Enbridge Inc

Michelle Heritage, Gas Distribution and Storage, and Matthew Hackman, Renewable Power. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session for the investment community. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, simply press star followed by the number one. Please note that this conference is being recorded. As per usual, this call is being webcast, and I encourage those listening on the phone to follow along with the supporting slides. We'll try to keep the call to roughly one hour, and in order to answer as many questions as possible, we'll be limiting questions to one plus a single follow-up if necessary. We'll be prioritizing questions from the investment community, so if you're a member of the media, please direct your inquiries to our communications team, who will be happy to respond. As always, our investor relations team will be available following the call for any follow-up questions. On to slide two, where I'll remind you that we'll be referring to forward-looking information on today's presentation and question and answer period. By its nature, this information contains forecast assumptions and expectations about future outcomes, which are subject to the risks and uncertainties outlined here and discussed more fully in our public disclosure filings. We'll also be referring to non-GAAP measures summarized below. And with that, I'll turn it over to Greg Ebel.

Thanks very much, Rebecca, and good morning, everyone. Thanks for joining us on the call today. As all of you know, markets have seen significant financial and commodity price volatility to start the year. But despite the unique challenges 2025 has already presented, Enbridge is operating from a position of strength. We're actively working with policymakers and regulators to advocate for new infrastructure on both sides of the border that will serve customers throughout North America and meet increasing global demand through growing exports. Our large diversified footprint continues to deliver safe, reliable, and affordable energy to our customers. Our low-risk utility-like business model is driving predictable financial results, and I'm pleased to say that the first quarter was a record for Enbridge. We're going to start today with a brief recap of our first quarter highlights. We will then review the team's success on execution and continued growth. And from there, I'll provide an update on each of our four core franchises. And then Pat will review our financial results and discuss our capital allocation priorities. Lastly, I'll close the presentation with a few comments on our first choice value proposition before we open the call for your questions. During the first quarter, we delivered record EBITDA, DCF per share and earnings per share, driven by contributions from the U.S. utilities we acquired last year and strong volumes across the business overall. We don't expect tariffs or global trade war to have a material impact on our current operations and are therefore very confident reaffirming our 2025 financial guidance. We remain committed to maintaining our debt to EBITDA metric between four and a half times to five times and expected that leverage ratio to improve throughout the year as we realize full year contributions from the acquired U.S. utilities. Our assets were highly utilized during the quarter with records on the mainline and at Ingleside. We announced an open season on Flanagan South as part of the first phase of our mainline optimization plans and we're receiving strong shipper interest so far. We look forward to providing you an update on our progress in the coming months. In our renewables business, we brought the Orange Grove Solar Facility into service on time and on budget, showcasing the quick-cycle, capital-efficient nature of our solar investments. And another growth front, we've agreed to acquire a 10% interest in the Matterhorn Express Pipeline. a two and a half BCF per day long haul pipeline connecting the Permian Basin to growing U.S. Gulf Coast demand. We also sanctioned the Traverse pipeline earlier this quarter. Upon completion in 2027, Traverse will offer bi-directional service between Katy and Agua Dolce along the Gulf Coast. We are making great progress on the opportunity set we laid out for you at Investor Day and anticipate future announcements in 2025 and through 2026 to service growing natural gas demand from data centers, coal to gas generation switching, and LNG supply, similar to those we've announced these past few months. Now let's put all of this together and talk about the great progress we've made executing on disciplined growth across our business. Strong demand for safe, reliable, and affordable energy has allowed us to secure $3 billion of accretive, low-risk projects year to date. In addition to the projects I just mentioned, we also announced that we plan to invest up to $2 billion in the mainline to support operational efficiencies, system reliability, and extend the life of the asset. And we sanctioned Birch Grove, which is an approximately 180 million cubic feet per day expansion, on our TNorth system that will support West Coast LNG. I'm very happy with the progress we've made thus far this year as we've continued to sanction projects and add visibility to the growth outlook shared at our investor day in March. I think we are really seeing and will continue to see our low-risk, resilient business model shine. We have industry-leading diversification in cash flow quality, which produces stable, predictable results in all economic and commodity cycles. Our strategically positioned demand pool assets are expected to remain highly utilized despite the ongoing global trade conflict, and we expect tariffs will have a negligible impact on our financial results. We've not seen a material impact on our input costs for projects already sanctioned and will remain disciplined as we continue to monitor the evolving trade situation. The diversification of our business has been key to our success. With the addition of three premier U.S. gas utilities and new assets placed into service, we now have over 200 asset streams and businesses generating steady, high-quality cash flows. Our commercial structure has never been more low risk, with over 98% of EBITDA protected by regulated or take-or-pay frameworks. That industry-leading low-risk model supports our balance sheet, reflected in our investment-grade credit rating and minimal counterparty risk. We have negligible commodity price explosion, and over 80% of our EBITDA has inflation protection with built-in escalators or regulatory means to recover. So with Enbridge, you get a safe and reliable investment with attractive growth opportunities. Now let's jump into the business updates for the quarter. It was a strong start to the year in liquids, with mainline delivering record first quarter volumes of almost 3.2 million barrels per day. In order to keep the existing mainline as available and reliable as possible, and at the same time extend its useful life, we're planning to invest up to $2 billion to continue delivering first choice customer service and optimizing capacity. That capital will earn a return under the mainline toll settlement framework, within our 11% to 14% ROE collar, providing strong risk-adjusted returns for Enbridge. We continue to advance mainline optimization initiatives and expect the first phase to reach FID later this year. That phase includes 150,000 barrels a day of incremental capacity and includes a downstream expansion on Flanagan South, of which I spoke about earlier. As mentioned at Enbridge Day, we are also advancing other opportunities to build incremental egress out of the Western Canadian sedimentary basin as the growth outlook remains strong with approximately 1 million barrels per day of supply expected to come on stream by 2035. South of the border, Ingleside recorded another quarterly volume record, benefiting from the increased operational capacity that came with the docks we acquired last year. We will continue to develop the site and expect to place another 2.5 million barrels of storage into service later this year. On the gas transmission front, our growing footprint puts us in an excellent position to serve increasing natural gas demand from new LNG facilities, coal to gas transitions, and data centers. We continue to build our Permian franchise with our announcements to acquire a 10% interest in the Matterhorn pipeline for cash consideration of approximately $300 million. This 2.5 BCF per day operating asset is complementary to the Traverse pipeline we previously sanctioned with our partners in April. These announcements enhance our Permian super system and provide shippers with optionality to access the best demand markets across the U.S. Gulf Coast. Both pipelines are contracted under long-term take-or-pay arrangements with investment grade counterparts. We received FERC approval for a Ridgeline expansion last month, enabling the coal to gas transition of the Kingston Combined Cycle Facility in Tennessee with in-service expected in 2027. We continue to experience strong demand for our U.S. Gulf Coast gas storage assets and recently completed open seasons at Trace Palacios, Egan, and Moss Bluff, and are engaging with customers around potential future growth opportunities. Lastly, we previously announced an expansion of our TNOR system to serve growing LNG demand off the Canadian West Coast. Now let me illustrate the growing Permian footprint that we've established since our initial investment only a year ago. Today, our Permian natural gas franchise provides up to five BCF per day of egress from the basin, with another two and a half BCF per day expected to come online beginning in 2026 via the Blackcomb pipeline. The recently sanctioned bi-directional traverse pipeline will provide transportation between Katy, Texas and Aguadulce by 2027, ensuring customers have optionality between key market hubs. The DBR system provides 3.5 BCF a day of intra-basin capacity and is a key supply conduit for Whistler and Matterhorn. We also have an interest in 2BCF of operating storage capacity at Waha and are connected to Corpus Christi LNG through the ADCC pipeline. After we close Matterhorn, Enbridge will have acquired 2 billion of operating assets and added over a billion of growth projects, which are expected to be built at roughly six times EBITDA multiples. And in 2026, after Blackcomb enters service, we expect to have an equity interest in 30% of all the Permian egress capacity. Our investment in this portfolio positions Enbridge to capture growing demand for Permian gas across the U.S. Gulf Coast and provides even more embedded growth opportunities that will leverage our scale and existing footprint. Now let's turn to our gas utility business. This is an exciting first year of us owning our U.S. utilities, and we are in rate cases in the four major jurisdictions and look forward to working with all stakeholders to deliver safe, reliable, and affordable energy. As we continue to grow our utilities, constructive regulatory outcomes are very much informing our capital allocation strategies. Given the increasingly rich opportunity set across all our business units, we will allocate capital based on the best risk-adjusted returns, including the economic and regulatory environment. In Ontario, we recently received permission to begin construction on the St. Laurent Pipeline Replacement Program, which is expected to be completed in stages and will be fully in service by the end of 2026. Moving to the U.S., we expect to receive a decision on our Ohio rate case in the second half of this year, and we filed rate case applications in North Carolina and Utah in April and May, respectively. We expect rates to be affected by year-end, ensuring fair returns for our shareholders and supporting continued investment in critical energy infrastructure through the back half of the decade. Now let's jump on to renewable power. The 130-megawatt Orange Grove solar recently entered service on time and on budget, and it's now generating electricity for the ERCOT South Power Zone. Between Orange Grove and the first stage of Sequoia, we expect to place over 500 megawatts of solar into service this year, entirely backstopped by investment-grade blue-chip customers. Given the unprecedented demand for power generation across North America, we also anticipate further FID announcements over the next year, driven by data center electricity needs. The policy landscape for renewables is dynamic, but we think we are well positioned with our portfolio of late stage development projects. As always, we'll stick to our capital discipline and only approve projects that meet our risk and return hurdles. In our European portfolio, CalvadosWin continues to make progress with new pylon installations and technical work ongoing. Now we'll pass it off to Pat to review our financial performance.

Thanks, Greg, and good morning, everyone. 2025 is off to a great start. We posted new quarterly records across all metrics. Compared to the first quarter of 2024, adjusted EBITDA is up 18%, DCF per share up 6%, and earnings per share is up 12%. In liquids, higher mainline volumes and annual toll escalators led to higher results versus 2024. In gas transmission, revised rates at Algonquin, Texas Eastern, and Maritimes Northeast drove higher contributions across our large US gas transmission pipes. Venice Extension entered service at the end of 2024, and the Whistler JV and DBR system acquisitions are also providing the expected incremental contributions year over year. Notably, gas transmission is up 13% from this time last year, despite the absence of contributions from Alliance and Oxable, which were sold in 2024. Our gas distribution segment realized a full quarter of contributions from all three US gas utilities acquired in 2024, driving the majority of the year-over-year increase within the business. In Ontario, customer growth and rate increases alongside colder weather resulted in 170 million of EBITDA increase compared to the first quarter of 2024. In renewables, lower-end resources at the European offshore assets were partially offset by stronger resources in North America, and we experienced similar levels of investment tax credits between those periods. The strong US dollar resulted in larger hedging losses this quarter, but FX was overall still a net tailwind for EBITDA and DCF as the average exchange rate pre-hedging was 144 for the quarter versus 135 in 2024. Below the line, higher financing costs, taxes, maintenance capital, and a slightly higher share count linked to the US gas utility acquisitions partly offset the higher EBITDA contributions. I'm also pleased to reaffirm our 2025 guidance. Our resilient business model continues to demonstrate our ability to deliver predictable results in all cycles. And as Greg mentioned earlier, we're not seeing any noticeable impacts from tariffs on our financial guidance. Strong first quarter performance positions as well to hit our financial guidance for the 20th consecutive year. In fact, I think the lack of arrows on this slide from a tailwind and headwind perspective speaks to the resilience of our assets. But as we look forward, the recent acquisition of an interest in Matterhorn and forward expectations for US Canadian exchange rate, which although fairly heavily hedged, could provide some uplift to results. We're also keeping an eye on US interest rates as they're a bit higher than we had projected, but again, not anticipated to be material. As a reminder, Q1 and Q4 are typically our strongest quarters and the US utilities further exaggerate that. Some of our other businesses also have seasonality built into them. In our liquids business, We generally have heat restrictions on our pipes in the summers, leading to lower volumes. In the winter months, gas transmission experiences far more peak days, and similarly, Enbridge Gas Ontario has the majority of its heating degree days, leading to higher contributions in those same winter months. In our renewable segment, we typically experience higher wind resources in the winter months, which provide higher contributions from October to March. Now, I'd like to reiterate our long-held capital allocation priorities. will continue to maintain our balance sheet strength and target a debt to EBITDA range of four and a half to five times. Sustainably returning capital to shareholders is key to our value proposition, and we expect to grow the dividend at a level within our annual DCF per share growth. When it comes to new growth, you can expect us to remain disciplined and prioritize low multiple brownfield opportunities and utility-like projects. As we discussed at Enbridge today, we can now self-equity fund 9 to 10 billion of organic growth projects annually. Based on our current secured growth backlog of 28 billion, we expect to deploy 8 to 9 billion per year towards that secured growth projects. That leaves us with an additional 1 to 2 billion that can be opportunistically allocated, whether that be sanctioning new strategic projects, accretive tuck in M&A, such as the 10% acquisition of Matterhorn, or reducing debt. We'll apply our rigorous investment criteria letting the 50 billion of opportunities compete for that excess capacity and prioritizing the highest returning and most strategic projects. Before I wrap up, I want to thank all of our team members for delivering yet another outstanding quarter. And with that, Gray, I can pass it back to you for closing comments.