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TC PipeLines, LP Announces Increase in Quarterly Distribution and Second Quarter Earnings
Calgary, Alberta - July 22, 2002 - (Nasdaq: TCLP) - TC PipeLines, LP (the Partnership) today announced that the board of directors of TC PipeLines GP, Inc., its general partner, has declared the Partnership's 2002 second quarter cash distribution in the amount of US$0.525 per unit. This represents a US$0.025 per unit or 5% increase from the previous quarterly distribution level of US$0.50 per unit. The second quarter distribution will be paid on August 14, 2002 to unitholders of record as of July 31, 2002.
"The increase in cash distribution reflects the excellent performance of our assets as well as our continued commitment to generate sustainable value for our unitholders," said Ron Turner, President and Chief Executive Officer of the general partner. "In addition to increasing our quarterly cash distribution to unitholders, we have diligently focused on strengthening our financial position by reducing our debt outstanding."
In the second quarter, the Partnership paid down US$10 million of its revolving credit facility balance, reducing the Partnership's total debt outstanding to US$11.5 million. Further demonstrating the strength of its financial position, subsequent to the second quarter, the Partnership was also able to use cash on hand to fund a US$4.5 million capital contribution related to the expansion of Tuscarora Gas Transmission Company's pipeline system. The Partnership holds a 49% general partner interest in Tuscarora.
2002 Second Quarter Earnings
The Partnership also announced 2002 second quarter net income of US$12.2 million or US$0.67 per unit, a US$2.4 million or US$0.13 per unit increase compared to 2001 second quarter net income of US$9.8 million or US$0.54 per unit. For the six months ended June 30, 2002, the Partnership earned net income of US$24.1 million or US$1.33 per unit, a US$3.3 million or US$0.18 per unit increase compared to net income of US$20.8 million or US$1.15 per unit for same period last year.
Northern Border Pipeline Company, in which the Partnership holds a 30% general partner interest, was the primary source of the Partnership's increased earnings this quarter.
Equity income from Northern Border Pipeline amounted to US$11.6 million in the second quarter of 2002, an increase of US$2.1 million compared to equity income of US$9.5 million in the second quarter of 2001. The increase is due primarily to incremental revenues from Project 2000, Northern Border Pipeline's 35-mile pipeline extension and expansion, which was completed in October 2001, and lower operations and maintenance expenses. 2002 second quarter equity income is also higher compared to the same period last year due to higher than usual non-operating expenses incurred last year. In the second quarter of 2002, contracts obligating Enron North America (ENA) to pay for 3.4% of Northern Border Pipeline's annualized capacity continued to be suspended. However, Northern Border Pipeline was able to mitigate the majority of this revenue shortfall in the second quarter by re-selling that capacity on a short-term basis at full rates as allowed under the Northern Border Pipeline tariff, which are equivalent to rates under the previous ENA contracts. In addition, ENA agreed to terminate, effective July 1, 2002, contracts representing approximately one half of its Northern Border Pipeline capacity, thereby enabling Northern Border Pipeline to re-market this capacity on a long-term basis. Northern Border Pipeline has now re-sold a majority of this capacity to a third party at maximum rates for a term ending on October 31, 2003.
Equity income from Tuscarora amounted to US$1.0 million in the second quarter of 2002, approximating 2001 second quarter equity income of US$0.9 million.
The Partnership's 2002 second quarter general and administrative expenses of US$0.3 million approximated expenses incurred for the same period last year, while financial charges of US$0.1 million were US$0.2 million lower than the same period last year due primarily to lower average debt balances and lower interest rates.
Conference Call
The Partnership will hold a conference call July 23, 2002 at 4:00 p.m. (eastern). During this call, TC PipeLines, LP's senior executives will review the Partnership's 2002 second quarter results. Those interested in listening to the call may dial 1-800-387-6216. A replay of the conference call will also be available from approximately 6:00 p.m. (eastern) July 23 until July 30, 2002 by dialing 1-800-408-3053 then entering passcode 1191067.
A live web cast of the conference call will also be available through the Partnership's website at www.tcpipelineslp.com in the "Newsroom" section, under "Presentations". An audio replay of the call will be maintained on the website until July 30, 2002.
TC PipeLines, LP is a publicly held master limited partnership. It owns a 30% interest in Northern Border Pipeline Company, a Texas general partnership, and a 49% interest in Tuscarora Gas Transmission Company, a Nevada general partnership. Northern Border Pipeline, which is owned 70% by Northern Border Partners, L.P., a publicly traded master limited partnership controlled by affiliates of Enron Corp., owns a 1,249-mile United States interstate pipeline system that transports natural gas from the Montana-Saskatchewan border to markets in the midwestern United States. Tuscarora owns a 229-mile United States interstate pipeline system that transports natural gas from Oregon, where it interconnects with facilities of PG&E National Energy Group, Gas Transmission Northwest, to northern Nevada. TC PipeLines, LP is managed by its general partner, TC PipeLines GP, Inc., a wholly owned subsidiary of TransCanada PipeLines Limited. Subsidiaries of TransCanada also hold common and subordinated units of the Partnership representing an aggregate 31.41% limited partner interest in the Partnership. Common units of TC PipeLines, LP are quoted on the Nasdaq Stock Market and trade under the symbol "TCLP". For more information about TC PipeLines, LP, visit the Partnership's website at www.tcpipelineslp.com.
Click here to view TC PipeLines, LP's Third Firstz Financial Highlights
Media Inquiries:
Glenn Herchak / Kurt Kadatz
(403) 920-7877
Unitholder and Analyst Inquiries:
Theresa Jang
Toll-free 1-877-290-2772
investor_relations@tcpipelineslp.com
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