TransCanada reports strong 4Q14 and year-end financial results

TransCanada Corporation announced net income attributable to common shares for 4Q14 of CAN$458 million or CAN$0.65 per share compared to CAN$420 million or CAN$0.59 per share for the same period in 2013. For the year ended 31 December 2014, net income attributable to common shares was CAN$1.7 billion or CAN$2.46 per share compared to CAN$1.7 billion or CAN$2.42 per share in 2013. Comparable earnings for 4Q14 were CAN$511 million or CAN$0.72 per share compared to CAN$410 million or CAN$0.58 per share for the same period last year. For the year ended 31 December 2014, comparable earnings were CAN$1.7 billion or CAN$2.42 per share compared to CAN$1.6 billion or CAN$2.24 per share in 2013. TransCanada's Board of Directors also declared a quarterly dividend of CAN$0.52 per common share for the quarter ending 31 March 2015, equivalent to CAN$2.08 per common share on an annualised basis, an increase of 8%. This is the fifteenth consecutive year the Board of Directors has raised the dividend.

"Comparable earnings and funds generated from operations in 2014 increased 8% and 7%, respectively compared to last year," said Russ Girling, TransCanada's President and Chief Executive Officer. "Our strong performance reflects the diversity and stability of our complementary businesses and CAN$3.8 billion of new assets that were placed into service in 2014. Looking forward, the resiliency of our business model and a strong balance sheet leaves us well positioned to continue to create shareholder value under various market conditions.

"With an additional CAN$12 billion of small-to-medium sized projects expected to be completed and placed into service by the end of 2017, and the steps we have taken to solidify the long-term returns from existing assets such as the Canadian Mainline and ANR, we are also pleased to announce an 8% increase in the common share dividend", added Girling. "Our financial strength and flexibility provides us with the capacity to raise the dividend and to continue to prudently fund our industry-leading capital programme."

Over the course of 2014, TransCanada captured approximately CAN$7 billion of new projects primarily related to its Canadian regulated natural gas pipeline business. With these additions, the capital programme now includes CAN$46 billion of commercially secured projects, which are backed by long-term contracts or cost of service business models. The company continues to advance this unprecedented slate of growth initiatives, with many currently under construction or proceeding through their respective regulatory processes. Over the remainder of the decade, subject to required approvals, this blue-chip portfolio of contracted energy infrastructure is expected to generate significant sustainable growth in earnings, cash flow and dividends.

Highlights

4Q14

• Net income attributable to common shares of CAN$458 million or CAN$0.65 per share.
• Comparable earnings of CAN$511 million or CAN$0.72 per share.
• Comparable earnings before interest, taxes, depreciation and amortisation (EBITDA) of CAN$1.5 billion.
• Funds generated from operations of CAN$1.2 billion.

2014

• Net income attributable to common shares of CAN$1.7 billion or CAN$2.46 per share.
• Comparable earnings of CAN$1.7 billion or CAN$2.42 per share.
• Comparable EBITDA of CAN$5.5 billion.
• Funds generated from operations of CAN$4.3 billion.
• Announced an increase in the quarterly common share dividend of 8% to CAN$0.52 per share for the quarter ending 31 March 2015.
• Received National Energy Board (NEB) approval for the Canadian Mainline 2015-2030 Tolls Application.
• Filed regulatory applications with the NEB for the CAN$12 billion Energy East Project and the CAN$1.5 billion Eastern Mainline Project on 30 October 2014.
• Received Environmental Assessment Certificates (EAC) from the B.C. Environmental Assessment Office (BC EAO) for Coastal GasLink and Prince Rupert Gas Transmission.
• Commenced construction on the CAN$1.5 billion Grand Rapids Pipeline Project and the CAN$1 billion Napanee Power Project.
• Nebraska State Supreme Court vacated a lower court's ruling that the law approving the route for the Keystone XL project was unconstitutional. The current route through Nebraska remains valid.
• Closed the CAN$60 million purchase of an additional solar facility in Ontario in late December.
• Closed the sale of its remaining 30% interest in the Bison pipeline and announced its intention to sell the remaining 30% interest in Gas Transmission Northwest LLC (GTN) to TC PipeLines, LP as part of advancing its master limited partnership drop down strategy.

Net income attributable to common shares increased by CAN$38 million to CAN$458 million or CAN$0.65 per share for the three months ended 31 December 2014 compared to the same period in 2013. Both years included unrealised gains and losses from changes in certain risk management activities. 4Q14 results also included an CAN$8 million after-tax gain from the sale of Gas Pacifico/INNERGY.

Net income attributable to common shares for the year ended 31 December 2014 was CAN$1.7 billion or CAN$2.46 per share compared to CAN$1.7 billion or CAN$2.42 per share in 2013. Results in 2014 included a net after-tax gain of CAN$99 million from the sale of Cancarb and its related power generation facility, an after-tax CAN$32 million expense for terminating a natural gas storage contract and an CAN$8 million after-tax gain from the sale of Gas Pacifico/INNERGY. Results in 2013 included CAN$84 million of net income related to the 2012 impact of the 2013 NEB decision on the Canadian Mainline as well as a CAN$25 million favourable income tax adjustment due to the enactment of Canadian Federal tax legislation relating to Part VI.I tax. These amounts, along with unrealised gains and losses on risk management activities, were excluded from comparable earnings.

Comparable earnings for 4Q14 were CAN$511 million or CAN$0.72 per share compared to CAN$410 million or CAN$0.58 per share for the same period in 2013. Higher earnings from the Keystone Pipeline System, the Canadian Mainline, Mexican Pipelines and US Power were partially offset by higher interest expense.

Comparable earnings for the year ended 31 December 2014 were CAN$1.7 billion or CAN$2.42 per share compared to CAN$1.6 billion or CAN$2.24 per share in 2013. Higher earnings from the Keystone Pipeline System, the Canadian Mainline, Mexican Pipelines, US and International Pipelines, Eastern Power and US Power were partially offset by higher interest expense and lower contributions from Western Power.

Adapted from press release by Rosalie Starling

Read the article online at: https://www.worldpipelines.com/business-news/16022015/transcanada-reports-strong-4q14-and-year-end-financial-results-131/