TC PipeLines LP (TCP) Tops Q3 EPS by 9c

TC PipeLines LP (NYSE: TCP) reported Q3 EPS of $0.90, $0.09 better than the analyst estimate of $0.81.

Third quarter highlights (unaudited)

• Generated net income attributable to controlling interests of $65 million;
• Paid cash distributions of $47 million;
• Declared cash distribution of $0.65 per common unit for the third quarter of 2020;
• Generated adjusted EBITDA of $117 million and distributable cash flow of $36 million;
• Continued permitting, engineering and construction activities on our PNGTS, GTN and Tuscarora growth projects;
• Continued to progress our North Baja XPress and Iroquois’ ExC projects;
• Received affirmation of the Partnership’s credit rating by Standard and Poor’s (S&P) at BBB/Stable and by Moody’s at Baa2/Stable;
• The Partnership’s outlook was revised by S&P from Stable to Creditwatch Positive in connection with TC Energy's offer to acquire the Partnership's outstanding common units;
• Northern Border’s credit rating outlook upgraded to Positive by S&P;
• Reached agreement for reimbursement of Iroquois’ expenditures for the terminated Wright Interconnect Project;
• PNGTS issued $125 million of 10-year fixed rate Senior Notes in early October and established a 3-year Private Shelf Facility for an additional $125 million to secure the funding for its expansion projects; and
• Received offer from TC Energy in early October to acquire all outstanding publicly-held common units.

“During the third quarter of 2020, our diversified portfolio of essential energy infrastructure continued to perform well and generated solid results,” said Nathan Brown, president of TC PipeLines, GP, Inc. “These results continue to highlight the resiliency of our assets during these unprecedented times. We also continued to advance our suite of organic growth projects with PNGTS’ Portland XPress project being placed into service on November 1 as planned and our other projects progressing on schedule.”

“Despite our third quarter net income being sixteen percent higher year-over-year reflecting new projects in service and continued strong contracting levels, distributable cash flow was considerably lower this quarter compared to last year primarily the result of increased normal-course maintenance spending at GTN along with the one-time purchase of a commercial IT system by several of our pipelines,” added Brown. “The increased maintenance capex at GTN on its compressor fleet resulted from higher throughput, operating hours and strong demand for natural gas transportation. Notwithstanding the impact to DCF in the quarter, these expenditures will reduce future operating costs and increase our pipelines’ respective rate bases and we anticipate will generate a return on and of capital in future rates.”

“We continue to believe that our assets are well situated to serve our customers and their need for natural gas and other potential energy transportation and will create value well into the future,” concluded Brown.

For earnings history and earnings-related data on TC PipeLines LP (TCP) click here.

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