Financial Report - Veresen Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the period February 9, 2012 to December 31, 2012, the Company recorded revenues of $95.7 million and net income before tax
of $23.3 million related to the acquired business. Had the acquisition occurred on January 1, 2011, pro forma consolidated operating
revenues would have been approximately $276.1 million and consolidated net income would have been approximately $40.2 million
for the year ended December 31, 2012 ($287.2 million and $51.8 million respectively, for the year ended December 31, 2011). The pro
forma financial information is presented for informational purposes only and is not necessarily indicative of what the financial position
or results of operations actually would have been had the acquisition been completed at the dates indicated.
Acquisition of Interests in East Windsor Cogeneration and EnPower
On February 3, 2012, the Company purchased the 25% interest held by a partner in each of East Windsor Cogeneration LP and EnPower
Green Energy Generation Limited Partnership for $70 million, including working capital at closing and the assumption of $45 million
of debt. The acquisition increased the Company’s interest in each of these entities from 75% to 100%. As a result, the Company has
removed the associated non-controlling interest balance from shareholders’ equity. The difference between the fair value and book
value of non-controlling interest was recorded as additional paid-up capital, as the acquisition did not result in a change in control.
B.C. Run-of-River Facilities
On February 14, 2011, the Company acquired a 99% ownership interest in Furry Creek and 100% of the assets comprising the
Clowhom hydroelectric facilities in British Columbia, and rights to other development projects for $100.7 million, including working
capital at closing and net of project debt of $12.1 million. The acquisition of Furry Creek and Clowhom has been accounted for using the
acquisition method and its results of operations since the date of acquisition have been reported on a consolidated basis. Transaction
costs of $1.8 million were recorded in general and administrative expenses. The purchase price was allocated to assets and liabilities
as described below:
Working capital, including cash of $1.6 million 0.9
Capital assets 107.4
Intangible assets 8.6
Long-term debt (including current portion) (12.1)
Other long-term liabilities (1.4)
Deferred tax liability (2.6)
Non-controlling interest (0.1)
100.7
The intangible assets, representing water licenses and land right of way, are being amortized over a weighted average of approximately
35 years.
Note 5. Restricted Cash
2012 2011
Subscription receipts – 348.6
Other Power 5.8 6.0
5.8 354.6
Proceeds from the Company’s December 16, 2011 subscription receipt offering were held in escrow at December 31, 2011 pending the
fulfillment or waiver of certain conditions (note 16).
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