TC PipeLines, LP Announces 2015 Third Quarter Financial Results
Agrees to purchase a 49.9% interest in Portland Natural Gas Transmission from TransCanada
(firmenpresse) - HOUSTON, TEXAS -- (Marketwired) -- 11/06/15 -- TC PipeLines, LP (NYSE: TCP) (the Partnership) today reported third quarter 2015 distributable cash flow of $68 million and net income attributable to controlling interests of $49 million.
"We are very pleased to announce that the Partnership has agreed to acquire a 49.9 percent interest in Portland Natural Gas Transmission System from TransCanada. The pipeline system is strategically located in the northeastern United States and serves New England's growing energy needs," said Steve Becker, President of the General Partner. "This transaction is another in a series of expected dropdowns from TransCanada and again demonstrates our strategy of investing in assets that provide stability and long-term value to our unitholders."
"Our existing assets performed very well during the quarter, generating increased earnings and cash flows compared to the same quarter in 2014," continued Becker. "This solid performance, together with the accretion from dropdowns, reaffirms our expectation that we will continue to increase the annual distribution at least at a 6 percent rate for the next 2 to 3 years."
Third Quarter 2015 Highlights (All financial figures are unaudited)
The Partnership's financial highlights for the third quarter of 2015 compared to the third quarter of 2014 were:
Recent Developments
PNGTS Acquisition - On November 5, 2015, we entered into an agreement with TransCanada to acquire a 49.9 percent interest in the PNGTS for $223 million including approximately $35 million in proportionate PNGTS debt. PNGTS is a high-capacity, high-pressure interstate natural gas pipeline which began serving New England's energy needs in March 1999. The pipeline connects with the TransQuebec and Maritimes Pipeline at the Canadian border and shares facilities with the Maritimes and Northeast Pipeline from Westbrook, Maine to a connection with the Tennessee Gas Pipeline System near Boston, Massachusetts. The purchase agreement also provides for additional payments to TransCanada ranging from $5 million up to a total of $50 million if pipeline capacity is expanded to various thresholds during the 15-year period following the date of closing. The transaction is expected to close at the end of 2015. The Partnership plans to finance the acquisition with a combination of debt and equity.
The transaction was approved by the Board of Directors of the general partner, following approval and recommendation from the Board's conflicts committee, which is comprised entirely of independent directors. The conflicts committee engaged Deutsche Bank to act as its financial advisor, Morris, Nichols, Arsht & Tunnell, LLP as its legal counsel and Wood Mackenzie as its natural gas market outlook advisor.
Cash Distributions - On October 22, 2015, the board of directors of our General Partner declared the Partnership's third quarter 2015 cash distribution in the amount of $0.89 per common unit, payable on November 13, 2015 to unitholders of record as of November 3, 2015.
Term Loan Facility - On September 30, 2015, the Partnership refinanced its maturing $170 million short-term loan with a three-year term loan maturing on October 1, 2018. The outstanding principal bears interest based on the LIBOR plus an applicable margin.
Great Lakes - On October 15, 2015, Federal Energy Regulatory Commission approved a settlement regarding transportation service rates payable to Great Lakes, from its TransCanada affiliate, ANR Pipeline Company. As a result of the settlement, Great Lakes will recognize deferred transportation revenue of approximately $23 million in the fourth quarter of 2015, inclusive of approximately $9 million of revenue related to services performed in 2014.
GTN Carty Lateral- In October 2015, GTN placed the Carty Lateral in-service. The lateral was constructed in north- central Oregon to deliver natural gas to an electric generation facility owned by Portland General Electric Company. Portland General Electric Company has a 30-year contract for 100% of Carty Lateral's capacity and a 20-year GTN mainline contract for 75,000 dekatherms/day beginning in May 2016.
Results of Operations
For the three months ended September 30, 2015, net income attributable to controlling interests increased by $18 million compared to the same period in 2014. The increase was primarily due to:
EBITDA increased by $14 million compared to the same period in 2014. The increase was primarily due to:
Distributable cash flow increased by $16 million in the third quarter of 2015 compared to the same period in 2014 primarily due to the net effect of:
Non-GAAP Financial Measures
Effective September 30, 2015, we have presented the following non-GAAP financial measures:
EBITDA is an approximate measure of our operating cash flow during the current earnings period and reconciles directly to the net income amount presented. It measures our earnings before deducting interest, depreciation and amortization, net income attributable to non-controlling interests, distributions allocable to the General Partner and Class B units, and it includes earnings from our equity investments.
Total distributable cash flow and distributable cash flow provide measures of distributable cash generated during the current earnings period and reconcile directly to the net income amount presented.
Total distributable cash flow includes EBITDA plus:
Distributable cash flow is computed net of distributions declared to the General Partner and distributions allocable to Class B units. Distributions declared to the General Partner are based on its effective two percent interest plus an amount equal to incentive distributions. Distributions allocable to the Class B units equal 30 percent of GTN's distributable cash flow for the six months ended September 30, 2015 less $15 million.
Distributable cash flow information and EBITDA are presented to assist investors' in evaluating our business performance. We believe these measures provide additional meaningful information in evaluating our financial performance and cash distribution capability. As well, management uses these measures as a basis for recommendations to our General Partner's board of directors regarding the distribution amount to be declared each quarter.
The non-GAAP financial measures presented as part of this release are provided as a supplement to GAAP financial results and are not meant to be considered in isolation or as substitutes for financial results prepared in accordance with GAAP. Additionally, these measures as presented may not be comparable to similarly titled measures of other companies.
Conference Call
Analysts, members of the media, investors and other interested parties are invited to participate in a teleconference by calling 866.225.6564 on Friday, November 6, 2015 at 10:00 a.m. central time (CT)/11:00 a.m. eastern time (ET). Steve Becker, President of the General Partner, will discuss the third quarter financial results and provide an update on the Partnership's business, followed by a question and answer session for the investment community and media. Please dial in 10 minutes prior to the start of the call. No pass code is required. A live webcast of the conference call will also be available through the Partnership's website at . Slides for the presentation will be posted on the Partnership's website under "Events and Presentations" prior to the webcast.
A replay of the teleconference will also be available two hours after the conclusion of the call and until 11 p.m. (CDT) and midnight (EDT) on November 13, 2015, by calling 800.408.3053, then entering pass code 5111484.
TC PipeLines, LP is a Delaware master limited partnership with interests in six federally regulated U.S. interstate natural gas pipelines which serve markets in the Western and Midwestern United States. The Partnership is managed by its general partner, TC PipeLines GP, Inc., a subsidiary of TransCanada Corporation (NYSE: TRP). For more information about TC PipeLines, LP, visit the Partnership's website at .
Forward-Looking Statements
Certain non-historical statements in this release relating to future plans, projections, events or conditions are intended to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on current expectations and, therefore, subject to a variety of risks and uncertainties that could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release, including, without limitation, the timing, structure and closing of future dropdowns of TransCanada's remaining U.S. natural gas pipeline assets and the ability of these assets to generate ongoing value to our unitholders, competitive conditions in the natural gas industry, increases in operating and compliance costs, the outcome of rate proceedings, our ability to identify and complete expansion and growth opportunities, operating hazards beyond our control, availability of capital and market demand that the Partnership expects or believes will or may occur in the future. These and other factors that could cause future results to differ materially from those anticipated are discussed in Item 1A in our Annual Report on Form 10-K for the year-ended December 31, 2014 filed with the Securities and Exchange Commission (the SEC), as updated and supplemented by subsequent filings with the SEC. All forward-looking statements are made only as of the date made and except as required by applicable law, we undertake no obligation to update any forward-looking statements to reflect new information, subsequent events or other changes.
Contacts:
Media Inquiries:
Mark Cooper/Davis Sheremata
403.920.7859 or 800.608.7859
Unitholder and Analyst Inquiries:
Rhonda Amundson
877.290.2772
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Datum: 06.11.2015 - 12:30 Uhr
Sprache: Deutsch
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