Financial Report - Veresen Inc.

Geographical Components
Net income (loss) before taxes and non-controlling interest for the years ended 2012 and 2011 are as follows:
2012 2011
Net Income (loss) before taxes and non-controlling interest
Canada 9.4 (21.6)
United States 66.1 118.0
Net Income before taxes and non-controlling interest 75.5 96.4
Tax expense for the years ended 2012 and 2011 are as follows:
2012 2011
Current tax expense
Canada 6.8 0.1
United States 11.4 28.0
Total current tax expense 18.2 28.1
Deferred tax expense
Canada 7.1 1.6
United States 3.5 13.5
Total deferred tax expense 10.6 15.1
Total tax expense 28.8 43.2
Components of Deferred Taxes
The provision for deferred taxes arises from temporary differences in the carrying values of assets and liabilities for financial statement
and income tax purposes and the effect of loss carryforwards. The items comprising the deferred tax assets and liabilities are as follows:
2012 2011
Deferred tax liabilities (assets)
Investments in jointly-controlled businesses 232.6 214.1
Regulatory assets 76.4 85.8
Pipeline, plant and other capital assets 88.2 64.4
Non-capital losses (65.5) (36.7)
Asset retirement obligations (8.5) (5.1)
Deferred revenue and costs (7.0) (0.8)
Total net deferred tax liabilities 316.2 321.7
The above deferred tax balances at December 31, 2012 and 2011 are net of valuation allowances of $2.1 million and $4.6 million, respectively.
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