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Spectra Energy Corp SE
Q3 2011 Earnings Call Transcript

Transcript Call Date 11/03/2011

Operator: Good morning. My name is April, and I will be your conference operator today. At this time, I would like to welcome everyone to the Spectra Energy's Third Quarter 2011 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

Thank you. I will now turn the conference over to Mr. Arensdorf. Sir, you may begin the conference.

John R. Arensdorf - Chief Communications Officer: Thank you April, and good morning, everyone. Welcome to Spectra Energy's third quarter 2011 earnings review. Again thanks for joining us today. Leading today's discussion will be Greg Ebel, our President and CEO; and Pat Reddy, our Chief Financial Officer. Both Greg and Pat will discuss our quarterly results and provide more color around our strategic plans to enhance the value Spectra Energy delivers to its shareholders. We'll then open the lines for your questions.

But before we begin, let me take a moment to remind you that some of the things we will discuss today concern future Company performance and include forward-looking statements within the meanings of the securities laws. Actual results may materially differ from those discussed in these forward-looking statements. You should refer to the additional information contained in Spectra Energy's Form 10-K and in our other SEC filings, concerning factors that could cause these results to be different from those contemplated in today's discussion. In addition, today's discussion includes certain non-GAAP financial measures as defined by SEC Reg G. A reconciliation of those measures to the most directly comparable GAAP measures is available on our Investor Relations website at spectraenergy.com.

With that, I'll turn the call over to Greg.

Gregory L. Ebel - President and CEO: Thanks a lot John, and good morning everybody. As you’ve seen from our earnings release, Spectra Energy delivered ongoing third quarter results of $247 million or $0.38 per share. We continue to deliver value creating results. We exceeded last year’s EPS by 23%, well ahead of our expectations year-to-date. All of our businesses continued to perform well and we’re growing our earnings from projects placed into service at attractive rates of return.

We’re realizing the upside of higher NGL prices, which as you know is a real driver of returns at our Field Services business. We saw NGL prices 43% higher in the third quarter 2010 and 24% higher than our original assumptions. As expected, we started to see a pickup in volumes across DCP as we’ve moved through the year.

Incremental Eagle Ford volumes approached 200 million cubic feet per day in Q3. At DCP’s Newborn plant in the DJ Basin, which came on earlier this year, we'd initially expected it to take two to four years to reach full capacity, but it is indeed now at full volume.

We’re even seeing growth accelerated in the Mid-Continent, something we haven’t seen in years. This ramp up in volumes bodes well for DCP’s further expansion plans, which are numerous.

With less than 60 days left in the year, a good third quarter behind us, and the fourth typically strong for us, we feel very positive that we’ll exceed our $1.65 earnings target. That confidence and our visibility on the 2012 earnings led us to the decision to increase our dividend now rather than at year end. So with our $0.08 annual dividend increase, we've delivered twice the level of dividend growth expected and we delivered it sooner than expected.

Read our Earnings Call Transcript disclaimer.
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