Financial Report - Veresen Inc.

Significant items that affected quarterly financial results include the following:
• Fourth quarter 2012 reflected continued weakness in NGL market conditions, resulting in decreased fractionation margins, increased
results from our Power business and increased administrative and finance costs to support the Hythe/Steeprock acquisition.
Fourth quarter results also included an $4.3 million and a $16.5 million contribution to net income before tax and distributable cash,
respectively, from Hythe/Steeprock.
• Third quarter 2012 reflected continued weakness in NGL market conditions, resulting in decreased fractionation margins, reduced
results from our Power business and increased administrative and finance costs to support the Hythe/Steeprock acquisition.
Third quarter results also included an $8.0 million and a $17.3 million contribution to net income before tax and distributable cash,
respectively, from Hythe/Steeprock.
• Second quarter 2012 reflected continued weakness in NGL market conditions, resulting in decreased fractionation margins, reduced
results from our Power business and increased administrative and finance costs to support the Hythe/Steeprock acquisition.
Second quarter results also included a $5.9 million and a $16.9 million contribution to net income before tax and distributable cash,
respectively, from Hythe/Steeprock.
• First quarter 2012 included a $5.1 million and a $9.5 million contribution to net income before tax and distributable cash, respectively,
from Hythe/Steeprock.
• Fourth quarter 2011 reflected the recognition of $30.6 million of NGL margin-based lease revenues, a new record for us, in net
income attributable to Common Shares through our equity income from Aux Sable and distributable cash.
• Third quarter 2011 reflected the recognition of $24.4 million of NGL margin-based lease revenues in net income attributable
to Common Shares through our equity income from Aux Sable and distributable cash, and incremental earnings contributed
from our power facilities acquired in the fourth quarter of 2010 and the first quarter of 2011, offset by a $12.1 million (after tax)
or $0.07 per Common Share unrealized mark-to-market loss on York Energy’s interest rate swap.
• Second quarter 2011 reflected solid financial performance from our operating businesses.
• First quarter 2011 reflected the recognition of $10.1 million of NGL margin-based lease revenues in net income attributable
to Common Shares through our equity income from Aux Sable and distributable cash.
Disclosure Controls and Procedures
Disclosure controls and procedures are designed to provide reasonable assurance that all relevant information is gathered and reported
to senior management, including the President & Chief Executive Officer (CEO) and Senior Vice President, Finance and Chief Financial
Officer (CFO), on a timely basis so appropriate decisions can be made regarding public disclosure.
We have evaluated the effectiveness of the design and operation of our disclosure controls and procedures, under the supervision of
our CEO and CFO. Based on this evaluation, we concluded the disclosure controls and procedures, as defined in National Instrument
52-109, were effective as of December 31, 2012.
Internal Controls Over Financial Reporting
We are responsible for establishing and maintaining adequate internal controls over financial reporting to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with US
GAAP. We assessed the design and effectiveness of internal controls over financial reporting as at December 31, 2012, and, based on
that assessment, determined the design and operating effectiveness of internal controls over financial reporting was effective.
However, because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a
timely basis.
No changes were made to internal controls over financial reporting during the period ended December 31, 2012 that have materially
affected, or are reasonably likely to materially affect, internal controls over financial reporting.
37