Financial Report - Veresen Inc.

Common Shares
2012 2011
Common Shares Number Value Number Value
January 1 Opening balance (1) 167,374,180 1,391.0 158,861,727 1,279.6
Convertible Debentures converted into Common Shares,
net of issue costs (2012 and 2011: nil) 684 – 342 –
Common Shares issued under Premium Dividend and
Dividend Reinvestment Plan (“DRIP”) (2) 5,704,289 75.6 7,739,986 100.3
Common Shares exchanged from subscription receipts,
net of issue costs (2012: $18.2 million) 24,725,000 334.1 – –
December 31 197,804,153 1,800.7 166,602,055 1,379.9
Common Shares to be issued under DRIP (2) 308,753 3.6 772,125 11.1
198,112,906 1,804.3 167,374,180 1,391.0
(1)
(2)
Includes 772,125 Common Shares valued at $11.1 million (2011 –709,321 Common Shares; $8.7 million) subsequently issued under DRIP.
Represents Common Shares issued to satisfy a portion of the Company’s dividends.
On December 16, 2011, the Company completed the sale of 24.7 million subscription receipts at a price of $14.10 per subscription
receipt for gross proceeds of $348.6 million. The gross proceeds from the sale of the subscription receipts were being held by an
escrow agent pending fulfillment or waiver of certain conditions (note 5). On February 9, 2012, each outstanding subscription receipt of
Veresen was automatically exchanged for one Common Share of Veresen and a dividend equivalent payment of $0.1666 per subscription
receipt in respect of the dividends declared by Veresen for the months ending December 31, 2011 and January 31, 2012.
The weighted average number of Common Shares outstanding used to determine net income per Common Share on a basic and
diluted basis for the year ended December 31, 2012, was 192,523,492 (2011 – 162,630,440). The number of Common Shares
outstanding would increase by 5,906,576 (2011 – 5,907,192) if the outstanding convertible debentures on December 31 were
converted into Common Shares. These were excluded from the diluted earnings per Common Share calculation as the effect
was anti-dilutive for the years ended December 31, 2012 and 2011.
Dividends
For the year ended December 31, 2012, the Company declared and paid dividends to common shareholders in the amount of $193.5 million
or $1.00 per Common Share (2011 – $163.0 million or $1.00 per Common Share).
Premium Dividend and Dividend Reinvestment Plan
The Company’s Premium Dividend and Dividend Reinvestment Plan (“DRIP”) allows eligible shareholders to elect to reinvest the
eligible portion of the dividend declared by the Company in additional Common Shares at a 5% discount to the average market price
or to receive the dividend in cash plus a 2% premium cash payment based on the eligible portion of the dividend. The Company
reserves the right to determine, for each dividend declared, how much new equity would be issued under the DRIP.
Preferred Shares
On February 14, 2012, the Company issued 8 million Cumulative Redeemable Preferred Shares, Series A (“Series A Preferred Shares”)
at a price of $25 per Series A Preferred Share. The holders of Series A Preferred Shares are entitled to receive fixed cumulative
preferential cash dividends at an annual rate of 4.4%, payable quarterly for an initial period up to but excluding September 30, 2017
if and when declared by the Board of Directors. The dividend rate will reset on September 30, 2017 and every five years thereafter
at a rate equal to the sum of the then five-year Government of Canada bond yield plus 2.92%. The Series A Preferred Shares are
redeemable by the Company, at the Company’s option, on September 30, 2017 and on September 30 of every fifth year thereafter.
Holders of Series A Preferred Shares have the right to convert all or any part of their shares into Cumulative Redeemable Preferred
Shares, Series B (“Series B Preferred Shares”) subject to certain conditions, on September 30, 2017 and on September 30 of every
fifth year thereafter. The holders of Series B Preferred Shares are entitled to receive quarterly floating rate cumulative dividends at
a rate equal to the sum of the then 90-day Government of Canada treasury bill rate plus 2.92%.
Dividends
In 2012, the Company made cash dividend payments of $7.7 million or $ 0.96 per share in respect of the Series A Preferred Shares.
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