Veresen Announces 2012 First Quarter Results and Updated 2012 Guidance

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

CALGARY, May 1, 2012 /CNW/ - Veresen Inc. ("Veresen" or the "Company") (TSX: VSN) announced today its financial and operating results for the three months ended March 31, 2012.

Highlights for the first quarter of 2012 include:

• Net income attributable to Common Shares of $8.3 million or $0.05 per Common Share.
• Distributable cash of $41.6 million or $0.23 per Common Share.
• Cash from operating activities of $29.4 million.
• On February 9, 2012, Veresen closed the $906 million acquisition of the Hythe/Steeprock gas gathering and processing complex and completed the financing plan in March 2012 through a combination of preferred shares and term debt issuances.
• During the first quarter, construction of the 400 MW York Energy Centre was substantially completed; the 20 MW Grand Valley I and II wind project was completed ahead of schedule, on budget and commenced operations.
• Maureen Howe was nominated to stand for election as a director at the Company's Annual General Meeting to be held later today.

"Veresen had a very active first quarter and 2012 promises to be a very exciting year for us with a number of strategic projects in the commissioning stage, in construction or under development," commented Stephen White, President and Chief Executive Officer. "I'm particularly pleased that our financing plan related to the acquisition of the Hythe/Steeprock complex is now complete as a result of our successful financing activities in the first quarter of 2012."

FINANCIAL HIGHLIGHTS			Three months ended March 31
($ Millions, except per Common Share amounts)			2012	2011
Net income (loss) before tax and        non-controlling interest
Pipeline			22.2	23.1
Midstream			12.8	8.3
Power			0.8	(0.6)
Veresen - Corporate			(22.0)	(15.2)
			13.8	15.6
Tax expense			(5.4)	(5.0)
Net income attributable to non-controlling interest			(0.1)	(0.1)
Net income attributable to Common Shares			8.3	10.5
Per Common Share ($)			0.05	0.07

For the first quarter of 2012, Veresen generated net income attributable to Common Shares of $8.3 million or $0.05 per Common Share compared to $10.5 million or $0.07 per Common Share, respectively, for the same period last year. The decrease in net income primarily reflects corporate and interest costs incurred to establish the Company's new independent midstream business.

Pipeline

For Alliance, equity income for the first quarter of 2012 was $20.8 million compared to $21.7 million for the same period last year. As expected, the decrease results from lower returns as a result of a declining investment base and lower income tax recoveries.

AEGS generated $6.0 million in earnings before interest, taxes, depreciation and amortization ("EBITDA") and $1.4 million in net income before tax for the first quarter of 2012. Results were comparable with the same period last year.

Midstream

Veresen's focus on growing the fixed fee activities of its Midstream business has resulted in recent asset acquisitions which made substantial contributions to the Company's first quarter 2012 net income.  On February 9, 2012, Veresen acquired the Hythe/Steeprock gas gathering and processing complex, and on July 1, 2011, Aux Sable acquired the Palermo Conditioning Plant ("Palermo") and Prairie Rose Pipeline ("Prairie Rose"). These new midstream assets derive the majority of their earnings from take or pay arrangements with minimal volume or commodity risk. The establishment of Veresen's fixed fee Midstream business has helped to mitigate volatility in the Company's earnings due to Aux Sable's margin-based activities.

For the period February 9, 2012 to March 31, 2012, the Hythe/Steeprock complex generated $9.5 million in EBITDA and $5.1 million in net income before taxes, and corporate financing costs.

Aux Sable's first quarter equity income was $7.7 million, a slight decrease compared to the same period last year. Operating margins from Aux Sable's fixed fee activities increased by $4.8 million, which offset a $2.6 million decrease from Aux Sable's margin-based activities, driven by lower ethane margins realized in the Conway market, and reduced propane sales resulting from unseasonably warm weather. Aux Sable's equity income was further reduced by higher administrative costs and depreciation associated with its new assets.

For the first quarter of 2012, Aux Sable generated $17.6 million of margin-based lease revenues, of which $5.5 million was recognized in EBITDA as part of Aux Sable's margin-based activities. Veresen anticipates recognizing the remaining $12.1 million later this year when its realization is more certain. In comparison, Aux Sable generated $21.6 million of margin-based lease revenues in the first quarter of 2011, of which $10.1 million was recognized that quarter and $11.5 million was deferred and recognized later in 2011.

Power

First quarter 2012 EBITDA from Veresen's Power business, as determined on a proportionately consolidated basis, was $8.0 million, a $0.4 million decrease compared to the same period last year. First quarter EBITDA from operating facilities approximated amounts generated during the same period last year.

Net income before tax and non-controlling interest was $0.8 million for the first quarter of 2012, compared to a net loss of $0.6 million for the same period last year. The increase primarily results from a higher fair value gain recorded this quarter relative to the York Energy interest rate hedges.

Corporate

For the three months ended March 31, 2012, corporate net expenses before taxes were $6.8 million higher than the same period last year. The increase reflects higher corporate administrative and interest costs, associated with building an independent midstream business underpinned by the Hythe/Steeprock acquisition, and higher project development spending related to the Company's Jordan Cove LNG export project.

Distributable Cash
			Three months ended March 31
($ Millions, except per Common Share amounts)			2012	2011
Pipeline			36.6	39.8
Midstream			22.6	8.2
Power			2.5	4.7
Veresen - Corporate			(16.2)	(12.4)
Taxes			(2.8)	(3.6)
Preferred share dividends			(1.1)	-
Distributable Cash ^(1)			41.6	36.7
Per Common Share ($)			0.23	0.23

(1) See the reconciliation of distributable cash to cash from operating activities in the the tables attached to this news release.

For the first quarter of 2012, Veresen generated distributable cash of $41.6 million compared to $36.7 million for the same period last year. The increase reflects a $9.5 million contribution from the Hythe/Steeprock complex and a $4.9 million increase in distributions from Aux Sable, primarily from the fixed fee activities of Palermo and Prairie Rose. These increases were partially offset by higher corporate costs, mainly administrative and interest costs associated with Veresen's midstream growth initiatives, and lower Power distributable cash due to reduced water flows at the Company's British Columbia run-of-river facilities and lower realized power prices in the Eastern markets.  Distributable cash from Veresen's pipeline business decreased relative to the same period last year, as first quarter 2011 distributions from Alliance U.S. included an additional amount resulting from a realignment of its capital position, which occurs from time to time.

On a per Common Share basis, distributable cash was unchanged at $0.23, as a result of Common Shares issued over the past 12 months through the Company's Premium Dividend ^TM and Dividend Reinvestment Program (trademark of Canaccord Genuity Corp.) and the conversion of 14.7 million subscription receipts to Common Shares in February 2012, upon Veresen's acquisition of the Hythe/Steeprock complex.

For the first quarter of 2012, Veresen generated $29.4 million of cash from operating activities compared to $33.6 million for the same period last year. The decrease reflects lower distributions received from Alliance, a net decrease in non-cash working capital relating to Hythe/Steeprock and higher Corporate administrative and interest costs, partially offset by higher distributions received from Aux Sable.

OPERATING RESULTS

Pipeline

Alliance continues to focus its efforts on the contracting of the pipeline system and is in active discussions with shippers to develop a multi-service business model. While the current low natural gas price environment is very challenging, the Alliance Pipeline is a unique asset, and it is very well-positioned to compete for the liquids barrel and offer shippers competitive transportation value, given its geographic proximity to key markets and to the liquids rich shale formations in the Montney and Bakken.

Alliance's transportation deliveries for the first quarter of 2012 averaged 1.632 bcf/d compared to 1.677 bcf/d for the same period last year. The Authorized Overrun Service volumes shipped on the Alliance pipeline were lower due to routine maintenance work. The lower volumes have not impacted firm transportation service or earnings.

AEGS toll volumes for the first quarter of 2012 were 294.0 thousand barrels per day, which approximated toll volumes for the same period last year.

Midstream

During the period February 9, 2012 to March 31, 2012, fee volumes at the Hythe/Steeprock complex averaged 374.0 mmcf/d, which is the minimum volume commitment under the Midstream Services Agreement.

For the three months ended March 31, 2012, Aux Sable processed 99.5% of the natural gas delivered by Alliance, down marginally from the same period last year.

Aux Sable assumed operations of Palermo and Prairie Rose on July 1, 2011. Receipts into Prairie Rose averaged 67 mmcf/d during the first quarter of 2012, consistent with expectations. The average heat content of the natural gas delivered to the Alliance interconnection at Bantry, North Dakota for the quarter was approximately 1310 btu/ft³, indicative of the high heat content of the liquids-rich natural gas stream being delivered out of the Bakken. In comparison, the average heat content of western Canadian natural gas delivered on the Alliance system is approximately 1080 btu/ft³.

Aux Sable sold 81.7 mbbls/d of NGLs during the first quarter of 2012 compared to 83.2 mbbls/d for the same period last year. Average ethane volumes increased to 49.5 mbbls/d from 48.6 mbbls/d. Propane plus volumes were 32.2 mbbls/d compared to 34.6 mbbls/d. The decrease in propane plus volumes is primarily due to reduced demand as a result of unseasonably warm weather. As at March 31, 2012, Aux Sable hedged the pricing of certain propane plus volumes by entering into forward sales contracts which will settle in the fourth quarter of 2012.

Power

During the first quarter of 2012, Veresen's gas-fired, district energy systems and waste heat facilities performed in line with expectations. First quarter 2012 output from the Clowhom run-of-river facilities in British Columbia was lower than expected due to a significant build up of winter snow pack.

The first two phases of Veresen's Grand Valley wind farm, located in Ontario, commenced operations on March 23, 2012, slightly ahead of schedule, and produced 1,393 Mwh of electricity from March 23 to March 31, 2012.

Construction of the York Energy Centre, a 400-MW gas-fired generation facility in Ontario in which Veresen holds a 50% ownership interest, was substantially completed in April 2012 and final commissioning activities are underway. Veresen expects commercial operations to commence in May 2012.

Business Development

Aux Sable is focused on a number of initiatives to enhance its competitive position and deliver liquids rich gas into the Alliance pipeline for recovery at the Channahon Facility. In the Bakken region of North Dakota, Aux Sable is actively pursuing additional volumes of rich gas and infrastructure positions. At the Channahon Facility, Aux Sable has also expanded its rail off-load capacity for shale-based unfractionated NGLs.

Veresen continues to advance its portfolio of power projects which are primarily focused on hydro and wind renewable power generation. Construction of the Dasque-Middle run-of-river project is underway and Culliton Creek is in the permitting process. Veresen's St. Columban I and II and Grand Valley III wind projects, which have existing Ontario FIT contracts, are in the approval process and construction is expected to commence in late 2012 and 2013, respectively.

Veresen continues to evaluate options for exporting liquefied natural gas ("LNG") from Coos Bay, Oregon, through the development of the Jordan Cove Project. At the end of February 2012, Jordan Cove initiated the filing required for the Federal Energy Regulatory Commission ("FERC") to commence proceedings for an LNG export terminal at Coos Bay. Likewise, the Pacific Connector Gas Pipeline will also initiate a new regulatory docket to allow it to be classified as the related export pipeline. This filing is expected to occur mid-2012. These actions were initiated since the FERC withdrew the previous import certifications. Veresen's business development team continues to work with a number of potential strategic partners to assess the commercial viability of securing a long-term arrangement to process and transport LNG to end users in Asia.

Updated 2012 Guidance

Today, Veresen updated its guidance for 2012 distributable cash to be in the range of $1.05 to $1.35 per Common Share, with a midpoint of $1.20 per Common Share, down from previous guidance of $1.10 to $1.45 per Common Share, issued February 29, 2012. The updated range primarily reflects a reduced forecast for ethane margins due to continued ethane oversupply in the United States midcontinent. Further details concerning 2012 guidance can be found in the "Investor Information" section of Veresen's web site - www.vereseninc.com.

Conference Call and Webcast

A conference call and webcast to discuss the results will be held on May 2, 2012 at 2 pm MT (4 pm ET).

Dial-in: 1 [phone] or 1 [phone]
Conference ID: 68333494

The link to the conference call webcast is available on Veresen's website under Investor Information, Presentations and Webcasts.

A replay of the call will be available from 5 pm MT (7 pm ET) on May 2, 2012 by dialing 1-855-859-2056 and 1-416-849-0833. The passcode is 68333494, followed by the pound sign. The replay will expire at midnight (ET) on May 9, 2012. The webcast will be archived for one year.

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 two pipeline systems, the Alliance Pipeline and the Alberta Ethane Gathering System; a midstream business which includes ownership interests in a world-class natural gas liquids extraction facility near Chicago, the Hythe/Steeprock complex, and other natural gas and NGL processing energy infrastructure; and a power business with renewable and gas-fired facilities and development projects in Canada and the United States, and district energy systems in Ontario and Prince Edward Island. Veresen and each of its pipeline, midstream and power businesses are also actively developing a number of greenfield projects.  In the normal course of its business, Veresen and each of its businesses regularly evaluate and pursue acquisition and development opportunities.

Veresen's common shares, Series A Preferred Shares and 5.75% convertible unsecured subordinated debentures, Series C due July 31, 2017 are listed on the Toronto Stock Exchange under the symbols "VSN", "VSN.PR.A" and VSN.DB.C", respectively. For further information, please visit www.vereseninc.com.

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 successfully implement new services; the ability of Aux Sable to recognize margin-based lease revenues during the balance of 2012; the timing of commencement of commercial operations of the York Energy Centre, the timing to complete construction of the Dasque-Middle project; the Company's ability to realize its growth objectives; and the ability of each of its businesses to generate distributable cash in 2012.  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: Veresen's ability to successfully assume and integrate the operations of the Hytle/Steeprock complex; 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.

Veresen Inc.
Consolidated Statement of Financial Position
(Canadian $ Millions; unaudited)	March 31, 2012	December 31, 2011
Assets
Current assets
Cash and short-term investments	70.8	21.9
Restricted cash	7.1	354.6
Distributions receivable	34.3	43.4
Receivables	39.1	32.3
Due from jointly-controlled businesses	1.4	25.5
Deposit	-	50.0
Other	13.4	25.5
	166.1	553.2
Investments in jointly-controlled businesses	934.2	934.1
Rate-regulated asset	83.6	85.8
Pipeline, plant and other capital assets	1,343.8	768.7
Intangible assets	524.6	197.3
Due from jointly-controlled businesses	49.2	3.6
Other assets	17.2	15.4
	3,118.7	2,558.1
Liabilities
Current liabilities
Payables and accrued payables	46.8	62.2
Subscription receipts payable	-	348.6
Current portion of long-term senior debt	11.2	11.2
	58.0	422.0
Long-term senior debt	1,183.3	754.4
Subordinated convertible debentures	86.2	86.2
Deferred taxes	314.6	321.7
Other long-term liabilities	38.2	35.0
	1,680.3	1,619.3
Shareholders' Equity
Share capital
Preferred shares	195.3	-
Common shares	1,763.2	1,391.0
Additional paid-in capital	4.3	-
Cumulative other comprehensive loss	(162.0)	(159.2)
Accumulated deficit	(362.5)	(324.7)
	1,438.3	907.1
Non-controlling interest	0.1	31.7
	1,438.4	938.8
	3,118.7	2,558.1

 

Veresen Inc.
Consolidated Statement of Income
	Three months ended March 31
(Canadian $ Millions, except per Common Share amounts; unaudited)	2012	2011
Equity income	33.6	33.5
Operating revenues	55.0	41.0
Operations and maintenance	(26.3)	(21.9)
General, administrative and project development	(18.5)	(12.9)
Depreciation and amortization	(16.5)	(12.1)
Interest and other finance	(13.0)	(10.7)
Foreign exchange and other	(0.5)	(1.3)
Net income before taxes and non-controlling interest	13.8	15.6
Current taxes	(2.8)	(3.6)
Deferred taxes	(2.6)	(1.4)
Net income before non-controlling interest	8.4	10.6
Non-controlling interest	(0.1)	(0.1)
Net income attributable to Common Shares	8.3	10.5
Net income per Common Share
Basic and diluted	0.05	0.07

 

Consolidated Statement of Comprehensive Income
	Three months ended March 31
(Canadian $ Millions; unaudited)	2012	2011
Net income before non-controlling interest	8.4	10.6
Other comprehensive loss
Cumulative translation adjustment
Unrealized foreign exchange loss on translation	(2.8)	(5.5)
Cumulative translation adjustment reclassified to net income	-	0.8
Other comprehensive loss	(2.8)	(4.7)
Comprehensive income including non-controlling interest	5.6	5.9
Less comprehensive income attributable to non-controlling interest	(0.1)	(0.1)
Comprehensive income	5.5	5.8

 

Veresen Inc.
Consolidated Statement of Cash Flows
	Three months ended March 31
(Canadian $ Millions; unaudited)	2012	2011
Operating
Net income before non-controlling interest	8.4	10.6
Equity income	(33.6)	(33.5)
Distributions from jointly-controlled businesses	54.7	47.3
Depreciation and amortization	16.5	12.1
Unrealized foreign exchange (gain) loss and other non-cash items	(2.5)	3.4
Deferred taxes	2.6	1.4
Changes in non-cash working capital	(16.7)	(7.7)
	29.4	33.6
Investing
Acquisitions, net of cash acquired	(881.2)	(93.9)
Investment in jointly-controlled businesses	(15.9)	(17.5)
Pipeline, plant and other capital assets	(17.0)	(0.5)
Restricted cash	0.4	(4.6)
Other	(0.2)	3.9
	(913.9)	(112.6)
Financing
Restricted cash	347.1	-
Short-term debt issued, net of issue costs	249.1	-
Short-term debt repaid	(250.0)	-
Long-term debt issued, net of issue costs	347.8	53.8
Long-term debt repaid	(2.1)	(3.8)
Net change in credit facilities	81.0	55.5
Preferred shares issued, net of issue costs	193.7	-
Dividends paid	(9.1)	(10.9)
Advances to jointly-controlled businesses	(21.5)	-
Other	(2.6)	-
	933.4	94.6
Increase in cash and short-term investments	48.9	15.6
Effect of foreign exchange rate changes on cash and short-term investments	-	(0.1)
Cash and short-term investments at the beginning of the period	21.9	22.6
Cash and short-term investments at the end of the period	70.8	38.1

 

Veresen Inc.
Distributable Cash
	Three months ended March 31
(Canadian $ Millions, except where noted)	2012	2011
Alliance distributions, prior to withholdings for capital expenditures and net of debt service	32.6	35.9
AEGS distributable cash, after non-recoverable capital expenditures and debt service	4.0	3.9
Hythe/Steeprock distributable cash, after non-recoverable maintenance capital expenditures	9.5	-
Aux Sable distributions, net of support payments, non-recoverable maintenance capital   expenditures and debt service	13.1	8.2
Power distributable cash, after maintenance capital expenditures and debt service	2.5	4.7
	61.7	52.7
Corporate
General and administrative	(8.1)	(6.0)
Interest and other finance	(8.1)	(5.7)
Principal repayments on senior debt	-	(0.7)
	(16.2)	(12.4)
Taxes	(2.8)	(3.6)
Preferred share dividends ^(1)	(1.1)	-
	(20.1)	(16.0)
Distributable cash  ^(2)	41.6	36.7
Distributable cash per Common Share ($) ^(3)	0.23	0.23
Dividends paid/payable^(4^)	46.1	39.9
Dividends paid/payable per Common Share ($)	0.25	0.25

(1)		Preferred share dividends for the first quarter of 2012 have not yet been declared by the Company's Board of Directors.
(2)		See "Non-GAAP Financial Measures" for reconciliation of distributable cash to cash flows from operating activities.
(3)		The number of Common Shares used to calculate distributable cash per Common Share is based on the average number of Common Shares outstanding at each record date.  For the three months ended March 31, 2012 the average number of Common Shares outstanding for this calculation was 184,656,102 (2011 - 159,670,796) and 190,562,838 (2011 - 165,578,330) on a basic and diluted basis, respectively.  The number of Common Shares outstanding would increase by 5,906,508 (2011 - 5,907,534) Common Shares if the outstanding Convertible Debentures on March 31, 2012 were converted into Common Shares.
(4)		Includes $37.1 million of dividends for the three months ended March 31, 2012 (2011 - $30.2 million) satisfied through the issuance of Common Shares under our DRIP.

 

Veresen Inc.
Reconciliation of Distributable Cash to Cash from Operating Activities
	Three months ended March 31
(Canadian $ Millions)	2012	2011
Consolidated cash from operating activities	29.4	33.6
Add (deduct):
Project development costs ^(5)	5.8	2.4
Change in non-cash working capital	18.2	3.7
Principal repayments on senior notes	(2.1)	(2.7)
Maintenance capital expenditures	(0.9)	(0.4)
Distributions earned greater than distributions received ^(6)	(8.8)	0.1
Distributable cash	41.6	36.7

(5)		Represents costs incurred by the Company in relation to projects where the recoverability of such costs has not yet been established.  Amounts incurred for the three months ended March 31, 2012 relate primarily to the Jordan Cove LNG terminal project, the Pacific Connector Gas Pipeline project, and various power development projects.
(6)		Represents the difference between distributions declared by jointly-controlled businesses and distributions received.

Veresen Inc.
Reconciliation of Proportionately Consolidated Power Business Results to US GAAP
		Three months ended March 31, 2012			Three months ended March 31, 2011
(Canadian $ Millions)		Proportionately Consolidated	Reverse proportionate consolidation; apply equity accounting	US GAAP	Proportionately Consolidated	Reverse proportionate consolidation; apply equity accounting	US GAAP
Proportionately
Consolidated ^(7)
EBITDA		8.0	(1.1)	6.9	8.4	(1.0)	7.4
Depreciation &
amortization		(8.8)	0.5	(8.3)	(8.9)	0.5	(8.4)
Interest		(3.2)	0.1	(3.1)	(3.6)	0.2	(3.4)
Fair value gains		4.9	(4.9)	-	3.8	(3.8)	-
Foreign exchange
loss and other		(0.1)	0.1	-	(0.3)	0.3	-
Equity income		-	5.3	5.3	-	3.8	3.8
Net income
before tax and
non-controlling
interest		0.8	-	0.8	(0.6)	-	(0.6)

(7)

Under US GAAP, the Company accounts for each of York Energy, NRGreen and Grand Valley using the equity method due to its joint control of these entities. However, the Company believes the presentation of the Power Business' earnings on a proportionately consolidated line-by-line basis provides more insightful information. The Company and the investment community uses EBITDA on a proportionately consolidated basis to assess the performance of our Power business.

  

 

 

 

 

 

 

 

Dorreen Miller
Director, Investor Relations
Phone: [phone]
Email: [email protected]