Trans Mountain Corporation (“TMC”) released the company’s financial statements and associated management report for the three and nine-month periods ending September 30, 2023. The company’s financial results are also included in Canada Development Investment Corporation’s consolidated quarterly financial statements.

TMC’s results demonstrated strong financial and operational performance as the mainline operated at full capacity during the first nine months of 2023, including a record average throughput of approximately 369,000 barrels per day during the third quarter. Trans Mountain delivered approximately 34,000 barrels per day to Westridge Marine Terminal in Burnaby, B.C. and 246,000 barrels per day to Washington state on the Puget Pipeline in the three-month period ending September 30, 2023.

Adjusted earnings before interest, taxes, depreciation, and amortization (“EBITDA”) reflects the results from TMC’s base business and for the three-month period ended September 30, 2023, adjusted EBITDA decreased by $0.6 million to $45.1 million, as compared to $45.7 million in the same period of the prior year. Adjusted EBITDA for the nine-month period ended September 30, 2023, increased by $9.3 million to $143.4 million, as compared to $134.1 million in the same period of the prior year.

For the three-month period ended September 30, 2023, net income decreased by $864.6 million to a net loss of $724.9 million, as compared to net income of $139.7 million in the same period of the prior year. Net income for the nine-month period ended September 30, 2023, decreased by $744.3 million to a net loss of $368.6 million, as compared to net income of $375.7 million in the same period of the prior year.

Trans Mountain booked a net loss in the third quarter as a result of a $888.1 million goodwill impairment charge for the full carrying value of goodwill related to the August 31, 2018, acquisition of the Trans Mountain Pipeline System and Puget Pipeline. The net loss in the three and nine-month periods ended September 30, 2023, incorporates the goodwill impairment and interest expense, partially offset by equity allowance for funds used during construction (AFUDC) and capitalized debt financing costs.

Equity AFUDC for the three-month period ended September 30, 2023, increased by $120.8 million to $308.7 million, as compared to $187.9 million in the same period of the prior year. For the nine-month period ended September 30, 2023, equity AFUDC increased by $347.8 million to $835.0 million, as compared to $487.2 million in the same period of the prior year. The increase is due to the cumulative impact of capital spending on the Trans Mountain Expansion Project (the “Expansion Project”).

As of September 30, 2023, the Expansion Project was approximately 96 per cent complete with less than 16 kilometres of pipe to install. Trans Mountain anticipates mechanical completion early in 2024 with commercial service to begin near the end of the first quarter of 2024.

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

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. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization and equity AFUDC) 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 (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.

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