Letter from the Chairman
William T. Esrey,
chairman of the board
Dear fellow investors:
In five short years, your company has distinguished itself as a respected and successful leader in the natural gas infrastructure arena. Spectra Energy has grown tremendously in that time, and that growth is reflected in superior value creation for investors.
In many respects, 2011 was our best year yet: Financial results for the year included record net income from controlling interests, up approximately 13 percent, and earnings per share that surpassed last year's by more than 14 percent. Each of our businesses generated healthy gains for the year, and we continued to execute on the expansion of critically needed natural gas infrastructure assets.
Spectra Energy's blueprint for success remains grounded in the fundamentals of sound strategy and execution, delivered by talented professionals, and an enviable, interconnected network of infrastructure assets. Our diverse portfolio of assets, situated in the heart of prolific supply basins and close to growing demand markets, is a unique competitive advantage. It allows your company to serve customers and stakeholders with excellence and efficiency – and it enables reliable, attractive earnings growth.
The preceding pages discussed Spectra Energy's ongoing commitment to addressing the issues important to you. Your board of directors is likewise focused on those imperatives. We're accountable to you – our valued investors who entrust us with ensuring the company's long-term strength, integrity and value creation. We shoulder that responsibility with the diligence and dedication it demands. What's important to you is important to us, and we continually strive to faithfully represent your long-term interests.
We're committed to being a leader in corporate governance, and we believe that our governance principles provide a strong and sustainable base, rightly focused on independent board oversight, leadership development, performance and compensation, and strategy, execution and prudent risk management.
Successful governance depends in large part on the talent, dedication and integrity of company leaders. Your board has the utmost confidence in Spectra Energy's leadership team and in the internal processes that direct their decisions and actions. The board reviews the performance of senior executives annually, as well as succession plans that ensure leadership continuity. Executive compensation is based on sustainable performance and comprises a mix of long- and short-term incentives paid in equity and cash.
We know that a stable and attractive dividend is important to investors. In 2011, your board authorized an 8 cent per share increase in the company's annual dividend. And we fully expect to sustain that level of growth for the next several years.
We also understand the intangible and immeasurable value of our corporation as a constructive resource in the communities where we work. Spectra Energy is dedicated to being a valued and engaged community partner, a responsible steward and a good neighbor to all of the stakeholders we serve.
I am privileged to work alongside a board of directors united in purpose and diverse in the perspectives they bring to bear in governing your company. We were pleased to welcome Joseph Alvarado to our board last year. Joe is president, chief executive officer and a director of Commercial Metals Company. He brings an impressive wealth of business knowledge and industry experience to his role.
And this year we say farewell and a heartfelt thank you to Paul Anderson, who steps down from his director role. Paul has long served Spectra Energy in a number of strategic capacities – as chairman of the board and as chairman, president and chief executive officer of its predecessor companies. We will miss Paul's direct involvement, but his spirit and wisdom will continue to shape the forward course of our company.
2011 represented Spectra Energy's five-year milestone as a stand-alone company. We have much to be proud about in that short span – and we thank you for your valued confidence and investment, which enabled our growth and success. We are fortunate to have a long legacy behind us, and a promising outlook ahead. We look forward to delivering value, growth and energy well into the future.
William T. Esrey, chairman of the board