Annual Report - 2001 - ARC Resources Ltd.

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MANAGEMENT’S DISCUSSION AND ANALYSIS
CASH DISTRIBUTIONS
Total cash distributions of $2.31 per trust unit were made in fiscal year 2001
($2.01 in 2000) for total cumulative distributions since inception of $505.3 million
($9.08 per trust unit). This record distribution level was a result of continued strong
performance of the Trust. In 2001, 90 per cent of cash flow was distributed to unitholders.
The remaining 10 per cent ($26.2 million) was used to fund capital expenditures and to
make the annual contribution to the reclamation fund. ARC’s distribution policy is to
withhold up to 20 per cent of cash flow net of the reclamation fund contributions to fund
capital expenditures. The actual amount withheld is dependant on the commodity price
environment and is at the discretion of the Board of Directors. This holdback policy is a
key difference between ARC and other conventional oil and gas trusts. We believe it is
essential to focus on production replacement activities partially funded by cash flow in
order to enhance long-term unitholder returns.
01
CASH AVAILABLE FOR DISTRIBUTION
($ millions)
00
99
98
97
70 140 210 280
Cash Distributed
Cash Flow
Monthly cash distributions for the first quarter of 2002 were set at $0.13 per unit
subject to commodity price fluctuations. Revisions, if any, to the monthly distribution are
normally announced on a quarterly basis in the context of prevailing and anticipated
commodity prices. During periods of volatile commodity prices, the Trust may vary the
distribution rate monthly. Any differences between cash available for distribution and
actual cash distributions in any quarter are adjusted for in the ensuing quarter’s
monthly distribution.
ARC ENERGY TRUST AR 2001