Liquidity and Capital Resources
Partnership Cash Flows
Partnership cash flows decreased by $7 million to $43 million in the first quarter of 2013 compared to $50 million in the same period of 2012. This decrease was primarily due to lower cash distributions from Great Lakes and Northern Border.
The Partnership paid distributions of $43 million in the first quarter of 2013, an increase of $1 million compared to the same period in 2012.
The Partnership uses the non-GAAP financial measures "Partnership cash flows" and "Partnership cash flows before General Partner distributions" as they provide measures of cash generated during the period to evaluate our cash distribution capability. Management also uses these measures as a basis for recommendations to our General Partner's board of directors regarding the distribution to be declared each quarter. Partnership cash flow information is presented to enhance investors' understanding of the way that management analyzes the Partnership's financial performance.
Partnership cash flows include cash distributions from the Partnership's equity investments, Great Lakes, Northern Border, GTN and Bison, plus operating cash flows from the Partnership's wholly-owned subsidiaries, North Baja and Tuscarora, net of Partnership costs and distributions declared to the General Partner.
Partnership cash flows and Partnership cash flows before General Partner distributions are provided as a supplement to GAAP financial results and are not meant to be considered in isolation or as substitutes for financial results prepared in accordance with GAAP.
At March 31, 2013, there was $309 million outstanding on the Partnership's $500 million senior revolving credit facility leaving $191 million available for future borrowing. The Partnership was in compliance with the covenants of the credit agreement at March 31, 2013.
For the three months ended March 31, 2013, net income decreased by $10 million to $29 million compared to $39 million in the first quarter of 2012 and was $1 million lower relative to the fourth quarter of 2012. This decrease was primarily due to lower equity earnings from Great Lakes and Northern Border.
Equity earnings from Great Lakes were $2 million in the first quarter of 2013, a decrease of $7 million compared to the same period in 2012. The decrease was due to Great Lakes' capacity being sold mostly under short-term contracts and at lower rates and volumes in the first quarter of 2013 compared to the same period in 2012.
Equity earnings from Northern Border were $16 million in the first quarter of 2013, a decrease of $4 million compared to the same quarter in 2012. This decrease was due to the previously disclosed tariff rate reduction as a result of the Northern Border Settlement. In January 2013, FERC gave final approval for the Settlement reducing Northern Border's reservation rates by 11 percent.
Analysts, members of the media, investors and other interested parties are invited to participate in a teleconference by calling 866.226.1792 today, Wednesday, April 24, 2013 at 10 a.m. central daylight time (CDT)/11 a.m. eastern daylight time (EDT). Steve Becker, President of the General Partner, will discuss the Partnership's financial results and latest developments. Please dial in 10 minutes prior to the start of the call. No pass code is required. Interested parties can also listen to a live webcast and replay of the conference call by accessing the Investor Center portion of the Partnership's website at www.tcpipelineslp.com. Slides with information that may be discussed during the webcast will be posted on the Investor Center of the Partnership's website under "Events and Presentations" prior to the webcast.
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