10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2014

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  ý    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  ý    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  ý    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  ý

Number of shares of Common Stock, $0.001 par value, outstanding as of June 30, 2014: 670,893,796

SPECTRA ENERGY CORP

FORM 10-Q FOR THE QUARTER ENDED

June 30, 2014

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, 2014 and 2013	4
	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2014 and 2013	5
	Condensed Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013	6
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2014 and 2013	8
	Condensed Consolidated Statements of Equity for the six months ended June 30, 2014 and 2013	9
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	45
Item 4.	Controls and Procedures	45
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	46
Item 6.	Exhibits	46
	Signatures	47

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 represent management’s intentions, plans, expectations, assumptions and beliefs about future events. 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 are subject to risks, uncertainties and other factors, many of which are outside our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Factors used to develop these forward-looking statements and that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to:

• state, provincial, 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 and oil 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 oil 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 and costs 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 and oil transmission and storage, distribution, and gathering and processing facilities;

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

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

• conditions of the capital markets during the periods covered by 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,
	2014		2013		2014		2013
Operating Revenues
Transportation, storage and processing of natural gas	$	780	$	766	$	1,667	$	1,566
Distribution of natural gas	309		283		935		908
Sales of natural gas liquids	40		65		227		177
Transportation of crude oil	70		67		141		80
Other	54		39		126		78
Total operating revenues	1,253		1,220		3,096		2,809
Operating Expenses
Natural gas and petroleum products purchased	209		167		737		632
Operating, maintenance and other	405		410		768		742
Depreciation and amortization	199		196		399		382
Property and other taxes	102		93		215		193
Total operating expenses	915		866		2,119		1,949
Operating Income	338		354		977		860
Other Income and Expenses
Equity in earnings of unconsolidated affiliates	85		72		246		182
Other income and expenses, net	6		22		15		55
Total other income and expenses	91		94		261		237
Interest Expense	176		160		354		309
Earnings Before Income Taxes	253		288		884		788
Income Tax Expense	65		62		229		192
Net Income	188		226		655		596
Net Income—Noncontrolling Interests	42		27		90		57
Net Income—Controlling Interests	$	146	$	199	$	565	$	539
Common Stock Data
Weighted-average shares outstanding
Basic	671		669		671		669
Diluted	673		671		672		671
Earnings per share
Basic	$	0.22	$	0.30	$	0.84	$	0.81
Diluted	$	0.22	$	0.30	$	0.84	$	0.80
Dividends per share	$	0.335	$	0.305	$	0.67	$	0.61

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,
	2014		2013			2014			2013
Net Income	$	188	$	226		$	655		$	596
Other comprehensive income (loss)
Foreign currency translation adjustments	223		(251		)	(25		)	(440		)
Unrealized mark-to-market net gain on hedges	1		—			3			3
Reclassification of cash flow hedges into earnings	1		2			3			4
Pension and benefits impact (net of taxes of $3, $5, $6 and $9, respectively)	6		10			13			21
Other	—		(1		)	—			—
Total other comprehensive income (loss)	231		(240		)	(6		)	(412		)
Total Comprehensive Income (Loss), net of tax	419		(14		)	649			184
Less: Comprehensive Income—Noncontrolling Interests	45		25			89			52
Comprehensive Income (Loss)—Controlling Interests	$	374	$	(39	)	$	560		$	132

See Notes to Condensed Consolidated Financial Statements.

5

SPECTRA ENERGY CORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions)

	June 30, 2014		December 31, 2013
ASSETS
Current Assets
Cash and cash equivalents	$	300	$	201
Receivables, net	1,222		1,336
Inventory	277		263
Fuel tracker	165		28
Other	241		253
Total current assets	2,205		2,081
Investments and Other Assets
Investments in and loans to unconsolidated affiliates	2,803		3,043
Goodwill	4,841		4,810
Other	398		385
Total investments and other assets	8,042		8,238
Property, Plant and Equipment
Cost	29,223		28,456
Less accumulated depreciation and amortization	6,963		6,627
Net property, plant and equipment	22,260		21,829
Regulatory Assets and Deferred Debits	1,439		1,385
Total Assets	$	33,946	$	33,533

See Notes to Condensed Consolidated Financial Statements.

6

SPECTRA ENERGY CORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions, except per-share amounts)

	June 30, 2014		December 31, 2013
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	518	$	440
Commercial paper	769		1,032
Taxes accrued	103		72
Interest accrued	193		201
Current maturities of long-term debt	496		1,197
Other	1,077		1,097
Total current liabilities	3,156		4,039
Long-term Debt	13,141		12,488
Deferred Credits and Other Liabilities
Deferred income taxes	5,223		4,968
Regulatory and other	1,423		1,457
Total deferred credits and other liabilities	6,646		6,425
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, 671 million and 670 million shares outstanding at June 30, 2014 and December 31, 2013, respectively	1		1
Additional paid-in capital	4,918		4,869
Retained earnings	2,497		2,383
Accumulated other comprehensive income	1,236		1,241
Total controlling interests	8,652		8,494
Noncontrolling interests	2,093		1,829
Total equity	10,745		10,323
Total Liabilities and Equity	$	33,946	$	33,533

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,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	655		$	596
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	405			388
Deferred income tax expense	224			182
Equity in earnings of unconsolidated affiliates	(246		)	(182		)
Distributions received from unconsolidated affiliates	199			147
Other	(28		)	69
Net cash provided by operating activities	1,209			1,200
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(833		)	(959		)
Investments in and loans to unconsolidated affiliates	(30		)	(168		)
Acquisitions, net of cash acquired	—			(1,254		)
Purchases of held-to-maturity securities	(437		)	(456		)
Proceeds from sales and maturities of held-to-maturity securities	453			463
Purchases of available-for-sale securities	(13		)	(2,899		)
Proceeds from sales and maturities of available-for-sale securities	7			2,722
Distributions received from unconsolidated affiliates	242			13
Other changes in restricted funds	(1		)	1
Other	—			2
Net cash used in investing activities	(612		)	(2,535		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	712			1,848
Payments for the redemption of long-term debt	(736		)	(546		)
Net increase (decrease) in commercial paper	(256		)	440
Distributions to noncontrolling interests	(81		)	(69		)
Contributions from noncontrolling interests	112			—
Dividends paid on common stock	(453		)	(412		)
Proceeds from the issuance of Spectra Energy Partners, LP common units	191			190
Other	12			10
Net cash provided by (used in) financing activities	(499		)	1,461
Effect of exchange rate changes on cash	1			(3		)
Net increase in cash and cash equivalents	99			123
Cash and cash equivalents at beginning of period	201			94
Cash and cash equivalents at end of period	$	300		$	217
Supplemental Disclosures
Property, plant and equipment non-cash accruals	$	118		$	148

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, 2013	$	1	$	4,869		$	2,383		$	1,557		$	(316	)	$	1,829		$	10,323
Net income	—		—			565			—			—			90			655
Other comprehensive income (loss)	—		—			—			(24		)	19			(1		)	(6		)
Dividends on common stock	—		—			(451		)	—			—			—			(451		)
Stock-based compensation	—		6			—			—			—			—			6
Distributions to noncontrolling interests	—		—			—			—			—			(81		)	(81		)
Contributions from noncontrolling interests	—		—			—			—			—			112			112
Spectra Energy common stock issued	—		9			—			—			—			—			9
Spectra Energy Partners, LP common units issued	—		29			—			—			—			144			173
Transfer of interests in subsidiaries to Spectra Energy Partners, LP	—		—			—			—			—			1			1
Other, net	—		5						—			—			(1		)	4
June 30, 2014	$	1	$	4,918		$	2,497		$	1,533		$	(297	)	$	2,093		$	10,745
December 31, 2012	$	1	$	5,297		$	2,165		$	2,044		$	(535	)	$	871		$	9,843
Net income	—		—			539			—			—			57			596
Other comprehensive income (loss)	—		—			—			(435		)	28			(5		)	(412		)
Dividends on common stock	—		—			(410		)	—			—			—			(410		)
Stock-based compensation	—		4			—			—			—			—			4
Distributions to noncontrolling interests	—		—			—			—			—			(69		)	(69		)
Spectra Energy common stock issued	—		10			—			—			—			—			10
Spectra Energy Partners, LP common units issued	—		38			—			—			—			128			166
Other, net			(2		)	—									3			1
June 30, 2013	$	1	$	5,347		$	2,294		$	1,609		$	(507	)	$	985		$	9,729

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. The term “Spectra Energy Partners” refers to our Spectra Energy Partners operating segment. The term “SEP” refers to Spectra Energy Partners, LP, our master limited partnership.

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, and owns and operates a crude oil pipeline system that connects Canadian and U.S. producers to refineries in the U.S. Rocky Mountain and Midwest regions. We currently operate in three key areas of the natural gas industry: gathering and processing, transmission and storage, and distribution. We provide transmission and storage of natural gas to customers in various regions of the northeastern and southeastern United States, the Maritime Provinces in Canada, 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. We also own a 50% interest in DCP Midstream, LLC (DCP Midstream), based in Denver, Colorado, one of the leading natural gas gatherers in the United States based on wellhead volumes, and one of the largest U.S. producers and marketers of natural gas liquids (NGLs).

Basis of Presentation. The accompanying Condensed Consolidated Financial Statements include our accounts and the accounts of our majority-owned subsidiaries, after eliminating intercompany transactions and balances. 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, 2013, 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.

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. Acquisition of Express-Platte

In March 2013, we acquired 100% of the ownership interests in the Express-Platte crude oil pipeline system for $1.5 billion, consisting of $1.25 billion in cash and $260 million of acquired debt, before working capital adjustments. The Express-Platte pipeline system, which begins in Hardisty, Alberta, and terminates in Wood River, Illinois, is comprised of both the Express and Platte crude oil pipelines. The Express pipeline carries crude oil to U.S. refining markets in the Rockies area, including Montana, Wyoming, Colorado and Utah. The Platte pipeline, which interconnects with Express pipeline in Casper, Wyoming, transports crude oil predominantly from the Bakken shale and western Canada to refineries in the Midwest. In 2013, subsidiaries of Spectra Energy contributed a 100% interest in the U.S. portion of Express-Platte and sold a 100% ownership interest in the Canadian portion to SEP.

10

The following table summarizes the fair values of the assets and liabilities acquired as of the date of the acquisition.

	Purchase Price  Allocation
	(in millions)
Cash purchase price	$	1,250
Working capital and other purchase adjustments	71
Total	1,321
Cash	67
Receivables	25
Other current assets	9
Property, plant and equipment	1,251
Accounts payable	(18		)
Other current liabilities	(17		)
Deferred credits and other liabilities	(259		)
Long-term debt, including current portion	(260		)
Total assets acquired/liabilities assumed	798
Goodwill	$	523

The purchase price is greater than the sum of fair values of the net assets acquired, resulting in goodwill as noted above. The goodwill reflects the value of the strategic location of the pipeline and the opportunity to grow the business. Goodwill related to the acquisition of Express-Platte is not deductible for income tax purposes.

The allocation of the fair values of assets and liabilities acquired related to the acquisition of Express-Platte was finalized in the first quarter of 2014, resulting in the following adjustments to amounts reported as of December 31, 2013: a $60 million decrease in Property, Plant and Equipment, a $1 million decrease in Other Current Assets and a $24 million decrease in Deferred Credits and Other Liabilities, resulting in a $37 million increase in Goodwill.

Pro forma results of operations that reflect the acquisition of Express-Platte as if the acquisition had occurred as of the beginning of 2013 are not presented as they do not materially differ from actual results reported in our Condensed Consolidated Statements of Operations.

3. Business Segments

In November 2013, Spectra Energy contributed substantially all of its remaining U.S. transmission, storage and liquids assets to SEP (the U.S. Assets Dropdown). As a result of this transaction, we realigned our reportable segments structure. Amounts presented herein for 2013 segment information have been recast to conform to our current segment reporting presentation. There were no changes to consolidated data as a result of the recast of our segment information.

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

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

The presentation of our Spectra Energy Partners segment is reflective of the parent-level focus by our CODM, considering the resource allocation and governance provisions associated with SEP’s master limited partnership structure. SEP maintains a capital and cash management structure that is separate from Spectra Energy’s, is self-funding and maintains its own lines of bank credit and cash management accounts. It is in this context that our CODM evaluates the Spectra Energy Partners segment as a whole, without regard to any of SEP’s individual businesses. These factors, coupled with a different cost of capital of our other businesses, serve to differentiate how our Spectra Energy Partners segment is managed as compared to how SEP is managed.

11

Spectra Energy Partners provides transmission, storage and gathering of natural gas, as well as the transportation of crude oil and natural gas liquids (NGLs) through interstate pipeline systems for customers in various regions of the midwestern, northeastern and southeastern United States and Canada. The natural gas transmission and storage operations are primarily subject to the rules and regulations of the Federal Energy Regulatory Commission (FERC). The crude oil transportation operations are primarily subject to regulation by the FERC in the U.S. and the National Energy Board (NEB) in Canada. Our Spectra Energy Partners segment is composed of the operations of SEP, less governance costs, which are included in “Other.”

Distribution provides retail natural gas distribution service in Ontario, Canada, as well as natural gas transmission 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 transmission of natural gas, natural gas gathering and processing services, and NGL extraction, fractionation, transportation, storage and marketing to customers in western Canada, the northern tier of the United States and the Maritime Provinces in Canada. This segment conducts business mostly through BC Pipeline, BC Field Services, and the NGL marketing and Canadian Midstream businesses, and Maritimes & Northeast Pipeline Limited Partnership (M&N Canada). BC Pipeline and BC Field Services operations are primarily subject to the rules and regulations of the NEB.

Field Services gathers, compresses, treats, processes, transports, stores and sells natural gas, produces, fractionates, transports, stores and sells NGLs, and recovers and sells condensate. In addition, Field Services trades and markets natural gas and 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 Partners, LP (DCP Partners) is a publicly-traded master limited partnership, of which DCP Midstream acts as general partner. As of June 30, 2014, DCP Midstream had an approximate 22% ownership interest in DCP Partners, including DCP Midstream’s limited partner and general partner interests.

Our reportable segments offer different products and services and are managed separately as business units. Management evaluates segment performance based on earnings from continuing operations before interest, taxes, and depreciation and amortization (EBITDA). Cash, cash equivalents and short-term investments are managed at the parent-company levels, so the associated gains and losses from foreign currency transactions, and interest and dividend income are excluded from the segments’ EBITDA. Our segment EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate EBITDA in the same manner. Transactions between reportable segments are accounted for on the same basis as transactions with unaffiliated third parties.

12

Business Segment Data

Condensed Consolidated Statements of Operations
	Unaffiliated Revenues		Intersegment Revenues			Total Operating Revenues			Depreciation and Amortization		Segment EBITDA/ Consolidated Earnings before Income Taxes
	(in millions)
Three Months Ended June 30, 2014
Spectra Energy Partners	$	531	$	—		$	531		$	72	$	374
Distribution	360		—			360			48		112
Western Canada Transmission & Processing	360		31			391			68		111
Field Services	—		—			—			—		54
Total reportable segments	1,251		31			1,282			188		651
Other	2		17			19			11		(24		)
Eliminations	—		(48		)	(48		)	—		—
Depreciation and amortization	—		—			—			—		199
Interest expense	—		—			—			—		176
Interest income and other	—		—			—			—		1
Total consolidated	$	1,253	$	—		$	1,253		$	199	$	253
Three Months Ended June 30, 2013
Spectra Energy Partners	$	492	$	—		$	492		$	65	$	358
Distribution	352		—			352			51		115
Western Canada Transmission & Processing	373		18			391			70		157
Field Services	—		—			—			—		46
Total reportable segments	1,217		18			1,235			186		676
Other	3		15			18			10		(29		)
Eliminations	—		(33		)	(33		)	—		—
Depreciation and amortization	—		—			—			—		196
Interest expense	—		—			—			—		160
Interest income and other	—		—			—			—		(3		)
Total consolidated	$	1,220	$	—		$	1,220		$	196	$	288
Six Months Ended June 30, 2014
Spectra Energy Partners	$	1,112	$	—		$	1,112		$	145	$	803
Distribution	1,078		—			1,078			97		338
Western Canada Transmission & Processing	901		65			966			135		348
Field Services	—		—			—			—		184
Total reportable segments	3,091		65			3,156			377		1,673
Other	5		32			37			22		(41		)
Eliminations	—		(97		)	(97		)	—		—
Depreciation and amortization	—		—			—			—		399
Interest expense	—		—			—			—		354
Interest income and other	—		—			—			—		5
Total consolidated	$	3,096	$	—		$	3,096		$	399	$	884
Six Months Ended June 30, 2013
Spectra Energy Partners	$	951	$	—		$	951		$	126	$	705
Distribution	1,051		—			1,051			102		335
Western Canada Transmission & Processing	801		33			834			134		347
Field Services	—		—			—			—		134
Total reportable segments	2,803		33			2,836			362		1,521
Other	6		30			36			20		(43		)
Eliminations	—		(63		)	(63		)	—		—
Depreciation and amortization	—		—			—			—		382
Interest expense	—		—			—			—		309
Interest income and other	—		—			—			—		1
Total consolidated	$	2,809	$	—		$	2,809		$	382	$	788

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4. Regulatory Matters

Union Gas. In January 2014, Union Gas filed a notice of motion seeking leave to appeal to the Ontario Court of Appeal (Court of Appeal) for the unsuccessful appeal to the Ontario Divisional Court on the OEB’s treatment of 2011 revenues derived from the optimization of our upstream transportation contracts. A decision from the Court of Appeal on the notice of motion was issued in April 2014 granting leave to appeal. In May 2014, Union Gas filed a notice of appeal and a hearing is scheduled for December 2014.

Union Gas filed an application with the OEB in May 2013 for the annual disposition of the 2012 non-commodity deferral account balances. A decision on that application was issued by the OEB in March 2014. Among other things, the OEB determined that revenues derived from the optimization of Union Gas’ upstream transportation contracts in 2012 will be treated as revenues and included in utility earnings instead of a reduction to gas costs. The decision also denied a proposal to recover certain over-refunds to customers and reduced incentive amounts related to Union Gas’ 2011 energy conservation program. As a result of this OEB decision, Union Gas recognized pre-tax income of $10 million in the first quarter of 2014, comprised of a $32 million increase in Transportation, Storage and Processing of Natural Gas revenues, a $15 million decrease in Distribution of Natural Gas revenues and a $7 million decrease in Other revenues on the Condensed Consolidated Statements of Operations. In addition, the decision also approved the deferral of pension expense for recovery from customers, resulting in pre-tax income of $7 million, recorded as a reduction in Operating, Maintenance and Other expense in the second quarter of 2014.

On May 2, 2014, Union Gas filed an application with the OEB for the annual disposition of its 2013 non-commodity deferral account balances. The combined impact is a net payable to customers of approximately $21 million which is primarily reflected as Current Liabilities—Other on the Condensed Consolidated Balance Sheets at June 30, 2014. A hearing and decision from the OEB is expected later this year.

5. Income Taxes

Income tax expense was $65 million for the three months ended June 30, 2014, compared with $62 million for the same period in 2013. The higher tax expense was driven by the reversal of tax reserves in the 2013 period as a result of favorable Canadian federal income tax legislation enacted in the second quarter of 2013, mostly offset by lower Canadian earnings in 2014.

Income tax expense was $229 million for the six months ended June 30, 2014, compared with $192 million for the same period in 2013. The higher tax expense was driven primarily by higher earnings and the reversal of tax reserves in the 2013 period.

The effective income tax rate for the three months ended June 30, 2014 and 2013 was 26% and 22%, respectively, and 26% and 24% for the six-month periods, respectively. The lower effective tax rates in the 2013 periods resulted primarily from the reversal of tax reserves in the second quarter of 2013.

There was no material net change in unrecognized tax benefits recorded during the six-month period ended June 30, 2014. Although uncertain, we believe it is reasonably possible that the total amount of unrecognized tax benefits could decrease by approximately $15 million to $20 million prior to June 30, 2015.

In September 2013, the U.S. Treasury and the Internal Revenue Service (IRS) issued final regulations regarding the deduction and capitalization of expenditures related to tangible property (tangible property regulations). The final IRS regulations apply to amounts paid to acquire, produce, or improve tangible property as well as dispositions of such property and are for tax years beginning on or after January 1, 2014. We are currently evaluating the tangible property regulations and awaiting the release of additional regulations and industry specific guidance. Any changes resulting from the tangible property regulations will affect the timing of deducting expenditures for tax purposes and the impact will be reflected in income tax payable or receivable, deferred taxes and cash paid for income taxes. Our earnings will not be impacted.

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.

14

The following table presents our basic and diluted EPS calculations:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(in millions, except per-share amounts)
Net income—controlling interests	$	146	$	199	$	565	$	539
Weighted-average common shares outstanding
Basic	671		669		671		669
Diluted	673		671		672		671
Basic earnings per common share (a)	$	0.22	$	0.30	$	0.84	$	0.81
Diluted earnings per common share (a)	$	0.22	$	0.30	$	0.84	$	0.80

—————

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

rounding.

7. Accumulated Other Comprehensive Income

The following table presents the net of tax changes in Accumulated Other Comprehensive Income (AOCI) by component and amounts reclassified out of AOCI to Net Income, excluding amounts attributable to noncontrolling interests:

	Foreign Currency Translation Adjustments			Pension and Post-retirement Benefit Plan Obligations				Gas Purchase Contract Hedges			Other			Total Accumulated Other Comprehensive Income
							(in millions)
March 31, 2014	$	1,313		$	(297	)		$	(7	)	$	(1	)	$	1,008
Reclassified to net income	—			—				—			1			1
Other AOCI activity	220			6				1			—			227
June 30, 2014	$	1,533		$	(291	)		$	(6	)	$	—		$	1,236
March 31, 2013	$	1,858		$	(496	)		$	(18	)	$	(4	)	$	1,340
Reclassified to net income	—			—				1			1			2
Other AOCI activity	(249		)	10				—			(1		)	(240		)
June 30, 2013	$	1,609		$	(486	)		$	(17	)	$	(4	)	$	1,102
December 31, 2013	$	1,557		$	(304	)		$	(11	)	$	(1	)	$	1,241
Reclassified to net income	—			—				2			1			3
Other AOCI activity	(24		)	13				3			—			(8		)
June 30, 2014	$	1,533		$	(291	)		$	(6	)	$	—		$	1,236
December 31, 2012	$	2,044		$	(507	)		$	(23	)	$	(5	)	$	1,509
Reclassified to net income	—			—				3			1			4
Other AOCI activity	(435		)	21				3			—			(411		)
June 30, 2013	$	1,609		$	(486	)		$	(17	)	$	(4	)	$	1,102

Reclassifications to Net Income are primarily included in Other Income and Expenses, Net on our Condensed Consolidated Statements of Operations.

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8. 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 as either a receivable or a current liability, as appropriate, for future disposition with customers, subject to approval by the OEB. The remaining inventory is recorded at the lower of cost or market, primarily using average cost. The components of inventory are as follows:

	June 30, 2014		December 31, 2013
	(in millions)
Natural gas	$	166	$	155
NGLs	33		30
Materials and supplies	78		78
Total inventory	$	277	$	263

9. 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,
	2014		2013		2014		2013
	(in millions)
Operating revenues	$	3,541	$	2,861	$	7,456	$	5,473
Operating expenses	3,387		2,671		7,032		5,121
Operating income	154		190		424		352
Net income	92		142		295		262
Net income attributable to members’ interests	89		78		254		169

DCP Partners issues, from time to time, limited partner units to the public, which are recorded by DCP Midstream directly to its equity. Our proportionate share of gains from those issuances, totaling $9 million and $7 million in the second quarters of 2014 and 2013, respectively, and $57 million and $50 million during the six-month periods ended June 30, 2014 and 2013, respectively, are reflected in Equity in Earnings of Unconsolidated Affiliates in the Condensed Consolidated Statements of Operations.

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, 2014 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 and our Spectra Energy Partners reportable segment, which are one level below.

As permitted under accounting guidance on testing goodwill for impairment, we perform 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 consider events and circumstances specific to us, such as macroeconomic conditions, industry and market considerations, cost factors and overall financial performance, when evaluating whether it is more likely than not that the fair values of our reporting units are less than their respective carrying amounts.

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The following presents changes in goodwill during 2014:

	Goodwill
	(in millions)
December 31, 2013	$	4,810
Acquisition of Express-Platte	37
Foreign currency translation	(6		)
June 30, 2014	$	4,841

See Note 2 for discussion of the acquisition of Express-Platte and an adjustment to Goodwill recorded in the first quarter of 2014 related to the acquisition.

11. 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, therefore we do not have any securities classified as trading securities. While we do not routinely sell marketable securities prior to their scheduled maturity dates, some of our investments may be held and restricted for insurance purposes, so these investments are classified as available-for-sale (AFS) marketable securities as they may occasionally be sold prior to their scheduled maturity dates due to the unexpected timing of cash needs. Initial investments in securities are classified as purchases of the respective type of securities (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. AFS securities are as follows:

	Estimated Fair Value
	June 30, 2014		December 31, 2013
	(in millions)
Corporate debt securities	$	24	$	18
Money market funds	1		1
Total available-for-sale securities	$	25	$	19

Our AFS securities are classified on the Condensed Consolidated Balance Sheets as follows:

	Estimated Fair Value
	June 30, 2014		December 31, 2013
	(in millions)
Restricted funds
Investments and other assets—other	$	1	$	1
Non-restricted funds
Current assets—other	—		7
Investments and other assets—other	24		11
Total available-for-sale securities	$	25	$	19

At June 30, 2014, the weighted-average contractual maturity of outstanding AFS securities was two years.

There were no material gross unrealized holding gains or losses associated with investments in AFS securities at June 30, 2014 or December 31, 2013.

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HTM Securities. All of our HTM securities are restricted funds and are as follows:

		Estimated Fair Value
Description	Condensed Consolidated Balance Sheet Caption	June 30, 2014		December 31, 2013
		(in millions)
Bankers acceptances	Current assets—other	$	35	$	35
Canadian government securities	Current assets—other	33		34
Money market funds	Current assets—other	4		3
Canadian government securities	Investments and other assets—other	125		131
Bankers acceptances	Investments and other assets—other	—		10
Total held-to-maturity securities		$	197	$	213

All of our HTM securities are restricted funds pursuant to certain M&N Canada and Express-Platte debt agreements. The funds restricted for M&N Canada, plus future cash from operations that would otherwise be available for distribution to the partners of M&N Canada, are required to be placed in escrow until the balance in escrow is sufficient to fund all future debt service on the M&N Canada 6.90% senior secured notes. There are sufficient funds held in escrow to fund all future debt service on these M&N Canada notes.

At June 30, 2014, the weighted-average contractual maturity of outstanding HTM securities was one year.

There were no material gross unrecognized holding gains or losses associated with investments in HTM securities at June 30, 2014 or December 31, 2013.

Other Restricted Funds. In addition to the portions of the AFS and HTM securities that were restricted funds as described above, we had other restricted funds totaling $20 million at June 30, 2014 and $19 million at December 31, 2013 classified as Current Assets—Other. These restricted funds are related to additional amounts for the M&N Canada debt service requirements and insurance.

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

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12. Debt and Credit Facilities

Available Credit Facilities and Restrictive Debt Covenants

	Expiration Date	Total Credit Facilities Capacity		Commercial Paper Outstanding at June 30, 2014		Available Credit Facilities Capacity
		(in millions)
Spectra Energy Capital, LLC (a)	2018	$	1,000	$	220	$	780
SEP (b)	2018	2,000		549		1,451
Westcoast Energy Inc. (c)	2016	281		—		281
Union Gas (d)	2016	375		—		375
Total		$	3,656	$	769	$	2,887

___________

(a) Revolving 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%. Per the terms of the agreement, collateralized debt is excluded from the calculation of the ratio. This ratio was 56% at June 30, 2014.

(b) Revolving credit facility contains a covenant that requires SEP to maintain a ratio of total Consolidated Indebtedness-to-Consolidated EBITDA, as defined in the credit agreement, of 5.0 to 1 or less, provided that for three fiscal quarters subsequent to certain acquisitions (such as the November 1, 2013 U.S. Assets Dropdown from Spectra Energy Corp), the ratio may be 5.5 to 1 or less. As of June 30, 2014, this ratio was 3.9 to 1 after giving effect to the U.S. Assets Dropdown.

(c) U.S. dollar equivalent at June 30, 2014. The revolving 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 41% at June 30, 2014.

(d) U.S. dollar equivalent at June 30, 2014. The revolving 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, 2014.

The issuances of commercial paper, letters of credit and revolving borrowings reduce the amount available under the credit facilities. As of June 30, 2014, there were no letters of credit issued or revolving borrowings outstanding under the credit facilities.

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, 2014, 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.

Debt Issuances. On June 2, 2014, Union Gas issued 200 million Canadian dollars (approximately $183 million as of the issuance date) of 2.76% unsecured notes due 2021 and 250 million Canadian dollars (approximately $229 million as of the issuance date) of 4.20% unsecured notes due 2044. Net proceeds from the offerings were used for general corporate purposes.

In January 2014, Spectra Energy Capital, LLC (Spectra Capital) borrowed the full $300 million available under its unsecured term loan agreement. Interest on the borrowing is based on LIBOR (London Interbank Offered Rate) and the borrowing is due in 2018. Net proceeds from the borrowing were used for general corporate purposes.

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13. Fair Value Measurements

The following 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, 2014
		Total		Level 1		Level 2		Level 3
		(in millions)
Corporate debt securities	Cash and cash equivalents	$	73	$	—	$	73	$	—
Banker acceptances	Cash and cash equivalents	3		—		3		—
Interest rate swaps	Current assets—other	4		—		4		—
Corporate debt securities	Investments and other assets—other	24		—		24		—
Interest rate swaps	Investments and other assets—other	19		—		19		—
Money market funds	Investments and other assets—other	1		1		—		—
Total Assets		$	124	$	1	$	123	$	—
Commodity derivatives	Current liabilities—other	$	6	$	—	$	—	$	6
Interest rate swaps	Current liabilities—other	3		—		3		—
Natural gas purchase contracts	Deferred credits and other liabilities—regulatory and other	1		—		—		1
Commodity derivatives	Deferred credits and other liabilities—regulatory and other	2		—		—		2
Total Liabilities		$	12	$	—	$	3	$	9

Description	Condensed Consolidated Balance Sheet Caption	December 31, 2013
		Total		Level 1		Level 2		Level 3
		(in millions)
Corporate debt securities	Cash and cash equivalents	$	49	$	—	$	49	$	—
Corporate debt securities	Current assets—other	7		—		7		—
Interest rate swaps	Current assets—other	8		—		8		—
Corporate debt securities	Investments and other assets—other	11		—		11		—
Interest rate swaps	Investments and other assets—other	15		—		15		—
Money market funds	Investments and other assets—other	1		1		—		—
Total Assets		$	91	$	1	$	90	$	—
Natural gas purchase contracts	Deferred credits and other liabilities—regulatory and other	$	3	$	—	$	—	$	3
Interest rate swaps	Deferred credits and other liabilities—regulatory and other	6		—		6		—
Total Liabilities		$	9	$	—	$	6	$	3

The following presents changes in Level 3 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,
	2014			2013		2014			2013
	(in millions)
Derivative liabilities
Fair value, beginning of period	$	5		$	6	$	3		$	9
Total realized/unrealized losses (gains):
Included in earnings	5			—		9			1
Included in other comprehensive income	(1		)	—		(4		)	(4		)
Settlements	—			—		1			—
Fair value, end of period	$	9		$	6	$	9		$	6
Total losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to liabilities held at the end of the period	$	4		$	—	$	7		$	1

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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.

For natural gas purchases contracts and commodity derivatives, we utilize data obtained from third-party sources for the determination of fair value. The expected future cash flows arising from our swaps are discounted to present value. In addition, credit default swap rates or historical average credit default rates by credit rating are used to develop the adjustment for credit risk embedded in our positions. As these transactions are limited, we believe a Level 3 classification is appropriate.

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, 2014				December 31, 2013
	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)	13,625		15,226		13,668		14,701

__________

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

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

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 and is classified as Level 2.

The fair values of cash and cash equivalents, restricted cash, short-term investments, accounts receivable, note receivable-noncurrent, accounts payable 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 2014 and 2013 periods, there were no material adjustments to assets and liabilities measured at fair value on a nonrecurring basis.

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14. 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, the ownership of the NGL marketing operations in western Canada and processing 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, mostly around interest rate and commodity 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.

Other than interest rate swaps and commodity derivatives described below, we did not have any significant derivatives outstanding during the six months ended June 30, 2014.

Interest Rate Swaps

At June 30, 2014, we had “pay floating—receive fixed” interest rate swaps outstanding with a total notional principal amount of $1,617 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.

Information about our interest rate swaps that had netting or rights of offset arrangements are as follows:

	June 30, 2014						December 31, 2013
	Gross Amounts Presented in the Condensed Consolidated Balance Sheets		Amounts Not Offset in the Condensed Consolidated Balance Sheets		Net Amount		Gross Amounts Presented in the Condensed Consolidated Balance Sheets		Amounts Not Offset in the Condensed Consolidated Balance Sheets		Net Amount
Description	(in millions)
Assets	$	23	$	2	$	21	$	23	$	3	$	20
Liabilities	3		2		1		6		3		3

At June 30, 2014, we had interest rate swaps with another counterparty which were in a liability position of $2 million which could be terminated by the counterparty if one of our credit ratings falls below investment grade. In addition, we had one interest rate swap with a counterparty which was in a liability position of $1 million which could be terminated at any time.

Commodity Derivatives

Effective January 2014, we instituted a commodity price risk management program at Western Canada Transmission & Processing’s Empress NGL business and elected to not apply cash flow hedge accounting.

At June 30, 2014, we had commodity mark-to-market derivatives outstanding with a total notional amount of 129 million gallons. The longest dated commodity derivative contract we currently have expires in 2017.

Information about our commodity derivatives that had netting or rights of offset arrangements are as follows:

	June 30, 2014
	Gross  Amounts		Gross Amounts Offset		Net Amount Presented in the Condensed Consolidated Balance Sheets
Description	(in millions)
Assets	$	140	$	140	$	—
Liabilities	148		140		8

Substantially all of our commodity derivative agreements outstanding at June 30, 2014 have provisions that require collateral to be posted in the amount of the net liability position if one of our credit ratings falls below investment grade.

22

Information regarding the impacts of commodity derivatives on our Condensed Consolidated Statements of Operations are as follows:

		Periods Ended June 30, 2014
Derivatives	Condensed Consolidated Statement of Operations Caption	Three Months			Six Months
		(in millions)
Commodity derivatives	Sales of natural gas liquids	$	(4	)	$	(7	)

15. 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 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. We believe there are no matters outstanding that upon resolution will have a material effect on our consolidated results of operations, financial position or cash flows.

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 for legal matters recorded as of June 30, 2014 or December 31, 2013 related to litigation.

Other Commitments and Contingencies

See Note 16 for a discussion of guarantees and indemnifications.

16. 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 our 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, 2014 was approximately $406 million, which has been indemnified by Duke Energy as discussed above. One of these outstanding performance guarantees, which has a

23

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, 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, 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, 2014, the amounts recorded for the guarantees and indemnifications described above are not material, both individually and in the aggregate.

17. Issuances of SEP Units

During the first half of 2014, SEP issued 3.9 million common units to the public, representing limited partner interests, and 80,000 general partner units to Spectra Energy under its continuous offering program. Total net proceeds to SEP were $195 million (net proceeds to Spectra Energy were $191 million). In connection with the issuances of the units, a $47 million gain ($29 million net of tax) to Additional Paid-in Capital and a $144 million increase in Equity-Noncontrolling Interests were recorded in the first half of 2014. The issuances decreased Spectra Energy's ownership in SEP from 84% to 83% at June 30, 2014.

The following table presents the effects of the issuances of SEP units:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(in millions)
Net income-controlling interests	$	146	$	199	$	565	$	539
Increase in additional paid-in capital resulting from issuances of SEP units	19		38		29		38
Total net income-controlling interests and changes in equity-controlling interests	$	165	$	237	$	594	$	577

18. 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.

24

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 $10 million to our U.S. retirement plans in the six months ended June 30, 2014 and $11 million in the same period in 2013. We made total contributions to the Canadian DC and DB plans of $26 million in the six months ended June 30, 2014 and $46 million in the same period in 2013. We anticipate that we will make total contributions of approximately $22 million to the U.S. plans and approximately $40 million to the Canadian plans in 2014.

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
	(in millions)
U.S.
Service cost benefit earned	$	4		$	4		$	9		$	9
Interest cost on projected benefit obligation	6			6			12			11
Expected return on plan assets	(9		)	(8		)	(19		)	(16		)
Amortization of loss	3			5			6			10
Net periodic pension cost	$	4		$	7		$	8		$	14
Canada
Service cost benefit earned	$	8		$	8		$	15		$	16
Interest cost on projected benefit obligation	13			12			26			25
Expected return on plan assets	(18		)	(16		)	(35		)	(33		)
Amortization of loss	5			9			11			18
Amortization of prior service cost	1			1			1			1
Net periodic pension cost	$	9		$	14		$	18		$	27

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,
	2014			2013			2014			2013
	(in millions)
U.S.
Interest cost on accumulated post-retirement benefit obligation	$	2		$	2		$	4		$	4
Expected return on plan assets	(1		)	(1		)	(2		)	(2		)
Amortization of loss	—			1			—			1
Net periodic other post-retirement benefit cost	$	1		$	2		$	2		$	3
Canada
Service cost benefit earned	$	1		$	1		$	2		$	2
Interest cost on accumulated post-retirement benefit obligation	2			1			3			3
Net periodic other post-retirement benefit cost	$	3		$	2		$	5		$	5

25

Retirement/Savings Plan

In addition to the retirement plans described above, we also have defined contribution employee savings plans available to both U.S. and Canadian employees. Employees may participate in a matching contribution where we match a certain percentage of before-tax employee contributions of up to 6% of eligible pay per pay period for U.S. employees and up to 5% of eligible pay per pay period for Canadian employees. We expensed pre-tax employer matching contributions of $4 million in both the three-month periods ended June 30, 2014 and 2013 and $7 million in both the six-month periods ended June 30, 2014 and 2013 for U.S. employees. We expensed pre-tax employer matching contributions of $3 million in both the three-month periods ended June 30, 2014 and 2013 and $6 million in both the six-month periods ended June 30, 2014 and 2013 for Canadian employees.

19. 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 Statements of Operations

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Three Months Ended June 30, 2014
Total operating revenues	$	—		$	—		$	1,253		$	—		$	1,253
Total operating expenses	—			1			914			—			915
Operating income (loss)	—			(1		)	339			—			338
Equity in earnings of unconsolidated affiliates	—			—			85			—			85
Equity in earnings of consolidated subsidiaries	125			264			—			(389		)	—
Other income and expenses, net	(1		)	—			7			—			6
Interest expense	—			66			110			—			176
Earnings before income taxes	124			197			321			(389		)	253
Income tax expense (benefit)	(22		)	72			15			—			65
Net income	146			125			306			(389		)	188
Net income—noncontrolling interests	—			—			42			—			42
Net income—controlling interests	$	146		$	125		$	264		$	(389	)	$	146
Three Months Ended June 30, 2013
Total operating revenues	$	—		$	—		$	1,220		$	—		$	1,220
Total operating expenses	1			—			865			—			866
Operating income (loss)	(1		)	—			355			—			354
Equity in earnings of unconsolidated affiliates	—			—			72			—			72
Equity in earnings of consolidated subsidiaries	194			317			—			(511		)	—
Other income and expenses, net	(1		)	1			22			—			22
Interest expense	—			51			109			—			160
Earnings before income taxes	192			267			340			(511		)	288
Income tax expense (benefit)	(7		)	73			(4		)	—			62
Net income	199			194			344			(511		)	226
Net income—noncontrolling interests	—			—			27			—			27
Net income—controlling interests	$	199		$	194		$	317		$	(511	)	$	199

26

Spectra Energy Corp

Condensed Consolidating Statements of Operations

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Six Months Ended June 30, 2014
Total operating revenues	$	—		$	—		$	3,097	$	(1	)	$	3,096
Total operating expenses	4			1			2,115		(1		)	2,119
Operating income (loss)	(4		)	(1		)	982		—			977
Equity in earnings of unconsolidated affiliates	—			—			246		—			246
Equity in earnings of consolidated subsidiaries	540			899			—		(1,439		)	—
Other income and expenses, net	(2		)	1			16		—			15
Interest expense	—			131			223		—			354
Earnings before income taxes	534			768			1,021		(1,439		)	884
Income tax expense (benefit)	(31		)	228			32		—			229
Net income	565			540			989		(1,439		)	655
Net income—noncontrolling interests	—			—			90		—			90
Net income—controlling interests	$	565		$	540		$	899	$	(1,439	)	$	565
Six Months Ended June 30, 2013
Total operating revenues	$	—		$	—		$	2,810	$	(1	)	$	2,809
Total operating expenses	3			—			1,947		(1		)	1,949
Operating income (loss)	(3		)	—			863		—			860
Equity in earnings of unconsolidated affiliates	—			—			182		—			182
Equity in earnings of consolidated subsidiaries	531			826			—		(1,357		)	—
Other income and expenses, net	(3		)	4			54		—			55
Interest expense	—			99			210		—			309
Earnings before income taxes	525			731			889		(1,357		)	788
Income tax expense (benefit)	(14		)	200			6		—			192
Net income	539			531			883		(1,357		)	596
Net income—noncontrolling interests	—			—			57		—			57
Net income—controlling interests	$	539		$	531		$	826	$	(1,357	)	$	539

27

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, 2014
Net income	$	146	$	125	$	306		$	(389	)	$	188
Other comprehensive income	2		—		229			—			231
Total comprehensive income, net of tax	148		125		535			(389		)	419
Less: comprehensive income—noncontrolling interests	—		—		45			—			45
Comprehensive income—controlling interests	$	148	$	125	$	490		$	(389	)	$	374
Three Months Ended June 30, 2013
Net income	$	199	$	194	$	344		$	(511	)	$	226
Other comprehensive income (loss)	3		1		(244		)	—			(240		)
Total comprehensive income (loss), net of tax	202		195		100			(511		)	(14		)
Less: comprehensive income—noncontrolling interests	—		—		25			—			25
Comprehensive income (loss)—controlling interests	$	202	$	195	$	75		$	(511	)	$	(39	)

Six Months Ended June 30, 2014
Net income	$	565	$	540	$	989		$	(1,439	)	$	655
Other comprehensive income (loss)	4		—		(10		)	—			(6		)
Total comprehensive income, net of tax	569		540		979			(1,439		)	649
Less: comprehensive income—noncontrolling interests	—		—		89			—			89
Comprehensive income—controlling interests	$	569	$	540	$	890		$	(1,439	)	$	560
Six Months Ended June 30, 2013
Net income	$	539	$	531	$	883		$	(1,357	)	$	596
Other comprehensive income (loss)	7		1		(420		)	—			(412		)
Total comprehensive income, net of tax	546		532		463			(1,357		)	184
Less: comprehensive income—noncontrolling interests	—		—		52			—			52
Comprehensive income—controlling interests	$	546	$	532	$	411		$	(1,357	)	$	132

28

Spectra Energy Corp

Condensed Consolidating Balance Sheet

June 30, 2014

(Unaudited)

(In millions)

	Spectra Energy Corp		Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Cash and cash equivalents	$	—	$	2	$	298	$	—		$	300
Receivables—consolidated subsidiaries	20		—		9		(29		)	—
Receivables—other	1		—		1,221		—			1,222
Other current assets	15		11		657		—			683
Total current assets	36		13		2,185		(29		)	2,205
Investments in and loans to unconsolidated affiliates	—		—		2,803		—			2,803
Investments in consolidated subsidiaries	14,574		20,993		—		(35,567		)	—
Advances receivable—consolidated subsidiaries	—		4,417		755		(5,172		)	—
Notes receivable—consolidated subsidiaries	—		—		3,215		(3,215		)	—
Goodwill	—		—		4,841		—			4,841
Other assets	42		30		326		—			398
Property, plant and equipment, net	—		—		22,260		—			22,260
Regulatory assets and deferred debits	3		15		1,421		—			1,439
Total Assets	$	14,655	$	25,468	$	37,806	$	(43,983	)	$	33,946
Accounts payable—other	$	3	$	1	$	514	$	—		$	518
Accounts payable—consolidated subsidiaries	—		11		18		(29		)	—
Commercial paper	—		220		549		—			769
Short-term borrowings—consolidated subsidiaries	—		415		—		(415		)	—
Taxes accrued	2		—		101		—			103
Current maturities of long-term debt	—		408		88		—			496
Other current liabilities	64		75		1,131		—			1,270
Total current liabilities	69		1,130		2,401		(444		)	3,156
Long-term debt	—		2,899		10,242		—			13,141
Advances payable—consolidated subsidiaries	5,172		—		—		(5,172		)	—
Notes payable—consolidated subsidiaries	—		2,800		—		(2,800		)	—
Deferred credits and other liabilities	762		4,065		1,819		—			6,646
Preferred stock of subsidiaries	—		—		258		—			258
Equity
Controlling interests	8,652		14,574		20,993		(35,567		)	8,652
Noncontrolling interests	—		—		2,093		—			2,093
Total equity	8,652		14,574		23,086		(35,567		)	10,745
Total Liabilities and Equity	$	14,655	$	25,468	$	37,806	$	(43,983	)	$	33,946

29

Spectra Energy Corp

Condensed Consolidating Balance Sheet

December 31, 2013

(Unaudited)

(In millions)

	Spectra Energy Corp		Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Cash and cash equivalents	$	—	$	12	$	189	$	—		$	201
Receivables—consolidated subsidiaries	176		394		—		(570		)	—
Receivables—other	1		—		1,335		—			1,336
Other current assets	40		15		489		—			544
Total current assets	217		421		2,013		(570		)	2,081
Investments in and loans to unconsolidated affiliates	—		—		3,043		—			3,043
Investments in consolidated subsidiaries	13,244		19,403		—		(32,647		)	—
Advances receivable—consolidated subsidiaries	—		4,038		677		(4,715		)	—
Notes receivable—consolidated subsidiaries	—		—		3,215		(3,215		)	—
Goodwill	—		—		4,810		—			4,810
Other assets	39		30		316		—			385
Property, plant and equipment, net	—		—		21,829		—			21,829
Regulatory assets and deferred debits	3		17		1,365		—			1,385
Total Assets	$	13,503	$	23,909	$	37,268	$	(41,147	)	$	33,533
Accounts payable—other	$	4	$	—	$	436	$	—		$	440
Accounts payable—consolidated subsidiaries	89		—		481		(570		)	—
Commercial paper	—		344		688		—			1,032
Short-term borrowings—consolidated subsidiaries	—		415		—		(415		)	—
Taxes accrued	4		—		68		—			72
Current maturities of long-term debt	—		557		640		—			1,197
Other current liabilities	81		75		1,142		—			1,298
Total current liabilities	178		1,391		3,455		(985		)	4,039
Long-term debt	—		2,605		9,883		—			12,488
Advances payable—consolidated subsidiaries	4,715		—		—		(4,715		)	—
Notes payable—consolidated subsidiaries	—		2,800		—		(2,800		)	—
Deferred credits and other liabilities	116		3,869		2,440		—			6,425
Preferred stock of subsidiaries	—		—		258		—			258
Equity
Controlling interests	8,494		13,244		19,403		(32,647		)	8,494
Noncontrolling interests	—		—		1,829		—			1,829
Total equity	8,494		13,244		21,232		(32,647		)	10,323
Total Liabilities and Equity	$	13,503	$	23,909	$	37,268	$	(41,147	)	$	33,533

30

Spectra Energy Corp

Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2014

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	565		$	540		$	989		$	(1,439	)	$	655
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	—			—			405			—			405
Equity in earnings of unconsolidated affiliates	—			—			(246		)	—			(246		)
Equity in earnings of consolidated subsidiaries	(540		)	(899		)	—			1,439			—
Distributions received from unconsolidated affiliates	—			—			199			—			199
Other	(36		)	229			3			—			196
Net cash provided by (used in) operating activities	(11		)	(130		)	1,350			—			1,209
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	—			—			(833		)	—			(833		)
Investments in and loans to unconsolidated affiliates	—			—			(30		)	—			(30		)
Purchases of held-to-maturity securities	—			—			(437		)	—			(437		)
Proceeds from sales and maturities of held-to-maturity securities	—			—			453			—			453
Purchases of available-for-sale securities	—			—			(13		)	—			(13		)
Proceeds from sales and maturities of available-for-sale securities	—			—			7			—			7
Distributions received from unconsolidated affiliates	—			—			242			—			242
Advances from affiliates	85			91			—			(176		)	—
Other changes in restricted funds	—			—			(1		)	—			(1		)
Net cash provided by (used in) investing activities	85			91			(612		)	(176		)	(612		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	—			300			412			—			712
Payments for the redemption of long-term debt	—			(148		)	(588		)	—			(736		)
Net decrease in commercial paper	—			(124		)	(132		)	—			(256		)
Distributions to noncontrolling interests	—			—			(81		)	—			(81		)
Contributions from noncontrolling interests	—			—			112			—			112
Dividends paid on common stock	(453		)	—			—			—			(453		)
Proceeds from the issuance of SEP common units	—			—			191			—			191
Distributions and advances from (to) affiliates	366			1			(543		)	176			—
Other	13			—			(1		)	—			12
Net cash provided by (used in) financing activities	(74		)	29			(630		)	176			(499		)
Effect of exchange rate changes on cash	—			—			1			—			1
Net increase (decrease) in cash and cash equivalents	—			(10		)	109			—			99
Cash and cash equivalents at beginning of period	—			12			189			—			201
Cash and cash equivalents at end of period	$	—		$	2		$	298		$	—		$	300

31

Spectra Energy Corp

Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2013

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	539		$	531		$	883		$	(1,357	)	$	596
Adjustments to reconcile net income to net cashprovided by operating activities:
Depreciation and amortization	—			—			388			—			388
Equity in earnings of unconsolidated affiliates	—			—			(182		)	—			(182		)
Equity in earnings of consolidated subsidiaries	(531		)	(826		)	—			1,357			—
Distributions received from unconsolidated affiliates	—			—			147			—			147
Other	(7		)	335			(77		)	—			251
Net cash provided by operating activities	1			40			1,159			—			1,200
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	—			—			(959		)	—			(959		)
Investments in and loans to unconsolidated affiliates	—			—			(168		)	—			(168		)
Acquisitions, net of cash acquired	—			—			(1,254		)	—			(1,254		)
Purchases of held-to-maturity securities	—			—			(456		)	—			(456		)
Proceeds from sales and maturities of held-to-maturity securities	—			—			463			—			463
Purchases of available-for-securities	—			—			(2,899		)	—			(2,899		)
Proceeds from sales and maturities of available-for-sale securities	—			—			2,722			—			2,722
Distributions received from unconsolidated affiliates	—			—			13			—			13
Advances from (to) affiliates	156			(589		)	—			433			—
Other changes in restricted funds	—			—			1			—			1
Other	—			—			2			—			2
Net cash provided by (used in) investing activities	156			(589		)	(2,535		)	433			(2,535		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	—			1,848			—			—			1,848
Payments for the redemption of long-term debt	—			(495		)	(51		)	—			(546		)
Net increase (decrease) in commercial paper	—			615			(175		)	—			440
Net decrease in short-term borrowings—consolidated subsidiaries	—			(9		)	—			9			—
Distributions to noncontrolling interests	—			—			(69		)	—			(69		)
Dividends paid on common stock	(412		)	—			—			—			(412		)
Proceeds from the issuance of SEP common units	—			—			190			—			190
Distributions and advances from (to) affiliates	240			(1,405		)	1,607			(442		)	—
Other	15			(6		)	1			—			10
Net cash provided by (used in) financing activities	(157		)	548			1,503			(433		)	1,461
Effect of exchange rate changes on cash	—			—			(3		)	—			(3		)
Net increase (decrease) in cash and cash equivalents	—			(1		)	124			—			123
Cash and cash equivalents at beginning of period	—			3			91			—			94
Cash and cash equivalents at end of period	$	—		$	2		$	215		$	—		$	217

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20. New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” which supersedes the revenue recognition requirements of “Revenue Recognition (Topic 605)” and clarifies the principles of recognizing revenue. This ASU is effective for us January 1, 2017 and is to be applied retrospectively. We are currently evaluating this ASU and its potential impact on us.

In April 2014, the FASB issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." This ASU revises the definition of discontinued operations by limiting discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have or will have a major effect on an entity’s operations and financial results, removing the lack of continuing involvement criteria and requiring discontinued operations reporting for the disposal of an equity method investment that meets the definition of discontinued operations. The update also requires expanded disclosures for discontinued operations, and disclosure of pretax profit or loss of certain individually significant components of an entity that do not qualify for discontinued operations reporting. This ASU is effective for us on January 1, 2015 and is to be applied prospectively. We do not expect the adoption of the provisions of this ASU to have any impact on our consolidated results of operations, financial position or cash flows.

In 2013, the FASB issued ASU 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a Consensus of the FASB Emerging Issues Task Force),” which was issued to eliminate diversity in practice. This ASU requires entities to net unrecognized tax benefits against all same-jurisdiction net operating losses or tax credit carryforwards that would be used to settle the position with a tax authority. We adopted this standard on January 1, 2014. The adoption of this ASU did not have a material impact on our consolidated results of operations, financial position or cash flows.

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

INTRODUCTION

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

In November 2013, Spectra Energy completed the U.S. Assets Dropdown to SEP. As a result of this transaction, we realigned our reportable segments structure. Amounts presented herein for 2013 segment information have been recast to conform to our current segment reporting presentation. There were no changes to consolidated data as a result of the recast of our segment information.

Executive Overview

For the three months ended June 30, 2014 and 2013, we reported net income from controlling interests of $146 million and $199 million, respectively. For the six months ended June 30, 2014 and 2013, we reported net income from controlling interests of $565 million and $539 million, respectively.

The highlights for the three months and six months ended June 30, 2014 include the following:

• Spectra Energy Partners’ earnings for the three-month period benefited mainly from expansion projects at Texas Eastern Transmission, LP (Texas Eastern), higher transportation revenues at Express-Platte as a result of increased tariff rates and higher contracted volumes, and higher earnings from DCP Sand Hills Pipeline, LLC (Sand Hills) and DCP Southern Hills Pipeline, LLC (Southern Hills), which were placed into service in June 2013. For the six-month period, the increased earnings were driven by expansion projects at Texas Eastern, the acquisition of Express-Platte in March 2013, higher natural gas transportation revenues as a result of colder weather and higher earnings from Sand Hills and Southern Hills.

• Distribution’s earnings for the three-month period decreased slightly mainly due to lower transportation and storage revenues and a weaker Canadian dollar, mostly offset by lower operating fuel costs and pension expense. For the six-month period, the increase in earnings was mainly due to higher customer usage as a result of colder weather, and a favorable decision by the OEB in 2014 primarily regarding certain 2012 revenues realized from the optimization of upstream transportation contracts being treated as utility earnings, mostly offset by a weaker Canadian dollar.

• Western Canada Transmission & Processing’s earnings for the three-month period decreased due mainly to two planned major facility turnarounds in 2014 compared to one in 2013, which drove higher operating and maintenance costs as

33

well as reduced revenues from the plants, and a weaker Canadian dollar. The increase in earnings for the six-month period reflected higher earnings from the Empress NGL business due primarily to higher propane prices and higher transmission revenues as a result of higher interim tolls, mostly offset by higher operating and maintenance costs, and a weaker Canadian dollar.

• Field Services’ earnings for the three-month and the six-month periods increased largely due to higher gathering and processing volumes from new assets, stronger commodity prices and the effects of hedges at DCP Partners, partially offset by higher operating costs as a result of increased spending on reliability programs, including turnarounds, as well as growth in Field Services’ operations, and higher interest expense.

In the first six months of 2014, we had $863 million of capital and investment expenditures, excluding reimbursements from noncontrolling interests of $20 million. We currently project $2.1 billion of capital and investment expenditures for the full year, including expansion and investment capital expenditures of $1.3 billion.

We are committed to an investment-grade balance sheet and continued prudent financial management of our capital 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 issuances of debt and/or equity securities. As of June 30, 2014, our revolving credit facilities included Spectra Capital’s $1.0 billion facility, SEP’s $2.0 billion facility, Westcoast’s 300 million Canadian dollar facility and Union Gas’ 400 million Canadian dollar facility. These facilities are used principally as back-stops for commercial paper programs.

RESULTS OF OPERATIONS

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(in millions)
Operating revenues	$	1,253	$	1,220	$	3,096	$	2,809
Operating expenses	915		866		2,119		1,949
Operating income	338		354		977		860
Other income and expenses	91		94		261		237
Interest expense	176		160		354		309
Earnings before income taxes	253		288		884		788
Income tax expense	65		62		229		192
Net income	188		226		655		596
Net income—noncontrolling interests	42		27		90		57
Net income—controlling interests	$	146	$	199	$	565	$	539

Three Months Ended June 30, 2014 Compared to Same Periods in 2013

Operating Revenues. The $33 million, or 3%, increase was driven by:

• revenues from expansion projects primarily from Texas Eastern at Spectra Energy Partners, and

• higher natural gas prices passed through to customers and higher customer usage of natural gas due to a variance in estimated gas consumption in the first quarter of 2014, net of lower transportation revenue primarily due to a settlement received from the termination of a transportation contract in 2013 and lower short-term transportation revenues at Distribution, partially offset by

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

Operating Expenses. The $49 million, or 6%, increase was driven by:

• increased volumes of natural gas purchases for extraction and make-up at the Empress operations, and higher plant turnaround and maintenance costs at Western Canada Transmission & Processing,

• expansion projects primarily from Texas Eastern at Spectra Energy Partners, and

• increased natural gas prices passed through to customers and higher volumes of natural gas sold primarily due to a variance in estimated gas consumption in the first quarter of 2014, net of lower operating fuel costs and the deferral of pension expense approved by the OEB for recovery from customers at Distribution, partially offset by

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

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Operating Income. The $16 million, or 5%, decrease was due mainly to two planned major facility turnarounds in 2014 compared to one in 2013, which drove higher operating and maintenance costs as well as reduced revenues from the plants at Western Canada Transmission & Processing, and a weaker Canadian dollar, partially offset by higher earnings from expansion projects at Texas Eastern and higher transportation revenues from Express-Platte as a result of increased tariff rates and higher contracted volumes at Spectra Energy Partners.

Other Income and Expenses. The $3 million, or 3%, decrease was due to lower allowance for funds used during construction (AFUDC) as a result of decreased capital spending on expansion projects at Spectra Energy Partners, partially offset by higher equity earnings from Field Services mainly due to the change in net income and related noncontrolling interest effects of dropdown hedges at DCP Partners where DCP Midstream acts as a counterparty in the second quarter of 2014 compared to the second quarter of 2013, higher gathering and processing volumes as a result of asset growth and stronger commodity prices, net of higher operating costs due to increased spending on reliability programs, including turnarounds, as well as growth in Field Services’ operations, and higher interest expense. The decrease was also partially offset by higher earnings from Sand Hills and Southern Hills which were placed into service in the second quarter of 2013.

Interest Expense. The $16 million, or 10%, increase was mainly due to lower capitalized interest from projects placed in service in 2013 and higher debt balances attributable to third-quarter 2013 debt issued by SEP primarily related to the U.S. Assets Dropdown, partially offset by a weaker Canadian dollar.

Income Tax Expense. The $3 millionincrease was primarily attributable to the reversal of tax reserves in the 2013 period as a result of favorable Canadian federal income tax legislation enacted in the second quarter of 2013, mostly offset by lower Canadian earnings in 2014.

The effective tax rate for income for the three-month periods ended June 30, 2014 and 2013 was 26% and 22%, respectively. The lower effective tax rate in 2013 was primarily due to the reversal of tax reserves in the second quarter of 2013.

Net Income—Noncontrolling Interests. The $15 millionincrease was driven by higher earnings from Spectra Energy Partners, partially offset by the effects of a decrease in the average ownership percentage of SEP held by the public, primarily as a result of the issuance of SEP partnership units to Spectra Energy in November 2013 in association with the U.S. Assets Dropdown.

Six Months Ended June 30, 2014 Compared to Same Periods in 2013

Operating Revenues. The $287 million, or 10%, increase was driven by:

• revenues from expansion projects primarily from Texas Eastern, the acquisition of Express-Platte in March 2013 and higher natural gas transportation revenues due to colder weather at Spectra Energy Partners,

• higher NGL sales prices and higher sales volumes of residual natural gas at the Empress operations, an increase in gathering and processing revenues from new facilities in unconventional development areas, higher transmission revenues as a result of higher interim tolls and higher interruptible transmission revenue from a new supply source connected to the M&N Canada system at Western Canada Transmission & Processing, and

• higher customer usage of natural gas as a result of colder weather, growth in the number of customers and a favorable decision by the OEB in 2014 primarily regarding certain 2012 revenues realized from the optimization of upstream transportation contracts being treated as utility earnings, net of lower 2014 distribution rates approved by the OEB and lower transportation revenue due to a settlement received from the termination of a transportation contract in 2013 at Distribution, partially offset by

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

Operating Expenses. The $170 million, or 9%, increase was driven by:

• increased volumes of natural gas purchases for extraction and make-up at the Empress operations, higher plant turnaround and maintenance costs, increased costs passed through to customers from M&N Canada and higher cost of NGL purchases at the Empress operations at Western Canada Transmission & Processing,

• increased volumes of natural gas sold due to colder weather, growth in the number of customers, net of the deferral of pension expense approved by the OEB for recovery from customers at Distribution, and

• the acquisition of Express-Platte and expansion projects primarily from Texas Eastern at Spectra Energy Partners, partially offset by

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

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Operating Income. The$117 million, or 14%, increase was driven by higher earnings from expansion projects at Texas Eastern and the acquisition of Express-Platte at Spectra Energy Partners, higher customer usage due to colder weather and a favorable decision by the OEB in 2014 primarily regarding certain 2012 revenues realized from the optimization of upstream transportation contracts being treated as utility earnings at Distribution and higher earnings at the Empress NGL business due primarily to higher propane prices, net of higher turnaround and maintenance costs at Western Canada Transmission & Processing, partially offset by effects of a weaker Canadian dollar at Distribution and Western Canada Transmission & Processing.

Other Income and Expenses. The $24 million, or 10%, increase was attributable to higher equity earnings from Field Services mainly due to higher commodity prices, higher gathering and processing volumes as a result of asset growth and the change in net income and related noncontrolling interest effects of dropdown hedges at DCP Partners in the second quarter of 2014 compared to the second quarter of 2013, net of higher operating costs due to increased spending on reliability programs, including turnarounds, as well as growth in Field Services’ operations, and higher interest expense. The increase was partially offset by lower AFUDC due to decreased capital spending on expansion projects, net of higher earnings from Sand Hills and Southern Hills, at Spectra Energy Partners and lower AFUDC due to decreased capital spending on expansion projects at Western Canada Transmission & Processing.

Interest Expense. The $45 million, or 15%, increase was mainly due to higher debt balances attributable to third-quarter 2013 debt issued by SEP related to the U.S. Assets Dropdown, lower capitalized interest from projects placed in service in 2013 and a weaker Canadian dollar.

Income Tax Expense. The $37 millionincrease was primarily attributable to the reversal of tax reserves in the 2013 period as a result of favorable Canadian federal income tax legislation enacted in the second quarter of 2013 and higher earnings in 2014.

The effective tax rate for income for the six months ended June 30, 2014 and 2013 was 26% and 24%, respectively. The lower effective tax rates in 2013 were primarily due to the reversal of tax reserves in the 2013 period.

Net Income—Noncontrolling Interests. The $33 millionincrease was driven by higher earnings from Spectra Energy Partners, partially offset by the effects of a decrease in the average ownership percentage of SEP held by the public, primarily as a result of the issuance of SEP partnership units to Spectra Energy in November 2013 in association with the U.S. Assets Dropdown.

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

Segment Results

Management evaluates segment performance based on EBITDA. Cash, cash equivalents and short-term investments are managed at the parent-company levels, so the gains and losses from foreign currency transactions and interest and dividend income are excluded from the segments’ EBITDA. We consider segment EBITDA to be a good indicator of each segment’s operating performance from its continuing operations, as it represents the results of our operations without regard to financing methods or capital structures. Our segment EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate EBITDA in the same manner.

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Segment EBITDA is summarized in the following table. Detailed discussions follow.

EBITDA by Business Segment

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
	(in millions)
Spectra Energy Partners	$	374		$	358		$	803		$	705
Distribution	112			115			338			335
Western Canada Transmission & Processing	111			157			348			347
Field Services	54			46			184			134
Total reportable segment EBITDA	651			676			1,673			1,521
Other	(24		)	(29		)	(41		)	(43		)
Total reportable segment and other EBITDA	627			647			1,632			1,478
Depreciation and amortization	199			196			399			382
Interest expense	176			160			354			309
Interest income and other	1			(3		)	5			1
Earnings before income taxes	$	253		$	288		$	884		$	788

The amounts discussed below include intercompany transactions that are eliminated in the Condensed Consolidated Financial Statements.

Spectra Energy Partners

	Three Months Ended June 30,							Six Months Ended June 30,
	2014		2013		Increase (Decrease)			2014		2013		Increase (Decrease)
	(in millions, except where noted)
Operating revenues	$	531	$	492	$	39		$	1,112	$	951	$	161
Operating expenses
Operating, maintenance and other	193		183		10			378		333		45
Other income and expenses	36		49		(13		)	69		87		(18		)
EBITDA	$	374	$	358	$	16		$	803	$	705	$	98
Express pipeline receipts, MBbl/d (a,b)	170		202		(32		)	182		203		(21		)
Platte PADD II deliveries, MBbl/d (b)	176		165		11			171		165		6

___________

(a) Thousand barrels per day.

(b) 2013 data includes only activity since March 14, 2013, the date of the acquisition of Express-Platte.

Three Months Ended June 30, 2014 Compared to Same Period in 2013

Operating Revenues. The $39 millionincrease was driven by:

• a $43 million increase due to expansion projects, primarily at Texas Eastern,

• an $8 million increase due to higher natural gas transportation revenues mainly at Texas Eastern and East Tennessee Natural Gas, LLC, and

• a $4 million increase in transportation revenues on Express-Platte system as a result of increased tariff rates and higher contracted volumes, partially offset by

• an $8 million decrease due to lower processing revenues, and

• a $7 million decrease in storage firm revenues due to lower contract renewal rates.

Operating, Maintenance and Other. The $10 millionincrease was mainly driven by an increase from expansion projects, primarily at Texas Eastern.

37

Other Income and Expenses. The $13 milliondecrease was primarily due to lower AFUDC resulting from decreased capital spending on expansion projects, partially offset by higher earnings from Sand Hills and Southern Hills which were placed into service in the second quarter of 2013.

EBITDA. The $16 millionincrease was driven by expansions, primarily at Texas Eastern, higher earnings from Sand Hills and Southern Hills, and higher Express-Platte revenues, partially offset by lower processing revenues.

Six Months Ended June 30, 2014 Compared to Same Period in 2013

Operating Revenues. The $161 millionincrease was driven by:

• an $85 million increase due to expansion projects, primarily at Texas Eastern,

• a $68 million increase primarily due to the acquisition of Express-Platte in March 2013, and

• a $26 million increase due to higher natural gas transportation revenues from higher demand, primarily as a result of colder weather, and

• a $4 million increase in natural gas transportation revenues on the Express-Platte system as a result of increased tariff rates and higher contracted volumes, partially offset by

• a $12 million decrease in storage revenues due to lower contract renewal rates, and

• a $7 million decrease due to lower processing revenues.

Operating, Maintenance and Other. The $45 millionincrease was driven by:

•a $25 million increase due to the acquisition of Express-Platte, and

•a $23 million increase from expansion projects, primarily at Texas Eastern.

Other Income and Expenses. The $18 milliondecrease was mainly due to lower AFUDC resulting from decreased capital spending on expansion projects, partially offset by higher earnings from Sand Hills and Southern Hills.

EBITDA. The $98 millionincrease was driven by expansions, primarily at Texas Eastern, the acquisition of Express-Platte, and higher earnings from Sand Hills and Southern Hills.

Distribution

	Three Months Ended June 30,								Six Months Ended June 30,
	2014		2013			Increase (Decrease)			2014			2013		Increase (Decrease)
	(in millions, except where noted)
Operating revenues	$	360	$	352		$	8		$	1,078		$	1,051	$	27
Operating expenses
Natural gas purchased	152		128			24			540			497		43
Operating, maintenance and other	96		108			(12		)	199			219		(20		)
Other income and expenses	—		(1		)	1			(1		)	—		(1		)
EBITDA	$	112	$	115		$	(3	)	$	338		$	335	$	3
Number of customers, thousands									1,405			1,386		19
Heating degree days, Fahrenheit	979		963			16			5,230			4,488		742
Pipeline throughput, TBtu (a)	121		195			(74		)	415			509		(94		)
Canadian dollar exchange rate, average	1.09		1.02			0.07			1.10			1.02		0.08

___________

(a) Trillion British thermal units.

Three Months Ended June 30, 2014 Compared to Same Period in 2013

Operating Revenues. The $8 millionincrease was driven by:

• a $29 million increase from higher 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,

• an $11 million increase in customer usage of natural gas primarily due to a variance in estimated gas consumption in the first quarter of 2014, and

38

• a $6 million increase from growth in the number of customers, partially offset by

• a $24 million decrease resulting from a weaker Canadian dollar,

• a $9 million decrease in transportation revenue mainly due to a settlement received from the termination of a transportation contract in the second quarter of 2013 and lower short-term transportation revenues, and

• a $4 million decrease in storage revenue primarily due to lower storage prices.

Natural Gas Purchased. The $24 millionincrease was driven by:

• a $29 million increase from higher natural gas prices passed through to customers,

• a $10 million increase due to higher volumes of natural gas sold primarily due to a variance in estimated gas consumption in the first quarter of 2014, and

• a $4 million increase from growth in the number of customers, partially offset by

• an $11 million decrease resulting from a weaker Canadian dollar, and

• an $11 million decrease in operating fuel costs primarily due to gas measurement variances.

Operating, Maintenance and Other. The $12 milliondecrease was driven by:

• a $7 million decrease resulting from the deferral of pension expense approved by the OEB in 2014 for recovery from customers, and

• a $5 million decrease resulting from a weaker Canadian dollar.

EBITDA. The $3 milliondecrease was largely the result of lower transportation and storage revenues and a weaker Canadian dollar, mostly offset by lower operating fuel costs and pension expense.

Six Months Ended June 30, 2014 Compared to Same Period in 2013

Operating Revenues. The $27 millionincrease was driven by:

• a $106 million increase in customer usage of natural gas primarily due to weather that was more than 16% colder than in 2013,

• a $21 million increase from growth in the number of customers,

• a $10 million increase, net of earnings sharing, as a result of a decision by the OEB in March 2014 primarily regarding certain 2012 revenues realized from the optimization of upstream transportation contracts being treated as utility earnings, and

• a $7 million increase in industrial market usage, partially offset by

• a $92 million decrease resulting from a weaker Canadian dollar,

• a $9 million decrease primarily due to lower 2014 distribution rates approved by the OEB,

• a $7 million decrease in transportation revenue primarily due to a settlement received from the termination of a transportation contract in the second quarter of 2013,

• a $5 million decrease in storage revenue primarily due to lower storage prices, and

• a $5 million decrease due to 2014 earnings to be shared with customers in accordance with the new incentive regulation framework.

Natural Gas Purchased. The $43 millionincrease was driven by:

• a $76 million increase due to higher volumes of natural gas sold primarily due to colder weather,

• a $17 million increase from growth in the number of customers, and

• a $4 million increase in industrial market usage, partially offset by

• a $48 million decrease resulting from a weaker Canadian dollar, and

• a $4 million decrease in operating fuel costs primarily due to gas measurement variances.

Operating, Maintenance and Other. The $20 milliondecrease was driven by:

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

• a $7 million decrease resulting from the deferral of pension expense approved by the OEB in 2014 for recovery from customers.

39

EBITDA. The $3 millionincrease was largely the result of higher customer usage due to colder weather, the impact of a decision by the OEB in March 2014 primarily regarding certain 2012 revenues realized from the optimization of upstream transportation contracts being treated as utility earnings and lower pension expense, mostly offset by a weaker Canadian dollar, lower 2014 distribution rates approved by the OEB and lower transportation revenues.

Western Canada Transmission & Processing

	Three Months Ended June 30,							Six Months Ended June 30,
	2014		2013		Increase (Decrease)			2014		2013		Increase (Decrease)
	(in millions, except where noted)
Operating revenues	$	391	$	391	$	—		$	966	$	834	$	132
Operating expenses
Natural gas and petroleum products purchased	91		59		32			265		170		95
Operating, maintenance and other	189		175		14			354		326		28
Other income and expenses	—		—		—			1		9		(8		)
EBITDA	$	111	$	157	$	(46	)	$	348	$	347	$	1
Pipeline throughput, TBtu	224		170		54			466		373		93
Volumes processed, TBtu	175		157		18			352		332		20
Canadian dollar exchange rate, average	1.09		1.02		0.07			1.10		1.02		0.08

Three Months Ended June 30, 2014 Compared to Same Period in 2013

Operating Revenues. Significant drivers include:

• a $41 million increase due primarily to higher sales volumes of residual natural gas at the Empress operations,

• a $7 million increase due to higher sales prices associated with the Empress NGL business, and

• a $5 million increase in gathering and processing revenues due in part to new facilities at Horn River and Montney unconventional development areas, offset by

• a $26 million decrease in NGL sales volumes at Empress, and

• a $26 million decrease as a result of a weaker Canadian dollar.

Natural Gas and Petroleum Products Purchased. The $32 millionincrease was driven by:

• a $34 million increase due primarily to higher volumes of natural gas purchases for extraction and make-up at Empress, and

• a $4 million increase primarily as a result of higher costs of NGL purchases at the Empress facility, partially offset by

• a $6 million decrease as a result of a weaker Canadian dollar.

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

• a $16 million increase in plant turnaround costs, and

• an $8 million increase in maintenance costs, partially offset by

• a $13 million decrease as a result of a weaker Canadian dollar.

EBITDA. The $46 milliondecrease was due mainly to two planned major facility turnarounds in 2014 compared to one in 2013, which drove higher operating and maintenance costs as well as reduced revenues from the plants. The segment’s results also reflect the effect of a weaker Canadian dollar.

Six Months Ended June 30, 2014 Compared to Same Period in 2013

Operating Revenues. The $132 millionincrease was driven by:

• an $89 million increase due primarily to higher sales volumes of residual natural gas at the Empress operations,

• a $79 million increase due mostly to higher propane prices associated with the Empress NGL business,

• a $17 million increase in gathering and processing revenues from new facilities at Horn River and Montney unconventional development areas,

• a $13 million increase in transmission revenues due primarily to higher interim tolls at BC Pipeline,

40

• a $13 million increase primarily in interruptible transmission revenues due to a new supply source connected to the M&N Canada system, and

• a $5 million increase in carbon and other non-income tax expense recovered from customers, partially offset by

• an $80 million decrease as a result of a weaker Canadian dollar.

Natural Gas and Petroleum Products Purchased. The $95 millionincrease was driven by:

• a $107 million increase due primarily to higher volumes of natural gas purchases for extraction and make-up at Empress, and

• an $8 million increase primarily as a result of higher costs of NGL purchases at the Empress facility, partially offset by

• a $22 million decrease as a result of a weaker Canadian dollar.

Operating, Maintenance and Other. The $28 millionincrease was driven by:

• a $16 million increase in plant turnaround costs,

• a $12 million increase in maintenance costs,

• a $12 million increase primarily in costs passed through to customers at M&N Canada,

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

• a $4 million increase in Empress plant fuel costs due primarily to higher prices, and

• a $4 million increase in operating costs for new facilities, partially offset by

• a $28 million decrease as a result of a weaker Canadian dollar.

Other Income and Expenses. The $8 milliondecrease was driven primarily by lower AFUDC resulting from decreased capital spending on expansion projects.

EBITDA. The $1 millionincrease was driven by higher earnings at the Empress NGL business due primarily to higher propane prices, higher transmission revenues due to higher interim tolls and gathering and processing earnings from expansion, mostly offset by higher operating and maintenance costs and the effect of a weaker Canadian dollar.

Field Services

	Three Months Ended June 30,						Six Months Ended June 30,
	2014		2013		Increase (Decrease)		2014		2013		Increase (Decrease)
	(in millions, except where noted)
Equity in earnings of unconsolidated affiliates	$	54	$	46	$	8	$	184	$	134	$	50
EBITDA	$	54	$	46	$	8	$	184	$	134	$	50
Natural gas gathered and processed/transported, TBtu/d (a,b)	7.3		7.1		0.2		7.2		7.0		0.2
NGL production, MBbl/d (a)	452		412		40		449		404		45
Average natural gas price per MMBtu (c,d)	$	4.67	$	4.09	$	0.58	$	4.80	$	3.71	$	1.09
Average NGL price per gallon (e)	$	0.93	$	0.82	$	0.11	$	1.00	$	0.86	$	0.14
Average crude oil price per barrel (f)	$	102.99	$	94.22	$	8.77	$	100.84	$	94.44	$	6.40

___________

(a) Reflects 100% of volumes.

(b) Trillion British thermal units per day.

(c) Average price based on NYMEX Henry Hub.

(d) Million British thermal units.

(e) Does not reflect results of commodity hedges. The 2013 NGL price per gallon has been revised to reflect the impact of ethane rejection.

(f) Average price based on NYMEX calendar month.

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Three Months Ended June 30, 2014 Compared to Same Period in 2013

EBITDA.Higher equity earnings of $8 million were mainly the result of the following variances, each representing our 50% ownership portion of the earnings drivers at DCP Midstream:

• a $31 million increase primarily attributable to decreased net income attributable to noncontrolling interests as a result of DCP Partners’ losses on dropdown hedges where DCP Midstream acts as counterparty,

• a $14 million increase in gathering and processing margins mainly due to higher volumes as a result of asset growth, and

• a $5 million increase from commodity-sensitive processing arrangements due to higher NGL, natural gas and crude oil prices, partially offset by

• a $25 million decrease primarily attributable to higher operating costs as a result of increased spending on reliability programs, including turnarounds, as well as growth in Field Services’ operations,

• a $9 million decrease mainly attributable to higher interest expense due to higher interest rates from new debt and lower capitalized interest due to certain projects which were placed in service in 2013,

• a $6 million decrease attributable to DCP Partners’ third-party mark-to-market activity and unfavorable results from gas marketing, partially offset by favorable results from NGL trading, and

• a $5 million decrease primarily attributable to higher depreciation expense as a result of growth.

Six Months Ended June 30, 2014 Compared to Same Period in 2013

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

• a $44 million increase from commodity-sensitive processing arrangements due to higher NGL, natural gas and crude oil prices,

• a $26 million increase in gathering and processing margins mainly due to higher volumes as a result of asset growth,

• a $26 million increase attributable to decreased net income attributable to noncontrolling interests as a result of DCP Partners’ losses on dropdown hedges, partially offset by growth from dropdowns,

• a $16 million increase attributable to favorable results from NGL and gas trading and marketing, partially offset by DCP Partners’ third-party mark-to-market activity, and

• a $7 million increase in gains associated with the issuance of partnership units by DCP Partners in 2014 compared to 2013, partially offset by

• a $32 million decrease primarily attributable to higher operating costs as a result of increased spending on reliability programs, including turnarounds, as well as growth in Field Services’ operations,

• a $24 million decrease mainly attributable to higher interest expense due to higher interest rates from newly issued debt and lower capitalized interest due to certain projects which were placed in service in 2013, and

• a $13 million decrease primarily attributable to higher depreciation expense as a result of growth.

Other

	Three Months Ended June 30,									Six Months Ended June 30,
	2014			2013			Increase (Decrease)			2014			2013			Increase (Decrease)
	(in millions)
Operating revenues	$	19		$	18		$	1		$	37		$	36		$	1
Operating expenses
Operating, maintenance and other	43			49			(6		)	81			85			(4		)
Other income and expenses	—			2			(2		)	3			6			(3		)
EBITDA	$	(24	)	$	(29	)	$	5		$	(41	)	$	(43	)	$	2

Three Months Ended June 30, 2014 Compared to Same Period in 2013

EBITDA. The $5 millionincrease was driven by mark-to-market adjustments on performance cash awards.

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Six Months Ended June 30, 2014 Compared to Same Period in 2013

EBITDA. -The $2 millionincrease reflects lower corporate costs, including employee benefit costs.

Impairment of Goodwill

As permitted under accounting guidance on testing goodwill for impairment, we perform 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 consider events and circumstances specific to us, such as macroeconomic conditions, industry and market considerations, cost factors and overall financial performance, when evaluating whether it is more likely than not that the fair values of our reporting units are less than their respective carrying amounts.

In connection with our quantitative assessments, we primarily use 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 and increasing demand for crude oil and NGL transportation capacity on our pipeline systems. 

We performed a test on all our reporting units for our test of goodwill impairment as of April 1, 2014. Based on the results of our annual goodwill impairment testing, no indicators of impairment were noted and the fair values of the reporting units that we assessed at April 1, 2014 (our testing date) were substantially in excess of their respective carrying values.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2014, we had negative working capital of $951 million. This balance includes commercial paper liabilities totaling $769 million and current maturities of long-term debt of $496 million. We will rely upon cash flows from operations and various financing transactions, which may include debt and/or equity issuances, to fund our liquidity and capital requirements for the next 12 months. SEP is expected to be self-funding through its cash flows from operations, use of its revolving credit facility and its access to capital markets. We receive cash distributions from SEP in accordance with the partnership agreement, which considers our level of ownership and incentive distribution rights.

As of June 30, 2014, our revolving credit facilities included Spectra Capital’s $1.0 billion facility, SEP’s $2.0 billion facility, Westcoast’s 300 million Canadian dollar facility and Union Gas’ 400 million Canadian dollar facility. We had available capacity of $1,451 million under SEP’s credit facility and $1,436 million under our other subsidiaries’ credit facilities. These facilities are used principally as back-stops for commercial paper programs. At Spectra Capital, SEP and Westcoast, we primarily use commercial paper for temporary funding of capital expenditures. At Union Gas, we primarily use commercial paper to support short-term working capital fluctuations. 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 12 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.

Cash Flow Analysis

The following table summarizes the changes in cash flows for each of the periods presented:

	Six Months Ended June 30,
	2014			2013
Net cash provided by (used in):	(in millions)
Operating activities	$	1,209		$	1,200
Investing activities	(612		)	(2,535		)
Financing activities	(499		)	1,461
Effect of exchange rate changes on cash	1			(3		)
Net increase in cash and cash equivalents	99			123
Cash and cash equivalents at beginning of the period	201			94
Cash and cash equivalents at end of the period	$	300		$	217

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Operating Cash Flows

Net cash provided by operating activities increased $9 million to $1,209 million for the six months ended June 30, 2014 compared to the same period in 2013, driven mostly by higher earnings and distributions from unconsolidated affiliates, partially offset by changes in working capital.

Investing Cash Flows

Net cash used in investing activities decreased $1,923 million to $612 million in the six months ended June 30, 2014 compared to the same period in 2013. This change was driven by:

• a $1,254 million net cash outlay for the acquisition of Express-Platte in 2013,

• a $264 million decrease in capital and investment expenditures in 2014,

• a $229 million increase in distributions received from unconsolidated affiliates, comprised mostly of a distribution from Southeast Supply Header, LLC (SESH) with proceeds from a SESH debt offering, and

• a $171 million decrease in net purchases of AFS securities in 2014.

	Six Months Ended June 30,
	2014		2013
Capital and Investment Expenditures	(in millions)
Spectra Energy Partners (a,b)	$	444	$	675
Distribution	131		113
Western Canada Transmission & Processing	270		317
Total reportable segments	845		1,105
Other	18		22
Total consolidated	$	863	$	1,127

___________

(a) Excludes a $1,254 million net cash outlay for the acquisition of Express-Platte in 2013.

(b) Excludes reimbursements from noncontrolling interests of $20 million in 2014.

Capital and investment expenditures for the six months ended June 30, 2014 consisted of $626 million for expansion projects and $237 million for maintenance and other projects.

We project 2014 capital and investment expenditures of approximately $2.1 billion, consisting of approximately $1.2 billion for Spectra Energy Partners, $0.5 billion for Distribution and $0.4 billion for Western Canada Transmission & Processing. Total projected 2014 capital and investment expenditures include approximately $1.3 billion of expansion capital expenditures and $0.8 billion for maintenance and upgrades of existing plants, pipelines and infrastructure to serve growth. This excludes an estimated $188 million capital contribution we anticipate making in August 2014 to SESH in connection with a SESH debt retirement. We continue to assess short and long-term market requirements and adjust our capital plans as required.

Financing Cash Flows and Liquidity

Net cash used in financing activities totaled $499 million in the six months ended June 30, 2014 compared to $1,461 million provided by financing activities in the same period of 2013. This change was driven by:

• $24 million of net redemptions of long-term debt in 2014 compared to $1,302 million of net issuances in 2013 which were primarily used to fund the acquisition of Express-Platte,

• a $256 million net decrease in commercial paper in 2014 compared to a $440 million net increase in 2013, and

• a $41 million increase in dividends paid on common stock in 2014, partially offset by

• a $112 million increase in contributions from noncontrolling interests in 2014.

In January 2014, Spectra Capital borrowed the full $300 million available under its unsecured term loan agreement. Interest on the borrowing is based on LIBOR and the borrowing is due in 2018. Net proceeds from the borrowing were used for general corporate purposes.

On June 2, 2014, Union Gas issued 200 million Canadian dollars (approximately $183 million as of the issuance date) of 2.76% unsecured notes due 2021 and 250 million Canadian dollars (approximately $229 million as of the issuance date) of 4.20% unsecured notes due 2044. Net proceeds from the offerings were used for general corporate purposes.

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During the first half of 2014, SEP issued 3.9 million common units to the public, representing limited partner interests, and 80,000 general partner units to Spectra Energy under its continuous offering program. Total net proceeds to SEP were $195 million (net proceeds to Spectra Energy were $191 million). The net proceeds were used for SEP’s general partnership purposes, which may have included debt repayments, future acquisitions, capital expenditures and/or additions to working capital.

Available Credit Facilities and Restrictive Debt Covenants. See Note 12 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 is excluded from the calculation of the ratio. As of June 30, 2014, this ratio was 56%. Our equity and, as a result, this ratio, is 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, 2014, however, it is not likely that a material adverse effect would occur as a result of a weakened Canadian dollar.

Dividends. Our near-term objective is to increase our cash dividend by $0.12 per year through 2016. 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. We declared a quarterly cash dividend of $0.335 per common share on July 15, 2014 payable on September 9, 2014 to shareholders of record at the close of business on August 12, 2014.

Other Financing Matters. Spectra Energy Corp and Spectra Capital have an effective shelf registration statement on file with the Securities and Exchange Commission (SEC) to register the issuance of unspecified amounts of various equity and debt securities. SEP has an effective shelf registration statement on file with the SEC to register the issuance of unspecified amounts of limited partner common units and various debt securities. SEP also has $282 million available as of June 30, 2014 for the issuance of limited partner common units and various debt securities under another effective shelf registration statement on file with the SEC related to its continuous offering program. Westcoast and Union Gas have an aggregate 650 million Canadian dollars (approximately $609 million) available as of June 30, 2014 for the issuance of debt securities in the Canadian market under debt shelf prospectuses.

OTHER ISSUES

New Accounting Pronouncements. See Note 20 of Notes to Condensed Consolidated Financial Statements for discussion.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Our exposure to market risk is described in Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2013. 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.

45

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, 2014, and, based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these controls and procedures are effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

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, 2014 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 4 and 15 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, 2013 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.

46

(a) Exhibits

Exhibit Number
*+10.1	Omnibus Amendment, dated June 20, 2014, to Spectra Energy Corp Executive Savings Plan, Spectra Energy Corp Executive Cash Balance Plan and Spectra Energy Corp 2007 Long-Term Incentive Plan.
*+10.2	Form of Retention Stock Award Agreement (2014) pursuant to the Spectra Energy Corp 2007 Long-Term Incentive Plan.
*+10.3	Form of Change in Control Agreement (U.S.) (2014).
*+10.4	Form of Change in Control Agreement (Canada) (2014).
*31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*32.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*101.INS	XBRL Instance Document.
*101.SCH	XBRL Taxonomy Extension Schema.
*101.CAL	XBRL Taxonomy Extension Calculation Linkbase.
*101.DEF	XBRL Taxonomy Extension Definition Linkbase.
*101.LAB	XBRL Taxonomy Extension Label Linkbase.
*101.PRE	XBRL Taxonomy Extension Presentation Linkbase.

*	Filed herewith.
+	Denotes management contract or compensatory plan or arrangement.

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

SIGNATURES

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

	SPECTRA ENERGY CORP
Date: August 7, 2014	/s/    Gregory L. Ebel
	Gregory L. Ebel
	President and Chief Executive Officer
Date: August 7, 2014	/s/    J. Patrick Reddy
	J. Patrick Reddy
	Chief Financial Officer

47

EX-10.1

EXHIBIT 10.1

Execution Version

Omnibus Amendment

WHEREAS,this Omnibus Amendment (this “Amendment”), dated as of June 20, 2014 to the equity incentive and non-qualified plans, programs and arrangements set forth on ExhibitA attached hereto (each, a “Plan” and, collectively, the “Plans”) shall be effective as of the date hereof;

WHEREAS, subject to the limitations specified in the Plans, the Plans generally permit the Board of Directors of Spectra Energy Corp (the “Board”) or the Compensation Committee of the Board (the “Committee”) to amend the terms of the Plans; and

WHEREAS, the Board and the Committee wish to amend the Plans on the terms and subject to the conditions described herein.

NOW, THEREFORE,the Plans are hereby amended as of the date hereof as follows:

1. Except as otherwise specifically set forth on Exhibit A hereto, with respect to the Plans and with respect to any award, account or benefit outstanding under any Plan, the definition of “Change in Control” or “Change of Control” shall be amended and restated in its entirety to read as follows:

““Change in Control” means:

(1)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 “ExchangeAct”)) (a “Person”) becomes the beneficial owner (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 the Company (the “Outstanding 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 (the “OutstandingCompany Voting Securities”); provided, however, that, for purposes of this definition, the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any company controlled by, controlling or under common control with the Company or (iv) any acquisition pursuant to a transaction that complies with Sections (3)(A), (3)(B)and (3)(C) of this definition;

(2)Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual was a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

(3)Consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Company or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or securities of another entity by the Company or any of its subsidiaries (each, a “Business Combination”), in each case unless, following such Business Combination, (A) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors (or, for a non-corporate entity, equivalent governing body), as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any parent or other entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 30% or more of, respectively, the then-outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) of the entity resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such entity, except to the extent that such ownership existed prior to the Business Combination, and (C) at least a majority of the members of the board of directors (or, for a non-corporate entity, equivalent governing body) of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or

(4)Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

Notwithstanding anything in the foregoing to the contrary, with respect to compensation (i) that is subject to Code Section 409A and (ii) for which a Change in Control would accelerate the timing of payment thereunder, the term “Change in Control” shall mean a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company, as defined in Code Section 409A and authoritative guidance thereunder, but only to the extent inconsistent with the above definition and as necessary to comply with Code Section 409A as determined by the Company.

For purposes of this definition, the term “Company” shall mean Spectra Energy Corp.”

2. With respect to the Spectra Energy Corp Executive Savings Plan (as amended and restated effective as of May 1, 2012) and the Spectra Energy Corp Executive Cash

2

Balance Plan (as amended and restated effective as of May 1, 2012) only, the following paragraphs will be added to the definition of “Change in Control” in Paragraph 1, above:

“Notwithstanding the foregoing, however, for purposes of Sub-Plan I under the Plan, “Change in Control” means:

(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 the Company 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, (3) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or its affiliated companies and (4) any acquisition pursuant to a transaction that complies with the exceptions in Paragraph (iii) of this definition;

(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 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;

(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 corporation 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 or any parent thereof) at least fifty percent (50%) of the combined voting power of the voting securities of the Company (or such surviving entity or any parent thereof) 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.

3

For purposes of this definition, the term “Company” shall mean Spectra Energy Corp.”

3. Except as expressly provided in this Amendment,thePlansshallremaininfullforce and effect.

[SIGNATURE PAGE FOLLOWS]

4

IN WITNESS WHEREOF, this Amendment has been executed as of the date first above written.

SPECTRA ENERGY CORP

     /s/ Dorothy M. Ables

Name: Dorothy M. Ables

        Title: Chief Administrative Officer

[Signature Page to Omnibus Amendment]

EXHIBIT A

Spectra Energy Corp Executive Savings Plan (as amended and restated effective as of May 1, 2012)

Spectra Energy Corp Executive Cash Balance Plan (as amended and restated effective as of May 1, 2012)

Spectra Energy Corp 2007 Long-Term Incentive Plan (as amended and restated)*

*only with respect to awards granted as of and subsequent to the date hereof

EX-10.2

EXHIBIT 10.2

SPECTRA ENERGY CORP

RETENTION STOCK AWARD AGREEMENT

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

RECITALS

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

AWARD

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

Section 1.Number and Nature of Phantom Stock Units and Tandem DividendEquivalents. The number of Phantom Stock units and the number of tandem Dividend Equivalents subject to this Award are each ________ (____). Each Phantom Stock unit, upon becoming vested before its expiration, represents a right to receive payment in the form of one (1) share of Common Stock. Each tandem Dividend Equivalent represents a right to receive cash payments equivalent to the amount of cash dividends declared and paid on one (1) share of Common Stock after the Date of Grant and before the Dividend Equivalent expires. Phantom Stock units and Dividend Equivalents are used solely as units of measurement, and are not shares of Common Stock, and the

SE Retention Award Agreement – cliff vesting1

Grantee is not, and has no rights as, a shareholder of the Company by virtue of this Award. The Phantom Stock units and Dividend Equivalents subject to this Award have been awarded to the Grantee in respect of services to be performed by the Grantee exclusively in and after the year in which the Award is made.

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

(a)    Generally. 100% upon Grantee continuously remaining an Employee of the Company, including Subsidiaries, through the third anniversary of the Date of Grant (the “Vesting Period”).

(b)     Death or Disability. If Grantee’s employment terminates (i) as the result of Grantee’s death or (ii) as the result of Grantee’s “permanent and total disability” as defined in Section 1 of Schedule A hereto or Section 1 of Schedule B hereto, as applicable to the Grantee, then (iii) the number of Phantom Stock units and tandem Dividend Equivalents not yet vested as of the date of such employment termination to which the Grantee shall have a right to payment hereunder shall be prorated to reflect the number of months during the Vesting Period during which Grantee’s active employment with the Company, including Subsidiaries, (“Active Employment”) continued, and the remaining Phantom Stock units shall be forfeited, and (iv) the unforfeited Phantom Stock units determined in accordance with clause (iii) shall vest immediately. Solely for purposes of calculating the prorated payment in clause (iii) of the preceding sentence, if the Grantee’s Active Employment continued for at least one (1) day during a calendar month in the Vesting Period, Grantee’s Active Employment shall be considered to have continued for the entirety of such month, but in no event for more than thirty-six (36) months.

(c)     Involuntary Termination Without Cause. If Grantee’s employment is terminated by the Company, or employing Subsidiary, other than for Cause, regardless of reason for termination or the party giving notice, (i) the number of Phantom Stock units and tandem Dividend Equivalents to which the Grantee shall have a right to payment hereunder shall be prorated to reflect the number of months of Active Employment during the Vesting Period, and shall vest immediately, and (ii) the remaining Phantom Stock units shall be forfeited. Solely for purposes of calculating the prorated payment in clause (i) of the preceding sentence, if the Grantee’s Active Employment continued for at least one (1) day during a calendar month in the Vesting Period, Grantee’s Active Employment shall be considered to have continued for the entire month, but in no event for more than thirty-six (36) months. The additional provisions of Section 2 of Schedule B hereto are incorporated herein if Schedule B is applicable to the Grantee.

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(d)    Change in Control.     All Phantom Stock units and tandem Dividend Equivalents to which the Grantee has the right to payment hereunder shall become 100% vested to the extent not yet vested as provided for in this Section 2 above, if, following the occurrence of a Change in Control and before the second anniversary of such occurrence, (i) the Grantee’s employment is terminated involuntarily, and not for Cause, by the Company, or employing Subsidiary, or their successor; or (ii) such employment is terminated by the Grantee for Good Reason.

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

Grantee is required to provide notice to the Company of the existence of any of the conditions set forth in the “Good Reason” definition in this Section 2(d) at least fifteen (15), but not more than sixty (60), days prior to the date of Grantee’s termination of employment. Upon receipt of such notice, the Company may, prior to the effective date of Grantee’s termination of employment, cure or remedy such condition. If Grantee terminates from employment after providing notice and after the Company has cured the condition within the time frame set forth in this Section 2(d),then such termination of employment will be considered to be a voluntary termination of employment, and not a separation for Good Reason.

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

Section 3.Definition of “Cause.”For the purposes of this Agreement, “Cause” for termination by the Company or an employing Subsidiary of the Grantee’s employment shall include (i) a material failure by the Grantee to carry out, or

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malfeasance or gross insubordination in carrying out, reasonably assigned duties or instructions consistent with the Grantee’s position, (ii) the final conviction of the Grantee of a (A) felony, (B) crime or criminal offense involving moral turpitude, or (C) criminal or summary conviction offense that is related to the Grantee’s employment with the Company or an employing Subsidiary, (iii) an egregious act of dishonesty by the Grantee (including, without limitation, theft or embezzlement) in connection with employment, or a malicious action by the Grantee toward the customers or employees of the Company or any affiliate, (iv) a material breach by the Grantee of the Company’s Code of Business Ethics, (v) the failure of the Grantee to cooperate fully with governmental investigations involving the Company or its affiliates, or (vi) the usual meaning of just cause under Canadian common law, if applicable; all as determined by the Company in its sole discretion.

Section 4.    Forfeiture/Expiration. Any Phantom Stock unit subject to this Award shall be forfeited upon notice of the termination of Grantee’s continuous employment with the Company and its Subsidiaries, whether such notice is given by the Grantee or by the Company, including Subsidiaries, from the Date of Grant, except to the extent otherwise provided in Section 2, and, if not previously vested and paid, or deferred, or forfeited, shall expire immediately before the third anniversary of the Date of Grant. Any Dividend Equivalent subject to this Award shall expire at the time the unit of Phantom Stock with respect to which the Dividend Equivalent is in tandem (i) is vested and paid, or, to the extent permitted by the laws of the applicable jurisdiction, deferred, (ii) is forfeited, or (iii) expires. The additional provisions of Section 3 of Schedule B hereto are incorporated herein if Schedule B is applicable to the Grantee.

Section 5.Dividend Equivalent Payments. Payment with respect to any Dividend Equivalent subject to this Award that is in tandem with a Phantom Stock unit that is vested and paid shall be paid in a single lump sum cash payment as soon as practicable following the vesting and payment of the Phantom Stock unit, and in no event later than the end of the third calendar year following the year of the Date of Grant, except, if the vested Phantom Stock unit is deferred by the Grantee as provided in Section 6, payment with respect to the tandem Dividend Equivalent shall likewise be deferred. Payment under this Section 5 shall be made not later than thirty (30) days after payment hereunder of the related tandem Phantom Stock units. The Dividend Equivalent payment amount shall equal the aggregate cash dividends declared and paid with respect to one (1) share of Common Stock for the period beginning on the Date of Grant and ending on the date the vested, tandem Phantom Stock unit is paid or deferred and before the Dividend Equivalent expires. However, should the Grantee receive payment of Phantom Stock units under this Award without the right to receive a dividend and, because of the timing of the declaration of such dividend, the Grantee is not otherwise entitled to payment under the expiring Dividend Equivalent with respect to such dividend, the Grantee, nevertheless, shall be entitled to such payment. Dividend Equivalent payments shall be subject to withholding for taxes. Notwithstanding any other provision hereof, to the extent necessary for this Agreement not to be construed as a salary deferral arrangement under Canadian law, in no event will any Dividend Equivalent to which the Grantee may be entitled vest, or will the right to receive a

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payment in respect of any Dividend Equivalent arise, after December 30 of the calendar year which is three years following the end of the year in which any portion of the services to which the award of such Dividend Equivalent relates were performed by the Grantee, and in the event this would, apart from this provision, occur, notwithstanding any other provision hereof, the applicable Dividend Equivalent will vest and the Grantee will be entitled to receive payment of such Dividend Equivalent on December 30 (or the first date prior thereto that is not a Saturday, Sunday or holiday) in the first calendar year which is three years following the end of the year in which any portion of the services to which the award of such Dividend Equivalent relates were performed by the Grantee.

Section 6.    Payment of Phantom Stock Units. Payment of Phantom Stock units subject to this Award shall be made to the Grantee in a single lump sum payment as soon as practicable following the time such units become vested in accordance with Section 2 prior to their expiration but in no event later than thirty (30) days following such vesting and in no event later than the end of the third calendar year following the year of the Date of Grant, except to the extent deferred by Grantee in accordance with such procedures as the Committee, or its delegatee, may prescribe consistent with the requirements of Code Section 409A or any Canadian law equivalent, as applicable. Any deferral of Phantom Stock units by the Grantee hereunder shall apply to both the shares of Common Stock and the related tandem Dividend Equivalents. Payment shall be subject to withholding for taxes. Payment shall be in the form of one (1) share of Common Stock for each full vested unit of Phantom Stock and any fractional vested unit of Phantom Stock shall not be payable unless and until subsequent vesting results in a full unit of Phantom Stock becoming vested. Notwithstanding the foregoing, the number of shares of Common Stock that would otherwise be paid (valued at Fair Market Value on the date the respective unit of Phantom Stock became vested, or if later, payable) shall be reduced by the Committee, or its delegatee, in its sole discretion, to fully satisfy any tax required to be withheld, unless the Company, or employing Subsidiary, as applicable, and the Grantee agree that such tax obligations will instead be satisfied by the Grantee timely tendering to the Company, or employing Subsidiary, as applicable, sufficient cash to satisfy such obligations and the Grantee does timely tender such cash. In the event that payment, after any such reduction in the number of shares of Common Stock to satisfy withholding for tax requirements, would be less than ten (10) shares of Common Stock, then, if so determined by the Committee, or its delegatee, in its sole discretion, payment, instead of being made in shares of Common Stock, shall be made in a cash amount equal in value to the shares of Common Stock that would otherwise be paid, valued at Fair Market Value on the date the respective Phantom Stock units became vested, or if later, payable.

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

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

Section 9.    Determinations. Determinations by the Committee, or its delegatee, shall be final and conclusive with respect to the interpretation of the Plan and this Agreement.

Section 10.    Governing Law and Severability. The validity and construction of this Agreement shall be governed by the laws of the state of Delaware applicable to transactions taking place entirely within that state. The invalidity of any provision of this Agreement shall not affect any other provision of this Agreement, which shall remain in full force and effect.

Section 11.Code Section 409A. Notwithstanding any provision of this Agreement to the contrary, for the purposes of this Agreement, the termination of Grantee’s employment shall not result in the payment of any amount hereunder that is subject to, and not exempt from, Code Section 409A, unless such termination of employment constitutes a “separation from service” as defined under Code Section 409A. Further, notwithstanding any provision of this Agreement to the contrary, if any payment or other benefit provided herein would be subject to unfavorable tax consequences under Code Section 409A because the timing of such payment is not delayed as provided in Code Section 409A for a “specified employee” (within the meaning of Code Section 409A), then if the Grantee is a “specified employee,” any such payment that the Grantee would otherwise be entitled to receive during the first six (6) months following Grantee’s termination of employment from the Company, including Subsidiaries, shall be accumulated and paid, within thirty (30) days after the date that is six (6) months following the Grantee’s date of termination of employment from the Company, including Subsidiaries, or such earlier date upon which such amount can be paid under Code Section 409A without being subject to such unfavorable tax consequences such as, for example, upon the Grantee’s death.

Section 12.Conflicts with Plan, Correction of Errors, Grantee’s Consent, andAmendments. In the event that any provision of this Agreement conflicts in any way with a provision of the Plan, such Plan provision shall be controlling and the applicable provision of this Agreement shall be without force and effect to the extent necessary to cause such Plan provision to be controlling. In the event that, due to administrative error, this Agreement does not accurately reflect a Retention Stock Award properly granted to Grantee pursuant to the Plan, the Company, acting through its Executive CompensationDepartment,reservestheright tocancelanyerroneousdocumentand, if appropriate, to replace the cancelled document with a corrected document. It is the intention of the Company and the Grantee that this Agreement either (i) comply with the

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salary deferral arrangement rules under Canadian law and Code Section 409A, as applicable, or (ii) not be construed as a salary deferral arrangement under Canadian law and be exempt from Code Section 409A, to the extent applicable. Accordingly, this Agreement shall be interpreted as necessary and to the extent legally permissible to comply with the requirements of, or exemption under, Canadian law and Code Section 409A, as applicable, as determined by the Committee or its delegatee. Grantee shall also be deemed to consent to any amendment of the Plan or the Agreement as the Committee may reasonably make in furtherance of such intention, and the Committee shall promptly provide, or make available to, the Grantee a copy of any such amendment. Finally, this Agreement may be amended or modified at any time and from time to time by action of the Committee.

Section 13. Grantee Confidentiality Obligations.In accepting this Retention Stock Award, Grantee acknowledges that Grantee is obligated under Company policy, and under federal, state, provincial and other applicable law, to protect and safeguard the confidentiality of trade secrets and other proprietary and confidential information belonging to the Company and its affiliates that are acquired by Grantee during Grantee’s employment with the Company and its affiliates, and that such obligations continue beyond the termination of such employment. Grantee agrees to notify any subsequent employer of such obligations and that the Company and its affiliates, in order to enforce such obligations, may pursue legal recourse not only against Grantee, but against a subsequent employer of Grantee. Grantee agrees that he shall not disclose the existence or terms of this Agreement to anyone other than his spouse, tax advisor(s) and/or attorney(s), provided that he first obtains the agreement of such persons to be bound by the confidentiality provisions of this paragraph. Grantee also agrees to immediately give the Company written notice in accordance with the provisions of this Agreement in the event he is legally required to disclose any of the confidential information covered by the provisions of this paragraph.

Section 14.Nonsolicitation. Grantee further agrees that he will not, either directly or indirectly, solicit, hire or employ, or cause any other person, company, or entity to solicit, hire or employ, any employee or contractor retained or employed by the Company or its affiliates during the period of Grantee’s employment and for the period set forth in Section 2 of Schedule A hereto or Section 4 of Schedule Bhereto, as applicable to the Grantee. The provisions of this paragraph shall not apply to contact initiated by an employee or contractor of the Company or its affiliates in response to a general solicitation of applications for employment. Grantee agrees that this Agreement is subject to the provisions of this paragraph.

Section 15.Notices. All notices under this Agreement shall be mailed or delivered by hand to the parties at their respective addresses set forth beneath their signatures below or at such other address as may be designated in writing by either party to the other party, or to their permitted transferees if applicable. Notices shall be effective upon receipt.

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Section 16. Payments Subject to Clawback.To the extent that any payment under this Agreement is subject to clawback under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as it may be amended from time to time, such amount will be clawed back in appropriate circumstances, as determined under the terms and conditions prescribed by such Act and the authority issued thereunder.

Section 17.Equitable Remedies. Grantee hereby acknowledges and agrees that a breach of Grantee’s obligations under this Agreement would result in damages to the Company that could not be adequately compensated for by monetary award. Accordingly, in the event of any such breach by Grantee, in addition to all other remedies available to the Company at law or in equity,the Company will be entitled as a matter of right to apply to a court of competent jurisdiction for such relief by way of restraining order, injunction, decree or otherwise, as may be appropriate to ensure compliance with the provisions of this Agreement.

Section 18.Arbitration Agreement.The Grantee and the Company both agree that any dispute arising out of or related to this Agreement, which does not involve the Company seeking a court injunction or other relief as provided for in Section 17, shall be resolved by binding arbitration under the employment dispute resolution rules of the American Arbitration Association and that any proceeding under the provisions of this Section 18 shall be held in Houston, Texas. The parties both irrevocably WAIVE ANY AND ALL RIGHTS TO A JURY as to any and all claims and issues in any such dispute. By this provision, both the Grantee and the Company understand and agree that any and all claims and issues in such dispute shall be decided by such arbitration proceeding.

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

[Signature Page Follows]

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

ATTEST:    SPECTRA ENERGY CORP

By:     By: ___________________________

Corporate Secretary         President & CEO, Spectra Energy Corp

Address for Notices:

5400 Westheimer Court

Mail Drop 1O23

Houston, Texas 77056

Attention: Karen Gowder

Acceptance of Phantom Stock Award

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

_______________________________

Grantee's Signature

_______________________________    

(print name)

_______________________________

(employee ID)

Address for Notices:

_______________________________

_______________________________

_______________________________

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SCHEDULE A

This Schedule A and the provisions hereof shall apply to the Grantee if (and only if) the Grantee is on the payroll of one of the Company’s directly or indirectly held or majority or greater-owned subsidiaries or affiliates that is a United States entity.

Section 1.    For purposes of Section 2(b) of the Agreement, “permanent and total disability” shall have the meaning set forth in Code Section 22(e)(3).

Section 2.    The nonsolicitation period for purposes of Section 14 of theAgreement is a period of three (3) years following Grantee’s termination of employment with the Company and its affiliates.

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SCHEDULE B

This Schedule B and the provisions hereof shall apply to the Grantee if (and only if) the Grantee is on the payroll of one of the Company’s directly or indirectly held or majority or greater-owned subsidiaries or affiliates that is a Canadian entity.

Section 1.    For purposes of Section 2(b) of the Agreement, an individual shall be considered to have a “permanent and total disability” if the individual is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months.

Section 2.    The following provisions shall be incorporated at the end of Section2(c) of the Agreement:

The date that the Grantee’s employment is terminated by the Company, including Subsidiaries, other than for Cause for the purposes of this Section 2(c) shall be deemed to be the date on which any notice of termination of employment provided to such Grantee is stated to be effective (or in the case of an alleged constructive dismissal, the date on which the alleged constructive dismissal is alleged to have occurred), and not during or as of the end of any period following such date during which the Grantee is in receipt of, or entitled to receive, statutory, contractual, or common law notice of termination or any compensation in lieu of such notice.

Section 3.    The following provisions shall be incorporated at the end of Section4 of the Agreement:

The date of the termination of Grantee’s continuous employment with the Company, including Subsidiaries, for the purposes of this Section 4 shall be deemed to be the date on which any notice of termination of employment provided to or by such Grantee is stated to be effective (or in the case of an alleged constructive dismissal, the date on which the alleged constructive dismissal is alleged to have occurred), and not during or as of the end of any period following such date during which the Grantee is in receipt of, or entitled to receive, statutory, contractual, or common law notice of termination or any compensation in lieu of such notice.

Section 4.    The nonsolicitation period for purposes of Section 14 of theAgreement is a period of one (1) year following Grantee’s termination of employment with the Company and its affiliates.

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EX-10.3

EXHIBIT 10.3

CHANGE IN CONTROL AGREEMENT

THIS AGREEMENT, dated as of ____________, is made by and between SPECTRA ENERGY CORP, a Delaware corporation (the "Company"), and ________________________________ (the "Executive").

WHEREAS, the Company considers it essential to the best interests of its shareholders to foster the continued employment of key management personnel;

WHEREAS, the Board of Directors of the Company recognizes that, as is the case with many publicly held corporations, the possibility of a Change in Control exists and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its shareholders; and

WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company's management, including the Executive, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change in Control.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Executive, intending to be legally bound, do hereby agree as follows:

1.Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated below:

(A)"Accrued Rights" shall have the meaning set forth in Section 3 hereof.

(B)"Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.

(C)"Auditor" shall have the meaning set forth in Section 4.2 hereof.

(D)"Base Amount" shall have the meaning set forth in Code Section 280G(b)(3).

(E)"Beneficial Ownership" shall have the meaning set forth in Rule 13d‑3 under the Exchange Act.

(F)"Board" shall mean the Board of Directors of the Company.

(G)"Cause" for termination by the Company of the Executive's employment shall mean (i) a material failure by the Executive to carry out, or malfeasance or gross insubordination in carrying out, reasonably assigned duties or

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instructions consistent with the Executive's position, (ii) the final conviction of the Executive of a felony or crime involving moral turpitude, (iii) an egregious act of dishonesty by the Executive (including, without limitation, theft or embezzlement) in connection with employment, or a malicious action by the Executive toward the customers or employees of the Company or any Affiliate, (iv) a material breach by the Executive of the Company's Code of Business Ethics, or (v) the failure of the Executive to cooperate fully with governmental investigations involving the Company or its Affiliates; provided, however, that the Company shall not have reason to terminate the Executive's employment for Cause pursuant to this Agreement unless the Executive receives written notice from the Company identifying the acts or omissions constituting Cause and gives the Executive a thirty (30) day opportunity to cure, if such acts or omissions are capable of cure.

(H)“Change in Control” means:

(a)    Any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) becomes the beneficial owner (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 the Company (the “Outstanding Company CommonStock”) or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding CompanyVoting Securities”); provided, however, that, for purposes of this definition, the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any company controlled by, controlling or under common control with the Company or (iv) any acquisition pursuant to a transaction that complies with Sections (c)(1), (c)(2) and (c)(3) of this definition;

(b)    Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual was a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

(c)    Consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Company or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or securities of another entity by the Company or any of its subsidiaries (each, a “BusinessCombination”), in each case unless, following such Business Combination, (1) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors (or, for a non-corporate entity, equivalent governing body), as the case may

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be, of the entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (2) no Person (excluding any parent or other entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 30% or more of, respectively, the then-outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) of the entity resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such entity, except to the extent that such ownership existed prior to the Business Combination, and (3) at least a majority of the members of the board of directors (or, for a non-corporate entity, equivalent governing body) of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or

(d)    Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

Notwithstanding anything in the foregoing to the contrary, with respect to compensation (i) that is subject to Code Section 409A and (ii) for which a Change in Control would accelerate the timing of payment thereunder, the term “Change in Control” shall mean a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company, as defined in Code Section 409A and authoritative guidance thereunder, but only to the extent inconsistent with the above definition and as necessary to comply with Code Section 409A as determined by the Company.

(I)"Code" shall mean the Internal Revenue Code of 1986, as amended from time to time.

(J)"Company" shall mean Spectra Energy Corp and, except in determining under Section 1.H hereof whether or not any Change in Control of the Company has occurred, shall include any successor to its business and/or assets which assumes and agrees to perform this Agreement by operation of law, or otherwise.

(K)"Confidential Information" shall have the meaning set forth in Section 8 hereof.

(L)"DB Pension Plan" shall mean any tax-qualified, supplemental or excess defined benefit pension plan maintained by the Company and any other defined benefit plan or agreement entered into between the Executive and the Company which is designed to provide the Executive with supplemental retirement benefits.

(M)"DC Pension Plan" shall mean any tax-qualified, supplemental or excess defined contribution plan maintained by the Company and any other defined contribution plan or agreement entered into between the Executive and the Company which is designed to provide the executive with supplemental retirement benefits.

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(N)"Date of Termination" with respect to any purported termination of the Executive's employment after a Change in Control and during the Term, shall mean (i) if the Executive's employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that the Executive shall not have returned to the full‑time performance of the Executive's duties during such thirty (30) day period), and (ii) if the Executive's employment is terminated for any other reason, the date specified in the Notice of Termination (which, in the case of a termination by the Company, shall not be less than thirty (30) days (except in the case of a termination for Cause) and, in the case of a termination by the Executive, shall not be less than fifteen (15) days nor (without the consent of the Company) more than sixty (60) days, respectively, from the date such Notice of Termination is given).

(O)"Disability" shall be deemed the reason for the termination by the Company of the Executive's employment, if, as a result of the Executive's incapacity due to physical or mental illness, the Executive shall have been absent from the full-time performance of the Executive's duties with the Company for a period of six (6) consecutive months, shall have qualified for benefits under the Company's long-term disability program, the Company shall have given the Executive a Notice of Termination for Disability, and, within thirty (30) days after such Notice of Termination is given, the Executive shall not have returned to the full-time performance of the Executive's duties.

(P)"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time.

(Q)    "Excise Tax" shall mean any excise tax imposed under Code section 4999.

(R)"Executive" shall mean the individual named in the first paragraph of this Agreement.

(S)"Good Reason" for termination by the Executive of the Executive's employment shall mean the occurrence (without the Executive's express written consent which specifically references this Agreement) after any Change in Control (subject to Section 4.3 hereof) of any one of the following acts by the Company, or failures by the Company to act, unless such act or failure to act is corrected prior to the Date of Termination specified in the Notice of Termination given in respect thereof: (i) the assignment to the Executive of any duties materially inconsistent with the Executive's status with the Company or a substantial adverse alteration in the nature or status of the Executive's responsibilities from those in effect immediately prior to the Change in Control, (ii) a reduction in the Executive's annual base salary as in effect immediately prior to the Change in Control (exclusive of any across the board reduction similarly affecting all or substantially all similarly situated employees determined without regard to whether or not an otherwise similarly situated employee's employment was with the Company prior to the Change in Control), (iii) a reduction in the Executive's target annual bonus as in effect immediately prior to the Change in Control (exclusive of any across the board reduction similarly affecting all or substantially all similarly situated

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employees determined without regard to whether or not an otherwise similarly situated employee's employment was with the Company prior to the Change in Control), (iv) the elimination of any material employee benefit plan in which the Executive is participating immediately prior to the Change in Control, or the material reduction of the Executive’s benefits under any such plan, unless the Company either (A) immediately replaces such employee benefit plan, or unless the Executive is permitted to immediately participate in other employee benefit plan(s), providing the Executive with a substantially equivalent value of benefits in the aggregate to those eliminated or materially reduced (it being understood that any such replacement plan or benefit need not be an identical “type” of plan or benefit as that being eliminated or reduced in order for “Good Reason” not to be triggered by this subsection (iv), as long as the aggregate value of such replacement plan(s) or benefit to the Executive is substantially equivalent to that being eliminated or reduced), or (B) immediately provides the Executive with other forms of compensation of comparable value to that being eliminated or reduced (including but not limited to increases in the Executive’s base salary or other cash compensation), (v) the failure of the Company to obtain the assumption of this Agreement from any successor as contemplated in Section 11.1 hereof, or (vi) a relocation that requires the Executive to report to a work location more than 35 miles from the work location to which he was assigned prior to the Change in Control and the Executive does not consent to the relocation.

The Executive's continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder.

(T)"Notice of Termination" shall have the meaning set forth in Section 5 hereof.

(U)"Person" shall have the meaning given in section 3(a)(9) of the Exchange Act, as modified and used in sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company.

(V)"Repayment Amount" shall have the meaning set forth in Section 7.3 hereof.

(W)"Restricted Period" shall have the meaning set forth in Section 7.2 hereof.

(X)"Separation from Service" shall have the meaning provided under Code Section 409A.

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(Y)"Severance Payments" shall have the meaning set forth in Section 4.1(C) hereof.

(Z)"Severance Period" shall have the meaning set forth in Section 4.1(C) hereof.

(AA)"Specified Employee" shall have the meaning provided under Code Section 409A.

(BB)"Subsidiary" means an entity that is wholly owned, directly or indirectly, by the Company, or any other affiliate of the Company that is so designated from time to time by the Company.

(CC)"Term" shall mean the period of time described in Section 2 hereof (including any extension, continuation or termination described therein).

(DD)"Total Payments" shall mean those payments so described in Section 4.2 hereof.

2.Term of Agreement. The Term of this Agreement shall commence on the date hereof and shall continue in effect through the second anniversary of the date hereof; provided, however, that commencing on the date that is twelve (12) months following the date hereof and each subsequent anniversary of the date hereof, the Term shall automatically be extended for one additional year; furtherprovided, however, the Company or the Executive may terminate this Agreement effective at any time following the second anniversary of the date hereof only with six (6) months advance written notice (which such notice may be given before such second anniversary); and furtherprovided, however, that, notwithstanding the above, if a Change in Control shall have occurred during the Term, the Term shall in no case expire earlier than twenty‑four (24) months beyond the month in which such Change in Control occurred.

This Agreement supersedes any prior Change in Control Agreement between the Company and the Executive in its entirety.

3.Compensation Other Than Severance Payments. If the Executive's employment shall be terminated for any reason following a Change in Control (subject to Section 4.3 hereof) and during the Term, the Company shall pay the Executive the salary amounts payable in the normal course for service through the Date of Termination and any rights or payments that have become vested or that are otherwise due in accordance with the terms of any employee benefit, incentive, or compensation plan or arrangement maintained by the Company that the Executive participated in at the time of his or her termination of employment (together, the "Accrued Rights").

4.Severance Payments.

4.1Subject to Sections 4.2 and 4.3 hereof, and further subject to the Executive executing and not revoking a release of claims substantially in the form set

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forth as Exhibit A to this Agreement, if the Executive's employment is terminated following a Change in Control and during the Term (but in any event not later than twenty-four (24) months following a Change in Control), other than (A) by the Company for Cause, (B) by reason of death or Disability, or (C) by the Executive without Good Reason, then, in any such case, in addition to the payments and benefits representing the Executive's Accrued Rights, the Company shall pay the Executive the amounts, and provide the Executive the benefits, described in this Section 4.1 ("Severance Payments").

(A)A lump-sum payment equal to (i) the Executive's annual bonus payment earned for any completed bonus year prior to termination of employment, if not previously paid, plus (ii) a pro-rata amount of the Executive's target bonus under any performance-based bonus plan, program, or arrangement in which the Executive participates for the year in which the termination occurs, determined as if all program goals had been met, pro-rated based on the number of days of service during the bonus year occurring prior to termination of employment;

(B)In lieu of any severance benefit otherwise payable to the Executive, the Company shall pay to the Executive, a lump sum severance payment, in cash, equal to two (or, if less, the number of years (including partial years) until the Executive reaches the Company's mandatory retirement age, provided that the Company adopts a mandatory retirement age pursuant to 29 USC §631(c)), multiplied by the sum of (i) the Executive's base salary as in effect immediately prior to the Date of Termination or, if higher, as in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason, and (ii) the Executive’s target short-term incentive bonus opportunity for the fiscal year in which the Date of Termination occurs or, if higher, the fiscal year in which the first event or circumstance occurs constituting Good Reason. Notwithstanding the preceding sentence, in the event that a lump sum Severance Payment would constitute a change in the form or timing of any payment that is subject to, and not exempt under, Code Section 409A with respect to any severance benefit otherwise payable to the Executive under any other plan or arrangement, then the portion of the Severance Payment that is equal to the amount payable under such other severance plan shall be payable in the form and at the time applicable under such other severance plan, and any excess Severance Payment, as determined under this Section 4.1(B), shall be paid in a lump sum in accordance with this Section 4.1.

(C)For a period of two years immediately following the Date of Termination (or, if less, the period until the Executive reaches the Company's mandatory retirement age, provided that the Company adopts a mandatory retirement age pursuant to 29 USC §631(c)) (the "Severance Period"), the Company shall arrange to provide the Executive and his or her spouse, if any, and any other eligible dependents of Executive, with medical, dental, and basic life insurance benefits substantially similar to those provided to the Executive and his or her eligible dependents immediately prior to the Date of Termination, or, if

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more valuable in the aggregate, to those provided immediately prior to the first occurrence of an event or circumstance constituting Good Reason, at no greater after-tax cost to the Executive than the after-tax cost to the Executive immediately prior to such date or occurrence; provided, however, that, in lieu of providing such benefits, the Company may choose to provide such benefits through a third-party insurer. Benefits otherwise receivable by the Executive pursuant to this Section 4.1(C) shall be reduced to the extent benefits of the same type are received by or made available to the Executive during the Severance Period as a result of subsequent employment (and any such benefits received by or made available to the Executive shall be reported to the Company by the Executive).

To the extent the continuation of the benefits under this Section 4.1(C) is taxable to Executive, and for medical benefits, the benefits continue beyond the Executive's COBRA period, the Company shall administer such continuation of coverage consistent with the following additional requirements as set forth in Treas. Reg. § 1.409A-3(i)(1)(iv):

(1)    Executive’s eligibility for benefits in one year will not affect Executive’s eligibility for benefits in any other year;

(2)    Any reimbursement of eligible expenses will be made on or before the last day of the year following the year in which the expense was incurred; and

(3)    Executive’s right to benefits is not subject to liquidation or exchange for another benefit.

In the event the preceding sentence applies to certain benefits and Executive is a Specified Employee on the date of his Separation from Service, such benefits shall commence no sooner than the first day of the seventh month after the Executive's Separation from Service.

(D)In addition to the benefits to which the Executive is entitled under the DC Pension Plan, the Company shall pay the Executive a lump sum amount, in cash, equal to the sum of (i) the amount that would have been contributed thereto by the Company on the Executive's behalf during the Severance Period, determined (x) as if the Executive made the maximum permissible contributions thereto during such period, (y) as if the Executive earned compensation during such period equal to the sum of the Executive's base salary and target bonus as in effect immediately prior to the Date of Termination, or, if higher, as in effect immediately prior to the occurrence of the first event or circumstance constituting Good Reason, and (z) without regard to any amendment to the DC Pension Plan made subsequent to a Change in Control and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of benefits thereunder, and (ii) the unvested portion, if any, of the Executive's account balance under the tax-qualified DC Pension Plan as of the Date of Termination that would have vested had Executive remained employed by

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the Company for the remainder of the Term. In addition, the unvested portion, if any, of the Executive's account balance under the nonqualified DC Pension Plan as of the Date of Termination that would have vested had Executive remained employed by the Company for the remainder of the Term shall be fully vested as of the Date of Termination and shall be paid out in accordance with the terms of the nonqualified DC Pension Plan.

(E)In addition to the benefits to which the Executive is entitled under the DB Pension Plan, the Company shall pay the Executive a lump sum amount, in cash, equal to the sum of (i) the amount that would have been allocated thereunder by the Company in respect of the Executive during the Severance Period, determined (x) as if the Executive earned compensation during such period equal to the sum of the Executive's base salary and target bonus as in effect immediately prior to the Date of Termination, or, if higher, as in effect immediately prior to the occurrence of the first event or circumstance constituting Good Reason, and (y) without regard to any amendment to the DB Pension Plan made subsequent to a Change in Control and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of benefits thereunder, and (ii) the Executive's unvested accrued benefit, if any, under the tax-qualified DB Pension Plan as of the Date of Termination that would have vested had Executive remained employed by the Company for the remainder of the Term.

(F)    Subject to the last sentence in this section 4.1(F), notwithstanding the terms of any award agreement or plan document to the contrary, the Executive shall be entitled to receive continued vesting of any long term incentive awards, including awards of stock options but excluding awards of restricted stock and phantom stock, held by the Executive at the time of his or her termination of employment that are not vested or exercisable on such date, in accordance with their terms as if the Executive’s employment had not terminated, for the duration of the Severance Period, with any options or similar rights to remain exercisable (to the extent exercisable at the end of the Severance Period) for a period of 90 days following the close of the Severance Period, but not beyond the maximum original term of such options or rights. However, if, at the time of his severance under the terms of this agreement the Executive has attained an age of 55 years and has at least 3 years of service, nothing in this section 4.1(F) shall truncate either the vesting period or the exercise period associated with an award. In the event that the terms of any award agreement or plan document, or the actions of the Board in connection with a Change in Control, would provide the Executive with greater benefits with respect to Executive’s awards than those set forth in this paragraph (for example and without limitation, full accelerated vesting of awards upon a Change in Control, a longer post-termination exercise period, lapse of restrictions on restricted stock, and/or other benefits in excess of or to a greater extent than those provided for in this paragraph with respect to any of Executive’s awards), then the terms and conditions of any such award agreement, plan document or Board action (as the case may be), to the extent of

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such greater benefits, shall apply to such award, and nothing in this Agreement shall be deemed to provide for or require the benefits only to the extent provided in the first two sentences of this Section 4.1(F).

Except where otherwise expressly specified to the contrary under this Agreement, all lump sum payments under this Section 4.1 shall be paid within the sixty (60) day period immediately following the Executive's Separation from Service, but only if the Executive has executed by such date as the Company may prescribe (which date shall in no event be later than the 50th day following the Executive's Separation from Service) and not revoked the release of claims in accordance with the first paragraph of this Section 4.1. If the payment period described in the immediately preceding sentence begins in one taxable year and ends in another taxable year, payments described herein shall be made in the second taxable year. If the Executive is a Specified Employee on the date of his Separation from Service, any such payment (other than payments under Section 4.1(A)) that the Executive would otherwise be entitled to receive during the first six months following the Executive's Separation from Service shall be accumulated and paid within fifteen (15) business days after the date that is six months following the Executive's Separation from Service, or if earlier on the first day of the month following Executive's death. The preceding sentence shall not apply if payments are being made to the Executive upon a Change in Control pursuant to Section 4.3.

4.2    (A)    Notwithstanding any other provisions of this Agreement, in the event that any payment or benefit received or to be received by the Executive (including any payment or benefit received in connection with a Change in Control or the termination of the Executive's employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement) (all such payments and benefits, including the Severance Payments, being hereinafter referred to as the "Total Payments") would be subject (in whole or part), to the Excise Tax, then, after taking into account any reduction in the Total Payments provided by reason of Code section 280G in such other plan, arrangement or agreement, the cash Severance Payments shall first be reduced, and the noncash Severance Payments shall thereafter be reduced, to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax but only if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is greater than or equal to (ii) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of Excise Tax to which the Executive would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).

(B)    For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax, (i) no portion of the Total Payments the receipt or enjoyment of which the Executive shall have waived at such time and in such manner as not to constitute a "payment" within the meaning of Code Section 280G(b) shall be taken into account, (ii) no portion of the Total Payments shall be taken into

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account which, in the opinion of tax counsel ("Tax Counsel") who is reasonably acceptable to the Executive and selected by the accounting firm (the "Auditor") which was, immediately prior to the Change in Control, the Company's independent auditor, doesnotconstitutea"parachutepayment"withinthemeaningofCodeSection280G(b)(2) (including by reason of Code Section 280G(b)(4)(A)) and, in calculating the Excise Tax, no portion of such Total Payments shall be taken into account which, in the opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within the meaning of Code Section 280G(b)(4)(B), in excess of the Base Amount allocable to such reasonable compensation, and (iii) the value of any non‑cash benefit or any deferred payment or benefit included in the Total Payments shall be determined by the Auditor in accordance with the principles of Code Sections 280G(d)(3) and (4).

(C)    At the time that payments are made under this Agreement, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from Tax Counsel, the Auditor or other advisors or consultants (and any such opinions or advice which are in writing shall be attached to the statement).

4.3    Notwithstanding anything in this Agreement to the contrary, if (i) Executive’s employment is terminated prior to a Change in Control but after the Company and/or a third party have taken affirmative steps reasonably calculated to effectuate a Change in Control, (ii) such termination is a termination by the Company without Cause, or by the Executive for reasons that would have constituted Good Reason had they occurred following a Change in Control, and the event or actions taken by the Company in connection with such termination have been taken at the request or suggestion of such third party, and (iii) a Change in Control involving such third party (or a party competing with such third party to effectuate a Change in Control) does in fact occur, then for purposes of this Agreement, the date immediately prior to the date of such termination shall be treated as a Change in Control. For purposes of determining the timing of payments and benefits to the Executive under this Agreement in such event, the date of the actual Change in Control shall be treated as the date of the Executive’s Separation from Service, and for purposes of determining the amount of payments and benefits to the Executive under this Section 4, the date Executive’s employment is actually terminated shall be treated as the Executive’s Date of Termination under Section 1(N).

5.Notice of Termination. After a Change in Control and during the Term, any purported termination of the Executive's employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 12 hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon.

6.No Mitigation. The Company agrees that, if the Executive's employment with the Company terminates during the Term, the Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to the

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Executive by the Company pursuant to Section 4 hereof. Further, except as specifically provided in Section 4.1(C) hereof, no payment or benefit provided for in this Agreement shall be reduced by any compensation earned by the Executive as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive to the Company, or otherwise.

7.Restrictive Covenants.

7.1Noncompetition and Nonsolicitation. During the Restricted Period (as defined below), the Executive agrees that he or she shall not, without the Company's prior written consent, for any reason, directly or indirectly, either as principal, agent, manager, employee, partner, shareholder, director, officer, consultant or otherwise (A) become engaged or involved in any business (other than as a less-than three percent (3%) equity owner of any corporation traded on any national, international or regional stock exchange or in the over-the-counter market) that competes with the Company or any of its Affiliates in the business of gathering, processing, distribution, storage or transmission of natural gas, resale or arranging for the purchase or for the resale, brokering, marketing, or trading of natural gas, or derivatives thereof; energy management and the provision of energy solutions; gathering, compression, treating, processing, fractionation, transportation, trading, marketing of natural gas components, including natural gas liquids; and sales and marketing of natural gas, domestically and abroad; and any other business in which the Company, including Affiliates, is engaged at the termination of the Executive's continuous employment by the Company, including Affiliates; or (B) induce or attempt to induce any customer, client, supplier, employee, agent or independent contractor of the Company or any of its Affiliates to reduce, terminate, restrict or otherwise alter its business relationship with the Company or its Affiliates. The provisions of this Section 7.1 shall be limited in scope and effective only within the following geographical areas: (i) any country in the world where the Company, including Affiliates, has at least US$25 million in capital deployed as of termination of the Executive's continuous employment by Company, including Affiliates; (ii) the continent of North America; (iii) the United States of America and Canada; (iv) the United States of America; (v) the states of Florida, Texas, California, Massachusetts, Illinois, Michigan, New York, Colorado, Oklahoma, Ohio, Kentucky, Indiana, Pennsylvania, Connecticut and Louisiana; (vi) the states of Texas, Colorado, Massachusetts, Louisiana, Pennsylvania, and Connecticut and (vii) any state or states with respect to which was conducted a business of the Company, including Affiliates, which business constituted a substantial portion of the Executive's employment. The parties intend the above geographical areas to be completely severable and independent, and any invalidity or unenforceability of this Agreement with respect to any one area shall not render this Agreement unenforceable as applied to any one or more of the other areas. Nothing in Section 7.1 shall be construed to prohibit the Executive being retained during the Restricted Period in a capacity as an attorney licensed to practice law, or to restrict the Executive providing advice and counsel in such capacity, in any jurisdiction where such prohibition or restriction is contrary to law.

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7.2Restricted Period. For purposes of this Agreement, "Restricted Period" shall mean the period of the Executive's employment during the Term and, in the event of a termination of the Employee's employment following a Change in Control that entitles Executive to Severance Payments covered by Section 4 hereof, the twelve (12) month period following such termination of employment, commencing from the Date of Termination.

7.3Forfeiture and Repayments. The Executive agrees that, in the event he or she violates the provisions of Section 7 hereof during the Restricted Period, he or she will forfeit and not be entitled to any Severance Payments or any non-cash benefits or rights under this Agreement (including, without limitation, stock option rights), other than the payments provided under Section 3 hereof. The Executive further agrees that, in the event he or she violates the provisions of Section 7 hereof following the payment or commencement of any Severance Payments, (A) he or she will forfeit and not be entitled to any further Severance Payments, and (B) he or she will be obligated to repay to the Company an amount in respect of the Severance Payments previously made to him or her under Section 4 hereof (the "Repayment Amount"). The Repayment Amount shall be determined by aggregating the cash Severance Payments made to the Executive and multiplying the resulting amount by a fraction, the numerator of which is the number of full and partial calendar months remaining in the Severance Period at the time of the violation (rounded to the nearest quarter of a month), and the denominator of which is twenty-four (24). The Repayment Amount shall be paid to the Company in cash in a single sum within ten (10) business days after the first date of the violation, whether or not the Company has knowledge of the violation or has made a demand for payment. Any such payment made following such date shall bear interest at a rate equal to the prime lending rate of Citibank, N.A. (as periodically set) plus 1%. Furthermore, in the event the Executive violates the provisions of Section 7 hereof, and notwithstanding the terms of any award agreement or plan document to the contrary (which shall be considered to be amended to the extent necessary to reflect the terms hereof), the Executive shall immediately forfeit the right to exercise any stock option or similar rights that are outstanding at the time of the violation, and the Repayment Amount, calculated as provided above, shall be increased by the amount of any gains (measured by the difference between the aggregate fair market value on the date of exercise of shares underlying the stock option or similar right (including without limitation restricted stock, restricted stock units, performance shares and phantom stock units) and the aggregate exercise price (if any) of such stock option or similar right) realized by the Executive upon the exercise or payment of such stock options or similar rights within the one-year period prior to the first date of the violation.

7.4Permissive Release. The Executive may request that the Company release him or her from the restrictive covenants of Section 7.1 hereof upon the condition that the Executive forfeit and repay all termination benefits and rights provided for in Section 4.1 hereof. The Company may, in its sole discretion, grant such a release in whole or in part or may reject such request and continue to enforce its rights under this Section 7.

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7.5Consideration; Survival. The Executive acknowledges and agrees that the compensation and benefits provided in this Agreement constitute adequate and sufficient consideration for the covenants made by the Executive in this Section 7 and in the remainder of this Agreement. As further consideration for the covenants made by the Executive in this Section 7 and in the remainder of this Agreement, the Company has provided and will provide the Executive certain proprietary and other confidential information about the Company, including, but not limited to, business plans and strategies, budgets and budgetary projections, income and earnings projections and statements, cost analyses and assessments, and/or business assessments of legal and regulatory issues. The Executive's obligations under this Section 7 shall survive any termination of his or her employment as specified herein.

8.Confidentiality. The Executive acknowledges that during the Executive's employment with the Company or any of its Affiliates, the Executive will acquire, be exposed to and have access to, non-public material, data and information of the Company and its Affiliates and/or their customers or clients that is confidential, proprietary, and/or a trade secret ("Confidential Information"). At all times, both during and after the Term, the Executive shall keep and retain in confidence and shall not disclose, except as required and authorized in the course of the Executive's employment with the Company or any its Affiliates, to any person, firm or corporation, or use for his or her own purposes, any Confidential Information. For purposes of this Agreement, such Confidential Information shall include, but shall not be limited to: sales methods, information concerning principals or customers, advertising methods, financial affairs or methods of procurement, marketing and business plans, strategies (including risk strategies), projections, business opportunities, inventions, designs, drawings, research and development plans, client lists, sales and cost information and financial results and performance. Notwithstanding the foregoing, "Confidential Information" shall not include any information known generally to the public (other than as a result of unauthorized disclosure by the Executive or by the Company or its Affiliates). The Executive acknowledges that the obligations pertaining to the confidentiality and non-disclosure of Confidential Information shall remain in effect for a period of five (5) years after termination of employment, or until the Company or its Affiliates has released any such information into the public domain, in which case the Executive's obligation hereunder shall cease with respect only to such information so released into the public domain; provided, however, with respect to those items of Confidential Information which constitute a trade secret as defined by the applicable laws governing the protection of trade secrets of the Company, the Executive’s obligation of confidentiality shall continue to survive after the 5-year period to the greatest extent permitted by applicable trade secret law. The Executive's obligations under this Section 8 shall survive any termination of his or her employment. If the Executive receives a subpoena or other judicial process requiring that he or she produce, provide or testify about Confidential Information, the Executive shall notify the Company and cooperate fully with the Company in resisting disclosure of the Confidential Information. The Executive acknowledges that the Company has the right either in the name of the Executive or in its own name to oppose or move to quash any subpoena or other legal process directed to the Executive regarding Confidential Information. Notwithstanding any other provision of

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this Agreement, the Executive remains free to report or otherwise communicate any nuclear safety concern, any workplace safety concern, or any public safety concern to the United States Department of Labor or any other appropriate federal or state governmental agency, and the Executive remains free to participate in any federal or state administrative, judicial, or legislative proceeding or investigation with respect to any claims and matters not resolved and terminated pursuant to this Agreement. With respect to any claims and matters resolved and terminated pursuant to this Agreement, the Executive is free to participate in any federal or state administrative, judicial, or legislative proceeding or investigation if subpoenaed. The Executive shall give the Company, through its legal counsel, notice, including a copy of the subpoena, within twenty-four (24) hours of receipt thereof.

9.Return of Company Property. All records, files, lists, including, computer generated lists, drawings, documents, equipment and similar items relating to the business of the Company and its Affiliates which the Executive shall prepare or receive from the Company or its Affiliates shall remain the sole and exclusive property of Company and its Affiliates. Upon termination of the Executive's employment for any reason, the Executive shall promptly return all property of Company or any of its Affiliates in his or her possession. The Executive further represents that he or she will not copy or cause to be copied, print out or cause to be printed out any software, documents or other materials originating with or belonging to the Company or any of its Affiliates.

10.Acknowledgement and Enforcement. The Executive acknowledges that the restrictions contained in this Agreement with regards to the Executive's use of Confidential Information and his or her future business activities are fair, reasonable and necessary to protect the Company's legitimate protectable interests, particularly given the competitive nature and broad scope of the Company's business and that of its Affiliates, as well as the Executive's position with the Company. The Executive further acknowledges that the Company may have no adequate means to protect its rights under this Agreement other than by securing an injunction (a court order prohibiting the Executive from violating this Agreement). The Executive therefore agrees that the Company, in addition to any other right or remedy it may have, shall be entitled to enforce this Agreement by obtaining a preliminary and permanent injunction and any other appropriate equitable relief in any court of competent jurisdiction. The Executive acknowledges that the recovery of damages will not be an adequate means to redress a breach of this Agreement, but nothing in this Section 10 shall prohibit the Company from pursuing any remedies in addition to injunctive relief, including recovery of damages and/or any forfeiture or repayment obligations provided for herein.

11.Successors; Binding Agreement.

11.1In addition to any obligations imposed by law upon any successor to the Company, the Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to

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perform it if no such succession had taken place. Failure of the Company to obtain such assumption and agreement to perform this Agreement prior to the effectiveness of any Change in Control shall be a breach of this Agreement and shall constitute Good Reason hereunder. For purposes of implementing the foregoing, the date on which any such Change in Control becomes effective shall be deemed the date Good Reason occurs, and shall be the Date of Termination if requested by the Executive.

11.2This Agreement shall inure to the benefit of and be enforceable by the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amount would still be payable to the Executive hereunder (other than amounts which, by their terms, terminate upon the death of the Executive) if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of the Executive's estate.

12.Notices. All notices or other communications hereunder shall be in writing and shall be deemed to have been duly given (a) when delivered personally, (b) upon confirmation of receipt when such notice or other communication is sent by facsimile, (c) one day after timely delivery to an overnight delivery courier, or (d) when delivered or mailed by United States registered mail, return receipt requested, postage prepaid. Such notices shall be directed, in the case of the Company, to the Company's chief legal officer at the principal executive offices of the Company and, in the case of the Executive, to the Executive at the most recent address on file in the payroll records of the Company. Either party hereto may, by notice to the other, change its address for receipt of notices hereunder.

13.Code Section 409A. It is the intention of the Company and the Executive that this Agreement is written and administered, and will be interpreted and construed, in a manner such that no amount under this Agreement becomes subject to (a) gross income inclusion under Code Section 409A or (b) interest and additional tax under Code Section 409A (collectively, “Section 409A Penalties”), including, where appropriate, the construction of defined terms to have meanings that would not cause the imposition of the Section 409A Penalties. Accordingly, the Executive consents to any amendment of this Agreement as the Company may reasonably make in furtherance of such intention, and the Company shall promptly provide, or make available to, the Executive a copy of such amendment. Further, to the extent that any terms of the Agreement are ambiguous, such terms shall be interpreted as necessary to comply with Code Section 409A.

14.Miscellaneous. Except as otherwise provided in Section 13 hereof, no provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and the Chairman of the Board (or such officer as may be specifically designated by the Chairman of the Board). No waiver by either party hereto at any time of any breach by the other party hereto of, or of any lack of compliance with, any condition or provision of

16

this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. This Agreement supersedes any other agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof which have been made by either party or Duke Energy; provided, however, that this Agreement shall supersede any agreement setting forth the terms and conditions of the Executive's employment with the Company only in the event that the Executive's employment with the Company is terminated on or within two years following a Change in Control, by the Company other than for Cause, by the Executive for Good Reason, or under the circumstances described in Section 4.3. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Texas. All references to sections of the Exchange Act or the Code shall be deemed also to refer to any successor provisions to such sections. Any payments provided for hereunder shall be paid net of any applicable withholding required under federal, state or local law and any additional withholding to which the Executive has agreed and no such payments shall be treated as creditable compensation under any other employee benefit plan, program, arrangement or agreement of or with the Company or its affiliates. The obligations of the Company and the Executive under this Agreement which by their nature may require either partial or total performance after the expiration of the Term (including, without limitation, those under Section 4 hereof) shall survive such expiration.

15.Certain Legal Fees. To provide the Executive with reasonable assurance that the purposes of this Agreement will not be frustrated by the cost of enforcement, the Company shall reimburse the Executive promptly after receipt of an invoice for reasonable attorneys' fees and expenses incurred by the Executive as a result of a claim that the Company has breached or otherwise failed to perform its obligations under this Agreement or any provision hereof, regardless of which party, if any, prevails in the contest; provided, however, that Company shall not be responsible for such fees and expenses to the extent incurred in connection with a claim made by the Executive that the trier of fact in any such contest finds to be frivolous or if the Executive is determined to have breached his or her obligations under Sections 7, 8, 9, 16, or 17 of this Agreement; and providedfurther, however, the Company shall not be responsible for such fees or expenses in excess of $50,000 in the aggregate. Notwithstanding the preceding sentence, no reimbursement shall be made for attorneys’ fees and expenses incurred after the last day of the second taxable year of the Executive following the taxable year in which the Executive incurs a Separation from Service, and reimbursement of such amounts will not be made later than the last day of the third taxable year of the Executive following the taxable year in which the Executive incurs the Separation from Service.

16.Cooperation. The Executive agrees that he or she will fully cooperate in any litigation, proceeding, investigation or inquiry in which the Company or its Affiliates may be or become involved. The Executive also agrees to cooperate fully with any internal investigation or inquiry conducted by or on behalf of the Company. Such cooperation shall include the Executive making himself or herself available, upon the request of the Company or its counsel, for depositions, court appearances and interviews

17

by Company's counsel. The Company shall reimburse the Executive for all reasonable and documented out-of-pocket expenses incurred by him or her in connection with such cooperation. To the maximum extent permitted by law, the Executive agrees that he or she will notify the Board if he or she is contacted by any government agency or any other person contemplating or maintaining any claim or legal action against the Company or its Affiliates or by any agent or attorney of such person. Nothing contained in this Section 16 shall preclude the Executive from providing truthful testimony in response to a valid subpoena, court order, regulatory request or as may be required by law. Payment for expenses to be reimbursed under this Section 16 may not be made after December 31st of the year following the year in which the expense was incurred.

17.Non-Disparagement. The Executive agrees that he or she will not make or publish, or cause to be made or published, any statement which is, or may reasonably be considered to be, disparaging of the Company or its Affiliates, or directors, officers or employees of the businesses of the Company or its Affiliates. Nothing contained in this Section 17 shall preclude the Executive from providing truthful testimony in response to a valid subpoena, court order, regulatory request or as may be required by law.

18.Validity; Severability. The invalidity or unenforceability of any provision of any Section or sub-Section of this Agreement, including, but not limited to, any provision contained in Section 7 hereof, shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. If any provision of this Agreement is held to be unenforceable because of the scope, activity or duration of such provision, or the area covered thereby, the parties hereto agree to modify such provision, or that the court making such determination shall have the power to modify such provision, to reduce the scope, activity, duration and/or area of such provision, or to delete specific words or phrases therefrom, and in its reduced or modified form, such provision shall then be enforceable and shall be enforced to the maximum extent permitted by applicable law.

19.Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

20.Settlement of Disputes. All claims by the Executive for benefits under this Agreement shall be directed to and determined by the Chairman of the Board and shall be in writing. Any denial by the Chairman of the Board of a claim for benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the specific provisions of this Agreement relied upon.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

SPECTRA ENERGY CORP

By:____________________________________

Name:

Title:

_______________________________________

EXECUTIVE

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EXHIBIT A

RELEASE OF CLAIMS

        This RELEASE OF CLAIMS (the "Release") is executed and delivered by ________________________ (the "Employee") to SPECTRA ENERGY CORP (together with its successors, the "Company").

In consideration of the agreement by the Company to provide the Employee with the rights, payments and benefits under the Change in Control Agreement between the Employee and the Company dated ___________ __, 20___ (the "Severance Agreement"), the Employee hereby agrees as follows:

Section 1. Release and Covenant. The Employee, of his or her own free will, voluntarily and unconditionally releases and forever discharges the Company, its subsidiaries, parents, affiliates, their directors, officers, employees, agents, stockholders, successors and assigns (both individually and in their official capacities with the Company) (the "Company Releasees") from, any and all past or present causes of action, suits, agreements or other claims which the Employee, his or her dependents, relatives, heirs, executors, administrators, successors and assigns has or may hereafter have from the beginning of time to the date hereof against the Company or the Company Releasees upon or by reason of any matter, cause or thing whatsoever, including, but not limited to, any matters arising out of his or her employment by the Company and the cessation of said employment, and including, but not limited to, any alleged violation of the Civil Rights Acts of 1964 and 1991, the Equal Pay Act of 1963, the Employee Retirement Income Security Act of 1974, the Age Discrimination in Employment Act of 1967, the Rehabilitation Act of 1973, the Older Workers Benefit Protection Act of 1990, the Americans with Disabilities Act of 1990 and any other federal, state or local law, regulation or ordinance, or public policy, contract or tort law having any bearing whatsoever on the terms and conditions of employment or termination of employment. This Release shall not, however, constitute a waiver of any of the Employee's rights under the Severance Agreement.

Section 2. Due Care. The Employee acknowledges that he or she has received a copy of this Release prior to its execution and has been advised hereby of his or her opportunity to review and consider this Release for 21 days prior to its execution. The Employee further acknowledges that he or she has been advised hereby to consult with an attorney prior to executing this Release. The Employee enters into this Release having freely and knowingly elected, after due consideration, to execute this Release and to fulfill the promises set forth herein. This Release shall be revocable by the Employee during the 7-day period following its execution, and shall not become effective or enforceable until the expiration of such 7-day period. In the event of such a revocation, the Employee shall not be entitled to the consideration for this Release set forth above.

Section 3. Nonassignment of Claims; Proceedings. The Employee represents and warrants that there has been no assignment or other transfer of any interest in any claim

20

which the Employee may have against the Company or any of the Company Releasees. The Employee represents that he or she has not commenced or joined in any claim, charge, action or proceeding whatsoever against the Company or any of the Company Releasees arising out of or relating to any of the matters set forth in this Release. The Employee further agrees that he or she will not seek or be entitled to any personal recovery in any claim, charge, action or proceeding whatsoever against the Company or any of the Company Releasees for any of the matters set forth in this Release.

Section 4. Reliance by Employee. The Employee acknowledges that, in his or her decision to enter into this Release, he or she has not relied on any representations, promises or agreements of any kind, including oral statements by representatives of the Company or any of the Company Releasees, except as set forth in this Release and the Severance Agreement.

Section 5. Nonadmission. Nothing contained in this Release will be deemed or construed as an admission of wrongdoing or liability on the part of the Company or any of the Company Releasees.

Section 6. Communication of Safety Concerns. Notwithstanding any other provision of this Agreement, the Employee remains free to report or otherwise communicate any nuclear safety concern, any workplace safety concern, or any public safety concern to the Nuclear Regulatory Commission, United States Department of Labor, or any other appropriate federal or state governmental agency, and the Employee remains free to participate in any federal or state administrative, judicial, or legislative proceeding or investigation with respect to any claims and matters not resolved and terminated pursuant to this Agreement. With respect to any claims and matters resolved and terminated pursuant to this Agreement, the Employee is free to participate in any federal or state administrative, judicial, or legislative proceeding or investigation if subpoenaed. The Employee shall give the Company, through its legal counsel, notice, including a copy of the subpoena, within twenty-four (24) hours of receipt thereof.

Section 7. Governing Law. This Release shall be interpreted, construed and governed according to the laws of the State of Texas, without reference to conflicts of law principles thereof.

Section 8. Severability. It is understood by you and the Company that if any part of this Release of Claims is held by a court to be invalid, the remaining portions shall not be affected.

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This RELEASE OF CLAIMS is executed by the Employee and delivered to the Company on _____________________, 20___.

EMPLOYEE

____________________________________________________

[not to be signed upon execution of Change in Control Agreement]

22

EX-10.4

EXHIBIT 10.4

CHANGE IN CONTROL AGREEMENT

THIS AGREEMENT, dated as of ______________, is made by and between SPECTRA ENERGY CORP, a Delaware corporation (the "Company"), and ________________________________ (the "Executive").

WHEREAS, the Company considers it essential to the best interests of its shareholders to foster the continued employment of key management personnel;

WHEREAS, the Board of Directors of the Company recognizes that, as is the case with many publicly held corporations, the possibility of a Change in Control exists and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its shareholders; and

WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company's management, including the Executive, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change in Control.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Executive, intending to be legally bound, do hereby agree as follows:

1.Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated below:

(A)"Accrued Rights" shall have the meaning set forth in Section 3 hereof.

(B)"Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.

(C)"Auditor" shall have the meaning set forth in Section 4.2 hereof.

(D)"Base Amount" shall have the meaning set forth in Code Section 280G(b)(3).

(E)"Beneficial Ownership" shall have the meaning set forth in Rule 13d‑3 under the Exchange Act.

(F)"Board" shall mean the Board of Directors of the Company.

(G)"Cause" for termination by the Company of the Executive's employment shall mean (i) a material failure by the Executive to carry out, or malfeasance or gross insubordination in carrying out, reasonably assigned duties or

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Canadian CIC Agreement

instructions consistent with the Executive's position, (ii) the final conviction of the Executive of an offence involving moral turpitude, (iii) an egregious act of dishonesty by the Executive (including, without limitation, theft or embezzlement) in connection with employment, or a malicious action by the Executive toward the customers or employees of the Company or any Affiliate, (iv) a material breach by the Executive of the Company's Code of Business Ethics, or (v) the failure of the Executive to cooperate fully with governmental investigations involving the Company or its Affiliates; provided, however, that the Company shall not have reason to terminate the Executive's employment for Cause pursuant to this Agreement unless the Executive receives written notice from the Company identifying the acts or omissions constituting Cause and gives the Executive a thirty (30) day opportunity to cure, if such acts or omissions are capable of cure.

(H)“Change in Control” means:

(a)    Any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) becomes the beneficial owner (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 the Company (the “Outstanding Company CommonStock”) or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding CompanyVoting Securities”); provided, however, that, for purposes of this definition, the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any company controlled by, controlling or under common control with the Company or (iv) any acquisition pursuant to a transaction that complies with Sections (c)(1), (c)(2) and (c)(3) of this definition;

(b)    Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual was a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;

(c)    Consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Company or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or securities of another entity by the Company or any of its subsidiaries (each, a “BusinessCombination”), in each case unless, following such Business Combination, (1) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors (or, for a non-corporate entity, equivalent governing body), as the case may

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Canadian CIC Agreement

be, of the entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (2) no Person (excluding any parent or other entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 30% or more of, respectively, the then-outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) of the entity resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such entity, except to the extent that such ownership existed prior to the Business Combination, and (3) at least a majority of the members of the board of directors (or, for a non-corporate entity, equivalent governing body) of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or

(d)    Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

Notwithstanding anything in the foregoing to the contrary, with respect to compensation (i) that is subject to Code Section 409A and (ii) for which a Change in Control would accelerate the timing of payment thereunder, the term “Change in Control” shall mean a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company, as defined in Code Section 409A and authoritative guidance thereunder, but only to the extent inconsistent with the above definition and as necessary to comply with Code Section 409A as determined by the Company.

(I)"Code" shall mean the Internal Revenue Code of 1986, as amended from time to time.

(J)"Company" shall mean Spectra Energy Corp and, except in determining under Section 1.H hereof whether or not any Change in Control of the Company has occurred, shall include any successor to its business and/or assets which assumes and agrees to perform this Agreement by operation of law, or otherwise.

(K)"Confidential Information" shall have the meaning set forth in Section 8 hereof.

(L)"DB Pension Plan" shall mean any registered, tax-qualified, supplemental or excess defined benefit pension plan maintained by the Company and any other defined benefit plan or agreement entered into between the Executive and the Company which is designed to provide the Executive with supplemental retirement benefits.

(M)"DC Pension Plan" shall mean any registered, tax-qualified, supplemental or excess defined contribution plan maintained by the Company other than an Employee Savings Plan or Executive Share Purchase Plan, and any other defined

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Canadian CIC Agreement

contribution plan or agreement entered into between the Executive and the Company which is designed to provide the executive with supplemental retirement benefits.

(N)"Date of Termination" with respect to any purported termination of the Executive's employment after a Change in Control and during the Term, shall mean (i) if the Executive's employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that the Executive shall not have returned to the full‑time performance of the Executive's duties during such thirty (30) day period), and (ii) if the Executive's employment is terminated for any other reason, the date specified in the Notice of Termination (which, in the case of a termination by the Company, shall not be less than thirty (30) days (except in the case of a termination for Cause) and, in the case of a termination by the Executive, shall not be less than fifteen (15) days nor (without the consent of the Company) more than sixty (60) days, respectively, from the date such Notice of Termination is given). The Executive’s “Date of Termination” shall not be inclusive of any common-law reasonable notice of termination period.

(O)"Disability" shall be deemed the reason for the termination by the Company of the Executive's employment, if, as a result of the Executive's incapacity due to physical or mental illness: (i) the Executive shall have been absent from the full-time performance of the Executive's duties with the Company for a period of six (6) consecutive months (which the parties hereby deem to constitute “undue hardship” to the Company at law); (ii) the Executive shall have qualified for benefits under the Company’s long-term disability program; (iii) the Company shall have given the Executive a Notice of Termination for Disability; and (iv) within thirty (30) days after such Notice of Termination is given, the Executive shall not have returned to the full- time performance of the Executive's duties.

(P)“Employee Savings Plan” means the arrangement maintained by the Company under which eligible employees may contribute defined amounts of pre-tax base salary, a defined portion of which is matched by the Company to purchase common shares of the Company or other investment options.

(Q)"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time.

(R)    "Excise Tax" shall mean any excise tax imposed under Code section 4999.

(S)"Executive" shall mean the individual named in the first paragraph of this Agreement.

(T)“Executive Share Purchase Plan” means the arrangement maintained by the Company under which eligible executive employees may contribute up to a defined level of pre-tax base compensation which is matched by the Company to purchase common shares of the Company.

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Canadian CIC Agreement

(U)"Good Reason" for termination by the Executive of the Executive's employment shall mean the occurrence (without the Executive's express written consent which specifically references this Agreement) after any Change in Control (subject to Section 4.3 hereof) of any one of the following acts by the Company, or failures by the Company to act, unless such act or failure to act is corrected prior to the Date of Termination specified in the Notice of Termination given in respect thereof: (i) the assignment to the Executive of any duties materially inconsistent with the Executive's status with the Company or a substantial adverse alteration in the nature or status of the Executive's responsibilities from those in effect immediately prior to the Change in Control, (ii) a reduction in the Executive's annual base salary as in effect immediately prior to the Change in Control (exclusive of any across the board reduction similarly affecting all or substantially all similarly situated employees determined without regard to whether or not an otherwise similarly situated employee's employment was with the Company prior to the Change in Control), (iii) a reduction in the Executive's target annual bonus as in effect immediately prior to the Change in Control (exclusive of any across the board reduction similarly affecting all or substantially all similarly situated employees determined without regard to whether or not an otherwise similarly situated employee's employment was with the Company prior to the Change in Control), (iv) the elimination of any material employee benefit plan in which the Executive is participating immediately prior to the Change in Control, or the material reduction of the Executive’s benefits under any such plan, unless the Company either (A) immediately replaces such employee benefit plan, or unless the Executive is permitted to immediately participate in other employee benefit plan(s), providing the Executive with a substantially equivalent value of benefits in the aggregate to those eliminated or materially reduced (it being understood that any such replacement plan or benefit need not be an identical “type” of plan or benefit as that being eliminated or reduced in order for “Good Reason” not to be triggered by this subsection (iv), as long as the aggregate value of such replacement plan(s) or benefit to the Executive is substantially equivalent to that being eliminated or reduced), or (B) immediately provides the Executive with other forms of compensation of comparable value to that being eliminated or reduced (including but not limited to increases in the Executive’s base salary or other cash compensation), (v) the failure of the Company to obtain the assumption of this Agreement from any successor as contemplated in Section 11.1 hereof, or (vi) a relocation that requires the Executive to report to a work location 60 kilometers or more from the work location to which he was assigned prior to the change-in-control and the Executive does not consent to the relocation.

The Executive's continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder.

(V) “ITA” shall mean the Income Tax Act (Canada)

(W)"Notice of Termination" shall have the meaning set forth in Section 5 hereof.

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Canadian CIC Agreement

(X)"Person" shall have the meaning given in section 3(a)(9) of the Exchange Act, as modified and used in sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company.

(Y)"Repayment Amount" shall have the meaning set forth in Section 7.3 hereof.

(Z)"Restricted Period" shall have the meaning set forth in Section 7.2 hereof.

(AA)“Separation from Service” shall have the meaning provided under Code Section 409A.

(BB)"Severance Payments" shall have the meaning set forth in Section 4.1(C) hereof.

(CC)"Severance Period" shall have the meaning set forth in Section 4.1(C) hereof.

(DD)“Specified Employee” shall have the meaning provided under Code Section 409A.

(EE)"Subsidiary" means an entity that is wholly owned, directly or indirectly, by the Company, or any other affiliate of the Company that is so designated from time to time by the Company.

(FF)"Term" shall mean the period of time described in Section 2 hereof (including any extension, continuation or termination described therein).

(GG)"Total Payments" shall mean those payments so described in Section 4.2 hereof.

(HH)“US Taxpayer” shall mean an individual who is subject to United States federal excise tax or income tax with respect to any portion of an entitlement under this Agreement.

2.Term of Agreement. The Term of this Agreement shall commence on the date hereof and shall continue in effect through the second anniversary of the date hereof; provided, however, that commencing on the date that is twelve (12) months following the date hereof and each subsequent anniversary of the date hereof, the Term shall automatically be extended for one additional year; furtherprovided, however, the Company or the Executive may terminate this Agreement effective at any time following the second anniversary of the date hereof only with six (6) months advance written notice

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Canadian CIC Agreement

(which such notice may be given before such second anniversary); and furtherprovided, however, that, notwithstanding the above, if a Change in Control shall have occurred during the Term, the Term shall in no case expire earlier than twenty‑four (24) months beyond the month in which such Change in Control occurred.

This Agreement supersedes any prior Change in Control Agreement between the Company and the Executive in its entirety.

3.Compensation Other Than Severance Payments. If the Executive's employment shall be terminated for any reason following a Change in Control (subject to Section 4.3 hereof) and during the Term, then the Company shall (i) pay the Executive the salary amounts payable in the normal course for service through the Date of Termination, (ii) grant any rights or payments that have become vested or that are otherwise due in accordance with the terms of any employee benefit, incentive, or compensation plan or arrangement maintained by the Company that the Executive participated in at the time of his or her termination of employment, and (iii) provide any other right or payment the Executive is required to receive under Canadian minimum pension or employment standards legislation (together, the "Accrued Rights").

4.Severance Payments.

4.1Subject to Sections 4.2 and 4.3 hereof, and further subject to the Executive executing and not revoking a release of claims substantially in the form set forth as Exhibit A to this Agreement, if the Executive's employment is terminated following a Change in Control and during the Term (but in any event not later than twenty-four (24) months following a Change in Control), other than (A) by the Company for Cause, (B) by reason of death or Disability, or (C) by the Executive without Good Reason, then, in any such case, in addition to the payments and benefits representing the Executive's Accrued Rights, the Company shall pay the Executive the amounts, and provide the Executive the benefits, described in this Section 4.1 ("Severance Payments").

(A)A lump-sum payment equal to (i) the Executive's annual bonus payment earned for any completed bonus year prior to termination of employment, if not previously paid, plus (ii) a pro-rata amount of the Executive's target bonus under any performance-based bonus plan, program, or arrangement in which the Executive participates for the year in which the termination occurs, determined as if all program goals had been met, pro-rated based on the number of days of service during the bonus year occurring prior to termination of employment;

(B)In lieu of any severance benefit otherwise payable to the Executive, the Company shall pay to the Executive, a lump sum severance payment, in cash, equal to two (or, if less, the number of years (including partial years) until the Executive attains the normal retirement date for purposes of a DB Pension Plan or DC Pension Plan) multiplied by the sum of (i) the Executive's annualbase salary as in effect immediately prior to the Date of Termination or, if

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higher, as in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason, (ii) the Executive’s target short-term incentive bonus opportunity for the fiscal year in which the Date of Termination occurs or, if higher, the fiscal year in which the first event or circumstance occurs constituting Good Reason, and (iii) the amount of the Company matching contribution that would be made to the Executive Share Purchase Plan or Employee Savings Plan, if any, determined as if the Executive had continued to make contributions thereunder at the rate of contribution being made by the Executive in the month coincident with or immediately preceding the month in which the Date of Termination occurs. Notwithstanding the preceding sentence, if the Executive is, or becomes a US Taxpayer and in the event that a lump sum Severance Payment would constitute a change in the form or timing of any payment that is subject to, and not exempt under, Code Section 409A with respect to any severance benefit otherwise payable to the Executive under any other plan or arrangement, then the portion of the Severance Payment that is equal to the amount payable under such other severance plan shall be payable in the form and at the time applicable under such other severance plan, and any excess Severance Payment, as determined under this Section 4.1(B), shall be paid in a lump sum in accordance with this Section 4.1.

(C)The Company shall pay to the Executive a lump-sum in an amount estimated by an actuary retained by the Company to be equivalent to the premium cost to the Company to maintain for a period of two years immediately following the Date of Termination (or, if less, the period until the Executive attains the normal retirement date for purposes of a DB Pension Plan or DC Pension Plan) (the "Severance Period") medical, dental, and basic life insurance benefits substantially similar to those provided to the Executive and his or her eligible dependents immediately prior to the Date of Termination, or, if more valuable in the aggregate, to those provided immediately prior to the first occurrence of an event or circumstance constituting Good Reason.

(D)In addition to the benefits to which the Executive is entitled under the DC Pension Plan, the Company shall pay the Executive a lump sum amount, in cash, equal to the sum of (i) the amount that would have been contributed thereto by the Company on the Executive's behalf during the Severance Period, less any amount actually contributed thereto by the Company in respect of the Executive during the Severance Period, determined (a) as if the Executive made the maximum permissible contributions thereto during such period, (b) as if the Executive earned compensation during such period equal to the sum of the Executive's base salary and target bonus as in effect immediately prior to the Date of Termination, or, if higher, as in effect immediately prior to the occurrence of the first event or circumstance constituting Good Reason, and (c) without regard to any amendment to the DC Pension Plan made subsequent to a Change in Control and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of benefits thereunder, and (ii) the unvested portion, if any, of the Executive's account balance under the tax-

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Canadian CIC Agreement

qualified DC Pension Plan as of the Date of Termination that would have vested had Executive remained employed by the Company for the remainder of the Term. In addition, the unvested portion, if any, of the Executive’s account balances under registered, non-registered and non-tax-qualified DC Pension Plans as of the Date of Termination that would have vested had Executive remained employed by the Company for the remainder of the Term shall be fully vested as of the Date of Termination and shall be paid out in accordance with the terms of the applicable DC Pension Plan.

(E)In addition to the benefits to which the Executive is entitled under the DB Pension Plan, the Company shall pay to or in respect of the Executive a lump sum amount, in cash, equal to the sum of (i) the commuted value of the benefit that would have accrued during the Severance Period, less the commuted value of the benefit, if any, accrued under a DB Pension Plan in respect of the Severance Period, as determined by an actuary appointed by the Company and further determined (a) as if the Executive earned compensation during such period equal to the sum of the Executive's base salary and target bonus as in effect immediately prior to the Date of Termination, or, if higher, as in effect immediately prior to the occurrence of the first event or circumstance constituting Good Reason, and (b) without regard to any amendment to the DB Pension Plan made subsequent to a Change in Control and on or prior to the Date of Termination, which amendment adversely affects in any manner the computation of benefits thereunder, and (ii) the Executive's unvested accrued benefit, if any, under the tax-qualified DB Pension Plan as of the Date of Termination that would have vested had Executive remained employed by the Company for the remainder of the Term. In addition, the unvested portion, if any, of the Executive’s account balances under the registered and non-registered DB Pension Plans as of the Date of Termination that would have vested had Executive remained employed by the Company for the remainder of the Term shall be fully vested as of the Date of Termination and shall be paid out in accordance with the terms of the applicable DB Pension Plan.

(F)    Subject to the last sentence in this section 4.1(F), notwithstanding the terms of any award agreement or plan document to the contrary, the Executive shall be entitled to receive continued vesting of any long term incentive awards, including awards of stock options but excluding awards of restricted stock and phantom stock, held by the Executive at the time of his or her termination of employment that are not vested or exercisable on such date, in accordance with their terms as if the Executive’s employment had not terminated, for the duration of the Severance Period, with any options or similar rights to remain exercisable (to the extent exercisable at the end of the Severance Period) for a period of 90 days following the close of the Severance Period, but not beyond the maximum original term of such options or rights. However, if, at the time of his severance under the terms of this agreement the Executive has attained an age of 55 years and has at least 3 years of service, nothing in this section 4.1(F) shall truncate either the vesting period or the exercise period associated with an

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award. In the event that the terms of any award agreement or plan document, or the actions of the Board in connection with a Change in Control, would provide the Executive with greater benefits with respect to Executive’s awards than those set forth in this paragraph (for example and without limitation, full accelerated vesting of awards upon a Change in Control, a longer post-termination exercise period, lapse of restrictions on restricted stock, and/or other benefits in excess of or to a greater extent than those provided for in this paragraph with respect to any of Executive’s awards), then the terms and conditions of any such award agreement, plan document or Board action (as the case may be), but only to the extent of such greater benefits, shall apply to such award, and nothing in this Agreement shall be deemed to provide for or require the benefits only to the extent provided in the first two sentences of this Section 4.1(F).

Except where otherwise expressly specified to the contrary under this Agreement, all lump sum payments under this Section 4.1 shall be paid within the sixty (60) day period immediately following the Executive’s Separation from Service, but only if the Executive has executed by such date as the Company may prescribe (which date shall in no event be later than the 50th day following the Executive’s Separation from Service) and not revoked the release of claims in accordance with the first paragraph of this Section 4.1. If the payment period described in the immediately preceding sentence begins in one taxable year and ends in another taxable year, payments described herein shall be made in the second taxable year.

If the Executive is or becomes a US Taxpayer and is a Specified Employee on the date of his Separation from Service, any such payment (other than payments under Section 4.1(A)) that the Executive would otherwise be entitled to receive during the first six months following the Executive’s Separation from Service shall be accumulated and paid within fifteen (15) business days after the date that is six months following the Executive’s Separation from Service, or if earlier on the first day of the month following Executive’s death. The preceding sentence shall not apply if payments are being made to the Executive upon a Change in Control pursuant to Section 4.3.

4.2    (A) Notwithstanding any other provisions of this Agreement, in the event that any payment or benefit received or to be received by the Executive (including any payment or benefit received in connection with a Change in Control or the termination of the Executive's employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement) (all such payments and benefits, including the Severance Payments, being hereinafter referred to as the "Total Payments") would be subject (in whole or part), to the Excise Tax, then, after taking into account any reduction in the Total Payments provided by reason of Code section 280G in such other plan, arrangement or agreement, the cash Severance Payments shall first be reduced, and the noncash Severance Payments shall thereafter be reduced, to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax but only if (i) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is greater than or equal to (ii) the net amount of such Total

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Canadian CIC Agreement

Payments without such reduction (but after subtracting the net amount of United States federal, state and local income taxes on such Total Payments and the amount of Excise Tax to which the Executive would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).

(B)    For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax, (i) no portion of the Total Payments the receipt or enjoyment of which the Executive shall have waived at such time and in such manner as not to constitute a "payment" within the meaning of Code Section 280G(b) shall be taken into account, (ii) no portion of the Total Payments shall be taken into account which, in the opinion of tax counsel ("Tax Counsel") who is reasonably acceptable to the Executive and selected by the accounting firm (the "Auditor") which was, immediately prior to the Change in Control, the Company's independent auditor, doesnotconstitutea"parachutepayment"withinthemeaningofCodeSection280G(b)(2) (including by reason of Code Section 280G(b)(4)(A)) and, in calculating the Excise Tax, no portion of such Total Payments shall be taken into account which, in the opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within the meaning of Code Section 280G(b)(4)(B), in excess of the Base Amount allocable to such reasonable compensation, and (iii) the value of any non‑cash benefit or any deferred payment or benefit included in the Total Payments shall be determined by the Auditor in accordance with the principles of Code Sections 280G(d)(3) and (4).

(C)    At the time that payments are made under this Agreement, the Company shall provide the Executive with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from Tax Counsel, the Auditor or other advisors or consultants (and any such opinions or advice which are in writing shall be attached to the statement).

(D)    For greater certainty, the Executive shall not be entitled to receive any benefit or amount that constitutes a reduction or elimination of the Total Payment.

4.3    Notwithstanding anything in this Agreement to the contrary, if (i) Executive’s employment is terminated prior to a Change in Control but after the Company and/or a third party have taken affirmative steps reasonably calculated to effectuate a Change in Control, (ii) such termination is a termination by the Company without Cause, or by the Executive for reasons that would have constituted Good Reason had they occurred following a Change in Control, and the event or actions taken by the Company in connection with such termination have been taken at the request or suggestion of such third party, and (iii) a Change in Control involving such third party (or a party competing with such third party to effectuate a Change in Control) does in fact occur, then for purposes of this Agreement, the date immediately prior to the date of such termination shall be treated as a Change in Control. For purposes of determining the timing of payments and benefits to the Executive under this Agreement in such event, the date of the actual Change in Control shall be treated as the date of the Executive’s Separation from Service and for purposes of determining the amount of payments and

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Canadian CIC Agreement

benefits to the Executive under this Section 4, the date Executive’s employment is actually terminated shall be treated as the Executive’s Date of Termination under Section 1(N).

5.Notice of Termination. After a Change in Control and during the Term, any purported termination of the Executive's employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 12 hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon.

6.No Mitigation. The Company agrees that, if the Executive's employment with the Company terminates during the Term, the Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Company pursuant to Section 4 hereof. Further, except as specifically provided in Section 4.1(C) hereof, no payment or benefit provided for in this Agreement shall be reduced by any compensation earned by the Executive as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive to the Company, or otherwise.

7.Restrictive Covenants.

7.1Noncompetition and Nonsolicitation. During the Restricted Period (as defined below), the Executive agrees that he or she shall not, without the Company's prior written consent, for any reason, directly or indirectly, either as principal, agent, manager, employee, partner, shareholder, director, officer, consultant or otherwise (A) become engaged or involved in any business (other than as a less-than three percent (3%) equity owner of any corporation traded on any national, international or regional stock exchange or in the over-the-counter market) that competes with the Company or any of its Affiliates in the business of gathering, processing, distribution, storage or transmission of natural gas, resale or arranging for the purchase or for the resale, brokering, marketing, or trading of natural gas, or derivatives thereof; energy management and the provision of energy solutions; gathering, compression, treating, processing, fractionation, transportation, trading, marketing of natural gas components, including natural gas liquids; and sales and marketing of natural gas, domestically and abroad; and any other business in which the Company, including Affiliates, is engaged at the termination of the Executive's continuous employment by the Company, including Affiliates; or (B) induce or attempt to induce any customer, client, supplier, employee, agent or independent contractor of the Company or any of its Affiliates to reduce, terminate, restrict or otherwise alter its business relationship with the Company or its Affiliates. The provisions of this Section 7.1 shall be limited in scope and effective only within the following geographical areas: (i) any country in the world where the Company, including Affiliates, has at least US$25 million in capital deployed as of termination of the Executive's continuous employment by Company, including Affiliates; (ii) the continent of North America; (iii) the United States of America and Canada; (iv) the United States of America; (v) the states of Florida, Texas, California, Massachusetts, Illinois, Michigan, New York, Colorado, Oklahoma, Ohio, Kentucky, Indiana,

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Canadian CIC Agreement

Pennsylvania, Connecticut and Louisiana; (vi) the states of Texas, Colorado, Massachusetts, Louisiana, Pennsylvania, and Connecticut and (vii) any state or states with respect to which was conducted a business of the Company, including Affiliates, which business constituted a substantial portion of the Executive's employment. The parties intend the above geographical areas to be completely severable and independent, and any invalidity or unenforceability of this Agreement with respect to any one area shall not render this Agreement unenforceable as applied to any one or more of the other areas. Nothing in Section 7.1 shall be construed to prohibit the Executive being retained during the Restricted Period in a capacity as an attorney licensed to practice law, or to restrict the Executive providing advice and counsel in such capacity, in any jurisdiction where such prohibition or restriction is contrary to law.

7.2Restricted Period. For purposes of this Agreement, "Restricted Period" shall mean the period of the Executive's employment during the Term and, in the event of a termination of the Employee's employment following a Change in Control that entitles Executive to Severance Payments covered by Section 4 hereof, the twelve (12) month period following such termination of employment, commencing from the Date of Termination.

7.3Forfeiture and Repayments. The Executive agrees that, in the event he or she violates the provisions of Section 7 hereof during the Restricted Period, he or she will forfeit and not be entitled to any Severance Payments or any non-cash benefits or rights under this Agreement (including, without limitation, stock option rights), other than the payments provided under Section 3 hereof. The Executive further agrees that, in the event he or she violates the provisions of Section 7 hereof following the payment or commencement of any Severance Payments, (A) he or she will forfeit and not be entitled to any further Severance Payments, and (B) he or she will be obligated to repay to the Company an amount in respect of the Severance Payments previously made to him or her under Section 4 hereof (the "Repayment Amount"). The Repayment Amount shall be determined by aggregating the cash Severance Payments made to the Executive and multiplying the resulting amount by a fraction, the numerator of which is the number of full and partial calendar months remaining in the Severance Period at the time of the violation (rounded to the nearest quarter of a month), and the denominator of which is twenty-four (24). The Repayment Amount shall be paid to the Company in cash in a single sum within ten (10) business days after the first date of the violation, whether or not the Company has knowledge of the violation or has made a demand for payment. Any such payment made following such violation shall bear interest daily from the date of violation to the date of payment at a rate that shall vary in tandem with variances in the “prime lending rate” published from time to time by Citibank, N.A. plus 1%. Furthermore, in the event the Executive violates the provisions of Section 7 hereof, and notwithstanding the terms of any award agreement or plan document that is not a registered pension plan to the contrary (which, other than a registered pension plan, shall be considered to be amended to the extent necessary to reflect the terms hereof), the Executive shall immediately forfeit the right to exercise any stock option or similar rights that are outstanding at the time of the violation, and the Repayment Amount, calculated as provided above, shall be increased by the amount of any gains (measured by the

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Canadian CIC Agreement

difference between the aggregate fair market value on the date of exercise of shares underlying the stock option or similar right (including without limitation restricted stock, restricted stock units, performance shares and phantom stock units) and the aggregate exercise price (if any) of such stock option or similar right) realized by the Executive upon the exercise or payment of such stock options or similar rights within the one-year period prior to the first date of the violation.

7.4Permissive Release. The Executive may request that the Company release him or her from the restrictive covenants of Section 7.1 hereof upon the condition that the Executive forfeit and repay all termination benefits and rights provided for in Section 4.1 hereof. The Company may, in its sole discretion, grant such a release in whole or in part or may reject such request and continue to enforce its rights under this Section 7.

7.5Consideration; Survival. The Executive acknowledges and agrees that the compensation and benefits provided in this Agreement constitute adequate and sufficient consideration for the covenants made by the Executive in this Section 7 and in the remainder of this Agreement. As further consideration for the covenants made by the Executive in this Section 7 and in the remainder of this Agreement, the Company has provided and will provide the Executive certain proprietary and other confidential information about the Company, including, but not limited to, business plans and strategies, budgets and budgetary projections, income and earnings projections and statements, cost analyses and assessments, and/or business assessments of legal and regulatory issues. The Executive's obligations under this Section 7 shall survive any termination of his or her employment as specified herein.

8.Confidentiality. The Executive acknowledges that during the Executive's employment with the Company or any of its Affiliates, the Executive will acquire, be exposed to and have access to, non-public material, data and information of the Company and its Affiliates and/or their customers or clients that is confidential, proprietary, and/or a trade secret ("Confidential Information"). At all times, both during and after the Term, the Executive shall keep and retain in confidence and shall not disclose, except as required and authorized in the course of the Executive's employment with the Company or any its Affiliates, to any person, firm or corporation, or use for his or her own purposes, any Confidential Information. For purposes of this Agreement, such Confidential Information shall include, but shall not be limited to: sales methods, information concerning principals or customers, advertising methods, financial affairs or methods of procurement, marketing and business plans, strategies (including risk strategies), projections, business opportunities, inventions, designs, drawings, research and development plans, client lists, sales and cost information and financial results and performance. Notwithstanding the foregoing, "Confidential Information" shall not include any information known generally to the public (other than as a result of unauthorized disclosure by the Executive or by the Company or its Affiliates). The Executive acknowledges that the obligations pertaining to the confidentiality and non-disclosure of Confidential Information shall remain in effect for a period of five (5) years after termination of employment, or until the Company or its Affiliates has released any

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Canadian CIC Agreement

such information into the public domain, in which case the Executive's obligation hereunder shall cease with respect only to such information so released into the public domain; provided, however, with respect to those items of Confidential Information which constitute a trade secret as defined by the applicable laws governing the protection of trade secrets of the Company, the Executive’s obligation of confidentiality shall continue to survive after the 5-year period to the greatest extent permitted by applicable trade secret law. The Executive's obligations under this Section 8 shall survive any termination of his or her employment. If the Executive receives a subpoena or other judicial or governmental process requiring that he or she produce, provide or testify about Confidential Information, the Executive shall notify the Company and cooperate fully with the Company in resisting disclosure of the Confidential Information. The Executive acknowledges that the Company has the right either in the name of the Executive or in its own name to oppose or move to quash any subpoena or other legal process directed to the Executive regarding Confidential Information. Notwithstanding any other provision of this Agreement, the Executive remains free to report or otherwise communicate any nuclear safety concern, any workplace safety concern, or any public safety concern to the United States Department of Labor or to any other appropriate Canadian or United States federal, state or provincial governmental agency, and the Executive remains free to participate in any Canadian or United States federal, provincial or state administrative, judicial, or legislative proceeding or investigation with respect to any claims and matters not resolved and terminated pursuant to this Agreement. With respect to any claims and matters resolved and terminated pursuant to this Agreement, the Executive is free to participate in any Canadian or United States federal, state or provincial administrative, judicial, or legislative proceeding or investigation if subpoenaed. The Executive shall give the Company, through its legal counsel, notice, including a copy of the subpoena, within twenty-four (24) hours of receipt thereof.

9.Return of Company Property. All records, files, lists, including, computer generated lists, drawings, documents, equipment and similar items relating to the business of the Company and its Affiliates which the Executive shall prepare or receive from the Company or its Affiliates shall remain the sole and exclusive property of Company and its Affiliates. Upon termination of the Executive's employment for any reason, the Executive shall promptly return all property of Company or any its Affiliates in his or her possession. The Executive further represents that he or she will not copy or cause to be copied, print out or cause to be printed out any software, documents or other materials originating with or belonging to the Company or any of its Affiliates.

10.Acknowledgement and Enforcement. The Executive acknowledges that the restrictions contained in this Agreement with regards to the Executive's use of Confidential Information and his or her future business activities are fair, reasonable and necessary to protect the Company's legitimate protectable interests, particularly given the competitive nature and broad scope of the Company's business and that of its Affiliates, as well as the Executive's position with the Company. The Executive further acknowledges that the Company may have no adequate means to protect its rights under this Agreement other than by securing an injunction (a court order prohibiting the Executive from violating this Agreement). The Executive therefore agrees that the

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Canadian CIC Agreement

Company, in addition to any other right or remedy it may have, shall be entitled to enforce this Agreement by obtaining a preliminary and permanent injunction and any other appropriate equitable relief in any court of competent jurisdiction. The Executive acknowledges that the recovery of damages will not be an adequate means to redress a breach of this Agreement, but nothing in this Section 10 shall prohibit the Company from pursuing any remedies in addition to injunctive relief, including recovery of damages and/or any forfeiture or repayment obligations provided for herein.

11.Successors; Binding Agreement.

11.1In addition to any obligations imposed by law upon any successor to the Company, the Company will require that any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such assumption and agreement to perform this Agreement prior to the effectiveness of any Change in Control shall be a breach of this Agreement and shall constitute Good Reason hereunder. For purposes of implementing the foregoing, the date on which any such Change in Control becomes effective shall be deemed the date Good Reason occurs, and shall be the Date of Termination if requested by the Executive.

11.2This Agreement shall inure to the benefit of and be enforceable by the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amount would still be payable to the Executive hereunder (other than amounts which, by their terms, terminate upon the death of the Executive) if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of the Executive's estate.

12.Notices. All notices or other communications hereunder shall be in writing and shall be deemed to have been duly given (a) when delivered personally, (b) upon confirmation of receipt when such notice or other communication is sent by facsimile, (c) one day after timely delivery to an overnight delivery courier, or (d) when delivered or mailed by Canadian or United States registered mail, return receipt requested, postage prepaid. Such notices shall be directed, in the case of the Company, to the Company's chief legal officer at the principal executive offices of the Company and, in the case of the Executive, to the Executive at the most recent address on file in the payroll records of the Company. Either party hereto may, by notice to the other, change its address for receipt of notices hereunder.

13.Unintended Tax Consequences It is the intention of the Company and the Executive that this Agreement is written and administered, and will be interpreted and construed, in a manner such that no amount under this Agreement becomes subject to (a) gross income inclusion under Code Section 409A, (b) interest and additional tax under

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Canadian CIC Agreement

Code Section 409A (collectively, “Section 409A Penalties”), including, where appropriate, the construction of defined terms to have meanings that would not cause the imposition of the Section 409A Penalties, (c) taxation as a “salary deferral arrangement” “debt obligation” or similar arrangement requiring amounts accrued in any year hereunder for the period the Executive is employed by the Company to be included in current income for that period for tax purposes under the ITA. Accordingly, the Executive consents to any amendment of this Agreement as the Company may reasonably make in furtherance of such intention, and the Company shall promptly provide, or make available to, the Executive a copy of such amendment. Further, to the extent that any terms of the Agreement are ambiguous, such terms shall be interpreted as necessary to comply with Code Section 409A.

14.Miscellaneous. Except as otherwise provided in Section 13 hereof, no provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and the Chairman of the Board (or such officer as may be specifically designated by the Chairman of the Board). No waiver by either party hereto at any time of any breach by the other party hereto of, or of any lack of compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. This Agreement supersedes any other agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof which have been made by either party or Duke Energy provided, however, that this Agreement shall supersede any agreement setting forth the terms and conditions of the Executive's employment with the Company only in the event that the Executive's employment with the Company is terminated on or within two years following a Change in Control, by the Company other than for Cause or by the Executive for Good Reason or under the circumstances described in Section 4.3. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the Province of Ontario and the laws of Canada applicable therein. All references to sections or provisions of the Exchange Act, the Code or the ITA shall be deemed also to refer to any successor provisions to such sections or provisions. Any payments provided for hereunder shall be paid net of any withholding required under applicable law and any additional withholding to which the Executive has agreed and no such payments shall be treated as creditable compensation under any other employee benefit plan, program, arrangement or agreement of or with the Company or its affiliates, except as expressly required by minimum standards law. The obligations of the Company and the Executive under this Agreement which by their nature may require either partial or total performance after the expiration of the Term (including, without limitation, those under Section 4 hereof) shall survive such expiration.

15.Certain Legal Fees. To provide the Executive with reasonable assurance that the purposes of this Agreement will not be frustrated by the cost of enforcement, the Company shall reimburse the Executive promptly after receipt of an invoice for reasonable lawyers' fees and expenses incurred by the Executive as a result of a claim that the Company has breached or otherwise failed to perform its obligations

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Canadian CIC Agreement

under this Agreement or any provision hereof, regardless of which party, if any, prevails in the contest; provided, however, that Company shall not be responsible for such fees and expenses to the extent incurred in connection with a claim made by the Executive that the trier of fact in any such contest finds to be frivolous or if the Executive is determined to have breached his or her obligations under Sections 7, 8, 9, 16, or 17 of this Agreement; and providedfurther, however, the Company shall not be responsible for such fees or expenses in excess of $50,000 in the aggregate. Notwithstanding the preceding sentence, no reimbursement shall be made for lawyers’ fees and expenses incurred after the last day of the second taxable year of the Executive following the taxable year in which the Executive incurs a Separation from Service and reimbursement of such amounts will not be made later than the last day of the third taxable year of the Executive following the taxable year in which the Executive incurs the Separation from Service. The Company will also reimburse the Executive for lawyer’s fees and expenses incurred to provide advice in connection with entering into this Agreement to a maximum of $5,000 in the aggregate, upon receipt of an invoice or other supporting document.

16.Cooperation. The Executive agrees that he or she will fully cooperate in any litigation, proceeding, investigation or inquiry in which the Company or its Affiliates may be or become involved. The Executive also agrees to cooperate fully with any internal investigation or inquiry conducted by or on behalf of the Company. Such cooperation shall include the Executive making himself or herself available, upon the request of the Company or its counsel, for depositions, court appearances and interviews by Company's counsel. The Company shall reimburse the Executive for all reasonable and documented out-of-pocket expenses incurred by him or her in connection with such cooperation. To the maximum extent permitted by law, the Executive agrees that he or she will notify the Board if he or she is contacted by any government agency or any other person contemplating or maintaining any claim or legal action against the Company or its Affiliates or by any agent or attorney of such person. Nothing contained in this Section 16 shall preclude the Executive from providing truthful testimony in response to a valid subpoena, court order, regulatory request or as may be required by law. Payment for expenses to be reimbursed under this Section 16 may not be made after December 31st of the year following the year in which the expense was incurred.

17.Non-Disparagement. The Executive agrees that he or she will not make or publish, or cause to be made or published, any statement which is, or may reasonably be considered to be, disparaging of the Company or its Affiliates, or directors, officers or employees of the businesses of the Company or its Affiliates. Nothing contained in this Section 17 shall preclude the Executive from providing truthful testimony in response to a valid subpoena, court order, regulatory request or as may be required by law.

18.Validity; Severability. The invalidity or unenforceability of any provision of any Section or sub-Section of this Agreement, including, but not limited to, any provision contained in Section 7 hereof, shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. If any provision of this Agreement is held to be unenforceable because of the scope, activity

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Canadian CIC Agreement

or duration of such provision, or the area covered thereby, the parties hereto agree to modify such provision, or that the court making such determination shall have the power to modify such provision, to reduce the scope, activity, duration and/or area of such provision, or to delete specific words or phrases therefrom, and in its reduced or modified form, such provision shall then be enforceable and shall be enforced to the maximum extent permitted by applicable law.

19.Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

20.Settlement of Disputes. Prior to any legal proceeding or civil action by the Executive in respect of this Agreement, all claims by the Executive for payments or benefits under this Agreement shall be directed to and determined by the Chairman of the Board and shall be in writing. Any denial by the Chairman of the Board of a claim for payments or benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the specific provisions of this Agreement relied upon.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

SPECTRA ENERGY CORP

By: ___________________________________

Name:

Title:

_______________________________________

EXECUTIVE

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Canadian CIC Agreement

EXHIBIT A

RELEASE OF CLAIMS

        This RELEASE OF CLAIMS (the "Release") is executed and delivered by ________________________ (the "Employee") to SPECTRA ENERGY CORP (together with its successors, the "Company").

In consideration of the agreement by the Company to provide the Employee with the rights, payments and benefits under the Change in Control Agreement between the Employee and the Company dated ___________ __, 20___ (the "Severance Agreement"), the Employee hereby agrees as follows:

Section 1. Release and Covenant. The Employee, of his or her own free will, voluntarily and unconditionally releases and forever discharges the Company, its subsidiaries, parents, affiliates, their directors, officers, employees, agents, stockholders, successors and assigns (both individually and in their official capacities with the Company) (the "Company Releasees") from, any and all past or present causes of action, suits, agreements or other claims which the Employee, his or her dependents, relatives, heirs, executors, administrators, successors and assigns has or may hereafter have from the beginning of time to the date hereof against the Company or the Company Releasees upon or by reason of any matter, cause or thing whatsoever, including, but not limited to, any matters arising out of his or her employment by the Company, the cessation of said employment and any employment contract/benefits policy with the Company, and including, but not limited to, any alleged violation of applicable Canadian or United States federal, state, provincial or local law (including but not limited to human rights legislation, pension legislation and employment standards legislation), regulation or ordinance, or public policy, contract or tort law having any bearing whatsoever on the terms and conditions of employment or termination of employment and, without limiting the generality of the foregoing, any claims, applications, causes of action, complaints, demands or proceedings related to salary, wages, bonus, commissions, benefits, pension, deferredincome,perquisites,incentivecompensation,equitycompensation,stock options, holiday pay, sick pay, overtime pay, termination pay, vacation pay, severance pay, compensation in lieu of notice, damages, damages for wrongful/constructive dismissal, reinstatement of employment, This Release shall not, however, constitute a waiver of any of the Employee's rights under the Change of Control Agreement.

Section 2. Due Care. The Employee acknowledges that he or she has received a copy of this Release prior to its execution and has been advised hereby of his or her opportunity to review and consider this Release for 21 days prior to its execution. The Employee further acknowledges that he or she has been advised hereby to consult with a lawyer prior to executing this Release. The Employee enters into this Release having freely and knowingly elected, after due consideration, to execute this Release and to fulfill the promises set forth herein. This Release shall be revocable by the Employee during the 7-day period following its execution, and shall not become effective or

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Canadian CIC Agreement

enforceable until the expiration of such 7-day period. In the event of such a revocation, the Employee shall not be entitled to the consideration for this Release set forth above.

Section 3. Nonassignment of Claims; Proceedings. The Employee represents and warrants that there has been no assignment or other transfer of any interest in any claim which the Employee may have against the Company or any of the Company Releasees. The Employee represents that he or she has not commenced or joined in any claim, charge, action or proceeding whatsoever against the Company or any of the Company Releasees arising out of or relating to any of the matters set forth in this Release. The Employee further agrees that he or she will not seek or be entitled to any personal recovery in any claim, charge, action or proceeding whatsoever against the Company or any of the Company Releasees for any of the matters set forth in this Release.

Section 4. Reliance by Employee. The Employee acknowledges that, in his or her decision to enter into this Release, he or she has not relied on any representations, promises or agreements of any kind, including oral statements by representatives of the Company or any of the Company Releasees, except as set forth in this Release and the Change of Control Agreement.

Section 5. Nonadmission. Nothing contained in this Release will be deemed or construed as an admission of wrongdoing or liability on the part of the Company or any of the Company Releasees.

Section 6. Communication of Safety Concerns. Notwithstanding any other provision of this Agreement, the Employee remains free to report or otherwise communicate any nuclear safety concern, any workplace safety concern, or any public safety concern to the Nuclear Regulatory Commission, United States Department of Labor, or any other appropriate United States or Canadian federal, provincial or state governmental agency, and the Employee remains free to participate in any such governmental, administrative, judicial, or legislative proceeding or investigation with respect to any claims and matters not resolved and terminated pursuant to this Agreement. With respect to any claims and matters resolved and terminated pursuant to this Agreement, the Employee is free to participate in any governmental, administrative, judicial, or legislative proceeding or investigation if subpoenaed. The Employee shall give the Company, through its legal counsel, notice, including a copy of the subpoena, within twenty-four (24) hours of receipt thereof.

Section 7. Governing Law. This Release shall be interpreted, construed and governed according to the laws of the Province of Ontario and the laws of Canada applicable therein.

Section 8. Severability. It is understood by you and the Company that if any part of this Release of Claims is held by a court to be invalid, the remaining portions shall not be affected.

	21
Canadian CIC Agreement

This RELEASE OF CLAIMS is executed by the Employee and delivered to the Company on _____________________, 20___.

EMPLOYEE

____________________________________________________

[not to be signed upon execution of Change in Control Agreement]

	22
Canadian CIC Agreement

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 7, 2014	/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 7, 2014	/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, 2014 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 7, 2014	/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, 2014 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 7, 2014	/s/    J. Patrick Reddy
	J. Patrick Reddy
	Chief Financial Officer

XML

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

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

The following presents changes in Level 3 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,
	2014			2013		2014			2013
	(in millions)
Derivative liabilities
Fair value, beginning of period	$	5		$	6	$	3		$	9
Total realized/unrealized losses (gains):
Included in earnings	5			—		9			1
Included in other comprehensive income	(1		)	—		(4		)	(4		)
Settlements	—			—		1			—
Fair value, end of period	$	9		$	6	$	9		$	6
Total losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to liabilities held at the end of the period	$	4		$	—	$	7		$	1

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

The following 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, 2014
		Total		Level 1		Level 2		Level 3
		(in millions)
Corporate debt securities	Cash and cash equivalents	$	73	$	—	$	73	$	—
Banker acceptances	Cash and cash equivalents	3		—		3		—
Interest rate swaps	Current assets—other	4		—		4		—
Corporate debt securities	Investments and other assets—other	24		—		24		—
Interest rate swaps	Investments and other assets—other	19		—		19		—
Money market funds	Investments and other assets—other	1		1		—		—
Total Assets		$	124	$	1	$	123	$	—
Commodity derivatives	Current liabilities—other	$	6	$	—	$	—	$	6
Interest rate swaps	Current liabilities—other	3		—		3		—
Natural gas purchase contracts	Deferred credits and other liabilities—regulatory and other	1		—		—		1
Commodity derivatives	Deferred credits and other liabilities—regulatory and other	2		—		—		2
Total Liabilities		$	12	$	—	$	3	$	9

Description	Condensed Consolidated Balance Sheet Caption	December 31, 2013
		Total		Level 1		Level 2		Level 3
		(in millions)
Corporate debt securities	Cash and cash equivalents	$	49	$	—	$	49	$	—
Corporate debt securities	Current assets—other	7		—		7		—
Interest rate swaps	Current assets—other	8		—		8		—
Corporate debt securities	Investments and other assets—other	11		—		11		—
Interest rate swaps	Investments and other assets—other	15		—		15		—
Money market funds	Investments and other assets—other	1		1		—		—
Total Assets		$	91	$	1	$	90	$	—
Natural gas purchase contracts	Deferred credits and other liabilities—regulatory and other	$	3	$	—	$	—	$	3
Interest rate swaps	Deferred credits and other liabilities—regulatory and other	6		—		6		—
Total Liabilities		$	9	$	—	$	6	$	3

Fair Value of Financial Instruments Recorded and Carried at Book Value

Our AFS securities are classified on the Condensed Consolidated Balance Sheets as follows:

	Estimated Fair Value
	June 30, 2014		December 31, 2013
	(in millions)
Restricted funds
Investments and other assets—other	$	1	$	1
Non-restricted funds
Current assets—other	—		7
Investments and other assets—other	24		11
Total available-for-sale securities	$	25	$	19

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, 2014				December 31, 2013
	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)	13,625		15,226		13,668		14,701

__________

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

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

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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
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Schedule of Equity Method Investments [Line Items]
Equity in earnings of unconsolidated affiliates	$ 85	$ 72	$ 246	$ 182
DCP Midstream, LLC
Schedule of Equity Method Investments [Line Items]
Percentage of ownership interests	50.00%		50.00%
Equity in earnings of unconsolidated affiliates	$ 9	$ 7	$ 57	$ 50

XML

Business Segment Data - Condensed Consolidated Statements of Operations (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Segment Reporting Information [Line Items]
Operating revenues	$ 1,253	$ 1,220	$ 3,096	$ 2,809
Depreciation and amortization	199	196	399	382
Interest expense	176	160	354	309
Interest income and other	1	(3)	5	1
Earnings From Continuing Operations Before Income Taxes	253	288	884	788
Operating Segments - Unaffiliated Revenues
Segment Reporting Information [Line Items]
Operating revenues	1,253	1,220	3,096	2,809
Intersegment Eliminations
Segment Reporting Information [Line Items]
Operating revenues	(48)	(33)	(97)	(63)
Intersegment Eliminations | Operating Segments - Affiliates Revenues
Segment Reporting Information [Line Items]
Operating revenues	(48)	(33)	(97)	(63)
Corporate and Other | Operating Segments
Segment Reporting Information [Line Items]
Operating revenues	19	18	37	36
EBITDA	(24)	(29)	(41)	(43)
Depreciation and amortization	11	10	22	20
Corporate and Other | Operating Segments - Affiliates Revenues
Segment Reporting Information [Line Items]
Operating revenues	17	15	32	30
Corporate and Other | Operating Segments - Unaffiliated Revenues
Segment Reporting Information [Line Items]
Operating revenues	2	3	5	6
Total reportable segments | Operating Segments
Segment Reporting Information [Line Items]
Operating revenues	1,282	1,235	3,156	2,836
EBITDA	651	676	1,673	1,521
Depreciation and amortization	188	186	377	362
Total reportable segments | Operating Segments - Affiliates Revenues
Segment Reporting Information [Line Items]
Operating revenues	31	18	65	33
Total reportable segments | Operating Segments - Unaffiliated Revenues
Segment Reporting Information [Line Items]
Operating revenues	1,251	1,217	3,091	2,803
Field Services | Operating Segments
Segment Reporting Information [Line Items]
EBITDA	54	46	184	134
Western Canada Transmission And Processing | Operating Segments
Segment Reporting Information [Line Items]
Operating revenues	391	391	966	834
EBITDA	111	157	348	347
Depreciation and amortization	68	70	135	134
Western Canada Transmission And Processing | Operating Segments - Affiliates Revenues
Segment Reporting Information [Line Items]
Operating revenues	31	18	65	33
Western Canada Transmission And Processing | Operating Segments - Unaffiliated Revenues
Segment Reporting Information [Line Items]
Operating revenues	360	373	901	801
Distribution | Operating Segments
Segment Reporting Information [Line Items]
Operating revenues	360	352	1,078	1,051
EBITDA	112	115	338	335
Depreciation and amortization	48	51	97	102
Distribution | Operating Segments - Unaffiliated Revenues
Segment Reporting Information [Line Items]
Operating revenues	360	352	1,078	1,051
Spectra Energy Partners | Operating Segments
Segment Reporting Information [Line Items]
Operating revenues	531	492	1,112	951
EBITDA	374	358	803	705
Depreciation and amortization	72	65	145	126
Spectra Energy Partners | Operating Segments - Unaffiliated Revenues
Segment Reporting Information [Line Items]
Operating revenues	$ 531	$ 492	$ 1,112	$ 951

XML

Guarantees and Indemnifications - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
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
Fluor Enterprises
Guarantor Obligations [Line Items]
Percentage of ownership interests	50.00%
Westcoast Energy Inc.
Guarantor Obligations [Line Items]
Percentage of ownership interest	100.00%

XML

Investments in and Loans to Unconsolidated Affiliates - 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, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Related Party Transaction [Line Items]
Operating revenues	$ 1,253	$ 1,220	$ 3,096	$ 2,809
Operating expenses	915	866	2,119	1,949
Operating income	338	354	977	860
Net Income	188	226	655	596
Net income attributable to members’ interests	146	199	565	539
Unconsolidated Affiliates | DCP Midstream, LLC
Related Party Transaction [Line Items]
Operating revenues	3,541	2,861	7,456	5,473
Operating expenses	3,387	2,671	7,032	5,121
Operating income	154	190	424	352
Net Income	92	142	295	262
Net income attributable to members’ interests	$ 89	$ 78	$ 254	$ 169

XML

Consolidating Financial Information - Condensed Consolidating Statement of Cash Flows (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$ 655	$ 596
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	405	388
Equity in earnings of unconsolidated affiliates	(246)	(182)
Equity in earnings of consolidated subsidiaries	0	0
Distributions received from unconsolidated affiliates	199	147
Other	196	251
Net cash provided by (used in) operating activities	1,209	1,200
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(833)	(959)
Investments in and loans to unconsolidated affiliates	(30)	(168)
Acquisitions, net of cash acquired	0	(1,254)
Purchases of held-to-maturity securities	(437)	(456)
Proceeds from sales and maturities of held-to-maturity securities	453	463
Purchases of available-for-sale securities	(13)	(2,899)
Proceeds from sales and maturities of available-for-sale securities	7	2,722
Distributions received from unconsolidated affiliates	242	13
Other changes in restricted funds	(1)	1
Other	0	2
Net cash provided by (used in) investing activities	(612)	(2,535)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	712	1,848
Payments for the redemption of long-term debt	(736)	(546)
Net increase (decrease) in commercial paper	(256)	440
Distributions to noncontrolling interests	(81)	(69)
Contributions from noncontrolling interests	112	0
Dividends paid on common stock	(453)	(412)
Proceeds from the issuance of SEP common units	191	190
Other	12	10
Net cash provided by (used in) financing activities	(499)	1,461
Effect of exchange rate changes on cash	1	(3)
Net increase (decrease) in cash and cash equivalents	99	123
Cash and cash equivalents at beginning of period	201	94
Cash and cash equivalents at end of period	300	217
Spectra Energy Corp
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	565	539
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Equity in earnings of unconsolidated affiliates	0	0
Equity in earnings of consolidated subsidiaries	(540)	(531)
Other	(36)	(7)
Net cash provided by (used in) operating activities	(11)	1
CASH FLOWS FROM INVESTING ACTIVITIES
Advances from (to) affiliates	85	156
Net cash provided by (used in) investing activities	85	156
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid on common stock	(453)	(412)
Distributions and advances from (to) affiliates	366	240
Other	13	15
Net cash provided by (used in) financing activities	(74)	(157)
Spectra Energy Capital, LLC
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	540	531
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Equity in earnings of unconsolidated affiliates	0	0
Equity in earnings of consolidated subsidiaries	(899)	(826)
Other	229	335
Net cash provided by (used in) operating activities	(130)	40
CASH FLOWS FROM INVESTING ACTIVITIES
Advances from (to) affiliates	91	(589)
Net cash provided by (used in) investing activities	91	(589)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	300	1,848
Payments for the redemption of long-term debt	(148)	(495)
Net increase (decrease) in commercial paper	(124)	615
Net decrease in short-term borrowings—consolidated subsidiaries		(9)
Distributions and advances from (to) affiliates	1	(1,405)
Other	0	(6)
Net cash provided by (used in) financing activities	29	548
Net increase (decrease) in cash and cash equivalents	(10)	(1)
Cash and cash equivalents at beginning of period	12	3
Cash and cash equivalents at end of period	2	2
Non-Guarantor Subsidiaries
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	989	883
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	405	388
Equity in earnings of unconsolidated affiliates	(246)	(182)
Equity in earnings of consolidated subsidiaries	0	0
Distributions received from unconsolidated affiliates	199	147
Other	3	(77)
Net cash provided by (used in) operating activities	1,350	1,159
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(833)	(959)
Investments in and loans to unconsolidated affiliates	(30)	(168)
Acquisitions, net of cash acquired		(1,254)
Purchases of held-to-maturity securities	(437)	(456)
Proceeds from sales and maturities of held-to-maturity securities	453	463
Purchases of available-for-sale securities	(13)	(2,899)
Proceeds from sales and maturities of available-for-sale securities	7	2,722
Distributions received from unconsolidated affiliates	242	13
Advances from (to) affiliates		0
Other changes in restricted funds	(1)	1
Other		2
Net cash provided by (used in) investing activities	(612)	(2,535)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	412	0
Payments for the redemption of long-term debt	(588)	(51)
Net increase (decrease) in commercial paper	(132)	(175)
Distributions to noncontrolling interests	(81)	(69)
Contributions from noncontrolling interests	112
Dividends paid on common stock	0	0
Proceeds from the issuance of SEP common units	191	190
Distributions and advances from (to) affiliates	(543)	1,607
Other	(1)	1
Net cash provided by (used in) financing activities	(630)	1,503
Effect of exchange rate changes on cash	1	(3)
Net increase (decrease) in cash and cash equivalents	109	124
Cash and cash equivalents at beginning of period	189	91
Cash and cash equivalents at end of period	298	215
Eliminations
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	(1,439)	(1,357)
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Equity in earnings of unconsolidated affiliates	0	0
Equity in earnings of consolidated subsidiaries	1,439	1,357
CASH FLOWS FROM INVESTING ACTIVITIES
Advances from (to) affiliates	(176)	433
Net cash provided by (used in) investing activities	(176)	433
CASH FLOWS FROM FINANCING ACTIVITIES
Net decrease in short-term borrowings—consolidated subsidiaries		9
Distributions and advances from (to) affiliates	176	(442)
Net cash provided by (used in) financing activities	$ 176	$ (433)

XML

Acquisition of Express-Platte - Additional Information (Detail) (USD $)	6 Months Ended			0 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Mar. 14, 2013 Express-Platte	Mar. 31, 2013 Express-Platte	Mar. 31, 2014 Adjustment to Estimated Fair Value Express-Platte	Dec. 31, 2013 Subsidiary Issuer UNITED STATES Express-Platte	Dec. 31, 2013 Subsidiary Issuer CANADA Express-Platte
Acquisition of Express-Platte
Business Acquisition, Percentage of Voting Interests Acquired				100.00%
Property, plant and equipment					$ 1,251,000,000	$ 60,000,000
Other current assets					9,000,000	1,000,000
Deferred credits and other liabilities					259,000,000	24,000,000
Goodwill	4,841,000,000		4,810,000,000		523,000,000	37,000,000
Business Combination, Consideration Transferred				1,500,000,000
Payments to Acquire Businesses, Net of Cash Acquired	0	1,254,000,000		1,250,000,000
Business Combination Recognized Identifiable Assets Acquired And Liabilities Assumed Non-current Liabilities Long Term Debt Including Current Portion				$ 260,000,000	$ 260,000,000
Percentage of Voting Rights Contributed							100.00%
Percentage of Voting Rights Sold								100.00%

XML

Accumulated Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2014

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Accumulated Other Comprehensive Income

The following table presents the net of tax changes in Accumulated Other Comprehensive Income (AOCI) by component and amounts reclassified out of AOCI to Net Income, excluding amounts attributable to noncontrolling interests:

	Foreign Currency Translation Adjustments			Pension and Post-retirement Benefit Plan Obligations				Gas Purchase Contract Hedges			Other			Total Accumulated Other Comprehensive Income
							(in millions)
March 31, 2014	$	1,313		$	(297	)		$	(7	)	$	(1	)	$	1,008
Reclassified to net income	—			—				—			1			1
Other AOCI activity	220			6				1			—			227
June 30, 2014	$	1,533		$	(291	)		$	(6	)	$	—		$	1,236
March 31, 2013	$	1,858		$	(496	)		$	(18	)	$	(4	)	$	1,340
Reclassified to net income	—			—				1			1			2
Other AOCI activity	(249		)	10				—			(1		)	(240		)
June 30, 2013	$	1,609		$	(486	)		$	(17	)	$	(4	)	$	1,102
December 31, 2013	$	1,557		$	(304	)		$	(11	)	$	(1	)	$	1,241
Reclassified to net income	—			—				2			1			3
Other AOCI activity	(24		)	13				3			—			(8		)
June 30, 2014	$	1,533		$	(291	)		$	(6	)	$	—		$	1,236
December 31, 2012	$	2,044		$	(507	)		$	(23	)	$	(5	)	$	1,509
Reclassified to net income	—			—				3			1			4
Other AOCI activity	(435		)	21				3			—			(411		)
June 30, 2013	$	1,609		$	(486	)		$	(17	)	$	(4	)	$	1,102

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Employee Benefit Plans - 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, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
U.S. Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Service cost benefit earned	$ 4	$ 4	$ 9	$ 9
Interest cost	(6)	(6)	(12)	(11)
Expected return on plan assets	(9)	(8)	(19)	(16)
Amortization of loss	3	5	6	10
Net periodic cost	4	7	8	14
U.S. Other Post-Retirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Interest cost	(2)	(2)	(4)	(4)
Expected return on plan assets	(1)	(1)	(2)	(2)
Amortization of loss	0	1	0	1
Net periodic cost	1	2	2	3
Canadian Other Post-Retirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost benefit earned	1	1	2	2
Interest cost	(2)	(1)	(3)	(3)
Net periodic cost	3	2	5	5
Canada Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Service cost benefit earned	8	8	15	16
Interest cost	(13)	(12)	(26)	(25)
Expected return on plan assets	(18)	(16)	(35)	(33)
Amortization of loss	5	9	11	18
Amortization of prior service cost	1	1	1	1
Net periodic cost	$ 9	$ 14	$ 18	$ 27

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Marketable Securities and Restricted Funds - Estimated Fair Values of Available for Sale Securities (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Total available-for-sale securities	$ 25	$ 19
Corporate debt securities
Schedule of Available-for-sale Securities [Line Items]
Total available-for-sale securities	24	18
Money market funds
Schedule of Available-for-sale Securities [Line Items]
Total available-for-sale securities	$ 1	$ 1

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Consolidating Financial Information - Condensed Consolidating Statements of Comprehensive Income (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Condensed Financial Statements, Captions [Line Items]
Net income	$ 188	$ 226	$ 655	$ 596
Other comprehensive income (loss)	231	(240)	(6)	(412)
Total Comprehensive Income, net of tax	419	(14)	649	184
Less: comprehensive income-noncontrolling interests	45	25	89	52
Comprehensive Income—Controlling Interests	374	(39)	560	132
Spectra Energy Corp
Condensed Financial Statements, Captions [Line Items]
Net income	146	199	565	539
Other comprehensive income (loss)	2	3	4	7
Total Comprehensive Income, net of tax	148	202	569	546
Comprehensive Income—Controlling Interests	148	202	569	546
Spectra Energy Capital, LLC
Condensed Financial Statements, Captions [Line Items]
Net income	125	194	540	531
Other comprehensive income (loss)	0	1	0	1
Total Comprehensive Income, net of tax	125	195	540	532
Comprehensive Income—Controlling Interests	125	195	540	532
Non-Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Net income	306	344	989	883
Other comprehensive income (loss)	229	(244)	(10)	(420)
Total Comprehensive Income, net of tax	535	100	979	463
Less: comprehensive income-noncontrolling interests	45	25	89	52
Comprehensive Income—Controlling Interests	490	75	890	411
Eliminations
Condensed Financial Statements, Captions [Line Items]
Net income	(389)	(511)	(1,439)	(1,357)
Total Comprehensive Income, net of tax	(389)	(511)	(1,439)	(1,357)
Comprehensive Income—Controlling Interests	$ (389)	$ (511)	$ (1,439)	$ (1,357)

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Consolidating Financial Information - Condensed Consolidating Balance Sheet (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2013	Dec. 31, 2012
Condensed Financial Statements, Captions [Line Items]
Cash and cash equivalents	$ 300	$ 201	$ 217	$ 94
Receivables-other	1,222	1,336
Other current assets	683	544
Total current assets	2,205	2,081
Investments in and loans to unconsolidated affiliates	2,803	3,043
Goodwill	4,841	4,810
Other assets	398	385
Property, plant and equipment, net	22,260	21,829
Regulatory assets and deferred debits	1,439	1,385
Total Assets	33,946	33,533
Accounts payable-other	518	440
Commercial paper	769	1,032
Taxes accrued	103	72
Current maturities of long-term debt	496	1,197
Other current liabilities	1,270	1,298
Total current liabilities	3,156	4,039
Long-term debt	13,141	12,488
Deferred credits and other liabilities	6,646	6,425
Preferred stock of subsidiaries	258	258
Equity
Controlling interests	8,652	8,494
Noncontrolling interests	2,093	1,829
Total equity	10,745	10,323	9,729	9,843
Total Liabilities and Equity	33,946	33,533
Spectra Energy Corp
Condensed Financial Statements, Captions [Line Items]
Receivables-consolidated subsidiaries	20	176
Receivables-other	1	1
Other current assets	15	40
Total current assets	36	217
Investments in consolidated subsidiaries	14,574	13,244
Other assets	42	39
Regulatory assets and deferred debits	3	3
Total Assets	14,655	13,503
Accounts payable-other	3	4
Accounts payable-consolidated subsidiaries		89
Taxes accrued	2	4
Other current liabilities	64	81
Total current liabilities	69	178
Advances payable-consolidated subsidiaries	5,172	4,715
Deferred credits and other liabilities	762	116
Equity
Controlling interests	8,652	8,494
Total equity	8,652	8,494
Total Liabilities and Equity	14,655	13,503
Spectra Energy Capital, LLC
Condensed Financial Statements, Captions [Line Items]
Cash and cash equivalents	2	12	2	3
Receivables-consolidated subsidiaries	0	394
Receivables-other	0	0
Other current assets	11	15
Total current assets	13	421
Investments in and loans to unconsolidated affiliates	0	0
Investments in consolidated subsidiaries	20,993	19,403
Advances receivable-consolidated subsidiaries	4,417	4,038
Other assets	30	30
Regulatory assets and deferred debits	15	17
Total Assets	25,468	23,909
Accounts payable-other	1	0
Accounts payable-consolidated subsidiaries	11	0
Commercial paper	220	344
Short-term borrowings-consolidated subsidiaries	415	415
Current maturities of long-term debt	408	557
Other current liabilities	75	75
Total current liabilities	1,130	1,391
Long-term debt	2,899	2,605
Notes payable-consolidated subsidiaries	2,800	2,800
Deferred credits and other liabilities	4,065	3,869
Equity
Controlling interests	14,574	13,244
Total equity	14,574	13,244
Total Liabilities and Equity	25,468	23,909
Non-Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Cash and cash equivalents	298	189	215	91
Receivables-consolidated subsidiaries	9
Receivables-other	1,221	1,335
Other current assets	657	489
Total current assets	2,185	2,013
Investments in and loans to unconsolidated affiliates	2,803	3,043
Advances receivable-consolidated subsidiaries	755	677
Notes receivable-consolidated subsidiaries	3,215	3,215
Goodwill	4,841	4,810
Other assets	326	316
Property, plant and equipment, net	22,260	21,829
Regulatory assets and deferred debits	1,421	1,365
Total Assets	37,806	37,268
Accounts payable-other	514	436
Accounts payable-consolidated subsidiaries	18	481
Commercial paper	549	688
Taxes accrued	101	68
Current maturities of long-term debt	88	640
Other current liabilities	1,131	1,142
Total current liabilities	2,401	3,455
Long-term debt	10,242	9,883
Advances payable-consolidated subsidiaries	0	0
Deferred credits and other liabilities	1,819	2,440
Preferred stock of subsidiaries	258	258
Equity
Controlling interests	20,993	19,403
Noncontrolling interests	2,093	1,829
Total equity	23,086	21,232
Total Liabilities and Equity	37,806	37,268
Eliminations
Condensed Financial Statements, Captions [Line Items]
Receivables-consolidated subsidiaries	(29)	(570)
Total current assets	(29)	(570)
Investments in consolidated subsidiaries	(35,567)	(32,647)
Advances receivable-consolidated subsidiaries	(5,172)	(4,715)
Notes receivable-consolidated subsidiaries	(3,215)	(3,215)
Total Assets	(43,983)	(41,147)
Accounts payable-consolidated subsidiaries	(29)	(570)
Short-term borrowings-consolidated subsidiaries	(415)	(415)
Total current liabilities	(444)	(985)
Advances payable-consolidated subsidiaries	(5,172)	(4,715)
Notes payable-consolidated subsidiaries	(2,800)	(2,800)
Equity
Controlling interests	(35,567)	(32,647)
Total equity	(35,567)	(32,647)
Total Liabilities and Equity	$ (43,983)	$ (41,147)

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Issuances of SEP Units (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Noncontrolling Interest [Line Items]
Total Net Income Controlling Interests And Changes In Equity Controlling Interests	$ 165	$ 237	$ 594	$ 577
Net income-controlling interests	146	199	565	539
Additional Paid-in Capital
Noncontrolling Interest [Line Items]
GainFromIssuanceOfAdditionalEquityInterestsToNoncontrollingInterestHolders	$ 19	$ 38	$ 29	$ 38

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Issuances of SEP Units

6 Months Ended

Jun. 30, 2014

Noncontrolling Interest [Abstract]

Effects of Change in Noncontrolling Interest Ownership

Issuances of SEP Units

During the first half of 2014, SEP issued 3.9 million common units to the public, representing limited partner interests, and 80,000 general partner units to Spectra Energy under its continuous offering program. Total net proceeds to SEP were $195 million (net proceeds to Spectra Energy were $191 million). In connection with the issuances of the units, a $47 million gain ($29 million net of tax) to Additional Paid-in Capital and a $144 million increase in Equity-Noncontrolling Interests were recorded in the first half of 2014. The issuances decreased Spectra Energy's ownership in SEP from 84% to 83% at June 30, 2014.

The following table presents the effects of the issuances of SEP units:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(in millions)
Net income-controlling interests	$	146	$	199	$	565	$	539
Increase in additional paid-in capital resulting from issuances of SEP units	19		38		29		38
Total net income-controlling interests and changes in equity-controlling interests	$	165	$	237	$	594	$	577

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Income Taxes - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Income Tax Contingency [Line Items]
Income tax expense (benefit) from continuing operations	$ 65	$ 62	$ 229	$ 192
Effective tax rate for income from continuing operations	26.00%	22.00%	26.00%	24.00%
Minimum
Income Tax Contingency [Line Items]
Potential decrease of unrecogonized tax benefits	15		15
Maximum
Income Tax Contingency [Line Items]
Potential decrease of unrecogonized tax benefits	$ 20		$ 20

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Employee Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2014

Pension Plans, Defined Benefit

Components of Net Periodic Benefit Cost

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
	(in millions)
U.S.
Service cost benefit earned	$	4		$	4		$	9		$	9
Interest cost on projected benefit obligation	6			6			12			11
Expected return on plan assets	(9		)	(8		)	(19		)	(16		)
Amortization of loss	3			5			6			10
Net periodic pension cost	$	4		$	7		$	8		$	14
Canada
Service cost benefit earned	$	8		$	8		$	15		$	16
Interest cost on projected benefit obligation	13			12			26			25
Expected return on plan assets	(18		)	(16		)	(35		)	(33		)
Amortization of loss	5			9			11			18
Amortization of prior service cost	1			1			1			1
Net periodic pension cost	$	9		$	14		$	18		$	27

U.S. and Canada Other Post-Retirement Benefits

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,
	2014			2013			2014			2013
	(in millions)
U.S.
Interest cost on accumulated post-retirement benefit obligation	$	2		$	2		$	4		$	4
Expected return on plan assets	(1		)	(1		)	(2		)	(2		)
Amortization of loss	—			1			—			1
Net periodic other post-retirement benefit cost	$	1		$	2		$	2		$	3
Canada
Service cost benefit earned	$	1		$	1		$	2		$	2
Interest cost on accumulated post-retirement benefit obligation	2			1			3			3
Net periodic other post-retirement benefit cost	$	3		$	2		$	5		$	5

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Consolidating Financial Information Condensed Consolidating Statements of Operations (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Condensed Financial Statements, Captions [Line Items]
Total operating revenues	$ 1,253	$ 1,220	$ 3,096	$ 2,809
Total operating expenses	915	866	2,119	1,949
Operating income (loss)	338	354	977	860
Equity in earnings of unconsolidated affiliates	85	72	246	182
Equity in earnings of consolidated subsidiaries	0	0	0	0
Other income and expenses, net	6	22	15	55
Interest expense	176	160	354	309
Earnings Before Income Taxes	253	288	884	788
Income tax expense (benefit)	65	62	229	192
Net income	188	226	655	596
Net income-noncontrolling interests	42	27	90	57
Net income-controlling interests	146	199	565	539
Spectra Energy Corp
Condensed Financial Statements, Captions [Line Items]
Total operating revenues	0	0	0	0
Total operating expenses	0	1	4	3
Operating income (loss)	0	(1)	(4)	(3)
Equity in earnings of unconsolidated affiliates	0	0	0	0
Equity in earnings of consolidated subsidiaries	125	194	540	531
Other income and expenses, net	(1)	(1)	(2)	(3)
Interest expense	0	0	0	0
Earnings Before Income Taxes	124	192	534	525
Income tax expense (benefit)	(22)	(7)	(31)	(14)
Net income	146	199	565	539
Net income-noncontrolling interests	0	0	0	0
Net income-controlling interests	146	199	565	539
Spectra Energy Capital, LLC
Condensed Financial Statements, Captions [Line Items]
Total operating revenues	0	0	0	0
Total operating expenses	1	0	1	0
Operating income (loss)	(1)	0	(1)	0
Equity in earnings of unconsolidated affiliates	0	0	0	0
Equity in earnings of consolidated subsidiaries	264	317	899	826
Other income and expenses, net	0	1	1	4
Interest expense	66	51	131	99
Earnings Before Income Taxes	197	267	768	731
Income tax expense (benefit)	72	73	228	200
Net income	125	194	540	531
Net income-noncontrolling interests	0	0	0	0
Net income-controlling interests	125	194	540	531
Non-Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Total operating revenues	1,253	1,220	3,097	2,810
Total operating expenses	914	865	2,115	1,947
Operating income (loss)	339	355	982	863
Equity in earnings of unconsolidated affiliates	85	72	246	182
Equity in earnings of consolidated subsidiaries	0	0	0	0
Other income and expenses, net	7	22	16	54
Interest expense	110	109	223	210
Earnings Before Income Taxes	321	340	1,021	889
Income tax expense (benefit)	15	(4)	32	6
Net income	306	344	989	883
Net income-noncontrolling interests	42	27	90	57
Net income-controlling interests	264	317	899	826
Eliminations
Condensed Financial Statements, Captions [Line Items]
Total operating revenues	0	0	(1)	(1)
Total operating expenses	0	0	(1)	(1)
Operating income (loss)	0	0	0	0
Equity in earnings of unconsolidated affiliates	0	0	0	0
Equity in earnings of consolidated subsidiaries	(389)	(511)	(1,439)	(1,357)
Other income and expenses, net	0	0	0	0
Interest expense	0	0	0	0
Earnings Before Income Taxes	(389)	(511)	(1,439)	(1,357)
Income tax expense (benefit)	0	0	0	0
Net income	(389)	(511)	(1,439)	(1,357)
Net income-noncontrolling interests	0	0	0	0
Net income-controlling interests	$ (389)	$ (511)	$ (1,439)	$ (1,357)

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Marketable Securities and Restricted Funds (Tables)

6 Months Ended

Jun. 30, 2014

Investments, Debt and Equity Securities [Abstract]

Estimated Fair Values of Available for Sale Securities

AFS Securities. AFS securities are as follows:

	Estimated Fair Value
	June 30, 2014		December 31, 2013
	(in millions)
Corporate debt securities	$	24	$	18
Money market funds	1		1
Total available-for-sale securities	$	25	$	19

Restricted and Nonrestricted AFS Securities by Balance Sheet Classification

Our AFS securities are classified on the Condensed Consolidated Balance Sheets as follows:

	Estimated Fair Value
	June 30, 2014		December 31, 2013
	(in millions)
Restricted funds
Investments and other assets—other	$	1	$	1
Non-restricted funds
Current assets—other	—		7
Investments and other assets—other	24		11
Total available-for-sale securities	$	25	$	19

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, 2014				December 31, 2013
	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)	13,625		15,226		13,668		14,701

__________

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

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

Estimated Fair Values of Held to Maturity Marketable Securities

HTM Securities. All of our HTM securities are restricted funds and are as follows:

		Estimated Fair Value
Description	Condensed Consolidated Balance Sheet Caption	June 30, 2014		December 31, 2013
		(in millions)
Bankers acceptances	Current assets—other	$	35	$	35
Canadian government securities	Current assets—other	33		34
Money market funds	Current assets—other	4		3
Canadian government securities	Investments and other assets—other	125		131
Bankers acceptances	Investments and other assets—other	—		10
Total held-to-maturity securities		$	197	$	213

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Accumulated Other Comprehensive Income (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax [Roll Forward]
Beginning balance	$ 1,008	$ 1,340	$ 1,241	$ 1,509
Reclassified to net income	1	2	3	4
Other AOCI activity	227	(240)	(8)	(411)
Ending balance	1,236	1,102	1,236	1,102
Foreign Currency Translation Adjustment
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax [Roll Forward]
Beginning balance	1,313	1,858	1,557	2,044
Reclassified to net income	0	0	0	0
Other AOCI activity	220	(249)	(24)	(435)
Ending balance	1,533	1,609	1,533	1,609
Pension and Post-retirement Benefit Plan Obligations
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax [Roll Forward]
Beginning balance	(297)	(496)	(304)	(507)
Reclassified to net income	0	0	0	0
Other AOCI activity	6	10	13	21
Ending balance	(291)	(486)	(291)	(486)
Gas Purchase Contract Hedges
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax [Roll Forward]
Beginning balance	(7)	(18)	(11)	(23)
Reclassified to net income	0	1	2	3
Other AOCI activity	1	0	3	3
Ending balance	(6)	(17)	(6)	(17)
Other
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax [Roll Forward]
Beginning balance	(1)	(4)	(1)	(5)
Reclassified to net income	1	1	1	1
Other AOCI activity	0	(1)	0	0
Ending balance	$ 0	$ (4)	$ 0	$ (4)

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Risk Management and Hedging Activities - Information about Interest Rate Swaps (Detail) (Interest rate swaps, USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Interest rate swaps
Derivative [Line Items]
Gross Amounts Presented in the Condensed Consolidated Balance Sheets, Assets	$ 23	$ 23
Amounts Not Offset in the Condensed Consolidated Balance Sheets, Assets	2	3
Net Amount	21	20
Gross Amounts Presented in the Condensed Consolidated Balance Sheets, Liabilities	3	6
Amounts Not Offset in the Condensed Consolidated Balance Sheets, Liabilities	2	3
Net Amount	$ 1	$ 3

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Debt and Credit Facilities - Available Credit Facilities and Restrictive Debt Covenants (Detail) In Millions, unless otherwise specified					6 Months Ended
	Jun. 30, 2014 USD ($)	Dec. 31, 2013 USD ($)	Jun. 30, 2014 Spectra Energy Capital, LLC USD ($)	Dec. 31, 2013 Spectra Energy Capital, LLC USD ($)	Jun. 30, 2014 Spectra Energy Capital, LLC Multi Year Syndicated USD ($)		Jun. 30, 2014 Westcoast Energy Inc. Multi Year Syndicated USD ($)		Jun. 30, 2014 Union Gas Limited Multi Year Syndicated USD ($)		Jun. 30, 2014 Spectra Energy Partners, LP Multi Year Syndicated USD ($)		Jun. 30, 2014 Covenant Requirement Spectra Energy Capital, LLC	Jun. 30, 2014 Covenant Requirement Westcoast Energy Inc. CAD	Jun. 30, 2014 Covenant Requirement Union Gas Limited CAD	Jun. 30, 2014 Covenant Requirement Maximum Spectra Energy Capital, LLC
Debt Instrument [Line Items]
Debt-to-total defined capitalization ratio													56.00%			65.00%
Line of Credit Facility [Line Items]
Line Of Credit Year of Maturity					2018	[1]	2016	[2]	2016	[3]	2018	[4]
Outstanding Commercial Paper	$ 769	$ 1,032	$ 220	$ 344	$ 220	[1]	$ 0	[2]	$ 0	[3]	$ 549	[4]
Available Credit Facilities Capacity	2,887				780	[1]	281	[2]	375	[3]	1,451	[4]
Line of Credit Facility, Maximum Borrowing Capacity	$ 3,656				$ 1,000	[1]	$ 281	[2]	$ 375	[3]	$ 2,000	[4]		300	400

[1] Revolving 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%. Per the terms of the agreement, collateralized debt is excluded from the calculation of the ratio. This ratio was 56% at June 30, 2014.

[2] U.S. dollar equivalent at June 30, 2014. The revolving 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 41% at June 30, 2014.

[3] U.S. dollar equivalent at June 30, 2014. The revolving 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, 2014.

[4] Revolving credit facility contains a covenant that requires SEP to maintain a ratio of total Consolidated Indebtedness-to-Consolidated EBITDA, as defined in the credit agreement, of 5.0 to 1 or less, provided that for three fiscal quarters subsequent to certain acquisitions (such as the November 1, 2013 U.S. Assets Dropdown from Spectra Energy Corp), the ratio may be 5.5 to 1 or less. As of June 30, 2014, this ratio was 3.9 to 1 after giving effect to the U.S. Assets Dropdown.

XML

Business Segments - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2014 reportable_segments
DCP Midstream, LLC | DCP Midstream Partners, LP
Segment Reporting Information [Line Items]
Percentage of ownership interests	22.00%
Total reportable segments
Segment Reporting Information [Line Items]
Number of reportable segments	4
Spectra Energy Corp | DCP Midstream, LLC
Segment Reporting Information [Line Items]
Percentage of ownership interests	50.00%
Phillips 66 | DCP Midstream, LLC
Segment Reporting Information [Line Items]
Percentage of ownership interests	50.00%

XML

General

6 Months Ended

Jun. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

General

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. The term “Spectra Energy Partners” refers to our Spectra Energy Partners operating segment. The term “SEP” refers to Spectra Energy Partners, LP, our master limited partnership.

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, and owns and operates a crude oil pipeline system that connects Canadian and U.S. producers to refineries in the U.S. Rocky Mountain and Midwest regions. We currently operate in three key areas of the natural gas industry: gathering and processing, transmission and storage, and distribution. We provide transmission and storage of natural gas to customers in various regions of the northeastern and southeastern United States, the Maritime Provinces in Canada, 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. We also own a 50% interest in DCP Midstream, LLC (DCP Midstream), based in Denver, Colorado, one of the leading natural gas gatherers in the United States based on wellhead volumes, and one of the largest U.S. producers and marketers of natural gas liquids (NGLs).

Basis of Presentation. The accompanying Condensed Consolidated Financial Statements include our accounts and the accounts of our majority-owned subsidiaries, after eliminating intercompany transactions and balances. 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, 2013, 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.

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.

XML

Debt and Credit Facilities - Additional Information (Detail)			0 Months Ended	6 Months Ended			6 Months Ended								6 Months Ended					0 Months Ended
	Jun. 30, 2014 USD ($)	Jun. 30, 2014 Union Gas Limited Covenant Requirement CAD	Jun. 02, 2014 Union Gas Limited Unsecured Debt [Member]	Jun. 30, 2014 Union Gas Limited Union two point seven six percent unsecured notes due in 2021 [Member]	Jun. 02, 2014 Union Gas Limited Union two point seven six percent unsecured notes due in 2021 [Member] USD ($)	Jun. 02, 2014 Union Gas Limited Union two point seven six percent unsecured notes due in 2021 [Member] CAD	Jun. 30, 2014 Union Gas Limited Union four point two zero percent unsecured notes due in 2044 [Member]	Jun. 02, 2014 Union Gas Limited Union four point two zero percent unsecured notes due in 2044 [Member] USD ($)	Jun. 02, 2014 Union Gas Limited Union four point two zero percent unsecured notes due in 2044 [Member] CAD	Jun. 30, 2014 Union Gas Limited Maximum Covenant Requirement	Jun. 30, 2014 Spectra Energy Partners, LP Covenant Requirement	Jun. 30, 2014 Spectra Energy Partners, LP Maximum Covenant Requirement	Jun. 30, 2014 Spectra Energy Partners, LP Temporary maximum Covenant Requirement	Jun. 30, 2014 Spectra Energy Capital, LLC Covenant Requirement	Jun. 30, 2014 Spectra Energy Capital, LLC Delayed Draw Term Loan	Jan. 14, 2014 Spectra Energy Capital, LLC Delayed Draw Term Loan USD ($)	Jun. 30, 2014 Spectra Energy Capital, LLC Maximum Covenant Requirement	Jun. 30, 2014 Westcoast Energy Inc. Covenant Requirement CAD	Jun. 30, 2014 Westcoast Energy Inc. Maximum Covenant Requirement	Nov. 01, 2013 U.S. Asset Dropdown Spectra Energy Subsidiaries
Debt Instrument [Line Items]
Debt-to-total capitalization ratio		65.00%								75.00%								41.00%	75.00%
Debt-to-Adjusted EBITDA ratio maximum												5.0	5.5
Debt-to-Adjusted EBITDA ratio											3.9
Date of acquisition																				Nov. 01, 2013
Line of Credit Facility, Maximum Borrowing Capacity	$ 3,656,000,000	400,000,000																300,000,000
Debt-to-total defined capitalization ratio														56.00%			65.00%
Debt Instrument, Issuance Date			Jun. 02, 2014
Unsecured Debt					183,000,000	200,000,000		229,000,000	250,000,000
Debt Instrument, Interest Rate, Stated Percentage					2.76%	2.76%		4.20%	4.20%
Debt Instrument Year of Maturity				2021			2044								2018
Debt instrument, face amount																$ 300,000,000

XML

Consolidating Financial Information (Tables)

6 Months Ended

Jun. 30, 2014

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Statement of Operations

Spectra Energy Corp

Condensed Consolidating Statements of Operations

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Three Months Ended June 30, 2014
Total operating revenues	$	—		$	—		$	1,253		$	—		$	1,253
Total operating expenses	—			1			914			—			915
Operating income (loss)	—			(1		)	339			—			338
Equity in earnings of unconsolidated affiliates	—			—			85			—			85
Equity in earnings of consolidated subsidiaries	125			264			—			(389		)	—
Other income and expenses, net	(1		)	—			7			—			6
Interest expense	—			66			110			—			176
Earnings before income taxes	124			197			321			(389		)	253
Income tax expense (benefit)	(22		)	72			15			—			65
Net income	146			125			306			(389		)	188
Net income—noncontrolling interests	—			—			42			—			42
Net income—controlling interests	$	146		$	125		$	264		$	(389	)	$	146
Three Months Ended June 30, 2013
Total operating revenues	$	—		$	—		$	1,220		$	—		$	1,220
Total operating expenses	1			—			865			—			866
Operating income (loss)	(1		)	—			355			—			354
Equity in earnings of unconsolidated affiliates	—			—			72			—			72
Equity in earnings of consolidated subsidiaries	194			317			—			(511		)	—
Other income and expenses, net	(1		)	1			22			—			22
Interest expense	—			51			109			—			160
Earnings before income taxes	192			267			340			(511		)	288
Income tax expense (benefit)	(7		)	73			(4		)	—			62
Net income	199			194			344			(511		)	226
Net income—noncontrolling interests	—			—			27			—			27
Net income—controlling interests	$	199		$	194		$	317		$	(511	)	$	199

Spectra Energy Corp

Condensed Consolidating Statements of Operations

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Six Months Ended June 30, 2014
Total operating revenues	$	—		$	—		$	3,097	$	(1	)	$	3,096
Total operating expenses	4			1			2,115		(1		)	2,119
Operating income (loss)	(4		)	(1		)	982		—			977
Equity in earnings of unconsolidated affiliates	—			—			246		—			246
Equity in earnings of consolidated subsidiaries	540			899			—		(1,439		)	—
Other income and expenses, net	(2		)	1			16		—			15
Interest expense	—			131			223		—			354
Earnings before income taxes	534			768			1,021		(1,439		)	884
Income tax expense (benefit)	(31		)	228			32		—			229
Net income	565			540			989		(1,439		)	655
Net income—noncontrolling interests	—			—			90		—			90
Net income—controlling interests	$	565		$	540		$	899	$	(1,439	)	$	565
Six Months Ended June 30, 2013
Total operating revenues	$	—		$	—		$	2,810	$	(1	)	$	2,809
Total operating expenses	3			—			1,947		(1		)	1,949
Operating income (loss)	(3		)	—			863		—			860
Equity in earnings of unconsolidated affiliates	—			—			182		—			182
Equity in earnings of consolidated subsidiaries	531			826			—		(1,357		)	—
Other income and expenses, net	(3		)	4			54		—			55
Interest expense	—			99			210		—			309
Earnings before income taxes	525			731			889		(1,357		)	788
Income tax expense (benefit)	(14		)	200			6		—			192
Net income	539			531			883		(1,357		)	596
Net income—noncontrolling interests	—			—			57		—			57
Net income—controlling interests	$	539		$	531		$	826	$	(1,357	)	$	539

Condensed Consolidating Statements 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, 2014
Net income	$	146	$	125	$	306		$	(389	)	$	188
Other comprehensive income	2		—		229			—			231
Total comprehensive income, net of tax	148		125		535			(389		)	419
Less: comprehensive income—noncontrolling interests	—		—		45			—			45
Comprehensive income—controlling interests	$	148	$	125	$	490		$	(389	)	$	374
Three Months Ended June 30, 2013
Net income	$	199	$	194	$	344		$	(511	)	$	226
Other comprehensive income (loss)	3		1		(244		)	—			(240		)
Total comprehensive income (loss), net of tax	202		195		100			(511		)	(14		)
Less: comprehensive income—noncontrolling interests	—		—		25			—			25
Comprehensive income (loss)—controlling interests	$	202	$	195	$	75		$	(511	)	$	(39	)

Six Months Ended June 30, 2014
Net income	$	565	$	540	$	989		$	(1,439	)	$	655
Other comprehensive income (loss)	4		—		(10		)	—			(6		)
Total comprehensive income, net of tax	569		540		979			(1,439		)	649
Less: comprehensive income—noncontrolling interests	—		—		89			—			89
Comprehensive income—controlling interests	$	569	$	540	$	890		$	(1,439	)	$	560
Six Months Ended June 30, 2013
Net income	$	539	$	531	$	883		$	(1,357	)	$	596
Other comprehensive income (loss)	7		1		(420		)	—			(412		)
Total comprehensive income, net of tax	546		532		463			(1,357		)	184
Less: comprehensive income—noncontrolling interests	—		—		52			—			52
Comprehensive income—controlling interests	$	546	$	532	$	411		$	(1,357	)	$	132

Condensed Consolidating Balance Sheet

Spectra Energy Corp

Condensed Consolidating Balance Sheet

June 30, 2014

(Unaudited)

(In millions)

	Spectra Energy Corp		Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Cash and cash equivalents	$	—	$	2	$	298	$	—		$	300
Receivables—consolidated subsidiaries	20		—		9		(29		)	—
Receivables—other	1		—		1,221		—			1,222
Other current assets	15		11		657		—			683
Total current assets	36		13		2,185		(29		)	2,205
Investments in and loans to unconsolidated affiliates	—		—		2,803		—			2,803
Investments in consolidated subsidiaries	14,574		20,993		—		(35,567		)	—
Advances receivable—consolidated subsidiaries	—		4,417		755		(5,172		)	—
Notes receivable—consolidated subsidiaries	—		—		3,215		(3,215		)	—
Goodwill	—		—		4,841		—			4,841
Other assets	42		30		326		—			398
Property, plant and equipment, net	—		—		22,260		—			22,260
Regulatory assets and deferred debits	3		15		1,421		—			1,439
Total Assets	$	14,655	$	25,468	$	37,806	$	(43,983	)	$	33,946
Accounts payable—other	$	3	$	1	$	514	$	—		$	518
Accounts payable—consolidated subsidiaries	—		11		18		(29		)	—
Commercial paper	—		220		549		—			769
Short-term borrowings—consolidated subsidiaries	—		415		—		(415		)	—
Taxes accrued	2		—		101		—			103
Current maturities of long-term debt	—		408		88		—			496
Other current liabilities	64		75		1,131		—			1,270
Total current liabilities	69		1,130		2,401		(444		)	3,156
Long-term debt	—		2,899		10,242		—			13,141
Advances payable—consolidated subsidiaries	5,172		—		—		(5,172		)	—
Notes payable—consolidated subsidiaries	—		2,800		—		(2,800		)	—
Deferred credits and other liabilities	762		4,065		1,819		—			6,646
Preferred stock of subsidiaries	—		—		258		—			258
Equity
Controlling interests	8,652		14,574		20,993		(35,567		)	8,652
Noncontrolling interests	—		—		2,093		—			2,093
Total equity	8,652		14,574		23,086		(35,567		)	10,745
Total Liabilities and Equity	$	14,655	$	25,468	$	37,806	$	(43,983	)	$	33,946

Spectra Energy Corp

Condensed Consolidating Balance Sheet

December 31, 2013

(Unaudited)

(In millions)

	Spectra Energy Corp		Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Cash and cash equivalents	$	—	$	12	$	189	$	—		$	201
Receivables—consolidated subsidiaries	176		394		—		(570		)	—
Receivables—other	1		—		1,335		—			1,336
Other current assets	40		15		489		—			544
Total current assets	217		421		2,013		(570		)	2,081
Investments in and loans to unconsolidated affiliates	—		—		3,043		—			3,043
Investments in consolidated subsidiaries	13,244		19,403		—		(32,647		)	—
Advances receivable—consolidated subsidiaries	—		4,038		677		(4,715		)	—
Notes receivable—consolidated subsidiaries	—		—		3,215		(3,215		)	—
Goodwill	—		—		4,810		—			4,810
Other assets	39		30		316		—			385
Property, plant and equipment, net	—		—		21,829		—			21,829
Regulatory assets and deferred debits	3		17		1,365		—			1,385
Total Assets	$	13,503	$	23,909	$	37,268	$	(41,147	)	$	33,533
Accounts payable—other	$	4	$	—	$	436	$	—		$	440
Accounts payable—consolidated subsidiaries	89		—		481		(570		)	—
Commercial paper	—		344		688		—			1,032
Short-term borrowings—consolidated subsidiaries	—		415		—		(415		)	—
Taxes accrued	4		—		68		—			72
Current maturities of long-term debt	—		557		640		—			1,197
Other current liabilities	81		75		1,142		—			1,298
Total current liabilities	178		1,391		3,455		(985		)	4,039
Long-term debt	—		2,605		9,883		—			12,488
Advances payable—consolidated subsidiaries	4,715		—		—		(4,715		)	—
Notes payable—consolidated subsidiaries	—		2,800		—		(2,800		)	—
Deferred credits and other liabilities	116		3,869		2,440		—			6,425
Preferred stock of subsidiaries	—		—		258		—			258
Equity
Controlling interests	8,494		13,244		19,403		(32,647		)	8,494
Noncontrolling interests	—		—		1,829		—			1,829
Total equity	8,494		13,244		21,232		(32,647		)	10,323
Total Liabilities and Equity	$	13,503	$	23,909	$	37,268	$	(41,147	)	$	33,533

Condensed Consolidating Statement of Cash Flows

Spectra Energy Corp

Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2014

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	565		$	540		$	989		$	(1,439	)	$	655
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	—			—			405			—			405
Equity in earnings of unconsolidated affiliates	—			—			(246		)	—			(246		)
Equity in earnings of consolidated subsidiaries	(540		)	(899		)	—			1,439			—
Distributions received from unconsolidated affiliates	—			—			199			—			199
Other	(36		)	229			3			—			196
Net cash provided by (used in) operating activities	(11		)	(130		)	1,350			—			1,209
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	—			—			(833		)	—			(833		)
Investments in and loans to unconsolidated affiliates	—			—			(30		)	—			(30		)
Purchases of held-to-maturity securities	—			—			(437		)	—			(437		)
Proceeds from sales and maturities of held-to-maturity securities	—			—			453			—			453
Purchases of available-for-sale securities	—			—			(13		)	—			(13		)
Proceeds from sales and maturities of available-for-sale securities	—			—			7			—			7
Distributions received from unconsolidated affiliates	—			—			242			—			242
Advances from affiliates	85			91			—			(176		)	—
Other changes in restricted funds	—			—			(1		)	—			(1		)
Net cash provided by (used in) investing activities	85			91			(612		)	(176		)	(612		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	—			300			412			—			712
Payments for the redemption of long-term debt	—			(148		)	(588		)	—			(736		)
Net decrease in commercial paper	—			(124		)	(132		)	—			(256		)
Distributions to noncontrolling interests	—			—			(81		)	—			(81		)
Contributions from noncontrolling interests	—			—			112			—			112
Dividends paid on common stock	(453		)	—			—			—			(453		)
Proceeds from the issuance of SEP common units	—			—			191			—			191
Distributions and advances from (to) affiliates	366			1			(543		)	176			—
Other	13			—			(1		)	—			12
Net cash provided by (used in) financing activities	(74		)	29			(630		)	176			(499		)
Effect of exchange rate changes on cash	—			—			1			—			1
Net increase (decrease) in cash and cash equivalents	—			(10		)	109			—			99
Cash and cash equivalents at beginning of period	—			12			189			—			201
Cash and cash equivalents at end of period	$	—		$	2		$	298		$	—		$	300

Spectra Energy Corp

Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2013

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	539		$	531		$	883		$	(1,357	)	$	596
Adjustments to reconcile net income to net cashprovided by operating activities:
Depreciation and amortization	—			—			388			—			388
Equity in earnings of unconsolidated affiliates	—			—			(182		)	—			(182		)
Equity in earnings of consolidated subsidiaries	(531		)	(826		)	—			1,357			—
Distributions received from unconsolidated affiliates	—			—			147			—			147
Other	(7		)	335			(77		)	—			251
Net cash provided by operating activities	1			40			1,159			—			1,200
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	—			—			(959		)	—			(959		)
Investments in and loans to unconsolidated affiliates	—			—			(168		)	—			(168		)
Acquisitions, net of cash acquired	—			—			(1,254		)	—			(1,254		)
Purchases of held-to-maturity securities	—			—			(456		)	—			(456		)
Proceeds from sales and maturities of held-to-maturity securities	—			—			463			—			463
Purchases of available-for-securities	—			—			(2,899		)	—			(2,899		)
Proceeds from sales and maturities of available-for-sale securities	—			—			2,722			—			2,722
Distributions received from unconsolidated affiliates	—			—			13			—			13
Advances from (to) affiliates	156			(589		)	—			433			—
Other changes in restricted funds	—			—			1			—			1
Other	—			—			2			—			2
Net cash provided by (used in) investing activities	156			(589		)	(2,535		)	433			(2,535		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	—			1,848			—			—			1,848
Payments for the redemption of long-term debt	—			(495		)	(51		)	—			(546		)
Net increase (decrease) in commercial paper	—			615			(175		)	—			440
Net decrease in short-term borrowings—consolidated subsidiaries	—			(9		)	—			9			—
Distributions to noncontrolling interests	—			—			(69		)	—			(69		)
Dividends paid on common stock	(412		)	—			—			—			(412		)
Proceeds from the issuance of SEP common units	—			—			190			—			190
Distributions and advances from (to) affiliates	240			(1,405		)	1,607			(442		)	—
Other	15			(6		)	1			—			10
Net cash provided by (used in) financing activities	(157		)	548			1,503			(433		)	1,461
Effect of exchange rate changes on cash	—			—			(3		)	—			(3		)
Net increase (decrease) in cash and cash equivalents	—			(1		)	124			—			123
Cash and cash equivalents at beginning of period	—			3			91			—			94
Cash and cash equivalents at end of period	$	—		$	2		$	215		$	—		$	217

XML

Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Goodwill and Intangible Assets, Policy [Policy Text Block]

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, 2014 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 and our Spectra Energy Partners reportable segment, which are one level below.

As permitted under accounting guidance on testing goodwill for impairment, we perform 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 consider events and circumstances specific to us, such as macroeconomic conditions, industry and market considerations, cost factors and overall financial performance, when evaluating whether it is more likely than not that the fair values of our reporting units are less than their respective carrying amounts.

Use of Estimates

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.

Earnings Per 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.

Inventory, Policy

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 as either a receivable or a current liability, as appropriate, for future disposition with customers, subject to approval by the OEB. The remaining inventory is recorded at the lower of cost or market, primarily using average cost.

Fair Value Measurement

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.

For natural gas purchases contracts and commodity derivatives, we utilize data obtained from third-party sources for the determination of fair value. The expected future cash flows arising from our swaps are discounted to present value. In addition, credit default swap rates or historical average credit default rates by credit rating are used to develop the adjustment for credit risk embedded in our positions. As these transactions are limited, we believe a Level 3 classification is appropriate.

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New Accounting Pronouncements

6 Months Ended

Jun. 30, 2014

Accounting Changes and Error Corrections [Abstract]

New Accounting Pronouncements

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” which supersedes the revenue recognition requirements of “Revenue Recognition (Topic 605)” and clarifies the principles of recognizing revenue. This ASU is effective for us January 1, 2017 and is to be applied retrospectively. We are currently evaluating this ASU and its potential impact on us.

In April 2014, the FASB issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." This ASU revises the definition of discontinued operations by limiting discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have or will have a major effect on an entity’s operations and financial results, removing the lack of continuing involvement criteria and requiring discontinued operations reporting for the disposal of an equity method investment that meets the definition of discontinued operations. The update also requires expanded disclosures for discontinued operations, and disclosure of pretax profit or loss of certain individually significant components of an entity that do not qualify for discontinued operations reporting. This ASU is effective for us on January 1, 2015 and is to be applied prospectively. We do not expect the adoption of the provisions of this ASU to have any impact on our consolidated results of operations, financial position or cash flows.

In 2013, the FASB issued ASU 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a Consensus of the FASB Emerging Issues Task Force),” which was issued to eliminate diversity in practice. This ASU requires entities to net unrecognized tax benefits against all same-jurisdiction net operating losses or tax credit carryforwards that would be used to settle the position with a tax authority. We adopted this standard on January 1, 2014. The adoption of this ASU did not have a material impact on our consolidated results of operations, financial position or cash flows.

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Goodwill - Changes in Goodwill (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Mar. 31, 2013
Goodwill Roll Forward[Line Items]
Beginning Balance	$ 4,810
Foreign currency translation	(6)
Ending Balance	4,841
Express-Platte
Goodwill Roll Forward[Line Items]
Beginning Balance		523
Acquisition of Express-Platte	37
Ending Balance		$ 523

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General - Additional Information (Detail) (DCP Midstream, LLC)	Jun. 30, 2014
DCP Midstream, LLC
General [Line Items]
Percentage of ownership	50.00%

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Acquisition of Express-Platte (Tables)

6 Months Ended

Jun. 30, 2014

Acquisition of Express-Platte [Abstract]

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

The following table summarizes the fair values of the assets and liabilities acquired as of the date of the acquisition.

	Purchase Price  Allocation
	(in millions)
Cash purchase price	$	1,250
Working capital and other purchase adjustments	71
Total	1,321
Cash	67
Receivables	25
Other current assets	9
Property, plant and equipment	1,251
Accounts payable	(18		)
Other current liabilities	(17		)
Deferred credits and other liabilities	(259		)
Long-term debt, including current portion	(260		)
Total assets acquired/liabilities assumed	798
Goodwill	$	523

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Business Segments (Tables)

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Business Segment Data - Condensed Consolidated Statements of Operations

Business Segment Data

Condensed Consolidated Statements of Operations
	Unaffiliated Revenues		Intersegment Revenues			Total Operating Revenues			Depreciation and Amortization		Segment EBITDA/ Consolidated Earnings before Income Taxes
	(in millions)
Three Months Ended June 30, 2014
Spectra Energy Partners	$	531	$	—		$	531		$	72	$	374
Distribution	360		—			360			48		112
Western Canada Transmission & Processing	360		31			391			68		111
Field Services	—		—			—			—		54
Total reportable segments	1,251		31			1,282			188		651
Other	2		17			19			11		(24		)
Eliminations	—		(48		)	(48		)	—		—
Depreciation and amortization	—		—			—			—		199
Interest expense	—		—			—			—		176
Interest income and other	—		—			—			—		1
Total consolidated	$	1,253	$	—		$	1,253		$	199	$	253
Three Months Ended June 30, 2013
Spectra Energy Partners	$	492	$	—		$	492		$	65	$	358
Distribution	352		—			352			51		115
Western Canada Transmission & Processing	373		18			391			70		157
Field Services	—		—			—			—		46
Total reportable segments	1,217		18			1,235			186		676
Other	3		15			18			10		(29		)
Eliminations	—		(33		)	(33		)	—		—
Depreciation and amortization	—		—			—			—		196
Interest expense	—		—			—			—		160
Interest income and other	—		—			—			—		(3		)
Total consolidated	$	1,220	$	—		$	1,220		$	196	$	288
Six Months Ended June 30, 2014
Spectra Energy Partners	$	1,112	$	—		$	1,112		$	145	$	803
Distribution	1,078		—			1,078			97		338
Western Canada Transmission & Processing	901		65			966			135		348
Field Services	—		—			—			—		184
Total reportable segments	3,091		65			3,156			377		1,673
Other	5		32			37			22		(41		)
Eliminations	—		(97		)	(97		)	—		—
Depreciation and amortization	—		—			—			—		399
Interest expense	—		—			—			—		354
Interest income and other	—		—			—			—		5
Total consolidated	$	3,096	$	—		$	3,096		$	399	$	884
Six Months Ended June 30, 2013
Spectra Energy Partners	$	951	$	—		$	951		$	126	$	705
Distribution	1,051		—			1,051			102		335
Western Canada Transmission & Processing	801		33			834			134		347
Field Services	—		—			—			—		134
Total reportable segments	2,803		33			2,836			362		1,521
Other	6		30			36			20		(43		)
Eliminations	—		(63		)	(63		)	—		—
Depreciation and amortization	—		—			—			—		382
Interest expense	—		—			—			—		309
Interest income and other	—		—			—			—		1
Total consolidated	$	2,809	$	—		$	2,809		$	382	$	788

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Condensed Consolidated Statements of Equity (USD $) In Millions, unless otherwise specified	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, 2012	$ 9,843	$ 1	$ 5,297	$ 2,165	$ 2,044	$ (535)	$ 871
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	596			539			57
Other comprehensive income (loss)	(412)				(435)	28	(5)
Dividends on common stock	(410)			(410)
Stock-based compensation	4		4
Distributions to noncontrolling interests	(69)						(69)
Contributions from noncontrolling interests	0
Spectra Energy common stock issued	10		10
Spectra Energy Partners, LP common units issued	166		38				128
Other, net	1		(2)	0			3
Ending Balance at Jun. 30, 2013	9,729	1	5,347	2,294	1,609	(507)	985
Beginning Balance at Dec. 31, 2013	10,323	1	4,869	2,383	1,557	(316)	1,829
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	655			565			90
Other comprehensive income (loss)	(6)				(24)	19	(1)
Dividends on common stock	(451)			(451)
Stock-based compensation	6		6
Distributions to noncontrolling interests	(81)						(81)
Contributions from noncontrolling interests	112						112
Spectra Energy common stock issued	9		9
Spectra Energy Partners, LP common units issued	173		29				144
Transfer of interests in subsidiaries to Spectra Energy Partners, LP	1						1
Other, net	4		5				(1)
Ending Balance at Jun. 30, 2014	$ 10,745	$ 1	$ 4,918	$ 2,497	$ 1,533	$ (297)	$ 2,093

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Earnings per Common Share (Tables)

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

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,
	2014		2013		2014		2013
	(in millions, except per-share amounts)
Net income—controlling interests	$	146	$	199	$	565	$	539
Weighted-average common shares outstanding
Basic	671		669		671		669
Diluted	673		671		672		671
Basic earnings per common share (a)	$	0.22	$	0.30	$	0.84	$	0.81
Diluted earnings per common share (a)	$	0.22	$	0.30	$	0.84	$	0.80

—————

(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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Risk Management and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2014

Risk Management And Hedging Activities [Abstract]

Derivative Assets And Liabilities Offsetting

Commodity Derivative Assets and Liabilities Offsetting

Information about our commodity derivatives that had netting or rights of offset arrangements are as follows:

	June 30, 2014
	Gross  Amounts		Gross Amounts Offset		Net Amount Presented in the Condensed Consolidated Balance Sheets
Description	(in millions)
Assets	$	140	$	140	$	—
Liabilities	148		140		8

Commodity derivative impact

Information regarding the impacts of commodity derivatives on our Condensed Consolidated Statements of Operations are as follows:

		Periods Ended June 30, 2014
Derivatives	Condensed Consolidated Statement of Operations Caption	Three Months			Six Months
		(in millions)
Commodity derivatives	Sales of natural gas liquids	$	(4	)	$	(7	)

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Inventory - Components of Inventory (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Inventory Disclosure [Abstract]
Natural gas	$ 166	$ 155
NGLs	33	30
Materials and supplies	78	78
Total inventory	$ 277	$ 263

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Issuances of SEP Units - (Additional Information) (Details) (USD $) In Millions, except Share data in Thousands, unless otherwise specified	3 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Related Party Transaction [Line Items]
Proceeds from the issuance of Spectra Energy Partners, LP	$ 191
Spectra Energy Partners, LP
Related Party Transaction [Line Items]
Proceeds from the issuance of Spectra Energy Partners, LP	195
Sale of Stock, Percentage of Ownership before Transaction		84.00%
Percentage ownership by parent after equity issuance	83.00%
Limited Partner | Spectra Energy Partners, LP
Related Party Transaction [Line Items]
Partnership units issued	3,900
General Partner | Spectra Energy Partners, LP
Related Party Transaction [Line Items]
Partnership units issued	80
Additional Paid-in Capital
Related Party Transaction [Line Items]
Partners Capital Account Sale Of Units Net Of Tax	29
Additional Paid-in Capital | Spectra Energy Partners, LP
Related Party Transaction [Line Items]
Partners' Capital Account, Sale of Units	47
Noncontrolling Interests
Related Party Transaction [Line Items]
Noncontrolling Interest, Increase from Subsidiary Equity Issuance	$ 144

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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, 2014		Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013
Operating Revenues
Transportation, storage and processing of natural gas	$ 780		$ 766		$ 1,667		$ 1,566
Distribution of natural gas	309		283		935		908
Sales of natural gas liquids	40		65		227		177
Transportation of crude oil	70		67		141		80
Other	54		39		126		78
Total operating revenues	1,253		1,220		3,096		2,809
Operating Expenses
Natural gas and petroleum products purchased	209		167		737		632
Operating, maintenance and other	405		410		768		742
Depreciation and amortization	199		196		399		382
Property and other taxes	102		93		215		193
Total operating expenses	915		866		2,119		1,949
Operating Income	338		354		977		860
Other Income and Expenses
Equity in earnings of unconsolidated affiliates	85		72		246		182
Other income and expenses, net	6		22		15		55
Total other income and expenses	91		94		261		237
Interest Expense	176		160		354		309
Earnings Before Income Taxes	253		288		884		788
Income Tax Expense	65		62		229		192
Net Income	188		226		655		596
Net Income—Noncontrolling Interests	42		27		90		57
Net Income—Controlling Interests	$ 146		$ 199		$ 565		$ 539
Weighted-average shares outstanding
Basic (in shares)	671		669		671		669
Diluted (in shares)	673		671		672		671
Earnings per share
Earnings Per Share, Basic	$ 0.22	[1]	$ 0.30	[1]	$ 0.84	[1]	$ 0.81	[1]
Earnings Per Share, Diluted	$ 0.22	[1]	$ 0.30	[1]	$ 0.84	[1]	$ 0.80	[1]
Dividends per share	$ 0.335		$ 0.305		$ 0.670		$ 0.61

[1] (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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Acquisition of Express-Platte Summary of Fair Values of Assets and Liabilities Acquired (Detail) (Express-Platte, USD $) In Millions, unless otherwise specified	1 Months Ended
	Mar. 31, 2013	Mar. 14, 2013
Express-Platte
Acquisition of Express-Platte
Cash purchase price	$ 1,250
Working capital and other purchase adjustments	71
Total payments, net of adjustments	1,321
Long-term debt, including current portion	(260)	(260)
Total assets acquired/liabilities assumed	798
Cash	67
Receivables	25
Other current assets	9
Property, plant and equipment	1,251
Accounts payable	(18)
Other current liabilities	(17)
Deferred credits and other liabilities	$ (259)

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Preferred stock, par (usd per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	22,000,000	22,000,000
Preferred stock, shares outstanding	0	0
Common stock, par (usd per share)	$ 0.001	$ 0.001
Common stock, shares authorized	1,000,000,000	1,000,000,000
Common stock, shares outstanding	671,000,000	670,000,000

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Marketable Securities and Restricted Funds - Estimated Fair Values of Held to Maturity Securities (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Schedule of Held-to-maturity Securities [Line Items]
Total held-to-maturity securities	$ 197	$ 213
Other Current Assets | Bankers acceptances
Schedule of Held-to-maturity Securities [Line Items]
Total held-to-maturity securities	35	35
Other Current Assets | Canadian government securities
Schedule of Held-to-maturity Securities [Line Items]
Total held-to-maturity securities	33	34
Other Current Assets | Money market funds
Schedule of Held-to-maturity Securities [Line Items]
Total held-to-maturity securities	4	3
Investments and other assets-other | Bankers acceptances
Schedule of Held-to-maturity Securities [Line Items]
Total held-to-maturity securities	0	10
Investments and other assets-other | Canadian government securities
Schedule of Held-to-maturity Securities [Line Items]
Total held-to-maturity securities	$ 125	$ 131

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Investments in and Loans to Unconsolidated Affiliates (Tables)

6 Months Ended

Jun. 30, 2014

Equity Method Investments and Joint Ventures [Abstract]

Summarized Statements of Operations of Unconsolidated Affiliates 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,
	2014		2013		2014		2013
	(in millions)
Operating revenues	$	3,541	$	2,861	$	7,456	$	5,473
Operating expenses	3,387		2,671		7,032		5,121
Operating income	154		190		424		352
Net income	92		142		295		262
Net income attributable to members’ interests	89		78		254		169

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Fair Value Measurements - Fair Value of Financial Instruments Recorded and Carried at Book Value (Detail) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014		Dec. 31, 2013
Book Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Note receivable, noncurrent	$ 71	[1]	$ 71	[1]
Long-term Debt	13,625	[2]	13,668	[2]
Approximate Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Note receivable, noncurrent	71	[1]	71	[1]
Long-term Debt, Fair Value	$ 15,226	[2]	$ 14,701	[2]

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

[2] Excludes unamortized items and fair value hedge carrying value adjustments

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Risk Management and Hedging Activities

6 Months Ended

Jun. 30, 2014

Risk Management And Hedging Activities [Abstract]

Risk Management and Hedging Activities

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, the ownership of the NGL marketing operations in western Canada and processing 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, mostly around interest rate and commodity 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.

Other than interest rate swaps and commodity derivatives described below, we did not have any significant derivatives outstanding during the six months ended June 30, 2014.

Interest Rate Swaps

At June 30, 2014, we had “pay floating—receive fixed” interest rate swaps outstanding with a total notional principal amount of $1,617 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.

Information about our interest rate swaps that had netting or rights of offset arrangements are as follows:

	June 30, 2014						December 31, 2013
	Gross Amounts Presented in the Condensed Consolidated Balance Sheets		Amounts Not Offset in the Condensed Consolidated Balance Sheets		Net Amount		Gross Amounts Presented in the Condensed Consolidated Balance Sheets		Amounts Not Offset in the Condensed Consolidated Balance Sheets		Net Amount
Description	(in millions)
Assets	$	23	$	2	$	21	$	23	$	3	$	20
Liabilities	3		2		1		6		3		3

At June 30, 2014, we had interest rate swaps with another counterparty which were in a liability position of $2 million which could be terminated by the counterparty if one of our credit ratings falls below investment grade. In addition, we had one interest rate swap with a counterparty which was in a liability position of $1 million which could be terminated at any time.

Commodity Derivatives

Effective January 2014, we instituted a commodity price risk management program at Western Canada Transmission & Processing’s Empress NGL business and elected to not apply cash flow hedge accounting.

At June 30, 2014, we had commodity mark-to-market derivatives outstanding with a total notional amount of 129 million gallons. The longest dated commodity derivative contract we currently have expires in 2017.

Information about our commodity derivatives that had netting or rights of offset arrangements are as follows:

	June 30, 2014
	Gross  Amounts		Gross Amounts Offset		Net Amount Presented in the Condensed Consolidated Balance Sheets
Description	(in millions)
Assets	$	140	$	140	$	—
Liabilities	148		140		8

Substantially all of our commodity derivative agreements outstanding at June 30, 2014 have provisions that require collateral to be posted in the amount of the net liability position if one of our credit ratings falls below investment grade.

Information regarding the impacts of commodity derivatives on our Condensed Consolidated Statements of Operations are as follows:

		Periods Ended June 30, 2014
Derivatives	Condensed Consolidated Statement of Operations Caption	Three Months			Six Months
		(in millions)
Commodity derivatives	Sales of natural gas liquids	$	(4	)	$	(7	)

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Goodwill (Tables)

6 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in Goodwill

The following presents changes in goodwill during 2014:

	Goodwill
	(in millions)
December 31, 2013	$	4,810
Acquisition of Express-Platte	37
Foreign currency translation	(6		)
June 30, 2014	$	4,841

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Guarantees and Indemnifications

6 Months Ended

Jun. 30, 2014

Guarantees [Abstract]

Guarantees and Indemnifications

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 our 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, 2014 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, 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, 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, 2014, the amounts recorded for the guarantees and indemnifications described above are not material, both individually and in the aggregate.

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Risk Management and Hedging Activities - Commodity derivative assets and liabilities offsetting (Details) (Commodity Contract, USD $) In Millions, unless otherwise specified	Jun. 30, 2014
Commodity Contract
Derivative Assets And Liabilities Offsetting Table Text Block [Line Items]
Net Amounts Presented in the Condensed Consolidated Balance Sheets, Liabilities	$ 8
Derivative Liability, Fair Value, Gross Liability	148
Derivative Liability, Fair Value, Amount Offset Against Assets	140
Net Amounts Presented in the Condensed Consolidated Balance Sheet, Assets	0
Derivative Asset, Fair Value, Amount Offset Against Liabilities	140
Derivative Asset, Fair Value, Gross Asset	$ 140

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Condensed Consolidated Statements of Cash Flows (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 655	$ 596
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	405	388
Deferred income tax expense	224	182
Equity in earnings of unconsolidated affiliates	(246)	(182)
Distributions received from unconsolidated affiliates	199	147
Other	(28)	69
Net cash provided by (used in) operating activities	1,209	1,200
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(833)	(959)
Investments in and loans to unconsolidated affiliates	(30)	(168)
Acquisitions, net of cash acquired	0	(1,254)
Purchases of held-to-maturity securities	(437)	(456)
Proceeds from sales and maturities of held-to-maturity securities	453	463
Purchases of available-for-sale securities	(13)	(2,899)
Proceeds from sales and maturities of available-for-sale securities	7	2,722
Distributions received from unconsolidated affiliates	242	13
Other changes in restricted funds	(1)	1
Other	0	2
Net cash provided by (used in) investing activities	(612)	(2,535)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	712	1,848
Payments for the redemption of long-term debt	(736)	(546)
Net increase (decrease) in commercial paper	(256)	440
Distributions to noncontrolling interests	(81)	(69)
Contributions from noncontrolling interests	112	0
Dividends paid on common stock	(453)	(412)
Proceeds from the issuance of Spectra Energy Partners, LP common units	191	190
Other	12	10
Net cash provided by (used in) financing activities	(499)	1,461
Effect of exchange rate changes on cash	1	(3)
Net increase in cash and cash equivalents	99	123
Cash and cash equivalents at beginning of period	201	94
Cash and cash equivalents at end of period	300	217
Supplemental Disclosures
Property, plant and equipment non-cash accruals	$ 118	$ 148

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Condensed Consolidated Statements of Comprehensive Income (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Net Income	$ 188	$ 226	$ 655	$ 596
Other comprehensive income (loss)
Foreign currency translation adjustments	223	(251)	(25)	(440)
Unrealized mark-to-market net gain on hedges	1	0	3	3
Reclassification of cash flow hedges into earnings	1	2	3	4
Pension and benefits impact (net of taxes of $3, $5, $6 and $9, respectively)	6	10	13	21
Other	0	(1)	0	0
Total other comprehensive income (loss)	231	(240)	(6)	(412)
Total Comprehensive Income (Loss), net of tax	419	(14)	649	184
Less: Comprehensive Income—Noncontrolling Interests	45	25	89	52
Comprehensive Income (Loss)—Controlling Interests	$ 374	$ (39)	$ 560	$ 132

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Investments in and Loans to Unconsolidated Affiliates

6 Months Ended

Jun. 30, 2014

Equity Method Investments and Joint Ventures [Abstract]

Investments in and Loans to Unconsolidated Affiliates

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,
	2014		2013		2014		2013
	(in millions)
Operating revenues	$	3,541	$	2,861	$	7,456	$	5,473
Operating expenses	3,387		2,671		7,032		5,121
Operating income	154		190		424		352
Net income	92		142		295		262
Net income attributable to members’ interests	89		78		254		169

DCP Partners issues, from time to time, limited partner units to the public, which are recorded by DCP Midstream directly to its equity. Our proportionate share of gains from those issuances, totaling $9 million and $7 million in the second quarters of 2014 and 2013, respectively, and $57 million and $50 million during the six-month periods ended June 30, 2014 and 2013, respectively, are reflected in Equity in Earnings of Unconsolidated Affiliates in the Condensed Consolidated Statements of Operations.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2014
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2014
Document Fiscal Year Focus	2014
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	670,893,796

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Goodwill

6 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

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, 2014 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 and our Spectra Energy Partners reportable segment, which are one level below.

As permitted under accounting guidance on testing goodwill for impairment, we perform 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 consider events and circumstances specific to us, such as macroeconomic conditions, industry and market considerations, cost factors and overall financial performance, when evaluating whether it is more likely than not that the fair values of our reporting units are less than their respective carrying amounts.

The following presents changes in goodwill during 2014:

	Goodwill
	(in millions)
December 31, 2013	$	4,810
Acquisition of Express-Platte	37
Foreign currency translation	(6		)
June 30, 2014	$	4,841

See Note 2 for discussion of the acquisition of Express-Platte and an adjustment to Goodwill recorded in the first quarter of 2014 related to the acquisition.

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Condensed Consolidated Statements of Comprehensive Income Condensed Consolidated Statement of Comprehensive Income (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Tax	$ 3	$ 4	$ 6	$ 9

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Regulatory Matters

6 Months Ended

Jun. 30, 2014

Regulated Operations [Abstract]

Regulatory Matters

Regulatory Matters

Union Gas. In January 2014, Union Gas filed a notice of motion seeking leave to appeal to the Ontario Court of Appeal (Court of Appeal) for the unsuccessful appeal to the Ontario Divisional Court on the OEB’s treatment of 2011 revenues derived from the optimization of our upstream transportation contracts. A decision from the Court of Appeal on the notice of motion was issued in April 2014 granting leave to appeal. In May 2014, Union Gas filed a notice of appeal and a hearing is scheduled for December 2014.

Union Gas filed an application with the OEB in May 2013 for the annual disposition of the 2012 non-commodity deferral account balances. A decision on that application was issued by the OEB in March 2014. Among other things, the OEB determined that revenues derived from the optimization of Union Gas’ upstream transportation contracts in 2012 will be treated as revenues and included in utility earnings instead of a reduction to gas costs. The decision also denied a proposal to recover certain over-refunds to customers and reduced incentive amounts related to Union Gas’ 2011 energy conservation program. As a result of this OEB decision, Union Gas recognized pre-tax income of $10 million in the first quarter of 2014, comprised of a $32 million increase in Transportation, Storage and Processing of Natural Gas revenues, a $15 million decrease in Distribution of Natural Gas revenues and a $7 million decrease in Other revenues on the Condensed Consolidated Statements of Operations. In addition, the decision also approved the deferral of pension expense for recovery from customers, resulting in pre-tax income of $7 million, recorded as a reduction in Operating, Maintenance and Other expense in the second quarter of 2014.

On May 2, 2014, Union Gas filed an application with the OEB for the annual disposition of its 2013 non-commodity deferral account balances. The combined impact is a net payable to customers of approximately $21 million which is primarily reflected as Current Liabilities—Other on the Condensed Consolidated Balance Sheets at June 30, 2014. A hearing and decision from the OEB is expected later this year.

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Business Segments

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Business Segments

Business Segments

In November 2013, Spectra Energy contributed substantially all of its remaining U.S. transmission, storage and liquids assets to SEP (the U.S. Assets Dropdown). As a result of this transaction, we realigned our reportable segments structure. Amounts presented herein for 2013 segment information have been recast to conform to our current segment reporting presentation. There were no changes to consolidated data as a result of the recast of our segment information.

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

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

The presentation of our Spectra Energy Partners segment is reflective of the parent-level focus by our CODM, considering the resource allocation and governance provisions associated with SEP’s master limited partnership structure. SEP maintains a capital and cash management structure that is separate from Spectra Energy’s, is self-funding and maintains its own lines of bank credit and cash management accounts. It is in this context that our CODM evaluates the Spectra Energy Partners segment as a whole, without regard to any of SEP’s individual businesses. These factors, coupled with a different cost of capital of our other businesses, serve to differentiate how our Spectra Energy Partners segment is managed as compared to how SEP is managed.

Spectra Energy Partners provides transmission, storage and gathering of natural gas, as well as the transportation of crude oil and natural gas liquids (NGLs) through interstate pipeline systems for customers in various regions of the midwestern, northeastern and southeastern United States and Canada. The natural gas transmission and storage operations are primarily subject to the rules and regulations of the Federal Energy Regulatory Commission (FERC). The crude oil transportation operations are primarily subject to regulation by the FERC in the U.S. and the National Energy Board (NEB) in Canada. Our Spectra Energy Partners segment is composed of the operations of SEP, less governance costs, which are included in “Other.”

Distribution provides retail natural gas distribution service in Ontario, Canada, as well as natural gas transmission 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 transmission of natural gas, natural gas gathering and processing services, and NGL extraction, fractionation, transportation, storage and marketing to customers in western Canada, the northern tier of the United States and the Maritime Provinces in Canada. This segment conducts business mostly through BC Pipeline, BC Field Services, and the NGL marketing and Canadian Midstream businesses, and Maritimes & Northeast Pipeline Limited Partnership (M&N Canada). BC Pipeline and BC Field Services operations are primarily subject to the rules and regulations of the NEB.

Field Services gathers, compresses, treats, processes, transports, stores and sells natural gas, produces, fractionates, transports, stores and sells NGLs, and recovers and sells condensate. In addition, Field Services trades and markets natural gas and 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 Partners, LP (DCP Partners) is a publicly-traded master limited partnership, of which DCP Midstream acts as general partner. As of June 30, 2014, DCP Midstream had an approximate 22% ownership interest in DCP Partners, including DCP Midstream’s limited partner and general partner interests.

Our reportable segments offer different products and services and are managed separately as business units. Management evaluates segment performance based on earnings from continuing operations before interest, taxes, and depreciation and amortization (EBITDA). Cash, cash equivalents and short-term investments are managed at the parent-company levels, so the associated gains and losses from foreign currency transactions, and interest and dividend income are excluded from the segments’ EBITDA. Our segment EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate EBITDA in the same manner. Transactions between reportable segments are accounted for on the same basis as transactions with unaffiliated third parties.

Business Segment Data

Condensed Consolidated Statements of Operations
	Unaffiliated Revenues		Intersegment Revenues			Total Operating Revenues			Depreciation and Amortization		Segment EBITDA/ Consolidated Earnings before Income Taxes
	(in millions)
Three Months Ended June 30, 2014
Spectra Energy Partners	$	531	$	—		$	531		$	72	$	374
Distribution	360		—			360			48		112
Western Canada Transmission & Processing	360		31			391			68		111
Field Services	—		—			—			—		54
Total reportable segments	1,251		31			1,282			188		651
Other	2		17			19			11		(24		)
Eliminations	—		(48		)	(48		)	—		—
Depreciation and amortization	—		—			—			—		199
Interest expense	—		—			—			—		176
Interest income and other	—		—			—			—		1
Total consolidated	$	1,253	$	—		$	1,253		$	199	$	253
Three Months Ended June 30, 2013
Spectra Energy Partners	$	492	$	—		$	492		$	65	$	358
Distribution	352		—			352			51		115
Western Canada Transmission & Processing	373		18			391			70		157
Field Services	—		—			—			—		46
Total reportable segments	1,217		18			1,235			186		676
Other	3		15			18			10		(29		)
Eliminations	—		(33		)	(33		)	—		—
Depreciation and amortization	—		—			—			—		196
Interest expense	—		—			—			—		160
Interest income and other	—		—			—			—		(3		)
Total consolidated	$	1,220	$	—		$	1,220		$	196	$	288
Six Months Ended June 30, 2014
Spectra Energy Partners	$	1,112	$	—		$	1,112		$	145	$	803
Distribution	1,078		—			1,078			97		338
Western Canada Transmission & Processing	901		65			966			135		348
Field Services	—		—			—			—		184
Total reportable segments	3,091		65			3,156			377		1,673
Other	5		32			37			22		(41		)
Eliminations	—		(97		)	(97		)	—		—
Depreciation and amortization	—		—			—			—		399
Interest expense	—		—			—			—		354
Interest income and other	—		—			—			—		5
Total consolidated	$	3,096	$	—		$	3,096		$	399	$	884
Six Months Ended June 30, 2013
Spectra Energy Partners	$	951	$	—		$	951		$	126	$	705
Distribution	1,051		—			1,051			102		335
Western Canada Transmission & Processing	801		33			834			134		347
Field Services	—		—			—			—		134
Total reportable segments	2,803		33			2,836			362		1,521
Other	6		30			36			20		(43		)
Eliminations	—		(63		)	(63		)	—		—
Depreciation and amortization	—		—			—			—		382
Interest expense	—		—			—			—		309
Interest income and other	—		—			—			—		1
Total consolidated	$	2,809	$	—		$	2,809		$	382	$	788

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

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 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. We believe there are no matters outstanding that upon resolution will have a material effect on our consolidated results of operations, financial position or cash flows.

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 for legal matters recorded as of June 30, 2014 or December 31, 2013 related to litigation.

Other Commitments and Contingencies

See Note 16 for a discussion of guarantees and indemnifications.

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Marketable Securities and Restricted Funds

6 Months Ended

Jun. 30, 2014

Investments, Debt and Equity Securities [Abstract]

Marketable Securities and Restricted Funds

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, therefore we do not have any securities classified as trading securities. While we do not routinely sell marketable securities prior to their scheduled maturity dates, some of our investments may be held and restricted for insurance purposes, so these investments are classified as available-for-sale (AFS) marketable securities as they may occasionally be sold prior to their scheduled maturity dates due to the unexpected timing of cash needs. Initial investments in securities are classified as purchases of the respective type of securities (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. AFS securities are as follows:

	Estimated Fair Value
	June 30, 2014		December 31, 2013
	(in millions)
Corporate debt securities	$	24	$	18
Money market funds	1		1
Total available-for-sale securities	$	25	$	19

Our AFS securities are classified on the Condensed Consolidated Balance Sheets as follows:

	Estimated Fair Value
	June 30, 2014		December 31, 2013
	(in millions)
Restricted funds
Investments and other assets—other	$	1	$	1
Non-restricted funds
Current assets—other	—		7
Investments and other assets—other	24		11
Total available-for-sale securities	$	25	$	19

At June 30, 2014, the weighted-average contractual maturity of outstanding AFS securities was two years.

There were no material gross unrealized holding gains or losses associated with investments in AFS securities at June 30, 2014 or December 31, 2013.

HTM Securities. All of our HTM securities are restricted funds and are as follows:

		Estimated Fair Value
Description	Condensed Consolidated Balance Sheet Caption	June 30, 2014		December 31, 2013
		(in millions)
Bankers acceptances	Current assets—other	$	35	$	35
Canadian government securities	Current assets—other	33		34
Money market funds	Current assets—other	4		3
Canadian government securities	Investments and other assets—other	125		131
Bankers acceptances	Investments and other assets—other	—		10
Total held-to-maturity securities		$	197	$	213

All of our HTM securities are restricted funds pursuant to certain M&N Canada and Express-Platte debt agreements. The funds restricted for M&N Canada, plus future cash from operations that would otherwise be available for distribution to the partners of M&N Canada, are required to be placed in escrow until the balance in escrow is sufficient to fund all future debt service on the M&N Canada 6.90% senior secured notes. There are sufficient funds held in escrow to fund all future debt service on these M&N Canada notes.

At June 30, 2014, the weighted-average contractual maturity of outstanding HTM securities was one year.

There were no material gross unrecognized holding gains or losses associated with investments in HTM securities at June 30, 2014 or December 31, 2013.

Other Restricted Funds. In addition to the portions of the AFS and HTM securities that were restricted funds as described above, we had other restricted funds totaling $20 million at June 30, 2014 and $19 million at December 31, 2013 classified as Current Assets—Other. These restricted funds are related to additional amounts for the M&N Canada debt service requirements and insurance.

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

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Accumulated Other Comprehensive Income

6 Months Ended

Jun. 30, 2014

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

The following table presents the net of tax changes in Accumulated Other Comprehensive Income (AOCI) by component and amounts reclassified out of AOCI to Net Income, excluding amounts attributable to noncontrolling interests:

	Foreign Currency Translation Adjustments			Pension and Post-retirement Benefit Plan Obligations				Gas Purchase Contract Hedges			Other			Total Accumulated Other Comprehensive Income
							(in millions)
March 31, 2014	$	1,313		$	(297	)		$	(7	)	$	(1	)	$	1,008
Reclassified to net income	—			—				—			1			1
Other AOCI activity	220			6				1			—			227
June 30, 2014	$	1,533		$	(291	)		$	(6	)	$	—		$	1,236
March 31, 2013	$	1,858		$	(496	)		$	(18	)	$	(4	)	$	1,340
Reclassified to net income	—			—				1			1			2
Other AOCI activity	(249		)	10				—			(1		)	(240		)
June 30, 2013	$	1,609		$	(486	)		$	(17	)	$	(4	)	$	1,102
December 31, 2013	$	1,557		$	(304	)		$	(11	)	$	(1	)	$	1,241
Reclassified to net income	—			—				2			1			3
Other AOCI activity	(24		)	13				3			—			(8		)
June 30, 2014	$	1,533		$	(291	)		$	(6	)	$	—		$	1,236
December 31, 2012	$	2,044		$	(507	)		$	(23	)	$	(5	)	$	1,509
Reclassified to net income	—			—				3			1			4
Other AOCI activity	(435		)	21				3			—			(411		)
June 30, 2013	$	1,609		$	(486	)		$	(17	)	$	(4	)	$	1,102

Reclassifications to Net Income are primarily included in Other Income and Expenses, Net on our Condensed Consolidated Statements of Operations.

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Marketable Securities and Restricted Funds - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014 Available-for-sale Securities Maximum	Jun. 30, 2014 Held-to-maturity Securities Maximum	Jun. 30, 2014 Other Current Assets	Dec. 31, 2013 Other Current Assets	Jun. 30, 2014 M&N Canada six point nine zero percent senior secured notes due 2014 to 2019 Maritimes & Northeast Pipeline Limited Partnership
Gain (Loss) on Investments [Line Items]
Debt Instrument, Interest Rate, Stated Percentage					6.90%
Weighted-average contractual maturity of outstanding securities	2 years	1 year
Restricted Cash and Cash Equivalents, Current			$ 20	$ 19

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Income Taxes

6 Months Ended

Jun. 30, 2014

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income tax expense was $65 million for the three months ended June 30, 2014, compared with $62 million for the same period in 2013. The higher tax expense was driven by the reversal of tax reserves in the 2013 period as a result of favorable Canadian federal income tax legislation enacted in the second quarter of 2013, mostly offset by lower Canadian earnings in 2014.

Income tax expense was $229 million for the six months ended June 30, 2014, compared with $192 million for the same period in 2013. The higher tax expense was driven primarily by higher earnings and the reversal of tax reserves in the 2013 period.

The effective income tax rate for the three months ended June 30, 2014 and 2013 was 26% and 22%, respectively, and 26% and 24% for the six-month periods, respectively. The lower effective tax rates in the 2013 periods resulted primarily from the reversal of tax reserves in the second quarter of 2013.

There was no material net change in unrecognized tax benefits recorded during the six-month period ended June 30, 2014. Although uncertain, we believe it is reasonably possible that the total amount of unrecognized tax benefits could decrease by approximately $15 million to $20 million prior to June 30, 2015.

In September 2013, the U.S. Treasury and the Internal Revenue Service (IRS) issued final regulations regarding the deduction and capitalization of expenditures related to tangible property (tangible property regulations). The final IRS regulations apply to amounts paid to acquire, produce, or improve tangible property as well as dispositions of such property and are for tax years beginning on or after January 1, 2014. We are currently evaluating the tangible property regulations and awaiting the release of additional regulations and industry specific guidance. Any changes resulting from the tangible property regulations will affect the timing of deducting expenditures for tax purposes and the impact will be reflected in income tax payable or receivable, deferred taxes and cash paid for income taxes. Our earnings will not be impacted.

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Earnings per Common Share

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Earnings per Common Share

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.

The following table presents our basic and diluted EPS calculations:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(in millions, except per-share amounts)
Net income—controlling interests	$	146	$	199	$	565	$	539
Weighted-average common shares outstanding
Basic	671		669		671		669
Diluted	673		671		672		671
Basic earnings per common share (a)	$	0.22	$	0.30	$	0.84	$	0.81
Diluted earnings per common share (a)	$	0.22	$	0.30	$	0.84	$	0.80

—————

(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, 2014

Inventory Disclosure [Abstract]

Inventory

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 as either a receivable or a current liability, as appropriate, for future disposition with customers, subject to approval by the OEB. The remaining inventory is recorded at the lower of cost or market, primarily using average cost. The components of inventory are as follows:

	June 30, 2014		December 31, 2013
	(in millions)
Natural gas	$	166	$	155
NGLs	33		30
Materials and supplies	78		78
Total inventory	$	277	$	263

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Fair Value Measurements - Changes in Level 3 Assets and Liabilities that are Measured at Fair Value on Recurring Basis using Significant Unobservable Inputs (Detail) (Long-term derivative liabilities, USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Long-term derivative liabilities
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair value, beginning of period	$ 5	$ 6	$ 3	$ 9
Total realized/unrealized losses (gains):
Included in earnings	5	0	9	1
Included in other comprehensive income	(1)	0	(4)	(4)
Settlements	0	0	1	0
Fair value, end of period	9	6	9	6
Total losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to liabilities held at the end of the period	$ 4	$ 0	$ 7	$ 1

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Risk Management and Hedging Activities - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014 gal
Pay Floating Receive Fixed Swaps
Derivative [Line Items]
Notional principal amount of interest rate hedges	$ 1,617
Interest Rate Swaps One
Derivative [Line Items]
Gross Amounts Presented in the Condensed Consolidated Balance Sheets, Liabilities	1
Interest Rate Swaps Two
Derivative [Line Items]
Gross Amounts Presented in the Condensed Consolidated Balance Sheets, Liabilities	2
Commodity Contract
Derivative [Line Items]
Gross Amounts Presented in the Condensed Consolidated Balance Sheets, Liabilities	$ 148
Underlying, Derivative Volume	129,000,000
Derivative, Term of Contract	2017

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Fair Value Measurements - 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, 2014	Dec. 31, 2013
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	$ 124	$ 91
Fair Value Liabilities	12	9
Corporate debt securities | Investments and other assets-other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	24	11
Corporate debt securities | Current assets-other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets		7
Corporate debt securities | Cash and cash equivalents
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	73	49
Bankers acceptances | Cash and cash equivalents
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	3
Interest rate swaps | Deferred credits and other liabilities - regulatory and other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities		6
Interest rate swaps | Other Current Liabilities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities	3
Interest rate swaps | Investments and other assets-other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	19	15
Interest rate swaps | Current assets-other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	4	8
Money market funds | Investments and other assets-other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	1	1
Commodity Contract | Deferred credits and other liabilities - regulatory and other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities	2
Commodity Contract | Other Current Liabilities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities	6
Natural gas purchase contracts | Deferred credits and other liabilities - regulatory and other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities	1	3
Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	1	1
Level 1 | Money market funds | Investments and other assets-other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	1	1
Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	123	90
Fair Value Liabilities	3	6
Level 2 | Corporate debt securities | Investments and other assets-other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	24	11
Level 2 | Corporate debt securities | Current assets-other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets		7
Level 2 | Corporate debt securities | Cash and cash equivalents
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	73	49
Level 2 | Bankers acceptances | Cash and cash equivalents
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	3
Level 2 | Interest rate swaps | Deferred credits and other liabilities - regulatory and other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities		6
Level 2 | Interest rate swaps | Other Current Liabilities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities	3
Level 2 | Interest rate swaps | Investments and other assets-other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	19	15
Level 2 | Interest rate swaps | Current assets-other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Assets	4	8
Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities	9	3
Level 3 | Commodity Contract | Deferred credits and other liabilities - regulatory and other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities	2
Level 3 | Commodity Contract | Other Current Liabilities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities	6
Level 3 | Natural gas purchase contracts | Deferred credits and other liabilities - regulatory and other
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair Value Liabilities	$ 1	$ 3

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Inventory (Tables)

6 Months Ended

Jun. 30, 2014

Inventory Disclosure [Abstract]

Components of Inventory

The components of inventory are as follows:

	June 30, 2014		December 31, 2013
	(in millions)
Natural gas	$	166	$	155
NGLs	33		30
Materials and supplies	78		78
Total inventory	$	277	$	263

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Earnings per Common Share - Basic and Diluted Eps Calculations (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2014		Jun. 30, 2013		Jun. 30, 2014		Jun. 30, 2013
Earnings Per Share [Abstract]
Net income-controlling interests	$ 146		$ 199		$ 565		$ 539
Earnings Per Share, Basic	$ 0.22	[1]	$ 0.30	[1]	$ 0.84	[1]	$ 0.81	[1]
Earnings Per Share, Diluted	$ 0.22	[1]	$ 0.30	[1]	$ 0.84	[1]	$ 0.80	[1]
Weighted-average common shares outstanding
Basic (in shares)	671		669		671		669
Diluted (in shares)	673		671		672		671

[1] (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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Fair Value Measurements

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The following 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, 2014
		Total		Level 1		Level 2		Level 3
		(in millions)
Corporate debt securities	Cash and cash equivalents	$	73	$	—	$	73	$	—
Banker acceptances	Cash and cash equivalents	3		—		3		—
Interest rate swaps	Current assets—other	4		—		4		—
Corporate debt securities	Investments and other assets—other	24		—		24		—
Interest rate swaps	Investments and other assets—other	19		—		19		—
Money market funds	Investments and other assets—other	1		1		—		—
Total Assets		$	124	$	1	$	123	$	—
Commodity derivatives	Current liabilities—other	$	6	$	—	$	—	$	6
Interest rate swaps	Current liabilities—other	3		—		3		—
Natural gas purchase contracts	Deferred credits and other liabilities—regulatory and other	1		—		—		1
Commodity derivatives	Deferred credits and other liabilities—regulatory and other	2		—		—		2
Total Liabilities		$	12	$	—	$	3	$	9

Description	Condensed Consolidated Balance Sheet Caption	December 31, 2013
		Total		Level 1		Level 2		Level 3
		(in millions)
Corporate debt securities	Cash and cash equivalents	$	49	$	—	$	49	$	—
Corporate debt securities	Current assets—other	7		—		7		—
Interest rate swaps	Current assets—other	8		—		8		—
Corporate debt securities	Investments and other assets—other	11		—		11		—
Interest rate swaps	Investments and other assets—other	15		—		15		—
Money market funds	Investments and other assets—other	1		1		—		—
Total Assets		$	91	$	1	$	90	$	—
Natural gas purchase contracts	Deferred credits and other liabilities—regulatory and other	$	3	$	—	$	—	$	3
Interest rate swaps	Deferred credits and other liabilities—regulatory and other	6		—		6		—
Total Liabilities		$	9	$	—	$	6	$	3

The following presents changes in Level 3 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,
	2014			2013		2014			2013
	(in millions)
Derivative liabilities
Fair value, beginning of period	$	5		$	6	$	3		$	9
Total realized/unrealized losses (gains):
Included in earnings	5			—		9			1
Included in other comprehensive income	(1		)	—		(4		)	(4		)
Settlements	—			—		1			—
Fair value, end of period	$	9		$	6	$	9		$	6
Total losses for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains or losses relating to liabilities held at the end of the period	$	4		$	—	$	7		$	1

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.

For natural gas purchases contracts and commodity derivatives, we utilize data obtained from third-party sources for the determination of fair value. The expected future cash flows arising from our swaps are discounted to present value. In addition, credit default swap rates or historical average credit default rates by credit rating are used to develop the adjustment for credit risk embedded in our positions. As these transactions are limited, we believe a Level 3 classification is appropriate.

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, 2014				December 31, 2013
	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)	13,625		15,226		13,668		14,701

__________

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

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

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 and is classified as Level 2.

The fair values of cash and cash equivalents, restricted cash, short-term investments, accounts receivable, note receivable-noncurrent, accounts payable 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 2014 and 2013 periods, there were no material adjustments to assets and liabilities measured at fair value on a nonrecurring basis.

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Employee Benefit Plans

6 Months Ended

Jun. 30, 2014

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans

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 $10 million to our U.S. retirement plans in the six months ended June 30, 2014 and $11 million in the same period in 2013. We made total contributions to the Canadian DC and DB plans of $26 million in the six months ended June 30, 2014 and $46 million in the same period in 2013. We anticipate that we will make total contributions of approximately $22 million to the U.S. plans and approximately $40 million to the Canadian plans in 2014.

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
	(in millions)
U.S.
Service cost benefit earned	$	4		$	4		$	9		$	9
Interest cost on projected benefit obligation	6			6			12			11
Expected return on plan assets	(9		)	(8		)	(19		)	(16		)
Amortization of loss	3			5			6			10
Net periodic pension cost	$	4		$	7		$	8		$	14
Canada
Service cost benefit earned	$	8		$	8		$	15		$	16
Interest cost on projected benefit obligation	13			12			26			25
Expected return on plan assets	(18		)	(16		)	(35		)	(33		)
Amortization of loss	5			9			11			18
Amortization of prior service cost	1			1			1			1
Net periodic pension cost	$	9		$	14		$	18		$	27

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,
	2014			2013			2014			2013
	(in millions)
U.S.
Interest cost on accumulated post-retirement benefit obligation	$	2		$	2		$	4		$	4
Expected return on plan assets	(1		)	(1		)	(2		)	(2		)
Amortization of loss	—			1			—			1
Net periodic other post-retirement benefit cost	$	1		$	2		$	2		$	3
Canada
Service cost benefit earned	$	1		$	1		$	2		$	2
Interest cost on accumulated post-retirement benefit obligation	2			1			3			3
Net periodic other post-retirement benefit cost	$	3		$	2		$	5		$	5

Retirement/Savings Plan

In addition to the retirement plans described above, we also have defined contribution employee savings plans available to both U.S. and Canadian employees. Employees may participate in a matching contribution where we match a certain percentage of before-tax employee contributions of up to 6% of eligible pay per pay period for U.S. employees and up to 5% of eligible pay per pay period for Canadian employees. We expensed pre-tax employer matching contributions of $4 million in both the three-month periods ended June 30, 2014 and 2013 and $7 million in both the six-month periods ended June 30, 2014 and 2013 for U.S. employees. We expensed pre-tax employer matching contributions of $3 million in both the three-month periods ended June 30, 2014 and 2013 and $6 million in both the six-month periods ended June 30, 2014 and 2013 for Canadian employees.

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Regulatory Matters - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended			3 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 Union Gas Limited Other Current Liabilities	Jun. 30, 2014 Favorable Regulatory Action Union Gas Limited	Mar. 31, 2014 Favorable Regulatory Action Union Gas Limited	Mar. 31, 2014 Positive Outcome of Litigation Union Gas Limited
Regulatory Matters [Line Items]
Earnings Before Income Taxes	$ 253	$ 288	$ 884	$ 788		$ 7	$ 10
Regulatory assets					21
Transportation, storage and processing of natural gas	780	766	1,667	1,566			32
Sales of natural gas liquids	40	65	227	177				15
Other	54	39	126	78				7
Operating revenues	1,253	1,220	3,096	2,809
Operating Expenses	$ 405	$ 410	$ 768	$ 742

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Issuances of SEP Units(Tables)

6 Months Ended

Jun. 30, 2014

Noncontrolling Interest [Abstract]

Effects of Changes in Ownership Interests in Non-Wholly Owned Consolidated Subsidiaries

The following table presents the effects of the issuances of SEP units:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(in millions)
Net income-controlling interests	$	146	$	199	$	565	$	539
Increase in additional paid-in capital resulting from issuances of SEP units	19		38		29		38
Total net income-controlling interests and changes in equity-controlling interests	$	165	$	237	$	594	$	577

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Condensed Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Current Assets
Cash and cash equivalents	$ 300	$ 201
Receivables, net	1,222	1,336
Inventory	277	263
Fuel Tracker	165	28
Other	241	253
Total current assets	2,205	2,081
Investments and Other Assets
Investments in and loans to unconsolidated affiliates	2,803	3,043
Goodwill	4,841	4,810
Other	398	385
Total investments and other assets	8,042	8,238
Property, Plant and Equipment
Cost	29,223	28,456
Less accumulated depreciation and amortization	6,963	6,627
Net property, plant and equipment	22,260	21,829
Regulatory Assets and Deferred Debits	1,439	1,385
Total Assets	33,946	33,533
Current Liabilities
Accounts payable	518	440
Commercial paper	769	1,032
Taxes accrued	103	72
Interest accrued	193	201
Current maturities of long-term debt	496	1,197
Other	1,077	1,097
Total current liabilities	3,156	4,039
Long-term Debt	13,141	12,488
Deferred Credits and Other Liabilities
Deferred income taxes	5,223	4,968
Regulatory and other	1,423	1,457
Total deferred credits and other liabilities	6,646	6,425
Commitments and Contingencies
Preferred Stock of Subsidiaries	258	258
Equity
Preferred stock, $0.001 par, 22 million shares authorized, no shares outstanding	0	0
Common stock, $0.001 par, 1 billion shares authorized, 671 million and 670 million shares outstanding at June 30, 2014 and December 31, 2013, respectively	1	1
Additional paid-in capital	4,918	4,869
Retained earnings	2,497	2,383
Accumulated other comprehensive income	1,236	1,241
Total controlling interests	8,652	8,494
Noncontrolling interests	2,093	1,829
Total equity	10,745	10,323
Total Liabilities and Equity	$ 33,946	$ 33,533

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Acquisition of Express-Platte

6 Months Ended

Jun. 30, 2014

Acquisition of Express-Platte [Abstract]

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

Acquisition of Express-Platte

In March 2013, we acquired 100% of the ownership interests in the Express-Platte crude oil pipeline system for $1.5 billion, consisting of $1.25 billion in cash and $260 million of acquired debt, before working capital adjustments. The Express-Platte pipeline system, which begins in Hardisty, Alberta, and terminates in Wood River, Illinois, is comprised of both the Express and Platte crude oil pipelines. The Express pipeline carries crude oil to U.S. refining markets in the Rockies area, including Montana, Wyoming, Colorado and Utah. The Platte pipeline, which interconnects with Express pipeline in Casper, Wyoming, transports crude oil predominantly from the Bakken shale and western Canada to refineries in the Midwest. In 2013, subsidiaries of Spectra Energy contributed a 100% interest in the U.S. portion of Express-Platte and sold a 100% ownership interest in the Canadian portion to SEP.

The following table summarizes the fair values of the assets and liabilities acquired as of the date of the acquisition.

	Purchase Price  Allocation
	(in millions)
Cash purchase price	$	1,250
Working capital and other purchase adjustments	71
Total	1,321
Cash	67
Receivables	25
Other current assets	9
Property, plant and equipment	1,251
Accounts payable	(18		)
Other current liabilities	(17		)
Deferred credits and other liabilities	(259		)
Long-term debt, including current portion	(260		)
Total assets acquired/liabilities assumed	798
Goodwill	$	523

The purchase price is greater than the sum of fair values of the net assets acquired, resulting in goodwill as noted above. The goodwill reflects the value of the strategic location of the pipeline and the opportunity to grow the business. Goodwill related to the acquisition of Express-Platte is not deductible for income tax purposes.

The allocation of the fair values of assets and liabilities acquired related to the acquisition of Express-Platte was finalized in the first quarter of 2014, resulting in the following adjustments to amounts reported as of December 31, 2013: a $60 million decrease in Property, Plant and Equipment, a $1 million decrease in Other Current Assets and a $24 million decrease in Deferred Credits and Other Liabilities, resulting in a $37 million increase in Goodwill.

Pro forma results of operations that reflect the acquisition of Express-Platte as if the acquisition had occurred as of the beginning of 2013 are not presented as they do not materially differ from actual results reported in our Condensed Consolidated Statements of Operations.

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Marketable Securities and Restricted Funds - Schedule of Restricted and Non-restricted Available for Sale Securities (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Total available-for-sale securities	$ 25	$ 19
Investments and other assets-other
Schedule of Available-for-sale Securities [Line Items]
Restricted funds, Investments and other assets - other	1	1
Non-restricted funds, Investments and other assets - other	24	11
Other Current Assets
Schedule of Available-for-sale Securities [Line Items]
Non-restricted funds, Current assets - other	$ 0	$ 7

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Risk Management and Hedging Activities - Commodity derivative impact (Details) (Commodity Contract, USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2014
Commodity Contract
Commodity derivative impact [Line Items]
Commodity derivatives - Sales of natural gas liquids	$ (4)	$ (7)

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Consolidating Financial Information

6 Months Ended

Jun. 30, 2014

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Consolidating Financial Information

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 Statements of Operations

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Three Months Ended June 30, 2014
Total operating revenues	$	—		$	—		$	1,253		$	—		$	1,253
Total operating expenses	—			1			914			—			915
Operating income (loss)	—			(1		)	339			—			338
Equity in earnings of unconsolidated affiliates	—			—			85			—			85
Equity in earnings of consolidated subsidiaries	125			264			—			(389		)	—
Other income and expenses, net	(1		)	—			7			—			6
Interest expense	—			66			110			—			176
Earnings before income taxes	124			197			321			(389		)	253
Income tax expense (benefit)	(22		)	72			15			—			65
Net income	146			125			306			(389		)	188
Net income—noncontrolling interests	—			—			42			—			42
Net income—controlling interests	$	146		$	125		$	264		$	(389	)	$	146
Three Months Ended June 30, 2013
Total operating revenues	$	—		$	—		$	1,220		$	—		$	1,220
Total operating expenses	1			—			865			—			866
Operating income (loss)	(1		)	—			355			—			354
Equity in earnings of unconsolidated affiliates	—			—			72			—			72
Equity in earnings of consolidated subsidiaries	194			317			—			(511		)	—
Other income and expenses, net	(1		)	1			22			—			22
Interest expense	—			51			109			—			160
Earnings before income taxes	192			267			340			(511		)	288
Income tax expense (benefit)	(7		)	73			(4		)	—			62
Net income	199			194			344			(511		)	226
Net income—noncontrolling interests	—			—			27			—			27
Net income—controlling interests	$	199		$	194		$	317		$	(511	)	$	199

Spectra Energy Corp

Condensed Consolidating Statements of Operations

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Six Months Ended June 30, 2014
Total operating revenues	$	—		$	—		$	3,097	$	(1	)	$	3,096
Total operating expenses	4			1			2,115		(1		)	2,119
Operating income (loss)	(4		)	(1		)	982		—			977
Equity in earnings of unconsolidated affiliates	—			—			246		—			246
Equity in earnings of consolidated subsidiaries	540			899			—		(1,439		)	—
Other income and expenses, net	(2		)	1			16		—			15
Interest expense	—			131			223		—			354
Earnings before income taxes	534			768			1,021		(1,439		)	884
Income tax expense (benefit)	(31		)	228			32		—			229
Net income	565			540			989		(1,439		)	655
Net income—noncontrolling interests	—			—			90		—			90
Net income—controlling interests	$	565		$	540		$	899	$	(1,439	)	$	565
Six Months Ended June 30, 2013
Total operating revenues	$	—		$	—		$	2,810	$	(1	)	$	2,809
Total operating expenses	3			—			1,947		(1		)	1,949
Operating income (loss)	(3		)	—			863		—			860
Equity in earnings of unconsolidated affiliates	—			—			182		—			182
Equity in earnings of consolidated subsidiaries	531			826			—		(1,357		)	—
Other income and expenses, net	(3		)	4			54		—			55
Interest expense	—			99			210		—			309
Earnings before income taxes	525			731			889		(1,357		)	788
Income tax expense (benefit)	(14		)	200			6		—			192
Net income	539			531			883		(1,357		)	596
Net income—noncontrolling interests	—			—			57		—			57
Net income—controlling interests	$	539		$	531		$	826	$	(1,357	)	$	539

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, 2014
Net income	$	146	$	125	$	306		$	(389	)	$	188
Other comprehensive income	2		—		229			—			231
Total comprehensive income, net of tax	148		125		535			(389		)	419
Less: comprehensive income—noncontrolling interests	—		—		45			—			45
Comprehensive income—controlling interests	$	148	$	125	$	490		$	(389	)	$	374
Three Months Ended June 30, 2013
Net income	$	199	$	194	$	344		$	(511	)	$	226
Other comprehensive income (loss)	3		1		(244		)	—			(240		)
Total comprehensive income (loss), net of tax	202		195		100			(511		)	(14		)
Less: comprehensive income—noncontrolling interests	—		—		25			—			25
Comprehensive income (loss)—controlling interests	$	202	$	195	$	75		$	(511	)	$	(39	)

Six Months Ended June 30, 2014
Net income	$	565	$	540	$	989		$	(1,439	)	$	655
Other comprehensive income (loss)	4		—		(10		)	—			(6		)
Total comprehensive income, net of tax	569		540		979			(1,439		)	649
Less: comprehensive income—noncontrolling interests	—		—		89			—			89
Comprehensive income—controlling interests	$	569	$	540	$	890		$	(1,439	)	$	560
Six Months Ended June 30, 2013
Net income	$	539	$	531	$	883		$	(1,357	)	$	596
Other comprehensive income (loss)	7		1		(420		)	—			(412		)
Total comprehensive income, net of tax	546		532		463			(1,357		)	184
Less: comprehensive income—noncontrolling interests	—		—		52			—			52
Comprehensive income—controlling interests	$	546	$	532	$	411		$	(1,357	)	$	132

Spectra Energy Corp

Condensed Consolidating Balance Sheet

June 30, 2014

(Unaudited)

(In millions)

	Spectra Energy Corp		Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Cash and cash equivalents	$	—	$	2	$	298	$	—		$	300
Receivables—consolidated subsidiaries	20		—		9		(29		)	—
Receivables—other	1		—		1,221		—			1,222
Other current assets	15		11		657		—			683
Total current assets	36		13		2,185		(29		)	2,205
Investments in and loans to unconsolidated affiliates	—		—		2,803		—			2,803
Investments in consolidated subsidiaries	14,574		20,993		—		(35,567		)	—
Advances receivable—consolidated subsidiaries	—		4,417		755		(5,172		)	—
Notes receivable—consolidated subsidiaries	—		—		3,215		(3,215		)	—
Goodwill	—		—		4,841		—			4,841
Other assets	42		30		326		—			398
Property, plant and equipment, net	—		—		22,260		—			22,260
Regulatory assets and deferred debits	3		15		1,421		—			1,439
Total Assets	$	14,655	$	25,468	$	37,806	$	(43,983	)	$	33,946
Accounts payable—other	$	3	$	1	$	514	$	—		$	518
Accounts payable—consolidated subsidiaries	—		11		18		(29		)	—
Commercial paper	—		220		549		—			769
Short-term borrowings—consolidated subsidiaries	—		415		—		(415		)	—
Taxes accrued	2		—		101		—			103
Current maturities of long-term debt	—		408		88		—			496
Other current liabilities	64		75		1,131		—			1,270
Total current liabilities	69		1,130		2,401		(444		)	3,156
Long-term debt	—		2,899		10,242		—			13,141
Advances payable—consolidated subsidiaries	5,172		—		—		(5,172		)	—
Notes payable—consolidated subsidiaries	—		2,800		—		(2,800		)	—
Deferred credits and other liabilities	762		4,065		1,819		—			6,646
Preferred stock of subsidiaries	—		—		258		—			258
Equity
Controlling interests	8,652		14,574		20,993		(35,567		)	8,652
Noncontrolling interests	—		—		2,093		—			2,093
Total equity	8,652		14,574		23,086		(35,567		)	10,745
Total Liabilities and Equity	$	14,655	$	25,468	$	37,806	$	(43,983	)	$	33,946

Spectra Energy Corp

Condensed Consolidating Balance Sheet

December 31, 2013

(Unaudited)

(In millions)

	Spectra Energy Corp		Spectra Capital		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Cash and cash equivalents	$	—	$	12	$	189	$	—		$	201
Receivables—consolidated subsidiaries	176		394		—		(570		)	—
Receivables—other	1		—		1,335		—			1,336
Other current assets	40		15		489		—			544
Total current assets	217		421		2,013		(570		)	2,081
Investments in and loans to unconsolidated affiliates	—		—		3,043		—			3,043
Investments in consolidated subsidiaries	13,244		19,403		—		(32,647		)	—
Advances receivable—consolidated subsidiaries	—		4,038		677		(4,715		)	—
Notes receivable—consolidated subsidiaries	—		—		3,215		(3,215		)	—
Goodwill	—		—		4,810		—			4,810
Other assets	39		30		316		—			385
Property, plant and equipment, net	—		—		21,829		—			21,829
Regulatory assets and deferred debits	3		17		1,365		—			1,385
Total Assets	$	13,503	$	23,909	$	37,268	$	(41,147	)	$	33,533
Accounts payable—other	$	4	$	—	$	436	$	—		$	440
Accounts payable—consolidated subsidiaries	89		—		481		(570		)	—
Commercial paper	—		344		688		—			1,032
Short-term borrowings—consolidated subsidiaries	—		415		—		(415		)	—
Taxes accrued	4		—		68		—			72
Current maturities of long-term debt	—		557		640		—			1,197
Other current liabilities	81		75		1,142		—			1,298
Total current liabilities	178		1,391		3,455		(985		)	4,039
Long-term debt	—		2,605		9,883		—			12,488
Advances payable—consolidated subsidiaries	4,715		—		—		(4,715		)	—
Notes payable—consolidated subsidiaries	—		2,800		—		(2,800		)	—
Deferred credits and other liabilities	116		3,869		2,440		—			6,425
Preferred stock of subsidiaries	—		—		258		—			258
Equity
Controlling interests	8,494		13,244		19,403		(32,647		)	8,494
Noncontrolling interests	—		—		1,829		—			1,829
Total equity	8,494		13,244		21,232		(32,647		)	10,323
Total Liabilities and Equity	$	13,503	$	23,909	$	37,268	$	(41,147	)	$	33,533

Spectra Energy Corp

Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2014

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	565		$	540		$	989		$	(1,439	)	$	655
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	—			—			405			—			405
Equity in earnings of unconsolidated affiliates	—			—			(246		)	—			(246		)
Equity in earnings of consolidated subsidiaries	(540		)	(899		)	—			1,439			—
Distributions received from unconsolidated affiliates	—			—			199			—			199
Other	(36		)	229			3			—			196
Net cash provided by (used in) operating activities	(11		)	(130		)	1,350			—			1,209
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	—			—			(833		)	—			(833		)
Investments in and loans to unconsolidated affiliates	—			—			(30		)	—			(30		)
Purchases of held-to-maturity securities	—			—			(437		)	—			(437		)
Proceeds from sales and maturities of held-to-maturity securities	—			—			453			—			453
Purchases of available-for-sale securities	—			—			(13		)	—			(13		)
Proceeds from sales and maturities of available-for-sale securities	—			—			7			—			7
Distributions received from unconsolidated affiliates	—			—			242			—			242
Advances from affiliates	85			91			—			(176		)	—
Other changes in restricted funds	—			—			(1		)	—			(1		)
Net cash provided by (used in) investing activities	85			91			(612		)	(176		)	(612		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	—			300			412			—			712
Payments for the redemption of long-term debt	—			(148		)	(588		)	—			(736		)
Net decrease in commercial paper	—			(124		)	(132		)	—			(256		)
Distributions to noncontrolling interests	—			—			(81		)	—			(81		)
Contributions from noncontrolling interests	—			—			112			—			112
Dividends paid on common stock	(453		)	—			—			—			(453		)
Proceeds from the issuance of SEP common units	—			—			191			—			191
Distributions and advances from (to) affiliates	366			1			(543		)	176			—
Other	13			—			(1		)	—			12
Net cash provided by (used in) financing activities	(74		)	29			(630		)	176			(499		)
Effect of exchange rate changes on cash	—			—			1			—			1
Net increase (decrease) in cash and cash equivalents	—			(10		)	109			—			99
Cash and cash equivalents at beginning of period	—			12			189			—			201
Cash and cash equivalents at end of period	$	—		$	2		$	298		$	—		$	300

Spectra Energy Corp

Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2013

(Unaudited)

(In millions)

	Spectra Energy Corp			Spectra Capital			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	539		$	531		$	883		$	(1,357	)	$	596
Adjustments to reconcile net income to net cashprovided by operating activities:
Depreciation and amortization	—			—			388			—			388
Equity in earnings of unconsolidated affiliates	—			—			(182		)	—			(182		)
Equity in earnings of consolidated subsidiaries	(531		)	(826		)	—			1,357			—
Distributions received from unconsolidated affiliates	—			—			147			—			147
Other	(7		)	335			(77		)	—			251
Net cash provided by operating activities	1			40			1,159			—			1,200
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	—			—			(959		)	—			(959		)
Investments in and loans to unconsolidated affiliates	—			—			(168		)	—			(168		)
Acquisitions, net of cash acquired	—			—			(1,254		)	—			(1,254		)
Purchases of held-to-maturity securities	—			—			(456		)	—			(456		)
Proceeds from sales and maturities of held-to-maturity securities	—			—			463			—			463
Purchases of available-for-securities	—			—			(2,899		)	—			(2,899		)
Proceeds from sales and maturities of available-for-sale securities	—			—			2,722			—			2,722
Distributions received from unconsolidated affiliates	—			—			13			—			13
Advances from (to) affiliates	156			(589		)	—			433			—
Other changes in restricted funds	—			—			1			—			1
Other	—			—			2			—			2
Net cash provided by (used in) investing activities	156			(589		)	(2,535		)	433			(2,535		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	—			1,848			—			—			1,848
Payments for the redemption of long-term debt	—			(495		)	(51		)	—			(546		)
Net increase (decrease) in commercial paper	—			615			(175		)	—			440
Net decrease in short-term borrowings—consolidated subsidiaries	—			(9		)	—			9			—
Distributions to noncontrolling interests	—			—			(69		)	—			(69		)
Dividends paid on common stock	(412		)	—			—			—			(412		)
Proceeds from the issuance of SEP common units	—			—			190			—			190
Distributions and advances from (to) affiliates	240			(1,405		)	1,607			(442		)	—
Other	15			(6		)	1			—			10
Net cash provided by (used in) financing activities	(157		)	548			1,503			(433		)	1,461
Effect of exchange rate changes on cash	—			—			(3		)	—			(3		)
Net increase (decrease) in cash and cash equivalents	—			(1		)	124			—			123
Cash and cash equivalents at beginning of period	—			3			91			—			94
Cash and cash equivalents at end of period	$	—		$	2		$	215		$	—		$	217

XML

Employee Benefit Plans - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Canada Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Service cost benefit earned	$ 8	$ 8	$ 15	$ 16
Contribution to retirement plans			26	46
Anticipated contributions to the defined benefit plans in 2014			40
U.S. Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Service cost benefit earned	4	4	9	9
Contribution to retirement plans			10	11
Anticipated contributions to the defined benefit plans in 2014			22
U.S. Other Post-Retirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Percentage of employer contribution to eligible pay per pay period			6.00%
Expensed pre-tax employer matching contributions	4	4	7	7
Canadian Other Post-Retirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost benefit earned	1	1	2	2
Percentage of employer contribution to eligible pay per pay period			5.00%
Expensed pre-tax employer matching contributions	$ 3	$ 3	$ 6	$ 6

XML

Debt and Credit Facilities (Tables)

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Available Credit Facilities and Restrictive Debt Covenants

Available Credit Facilities and Restrictive Debt Covenants

	Expiration Date	Total Credit Facilities Capacity		Commercial Paper Outstanding at June 30, 2014		Available Credit Facilities Capacity
		(in millions)
Spectra Energy Capital, LLC (a)	2018	$	1,000	$	220	$	780
SEP (b)	2018	2,000		549		1,451
Westcoast Energy Inc. (c)	2016	281		—		281
Union Gas (d)	2016	375		—		375
Total		$	3,656	$	769	$	2,887

___________

(a) Revolving 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%. Per the terms of the agreement, collateralized debt is excluded from the calculation of the ratio. This ratio was 56% at June 30, 2014.

(b) Revolving credit facility contains a covenant that requires SEP to maintain a ratio of total Consolidated Indebtedness-to-Consolidated EBITDA, as defined in the credit agreement, of 5.0 to 1 or less, provided that for three fiscal quarters subsequent to certain acquisitions (such as the November 1, 2013 U.S. Assets Dropdown from Spectra Energy Corp), the ratio may be 5.5 to 1 or less. As of June 30, 2014, this ratio was 3.9 to 1 after giving effect to the U.S. Assets Dropdown.

(c) U.S. dollar equivalent at June 30, 2014. The revolving 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 41% at June 30, 2014.

(d) U.S. dollar equivalent at June 30, 2014. The revolving 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, 2014.

XML

Debt and Credit Facilities

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Debt and Credit Facilities

Debt and Credit Facilities

Available Credit Facilities and Restrictive Debt Covenants

	Expiration Date	Total Credit Facilities Capacity		Commercial Paper Outstanding at June 30, 2014		Available Credit Facilities Capacity
		(in millions)
Spectra Energy Capital, LLC (a)	2018	$	1,000	$	220	$	780
SEP (b)	2018	2,000		549		1,451
Westcoast Energy Inc. (c)	2016	281		—		281
Union Gas (d)	2016	375		—		375
Total		$	3,656	$	769	$	2,887

___________

(a) Revolving 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%. Per the terms of the agreement, collateralized debt is excluded from the calculation of the ratio. This ratio was 56% at June 30, 2014.

(b) Revolving credit facility contains a covenant that requires SEP to maintain a ratio of total Consolidated Indebtedness-to-Consolidated EBITDA, as defined in the credit agreement, of 5.0 to 1 or less, provided that for three fiscal quarters subsequent to certain acquisitions (such as the November 1, 2013 U.S. Assets Dropdown from Spectra Energy Corp), the ratio may be 5.5 to 1 or less. As of June 30, 2014, this ratio was 3.9 to 1 after giving effect to the U.S. Assets Dropdown.

(c) U.S. dollar equivalent at June 30, 2014. The revolving 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 41% at June 30, 2014.

(d) U.S. dollar equivalent at June 30, 2014. The revolving 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, 2014.

The issuances of commercial paper, letters of credit and revolving borrowings reduce the amount available under the credit facilities. As of June 30, 2014, there were no letters of credit issued or revolving borrowings outstanding under the credit facilities.

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, 2014, 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.

Debt Issuances. On June 2, 2014, Union Gas issued 200 million Canadian dollars (approximately $183 million as of the issuance date) of 2.76% unsecured notes due 2021 and 250 million Canadian dollars (approximately $229 million as of the issuance date) of 4.20% unsecured notes due 2044. Net proceeds from the offerings were used for general corporate purposes.

In January 2014, Spectra Energy Capital, LLC (Spectra Capital) borrowed the full $300 million available under its unsecured term loan agreement. Interest on the borrowing is based on LIBOR (London Interbank Offered Rate) and the borrowing is due in 2018. Net proceeds from the borrowing were used for general corporate purposes.