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TC PipeLines, LP Declares Distribution and Announces 13% Increase in Third Quarter Earnings
Calgary, Alberta - October 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 third quarter cash distribution in the amount of US$0.525 per unit. The third quarter distribution will be paid on November 14, 2002 to unitholders of record as of October 31, 2002.
"We are very pleased that our assets continue to generate the kind of stable and consistent cash flows our unitholders have come to expect from TC PipeLines," said Ron Turner, President and Chief Executive Officer of the general partner. "Over the course of the past nine months, cash distributions received from the Partnership's investments in Northern Border Pipeline and Tuscarora have increased by 21% compared to the same period last year. This reflects the very strong operational performances of Northern Border Pipeline and Tuscarora."
2002 Third Quarter Earnings
The Partnership also announced 2002 third quarter net income of US$12.4 million or US$0.68 per unit, a US$1.4 million or US$0.08 per unit increase compared to 2001 third quarter net income of US$11.0 million or US$0.60 per unit.
For the nine months ended September 30, 2002, the Partnership earned net income of US$36.6 million or US$2.01 per unit, a US$4.9 million or US$0.26 per unit increase compared to net income of US$31.7 million or US$1.75 per unit for same period last year.
Equity income from Northern Border Pipeline amounted to US$11.8 million in the third quarter of 2002, an increase of US$1.1 million compared to equity income of US$10.7 million in the third quarter of 2001. The increase reflects TC PipeLines' 30% share of incremental revenues generated by Northern Border Pipeline's pipeline extension and expansion into northern Indiana, which was placed into service in October 2001.
Equity income from Tuscarora amounted to US$1.2 million in the third quarter of 2002, a US$0.4 million increase compared to 2001 third quarter equity income of US$0.8 million. The increase is primarily due to incremental revenues being generated from new transportation contracts and lower interest expense, resulting from the capitalization of interest expense related to funds being used for Tuscarora's expansion.
The Partnership also recorded US$0.4 million of general and administrative expenses and US$0.1 million of financial charges in the third quarter of 2002, compared to US$0.3 million and $0.2 million, respectively in the third quarter of 2001.
Update on Tuscarora Expansion
Tuscarora's expansion was approved by the Federal Energy Regulatory Commission (FERC) on January 30, 2002. The addition of two compressor stations to be located along the Tuscarora mainline as well as an 11-mile pipeline extension from Tuscarora's current terminus near Reno, Nevada to Wadsworth, Nevada is within budget and on schedule to be completed at the end of November of this year. Service is expected to commence in December. The expansion will result in a 43% increase (approximately 55 million cubic feet per day) to Tuscarora's current transportation capacity, increasing Tuscarora's capacity to approximately 182 million cubic feet per day. The new capacity is fully contracted for terms ranging from ten to fifteen years. Terms of these transportation contracts allow for approximately 70% of the new volumes to flow upon commencement of service. The remaining 30% of new volumes are expected to be flowing by the end of 2003.
The second phase of the expansion that was expected to further increase Tuscarora's capacity by an additional 30 million cubic feet per day by the end of 2003 has been cancelled due to the termination of the precedent agreement that supported this capacity. Tuscarora has advised the Partnership that it has initiated the process to amend its FERC certificate to remove the second phase from the proposed expansion. As a result, the capital budget for the expansion has been revised from US$60 million to US$43 million, although the Partnership expects actual capital expenditures to come in well under the revised budget.
Conference Call
The Partnership will hold a conference call October 23, 2002 at 4:00 p.m. (eastern). During this call, TC PipeLines, LP's senior executives will review the Partnership's 2002 third quarter results and discuss the Partnership's outlook for 2003. Those interested in listening to the call may dial 1-800-377-0758. A replay of the conference call will also be available from approximately 6:00 p.m. (eastern) October 23 until November 1, 2002 by dialing 1-800-408-3053 then entering passcode 1267407.
A live web cast of the conference call will also be available through the Partnership's website at www.tcpipelineslp.com. An audio replay of the call will be available on the website.
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. TransCanada also holds a minority general partner interest in Northern Border Partners, L.P. 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 Quarter 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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