TCP - Earnings call transcript Q1 2018

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Operator

To begin. Good morning, ladies and gentlemen and welcome to the TC PipeLines, LP 2018 First Quarter Results Conference Call. I’ll now like to turn the meeting over to Ms. Rhonda Amundson. Please go ahead, Ms. Amundson.

Rhonda Amundson

today operator, welcome section morning, at remarks under first General tcpipelineslp.com, Presentations. begin you will conference impacting presentation of I’m much, first available also I quarter Manager, it’s very the Nathan Morris. call. slide in you, President, Please our like to joined Officer, and Janine and you Watson; the heading quarter. recent during accompany found and the their VP Principal investor it Events everyone. good Nathan would where the our XXXX Brown; with a and can call events Thank our be website a our Financial partnership and Chuck on will our today by TC that PipeLines’ note discussion

Following key review will quarter. close will our return for remarks results wrap takeaways. a with Nathan financial and the up our first and some which Chuck of

remarks, will to the Following conference questions. operator your coordinate I prepared ask the

will the media the We of call Grady questions. following Semmens happy address a contact and your investment if this you’re to take community, will please member be but from he questions

period or the the uncertainties our of subject our with prove or Securities may the Before use materialize that income, measure remind our period EBITDA certain made distribution measures XX-K of be the as are financial our made assumptions, discussed on our cash as actual and statements cash results distributable statements. flow and of results, based filings related generated capability. distributable supplement you assumptions respect XXXX These If the reflect this as as like evaluate we Exchange risks would beliefs presentation. statements provide presented well future or reconciliation most will non-GAAP over with cash Commission. we to information With Please operating events These these and and to also to to our during differ assumptions now net us. cash as flow forward-looking well by in a events conference All to GAAP approximate we turn are if those forward-looking that flow call to in incorrect, in and described one and our an from to various during during and closely future uncertainties a forward-looking to underlying the the are statements I during financial I’ll more that, to regarding currently directly and risks, measures future provided our begin, provide performance. a to Nathan. current cash materially note SEC financial views as filings. the on measures is measure is call available GAAP reconciles detail and our subsequent EBITDA

Nathan Brown

more MLP Thanks, for Rhonda. March been begin I in will moment. in FERC us by We’ll us the saying of quarter Good the those about the has just morning, everyone, and XX. this detail ball today. of thanks a space in for talk actions that since joining a

seen are assets decreased of all FERC-regulated as natural trading volumes. pipelines. a significantly, large unique we’ve MLP were unit prices Our We and our spikes gas relatively in

our turn would like our I’ll call. to But results quarter. let to more in the Despite impact well external a foremost expected the in of to although during is Chuck all uncertainty, proposed ultimate timing such, the moment. this in later everyone’s is assets, assets at commission’s and not are of very still performed As actions I what financial mind little detail impact most clear. the our the precisely discuss

our actions covering the FERC to here spend the and release position to news response FERC I XX-Q. detailed X, Slide actions our in of and the the our time at Looking want background partnership’s changes. in particular

our going not responded removal rates has by expected FERC’s the alteration make assets of the partnership options by lower clear significant price a cash to commission’s the with reduction flow difficult, more and allowances at viable into unit making our absent from sponsor from a MLP planning assets the service of forward. entities that dropdowns further policy, reviewing the cost prices partnership pipelines, revised in Given earned growth TransCanada, unit to we’re by MLP right option. a the it tax actions is drastic of reduction considered

We the requirement rate to and our reductions accelerate predictable flows. to periodic FERC’s flow mitigated impacting cost pipelines was changes growth. pursuant periodic impact reset from by significantly active of Historically, occurred will at and agreements, management in that also cash the dropdown proposed cash intervals rate rates, of the believe through certain ruling our settlement

at in Looking of the resolution, swift the regulatory highest environment past. purge our The many from our outcome this rates. pipelines as customers in pipeline been has value involve will successful our changing with working

the actions anticipated raising distribution to of dependent flows $X.XX uncertain, financial to distribution of XX% by of our and partnership control. unit. with reduction The beginning cash anticipation $X our the flow, to model is In the manage precise cash to in commercial to repayment our that the the well equity. retained metrics XXXX to cash is as levels a decrease regulatory used be our of prudent in will taking in within recent of of prudently quarter, to per fund is magnitude as the a representing change additional measures reduction move partnership most its unitholders on common timing the proactive expected response impact with While per necessitate to optimization reducing these first and cash our quarter distribution, the responses the not debt that

legal acknowledge wants see. forward. effects and the forward, reduction to actions. actions these what be structure investor going changes preserve the FERC’s may is We financial address most distribution business We appropriate We’re pipelines believe that also what proactively FERC value our going adjust mitigate to not us we the assessing to strategies for at recent the of of partially our outcome the both as any

value However, we partnership believe the this to term. position assets over maximize long its will that action the and

will allow for asset Our of into in I’ll Financial Principal to flexibility to our assets an productive necessary operator’s over strategies new financial to discuss pursue the quarter more and equity and maintain Morris, without future, highly markets turn results the actions next our detail. according valuable now suite sales. Chuck today accessing the to call Officer first

Chuck Morris

Thank you, Nathan, everyone. and morning, good

XX% leading now to compared $X.XX per will Moving the the Slide the unit first results, $X.XX to results. to in factors This net and I to income Several XXXX was revenues first impacted approximately portfolio partnership’s quarter to $XX quarter-over-quarter. higher million asset of per in the in X, together led equates XXXX. quarter the our on beginning the X, Net Baja, over up unit XXXX. QX quarter inclusion XXXX. North with first experienced or GTN of to greater Iroquois on on We higher effect June million, equity $XX the review our a due XXXX increase earnings demand

drop-down transaction from related by B our for of increase cash common XXXX. December our over million from an latter the was XXXX to to ended also July beginning the related the $X equity in the financing primarily of natural XXXX, $XX quarterly seasonal $XX in in to which increase XXXX. program. the in to year period We paid revenue common of on per million first XX% unitholders Portland distribution due and $X.XX unitholder, Class weather. in the and costs of ATM XX, flow increase the in units our paid of favorable million partially incremental GTN gas was a winter The with our distributions unit, partnership quarter, QX saw the sales and or to issuances Iroquois to recent offset an of unit under higher number outstanding during The at-the-market Great earnings together due cold change Lakes,

was a $XXX where major due million was in increase were overhauls the XXXX just common to not yet at first maintenance that in today, fourth of of from same than XX% distribution During in the cash Nathan equipment as Class unit. expenditures million in XXXX, million quarter GTN in not QX the together been distributable XX% XXXX compression portion our annual partnership’s The million, none of declared been decrease the threshold with that represents has per XXXX, XXXX. exceeded. the required our same $XXX $X.XX This of GTN, higher B first allocated the were of flows Class our XX% on the generated $XX first quarter, quarter impacting units net And in as of income, mentioned, a has associated of units declared to XXXX. capital which factors, The period higher quarter we with $XX EBITDA B the Earlier of in year-over-year. decrease million XXXX. $XX

in X. million quarter same Slide Iroquois were the to in of year. the our of our pipelines quarter first results increased million those quarter Great the in were to from XXXX, Revenues to the addition higher those $XX Turning the same consolidated XXXX quarter $XXX of million of quarter primarily comparable due Equity last earnings same period higher Lakes. were Operating, XXXX. comparable in first the Financial of XXXX the and and expenses to and to administrative first in all same depreciation the at assets of in were of $X quarter versus maintenance during XXXX. the portfolio charges

to related Iroquois to additional earlier, was the to of this portion Portland fund mentioned interest expense borrowings gas in and an As I natural the acquisition. due increase

and solid, have Our mentioned and the our to XXXX. my over this will outstanding credit the quarters, million cash our lower facility of consistent under has quarter from portion to balance our May which earlier, result that repay concludes turn back more liquidity That we as now undrawn position Nathan. cash financial a leverage available of $XXX the a results. we of flows. goal Nathan anticipated as levels will partnership of the balances, first reducing to X, senior capacity reduction end in in We succeeding as anticipate of the remains borrowing I’ll future call with access with distribution the utilize remarks quarter debt

Nathan Brown

refer Thanks, to Chuck. I’ll now X. Slide

this at outset, ball but the period necessary partnership has been are our we’re the resetting our , for the actions future. a feel mentioned and I for us we of As that

longer the have from natural optimization our assets. path withstanding MLP remains assets critical growth organic and least developments, we continue pipeline may current not current of unsuspected and our as These such not Portland portfolio flow time, no be But to Project. cash include derived our drop-down under at these our actions our over gas Our portfolio on recent or focus set of FERC circumstances. of altered the infrastructure Xpress

serve to assets will our infrastructure North markets, We footprint. call I’ll be in to and to that’s continue the business in we will been of believe back pipeline stakeholders. continue advance our solid turn near American portfolio graphical will We to Rhonda. now opportunities that our continue critical

Rhonda Amundson

I’d to Nathan. Thanks, for like questions. go now call up Operator, open ahead. please the

Operator

is RBC The from from go Instructions] Please question Capital Markets. ahead. [Operator Schultz first TJ

now is Your line open.

TJ Schultz

great. Okay,

– first, revenue the Just now, draws as would $XXX you expect million proposed the to negative occur? impact to when stand

Nathan Brown

basis. sort for is number question. The of million an the Thanks $XXX annualized

So we over expect that’ll be phased in time.

we’re As taking we approach a to things. proactive mentioned,

could for impact then the that October. that is procedural late schedule in as come We going But begin So early time. in to as XXXX. would out over expect set

We’re speculating timing, precise though, not yet. really on

TJ Schultz

And you about that take you legal that do strategic would to your be undergo structure? review? talk you long Okay. to to extent the mitigated how revenue reorganize what then review, expect impact And if

Nathan Brown

all they’re future. leasing We’re stepping challenges in strategies. into just the those now, Right

seeking and to we’re more quickly circumstances give on particular our sustainable Given the this flexibility. us a acting path,

TJ Schultz

that you’ve Do some flows. cash in But alternatives mitigated the the you partially have that be stated of through Okay. number that the would mitigate it’s like think and particular would option? I a decreased that presentation,

Nathan Brown

million to We’re precision mitigate out precise that corporate million million get to worked particulars mark. from $XX lot working of but to conversion, have that through a $XX to amount. to be $XXX by Perhaps in

TJ Schultz

to fact, further distribution? to Okay. for in you on $XXX and that you’d of leverage you flexibility And can realize you just the revenue, the in the million level your way? color maintain distribution for is got you to give address if did, what growth anticipate If options right the come the may lost $X.XX provide then some some needing all the

Nathan Brown

Yes.

right. I framed just think it you

the through to of back Each side of a the they out when is for strategies. metrics. and actions financial full-cycle decided and we specific that on impact prudent of goal network the will have the acting beneficial pipe-by-pipe challenges, entity the of – coming quickly for look We’re account but we get us our other on decreases, to basis, FERC this

and keep FERC to and the growth actions – have here come of these this to these models So organic flexibility out the goal operating the side now. is with ability other

TJ Schultz

you. thank Okay,

Operator

from ahead. Please Tonet from you. JPMorgan. is go Jeremy Thank question The next

Your line open. is

Jeremy Tonet

Good morning.

course things impact, some where the we’ve seen reverse of did of an of of there. to that on you as the in these want and time – kind cut given modify what any the far or – left wouldn’t kind part is that some pick the the M&A you timing unlikely In with it’s you – off expect now, given regards for asset market that could of less sales doing Just strategy, with happen consider uncertainties in mean And indicate sense guys C corp to where ownership. for you up deleveraging that also, see now. don’t there that to it impacts very FERC and regards Does I recently. guess, you MLP there’s

Nathan Brown

at I’d say looking not this sales at we’re times. asset

kind working other excuse that your metrics. was us clear million conversion back that you’re through lower. me, financial on, to other get we’re corp our of working there. million of get the impact if things, – with $XXX again prudent among about sorry, on question bit the questions of amount calibration $XX C to So a million $XX mitigation to The management The is again side

So question part – Was about yes, of sorry, sorry, your was your the of other the other part timing? question? specific it

Jeremy Tonet

Yes.

Nathan Brown

as in So me, think as going FERC coming looking be excuse and this through employed, way summer the can late – that implied see this we action to out we having is but we’ll October of the seeing changes, be rate the to FERC. impact cases coming see readjusting very specific be quick succession. that be We We’ll really will of in don’t out year. rates the early our

revenue notice come might FERC’s month. due regulated making, – and with noted a within of study limited to FERC’s cost their back reports As certain assets you rule in tranche are

action. on heels the quick those of very So will be the following finalized

Jeremy Tonet

could And here just guess, I that – you course FERC that? see low – likelihood, you with things certain way the any rehearing in – don’t see and very its change like

Nathan Brown

vote that we’re reinstated be change as tax don’t at can The will open that correct. the was We a X-minute through effects for we commission’s a see the that’s our on But this policy minimize MLP it Yes, the allowance statement optimistic the strategies. vote. likelihood point.

Jeremy Tonet

feel it you any down just mean, with there they the to you. agencies? these get the road comfortable Got is board? if previewed And be? where are of there then, risk, cut this How or have on you actions that I are you everything another trying to need want to kind that you

Chuck Morris

this Chuck our the certainly, Yes, to with and, rating with from impact to calibration reduction the your a in the revenues take and had on at point the leverage the agencies. certainly in looking term ratios continue care to near will, is, have over you having relative with the of it’s of here. the I And industries respect And We’ve there of them actions importance, certainly, the conversations question to the guess, if dialogue these further here. we is then, reduction, an standpoint that our lot to last essentially of of potential managing that’s outcomes. open FERC part time

a So if not cuts. will, terms second leg you of expecting in down, the

Jeremy Tonet

Great. One I could. last if one

decision Bison, And if today? on into for your kind situation potential. of there the there the wondering repurposing there’s play did update Just any

Nathan Brown

We where prudently a to get So to development cut don’t I’d actions feel back like report to our FERC at that us leveraging efforts leverage it business that. the reset able on our have Bison metrics say the we’re opportunities on step we we’re repurposing currently addresses that and to to that. be examining for looking as here continue. anything

continue. those So efforts

Jeremy Tonet

Great. my question. Thanks taking for

Operator

question Christine is Cho Barclays. ahead. from go next Please from The

Unidentified Analyst

from gross This Mark reflect a to I last compare altogether, XX% for if on any would Do DCF a whether reconcile you to get going to that rule made assume guidance Do the believe going that rough you is and down? get there impact. of a So that higher fund contract? result see of to a the up a is just accrete elimination tax And cost estimate you there today, of the So you’ve come assumptions million DCF thumb room your service half its DCF Christine. to impact, impact to are and/or and for XX% is if On that XX% impact on of then imply X%. in to X% $XXX your up $XXX general I had to seems discussed as XX% business that cost to rate to service. would revenue million tax you call, to you a that impact? your trying

Nathan Brown

sure. to yes, being of that of out you study talked the big rule cases account the well. issue impact we all anticipate on and But the cost isolates is hit impact that coming the – a of as the allowances do That’s be that allowance. of a recent and the will correct, revenue The into this on adjust removing mandated have activity thumb competent So about and bring here. the there’ll return tax rate NOPER further reset [ph] by that’s we pipe we

Unidentified Analyst

if Got you the And taxes of making then looked have base, it. at let deferred deferred you you assumptions base? income eliminate taxes terms are your rate there? accumulative income in your FERC in accumulated the the what were impact And rate would from to be what

Nathan Brown

of we clarity the a out modeling certainly on That’s to NOI more but that. expect permutation that come we’re

moving that’s outcome likely a but modeling we’re So – a piece. it’s one

Unidentified Analyst

are just making what that number? million assumption And clarify, it. in to $XXX Got you

Nathan Brown

the of ADIT. regulatory $XXX the is that – treatment number, of million In reflective that’s a liability

Unidentified Analyst

it. Got

potentially a Okay. corp. lastly, then And to changing C as mentioned,

help perhaps vehicles TRP being that’s having corp understand C separate strategic rationale just tickers? how in TCP of a I differently that for terms to trying or of just would necessarily So was two funding

Nathan Brown

say cash Yes, and that’s conversion that – perspective, perspective. But taxes on for C out economics that’s having strategy of we in terms the of from from side conversion to probably other their the how good a pay the such work from a of in be out TransCanada. I’d deferred of to strategy, terms would coming overall perspective. broader TCP’s predicated question TRP much what crop

Unidentified Analyst

my Thanks, Okay. it that’s end. for

Operator

is Thank Please Citi. go next from question Nick ahead. The Raza you. from

open. is line Your

Nick Raza

Thank you.

Just a questions. really couple follow-up of

which more could do GTN, comment boarder, In impacted pipeline terms for that? are on than of the sense you Lake, a your investments others? you on Great they million, $XXX have on The so

Nathan Brown

we’ve That’s Yes. accumulative amount that modeled.

So we’ve got among and our assets. of between lot a of assumptions moving suite the

So not by yet. pipeline, down pining the strategy that just But in near not we’re here be we’ll advancing term.

Nick Raza

to back ADIT And just on get Okay. then, question. the

treating just that if versus the assuming are basically seeing ADIT liability Secondly, as it you’re one just goes upfront, you’re a regulatory in instance away just time? over we that

Nathan Brown

clarify yes, we’re through a we precisely more So NOI. – not that would the the that to it assuming that’s goes away without But point that be hope impact. currently,

Nick Raza

I And or rate presume? any the Okay. then, – would impact million clarify, also assumptions your guess, return reductions any takes I assumptions, return $XXX just in to into

Nathan Brown

correct. that’s Yes,

Nick Raza

– And impacted sorry, I pipelines other be for mean would after which But sense I’m sense have XXXX? the don’t Okay. the do for a most the you to push issue. actually

Nathan Brown

the others. It’s GTN any than more of

got sort large that within one of, watching, that one our is, relative and given that it’s assets earnings. Just the side and rates we’ve impact us. on to the all change, But when we’re headline our say and its the that we’d impact have going relative portfolio of

Nick Raza

And then, me. guess, I perfect. one last Okay, for

was just press you conversations Or more little catalyst bit of that this event. the about you a this what’s in an being your bit for with us not effectively little color? terms comment about or give a since prior having impactful – But In could have shippers? changed release

Nathan Brown

action any actions the with say, the XXXX. certainly that to had until me. be metrics that shippers following be and probably process able well works. in action getting And manner, rate manage mandated take strategies timely up we pipelines to able see But market FERC action We we leverage yes, coming. excuse our a manage So approach taking that that ultimately how our to of we the of these a our the working what now going isn’t and see see flanges timing a to feel for out we want to cases the to through – conversations coming hit FERC proactive I’d in

Nick Raza

one. Fair enough. I And last then, apologize, the

potentially integrity In increasing terms mitigating anything factors of or you or of plan increasing is just any service, in else there can could towards help? us spending of cost terms that expanding that

Nathan Brown

Yes. Portland as expanded reflection and of we’re be maintenance that strategy, of because working in. be going mitigating that optimize we’re we growth if on volumes general, go cases. through capital but able organic comes on some to like organic through to That’s is of other factor But we the rate and pipes potentially Xpress, that have other through that kind these mitigate. The that expanded growth of strategy we’ll working could in timing-dependent

Nick Raza

That’s all, I had. Thank you.

Operator

The next question Tom go Morgan Abrams is Stanley. from Please ahead. from

open. is line Your

Tom Abrams

that pretty beat cut quarter What in being this also to several impact distribution an it’s that Sorry mind shippers, impact, little else Couple you conversations that to lead ago, come of today? years to before months mentioned who bit changed. with has something questions is might good you’ve earnings financial structure them here. you a have material overshadowed the on indicated a started by up and other

Nathan Brown

way I mandated Yes, was procedures. the impact coming the the priced past in think we near-term out of FERC so, it

maximizes work what we their to be a quickly that, as our long-term for what’s Here, in pipe-by-pipe on do is analyze been us we assets value. needed our a and that past. successful as we we towards strategy to in advantage the And it’s basis, moving believe

up flange on financial the to we of So part commercial need manage to side our side a had coming as other resets do of able be metrics that and we strategy, out from rate we a what to regulatory done

Tom Abrams

envelope, about because cut that And doing That’s I $XXX just I appreciate suggested, – and as a the distribution is as would what the want preemptive. in year. What you investors. enough? million being equals guess, enough some the is we you back about Well, you’re questions

X, you lot not have rebuild or impact to January this preemptive indeed a both indicated I were nor would if had considerations So reduction, goals of able million of of this $XXX which think debt move. a to basically be of XXXX coverage year, had you’ve a

cut So guess, I pose again, I question enough? distribution would this the is

Chuck Morris

standpoint here. XX% calibration it’s conversion, is then, think at including of time, of And Chuck I essence strategies ultimately, the to reduction the account looking Tom, in Yes, employ the look this terms the a we other again, that into of And the guess, mitigation from opportunity I – will to taking corporate leverage, at a scenario. both million about of have, distributions That will reduction, if the relative to mentioned, well will, a as we gets leverage within annual lead that as of we basis. borrowing an the is rating agencies. as again, metrics the to you $XXX conserve, of our us, on which facilities that you reduction will

Tom Abrams

a, you completely view decision of, LP structural in the if more holistic. includes distribution review the you have made And big a GPs And structure, put the developed the the kind the impact will, you then, inputs. on holders structure don’t disadvantage, had that and on but Could not, on before unit imagined of must would yet course, the lastly, a not I think, have a move price. obviously it preemptive, yes, a had conversion? somewhat the of which, you Preemptive, at

Nathan Brown

I the Yes, understand question.

part worse get the certainly once includes lot you mitigation, a by mandated of lot million a I of important FERC. as sort published outcome, if our the be cost that on a the think it’s revenue emphasize that of studies $XXX action to

$XXX You’ll see much numbers accumulative that higher an million on basis. than are annual

general structure that So to certainly, forward have. the want TransCanada concerns we’re to clearing is this and of think we in our impact aware But best can, a what commercially. partner path we we’re up strategies whatever working through optimizing may other go the we mitigation as as flange action

Tom Abrams

Well. Thank very you much.

Operator

is Michael Please go Wells next The Fargo. question ahead. from from Blum

is line open. Your

Michael Blum

Thanks. Good morning.

considering, obviously to terms you’re Just to C to to conversion other clarify, thinking that possible mean one about would back up one’s options there so roll it I sponsor. of I’m the we’re Corp, just thinking correctly. be the sure of? Are make not options in any

Nathan Brown

defer last to say them on to provided current contemplation Russel’s that’s a their to back of you in there’s be. on of roll-up particulars. week terms – And think I Yes, to call, TransCanada, what go we’ve I’d if remarks by not going back any in

that of over we’re as and to corporate really So looking that think, we that mentioned economics how earlier, and income pay cash I that – and I of through, looking on tax income ultimate given taxes we’re the be going a through, control that by the rates a taxable to the works is focused retention conversion predicated as allowance at strategies offset we’ve result the incorporation. on got an the to had on of

Michael Blum

conversion there a of that short a Corp. guess, I C to Okay. Are any paths other you’re considering?

Nathan Brown

and don’t equity sell any market to want the wish under we don’t So we assets. to conditions, these we at this time, access –

of our moment, shelf So and within the with managing ourselves C Corp kind to means. we’re conversion on the those then strategies this at limiting a time for considering put

Michael Blum

a timing do between you cash puts Corp. ultimately converting whether analysis the think like you’ll cetera. a haven’t converting decision, for structurally? sponsor, might the to becoming on What’s when other tax or Corp., decide or you to takes Okay. And then, it you done sounds and completed et the it’d be analysis things C C the payers, yet any ultimate the up make roll to

Nathan Brown

this Right underway now, now. is

that. I – wouldn’t got – had So make on we’ve that guidance good on any at wouldn’t But we looking got timing we and the this sure models a we we’re got moment. say some details at

Michael Blum

much. very you Thank Okay.

Operator

Pickering, Please Matthew from from Taylor ahead. The Tudor, Holt. go question next is

Matthew Taylor

can metrics, you prudently debt-adjusted financial manage Thanks guys. of flow you’re sense say EBITDA? targeting a for taking for my to debt question and When give you us cash what

Chuck Morris

here. Chuck it’s Yes,

with to guess, respect So I we is, we’re our have covenant really what debt levels targeting the facilities. that

flow debt-to-adjusted then, cash both ratio metric. And mindful and five X.X is times ratings that’s the target that debt-to-EBITDA to So S&P we’re a relative by other times of a Moody’s. investment grade our

Matthew Taylor

Okay.

down getting a preemptive of you back the closer It’s of the cut. again, kind just Can like through of walk once to because X – going just then So through seems model, the us to there’s X.X cut it’s the there. times, to and nature cetera, just, it bit times. running et just gap

You’re giving be looking we this? here, some should how just yourself at room wiggle

Chuck Morris

heard the think, forward with we I our might reduction and relative outcomes Nathan, the FERC respect to might – as there’s ultimately, flows. to the from through you’ve actions, earnings what certainly, step volatility cash be some Yes, here be and as

you of will, little a bit relative the a But there’s so excess not lot headroom, of if headroom of And covenant. times there. to five

Matthew Taylor

you how discussions covenants with – those terms mind the decision? had in be of are the as we some should guys of can the working keeping kind intact? just any Or FERC – remain you’re in as uncertainty [indiscernible] this of looking Have agencies of through

Chuck Morris

Yes.

is So considering. metrics the had five here those And rating again, with that covenant levels. business credit to as and we’ve perspective, agency with of X.X from of particularly to the possible targeting times actions conversations debt the rating within our respect really it times again, the agencies, of Certainly, XX% mitigations FERC facilities to the the cash that relative remain be the our we debt-covenant reduction within embedded range And certainly, relates would to the flows. EBITDA. doing to debt-to-adjusted we’re that’s a

Matthew Taylor

Can that’s plan are you us And on being that? what over of a funding we second, helpful. you looks how pursued. like would just pipes go Okay, for at? a organic looking it’s give here And sense still growth you maybe if the

Nathan Brown

Sure.

to Project, going finalized pressing development right it’s the process commercial here through active agreements within get Portland Xpress the well month. now is got active underway. we and We’ve that hope mostly So assigned more our

of be we we coming of funded And demand here. the tremendous preferred as even line pipeline to which at the now Western our our for basin, home-to-market. to capacity to for expect then, out Northern pipeline use pipes able to, least, GTN, go at Great and Canadian Lakes being gas extent some amount a Border sedimentary forward level, – what path across the that’s So

needs. We’re looking customer meet there maximize opportunities at and all kinds their to flow of

Matthew Taylor

And may. I one more if

lot Is $XXX in kind walk higher why sense Like filings comment, out, would the Just was going the Or so you the would negotiated back components through come in try going you that back once higher that parts to much are of done to a filings. to which why million moving some of earlier to number? the those on start rates? earlier us million? call, just that give than can math $XXX be a that the the be

Nathan Brown

blunt Yes, if that’s map. a you on It’s the a of instrument, one bit good component. will,

apply covenant. them that there’s believe But don’t that assumptions hard per treatment return don’t – one ended all on we equity, form will that the assumptions XX.XX% appropriate, rates kinds reasonable if So with, a of they and through. wouldn’t the is just our in of – agree you it of we if it

through with that one active we that And very to with takes of our the for mode a moving a think client the and just rate don’t negotiations basis. parts well up recourse simplistic So of discussion given that’s it calculating pipe. achieve very and what’s on the reality with, customers we we any had regular deal what’s is one –

Matthew Taylor

Okay, that’s question. Thanks taking guys my great. for

Operator

research. go Thank Kania question is Please Wolfe you. from ahead. from next The Alex

Alex Kania

much. Thanks very

be shippers. shippers tax comment follow allowance going kind of, getting kind can a outcome you of situation with mitigating a effect? the mean, direction out discussions another. the this of are that on people where contemplated just and that it got just to, cost Is base guess, if ask if that you’ve – process? the better, there’s playing of a or a a from wondering kind you’ve through of are work one already as what kind with they’re I something signals Or is Just really I’m unlike some I respect just this a bid chances reaching how had of, sounded like negotiated out,

Nathan Brown

the for Thanks question.

think you’ve rate for resets, bucket. I everyone there’s these path got the those the looks that in well. it most earnest and Once pretty start pretty the well-worn potential and economics a in to considers things everything of at talking discussions

there on customers be – and So that in aware of is going on. there considered ask bid going will certainly, are our the situations some dynamic

we like discussions. these And we best do the approach gone of the rate of and that. our that are have lines we negotiations we So all with strategy rate believe

Alex Kania

Thanks.

Operator

at to the questions Thank meeting this now no like registered time. would are you. turn Ms. There I to Amundson. back further

Rhonda Amundson

forward today. your soon. We you in Thank participation speaking you interest everyone, look with really very your again for much, to PipeLines, Great. and appreciate TC

Operator

you. now thank your we time, your conference Thank at is participation. disconnect and Please The for lines ended. this you

TC Pipelines (TCP) 2 May 182018 Q1 Earnings call transcript