Valener reaps the benefits of Gaz Métro's exceptional year

Highlights:

Valener

  • Net income of $30.3 million, or $0.82 per share;
  • Distributions received from Gaz Métro totalling $37.4 million, or $1.01 per share; and
  • Increase in the credit facility from $75.0 million to $200.0 million in order to participate in Gaz Métro's growth initiatives and in the development of the Seigneurie de Beaupré wind power projects.

Gaz Métro

  • Record adjusted net income of $164.0 million, up $11.4 million;
  • $17.5 million gain on the sale of Gaz Métro's interest in MTO Telecom;
  • Natural gas deliveries up 5.4% in the Quebec industrial market; and
  • Regulatory approval to extend the gas network to Thetford Mines.

Growth is on track:

  • Signing of a final agreement to purchase Central Vermont Public Service Corporation (CVPS) and approval by a strong majority of CVPS shareholders;
  • Start of construction on the first phase of the Seigneurie de Beaupré wind power projects, representing a capacity of 272 megawatts, and implementation of a $590 million 20-year financing;
  • Start of construction on the 63-megawatt Kingdom Community Wind project in Vermont; and
  • Launch of operations at Gaz Métro Transport Solutions with the first LNG refuelling station for Robert Transport trucks, a first in Canada in the road freight transportation sector.

MONTREAL, Nov. 18, 2011 /CNW Telbec/ - Valener Inc. (Valener) (TSX: VNR), which has held the public ownership interest in Gaz Métro Limited Partnership (Gaz Métro) since September 30, 2010, is pleased to announce the results of its first full fiscal year ended September 30, 2011.

Results of Valener's first fiscal year

For fiscal 2011, Valener's net income stood at $30.3 million, or $0.82 per share. Valener's net income consists essentially of its approximate 29% share in the net income of Gaz Métro, i.e., a $47.6 million share, and a $14.5 million income tax expense.

"During its first fiscal year, Valener reaped the rewards of Gaz Métro's strong results, which were further supported by the favourable competitive position of natural gas and the sale of Gaz Métro's interest in MTO Telecom," said Pierre Monahan, Chairman of the Board of Valener.

"Valener recently increased its credit facility from $75 million to $200 million in order to participate in Gaz Métro's growth initiatives, including the CVPS acquisition, and in the development of the Seigneurie de Beaupré wind power projects, in which Valener also has a 24.5% interest. This will give Valener increased flexibility to contribute to future investments," added Mr. Monahan.

Strong and steady dividends

During fiscal 2011, Valener received $6.7 million in additional distributions from Gaz Métro, or $0.18 per share.

"Valener will continue to benefit from this $6.7 million increase in distributions over each of the next two fiscal years, as planned at the time of Gaz Métro's reorganization, allowing it to maintain an annual dividend of $1.00 per share. As of fiscal 2014, Valener will then benefit from the strong cash flows expected from the Seigneurie de Beaupré wind power projects, another of Valener's growth drivers, which should allow it to sustain the same level of dividends going forward," added Mr. Monahan.

Dividends declared totalled $1.00 per share in fiscal 2011. On November 17, 2011, Valener's Board of Directors declared a quarterly dividend of $0.25 per common share payable on January 16, 2012 to shareholders of record at the close of business on December 30, 2011. Valener expects to maintain the dividend level at $0.25 per share for each quarter of fiscal 2012.

Another opportunity for Valener's shareholders

As part of the Dividend Reinvestment Plan, Valener's Board of Directors is maintaining, for the dividend payable on January 16, 2012, the 5% discount on new shares issued in order to give shareholders an opportunity to participate in the company's growth.

Gaz Métro's results

Gaz Métro posted record adjusted net income of $164.0 million for fiscal 2011, up $11.4 million from the adjusted1 net income of fiscal 2010. This increase reflects, among other factors, a strong, sustained commercial performance supported by the competitive position of natural gas and the highly profitable sale of Gaz Métro's interest in MTO Telecom Inc., a transaction that is in line with Gaz Métro's strategy of concentrating on the energy sector.

"For Gaz Métro, 2011 has been an exceptional year from all vantage points," said Sophie Brochu, President and Chief Executive Officer of Gaz Métro. "Our deliveries in Quebec have been particularly strong in the industrial sector, up 5.4% from last year as a result of the competitive position of natural gas and its environmental appeal. Thetford Mines will be the next region to benefit from natural gas thanks to the approximately 80-kilometre extension of Gaz Métro's network, for which regulatory approval has been obtained. During fiscal 2011, Gaz Métro signed 8,069 new contracts, a 4.2% increase over fiscal 2010, and the volumes associated with the new contracts were 33.1% higher than those of contracts signed in 2010," added Ms. Brochu.

"There have been many accomplishments over the year, including the start of construction on phase one of the Seigneurie de Beaupré wind power projects and the CVPS acquisition project, which represents a logical step to further our prudent and well-targeted diversification strategy. The merger of CVPS and Green Mountain Power will help our Vermont customers achieve substantial savings on their electricity bills, while providing us with a platform for earnings growth. We are very pleased that a clear majority of CVPS shareholders approved our proposal, one of the key steps in the acquisition process. The launch of operations at Gaz Métro Transport Solutions, with the opening of the first commercial LNG refuelling station—a first of its kind in Canada in the road freight transportation sector—also stands as a promising new business opportunity. Finally, I would like to draw attention to the financial market confidence in Gaz Métro and Valener, especially given the recent market turbulence and uncertainty. The long-term financings for phase one of the Seigneurie de Beaupré wind power projects and for the CVPS acquisition, the increase to Valener's credit facility, and the confirmation by S&P and DBRS of credit ratings attributed to Gaz Métro are concrete signs of the market confidence in Gaz Métro and Valener," added Ms. Brochu.

Segment analysis of Gaz Métro's results

Net income (loss) for the fiscal years ended September 30          
(in millions of dollars) 2011   2010   Change
Energy Distribution          
  Gaz Métro-QDA 110.6   115.9   (5.3)
  VGS and GMP 18.9   19.7   (0.8)
  Financing costs of investments in this segment(1) (3.8)   (4.0)   0.2
  Gain on the sale of an investment owned by GMP -   (0.8)   0.8
  125.7   130.8   (5.1)
Natural Gas Transportation          
  TQM, PNGTS and Champion Pipe Line Corporation Ltd 19.1   20.7   (1.6)
  Financing costs of investments in this segment(1) (3.6)   (3.9)   0.3
  The NEB's favourable decision on TQM's rate of return for 2009 -   (2.9)   2.9
  Impact of the State of New Hampshire's tax review (net of income taxes) -   (1.2)   1.2
  15.5   12.7   2.8
Natural Gas Storage          
  Intragaz 7.2   32.2   (25.0)
  Financing costs of investments in this segment(1) (1.7)   (1.7)   -
  Non-monetary impact related to future income taxes(2) -   (25.1)   25.1
  5.5   5.4   0.1
Energy Services and Other          
  Energy, water and fibre optic 23.3   11.1   12.2
  Financing costs of investments in this segment(1) (1.5)   (1.6)   0.1
  Non-monetary impact related to future income taxes(2) -   (2.7)   2.7
  Gain on the sale of MTO (17.5)   -   (17.5)
  Loss on the sale of Aqua Data Inc. 0.2   -   0.2
  Settlement of a dispute involving HydroSolution -   (2.3)   2.3
  Gain on the sale of Teldig Systems Inc. -   (0.8)   0.8
  4.5   3.7   0.8
Corporate Affairs and Other          
  Corporate Affairs and Other (4.5)   (9.7)   5.2
  Non-monetary impact related to future income taxes(2) -   1.7   (1.7)
  CVPS acquisition costs 1.8   -   1.8
  Corporate reorganization expenses 0.1   6.7   (6.6)
  Gain realized by Gaz Métro Éole Inc. on the sale of 49.0% of its interest in the Seigneurie de Beaupré wind power projects (1.1)   -   (1.1)
  (3.7)   (1.3)   (2.4)
Consolidated adjusted net income, excluding non-recurring items 147.5   151.3   (3.8)
Non-recurring items 16.5   1.3   15.2
Consolidated adjusted net income 164.0   152.6   11.4
Non-monetary impact related to future income taxes(2) -   26.1   (26.1)
Consolidated net income 164.0   178.7   (14.7)
(1)  Financial expenses incurred by Gaz Métro to finance investments in the subsidiaries, joint ventures, and companies subject to significant influence of each segment.
(2)  Adjustment to future income taxes related to Gaz Métro's subsidiaries and joint ventures formed as limited partnerships that do not qualify as rate-regulated enterprises as defined in the Canadian Institute of Chartered Accountants' Handbook. Since September 30, 2010, as a result of its corporate reorganization, Gaz Métro no longer has to account for future income tax adjustments.

Quebec Natural Gas Distribution (Gaz Métro-QDA)

Normalized natural gas deliveries by Gaz Métro-QDA for fiscal 2011 were 0.4% higher than last year.

In the industrial market, normalized deliveries for fiscal 2011 increased 5.4% as a result of greater consumption, particularly in the refinery, petrochemical, metallurgy and pulp and paper industries. Lower natural gas prices resulting from abundant continental supply have created a competitive advantage, prompting customers to opt for natural gas over petroleum products.

In the residential market and the commercial market, normalized deliveries were down 1.9% and 4.8%, respectively (4.2% combined average decrease) from fiscal 2010, due in part to energy efficiency measures by customers and to lower volumes resulting from the application of a new method for establishing the normal temperature. If not for this change to the normal temperature, the average decline in these two markets would have been only 2.9%.

Gaz Métro-QDA posted $110.6 million in net income for fiscal 2011, down $5.3 million from the previous year. The factors underlying this decrease include lower authorized rate of return and income tax and capital tax expenses recovered in rates, despite fiscal 2011 overearnings of $5.2 million (Gaz Métro's Partners' share).

These overearnings came mainly from higher deliveries in the industrial market combined with a higher average selling price on short-term interruptible service sales and a reduction in the cost of load-balancing and transportation tools.

Energy Distribution in Vermont

Net income from energy distribution in Vermont totalled $15.1 million2 for fiscal 2011. Excluding the $1.0 million unfavourable impact on the earnings of Vermont Gas Systems, Inc. (VGS) and Green Mountain Power Corporation (GMP) resulting from the U.S. dollar's depreciation against the Canadian dollar, and a $0.8 million non-recurring gain on the sale of an investment owned by GMP recognized in fiscal 2010, net income would have been $1.2 million higher than last year. This increase was mainly due to higher natural gas and electricity deliveries by VGS and GMP and to the earnings generated by GMP's additional investment in Vermont Transco LLC, which operates an electricity transmission system in Vermont.

Natural Gas Transportation

Excluding the non-recurring items described below, net income from the Natural Gas Transportation segment was $15.5 million in fiscal 2011, up $2.8 million year over year. This increase mainly reflects a decrease in the amortization and financial expenses of Trans Québec & Maritimes Pipeline Inc. (TQM) and higher interruptible service revenues for Portland Natural Gas Transmission System (PNGTS) due to colder temperatures.

The non-recurring items were:

  • a $2.9 million favourable impact from an interim rate adjustment for fiscal 2009 for TQM approved by the National Energy Board (NEB) during the first quarter of Gaz Métro's fiscal 2010; and
  • a $2.0 million income tax recovery ($1.2 million net of income taxes) that had been recorded in the first quarter of fiscal 2010 by PNGTS and resulting from the State of New Hampshire tax review.

Natural Gas Storage

In the Natural Gas Storage segment, Gaz Métro recorded net income of $5.5 million for fiscal 2011, virtually unchanged from the adjusted net income of the previous year.3

Energy Services and Other

Excluding the non-recurring items described below, the Energy Services and Other segment posted net income of $4.5 million in fiscal 2011, $0.8 million more than the adjusted net income4 of last year. This increase was mainly attributable to improved profitability from:

  • Climatisation et Chauffage Urbains de Montréal, s.e.c. mainly due to greater steam and hot water volumes produced and delivered to meet customer demand for heating services because of colder temperatures;
  • HydroSolution, L.P. (HydroSolution) resulting from an increase in its monthly water heater rental rates; and
  • Gaz Métro Plus Limited Partnership, after a technical service reorganization in fiscal 2010 helped reduce its direct costs;

mitigated by:

  • a decrease in the profitability of Consulgaz Inc. due to lower demand for global modernization and energy efficiency optimization solutions.

The non-recurring items were:

  • a $17.5 million gain realized on the sale of MTO Telecom Inc. (MTO) in the fourth quarter of fiscal 2011;
  • a $0.2 million loss on the sale of Aqua-Data Inc. in the third quarter of fiscal 2011;
  • a $2.3 million favourable settlement arising from a dispute involving HydroSolution that had been recognized in the third quarter of 2010; and
  • a $0.8 million gain on the sale of Teldig Systems Inc. that had been realized in the first quarter of fiscal 2010.

Acquisition of Central Vermont Public Service Corporation

In order to strengthen its presence in Vermont and in keeping with its prudent and well-targeted diversification strategy, on July 12, 2011, Gaz Métro announced that it had signed a final agreement (the agreement) to purchase CVPS, the largest electric company in Vermont, which serves close to 160,000 customers in 164 cities and towns across Vermont. Subject to U.S. regulatory approvals, CVPS is being acquired for an all-cash consideration of US$35.25 per share, amounting to approximately US$485 million, excluding transaction fees and other costs estimated at approximately US$40 million. Gaz Métro intends to finance this new investment with 50/50 debt/equity. To that effect, on November 11, 2011, Gaz Métro inc. entered into a note purchase agreement with a group of investors, by way of a private placement, in anticipation of a subsequent note issuance, guaranteed by Gaz Métro, for a total capital amount of US$260.0 million. The proceeds of the issuance will be loaned to Gaz Métro on conditions similar to those of the secured notes, for purposes of partially financing the CVPS acquisition.

This acquisition paves the way for a merger between CVPS and GMP, an indirect subsidiary of Gaz Métro, to create a stronger utility for Vermont residents. The new Vermont-wide utility will serve more than 255,000 customers.

The agreement provides considerable benefits for customers, the community, employees and the shareholders of CVPS. Moreover, the merger between CVPS and GMP will generate US$144.0 million in savings for their customers over the next decade and even greater anticipated savings thereafter.

The transaction was approved on September 29, 2011 by a strong majority of CVPS's common shareholders. This was one of the essential steps needed to complete the CVPS acquisition. This acquisition is also subject to the approval of other U.S. federal and state regulators, and Gaz Métro is confident that it will obtain these additional authorizations required to finalize the acquisition by spring or summer of 2012. Once the transaction is finalized, CVPS and GMP will combine their operations under Northern New England Energy Corporation (NNEEC), a wholly owned subsidiary of Gaz Métro based in Vermont.

Joint development projects between Valener and Gaz Métro 

Wind power projects in Quebec

Beaupré Éole General Partnership (Beaupré Éole) (51%-owned by Gaz Métro and 49%-owned by Valener) and a wholly-owned subsidiary of Boralex Inc. (Boralex) (the consortium), are equal-share partners in three wind power projects with an installed capacity of 341 megawatts, namely, the Seigneurie de Beaupré wind farms 2 and 3 (wind power projects 2 and 3) and the Seigneurie de Beaupré wind farm 4 (wind power project 4). In fiscal 2011, construction started on wind power projects 2 and 3, with an installed capacity of 272 megawatts. Completion of wind power projects 2 and 3, planned for commissioning in December 2013, represents a total investment of approximately $750 million, including financial expenses. The projects will be built on the private lands owned by the Séminaire de Québec, with which a 20-year lease has been signed, and benefit from 20-year electricity supply contracts with Hydro-Québec Distribution.

During fiscal 2011, final agreements were signed with Enercon, the turbine and maintenance service supplier with world-renowned expertise, and with Borea Construction, which will execute the civil engineering work and build the electrical substation. On-site construction began in May 2011 and is progressing as scheduled. In summer 2011, the consortium completed part of the foundation and road construction work, which is continuing this fall. In fiscal 2012, the consortium expects to complete the foundation and road construction work, begin partial erection of the concrete towers and start construction of the electrical substation and collector system.

The investments required for wind power projects 2 and 3 will be financed by Seigneurie de Beaupré Wind Farms 2 and 3 General Partnership (Wind Farms 2 and 3), the entity that owns these projects, through debt and equity financing of about 80% debt and 20% equity. On November 8, 2011, Wind Farms 2 and 3 completed the debt financing for these projects with a group of lenders. The total amount of the non-recourse financing is $725 million and consists of:

  • a two-year construction loan of $590 million that will convert into an 18-year amortizing loan after the start of commercial operations scheduled for December 2013, which represents approximately 80% of the total anticipated investment; and
  • short-term facilities, including a bridge loan and a letter of credit facility, totalling $135 million to finance certain costs reimbursable by Hydro-Québec to be incurred during construction and to provide various letters of credit.

A portion of $260 million of the financing is covered by a guarantee offered to the lenders by the Federal Republic of Germany through its export credit agency Euler-Hermes. With this financing and given the investments and the commitments of $153 million by the partners Gaz Métro, Valener and Boralex, wind power projects 2 and 3 are fully funded.

Commissioning of the 69-megawatt wind power project 4 is planned for December 2014. The environmental impact study for this project was submitted to the Minister of Sustainable Development, Environment and Parks in December 2010. This project will be subject to the same authorizations as wind power projects 2 and 3.

Gaz Métro's main development initiatives

Kingdom Community Wind project in Vermont

Having received the required regulatory approvals and permits, in September 2011 GMP started construction on the Kingdom Community Wind (KCW) project, a 63-megawatt wind power project in Lowell, Vermont. With its 21 wind turbines, this project will supply power to more than 24,000 households consisting of GMP customers and members of Vermont Electric Cooperative (VEC). As of 2013, assuming it will be operating at full capacity, the KCW project could meet up to 8% of GMP's anticipated supply needs. GMP is on track to complete the KCW project by the end of 2012. Customers will benefit, since this project should be eligible for a U.S. federal tax credit on production, which will be used to reduce the cost of energy for GMP customers and VEC members. The investments required for this project (approximately US$150 million) will be financed by GMP through both debt and equity financing in accordance with its capital structure, as this investment is regulated and is part of its rate base.

Natural gas as transportation fuel

Gaz Métro is involved in developing natural gas for the transportation industry, freight transportation in particular. The most promising market is that of heavy transport, for which natural gas, both compressed and liquefied, is a real alternative to diesel fuel. Gaz Métro Transport Solutions, L.P. (Transport Solutions), an indirect subsidiary of Gaz Métro created for this market, signed an agreement with Transport Robert 1973 Ltée (Robert Transport) in summer 2010. This agreement covers liquefied natural gas (LNG) fuelling of trucks. To this end, since July 2011 Transport Solutions has been installing the facilities needed to supply trucks from three refuelling stations. The Boucherville station has been in operation since September 19, 2011. Delivery of the trucks ordered by Robert Transport began in autumn 2011.

In October 2011, Gaz Métro announced that Transport Solutions will supply LNG to three ferries operated by the Société des traversiers du Québec (STQ). The two ferries for the Tadoussac-Baie-Sainte-Catherine crossing and the ferry for the Matane-Baie-Comeau-Godbout crossing will be supplied with LNG, in replacement of marine diesel, as of 2013 and 2014. Transport Solutions is proud to be associated with this STQ initiative because replacing marine diesel with natural gas for these three ferries will reduce GHG emissions by as much as 25% or 8,750 tonnes, which is equivalent to removing 1,750 cars from the roads each year.

Conference call

Valener will hold a conference call with financial analysts today, Friday, November 18, 2011 at 11 am (Eastern Time) to discuss its results and those of Gaz Métro for the fiscal year ended September 30, 2011.

Pursuant to an administration and management support agreement entered into between Valener and Gaz Métro on September 30, 2010, Gaz Métro acts as the manager of Valener. As such, Sophie Brochu, President and Chief Executive Officer, and Pierre Despars, Executive Vice-President, Corporate Affairs and Chief Financial Officer of Gaz Métro inc., the General Partner of Gaz Métro, will be the speakers, and a question period will follow.

The call will be broadcast live and accessible by dialling 416-644-3426 or toll-free 1-800-731-5319. It will also be available via webcast on Valener's website (www.valener.com) in the Events & Presentations section. The media and other interested parties are invited to listen in on this conference call. After the conference call, the speakers will be available for media interviews and questions.

For 30 days afterward, a rebroadcast will be accessible by dialling 416-640-1917 or toll-free 1-877-289-8525 (access code: 4482056#). For 90 days afterward, the call can be played back on the above-mentioned website.

Overview of Valener

Valener owns an economic interest of approximately 29% in Gaz Métro. Valener therefore has a stake in the energy industry and benefits from Gaz Métro's diversified profile, both in terms of geography and business segment. Valener also owns an indirect interest of 24.5% in the wind power projects jointly developed by Beaupré Éole General Partnership and Boralex Inc. on the private lands of Séminaire de Québec. Valener may also pursue its own development projects and acquisition strategies subject to a non-competition agreement in favour of Gaz Métro and to applicable limitations under its credit facility. Valener's common shares are listed on the Toronto Stock Exchange under the "VNR" trading symbol. www.valener.com

Overview of Gaz Métro

With over $3.7 billion in assets, Gaz Métro is Quebec's leading natural gas distributor. Its 10,000-kilometre network serves 300 municipalities. Gaz Métro has operated in this regulated industry since 1957 and is the trusted energy provider to its customers in Quebec and Vermont, who choose natural gas for its competitive price, efficiency, comfort and environmental benefits. Gaz Métro is also present in the electricity distribution market, natural gas transportation and storage, the development of projects such as wind power, natural gas as fuel for the transportation industry and biomethanation. Gaz Métro is committed to the satisfaction of its customers, Partners (Gaz Métro inc. and Valener), employees and the communities it serves. www.gazmetro.com

Cautionary note regarding forward-looking statements

This press release may contain forward-looking information within the meaning of applicable securities laws. Such forward-looking information reflects the intentions, plans, expectations and opinions of the management of Gaz Métro inc. (GMi), in its capacity as General Partner of Gaz Métro, and acting as manager of Valener (the management of the manager) and is based on information currently available to the management of the manager and assumptions about future events. Forward-looking statements can often be identified by words such as "plans," "expects," "estimates," "forecasts," "intends," "anticipates" or "believes, " or similar expressions, including the negative and conjugated forms of these words. Forward-looking statements involve known and unknown risks and uncertainties and other factors beyond the control of the management of the manager. A number of factors could cause the actual results of Valener or of Gaz Métro to differ significantly from current expectations, as described in the forward-looking statements, including but not limited to the general nature of the aforementioned, and as described in the "Risk Factors Relating to Valener" and "Factors Relating to Gaz Métro" sections of the Valener and Gaz Métro MD&As for the fiscal year ended September 30, 2011 and in Valener disclosure filings. Although the forward-looking statements contained herein are based upon what the management of the manager believes to be reasonable assumptions, including assumptions to the effect that no unforeseen changes in the legislative and regulatory framework of energy markets in Quebec and the New England states will occur; that no significant event occurring outside the ordinary course of business, such as a natural disaster or other calamity, will occur; that Gaz Métro will be able to continue distributing substantially all of its net income (excluding non-recurring items); that the Seigneurie de Beaupré wind power projects will be completed on schedule and as per specification; that Gaz Métro will obtain the required approvals from federal and state authorities for the acquisition of CVPS; that Gaz Métro will obtain sufficient capital and that GMP will be able to quickly and efficiently integrate CVPS's operations; in addition to the other assumptions described in the Valener and Gaz Métro MD&As for the fiscal year ended September 30, 2011, the management of the manager cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of this date, and the management of the manager assumes no obligation to update or revise them to reflect new events or circumstances, except as required pursuant to applicable securities laws. Readers are cautioned to not place undue reliance on these forward-looking statements.

Non-GAAP financial measures

In the opinion of the management of the manager, certain "adjusted" indicators, such as adjusted net income and adjusted net income per unit of Gaz Métro, provide readers with information it considers useful for analyzing the financial results of both Valener and Gaz Métro. However, these indicators are not standardized in accordance with Canadian generally accepted accounting principles (GAAP) and should not be considered in isolation or as substitutes for other performance measures that are in accordance with GAAP. The results obtained might not be comparable with similar indicators used by other issuers and should therefore be considered only as complementary information.

___________________________

1 Adjusted to exclude, for fiscal 2010, $26.1 million in favourable non-monetary adjustments related to future income taxes. Since September 30, 2010, as a result of its reorganization, Gaz Métro no longer has to account for future income tax adjustments.
2 Net of financing costs.
3 Adjusted to exclude a $25.1 million favourable non-monetary adjustment related to future income taxes for fiscal 2010.
4 Adjusted to exclude a $2.7 million favourable non-monetary adjustment related to future income taxes for fiscal 2010.

 

HIGHLIGHTS            
VALENER INC.   Fiscal years ended September 30  
(in millions of dollars, except for share data, which is in dollars)   2011     2010 (1)
    (audited)     (audited)  
CONSOLIDATED INCOME AND CASH FLOWS            
Share in the net income of Gaz Métro Limited Partnership $ 47.6   $ -  
Net income (loss) $ 30.3   $ (0.2)  
Basic and diluted net income (loss) per share $ 0.82   $ (0.01)  
Cash flows related to operating activities $ 34.5   $ -  
Dividends declared per share to shareholders of record on December 30, March 31, June 30, and September 30 $ 1.00     N/A  
Weighted average number of shares outstanding (in millions)   37.1     34.9  
OTHER INFORMATION            
Market prices on Toronto Stock Exchange:            
  High $ 18.37     N/A  
  Low $ 13.96     N/A  
  Close $ 14.42     N/A  
CONSOLIDATED BALANCE SHEETS            
  September 30,
2011
      September 30,
2010
 
    (audited)     (audited)  
             
Total assets $ 672.7   $ 631.3  
Shareholders' equity $ 602.6   $ 589.1  
Shareholders' equity per share $ 16.13   $ 16.86  
GAZ MÉTRO LIMITED PARTNERSHIP   Fiscal years ended September 30  
(in millions of dollars, except for unit data, which is in dollars)   2011     2010  
    (audited)     (audited)  
CONSOLIDATED INCOME AND CASH FLOWS            
Revenues $ 1,962.8   $ 2,020.4  
Gross margin $ 747.5   $ 760.0  
Net income $ 164.0   $ 178.7  
Adjusted net income (4) (5) $ 164.0   $ 152.6  
Cash flows related to operating activities, before change in non-cash working capital items $ 409.3   $ 389.4  
Purchases of property, plant and equipment $ 201.2   $ 144.1  
Changes in deferred charges and credits and intangible assets $ 126.4   $ 89.0  
Basic and diluted net income per unit $ 1.30   $ 1.48  
Basic and diluted adjusted net income per unit (4) (5) $ 1.30   $ 1.27  
Distributions paid per unit to Partners $ 0.84   $ 1.55  
Weighted average number of units outstanding (in millions)   126.2     120.5  
OTHER INFORMATION            
Authorized rate of return on deemed common equity (Quebec distribution activity)   9.09%     9.20%  
Realized rate of return on deemed common equity (Quebec distribution activity) (2)   10.08%     10.30%  
Credit ratings            
  First mortgage bonds (Standard & Poor's (S&P)/DBRS Limited (DBRS)) (3)   A/A     A/A  
  Commercial paper (S&P/DBRS) (3)   A-1(low)/R-1(low)     A-1(low)/R-1(low)  
CONSOLIDATED BALANCE SHEETS            
    September 30,
2011
    September 30,
2010
 
    (audited)     (audited)  
             
Total assets $ 3,727.2   $ 3,666.6  
Total debt $ 1,762.9   $ 1,858.6  
Partners' equity $ 1,014.5   $ 932.6  
Partners' equity per unit $ 8.03   $ 7.74  
(1) Exceptionally, Valener's fiscal 2010 was a 108-day period since Valener was created in June of 2010.
(2) The realized rate of return in 2011 is subject to the approval of the Régie de l'énergie, and the realized rate of return in 2010 was approved upon the Régie de l'énergie's decision in May 2011.
(3) Through its General Partner, Gaz Métro inc.
(4) These measures are non-GAAP financial measures.
(5) Adjusted to exclude, for fiscal 2010, $26.1 million in favourable non-monetary adjustments related to future income taxes.

 

SOURCE VALENER INC.

For further information:

Investors and Analysts
Caroline Warren 
Investor Relations
514-598-3324
www.valener.com
  Media
Audrey Giguère
Media and Public Relations
514-598-3449

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