Financial Report - Veresen Inc.

Management‘s Discussion and Analysis
Year ended December 31, 2012
Financial and Operating Highlights
($ Millions, except where noted) 2012 2011 2010
Operating Highlights (100%)
Pipeline
Alliance – billion cubic feet per day 1.553 1.564 1.600
AEGS – thousand barrels per day (1) 284.4 286.9 283.9
Midstream
Hythe/Steeprock – million cubic feet per day (2) 393.1 n/a n/a
Aux Sable – thousand barrels per day 72.2 77.0 74.1
Power – gigawatt hours (net) 925.9 871.1 665.7
Financial Results
Equity income 135.8 155.1 168.8
Operating revenues 264.2 174.2 121.0
Net income attributable to Common Shares 38.9 53.1 132.7
Per Common Share ($)
– basic 0.20 0.33 0.92
– diluted 0.20 0.33 0.90
Cash from operating activities 179.9 191.4 165.6
Distributable cash (3, 4) 211.4 193.0 180.6
Per Common Share ($) – basic and diluted 1.09 1.18 1.24
Dividends paid/payable (5) 193.5 163.0 145.2
Per Common Share ($) 1.00 1.00 1.00
Capital expenditures (6) 91.5 18.5 6.3
Acquisitions, net of cash acquired 890.5 144.6 93.3
Financial Position
Cash and short-term investments 16.1 21.9 22.6
Total assets 3,144.0 2,558.1 1,960.7
Senior debt 1,259.3 765.6 572.1
Subordinated convertible debentures 86.2 86.2 86.3
Shareholders’ equity 1,359.8 938.8 921.0
Common Shares
Outstanding – as at December 31 (7) 197,804,153 166,602,055 158,152,406
Average daily volume 378,758 305,042 334,773
Price per Common Share – close ($) 11.83 15.30 11.88
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Average daily volume for AEGS is based on toll volumes.
Average daily volume for Hythe/Steeprock is based on fee volumes.
This item is not a standard measure under US GAAP and may not be comparable to similar measures presented by other entities. See section entitled “Non-GAAP
Financial Measures” in this MD&A.
We have provided a reconciliation of distributable cash to cash from operating activities in the “Non-GAAP Financial Measures” section of this MD&A.
Includes $79.2 million of dividends satisfied through the issuance of Common Shares under our Premium Dividend TM and Dividend Reinvestment Plan
(trademark of Canaccord Genuity Corp.) for the year ended December 31, 2012 (2011 – $111.4 million).
Capital expenditures for wholly-owned and majority-controlled businesses, as presented on the consolidated statement of cash flows.
As at the close of markets on February 25, 2013 we had 198,407,806 Common Shares outstanding.
This MD&A, dated March 6, 2013, provides a review of the significant events and transactions that affected our performance during
the year ended December 31, 2012 relative to the year ended December 31, 2011. It should be read in conjunction with our consolidated
financial statements and notes as at and for the year ended December 31, 2012, prepared in accordance with accounting principles
generally accepted in the United States.
1