UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON,
D.C. 20549
___________
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 or 15(d) of
the Securities Exchange Act of 1934
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Date
of Report (Date of earliest event reported)
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February 20,
2009
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TC PipeLines,
LP
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(Exact
name of registrant as specified in its
charter)
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Delaware
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000-26091
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52-2135448
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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13710 FNB
Parkway
Omaha,
Nebraska
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68154-5200
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code
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(877)
290-2772
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(Former
name or former address if changed since last
report)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange
Act
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(17
CFR 240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange
Act
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(17
CFR 240.13e-4(c))
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On
February 20, 2009, the Partnership issued a press release announcing
financial results for the Partnership's 2008 fourth quarter and fiscal year
2008 earnings. A copy of the press release is furnished with this
report as Exhibit 99.1, and is incorporated herein by
reference.
In accordance with General
Instruction B.2. of Form 8-K, the information in this Item 2.02 and Exhibit
99.1 hereto are being furnished and are not deemed to be “filed” for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended, and are not
otherwise subject to the liabilities of that section. Accordingly, the
information in this Item 2.02 and Exhibit 99.1 hereto will not be
incorporated by reference into any filing made by the Partnership under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, unless specifically identified therein as being incorporated therein by
reference.
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(d)
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Exhibits.
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99.1
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Press Release dated February 20, 2009. |
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
TC PipeLines, LP
by: TC
PipeLines GP, Inc.,
its
general partner
By: /s/ Amy W.
Leong
Amy W.
Leong
Principal
Financial Officer and Controller
Dated: February
20, 2009
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EXHIBIT
INDEX
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Exhibit
No.
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Description
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99.1
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Press
Release dated February 20, 2009.
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Exhibit
99.1
NewsRelease
TC
PipeLines, LP Reports 2008 Fourth Quarter Results
CALGARY,
Alberta – February 20, 2009 – (Nasdaq: TCLP) – TC PipeLines, LP (the Partnership
or PipeLP) today reported fourth quarter 2008 net income of $26.6 million or
$0.67 per common unit (all amounts in U.S. dollars), a decrease of $0.1 million
compared to $26.7 million or $0.70 per common unit for the same period last
year.
For the
year ended December 31, 2008, the Partnership reported net income of $107.7
million or $2.75 per common unit, an increase of $18.7 million compared to $89.0
million or $2.51 per common unit for 2007. The increase in net income is
primarily due to increased financial results from each of the Partnership’s
pipeline systems, combined with a reduction in costs at the Partnership
level.
Partnership
cash flows (please see the Partnership Cash Flows section for more detail)
decreased $5.5 million to $34.7 million for fourth quarter of 2008 compared to
$40.2 million for the same period last year. This decrease was primarily due to
lower cash distributions received from Great Lakes Gas Transmission Limited
Partnership (Great Lakes or GLGT) and Northern Border Pipeline Company (Northern
Border or NBPC), partially offset by lower costs at the Partnership
level.
For the
year ended December 31, 2008, Partnership cash flows increased $23.8 million to
$156.2 million compared to $132.4 million in 2007. This increase was primarily
due to higher cash distributions received from Great Lakes and Northern Border,
increased cash flows provided by Tuscarora Gas Transmission Company’s (Tuscarora
or TGTC) operating activities and lower costs at the Partnership
level.
Cash
distributions paid by the Partnership were $27.8 million or $0.705 per common
unit in fourth quarter 2008, an increase of $2.4 million compared to $25.4
million or $0.66 per common unit for the same period last year.
Cash
distributions paid by the Partnership in 2008 were $108.6 million or $2.775 per
common unit, an increase of $21.9 million compared to $86.7 million or $2.565
per common unit in 2007.
“The
Partnership’s higher earnings and cash flow in 2008 demonstrate our ability to
generate enduring value for our unitholders despite uncertain economic times,”
said Russ Girling, chairman and chief executive officer of TC PipeLines GP, Inc.
“We are well positioned to continue to deliver solid financial results and last
month announced our quarterly cash distribution of $0.705 per common unit,
equivalent to third quarter 2008 and a six per cent increase over fourth quarter
2007.”
“Ongoing
solid cash flows from our quality asset base, a strong balance sheet and
financial liquidity give us the capacity to grow in a sustained and disciplined
manner,” continued Girling. “Our focus remains unchanged in 2009 and we will
continue to look for growth opportunities for the long term benefit of our
unitholders.”
Financial
Highlights
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(unaudited)
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Three
months ended
December
31,
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Twelve
months ended
December
31,
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||||||||||||||
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(millions
of dollars except per common unit amounts)
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2008
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2007
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2008
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2007
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||||||||||||
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Net
income
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26.6 | 26.7 | 107.7 | 89.0 | ||||||||||||
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Per
common unit (1)
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$ | 0.67 | $ | 0.70 | $ | 2.75 | $ | 2.51 | ||||||||
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Partnership cash
flows (2)
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34.7 | 40.2 | 156.2 | 132.4 | ||||||||||||
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Cash
distributions paid
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27.8 | 25.4 | 108.6 | 86.7 | ||||||||||||
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Cash distributions declared per
common unit (3)
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$ | 0.705 | $ | 0.665 | $ | 2.815 | $ | 2.630 | ||||||||
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Weighted
average common units outstanding
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||||||||||||||||
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(millions)
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34.9 | 34.9 | 34.9 | 32.3 | ||||||||||||
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Common
units outstanding at end of period
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||||||||||||||||
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(millions)
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34.9 | 34.9 | 34.9 | 34.9 | ||||||||||||
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(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. Refer to the
Financial Summary tables for the net income allocation to common
units.
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(2)
Partnership cash flows is a non-GAAP financial measure. Refer to the
section entitled “Partnership Cash Flows” for further
detail.
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(3)
The Partnership’s 2008 fourth quarter cash distribution was paid on
February 13, 2009 to unitholders of record as of January 30,
2009.
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Net
Income
The
following net income information is presented to enhance investors’
understanding of the way that management analyzes the Partnership’s financial
performance:
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The
shaded areas in the tables below disclose the results from Great Lakes and
Northern Border, representing 100 per cent of each entity's operations for
the given period.
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|||||||||||||||||||||
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(unaudited)
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For
the three months ended December 31, 2008
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For
the twelve months ended December 31, 2008
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|||||||||||||||||||
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(millions
of dollars)
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PipeLP
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TGTC(1)
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Other
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GLGT(2)
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NBPC(3)
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PipeLP
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TGTC(1)
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Other
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GLGT(2)
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NBPC(3)
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|||||||||||
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Transmission
revenues
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8.3 | 8.3 | - | 73.2 | 80.3 | 31.6 | 31.6 | - | 287.1 | 293.1 | |||||||||||
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Operating
expenses
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(2.7 | ) | (1.7 | ) | (1.0 | ) | (21.2 | ) | (20.5 | ) | (9.5 | ) | (5.4 | ) | (4.1 | ) | (67.1 | ) | (78.0 | ) | |
| 5.6 | 6.6 | (1.0 | ) | 52.0 | 59.8 | 22.1 | 26.2 | (4.1 | ) | 220.0 | 215.1 | ||||||||||
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Depreciation
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(1.8 | ) | (1.8 | ) | - | (14.6 | ) | (15.3 | ) | (6.9 | ) | (6.9 | ) | - | (58.5 | ) | (61.1 | ) | |||
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Financial
charges, net and other
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(7.3 | ) | (1.2 | ) | (6.1 | ) | (8.2 | ) | (9.7 | ) | (30.1 | ) | (4.3 | ) | (25.8 | ) | (32.6 | ) | (21.8 | ) | |
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Michigan
business tax
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- | - | - | (1.3 | ) | - | - | - | - | (5.5 | ) | - | |||||||||
| 27.9 | 34.8 | 123.4 | 132.2 | ||||||||||||||||||
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Equity
income
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30.1 | - | - | 12.9 | 17.2 | 122.6 | - | - | 57.3 | 65.3 | |||||||||||
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Net
income
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26.6 | 3.6 | (7.1 | ) | 12.9 | 17.2 | 107.7 | 15.0 | (29.9 | ) | 57.3 | 65.3 | |||||||||
2
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(unaudited)
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For
the three months ended December 31, 2007
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For
the twelve months ended December 31, 2007
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|||||||||||||||||||
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(millions
of dollars)
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PipeLP
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TGTC(1)
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Other
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GLGT(2)
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NBPC(3)
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PipeLP
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TGTC(1)
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Other
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GLGT(2)
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NBPC(3)
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|||||||||||
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Transmission
revenues
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6.9 | 6.9 | - | 74.0 | 81.4 | 27.2 | 27.2 | - | 236.2 | 309.4 | |||||||||||
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Operating
expenses
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(1.9 | ) | (1.2 | ) | (0.7 | ) | (19.7 | ) | (21.8 | ) | (8.3 | ) | (4.9 | ) | (3.4 | ) | (53.7 | ) | (83.5 | ) | |
| 5.0 | 5.7 | (0.7 | ) | 54.3 | 59.6 | 18.9 | 22.3 | (3.4 | ) | 182.5 | 225.9 | ||||||||||
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Depreciation
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(1.6 | ) | (1.6 | ) | - | (14.5 | ) | (15.1 | ) | (6.3 | ) | (6.3 | ) | - | (49.4 | ) | (60.7 | ) | |||
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Financial
charges, net and other
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(8.3 | ) | (1.0 | ) | (7.3 | ) | (8.1 | ) | (10.2 | ) | (33.8 | ) | (4.4 | ) | (29.4 | ) | (27.6 | ) | (41.1 | ) | |
| 31.7 | 34.3 | 105.5 | 124.1 | ||||||||||||||||||
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Equity
income
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31.6 | - | - | 14.7 | 16.9 | 110.2 | - | - | 49.0 | 61.2 | |||||||||||
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Net
income
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26.7 | 3.1 | (8.0 | ) | 14.7 | 16.9 | 89.0 | 11.6 | (32.8 | ) | 49.0 | 61.2 | |||||||||
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(1)
The Partnership owns a 100 per cent general partner interest in Tuscarora
following the acquisition of an additional two per cent interest on
December 31, 2007.
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(2)
The Partnership acquired a 46.45 per cent general partner interest in
Great Lakes on February 22, 2007; therefore, the amounts for the prior
year only include results for the period of February 23 to December 31,
2007.
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(3)
The Partnership owns a 50 per cent general partner interest in Northern
Border. Equity income from Northern Border includes amortization of a
$10.0 million transaction fee paid to the operator of Northern Border at
the time of the additional 20 per cent acquisition in April
2006.
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Fourth
Quarter 2008
Net
income decreased $0.1 million to $26.6 million in fourth quarter of 2008,
compared to $26.7 million in fourth quarter of 2007.
Equity
income from Great Lakes was $12.9 million in fourth quarter of 2008, a decrease
of $1.8 million compared to the same period last year. The decrease in equity
income was primarily due to increased operating expenses and Michigan Business
Tax (a partnership level tax that was instituted in 2008). At Great Lakes’
level, operating expenses increased $1.5 million for the three months ended
December 31, 2008 compared to the same period last year primarily due to system
integration costs incurred in 2008 and increased pipeline integrity costs,
partially offset by decreased other non-income taxes.
Equity
income from Northern Border increased by $0.3 million to $17.2 million in fourth
quarter of 2008 compared to the same period last year. This is primarily due to
decreased operating expenses, partially offset by lower transmission revenues.
At Northern Border’s level, operating expenses decreased $1.3 million for the
three months ended December 31, 2008 compared to the same period last year
primarily due to decreased corporate charges and shared services. Northern
Border’s transmission revenues decreased $1.1 million in fourth quarter of 2008
compared to the same period last year due primarily to a decrease in firm demand
revenue resulting from the negative impact of excess natural gas supply from the
Rockies Basin into the Mid-Continent market from the in-service of the western
segment of the Rockies Express Pipeline, partially offset by an increase in
revenue from other transportation service due to changes in the
market.
Tuscarora’s
net income was $3.6 million in fourth quarter of 2008, an increase of $0.5
million compared to the same period last year. The increase in net income is
primarily due to increased transmission revenues resulting from a firm
transportation service contract that supported the
Likely compressor station expansion that went into service on April 1,
2008.
Costs at
the Partnership level were $7.1 million in fourth quarter of 2008, a decrease of
$0.9 million compared to the same period last year. This decrease relates
primarily to decreased financial charges due to lower interest rates and average
debt outstanding, partially offset by losses on interest rate derivatives over
the same period in 2007.
3
Year
Ended December 31, 2008
Net
income increased $18.7 million to $107.7 million in 2008 compared to $89.0
million in 2007. This increase is primarily due to improved financial results
from each of the Partnership’s pipeline systems, combined with a reduction in
costs at the Partnership level.
Equity
income from Great Lakes was $57.3 million in 2008, an increase of $8.3 million
compared to 2007. The increase in equity income is primarily due to the timing
of the Great Lakes acquisition, which resulted in a full first quarter of income
contribution in 2008 as compared to 37 days in the first quarter of 2007. In
addition, Great Lakes experienced an overall increase in transmission revenues
in 2008 as compared to 2007, offset by increased operating expenses and the
implementation of Michigan Business Tax effective January 1, 2008. Transmission
revenues increased primarily due to increased sales of short-term firm
transportation services at higher average transportation rates, as well as
increased transport of interruptible services and storage related services,
offset by decreased long-term services. Operating expenses increased primarily
due to integration costs related to its acquisition, employee benefit costs, and
pipeline integrity costs, partially offset by decreased property and other
non-income taxes and lower main engine repair costs.
Equity
income from Northern Border increased $4.1 million in 2008 to $65.3 million
compared to 2007. The
increase in equity income is primarily due to a $16.2 million (Partnership share
- - $8.1 million) gain on the sale of Bison Pipeline LLC. Excluding this gain,
Northern Border’s net income decreased $4.0 million compared to the prior year
due to a decrease in transmission revenues, partially offset by decreased
financial charges and operating expenses. Northern Border’s transmission
revenues decreased in 2008 compared to the prior year primarily due to a
decrease in contracted capacity as natural gas supply from the Rockies Basin
into the Mid-Continent market from the in-service of the western segment of the
Rockies Express Pipeline impacted demand. Interest expense decreased in 2008
compared to the prior year due to lower interest rates. Operating expenses
decreased in 2008 compared to 2007 primarily due to decreased taxes other than
income and a $2.3 million transition related charge in 2007 related to the
reimbursement for shared equipment and furnishings, partially offset by
increased electric compressor charges.
Tuscarora’s
net income was $15.0 million in 2008, an increase of $3.4 million compared to
2007. The increase in net income is primarily due to increased transmission
revenues resulting from a firm transportation service contract which
supported the
Likely compressor station expansion that went into service on April 1, 2008.
Costs at
the Partnership level decreased by $2.9 million to $29.9 million in 2008
compared to 2007. This decrease relates primarily to lower financial charges as
a result of lower interest rates and average debt outstanding, partially offset
by losses on interest rate derivatives.
Partnership
Cash Flows
The
Partnership uses the non-GAAP financial measures ‘Partnership cash flows’ and
‘Partnership cash flows allocated to common units’ as financial performance
measures. As the
Partnership’s financial performance underpins the availability of cash flows to
fund the cash distributions that the Partnership pays to its unitholders, the
Partnership believes these are key measures of the available cash flows to its
unitholders. The following
Partnership cash flows information is presented to enhance investors’
understanding of the way that management analyzes the Partnership’s financial
performance. Partnership
cash flows and Partnership cash flows allocated to common units are provided as
a supplement to GAAP financial results and are not meant to be considered in
isolation or as substitutes for financial results prepared in accordance with
GAAP.
4
|
(unaudited)
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Three
months ended
December
31,
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Twelve
months ended
December
31,
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||||||||||||||
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(millions
of dollars except per common unit amounts)
|
2008
|
2007
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2008
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2007
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||||||||||||
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Net
Income
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26.6 | 26.7 | 107.7 | 89.0 | ||||||||||||
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Add:
|
||||||||||||||||
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Cash
distributions from Great Lakes
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18.9 | 20.3 | 73.9 | 61.3 | ||||||||||||
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Cash
distributions from Northern Border
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18.7 | 23.8 | 90.7 | 86.3 | ||||||||||||
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Cash
flows provided by Tuscarora's operating activities
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4.2 | 4.1 | 21.5 | 17.6 | ||||||||||||
| 41.8 | 48.2 | 186.1 | 165.2 | |||||||||||||
|
Less:
|
||||||||||||||||
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Equity
income from investment in Great Lakes
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(12.9 | ) | (14.7 | ) | (57.3 | ) | (49.0 | ) | ||||||||
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Equity
income from investment in Northern Border
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(17.2 | ) | (16.9 | ) | (65.3 | ) | (61.2 | ) | ||||||||
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Tuscarora's
net income
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(3.6 | ) | (3.1 | ) | (15.0 | ) | (11.6 | ) | ||||||||
| (33.7 | ) | (34.7 | ) | (137.6 | ) | (121.8 | ) | |||||||||
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Partnership
cash flows
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34.7 | 40.2 | 156.2 | 132.4 | ||||||||||||
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Partnership
cash flows allocated to general partner (1)
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(3.2 | ) | (2.4 | ) | (11.8 | ) | (7.7 | ) | ||||||||
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Partnership
cash flows allocated to common units
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31.5 | 37.8 | 144.4 | 124.7 | ||||||||||||
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Cash
distributions declared
|
(27.8 | ) | (25.6 | ) | (110.8 | ) | (101.0 | ) | ||||||||
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Cash
distributions declared per common unit (2)
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$ | 0.705 | $ | 0.665 | $ | 2.815 | $ | 2.630 | ||||||||
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Cash
distributions paid
|
(27.8 | ) | (25.4 | ) | (108.6 | ) | (86.7 | ) | ||||||||
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Cash
distributions paid per common unit (2)
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$ | 0.705 | $ | 0.660 | $ | 2.775 | $ | 2.565 | ||||||||
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Weighted
average common units outstanding (millions)
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34.9 | 34.9 | 34.9 | 32.3 | ||||||||||||
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(1)
Partnership cash flows allocated to general partner represents the cash
distributions paid to the general partner with respect to its two per
cent interest plus an amount equal to incentive
distributions.
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||||||||||||||||
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(2)
Cash distributions declared per common unit and cash distributions paid
per common unit are computed by dividing cash distributions, after the
deduction of the general partner's allocation, by the 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.
|
||||||||||||||||
Fourth
Quarter 2008
Partnership
cash flows decreased $5.5 million to $34.7 million for fourth quarter of 2008,
compared to $40.2 million for the same period last year. This decrease was
primarily due to lower cash distributions received from Great Lakes and Northern
Border, partially offset by lower costs at the Partnership level. Cash
distributions from Great Lakes decreased $1.4 million in fourth quarter 2008 to
$18.9 million compared to the same period in the prior year. The decrease in
cash distributions from Great Lakes is primarily due to increased operating
expenses and the implementation of Michigan Business Tax, partially offset by
increased transmission revenues. Cash distributions from Northern Border were
$18.7 million in fourth quarter 2008, a decrease of $5.1 million compared to the
same period in 2007. The decrease in cash distributions from Northern Border is
primarily due to lower transmission revenues recorded in third quarter 2008
compared to the same period in 2007 related to the competition from the
in-service of the western segment of the Rockies Express Pipeline. Costs at the
Partnership level decreased by $0.9 million in fourth quarter of 2008 compared
to the same period last year due to lower net financial charges.
5
The
Partnership paid distributions of $27.8 million in fourth quarter of 2008, an
increase of $2.4 million compared to the same period in the prior year and
repaid $9.3 million of the outstanding debt balance.
Year
Ended December 31, 2008
Partnership
cash flows increased $23.8 million to $156.2 million in 2008 compared to last
year. This increase was a result of increased cash distributions from Great
Lakes and Northern Border, increased cash flows provided by Tuscarora’s
operating activities and decreased costs at the Partnership level. Cash
distributions from Great Lakes were $73.9 million in 2008, an increase of $12.6
million compared to the prior year. The increase in cash distributions from
Great Lakes is due primarily to a full year of ownership in 2008. Cash
distributions from Northern Border increased $4.4 million to $90.7 million in
2008 compared to 2007 due primarily to the special distribution of $8.2 million
received in relation to the gain on sale of Bison Pipeline LLC. Cash flows
provided by Tuscarora’s operating activities were $21.5 million in 2008, an
increase of $3.9 million compared to the prior year primarily due to
transmission revenues resulting from the Likely compressor station
expansion project that went into service on April 1, 2008. Costs at the
Partnership level decreased by $2.9 million to $29.9 million in 2008 compared to
2007 primarily due to lower financial charges as a result of lower interest
rates and average debt outstanding, partially offset by losses on interest rate
derivatives.
The
Partnership paid distributions of $108.6 million in 2008, an increase of $21.9
million compared to 2007, and repaid a net $36.6 million of the outstanding debt
balance.
Liquidity
and Capital Resources
As of
December 31, 2008, the Partnership had no outstanding borrowings under the
$250.0 million revolving portion of its revolving credit and term loan agreement
and was in compliance with the covenants of the agreement. The interest rate
incurred on the credit facility (includes both outstanding term loans and
revolving borrowings) averaged 5.15 per cent for the year ended December 31,
2008 after accounting for hedging activity. The Partnership views its core
banking group as solid, particularly in light of the current market environment,
and has established a strong relationship with these institutions.
Conference
Call
Analysts,
members of the public, the media and other interested parties are invited to
participate in a teleconference and audio webcast on Friday, February 20, 2009
at 10:00 a.m. (Mountain) and 12:00 p.m. (Eastern). Mark Zimmerman, president of
the general partner, will discuss fourth quarter 2008 financial results and
general developments and issues concerning the Partnership followed by a
question and answer session for the investment community and media. To
participate, please call (866) 225-0198. A replay of the conference call will
also be available two hours after the conclusion of the call and until 10:00
p.m. (Mountain) and midnight (Eastern), Friday, February 27, 2009, by dialing
(800) 408-3053, then entering pass code 3280527#.
A live
webcast 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.
6
TC
PipeLines, LP is a publicly traded limited partnership. TC PipeLines, LP has
interests in more than 3,600 miles of federally regulated U.S. interstate
natural gas pipelines, including Great Lakes Gas Transmission Limited
Partnership (46.45 per cent ownership), Northern Border Pipeline Company (50 per
cent ownership) and Tuscarora Gas Transmission Company (100 per cent ownership).
Great Lakes is a 2,115-mile pipeline serving markets in Minnesota, Wisconsin,
Michigan and eastern Canada. The 1,249-mile Northern Border pipeline transports
natural gas from the Montana-Saskatchewan border to markets in the midwestern
United States. Tuscarora owns a 240-mile pipeline system that transports natural
gas from Oregon where it interconnects to TransCanada’s Gas Transmission
Northwest System. TC PipeLines, LP is managed by its general partner, TC
PipeLines GP, Inc., an indirect wholly owned subsidiary of TransCanada
Corporation. TC PipeLines GP, Inc., also holds common units of TC PipeLines, LP.
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.
7
Cautionary
Statement Regarding Forward-Looking Information
This
news release may include forward-looking statements regarding future events and
the future financial performance of TC PipeLines, LP. Words such as “believes,”
“expects,” “intends,” “forecasts,” “projects,” and similar expressions identify
forward-looking statements. All forward-looking statements are based on the
Partnership’s current beliefs as well as assumptions made by and information
currently available to the Partnership. These statements reflect the
Partnership’s current views with respect to future events. The Partnership
assumes no obligation to update any such forward-looking statements to reflect
events or circumstances occurring after the date hereof. Important factors that
could cause actual results to materially differ from the Partnership's current
expectations include the risk of a prolonged slowdown in growth or decline in
the U.S. economy or the risk of delay in growth recovery in the U.S. economy,
regulatory decisions, particularly those of the Federal Energy Regulatory
Commission, the ability of Great Lakes and Northern Border to recontract their
available capacity at maximum rates, our ability to identify accretive growth
opportunities, the ability to access capital and credit markets with competitve
rates and terms, operational decisions of Northern Border’s and Great Lakes’
operator, the failure of a shipper on any one of the Partnership’s pipelines to
perform its contractual obligations, supply of natural gas in the Western Canada
sedimentary basin and in competing basins, such as the Rocky Mountains, future
demand for natural gas, overcapacity in the industry, costs related to the
Partnership’s pipeline systems’ pipeline integrity programs, TransCanada’s
decision in regards to the size and design of the Bison Pipeline Project and
regulatory, construction and other risks related to Bison’s construction,
success of other pipelines competing with Northern Border by bringing competing
U.S. sourced gas to Northern Border’s markets, and other risks inherent in the
transportation of natural gas as discussed in the Partnership’s filings with the
Securities and Exchange Commission, including the Partnership’s Annual Report on
Form 10-K for the year ended December 31, 2007 and the Partnership’s Quarterly
Report on Form 10-Q for the quarter ended September 30, 2008.
- 30
- -
|
Media
Inquiries:
|
Cecily
Dobson
|
(403)
920-7859
(800)
608-7859
|
|
Unitholder
and Analyst Inquiries:
|
Terry
Hook
|
(877)
290-2772
investor_relations@tcpipelineslp.com
|
8
TC
PipeLines, LP
Financial
Summary
|
Consolidated Statement of
Income
(unaudited)
|
Three
months ended
December
31,
|
Twelve
months ended
December
31,
|
||||||||||||||
|
(millions
of dollars except per common unit amounts)
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
|
Equity
income from investment in Great Lakes (1)
|
12.9 | 14.7 | 57.3 | 49.0 | ||||||||||||
|
Equity
income from investment in Northern Border
|
17.2 | 16.9 | 65.3 | 61.2 | ||||||||||||
|
Transmission
revenues
|
8.3 | 6.9 | 31.6 | 27.2 | ||||||||||||
|
Operating
expenses
|
(2.7 | ) | (1.9 | ) | (9.5 | ) | (8.3 | ) | ||||||||
|
Depreciation
|
(1.8 | ) | (1.6 | ) | (6.9 | ) | (6.3 | ) | ||||||||
|
Financial
charges, net and other
|
(7.3 | ) | (8.3 | ) | (30.1 | ) | (33.8 | ) | ||||||||
|
Net
income
|
26.6 | 26.7 | 107.7 | 89.0 | ||||||||||||
|
Net
income allocation
|
||||||||||||||||
|
Common
units
|
23.4 | 24.3 | 95.9 | 81.3 | ||||||||||||
|
General
partner
|
3.2 | 2.4 | 11.8 | 7.7 | ||||||||||||
| 26.6 | 26.7 | 107.7 | 89.0 | |||||||||||||
|
Net
income per common unit
|
$ | 0.67 | $ | 0.70 | $ | 2.75 | $ | 2.51 | ||||||||
|
Weighted average common units
outstanding (millions)
|
34.9 | 34.9 | 34.9 | 32.3 | ||||||||||||
|
Common units outstanding, end
of the period (millions)
|
34.9 | 34.9 | 34.9 | 34.9 | ||||||||||||
|
Operating
Results
|
Three
months ended
December
31,
|
Twelve
months ended
December
31,
|
||||||||||||||
|
(unaudited)
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
|
Great
Lakes (1)
|
||||||||||||||||
|
Volumes:
|
||||||||||||||||
|
Gas
delivered (million cubic
feet)
|
178,178 | 203,164 | 784,284 | 693,017 | ||||||||||||
|
Average
throughput (million
cubic feet per day)
|
1,937 | 2,208 | 2,143 | 2,221 | ||||||||||||
|
Capital
Expenditures (millions
of dollars):
|
||||||||||||||||
|
Maintenance
|
6.1 | 11.0 | 12.3 | 16.7 | ||||||||||||
|
Northern
Border
|
||||||||||||||||
|
Volumes:
|
||||||||||||||||
|
Gas
delivered (million cubic
feet)
|
204,332 | 198,153 | 731,138 | 799,637 | ||||||||||||
|
Average
throughput (million
cubic feet per day)
|
2,277 | 2,208 | 2,041 | 2,247 | ||||||||||||
|
Capital
Expenditures (millions
of dollars):
|
||||||||||||||||
|
Maintenance
|
1.7 | 3.2 | 8.4 | 10.6 | ||||||||||||
|
Growth
|
5.2 | - | 12.1 | - | ||||||||||||
|
Tuscarora
|
||||||||||||||||
|
Volumes:
|
||||||||||||||||
|
Gas
delivered (million cubic
feet)
|
8,373 | 7,966 | 30,061 | 28,257 | ||||||||||||
|
Average
throughput (million
cubic feet per day)
|
91 | 87 | 82 | 77 | ||||||||||||
|
Capital
Expenditures (millions
of dollars):
|
||||||||||||||||
|
Maintenance
|
0.1 | 0.1 | 0.1 | 0.1 | ||||||||||||
|
Growth
|
0.3 | 8.7 | 6.7 | 13.1 | ||||||||||||
|
(1)
The information provided for Great Lakes in the "Twelve months ended
December 31, 2007" column pertains to the period after acquisition of
February 23 to December 31, 2007.
|
||||||||||||||||