spectra energy ED74B70A-3AC9-4E83-B142-D1BAD501D305_NonGAAPRegG

227 views
193 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
227
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
1
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

spectra energy ED74B70A-3AC9-4E83-B142-D1BAD501D305_NonGAAPRegG

  1. 1. Spectra Energy Corp Non-GAAP Reconciliation for SEC Regulation G Earnings Release and 2009 Outlook call February 5, 2009 Ongoing Net Income The materials for Spectra Energy’s Earnings Release and 2009 Outlook call on February 5, 2009 include a discussion of ongoing net income. Ongoing net income is a non-GAAP financial measure, as it represents net income adjusted for the impact of special items. Special items represent certain charges and credits which management believes will not be recurring on a regular basis. The most directly comparable GAAP measure for ongoing net income is reported net income, which includes the impact of special items. Ongoing Diluted Earnings-per-Share The materials for Spectra Energy’s Earnings Release and 2009 Outlook call on February 5, 2009 include a discussion of ongoing diluted Earnings-per-Share (EPS). Ongoing diluted EPS is a non-GAAP financial measure, as it represents diluted EPS from continuing operations adjusted for the per-share impact of special items. Special items represent certain charges and credits which management believes will not be recurring on a regular basis. The most directly comparable GAAP measure for ongoing diluted EPS is reported diluted EPS, which includes the impact of special items. EBIT and EBITDA The materials for Spectra Energy’s Earnings Release and 2009 Outlook call on February 5, 2009 include discussions of ongoing EBIT (earnings before interest and taxes) and EBITDA (earnings before interest, taxes and depreciation and amortization) for Spectra Energy, its reportable segments and for Other, which represents the remainder of Spectra Energy’s operations. Ongoing EBIT is a non-GAAP financial measure as it reflects EBIT adjusted for the impact of special items. Special items represent certain charges and credits which management believes will not be recurring on a regular basis. The most directly comparable GAAP measure for ongoing EBIT is reported EBIT from continuing operations, which includes the impact of special items. EBITDA and ongoing EBITDA are also non-GAAP financial measures. The most directly comparable GAAP measure for EBITDA is earnings before interest and taxes, plus depreciation and amortization. The most directly comparable GAAP measure for ongoing EBITDA is earnings before interest and taxes, plus depreciation and amortization, which includes the impact of special items. Due to the forward-looking nature of these non-GAAP financial measures for future periods, information to reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measure is not available at this time, as management is unable to forecast any special items for future periods. 1
  2. 2. Return on Capital Employed (ROCE) The materials for Spectra Energy’s Earnings Release and 2009 Outlook call on February 5, 2009 include discussions of Return on Capital Employed (ROCE) generated from capital expansion projects placed into service or anticipated to be placed into service. ROCE is a non-GAAP financial measure and may not be defined and calculated by other companies in the same manner. ROCE as it relates to capital expansion projects is calculated by Spectra Energy as earnings before interest and taxes generated by a project divided by the total cost of the project. 2
  3. 3. Spectra Energy Corp Reported to Ongoing Earnings Reconciliation December 2008 Quarter-to-date (In millions, except per-share amounts) Reported Special Items Discontinued Total Ongoing Earnings (Note 1) Operations Adjustments Earnings SEGMENT EARNINGS BEFORE INTEREST AND TAXES FROM CONTINUING OPERATIONS $ 161 $ 44 A $ - $ 44 $ 205 U.S. Transmission 90 - - - 90 Distribution 65 - - - 65 Western Canada Transmission & Processing 69 - - - 69 Field Services 385 44 - 44 429 Total Reportable Segment EBIT (21) - - - (21) Other Total Reportable Segment EBIT and Other EBIT $ 364 $ 44 $ - $ 44 $ 408 EARNINGS Total Reportable Segment EBIT and Other EBIT $ 364 $ 44 $ - $ 44 $ 408 Interest Expense (166) - - - (166) Interest Income and Other 12 - - - 12 Income Taxes from Continuing Operations (43) (14) - (14) (57) Discontinued Operations, Net of Tax 4 - (4) B (4) - $ 171 $ 30 $ (4) $ 26 $ 197 Total Earnings $ 0.28 $ 0.05 $ (0.01) $ 0.04 $ 0.32 EARNINGS PER SHARE, BASIC $ 0.28 $ 0.05 $ (0.01) $ 0.04 $ 0.32 EARNINGS PER SHARE, DILUTED Note 1 - Amounts for special items are net of minority interest, if applicable. A - Impairment associated with Islander East project. B - Net results from Nevis and Brazeau River gathering and processing facilities in Western Canada that were sold in the fourth quarter. Weighted Average Shares (reported and ongoing) - in millions 611 Basic 612 Diluted 3
  4. 4. Spectra Energy Corp Reported to Ongoing Earnings Reconciliation December 2007 Quarter-to-date (In millions, except per-share amounts) Reported Special Items Extraordinary Total Ongoing Earnings (Note 1) Item Adjustments Earnings SEGMENT EARNINGS BEFORE INTEREST AND TAXES FROM CONTINUING OPERATIONS $ 221 $ - $ - $ - $ 221 U.S. Transmission 84 - - 84 Distribution 141 - - - 141 Western Canada Transmission & Processing 188 7A - 7 195 Field Services 634 7 - 7 641 Total Reportable Segment EBIT (56) 7B - 7 (49) Other Total Reportable Segment EBIT and Other EBIT $ 578 $ 14 $ - $ 14 $ 592 EARNINGS Total Reportable Segment EBIT and Other EBIT $ 578 $ 14 $ - $ 14 $ 592 Interest Expense (166) - - - (166) Interest Income and Other 3 - - - 3 Income Taxes from Continuing Operations (128) (5) - (5) (133) Extraordinary Items, Net of Tax 4 - (4) C (4) - $ 291 $ 9 $ (4) $ 5 $ 296 Total Earnings $ 0.46 $ 0.02 $ (0.01) $ 0.01 $ 0.47 EARNINGS PER SHARE, BASIC $ 0.46 $ 0.02 $ (0.01) $ 0.01 $ 0.47 EARNINGS PER SHARE, DILUTED Note 1 - Amounts for special items are net of minority interest, if applicable A - Costs to create stand-alone corporate functions at DCP Midstream. B - Separation costs resulting from the spin-off from Duke Energy. C - Adjustment of deferred tax liability for deregulated storage at Distribution. Weighted Average Shares (reported and ongoing) - in millions 632 Basic 635 Diluted 4
  5. 5. Spectra Energy Corp Reported to Ongoing Earnings Reconciliation December 2008 Year-to-date (In millions, except per-share amounts) Special Items Total Ongoing Reported Earnings (Note 1) Adjustments Earnings SEGMENT EARNINGS BEFORE INTEREST AND TAXES FROM CONTINUING OPERATIONS U.S. Transmission $ 844 $ 17 $ 17 $ 861 A Distribution 353 - - 353 Western Canada Transmission & Processing 398 - - 398 Field Services 716 - - 716 Total Reportable Segment EBIT 2,311 17 17 2,328 Other (78) - - (78) Total Reportable Segment EBIT and Other EBIT $ 2,233 $ 17 $ 17 $ 2,250 EARNINGS Total Reportable Segment EBIT and Other EBIT $ 2,233 $ 17 $ 17 $ 2,250 Interest Expense (636) - - (636) Interest Income and Other 28 - - 28 Income Taxes from Continuing Operations (496) (5) (5) (501) $ 1,129 $ 12 $ 12 $ 1,141 Total Earnings $ 1.82 $ 0.02 $ 0.02 $ 1.84 EARNINGS PER SHARE, BASIC $ 1.81 $ 0.02 $ 0.02 $ 1.83 EARNINGS PER SHARE, DILUTED Note 1 - Amounts for special items are net of minority interest, if applicable. A - Bankruptcy settlement of customer's transportation contract and impairment associated with Islander East project. Weighted Average Shares (reported and ongoing) - in millions 622 Basic 624 Diluted 5
  6. 6. Spectra Energy Corp Reported to Ongoing Earnings Reconciliation December 2007 Year-to-date (In millions, except per-share amounts) Reported Special Items Discontinued Total Ongoing Earnings (Note 1) Operations Adjustments Earnings SEGMENT EARNINGS BEFORE INTEREST AND TAXES FROM CONTINUING OPERATIONS $ 894 $ - $ - $ - $ 894 U.S. Transmission 322 - - - 322 Distribution 359 - - - 359 Western Canada Transmission & Processing 533 16 - 16 549 Field Services A 2,108 16 - 16 2,124 Total Reportable Segment EBIT (112) 23 - 23 (89) Other B Total Reportable Segment EBIT and Other EBIT $ 1,996 $ 39 $ - $ 39 $ 2,035 EARNINGS Total Reportable Segment EBIT and Other EBIT $ 1,996 $ 39 $ - $ 39 $ 2,035 Interest Expense (633) - - - (633) Interest Income and Other 17 - - - 17 Income Taxes from Continuing Operations (440) (14) - (14) (454) Discontinued Operations, Net of Tax 17 - (17) (17) - C $ 957 $ 25 $ (17) $ 8 $ 965 Total Earnings $ 1.51 $ 0.04 $ (0.03) $ 0.01 $ 1.52 EARNINGS PER SHARE, BASIC $ 1.51 $ 0.04 $ (0.03) $ 0.01 $ 1.52 EARNINGS PER SHARE, DILUTED Note 1 - Amounts for special items are net of minority interest, if applicable. A - Costs to create stand-alone corporate functions at DCP Midstream. B - Separation costs resulting from the spin-off from Duke Energy. C - Sonatrach settlement, Ft. Frances revenue sharing and net results from Nevis and Brazeau River gathering and processing facilities, partially offset by LNG Litigation costs. Weighted Average Shares (reported and ongoing) - in millions 632 Basic 635 Diluted 6
  7. 7. Spectra Energy Corp Cash Flow Reconciliation Required by SEC Regulation G 2009 Outlook and Financial Plan February 5, 2009 ($ in Millions) Forecast 2009 Primary Sources: Ongoing net income (based on $1.15 per ongoing diluted per share target) (1) $ 705 Depreciation & amortization 585 Total Sources 1,290 Primary Uses: Capital and investment expenditures (1,000) Dividends (600) Total Uses (1,600) Net Sources / (Uses) $ (310) Reconciliations to amounts per U.S. GAAP reporting: Total Sources from above $ 1,290 Changes in operating working capital 94 Deferred income taxes 25 Minority interest 46 Undistributed equity earnings in unconsolidated affiliates (46) Net change in other assets and liabilities (128) Net cash provided by operating activities per GAAP $ 1,281 Capital and investment expenditures $ (1,000) Distributions from equity affiliates 184 Other investing activity, net 41 Net cash used in investing activities per GAAP $ (775) Dividends paid $ (600) Distributions to minority interests (157) Other financing activity, net 271 Net cash used in financing activities per GAAP $ (486) Notes: (1) Forecasted net income of $705 million for 2009 is based on Spectra Energy's 2009 earnings target of $1.15 per share. The measure is based on ongoing diluted earnings per share (EPS). Ongoing diluted EPS is a non-GAAP financial measure as it represents diluted EPS from continuing operations adjusted for the per-share impact of special items. Special items represent certain charges and credits which management believes will not be recurring on a regular basis. The most directly comparable GAAP measure for ongoing diluted EPS is reported diluted EPS from continuing operations, which includes the impact of special items. Due to the forward-looking nature of this non- GAAP financial measure, information to reconcile it to the most directly comparable GAAP financial measure is not available at this time, as management is unable to forecast any special item for future periods. 7
  8. 8. SPECTRA ENERGY CORP Reconciliation of Ongoing EBITDA 2009 Forecast (Dollars in millions) U.S. Transmission 2009 Forecast Forecasted Ongoing EBIT(Includes 50% Gulfstream's Net Income) $ 895 Depreciation and Amortization 245 Subtotal 1,140 50% of Gulfstream Interest & D&A 40 50% of SESH Interest & D&A 30 Less: M&N, ETNG, Saltville, MHP Minority Interest D&A (20) Total Adjustments 50 Adjusted Ongoing 2009 Forecasted EBITDA $ 1,190 Distribution 2009 Forecast Forecasted Ongoing EBIT $ 335 Depreciation and Amortization 165 Ongoing 2009 Forecasted EBITDA $ 500 Western Canada Transmission & Processing 2009 Forecast Forecasted Ongoing EBIT $ 290 Depreciation and Amortization 135 Ongoing 2009 Forecasted EBITDA 425 Field Services 2009 Forecast Forecasted Equity Earnings (50% of DCP Midstream's Net Income) $ 250 50% of DCP Midstream D&A and Net Interest 300 Ongoing 2009 Forecasted EBITDA 550 Other 2009 Forecast Forecasted Ongoing EBIT $ (85) Depreciation and Amortization 20 Ongoing 2009 Forecasted EBITDA (65) 2,600 Total Ongoing 2009 Forecasted EBITDA 8
  9. 9. DCP Midstream Non-GAAP Reconciliation for SEC Regulation G 2009 Outlook and Financial Plan February 5, 2009 Reconciliation of non-GAAP EBITDA and EBIT to Net Income Year Ended December 31, ($MM) 2009E 2008 EBITDA $ 1,100 $ 1,991 Depreciation and Amortization (370) (365) EBIT 730 1,626 Interest Expense, net (255) (198) Other 25 3 Net Income $ 500 $ 1,431 Return on Capital Employed (ROCE) ROCE is calculated by DCP Midstream as earnings before interest and taxes, less net gain (loss) on sale of assets, divided by capital employed. Capital employed is defined by DCP Midstream as consolidated debt, less restricted cash plus total equity. 9

×