Financial Report - Veresen Inc.

Opportunities and Developments
Aux Sable continues to successfully advance its rich gas inducement strategy by entering into multi-year extraction rights agreements,
which offer competitive NGL recovery options to producers who utilize the Alliance pipeline for delivery of liquids-rich natural gas to
Aux Sable’s Channahon facility.
In July 2012, Aux Sable entered into a ten-year extraction rights agreement with a producer in northwestern Alberta. The rich gas
stream is expected to originate from the producer’s Duvernay and Montney development areas, and to be delivered to Aux Sable’s
Channahon Facility for processing via the Alliance pipeline commencing in the second quarter of 2013. In February 2013, Aux Sable
announced it had entered into additional extraction rights agreements with Canadian producers.
In February 2013, Aux Sable announced it had entered into additional extraction rights agreements with Canadian producers. We expect
these agreements to result in the transportation of approximately 450 mmcf/d of natural gas on the Alliance pipeline beyond 2015.
Power Business
Three months ended December 31, 2012 Three months ended December 31, 2011
Gas-Fired/
Gas-Fired/
District Power- District Power-
($ Millions, except where noted) Total Energy Renewables Corporate Total Energy (2) Renewables (3) Corporate
Proportionately Consolidated (1)
EBITDA 17.6 17.1 4.9 (4.4) 8.1 8.4 3.4 (3.7)
Depreciation & amortization (11.7) (8.5) (3.1) (0.1) (9.0) (6.1) (2.7) (0.2)
Interest, net (7.2) (5.5) (1.7) – (3.6) (2.7) (1.3) 0.4
Fair value gain (loss) 1.9 1.9 – – (4.7) (4.7) – –
Foreign exchange and other 0.1 – 0.1 – – – – –
Net income (loss) before taxes
and non-controlling interest 0.7 5.0 0.2 (4.5) (9.2) (5.1) (0.6) (3.5)
Volumes (GWh)
Gross 221.9 100.7 121.2 – 255.8 138.6 117.2 –
Net 192.0 93.0 99.0 – 216.5 122.6 93.9 –
Year ended December 31, 2012 Year ended December 31, 2011
Gas-Fired/
Gas-Fired/
District Power- District Power-
($ Millions, except where noted) Total Energy Renewables Corporate Total Energy (2) Renewables (3) Corporate
Proportionately Consolidated (1)
EBITDA 65.5 60.6 18.4 (13.5) 48.3 43.1 18.1 (12.9)
Depreciation & amortization (43.3) (30.5) (12.3) (0.5) (35.3) (24.3) (10.3) (0.7)
Interest, net (23.4) (17.5) (6.7) 0.8 (15.2) (10.6) (5.0) 0.4
Fair value gain (loss) 0.2 0.2 – – (21.7) (21.7) – –
Foreign exchange and other – – – – (0.1) – – (0.1)
Net income (loss) before taxes
and non-controlling interest (1.0) 12.8 (0.6) (13.2) (24.0) (13.5) 2.8 (13.3)
Volumes (GWh)
Gross 1,041.9 563.4 478.5 – 1,015.7 526.5 489.2 –
Net 925.9 528.9 397.0 – 871.1 466.3 404.8 –
(1) Our jointly-controlled power businesses (York Energy Centre, NRGreen, and Grand Valley) are presented in the above results on a proportionately consolidated basis,
which does not conform to US GAAP. A reconciliation to US GAAP is provided in the “Non-GAAP Financial Measures” section of this MD&A.
(2) Includes 100 percent of East Windsor Cogeneration; the offsetting 25 percent, related to the portion not owned by us in 2011, is reflected in non-controlling interest.
(3) Includes 100 percent of EnPower; the offsetting 25 percent, related to the portion not owned by us in 2011, is reflected in non-controlling interest.
Our power business is comprised of gas-fired generation, renewable power generation, and district energy facilities in North America.
Consistent with our overall corporate strategy, we focus on assets that have long-term sales contracts, capacity-based cash flows,
limited volume risk and commodity exposure, and creditworthy counterparties. This focus provides for predictable, stable cash flows
based primarily on the availability of the facilities rather than short-term electricity demand and prices.
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