TC PipeLines, LP (NYSE: TCP) (the Partnership) today reported net
income attributable to controlling interests of $88 million and
distributable cash flow of $88 million for the three months ended
March 31, 2020.
“We are living in a world of unprecedented events with the
COVID-19 pandemic front and center coupled with significant recent
challenges in the energy space,” said Nathan Brown, president of TC
PipeLines, GP, Inc. “The events of the last two months have
underscored the importance of resilience and stability and we
believe the credit strength of our customer group, fundamental
market strength of our assets’ locations, and the substantial
utility demand-pull nature of our long-term, take-or-pay contracted
capacity set the Partnership apart and will help us to maintain the
momentum we have built across our geographic footprint. Our
businesses provide critical energy delivery 24/7 to ensure the most
important functions of our country can run uninterrupted, even in
the most challenging times. We implemented business continuity
plans across our operations and continue to deliver our services
with employee health and safety as paramount values. That is never
more important as we, through TC Energy Corporation, operate our
assets with a coordinated approach to maintain our critical
operations, maintenance and growth projects.
“Our assets performed well in the first quarter of 2020 and
generated solid operational results,” continued Brown. “We
experienced uninterrupted demand for our services, although this
year’s moderate winter impeded our ability to sell short-term
services compared to the same period last year.
“In these unprecedented times, TC PipeLines is focused on
maintaining the current distribution level and self-funding
operating and growth activities. Accordingly, we see substantial
value for our investors moving forward in the near term with an
enviable suite of opportunities for growth in the long term,”
concluded Brown.
First quarter highlights
(unaudited)
- Generated net income attributable to controlling interests of
$88 million;
- Paid cash distributions of $55 million, including $8 million
paid to Class B units;
- Declared cash distribution of $0.65 per common unit for the
first quarter of 2020;
- Generated Adjusted EBITDA of $138 million and distributable
cash flow of $88 million;
- No outstanding balance on our Senior Credit Facility;
- Received FERC approval to begin construction of Phase III of
PNGTS’ Portland XPress project in early March;
- Continued permitting, engineering and construction activities
on our PNGTS, GTN XPress and Tuscarora XPress projects; and
- Continued to progress North Baja XPress and Iroquois’ ExC
project.
The Partnership’s financial highlights for the
first quarter of 2020 compared to the same period in 2019 were:
|
Three months ended |
(unaudited) |
March 31, |
(millions of dollars, except per common unit amounts) |
2020 |
|
|
2019 |
|
Net income |
94 |
|
|
100 |
|
Net income attributable to
controlling interests |
88 |
|
|
93 |
|
Net income per common unit –
basic and diluted (a) |
$1.21 |
|
|
$1.28 |
|
|
|
|
|
Earnings before interest,
taxes, depreciation and amortization (EBITDA) (b) |
134 |
|
|
142 |
|
Adjusted EBITDA(b) |
138 |
|
|
152 |
|
|
|
|
|
Cash distributions paid |
(47 |
) |
|
(47 |
) |
Class B distributions paid
(c) |
(8 |
) |
|
(13 |
) |
Distributable cash flow
(b) |
88 |
|
|
116 |
|
|
|
|
|
Cash distribution declared per
common unit |
$0.65 |
|
|
$0.65 |
|
|
|
|
|
Weighted average
common units outstanding – basic and diluted
(millions) |
71.3 |
|
|
71.3 |
|
|
|
|
|
Common units
outstanding, end of period (millions) |
71.3 |
|
|
71.3 |
|
(a) |
Net income per
common unit is computed by dividing net income attributable to
controlling interests, after deduction of net income attributable
to TC PipeLines GP, Inc. (the General Partner), by the weighted
average number of common units outstanding. Refer to the “Financial
Summary-Consolidated Statements of Operations” section of this
release. |
(b) |
EBITDA, Adjusted EBITDA and Distributable Cashflow 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, including a reconciliation to the comparable GAAP
measures. |
(c) |
Reflects distributions allocable to Class B units in the years
ended December 31, 2019 and 2018 and paid in the three months ended
March 31, 2020 and 2019, respectively. |
Recent business
developments:
Current outlook including the uncertainty surrounding COVID-19
pandemic and global crude oil market:
On March 11, 2020, the World Health Organization declared the
novel coronavirus, or COVID-19, a global
pandemic. Additionally, amid the COVID-19 crisis, the global
oil market experienced a precipitous decline in the price for crude
oil due to an oversupply of oil in the first quarter of
2020.
As primary operator of our pipelines, TC Energy Corporation’s
(TC Energy) business continuity plans were put in place across the
organization and TC Energy continues to effectively operate our
assets, conduct commercial activities and execute on projects with
a focus on health, safety and reliability. At the current time, our
business is broadly considered an essential or critical business in
the United States given the important role our infrastructure plays
in delivering energy to North American markets. We anticipate that
changes to work practices and other restrictions put in place by
government and health authorities in response to the COVID-19
pandemic will have an impact on certain projects. We generally
believe this will not be material to our operations, but the
long-term impact of the COVID-19 pandemic and associated effects is
uncertain at this time.
Our pipeline assets are largely backed by long-term, take-or-pay
contracts resulting in revenues that are materially insulated from
short-term volatility associated with volume throughput and
commodity prices. More importantly, a significant portion of our
long-term contract revenue is with investment-grade customers and
we have not experienced any collection issues on our receivables to
date. Aside from the impact of maintenance activities and normal
seasonal factors, to date we have not seen any pronounced changes
in the utilization of our assets. While it is too early to
ascertain any long-term impact that the COVID-19 pandemic or the
oil price decline may have on our capital growth program, we note
that we could experience a delay in construction and other related
activities.
Capital market conditions in 2020 have been significantly
impacted by the COVID-19 pandemic and the oil price decline
resulting in periods of heightened volatility and reduced
liquidity. Despite this, our liquidity remains strong underpinned
by stable cashflow from operations, cash on hand and full access to
our $500 million senior revolving credit facility. Additionally, we
expect to refinance GTN's $100 million Senior Notes due in June
2020 and Tuscarora's $23 million Unsecured Term Loan due in August
2020 together with additional funding to be used to finance a
portion of GTN XPress and Tuscarora XPress. We continue to
conservatively manage our financial position, self-fund our ongoing
capital expenditures and maintain our debt at prudent levels, and
we believe we are well positioned to fund our obligations through a
prolonged period of disruption, should it occur. Based on current
expectations, we believe our business will continue to deliver
consistent financial performance going forward and support our
current quarterly distribution level of $0.65 per common unit.
Organic growth projects:
PNGTS’ Portland XPress Project (PXP) - Phases I and II of this
project are in service, and on March 5, 2020, FERC granted PNGTS’
request to begin construction of Phase III of the project.
Construction activities are expected to ramp up during the second
quarter and PXP is currently on track to be fully in service on
November 1, 2020. Once fully in service, all three phases of PXP in
aggregate are expected to generate approximately $50 million of
annual revenue for PNGTS.
ANR's Alberta XPress project - On February 12, 2020, TC Energy
approved the Alberta XPress project, an expansion project on its
ANR Pipeline system with an estimated in-service date of 2022. This
project utilizes existing capacity on our Great Lakes and TC
Energy’s Canadian Mainline systems to connect growing natural gas
supply from the WCSB to U.S. Gulf Coast LNG export markets. As a
result, an ANR contract on the Great Lakes system totaling
approximately 168,000 Dth/day of capacity will be converted to a
new 20-year commitment at maximum rates for a total contract value
of $182 million starting in 2022. This contract, which has a full
quantity reduction option at any time before October 1, 2022, is
dependent on ANR being able to secure the required regulatory
approvals and other requirements of the project.
Cash distributions:
On April 21, 2020, the board of directors of our
General Partner declared the Partnership’s first quarter 2020 cash
distribution in the amount of $0.65 per common unit payable on May
12, 2020 to unitholders of record as of May 1, 2020. The declared
distribution to our General Partner was $1 million for its two
percent general partner interest.
Results of operations
The Partnership’s net income attributable to controlling
interests decreased by $5 million in the three months ended
March 31, 2020 compared to the same period in 2019, mainly due
to the following:
Transmission revenues - The $12 million decrease in transmission
revenues was largely the result of the following:
- lower revenue on GTN due to (i) its scheduled 6.6 percent rate
decrease effective January 1, 2020, (ii) lower discretionary
services sold due to moderate weather conditions in early 2020
compared to colder weather experienced in early 2019, and (iii)
additional sales in 2019 related to regional supply constraints
from a force majeure event experienced by a neighboring pipeline
that were not repeated in 2020;
- lower revenue on Tuscarora due to its scheduled 10.8 percent
rate decrease effective August 1, 2019;
- lower revenue from discretionary services sold by PNGTS in 2020
compared to 2019 due to more moderate weather conditions in early
2020, partially offset by new revenues from Westbrook XPress which
went into service on November 1, 2019;
- lower volume of discretionary services sold by North Baja;
and
- lower revenue on Bison as a result of the expiration of one of
its legacy contracts at the end of January 2019.
Operating expenses - The $ 2 million decrease in operation and
maintenance expenses was primarily due to an overall net decrease
in property taxes on Bison and PNGTS and an overall decrease in
allocated employee costs.
Financial charges and other - The $3 million decrease was
primarily attributable to the $68 million reduction in our overall
debt balance when compared to our debt balance at March 31, 2019.
The reduction was the result of (a) a $50 million prepayment on our
2013 $500 million term loan facility during the second quarter of
2019; (b) a $35 million repayment of GTN's outstanding balance
under its unsecured term loan facility during the second quarter of
2019; and (c) a $1 million scheduled payment on Tuscarora's
unsecured term loan facility during the third quarter of 2019;
offset by (d) $18 million of additional borrowings under PNGTS'
revolving credit facility.
Net income attributable to non-controlling interests - The $1
million decrease in the Partnership's net income attributable to
non-controlling interests was due to the decrease in PNGTS' net
income primarily as a result of its lower revenue, partially offset
by lower property taxes.
Non-GAAP Financial Measures - Our EBITDA was lower for the three
months ended March 31, 2020 compared to the same period in 2019.
The $8 million decrease was primarily due to lower revenue from our
consolidated subsidiaries as discussed above.
Our Adjusted EBITDA was lower for the three months ended March
31, 2020 compared to the same period in 2019. The $14 million
decrease was primarily due to:
- lower revenue from consolidated subsidiaries as discussed
above; and
- lower distribution from Iroquois as it satisfied its final
surplus cash distribution of approximately $2.6 million in the
fourth quarter of 2019.
Our distributable cash flow decreased by $28 million in the
three months ended March 31, 2020 compared to the same period in
2019 due to the net effect of:
- lower Adjusted EBITDA;
- higher maintenance capital expenditures at GTN as a result of
increased spending on major equipment overhauls at several
compressor stations and certain system upgrades; and
- lower interest expense due to lower average debt balance during
the three months ended March 31, 2020 compared to the same period
in 2019.
Cash flow analysis
Operating cash flows
In the three months ended March 31, 2020, the Partnership's
net cash provided by operating activities decreased by $4 million
compared to the same period in 2019 primarily due to the net effect
of:
- lower net cash flow from operations of our consolidated
subsidiaries primarily due to the decrease in their revenue;
- the timing of receipt of Iroquois' third quarter 2019
distributions from its operating activities, which we would
ordinarily have received during the fourth quarter of 2019 but was
not received until early in the first quarter of 2020; and
- the impact from amount and timing of operating working capital
changes.
Investing cash flows
During the three months ended March 31, 2020, the cash used
in our investing activities was higher by $7 million compared to
the same period in 2019 primarily due to the net effect of:
- the timing of receipt of Iroquois' third quarter 2019
distributions amounting to approximately $2.6 million, a portion of
which was considered a return of investment, which we would
ordinarily have received during the fourth quarter of 2019 but was
not received until early in the first quarter of 2020; and
- the higher capital maintenance expenditures on GTN for its
overhaul projects together with continued capital spending on our
GTN XPress, PXP and Westbrook XPress projects.
Financing cash flows
The Partnership's net cash used for financing activities was
approximately $43 million lower in the three months ended
March 31, 2020 compared to the same period in 2019 primarily
due to the net effect of:
- additional borrowings on PNGTS’ revolving credit facility of $6
million in 2020 to fund its PXP and Westbrook XPress projects
compared to a net debt repayment of $42 million in 2019; and
- $5 million decrease in distributions paid to Class B units in
2020 as compared to 2019.
Overall current financial condition:
At March 31, 2020, the balance of our cash and cash
equivalents of $134 million was higher than our position at
December 31, 2019 by approximately $51 million and our overall
long-term debt balance increased by approximately $7 million as a
result of the financing required during the period on PNGTS' PXP
and Westbrook XPress projects.
We continue to be financially disciplined by using our available
cash to fund ongoing capital expenditures and maintaining debt at
prudent levels and we believe we are well positioned to fund our
obligations through a prolonged period of disruption, should it
occur.
We believe our (1) cash on hand, (2) operating cash flows, (3)
$500 million available borrowing capacity on our senior revolving
credit facility at May 6, 2020, and (4) if needed, and subject to
customary lender's approval upon request, an additional $500
million capacity that is available under our senior revolving
credit facility accordion feature, are sufficient to fund our
short-term liquidity requirements, including distributions to our
unitholders, ongoing capital expenditures, required debt repayments
and other financing needs such as capital contribution requests
from our equity investments.
Non-GAAP financial
measures
The following non-GAAP financial measures are
presented as a supplement to our financial statements:
- EBITDA;
- Adjusted EBITDA;
- Total distributable cash flow; and
- 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, which includes net income
attributable to non-controlling interests and earnings from our
equity investments. It measures our earnings before deducting
interest, depreciation and amortization and taxes.
Adjusted EBITDA is our EBITDA, less (1) earnings from our equity
investments, plus (2) distributions from our equity investments,
and plus or minus (3) certain non-recurring items (if any) that are
significant but not reflective of our underlying operations.
Beginning the three months ended March 31, 2020, we are providing
Adjusted EBITDA as an additional performance measure of the current
operating profitability of our assets.
During the three months ended March 31, 2020, the Partnership
revised its calculation of Adjusted EBITDA to include distributions
from our equity investments, net of equity earnings from our
investments as described above, which were previously excluded from
such measure. The presentation of Adjusted EBITDA for the
three months ended March 31, 2019 was recast to conform
with the current presentation. The Partnership believes the
revised presentation more closely aligns with similar non-GAAP
measures presented by our peers and with the Partnership’s
definitions of such measures.
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 Adjusted
EBITDA less:
- Allowance for funds used during construction (AFUDC);
- Interest expense;
- Current 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, 2020 less $20 million, the
residual of which is further multiplied by 43.75 percent 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. Distributions allocable
to the Class B units in 2019 equaled 30 percent of GTN’s
distributable cashflow less $20 million and the Class B
Reduction.
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
800.806.5484 and entering pass code 3139820# on May 6, 2020 at
10:00 a.m. CDT/11:00 a.m. EDT. Nathan Brown, President of the
General Partner, along with other members of management, will
discuss the Partnership’s first 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. A live webcast of the conference call will also
be available through the Partnership’s website at
www.tcpipelineslp.com/events or via the following
URL:http://www.gowebcasting.com/10573. 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 /midnight
EDT on May 13, 2020, by calling 800.408.3053, then entering pass
code 6063505#.
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
http://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, the impact of a potential
slowdown in construction activities or delay in completion of our
capital projects including increase in costs and availability of
labor, equipment and materials, the impact of downward changes in
oil and natural gas prices, including any effects on the
creditworthiness of our shippers or the availability of natural gas
in a low oil price environment, uncertainty surrounding the impact
of global health crises that reduce commercial and economic
activity, including the recent outbreak of the COVID-19 virus, and
the potential impact on our business 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. Risk Factors” in our Annual
Report on Form 10-K for the year-ended December 31, 2019 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.
–30–
Media Inquiries: Hejdi Carlsen / Jaimie
Harding 403.920.7859 or 800.608.7859
Unitholder and Analyst Inquiries: Rhonda
Amundson 877.290.2772investor_relations@tcpipelineslp.com
TC PipeLines,
LPFinancial Summary
Consolidated Statements of
Income
|
|
Three months ended |
(unaudited) |
|
March 31, |
(millions of dollars, except per common unit amounts) |
|
2020 |
|
|
2019 |
|
|
|
|
|
|
Transmission revenues |
|
101 |
|
|
113 |
|
Equity earnings |
|
55 |
|
|
54 |
|
Operation and maintenance expenses |
|
(16 |
) |
|
(16 |
) |
Property taxes |
|
(6 |
) |
|
(7 |
) |
General and administrative |
|
(1 |
) |
|
(2 |
) |
Depreciation and amortization |
|
(20 |
) |
|
(20 |
) |
Financial charges and other |
|
(19 |
) |
|
(22 |
) |
Net income before taxes |
|
94 |
|
|
100 |
|
Income taxes |
|
- |
|
|
- |
|
Net income |
|
94 |
|
|
100 |
|
|
|
|
|
|
Net income attributable to non-controlling interests |
|
6 |
|
|
7 |
|
Net income attributable to controlling
interests |
|
88 |
|
|
93 |
|
|
|
|
|
|
Net income attributable to controlling interest
allocation |
|
|
|
|
Common units |
|
86 |
|
|
91 |
|
General Partner |
|
2 |
|
|
2 |
|
|
|
88 |
|
|
93 |
|
|
|
|
|
|
Net income per common unit – basic and diluted
(a) |
|
$1.21 |
|
|
$1.28 |
|
|
|
|
|
|
Weighted average common units outstanding – basic
and diluted (millions) |
|
71.3 |
|
|
71.3 |
|
|
|
|
|
|
Common units outstanding, end of period
(millions) |
|
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 and Class B units, 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. The amount allocable to the
Class B units in 2020 will equal 30 percent of GTN’s distributable
cash flow during the year ending December 31, 2020 less $20
million, the residual of which is further multiplied by 43.75
percent. This amount is further reduced by the estimated Class B
Reduction for 2020 (December 31, 2019 - $20 million less Class
B Reduction) as applicable. During the three months ended March 31,
2020 and 2019, no amounts were allocated to the Class B units as
the thresholds had not been exceeded. |
TC PipeLines,
LPFinancial Summary
Consolidated Balance
Sheets
(unaudited) |
|
|
|
|
(millions of dollars) |
|
March 31, 2020 |
|
December 31, 2019 |
|
|
|
|
|
ASSETS |
|
|
|
|
Current Assets |
|
|
|
|
Cash and cash equivalents |
|
134 |
|
|
83 |
|
Accounts receivable and
other |
|
37 |
|
|
48 |
|
Distribution receivable
from Iroquois |
|
- |
|
|
14 |
|
Inventories |
|
11 |
|
|
10 |
|
Other |
|
3 |
|
|
6 |
|
|
|
185 |
|
|
156 |
|
Equity investments |
|
1,102 |
|
|
1,098 |
|
Property, plant and
equipment |
|
|
|
|
(Net of $1,201
accumulated depreciation; 2019 - $1,187) |
|
1,540 |
|
|
1,528 |
|
Goodwill |
|
71 |
|
|
71 |
|
Other assets |
|
- |
|
|
- |
|
TOTAL
ASSETS |
|
2,898 |
|
|
2,853 |
|
|
|
|
|
|
LIABILITIES AND
PARTNERS’ EQUITY |
|
|
|
|
Current Liabilities |
|
|
|
|
Accounts payable and
accrued liabilities |
|
33 |
|
|
28 |
|
Accounts payable to
affiliates |
|
6 |
|
|
8 |
|
Accrued interest |
|
20 |
|
|
11 |
|
Current portion of
long-term debt |
|
123 |
|
|
123 |
|
|
|
182 |
|
|
170 |
|
Long-term debt, net |
|
1,887 |
|
|
1,880 |
|
Deferred state income
taxes |
|
7 |
|
|
7 |
|
Other liabilities |
|
43 |
|
|
36 |
|
|
|
2,119 |
|
|
2,093 |
|
Partners’ Equity |
|
|
|
|
Common units |
|
584 |
|
|
544 |
|
Class B units |
|
95 |
|
|
103 |
|
General partner |
|
15 |
|
|
14 |
|
Accumulated other
comprehensive income (loss) (AOCI) |
|
(18 |
) |
|
(5 |
) |
Controlling interests |
|
676 |
|
|
656 |
|
Non-controlling interest |
|
103 |
|
|
104 |
|
|
|
779 |
|
|
760 |
|
TOTAL LIABILITIES AND
PARTNERS’ EQUITY |
|
2,898 |
|
|
2,853 |
|
TC PipeLines,
LPFinancial Summary
Consolidated Statement of Cash
Flows
|
|
Three months ended |
(unaudited) |
|
March 31, |
(millions of dollars) |
|
2020 |
|
|
2019 |
|
|
|
|
|
|
Cash Generated from
Operations |
|
|
|
|
Net income |
|
94 |
|
|
100 |
|
Depreciation and
amortization |
|
20 |
|
|
20 |
|
Equity earnings from equity
investments |
|
(55 |
) |
|
(54 |
) |
Distributions received from
operating activities of equity investments |
|
65 |
|
|
56 |
|
Change in operating working
capital |
|
9 |
|
|
13 |
|
Other |
|
(2 |
) |
|
- |
|
|
|
131 |
|
|
135 |
|
Investing
Activities |
|
|
|
|
Investment in Great Lakes |
|
(5 |
) |
|
(5 |
) |
Distribution received from
Iroquois as return of investment |
|
5 |
|
|
2 |
|
Capital expenditures |
|
(24 |
) |
|
(16 |
) |
Other |
|
- |
|
|
2 |
|
|
|
(24 |
) |
|
(17 |
) |
Financing
Activities |
|
|
|
|
Distributions paid to common
units, including the General Partner |
|
(47 |
) |
|
(47 |
) |
Distributions paid to Class B
units |
|
(8 |
) |
|
(13 |
) |
Distributions paid to
non-controlling interests |
|
(7 |
) |
|
(7 |
) |
Long-term debt issued, net of
discount |
|
6 |
|
|
18 |
|
Long-term debt repaid |
|
- |
|
|
(50 |
) |
|
|
(56 |
) |
|
(99 |
) |
Increase in cash and
cash equivalents |
|
51 |
|
|
19 |
|
Cash and cash equivalents,
beginning of period |
|
83 |
|
|
33 |
|
Cash and cash
equivalents, end of period |
|
134 |
|
|
52 |
|
TC PipeLines,
LPSupplemental Schedule
Non-GAAP Measures
Reconciliations of Net income to Distributable
Cash Flow
|
|
Three months ended |
(unaudited) |
|
March 31, |
(millions of dollars) |
|
2020 |
|
|
2019 |
|
Net
income |
|
94 |
|
|
100 |
|
|
|
|
|
|
Add: |
|
|
|
|
Interest expense (a) |
|
20 |
|
|
22 |
|
Depreciation and
amortization |
|
20 |
|
|
20 |
|
Income taxes |
|
- |
|
|
- |
|
|
|
|
|
|
EBITDA |
|
134 |
|
|
142 |
|
|
|
|
|
|
Less: |
|
|
|
|
Equity Earnings: |
|
|
|
|
Northern Border |
|
(22 |
) |
|
(21 |
) |
Great Lakes |
|
(20 |
) |
|
(20 |
) |
Iroquois |
|
(13 |
) |
|
(13 |
) |
|
|
(55 |
) |
|
(54 |
) |
Add: |
|
|
|
|
Distributions from equity
investments (b) |
|
|
|
|
Northern Border |
|
27 |
|
|
27 |
|
Great Lakes |
|
21 |
|
|
23 |
|
Iroquois (c) |
|
11 |
|
|
14 |
|
|
|
59 |
|
|
64 |
|
|
|
|
|
|
ADJUSTED
EBITDA |
|
138 |
|
|
152 |
|
Less: |
|
|
|
|
AFUDC |
|
(1 |
) |
|
- |
|
Interest expense (a) |
|
(20 |
) |
|
(22 |
) |
Current Income taxes |
|
- |
|
|
- |
|
Distributions to
non-controlling interest (d) |
|
(6 |
) |
|
(7 |
) |
Maintenance capital
expenditures (e) |
|
(22 |
) |
|
(6 |
) |
|
|
(49 |
) |
|
(35 |
) |
|
|
|
|
|
Total Distributable
Cash Flow |
|
89 |
|
|
117 |
|
General Partner distributions
declared (f) |
|
(1 |
) |
|
(1 |
) |
Distributions allocable to
Class B units (g) |
|
- |
|
|
- |
|
Distributable Cash
Flow |
|
88 |
|
|
116 |
|
(a) |
Interest
expense as presented includes net realized loss or gain 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) |
This amount represents our proportional 49.34 percent share of
the distribution declared by our equity investee, Iroquois, for the
current reporting period. For the three months ended March 31,
2019, the amount includes our 49.34 percent share of the Iroquois
unrestricted cash distribution amounting to approximately $2.6
million (March 31, 2020- none). |
(d) |
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. |
(e) |
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. |
(f) |
No incentive distributions were declared to the General Partner
for the three months ended March 31, 2020 and 2019. |
(g) |
For the three months ended March 31, 2020 and 2019, no
distributions were allocated to the Class B units. |
PDF
available: http://ml.globenewswire.com/Resource/Download/9731f57e-7d95-490b-8a8f-10230b71ff13
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