $4 million in both of the three months ended March 31, 2012 and 2011 for U.S employees, and $3 million in both of the three months ended March 31, 2012 and 2011 for Canadian employees.

16. Consolidating Financial Information

Spectra Energy Corp has agreed to fully and unconditionally guarantee the payment of principal and interest under all series of notes outstanding under the Senior Indenture of Spectra Capital, a 100%-owned, consolidated subsidiary. In accordance with Securities and Exchange Commission (SEC) rules, the following condensed consolidating financial information is presented. The information shown for Spectra Energy Corp and Spectra Capital is presented utilizing the equity method of accounting for investments in subsidiaries, as required. The non-guarantor subsidiaries column represents all consolidated subsidiaries of Spectra Capital. This information should be read in conjunction with our accompanying Condensed Consolidated Financial Statements and notes thereto.

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Spectra Energy Corp

Condensed Consolidating Statement of Operations

Three Months Ended March 31, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total operating revenues	$	—		$	—	$	1,545	$	(1	)	$	1,544
Total operating expenses		2			—		1,025		(1	)		1,026
Gains on sales of other assets and other, net		—			—		1		—			1
Operating income (loss)		(2	)		—		521		—			519
Equity in earnings of unconsolidated affiliates		—			—		118		—			118
Equity in earnings of subsidiaries		329			486		—		(815	)		—
Other income and expenses, net		(1	)		—		17		—			16
Interest expense		—			48		109		—			157
Earnings from continuing operations before income taxes		326			438		547		(815	)		496
Income tax expense (benefit) from continuing operations		(7	)		109		35		—			137
Income from continuing operations		333			329		512		(815	)		359
Income from discontinued operations, net of tax		—			—		2		—			2
Net income		333			329		514		(815	)		361
Net income—noncontrolling interests		—			—		28		—			28
Net income—controlling interests	$	333		$	329	$	486	$	(815	)	$	333

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Spectra Energy Corp

Condensed Consolidating Statement of Operations

Three Months Ended March 31, 2011

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total operating revenues	$	—		$	—	$	1,612	$	—		$	1,612
Total operating expenses		3			—		1,056		—			1,059
Gains on sales of other assets and other, net		—			—		4		—			4
Operating income (loss)		(3	)		—		560		—			557
Equity in earnings of unconsolidated affiliates		—			—		106		—			106
Equity in earnings of subsidiaries		359			510		—		(869	)		—
Other income and expenses, net		—			—		6		—			6
Interest expense		—			48		107		—			155
Earnings from continuing operations before income taxes		356			462		565		(869	)		514
Income tax expense (benefit) from continuing operations		(1	)		103		37		—			139
Income from continuing operations		357			359		528		(869	)		375
Income from discontinued operations, net of tax		—			—		7		—			7
Net income		357			359		535		(869	)		382
Net income—noncontrolling interests		—			—		25		—			25
Net income—controlling interests	$	357		$	359	$	510	$	(869	)	$	357

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Spectra Energy Corp

Condensed Consolidating Statement of Comprehensive Income

Three Months Ended March 31, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp		Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income	$	333	$	329	$	514	$	(815	)	$	361
Other comprehensive income
Foreign currency translation adjustments		—		—		162		—			162
Reclassification of cash flow hedges into earnings		—		1		1		—			2
Pension and benefits impact		4		—		1		—			5
Total Comprehensive income, net of tax		337		330		678		(815	)		530
Less: Comprehensive income—noncontrolling interests		—		—		30		—			30
Comprehensive income—controlling interests	$	337	$	330	$	648	$	(815	)	$	500

Spectra Energy Corp

Condensed Consolidating Statement of Comprehensive Income

Three Months Ended March 31, 2011

(Unaudited)

(In millions)

	Spectra Energy Corp		Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income	$	357	$	359	$	535	$	(869	)	$	382
Other comprehensive income
Foreign currency translation adjustments		—		—		191		—			191
Unrealized mark-to-market net gain		—		—		1		—			1
Reclassification of cash flow hedges into earnings		—		—		3		—			3
Pension and benefits impact		2		—		6		—			8
Other		—		—		8		—			8
Total Comprehensive income, net of tax		359		359		744		(869	)		593
Less: Comprehensive income—noncontrolling interests		—		—		28		—			28
Comprehensive income—controlling interests	$	359	$	359	$	716	$	(869	)	$	565

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Spectra Energy Corp

Condensed Consolidating Balance Sheet

March 31, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Cash and cash equivalents	$	—		$	2		$	103	$	—		$	105
Receivables (payables)—consolidated subsidiaries		17			(21	)		4		—			—
Receivables—other		2			2			812		—			816
Other current assets		35			12			469		—			516
Total current assets		54			(5	)		1,388		—			1,437
Investments in and loans to unconsolidated affiliates		—			71			2,019		—			2,090
Investments in consolidated subsidiaries		12,242			15,475			—		(27,717	)		—
Advances receivable (payable)—consolidated subsidiaries		(3,742	)		4,238			94		(590	)		—
Goodwill		—			—			4,492		—			4,492
Other assets		36			84			399		—			519
Property, plant and equipment, net		—			—			18,678		—			18,678
Regulatory assets and deferred debits		1			15			1,127		—			1,143
Total Assets	$	8,591		$	19,878		$	28,197	$	(28,307	)	$	28,359
Accounts payable—other	$	7		$	80		$	321	$	—		$	408
Short-term borrowings and commercial paper		—			1,426			195		(590	)		1,031
Accrued taxes payable (receivable)		(29	)		27			89		—			87
Current maturities of long-term debt		—			495			526		—			1,021
Other current liabilities		40			61			621		—			722
Total current liabilities		18			2,089			1,752		(590	)		3,269
Long-term debt		—			2,804			6,945		—			9,749
Deferred credits and other liabilities		185			2,743			2,931		—			5,859
Preferred stock of subsidiaries		—			—			258		—			258
Equity
Controlling interests		8,388			12,242			15,475		(27,717	)		8,388
Noncontrolling interests		—			—			836		—			836
Total equity		8,388			12,242			16,311		(27,717	)		9,224
Total Liabilities and Equity	$	8,591		$	19,878		$	28,197	$	(28,307	)	$	28,359

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Spectra Energy Corp

Condensed Consolidating Balance Sheet

December 31, 2011

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Cash and cash equivalents	$	—		$	2		$	172	$	—		$	174
Receivables (payables)—consolidated subsidiaries		—			(1	)		1		—			—
Receivables—other		—			—			962		—			962
Other current assets		57			5			566		—			628
Total current assets		57			6			1,701		—			1,764
Investments in and loans to unconsolidated affiliates		—			70			1,994		—			2,064
Investments in consolidated subsidiaries		11,720			14,884			—		(26,604	)		—
Advances receivable (payable)—consolidated subsidiaries		(3,534	)		4,116			10		(592	)		—
Goodwill		—			—			4,420		—			4,420
Other assets		42			105			383		—			530
Property, plant and equipment, net		—			—			18,258		—			18,258
Regulatory assets and deferred debits		1			15			1,086		—			1,102
Total Assets	$	8,286		$	19,196		$	27,852	$	(27,196	)	$	28,138
Accounts payable—other	$	3		$	62		$	433	$	—		$	498
Short-term borrowings and commercial paper		—			1,343			301		(592	)		1,052
Accrued taxes payable (receivable)		(46	)		2			126		—			82
Current maturities of long-term debt		—			—			525		—			525
Other current liabilities		76			75			793		—			944
Total current liabilities		33			1,482			2,178		(592	)		3,101
Long-term debt		—			3,311			6,835		—			10,146
Deferred credits and other liabilities		188			2,683			2,866		—			5,737
Preferred stock of subsidiaries		—			—			258		—			258
Equity
Controlling interests		8,065			11,720			14,884		(26,604	)		8,065
Noncontrolling interests		—			—			831		—			831
Total equity		8,065			11,720			15,715		(26,604	)		8,896
Total Liabilities and Equity	$	8,286		$	19,196		$	27,852	$	(27,196	)	$	28,138

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Spectra Energy Corp

Condensed Consolidating Statements of Cash Flows

Three Months Ended March 31, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	333		$	329		$	514		$	(815	)	$	361
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		—			—			187			—			187
Equity in earnings of unconsolidated affiliates		—			—			(118	)		—			(118	)
Equity in earnings of subsidiaries		(329	)		(486	)		—			815			—
Distributions received from unconsolidated affiliates		—			—			114			—			114
Other		(55	)		94			(37	)		—			2
Net cash provided by (used in) operating activities		(51	)		(63	)		660			—			546
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		—			—			(343	)		—			(343	)
Acquisitions		—			—			(30	)		—			(30	)
Purchases of held-to-maturity securities		—			—			(861	)		—			(861	)
Proceeds from sales and maturities of held-to-maturity securities		—			—			734			—			734
Proceeds from sales and maturities of available-for-sale securities		—			—			14			—			14
Distributions received from unconsolidated affiliates		—			—			5			—			5
Other changes in restricted funds		—			—			79			—			79
Net cash used in investing activities		—			—			(402	)		—			(402	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in short-term borrowings and commercial paper		—			85			(111	)		—			(26	)
Distributions to noncontrolling interests		—			—			(27	)		—			(27	)
Dividends paid on common stock		(185	)		—			—			—			(185	)
Distributions and advances from (to) affiliates		213			(22	)		(191	)		—			—
Other		23			—			1			—			24
Net cash provided by (used in) financing activities		51			63			(328	)		—			(214	)
Effect of exchange rate changes on cash		—			—			1			—			1
Net decrease in cash and cash equivalents		—			—			(69	)		—			(69	)
Cash and cash equivalents at beginning of period		—			2			172			—			174
Cash and cash equivalents at end of period	$	—		$	2		$	103		$	—		$	105

29

Spectra Energy Corp

Condensed Consolidating Statements of Cash Flows

Three Months Ended March 31, 2011

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	357		$	359		$	535		$	(869	)	$	382
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		—			—			178			—			178
Equity in earnings of unconsolidated affiliates		—			—			(106	)		—			(106	)
Equity in earnings of subsidiaries		(359	)		(510	)		—			869			—
Distributions received from unconsolidated affiliates		—			—			104			—			104
Other		(13	)		129			48			—			164
Net cash provided by (used in) operating activities		(15	)		(22	)		759			—			722
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		—			—			(329	)		—			(329	)
Investments in and loans to unconsolidated affiliates		—			—			(4	)		—			(4	)
Purchases of held-to-maturity securities		—			—			(214	)		—			(214	)
Proceeds from sales and maturities of held-to-maturity securities		—			—			186			—			186
Purchases of available-for-sale securities		—			—			(548	)		—			(548	)
Proceeds from sales and maturities of available-for-sale securities		—			—			576			—			576
Other changes in restricted funds		—			—			(10	)		—			(10	)
Other		—			—			11			—			11
Net cash used in investing activities		—			—			(332	)		—			(332	)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments for the redemption of long-term debt		—			—			(36	)		—			(36	)
Net decrease in short-term borrowings and commercial paper		—			(51	)		(131	)		—			(182	)
Net increase in revolving credit facilities borrowings		—			—			13			—			13
Distributions to noncontrolling interests		—			—			(23	)		—			(23	)
Dividends paid on common stock		(170	)		—			—			—			(170	)
Distributions and advances from (to) affiliates		168			79			(247	)		—			—
Other		17			—			(1	)		—			16
Net cash provided by (used in) financing activities		15			28			(425	)		—			(382	)
Effect of exchange rate changes on cash		—			—			2			—			2
Net increase in cash and cash equivalents		—			6			4			—			10
Cash and cash equivalents at beginning of period		—			—			130			—			130
Cash and cash equivalents at end of period	$	—		$	6		$	134		$	—		$	140

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17. New Accounting Pronouncements

There were no significant accounting pronouncements adopted during the three months ended March 31, 2012 that had a material impact on our consolidated results of operations, financial position or cash flows.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

INTRODUCTION

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the accompanying Condensed Consolidated Financial Statements.

Executive Overview

During the first quarter of 2012, our gathering and processing businesses at Field Services generated higher earnings and our fee-based businesses at U.S. Transmission and Western Canada Transmission & Processing continued to perform well by meeting the needs of our customers and generating strong earnings and operating cash flows from expansion projects. These results were offset by extraordinarily warmer weather at Distribution, lower commodity prices at Field Services, and higher NGL extraction premiums and lower NGL sales prices related to the Empress operations at Western Canada Transmission & Processing.

For the three months ended March 31, 2012 and 2011, we reported net income from controlling interests of $333 million and $357 million, respectively.

The highlights for the three months ended March 31, 2012 include the following:

• U.S. Transmission’s earnings reflected lower interruptible transportation revenue and the effects of expected contract reductions at Ozark Gas Transmission, L.L.C. (Ozark Gas Transmission), partially offset by higher earnings from expansion projects,

• Distribution’s earnings decreased mainly due to lower customer usage of natural gas due to weather that was more than 23% warmer than in 2011, partially offset by lower operating fuel costs,

• Western Canada Transmission & Processing earnings were lower mainly as a result of higher NGL extraction premiums and lower NGL sales prices, substantially offset by higher gathering and processing earnings from expansions, and

• Field Services earnings benefited from higher gathering and processing volumes from expansion projects and the absence of severe weather which restricted volumes in the first quarter of 2011, partially offset by lower commodity prices.

In the first quarter of 2012, we had $343 million of capital and investment expenditures excluding the payment of $30 million of the purchase price previously withheld in connection with the acquisition of Bobcat Gas Storage (Bobcat) in 2010, which we have classified as acquisition expenditures. We continue to project approximately $2.0 billion of capital and investment expenditures for the full year, including expansion capital of approximately $1.3 billion. Expansion projects for 2012 are on track and we expect that our capital spending will be significantly higher throughout the remainder of the year.

We are committed to an investment-grade balance sheet and continued prudent financial management of our capitalization structure. Therefore, financing these growth activities will continue to be based on our strong and growing fee-based earnings and cash flows as well as the issuance of long-term debt. In 2012, we plan to issue approximately $1.3 billion of combined long-term debt and commercial paper, including the refinancing of approximately $500 million of long-term debt maturities. We have ongoing access to approximately $1.9 billion under our credit facilities as of March 31, 2012, to be utilized as needed for effective working capital management.

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RESULTS OF OPERATIONS

	Three Months Ended March 31,
	2012		2011
	(in millions)
Operating revenues	$	1,544	$	1,612
Operating expenses		1,026		1,059
Gains on sales of other assets and other, net		1		4
Operating income		519		557
Other income and expenses		134		112
Interest expense		157		155
Earnings from continuing operations before income taxes		496		514
Income tax expense from continuing operations		137		139
Income from continuing operations		359		375
Income from discontinued operations, net of tax		2		7
Net income		361		382
Net income—noncontrolling interests		28		25
Net income—controlling interests	$	333	$	357

Operating Revenues. The $68 million, or 4%, decrease was driven mainly by:

• a decrease in customer usage of natural gas primarily due to weather that was more than 23% warmer than in 2011 and lower natural gas prices passed through to customers at Distribution,

• lower NGL sales volumes primarily as a result of warmer weather and lower NGL sales prices associated with the Empress operations at Western Canada Transmission & Processing, and

• the effects of a weaker Canadian dollar on revenues at Distribution and Western Canada Transmission & Processing, partially offset by

• higher earnings from expansion projects at Western Canada Transmission & Processing and U.S. Transmission, and

• increased sales volumes of residual natural gas related to the Empress operations at Western Canada Transmission & Processing.

Operating Expenses. The $33 million, or 3%, decrease was driven mainly by:

• a decrease in volumes of natural gas sold primarily due to warmer weather and lower natural gas prices passed through to customers at Distribution, partially offset by

• higher volumes of natural gas purchases for extraction and higher costs of natural gas purchased caused primarily by higher extraction premiums, net of lower volumes of make-up gas purchases as a result of lower NGL production due to warmer weather from the Empress operations at Western Canada Transmission & Processing.

Operating Income. The $38 million decrease was mainly driven by lower customer usage of natural gas due to warmer weather at Distribution and lower NGL earnings primarily due to higher NGL extraction premiums and lower NGL sales prices at Western Canada Transmission & Processing, partially offset by expansion projects at Western Canada Transmission & Processing and U.S. Transmission.

Other Income and Expenses. The $22 million increase was attributable to higher equity earnings from Field Services mainly due to an increase in gathering and processing margins as a result of the impact of severe weather in the first quarter of 2011, higher volumes due to expansions in 2012 and increased gains associated

32

with the issuance of partnership units by DCP Partners, substantially offset by lower commodity prices. In addition, higher allowance for funds used during construction (AFUDC) due to higher capital spending on expansion projects at Western Canada Transmission & Processing contributed to higher other income and expenses.

Income Tax Expense from Continuing Operations. The $2 million decrease was a result of lower earnings from continuing operations and a lower Canadian effective tax rate, substantially offset by favorable tax adjustments in the first quarter of 2011. The effective tax rate for income from continuing operations was 28% in the first quarter of 2012 compared to 27% in the first quarter of 2011.

Income from Discontinued Operations, Net of Tax. The $5 million decrease was attributable to lower income from propane deliveries in 2012.

Net Income—Noncontrolling Interests. The $3 million increase was driven by an increase in noncontrolling ownership interests resulting from the Spectra Energy Partners public sales of additional partner units in June 2011 and higher earnings from Spectra Energy Partners, primarily as a result of the acquisition of Big Sandy Pipeline, LLC (Big Sandy) in July 2011.

For a more detailed discussion of earnings drivers, see the segment discussions that follow.

Segment Results

Management evaluates segment performance based on EBIT, which represents earnings from continuing operations (both operating and non-operating) before interest and taxes, net of noncontrolling interests related to those earnings. Cash, cash equivalents and investments are managed centrally, so the gains and losses on foreign currency remeasurement, and interest and dividend income on those balances, are excluded from the segments’ EBIT. We consider segment EBIT 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.

Our segment EBIT may not be comparable to similarly titled measures of other companies because other companies may not calculate EBIT in the same manner. Segment EBIT is summarized in the following table and detailed discussions follow:

EBIT by Business Segment

	Three Months Ended March 31,
	2012			2011
	(in millions)
U.S. Transmission	$	271		$	279
Distribution		151			167
Western Canada Transmission & Processing		138			141
Field Services		93			81
Total reportable segment EBIT		653			668
Other		(29	)		(24	)
Total reportable segment and other EBIT		624			644
Interest expense		157			155
Interest income and other (a)		29			25
Earnings from continuing operations before income taxes	$	496		$	514

(a) Includes foreign currency transaction gains and losses and the add-back of noncontrolling interests related to segment EBIT.

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Noncontrolling interests as presented in the following segment-level discussions includes only noncontrolling interests related to EBIT of non-100%- owned subsidiaries. It does not include noncontrolling interests related to interest and taxes of those operations. The amounts discussed below include intercompany transactions that are eliminated in the Condensed Consolidated Financial Statements.

U.S. Transmission

	Three Months Ended March 31,
	2012		2011		Increase (Decrease)
	(in millions, except where noted)
Operating revenues	$	495	$	483	$	12
Operating expenses
Operating, maintenance and other		157		146		11
Depreciation and amortization		70		67		3
Gains on sales of other assets and other, net		1		4		(3	)
Operating income		269		274		(5	)
Other income and expenses		31		31		—
Noncontrolling interests		29		26		3
EBIT	$	271	$	279	$	(8	)
Proportional throughput, TBtu (a)		763		804		(41	)

(a) Trillion British thermal units. Revenues are not significantly affected by pipeline throughput fluctuations, since revenues are primarily composed of demand charges.

Operating Revenues. The $12 million increase was driven by:

• a $19 million increase from expansion projects and the acquisition of Big Sandy in July 2011, and

• a $7 million increase in recoveries of electric power and other costs passed through to customers, partially offset by

• an $11 million decrease from lower interruptible transportation revenue and the effects of expected contract reductions at Ozark Gas Transmission.

Operating, Maintenance and Other. The $11 million increase was driven by:

• a $6 million increase from electric power and other costs passed through to customers, and

• a $6 million increase primarily due to software costs.

Depreciation and Amortization. The $3 million increase was mainly driven by expansion projects and the acquisition of Big Sandy.

Noncontrolling Interests. The $3 million increase was driven by an increase in noncontrolling ownership interests resulting from the Spectra Energy Partners public sales of additional partner units in June 2011, and higher earnings from Spectra Energy Partners, primarily as a result of the acquisition of Big Sandy in July 2011.

EBIT. The $8 million decrease was mainly due to lower interruptible transportation revenues, the effects of expected contract reductions at Ozark Gas Transmission and accelerated software amortization costs. These results were partially offset by expansion projects previously placed into service.

34

Distribution

	Three Months Ended March 31,
	2012		2011		Increase (Decrease)
	(in millions, except where noted)
Operating revenues	$	597	$	696	$	(99	)
Operating expenses
Natural gas purchased		286		369		(83	)
Operating, maintenance and other		107		107		—
Depreciation and amortization		53		53		—
EBIT	$	151	$	167	$	(16	)
Number of customers, thousands		1,363		1,345		18
Heating degree days, Fahrenheit		2,893		3,772		(879	)
Pipeline throughput, TBtu		267		331		(64	)
Canadian dollar exchange rate, average		1.00		0.99		0.01

Operating Revenues. The $99 million decrease was driven mainly by:

• an $85 million decrease in customer usage of natural gas primarily due to weather that was more than 23% warmer than in 2011,

• a $15 million decrease from lower natural gas prices passed through to customers. Prices charged to customers are adjusted quarterly based on the 12 month New York Mercantile Exchange (NYMEX) forecast, and

• a $9 million decrease resulting from a weaker Canadian dollar, partially offset by

• a $6 million increase from growth in the number of customers.

Natural Gas Purchased. The $83 million decrease was driven mainly by:

• a $59 million decrease due to lower volumes of natural gas sold primarily due to warmer weather,

• a $15 million decrease from lower natural gas prices passed through to customers,

• an $8 million decrease in operating fuel costs, and

• a $4 million decrease resulting from a weaker Canadian dollar, partially offset by

• a $4 million increase from growth in the number of customers.

EBIT. The $16 million decrease was primarily a result of lower customer usage due to warmer weather, partially offset by lower operating fuel costs.

35

Western Canada Transmission & Processing

	Three Months Ended March 31,
	2012		2011		Increase (Decrease)
	(in millions, except where noted)
Operating revenues	$	466	$	439	$	27
Operating expenses
Natural gas and petroleum products purchased		161		122		39
Operating, maintenance and other		131		133		(2	)
Depreciation and amortization		47		46		1
Operating income		127		138		(11	)
Other income and expenses		11		3		8
EBIT	$	138	$	141	$	(3	)
Pipeline throughput, TBtu		177		183		(6	)
Volumes processed, TBtu		179		176		3
Empress inlet volumes, TBtu		171		181		(10	)
Canadian dollar exchange rate, average		1.00		0.99		0.01

Operating Revenues. The $27 million increase was driven by:

• a $31 million increase primarily due to higher sales volumes of residual natural gas at the Empress operations,

• a $20 million increase in gathering and processing revenues due to contracted volumes from expansions associated with non-conventional supply in the Fort Nelson area, and

• an $8 million increase due to higher transmission revenue, partially offset by

• a $13 million decrease due to lower NGL sales volumes associated with the Empress operations primarily as a result of warmer weather,

• a $13 million decrease due to lower NGL sales prices associated with the Empress operations, and

• a $7 million decrease as a result of a weaker Canadian dollar.

Natural Gas and Petroleum Products Purchased. The $39 million increase was driven by:

• a $36 million increase in natural gas purchases for extraction at Empress primarily due to increased volumes, and

• a $13 million increase as a result of higher costs of natural gas purchased for the Empress facility caused primarily by higher extraction premiums, partially offset by

• a $9 million decrease in volumes of make-up gas purchases at Empress primarily as a result of lower NGL production due to warmer weather.

Other Income and Expenses. The $8 million increase was primarily due to higher AFUDC resulting from higher capital spending on expansion projects.

EBIT. The $3 million decrease was driven mainly by higher NGL extraction premiums and lower NGL sales prices at Empress, substantially offset by higher gathering and processing earnings from expansions.

36

Field Services

	Three Months Ended March 31,
	2012		2011		Increase (Decrease)
	(in millions, except where noted)
Equity in earnings of unconsolidated affiliates	$	93	$	81	$	12
EBIT	$	93	$	81	$	12
Natural gas gathered and processed/transported, TBtu/d (a,b)		7.2		6.7		0.5
NGL production, MBbl/d (a,c)		412		358		54
Average natural gas price per MMBtu (d)	$	2.74	$	4.11	$	(1.37	)
Average NGL price per gallon (e)	$	1.00	$	1.13	$	(0.13	)
Average crude oil price per barrel (f)	$	102.84	$	94.10	$	8.74

(a) Reflects 100% of volumes.

(b) Trillion British thermal units per day.

(c) Thousand barrels per day.

(d) Million British thermal units. Average price based on NYMEX Henry Hub.

(e) Does not reflect results of commodity hedges.

(f) Average price based on NYMEX calendar month.

EBIT. Higher equity earnings of $12 million were mainly the result of the following variances, each representing our 50% ownership portion of the earnings drivers at DCP Midstream:

• a $28 million increase in gathering and processing volumes from expansion projects across certain geographic regions and the absence of severe weather which restricted volumes in the first quarter of 2011,

• a $7 million increase in gains associated with the issuance of partnership units by DCP Partners, and

• a $5 million increase in earnings from DCP Partners as a result of growth and mark-to-market gains on derivative instruments used to protect distributable cash flows, partially offset by

• a $24 million decrease from commodity-sensitive processing arrangements due to decreased NGL and natural gas prices, net of increased crude oil prices, and

• a $6 million decrease due to higher operating expenses largely resulting from increased depreciation expense due to growth.

Other

	Three Months Ended March 31,
	2012			2011			Increase (Decrease)
	(in millions)
Operating revenues	$	21		$	17		$	4
Operating expenses		49			39			10
Operating loss		(28	)		(22	)		(6	)
Other income and expenses		(1	)		(2	)		1
EBIT	$	(29	)	$	(24	)	$	(5	)

EBIT. The $5 million decrease in EBIT reflects higher corporate costs, primarily employee and retiree benefit costs.

37

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2012, we had negative working capital of $1,832 million. This balance includes short-term borrowings and commercial paper totaling $1,031 million and current maturities of long-term debt of $1,021 million. We will rely upon cash flows from operations and various financing transactions, which may include issuances of short-term and long-term debt, to fund our liquidity and capital requirements for the next 12 months. We have access to four revolving credit facilities, with total combined capital commitments of approximately $2.9 billion, with approximately $1.9 billion available at March 31, 2012. These facilities are used principally as back-stops for commercial paper programs or for the issuance of letters of credit. At Union Gas, we primarily use commercial paper to support our short-term working capital fluctuations. At Spectra Capital, Spectra Energy Partners and Westcoast, we primarily use commercial paper for temporary funding of our capital expenditures. We also utilize commercial paper, other variable-rate debt and interest rate swaps to achieve our desired mix of fixed and variable-rate debt. See Note 10 of Notes to Condensed Consolidated Financial Statements for a discussion of available credit facilities and Financing Cash Flows and Liquidity for a discussion of effective shelf registrations.

Operating Cash Flows

Net cash provided by operating activities decreased $176 million to $546 million for the three months ended March 31, 2012 compared to the same period in 2011, driven mainly by working capital changes, including lower accounts payable and higher tax payments in 2012, and lower earnings in 2012.

Investing Cash Flows

Net cash used in investing activities increased $70 million to $402 million in the first three months of 2012 compared to the same period in 2011. This change was driven by net sales of Spectra Energy Partners’ AFS marketable securities in 2011 and payment in 2012 of $30 million previously withheld from the purchase price consideration of the acquisition of Bobcat in 2010.

	Three Months Ended March 31,
	2012		2011
	(in millions)
Capital and Investment Expenditures
U.S. Transmission (a)	$	117	$	132
Distribution		38		52
Western Canada Transmission & Processing		174		140
Other		14		9
Total	$	343	$	333

(a) Excludes $30 million paid in 2012 for amounts previously withheld from the purchase price consideration of the acquisition of Bobcat in 2010.

Capital and investment expenditures for the three months ended March 31, 2012 consisted of $233 million for expansion projects and $110 million for maintenance and other projects.

We project 2012 capital and investment expenditures of approximately $2.0 billion, consisting of approximately $1.1 billion for U.S. Transmission, $0.3 billion for Distribution and $0.6 billion for Western Canada Transmission & Processing. Total projected 2012 capital and investment expenditures include approximately $1.3 billion of expansion capital expenditures and $0.7 billion for maintenance and upgrades of existing plants, pipelines and infrastructure to serve growth. We continue to assess short and long-term market requirements and adjust our capital plans as required.

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Financing Cash Flows and Liquidity

During 2011, we identified certain immaterial errors in our previously issued Condensed Consolidated Statements of Cash Flows related to the accounting for rollovers of outstanding borrowings under our revolving bank credit facilities. The following discussion reflects the correction of these immaterial errors and also a change in the presentation of cash borrowings and repayments under these facilities. See Note 1 of Notes to Consolidated Financial Statements for further discussion.

Net cash used in financing activities totaled $214 million in the first three months of 2012 compared to $382 million used in the first three months of 2011. This change was driven mainly by:

• a $26 million decrease in short-term borrowings and commercial paper outstanding in 2012 compared to a $182 million decrease in the 2011 period, and

• $23 million of net debt retirements, including net revolving credit facility borrowings, in 2011.

Available Credit Facilities and Restrictive Debt Covenants. See Note 10 of Notes to Condensed Consolidated Financial Statements for a discussion of available credit facilities and related financial and other covenants.

The terms of our Spectra Capital credit agreement require our consolidated debt-to-total-capitalization ratio, as defined in the agreement, to be 65% or lower. Per the terms of the agreement, collateralized debt and Spectra Energy Partners’ debt and equity are excluded in the calculation of the ratio. As of March 31, 2012, this ratio was 58%. Our equity and, as a result, this ratio, are sensitive to significant movements of the Canadian dollar relative to the U.S. dollar due to the significance of our Canadian operations. Based on the strength of our total capitalization as of March 31, 2012, it is unlikely that a material adverse effect would occur as a result of a weakened Canadian dollar.

Credit Ratings

	Standard & Poor’s	Moody’s Investors Service	Fitch Ratings	DBRS
As of May 8, 2012
Spectra Capital (a)	BBB	Baa2	BBB	n/a
Texas Eastern Transmission, LP (a)	BBB+	Baa1	BBB+	n/a
Westcoast (a)	BBB+	n/a	n/a	A (low)
Union Gas (a)	BBB+	n/a	n/a	A
Maritimes & Northeast Pipeline, L.L.C. (a)	BBB-	Baa3	n/a	n/a
M&N LP (b)	A	A2/A3	n/a	A
Spectra Energy Partners (a)	BBB	Baa3	BBB	n/a

(a) Represents senior unsecured credit rating.

(b) Represents senior secured credit rating. The A2 rating applies to M&N LP’s 6.9% notes due 2019 and the A3 rating applies to its 4.34% notes due 2019.

n/a Indicates not applicable.

The above credit ratings are dependent upon, among other factors, the ability to generate sufficient cash to fund capital and investment expenditures, our results of operations, market conditions and other factors. Our credit ratings could impact our ability to raise capital in the future, impact the cost of our capital and, as a result, have an impact on our liquidity.

Dividends. Our near-term objective is to increase our dividend by at least $0.08 per year and to continue paying cash dividends in the future. In the long-term, we anticipate paying dividends at an average payout ratio level of between 60%-65% of our net income from controlling interests per share of common stock. The actual

39

payout ratio, however, may vary from year to year depending on earnings levels. We expect to continue our policy of paying regular cash dividends. The declaration and payment of dividends are subject to the sole discretion of our Board of Directors and will depend upon many factors, including the financial condition, earnings and capital requirements of our operating subsidiaries, covenants associated with certain debt obligations, legal requirements, regulatory constraints and other factors deemed relevant by our Board of Directors. A dividend of $0.28 per common share was declared on April 30, 2012 and will be paid on June 11, 2012.

Other Financing Matters. Spectra Energy Corp and Spectra Capital have an effective shelf registration statement on file with the SEC to register the issuance of unspecified amounts of various equity and debt securities, respectively. Spectra Energy Partners also has an effective shelf registration statement on file with the SEC to register the issuance of limited partner common units and various debt securities. In addition, as of March 31, 2012, certain of our subsidiaries in Canada have 1.2 billion Canadian dollars (approximately $1.1 billion) available for issuance in the Canadian market under debt shelf prospectuses that expire in October 2012.

OTHER ISSUES

New Accounting Pronouncements. See Note 17 of Notes to Condensed Consolidated Financial Statements for discussion.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Our exposure to market risk is described in Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2011. We believe our exposure to market risk has not changed materially since then.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934 (Exchange Act) is recorded, processed, summarized, and reported within the time periods specified by the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2012, and, based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these controls and procedures are effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

During the quarter ended March 31, 2012, we implemented several modules of a new enterprise resource planning system, Systems Applications and Products (SAP), the most significant of which was the general ledger module in our U.S. operations. The internal controls over financial reporting affected by this implementation were evaluated for design and found to be effective. Prior to implementation of the modules, user acceptance testing was performed to ensure the system was functioning as designed. Post-implementation reviews have been and will continue to be conducted by management to ensure that the internal controls surrounding the system implementation processes, key applications and the financial close process are properly designed and are operating effectively. We expect to implement additional SAP modules during the remainder of 2012 and will apply the same methodology to their implementation.

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Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated changes in internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended March 31, 2012 and found no change, other than described above, that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

We have no material pending legal proceedings that are required to be disclosed hereunder. For information regarding other legal proceedings, including regulatory and environmental matters, see Notes 3 and 13 of Notes to Condensed Consolidated Financial Statements, which information is incorporated by reference into this Part II.

Item 1A. Risk Factors.

In addition to the other information set forth in this report, careful consideration should be given to the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2011, which could materially affect our financial condition or future results. There have been no material changes to those risk factors.

Item 6. Exhibits.

Any agreements included as exhibits to this Form 10-Q may contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:

• were not intended to be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

• may have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement;

• may apply contract standards of “materiality” that are different from “materiality” under the applicable securities laws; and

• were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement.

We acknowledge that, notwithstanding the inclusion of the foregoing cautionary statements, we are responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this Form 10-Q not misleading.

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(a) Exhibits

Exhibit Number
*+10.1	Form of Phantom Stock Award Agreement (2012) pursuant to the Spectra Energy Corp 2007 Long-Term Incentive Plan.
*+10.2	Form of Performance Award Agreement (cash) (2012) pursuant to the Spectra Energy Corp 2007 Long-Term Incentive Plan.
*+10.3	Form of Performance Award Agreement (stock) (2012) pursuant to the Spectra Energy Corp 2007 Long-Term Incentive Plan.
*31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*32.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*101.INS	XBRL Instance Document.
*101.SCH	XBRL Taxonomy Extension Schema.
*101.CAL	XBRL Taxonomy Extension Calculation Linkbase.
*101.DEF	XBRL Taxonomy Extension Definition Linkbase.
*101.LAB	XBRL Taxonomy Extension Label Linkbase.
*101.PRE	XBRL Taxonomy Extension Presentation Linkbase.

* Filed herewith.

+ Denotes management contract or compensatory plan or arrangement.

The total amount of securities of the registrant or its subsidiaries authorized under any instrument with respect to long-term debt not filed as an exhibit does not exceed 10% of the total assets of the registrant and its subsidiaries on a consolidated basis. The registrant agrees, upon request of the Securities and Exchange Commission, to furnish copies of any or all of such instruments to it.

SIGNATURES

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 thereunto duly authorized.

	SPECTRA ENERGY CORP
Date: May 9, 2012	/s/    GREGORY L. EBEL
	Gregory L. Ebel
	President and Chief Executive Officer
Date: May 9, 2012	/s/    J. PATRICK REDDY
	J. Patrick Reddy
	Chief Financial Officer

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EX-10.1

Exhibit 10.1

SPECTRA ENERGY CORP

PHANTOM STOCK AWARD AGREEMENT

This Phantom Stock Award Agreement (the “Agreement”) has been made as of                      ,     (the “Date of Grant”) between Spectra Energy Corp, a Delaware corporation, with its principal offices in Houston, Texas (the “Company”), and             (the “Grantee”).

RECITALS

Under the amended and restated Spectra Energy Corp 2007 Long-Term Incentive Plan as it may, from time to time, be amended (the “Plan”), the Compensation Committee of the Board of Directors of the Company (the “Committee”), or its delegatee, has determined the form of this Agreement and selected the Grantee, as an Employee, to receive the award evidenced by this Agreement (the “Award”) and the Phantom Stock units and tandem Dividend Equivalents that are subject hereto. The basis for the Award is to provide an incentive for the Employee to remain with the Company and to improve Employee retention. Awards are not intended for Employees who have given notice of resignation or who have been given notice of termination by the Company, and will not accrue to Employees once such notices are given. For clarity, Awards do not accrue for Employees who have received notice, given notice or have been determined to be entitled to a notice period by a court, and no damages suffered by an Employee due to lack of sufficient notice will include compensation for loss of vesting rights or accrual of an Award. The applicable provisions of the Plan are incorporated in this Agreement by reference, including the definitions of terms contained in the Plan (unless such terms are otherwise defined herein).

AWARD

In accordance with the Plan, the Company has made this Award, effective as of the Date of Grant and upon the following terms and conditions:

Section 1. Number and Nature of Phantom Stock Units and Tandem Dividend Equivalents. The number of Phantom Stock units and the number of tandem Dividend Equivalents subject to this Award are each                     (        ). Each Phantom Stock unit, upon becoming vested before its expiration, represents a right to receive payment in the form of one (1) share of Common Stock. Each tandem Dividend Equivalent represents a right to receive cash payments equivalent to the amount of cash dividends declared and paid on one (1) share of Common Stock after the Date of Grant and before the Dividend Equivalent expires. Phantom Stock units and Dividend Equivalents are used solely as units of measurement, and are not shares of Common Stock and the Grantee is not, and has no rights as, a shareholder of the Company by virtue of this Award. The Dividend Equivalents subject to this Award have been awarded to the Grantee in respect of services to be performed by the Grantee exclusively in and after the year in which the Award is made.

Section 2. Vesting of Phantom Stock Units. The specified percentage of the Phantom Stock units subject to this Award, and not previously forfeited, shall vest, with such percentage considered satisfied to the extent such Phantom Stock units have previously vested, as follows:

(a) Generally. 100% upon Grantee continuously remaining an employee of the Company, including Subsidiaries, through the third anniversary of the Date of Grant.

(b) Retirement. If Grantee’s employment terminates at a time when Grantee is eligible for an immediately payable early or normal retirement benefit under the Spectra Energy Retirement Cash Balance Plan or under another retirement plan of the Company or Subsidiary which plan the Committee, or the delegatee, in its sole discretion, determines to be the functional equivalent of the Spectra Energy Retirement Cash Balance Plan, then the number of Phantom Stock units and tandem Dividend Equivalents to which the Grantee shall have a right to

payment hereunder shall be prorated to reflect the number of whole and partial months of the period beginning on the Date of Grant and ending with the third (3^rd) anniversary of the Date of Grant during which such employment continued while Grantee was entitled to payment of salary, and the remaining Phantom Stock units vested shall be forfeited. Grantee shall be considered to have “retired” but Grantee’s employment shall be considered to continue, with continued vesting under Section 2(a), (i) unless the Committee or its delegatee, in its sole discretion, determines that (A) Grantee is in violation of any obligation identified in Section 3 or (B) the termination of Grantee’s employment is for Cause, in which case all Phantom Stock units not previously vested shall be forfeited, or (ii) unless the Grantee dies, in which case the Phantom Stock units subject to the provisions of this Section 2(b) shall vest in accordance with Section 2(c).

(c) Death or Disability. If Grantee’s employment terminates (i) as the result of Grantee’s death or (ii) as the result of Grantee’s permanent and total disability within the meaning of Code Section 22(e)(3) as applicable, the Phantom Stock units subject to this Award shall vest immediately.

(d) Involuntary Termination Without Cause. If Grantee’s employment is terminated by the Company, or employing Subsidiary, other than for Cause, (i) the number of Phantom Stock units and tandem Dividend Equivalents to which the Grantee shall have a right to payment hereunder shall be prorated to reflect the number of whole and partial months of employment occurring prior to any notice of termination, regardless of reason for termination or the party giving notice, and during the period beginning on the Date of Grant and ending with the third (3^rd) anniversary of the Date of Grant, and the remaining Phantom Stock units shall be forfeited, and (ii) the unforfeited Phantom Stock units determined in accordance with clause (i) shall vest immediately.

For purposes of this Agreement, the termination of Grantee’s employment shall not result in the payment of any amount hereunder that is subject to, and not exempt under, Code Section 409A, unless such termination of employment constitutes a “separation from service” as defined under Code Section 409A.

(e) Change in Control. All Phantom Stock units and tandem Dividend Equivalent units to which the Grantee has the right to payment hereunder shall become 100% vested, if, following the occurrence of a Change in Control and before the earlier of (i) the second anniversary of such occurrence, or (ii) the third (3^rd) anniversary of the Date of Grant, (A) such employment is terminated involuntarily, and not for Cause, by the Company, or employing Subsidiary, or their successor; or (B) such employment is terminated by the Grantee for Good Reason.

For the purposes of this paragraph, “Good Reason” is defined as the occurrence (without the Grantee’s express written consent) of any of the following, unless such act of failure to act is corrected, prior to the effective date of Grantee’s termination of employment, as specified in Grantee’s notice termination, as provided in the following paragraph: (A) a substantial adverse alteration in the nature or status of the Grantee’s responsibilities; (B) a reduction in the Grantee’s annual base salary, provided that there is not an across-the-board reduction similarly affecting all or substantially all similarly-situated employees of the Company; (C) a reduction in the Grantee’s target annual bonus, provided that there is not an across-the-board reduction similarly affecting all similarly-situated employees of the Company; (D) the elimination of any material employee benefit plan in which the Grantee is a participant or the material reduction of Grantee’s benefits under such plan, unless the Company either (1) immediately replaces such employee benefit plan or unless the Grantee is permitted to immediately participate in other employee benefit plan(s) providing the Grantee with a substantially equivalent value of benefits in the aggregate to those eliminated or materially reduced, or (2) immediately provides the Grantee with other forms of compensation of comparable value to that being eliminated or reduced; (E) a relocation without the written consent of the Grantee that requires the Grantee to report to a work location more than 35 miles from the work location to which the Grantee was assigned prior to the Change in Control.

Grantee is required to provide notice to the Company of the existence of any of the conditions set forth in this Section 2(e) at least fifteen (15), but not more than sixty (60), days prior to the date of Grantee’s termination of employment. Upon receipt of such notice, the Company may, prior to the effective date of Grantee’s

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termination of employment, cure or remedy such condition. If Grantee terminates from employment after providing notice and after the Company has cured the condition within the time frame set forth in this Section 2(e), then such termination of employment will be considered to be a voluntary termination of employment, and not a separation for Good Reason.

The Grantee’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason pursuant to the foregoing provisions of this Section 2(d).

Section 3. Definition of “Cause.” For the purposes of this Agreement, “Cause” for termination by the Company of the Grantee’s employment shall mean (i) a material failure by the Grantee to carry out, or malfeasance or gross insubordination in carrying out, reasonably assigned duties or instructions consistent with the Grantee’s position, (ii) the final conviction of the Grantee of a felony or crime involving moral turpitude, (iii) an egregious act of dishonesty by the Grantee (including, without limitation, theft or embezzlement) in connection with employment, or a malicious action by the Grantee toward the customers or employees of the Company or any Affiliate, (iv) a material breach by the Grantee of the Company’s Code of Business Ethics, or (v) the failure of the Grantee to cooperate fully with governmental investigations involving the Company or its Affiliates; all as determined by the Company in its sole discretion.

Section 4. Violation of Grantee Obligation. In consideration of the continued vesting opportunity provided under Section 2 following the termination of Grantee’s continuous employment by the Company, including Subsidiaries, if Grantee is considered “retired”, Grantee agrees that during the period beginning with such termination of employment and ending with the third anniversary of the Date of Grant (“Restricted Period”), Grantee shall not (i) without the prior written consent of the Company, or its delegatee, become employed by, serve as a principal, partner, or member of the board of directors of, or in any similar capacity with, or otherwise provide service to, a competitor, to the detriment, of the Company or any Subsidiary, or (ii) violate any of Grantee’s other noncompetition obligations, or any of Grantee’s nonsolicitation or nondisclosure obligations, to the Company or any Subsidiary. The noncompetition obligations of clause (i) of the preceding sentence shall be limited in scope and shall be effective only to competition with the Company or any Subsidiary in the businesses of: gathering, processing or transmission of natural gas, resale or arranging for the purchase or for the resale, brokering, marketing, or trading of natural gas, electricity or derivatives thereof; energy management and the provision of energy solutions; gathering, compression, treating, processing, fractionation, transportation, trading, marketing of natural gas components, including natural gas liquids; sales and marketing of electric power and natural gas, domestically and abroad; and any other business in which the Company, including Subsidiaries, is engaged at the termination of Grantee’s continuous employment by the Company, including Subsidiaries; and within the following geographical areas (i) any country in the world where the Company, including Subsidiaries, has at least US$25 million in capital deployed as of termination of Grantee’s continuous employment by Company, including Subsidiaries; (ii) the continent of North America; (iii) the United States of America and Canada; (iv) the states of (A) Virginia, (B) Georgia, (C) Florida, (D)Texas, (E) California, (F) Massachusetts, (G) Illinois, (H) Michigan, (I) New York, (J) Colorado, (K) Oklahoma and (L) Louisiana; and (v) any state or states or province or provinces with respect to which was conducted a business of the Company, including Subsidiaries, which business constituted a substantial portion of Grantee’s employment. The Company and Grantee intend the above restrictions on competition in geographical areas to be entirely severable and independent, and any invalidity or enforceability of this provision with respect to any one or more of such restrictions, including geographical areas, shall not render this provision unenforceable as applied to any one or more of the other restrictions, including geographical areas. If any part of this provision is held to be unenforceable because of the duration, scope or area covered, the Company and Grantee agree to modify such part, or that the court making such holding shall have the power to modify such part, to reduce its duration, scope or area, including deletion of specific words and phrases, i.e., “blue penciling”, and in its modified, reduced or blue pencil form, such part shall become enforceable and shall be enforced. Nothing in Section 3 shall be construed to prohibit Grantee being retained during the Restricted Period in a capacity as an attorney licensed to practice law, or to restrict Grantee providing advice and counsel in such capacity, in any jurisdiction where such prohibition or restriction is contrary to law.

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Section 5. Forfeiture/Expiration. Any Phantom Stock unit subject to this Award shall be forfeited upon notice of the termination of Grantee’s continuous employment with the Company and its Subsidiaries, whether such notice is given by the Grantee or by the Company, including Subsidiaries, from the Date of Grant, except to the extent otherwise provided in Section 2, and, if not previously vested and paid, or deferred, or forfeited, shall expire immediately before the third anniversary of the Date of Grant. Any Dividend Equivalent subject to this Award shall expire at the time the unit of Phantom Stock with respect to which the Dividend Equivalent is in tandem (i) is vested and paid, or , to the extent permitted by the laws of the applicable jurisdiction, deferred, (ii) is forfeited, or (iii) expires.

Section 6. Dividend Equivalent Payments. Payments with respect to any Dividend Equivalent subject to this Award shall be credited by the Company to a bookkeeping account in the Grantee’s name as soon as practicable after any time cash dividends are declared and paid with respect to the Common Stock on or after the Date of Grant and before the Dividend Equivalent expires. Grantee shall be entitled to payment of the Dividend Equivalents credited to the bookkeeping account in a cash lump sum payment at the same time that the payment of the related Phantom Stock units subject to this Award is made in accordance with Section 7 hereof. However, should the Grantee receive shares under this Award without the right to receive a dividend and, because of the timing of the declaration of such dividend, the Grantee is not otherwise entitled to payment under the expiring Dividend Equivalent with respect to such dividend, the Grantee, nevertheless, shall be entitled to such payment. Dividend Equivalent payments shall be subject to withholding for taxes. Notwithstanding any other provision hereof, in no event will any Dividend Equivalent to which the Grantee may be entitled vest, or will the right to receive a payment in respect of any Dividend Equivalent arise, after December 30 of the calendar year which is three years following the end of the year in which any portion of the services to which the award of such Dividend Equivalent relates were performed by the Grantee. In the event this would, apart from this provision, occur, notwithstanding any other provision hereof, the applicable Dividend Equivalent will vest and the Grantee will be entitled to receive payment of such Dividend Equivalent on December 30 (or the first date prior thereto that is not a Saturday, Sunday or holiday) in the first calendar year which is three years following the end of the year in which any portion of the services to which the award of such Dividend Equivalent relates were performed by the Grantee.

Section 7. Payment of Phantom Stock Units. Payment of Phantom Stock units subject to this Award shall be made to the Grantee in a single lump sum payment as soon as practicable following the time such units become vested in accordance with Section 2 prior to their expiration but in no event later than 30 days following such vesting, except to the extent deferred by Grantee in accordance with such procedures as the Committee, or its delegatee, may prescribe consistent with the requirements of Code Section 409A or any Canadian law equivalent, as applicable. Any deferral of Phantom Stock units by the Grantee hereunder shall apply to both the shares of Common Stock and the related tandem Dividend Equivalents. Payment shall be subject to withholding for taxes. Payment shall be in the form of one (1) share of Common Stock for each full vested unit of Phantom Stock and any fractional vested unit of Phantom Stock shall not be payable unless and until subsequent vesting results in a full unit of Phantom Stock becoming vested. Notwithstanding the foregoing, to the extent that Grantee does not timely tender to the Company sufficient cash to satisfy withholding for tax requirements, the number of shares of Common Stock that would otherwise be paid (valued at Fair Market Value on the date the respective unit of Phantom Stock became vested, or if later, payable) shall be reduced by the Committee, or its delegatee, in its sole discretion, to fully satisfy such requirements. In the event that payment, after any such reduction in the number of shares of Common Stock to satisfy withholding for tax requirements, would be less than ten (10) shares of Common Stock, then, if so determined by the Committee, or its delegatee, in its sole discretion, payment, instead of being made in shares of Common Stock, shall be made in a cash amount equal in value to the shares of Common Stock that would otherwise be paid, valued at Fair Market Value on the date the respective Phantom Stock units became vested, or if later, payable.

Notwithstanding any provision of this Agreement to the contrary, if any payment or other benefit provided herein would be subject to unfavorable tax consequences under Code Section 409A because the timing of such payment is not delayed as provided in Code Section 409A for a “specified employee” (within the meaning of

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Code Section 409A), then if the Grantee is a “specified employee,” any such payment that the Grantee would otherwise be entitled to receive during the first six months following Grantee’s termination of employment from the Company shall be accumulated and paid, within thirty (30) days after the date that is six months following the Grantee’s date of termination of employment from the Company, or such earlier date upon which such amount can be paid under Code Section 409A without being subject to such unfavorable tax consequences such as, for example, upon the Grantee’s death.

Section 8. No Employment Right. Nothing in this Agreement or in the Plan shall confer upon the Grantee the right to continued employment by the Company or any Subsidiary, or affect the right of the Company or any Subsidiary to terminate the employment or service of the Grantee at any time for any reason.

Section 9. Nonalienation. The Phantom Stock units and Dividend Equivalents subject to this Award are not assignable or transferable by the Grantee. Upon any attempt to transfer, assign, pledge, hypothecate, sell or otherwise dispose of any such Phantom Stock unit or Dividend Equivalent, or of any right or privilege conferred hereby, or upon the levy of any attachment or similar process upon such Phantom Stock unit or Dividend Equivalent, or upon such right or privilege, such Phantom Stock unit or Dividend Equivalent, or right or privilege, shall immediately become null and void.

Section 10. Determinations. Determinations by the Committee, or its delegatee, shall be final and conclusive with respect to the interpretation of the Plan and this Agreement.

Section 11. Governing Law and Severability. The validity and construction of this Agreement shall be governed by the laws of the state of Delaware applicable to transactions taking place entirely within that state. The invalidity of any provision of this Agreement shall not affect any other provision of this Agreement, which shall remain in full force and effect.

Section 12. Certain Other Definitions. The following shall apply notwithstanding anything in this Agreement or the Plan to the contrary. The term “Change in Control” has the meaning given such term in Section 2(d) of the Spectra Energy Corp 2007 Long-Term Incentive Plan. The term “Subsidiaries” shall mean any entity that is wholly owned, directly or indirectly, by the Company, or any other affiliate of the Company that is so designated, from time to time, by the Committee.

Section 13. Conflicts with Plan, Correction of Errors, and Grantee’s Consent. In the event that any provision of this Agreement conflicts in any way with a provision of the Plan, such Plan provision shall be controlling and the applicable provision of this Agreement shall be without force and effect to the extent necessary to cause such Plan provision to be controlling. In the event that, due to administrative error, this Agreement does not accurately reflect a Phantom Stock Award properly granted to Grantee pursuant to the Plan, the Company, acting through its Executive Compensation Department, reserves the right to cancel any erroneous document and, if appropriate, to replace the cancelled document with a corrected document. It is the intention of the Company and the Grantee that this Award not result in unfavorable tax consequences to Grantee under Code Section 409A or any Canadian law equivalent, as applicable. Accordingly, this Agreement, and any terms contained herein, shall be interpreted as necessary to comply with, or be exempt from, the requirements of Code Section 409A, Grantee consents to any amendment of this Agreement as the Company may reasonably make in furtherance of such intention, and the Company shall promptly provide, or make available to, Grantee a copy of any such amendment. Further, to the extent that any term of this Agreement is ambiguous, such term shall be interpreted as necessary to comply with, or be exempt from, the requirements of Code Section 409A, as determined by the Company.

Section 14. Grantee Confidentiality Obligations. In accepting this Phantom Stock Award, Grantee acknowledges that Grantee is obligated under Company policy, and under federal and state law, to protect and safeguard the confidentiality of trade secrets and other proprietary and confidential information belonging to the Company and its Affiliates that are acquired by Grantee during Grantee’s employment with the Company and its

5

Affiliates, and that such obligations continue beyond the termination of such employment. Grantee agrees to notify any subsequent employer of such obligations and that the Company and its Affiliates, in order to enforce such obligations, may pursue legal recourse not only against Grantee, but against a subsequent employer of Grantee. Grantee agrees that he shall not disclose the existence or terms of this Agreement to anyone other than his spouse, tax advisor(s) and/or attorney(s), provided that he first obtains the agreement of such persons to be bound by the confidentiality provisions of this paragraph. Grantee also agrees to immediately give the Company written notice in accordance with the provisions of this Agreement in the event he is legally required to disclose any of the confidential information covered by the provisions of this paragraph.

Section 15. Nonsolicitation. Grantee further agrees that he will not, either directly or indirectly, solicit, hire or employ, or cause any other person, company, or entity to solicit, hire or employ, any employee or contractor retained or employed by the Company or its affiliates during the period of Grantee’s employment and for a period of seven (7) years following Grantee’s termination of employment with the Company and its affiliates. The provisions of this paragraph shall not apply to contact initiated by an employee or contractor of the Company or its affiliates in response to a general solicitation of applications for employment. Grantee agrees that this Agreement is subject to the provisions of this paragraph.

Section 16. Notices. All notices under this Agreement shall be mailed or delivered by hand to the parties at their respective addresses set forth beneath their signatures below or at such other address as may be designated in writing by either party to the other party, or to their permitted transferees if applicable. Notices shall be effective upon receipt.

Section 17. Payments Subject to Clawback. To the extent that any payment under this Agreement is subject to clawback under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as it may be amended from time to time, such amount will be clawed back in appropriate circumstances, as determined under the terms and conditions prescribed by such Act and the authority issued thereunder.

Notwithstanding the foregoing, this Award is subject to cancellation by the Company in its sole discretion unless the Grantee, by not later than                          ,         , has signed a duplicate of this Agreement, in the space provided below, and returned the signed duplicate to the Executive Compensation Department—Phantom Stock (WO 1O23), Spectra Energy Corp, P. O. Box 1642, Houston, TX 77251-1642, which, if, and to the extent, permitted by the Executive Compensation Department, may be accomplished by electronic means.

6

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and granted in Houston, Texas, to be effective as of the Date of Grant.

ATTEST:		SPECTRA ENERGY CORP
By:		By:
	Corporate Secretary	Its:	President & CEO, Spectra Energy Corp

Address for Notices:

5400 Westheimer Court

Mail Drop 1O23

Houston, Texas 77056

Attention: Karen Gowder

Acceptance of Phantom Stock Award

IN WITNESS OF Grantee’s acceptance of this Award and Grantee’s agreement to be bound by the provisions of this Agreement and the Plan, Grantee has signed this Agreement this     day of                     ,         .

Grantee’s Signature

(print name)

(social security/social insurance number)

Address for Notices:

(address)

(address)

7

EX-10.2

Exhibit 10.2

SPECTRA ENERGY CORP

PERFORMANCE AWARD AGREEMENT

This Performance Award Agreement (the “Agreement”) has been made as of                          ,         (the “Date of Grant”) between Spectra Energy Corp, a Delaware Company, with its principal offices in Houston, Texas (the “Company”), and              (the “Grantee”).

RECITALS

Under the amended and restated Spectra Energy Corp 2007 Long-Term Incentive Plan as it may, from time to time, be amended (the “Plan”), the Compensation Committee of the Board of Directors of the Company (the “Committee”), or its delegatee, has determined the form of this Agreement and selected the Grantee, as an Employee, to receive the award evidenced by this Agreement (the “Award”) and the Performance Share Units and tandem Dividend Equivalents that are subject hereto. The applicable provisions of the Plan are incorporated in this Agreement by reference, including the definitions of terms contained in the Plan (unless such terms are otherwise defined herein).

AWARD

In accordance with the Plan, the Company has made this Award, effective as of the Date of Grant and upon the following terms and conditions:

Section 1. Number and Nature of Performance Share Units and Tandem Dividend Equivalents. The number of Performance Share Units and the number of tandem Dividend Equivalents subject to this Award are each                      (        ). Each Performance Share Unit, upon becoming vested before its expiration, represents a right to receive payment in the form of cash equal to the Fair Market Value of one (1) share of Common Stock. Each tandem Dividend Equivalent, after its tandem Performance Share Unit vests, represents a right to receive a cash payment equivalent in amount to the aggregate cash dividends declared and paid on one (1) share of Common Stock for the period beginning on the Date of Grant and ending on the date such Performance Share Unit is vested. Each tandem Performance Share Unit, consisting of both the Performance Share Unit and the tandem Dividend Equivalents, is either paid or is deferred in accordance with procedures established by the Committee that comply with the requirements of Code Section 409A. Performance Share Units and Dividend Equivalents are used solely as units of measurement, and are not shares of Common Stock and the Grantee is not, and has no rights as, a shareholder of the Company by virtue of this Award.

Section 2. Vesting of Performance Share Units. (a) Provided that Grantee’s continuous employment by the Company, including Subsidiaries, has not terminated, or as otherwise provided in Sections 2(b) or 2(c), Performance Share Units subject to this Award shall become vested upon the written certification by the Committee, or its delegatee, in its sole discretion, of the achievement of the Performance Goal, which is the Company’s Total Shareholder Return (“TSR”) relative to the TSR of the peer group of companies listed on Exhibit A to this Agreement (the “Peer Group”), for the period beginning January 1, 2012 and ending December 31, 2014 (“Performance Period”), at, or above, the 30^th percentile, in accordance with the applicable vesting percentage specified for such percentile ranking in the following schedule:

Percentile Ranking	Vesting Percentage
Lower than 30th	0%
30th	50%
*	*
50th	100%
*	*
80th or higher	200%

1

* When such determination is of a percentile ranking between those specified, such results will be interpolated on a straight-line basis to determine the applicable vesting percentage.

All Performance Share Units that do not so become vested during the Performance Period shall be forfeited. For the purposes of this Agreement, TSR shall be calculated using the formula Percent TSR = ((B*(1 + C) / A) -1), where the values of A, B and C are as follows:

A = average closing price of a share on the NYSE on the twenty consecutive trading days ending on December 31, 2011;

B = average closing price of a share on the NYSE on the twenty consecutive trading days ending on December 31, 2014; and

C = the number of additional shares owned assuming dividends are reinvested as paid throughout the measurement period.

In addition, when calculating TSR for the Performance Period, (i) the performance of a company in the Peer Group will not be used in calculating the Peer Group’s TSR if the company is not publicly traded (i.e., has no ticker symbol) at the end of the performance period; (ii) the performance of any company in the Peer Group that becomes bankrupt during the measurement period will be included in the calculation of peer group performance even if it has no ticker symbol at the end of the measurement period; (iii) The performance of the surviving entity(s) will be used in the event there is a combination of any of the Peer Group companies during the measurement period; (iv) no new companies will be added to the Peer Group during the measurement period (including a non-peer company that may acquire a member of the Peer Group); and, (v) the Committee retains discretion to reduce performance awards that were otherwise earned in the event that Spectra’s TSR during the measurement period is negative.

(b) In the event that, prior to the date that the determination of the achievement of the Performance Goal is made, the Grantee’s continuous employment by the Company, including Subsidiaries, terminates, the Performance Share Units subject to this Award shall be forfeited, except that if such employment terminates (i) at a time when Grantee is eligible for an immediately payable early or normal retirement benefit under the Spectra Energy Retirement Cash Balance Plan or under another retirement plan of the Company or a Subsidiary which plan the Committee, or its delegatee, in its sole discretion, determines to be the functional equivalent of the Spectra Energy Retirement Cash Balance Plan (“Functional Equivalent Plan”), unless the Committee, or its delegatee, in its sole discretion, determines that Grantee is in violation of any obligation identified in Section 3, (ii) as the result of the termination of such employment by the Company, or employing Subsidiary, other than for cause, as determined by the Company or employing Subsidiary, in its sole discretion, or (iii) as the direct and sole result, as determined by the Company, or employing Subsidiary, in its sole discretion, of the divestiture of assets, a business, or a company, by the Company or a Subsidiary, the Performance Share Units subject to this Award shall vest at the end of the Performance Period upon such determination of the achievement of the Performance Goal, at such vesting percentage determined by the Committee, or its delegatee, by prorating on the basis of the portion of the Performance Period that such employment continued while Grantee was entitled to payment of salary (unless such termination occurs after the end of the Performance Period, in which event the number of Performance Share Units earned, if any, shall not be prorated). For the purposes of this Agreement, “Cause” for termination by the Company of the Grantee’s employment shall mean (i) a material failure by the Grantee to carry out, or malfeasance or gross insubordination in carrying out, reasonably assigned duties or instructions consistent with the Grantee’s position, (ii) the final conviction of the Grantee of a felony or crime involving moral turpitude, (iii) an egregious act of dishonesty by the Grantee (including, without limitation, theft or embezzlement) in connection with employment, or a malicious action by the Grantee toward the customers or employees of the Company or any Affiliate, (iv) a material breach by the Grantee of the Company’s Code of Business Ethics, or (v) the failure of the Grantee to cooperate fully with governmental investigations involving the Company or its Affiliates; all as determined by the Company in its sole discretion.

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For purposes of this Agreement, the termination of Grantee’s employment shall not result in the payment of any amount hereunder that is subject to, and not exempt under, Code Section 409A, unless such termination of employment constitutes a “separation from service” as defined under Code Section 409A.

(c) In the event that (i) Grantee’s employment terminates (A) as the result of the Grantee’s death, or (B) as the result of the Grantee’s permanent and total disability within the meaning of Code Section 22(e)(3), or, (ii) a Change in Control occurs before the Performance Period has ended and (A) before the Grantee’s continuous employment by the Company, including Subsidiaries, terminates, or (B) after such employment terminates during the Performance Period, (1) at a time when Grantee is eligible for an immediately payable, early or normal retirement benefit under the Spectra Energy Retirement Cash Balance Plan or Functional Equivalent Plan, unless the Company, or its successor, in its sole discretion, determines that Grantee is in violation of any obligation identified in Section 3, or (2) as the result of an event listed in item (ii) of the first sentence of Section 2(b), the Performance Share Units subject to this Award shall vest upon such occurrence, at the 100% vesting percentage, irrespective of any subsequent determination of the achievement of the Performance Goal.

Section 3. Violation of Grantee Obligation. In consideration of the continued vesting opportunity provided under Section 2 following the termination of Grantee’s continuous employment by the Company, including Subsidiaries, if, at any time of such termination of employment, Grantee is eligible for an immediately payable early or normal retirement benefit under the Spectra Energy Retirement Cash Balance Plan or Functional Equivalent Plan, Grantee agrees that during the period beginning with such termination of employment and ending with the third anniversary of the Date of Grant (“Restricted Period”), Grantee shall not (i) without the prior written consent of the Company, or its delegatee, become employed by, serve as a principal, partner, or member of the board of directors of, or in any similar capacity with, or otherwise provide service to, a competitor, to the detriment, of the Company or any Subsidiary, or (ii) violate any of Grantee’s other noncompetition obligations, or any of Grantee’s nonsolicitation or nondisclosure obligations, to the Company or any Subsidiary. The noncompetition obligations of clause (i) of the preceding sentence shall be limited in scope and shall be effective only to competition with the Company or any Subsidiary in the businesses of: gathering, processing or transmission of natural gas, resale or arranging for the purchase or for the resale, brokering, marketing, or trading of natural gas, or derivatives thereof; gathering, compression, treating, processing, fractionation, transportation, trading, marketing of natural gas components, including natural gas liquids; and sales and marketing of natural gas, domestically and abroad; and any other business in which the Company, including Subsidiaries, is engaged at the termination of Grantee’s continuous employment by the Company, including Subsidiaries; and within the following geographical areas (i) any country in the world where the Company, including Subsidiaries, has at least US$25 million in capital deployed as of termination of Grantee’s continuous employment by Company, including Subsidiaries; (ii) the continent of North America; (iii) the United States of America and Canada; (iv) the United States of America; (v) the states of Virginia, Georgia, Florida, Texas, California, Massachusetts, Illinois, Michigan, New York, Colorado, Oklahoma, Kentucky, Ohio and Louisiana; and (vi) any state or states or province or provinces with respect to which was conducted a business of the Company, including Subsidiaries, which business constituted a substantial portion of Grantee’s employment. The Company and Grantee intend the above restrictions on competition in geographical areas to be entirely severable and independent, and any invalidity or enforceability of this provision with respect to any one or more of such restrictions, including geographical areas, shall not render this provision unenforceable as applied to any one or more of the other restrictions, including geographical areas. If any part of this provision is held to be unenforceable because of the duration, scope or area covered, the Company and Grantee agree to modify such part, or that the court making such holding shall have the power to modify such part, to reduce its duration, scope or area, including deletion of specific words and phrases, i.e., “blue penciling”, and in its modified, reduced or blue pencil form, such part shall become enforceable and shall be enforced. Nothing in Section 3 shall be construed to prohibit Grantee being retained during the Restricted Period in a capacity as an attorney licensed to practice law, or to restrict Grantee providing advice and counsel in such capacity, in any jurisdiction where such prohibition or restriction is contrary to law.

Section 4. Forfeiture/Expiration. Any Performance Share Unit subject to this Award shall be forfeited upon the termination of the Grantee’s continuous employment by the Company, including Subsidiaries, from the Date of Grant, except to the extent otherwise provided in Section 2, and, if not previously vested and paid, or deferred,

3

or forfeited, shall expire immediately before the tenth (10^th) anniversary of the Date of Grant. Any Dividend Equivalent subject to this Award shall expire at the time its tandem Performance Share Unit (i) is vested and paid, or deferred, (ii) is forfeited, or (iii) expires.

Section 5. Dividend Equivalent Payment. Payment with respect to any Dividend Equivalent subject to this Award that is in tandem with a Performance Share Unit that is vested and paid shall be paid in cash to the Grantee as soon as practicable following the vesting and payment of the Performance Share Unit, or, if the vested Performance Share Unit is deferred by Grantee as provided in Section 6, payment with respect to the tandem Dividend Equivalent shall likewise be deferred. Payment under this Section 5 shall be made not later than 30 days after payment hereunder of the related tandem Performance Share Units. The Dividend Equivalent payment amount shall equal the aggregate cash dividends declared and paid with respect to one (1) share of Common Stock for the period beginning on the Date of Grant and ending on the date the vested, tandem Performance Share Unit is paid or deferred and before the Dividend Equivalent expires. However, should the timing of a particular payment under Section 6 to the Grantee in shares of Common Stock in conjunction with the timing of a particular cash dividend declared and paid on Common Stock be such that the Grantee receives such shares without the right to receive such dividend and the Grantee would not otherwise be entitled to payment under the expiring Dividend Equivalent with respect to such dividend, the Grantee, nevertheless, shall be entitled to such payment. Dividend Equivalent payments shall be subject to withholding for taxes.

Section 6. Payment of Performance Share Units. Payment of Performance Share Units subject to this Award shall be made to the Grantee in a single lump sum distribution as soon as practicable following the time such Performance Share Units become vested in accordance with Section 2 prior to their expiration but in no event later than 30 days following such vesting event, except to the extent deferred by the Grantee in accordance with such procedures as the Committee, or its designee, may prescribe that complies with the requirements of Code Section 409A, or any Canadian law equivalent, if applicable. Any deferral of Performance Share Units by the Grantee hereunder shall apply to both payment of Performance Share Units and the related tandem Dividend Equivalents. Payment shall be subject to withholding for taxes. Payment shall be in the form of cash equal to the Fair Market Value of one (1) share of Common Stock for each full vested Performance Share Unit, and any fractional vested Performance Share Unit shall be rounded up to the next whole share for purposes of both vesting under Section 2 and payment under Section 6.

Section 7. No Employment Right. Nothing in this Agreement or in the Plan shall confer upon the Grantee the right to continued employment by the Company or any Subsidiary, or affect the right of the Company or any Subsidiary to terminate the employment or service of the Grantee at any time for any reason.

Section 8. Nonalienation. The Performance Share Units and Dividend Equivalents subject to this Award are not assignable or transferable by Grantee. Upon any attempt to transfer, assign, pledge, hypothecate, sell or otherwise dispose of any such Performance Share Unit or Dividend Equivalent, or of any right or privilege conferred hereby, or upon the levy of any attachment or similar process upon such Performance Share Unit or Dividend Equivalent, or upon such right or privilege, such Performance Share Unit or Dividend Equivalent, or right or privilege, shall immediately become null and void.

Section 9. Grantee Confidentiality Obligations. In accepting this Performance Award, Grantee acknowledges that Grantee is obligated under Company policy, and under federal and state law, to protect and safeguard the confidentiality of trade secrets and other proprietary and confidential information belonging to the Company and its Affiliates that are acquired by Grantee during Grantee’s employment with the Company and its Affiliates, and that such obligations continue beyond the termination of such employment. Grantee agrees to notify any subsequent employer of such obligations and that the Company and its Affiliates, in order to enforce such obligations, may pursue legal recourse not only against Grantee, but against a subsequent employer of Grantee. Grantee agrees that he shall not disclose the existence or terms of this Agreement to anyone other than his spouse, tax advisor(s) and/or attorney(s), provided that he first obtains the agreement of such persons to be bound by the confidentiality provisions of this paragraph. Grantee also agrees to immediately give the Company written notice in accordance with the provisions of this Agreement in the event he is legally required to disclose any of the confidential information covered by the provisions of this paragraph.

4

Section 10. Nonsolicitation. Grantee agrees that he will not, either directly or indirectly, solicit, hire or employ, or cause any other person, company, or entity to solicit, hire or employ, any employee or contractor retained or employed by the Company or its affiliates during the period of Grantee’s employment and for a period of seven (7) years following Grantee’s termination of employment with the Company and its affiliates. The provisions of this paragraph shall not apply to contact initiated by an employee or contractor of the Company or its affiliates in response to a general solicitation of applications for employment. Grantee agrees that this Agreement is subject to the provisions of this paragraph.

Section 11. Notices. All notices under this Agreement shall be mailed or delivered by hand to the parties at their respective addresses set forth beneath their signatures below or at such other address as may be designated in writing by either party to the other party, or to their permitted transferees if applicable. Notices shall be effective upon receipt.

Section 12. Payments Subject to Clawback. To the extent that any payment under this Agreement is subject to clawback under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as it may be amended from time to time, such amount will be clawed back in appropriate circumstances, as determined under the terms and conditions prescribed by such Act and the authority issued thereunder.

Section 13. Determinations. Determinations by the Committee, or its delegatee, shall be final and conclusive with respect to the interpretation of the Plan and this Agreement.

Section 14. Governing Law and Severability. This validity and construction of this Agreement shall be governed, construed and enforced in accordance with the laws of the State of Delaware applicable to transactions that take place entirely within that state. The invalidity of any provision of this Agreement shall not affect any other provision of this Agreement, which shall remain in full force and effect.

Section 15. Certain Other Definitions. The following shall apply notwithstanding anything in this Agreement or the Plan to the contrary. The term “Change in Control” has the meaning given such term in Section 2(d) of the Spectra Energy Corp 2007 Long-Term Incentive Plan. The term “Subsidiaries” shall mean any entity that is wholly owned, directly or indirectly, by the Company, or any other affiliate of the Company that is so designated, from time to time, by the Committee.

Section 16. Conflicts with Plan, Correction of Errors, and Grantee’s Consent. In the event that any provision of this Agreement conflicts in any way with a provision of the Plan, such Plan provision shall be controlling and the applicable provision of this Agreement shall be without force and effect to the extent necessary to cause such Plan provision to be controlling. In the event that, due to administrative error, this Agreement does not accurately reflect an Award properly granted to the Grantee pursuant to the Plan, the Company, acting through its Executive Compensation Department, reserves the right to cancel any erroneous document and, if appropriate, to replace the cancelled document with a corrected document. It is the intention of the Company and the Grantee that this Award not result in unfavorable tax consequences to Grantee under Code Section 409A, or any Canadian law equivalent, as applicable. Accordingly, Grantee consents to such amendment of this Agreement as the Company may reasonably make in furtherance of such intention, and the Company shall promptly provide, or make available to, Grantee a copy of any such amendment. Further, to the extent that any term of this Agreement is ambiguous, such term shall be interpreted as necessary to comply with, or be exempt from, the requirements of Code Section 409A, as determined by the Company.

Notwithstanding the foregoing, this Award is subject to cancellation by the Company in its sole discretion unless the Grantee, by not later than                     ,         , has signed a duplicate of this Agreement, in the space provided below, and returned the signed duplicate to the Executive Compensation Department—Performance Stock (WO 1O23), Spectra Energy Corp, P. O. Box 1642, Houston, TX 77251-1642, which, if, and to the extent, permitted by the Executive Compensation Department, may be accomplished by electronic means.

5

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and granted in Houston, Texas, to be effective as of the Date of Grant.

ATTEST:	SPECTRA ENERGY CORP
By:	By:
Corporate Secretary	Its:	President & CEO, Spectra Energy Corp

Address for Notices:

5400 Westheimer Court

Mail Drop 1O23

Houston, Texas 77056

Attention: Karen Gowder

Acceptance of Performance Award

IN WITNESS OF Grantee’s acceptance of this Performance Award and Grantee’s agreement to be bound by the provisions of this Agreement and the Plan, Grantee has signed this Agreement this      day of                     , 2011.

Grantee’s Signature

(print name)

(social security/social insurance number)

Address for Notices:

(address)

(address)

6

EXHIBIT A

The Peer Group, with their stock symbol listed, consists of the following:

Ameren Corporation (AEE)

CenterPoint Energy, Inc. (CNP)

Consolidated Edison, Inc. (ED)

Dominion Resources, Inc. (D)

DTE Energy Company (DTE)

El Paso Corporation (EP)

Enbridge Inc. (ENB)

EQT Corporation (EQT)

Kinder Morgan (KMI)

National Fuel Gas Company (NFG)

NiSource Inc. (NI)

ONEOK, Inc. (OKE)

PG&E Corporation (PCG)

Public Service Enterprise Group Incorporated (PEG)

Questar Corporation (STR)

Sempra Energy (SRE)

Southern Union (SUG)

TransCanada Corporation (TRP)

The Williams Companies, Inc. (WMB)

Xcel Energy Inc. (XEL)

7

EX-10.3

Exhibit 10.3

SPECTRA ENERGY CORP

PERFORMANCE AWARD AGREEMENT

This Performance Award Agreement (the “Agreement”) has been made as of                              ,              (the “Date of Grant”) between Spectra Energy Corp, a Delaware Company, with its principal offices in Houston, Texas (the “Company”), and              (the “Grantee”).

RECITALS

Under the amended and restated Spectra Energy Corp 2007 Long-Term Incentive Plan as it may, from time to time, be amended (the “Plan”), the Compensation Committee of the Board of Directors of the Company (the “Committee”), or its delegatee, has determined the form of this Agreement and selected the Grantee, as an Employee, to receive the award evidenced by this Agreement (the “Award”) and the Performance Share Units and tandem Dividend Equivalents that are subject hereto. The applicable provisions of the Plan are incorporated in this Agreement by reference, including the definitions of terms contained in the Plan (unless such terms are otherwise defined herein).

AWARD

In accordance with the Plan, the Company has made this Award, effective as of the Date of Grant and upon the following terms and conditions:

Section 1. Number and Nature of Performance Share Units and Tandem Dividend Equivalents. The number of Performance Share Units and the number of tandem Dividend Equivalents subject to this Award are each                      (            ). Each Performance Share Unit, upon becoming vested before its expiration, represents a right to receive payment in the form of one (1) share of Common Stock. Each tandem Dividend Equivalent, after its tandem Performance Share Unit vests, represents a right to receive a cash payment equivalent in amount to the aggregate cash dividends declared and paid on one (1) share of Common Stock for the period beginning on the Date of Grant and ending on the date such Performance Share Unit is vested. Each tandem Performance Share Unit, consisting of both the Performance Share Unit and the tandem Dividend Equivalents, is either paid or is deferred in accordance with procedures established by the Committee that comply with the requirements of Code Section 409A. Performance Share Units and Dividend Equivalents are used solely as units of measurement, and are not shares of Common Stock and the Grantee is not, and has no rights as, a shareholder of the Company by virtue of this Award.

Section 2. Vesting of Performance Share Units. (a) Provided that Grantee’s continuous employment by the Company, including Subsidiaries, has not terminated, or as otherwise provided in Sections 2(b) or 2(c), Performance Share Units subject to this Award shall become vested upon the written certification by the Committee, or its delegatee, in its sole discretion, of the achievement of the Performance Goal, which is the Company’s Total Shareholder Return (“TSR”) relative to the TSR of the peer group of companies listed on Exhibit A to this Agreement (the “Peer Group”), for the period beginning January 1, 2012 and ending December 31, 2014 (“Performance Period”), at, or above, the 30^th percentile, in accordance with the applicable vesting percentage specified for such percentile ranking in the following schedule:

Percentile Ranking	Vesting Percentage
Lower than 30th	0%
30th	50%
*	*
50th	100%
*	*
80th or higher	200%

1

* When such determination is of a percentile ranking between those specified, such results will be interpolated on a straight-line basis to determine the applicable vesting percentage.

All Performance Share Units that do not so become vested during the Performance Period shall be forfeited. For the purposes of this Agreement, TSR shall be calculated using the formula Percent TSR = ((B*(1 + C) / A) -1), where the values of A, B and C are as follows:

A = average closing price of a share on the NYSE on the twenty consecutive trading days ending on December 31, 2011;

B = average closing price of a share on the NYSE on the twenty consecutive trading days ending on December 31, 2014; and

C = the number of additional shares owned assuming dividends are reinvested as paid throughout the measurement period.

In addition, when calculating TSR for the Performance Period, (i) the performance of a company in the Peer Group will not be used in calculating the Peer Group’s TSR if the company is not publicly traded (i.e., has no ticker symbol) at the end of the performance period; (ii) the performance of any company in the Peer Group that becomes bankrupt during the measurement period will be included in the calculation of peer group performance even if it has no ticker symbol at the end of the measurement period; (iii) The performance of the surviving entity(s) will be used in the event there is a combination of any of the Peer Group companies during the measurement period; (iv) no new companies will be added to the Peer Group during the measurement period (including a non-peer company that may acquire a member of the Peer Group); and, (v) the Committee retains discretion to reduce performance awards that were otherwise earned in the event that Spectra’s TSR during the measurement period is negative.

(b) In the event that, prior to the date that the determination of the achievement of the Performance Goal is made, the Grantee’s continuous employment by the Company, including Subsidiaries, terminates, the Performance Share Units subject to this Award shall be forfeited, except that if such employment terminates (i) at a time when Grantee is eligible for an immediately payable early or normal retirement benefit under the Spectra Energy Retirement Cash Balance Plan or under another retirement plan of the Company or a Subsidiary which plan the Committee, or its delegatee, in its sole discretion, determines to be the functional equivalent of the Spectra Energy Retirement Cash Balance Plan (“Functional Equivalent Plan”), unless the Committee, or its delegatee, in its sole discretion, determines that Grantee is in violation of any obligation identified in Section 3, (ii) as the result of the termination of such employment by the Company, or employing Subsidiary, other than for cause, as determined by the Company or employing Subsidiary, in its sole discretion, or (iii) as the direct and sole result, as determined by the Company, or employing Subsidiary, in its sole discretion, of the divestiture of assets, a business, or a company, by the Company or a Subsidiary, the Performance Share Units subject to this Award shall vest at the end of the Performance Period upon such determination of the achievement of the Performance Goal, at such vesting percentage determined by the Committee, or its delegatee, by prorating on the basis of the portion of the Performance Period that such employment continued while Grantee was entitled to payment of salary (unless such termination occurs after the end of the Performance Period, in which event the number of Performance Share Units earned, if any, shall not be prorated). For the purposes of this Agreement, “Cause” for termination by the Company of the Grantee’s employment shall mean (i) a material failure by the Grantee to carry out, or malfeasance or gross insubordination in carrying out, reasonably assigned duties or instructions consistent with the Grantee’s position, (ii) the final conviction of the Grantee of a felony or crime involving moral turpitude, (iii) an egregious act of dishonesty by the Grantee (including, without limitation, theft or embezzlement) in connection with employment, or a malicious action by the Grantee toward the customers or employees of the Company or any Affiliate, (iv) a material breach by the Grantee of the Company’s Code of Business Ethics, or (v) the failure of the Grantee to cooperate fully with governmental investigations involving the Company or its Affiliates; all as determined by the Company in its sole discretion.

2

For purposes of this Agreement, the termination of Grantee’s employment shall not result in the payment of any amount hereunder that is subject to, and not exempt under, Code Section 409A, unless such termination of employment constitutes a “separation from service” as defined under Code Section 409A.

(c) In the event that (i) Grantee’s employment terminates (A) as the result of the Grantee’s death, or (B) as the result of the Grantee’s permanent and total disability within the meaning of Code Section 22(e)(3), or, (ii) a Change in Control occurs before the Performance Period has ended and (A) before the Grantee’s continuous employment by the Company, including Subsidiaries, terminates, or (B) after such employment terminates during the Performance Period, (1) at a time when Grantee is eligible for an immediately payable, early or normal retirement benefit under the Spectra Energy Retirement Cash Balance Plan or Functional Equivalent Plan, unless the Company, or its successor, in its sole discretion, determines that Grantee is in violation of any obligation identified in Section 3, or (2) as the result of an event listed in item (ii) of the first sentence of Section 2(b), the Performance Share Units subject to this Award shall vest upon such occurrence, at the 100% vesting percentage, irrespective of any subsequent determination of the achievement of the Performance Goal.

Section 3. Violation of Grantee Obligation. In consideration of the continued vesting opportunity provided under Section 2 following the termination of Grantee’s continuous employment by the Company, including Subsidiaries, if, at any time of such termination of employment, Grantee is eligible for an immediately payable early or normal retirement benefit under the Spectra Energy Retirement Cash Balance Plan or Functional Equivalent Plan, Grantee agrees that during the period beginning with such termination of employment and ending with the third anniversary of the Date of Grant (“Restricted Period”), Grantee shall not (i) without the prior written consent of the Company, or its delegatee, become employed by, serve as a principal, partner, or member of the board of directors of, or in any similar capacity with, or otherwise provide service to, a competitor, to the detriment, of the Company or any Subsidiary, or (ii) violate any of Grantee’s other noncompetition obligations, or any of Grantee’s nonsolicitation or nondisclosure obligations, to the Company or any Subsidiary. The noncompetition obligations of clause (i) of the preceding sentence shall be limited in scope and shall be effective only to competition with the Company or any Subsidiary in the businesses of: gathering, processing or transmission of natural gas, resale or arranging for the purchase or for the resale, brokering, marketing, or trading of natural gas, or derivatives thereof; gathering, compression, treating, processing, fractionation, transportation, trading, marketing of natural gas components, including natural gas liquids; and sales and marketing of natural gas, domestically and abroad; and any other business in which the Company, including Subsidiaries, is engaged at the termination of Grantee’s continuous employment by the Company, including Subsidiaries; and within the following geographical areas (i) any country in the world where the Company, including Subsidiaries, has at least US$25 million in capital deployed as of termination of Grantee’s continuous employment by Company, including Subsidiaries; (ii) the continent of North America; (iii) the United States of America and Canada; (iv) the United States of America; (v) the states of Virginia, Georgia, Florida, Texas, California, Massachusetts, Illinois, Michigan, New York, Colorado, Oklahoma, Kentucky, Ohio and Louisiana; and (vi) any state or states or province or provinces with respect to which was conducted a business of the Company, including Subsidiaries, which business constituted a substantial portion of Grantee’s employment. The Company and Grantee intend the above restrictions on competition in geographical areas to be entirely severable and independent, and any invalidity or enforceability of this provision with respect to any one or more of such restrictions, including geographical areas, shall not render this provision unenforceable as applied to any one or more of the other restrictions, including geographical areas. If any part of this provision is held to be unenforceable because of the duration, scope or area covered, the Company and Grantee agree to modify such part, or that the court making such holding shall have the power to modify such part, to reduce its duration, scope or area, including deletion of specific words and phrases, i.e., “blue penciling”, and in its modified, reduced or blue pencil form, such part shall become enforceable and shall be enforced. Nothing in Section 3 shall be construed to prohibit Grantee being retained during the Restricted Period in a capacity as an attorney licensed to practice law, or to restrict Grantee providing advice and counsel in such capacity, in any jurisdiction where such prohibition or restriction is contrary to law.

3

Section 4. Forfeiture/Expiration. Any Performance Share Unit subject to this Award shall be forfeited upon the termination of the Grantee’s continuous employment by the Company, including Subsidiaries, from the Date of Grant, except to the extent otherwise provided in Section 2, and, if not previously vested and paid, or deferred, or forfeited, shall expire immediately before the tenth (10^th) anniversary of the Date of Grant. Any Dividend Equivalent subject to this Award shall expire at the time its tandem Performance Share Unit (i) is vested and paid, or deferred, (ii) is forfeited, or (iii) expires.

Section 5. Dividend Equivalent Payment. Payment with respect to any Dividend Equivalent subject to this Award that is in tandem with a Performance Share Unit that is vested and paid shall be paid in cash to the Grantee as soon as practicable following the vesting and payment of the Performance Share Unit, or, if the vested Performance Share Unit is deferred by Grantee as provided in Section 6, payment with respect to the tandem Dividend Equivalent shall likewise be deferred. Payment under this Section 5 shall be made not later than 30 days after payment hereunder of the related tandem Performance Share Units. The Dividend Equivalent payment amount shall equal the aggregate cash dividends declared and paid with respect to one (1) share of Common Stock for the period beginning on the Date of Grant and ending on the date the vested, tandem Performance Share Unit is paid or deferred and before the Dividend Equivalent expires. However, should the timing of a particular payment under Section 6 to the Grantee in shares of Common Stock in conjunction with the timing of a particular cash dividend declared and paid on Common Stock be such that the Grantee receives such shares without the right to receive such dividend and the Grantee would not otherwise be entitled to payment under the expiring Dividend Equivalent with respect to such dividend, the Grantee, nevertheless, shall be entitled to such payment. Dividend Equivalent payments shall be subject to withholding for taxes.

Section 6. Payment of Performance Share Units. Payment of Performance Share Units subject to this Award shall be made to the Grantee in a single lump sum distribution as soon as practicable following the time such Performance Share Units become vested in accordance with Section 2 prior to their expiration but in no event later than 30 days following such vesting event, except to the extent deferred by the Grantee in accordance with such procedures as the Committee, or its designee, may prescribe that complies with the requirements of Code Section 409A, or any Canadian law equivalent, if applicable. Any deferral of Performance Share Units hereunder shall apply to both payment of Performance Share Units and the related tandem Dividend Equivalents. Payment shall be subject to withholding for taxes. Payment shall be in the form of one (1) share of Common Stock for each full vested Performance Share Unit, and any fractional vested Performance Share Unit shall be rounded up to the next whole share for purposes of both vesting under Section 2 and payment under Section 6. Notwithstanding the foregoing, to the extent Grantee fails to timely tender to the Company sufficient cash to satisfy withholding for tax requirements, such unsatisfied withholding shall be applied to reduce the number of shares of Common Stock that would otherwise be paid (valued at Fair Market Value on the date the respective Performance Share Units became vested). In the event that payment, after any such reduction in the number of shares of Common Stock to satisfy withholding for tax requirements, would be for less than ten (10) shares of Common Stock, then, if so determined by the Committee, or its delegatee, in its sole discretion, payment, instead of being made in shares of Common Stock, shall be made in a cash amount equal in value to the shares of Common Stock that would otherwise be paid, valued at Fair Market Value on the date the respective Performance Share Units became vested.

Section 7. No Employment Right. Nothing in this Agreement or in the Plan shall confer upon the Grantee the right to continued employment by the Company or any Subsidiary, or affect the right of the Company or any Subsidiary to terminate the employment or service of the Grantee at any time for any reason.

Section 8. Nonalienation. The Performance Share Units and Dividend Equivalents subject to this Award are not assignable or transferable by Grantee. Upon any attempt to transfer, assign, pledge, hypothecate, sell or otherwise dispose of any such Performance Share Unit or Dividend Equivalent, or of any right or privilege conferred hereby, or upon the levy of any attachment or similar process upon such Performance Share Unit or Dividend Equivalent, or upon such right or privilege, such Performance Share Unit or Dividend Equivalent, or right or privilege, shall immediately become null and void.

4

Section 9. Grantee Confidentiality Obligations. In accepting this Performance Award, Grantee acknowledges that Grantee is obligated under Company policy, and under federal and state law, to protect and safeguard the confidentiality of trade secrets and other proprietary and confidential information belonging to the Company and its Affiliates that are acquired by Grantee during Grantee’s employment with the Company and its Affiliates, and that such obligations continue beyond the termination of such employment. Grantee agrees to notify any subsequent employer of such obligations and that the Company and its Affiliates, in order to enforce such obligations, may pursue legal recourse not only against Grantee, but against a subsequent employer of Grantee. Grantee agrees and that he shall not disclose the existence or terms of this Agreement to anyone other than his spouse, tax advisor(s) and/or attorney(s), provided that he first obtains the agreement of such persons to be bound by the confidentiality provisions of this paragraph. Grantee also agrees to immediately give the Company written notice in accordance with the provisions of this Agreement in the event he is legally required to disclose any of the confidential information covered by the provisions of this paragraph.

Section 10. Nonsolicitation. Grantee further agrees that he will not, either directly or indirectly, solicit, hire or employ, or cause any other person, company, or entity to solicit, hire or employ, any employee or contractor retained or employed by the Company or its affiliates during the period of Grantee’s employment and for a period of seven (7) years following Grantee’s termination of employment with the Company and its affiliates. The provisions of this paragraph shall not apply to contact initiated by an employee or contractor of the Company or its affiliates in response to a general solicitation of applications for employment. Grantee agrees that this Agreement is subject to the provisions of this paragraph.

Section 11. Notices. All notices under this Agreement shall be mailed or delivered by hand to the parties at their respective addresses set forth beneath their signatures below or at such other address as may be designated in writing by either party to the other party, or to their permitted transferees if applicable. Notices shall be effective upon receipt.

Section 12. Payments Subject to Clawback. To the extent that any payment under this Agreement is subject to clawback under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as it may be amended from time to time, such amount will be clawed back in appropriate circumstances, as determined under the terms and conditions prescribed by such Act and the authority issued thereunder.

Section 13. Determinations. Determinations by the Committee, or its delegatee, shall be final and conclusive with respect to the interpretation of the Plan and this Agreement.

Section 14. Governing Law and Severability. This validity and construction of this Agreement shall be governed, construed and enforced in accordance with the laws of the State of Delaware applicable to transactions that take place entirely within that state. The invalidity of any provision of this Agreement shall not affect any other provision of this Agreement, which shall remain in full force and effect.

Section 15. Certain Other Definitions. The following shall apply notwithstanding anything in this Agreement or the Plan to the contrary. The term “Change in Control” has the meaning given such term in Section 2(d) of the Spectra Energy Corp 2007 Long-Term Incentive Plan. The term “Subsidiaries” shall mean any entity that is wholly owned, directly or indirectly, by the Company, or any other affiliate of the Company that is so designated, from time to time, by the Committee.

Section 16. Conflicts with Plan, Correction of Errors, and Grantee’s Consent. In the event that any provision of this Agreement conflicts in any way with a provision of the Plan, such Plan provision shall be controlling and the applicable provision of this Agreement shall be without force and effect to the extent necessary to cause such Plan provision to be controlling. In the event that, due to administrative error, this Agreement does not accurately reflect an Award properly granted to the Grantee pursuant to the Plan, the Company, acting through its Executive Compensation Department, reserves the right to cancel any erroneous document and, if appropriate, to replace the cancelled document with a corrected document. It is the intention of

5

the Company and the Grantee that this Award not result in unfavorable tax consequences to Grantee under Code Section 409A, or any Canadian law equivalent, as applicable. Accordingly, Grantee consents to such amendment of this Agreement as the Company may reasonably make in furtherance of such intention, and the Company shall promptly provide, or make available to, Grantee a copy of any such amendment. Further, to the extent that any term of this Agreement is ambiguous, such term shall be interpreted as necessary to comply with, or be exempt under, the requirements of Code Section 409A, as determined by the Company.

Notwithstanding the foregoing, this Award is subject to cancellation by the Company in its sole discretion unless the Grantee, by not later than                          ,             , has signed a duplicate of this Agreement, in the space provided below, and returned the signed duplicate to the Executive Compensation Department—Performance Stock (WO 1O23), Spectra Energy Corp, P. O. Box 1642, Houston, TX 77251-1642, which, if, and to the extent, permitted by the Executive Compensation Department, may be accomplished by electronic means.

6

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and granted in Houston, Texas, to be effective as of the Date of Grant.

ATTEST:	SPECTRA ENERGY CORP
By:	By:
Corporate Secretary	Its:	President & CEO, Spectra Energy Corp

Address for Notices:

5400 Westheimer Court

Mail Drop 1O23

Houston, Texas 77056

Attention: Karen Gowder

Acceptance of Performance Award

IN WITNESS OF Grantee’s acceptance of this Performance Award and Grantee’s agreement to be bound by the provisions of this Agreement and the Plan, Grantee has signed this Agreement this      day of                     , 2011.

Grantee’s Signature

(print name)

(social security/social insurance number)

Address for notices:

(address)

(address)

7

EXHIBIT A

The Peer Group, with their stock symbol listed, consists of the following:

Ameren Corporation (AEE)

CenterPoint Energy, Inc. (CNP)

Consolidated Edison, Inc. (ED)

Dominion Resources, Inc. (D)

DTE Energy Company (DTE)

El Paso Corporation (EP)

Enbridge Inc. (ENB)

EQT Corporation (EQT)

Kinder Morgan (KMI)

National Fuel Gas Company (NFG)

NiSource Inc. (NI)

ONEOK, Inc. (OKE)

PG&E Corporation (PCG)

Public Service Enterprise Group Incorporated (PEG)

Questar Corporation (STR)

Sempra Energy (SRE)

Southern Union (SUG)

TransCanada Corporation (TRP)

The Williams Companies, Inc. (WMB)

Xcel Energy Inc. (XEL)

8

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gregory L. Ebel, certify that:

1) I have reviewed this quarterly report on Form 10-Q of Spectra Energy Corp;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2012	/S/    GREGORY L. EBEL
	Gregory L. Ebel
	President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, J. Patrick Reddy, certify that:

1) I have reviewed this quarterly report on Form 10-Q of Spectra Energy Corp;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2012	/S/    J. PATRICK REDDY
	J. Patrick Reddy
	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Spectra Energy Corp on Form 10-Q for the period ending March 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gregory L. Ebel, President and Chief Executive Officer of Spectra Energy Corp, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Spectra Energy Corp.

Date: May 9, 2012	/S/    GREGORY L. EBEL
	Gregory L. Ebel
	President and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Spectra Energy Corp on Form 10-Q for the period ending March 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, J. Patrick Reddy, Chief Financial Officer of Spectra Energy Corp, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Spectra Energy Corp.

Date: May 9, 2012	/S/    J. PATRICK REDDY
	J. Patrick Reddy
	Chief Financial Officer

XML

Business Segment Data (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012		Mar. 31, 2011
Segment Reporting Information [Line Items]
Unaffiliated Revenues	$ 1,544		$ 1,612
Total operating revenues	1,544	[1]	1,612	[1]
Segment EBIT/ Consolidated Earnings from Continuing Operations before Income Taxes	496	[1]	514	[1]
Interest expense	157	[1]	155	[1]
Interest income and other	29	[1],[2]	25	[1],[2]
U.S. Transmission
Segment Reporting Information [Line Items]
Unaffiliated Revenues	493		481
Intersegment Revenues	2		2
Total operating revenues	495	[1]	483	[1]
Segment EBIT/ Consolidated Earnings from Continuing Operations before Income Taxes	271	[1]	279	[1]
Distribution
Segment Reporting Information [Line Items]
Unaffiliated Revenues	597		696
Total operating revenues	597	[1]	696	[1]
Segment EBIT/ Consolidated Earnings from Continuing Operations before Income Taxes	151	[1]	167	[1]
Western Canada Transmission & Processing
Segment Reporting Information [Line Items]
Unaffiliated Revenues	453		433
Intersegment Revenues	13		6
Total operating revenues	466	[1]	439	[1]
Segment EBIT/ Consolidated Earnings from Continuing Operations before Income Taxes	138	[1]	141	[1]
Field Services
Segment Reporting Information [Line Items]
Segment EBIT/ Consolidated Earnings from Continuing Operations before Income Taxes	93	[1]	81	[1]
Total reportable segments
Segment Reporting Information [Line Items]
Unaffiliated Revenues	1,543		1,610
Intersegment Revenues	15		8
Total operating revenues	1,558	[1]	1,618	[1]
Segment EBIT/ Consolidated Earnings from Continuing Operations before Income Taxes	653	[1]	668	[1]
Other
Segment Reporting Information [Line Items]
Unaffiliated Revenues	1		2
Intersegment Revenues	20		15
Total operating revenues	21	[1]	17	[1]
Segment EBIT/ Consolidated Earnings from Continuing Operations before Income Taxes	(29)	[1]	(24)	[1]
Eliminations
Segment Reporting Information [Line Items]
Intersegment Revenues	(35)		(23)
Total operating revenues	$ (35)	[1]	$ (23)	[1]

[1] Excludes amounts associated with entities included in discontinued operations.

[2] Includes foreign currency transaction gains and losses and the add-back of noncontrolling interests related to segment EBIT.

XML

Debt and Credit Facilities - Additional Information (Detail) (Spectra Energy Capital, LLC, Covenant Requirement)	Mar. 31, 2012
Spectra Energy Capital, LLC | Covenant Requirement
Debt Instrument [Line Items]
Debt-to-total capitalization ratio Maximum	65.00%
Debt-to-total capitalization ratio	58.00%

XML

Sales of Propane to Affiliates of DCP Midstream (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Related Party Transaction [Line Items]
Sales of propane	$ 57	$ 84

XML

Assets and Liabilities Measured at Fair Value on Recurring Basis with Fair Value Hierarchy Levels (Detail) (Fair Value, Measurements, Recurring, USD $) In Millions, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	$ 137	$ 150
Fair Value Liabilities	31	30
Corporate debt securities | Cash and cash equivalents
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	61	49
Corporate debt securities | Current Assets-other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	12	2
Corporate debt securities | Investments and Other Assets-Other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	6	16
Interest rate swaps | Current Assets-other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	10
Interest rate swaps | Investments and Other Assets-Other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	45	66
Interest rate swaps | Deferred credits and other liabilities-regulatory and other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities	16	16
Money market funds | Investments and Other Assets-Other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	3	3
Natural gas purchase contracts | Current Liabilities-Other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities	1	1
Natural gas purchase contracts | Deferred credits and other liabilities-regulatory and other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities	14	13
Canadian government securities | Current Assets-other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets		14
Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	3	17
Level 1 | Money market funds | Investments and Other Assets-Other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	3	3
Level 1 | Canadian government securities | Current Assets-other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets		14
Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	134	133
Fair Value Liabilities	16	16
Level 2 | Corporate debt securities | Cash and cash equivalents
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	61	49
Level 2 | Corporate debt securities | Current Assets-other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	12	2
Level 2 | Corporate debt securities | Investments and Other Assets-Other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	6	16
Level 2 | Interest rate swaps | Current Assets-other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	10
Level 2 | Interest rate swaps | Investments and Other Assets-Other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	45	66
Level 2 | Interest rate swaps | Deferred credits and other liabilities-regulatory and other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities	16	16
Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities	15	14
Level 3 | Natural gas purchase contracts | Current Liabilities-Other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities	1	1
Level 3 | Natural gas purchase contracts | Deferred credits and other liabilities-regulatory and other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities	$ 14	$ 13

XML

Investments in and Loans to Unconsolidated Affiliates - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Schedule of Equity Method Investments [Line Items]
Equity in earnings of unconsolidated affiliates	$ 118	$ 106
DCP Midstream, LLC
Schedule of Equity Method Investments [Line Items]
Percentage of ownership interests	50.00%
Equity in earnings of unconsolidated affiliates	$ 21	$ 14

XML

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2012

Assets and Liabilities Measured at Fair Value on Recurring Basis with Fair Value Hierarchy Levels

The following table presents, for each of the fair value hierarchy levels, assets and liabilities that are measured and recorded at fair value on a recurring basis:

Description	Condensed Consolidated Balance Sheet Caption	March 31, 2012
		Total		Level 1		Level 2		Level 3
		(in millions)
Corporate debt securities	Cash and cash equivalents	$	61	$	—	$	61	$	—
Corporate debt securities	Current assets—other		12		—		12		—
Derivative assets—interest rate swaps	Current assets—other		10		—		10		—
Corporate debt securities	Investments and other assets—other		6		—		6		—
Derivative assets—interest rate swaps	Investments and other assets—other		45		—		45		—
Money market funds	Investments and other assets—other		3		3		—		—
Total Assets		$	137	$	3	$	134	$	—
Derivative liabilities—natural gas purchase contracts	Current liabilities— other	$	1	$	—	$	—	$	1
Derivative liabilities—natural gas purchase contracts	Deferred credits and other liabilities—regulatory and other		14		—		—		14
Derivative liabilities—interest rate swaps	Deferred credits and other liabilities—regulatory and other		16		—		16		—
Total Liabilities		$	31	$	—	$	16	$	15
Description	Condensed Consolidated Balance Sheet Caption	December 31, 2011
		Total		Level 1		Level 2		Level 3
		(in millions)
Corporate debt securities	Cash and cash equivalents	$	49	$	—	$	49	$	—
Canadian government securities	Current assets—other		14		14		—		—
Corporate debt securities	Current assets—other		2		—		2		—
Corporate debt securities	Investments and other assets—other		16		—		16		—
Derivative assets—interest rate swaps	Investments and other assets—other		66		—		66		—
Money market funds	Investments and other assets—other		3		3		—		—
Total Assets		$	150	$	17	$	133	$	—
Derivative liabilities—natural gas purchase contracts	Current liabilities—other	$	1	$	—	$	—	$	1
Derivative liabilities—natural gas purchase contracts	Deferred credits and other liabilities—regulatory and other		13		—		—		13
Derivative liabilities—interest rate swaps	Deferred credits and other liabilities—regulatory and other		16		—		16		—
Total Liabilities		$	30	$	—	$	16	$	14

Changes in Level 3 Assets and Liabilities that are Measured at Fair Value on a Recurring Basis using Significant Unobservable Inputs

The following table presents changes in Level 3 assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs:

	Three Months Ended March 31,
	2012			2011
	(in millions)
Long-term derivative assets (liabilities)
Fair value, beginning of period	$	(14	)	$	(6	)
Total realized/unrealized gains (losses):
Included in earnings		1			(1	)
Included in other comprehensive income		(2	)		1
Fair value, end of period	$	(15	)	$	(6	)
Total gains for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets/liabilities held at the end of the period	$	1		$	3

Fair Value of Financial Instruments Recorded and Carried at Book Value

The fair values of financial instruments that are recorded and carried at book value are summarized in the following table. Judgment is required in interpreting market data to develop the estimates of fair value. These estimates are not necessarily indicative of the amounts we could have realized in current markets.

	March 31, 2012				December 31, 2011
	Book Value		Approximate Fair Value		Book Value		Approximate Fair Value
	(in millions)
Note receivable, noncurrent (a)	$	71	$	71	$	71	$	71
Long-term debt, including current maturities (b)		10,709		12,470		10,600		12,398

(a) Included within Investments in and Loans to Unconsolidated Affiliates.

(b) Excludes unamortized items and a fair value hedge carrying value adjustment.

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Fair Value of Financial Instruments Recorded and Carried at Book Value (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012		Dec. 31, 2011
Book Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Note receivable, noncurrent	$ 71	[1]	$ 71	[1]
Long-term debt, including current maturities	10,709	[2]	10,600	[2]
Approximate Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Note receivable, noncurrent	71	[1]	71	[1]
Long-term debt, including current maturities	$ 12,470	[2]	$ 12,398	[2]

[1] Included within Investments in and Loans to Unconsolidated Affiliates.

[2] Excludes unamortized items and a fair value hedge carrying value adjustment.

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General (Tables)

3 Months Ended

Mar. 31, 2012

Correction and Change in Presentation Reflected on Condensed Consolidated Statement of Cash Flows

The correction and change in presentation reflected on the Condensed Consolidated Statement of Cash Flows are as follows:

	Proceeds From the Issuance of Long-Term Debt			Payments For the Redemption of Long-Term Debt
	(in millions)
Three Months Ended March 31, 2011
As previously reported	$	919		$	(942	)
Less non-cash activity		(896	)		896
As corrected		23			(46	)
Less revolving credit facility activity		(23	)		10
Long-term debt activity	$	—		$	(36	)

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Estimated Fair Values of Available for Sale Securities (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Schedule of Available-for-sale Securities [Line Items]
Estimated Fair Value	$ 21	$ 35
Corporate debt securities
Schedule of Available-for-sale Securities [Line Items]
Estimated Fair Value	18	18
Canadian government securities
Schedule of Available-for-sale Securities [Line Items]
Estimated Fair Value		14
Money market funds
Schedule of Available-for-sale Securities [Line Items]
Estimated Fair Value	$ 3	$ 3

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Results Classified as Income (Loss) From Discontinued Operations, Net of Tax in Condensed Consolidated Statements of Operations (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenues	$ 57	$ 84
Pre-tax Earnings	3	10
Income Tax Expense (Benefit)	1	3
Income (Loss) From Discontinued Operations, Net of Tax	2	7
Other
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenues	57	84
Pre-tax Earnings	3	10
Income Tax Expense (Benefit)	1	3
Income (Loss) From Discontinued Operations, Net of Tax	$ 2	$ 7

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Correction and Change in Presentation Reflected on Condensed Consolidated Statement of Cash Flows (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2011
Payments for the redemption of long-term debt	$ (36)
As previously reported
Proceeds From the Issuance of Long-Term Debt	919
Payments for the redemption of long-term debt	(942)
Non-cash activity
Proceeds From the Issuance of Long-Term Debt	(896)
Payments for the redemption of long-term debt	896
As corrected
Proceeds From the Issuance of Long-Term Debt	23
Payments for the redemption of long-term debt	(46)
Revolving credit facility activity
Proceeds From the Issuance of Long-Term Debt	(23)
Payments for the redemption of long-term debt	$ 10

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Available Credit Facilities and Restrictive Debt Covenants (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012
Line of Credit Facility [Line Items]
Total Credit Facilities Capacity	$ 2,901
Outstanding Commercial Paper	1,031
Outstanding Letters of Credit	6
Total	1,037
Available Credit Facilities Capacity	1,864
Spectra Energy Capital, LLC | Multi Year Syndicated
Line of Credit Facility [Line Items]
Expiration Date	2016	[1]
Total Credit Facilities Capacity	1,500	[1]
Outstanding Commercial Paper	836	[1]
Outstanding Letters of Credit	6	[1]
Total	842	[1]
Available Credit Facilities Capacity	658	[1]
Union Gas Limited | Multi Year Syndicated
Line of Credit Facility [Line Items]
Expiration Date	2016	[2]
Total Credit Facilities Capacity	401	[2]
Outstanding Commercial Paper	155	[2]
Total	155	[2]
Available Credit Facilities Capacity	246	[2]
Westcoast Energy Inc. | Multi Year Syndicated
Line of Credit Facility [Line Items]
Expiration Date	2016	[3]
Total Credit Facilities Capacity	300	[3]
Available Credit Facilities Capacity	300	[3]
Spectra Energy Partners, LP | Multi Year Syndicated
Line of Credit Facility [Line Items]
Expiration Date	2016	[4]
Total Credit Facilities Capacity	700	[4]
Outstanding Commercial Paper	40	[4]
Total	40	[4]
Available Credit Facilities Capacity	$ 660	[4]

[1] Credit facility contains a covenant requiring our consolidated debt-to-total capitalization ratio, as defined in the agreement, to not exceed 65%. This ratio was 58% at March 31, 2012.

[2] U.S. dollar equivalent at March 31, 2012. The credit facility is 400 million Canadian dollars and contains a covenant that requires the Union Gas debt-to-total capitalization ratio to not exceed 75% and a provision which requires Union Gas to repay all borrowings under the facility for a period of two days during the second quarter of each year. The ratio was 66% at March 31, 2012.

[3] U.S. dollar equivalent at March 31, 2012. The credit facility is 300 million Canadian dollars and contains a covenant that requires the Westcoast non-consolidated debt-to-total capitalization ratio to not exceed 75%. The ratio was 45% at March 31, 2012.

[4] Credit facility contains a covenant that requires Spectra Energy Partners to maintain a ratio of total Debt-to-Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), as defined in the credit agreement, of 5.0 of less. As of March 31, 2012, this ratio was 2.7. Adjusted EBITDA is a non-GAAP measure. Because Adjusted EBITDA excludes some, but not all, items that affect net income and is defined differently by companies in our industry, Spectra Energy Partners' definition of Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Adjusted EBITDA should not be considered an alternative to net income, operating income, cash from operations or any other measure of financial performance or liquidity presented in accordance with GAAP.

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Condensed Consolidating Statements of Cash Flows (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 361	$ 382
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	187	178
Equity in earnings of unconsolidated affiliates	(118)	(106)
Distributions received from unconsolidated affiliates	114	104
Other	2	164
Net cash provided by (used in) operating activities	546	722
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(343)	(329)
Investments in and loans to unconsolidated affiliates		(4)
Acquisitions	(30)
Purchases of held-to-maturity securities	(861)	(214)
Proceeds from sales and maturities of held-to-maturity securities	734	186
Purchases of available-for-sale securities		(548)
Proceeds from sales and maturities of available-for-sale securities	14	576
Distributions received from unconsolidated affiliates	5
Other changes in restricted funds	79	(10)
Other		11
Net cash used in investing activities	(402)	(332)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments for the redemption of long-term debt		(36)
Net increase (decrease) in short-term borrowings and commercial paper	(26)	(182)
Net increase (decrease) in revolving credit facilities borrowings		13
Distributions to noncontrolling interests	(27)	(23)
Dividends paid on common stock	(185)	(170)
Other	24	16
Net cash provided by (used in) financing activities	(214)	(382)
Effect of exchange rate changes on cash	1	2
Net increase (decrease) in cash and cash equivalents	(69)	10
Cash and cash equivalents at beginning of period	174	130
Cash and cash equivalents at end of period	105	140
Spectra Energy Corp
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	333	357
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in earnings of subsidiaries	(329)	(359)
Other	(55)	(13)
Net cash provided by (used in) operating activities	(51)	(15)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid on common stock	(185)	(170)
Distributions and advances from (to) affiliates	213	168
Other	23	17
Net cash provided by (used in) financing activities	51	15
Spectra Energy Capital, LLC
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	329	359
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in earnings of subsidiaries	(486)	(510)
Other	94	129
Net cash provided by (used in) operating activities	(63)	(22)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in short-term borrowings and commercial paper	85	(51)
Distributions and advances from (to) affiliates	(22)	79
Net cash provided by (used in) financing activities	63	28
Net increase (decrease) in cash and cash equivalents		6
Cash and cash equivalents at beginning of period	2
Cash and cash equivalents at end of period	2	6
Non-Guarantor Subsidiaries
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	514	535
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	187	178
Equity in earnings of unconsolidated affiliates	(118)	(106)
Distributions received from unconsolidated affiliates	114	104
Other	(37)	48
Net cash provided by (used in) operating activities	660	759
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(343)	(329)
Investments in and loans to unconsolidated affiliates		(4)
Acquisitions	(30)
Purchases of held-to-maturity securities	(861)	(214)
Proceeds from sales and maturities of held-to-maturity securities	734	186
Purchases of available-for-sale securities		(548)
Proceeds from sales and maturities of available-for-sale securities	14	576
Distributions received from unconsolidated affiliates	5
Other changes in restricted funds	79	(10)
Other		11
Net cash used in investing activities	(402)	(332)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments for the redemption of long-term debt		(36)
Net increase (decrease) in short-term borrowings and commercial paper	(111)	(131)
Net increase (decrease) in revolving credit facilities borrowings		13
Distributions to noncontrolling interests	(27)	(23)
Distributions and advances from (to) affiliates	(191)	(247)
Other	1	(1)
Net cash provided by (used in) financing activities	(328)	(425)
Effect of exchange rate changes on cash	1	2
Net increase (decrease) in cash and cash equivalents	(69)	4
Cash and cash equivalents at beginning of period	172	130
Cash and cash equivalents at end of period	103	134
Elimination
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	(815)	(869)
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in earnings of subsidiaries	$ 815	$ 869

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Employee Benefit Plans - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Maximum
Defined Benefit Plan Disclosure [Line Items]
Percentage of employer matching contribution to the before-tax employee contributions	100.00%
U.S. Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Contribution to retirement plans	$ 6	$ 5
Anticipated contributions to the defined benefit plans in 2012	25
Canada Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Contribution to retirement plans	17	17
Anticipated contributions to the defined benefit plans in 2012	105
U.S. Other Post-Retirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Expensed pre-tax employer matching contributions	4	4
U.S. Other Post-Retirement Benefits | Maximum
Defined Benefit Plan Disclosure [Line Items]
Percentage of employer contribution to eligible pay per pay period	6.00%
Canadian Other Post-Retirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Expensed pre-tax employer matching contributions	$ 3	$ 3
Canadian Other Post-Retirement Benefits | Maximum
Defined Benefit Plan Disclosure [Line Items]
Percentage of employer contribution to eligible pay per pay period	5.00%

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Summary Financial Information for DCP Midstream Presented at 100 Percent (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012		Mar. 31, 2011
Related Party Transaction [Line Items]
Operating revenues	$ 1,544	[1]	$ 1,612	[1]
Operating expenses	1,026		1,059
Operating income (loss)	519		557
Net income	361		382
Net income attributable to members' interests	333		357
DCP Midstream, LLC
Related Party Transaction [Line Items]
Operating revenues	2,902		2,929
Operating expenses	2,694		2,755
Operating income (loss)	208		174
Net income	155		125
Net income attributable to members' interests	$ 144		$ 133

[1] Excludes amounts associated with entities included in discontinued operations.

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Business Segments

3 Months Ended

Mar. 31, 2012

Business Segments

2. Business Segments

We manage our business in four reportable segments: U.S. Transmission, Distribution, Western Canada Transmission & Processing and Field Services. The remainder of our business operations is presented as “Other,” and consists of unallocated corporate costs, 100%-owned captive insurance subsidiaries, employee benefit plan assets and liabilities, and other miscellaneous activities.

Our chief operating decision maker regularly reviews financial information about each of these segments in deciding how to allocate resources and evaluate performance. There is no aggregation of segments within our reportable business segments.

U.S. Transmission provides transportation and storage of natural gas for customers in various regions of the northeastern and southeastern United States and the Maritime Provinces in Canada. The natural gas transmission and storage operations in the U.S. are primarily subject to the rules and regulations of the Federal Energy Regulatory Commission (FERC). Spectra Energy Partners, LP (Spectra Energy Partners), a master limited partnership, is part of the U.S. Transmission segment.

Distribution provides retail natural gas distribution service in Ontario, Canada, as well as natural gas transportation and storage services to other utilities and energy market participants. These services are provided by Union Gas Limited (Union Gas), and are primarily subject to the rules and regulations of the Ontario Energy Board (OEB).

Western Canada Transmission & Processing provides transportation of natural gas, natural gas gathering and processing services, and natural gas liquids (NGLs) extraction, fractionation, transportation, storage and marketing to customers in western Canada and the northern tier of the United States. This segment conducts business mostly through BC Pipeline, BC Field Services, and the NGL marketing and Canadian Midstream businesses. BC Pipeline and BC Field Services operations are primarily subject to the rules and regulations of Canada’s National Energy Board (NEB).

Field Services gathers, processes, treats, compresses, transports and stores natural gas. In addition, this segment also fractionates, transports, gathers, treats, processes, stores, markets and trades NGLs. It conducts operations through DCP Midstream, which is owned 50% by us and 50% by Phillips 66. DCP Midstream gathers raw natural gas through gathering systems located in nine major conventional and non-conventional natural gas producing regions: Mid-Continent, Rocky Mountain, East Texas-North Louisiana, Barnett Shale, Gulf Coast, South Texas, Central Texas, Antrim Shale and Permian Basin. DCP Midstream has a 27% ownership interest in DCP Midstream Partners, LP (DCP Partners), a master limited partnership.

During the third quarter of 2011, ConocoPhillips announced plans to separate its business into two stand-alone publicly traded companies. ConocoPhillips’ 50% ownership interest in DCP Midstream was transferred to the new downstream company, Phillips 66, on May 1, 2012. DCP Midstream does not anticipate that the change in ownership will have a material impact on its operations.

Our reportable segments offer different products and services and are managed separately as business units. Management evaluates segment performance based on earnings before interest and taxes (EBIT), which represents earnings from continuing operations (both operating and non-operating) before interest and taxes, net of noncontrolling interests related to those earnings. Cash, cash equivalents and short-term investments are managed centrally, so the associated realized and unrealized gains and losses from foreign currency transactions and interest and dividend income on those balances are excluded from the segments’ EBIT. Transactions between reportable segments are accounted for on the same basis as transactions with unaffiliated third parties.

Business Segment Data

	Unaffiliated Revenues		Intersegment Revenues			Total Operating Revenues (a)			Segment EBIT/ Consolidated Earnings from Continuing Operations before Income Taxes (a)
			(in millions)
Three Months Ended March 31, 2012
U.S. Transmission	$	493	$	2		$	495		$	271
Distribution		597		—			597			151
Western Canada Transmission & Processing		453		13			466			138
Field Services		—		—			—			93
Total reportable segments		1,543		15			1,558			653
Other		1		20			21			(29	)
Eliminations		—		(35	)		(35	)		—
Interest expense		—		—			—			157
Interest income and other (b)		—		—			—			29
Total consolidated	$	1,544	$	—		$	1,544		$	496
Three Months Ended March 31, 2011
U.S. Transmission	$	481	$	2		$	483		$	279
Distribution		696		—			696			167
Western Canada Transmission & Processing		433		6			439			141
Field Services		—		—			—			81
Total reportable segments		1,610		8			1,618			668
Other		2		15			17			(24	)
Eliminations		—		(23	)		(23	)		—
Interest expense		—		—			—			155
Interest income and other (b)		—		—			—			25
Total consolidated	$	1,612	$	—		$	1,612		$	514

(a) Excludes amounts associated with entities included in discontinued operations.

(b) Includes foreign currency transaction gains and losses and the add-back of noncontrolling interests related to segment EBIT.

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Qualified and Non Qualified Pension Plans Components of Net Periodic Pension Cost (Detail) (Qualified Pension Plans, USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
U.S. Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Service cost benefit earned	$ 3	$ 3
Interest cost on projected benefit obligation	6	6
Expected return on plan assets	(8)	(8)
Amortization of loss	4	3
Net Periodic Cost	5	4
Canada Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Service cost benefit earned	7	5
Interest cost on projected benefit obligation	13	14
Expected return on plan assets	(15)	(12)
Amortization of loss	9	6
Net Periodic Cost	$ 14	$ 13

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Earnings Per Common Share - Additional Information (Detail) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2011
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Certain other options and stock awards not included in the calculation of diluted EPS, approximately	5

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Inventory (Tables)

3 Months Ended

Mar. 31, 2012

Components of Inventory

The components of inventory are as follows:

	March 31, 2012		December 31, 2011
	(in millions)
Natural gas	$	137	$	263
NGLs		46		58
Materials and supplies		75		72
Total inventory	$	258	$	393

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Earnings per Common Share (Tables)

3 Months Ended

Mar. 31, 2012

Basic and Diluted EPS Calculations

The following table presents our basic and diluted EPS calculations:

	Three Months Ended March 31,
	2012		2011
	(in millions, except per-share amounts)
Income from continuing operations, net of tax—controlling interests	$	331	$	350
Income from discontinued operations, net of tax—controlling interests		2		7
Net income—controlling interests	$	333	$	357
Weighted-average common shares, outstanding
Basic		652		649
Diluted		655		651
Basic and diluted earnings per common share (a)
Continuing operations	$	0.51	$	0.54
Discontinued operations, net of tax		—		0.01
Total basic and diluted earnings per common share	$	0.51	$	0.55

(a) Quarterly earnings-per-share amounts are stand-alone calculations and may not be additive to full-year amounts due to rounding.

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Changes in Level 3 Assets and Liabilities that are Measured at Fair Value on Recurring Basis using Significant Unobservable Inputs (Detail) (Long-term derivative assets (liabilities), USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Long-term derivative assets (liabilities)
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value, beginning of period	$ (14)	$ (6)
Total realized/unrealized gains (losses):
Included in earnings	1	(1)
Included in other comprehensive income	(2)	1
Fair value, end of period	(15)	(6)
Total gains for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets/liabilities held at the end of the period	$ 1	$ 3

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Basic and Diluted Eps Calculations (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012		Mar. 31, 2011
Earnings Per Share Disclosure [Line Items]
Income from continuing operations, net of tax-controlling interests	$ 331		$ 350
Income from discontinued operations, net of tax-controlling interests	2		7
Net income-controlling interests	$ 333		$ 357
Weighted-average common shares, outstanding
Basic	652		649
Diluted	655		651
Basic and diluted earnings per common share
Continuing operations	$ 0.51	[1]	$ 0.54	[1]
Discontinued operations, net of tax			$ 0.01	[1]
Total basic and diluted earnings per common share	$ 0.51	[1]	$ 0.55	[1]

[1] Quarterly earnings-per-share amounts are stand-alone calculations and may not be additive to full-year amounts due to rounding.

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Investments in and Loans to Unconsolidated Affiliates (Tables)

3 Months Ended

Mar. 31, 2012

Summary Financial Information for DCP Midstream Presented at 100 Percent

The following represents summary financial information for DCP Midstream, presented at 100%:

	Three Months Ended March 31,
	2012		2011
	(in millions)
Operating revenues	$	2,902	$	2,929
Operating expenses		2,694		2,755
Operating income		208		174
Net income		155		125
Net income attributable to members’ interests		144		133

Sales of Propane to Affiliates of DCP Midstream

Sales of propane to affiliates of DCP Midstream are as follows:

	Three Months Ended March 31,
	2012		2011
	(in millions)
Sales of propane	$	57	$	84

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Marketable Securities and Restricted Funds (Tables)

3 Months Ended

Mar. 31, 2012

Estimated Fair Values of Available for Sale Securities

Estimated fair values of AFS securities follow:

	Estimated Fair Value
	March 31, 2012		December 31, 2011
	(in millions)
Corporate debt securities	$	18	$	18
Canadian government securities		—		14
Money market funds		3		3
Total available-for-sale investments	$	21	$	35

Estimated Fair Values of Held to Maturity Securities

Estimated fair values of HTM securities follow:

	Estimated Fair Value
	March 31, 2012		December 31, 2011
	(in millions)
Canadian government securities	$	143	$	107
Bankers acceptance notes		151		55
Total held-to-maturity investments	$	294	$	162

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General

3 Months Ended

Mar. 31, 2012

General

1. General

The terms “we,” “our,” “us” and “Spectra Energy” as used in this report refer collectively to Spectra Energy Corp and its subsidiaries unless the context suggests otherwise. These terms are used for convenience only and are not intended as a precise description of any separate legal entity within Spectra Energy.

Nature of Operations. Spectra Energy Corp, through its subsidiaries and equity affiliates, owns and operates a large and diversified portfolio of complementary natural gas-related energy assets, operating in three key areas of the natural gas industry: gathering and processing, transmission and storage, and distribution. We provide transportation and storage of natural gas to customers in various regions of the northeastern and southeastern United States, the Maritime Provinces in Canada and the Pacific Northwest in the United States and Canada, and in the province of Ontario, Canada. We also provide natural gas sales and distribution services to retail customers in Ontario, and natural gas gathering and processing services to customers in western Canada. In addition, we own a 50% interest in DCP Midstream, LLC (DCP Midstream), one of the largest natural gas gatherers and processors in the United States.

Basis of Presentation. The accompanying Condensed Consolidated Financial Statements include our accounts and the accounts of our majority-owned subsidiaries. These interim financial statements should be read in conjunction with the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2011, and reflect all normal recurring adjustments that are, in our opinion, necessary to fairly present our results of operations and financial position. Amounts reported in the Condensed Consolidated Statements of Operations are not necessarily indicative of amounts expected for the respective annual periods due to the effects of seasonal temperature variations on energy consumption, primarily in our gas distribution operations, as well as changing commodity prices on certain of our processing operations and other factors.

During the third quarter of 2011, we identified errors in our previously issued Condensed Consolidated Statements of Cash Flows related to the accounting for rollovers of outstanding borrowings under our revolving bank credit facilities. These rollovers, which are extensions of borrowings beyond their scheduled due dates that did not involve the exchange of cash, were previously accounted for as cash activities and resulted in the overstatement of both Proceeds from the Issuance of Long-Term Debt and Payments for the Redemption of Long-Term Debt for the three months ended March 31, 2011. Cash and Cash Equivalents and Net Cash Used In Financing Activities as previously reported are not affected by the errors. We evaluated materiality from both a qualitative and a quantitative perspective and concluded that the errors are immaterial to our previously issued Condensed Consolidated Statements of Cash Flows.

In addition to making this correction, effective the third quarter of 2011, we elected to present cash borrowings and repayments under our revolving bank credit facilities on a net basis for all periods presented as Net Increase in Revolving Credit Facilities Borrowings. As these periodic borrowings and repayments are generally of significant amounts and had terms of 90 days or less, we believe our current presentation provides users with more meaningful and relevant information about our long-term debt financing activities.

The correction and change in presentation reflected on the Condensed Consolidated Statement of Cash Flows are as follows:

	Proceeds From the Issuance of Long-Term Debt			Payments For the Redemption of Long-Term Debt
	(in millions)
Three Months Ended March 31, 2011
As previously reported	$	919		$	(942	)
Less non-cash activity		(896	)		896
As corrected		23			(46	)
Less revolving credit facility activity		(23	)		10
Long-term debt activity	$	—		$	(36	)

Use of Estimates. To conform with generally accepted accounting principles (GAAP) in the United States, we make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and Notes to Condensed Consolidated Financial Statements. Although these estimates are based on our best available knowledge at the time, actual results could differ.

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Debt and Credit Facilities (Tables)

3 Months Ended

Mar. 31, 2012

Available Credit Facilities and Restrictive Debt Covenants

Available Credit Facilities and Restrictive Debt Covenants

	Expiration Date	Total Credit Facilities Capacity		Outstanding at March 31, 2012						Available Credit Facilities Capacity
				Commercial Paper		Letters of Credit		Total
		(in millions)
Spectra Energy Capital, LLC (a)
Multi-year syndicated	2016	$	1,500	$	836	$	6	$	842	$	658
Westcoast Energy Inc. (b)
Multi-year syndicated	2016		300		—		—		—		300
Union Gas (c)
Multi-year syndicated	2016		401		155		—		155		246
Spectra Energy Partners (d)
Multi-year syndicated	2016		700		40		—		40		660
Total		$	2,901	$	1,031	$	6	$	1,037	$	1,864

(a) Credit facility contains a covenant requiring our consolidated debt-to-total capitalization ratio, as defined in the agreement, to not exceed 65%. This ratio was 58% at March 31, 2012.

(b) U.S. dollar equivalent at March 31, 2012. The credit facility is 300 million Canadian dollars and contains a covenant that requires the Westcoast non-consolidated debt-to-total capitalization ratio to not exceed 75%. The ratio was 45% at March 31, 2012.

(c) U.S. dollar equivalent at March 31, 2012. The credit facility is 400 million Canadian dollars and contains a covenant that requires the Union Gas debt-to-total capitalization ratio to not exceed 75% and a provision which requires Union Gas to repay all borrowings under the facility for a period of two days during the second quarter of each year. The ratio was 66% at March 31, 2012.

(d) Credit facility contains a covenant that requires Spectra Energy Partners to maintain a ratio of total Debt-to-Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), as defined in the credit agreement, of 5.0 of less. As of March 31, 2012, this ratio was 2.7. Adjusted EBITDA is a non-GAAP measure. Because Adjusted EBITDA excludes some, but not all, items that affect net income and is defined differently by companies in our industry, Spectra Energy Partners’ definition of Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Adjusted EBITDA should not be considered an alternative to net income, operating income, cash from operations or any other measure of financial performance or liquidity presented in accordance with GAAP.

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Regulatory Matters - Additional Information (Detail) (Union Gas Limited)	3 Months Ended
	Mar. 31, 2012
Union Gas Limited
Public Utilities, Inventory [Line Items]
Distribution rates effective date	Jan. 01, 2013

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Available Credit Facilities and Restrictive Debt Covenants (Parenthetical) (Detail) In Millions, unless otherwise specified	Mar. 31, 2012 USD ($)	Mar. 31, 2012 Spectra Energy Capital, LLC Covenant Requirement	Mar. 31, 2012 Union Gas Limited Covenant Requirement CAD	Mar. 31, 2012 Westcoast Energy Inc. Covenant Requirement CAD	Mar. 31, 2012 Spectra Energy Partners, LP Covenant Requirement
Line of Credit Facility [Line Items]
Debt-to-total capitalization ratio Maximum		65.00%	75.00%	75.00%
Debt-to-total capitalization ratio		58.00%	66.00%	45.00%
Total Credit Facilities Capacity	$ 2,901		400	300
Debt-to-Adjusted EBITDA ratio maximum					5.0
Debt-to-Adjusted EBITDA ratio					2.7

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012		Mar. 31, 2011
Operating Revenues
Transportation, storage and processing of natural gas	$ 831		$ 791
Distribution of natural gas	505		607
Sales of natural gas liquids	149		177
Other	59		37
Total operating revenues	1,544	[1]	1,612	[1]
Operating Expenses
Natural gas and petroleum products purchased	433		485
Operating, maintenance and other	321		314
Depreciation and amortization	184		175
Property and other taxes	88		85
Total operating expenses	1,026		1,059
Gains on Sales of Other Assets and Other, net	1		4
Operating income (loss)	519		557
Other Income and Expenses
Equity in earnings of unconsolidated affiliates	118		106
Other income and expenses, net	16		6
Total other income and expenses	134		112
Interest expense	157	[1]	155	[1]
Earnings from continuing operations before income taxes	496	[1]	514	[1]
Income Tax Expense From Continuing Operations	137		139
Income From Continuing Operations	359		375
Income From Discontinued Operations, net of tax	2		7
Net Income	361		382
Net income-noncontrolling interests	28		25
Net income-controlling interests	$ 333		$ 357
Weighted-average shares outstanding
Basic	652		649
Diluted	655		651
Earnings per share from continuing operations
Basic and Diluted	$ 0.51	[2]	$ 0.54	[2]
Earnings per share
Basic and Diluted	$ 0.51	[2]	$ 0.55	[2]
Dividends per share	$ 0.28		$ 0.26

[1] Excludes amounts associated with entities included in discontinued operations.

[2] Quarterly earnings-per-share amounts are stand-alone calculations and may not be additive to full-year amounts due to rounding.

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Components of Inventory (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Schedule of Inventory [Line Items]
Natural gas	$ 137	$ 263
NGLs	46	58
Materials and supplies	75	72
Total inventory	$ 258	$ 393

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 361	$ 382
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	187	178
Deferred income tax expense	74	109
Equity in earnings of unconsolidated affiliates	(118)	(106)
Distributions received from unconsolidated affiliates	114	104
Other	(72)	55
Net cash provided by (used in) operating activities	546	722
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(343)	(329)
Investments in and loans to unconsolidated affiliates		(4)
Acquisitions	(30)
Purchases of held-to-maturity securities	(861)	(214)
Proceeds from sales and maturities of held-to-maturity securities	734	186
Purchases of available-for-sale securities		(548)
Proceeds from sales and maturities of available-for-sale securities	14	576
Distributions received from unconsolidated affiliates	5
Other changes in restricted funds	79	(10)
Other		11
Net cash used in investing activities	(402)	(332)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments for the redemption of long-term debt		(36)
Net decrease in short-term borrowings and commercial paper	(26)	(182)
Net increase in revolving credit facilities borrowings		13
Distributions to noncontrolling interests	(27)	(23)
Dividends paid on common stock	(185)	(170)
Other	24	16
Net cash provided by (used in) financing activities	(214)	(382)
Effect of exchange rate changes on cash	1	2
Net increase (decrease) in cash and cash equivalents	(69)	10
Cash and cash equivalents at beginning of period	174	130
Cash and cash equivalents at end of period	105	140
Supplemental Disclosures
Property, plant and equipment noncash accruals	$ 157	$ 112

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Commitments and Contingencies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Commitments and Contingencies Disclosure [Line Items]
Accruals related to extended environmental-related activities included in Deferred Credits and Other Liabilities-Regulatory and Other on the Condensed Consolidated Balance Sheet	$ 15	$ 16

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Consolidating Financial Information (Tables)

3 Months Ended

Mar. 31, 2012

Condensed Consolidating Statement of Operations

Spectra Energy Corp

Condensed Consolidating Statement of Operations

Three Months Ended March 31, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total operating revenues	$	—		$	—	$	1,545	$	(1	)	$	1,544
Total operating expenses		2			—		1,025		(1	)		1,026
Gains on sales of other assets and other, net		—			—		1		—			1
Operating income (loss)		(2	)		—		521		—			519
Equity in earnings of unconsolidated affiliates		—			—		118		—			118
Equity in earnings of subsidiaries		329			486		—		(815	)		—
Other income and expenses, net		(1	)		—		17		—			16
Interest expense		—			48		109		—			157
Earnings from continuing operations before income taxes		326			438		547		(815	)		496
Income tax expense (benefit) from continuing operations		(7	)		109		35		—			137
Income from continuing operations		333			329		512		(815	)		359
Income from discontinued operations, net of tax		—			—		2		—			2
Net income		333			329		514		(815	)		361
Net income—noncontrolling interests		—			—		28		—			28
Net income—controlling interests	$	333		$	329	$	486	$	(815	)	$	333

Spectra Energy Corp

Condensed Consolidating Statement of Operations

Three Months Ended March 31, 2011

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total operating revenues	$	—		$	—	$	1,612	$	—		$	1,612
Total operating expenses		3			—		1,056		—			1,059
Gains on sales of other assets and other, net		—			—		4		—			4
Operating income (loss)		(3	)		—		560		—			557
Equity in earnings of unconsolidated affiliates		—			—		106		—			106
Equity in earnings of subsidiaries		359			510		—		(869	)		—
Other income and expenses, net		—			—		6		—			6
Interest expense		—			48		107		—			155
Earnings from continuing operations before income taxes		356			462		565		(869	)		514
Income tax expense (benefit) from continuing operations		(1	)		103		37		—			139
Income from continuing operations		357			359		528		(869	)		375
Income from discontinued operations, net of tax		—			—		7		—			7
Net income		357			359		535		(869	)		382
Net income—noncontrolling interests		—			—		25		—			25
Net income—controlling interests	$	357		$	359	$	510	$	(869	)	$	357

Condensed Consolidating Statement of Comprehensive Income

Spectra Energy Corp

Condensed Consolidating Statement of Comprehensive Income

Three Months Ended March 31, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp		Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income	$	333	$	329	$	514	$	(815	)	$	361
Other comprehensive income
Foreign currency translation adjustments		—		—		162		—			162
Reclassification of cash flow hedges into earnings		—		1		1		—			2
Pension and benefits impact		4		—		1		—			5
Total Comprehensive income, net of tax		337		330		678		(815	)		530
Less: Comprehensive income—noncontrolling interests		—		—		30		—			30
Comprehensive income—controlling interests	$	337	$	330	$	648	$	(815	)	$	500

Spectra Energy Corp

Condensed Consolidating Statement of Comprehensive Income

Three Months Ended March 31, 2011

(Unaudited)

(In millions)

	Spectra Energy Corp		Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income	$	357	$	359	$	535	$	(869	)	$	382
Other comprehensive income
Foreign currency translation adjustments		—		—		191		—			191
Unrealized mark-to-market net gain		—		—		1		—			1
Reclassification of cash flow hedges into earnings		—		—		3		—			3
Pension and benefits impact		2		—		6		—			8
Other		—		—		8		—			8
Total Comprehensive income, net of tax		359		359		744		(869	)		593
Less: Comprehensive income—noncontrolling interests		—		—		28		—			28
Comprehensive income—controlling interests	$	359	$	359	$	716	$	(869	)	$	565

Condensed Consolidating Balance Sheet

Spectra Energy Corp

Condensed Consolidating Balance Sheet

March 31, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Cash and cash equivalents	$	—		$	2		$	103	$	—		$	105
Receivables (payables)—consolidated subsidiaries		17			(21	)		4		—			—
Receivables—other		2			2			812		—			816
Other current assets		35			12			469		—			516
Total current assets		54			(5	)		1,388		—			1,437
Investments in and loans to unconsolidated affiliates		—			71			2,019		—			2,090
Investments in consolidated subsidiaries		12,242			15,475			—		(27,717	)		—
Advances receivable (payable)—consolidated subsidiaries		(3,742	)		4,238			94		(590	)		—
Goodwill		—			—			4,492		—			4,492
Other assets		36			84			399		—			519
Property, plant and equipment, net		—			—			18,678		—			18,678
Regulatory assets and deferred debits		1			15			1,127		—			1,143
Total Assets	$	8,591		$	19,878		$	28,197	$	(28,307	)	$	28,359
Accounts payable—other	$	7		$	80		$	321	$	—		$	408
Short-term borrowings and commercial paper		—			1,426			195		(590	)		1,031
Accrued taxes payable (receivable)		(29	)		27			89		—			87
Current maturities of long-term debt		—			495			526		—			1,021
Other current liabilities		40			61			621		—			722
Total current liabilities		18			2,089			1,752		(590	)		3,269
Long-term debt		—			2,804			6,945		—			9,749
Deferred credits and other liabilities		185			2,743			2,931		—			5,859
Preferred stock of subsidiaries		—			—			258		—			258
Equity
Controlling interests		8,388			12,242			15,475		(27,717	)		8,388
Noncontrolling interests		—			—			836		—			836
Total equity		8,388			12,242			16,311		(27,717	)		9,224
Total Liabilities and Equity	$	8,591		$	19,878		$	28,197	$	(28,307	)	$	28,359

Spectra Energy Corp

Condensed Consolidating Balance Sheet

December 31, 2011

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Cash and cash equivalents	$	—		$	2		$	172	$	—		$	174
Receivables (payables)—consolidated subsidiaries		—			(1	)		1		—			—
Receivables—other		—			—			962		—			962
Other current assets		57			5			566		—			628
Total current assets		57			6			1,701		—			1,764
Investments in and loans to unconsolidated affiliates		—			70			1,994		—			2,064
Investments in consolidated subsidiaries		11,720			14,884			—		(26,604	)		—
Advances receivable (payable)—consolidated subsidiaries		(3,534	)		4,116			10		(592	)		—
Goodwill		—			—			4,420		—			4,420
Other assets		42			105			383		—			530
Property, plant and equipment, net		—			—			18,258		—			18,258
Regulatory assets and deferred debits		1			15			1,086		—			1,102
Total Assets	$	8,286		$	19,196		$	27,852	$	(27,196	)	$	28,138
Accounts payable—other	$	3		$	62		$	433	$	—		$	498
Short-term borrowings and commercial paper		—			1,343			301		(592	)		1,052
Accrued taxes payable (receivable)		(46	)		2			126		—			82
Current maturities of long-term debt		—			—			525		—			525
Other current liabilities		76			75			793		—			944
Total current liabilities		33			1,482			2,178		(592	)		3,101
Long-term debt		—			3,311			6,835		—			10,146
Deferred credits and other liabilities		188			2,683			2,866		—			5,737
Preferred stock of subsidiaries		—			—			258		—			258
Equity
Controlling interests		8,065			11,720			14,884		(26,604	)		8,065
Noncontrolling interests		—			—			831		—			831
Total equity		8,065			11,720			15,715		(26,604	)		8,896
Total Liabilities and Equity	$	8,286		$	19,196		$	27,852	$	(27,196	)	$	28,138

Condensed Consolidating Statement of Cash Flows

Spectra Energy Corp

Condensed Consolidating Statements of Cash Flows

Three Months Ended March 31, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	333		$	329		$	514		$	(815	)	$	361
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		—			—			187			—			187
Equity in earnings of unconsolidated affiliates		—			—			(118	)		—			(118	)
Equity in earnings of subsidiaries		(329	)		(486	)		—			815			—
Distributions received from unconsolidated affiliates		—			—			114			—			114
Other		(55	)		94			(37	)		—			2
Net cash provided by (used in) operating activities		(51	)		(63	)		660			—			546
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		—			—			(343	)		—			(343	)
Acquisitions		—			—			(30	)		—			(30	)
Purchases of held-to-maturity securities		—			—			(861	)		—			(861	)
Proceeds from sales and maturities of held-to-maturity securities		—			—			734			—			734
Proceeds from sales and maturities of available-for-sale securities		—			—			14			—			14
Distributions received from unconsolidated affiliates		—			—			5			—			5
Other changes in restricted funds		—			—			79			—			79
Net cash used in investing activities		—			—			(402	)		—			(402	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in short-term borrowings and commercial paper		—			85			(111	)		—			(26	)
Distributions to noncontrolling interests		—			—			(27	)		—			(27	)
Dividends paid on common stock		(185	)		—			—			—			(185	)
Distributions and advances from (to) affiliates		213			(22	)		(191	)		—			—
Other		23			—			1			—			24
Net cash provided by (used in) financing activities		51			63			(328	)		—			(214	)
Effect of exchange rate changes on cash		—			—			1			—			1
Net decrease in cash and cash equivalents		—			—			(69	)		—			(69	)
Cash and cash equivalents at beginning of period		—			2			172			—			174
Cash and cash equivalents at end of period	$	—		$	2		$	103		$	—		$	105

Spectra Energy Corp

Condensed Consolidating Statements of Cash Flows

Three Months Ended March 31, 2011

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	357		$	359		$	535		$	(869	)	$	382
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		—			—			178			—			178
Equity in earnings of unconsolidated affiliates		—			—			(106	)		—			(106	)
Equity in earnings of subsidiaries		(359	)		(510	)		—			869			—
Distributions received from unconsolidated affiliates		—			—			104			—			104
Other		(13	)		129			48			—			164
Net cash provided by (used in) operating activities		(15	)		(22	)		759			—			722
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		—			—			(329	)		—			(329	)
Investments in and loans to unconsolidated affiliates		—			—			(4	)		—			(4	)
Purchases of held-to-maturity securities		—			—			(214	)		—			(214	)
Proceeds from sales and maturities of held-to-maturity securities		—			—			186			—			186
Purchases of available-for-sale securities		—			—			(548	)		—			(548	)
Proceeds from sales and maturities of available-for-sale securities		—			—			576			—			576
Other changes in restricted funds		—			—			(10	)		—			(10	)
Other		—			—			11			—			11
Net cash used in investing activities		—			—			(332	)		—			(332	)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments for the redemption of long-term debt		—			—			(36	)		—			(36	)
Net decrease in short-term borrowings and commercial paper		—			(51	)		(131	)		—			(182	)
Net increase in revolving credit facilities borrowings		—			—			13			—			13
Distributions to noncontrolling interests		—			—			(23	)		—			(23	)
Dividends paid on common stock		(170	)		—			—			—			(170	)
Distributions and advances from (to) affiliates		168			79			(247	)		—			—
Other		17			—			(1	)		—			16
Net cash provided by (used in) financing activities		15			28			(425	)		—			(382	)
Effect of exchange rate changes on cash		—			—			2			—			2
Net increase in cash and cash equivalents		—			6			4			—			10
Cash and cash equivalents at beginning of period		—			—			130			—			130
Cash and cash equivalents at end of period	$	—		$	6		$	134		$	—		$	140

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Condensed Consolidating Statement of Comprehensive Income (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Condensed Financial Statements, Captions [Line Items]
Net income	$ 361	$ 382
Other comprehensive income
Foreign currency translation adjustments	162	191
Unrealized mark-to-market net gain		1
Reclassification of cash flow hedges into earnings	2	3
Pension and benefits impact	5	8
Other		8
Total Comprehensive income, net of tax	530	593
Less: Comprehensive Income-Noncontrolling Interests	30	28
Comprehensive income-controlling interests	500	565
Spectra Energy Corp
Condensed Financial Statements, Captions [Line Items]
Net income	333	357
Other comprehensive income
Pension and benefits impact	4	2
Total Comprehensive income, net of tax	337	359
Comprehensive income-controlling interests	337	359
Spectra Energy Capital, LLC
Condensed Financial Statements, Captions [Line Items]
Net income	329	359
Other comprehensive income
Reclassification of cash flow hedges into earnings	1
Total Comprehensive income, net of tax	330	359
Comprehensive income-controlling interests	330	359
Non-Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Net income	514	535
Other comprehensive income
Foreign currency translation adjustments	162	191
Unrealized mark-to-market net gain		1
Reclassification of cash flow hedges into earnings	1	3
Pension and benefits impact	1	6
Other		8
Total Comprehensive income, net of tax	678	744
Less: Comprehensive Income-Noncontrolling Interests	30	28
Comprehensive income-controlling interests	648	716
Elimination
Condensed Financial Statements, Captions [Line Items]
Net income	(815)	(869)
Other comprehensive income
Total Comprehensive income, net of tax	(815)	(869)
Comprehensive income-controlling interests	$ (815)	$ (869)

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Employee Benefit Plans

3 Months Ended

Mar. 31, 2012

Employee Benefit Plans

15. Employee Benefit Plans

Retirement Plans. We have a qualified non-contributory defined benefit (DB) retirement plan for U.S. employees and non-qualified, non-contributory, unfunded defined benefit plans which cover certain current and former U.S. executives. Our Westcoast subsidiary maintains qualified and non-qualified, contributory and non-contributory, DB and defined contribution (DC) retirement plans covering substantially all employees of our Canadian operations.

Our policy is to fund our retirement plans, where applicable, on an actuarial basis to provide assets sufficient to meet benefits to be paid to plan participants or as required by legislation or plan terms. We made contributions of $6 million to our U.S. retirement plans in the three-month period ended March 31, 2012 and $5 million for the same period in 2011. We made total contributions to the Canadian DC and qualified DB plans of $17 million during both of the three-month periods ended March 31, 2012 and 2011. We anticipate that we will make total contributions of approximately $25 million to the U.S. plans and approximately $105 million to the Canadian plans in 2012.

Qualified and Non-Qualified Pension Plans—Components of Net Periodic Pension Cost

	Three Months Ended March 31,
	2012			2011
	(in millions)
U.S.
Service cost benefit earned	$	3		$	3
Interest cost on projected benefit obligation		6			6
Expected return on plan assets		(8	)		(8	)
Amortization of loss		4			3
Net periodic pension cost	$	5		$	4
Canada
Service cost benefit earned	$	7		$	5
Interest cost on projected benefit obligation		13			14
Expected return on plan assets		(15	)		(12	)
Amortization of loss		9			6
Net periodic pension cost	$	14		$	13

Other Post-Retirement Benefit Plans. We provide certain health care and life insurance benefits for retired employees on a contributory and non-contributory basis. Employees are eligible for these benefits if they have met age and service requirements at retirement, as defined in the plans.

Other Post-Retirement Benefit Plans—Components of Net Periodic Benefit Cost

	Three Months Ended March 31,
	2012			2011
	(in millions)
U.S.
Interest cost on accumulated post-retirement benefit obligation	$	3		$	3
Expected return on plan assets		(1	)		(1	)
Net periodic other post-retirement benefit cost	$	2		$	2
Canada
Service cost benefit earned	$	2		$	1
Interest cost on accumulated post-retirement benefit obligation		2			2
Net periodic other post-retirement benefit cost	$	4		$	3

Retirement/Savings Plan

We have employee savings plans available to both U.S. and Canadian employees. Employees may participate in a matching contribution formula where we provide a matching contribution up to 100% of before tax employee contributions, of up to 6% of eligible pay per pay period for U.S. employees and up to 5% of eligible pay per pay period for Canadian employees. We expensed pre-tax employer matching contributions of $4 million in both of the three months ended March 31, 2012 and 2011 for U.S employees, and $3 million in both of the three months ended March 31, 2012 and 2011 for Canadian employees.

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General - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2012
Maximum
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Revolving credit facility, terms	90 days
DCP Midstream, LLC
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Percentage of ownership	50.00%

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New Accounting Pronouncements

3 Months Ended

Mar. 31, 2012

New Accounting Pronouncements

17. New Accounting Pronouncements

There were no significant accounting pronouncements adopted during the three months ended March 31, 2012 that had a material impact on our consolidated results of operations, financial position or cash flows.

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CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (USD $) In Millions	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income Foreign Currency Translation Adjustments	Accumulated Other Comprehensive Income Other	Noncontrolling Interests
Beginning Balance at Dec. 31, 2010	$ 8,487	$ 1	$ 4,726	$ 1,487	$ 2,010	$ (415)	$ 678
Net income	382			357			25
Other comprehensive income	211				188	20	3
Dividends on common stock	(170)			(170)
Stock-based compensation	14		14
Distributions to noncontrolling interests	(23)						(23)
Ending Balance at Mar. 31, 2011	8,901	1	4,740	1,674	2,198	(395)	683
Beginning Balance at Dec. 31, 2011	8,896	1	4,814	1,977	1,832	(559)	831
Net income	361			333			28
Other comprehensive income	169				160	7	2
Dividends on common stock	(185)			(185)
Stock-based compensation	(1)		(1)
Distributions to noncontrolling interests	(25)						(25)
Spectra Energy common stock issued	9		9
Ending Balance at Mar. 31, 2012	$ 9,224	$ 1	$ 4,822	$ 2,125	$ 1,992	$ (552)	$ 836

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Net income	$ 361	$ 382
Other comprehensive income
Foreign currency translation adjustments	162	191
Unrealized mark-to-market net gain on hedges		1
Reclassification of cash flow hedges into earnings	2	3
Pension and benefits impact	5	8
Other		8
Total Comprehensive Income, net of tax	530	593
Less: Comprehensive Income-Noncontrolling Interests	30	28
Comprehensive Income-Controlling Interests	$ 500	$ 565

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Debt and Credit Facilities

3 Months Ended

Mar. 31, 2012

Debt and Credit Facilities

10. Debt and Credit Facilities

Available Credit Facilities and Restrictive Debt Covenants

	Expiration Date	Total Credit Facilities Capacity		Outstanding at March 31, 2012						Available Credit Facilities Capacity
				Commercial Paper		Letters of Credit		Total
		(in millions)
Spectra Energy Capital, LLC (a)
Multi-year syndicated	2016	$	1,500	$	836	$	6	$	842	$	658
Westcoast Energy Inc. (b)
Multi-year syndicated	2016		300		—		—		—		300
Union Gas (c)
Multi-year syndicated	2016		401		155		—		155		246
Spectra Energy Partners (d)
Multi-year syndicated	2016		700		40		—		40		660
Total		$	2,901	$	1,031	$	6	$	1,037	$	1,864

(a) Credit facility contains a covenant requiring our consolidated debt-to-total capitalization ratio, as defined in the agreement, to not exceed 65%. This ratio was 58% at March 31, 2012.

(b) U.S. dollar equivalent at March 31, 2012. The credit facility is 300 million Canadian dollars and contains a covenant that requires the Westcoast non-consolidated debt-to-total capitalization ratio to not exceed 75%. The ratio was 45% at March 31, 2012.

(c) U.S. dollar equivalent at March 31, 2012. The credit facility is 400 million Canadian dollars and contains a covenant that requires the Union Gas debt-to-total capitalization ratio to not exceed 75% and a provision which requires Union Gas to repay all borrowings under the facility for a period of two days during the second quarter of each year. The ratio was 66% at March 31, 2012.

(d) Credit facility contains a covenant that requires Spectra Energy Partners to maintain a ratio of total Debt-to-Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), as defined in the credit agreement, of 5.0 of less. As of March 31, 2012, this ratio was 2.7. Adjusted EBITDA is a non-GAAP measure. Because Adjusted EBITDA excludes some, but not all, items that affect net income and is defined differently by companies in our industry, Spectra Energy Partners’ definition of Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Adjusted EBITDA should not be considered an alternative to net income, operating income, cash from operations or any other measure of financial performance or liquidity presented in accordance with GAAP.

The issuances of commercial paper, letters of credit and revolving borrowings reduce the amounts available under the credit facilities. As of March 31, 2012, there were no revolving borrowings outstanding.

Our credit agreements contain various covenants, including the maintenance of certain financial ratios. Failure to meet those covenants beyond applicable grace periods could result in accelerated due dates and/or termination of the agreements. As of March 31, 2012, we were in compliance with those covenants. In addition, our credit agreements allow for acceleration of payments or termination of the agreements due to nonpayment, or in some cases, due to the acceleration of other significant indebtedness of the borrower or some of its subsidiaries. Our debt and credit agreements do not contain provisions that trigger an acceleration of indebtedness based solely on the occurrence of a material adverse change in our financial condition or results of operations.

As noted above, the terms of our Spectra Energy Capital, LLC (Spectra Capital) credit agreement require our consolidated debt-to-total capitalization ratio, as defined in the agreement, to be 65% or lower. Per the terms of the new agreement, collateralized debt and Spectra Energy Partners’ debt and equity are excluded in the calculation of the ratio. This ratio was 58% at March 31, 2012.

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Document and Entity Information	3 Months Ended
	Mar. 31, 2012
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
Trading Symbol	SE
Entity Registrant Name	SPECTRA ENERGY CORP.
Entity Central Index Key	0001373835
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	652,738,453

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Fair Value Measurements

3 Months Ended

Mar. 31, 2012

Fair Value Measurements

11. Fair Value Measurements

The following table presents, for each of the fair value hierarchy levels, assets and liabilities that are measured and recorded at fair value on a recurring basis:

Description	Condensed Consolidated Balance Sheet Caption	March 31, 2012
		Total		Level 1		Level 2		Level 3
		(in millions)
Corporate debt securities	Cash and cash equivalents	$	61	$	—	$	61	$	—
Corporate debt securities	Current assets—other		12		—		12		—
Derivative assets—interest rate swaps	Current assets—other		10		—		10		—
Corporate debt securities	Investments and other assets—other		6		—		6		—
Derivative assets—interest rate swaps	Investments and other assets—other		45		—		45		—
Money market funds	Investments and other assets—other		3		3		—		—
Total Assets		$	137	$	3	$	134	$	—
Derivative liabilities—natural gas purchase contracts	Current liabilities— other	$	1	$	—	$	—	$	1
Derivative liabilities—natural gas purchase contracts	Deferred credits and other liabilities—regulatory and other		14		—		—		14
Derivative liabilities—interest rate swaps	Deferred credits and other liabilities—regulatory and other		16		—		16		—
Total Liabilities		$	31	$	—	$	16	$	15
Description	Condensed Consolidated Balance Sheet Caption	December 31, 2011
		Total		Level 1		Level 2		Level 3
		(in millions)
Corporate debt securities	Cash and cash equivalents	$	49	$	—	$	49	$	—
Canadian government securities	Current assets—other		14		14		—		—
Corporate debt securities	Current assets—other		2		—		2		—
Corporate debt securities	Investments and other assets—other		16		—		16		—
Derivative assets—interest rate swaps	Investments and other assets—other		66		—		66		—
Money market funds	Investments and other assets—other		3		3		—		—
Total Assets		$	150	$	17	$	133	$	—
Derivative liabilities—natural gas purchase contracts	Current liabilities—other	$	1	$	—	$	—	$	1
Derivative liabilities—natural gas purchase contracts	Deferred credits and other liabilities—regulatory and other		13		—		—		13
Derivative liabilities—interest rate swaps	Deferred credits and other liabilities—regulatory and other		16		—		16		—
Total Liabilities		$	30	$	—	$	16	$	14

The following table presents changes in Level 3 assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs:

	Three Months Ended March 31,
	2012			2011
	(in millions)
Long-term derivative assets (liabilities)
Fair value, beginning of period	$	(14	)	$	(6	)
Total realized/unrealized gains (losses):
Included in earnings		1			(1	)
Included in other comprehensive income		(2	)		1
Fair value, end of period	$	(15	)	$	(6	)
Total gains for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to assets/liabilities held at the end of the period	$	1		$	3

Level 1

Level 1 valuations represent quoted unadjusted prices for identical instruments in active markets.

Level 2 Valuation Techniques

Fair values of our financial instruments that are actively traded in the secondary market, including our long-term debt, are determined based on market-based prices. These valuations may include inputs such as quoted market prices of the exact or similar instruments, broker or dealer quotations, or alternative pricing sources that may include models or matrix pricing tools, with reasonable levels of price transparency.

For interest rate swaps, we utilize data obtained from a third-party source for the determination of fair value. Both the future cash flows for the fixed-leg and floating-leg of our swaps are discounted to present value. In addition, credit default swap rates are used to develop the adjustment for credit risk embedded in our positions. We believe that since some of the inputs and assumptions for the calculations of fair value are derived from observable market data, a Level 2 classification is appropriate.

Level 3 Valuation Techniques

We do not have significant amounts of assets or liabilities measured and reported using Level 3 valuation techniques, which include the use of pricing models, discounted cash flow methodologies or similar techniques where at least one significant model assumption or input is unobservable. Level 3 financial instruments also include those for which the determination of fair value requires significant management judgment or estimation.

Financial Instruments

The fair values of financial instruments that are recorded and carried at book value are summarized in the following table. Judgment is required in interpreting market data to develop the estimates of fair value. These estimates are not necessarily indicative of the amounts we could have realized in current markets.

	March 31, 2012				December 31, 2011
	Book Value		Approximate Fair Value		Book Value		Approximate Fair Value
	(in millions)
Note receivable, noncurrent (a)	$	71	$	71	$	71	$	71
Long-term debt, including current maturities (b)		10,709		12,470		10,600		12,398

(a) Included within Investments in and Loans to Unconsolidated Affiliates.

(b) Excludes unamortized items and a fair value hedge carrying value adjustment.

The fair values of our note receivable-noncurrent and long-term debt are determined based on market-based prices as described in the Level 2 valuation technique described above.

The fair values of cash and cash equivalents, restricted cash, short-term investments, accounts receivable, accounts payable, short-term borrowings and commercial paper are not materially different from their carrying amounts because of the short-term nature of these instruments or because the stated rates approximate market rates.

During the 2012 and 2011 periods, there were no material adjustments to assets and liabilities measured at fair value on a nonrecurring basis.

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Millions, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Current Assets
Cash and cash equivalents	$ 105	$ 174
Receivables, net	816	962
Inventory	258	393
Other	258	235
Total current assets	1,437	1,764
Investments and Other Assets
Investments in and loans to unconsolidated affiliates	2,090	2,064
Goodwill	4,492	4,420
Other	519	530
Total investments and other assets	7,101	7,014
Property, Plant and Equipment
Cost	24,575	23,932
Less accumulated depreciation and amortization	5,897	5,674
Net property, plant and equipment	18,678	18,258
Regulatory Assets and Deferred Debits	1,143	1,102
Total Assets	28,359	28,138
Current Liabilities
Accounts payable	408	498
Short-term borrowings and commercial paper	1,031	1,052
Taxes accrued	87	82
Interest accrued	165	178
Current maturities of long-term debt	1,021	525
Other	557	766
Total current liabilities	3,269	3,101
Long-term Debt	9,749	10,146
Deferred Credits and Other Liabilities
Deferred income taxes	4,062	3,940
Regulatory and other	1,797	1,797
Total deferred credits and other liabilities	5,859	5,737
Commitments and Contingencies
Preferred stock of subsidiaries	258	258
Equity
Preferred stock, $0.001 par, 22 million shares authorized, no shares outstanding
Common stock, $0.001 par, 1 billion shares authorized, 653 million and 651 million shares outstanding at March 31, 2012 and December 31, 2011, respectively	1	1
Additional paid-in capital	4,822	4,814
Retained earnings	2,125	1,977
Accumulated other comprehensive income	1,440	1,273
Total controlling interests	8,388	8,065
Noncontrolling interests	836	831
Total equity	9,224	8,896
Total Liabilities and Equity	$ 28,359	$ 28,138

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Discontinued Operations

3 Months Ended

Mar. 31, 2012

Discontinued Operations

5. Discontinued Operations

Discontinued operations is mostly comprised of the net effects of a settlement arrangement related to prior liquefied natural gas contracts. See Note 8 for further discussion.

The following table summarizes results classified as Income From Discontinued Operations, Net of Tax in the accompanying Condensed Consolidated Statements of Operations:

	Revenues		Pre-tax Earnings		Income Tax Expense		Income From Discontinued Operations, Net of Tax
	(in millions)
Three Months Ended March 31, 2012
Other	$	57	$	3	$	1	$	2
Total consolidated	$	57	$	3	$	1	$	2
Three Months Ended March 31, 2011
Other	$	84	$	10	$	3	$	7
Total consolidated	$	84	$	10	$	3	$	7

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Income Taxes

3 Months Ended

Mar. 31, 2012

Income Taxes

4. Income Taxes

Income tax expense from continuing operations for the three months ended March 31, 2012 was $137 million, compared to $139 million for the same period in 2011. The lower income tax expense resulted from lower earnings from continuing operations and a lower Canadian effective tax rate, substantially offset by favorable tax adjustments in the first quarter of 2011.

The effective tax rate for income from continuing operations for the three months ended March 31, 2012 was 28%, compared to 27% for the same period in 2011. The lower effective tax rate in the first quarter of 2011 was primarily due to favorable tax adjustments.

No material net change in uncertain tax benefits was recognized during the three months ended March 31, 2012. No material increases or decreases in uncertain tax benefits are expected to occur in the next 12 months.

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Consolidating Financial Information

3 Months Ended

Mar. 31, 2012

Consolidating Financial Information

16. Consolidating Financial Information

Spectra Energy Corp has agreed to fully and unconditionally guarantee the payment of principal and interest under all series of notes outstanding under the Senior Indenture of Spectra Capital, a 100%-owned, consolidated subsidiary. In accordance with Securities and Exchange Commission (SEC) rules, the following condensed consolidating financial information is presented. The information shown for Spectra Energy Corp and Spectra Capital is presented utilizing the equity method of accounting for investments in subsidiaries, as required. The non-guarantor subsidiaries column represents all consolidated subsidiaries of Spectra Capital. This information should be read in conjunction with our accompanying Condensed Consolidated Financial Statements and notes thereto.

Spectra Energy Corp

Condensed Consolidating Statement of Operations

Three Months Ended March 31, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total operating revenues	$	—		$	—	$	1,545	$	(1	)	$	1,544
Total operating expenses		2			—		1,025		(1	)		1,026
Gains on sales of other assets and other, net		—			—		1		—			1
Operating income (loss)		(2	)		—		521		—			519
Equity in earnings of unconsolidated affiliates		—			—		118		—			118
Equity in earnings of subsidiaries		329			486		—		(815	)		—
Other income and expenses, net		(1	)		—		17		—			16
Interest expense		—			48		109		—			157
Earnings from continuing operations before income taxes		326			438		547		(815	)		496
Income tax expense (benefit) from continuing operations		(7	)		109		35		—			137
Income from continuing operations		333			329		512		(815	)		359
Income from discontinued operations, net of tax		—			—		2		—			2
Net income		333			329		514		(815	)		361
Net income—noncontrolling interests		—			—		28		—			28
Net income—controlling interests	$	333		$	329	$	486	$	(815	)	$	333

Spectra Energy Corp

Condensed Consolidating Statement of Operations

Three Months Ended March 31, 2011

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total operating revenues	$	—		$	—	$	1,612	$	—		$	1,612
Total operating expenses		3			—		1,056		—			1,059
Gains on sales of other assets and other, net		—			—		4		—			4
Operating income (loss)		(3	)		—		560		—			557
Equity in earnings of unconsolidated affiliates		—			—		106		—			106
Equity in earnings of subsidiaries		359			510		—		(869	)		—
Other income and expenses, net		—			—		6		—			6
Interest expense		—			48		107		—			155
Earnings from continuing operations before income taxes		356			462		565		(869	)		514
Income tax expense (benefit) from continuing operations		(1	)		103		37		—			139
Income from continuing operations		357			359		528		(869	)		375
Income from discontinued operations, net of tax		—			—		7		—			7
Net income		357			359		535		(869	)		382
Net income—noncontrolling interests		—			—		25		—			25
Net income—controlling interests	$	357		$	359	$	510	$	(869	)	$	357

Spectra Energy Corp

Condensed Consolidating Statement of Comprehensive Income

Three Months Ended March 31, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp		Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income	$	333	$	329	$	514	$	(815	)	$	361
Other comprehensive income
Foreign currency translation adjustments		—		—		162		—			162
Reclassification of cash flow hedges into earnings		—		1		1		—			2
Pension and benefits impact		4		—		1		—			5
Total Comprehensive income, net of tax		337		330		678		(815	)		530
Less: Comprehensive income—noncontrolling interests		—		—		30		—			30
Comprehensive income—controlling interests	$	337	$	330	$	648	$	(815	)	$	500

Spectra Energy Corp

Condensed Consolidating Statement of Comprehensive Income

Three Months Ended March 31, 2011

(Unaudited)

(In millions)

	Spectra Energy Corp		Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income	$	357	$	359	$	535	$	(869	)	$	382
Other comprehensive income
Foreign currency translation adjustments		—		—		191		—			191
Unrealized mark-to-market net gain		—		—		1		—			1
Reclassification of cash flow hedges into earnings		—		—		3		—			3
Pension and benefits impact		2		—		6		—			8
Other		—		—		8		—			8
Total Comprehensive income, net of tax		359		359		744		(869	)		593
Less: Comprehensive income—noncontrolling interests		—		—		28		—			28
Comprehensive income—controlling interests	$	359	$	359	$	716	$	(869	)	$	565

Spectra Energy Corp

Condensed Consolidating Balance Sheet

March 31, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Cash and cash equivalents	$	—		$	2		$	103	$	—		$	105
Receivables (payables)—consolidated subsidiaries		17			(21	)		4		—			—
Receivables—other		2			2			812		—			816
Other current assets		35			12			469		—			516
Total current assets		54			(5	)		1,388		—			1,437
Investments in and loans to unconsolidated affiliates		—			71			2,019		—			2,090
Investments in consolidated subsidiaries		12,242			15,475			—		(27,717	)		—
Advances receivable (payable)—consolidated subsidiaries		(3,742	)		4,238			94		(590	)		—
Goodwill		—			—			4,492		—			4,492
Other assets		36			84			399		—			519
Property, plant and equipment, net		—			—			18,678		—			18,678
Regulatory assets and deferred debits		1			15			1,127		—			1,143
Total Assets	$	8,591		$	19,878		$	28,197	$	(28,307	)	$	28,359
Accounts payable—other	$	7		$	80		$	321	$	—		$	408
Short-term borrowings and commercial paper		—			1,426			195		(590	)		1,031
Accrued taxes payable (receivable)		(29	)		27			89		—			87
Current maturities of long-term debt		—			495			526		—			1,021
Other current liabilities		40			61			621		—			722
Total current liabilities		18			2,089			1,752		(590	)		3,269
Long-term debt		—			2,804			6,945		—			9,749
Deferred credits and other liabilities		185			2,743			2,931		—			5,859
Preferred stock of subsidiaries		—			—			258		—			258
Equity
Controlling interests		8,388			12,242			15,475		(27,717	)		8,388
Noncontrolling interests		—			—			836		—			836
Total equity		8,388			12,242			16,311		(27,717	)		9,224
Total Liabilities and Equity	$	8,591		$	19,878		$	28,197	$	(28,307	)	$	28,359

Spectra Energy Corp

Condensed Consolidating Balance Sheet

December 31, 2011

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Cash and cash equivalents	$	—		$	2		$	172	$	—		$	174
Receivables (payables)—consolidated subsidiaries		—			(1	)		1		—			—
Receivables—other		—			—			962		—			962
Other current assets		57			5			566		—			628
Total current assets		57			6			1,701		—			1,764
Investments in and loans to unconsolidated affiliates		—			70			1,994		—			2,064
Investments in consolidated subsidiaries		11,720			14,884			—		(26,604	)		—
Advances receivable (payable)—consolidated subsidiaries		(3,534	)		4,116			10		(592	)		—
Goodwill		—			—			4,420		—			4,420
Other assets		42			105			383		—			530
Property, plant and equipment, net		—			—			18,258		—			18,258
Regulatory assets and deferred debits		1			15			1,086		—			1,102
Total Assets	$	8,286		$	19,196		$	27,852	$	(27,196	)	$	28,138
Accounts payable—other	$	3		$	62		$	433	$	—		$	498
Short-term borrowings and commercial paper		—			1,343			301		(592	)		1,052
Accrued taxes payable (receivable)		(46	)		2			126		—			82
Current maturities of long-term debt		—			—			525		—			525
Other current liabilities		76			75			793		—			944
Total current liabilities		33			1,482			2,178		(592	)		3,101
Long-term debt		—			3,311			6,835		—			10,146
Deferred credits and other liabilities		188			2,683			2,866		—			5,737
Preferred stock of subsidiaries		—			—			258		—			258
Equity
Controlling interests		8,065			11,720			14,884		(26,604	)		8,065
Noncontrolling interests		—			—			831		—			831
Total equity		8,065			11,720			15,715		(26,604	)		8,896
Total Liabilities and Equity	$	8,286		$	19,196		$	27,852	$	(27,196	)	$	28,138

Spectra Energy Corp

Condensed Consolidating Statements of Cash Flows

Three Months Ended March 31, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	333		$	329		$	514		$	(815	)	$	361
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		—			—			187			—			187
Equity in earnings of unconsolidated affiliates		—			—			(118	)		—			(118	)
Equity in earnings of subsidiaries		(329	)		(486	)		—			815			—
Distributions received from unconsolidated affiliates		—			—			114			—			114
Other		(55	)		94			(37	)		—			2
Net cash provided by (used in) operating activities		(51	)		(63	)		660			—			546
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		—			—			(343	)		—			(343	)
Acquisitions		—			—			(30	)		—			(30	)
Purchases of held-to-maturity securities		—			—			(861	)		—			(861	)
Proceeds from sales and maturities of held-to-maturity securities		—			—			734			—			734
Proceeds from sales and maturities of available-for-sale securities		—			—			14			—			14
Distributions received from unconsolidated affiliates		—			—			5			—			5
Other changes in restricted funds		—			—			79			—			79
Net cash used in investing activities		—			—			(402	)		—			(402	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in short-term borrowings and commercial paper		—			85			(111	)		—			(26	)
Distributions to noncontrolling interests		—			—			(27	)		—			(27	)
Dividends paid on common stock		(185	)		—			—			—			(185	)
Distributions and advances from (to) affiliates		213			(22	)		(191	)		—			—
Other		23			—			1			—			24
Net cash provided by (used in) financing activities		51			63			(328	)		—			(214	)
Effect of exchange rate changes on cash		—			—			1			—			1
Net decrease in cash and cash equivalents		—			—			(69	)		—			(69	)
Cash and cash equivalents at beginning of period		—			2			172			—			174
Cash and cash equivalents at end of period	$	—		$	2		$	103		$	—		$	105

Spectra Energy Corp

Condensed Consolidating Statements of Cash Flows

Three Months Ended March 31, 2011

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	357		$	359		$	535		$	(869	)	$	382
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		—			—			178			—			178
Equity in earnings of unconsolidated affiliates		—			—			(106	)		—			(106	)
Equity in earnings of subsidiaries		(359	)		(510	)		—			869			—
Distributions received from unconsolidated affiliates		—			—			104			—			104
Other		(13	)		129			48			—			164
Net cash provided by (used in) operating activities		(15	)		(22	)		759			—			722
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		—			—			(329	)		—			(329	)
Investments in and loans to unconsolidated affiliates		—			—			(4	)		—			(4	)
Purchases of held-to-maturity securities		—			—			(214	)		—			(214	)
Proceeds from sales and maturities of held-to-maturity securities		—			—			186			—			186
Purchases of available-for-sale securities		—			—			(548	)		—			(548	)
Proceeds from sales and maturities of available-for-sale securities		—			—			576			—			576
Other changes in restricted funds		—			—			(10	)		—			(10	)
Other		—			—			11			—			11
Net cash used in investing activities		—			—			(332	)		—			(332	)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments for the redemption of long-term debt		—			—			(36	)		—			(36	)
Net decrease in short-term borrowings and commercial paper		—			(51	)		(131	)		—			(182	)
Net increase in revolving credit facilities borrowings		—			—			13			—			13
Distributions to noncontrolling interests		—			—			(23	)		—			(23	)
Dividends paid on common stock		(170	)		—			—			—			(170	)
Distributions and advances from (to) affiliates		168			79			(247	)		—			—
Other		17			—			(1	)		—			16
Net cash provided by (used in) financing activities		15			28			(425	)		—			(382	)
Effect of exchange rate changes on cash		—			—			2			—			2
Net increase in cash and cash equivalents		—			6			4			—			10
Cash and cash equivalents at beginning of period		—			—			130			—			130
Cash and cash equivalents at end of period	$	—		$	6		$	134		$	—		$	140

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Risk Management and Hedging Activities

3 Months Ended

Mar. 31, 2012

Risk Management and Hedging Activities

12. Risk Management and Hedging Activities

We are exposed to the impact of market fluctuations in the prices of NGLs and natural gas purchased as a result of our investment in DCP Midstream, and the ownership of NGL marketing operations in western Canada and the processing plants associated with our U.S. pipeline assets. Exposure to interest rate risk exists as a result of the issuance of variable and fixed-rate debt and commercial paper. We are exposed to foreign currency risk from our Canadian operations. We employ established policies and procedures to manage our risks associated with these market fluctuations, which may include the use of derivatives, primarily around interest rate exposures.

DCP Midstream manages their direct exposure to market prices separate from Spectra Energy, and utilizes various risk management strategies, including the use of commodity derivatives.

At March 31, 2012, we had “pay floating—receive fixed” interest rate swaps outstanding with a total notional principal amount of $2,100 million to hedge against changes in the fair value of our fixed-rate debt that arise as a result of changes in market interest rates. These swaps also allow us to transform a portion of the underlying interest payments related to our long-term fixed-rate debt securities into variable-rate interest payments in order to achieve our desired mix of fixed and variable-rate debt.

Other than interest rate swaps described above, we did not have any significant derivatives outstanding during the three months ended March 31, 2012.

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Investments in and Loans to Unconsolidated Affiliates

3 Months Ended

Mar. 31, 2012

Investments in and Loans to Unconsolidated Affiliates

8. Investments in and Loans to Unconsolidated Affiliates

Our most significant investment in unconsolidated affiliates is our 50% investment in DCP Midstream, which is accounted for under the equity method of accounting. The following represents summary financial information for DCP Midstream, presented at 100%:

	Three Months Ended March 31,
	2012		2011
	(in millions)
Operating revenues	$	2,902	$	2,929
Operating expenses		2,694		2,755
Operating income		208		174
Net income		155		125
Net income attributable to members’ interests		144		133

DCP Midstream recorded gains on sales of common units of DCP Partners to equity in the first quarters of 2012 and 2011. Our proportionate 50% share, totaling $21 million and $14 million, respectively, was recorded in Equity in Earnings of Unconsolidated Affiliates in the Condensed Consolidated Statements of Operations.

Related Party Transactions. In 2008, we entered into a settlement agreement related to certain liquefied natural gas transportation contracts under which one of our subsidiaries’ claims were satisfied pursuant to commercial transactions involving the purchase of propane from certain parties. We subsequently entered into associated agreements with affiliates of DCP Midstream for the sale of these propane volumes. Net purchases and sales of propane under these arrangements are reflected as discontinued operations.

Sales of propane to affiliates of DCP Midstream are as follows:

	Three Months Ended March 31,
	2012		2011
	(in millions)
Sales of propane	$	57	$	84

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Guarantees and Indemnifications - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012
Fluor Enterprises
Guarantor Obligations [Line Items]
Percentage of ownership interests	50.00%
Duke Energy
Guarantor Obligations [Line Items]
Maximum potential amount of future payments required to make under performance guarantees	406
Duke Energy | Guarantees Expire in 2028
Guarantor Obligations [Line Items]
Maximum potential amount of future payments required to make under performance guarantees	201
Guarantee expiration year	2028

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Earnings per Common Share

3 Months Ended

Mar. 31, 2012

Earnings per Common Share

6. Earnings per Common Share

Basic earnings per common share (EPS) is computed by dividing net income from controlling interests by the weighted-average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income from controlling interests by the diluted weighted-average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other agreements to issue common stock, such as stock options, stock-based performance unit awards and phantom stock awards, were exercised, settled or converted into common stock.

Weighted-average shares used to calculate diluted EPS includes the effect of certain options and restricted stock awards. Certain other options related to approximately five million shares for the three months ended March 31, 2011 were not included in the calculation of diluted EPS because the option exercise prices were greater than the average market price of the shares during these periods.

The following table presents our basic and diluted EPS calculations:

	Three Months Ended March 31,
	2012		2011
	(in millions, except per-share amounts)
Income from continuing operations, net of tax—controlling interests	$	331	$	350
Income from discontinued operations, net of tax—controlling interests		2		7
Net income—controlling interests	$	333	$	357
Weighted-average common shares, outstanding
Basic		652		649
Diluted		655		651
Basic and diluted earnings per common share (a)
Continuing operations	$	0.51	$	0.54
Discontinued operations, net of tax		—		0.01
Total basic and diluted earnings per common share	$	0.51	$	0.55

(a) Quarterly earnings-per-share amounts are stand-alone calculations and may not be additive to full-year amounts due to rounding.

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Inventory

3 Months Ended

Mar. 31, 2012

Inventory

7. Inventory

Inventory consists of natural gas and NGLs held in storage for transmission and processing, and also includes materials and supplies. Natural gas inventories primarily relate to the Distribution segment in Canada and are valued at costs approved by the OEB. The difference between the approved price and the actual cost of gas purchased is recorded in either accounts receivable or other current liabilities, as appropriate, for future disposition with customers, subject to approval by the OEB. The remaining inventory is recorded at cost, primarily using average cost. The components of inventory are as follows:

	March 31, 2012		December 31, 2011
	(in millions)
Natural gas	$	137	$	263
NGLs		46		58
Materials and supplies		75		72
Total inventory	$	258	$	393

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Marketable Securities and Restricted Funds

3 Months Ended

Mar. 31, 2012

Marketable Securities and Restricted Funds

9. Marketable Securities and Restricted Funds

We routinely invest excess cash and various restricted balances in securities such as commercial paper, bankers acceptances, corporate debt securities, treasury bills and money market funds in the United States and Canada. We do not purchase marketable securities for speculative purposes, nor do we routinely sell marketable securities prior to their scheduled maturity dates. Therefore, we do not have any securities classified as trading securities. A portion of our investments of restricted funds, primarily insurance-related funds, are classified as available-for-sale marketable securities as they may occasionally be sold prior to their scheduled maturity dates due to unexpected cash needs. Initial investments in securities are classified as purchases of the respective type of securities (available-for-sale (AFS) marketable securities or held-to-maturity (HTM) marketable securities). Maturities of securities are classified within proceeds from sales and maturities of securities in the Condensed Consolidated Statements of Cash Flows.

AFS Securities. We had no restricted AFS securities classified as Current Assets—Other as of March 31, 2012 and $14 million as of December 31, 2011, and $3 million as of March 31, 2012 and December 31, 2011 classified as Investments and Other Assets—Other. These restricted funds are related to insurance.

During 2010, we invested a portion of the proceeds from Spectra Energy Partners’ issuance of common units to the public in AFS marketable securities. These investments were pledged as collateral against Spectra Energy Partners’ term loan. Spectra Energy Partners’ term loan was repaid in June 2011 and the related investments were liquidated.

At March 31, 2012, the weighted-average contractual maturity of outstanding AFS securities was less than one year.

There were no gross unrealized holding gains or losses associated with investments in AFS securities at March 31, 2012 or December 31, 2011. Estimated fair values of AFS securities follow:

	Estimated Fair Value
	March 31, 2012		December 31, 2011
	(in millions)
Corporate debt securities	$	18	$	18
Canadian government securities		—		14
Money market funds		3		3
Total available-for-sale investments	$	21	$	35

HTM Securities. HTM marketable securities, totaling $266 million as of March 31, 2012 and $162 million as of December 31, 2011, are classified as Investments and Other Assets—Other, and $28 million as of March 31, 2012 are classified as Current Assets—Other. These securities are restricted funds pursuant to certain Maritimes & Northeast Pipeline Limited Partnership (M&N LP) debt agreements. These funds, plus future cash from operations that would otherwise be available for distribution to the partners of M&N LP, are placed in escrow until the balance in escrow is sufficient to fund all future debt service on the M&N LP notes. The notes payable, totaling $208 million as of March 31, 2012, have semi-annual interest and principal payments and are due in 2019.

At March 31, 2012, the weighted-average contractual maturity of outstanding HTM securities was less than one year.

There were no gross unrecognized holding gains or losses associated with investments in HTM securities at March 31, 2012 or December 31, 2011. Estimated fair values of HTM securities follow:

	Estimated Fair Value
	March 31, 2012		December 31, 2011
	(in millions)
Canadian government securities	$	143	$	107
Bankers acceptance notes		151		55
Total held-to-maturity investments	$	294	$	162

Other Restricted Funds. In addition to the AFS and HTM securities described above, we had restricted funds totaling $37 million at March 31, 2012 and $35 million at December 31, 2011 classified as Current Assets—Other, and $79 million at December 31, 2011 classified as Investments and Other Assets—Other. These restricted funds are primarily related to additional amounts for the M&N LP debt service requirements.

Changes in restricted balances are presented with Cash Flows from Investing Activities on our Condensed Consolidated Statements of Cash Flows.

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Condensed Consolidating Statement of Operations (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012		Mar. 31, 2011
Condensed Financial Statements, Captions [Line Items]
Total operating revenues	$ 1,544	[1]	$ 1,612	[1]
Total operating expenses	1,026		1,059
Gains on Sales of Other Assets and Other, net	1		4
Operating income (loss)	519		557
Equity in earnings of unconsolidated affiliates	118		106
Other income and expenses, net	16		6
Interest expense	157	[1]	155	[1]
Earnings from continuing operations before income taxes	496	[1]	514	[1]
Income tax expense (benefit) from continuing operations	137		139
Income from continuing operations	359		375
Income From Discontinued Operations, net of tax	2		7
Net income	361		382
Net income-noncontrolling interests	28		25
Net income-controlling interests	333		357
Spectra Energy Corp
Condensed Financial Statements, Captions [Line Items]
Total operating expenses	2		3
Operating income (loss)	(2)		(3)
Equity in earnings of subsidiaries	329		359
Other income and expenses, net	(1)
Earnings from continuing operations before income taxes	326		356
Income tax expense (benefit) from continuing operations	(7)		(1)
Income from continuing operations	333		357
Net income	333		357
Net income-controlling interests	333		357
Spectra Energy Capital, LLC
Condensed Financial Statements, Captions [Line Items]
Equity in earnings of subsidiaries	486		510
Interest expense	48		48
Earnings from continuing operations before income taxes	438		462
Income tax expense (benefit) from continuing operations	109		103
Income from continuing operations	329		359
Net income	329		359
Net income-controlling interests	329		359
Non-Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Total operating revenues	1,545		1,612
Total operating expenses	1,025		1,056
Gains on Sales of Other Assets and Other, net	1		4
Operating income (loss)	521		560
Equity in earnings of unconsolidated affiliates	118		106
Other income and expenses, net	17		6
Interest expense	109		107
Earnings from continuing operations before income taxes	547		565
Income tax expense (benefit) from continuing operations	35		37
Income from continuing operations	512		528
Income From Discontinued Operations, net of tax	2		7
Net income	514		535
Net income-noncontrolling interests	28		25
Net income-controlling interests	486		510
Elimination
Condensed Financial Statements, Captions [Line Items]
Total operating revenues	(1)
Total operating expenses	(1)
Equity in earnings of subsidiaries	(815)		(869)
Earnings from continuing operations before income taxes	(815)		(869)
Income from continuing operations	(815)		(869)
Net income	(815)		(869)
Net income-controlling interests	$ (815)		$ (869)

[1] Excludes amounts associated with entities included in discontinued operations.

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Condensed Consolidating Balance Sheet (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2011	Dec. 31, 2010
Condensed Financial Statements, Captions [Line Items]
Cash and cash equivalents	$ 105	$ 174	$ 140	$ 130
Receivables-other	816	962
Other current assets	516	628
Total current assets	1,437	1,764
Investments in and loans to unconsolidated affiliates	2,090	2,064
Goodwill	4,492	4,420
Other assets	519	530
Property, plant and equipment, net	18,678	18,258
Regulatory Assets and Deferred Debits	1,143	1,102
Total Assets	28,359	28,138
Accounts payable-other	408	498
Short-term borrowings and commercial paper	1,031	1,052
Accrued taxes payable (receivable)	87	82
Current maturities of long-term debt	1,021	525
Other current liabilities	722	944
Total current liabilities	3,269	3,101
Long-term Debt	9,749	10,146
Deferred credits and other liabilities	5,859	5,737
Preferred stock of subsidiaries	258	258
Equity
Controlling interests	8,388	8,065
Noncontrolling interests	836	831
Total equity	9,224	8,896	8,901	8,487
Total Liabilities and Equity	28,359	28,138
Spectra Energy Corp
Condensed Financial Statements, Captions [Line Items]
Receivables (payables)-consolidated subsidiaries	17
Receivables-other	2
Other current assets	35	57
Total current assets	54	57
Investments in consolidated subsidiaries	12,242	11,720
Advances receivable (payable)-consolidated subsidiaries	(3,742)	(3,534)
Other assets	36	42
Regulatory Assets and Deferred Debits	1	1
Total Assets	8,591	8,286
Accounts payable-other	7	3
Accrued taxes payable (receivable)	(29)	(46)
Other current liabilities	40	76
Total current liabilities	18	33
Deferred credits and other liabilities	185	188
Equity
Controlling interests	8,388	8,065
Total equity	8,388	8,065
Total Liabilities and Equity	8,591	8,286
Spectra Energy Capital, LLC
Condensed Financial Statements, Captions [Line Items]
Cash and cash equivalents	2	2	6
Receivables (payables)-consolidated subsidiaries	(21)	(1)
Receivables-other	2
Other current assets	12	5
Total current assets	(5)	6
Investments in and loans to unconsolidated affiliates	71	70
Investments in consolidated subsidiaries	15,475	14,884
Advances receivable (payable)-consolidated subsidiaries	4,238	4,116
Other assets	84	105
Regulatory Assets and Deferred Debits	15	15
Total Assets	19,878	19,196
Accounts payable-other	80	62
Short-term borrowings and commercial paper	1,426	1,343
Accrued taxes payable (receivable)	27	2
Current maturities of long-term debt	495
Other current liabilities	61	75
Total current liabilities	2,089	1,482
Long-term Debt	2,804	3,311
Deferred credits and other liabilities	2,743	2,683
Equity
Controlling interests	12,242	11,720
Total equity	12,242	11,720
Total Liabilities and Equity	19,878	19,196
Non-Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Cash and cash equivalents	103	172	134	130
Receivables (payables)-consolidated subsidiaries	4	1
Receivables-other	812	962
Other current assets	469	566
Total current assets	1,388	1,701
Investments in and loans to unconsolidated affiliates	2,019	1,994
Advances receivable (payable)-consolidated subsidiaries	94	10
Goodwill	4,492	4,420
Other assets	399	383
Property, plant and equipment, net	18,678	18,258
Regulatory Assets and Deferred Debits	1,127	1,086
Total Assets	28,197	27,852
Accounts payable-other	321	433
Short-term borrowings and commercial paper	195	301
Accrued taxes payable (receivable)	89	126
Current maturities of long-term debt	526	525
Other current liabilities	621	793
Total current liabilities	1,752	2,178
Long-term Debt	6,945	6,835
Deferred credits and other liabilities	2,931	2,866
Preferred stock of subsidiaries	258	258
Equity
Controlling interests	15,475	14,884
Noncontrolling interests	836	831
Total equity	16,311	15,715
Total Liabilities and Equity	28,197	27,852
Elimination
Condensed Financial Statements, Captions [Line Items]
Investments in consolidated subsidiaries	(27,717)	(26,604)
Advances receivable (payable)-consolidated subsidiaries	(590)	(592)
Total Assets	(28,307)	(27,196)
Short-term borrowings and commercial paper	(590)	(592)
Total current liabilities	(590)	(592)
Equity
Controlling interests	(27,717)	(26,604)
Total equity	(27,717)	(26,604)
Total Liabilities and Equity	$ (28,307)	$ (27,196)

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Other Post Retirement Benefit Plans Components of Net Periodic Benefit Cost (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
U.S. Other Post-Retirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Interest cost on accumulated post-retirement benefit obligation	$ 3	$ 3
Expected return on plan assets	(1)	(1)
Net Periodic Cost	2	2
Canadian Other Post-Retirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost benefit earned	2	1
Interest cost on accumulated post-retirement benefit obligation	2	2
Net Periodic Cost	$ 4	$ 3

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Employee Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2012

Qualified and Non Qualified Pension Plans Components of Net Periodic Pension Cost

Qualified and Non-Qualified Pension Plans—Components of Net Periodic Pension Cost

	Three Months Ended March 31,
	2012			2011
	(in millions)
U.S.
Service cost benefit earned	$	3		$	3
Interest cost on projected benefit obligation		6			6
Expected return on plan assets		(8	)		(8	)
Amortization of loss		4			3
Net periodic pension cost	$	5		$	4
Canada
Service cost benefit earned	$	7		$	5
Interest cost on projected benefit obligation		13			14
Expected return on plan assets		(15	)		(12	)
Amortization of loss		9			6
Net periodic pension cost	$	14		$	13

Other Post-Retirement Benefit Plans-Components of Net Periodic Benefit Cost

Other Post-Retirement Benefit Plans—Components of Net Periodic Benefit Cost

	Three Months Ended March 31,
	2012			2011
	(in millions)
U.S.
Interest cost on accumulated post-retirement benefit obligation	$	3		$	3
Expected return on plan assets		(1	)		(1	)
Net periodic other post-retirement benefit cost	$	2		$	2
Canada
Service cost benefit earned	$	2		$	1
Interest cost on accumulated post-retirement benefit obligation		2			2
Net periodic other post-retirement benefit cost	$	4		$	3

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Estimated Fair Values of Held to Maturity Securities (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Schedule of Held-to-maturity Securities [Line Items]
Estimated Fair Value	$ 294	$ 162
Canadian government securities
Schedule of Held-to-maturity Securities [Line Items]
Estimated Fair Value	143	107
Bankers acceptance notes
Schedule of Held-to-maturity Securities [Line Items]
Estimated Fair Value	$ 151	$ 55

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Guarantees and Indemnifications

3 Months Ended

Mar. 31, 2012

Guarantees and Indemnifications

14. Guarantees and Indemnifications

We have various financial guarantees and indemnifications which are issued in the normal course of business. As discussed below, these contracts include financial guarantees, stand-by letters of credit, debt guarantees, surety bonds and indemnifications. We enter into these arrangements to facilitate a commercial transaction with a third party by enhancing the value of the transaction to the third party. To varying degrees, these guarantees involve elements of performance and credit risk, which are not included on the Condensed Consolidated Balance Sheets. The possibility of having to perform under these guarantees and indemnifications is largely dependent upon future operations of various subsidiaries, investees and other third parties, or the occurrence of certain future events.

We have issued performance guarantees to customers and other third parties that guarantee the payment and performance of other parties, including certain non-100%-owned entities. In connection with our spin-off from Duke Energy Corporation (Duke Energy) in 2007, certain guarantees that were previously issued by us were assigned to, or replaced by, Duke Energy as guarantor in 2006. For any remaining guarantees of other Duke Energy obligations, Duke Energy has indemnified us against any losses incurred under these guarantee arrangements. The maximum potential amount of future payments we could have been required to make under these performance guarantees as of March 31, 2012 was approximately $406 million, which has been indemnified by Duke Energy as discussed above. One of these outstanding performance guarantees, which has a maximum potential amount of future payment of $201 million, expires in 2028. The remaining guarantees have no contractual expirations.

We have also issued joint and several guarantees to some of the Duke/Fluor Daniel (D/FD) project owners, guaranteeing the performance of D/FD under its engineering, procurement and construction contracts and other contractual commitments in place at the time of our spin-off from Duke Energy. D/FD is one of the entities transferred to Duke Energy in connection with our spin-off. Substantially all of these guarantees have no contractual expiration and no stated maximum amount of future payments that we could be required to make. Fluor Enterprises Inc., as 50% owner in D/FD, has issued similar joint and several guarantees to the same D/FD project owners.

Westcoast Energy Inc. (Westcoast), a 100%-owned subsidiary, has issued performance guarantees to third parties guaranteeing the performance of unconsolidated entities, such as equity method investments, and of entities previously sold by Westcoast to third parties. Those guarantees require Westcoast to make payment to the guaranteed third party upon the failure of such unconsolidated or sold entity to make payment under some of its contractual obligations, such as debt agreements, purchase contracts and leases. Certain guarantees that were previously issued by Westcoast for obligations of entities that remained a part of Duke Energy are considered guarantees of third party performance; however, Duke Energy has indemnified us against any losses incurred under these guarantee arrangements.

We have entered into various indemnification agreements related to purchase and sale agreements and other types of contractual agreements with vendors and other third parties. These agreements typically cover environmental, tax, litigation and other matters, as well as breaches of representations, warranties and covenants. Typically, claims may be made by third parties for various periods of time depending on the nature of the claim. Our potential exposure under these indemnification agreements can range from a specified amount, such as the purchase price, to an unlimited dollar amount, depending on the nature of the claim and the particular transaction. We are unable to estimate the total potential amount of future payments under these indemnification agreements due to several factors, such as the unlimited exposure under certain guarantees.

As of March 31, 2012, the amounts recorded for the guarantees and indemnifications, described above, including the indemnifications by Duke Energy to us, are not material, both individually and in the aggregate.

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Business Segments (Tables)

3 Months Ended

Mar. 31, 2012

Business Segment Data

Business Segment Data

	Unaffiliated Revenues		Intersegment Revenues			Total Operating Revenues (a)			Segment EBIT/ Consolidated Earnings from Continuing Operations before Income Taxes (a)
			(in millions)
Three Months Ended March 31, 2012
U.S. Transmission	$	493	$	2		$	495		$	271
Distribution		597		—			597			151
Western Canada Transmission & Processing		453		13			466			138
Field Services		—		—			—			93
Total reportable segments		1,543		15			1,558			653
Other		1		20			21			(29	)
Eliminations		—		(35	)		(35	)		—
Interest expense		—		—			—			157
Interest income and other (b)		—		—			—			29
Total consolidated	$	1,544	$	—		$	1,544		$	496
Three Months Ended March 31, 2011
U.S. Transmission	$	481	$	2		$	483		$	279
Distribution		696		—			696			167
Western Canada Transmission & Processing		433		6			439			141
Field Services		—		—			—			81
Total reportable segments		1,610		8			1,618			668
Other		2		15			17			(24	)
Eliminations		—		(23	)		(23	)		—
Interest expense		—		—			—			155
Interest income and other (b)		—		—			—			25
Total consolidated	$	1,612	$	—		$	1,612		$	514

(a) Excludes amounts associated with entities included in discontinued operations.

(b) Includes foreign currency transaction gains and losses and the add-back of noncontrolling interests related to segment EBIT.

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Marketable Securities and Restricted Funds - Additional Information (Detail) (USD $) In Millions, unless otherwise specified							3 Months Ended
	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2012 Current Assets-other	Dec. 31, 2011 Current Assets-other	Mar. 31, 2012 Investments and Other Assets-Other	Dec. 31, 2011 Investments and Other Assets-Other	Mar. 31, 2012 Maximum
Gain (Loss) on Investments [Line Items]
Other restricted available for sale securities, current				$ 14
Other restricted available for sale securities, noncurrent					3	3
Maximum contractual maturities of outstanding AFS securities							1 year
Held-to-maturity marketable securities	294	162	28		266	162
Notes payable with semi-annual interest and principal payments	208
Notes payable due date	2019
Maximum contractual maturities of outstanding HTM securities							1 year
Other current assets, restricted funds			37	35
Other non current assets, restricted funds						$ 79

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Income Taxes - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Income Tax Contingency [Line Items]
Income tax expense (benefit) from continuing operations	$ 137	$ 139
Effective tax rate for income from continuing operations	28.00%	27.00%

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2012	Dec. 31, 2011
Preferred stock, par	$ 0.001	$ 0.001
Preferred stock, shares authorized	22,000,000	22,000,000
Preferred stock, shares outstanding	0	0
Common stock, par	$ 0.001	$ 0.001
Common stock, shares authorized	1,000,000,000	1,000,000,000
Common stock, shares outstanding	653,000,000	651,000,000

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Regulatory Matters

3 Months Ended

Mar. 31, 2012

Regulatory Matters

3. Regulatory Matters

Union Gas. Since 2012 is the final year in Union Gas’ current multi-year incentive regulation framework, Union Gas filed an application with the OEB in November 2011 to set their distribution rates effective January 1, 2013. Union Gas plans to file their application for a new multi-year incentive regulation framework after receiving the OEB decision on their 2013 rate application. The OEB decision on Union Gas’ rate application is expected in late 2012.

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Risk Management and Hedging Activities - Additional Information (Detail) (Pay Floating Receive Fixed Swaps, USD $) In Millions, unless otherwise specified	Mar. 31, 2012
Pay Floating Receive Fixed Swaps
Derivative [Line Items]
Notional principal amount of interest rate hedges	$ 2,100

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Discontinued Operations (Tables)

3 Months Ended

Mar. 31, 2012

Results Classified as Income from Discontinued Operations, Net of Tax in Condensed Consolidated Statements of Operations

The following table summarizes results classified as Income From Discontinued Operations, Net of Tax in the accompanying Condensed Consolidated Statements of Operations:

	Revenues		Pre-tax Earnings		Income Tax Expense		Income From Discontinued Operations, Net of Tax
	(in millions)
Three Months Ended March 31, 2012
Other	$	57	$	3	$	1	$	2
Total consolidated	$	57	$	3	$	1	$	2
Three Months Ended March 31, 2011
Other	$	84	$	10	$	3	$	7
Total consolidated	$	84	$	10	$	3	$	7

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Business Segments - Additional Information (Detail) (DCP Midstream, LLC)	3 Months Ended
	Mar. 31, 2012
DCP Midstream Partners, LP
Segment Reporting Information [Line Items]
Percentage of ownership interests	27.00%
Spectra Energy Corp
Segment Reporting Information [Line Items]
Percentage of ownership interests	50.00%
Phillips 66
Segment Reporting Information [Line Items]
Percentage of ownership interests	50.00%
Ownership transfer date	May 01, 2012

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2012

Commitments and Contingencies

13. Commitments and Contingencies

Environmental

We are subject to various U.S. federal, state and local laws and regulations, as well as Canadian federal and provincial laws, regarding air and water quality, hazardous and solid waste disposal and other environmental matters. These laws and regulations can change from time to time, imposing new obligations on us.

Like others in the energy industry, we and our affiliates are responsible for environmental remediation at various contaminated sites. These include some properties that are part of our ongoing operations, sites formerly owned or used by us, and sites owned by third parties. Remediation typically involves management of contaminated soils and may involve groundwater remediation. Managed in conjunction with relevant federal, state/provincial and local agencies, activities vary with site conditions and locations, remedial requirements, complexity and sharing of responsibility. If remediation activities involve statutory joint and several liability provisions, strict liability, or cost recovery or contribution actions, we or our affiliates could potentially be held responsible for contamination caused by other parties. In some instances, we may share liability associated with contamination with other potentially responsible parties, and may also benefit from insurance policies or contractual indemnities that cover some or all cleanup costs. All of these sites generally are managed in the normal course of business or affiliated operations.

Included in Deferred Credits and Other Liabilities—Regulatory and Other on the Condensed Consolidated Balance Sheets are undiscounted liabilities related to extended environmental-related activities totaling $15 million at March 31, 2012 and $16 million as of December 31, 2011. These liabilities represent provisions for costs associated with remediation activities at some of our current and former sites, as well as other environmental contingent liabilities.

Litigation

Litigation and Legal Proceedings. We are involved in legal, tax and regulatory proceedings in various forums arising in the ordinary course of business, including matters regarding contract and payment claims, some of which involve substantial monetary amounts. We have insurance coverage for certain of these losses should they be incurred. We believe that the final disposition of these proceedings will not have a material effect on our consolidated results of operations, financial position or cash flows.

Legal costs related to the defense of loss contingencies are expensed as incurred. We had no material reserves recorded as of March 31, 2012 or December 31, 2011 related to litigation.

Other Commitments and Contingencies

See Note 14 for a discussion of guarantees and indemnifications.