Tc Energy Corporation · TSX:TRP
Tc Energy — Q3 2019 Earnings Presentation
24 slides from Tc Energy's earnings presentation, Nov 1, 2019
Slide 1: Third quarter 2019 conference call
Third quarter 2019 conference call November 1, 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: Third quarter 2019 accomplishments
Third quarter 2019 accomplishments Generated strong financial results • Comparable earnings were $1.04 per common share • Comparable funds generated from operations of $1.8 billion Advanced $30 billion secured capital program • Placed ~$8.2 billion of projects into service through the first nine mon
Slide 5: Financial highlights – Three months ended September 30 (Non-GAAP)
Financial highlights – Three months ended September 30 (Non‐GAAP) Comparable Comparable Comparable funds earnings per common share* EBITDA* generated from operations* (Dollars) ($Millions) ($Millions) 4% increase 14% increase 15% increase *Comparable Earnings per Common Share, Comparable EBITDA and
Slide 6: Financial highlights – Nine months ended September 30 (Non-GAAP)
Financial highlights – Nine months ended September 30 (Non‐GAAP) Comparable Comparable Comparable funds earnings per common share* EBITDA* generated from operations* (Dollars) ($Millions) ($Millions) 10% increase 15% increase 14% increase *Comparable Earnings per Common Share, Comparable EBITDA and
Slide 7: Natural Gas Pipelines recent developments
Natural Gas Pipelines recent developments Canadian Natural Gas Pipelines • Announced $1.2 billion West Path Delivery Program • Now advancing $10 billion NGTL System expansion program that will add 3.5 Bcf/d of delivery capacity • Construction continues on the $6.6 billion Coastal GasLink project tha
Slide 8: Liquids Pipelines recent developments
Liquids Pipelines recent developments • Assets continue to produce strong operating results • Completed the sale of 85 per cent equity interest in Northern Courier • Keystone XL continues to advance • Received new Presidential Permit in March which supersedes the 2017 permit • Nebraska Supreme Court
Slide 9: Power and Storage recent developments
Power and Storage recent developments • Ontario natural gas‐fired power plants • $2.87 billion asset sale expected to close by the end of first quarter 2020 • Bruce Power • Unit 6 Major Component Replacement expected to begin in early 2020 • Power price increased to ~$78 per MWh on April 1, 2019 to
Slide 10: Advancing $30 billion secured capital program through 2023
Advancing $30 billion secured capital program through 2023 Estimated Capital Invested to Expected Project Cost* Date* In‐Service Date* NGTL System 2.5 2.4 2019 Modernization II US 1.1 US 0.7 2019‐2020 Villa de Reyes US 0.9 US 0.7 2020 NGTL System 2.1 0.8 2020 Other Liquids Pipelines 0.1 ‐ 2020 Canad
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 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 strong results in third 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 September 30 Nine months ended September 30 2019 2018 2019 2018 Net Income Attributable to Common Shares 739 928 2,868 2,447 Specific items (net of tax): Loss on sale of Columbia Midstream assets 13
Slide 15: Business segment results
Business segment results(1) (millions of dollars) Three months Nine months ended September 30 ended September 30 2019 2018 2019 2018 Comparable EBITDA(2) Canadian Natural Gas Pipelines 572 522 1,656 1,561 U.S. Natural Gas Pipelines 796 715 2,625 2,223 Mexico Natural Gas Pipelines 153 153 440 455 Liq
Slide 16: Other income statement items
Other income statement items(1) (millions of dollars) Three months Nine months ended September 30 ended September 30 2019 2018 2019 2018 Comparable EBITDA(2) 2,344 2,056 7,051 6,110 Depreciation and amortization (610) (564) (1,839) (1,669) Comparable EBIT(2) 1,734 1,492 5,212 4,441 Interest expense
Slide 17: Comparable distributable cash flow
Comparable distributable cash flow (millions of dollars, except per share amounts) Three months Nine months ended September 30 ended September 30 2019 2018 2019 2018 Comparable Funds Generated From Operations(1) 1,802 1,571 5,292 4,641 Dividends on preferred shares (40) (40) (120) (118) Distribution
Slide 18: Funding program continued to advance in third quarter
Funding program continued to advance in third quarter Strong, predictable and growing cash flow from operations • Comparable funds generated from operations of $1.8 billion in the quarter Accessed capital markets on compelling terms • Issued US$1.1 billion of 60‐year hybrid securities at a rate of 5
Slide 19: 2019 Funding program complete
2019 Funding program complete $Billions • $7.8 billion raised in 2019 through an array of attractive funding options • $3.4 billion from monetization of Coolidge, Northern Courier and certain Columbia Midstream assets • Additional $2.9 billion to be realized on sale of Ontario gas‐fired power plants
Slide 20: Delivering long-term shareholder value
Delivering long‐term shareholder value Track Visible Attractive, growing Strong record growth dividend financial position 14% average annual $30 billion secured Dividend raised 8.7% Numerous levers total shareholder through 2023 in February 2019 available to fund return since 2000 4.5% yield future
Slide 21: Question & answer period
Question & answer period 2) TC Energy
Slide 22: Third quarter 2019 conference call
Third quarter 2019 conference call November 1, 2019
Slide 23: Appendix – Reconciliation of non-GAAP measures
Appendix – Reconciliation of non‐GAAP measures (millions of dollars) Three months Nine months ended September 30 ended September 30 2019 2018 2019 2018 Comparable EBITDA(1) 2,344 2,056 7,051 6,110 Depreciation and amortization (610) (564) (1,839) (1,669) Interest expense (573) (577) (1,747) (1,662)
Slide 24: Appendix – Reconciliation of non-GAAP measures continued
Appendix – Reconciliation of non‐GAAP measures continued (millions of dollars) Three months Nine months ended September 30 ended September 30 2019 2018 2019 2018 Net Cash Provided by Operations 1,585 1,299 5,256 4,516 (Decrease)/increase in operating working capital (140) 284 (329) 130 Funds Generat