TC PipeLines, LP (NYSE: TCP) (the Partnership) today reported net
income attributable to controlling interests of $56 million and
distributable cash flow of $78 million for the three months ended
September 30, 2019.
“The Partnership’s assets performed well in the third quarter of
2019 and generated solid operational results, benefiting from
continued strong natural gas flows, mainly out of the Western
Canadian Sedimentary Basin, and from solid contracting levels
across our suite of assets,” said Nathan Brown, president of TC
PipeLines, GP, Inc. “We continued to maintain the common unit
distribution at 65 cents per unit and have utilized cash-on-hand to
reduce debt levels such that we have a healthy balance sheet which
positions us well to self-fund organic growth opportunities as they
arise.”
“Last week, we were pleased to announce the GTN XPress project,
our largest organic opportunity in TCP’s 20-year history. This
project includes a horsepower replacement program and a brownfield
expansion opportunity. The reliability work will enable increased
firm natural gas transportation on GTN which, together with the
growth component of the project, will sum to 250,000 Dth/d in
additional long-term contracts on the pipeline system,” continued
Brown. “This project was developed in response to shipper demand
for incremental transportation service and will enhance market
access for growing WCSB natural gas supplies and allow additional
market penetration in the Pacific Northwest. Ongoing development of
projects like GTN XPress and our PXP and Westbrook XPress
expansions in the Northeast continue to demonstrate our ability to
economically and efficiently expand our existing infrastructure
which we believe will create value for our customers and our
unitholders well into the future.”
Third quarter highlights
(unaudited)
- generated net income attributable to controlling interests of
$56 million
- paid cash distributions of $47 million
- declared cash distribution of $0.65 per common unit for the
third quarter of 2019
- generated EBITDA of $100 million and distributable cash flow of
$78 million
- announced the approximately $335 million GTN XPress project
which will transport approximately 250,000 Dth/day of additional
volumes in late 2023
- continued to progress our growth projects with Portland XPress
II and Westbrook XPress I in service November 1
- proceeding with $13 million Tuscarora XPress project
The Partnership’s financial highlights for the
third quarter of 2019 compared to the same period in 2018 were:
|
Three months ended |
|
Nine months ended |
(unaudited) |
September 30, |
|
September 30, |
(millions of dollars, except per common unit amounts) |
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Net income |
|
59 |
|
|
|
65 |
|
|
|
216 |
|
|
|
241 |
|
Net income attributable to
controlling interests |
|
56 |
|
|
|
62 |
|
|
|
204 |
|
|
|
231 |
|
Net income per common unit –
basic and diluted (a) |
$ |
0.76 |
|
|
$ |
0.79 |
|
|
$ |
2.79 |
|
|
$ |
3.11 |
|
|
|
|
|
|
|
|
|
Earnings before interest,
taxes, depreciation and amortization (EBITDA) (b) |
|
100 |
|
|
|
113 |
|
|
|
341 |
|
|
|
386 |
|
|
|
|
|
|
|
|
|
Cash distributions paid |
|
(47 |
) |
|
|
(47 |
) |
|
|
(142 |
) |
|
|
(171 |
) |
Class B distributions
paid |
|
- |
|
|
|
- |
|
|
|
(13 |
) |
|
|
(15 |
) |
Distributable cash flow
(b) |
|
78 |
|
|
|
83 |
|
|
|
264 |
|
|
|
296 |
|
|
|
|
|
|
|
|
|
Cash distribution declared per
common unit |
$ |
0.65 |
|
|
$ |
0.65 |
|
|
$ |
1.95 |
|
|
$ |
1.95 |
|
|
|
|
|
|
|
|
|
Weighted average
common units outstanding – basic and diluted (millions)
(c) |
|
71.3 |
|
|
|
71.3 |
|
|
|
71.3 |
|
|
|
71.3 |
|
|
|
|
|
|
|
|
|
Common units
outstanding, end of period (millions) (c) |
|
71.3 |
|
|
|
71.3 |
|
|
|
71.3 |
|
|
|
71.3 |
|
- Net income per common unit is computed by dividing net income
attributable to controlling interests, after deduction of net
income attributable to the General Partner, by the weighted average
number of common units outstanding. Refer to the “Financial
Summary-Consolidated Statements of Income” section of this
release.
- Distributable cash flow and EBITDA are non-GAAP financial
measures. Refer to the description of these non-GAAP financial
measures in the section of this release entitled “Non-GAAP
Measures” and the Supplemental Schedule for further detail.
- Under the at-the-market (ATM) program, no common units were
issued during the three and nine months ended September 30, 2019
(three and nine months ended September 30, 2018 – nil and 732,973
units issued).
Recent business
developments:
Cash distributions – On October 22, 2019, the board of directors
of our General Partner declared the Partnership’s third quarter
2019 cash distribution in the amount of $0.65 per common unit
payable on November 14, 2019 to unitholders of record as of
November 1, 2019. The declared distribution to our General Partner
was $1 million for its two percent general partner interest.
GTN XPress Project (GTN XPress) - On November 1, 2019, we
announced that GTN will move forward with the GTN XPress project
which will transport approximately 250,000 Dth/day of additional
volumes of natural gas enabled by TC Energy’s system expansions
upstream. The estimated total project cost of this integrated
reliability and expansion project is $335 million. The project’s
reliability work is anticipated to be in service by the end of 2021
and will account for more than three quarters of the total project
cost. These costs are expected to be recovered in recourse
rates. The project’s expansion work is anticipated to be
commercially phased into service through November 2023. GTN XPress
is 100 percent underpinned by fixed rate negotiated contracts with
an average term in excess of 30 years. The incremental capacity is
expected to generate approximately $25 million in revenue annually
when fully in service.
Tuscarora XPress Project (Tuscarora XPress) - Tuscarora XPress
is an estimated $13 million expansion project through additional
compression capability at an existing Tuscarora facility. Tuscarora
XPress is 100 percent underpinned by a 20-year contract and will
transport approximately 15,000 Dth/day of additional volumes when
completed in November 2021. Tuscarora XPress is expected to
generate approximately $2 million in revenue on an annualized basis
when fully in service.
Results of operations
The Partnership’s net income attributable to
controlling interests decreased by $6 million in the three months
ended September 30, 2019 compared to the same period in 2018,
mainly due to the following:
Transmission revenues – Revenues were lower due largely to the
decrease in revenue from Bison. During the fourth quarter of 2018,
two of Bison’s customers elected to pay out the remainder of their
contracted obligations on Bison and terminate the associated
transportation agreements. Revenues were also impacted by the
following:
- higher revenue on GTN primarily due to the one-time $9 million
charge against revenue in the third quarter of 2018 related to the
2018 settlement with its shippers which did not apply in the third
quarter 2019, partially offset by the impact of its scheduled 10
percent rate decrease effective January 1, 2019;
- higher revenue from PNGTS primarily due to higher discretionary
services due to an unseasonably warm summer and power generation
demands in addition to new revenues from Phase I of its Portland
XPress (PXP) project that went into service November 1, 2018,
partially offset by lower contracted revenue as a result of the
expiration of its legacy recourse rate firm contracts;
- lower short-term firm transportation services sold by North
Baja; and
- lower revenue on Tuscarora due to its scheduled 10.8 percent
rate decrease effective August 1, 2019 as part of the settlement
reached with its customers in 2019.
Equity earnings - The $3 million decrease was
primarily due to the following:
- decrease in equity earnings from Great Lakes as a result of an
increase in operating costs related to compliance programs and
estimated costs related to right-of-way renewals combined with an
increase in allocated management costs from TC Energy; and
- decrease in Iroquois’ equity earnings as a result of the
scheduled reduction of its existing rates as part of the 2019
settlement with shippers.
Operation and maintenance expenses - The increase in operation
and maintenance expenses was primarily due to an overall net
increase in:
- operational costs related to our pipeline systems' compliance
programs; and
- increase in TC Energy’s allocated costs related to corporate
support functions and common costs such as insurance.
Depreciation – The decrease in depreciation expense was a direct
result of the elimination of Bison’s depreciable base during the
fourth quarter of 2018.
Financial charges and other - The $3 million decrease was
primarily attributable to the full repayment of our $170 million
term loan during the fourth quarter of 2018, together with a $115
million reduction of our overall debt balance year-to-date which
included a net $40 million repayment of borrowings under our Senior
Credit Facility during the first quarter of 2019 and a $50 million
payment on our 2013 term loan facility during the second quarter of
2019.
EBITDA was lower for the third quarter of 2019 compared to the
same period in 2018. The $13 million decrease was primarily due to
lower revenue and equity earnings and higher operation and
maintenance expenses during the period, as discussed above.
Our distributable cash flow decreased by $5 million in the third
quarter of 2019 compared to the same period in 2018 due to the net
effect of:
- lower EBITDA from our consolidated subsidiaries;
- higher maintenance capital expenditures related to major
compression equipment overhauls and pipe integrity costs on GTN as
a result of higher transportation volumes of natural gas;
- lower Class B allocation due to the increase in maintenance
capital expenditures which reduced the distributable cash flow
generated by GTN;
- lower interest expense due to the full repayment of the $170
million term loan during the fourth quarter of 2018 and the
repayment of borrowings under our senior credit facility and term
loan facility in the first half of 2019;
- lower distributions from Great Lakes resulting from decreased
earnings and increased maintenance capital spending; and
- additional distribution received from Iroquois due to the
surplus cash it accumulated from the previous year's higher net
income.
Cash flow analysis
Operating cash flows
In the nine months ended September 30, 2019, the Partnership’s
net cash provided by operating activities decreased by $10 million
compared to the same period in 2018 primarily due to the net effect
of:
- increase in distributions received from equity investments as a
result of:
- lower maintenance capital spending during the nine months ended
September 30, 2019 on Northern Border;
- net higher earnings generated by Northern Border and Great
Lakes compared to the same period in the prior year;
- increase in distributions from Iroquois related to cash
generated from prior years’ operating activities;
- lower net cash flow from operations of our consolidated
subsidiaries primarily due to the decrease in revenue from Bison,
North Baja and Tuscarora partially offset by an increase in PNGTS’
revenue; and
- impact from amount and timing of operating working capital
changes.
Investing cash flows
During the nine months ended September 30, 2019, the cash
provided by our investing activities was a net cash inflow of $1
million compared to a net outflow of $24 million in the same period
in 2018 primarily due to the net impact of the following:
- $50 million distribution received from Northern Border that was
considered a return of investment during the second quarter of
2019;
- $4 million equity contribution to Iroquois representing the
Partnership’s 49.34 percent share of a $7 million cash call from
Iroquois to cover costs of regulatory approvals related to their
capital project; and
- higher capital maintenance expenditures on GTN for reliability
projects together with continued capital spending on our PXP
project.
Financing cash flows
The Partnership’s net cash used for financing activities was
approximately $27 million lower in the nine months ended
September 30, 2019 compared to the same period in 2018
primarily due to the net effect of:
- $42 million decrease in net debt repayments;
- $29 million decrease in distributions paid to common
unitholders as a result of a lower per unit distribution paid
beginning in second quarter 2018 in response to the 2018 FERC
Actions;
- $7 million increase in distributions paid to non-controlling
interests during the nine months ended September 30, 2019;
- $2 million decrease in distributions paid to Class B units in
2019 as compared to 2018; and
- no ATM equity issuances in 2019 year-to-date.
At September 30, 2019, our cash and cash equivalents balance was
higher than at December 31, 2018 by approximately $57 million and
our debt balance was lower by $115 million, $83 million of which
was reduced during the second quarter. As of November 7, 2019, the
available borrowing capacity under our Senior Credit Facility is
$500 million. We believe our cash position, remaining borrowing
capacity on our Senior Credit Facility, and our operating cash
flows are sufficient to fund our short-term liquidity requirements,
including distributions to our unitholders, ongoing and planned
capital expenditures and required debt repayments. As our GTN
XPress project progresses, we anticipate funding the Partnership's
share of the required capital using cash on hand and drawings under
the senior credit facility, if required.
Non-GAAP financial
measures
The following non-GAAP financial measures are
presented as a supplement to our financial statements:
- EBITDA
- Total distributable cash flow
- Distributable cash flow
EBITDA is an approximate measure of our operating cash flow
during the current earnings period and reconciles directly to the
most comparable measure of net income. It measures our earnings
before deducting interest, depreciation and amortization, taxes,
net income attributable to non-controlling interests, and 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 amounts presented.
Total distributable cash flow includes EBITDA
plus:
- distributions from our equity
investmentsless:
- earnings from our equity investments,
- equity allowance for funds used during construction (if
any),
- interest expense,
- income taxes,
- distributions to non-controlling interests, and
- maintenance capital expenditures from consolidated
subsidiaries.
Distributable cash flow is computed net of distributions
declared to the General Partner and any distributions allocable to
Class B units. Distributions declared to the General Partner are
based on its two percent interest plus, if applicable, an amount
equal to incentive distributions. Distributions allocable to the
Class B units equal 30 percent of GTN’s distributable cash flow for
the year ending December 31, 2019 less $20 million (2018 - less $20
million) and, if required, the percentage by which distributions
payable to common units were reduced (Class B Reduction). The Class
B Reduction was implemented during the first quarter of 2018
following the Partnership’s common unit distribution reduction of
35 percent. The Class B Reduction will apply to any calendar year
during which distributions payable in respect of common units for
such calendar year are less than $3.94 per common unit.
The non-GAAP financial measures described above are performance
measures presented to assist investors in evaluating our business
performance. We believe these measures provide additional
meaningful information in evaluating our financial performance
and cash generating capacity.
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.
For a reconciliation of these non-GAAP financial measures to
GAAP measures, please see the table captioned "Reconciliation of
Net income to Distributable Cash Flow” included at the end of this
release.
Conference call
Members of the investment community and other interested parties
are invited to participate in a teleconference by calling
800.377.0758 on Thursday, November 7, 2019 at 10:00 a.m. CST/11:00
a.m. EST. Nathan Brown, President of the General Partner, along
with other members of management, will discuss the Partnership’s
third quarter financial results and provide an update on the
Partnership’s business, followed by a question and answer session.
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
http://www.tcpipelineslp.com/events-and-presentations.html or via
the following URL: http://www.gowebcasting.com/10365. 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. CST and midnight
EST on November 14, 2019, by calling 800.408.3053, then entering
pass code 8347750#.
About TC PipeLines, LP
TC PipeLines, LP is a Delaware master limited partnership with
interests in eight federally regulated U.S. interstate natural gas
pipelines which serve markets in the Western, Midwestern and
Northeastern United States. The Partnership is managed by its
general partner, TC PipeLines GP, Inc., a subsidiary of TC Energy
Corporation (NYSE: TRP). For more information about TC PipeLines,
LP, visit the Partnership’s website at www.tcpipelineslp.com.
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”. 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 to the
ability of these assets to generate ongoing value to our
unitholders, impact of potential impairment charges, decreases in
demand on our pipeline systems, increases in operating and
compliance costs, the outcome of rate proceedings, the impact of
recently issued and future accounting updates and other changes in
accounting policies, potential changes in the taxation of MLP
investments by state or federal governments such as the elimination
of pass-through taxation or tax deferred distributions, our ability
to identify and complete expansion and growth opportunities,
operating hazards beyond our control, and our ability to access
debt and equity markets that negatively impacts the
Partnership’s ability to finance its capital spending. 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, 2018 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.
Media
enquiries:
Hejdi Carlsen / Jaimie Harding 403.920.7859 or 800.608.7859
Unitholder and Analyst enquiries:
Rhonda Amundson
877.290.2772
investor_relations@tcpipelineslp.com
TC PipeLines,
LPFinancial Summary
Consolidated Statements of
Income |
|
Three months ended |
|
Nine months ended |
(unaudited) |
|
September 30, |
|
September 30, |
(millions of dollars, except per common unit amounts) |
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Transmission revenues |
|
|
93 |
|
|
|
103 |
|
|
|
299 |
|
|
|
328 |
|
Equity earnings |
|
|
31 |
|
|
|
34 |
|
|
|
115 |
|
|
|
129 |
|
Operation and maintenance expenses |
|
|
(18 |
) |
|
|
(15 |
) |
|
|
(51 |
) |
|
|
(48 |
) |
Property taxes |
|
|
(6 |
) |
|
|
(7 |
) |
|
|
(19 |
) |
|
|
(21 |
) |
General and administrative |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(6 |
) |
|
|
(4 |
) |
Depreciation and amortization |
|
|
(19 |
) |
|
|
(25 |
) |
|
|
(58 |
) |
|
|
(73 |
) |
Financial charges and other |
|
|
(20 |
) |
|
|
(23 |
) |
|
|
(63 |
) |
|
|
(69 |
) |
Net income before taxes |
|
|
59 |
|
|
|
65 |
|
|
|
217 |
|
|
|
242 |
|
Income taxes |
|
|
- |
|
|
|
- |
|
|
|
(1 |
) |
|
|
(1 |
) |
Net income |
|
|
59 |
|
|
|
65 |
|
|
|
216 |
|
|
|
241 |
|
|
|
|
|
|
|
|
|
|
Net income attributable to non-controlling interests |
|
|
3 |
|
|
|
3 |
|
|
|
12 |
|
|
|
10 |
|
Net income attributable to controlling
interests |
|
|
56 |
|
|
|
62 |
|
|
|
204 |
|
|
|
231 |
|
|
|
|
|
|
|
|
|
|
Net income attributable to controlling interest
allocation |
|
|
|
|
|
|
|
|
Common units |
|
|
54 |
|
|
|
57 |
|
|
|
199 |
|
|
|
222 |
|
General Partner |
|
|
1 |
|
|
|
1 |
|
|
|
4 |
|
|
|
5 |
|
Class B units |
|
|
1 |
|
|
|
4 |
|
|
|
1 |
|
|
|
4 |
|
|
|
|
56 |
|
|
|
62 |
|
|
|
204 |
|
|
|
231 |
|
|
|
|
|
|
|
|
|
|
Net income per common unit – basic and diluted
(a) |
|
$ |
0.76 |
|
|
$ |
0.79 |
|
|
$ |
2.79 |
|
|
$ |
3.11 |
|
|
|
|
|
|
|
|
|
|
Weighted average common units outstanding – basic
and diluted (millions) |
|
|
71.3 |
|
|
|
71.3 |
|
|
|
71.3 |
|
|
|
71.3 |
|
|
|
|
|
|
|
|
|
|
Common units outstanding, end of period
(millions) |
|
|
71.3 |
|
|
|
71.3 |
|
|
|
71.3 |
|
|
|
71.3 |
|
(a) Net income per common unit is computed by
dividing net income attributable to controlling interests, after
deduction of amounts attributable to the General Partner, by the
weighted average number of common units outstanding. The amount
allocable to the General Partner equals an amount based upon the
General Partner’s two percent general partner interest. For the
year ending December 31, 2019, the amount allocable to the Class B
units is equal to 30 percent of GTN’s annual distributable cash
flow, less the threshold amount of $20 million and is further
reduced by the Class B Reduction for 2019 (2018 – less the
threshold of $20 million and the Class B Reduction). During
the three and nine months ended September 30, 2019 $1 million was
allocated to the Class B units (September 30, 2018 - $4
million).
TC PipeLines,
LPFinancial Summary
Consolidated Balance
Sheets
(unaudited) |
|
|
|
|
(millions of dollars) |
|
September 30, 2019 |
|
December 31, 2018 |
|
|
|
|
|
ASSETS |
|
|
|
|
Current Assets |
|
|
|
|
Cash and cash
equivalents |
|
90 |
|
|
33 |
Accounts receivable and
other |
|
39 |
|
|
48 |
Inventories |
|
9 |
|
|
8 |
Other |
|
2 |
|
|
8 |
|
|
140 |
|
|
97 |
Equity investments |
|
1,094 |
|
|
1,196 |
Property, plant and
equipment |
|
|
|
|
(Net of $1,163
accumulated depreciation; 2018 - $1,110) |
|
1,517 |
|
|
1,529 |
Goodwill |
|
71 |
|
|
71 |
Other assets |
|
- |
|
|
6 |
TOTAL
ASSETS |
|
2,822 |
|
|
2,899 |
|
|
|
|
|
LIABILITIES AND
PARTNERS’ EQUITY |
|
|
|
|
Current Liabilities |
|
|
|
|
Accounts payable and
accrued liabilities |
|
31 |
|
|
36 |
Accounts payable to
affiliates |
|
6 |
|
|
6 |
Accrued interest |
|
20 |
|
|
12 |
Current portion of
long-term debt |
|
123 |
|
|
36 |
|
|
180 |
|
|
90 |
Long-term debt, net |
|
1,871 |
|
|
2,072 |
Deferred state income
taxes |
|
9 |
|
|
9 |
Other liabilities |
|
36 |
|
|
29 |
|
|
2,096 |
|
|
2,200 |
Partners’ Equity |
|
|
|
|
Common units |
|
522 |
|
|
462 |
Class B units |
|
96 |
|
|
108 |
General partner |
|
14 |
|
|
13 |
Accumulated other
comprehensive income (loss) (AOCI) |
|
(8 |
) |
|
8 |
Controlling interests |
|
624 |
|
|
591 |
Non-controlling interest |
|
102 |
|
|
108 |
|
|
726 |
|
|
699 |
TOTAL LIABILITIES AND
PARTNERS’ EQUITY |
|
2,822 |
|
|
2,899 |
TC PipeLines,
LPFinancial Summary
Consolidated Statement of Cash
Flows
|
|
Nine months ended |
(unaudited) |
|
September 30, |
(millions of dollars) |
|
2019 |
|
|
2018 |
|
|
|
|
|
|
Cash Generated from
Operations |
|
|
|
|
Net income |
|
216 |
|
|
241 |
|
Depreciation and
amortization |
|
58 |
|
|
73 |
|
Amortization of debt issue
costs reported as interest expense |
|
1 |
|
|
1 |
|
Amortization of realized
losses |
|
- |
|
|
2 |
|
Equity earnings from equity
investments |
|
(115 |
) |
|
(129 |
) |
Distributions received from
operating activities of equity investments |
|
168 |
|
|
142 |
|
Change in other long-term
liabilities |
|
1 |
|
|
(1 |
) |
Equity allowance for funds
used during construction (AFUDC equity) |
|
(1 |
) |
|
- |
|
Change in operating working
capital |
|
16 |
|
|
25 |
|
|
|
344 |
|
|
354 |
|
Investing
Activities |
|
|
|
|
Investment in Great Lakes |
|
(5 |
) |
|
(4 |
) |
Investment in Iroquois |
|
(4 |
) |
|
- |
|
Distribution received from
Iroquois as return of investment |
|
8 |
|
|
8 |
|
Distribution received from
Northern Border as return of investment |
|
50 |
|
|
- |
|
Capital expenditures |
|
(48 |
) |
|
(28 |
) |
|
|
1 |
|
|
(24 |
) |
Financing
Activities |
|
|
|
|
Distributions paid to common
units, including the General Partner |
|
(142 |
) |
|
(171 |
) |
Distributions paid to Class B
units |
|
(13 |
) |
|
(15 |
) |
Distributions paid to
non-controlling interests |
|
(18 |
) |
|
(11 |
) |
Common unit issuance, net |
|
- |
|
|
40 |
|
Long-term debt issued, net of
discount |
|
21 |
|
|
159 |
|
Long-term debt repaid |
|
(136 |
) |
|
(316 |
) |
Debt issuance costs |
|
- |
|
|
(1 |
) |
|
|
(288 |
) |
|
(315 |
) |
Increase in cash and
cash equivalents |
|
57 |
|
|
15 |
|
Cash and cash equivalents,
beginning of period |
|
33 |
|
|
33 |
|
Cash and cash
equivalents, end of period |
|
90 |
|
|
48 |
|
TC PipeLines,
LPSupplemental Schedule
Non-GAAP
MeasuresReconciliations of Net income to
Distributable Cash Flow
|
|
Three months ended |
|
Nine months ended |
(unaudited) |
|
September 30, |
|
September 30, |
(millions of dollars) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Net
income |
|
59 |
|
|
65 |
|
|
216 |
|
|
241 |
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
Interest expense (a) |
|
22 |
|
|
23 |
|
|
66 |
|
|
71 |
|
Depreciation and
amortization |
|
19 |
|
|
25 |
|
|
58 |
|
|
73 |
|
Income taxes |
|
- |
|
|
- |
|
|
1 |
|
|
1 |
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
100 |
|
|
113 |
|
|
341 |
|
|
386 |
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
Distributions from equity
investments (b) (f) |
|
|
|
|
|
|
|
|
Northern Border
(c) |
|
21 |
|
|
22 |
|
|
69 |
|
|
60 |
|
Great Lakes |
|
7 |
|
|
10 |
|
|
39 |
|
|
49 |
|
Iroquois (d) |
|
28 |
|
|
14 |
|
|
56 |
|
|
42 |
|
|
|
56 |
|
|
46 |
|
|
164 |
|
|
151 |
|
Less: |
|
|
|
|
|
|
|
|
Equity earnings: |
|
|
|
|
|
|
|
|
Northern Border |
|
(15 |
) |
|
(16 |
) |
|
(50 |
) |
|
(49 |
) |
Great Lakes |
|
(8 |
) |
|
(9 |
) |
|
(37 |
) |
|
(45 |
) |
Iroquois |
|
(8 |
) |
|
(9 |
) |
|
(28 |
) |
|
(35 |
) |
|
|
(31 |
) |
|
(34 |
) |
|
(115 |
) |
|
(129 |
) |
Less: |
|
|
|
|
|
|
|
|
AFUDC equity |
|
- |
|
|
- |
|
|
(1 |
) |
|
- |
|
Interest expense (a) |
|
(22 |
) |
|
(23 |
) |
|
(66 |
) |
|
(71 |
) |
Income taxes |
|
- |
|
|
- |
|
|
(1 |
) |
|
(1 |
) |
Distributions to
non-controlling interest (e) |
|
(4 |
) |
|
(3 |
) |
|
(14 |
) |
|
(12 |
) |
Maintenance capital
expenditures (f) |
|
(19 |
) |
|
(11 |
) |
|
(40 |
) |
|
(21 |
) |
|
|
(45 |
) |
|
(37 |
) |
|
(122 |
) |
|
(105 |
) |
|
|
|
|
|
|
|
|
|
Total Distributable
Cash Flow |
|
80 |
|
|
88 |
|
|
268 |
|
|
303 |
|
General Partner distributions
declared (g) |
|
(1 |
) |
|
(1 |
) |
|
(3 |
) |
|
(3 |
) |
Distributions allocable to
Class B units (h) |
|
(1 |
) |
|
(4 |
) |
|
(1 |
) |
|
(4 |
) |
Distributable Cash
Flow |
|
78 |
|
|
83 |
|
|
264 |
|
|
296 |
|
(a) Interest expense as
presented includes net realized loss related to the interest rate
swaps.(b) Amounts are
calculated in accordance with the cash distribution policies of
each of our equity investments. Distributions from our equity
investments represent our respective share of these entities’
quarterly distributable cash for the current reporting
period.(c) Excludes the $50
million additional distribution received from Northern Border. The
entire proceeds were used by the Partnership to partially repay our
2013 Term Loan Facility.(d)
This amount represents our proportional 49.34 percent share of the
distribution declared by our equity investee, Iroquois, for the
current reporting period and includes our 49.34 percent share of
the Iroquois unrestricted cash distribution amounting to
approximately $2.6 million and $7.8 million, respectively, for both
the three and nine months ended September 30, 2019 and September
30, 2018 and an additional cash distribution we received amounting
to approximately $15 million for both the three and nine months
ended September 30, 2019 (2018-none) related to the increase in the
cash Iroquois generated from its higher net income in 2017 (post
acquisition) and 2018. (e)
Distributions to non-controlling interests represent the respective
share of our consolidated entities’ distributable cash from
earnings not owned by us for the periods
presented.(f) The
Partnership’s maintenance capital expenditures include cash
expenditures made to maintain, over the long term, the operating
capacity, system integrity and reliability of our pipeline assets.
This amount represents the Partnership’s and its consolidated
subsidiaries’ maintenance capital expenditures and does not include
the Partnership’s share of maintenance capital expenditures for our
equity investments. Such amounts are reflected in “Distributions
from equity investments” as those amounts are withheld by those
entities from their quarterly distributable
cash.(g) No incentive
distributions were declared to the General Partner for the nine
months ended September 30, 2019 and
2018.(h) Distributions
allocable to the Class B units are based on 30 percent of GTN’s
distributable cash flow during the current reporting period but
declared and paid in the subsequent reporting period. For the three
and nine months ended September 30, 2019 and 2018, $1 million and
$4 million was allocated to the Class B units, respectively.
PDF
available: http://ml.globenewswire.com/Resource/Download/c98f6620-505d-44cd-952c-1733190ba151
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