Veresen Announces 2012 Third Quarter Results and Affirms 2012 Guidance /NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES./ CALGARY, Nov. 6, 2012 /CNW/ - Veresen Inc. ("Veresen" or the "Company") (TSX: VSN) announced today its financial and operating results for the three months ended September 30, 2012. Third quarter highlights include: -- Financial performance from the Hythe/Steeprock complex exceeded expectations as a result of incremental processing volumes, generating $17.3 million in EBITDA(1) during the quarter. Veresen completed all remaining activities associated with the transition of operatorship of the Hythe/Steeprock complex from Encana. -- Veresen's Power business recorded EBITDA(1) of $21.5 million for the quarter, reflecting the continued positive contributions from the recently commissioned York Energy Centre and Grand Valley facilities. -- Weak market conditions surrounding the U.S. natural gas liquids environment persisted into the third quarter of 2012, adversely impacting earnings and cash flow from the Aux Sable midstream business. -- Net income attributable to Common Shares of $11.4 million or $0.06 per Common Share. -- Distributable cash of $61.4 million or $0.31 per Common Share. -- Cash from operating activities of $48.5 million. -- Veresen affirms the midpoint of its distributable cash guidance of $1.08 per Common Share which was previously issued on August 8, 2012, reflecting the growing portion of the Company's distributable cash derived from its contracted, fee-for-service assets. -- On October 10, 2012, Alliance announced a proposed new services framework that will underpin the recontracting of the pipeline beyond December 2015, when the initial 15 year term of the original transportation contracts end. The proposed new services build on Alliance's advantage in providing low-cost, predictable transportation for high energy natural gas, together with providing producers with competitive direct access to premium U.S. markets for their natural gas and NGLs. -- On October 24, 2012, Veresen announced that Stephen White, President and Chief Executive Officer has decided to retire. The appointment of Mr. White's replacement, Don Althoff, will become effective November 8, 2012. Mr. Althoff is a senior business executive with a proven track record of delivering results across a range of energy businesses, including within BP PLC and Amoco Corporation. He brings to Veresen extensive operational expertise and his leadership will be instrumental in the Company's future growth. "Veresen's contracted assets, primarily comprised of our independent midstream business, power business and cornerstone pipeline assets support the stability of our dividend," commented Stephen White, President and Chief Executive Officer. "Consistent with our strategy, we continue to grow the portion of our distributable cash generated from our strong, stable, fee-for-service assets, and effectively reduce our commodity price exposure from Aux Sable's midstream business." FINANCIAL HIGHLIGHTS Three months ended Nine months ended September 30 September 30 ($ Millions, except per Common 2012 2011 2012 2011 Share amounts) Net income (loss) before tax and non-controlling interest Pipeline 22.0 23.8 66.2 69.5 Midstream 21.9 23.6 56.4 57.5 Power 1.6 (11.7) (1.7) (14.8) Veresen - Corporate (23.1) (14.7) (66.5) (46.1) 22.4 21.0 54.4 66.1 Tax expense (8.8) (9.9) (21.9) (27.4) Net (income) loss attributable to non-controlling interest - - (0.1) - Net income 13.6 11.1 32.4 38.7 Preferred Share dividends (2.2) - (5.5) - Net income attributable to 11.4 11.1 26.9 38.7 Common Shares Per Common Share ($) 0.06 0.07 0.14 0.24 For the third quarter of 2012, Veresen generated net income attributable to Common Shares of $11.4 million or $0.06 per Common Share compared to $11.1 million or $0.07 per Common Share for the same period last year. Excluding the effect of unrealized fair value losses related to a 20-year interest rate hedge for the York Energy Centre, net income attributable to Common Shares was $11.8 million or $0.06 per Common Share for the third quarter compared to $23.2 million or $0.14 per Common Share for the same period in 2011. The decrease in net income primarily reflects reduced NGL fractionation margins realized from the Aux Sable midstream business. Third quarter earnings reflect a $2.0 million increase in development costs. primarily to advance the Jordan Cove Energy Project, a proposed liquefied natural gas (LNG) facility near Coos Bay, Oregon. The decrease in per Common Share earnings also reflects the impact of additional Common Shares issued, primarily to fund the Hythe/Steeprock acquisition. Third quarter earnings from Veresen's pipeline business were consistent with expectations. The Hythe/Steeprock complex, Veresen's independent midstream business, generated $17.3 million in EBITDA(1), and is primarily comprised of fee commitments provided for under a long-term, take-or-pay processing agreement but also includes margins generated from incremental third-party processing volumes. Net income before tax for the third quarter of 2012 was $8.0 million before corporate financing costs, which are classified in the corporate segment of Veresen's business. ____________________________________ (1) This is not a standard measure under GAAP and may not be comparable to similar measures used by other entities. See the section entitled "Non-GAAP Financial Measures" contained in Veresen's September 30, 2012 Management's Discussion & Analysis. Aux Sable generated $13.9 million of equity income in the third quarter, representing a $9.7 million decrease compared to the same period last year. NGL market conditions continued to put downward pressure on fractionation margins as the industry works through high-inventory, infrastructure bottlenecks and the lagging impact of petrochemical plant maintenance turnarounds in the second quarter. With the strong preference for ethane and propane feedstocks and increased capability to use these advantaged feedstocks, Veresen believes NGL fractionation margins have stabilized and are forecast to improve somewhat in the fourth quarter. Third quarter 2012 EBITDA from Veresen's Power business, as determined on a proportionately consolidated basis, was $21.5 million, a $4.7 million increase compared to the same period last year. Versen's gas-fired and district energy systems generated $6.1 million of the increase, primarily due to a $5.8 million contribution from the York Energy Centre. Net income before tax and non-controlling interest from the Power business was $1.6 million for the third quarter of 2012, compared to a net loss of $11.7 million for the same period last year. Excluding the effect of the fair value loss related to York Energy's interest rate hedges, net income before tax and non-controlling interest was $2.1 million for the third quarter, a $2.3 million decrease compared to the same period last year. Corporate expenses before taxes in the third quarter were $23.1 million, an $8.4 million increase compared to the same period last year. The increase reflects higher corporate administrative and interest costs, primarily associated with building Veresen's independent midstream business underpinned by the Hythe/Steeprock acquisition, and higher project development spending related to the Jordan Cove Energy Project. Administrative costs include $1.3 million of non-recurring expenses which relate to the integration of Hythe/Steeprock operations. Distributable Cash Three months ended Nine months ended September 30 September 30 ($ Millions, except per Common 2012 2011 2012 2011 Share amounts) Pipeline 37.0 37.3 110.3 113.6 Midstream 33.7 23.8 88.0 59.6 Power 13.3 10.5 23.1 24.4 Veresen - Corporate (17.0) (12.4) (48.8) (37.5) Taxes (3.4) (4.8) (12.2) (20.3) Preferred Share dividends (2.2) - (5.5) - Distributable Cash ((1)) 61.4 54.4 154.9 139.8 Per Common Share ($) 0.31 0.33 0.80 0.86 Cash from Operating Activities 48.5 54.5 114.8 131.5 (1) See the reconciliation of distributable cash to cash from operating activities in the Non-GAAP Financial Measures section in the tables attached to this news release. For the third quarter of 2012, Veresen generated distributable cash of $61.4 million compared to $54.4 million for the same period last year. The increase reflects a $17.3 million contribution from the Hythe/Steeprock complex, and an aggregate $4.8 million contribution from the recently commissioned York Energy Centre and Grand Valley power facilities. These increases were partially offset by a $7.4 million decrease in distributions from Aux Sable driven by lower fractionation margins, higher corporate and interest costs associated with the Company's growth initiatives, and dividends on the Company's Preferred Shares, issued in February 2012. On a per Common Share basis, distributable cash was $0.31, a $0.02 decrease compared to the same period last year. In addition to the variances described above, distributable cash per Common Share decreased as a result of Common Shares issued over the past 12 months to finance Veresen's growth initiatives. For the third quarter of 2012, Veresen generated $48.5 million of cash from operating activities compared to $54.5 million for the same period last year. The decrease reflects changes in non-cash operating working capital in Veresen's Power business and higher corporate administrative and interest costs, partially offset by increased cash flows from the Company's midstream business. OPERATING HIGHLIGHTS Pipeline Alliance's transportation deliveries for the third quarter of 2012 averaged 1.448 bcf/d compared to 1.495 bcf/d for the same period last year. Third quarter AOS volumes shipped on the Alliance pipeline were impacted by requirements for Alliance's fall system outage. On October 1, 2012, the Alliance system temporarily shut down to accommodate the relocation of a short section of the mainline in northwestern Alberta. Recent commercial development in the area resulted in a need to re-route the affected segment of the mainline. The duration of the outage was approximately four days while the new segment of pipeline was successfully connected, tested and put into operation. Firm service on the pipeline was impacted during this period and AOS was impacted in the days leading up to and after the outage. Alliance expects to recover all direct and indirect costs associated with this project through its tolls. On October 10, 2012, Alliance announced a proposed new services framework that will underpin the recontracting of the pipeline beyond December 2015, when the initial 15 year term of the original transportation contracts end. The proposed new services build on Alliance's advantage in providing low cost, predictable transportation for high energy natural gas. Prospective shippers have been offered increased optionality through the introduction of a segmented service structure in Canada with two receipt zones, the creation of a new Canadian trading pool that would allow shippers to sell their natural gas out of the receipt zones, and a transmission zone to the U.S. border. Alliance further proposes to offer shippers fixed or index-based tolls and varying contract lengths. Alliance intends to continue to offer a full path service from Canadian receipt points to Chicago. Alliance is consulting with existing and prospective shippers regarding the new services framework and an open season is planned for 2013. On September 20, 2012, Alliance received regulatory approval to construct and operate the 127-kilometre (79-mile) Tioga Lateral pipeline. In October 2012, having completed all precedent agreement conditions, Alliance executed a firm transportation agreement with Hess Corporation, the anchor shipper for the new pipeline. The pipeline is expected to be placed into service by summer 2013. AEGS continues to operate reliably and transported toll volumes of 285.7 mbbls/d for the third quarter, slightly lower than the 287.5 mbbls/d for the same period last year. Midstream During the third quarter of 2012, fee volumes at the Hythe/Steeprock complex averaged 397 mmcf/d, comprised of the minimum volume commitment under a long-term, take-or-pay processing agreement, and 23 mmcf/d of natural gas from other producers. Veresen continues to engage in discussions with producers in the prolific Montney shale gas region for the provision of midstream services using the balance of capacity of the complex. For the three month period ended September 30, 2012, Aux Sable processed 98.1% of the natural gas delivered by Alliance, which compares favourably to 97.5% for the same period last year. Aux Sable sold 68.4 mbbls/d of NGLs during the third quarter of 2012 compared to 68.1 mbbls/d for the same period last year. Average ethane volumes decreased to 29.7 mbbls/d for the third quarter of 2012 from 36.7 mbbls/d for the same period last year, as uneconomic margins for periods in the third quarter resulted in reinjection. Propane plus sales volumes were 38.7 mmbls/d for the third quarter of 2012, up from 31.4 mbbls/d for the same period last year due to increased production from the Bakken area in North Dakota. Power Operational performance from Veresen's gas-fired and district energy systems generally met expectations during the quarter. Veresen's Ontario gas-fired facilities performed particularly well in response to robust energy demand experienced through the summer months. With respect to Veresen's renewable power facilities, no significant operational issues were experienced during the third quarter; however, power production from Glen Park and Veresen's waste heat facilities were negatively impacted by reduced water flows and host compressor unit maintenance, respectively. Business Development Veresen continues to evaluate options for exporting LNG from Coos Bay, Oregon through the development of the Jordan Cove Energy Project. Veresen is engaged in discussions with potential strategic partners to secure long-term arrangements to produce LNG for Asian customers. This strategic project is advancing through the regulatory process with the Federal Energy Regulatory Commission. Veresen recently exercised its options to acquire the remaining land in the Coos Bay area to site the LNG terminal project. Veresen is also focused on a number of power-related initiatives which complement the Company's existing assets. These activities are primarily focused on gas-fired generation and renewable power generation opportunities. 2012 GUIDANCE As the year progresses, Veresen is able to narrow its guidance range. For 2012, Veresen expectsdistributable cash to be in the range of $1.03 to $1.12 per Common Share. The midpoint of $1.08 per Common Share is unchanged from previous guidance issued August 8, 2012, reflecting the growing portion of distributable cash derived from Veresen's contracted asset base. Further details regarding Veresen's 2012 guidance can be found in the "Investor Information" section of Veresen's web site - www.vereseninc.com. Conference Call and Webcast A conference call and webcast to discuss the results will be held on November 6, 2012 at 2:30 pm MT (4:30 pm ET). Dial-in: 1 (888) 231-8191 or 1 (647) 427-7450 Conference ID: 46717316 The link to the conference call webcast is available on Veresen's website under Investor Information, Presentations and Webcasts. A replay of the call will be available from 4:30 pm MT (6:30 pm ET) on November 6, 2012 by dialing 1-855-859-2056 and 1-416-849-0833. The passcode is 46717316, followed by the pound sign. The replay will expire at midnight (ET) on November 13, 2012. About Veresen Inc. Veresen is a publicly-traded dividend paying corporation based in Calgary, Alberta, that owns and operates energy infrastructure assets across North America. Veresen is engaged in three principal businesses: a pipeline transportation business comprised of interests in two pipeline systems, the Alliance Pipeline and the Alberta Ethane Gathering System; a midstream business which includes ownership interests in a world-class natural gas liquids extraction facility near Chicago, the Hythe/Steeprock complex, and other natural gas and NGL processing energy infrastructure; and a power business with renewable and gas-fired facilities and development projects in Canada and the United States, and district energy systems in Ontario and Prince Edward Island. Veresen is also actively developing a number of greenfield projects. In the normal course of its business, Veresen regularly evaluates and pursues acquisition and development opportunities. Veresen's common shares, Series A Preferred Shares and 5.75% convertible unsecured subordinated debentures, Series C due July 31, 2017 are listed on the Toronto Stock Exchange under the symbols "VSN", "VSN.PR.A" and VSN.DB.C", respectively. For further information, please visit www.vereseninc.com. Certain information contained herein relating to, but not limited to, Veresen and its businesses constitutes forward-looking information under applicable securities laws. All statements, other than statements of historical fact, which address activities, events or developments that Veresen expects or anticipates may or will occur in the future, are forward-looking information. Forward-looking information typically contains statements with words such as "may", "estimate", "anticipate", "believe", "expect", "plan", "intend", "target", "project", "forecast" or similar words suggesting future outcomes or outlook. Forward-looking statements in this news release include, but are not limited to, statements with respect to: NGL fractionation margins in the fourth quarter of 2012; the recovery of costs associated with the relocation of a portion of the Alliance Pipeline; the in-service date of the Tioga Lateral Pipeline; the ability of Alliance to successfully implement its new services framework; the Company's ability to realize its growth objectives; and the ability of each of its businesses to generate distributable cash in 2012. The risks and uncertainties that may affect the operations, performance, development and results of Veresen's businesses include, but are not limited to, the following factors: Veresen's ability to successfully integrate the operations of the Hythe/Steeprock complex; the ability of Veresen to successfully implement its strategic initiatives and achieve expected benefits; levels of oil and gas exploration and development activity; the status, credit risk and continued existence of contracted customers; the availability and price of capital; the availability and price of energy commodities; the availability of construction services and materials; fluctuations in foreign exchange and interest rates; Veresen's ability to successfully obtain regulatory approvals; changes in tax, regulatory, environmental, and other laws and regulations; competitive factors in the pipeline, midstream and power industries; operational breakdowns, failures, or other disruptions; and the prevailing economic conditions in North America. Additional information on these and other risks, uncertainties and factors that could affect Veresen's operations or financial results are included in its filings with the securities commissions or similar authorities in each of the provinces of Canada, as may be updated from time to time. Readers are also cautioned that the foregoing list of factors and risks is not exhaustive. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these factors are independent and management's future course of action would depend on its assessment of all information at that time. Although Veresen believes that the expectations conveyed by the forward-looking information are reasonable based on information available on the date of preparation, no assurances can be given as to future results, levels of activity and achievements. Undue reliance should not be placed on the information contained herein, as actual result achieved will vary from the information provided herein and the variations may be material. Veresen makes no representation that actual results achieved will be the same in whole or in part as those set out in the forward-looking information. Furthermore, the forward-looking statements contained herein are made as of the date hereof, and Veresen does not undertake any obligation to update publicly or to revise any forward-looking information, whether as a result of new information, future events or otherwise. Any forward-looking information contained herein is expressly qualified by this cautionary statement. Certain financial information contained in this news release may not be standard measures under Generally Accepted Accounting Principles ("GAAP") in the United States and may not be comparable to similar measures presented by other entities. These measures are considered to be important measures used by the investment community and should be used to supplement other performance measures prepared in accordance with GAAP in the United States. For further information on non-GAAP financial measures used by Veresen see Management's Discussion and Analysis, in particular, the section entitled "Non-GAAP Financial Measures" contained in the annual Management Discussion and Analysis, filed byVeresen with Canadian securities regulators. Veresen Inc. Consolidated Statement of Financial Position September 30, December 31, (Canadian $ Millions; unaudited) 2012 2011 Assets Current assets Cash and short-term investments 39.3 21.9 Restricted cash 5.6 354.6 Distributions receivable 34.9 43.4 Receivables 70.0 32.3 Due from jointly-controlled businesses 1.4 25.5 Deposit - 50.0 Other 8.7 25.5 159.9 553.2 Investments in jointly-controlled businesses 931.0 934.1 Rate-regulated asset 79.1 85.8 Pipeline, plant and other capital assets 1,421.8 768.7 Intangible assets 460.0 197.3 Due from jointly-controlled businesses 48.5 3.6 Other assets 17.4 15.4 3,117.7 2,558.1 Liabilities Current liabilities Payables and accrued payables 63.0 62.2 Subscription receipts payable - 348.6 Current portion of long-term senior debt 11.6 11.2 74.6 422.0 Long-term senior debt 1,209.4 754.4 Subordinated convertible debentures 86.2 86.2 Deferred taxes 315.5 321.7 Other long-term liabilities 50.7 35.0 1,736.4 1,619.3 Shareholders' Equity Share capital Preferred shares 195.2 - Common shares 1,793.6 1,391.0 Additional paid-in capital 4.3 - Cumulative other comprehensive loss (170.1) (159.2) Accumulated deficit (441.8) (324.7) 1,381.2 907.1 Non-controlling interest 0.1 31.7 1,381.3 938.8 3,117.7 2,558.1 Veresen Inc. Consolidated Statement of Income Three months ended Nine months ended September 30 September 30 (Canadian $ Millions, except per Common Share 2012 2011 2012 2011 amounts; unaudited) Equity income 33.2 30.0 97.4 105.7 Operating revenues 71.5 48.8 196.5 131.8 Operations and (27.6) (22.0) (81.4) (62.1) maintenance General, administrative (16.6) (13.5) (52.0) (36.6) and project development Depreciation and (21.7) (11.9) (61.6) (36.3) amortization Interest and other (15.4) (12.0) (43.4) (35.0) finance Foreign exchange and (1.0) 1.6 (1.1) (1.4) other Net income before taxes and non-controlling 22.4 21.0 54.4 66.1 interest Current taxes (3.4) (6.4) (12.2) (19.8) Deferred taxes (5.4) (3.5) (9.7) (7.6) Net income before 13.6 11.1 32.5 38.7 non-controlling interest Non-controlling interest - - (0.1) - Net income 13.6 11.1 32.4 38.7 Preferred Share dividends (2.2) - (5.5) - Net income attributable 11.4 11.1 26.9 38.7 to Common Shares Net income per Common Share Basic and diluted 0.06 0.07 0.14 0.24 Consolidated Statement of Comprehensive Income Three months ended Nine months ended September 30 September 30 (Canadian $ Millions; 2012 2011 2012 2011 unaudited) Net income before 13.6 11.1 32.5 38.7 non-controlling interest Other comprehensive income (loss) Cumulative translation adjustment Unrealized foreign exchange gain (loss) (16.2) 34.5 (10.9) 23.3 on translation Cumulative translation adjustment - - - 0.8 reclassified to net income Other - (0.1) - 1.8 Other comprehensive (16.2) 34.4 (10.9) 25.9 income (loss) Comprehensive income (loss) before (2.6) 45.5 21.6 64.6 non-controlling interest Comprehensive income attributable to - - (0.1) - non-controlling interest Comprehensive income (2.6) 45.5 21.5 64.6 (loss) Preferred Share dividends (2.2) - (5.5) - Comprehensive income (loss) attributable to (4.8) 45.5 16.0 64.6 Common Shares Veresen Inc. Consolidated Statement of Cash Flows Three months ended Nine months ended September 30 September 30 (Canadian $ Millions; 2012 2011 2012 2011 unaudited) Operating Net income before non-controlling 13.6 11.1 32.5 38.7 interest Equity income (33.2) (30.0) (97.4) (105.7) Distributions from jointly-controlled 53.6 61.1 150.9 163.7 businesses Depreciation and 21.7 11.9 61.6 36.3 amortization Unrealized foreign exchange (gain) loss 2.9 (8.4) 0.6 (6.8) and other non-cash items Deferred taxes 5.4 3.5 9.7 7.6 Changes in non-cash (15.5) 5.3 (43.1) (2.3) working capital 48.5 54.5 114.8 131.5 Investing Acquisitions, net of (1.3) - (890.5) (94.6) cash acquired Investments in jointly-controlled (34.0) (85.2) (63.0) (110.1) businesses Return of capital from 8.5 - 8.5 - jointly-controlled businesses Pipeline, plant and (18.5) (8.6) (52.0) (10.4) other capital assets Restricted cash - 4.3 0.4 (2.0) Other (0.4) 4.0 (0.7) 4.7 (45.7) (85.5) (997.3) (212.4) Financing Restricted cash 1.6 - 348.6 - Short-term debt issued, net of issue - - 249.1 - costs Short-term debt - - (250.0) - repaid Long-term debt issued, net of issue - - 347.8 53.8 costs Long-term debt (2.0) (24.3) (7.6) (53.9) repaid Net change in credit 49.0 (1.0) 113.0 133.5 facilities Preferred Shares issued, net of issue - - 193.7 - costs Common Share (38.4) (9.5) (65.5) (30.4) dividends paid Preferred Share (2.2) - (5.5) - dividends paid Repayments from (advances to) 0.7 (13.3) (20.8) (13.3) jointly-controlled businesses Other (0.4) (3.5) (3.0) (3.6) 8.3 (51.6) 899.8 86.1 Increase (decrease) in cash and short-term 11.1 (82.6) 17.3 5.2 investments Effect of foreign exchange rate changes (0.1) 7.5 0.1 7.0 on cash and short-term investments Cash and short-term investments at the 28.3 109.9 21.9 22.6 beginning of the period Cash and short-term investments at the end 39.3 34.8 39.3 34.8 of the period Veresen Inc. Distributable Cash ( (1)) Three months ended Nine months ended September 30 September 30 (Canadian $ Millions, except where noted; 2012 2011 2012 2011 unaudited) Alliance distributions, prior to withholdings for capital 32.7 33.1 98.2 101.7 expenditures and net of debt service AEGS distributable cash, after non-recoverable capital 4.3 4.2 12.1 11.9 expenditures and debt service Hythe/ Steeprock distributable cash, after non-recoverable 17.3 - 43.7 - maintenance capital expenditures Aux Sable distributions, net of support payments, non-recoverable 16.4 23.8 44.3 59.6 maintenance capital expenditures and debt service Power distributable cash, after maintenance 13.3 10.5 23.1 24.4 capital expenditures and debt service 84.0 71.6 221.4 197.6 Corporate General and (7.1) (6.0) (21.3) (17.1) administrative Interest and other (9.9) (6.4) (27.5) (18.9) finance Principal repayments - - - (1.5) on senior debt (17.0) (12.4) (48.8) (37.5) Taxes (3.4) (4.8) (12.2) (20.3) Preferred Share (2.2) - (5.5) - dividends (22.6) (17.2) (66.5) (57.8) Distributable cash ( 61.4 54.4 154.9 139.8 (1)) Distributable cash per 0.31 0.33 0.80 0.86 Common Share ($) ((2)) Dividends paid/payable 49.1 41.1 144.1 121.5 ( (3)) Dividends paid/payable 0.25 0.25 0.75 0.75 per Common Share ($) (1) See "Non-GAAP Financial Measures" for reconciliation of distributable cash to cash flows from operating activities. (2) The number of Common Shares used to calculate distributable cash per Common Share is based on the average number of Common Shares outstanding at each record date. For the three months ended September 30, 2012 the average number of Common Shares outstanding for this calculation was 196,614,501 (2011 - 164,451,010) and 202,521,009 (2011 - 170,358,430) on a basic and diluted basis, respectively. For the nine months ended September 30, 2012, the average number of Common Shares outstanding for this calculation was 192,248,429 (2011 - 162,057,352) and 198,155,013 (2011 - 167,964,848) on a basic and diluted basis, respectively. The number of Common Shares outstanding would increase by 5,906,508 (2011 - 5,907,192) Common Shares if the outstanding Convertible Debentures on September 30, 2012 were converted into Common Shares. (3) Includes $10.7 million and $68.5 million of dividends for the three and nine months ended September 30, 2012 (2011 - $31.0 million and $92.1 million, respectively) satisfied through the issuance of Common Shares under our DRIP. Veresen Inc. Reconciliation of Distributable Cash to Cash Flow from Operating Activities Three months ended Nine months ended September 30 September 30 (Canadian $ Millions; 2012 2011 2012 2011 unaudited) Cash from operating 48.5 54.5 114.8 131.5 activities Add (deduct): Project development 4.7 3.4 16.9 8.6 costs ((4)) Change in non-cash 18.9 (0.2) 49.8 0.1 working capital Principal repayments (2.8) (2.4) (8.4) (7.9) on senior notes Maintenance capital (1.4) (0.9) (4.8) (1.8) expenditures Distributions earned greater (less) than (4.3) - (7.9) 9.3 distributions received ((5)) Preferred Share (2.2) - (5.5) - dividends Distributable cash 61.4 54.4 154.9 139.8 (4) Represents costs incurred by us in relation to projects where the recoverability of such costs has not yet been established. Amounts incurred for the three and nine months ended September 30, 2012 relate primarily to the Jordan Cove LNG terminal project, the Pacific Connector Gas Pipeline project, and various power development projects. (5) Represents the difference between distributions declared by jointly-controlled businesses and distributions received. Veresen Inc. Reconciliation of Proportionately Consolidated Power Business Results to US GAAP Three months ended September 30, 2012 Three months ended September 30, 2011 Reverse Reverse proportionate proportionate (Canadian $ consolidation; consolidation; Millions; Proportionately apply equity US Proportionately apply equity US unaudited) Consolidated accounting GAAP Consolidated accounting GAAP Proportionately Consolidated EBITDA 21.5 (7.1) 14.4 16.8 (1.0) 15.8 ((6)) Depreciation & (12.2) 3.7 (8.5) (8.7) 0.6 (8.1) amortization Interest (7.1) 3.4 (3.7) (4.1) 0.1 (4.0) Fair value gains (0.5) 0.5 - (16.1) 16.1 - (losses) Foreign exchange and (0.1) 0.1 - 0.4 (0.3) 0.1 other Equity income (loss) - (0.6) (0.6) - (15.5) (15.5) Net income before taxes and non-controlling 1.6 - 1.6 (11.7) - (11.7) interest Nine months ended September 30, 2012 Nine months ended September 30, 2011 Reverse Reverse proportionate proportionate (Canadian $ consolidation; consolidation; Millions; Proportionately apply equity US Proportionately apply equity US unaudited) Consolidated accounting GAAP Consolidated accounting GAAP Proportionately Consolidated EBITDA 47.8 (13.0) 34.8 40.2 (2.6) 37.6 ( (6)) Depreciation & (31.5) 6.2 (25.3) (26.3) 1.3 (25.0) amortization Interest (16.1) 5.7 (10.4) (11.6) 0.5 (11.1) Fair value gains (1.7) 1.7 - (17.0) 17.0 - (losses) Foreign exchange and (0.2) 0.2 - (0.1) 0.1 - other Equity income (loss) - (0.8) (0.8) - (16.3) (16.3) Net income before taxes and non-controlling (1.7) - (1.7) (14.8) - (14.8) interest (6) Under US GAAP, the Company accounts for each of York Energy, NRGreen and Grand Valley using the equity method due to its joint control of these entities. However, the Company believes the presentation of the Power business' earnings on a proportionately consolidated line-by-line basis provides more insightful information. The Company and the investment community use EBITDA on a proportionately consolidated basis to assess the performance of the Power business. The above reconciles the results of its Power business. Dorreen Miller Director, Investor Relations Phone: 403 213 3633 Email:firstname.lastname@example.org SOURCE: Veresen Inc. To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/November2012/06/c5268.html CO: Veresen Inc. ST: Alberta NI: OIL ERN CONF -0- Nov/06/2012 18:54 GMT
Veresen Announces 2012 Third Quarter Results and Affirms 2012 Guidance
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