VALENER REPORTS SECOND QUARTER NET INCOME OF $22.4 MILLION THROUGH ITS INVESTMENT IN GAZ MÉTRO

Second quarter highlights:

Valener       Gaz Métro
Net income of $0.60 per share; and           $108.2 million in net income, up 4%;
Dividend of $0.25 per share.       At $4.70/gigajoule, the average system gas rate was down 15%;
        6% increase in deliveries to the industrial market;
        Extension of the gas network to Thetford Mines; and
        Demonstration project for natural gas-powered locomotives.

MONTREAL, May 16 /CNW Telbec/ - Valener Inc. ("Valener") (TSX: VNR), which has held the public ownership interest in Gaz Métro since last fall, is pleased to announce its results for the second quarter ended March 31, 2011.

Valener's results

For the second quarter of fiscal 2011, Valener posted net income of $22.4 million or $0.60 per share. For the first six months, Valener's net income stood at $33.5 million or $0.91 per share, consisting essentially of its approximate 29% share in the earnings of Gaz Métro, which came to $49.0 million, and a $14.7 million income tax expense.

"Valener benefits directly from the business momentum of its main investment, Gaz Métro. The strong competitive position of natural gas and the progress being made on the Seigneurie de Beaupré wind power projects and Gaz Métro's other development initiatives are signs of a promising future for Valener," said Pierre Monahan, Chairman of the Board of Valener.

Enviable financial position, stable dividend  

"Valener's financial proposition to its investors is enviable. Balance sheet assets stood at $698 million as at March 31, 2011. The company currently has no debt and, for future development, has the flexibility of a $75 million credit facility. Since last December, Valener has held a 24.5% indirect interest in the Seigneurie de Beaupré wind power projects, which will ultimately have a total installed capacity of 341 megawatts. Valener also receives 29% of Gaz Métro's distributions, guaranteeing shareholders a stable dividend," explained Mr. Monahan.

Valener's Board of Directors declared a quarterly dividend of $0.25 per common share payable on July 15, 2011 to shareholders of record at the close of business on June 30, 2011.

Gaz Métro's results

Valener's main asset is its interest in Gaz Métro. Although Gaz Metro is now private, its results are presented below such that Valener's shareholders may monitor the evolution of their primary investment.

In the second quarter of fiscal 2011, Gaz Métro recorded $108.2 million in net income, up $4.2 million from the adjusted net income1 in the second quarter of last year. The increase owes mainly to higher net income generated by the natural gas distribution activity in Quebec (Gaz Métro­QDA).

"Natural gas prices continue to be advantageous for all our customers," said Sophie Brochu, President and Chief Executive Officer of Gaz Métro. "In the second quarter, the average rate for system gas was 15% lower than in the same quarter last year. Continuing low natural gas prices reflects the abundance of natural gas in North America and robust supply. Businesses are increasingly aware that natural gas has a competitive edge over heavy fuel oil.  They also see the significantly better environmental performance associated with greater use of natural gas versus petroleum products. These are clear advantages for the development of Gaz Métro's business and for Quebec's energy consumption profile," added Ms. Brochu.

For the first six months of fiscal 2011, Gaz Métro's net income stood at $168.9 million, down $14.2 million from the adjusted net income1 in the first half of last year. The decrease stems mainly from Gaz Métro-QDA.

Segment analysis of Gaz Métro's results

Quebec Natural Gas Distribution (Gaz Métro-QDA)

For the second quarter of fiscal 2011, Gaz Métro-QDA's normalized natural gas deliveries totalled 1,971 million cubic metres, up 1.3% from the second quarter last year. The increase came mainly from a 6.0% volume increase in the industrial market, as the advantageous competitive position of natural gas prompted industrial customers to opt for natural gas over petroleum products.

For the first six months of fiscal 2011, Gaz Métro-QDA's normalized natural gas deliveries totalled 3,530 million cubic metres, down 0.5% from the same period last year. Deliveries per market were as follows:

  • In the industrial market, first-half deliveries were up 3.9% from the same period last year, with the increase being partly attributable to greater consumption, particularly in the refinery and petrochemical industries, and to a slight increase in short-term interruptible service sales.

  • In the residential market and the commercial market, normalized deliveries were down 3.2% and 3.9%, respectively, from the first six-month period of fiscal 2010, due in part to lower volumes resulting from energy efficiency measures 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 2.2%.

Gaz Métro-QDA posted $93.4 million in net income for the second quarter of fiscal 2011, up $2.7 million from the same quarter last year. After six months, Gaz Métro-QDA's net income was $140.6 million, down $14.7 million from the first six months of last year.

It is important to point out that the rate reduction authorized by the Régie de l'énergie for fiscal 2011 translated into a $13.5 million decline in net income for the 12 months of fiscal 2011 compared to the net income realized in fiscal 2010, for the following reasons:

  • Gaz Métro-QDA's $6.7 million share of the overearnings realized in fiscal 2010;
  • lower income taxes and capital tax included in the rates charged to customers and subsequently assumed by the Partners of Gaz Métro;
  • the lower average rate base ($1,772 million compared to $1,779 million); and
  • the lower authorized rate of return on deemed common equity for the fiscal year (9.09% versus 9.20%).

The $2.7 million second-quarter increase in net income was essentially due to the favourable impact of recognizing a $0.9 million share attributed to Gaz Métro's Partners with respect to the $3.7 million in overearnings for fiscal 2011 recognized in the first six months of fiscal 2011 compared to overearnings of $19.3 million that had been recognized during the same period of fiscal 2010 and fully attributed to customers, and to the lower financial expenses that reflect lower borrowing levels. The second-quarter increase in net income was higher than what was projected in the 2011 rate case.

The first-half decrease in net income stems from the impact of the 2011 rate case, which lowered revenues, and from higher operating and maintenance expenses and higher load-balancing and transportation costs, all partly offset by the above-mentioned favourable impact of recognizing a $0.9 million share of overearnings attributed to Gaz Métro's Partners and by the lower financial expenses resulting from lower borrowing levels. This decrease in net income is expected to partially reverse in the coming quarters, as it stems in part from a temporary timing difference between the revenue recognition profile, which follows the customers' consumption profile, and that of costs.

Energy Distribution in Vermont

Net income from energy distribution in Vermont totalled $7.6 million2 for the second quarter of fiscal 2011 and $12.6 million2 for the first six months of the fiscal year, up $0.9 million and $2.1 million, respectively, from the same periods last year. These increases were mainly due to higher natural gas and electricity deliveries by Vermont Gas Systems, Inc. (VGS) and Green Mountain Power Corporation (GMP), resulting in part from colder temperatures. The increases were also due to a decline in GMP's direct costs, as it was able to procure electricity supply at advantageous prices, and to the favourable impact of GMP's 2011 rate case, which included an increase in its rate base, the favourable impact of which more than offset the unfavourable impact of the slight decline in its authorized rate of return on common equity. Also, there was an increase in the share in earnings of companies subject to significant influence, as GMP made an additional investment in Vermont Transco LLC, which is active in electricity transportation, in December 2010.

Natural Gas Transportation

In the Natural Gas Transportation segment, Gaz Métro posted $5.8 million2 in net income for the second quarter of fiscal 2011, up $0.2 million from the same quarter last year.

For the first six months of the fiscal year, the segment's net income stood at $10.5 million2. Excluding the two non-recurring items listed below, net income for the segment increased by $1.2 million when compared to the first six months of last year. This increase stems mainly from the lower amortization expense and lower financial expenses for Trans Québec & Maritimes Pipeline Inc. (TQM) and from the increase in the interruptible service revenues of Portland Natural Gas Transmission System (PNGTS).

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 resulting from the State of New Hampshire tax review.

Natural Gas Storage

In the Natural Gas Storage segment, Gaz Métro recorded net income of $1.3 million2 for the second quarter of the fiscal year, up $0.2 million from the second quarter last year. For the first six months of the fiscal year, the segment's net income stood at $2.7 million2, up $0.4 million from the adjusted net income3 for the first six months of fiscal 2010. These increases came essentially from an indexing of rates.

Energy Services and Other

The Energy Services and Other segment posted net income of $0.8 million2 for the second quarter of fiscal 2011, $0.6 million less than the adjusted net income4 of the second quarter of last year. This decrease was in part due to lower profitability from Consulgaz Inc., as there was less demand for global modernization and energy efficiency optimization solutions.

For the first six months of the fiscal year, the segment's net income totalled $2.8 million2, up $0.5 million from the adjusted net income5 excluding non-recurring items of last year's first half, which excludes a $0.8 million gain on the sale of Teldig Systems Inc. that had been realized in the first quarter of fiscal 2010. This increase for the first six months of fiscal 2011 was due to higher net income from MTO Telecom Inc., which completed a major fibre optic network contract. In addition, both HydroSolution L.P. and Gaz Métro Plus Limited Partnership experienced greater profitability, the former owing to an increase in water heater rental rates and the latter owing to a fiscal 2010 reorganization of technical services that reduced direct costs.

Capital management

The debt/total capitalization ratio was 59.2% as at March 31, 2011, down from the ratio of March 31, 2010 (61.6%). On October 7, 2010, Gaz Métro issued units for net proceeds of approximately $100 million to which Valener and Gaz Métro inc. subscribed in proportion to their respective interests. In so doing, Gaz Métro brought its capital structure to a level more comparable to that which it had maintained before the 2007 acquisition of GMP that had been entirely financed by debt.

Main development projects

Wind power projects in Quebec:

Beaupré Éole General Partnership (Beaupré Éole) (51%-indirectly-owned by Gaz Métro and 49%-indirectly-owned by Valener) and Boralex Inc. (Boralex) are equal-share partners in two wind power projects with an installed capacity of 272 megawatts, namely, the Seigneurie de Beaupré wind farms 2 and 3 (Seigneurie projects). These wind farms, which will be constructed on the private lands owned by the Séminaire de Québec, are scheduled for commissioning in December 2013. The Seigneurie de Beaupré site has key advantages, including exceptional wind power potential due to the quality of the wind and proximity to Hydro-Québec TransÉnergie's transmission lines. As the site is far from urban or residential areas, there will be virtually no visual, sound or environmental impacts.

Having successfully passed the key environmental approval stage, the consortium is proceeding with the work needed to commission the Seigneurie projects and is staying the course with the key planning stages to complete them, in particular applying for construction permits, signing the final agreements with Enercon, the supplier of turbines and maintenance services and whose expertise is world renowned, signing a final agreement for the civil engineering work, and implementing financing. Discussions are now underway with Enercon to finalize the turbine purchase contract, and signing is currently expected in the coming weeks. In summer 2011, the consortium formed of Beaupré Éole and Boralex (the consortium) plans to complete a substantial part of the foundation work and a major portion of the road construction work.

To take advantage of prevailing market interest rates and protect against the potential risks of volatility over the coming months, Beaupré Éole has locked-in the underlying interest rate on a significant portion of its share in the financing to be implemented for the Seigneurie projects in 2011.

In November 2010, the consortium acquired the rights and the contract to sell electricity generated by a project with an installed capacity of 69 megawatts, assigned by Kruger inc. with the consent of Hydro-Québec. This third project will also be developed on the private lands of Seigneurie de Beaupré with commissioning scheduled for December 2014. In addition to benefitting from the site's wind power and environmental and infrastructure advantages, this future wind farm will also enjoy logistical synergies to be achieved during construction and after commissioning, which should be reflected in the project's performance level. The environmental impact study for this third 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 farms 2 and 3.

Wind power projects in Vermont:

In May 2010, GMP filed a petition with the Vermont Public Service Board seeking its approval for the construction and operation of a 63 megawatt wind generation facility in Lowell, Vermont. As of 2013, this wind project, if built and operating at its maximum potential, could contribute up to 8% of GMP's anticipated supply needs. GMP is currently the only electric utility in Vermont that owns and operates a commercial-scale wind generation farm, through its six megawatt Searsburg facility in Vermont, which commenced operations in 1997. If approved and constructed, this project would be Vermont's largest wind farm and would make GMP the largest wind energy producer in Vermont. The regulatory review process for this project is currently underway, and a decision is expected in the third quarter of fiscal 2011.

Natural gas as fuel for the transportation industry:

Gaz Métro has decided to begin developing natural gas for the transportation industry, freight transportation in particular. The most promising market is that of heavy transport, for which natural gas, either compressed or 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 (Transport Robert) in summer 2010. The agreement contains certain conditions and covers liquefied natural gas (LNG) fuelling of trucks. As per the agreement, Transport Solutions will install the facilities needed to supply trucks from three refuelling stations. The material needed to build the facilities has been ordered. The permitting process has been longer than anticipated, and the facilities will therefore be ready in summer 2011 rather than in the spring. This delay will not significantly impact the agreement with Transport Robert.

Transport Solutions is also proud to be working with two innovative partners, Westport Innovations and Canadian National Railway, at developing a new LNG engine technology for locomotives, a first in Canada. This project, which aims to demonstrate the technical, economic and environmental viability of this technology, from design to supply, will receive $2.3 million in funding from Sustainable Development Technology Canada, an independent, not-for-profit organization created by the Government of Canada. The initial stages of the project will consist of designing and testing, both in the plant and in the field, an LNG system for powering a locomotive. Transport Solutions will provide LNG expertise during the tests and be responsible for fuel supply logistics. If all goes according to plan, the three partners expect the prototype of an LNG-powered locomotive to be in operation in 2013.

Extending Gaz Métro-QDA's natural gas network to Thetford Mines:

On April 18, 2011, Gaz Métro announced that a major natural gas distribution agreement had been signed with Olimag Sands Inc., a company in Thetford Mines. The five-year contract, stipulating five million cubic metres of natural gas per year, constitutes a large portion of the volume of natural gas needed for Gaz Métro to obtain authorization from the Régie de l'énergie for the extension of its distribution network to Thetford Mines. This community-supported project will become reality thanks to an over-$18 million financial contribution from the federal government. The total investment for the 72-kilometre extension is estimated at $24.7 million. Following approval of the investment by the Régie de l'énergie, Gaz Métro will move on to the planning and construction stages. Commissioning is expected at the end of 2012.


1 Adjusted to exclude a $0.1 million unfavourable non-monetary adjustment related to future income taxes for the second quarter of fiscal 2010 ($1.1 million unfavourable adjustment for the first six months of fiscal 2010). 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 an unfavourable non-monetary adjustment related to future income taxes of $0.5 million.
4 Adjusted to exclude an unfavourable non-monetary adjustment related to future income taxes of $0.1 million.
5 Adjusted to exclude an unfavourable non-monetary adjustment related to future income taxes of $0.2 million.

Gaz Métro segment results - Net income and adjusted net income, excluding non-recurring items

  3 months ended March 31 (1)       6 months ended March 31 (1)
(in millions of dollars) 2011   2010   Change     2011     2010   Change
Energy Distribution                          
  Gaz Métro-QDA 93.4   90.7   2.7     140.6     155.3   (14.7)
  VGS and GMP 8.5   7.7   0.8     14.5     12.5   2.0
  Financing costs of investments in this segment (2) (0.9)   (1.0)   0.1     (1.9)     (2.0)   0.1
  101.0   97.4   3.6     153.2     165.8   (12.6)
Natural Gas Transportation                          
  TQM, PNGTS and Champion Pipe Line Corporation Ltd 6.6   6.5   0.1     12.3     15.2   (2.9)
  Financing costs of investments in this segment (2) (0.8)   (0.9)   0.1     (1.8)     (1.8)   -
  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
  5.8   5.6   0.2     10.5     9.3   1.2
Natural Gas Storage                        
  Intragaz 1.8   1.4   0.4     3.6     2.6   1.0
  Financing costs of investments in this segment (2) (0.5)   (0.3)   (0.2)     (0.9)     (0.8)   (0.1)
  Non-monetary impact related to future income taxes (3) -   -   -     -     0.5   (0.5)
  1.3   1.1   0.2     2.7     2.3   0.4
Energy Services and Other                          
  Energy, water and fibre optic 1.1   1.7   (0.6)     3.5     3.7   (0.2)
  Financing costs of investments in this segment (2) (0.3)   (0.4)   0.1     (0.7)     (0.8)   0.1
  Non-monetary impact related to future income taxes (3) -   0.1   (0.1)     -     0.2   (0.2)
  Gain on the sale of Teldig Systems Inc. -   -   -     -     (0.8)   0.8
  0.8   1.4   (0.6)     2.8     2.3   0.5
Corporate Affairs and Other                          
  Corporate Affairs and Other (0.7)   (1.5)   0.8     (0.3)     (1.9)   1.6
  Non-monetary impact related to future income taxes (3) -   -   -     -     0.4   (0.4)
  Corporate reorganization expenses -   0.7   (0.7)     -     1.0   (1.0)
  Gain realized by Gaz Métro Éole Inc. on the sale of 49.0% of its interest in the Seigneurie projects -   -   -     (1.1)     -   (1.1)
  (0.7)   (0.8)   0.1     (1.4)     (0.5)   (0.9)
Consolidated adjusted net income, excluding non-recurring items 108.2   104.7   3.5     167.8     179.2   (11.4)
  Non-monetary impact related to future income taxes (3) -   (0.1)   0.1     -     (1.1)   1.1
Consolidated net income, excluding non-recurring items 108.2   104.6   3.6     167.8     178.1   (10.3)
Non-recurring items -   (0.7)   0.7     1.1     3.9   (2.8)
Consolidated net income 108.2   103.9   4.3     168.9     182.0   (13.1)
(1) Operating results for interim periods are not necessarily representative of the results expected for the fiscal year.  Seasonal temperature fluctuations affect Gaz Métro's interim financial results, particularly in the fourth quarter of the fiscal year when Gaz Métro has historically shown a loss because of the typically low demand for energy in the summer months.
(2) Financial expenses incurred by Gaz Métro to finance investments in the subsidiaries, joint ventures, and companies subject to significant influence of each segment.
(3) 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.


Conference call

Valener will hold a conference call with financial analysts on Monday, May 16, 2011 at 11 am (Eastern Time) to discuss its results and those of Gaz Métro for the second quarter ended March 31, 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 page of the Investors 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: 4435838#). 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 $3.6 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 more than 180,000 customers in Quebec and 40,000 customers in Vermont, who choose natural gas for its competitive price, efficiency, comfort and environmental benefits. Gaz Métro is also present in the electricity distribution market, with more than 95,000 customers in Vermont, and is involved in 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, 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 and Gaz Métro to differ significantly from the results discussed in the forward-looking statements, including, but not limited to, with respect to Valener and Gaz Métro, the decisions rendered by regulatory agencies, general economic conditions, the competitiveness of natural gas in relation to other energy sources, the reliability of natural gas supply, the reliability of electricity supply, the integrity of the natural gas distribution system, exchange rate fluctuations, progress on development projects such as the Seigneurie de Beaupré wind power projects, and with respect to Valener alone, the uncertainty related to future dividend payments, the uncertainty related to Valener's capacity to finance its share in the development of the Seigneurie de Beaupré wind power projects, and other factors described in the "Risk Factors of the Company" and "Risk Factors of the Partnership" sections of Valener's Management's Discussion and Analysis for the year ended September 30, 2010 and in Valener's and Gaz Metro's 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, and the other assumptions described in Valener's Management's Discussion and Analysis for the second quarter ended March 31, 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 only be considered as complementary information.

HIGHLIGHTS
VALENER INC. 3 months ended March 31   6 months ended March 31
(in millions of dollars, except for share data, which is in dollars) 2011         2011    
  (unaudited)         (unaudited)    
             
CONSOLIDATED INCOME AND CASH FLOWS              
Share in earnings of Gaz Métro Limited Partnership $ 31.4         $ 49.0    
Net income $ 22.4         $ 33.5    
Cash flows related to operating activities $ 11.0         $ 9.5    
Basic and diluted net income per share $ 0.60         $ 0.91    
Dividends declared per share to shareholders of record on December 30, 2010 and on March 31, 2011 $ 0.25         $ 0.50    
Weighted average number of shares outstanding (in millions)   37.3           36.9    
OTHER INFORMATION                  
Market prices on Toronto Stock Exchange (TSX):                  
  High $ 17.29         $ 18.37    
  Low $ 16.25         $ 16.25    
  Close $ 16.76         $ 16.76    
CONSOLIDATED BALANCE SHEETS              
            March 31,
2011
  September 30,
2010
            (unaudited)   (audited)
               
Total assets           $ 698.0   $ 631.3
Shareholders' equity           $ 634.7   $ 589.1
Shareholders' equity per share           $ 17.02   $ 16.86
GAZ MÉTRO LIMITED PARTNERSHIP 3 months ended March 31   6 months ended March 31
(in millions of dollars, except for unit data, which is in dollars) 2011   2010   2011   2010
  (unaudited)   (unaudited)   (unaudited)   (unaudited)
CONSOLIDATED INCOME AND CASH FLOWS                      
Revenues $ 734.5   $ 739.2   $ 1,312.3   $ 1,341.9
Net income $ 108.2   $ 103.9   $ 168.9   $ 182.0
Adjusted net income (1) $ 108.2   $ 104.0   $ 168.9   $ 183.1
Cash flows related to operating activities (before non-cash working capital items) $ 196.7   $ 164.9   $ 328.7   $ 314.0
Purchases of property, plant and equipment $ 31.2   $ 29.4   $ 70.0   $ 67.7
Changes in deferred charges and credits and intangible assets $ 27.3   $ 39.0   $ 65.6   $ 65.8
Basic and diluted net income per unit $ 0.86   $ 0.86   $ 1.34   $ 1.51
Basic and diluted adjusted net income per unit (1) $ 0.86   $ 0.86   $ 1.34   $ 1.52
Distributions declared per unit to Partners of record on December 15 and on March 15  $ 0.28   $ 0.31   $ 0.56   $ 0.62
Weighted average number of units outstanding (in millions)   126.3     120.5     126.1     120.5
OTHER INFORMATION              
Authorized rate of return on deemed common equity
(Quebec distribution activity) (2)
              9.09 %     9.20 %
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              
              March 31,
2011
  September 30,
2010
              (unaudited)   (audited)
               
Total assets             $ 3,610.3   $ 3,666.6
Total debt             $ 1,623.6   $ 1,858.6
Partners' equity             $ 1,117.6   $ 932.6
(1)      Adjusted to exclude a $0.1 million unfavourable non-monetary adjustment related to future income taxes for the second quarter of fiscal 2010 ($1.1 million unfavourable adjustment for the first six months of fiscal 2010). Since September 30, 2010, as a result of its reorganization, Gaz Métro no longer has to account for future income tax adjustments.
(2)   Including the sharing of productivity gains, if applicable, and excluding the Global Energy Efficiency Plan (GEEP) incentive.
(3)   Through its General Partner, Gaz Métro inc.

 

 

SOURCE VALENER INC.

For further information:

Investors and Analysts     
Caroline Warren
Investor relations
514-598-3324
www.valener.com
        Media
Jean Charles Robillard  
Media and Public Relations  
514-719-8201
www.valener.com

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VALENER INC.

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