Date
of Report (Date of earliest event reported) February
22, 2008
|
TC
PipeLines, LP
|
(Exact
name of registrant as specified in its
charter)
|
Delaware
|
000-26091
|
52-2135448
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File
Number)
|
(IRS
Employer
Identification
No.)
|
13710
FNB Parkway
Omaha,
Nebraska
|
68154-5200
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant’s
telephone number, including area code
|
(877)
290-2772
|
110
Turnpike Road, Suite 203, Westborough, Massachusetts
01581
|
(Former
name or former address if changed since last
report)
|
¨
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
¨
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
|
¨
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c))
|
|
99.1
|
Press
Release dated February 22, 2008.
|
Three
months ended
December
31
|
Twelve
months ended
December
31
|
|||||||||||||||
(unaudited)
|
||||||||||||||||
(millions
of dollars except per common unit amounts)
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Net
income
|
26.7
|
11.3
|
89.0
|
44.7
|
||||||||||||
Per
common unit (1)
|
$ |
0.70
|
$ |
0.60
|
$ |
2.51
|
$ |
2.39
|
||||||||
Partnership
cash
flows (2)
|
41.3
|
19.2
|
134.7
|
69.9
|
||||||||||||
Cash
distributions paid
|
25.4
|
11.3
|
86.7
|
43.5
|
||||||||||||
Cash
distributions declared per
common unit (3)
|
$ |
0.665
|
$ |
0.60
|
$ |
2.63
|
$ |
2.35
|
||||||||
Weighted
average common units oustanding (millions)
|
34.9
|
17.5
|
32.3
|
17.5
|
||||||||||||
Common
units outstanding (millions)
|
34.9
|
17.5
|
34.9
|
17.5
|
(1)
Net income
per common unit is computed by dividing net income, after deduction
of the
general partner's allocation, by the weighted average number of
common
units outstanding. The general partner's allocation is computed
based upon
the general partner's two per cent interest plus an amount equal
to
incentive distributions.
|
|||||||
(2)
Partnership
cash flows is a non-GAAP financial measure. Refer to the
section entitled "Partnership Cash Flows" for further
detail.
|
|||||||
(3)
The
Partnership's 2007 fourth quarter cash distribution was paid on
February
14, 2008 to unitholders of record as of January 31,
2008.
|
|||||||
Three
months ended
December
31
|
Twelve
months ended
December
31
|
|||||||||||||||
(unaudited)
|
||||||||||||||||
(millions
of dollars except per common unit amounts)
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Total
cash distributions received (a)
|
44.1
|
25.8
|
147.6
|
88.1
|
||||||||||||
Cash
flows from Tuscarora's operating activities (b)
|
5.2
|
-
|
19.9
|
-
|
||||||||||||
Partnership
costs (c)
|
(8.0 | ) | (6.6 | ) | (32.8 | ) | (18.2 | ) | ||||||||
Partnership
cash flows (c)
|
41.3
|
19.2
|
134.7
|
69.9
|
||||||||||||
Partnership
cash flows per common unit
|
$ |
1.18
|
$ |
1.10
|
$ |
4.17
|
$ |
3.99
|
||||||||
Cash
distributions paid
|
(25.4 | ) | (11.3 | ) | (86.7 | ) | (43.5 | ) | ||||||||
Cash
distributions paid per common unit
|
$ |
0.660
|
$ |
0.600
|
$ |
2.565
|
$ |
2.325
|
(a)
Reconciliation of non-GAAP financial measure: Total cash
distributions received is a non-GAAP financial measure which is
the sum of
equity income from investment in Great Lakes, return of capital
from Great
Lakes, equity income from investment in Northern Border, return
of capital
from Northern Border and up until December 19, 2006, equity income
from
investment in Tuscarora and return of capital from Tuscarora. It
is
provided as a supplement to results reported in accordance with
GAAP.
Management believes that this is a meaningful measure to assist
investors
in evaluating the levels of cash distributions from the Partnership's
investments. Below is a reconciliation of total cash distributions
received to GAAP financial
measures:
|
Three
months ended
December
31
|
Twelve
months ended
December
31
|
|||||||||||||||
(millions
of dollars)
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Equity
income from investment in Great Lakes
|
14.7
|
-
|
49.0
|
-
|
||||||||||||
Return
of capital from Great Lakes
|
5.6
|
-
|
12.3
|
-
|
||||||||||||
Cash
distributions from Great Lakes
|
20.3
|
-
|
61.3
|
-
|
||||||||||||
Equity
income from investment in Northern Border
|
16.9
|
16.5
|
61.2
|
56.6
|
||||||||||||
Return
of capital from Northern Border
|
6.9
|
7.8
|
25.1
|
23.8
|
||||||||||||
Cash
distributions from Northern Border
|
23.8
|
24.3
|
86.3
|
80.4
|
||||||||||||
Equity
income from investment in Tuscarora
|
-
|
1.0
|
-
|
5.9
|
||||||||||||
Return
of capital from Tuscarora
|
-
|
0.5
|
-
|
1.8
|
||||||||||||
Cash
distributions from Tuscarora
|
-
|
1.5
|
-
|
7.7
|
||||||||||||
Total
cash distributions received
|
44.1
|
25.8
|
147.6
|
88.1
|
(b)
The
Partnership accounted for its investment in Tuscarora using the equity
method until December 19, 2006 and began consolidating Tuscarora's
operations upon acquisition of an additional 49 per cent general
partner
interest. Cash flows from Tuscarora's operating activities is the
GAAP
measure cash generated from operations reported in Tuscarora's financial
statements. Cash flows from Tuscarora's operating activities for
2006 have
not been included in the above analysis as the Partnership effectively
accounted for Tuscarora on a consolidated basis for only the last
11 days
of the year.
|
|||||||
(c)
Reconciliation of non-GAAP financial measure: Partnership cash
flows is a non-GAAP financial measure which is the sum of cash
distributions received and cash flows from Tuscarora's operating
activities less Partnership costs. We exclude Tuscarora's costs
from the Partnership costs so that investors may evaluate our costs
independent of costs directly attributable to our
investments. Management believes that this is a useful measure
to assist investors in evaluating the Partnership's cash flow from
its
operating activities. A reconciliation of Partnership costs is summarized
below:
|
|||||||
Three
months ended
December
31
|
Twelve
months ended
December
31
|
|||||||||||||||
(millions
of dollars)
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Operating
expenses
|
1.9
|
0.9
|
8.3
|
2.7
|
||||||||||||
Financial
charges, net and other
|
8.3
|
6.0
|
33.8
|
15.8
|
||||||||||||
Less:
|
||||||||||||||||
Operating
expenses and financial charges from Tuscarora
|
(2.2 | ) | (0.3 | ) | (9.3 | ) | (0.3 | ) | ||||||||
Partnership
costs
|
8.0
|
6.6
|
32.8
|
18.2
|
Media
Inquiries:
|
Shela
Shapiro / Cecily Dobson
|
(403)
920-7859
|
(800)
608-7859
|
||
Unitholder
and Analyst Inquiries:
|
Myles
Dougan
|
(877)
290-2772
investor_relations@tcpipelineslp.com
|
Consolidated
Statement of Income
|
||||||||||||||||
Three
months ended
December
31
|
Twelve
months ended
December
31
|
|||||||||||||||
(unaudited)
|
||||||||||||||||
(millions
of dollars except per common unit amounts)
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Equity
income from investment in Great Lakes (1)
|
14.7
|
-
|
49.0
|
-
|
||||||||||||
Equity
income from investment in Northern Border (2)
|
16.9
|
16.5
|
61.2
|
56.6
|
||||||||||||
Equity
income from investment in Tuscarora
(3)
|
-
|
1.0
|
-
|
5.9
|
||||||||||||
Transmission
revenues
|
6.9
|
0.9
|
27.2
|
0.9
|
||||||||||||
Operating
expenses
|
(1.9 | ) | (0.9 | ) | (8.3 | ) | (2.7 | ) | ||||||||
Depreciation
|
(1.6 | ) | (0.2 | ) | (6.3 | ) | (0.2 | ) | ||||||||
Financial
charges, net and other
|
(8.3 | ) | (6.0 | ) | (33.8 | ) | (15.8 | ) | ||||||||
Net
income
|
26.7
|
11.3
|
89.0
|
44.7
|
||||||||||||
Net
income allocation
|
||||||||||||||||
Common
units
|
24.3
|
10.5
|
81.3
|
41.8
|
||||||||||||
General
partner
|
2.4
|
0.8
|
7.7
|
2.9
|
||||||||||||
26.7
|
11.3
|
89.0
|
44.7
|
|||||||||||||
Net
income per common unit (4)
|
$ |
0.70
|
$ |
0.60
|
$ |
2.51
|
$ |
2.39
|
||||||||
Weighted
average common units outstanding
(millions)
|
34.9
|
17.5
|
32.3
|
17.5
|
||||||||||||
Common
units outstanding, end of the period
(millions)
|
34.9
|
17.5
|
34.9
|
17.5
|
||||||||||||
Consolidated
Balance Sheet
|
||||||||
(unaudited)
|
||||||||
(millions
of dollars)
|
December
31, 2007
|
December
31, 2006
|
||||||
ASSETS
|
||||||||
Current
Assets
|
||||||||
Cash
and short-term investments
|
6.8
|
4.0
|
||||||
Accounts
receivable and other
|
4.2
|
2.5
|
||||||
11.0
|
6.5
|
|||||||
Investment
in Great Lakes (1)
|
721.1
|
-
|
||||||
Investment
in Northern Border (2)
|
541.9
|
561.2
|
||||||
Plant,
property and equipment
|
134.1
|
127.0
|
||||||
Goodwill
|
81.7
|
79.2
|
||||||
Other
assets
|
2.8
|
3.9
|
||||||
1,492.6
|
777.8
|
|||||||
LIABILITIES
AND PARTNERS' EQUITY
|
||||||||
Current
Liabilities
|
||||||||
Bank
indebtedness
|
1.4
|
-
|
||||||
Accounts
payable
|
4.8
|
3.3
|
||||||
Accrued
interest
|
3.0
|
1.3
|
||||||
Current
portion of long-term debt
|
4.6
|
4.7
|
||||||
13.8
|
9.3
|
|||||||
Hedging
deferrals
|
9.9
|
-
|
||||||
Long-term
debt
|
568.8
|
463.4
|
||||||
592.5
|
472.7
|
|||||||
Non-controlling
interests
|
-
|
1.2
|
||||||
Partners'
Equity
|
||||||||
Common
units
|
892.3
|
295.6
|
||||||
General
partner
|
19.1
|
6.5
|
||||||
Accumulated
other comprehensive (loss)/income
|
(11.3 | ) |
1.8
|
|||||
900.1
|
303.9
|
|||||||
1,492.6
|
777.8
|
Consolidated
Statement of Cash Flows
|
||||||||||||||||
Three
months ended
December
31
|
Twelve
months ended
December
31
|
|||||||||||||||
(unaudited)
|
||||||||||||||||
(millions
of dollars)
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
CASH
GENERATED FROM OPERATIONS
|
||||||||||||||||
Net
income
|
26.7
|
11.3
|
89.0
|
44.7
|
||||||||||||
Depreciation
|
1.6
|
0.2
|
6.3
|
0.2
|
||||||||||||
Amortization
of other assets
|
0.1
|
0.7
|
0.4
|
0.9
|
||||||||||||
Non-controlling
interests
|
-
|
-
|
0.2
|
-
|
||||||||||||
Equity
allowance for funds used during construction
|
(0.1 | ) |
-
|
(0.2 | ) |
-
|
||||||||||
Decrease/(increase)
in operating working capital
|
2.2
|
(4.2 | ) |
2.9
|
0.3
|
|||||||||||
30.5
|
8.0
|
98.6
|
46.1
|
|||||||||||||
INVESTING
ACTIVITIES
|
||||||||||||||||
Return
of capital from Great Lakes
|
5.6
|
-
|
12.3
|
-
|
||||||||||||
Return
of capital from Northern Border
|
6.9
|
7.8
|
25.1
|
23.8
|
||||||||||||
Return
of capital from Tuscarora
|
-
|
0.5
|
-
|
1.8
|
||||||||||||
Investment
in Great Lakes
|
-
|
-
|
(733.0 | ) |
-
|
|||||||||||
Investment
in Northern Border
|
-
|
-
|
(7.5 | ) | (311.1 | ) | ||||||||||
Investment
in Tuscarora, net of cash acquired
|
(3.9 | ) | (97.2 | ) | (3.9 | ) | (97.2 | ) | ||||||||
Increase
in cash due to the consolidation of Tuscarora
|
-
|
2.6
|
-
|
2.6
|
||||||||||||
Capital
expenditures
|
(8.9 | ) |
-
|
(13.2 | ) |
-
|
||||||||||
Other
assets
|
0.1
|
(1.0 | ) | (1.2 | ) | (1.9 | ) | |||||||||
(0.2 | ) | (87.3 | ) | (721.4 | ) | (382.0 | ) | |||||||||
FINANCING
ACTIVITIES
|
||||||||||||||||
Distributions
paid
|
(25.4 | ) | (11.3 | ) | (86.7 | ) | (43.5 | ) | ||||||||
Equity
issuances, net
|
-
|
-
|
607.0
|
-
|
||||||||||||
Long-term
debt issued
|
19.0
|
397.0
|
171.5
|
707.0
|
||||||||||||
Long-term
debt repaid
|
(31.3 | ) | (309.4 | ) | (66.2 | ) | (325.9 | ) | ||||||||
(37.7 | ) |
76.3
|
625.6
|
337.6
|
||||||||||||
(Decrease)/increase
in cash and short-term investments
|
(7.4 | ) | (3.0 | ) |
2.8
|
1.7
|
||||||||||
Cash
and short-term investments, beginning of period
|
14.2
|
7.0
|
4.0
|
2.3
|
||||||||||||
Cash
and short-term investments, end of period
|
6.8
|
4.0
|
6.8
|
4.0
|
||||||||||||
Interest
payments made
|
10.4
|
8.6
|
34.3
|
13.9
|
Three
months ended
December
31
|
For
the period February 23
to
December 31
|
|||||||||
(unaudited)
|
2007
|
2006
|
2007
|
2006
|
||||||
Operating
Results
|
||||||||||
Gas
delivered (million cubic feet)
|
203,164
|
693,017
|
||||||||
Average
throughput (million cubic feet per day)
|
2,208
|
2,221
|
||||||||
Financial
Results (millions of dollars)
|
||||||||||
Transmission
revenues
|
74.0
|
236.2
|
||||||||
Operating
expenses
|
(19.7 | ) | (53.7 | ) | ||||||
Depreciation
|
(14.5 | ) | (49.4 | ) | ||||||
Financial
charges, net and other
|
(8.1 | ) | (27.6 | ) | ||||||
Net
income
|
31.7
|
105.5
|
||||||||
Capital
Expenditures (millions of dollars)
|
||||||||||
Maintenance
|
11.0
|
16.7
|
December 31, | December 31, | ||||||
2007
|
2006
|
||||||
Summary
Balance Sheet Data (millions of dollars)
|
(unaudited)
|
(unaudited)
|
|||||
Total
assets
|
1,056.7
|
||||||
Other
current liabilities and deferred credits
|
51.1
|
||||||
Long-term
debt (including current maturities)
|
440.0
|
||||||
Partners'
capital
|
565.6
|
||||||
Total
liabilities and partners' equity
|
1,056.7
|
Three
months ended
December
31
|
Twelve
months ended
December
31
|
|||||||||||||||
(unaudited)
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Operating
Results
|
||||||||||||||||
Gas
delivered (million cubic feet)
|
198,153
|
195,361
|
799,637
|
799,301
|
||||||||||||
Average
throughput (million cubic feet per day)
|
2,208
|
2,178
|
2,247
|
2,246
|
||||||||||||
Financial
Results (millions of dollars)
|
||||||||||||||||
Transmission
revenues
|
81.4
|
79.4
|
309.4
|
310.9
|
||||||||||||
Operating
expenses
|
(21.8 | ) | (20.9 | ) | (83.5 | ) | (81.0 | ) | ||||||||
Depreciation
|
(15.1 | ) | (14.7 | ) | (60.7 | ) | (58.7 | ) | ||||||||
Financial
charges, net and other
|
(10.2 | ) | (10.3 | ) | (41.1 | ) | (41.3 | ) | ||||||||
Net
income
|
34.3
|
33.5
|
124.1
|
129.9
|
||||||||||||
Capital
Expenditures (millions of dollars)
|
||||||||||||||||
Maintenance
|
3.2
|
3.7
|
10.6
|
10.4
|
||||||||||||
Growth
|
-
|
0.2
|
-
|
10.5
|
||||||||||||
December
31,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
Summary
Balance Sheet Data (millions of dollars)
|
(unaudited)
|
(unaudited)
|
||||||
Total
assets
|
1,514.9
|
1,544.7
|
||||||
Current
liabilities and deferred credits and other
|
61.5
|
49.8
|
||||||
Long-term
debt (including current maturities)
|
615.3
|
619.8
|
||||||
Partners'
capital
|
840.5
|
874.1
|
||||||
Accumulated
other comprehensive (loss)/income
|
(2.4 | ) |
1.0
|
|||||
Total
liabilities and partners' equity
|
1,514.9
|
1,544.7
|
Three
months ended
December
31
|
Twelve
months ended
December
31
|
|||||||||||||||
(unaudited)
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Operating
Results
|
||||||||||||||||
Gas
delivered (million
cubic feet)
|
7,966
|
8,216
|
28,257
|
28,067
|
||||||||||||
Average
throughput
(million cubic feet per day)
|
87
|
89
|
77
|
77
|
||||||||||||
Financial
Results (millions
of dollars)
|
||||||||||||||||
Transmission
revenues
|
6.9
|
6.9
|
27.2
|
29.5
|
||||||||||||
Operating
expenses
|
(1.2 | ) | (1.3 | ) | (4.9 | ) | (4.7 | ) | ||||||||
Depreciation
|
(1.6 | ) | (1.5 | ) | (6.3 | ) | (6.2 | ) | ||||||||
Financial
charges, net and other
|
(1.0 | ) | (1.4 | ) | (4.4 | ) | (5.3 | ) | ||||||||
Net
income
|
3.1
|
2.7
|
11.6
|
13.3
|
||||||||||||
Cash
Flows From Operating
Activities (*) (millions
of
dollars)
|
||||||||||||||||
Net
income
|
3.1
|
2.7
|
11.6
|
13.3
|
||||||||||||
Add:
|
||||||||||||||||
Depreciation
|
1.6
|
1.5
|
6.3
|
6.2
|
||||||||||||
Amortization
of debt issuance costs
|
-
|
-
|
0.1
|
0.1
|
||||||||||||
Equity
allowance for funds used during construction
|
(0.1 | ) |
-
|
(0.2 | ) |
-
|
||||||||||
Changes
in operating assets and liabilities
|
0.6
|
(0.6 | ) |
2.1
|
0.9
|
|||||||||||
Cash
flows from operating activities
|
5.2
|
3.6
|
19.9
|
20.5
|
||||||||||||
Capital
Expenditures (millions of
dollars)
|
||||||||||||||||
Maintenance
|
0.1
|
-
|
0.1
|
0.3
|
||||||||||||
Growth
|
8.7
|
1.3
|
13.1
|
1.3
|
December
31,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
Summary
Balance Sheet
Data (millions of dollars)
|
(unaudited)
|
(unaudited)
|
||||||
Total
assets
|
143.4
|
132.9
|
||||||
Other
current liabilities
|
6.1
|
2.4
|
||||||
Long-term
debt (including
current maturities)
|
66.4
|
71.1
|
||||||
Partners'
capital
|
70.9
|
59.3
|
||||||
Accumulated
other comprehensive income
|
-
|
0.1
|
||||||
Total
liabilities and partners' equity
|
143.4
|
132.9
|