Trans Mountain Corporation Releases Third Quarter 2024 Results

Nov. 28, 2024

Trans Mountain Corporation (“TMC” or “the Company”) released the company’s financial statements and associated management report for the three and nine-month periods ending September 30, 2024. The Company’s financial results are also included in Canada Development Investment Corporation’s consolidated quarterly financial statements.

The newly constructed pipeline and the original pipeline operate collectively as the expanded pipeline system (the “Expanded System”). 2024 continues to be a transitional period for TMC as operations shift from the previous negotiated toll settlement model to the Expanded System’s commercial model. With the commencement of service on the Expanded System occurring on May 1, 2024, the combination of long-term committed contracts, a new toll structure for transportation service and increased throughput capacity, resulted in significant increases both to revenues and operating expenses.

Operational performance has remained strong following the commencement of service on the expanded system, with steady demand for Trans Mountain’s unique access to tidewater. During the third quarter, the expanded pipeline system had an average daily throughput on the mainline of approximately 692,000 barrels per day, with 365,000 barrels per day to Westridge Marine Terminal and 232,000 barrels per day to Washington state on the Puget Sound Pipeline.

For the three month period ended September 30, 2024, total revenues increased by $528.0 million to $665.9 million, as compared to $137.9 million in the same period of the prior year. For the nine months ended September 30, 2024, total revenues increased by $788.9 million to $1,187.1 million, as compared to $398.2 million in the same period of the prior year.

Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) reflect the results from TMC’s base business. For the three month period ended September 30, 2024, Adjusted EBITDA increased by $467.2 million to $512.3 million, as compared to $45.1 million in the same period of the prior year. On a year to date basis, for the nine month period ended September 30, 2024, Adjusted EBITDA increased by $687.8 million to $831.2 million, as compared to $143.4 million in the same period of the prior year. The increase in Adjusted EBITDA for both the three and nine month periods ended September 30, 2024, as compared to the same periods in the prior year, is due to the commencement of commercial operations on the expanded system on May 1, 2024. All deliveries have since been subject to the expanded system tariff and tolls. The new toll structure and the increase in volumes transported on the expanded pipeline system have resulted in a significant increase in transportation volumes, revenues and Adjusted EBITDA.

Net income incorporates depreciation expense and the significant financing impact of the Expansion Project, specifically Equity Allowance for Funds used During Construction (“AFUDC”), interest expense, capitalized debt financing costs, and the goodwill impairment recognized in the prior year. For the three month period ended September 30, 2024, TMC had a net loss of $68.0 million, as compared to net loss of $724.9 million in the same period of the prior year. Net income for the nine month period ended September 30, 2024, totalled $42.3 million, as compared to a net loss of $368.6 million in the same period of the prior year.

As expected, due to the transitional nature of 2024, the net loss recognized for the three and nine months ended September 30, 2024, reflects the commercial commencement of the expanded system on May 1, 2024 which resulted in a significant increase in Adjusted EBITDA, offset by increased depreciation and amortization expense, the cessation of equity AFUDC and capitalized debt financing costs on the Expansion Project, and higher interest expense.

See the full financial statements and management report documents. See Canada Development Investment Corporation’s Quarterly Report.

GAAP and Non-GAAP measures

We make use of certain financial measures that do not have a standardized meaning under U.S. GAAP because we believe they improve management’s ability to evaluate our operating performance and compare results between periods. These are known as non-GAAP measures and may not be similar to measures provided by other entities. The non-GAAP measures discussed above should not be considered as an alternative to or more meaningful than revenues, net income, operating income or other U.S. GAAP measures. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization and equity AFUDC) is a non-GAAP measure we use to evaluate our operating performance and is calculated from its most directly comparable U.S. GAAP measure, operating income but excludes the impact of financing decisions, non-cash depreciation and amortization, and non-cash equity AFUDC.

AFUDC (Allowance for Funds Used During Construction) is an amount recognized under U.S. GAAP by rate-regulated entities to reflect a return on the equity and debt components of capital invested in construction work in progress.

Related Links
Corporate Reports

NT4