Fort Chicago announces 2010 first quarter results and updated 2010 guidance

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

Trading Symbol: FCE.UN

Exchange: TSX

CALGARY, April 29 /CNW/ - Fort Chicago Energy Partners L.P. ("Fort Chicago" or "the Partnership") today announced its results for the three months ended March 31, 2010. Mr. Stephen H. White, President and Chief Executive Officer commented, "The continued strength of the NGL business environment resulted in record first quarter results from Aux Sable and a significant contribution to Fort Chicago's earnings and cash flows."

Highlights for the Three Months ended March 31, 2010

    
    -   Net income and adjusted net income of $14.1 million or $0.10 per Unit
    -   Distributable cash of $31.7 million or $0.23 per Unit
    -   Cash from operating activities of $66.3 million
    -   Aux Sable generated $24.9 million of margin-based lease revenues, of
        which $11.9 million was recognized in the first quarter
    -   Alliance interconnection with Prairie Rose Pipeline placed into
        operation, resulting in high heat content natural gas from the Bakken
        region being delivered to Aux Sable's Channahon facility
    -   Acquisition of Glen Park, a 33 MW hydro-power generation facility,
        completed

    Financial Highlights
    -------------------------------------------------------------------------
                                                          Three months ended
                                                                    March 31
    -------------------------------------------------------------------------
    ($ Thousands, except per Unit amounts)               2010           2009
    -------------------------------------------------------------------------
    Revenues
    Pipeline(1)                                       100,398        105,748
    NGL                                                37,631         21,541
    Power                                              21,948         22,939
    Fort Chicago - Corporate                                -            576
    -------------------------------------------------------------------------
                                                      159,977        150,804
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net income (loss) before tax
    Pipeline                                           24,579         27,961
    NGL                                                 9,390         (2,540)
    Power                                               1,380         (1,986)
    Fort Chicago - Corporate                          (17,228)       (11,406)
    -------------------------------------------------------------------------
                                                       18,121         12,029
    Tax expense                                        (4,047)          (725)
    -------------------------------------------------------------------------
    Net income                                         14,074         11,304
      Per Unit ($)                                       0.10           0.08
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Adjustments to net income for non-recurring
     (gains) losses (net of tax)
      Power - Fair value loss reclassified from
       other comprehensive income                           -          2,288
    -------------------------------------------------------------------------
    Adjusted net income(2)                             14,074         13,592
      Per Unit ($)                                       0.10           0.10
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) Net of intersegment eliminations.
    (2) This item is not a standard measure under GAAP and may not be
        comparable to similar measures presented by other entities. See
        reconciliation of adjusted net income to net income in the schedules
        attached to this news release. For more information about non-GAAP
        measures used by Fort Chicago, see the section entitled "Non-GAAP
        Financial Measures" contained in Fort Chicago's March 31, 2010
        Management's Discussion and Analysis.
    

For the three months ended March 31, 2010, Fort Chicago generated net income of $14.1 million or $0.10 per Unit compared to $11.3 million or $0.08 per Unit for the same period in 2009. The increase was primarily driven by significantly higher earnings from Aux Sable, which benefited from the continued strength of NGL market conditions. Aux Sable generated $24.9 million of margin-based lease revenues, a first quarter record for Aux Sable, of which $11.9 million was recognized in first quarter earnings. Barring a significant downward shift in NGL market conditions, the Partnership expects Aux Sable will recognize the remaining $13.0 million of margin-based lease revenues over the balance of this year. In comparison, Aux Sable generated $4.7 million of margin-based lease revenues during the first quarter of 2009, none of which could be recognized during the period.

Earnings from the Partnership's power business also increased compared to the first quarter of 2009, primarily due to the recognition of a non-cash fair value gain recorded in relation to Fort Chicago Power's exchangeable debentures, coupled with the effect of last year's $2.4 million pre-tax fair value loss related to the Partnership's investment in Pristine Power Inc. ("Pristine"). Power earnings for the first quarter of 2010 also reflect increased results from NRGreen and contributions from the Partnership's new power assets, the East Windsor cogeneration facility, which commenced operations in November 2009, and the Glen Park hydro-power facility, acquired on March 18, 2010. These increases were partially offset by the effect of the stronger Canadian dollar and by lower energy margins at Fort Chicago Power's California cogeneration facilities, due to the new Short Run Avoided Cost energy reimbursement formula ("SRAC") which came into effect in August 2009.

Earnings from the Partnership's pipeline businesses, Alliance and AEGS, were relatively consistent with the same period last year, although Alliance's U.S.-generated earnings were impacted by the effect of the stronger Canadian dollar.

The Partnership incurred higher corporate costs during the first quarter of 2010, reflecting increased interest costs related to the Partnership's July 2009 issuance of senior notes, project development costs, and foreign exchange losses previously deferred and recorded in other comprehensive income. Increased taxes in the first quarter of 2010 correspond with the increase in Aux Sable's earnings this period.

For the three months ended March 31, 2010, net income equaled adjusted net income. During the same period last year, net income was adjusted for the fair value decrease of Fort Chicago's investment in Pristine, considered non-recurring, resulting in adjusted net income of $13.6 million or $0.10 per Unit.

    
    -------------------------------------------------------------------------
                                                          Three months ended
                                                                    March 31
    -------------------------------------------------------------------------
    ($ Thousands, except per Unit amounts)               2010           2009
    -------------------------------------------------------------------------
    Distributable cash(1)
      Pipeline                                         33,961         34,633
      NGL                                              10,787           (775)
      Power                                             1,782          5,062
      Fort Chicago - Corporate                         (9,360)        (7,872)
      Taxes                                            (5,461)           (38)
    -------------------------------------------------------------------------
                                                       31,709         31,010
    -------------------------------------------------------------------------
        Per Unit                                         0.23           0.23
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Cash from operating activities                     66,267         44,380
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) This item is not a standard measure under GAAP and may not be
        comparable to similar measures presented by other entities. See
        reconciliation of distributable cash to cash from operating
        activities in the schedules attached to this news release. For more
        information about non-GAAP measures used by Fort Chicago, see the
        section entitled "Non-GAAP Financial Measures" contained in Fort
        Chicago's March 31, 2010 Management's Discussion and Analysis.
    

Distributable cash for the three months ended March 31, 2010 was $31.7 million or $0.23 per Unit, which approximated amounts generated for the same period in 2009, reflecting:

    
    -   consistent distributions from Alliance as higher income tax
        recoveries were offset by the effect of the stronger Canadian dollar;
    -   comparable distributable cash from AEGS;
    -   higher distributions from Aux Sable, reflecting continued strength in
        NGL markets;
    -   lower distributable cash from Fort Chicago Power, reflecting lower
        energy margins at the California cogeneration facilities and the
        effect of the stronger Canadian dollar;
    -   lower corporate general and administrative costs;
    -   increased corporate interest costs, due primarily to the senior notes
        issued in July 2009; and
    -   increased current taxes related to Aux Sable's first quarter 2010
        earnings.

    Fort Chicago generated cash from operating activities of $66.3 million for
the three months ended March 31, 2010, a $21.9 million increase from the same
period last year, due primarily to:

    -   increased cost of service recoveries from Alliance;
    -   increased operating cash flows from Aux Sable; and
    -   lower corporate income tax payments.
    

Operating Highlights

During the three months ended March 31, 2010, the Alliance pipeline continued to operate in a reliable manner, fully meeting its contracted 1.325 billion cubic feet per day of firm-service shipping capacity. Actual transportation deliveries averaged 1.680 bcf/d, a slight decrease from volumes of 1.690 bcf/d delivered during the same period last year. In February 2010, Pecan Pipeline (North Dakota) Inc. ("Pecan"), a subsidiary of EOG Resources Inc., completed construction of a gathering pipeline connecting to a new gas receipt point on the Alliance pipeline, to bring rich gas from the Bakken formation on to the Alliance system for delivery to Aux Sable's Channahon facility. Pecan holds a 10-year firm transportation contract with Alliance for an initial contracted capacity of 40 mmcf/d for the first year, increasing to 80 mmcf/d for the remainder of the contract term.

AEGS first quarter toll volumes of 283.7 thousand barrels per day decreased slightly relative to 284.1 mbbls/d in the same period last year, due primarily to lower gas flows across Alberta during the quarter, which limited ethane production.

During the three months ended March 31, 2010, Aux Sable processed nearly 100 percent (2009 - 93 percent) of the natural gas delivered by Alliance. There was no downtime for maintenance in the first quarter of 2010, while minor maintenance was performed in the same period in 2009. After performing detailed external assessments of remaining facilities to be internally inspected, Aux Sable has determined it will complete required inspection work in 2011. Aux Sable sold 76.7 mbbls/d of natural gas liquids during the first quarter of 2010, up from 53.9 mbbls/d for the same period in 2009. Average ethane volumes increased to 45.0 mbbls/d in the first quarter of 2010 from 22.4 mbbls/d in the first quarter of 2009 due to higher ethane recoveries. As a result of weak market conditions in the first six weeks of 2009, Aux Sable reinjected ethane for that period.

Fort Chicago Power generated 87,510 megawatt hours of electricity, down from 182,686 MWh during the same period last year, primarily reflecting reduced dispatch at the California cogeneration facilities. Under the new SRAC, it is less economic to dispatch these facilities during non-peak periods.

Planning is underway for the Partnership's conversion to a taxable Canadian corporation by January 1, 2011. A special Unitholder meeting will be held in the fourth quarter of 2010 to approve the conversion.

Updated 2010 Guidance

Fort Chicago today updated its guidance for 2010 distributable cash to be in the range of $0.95 per Unit to $1.40 per Unit, up from previously issued guidance of $0.85 per Unit to $1.30 per Unit. The updated range reflects Aux Sable's strong year-to-date performance and the anticipation of continued favourable market fundamentals. Further, Aux Sable's decision to complete inspection work in 2011 instead of 2010 is expected to have a positive impact on forecasted 2010 production levels, earnings and cash flows. The updated guidance range also reflects the assumption of a stronger Canadian dollar relative to previous assumptions. Further details concerning 2010 guidance can be found in the "Investor Information" section of Fort Chicago's website - www.fortchicago.com.

Conference Call

Fort Chicago Energy Partners L.P. will hold a conference call at 9:00 a.m. Mountain time (11:00 a.m. Eastern time) on Friday, April 30, 2010 to discuss the 2010 first quarter results. The call can be accessed at 1-888-231-8191 or 1-647-427-7450 (conference ID 68223314).

A replay will be available shortly thereafter at 1-800-642-1687 and 1-416-849-0833. The access code is 68223314 (followed by the pound sign).

Fort Chicago is a publicly traded limited partnership based in Calgary, Alberta, that owns and operates energy infrastructure assets across North America. Its Class A Units are listed on the TSX under the symbol FCE.UN. Fort Chicago 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; an NGL extraction business which includes a significant interest in a world-class extraction facility near Chicago; and a power business with cogeneration facilities in Ontario, Colorado and California, district energy systems in Ontario and Prince Edward Island, a hydro generation facility in upstate New York, and waste heat power facilities along the Alliance Pipeline. Fort Chicago and its businesses are also actively developing a number of greenfield investment opportunities that will be a key source of future growth, including LNG and pipeline facilities on the U.S. west coast, Alberta-based ethane and NGL extraction facilities, repowering and expansion opportunities at the California power facilities and a Nova Scotia-based underground natural gas storage and pipeline facilities.

    
                     Class A Unit Ownership Restrictions
    

Fort Chicago is organized in accordance with the terms and conditions of a limited partnership agreement which provides that no Class A Units may be transferred to, among other things, a person who is a "non-resident" of Canada, a person in which an interest would be a "tax shelter investment" or a partnership which is not a "Canadian partnership" for purposes of the Income Tax Act (Canada).

Certain information contained herein relating to, but not limited to, Fort Chicago 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 Fort Chicago 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 Aux Sable to recognize margin-based lease revenues over the balance of the year; the timing of inspection work to be performed at Aux Sable's Channahon facility; and the ability of each of its businesses to generate distributable cash in 2010. The risks and uncertainties that may affect the operations, performance, development and results of Fort Chicago's businesses include, but are not limited to, the following factors: the ability of Fort Chicago 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; Fort Chicago's ability to successfully obtain regulatory approvals; changes in tax, regulatory, environmental, and other laws and regulations; competitive factors in the pipeline, NGL 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 Fort Chicago'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 Fort Chicago 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. Fort Chicago 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 Fort Chicago 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 Canada 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 Canada. For further information on non-GAAP financial measures used by Fort Chicago 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 Fort Chicago with Canadian securities regulators.

    
    Fort Chicago Energy Partners L.P.
    -------------------------------------------------------------------------

    Consolidated Statement of Financial Position
    -------------------------------------------------------------------------
                                                     March 31,   December 31,
    ($ Thousands; unaudited)                             2010           2009
    -------------------------------------------------------------------------

    Assets
    Current assets
      Cash and short-term investments                  80,780         57,945
      Restricted cash                                   1,306          3,084
      Transportation security deposits and
       revenue adjustments                              6,871          8,538
      Receivables                                      63,742         59,155
      Inventory                                         5,468          5,071
      Prepaid expenses and other                       13,947          9,848
    -------------------------------------------------------------------------
                                                      172,114        143,641

    Long-term receivables                             346,689        351,629
    Pipeline, plant and other capital assets        2,282,249      2,286,255
    Intangible assets                                  92,992         59,647
    Other assets                                       23,504         23,727
    -------------------------------------------------------------------------
                                                    2,917,548      2,864,899
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities
    Current liabilities
      Payables                                        112,177         91,264
      Transportation security deposits                  3,385          4,008
      Distribution payable                              3,931          6,406
      Current portion of long-term senior debt        168,436        145,014
      Subordinated convertible debentures and
       exchangeable debentures                         47,671         49,302
    -------------------------------------------------------------------------
                                                      335,600        295,994

    Long-term senior debt                           1,567,638      1,534,689
    Future taxes                                      284,093        291,279
    Other long-term liabilities                        39,912         44,211
    -------------------------------------------------------------------------
                                                    2,227,243      2,166,173
    -------------------------------------------------------------------------

    Partners' Equity
    Partners' capital account                       1,077,334      1,057,239
    Cumulative other comprehensive loss               (62,202)       (54,624)
    Cumulative net income                             597,792        583,718
    Cumulative distributions                         (922,619)      (887,607)
    -------------------------------------------------------------------------
                                                      690,305        698,726
    -------------------------------------------------------------------------
                                                    2,917,548      2,864,899
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Fort Chicago Energy Partners L.P.
    -------------------------------------------------------------------------

    Consolidated Statement of Income and Cumulative Income
    -------------------------------------------------------------------------
                                                 Three months ended March 31
    -------------------------------------------------------------------------
    ($ Thousands, except per Unit amounts;
     unaudited)                                          2010           2009
    -------------------------------------------------------------------------
    Revenues
      Operating revenues                              159,513        148,820
      Interest and other                                  464          1,984
    -------------------------------------------------------------------------
                                                      159,977        150,804
    -------------------------------------------------------------------------
    Expenses
      Operations and maintenance                       53,941         51,273
      Depreciation and amortization                    33,785         36,245
      Interest and other finance                       27,612         26,126
      General, administrative and project
       development                                     25,680         22,412
      Foreign exchange and other                          838          2,719
    -------------------------------------------------------------------------
                                                      141,856        138,775
    -------------------------------------------------------------------------
    Net income before taxes                            18,121         12,029
      Current taxes                                     5,562            102
      Future taxes                                     (1,515)           623
    -------------------------------------------------------------------------
    Net income                                         14,074         11,304
    Cumulative net income at the beginning of
     the period                                       583,718        546,143
    -------------------------------------------------------------------------
    Cumulative net income at the end of the period    597,792        557,447
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net income per Unit
      Basic and diluted                                  0.10           0.08
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Consolidated Statements of Comprehensive Income and Cumulative Other
    Comprehensive Income
    -------------------------------------------------------------------------
                                                 Three months ended March 31
    -------------------------------------------------------------------------
    ($ Thousands; unaudited)                             2010           2009
    -------------------------------------------------------------------------

    Net income                                         14,074         11,304
    Other comprehensive income (loss), net of taxes
      Cumulative translation adjustment
        Unrealized foreign exchange gain (loss) on
         translation of self-sustaining foreign
         operations                                    (9,947)        12,996
        Deemed realization of cumulative
         translation adjustment reclassified to
         net income                                     3,353            661
        Gain (loss) on hedge of self-sustaining
         foreign operation                                498         (3,560)
      Fair value loss transferred to net income             -          1,427
      Other                                            (1,482)           262
    -------------------------------------------------------------------------
                                                       (7,578)        11,786
    -------------------------------------------------------------------------
    Comprehensive income                                6,496         23,090
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Cumulative other comprehensive loss at the
     beginning of the period                          (54,624)        (7,306)
    Other comprehensive income (loss), net of
     taxes                                             (7,578)        11,786
    -------------------------------------------------------------------------
    Cumulative other comprehensive income (loss)
     at the end of the period                         (62,202)         4,480
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Fort Chicago Energy Partners L.P.
    -------------------------------------------------------------------------

    Consolidated Statement of Cash Flows
    -------------------------------------------------------------------------
                                                 Three months ended March 31
    -------------------------------------------------------------------------
    ($ Thousands; unaudited)                             2010           2009
    -------------------------------------------------------------------------

    Operating
      Net income                                       14,074         11,304
      Non-cash transportation revenue                   1,048            431
      Depreciation, amortization and other
       non-cash items                                  28,964         34,552
      Unrealized foreign exchange loss (gain)             471           (223)
      Future taxes                                     (1,515)           623
      Changes in non-cash working capital              23,225         (2,307)
    -------------------------------------------------------------------------
                                                       66,267         44,380
    -------------------------------------------------------------------------
    Financing
      Long-term debt repaid                            (1,481)          (987)
      Net change in credit facilities                  72,543         18,990
      Distributions paid                              (17,401)       (33,515)
    -------------------------------------------------------------------------
                                                       53,661        (15,512)
    -------------------------------------------------------------------------
    Investing
      Acquisition of Northbrook New York, LLC,
       net of cash acquired                           (80,708)             -
      Pipeline, plant and other capital assets         (7,041)        (8,519)
      Restricted cash                                   1,763          7,620
      Other                                            (1,780)        (1,008)
      Changes in non-cash investing working capital    (8,821)        (7,215)
    -------------------------------------------------------------------------
                                                      (96,587)        (9,122)
    -------------------------------------------------------------------------
    Increase in cash and short-term investments
     before the effect of foreign exchange rate
     changes on cash and short-term investments        23,341         19,746
    Effect of foreign exchange rate changes on cash
     and short-term investments                          (506)           508
    Cash and short-term investments at the
     beginning of the period                           57,945         56,064
    -------------------------------------------------------------------------
    Cash and short-term investments at the end of
     the period                                        80,780         76,318
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Fort Chicago Energy Partners L.P.
    -------------------------------------------------------------------------

    Distributable Cash(1)
    -------------------------------------------------------------------------
                                                 Three months ended March 31
    -------------------------------------------------------------------------
    ($ Thousands, except where noted;
     unaudited)                                          2010           2009
    -------------------------------------------------------------------------

    Cash inflows
      Alliance distributions, prior to
       withholdings for capital expenditures and
       net of debt service                             30,426         30,888
      AEGS distributable cash, after
       non-recoverable capital expenditures and
       debt service                                     3,535          3,745
      Aux Sable distributions, net of support
       payments, non-recoverable debt service
       costs and maintenance capital                   10,787           (775)
      Fort Chicago Power distributable cash,
       after maintenance capital expenditures
       and debt service                                 1,217          4,622
      NRGreen distributions, prior to withholding
       for project development costs                      565            440
      Realized foreign exchange gains, interest
       income and other                                     -            656
    -------------------------------------------------------------------------
                                                       46,530         39,576
    Cash outflows
      General and administrative                        3,904          4,629
      Interest and other finance                        4,667          2,963
      Taxes                                             5,461             38
      Principal repayments on senior debt                 789            936
    -------------------------------------------------------------------------
                                                       14,821          8,566
    -------------------------------------------------------------------------

    Distributable cash(1)                              31,709         31,010
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Distributable cash per Unit ($)(2)                   0.23           0.23
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Distributions paid/payable(3)                      35,012         31,513
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Distributions paid/payable per Unit ($)              0.25           0.25
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) Distributable cash is not a standard measure under generally accepted
        accounting principles in Canada and may not be comparable to similar
        measures presented by other entities. Distributable cash represents
        the cash available to Fort Chicago for distribution to holders of
        Units after providing for debt service obligations and any capital
        expenditures that are not growth-oriented or recoverable but does not
        include distribution reserves, if any, available in Fort Chicago's
        jointly held businesses, or project development costs, which
        represent discretionary costs, the recoverability of which has not
        been established, incurred to assess the commercial viability of new
        greenfield business initiatives unrelated to the Partnership's
        operating businesses. Distributable cash is an important measure used
        by the investment community to assess the source and sustainability
        of Fort Chicago's cash distributions and should be used to supplement
        other performance measures prepared in accordance with generally
        accepted accounting principles in Canada. See the following table for
        the reconciliation of distributable cash to cash flow from operating
        activities.
    (2) The number of Units used to calculate distributable cash per Unit is
        based on the average number of Units outstanding at each record date.
        For the three months ended March 31, 2010, the average number of
        Units outstanding for this calculation was 140,101,723 (2009 -
        134,110,877) and 142,363,354 (2009 - 136,372,498) on a basic and
        diluted basis, respectively. The number of Units outstanding would
        increase by 2,261,621 (2009 - 2,261,621) Units if the outstanding
        Convertible Debentures as at March 31, 2010 were converted into
        Units.
    (3) Includes $20.1 million (2009 - $3.8 million) of distributions for the
        three months ended March 31, 2010 satisfied through the issuance of
        Units under the Partnership's Distribution Reinvestment Plan.



    Fort Chicago Energy Partners L.P.
    -------------------------------------------------------------------------

    Reconciliation of Distributable Cash to Cash Flow from Operating
    Activities
    -------------------------------------------------------------------------
                                                 Three months ended March 31
    -------------------------------------------------------------------------
    ($ Thousands; unaudited)                             2010           2009
    -------------------------------------------------------------------------

    Consolidated cash flow from operating
     activities                                        66,267         44,380
    Deduct: Cash flow generated from operating
     activities applicable to jointly held
     businesses(1)                                    (44,873)       (36,969)
    -------------------------------------------------------------------------
    Cash flow from operating activities
     applicable to wholly-owned businesses(2)          21,394          7,411

    Add (deduct) amounts applicable to
     wholly-owned businesses:
      Project development costs(3)                      4,499          2,764
      Change in non-cash working capital                4,610         16,953
      Principal repayments on senior notes             (1,446)        (1,564)
      Maintenance capital expenditures                   (867)          (213)
      Distributions earned greater than
       distributions received(4)                        3,519          5,659
    -------------------------------------------------------------------------

    Distributable cash                                 31,709         31,010
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    (1) Represents the cash flow from operating activities applicable to
        jointly held businesses which is not under the sole control of the
        Partnership and, as a consequence, is not included in distributable
        cash until such time as distributions are declared by the jointly
        held businesses.
    (2) Net of support payments made to Alliance Canada Marketing of $2.8
        million for the three months ended March 31, 2010 (2009 - $2.8
        million).
    (3) Represents costs incurred by the Partnership and its wholly-owned
        businesses in relation to projects where the recoverability of such
        costs has not yet been established. Amounts incurred for the three
        months ended March 31, 2010 relate primarily to the Jordan Cove LNG
        terminal project, the Pacific Connector Gas Pipeline project, and the
        Alton Gas Storage project.
    (4) Represents the difference between distributions declared by jointly
        held businesses and distributions received.



    Reconciliation of Adjusted Net Income(1) to Net Income
    -------------------------------------------------------------------------
                                                 Three months ended March 31
    -------------------------------------------------------------------------
    ($ Thousands; unaudited)                             2010           2009
    -------------------------------------------------------------------------

    Net income                                         14,074         11,304
    Adjustments to net income for non-recurring
     (gains) losses:
      Power - fair value loss reclassified from
       other comprehensive income(2)                        -          2,442
      Taxes(3)                                              -           (154)
    -------------------------------------------------------------------------

    Adjusted net income                                14,074         13,592
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) Adjusted net income is not a standard measure under generally
        accepted accounting principles in Canada and may not be comparable to
        similar measures presented by other entities. Adjusted net income
        represents net income adjusted for specific items that are
        significant, but are not reflective of Fort Chicago's underlying
        operations. Specific items are subjective, however, the Partnership
        uses its judgement and informed decision-making when identifying
        items to be included or excluded in calculating adjusted net income.
        Specific items may include, but are not limited to, certain income
        tax adjustments, bankruptcy settlements, gains or losses on sales of
        assets, certain fair value adjustments, and asset impairment losses.
        Fort Chicago believes its use of adjusted net income provides useful
        information to management and its investors by improving the ability
        to compare financial results among reporting periods, and by
        enhancing the understanding of its operating performance and ability
        to fund distributions.
    (2) Net income for the three months ended March 31, 2009 included a non-
        cash expense transferred from other comprehensive income to net
        income, representing the fair value decrease of the Partnership's
        investment in Pristine Power Inc. from Pristine's initial public
        offering in March 2008. As the Partnership considers such permanent
        decreases in the fair value of its investments to be non-typical, it
        has added this amount back to net income in arriving at adjusted net
        income.
    (3) Represents the related taxes on the adjusted item described above.
    

SOURCE Veresen Inc.

For further information: For further information: Stephen H. White, President and C.E.O., Richard G. Weech, Vice President, Finance and C.F.O., Fort Chicago Energy Partners L.P., Livingston Place, Suite 440, 222 - 3rd Avenue S.W., Calgary, AB, T2P 0B4, Phone: (403) 296-0140, Fax: (403) 213-3648, www.fortchicago.com

Organization Profile

Veresen Inc.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890