Slide 1: Strength & Stability: 2016 Annual and Special Meeting
STRENGTH & STABILITY 2016 ANNUAL AND SPECIAL MEETING
Slide 2: Forward-Looking Information
FORWARD-LOOKING INFORMATION This presentation includes “forward-looking information” and “forward-looking statements” (collectively, “forward-looking information”) which is intended to provide potential investors with information regarding TransCanada Corporation (“TransCanada” or the “Corporation”)
Slide 3: Non-GAAP Measures
NON-GAAP MEASURES Certain information presented in this presentation with respect to TransCanada and Columbia includes certain financial measures which do not have any standardized meaning as prescribed by U.S. GAAP and therefore may not be comparable to similar measures presented by other entities.
Slide 4: TransCanada Today
TRANSCANADA TODAY • One of North America’s largest natural gas pipeline networks – 66,400 km (41,300 mi) of pipeline – 368 Bcf of storage capacity – 14 Bcf/d or 20% of continental demand • Premier liquids pipeline system – 4,200 km (2,600 mi) of pipeline – 545,000 bbl/d or 20% of Western Canadian pr
Slide 5: Track Record of Delivering Long-Term Shareholder Value
TRACK RECORD OF DELIVERING LONG-TERM SHAREHOLDER VALUE Common share dividend CAD$-TSX Common share price * Annualized based on second quarter declaration ** Compound Average Annual Growth Rate 13% Average annual total shareholder return since 2000 5
Slide 6: Challenging Energy Environment
CHALLENGING ENERGY ENVIRONMENT Natural gas price – NYMEX Crude oil price – WTI (current US$/MMBTU) (current US$/Barrel) $7 $120 $6 $100 $5 $80 $4 $60 $3 $40 $2 $1 $20 $0 $0 '10 '11 '12 '13 '14 '15 '16 '10 '11 '12 '13 '14 '15 '16 Henry Hub AECO Sources: ICE, 2016 and NGX, 2016 To March 31, 2016 To Ma
Slide 7: Delivering Results in a Challenging Environment
DELIVERING RESULTS IN A CHALLENGING ENVIRONMENT Comparable Funds generated Comparable earnings Comparable EBITDA* from operations* per share* distributable cash ($Billions) ($Billions) ($) flow per share* ($) 7 5 3 5 6 4 4 5 2 4 3 3 3 2 2 2 1 1 1 1 0 0 0 0 '10 '11 '12 '13 '14 '15 '10 '11 '12 '13 '14
Slide 8: First Quarter 2016 Financial Highlights
FIRST QUARTER 2016 FINANCIAL HIGHLIGHTS • Comparable earnings of $494 million or $0.70 per share – up 6% from 2015 • Comparable EBITDA of $1.5 billion • Funds generated from operations of $1.1 billion • Comparable distributable cash flow of $970 million or $1.38 per share Solid results continue in 2
Slide 9: Global Energy Demand Expected to Increase 32% by 2040
GLOBAL ENERGY DEMAND EXPECTED TO INCREASE 32% BY 2040 6 Global energy demand by fuel (million tonnes of oil equivalent) 5 4 3 2040 2 2013 1 0 Oil Coal Gas Bioenergy Nuclear Hydro Renewables Source: IEA World Energy Outlook 2015, New Policies Case Oil remains largest source of energy Primary shift in
Slide 10: Our Priorities
OUR PRIORITIES • Maximize the value of our $64 billion asset base by delivering energy safely and reliably, every day • Complete the US$13 billion acquisition of Columbia Pipeline Group • Complete $24 billion near-term pro forma capital program • Advance over $45 billion of long-term projects • Cult
Slide 11: Focus on Safety
FOCUS ON SAFETY 11
Slide 12: Maximizing Value and Advancing Growth Plans
MAXIMIZING VALUE AND ADVANCING GROWTH PLANS Natural Gas Pipelines: NGTL expansion, ANR rate case, Mexico projects 12
Slide 13: Maximizing Value and Advancing Growth Plans
MAXIMIZING VALUE AND ADVANCING GROWTH PLANS Energy: Bruce Power refurbishment, Ironwood acquisition, Napanee construction 13
Slide 14: Maximizing Value and Advancing Growth Plans
MAXIMIZING VALUE AND ADVANCING GROWTH PLANS Liquids Pipelines: Keystone contracted capacity rises to 545,000 bbl/d, Alberta projects under construction 14
Slide 15: Capturing Low Risk Growth Opportunities
CAPTURING LOW RISK GROWTH OPPORTUNITIES US$13 billion acquisition of Columbia Pipeline Group • Premium natural gas pipeline and storage assets • Extensive position in the Marcellus and Utica shale regions • FERC regulated assets generate stable and predictable earnings and cash flow • US$7.3 billion
Slide 16: Combined Natural Gas Pipeline Footprint
COMBINED NATURAL GAS PIPELINE FOOTPRINT • One of North America’s largest natural gas transmission businesses – Approximately 91,000 km (56,900 miles) of pipeline – 664 Bcf of working gas storage capacity • Complements our existing assets – Long-term, fee-based contracts – Diversified customer base •
Slide 17: Financing of Columbia Acquisition
FINANCING OF COLUMBIA ACQUISITION • US$13 billion acquisition of Columbia Pipeline Group includes approximately US$2.8 billion of assumed debt – Balance to be funded with subscription receipts of $4.4 billion (issued April 1, 2016) – Monetization of U.S. Northeast power and minority interest in Mexi
Slide 18: Acquisition Timeline
ACQUISITION TIMELINE • Filed notification with US Federal Trade Commission April 4, 2016 • Filing with Committee on Foreign Investment in the United States was accepted on April 13, 2016 • Special Meeting of Columbia Stockholders scheduled for June 22, 2016 Expect acquisition to close in second half
Slide 19: Predictability and Stability of EBITDA
PREDICTABILITY AND STABILITY OF EBITDA Regulated & Contracted Contracted Liquids Gas Pipelines Pipelines 62% 20% Pro Forma 2015 Adjusted EBITDA*,** Contracted Energy 10% Merchant Energy 8% *Adjusted EBITDA is a non-GAAP measure. See the non-GAAP measures slide at the front of this presentation for m
Slide 20: Industry Leading Pro Forma Near-Term Capital Program
INDUSTRY LEADING PRO FORMA NEAR-TERM CAPITAL PROGRAM Estimated Expected Project capital cost* in-service date* Columbia Pipeline Group US7.3 2016-2021 Topolobampo US1.0 2016 Mazatlan US0.4 2016 Tuxpan-Tula US0.5 2017 Tula-Villa de Reyes US0.6 2018 Canadian Mainline 0.7 2016-2017 NGTL System 5.4 2016
Slide 21: Over $45 Billion of Commercially Secured Long-Term Projects
OVER $45 BILLION OF COMMERCIALLY SECURED LONG-TERM PROJECTS* • Bruce Power Life Extension Agreement – To extend operating life of facility to 2064 ($5.3 billion) • Four transformational projects – Energy East ($15.7 billion) and related Eastern Mainline Expansion ($2.0 billion) – Keystone XL (US$8 b
Slide 22: Dividend History and Growth Outlook Through 2020
DIVIDEND HISTORY AND GROWTH OUTLOOK THROUGH 2020 8-10% CAGR** ~7% 2.26* CAGR** 2.08 1.92 0.80 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16E '17E '18E '19E '20E * Annualized based on second quarter dividend of $0.565 per share ** Compound Average Annual Growth Rate Columbia acq
Slide 23: Conclusion
energizing Our Communities @) TransCanada
Slide 24: Strength & Stability: 2016 Annual and Special Meeting
STRENGTH & STABILITY 2016 ANNUAL AND SPECIAL MEETING 28/2:02