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 June 30, 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 June 30, 2012: 652,870,488

SPECTRA ENERGY CORP

FORM 10-Q FOR THE QUARTER ENDED

June 30, 2012

INDEX

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)		4
	Condensed Consolidated Statements of Operations for the three and six months ended June  30, 2012 and 2011		4
	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2012 and 2011		5
	Condensed Consolidated Balance Sheets as of June 30, 2012 and December 31, 2011		6
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2012 and 2011		8
	Condensed Consolidated Statements of Equity for the six months ended June 30, 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		35
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		48
Item 4.	Controls and Procedures		48
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		49
Item 1A.	Risk Factors		49
Item 6.	Exhibits		49
	Signatures		50

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.

3

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 June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Operating Revenues
Transportation, storage and processing of natural gas	$	784	$	773	$	1,615	$	1,564
Distribution of natural gas		240		286		745		893
Sales of natural gas liquids		56		93		205		270
Other		32		36		91		73
Total operating revenues		1,112		1,188		2,656		2,800
Operating Expenses
Natural gas and petroleum products purchased		146		180		579		665
Operating, maintenance and other		334		347		655		661
Depreciation and amortization		185		177		369		352
Property and other taxes		81		82		169		167
Total operating expenses		746		786		1,772		1,845
Gains on Sales of Other Assets and Other, net		1		—		2		4
Operating Income		367		402		886		959
Other Income and Expenses
Equity in earnings of unconsolidated affiliates		91		162		209		268
Other income and expenses, net		18		18		34		24
Total other income and expenses		109		180		243		292
Interest Expense		155		159		312		314
Earnings From Continuing Operations Before Income Taxes		321		423		817		937
Income Tax Expense From Continuing Operations		80		125		217		264
Income From Continuing Operations		241		298		600		673
Income From Discontinued Operations, net of tax		—		9		2		16
Net Income		241		307		602		689
Net Income—Noncontrolling Interests		26		23		54		48
Net Income—Controlling Interests	$	215	$	284	$	548	$	641
Common Stock Data
Weighted-average shares outstanding
Basic		653		650		652		650
Diluted		655		652		655		652
Earnings per share from continuing operations
Basic	$	0.33	$	0.42	$	0.84	$	0.96
Diluted	$	0.33	$	0.42	$	0.83	$	0.96
Earnings per share
Basic	$	0.33	$	0.44	$	0.84	$	0.99
Diluted	$	0.33	$	0.44	$	0.84	$	0.98
Dividends per share	$	0.28	$	0.26	$	0.56	$	0.52

See Notes to Condensed Consolidated Financial Statements.

4

SPECTRA ENERGY CORP

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In millions)

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012		2011
Net Income	$	241		$	307		$	602	$	689
Other comprehensive income
Foreign currency translation adjustments		(133	)		57			29		248
Unrealized mark-to-market net gain (loss) on hedges		3			(1	)		3		—
Reclassification of cash flow hedges into earnings		2			2			4		5
Pension and benefits impact		18			7			23		15
Other		—			—			—		8
Total other comprehensive income		(110	)		65			59		276
Total Comprehensive Income, net of tax		131			372			661		965
Less: Comprehensive Income—Noncontrolling Interests		24			24			54		52
Comprehensive Income—Controlling Interests	$	107		$	348		$	607	$	913

See Notes to Condensed Consolidated Financial Statements.

5

SPECTRA ENERGY CORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions)

	June 30, 2012		December 31, 2011
ASSETS
Current Assets
Cash and cash equivalents	$	127	$	174
Receivables, net		715		962
Inventory		307		393
Other		246		235
Total current assets		1,395		1,764
Investments and Other Assets
Investments in and loans to unconsolidated affiliates		2,082		2,064
Goodwill		4,435		4,420
Other		496		530
Total investments and other assets		7,013		7,014
Property, Plant and Equipment
Cost		24,803		23,932
Less accumulated depreciation and amortization		6,005		5,674
Net property, plant and equipment		18,798		18,258
Regulatory Assets and Deferred Debits		1,169		1,102
Total Assets	$	28,375	$	28,138

See Notes to Condensed Consolidated Financial Statements.

6

SPECTRA ENERGY CORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions, except per-share amounts)

	June 30, 2012		December 31, 2011
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	458	$	498
Short-term borrowings and commercial paper		1,073		1,052
Taxes accrued		72		82
Interest accrued		186		178
Current maturities of long-term debt		1,030		525
Other		625		766
Total current liabilities		3,444		3,101
Long-term Debt		9,632		10,146
Deferred Credits and Other Liabilities
Deferred income taxes		4,163		3,940
Regulatory and other		1,730		1,797
Total deferred credits and other liabilities		5,893		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 June 30, 2012 and December 31, 2011, respectively		1		1
Additional paid-in capital		4,830		4,814
Retained earnings		2,156		1,977
Accumulated other comprehensive income		1,332		1,273
Total controlling interests		8,319		8,065
Noncontrolling interests		829		831
Total equity		9,148		8,896
Total Liabilities and Equity	$	28,375	$	28,138

See Notes to Condensed Consolidated Financial Statements.

7

SPECTRA ENERGY CORP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In millions)

	Six Months Ended June 30,
	2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	602		$	689
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		375			359
Deferred income tax expense		147			199
Equity in earnings of unconsolidated affiliates		(209	)		(268	)
Distributions received from unconsolidated affiliates		197			201
Other		47			158
Net cash provided by operating activities		1,159			1,338
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(789	)		(739	)
Investments in and loans to unconsolidated affiliates		—			(4	)
Acquisitions		(30	)		—
Purchases of held-to-maturity securities		(1,490	)		(763	)
Proceeds from sales and maturities of held-to-maturity securities		1,387			733
Purchases of available-for-sale securities		—			(930	)
Proceeds from sales and maturities of available-for-sale securities		21			1,119
Distributions received from unconsolidated affiliates		11			—
Other changes in restricted funds		92			8
Other		6			5
Net cash used in investing activities		(792	)		(571	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt		—			805
Payments for the redemption of long-term debt		(28	)		(494	)
Net increase (decrease) in short-term borrowings and commercial paper		15			(258	)
Net decrease in revolving credit facilities borrowings		—			(258	)
Distributions to noncontrolling interests		(56	)		(47	)
Proceeds from the issuance of Spectra Energy Partners, LP common units		—			213
Dividends paid on common stock		(372	)		(341	)
Other		27			19
Net cash used in financing activities		(414	)		(361	)
Effect of exchange rate changes on cash		—			2
Net increase (decrease) in cash and cash equivalents		(47	)		408
Cash and cash equivalents at beginning of period		174			130
Cash and cash equivalents at end of period	$	127		$	538
Supplemental Disclosures
Property, plant and equipment non-cash accruals	$	182		$	169

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		—		—		548			—		—			54			602
Other comprehensive income		—		—		—			29		30			—			59
Dividends on common stock		—		—		(369	)		—		—			—			(369	)
Stock-based compensation		—		5		—			—		—			—			5
Distributions to noncontrolling interests		—		—		—			—		—			(56	)		(56	)
Spectra Energy common stock issued		—		11		—			—		—			—			11
June 30, 2012	$	1	$	4,830	$	2,156		$	1,861	$	(529	)	$	829		$	9,148
December 31, 2010	$	1	$	4,726	$	1,487		$	2,010	$	(415	)	$	678		$	8,487
Net income		—		—		641			—		—			48			689
Other comprehensive income		—		—		—			244		28			4			276
Dividends on common stock		—		—		(341	)		—		—			—			(341	)
Stock-based compensation		—		27		—			—		—			—			27
Distributions to noncontrolling interests		—		—		—			—		—			(47	)		(47	)
Spectra Energy Partners, LP common units issued		—		38		—			—		—			154			192
June 30, 2011	$	1	$	4,791	$	1,787		$	2,254	$	(387	)	$	837		$	9,283

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 six months ended June 30, 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 Decrease 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.

10

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)
Six Months Ended June 30, 2011
As previously reported	$	2,424		$	(2,371	)
Less non-cash activity		(1,567	)		1,567
As corrected		857			(804	)
Less revolving credit facility activity		(52	)		310
Long-term debt activity	$	805		$	(494	)

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).

11

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 26% 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.

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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 June 30, 2012
U.S. Transmission	$	462	$	2		$	464		$	237
Distribution		322		—			322			75
Western Canada Transmission & Processing		325		4			329			94
Field Services		—		—			—			66
Total reportable segments		1,109		6			1,115			472
Other		3		16			19			(25	)
Eliminations		—		(22	)		(22	)		—
Interest expense		—		—			—			155
Interest income and other (b)		—		—			—			29
Total consolidated	$	1,112	$	—		$	1,112		$	321
Three Months Ended June 30, 2011
U.S. Transmission	$	454	$	3		$	457		$	243
Distribution		375		—			375			88
Western Canada Transmission & Processing		357		14			371			113
Field Services		—		—			—			138
Total reportable segments		1,186		17			1,203			582
Other		2		14			16			(29	)
Eliminations		—		(31	)		(31	)		—
Interest expense		—		—			—			159
Interest income and other (b)		—		—			—			29
Total consolidated	$	1,188	$	—		$	1,188		$	423
Six Months Ended June 30, 2012
U.S. Transmission	$	955	$	4		$	959		$	508
Distribution		919		—			919			226
Western Canada Transmission & Processing		778		17			795			232
Field Services		—		—			—			159
Total reportable segments		2,652		21			2,673			1,125
Other		4		36			40			(54	)
Eliminations		—		(57	)		(57	)		—
Interest expense		—		—			—			312
Interest income and other (b)		—		—			—			58
Total consolidated	$	2,656	$	—		$	2,656		$	817
Six Months Ended June 30, 2011
U.S. Transmission	$	935	$	5		$	940		$	522
Distribution		1,071		—			1,071			255
Western Canada Transmission & Processing		790		20			810			254
Field Services		—		—			—			219
Total reportable segments		2,796		25			2,821			1,250
Other		4		29			33			(53	)
Eliminations		—		(54	)		(54	)		—
Interest expense		—		—			—			314
Interest income and other (b)		—		—			—			54
Total consolidated	$	2,800	$	—		$	2,800		$	937

(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. As 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. As part of the 2013 rates hearing process, Union Gas conducted settlement negotiations with its intervening parties. A settlement agreement was reached on most capital and rate base issues, and on all operating costs. That settlement agreement was accepted by the OEB on July 10, 2012. The unsettled issues, including operating revenue, cost of capital and rate design, are the subject of an OEB hearing that commenced on July 10, 2012. A decision on the unsettled issues is expected before the end of the year. 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. That application is expected to be filed in 2013.

Southeast Supply Header, LLC (SESH). SESH operates under rates approved by the FERC in 2008. That order required SESH to file a Cost and Revenue Study at the end of three years of operations. SESH filed the Cost and Revenue Study on September 6, 2011 and the FERC accepted the filing on July 26, 2012. There was no change to the currently effective rates.

4. Income Taxes

Income tax expense from continuing operations for the three months ended June 30, 2012 was $80 million, compared to $125 million for the same period in 2011. Income tax expense from continuing operations for the six months ended June 30, 2012 was $217 million, compared to $264 million reported for the same period in 2011. The lower income tax expense for the periods resulted from lower earnings from continuing operations and a lower Canadian effective tax rate, partially offset by favorable tax adjustments in 2011.

The effective tax rate for income from continuing operations for the three months ended June 30, 2012 and 2011 were 25% compared to 30%, respectively, and were 27% and 28% for the six-month periods. The lower effective tax rates were primarily due to a lower Canadian effective tax rate.

No material net change in uncertain tax positions was recognized during the six months ended June 30, 2012. Although uncertain, we believe it is reasonably possible that the total amount of uncertain tax positions could increase by approximately $14 million prior to June 30, 2013. The anticipated changes in unrecognized tax benefits relate to expiration of statutes of limitation and expected audit settlements.

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 June 30, 2012
Other	$	42	$	—	$	—	$	—
Total consolidated	$	42	$	—	$	—	$	—
Three Months Ended June 30, 2011
Other	$	48	$	15	$	6	$	9
Total consolidated	$	48	$	15	$	6	$	9
Six Months Ended June 30, 2012
Other	$	99	$	3	$	1	$	2
Total consolidated	$	99	$	3	$	1	$	2
Six Months Ended June 30, 2011
Other	$	132	$	25	$	9	$	16
Total consolidated	$	132	$	25	$	9	$	16

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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 include the effect of certain options and restricted stock awards. Certain other options related to approximately five million shares for both the three and six-month periods ended June 30, 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 June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(in millions, except per-share amounts)
Income from continuing operations, net of tax—controlling interests	$	215	$	275	$	546	$	625
Income from discontinued operations, net of tax—controlling interests		—		9		2		16
Net income—controlling interests	$	215	$	284	$	548	$	641
Weighted-average common shares outstanding
Basic		653		650		652		650
Diluted		655		652		655		652
Basic earnings per common share (a)
Continuing operations	$	0.33	$	0.42	$	0.84	$	0.96
Discontinued operations, net of tax		—		0.02		—		0.03
Total basic earnings per common share	$	0.33	$	0.44	$	0.84	$	0.99
Diluted earnings per common share (a)
Continuing operations	$	0.33	$	0.42	$	0.83	$	0.96
Discontinued operations, net of tax		—		0.02		0.01		0.02
Total diluted earnings per common share	$	0.33	$	0.44	$	0.84	$	0.98

(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:

	June 30, 2012		December 31, 2011
	(in millions)
Natural gas	$	164	$	263
NGLs		68		58
Materials and supplies		75		72
Total inventory	$	307	$	393

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An $8 million non-cash charge was recorded to Natural Gas and Petroleum Products Purchased on the Condensed Consolidated Statements of Operations ($6 million after tax) in the second quarter of 2012 to reduce propane and butane inventory as of June 30, 2012 at our Empress operations at Western Canada Transmission & Processing to estimated net realizable value.

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 June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(in millions)
Operating revenues	$	2,219	$	3,304	$	5,121	$	6,233
Operating expenses		1,998		2,957		4,692		5,712
Operating income		221		347		429		521
Net income		185		303		340		428
Net income attributable to members’ interests		132		277		276		410

DCP Midstream recorded gains on sales of common units of DCP Partners to equity in the first and second quarters of 2012 and the first quarter of 2011. Our proportionate 50% share, totaling $21 million and $1 million in the first and second quarters of 2012, respectively, and $14 million in the first quarter of 2011, 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. Purchases of propane under the settlement agreement, and subsequent sales to affiliates of DCP Midstream, ended during the second quarter of 2012.

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(in millions)
Sales of propane	$	42	$	48	$	99	$	132

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.

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AFS Securities. Estimated fair values of AFS securities follow:

	Estimated Fair Value
	June 30, 2012		December 31, 2011
	(in millions)
Corporate debt securities	$	11	$	18
Canadian government securities		—		14
Money market funds		1		3
Total available-for-sale investments	$	12	$	35

We had no restricted AFS securities classified as Current Assets—Other as of June 30, 2012 and $14 million as of December 31, 2011, and $1 million as of June 30, 2012 and $3 million December 31, 2011 classified as Investments and Other Assets—Other. These restricted funds are related to insurance.

At June 30, 2012, the weighted-average contractual maturity of outstanding AFS securities was one year.

There were no gross unrealized holding gains or losses associated with investments in AFS securities at June 30, 2012 or December 31, 2011.

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.

HTM Securities. Estimated fair values of HTM securities follow:

	Estimated Fair Value
	June 30, 2012		December 31, 2011
	(in millions)
Canadian government securities	$	111	$	107
Bankers acceptances		154		55
Total held-to-maturity investments	$	265	$	162

Restricted HTM marketable securities of $40 million as of June 30, 2012 are classified as Current Assets—Other, and $225 million as of June 30, 2012 and $162 million as of December 31, 2011 are classified as Investments and Other 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 have otherwise been available for distribution to the partners of M&N LP, were required to be placed in escrow until the balance in escrow was sufficient to fund all future debt service on the M&N LP notes. As of June 30, 2012, there were sufficient funds held in escrow to fund all future debt service on the M&N LP notes.

At June 30, 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 June 30, 2012 or December 31, 2011.

Other Restricted Funds. In addition to the AFS and HTM securities described above, we had restricted funds totaling $21 million at June 30, 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 related to additional amounts for the M&N LP debt service requirements and insurance.

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

10. Goodwill

We perform our goodwill impairment test annually and evaluate goodwill when events or changes in circumstances indicate that its carrying value may not be recoverable. We completed our annual goodwill impairment test as of April 1, 2012 and no impairments were identified.

We perform our annual review for goodwill impairment at the reporting unit level, which is identified by assessing whether the components of our operating segments constitute businesses for which discrete financial information is available, whether segment management regularly reviews the operating results of those components and whether the economic and regulatory characteristics are similar. We determined that our reporting units are equivalent to our reportable segments, except for the reporting units of our Western Canada Transmission & Processing reportable segment, which are one level below.

As permitted under new accounting guidance on testing goodwill for impairment, we performed either a qualitative assessment or a quantitative assessment of each of our reporting units based on management’s judgment. With respect to our qualitative assessments, we considered events and circumstances specific to us, such as macroeconomic conditions, industry and market considerations, cost factors and overall financial performance, when evaluating whether it was more likely than not that the fair values of our reporting units were less than their respective carrying amounts.

In connection with our quantitative assessments, we primarily used a discounted cash flow analysis to determine the fair values of those reporting units. Key assumptions in the determination of fair value included the use of an appropriate discount rate and estimated future cash flows. In estimating cash flows, we incorporated expected long-term growth rates in key markets served by our operations, regulatory stability, the ability to renew contracts, commodity prices (where appropriate), and foreign currency exchange rates, as well as other factors that affect our reporting units’ revenue, expense and capital expenditure projections.

11. Debt and Credit Facilities

Available Credit Facilities and Restrictive Debt Covenants

	Expiration Date		Total Credit Facilities Capacity		Outstanding at June 30, 2012						Available Credit Facilities Capacity
					Commercial Paper		Letters of Credit		Total
			(in millions)
Spectra Energy Capital, LLC (a)
Multi-year syndicated		2016	$	1,500	$	936	$	5	$	941	$	559
Westcoast Energy Inc. (b)
Multi-year syndicated		2016		295		—		—		—		295
Union Gas (c)
Multi-year syndicated		2016		393		97		—		97		296
Spectra Energy Partners (d)
Multi-year syndicated		2016		700		40		—		40		660
Total			$	2,888	$	1,073	$	5	$	1,078	$	1,810

(a) Credit facility contains a covenant requiring the Spectra Energy Corp consolidated debt-to-total capitalization ratio, as defined in the agreement, to not exceed 65%. This ratio was 58% at June 30, 2012.

(b) U.S. dollar equivalent at June 30, 2012. The credit facility is 300 million Canadian dollars and contains a covenant that requires the Westcoast Energy Inc. non-consolidated debt-to-total capitalization ratio to not exceed 75%. The ratio was 44% at June 30, 2012.

(c) U.S. dollar equivalent at June 30, 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 65% at June 30, 2012.

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(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 or less. As of June 30, 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 June 30, 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 June 30, 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 the 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 June 30, 2012.

12. 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	June 30, 2012
		Total		Level 1		Level 2		Level 3
		(in millions)
Corporate debt securities	Cash and cash equivalents	$	56	$	—	$	56	$	—
Corporate debt securities	Current assets—other		5		—		5		—
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		56		—		56		—
Money market funds	Investments and other assets—other		1		1		—		—
Total Assets		$	134	$	1	$	133	$	—
Derivative liabilities—natural gas purchase contracts	Deferred credits and other liabilities—regulatory and other	$	10	$	—	$	—	$	10
Derivative liabilities—interest rate swaps	Deferred credits and other liabilities—regulatory and other		14		—		14		—
Total Liabilities		$	24	$	—	$	14	$	10

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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 June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(in millions)
Long-term derivative assets (liabilities)
Fair value, beginning of period	$	(15	)	$	(6	)	$	(14	)	$	(6	)
Total realized/unrealized gains (losses):
Included in earnings		(1	)		—			—			(1	)
Included in other comprehensive income		5			(2	)		3			(1	)
Settlements		1			—			1			—
Fair value, end of period	$	(10	)	$	(8	)	$	(10	)	$	(8	)
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	)	$	(2	)	$	—		$	(5	)

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

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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.

	June 30, 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)		10,595		12,514		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 value of our long-term debt is 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, note receivable-noncurrent, 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.

13. 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 processing and 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 June 30, 2012, we had “pay floating—receive fixed” interest rate swaps outstanding with a total notional principal amount of $2,096 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.

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Other than interest rate swaps described above, we did not have any significant derivatives outstanding during the six months ended June 30, 2012.

14. 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 $13 million as of June 30, 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 June 30, 2012 or December 31, 2011 related to litigation.

Other Commitments and Contingencies

See Note 15 for a discussion of guarantees and indemnifications.

15. 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.

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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 June 30, 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 June 30, 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.

16. Employee Benefit Plans

Retirement Plans. We have a qualified non-contributory defined benefit (DB) retirement plan for most 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.

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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 $11 million to our U.S. retirement plans in the six months ended June 30, 2012 and $10 million in the same period in 2011. We made total contributions to the Canadian DC and qualified DB plans of $35 million during the six months ended June 30, 2012 and $36 million in the same period in 2011. We anticipate that we will make total contributions of approximately $25 million to the U.S. plans and approximately $95 million to the Canadian plans in 2012.

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(in millions)
U.S.
Service cost benefit earned	$	4		$	4		$	7		$	7
Interest cost on projected benefit obligation		6			7			12			13
Expected return on plan assets		(7	)		(8	)		(15	)		(16	)
Amortization of loss		3			2			7			5
Net periodic pension cost	$	6		$	5		$	11		$	9
Canada
Service cost benefit earned	$	6		$	6		$	13		$	11
Interest cost on projected benefit obligation		12			13			25			27
Expected return on plan assets		(14	)		(13	)		(29	)		(25	)
Amortization of loss		9			8			18			14
Amortization of prior service costs		1			1			1			1
Net periodic pension cost	$	14		$	15		$	28		$	28

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 June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(in millions)
U.S.
Interest cost on accumulated post-retirement benefit obligation	$	1		$	2		$	4		$	5
Expected return on plan assets		(1	)		(1	)		(2	)		(2	)
Amortization of loss		1			1			1			1
Net periodic other post-retirement benefit cost	$	1		$	2		$	3		$	4
Canada
Service cost benefit earned	$	2		$	1		$	4		$	2
Interest cost on accumulated post-retirement benefit obligation		1			2			3			4
Amortization of loss		1			—			1			—
Net periodic other post-retirement benefit cost	$	4		$	3		$	8		$	6

24

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 $3 million in both the three-month periods ended June 30, 2012 and 2011 and $7 million in both the six-month periods ended June 30, 2012 and 2011 for U.S. employees, and $3 million in both the three-month periods ended June 30, 2012 and 2011 and $6 million in both the six-month periods ended June 30, 2012 and 2011 for Canadian employees.

17. 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 June 30, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total operating revenues	$	—		$	—	$	1,112	$	—		$	1,112
Total operating expenses		6			—		740		—			746
Gains on sales of other assets and other, net		—			—		1		—			1
Operating income (loss)		(6	)		—		373		—			367
Equity in earnings of unconsolidated affiliates		—			—		91		—			91
Equity in earnings of subsidiaries		216			342		—		(558	)		—
Other income and expenses, net		—			1		17		—			18
Interest expense		—			48		107		—			155
Earnings from continuing operations before income taxes		210			295		374		(558	)		321
Income tax expense (benefit) from continuing operations		(6	)		79		7		—			80
Income from continuing operations		216			216		367		(558	)		241
Income (loss) from discontinued operations, net of tax		(1	)		—		1		—			—
Net income		215			216		368		(558	)		241
Net income—noncontrolling interests		—			—		26		—			26
Net income—controlling interests	$	215		$	216	$	342	$	(558	)	$	215

25

Spectra Energy Corp

Condensed Consolidating Statement of Operations

Three Months Ended June 30, 2011

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total operating revenues	$	—		$	—	$	1,188	$	—		$	1,188
Total operating expenses		(3	)		—		789		—			786
Operating income		3			—		399		—			402
Equity in earnings of unconsolidated affiliates		—			—		162		—			162
Equity in earnings of subsidiaries		282			425		—		(707	)		—
Other income and expenses, net		—			6		12		—			18
Interest expense		—			51		108		—			159
Earnings from continuing operations before income taxes		285			380		465		(707	)		423
Income tax expense from continuing operations		1			98		26		—			125
Income from continuing operations		284			282		439		(707	)		298
Income from discontinued operations, net of tax		—			—		9		—			9
Net income		284			282		448		(707	)		307
Net income—noncontrolling interests		—			—		23		—			23
Net income—controlling interests	$	284		$	282	$	425	$	(707	)	$	284

26

Spectra Energy Corp

Condensed Consolidating Statement of Operations

Six Months Ended June 30, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total operating revenues	$	—		$	—	$	2,657	$	(1	)	$	2,656
Total operating expenses		8			—		1,765		(1	)		1,772
Gains on sales of other assets and other, net		—			—		2		—			2
Operating income (loss)		(8	)		—		894		—			886
Equity in earnings of unconsolidated affiliates		—			—		209		—			209
Equity in earnings of subsidiaries		545			828		—		(1,373	)		—
Other income and expenses, net		(1	)		1		34		—			34
Interest expense		—			96		216		—			312
Earnings from continuing operations before income taxes		536			733		921		(1,373	)		817
Income tax expense (benefit) from continuing operations		(13	)		188		42		—			217
Income from continuing operations		549			545		879		(1,373	)		600
Income (loss) from discontinued operations, net of tax		(1	)		—		3		—			2
Net income		548			545		882		(1,373	)		602
Net income—noncontrolling interests		—			—		54		—			54
Net income—controlling interests	$	548		$	545	$	828	$	(1,373	)	$	548

27

Spectra Energy Corp

Condensed Consolidating Statement of Operations

Six Months Ended June 30, 2011

(Unaudited)

(In millions)

	Spectra Energy Corp		Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total operating revenues	$	—	$	—	$	2,800	$	—		$	2,800
Total operating expenses		—		—		1,845		—			1,845
Gains on sales of other assets and other, net		—		—		4		—			4
Operating income		—		—		959		—			959
Equity in earnings of unconsolidated affiliates		—		—		268		—			268
Equity in earnings of subsidiaries		641		935		—		(1,576	)		—
Other income and expenses, net		—		6		18		—			24
Interest expense		—		99		215		—			314
Earnings from continuing operations before income taxes		641		842		1,030		(1,576	)		937
Income tax expense from continuing operations		—		201		63		—			264
Income from continuing operations		641		641		967		(1,576	)		673
Income from discontinued operations, net of tax		—		—		16		—			16
Net income		641		641		983		(1,576	)		689
Net income—noncontrolling interests		—		—		48		—			48
Net income—controlling interests	$	641	$	641	$	935	$	(1,576	)	$	641

28

Spectra Energy Corp

Condensed Consolidating Statements of Comprehensive Income

(Unaudited)

(In millions)

	Spectra Energy Corp		Spectra Capital		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Three Months Ended June 30, 2012
Net income	$	215	$	216	$	368		$	(558	)	$	241
Other comprehensive income
Foreign currency translation adjustments		—		—		(133	)		—			(133	)
Unrealized mark-to-market net gain		—		—		3			—			3
Reclassification of cash flow hedges into earnings		—		—		2			—			2
Pension and benefits impact		3		—		15			—			18
Total other comprehensive income (loss)		3		—		(113	)		—			(110	)
Total comprehensive income, net of tax		218		216		255			(558	)		131
Less: comprehensive income—noncontrolling interests		—		—		24			—			24
Comprehensive income—controlling interests	$	218	$	216	$	231		$	(558	)	$	107
Three Months Ended June 30, 2011
Net income	$	284	$	282	$	448		$	(707	)	$	307
Other comprehensive income
Foreign currency translation adjustments		—		—		57			—			57
Unrealized mark-to-market net loss		—		—		(1	)		—			(1	)
Reclassification of cash flow hedges into earnings		—		—		2			—			2
Pension and benefits impact		2		—		5			—			7
Total other comprehensive income		2		—		63			—			65
Total comprehensive income, net of tax		286		282		511			(707	)		372
Less: comprehensive income—noncontrolling interests		—		—		24			—			24
Comprehensive income—controlling interests	$	286	$	282	$	487		$	(707	)	$	348

29

Spectra Energy Corp

Condensed Consolidating Statements of Comprehensive Income

(Unaudited)

(In millions)

	Spectra Energy Corp		Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Six Months Ended June 30, 2012
Net income	$	548	$	545	$	882	$	(1,373	)	$	602
Other comprehensive income
Foreign currency translation adjustments		—		—		29		—			29
Unrealized mark-to-market net gain		—		—		3		—			3
Reclassification of cash flow hedges into earnings		—		1		3		—			4
Pension and benefits impact		7		—		16		—			23
Total other comprehensive income		7		1		51		—			59
Total comprehensive income, net of tax		555		546		933		(1,373	)		661
Less: comprehensive income—noncontrolling interests		—		—		54		—			54
Comprehensive income—controlling interests	$	555	$	546	$	879	$	(1,373	)	$	607
Six Months Ended June 30, 2011
Net income	$	641	$	641	$	983	$	(1,576	)	$	689
Other comprehensive income
Foreign currency translation adjustments		—		—		248		—			248
Reclassification of cash flow hedges into earnings		—		—		5		—			5
Pension and benefits impact		4		—		11		—			15
Other		—		—		8		—			8
Total other comprehensive income		4		—		272		—			276
Total comprehensive income, net of tax		645		641		1,255		(1,576	)		965
Less: comprehensive income—noncontrolling interests		—		—		52		—			52
Comprehensive income—controlling interests	$	645	$	641	$	1,203	$	(1,576	)	$	913

30

Spectra Energy Corp

Condensed Consolidating Balance Sheet

June 30, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Cash and cash equivalents	$	—		$	1		$	126	$	—		$	127
Receivables (payables)—consolidated subsidiaries		62			(63	)		1		—			—
Receivables—other		3			—			712		—			715
Other current assets		36			12			505		—			553
Total current assets		101			(50	)		1,344		—			1,395
Investments in and loans to unconsolidated affiliates		—			71			2,011		—			2,082
Investments in consolidated subsidiaries		12,345			15,629			—		(27,974	)		—
Advances receivable (payable)—consolidated subsidiaries		(3,936	)		4,380			150		(594	)		—
Goodwill		—			—			4,435		—			4,435
Other assets		42			95			359		—			496
Property, plant and equipment, net		—			—			18,798		—			18,798
Regulatory assets and deferred debits		3			12			1,154		—			1,169
Total Assets	$	8,555		$	20,137		$	28,251	$	(28,568	)	$	28,375
Accounts payable—other	$	2		$	78		$	378	$	—		$	458
Short-term borrowings and commercial paper		—			1,530			137		(594	)		1,073
Accrued taxes payable (receivable)		—			—			72		—			72
Current maturities of long-term debt		—			495			535		—			1,030
Other current liabilities		45			103			663		—			811
Total current liabilities		47			2,206			1,785		(594	)		3,444
Long-term debt		—			2,809			6,823		—			9,632
Deferred credits and other liabilities		189			2,777			2,927		—			5,893
Preferred stock of subsidiaries		—			—			258		—			258
Equity
Controlling interests		8,319			12,345			15,629		(27,974	)		8,319
Noncontrolling interests		—			—			829		—			829
Total equity		8,319			12,345			16,458		(27,974	)		9,148
Total Liabilities and Equity	$	8,555		$	20,137		$	28,251	$	(28,568	)	$	28,375

31

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

32

Spectra Energy Corp

Condensed Consolidating Statements of Cash Flows

Six Months Ended June 30, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	548		$	545		$	882		$	(1,373	)	$	602
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		—			—			375			—			375
Equity in earnings of unconsolidated affiliates		—			—			(209	)		—			(209	)
Equity in earnings of subsidiaries		(545	)		(828	)		—			1,373			—
Distributions received from unconsolidated affiliates		—			—			197			—			197
Other		(66	)		153			107			—			194
Net cash provided by (used in) operating activities		(63	)		(130	)		1,352			—			1,159
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		—			—			(789	)		—			(789	)
Acquisitions		—			—			(30	)		—			(30	)
Purchases of held-to-maturity securities		—			—			(1,490	)		—			(1,490	)
Proceeds from sales and maturities of held-to-maturity securities		—			—			1,387			—			1,387
Proceeds from sales and maturities of available-for-sale securities		—			—			21			—			21
Distributions received from unconsolidated affiliates		—			—			11			—			11
Other changes in restricted funds		—			—			92			—			92
Other		—			—			6			—			6
Net cash used in investing activities		—			—			(792	)		—			(792	)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments for the redemption of long-term debt		—			—			(28	)		—			(28	)
Net increase (decrease) in short-term borrowings and commercial paper		—			184			(169	)		—			15
Distributions to noncontrolling interests		—			—			(56	)		—			(56	)
Dividends paid on common stock		(372	)		—			—			—			(372	)
Distributions and advances from (to) affiliates		409			(55	)		(354	)		—			—
Other		26			—			1			—			27
Net cash provided by (used in) financing activities		63			129			(606	)		—			(414	)
Effect of exchange rate changes on cash		—			—			—			—			—
Net decrease in cash and cash equivalents		—			(1	)		(46	)		—			(47	)
Cash and cash equivalents at beginning of period		—			2			172			—			174
Cash and cash equivalents at end of period	$	—		$	1		$	126		$	—		$	127

33

Spectra Energy Corp

Condensed Consolidating Statements of Cash Flows

Six Months Ended June 30, 2011

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	641		$	641		$	983		$	(1,576	)	$	689
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		—			—			359			—			359
Equity in earnings of unconsolidated affiliates		—			—			(268	)		—			(268	)
Equity in earnings of subsidiaries		(641	)		(935	)		—			1,576			—
Distributions received from unconsolidated affiliates		—			—			201			—			201
Other		(37	)		254			140			—			357
Net cash provided by (used in) operating activities		(37	)		(40	)		1,415			—			1,338
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		—			—			(739	)		—			(739	)
Investments in and loans to unconsolidated affiliates		—			—			(4	)		—			(4	)
Purchases of held-to-maturity securities		—			—			(763	)		—			(763	)
Proceeds from sales and maturities of held-to-maturity securities		—			—			733			—			733
Purchases of available-for-sale securities		—			—			(930	)		—			(930	)
Proceeds from sales and maturities of available-for-sale securities		—			—			1,119			—			1,119
Other changes in restricted funds		—			—			8			—			8
Other		—			—			5			—			5
Net cash used in investing activities		—			—			(571	)		—			(571	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt		—			—			805			—			805
Payments for the redemption of long-term debt		—			—			(494	)		—			(494	)
Net decrease in short-term borrowings and commercial paper		—			(132	)		(126	)		—			(258	)
Net increase in revolving credit facilities borrowings		—			—			(258	)		—			(258	)
Distributions to noncontrolling interests		—			—			(47	)		—			(47	)
Proceeds from the issuance of Spectra Energy Partners common units		—			—			213			—			213
Dividends paid on common stock		(341	)		—			—			—			(341	)
Distributions and advances from (to) affiliates		353			173			(526	)		—			—
Other		25			—			(6	)		—			19
Net cash provided by (used in) financing activities		37			41			(439	)		—			(361	)
Effect of exchange rate changes on cash		—			—			2			—			2
Net increase in cash and cash equivalents		—			1			407			—			408
Cash and cash equivalents at beginning of period		—			—			130			—			130
Cash and cash equivalents at end of period	$	—		$	1		$	537		$	—		$	538

34

18. New Accounting Pronouncements

There were no significant accounting pronouncements adopted during the six months ended June 30, 2012 that had a material impact on our consolidated results of operations, financial position or cash flows.

19. Subsequent Events

On July 17, 2012, Algonquin Gas Transmission, LLC (Algonquin), issued $350 million aggregate principal amount of 3.51% notes due in 2024. Net proceeds from the offering were used for general corporate purposes.

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 half of 2012, our earnings decreased compared to the same period in 2011 as a result of lower commodity prices at Field Services, extraordinarily warmer weather at Distribution, and higher NGL extraction premiums and lower NGL sales prices related to the Empress operations at Western Canada Transmission & Processing. However, 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.

For the three months ended June 30, 2012 and 2011, we reported net income from controlling interests of $215 million and $284 million, respectively. For the six months ended June 30, 2012 and 2011, we reported net income from controlling interests of $548 million and $641 million, respectively.

The highlights for the three months and six months ended June 30, 2012 include the following:

• U.S. Transmission’s earnings were lower mainly due to lower processing revenues, expected lower storage revenues and accelerated software amortization costs, partially offset by higher earnings from expansion projects,

• Distribution’s earnings decreased mostly due to lower customer usage as a result of warmer weather, a weaker Canadian dollar and expected lower storage revenues, partially offset by higher short-term transportation services and lower operating fuel costs,

• Western Canada Transmission & Processing earnings were lower as a result of lower earnings at the Empress NGL business due mainly to lower NGL sales prices and higher first quarter 2012 NGL extraction premiums, partially offset by higher gathering and processing earnings from expansions, and

• Field Services earnings decreased mostly due to lower commodity prices, partially offset by higher gathering and processing volumes from expansion projects and the absence of severe weather which restricted volumes in 2011, and a reduction in depreciation expense attributable to an increase in the remaining useful lives of fixed assets.

In the first six months of 2012, we had $789 million of capital and investment expenditures excluding the payment of $30 million of the purchase price previously withheld for the acquisition of Bobcat Gas Storage (Bobcat) in 2010, which we have classified as acquisition expenditures. We project approximately $2.4 billion of capital and investment expenditures for the full year, including expansion capital of approximately $1.7 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.

35

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 $1.9 billion of combined long-term debt and commercial paper, including the refinancing of approximately $500 million of long-term debt maturities. We have access to $1.8 billion available under our credit facilities as of June 30, 2012, to be utilized as needed for effective working capital management.

RESULTS OF OPERATIONS

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(in millions)
Operating revenues	$	1,112	$	1,188	$	2,656	$	2,800
Operating expenses		746		786		1,772		1,845
Gains on sales of other assets and other, net		1		—		2		4
Operating income		367		402		886		959
Other income and expenses		109		180		243		292
Interest expense		155		159		312		314
Earnings from continuing operations before income taxes		321		423		817		937
Income tax expense from continuing operations		80		125		217		264
Income from continuing operations		241		298		600		673
Income from discontinued operations, net of tax		—		9		2		16
Net income		241		307		602		689
Net income—noncontrolling interests		26		23		54		48
Net income—controlling interests	$	215	$	284	$	548	$	641

Three and Six Months Ended June 30, 2012 Compared to Same Periods in 2011

Operating Revenues. Operating revenues for the three and six months ended June 30, 2012 decreased by $76 million, or 6%, and $144 million, or 5%, respectively, compared to the same periods in 2011. The decreases were driven by:

• a decrease in customer usage of natural gas largely due to warmer weather and lower natural gas prices passed through to customers at Distribution,

• lower NGL sales volumes resulting from 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 in the first quarter of 2012 at Western Canada Transmission & Processing.

Operating Expenses. Operating expenses for the three and six months ended June 30, 2012 decreased by $40 million, or 5%, and $73 million, or 4%, respectively, compared to the same periods in 2011. The decreases were driven by:

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

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• the effects of a weaker Canadian dollar at Distribution and Western Canada Transmission & Processing, and

• lower volumes of make-up gas purchases at Empress as a result of lower NGL production due to warmer weather, and expected lower plant maintenance costs, partially offset by higher natural gas purchases for extraction due to volumes and increased costs due primarily to higher extraction premiums, both in the first quarter of 2012, at Western Canada Transmission & Processing.

Operating Income. Operating income for the three and six months ended June 30, 2012 decreased by $35 million, or 9%, and $73 million, or 8%, respectively, compared to the same periods in 2011. The decreases were attributable to lower customer usage of natural gas due to warmer weather at Distribution and lower NGL earnings mainly 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. Other income and expenses for the three and six months ended June 30, 2012 decreased by $71 million, or 39%, and $49 million, or 17%, respectively, compared to the same periods in 2011. The decreases were attributable to lower equity earnings from Field Services mostly due to lower commodity prices, partially offset by an increase in gathering and processing margins as a result of higher volumes due to expansions in 2012 and the impact of severe weather in the first quarter of 2011, and a reduction in depreciation expense attributable to an increase of the remaining useful lives of DCP Midstream’s gathering, transmission, processing, storage and other assets during the second quarter of 2012. In addition, the lower equity earnings from Field Services were slightly offset by higher allowance for funds used during construction (AFUDC) due to increased capital spending on expansion projects at Western Canada Transmission & Processing.

Income Tax Expense from Continuing Operations. Income tax expense from continuing operations for the three and six months ended June 30, 2012 decreased by $45 million and $47 million, respectively, compared to the same periods in 2011. The decreases were attributable to lower earnings from continuing operations and a lower Canadian effective tax rate, partially offset by favorable tax adjustments in 2011.

The effective tax rates for income from continuing operations for the three-month periods ended June 30, 2012 and June 30, 2011 were 25% and 30%, respectively, and 27% and 28% for six-month periods. The lower effective tax rates were primarily due to a lower Canadian effective tax rate.

Income from Discontinued Operations, Net of Tax. Income from discontinued operations, net of tax for the three and six months ended June 30, 2012 decreased by $9 million and $14 million, respectively, compared to the same periods in 2011. The decreases were primarily attributable to lower income from propane deliveries in 2012 as a result of a final settlement of these activities in the second quarter of 2012.

Net Income—Noncontrolling Interests. Net income from noncontrolling interests for the three and six months ended June 30, 2012 increased by $3 million and $6 million, respectively, compared to the same periods in 2011. The increases were 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.

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.

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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 June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(in millions)
U.S. Transmission	$	237		$	243		$	508		$	522
Distribution		75			88			226			255
Western Canada Transmission & Processing		94			113			232			254
Field Services		66			138			159			219
Total reportable segment EBIT		472			582			1,125			1,250
Other		(25	)		(29	)		(54	)		(53	)
Total reportable segment and other EBIT		447			553			1,071			1,197
Interest expense		155			159			312			314
Interest income and other (a)		29			29			58			54
Earnings from continuing operations before income taxes.	$	321		$	423		$	817		$	937

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

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 June 30,							Six Months Ended June 30,
	2012		2011		Increase   (Decrease)			2012		2011		Increase   (Decrease)
	(in millions, except where noted)
Operating revenues	$	464	$	457	$	7		$	959	$	940	$	19
Operating expenses
Operating, maintenance and other		162		156		6			319		302		17
Depreciation and amortization		71		67		4			141		134		7
Gains on sales of other assets and other, net		2		—		2			3		4		(1	)
Operating income		233		234		(1	)		502		508		(6	)
Other income and expenses		32		32		—			63		63		—
Noncontrolling interests		28		23		5			57		49		8
EBIT	$	237	$	243	$	(6	)	$	508	$	522	$	(14	)
Proportional throughput, TBtu (a)		612		623		(11	)		1,375		1,426		(51	)

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

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Three Months Ended June 30, 2012 Compared to Same Period in 2011

Operating Revenues. The $7 million increase was driven by:

• an $18 million increase from expansion projects and the acquisition of Big Sandy in July 2011, and

• a $4 million increase in recoveries of electric power and other costs passed through to customers, partially offset by

• an $8 million decrease in processing revenues associated with pipeline operations primarily due to lower prices, and

• a $7 million decrease from expected lower storage revenues.

Operating, Maintenance and Other. The $6 million increase was driven by:

• a $4 million increase in electric power and other costs passed through to customers, and

• a $4 million increase primarily due to accelerated software amortization costs.

Depreciation and Amortization. The $4 million increase was driven by expansion projects and the acquisition of Big Sandy.

Noncontrolling Interests. The $5 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.

EBIT. The $6 million decrease was mostly driven by lower processing revenues, expected lower storage revenues and accelerated software amortization costs, partially offset by increased earnings from expansions.

Six Months Ended June 30, 2012 Compared to Same Period in 2011

Operating Revenues. The $19 million increase was driven by:

• a $37 million increase from expansion projects and the acquisition of Big Sandy, and

• an $11 million increase in recoveries of electric power and other costs passed through to customers, partially offset by

• an $18 million decrease from expected lower storage revenues, lower rates on M&N LP and contract reductions at Ozark Gas Transmission L.L.C., and

• a $9 million decrease in processing revenues associated with pipeline operations caused by lower volumes and prices.

Operating, Maintenance and Other. The $17 million increase was driven by:

• a $10 million increase in electric power and other costs passed through to customers, and

• an $8 million increase primarily due to accelerated software amortization costs.

Depreciation and Amortization. The $7 million increase was driven by expansion projects and the acquisition of Big Sandy.

Noncontrolling Interests. The $8 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.

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EBIT. The $14 million decrease was driven by lower processing revenues, expected lower storage revenues, lower rates at M&N LP, contract reductions at Ozark Gas Transmission, L.L.C. and accelerated software amortization costs, partially offset by increased earnings from expansions.

Distribution

	Three Months Ended June 30,							Six Months Ended June 30,
	2012		2011		Increase   (Decrease)			2012		2011		Increase   (Decrease)
	(in millions, except where noted)
Operating revenues	$	322	$	375	$	(53	)	$	919	$	1,071	$	(152	)
Operating expenses
Natural gas purchased		89		127		(38	)		375		496		(121	)
Operating, maintenance and other		106		107		(1	)		213		214		(1	)
Depreciation and amortization		52		53		(1	)		105		106		(1	)
EBIT	$	75	$	88	$	(13	)	$	226	$	255	$	(29	)
Number of customers, thousands									1,367		1,348		19
Heating degree days, Fahrenheit		807		930		(123	)		3,699		4,702		(1,003	)
Pipeline throughput, TBtu		159		156		3			426		487		(61	)
Canadian dollar exchange rate, average		1.01		0.97		0.04			1.01		0.98		0.03

Three Months Ended June 30, 2012 Compared to Same Period in 2011

Operating Revenues. The $53 million decrease was driven by:

• a $27 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,

• a $14 million decrease in customer usage of natural gas primarily due to weather that was more than 13% warmer than in 2011,

• a $14 million decrease resulting from a weaker Canadian dollar, and

• a $7 million decrease primarily due to lower short-term storage revenues as a result of an unfavorable regulatory decision affecting 2010 and 2011 storage revenues, partially offset by

• a $7 million increase in short-term transportation service.

Natural Gas Purchased. The $38 million decrease was driven by:

• a $27 million decrease from lower natural gas prices passed through to customers,

• an $11 million decrease due to lower volumes of natural gas sold primarily due to warmer weather, and

• a $4 million decrease resulting from a weaker Canadian dollar.

Operating, maintenance and other. The $1 million decrease was driven by:

• a $5 million decrease resulting from a weaker Canadian dollar, partially offset by

• a $4 million increase in operating costs.

EBIT. The $13 million decrease was mostly the result of lower short-term storage revenues, a weaker Canadian dollar and lower customer usage due to warmer weather, partially offset by higher short-term transportation services.

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Six Months Ended June 30, 2012 Compared to Same Period in 2011

Operating Revenues. The $152 million decrease was driven by:

• a $99 million decrease in customer usage of natural gas primarily due to weather that was more than 21% warmer than in 2011,

• a $42 million decrease from lower natural gas prices passed through to customers. Prices charged to customers are adjusted quarterly based on the 12 month NYMEX forecast,

• a $23 million decrease resulting from a weaker Canadian dollar, and

• a $9 million decrease primarily due to lower short-term storage revenues as a result of an unfavorable regulatory decision affecting 2010 and 2011 storage revenues, partially offset by

• an $11 million increase in short-term transportation service.

• an $8 million increase from growth in the number of customers.

Natural Gas Purchased. The $121 million decrease was driven by:

• a $70 million decrease due to lower volumes of natural gas sold primarily due to warmer weather,

• a $42 million decrease from lower natural gas prices passed through to customers,

• an $8 million decrease resulting from a weaker Canadian dollar, and

• a $6 million decrease in operating fuel costs, partially offset by

• a $5 million increase from growth in the number of customers.

Operating, maintenance and other. The $1 million decrease was driven by:

• a $6 million decrease resulting from a weaker Canadian dollar, partially offset by

• a $5 million increase in operating costs.

EBIT. The $29 million decrease was largely the result of lower customer usage due to warmer weather, a weaker Canadian dollar and lower short-term storage revenue, partially offset by higher short-term transportation services and lower operating fuel costs.

Western Canada Transmission & Processing

	Three Months Ended June 30,							Six Months Ended June 30,
	2012		2011		Increase (Decrease)			2012		2011		Increase (Decrease)
	(in millions, except where noted)
Operating revenues	$	329	$	371	$	(42	)	$	795	$	810	$	(15	)
Operating expenses
Natural gas and petroleum products purchased		62		67		(5	)		223		189		34
Operating, maintenance and other		133		147		(14	)		264		280		(16	)
Depreciation and amortization		48		48		—			95		94		1
Operating income		86		109		(23	)		213		247		(34	)
Other income and expenses		8		4		4			19		7		12
EBIT	$	94	$	113	$	(19	)	$	232	$	254	$	(22	)
Pipeline throughput, TBtu		155		166		(11	)		332		349		(17	)
Volumes processed, TBtu		160		174		(14	)		339		350		(11	)
Empress inlet volumes, TBtu		109		129		(20	)		280		310		(30	)
Canadian dollar exchange rate, average		1.01		0.97		0.04			1.01		0.98		0.03

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Three Months Ended June 30, 2012 Compared to Same Period in 2011

Operating Revenues. The $42 million decrease was driven by:

• a $22 million decrease due to lower NGL sales prices associated with the Empress operations,

• a $14 million decrease due to lower NGL sales volumes associated with the Empress operations primarily as a result of warmer weather, and

• a $14 million decrease as a result of a weaker Canadian dollar, partially offset by

• a $9 million increase in gathering and processing revenues primarily due to contracted volumes from expansions associated with non-conventional supply discoveries in the Fort Nelson area.

Natural Gas and Petroleum Products Purchased. The $5 million decrease was driven by:

• a $5 million decrease in natural gas purchases for extraction at Empress, primarily due to decreased volumes,

• a $5 million decrease due primarily to lower volumes of make-up gas purchases at Empress as a result of lower NGL production, and

• a $3 million decrease due to a weaker Canadian dollar, partially offset by

• an $8 million non-cash charge in the second quarter of 2012 to reduce the book value of propane and butane inventory at our Empress operations to estimated net realizable value.

Operating, Maintenance and Other. The $14 million decrease was driven by:

• a $17 million decrease due primarily to expected plant maintenance costs in the second quarter of 2011 that did not recur in the 2012 period, and

• a $6 million decrease due to a weaker Canadian dollar, partially offset by

• a $5 million increase in project development costs.

Other Income and Expenses. The $4 million increase was driven primarily by higher AFUDC resulting from increased capital spending on expansion projects.

EBIT. The $19 million decrease was driven by lower earnings at the Empress NGL business due mainly to lower NGL sales prices and an adjustment to reduce the book value of propane and butane inventory, both driven by lower commodity prices. This was partially offset by improved results in the gathering and processing business, mainly driven by higher contracted volumes from expansions in the Horn River area of British Columbia and expected lower plant maintenance costs.

Six Months Ended June 30, 2012 Compared to Same Period in 2011

Operating Revenues. The $15 million decrease was driven by:

• a $35 million decrease due to lower NGL sales prices associated with the Empress operations,

• a $27 million decrease due to lower NGL sales volumes associated with the Empress operations primarily as a result of warmer weather, and

• a $21 million decrease as a result of a weaker Canadian dollar, substantially offset by

• a $27 million increase in gathering and processing revenues due primarily to contracted volumes from expansions associated with non-conventional supply discoveries in the Fort Nelson area,

• a $24 million increase due primarily to higher sales volumes of residual natural gas at the Empress operations,

• an $11 million increase in transmission revenue, and

• a $5 million increase from recovery of carbon and other non-income tax expense from customers.

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Natural Gas and Petroleum Products Purchased. The $34 million increase was driven by:

• a $31 million increase in natural gas purchases for extraction at Empress primarily due to increased volumes,

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

• an $8 million non-cash charge to reduce the book value of propane and butane inventory at our Empress operations as described above, partially offset by

• a $13 million decrease due primarily to lower volumes of make-up gas purchases at Empress as a result of lower NGL production, and

• a $5 million decrease due to a weaker Canadian dollar.

Operating, Maintenance and Other. The $16 million decrease was driven by:

• a $16 million decrease due primarily to expected plant turnaround costs in the second quarter of 2011 that did not recur in the 2012 period, and

• an $8 million decrease due to a weaker Canadian dollar, partially offset by

• a $5 million increase in project development costs, and

• a $5 million increase in carbon and other non-income tax expense.

Other Income and Expenses. The $12 million increase was driven primarily by higher AFUDC resulting from increased capital spending on expansion projects.

EBIT. The $22 million decrease was driven by lower earnings at the Empress NGL business, including an adjustment to reduce the book value of propane and butane inventory, partially offset by higher gathering and processing earnings from expansions.

Matters Affecting Future Western Canada Transmission & Processing Results

An $8 million non-cash charge ($6 million after tax) was recorded in the second quarter of 2012 to reduce the book value of propane and butane inventory as of June 30, 2012 at our Empress operations to estimated net realizable value. If estimated future prices for propane and butane increase by December 31, 2012, write-downs previously recorded, in part or in full, may be reversed. Conversely, if estimated future prices were to decline further, additional write-downs could be required on volumes held at June 30, 2012 or produced during the remainder of 2012.

Field Services

	Three Months Ended June 30,							Six Months Ended June 30,
	2012		2011		Increase (Decrease)			2012		2011		Increase (Decrease)
	(in millions, except where noted)
Equity in earnings of unconsolidated affiliates	$	66	$	138	$	(72	)	$	159	$	219	$	(60	)
EBIT	$	66	$	138	$	(72	)	$	159	$	219	$	(60	)
Natural gas gathered and processed/transported, TBtu/d (a,b)		7.0		6.9		0.1			7.1		6.8		0.3
NGL production, MBbl/d (a,c)		392		377		15			402		367		35
Average natural gas price per MMBtu (d)	$	2.22	$	4.31	$	(2.09	)	$	2.48	$	4.21	$	(1.73	)
Average NGL price per gallon (e)	$	0.77	$	1.24	$	(0.47	)	$	0.89	$	1.19	$	(0.30	)
Average crude oil price per barrel (f)	$	93.46	$	102.56	$	(9.10	)	$	98.15	$	98.33	$	(0.18	)

(a) Reflects 100% of volumes.

(b) Trillion British thermal units per day.

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(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.

Three Months Ended June 30, 2012 Compared to Same Period in 2011

EBIT. Lower equity earnings of $72 million were mainly the result of the following variances, each representing our 50% ownership portion of the earnings drivers at DCP Midstream:

• a $92 million decrease from commodity-sensitive processing arrangements due to decreased commodity prices, and

• an $18 million decrease attributable to unfavorable results from NGL and gas marketing, partially offset by

• a $22 million increase due to lower operating expenses primarily attributable to decreased depreciation expense as a result of changes to the remaining useful lives of DCP Midstream’s gathering, transmission, processing, storage and other assets during the second quarter of 2012. The key contributing factor to the change is an increase in estimated remaining economically recoverable commodity reserves, resulting from advances in extraction processes as well as improved technology used to locate reserves,

• a $9 million increase in gathering and processing volumes, attributable to expansion projects and growth across certain geographic regions.

Six Months Ended June 30, 2012 Compared to Same Period in 2011

EBIT. Lower equity earnings of $60 million were mainly the result of the following variances, each representing our 50% ownership portion of the earnings drivers at DCP Midstream:

• a $116 million decrease from commodity-sensitive processing arrangements due to decreased commodity prices, and

• a $14 million decrease attributable to unfavorable results from NGL and gas marketing, partially offset by

• a $37 million increase in gathering and processing volumes, as a result of expansion projects and growth across certain geographic regions and the absence of severe weather which caused wellhead freeze-offs which shut in gas wells and reduced recoveries in 2011,

• a $16 million increase due to lower operating expenses primarily attributable to decreased depreciation expense as a result of changes to the remaining useful lives of DCP Midstream’s gathering, transmission, processing, storage and other assets during the second quarter of 2012 as described above.

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

• a $7 million increase in earnings from DCP Partners as a result of mark-to-market gains on derivative instruments used to protect distributable cash flows and decreased depreciation expense as a result of an adjustment to the remaining useful lives of DCP Partners’ gathering, transmission, processing, storage and other assets during the second quarter of 2012 as described above.

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Other

	Three Months Ended June 30,								Six Months Ended June 30,
	2012			2011			Increase (Decrease)		2012			2011			Increase (Decrease)
	(in millions)
Operating revenues	$	19		$	16		$	3	$	40		$	33		$	7
Operating expenses		44			44			—		93			83			10
Operating loss		(25	)		(28	)		3		(53	)		(50	)		(3	)
Other income and expenses		—			(1	)		1		(1	)		(3	)		2
EBIT	$	(25	)	$	(29	)	$	4	$	(54	)	$	(53	)	$	(1	)

Three Months Ended June 30, 2012 Compared to Same Period in 2011

EBIT. The $4 million increase in EBIT reflects lower corporate costs.

Six Months Ended June 30, 2012 Compared to Same Period in 2011

EBIT. The EBIT results are comparable period over period.

Impairment of Goodwill

As permitted under new accounting guidance on testing goodwill for impairment, we performed either a qualitative assessment or a quantitative assessment of each of our reporting units based on management’s judgment. With respect to our qualitative assessments, we considered events and circumstances specific to us, such as macroeconomic conditions, industry and market considerations, cost factors and overall financial performance, when evaluating whether it was more likely than not that the fair values of our reporting units were less than their respective carrying amounts.

In connection with our quantitative assessments, we primarily used a discounted cash flow analysis to determine fair values of those reporting units. The long-term growth rates used for the reporting units that we quantitatively assessed reflect continued expansion of our assets, driven by new natural gas supplies such as shale gas in North America and increasing demand for natural gas transportation capacity on our pipeline systems primarily as a result of forecasted growth in natural gas-fired power plants. We assumed a weighted average long-term growth rate of 2.9% for our 2012 quantitative goodwill impairment analysis. Had we assumed a 100 basis point lower growth rate for each of the reporting units that we quantitatively assessed, there would have been no impairment of goodwill. We continue to monitor the effects of the global economic downturn with respect to the long-term cost of capital utilized to calculate our reporting units’ fair values. For our 2012 quantitative goodwill impairment analysis, we assumed weighted-average costs of capital ranging from 5.5% to 6.3% that market participants would use. Had we assumed a 100 basis point increase in the weighted-average cost of capital for each of the reporting units that we quantitatively assessed, there would have been no impairment of goodwill. For our regulated businesses in Canada, if an increase in the cost of capital occurred, we assumed that the effect on the corresponding reporting unit’s fair value would be ultimately offset by a similar increase in the reporting unit’s regulated revenues since those rates include a component that is based on the reporting unit’s cost of capital.

Based on the results of our annual impairment testing, no indicators of impairment were noted and the fair values of the reporting units that we quantitatively assessed at April 1, 2012 (our testing date) were substantially in excess of their respective carrying values. No triggering events or changes in circumstances occurred during the period April 1, 2012 through June 30, 2012 that would warrant re-testing for goodwill impairment.

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LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2012, we had negative working capital of $2,049 million. This balance includes short-term borrowings and commercial paper totaling $1,073 million and current maturities of long-term debt of $1,030 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 $1.8 billion available at June 30, 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 short-term working capital fluctuations. At Spectra Capital, Spectra Energy Partners and Westcoast, we primarily use commercial paper for temporary funding of 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 11 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 $179 million to $1,159 million for the six months ended June 30, 2012 compared to the same period in 2011, driven mostly 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 $221 million to $792 million in the first six 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, increased capital expenditures and payment in 2012 of $30 million previously withheld from the purchase price consideration of the acquisition of Bobcat in 2010.

	Six Months Ended June 30,
	2012		2011
	(in millions)
Capital and Investment Expenditures
U.S. Transmission (a)	$	335	$	294
Distribution		96		117
Western Canada Transmission & Processing		327		313
Other		31		19
Total	$	789	$	743

(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 six months ended June 30, 2012 consisted of $530 million for expansion projects and $259 million for maintenance and other projects.

We project 2012 capital and investment expenditures of approximately $2.4 billion, consisting of approximately $1.2 billion for U.S. Transmission, $0.3 billion for Distribution and $0.9 billion for Western Canada Transmission & Processing. Total projected 2012 capital and investment expenditures include approximately $1.7 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 Condensed Consolidated Financial Statements for further discussion.

Net cash used in financing activities totaled $414 million in the first six months of 2012 compared to $361 million used in the first six months of 2011. This change was driven by:

• proceeds of $213 million in 2011 from the issuance of Spectra Energy Partners’ common units used to fund a portion of the acquisition of Big Sandy in July 2011,

• $28 million of net debt retirements in 2012 compared to $53 million of net debt issuances, including net revolving credit facility borrowings, in 2011, and

• a $31 million increase in dividends paid on common stock in 2012, driven primarily by higher per-share dividend rates, partially offset by

• a $15 million increase in short-term borrowings and commercial paper outstanding in 2012 compared to a $258 million decrease in the 2011 period.

Available Credit Facilities and Restrictive Debt Covenants. See Note 11 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 June 30, 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 June 30, 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 June 30, 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.

47

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 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 July 9, 2012 and will be paid on September 10, 2012.

Other Financing Matters. On July 17, 2012, Algonquin issued $350 million aggregate principal amount of 3.51% notes due in 2024. Net proceeds from the offering were used for general corporate purposes.

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 June 30, 2012, certain of our subsidiaries in Canada have 1.2 billion Canadian dollars (approximately $1.2 billion) available for issuance in the Canadian market under debt shelf prospectuses that expire in October 2012. These subsidiaries intend to replace their expiring debt shelf prospectuses with similar prospectuses.

OTHER ISSUES

New Accounting Pronouncements. There were no significant accounting pronouncements adopted during the six months ended June 30, 2012 that had a material impact on our consolidated results of operations, financial position or cash flows.

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 June 30, 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.

48

Changes in Internal Control over Financial Reporting

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 June 30, 2012 and found no change 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 14 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.

49

(a) Exhibits

Exhibit Number
3.1	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Spectra Energy Corp (filed as Exhibit No. 3.1 to Form 8-K of Spectra Energy Corp on May 7, 2012).
3.2	Second Amended and Restated By-Laws of Spectra Energy Corp (filed as Exhibit No. 3.2 to Form 8-K of Spectra Energy Corp on May 7, 2012).
*10.1	Spectra Energy Corp Executive Savings Plan, as amended and restated.
*10.2	Spectra Energy Corp Directors’ Savings Plan, as amended and restated.
*10.3	Spectra Energy Corp Executive Cash Balance Plan, as amended and restated.
*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.

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: August 8, 2012	/s/    Gregory L. Ebel
	Gregory L. Ebel
	President and Chief Executive Officer
Date: August 8, 2012	/s/    J. Patrick Reddy
	J. Patrick Reddy
	Chief Financial Officer

50

EX-10.1

EXHIBIT 10.1

SPECTRA ENERGY CORP

EXECUTIVE SAVINGS PLAN

(As Amended and Restated Effective as of May 1, 2012)

TABLE OF CONTENTS

ARTICLE I TITLE AND EFFECTIVE DATE		1
1.1	Name of Plan	1
1.2	Effective Date	1
ARTICLE II DEFINITIONS		1
ARTICLE III ELIGIBILITY		4
3.1	General	4
3.2	Eligibility Under Predecessor Plan	4
ARTICLE IV PARTICIPANT DEFERRALS/COMPANY CREDITS		4
4.1	Base Pay Deferrals	4
4.2	Incentive Plan Deferrals	5
4.3	Automatic Deferral Election	5
4.4	Deferrals of Stock Awards	6
4.5	Dividend Equivalents Deferrals	6
4.6	Retirement Savings Plan - Excess Matching Contribution	7
4.7	Elections	7
ARTICLE V ASSUMED AMOUNTS AND FORMER PLANS		7
5.1	Assumed Amounts	7
5.2	Former Plans	8
ARTICLE VI ACCOUNTS		8
6.1	Maintenance of Participant Accounts	8
6.2	Phantom Investment Options Generally	8
6.3	Company Matching Contributions Subaccount	8
6.4	Subaccount for Deferrals of Stock Awards	9
6.5	Assumed Amounts	9
6.6	Adjustments Duke Energy Common Stock Fund	10
6.7	Transfer Elections	10
6.8	Corporate Transactions	11
ARTICLE VII BENEFITS		11
7.1	Termination of Employment	11
7.2	Election of Payment Option	11
7.3	Payment Options	12
7.4	Payments After Death	13
7.5	Small Payments	13
7.6	Form of Payment	13
7.7	Acceleration of Payment in the Event of Hardship	13
7.8	In-Service Distribution Coupled with Ten Percent Forfeiture	13
ARTICLE VIII BENEFICIARY		14
8.1	Designation of Beneficiary	14
8.2	Designation by Beneficiary	14
8.3	Discharge of Obligations	14
8.4	Payment to Minors and Incapacitated Persons	14
ARTICLE IX NATURE OF COMPANY’S OBLIGATION		14
9.1	Unsecured Promise	14
9.2	No Right to Specific Assets	14
9.3	Plan Provisions	14
ARTICLE X TERMINATION, AMENDMENT, MODIFICATION OR SUPPLEMENTATION OF PLAN		15
10.1	Right to Terminate and Amend	15

ARTICLE XI RESTRICTIONS ON ALIENATION OF BENEFITS		15
11.1	No Assignment	15
11.2	Domestic Relations Order	15
ARTICLE XII ADMINISTRATION		15
12.1	“Top-Hat” Plan	15
12.2	Named Fiduciary	16
12.3	Plan Administrator	16
ARTICLE XIII CLAIMS PROCEDURE		16
13.1	Claim	16
13.2	Written Claim	16
13.3	Committee Determination	16
13.4	Notice of Determination	16
13.5	Appeal	17
13.6	Request for Review	17
13.7	Determination of Appeal	17
13.8	Hearing	17
13.9	Decision	17
13.10	Exhaustion of Appeals	17
13.11	Committee’s Authority	18
ARTICLE XIV GENERAL PROVISIONS		18
14.1	No Right to Employment	18
14.2	Withholding	18
14.3	Section 16	18
14.4	Governing Law	18
14.5	Compliance With Section 409A	18

SPECTRA ENERGY CORP

EXECUTIVE SAVINGS PLAN

PURPOSE

The purposes of this Plan are (i) to provide deferred compensation for a select group of management or highly compensated employees and (ii) to provide for the payment of certain amounts deferred under the predecessor Duke Energy Corporation Executive Savings Plans I and II. This Plan is intended to be a nonqualified, unfunded plan of deferred compensation for a select group of management or highly compensated employees that qualifies as a top-hat plan that is exempt from substantially all of the requirements of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and shall be so interpreted and administered.

ARTICLE I

TITLE AND EFFECTIVE DATE

1.1 Name of Plan. This Plan shall be known as the Spectra Energy Corp Executive Savings Plan (hereinafter referred to as “Plan”).

1.2 Effective Date. The Plan was first effective as of the Distribution Date (as defined below), and is hereby amended and restated effective as of May 1, 2012.

ARTICLE II

DEFINITIONS

2.1 “Account” shall mean the record of deferrals and contributions and adjustments thereto maintained with respect to each Participant pursuant to Article VI.

2.2 “Automatic Deferral Compensation” shall mean an amount equal to: (i) the Maximum RSP Deferral Limitation for a Plan Year, divided by (ii) the “Maximum Matching Contribution Percentage” (as such term is defined in the RSP) for such Plan Year.

2.3 “Automatic Deferral Election” shall mean the deferral election made by a Participant pursuant to Section 4.3.

2.4 “Automatic Deferral Election Date” shall mean the last day of the second Plan Year preceding the Plan Year to which a Participant’s Automatic Deferral Election applies. For example, the Automatic Deferral Election Date applicable to an Automatic Deferral Election for the 2011 Plan Year is December 31, 2009.

2.5 “Base Pay” shall mean, for each Participant, the base salary as defined by the Company’s normal payroll practices and procedures, paid during a Plan Year (or which would have been paid during a Plan Year but for salary reductions and elective deferrals under Code Sections 125 and 401(k) and Base Pay deferrals under this Plan). In no event shall Base Pay include any compensation, whether paid or deferred, pursuant to Incentive Plans.

2.6 “Beneficiary” means the person or persons designated by a Participant, or by another person entitled to receive benefits hereunder, to receive benefits following the death of such person.

2.7 “Board” shall mean the Board of Directors of Spectra Energy Corp.

2.8 “Change in Control” shall be deemed to have occurred upon:

(i) an acquisition subsequent to the Distribution Date by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (A) the then outstanding shares of common stock of Spectra Energy Corp (B) the combined voting power of the then outstanding voting securities of Spectra Energy Corp entitled to vote generally in the election of directors; excluding, however, the following: (1) any acquisition directly from Spectra Energy Corp, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from Spectra Energy Corp, (2) any acquisition by Spectra Energy Corp and (3) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by Spectra Energy Corp or its affiliated companies;

(ii) during any period of two (2) consecutive years (not including any period prior to the Distribution Date), individuals who at the beginning of such period constitute the Board (and any new directors whose election by the Board or nomination for election by the Spectra Energy Corp’s shareholders was approved by a vote of at least 2/3 of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was so approved) cease for any reason (except for death, disability or voluntary retirement) to constitute a majority thereof;

(iii) the consummation, after the Distribution Date, of a merger, consolidation, reorganization or similar corporate transaction which has been approved by the shareholders of Spectra Energy Corp, whether or not Spectra Energy Corp is the surviving corporation in such transaction, other than a merger, consolidation, or reorganization that would result in the voting securities of Spectra Energy Corp outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the combined voting power of the voting securities of Spectra Energy Corp (or such surviving entity) outstanding immediately after such merger, consolidation or reorganization; or

(iv) the consummation, after the Distribution Date, of (A) the sale or other disposition of all or substantially all of the assets of Spectra Energy Corp or (B) a complete liquidation or dissolution of Spectra Energy Corp, which has been approved by the shareholders of Spectra Energy Corp;

provided that in no event shall a Change in Control be deemed to have occurred by reason of any of the events resulting from the separation transaction pursuant to which Spectra Energy Corp becomes a separate publicly-held corporation for the first time.

2.9 “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

2.10 “Committee” shall mean the Compensation Committee of the Board or its delegate.

2.11 “Company” shall mean Spectra Energy Corp and its affiliated companies.

2.12 “Company Matching Subaccount” shall mean the subaccount established and maintained pursuant to Section 6.3.

2.13 “Distribution Date” has the meaning given such term in the Separation and Distribution Agreement by and between Duke Energy Corporation and Spectra Energy Corp.

2.14 “Duke” means Duke Energy Corporation.

2.15 “Duke Energy Common Stock Fund” shall mean the Duke Energy Corporation Retirement Savings Plan investment option that invests primarily in Duke Energy Corporation common stock.

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Effective as of January 1, 2010, the Duke Energy Common Stock Fund was no longer available as an investment option under the Plan, and all amounts allocated thereto as of December 31, 2009 were reallocated to the Vanguard Prime Money Market Fund phantom investment option made available by the Committee pursuant to Section 6.2.

2.16 “Election Date” with respect to a Plan Year shall mean the last day of the preceding Plan Year. The Election Date for the Plan Year in which a Participant initially becomes eligible under the Plan under Section 3.1 shall be a date no later than 30 days after such individual is designated as eligible to participate in the Plan.

2.17 “Employee” shall mean an individual employed by the Company.

2.18 “ESP Eligible Earnings” shall mean “Eligible Earnings” (as such term is defined in the RSP), but determined without regard to the compensation limitation under Section 401(a)(17) of the Code, plus any Base Pay deferrals and Incentive Plan deferrals pursuant to Sections 4.1, 4.2 and 4.3.

2.19 “General Account” shall mean that portion of a Participant’s Account that is not in a Subaccount.

2.20 “Incentive Plans” shall mean the executive incentive compensation or bonus plans sponsored by the Company which are designated as Incentive Plans by the Committee from time to time, and shall include, without limitation, the Spectra Energy Corp Short Term Incentive Plan, and any special bonuses that are both earned and paid during a Plan Year.

2.21 “KEDCP” shall mean the Panhandle Eastern Corporation Key Executive Deferred Compensation Plan, as amended and restated effective January 1, 1996.

2.22 “Maximum RSP Deferral Limitation” shall mean the maximum amount of before tax contributions that may be contributed to the RSP under Section 402(g) of the Code for a Plan Year, plus, to the extent applicable to the Participant, the maximum amount of “catch-up” contributions that may be contributed to the RSP under Section 414(v) of the Code for the Plan Year.

2.23 “Participant” shall mean any Employee for whom an Account is maintained under the Plan. However for the purposes of Article IV, the term Participant shall mean only those Participants who remain eligible to participate in the Plan.

2.24 “Plan” shall mean the Spectra Energy Corp Executive Savings Plan.

2.25 “Plan Year” shall mean the calendar year.

2.26 “RSP” shall mean the Spectra Energy Corp Retirement Savings Plan.

2.27 “RSP Investment Options” shall mean the various investment funds in which participants in the RSP can elect to have their RSP account balances invested.

2.28 “Spectra Energy Common Stock - Stock Deferrals Subaccount” shall mean the subaccount established and maintained pursuant to Section 6.4.

2.29 “Spectra Energy Common Stock Fund” shall mean the RSP Investment Option that invests primarily in Spectra Energy Corp common stock.

2.30 “Subaccounts” shall mean the CDP Subaccounts established under Section 6.5(a), the Company-matching Subaccount, the KEDCP Subaccounts established under Section 6.5(b) and the Spectra Energy Common Stock - Stock Deferrals Subaccount established under Section 6.4.

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2.31 “Termination of Employment” shall mean the date of a Participant’s severance from employment with the Company by reason of death, retirement, resignation or discharge, as determined by the Committee in its sole discretion; provided, however, that such Termination of Employment constitutes a “separation from service” within the meaning of Code Section 409A.

2.32 “Transition Back Election Date” shall mean the last day of the second Plan Year preceding the Transition Back Year. For instance, if a Participant changes his election from the Automatic Deferral Election to separate elections for Base Pay and Incentive Plan Awards under Sections 4.1 and 4.2 for the 2012 Plan Year, such election must be made by December 31, 2010.

2.33 “Transition Back Year” shall mean the Plan Year for which the Participant first changes his election from the Automatic Deferral Election under Section 4.3 to separate elections for Base Pay and Incentive Plan Awards under Sections 4.1 and 4.2.

2.34 “Transition Year” shall mean the Plan Year preceding the Plan Year for which a Participant first elects to make the Automatic Deferral Election under Section 4.3.

2.35 “Valuation Date” shall mean, with respect to a Participant, the last business day of the month during which such Participant’s Termination of Employment occurs; provided, however, if the payment of a Participant’s Account is delayed in accordance with Section 7.3(d), then Valuation Date shall mean the last business day of the month that precedes the Participant’s payment under Section 7.3(a) or the first payment under Section 7.3(b), as the case may be.

Capitalized terms that are not defined in Article II shall have the meaning set forth in the Company’s 2007 Long-Term Incentive Plan, as amended from time to time

ARTICLE III

ELIGIBILITY

3.1 General. Any Employee designated by the Committee shall be eligible to participate in the Plan on the date designated by the Committee and shall remain so eligible, while continuing to be an Employee, until designated ineligible to participate by the Committee. Only Employees who are members of a “select group of management or highly compensated employees” under ERISA may participate in the Plan.

3.2 Eligibility Under Predecessor Plan. Notwithstanding anything contained in Section 3.1 to the contrary, any active Employee who made a timely deferral election under the Duke Plan prior to the Distribution Date will be eligible to participate in the Plan on and after the Distribution Date unless the Committee determines that such Employee is no longer eligible to participate hereunder. Moreover, any individual with respect to whom “Assumed Amounts” (as defined in Section 5.1) are credited hereunder shall automatically participate, and be a “Participant,” in the Plan with respect to such Assumed Amounts as of the Distribution Date.

ARTICLE IV

PARTICIPANT DEFERRALS/COMPANY CREDITS

4.1 Base Pay Deferrals. Each eligible Participant may irrevocably elect to defer in accordance with the terms of this Plan, a percentage up to 25% (such percentage to be a multiple of 1%) of such Participant’s Base Pay for the Plan Year. If the Participant has been specifically authorized by the Committee, the 25% in the prior sentence shall be replaced with 50%. Such election must be made by the Participant before the beginning of such Plan Year or within 30 days of a Participant initially becoming eligible to participate in the Plan under Section 3.1. Base Pay deferred pursuant to this Section shall be credited to the Participant’s Account on a monthly basis.

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4.2 Incentive Plan Deferrals. Each eligible Participant may irrevocably elect to defer in accordance with the terms of this Plan, a percentage up to 50% (such percentage to be a multiple of 1%) of the amount payable with respect to a Plan Year to such Participant as an award under any Incentive Plans. If the Participant has been specifically authorized by the Committee, the 50% in the prior sentence shall be replaced with 90%. The Committee may, in its discretion, provide the Participant with separate deferral elections with respect to one or more such Incentive Plans. Such election must be made by the Participant not later than the applicable Election Date and shall apply to any Incentive Plan payments with respect to an Incentive Plan performance period ending with or within the Plan Year. Such amounts will be credited to the Participant’s Account as of the dates that award amounts under the Incentive Plans become payable. Notwithstanding the above provisions of this Section 4.2, no deferral election may be made by a Participant with respect to any stock option, restricted stock award, or stock appreciation right if such election would cause taxation to the Participant under Code Section 409A. In addition, with respect to the first Plan Year for which a Participant is designated as eligible to participate in the Plan, such Participant’s election with respect to compensation under the Spectra Energy Corp Short Term Incentive Plan (the “STIP”) shall apply only to such STIP compensation to be earned during the Participant’s first Plan Year of participation and paid in the following Plan Year. If the Participant earned STIP compensation during the Plan Year preceding the Plan Year for which he is first designated as eligible to participate in the Plan, such STIP compensation cannot be deferred under the Plan.

4.3 Automatic Deferral Election.

(a) Amount of Election. In lieu of making separate elections for Base Pay and Incentive Plan Awards under Sections 4.1 and 4.2, a Participant may elect to contribute to the Plan an amount equal to: (i) the “Maximum Matching Contribution Percentage” (as such term is defined under the RSP), multiplied by (ii) the excess of ESP Eligible Earnings over Automatic Deferral Compensation.

(b) Date of Election. Such Automatic Deferral Election must be made by the Participant by the applicable Automatic Deferral Election Date; provided, however, that with respect the first Plan Year in which a Participant is designated as eligible to participate in the Plan under Section 3.1, (i) the Automatic Deferral Election must be made within 30 days after the Participant is designated as eligible to participate in the Plan, (ii) the Automatic Deferral Election may not become effective earlier than the Plan Year following the first Plan Year in which the Participant is designated as eligible to participate in the Plan, and (iii) the first Plan Year for which a Participant is designated as eligible to participate in the Plan shall be treated as a Transition Year. An Automatic Deferral Election shall be irrevocable for two Plan Years. For example, if a Participant first makes an Automatic Deferral Election by December 31, 2009 for the 2011 Plan Year, the Participant may not make separate elections for Base Pay and Incentive Plan Awards under Sections 4.1 and 4.2 until December 31, 2010, to be applied to the 2012 Plan Year.

(c) Transition Year. With respect to the Transition Year, the Participant must also make an election with respect to Base Pay and Incentive Plan Awards in accordance with Sections 4.1 and 4.2. For example, if a Participant first makes an Automatic Deferral Election for the 2011 Plan Year, the Participant must also make an election with respect to Base Pay and Incentive Plan Awards with respect to the 2010 Plan Year in accordance with Sections 4.1 and 4.2.

With respect to the first Plan Year for which a Participant is designated as eligible to participate in the Plan, which is treated as a Transition Year under Section 4.3(b), such Participant’s election with respect to STIP compensation shall apply only to such STIP compensation to be earned during the Transition Year and paid in the following Plan Year. If the Participant earned STIP compensation during the Plan Year preceding the Plan Year for which he is first designated as eligible to participate in the Plan, such STIP compensation cannot be deferred under the Plan.

(d) Transition Back Year. With respect to the Transition Back Year, the Participant must make a deferral election with respect to Base Pay and Incentive Plan compensation that is both earned and paid during the Transition Back Year in accordance with Sections 4.1 and 4.2 by the end of the Plan Year the precedes the Transition Back Year; provided however, that the Participant must first elect to discontinue his

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Automatic Deferral Election by the Transition Back Election Date. The Participant’s election for the Transition Back Year with respect to Incentive Plan compensation that is earned during a Plan Year that precedes the Transition Back Year but paid during the Transition Back Year, must be made prior to the end of the Plan Year that precedes the Plan Year during which such Incentive Plan compensation is earned.

For example, if a Participant initially made an Automatic Deferral Election for the 2011 Plan Year and wants to change his Automatic Deferral Election to separate elections for Base Pay and Incentive Plan compensation for the 2012 Plan Year, the Participant must first elect to discontinue his Automatic Deferral Election by not later than by December 31, 2010. Such Participant must also make a deferral election with respect to STIP compensation earned during the 2011 Plan Year but paid during the 2012 Plan Year not later than by December 31, 2010. In addition, the Participant must make a deferral election with respect to his Base Pay and Incentive Plan compensation that is both earned and paid during 2012 not later than by December 31, 2011.

4.4 Deferrals of Stock Awards. Each eligible Participant may irrevocably elect to defer, in accordance with the terms of this Plan, the entire amount of any nonvested Award granted under a long-term incentive plan maintained by the Company (including the Company’s 2007 Long-Term Incentive Plan), subject to the following conditions:

(a) Except as otherwise provided in this Section, the deferral election shall be made by, and shall become irrevocable as of, December 31 (or such earlier date as specified by the Committee) of the calendar year next preceding the calendar year for which such Award is granted, or at such later time as is permitted by the Company, consistent with Section 409A of the Code, during the calendar year in which a Participant initially becomes eligible for the Plan.

(b) Except as otherwise provided in Section 4.4(c), with respect to an Award that is subject to a forfeiture condition requiring the Participant’s continued services for a period of at least thirteen (13) months from the date that the service provider obtains a “legally binding right” to such Award (within the meaning of Section 409A of the Code), the deferral election shall be made by, and shall become irrevocable as of, the thirtieth (30th) day following the date that the Participant obtains the legally binding right to such Award.

(c) With respect to an Award that constitutes “performance-based compensation” (within the meaning of Section 409A of the Code), the deferral election shall be made by, and shall become irrevocable as of, the date that is 6 months before the end of the applicable performance period (or such earlier date as specified by the Committee), provided that in no event may such deferral election be made after such Award has become both substantially certain to be paid and readily ascertainable (within the meaning of Section 409A of the Code).

(d) Upon the date that an Award that the Participant has elected to defer would otherwise have been payable, the number of shares of stock or the cash payment that would have become so payable but for the deferral election shall be converted into an equal number of units in the Spectra Energy Common Stock - Stock Deferrals Subaccount.

(e) Dividend Equivalents on any Award that a Participant defers under this Section shall also be deferred and credited to the Participant’s Spectra Energy Common Stock - Stock Deferrals Subaccount commencing on the payment date of the first cash dividend of Spectra Energy Common Stock that is declared after the date on which the deferred Award vests.

(f) No deferral of a stock option or restricted stock award shall be permissible if such election would cause taxation to the Participant under Code Section 409A.

4.5 Dividend Equivalents Deferrals. Each eligible Participant may irrevocably elect to defer, in accordance with the terms of this Plan, 100% of the amounts that would otherwise become payable as Dividend Equivalents, with respect to (i) an Award that is designated in the Award Agreement as a “Chairman’s Award,” or (ii) an

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Award with respect to which the Award Agreement specifically provides for the deferral of Dividend Equivalents. Such election must be made by the Participant at the time the Participant elects to defer receipt of the related Award pursuant to the terms of Section 4.4. Dividend Equivalents that have been deferred pursuant to the first sentence of this Section and credited to the Participant’s Account shall be credited to the Participant’s Spectra Energy Common Stock - Stock Deferrals Subaccount as of the dates such amounts would otherwise become payable pursuant to such award.

4.6 Retirement Savings Plan - Excess Matching Contribution. The Company maintains the RSP, pursuant to which Employees are permitted to make before tax contributions with respect to which the Company makes certain matching contributions, based on the Employee’s deferral election. It is the Company’s intention to provide matching contribution credits under this Plan to the Account of any Participant for whom matching contributions have been limited under the RSP due to (i) the application of Section 401(a)(17) of the Code, (ii) the application of Section 402(g) of the Code or (iii) the application of Section 415 of the Code; provided, however, that such Participant makes before tax contributions to the RSP in an amount not less than the Maximum RSP Deferral Limitation for the Plan Year. Accordingly, as of the last day of each Plan Year, such Participant’s Account shall receive a Company Matching contribution credit that is equal to the amount computed using the following formula (but not less than zero):

C - (the lesser of A or B),

Where:

A = the “Maximum Matching Contribution Percentage” (as such term is defined in the RSP) multiplied by the Participant’s ESP Eligible Earnings for the Plan Year;

B = the sum of the Participant’s actual Before Tax Elective Deferrals under the RSP for the Plan Year, plus the Participant’s actual Base Pay deferrals and Incentive Plan deferrals credited to the Participant’s Account under this Plan during the Plan Year pursuant to Sections 4.1, 4.2 and 4.3; and

C = the Matching Contribution credited to the Participant’s account under the RSP for the Plan Year.

The Company may, from time to time, in its sole discretion, direct that a special credit in such amount as the Company shall determine be made to a specified Participant’s Account in order to (i) mitigate an unintended shortfall in matching contribution credit, or (ii) to implement provisions of an employment agreement. A special credit may be awarded subject to such vesting requirement as the Company shall determine (provided that upon a Change in Control, any special credit shall become vested if the affected Participant has not previously incurred a Termination of Employment) and, notwithstanding any provision of this Plan to the contrary, to the extent any such special credit has not become vested, it shall not be paid under the Plan.

4.7 Elections. An election to make Base Pay deferrals or Incentive Plan deferrals pursuant to Sections 4.1, 4.2 and 4.3 will remain in effect until revoked, except that no revocation will be effective unless it is made, in the case of Base Pay deferrals, prior to the beginning of the Plan Year to which it relates, or in the case of Incentive Plan deferrals, prior to the applicable Election Date. An election to make deferrals of stock awards pursuant to Section 4.4 or Dividend Equivalent deferrals pursuant to Section 4.5 cannot be revoked. In addition, an Automatic Deferral Election made under Section 4.3 shall be irrevocable for two Plan Years.

ARTICLE V

ASSUMED AMOUNTS AND FORMER PLANS

5.1 Assumed Amounts. The Company has assumed the deferred compensation obligations under the Duke Plan with respect to certain Participants who previously were employees of Duke and its affiliates (“Assumed Amounts”). The Assumed Amounts credited to Accounts hereunder shall remain subject to the same vesting

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schedule and elections (including deferral and distribution elections) and beneficiary designations that were controlling under the Duke Plan immediately prior to the Distribution Date until a new election is made in accordance with the terms of this Plan that by its terms supersedes the prior election. For purposes of this Plan, the term Assumed Amounts shall include any amounts of “Base Pay” or “Incentive Plan” awards (in each case, as defined under the Duke Plan and earned but not yet paid as of the Distribution Date) and equity awards granted under the Duke Energy Corporation 1998 Long-Term Incentive Plan, that were properly deferred by a Participant under the Duke Plan but that had not yet been credited to his or her account under the Duke Plan as of the Distribution Date.

5.2 Former Plans. Notwithstanding anything contained herein to the contrary, any Assumed Amounts attributable an individual’s participation in the KEDCP that were maintained under the Duke Plan in accordance with the terms and conditions of the KEDCP shall continue to be maintained under this Plan in accordance with the terms and conditions of the KEDCP as in effect December 31, 1998.

ARTICLE VI

ACCOUNTS

6.1 Maintenance of Participant Accounts. An Account shall be established and maintained with respect to each Participant. Each Account shall reflect the amounts credited thereto pursuant to Articles IV and V, plus or minus adjustments, made in accordance with the provisions of this Article VI.

6.2 Phantom Investment Options Generally. Pursuant to the terms of the RSP, participants in the RSP direct the investment of their account balances thereunder into one or more of the RSP Investment Options available to them pursuant to the RSP. In accordance with such rules as the Committee shall approve, a phantom investment option shall be available hereunder that corresponds with each RSP Investment Option. Each Participant hereunder shall specify, in accordance with this Section 6.2 and rules established by the Committee, the “investment” of his or her Account (excluding amounts currently credited as Company-matching contributions and excluding amounts remaining in the Subaccounts maintained pursuant to Sections 6.5(a) and (b)) in one or more phantom investment options hereunder. The Participant’s Account shall thereafter be automatically adjusted monthly (or on such more frequent basis as the Committee shall approve), upward or downward, in proportion to the total percentage return experienced for the respective period on amounts invested in the corresponding RSP Investment Option(s). Accounts under the Plan will be bookkeeping accounts reflecting units of phantom investment options hereunder which mirror the performance that would have resulted from an actual investment in the corresponding RSP Investment Option(s). No actual monies will be invested hereunder in any phantom investment option or in any RSP Investment Option.

6.3 Company Matching Contributions Subaccount. Amounts contributed to a Participant’s Account as a Company Matching contribution, pursuant to Section 4.5, shall be held in the Company Matching Subaccount, which is a subaccount within such Participant’s Account. Each Participant shall specify the “investment” of his or her Company Matching Subaccount in accordance with Section 6.2. Such investment election is separate from the Participant’s investment election applicable to the remainder of his Account under the Plan.

If the Participant does not make a separate investment election with respect to his Company Matching Subaccount, such Subaccount will be invested as follows:

(a) If the Participant has made an investment election under Section 6.2 on or before December 31, 2011, then his investment election under Section 6.2 shall apply to future allocations to his Company Matching Subaccount.

(b) If the Participant has not made an investment election under Section 6.2 on or before December 31, 2011, then future allocations to his Company Matching Subaccount shall be invested in a default RSP Investment Option as designated by the Committee.

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Notwithstanding the above, if the Participant makes a separate investment election with respect to this Company Matching Subaccount at any time after December 31, 2011, then such separate election shall apply in lieu of the default investment provisions of Sections 6.3(a) and (b) above.

6.4 Subaccount for Deferrals of Stock Awards. Amounts credited to a Participant’s Account pursuant to Section 4.3 shall be held in the Spectra Energy Common Stock - Stock Deferrals Subaccount, which is a subaccount within such Participant’s Account. The amounts in the Spectra Energy Common Stock - Stock Deferrals Subaccount shall be credited and maintained as units of a phantom investment that mirrors the performance of Spectra Energy Corp common stock (with cash dividends reinvested).

6.5 Assumed Amounts. Except as provided below, upon the Distribution Date, the Assumed Amounts shall be subject to the same investment elections, and deemed invested in the same investment options, that were controlling under the Duke Plan immediately prior to the Distribution Date until a new election is made in accordance with the terms of this Plan that by its terms supersedes the prior election; provided, however, that unless otherwise provided below, an investment election relating to the Duke Energy Common Stock Fund shall be deemed to apply to the Spectra Energy Common Stock Fund. Notwithstanding the preceding sentence, the following additional provisions shall apply to the deemed investment of the Assumed Amounts:

(a) CDP Subaccounts. Any Assumed Amounts of a Participant that, immediately prior to the Distribution Date, were maintained in the Participant’s CDP Subaccount under the Duke Plan, will continue to be maintained in the Participant’s CDP Subaccount under this Plan and will be credited with interest at the fixed rate(s) applicable to such subaccount under the Duke Plan immediately prior to the Distribution Date. At any time a Participant may elect to transfer any amount from such CDP Subaccount and into the Participant’s General Account, but no amount so removed from the CDP Subaccount may be transferred back to such CDP Subaccount.

(b) KEDCP Subaccounts. Any Assumed Amounts of a Participant that, immediately prior to the Distribution Date, were maintained in the Participant’s KEDCP Subaccounts under the Duke Plan, will continue to be maintained in the KEDCP Subaccounts under this Plan and will be credited with interest at the fixed rate(s) applicable to such subaccount under the Duke Plan immediately prior to the Distribution Date. At any time a Participant may elect to transfer any amount from such KEDCP Subaccount and into the Participant’s General Account, but no amount so removed from the KEDCP Subaccount may be transferred back to such KEDCP Subaccount.

(c) Former Duke-matching Subaccount. Any Assumed Amounts of a Participant that, immediately prior to the Distribution Date, were maintained in the Participant’s company-matching subaccount under the predecessor Duke Plan, initially will be credited to the Duke Energy Common Stock Fund under this Plan as of the Distribution Date, and thereafter the Plan will not maintain a former Duke-matching subaccount.

(d) Previously-Deferred and Settled Duke Stock Awards. Any Assumed Amounts of a Participant that, immediately prior to the Distribution Date, were maintained in the Participant’s Duke Energy Common Stock - Stock Deferrals Subaccount under the Duke Plan, initially were credited to the Duke Energy Common Stock Fund under this Plan as of the Distribution Date.

(e) Duke Energy Common Stock Fund. Any Assumed Amounts of a Participant that, immediately prior to the Distribution Date, were deemed invested in the Duke Energy Common Stock Fund under the Duke Plan, initially were credited to the Duke Energy Common Stock Fund under this Plan as of the Distribution Date. Effective as of January 1, 2010, all amounts allocated to the Duke Energy Common Stock Fund were reallocated to the Vanguard Prime Money Market Fund phantom investment option.

(f) Previously-Deferred, But Not Settled, Duke Stock Awards. Any phantom stock award or performance share award (and related dividend equivalents) granted under the Duke Energy Corporation 1998 Long-Term Incentive Plan that were previously deferred, but had not been credited to a deferral account as of the Distribution Date, were allocated between the following deemed investment options: (x) each unit attributable to Spectra Energy Corp common stock was automatically credited as a unit of a

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phantom investment under the Spectra Energy Common Stock - Stock Deferrals Subaccount, and (y) each unit attributable to Duke common stock was automatically credited as a unit of a phantom investment under the Duke Energy Common Stock Fund.

Notwithstanding the above paragraph, any phantom stock award or performance share award granted under the Duke Energy Corporation 1998 Long-Term Incentive Plan that is credited to a Participant’s Account on or after December 31, 2009 shall be allocated between the following deemed investment options:

(1) each share attributable to Spectra Energy Corp common stock shall automatically be credited, on the basis of the Fair Market Value of a share of Spectra Energy Corp common stock as of the date that such share is paid under the applicable phantom stock award or performance share award, as a share of a phantom investment under the Spectra Energy Common Stock - Stock Deferrals Subaccount; and

(2) each share attributable to Duke common stock shall automatically be allocated, on the basis of the Fair Market Value of a share of Duke common stock on the date that such unit is paid under the applicable phantom stock unit, to the Participant’s Account among the phantom investment options applicable to future contribution credits as designated in accordance with the Participant’s investment direction made under Section 6.2, provided, however, if no such investment direction is in effect, then such amounts shall be automatically allocated to the Vanguard Prime Money Market Fund phantom investment option made available by the Committee pursuant to Section 6.2.

6.6 Adjustments Duke Energy Common Stock Fund. Immediately after all amounts were credited to the Duke Energy Common Stock Fund as provided in Section 6.5(c), (d) and (e), each phantom unit of Duke common stock credited to the Duke Energy Common Stock Fund on behalf of a Participant on the Distribution Date was converted, as of the Distribution Date, into phantom units of Spectra Energy Corp common stock and phantom units of Duke common stock and reallocated as follows:

(a) The number of phantom units of Spectra Energy Corp common stock was equal to the number of shares of Spectra Energy Corp common stock to which the Participant would have been entitled on the Distribution had the phantom units of Duke common stock represented actual shares of Duke as of the Record Date, the resulting number of phantom units of Spectra Energy Corp common stock being rounded down to the nearest whole unit.

(b) The resulting number of phantom units of Spectra Energy Corp common stock was automatically transferred from the Duke Energy Common Stock Fund and credited to the Spectra Energy Common Stock Fund, effective as of the Distribution Date.

(c) Capitalized terms used in this Section 6.6 that are not defined in this Plan shall have the meaning set forth in the Employee Matters Agreement by and between Duke Energy Corporation and Spectra Energy Corp.

6.7 Transfer Elections.

(a) A Participant may elect to transfer amounts out of Subaccounts (pursuant to Sections 6.3(a), 6.5(a), and 6.5(b)) of the Participant’s Account or of any other portion of the Participant’s Account to other phantom investment options hereunder or to make changes to his or her designation of phantom investment options hereunder pursuant to Section 6.2, on a monthly basis (or on such more frequent basis as the Committee shall approve). Each such election to transfer or change shall be effective in accordance with procedures established by the Committee from time to time. Participants or Beneficiaries who are receiving installment payments may elect to transfer monies between phantom investment options hereunder on a monthly basis (or on such more frequent basis as the Committee shall approve). All transfers must be in increments of 1%. No transfers may be made into or out of the Spectra Energy Common Stock - Stock Deferrals Subaccount.

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(b) A Participant may elect, pursuant to rules and procedures prescribed by the Company, to reallocate Assumed Amounts deemed invested in the Duke Energy Common Stock Fund into any other open investment option.

6.8 Corporate Transactions. If there shall occur any merger, consolidation, liquidation, issuance of rights or warrants to purchase securities, recapitalization, reclassification, stock dividend, spin-off, split-off, stock split, reverse stock split or other distribution with respect to the shares of Spectra Energy Corp, or any similar corporate transaction or event in respect of such shares, then the Committee shall, in the manner and to the extent that it deems appropriate and equitable to the Participants and consistent with the terms of this Plan, cause a proportionate adjustment to be made in number and kind of shares deemed held under the Plan. Moreover, in the event of any such transaction or event, the Committee, in its discretion, may provide in substitution for any or all outstanding shares under the Plan such alternative consideration as it, in good faith, may determine to be equitable under the circumstances.

ARTICLE VII

BENEFITS

7.1 Termination of Employment. Upon the Participant’s Termination of Employment, for any reason, the amount in the Participant’s Account will be paid to the Participant (or to the Beneficiary designated pursuant to Section 8.1) in accordance with the terms of the payment option elected by the Participant under Section 5.1 or Section 7.2, except as otherwise provided in Section 7.5. However, if a Participant (i) has a Termination of Employment for any reason, except death, layoff or disability, prior to becoming eligible for early or normal retirement under the Duke Energy Retirement Cash Balance Plan as in effect on October 3, 2004, without giving effect to amendments adopted thereafter, and (ii) has elected term payments of 10 years or 15 years, then the portion of that Participant’s Account that is governed by Sub-Plan I (as defined in Section 14.5 hereof) shall be paid instead for a 3-year term in accordance with Section 7.3(b).

7.2 Election of Payment Option. Each Participant shall, before becoming a Participant, elect from among the payment options specified in Section 7.3, the manner in which such Participant’s Account will be paid following Termination of Employment. A Participant may change his or her benefit payment election at any time, and from time to time, by completing a new election form as the Committee provides and filing the completed form with, and acceptance by, the Committee; provided, however, that the Participant has not filed a payment election form within the prior 12 months. With respect to amounts deferred under Sub-Plan II, except where the payment of the Participant’s benefit is due to death or disability (within the meaning of Code Section 409A), (i) a Participant’s election to change the form of benefit payment shall become effective one year from the date on which the election form was file with the Committee, but only if the Participant continued in employment throughout such one-year period, and (ii) any lump sum or installment form of payment that is changed by the Participant’s election pursuant to this paragraph will be paid not earlier than five years from the date that such payment would otherwise have been paid.

Each Participant with Assumed Amounts attributable to his or her participation in the KEDCP who either (i) failed to make an election under the Duke Plan upon commencement of participation in such plan, or (ii) who had a Termination of Employment with Duke prior to January 1, 2000, shall be subject to the following rules:

(a) No distribution shall be made prior to the Termination of Employment of the Participant.

(b) If the Participant elected to receive all distributions under the KEDCP in a single lump sum, distribution shall be made to the Participant in a single lump sum.

(c) If the Participant elected to receive a distribution under the KEDCP in installments (including an annuity) or in a combination of installments and a lump sum payment, the Participants’ Account that is governed by Sub-Plan I (as defined in Section 14.5 hereof) shall be paid in term payment of 10 years unless

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Termination of Employment occurs prior to becoming eligible for early or normal retirement under the Duke Energy Retirement Cash Balance Plan as in effect on October 3, 2004, without giving effect to amendments adopted thereafter, in which case distribution shall be made in term payments of 3 years in accordance with Section 7.3(b).

7.3 Payment Options. Subject to the foregoing, the payment options are:

(a) Lump Sum. Payment of the full amount of the Participant’s Account on the last business day of the month following the month in which Termination of Employment occurs.

(b) Term Payments. Payments on a monthly basis over a term of years, which shall be either 3 years or 10 years, as follows: The Company will determine the amount of the Participant’s Account on the Valuation Date, and as of the last day of each Plan Year thereafter. The Participant will receive on the last business day of each month during the term, beginning with the last day of the month following the Valuation Date, an amount determined pursuant to the following formula:

amount =	V
	N

where
N	represents the number of months remaining in the payment term as of the immediately preceding December 31, except for payments made for the first calendar year, in which case the number of months shall be equal to the number of months in the elected installment form; and
V	represents the balance of the Participant’s Account determined as of the immediately preceding December 31, except for payments made for the first calendar year, in which case the balance will be determined as of the last day of the month immediately prior to the payment commencement date.

Any remaining balance in the Participant’s Account shall be paid to the Participant on the last day of the last month of the term. Distributions from the Participant’s Spectra Energy Common Stock - Stock Deferrals Subaccount shall be on an annual, rather than a monthly basis, and the formula set forth above in this Section 7.3(b) shall be reformed accordingly. Term payments from the Spectra Energy Common Stock - Stock Deferrals Subaccount shall be made on the last business day of the month immediately following each anniversary of the Valuation Date.

Notwithstanding the foregoing, if a Participant has previously elected to receive payment of his Account on a monthly basis over a period of 15 years and has commenced payment of his Account pursuant to such election as of December 31, 2009, the Participant shall continue to receive payment of his Account on a monthly basis for the remainder of such 15-year period. If the Participant has previously elected to receive payment of his Account on a monthly basis over a period of 15 years and has not yet commenced payment of his Account pursuant to such election as of December 31, 2009, the Participant shall be permitted to retain such election, but in the event that the Participant makes a subsequent election, only the forms of benefit payment set forth in the first paragraph of this Section 7.3(b) are available.

(c) Separate Payment Election for Spectra Energy Common Stock – Stock Deferrals Subaccount. With respect to Sub-Plan II only, the Participant may make separate payment elections in accordance with Section 7.2 with respect to (i) the amount credited to his Spectra Energy Common Stock – Stock Deferrals Subaccount and (ii) the remainder of his Account.

(d) Six Month Delay. Notwithstanding any provision in this Plan to the contrary, if the payment of any benefit hereunder would be subject to additional taxes and interest under Code Section 409A because the timing of such payment is not delayed as provided in Section 409A for a Specified Employee, then if the

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Participant is a Specified Employee under Section 409A, any such payment that the Participant would otherwise be entitled to receive during the first six months following the date of the Participant’s Termination of Employment shall be delayed and paid, if in the form of a lump sum payment or, commence, if in the form of installment payments, as applicable, within fifteen (15) business days after the date that is six months following the date of the Participant’s Termination of Employment, or such earlier date upon which such amount can be paid or provided under Code Section 409A without being subject to such taxation.

(e) Default Form of Payment. If a Participant fails to timely elect a payment option in accordance with this Section 7.3, the Participant’s Account will be paid to the Participant in a single lump sum on the last business day of the month following the month in which Termination of Employment occurs, subject to Section 7.3(d).

7.4 Payments After Death. If a Participant (or a Beneficiary previously designated by a deceased Participant) dies before receiving all amounts payable hereunder, then the remaining amounts payable will be paid to the specified Beneficiary of such deceased person in accordance with the payment option in effect, subject to Section 7.5; provided, however, that (i) if such deceased person has failed to specify a surviving Beneficiary, then the person’s estate will be considered to be the Beneficiary, and (ii) if a person receiving payments over a term of years dies and an estate is such person’s Beneficiary, then such term payments will cease and the remaining amount credited to the Account will be paid to such estate in a lump sum not later than by the last day of the month following the month in which the Participant’s death occurs.

7.5 Small Payments. If a Participant’s Account balance at Termination of Employment is less than $25,000, and the Committee does not anticipate that any amounts will be credited thereto pursuant to Articles IV and V after his Termination of Employment, the Participant’s Account shall automatically be paid in a lump sum as soon as practicable following, and not later than sixty (60) days after, the date of Termination of Employment, subject to Section 7.3(d).

7.6 Form of Payment. All amounts due under the Plan shall be paid in cash, except that units in the Spectra Energy Common Stock—Stock Deferrals Subaccount shall be converted to whole shares of Spectra Energy Corp common stock and cash for any fractional share. To the extent that the delivery of any shares of Spectra Energy Corp common stock to a Participant under this Plan otherwise would cause all or any portion of the Plan to be considered an “equity compensation plan” as such term is defined in Section 303A(8) of the New York Stock Exchange Listed Company Manual or any successor rule (“Listed Company Manual”), then such shares shall be paid from, and shall count against the share reserve of, a Company-sponsored “equity compensation plan” designated by the Committee that complies with the shareholder approval requirements contained in the Listed Company Manual.

7.7 Acceleration of Payment in the Event of Hardship. Upon written request by a Participant, the Committee may distribute to a Participant who is receiving installment payments, prior to the payment of all installments due to the Participant, such amount of the Participant’s Account which the Committee determines is necessary to alleviate a financial hardship suffered by the Participant. For this purpose, “financial hardship” shall mean a severe financial hardship that constitutes an “unforeseeable emergency” within the meaning of Code Section 409A.

7.8 In-Service Distribution Coupled with Ten Percent Forfeiture. Notwithstanding any other provision of this Article VII, a distribution shall be made to any Participant who, prior to Termination of Employment, files a written request for an immediate lump sum distribution in an amount not less than $25,000 (the entire account balance in the case of Accounts that are valued at less than $25,000), and who simultaneously agrees in writing to a permanent forfeiture equal to 10% of the amount requested as a distribution. Such distribution, less the 10% forfeiture, shall be made within 30 days following receipt by the Company of the signed request for distribution and forfeiture agreement. Distributions under this Section shall be removed from a Participant’s Accounts on a

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prorated basis. The ability to receive an in-service distribution as described in this Section 7.8 shall not apply to (i) any amounts deferred under Sub-Plan II as described in Section 14.5, and (ii) any amounts deferred under Sub-Plan I to the extent that the in-service distribution provided under this Section 7.8 was not available under the terms of the plan or agreement controlling such amounts as in effect on October 3, 2004.

ARTICLE VIII

BENEFICIARY

8.1 Designation of Beneficiary. A Participant shall designate a Beneficiary to receive benefits under the Plan by submitting to the Committee a Designation of Beneficiary in the form required by the Committee. If more than one Beneficiary is named, the share and precedence of each Beneficiary shall be indicated. A Participant shall have the right to change the Beneficiary by submitting to the Committee a Change of Beneficiary in the form provided, but no change of Beneficiary shall be effective until acknowledged in writing by the Company.

8.2 Designation by Beneficiary. A Beneficiary who has become entitled to receive benefits shall designate a Beneficiary.

8.3 Discharge of Obligations. Any payment made by the Company, in good faith and in accordance with this Plan, shall fully discharge the Company from all further obligations with respect to that payment. If the Company has any doubt as to the proper Beneficiary to receive payments hereunder, the Company shall have the right to withhold such payments until the matter is finally adjudicated.

8.4 Payment to Minors and Incapacitated Persons. In the event that any amount is payable to a minor or to any person who, in the judgment of the Committee, is incapable of making proper disposition thereof, such payment shall be made to the legal guardian of the property of such minor or such person. The Company shall make such payments as directed by the Committee without the necessary intervention of any guardian or like fiduciary, and without any obligation to require bond or to see to the further application of such payment. Any payment so made shall be in complete discharge of the Plan’s obligation to the Participant and his Beneficiaries.

ARTICLE IX

NATURE OF COMPANY’S OBLIGATION

9.1 Unsecured Promise. The Company’s obligation to the Participant under this Plan shall be an unfunded and unsecured promise to pay. The rights of a Participant or Beneficiary under this Plan shall be solely those of an unsecured general creditor of the Company. The Company shall not be obligated under any circumstances to set aside or hold assets to fund its financial obligations under this Plan.

9.2 No Right to Specific Assets. Notwithstanding the foregoing, the Company may, in its sole discretion establish such accounts, trusts, insurance policies or arrangements, or any other mechanisms it deems necessary or appropriate to account for or fund its obligations under the Plan. Any assets which the Company may set aside, acquire or hold to help cover its financial liabilities under this Plan are and remain general assets of the Company subject to the claims of its creditors. The Company does not give, and the Plan does not give, any beneficial ownership interest in any assets of the Company to a Participant or Beneficiary. All rights of ownership in any assets are and remain in the Company. Any general asset used or acquired by the Company in connection with the liabilities it has assumed under this Plan shall not be deemed to be held under any trust for the benefit of the Participant or any Beneficiary, and no general asset shall be considered security for the performance of the obligations of the Company. Any asset shall remain a general, unpledged, and unrestricted asset of the Company.

9.3 Plan Provisions. The Company’s liability for payment of benefits shall be determined only under the provisions of this Plan, as it may be amended from time to time.

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ARTICLE X

TERMINATION, AMENDMENT, MODIFICATION OR

SUPPLEMENTATION OF PLAN

10.1 Right to Terminate and Amend. The Committee retains the sole and unilateral right to terminate, amend, modify or supplement this Plan, in whole or in part, at any time. The Committee may delegate the right to amend the Plan, subject to any limitations it may impose, to an officer of the Company. No such action shall adversely affect a Participant’s right to receive amounts then credited to a Participant’s Account with respect to events occurring prior to the date of such amendment.

In the event of a Change in Control, the Plan shall become irrevocable and may not be amended or terminated without the written consent of each Plan Participant who may be affected in any way by such amendment or termination, either at the time of such action or at any time thereafter. This restriction in the event of a Change in Control shall be determined by reference to the date any amendment or resolution terminating the Plan is actually signed by an authorized party rather than the date such action purports to be effective.

ARTICLE XI

RESTRICTIONS ON ALIENATION OF BENEFITS

11.1 No Assignment. Except as provided under Section 11.2 with respect to a DRO, no right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge. Any attempt to anticipate, alienate, sell, assign, pledge, encumber or charge these benefits shall be void. No right or benefit under this Plan shall in any manner be liable for or subject to the debts, contracts, liabilities, or torts of the person entitled to the benefit. If any Participant or Beneficiary under the Plan should become bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber or charge any right to a benefit hereunder, then the right or benefit, in the discretion of the Committee, shall cease. In these circumstances, the Committee may hold or apply the benefit payment or payments, or any part of it, for the benefit of the Participant or his Beneficiary, the Participant’s spouse, children, or other dependents, or any of them, in any manner and in any portion that the Committee may deem proper.

11.2 Domestic Relations Order. The anti-alienation restrictions of Section 11.1 shall not apply to a domestic relations order (as defined in Code Section 414(p)(1)(B)) (a “DRO”). The Committee may direct the acceleration of payment of all or a portion of a Participant’s Account and pay such amount to an individual other than the Participant to the extent necessary to fulfill the requirements of a DRO. The rules set forth in Section 7.2 governing subsequent changes in the Participant’s benefit payment election shall not apply to any change in the form and timing of payment to the extent that such election is reflected in, or made in accordance with, the terms of a DRO.

ARTICLE XII

ADMINISTRATION

12.1 “Top-Hat” Plan. The Company intends for the Plan to be “top-hat” plan for a select group of management or highly compensated employees which is exempt from substantially all of the requirements of Title I of ERISA pursuant to Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA. The Company is the Plan sponsor under Section 3(16)(B) of ERISA.

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12.2 Named Fiduciary. The Committee is the named fiduciary of the Plan and as such shall have the authority to control and manage the operation and administration of the Plan except as otherwise expressly provided in this Plan document. The named fiduciary may designate persons other than the named fiduciary to carry out fiduciary responsibilities under the Plan. Any such allocation or designation must be in writing and must be accepted in writing by any such other person.

12.3 Plan Administrator. The Committee is the administrator of the Plan within the meaning of Section 3(16)(A) of ERISA. As administrator, the Committee has the authority (without limitation as to other authority) to delegate its duties to agents and to make rules and regulations that it believes are necessary or appropriate to carry out the Plan. The Committee has the discretion as a Plan fiduciary (i) to interpret and construe the terms and provisions of the Plan (including any rules or regulations adopted under the Plan), (ii) to determine questions of eligibility to participate in the Plan and (iii) to make factual determinations in connection with any of the foregoing. A decision of the Committee with respect to any matter pertaining to the Plan including without limitation the Employees determined to be Participants, the benefits payable, and the construction or interpretation of any provision thereof, shall be conclusive and binding upon all interested persons.

ARTICLE XIII

CLAIMS PROCEDURE

13.1 Claim. If a Participant has any grievance, complaint, or claim concerning any aspect of the operation or administration of the Plan, including but not limited to claims for benefits and complaints concerning the performance or administration of the phantom investment funds (collectively referred to herein as “claim” or “claims”), the Participant shall submit the claim to the Committee, which shall have the initial responsibility for deciding the claim.

13.2 Written Claim. A claim for benefits will be considered as having been made when submitted in writing by the claimant to the Committee. No particular form is required for the claim, but the claim must identify the name of the claimant and describe generally the benefit to which the claimant believes he is entitled. The claim may be delivered personally during normal business hours or mailed to the Committee. All such claims shall be submitted in writing and shall set forth the relief requested and the reasons the relief should be granted. All such claims must be submitted with the “applicable limitations period.” The “applicable limitations period” shall be two years beginning on: (i) in the case of any lump-sum payment, the date on which the payment was made, (ii) in the case of an installment payment, the date of the first in the series of payments, or (iii) for all other claims, the date on which the action complained or grieved of occurred.

13.3 Committee Determination. The Committee will determine whether, or to what extent, the claim may be allowed or denied under the terms of the Plan. If the claim is wholly or partially denied, the claimant shall be so informed by written notice within 90 days after the day the claim is submitted unless special circumstances require an extension of time for processing the claim. If such an extension of time for processing is required, written notice of the extension shall be furnished to the claimant prior to the termination of the initial 90-day period. Such extension may not exceed an additional 90 days from the end of the initial 90-day period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan expects to render the final decision. If notice of denial of a claim (in whole or in part) is not furnished within the initial 90-day period after the claim is submitted (or, if applicable, the extended 90-day period), the claimant shall consider that his claim has been denied just as if he had received actual notice of denial.

13.4 Notice of Determination. The notice informing the claimant that his claim has been wholly or partially denied shall be written in a manner calculated to be understood by the claimant and shall include:

(1) The specific reason(s) for the denial.

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(2) Specific reference to pertinent Plan provisions on which the denial is based.

(3) A description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary.

(4) Appropriate information as to the steps to be taken if the Participant or Beneficiary wishes to submit his claim for review.

13.5 Appeal. If the claim is wholly or partially denied, the claimant (or his authorized representative) may file an appeal of the denied claim with the Committee requesting that the claim be reviewed. The Committee shall conduct a full and fair review of each appealed claim and its denial. Unless the Committee notifies the claimant that due to the nature of the benefit and other attendant circumstances he is entitled to a greater period of time within which to submit his request for review of a denied claim, the claimant shall have 60 days after he (or his authorized representative) receives written notice of denial of his claim within which such request must be submitted to the Committee.

13.6 Request for Review. The request for review of a denied claim must be made in writing in connection with making such request, the claimant or his authorized representative may:

(1) Review pertinent documents.

(2) Submit issues and comments in writing.

13.7 Determination of Appeal. The decision of the Committee regarding the appeal shall be promptly given to the claimant in writing and shall normally be given no later than 60 days following the receipt of the request for review. However, if special circumstances (for example, if the Committee decides to hold a hearing on the appeal) require a further extension of time for processing, the decision shall be rendered as soon as possible, but no later than 120 days after receipt of the request for review. However, if the Committee holds regularly scheduled meetings at least quarterly, a decision on review shall be made by no later than the date of the meeting which immediately follows the Plan’s receipt of a request for review, unless the request is filed within 30 days preceding the date of such meeting. In such case, a decision may be made by no later than the date of the second meeting following the Plan’s receipt of the request for review. If special circumstances (for example, if the Committee decides to hold a hearing on the appeal) require a further extension of time for processing, the decision shall be rendered as soon as possible, but no later than the third meeting following the Plan’s receipt of the request for review. If special circumstances require that the decision will be made beyond the initial time for furnishing the decision, written notice of the extension shall be furnished to the claimant (or his authorized representative) prior to the commencement of the extension. The decision on review shall be in writing and shall be furnished to the claimant or to his authorized representative within the appropriate time for the decision. If a decision on review is not furnished within the appropriate time, the claim shall be deemed to have been denied on appeal.

13.8 Hearing. The Committee may, in its sole discretion, decide to hold a hearing if it determines that a hearing is necessary or appropriate in order to make a full and fair review of the appealed claim.

13.9 Decision. The decision on review shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, as well as specific references to the pertinent Plan provisions on which the decision is based.

13.10 Exhaustion of Appeals. A Participant must exhaust his rights to file a claim and to request a review of the denial of his claim before bringing any civil action to recover benefits due to him under the terms of the Plan, to enforce his rights under the terms of the Plan, or to clarify his rights to future benefits under the terms of the Plan. No action at law or in equity to recover under this Plan shall be commenced later than one year from the date of the decision on review (or deemed denial if no decision is issued).

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13.11 Committee’s Authority. The Committee shall exercise its responsibility and authority under this claims procedure as a fiduciary and, in such capacity, shall have the discretionary authority and responsibility (1) to interpret and construe the Plan and any rules or regulations under the Plan, (2) to determine the eligibility of Employees to participate in the Plan, and the rights of Participants to receive benefits under the Plan, and (3) to make factual determinations in connection with any of the foregoing.

ARTICLE XIV

GENERAL PROVISIONS

14.1 No Right to Employment. Nothing in this Plan shall be deemed to give any person the right to remain in the employ of the Company, its subsidiaries or affiliates or affect the right of the Company to terminate any Participant’s employment with or without cause.

14.2 Withholding. Any amount required to be withheld under applicable Federal, state and local tax laws (including any amounts required to be withheld under Section 3121(v) of the Code) will be withheld in such manner as the Committee will determine and any payment under the Plan will be reduced by the amount so withheld, as well as by any other lawful withholding.

14.3 Section 16. Notwithstanding anything in this Plan to the contrary, any Participant who is subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) shall not liquidate, transfer or dispose of any investment of such Participant’s Account under Article VI in units of the phantom investment fund that corresponds to (i) the RSP’s Spectra Energy Corp Common Stock Fund, or (ii) the Spectra Energy Common Stock - Stock Deferrals Subaccount during the six-month period following the investment of such Participant’s Account in such units, nor shall any such Participant elect to make a Discretionary Transaction (as such term is defined in Rule 16b-3(b)(1) under the Exchange Act) within six months of the election of a nonexempt “opposite way” (as such term is used for purposes of Section 16(b) of the Exchange Act) Discretionary Transaction under any plan of the Company in which the Participant participates. Any provision hereof related to a credit, grant or award of such units under this Plan to a Participant who is subject to the reporting requirements of Section 16(a) under the Exchange Act shall be interpreted, in the event of any ambiguity, such that the transaction or transactions relating thereto shall qualify for exemption from liability under Section 16(b) of such Act.

14.4 Governing Law. This Plan shall be construed and administered in accordance with the laws of the State of Texas to the extent that such laws are not preempted by Federal law.

14.5 Compliance With Section 409A. The Plan is divided into two separate deferred compensation sub-plans, one of which is named “Sub-Plan I” and the other is named “Sub-Plan II.” Sub-Plan I shall include only “amounts deferred” before January 1, 2005 (within the meaning of Code Section 409A) under the Duke Plan, and earnings thereon, and such deferred compensation shall be subject to the applicable provisions of the Duke Plan as in effect on October 3, 2004, as modified herein, and as Sub-Plan I is subsequently amended or otherwise changed, except as would result in such deferred compensation being subject to Code Section 409A. The adoption of the Plan is not intended to be a “material modification” (within the meaning of Code Section 409A) with respect to amounts under Sub-Plan I, and shall be construed accordingly. Sub-Plan II shall include only “amounts deferred” after December 31, 2004, and earnings thereon, and such deferred compensation shall be subject to the provisions of the Plan as in effect on the Distribution Date, as subsequently amended or otherwise changed. The Company intends Sub-Plan II to comply with the provisions of Code Section 409A, so as to prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year that is prior to the taxable year or years in which such amounts would otherwise actually be distributed or made available to Participants and Beneficiaries. Sub-Plan II shall be construed, administered and governed in a manner that effectuates such intent, and no action shall be taken that is inconsistent with such intent. In furtherance of this intent, to the extent that any terms of the Plan are ambiguous, such terms shall be interpreted as necessary to comply with Code Section 409A.

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IN WITNESS WHEREOF, this amendment and restatement of the Plan is executed on behalf of the Company this 1st day of May 2012.

SPECTRA ENERGY CORP
By:	/s/ Dorothy M. Ables
Name:	Dorothy M. Ables
Title:	Chief Administrative Officer

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EX-10.2

EXHIBIT 10.2

SPECTRA ENERGY CORP

DIRECTORS’ SAVINGS PLAN

(As Amended and Restated Effective as of May 1, 2012)

TABLE OF CONTENTS

ARTICLE I ESTABLISHMENT AND PURPOSE OF PLAN			4
ARTICLE II DEFINITIONS			4
ARTICLE III ELIGIBILITY			6
	3.1	Eligibility under Predecessor Plan	6
	3.2	General	6
	3.3	Revocation	6
ARTICLE IV ACCOUNTS			6
	4.1	Maintenance of Participant Account	6
	4.2	Phantom Investment Options	7
	4.3	Assumed Amounts	7
	4.4	Investment of Assumed Amounts	7
	4.5	Corporate Transactions	7
ARTICLE V VESTING			8
	5.1	Generally	8
	5.2	Assumed Amounts	8
ARTICLE VI PAYMENT OF BENEFITS			8
	6.1	Amount	8
	6.2	Payment Election	8
	6.3	Source of Payments	9
ARTICLE VII DEATH BENEFITS			9
	7.1	Beneficiary Designation	9
	7.2	No Beneficiary	9
	7.3	Death Before Payment Begins	10
	7.4	Death After Payment Begins	10
	7.5	Payment Timing	10
ARTICLE VIII AMENDMENT AND TERMINATION			10
	8.1	Amendment and Termination.	10
ARTICLE IX ADMINISTRATION			10
	9.1	Plan Sponsor	10
	9.2	Named Fiduciary	10
	9.3	Plan Administrator	10
ARTICLE X CLAIMS PROCEDURE			11
	10.1	Claim	11
	10.2	Written Claim	11
	10.3	Compensation Committee Determination	11
	10.4	Notice of Determination	11
	10.5	Appeal	11
	10.6	Request for Review	11
	10.7	Determination of Appeal	11
	10.8	Hearing	12
	10.9	Decision	12
	10.10	Exhaustion of Appeals	12
	10.11	Compensation Committee’s Authority	12

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ARTICLE XI GENERAL PROVISIONS			12
	11.1	No Assignment	12
	11.2	Domestic Relations Order	12
	11.3	No Liability	13
	11.4	Unsecured Promise	13
	11.5	Governing Law	13
	11.6	Compliance with Code Section 409A	13

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EXHIBIT 10.2

SPECTRA ENERGY CORP

DIRECTORS’ SAVINGS PLAN

ARTICLE I

ESTABLISHMENT AND PURPOSE OF PLAN

The Spectra Energy Corp Directors’ Savings Plan (the “Plan”) was established by Spectra Energy Corp, effective as of the Distribution Date (as defined below), and is hereby amended and restated effective as of May 1, 2012. The purposes of the Plan are (i) to provide deferred compensation for the Nonemployee Directors of the Board and (ii) to provide for the payment of certain amounts deferred under the Duke Energy Corporation Directors’ Savings Plan.

ARTICLE II

DEFINITIONS

Wherever used herein, a pronoun or adjective in the masculine gender includes the feminine gender, the singular includes the plural, and the following terms have the following meanings unless a different meaning is clearly required by the context.

2.1 “Account” means the single bookkeeping account established and maintained pursuant to the Plan in the name of each Participant, which Account shall include the following: (i) Fixed Interest Investment Option as defined in Section 4.4(i), (ii) SECS Investment Option as defined in Section 4.1 and (iii) Spectra Stock Deferral Investment Option as defined in Section 4.2.

2.2 “Beneficiary” means the person or persons designated by a Participant, or by another person entitled to receive benefits hereunder, to receive benefits following the death of such person.

2.3 “Board of Directors” or “Board” means the Board of Directors of the Company.

2.4 “Change in Control” shall be deemed to have occurred upon:

(i) an acquisition subsequent to the Distribution Date by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (A) the then outstanding shares of Company common stock or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors; excluding, however, the following: (1) any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company, (2) any acquisition by the Company and (3) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or of its affiliated companies;

(ii) during any period of two (2) consecutive years (not including any period prior to the Distribution Date), individuals who at the beginning of such period constitute the Board of Directors (and any new Directors whose election to the Board or nomination for election by the Company’s shareholders was approved by a vote of at least 2/3 of the Directors then still in office who either were Directors at the beginning of the period or whose election or nomination for election was so approved) cease for any reason (except for death, disability or voluntary retirement) to constitute a majority thereof;

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(iii) the consummation, after the Distribution Date, of a merger, consolidation, reorganization or similar corporate transaction, which has been approved by the shareholders of the Company, whether or not the Company is the surviving Company in such transaction, other than a merger, consolidation, or reorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation, or reorganization; or

(iv) the consummation, after the Distribution Date, of (A) the sale or other disposition of all or substantially all of the assets of the Company or (B) a complete liquidation or dissolution of the Company, which has been approved by the shareholders of the Company;

provided that in no event shall a Change in Control be deemed to have occurred by reason of any of the events resulting from the separation transaction pursuant to which the Company becomes a separate publicly-held corporation for the first time.

2.5 “Code” means the Internal Revenue Code of 1986, as amended.

2.6 “Company” means Spectra Energy Corp.

2.7 “Compensation” means all retainers, committee chair fees and meeting/committee fees earned by Nonemployee Directors for services actually rendered in conjunction with service on the Board of Directors.

2.8 “Compensation Committee” means the compensation Committee of the Board of Directors, or its delegate.

2.9 “Deferred Compensation” or “Deferrals” mean Compensation deferred under the Plan.

2.10 “Director” means a member of the Board of Directors.

2.11 “Distribution Date” has the meaning given such term in the Separation and Distribution Agreement by and between Duke Energy Corporation and Spectra Energy Corp.

2.12 “Duke” means Duke Energy Corporation.

2.13 “Duke Plan” means the Duke Energy Corporation Directors’ Savings Plan.

2.14 “Duke Retirement Plan” means the Duke Power Company Retirement Plan for Outside Directors as it existed on December 31, 1996.

2.15 “Fair Market Value” of a share of common stock means the closing price at which shares of Company common stock were sold on the New York Stock Exchange as indicated in the composite transactions for the day in question or, if such day is not a trading day for such exchange, for the most recent trading day preceding such day.

2.16 “Nonemployee Director” means a member of the Board of Directors who is not employed by Spectra Energy Corp or any of its affiliated companies.

2.17 “Participant” means a Nonemployee Director who is eligible to participate in the Plan.

2.18 “Phantom Stock Unit” means a unit of measure which is equal in value to one share of Company common stock.

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2.19 “Plan” means this Spectra Energy Corp Directors’ Savings Plan.

2.20 “Separation From Service” means a Participant’s separation from service on the Board of Directors with the meaning of Code Section 409A.

ARTICLE III

ELIGIBILITY

3.1 Eligibility under Predecessor Plan. Any active Nonemployee Director who made a timely deferral election under the Duke Plan prior to the Distribution Date will be eligible to participate in the Plan on and after the Distribution Date. Moreover, any individual with respect to whom “Assumed Amounts” (as defined in Section 4.3) are credited hereunder shall automatically participate, and be a Participant, in the Plan with respect to such Assumed Amounts as of the Distribution Date.

3.2 General. Any individual who is not described in Section 3.1 and who becomes a Nonemployee Director will become a Participant in the Plan upon beginning to serve as a member of the Board of Directors. By no later than thirty (30) days after becoming a Nonemployee Director, the Nonemployee Director may file with the Company an irrevocable election, utilizing such form as the Company shall prescribe, to defer under the Plan a specified portion of such Compensation that would otherwise be currently payable, that the Nonemployee Director may earn subsequent to the date the election form is filed with the Company. A Nonemployee Director may at any time make a new irrevocable election that shall be applicable only to Compensation earned after the end of the calendar year during which the election form was filed with the Company. By not later than the date specified by the Company, which shall be within thirty (30) days after the date that a Nonemployee Director is granted a Phantom Stock Unit under a Company-sponsored long-term incentive plan (including, but not limited to, the Company’s 2007 Long-Term Incentive Plan), the Nonemployee Director may file with the Company an irrevocable election, utilizing such form as the Company shall prescribe, to defer under the Plan payment of Phantom Stock Units covered by such award in accordance with the provisions of such long-term incentive plan, provided that such election is consistent with the subsequent deferral election provisions of Code Section 409A.

3.3 Revocation. An election to defer Compensation pursuant to Section 3.1 will remain in effect until revoked, except that no revocation will be effective unless is it made prior to the beginning of the calendar year to which it relates.

ARTICLE IV

ACCOUNTS

4.1 Maintenance of Participant Account. An Account shall be established and maintained in the name of each Participant. The Account shall reflect amounts credited thereto pursuant to the Participant’s deferrals of Compensation earned on or after the Distribution Date, and to Elective Phantom Stock Unit Deferrals, with adjustments for investment performance as specified in this Section 4.1 and charges for Plan benefits paid (or amounts forfeited). Except to the extent otherwise provided in the Plan, each Participant shall direct, in accordance with rules and procedures established by the Compensation Committee or its designee, the “investment” of the Participant’s Account among phantom investment options, which are bookkeeping devices without actual asset portfolios, that correspond to the investment options available under the Spectra Energy Corp Executive Savings Plan, which, in turn, correspond to the investment funds available for investment under the Spectra Energy Retirement Savings Plan (“RSP”). In this regard, the Plan’s investment option that corresponds to the RSP’s Spectra Energy Corp Common Stock Fund shall be referred to as the “SECS Investment Option.” The portion of the Participant’s Account that is “invested” in a particular investment option

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shall be adjusted monthly (or on such more frequent basis approved by the Company), upward or downward, to reflect the investment performance experienced for the respective period on like amounts invested in the corresponding RSP investment fund, although no actual investment will be made in the RSP investment fund on behalf of the Participant’s Account.

In connection with the deferral of Compensation that is not otherwise payable only as Company common stock, such Deferred Compensation shall be invested in such open investment option(s) as the Participant shall direct.

4.2 Phantom Investment Options. In connection with Elective Phantom Stock Unit Deferrals, deferred payment on a Phantom Stock Unit, upon such unit becoming vested, will automatically be credited, on the basis of the Fair Market Value of a share of Company common stock, as of the respective crediting date, and maintained as a unit of a phantom investment option, in the “Spectra Stock Deferral Investment Option,” which shall correspond to the RSP’s Spectra Energy Corp Common Stock Fund. The Participant (or, if deceased, the Participant’s Beneficiary) may not elect to transfer amounts from the Spectra Stock Deferral Investment Option to any other investment option(s). The Spectra Stock Deferral Investment Option shall not be open to any deferral other than an Elective Phantom Stock Unit Deferral, or to any elective transfer from any other investment option.

Except for amounts invested in the Spectra Stock Deferral Investment Option, the Participant (or, if the Participant is deceased, the Participant’s beneficiary) may elect subsequent transfer of amounts from any investment option to any open investment option(s) on a monthly basis (or on such more frequent basis approved by the Company).

4.3 Assumed Amounts. The Company has assumed the deferred compensation obligations under the Duke Plan with respect to certain Participants who previously served as non-employee directors of Duke (“Assumed Amounts”). The Assumed Amounts credited to Accounts hereunder shall remain subject to the same vesting schedule and elections (including deferral and distribution elections) and beneficiary designations that were controlling under the Duke Plan immediately prior to the Distribution Date until a new election is made in accordance with the terms of this Plan, which by its terms, supersedes the prior election.

4.4 Investment of Assumed Amounts. Except as provided below, upon the Distribution Date, the Assumed Amounts shall be subject to the same investment elections, and deemed invested in the same investment options, that were controlling under the Duke Plan immediately prior to the Distribution Date until a new election is made in accordance with the terms of this Plan, which by its terms, supersedes the prior election; provided, however, that unless otherwise provided below, an investment election relating to the “DECS Investment Option” under the Duke Plan is deemed to apply to the SECS Investment Option. Notwithstanding the preceding sentence, the following additional provisions shall apply to the deemed investment of the Assumed Amounts:

(i) Any Assumed Amounts that, immediately prior to the Distribution Date, were invested in the investment option that credited interest at the fixed rates applicable under the Duke Power Company Compensation Deferral Plan for Outside Directors as it existed on December 31, 1996 (the “Fixed Interest Investment Option”) and the Duke Energy Corporation Retirement Savings Plan’s Money Market Fund under the Duke Plan (the “Money Market Fund”) shall continue to be invested in such options. A Participant (or, if the Participant is deceased, the Participant’s Beneficiary) may elect to transfer amounts from such investment options to any open investment option, but the Fixed Interest Investment Option and the Money Market Fund shall be closed to additional deferrals and to transfers from any other investment option.

4.5 Corporate Transactions. If there shall occur any merger, consolidation, liquidation, issuance of rights or warrants to purchase securities, recapitalization, reclassification, stock dividend, spin-off, split-off, stock split, reverse stock split or other distribution with respect to the shares of Duke or the Company, or any similar corporate transaction or event in respect of such shares, then the Compensation Committee shall, in the manner

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and to the extent that it deems appropriate and equitable to the Participants and consistent with the terms of this Plan, cause a proportionate adjustment to be made in number and kind of shares deemed held under the Plan. Moreover, in the event of any such transaction or event, the Compensation Committee, in its discretion, may provide in substitution for any or all outstanding shares under the Plan such alternative consideration as it, in good faith, may determine to be equitable under the circumstances.

ARTICLE V

VESTING

5.1 Generally. A Participant is 100% vested in his Account except to the extent otherwise provided in Section 5.2.

5.2 Assumed Amounts. The portion of the Assumed Amounts that is attributable to the Participant’s participation in the Duke Retirement Plan, as adjusted for investment performance after December 31, 1996, shall vest upon Separation From Service (i) on account of death or disability, (ii) after attaining age 62, or (iii) on account of, or after, a Change in Control. Otherwise, such portion, as so adjusted, shall be forfeited upon Separation From Service.

ARTICLE VI

PAYMENT OF BENEFITS

6.1 Amount. Except as otherwise provided in Section 4.3 or Section 5.2, following Separation from Service, a Participant will receive, or will begin to receive, payment of his benefits under this Plan, which consist of the portion of his Account that is vested, as determined under Article V.

6.2 Payment Election.

(a) A Nonemployee Director who is eligible to participate in the Plan under Section 3.2 must elect his form of benefit payment before earning any Compensation that is deferred under the Plan and before any Phantom Stock Units are credited to the Participant’s Account. Such election is made by completing the form prescribed by the Company and filing the completed form with, and acceptance by, the Company. Failure to timely elect a benefit payment form shall result in a deemed election of five annual installment payments. The election of a benefit payment form is irrevocable, except that a Participant may change his benefit payment form election by completing a new election form and filing the completed form with, and acceptance by, the Company; provided, however, that the Nonemployee Director has not filed a payment election form within the prior 12 months. With respect to amounts deferred under Sub-Plan II (as defined in Section 11.6), except where the payment of the Participant’s benefit is due to death or disability (within the meaning of Code Section 409A), (i) a Participant’s election to change the form of benefit payment shall become effective one year from the date on which the election form was filed with the Company, but only if the Participant continued to serve on the Board of Directors throughout such one-year period, and (ii) any lump sum or installment form of payment that is changed by the Participant’s election pursuant to this paragraph will be paid or commence being paid not earlier than five years from the date such payment would otherwise have been paid.

(b) The alternative forms of benefit payment under the Plan are:

(1) Single lump sum payment;

(2) Five annual installments;

(3) Ten annual installments.

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(c) If the Participant is to be paid in a single lump sum payment, the Participant will receive a single cash payment equal to the balance of the vested portion of the Participant’s Account that is then invested in any investment option other than the SECS Investment Option or the Spectra Stock Deferral Investment Option. The balance of the vested portion of the Participant’s Account that is then invested in the SECS Investment Option and the Spectra Stock Deferral Investment Option will be paid in whole shares of Company common stock, valued at Fair Market Value on the last day of the month that immediately precedes the month of payment, with any fractional share paid in cash. Cash payment amounts will be calculated as of the last day of the month, and after any interest credited at fixed rate(s) has been allocated for the month, that immediately precedes the month of payment. A single lump sum payment shall be paid as soon as administratively feasible after the cash amount and number of whole shares of Company common stock that are to be included in the payment have been determined, including the cash amount for any fractional share, but not later than sixty (60) days after Separation From Service, as provided under Sections 4.3 and 5.2. To the extent that the delivery of any shares of Company common stock to a Participant under this Plan otherwise would cause all or any portion of the Plan to be considered an “equity compensation plan” as such term is defined in Section 303A(8) of the New York Stock Exchange Listed Company Manual or any successor rule (the “Listed Company Manual”), then such shares shall be paid from, and shall count against the share reserve of, a Company-sponsored “equity compensation plan” designated by the Compensation Committee that complies with the shareholder approval requirements contained in the Listed Company Manual.

(d) If a Participant is to be paid in either five or ten annual installments, the cash amount and number of whole shares of Company common stock to be included in a particular annual installment will be determined by the Company utilizing the same valuation methodology provided in Section 6.2(c), applied as of the December 31 that immediately precedes the month of payment of that installment, and divided by the installments then remaining, to obtain the cash amount and the number of whole shares of Company common stock, including the cash amount for any fractional share, to be paid in the current installment. Notwithstanding the previous sentence, the first annual installment payment will be determined using the same methodology, but applied as of the last day of the month that immediately precedes the payment of such first annual installment. An annual installment shall be paid as promptly as administratively feasible after the cash amount and number of whole shares of Company common stock, including the cash amount for any fractional share, that are to be included in the installment have been determined, but payments must commence not later than sixty (60) days after Separation From Service, as provided under Sections 4.3 and 5.2, and each successive installment payment shall be paid not later than sixty (60) days after each December 31st following such Separation From Service.

6.3 Source of Payments. All payments under the Plan will be made from the general funds of the Company. The Company may, at its discretion, establish a grantor trust, commonly known as a “rabbi” trust, to hold Company assets, which may include, shares of Company common stock from which the Company may make benefit payments.

ARTICLE VII

DEATH BENEFITS

7.1 Beneficiary Designation. In accordance with procedures established by the Company, each Participant shall designate a Beneficiary or Beneficiaries to receive payment of his vested unpaid Account upon his death, as provided in Section 7.3 or Section 7.4 below.

7.2 No Beneficiary. If a deceased Participant did not designate a Beneficiary, or if the designated Beneficiary should predecease the Participant or be the Participant’s estate, the death benefit of the Participant shall be paid to the estate of the Participant in a single cash payment within sixty (60) days following the date of the Participant’s death.

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7.3 Death Before Payment Begins. If a Participant should die before Plan benefits have commenced, payments will be made to his or her Beneficiary, as a death benefit, in the same alternate form selected by the Participant under Section 6.2(b), except where Section 7.2 would be applicable.

7.4 Death After Payment Begins. If a Participant should die after Plan benefits have commenced, payments will continue to be made, as a death benefit, to his or her Beneficiary or Beneficiaries in the alternate form selected by the Participant, except where Section 7.2 would be applicable.

7.5 Payment Timing. All payments made to a Participant’s beneficiary or estate shall be made in accordance with the timing of payment requirements of Article VI.

ARTICLE VIII

AMENDMENT AND TERMINATION

8.1 Amendment and Termination.

The Board of Directors may, in its discretion:

(i) TERMINATE THE PLAN WITH RESPECT TO FUTURE PARTICIPANTS OR FUTURE BENEFIT accruals for current Participants; and

(ii) Amend the Plan in any respect, at any time.

No such termination or amendment may reduce the amount of any then accrued benefit of any Participant and any attempt to do so shall be void.

ARTICLE IX

ADMINISTRATION

9.1 Plan Sponsor. The Company is the Plan sponsor.

9.2 Named Fiduciary. The Compensation Committee is the named fiduciary of the Plan and as such shall have the authority to control and manage the operation and administration of the Plan except as otherwise expressly provided in this Plan document. The named fiduciary may designate persons other than the named fiduciary to carry out fiduciary responsibilities under the Plan. Any such allocation or designation must be in writing and must be accepted in writing by any such other person.

9.3 Plan Administrator. The Compensation Committee is the administrator of the Plan. As administrator, the Compensation Committee has the authority (without limitation as to other authority) to delegate its duties to agents and to make rules and regulations that it believes are necessary or appropriate to carry out the Plan. The Compensation Committee has the discretion as a Plan fiduciary (i) to interpret and construe the terms and provisions of the Plan (including any rules or regulations adopted under the Plan), (ii) to determine questions of eligibility to participate in the Plan and (iii) to make factual determinations in connection with any of the foregoing. A decision of the Compensation Committee with respect to any matter pertaining to the Plan including, without limitation, the individuals determined to be Participants, the benefits payable, and the construction or interpretation of any provision thereof, shall be conclusive and binding upon all persons and entities. No Compensation Committee member shall participate in any decision of the Compensation Committee that would directly and specifically affect the timing or amount of his or her benefits under the Plan, except to the extent that such decision applies to all Participants under the Plan.

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ARTICLE X

CLAIMS PROCEDURE

10.1 Claim. A person with an interest in the Plan shall have the right to file a claim for benefits under the Plan and to appeal any denial of a claim for benefits. Any request for a Plan benefit or to clarify the claimant’s rights to future benefits under the terms of the Plan shall be considered to be a claim.

10.2 Written Claim. A claim for benefits will be considered as having been made when submitted in writing by the claimant (or by such claimant’s authorized representative) to the Compensation Committee. No particular form is required for the claim, but the written claim must identify the name of the claimant and describe generally the benefit to which the claimant believes he is entitled. The claim may be delivered personally during business hours or mailed to the Compensation Committee.

10.3 Compensation Committee Determination. The Compensation Committee will determine whether, or to what extent, the claim may be allowed or denied under the terms of the Plan. If the claim is wholly or partially denied, the claimant shall be so informed by written notice 90 days after the day the claim is submitted unless special circumstances require an extension of time for processing the claim. If such an extension of time for processing is required, written notice of the extension shall be furnished to the claimant prior to the termination of the initial 90-day period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan expects to render the final decision. If notice of denial of a claim (in whole or in part) is not furnished within the initial 90-day period after the claim is submitted (or, if applicable, the extended 90-day period), the claimant shall consider that his claim has been denied just as if he had received actual notice of denial.

10.4 Notice of Determination. The notice informing the claimant that his claim has been wholly or partially denied shall be written in a manner calculated to be understood by the claimant and shall include:

(i) The specific reason(s) for the denial.

(ii) Specific reference to pertinent Plan provisions on which the denial is based.

(iii) A description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary.

(iv) Appropriate information as to the steps to be taken if the claimant wishes to submit his claim for review.

10.5 Appeal. If the claim is wholly or partially denied, the claimant (or his authorized representative) may file an appeal of the denied claim with the Compensation Committee requesting that the claim be reviewed. The Compensation Committee shall conduct a full and fair review of each appealed claim and its denial. Unless the Compensation Committee notifies the claimant that due to the nature of the benefit and other attendant circumstances he is entitled to a greater period of time within which to submit his request for review of a denied claim, the claimant shall have 60 days after he (or his authorized representative) receives written notice of denial of his claim within which such request must be submitted to the Compensation Committee.

10.6 Request for Review. The request for review of a denied claim must be made in writing. In connection with making such request, the claimant or his authorized representative may:

(i) Review pertinent documents.

(ii) Submit issues and comments in writing.

10.7 Determination of Appeal. The decision of the Compensation Committee regarding the appeal shall be promptly given to the claimant in writing and shall normally be given no later than 60 days following the receipt of the request for review. However, if special circumstances (for example, if the Compensation Committee decides to hold a hearing on the appeal) require a further extension of time for processing, the decision shall be

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rendered as soon as possible, but no later than 120 days after receipt of the request for review. However, if the Compensation Committee holds regularly scheduled meetings at least quarterly, a decision on review shall be made by no later than the date of the meeting which immediately follows the Plan’s receipt of a request for review, unless the request is filed within 30 days preceding the date of such meeting. In such case, a decision may be made by no later than the date of the second meeting following the Plan’s receipt of the request for review. If special circumstances (for example, if the Compensation Committee decides to hold a hearing on the appeal) require a further extension of time for processing, the decision shall be rendered as soon as possible, but no later than the third meeting following the Plan’s receipt of the request for review. If special circumstances require that the decision will be made beyond the initial time for furnishing the decision, written notice of the extension shall be furnished to the claimant (or his authorized representative) prior to the commencement of the extension. The decision on review shall be in writing and shall be furnished to the claimant or his authorized representative within the appropriate time for the decision. If a decision on review is not furnished within the appropriate time, the claim shall be deemed to have been denied on appeal.

10.8 Hearing. The Compensation Committee may, in its sole discretion, decide to hold a hearing if it determines that a hearing is necessary or appropriate in order to make a full and fair review of the appealed claim.

10.9 Decision. The decision on review shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, as well as specific references to the pertinent Plan provisions on which the decision is based.

10.10 Exhaustion of Appeals. A person must exhaust his rights to file a claim and to request a review of the denial of his claim before bringing any civil action to recover benefits due to him under the terms of the Plan, to enforce his rights under the terms of the Plan, or to clarify his rights to future benefits under the terms of the Plan.

10.11 Compensation Committee’s Authority. The Compensation Committee shall exercise its responsibility and authority under this claims procedure as a fiduciary and, in such capacity, shall have the discretionary authority and responsibility (i) to interpret and construe the Plan and any rules or regulations under the Plan, (ii) to determine the eligibility of Nonemployee Directors to participate in the Plan, and the rights of Participants to receive benefits under the Plan, and (iii) to make factual determinations in connection with any of the foregoing.

ARTICLE XI

GENERAL PROVISIONS

11.1 No Assignment. Except as provided under Section 11.2 with respect to a DRO, no right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge. Any attempt to anticipate, alienate, sell, assign, pledge, encumber or charge these benefits shall be void. No right or benefit under this Plan shall in any manner be liable for or subject to the debts, contracts, liabilities, or torts of the person entitled to the benefit. If any Participant or Beneficiary under the Plan should become bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber or charge any right to a benefit hereunder, then the right or benefit, in the discretion of the Committee, shall cease. In these circumstances, the Committee may hold or apply the benefit payment or payments, or any part of it, for the benefit of the Participant or his Beneficiary, the Participant’s spouse, children, or other dependents, or any of them, in any manner and in any portion that the Committee may deem proper.

11.2 Domestic Relations Order. The anti-alienation restrictions of Section 11.1 shall not apply to a domestic relations order (as defined in Code Section 414(p)(1)(B)) (a “DRO”). The Committee may direct the acceleration of payment of all or a portion of a Participant’s Account and pay such amount to an individual other than the

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Participant to the extent necessary to fulfill the requirements of a DRO. The rules set forth in Section 6.2(a) governing subsequent changes in the Participant’s benefit payment election shall not apply to any change in the form and timing of payment to the extent that such election is reflected in, or made in accordance with, the terms of a DRO.

11.3 No Liability. No right or benefit hereunder shall in any manner be liable for or subject to the debts, contracts, liabilities, or torts of the person entitled to benefits under this Plan.

11.4 Unsecured Promise. The Company’s obligations under this Plan shall be as unfunded and unsecured promise to pay. The Company shall not be obligated under any circumstances to fund its financial obligations under this Plan. The Company may establish a grantor trust to assist it in meeting its obligations under this Plan. The Company shall not be obligated to establish such a trust, and if established, the Company shall not be obligated to make contributions to the trust.

11.5 Governing Law. This Plan shall be construed and administered in accordance with the laws of the State of Texas to the extent that such laws are not preempted by Federal law.

11.6 Compliance with Code Section 409A. The Plan is divided into two separate deferred compensation sub-plans, one of which shall be named “Sub-Plan I” and the other shall be named “Sub-Plan II”. Sub-Plan I shall include only “amounts deferred” before January 1, 2005 (within the meaning of Code Section 409A) under the Duke Plan, and earnings thereon, and such deferred compensation shall be subject to the applicable provisions of the Duke Plan as in effect on October 3, 2004, as modified herein, and as Sub-Plan I is subsequently amended or otherwise changed, except as would result in such deferred compensation becoming subject to Code Section 409A. The adoption and amendment of the Plan is not intended to be a “material modification” (within the meaning of Code Section 409A) with respect to amounts governed by Sub-Plan I. Sub-Plan II shall include only “amounts deferred” after December 31, 2004, and earnings thereon, and such deferred compensation shall be subject to the provisions of the Plan as in effect on the Distribution Date, as subsequently amended or otherwise changed. The Company intends Sub-Plan II to comply with the provisions of Code Section 409A. Sub-Plan II shall be construed, administered and governed in a manner that effectuates such intent, and no action shall be taken that would be inconsistent with such intent. To the extent that any terms of the Plan are ambiguous, such terms shall be interpreted as necessary to comply with Code Section 409A.

IN WITNESS WHEREOF, this amendment and restatement of the Plan has been executed on behalf of the Company this 1st day of May 2012.

SPECTRA ENERGY CORP
By:	/s/ Dorothy M. Ables
Name:	Dorothy M. Ables
Title:	Chief Administrative Officer

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EX-10.3

EXHIBIT 10.3

SPECTRA ENERGY CORP

EXECUTIVE CASH BALANCE PLAN

(As Amended and Restated Effective as of May 1, 2012)

TABLE OF CONTENTS

ARTICLE I PURPOSE OF PLAN		4
ARTICLE II DEFINITIONS		4
ARTICLE III ELIGIBILITY		6
3.1	General	6
3.2	Assumed Amounts	6
ARTICLE IV BENEFITS		7
4.1	General	7
4.2	Make-Whole Benefit	7
4.3	Supplemental Credits	7
4.4	Interest Credits	7
4.5	Assumed Amounts	7
ARTICLE V VESTING		8
ARTICLE VI PAYMENT OF BENEFITS		8
6.1	Benefit Payments	8
6.2	Forms of Benefit Payment	9
6.3	Cash Payment Only	10
6.4	Financial Hardship	10
6.5	Six-Month Delay	10
ARTICLE VII DEATH BENEFITS		10
7.1	Beneficiary Designation	10
7.2	No Beneficiary	10
7.3	Death Before Payment Begins	10
7.4	Death After Payment Begins	10
7.5	Supplemental Security Plan	10
ARTICLE VIII AMENDMENT AND TERMINATION		11
ARTICLE IX ADMINISTRATION		11
9.1	Top-Hat Plan	11
9.2	Plan Operation and Administration	11
9.3	Plan Administrator	11
ARTICLE X CLAIMS PROCEDURE		11
10.1	Claim	11
10.2	Written Claim	12
10.3	Committee Determination	12
10.4	Notice of Determination	12
10.5	Appeal	12
10.6	Request for Review	12
10.7	Determination of Appeal	12
10.8	Hearing	13
10.9	Decision	13
10.10	Exhaustion of Appeals	13
10.11	Committee’s Authority	13
ARTICLE XI NATURE OF COMPANY’S OBLIGATION		13
11.1	Unsecured Promise	13
11.2	No Right to Specific Assets	13
11.3	Plan Provisions	13

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ARTICLE XII GENERAL PROVISIONS		14
12.1	No Right to Employment	14
12.2	No Assignment	14
12.3	Domestic Relations Order	14
12.4	Withholding	14
12.5	Governing Law	14
12.6	Compliance with Code Section 409A	14

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SPECTRA ENERGY CORP

EXECUTIVE CASH BALANCE PLAN

ARTICLE I

PURPOSE OF PLAN

The purposes of the Spectra Energy Corp Executive Cash Balance Plan (the “Plan”) are (i) to provide additional retirement benefits for a select group of management or highly compensated employees and (ii) to provide for the payment of certain amounts deferred under the predecessor Duke Energy Corporation Executive Cash Balance Plan I and II. The Plan is effective as of the Distribution Date (as defined below), and is hereby amended and restated effective as of May 1, 2012. The Plan is intended to be a nonqualified, unfunded plan of deferred compensation for a select group of management or highly compensated employees that qualifies as a top-hat plan that is exempt from substantially all of the requirements of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and shall be so interpreted and administered.

ARTICLE II

DEFINITIONS

Wherever used herein, a pronoun or adjective in the masculine gender includes the feminine gender, the singular includes the plural, and the following terms have the following meanings unless a different meaning is clearly required by the context:

2.1. “Account” means the record of contributions and adjustments thereto maintained with respect to each Participant pursuant to Article IV.

2.2. “Beneficiary” means the person or persons designated by a Participant, or by another person entitled to receive benefits hereunder, to receive benefits following the death of such person.

2.3. “Board of Directors” or “Board” means the Board of Directors of Spectra Energy Corp.

2.4. “Change in Control” shall be deemed to have occurred upon:

(i) an acquisition subsequent to the Distribution Date hereof by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (A) the then outstanding shares of common stock of Spectra Energy Corp or (B) the combined voting power of the then outstanding voting securities of Spectra Energy Corp entitled to vote generally in the election of directors; excluding, however, the following: (1) any acquisition directly from Spectra Energy Corp, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from Spectra Energy Corp, (2) any acquisition by Spectra Energy Corp and (3) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by Spectra Energy Corp or its affiliated companies;

(ii) during any period of two (2) consecutive years (not including any period prior to the Distribution Date), individuals who at the beginning of such period constitute the Board of Directors (and any new directors whose election by the Board of Directors or nomination for election by the Spectra Energy Corp’s shareholders was approved by a vote of at least 2/3 of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was so approved) cease for any reason (except for death, disability or voluntary retirement) to constitute a majority thereof;

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(iii) the consummation, after the Distribution Date, of a merger, consolidation, reorganization or similar corporate transaction, which has been approved by the shareholders of Spectra Energy Corp, whether or not Spectra Energy Corp is the surviving corporation in such transaction, other than a merger, consolidation, or reorganization that would result in the voting securities of Spectra Energy Corp outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the combined voting power of the voting securities of Spectra Energy Corp (or such surviving entity) outstanding immediately after such merger, consolidation or reorganization; or

(iv) the consummation, after the Distribution Date, of (A) the sale or other disposition of all or substantially all of the assets of Spectra Energy Corp or (B) a complete liquidation or dissolution of Spectra Energy Corp, which has been approved by the shareholders of Spectra Energy Corp;

provided that in no event shall a Change in Control be deemed to have occurred by reason of any of the events resulting from the separation transaction pursuant to which Spectra Energy Corp becomes a separate publicly-held corporation for the first time.

2.5. “Code” means the Internal Revenue Code of 1986, as amended.

2.6. “Committee” means the Compensation Committee of the Board of Directors or its delegate.

2.7. “Company” means Spectra Energy Corp and its affiliated companies.

2.8. “Compensation” means “Compensation” as defined in the Retirement Cash Balance Plan but without regard to the limitations of Code Section 401(a)(17) and including employee deferrals (except for deferrals of long-term incentive awards) under the Spectra Energy Corp Executive Savings Plan.

2.9. “Distribution Date” has the meaning given such term in the Separation and Distribution Agreement by and between Duke Energy Corporation and Spectra Energy Corp.

2.10. “Duke” means Duke Energy Corporation.

2.11. “Duke Plan” means, collectively, the Duke Energy Corporation Executive Cash Balance Plans I and II.

2.12. “Employee” means a person employed by the Company.

2.13. “Equalization Plan” means, to the extent maintained, the Spectra Energy Corp Retirement Benefit Equalization Plan.

2.14. “Interest Credit” means the amount determined by multiplying the balance of a cash balance account by the Interest Factor for a month.

2.15. “Interest Factor” means the interest rate determined by the formula (1 + i)^(1/12) - 1, where “i” equals the yield on 30-year Treasury Bonds as published in the Federal Reserve Statistical Release H.15 for the end of the third full business week of the month prior to the beginning of the calendar quarter for which the monthly accrual is being applied, but not more than an annual percentage rate of 9% and not less than an annual percentage rate of 4%.

2.16. “Make-Whole Account” means the account described in Section 4.2.

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2.17. “Make-Whole Benefit” means the benefit provided pursuant to Section 4.2 of the Plan.

2.18. “Participant” means an Employee who is entitled to receive benefits from the Plan.

2.19. “Pay Credit” means a credit that is added to a Participant’s Make-Whole Account pursuant to Section 4.2.

2.20. “Retirement Cash Balance Plan” means (i) with respect to benefits governed by Sub-Plan II, the Spectra Energy Retirement Cash Balance Plan as in effect from time to time, and (ii) with respect to benefits governed by Sub-Plan I, the Duke Energy Retirement Cash Balance Plan as in effect on October 3, 2004, without giving effect to amendments adopted thereafter.

2.21. “Separation From Service” means the Participant’s separation from service with the Company within the meaning of Code Section 409A.

2.22. “Specified Employee” means a Participant who is a “specified employee” (as defined in Code Section 409A(2)(B)(i)) of the Company (or an entity which is considered to be a single employer with the Company under Code Section 414(b) or 414(c)), as determined under Code Section 409A at any time during any twelve (12) month period ending on December 31, but only if the Company has any stock that is publicly traded on an established securities market or otherwise. Notwithstanding the foregoing, a Participant will be deemed to be a Specified Employee for the period of April 1 through March 31 following such December 31, except as otherwise may be required under Code Section 409A.

2.23. “Sub-Plan I” and “Sub-Plan II” have the meanings given such terms in Section 12.6.

2.24. “Supplemental Benefit” means the benefit provided under Section 4.3 of the Plan.

2.25. “Supplemental Credit” means a credit that is added to a Participant’s Supplemental Account pursuant to Section 4.3.

2.26. “Supplemental Retirement Plan” means the Supplemental Retirement Plan for Employees of Duke Power Company as it existed on December 31, 1996.

2.27. “Supplemental Security Plan” means the Duke Power Company Supplemental Security Plan as it existed on December 31, 1996.

ARTICLE III

ELIGIBILITY

3.1 General. Any Employee designated by the Committee shall be eligible to participate in the Plan and shall remain eligible as long as he continues to be an Employee or until designated ineligible by the Committee. Notwithstanding the foregoing, an Employee who is not a member of a “select group of management or highly compensated employees” within the meaning of ERISA, may not participate in the Plan. Participants shall not receive any benefits under the terms of the Supplemental Retirement Plan, the Supplemental Security Plan, the Equalization Plan or any comparable plan maintained by the Company.

3.2 Assumed Amounts. Any individual with respect to whom “Assumed Amounts” (as defined in Section 4.5) are credited hereunder shall automatically participate, and be a “Participant,” in the Plan with respect to such Assumed Amounts as of the Distribution Date.

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ARTICLE IV

BENEFITS

4.1 General. The Plan provides a Make-Whole Benefit and may provide a Supplemental Benefit. Each Participant shall have a “Make-Whole Account”, which is a bookkeeping account established under this Plan and shall be eligible for a Make-Whole Benefit. The Committee will determine whether a Participant is to be eligible for a Supplemental Benefit, and in such case a “Supplemental Account,” which is a bookkeeping account, shall be established.

4.2 Make-Whole Benefit. Under the Make-Whole Benefit, for any month that a Participant is eligible to participate in this Plan, the Participant’s Make-Whole Account shall receive a Pay Credit equal to the excess, if any, of (a) the pay credit that would have been provided under the Retirement Cash Balance Plan for the month if the Retirement Cash Balance Plan used the definition of Compensation set forth herein and, to the extent determined by the Committee from time to time, other types of excluded pay were treated as eligible compensation under such Plan; over (b) the pay credit for the month that is actually made to the Participant’s account under the Retirement Cash Balance Plan. A Participant, while “Disabled” as defined in the Retirement Cash Balance Plan and continuing to receive pay credits to the Participant’s account under the Retirement Cash Balance Plan, shall continue to receive Pay Credits to the Participant’s Make-Whole Account determined on the same basis as his continued pay credits under the Retirement Cash Balance Plan, and based upon his eligible Compensation immediately prior to disability.

In addition, the Make-Whole Benefit provides a Pay Credit to the Participant’s Make-Whole Account equal to any reduction in a benefit under the Retirement Cash Balance Plan resulting from the limitations imposed by Code Section 415. Where an opening account balance under the Retirement Cash Balance Plan has been established for a Participant, the Committee, in its sole discretion, may establish an opening balance for the Participant’s Make-Whole Account that is designed to provide a transition benefit comparable to the benefit provided through the Retirement Cash Balance Plan opening account balance, but without regard to the limitations imposed by Code Sections 401(a)(17) or 415. If the value of the benefit which a vested Participant had accrued under the Supplemental Retirement Plan as of December 31, 1996, is greater than the value of the Participant’s Make-Whole Account on the date the Participant retires, such higher value shall apply.

4.3 Supplemental Credits. A Participant’s Supplemental Account shall receive such Supplemental Credits, in such amounts and at such times, as the Committee, in its sole discretion, may determine. Notwithstanding Sections 4.3 and 4.4 to the contrary, the Minimum Benefit feature of Section 4.3(e) of the Duke Plan, as in effect prior to January 1, 1999, is preserved herein and incorporated by reference.

4.4 Interest Credits. An Interest Credit will be added to a Participant’s Make-Whole Account and to a Participant’s Supplemental Account as of the end of each calendar month ending prior to the month in which the respective account is fully distributed or forfeited. The amount of the Interest Credit for a month will equal the balance of the respective account as of the end of the prior month (after adding any Pay Credit, Supplemental Credit and Interest Credit for the prior month and subtracting any payment or forfeiture for the prior month) multiplied by the Interest Factor for the month. Notwithstanding the foregoing, Interest Credits to the Supplemental Account under Sub-Plan I of a Participant whose employment with the Company terminates before attaining the earliest retirement age under the Retirement Cash Balance Plan will be suspended beginning with the month during which employment terminates and will not resume until the month following the month during which payment of the Supplemental Benefit commences.

4.5 Assumed Amounts. The Company has assumed the obligations under the Duke Plan with respect to certain Participants who previously were employees of Duke or its affiliates (“Assumed Amounts”). As a result, a Participant who was a participant in the Duke Plan shall have (i) an initial balance in his or her Make-Whole Account equal to the balance in his or her Make-Whole Account under the Duke Plan immediately prior to the

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Distribution Date, and (ii) an initial balance in his or her Supplemental Account equal to the balance, if any, in his or her Supplemental Account under the Duke Plan immediately prior to the Distribution Date. The Assumed Amounts credited to Accounts hereunder shall remain subject to the same vesting provisions as in effect under the Duke Plan, and shall remain subject to the same distribution and beneficiary designation elections that were controlling under the Duke Plan immediately prior to the Distribution Date until a new election is made in accordance with the terms of this Plan that by its terms supersedes the prior election.

ARTICLE V

VESTING

Unless the Committee provides otherwise for a particular Participant at the time the Participant initially becomes eligible to participate in the Plan or at the time of an award of a particular Supplemental Credit (and any Interest Credits thereto), a Participant will become fully vested in the Participant’s Make-Whole Account and the Participant’s Supplemental Account, if any, (i) when the Participant becomes vested under the Retirement Cash Balance Plan, or (ii) the Participant’s employment with the Company terminates on account of the Participant’s death or the Participant having become “Disabled”, as defined in the Retirement Cash Balance Plan. If a Participant’s employment with the Company terminates and the Participant is not fully vested, the unvested portion of the Participant’s Make-Whole Account and of the Participant’s Supplemental Account, if any, shall be immediately forfeited and no benefit under the Plan shall be paid with respect thereto.

In the event of a Change in Control, all Accounts shall become 100% fully and immediately vested and non-forfeitable, and shall thereafter be maintained and paid in accordance with the terms of this Plan.

ARTICLE VI

PAYMENT OF BENEFITS

6.1 Benefit Payments. A Participant who incurs a Separation From Service prior to the Participant’s earliest retirement age under the Retirement Cash Balance Plan will receive, or will begin to receive, payment of his vested Make-Whole Account and his vested Supplemental Account, if any, as soon as administratively feasible following the month in which the Participant attains age 55. A Participant who incurs a Separation From Service after the Participant’s earliest retirement age under the Retirement Cash Balance Plan will receive, or will begin to receive, payment of his vested Make-Whole Account and his vested Supplemental Account, if any, as soon as administratively feasible following the month in which the Participant’s employment terminates. Notwithstanding the foregoing, a Participant who incurs a Separation From Service on or after December 31, 2006 will receive, or will begin to receive, payment of his vested Make Whole Account under Sub-Plan II and his vested Supplemental Account, if any, under Sub-Plan II as soon as administratively feasible following the month in which the Participant’s employment terminates. A Participant, while “Disabled” (as defined in the Retirement Cash Balance Plan), and continuing to receive pay credits to the Participant’s account under the Retirement Cash Balance Plan, shall not receive payment of benefits during the period the Participant receives such pay credits, any other Participant who incurs a Separation From Service and whose Make-Whole Account and Supplemental Account, if any, have a combined balance, as of the last day of the month during which employment terminated, of less than $25,000 will receive payment of his vested Make-Whole Account and his vested Supplemental Account, if any, in a single sum, as soon as administratively feasible following the month in which the Participant’s employment terminates under this Plan. Except as provided in Section 6.5, payment of a Participant’s vested Make-Whole Account and his vested Supplemental Account shall be paid or begin to be paid not later than sixty (60) days following the month in which such amounts become payable.

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6.2 Forms of Benefit Payment.

(a) Participants who are designated as eligible after the Distribution Date must elect a form of benefit payment within 30 days after being designated eligible to participate in the Plan by completing such form as the Committee shall require and filing the completed form with, and acceptance by, the Committee. Failure to timely elect a form of benefit payment shall result in a deemed election of a single lump sum payment. A Participant may change his or her benefit payment election at any time, and from time to time, by completing a new election form as the Committee provides and filing the completed form with, and acceptance by, the Committee; provided, however, that the Participant has not filed a payment election form within the prior 12 months. With respect to amounts deferred under Sub-Plan II, except where the payment of the Participant’s benefit is due to death or disability (within the meaning of Code Section 409A), (i) a Participant’s election to change the form of benefit payment shall become effective one year from the date on which the election form was file with the Committee, but only if the Participant continued in employment throughout such one-year period, and (ii) any lump sum or installment form of payment that is changed by the Participant’s election pursuant to this paragraph will be paid not earlier than five years from the date that such payment would otherwise have been paid.

(b) The forms of benefit payment available under the Plan are:

(1) single sum payment;

(2) monthly payments for three years; and

(3) monthly payments for ten years.

At such time as benefits under the Plan become payable with respect to a Participant, such benefits shall be paid in accordance with the benefit payment form then in effect and unless otherwise expressly provided by the Plan.

Notwithstanding the foregoing, if a Participant has previously elected to receive payment of his Account on a monthly basis over a period of 15 years and has commenced payment of his Account pursuant to such election as of December 31, 2009, the Participant shall continue to receive payment of his Account on a monthly basis for the remainder of such 15-year period. If the Participant has previously elected to receive payment of his Account on a monthly basis over a period of 15 years and has not yet commenced payment of his Account pursuant to such election as of December 31, 2009, the Participant shall be permitted to retain such election, but in the event that the Participant makes a subsequent election, only the forms of benefit payment set forth in the first paragraph of this Section 6.2(b) are available.

(c) Under the monthly form of benefit payment, the amount of payment for a particular month shall be calculated as follows:

amount =	V
	N

where
N	represents the number of months remaining in the payment term as of the immediately preceding December 31, except for payments made for the first calendar year, in which case the number of months shall be equal to the number of months in the elected installment form; and
V	represents the balance of the Participant’s Make-Whole Account and the balance of the Participant’s Supplemental Account, if any, determined as of the immediately preceding December 31, except for payments made for the first calendar year, in which case the balances will be determined as of the last day of the month immediately prior to the payment commencement date.

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6.3 Cash Payment Only. Any benefit payment due under the Plan shall be paid in cash.

6.4 Financial Hardship. Upon written request by a Participant, the Committee may distribute to a Participant who is receiving a monthly payment form of distribution, such amount of the remaining balance of the Participant’s vested cash balance account and vested Supplemental Account, if any, which the Committee determines is necessary to provide for a financial hardship suffered by the Participant. For this purpose, “financial hardship” shall mean a severe financial hardship that constitutes an “unforeseeable emergency” within the meaning of Code Section 409A. Notwithstanding the foregoing, if any member of the Committee requests a hardship distribution, then such Committee member shall take no part in the discussion or decision concerning whether such member has suffered a financial hardship, or the amount to be distributed in relief thereof.

6.5 Six-Month Delay. Notwithstanding any provision in this Plan to the contrary, if the payment of any benefit hereunder would be subject to additional taxes and interest under Code Section 409A because the timing of such payment is not delayed as provided in Code Section 409A for a Specified Employee, then if the Participant is a Specified Employee under Code Section 409A, any such payment that the Participant would otherwise be entitled to receive during the first six months following the date of the Participant’s Separation From Service shall be delayed and paid, if in the form of a lump sum payment, or commence, if in the form of installment payments, as applicable, within fifteen (15) business days after the date that is six months following such Separation From Service date, or such earlier date upon which such amount can be paid or provided under Code Section 409A without being subject to such taxation.

ARTICLE VII

DEATH BENEFITS

7.1 Beneficiary Designation. In accordance with procedures established by the Company, each Participant shall designate a Beneficiary or Beneficiaries to receive payment of his vested Make-Whole Account and vested Supplemental Account upon his death, as provided in Section 7.3 or 7.4, and if applicable, Section 7.5, below.

7.2 No Beneficiary. If the Participant does not designate a Beneficiary, or if the Beneficiary who is designated should predecease the Participant, the death benefit for a deceased Participant shall be paid to the estate of the Participant, as the Participant’s Beneficiary, in a single cash payment not later than sixty (60) days following date of the Participant’s death.

7.3 Death Before Payment Begins. If a Participant should die while still employed by the Company or otherwise before payment of any Plan benefits has commenced, payments of any death benefit shall be made to the Participant’s Beneficiary in the same benefit payment form elected by the Participant under Section 6.2, unless the Beneficiary is the estate and in that case, a single cash payment shall be made not later than sixty (60) days following date of the Participant’s death. Notwithstanding the foregoing, if the death benefit is less than $25,000, the death benefit shall automatically be paid to the Participant’s Beneficiary in a single cash payment not later than sixty (60) days following the date of Participant’s death.

7.4 Death After Payment Begins. If a Participant should die after payment of Plan benefits has commenced, payment of any death benefit will be made to the Participant’s Beneficiary as a continuation of the benefit payment form that had been in effect for the Participant, unless the Beneficiary is the estate and in that case, a single cash payment shall be made not later than sixty (60) days following date of the Participant’s death.

7.5 Supplemental Security Plan. If an Employee who was an active participant in the Supplemental Security Plan on December 31, 1996, should die while still employed by the Company, the portion of the death benefit attributable to the Employee’s Supplemental Account shall not be less than the amount determined by multiplying 2.5 times the annualized base rate of pay of the Employee on the date of death.

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ARTICLE VIII

AMENDMENT AND TERMINATION

The Committee retains the sole and unilateral right to terminate, amend, modify or supplement this Plan, in whole or in part, at any time. The Committee may delegate the right to amend the Plan, subject to any limitations it may impose, to an officer of the Company. No such action shall adversely affect a Participant’s right to receive amounts then credited to a Participant’s account with respect to events occurring prior to the date of such amendment.

In the event of a Change in Control, the Plan shall become irrevocable and may not be amended or terminated without the written consent of each Plan Participant who may be affected in any way by such amendment or termination either at the time of such action or at any time thereafter. This restriction in the event of a Change in Control shall be determined by reference to the date any amendment or resolution terminating the Plan is actually signed by an authorized party rather than the date such action purports to be effective.

ARTICLE IX

ADMINISTRATION

9.1 Top-Hat Plan. The Company intends for the Plan to be an unfunded “top-hat” plan for a select group of management or highly compensated employees which is exempt from substantially all of the requirements of Title I of ERISA pursuant to Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA. The Company is the Plan sponsor under Section 3(16)(B) of ERISA.

9.2 Plan Operation and Administration. The Committee shall have the authority to control and manage the operation and administration of the Plan except as otherwise expressly provided in this Plan document. The Committee may designate other persons to carry out fiduciary responsibilities under the Plan.

9.3 Plan Administrator. The Committee is the administrator of the Plan within the meaning Section 3(16)(A) of ERISA. As administrator, the Committee has the authority (without limitation as to other authority) to delegate its duties to agents and to make rules and regulations that it believes are necessary or appropriate to carry out the Plan. The Committee has the discretion (i) to interpret and construe the terms and provisions of the Plan (including any rules or regulations adopted under the Plan), (ii) to determine questions of eligibility to participate in the Plan and (iii) to make factual determinations in connection with any of the foregoing. A decision of the Committee with respect to any matter pertaining to the Plan including without limitation the Employees determined to be Participants, the benefits payable, and the construction or interpretation of any provision thereof, shall be conclusive and binding upon all interested persons. No Committee member shall participate in any decision of the Committee that would directly and specifically affect the timing or amount of his benefits under the Plan, except to the extent that such decision applies to all Participants under the Plan.

ARTICLE X

CLAIMS PROCEDURE

10.1 Claim. A person with an interest in the Plan shall have the right to file a claim for benefits under the Plan and to appeal any denial of a claim for benefits. Any request or application for a Plan benefit or to clarify the claimant’s rights to future benefits under the terms of the Plan shall be considered to be a claim.

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10.2 Written Claim. A claim for benefits will be considered as having been made when submitted in writing by the claimant (or by such claimant’s authorized representative) to the Committee. No particular form is required for the claim, but the written claim must identify the name of the claimant and describe generally the benefit to which the claimant believes he is entitled. The claim may be delivered personally during normal business hours or mailed to the Committee.

10.3 Committee Determination. The Committee will determine whether, or to what extent, the claim may be allowed or denied under the terms of the Plan. If the claim is wholly or partially denied, the claimant shall be so informed by written notice within 90 days after the day the claim is submitted unless special circumstances require an extension of time for processing the claim. If such an extension of time for processing is required, written notice of the extension shall be furnished to the claimant prior to the termination of the initial 90-day period. Such extension may not exceed an additional 90 days from the end of the initial 90-day period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan expects to render the final decision. If notice of denial of a claim (in whole or in part) is not furnished within the initial 90-day period after the claim is submitted (or, if applicable, the extended 90-day period), the claimant shall consider that his claim has been denied just as if he had received actual notice of denial.

10.4 Notice of Determination. The notice informing the claimant that his claim has been wholly or partially denied shall be written in a manner calculated to be understood by the claimant and shall include:

(a) The specific reason(s) for the denial.

(b) Specific reference to pertinent Plan provisions on which the denial is based.

(c) A description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary.

(d) Appropriate information as to the steps to be taken if the claimant wishes to submit his claim for review.

10.5 Appeal. If the claim is wholly or partially denied, the claimant (or his authorized representative) may file an appeal of the denied claim with the Committee requesting that the claim be reviewed. The Committee shall conduct a full and fair review of each appealed claim and its denial. Unless the Committee notifies the claimant that due to the nature of the benefit and other attendant circumstances he is entitled to a greater period of time within which to submit his request for review of a denied claim, the claimant shall have 60 days after he (or his authorized representative) receives written notice of denial of his claim within which such request must be submitted to the Committee.

10.6 Request for Review. The request for review of a denied claim must be made in writing. In connection with making such request, the claimant or his authorized representative may:

(a) Review pertinent documents.

(b) Submit issues and comments in writing.

10.7 Determination of Appeal. The decision of the Committee regarding the appeal shall be promptly given to the claimant in writing and shall normally be given no later than 60 days following the receipt of the request for review. However, if special circumstances (for example, if the Committee decides to hold a hearing on the appeal) require a further extension of time for processing, the decision shall be rendered as soon as possible, but no later than 120 days after receipt of the request for review. However, if the Committee holds regularly scheduled meetings at least quarterly, a decision on review shall be made by no later than the date of the meeting which immediately follows the Plan’s receipt of a request for review, unless the request is filed within 30 days preceding the date of such meeting. In such case, a decision may be made by no later than the date of the second meeting following the Plan’s receipt of the request for review. If special circumstances (for example, if the

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Committee decides to hold a hearing on the appeal) require a further extension of time for processing, the decision shall be rendered as soon as possible, but no later than the third meeting following the Plan’s receipt of the request for review. If special circumstances require that the decision will be made beyond the initial time for furnishing the decision, written notice of the extension shall be furnished to the claimant (or his authorized representative) prior to the commencement of the extension. The decision on review shall be in writing and shall be furnished to the claimant or to his authorized representative within the appropriate time for the decision. If a decision on review is not furnished within the appropriate time, the claim shall be deemed to have been denied on appeal.

10.8 Hearing. The Committee may, in its sole discretion, decide to hold a hearing if it determines that a hearing is necessary or appropriate in order to make a full and fair review of the appealed claim.

10.9 Decision. The decision on review shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, as well as specific references to the pertinent Plan provisions on which the decision is based.

10.10 Exhaustion of Appeals. A person must exhaust his rights to file a claim and to request a review of the denial of his claim before bringing any civil action to recover benefits due to him under the terms of the Plan, to enforce his rights under the terms of the Plan, or to clarify his rights to future benefits under the terms of the Plan.

10.11 Committee’s Authority. The Committee shall exercise its responsibility and authority under this claims procedure as a fiduciary and, in such capacity, shall have the discretionary authority and responsibility (a) to interpret and construe the Plan and any rules or regulations under the Plan, (b) to determine the eligibility of Employees to participate in the Plan, and the rights of Participants to receive benefits under the Plan, and (c) to make factual determinations in connection with any of the foregoing.

ARTICLE XI

NATURE OF COMPANY’S OBLIGATION

11.1 Unsecured Promise. The Company’s obligation to the Participant under this Plan shall be an unfunded and unsecured promise to pay. The rights of a Participant or Beneficiary under this Plan shall be solely those of an unsecured general creditor of the Company. The Company shall not be obligated under any circumstances to set aside or hold assets to fund its financial obligations under this Plan.

11.2 No Right to Specific Assets. Notwithstanding the foregoing, the Company may, in its sole discretion establish such accounts, trusts, insurance policies or arrangements, or any other mechanisms it deems necessary or appropriate to account for or fund its obligations under the Plan. Any assets which the Company may set aside, acquire or hold to help cover its financial liabilities under this Plan are and remain general assets of the Company subject to the claims of its creditors. The Company does not give, and the Plan does not give, any beneficial ownership interest in any assets of the Company to a Participant or Beneficiary. All rights of ownership in any assets are and remain in the Company. Any general asset used or acquired by the Company in connection with the liabilities it has assumed under this Plan shall not be deemed to be held under any trust for the benefit of the Participant or any Beneficiary, and no general asset shall be considered security for the performance of the obligations of the Company. Any asset shall remain a general, unpledged, and unrestricted asset of the Company.

11.3 Plan Provisions. The Company’s liability for payment of benefits shall be determined only under the provisions of this Plan, as it may be amended from time to time.

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ARTICLE XII

GENERAL PROVISIONS

12.1 No Right to Employment. Nothing in this Plan shall be deemed to give any person the right to remain in the employ of the Company or affect the right of the Company to terminate any Participant’s employment with or without cause.

12.2 No Assignment. Except as provided under Section 12.3 with respect to a DRO, no right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge. Any attempt to anticipate, alienate, sell, assign, pledge, encumber or charge these benefits shall be void. No right or benefit under this Plan shall in any manner be liable for or subject to the debts, contracts, liabilities, or torts of the person entitled to the benefit. If any Participant or Beneficiary under the Plan should become bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber or charge any right to a benefit hereunder, then the right or benefit, in the discretion of the Committee, shall cease. In these circumstances, the Committee may hold or apply the benefit payment or payments, or any part of it, for the benefit of the Participant or his Beneficiary, the Participant’s spouse, children, or other dependents, or any of them, in any manner and in any portion that the Committee may deem proper.

12.3 Domestic Relations Order. The anti-alienation restrictions of Section 12.2 shall not apply to a domestic relations order (as defined in Code Section 414(p)(1)(B)) (a “DRO”). The Committee may direct the acceleration of payment of all or a portion of a Participant’s Account and pay such amount to an individual other than the Participant to the extent necessary to fulfill the requirements of a DRO. The rules set forth in Section 6.2(a) governing subsequent changes in the Participant’s benefit payment election shall not apply to any change in the form and timing of payment to the extent that such election is reflected in, or made in accordance with, the terms of a DRO.

12.4 Withholding. Any amount required to be withheld under applicable Federal, state and local tax laws (including any amounts required to be withheld under Code Section 3121(v)) will be withheld in such manner as the Committee will determine and any payment under the Plan will be reduced by the amount so withheld, as well as by any other lawful withholding.

12.5 Governing Law. This Plan shall be construed and administered in accordance with the laws of the State of Texas to the extent that such laws are not preempted by Federal law.

12.6 Compliance with Code Section 409A. The Plan is divided into two separate deferred compensation sub-plans, one of which shall be named “Sub-Plan I” and the other shall be named “Sub-Plan II.” Sub-Plan I shall include only “amounts deferred” before January 1, 2005 (within the meaning of Code Section 409A) under the Duke Plan, and earnings thereon, and such deferred compensation shall be subject to the applicable provisions of the Duke Plan as in effect on October 3, 2004, as modified herein, and as Sub-Plan I is subsequently amended or otherwise changed, except as would result in such deferred compensation being subject to Code Section 409A. The adoption of the Plan is not intended to be a “material modification” (within the meaning of Code Section 409A) with respect to amounts under Sub-Plan I, and shall be construed accordingly. Sub-Plan II shall include only “amounts deferred” after December 31, 2004, and earnings thereon, and such deferred compensation shall be subject to the provisions of the Plan as in effect on the Distribution Date, as subsequently amended or otherwise changed. The Company intends Sub-Plan II to comply with the provisions of Code Section 409A, so as to prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year that is prior to the taxable year or years in which such amounts would otherwise actually be distributed or made available to Participants or Beneficiaries. Sub-Plan II shall be construed, administered, and governed in a manner that effects such intent, and no action shall be taken that would be inconsistent with such intent. To the extent any terms of the Plan are ambiguous, such terms shall be interpreted as necessary to comply with Code Section 409A.

[Signature page follows]

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IN WITNESS WHEREOF, this amendment and restatement of the Plan is executed on behalf of the Company this 1st day of May 2012.

SPECTRA ENERGY CORP
By:	/s/ Dorothy M. Ables
Name:	Dorothy M. Ables
Title:	Chief Administrative Officer

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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: August 8, 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: August 8, 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 June 30, 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: August 8, 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 June 30, 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: August 8, 2012	/s/    J. Patrick Reddy
	J. Patrick Reddy
	Chief Financial Officer

XML

Correction and Change in Presentation Reflected on Condensed Consolidated Statement of Cash Flows (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Proceeds from the issuance of long-term debt		$ 805
Payments for the redemption of long-term debt	(28)	(494)
As previously reported
Proceeds from the issuance of long-term debt		2,424
Payments for the redemption of long-term debt		(2,371)
Non-cash activity
Proceeds from the issuance of long-term debt		(1,567)
Payments for the redemption of long-term debt		1,567
As corrected
Proceeds from the issuance of long-term debt		857
Payments for the redemption of long-term debt		(804)
Revolving credit facility activity
Proceeds from the issuance of long-term debt		(52)
Payments for the redemption of long-term debt		$ 310

XML

Estimated Fair Values of Held to Maturity Securities (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Schedule of Held-to-maturity Securities [Line Items]
Estimated Fair Value	$ 265	$ 162
Canadian Government Securities
Schedule of Held-to-maturity Securities [Line Items]
Estimated Fair Value	111	107
Bankers acceptance notes
Schedule of Held-to-maturity Securities [Line Items]
Estimated Fair Value	$ 154	$ 55

XML

Inventory - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Schedule of Inventory [Line Items]
Natural gas and petroleum products purchased	$ 146	$ 180	$ 579	$ 665
Western Canada Transmission & Processing | Empress Operations
Schedule of Inventory [Line Items]
Natural gas and petroleum products purchased	8
Natural gas and petroleum products purchased, net of tax	$ 6

XML

Condensed Consolidating Statements of Cash Flows (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 602	$ 689
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	375	359
Equity in earnings of unconsolidated affiliates	(209)	(268)
Distributions received from unconsolidated affiliates	197	201
Other	194	357
Net cash provided by (used in) operating activities	1,159	1,338
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(789)	(739)
Investments in and loans to unconsolidated affiliates		(4)
Acquisitions	(30)
Purchases of held-to-maturity securities	(1,490)	(763)
Proceeds from sales and maturities of held-to-maturity securities	1,387	733
Purchases of available-for-sale securities		(930)
Proceeds from sales and maturities of available-for-sale securities	21	1,119
Distributions received from unconsolidated affiliates	11
Other changes in restricted funds	92	8
Other	6	5
Net cash used in investing activities	(792)	(571)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt		805
Payments for the redemption of long-term debt	(28)	(494)
Net decrease in short-term borrowings and commercial paper	15	(258)
Net increase in revolving credit facilities borrowings		(258)
Distributions to noncontrolling interests	(56)	(47)
Proceeds from the issuance of Spectra Energy Partners common units		213
Dividends paid on common stock	(372)	(341)
Other	27	19
Net cash provided by (used in) financing activities	(414)	(361)
Effect of exchange rate changes on cash		2
Net decrease in cash and cash equivalents	(47)	408
Cash and cash equivalents at beginning of period	174	130
Cash and cash equivalents at end of period	127	538
Spectra Energy Corp
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	548	641
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in earnings of subsidiaries	(545)	(641)
Other	(66)	(37)
Net cash provided by (used in) operating activities	(63)	(37)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid on common stock	(372)	(341)
Distributions and advances from (to) affiliates	409	353
Other	26	25
Net cash provided by (used in) financing activities	63	37
Spectra Energy Capital, LLC
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	545	641
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in earnings of subsidiaries	(828)	(935)
Other	153	254
Net cash provided by (used in) operating activities	(130)	(40)
CASH FLOWS FROM FINANCING ACTIVITIES
Net decrease in short-term borrowings and commercial paper	184	(132)
Distributions and advances from (to) affiliates	(55)	173
Net cash provided by (used in) financing activities	129	41
Net decrease in cash and cash equivalents	(1)	1
Cash and cash equivalents at beginning of period	2
Cash and cash equivalents at end of period	1	1
Non-Guarantor Subsidiaries
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	882	983
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	375	359
Equity in earnings of unconsolidated affiliates	(209)	(268)
Distributions received from unconsolidated affiliates	197	201
Other	107	140
Net cash provided by (used in) operating activities	1,352	1,415
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(789)	(739)
Investments in and loans to unconsolidated affiliates		(4)
Acquisitions	(30)
Purchases of held-to-maturity securities	(1,490)	(763)
Proceeds from sales and maturities of held-to-maturity securities	1,387	733
Purchases of available-for-sale securities		(930)
Proceeds from sales and maturities of available-for-sale securities	21	1,119
Distributions received from unconsolidated affiliates	11
Other changes in restricted funds	92	8
Other	6	5
Net cash used in investing activities	(792)	(571)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt		805
Payments for the redemption of long-term debt	(28)	(494)
Net decrease in short-term borrowings and commercial paper	(169)	(126)
Net increase in revolving credit facilities borrowings		(258)
Distributions to noncontrolling interests	(56)	(47)
Proceeds from the issuance of Spectra Energy Partners common units		213
Distributions and advances from (to) affiliates	(354)	(526)
Other	1	(6)
Net cash provided by (used in) financing activities	(606)	(439)
Effect of exchange rate changes on cash		2
Net decrease in cash and cash equivalents	(46)	407
Cash and cash equivalents at beginning of period	172	130
Cash and cash equivalents at end of period	126	537
Eliminations
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	(1,373)	(1,576)
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in earnings of subsidiaries	$ 1,373	$ 1,576

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Available Credit Facilities and Restrictive Debt Covenants (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012
Line of Credit Facility [Line Items]
Total Credit Facilities Capacity	$ 2,888
Outstanding Commercial Paper	1,073
Outstanding Letters of Credit	5
Total	1,078
Available Credit Facilities Capacity	1,810
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	936	[1]
Outstanding Letters of Credit	5	[1]
Total	941	[1]
Available Credit Facilities Capacity	559	[1]
Westcoast Energy Inc. | Multi Year Syndicated
Line of Credit Facility [Line Items]
Expiration Date	2016	[2]
Total Credit Facilities Capacity	295	[2]
Available Credit Facilities Capacity	295	[2]
Union Gas Limited | Multi Year Syndicated
Line of Credit Facility [Line Items]
Expiration Date	2016	[3]
Total Credit Facilities Capacity	393	[3]
Outstanding Commercial Paper	97	[3]
Total	97	[3]
Available Credit Facilities Capacity	296	[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 the Spectra Energy Corp consolidated debt-to-total capitalization ratio, as defined in the agreement, to not exceed 65%. This ratio was 58% at June 30, 2012.

[2] U.S. dollar equivalent at June 30, 2012. The credit facility is 300 million Canadian dollars and contains a covenant that requires the Westcoast Energy Inc. non-consolidated debt-to-total capitalization ratio to not exceed 75%. The ratio was 44% at June 30, 2012.

[3] U.S. dollar equivalent at June 30, 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 65% at June 30, 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 or less. As of June 30, 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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Basic and Diluted Eps Calculations (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2012		Jun. 30, 2011
Earnings Per Share Disclosure [Line Items]
Income from continuing operations, net of tax-controlling interests	$ 215		$ 275		$ 546		$ 625
Income from discontinued operations, net of tax-controlling interests			9		2		16
Net Income-Controlling Interests	$ 215		$ 284		$ 548		$ 641
Weighted-average common shares outstanding
Basic	653		650		652		650
Diluted	655		652		655		652
Basic earnings per common share
Continuing operations	$ 0.33	[1]	$ 0.42	[1]	$ 0.84	[1]	$ 0.96	[1]
Discontinued operations, net of tax			$ 0.02	[1]			$ 0.03	[1]
Total basic earnings per common share	$ 0.33	[1]	$ 0.44	[1]	$ 0.84	[1]	$ 0.99	[1]
Diluted earnings per common share
Continuing operations	$ 0.33	[1]	$ 0.42	[1]	$ 0.83	[1]	$ 0.96	[1]
Discontinued operations, net of tax			$ 0.02	[1]	$ 0.01	[1]	$ 0.02	[1]
Total diluted earnings per common share	$ 0.33	[1]	$ 0.44	[1]	$ 0.84	[1]	$ 0.98	[1]

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

XML

Marketable Securities and Restricted Funds (Tables)

6 Months Ended

Jun. 30, 2012

Estimated Fair Values of Available for Sale Securities

Estimated fair values of AFS securities follow:

	Estimated Fair Value
	June 30, 2012		December 31, 2011
	(in millions)
Corporate debt securities	$	11	$	18
Canadian government securities		—		14
Money market funds		1		3
Total available-for-sale investments	$	12	$	35

Estimated Fair Values of Held to Maturity Securities

Estimated fair values of HTM securities follow:

	Estimated Fair Value
	June 30, 2012		December 31, 2011
	(in millions)
Canadian government securities	$	111	$	107
Bankers acceptances		154		55
Total held-to-maturity investments	$	265	$	162

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Debt and Credit Facilities - Additional Information (Detail) (Spectra Energy Capital, LLC, Covenant Requirement)	Jun. 30, 2012
Debt Instrument [Line Items]
Debt-to-total defined capitalization ratio	58.00%
Maximum
Debt Instrument [Line Items]
Debt-to-total defined capitalization ratio	65.00%

XML

Subsequent Events - Additional Information (Detail) (Algonquin Gas Transmission, LLC, Subsequent Event, Issuance of Debt, 3.51% notes due in 2024, USD $) In Millions, unless otherwise specified	Jul. 17, 2012
Algonquin Gas Transmission, LLC | Subsequent Event | Issuance of Debt | 3.51% notes due in 2024
Subsequent Event [Line Items]
Debt instrument, aggregate principal amount	$ 350
Debt instrument, interest rate	3.51%
Debt instrument, maturity year	2024

XML

New Accounting Pronouncements

6 Months Ended

Jun. 30, 2012

New Accounting Pronouncements

18. New Accounting Pronouncements

There were no significant accounting pronouncements adopted during the six months ended June 30, 2012 that had a material impact on our consolidated results of operations, financial position or cash flows.

XML

Summary Financial Information for DCP Midstream Presented at 100 Percent (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2012		Jun. 30, 2011
Related Party Transaction [Line Items]
Operating revenues	$ 1,112	[1]	$ 1,188	[1]	$ 2,656	[1]	$ 2,800	[1]
Operating expenses	746		786		1,772		1,845
Operating income (loss)	367		402		886		959
Net income	241		307		602		689
Net income attributable to members' interests	215		284		548		641
DCP Midstream, LLC
Related Party Transaction [Line Items]
Operating revenues	2,219		3,304		5,121		6,233
Operating expenses	1,998		2,957		4,692		5,712
Operating income (loss)	221		347		429		521
Net income	185		303		340		428
Net income attributable to members' interests	$ 132		$ 277		$ 276		$ 410

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

XML

Regulatory Matters - Additional Information (Detail) (Union Gas Limited)	6 Months Ended
	Jun. 30, 2012
Union Gas Limited
Public Utilities, Inventory [Line Items]
Distribution rates effective date	Jan. 01, 2013

XML

Consolidating Financial Information (Tables)

6 Months Ended

Jun. 30, 2012

Condensed Consolidating Statement of Operations

Spectra Energy Corp

Condensed Consolidating Statement of Operations

Three Months Ended June 30, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total operating revenues	$	—		$	—	$	1,112	$	—		$	1,112
Total operating expenses		6			—		740		—			746
Gains on sales of other assets and other, net		—			—		1		—			1
Operating income (loss)		(6	)		—		373		—			367
Equity in earnings of unconsolidated affiliates		—			—		91		—			91
Equity in earnings of subsidiaries		216			342		—		(558	)		—
Other income and expenses, net		—			1		17		—			18
Interest expense		—			48		107		—			155
Earnings from continuing operations before income taxes		210			295		374		(558	)		321
Income tax expense (benefit) from continuing operations		(6	)		79		7		—			80
Income from continuing operations		216			216		367		(558	)		241
Income (loss) from discontinued operations, net of tax		(1	)		—		1		—			—
Net income		215			216		368		(558	)		241
Net income—noncontrolling interests		—			—		26		—			26
Net income—controlling interests	$	215		$	216	$	342	$	(558	)	$	215

Spectra Energy Corp

Condensed Consolidating Statement of Operations

Three Months Ended June 30, 2011

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total operating revenues	$	—		$	—	$	1,188	$	—		$	1,188
Total operating expenses		(3	)		—		789		—			786
Operating income		3			—		399		—			402
Equity in earnings of unconsolidated affiliates		—			—		162		—			162
Equity in earnings of subsidiaries		282			425		—		(707	)		—
Other income and expenses, net		—			6		12		—			18
Interest expense		—			51		108		—			159
Earnings from continuing operations before income taxes		285			380		465		(707	)		423
Income tax expense from continuing operations		1			98		26		—			125
Income from continuing operations		284			282		439		(707	)		298
Income from discontinued operations, net of tax		—			—		9		—			9
Net income		284			282		448		(707	)		307
Net income—noncontrolling interests		—			—		23		—			23
Net income—controlling interests	$	284		$	282	$	425	$	(707	)	$	284

Spectra Energy Corp

Condensed Consolidating Statement of Operations

Six Months Ended June 30, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total operating revenues	$	—		$	—	$	2,657	$	(1	)	$	2,656
Total operating expenses		8			—		1,765		(1	)		1,772
Gains on sales of other assets and other, net		—			—		2		—			2
Operating income (loss)		(8	)		—		894		—			886
Equity in earnings of unconsolidated affiliates		—			—		209		—			209
Equity in earnings of subsidiaries		545			828		—		(1,373	)		—
Other income and expenses, net		(1	)		1		34		—			34
Interest expense		—			96		216		—			312
Earnings from continuing operations before income taxes		536			733		921		(1,373	)		817
Income tax expense (benefit) from continuing operations		(13	)		188		42		—			217
Income from continuing operations		549			545		879		(1,373	)		600
Income (loss) from discontinued operations, net of tax		(1	)		—		3		—			2
Net income		548			545		882		(1,373	)		602
Net income—noncontrolling interests		—			—		54		—			54
Net income—controlling interests	$	548		$	545	$	828	$	(1,373	)	$	548

Spectra Energy Corp

Condensed Consolidating Statement of Operations

Six Months Ended June 30, 2011

(Unaudited)

(In millions)

	Spectra Energy Corp		Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total operating revenues	$	—	$	—	$	2,800	$	—		$	2,800
Total operating expenses		—		—		1,845		—			1,845
Gains on sales of other assets and other, net		—		—		4		—			4
Operating income		—		—		959		—			959
Equity in earnings of unconsolidated affiliates		—		—		268		—			268
Equity in earnings of subsidiaries		641		935		—		(1,576	)		—
Other income and expenses, net		—		6		18		—			24
Interest expense		—		99		215		—			314
Earnings from continuing operations before income taxes		641		842		1,030		(1,576	)		937
Income tax expense from continuing operations		—		201		63		—			264
Income from continuing operations		641		641		967		(1,576	)		673
Income from discontinued operations, net of tax		—		—		16		—			16
Net income		641		641		983		(1,576	)		689
Net income—noncontrolling interests		—		—		48		—			48
Net income—controlling interests	$	641	$	641	$	935	$	(1,576	)	$	641

Condensed Consolidating Statement of Comprehensive Income

Spectra Energy Corp

Condensed Consolidating Statements of Comprehensive Income

(Unaudited)

(In millions)

	Spectra Energy Corp		Spectra Capital		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Three Months Ended June 30, 2012
Net income	$	215	$	216	$	368		$	(558	)	$	241
Other comprehensive income
Foreign currency translation adjustments		—		—		(133	)		—			(133	)
Unrealized mark-to-market net gain		—		—		3			—			3
Reclassification of cash flow hedges into earnings		—		—		2			—			2
Pension and benefits impact		3		—		15			—			18
Total other comprehensive income (loss)		3		—		(113	)		—			(110	)
Total comprehensive income, net of tax		218		216		255			(558	)		131
Less: comprehensive income—noncontrolling interests		—		—		24			—			24
Comprehensive income—controlling interests	$	218	$	216	$	231		$	(558	)	$	107
Three Months Ended June 30, 2011
Net income	$	284	$	282	$	448		$	(707	)	$	307
Other comprehensive income
Foreign currency translation adjustments		—		—		57			—			57
Unrealized mark-to-market net loss		—		—		(1	)		—			(1	)
Reclassification of cash flow hedges into earnings		—		—		2			—			2
Pension and benefits impact		2		—		5			—			7
Total other comprehensive income		2		—		63			—			65
Total comprehensive income, net of tax		286		282		511			(707	)		372
Less: comprehensive income—noncontrolling interests		—		—		24			—			24
Comprehensive income—controlling interests	$	286	$	282	$	487		$	(707	)	$	348

Spectra Energy Corp

Condensed Consolidating Statements of Comprehensive Income

(Unaudited)

(In millions)

	Spectra Energy Corp		Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Six Months Ended June 30, 2012
Net income	$	548	$	545	$	882	$	(1,373	)	$	602
Other comprehensive income
Foreign currency translation adjustments		—		—		29		—			29
Unrealized mark-to-market net gain		—		—		3		—			3
Reclassification of cash flow hedges into earnings		—		1		3		—			4
Pension and benefits impact		7		—		16		—			23
Total other comprehensive income		7		1		51		—			59
Total comprehensive income, net of tax		555		546		933		(1,373	)		661
Less: comprehensive income—noncontrolling interests		—		—		54		—			54
Comprehensive income—controlling interests	$	555	$	546	$	879	$	(1,373	)	$	607
Six Months Ended June 30, 2011
Net income	$	641	$	641	$	983	$	(1,576	)	$	689
Other comprehensive income
Foreign currency translation adjustments		—		—		248		—			248
Reclassification of cash flow hedges into earnings		—		—		5		—			5
Pension and benefits impact		4		—		11		—			15
Other		—		—		8		—			8
Total other comprehensive income		4		—		272		—			276
Total comprehensive income, net of tax		645		641		1,255		(1,576	)		965
Less: comprehensive income—noncontrolling interests		—		—		52		—			52
Comprehensive income—controlling interests	$	645	$	641	$	1,203	$	(1,576	)	$	913

Condensed Consolidating Balance Sheet

Spectra Energy Corp

Condensed Consolidating Balance Sheet

June 30, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Cash and cash equivalents	$	—		$	1		$	126	$	—		$	127
Receivables (payables)—consolidated subsidiaries		62			(63	)		1		—			—
Receivables—other		3			—			712		—			715
Other current assets		36			12			505		—			553
Total current assets		101			(50	)		1,344		—			1,395
Investments in and loans to unconsolidated affiliates		—			71			2,011		—			2,082
Investments in consolidated subsidiaries		12,345			15,629			—		(27,974	)		—
Advances receivable (payable)—consolidated subsidiaries		(3,936	)		4,380			150		(594	)		—
Goodwill		—			—			4,435		—			4,435
Other assets		42			95			359		—			496
Property, plant and equipment, net		—			—			18,798		—			18,798
Regulatory assets and deferred debits		3			12			1,154		—			1,169
Total Assets	$	8,555		$	20,137		$	28,251	$	(28,568	)	$	28,375
Accounts payable—other	$	2		$	78		$	378	$	—		$	458
Short-term borrowings and commercial paper		—			1,530			137		(594	)		1,073
Accrued taxes payable (receivable)		—			—			72		—			72
Current maturities of long-term debt		—			495			535		—			1,030
Other current liabilities		45			103			663		—			811
Total current liabilities		47			2,206			1,785		(594	)		3,444
Long-term debt		—			2,809			6,823		—			9,632
Deferred credits and other liabilities		189			2,777			2,927		—			5,893
Preferred stock of subsidiaries		—			—			258		—			258
Equity
Controlling interests		8,319			12,345			15,629		(27,974	)		8,319
Noncontrolling interests		—			—			829		—			829
Total equity		8,319			12,345			16,458		(27,974	)		9,148
Total Liabilities and Equity	$	8,555		$	20,137		$	28,251	$	(28,568	)	$	28,375

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

Six Months Ended June 30, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	548		$	545		$	882		$	(1,373	)	$	602
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		—			—			375			—			375
Equity in earnings of unconsolidated affiliates		—			—			(209	)		—			(209	)
Equity in earnings of subsidiaries		(545	)		(828	)		—			1,373			—
Distributions received from unconsolidated affiliates		—			—			197			—			197
Other		(66	)		153			107			—			194
Net cash provided by (used in) operating activities		(63	)		(130	)		1,352			—			1,159
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		—			—			(789	)		—			(789	)
Acquisitions		—			—			(30	)		—			(30	)
Purchases of held-to-maturity securities		—			—			(1,490	)		—			(1,490	)
Proceeds from sales and maturities of held-to-maturity securities		—			—			1,387			—			1,387
Proceeds from sales and maturities of available-for-sale securities		—			—			21			—			21
Distributions received from unconsolidated affiliates		—			—			11			—			11
Other changes in restricted funds		—			—			92			—			92
Other		—			—			6			—			6
Net cash used in investing activities		—			—			(792	)		—			(792	)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments for the redemption of long-term debt		—			—			(28	)		—			(28	)
Net increase (decrease) in short-term borrowings and commercial paper		—			184			(169	)		—			15
Distributions to noncontrolling interests		—			—			(56	)		—			(56	)
Dividends paid on common stock		(372	)		—			—			—			(372	)
Distributions and advances from (to) affiliates		409			(55	)		(354	)		—			—
Other		26			—			1			—			27
Net cash provided by (used in) financing activities		63			129			(606	)		—			(414	)
Effect of exchange rate changes on cash		—			—			—			—			—
Net decrease in cash and cash equivalents		—			(1	)		(46	)		—			(47	)
Cash and cash equivalents at beginning of period		—			2			172			—			174
Cash and cash equivalents at end of period	$	—		$	1		$	126		$	—		$	127

Spectra Energy Corp

Condensed Consolidating Statements of Cash Flows

Six Months Ended June 30, 2011

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	641		$	641		$	983		$	(1,576	)	$	689
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		—			—			359			—			359
Equity in earnings of unconsolidated affiliates		—			—			(268	)		—			(268	)
Equity in earnings of subsidiaries		(641	)		(935	)		—			1,576			—
Distributions received from unconsolidated affiliates		—			—			201			—			201
Other		(37	)		254			140			—			357
Net cash provided by (used in) operating activities		(37	)		(40	)		1,415			—			1,338
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		—			—			(739	)		—			(739	)
Investments in and loans to unconsolidated affiliates		—			—			(4	)		—			(4	)
Purchases of held-to-maturity securities		—			—			(763	)		—			(763	)
Proceeds from sales and maturities of held-to-maturity securities		—			—			733			—			733
Purchases of available-for-sale securities		—			—			(930	)		—			(930	)
Proceeds from sales and maturities of available-for-sale securities		—			—			1,119			—			1,119
Other changes in restricted funds		—			—			8			—			8
Other		—			—			5			—			5
Net cash used in investing activities		—			—			(571	)		—			(571	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt		—			—			805			—			805
Payments for the redemption of long-term debt		—			—			(494	)		—			(494	)
Net decrease in short-term borrowings and commercial paper		—			(132	)		(126	)		—			(258	)
Net increase in revolving credit facilities borrowings		—			—			(258	)		—			(258	)
Distributions to noncontrolling interests		—			—			(47	)		—			(47	)
Proceeds from the issuance of Spectra Energy Partners common units		—			—			213			—			213
Dividends paid on common stock		(341	)		—			—			—			(341	)
Distributions and advances from (to) affiliates		353			173			(526	)		—			—
Other		25			—			(6	)		—			19
Net cash provided by (used in) financing activities		37			41			(439	)		—			(361	)
Effect of exchange rate changes on cash		—			—			2			—			2
Net increase in cash and cash equivalents		—			1			407			—			408
Cash and cash equivalents at beginning of period		—			—			130			—			130
Cash and cash equivalents at end of period	$	—		$	1		$	537		$	—		$	538

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Estimated Fair Values of Available for Sale Securities (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Schedule of Available-for-sale Securities [Line Items]
Estimated Fair Value	$ 12	$ 35
Corporate Debt Securities
Schedule of Available-for-sale Securities [Line Items]
Estimated Fair Value	11	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	$ 1	$ 3

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Condensed Consolidating Statement of Operations (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2012		Jun. 30, 2011
Condensed Financial Statements, Captions [Line Items]
Total operating revenues	$ 1,112	[1]	$ 1,188	[1]	$ 2,656	[1]	$ 2,800	[1]
Total operating expenses	746		786		1,772		1,845
Gains on Sales of Other Assets and Other, net	1				2		4
Operating income (loss)	367		402		886		959
Equity in earnings of unconsolidated affiliates	91		162		209		268
Other income and expenses, net	18		18		34		24
Interest Expense	155	[1]	159	[1]	312	[1]	314	[1]
Earnings from continuing operations before income taxes	321	[1]	423	[1]	817	[1]	937	[1]
Income tax expense (benefit) from continuing operations	80		125		217		264
Income from continuing operations	241		298		600		673
Income (loss) from discontinued operations, net of tax			9		2		16
Net income	241		307		602		689
Net Income-Noncontrolling Interests	26		23		54		48
Net Income-Controlling Interests	215		284		548		641
Spectra Energy Corp
Condensed Financial Statements, Captions [Line Items]
Total operating expenses	6		(3)		8
Operating income (loss)	(6)		3		(8)
Equity in earnings of subsidiaries	216		282		545		641
Other income and expenses, net					(1)
Earnings from continuing operations before income taxes	210		285		536		641
Income tax expense (benefit) from continuing operations	(6)		1		(13)
Income from continuing operations	216		284		549		641
Income (loss) from discontinued operations, net of tax	(1)				(1)
Net income	215		284		548		641
Net Income-Controlling Interests	215		284		548		641
Spectra Energy Capital, LLC
Condensed Financial Statements, Captions [Line Items]
Equity in earnings of subsidiaries	342		425		828		935
Other income and expenses, net	1		6		1		6
Interest Expense	48		51		96		99
Earnings from continuing operations before income taxes	295		380		733		842
Income tax expense (benefit) from continuing operations	79		98		188		201
Income from continuing operations	216		282		545		641
Net income	216		282		545		641
Net Income-Controlling Interests	216		282		545		641
Non-Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Total operating revenues	1,112		1,188		2,657		2,800
Total operating expenses	740		789		1,765		1,845
Gains on Sales of Other Assets and Other, net	1				2		4
Operating income (loss)	373		399		894		959
Equity in earnings of unconsolidated affiliates	91		162		209		268
Other income and expenses, net	17		12		34		18
Interest Expense	107		108		216		215
Earnings from continuing operations before income taxes	374		465		921		1,030
Income tax expense (benefit) from continuing operations	7		26		42		63
Income from continuing operations	367		439		879		967
Income (loss) from discontinued operations, net of tax	1		9		3		16
Net income	368		448		882		983
Net Income-Noncontrolling Interests	26		23		54		48
Net Income-Controlling Interests	342		425		828		935
Eliminations
Condensed Financial Statements, Captions [Line Items]
Total operating revenues					(1)
Total operating expenses					(1)
Equity in earnings of subsidiaries	(558)		(707)		(1,373)		(1,576)
Earnings from continuing operations before income taxes	(558)		(707)		(1,373)		(1,576)
Income from continuing operations	(558)		(707)		(1,373)		(1,576)
Net income	(558)		(707)		(1,373)		(1,576)
Net Income-Controlling Interests	$ (558)		$ (707)		$ (1,373)		$ (1,576)

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

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Risk Management and Hedging Activities - Additional Information (Detail) (Pay Floating Receive Fixed Swaps, USD $) In Millions, unless otherwise specified	Jun. 30, 2012
Pay Floating Receive Fixed Swaps
Derivative [Line Items]
Notional principal amount of interest rate hedges	$ 2,096

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Components of Inventory (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Schedule of Inventory [Line Items]
Natural gas	$ 164	$ 263
NGLs	68	58
Materials and supplies	75	72
Total inventory	$ 307	$ 393

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Business Segments

6 Months Ended

Jun. 30, 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 26% 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 June 30, 2012
U.S. Transmission	$	462	$	2		$	464		$	237
Distribution		322		—			322			75
Western Canada Transmission & Processing		325		4			329			94
Field Services		—		—			—			66
Total reportable segments		1,109		6			1,115			472
Other		3		16			19			(25	)
Eliminations		—		(22	)		(22	)		—
Interest expense		—		—			—			155
Interest income and other (b)		—		—			—			29
Total consolidated	$	1,112	$	—		$	1,112		$	321
Three Months Ended June 30, 2011
U.S. Transmission	$	454	$	3		$	457		$	243
Distribution		375		—			375			88
Western Canada Transmission & Processing		357		14			371			113
Field Services		—		—			—			138
Total reportable segments		1,186		17			1,203			582
Other		2		14			16			(29	)
Eliminations		—		(31	)		(31	)		—
Interest expense		—		—			—			159
Interest income and other (b)		—		—			—			29
Total consolidated	$	1,188	$	—		$	1,188		$	423
Six Months Ended June 30, 2012
U.S. Transmission	$	955	$	4		$	959		$	508
Distribution		919		—			919			226
Western Canada Transmission & Processing		778		17			795			232
Field Services		—		—			—			159
Total reportable segments		2,652		21			2,673			1,125
Other		4		36			40			(54	)
Eliminations		—		(57	)		(57	)		—
Interest expense		—		—			—			312
Interest income and other (b)		—		—			—			58
Total consolidated	$	2,656	$	—		$	2,656		$	817
Six Months Ended June 30, 2011
U.S. Transmission	$	935	$	5		$	940		$	522
Distribution		1,071		—			1,071			255
Western Canada Transmission & Processing		790		20			810			254
Field Services		—		—			—			219
Total reportable segments		2,796		25			2,821			1,250
Other		4		29			33			(53	)
Eliminations		—		(54	)		(54	)		—
Interest expense		—		—			—			314
Interest income and other (b)		—		—			—			54
Total consolidated	$	2,800	$	—		$	2,800		$	937

(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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Commitments and Contingencies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 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	$ 13	$ 16

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Income Taxes - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Income Tax Contingency [Line Items]
Income tax expense (benefit) from continuing operations	$ 80	$ 125	$ 217	$ 264
Effective tax rate for income from continuing operations	25.00%	30.00%	27.00%	28.00%
Unrecognized tax benefits possible increase prior to June 30, 2013 related to expiration of statutes of limitations and expected audit settlements	$ 14		$ 14

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Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 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 June 30, 2012
Other	$	42	$	—	$	—	$	—
Total consolidated	$	42	$	—	$	—	$	—
Three Months Ended June 30, 2011
Other	$	48	$	15	$	6	$	9
Total consolidated	$	48	$	15	$	6	$	9
Six Months Ended June 30, 2012
Other	$	99	$	3	$	1	$	2
Total consolidated	$	99	$	3	$	1	$	2
Six Months Ended June 30, 2011
Other	$	132	$	25	$	9	$	16
Total consolidated	$	132	$	25	$	9	$	16

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Business Segments (Tables)

6 Months Ended

Jun. 30, 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 June 30, 2012
U.S. Transmission	$	462	$	2		$	464		$	237
Distribution		322		—			322			75
Western Canada Transmission & Processing		325		4			329			94
Field Services		—		—			—			66
Total reportable segments		1,109		6			1,115			472
Other		3		16			19			(25	)
Eliminations		—		(22	)		(22	)		—
Interest expense		—		—			—			155
Interest income and other (b)		—		—			—			29
Total consolidated	$	1,112	$	—		$	1,112		$	321
Three Months Ended June 30, 2011
U.S. Transmission	$	454	$	3		$	457		$	243
Distribution		375		—			375			88
Western Canada Transmission & Processing		357		14			371			113
Field Services		—		—			—			138
Total reportable segments		1,186		17			1,203			582
Other		2		14			16			(29	)
Eliminations		—		(31	)		(31	)		—
Interest expense		—		—			—			159
Interest income and other (b)		—		—			—			29
Total consolidated	$	1,188	$	—		$	1,188		$	423
Six Months Ended June 30, 2012
U.S. Transmission	$	955	$	4		$	959		$	508
Distribution		919		—			919			226
Western Canada Transmission & Processing		778		17			795			232
Field Services		—		—			—			159
Total reportable segments		2,652		21			2,673			1,125
Other		4		36			40			(54	)
Eliminations		—		(57	)		(57	)		—
Interest expense		—		—			—			312
Interest income and other (b)		—		—			—			58
Total consolidated	$	2,656	$	—		$	2,656		$	817
Six Months Ended June 30, 2011
U.S. Transmission	$	935	$	5		$	940		$	522
Distribution		1,071		—			1,071			255
Western Canada Transmission & Processing		790		20			810			254
Field Services		—		—			—			219
Total reportable segments		2,796		25			2,821			1,250
Other		4		29			33			(53	)
Eliminations		—		(54	)		(54	)		—
Interest expense		—		—			—			314
Interest income and other (b)		—		—			—			54
Total consolidated	$	2,800	$	—		$	2,800		$	937

(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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Available Credit Facilities and Restrictive Debt Covenants (Parenthetical) (Detail) In Millions, unless otherwise specified	Jun. 30, 2012 USD ($)	Jun. 30, 2012 Spectra Energy Capital, LLC Covenant Requirement	Jun. 30, 2012 Spectra Energy Capital, LLC Maximum Covenant Requirement	Jun. 30, 2012 Westcoast Energy Inc. Covenant Requirement CAD	Jun. 30, 2012 Westcoast Energy Inc. Maximum Covenant Requirement	Jun. 30, 2012 Union Gas Limited Covenant Requirement CAD	Jun. 30, 2012 Union Gas Limited Maximum Covenant Requirement	Jun. 30, 2012 Spectra Energy Partners, LP Covenant Requirement	Jun. 30, 2012 Spectra Energy Partners, LP Maximum Covenant Requirement
Line of Credit Facility [Line Items]
Debt-to-total defined capitalization ratio		58.00%	65.00%
Total credit facilities capacity	$ 2,888			300		400
Debt-to-total capitalization ratio				44.00%	75.00%	65.00%	75.00%
Debt-to-Adjusted EBITDA ratio maximum									5.0
Debt-to-Adjusted EBITDA ratio								2.7

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Results Classified as Income from Discontinued Operations, Net of Tax in Condensed Consolidated Statements of Operations (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenues	$ 42	$ 48	$ 99	$ 132
Pre-tax Earnings		15	3	25
Income Tax Expense		6	1	9
Income From Discontinued Operations, net of tax		9	2	16
Other Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenues	42	48	99	132
Pre-tax Earnings		15	3	25
Income Tax Expense		6	1	9
Income From Discontinued Operations, net of tax		$ 9	$ 2	$ 16

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Earnings per Common Share (Tables)

6 Months Ended

Jun. 30, 2012

Basic and Diluted EPS Calculations

The following table presents our basic and diluted EPS calculations:

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(in millions, except per-share amounts)
Income from continuing operations, net of tax—controlling interests	$	215	$	275	$	546	$	625
Income from discontinued operations, net of tax—controlling interests		—		9		2		16
Net income—controlling interests	$	215	$	284	$	548	$	641
Weighted-average common shares outstanding
Basic		653		650		652		650
Diluted		655		652		655		652
Basic earnings per common share (a)
Continuing operations	$	0.33	$	0.42	$	0.84	$	0.96
Discontinued operations, net of tax		—		0.02		—		0.03
Total basic earnings per common share	$	0.33	$	0.44	$	0.84	$	0.99
Diluted earnings per common share (a)
Continuing operations	$	0.33	$	0.42	$	0.83	$	0.96
Discontinued operations, net of tax		—		0.02		0.01		0.02
Total diluted earnings per common share	$	0.33	$	0.44	$	0.84	$	0.98

(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 (Tables)

6 Months Ended

Jun. 30, 2012

Components of Inventory

The components of inventory are as follows:

	June 30, 2012		December 31, 2011
	(in millions)
Natural gas	$	164	$	263
NGLs		68		58
Materials and supplies		75		72
Total inventory	$	307	$	393

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General

6 Months Ended

Jun. 30, 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 six months ended June 30, 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 Decrease 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)
Six Months Ended June 30, 2011
As previously reported	$	2,424		$	(2,371	)
Less non-cash activity		(1,567	)		1,567
As corrected		857			(804	)
Less revolving credit facility activity		(52	)		310
Long-term debt activity	$	805		$	(494	)

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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Investments in and Loans to Unconsolidated Affiliates (Tables)

6 Months Ended

Jun. 30, 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 June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(in millions)
Operating revenues	$	2,219	$	3,304	$	5,121	$	6,233
Operating expenses		1,998		2,957		4,692		5,712
Operating income		221		347		429		521
Net income		185		303		340		428
Net income attributable to members’ interests		132		277		276		410

Sales of Propane to Affiliates of DCP Midstream

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(in millions)
Sales of propane	$	42	$	48	$	99	$	132

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Business Segments - Additional Information (Detail) (DCP Midstream, LLC)	6 Months Ended
	Jun. 30, 2012
DCP Midstream Partners, LP
Segment Reporting Information [Line Items]
Percentage of ownership interests	26.00%
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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Marketable Securities and Restricted Funds - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
Gain (Loss) on Investments [Line Items]
Contractual maturities of outstanding AFS securities	1 year
Held-to-maturity marketable securities	$ 265	$ 162
Current Assets-other
Gain (Loss) on Investments [Line Items]
Other restricted available for sale securities, current		14
Held-to-maturity marketable securities	40
Other current assets, restricted funds	21	35
Investments and Other Assets-Other
Gain (Loss) on Investments [Line Items]
Other restricted available for sale securities, noncurrent	1	3
Held-to-maturity marketable securities	225	162
Other non current assets, restricted funds		$ 79
Maximum
Gain (Loss) on Investments [Line Items]
Maximum contractual maturities of outstanding HTM securities	1 year

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2012		Jun. 30, 2011
Operating Revenues
Transportation, storage and processing of natural gas	$ 784		$ 773		$ 1,615		$ 1,564
Distribution of natural gas	240		286		745		893
Sales of natural gas liquids	56		93		205		270
Other	32		36		91		73
Total operating revenues	1,112	[1]	1,188	[1]	2,656	[1]	2,800	[1]
Operating Expenses
Natural gas and petroleum products purchased	146		180		579		665
Operating, maintenance and other	334		347		655		661
Depreciation and amortization	185		177		369		352
Property and other taxes	81		82		169		167
Total operating expenses	746		786		1,772		1,845
Gains on Sales of Other Assets and Other, net	1				2		4
Operating income (loss)	367		402		886		959
Other Income and Expenses
Equity in earnings of unconsolidated affiliates	91		162		209		268
Other income and expenses, net	18		18		34		24
Total other income and expenses	109		180		243		292
Interest Expense	155	[1]	159	[1]	312	[1]	314	[1]
Earnings from continuing operations before income taxes	321	[1]	423	[1]	817	[1]	937	[1]
Income Tax Expense From Continuing Operations	80		125		217		264
Income From Continuing Operations	241		298		600		673
Income From Discontinued Operations, net of tax			9		2		16
Net Income	241		307		602		689
Net Income-Noncontrolling Interests	26		23		54		48
Net Income-Controlling Interests	$ 215		$ 284		$ 548		$ 641
Weighted-average shares outstanding
Basic	653		650		652		650
Diluted	655		652		655		652
Earnings per share from continuing operations
Basic	$ 0.33	[2]	$ 0.42	[2]	$ 0.84	[2]	$ 0.96	[2]
Diluted	$ 0.33	[2]	$ 0.42	[2]	$ 0.83	[2]	$ 0.96	[2]
Earnings per share
Basic	$ 0.33	[2]	$ 0.44	[2]	$ 0.84	[2]	$ 0.99	[2]
Diluted	$ 0.33	[2]	$ 0.44	[2]	$ 0.84	[2]	$ 0.98	[2]
Dividends per share	$ 0.28		$ 0.26		$ 0.56		$ 0.52

[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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Earnings per Common Share - Additional Information (Detail) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2011	Jun. 30, 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	5

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 602	$ 689
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	375	359
Deferred income tax expense	147	199
Equity in earnings of unconsolidated affiliates	(209)	(268)
Distributions received from unconsolidated affiliates	197	201
Other	47	158
Net cash provided by (used in) operating activities	1,159	1,338
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(789)	(739)
Investments in and loans to unconsolidated affiliates		(4)
Acquisitions	(30)
Purchases of held-to-maturity securities	(1,490)	(763)
Proceeds from sales and maturities of held-to-maturity securities	1,387	733
Purchases of available-for-sale securities		(930)
Proceeds from sales and maturities of available-for-sale securities	21	1,119
Distributions received from unconsolidated affiliates	11
Other changes in restricted funds	92	8
Other	6	5
Net cash used in investing activities	(792)	(571)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt		805
Payments for the redemption of long-term debt	(28)	(494)
Net increase (decrease) in short-term borrowings and commercial paper	15	(258)
Net decrease in revolving credit facilities borrowings		(258)
Distributions to noncontrolling interests	(56)	(47)
Proceeds from the issuance of Spectra Energy Partners, LP common units		213
Dividends paid on common stock	(372)	(341)
Other	27	19
Net cash provided by (used in) financing activities	(414)	(361)
Effect of exchange rate changes on cash		2
Net increase (decrease) in cash and cash equivalents	(47)	408
Cash and cash equivalents at beginning of period	174	130
Cash and cash equivalents at end of period	127	538
Supplemental Disclosures
Property, plant and equipment non-cash accruals	$ 182	$ 169

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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		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 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	$ (15)	$ (6)	$ (14)	$ (6)
Total realized/unrealized gains (losses):
Included in earnings	(1)			(1)
Included in other comprehensive income	5	(2)	3	(1)
Settlements	1		1
Fair value, end of period	(10)	(8)	(10)	(8)
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)	$ (2)		$ (5)

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 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	June 30, 2012
		Total		Level 1		Level 2		Level 3
		(in millions)
Corporate debt securities	Cash and cash equivalents	$	56	$	—	$	56	$	—
Corporate debt securities	Current assets—other		5		—		5		—
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		56		—		56		—
Money market funds	Investments and other assets—other		1		1		—		—
Total Assets		$	134	$	1	$	133	$	—
Derivative liabilities—natural gas purchase contracts	Deferred credits and other liabilities—regulatory and other	$	10	$	—	$	—	$	10
Derivative liabilities—interest rate swaps	Deferred credits and other liabilities—regulatory and other		14		—		14		—
Total Liabilities		$	24	$	—	$	14	$	10
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 June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(in millions)
Long-term derivative assets (liabilities)
Fair value, beginning of period	$	(15	)	$	(6	)	$	(14	)	$	(6	)
Total realized/unrealized gains (losses):
Included in earnings		(1	)		—			—			(1	)
Included in other comprehensive income		5			(2	)		3			(1	)
Settlements		1			—			1			—
Fair value, end of period	$	(10	)	$	(8	)	$	(10	)	$	(8	)
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	)	$	(2	)	$	—		$	(5	)

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.

	June 30, 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)		10,595		12,514		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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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		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
U.S. Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Service cost benefit earned	$ 4	$ 4	$ 7	$ 7
Interest cost on projected benefit obligation	6	7	12	13
Expected return on plan assets	(7)	(8)	(15)	(16)
Amortization of loss	3	2	7	5
Net periodic cost	6	5	11	9
Canada Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Service cost benefit earned	6	6	13	11
Interest cost on projected benefit obligation	12	13	25	27
Expected return on plan assets	(14)	(13)	(29)	(25)
Amortization of loss	9	8	18	14
Amortization of prior service costs	1	1	1	1
Net periodic cost	$ 14	$ 15	$ 28	$ 28

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Guarantees and Indemnifications

6 Months Ended

Jun. 30, 2012

Guarantees and Indemnifications

15. 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 June 30, 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 June 30, 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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Employee Benefit Plans (Tables)

6 Months Ended

Jun. 30, 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 June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(in millions)
U.S.
Service cost benefit earned	$	4		$	4		$	7		$	7
Interest cost on projected benefit obligation		6			7			12			13
Expected return on plan assets		(7	)		(8	)		(15	)		(16	)
Amortization of loss		3			2			7			5
Net periodic pension cost	$	6		$	5		$	11		$	9
Canada
Service cost benefit earned	$	6		$	6		$	13		$	11
Interest cost on projected benefit obligation		12			13			25			27
Expected return on plan assets		(14	)		(13	)		(29	)		(25	)
Amortization of loss		9			8			18			14
Amortization of prior service costs		1			1			1			1
Net periodic pension cost	$	14		$	15		$	28		$	28

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 June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(in millions)
U.S.
Interest cost on accumulated post-retirement benefit obligation	$	1		$	2		$	4		$	5
Expected return on plan assets		(1	)		(1	)		(2	)		(2	)
Amortization of loss		1			1			1			1
Net periodic other post-retirement benefit cost	$	1		$	2		$	3		$	4
Canada
Service cost benefit earned	$	2		$	1		$	4		$	2
Interest cost on accumulated post-retirement benefit obligation		1			2			3			4
Amortization of loss		1			—			1			—
Net periodic other post-retirement benefit cost	$	4		$	3		$	8		$	6

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Consolidating Financial Information

6 Months Ended

Jun. 30, 2012

Consolidating Financial Information

17. 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 June 30, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total operating revenues	$	—		$	—	$	1,112	$	—		$	1,112
Total operating expenses		6			—		740		—			746
Gains on sales of other assets and other, net		—			—		1		—			1
Operating income (loss)		(6	)		—		373		—			367
Equity in earnings of unconsolidated affiliates		—			—		91		—			91
Equity in earnings of subsidiaries		216			342		—		(558	)		—
Other income and expenses, net		—			1		17		—			18
Interest expense		—			48		107		—			155
Earnings from continuing operations before income taxes		210			295		374		(558	)		321
Income tax expense (benefit) from continuing operations		(6	)		79		7		—			80
Income from continuing operations		216			216		367		(558	)		241
Income (loss) from discontinued operations, net of tax		(1	)		—		1		—			—
Net income		215			216		368		(558	)		241
Net income—noncontrolling interests		—			—		26		—			26
Net income—controlling interests	$	215		$	216	$	342	$	(558	)	$	215

Spectra Energy Corp

Condensed Consolidating Statement of Operations

Three Months Ended June 30, 2011

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total operating revenues	$	—		$	—	$	1,188	$	—		$	1,188
Total operating expenses		(3	)		—		789		—			786
Operating income		3			—		399		—			402
Equity in earnings of unconsolidated affiliates		—			—		162		—			162
Equity in earnings of subsidiaries		282			425		—		(707	)		—
Other income and expenses, net		—			6		12		—			18
Interest expense		—			51		108		—			159
Earnings from continuing operations before income taxes		285			380		465		(707	)		423
Income tax expense from continuing operations		1			98		26		—			125
Income from continuing operations		284			282		439		(707	)		298
Income from discontinued operations, net of tax		—			—		9		—			9
Net income		284			282		448		(707	)		307
Net income—noncontrolling interests		—			—		23		—			23
Net income—controlling interests	$	284		$	282	$	425	$	(707	)	$	284

Spectra Energy Corp

Condensed Consolidating Statement of Operations

Six Months Ended June 30, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total operating revenues	$	—		$	—	$	2,657	$	(1	)	$	2,656
Total operating expenses		8			—		1,765		(1	)		1,772
Gains on sales of other assets and other, net		—			—		2		—			2
Operating income (loss)		(8	)		—		894		—			886
Equity in earnings of unconsolidated affiliates		—			—		209		—			209
Equity in earnings of subsidiaries		545			828		—		(1,373	)		—
Other income and expenses, net		(1	)		1		34		—			34
Interest expense		—			96		216		—			312
Earnings from continuing operations before income taxes		536			733		921		(1,373	)		817
Income tax expense (benefit) from continuing operations		(13	)		188		42		—			217
Income from continuing operations		549			545		879		(1,373	)		600
Income (loss) from discontinued operations, net of tax		(1	)		—		3		—			2
Net income		548			545		882		(1,373	)		602
Net income—noncontrolling interests		—			—		54		—			54
Net income—controlling interests	$	548		$	545	$	828	$	(1,373	)	$	548

Spectra Energy Corp

Condensed Consolidating Statement of Operations

Six Months Ended June 30, 2011

(Unaudited)

(In millions)

	Spectra Energy Corp		Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total operating revenues	$	—	$	—	$	2,800	$	—		$	2,800
Total operating expenses		—		—		1,845		—			1,845
Gains on sales of other assets and other, net		—		—		4		—			4
Operating income		—		—		959		—			959
Equity in earnings of unconsolidated affiliates		—		—		268		—			268
Equity in earnings of subsidiaries		641		935		—		(1,576	)		—
Other income and expenses, net		—		6		18		—			24
Interest expense		—		99		215		—			314
Earnings from continuing operations before income taxes		641		842		1,030		(1,576	)		937
Income tax expense from continuing operations		—		201		63		—			264
Income from continuing operations		641		641		967		(1,576	)		673
Income from discontinued operations, net of tax		—		—		16		—			16
Net income		641		641		983		(1,576	)		689
Net income—noncontrolling interests		—		—		48		—			48
Net income—controlling interests	$	641	$	641	$	935	$	(1,576	)	$	641

Spectra Energy Corp

Condensed Consolidating Statements of Comprehensive Income

(Unaudited)

(In millions)

	Spectra Energy Corp		Spectra Capital		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Three Months Ended June 30, 2012
Net income	$	215	$	216	$	368		$	(558	)	$	241
Other comprehensive income
Foreign currency translation adjustments		—		—		(133	)		—			(133	)
Unrealized mark-to-market net gain		—		—		3			—			3
Reclassification of cash flow hedges into earnings		—		—		2			—			2
Pension and benefits impact		3		—		15			—			18
Total other comprehensive income (loss)		3		—		(113	)		—			(110	)
Total comprehensive income, net of tax		218		216		255			(558	)		131
Less: comprehensive income—noncontrolling interests		—		—		24			—			24
Comprehensive income—controlling interests	$	218	$	216	$	231		$	(558	)	$	107
Three Months Ended June 30, 2011
Net income	$	284	$	282	$	448		$	(707	)	$	307
Other comprehensive income
Foreign currency translation adjustments		—		—		57			—			57
Unrealized mark-to-market net loss		—		—		(1	)		—			(1	)
Reclassification of cash flow hedges into earnings		—		—		2			—			2
Pension and benefits impact		2		—		5			—			7
Total other comprehensive income		2		—		63			—			65
Total comprehensive income, net of tax		286		282		511			(707	)		372
Less: comprehensive income—noncontrolling interests		—		—		24			—			24
Comprehensive income—controlling interests	$	286	$	282	$	487		$	(707	)	$	348

Spectra Energy Corp

Condensed Consolidating Statements of Comprehensive Income

(Unaudited)

(In millions)

	Spectra Energy Corp		Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Six Months Ended June 30, 2012
Net income	$	548	$	545	$	882	$	(1,373	)	$	602
Other comprehensive income
Foreign currency translation adjustments		—		—		29		—			29
Unrealized mark-to-market net gain		—		—		3		—			3
Reclassification of cash flow hedges into earnings		—		1		3		—			4
Pension and benefits impact		7		—		16		—			23
Total other comprehensive income		7		1		51		—			59
Total comprehensive income, net of tax		555		546		933		(1,373	)		661
Less: comprehensive income—noncontrolling interests		—		—		54		—			54
Comprehensive income—controlling interests	$	555	$	546	$	879	$	(1,373	)	$	607
Six Months Ended June 30, 2011
Net income	$	641	$	641	$	983	$	(1,576	)	$	689
Other comprehensive income
Foreign currency translation adjustments		—		—		248		—			248
Reclassification of cash flow hedges into earnings		—		—		5		—			5
Pension and benefits impact		4		—		11		—			15
Other		—		—		8		—			8
Total other comprehensive income		4		—		272		—			276
Total comprehensive income, net of tax		645		641		1,255		(1,576	)		965
Less: comprehensive income—noncontrolling interests		—		—		52		—			52
Comprehensive income—controlling interests	$	645	$	641	$	1,203	$	(1,576	)	$	913

Spectra Energy Corp

Condensed Consolidating Balance Sheet

June 30, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Cash and cash equivalents	$	—		$	1		$	126	$	—		$	127
Receivables (payables)—consolidated subsidiaries		62			(63	)		1		—			—
Receivables—other		3			—			712		—			715
Other current assets		36			12			505		—			553
Total current assets		101			(50	)		1,344		—			1,395
Investments in and loans to unconsolidated affiliates		—			71			2,011		—			2,082
Investments in consolidated subsidiaries		12,345			15,629			—		(27,974	)		—
Advances receivable (payable)—consolidated subsidiaries		(3,936	)		4,380			150		(594	)		—
Goodwill		—			—			4,435		—			4,435
Other assets		42			95			359		—			496
Property, plant and equipment, net		—			—			18,798		—			18,798
Regulatory assets and deferred debits		3			12			1,154		—			1,169
Total Assets	$	8,555		$	20,137		$	28,251	$	(28,568	)	$	28,375
Accounts payable—other	$	2		$	78		$	378	$	—		$	458
Short-term borrowings and commercial paper		—			1,530			137		(594	)		1,073
Accrued taxes payable (receivable)		—			—			72		—			72
Current maturities of long-term debt		—			495			535		—			1,030
Other current liabilities		45			103			663		—			811
Total current liabilities		47			2,206			1,785		(594	)		3,444
Long-term debt		—			2,809			6,823		—			9,632
Deferred credits and other liabilities		189			2,777			2,927		—			5,893
Preferred stock of subsidiaries		—			—			258		—			258
Equity
Controlling interests		8,319			12,345			15,629		(27,974	)		8,319
Noncontrolling interests		—			—			829		—			829
Total equity		8,319			12,345			16,458		(27,974	)		9,148
Total Liabilities and Equity	$	8,555		$	20,137		$	28,251	$	(28,568	)	$	28,375

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

Six Months Ended June 30, 2012

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	548		$	545		$	882		$	(1,373	)	$	602
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		—			—			375			—			375
Equity in earnings of unconsolidated affiliates		—			—			(209	)		—			(209	)
Equity in earnings of subsidiaries		(545	)		(828	)		—			1,373			—
Distributions received from unconsolidated affiliates		—			—			197			—			197
Other		(66	)		153			107			—			194
Net cash provided by (used in) operating activities		(63	)		(130	)		1,352			—			1,159
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		—			—			(789	)		—			(789	)
Acquisitions		—			—			(30	)		—			(30	)
Purchases of held-to-maturity securities		—			—			(1,490	)		—			(1,490	)
Proceeds from sales and maturities of held-to-maturity securities		—			—			1,387			—			1,387
Proceeds from sales and maturities of available-for-sale securities		—			—			21			—			21
Distributions received from unconsolidated affiliates		—			—			11			—			11
Other changes in restricted funds		—			—			92			—			92
Other		—			—			6			—			6
Net cash used in investing activities		—			—			(792	)		—			(792	)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments for the redemption of long-term debt		—			—			(28	)		—			(28	)
Net increase (decrease) in short-term borrowings and commercial paper		—			184			(169	)		—			15
Distributions to noncontrolling interests		—			—			(56	)		—			(56	)
Dividends paid on common stock		(372	)		—			—			—			(372	)
Distributions and advances from (to) affiliates		409			(55	)		(354	)		—			—
Other		26			—			1			—			27
Net cash provided by (used in) financing activities		63			129			(606	)		—			(414	)
Effect of exchange rate changes on cash		—			—			—			—			—
Net decrease in cash and cash equivalents		—			(1	)		(46	)		—			(47	)
Cash and cash equivalents at beginning of period		—			2			172			—			174
Cash and cash equivalents at end of period	$	—		$	1		$	126		$	—		$	127

Spectra Energy Corp

Condensed Consolidating Statements of Cash Flows

Six Months Ended June 30, 2011

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	641		$	641		$	983		$	(1,576	)	$	689
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		—			—			359			—			359
Equity in earnings of unconsolidated affiliates		—			—			(268	)		—			(268	)
Equity in earnings of subsidiaries		(641	)		(935	)		—			1,576			—
Distributions received from unconsolidated affiliates		—			—			201			—			201
Other		(37	)		254			140			—			357
Net cash provided by (used in) operating activities		(37	)		(40	)		1,415			—			1,338
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		—			—			(739	)		—			(739	)
Investments in and loans to unconsolidated affiliates		—			—			(4	)		—			(4	)
Purchases of held-to-maturity securities		—			—			(763	)		—			(763	)
Proceeds from sales and maturities of held-to-maturity securities		—			—			733			—			733
Purchases of available-for-sale securities		—			—			(930	)		—			(930	)
Proceeds from sales and maturities of available-for-sale securities		—			—			1,119			—			1,119
Other changes in restricted funds		—			—			8			—			8
Other		—			—			5			—			5
Net cash used in investing activities		—			—			(571	)		—			(571	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt		—			—			805			—			805
Payments for the redemption of long-term debt		—			—			(494	)		—			(494	)
Net decrease in short-term borrowings and commercial paper		—			(132	)		(126	)		—			(258	)
Net increase in revolving credit facilities borrowings		—			—			(258	)		—			(258	)
Distributions to noncontrolling interests		—			—			(47	)		—			(47	)
Proceeds from the issuance of Spectra Energy Partners common units		—			—			213			—			213
Dividends paid on common stock		(341	)		—			—			—			(341	)
Distributions and advances from (to) affiliates		353			173			(526	)		—			—
Other		25			—			(6	)		—			19
Net cash provided by (used in) financing activities		37			41			(439	)		—			(361	)
Effect of exchange rate changes on cash		—			—			2			—			2
Net increase in cash and cash equivalents		—			1			407			—			408
Cash and cash equivalents at beginning of period		—			—			130			—			130
Cash and cash equivalents at end of period	$	—		$	1		$	537		$	—		$	538

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Condensed Consolidating Statements of Comprehensive Income (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Condensed Financial Statements, Captions [Line Items]
Net income	$ 241	$ 307	$ 602	$ 689
Other comprehensive income
Foreign currency translation adjustments	(133)	57	29	248
Unrealized mark-to-market net gain (loss)	3	(1)	3
Reclassification of cash flow hedges into earnings	2	2	4	5
Pension and benefits impact	18	7	23	15
Other				8
Total other comprehensive income (loss)	(110)	65	59	276
Total comprehensive income, net of tax	131	372	661	965
Less: Comprehensive Income-Noncontrolling Interests	24	24	54	52
Comprehensive income-controlling interests	107	348	607	913
Spectra Energy Corp
Condensed Financial Statements, Captions [Line Items]
Net income	215	284	548	641
Other comprehensive income
Pension and benefits impact	3	2	7	4
Total other comprehensive income (loss)	3	2	7	4
Total comprehensive income, net of tax	218	286	555	645
Comprehensive income-controlling interests	218	286	555	645
Spectra Energy Capital, LLC
Condensed Financial Statements, Captions [Line Items]
Net income	216	282	545	641
Other comprehensive income
Reclassification of cash flow hedges into earnings			1
Total other comprehensive income (loss)			1
Total comprehensive income, net of tax	216	282	546	641
Comprehensive income-controlling interests	216	282	546	641
Non-Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Net income	368	448	882	983
Other comprehensive income
Foreign currency translation adjustments	(133)	57	29	248
Unrealized mark-to-market net gain (loss)	3	(1)	3
Reclassification of cash flow hedges into earnings	2	2	3	5
Pension and benefits impact	15	5	16	11
Other				8
Total other comprehensive income (loss)	(113)	63	51	272
Total comprehensive income, net of tax	255	511	933	1,255
Less: Comprehensive Income-Noncontrolling Interests	24	24	54	52
Comprehensive income-controlling interests	231	487	879	1,203
Eliminations
Condensed Financial Statements, Captions [Line Items]
Net income	(558)	(707)	(1,373)	(1,576)
Other comprehensive income
Total comprehensive income, net of tax	(558)	(707)	(1,373)	(1,576)
Comprehensive income-controlling interests	$ (558)	$ (707)	$ (1,373)	$ (1,576)

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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	689			641			48
Other comprehensive income	276				244	28	4
Dividends on common stock	(341)			(341)
Stock-based compensation	27		27
Distributions to noncontrolling interests	(47)						(47)
Spectra Energy Partners, LP common units issued	192		38				154
Ending Balance at Jun. 30, 2011	9,283	1	4,791	1,787	2,254	(387)	837
Beginning Balance at Dec. 31, 2011	8,896	1	4,814	1,977	1,832	(559)	831
Net income	602			548			54
Other comprehensive income	59				29	30
Dividends on common stock	(369)			(369)
Stock-based compensation	5		5
Distributions to noncontrolling interests	(56)						(56)
Spectra Energy common stock issued	11		11
Ending Balance at Jun. 30, 2012	$ 9,148	$ 1	$ 4,830	$ 2,156	$ 1,861	$ (529)	$ 829

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Net income	$ 241	$ 307	$ 602	$ 689
Other comprehensive income
Foreign currency translation adjustments	(133)	57	29	248
Unrealized mark-to-market net gain (loss) on hedges	3	(1)	3
Reclassification of cash flow hedges into earnings	2	2	4	5
Pension and benefits impact	18	7	23	15
Other				8
Total other comprehensive income (loss)	(110)	65	59	276
Total Comprehensive Income, net of tax	131	372	661	965
Less: Comprehensive Income-Noncontrolling Interests	24	24	54	52
Comprehensive Income-Controlling Interests	$ 107	$ 348	$ 607	$ 913

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Goodwill

6 Months Ended

Jun. 30, 2012

Goodwill

10. Goodwill

We perform our goodwill impairment test annually and evaluate goodwill when events or changes in circumstances indicate that its carrying value may not be recoverable. We completed our annual goodwill impairment test as of April 1, 2012 and no impairments were identified.

We perform our annual review for goodwill impairment at the reporting unit level, which is identified by assessing whether the components of our operating segments constitute businesses for which discrete financial information is available, whether segment management regularly reviews the operating results of those components and whether the economic and regulatory characteristics are similar. We determined that our reporting units are equivalent to our reportable segments, except for the reporting units of our Western Canada Transmission & Processing reportable segment, which are one level below.

As permitted under new accounting guidance on testing goodwill for impairment, we performed either a qualitative assessment or a quantitative assessment of each of our reporting units based on management’s judgment. With respect to our qualitative assessments, we considered events and circumstances specific to us, such as macroeconomic conditions, industry and market considerations, cost factors and overall financial performance, when evaluating whether it was more likely than not that the fair values of our reporting units were less than their respective carrying amounts.

In connection with our quantitative assessments, we primarily used a discounted cash flow analysis to determine the fair values of those reporting units. Key assumptions in the determination of fair value included the use of an appropriate discount rate and estimated future cash flows. In estimating cash flows, we incorporated expected long-term growth rates in key markets served by our operations, regulatory stability, the ability to renew contracts, commodity prices (where appropriate), and foreign currency exchange rates, as well as other factors that affect our reporting units’ revenue, expense and capital expenditure projections.

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2012
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
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	652,870,488

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Debt and Credit Facilities

6 Months Ended

Jun. 30, 2012

Debt and Credit Facilities

11. Debt and Credit Facilities

Available Credit Facilities and Restrictive Debt Covenants

	Expiration Date		Total Credit Facilities Capacity		Outstanding at June 30, 2012						Available Credit Facilities Capacity
					Commercial Paper		Letters of Credit		Total
			(in millions)
Spectra Energy Capital, LLC (a)
Multi-year syndicated		2016	$	1,500	$	936	$	5	$	941	$	559
Westcoast Energy Inc. (b)
Multi-year syndicated		2016		295		—		—		—		295
Union Gas (c)
Multi-year syndicated		2016		393		97		—		97		296
Spectra Energy Partners (d)
Multi-year syndicated		2016		700		40		—		40		660
Total			$	2,888	$	1,073	$	5	$	1,078	$	1,810

(a) Credit facility contains a covenant requiring the Spectra Energy Corp consolidated debt-to-total capitalization ratio, as defined in the agreement, to not exceed 65%. This ratio was 58% at June 30, 2012.

(b) U.S. dollar equivalent at June 30, 2012. The credit facility is 300 million Canadian dollars and contains a covenant that requires the Westcoast Energy Inc. non-consolidated debt-to-total capitalization ratio to not exceed 75%. The ratio was 44% at June 30, 2012.

(c) U.S. dollar equivalent at June 30, 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 65% at June 30, 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 or less. As of June 30, 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 June 30, 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 June 30, 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 the 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 June 30, 2012.

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Current Assets
Cash and cash equivalents	$ 127	$ 174
Receivables, net	715	962
Inventory	307	393
Other	246	235
Total current assets	1,395	1,764
Investments and Other Assets
Investments in and loans to unconsolidated affiliates	2,082	2,064
Goodwill	4,435	4,420
Other	496	530
Total investments and other assets	7,013	7,014
Property, Plant and Equipment
Cost	24,803	23,932
Less accumulated depreciation and amortization	6,005	5,674
Net property, plant and equipment	18,798	18,258
Regulatory Assets and Deferred Debits	1,169	1,102
Total Assets	28,375	28,138
Current Liabilities
Accounts payable	458	498
Short-term borrowings and commercial paper	1,073	1,052
Taxes accrued	72	82
Interest accrued	186	178
Current maturities of long-term debt	1,030	525
Other	625	766
Total current liabilities	3,444	3,101
Long-term Debt	9,632	10,146
Deferred Credits and Other Liabilities
Deferred income taxes	4,163	3,940
Regulatory and other	1,730	1,797
Total deferred credits and other liabilities	5,893	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 June 30, 2012 and December 31, 2011, respectively	1	1
Additional paid-in capital	4,830	4,814
Retained earnings	2,156	1,977
Accumulated other comprehensive income	1,332	1,273
Total controlling interests	8,319	8,065
Noncontrolling interests	829	831
Total equity	9,148	8,896
Total Liabilities and Equity	$ 28,375	$ 28,138

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Discontinued Operations

6 Months Ended

Jun. 30, 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 June 30, 2012
Other	$	42	$	—	$	—	$	—
Total consolidated	$	42	$	—	$	—	$	—
Three Months Ended June 30, 2011
Other	$	48	$	15	$	6	$	9
Total consolidated	$	48	$	15	$	6	$	9
Six Months Ended June 30, 2012
Other	$	99	$	3	$	1	$	2
Total consolidated	$	99	$	3	$	1	$	2
Six Months Ended June 30, 2011
Other	$	132	$	25	$	9	$	16
Total consolidated	$	132	$	25	$	9	$	16

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Income Taxes

6 Months Ended

Jun. 30, 2012

Income Taxes

4. Income Taxes

Income tax expense from continuing operations for the three months ended June 30, 2012 was $80 million, compared to $125 million for the same period in 2011. Income tax expense from continuing operations for the six months ended June 30, 2012 was $217 million, compared to $264 million reported for the same period in 2011. The lower income tax expense for the periods resulted from lower earnings from continuing operations and a lower Canadian effective tax rate, partially offset by favorable tax adjustments in 2011.

The effective tax rate for income from continuing operations for the three months ended June 30, 2012 and 2011 were 25% compared to 30%, respectively, and were 27% and 28% for the six-month periods. The lower effective tax rates were primarily due to a lower Canadian effective tax rate.

No material net change in uncertain tax positions was recognized during the six months ended June 30, 2012. Although uncertain, we believe it is reasonably possible that the total amount of uncertain tax positions could increase by approximately $14 million prior to June 30, 2013. The anticipated changes in unrecognized tax benefits relate to expiration of statutes of limitation and expected audit settlements.

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Employee Benefit Plans

6 Months Ended

Jun. 30, 2012

Employee Benefit Plans

16. Employee Benefit Plans

Retirement Plans. We have a qualified non-contributory defined benefit (DB) retirement plan for most 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 $11 million to our U.S. retirement plans in the six months ended June 30, 2012 and $10 million in the same period in 2011. We made total contributions to the Canadian DC and qualified DB plans of $35 million during the six months ended June 30, 2012 and $36 million in the same period in 2011. We anticipate that we will make total contributions of approximately $25 million to the U.S. plans and approximately $95 million to the Canadian plans in 2012.

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(in millions)
U.S.
Service cost benefit earned	$	4		$	4		$	7		$	7
Interest cost on projected benefit obligation		6			7			12			13
Expected return on plan assets		(7	)		(8	)		(15	)		(16	)
Amortization of loss		3			2			7			5
Net periodic pension cost	$	6		$	5		$	11		$	9
Canada
Service cost benefit earned	$	6		$	6		$	13		$	11
Interest cost on projected benefit obligation		12			13			25			27
Expected return on plan assets		(14	)		(13	)		(29	)		(25	)
Amortization of loss		9			8			18			14
Amortization of prior service costs		1			1			1			1
Net periodic pension cost	$	14		$	15		$	28		$	28

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 June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(in millions)
U.S.
Interest cost on accumulated post-retirement benefit obligation	$	1		$	2		$	4		$	5
Expected return on plan assets		(1	)		(1	)		(2	)		(2	)
Amortization of loss		1			1			1			1
Net periodic other post-retirement benefit cost	$	1		$	2		$	3		$	4
Canada
Service cost benefit earned	$	2		$	1		$	4		$	2
Interest cost on accumulated post-retirement benefit obligation		1			2			3			4
Amortization of loss		1			—			1			—
Net periodic other post-retirement benefit cost	$	4		$	3		$	8		$	6

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 $3 million in both the three-month periods ended June 30, 2012 and 2011 and $7 million in both the six-month periods ended June 30, 2012 and 2011 for U.S. employees, and $3 million in both the three-month periods ended June 30, 2012 and 2011 and $6 million in both the six-month periods ended June 30, 2012 and 2011 for Canadian employees.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2012

Fair Value Measurements

12. 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	June 30, 2012
		Total		Level 1		Level 2		Level 3
		(in millions)
Corporate debt securities	Cash and cash equivalents	$	56	$	—	$	56	$	—
Corporate debt securities	Current assets—other		5		—		5		—
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		56		—		56		—
Money market funds	Investments and other assets—other		1		1		—		—
Total Assets		$	134	$	1	$	133	$	—
Derivative liabilities—natural gas purchase contracts	Deferred credits and other liabilities—regulatory and other	$	10	$	—	$	—	$	10
Derivative liabilities—interest rate swaps	Deferred credits and other liabilities—regulatory and other		14		—		14		—
Total Liabilities		$	24	$	—	$	14	$	10
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 June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(in millions)
Long-term derivative assets (liabilities)
Fair value, beginning of period	$	(15	)	$	(6	)	$	(14	)	$	(6	)
Total realized/unrealized gains (losses):
Included in earnings		(1	)		—			—			(1	)
Included in other comprehensive income		5			(2	)		3			(1	)
Settlements		1			—			1			—
Fair value, end of period	$	(10	)	$	(8	)	$	(10	)	$	(8	)
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	)	$	(2	)	$	—		$	(5	)

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.

	June 30, 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)		10,595		12,514		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 value of our long-term debt is 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, note receivable-noncurrent, 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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Investments in and Loans to Unconsolidated Affiliates

6 Months Ended

Jun. 30, 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 June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(in millions)
Operating revenues	$	2,219	$	3,304	$	5,121	$	6,233
Operating expenses		1,998		2,957		4,692		5,712
Operating income		221		347		429		521
Net income		185		303		340		428
Net income attributable to members’ interests		132		277		276		410

DCP Midstream recorded gains on sales of common units of DCP Partners to equity in the first and second quarters of 2012 and the first quarter of 2011. Our proportionate 50% share, totaling $21 million and $1 million in the first and second quarters of 2012, respectively, and $14 million in the first quarter of 2011, 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. Purchases of propane under the settlement agreement, and subsequent sales to affiliates of DCP Midstream, ended during the second quarter of 2012.

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(in millions)
Sales of propane	$	42	$	48	$	99	$	132

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Fair Value of Financial Instruments Recorded and Carried at Book Value (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 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	10,595	[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	$ 12,514	[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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Earnings per Common Share

6 Months Ended

Jun. 30, 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 include the effect of certain options and restricted stock awards. Certain other options related to approximately five million shares for both the three and six-month periods ended June 30, 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 June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(in millions, except per-share amounts)
Income from continuing operations, net of tax—controlling interests	$	215	$	275	$	546	$	625
Income from discontinued operations, net of tax—controlling interests		—		9		2		16
Net income—controlling interests	$	215	$	284	$	548	$	641
Weighted-average common shares outstanding
Basic		653		650		652		650
Diluted		655		652		655		652
Basic earnings per common share (a)
Continuing operations	$	0.33	$	0.42	$	0.84	$	0.96
Discontinued operations, net of tax		—		0.02		—		0.03
Total basic earnings per common share	$	0.33	$	0.44	$	0.84	$	0.99
Diluted earnings per common share (a)
Continuing operations	$	0.33	$	0.42	$	0.83	$	0.96
Discontinued operations, net of tax		—		0.02		0.01		0.02
Total diluted earnings per common share	$	0.33	$	0.44	$	0.84	$	0.98

(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

6 Months Ended

Jun. 30, 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:

	June 30, 2012		December 31, 2011
	(in millions)
Natural gas	$	164	$	263
NGLs		68		58
Materials and supplies		75		72
Total inventory	$	307	$	393

An $8 million non-cash charge was recorded to Natural Gas and Petroleum Products Purchased on the Condensed Consolidated Statements of Operations ($6 million after tax) in the second quarter of 2012 to reduce propane and butane inventory as of June 30, 2012 at our Empress operations at Western Canada Transmission & Processing to estimated net realizable value.

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Marketable Securities and Restricted Funds

6 Months Ended

Jun. 30, 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. Estimated fair values of AFS securities follow:

	Estimated Fair Value
	June 30, 2012		December 31, 2011
	(in millions)
Corporate debt securities	$	11	$	18
Canadian government securities		—		14
Money market funds		1		3
Total available-for-sale investments	$	12	$	35

We had no restricted AFS securities classified as Current Assets—Other as of June 30, 2012 and $14 million as of December 31, 2011, and $1 million as of June 30, 2012 and $3 million December 31, 2011 classified as Investments and Other Assets—Other. These restricted funds are related to insurance.

At June 30, 2012, the weighted-average contractual maturity of outstanding AFS securities was one year.

There were no gross unrealized holding gains or losses associated with investments in AFS securities at June 30, 2012 or December 31, 2011.

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.

HTM Securities. Estimated fair values of HTM securities follow:

	Estimated Fair Value
	June 30, 2012		December 31, 2011
	(in millions)
Canadian government securities	$	111	$	107
Bankers acceptances		154		55
Total held-to-maturity investments	$	265	$	162

Restricted HTM marketable securities of $40 million as of June 30, 2012 are classified as Current Assets—Other, and $225 million as of June 30, 2012 and $162 million as of December 31, 2011 are classified as Investments and Other 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 have otherwise been available for distribution to the partners of M&N LP, were required to be placed in escrow until the balance in escrow was sufficient to fund all future debt service on the M&N LP notes. As of June 30, 2012, there were sufficient funds held in escrow to fund all future debt service on the M&N LP notes.

At June 30, 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 June 30, 2012 or December 31, 2011.

Other Restricted Funds. In addition to the AFS and HTM securities described above, we had restricted funds totaling $21 million at June 30, 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 related to additional amounts for the M&N LP debt service requirements and insurance.

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

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Employee Benefit Plans - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 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			$ 11	$ 10
Anticipated contributions to the defined benefit plans in 2012	25		25
Canada Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Contribution to retirement plans			35	36
Anticipated contributions to the defined benefit plans in 2012	95		95
U.S. Other Post-Retirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Expensed pre-tax employer matching contributions	3	3	7	7
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	$ 6	$ 6
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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Other Post Retirement Benefit Plans Components of Net Periodic Benefit Cost (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
U.S. Other Post-Retirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Interest cost on accumulated post-retirement benefit obligation	$ 1	$ 2	$ 4	$ 5
Expected return on plan assets	(1)	(1)	(2)	(2)
Amortization of loss	1	1	1	1
Net periodic cost	1	2	3	4
Canadian Other Post-Retirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost benefit earned	2	1	4	2
Interest cost on accumulated post-retirement benefit obligation	1	2	3	4
Amortization of loss	1		1
Net periodic cost	$ 4	$ 3	$ 8	$ 6

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Guarantees and Indemnifications - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 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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Debt and Credit Facilities (Tables)

6 Months Ended

Jun. 30, 2012

Available Credit Facilities and Restrictive Debt Covenants

Available Credit Facilities and Restrictive Debt Covenants

	Expiration Date		Total Credit Facilities Capacity		Outstanding at June 30, 2012						Available Credit Facilities Capacity
					Commercial Paper		Letters of Credit		Total
			(in millions)
Spectra Energy Capital, LLC (a)
Multi-year syndicated		2016	$	1,500	$	936	$	5	$	941	$	559
Westcoast Energy Inc. (b)
Multi-year syndicated		2016		295		—		—		—		295
Union Gas (c)
Multi-year syndicated		2016		393		97		—		97		296
Spectra Energy Partners (d)
Multi-year syndicated		2016		700		40		—		40		660
Total			$	2,888	$	1,073	$	5	$	1,078	$	1,810

(a) Credit facility contains a covenant requiring the Spectra Energy Corp consolidated debt-to-total capitalization ratio, as defined in the agreement, to not exceed 65%. This ratio was 58% at June 30, 2012.

(b) U.S. dollar equivalent at June 30, 2012. The credit facility is 300 million Canadian dollars and contains a covenant that requires the Westcoast Energy Inc. non-consolidated debt-to-total capitalization ratio to not exceed 75%. The ratio was 44% at June 30, 2012.

(c) U.S. dollar equivalent at June 30, 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 65% at June 30, 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 or less. As of June 30, 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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Sales of Propane to Affiliates of DCP Midstream (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Related Party Transaction [Line Items]
Sales of propane	$ 42	$ 48	$ 99	$ 132

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2012

Commitments and Contingencies

14. 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 $13 million as of June 30, 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 June 30, 2012 or December 31, 2011 related to litigation.

Other Commitments and Contingencies

See Note 15 for a discussion of guarantees and indemnifications.

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Subsequent Events

6 Months Ended

Jun. 30, 2012

Subsequent Events

19. Subsequent Events

On July 17, 2012, Algonquin Gas Transmission, LLC (Algonquin), issued $350 million aggregate principal amount of 3.51% notes due in 2024. Net proceeds from the offering were used for general corporate purposes.

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Investments in and Loans to Unconsolidated Affiliates - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended		3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012 DCP Midstream, LLC	Mar. 31, 2012 DCP Midstream, LLC	Mar. 31, 2011 DCP Midstream, LLC
Schedule of Equity Method Investments [Line Items]
Percentage of ownership interests					50.00%
Equity in earnings of unconsolidated affiliates	$ 91	$ 162	$ 209	$ 268	$ 1	$ 21	$ 14

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Business Segment Data (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2012		Jun. 30, 2011
Segment Reporting Information [Line Items]
Unaffiliated Revenues	$ 1,112		$ 1,188		$ 2,656		$ 2,800
Total operating revenues	1,112	[1]	1,188	[1]	2,656	[1]	2,800	[1]
Segment EBIT/ Consolidated Earnings from Continuing Operations before Income Taxes	321	[1]	423	[1]	817	[1]	937	[1]
Interest Expense	155	[1]	159	[1]	312	[1]	314	[1]
Interest income and other	29	[1],[2]	29	[1],[2]	58	[1],[2]	54	[1],[2]
US Transmission
Segment Reporting Information [Line Items]
Unaffiliated Revenues	462		454		955		935
Intersegment Revenues	2		3		4		5
Total operating revenues	464	[1]	457	[1]	959	[1]	940	[1]
Segment EBIT/ Consolidated Earnings from Continuing Operations before Income Taxes	237	[1]	243	[1]	508	[1]	522	[1]
Distribution
Segment Reporting Information [Line Items]
Unaffiliated Revenues	322		375		919		1,071
Total operating revenues	322	[1]	375	[1]	919	[1]	1,071	[1]
Segment EBIT/ Consolidated Earnings from Continuing Operations before Income Taxes	75	[1]	88	[1]	226	[1]	255	[1]
Western Canada Transmission & Processing
Segment Reporting Information [Line Items]
Unaffiliated Revenues	325		357		778		790
Intersegment Revenues	4		14		17		20
Total operating revenues	329	[1]	371	[1]	795	[1]	810	[1]
Segment EBIT/ Consolidated Earnings from Continuing Operations before Income Taxes	94	[1]	113	[1]	232	[1]	254	[1]
Field Services
Segment Reporting Information [Line Items]
Segment EBIT/ Consolidated Earnings from Continuing Operations before Income Taxes	66	[1]	138	[1]	159	[1]	219	[1]
Total reportable segments
Segment Reporting Information [Line Items]
Unaffiliated Revenues	1,109		1,186		2,652		2,796
Intersegment Revenues	6		17		21		25
Total operating revenues	1,115	[1]	1,203	[1]	2,673	[1]	2,821	[1]
Segment EBIT/ Consolidated Earnings from Continuing Operations before Income Taxes	472	[1]	582	[1]	1,125	[1]	1,250	[1]
Other
Segment Reporting Information [Line Items]
Unaffiliated Revenues	3		2		4		4
Intersegment Revenues	16		14		36		29
Total operating revenues	19	[1]	16	[1]	40	[1]	33	[1]
Segment EBIT/ Consolidated Earnings from Continuing Operations before Income Taxes	(25)	[1]	(29)	[1]	(54)	[1]	(53)	[1]
Eliminations
Segment Reporting Information [Line Items]
Intersegment Revenues	(22)		(31)		(57)		(54)
Total operating revenues	$ (22)	[1]	$ (31)	[1]	$ (57)	[1]	$ (54)	[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.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Jun. 30, 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

6 Months Ended

Jun. 30, 2012

Regulatory Matters

3. Regulatory Matters

Union Gas. As 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. As part of the 2013 rates hearing process, Union Gas conducted settlement negotiations with its intervening parties. A settlement agreement was reached on most capital and rate base issues, and on all operating costs. That settlement agreement was accepted by the OEB on July 10, 2012. The unsettled issues, including operating revenue, cost of capital and rate design, are the subject of an OEB hearing that commenced on July 10, 2012. A decision on the unsettled issues is expected before the end of the year. 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. That application is expected to be filed in 2013.

Southeast Supply Header, LLC (SESH). SESH operates under rates approved by the FERC in 2008. That order required SESH to file a Cost and Revenue Study at the end of three years of operations. SESH filed the Cost and Revenue Study on September 6, 2011 and the FERC accepted the filing on July 26, 2012. There was no change to the currently effective rates.

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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	Jun. 30, 2012	Dec. 31, 2011
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	$ 134	$ 150
Fair Value Liabilities	24	30
Corporate Debt Securities | Cash and Cash Equivalents
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	56	49
Corporate Debt Securities | Current Assets-other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	5	2
Corporate Debt Securities | Investments and Other Assets-Other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	6	16
Canadian Government Securities | Current Assets-other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets		14
Interest Rate Swap | Current Assets-other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	10
Interest Rate Swap | Investments and Other Assets-Other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	56	66
Interest Rate Swap | Deferred Credits And Other Liabilities - Regulatory and Other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities	14	16
Money Market Funds | Investments and Other Assets-Other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	1	3
Natural Gas Purchase Contract | Current Liabilities - Other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities		1
Natural Gas Purchase Contract | Deferred Credits And Other Liabilities - Regulatory and Other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities	10	13
Fair Value, Inputs, Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	1	17
Fair Value, Inputs, Level 1 | Canadian Government Securities | Current Assets-other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets		14
Fair Value, Inputs, Level 1 | Money Market Funds | Investments and Other Assets-Other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	1	3
Fair Value, Inputs, Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	133	133
Fair Value Liabilities	14	16
Fair Value, Inputs, Level 2 | Corporate Debt Securities | Cash and Cash Equivalents
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	56	49
Fair Value, Inputs, Level 2 | Corporate Debt Securities | Current Assets-other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	5	2
Fair Value, Inputs, 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
Fair Value, Inputs, Level 2 | Interest Rate Swap | Current Assets-other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	10
Fair Value, Inputs, Level 2 | Interest Rate Swap | Investments and Other Assets-Other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	56	66
Fair Value, Inputs, Level 2 | Interest Rate Swap | Deferred Credits And Other Liabilities - Regulatory and Other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities	14	16
Fair Value, Inputs, Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities	10	14
Fair Value, Inputs, Level 3 | Natural Gas Purchase Contract | Current Liabilities - Other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities		1
Fair Value, Inputs, Level 3 | Natural Gas Purchase Contract | Deferred Credits And Other Liabilities - Regulatory and Other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities	$ 10	$ 13

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Condensed Consolidating Balance Sheet (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011	Dec. 31, 2010
Condensed Financial Statements, Captions [Line Items]
Cash and cash equivalents	$ 127	$ 174	$ 538	$ 130
Receivables-other	715	962
Other current assets	553	628
Total current assets	1,395	1,764
Investments in and loans to unconsolidated affiliates	2,082	2,064
Goodwill	4,435	4,420
Other assets	496	530
Property, plant and equipment, net	18,798	18,258
Regulatory Assets and Deferred Debits	1,169	1,102
Total Assets	28,375	28,138
Accounts payable-other	458	498
Short-term borrowings and commercial paper	1,073	1,052
Accrued taxes payable (receivable)	72	82
Current maturities of long-term debt	1,030	525
Other current liabilities	811	944
Total current liabilities	3,444	3,101
Long-term Debt	9,632	10,146
Deferred credits and other liabilities	5,893	5,737
Preferred stock of subsidiaries	258	258
Equity
Controlling interests	8,319	8,065
Noncontrolling interests	829	831
Total equity	9,148	8,896	9,283	8,487
Total Liabilities and Equity	28,375	28,138
Spectra Energy Corp
Condensed Financial Statements, Captions [Line Items]
Receivables (payables)-consolidated subsidiaries	62
Receivables-other	3
Other current assets	36	57
Total current assets	101	57
Investments in consolidated subsidiaries	12,345	11,720
Advances receivable (payable)-consolidated subsidiaries	(3,936)	(3,534)
Other assets	42	42
Regulatory Assets and Deferred Debits	3	1
Total Assets	8,555	8,286
Accounts payable-other	2	3
Accrued taxes payable (receivable)		(46)
Other current liabilities	45	76
Total current liabilities	47	33
Deferred credits and other liabilities	189	188
Equity
Controlling interests	8,319	8,065
Total equity	8,319	8,065
Total Liabilities and Equity	8,555	8,286
Spectra Energy Capital, LLC
Condensed Financial Statements, Captions [Line Items]
Cash and cash equivalents	1	2	1
Receivables (payables)-consolidated subsidiaries	(63)	(1)
Other current assets	12	5
Total current assets	(50)	6
Investments in and loans to unconsolidated affiliates	71	70
Investments in consolidated subsidiaries	15,629	14,884
Advances receivable (payable)-consolidated subsidiaries	4,380	4,116
Other assets	95	105
Regulatory Assets and Deferred Debits	12	15
Total Assets	20,137	19,196
Accounts payable-other	78	62
Short-term borrowings and commercial paper	1,530	1,343
Accrued taxes payable (receivable)		2
Current maturities of long-term debt	495
Other current liabilities	103	75
Total current liabilities	2,206	1,482
Long-term Debt	2,809	3,311
Deferred credits and other liabilities	2,777	2,683
Equity
Controlling interests	12,345	11,720
Total equity	12,345	11,720
Total Liabilities and Equity	20,137	19,196
Non-Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Cash and cash equivalents	126	172	537	130
Receivables (payables)-consolidated subsidiaries	1	1
Receivables-other	712	962
Other current assets	505	566
Total current assets	1,344	1,701
Investments in and loans to unconsolidated affiliates	2,011	1,994
Advances receivable (payable)-consolidated subsidiaries	150	10
Goodwill	4,435	4,420
Other assets	359	383
Property, plant and equipment, net	18,798	18,258
Regulatory Assets and Deferred Debits	1,154	1,086
Total Assets	28,251	27,852
Accounts payable-other	378	433
Short-term borrowings and commercial paper	137	301
Accrued taxes payable (receivable)	72	126
Current maturities of long-term debt	535	525
Other current liabilities	663	793
Total current liabilities	1,785	2,178
Long-term Debt	6,823	6,835
Deferred credits and other liabilities	2,927	2,866
Preferred stock of subsidiaries	258	258
Equity
Controlling interests	15,629	14,884
Noncontrolling interests	829	831
Total equity	16,458	15,715
Total Liabilities and Equity	28,251	27,852
Eliminations
Condensed Financial Statements, Captions [Line Items]
Investments in consolidated subsidiaries	(27,974)	(26,604)
Advances receivable (payable)-consolidated subsidiaries	(594)	(592)
Total Assets	(28,568)	(27,196)
Short-term borrowings and commercial paper	(594)	(592)
Total current liabilities	(594)	(592)
Equity
Controlling interests	(27,974)	(26,604)
Total equity	(27,974)	(26,604)
Total Liabilities and Equity	$ (28,568)	$ (27,196)

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General (Tables)

6 Months Ended

Jun. 30, 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)
Six Months Ended June 30, 2011
As previously reported	$	2,424		$	(2,371	)
Less non-cash activity		(1,567	)		1,567
As corrected		857			(804	)
Less revolving credit facility activity		(52	)		310
Long-term debt activity	$	805		$	(494	)

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General - Additional Information (Detail)	6 Months Ended
	Jun. 30, 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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Risk Management and Hedging Activities

6 Months Ended

Jun. 30, 2012

Risk Management and Hedging Activities

13. 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 processing and 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 June 30, 2012, we had “pay floating—receive fixed” interest rate swaps outstanding with a total notional principal amount of $2,096 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 six months ended June 30, 2012.