TC Pipelines, LP (

TCLP

)

Q2 2011 Earnings Call

July 27, 2011 12:00 PM ET

Executives

Lee Evans – Manager, IR

Steven Becker – President

Robert Jacobucci – Principal Financial Officer and Controller

Analysts

Michael Cerasoli – Goldman Sachs

Gabe Moreen – Bank of America

Robert Chisholm – Center Coast Capital

Avi Feinberg – Morningstar

Presentation

Operator

Compare to:
Previous Statements by TCLP
» TC Pipelines Management Discusses Q1 2011 Results - Earnings Call Transcript
» TC Pipelines LP CEO Discusses Q4 2010 Results - Earnings Call Transcript
» TC Pipelines LP CEO Discusses Q3 2010 Results – Earning Call Transcript
» TC PipeLines, LP Q2 2010 Earnings Call Transcript

All participants please standby. Your conference is ready to begin. Good day, ladies and gentlemen. Welcome to the TC Pipelines, LP 2011 Second Quarter Results Conference Call.

I would now like to turn the meeting over to Mr. Lee Evans, Manager, Investor Relations. Please go ahead, Mr. Evans.

Lee Evans

Thank you, Operator and good day every one. I’d like to welcome you to TC Pipelines Second quarter 2011 conference call. I am joined today by our President Steve Becker, our Principal Financial Officer, Rob Jacobucci and the partnerships newly appointed Vice President and General Manager Stuart Kampel.

We are pleased to provide you with an opportunity to discuss our second quarter results and other general developments regarding the partnership. Please note that a slide presentation will accompany a bit of remarks today. A copy of the presentation is available on our website at www.tcpipelineslp.com, where it can be found under the Investor center under the heading, Events and Presentations.

Before we begin, I’d like to remind you that certain statements made during this conference call will be forward looking regarding future events and future financial performance. All forward looking statements are based on our beliefs, as well as our assumptions made by information currently available to us. These statements reflect our current views with respect to future events and are subject to various risks, uncertainties and assumptions as discussed in detail in our 2010 10-K, as well as our subsequent filing with the Securities of Exchange Commission.

If one of more if these risks or uncertainties materialize or if the underlying assumption proven current, actual results may vary materially from those described in the forward looking statements. Steve will begin today with a review of TC Pipeline second quarter 2011 financial results.

Following that he will provide an update on the activities concerning the partnership during the quarter and its sponsor, TransCanada Corporation. Rob will then proceed to review in detail our financial results for the quarter. Following the prepared remarks, I will ask the conference coordinator to coordinate your questions.

With that I’d now like to turn over the Steve.

Steven Becker

Thanks, Lee. Good day everyone and thank you for joining us. Before I begin my prepared remarks, I’d like to introduce Stuart Campbell, Stuart was recently appointed Vice President and General Manager of partnerships General Partner. Prior to this appointment, Stuart was serving as an officer of our general partner and was also responsible for TransCanada’s business developments efforts in Mexico.

Stuart will have accountability for all aspects of the partnership reporting to me to lead business development efforts as we look to grow the partnership. This new dedicated roll reflects the increased size of the partnership and its growing day-to-day management needs.

I’d like to begin today starting on slide number four. For those of you on the call that are new to TC Pipelines LP we have interest in six pipeline assets capable of moving 8.9 billion cubic feet per day of natural gas. We’re supported by a strong industry sponsor in TransCanada Corporation, our general partner.

They also operate North America’s largest natural gas pipeline network something we consider is one our key competitive advantages. They also have a 33% ownership in the partnership and operate our assets on our behalf as part of their overall pipeline network.

TC Pipelines as a strong balance sheet and ample amount of liquidity in our recent financings in the capital markets over the past quarter are a prime example of this strength. Finally, when taking our recent increase in our quarterly distribution into account, the partnerships current yield equates to 6.5% and is considered an attractive yield for partnership with a low-risk business model, but as a track record of stable and growing cash distributions.

As outlined in this morning’s news release and on slide number five, TC Pipelines reported a strong second quarter results following the acquisition of interest in GTN and Bison. Partnership cash flows increased $1.5 million to $48 million. During the quarter, we paid out $35 million in cash distributions to our unitholders and given our generated cash flows provided ample amount of coverage to ensure payout to our unitholders.

Net income increased 30% in the quarter 2011 to $36 million compared to second quarter of 2010 net income of $28 million. The second quarter 2011 net income is equivalent to $0.69 per common unit. Last week, we announced a $0.77 quarterly cash distribution for the second quarter. This is the partnership’s 49th consecutive quarterly distribution paid to unitholders and marks the 12th consecutive year that the partnership has increased distribution to its unitholders.

As strong track record that demonstrates our stable and growing cash distributions. The second quarter distribution is a 3% increase over the first quarter of 2011 distribution and the 6% increase over the same period last year. Increase in distribution comes from the partnership strong portfolio of assets that is now increased to fixed assets with the recent addition of interest in GTN and Bison Pipelines with a larger percentage of revenues derived from long-term contracts.

Read the rest of this transcript for free on seekingalpha.com