Veresen Announces 2014 Second Quarter Results and Updates Guidance

 Veresen Announces 2014 Second Quarter Results and Updates Guidance  /NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION  IN THE UNITED STATES./  CALGARY, Aug. 6, 2014 /CNW/ - Veresen Inc. ("Veresen" or the "Company") (TSX:  VSN) announced today financial and operating results for the three months  ended June 30, 2014.  Highlights        --  Veresen generated distributable cash[1] of $63.7 million ($0.29         per Common Share) in the second quarter of 2014 compared to         $49.2 million ($0.25 per Common Share) in the second quarter of         2013.     --  Veresen recorded a net loss attributable to Common Shares of         $2.4 million ($0.01 net loss per Common Share) in the second         quarter of 2014 compared to net income attributable to Common         Shares of $11.5 million ($0.06 net income per Common Share) in         the second quarter of 2013.     --  Cash from operating activities was $47.9 million in the second         quarter of 2014 compared to $55.0 million in the second quarter         of 2013.     --  In July, Jordan Cove LNG achieved a key regulatory milestone         with the receipt of the Notice of Schedule for the         environmental review of the LNG terminal and related pipeline         from the Federal Energy Regulatory Commission ("FERC").     --  Alliance Pipeline filed an application with the National Energy         Board ("NEB") for regulatory approval of the tolls and tariff         provisions required for Alliance to implement its proposed new         services.  "We continue to make good progress in advancing our key strategic initiatives,  including the re-contracting of the Alliance Pipeline and development of  Jordan Cove LNG. During the first half of 2014, we also completed key  financing activities to bolster our financial strength and flexibility," said  Don Althoff, President and CEO.  "The filing of Alliance Pipeline's revised toll and tariff application with  the NEB, is an important milestone in the re-contracting process. Signing of  Precedent Agreements with producers and shippers is ongoing as we move through  the regulatory process with the NEB."  Don Althoff added, "With the receipt of our Notice of Schedule from the FERC  for our Jordan Cove LNG project, we now have a line of sight to obtaining our  Final Environmental Impact Statement, and I'm confident we will obtain this  critical permit."     ___________________________     1 This is not a standard measure under GAAP and may not be comparable      to similar measures used by other entities. See the reconciliation of      distributable cash to cash from operating activities in the tables      attached to this news release.     Financial Highlights                                         Three months                                                                           ended      Six months ended                                                                       June 30               June 30     ---                                                               -------               -------     ($ Millions, except per Common Share amounts)            2014        2013       2014        2013     --------------------------------------------             ----        ----       ----        ----     Net income (loss) before tax     Pipeline                                                 30.0        27.5       61.5        52.3     Midstream                                                 8.7        15.6       42.6        27.0     Power                                                     1.7         9.5      (2.0)       10.5     Veresen - Corporate                                    (40.6)     (26.6)    (69.3)     (53.5)     -------------------                                     -----       -----      -----       -----                                                             (0.2)       26.0       32.8        36.3     Gain on sale of assets                               -        -       14.3          -     Tax recovery (expense)                                    1.9      (12.3)    (10.0)     (19.2)     ---------------------                                     ---       -----      -----       -----     Net income                                                1.7        13.7       37.1        17.1     Preferred Share dividends                               (4.1)      (2.2)     (8.2)      (4.4)     -------------------------                                ----        ----       ----        ----     Net income (loss) attributable to Common Shares         (2.4)       11.5       28.9        12.7                                     Per Common Share ($)     (0.01)       0.06       0.14        0.06                                     ===================       =====        ====       ====        ====  Financial Performance  For the three months ended June 30, 2014, Veresen recorded a net loss  attributable to Common Shares of $2.4 million or $0.01 net loss per Common  Share compared to net income of $11.5 million or $0.06 per Common Share for  the same period last year. The decrease in earnings was primarily driven by  higher project development spending related to Jordan Cove LNG, lower  midstream earnings, and the revaluation of the York Energy Centre interest  rate hedge.  Higher project development spending in the second quarter of 2014 reflects  Veresen's efforts to further advance Jordan Cove LNG following its receipt of  a conditional order from the U.S. Department of Energy to export liquefied  natural gas to those countries that do not have Free Trade Agreement status  with the U.S.  As Veresen has continued to de-risk this project, the Company  has dedicated additional resources towards its commercial, engineering and  financing activities and, as anticipated, development spending has increased  accordingly.  The Midstream business generated net income of $8.7 million before tax for the  three months ended June 30, 2014 compared to $15.6 million for the same period  in 2013. Hythe/Steeprock generated consistent earnings relative to the  comparative period, while Aux Sable's results were negatively impacted by  lower NGL margins resulting from higher gas prices.  A revaluation of the York Energy Centre interest rate hedge resulted in an  $11.7 million reduction in second quarter Power earnings compared to the same  period last year. Partially offsetting this reduction was the receipt of a  $3.9 million retroactive adjustment related to York Energy Centre's power  purchase agreement with the Ontario Power Authority.  Second quarter 2014 results also reflect an increase in Pipeline earnings from  Alliance, primarily due to higher negotiated depreciation rates and  contributions from the Tioga Lateral pipeline.     Distributable Cash     ------------------                                                                                                                                 Three months                                                                                                                                       ended             Six months ended                                                                                                                                      June 30                             June 30                                                                                                                                      -------                -------   ($ Millions, except per Common Share amounts)                                                                         2014        2013        2014        2013  --------------------------------------------                                                                         ----        ----        ----        ----  Pipeline                                                                                                             40.6        37.9        81.6        76.4  Midstream                                                                                                            27.0        23.7        69.7        50.9  Power                                                                                                                17.8         7.1        24.9        16.9  Veresen - Corporate                                                                                                (15.0)     (15.8)     (32.0)     (34.3)  Current tax                                                                                                         (2.6)      (1.5)      (6.7)      (1.7)  Preferred Share dividends                                                                                           (4.1)      (2.2)      (8.2)      (4.4)  -------------------------                                                                                            ----        ----        ----        ----  Distributable Cash (1)                                                                                               63.7        49.2       129.3       103.8                         Per Common Share ($)                                                                            0.29        0.25        0.62        0.52                         ===================                                                                             ====        ====        ====        ====  (1) See the reconciliation of distributable cash to cash from operating activities in the tables attached to this  news release.  For the three months ended June 30, 2014, Veresen generated distributable cash  of $63.7 million or $0.29 per Common Share compared to $49.2 million or $0.25  Common Share for the same period in 2013. Higher distributable cash reflects  increased contributions from each of Veresen's Pipeline, Midstream and Power  businesses, partially offset by higher taxes and Preferred Share dividends.  Overview of Business Segments  Pipelines  In the second quarter of 2014, Alliance Pipeline filed an application with the  NEB for regulatory approval of the tolls and tariff provisions required to  implement Alliance's proposed new services commencing December 1, 2015. The  NEB application is a key milestone for Alliance as it reflects a move to a new  business model under new natural gas transportation agreements. Regulatory  approval will allow Alliance to offer its customers a menu of new services and  competitive tolls replacing the 15-year service contracts that expire November  30, 2015.  Alliance's new services offering reflects extensive market consultation and  includes full-path and segmented receipt and delivery services, a new Canadian  trading pool, and a revised hydrocarbon dewpoint specification. Alliance plans  to file a regulatory application with the FERC in 2015 to revise its U.S.  tariff.  Alliance continues to be in active negotiations with prospective and existing  shippers with respect to re-contracting its pipeline capacity post-2015. The  signing of binding Precedent Agreements will be timed with the RGP agreements  that Aux Sable is negotiating with the producer community.  Midstream  Veresen's maintenance turnaround at the Steeprock natural gas processing plant  in British Columbia was completed on budget and on schedule in June 2014.  Turnaround activities were performed in a manner consistent with Veresen's  ongoing commitment to the health and safety of its employees and contractors,  and safeguarding of the environment. The majority of the costs associated with  the turnaround will be recovered under Veresen's Midstream Services Agreement  with Encana Corporation.  Aux Sable continues to work with producers within an economic radius of the  Alliance pipeline to provide options and value for natural gas and natural gas  liquids ("NGLs") to reach large and liquid U.S. markets. Aux Sable holds  several RGP agreements with producers that will enhance the value of the  producers' NGLs.  In June 2014, Aux Sable executed an additional long-term RGP agreement with  7G. The agreement significantly increases the volumes originally agreed to by  the companies in February 2013. Under this new long-term agreement, volumes of  liquids-rich natural gas are expected to ramp up to 500 mmcf/d. These supplies  will be processed at Aux Sable's extraction and fractionation facilities  located in Channahon, Illinois.  Power  Construction of the Dasque-Middle run-of-river project in northwest British  Columbia is proceeding as planned and it is expected to be in-service in the  fourth quarter of 2014. Construction of the 33 MW St. Columban wind project is  progressing, with commercial in-service expected in the first half of 2015.  The 40 MW Grand Valley III wind project continues to advance through the  regulatory process. Testing and commissioning of the 13 MW Whitecourt waste  heat facility is ongoing and the facility is expected to be in service by the  fourth quarter of 2014.  Jordan Cove LNG  In July 2014, Jordan Cove LNG and the associated Pacific Connector Gas  Pipeline received their collective Notice of Schedule for environmental review  from the FERC. Receipt of this schedule is an important milestone in the  regulatory process. FERC's schedule calls for a final EIS to be issued on  February 27, 2015. Based on this schedule, Veresen has reviewed and updated  its project timeline and expects to make a final investment decision in  mid-2015. With a four-year construction period, commercial LNG production is  targeted for mid- to late-2019. Once the FERC issues Jordan Cove LNG its Draft  Environment Impact Statement, a public hearing process is initiated.  Veresen continues to be in active negotiations to secure long-term  arrangements to produce LNG for international customers. Veresen's objective  is to execute binding agreements this year for all of Jordan Cove LNG's  initial capacity of 6 million tonnes per annum.  Veresen also continues to negotiate the engineering, procurement and  construction contract with a joint venture formed by Kiewit and Black & Veatch  for the design and construction the LNG terminal. Veresen expects the EPC  contract to be completed in late 2014, following which a Class 1 cost estimate  and schedule will be generated by the contractor.  In the second quarter of 2014, Veresen engaged Macquarie Capital as its  financial advisor for the Jordan Cove LNG project.  2014 Guidance Update  Veresen has narrowed its guidance for 2014 distributable cash to be in the  range of $1.02 per Common Share to $1.20 per Common Share, with a midpoint of  $1.11 per Common Share. Further details concerning 2014 guidance can be found  in the "Invest" section of Veresen's web site at www.vereseninc.com.  Conference Call and Webcast  Veresen will host a conference call and webcast on August 7, 2014 at 9:00 am  MT (11:00 am ET) to discuss its results.  Dial-in: 1 (888) 231-8191 or 1 (647) 427-7450 Conference ID  72391260  The link to the conference call webcast is available on Veresen's website by  selecting "Invest" and then "Events & Presentations".  A replay of the call will be available at approximately 12:00 pm MT (2:00 pm  ET) on August 7, 2014 by dialing 1-855-859-2056 and 1-416-849-0833. The access  code is 72391260, followed by the pound sign. The replay will expire at  midnight (ET) on August 14, 2014.  MD&A, Financial Statements and Notes  Management's Discussion and Analysis ("MD&A") and consolidated financial  statements provide a detailed explanation of Veresen's financial results for  the second quarter ended June 30, 2014 compared to the second quarter ended  June 30, 2013 and should be read in conjunction with this news release. These  documents are available at www.vereseninc.com and at www.sedar.com.  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 a portfolio of assets in Canada and the United States. Veresen  is also actively developing a number of greenfield projects and, in the normal  course of its business, regularly evaluates and pursues acquisition and  development opportunities.  Veresen's Common Shares, Series A Preferred Shares, Series C 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", "VSN.PR.C" and VSN.DB.C", respectively. For further information,  please visit www.vereseninc.com.  Forward-Looking Information  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: the ability of Aux Sable and Alliance  to implement new service offerings; the timing of completion of construction  and start-up of the Dasque-Middle hydro project and the St. Columban Wind  Project; the estimated capital cost and timing of the final investment  decision of the Jordan Cove LNG project, Veresen's ability to negotiate  long-term service agreements with offtake customers for LNG; Veresen's ability  to realize its growth objectives; the availability of financing for current  capital projects and new investment opportunities; and the ability of each of  its businesses to generate distributable cash in 2014.  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: 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 by Veresen with Canadian securities regulators.        Veresen Inc.     Consolidated Statement of Financial      Position     (Canadian $ Millions; number of      shares in Millions; unaudited)                                      June 30, 2014 December 31, 2013     -------------------------------                                      ------------- -----------------     Assets     Current assets                                          Cash and short-                                          term                                          investments                                               219.5     26.6                                         Restricted cash                                              5.8      3.7                                          Distributions                                          receivable                                                 46.3     46.2                                         Receivables                                                 88.0     62.9                                         Other                                                       12.1     11.3                                         -----                                                       ----     ----                                                                                  371.7              150.7     Investments in jointly-controlled      businesses                                                                  822.4              857.7     Rate-regulated asset                                                          29.0               34.7     Pipeline, plant and other capital      assets                                                                    1,488.9            1,438.1     Intangible assets                                                            413.3              430.7     Other assets                                                                  61.2               61.5     ------------                                                                  ----               ----                                                                                3,186.5            2,973.4                                                                                =======            =======     Liabilities     Current liabilities                                         Payables                                                    66.6     55.0                                          Dividends                                          payable                                                    13.6     13.2                                          Current portion                                          of long-term                                          senior debt                                               211.2    212.4                                         ----------------                                           -----    -----                                                                                  291.4              280.6     Long-term senior debt                                                        958.1              975.1     Subordinated convertible debentures                                           85.3               86.2     Deferred tax liabilities                                                     272.5              277.3     Other long-term liabilities                                                   48.6               48.5     ---------------------------                                                   ----               ----                                                                                1,655.9            1,667.7                                                                                -------            -------     Shareholders' Equity     Share capital                                         Preferred shares                                           341.4    341.4                                         Common shares                                          (220.3 and                                          201.5                                          outstanding at                                          June 30, 2014                                          and                                                     2,147.4  1,848.6                                         December 31, 2013, respectively)     Additional paid-in capital                                                     4.3                4.3     Cumulative other comprehensive loss                                        (131.4)           (134.0)     Accumulated deficit                                                        (831.1)           (754.6)     -------------------                                                         ------             ------                                                                                1,530.6            1,305.7                                                                                -------            -------                                                                                3,186.5            2,973.4                                                                                =======            =======     Veresen Inc.     Consolidated Statement of Income                                                                          Three months       Six months ended                                                                           ended June 30                June 30      (Canadian $ Millions, except per       Common Share amounts;       unaudited)                                                     2014        2013        2014        2013      --------------------------------                                ----        ----        ----        ----     Equity income                                                    27.1        41.2        79.3        69.6     Operating revenues                                               89.3        89.8       181.3       161.4     Operations and maintenance                                     (44.8)     (47.0)     (95.0)     (78.7)     General, administrative and      project development                                           (32.5)     (21.2)     (55.4)     (41.8)     Depreciation and amortization                                  (24.8)     (22.3)     (48.9)     (44.7)     Interest and other finance                                     (14.3)     (15.6)     (28.8)     (31.1)     Foreign exchange and other                                      (0.2)        1.1         0.3         1.6     Gain on sale of assets                                       -        -       14.3           -     ----------------------                                     ---      ---       ----         ---     Net income (loss) before tax                                    (0.2)       26.0        47.1        36.3     Current tax                                                     (4.2)      (2.4)      (9.9)      (3.4)     Deferred tax                                                      6.1       (9.9)      (0.1)     (15.8)     ------------                                                      ---        ----        ----       -----     Net income                                                        1.7        13.7        37.1        17.1     Preferred Share dividends                                       (4.1)      (2.2)      (8.2)      (4.4)     -------------------------                                        ----        ----        ----        ----     Net income (loss) attributable      to Common Shares                                               (2.4)       11.5        28.9        12.7     ==============================                                   ====        ====        ====        ====     Net income (loss) per Common      Share                                       Basic and diluted              (0.01)       0.06        0.14        0.06                                       =================               =====        ====        ====        ====     Consolidated Statement of      Comprehensive Income                                                                       Three months    Six months ended                                                                        ended June 30             June 30      (Canadian $ Millions; unaudited)                                2014        2013        2014        2013      --------------------------------                                ----        ----        ----        ----     Net income                                                        1.7        13.7        37.1        17.1     Other comprehensive income      (loss)                                        Cumulative                                        translation                                        adjustment                                        Unrealized foreign exchange                                        gain (loss) on translation    (17.9)       15.4         2.6        24.7                                       ----------------------------    -----        ----         ---        ----     Other comprehensive income      (loss)                                                        (17.9)       15.4         2.6        24.7     --------------------------                                      -----        ----         ---        ----     Comprehensive income (loss)                                    (16.2)       29.1        39.7        41.8     Preferred Share dividends                                       (4.1)      (2.2)      (8.2)      (4.4)     -------------------------                                        ----        ----        ----        ----     Comprehensive income (loss)      attributable to Common Shares                                 (20.3)       26.9        31.5        37.4     ==============================                                  =====        ====        ====        ====         Veresen Inc.     Consolidated Statement of      Cash Flows                                                                          Three months      Six months ended                                                                           ended June 30               June 30     (Canadian $ Millions;      unaudited)                                                      2014        2013       2014        2013     ---------------------                                            ----        ----       ----        ----     Operating                                 Net income                              1.7        13.7       37.1        17.1                                 Equity income                        (27.1)     (41.2)    (79.3)     (69.6)                                  Distributions from jointly-                                  controlled businesses                 52.9        45.5      117.1        92.0                                 Depreciation and amortization          24.8        22.3       48.9        44.7                                  Foreign exchange and other non-                                  cash items                             3.7         0.6        3.2       (0.8)                                 Deferred tax                          (6.1)        9.9        0.1        15.8                                 Gain on sale of assets                    -          -    (14.3)          -                                  Changes in non-cash working                                  capital                              (2.0)        4.2     (19.9)      (6.8)                                 ----------------------------           ----         ---      -----        ----                                                                      47.9        55.0       92.9        92.4                                                                      ----        ----       ----        ----     Investing                                 Proceeds from sale of assets              -          -      18.7           -                                  Investments in jointly-                                  controlled businesses                (7.4)     (13.5)    (12.7)     (35.9)                                  Return of capital from jointly-                                  controlled businesses                    -          -      11.2           -                                  Pipeline, plant and other capital                                  assets                              (39.9)     (15.0)    (80.5)     (24.1)                                 Restricted cash                       (1.2)      (0.4)     (2.1)      (2.9)                                 Other                                 (0.2)        0.1      (0.5)        0.1                                 -----                                  ----         ---       ----         ---                                                                    (48.7)     (28.8)    (65.9)     (62.8)                                                                     -----       -----      -----       -----     Financing                                 Restricted cash                           -          -         -        3.9                                  Long-term issued, net of issue                                  costs                                198.7           -     198.7           -                                 Long-term debt repaid                (54.1)      (3.8)    (56.3)      (5.8)                                 Net change in credit facilities     (188.8)       23.0    (162.5)       67.0                                  Common Shares issued, net of                                  issue costs                          272.9           -     272.9           -                                 Common Share dividends paid          (40.6)     (38.8)    (80.1)     (77.6)                                 Preferred Share dividends paid        (4.1)      (2.2)     (8.2)      (4.4)                                  Repayments from jointly-                                  controlled businesses                  0.4         0.4        0.8         0.7                                 Other                                     -        0.6        1.3       (1.9)                                 -----                                   ---        ---        ---        ----                                                                     184.4      (20.8)     166.6      (18.1)                                                                     -----       -----      -----       -----     Increase in cash and short-      term investments                                               183.6         5.4      193.6        11.5     Effect of foreign exchange      rate changes on cash and      short-term investments                                         (0.8)        0.1      (0.7)        0.2     Cash and short-term      investments at the      beginning of the period                                         36.7        22.3       26.6        16.1     ------------------------                                         ----        ----       ----        ----     Cash and short-term      investments at the end of      the period                                                     219.5        27.8      219.5        27.8     ==========================                                      =====        ====      =====        ====        Veresen Inc.     Distributable Cash                         Three months Six months ended                        ended June 30          June 30     (Canadian $      Millions, except      where noted;      unaudited)                 2014              2013     2014      2013     -----------------           ----              ----     ----      ----     Pipeline                    40.6              37.9     81.6      76.4     Midstream                   27.0              23.7     69.7      50.9     Power                       17.8               7.1     24.9      16.9     Veresen-Corporate         (15.0)           (15.8)  (32.0)   (34.3)     Current tax                (2.6)            (1.5)   (6.7)    (1.7)     Preferred Share      dividends                 (4.1)            (2.2)   (8.2)    (4.4)     ---------------             ----              ----     ----      ----     Distributable cash       (1)                      63.7              49.2    129.3     103.8     ==================          ====              ====    =====     =====     Distributable cash      per Common Share      ($) (2)                    0.29              0.25     0.62      0.52     ==================          ====              ====     ====      ====     Dividends paid/      payable(3)                 55.0              49.8    105.4      99.4     ===============             ====              ====    =====      ====     Dividends paid/      payable per      Common Share ($)           0.25              0.25     0.50      0.50     =================           ====              ====     ====      ====     (1)                           Distributable cash is not a                                   standard measure under generally                                   accepted accounting principles in                                   the United States                                   and may not be comparable to                                   similar measures presented by                                   other entities. Distributable cash                                   represents the cash                       available to Veresen for                                   distribution to common                                   shareholders after providing for                                   debt service obligations,                                   Preferred                                   Share dividends, and any                                   maintenance and sustaining capital                                   expenditures. Distributable cash                                   does not include                                   distribution reserves, if any,                                   available in jointly-controlled                                   businesses, project development                                   costs, or transaction                                   costs incurred in conjunction with                                   acquisitions. Project development                                   costs are discretionary, non-                                   recoverable                                   costs incurred to assess the                                   commercial viability of greenfield                                   business initiatives unrelated to                                   the Company's                                   operating businesses. The Company                                   considers transaction costs to be                                   part of the consideration paid for                                   an                                   acquired business and, as such, are                                   unrelated to the Company's                                   operating businesses.                                   Distributable cash is                                   an important measure used by the                                   investment community to assess the                                   source and sustainability of                                   Veresen's                                   cash distributions and should be                                   used to supplement other                                   performance measures prepared in                                   accordance                                   with generally accepted accounting                                   principles in the United States.                                   See the following table for the                                   reconciliation                                   of distributable cash to cash 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 June 30, 2014 the                                   average number of Common Shares                                   outstanding for this calculation                                   was 220,042,623 (2013 -                                   199,282,658)                                   and 225,909,932 (2013 -                                   205,189,167) on a basic and                                   diluted basis, respectively. For                                   the six months ended                                   June 30, 2014 the average number of                                   Common Shares outstanding for this                                   calculation was 211,013,298                                   (2013 - 198,844,197) and                                   216,899,856 (2013 - 204,750,705)                                   on a basic and diluted basis,                                   respectively.                                   The number of Common Shares                                   outstanding would increase by                                   5,842,274 (2013 - 5,906,508)                                   Common                                   Shares if the outstanding                                   Convertible Debentures on June 30,                                   2014 were converted into Common                                   Shares.     (3)                           Includes $14.0 million and $25.0                                   million of dividends for the three                                   and six months ended June 30,                                   2014, respectively                                   (2013 -$11.0 million and $21.8                                   million) satisfied through the                                   issuance of Common Shares under                                   the Company's                                   Premium DividendTM (trademark of                                   Canaccord Genuity Corp.) and                                   Dividend Reinvestment Plan.     Veresen Inc.     Reconciliation of      Distributable Cash to Cash      from Operating Activities                                                                      Three months   Six months ended                                                                    ended June 30         June 30     (Canadian $ Millions;      unaudited)                                                  2014        2013    2014        2013     ---------------------                                        ----        ----    ----        ----     Cash from operating      activities                                                  47.9        55.0    92.9        92.4     Add (deduct):                                 Project development costs (4)      21.0         9.1    30.3        15.8                                  Change in non-cash working                                  capital                            1.4       (4.5)   21.5         8.3                                  Principal repayments on senior                                  notes                            (2.9)      (3.0)  (5.9)      (5.8)                                 Maintenance capital expenditures  (1.2)      (1.8)  (3.8)      (3.8)                                  Distributions earned greater                                  (less) than distributions                                  received (5)                         -      (4.2)  (0.7)      (0.3)                                 Preferred Share dividends         (4.1)      (2.2)  (8.2)      (4.4)                                  Current tax on Preferred Share                                  dividends                          1.6         0.8     3.2         1.6                                 -------------------------------     ---         ---     ---         ---     Distributable cash                                           63.7        49.2   129.3       103.8     ==================                                           ====        ====   =====       =====     (4)               Represents costs incurred by the                       Company in relation to projects                       where the recoverability of such                       costs has not yet been                       established.                      Amounts incurred for the three                       and six months ended June 30,                       2014 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.    SOURCE  Veresen Inc.  Dorreen Miller, Director, Investor Relations, Phone: (403) 213-3633, Email:  investor-relations@vereseninc.com  To view this news release in HTML formatting, please use the following URL:  http://www.newswire.ca/en/releases/archive/August2014/06/c3547.html  CO: Veresen Inc. ST: Alberta NI: OIL CONF ERN  
Press spacebar to pause and continue. Press esc to stop.