Date of Report (Date of earliest event reported)
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July 24, 2014
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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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001-35358
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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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717 Texas Street, Suite 2400
Houston, TX
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77002-2761
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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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¨
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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 (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 (17 CFR 240.13e-4(c))
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Exhibit No.
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Description
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99.1
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News Release of TC PipeLines, LP, dated July 24, 2014, reporting the Partnership’s financial results for the quarter ended June 30, 2014.
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TC PipeLines, LP
by: TC PipeLines GP, Inc.,
its general partner
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By: /s/ Jon A. Dobson
Jon A. Dobson
Secretary
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Exhibit No.
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Description
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Exhibit 99.1
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News Release of TC PipeLines, LP, dated July 24, 2014, reporting the Partnership’s financial results for the quarter ended June 30, 2014.
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NewsRelease |
o
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Net income attributable to controlling interests of $37 million or $0.58 per common unit
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o
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Partnership cash flows of $77 million
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o
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Paid cash distributions of $52 million
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o
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Raised second quarter 2014 cash distribution to $0.84 per common unit
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o
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Distribution is payable on August 14, 2014 to unitholders of record as of the close of business on August 5, 2014
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o
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Marks the 15th consecutive year of increasing distributions for the Partnership
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Three months ended
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Six months ended
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|||||||||||||||
(unaudited)
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June 30, | June 30, | ||||||||||||||
(millions of dollars except per common unit amounts)
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2014
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2013
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2014
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2013
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||||||||||||
Partnership cash flows(a)
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77 | 42 | 137 | 86 | ||||||||||||
Cash distributions paid
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(52 | ) | (43 | ) | (103 | ) | (85 | ) | ||||||||
Cash distributions paid per common unit
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$0.81 | $0.78 | $1.62 | $1.56 | ||||||||||||
Net income attributable to controlling interests(b)
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37 | 34 | 94 | 78 | ||||||||||||
Net income per common unit(c) – basic and diluted
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$0.58 | $0.40 | $1.48 | $0.92 | ||||||||||||
Weighted average common units outstanding (millions) – basic and diluted
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62.3 | 57.4 | 62.3 | 55.4 | ||||||||||||
Common units outstanding at end of period (millions)
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62.3 | 62.3 | 62.3 | 62.3 |
(a)
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Partnership cash flows is a non-GAAP financial measure. Refer to the description of Partnership Cash Flows in the section of this release entitled “Non-GAAP Measures” and the Supplemental Schedule Non-GAAP Measures for further detail.
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(b)
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The additional 45 percent membership interests in each of GTN and Bison were acquired from subsidiaries of TransCanada in July 2013. As a result, the acquisition was accounted for as a transaction between entities under common control, similar to a pooling of interests, whereby the assets and liabilities of GTN and Bison were recorded at TransCanada’s carrying value and the Partnership’s historical financial information was recast to consolidate GTN and Bison for all periods presented.
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(c)
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Net income per common unit for the three and six months ended June 30, 2013 is equivalent to that presented prior to the recast. Refer to the description of net income per common unit in the Financial Summary Schedule for further detail.
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Media Inquiries:
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Shawn Howard/Davis Sheremata
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403.920.7859
800.608.7859
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Unitholder and Analyst Inquiries:
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Rhonda Amundson
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877.290.2772
investor_relations@tcpipelineslp.com
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(unaudited)
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Three months ended June 30,
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Six months ended June 30,
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||||||||||||||
(millions of dollars, except per common unit amounts)
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2014
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2013(a)
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2014
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2013(a)
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||||||||||||
Transmission revenues
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82 | 82 | 169 | 168 | ||||||||||||
Equity earnings from unconsolidated affiliates
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18 | 15 | 51 | 33 | ||||||||||||
Operation and maintenance expenses
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(12 | ) | (13 | ) | (24 | ) | (26 | ) | ||||||||
Property taxes
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(6 | ) | (6 | ) | (12 | ) | (12 | ) | ||||||||
General and administrative
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(1 | ) | (4 | ) | (3 | ) | (6 | ) | ||||||||
Depreciation
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(22 | ) | (22 | ) | (43 | ) | (43 | ) | ||||||||
Financial charges and other
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(14 | ) | (10 | ) | (26 | ) | (19 | ) | ||||||||
Net income
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45 | 42 | 112 | 95 | ||||||||||||
Net income attributable to non-controlling interests
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8 | 8 | 18 | 17 | ||||||||||||
Net income attributable to controlling interests
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37 | 34 | 94 | 78 | ||||||||||||
Net income attributable to controlling interests allocation(b)
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||||||||||||||||
Common units
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36 | 23 | 92 | 51 | ||||||||||||
General Partner
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1 | - | 2 | 1 | ||||||||||||
37 | 23 | 94 | 52 | |||||||||||||
Net income per common unit – basic and diluted (c)
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$0.58 | $0.40 | $1.48 | $0.92 | ||||||||||||
Weighted average common units outstanding (millions)
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||||||||||||||||
– basic and diluted
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62.3 | 57.4 | 62.3 | 55.4 | ||||||||||||
Common units outstanding, end of period (millions)
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62.3 | 62.3 | 62.3 | 62.3 |
(a)
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Financial information was recast to consolidate GTN and Bison.
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(b)
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Net income attributable to controlling interest allocation excludes net income attributed to GTN’s and Bison’s former parent which amounted to $11 million and $26 million for the three and six months ended June 30, 2013, respectively.
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(c)
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Net income per common unit is computed by dividing net income attributable to controlling interests, after deduction of the General Partner’s allocation and net income attributed to GTN’s and Bison’s former parent, by the weighted average number of common units outstanding. The General Partner’s allocation is computed based upon the General Partner’s effective two percent general partner interest plus an amount equal to incentive distributions. On May 22, 2013, the Partnership issued 8.855 million common units in a public offering.
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(unaudited)
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30-Jun-14
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31-Dec-13
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||||||
(millions of dollars)
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||||||||
ASSETS
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||||||||
Current assets
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82 | 69 | ||||||
Investment in unconsolidated affiliates
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1,184 | 1,195 | ||||||
Plant, property and equipment
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2,004 | 2,042 | ||||||
Other assets
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136 | 137 | ||||||
3,406 | 3,443 | |||||||
LIABILITIES AND PARTNERS' EQUITY
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||||||||
Current liabilities
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128 | 55 | ||||||
Other liabilities
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26 | 24 | ||||||
Long-term debt, including current portion
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1,484 | 1,575 | ||||||
Partners' equity
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1,768 | 1,789 | ||||||
3,406 | 3,443 |
Three months ended
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Six months ended
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|||||||||||||||
(unaudited)
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June 30, | June 30, | ||||||||||||||
(millions of dollars except per common unit amounts)
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2014
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2013
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2014
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2013
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||||||||||||
Net income attributable to controlling interests(a)
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37 | 34 | 94 | 78 | ||||||||||||
Less net income attributed to GTN’s and Bison’s former parent (a)
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- | (11 | ) | - | (26 | ) | ||||||||||
Net income as previously reported
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37 | 23 | 94 | 52 | ||||||||||||
Add:
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||||||||||||||||
Cash distributions from GTN (b)
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25 | 8 | 45 | 14 | ||||||||||||
Cash distributions from Northern Border (b)
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26 | 22 | 47 | 44 | ||||||||||||
Cash distributions from Bison (b)
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11 | 3 | 23 | 7 | ||||||||||||
Cash distributions from Great Lakes (b)
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14 | 6 | 19 | 12 | ||||||||||||
Cash flows provided by North Baja’s and Tuscarora’s operating activities
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11 | 13 | 24 | 27 | ||||||||||||
87 | 52 | 158 | 104 | |||||||||||||
Less:
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||||||||||||||||
Equity earnings as previously reported:
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||||||||||||||||
GTN
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- | (4 | ) | - | (9 | ) | ||||||||||
Northern Border
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(16 | ) | (15 | ) | (39 | ) | (31 | ) | ||||||||
Bison
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- | (3 | ) | - | (6 | ) | ||||||||||
Great Lakes
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(2 | ) | - | (12 | ) | (2 | ) | |||||||||
(18 | ) | (22 | ) | (51 | ) | (48 | ) | |||||||||
Less:
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||||||||||||||||
Other Pipes’ net income as previously reported (c)
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||||||||||||||||
GTN
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(15 | ) | - | (37 | ) | - | ||||||||||
Bison
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(11 | ) | - | (23 | ) | - | ||||||||||
North Baja
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(6 | ) | (6 | ) | (12 | ) | (12 | ) | ||||||||
Tuscarora
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(4 | ) | (4 | ) | (8 | ) | (8 | ) | ||||||||
(36 | ) | (10 | ) | (80 | ) | (20 | ) | |||||||||
Add:
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||||||||||||||||
Net income attributable to non-controlling interests after the 2013 Acquisition
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8 | - | 18 | - | ||||||||||||
Partnership cash flows before General Partner distributions
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78 | 43 | 139 | 88 | ||||||||||||
General Partner distributions (d)
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(1 | ) | (1 | ) | (2 | ) | (2 | ) | ||||||||
Partnership cash flows
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77 | 42 | 137 | 86 | ||||||||||||
Cash distributions declared
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(54 | ) | (52 | ) | (106 | ) | (94 | ) | ||||||||
Cash distributions declared per common unit (e)
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$0.84 | $0.81 | $1.65 | $1.59 | ||||||||||||
Cash distributions paid
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(52 | ) | (43 | ) | (103 | ) | (85 | ) | ||||||||
Cash distributions paid per common unit (e)
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$0.81 | $0.78 | $1.62 | $1.56 |
(a)
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Financial information was recast to consolidate GTN and Bison for all periods presented. Prior to the 2013 Acquisition, our net income was $23 million and $52 million for the three and six months ended June 30, 2013, respectively, reflecting our actual ownership in each of GTN and Bison at that time. As a result of the recast, net income attributable to controlling interests is $34 million and $78 million for the three and six months ended June 30, 2013, respectively, as if we owned 70 percent in each of GTN and Bison. Net income attributed to GTN and Bison’s former parent of $11 million and $26 million for the three and six months ended June 30, 2013, respectively, reflecting the acquired ownership interests not then owned by the Partnership, reconciles the net income as previously reported and net income attributable to controlling interests.
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(b)
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In accordance with the cash distribution policies of the respective entities, cash distributions from GTN, Northern Border, Bison and Great Lakes, are based on their respective prior quarter financial results. Distributions from GTN and Bison are based on 70 percent ownership starting from July 1, 2013. Distributions for the three and six months ended June 30, 2013 were not recast.
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(c)
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“Other Pipes” includes the results of North Baja and Tuscarora and, after July 1, 2013, GTN and Bison as well.
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(d)
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General Partner distributions represent the cash distributions paid to the General Partner with respect to its effective two percent general partner interest plus an amount equal to incentive distributions. Incentive distributions for the six months ended June 30, 2014 and 2013 were nil.
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(e)
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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 effective two percent general partner interest plus an amount equal to incentive distributions.
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