TC PipeLines, LP Announces 2017 Second Quarter Financial Results
(firmenpresse) - HOUSTON, TEXAS -- (Marketwired) -- 08/02/17 -- News Release - TC PipeLines, LP (NYSE: TCP) (the Partnership) today reported second quarter 2017 net income attributable to controlling interests of $55 million and distributable cash flow of $82 million.
"Our portfolio of assets performed well in the second quarter. Our strategy of underpinning our business with long-term contracts continues to provide consistent results and generate stable cash flow and earnings," said Brandon Anderson, President of TC PipeLines, GP, Inc. "TC PipeLines, LP has increased its second quarter distribution to our unitholders by six percent on the basis of our solid operating results and the expected accretion from the Iroquois and PNGTS transaction which closed on June 1."
Second Quarter Highlights (All financial figures are unaudited)
The Partnership''s financial highlights for the second quarter of 2017 compared to the same period of 2016 were:
Recent Business Developments
Cash Distributions - On July 20, 2017, the board of directors of our General Partner declared the Partnership''s second quarter 2017 cash distribution in the amount of $1.00 per common unit payable on August 11, 2017 to unitholders of record as of August 1, 2017. The declared distribution reflects a $0.06 per common unit increase to the quarterly distribution and will include a $2 million distribution to our General Partner for its effective two percent general partner interest and an incentive distribution rights (IDR) payment amounting to $3 million.
Debt Offering - On May 25, 2017, the Partnership closed a $500 million public offering of senior unsecured notes bearing an interest rate of 3.90 percent maturing May 25, 2027. The net proceeds of $497 million were used to partially fund the acquisition described below.
2017 Acquisition -On June 1, 2017, the Partnership completed the purchase of a 49.34 percent interest in Iroquois from subsidiaries of TransCanada including an option to acquire a further 0.66 percent interest in Iroquois, together with TransCanada''s remaining 11.81 percent interest in PNGTS that resulted in the Partnership owning a 61.71 percent interest in PNGTS (2017 Acquisition). The total purchase price of the 2017 Acquisition was $765 million plus preliminary purchase price adjustments amounting to approximately $9 million. The purchase price consisted of (i) $710 million for the Iroquois interest (less $164 million, which reflected the Partnership''s 49.34 percent share of Iroquois outstanding debt at the time of the 2017 Acquisition (ii) $55 million for the additional 11.81 percent interest in PNGTS (less $5 million, which reflected our 11.81 percent share in PNGTS'' outstanding debt at the time of the 2017 Acquisition) and ( iii) preliminary working capital adjustments on PNGTS and Iroquois amounting to $3 million and $6 million, respectively. The Partnership funded the cash portion of the 2017 Acquisition through a combination of proceeds from the Partnership''s May 25, 2017 public debt offering and borrowing under our Senior Credit Facility.
Results of Operations
For the three months ended June 30, 2017, our net income attributable to controlling interests was comparable to the prior period due to the addition of equity earnings in Iroquois effective June 1, 2017 offset by (i) higher pipeline integrity and other operational costs at GTN which were required due to increased gas flow on the pipeline and (ii) higher financing costs due to additional borrowings to finance the 2017 Acquisition. Additionally, despite strong demand for GTN''s capacity that resulted in incremental revenues for GTN during the current period, overall revenues remained comparable to the prior period due to lower discretionary revenues from short term services sold by PNGTS.
Our overall EBITDA was comparable to the same period in 2016. The slight increase was primarily the result of addition of equity earnings in Iroquois effective June 1 2017 offset by higher pipeline integrity and other operational costs at GTN.
Distributable cash flow increased by $4 million in the second quarter of 2017 compared to the same period in 2016 primarily due to the addition of our 49.34 percent share of Iroquois second quarter 2017 distribution offset by (i) higher maintenance capital expenditures, the majority of which related to major compression equipment overhauls on GTN''s pipeline system; (ii) higher financing costs due to additional borrowings to finance the 2017 Acquisition and (iii) higher distributions paid to our General Partner in respect of its two percent general partner interest and IDRs.
Cash Flow Analysis
Net cash provided by operating activities decreased by $30 million in the six months ended June 30, 2017 compared to the same period in 2016 primarily due to lower distributions from Great Lakes and Northern Border in 2017. Distributions received in the first quarter of 2016 from Great Lakes were higher than on a run-rate basis due to the resolution of certain regulatory proceedings in the fourth quarter of 2015 which inflated its results during that period and resulted in higher cash flow which was paid to the Partnership in the first quarter of 2016 and not applicable in the first quarter of 2017. Additionally, the Partnership received lower distributions from Northern Border in the current period compared to the same period in 2016 primarily due to the change in Northern Border''s distribution policy during the second quarter of 2016 from a lagged quarterly distribution to a more timely monthly distribution that resulted in a larger distribution in the second quarter of 2016.
Net cash used in investing activities increased by $412 million in the six months ended June 30, 2017 compared to the same period in 2016. On January 1, 2016, we invested $193 million to acquire a 49.9 percent interest in PNGTS and on June 1, 2017, we invested $552 million to acquire a 49.34 percent interest in Iroquois and $53 million to acquire an additional 11.81 percent of PNGTS.
The net change in cash from our financing activities was approximately $432 million in the six months ended June 30, 2017 compared to the same period in 2016 primarily due to the net effect of:
At June 30, 2017, the Partnership''s available borrowing capacity under its $500 million credit facility was $330 million.
Non-GAAP Financial Measures
The following non-GAAP financial measures are presented as a supplement to our financial statements:
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 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:
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 year ended December 31, 2017 less $20 million (2016 - less $20 million).
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 information 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 Wednesday, August 2, 2017 at 10a.m. central time (CDT)/11 a.m. eastern time (EDT). Brandon Anderson, President of the General Partner, will discuss the second 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 . 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 August 9, 2017, by calling 800.408.3053, then entering pass code 6544557.
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 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". 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 costs of compliance with newly enacted regulations, the timing, terms and closing of future acquisitions of additional natural gas pipeline assets and 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, our ability to identify and complete expansion and growth opportunities, operating hazards beyond our control, disruption in the 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, 2016 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/James Millar
403.920.7859 or 800.608.7859
Unitholder and Analyst Inquiries:
Rhonda Amundson
877.290.2772
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Datum: 02.08.2017 - 05:30 Uhr
Sprache: Deutsch
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