Having disposed of most of its far-flung assets and righted itsfinancial ship in 2000, TransCanada PipeLines will be focused ongrowing its core gas transmission and power generation businessthrough its home territory in Canada and the northern tier of theU.S. in 2001.
TransCanada’s pipeline unit is exploring growth opportunities”at each end of the pipe,” President Doug Baldwin told an analysts’teleconference. That includes being involved in discussions forlong-term solutions to bringing gas from the far north, as well asmore immediate opportunities for expansions in established Canadiansupply and market areas. And on the power generation side “there isa growing slate of opportunities we are examining currently.”
The company reported net income applicable to common shares fromcontinuing operations before unusual items for 2000 was $605million compared to $505 million in 1999. Earnings per share, onthe same basis, were $1.28 for 2000, compared to $1.08 in 1999.Overall net income applicable to common shares was $711 million or$1.50 per share, compared to a loss of $80 million in 1999.
The Canadian pipeline company disposed of $3.45 billion inassets during the past year, booking $2.3 billion of sale proceedsby Dec. 31 and applying much of the proceeds to retiring long-termdebt and repurchasing preferred shares. TransCanada repaid orretired approximately $2.5 billion of term debt and preferred shareobligations during 2000.
TransCanada’s increased ownership interest in its two largestpower investments, Ocean State Power and TransCanada Power L.P.,plus gains in power marketing and trading, led to net earnings forthe power sector of $105 million, more than double the $40 millionrecorded in 1999. Additional gains from activities last year willbe reported this year, company officials said. Effective Dec. 31TransCanada has moved to mark-to-market accounting for its tradingunits.
The natural gas marketing sector did not fare as well last year,recording a $129 million loss, based mainly on after-tax net lossesof $124 million paid to get out from under long term fixed-pricecontracts for gas. The company also recorded a $13 million loss dueto the bankruptcy of a third party U.S. storage operator. The longterm contracts had been signed “to support various corporateinitiatives, including pipeline investments and downstream pipelineexpansions. The profitability of these contracts was predicated onsustained historical price differentials between natural gas supplyand market points. Over the past two years, the price differentialshave narrowed,” TransCanada said.
While net earnings from its two main pipelines, the AlbertaSystem and the Canadian mainline, remained about even, the overalltransmission total, including North American ventures – some ofthem discontinued – dropped from $671 million in 1999 to $612million in 2000. The company noted that it had recently reached atolling settlement for the Alberta system and was continuingnegotiations for new mainline rates.
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