CALGARY, Alberta – TC Energy Corporation (TSX, NYSE: TRP) (TC Energy or the Company) will host its annual Investor Day today. During the event we will provide an overview of our corporate strategy and highlight our continued approach to delivering long-term shareholder value as we prudently manage our extensive opportunity set ahead. We are reaffirming our long-term comparable EBITDA growth outlook of six per cent by 2026 and three to five per cent annual dividend growth rate.
“We have an industry-leading $34 billion of fully sanctioned, secured capital projects and an unparalleled opportunity-set that will continue to differentiate TC Energy as a leader in the energy infrastructure space,” said François Poirier, TC Energy’s President and Chief Executive Officer. “We are leveraging our extensive North American footprint to expand and extend the reach of our services that will also align with the evolving energy mix and needs of our customers.”
We are introducing our 2023 comparable EBITDA outlook that we expect will be five to seven per cent higher than 2022. Despite a challenging market backdrop, our business remains resilient and continues to produce strong results. Approximately 95 per cent of our projected comparable EBITDA is under long-term take-or-pay contracts and/or rate regulation which provide insulation against rising inflation and interest rates. In addition, approximately 85 per cent of our long-term debt is fixed-rate, with a weighted average maturity of approximately 20 years and a weighted average coupon of 4.8 per cent.
TC Energy’s secured capital program is expected to be primarily funded through a combination of increasing cash flows, incremental long-term debt and hybrid capacity, and other sources of capital. We expect that any funding requirements exceeding our targeted annual capital expenditure range of $5 to $7 billion will be funded through our flexible $5+ billion divestiture program that is expected to be executed during 2023. Any potential impact on our growth trajectory out to 2026 will be determined by the timing and proceeds of assets monetized, along with the contribution from projects yet to be sanctioned. However, the additional financial flexibility created through this process will enhance our strategic positioning to deliver shareholder value over the medium to long term. We remain committed to concluding our discounted Dividend Reinvestment Program with the dividend declarations for the quarter-ending June 30, 2023.
Coastal GasLink Project update
With respect to the Coastal GasLink Project, we continue to face significant cost pressures in Western Canada relating to labour costs and shortages of skilled labour, along with contractor underperformance and disputes. The project has also been impacted by other unexpected events including drought conditions, and erosion and sediment control challenges. As a result, we now expect a material increase in project costs and TC Energy’s corresponding funding requirements. We are actively pursuing cost mitigants and potential recoveries from contractors to offset a portion of these costs, some of which may not be conclusively determined until after project completion. We expect to provide an updated capital cost estimate in early-2023 that will incorporate the scope of recent developments.
The project is now overall 80 per cent complete and we continue to target mechanical completion by year-end 2023. TC Energy is committed to the highest level of safety for our workers, along with the communities and the environment in which we work. This above all is our primary commitment.
“Although Phase One of Coastal GasLink has been challenged by cost performance, we do not expect any impact on the sustainability of our dividend growth rate of three to five per cent or our ability to accelerate our deleveraging target from 2026,” said Poirier. “We continue to see long-term value in the Coastal GasLink Project for the WCSB, our customers, and the communities across the project route.”
Our Investor Day event is scheduled from 7:55 a.m. to 11:00 a.m. EST (5:55 a.m. to 9:00 a.m. MST) on November 29, 2022. A live webcast of the event will be available through the Investors section of TC Energy’s website at 2022 Investor Day — Toronto (tcenergy.com) or via the following URL: TC Energy Investor Day 2022 (chime.live) The webcast will also be posted on-line for replay following the event.
The presentation materials will be available at 2022 Investor Day — Toronto (tcenergy.com) at 7:00 a.m. EST (5:00 a.m. MST).