TRANSCANADA NET INCOME $2.136 BLN
TRANSCANADA - TransCanada Corporation (TSX, NYSE: TRP) (TransCanada or the Company) announced net income attributable to common shares for third quarter 2017 of $612 million or $0.70 per share compared to a net loss of $135 million or $0.17 per share for the same period in 2016. Comparable earnings for third quarter 2017 were $614 million or $0.70 per share compared to $622 million or $0.78 per share for the same period in 2016. TransCanada's Board of Directors also declared a quarterly dividend of $0.625 per common share for the quarter ending December 31, 2017, equivalent to $2.50 per common share on an annualized basis.
"During the third quarter of 2017, our diversified portfolio of high-quality, long-life energy infrastructure assets continued to perform very well," said Russ Girling, TransCanada's president and chief executive officer. "While comparable earnings are lower compared to the same quarter in 2016, the reduction is largely attributable to completing the sale of our U.S. Northeast Power generation portfolio in second quarter 2017. Over the first nine months of this year, financial performance has been very strong with comparable earnings per share increasing 12 per cent compared to the same period in 2016. Looking forward, we anticipate continued solid financial performance as over 95 per cent of our earnings before interest, taxes, depreciation and amortization (EBITDA) is expected to come from regulated or long-term contracted assets."
"In the third quarter, we continued to advance our near-term capital program by placing the Grand Rapids pipeline into service. In addition, we continue to progress $24 billion of other near-term capital projects that are expected to generate significant growth in earnings and cash flow and support an expected annual dividend growth rate at the upper end of an eight to 10 per cent range through 2020," added Girling. "We have invested approximately $10 billion into these projects to date and are well positioned to fund the remainder of this capital program over the next few years through our strong internally generated cash flow and access to capital markets on compelling terms. To date in the fourth quarter we have recovered approximately $0.6 billion of development costs associated with the Prince Rupert Gas Transmission project and agreed to sell our Ontario solar portfolio for approximately $540 million. The proceeds will be used to fund a portion of our capital program and for general corporate purposes."
"Despite the disappointing termination of the Energy East, Eastern Mainline and Upland projects, we continue to progress a number of additional medium to longer-term organic growth opportunities in our three core businesses of natural gas pipelines, liquids pipelines and energy in Canada, the United States and Mexico. Success in advancing Keystone XL or other growth initiatives, including the Bruce Power life extension, could further augment or extend the Company's dividend growth outlook," concluded Girling.
• Third quarter 2017 financial results
◦ Net income attributable to common shares of $612 million or $0.70 per share
◦ Comparable earnings of $614 million or $0.70 per share
◦ Comparable earnings before interest, taxes, depreciation and amortization of $1.7 billion
◦ Net cash provided by operations of $1.2 billion
◦ Comparable funds generated from operations of $1.3 billion
◦ Comparable distributable cash flow of $769 million or $0.88 per common share
• Declared a quarterly dividend of $0.625 per common share for the quarter ending December 31, 2017
• Placed the $0.9 billion Grand Rapids pipeline in service
• Received approval from Canada's National Energy Board (NEB) to commence service on the Canadian Mainline
long-term fixed price service effective November 1, 2017
• After careful review of changed circumstances, announced the termination of Energy East and related projects
and expect an estimated $1 billion after-tax non-cash charge will be recorded in fourth quarter 2017
• In October, received $0.6 billion related to development costs and carrying charges on the Prince Rupert Gas
Transmission (PRGT) project following Progress Energy's decision to terminate their agreement with us
• Raised $1 billion in proceeds through a Canadian offering of Medium Term Notes maturing in 2028 and 2047
• On October 25, announced an agreement to sell our Ontario solar portfolio for approximately $540 million with
proceeds to be used to partially fund our near-term capital program. The transaction is expected to result in an
estimated $100 million after-tax gain to be recognized upon closing
• In November, the $1 billion Northern Courier pipeline achieved commercial in-service, and we placed the US$0.4
billion Rayne XPress pipeline and the US$0.3 billion Gibraltar project in service. We expect to bring the US$1.6
billion Leach XPress project in service in early January 2018
• Advanced the Portland XPress and Buckeye XPress projects to move additional gas across our pipeline network
Net income attributable to common shares increased by $747 million to $612 million or $0.70 per share for the three months ended September 30, 2017 compared to the same period last year. Net income per common share in third quarter 2017 includes the dilutive effect of issuing 60 million common shares in fourth quarter 2016. Third quarter 2017 results included an additional $12 million after-tax net loss on sales of U.S. Northeast Power assets, an after-tax charge of $30 million for integration-related costs associated with the acquisition of Columbia and an $8 million aftertax charge related to the maintenance of Keystone XL assets. Third quarter 2016 included a $656 million after-tax goodwill impairment charge, an after-tax charge of $67 million related to costs associated with the acquisition of Columbia, recognition of $28 million of income tax recoveries resulting from a third party sale of Keystone XL project assets, a $9 million after-tax charge related to Keystone XL maintenance and liquidation costs and $3 million of after-tax costs related to the sale of our U.S. Northeast Power business. All of these specific items as well as unrealized gains and losses from changes in risk management activities, are excluded from comparable earnings.
Comparable earnings for third quarter 2017 were $614 million or $0.70 per share compared to $622 million or $0.78 per share for the same period in 2016, a decrease of $8 million or $0.08 per share. Comparable earnings per share for the three months ended September 30, 2017 include the dilutive effect of issuing 60 million common shares in fourth quarter 2016. The decrease in third quarter comparable earnings was primarily due to the net effect of the monetization of our U.S. Northeast Power generation assets in second quarter 2017 and a lower contribution from U.S.
Natural Gas Pipelines primarily due to the timing of funding contributions to the Columbia Gas defined benefit pension plan, partially offset by higher ANR transportation revenues resulting from a Federal Energy Regulatory Commission (FERC)-approved rate settlement, effective August 1, 2016, higher AFUDC on our rate-regulated U.S. Natural Gas Pipelines, lower interest expense mainly due to the repayment of the remaining bridge facilities that partially funded the acquisition of Columbia, higher interest income and other primarily due to realized gains in 2017 compared to realized losses in 2016 on derivatives used to manage our net exposure to foreign exchange rate fluctuations on U.S. dollardenominated income and income recognized on the termination of the PRGT project, higher contribution from Liquids Pipelines primarily due to higher Keystone volumes and the commencement of operations on Grand Rapids, higher earnings from Bruce Power mainly due to improved results from contracting activities, and a higher contribution from Mexico Natural Gas Pipelines primarily due to earnings from Mazatlán beginning in December 2016, partially offset by the impairment of our equity investment in TransGas.
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