Tc Energy Corporation · TSX:TRP
Tc Energy — Q1 2019 Earnings Presentation
24 slides from Tc Energy's earnings presentation, May 3, 2019
Slide 1: First quarter 2019 conference call
First quarter 2019 conference call May 3, 2019
Slide 2: Forward looking information and non-GAAP measures
Forward looking information and non‐GAAP measures This presentation includes certain forward looking information, including future oriented financial information or financial outlook, which is intended to help current and potential investors understand management’s assessment of our future plans and
Slide 3: Russ Girling, President & CEO
Russ Girling President & CEO 3
Slide 4: First quarter 2019 accomplishments
First quarter 2019 accomplishments Generated record first quarter financial results • Comparable earnings were $1.07 per common share • Comparable funds generated from operations of $1.8 billion Advanced $30 billion secured capital program • Placed ~$5.3 billion of projects into service • Additional
Slide 5: Financial highlights – Three months ended March 31 (Non-GAAP)
Financial highlights – Three months ended March 31 (Non‐GAAP) Comparable Comparable Comparable funds earnings per common share* EBITDA* generated from operations* (Dollars) ($Millions) ($Millions) 9% increase 16% increase 11% increase 1.07 2,383 0.98 2,063 1,791 1,611 2018 2019 2018 2019 2018 2019 *
Slide 6: Natural Gas Pipelines recent developments
Natural Gas Pipelines recent developments Canadian Natural Gas Pipelines • Advancing $16.7 billion capital program that includes numerous NGTL System expansions and Coastal GasLink • Placed approximately $250 million of projects into service on the NGTL System in first quarter 2019 U.S. Natural Gas
Slide 7: Liquids Pipelines recent developments
Liquids Pipelines recent developments • White Spruce commercial in‐service achieved in May 2019 • Entered agreement with Motiva Enterprises LLC to construct a pipeline connection to Keystone Pipeline System • Keystone XL continues to advance • Received new Presidential Permit in March which supersed
Slide 8: Power and Storage
Power and Storage Renamed segment – previously referred to as Energy • More clearly articulates the business Napanee Power Plant (900 MW) • Experienced equipment failure while progressing commissioning activities • Commencement of commercial operations expected in second half of 2019 • Continue to e
Slide 9: Advancing $30 billion secured capital program through 2023
Advancing $30 billion secured capital program through 2023 Estimated Capital Expected Project Invested to Date* Cost* In‐Service Date* White Spruce 0.2 0.2 2019 Sur de Texas** US 1.5 US 1.4 2019 Napanee 1.7 1.7 2019 NGTL System 2.8 2.0 2019 Modernization II US 1.1 US 0.5 2019‐2020 Villa de Reyes US
Slide 10: Secured capital program drives significant growth
Secured capital program drives significant growth Comparable EBITDA outlook ($Billions) ~95% of comparable EBITDA to come from regulated assets or long‐term contracts 10
Slide 11: Dividend growth outlook
Dividend growth outlook Annual growth of 8 to 10 per cent through 2021 Supported by expected growth in earnings and cash flow and continued strong coverage ratios * Annual rate based on second quarter dividend declared of $0.75 per share. 11
Slide 12: Key takeaways
Key takeaways Proven strategy – Low risk business model • ~95% of comparable EBITDA from regulated assets or long‐term contracts Business continued to produce record results in first quarter 2019 • Demand for our services has never been greater Visible growth • Advancing $30 billion of secured growt
Slide 13: Don Marchand, Executive VP & CFO
Don Marchand Executive VP & CFO 13
Slide 14: Consolidated results of operations
Consolidated results of operations (millions of dollars, except per share amounts) Three months ended March 31 2019 2018 Net Income Attributable to Common Shares 1,004 734 Specific items (net of tax): U.S. Northeast power marketing contracts 12 (6) Risk management activities (29) 136 Comparable Earn
Slide 15: Business segment results
Business segment results(1) (millions of dollars) Three months ended March 31 2019 2018 Comparable EBITDA(2) Canadian Natural Gas Pipelines 556 494 U.S. Natural Gas Pipelines 972 804 Mexico Natural Gas Pipelines 146 160 Liquids Pipelines 563 431 Power and Storage 151 176 Corporate (5) (2) Total 2,38
Slide 16: Other income statement items
Other income statement items(1) (millions of dollars) Three months ended March 31 2019 2018 Comparable EBITDA(2) 2,383 2,063 Depreciation and amortization (608) (535) Comparable EBIT(2) 1,775 1,528 Interest expense (586) (527) Allowance for funds used during construction 139 105 Interest income and
Slide 17: Comparable distributable cash flow
Comparable distributable cash flow (millions of dollars, except per share amounts) Three months ended March 31 2019 2018 Comparable Funds Generated From Operations(1) 1,791 1,611 Dividends on preferred shares (40) (39) Distributions to non‐controlling interests (56) (69) Non‐recoverable maintenance
Slide 18: Funding program continued to advance in first quarter 2019
Funding program continued to advance in first quarter 2019 Strong, predictable and growing cash flow from operations • Comparable funds generated from operations of $1.8 billion in the quarter Significant ongoing DRP participation supports simultaneous large capital program and de‐leveraging • Appro
Slide 19: Funding program outlook 2019-2021
Funding program outlook 2019‐2021 $Billions Numerous levers available to fund Secured Capital Program • Strong, predictable and growing cash flow from operations • Dividend Reinvestment Plan • Access to capital markets including: • Senior debt • Hybrid securities and preferred shares • Portfolio man
Slide 20: Delivering long-term shareholder value
Delivering long‐term shareholder value Track Visible Attractive, growing Strong record growth dividend financial position 13% average annual $30 billion secured Dividend raised 8.7% Numerous levers total shareholder to 2023 in February 2019 available to fund return since 2000 4.7% yield future growt
Slide 21: Question & answer period
Question & answer period 2) TC Energy
Slide 22: First quarter 2019 conference call
First quarter 2019 conference call May 3, 2019
Slide 23: Appendix – Reconciliation of non-GAAP measures
Appendix – Reconciliation of non‐GAAP measures (millions of dollars) Three months ended March 31 2019 2018 Comparable EBITDA(1) 2,383 2,063 Depreciation and amortization (608) (535) Interest expense (586) (527) Allowance for funds used during construction 139 105 Interest income and other included i
Slide 24: Appendix – Reconciliation of non-GAAP measures continued
Appendix – Reconciliation of non‐GAAP measures continued (millions of dollars) Three months ended March 31 2019 2018 Net Cash Provided By Operations 1,949 1,412 (Decrease)/increase in operating working capital (142) 207 Funds Generated From Operations(1) 1,807 1,619 Specific items: U.S. Northeast po