Tc Energy Corporation · TSX:TRP
Tc Energy — Q3 2023 Earnings Presentation
27 slides from Tc Energy's earnings presentation, Nov 8, 2023
Slide 1: Third quarter 2023 conference call
Third quarter 2023 conference call N O V EMBER 8 , 2 0 2 3
Slide 2: Call participants
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 Operating Officer, Natural Gas Pipelines Annesley Wallace – Executive Vice-President, Strategy an
Slide 3: 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 4: François Poirier
François Poirier President and Chief Executive Officer
Slide 5: Progressing our 2023 priorities
TC ENERGY THIRD QUARTER 2023 CONFERENCE CALL Progressing our 2023 priorities PROJECT EXECUTION ENHANCING BALANCE SHEET MAXIMIZING THE VALUE STRENGTH AND FLEXIBILITY OF OUR ASSETS • Continue to track planned cost and • Closed sale of 40% minority • 2023 comparable EBITDA (1) expected to schedule on b
Slide 6: High utilization across our asset base
TC ENERGY THIRD QUARTER 2023 CONFERENCE CALL Q3 OPERATIONAL HIGHLIGHTS High utilization across our asset base CANADIAN NATURAL GAS PIPELINES U.S. NATURAL GAS PIPELINES • Net income(1) up 6% vs. Q3 2022 • Comparable EBITDA(2) up 5% vs. Q3 2022 • USNG LNG deliveries averaged 3.1 Bcf/d in Q3 2023, • Av
Slide 7: Reliably delivering to strong demand markets
TC ENERGY THIRD QUARTER 2023 CONFERENCE CALL Q3 OPERATIONAL HIGHLIGHTS Reliably delivering to strong demand markets MEXICO NATURAL GAS PIPELINES POWER & ENERGY SOLUTIONS • Comparable EBITDA(2) up 14% vs. Q3 2022 • Bruce Power availability of 94% • Unit 6 returned to service in September, • VdR later
Slide 8: Coastal GasLink achieves mechanical completion
TC ENERGY THIRD QUARTER 2023 CONFERENCE CALL DELIVERING ON 2023 PRIORITIES Coastal GasLink achieves mechanical completion COASTAL GASLINK 100% pipe installation and hydrotesting completed across the 670 km length • 100% of the 800 classified water crossings are complete • Reached mechanical completi
Slide 9: Significant progress on Southeast Gateway
TC ENERGY THIRD QUARTER 2023 CONFERENCE CALL DELIVERING ON 2023 PRIORITIES Significant progress on Southeast Gateway SOUTHEAST GATEWAY PIPELINE Continue to track schedule and expected cost of US$4.5 billion • Onshore construction at landfall sites continues to progress on plan • All critical permits
Slide 10: TC Energy Board Chair announcement
TC ENERGY THIRD QUARTER 2023 CONFERENCE CALL TC Energy Board Chair announcement • John Lowe will succeed Siim A. Vanaselja as Board Chair, effective January 1, 2024 o Has been a Director since 2015 o Currently serves as Chair of the Governance JOHN LOWE committee and member of the HSSE committee o H
Slide 11: Bevin Wirzba
Bevin Wirzba Executive Vice-President and Group President, Liquids Pipelines and Coastal GasLink, intended South Bow CEO
Slide 12: Important milestones reached in spinoff progress
TC ENERGY THIRD QUARTER 2023 CONFERENCE CALL Important milestones reached in spinoff progress SOUTH BOW CORPORATION HAL KVISLE INTENDED SOUTH BOW This name symbolizes the historical roots of the company in BOARD CHAIR Alberta, Canada, while acknowledging the pipeline system's strategic corridor, whi
Slide 13: Reinforcing South Bow's premium value proposition
TC ENERGY THIRD QUARTER 2023 CONFERENCE CALL Reinforcing South Bow’s premium value proposition Unique value proposition Strong total shareholder return Operational and commercial excellence Above average dividend yield bolstered by 2-3% expected dividend growth Premium corridor Accelerated deleverag
Slide 14: Differentiated system continues to deliver results
TC ENERGY THIRD QUARTER 2023 CONFERENCE CALL Q3 OPERATIONAL HIGHLIGHTS Differentiated system continues to deliver results LIQUIDS PIPELINES Strong demand on Keystone Pipeline System and Marketlink for Canadian crude • Comparable EBITDA(1) up ~8% for the first nine months of 2023 vs. same period in 2
Slide 15: Joel Hunter
Joel Hunter Executive Vice-President and Chief Financial Officer
Slide 16: Third quarter comparable EBITDA up 7 per cent year-over-year
TC ENERGY THIRD QUARTER 2023 CONFERENCE CALL Third quarter comparable EBITDA(1) up 7 per cent year-over-year $Millions Comparable EBITDA(1) $Millions Comparable Earnings(1) 1,300 2,700 +7% -39 6 2,632 -37 66 2,600 1,200 28 42 171 2,500 68 2,461 1,100 -199 1,068 2,400 -2 1,035 -31 28 -18 7 48 2,300 1
Slide 17: 2023E financial outlook
TC ENERGY THIRD QUARTER 2023 CONFERENCE CALL REITERATING EXPECTED SUSTAINABLE GROWTH IN 2023 2023E financial outlook Comparable EBITDA(1) • 2023 Comparable EPS(1) expected to be generally consistent with 2022 • ~$5 billion placed into service year-to-date, on-budget $Billions Comparable EBITDA expec
Slide 18: Meaningful progress made towards deleveraging target
TC ENERGY THIRD QUARTER 2023 CONFERENCE CALL Meaningful progress made towards deleveraging target Columbia Gas and Columbia Gulf 40% monetization closed with $5.3 billion (US$3.9 billion) in cash proceeds received October 4, delevers ~0.4x 2022 2024 Comparable EBITDA (1) growth driven by assets expe
Slide 19: Sustainable dividend through all parts of the economic cycle
TC ENERGY THIRD QUARTER 2023 CONFERENCE CALL FINANCIAL STRENGTH & FLEXIBILITY Sustainable dividend through all parts of the economic cycle Conservative earnings payout ratio Disciplined balance sheet Protection through regulated construct and capital management 2023E Dividend payout ratio (1) • 89%
Slide 20: Continued growth through disciplined investment
TC ENERGY THIRD QUARTER 2023 CONFERENCE CALL Continued growth through disciplined investment Maintaining dividend growth outlook: 3-5% Comparable EBITDA(1) Israel- Supported by growth in earnings and cash flow per share 2000-2023E Hamas war Maintain conservative payout ratios Russia- Ukraine COVID-1
Slide 21: TC Energy's value proposition
TC ENERGY THIRD QUARTER 2023 CONFERENCE CALL $Billions Comparable EBITDA(1) TC Energy's value proposition 2000-2023E LONG-TERM VIEW DISCIPLINED APPROACH Strategic outlook is grounded Adherence to well-established, in fundamentals conservative risk preferences Maintaining dividend growth outlook: 3-5
Slide 22: Appendix
TC ENERGY THIRD QUARTER 2023 CONFERENCE CALL Third quarter 2023 conference call Appendix N O VEMBER 8 , 2 0 23
Slide 23: Appendix A – Non-GAAP reconciliations – Net Income to Comparable Earnings
T C E N E R G Y TS H E CI RODN DQ UQAURATRETRE R2 022032 3C OC NO FNEFREERNE CNEC CE ACLAL L L Appendix A – Non-GAAP reconciliations – Net Income (loss) to Comparable Earnings Three months Nine months (Millions of dollars, except per share amounts) ended Sept 30 ended Sept 30 2023 2 0 22 2 0 23 2022
Slide 24: Appendix B – Non-GAAP reconciliations – Comparable EBITDA to Net Income
TC ENERGY THIRD QUARTER 2023 CONFERENCE CALL Appendix B – Non-GAAP reconciliations – Comparable EBITDA to Net Income (loss) (Millions of dollars) Three months Nine months ended Sept 30 ended Sept 30 2023 2022 2023 2022 Comparable EBITDA(1) 2,632 2,461 7,881 7,218 Depreciation and amortization (690)
Slide 25: Appendix C – Net cash provided by operations to Comparable funds
TC ENERGY THIRD QUARTER 2023 CONFERENCE CALL Appendix C – Non-GAAP reconciliations – Net cash provided by operations to Comparable funds generated from operations (Millions of dollars) Three months Nine months ended Sept 30 ended Sept 30 2023 2022 2023 2022 Net cash provided by operations 1,824 1,70
Slide 26: Appendix D – Adjusted Debt/Adjusted Comparable EBITDA (D/EBITDA)
TC ENERGY THIRD QUARTER 2023 CONFERENCE CALL Appendix D – Non-GAAP reconciliations – Adjusted Debt/Adjusted Comparable EBITDA (D/EBITDA) Adjusted debt and adjusted comparable EBITDA are non-GAAP measures used to compute the D/EBITDA multiple. Each of adjusted debt and adjusted comparable EBITDA meas
Slide 27: Appendix D – Adjusted Debt/Adjusted Comparable EBITDA continued
TC ENERGY THIRD QUARTER 2023 CONFERENCE CALL Appendix D – Non-GAAP reconciliations – Adjusted Debt/Adjusted Comparable EBITDA (D/EBITDA) continued Adjusted Debt/Adjusted Comparable EBITDA (1) Millions Year ended December 31 2022 2021 Reported total debt 58,300 52,766 Management adjustments: Debt tre