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What Makes TransCanada Attractive in the Long Term

PART:
1 2 3 4 5
Part 4
What Makes TransCanada Attractive in the Long Term PART 4 OF 5

TransCanada Expects Its Capital Program to Drive Earnings Growth

TRP’s capital projects

TransCanada (TRP) expects to spend 25 billion Canadian dollars on capital projects over the next three years. The projects are largely backed by long-term contracts or regulated tariffs. TRP doesn’t anticipate the need to access the equity market to fund near-term capital projects.

TransCanada Expects Its Capital Program to Drive Earnings Growth

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The above table shows TRP’s near-term capital projects along with expected in-service dates.

Expected EBITDA growth

The contributions from the Columbia Pipeline Group, as well as capital projects, are expected to drive significant EBITDA (earnings before interest, tax, depreciation, and amortization) growth for TransCanada.

TransCanada Expects Its Capital Program to Drive Earnings Growth

The company expects 9.3 billion Canadian dollars in EBITDA by 2020, representing growth at a 10% CAGR (compound annual growth rate) from 5.9 billion Canadian dollars in 2015. Over 95% of EBITDA is expected to come from regulated assets or long-term contracts.

Over the long term, TransCanada has more than 45 billion Canadian dollars in projects under various stages of review and development. All these projects are expected to support TRP’s dividend growth outlook through 2020 and beyond.

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