TC Energy Corporation

Thank you for standing by. This is the conference operator. Welcome to the TC Energy fourth quarter 2021 results conference call. As a reminder, I would like to remind you 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 one on your telephone keypad. Should you need assistance during the conference call, You may signal an operator by pressing star and zero. I would now like to turn the conference over to David Mineta, 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 Fourth Quarter Conference Call. Joining me today are Francois Poirier, President and Chief Executive Officer, Joel Hunter, Executive Vice President and Chief Financial Officer, Stan Chapman, President, U.S. and Mexico Natural Gas Pipelines. Bevan Worspa, Executive Vice President, Strategy and Corporate Development. And Group Executive, Canadian Natural Gas and Liquids Pipelines. Greg Grant, President, Canadian Natural Gas Pipelines. Richard Pryor, President, Liquids Pipelines. Corey Hessen, President of our Power Storage and Origination. And Glenn Manouse, Vice President and Controller. Francois and Joel will begin today with some 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 in the investor section under events and presentations. Following their remarks, we will take questions from the investment community. In order to provide everyone with an equal opportunity to participate, we ask that you limit yourself to two questions. If you're a member of the media, please contact Jamie Harding after this call. 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 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 additional information on TC Energy's operating performance, liquidity, and its ability to generate funds to finance its operations. With that, I'll now turn the call over to Francois.

Thanks, David. And good afternoon, everyone, and thanks for joining us today. As highlighted earlier today in our fourth quarter news release, I'm pleased to report that 2021 was another very successful year for TC Energy. Our $100 billion portfolio of high-quality, long-life energy infrastructure assets continued to produce strong operating and financial results. During the year, we placed $4.1 billion of assets into service, and we sanctioned approximately $7 billion of new projects. We also progressed numerous long-term energy transition growth initiatives in renewables, hydrogen, and CCUS that will position us for future success regardless of the pace or direction of energy transition. We continued our focus on expanding our organizational capabilities in key areas like power and storage, innovation and stakeholder relations and finally we released our 2021 report on sustainability which includes targets for all 10 of our sustainability commitments notably we set ambitious scope 1 and scope 2 ghg reduction targets our goal is to reduce our emission intensity 30 by 2030 and to position the company to achieve net zero emissions from our operations by 2050. So, operationally, the demand for our services remains strong, and our assets performed extremely well. This was evidenced by the volumes transported across our network. For example, our NGTL system in Alberta reached a decade-level high for average export flows and set an all-time record on intrabasin delivery of 8.1 BCF on January 5th of 2022. A similar story in the U.S., where we saw increased flows across most of our natural gas pipeline assets in 2021. The robust volumes continued into early 2022, and we set an all-time send-out record on January 20th of 34.9 BCF across our U.S. network, and that represents approximately one quarter of total U.S. daily supply. Same in our liquids pipelines, where our Keystone system achieved record throughput of 602,000 barrels per day in 2021, up 6% from 2020. And in power and storage, the Bruce Power Facility delivered 86% plant availability And we also had 98.9% peak availability on our cogeneration assets through the 2021 weather extremes. So what does that mean? It means our strong operating performance translated into strong financial results. Excluding certain specific items, comparable earnings reached a record $4.2 billion in or $4.27 per common share in 2021, compared to $3.9 billion or $4.20 a year earlier. Comparable EBITDA of $9.4 billion and comparable funds generated from operations of $7.4 billion were both similar to last year's results. However, we achieved these record results despite the impact of a weaker U.S. dollar, which impacted comparable EBITDA by approximately $400 million. These results reflect the strong performance of our legacy assets as well as contributions from the approximately $4 billion of new assets we placed into service in 2021. Looking forward, we are advancing a $24 billion capital program. This includes approximately $7 billion of new high-quality growth opportunities that we sanctioned in 2021, including the Columbia Modernization III program and the Bruce Power Unit 3 MCR program. Importantly, the entire $24 billion program is consistent with our historical risk and return preferences. It's underpinned by long-term contracts or cost-of-service regulation and expected to deliver a weighted average unlevered after-tax IRR of approximately 8% on the entirety of the portfolio. Looking beyond our current capital program, the opportunity set that lies ahead of us is vast. Our substantial origination capabilities position us to capture many similar high-quality opportunities as we continue to deliver the energy people need while decarbonizing our own assets footprint. This includes the ongoing in-corridor expansion, modernization, and maintenance of our regulated natural gas pipeline network. It also includes the Bruce Power Life Extension Program and the Project 2030 Upgrade Initiative at Bruce to achieve peak site output of 7,000 megawatts. As we've mentioned previously, we're evaluating proposals in response to our RFI for renewables to electrify the US portion of our base Keystone system. The response has been overwhelmingly positive and we expect to finalize contracts in the first half of 2022. Now associated with the RFI, we have identified a meaningful origination opportunity to sell carbon-free energy products and services to the industrial and oil and gas sectors for aggregation of load that's proximate to our own in corridor demand, thereby enhancing our return on this renewable activity. We're also progressing initiatives for two pumped storage projects. We expect to make a final investment decision this year on the Canyon Creek project in Alberta, which has a capital cost of approximately $300 million. And we continue to progress the development of the Ontario Pump Storage Project with an estimated $4 billion investment that would provide 1,000 megawatts of flexible, clean energy to Ontario's electricity system. Beyond that, we are working on numerous opportunities, including carbon transportation and sequestration with Pembina, clean energy projects with Irving Oil, and large-scale hydrogen production hubs with Nikola and Hyzon. As a result, we are well positioned to sanction more than $5 billion of new projects in each of the next several years with risk-adjusted return profiles consistent with historical levels. Looking forward, our $24 billion secured capital program gives us line of sight to an average annual growth rate in EBITDA of 5% through 2026. This outlook reflects our current portfolio of high-quality, long-life assets and secured projects expected to enter into service in that period of time. Having said that, we continue to see the potential for incremental growth to the extent we're able to originate and place into service additional in-corridor projects, secure capital light opportunities, and realize further cost savings. So based on the strength of our financial performance and our promising outlook for the future, TC Energy's board of directors declared a first quarter 2022 dividend of 90 cents per common share, which is equivalent to $3.60 per share on an annual basis. This represents a 3.4% increase over the amount declared in 2021 and is the 22nd consecutive year that our board has raised the dividend. Based on the confidence we have in our future outlook, we expect to continue to grow the dividend at an average annual rate of 3% to 5% per annum. Now, finally, as I highlighted at our investor day in December, our vision is to be the premier energy infrastructure company in North America now and in the future. To help us realize our vision, we've set the following priorities for 2022, which we will report against throughout the year. First, safety is our number one value. We take our responsibility to safely deliver the energy people need every day very seriously. Next, our goal is to continually increase the return on invested capital. We'll achieve this by optimizing our existing operations through cost savings as well as innovative products and services that enhance our revenues. We also expect to place approximately six and a half billion dollars of assets into service in 2022. And our goal is also to sanction an additional five plus billion dollars of high quality growth opportunities. As always, we will fund our capital program prudently to ensure we maintain our financial strength and flexibility. And finally, we will progress our sustainability targets including GHG emission intensity reductions. We will also continue to enhance our organizational capabilities necessary to prosper irrespective of the pace and direction energy transition takes. Before I turn the call over to Joel, I'd like to mention a few recent management changes. Bevan Wurzba's role has expanded to Executive Vice President, Strategy and Corporate Development, and Group Executive, Canadian Natural Gas and Liquids Pipelines. Reporting to Bevan will be Greg Grant, President of Canadian Natural Gas Pipelines, and Richard Pryor, President of Liquids Pipelines. This follows the news that Tracy Robinson has been appointed President and Chief Executive Officer of Canadian National Railway. I'd like to thank Tracy for her contribution over the years and wish her well in her new role. While we will miss Tracy, this seamless transition highlights the strength of our succession planning efforts and the depth of our organization. Each of these individuals were identified in our leadership succession planning process over the last many years. I'm confident that Bevan, Greg, and Richard, along with the rest of our leadership team, have the experience and the skills necessary to achieve our goals. Now I'll turn the call over to Joel who will provide more detail on our fourth quarter financial results and outlook.