TC Energy Corporation

conference call as a reminder all participants are in listen-only mode and the conference is being recorded after the presentation there will be an opportunity to ask questions to join the question queue you may press star than one on your telephone keypad should you need assistance during the conference call you may signal an operator by pressing star than zero I would now like to turn the conference over to Gavin Wiley vice president investor relations Please go ahead.

Thank you very much and good morning. I'd like to welcome you to TC Energy's 2024 fourth quarter conference call. Joining me are Francois Poirier, President and Chief Executive Officer, Sean O'Donnell, Executive Vice President and Chief Financial Officer, along with other members of our senior leadership team. Francois and Sean 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'll 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. I'll remind you today that 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 with the U.S. Securities Exchange Commission. Finally, during the presentation, we will refer to non-GAAP measures that provide additional information on TC Energy's operational and financial performance. However, these measures may not be comparable to similar measures presented by other entities. A reconciliation of various GAAP and non-GAAP measures is contained in the appendix of this presentation. With that, I'll turn it over to Francois.

Thanks, Gavin, and good morning, everyone. 2024 has been a year of significant achievement and milestones for TC Energy, and we're continuing to deliver on our strategic priorities. First, we're proud to report the best safety performance for our company in the past five years. As I've mentioned previously, we firmly believe that outstanding safety practices lead to superior operational performance, which of course drives strong financial results. So in 2024, we increased comparable EBITDA from continuing operations by 6% compared to 2023. We successfully completed the spinoff of our liquids business and the declaration of commercial and service for Coastal GasLink. We successfully placed $7 billion of assets into service while reducing our net capital expenditures by 10%. and have identified an additional $1.3 billion of capital reductions to be realized in 2026 and 2027. With strong EBITDA performance, lower capital expenditures, and completed asset sales, we have significantly strengthened our balance sheet, which Sean will address further. Finally, we're making substantial progress on our major projects, including Bruce Powers Unit 3 MCR, and of course, Southeast Gateway that remain on cost and schedule. Our public-private partnership with CFE on Southeast Gateway has been a huge success, delivering the project 13% below our original budget by leveraging the strength of both the CFE and TC Energy. On January 20th, we completed the final golden welds and reached mechanical completion a monumental achievement for both Mexico and TC. In mid-January, we met with the Secretary of Energy and the CFE, and all parties continued to be aligned in finalizing the remaining project completion activities in order to achieve commercial in service of Southeast Gateway on May 1st. At a macro level, President Scheinbaum recently unveiled her Plan Mexico 2030, This plan targets moving Mexico's economy from 12th largest overall to 10th spot in six years and aims to attract over US$270 billion in investments, in part through public-private partnerships such as ours. We believe there's strong alignment between the priorities of the government and CFE and the role natural gas deliveries TC Energy enables. Our partnership with the CFE will remain a critical part of achieving the goals outlined in Plan Mexico. I want to thank our dedicated teams for their tireless efforts on the project and reiterate that this marks a material inflection point for TC Energy. Underpinned by wide-scale electrification, Natural gas and electricity are projected to drive 75% of the growth in final energy consumption between now and 2035. This growth includes a threefold increase in LNG exports, strong growth in power generation driven by coal retirements and data center demand, LDC reliability needs, and a material increase in Ontario's demand for additional nuclear generation capacity that all aligns with our North American footprint. Reflecting this opportunity, we recently announced five new growth projects with build multiples in the five to seven times range. The Pulaski and Maysville projects represent a combined investment of over US $700 million on our Columbia Gulf system and will facilitate coal to gas conversions at two existing power plants. The US $300 million Southeast Virginia Energy Storage Project is an LNG peaking facility that will serve an LDC's growing winter peak day load. At Bruce Power, we are progressing the Stage 3a of Project 2030, which will provide incremental capacity of 90 megawatts. When complete, Project 30 will add approximately 700 megawatts of incremental capacity. so we expect total Bruce output to reach over 7,000 megawatts post-MCR and Project 2030. Additionally, on January 31, we submitted to the Ontario ISO the final basis of estimate for Bruce Power's latest nuclear project, the Unit 5 major component replacement. The refurbishment is expected to extend Unit 5's operational life by over 35 years. Let's take a closer look at Bruce Power and our power and energy solutions business in Ontario. The Ontario ISO projects an approximately 69,000 megawatt shortfall in total installed capacity by year 2050, driven by industrial expansion, data center developments, and population growth. Nuclear power and storage will be essential components to meeting Ontario's demand. we are actively involved in several key projects, including not only Bruce Power's MCR program, but potential future expansion at Bruce C and the Ontario Pumped Storage Project. In January, we announced that TC Energy and the Saugeen Ojibwe Nation will begin pre-development work on the Ontario Pumped Storage Project, supported by the Ontario government's investment of up to $285 million to develop a detailed cost estimate and environmental assessments to further assess its feasibility. On the next slide, this chart illustrates our growth visibility through the end of the decade, and we will continue to add to this backlog. Our capacity to sanction incremental projects through the end of the decade is represented by the white space between our net capex limit of $6 to $7 billion and the colored bars. Collectively, this totals approximately $8 billion between 2026 and 2030. Given the backlog of development projects we are pursuing, we anticipate filling the majority of this remaining project capacity by the end of 2026 with lower risk projects that can deliver attractive build multiples of five to seven times. Looking at 2026 specifically, we will aim to fill that spare capacity through a combination of small projects that have short cycle to cash flow, and we are evaluating bringing forward capital expenditures from 2027 and 2028 to create additional capacity for new growth projects in those years. We'll continue to assess projects in our pending approval bucket represented by the gray bars. to ensure we have the flexibility for capital to compete for higher returning projects. Our goal is to create significant value by maximizing the spread between our earned returns and our cost of capital. Now, a word on tariffs. We continue to assess the ongoing trade negotiations between the US, Canada, and Mexico. there is significant energy flow between three countries, making our energy markets highly interdependent. We believe the 30-day pause on potential tariffs will support increased engagement with North America's leaders in order to reach an agreement that will benefit consumers across the continent. Given that 97% of our comparable EBITDA is under regulated cost-of-service frameworks or take-or-pay contracts, we do not anticipate any material impact on our financial performance. Our regulated Canadian natural gas pipelines business, which transports gas to be exported to the U.S. by our shippers, is protected against higher costs or loss of volumes. And our Mexico natural gas pipelines business primarily receives gas from the southern U.S. for delivery in Mexico, And our contracts are in U.S. dollars and based on long-term take-or-pay agreements. In our power and energy solutions business, Bruce Power is the most significant contributor, and over 90% of its supply chain is based in Canada. Now, we recognize that prolonged tariffs could impact capital allocation decisions, however, Our diverse portfolio across three jurisdictions enables us to continue allocating capital to markets with sustained energy demand. We'll continue to work with our customers across all three jurisdictions to ensure safe, reliable, and competitive service. And now I'll turn the call over to Sean.