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spectra energy Q208RegG

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  • 1. Spectra Energy Corp Non-GAAP Reconciliation for SEC Regulation G Earnings Release call August 6, 2008 Ongoing Diluted Earnings-per-share (“EPS”) The materials for Spectra Energy’s Earnings Release call on August 6, 2008 include a discussion of ongoing diluted 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. Ongoing Net Income The materials for Spectra Energy’s Earnings Release call on August 6, 2008 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. Employee Incentive Targets The materials for Spectra Energy’s Earnings Release call on August 6, 2008 include a discussion of the 2008 employee incentive target for Spectra Energy. The EPS measure used for employee incentive bonuses is based on ongoing fully diluted EPS from continuing operations. Ongoing fully diluted EPS from continuing operations is a non-GAAP financial measure as it represents fully diluted EPS from continuing operations adjusted for the per-share impact of special items. Due to the forward-looking nature of this non-GAAP financial measure for future periods, information to reconcile this non-GAAP financial measure 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. Ongoing Segment and Other EBIT and EBITDA The materials for Spectra Energy’s Earnings Release call on August 6, 2008 include a discussion of ongoing EBIT (earnings before interest and taxes) and EBITDA (earnings before interest, taxes and depreciation and amortization) for Spectra Energy’s reportable segments and for Other, which represents the remainder of Spectra Energy’s operations. Ongoing segment and Other EBIT and EBITDA amounts are non-GAAP financial measures as they reflect segment and Other EBIT and EBITDA adjusted for the impact of special items. Special items represent certain charges and credits which management believes will not 1
  • 2. be recurring on a regular basis. The most directly comparable GAAP measures for ongoing segment and Other EBIT and EBITDA are reported segment and Other EBIT and depreciation and amortization from continuing operations, which includes the impact of special items. Due to the forward-looking nature of this non-GAAP financial measure for future periods, information to reconcile this non- GAAP financial measure 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. 2
  • 3. SPECTRA ENERGY CORP U.S. Transmission Segment Reconciliation of Ongoing EBITDA June 2008 (Dollars in millions) QTD 08 QTD 07 YTD 08 YTD 07 Reported EBIT (Includes 50% Gulfstream's Net Income) $ 244 $ 223 $ 470 $ 443 Depreciation and Amortization 58 52 116 105 Reported EBITDA (Includes 50% of Gulfstream's Net Income) 302 275 586 548 50% of Gulfstream D&A 3 4 7 8 50% of Gulfstream Interest 6 6 12 12 Reported EBITDA 311 285 605 568 Special Item (31) - (31) - Ongoing EBITDA $ 280 $ 285 $ 574 $ 568 SPECTRA ENERGY CORP Distribution Segment Reconciliation of Ongoing EBITDA June 2008 (Dollars in millions) QTD 08 QTD 07 YTD 08 YTD 07 Reported EBIT $ 54 $ 54 $ 219 $ 198 Depreciation and Amortization 46 40 93 77 Reported EBITDA 100 94 312 275 Special Item - - - - Ongoing EBITDA $ 100 $ 94 $ 312 $ 275 SPECTRA ENERGY CORP Western Canada Transmission & Processing Segment Reconciliation of Ongoing EBITDA June 2008 (Dollars in millions) QTD 08 QTD 07 YTD 08 YTD 07 Reported EBIT $ 87 $ 48 $ 218 $ 122 Depreciation and Amortization 42 34 79 67 Reported EBITDA 129 82 297 189 Special Item - - - - Ongoing EBITDA $ 129 $ 82 $ 297 $ 189 SPECTRA ENERGY CORP Field Services Segment Reconciliation of Ongoing EBITDA June 2008 (Dollars in millions) QTD 08 QTD 07 YTD 08 YTD 07 Equity Earnings (50% of DCP Midstream's Net Income) $ 217 $ 123 $ 408 $ 205 O&M Expense (1) - - - Reported EBIT 216 123 408 205 50% of DCP Midstream D&A 44 37 88 74 50% of DCP Midstream Interest 20 17 40 33 50% of DCP Midstream Income Taxes - 2 1 3 Reported EBITDA 280 179 537 315 Special Items 3 - 6 Ongoing EBITDA $ 280 $ 182 $ 537 $ 321 SPECTRA ENERGY CORP Other Segment Reconciliation of Ongoing EBITDA June 2008 (Dollars in millions) QTD 08 QTD 07 YTD 08 YTD 07 Reported EBIT $ (28) $ (26) $ (48) $ (41) Depreciation and Amortization 4 1 7 1 Reported EBITDA (24) (25) (41) (40) Special Item - 7 - 11 Ongoing EBITDA $ (24) $ (18) $ (41) $ (29) 3