TC Energy(US:TRP)2020-10-29 23:31Financial Data and Key Metrics Changes - Comparable earnings for Q3 2020 were $893 million or $0.95 per share, down from $970 million or $1.04 per share in Q3 2019 [18][39] - Comparable EBITDA was $2.3 billion, while comparable funds generated from operations were $1.7 billion [18] - For the nine months ended September 30, 2020, comparable earnings were $2.9 billion or $3.05 per share, compared to $2.9 billion or $3.11 per share in the same period in 2019 [18][39] Business Line Data and Key Metrics Changes - Canadian Natural Gas Pipelines' comparable EBITDA increased by $94 million compared to Q3 2019, primarily due to increased rate-based earnings and lower flow-through income taxes [41] - U.S. Natural Gas Pipelines' comparable EBITDA grew by $43 million compared to 2019, mainly due to lower operating costs [43] - Liquids Pipelines' comparable EBITDA declined by $160 million to $415 million in Q3 2020, attributed to lower uncontracted volumes [45] - Power and Storage comparable EBITDA fell by $65 million year-over-year, primarily due to the planned removal of Bruce Power Unit 6 for maintenance [45] Market Data and Key Metrics Changes - Natural Gas Pipelines transported volumes remained strong, with NGTL system field receipts averaging 12.1 billion cubic feet per day, similar to or greater than the previous year [20] - The Mexican pipelines moved approximately 1.8 billion cubic feet per day through the first nine months of 2020, consistent with prior year levels [20] Company Strategy and Development Direction - The company is advancing a $37 billion secured capital program, with $11 billion in projects under development [12][36] - Focus on sustainability and transparency in reporting, with a commitment to environmental, social, and governance (ESG) principles [16] - The company aims to grow dividends at an average annual rate of 8% to 10% through 2021 and 5% to 7% thereafter [34][58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of their operations despite COVID-19, with expectations for full-year 2020 results to be similar to 2019 [14][36] - The company remains focused on balancing profitability with safety and environmental responsibility [15] - Management highlighted the importance of their energy infrastructure assets in the North American economy and the anticipated strong demand for their services [36] Other Important Information - The company has maintained a strong liquidity position, enhancing it by more than $11 billion through long-term debt issuance and credit facilities [13][51] - The Board of Directors increased the quarterly dividend to $0.81 per share, marking the 20th consecutive year of dividend increases [33] Q&A Session Summary Question: Capital allocation strategy amidst widening spreads - Management reiterated a consistent capital allocation strategy focused on maintaining financial strength and a balanced return of capital to shareholders [62][63] Question: Development of a hydrogen economy - Management sees long-term opportunities in hydrogen but emphasizes the need for careful assessment regarding safety and integration into existing infrastructure [67][68] Question: Concerns about existential risks to hydrocarbon infrastructure - Management acknowledged the importance of their existing assets while remaining open to future investments in greener infrastructure as the energy transition evolves [74][75] Question: Update on Columbia rate case - Management provided a timeline for the Columbia rate case, indicating that meaningful negotiations would begin in Q2 2021 [84][85] Question: Financing plans related to Natural Law Energy MOU - Management confirmed that funding plans for Keystone XL remain unchanged, with potential third-party investments possibly reducing their funding requirements [94]