TC Energy Corporation

Thank you for standing by. This is the conference operator. Welcome to the TC Energy first quarter 2024 financial results conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, You may signal an operator by pressing star, then zero. I would now like to turn the conference over to Gavin Wiley, Vice President, Investor Relations. Please go ahead.

Thanks very much and good morning. I'd like to welcome you to TC Energy's 2024 first quarter conference call. Joining me are Francois Poirier, President and Chief Executive Officer, Joel Hunter, Executive Vice President and Chief Financial Officer, along with other members of our senior leadership team. Francois and Joel will begin today with some comments on our financial results and operational highlights. A copy of the slide presentation that will accompany their remarks is available on our website under the Investors section. Following their remarks, we will take questions from the investment community. We ask that you limit yourself to two questions, and if you're a member of the media, please contact our media team. Before Francois begins, I'd like to remind you that today's remarks will include forward-looking statements that are subject to important risks and uncertainties. For more information, please see the reports filed by TC Energy with the Canadian Securities Regulator and the U.S. Securities Exchange Commission. Finally, during the presentation, we will refer to certain non-GAAP measures that may not be comparable to similar measures presented by other entities. These measures are used to provide additional information on TC Energy's operating performance, liquidity, and its ability to generate funds to finance its operations. A reconciliation of various gap and non-gap measures is contained in the appendix of this presentation. With that, I'll turn the call over to Francois.

Thanks, Gavin, and good morning, everyone. We set out with three clearly defined priorities for 2024 that focus on maximizing the value of our assets, project execution, and enhancing our balance sheet strength. And I'm pleased to report that we continue to deliver on all of these commitments. We saw another quarter of record earnings, with comparable EBITDA up 11% compared to the first quarter of last year. With a relentless focus on safety and operational excellence, the company saw high availability and utilization across our asset base, including multiple first quarter all-time records. Our secured capital program continues to progress on plan. and we are tracking to cost and schedule with our major projects, Southeast Gateway and the Bruce Power Unit 3 MCR. In March of 2024, the US $300 million Gillis Access project was placed into service with a bill multiple of approximately six times. This greenfield pipeline system connects gas production source from the Gillis hub to downstream markets in Southeast Louisiana. Gillis, along with projects on our NGTL system, mean that we've placed approximately $1 billion of projects into service so far this year, largely on budget. Additionally, $200 million of maintenance capital was placed into service over the quarter. We continue to execute against our $3 billion asset divestiture program with the recent sale of PNGTS for expected pre-tax proceeds of approximately Canadian $1.1 billion, which includes the assumption by the purchaser of US$250 million of senior notes outstanding at PNGTS. We also continue to progress the proposed spin-off of SELFBO. As you saw a couple of weeks ago, we released our management information circular, and the shareholder vote is scheduled for June 4th. Finally, we're pleased to announce Sean O'Donnell as our incoming Executive Vice President and Chief Financial Officer, effective May 15, following Joel's decision to pursue another opportunity. We're grateful for Joel's 26 years with TC Energy and the incredible impact he's made on the company. And I'll reserve a few more thank yous for Joel in my closing remarks. As for Sean, he joined TC Energy six months ago as part of our succession planning, and brings 30 years of invaluable energy industry experience, including past roles as CFO. This, paired with his tenure in corporate finance and private equity, aligns directly with our clear set of strategic priorities. In Mexico, we continue to achieve milestones in the construction of Southeast Gateway. The total offshore pipe installation is now over 70% complete, The offshore portion represents about 670 of the total 715 kilometers of pipeline length. Onshore, all critical permits for construction have been obtained and we have completed construction on all three landfall sites. Importantly, the project continues to track schedule and expected cost of US $4.5 billion. Continued high utilizations across our integrated natural gas system in the first quarter reflect continued demand growth for natural gas in the markets we serve. Total NGTL system deliveries in Canada averaged 15.3 BCF a day, with a new daily record high of 17.3 BCF achieved in January. In the U.S., daily average flows of 30 BCF were up 5% compared to the first quarter of last year. Once again, various pipelines achieved record throughput volumes, including in our Columbia Gas, Columbia Gulf, and Great Lakes systems. Natural gas demand growth is continuing, empowering the US as electricity demand grows. 2023 was a record year for power burn across the US, and that strength is continuing into 2024. Mirroring that, our assets continue to support the record demand, and we set a first quarter record for deliveries to power generators of 2.9 BCF per day, up 11% versus the first quarter of 2023. New growth drivers like data centers will help continue that positive growth momentum. In Mexico, average daily throughput was nearly 3.0 BCF per day, up 13% versus the first quarter of last year. In our power business, our power assets were available to deliver power when it was needed most, resulting in an increase to comparable EBITDA of 14% versus the first quarter of last year. As you all know, Bruce Power produces 30% of the electricity in Ontario, And Bruce met continued demand in the first quarter by providing and delivering availability of 92%. We continue to expect average availability in the low 90s percent range for 2024, which is a significant and gradual improvement over the last decade or so. The Bruce Power Major Component Replacement Program to extend the asset life for the next 40 years continues to progress on plan. Unit 3 is tracking cost and schedule, and Unit 4 received the ISO's approval to begin in early 2025. Our Alberta cogeneration fleet also delivered strong performance and reliability in the quarter with overall portfolio availability of 98.7%. There continues to be strong demand for our transportation service in our liquids business, and Keystone is meeting this demand, achieving 96% operational reliability in the first quarter. This operational strength supported a 28% increase in comparable EBITDA as compared to the first quarter of last year. Turning to Southbow and the proposed spin-off of the liquids pipeline business, Bevan and the Southbow team continue to make meaningful progress towards the Southbow business transitioning to a standalone public company. We are confident we will have a successful launch of an independent Southbow in late Q3 or Q4 of this year. We do not anticipate any material dis-synergies related to Southbow as the liquids business was operated mostly as a standalone business within the broader TC Energy, and we intend to offset any potential dis-synergies in the year in which they would have otherwise been incurred. Further, the team plans to develop the Black Rod Connection project. This project is expected to underwrite a meaningful portion of South Bow's near-term comparable EBITDA growth targets. We issued our management information circular on April 16th, And you may have seen that leading proxy advisor, ISS, has come out with a supportive recommendation for the transaction. As described in the circular, favorable tax rulings have now been received in both Canada and the US. Our 2024 annual and special meeting will be held on June 4th. I hope you take the time to look at the information in the circular and on our website to support your voting decision. And now I'll turn the call over to Joel.