TC Energy Corporation

Thank you for standing by. This is the conference operator. Welcome to the TC Energy First Quarter 2021 Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and 0. I would now like to turn the conference over to David Moneta, Vice President, Investor Relations. Please go ahead.

Thanks very much and good afternoon everyone. I'd like to welcome you to TC Energy's 2021 First Quarter Conference Call. Joining me today are Francois Poirier, President and Chief Executive Officer, Don Marchand, Executive Vice President, Strategy and Corporate Development and Chief Financial Officer, Tracy Robinson, President of our Canadian Natural Gas Pipelines and Coastal Gas Link, Stan Chapman, President, U.S. and Mexico Natural Gas Pipelines, Kevin Worspa, President, Liquids Pipelines, Corey Hessen, President, Power and Storage, and Glenn Manuz, Vice President and Controller. Francois and Dawn will begin today with some opening comments on our financial results and certain other company developments. A copy of the slide presentation that will accompany their remarks is available on our website. It can be found in the investor section under the heading events and presentations. Following their prepared remarks, we will take questions from the investment community. If you are a member of the media, please contact Jamie Harding following this call, and she'd be happy to address your questions. In order to provide everyone from the investment community with an equal opportunity to participate, we ask that you limit yourself to two questions. If you have additional questions, please re-enter the queue. Before Francois begins, I'd like to remind you that our remarks today will include forward-looking statements that are subject to important risks and uncertainties. For more information on these risks and uncertainties, please see the reports filed by TC Energy with Canadian securities regulators and with the U.S. Securities Exchange Commission. And finally, during this presentation, we'll refer to measures such as comparable earnings, comparable earnings per share, comparable EBITDA, and comparable funds generated from operations. These and certain other measures are considered to be non-GAAP measures. As a result, they may not be comparable to similar measures presented by other entities. They are used to provide you with additional information on TC Energy's operating performance, liquidity, and its ability to generate funds to finance its operations. With that, I'll turn the call over to Francois.

Good afternoon, everyone, and thank you for joining us this afternoon. As outlined in our first quarter report to shareholders, our diversified portfolio of high-quality, long-life energy infrastructure assets continued to perform very well in early 2021. Despite energy market volatility, weather events, and the ongoing impacts of COVID-19, flows and utilization levels across our network remained strong. For example, our U.S. natural gas pipeline network moved nearly 29 BCF per day in the first quarter, an increase of 4% over the same period in 2020, while field receipts on the NGTL system in Alberta were more than 12 BCF per day. and in our power and storage business, Bruce Power continued to produce solid operating results while in Alberta, output from our co-generation plants nearly doubled due to the return to service of our Macau River plant and withdrawals from our natural gas storage facilities increased by 75% over the same period last year. Once again, this highlights the essential role our infrastructure plays in the functioning of the North American economy and the well-being of people across the continent. And we take this responsibility seriously, and as always, we conducted our business in a safe and reliable manner. Safety is one of our core values and is embedded in the fabric of our organization and evident in our commitment to ongoing pipeline system integrity. We've invested $150 million in pipeline inspection research and development since 2010 and billions in pipeline system integrity using the most sophisticated and advanced data analytics and risk evaluation methodologies in the industry. Our strong operating performance is also reflected in our solid financial performance, with comparable EBITDA, comparable earnings per share, and comparable funds generated from operations in the first quarter of 2021, all similar to last year's record results. And this was achieved despite one-time surta Texas fees in the first quarter of 2020, the sale of our Ontario gas-fired generation assets last April, and the loss of interest during construction on Keystone XL. Now on Keystone, we were very disappointed with the decision in January to revoke the presidential permit. As a result of the decision, we subsequently agreed with our partner, the government of Alberta, to formally suspend the project and evaluated our investment for impairment along with certain other projects in development including the Heartland Pipeline, TC Terminals, and the Keystone Hardesty Terminal. This resulted in an after-tax asset impairment charge of $2.2 billion, which was excluded from comparable earnings. These costs will be shared with our partner, thereby reducing our net financial exposure at March 31st to approximately $1 billion. I'd like to thank our customers, American and Canadian workers, our partners, the Government of Alberta and Natural Law Energy. Local communities, the pipeline building trade unions, industry, the Government of Canada, and countless others who supported this project over the past decade and would have shared greatly in its benefits. And while we are all disappointed with the outcome, the experience we gained is not lost. Through the process, we identified meaningful indigenous equity opportunities, collaborated with union labor, and developed a robust plan to ensure the pipeline achieved net zero emissions from the moment it would have gone into service in 2023. And you can expect to see us continue to apply this innovative approach to projects in the future. Looking forward, we expect our solid operating and financial performance to continue with 2021 comparable earnings per common share anticipated to be generally consistent with the record results we produced in 2020. We also continue to advance $20 billion of secured projects that are expected to enter service by 2024 and help power the North American economy for decades to come. A substantial portion of this growth is related to our natural gas pipeline network. This infrastructure is critical to support the transition to a lower carbon world, as natural gas will play a key role in both displacing higher-emission coal-fired power and providing the necessary backstop to the intermittency of renewable power. All of our projects are underpinned by cost-of-service regulation or long-term contracts, giving us visibility to the earnings and cash flow they will generate. In addition, we are progressing $7 billion of projects under development, including the refurbishment of another five reactors at Bruce Power. The refurbishment program will run through 2032 and is underpinned by a long-term contract with the Ontario ISO that extends to 2064, providing us with stable and predictable earnings and cash flow and the province with emissionless power. Over the mid to longer term, we expect numerous other opportunities to come to fruition as the world both consumes more energy and it transitions to a lower carbon energy future. Ultimately, our goal is to continue to invest $5 to $6 billion annually to deliver on our long-term growth plans. As you can see on this slide, our starting point is our $20 billion secured capital program. Beyond that, we expect to continue to invest $1.5 to $2 billion annually in maintenance and modernization programs across our extensive pipeline network, approximately 85% of which is recoverable through our rate regulated businesses. We're also developing a significant suite of future growth opportunities. With the ongoing energy transition discussion, It's easy to forget that the world will continue to rely on large quantities of natural gas and oil for the foreseeable future. And with 94,000 kilometers or 58,000 miles of existing natural gas pipelines, we are well positioned to continue to meet growing demand through highly executable in-corridor expansions. That said, the energy mix of the future will evolve, with renewables, for example, making up a greater portion of the overall fuel mix. Our goal is to build on our long history of success and be agnostic to which form of energy will ultimately lead to a lower carbon energy future. As a result, you will see our capital allocation shift over time to meet the energy mix of the future, and to me, this is very exciting and represents a tremendous opportunity. Whether it's renewables and the firming resources needed to manage their intermittency, Electrifying our fleet or other emerging technologies, our existing asset base, technical capabilities, innovative approach, and financial strength means that we are well positioned to prosper irrespective of the pace or direction energy transition takes. For example, we've been engaging with various stakeholders in Ontario to advance a large pumped storage opportunity. The project is designed to store emission-free electricity and provide a backstop to the intermittency associated with the energy provided by renewables. More recently, through the issuance of a request for information, we've announced that we are seeking to identify potential contract and or investment opportunities in wind energy projects that could generate up to 620 megawatts of zero carbon energy to meet the electricity needs for a portion of our U.S. pipeline assets. This is an important step in advancing our plans to leverage the power business as a platform for future growth and diversification while lowering emissions across our North American footprint. In summary, I believe we will be opportunity rich, and our challenge will be to allocate capital to those projects that are best aligned with our capabilities, our risk preferences, and our return requirements. I can assure you we will not compromise our commitment to being thoughtful, deliberate, and disciplined in every investment decision we make. Based on the continued strong performance of our base business and our organic growth plans, we expect to continue to grow our dividend at an average annual rate of 5-7%. As always, the growth in dividends is expected to be supported by sustainable growth in earnings and cash flow per share and strong coverage ratios. I'm confident that the future opportunity set, combined with our capabilities, will continue to deliver superior risk-adjusted total shareholder returns well into the future. I'll now pass the call over to Don Marchand, who will provide more details on our first quarter financial results. Don?