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Costs incurred on capital projects under development primarily relate to the Energy East and LNG pipeline projects.
Contributions to equity investments have increased in 2017 compared to 2016 primarily due to our investments in Sur de Texas and Bruce Power.
The increase in other distributions from equity investments is primarily due to distributions from Bruce Power. In first quarter 2017, Bruce Power issued bonds to fund its capital program and make distributions to its partners which resulted in $362 million being received by us.
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CASH PROVIDED BY FINANCING ACTIVITIES
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three months ended March 31 ------------------------------ (unaudited - millions of $) 2017 2016 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Notes payable issued, net 670 1,176 Long-term debt issued, net of issue costs - 1,992 Long-term debt repaid (1,051) (1,357) Junior subordinated notes issued, net of issue costs 1,982 - Dividends and distributions paid (419) (450) Common shares issued, net of issue costs 18 3 Common shares repurchased - (14) Partnership units of TC PipeLines, LP issued, net of issue costs 92 24 Common units of Columbia Pipeline Partners LP acquired (1,205) - ---------------------------------------------------------------------------- Net cash provided by financing activities 87 1,374 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------/T/
On February 17, 2017, we acquired all outstanding common units of CPPL for US$921 million.
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LONG-TERM DEBT RETIRED/REPAID
---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (unaudited - millions of $) Retirement/Repayment Interest Company date Type Amount rate ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- TRANSCANADA PIPELINES LIMITED February 2017 Acquisition Bridge Facility(1) US $500 Floating January 2017 Medium Term Notes $300 5.10 % TRANSCANADA PIPELINE USA LTD April 2017 Acquisition Bridge Facility(1,2) US $1,070 Floating ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (1) This facility was put into place to finance a portion of the Columbia acquisition and bears interest at LIBOR plus an applicable margin. (2) Proceeds from the April 19, 2017 sale of TC Hydro were used to partially repay the acquisition bridge facility./T/
JUNIOR SUBORDINATED NOTES ISSUED
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---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (unaudited - millions of $) Maturity Interest Company Issue date Type date Amount rate ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- TRANSCANADA PIPELINES LIMITED March 2017 Junior Subordinated Notes(1,2) March 2077 US $1,500 5.55 % ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- (1) The Junior subordinated notes are subordinated in right of payment to existing and future senior indebtedness or other obligations of TCPL. (2) The Junior subordinated notes were issued to TransCanada Trust (the Trust), a financing trust subsidiary wholly-owned by TCPL. While the obligations of the Trust are fully and unconditionally guaranteed by TCPL on a subordinated basis, the Trust is not consolidated in TransCanada's financial statements because TCPL does not have a variable interest in the Trust and the only substantive assets of the Trust are junior subordinated notes of TCPL./T/
In March 2017, the Trust issued US$1.5 billion of Trust Notes - Series 2017-A (Trust Notes) to third party investors with a fixed interest rate of 5.30 per cent for the first ten years converting to a floating rate thereafter. All of the proceeds of the issuance by the Trust were loaned to TCPL for US$1.5 billion of junior subordinated notes of TCPL at an initial fixed rate of 5.55 per cent, including a 0.25 per cent administration charge. The rate will reset commencing March 2027 until March 2047 to the three month LIBOR plus 3.458 per cent per annum; from March 2047 until March 2077, the interest rate will reset to the three month LIBOR plus 4.208 per cent per annum. The Junior subordinated notes are callable at TCPL's option at any time on or after March 15, 2027 at 100 per cent of the principal amount plus accrued and unpaid interest to the date of redemption.
Pursuant to the terms of the Trust Notes and related agreements, in certain circumstances (1) TCPL may issue deferral preferred shares to holders of the Trust Notes in lieu of interest; and (2) TransCanada and TCPL would be prohibited from declaring or paying dividends on or redeeming their outstanding preferred shares (or, if none are outstanding, their respective common shares) until all deferral preferred shares are redeemed by TCPL. The Trust Notes may also be automatically exchanged for preferred shares of TCPL upon certain kinds of bankruptcy and insolvency events. All of these preferred shares would rank equally with any other outstanding first preferred shares of TCPL.
DIVIDEND REINVESTMENT PLAN
Under our DRP, eligible holders of common and preferred shares of TransCanada can reinvest their dividends and make optional cash payments to obtain additional TransCanada common shares. Common shares are issued from treasury at a discount of two per cent. In the most recent quarter, approximately 40 per cent of common share dividends declared were designated to be reinvested by shareholders in TransCanada common shares under the DRP.
TC PIPELINES, LP AT-THE-MARKET (ATM) EQUITY ISSUANCE PROGRAM
During first quarter 2017, 1.2 million common units were issued under the TC PipeLines, LP ATM program generating net proceeds of approximately US$69 million. At March 31, 2017, our ownership interest in TC PipeLines, LP was 26.4 per cent as a result of issuances under the ATM program and resulting dilution.
In connection with the late filing of an employee-related Form 8-K with the SEC, in March 2016, TC PipeLines, LP became ineligible to use the then effective shelf registration statement upon the filing of its 2015 Annual Report. As a result, it was determined that the purchasers of the 1.6 million common units that were issued from March 8, 2016 to May 19, 2016 under the ATM program may have a rescission right for an amount equal to the purchase price paid for the units, plus statutory interest and less any distributions paid, upon the return of such units to TC PipeLines, LP. In March 2017, rescission rights on 0.4 million common units expired. No unitholder has claimed or attempted to exercise any rescission rights to date and these rights expire one year from the date of purchase of the unit.
DIVIDENDS
On May 4, 2017, we declared quarterly dividends as follows:
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Quarterly dividend on our common shares
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$0.625 per share
Payable on July 31, 2017 to shareholders of record at the close of business
on June 30, 2017
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SHARE INFORMATION
---------------------------------------------------------------------------- ---------------------------------------------------------------------------- as at May 1, 2017 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Common shares Issued and outstanding 871 million ---------------------------------------------------------------------------- Preferred shares Issued and outstanding Convertible to Series 1 9.5 million Series 2 preferred shares Series 2 12.5 million Series 1 preferred shares Series 3 8.5 million Series 4 preferred shares Series 4 5.5 million Series 3 preferred shares Series 5 12.7 million Series 6 preferred shares Series 6 1.3 million Series 5 preferred shares Series 7 24 million Series 8 preferred shares Series 9 18 million Series 10 preferred shares Series 11 10 million Series 12 preferred shares Series 13 20 million Series 14 preferred shares Series 15 40 million Series 16 preferred sharesOptions to buy common Outstanding Exercisable shares 12 million 8 million ---------------------------------------------------------------------------- ----------------------------------------------------------------------------
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CREDIT FACILITIES
We have several committed credit facilities that support our commercial paper programs and provide short-term liquidity for general corporate purposes as well as acquisition bridge facilities to support the interim financing of the Columbia acquisition. In addition, we have demand credit facilities that are also used for general corporate purposes, including issuing letters of credit and providing additional liquidity.
At May 4, 2017, we had a total of $11.1 billion of committed revolving and demand credit facilities and $2.8 million of acquisition bridge facilities including:
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Unused Amount capacity Borrower Description Matures ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- $3.0 billion $3.0 TCPL Committed, syndicated, December billion revolving, extendible credit 2021 facility that supports TCPL's Canadian commercial paper program and for general corporate purposes US$1.5 - TCPL Committed, syndicated, senior June 2018 billion asset bridge term loan commitment that supports the acquisition of Columbia US$2.0 US$2.0 TCPL Committed, syndicated, December billion billion revolving, extendible credit 2017 facility that supports TCPL's U.S. commercial paper program US$0.6 - TCPL USA Committed, syndicated, senior June 2018 billion asset bridge term loan commitment that supports the acquisition of Columbia US$1.0 US$1.0 TCPL USA Committed, syndicated, December billion billion revolving, extendible credit 2017 facility that is used for TCPL USA general corporate purposes, guaranteed by TCPL US$1.0 US$0.5 Columbia Committed, syndicated, December billion billion revolving, extendible credit 2017 facility that is used for Columbia's general corporate purposes, guaranteed by TCPL US$0.5 US$0.5 TAIL Committed, syndicated, December billion billion revolving, extendible credit 2017 facility that supports TAIL's commercial paper program, guaranteed by TCPL $2.1 billion $0.8 TCPL/TCPL Supports the issuance of Demand billion USA letters of credit and provides additional liquidity ---------------------------------------------------------------------------- ----------------------------------------------------------------------------/T/
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COMMENTARY: Alberta’s World-Class Regulator and Regulatory System – Brian Jean, Minister of Energy and Minerals for Alberta