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  
-0- Aug/06/2014 21:18 GMT
 
 
Press spacebar to pause and continue. Press esc to stop.