Trans Mountain Corporation (TMC) today posted its financial statements and associated management report for the three-month period ending September 30, 2020. The company’s financial results are also included in Canada Development Investment Corporation’s consolidated quarterly financial statements.

Net income for the three-month period ended September 30, 2020 increased by $19.2 million to $39.4 million, as compared to $20.2 million in the same period of the prior year. The increase is mainly due to the $24.7 million increase in equity AFUDC (Allowance for Funds Used During Construction), the $1.5 million increase in Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), and the $0.5 million decrease in depreciation , partially offset by the $6.0 million increase in income tax expense, due to higher pre-tax income, and a $1.9 million increase in interest expense.

Net income for the nine-month period ended September 30, 2020 decreased by $12.9 million to $94.4 million, as compared to $107.3 million in the same period of the prior year. The decrease is mainly due to the $70.2 million increase in income tax expense, due to the significant income tax recovery recognized in the prior year, and the $4.3 million decrease in Adjusted EBITDA. These decreases were partially offset by the $61.1 million increase in equity AFUDC and the $0.9 million decrease in interest expense, due to increased capitalized interest, both of which were a result of increased capital spending on the TMEP.

Average daily throughput on the mainline for the quarter averaged approximately 325,000 barrels per day, throughput to Washington State on the Puget pipeline averaged approximately 229,000 barrels per day, and Westridge Marine Terminal averaged 7,000 barrels per day during the period. The Puget pipeline achieved consecutive months of record, modern-day throughput in July and August of 2020.

“The end of August marked a full year of re-started construction on the Expansion Project and we are on-track with the budget and schedule. Thousands of people are currently working on the Project generating jobs and economic activity across two provinces at a time when our communities need it the most,” said Ian Anderson, President and CEO of Trans Mountain Corporation. “On the existing pipeline, Trans Mountain’s advantage as the only Canadian pipeline with direct access to tidewater and our diversity in markets served, have led to steady and unwavering demand and the pipeline operating at capacity, despite the uncertainties of 2020.”

Capital expenditures on the Expansion Project in the third quarter was $887.6 million and $2.1 billion for the first nine months of the year. Work continued in B.C. along the pipeline corridor in the North Thompson and B.C. Interior regions and at the Lower Mainland terminals with foreshore expansion at the Westridge Marine Terminal and preparation work for tunnel boring and installation of tanks at the Burnaby Terminal. Work is underway in various phases of construction along the majority of the pipeline route. In Alberta, several river crossings have been completed and pipeline construction is nearing completion in the Greater Edmonton area. Camp communities opened in Valemount and Clearwater as part of the temporary workforce accommodation plan, with preparatory work underway at other camp locations.

In the rapidly evolving COVID-19 environment that has marked 2020, Trans Mountain has remained vigilant and nimble, adding and adapting protocols and measures to ensure continued operations.

Prior to the release of this statement, an employee of a TMEP contractor, SA Energy, was fatally injured in an incident at a TMEP worksite on October 27. As a result of this incident all work in Spread 1, near Edmonton, was immediately stopped. The company conducted a system-wide safety stand-down that involves enhanced system-wide training on the incident and a focus on safety with all workers.

On July 2, 2020, the Supreme Court of Canada dismissed an application to appeal the Federal Court of Appeal’s February 4, 2020 dismissal of challenges to the Federal Government’s approval of the TMEP. On October 9, 2020, Trans Mountain submitted an application to the Canada Energy Regulator for the West Alternative Route variance through the Coldwater Valley in B.C.

See the full financial statements and management report documents here.

See Canada Development Investment Corporation’s Quarterly Report here.

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. Adjusted EBITDA is a non-GAAP measure we use to evaluate our operating performance absent the impact of financing decisions, non-cash depreciation and amortization, and non-cash equity AFUDC.

AFUDC is an amount recognized by rate-regulated entities to reflect a return on the equity and debt components of capital invested in construction work in progress.