TRANSCANADA NET INCOME $365 MLN
TransCanada Corporation (TSX:TRP) (NYSE:TRP) (TransCanada) announced net income attributable to common shares for second quarter 2016 of $365 million or $0.52 per share compared to $429 million or $0.60 per share for the same period in 2015. Comparable earnings for second quarter 2016 were $366 million or $0.52 per share compared to $397 million or $0.56 per share for the same period in 2015. TransCanada's Board of Directors also declared a quarterly dividend of $0.565 per common share for the quarter ending September 30, 2016, equivalent to $2.26 per common share on an annualized basis.
"Our portfolio of high-quality energy infrastructure assets continued to perform well during the second quarter of 2016," said Russ Girling, TransCanada's president and chief executive officer. "Net income was impacted by one-time dividend equivalent payments on the subscription receipts related to the acquisition of Columbia, while comparable earnings largely reflected planned maintenance activities at Bruce Power including an approximate once-a-decade station containment outage. With the addition of Columbia and Bruce Power's planned maintenance outages now largely complete, we expect to generate stronger results going forward."
On July 1, 2016, TransCanada completed the acquisition of Columbia Pipeline Group, Inc. (Columbia) valued at US$13 billion, comprised of a purchase price of approximately US$10.3 billion and Columbia debt of approximately US$2.7 billion. The subscription receipts issued in April to fund a portion of the Columbia acquisition were exchanged into common shares following closing.
"The Columbia acquisition reinforces TransCanada's position as a leading North American energy infrastructure company with an extensive pipeline network linking the continent's most prolific natural gas supply basins to its most attractive markets," added Girling. "The Columbia assets are very complementary to our existing business and we expect significant synergies and growth in the years to come. Our industry-leading $25 billion portfolio of near-term capital projects builds upon a solid portfolio of stable and predictable pipeline and energy assets that together supports and may augment an expected eight to ten per cent annual dividend growth rate through 2020."
(All financial figures are unaudited and in Canadian dollars unless noted otherwise)
- Second quarter financial results
- Net income attributable to common shares of $365 million or $0.52 per share
- Comparable earnings of $366 million or $0.52 per share
- Comparable earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.4 billion
- Funds generated from operations of $831 million, including $109 million of dividend equivalent payments on the subscription receipts
- Comparable distributable cash flow of $698 million or $0.99 per common share
- Declared a quarterly dividend of $0.565 per common share for the quarter ending September 30, 2016
- On July 1, 2016, we closed the acquisition of Columbia valued at US$13 billion comprised of a purchase price of approximately US$10.3 billion and Columbia debt of approximately US$2.7 billion
- On July 4, 2016, exchanged 96.6 million subscription receipts into the same number of common shares
- Awarded a contract to construct the US$2.1 billion Sur de Texas to Tuxpan pipeline in Mexico, a joint venture with IEnova. TransCanada holds a 60 per cent interest in the joint venture and will operate the pipeline
- Announced reinstatement of issuance of common shares from treasury at a two per cent discount under TransCanada's Dividend Reinvestment Plan commencing with the dividends declared on July 27, 2016
- Continued to advance the monetization of the Company's U.S. Northeast power assets and a minority interest in its Mexican pipeline business.
Net income attributable to common shares decreased by $64 million to $365 million or $0.52 per share for the three months ended June 30, 2016 compared to the same period last year. Second quarter 2016 included a charge of $113 million related to costs associated with the Columbia acquisition which were primarily related to the dividend equivalent payments on the subscription receipts, a net after-tax $10 million restructuring charge related to expected future losses under lease commitments, and $9 million after-tax related to Keystone XL maintenance and liquidation costs. All of these specific items are excluded from comparable earnings.
Comparable earnings for second quarter 2016 were $366 million or $0.52 per share compared to $397 million or $0.56 per share for the same period in 2015. Comparable earnings were lower in the period due to higher interest expenses as a result of debt issuances and lower capitalized interest, higher planned maintenance outage days at Bruce Power, lower volumes on the Keystone and Marketlink pipelines, and lower earnings from Western Power, partially offset by realized gains in 2016 versus realized losses in 2015 on derivatives used to manage our foreign exchange exposure, higher AFUDC on our rate-regulated projects, greater earnings from ANR due to higher transportation revenue and lower OM&A expenses, and higher earnings from U.S. Power mainly due to incremental earnings from Ironwood.
|Second quarter 2016|
|three months ended
|six months ended
|(unaudited - millions of $, except per share amounts)||2016||2015||2016||2015|
|Net income attributable to common shares||365||429||617||816|
|per common share - basic and diluted||$0.52||$0.60||$0.88||$1.15|
|per common share1||$0.52||$0.56||$1.22||$1.22|
|July, 16, 11:05:00|
|July, 16, 11:00:00|
|July, 16, 10:55:00|
|July, 16, 10:50:00|
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|July, 16, 10:40:00|
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