 |
|
 |
|
|
|
|
|
|
|
TC PipeLines, LP Announces 2003 Second Quarter Results
CALGARY, Alberta - July 24, 2003 - (Nasdaq: TCLP) - TC PipeLines, LP (the Partnership) today reported second quarter 2003 net income of $12.0 million or $0.66 per unit (all amounts in U.S. dollars) compared to $12.2 million or $0.67 per unit in second quarter 2002. For the six months ended June 30, 2003, the Partnership reported net income of $23.9 million or $1.32 per unit compared to $24.1 million or $1.33 per unit for the same period last year.
The Partnership's second quarter 2003 cash generated from operations amounted to $10.9 million, compared to second quarter 2002 cash generated from operations of $12.9 million. For the six months ended June 30, 2003, cash generated from operations amounted to $24.4 million compared to $25.2 million for the same period last year. The decrease in 2003 cash generated from operations reflects lower cash flows from Northern Border Pipeline Company, due to refunds paid by Northern Border Pipeline to its shippers for electricity costs that had been previously collected through company use gas provisions. The impact of this decrease was partially offset by increased cash flows from Tuscarora Gas Transmission Company.
"We had fully anticipated that the refunds being made by Northern Border Pipeline would impact our cash flow this quarter," said Ron Turner, President and Chief Executive Officer of the general partner, TC PipeLines GP, Inc. "However, this did not affect our ongoing commitment to make further repayments on our revolving credit facility or our decision to increase our cash distribution to unitholders." During second quarter 2003, the Partnership repaid $3.0 million of principal on its revolving credit facility, reducing its debt outstanding to $5.5 million at June 30, 2003. On July 22, 2003, the Partnership announced its fourth quarterly cash distribution increase in as many years, raising its second quarter cash distribution by $0.025 per unit to $0.55 per unit.
"The recent success of Northern Border Pipeline's recontracting efforts reinforces our belief that shippers value the pipeline's transportation capacity because of its strategic location and competitive rates," said Turner. "We believe these sound fundamentals provide the Partnership with its foundation and enable us to provide our unitholders with steady, sustainable cash distributions."
In another development related to Northern Border Pipeline, effective July 4, 2003, all of the firm transportation capacity formerly held by Mirant Americas Energy Marketing, LP, which represents approximately 10% of Northern Border Pipeline's firm capacity with terms extending into 2006 and 2008, has been assigned to Cargill, Incorporated. Cargill also assumed the management services of Pan-Alberta Gas, Ltd., previously performed by Mirant. Pan-Alberta is currently Northern Border Pipeline's largest shipper and is obligated for approximately 20% of Northern Border Pipeline's contracted firm capacity. Pan-Alberta's contracts expire October 31, 2003.
Financial Highlights (unaudited)
(millions of U.S. dollars, except per unit amounts)
|
Three months ended June 30 |
Six months ended June 30 |
| |
2003 |
2002 |
2003 |
2002 |
| Net Income |
12.0 |
12.2 |
23.9 |
24.1 |
| Per unit (1) |
$0.66 |
$0.67 |
$1.32 |
$1.33 |
| Cash Generated from Operations |
10.9 |
12.9 |
24.4 |
25.2 |
| Cash Distributions Paid |
9.6 |
9.1 |
19.2 |
18.1 |
| Cash Distributions Declared per Unit (2) |
$0.55 |
$0.525 |
$1.075 |
$1.025 |
| Units Outstanding (millions) |
17.5 |
17.5 |
17.5 |
17.5 |
Net Income
The Partnership reported second quarter 2003 net income of $12.0 million or $0.66 per unit compared to $12.2 million or $0.67 per unit in second quarter 2002.
Equity income from Northern Border Pipeline amounted to $11.3 million in second quarter 2003 compared to $11.6 million for second quarter 2002. Consistent with first quarter 2003, Northern Border Pipeline incurred higher expenses related to electricity costs in second quarter 2003 compared to the same period last year. This increase in expenses was partially offset by lower interest expense in second quarter 2003 compared to the same period last year primarily due to lower average interest rates.
Equity income from Tuscarora amounted to $1.2 million in second quarter 2003 compared to $1.0 million for second quarter 2002. The increase is primarily due to incremental revenues from Tuscarora's expansion facilities, partially offset by increased operations and maintenance expenses and depreciation expense related to the new facilities.
The Partnership's second quarter 2003 general and administrative expenses were $0.4 million compared to $0.3 million for second quarter 2002. Financial charges of $0.1 million for second quarter 2003 were unchanged from second quarter 2002.
Cash Flow
The Partnership reported second quarter cash generated from operations of $10.9 million compared to $12.9 million for second quarter 2002, reflecting a lower cash distribution from Northern Border Pipeline, partially offset by a higher cash distribution from Tuscarora. In second quarter 2003, the Partnership received a cash distribution from Northern Border Pipeline amounting to $9.8 million compared to $12.2 million for second quarter 2002. The decrease is primarily due to refunds paid by Northern Border Pipeline to its shippers for electricity costs that had previously been collected through company use gas provisions. The Partnership also received a cash distribution from Tuscarora in second quarter 2003 amounting to $1.6 million compared to $1.2 million for second quarter 2002. The increase reflects Tuscarora's incremental cash inflows from new transportation contracts, including those related to Tuscarora's expansion facilities.
During second quarter 2003, the Partnership paid an aggregate $9.6 million of cash distributions to unitholders and its general partner, the equivalent of $0.525 per unit compared to $9.1 million, the equivalent of $0.50 per unit, in second quarter 2002. Also, in second quarter 2003, the Partnership made a $3.0 million principal repayment on its revolving credit facility, reducing its debt outstanding to $5.5 million at June 30, 2003.
Conference Call
The Partnership will hold a conference call Friday, July 25, 2003 at 9:00 a.m. (eastern). During this call, TC PipeLines, LP's senior executives will review the Partnership's second quarter 2003 results and discuss general developments and issues concerning the Partnership. Those interested in listening to the call may dial (800) 273-9672. A replay of the conference call will also be available after the call until August 1, 2003 by dialing (800) 408-3053 then entering passcode 1442346.
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 owns a 30% general partner interest in Northern Border Pipeline Company and a 49% general partner interest in Tuscarora Gas Transmission Company. The remaining 70% general partner interest in Northern Border Pipeline is owned by Northern Border Partners, L.P., a publicly traded master limited partnership controlled by affiliates of Enron Corp. Northern Border Pipeline 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 240-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's general partner is a wholly owned subsidiary of TransCanada PipeLines Limited, which 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 Second Quarter Financial Highlights
Media Inquiries:
Hejdi Feick / Kurt Kadatz
(403) 920-7859
Unitholder and Analyst Inquiries:
David Moneta / Debbie Stein
Toll-free (877) 290-2772
investor_relations@tcpipelineslp.com
|
|
|
|
|
|
|
