Tc Energy Corporation · TSX:TRP
Tc Energy — Q4 2023 Earnings Presentation
27 slides from Tc Energy's earnings presentation, Feb 16, 2024
Slide 1: Fourth quarter 2023 conference call
T C E N E R G Y 2F 0O 2U3R TI N H VQE U S TAOR RT EDRA Y2 0 2 3 C O N F E R E N C E C A L L Fourth quarter 2023 conference call February 16, 2024
Slide 2: Call participants
FO TC ENERGY 2 0 2U3R TI N H VQE US TA O R TR E DR A 2Y 0 2 3 C O N F E R E N C E C A L L Call participants François Poirier – President and Chief Executive Officer Joel Hunter – Executive Vice-President and Chief Financial Officer Stanley G. Chapman, III – Executive Vice-President and Chief Operati
Slide 3: Forward-looking information and non-GAAP measures
TC ENERGY 2 FO0 2U3R TI N H VQE US TA O R TR E DR A 2Y 0 2 3 C O N F E R E N C E C A L L 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 c
Slide 4: François Poirier
TC ENERGY FOURTH QUARTER 2023 CONFERENCE CALL François Poirier President and Chief Executive Officer
Slide 5: Reflecting on our 2023 priorities
TC ENERGY 2 FO0 2U3R TI N H VQE US TA O R TR E DR A 2Y 0 2 3 C O N F E R E N C E C A L L Reflecting on our 2023 priorities MAXIMIZING THE VALUE OF OUR ASSETS THROUGH PROJECT ENHANCING BALANCE SAFETY AND OPERATIONAL EXECUTION SHEET STRENGTH EXCELLENCE 2023 comparable EBITDA(1) 11% higher Achieved mec
Slide 6: Successfully connecting Canadian LNG to global markets
TC ENERGY 2 FO0 2U3R TI N H VQE US TA O R TR E DR A 2Y 0 2 3 C O N F E R E N C E C A L L Photo credit: Brandon Indic MAJOR PROJECT EXECUTION Successfully connecting Canadian LNG to global markets COASTAL GASLINK Completed all construction and required commissioning activities • Mechanical completion
Slide 7: Significant progress on Southeast Gateway
TC ENERGY 2 FO0 2U3R TI N H VQE US TA O R TR E DR A 2Y 0 2 3 C O N F E R E N C E C A L L MAJOR PROJECT EXECUTION Significant progress on Southeast Gateway SOUTHEAST GATEWAY PIPELINE Continue to track schedule and expected cost of US$4.5 billion • Offshore pipe installation began in December 2023 • C
Slide 8: Operational excellence and high utilization across North America
TC ENERGY 2 FO0 2U3R TI N H VQE US TA O R TR E DR A 2Y 0 2 3 C O N F E R E N C E C A L L Q4 HIGHLIGHTS Operational excellence and high utilization across North America CANADIAN NATURAL GAS U.S. NATURAL GAS MEXICO NATURAL GAS PIPELINES PIPELINES PIPELINES • Net income(1) up 5% vs. Q4 2022 • Comparabl
Slide 9: Delivering power when it's needed most
TC ENERGY 2 FO0 2U3R TI N H VQE US TA O R TR E DR A 2Y 0 2 3 C O N F E R E N C E C A L L Q4 HIGHLIGHTS Delivering power when it’s needed most POWER & ENERGY SOLUTIONS • Comparable EBITDA(1) increased 31% vs. Q4 2022 • Alberta cogeneration power plant fleet achieved ~99% availability • Achieved Bruce
Slide 10: Continued to progress proposed South Bow spinoff
TC ENERGY 2 FO0 2U3R TI N H VQE US TA O R TR E DR A 2Y 0 2 3 C O N F E R E N C E C A L L Q4 HIGHLIGHTS Continued to progress proposed South Bow spinoff LIQUIDS PIPELINES • Comparable EBITDA(1) increased 4% vs. Q4 2022 • Continued strong demand across the Keystone Pipeline System • Continued progress
Slide 11: Joel Hunter
TC ENERGY 2 FO0 2U3R TI N H VQE US TA O R TR E DR A 2Y 0 2 3 C O N F E R E N C E C A L L Joel Hunter Executive Vice-President and Chief Financial Officer
Slide 12: Fourth quarter comparable EBITDA up year-over-year
TC ENERGY 2 FO0 2U3R TI N H VQE US TA O R TR E DR A 2Y 0 2 3 C O N F E R E N C E C A L L Fourth quarter comparable EBITDA(1) up 16% year-over-year Comparable EBITDA(1) Comparable Earnings(1) $Millions $Millions +16% +24% -29 -1 3,107 -47 68 -3 15 63 84 -119 -118 80 17 -2 1,403 266 424 2,683 1,129 Q4
Slide 13: 2024E financial outlook
TC ENERGY 2 FO0 2U3R TI N H VQE US TA O R TR E DR A 2Y 0 2 3 C O N F E R E N C E C A L L EXPECTED SUSTAINABLE GROWTH IN 2024 2024E financial outlook Comparable EBITDA(1) 2024 Comparable EBITDA(1) expected to be higher than 2023 • Growth in the NGTL System investment base 2024 Comparable EBITDA $Bill
Slide 14: 2024 Comparable EBITDA outlook: natural gas pipelines
TC ENERGY 2 FO0 2U3R TI N H VQE US TA O R TR E DR A 2Y 0 2 3 C O N F E R E N C E C A L L 2024 COMPARABLE EBITDA(1) OUTLOOK CANADIAN NATURAL U.S. NATURAL GAS MEXICO NATURAL GAS PIPELINES PIPELINES GAS PIPELINES • Consistent with 2023 driven by: • Higher than 2023 driven by: • Higher than 2023 driven
Slide 15: 2024 Comparable EBITDA outlook: Power and Energy Solutions, Liquids
TC ENERGY 2 FO0 2U3R TI N H VQE US TA O R TR E DR A 2Y 0 2 3 C O N F E R E N C E C A L L 2024 COMPARABLE EBITDA(1) OUTLOOK POWER AND LIQUIDS ENERGY SOLUTIONS PIPELINES • Higher than 2023 driven by: • Consistent with 2023: • Full-year impact from Bruce Power Unit 6 • Without taking into account impac
Slide 16: Delivering sustainable Comparable EBITDA growth
TC ENERGY 2 FO0 2U3R TI N H VQE US TA O R TR E DR A 2Y 0 2 3 C O N F E R E N C E C A L L Delivering sustainable Comparable EBITDA(1) growth 2023–2026E outlook (excluding Liquids Pipelines) 2023–2026E outlook – Liquids Pipelines $Billions Beyond 2026 $Billions deliver AFFO per share growth at Long-te
Slide 17: Continued growth through disciplined investment
TC ENERGY 2 FO0 2U3R TI N H VQE US TA O R TR E DR A 2Y 0 2 3 C O N F E R E N C E C A L L Continued growth through disciplined investment Maintaining dividend growth outlook: 3-5% Comparable EBITDA(1) 2000-2024E • Supported by growth in earnings and cash flow per share • Maintain conservative payout
Slide 18: 2024 strategic priorities
TC ENERGY 2 FO0 2U3R TI N H VQE US TA O R TR E DR A 2Y 0 2 3 C O N F E R E N C E C A L L 2024 strategic priorities MAXIMIZING THE VALUE OF OUR PROJECT EXECUTION ENHANCING BALANCE SHEET ASSETS THROUGH SAFETY AND ON-TIME AND ON-BUDGET STRENGTH AND FLEXIBILITY OPERATIONAL EXCELLENCE • Safely, reliably
Slide 19: Appendix
TC ENERGY 2 FO0 2U3R TI N H VQE US TA O R TR E DR A 2Y 0 2 3 C O N F E R E N C E C A L L Appendix
Slide 20: Appendix A – Non-GAAP reconciliations – Comparable EBITDA
Appendix A – Non-GAAP reconciliations – Comparable EBITDA(1) (Millions of dollars) Three months Year ended ended December 31 December 31 2023 2022 2023 2022 Total segmented earnings (losses) 2,327 (998) 6,136 3,632 Interest expense (845) (722) (3,263) (2,588) Allowance for funds used during construc
Slide 21: Appendix B – Net income to comparable earnings
Appendix B – Non-GAAP reconciliations – Net Income (loss) to comparable earnings(1) Three months Year ended (Millions of dollars, except per share amounts) ended December 31 December 31 2023 2022 2023 2022 Net income (loss) attributable to common shares 1,463 (1,447) 2,829 641 Specific items (net of
Slide 22: Appendix C – Net cash provided by operations to comparable FGFO
Appendix C – Non-GAAP reconciliations – Net cash provided by operations to Comparable funds generated from operations(1) (Millions of dollars) Three months Year ended ended December 31 December 31 2023 2022 2023 2022 Net cash provided by operations 1,860 2,025 7,268 6,375 Increase (decrease) in oper
Slide 23: Appendix D – Adjusted Debt/Adjusted Comparable EBITDA
Appendix D – Non-GAAP reconciliations – Adjusted Debt/Adjusted Comparable EBITDA (Debt-to-EBITDA) Adjusted debt and adjusted comparable EBITDA are non-GAAP measures used to compute the debt-to-EBITDA multiple. Each of adjusted debt and adjusted comparable EBITDA measures does not have any standardiz
Slide 24: Appendix D – Adjusted Debt/Adjusted Comparable EBITDA continued
Appendix D – Non-GAAP reconciliations – Adjusted Debt/Adjusted Comparable EBITDA(1) (Debt-to-EBITDA) continued (Millions of dollars) Year ended December 31 2023 2022 Reported total debt 63,201 58,300 Management adjustments: Debt treatment of preferred shares(2) 1,250 1,250 Equity treatment of junior
Slide 25: Appendix E – AFFO Reconciliation
Appendix E – Non-GAAP reconciliations – AFFO Reconciliation AFFO or “adjusted funds generated from operations” represents comparable FGFO, adjusted to reflect non-controlling interest distributions before capex contributions and debt recapitalization. AFFO is a non-GAAP measure which does not have a
Slide 26: Appendix E – AFFO Reconciliation continued
Appendix E – Non-GAAP reconciliations – AFFO Reconciliation continued Year ended (Millions of dollars) December 31 2023 2022 Net cash provided by operations 7,268 6,375 Increase (decrease) in operating working capital (207) 639 Funds generated from operations(1) 7,061 7,014 Specific items: Current i
Slide 27: Appendix F – Non-GAAP reconciliations – Charts
Appendix F – Non-GAAP reconciliations – Charts Comparable EBITDA(1) outlook $Billions TC Energy TC Energy South Bow (including Liquids Pipelines business) (excluding Liquids Pipelines business) 11.0 11.2 – 11.5 11.2 – 11.5 1.6 9.5 1.5 1.0 6.1 5.1 2023 2023 2024E 2023 2023 2026E 2023 2023 2026E Segme