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TC Energy generates strong results in 2021 while progressing energy transition initiatives

February 15, 2022 7:30 AM

CALGARY, Alberta, Feb. 15, 2022 (GLOBE NEWSWIRE) -- TC Energy Corporation (TSX, NYSE: TRP) (TC Energy or the Company) today announced net income attributable to common shares for fourth quarter 2021 of $1.1 billion or $1.14 per share compared to net income of $1.1 billion or $1.20 per share for the same period in 2020. For the year ended December 31, 2021, net income attributable to common shares was $1.8 billion or $1.87 per share compared to net income of $4.5 billion or $4.74 per share for 2020. Comparable earnings1 for fourth quarter 2021 were $1.0 billion or $1.06 per common share compared to $1.1 billion or $1.15 per common share in 2020. Comparable earnings for the year ended December 31, 2021 were $4.2 billion or $4.27 per common share compared to $3.9 billion or $4.20 per common share for the comparable period in 2020. Net cash provided by operations for the year ended December 31, 2021 was $6.9 billion compared to $7.1 billion for 2020. Comparable funds generated from operations1 for the year ended December 31, 2021 were $7.4 billion, in-line with 2020 results. TC Energy's Board of Directors also declared a quarterly dividend of $0.90 per common share for the quarter ending March 31, 2022, equivalent to $3.60 per common share on an annualized basis, an increase of 3.4 per cent. This is the twenty-second consecutive year the Board has raised the dividend.

“Our $100 billion diversified portfolio of high-quality, long-life energy infrastructure assets continued to perform extremely well in 2021 as evidenced by our strong financial results,” said François Poirier, TC Energy’s President and Chief Executive Officer. “Comparable earnings of $4.2 billion or $4.27 per common share and comparable funds generated from operations of $7.4 billion reflect the strong demand for our services, contributions from new assets placed into service and our constant focus on operational excellence.”

During 2021, TC Energy continued to reliably deliver the energy people need. Flows and utilization levels across many of our systems continued to exceed historical norms despite the ongoing impacts of COVID-19 and energy market volatility. We also placed $4.1 billion of assets into service and sanctioned approximately $7.0 billion of new projects including maintenance capital.

"Today we are advancing $24 billion of commercially secured projects including approximately $6.5 billion that are expected to enter service in 2022. These projects will expand and extend our asset footprint across North America and are expected to generate attractive returns for our shareholders in the years ahead,” added Poirier. “Based on the confidence we have in our future outlook, our Board of Directors declared a dividend of $0.90 per common share for first quarter 2022. This equates to $3.60 per common share on an annualized basis, an 3.4 per cent increase over the amount declared in 2021.”

TC Energy's $24 billion of secured capital projects are underpinned by strong industry fundamentals as well as cost-of-service regulation and/or long-term, take-or-pay contracts. This capital program, combined with the strong performance of our existing assets, is expected to result in average annual growth in comparable EBITDA1 of five per cent through 2026. Additional sanctioned projects that enter service by 2026, along with other revenue enhancements and cost savings, would add to the Company’s growth outlook. Based on the confidence we have in our business plans we expect to continue to grow the common share dividend at an annual rate of three to five per cent. This is consistent with our established conservative approach to capital allocation and is expected to provide the capacity to fund our sizable capital program while enhancing our financial strength and flexibility.

“Our vision is to be the premier energy infrastructure company in North America, now and in the future,” continued Poirier. “Looking forward, we expect that our network of critical energy infrastructure will be used for decades to come and continue to generate significant in-corridor growth potential. We also remain committed to the sustainable development of our business. Modernizing our existing systems and assets along with the decarbonization of our own energy consumption are some of the areas we are focused on while also seeking opportunities to invest in low-carbon energy infrastructure. We believe our creativity, technical strength and unparalleled market connectivity will allow us to prosper regardless of the pace and direction of energy transition.”

TC Energy is uniquely positioned to continue advancing projects involving new energy types and technologies emerging through energy transition. The Company is progressing the electrification of our systems including a Request for Information to meet the electricity needs of the U.S. portion of the Keystone Pipeline System assets as well as the Canyon Creek Pumped Hydro Storage Project and the long-term Bruce Power life extension program. Through partnerships both within and outside of our industry, we have identified emerging technology opportunities such as partnering with Pembina on the Alberta Carbon Grid, signing agreements with Nikola Corporation and Hyzon Motors to explore the co-development of hydrogen hubs, working with Irving Oil focused on reducing emissions, reaching an agreement with the Department of National Defence for land access to develop the world-class Ontario Pumped Storage Project and executing a 15-year power purchase agreement for wind energy with EDP Renewables.

In October 2021 we also released our latest Report on Sustainability which includes targets for all our sustainability commitments. Notably, we set Scope 1 and Scope 2 GHG reduction targets, including reducing the emissions intensity from our operations 30 per cent by 2030 and positioning to achieve net zero emissions from our operations by 2050. In all our operations and projects, we will remain focused on managing and reducing our GHG emissions and building constructive, enduring relationships with communities and stakeholders for decades to come.

Highlights

(All financial figures are unaudited and in Canadian dollars unless otherwise noted)

Net income attributable to common shares decreased by $6 million or $0.06 per common share to $1.1 billion or $1.14 per share for the three months ended December 31, 2021 compared to the same period in 2020. Per share results reflect the impact of common shares issued for the acquisition of the remaining ownership interests in TC PipeLines, LP in first quarter 2021. Net income attributable to common shares includes a number of specific items that we believe are significant but not reflective of our underlying operations in the period. More information on these items, which are excluded from comparable earnings, can be found in the table entitled "Reconciliation of net income to comparable earnings" below.

Comparable EBITDA of $2.4 billion increased by $81 million for the three months ended December 31, 2021 compared to the same period in 2020 primarily due to the net effect of the following:

While the weakening of the U.S. dollar in fourth quarter 2021 compared to the same period in 2020 had a negative impact on comparable EBITDA for the three months ended December 31, 2021, the corresponding impact on comparable earnings was not significant due to offsetting natural and economic hedges.

In addition, due to the flow-through treatment of certain expenses including income taxes, financial charges and depreciation in our Canadian rate-regulated pipelines, changes in these expenses impact our comparable EBITDA despite having no significant effect on net income.

Comparable earnings of $1.0 billion or $1.06 per common share decreased by $45 million or $0.09 per common share for the three months ended December 31, 2021 compared to the same period in 2020 and was primarily the net effect of:

Comparable earnings per share also reflects the impact of common shares issued for the acquisition of the remaining ownership interests in TC PipeLines, LP in first quarter 2021.

Certain of our businesses generate all or most of their earnings in U.S. dollars and, since we report our financial results in Canadian dollars, changes in the value of the U.S. dollar against the Canadian dollar directly affect our comparable EBITDA and may also impact comparable earnings. As our U.S. dollar-denominated operations continue to grow, this exposure increases. A portion of the U.S. dollar-denominated comparable EBITDA exposure is naturally offset by U.S. dollar-denominated amounts below comparable EBITDA within Depreciation and amortization, Interest expense and other income statement line items. The balance of the exposure is actively managed on a rolling forward basis up to three years using foreign exchange derivatives; however, the natural exposure beyond that period remains. Despite the decrease in the average exchange rate for the three months ended December 31, 2021 compared to 2020, the net impact of U.S. dollar movements on comparable earnings over this period, after considering natural offsets and economic hedges, was not significant.

NOTABLE RECENT DEVELOPMENTS INCLUDE:

Canadian Natural Gas Pipelines

U.S. Natural Gas Pipelines

Mexico Natural Gas Pipelines

Liquids Pipelines

Power and Storage

Corporate

Teleconference and WebcastWe will hold a teleconference and webcast on Tuesday, February 15, 2022 to discuss our fourth quarter 2021 financial results. François Poirier, President and Chief Executive Officer; Joel Hunter, Executive Vice-President and Chief Financial Officer; and other members of the executive leadership team will discuss TC Energy's financial results and company developments at 2 p.m. (MST) / 4 p.m. (EST).

Members of the investment community and other interested parties are invited to participate by calling 1.800.319.4610. No pass code is required. Please dial in 15 minutes prior to the start of the call. A live webcast of the teleconference will be available on TC Energy's website at www.TCEnergy.com/events or via the following URL: http://www.gowebcasting.com/11706.

A replay of the teleconference will be available two hours after the conclusion of the call until midnight (EST) on February 22, 2022. Please call 1.855.669.9658 and enter pass code 8338.

The audited annual consolidated financial statements and Management’s Discussion and Analysis (MD&A) are available on our website at www.TCEnergy.com and will be filed today under TC Energy's profile on SEDAR at www.sedar.com and with the U.S. Securities and Exchange Commission on EDGAR at www.sec.gov.

About TC EnergyWe are a vital part of everyday life – delivering the energy millions of people rely on to power their lives in a sustainable way. Thanks to a safe, reliable network of natural gas and liquids pipelines, along with power generation and storage facilities, wherever life happens – we’re there. Guided by our core values of safety, innovation, responsibility, collaboration and integrity, our people make a positive difference in the communities where we operate across Canada, the U.S. and Mexico.

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 www.TCEnergy.com.

Forward-Looking InformationThis release contains certain information that is forward-looking, including the sustainability commitments and targets contained in our 2021 Report on Sustainability and our GHG Emissions Reduction Plan, 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 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.sedar.com and with the U.S. Securities and Exchange Commission at www.sec.gov and the "Forward-looking information" section of our 2021 Report on Sustainability and our GHG Emissions Reduction Plan which are available on our website at www.TCEnergy.com.

Non-GAAP MeasuresThis release contains references to non-GAAP measures, including comparable earnings, comparable earnings per common share, comparable EBITDA and comparable funds generated from operations, that do not have any standardized meaning as prescribed by U.S. GAAP and therefore are unlikely to be comparable to similar measures presented by other companies. These non-GAAP measures are calculated on a consistent basis from period to period and are adjusted for specific items in each period, as applicable except as otherwise described in the Annual consolidated financial statements and MD&A. Refer to: (i) each business segment for a reconciliation of comparable EBITDA and comparable EBIT to segmented earnings; (ii) the Consolidated results section for reconciliations of comparable earnings and comparable earnings per common share to Net income attributable to common shares and Net income per common share, respectively; and (iii) the Cash provided by operating activities section for a reconciliation of funds generated from operations and comparable funds generated from operations to Net cash provided by operations. Refer to the About this document – Non-GAAP measures section of the MD&A in our 2021 Annual Report to Shareholders 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 (www.sedar.com) under TC Energy's profile.

Media Inquiries:Jaimie Harding / Suzanne Wilton[email protected]403.920.7859 or 800.608.7859

Investor & Analyst Inquiries: David Moneta / Gavin Wylie / Hunter Mau [email protected]403.920.7911 or 800.361.6522

________________________________________________1 Comparable earnings, comparable earnings per common share, comparable funds generated from operations and comparable EBITDA are non-GAAP measures used throughout this news release. These measures do not have any standardized meaning under U.S. GAAP and therefore are unlikely to be comparable to similar measures presented by other companies. The most directly comparable U.S. GAAP measures are Net income attributable to common shares, Net income per common share, Net cash provided by operations and Segmented earnings, respectively. For more information on non-GAAP measures, refer to the Non-GAAP section of this news release.

Download full report here: https://www.tcenergy.com/siteassets/pdfs/investors/reports-and-filings/annual-and-quarterly-reports/2021/tc-2021-q4-quarterly-report.pdf

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Source: TC Energy Corporation

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