Veresen : Announces Fourth Quarter & Year End Financial Results and Additional $95 Million of Capital Projects at Veresen Midstream

CALGARY, ALBERTA--(Marketwired - Feb 28, 2017) - Veresen Inc. ("Veresen") (TSX:VSN) today announced its fourth quarter and year-end operating and financial results.

"Veresen achieved solid financial and operating results in each quarter of 2016, which demonstrates our ability to provide near-term value for our shareholders while continuing to advance our long-term growth strategy," said Don Althoff, President and CEO of Veresen. "Distributable cash for the year was well ahead of our budget estimates, driven largely by strong performance at Alliance under its new service model. We continued to secure significant additional growth at Veresen Midstream, with over $1.1 billion of capital projects sanctioned over the last year, and have fully funded our future growth through the sale of the power business, which also increased our financial flexibility by strengthening our balance sheet."

Full Year 2016 and Fourth Quarter Financial and Operational Highlights

• Generated full year distributable cash of $356 million or $1.15 per Common Share, which is 14% higher than the initial 2016 guidance mid-point and represents a year over year increase of 8% on a per Common Share basis when compared to $310 million or $1.06 per Common Share in 2015
  
  
• Delivered distributable cash of $80 million or $0.25 per Common Share in the fourth quarter, which is in the top half of the guidance range
  
  
• Realized strong performance from Alliance throughout 2016 in the pipeline's first year under its new service model, with distributable cash in 2016 of $200 million approximately 20% higher than 2015, primarily driven by favourable market fundamentals and continued industry-leading reliability and availability, and significant cost reductions
  
  
• Invested a total of $1,150 million ($555 million net to Veresen) in growth capital within Veresen Midstream during the year, including $1,030 million ($485 million net) for the construction of the Sunrise, Tower and Saturn Phase II processing facilities
  
  

Update on Key Strategic Initiatives

• Executed on the enhanced funding strategy announced in August 2016 through a suite of agreements to sell the power generation business for $1.18 billion. Proceeds from the sale will fully fund the remaining equity component of the approximately $1.5 billion of projects currently under construction, with no need to access the capital markets, and also provide additional flexibility to fund incremental growth projects as they are sanctioned
  
  
• Advancing Sunrise, Tower and Saturn Phase II, with costs continuing to track below budget and construction remaining on schedule with over 55% of the total $2.5 billion in capital ($1.2 billion net to Veresen) incurred to date. Veresen continues to expect that Sunrise and Tower will be placed into service near the end of 2017, with Saturn Phase II in service by mid-2018
  
  
• Added approximately $95 million ($45 million net to Veresen) of incremental capital projects subsequent to the end of the year at Veresen Midstream to support development by Cutbank Ridge Partnership ("CRP") and Encana. Given the need for significant infrastructure investment to support the development expected by CRP, Encana and third-party Montney producers, the company anticipates Veresen Midstream will secure an additional $200 million to $400 million per year of incremental capital projects on a run-rate basis over the next several years
  
  

In 2016, Veresen generated adjusted net income attributable to Common Shares of $59 million or $0.19 per Common Share, driven by strong performance from Alliance in the pipeline's first year under the new service model and consistent contributions from Ruby and Veresen Midstream. This was partially offset by higher project development spend at Jordan Cove, resulting in 2016 adjusted net income attributable to Common Shares being effectively in-line with 2015.

During the fourth quarter, Veresen generated adjusted net income attributable to Common Shares of $13 million or $0.04 per Common Share with the modest increase relative to 2015 primarily as a result of a higher contribution from Alliance.

Full year 2016 net loss attributable to common shares was $20 million, or $0.06 per Common Share, which reflects $140 million of impairment charges (pre-tax) recognized in the fourth quarter. As a result of these charges, net loss for the fourth quarter was $55 million, or $0.17 per Common Share.

Veresen generated distributable cash of $356 million or $1.15 per Common Share in 2016, which compares to $310 million or $1.06 per Common Share in 2015, and is a result of incremental contributions from Alliance, primarily driven by favourable market fundamentals and continued industry-leading reliability and availability, and significant cost reductions.

Distributable cash for the fourth quarter was $80 million or $0.25 per Common Share, compared to $93 million or $0.31 per Common Share for the same period last year. The decrease was a result of higher maintenance capital expenditures at Aux Sable, as well as higher corporate costs during the fourth quarter relating to the upward revaluation of long-term incentive plans as a result of the increase in the share price during the quarter. The decrease was partially offset by lower cash taxes.

On a proportionate consolidation basis, Veresen's EBITDA in 2016 was $669 million, including $163 million generated in the fourth quarter. During the year, the company repaid $138 million of amortizing principal with nearly half the amount being at Alliance. Maintenance capital across the business was $20 million in 2016, with the expectation that maintenance capital requirements will remain fairly modest over the next few years as these costs are flow-through in several parts of the business and most of Veresen's infrastructure is relatively new.

Growth capital on a proportionate consolidation basis was $671 million for the year, which represents the highest level of capital investment in organic projects in the company's history. While most of this spending was at Veresen Midstream, with $555 million incurred, the company also advanced the Burstall Ethane Storage Facility through $80 million of investment and completed the fractionation expansion at Aux Sable during the year.

Pipeline

Alliance

Throughput volumes on Alliance were strong in the pipeline's first year under the new service model. Total deliveries into Channahon of 1.671 bcf/d during the year were slightly higher than the 1.645 bcf/d delivered in 2015, when Alliance operated under a cost of service model for the first 11 months.

Importantly, Canadian average daily throughput in 2016 was about 4% higher than in 2015. Since Canadian volumes are transported through several segments of the pipeline, Alliance collects higher per unit tolls on Canadian deliveries into Channahon than from U.S. Bakken deliveries. This strong producer demand throughout 2016 for Seasonal Firm, PITS and IT service was driven largely by a wide AECO - Chicago gas price basis differential, and augmented by Alliance's high rates of availability which allowed it to provide transportation services when there were outages and curtailments on alternative egress options out of western Canada. Demand was also driven by Alliance's unique capability to transport liquids out of the basin.

In the fourth quarter of 2016, throughput volumes were 1.547 bcf/d, including the impact of a planned eight day shut-down to perform certain pipe replacement work to accommodate the construction of a highway near Regina, Saskatchewan. Volumes in the fourth quarter were also impacted by producers ramping down production ahead of the shut-down and subsequently ramping up once service resumed.

Distributable cash from Alliance in 2016 was $200 million, an increase of approximately 20% over the $169 million for the full year 2015. A major driver of this increase was the significant cost reductions that were implemented as part of the transition from the prior cost of service structure to the current service model.

Firm transportation rates under the new service model were lower than they were under the cost of service model, although this was offset by the ability to generate revenues from seasonal and interruptible services that benefitted from an increase in availability and throughput capability as a result of operational improvements realized through the year. Distributable cash also benefitted from a lower scheduled rate of debt amortization as a result of significant deleveraging during Alliance's first 15 years of operations.

In the fourth quarter of 2016, distributable cash from Alliance was $47 million, including the reimbursement for the costs incurred and revenues forgone as a result of the planned shut-down. Distributable cash in the fourth quarter of 2016 was in-line with the final quarter of 2015, but below the $61 million distributed in the third quarter of 2016, which included the benefit of a release of an additional $8 million previously held in trust.

Veresen believes that opportunities exist to realize further cost reductions and operational efficiencies at Alliance, with market dynamics continuing to underpin strong throughput volumes over the near- and medium-term. In response to both producer interest and the desire for longer-term cash flow visibility, Alliance has begun discussions with shippers to extend the term of existing contracts. While this process is at a preliminary stage, successful re-contracting would be an important step towards reevaluating the optimal capital structure at Alliance and for consideration of a potential expansion of the pipeline's capacity.

Ruby

Volumes on Ruby were impacted throughout the year by low western Canadian natural gas pricing and a weak Canadian dollar, which improved AECO's competitiveness into Malin Hub relative to sourcing from Opal Hub. Volumes in the fourth quarter were also affected by the absence of a seasonal increase in demand at Malin Hub typically realized towards the end of the year. As a result, volumes in the fourth quarter of 0.609 bcf/d were about 60% of throughput volumes in the fourth quarter of 2015. Full year volumes in 2016 averaged approximately 80% of 2015 volumes.

Veresen holds a perpetual, cumulative preferred interest in Ruby, which can only be converted into a common interest at Veresen's election or if additional firm volumes are contracted at terms similar to those held by existing shippers, which would effectively fill the pipeline and, upon conversion to a common equity interest, hold Veresen's distribution whole relative to the current preferred amount.

Veresen's preferred distribution from Ruby provides the company with US$91 million per year, with variance in Veresen's distributable cash only as a result of fluctuating foreign exchange rates. The company remains confident that Ruby can continue to support its preferred distribution to Veresen. Investment grade shippers on Ruby represent sufficient volumes to meet Veresen's preferred distribution, with the first tranche of contracts running through mid-2021.

In the fourth quarter, Veresen recorded a $103 million non-cash impairment charge on its interest in Ruby. The impairment charge does not impact cash flow from Veresen's preferred interest, and the company believes that Ruby holds significant long-term value. Veresen continues to expect that the accelerated pace of amortization of debt, in addition to increasing natural gas demand in the Western US, Mexico and US Gulf Coast will help drive future volumes on Ruby and continue to support the preferred distribution.

Veresen is working with its common equity partner to explore opportunities to improve Ruby's competitiveness, including the refinancing of the upcoming US$250 million (100%) note maturity. The company currently expects that the maturing note will be replaced with new debt.

AEGS

Both volumes and distributable cash from AEGS remain very stable. AEGS is a critical part of the infrastructure supporting the petrochemical industry in Alberta, with distributable cash underpinned by long- term take-or-pay contracts. The existing agreements have been in place since 1998 and expire at the end of 2018. Veresen views the re-contracting as an opportunity given the existing contracts do not have a cost escalator provision, and most comparable pipelines generally have higher tolls than AEGS does today.

Midstream

Veresen Midstream

Operational performance at Veresen Midstream was very strong throughout 2016, with Veresen-managed facilities running at nearly 100% plant reliability. Volumes at Hythe / Steeprock represented aggregate utilization of approximately 90%, which was in-line with expectations under the existing take-or-pay contract, and included some volumes from third party producers. Volumes at Dawson were consistent throughout 2016, which was in-line with expectations as additional infrastructure currently under construction is required to facilitate increases in throughput.

One of the major operational milestones at Veresen Midstream in 2016 was the commissioning of the 50 mmcf/d refrigeration expansion of the Hythe gas processing facility that was placed into service in June ahead of schedule and well below budget. The refrigeration expansion is significant as it represents the first brownfield expansion to be designed, constructed and placed into service by Veresen Midstream. Throughout the second half of the year, the refrigeration expansion operated at full capacity.

Veresen Midstream provided Veresen with approximately $62 million of distributable cash in 2016, including $15 million in the fourth quarter. Distributions from Veresen Midstream are fixed, with variability coming only as a result of fluctuations in Veresen's working interest in the partnership. Veresen's share of EBITDA for the quarter of $19 million was effectively in-line with the other quarters in 2016, with full year EBITDA of $72 million. EBITDA from Dawson will to continue to grow as additional gathering lines, compression, liquids handling and gas plants are brought into service, while operating costs continue to be consistent with expectations.

Sanctioned Capital

Over the course of 2016, CRP and Encana sanctioned approximately $1.1 billion (approximately $540 million net to Veresen) of capital projects. In March 2016, CRP sanctioned the $930 million (approximately $440 million net to Veresen) Saturn Phase II processing facility, the third major facility now under construction as part of the Veresen Midstream infrastructure development with CRP. Saturn Phase II is an expansion to the previously constructed Saturn compressor station and will add 200 MMcf/d of additional compression, 400 MMcf/d of processing, and significant inlet liquids and NGL handling facilities.

In December 2016, CRP sanctioned $195 million (approximately $90 million net to Veresen) of investment to construct the South Central Liquids Hub to allow the existing gathering system in the area to handle development anticipated over the next several years, and the Tower Liquids Hub to provide a lower overall cost and a more commercially flexible solution for the handling and storage of NGLs produced at the Sunrise, Tower and Saturn Phase II processing facilities.

During the year, CRP and Encana also sanctioned two incremental capital projects for a total of $22 million (approximately $10 million net to Veresen) as a result of the need for increased liquids-rich gas processing capacity.

Subsequent to the end of the year, an additional $95 million ($45 million net to Veresen) of incremental capital projects to support development by Cutbank Ridge Partnership ("CRP") and Encana have materialized. To provide greater capacity at the existing Hythe processing facility for the significant increase in regional liquids production, Encana has sanctioned the Hythe Liquids Phase II project for $62 million ($29 million net to Veresen). The Hythe Liquids Phase II project is expected to be in service by the end of 2017 and is governed by a take-or-pay agreement. CRP also requires upgrades at two existing compressor stations for an aggregate $33 million ($16 million net to Veresen) that are expected to be sanctioned imminently and in service by the end of 2018. The projects with the CRP are governed by the Dawson Midstream Service Agreement, which is in place for the next 28 years.

There continues to be a need for significant additional investment in pipelines, natural gas processing and liquids handling facilities to support the development expected by CRP, Encana and third-party Montney producers surrounding Veresen Midstream's existing infrastructure. In addition to the opportunity of bringing third party volumes into Veresen Midstream's facilities currently under construction at Dawson, Veresen expects growth in the region will translate into an additional $200 million to $400 million per year of incremental capital projects for Veresen Midstream over the next several years.

Investment and Construction Progress Update

In 2016, a total of $1,150 million ($555 million net to Veresen) in capital was invested by Veresen Midstream, including $325 million ($155 million net to Veresen) in the fourth quarter. Capital expenditures for the Sunrise, Tower and Saturn Phase II processing facilities amounted to $1,030 million ($485 million net to Veresen) in 2016, with $270 million ($127 million net to Veresen) in the fourth quarter.

Construction of the three processing facilities continues to track below budget and on schedule, with more than 55% of capital incurred to date. The company expects the combined cost of the processing facilities currently under construction to be approximately $2.5 billion (approximately $1.2 billion net to Veresen), with the Sunrise and Tower plants expected to be in-service by the end of 2017 and the Saturn Phase II plant in-service by mid-2018.

When all three of these facilities are operational, Veresen Midstream will have 1.5 bcf/d of processing capacity in operation and will be a dominant player in the core of the Montney, one of North America's most prolific and competitive resource plays. Once commissioned, these facilities are expected to generate incremental run-rate EBITDA of between $250 million to $300 million (approximately $120 million to $140 million net to Veresen), based on target volumes.

Since Veresen Midstream was formed in early 2015, a total of $3.6 billion (approximately $1.7 billion net to Veresen) in capital projects has been sanctioned under the agreement with CRP and Encana to fund up to $5 billion of new infrastructure. At the end of 2016, approximately $680 million of these capital projects were in service.

Aux Sable

Distributable cash from Aux Sable of $5 million in 2016 was a decrease from $11 million in 2015 and continued to reflect NGL margins remaining near cyclical lows. While frac margins improved towards the end of 2016, weak ethane margins during the second and third quarters led to the periodic rejection of ethane at the Channahon Facility.

While frac margins strengthened in the fourth quarter of 2016, distributable cash of $5 million reflects Aux Sable's NGL Sales Agreement with BP that provided downside protection during the first three quarters of 2016, but allowed for BP to recover a portion of its losses in the fourth quarter. For Aux Sable's profitability in 2017 to more fulsomely reflect the recent NGL recovery, current margins will need to be sustained throughout the year.

During the third quarter of 2016, Aux Sable commissioned the US$55 million Fractionation Expansion at the Channahon Facility with commercial deliveries beginning in mid-September. The expansion adds 24,500 bbl/d of primarily propane plus liquids handling capacity, and allows for increased liquids to flow on the Alliance pipeline. In the fourth quarter, in the context of sustained weakness in ethane margins, the construction of an Amine Unit that had been on hold was permanently suspended, resulting in a $37 million non-cash impairment.

Burstall Ethane Storage Facility

Veresen continues to advance the construction of a one million barrel ethane storage facility located near Burstall, Saskatchewan, underpinned by a 20-year contract with NOVA Chemicals. The total cost of construction is expected to be approximately $140 million, with $26 million spent during the fourth quarter and a total of $80 million invested in 2016. Veresen has incurred approximately 65% of the cost of construction to date and anticipates spending $20 million to $30 million in 2017 to advance the project. Veresen expects that the construction of Burstall will be completed in late 2018.

Jordan Cove LNG Project and Pacific Connector

Following the Federal Energy Regulatory Commission ("FERC") decision to deny the request for rehearing on December 9, 2016, the Board and Management has undertaken a thorough review of the Jordan Cove LNG project, including engagement with the FERC to gain greater visibility into a re-filing process, discussions with existing and potential buyers as well as an evaluation of alternatives for the project to create the most value on a risk adjusted basis to Veresen.

Veresen will continue to pursue the Jordan Cove LNG project on the basis of the constructive nature of discussions with both existing and potential buyers following the denial. The project development budget for 2017 will remain at US$30 million, with the expectation that the Jordan Cove LNG project will finalize agreements with existing buyers and secure additional off-takers. This would position the project for a potential final investment decision in 2019 with an in-service date in 2024.

2017 Guidance Reaffirmed

Veresen has reaffirmed its 2017 distributable cash to be in the range of $1.00 per Common Share to $1.14 per Common Share as expected performance of the respective businesses has not changed. Further details concerning 2017 guidance can be found on the home page of Veresen's web site at www.vereseninc.com.

Balance Sheet and Funding Strategy

On August 3, 2016, Veresen announced its intention to sell its power generation business. On February 21, 2017, the company announced three seperate agreements to sell the power generation business for total proceeds of $1.18 billion, including the assumption of $402 million of project level debt by purchasers. The transactions are expected to close in the second quarter of 2017. Proceeds of the sale will be initially directed to reduce debt outstanding and subsequently used to fully fund the remaining equity component of the approximately $1.5 billion of projects currently under construction with no need to access the capital markets. Additionally, the divestitures strengthen Veresen's balance sheet, further underpinning the dividend and providing additional flexibility to fund the incremental growth projects the company expects to sanction over the next 12 to 18 months.

At the end of 2016, approximately $805 million of the aggregate cost of the $1.5 billion of capital projects had been incurred, with a remaining equity component of approximately $325 to $375 million to be funded over the next 18 months based on target leverage of 55% to 60% debt in capital investments. The remaining debt has been fully secured within Veresen Midstream, with sufficient capacity on the corporate facility to complete development at Burstall.

As at December 31, 2016, Veresen's $750 million revolving credit facility had approximately $665 million of available, undrawn capacity and is in place until May 31, 2020. The company expects that proceeds of the power divestiture will be more than sufficient to fully repay outstanding balances on the revolving credit facility, providing ample liquidity to fund equity contributions into Veresen Midstream and the construction of Burstall.

In November 2016, the company proactively funded the March 14, 2017 maturity of $300 million of medium term notes through the issuance of $350 million in 5-year medium term notes. Veresen expects to refinance its 2018 and 2019 medium term note maturities as they come due, with the available capacity on Veresen's revolving credit facility providing additional flexibility.

Proportionate Consolidation of Debt - Amortization Schedule⁽¹⁾

The company's debt on a proportionate consolidation basis as at December 31, 2016 was $3.8 billion or approximately 5.7x proportionately consolidated EBITDA on a trailing 12 month basis of $669 million. Pro forma the reduction of debt from the sale of the power business of $1.18 billion and less associated 2016 EBITDA of $92 million, proportionately consolidated debt would have been approximately 4.6x trailing twelve month EBITDA.

Veresen expects that debt to EBITDA will be in the range of approximately 4.0x - 4.5x once the projects under construction are on-line. The company also believes it is prudent to consider distributable cash after the amortization of debt within each of the business, even where significant value will remain in the assets after the debt is fully amortized. Veresen is committed to maintaining strong investment grade credit ratings.

Conference Call & Webcast Details

A conference call and webcast presentation will be held to discuss the fourth quarter and year-end 2016 financial and operating results at 8:00am Mountain Time (10:00am Eastern Time) on Wednesday, March 1, 2017.

To listen to the conference call, please dial 478-219-0009 or 1-844-285-7148 (toll-free) and enter Conference ID 60756314. This call will also be broadcast live on the Internet and may be accessed directly at the following URL:

http://edge.media-server.com/m/p/be3rksjo

A presentation will accompany the conference call and will be available via the webcast. Alternatively, the presentation will be made available immediately prior to the conference call start time of 8:00am Mountain Time on Veresen's website at: http://www.vereseninc.com/invest/events-presentations.

The webcast will remain accessible for a 12 month period at the following URL: http://edge.media- server.com/m/p/be3rksjo. Additionally, a digital recording will be available for replay two hours after the call's completion, and will remain available until 11:00am Mountain Time (1:00pm Eastern Time) on March 3, 2017. To listen to the replay, please dial 404-537-3406 or 1-855-859-2026 (toll-free) and enter Conference ID 60756314. A digital recording will also be available for replay on the company's website.

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 a partnership interest in Veresen Midstream Limited Partnership which owns assets in western Canada, and an ownership interest in Aux Sable, which owns a world-class natural gas liquids (NGL) extraction facility near Chicago, and other natural gas and NGL processing energy infrastructure; and a power business comprised of a portfolio of assets in Canada. Veresen is also developing Jordan Cove LNG, a 7.8 million tonne per annum natural gas liquefaction facility proposed to be constructed in Coos Bay, Oregon, and the associated 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, Cumulative Redeemable Preferred Shares, Series C, and Cumulative Redeemable Preferred Shares, Series E trade on the Toronto Stock Exchange under the symbols "VSN", "VSN.PR.A", "VSN.PR.C" and "VSN.PR.E", 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 and the offering of the notes, 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 use of proceeds from, financial impact on Veresen and its ability to fund growth projects, and timing of completion of, the sale of Veresen's power business; in service dates of, cost of construction of, and amount of EBITDA to be generated by, the Sunrise and Tower gas plants, and the Saturn Phase II processing facility; the potential for Veresen Midstream to secure incremental capital projects; expectations for maintenance capital expenditures at Alliance; the ability to realize further cost reductions and operational efficiencies at Alliance; the potential for re-contracting of Alliance; the ability of Ruby to support Veresen's preferred distribution; the ability to refinance maturing debt at Ruby; the ability to recontract AEGS; the ability of the South Central Liquids Hub to handle development in the future; the in service date of the Hythe Liquids Phase II project; the timing of the sanctioning, and the cost and in-service dates, of upgrades to existing compressor stations in the Dawson area; propsects for NGL price recovery at Aux Sable; the in service date and cost of construction of the Burstall ethane storage facility; the timing and ability to finalize agreements with existing buyers and to secure additional off-takers for Jordan Cove LNG; the timing of an investment decision and in-service date of Jordan Cove LNG; the amount of distributable cash to be generated by Veresen in 2017; the sources of equity and debt financing required to fund the capital of Veresen and Veresen Midstream; Veresen's ability to refinance medium term notes as they mature; and debt to EBITDA levels once projects under construction are on-line . Readers are also cautioned that such additional information 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 results 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, except as required by applicable laws. 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. US GAAP requires us to equity account for our investments in jointly-controlled businesses. However, we have chosen to provide some information on our jointly-controlled businesses on a proportionate basis to assist the reader. For further information on other 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.