Veresen : Reports 2014 Fourth Quarter and Year-End Results, Affirms 2015 Guidance and Announces New Independent Director Nominee

CALGARY, ALBERTA--(Marketwired - Mar 12, 2015) - Veresen Inc. ("Veresen" or the "Company") (TSX:VSN) announced today its 2014 fourth quarter and year-end results.

Financial highlights include:

• Distributable cash⁽¹⁾ of $69 million or $0.26 per Common Share for the fourth quarter and $253 million or $1.12 per Common Share for the year.
• Adjusted net income attributable to Common Shares⁽¹⁾ of $9 million or $0.03 per Common Share for the fourth quarter and $31 million or $0.14 per Common Share for the year.
• Net income attributable to Common Shares of $21 million or $0.08 per Common Share for the fourth quarter and $52 million or $0.24 per Common Share for the year.
• Cash from operating activities of $71 million for the fourth quarter and $215 million for the year.

Key strategic activities for the year ended December 31, 2014 included:

• Veresen announced the formation of Veresen Midstream Limited Partnership ("Veresen Midstream") which is owned equally by Veresen and affiliates of Kohlberg Kravis Roberts & Co. L.P. ("KKR"). Veresen Midstream has entered into definitive agreements to acquire certain natural gas gathering and compression assets from Encana Corporation ("Encana") and the Cutbank Ridge Partnership ("CRP"), and also agreed to undertake up to $5 billion of new midstream expansion for Encana and CRP in the Montney region under a 30-year fee-for-service arrangement.
• Veresen completed the largest acquisition in its history, acquiring a 50% convertible preferred interest in the Ruby pipeline system ("Ruby") for US$1.425 billion. Ruby is a long-term contracted asset supporting stable cash flow, and is synergistic to the Company's proposed Jordan Cove LNG export terminal and proposed Pacific Connector Gas Pipeline ("Pacific Connector") to be located in Oregon.
• Re-contracting of the Alliance pipeline beyond 2015 has continued to build momentum. As of February 2015, Alliance has executed precedent agreements securing over 95% of total targeted capacity, with a combination of receipt and full path services and an average contract length of approximately five years.
• Aux Sable has executed a number of Rich Gas Premium ("RGP") agreements which has resulted in increased volumes of liquids-rich natural gas for processing and fractionation at Aux Sable's Channahon facility. Underpinned by customer agreements, Aux Sable is expanding fractionation capacity at the Channahon Facility by approximately 23% for availability in mid-2016.
• Veresen made significant progress in advancing the four key work streams related to Jordan Cove LNG and Pacific Connector. Activities focused on regulatory approvals and permitting, commercial off-take agreements, advancing engineering to obtain an updated cost estimate and finalize an engineering, procurement and construction ("EPC") contract, and project financing.

"2014 marked a year of tremendous progress in advancing our corporate strategy and positioning Veresen for the future. We have continued to build a robust, cohesive platform of assets which we will leverage and optimize over time," said Don Althoff, President and CEO of Veresen. "The acquisition of the Ruby Pipeline, creation of Veresen Midstream, significant progress on the re-contracting of the Alliance Pipeline, and achieving key milestones to advance Jordan Cove LNG, all contributed to a momentous year for Veresen."

⁽¹⁾ This is not a standard measure under GAAP and may not be comparable to similar measures used by other entities. See the reconciliation to the nearest GAAP measure in the tables attached to this news release.

Financial Performance

Veresen has presented adjusted net income attributable to Common Shares to enhance the comparability of its earnings. Adjusted net income represents net income adjusted for specific significant items which do not reflect the Company's underlying operations.

For the three months and year ended December 31, 2014, Veresen generated adjusted net income attributable to Common Shares of $8.6 million or $0.03 per Common Share and $30.7 million or $0.14 per Common Share, respectively. For the same periods last year, Veresen generated adjusted net income attributable to Common Shares of $11.7 million or $0.06 per Common Share and $40.5 million or $0.21 per Common Share. Earnings reflect increases in the Pipeline segment primarily as a result of the Ruby acquisition, offset by an increase in Corporate costs and higher Preferred Share dividends compared to 2013.

Veresen's 50% interest in Ruby, acquired November 6, 2014, contributed $15.6 million in earnings, providing a new stream of contracted, predictable income and diversification of the Company's portfolio of businesses.

The Midstream business generated adjusted net income before tax of $21.2 million and $81.7 million for the three months and year ended December 31, 2014 compared to $26.7 million and $87.3 million for the same periods last year. While Veresen's Hythe/Steeprock assets generated consistent earnings under its long-term take-or-pay contract, Midstream adjusted earnings decreased in the fourth quarter of 2014 due to a challenging NGL market for Aux Sable. Fractionation margins for propane plus were lower throughout 2014 driven by higher make-up gas costs and compounded by the steep decline in propane prices in the fourth quarter.

The Power business generated adjusted net income before tax of $0.9 million and $10.3 million for the three months and year ended December 31, 2014, respectively, compared to an adjusted net loss before tax of $0.8 million and $0.6 million for the same periods in the prior year. Power adjusted earnings increased in the fourth quarter of 2014 as a result of higher utilization across Veresen's portfolio of power assets. 2014 adjusted earnings further reflect a retroactive revenue adjustment received by the York Energy Centre relating to its power purchase agreement with the Ontario Power Authority.

A key strategic growth initiative for Veresen is the advancement of Jordan Cove LNG and Pacific Connector. The cost of funding this project through the development phase is expensed which impacts the Company's earnings. As Veresen continues to execute on its key milestones and de-risk the project, the Company has dedicated additional resources towards its commercial, engineering and financing work streams. This is reflected in increased Corporate costs.

For the three months and year ended December 31, 2014, Veresen generated net income attributable to Common Shares of $21.0 million or $0.08 per Common Share and $52.4 million or $0.24 per Common Share, respectively. For the same periods last year, Veresen generated net income attributable to Common Shares of $12.6 million or $0.06 per Common Share and $53.2 million or $0.27 per Common Share.

In addition to the factors impacting adjusted net income, net income reflects a number of non-operational or unusual items.

The revaluation of the York Energy Centre interest rate hedge amounted to an unrealized pre-tax loss of $3.8 million and $12.3 million for the fourth quarter and the year, respectively, compared to an unrealized pre-tax gain of $2.0 million and $13.8 million in the same periods last year.

For the three months and year ended December 31, 2014, the Company recognized a $33.8 million and $38.7 million realized pre-tax gain, respectively, relating to the forward foreign exchange contracts that Veresen entered into to manage the foreign exchange exposure relating to the Ruby acquisition.

Results include a $5.0 million impairment charge recorded in the fourth quarter against land held in Ontario, and results for the year further reflect gains from the first quarter sale of certain development projects.

Net income from discontinued operations is comprised of results from three U.S. gas-fired power generation facilities sold in January 2015, including a $12.2 million impairment loss recorded in the fourth quarter.

For the fourth quarter and year ended December 31, 2014, Veresen generated distributable cash of $68.5 million or $0.26 per Common Share and $252.7 million or $1.12 per share, respectively, compared to $55.8 million or $0.28 per Common Share and $228.9 million or $1.15 per Common Share for the same periods last year.

Distributable cash from Veresen's operating businesses largely reflects the same factors impacting adjusted net income. Distributable cash outflows for Veresen-Corporate were lower than the comparative periods due to reduced interest costs, driven by 2014 debt repayment and refinancing activities, and lower general and administrative costs. Current taxes in 2014 increased as a result of higher U.S.-based taxable earnings from Alliance, reduced ability to carry back losses in 2014, and timing of utilization of foreign tax credits.

Overview of Business Segments

Pipelines

Alliance Pipeline

Subject to regulatory approval, Alliance is offering capacity for transportation commencing December 1, 2015, under a proposed new services framework. The new services offering, which includes both fixed and flexible tolling options, responds to current market demands and the diverse needs of existing and prospective shippers. The new services offerings include both full-path and segmented services with a new Canadian trading pool, and a revised hydrocarbon dewpoint specification which will facilitate the transportation of higher heat content natural gas. The services offer shippers competitive fixed tolls for medium and long-term services and biddable tolls for interruptible and seasonal service.

In May 2014, Alliance Canada filed an application with the NEB for regulatory approval of the Canadian tolls and tariff provisions. A decision by the NEB is expected in mid-2015. Alliance U.S. will apply in mid-2015 to the Federal Energy Regulatory Commission ("FERC") for regulatory approval of its U.S. services and rates.

To date, Alliance has executed binding precedent agreements securing over 95% of total targeted capacity, representing a combination of receipt and full path, with an average contract length of approximately five years.

"Interest in contracting on the pipeline has grown over the last several quarters and we are optimistic about filling the remaining firm transport capacity on the pipeline in the near term," said Don Althoff.

Mr. Althoff added, "Once this process is complete, and we have received our regulatory approvals, we will begin to offer interruptible transport on the pipeline. This will be a key element of Alliance's new business model since this capacity can account for as much as 20% of the total throughput on the pipeline and can have a material impact on earnings. This step, along with other measures we are taking to generate additional revenue, will be important to offsetting the lower tolls post-2015."

Ruby Pipeline

On November 6, 2014, Veresen closed the acquisition of a 50% convertible preferred interest in Ruby for US$1.425 billion. Ruby is a 680-mile, 42-inch pipeline capable of transporting 1.5 bcf/d of natural gas. Ruby originates at the Opal hub in Wyoming and extends to the Malin hub in Oregon. The Malin hub is the main interconnect to the proposed Pacific Connector Gas Pipeline (50% owned by Veresen), which would supply the Company's proposed Jordan Cove LNG terminal. The acquisition was funded with proceeds from a $920 million subscription receipt offering and from a new credit facility.

Ruby is a strategic asset for Veresen and its earnings are supported by high-quality, long-term take-or-pay contracts providing stable cash flows. Ruby enhances Veresen's portfolio of contracted pipeline assets providing diversification into a high-value market in the U.S. The convertible preferred interest structure provides Veresen with downside risk protection, while preserving the Company's ability to participate in significant future cash flow growth following additional contracting and/or de-leveraging. Veresen believes that its Jordan Cove LNG project will support Ruby's continued and growing long-term utilization.

Midstream

Aux Sable

Aux Sable has been working with producers within an economic radius of the Alliance pipeline to provide options and value for natural gas and NGLs to reach large and liquid U.S. markets. As part of Aux Sable's strategy to attract liquids-rich natural gas to its Channahon Facility for the period following the expiry of Alliance's current transportation contracts, efforts have focused on working with producers developing liquids-rich fields in the Montney and Duvernay which are not yet connected to the Alliance pipeline system. Aux Sable has offered RGP agreements which share NGL margins with producers. These agreements allow producers to avoid immediate capital investment and receive NGL value tied to large, liquid U.S. markets.

Aux Sable has executed a number of RGP agreements and, as a result, Aux Sable's ability to extract additional NGLs beyond 2015 at the Channahon Facility has reached its limit. In response to customer demand, an expansion of the Channahon Facility was approved in 2014 which will allow for approximately 24,500 barrels per day of fractionation capacity over and above the current nameplate capacity of 107,000 barrels per day. This expansion will increase the propane and butane processing capacity at Aux Sable and is expected to be completed in mid-2016. The capital cost for this expansion is approximately US$130 million (gross).

Through the RGP agreements, Aux Sable may have gas positions in multiple locations on the Alliance pipeline system. Aux Sable continues to evaluate options to support and manage the supply of liquids-rich natural gas to the Channahon Facility. This includes the management of heat content at the Channahon Facility and variability in gas flows from producers along the system post-2015.

Veresen Midstream

On December 22, 2014, Veresen announced the formation of Veresen Midstream, a new Canadian midstream entity owned equally by Veresen and affiliates of KKR. Veresen Midstream entered into definitive agreements to acquire certain natural gas gathering and compression assets supporting Montney development in the Dawson area of northeastern British Columbia from Encana and CRP. CRP is a partnership between Encana and Cutbank Dawson Gas Resources Ltd., a subsidiary of Mitsubishi Corporation. Veresen Midstream has also agreed to undertake up to $5 billion of new midstream expansion for Encana and CRP in the Montney region under a 30-year fee-for-service arrangement.

Veresen will fund its interest in Veresen Midstream by contributing its Hythe/Steeprock gathering and processing assets valued at $920 million and, in exchange, will receive $420 million from Veresen Midstream, resulting in a 50% equity position valued at $500 million. KKR will fund its 50% interest in Veresen Midstream by contributing $500 million in cash. Concurrently, Veresen Midstream will acquire gathering and compression infrastructure and ongoing construction projects from Encana and CRP in the Dawson region of the Montney in British Columbia for total cash consideration of approximately $600 million, plus actual costs accrued in 2015. This infrastructure is located adjacent to the Hythe/Steeprock assets.

Veresen Midstream will be a leading player in the core of the Montney, one of North America's most prolific and competitive resource plays. Under the agreement, Veresen Midstream will undertake a large, multi-year capital program to construct contracted midstream infrastructure under favourable economic terms. Veresen Midstream will also pursue additional third-party growth opportunities. Veresen Midstream will be Veresen's primary growth vehicle for its Canadian natural gas and NGL midstream business. This transaction is expected to close at the end of the first quarter of 2015.

Power

The Power business performed in line with the Company's expectations in 2014, with a continued emphasis on operational efficiency and reliability. Veresen's facilities benefitted from a high price environment in early 2014, driven by extreme cold winter weather throughout eastern Canada and the northeastern parts of the United States.

Construction of the Dasque-Middle run-of-river project in northwest British Columbia was completed in the fourth quarter of 2014. Under the terms of the power purchase agreement with its customer, BC Hydro, the facility will be placed into commercial service after successfully completing a 72-hour performance and reliability test. Due to winter temperatures, flow rates have not been high enough to complete this test to date. Veresen expects to complete testing in the spring of 2015 when adequate water flows resume.

Construction of the 33 MW St. Columban wind project is progressing, with commercial in-service expected in the first half of 2015. The 40 MW Grand Valley Phase III wind project received its Renewable Energy Approval from the Ontario Minister of Environment and Climate Change in October 2014. Veresen commenced construction of this wind project in the fourth quarter of 2014, with commercial in-service expected in late 2015.

In January 2015, Veresen closed the sale of three gas-fired generation facilities located in Colorado and California for US$27.4 million.

Jordan Cove LNG and Pacific Connector Gas Pipeline

Veresen continues to gain momentum and make significant progress in advancing its Jordan Cove LNG and Pacific Connector project.

Key fourth quarter highlights and activities:

• Elizabeth (Betsy) Spomer was appointed President and CEO of Jordan Cove LNG.
• Veresen opened an office in Houston and has augmented the Jordan Cove LNG team with a number of industry professionals required through the construction and operating phases of the project.
• Jordan Cove LNG and Pacific Connector received a draft Environmental Impact Statement ("EIS") from the Federal Energy Regulatory Commission ("FERC") in the United States. The public comment period on the draft EIS was completed in February 2015.
• The application for the siting permit for the South Dunes Power Plant was deemed complete. The Oregon Department of Energy administers the facility siting process for the power plant.
• Veresen began an open book review of the revised capital cost estimate for the project.

In early 2015, the FERC advised that the final EIS for Jordan Cove LNG and Pacific Connector would be issued on June 12, 2015, versus their earlier posted date of February 27, 2015. Given that the FERC was delayed in issuing the Draft EIS, Veresen was disappointed but not surprised or concerned by the revised schedule, and looks forward to receiving the final EIS in June. As regulatory permitting is critical path for the project, based on the new FERC schedule, Veresen expects that Jordan Cove LNG and Pacific Connecter will receive all of its environmental permits and approvals by the end of 2015 in order to make a final investment decision.

With the revision to the FERC schedule, Veresen is taking advantage of the additional time to revisit the capital cost estimate for the project. In particular, the Jordan Cove LNG team is evaluating if the current downturn in commodity pricing, and the resulting scale-back in large capital projects, could result in an overall reduction in capital costs for the project. Veresen expects that an updated capital cost estimate will be completed in the second quarter of 2015.

In terms of sequencing, while Veresen negotiates a final EPC contract, commercial negotiations with off-take customers will continue into the second quarter, with Long-Term Service Agreements expected to be signed by the first half of the year.

"We are confident that we will secure customer contracts for 100% of the off-take capacity prior to making a final investment decision," commented Don Althoff. "Neither the change in the FERC schedule nor the current commodity price environment has impacted customer enthusiasm for the project. In fact, we are seeing increased demand in the project from potential customers given its advantageous location and attractive gas-linked tolling model."

EFG Update

Veresen will be filing an appeal of the decision issued on February 26, 2015 by an Ontario court relating to an application commenced by Energy Fundamentals Group Inc. ("EFG") for a declaration that, among other things, the option to acquire up to 20% of Veresen's equity interest in the Jordan Cove LNG terminal and related assets in Coos Bay, Oregon, granted to EFG pursuant to a 2005 letter agreement between the parties, continues to apply to our proposed Jordan Cove LNG export terminal. In its decision, the court declared that, among other things, the option continues to apply to the Jordan Cove LNG export project. Notice of the appeal must be served within a prescribed period of 30 days following the decision.

Corporate

Veresen is committed to maintaining a strong balance sheet that will support its existing businesses and growth initiatives. During 2014, Veresen enhanced its capital structure through a combination of equity and debt refinancing.

Veresen expects its liquidity, proceeds from its Premium Dividend™ and Dividend Reinvestment Program ("DRIP") (trademark of Canaccord Genuity Corp.), together with cash from operations and anticipated future access to capital markets, will be sufficient to finance its current capital projects and to provide flexibility for new investment opportunities.

2015 Guidance

Veresen affirms its 2015 distributable cash to be in the range of $0.93 per Common Share to $1.20. This range is consistent with guidance published in December 2014. The effect of lower fractionation margins expected to be realized by Aux Sable is largely offset by the effect of the weaker Canadian dollar. As previously disclosed, the Veresen Midstream transaction is expected to be cash flow neutral in 2015. Further details concerning 2015 guidance can be found in the "Invest" section of Veresen's web site at www.vereseninc.com.

New Independent Director Nominee

Mr. Thierry Vandal has been nominated to stand for election as a director of Veresen at the Company's Annual General Meeting on May 6, 2015, along with all of the incumbent directors. Mr. Vandal is currently President and CEO of Hydro-Quebec. He joined Hydro-Quebec in 1996 and served in various leadership capacities within the organization until his current appointment in 2005. Earlier this year, Mr. Vandal announced his decision to resign as President and CEO and a member of the Board of Directors of Hydro-Quebec, effective May 1, 2015.

"I am delighted that Thierry has been nominated to join our team of directors," said Stephen Mulherin, Veresen's Chairman of the Board. "Thierry's strong business acumen, expertise in executing large-scale capital projects, and extensive experience across the energy sector will contribute to the depth and expertise of our board, and be valuable as we continue to execute our strategy and growth plans."

Mr. Vandal holds an engineering degree from École polytechnique (Université de Montréal) and an MBA from HEC Montréal (Université de Montréal). In 2007, the Université de Montréal awarded him an honorary doctorate to underscore his outstanding professional contribution to the energy sector. Mr. Vandal is Chairman of the Board of the Société d'énergie de la Baie James and Hydro-Québec International, and Chairman of the Board of BioFuelNet Canada. He sits on the boards of HEC Montréal and McGill University, where he also serves as Chair of the Finance Committee. Mr. Vandal is a past Chairman of the Conference Board of Canada.

Adoption of Advance Notice Bylaw

Veresen's Board of Directors has adopted Bylaw No. 3 of Veresen ("Advance Notice Bylaw"), a bylaw establishing a framework for advance notice of nominations of directors by shareholders of Veresen.

The Advance Notice Bylaw is similar to the advance notice bylaws adopted by many other Canadian public companies. Specifically, it provides for advance notice of nominations of directors in circumstances where nominations of persons for election to the Board of Directors are made by shareholders. The Advance Notice Bylaw is intended to provide a transparent and fair process for nominating directors of Veresen in connection with any annual or special meeting of Shareholders.

For an annual meeting of shareholders (including a special meeting), notice to Veresen must be not less than 30 days prior to the date of the meeting. If the annual meeting is to be held on a date that is less than 50 days following public announcement of the date of the meeting, notice may be given not later than the close of business on the 10th day following the date of such public announcement.

For a special meeting of shareholders (which is not also an annual meeting), notice to Veresen must be given not later than the close of business on the 15th day following the day on which public announcement of the date of the special meeting was made.

Where notice and access is used for delivery of proxy related materials, whether for an annual or special meeting of shareholders, alternate notice period are required.

At the next meeting of shareholders, Veresen shareholders will be asked to confirm the Advance Notice Bylaw. If it is not confirmed at the annual shareholders' meeting by an ordinary resolution of the shareholders, it will terminate. A copy of the Advance Notice Bylaw can be found under Veresen's profile on SEDAR at www.sedar.com and is available at www.vereseninc.com.

Conference Call and Webcast

Veresen will host a conference call and webcast on March 13 at 8 am MT (10 am ET) to discuss its results.

Dial in: (877) 291-4570 / (647) 788-4919

Conference ID: 80565882

The link to the conference call webcast is available on Veresen's website on the homepage or by selecting "Invest" and then "Events & Presentations".

A replay of the call will be available at approximately 11:00 am MT (1:00 pm ET) on March 13, 2015 by dialing 1 (800) 585-8367and 1 (416) 621-4642. The access code is 80565882, followed by the pound sign. The replay will expire at midnight (ET) on March 27, 2015.

MD&A, Financial Statements and Notes

The Management's Discussion and Analysis ("MD&A") and consolidated financial statements provide a detailed explanation of Veresen's financial results for the fourth quarter and year ended December 31, 2014 compared to the fourth quarter and year ended December 31, 2013 and should be read in conjunction with this news release. These documents are available at www.vereseninc.com and at www.sedar.com.

About Veresen Inc.

Veresen is a publicly-traded dividend paying corporation based in Calgary, Alberta that owns and operates energy infrastructure assets across North America. Veresen is engaged in three principal businesses: a pipeline transportation business comprised of interests in the Alliance Pipeline, the Ruby Pipeline and the Alberta Ethane Gathering System; a midstream business which includes an ownership interest in Aux Sable, a world-class natural gas liquids (NGL) extraction facility near Chicago and other natural gas and NGL processing energy infrastructure, and a proposed partnership interest in Veresen Midstream Limited Partnership which will own midstream assets in western Canada; and a power business comprised of a portfolio of assets in Canada. Veresen is also developing Jordan Cove LNG, a six million tonne per annum natural gas liquefaction facility proposed to be constructed in Coos Bay, Oregon, and the Pacific Connector Gas Pipeline. In the normal course of business, Veresen regularly evaluates and pursues acquisition and development opportunities.

Veresen's Common Shares, Cumulative Redeemable Preferred Shares, Series A and Cumulative Redeemable Preferred Shares, Series C trade on the Toronto Stock Exchange under the symbols "VSN", "VSN.PR.A" and "VSN.PR.C", respectively. For further information, please visit www.vereseninc.com.

Forward-Looking Information

Certain information contained herein relating to, but not limited to, Veresen and its businesses constitutes forward-looking information under applicable securities laws. All statements, other than statements of historical fact, which address activities, events or developments that Veresen expects or anticipates may or will occur in the future, are forward-looking information. Forward-looking information typically contains statements with words such as "may", "estimate", "anticipate", "believe", "expect", "plan", "intend", "target", "project", "forecast" or similar words suggesting future outcomes or outlook. Forward-looking statements in this news release include, but are not limited to, statements with respect to: the ability of Alliance to implement, and the financial impact of,new service offerings; the timing of completion and the capital cost of the Aux Sable expansion; the timing of the commercial service of the Dasque-Middle hydro project and the St. Columban and Grand Valley Phase III Wind Project; the timing for regulatory approvals, an updated capital cost estimate and final investment decision for Jordan Cove LNG and Pacific Connector Gas Pipeline, Veresen's ability to negotiate long term service agreements with offtake customers for LNG, Veresen's ability to realize its growth objectives; the availability of financing for current capital projects and new investment opportunities; and the ability of each of its businesses to generate distributable cash in 2015.
The risks and uncertainties that may affect the operations, performance, development and results of Veresen's businesses include, but are not limited to, the following factors: the ability of Veresen to successfully implement its strategic initiatives and achieve expected benefits; levels of oil and gas exploration and development activity; the status, credit risk and continued existence of contracted customers; the availability and price of capital; the availability and price of energy commodities; the availability of construction services and materials; fluctuations in foreign exchange and interest rates; Veresen's ability to successfully obtain regulatory approvals; changes in tax, regulatory, environmental, and other laws and regulations; competitive factors in the pipeline, midstream and power industries; operational breakdowns, failures, or other disruptions; and the prevailing economic conditions in North America. Additional information on these and other risks, uncertainties and factors that could affect Veresen's operations or financial results are included in its filings with the securities commissions or similar authorities in each of the provinces of Canada, as may be updated from time to time. Readers are also cautioned that the foregoing list of factors and risks is not exhaustive. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these factors are independent and management's future course of action would depend on its assessment of all information at that time. Although Veresen believes that the expectations conveyed by the forward-looking information are reasonable based on information available on the date of preparation, no assurances can be given as to future results, levels of activity and achievements. Undue reliance should not be placed on the information contained herein, as actual result achieved will vary from the information provided herein and the variations may be material. Veresen makes no representation that actual results achieved will be the same in whole or in part as those set out in the forward-looking information. Furthermore, the forward-looking statements contained herein are made as of the date hereof, and Veresen does not undertake any obligation to update publicly or to revise any forward-looking information, whether as a result of new information, future events or otherwise. Any forward-looking information contained herein is expressly qualified by this cautionary statement.

Certain financial information contained in this news release may not be standard measures under Generally Accepted Accounting Principles ("GAAP") in the United States and may not be comparable to similar measures presented by other entities. These measures are considered to be important measures used by the investment community and should be used to supplement other performance measures prepared in accordance with GAAP in the United States. For further information on non-GAAP financial measures used by Veresen see Management's Discussion and Analysis, in particular, the section entitled "Non-GAAP Financial Measures" contained in the annual Management Discussion and Analysis, filed by Veresen with Canadian securities regulators.

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Reconciliation of Net Income to Adjusted Net Income Attributable to Common Shares

Net income attributable to Common Shares includes the following items which are non-operating in nature and/or unusual items and which we do not expect to recur: