Tc Energy Corporation · TSX:TRP
Tc Energy — Q2 2019 Earnings Presentation
24 slides from Tc Energy's earnings presentation, Aug 1, 2019
Slide 1: Second quarter 2019 conference call
Second quarter 2019 conference call August 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: Second quarter 2019 accomplishments
Second quarter 2019 accomplishments Generated strong financial results • Comparable earnings were $1.00 per common share • Comparable funds generated from operations of $1.7 billion Advanced $32 billion secured capital program • Placed ~$5.6 billion of projects into service through the first half of
Slide 5: Financial highlights – Three months ended June 30 (Non-GAAP)
Financial highlights – Three months ended June 30 (Non‐GAAP) Comparable Comparable Comparable funds earnings per common share* EBITDA* generated from operations* (Dollars) ($Millions) ($Millions) 16% increase 17% increase 14% increase 2,324 1.00 1,991 0.86 1,667 1,459 2018 2019 2018 2019 2018 2019 *
Slide 6: Natural Gas Pipelines recent developments
Natural Gas Pipelines recent developments Canadian Natural Gas Pipelines • Advancing $8.8 billion NGTL System expansion program that will add more than 3.0 Bcf/d of delivery capacity • Construction continues on the $6.2 billion Coastal GasLink project that will have an initial capacity of 2.1 Bcf/d
Slide 7: Liquids Pipelines recent developments
Liquids Pipelines recent developments • Assets continue to produce strong operating results • White Spruce pipeline placed in‐service • Keystone XL continues to advance • Received new Presidential Permit in March which supersedes the 2017 permit • Nebraska Supreme Court expected to reach a decision
Slide 8: Power and Storage recent developments
Power and Storage recent developments Napanee Power Plant (900 MW) • Commercial operations expected to commence by the end of 2019 • Total investment expected to be ~$1.8 billion Bruce Power • Unit 6 Major Component Replacement expected to begin in 2020 • Power price increased to ~$78 per MWh on Apr
Slide 9: Advancing $32 billion secured capital program through 2023
Advancing $32 billion secured capital program through 2023 Estimated Capital Expected Project Invested to Date* Cost* In‐Service Date* Sur de Texas US 1.6 US 1.6 2019 Napanee 1.8 1.7 2019 NGTL System 2.6 2.2 2019 Modernization II US 1.1 US 0.6 2019‐2020 Villa de Reyes US 0.9 US 0.7 2019‐2020 NGTL Sy
Slide 10: 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 * Annual rate based on third quarter dividend declared of $0.75 per share. 10
Slide 11: 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 second quarter 2019 • Demand for our services has never been greater Visible growth • Advancing $32 billion of secured grow
Slide 12: Don Marchand, Executive VP & CFO
Don Marchand Executive VP & CFO 12
Slide 13: Consolidated results of operations
Consolidated results of operations (millions of dollars, except per share amounts) Three months Six months ended June 30 ended June 30 2019 2018 2019 2018 Net Income Attributable to Common Shares 1,125 785 2,129 1,519 Specific items (net of tax): Gain on sale of Coolidge generating station (54) ‐ (5
Slide 14: Business segment results
Business segment results(1) (millions of dollars) Three months Six months ended June 30 ended June 30 2019 2018 2019 2018 Comparable EBITDA(2) Canadian Natural Gas Pipelines 528 545 1,084 1,039 U.S. Natural Gas Pipelines 857 704 1,829 1,508 Mexico Natural Gas Pipelines 141 142 287 302 Liquids Pipeli
Slide 15: Other income statement items
Other income statement items(1) (millions of dollars) Three months Six months ended June 30 ended June 30 2019 2018 2019 2018 Comparable EBITDA(2) 2,324 1,991 4,707 4,054 Depreciation and amortization (621) (570) (1,229) (1,105) Comparable EBIT(2) 1,703 1,421 3,478 2,949 Interest expense (588) (558)
Slide 16: Comparable distributable cash flow
Comparable distributable cash flow (millions of dollars, except per share amounts) Three months Six months ended June 30 ended June 30 2019 2018 2019 2018 Comparable Funds Generated From Operations(1) 1,667 1,459 3,490 3,070 Dividends on preferred shares (40) (39) (80) (78) Distributions paid to non
Slide 17: Funding program continued to advance in second quarter 2019
Funding program continued to advance in second quarter 2019 Strong, predictable and growing cash flow from operations • Comparable funds generated from operations of $1.7 billion in the quarter Access to capital markets on compelling terms • Issued $1.0 billion of 30‐year medium‐term notes at a fixe
Slide 18: Funding program outlook 2019-2021
Funding program outlook 2019‐2021 $Billions Numerous levers available to fund Secured Capital Program • Strong, predictable and growing cash flow from operations • Access to capital markets including: • Senior debt • Hybrid securities and preferred shares • Portfolio management • Dividend Reinvestme
Slide 19: Debt maturity profile 2019-2021
Debt maturity profile 2019‐2021 Debt maturities in home currency Total debt maturities of ~$7.2* billion $Billions Canadian equivalent over the three year 3 timeframe • Retired $113 million Canadian and $1.15 billion U.S. to date in 2019 2 Remaining refinancing requirement of ~$5.6* billion through
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 $32 billion secured Dividend raised 8.7% Numerous levers total shareholder to 2023 in February 2019 available to fund return since 2000 4.6% yield future growt
Slide 21: Question & answer period
Question & answer period 2) TC Energy
Slide 22: Second quarter 2019 conference call
Second quarter 2019 conference call August 1, 2019
Slide 23: Appendix – Reconciliation of non-GAAP measures
Appendix – Reconciliation of non‐GAAP measures (millions of dollars) Three months Six months ended June 30 ended June 30 2019 2018 2019 2018 Comparable EBITDA(1) 2,324 1,991 4,707 4,054 Depreciation and amortization (621) (570) (1,229) (1,105) Interest expense (588) (558) (1,174) (1,085) Allowance f
Slide 24: Appendix – Reconciliation of non-GAAP measures continued
Appendix – Reconciliation of non‐GAAP measures continued (millions of dollars) Three months Six months ended June 30 ended June 30 2019 2018 2019 2018 Net Cash Provided by Operations 1,722 1,805 3,671 3,217 Decrease in operating working capital (47) (361) (189) (154) Funds Generated from Operations(