CALGARY, ALBERTA–(Marketwired – Feb. 20, 2014) – TransCanada Corporation (TSX:TRP) (NYSE:TRP) (TransCanada or the Company) today announced comparable earnings for fourth quarter 2013 of $410 million or $0.58 per share compared to $318 million or $0.45 per share for the same period in 2012. For the year ended December 31, 2013, comparable earnings were $1.6 billion or $2.24 per share compared to $1.3 billion or $1.89 per share in 2012. Net income attributable to common shares for fourth quarter 2013 was $420 million or $0.59 per share compared to $306 million or $0.43 per share in fourth quarter 2012. For the year ended December 31, 2013, net income attributable to common shares was $1.7 billion or $2.42 per share compared to $1.3 billion or $1.84 per share in 2012. TransCanada’s Board of Directors also declared a quarterly dividend of $0.48 per common share for the quarter ending March 31, 2014, equivalent to $1.92 per common share on an annualized basis, an increase of four per cent. This is the fourteenth consecutive year the Board of Directors has raised the dividend.
“Our diverse portfolio of critical energy infrastructure assets generated strong earnings and cash flow in 2013,” said Russ Girling, TransCanada’s president and chief executive officer. “Comparable earnings increased 19 per cent to $1.6 billion and funds generated from operations were up 22 per cent to $4 billion. The strong year over year results reflect a return to an eight unit site at Bruce Power, higher Western Power volumes, an increase in New York capacity prices, growth in our NGTL System, and a higher Canadian Mainline return on equity.”
During 2013 we also captured an additional $19 billion of commercially secured growth opportunities. They include the Prince Rupert Gas Transmission project that would move natural gas to Canada’s West Coast for liquefaction and shipment to Asian markets, further expansion of the NGTL System, the Heartland and TC Terminals crude oil infrastructure projects in Alberta, and the Energy East Pipeline project which, in addition to new build, would include the conversion of a portion of our existing Canadian Mainline from natural gas to crude oil service and link growing crude oil production in Western Canada to refineries and export terminals in Eastern Canada.
“We now have a $38 billion portfolio of commercially secured projects backed by long-term contracts,” added Girling. “Looking forward, we will remain focused on obtaining the necessary approvals and constructing this high-quality portfolio of energy infrastructure assets that are expected to generate significant growth in earnings and cash flow as they are placed into service over the remainder of the decade.”
On January 22, 2014, we reached a significant milestone in advancing our unprecedented capital program when the approximate US$2.6 billion Gulf Coast Project began delivering crude oil from Cushing, Oklahoma to refineries on the U.S. Gulf Coast. This vital piece of infrastructure extends our existing Keystone Pipeline System which has safely delivered more than 550 million barrels of oil from Western Canada to key refining markets in the U.S. Midwest since it commenced operations in 2010.
Fourth Quarter and Year-End Highlights
(All financial figures are unaudited and in Canadian dollars unless noted otherwise)
Comparable earnings for fourth quarter 2013 were $410 million or $0.58 per share compared to $318 million or $0.45 per share for the same period in 2012. Higher earnings from the Canadian Mainline, the NGTL System, Keystone, and Bruce Power were partially offset by lower contributions from U.S. Natural Gas Pipelines and Western Power.
Comparable earnings for the year ended December 31, 2013 were $1.584 billion or $2.24 per share compared to $1.330 billion or $1.89 per share in 2012. Higher earnings from the Canadian Mainline, the NGTL System, Keystone, Bruce Power, U.S. Power, and Western Power were partially offset by lower contributions from U.S. Natural Gas Pipelines.
Notable recent developments in Oil Pipelines, Natural Gas Pipelines, Energy and Corporate include:
Oil Pipelines:
Natural Gas Pipelines:
On January 31, 2014, shippers on the Canadian Mainline elected to renew approximately 2.5 billion cubic feet a day of their contracts through November 2016.
Energy:
Corporate:
Teleconference – Audio and Slide Presentation:
We will hold a teleconference and webcast on Thursday, February 20, 2014 to discuss our fourth quarter 2013 financial results. Russ Girling, TransCanada president and chief executive officer and Don Marchand, executive vice-president and chief financial officer, along with other members of the TransCanada executive leadership team, will discuss the financial results and Company developments at 12 p.m. (MT) / 2 p.m. (ET).
Analysts, members of the media and other interested parties are invited to participate by calling 866.226.1792 or 416.340.2216 (Toronto area). Please dial in 10 minutes prior to the start of the call. No pass code is required. A live webcast of the teleconference will be available at www.transcanada.com.
A replay of the teleconference will be available two hours after the conclusion of the call until midnight (ET) on February 27, 2014. Please call 800.408.3053 or 905.694.9451 and enter pass code 6573719.
With more than 60 years’ experience, TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure including natural gas and oil pipelines, power generation and gas storage facilities. TransCanada operates a network of natural gas pipelines that extends more than 68,500 kilometres (42,500 miles), tapping into virtually all major gas supply basins in North America. TransCanada is one of the continent’s largest providers of gas storage and related services with more than 400 billion cubic feet of storage capacity. A growing independent power producer, TransCanada owns or has interests in over 11,800 megawatts of power generation in Canada and the United States. TransCanada is developing one of North America’s largest oil delivery systems. TransCanada’s common shares trade on the Toronto and New York stock exchanges under the symbol TRP. For more information visit: www.transcanada.com or check us out on Twitter @TransCanada or http://blog.transcanada.com.
FOURTH QUARTER 2013 AND FINANCIAL HIGHLIGHTS
Comparable EBITDA, comparable earnings, comparable earnings per common share and funds generated from operations are all non-GAAP measures. See the non-GAAP measures section for more information.
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(unaudited – millions of $, except per share amounts) | 2013 | 2012 | 2013 | 2012 | ||||
Revenue | 2,332 | 2,089 | 8,797 | 8,007 | ||||
Comparable EBITDA | 1,291 | 1,052 | 4,859 | 4,245 | ||||
Net income attributable to common shares | 420 | 306 | 1,712 | 1,299 | ||||
per common share – basic | $0.59 | $0.43 | $2.42 | $1.84 | ||||
Comparable earnings | 410 | 318 | 1,584 | 1,330 | ||||
per common share | $0.58 | $0.45 | $2.24 | $1.89 | ||||
Operating cash flow | ||||||||
Funds generated from operations | 1,083 | 818 | 4,000 | 3,284 | ||||
(Increase)/decrease in operating working capital | (74 | ) | 207 | (326 | ) | 287 | ||
Net cash provided by operations | 1,009 | 1,025 | 3,674 | 3,571 | ||||
Investing activities | ||||||||
Capital expenditures | 1,431 | 1,040 | 4,461 | 2,595 | ||||
Equity investments | 62 | 95 | 163 | 652 | ||||
Acquisitions | 62 | 214 | 216 | 214 | ||||
Dividends Declared | ||||||||
per common share | 0.46 | 0.44 | 1.84 | 1.76 | ||||
per Series 1 preferred share | 0.29 | 0.29 | 1.15 | 1.15 | ||||
per Series 3 preferred share | 0.25 | 0.25 | 1.00 | 1.00 | ||||
per Series 5 preferred share | 0.28 | 0.28 | 1.10 | 1.10 | ||||
per Series 7 preferred share1 | 0.25 | – | 0.91 | – | ||||
Basic common shares outstanding (millions) | ||||||||
Average for the period | 707 | 705 | 707 | 705 | ||||
End of period | 707 | 705 | 707 | 705 | ||||
1 | Issued March 4, 2013. |
FORWARD-LOOKING INFORMATION
We disclose forward-looking information to help current and potential investors understand management’s assessment of our future plans and financial outlook, and our future prospects overall.
Statements that are forward-looking are based on certain assumptions and on what we know and expect today and generally include words like anticipate, expect, believe, may, will, should, estimate or other similar words.
Forward-looking statements in this news release may include information about the following, among other things:
Forward-looking statements do not guarantee future performance. Actual events and results could be significantly different because of assumptions, risks or uncertainties related to our business or events that happen after the date of this news release.
Our forward-looking information is based on the following key assumptions, and subject to the following risks and uncertainties:
Assumptions
Risks and uncertainties
You can read more about these factors and others in reports we have filed with Canadian securities regulators and the SEC, including the MD&A in our 2012 Annual Report.
As actual results could vary significantly from forward-looking information, you should not put undue reliance on forward-looking information and should not use future-oriented information or financial outlooks for anything other than their intended purpose. We do not update our forward-looking statements due to new information or future events, unless we are required to by law.
FOR MORE INFORMATION
You can find more information about TransCanada in our annual information form and other disclosure documents, which are available on SEDAR (www.sedar.com).
NON-GAAP MEASURES
We use the following non-GAAP measures:
These measures do not have any standardized meaning as prescribed by GAAP and therefore are unlikely to be comparable to similar measures presented by other entities.
EBITDA and EBIT
We use EBITDA as an approximate measure of our pre-tax operating cash flow. It measures our earnings before deducting interest and other financial charges, income tax, depreciation and amortization, net income attributable to non-controlling interests and preferred share dividends, and includes income from equity investments. EBIT measures our earnings from ongoing operations and is an effective measure of our performance and an effective tool for evaluating trends in each segment. It is calculated in the same way as EBITDA, less depreciation and amortization.
Funds generated from operations
Funds generated from operations includes net cash provided by operations before changes in operating working capital. We believe it is an effective measure of our consolidated operating cash flow because it does not include fluctuations from working capital balances, which do not necessarily reflect underlying operations in the same period.
Comparable measures
We calculate the comparable measures by adjusting certain GAAP and non-GAAP measures for specific items we believe are significant but not reflective of our underlying operations in the period. These comparable measures are calculated on a consistent basis from period to period and are adjusted for specific items in each period, as applicable.
Comparable measure | Original measure |
comparable earnings | net income attributable to common shares |
comparable earnings per common share | net income per common share |
comparable EBITDA | EBITDA |
comparable EBIT | EBIT |
comparable depreciation and amortization | depreciation and amortization |
comparable interest expense | interest expense |
comparable interest income and other | interest income and other |
comparable income tax expense | income tax expense/(recovery) |
Our decision not to include a specific item is subjective and made after careful consideration. These may include:
We calculate comparable earnings by excluding the unrealized gains and losses from changes in fair value of certain derivatives used to reduce our exposure to certain financial commodity price risks. These derivatives provide effective economic hedges, but do not meet the criteria for hedge accounting. As a result, the changes in fair value are recorded in net income. As these amounts do not accurately reflect the gains and losses that will be realized at settlement, we do not consider them part of our underlying operations.
Reconciliation of non-GAAP measures | ||||||||||
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(unaudited – millions of $, except per share amounts) | 2013 | 2012 | 2013 | 2012 | ||||||
EBITDA | 1,320 | 1,040 | 4,958 | 4,224 | ||||||
Non-comparable risk management activities affecting EBITDA | (29 | ) | 12 | (44 | ) | 21 | ||||
NEB decision – 2012 | – | – | (55 | ) | – | |||||
Comparable EBITDA | 1,291 | 1,052 | 4,859 | 4,245 | ||||||
Comparable depreciation and amortization | (396 | ) | (343 | ) | (1,472 | ) | (1,375 | ) | ||
Comparable EBIT | 895 | 709 | 3,387 | 2,870 | ||||||
Other income statement items | ||||||||||
Comparable interest expense | (240 | ) | (246 | ) | (984 | ) | (976 | ) | ||
Comparable interest income and other | 10 | 20 | 42 | 86 | ||||||
Comparable income tax expense | (198 | ) | (123 | ) | (662 | ) | (477 | ) | ||
Net income attributable to non-controlling interests | (38 | ) | (28 | ) | (125 | ) | (118 | ) | ||
Preferred share dividends | (19 | ) | (14 | ) | (74 | ) | (55 | ) | ||
Comparable earnings | 410 | 318 | 1,584 | 1,330 | ||||||
Specific items (net of tax): | ||||||||||
NEB decision – 2012 | – | – | 84 | – | ||||||
Part VI.I income tax adjustment | – | – | 25 | – | ||||||
Sundance A PPA arbitration decision – 2011 | – | – | – | (15 | ) | |||||
Risk management activities1 | 10 | (12 | ) | 19 | (16 | ) | ||||
Net income attributable to common shares | 420 | 306 | 1,712 | 1,299 | ||||||
Comparable depreciation and amortization | (396 | ) | (343 | ) | (1,472 | ) | (1,375 | ) | ||
Specific item: | ||||||||||
NEB decision – 2012 | – | – | (13 | ) | – | |||||
Depreciation and amortization | (396 | ) | (343 | ) | (1,485 | ) | (1,375 | ) | ||
Comparable interest expense | (240 | ) | (246 | ) | (984 | ) | (976 | ) | ||
Specific item: | ||||||||||
NEB decision – 2012 | – | – | (1 | ) | – | |||||
Interest expense | (240 | ) | (246 | ) | (985 | ) | (976 | ) | ||
Comparable interest income and other | 10 | 20 | 42 | 86 | ||||||
Specific items: | ||||||||||
NEB decision – 2012 | – | – | 1 | – | ||||||
Risk management activities1 | (9 | ) | (5 | ) | (9 | ) | (1 | ) | ||
Interest income and other | 1 | 15 | 34 | 85 | ||||||
Comparable income tax expense | (198 | ) | (123 | ) | (662 | ) | (477 | ) | ||
Specific items: | ||||||||||
NEB decision – 2012 | – | – | 42 | – | ||||||
Part VI.I income tax adjustment | – | – | 25 | – | ||||||
Income taxes attributable to Sundance A PPA arbitration decision – 2011 | – | – | – | 5 | ||||||
Risk management activities1 | (10 | ) | 5 | (16 | ) | 6 | ||||
Income tax expense | (208 | ) | (118 | ) | (611 | ) | (466 | ) | ||
Comparable earnings per common share | $0.58 | $0.45 | $2.24 | $1.89 | ||||||
Specific items (net of tax): | ||||||||||
NEB decision – 2012 | – | – | 0.12 | – | ||||||
Part VI.I income tax adjustment | – | – | 0.04 | – | ||||||
Sundance A PPA arbitration decision – 2011 | – | – | – | (0.02 | ) | |||||
Risk management activities1 | 0.01 | (0.02 | ) | 0.02 | (0.03 | ) | ||||
Net income per common share | $0.59 | $0.43 | $2.42 | $1.84 | ||||||
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1 | (unaudited – millions of $) | 2013 | 2012 | 2013 | 2012 | |||||
Canadian Power | (2 | ) | (6 | ) | (4 | ) | 4 | |||
U.S. Power | 36 | (5 | ) | 50 | (1 | ) | ||||
Natural Gas Storage | (5 | ) | (1 | ) | (2 | ) | (24 | ) | ||
Foreign exchange | (9 | ) | (5 | ) | (9 | ) | (1 | ) | ||
Income tax attributable to risk management activities | (10 | ) | 5 | (16 | ) | 6 | ||||
Total gains/(losses) from risk management activities | 10 | (12 | ) | 19 | (16 | ) |
Comparable EBITDA and Comparable EBIT by business segment | ||||||||||
three months ended December 31, 2013
(unaudited – millions of $) |
Natural Gas Pipelines | Oil Pipelines | Energy | Corporate | Total | |||||
Comparable EBITDA | 778 | 198 | 346 | (31 | ) | 1,291 | ||||
Comparable depreciation and amortization | (280 | ) | (38 | ) | (74 | ) | (4 | ) | (396 | ) |
Comparable EBIT | 498 | 160 | 272 | (35 | ) | 895 | ||||
three months ended December 31, 2012
(unaudited – millions of $) |
Natural Gas Pipelines | Oil Pipelines | Energy | Corporate | Total | |||||
Comparable EBITDA | 690 | 172 | 222 | (32 | ) | 1,052 | ||||
Comparable depreciation and amortization | (236 | ) | (36 | ) | (68 | ) | (3 | ) | (343 | ) |
Comparable EBIT | 454 | 136 | 154 | (35 | ) | 709 | ||||
year ended December 31, 2013
(unaudited – millions of $) |
Natural Gas Pipelines | Oil Pipelines | Energy | Corporate | Total | |||||
Comparable EBITDA | 2,852 | 752 | 1,363 | (108 | ) | 4,859 | ||||
Comparable depreciation and amortization | (1,013 | ) | (149 | ) | (294 | ) | (16 | ) | (1,472 | ) |
Comparable EBIT | 1,839 | 603 | 1,069 | (124 | ) | 3,387 | ||||
year ended December 31, 2012
(unaudited – millions of $) |
Natural Gas Pipelines | Oil Pipelines | Energy | Corporate | Total | |||||
Comparable EBITDA | 2,741 | 698 | 903 | (97 | ) | 4,245 | ||||
Comparable depreciation and amortization | (933 | ) | (145 | ) | (283 | ) | (14 | ) | (1,375 | ) |
Comparable EBIT | 1,808 | 553 | 620 | (111 | ) | 2,870 |
RESULTS – FOURTH QUARTER 2013
Net income attributable to common shares was $420 million this quarter compared to $306 million in fourth quarter 2012.
Comparable earnings this quarter were $92 million or $0.13 per share higher than fourth quarter 2012.
This was primarily the result of:
These increases were partly offset by:
RESULTS – ANNUAL
Comparable earnings in 2013 were $254 million higher than in 2012, an increase of $0.35 per share.
The increase in comparable earnings was the result of:
These increases were partly offset by lower contributions from U.S. natural gas pipelines because of lower earnings contributions at ANR and Great Lakes.
Net income attributable to common shares was $1,712 million in 2013 compared to $1,299 million in 2012.
Net income includes comparable earnings discussed above as well as other specific items which are excluded from comparable earnings. The following specific items were recognized in net income in 2013 and 2012:
NATURAL GAS PIPELINES
Comparable EBITDA and comparable EBIT are non-GAAP measures. See non-GAAP measures section for more information.
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(unaudited – millions of $) | 2013 | 2012 | 2013 | 2012 | |||||
Canadian Pipelines | |||||||||
Canadian Mainline | 305 | 250 | 1,121 | 994 | |||||
NGTL System | 261 | 195 | 846 | 749 | |||||
Foothills | 28 | 30 | 114 | 120 | |||||
Other Canadian (TQM1, Ventures LP) | 6 | 7 | 26 | 29 | |||||
Canadian Pipelines – comparable EBITDA | 600 | 482 | 2,107 | 1,892 | |||||
Comparable depreciation and amortization | (225 | ) | (182 | ) | (790 | ) | (715 | ) | |
Canadian Pipelines – comparable EBIT | 375 | 300 | 1,317 | 1,177 | |||||
U.S. and International Pipelines (US$) | |||||||||
ANR | 33 | 63 | 188 | 254 | |||||
GTN2 | 11 | 28 | 76 | 112 | |||||
Great Lakes3 | 10 | 11 | 34 | 62 | |||||
TC PipeLines, LP1,4 | 21 | 17 | 72 | 74 | |||||
Other U.S. pipelines (Iroquois1, Bison2, Portland5) | 26 | 32 | 107 | 111 | |||||
International (Gas Pacifico/INNERGY1, Guadalajara6, Tamazunchale, TransGas1) | 25 | 27 | 106 | 112 | |||||
General, administrative and support costs | (3 | ) | (4 | ) | (10 | ) | (8 | ) | |
Non-controlling interests7 | 60 | 39 | 186 | 161 | |||||
U.S. and International Pipelines – comparable EBITDA | 183 | 213 | 759 | 878 | |||||
Comparable depreciation and amortization | (53 | ) | (54 | ) | (217 | ) | (218 | ) | |
U.S. and International Pipelines – comparable EBIT | 130 | 159 | 542 | 660 | |||||
Foreign exchange impact | 7 | (1 | ) | 15 | – | ||||
U.S. and International Pipelines – comparable EBIT (Cdn$) | 137 | 158 | 557 | 660 | |||||
Business Development comparable EBITDA and EBIT | (14 | ) | (4 | ) | (35 | ) | (29 | ) | |
Natural Gas Pipelines – comparable EBIT | 498 | 454 | 1,839 | 1,808 | |||||
Summary | |||||||||
Natural Gas Pipelines – comparable EBITDA | 778 | 690 | 2,852 | 2,741 | |||||
Comparable depreciation and amortization | (280 | ) | (236 | ) | (1,013 | ) | (933 | ) | |
Natural Gas Pipelines – comparable EBIT | 498 | 454 | 1,839 | 1,808 | |||||
1 | Results from TQM, Northern Border, Iroquois, TransGas and Gas Pacifico/INNERGY reflect our share of equity income from these investments. |
2 | Effective July 1, 2013, represents our 30 per cent direct ownership interest. Prior to July 1, 2013, our direct ownership interest was 75 per cent. |
3 | Represents our 53.6 per cent direct ownership interest. The remaining 46.4 per cent is held by TC PipeLines, LP. |
4 | Effective May 22, 2013, our ownership interest in TC PipeLines, LP decreased from 33.3 per cent to 28.9 per cent. On July 1, 2013, we sold 45 per cent of GTN and Bison to TC PipeLines, LP. The following table shows our ownership interest in TC PipeLines,LP and our ownership of GTN, Bison, and Great Lakes through our ownership interest in TC PipeLines, LP for the periods presented. |
Ownership percentage as of | |||||
July 1, 2013 | May 22, 2013 | January 1, 2012 | |||
TC PipeLines, LP | 28.9 | 28.9 | 33.3 | ||
Effective ownership through TC PipeLines, LP: | |||||
GTN/Bison | 20.2 | 7.2 | 8.3 | ||
Great Lakes | 13.4 | 13.4 | 15.5 | ||
5 | Represents our 61.7 per cent ownership interest. |
6 | Included as of June 2011. |
7 | Comparable EBITDA for the portions of TC PipeLines, LP and Portland we do not own. |
NET INCOME – WHOLLY OWNED CANADIAN PIPELINES | |||||
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(unaudited – millions of $) | 2013 | 2012 | 2013 | 2012 | |
Canadian Mainline – net income | 76 | 47 | 361 | 187 | |
Canadian Mainline – comparable earnings | 76 | 47 | 277 | 187 | |
NGTL System | 72 | 55 | 243 | 208 | |
Foothills | 5 | 4 | 18 | 19 |
OPERATING STATISTICS – WHOLLY OWNED PIPELINES | |||||||||
year ended December 31 | Canadian Mainline1 | NGTL System2 | ANR3 | ||||||
(unaudited) | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||
Average investment base (millions of $) | 5,841 | 5,737 | 5,938 | 5,501 | n/a | n/a | |||
Delivery volumes (Bcf): | |||||||||
Total | 1,339 | 1,551 | 3,683 | 3,645 | 1,566 | 1,620 | |||
Average per day | 3.7 | 4.2 | 10.1 | 10.0 | 4.3 | 4.4 |
1 | Canadian Mainline’s throughput volumes represent physical deliveries to domestic and export markets. Physical receipts originating at the Alberta border and in Saskatchewan for the twelve months ended December 31, 2013 were 803 Bcf (2012 – 859 Bcf). Average per day was 2.2 Bcf (2012 – 2.3 Bcf). |
2 | Field receipt volumes for the NGTL System for the twelve months ended December 31, 2013 were 3,680 Bcf (2012 – 3,660 Bcf). Average per day was 10.1 Bcf (2012 – 10.0 Bcf). |
3 | Under its current rates, which are approved by the FERC, changes in average investment base do not affect results. |
CANADIAN PIPELINES
Comparable EBITDA and net income for our rate-regulated Canadian Pipelines are primarily affected by our approved ROE, our investment base, the level of deemed common equity and incentive earnings. Changes in depreciation, financial charges and taxes also impact comparable EBITDA and EBIT but do not have a significant impact on net income as they are almost entirely recovered in revenue on a flow-through basis.
Canadian Mainline’s comparable earnings increased by $29 million for the three months ended December 31, 2013 compared to the same period in 2012 because of the impact of the NEB decision. Among other items, the NEB approved an ROE of 11.50 per cent on 40 per cent deemed common equity for the years 2012 through to 2017 compared to the last approved ROE of 8.08 per cent on deemed common equity of 40 per cent that was used to record earnings in 2012, as well as an incentive mechanism based on total net revenues. The increase in comparable earnings is mainly due to the higher ROE plus incentive earnings.
Net income for the NGTL System increased by $17 million for the three months ended December 31, 2013 compared to the same period in 2012 because of the impact of the 2013-2014 NGTL Settlement which included higher ROE and incentive earnings and a higher average investment base associated with 2012 and 2013 capital expenditures. The 2013-2014 NGTL Settlement, approved by the NEB in November 2013, included an ROE of 10.10 per cent on 40 per cent deemed common equity compared to an ROE of 9.70 per cent on 40 per cent deemed common equity in 2012. The 2013-2014 NGTL Settlement also included annual fixed amounts for certain OM&A costs.
U.S. PIPELINES AND INTERNATIONAL
EBITDA for our U.S. operations is generally affected by contracted volume levels, volumes delivered and the rates charged, as well as by the cost of providing services, including OM&A and property taxes.
ANR is also affected by the level of contracting and the determination of rates driven by the market value of our services for its storage capacity, storage related transportation services, and incidental commodity sales. ANR’s pipeline and storage volumes and revenues are generally higher in the winter months because of the seasonal nature of its business.
Comparable EBITDA for the U.S. and International Pipelines decreased US$30 million for the three months ended December 31, 2013 compared to the same period in 2012. This was the net effect of:
COMPARABLE DEPRECIATION AND AMORTIZATION
Comparable depreciation and amortization increased $44 million for the three months ended December 31, 2013 compared to the same period in 2012 mainly due to a 2013 true-up for the higher composite depreciation rate in the 2013-2014 NGTL Settlement approved in November 2013, higher investment base on the NGTL System, and the impact of the NEB decision.
OIL PIPELINES
Comparable EBITDA and comparable EBIT are non-GAAP measures. See non-GAAP measures section for more information.
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(unaudited – millions of $) | 2013 | 2012 | 2013 | 2012 | |||||
Keystone Pipeline System | 200 | 180 | 766 | 712 | |||||
Oil Pipelines Business Development | (2 | ) | (8 | ) | (14 | ) | (14 | ) | |
Oil Pipelines – comparable EBITDA | 198 | 172 | 752 | 698 | |||||
Comparable depreciation and amortization | (38 | ) | (36 | ) | (149 | ) | (145 | ) | |
Oil Pipelines – comparable EBIT | 160 | 136 | 603 | 553 | |||||
Comparable EBIT denominated as follows: | |||||||||
Canadian dollars | 53 | 44 | 201 | 191 | |||||
U.S. dollars | 102 | 94 | 389 | 363 | |||||
Foreign exchange impact | 5 | (2 | ) | 13 | (1 | ) | |||
160 | 136 | 603 | 553 |
Comparable EBITDA from our Keystone Pipeline System is generated primarily by providing pipeline capacity to shippers in exchange for fixed monthly payments that are not linked to actual throughput volumes. Uncontracted capacity is offered to the market on a spot basis and provides opportunities to generate incremental earnings.
Comparable EBITDA for the Keystone Pipeline System increased by $20 million for the three months ended December 31, 2013 compared to the same period in 2012, primarily because of higher volumes.
BUSINESS DEVELOPMENT
Business development expenses for the three months ended December 31, 2013 were $6 million lower than the same period in 2012 due to greater capitalization of oil pipeline development project costs in fourth quarter 2013.
ENERGY
Comparable EBITDA and comparable EBIT are non-GAAP measures. See non-GAAP measures section for more information.
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(unaudited – millions of $) | 2013 | 2012 | 2013 | 2012 | |||||
Canadian Power | |||||||||
Western Power | 60 | 84 | 380 | 335 | |||||
Eastern Power1 | 99 | 94 | 347 | 345 | |||||
Bruce Power | 115 | (8 | ) | 310 | 14 | ||||
General, administrative and support costs | (17 | ) | (14 | ) | (50 | ) | (48 | ) | |
Canadian Power – comparable EBITDA2 | 257 | 156 | 987 | 646 | |||||
Comparable depreciation and amortization | (43 | ) | (35 | ) | (172 | ) | (152 | ) | |
Canadian Power – comparable EBIT2 | 214 | 121 | 815 | 494 | |||||
U.S. Power (US$) | |||||||||
Northeast Power | 79 | 62 | 370 | 257 | |||||
General, administrative and support costs | (14 | ) | (14 | ) | (47 | ) | (48 | ) | |
U.S. Power – comparable EBITDA | 65 | 48 | 323 | 209 | |||||
Comparable depreciation and amortization | (27 | ) | (31 | ) | (107 | ) | (121 | ) | |
U.S. Power – comparable EBIT | 38 | 17 | 216 | 88 | |||||
Foreign exchange impact | 2 | – | 7 | – | |||||
U.S. Power – comparable EBIT (Cdn$) | 40 | 17 | 223 | 88 | |||||
Natural Gas Storage and other | |||||||||
Natural Gas Storage and other | 30 | 23 | 73 | 77 | |||||
General, administrative and support costs | (3 | ) | (3 | ) | (10 | ) | (10 | ) | |
Natural Gas Storage and other – comparable EBITDA2 | 27 | 20 | 63 | 67 | |||||
Comparable depreciation and amortization | (3 | ) | (2 | ) | (12 | ) | (10 | ) | |
Natural Gas Storage and other – comparable EBIT2 | 24 | 18 | 51 | 57 | |||||
Business Development comparable EBITDA and EBIT | (6 | ) | (2 | ) | (20 | ) | (19 | ) | |
Energy – comparable EBIT2 | 272 | 154 | 1,069 | 620 | |||||
Summary | |||||||||
Energy – comparable EBITDA2 | 346 | 222 | 1,363 | 903 | |||||
Comparable depreciation and amortization | (74 | ) | (68 | ) | (294 | ) | (283 | ) | |
Energy – comparable EBIT2 | 272 | 154 | 1,069 | 620 |
1 | Includes the acquisition of four Ontario Solar facilities in 2013 and Cartier phase two of Gros-Morne starting in November 2012. |
2 | Includes our share of equity income from our equity accounted for investments in ASTC Power Partnership, Portlands Energy, Bruce Power and CrossAlta up to December 2012. In December 2012, we acquired the remaining 40 per cent interest in CrossAlta, bringing our ownership interest to 100 per cent and commenced consolidating their operations. |
Comparable EBITDA for Energy increased by $124 million for the three months ended December 31, 2013 compared to the same period in 2012. The increase was the net effect of:
CANADIAN POWER
Western and Eastern Power1
Comparable EBITDA and comparable EBIT are non-GAAP measures. See non-GAAP measures section for more information.
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||||||||
(unaudited – millions of $) | 2013 | 2012 | 2013 | 2012 | |||||
Revenue | |||||||||
Western Power | 168 | 158 | 609 | 640 | |||||
Eastern Power1 | 104 | 106 | 400 | 415 | |||||
Other2 | 34 | 25 | 108 | 91 | |||||
306 | 289 | 1,117 | 1,146 | ||||||
Income from equity investments3 | 15 | 23 | 141 | 68 | |||||
Commodity purchases resold | |||||||||
Western power | (92 | ) | (74 | ) | (277 | ) | (281 | ) | |
Other4 | (2 | ) | (2 | ) | (6 | ) | (5 | ) | |
(94 | ) | (76 | ) | (283 | ) | (286 | ) | ||
Plant operating costs and other | (68 | ) | (58 | ) | (248 | ) | (218 | ) | |
Sundance A PPA arbitration decision – 2012 | – | – | – | (30 | ) | ||||
General, administrative and support costs | (17 | ) | (14 | ) | (50 | ) | (48 | ) | |
Comparable EBITDA | 142 | 164 | 677 | 632 | |||||
Comparable depreciation and amortization | (43 | ) | (35 | ) | (172 | ) | (152 | ) | |
Comparable EBIT | 99 | 129 | 505 | 480 | |||||
Breakdown of comparable EBITDA | |||||||||
Western Power | 60 | 84 | 380 | 335 | |||||
Eastern Power | 99 | 94 | 347 | 345 | |||||
General, administrative and support costs | (17 | ) | (14 | ) | (50 | ) | (48 | ) | |
Comparable EBITDA | 142 | 164 | 677 | 632 |
1 | Includes the acquisition of four Ontario Solar facilities in 2013 and Cartier phase two of Gros-Morne starting in November 2012. |
2 | Includes sale of excess natural gas purchased for generation and sales of thermal carbon black. |
3 | Includes our share of equity income from our investments in ASTC Power Partnership, which holds the Sundance B PPA, and Portlands Energy. |
4 | Includes the cost of excess natural gas not used in operations. |
Sales volumes and plant availability1,2
Includes our share of volumes from our equity investments.
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||||||||||
(unaudited) | 2013 | 2012 | 2013 | 2012 | |||||||
Sales volumes (GWh) | |||||||||||
Supply | |||||||||||
Generation | |||||||||||
Western Power | 691 | 714 | 2,728 | 2,691 | |||||||
Eastern Power1 | 854 | 908 | 3,822 | 4,384 | |||||||
Purchased | |||||||||||
Sundance A & B and Sheerness PPAs2 | 2,771 | 2,017 | 8,223 | 6,906 | |||||||
Other purchases | 12 | – | 13 | 46 | |||||||
4,328 | 3,639 | 14,786 | 14,027 | ||||||||
Sales | |||||||||||
Contracted | |||||||||||
Western Power | 2,372 | 2,192 | 7,864 | 8,240 | |||||||
Eastern Power1 | 854 | 908 | 3,822 | 4,384 | |||||||
Spot | |||||||||||
Western Power | 1,102 | 539 | 3,100 | 1,403 | |||||||
4,328 | 3,639 | 14,786 | 14,027 | ||||||||
Plant availability3 | |||||||||||
Western Power4 | 96 | % | 97 | % | 95 | % | 96 | % | |||
Eastern Power1,5 | 90 | % | 93 | % | 90 | % | 90 | % |
1 | Includes the acquisition of four Ontario Solar facilities in 2013 and Cartier phase two of Gros-Morne starting in November 2012. |
2 | Includes our 50 per cent ownership of Sundance B volumes through the ASTC Power Partnership. Sundance A Unit 1 returned to service in early September 2013 and Unit 2 returned to service in early October 2013. |
3 | The percentage of time in a period that the plant is available to generate power, regardless of whether it is running. |
4 | Does not include facilities that provide power to us under PPAs. |
5 | Does not include Bécancour because power generation has been suspended since 2008. |
Western Power
Western Power’s comparable EBITDA decreased by $24 million for the three months ended December 31, 2013 compared to the same period in 2012 due to the net effect of:
Average spot market power prices in Alberta decreased by 39 per cent to $48 per MWh for the three months ended December 31, 2013 compared to the same period in 2012. This decrease was the result of changes in the Alberta power supply and demand balance reflecting the return of Sundance A Units 1 and 2, significantly fewer coal plant outages and higher wind output in fourth quarter 2013 compared to fourth quarter 2012. Realized power prices on power sales can be higher or lower than spot market power prices in any given period, as a result of contracting activities.
Approximately 68 per cent of Western Power sales volumes were sold under contract this quarter compared to 80 per cent in fourth quarter 2012. To reduce exposure to spot market prices in Alberta, Western Power enters into fixed price forward sales to secure future revenue and a portion of our power is retained to be sold in the spot market or under shorter-term forward arrangements. The amount sold forward will vary depending on market conditions and market liquidity and has historically ranged between 25 to 75 per cent of expected future production with a higher proportion being hedged in the near term periods. Such forward sales may be completed with medium and large industrial and commercial companies and other market participants and will affect our average realized price (versus spot price) in future periods.
Eastern Power
Eastern Power’s comparable EBITDA increased by $5 million for the three months ended December 31, 2013 compared to the same period in 2012 mainly due to higher earnings at Bécancour and the acquisition of four Ontario Solar facilities in 2013.
BRUCE POWER
Our proportionate share.
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|||||||||
(unaudited – millions of $ unless noted otherwise) | 2013 | 2012 | 2013 | 2012 | ||||||
Income/(loss) from equity investments1 | ||||||||||
Bruce A | 70 | (54 | ) | 202 | (149 | ) | ||||
Bruce B | 45 | 46 | 108 | 163 | ||||||
115 | (8 | ) | 310 | 14 | ||||||
Comprised of: | ||||||||||
Revenues | 342 | 228 | 1,258 | 763 | ||||||
Operating expenses | (145 | ) | (165 | ) | (618 | ) | (567 | ) | ||
Depreciation and other | (82 | ) | (71 | ) | (330 | ) | (182 | ) | ||
115 | (8 | ) | 310 | 14 | ||||||
Bruce Power – Other information | ||||||||||
Plant availability2 | ||||||||||
Bruce A3 | 90 | % | 52 | % | 82 | % | 54 | % | ||
Bruce B | 98 | % | 100 | % | 89 | % | 95 | % | ||
Combined Bruce Power | 94 | % | 79 | % | 86 | % | 81 | % | ||
Planned outage days | ||||||||||
Bruce A | – | 123 | 123 | 336 | ||||||
Bruce B | – | – | 140 | 46 | ||||||
Unplanned outage days | ||||||||||
Bruce A | 18 | 11 | 63 | 18 | ||||||
Bruce B | 7 | – | 20 | 25 | ||||||
Sales volumes (GWh)1 | ||||||||||
Bruce A3 | 2,907 | 1,609 | 10,033 | 4,194 | ||||||
Bruce B | 2,177 | 2,278 | 7,824 | 8,475 | ||||||
5,084 | 3,887 | 17,857 | 12,669 | |||||||
Realized sales price per MWh4 | ||||||||||
Bruce A | $71 | $68 | $70 | $68 | ||||||
Bruce B | $54 | $54 | $54 | $55 | ||||||
Combined Bruce Power | $62 | $57 | $62 | $57 | ||||||
1 | Represents our 48.9 per cent ownership interest in Bruce A and 31.6 per cent ownership interest in Bruce B. Sales volumes exclude deemed generation. |
2 | The percentage of time the plant was available to generate power, regardless of whether it was running. |
3 | Plant availability and sales volumes for 2013 and 2012 include the incremental impact of Units 1 and 2 which were returned to service in October 2012. |
4 | Calculated based on actual and deemed generation. Bruce B realized sales prices per MWh includes revenues under the floor price mechanism and revenues from contract settlements. |
Equity income from Bruce A increased by $124 million for the three months ended December 31, 2013 compared to the same period in 2012. The increase was mainly due to:
Under the contract with the OPA, all of the output from Bruce A is sold at a fixed price per MWh. The fixed price is adjusted annually on April 1 for inflation and other provisions under the OPA contract. Bruce A also recovers fuel costs from the OPA.
Bruce A Fixed price | Per MWh |
April 1, 2013 – March 31, 2014 | $70.99 |
April 1, 2012 – March 31, 2013 | $68.23 |
April 1, 2011 – March 31, 2012 | $66.33 |
Under the same contract, all output from Bruce B is subject to a floor price adjusted annually for inflation on April 1.
Bruce B Floor price | Per MWh |
April 1, 2013 – March 31, 2014 | $52.34 |
April 1, 2012 – March 31, 2013 | $51.62 |
April 1, 2011 – March 31, 2012 | $50.18 |
Amounts received under the Bruce B floor price mechanism within a calendar year are subject to repayment if the monthly average spot price exceeds the floor price. Bruce Power has not had to repay any amounts in the past three years.
Bruce B also enters into fixed-price contracts under which it receives or pays the difference between the contract price and the spot price.
The overall plant availability percentage in 2014 is expected to be in the high 80s for both Bruce A and Bruce B. Planned maintenance on a Bruce A unit is scheduled to occur in the first half of 2014. Planned maintenance on two Bruce B units is scheduled to occur in first and fourth quarters 2014.
U.S. POWER
Comparable EBITDA and comparable EBIT are non-GAAP measures. See non-GAAP measures section for more information.
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||||||||
(unaudited – millions of US$) | 2013 | 2012 | 2013 | 2012 | |||||
Revenue | |||||||||
Power1 | 333 | 353 | 1,484 | 1,189 | |||||
Capacity | 78 | 53 | 295 | 234 | |||||
Other2 | 5 | 22 | 56 | 51 | |||||
416 | 428 | 1,835 | 1,474 | ||||||
Commodity purchases resold | (251 | ) | (217 | ) | (1,003 | ) | (765 | ) | |
Plant operating costs and other2 | (86 | ) | (149 | ) | (462 | ) | (452 | ) | |
General, administrative and support costs | (14 | ) | (14 | ) | (47 | ) | (48 | ) | |
Comparable EBITDA | 65 | 48 | 323 | 209 | |||||
Comparable depreciation and amortization | (27 | ) | (31 | ) | (107 | ) | (121 | ) | |
Comparable EBIT | 38 | 17 | 216 | 88 | |||||
1 | The realized gains and losses from financial derivatives used to buy and sell power, natural gas and fuel oil to manage U.S. Power’s assets are presented on a net basis in power revenues. |
2 | Includes revenues and costs related to a third party service agreement at Ravenswood. |
Sales volumes and plant availability
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(unaudited) | 2013 | 2012 | 2013 | 2012 | ||||||
Physical sales volumes (GWh) | ||||||||||
Supply | ||||||||||
Generation | 1,152 | 2,276 | 6,173 | 7,567 | ||||||
Purchased | 2,259 | 2,550 | 9,001 | 9,408 | ||||||
3,411 | 4,826 | 15,174 | 16,975 | |||||||
Plant availability1,2 | 71 | % | 81 | % | 84 | % | 85 | % |
1 | The percentage of time the plant was available to generate power, regardless of whether it was running. |
2 | Plant availability decreased in the three months ended December 31, 2013 due to the impact of planned outages at Ravenswood. |
U.S. Power’s comparable EBITDA was US$17 million higher for the three months ended December 31, 2013 compared to the same period in 2012. The increase was the net effect of:
Spot capacity prices in New York City were approximately 91 per cent higher in fourth quarter 2013 compared to the same period in 2012. This increase in spot capacity prices and the impact of hedging activities resulted in higher realized prices in New York.
Commodity prices in U.S. Power were higher in 2013 as natural gas prices recovered from low levels in 2012. Higher natural gas prices and fuel transportation constraints in the Northeast United States were factors that contributed to ISO power prices in New England increasing by approximately 33 per cent in fourth quarter 2013 compared to the same period in 2012. Revenue, commodity purchases resold, and plant operating costs and other, which includes fuel gas consumed in generation, were impacted by this increase in commodity prices.
Physical sales volumes in the three months ended December 31, 2013 decreased compared to the same period in 2012. Generation volumes decreased primarily due to lower generation at the Ravenswood facility in fourth quarter 2013 compared to fourth quarter 2012, when Ravenswood ran at higher than normal levels during and following Superstorm Sandy when damage at several other power and transmission facilities reduced power supply in New York City. Purchased volumes were lower in fourth quarter 2013 compared to the same period in 2012 as volumes purchased to serve the commercial and industrial customers in the New England market decreased, partially offset by higher volumes in the PJM market. Both Revenue and Plant operating costs and other were impacted by these lower volumes.
As at December 31, 2013, approximately 4,300 GWh or 53 per cent of U.S. Power’s planned generation is contracted for 2014, and 1,800 GWh or 24 per cent for 2015. Planned generation fluctuates depending on hydrology, wind conditions, commodity prices and the resulting dispatch of the assets. Power sales fluctuate based on customer usage.
NATURAL GAS STORAGE AND OTHER
Comparable EBITDA and comparable EBIT are non-GAAP measures. See non-GAAP measures section for more information.
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(unaudited – millions of $) | 2013 | 2012 | 2013 | 2012 | |||||
Natural Gas Storage and other1 | 30 | 23 | 73 | 77 | |||||
General, administrative and support costs | (3 | ) | (3 | ) | (10 | ) | (10 | ) | |
Comparable EBITDA | 27 | 20 | 63 | 67 | |||||
Comparable depreciation and amortization | (3 | ) | (2 | ) | (12 | ) | (10 | ) | |
Comparable EBIT | 24 | 18 | 51 | 57 |
1 | Includes our share of equity income from our investment in CrossAlta up to December 18, 2012. In December 2012, we acquired the remaining 40 per cent interest in CrossAlta, bringing our ownership interest to 100 per cent and commenced consolidating their operations. |
Comparable EBITDA increased by $7 million for the three months ended December 31, 2013 compared to the same period in 2012 mainly due to higher volumes at higher realized natural gas storage spreads and incremental earnings from CrossAlta resulting from the acquisition of the remaining 40 per cent interest in December 2012.
OTHER INCOME STATEMENT ITEMS
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(unaudited – millions of $) | 2013 | 2012 | 2013 | 2012 | |||||
Comparable interest expense | 240 | 246 | 984 | 976 | |||||
Comparable interest income and other | (10 | ) | (20 | ) | (42 | ) | (86 | ) | |
Comparable income tax expense | 198 | 123 | 662 | 477 | |||||
Net income attributable to non-controlling interests | 38 | 28 | 125 | 118 |
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(unaudited – millions of $) | 2013 | 2012 | 2013 | 2012 | |||||
Comparable interest on long-term debt (including interest on junior subordinated notes) | |||||||||
Canadian dollar-denominated | 123 | 128 | 495 | 513 | |||||
U.S. dollar-denominated (US$) | 205 | 186 | 766 | 740 | |||||
Foreign exchange | 7 | (1 | ) | 20 | – | ||||
335 | 313 | 1,281 | 1,253 | ||||||
Other interest and amortization (recovery)/expense | (3 | ) | 9 | (10 | ) | 23 | |||
Capitalized interest | (92 | ) | (76 | ) | (287 | ) | (300 | ) | |
Comparable interest expense | 240 | 246 | 984 | 976 |
Comparable interest expense was $6 million lower for the three months ended December 31, 2013 compared to the same period in 2012 because of:
Comparable income tax expense was $75 million higher for the three months ended December 31, 2013 compared to the same period in 2012. The increase was mainly the result of higher pre-tax earnings in 2013 compared to 2012 combined with changes in the proportion of income earned between Canadian and foreign jurisdictions.
Net income attributable to non-controlling interests was $10 million higher for the three months ended December 31, 2013 compared to the same period in 2012. The increase is because of the sale of a 45 percent interest in each of GTN LLC and Bison to TC PipeLines, LP in July 2013.
CONDENSED CONSOLIDATED STATEMENT OF INCOME | |||||||||
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||||||||
(unaudited – millions of Canadian $ except per share amounts) | 2013 | 2012 | 2013 | 2012 | |||||
Revenues | |||||||||
Natural gas pipelines | 1,226 | 1,087 | 4,497 | 4,264 | |||||
Oil pipelines | 294 | 270 | 1,124 | 1,039 | |||||
Energy | 812 | 732 | 3,176 | 2,704 | |||||
2,332 | 2,089 | 8,797 | 8,007 | ||||||
Income from Equity Investments | 174 | 61 | 597 | 257 | |||||
Operating and Other Expenses | |||||||||
Plant operating costs and other | 735 | 731 | 2,674 | 2,577 | |||||
Commodity purchases resold | 359 | 291 | 1,317 | 1,049 | |||||
Property taxes | 92 | 88 | 445 | 434 | |||||
Depreciation and amortization | 396 | 343 | 1,485 | 1,375 | |||||
1,582 | 1,453 | 5,921 | 5,435 | ||||||
Financial Charges/(Income) | |||||||||
Interest expense | 240 | 246 | 985 | 976 | |||||
Interest income and other | (1 | ) | (15 | ) | (34 | ) | (85 | ) | |
239 | 231 | 951 | 891 | ||||||
Income before Income Taxes | 685 | 466 | 2,522 | 1,938 | |||||
Income Tax Expense | |||||||||
Current | 3 | 80 | 43 | 181 | |||||
Deferred | 205 | 38 | 568 | 285 | |||||
208 | 118 | 611 | 466 | ||||||
Net Income | 477 | 348 | 1,911 | 1,472 | |||||
Net income attributable to non-controlling interests | 38 | 28 | 125 | 118 | |||||
Net Income Attributable to Controlling Interests | 439 | 320 | 1,786 | 1,354 | |||||
Preferred share dividends | 19 | 14 | 74 | 55 | |||||
Net Income Attributable to Common Shares | 420 | 306 | 1,712 | 1,299 | |||||
Net Income per Common Share | |||||||||
Basic and diluted | $0.59 | $0.43 | $2.42 | $1.84 | |||||
Dividends Declared per Common Share | $0.46 | $0.44 | $1.84 | $1.76 | |||||
Weighted Average Number of Common Shares (millions) | |||||||||
Basic | 707 | 705 | 707 | 705 | |||||
Diluted | 708 | 705 | 708 | 706 |
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | |||||||||
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||||||||
(unaudited – millions of Canadian $) | 2013 | 2012 | 2013 | 2012 | |||||
Cash Generated from Operations | |||||||||
Net income | 477 | 348 | 1,911 | 1,472 | |||||
Depreciation and amortization | 396 | 343 | 1,485 | 1,375 | |||||
Deferred income taxes | 205 | 38 | 568 | 285 | |||||
Income from equity investments | (174 | ) | (61 | ) | (597 | ) | (257 | ) | |
Distributed earnings received from equity investments | 178 | 124 | 605 | 376 | |||||
Employee post-retirement benefits funding lower than expense | 17 | 22 | 50 | 9 | |||||
Other | (16 | ) | 4 | (22 | ) | 24 | |||
(Increase)/decrease in operating working capital | (74 | ) | 207 | (326 | ) | 287 | |||
Net cash provided by operations | 1,009 | 1,025 | 3,674 | 3,571 | |||||
Investing Activities | |||||||||
Capital expenditures | (1,431 | ) | (1,040 | ) | (4,461 | ) | (2,595 | ) | |
Equity investments | (62 | ) | (95 | ) | (163 | ) | (652 | ) | |
Acquisitions, net of cash acquired | (62 | ) | (214 | ) | (216 | ) | (214 | ) | |
Deferred amounts and other | (13 | ) | 123 | (280 | ) | 205 | |||
Net cash used in investing activities | (1,568 | ) | (1,226 | ) | (5,120 | ) | (3,256 | ) | |
Financing Activities | |||||||||
Dividends on common and preferred shares | (344 | ) | (325 | ) | (1,356 | ) | (1,281 | ) | |
Distributions paid to non-controlling interests | (52 | ) | (34 | ) | (166 | ) | (135 | ) | |
Notes payable issued/(repaid), net | 126 | 790 | (492 | ) | 449 | ||||
Long-term debt issued, net of issue costs | 1,336 | 3 | 4,253 | 1,491 | |||||
Repayment of long-term debt | (56 | ) | (198 | ) | (1,286 | ) | (980 | ) | |
Common shares issued | 13 | 18 | 72 | 53 | |||||
Preferred shares issued, net of issue costs | – | – | 585 | – | |||||
Partnership units of subsidiary issued, net of issue costs | – | – | 384 | – | |||||
Preferred shares of subsidiary redeemed | (200 | ) | – | (200 | ) | – | |||
Net cash provided by/(used in) financing activities | 823 | 254 | 1,794 | (403 | ) | ||||
Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents | 18 | 4 | 28 | (15 | ) | ||||
Increase/(Decrease) in Cash and Cash Equivalents | 282 | 57 | 376 | (103 | ) | ||||
Cash and Cash Equivalents | |||||||||
Beginning of period | 645 | 494 | 551 | 654 | |||||
Cash and Cash Equivalents | |||||||||
End of period | 927 | 551 | 927 | 551 |
CONDENSED CONSOLIDATED BALANCE SHEET | ||||||
December 31 | December 31 | |||||
(unaudited – millions of Canadian $) | 2013 | 2012 | ||||
ASSETS | ||||||
Current Assets | ||||||
Cash and cash equivalents | 927 | 551 | ||||
Accounts receivable | 1,122 | 1,052 | ||||
Inventories | 251 | 224 | ||||
Other | 847 | 997 | ||||
3,147 | 2,824 | |||||
Plant, Property and Equipment, net of accumulated depreciation of $17,851 and $16,540, respectively | 37,606 | 33,713 | ||||
Equity Investments | 5,759 | 5,366 | ||||
Regulatory Assets | 1,735 | 1,629 | ||||
Goodwill | 3,696 | 3,458 | ||||
Intangible and Other Assets | 1,955 | 1,406 | ||||
53,898 | 48,396 | |||||
LIABILITIES | ||||||
Current Liabilities | ||||||
Notes payable | 1,842 | 2,275 | ||||
Accounts payable and other | 2,155 | 2,344 | ||||
Accrued interest | 388 | 368 | ||||
Current portion of long-term debt | 973 | 894 | ||||
5,358 | 5,881 | |||||
Regulatory Liabilities | 229 | 268 | ||||
Other Long-Term Liabilities | 656 | 882 | ||||
Deferred Income Tax Liabilities | 4,564 | 4,016 | ||||
Long-Term Debt | 21,892 | 18,019 | ||||
Junior Subordinated Notes | 1,063 | 994 | ||||
33,762 | 30,060 | |||||
EQUITY | ||||||
Common shares, no par value | 12,149 | 12,069 | ||||
Issued and outstanding: | December 31, 2013 – 707 million shares | |||||
December 31, 2012 – 705 million shares | ||||||
Preferred shares | 1,813 | 1,224 | ||||
Additional paid-in capital | 401 | 379 | ||||
Retained earnings | 5,096 | 4,687 | ||||
Accumulated other comprehensive loss | (934 | ) | (1,448 | ) | ||
Controlling Interests | 18,525 | 16,911 | ||||
Non-controlling interests | 1,611 | 1,425 | ||||
20,136 | 18,336 | |||||
53,898 | 48,396 |
SEGMENTED INFORMATION | ||||||||||||||||||||
three months ended December 31 | Natural Gas Pipelines | Oil Pipelines | Energy | Corporate | Total | |||||||||||||||
(unaudited – millions of Canadian $) | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||
Revenues | 1,226 | 1,087 | 294 | 270 | 812 | 732 | – | – | 2,332 | 2,089 | ||||||||||
Income from equity investments | 40 | 37 | – | – | 134 | 24 | – | – | 174 | 61 | ||||||||||
Plant operating costs and other | (423 | ) | (373 | ) | (86 | ) | (88 | ) | (195 | ) | (238 | ) | (31 | ) | (32 | ) | (735 | ) | (731 | ) |
Commodity purchases resold | – | – | – | – | (359 | ) | (291 | ) | – | – | (359 | ) | (291 | ) | ||||||
Property taxes | (65 | ) | (61 | ) | (10 | ) | (10 | ) | (17 | ) | (17 | ) | – | – | (92 | ) | (88 | ) | ||
Depreciation and amortization | (280 | ) | (236 | ) | (38 | ) | (36 | ) | (74 | ) | (68 | ) | (4 | ) | (3 | ) | (396 | ) | (343 | ) |
498 | 454 | 160 | 136 | 301 | 142 | (35 | ) | (35 | ) | 924 | 697 | |||||||||
Interest expense | (240 | ) | (246 | ) | ||||||||||||||||
Interest income and other | 1 | 15 | ||||||||||||||||||
Income before income taxes | 685 | 466 | ||||||||||||||||||
Income tax expense | (208 | ) | (118 | ) | ||||||||||||||||
Net Income | 477 | 348 | ||||||||||||||||||
Net Income Attributable to Non-Controlling Interests | (38 | ) | (28 | ) | ||||||||||||||||
Net Income Attributable to Controlling Interests | 439 | 320 | ||||||||||||||||||
Preferred Share Dividends | (19 | ) | (14 | ) | ||||||||||||||||
Net Income Attributable to Common Shares | 420 | 306 |
year ended December 31 | Natural Gas
Pipelines |
Oil Pipelines | Energy | Corporate | Total | ||||||||||||||
(unaudited – millions of Canadian $) | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||
Revenues | 4,497 | 4,264 | 1,124 | 1,039 | 3,176 | 2,704 | – | – | 8,797 | 8,007 | |||||||||
Income from equity invest-ments | 145 | 157 | – | – | 452 | 100 | – | – | 597 | 257 | |||||||||
Plant operating costs and other | (1,405 | ) | (1,365 | ) | (328 | ) | (296 | ) | (833 | ) | (819 | ) | (108 | ) | (97 | ) | (2,674 | ) | (2,577) |
Commodity purchases resold | – | – | – | – | (1,317 | ) | (1,049 | ) | – | – | (1,317 | ) | (1,049) | ||||||
Property taxes | (329 | ) | (315 | ) | (44 | ) | (45 | ) | (72 | ) | (74 | ) | – | – | (445 | ) | (434) | ||
Deprecia-tion and amortiza-tion | (1,027 | ) | (933 | ) | (149 | ) | (145 | ) | (293 | ) | (283 | ) | (16 | ) | (14 | ) | (1,485 | ) | (1,375) |
1,881 | 1,808 | 603 | 553 | 1,113 | 579 | (124 | ) | (111 | ) | 3,473 | 2,829 | ||||||||
Interest expense | (985 | ) | (976) | ||||||||||||||||
Interest income and other | 34 | 85 | |||||||||||||||||
Income before income taxes | 2,522 | 1,938 | |||||||||||||||||
Income tax expense | (611 | ) | (466) | ||||||||||||||||
Net Income | 1,911 | 1,472 | |||||||||||||||||
Net Income Attributable to Non-Controlling Interests | (125 | ) | (118) | ||||||||||||||||
Net Income Attributable to Controlling Interests | 1,786 | 1,354 | |||||||||||||||||
Preferred Share Dividends | (74) | (55) | |||||||||||||||||
Net Income Attributable to Common Shares | 1,712 | 1,299 |
TransCanada Media Enquiries:
Shawn Howard/Grady Semmens/Davis Sheremata
403.920.7859 or 800.608.7859
TransCanada Investor & Analyst Enquiries:
David Moneta/Lee Evans
403.920.7911 or 800.361.6522
www.transcanada.com