Spectra fourth quarter 2012 EBIT $72m, down from $137m in 2011

2012 Year-End Highlights at Spectra Energy
“Throughout 2012 Spectra Energy’s fee-based businesses generated strong earnings and cash flows, helping to offset the effects of lower commodity prices,” said Greg Ebel, president and chief executive officer, Spectra Energy Corp.
“In both the near and longer term, Spectra Energy will continue to realise significant opportunities in the natural gas, natural gas liquids and crude oil infrastructure businesses. As a result, we are targeting investments of $25 billion in capital expansion projects through the end of the decade,” said Ebel.  “This investment will allow us to realise significant incremental earnings and cash generation, supporting long-term earnings growth and attractive dividend increases for our investors.”
The company purchased a one-third interest in two natural gas liquids pipelines at Sand Hill and Southern Hills and announced an agreement to acquire Express-Platte Pipeline System.
On Tuesday Spectra Energy Corp (SE)  reported 2012 net income from controlling interests of $940 million, or $1.43 diluted EPS, compared with $1.18 billion, or $1.81 diluted EPS in 2011. Ongoing 2012 net income was $938 million, or $1.43 diluted EPS, compared with $1.16 billion, or $1.77 diluted EPS, in the prior year.
Spectra Energy is continuing to expand in the complementary natural gas liquids (NGL) sector, and upon closing its acquisition of the Express-Platte Pipeline System, will enter the crude oil transportation business.  DCP Midstream also will place more than $3 billion of projects into service over the next 12 months, benefitting its owners, Spectra Energy and Phillips 66.
“We will be drawing upon all of our resources: core growth; greenfield and brownfield expansions into new and existing demand markets; new lines of adjacent businesses and acquisitions, when attractive; and, of course, the use of our MLP structures,” stated Ebel.  “We have a great portfolio mix and have been able to use the sum of our business lines to successfully navigate through market cycles.”
Western Canada Transmission & Processing reported fourth quarter 2012 EBIT of $72 million, compared with $137 million in fourth quarter 2011.  The segment experienced lower earnings at the Empress natural gas liquids (NGL) business, attributable primarily to lower propane prices.  An increase in gathering and processing revenue from expansions in the Horn River and Montney areas of British Columbia was more than offset by an anticipated revenue decrease from the segment’s conventional areas.
Year-end reported EBIT for Western Canada Transmission & Processing was $387 million, compared with $510 million in 2011.
Spectra Energy has a strong core natural gas infrastructure business built over the course of a century, and continues to see steady growth within that core through projects like the New Jersey-New York Expansion, TEAM 2014, OPEN, Dawson II and AIM.  The company also is expanding beyond the core and moving forward with projects longer-term like Renaissance, NEXUS and the BG Group LNG pipeline project in Western Canada.
Additionally, Spectra Energy is continuing to expand in the complementary natural gas liquids (NGL) sector, and upon closing its acquisition of the Express-Platte Pipeline System, will enter the crude oil transportation business.  DCP Midstream also will place more than $3 billion of projects into service over the next 12 months, benefitting its owners, Spectra Energy and Phillips 66.
“We will be drawing upon all of our resources: core growth; greenfield and brownfield expansions into new and existing demand markets; new lines of adjacent businesses and acquisitions, when attractive; and, of course, the use of our MLP structures,” stated Ebel.  “We have a great portfolio mix and have been able to use the sum of our business lines to successfully navigate through market cycles.”
Western Canada Transmission & Processing reported fourth quarter 2012 EBIT of $72 million, compared with $137 million in fourth quarter 2011.  The segment experienced lower earnings at the Empress natural gas liquids (NGL) business, attributable primarily to lower propane prices.  An increase in gathering and processing revenue from expansions in the Horn River and Montney areas of British Columbia was more than offset by an anticipated revenue decrease from the segment’s conventional areas.

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