Tc Energy Corporation · TSX:TRP
Tc Energy — Investor Day (November 2019)
113 slides from Tc Energy's investor day presentation, Nov 19, 2019
Slide 1: TC Energy Investor Day
TC Energy Investor Day November 19, 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: Strategic Overview
Strategic Overview Russ Girling President and Chief Executive Officer
Slide 4: Our long-term success is driven by our fundamental belief that …
Our long-term success is driven by our fundamental belief that … • Global energy demand, including the demand for natural gas and oil, will continue to grow • Our proven, low-risk business model will produce solid results during all phases of the economic cycle • Our broad network of high-quality, l
Slide 5: Proven capital allocation framework delivers results
Proven capital allocation framework delivers results ~40% Critical energy infrastructure assets generate stable, long-term cash flow streams ~60% Growing dividends Disciplined investment in supported by strong complementary low-risk assets earnings and cash flow coverage ratios Produced double-digit
Slide 6: Invested ~$100 billion in three core businesses since 2000
Invested ~$100 billion in three core businesses since 2000 2000: ~$20 billion total assets 2019: ~$100 billion total assets *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. **Represents c
Slide 7: Investment has created significant value
Investment has created significant value Dollars Dollars 7% 6% CAGR CAGR Substantial growth in earnings and cash flow per share *Comparable earnings per common share and comparable funds generated from operations per common share are non-GAAP measures. See the forward looking information and non-GAA
Slide 8: Low-risk business model has consistently produced results
Low-risk business model has consistently produced results Dollars MLP Oil Supported by distress price Strong business fundamentals collapse Shale Regulated assets Financial crisis revolution Long-term contracts IPP downfall Interest rate/inflation protection Limited commodity exposure Cr
Slide 9: Nineteen consecutive years of common share dividend increases
Nineteen consecutive years of common share dividend increases 7% CAGR Supported by growth in earnings and cash flow and strong coverage ratios
Slide 10: Performance has resulted in significant share price appreciation
Performance has resulted in significant share price appreciation Dollars Common share price - TSX 2019 14 per cent average annual total shareholder return since 2000 Source: FactSet data from January 1, 2000 to October 31, 2019
Slide 11: Superior total shareholder return
Superior total shareholder return Per cent 1126% 223% 204% 2019 Outperforming broader market Source: FactSet data from January 1, 2000 to October 31, 2019
Slide 12: A leading North American energy infrastructure company
A leading North American energy infrastructure company • One of North America’s largest natural gas pipeline networks • 92,600 km (57,500 mi) of pipeline • 653 Bcf of storage capacity • 23 Bcf/d; ~25% of continental demand • Premier liquids pipeline system • 4,900 km (3,000 mi) of pipeline • 590,000
Slide 13: Major 2019 Accomplishments
Major 2019 Accomplishments Generated record financial results through the first nine months • Comparable earnings were $3.11 per share, up 10 per cent • Comparable funds generated from operations of $5.3 billion, up 14 per cent Advanced $30 billion secured capital program • Expect to place ~$10
Slide 14: Six key strategic priorities
Six key strategic priorities Deliver Maximize Execute Advance Cultivate Maintain energy safely value of our $30 billion over $20 billion a portfolio of our financial and reliably, $100 billion secured capital of projects additional strength and every day asset base program under low-risk flexibility
Slide 15: Environmental, Social and Governance commitment
E S G Environmental, Social and Governance commitment Safety and reliability are critical priorities • Operating objectives, targets and results • Zero is real Long history of working collaboratively with stakeholders • Customers, landowners, Indigenous groups, governments, regulators and local comm
Slide 16: Delivering the energy people need, every day
E S G Delivering the energy people need, every day Investing over $1 billion annually in pipeline integrity Monitoring pipelines 24 hours a day from control centres Conducting over 100 emergency response training exercises each year Working with approximately 100,000 landowners Engaging with more th
Slide 17: Global energy demand forecast to grow through 2040
Global energy demand forecast to grow through 2040 *mtoe Oil Natural Gas Coal Renewables** Nuclear Solid Biomass ’17 ’25 ’40 ’17 ’25 ’40 ’17 ’25 ’40 ’17 ’25 ’40 ’17 ’25 ’40 ’17 ’25 ’40 Over half of global demand fulfilled by oil and natural gas through 2040 Source: IEA World Energy Outlook 2018, New
Slide 18: North American industry fundamentals through 2040
North American industry fundamentals through 2040 North American Natural Gas Demand North American Crude Oil Production, North American Power Capacity, and LNG Exports, 2015 and 2040* 2015 and 2040* 2015 and 2040* Bcf/d MMb/d GW Highlights the need for new energy infrastructure *Source: IEA World En
Slide 19: Asset footprint provides a strong competitive advantage
Asset footprint provides a strong competitive advantage Canadian Mainline is a critical NGTL System is uniquely conduit to eastern markets positioned over 924 Tcf of WCSB natural gas resources Bruce Power generates ~30% of Ontario’s power Keystone corridor provides a direct link to world’s largest C
Slide 20: Line of sight to over $50 billion of growth opportunities
Line of sight to over $50 billion of growth opportunities Natural Gas Pipelines Liquids Pipelines Power and Storage • NGTL expansions • Keystone XL • Bruce Power Life Extension • Columbia expansions • Grand Rapids Phase II • Other growth in contracted power • Coastal GasLink • Heartland Pipeline and
Slide 21: Dividend growth outlook through 2021
Dividend growth outlook through 2021 Annual growth of 8 to 10 per cent Supported by existing asset base and $30 billion secured capital program
Slide 22: Dividend growth outlook beyond 2021
Dividend growth outlook beyond 2021 5-7% per year • Consistent with long-term performance • Stemming from abundant organic growth opportunities • Financed using historical self-funding model • Transformational opportunities could supplement growth rate Combination of growth and yield has delivered a
Slide 23: Our Executive Leadership Team
Our Executive Leadership Team Stan Chapman Russ Girling Don Marchand Executive VP and President, President and Chief Executive Officer Executive VP and Chief Financial Officer U.S. Natural Gas Pipelines Patrick Keys Paul Miller 2.50 Wendy Hanrahan 2.26 Executive VP, Stakeholder Relations Executive V
Slide 24: Strategic Overview
Strategic Overview Russ Girling President and Chief Executive Officer
Slide 25: Canadian Natural Gas Pipelines
Canadian Natural Gas Pipelines Tracy Robinson Executive Vice-President and President, Canadian Natural Gas Pipelines
Slide 26: Unparalleled footprint is a competitive advantage
Unparalleled footprint is a competitive advantage High-quality asset footprint cannot be replicated • 92,600 km (57,500 mi) of natural gas WCSB pipelines • 653 Bcf of storage capacity Access to abundant, cost-competitive supply • Assets on top of two of the most prolific, low-cost basins in North Am
Slide 27: Abundant, low-cost supply
Abundant, low-cost supply WCSB 2007 - 165 Tcf • North American resource estimate has 2019 - 924 Tcf grown over 250% since 2007 • Over 100 years of recoverable supply Rockies / San Juan 2007 - 354 Tcf • WCSB and Appalachia are the fastest- 2019 - 632 Tcf Appalachia growing production basins 2007 - 95
Slide 28: System connects WCSB supply to key domestic and global markets
System connects WCSB supply to key domestic and global markets WCSB supply Markets for WCSB Gas LNG export under construction and in development Abundant, low-cost WCSB supply is highly competitive in North America and globally
Slide 29: Transformational shift in Canadian Natural Gas Pipelines
Transformational shift in Canadian Natural Gas Pipelines 2010 2019 2023+ NGTL and Mainline underutilized Increasing WCSB competitiveness High-quality expansion • Delivered 9.4 Bcf/d to market • Delivered 12 Bcf/d to market • Connecting 5.6 Bcf/d of new • $11.5 billion investment base • $15.7 billion
Slide 30: 2019 – Continuing to deliver on our commitments
2019 – Continuing to deliver on our commitments Execute Maximize Cultivate $17 billion capital program Improving utilization of our assets Continued growth in our capacity to Safe and reliable operations Solidifying regulatory framework access market Advancing 3.5 Bcf/d NGTL program Pipeline utiliza
Slide 31: Capital expansion program adding egress for WCSB gas
Capital expansion program adding egress for WCSB gas NGTL Coastal $10.0 billion GasLink Maintenance capital +2.1 Bcf/d Intra Basin ~$0.6 billion/year $6.6 billion +1.5 Bcf/d West Path Canadian +0.7 Bcf/d Mainline +0.5 Bcf/d East Gate $0.4 billion +1.3 Bcf/d $17 billion capital program provides 5.6 B
Slide 32: Expanding WCSB access to market – NGTL
Expanding WCSB access to market – NGTL • $10 billion capital program underway • Expand access to markets and reduce system constraints • Increase access to low-cost North Montney supply • Continue to facilitate growth of local markets • Advance rate design and revenue requirement • Portfolio of pred
Slide 33: Expanding WCSB access to market – Coastal GasLink
Expanding WCSB access to market – Coastal GasLink • LNG Canada phase 1 capacity of 2.1 Bcf/d, $6.6 billion capital cost • LNG Canada phase 2 expansion potential to 5 Bcf/d • Construction underway • $700 million invested to date • Advancing sale of 75% equity interest and project debt financing BC Fi
Slide 34: Partnering with the community – Coastal GasLink
Partnering with the community – Coastal GasLink • High degree of alignment and partnerships with communities and Indigenous groups • Project agreements with elected leadership of all 20 First Nations along the route • Targeting $1 billion in local and Indigenous spend, including $620 million in desi
Slide 35: Critical conduit to Eastern markets – Canadian Mainline
Critical conduit to Eastern markets – Canadian Mainline • $400 million capital expansion • Strong demand for Mainline and Eastern Triangle capacity • Reclaiming eastern market share • Contract term increasing • Collaborating with customers to Mainline design post-2020 service framework Eastern Trian
Slide 36: Future growth opportunities
Future growth opportunities 1 2 3 4 5 6 Opportunities under development Positioned to capture 1 Intra-basin 5 Incremental market access in Canada and the U.S. high-quality growth 2 Merrick Mainline 6 Mainline/PNGTS Expansion 3 Access to West Coast LNG 4 Access to East Coast LNG
Slide 37: Average Investment Base and Net Income outlook
Average Investment Base and Net Income outlook* $Billions $Billions 9% CAGR 9% CAGR Significant growth – positioned for continued success *See the forward looking information and non-GAAP measures slide at the front of this presentation for more information.
Slide 38: Looking ahead
Looking ahead Execute Maximize Cultivate Operate safely and reliably Optimize utilization Expand WCSB reach Execute NGTL and Mainline capital Complete regulatory applications Leverage Canada/U.S. footprint program Develop flexible service offerings Secure the next wave of growth Construct Coastal Ga
Slide 39: Canadian Natural Gas Pipelines
Canadian Natural Gas Pipelines Tracy Robinson Executive Vice-President and President, Canadian Natural Gas Pipelines
Slide 40: U.S. Natural Gas Pipelines
U.S. Natural Gas Pipelines Stan Chapman Executive Vice-President and President, U.S. Natural Gas Pipelines
Slide 41: U.S. Natural Gas Pipelines system overview
U.S. Natural Gas Pipelines system overview Broad national network • ~31,000 miles (50,000 km) of FERC-regulated pipelines with operations across 40 states • 535 Bcf of regulated storage • Serves ~25% of U.S. natural gas demand Diversified assets with strong base in advantaged basins • Best in class
Slide 42: Extensive asset footprint over prolific natural gas supplies
Extensive asset footprint over prolific natural gas supplies U.S. and Canadian Reserves Lower 48 Production (Bcf/d) Actual Forecast WCSB 2007 - 165 Tcf 2019 - 924 Tcf Appalachia 2007 - 95 Tcf 2019 - 1,456 Tcf Rockies / San Juan 2007 - 354 Tcf 2019 - 632 Tcf Mid-Continent / Permian 2007 - 311 Tcf Gul
Slide 43: Natural gas consumption continues to grow
Natural gas consumption continues to grow Total U.S. Energy Consumption Global LNG Supply Growth (Bcf/d) Oil Russia Natural Gas Coal Renewables Global LNG Growth Nuclear North America will provide over 45% of the world’s incremental LNG supply growth through 2035 Source: TC Energy, U.S. Energy Infor
Slide 44: 2019 – Continued to build on success through diversified portfolio
2019 – Continued to build on success through diversified portfolio Placed US$4.5 billion of growth projects in-service in 2019 • Completed US$7.9 billion growth program generating EBITDA in excess of US$1 billion Modernization II Program • Completed Year 2 of US$1.1 billion Modernization II program
Slide 45: Pipelines experiencing record demand
Pipelines experiencing record demand Pipeline* Contracted Capacity GTN 100% Northern Border 100% Millennium 100% Columbia Gulf 100% Portland 100% North Baja 100% ANR 100% Tuscarora 100% Columbia Gas 93% Iroquois 83% Great Lakes 52% Bison 37% 93% of revenues from long-term, take-or-pay contracts Cros
Slide 46: Sustainable value driven by new growth projects
Sustainable value driven by new growth projects Capacity Capital Cost Projects Supply / Demand (Bcf/d) (US$Millions) Projects in-service since 2016 7.7 7,860 Buckeye XPress Supply 0.3 195 Westbrook XPress(1) Demand 0.1 125 Grand Chenier XPress Demand 1.1 225 Louisiana XPress Demand 0.8 385 East Late
Slide 47: Accessing global demand via LNG exports
Accessing global demand via LNG exports LNG Facilities supplied by TC Energy: Operational LNG Facility LNG Facility under construction LNG Facility under development (FID pending) Our U.S. pipelines provide supply to five existing and three planned LNG export facilities Source: TC Energy
Slide 48: Key focus areas and opportunities in 2020 and beyond
Key focus areas and opportunities in 2020 and beyond Ensuring safe and reliable operations 8 • Implement PHMSA’s Gas Transmission Rules 3 1 • Provide direction on Pipeline Safety Reauthorization Act 4 6 Optimizing our base business 2 9 6 • Exercise cost and capital discipline • Increase capacity via
Slide 49: Comparable EBITDA outlook
Comparable EBITDA* outlook US$Billions 22% CAGR Transformative growth – positioned for continued success * 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 50: Looking ahead
Looking ahead Execute Maximize Cultivate Operate safely and reliably Exercise cost and capital discipline Secure next wave of growth Continue executing near-term Small-scale debottlenecks and opportunities growth program interconnects Continue to capture synergies with Implement further Modernizatio
Slide 51: U.S. Natural Gas Pipelines
U.S. Natural Gas Pipelines Stan Chapman Executive Vice-President and President, U.S. Natural Gas Pipelines
Slide 52: Mexico Natural Gas Pipelines
Mexico Natural Gas Pipelines Francois Poirier Executive Vice-President, Corporate Development and Strategy, and President, Power & Storage and Mexico
Slide 53: Mexico – solid position and growing
Mexico – solid position and growing • Five revenue-generating pipelines • Tamazunchale Guadalajara l • Mazatlán Topolobampo l • Sur de Texas • Villa de Reyes expected to enter service in 2020 • Tula expected to enter service two years after successful Indigenous consultations • Portfolio value incre
Slide 54: 2019 Accomplishments
2019 Accomplishments • Mexico’s gas supply grew by 40% when Sur de Texas began commercial operations in September • Positive settlement on Sur de Texas includes 10-year contract extension • US$900 million capital program for Villa de Reyes pipeline 90% complete • Negotiations with CFE and Mexican Go
Slide 55: Mexico supply and demand forecast
Mexico supply and demand forecast Natural Gas Demand through 2030E (Bcf/d) Natural Gas Supply through 2030E (Bcf/d) Gas-fired power generation increases from 4.4 to 5.8 Domestic production increases from 2.6 to 3.6 Industrial/other power generation increases from 3.6 to 4.7 Pipeline imports from U.S
Slide 56: Growth potential
Growth potential Short-term growth • Increasing capacity through efficient expansions • Connecting new demand centres through extensions • Central: Abundant U.S. gas enabling industrial and power generation fuel switching • Northwest: Only pipeline system in the region • Ancillary services including
Slide 57: Comparable EBITDA outlook
Comparable EBITDA* outlook US$Billions 19% CAGR Positioned for future growth *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 58: Looking ahead
Looking ahead Deliver Maximize Execute Cultivate Operate safely and Advance and finalize Complete construction of Pursue organic growth reliably commercial negotiations Villa de Reyes project opportunities with CFE on Tula and with a three-phased Assess value chain Villa de Reyes 2020 in-service pro
Slide 59: Mexico Natural Gas Pipelines
Mexico Natural Gas Pipelines Francois Poirier Executive Vice-President, Corporate Development and Strategy, and President, Power & Storage and Mexico
Slide 60: Liquids Pipelines
Liquids Pipelines Paul Miller Executive Vice-President, Technical Centre and President, Liquids Pipelines
Slide 61: Asset overview – connecting North American liquids supply to markets
Asset overview – connecting North American liquids supply to markets Keystone Pipeline System • Transports ~20% of Western Canadian crude oil exports • Delivers U.S. production to market • Market access to ~6 million Bbl/d of refining capacity Intra-Alberta pipelines • Crude oil pipeline gathering a
Slide 62: Assets deliver high-quality EBITDA
Assets deliver high-quality EBITDA • Keystone: >90% contracted • Marketlink: ~80% contracted • Grand Rapids: recovery through base contracts • Northern Courier: 100% contracted • White Spruce: 100% contracted • Future growth opportunities to leverage base systems Long-term contract base with future
Slide 63: Canadian oil is in the world’s best interest
Canadian oil is in the world’s best interest ESG scores (aggregated) Global aggregated ESG scores and oil reserves Billion Bbls Aggregated ESG scores Proven oil reserves Canadian-produced oil, from world’s third-largest reserves, is ESG positive and has competitive breakeven supply costs Source: ESG
Slide 64: North American crude oil displacing Latin American production
North American crude oil displacing Latin American production Declining Latin American production will support WCSB market share growth in the U.S. Gulf Coast (USGC) U.S. HSR Refining capacity North American crude oil production growth expected to displace ~2 million Bbl/d of imports by 2050 Source:
Slide 65: Strong demand for Canadian crude oil in key refining markets
Strong demand for Canadian crude oil in key refining markets U.S. Heavy Crude Oil Imports in Key Markets • Significant opportunity for Canadian heavy crude in USGC and other markets • Declining Latin American production • Oil sands responsible, sustainable and globally cost competitive • Value of TC
Slide 66: Light Tight Oil (LTO) production growth
Light Tight Oil (LTO) production growth • Permian and Bakken LTO lead U.S. production growth • LTO destined for export markets • ~2 million Bbl/d of new Permian pipeline infrastructure impacting market fundamentals Million Bbl/d Light Tight Oil Source: EIA Annual Energy Outlook 2019 Source: U.S. Ene
Slide 67: Maximizing Marketlink system capabilities
Maximizing Marketlink system capabilities • Optimized throughput and captured Capacity Spot Spot market opportunity in 2018 and 2019 Spot Long Haul Contracts Long Haul • 2020 fundamentals will result in lower Long Haul Contracts Contracts contracted volumes • System positioned to respond to Short Ha
Slide 68: Marketlink well positioned for shifting USGC fundamentals
Marketlink well positioned for shifting USGC fundamentals • Resilient U.S. Gulf Coast heavy crude oil demand • New Permian supply directed to U.S. Gulf Coast • Incremental supply into Cushing Connecting multiple supply sources to USGC
Slide 69: Well positioned for strong market fundamentals
Well positioned for strong market fundamentals Maximize value of existing assets Strategic corridor • Proximate to growing supply basins • Connected to key U.S. markets Leverage footprint • Enhance connectivity to expand supply and market access • Re-purpose existing infrastructure Significant growt
Slide 70: Alberta regional growth
Alberta regional growth White Spruce Pipeline • 72-km pipeline to connect CNQ Horizon crude oil production • $200 million investment • Completed on time and on budget Northern Courier • Successfully monetized portion of asset for $1.15 billion of proceeds • Retained operatorship Market access for Al
Slide 71: Advancing deep portfolio of growth opportunities
Advancing deep portfolio of growth opportunities Fully approved by regulator • Grand Rapids Phase II • Heartland Pipeline • Keystone Hardisty Terminal Awaiting final permits • Keystone XL Contiguous differentiated path from supply to market
Slide 72: Progressing Keystone XL
Progressing Keystone XL Canadian NEB approved U.S. federal permit status • New Presidential Permit issued • Updated SEIS issued • Other federal permits expected in early 2020 State-level permit status • Nebraska Public Service Commission decision upheld by Nebraska Supreme Court • All state-level pe
Slide 73: Comparable EBITDA outlook
Comparable EBITDA* outlook $Billions 4-7% CAGR • ~80% of EBITDA contracted • Permian infrastructure buildout narrowing differentials • 2020-2022 demand impact from market dynamics * Comparable EBITDA is a non-GAAP measure. See the forward looking information and non-GAAP measures slide at the front
Slide 74: Looking ahead
Looking ahead Deliver Maximize Advance Cultivate Provide safest, most Continue enhancement of Keystone XL under Grow sustainable and reliable and lowest- base business development contracted EBITDA emission liquids Increase connectivity transportation Deliver superior long-term shareholder returns
Slide 75: Liquids Pipelines
Liquids Pipelines Paul Miller Executive Vice-President, Technical Centre and President, Liquids Pipelines
Slide 76: Power and Storage
Power and Storage Francois Poirier Executive Vice-President, Corporate Development and Strategy, and President, Power & Storage and Mexico
Slide 77: Power and Storage asset overview
Power and Storage asset overview Power • 10 power plants* • Approximately 6,000 MW* • Portfolio of low-cost, low-emission, baseload generation • Underpinned by long-term contracts Storage • Alberta non-regulated natural gas storage facilities • 118 Bcf of capacity • Approximately one-third of the pr
Slide 78: Assets deliver high-quality EBITDA
Assets deliver high-quality EBITDA Long-term contracted Plant Counterparty Contract expiry capacity (MW)* Bruce Power Units 1-8 3,109 IESO Up to 2064 Bécancour 550 Hydro-Québec 2026 Alberta plants 127 various 2022-2027 Grandview 90 Irving Oil 2024 Plant held for sale** 20 Years from Napanee*** 900 I
Slide 79: 2019 Accomplishments
2019 Accomplishments • Solid financial results • Advanced Bruce Power life extension program • Napanee construction 99% complete • Expected in-service in the first quarter of 2020 • Reached agreement to sell Halton Hills, Napanee and the 50% interest in Portlands Energy Centre for proceeds of ~$2.9
Slide 80: Bruce Power overview
Bruce Power overview • 6,400 MW or ~30% of Ontario’s needs • 48.4% ownership interest • Power sales contracted with Ontario IESO through 2064 • Ontario Power Generation responsible for spent fuel and decommissioning liabilities • Successfully completed collective bargaining negotiation with Society
Slide 81: Bruce Power Life Extension Program
Bruce Power Life Extension Program • Major Component Replacement (MCR) and Asset Management (AM) on schedule and on budget • Unit 6 MCR to begin in January 2020 • MCR and AM capital reflected in power price • Price increased from ~$68/MWh to ~$78/MWh in April 2019 • Future MCR-related price adjustme
Slide 82: Bruce Power financial contribution
Bruce Power financial contribution • Robust risk-adjusted returns on $8 billion life extension program • Steady equity income through the first four MCRs as price increases offset lower production • Significant increase in equity income and cash flow as generation increases beyond the fourth MCR due
Slide 83: Power market fundamentals – capacity mix for North America
Power market fundamentals – capacity mix for North America • Natural gas, solar, wind and batteries increase • Coal and oil diminish • Demand growth forecast based on economic growth, demographics, electrification, energy efficiency and distributed energy resources Electricity grid shifting to lower
Slide 84: Power and Storage growth opportunities
Power and Storage growth opportunities • Continue to be significant private sector power generator in Canada • Exploring new low-risk investment opportunities within core North American electricity markets • Increasing fuel and technology diversity • Underwriting renewable PPAs • Waste heat on the e
Slide 85: Comparable EBITDA outlook
Comparable EBITDA* outlook $Billions Sale of Assets** 6% CAGR Solid base with long-term future growth in earnings *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. **U.S. NE Power generati
Slide 86: Looking ahead
Looking ahead Execute Advance Cultivate Operate safely and reliably Five additional Bruce MCRs under Explore low-risk North American Optimize operations development investment opportunities Bring Napanee to commercial Increase fuel and technology operation diversity Complete sale of Ontario natural
Slide 87: Power and Storage
Power and Storage Francois Poirier Executive Vice-President, Corporate Development and Strategy, and President, Power & Storage and Mexico
Slide 88: Finance
Finance Don Marchand Executive Vice-President and Chief Financial Officer
Slide 89: Core principles
Core principles Adherence to Long-term view grounded in established, conservative risk Simple model and fundamentals preferences corporate structure Footprint is irreplaceable Assets are resilient and earn Business is understandable appropriate returns Capital allocation balances Financial strength
Slide 90: 2019 Scorecard
2019 Scorecard Robust ~$10 billion Monetized Debt to Coastal Dividend ESG reporting operating and of assets $6.3 billion of EBITDA GasLink Reinvestment reinforced financial placed into mature assets run-rate in the funding Program with strong performance service “high fours” on track (DRP) story to
Slide 91: 2019 Funding complete
2019 Funding 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 in first
Slide 92: Balanced program has funded $72 billion of capital needs
Balanced program has funded $72 billion of capital needs $Billions 2016-2019E Portfolio Management Acquisitions Discrete Equity ATM Debt Maturities Hybrid Securities & DRP Senior Debt, Preferred Shares Commercial Paper & Cash Capital Program Funds Generated from Operations Dividends & NCI Distributi
Slide 93: Deleveraging while growing per share earnings
Deleveraging while growing per share earnings Times Dollars “Low Fours” “High Fours” Target credit metrics achieved with simultaneous improvement in quantum and quality of EPS *Comparable EPS is a non-GAAP measure. See the forward looking information and non-GAAP measures slide at the front of this
Slide 94: Diversified portfolio of critical energy infrastructure
Diversified portfolio of critical energy infrastructure 2019E Comparable EBITDA* Multiple business lines Foreign Exchange • EBITDA ~60% USD and ~40% CAD • Significant U.S. dollar debt and associated interest serve as natural hedge • Residual exposure actively managed one-year forward Interest Ra
Slide 95: Advancing $30 billion secured capital program through 2023
Advancing $30 billion secured capital program through 2023 Estimated Capital Expected Project Invested to Date* Cost* 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 96: Secured growth program very high-quality and long duration
Secured growth program very high-quality and long duration Average contract term (years) $2.2 billion Regulated Rate Bases $6.6 US$1.7 billion billion US$1.5 (100%) billion $10.4 billion NGTL System and U.S. Natural Gas Coastal GasLink Mexico Natural Bruce Power Canadian Mainline Pipelines Gas Pipel
Slide 97: Capital expenditure outlook 2020-2022
Capital expenditure outlook 2020-2022 $Billions • Secured growth portfolio 7.2 • Coastal GasLink contributions 6.2 assume 25% ownership and project-level construction 4.6 financing • Maintenance capital • ~90% has opportunity to earn a return on and of capital through current and future tolls • Capi
Slide 98: Funding program outlook 2020-2022
Funding program outlook 2020-2022 $Billions Numerous levers available Debt issuance, • Strong, predictable and growing cash commercial paper and other flow from operations Dividends, Ontario natural distributions and gas-fired power plants • Solid access to capital markets other • Portfolio manageme
Slide 99: Debt maturity profile 2020-2022
Debt maturity profile 2020-2022 $Billions Solid liquidity and market access • ~$10 billion of committed and undrawn credit lines • Well supported commercial paper programs • Canada – $2.0 billion • U.S. – US$3.5 billion • Shelf facilities in place which allow for expedited access to global capital m
Slide 100: Comparable EBITDA outlook 2015-2022E
Comparable EBITDA* outlook 2015-2022E $Billions 10+ 9.3 Power and Storage 2023+ Normalizing items Liquids Pipelines • Coastal GasLink • Asset sales Mexico Natural Gas Pipelines • NGTL System 2023 • Bruce Power Unit 6 • Bruce Power Unit 6 5.9 • Volumetric and commodity variability Power and Storage •
Slide 101: Stability and longevity of core asset base
Stability and longevity of core asset base Comparable EBITDA* • Five growth platforms ($Billions) • Balance sheet strength • Supportive fundamentals • Irreplaceable corridors ~$10 billion of base EBITDA visible through 2030 • Completion of $30 billion secured growth program • Maintenance capital • N
Slide 102: Continuing long track record of dividend growth
Continuing long track record of dividend growth 5-7% Expected organic growth per year 8-10% 2021+ CAGR 3.00 • $30 billion secured growth program • Further “in-corridor” expansions 7% • $20 billion development portfolio 2.08 CAGR • Keystone XL • Alberta liquids • Further Bruce refurbishments • Merric
Slide 103: Value proposition
Value proposition Business model is simple, understandable and proven Strong base of visible multi-decade, low- variability earnings streams Positioned to be top credit in sector Macro environment constructive Irreplaceable corridors poised to capture disproportionate share of growth Adh
Slide 104: Finance
Finance Don Marchand Executive Vice-President and Chief Financial Officer
Slide 105: Closing Remarks
Closing Remarks Russ Girling President and Chief Executive Officer
Slide 106: A leading North American energy infrastructure company
A leading North American energy infrastructure company Key takeaways • Proven strategy with a low-risk business model • Delivered 14% average annual total shareholder return since 2000 • Business performing very well • Record financial results expected again in 2019 • Asset footprint provides multip
Slide 107: Closing Remarks
Closing Remarks Russ Girling President and Chief Executive Officer
Slide 108: TC Energy Price Earnings multiple
TC Energy Price Earnings multiple 18.5* 16.1 14.0 2019 Trading below historic average multiple despite record performance Source: FactSet data from January 1, 2000 to October 31, 2019 *19 point year-end average
Slide 109: Historic yields
Historic yields 2000 5.4% 5.1% 4.5% 4.7% 1.7% 1.4% 2019 The spread between Government yields and our dividend yield has widened significantly Source: FactSet data from January 1, 2000 to October 31, 2019
Slide 110: Appendix – Reconciliation of Non-GAAP Measures
Appendix – Reconciliation of Non-GAAP Measures
Slide 111: Appendix – Reconciliation of non-GAAP measures
Appendix – Reconciliation of non-GAAP measures (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 Midstre
Slide 112: 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 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
Slide 113: 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