Slide 1: Fourth quarter 2020 conference call
Fourth quarter 2020 conference call February 18, 2021
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: François Poirier, President & CEO
François Poirier President & CEO 3
Slide 4: 2020 accomplishments
2020 accomplishments Continued to reliably deliver essential energy services across North America • Despite the challenges brought about by COVID-19, our assets have been largely unimpacted • Flows and utilization levels remain largely in line with historical norms, underscoring the importance of ou
Slide 5: Financial highlights – Year ended December 31 (Non-GAAP)
Financial highlights – Year ended December 31 (Non-GAAP) Comparable Comparable Comparable funds earnings per common share* EBITDA* generated from operations* (Dollars) ($Millions) ($Millions) *Comparable earnings per common share, comparable EBITDA and comparable funds generated from operations are
Slide 6: Common share dividend increased 7.4 per cent over 2020
Common share dividend increased 7.4 per cent over 2020 Declared a first quarter 2021 dividend of $0.87 per share equivalent to $3.48 per share annually * Annualized based on first quarter dividend declared of $0.87 per share Twenty-first consecutive annual increase in the dividend 6
Slide 7: Canadian Natural Gas Pipelines recent developments
Canadian Natural Gas Pipelines recent developments NGTL System • Transported an average of 12.1 Bcf/d in 2020 • Placed $3.4 billion of growth projects into service • Continue to advance a $6.7 billion capital program that will add 3.2 Bcf/d of market access by 2024 Canadian Mainline • Deliveries ave
Slide 8: U.S. Natural Gas Pipelines recent developments
U.S. Natural Gas Pipelines recent developments Achieved record throughput in 2020 despite COVID-19 • Broad national network serves ~27% of U.S. demand Modernization ll program and BXP project completed • ~US$1.9 billion of assets placed into service US$0.9 billion of growth projects added to our bac
Slide 9: Mexico Natural Gas Pipelines recent developments
Mexico Natural Gas Pipelines recent developments Five pipelines in operation – all underpinned by long-term, take-or-pay contracts • Sur de Texas, Tamazunchale, Mazatlán, Guadalajara and Topolobampo Villa de Reyes under construction • Phased in-service delayed due to COVID-19 • Construction expected
Slide 10: Liquids Pipelines recent developments
Liquids Pipelines recent developments Produced solid results despite lower uncontracted volumes on Keystone and reduced contributions from liquids marketing • Strategic corridor to key markets • Keystone System is underpinned by long-term contracts for 94% of long-haul capacity Keystone XL Pipeline
Slide 11: Power and Storage recent developments
Power and Storage recent developments Bruce Power • Operating units continue to deliver strong results • Unit 6 MCR and Asset Management program continues to advance – ~$2.6 billion to be invested through 2024 • Unit 3 MCR expected to reach FID and submit basis of estimate to the Ontario IESO in fou
Slide 12: Advancing $20 billion secured capital program through 2024
Advancing $20 billion secured capital program through 2024 Estimated Invested to Expected Project Capital Cost* Date* In-Service Date* NGTL System 1.4 0.9 2021 Villa de Reyes US 0.9 US 0.8 2021 NGTL System 3.1 0.1 2022 Other Liquids Pipelines 0.1 - 2022 Coastal GasLink** 0.2 0.2 2023 NGTL System 1.7
Slide 13: Vast opportunity set the backdrop for continued disciplined growth
Vast opportunity set the backdrop for continued disciplined growth Unparalleled demand for infrastructure under all energy mix scenarios Today’s needs Low-carbon future Projects under Electrification Bruce Power MCR development of fleet and AM programs $20 billion Renewables building on Highly-execu
Slide 14: Dividend growth outlook
Dividend growth outlook $3.48* 5-7% Expected future growth 7% CAGR • $20 billion secured capital program • Robust development portfolio • Irreplaceable asset footprint driving in-corridor expansions • Deep capabilities and proven origination abilities • Growth rate will depend on project $0.80 mix,
Slide 15: Key takeaways
Key takeaways Proven strategy – low risk business model • ~95% of comparable EBITDA from regulated assets and/or long-term contracts Visible growth • $20 billion of secured growth projects advancing • More than $8 billion of projects under development • Numerous other organic growth opportunities ex
Slide 16: Don Marchand, Executive VP, Strategy & Corporate Development and CFO
Don Marchand Executive VP, Strategy & Corporate Development and CFO 16
Slide 17: Consolidated results of operations
Consolidated results of operations (millions of dollars, except per share amounts) Three months ended December 31 Year ended December 31 2020 2019 2020 2019 2020 2019 2020 2019 Per Common Share Per Common Share Net Income Attributable to Common Shares 1,124 1,108 $1.20 $1.18 4,457 3,976 $4.74 $4.28
Slide 18: Business segment results
Business segment results(1) (millions of dollars) Three months ended December 31 Year ended December 31 2020 2019 2020 2019 Comparable EBITDA(2) Canadian Natural Gas Pipelines 682 618 2,566 2,274 U.S. Natural Gas Pipelines 919 855 3,638 3,480 Mexico Natural Gas Pipelines 166 165 786 605 Liquids Pipe
Slide 19: Other income statement items
Other income statement items(1) (millions of dollars) Three months ended December 31 Year ended December 31 2020 2019 2020 2019 Comparable EBITDA(2) 2,323 2,315 9,351 9,366 Depreciation and amortization (652) (625) (2,590) (2,464) Comparable EBIT(2) 1,671 1,690 6,761 6,902 Interest expense (530) (58
Slide 20: Funding program continued to advance in fourth quarter
Funding program continued to advance in fourth quarter Resilient and predictable comparable funds generated from operations • $2.1 billion in the fourth quarter • Reached a record $7.4 billion for the year representing a 4 per cent increase over 2019 Achieved targeted credit metrics with Debt-to-EBI
Slide 21: Funding program outlook 2021-2023
Funding program outlook 2021-2023 $Billions Numerous levers in place/available • Strong, predictable cash flow from operations • Access to capital markets on compelling terms • Coastal GasLink effectively funded through joint venture partnership and project-level construction facilities • Expected K
Slide 22: 2021 Comparable earnings per share and capital spending outlook
2021 Comparable earnings per share and capital spending outlook Canadian Natural Higher due to growth in the average investment base of the NGTL System, higher incentive earnings from the Gas Pipelines Canadian Mainline and increased Coastal GasLink development fee revenue U.S. Natural Higher as a r
Slide 23: Delivering long-term shareholder value
Delivering long-term shareholder value Track Visible Attractive, growing Strong record growth dividend financial position 12% average $20 billion secured 6.2% yield Numerous levers annual total through 2024 5-7% expected available to fund shareholder return future growth Vast in-corridor future grow
Slide 24: Question & answer period
Question & answer period e) TC Energy UNITED STATES 24
Slide 25: Fourth Quarter 2020 conference call
Fourth Quarter 2020 conference call February 18, 2021
Slide 26: Appendix – Reconciliation of non-GAAP measures
Appendix – Reconciliation of non-GAAP measures (millions of dollars) Three months ended December 31 Year ended December 31 2020 2019 2020 2019 Comparable EBITDA(1) 2,323 2,315 9,351 9,366 Depreciation and amortization (652) (625) (2,590) (2,464) Interest expense (530) (586) (2,228) (2,333) Allowance
Slide 27: Appendix – Reconciliation of non-GAAP measures continued
Appendix – Reconciliation of non-GAAP measures continued (millions of dollars) Three months ended December 31 Year ended December 31 2020 2019 2020 2019 Net Cash Provided by Operations 1,939 1,826 7,058 7,082 Increase/(decrease) in operating working capital 140 36 327 (293) Funds Generated from Oper