TC PipeLines, LP Reports 2015 Fourth Quarter and Year-End Financial Results
Generates Record Distributable Cash Flow
(firmenpresse) - HOUSTON, TEXAS -- (Marketwired) -- 02/25/16 -- TC PipeLines, LP (NYSE: TCP) (the Partnership) today reported fourth quarter 2015 distributable cash flow of $74 million and adjusted earnings of $62 million. For the year ended December 31, 2015, distributable cash flow was $291 million and adjusted earnings were $212 million. After accounting for a financial impairment during the fourth quarter, the Partnership generated a net loss attributable to controlling interests of $137 million during the quarter and net income attributable to controlling interests of $13 million for the year ended December 31, 2015.
"The Partnership performed well in 2015 benefiting from our conservative business approach. Our assets generated increased cash flow and adjusted earnings during both the quarter and the year despite the volatility in the markets. These positive results demonstrate the strength and stability of our portfolio of FERC-regulated pipeline assets, all of which are underpinned by long-term, ship-or-pay contracts with high quality, creditworthy customers," said Brandon Anderson, President of TC PipeLines, GP, Inc. "Great Lakes saw improved results indicative of our expectations for future periods. However, these results are not at the level experienced earlier this decade. We have taken an impairment charge to earnings during the fourth quarter in order to bring the carrying value of this pipeline system in line with its fair value. Our distributable cash flow in 2015 reached an all-time high of $291 million and was unaffected by this non-cash charge."
Effective January 1, 2016, we acquired a 49.9 percent interest in Portland Natural Gas Transmission System (PNGTS) from TransCanada.
Full Year 2015 Highlights and Fourth Quarter Highlights (All financial figures are unaudited)
The Partnership''s financial highlights for the fourth quarter of 2015 compared to the fourth quarter of 2014 were:
Recent Developments
PNGTS Acquisition - On January 1, 2016, we acquired a 49.9 percent interest in PNGTS from TransCanada for $226 million including approximately $35 million in proportionate PNGTS debt and preliminary purchase price adjustments of $3 million. The Partnership financed the acquisition with a combination of debt and equity.
Cash Distributions - On January 21, 2016, the board of directors of our General Partner declared the Partnership''s fourth quarter 2015 cash distribution in the amount of $0.89 per common unit, payable on February 12, 2016 to unitholders on record as of February 2, 2016.
Results of Operations
For the three months ended December 31, 2015, net income attributable to controlling interests decreased by $184 million compared to the same period in 2014 primarily due to the recognition of the $199 million non-cash impairment charge on our investment in Great Lakes Gas Transmission Limited Partnership (Great Lakes). Despite the recent improvement in income from our investment in Great Lakes since 2013, including favorable current year results, its long-term value has been adversely impacted by the changing natural gas flows in its market region as well as our conclusion in the fourth quarter that other strategic alternatives to increase its utilization or revenue were no longer feasible. As a result, we determined that the carrying value of our investment in Great Lakes was in excess of its fair value and the decline is not temporary. Accordingly, we concluded that the carrying value of our investment in Great Lakes was impaired.
For the three months ended December 31, 2015, our adjusted earnings increased by $15 million, an increase of $0.08 adjusted earnings per common unit compared to the same period in 2014. The increase was primarily due to the net effect of:
Additionally, our EBITDA increased by $11 million compared to the same period in 2014 primarily due to the same factors that impacted our adjusted earnings.
Distributable cash flow increased by $6 million in the fourth quarter of 2015 compared to the same period in 2014 primarily due to the net effect of:
Non-GAAP Financial Measures
The following non-GAAP financial measures are presented as a supplement to our financial statements:
We have evaluated our financial performance and position inclusive of the impairment charge to our investment in Great Lakes during the current year, however, we believe it is not reflective of our underlying operations during the periods presented. Therefore, we have presented adjusted earnings and adjusted earnings per common unit as non- GAAP measures that exclude the impact of the $199 million non-cash impairment charge.
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 and net income attributable to non-controlling interests 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.
We believe these measures provide investors with meaningful information in evaluating our financial performance and cash distribution capability.
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 in the Partnership 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 nine months ended December 31, 2015 less $15 million.
The non-GAAP financial measures described above 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.
For a reconciliation of these non-GAAP financial measures to GAAP measures, please see the tables captioned "Reconciliation of Net income to Distributable Cash Flow," "Reconciliation of Net income (loss) attributable to controlling interest and adjusted earnings" and " Reconciliation of Net income (loss) per common unit and adjusted earnings per common unit" included at the end of this release.
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 Thursday, February 25, 2016 at 10:00 a.m. central time (CDT)/11:00 a.m. eastern time (EDT). Brandon Anderson, President of the General Partner, will discuss the fourth 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 March 3, 2016, by calling 800.408.3053, then entering pass code 9878635.
TC PipeLines, LP is a Delaware master limited partnership with interests in seven federally regulated U.S. interstate natural gas pipelines which serve markets in the Western, Midwestern and Eastern 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, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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, 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 of the Partnership''s Annual Report on Form 10-K and subsequent Form 10-Q and Form 8-K filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements in making investment decisions. All forward-looking statements speak 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 / Terry Cunha
403.920.7859
800.608.7859
Unitholder and Analyst Inquiries:
Rhonda Amundson
877.290.2772
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Datum: 25.02.2016 - 06:30 Uhr
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