TC Energy Corporation

Welcome to the TC Energy 3rd 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'll 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 morning, everyone. I'd like to welcome you to TC Energy's third quarter conference call. Joining me today are Francois Poirier, President and Chief Executive Officer, Joel Hunter, Executive Vice President and Chief Financial Officer, Tracy Robinson, President, Canadian Natural Gas Pipelines and Coastal GasLink, Stan Chapman, President, US and Mexico Natural Gas Pipelines. Bevin Worspa, Executive Vice President, Strategy and Corporate Development and President of our Liquids Pipelines business. Corey Hessen, President, Power and Storage. And Glenn Meneuz, Vice President and Controller. Francois and Joel 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. Following their remarks, we will take questions from the investment community. If you are a member of the media, please contact Jamie Harding after this call. In order to provide everyone from the investment community with an opportunity to participate, we ask that you limit yourself to two questions. Before we begin, 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. Finally, during this presentation, we may refer to measures such as comparable earnings, comparable earnings per common share, comparable EBITDA, and comparable funds generated from operations. These and certain other comparable measures are considered to be non-GAAP measures. As a result, they may not be comparable to similar measures presented by other entities. These measures are used to provide you with additional information on TC Energy's operating performance, liquidity, and our ability to generate funds to finance our operations. With that, I'll turn the call over to Francois.

Thank you, David, and good morning, everyone. Thank you for joining us today. I'm told this is the busiest reporting day of the year, so we really appreciate you joining us on this very busy day. As outlined in our third quarter report, our diversified portfolio of North American energy infrastructure assets continues to perform very well. Society's unwavering demand for our services and the relentless focus our people place on operational excellence are reflected in our strong financial performance. Through the first nine months of the year, comparable earnings per share of $3.21 exceeded last year's results by 5%. while comparable funds generated from operations totaled $5.3 billion. This is a very good outcome, especially considering the significant decline in the value of the U.S. dollar relative to the Canadian dollar, which had a negative impact on our Canadian dollar reported EBITDA. Given the strong year-to-date performance, we now expect 2021 comparable earnings per share to be modestly higher than last year's record results. We continue to advance our secured program, which now totals $22 billion. This includes the US $800 million WR project announced earlier today, which will improve reliability and expand the ANR system. This project is similar in scope to the VR project we discussed in the second quarter. And WR will upgrade compressor stations to dual-drive electric horsepower, reducing our GHG emissions while ensuring natural gas backup in case of a power disruption. So manageable in corridor projects like these are the building blocks in the modernization and decarbonization of North America's energy infrastructure system, while maintaining reliability, and we expect to realize numerous similar opportunities in the future. Also of note, as part of its life extension program, Bruce Power recently launched an upgrade initiative focusing on asset optimization, innovation, and leveraging new technology. They call this Project 2030, and it has a goal of achieving a site peak output of 7,000 megawatts by the end of the decade, effectively adding the equivalent of a ninth unit at the Bruce stations. Now, this is in addition to the major component replacement program we've been investing in and talking about on Units 3 through 8. We continue to advance $22 billion of secured projects, excuse me, including $4 billion we've already added to date in 2021. When you factor in the continuation of Columbia's modernization program, as we call Mod 3, and the Bruce Power Unit 3 MCR which is expected to be sanctioned before the end of the year, as well as the Project 2030 upgrade initiative, we plan to sanction $7 billion of high-quality growth opportunities by the end of this year. Completing these projects on time and on budget will generate a weighted average after-tax IRR on these new investments, the full $7 billion of sanctioned projects, of 8.3%, which is toward the upper end of our targeted range of 7% to 9% for projects that we sanction annually. Our secured capital program continues to be underpinned by cost of service regulation and long-term contracts, giving us visibility to the earnings and cash flow these projects will generate and are consistent with our long-held risk preferences. Now, looking to next year and beyond, we expect many similar high-quality opportunities, to come to fruition as we continue to reliably deliver the energy people need while decarbonizing our asset footprint. This includes the ongoing expansion, modernization, and maintenance of our regulated natural gas pipeline network, the refurbishment of another four Bruce Power reactors, and plans to use renewable energy to electrify a portion of our pipeline network. And you'll hear more detail on that later on. The RFI process we began in the second quarter for over 1,000 megawatts of renewable capacity to electrify our own load has had an overwhelmingly positive response. Negotiations have begun and we anticipate completing the process in the first quarter of 2022. Beyond that, we're also progressing initiatives including the Ontario Pump Hydro Project, the Canyon Creek Pump Hydro Project in Alberta, carbon transportation and sequestration in partnership with Pembina, and clean energy projects with Irving Oil, and also large-scale hydrogen production hubs with Nikola Motors. As a result, we expect to sanction more than $5 billion of new projects annually over the next several years, and we hope to exceed that, with risk-adjusted returns consistent with historical levels. Our team's origination capabilities were demonstrated quite visibly during 2021, and the opportunity set that lies ahead is vast. Now, in order to judiciously fund this attractive suite of growth opportunities, maintain a strong financial position, and enhance our conservative utility-like payout ratios, we have modified our near-term dividend growth outlook. We now expect to increase our common share dividend at an average annual rate of 3% to 5%. While our previous outlook remains affordable and supported by the strong performance of our business, we believe this modest change is prudent given the generational opportunity for growth we have before us. It will allow us to fund a larger portion of our future capital programs through internally generated cash flow, moderate our leverage, and continue to deliver superior total long-term shareholder returns. As you know, we are committed to delivering these returns while growing our business sustainably. That's why I'm proud that last week we released our 2021 report on sustainability, our ESG data sheet, and our GHG emissions reduction plan. These reports outline the next step in our sustainability journey with detail on our 10 sustainability commitments that come with 32 specific measurable targets we've set to support them. This includes targets to lower our emissions intensity by 30% by 2030 and position the company to achieve net zero emissions from our operations by 2050. We also advanced our commitments in the areas of innovation, diversity, indigenous reconciliation, and safety, which for us includes mental and psychological health. I'm confident that our talented team has the technical capabilities, the innovative mindset, and the commitment required to advance our work in these areas. And I encourage you to read these documents, which can be found at tcenergy.com, to learn how we are holding ourselves accountable to protect the planet, empower people, and create shared prosperity. In summary, we are committed. We are committed to our vision of being the premier energy infrastructure company in North America, not just now, but in the future. As I've said on numerous occasions, we will achieve that by prospering irrespective of the pace or direction of energy transition. Our business decisions continue to support our goals to reliably meet society's energy needs while decarbonizing our assets. Looking forward, our $22 billion secured capital program, which we expect to grow to $25 billion by year's end, is poised to grow substantially over the years, and as always, we will fund our capital programs prudently to maintain our solid financial position. Ultimately, our goal is to continue to grow earnings, cash flow, and dividends per share, and build on our long track record of delivering superior total shareholder returns. Now I'll turn it over to Joel for some comments on our third quarter results.