Tc Energy Corporation · TSX:TRP
Tc Energy — Q2 2022 Earnings Presentation
25 slides from Tc Energy's earnings presentation, Jul 28, 2022
Slide 1: Second quarter 2022 conference call
Second quarter 2022 conference call J U LY 2 8 , 2 0 2 2
Slide 2: Forward looking information and non-GAAP measures
FORWARD LOOKING INFORMATION AND NON-GAAP MEASURES This presentation includes certain forward looking information, including but not limited to, statements related to future dividend and earnings growth, future EBITDA growth, the future growth of our core businesses, our anticipated capital programs,
Slide 3: François Poirier, President and CEO
FRANÇOIS POIRIER, PRESIDENT AND CEO 3
Slide 4: Reaffirming our value proposition
REAFFIRMING OUR VALUE PROPOSITION • LONG-TERM VIEW – Strategic outlook is grounded in fundamentals Our unique value • DISCIPLINED APPROACH – Adherence to well-established, conservative risk preferences proposition • CAPITAL ALLOCATION – Balances sustainable dividend growth and reinvestment • RESILIE
Slide 5: Coastal GasLink achieves milestone
COASTAL GASLINK ACHIEVES MILESTONE Revised agreements strengthen partnership with LNG Canada and provide certainty for the project Provides clarity of cost and schedule • $11.2 billion revised cost estimate Allows for safe and timely execution • Mitigation of project funding and execution risk • Mec
Slide 6: Coastal GasLink is a nation-building project
COASTAL GASLINK IS A NATION-BUILDING PROJECT Construction now ~70% complete Delivering economic opportunities • $1.4 billion+ in contracting and employment opportunities to date • Up to 6,000 people employed at peak construction this summer Advancing Indigenous partnerships • Agreements with 20 Firs
Slide 7: Strategic alignment with rising LNG demand
STRATEGIC ALIGNMENT WITH RISING LNG DEMAND Global LNG Demand Forecast Bcf/d By 2030… • Global LNG demand is forecast to reach nearly 75 Bcf/d • Asian and European LNG demand is forecasted to increase over 40%, or 20 Bcf/d Growth underpinned by energy security concerns, reorientation of energy mix in
Slide 8: Next wave of LNG driving significant opportunities
LNG Facilities NEXT WAVE OF LNG DRIVING Operational, TC Energy connected Next Wave SIGNIFICANT OPPORTUNITIES Today, TC Energy safely and reliably connects ~25% of volumes destined for U.S. LNG exports Bcf/d North American LNG Export Forecast Forecast: 2022-2030 (over 90% growth) ANR CGT TC Energy LN
Slide 9: Strong utilization and reliability across our systems
CLICK INSERT > HEADER & FOOTER TO REPLACE THIS STRONG UTILIZATION AND RELIABILITY ACROSS OUR SYSTEMS Q2 Operational highlights NATURAL GAS PIPELINES POWER & STORAGE LIQUIDS PIPELINES U.S. Natural Gas Pipelines Bruce Power Keystone Pipeline System • Averaged 25.4 Bcf/d, up over 3% • Planned outages c
Slide 10: 2022 priorities and progress
2022 PRIORITIES AND PROGRESS Q2 Highlights Safely deliver the energy people need, every day Keystone Pipeline System brought 30 per cent of the Increase return on capital invested in existing assets 2019 Open Season contracts into service Finalized contracts for 580 MW and 240 MW from Place $6.5 bil
Slide 11: Joel Hunter, Executive Vice-President and CFO
JOEL HUNTER, EXECUTIVE VICE-PRESIDENT AND CFO 11
Slide 12: Demonstrating consistency in financial results
DEMONSTRATING CONSISTENCY IN FINANCIAL RESULTS(1) Quarter ended June 30 Comparable earnings Comparable EBITDA(2) Comparable funds generated per common share(2) (dollars) (millions of dollars) from operations(2) (millions of dollars) Executing an opportunity-rich portfolio while supplying the growing
Slide 13: Consolidated results of operations
CONSOLIDATED RESULTS OF OPERATIONS (millions of dollars, except per share amounts) Three months ended June 30 2022 2021 Net income attributable to common shares 889 975 Specific items (net of tax): Settlement of Mexico prior years’ income tax assessments 2 - Keystone XL asset impairment charge and o
Slide 14: Comparable EBITDA up five per cent year-over-year
COMPARABLE EBITDA(1) UP FIVE PER CENT YEAR-OVER-YEAR Business segment results (2) (millions of dollars) Comparable EBITDA(1) Lower interest Actively expense Lower managing Stronger attributable to contracted 2022 natural U.S. dollar the issuance of a volumes on gas positions U.S. dollar- the U.S. an
Slide 15: Other income statement items
OTHER INCOME STATEMENT ITEMS (1) (millions of dollars) Three months ended June 30 2022 2021 Comparable EBITDA(2) 2,369 2,246 Depreciation and amortization (635) (633) Comparable EBIT(2) 1,734 1,613 Interest expense(3) (620) (577) Allowance for funds used during construction 63 64 Interest income and
Slide 16: Industry leading $28 billion secured capital program
Portfolio expected to deliver a INDUSTRY LEADING $28 BILLION weighted average unlevered SECURED CAPITAL PROGRAM after-tax IRR of 7-9 per cent $Billions Villa de Liquids U.S. other Reyes Canadian recoverable Columbia Gas U.S. delivery capital US$1.0 CGL regulated maintenance Modernization III US$1.9
Slide 17: Reiterating comparable EBITDA outlook 2021-2026E
REITERATING COMPARABLE EBITDA(1) OUTLOOK 2021-2026E $Billions Additional growth opportunities and enhancements 5% CAGR 17 (1) Comparable EBITDA is a non-GAAP measure. See the forward-looking information and non-GAAP measures slide at the front of this presentation for more information.
Slide 18: Funding program outlook 2022-2024E
FUNDING PROGRAM OUTLOOK 2022-2024E Comparable funds generated from operations(1) expected to remain robust $Billions • Reflects the resiliency and criticality of our energy infrastructure portfolio U.S. Hybrid issuance Financial strength and flexibility underpinned by: Dividends • Resilient, predict
Slide 19: Reaffirming outlook and maintaining dividend growth
REAFFIRMING OUTLOOK AND MAINTAINING DIVIDEND GROWTH Comparable EBITDA(1) Declared a third quarter 2022 dividend of $0.90 $Billions per share equivalent to $3.60 per share annually Additional growth opportunities and enhancements $3.60* 5% CAGR 2000 2022E (1) Comparable EBITDA is a non-GAAP measure.
Slide 20: Question & answer period
Question & answer period 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 President, U.S. and Mexico Natural Gas Pipelines Corey Hessen - Executive Vice
Slide 21: Second quarter 2022 conference call
Second quarter 2022 conference call J U LY 2 8 , 2 0 2 2 21
Slide 22: Appendix A – Financial highlights comparable GAAP measures
APPENDIX A – FINANCIAL HIGHLIGHTS COMPARABLE GAAP MEASURES Quarter ended June 30, 2022 Net Income per Common Share Segmented Earnings Net Cash Provided by Operations (dollars) (millions of dollars) (millions of dollars) 22
Slide 23: Appendix B – Business segment results comparable GAAP measure
APPENDIX B – BUSINESS SEGMENT RESULTS COMPARABLE GAAP MEASURE (millions of dollars) Three months ended June 30 2022 2021 Segmented earnings Canadian Natural Gas Pipelines 385 361 U.S. Natural Gas Pipelines 711 688 Mexico Natural Gas Pipelines 162 138 Liquids Pipelines 261 250 Power and Storage 170 1
Slide 24: Appendix C – Comparable EBITDA and comparable earnings
APPENDIX C – COMPARABLE EBITDA AND COMPARABLE EARNINGS COMPARABLE GAAP MEASURE (millions of dollars) Three months ended June 30 2022 2021 Comparable EBITDA(1) 2,369 2,246 Depreciation and amortization (635) (633) Interest expense (620) (577) Allowance for funds used during construction 63 64 Interes
Slide 25: Appendix D – Funds generated from operations
APPENDIX D – FUNDS GENERATED FROM OPERATIONS AND COMPARABLE FUNDS GENERATED FROM OPERATIONS COMPARABLE GAAP MEASURE (millions of dollars) Three months ended June 30 2022 2021 Net cash provided by operations 942 1,711 Increase in operating working capital 618 27 Funds generated from operations(1) 1,5