News Release – TC Energy Corporation (TSX, NYSE: TRP) (TC Energy or
the Company) will host its Investor Day today. The event will
outline TC Energy’s strategic vision and growth outlook,
highlighting the Company's position as a leading North American
energy infrastructure company. François Poirier, TC Energy’s
President and Chief Executive Officer commented, "With natural gas
and electricity projected to drive 75 per cent of the growth in
final energy consumption through 2035, TC Energy’s portfolio of
natural gas and power assets strategically align with the vast
opportunity we are seeing across our North American footprint." He
continued, "by focusing on safety, operational excellence,
disciplined capital allocation, and maximizing the value of our
assets, TC Energy will continue to deliver solid growth, low risk
and repeatable performance.”
We have now aligned our portfolio across complementary
businesses, natural gas and power, where wide-scale electrification
is a significant common driver of future demand growth. Led by a
three-fold increase in LNG exports, strong growth in power
generation driven by coal retirements and data centre demand, our
forecast shows North American natural gas demand increasing by
nearly 40 Bcf/d by 2035. Our assets have a pivotal role in the
delivery of reliable, affordable, and sustainable energy, as
evidenced by approximately 13 Bcf/d of projects currently in
development.
Reflecting this opportunity, today we are announcing four new
growth projects across our portfolio with a weighted average
build multiple(2) expected to range near the midpoint of 5 to 7
times.
- We have sanctioned two projects on our Columbia Gulf System:
the US$0.4 billion Pulaski Project and the US$0.4 billion Maysville
Project. These mainline extension projects off Columbia Gulf will
facilitate full coal-to-gas conversion at two existing power plants
and provide supply for incremental gas-fired generation.
Underpinned by 20 year take-or-pay contracts, each project will
provide 0.2 Bcf/d of capacity, with estimated in-service dates in
2029. The opportunity for coal-to-gas conversion is significant,
with nine gigawatts of coal-fired power generation slated to retire
by 2031 within 15 miles of our assets.
- In response to growing peak day requirements and reliability
needs from LDC customers, we have sanctioned the US$0.3 billion
Southeast Virginia Energy Storage Project. This is an LNG peaking
facility in southeast Virginia that will serve an existing LDC's
growing winter peak day load and mitigate its peak day pricing
exposure, as well as increase operational flexibility on a critical
part of the Columbia Gas system. The 0.1 Bcf/d deliverability
project has a targeted in-service date of 2030. This project
furthers our position as one of the largest natural gas storage
operators in North America.
- With electricity demand in the province of Ontario expected to
increase 75 per cent by 2050, we are pleased to announce that Bruce
Power is progressing with Stage 3a of Project 2030 which will
provide incremental capacity of approximately 90 MW at the site. TC
Energy’s share of the capital required is approximately $175
million. Bruce Power will not be requesting an incremental capital
call for this stage. By optimizing its existing Units through this
program, when complete, Project 2030 is expected to increase the
Bruce Power site peak output to 7,000 MW. All of this output will
be sold under Bruce Power’s long-term contract with the IESO.
Coastal GasLink LP (CGL) has also executed a commercial
agreement with LNG Canada and CGL customers that declares pipeline
commercial in-service for the pipeline, allowing for the collection
of tolls from customers retroactive to Oct. 1, 2024.
- As part of the agreement, TC Energy
will receive a one-time payment of $199 million, in recognition of
the completion of certain work and settlement of final costs. In
line with the terms of the agreement, this payment is expected to
be received three months after LNGC declares in-service, but no
later than Dec. 15, 2025. The final project costs remain within the
approximately $14.5 billion cost estimate. Coastal GasLink LP
continues to pursue cost recoveries from contractors through
various proceedings, and while we are unable to quantify with any
certainty, expect these efforts are likely to result in net
recoveries. This is another important milestone in support of LNG
Canada’s commissioning and safe start-up activities. As LNG Canada
has indicated, it remains on track to deliver first cargoes by the
middle of 2025.
By focusing on a clear set of strategic priorities that
emphasize safety, operational excellence and project execution, TC
Energy is poised to deliver significant value. Our $32 billion
sanctioned capital program, utility-like asset base and disciplined
strategy provide visibility to organically deliver an expected
above-average comparable EBITDA growth rate of approximately five
to seven per cent through 2027. Approximately 97 per cent of our
comparable EBITDA outlook continues to be underpinned by
rate-regulation and/or long-term take-or-pay contracts. We will
continue to look for ways to high-grade projects, optimize capital
expenditures and deliver strong project execution to further
enhance this solid, low-risk growth profile.
TC Energy’s Investor Day event is scheduled to begin at 8 a.m.
EST (6 a.m. MST) on Nov. 19, 2024. Connect to the live event
webcast by registering through the TC Energy website Investors
section, Investor Day 2024 (tcenergy.com) or at the webcast link,
TC Energy Investor Day webcast 2024. Presentation materials will be
available at Investor Day 2024 (tcenergy.com) at 6 a.m. EST (4 a.m.
MST), Nov. 19, 2024, and a recording will be posted following the
event.
1) |
Comparable
EBITDA is a non-GAAP measure used throughout this news release.
This measure does not have any standardized meaning under GAAP and
therefore is unlikely to be comparable to similar measures
presented by other companies. The most directly comparable GAAP
measure is Segmented earnings. For more information on non-GAAP
measures, refer to the “Non-GAAP Measures” section of this news
release. |
2) |
Build multiple is a metric calculated by dividing capital
expenditures by comparable EBITDA. Please note our method for
calculating build multiple may differ from methods used by other
entities. Therefore, it may not be comparable to similar measures
presented by other entities. |
3) |
Adjusted funds from operations (AFFO) is a non-GAAP measure.
For more information on non-GAAP measures, refer to the “Non-GAAP
Measures” section of this news release. |
|
|
About TC EnergyWe’re a team of 7,000+ energy
problem solvers working to safely move, generate and store the
energy North America relies on. Today, we’re delivering solutions
to the world’s toughest energy challenges – from innovating to
deliver the natural gas that feeds LNG to global markets, to
working to reduce emissions from our assets, to partnering with our
neighbours, customers and governments to build the energy system of
the future. It’s all part of how we continue to deliver sustainable
returns for our investors and create value for communities.
TC Energy’s common shares trade on the Toronto (TSX) and New
York (NYSE) stock exchanges under the symbol TRP. To learn more,
visit us at TCEnergy.com.
NON-GAAP MEASURESThis release refers to
comparable EBITDA, build multiple, and Adjusted funds generated
from operations, each of which are non-GAAP measures or non-GAAP
ratios. Each these measures do not have any standardized meaning as
prescribed by U.S. GAAP and therefore may not be comparable to
similar measures presented by other entities.
For comparable EBITDA, the most directly comparable measure
presented in the financial statements is segmented earnings. For
reconciliations of comparable EBITDA to segmented earnings for the
years ended Dec. 31, 2023 and 2022, refer to the applicable
business segment in our management’s discussion and analysis
(MD&A) for such periods, which sections are incorporated by
reference herein. Refer to the non-GAAP measures section of the
MD&A in our most recent quarterly report for more information
about the non-GAAP measures we use, which section of the MD&A
is incorporated by reference herein. The MD&A can be found on
SEDAR+ at www.sedarplus.ca under TC Energy’s profile.
Build multiple is a non-GAAP ratio which is calculated using
capital expenditures and comparable EBITDA. We believe build
multiple provides investors with a useful measure to evaluate
capital projects. Please note our method for calculating build
multiple may differ from methods used by other entities. Therefore,
it may not be comparable to similar measures presented by other
entities.
Adjusted funds generated from operations represents comparable
FGFO, adjusted to reflect non-controlling interest distributions
before capex contributions and debt recapitalization. The most
directly comparable measure presented in the financial statements
is net cash from operations. We believe funds generated from
operations is a useful measure of our consolidated operating cash
flows because it excludes fluctuations from working capital
balances, which do not necessarily reflect underlying operations in
the same period, and is used to provide a consistent measure of the
cash-generating ability of our businesses. Comparable funds
generated from operations is adjusted for the cash impact of
specific items described in the reconciliation. For reconciliations
of comparable funds generated from operations to net cash from
operations for the years ended Dec. 31, 2023 and 2022, refer to the
applicable business segment in our management’s discussion and
analysis (MD&A) for such periods, which sections are
incorporated by reference herein. Refer to the non-GAAP measures
section of the MD&A in our most recent quarterly report for
more information about the non-GAAP measures we use, which section
of the MD&A is incorporated by reference herein. The MD&A
can be found on SEDAR+ at www.sedarplus.ca under TC Energy’s
profile.
See “Reconciliation” for the reconciliation of Adjusted funds
generated from operations for the years ended Dec. 31, 2022 and
2023.
FORWARD-LOOKING INFORMATIONThis release
contains certain information that is forward-looking and is subject
to important risks and uncertainties (such statements are usually
accompanied by words such as "anticipate", "expect", "believe",
"may", "will", "should", "estimate", "intend" or other similar
words). Forward-looking statements in this document may include,
but are not limited to, expectations about strategies and goals for
growth and expansion, statements on our projected comparable
EBITDA, expected energy demand levels, our expected capital
expenditures, including Build multiple, expected outcomes with
respect to legal proceedings, and expected costs and schedules for
planned projects, including projects under construction and in
development. Forward-looking statements in this document are
intended to provide TC Energy security holders and potential
investors with information regarding TC Energy and its
subsidiaries, including management's assessment of TC Energy's and
its subsidiaries' future plans and financial outlook. All
forward-looking statements reflect TC Energy's beliefs and
assumptions based on information available at the time the
statements were made and as such are not guarantees of future
performance. As actual results could vary significantly from the
forward-looking information, you should not put undue reliance on
forward-looking information and should not use future-oriented
information or financial outlooks for anything other than their
intended purpose. We do not update our forward-looking information
due to new information or future events, unless we are required to
by law. For additional information on the assumptions made, and the
risks and uncertainties which could cause actual results to differ
from the anticipated results, refer to the most recent Quarterly
Report to Shareholders and Annual Report filed under TC Energy’s
profile on SEDAR+ at www.sedarplus.ca and with the U.S. Securities
and Exchange Commission at www.sec.gov.
Reconciliation:
|
year ended December 31 |
(millions of Canadian $) |
2023 |
|
2022 |
|
|
|
|
Net cash
provided by operations |
7,268 |
|
6,375 |
Increase (decrease) in operating working capital |
(207) |
|
639 |
Funds generated from
operationsi |
7,061 |
|
7,014 |
Specific
items |
|
|
|
Current income tax expense on disposition of equity interestii |
736 |
|
- |
Focus Project costs, net of current income tax |
54 |
|
- |
Keystone regulatory decisions, net of current income tax |
53 |
|
27 |
Liquids Pipelines business separation costs |
40 |
|
- |
Milepost 14 insurance expense |
36 |
|
- |
Settlement of Mexico prior years' income tax assessments |
- |
|
196 |
Keystone XL preservation and other, net of current income tax |
14 |
|
20 |
Current income tax expense on Keystone XL asset impairment charge
and other |
(14) |
|
96 |
Comparable funds generated from
operationsi |
7,980 |
|
7,353 |
NCI
distributions (pre-capex and debt recap) |
(246) |
|
(44) |
Adjusted FGFO (AFFO) |
7,734 |
7,309 |
|
|
i Funds generated from operations, comparable
funds generated from operations and adjusted funds from operations
are non-GAAP measures. See the non-GAAP measures slide at the front
of this presentation for more information. |
ii Current income tax expense related to
applying an approximate 24 per cent tax rate to the tax gain on
sale of a 40 per cent non-controlling equity interest in Columbia
Gas and Columbia Gulf. This is offset by a corresponding deferred
tax recovery resulting in no net impact to tax expense. |
|
-30-
Media Inquiries:Media
Relationsmedia@tcenergy.com 403-920-7859 or 800-608-7859
Investor & Analyst Inquiries:Gavin Wylie /
Hunter Mauinvestor_relations@tcenergy.com403-920-7911 or
800-361-6522
A photo accompanying this announcement is available at
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