Tc Energy Corporation · TSX:TRP
Tc Energy — Q2 2024 Earnings Presentation
26 slides from Tc Energy's earnings presentation, Aug 1, 2024
Slide 1: Second quarter 2024 conference call
T C E N E R G Y 2S 0E C 23O NI N D VQE U S TA OR RT EDRA Y2 0 2 4 C O N F E R E N C E C A L L Second quarter 2024 conference call August 1, 2024
Slide 2: Call participants
T C E N E R G Y S2 E0 C2 O 3 NI N D VQE US A TOR TR E DR A 2Y 0 2 4 C O N F E R E N C E C A L L Call participants François Poirier – President and Chief Executive Officer Sean O’Donnell – Executive Vice-President and Chief Financial Officer Stanley G. Chapman, III – Executive Vice-President and Chie
Slide 3: Forward-looking information and non-GAAP measures
T C E N E R G Y S2 E0 C2 O 3 NI N D VQE US A TOR TR E DR A 2Y 0 2 4 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
Slide 4: François Poirier
T C E N E R G Y S2 E0 C2 O 3 NI N D VQE US A TOR TR E DR A 2Y 0 2 4 C O N F E R E N C E C A L L François Poirier President and Chief Executive Officer
Slide 5: Delivering on 2024 priorities
T C E N E R G Y S2 E0 C2 O 3 NI N D VQE US A TOR TR E DR A 2Y 0 2 4 C O N F E R E N C E C A L L Delivering on 2024 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 • South
Slide 6: Historic equity ownership agreement on NGTL and Foothills Systems
T C E N E R G Y S2 E0 C2 O 3 NI N D VQE US A TOR TR E DR A 2Y 0 2 4 C O N F E R E N C E C A L L CREATING A LASTING AND MEANINGFUL LEGACY Historic equity ownership agreement on NGTL and Foothills Systems Announced a historic equity ownership agreement that will enable Indigenous Communities to become
Slide 7: Strategically positioned to meet growing gas demand
TT C C EE NNEERRGGYY S2E 0C 2O3N D I NQ VUEA S TR O T ERR D2A0Y2 4 C O N F E R E N C E C A L L Strategically positioned to meet growing gas demand Current TC Energy natural gas opportunities underpinned by five key pillars(1): NEXT WAVE LDC ENERGY POWER SUPPLY MAINTENANCE & LNG SECURITY GENERATION A
Slide 8: Reached key milestones on Southeast Gateway construction
T C E N E R G Y S2 E0 C2 O 3 NI N D VQE US A TOR TR E DR A 2Y 0 2 4 C O N F E R E N C E C A L L MAJOR PROJECT EXECUTION Reached key milestones on Southeast Gateway construction SOUTHEAST GATEWAY PIPELINE Continue to track planned schedule and expected cost of US$4.5 billion • Offshore pipeline insta
Slide 9: Operational excellence and robust demand across geographies
T C E N E R G Y S2 E0 C2 O 3 NI N D VQE US A TOR TR E DR A 2Y 0 2 4 C O N F E R E N C E C A L L Q2 HIGHLIGHTS Operational excellence and robust demand across geographies CANADIAN NATURAL GAS PIPELINES U.S. NATURAL GAS PIPELINES MEXICO NATURAL GAS PIPELINES • Net income(1) up 4% vs. Q2 2023 • Compara
Slide 10: Reached five-year revenue requirement settlement with NGTL System customers
T C E N E R G Y S2 E0 C2 O 3 NI N D VQE US A TOR TR E DR A 2Y 0 2 4 C O N F E R E N C E C A L L MAXIMIZING THE VALUE OF OUR ASSETS Reached five-year revenue requirement settlement with NGTL System customers Multi-year growth plan enabled Unanimous support from customers on five-year by Settlement se
Slide 11: Availability and reliability driving strong performance
T C E N E R G Y S2 E0 C2 O 3 NI N D VQE US A TOR TR E DR A 2Y 0 2 4 C O N F E R E N C E C A L L Q2 HIGHLIGHTS Availability and reliability driving strong performance POWER & ENERGY SOLUTIONS • Comparable EBITDA(1) increased 5% vs. Q2 2023 • Cogeneration power plant fleet achieved 95.7% availability
Slide 12: Strong reliability and continued progress towards South Bow spinoff
T C E N E R G Y S2 E0 C2 O 3 NI N D VQE US A TOR TR E DR A 2Y 0 2 4 C O N F E R E N C E C A L L Q2 HIGHLIGHTS Strong reliability and continued progress Blackrod Connection Project towards South Bow spinoff White Spruce LIQUIDS PIPELINES Blackrod Connection • Keystone System achieved 94% operational
Slide 13: Sean O’Donnell
T C E N E R G Y S2 E0 C2 O 3 NI N D VQE US A TOR TR E DR A 2Y 0 2 4 C O N F E R E N C E C A L L Sean O’Donnell Executive Vice-President and Chief Financial Officer
Slide 14: Second quarter comparable EBITDA up 9% year-over-year
T C E N E R G Y S2 E0 C2 O 3 NI N D VQE US A TOR TR E DR A 2Y 0 2 4 C O N F E R E N C E C A L L Second quarter comparable EBITDA(1) up 9% year-over-year Comparable EBITDA(1) Comparable Earnings(1) $Millions $Millions +9% 93 10 -35 8 2,694 78 66 220 -23 -52 36 -121 2,474 17 59 -135 981 -4 978 Q2 2023
Slide 15: 2024E financial outlook
T C E N E R G Y S2 E0 C2 O 3 NI N D VQE US A TOR TR E DR A 2Y 0 2 4 C O N F E R E N C E C A L L REITERATING EXPECTED SUSTAINABLE GROWTH 2024E financial outlook Comparable EBITDA(1) 2024 Comparable EBITDA Progressing against our financial targets $Billions expected to be $11.2 – $11.5 billion • Remai
Slide 16: Progressing South Bow spinoff
TC ENERGY SECOND QUARTER 2024 CONFERENCE CALL Progressing South Bow spinoff Targeting transaction close in early Q4 2024 June 4, 2024 Q3 2024 Early Q4 2024 1 New TC Energy 1 Common Share TC Energy Common Share pre- arrangement(2) Achieved successful Stand up South Spinoff expected to be 0.2 sharehol
Slide 17: Dividend growth supported by operational excellence
T C E N E R G Y S2 E0 C2 O 3 NI N D VQE US A TOR TR E DR A 2Y 0 2 4 C O N F E R E N C E C A L L Dividend growth supported by operational excellence Comparable EBITDA(1) Maintaining dividend growth outlook: 3–5% 2000-2024E • Supported by growth in cash flow per share $Billions Israel- Hamas • Maintai
Slide 18: Advancing our sustainability commitments
T C E N E R G Y S2 E0 C2 O 3 NI N D VQE US A TOR TR E DR A 2Y 0 2 4 C O N F E R E N C E C A L L Advancing our sustainability commitments Highlights from the 2024 Report on Sustainability Reduced absolute methane emissions by 15% between 2019-2023 while increasing throughput by 10% and natural gas co
Slide 19: 2024 strategic priorities
T C E N E R G Y S2 E0 C2 O 3 NI N D VQE US A TOR TR E DR A 2Y 0 2 4 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, re
Slide 20: Appendix
T C E N E R G Y S2 E0 C2 O 3 NI N D VQE US A TOR TR E DR A 2Y 0 2 4 C O N F E R E N C E C A L L Appendix
Slide 21: Appendix A – Non-GAAP reconciliations – Comparable EBITDA
Appendix A – Non-GAAP reconciliations – Comparable EBITDA(1) (Millions of dollars) Three months Six months ended June 30 ended June 30 2024 2023 2024 2023 Total segmented earnings (losses) 2,006 995 4,272 3,165 Interest expense (843) (791) (1,680) (1,553) Allowance for funds used during construction
Slide 22: Appendix B – Net income to comparable earnings
Appendix B – Non-GAAP reconciliations – Net Income (loss) to comparable earnings(1) Three months Six months (Millions of dollars, except per share amounts) ended June 30 ended June 30 2024 2023 2024 2023 Net income (loss) attributable to common shares 963 250 2,166 1,563 Specific items (net of tax):
Slide 23: Appendix C – Net cash provided by operations to comparable funds
Appendix C – Non-GAAP reconciliations – Net cash provided by operations to Comparable funds generated from operations(1) (Millions of dollars) Three months Six months ended June 30 ended June 30 2024 2023 2024 2023 Net cash provided by operations 1,655 1,510 3,697 3,584 Increase (decrease) in operat
Slide 24: 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 25: 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 26: Appendix E – Non-GAAP reconciliations – Charts
Appendix E – Non-GAAP reconciliations – Charts Comparable EBITDA(1) outlook (Billions of dollars) TC Energy TC Energy South Bow (including Liquids Pipelines business) (excluding Liquids Pipelines business) Comparable Comparable Comparable EBITDA(1) EBITDA(1) EBITDA(1) Canadian Natural Gas Pipelines