Statement Of Income Alternative
Statement Of Income Alternative (USD $) | ||||
In Millions, except Per Share data | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
Operating Revenues | ||||
Transportation, storage and processing of natural gas | $655 | $586 | $1,885 | $1,764 |
Distribution of natural gas | 167 | 213 | 1,017 | 1,239 |
Sales of natural gas liquids | 73 | 219 | 246 | 623 |
Other | 38 | 62 | 106 | 187 |
Total operating revenues | 933 | 1,080 | 3,254 | 3,813 |
Operating Expenses | ||||
Natural gas and petroleum products purchased | 101 | 231 | 759 | 1,127 |
Operating, maintenance and other | 265 | 304 | 785 | 919 |
Depreciation and amortization | 149 | 144 | 429 | 437 |
Property and other taxes | 66 | 61 | 197 | 186 |
Total operating expenses | 581 | 740 | 2,170 | 2,669 |
Gains on Sales of Other Assets and Other, net | 1 | 0 | 11 | 32 |
Operating Income | 353 | 340 | 1,095 | 1,176 |
Other Income and Expenses | ||||
Equity in earnings of unconsolidated affiliates | 60 | 273 | 267 | 725 |
Other income and expenses, net | 12 | 9 | 35 | 30 |
Total other income and expenses | 72 | 282 | 302 | 755 |
Interest Expense | 160 | 163 | 456 | 470 |
Earnings From Continuing Operations Before Income Taxes | 265 | 459 | 941 | 1,461 |
Income Tax Expense From Continuing Operations | 54 | 145 | 260 | 453 |
Income From Continuing Operations | 211 | 314 | 681 | 1,008 |
Income (Loss) From Discontinued Operations, net of tax | 1 | (2) | 3 | (1) |
Net Income | 212 | 312 | 684 | 1,007 |
Net Income-Noncontrolling Interests | 21 | 16 | 55 | 49 |
Net Income-Controlling Interests | $191 | $296 | $629 | $958 |
Weighted-average shares outstanding | ||||
Basic | 646 | 615 | 640 | 626 |
Diluted | 647 | 617 | 641 | 629 |
Earnings per share from continuing operations | ||||
Basic | 0.3 | 0.49 | 0.98 | 1.54 |
Diluted | 0.3 | 0.48 | 0.98 | 1.53 |
Earnings per share | ||||
Basic | 0.3 | 0.48 | 0.98 | 1.53 |
Diluted | 0.3 | 0.48 | 0.98 | 1.52 |
Dividends per share | 0.25 | 0.25 | 0.75 | 0.71 |
Statement Of Financial Position
Statement Of Financial Position Classified (USD $) | ||
In Millions | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Dec. 31, 2008 |
Current Assets | ||
Cash and cash equivalents | $450 | $214 |
Receivables, net | 569 | 795 |
Inventory | 350 | 279 |
Other | 158 | 162 |
Total current assets | 1,527 | 1,450 |
Investments and Other Assets | ||
Investments in and loans to unconsolidated affiliates | 1,997 | 2,152 |
Goodwill | 3,901 | 3,381 |
Other | 408 | 417 |
Total investments and other assets | 6,306 | 5,950 |
Property, Plant and Equipment | ||
Cost | 19,608 | 17,569 |
Less accumulated depreciation and amortization | 4,499 | 3,930 |
Net property, plant and equipment | 15,109 | 13,639 |
Regulatory Assets and Deferred Debits | 996 | 885 |
Total Assets | 23,938 | 21,924 |
Current Liabilities | ||
Accounts payable | 192 | 285 |
Short-term borrowings and commercial paper | 44 | 936 |
Taxes accrued | 172 | 105 |
Interest accrued | 183 | 158 |
Current maturities of long-term debt | 813 | 821 |
Other | 853 | 739 |
Total current liabilities | 2,257 | 3,044 |
Long-term Debt | 9,347 | 8,290 |
Deferred Credits and Other Liabilities | ||
Deferred income taxes | 3,039 | 2,789 |
Regulatory and other | 1,590 | 1,566 |
Total deferred credits and other liabilities | 4,629 | 4,355 |
Commitments and Contingencies | - | - |
Preferred Stock of Subsidiaries | 225 | 225 |
Stockholders' Equity | ||
Preferred stock, $0.001 par, 22 million shares authorized, no shares outstanding | 0 | 0 |
Common stock, $0.001 par, 1 billion shares authorized, 647 million and 611 million shares outstanding at September 30, 2009 and December 31, 2008, respectively | 1 | 1 |
Additional paid-in capital | 4,679 | 4,104 |
Retained earnings | 1,041 | 899 |
Accumulated other comprehensive income | 1,217 | 536 |
Total controlling interests | 6,938 | 5,540 |
Noncontrolling interests | 542 | 470 |
Total stockholders' equity | 7,480 | 6,010 |
Total Liabilities and Stockholders' Equity | $23,938 | $21,924 |
1_Statement Of Financial Positi
Statement Of Financial Position Classified (Parenthetical) (USD $) | ||
Sep. 30, 2009
| Dec. 31, 2008
| |
Preferred stock, par | 0.001 | 0.001 |
Preferred stock, shares authorized | 22,000,000 | 22,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par | 0.001 | 0.001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares outstanding | 647,000,000 | 611,000,000 |
Statement Of Cash Flows Indirec
Statement Of Cash Flows Indirect (USD $) | ||
In Millions | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $684 | $1,007 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 440 | 445 |
Deferred income tax expense | 125 | 61 |
Equity in earnings of unconsolidated affiliates | (267) | (725) |
Distributions received from unconsolidated affiliates | 107 | 691 |
Other | 178 | (83) |
Net cash provided by operating activities | 1,267 | 1,396 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capital expenditures | (713) | (1,038) |
Investments in and loans to unconsolidated affiliates | (55) | (497) |
Acquisitions, net of cash acquired | (295) | (274) |
Purchases of available-for-sale securities | 0 | (1,289) |
Proceeds from sales and maturities of available-for-sale securities | 32 | 1,354 |
Distributions received from unconsolidated affiliates | 148 | 180 |
Receipt from affiliate-repayment of loan | 186 | 0 |
Other | (35) | 0 |
Net cash used in investing activities | (732) | (1,564) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from the issuance of long-term debt | 3,405 | 2,972 |
Payments for the redemption of long-term debt | (2,839) | (1,801) |
Net increase (decrease) in short-term borrowings and commercial paper | (892) | 204 |
Distributions to noncontrolling interests | (153) | (50) |
Contributions from noncontrolling interests | 2 | 112 |
Proceeds from the issuance of Spectra Energy common stock | 448 | 0 |
Proceeds from the issuance of Spectra Energy Partners, LP common units | 208 | 0 |
Repurchases of Spectra Energy common stock | 0 | (600) |
Dividends paid on common stock | (471) | (444) |
Other | 3 | (39) |
Net cash provided by (used in) financing activities | (289) | 354 |
Effect of exchange rate changes on cash | (10) | 1 |
Net increase in cash and cash equivalents | 236 | 187 |
Cash and cash equivalents at beginning of period | 214 | 94 |
Cash and cash equivalents at end of period | $450 | $281 |
Statement Of Shareholders Equit
Statement Of Shareholders Equity And Other Comprehensive Income (USD $) | ||||||||
In Millions | Common Stock
| Additional Paid-in Capital
| Retained Earnings
| Accumulated Other Comprehensive Income Foreign Currency Translation Adjustments
| Accumulated Other Comprehensive Income Net Gains (Losses) on Cash Flow Hedges
| Accumulated Other Comprehensive Income Other
| Noncontrolling Interests
| Total
|
Beginning Balance at Dec. 31, 2007 | $1 | $4,658 | $368 | $2,033 | ($8) | ($195) | $581 | $7,438 |
Net income | 958 | 49 | 1,007 | |||||
Foreign currency translation adjustments | (411) | (9) | (420) | |||||
Reclassification of cash flow hedges into earnings | 1 | 1 | ||||||
Unrealized mark-to-market net loss on hedges | (9) | (9) | ||||||
Pension and benefits impact | 29 | 29 | ||||||
Common stock repurchases | (600) | (600) | ||||||
Dividends on common stock | (444) | (444) | ||||||
Stock-based compensation | 32 | 32 | ||||||
Acquisition of Spectra Energy Income Fund | (209) | (209) | ||||||
Distributions to noncontrolling interests | (53) | (53) | ||||||
Contributions from noncontrolling interests | 112 | 112 | ||||||
Other, net | 8 | 5 | 13 | |||||
Ending Balance at Sep. 30, 2008 | 1 | 4,098 | 882 | 1,622 | (16) | (166) | 476 | 6,897 |
Beginning Balance at Jun. 30, 2008 | 1 | |||||||
Ending Balance at Sep. 30, 2008 | 1 | |||||||
Beginning Balance at Dec. 31, 2008 | 1 | 4,104 | 899 | 881 | (17) | (328) | 470 | 6,010 |
Net income | 629 | 55 | 684 | |||||
Foreign currency translation adjustments | 673 | 10 | 683 | |||||
Unrealized mark-to-market net loss on hedges | (9) | (9) | ||||||
Pension and benefits impact | 19 | 19 | ||||||
Spectra Energy common stock issuance | 448 | 448 | ||||||
Spectra Energy Partners, LP common unit issuance | 25 | 168 | 193 | |||||
Reclassification of deferred gain on sale of units of Spectra Energy Partners, LP | 59 | 59 | ||||||
Dividends on common stock | (487) | (487) | ||||||
Stock-based compensation | 1 | 1 | ||||||
Distributions to noncontrolling interests | (157) | (157) | ||||||
Contributions from noncontrolling interests | 2 | 2 | ||||||
Other, net | 42 | (2) | (6) | 34 | ||||
Ending Balance at Sep. 30, 2009 | 1 | 4,679 | 1,041 | 1,554 | (26) | (311) | 542 | 7,480 |
Beginning Balance at Jun. 30, 2009 | 1 | |||||||
Ending Balance at Sep. 30, 2009 | $1 |
1. General
1. General | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
1. General | 1. General The terms we, our, us and Spectra Energy as used in this report refer collectively to Spectra Energy Corp and its subsidiaries unless the context suggests otherwise. These terms are used for convenience only and are not intended as a precise description of any separate legal entity within Spectra Energy. Nature of Operations. Spectra Energy Corp, through its subsidiaries and equity affiliates, owns and operates a large and diversified portfolio of complementary natural gas-related energy assets, operating in three key areas of the natural gas industry: gathering and processing, transmission and storage, and distribution. We provide transportation and storage of natural gas to customers in various regions of the northeastern and southeastern United States, the Maritime Provinces in Canada and the Pacific Northwest in the United States and Canada, and in the province of Ontario, Canada. We also provide natural gas sales and distribution services to retail customers in Ontario, and natural gas gathering and processing services to customers in Western Canada. In addition, we own a 50% interest in DCP Midstream, LLC (DCP Midstream), one of the largest natural gas gatherers and processors in the United States. Basis of Presentation. The accompanying Condensed Consolidated Financial Statements include our accounts, our majority-owned subsidiaries where we have control and those variable interest entities, if any, where we are the primary beneficiary. 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 December31, 2008, 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. Change in Accounting Policy. 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. Prior to 2009, we performed the annual impairment testing of goodwill using August31 as the measurement date. Our financial and strategic planning process, including the preparation of long-term cash flow projections, commences in October and typically concludes in January of the following year. These long-term cash flow projections are a key component in performing our annual impairment test of goodwi |
2. Acquisitions
2. Acquisitions | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
2. Acquisitions | 2. Acquisitions Ozark Gas Transmission and Ozark Gas Gathering Systems. On May4, 2009, Spectra Energy Partners acquired all of the ownership interests of NOARK Pipeline System, Limited Partnership (NOARK) from Atlas Pipeline Partners, L.P. (Atlas) for approximately $295 million in cash. NOARKs assets consisted of 100% ownership interests in Ozark Gas Transmission, L.L.C., a 565-mile Federal Energy Regulatory Commission (FERC) regulated interstate natural gas transmission system, and Ozark Gas Gathering, L.L.C., a 365-mile, fee-based, state-regulated natural gas gathering system. The transaction was initially funded by Spectra Energy Partners with $218 million drawn on its bank credit facility, $70 million borrowed under a credit facility with Spectra Energy that was created for the sole purpose of funding a portion of this acquisition, and $7 million of cash on hand. This transaction was partially refinanced by Spectra Energy Partners in the second quarter of 2009 through the issuance of 9.8million common units to the public, representing limited partner interests, and 0.2million general partner units to Spectra Energy, resulting in net proceeds of $212 million and a reduction of our ownership interest in Spectra Energy Partners from 84% to 74%. The net proceeds were comprised of $208 million for the common units and $4 million for the general partner units. Funds from the sale of the partner units were used by Spectra Energy Partners to repay the $70 million owed to Spectra Energy and $142 million of the amount drawn on the Spectra Energy Partners bank credit facility. Effective with the repayment to Spectra Energy, the credit facility with Spectra Energy was terminated. The following table summarizes the fair values of the assets acquired and liabilities assumed as of May4, 2009. PurchasePrice Allocation (in millions) Purchase price $ 295 Current assets 7 Property, plant and equipment, net 139 Regulatory assets and deferred debits 5 Current liabilities (5 ) Deferred credits and other liabilities (1 ) Total assets acquired/liabilities assumed 145 Goodwill $ 150 Pro forma results of operations reflecting the acquisition of NOARK, part of the U.S. Transmission segment, as if it had occurred as of the beginning of the periods presented in this report do not materially differ from actual reported results. Spectra Energy Income Fund. In May2008, we acquired the 24.4million units of the Spectra Energy Income Fund that were held by non-affiliated holders at a purchase price of 11.25 Canadian dollars per unit, for a total purchase price of 279million Canadian dollars (approximately $274 million). |
3. Business Segments
3. Business Segments | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
3. Business Segments | 3. Business Segments We manage our business in four reportable segments: U.S. Transmission, Distribution, Western Canada Transmission Processing and Field Services. The remainder of our business operations is presented as Other, and consists of unallocated corporate costs, wholly owned captive insurance subsidiaries, employee benefit plan assets and liabilities, and other miscellaneous activities. Our chief operating decision maker regularly reviews financial information about each of these business units in deciding how to allocate resources and evaluate performance. All of the business units are considered reportable segments under ASC 280, Segment Reporting. There is no aggregation within our defined business segments. U.S. Transmission provides transportation and storage of natural gas for customers in various regions of the northeastern and southeastern United States and the Maritime Provinces in Canada. The natural gas transmission and storage operations in the U.S. are primarily subject to the rules and regulations of the FERC. Distribution provides retail natural gas distribution service in Ontario, Canada, as well as natural gas transportation and storage services to other utilities and energy market participants. These services are provided by Union Gas Limited (Union Gas), and are primarily subject to the rules and regulations of the Ontario Energy Board (OEB). Western Canada Transmission Processing provides transportation of natural gas, natural gas gathering and processing services, and natural gas liquids (NGLs) extraction, fractionation, transportation, storage and marketing to customers in western Canada and the northern tier of the United States. This segment conducts business primarily through BC Pipeline, BC Field Services, and the NGL marketing and Midstream businesses. BC Pipelines and BC Field Services operations are primarily subject to the rules and regulations of Canadas National Energy Board (NEB). Field Services gathers and processes natural gas and fractionates, markets and trades NGLs. It conducts operations through DCP Midstream, which is owned 50% by us and 50% by ConocoPhillips. DCP Midstream gathers raw natural gas through gathering systems located in nine major 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. Our reportable segments offer different products and services and are managed separately as business units. Management evaluates segment performance based on earnings before interest and taxes (EBIT) from continuing operations, after deducting noncontrolling interests related to those profits. On a segment basis, EBIT excludes discontinued operations, represents all profits from continuing operations (both operating and non-operating) before deducting interest and taxes, and is net of noncontrolling interests related to those profits. Cash, cash equivalents and short-term investments are managed centrally, so the associated realized and unrealized gains and losses from foreign currency transactions and interest and dividend income on those balances are |
4. Regulatory Matters
4. Regulatory Matters | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
4. Regulatory Matters | 4. Regulatory Matters Union Gas. The OEB issued a decision under the incentive regulation framework in January 2009 providing for slight increases in rates for Union Gas small-volume customers and slight decreases for large-volume customers. Beginning April1, 2009, the new rates were retroactively applied to January1, 2009. In the second quarter of 2009, we recorded an $11 million charge to Operating RevenuesDistribution of Natural Gas on the Condensed Consolidated Statement of Operations as a result of a settlement with Union Gas stakeholders in June 2009 that was subsequently approved by the OEB.The settlement preserves the incentive regulation framework and replaces the provision for a review of the framework with a 90/10 sharing mechanism, in favor of customers, for any utility earnings of 300 basis points or more above the benchmark utility return on equity (ROE) for the year and is retroactive to 2008. The $11 million charge represents the adjustment to credit customers with 90% of Union Gas 2008 utility earnings that exceeded the 2008 benchmark utility ROE by 300 basis points. In September 2009, we filed an application with the OEB seeking approval of 2010 regulated distribution, storage and transmission rates, determined pursuant to the incentive regulation framework. The application proposes a delivery rate increase of less than 1% for a typical residential customer in our service territory. A decision by the OEB is expected before the end of the year. Maritimes Northeast Pipeline Limited Partnership (MN LP). During 2008, MN LP operated under an NEB-approved toll settlement that expired December31, 2008. MN LP obtained approval to operate under interim rates, effective January1, 2009, that were set to equal the 2008 rates. The final 2009 toll settlement rates were approved by the NEB in April 2009. MN LP implemented the new rates on a prospective basis effective May1, 2009 such that the total tolls charged during 2009 will result in revenues equal to those had the new 2009 rates been in effect for the entire year. Maritimes Northeast Pipeline, L.L.C. (MN LLC).On July1, 2009, MN LLC filed a rate case with the FERC. The rate case includes the impact of the Phase IV expansion facilities that went into service January15, 2009 and results in lower recourse rates. The lower recourse rates did not impact the rates negotiated with customers for service, which are charged to customers for over 90% of MN LLCs capacity, including its Phase IV expansion facilities. |
5. Income Taxes
5. Income Taxes | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
5. Income Taxes | 5. Income Taxes Income tax expense from continuing operations for the three and nine-month periods ended September30, 2009 was $54 million and $260 million, respectively, compared to $145 million and $453 million in the same periods in 2008, decreasing primarily as a result of lower earnings in 2009. The effective tax rate for income from continuing operations for the three months ended September30, 2009 was 20.4% as compared to 31.6% for the same period in 2008. The lower effective tax rate in 2009 was due to proportionally higher income generated from our Canadian operations, which are subject to lower tax rates as compared to our U.S. operations, and favorable tax settlements in 2009. The effective tax rate for income from continuing operations for the nine months ended September30, 2009 was 27.6% as compared to 31.0% for the same period in 2008. The lower effective tax rate in 2009 was primarily due to proportionally higher income generated from our Canadian operations. We recognized a $10 million decrease in unrecognized tax benefits during the nine-month period ended September30, 2009. Although uncertain, we believe it is reasonably possible that the total amount of unrecognized tax benefits could decrease by approximately $16 million prior to September30, 2010. The anticipated changes in unrecognized tax benefits relate to expiration of statutes of limitations and expected audit settlements focused primarily on classification of certain tax attributes, transfer pricing and income allocation. |
6. Discontinued Operations
6. Discontinued Operations | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
6. Discontinued Operations | 6. Discontinued Operations In December2008, we closed on the sale of our interests in the Nevis and Brazeau River natural gas gathering and processing facilities, which were part of the Western Canada Transmission Processing segment. Results of operations of these assets are reflected as discontinued operations in the Condensed Consolidated Statements of Operations for the 2008 periods presented. In June 2008, we entered into a settlement agreement related to certain liquefied natural gas transportation contracts under which our Spectra Energy LNG Sales Inc. subsidiarys claims were satisfied pursuant to commercial transactions involving the purchase of propane from certain parties. We subsequently entered into associated agreements with an affiliate of DCP Midstream and another party for the sale of these propane volumes. Net purchases and sales of propane under these arrangements are reflected as Other discontinued operations. The following table summarizes the results classified as Income (Loss) From Discontinued Operations, Net of Tax, in the Condensed Consolidated Statements of Operations. Operating Revenues Pre-tax Earnings (Loss) Income Tax Expense (Benefit) Income (Loss) From Discontinued Operations, Net of Tax (in millions) Three Months Ended September30, 2009 Western Canada Transmission Processing $ 1 $ 1 $ $ 1 Other 22 Total consolidated $ 23 $ 1 $ $ 1 Three Months Ended September30, 2008 Western Canada Transmission Processing $ 7 $ (3 ) $ (1 ) $ (2 ) Other 29 Total consolidated $ 36 $ (3 ) $ (1 ) $ (2 ) Nine Months Ended September30, 2009 Western Canada Transmission Processing $ 1 $ 1 $ $ 1 Other 88 3 1 2 Total consolidated $ 89 $ 4 $ 1 $ 3 Nine Months Ended September30, 2008 Western Canada Transmission Processing $ 23 $ (2 ) $ (1 ) $ (1 ) Other 59 1 1 Total consolidated $ 82 $ (1 ) $ $ (1 ) |
7. Comprehensive Income
7. Comprehensive Income | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
7. Comprehensive Income | 7. Comprehensive Income Components of comprehensive income are as follows: ThreeMonthsEnded September30, NineMonthsEnded September30, 2009 2008 2009 2008 (in millions) Net income $ 212 $ 312 $ 684 $ 1,007 Other comprehensive income (loss) Foreign currency translation adjustments 468 (272 ) 683 (420 ) Reclassification of cash flow hedges into earnings(a) 4 1 1 Unrealized mark-to-market net gain (loss) on hedges(b) (14 ) (23 ) (9 ) (9 ) Pension and benefits impact(c) (3 ) 3 19 29 Total comprehensive income, net of tax 667 21 1,377 608 Less: comprehensive incomenoncontrolling interests 27 10 65 40 Comprehensive incomecontrolling interests $ 640 $ 11 $ 1,312 $ 568 (a) Net of $4 million and $1 million of tax expense for the three months ended September30, 2009 and 2008, respectively, and $1 million of tax expense for the nine months ended September30, 2008. (b) Net of $4 million and $9 million of tax benefit for the three months ended September30, 2009 and 2008, respectively, and $1 million and $6 million of tax benefit for the nine months ended September30, 2009 and 2008, respectively. See Note 16 for further details of these amounts. (c) Net of $6 million and $1 million of tax expense for the three months ended September30, 2009 and 2008, respectively, and $15 million of tax expense and $14 million of tax benefit for the nine months ended September30, 2009 and 2008, respectively. |
8. Earnings per Common Share
8. Earnings per Common Share | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
8. Earnings per Common Share | 8. 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: ThreeMonthsEnded September30, NineMonthsEnded September30, 2009 2008 2009 2008 (in millions, exceptper-share amounts) Income from continuing operations, net of taxcontrolling interests $ 190 $ 299 $ 626 $ 962 Income (loss) from discontinued operations, net of taxcontrolling interests 1 (3 ) 3 (4 ) Net incomecontrolling interests $ 191 $ 296 $ 629 $ 958 Weighted-average common shares, outstanding Basic 646 615 640 626 Diluted 647 617 641 629 Basic earnings per common share Continuing operations $ 0.30 $ 0.49 $ 0.98 $ 1.54 Discontinued operations, net of tax (0.01 ) (0.01 ) Total basic earnings per common share $ 0.30 $ 0.48 $ 0.98 $ 1.53 Diluted earnings per common share Continuing operations $ 0.30 $ 0.48 $ 0.98 $ 1.53 Discontinued operations, net of tax (0.01 ) Total diluted earnings per common share $ 0.30 $ 0.48 $ 0.98 $ 1.52 Weighted-average shares used to calculate diluted EPS include the effect of certain options and restricted stock awards. Certain other options and stock awards related to approximately 11million and six million shares for the three months ended September30, 2009 and 2008, respectively, and 12million and seven million shares for the nine months ended September30, 2009 and 2008, respectively, were not included in the calculation of diluted EPS because either the option exercise prices were greater than the average market price of the common shares during these periods or performance measures related to the awards had not yet been met. |
9. Inventory
9. Inventory | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
9. Inventory | 9. Inventory Inventory consists primarily of natural gas and NGLs held in storage for transmission and processing, and also includes materials and supplies. Natural gas inventories primarily relate to the Distribution segment in Canada and are valued at costs approved by the OEB. The difference between the approved price and the actual cost of gas purchased is recorded in either accounts receivable or other current liabilities, as appropriate, for future disposition with customers, subject to approval by the OEB. The remaining inventory is recorded at cost, primarily using average cost. The components of inventory are as follows: September30, 2009 December31, 2008 (in millions) Natural gas $ 222 $ 180 NGLs 36 16 Materials and supplies 92 83 Total inventory $ 350 $ 279 |
10. Investments in and Loans to
10. Investments in and Loans to Unconsolidated Affiliates | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
10. Investments in and Loans to Unconsolidated Affiliates | 10. Investments in and Loans to Unconsolidated Affiliates Our most significant investment in unconsolidated affiliates is our 50% interest 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%. ThreeMonthsEnded September30, Nine Months Ended September30, 2009 2008 2009 2008 (in millions) Operating revenues $ 2,073 $ 4,892 $ 5,806 $ 13,769 Operating expenses 1,928 4,261 5,469 12,370 Operating income 145 631 337 1,399 Net income 93 586 158 1,284 Net income attributable to members interests 89 477 169 1,293 As a result of the adoption of SFAS No.160 (now ASC 810-10-65) on January1, 2009, DCP Midstream reclassified to equity certain deferred gains on sales of common units in its master limited partnership, DCP Midstream Partners, LP (DCP Partners). Our proportionate 50% share, totaling $135 million, was recorded in Equity in Earnings of Unconsolidated Affiliates on the Condensed Consolidated Statement of Operations in the first quarter of 2009. As further discussed in Note 6, we entered into a propane sales agreement with an affiliate of DCP Midstream in the second quarter of 2008. We recorded revenues of $21 million and $22 million in the three months ended September30, 2009 and 2008, respectively, and $65 million and $36 million in the nine months ended September30, 2009 and 2008, respectively, associated with this agreement, classified within Income (Loss) from Discontinued Operations, Net of Tax. We and the co-owner of Southeast Supply Header, LLC (SESH), an equity affiliate, previously entered into a loan agreement with SESH whereby each member agreed to loan funds to SESH in connection with the construction of its pipeline facilities. In August 2009, $137 million of the outstanding loan from us was re-characterized as a capital infusion to SESH. In addition, we received $186 million from SESH, recorded as Receipt From AffiliateRepayment of Loan on the Condensed Consolidated Statement of Cash Flows, representing full repayment of the remaining balance of the outstanding loan receivable. A portion of these funds were from the proceeds of a debt issuance by SESH. The loan receivable from SESH, including accrued interest, totaled $327 million at December31, 2008. In May2009, we received a $148 million special distribution from Gulfstream Natural Gas System, L.L.C. (Gulfstream), a 50% owned equity affiliate, from the proceeds of a debt issuance by Gulfstream, of which $144 million was classified as Cash Flows from Investing ActivitiesDistributions Received From Unconsolidated Affiliates on the Condensed Consolidated Statement of Cash Flows. We have also made loans to Steckman Ridge, LP, an equity affiliate, in connection with the construction of its storage facilities. The loan receivable from Steckman Ridge, LP, including accrued interest, totaled $68 million at September30, 2009 and $45 million at December31, 2008. |
11. Goodwill
11. Goodwill | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
11. Goodwill | 11. Goodwill We completed our annual goodwill impairment test as of April1, 2009 and no impairments were identified. We primarily use a discounted cash flow analysis to determine fair value for each reporting unit. Key assumptions in the determination of fair value include the use of an appropriate discount rate and estimated future cash flows. In estimating cash flows, we incorporate expected long-term growth rates in key markets served by our operations, regulatory stability, the ability to renew contracts, commodity prices (where appropriate), and foreign currency exchange rates, as well as other factors that affect our revenue, expense and capital expenditure projections. The long-term growth rates used for our reporting units reflect continued expansion of our assets, driven by new natural gas supplies such as shale gas in North America and, notwithstanding the current economic downturn, increasing demand for capacity on our pipeline systems.However, even if we assumed a zero growth rate for any reporting unit, there would be no impairment of goodwill. We continue to monitor the effects of the economic downturn that global economies are currently facing on the long-term cost of capital utilized to calculate our reporting unit fair values. However, a 1% increase in the weighted-average cost of capital assumption for any of our reporting units would not result in an impairment of goodwill.Additionally, for our regulated businesses in Canada, if an increase in the cost of capital occurred, the effect on the corresponding reporting units fair value would be ultimately offset by a similar increase in the reporting units regulated revenues since those rates include a component that is based on the reporting units cost of capital. The following table presents activity within goodwill based on the reporting unit determination. December31, 2008 Increases(a) September30, 2009 (in millions) U.S. Transmission $ 2,019 $ 347 $ 2,366 Distribution 727 92 819 Western Canada Transmission Processing 635 81 716 Total consolidated $ 3,381 $ 520 $ 3,901 (a) Increases consist of foreign currency translation and $150 million of goodwill at U.S. Transmission associated with the May 2009 acquisition of NOARK. See Note 2 for further discussion. |
12. Debt and Credit Facilities
12. Debt and Credit Facilities | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
12. Debt and Credit Facilities | 12. Debt and Credit Facilities Available Credit Facilities and Restrictive Debt Covenants Outstanding at September30, 2009 Expiration Date Credit Facilities Capacity Commercial Paper Revolving Loan Lettersof Credit Total (in millions) Spectra Energy Capital, LLC 2012 $ 1,500 (a) $ $ $ 21 $ 21 Westcoast Energy, Inc. 2011 187 (b) 44 44 Union Gas 2012 468 (c) Spectra Energy Partners 2012 500 240 240 Total $ 2,655 $ 44 $ 240 $ 21 $ 305 (a) Credit facility contains a covenant requiring the debt-to-total capitalization ratio to not exceed 65%. Amounts outstanding under the revolving credit facility are classified within Short-Term Borrowings and Commercial Paper on the Condensed Consolidated Balance Sheets. (b) U.S. dollar equivalent at September30, 2009. Credit facility is denominated in Canadian dollars totaling 200million Canadian dollars and contains a covenant that requires the debt-to-total capitalization ratio to not exceed 75%. (c) U.S. dollar equivalent at September30, 2009. Credit facility is denominated in Canadian dollars totaling 500million Canadian dollars and contains a covenant that requires the 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 issuance of commercial paper, letters of credit and other borrowings reduces the amounts available under the credit facilities. Our credit agreements contain various financial and other 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 September30, 2009, 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. None of the debt or credit agreements contain material adverse change clauses. Debt Issuances On August28, 2009, Spectra Energy Capital, LLC (Spectra Capital), a wholly owned consolidated subsidiary, issued $300 million of its 5.65% Senior Notes due 2020. The net proceeds of the offering were used to fund capital expenditures and for other general corporate purposes, including the repayment of Spectra Capitals 7.5% senior notes that matured on October1, 2009. On August24, 2009, MN LP, a 78%-owned consolidated subsidiary, issued 180million Canadian dollars (approximately $167 million as of the issuance date) of aggregate principal amount of its 4.34% Senior Secured Notes due 2019. The net proceeds of the offering were used to repay existing indebtedness and fund certain collateral accounts of MN LP. On May14, 2009, MN LLC, a 78%-owned con |
13. Fair Value Measurements
13. Fair Value Measurements | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
13. Fair Value Measurements | 13. Fair Value Measurements The following table presents, for each of the fair value hierarchy levels, assets and liabilities that are measured at fair value on a recurring basis: Description Condensed Consolidated Balance Sheet Caption September30, 2009 Total Level1 Level2 Level3 (in millions) Corporate debt securities Cash and cash equivalents $ 64 $ $ 64 $ Money market funds Cash and cash equivalents 365 365 Long-term derivative assets Investments and other assetsother 35 16 19 Money market funds Investments and other assetsother 29 29 Total Assets $ 493 $ 394 $ 80 $ 19 Long-term derivative liabilities Deferred credits and other liabilitiesregulatory and other $ 18 $ $ 18 $ Total Liabilities $ 18 $ $ 18 $ December31, 2008 Description CondensedConsolidatedBalanceSheetCaption Total Level1 Level2 Level3 (in millions) Money market funds Cash and cash equivalents $ 60 $ 60 $ $ Debt securities issued by foreign governments Cash and cash equivalents 6 6 Corporate debt securities Cash and cash equivalents 105 105 Money market funds Current assetsother 13 13 Short-term derivative assets Current assetsother 13 13 Money market funds Investments and other assetsother 51 51 Corporate debt securities Investments and other assetsother 25 25 Long-term derivative assets Investments and other assetsother 89 53 36 Total Assets $ 362 $ 130 $ 196 $ 36 Long-term derivative liabilities Deferred credits and other liabilitiesregulatory and other $ 23 $ $ 23 $ Total Liabilities $ 23 $ $ 23 $ The following table reconciles assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3). Short-Term Derivative Assets Short-Term Derivative Liabilities Long-Term Derivative Assets Long-Term Derivative Liabilities (in millions) Three Months Ended September30, 2009 Fair value at June30, 2009 $ $ $ 24 $ Total gains or losses (realized/unrealized): Included in earnings (1 ) Included in Investments and Other AssetsOther 2 Included in other comprehensive income (6 ) Fair value at September30, 2009 $ $ $ 19 $ Total gains (losses) for the period included in earnings (or changes in net assets) attributable to the change in unrealized gains orlosses relating to assets held at Sept |
14. Commitments and Contingenci
14. Commitments and Contingencies | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
14. Commitments and Contingencies | 14. Commitments and Contingencies Environmental We are subject to various international, federal, state and local regulations regarding air and water quality, hazardous and solid waste disposal and other environmental matters. These 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 international, federal, state/provincial and local agencies, activities vary with site conditions and locations, remedial requirements, complexity and sharing of responsibility. If remediation activities involve statutory joint and several liability provisions, strict liability, or cost recovery or contribution actions, we or our affiliates could potentially be held responsible for contamination caused by other parties. In some instances, we may share liability associated with contamination with other potentially responsible parties, and may also benefit from insurance policies or contractual indemnities that cover some or all cleanup costs. All of these sites generally are managed in the normal course of business or affiliated operations. Included in Deferred Credits and Other LiabilitiesRegulatory and Other on the Condensed Consolidated Balance Sheets are accruals related to extended environmental-related activities totaling $17 million at both September30, 2009 and December31, 2008. These accruals represent provisions for costs associated with remediation activities at some of our current and former sites, as well as other environmental contingent liabilities. Litigation Duke Energy Retirement Cash Balance Plan.A class action lawsuit was filed in federal court in South Carolina in 2006 against Duke Energy Corporation (Duke Energy) and the Duke Energy Retirement Cash Balance Plan. A second similar class action was also filed in 2006 alleging similar claims and seeking to represent the same class of plaintiffs, but this second case was dismissed without prejudice, and only the first case has moved forward. Various causes of action were alleged in the class action lawsuit, including violations of the Employee Retirement Income Security Act of 1974 (ERISA) and the Age Discrimination in Employment Act. These allegations arise out of the conversion of the Duke Power Company Employees Retirement Plan into the Duke Power Company Retirement Cash Balance Plan. The plaintiffs seek to represent present and former participants in the Duke Energy Retirement Cash Balance Plan. This group is estimated to include approximately 36,000 persons. Duke Energy filed its answer in March 2006, and various motions were thereafter filed by the parties, including plaintiffs motion to certify a class, Duke Energys motion to dismiss, and cross motions for summary judgment filed by both the plaintiffs and Duke Energy. The Court issued a ser |
15. Guarantees and Indemnificat
15. Guarantees and Indemnifications | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
15. Guarantees and Indemnifications | 15. Guarantees and Indemnifications We have various financial guarantees and indemnifications which are issued in the normal course of business. As discussed below, these contracts include financial guarantees, stand-by letters of credit, debt guarantees, surety bonds and indemnifications. We enter into these arrangements to facilitate a commercial transaction with a third party by enhancing the value of the transaction to the third party. To varying degrees, these guarantees involve elements of performance and credit risk, which are not included on the Condensed Consolidated Balance Sheets. The possibility of having to honor our contingencies 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-wholly owned entities. In connection with our spin-off from Duke Energy, certain guarantees that were previously issued by us have been 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 September30, 2009 was approximately $431 million, which has been indemnified by Duke Energy, as discussed above. Approximately $5 million of the performance guarantees expire in 2009 and 2010, with the remaining performance guarantees expiring after 2010 or having no contractual expiration. 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. D/FD is one of the entities transferred to Duke Energy in connection with our spin-off from Duke Energy. Substantially all of these guarantees have no contractual expiration and no stated maximum amount of future payments that we could be required to make. Fluor Enterprises Inc., as 50% owner in D/FD, has issued similar joint and several guarantees to the same D/FD project owners. In accordance with the D/FD partnership agreement, each of the partners is responsible for 50% of any payments to be made under those guarantees. Westcoast Energy Inc. (Westcoast), a wholly 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, 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; |
16. Risk Management and Hedging
16. Risk Management and Hedging Activities, Credit Risk and Financial Instruments | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
16. Risk Management and Hedging Activities, Credit Risk and Financial Instruments | 16. Risk Management and Hedging Activities, Credit Risk and Financial Instruments We are exposed to the impact of market fluctuations in the prices of NGLs and natural gas marketed and purchased primarily as a result of our investment in DCP Midstream and ownership of the Empress operations in Canada. 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 forward physical transactions as well as other commodity derivatives, primarily within DCP Midstream, such as swaps and options. Derivative Portfolio Carrying Value as of September30, 2009 Asset/(Liability) Maturity in2009 Maturity in2010 Maturity in2011 Maturity in 2012 and Thereafter Total Carrying Value (in millions) Hedging $ $ 4 $ (4 ) $ 35 $ 35 Undesignated (18 ) (18 ) Total $ $ 4 $ (4 ) $ 17 $ 17 These amounts represent the combination of amounts presented as assets (liabilities) for unrealized gains and losses on mark-to-market and hedging transactions on our Condensed Consolidated Balance Sheet and do not include any derivative positions of DCP Midstream. Commodity Cash Flow Hedges. Certain of our operations are exposed to market fluctuations in the prices of natural gas and NGLs related to natural gas gathering, distribution, processing and marketing activities. We closely monitor the potential effects of commodity price changes and may choose to enter into contracts to protect margins for a portion of future sales and fuel expenses by using financial commodity instruments, such as swaps, forward contracts and options, as cash flow hedges for natural gas and NGL transactions, primarily within the operations of DCP Midstream and Western Canada Transmission Processing. The ineffective portion of commodity cash flow hedges from continuing operations is reported in Other Income and Expenses, net in the Condensed Consolidated Statements of Operations. For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. We are party to natural gas purchase contracts to hedge forecasted purchases. These contracts are for notional amounts of 38million British thermal units as of September30, 2009. As of September30, 2009, $1 million of pre-tax deferred net losses on derivative instruments related to commodity cash flow hedges were accumulated in Accumulated Other Comprehensive Income (AOCI) |
17. Sales of Common Stock
17. Sales of Common Stock | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
17. Sales of Common Stock | 17. Sales of Common Stock On February13, 2009, we issued 32.2million shares of Spectra Energy common stock and received net proceeds of $448 million. We used the net proceeds to repay commercial paper as it matured. Borrowings from the commercial paper were used primarily for capital expenditures and for other general corporate purposes. |
18. Sale of Spectra Energy Part
18. Sale of Spectra Energy Partners Common Units | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
18. Sale of Spectra Energy Partners Common Units | 18. Sale of Spectra Energy Partners Common Units As previously discussed, in the second quarter of 2009, Spectra Energy Partners issued 9.8million common units to the public, representing limited partner interests, and 0.2million general partner units to Spectra Energy in connection with the refinancing of the purchase of NOARK, resulting in net proceeds of $212 million and a reduction of our ownership interest in Spectra Energy Partners from 84% to 74%. The net proceeds were comprised of $208 million for the common units and $4 million for the general partner units. See Note 2 for further discussion. In connection with the sale of the partner units, a $40 million gain ($25 million net of tax) resulting from the dilution of our ownership interest in Spectra Energy Partners was recorded in the second quarter of 2009 to Additional Paid-in Capital on the Condensed Consolidated Balance Sheet. The following table reflects Net IncomeControlling Interests and transfers from Noncontrolling Interests related to the sale of the partner units. ThreeMonthsEnded September 30, NineMonthsEnded September30, 2009 2008 2009 2008 (in millions) Net IncomeControlling Interests $ 191 $ 296 $ 629 $ 958 Increase in Additional Paid-in Capital 25 Total change from Net IncomeControlling Interests and transfers from Noncontrolling Interests $ 191 $ 296 $ 654 $ 958 |
19. Employee Benefit Plans
19. Employee Benefit Plans | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
19. Employee Benefit Plans | 19. Employee Benefit Plans Retirement Plans. We have a qualified non-contributory defined benefit (DB) retirement plan for U.S. employees and non-qualified plans for various executive retirement and savings plans. Our Westcoast subsidiary maintains qualified and non-qualified contributory DB and defined contribution (DC) retirement plans covering substantially all employees of our Canadian operations. Our policy is to fund amounts for our U.S. qualified retirement plans on an actuarial basis to provide assets sufficient to meet benefits to be paid to plan participants. We did not make contributions to our U.S. retirement plans in the nine-month periods ended September30, 2009 and 2008, and do not currently anticipate making contributions to these plans during the remainder of 2009. Our policy is to fund our DB retirement plans in Canada on an actuarial basis and in accordance with Canadian pension standards legislation in order to accumulate assets sufficient to meet benefit obligations. Contributions to the DC retirement plan are determined in accordance with the terms of the plan. We made contributions to the Canadian qualified DB plans of $40 million and $28 million during the nine-month periods ended September30, 2009 and 2008, respectively. We anticipate that we will make total contributions of approximately $58 million to the Canadian DB plans in 2009. We also made contributions to the Canadian DC plan of $4 million during each of the nine-month periods ended September30, 2009 and 2008. We anticipate that we will make total contributions of approximately $5 million to the Canadian DC plan in 2009. Qualified Pension PlansComponents of Net Periodic Pension Cost ThreeMonthsEnded September 30, NineMonthsEnded September30, 2009 2008 2009 2008 (in millions) U.S. Service cost benefit earned $ 2 $ 2 $ 7 $ 7 Interest cost on projected benefit obligation 7 6 20 20 Expected return on plan assets (9 ) (9 ) (25 ) (27 ) Amortization of loss 2 1 4 2 Net periodic pension cost $ 2 $ $ 6 $ 2 Canada Service cost benefit earned $ 3 $ 4 $ 9 $ 12 Interest cost on projected benefit obligation 10 10 28 30 Expected return on plan assets (11 ) (12 ) (31 ) (36 ) Amortization of loss 1 1 2 4 Amortization of prior service costs 1 Net periodic pension cost $ 3 $ 3 $ 9 $ 10 Non-Qualified Pension Benefits PlansComponents of Net Periodic Pension Cost ThreeMonthsEnded September30, NineMonthsEnded September30, 2009 2008 2009 2008 (in millions) U.S. Interest cost on projected benefit obligation $ $ $ 1 $ 1 Net periodic pension cost $ $ |
20. Consolidating Financial Inf
20. Consolidating Financial Information | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
20. Consolidating Financial Information | 20. 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 wholly owned, consolidated subsidiary. In accordance with Securities and Exchange Commission (SEC) rules, the following condensed consolidating financial information is presented. The information shown for us and Spectra Capital is presented utilizing the equity method of accounting for investments in subsidiaries, as required. The non-guarantor subsidiaries column represents all wholly owned subsidiaries of Spectra Capital. This information should be read in conjunction with our accompanying condensed consolidated financial statements and notes thereto. Spectra Energy Corp Condensed Consolidating Statement of Operations Three Months Ended September30, 2009 (In millions) Spectra Energy Corp Spectra Capital Non-Guarantor Subsidiaries Eliminations Consolidated Total operating revenues $ $ $ 933 $ $ 933 Total operating expenses 2 579 581 Gains on sales of other assets and other, net 1 1 Operating income (loss) (2 ) 355 353 Equity in earnings of unconsolidated affiliates 60 60 Equity in earnings of subsidiaries 192 272 (464 ) Other income and expenses, net 1 11 12 Interest expense 52 108 160 Earnings from continuing operations before income taxes 191 220 318 (464 ) 265 Income tax expense from continuing operations 28 26 54 Income from continuing operations 191 192 292 (464 ) 211 Income from discontinued operations, net of tax 1 1 Net income 191 192 293 (464 ) 212 Net incomenoncontrolling interests 21 21 Net incomecontrolling interests $ 191 $ 192 $ 272 $ (464 ) $ 191 Spectra Energy Corp Condensed Consolidating Statement of Operations Three Months Ended September30, 2008 (In millions) Spectra Energy Corp Spectra Capital Non-Guarantor Subsidiaries Eliminations Consolidated Total operating revenues $ $ $ 1,080 $ $ 1,080 Total operating expenses (9 ) 749 740 Operating income 9 331 340 Equity in earnings of unconsolidated affiliates 273 273 Equity in earnings of subsidiaries 288 440 (728 ) Other income and expenses, net 3 5 1 9 Interest expense 63 100 163 |
21. New Accounting Pronouncemen
21. New Accounting Pronouncements | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
21. New Accounting Pronouncements | 21. New Accounting Pronouncements The following new accounting pronouncements were adopted during the nine months ended September30, 2009: ASC 105, Generally Accepted Accounting Principles (previously SFAS No.168, The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting PrinciplesA Replacement of FASB Statement No.162). This accounting standard results in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (the Codification) becoming the source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC are also considered sources of authoritative GAAP for SEC registrants. The Codification supersedes all then-existing non-SEC accounting and reporting standards. All other nongrandfathered, non-SEC accounting literature not included in the Codification is nonauthoritative. The adoption of the provisions of this accounting standard effective with our September30, 2009 financial statements did not change the application of existing GAAP for us, and as a result, did not have any impact on our consolidated results of operations, financial position or cash flows. Beginning with our financial statements included in this report, accounting references will be made to the Codification references and certain historical references to accounting standards will also be included during this initial transition. ASC 820, Fair Value Measurement and Disclosures (previously SFAS No.157, Fair Value Measurements). This accounting standard defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. The FASB issued an amendment to this accounting standard which delayed its effective date for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The adoption of the provisions of this amended accounting standard on January1, 2009 for the measurement of our asset retirement obligations and for our goodwill impairment test did not have any impact on our consolidated results of operations, financial position or cash flows. ASC 805, Business Combinations (previously SFAS 141R, Business Combinations). This accounting standard requires an acquiring entity in a business combination to recognize all and only the assets acquired and liabilities assumed in the transaction, establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed, and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. This accounting standard applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December15, 2008. The adoption of the provisions of this accounting standard on January1, 2009 did not have a material impact on our consolidated results of operat |
22. Subsequent Events
22. Subsequent Events | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
22. Subsequent Events | 22. Subsequent Events We have evaluated significant events and transactions that occurred from October1, 2009 through the date of this report and have determined that there were no events or transactions other than those disclosed in this report, if any, that would require recognition or disclosure in our Condensed Consolidated Financial Statements for the quarterly period ended September30, 2009. |
Document Information
Document Information | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Document Information [Text Block] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | 2009-09-30 |
Entity Information
Entity Information (USD $) | ||
9 Months Ended
Sep. 30, 2009 | Oct. 30, 2009
| |
Entity [Text Block] | ||
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 | 646,755,342 |