Q4 2023 TC Energy Corp Earnings Call

Thank you for standing by this is the conference operator, welcome to the TC Energy fourth quarter 2023 financial results conference call.

Operator: Thank you for standing by. This is the conference operator. Welcome to the TCEnergy fourth quarter 2023 financial results 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, then one, on your telephone keypad.

As a reminder, all participants are in listen only mode and the conference is being recorded.

The presentation, there will be an opportunity to ask questions to join the question queue. You May Press Star then one on your telephone keypad.

Operator: 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.

Should you need assistance during the conference call Mr. Glenn the operator by pressing Star then zero.

I would now like to turn the conference over to Gavin Wylie, Vice President Investor Relations. Please go ahead.

Gavin Wylie: Thanks, very much and good morning, I'd like to welcome you to TC Energy's 2023 fourth quarter Conference call. Joining me a friend swap for Ya, 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 comment.

Gavin Wiley: I'd like to welcome you to TC Energy's 2023 fourth 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 Investor 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... 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 Canadian securities regulators and with the U.S. Securities and Exchange Commission. Finally, during the presentation, we'll refer to certain non-GAAP measures that may not be comparable to similar measures presented by other entities.

Gavin Wylie: 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 remember of the media. Please contact our media team before freshwater begins I'd like to remind you that today's.

Gavin Wylie: <unk> 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 Canadian Securities regulators and with 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.

Gavin Wiley: 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 GAAP and non-GAAP measures is contained in the appendix of the presentation. With that, I'll turn the call over to Francois. Thanks, Gavin, and good morning, everyone. At the beginning of 2023, we set out to deliver on three clearly defined priorities that focused on maximizing the value of our assets: Project Execution, and Enhancing Balance Sheet Strength. And I'm pleased to report that we delivered on all three of those commitments. Our focus on safety and operational excellence resulted in high availability and several utilization records across our systems that contributed to 2023 comparable EBITDA being 11% higher compared to 2022, another record year for operational and financial results. We also announced our intention to spin off our Liquids Pipelines business to create two stand-alone investment-grade companies with greater flexibility to implement distinct strategies to unlock their full potential and deliver incremental long-term shareholder value. Our focus on project execution resulted in placing approximately $5.3 billion of projects into service on budget.

Gavin Wylie: 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 GAAP and non-GAAP measures is contained in the appendix of the presentation with that I'll turn the call over to Francois.

Francois: Thanks, Kevin and good morning, everyone.

At the beginning of 2023, we set out to deliver on three clearly defined priorities that focused on maximizing the value of our assets.

Project execution, and enhancing balance sheet strength and I'm pleased to report that we delivered on all three of those commitments.

Francois: Our focus on safety and operational excellence resulted in high availability and several utilization records across our systems contributed to 2023 comparable EBITDA being 11% higher compared to 2022, another record year for operational and.

Francois: Actual results.

Francois: We also announced our intention to spin off our liquids pipelines business to create two standalone investment grade companies with greater flexibility to implement distinct strategies to unlock their full potential and deliver incremental long term shareholder value.

Francois: Our focus on project execution resulted in placing approximately $5 $3 billion of projects into service.

Francois: On budget.

Robert Catellier: And our major projects, including CGL and Southeast Gateway, remained on track or ahead of our 2023 targets. We committed to enhance our balance sheet strength through capital rotation and successfully closed the sale of a non-controlling interest in our Columbia Pipeline, with cash proceeds totaling $5.3 billion, and that reduced our 2023 debt-to-EBITDA leverage metric by over 0.4 times, a major step toward reaching our 2024 year-end objective of 4. And with this positive momentum building into 2024, we have increased our dividend for the 24th consecutive year and reaffirmed our 2024 comparable EBITDA outlook to be between $11.2 and $11.5 billion. Now, after five years of construction and 55 million hours of work, we achieved the monumental milestone of mechanical completion on coastal gas flanks.

Francois: And our major projects, including C. G L and South East Gateway remained on track or ahead of our 2023 targets.

Francois: We committed to enhance our balance sheet strength through capital rotation and successfully closed the sale of a noncontrolling interest in our Columbia pipelines with cash proceeds totaling $5 3 billion and that reduced our 2023 debt to EBITDA leverage metric by over 0.4 times.

Francois: A major step towards reaching our 2024 year end objective of 475 times debt to EBITDA.

Francois: And with this positive momentum.

Building into 2024, we have increased our dividend, but the 24th consecutive year and reaffirm 2024 comparable EBITDA outlook to be between 11, two and $11 $5 billion.

Francois: Now after five years of construction and 55 million hours worked we achieved the monumental milestone of mechanical completion on coastal gas link.

Robert Catellier: This was one of the most technically challenging pipelines ever built in Canada, and our team applied project execution and safety excellence to deliver this project ahead of our year-end target. Following mechanical completion, we completed the required commissioning process safely in 2023, and we are now ready to deliver natural gas to LNG Canada's facility as soon as they are ready to receive it, reflecting the team's monumental efforts to achieve these milestones. As the project developer, TC Energy earned a $200 million incentive payment that was settled through a cash distribution earlier this week.

Francois: This was one of the most technically challenging pipelines ever built in Canada, and our team applied project execution and safety excellence to deliver this project ahead of our year end target.

Francois: Following the canticle completion, we completed the required commissioning process safely in 2023, and we are now ready to deliver natural gas to LNG, Canada facility as soon as they are ready to receive it.

Francois: Reflecting the teams monumental efforts to achieve these milestones as.

Francois: As the project developer TC energy earned a $200 million incentive payment that was settled through a cash distribution earlier this week.

Robert Catellier: Post-construction and reclamation activities will continue throughout 2024, with the project remaining on track with its cost estimate of approximately $14.5 billion. The success of this project is not only important for TC Energy and for our customer LNG Canada. It's a nation-building project that will provide Canada's first direct path for sustainably produced Canadian natural gas to reach global LNG markets. In Mexico, we are making meaningful progress on our Southeast Gateway Marine Pipeline. We reached a milestone in the fourth quarter when we began offshore pipe installation for the project. We've now completed 100% of the concrete weight coating on all of the offshore pipe, and the remainder of the offshore pipe installation will continue throughout this year.

Francois: Post construction and reclamation activities will continue throughout 2024 with the project remaining on track with its cost estimate of approximately 14 5 billion.

Francois: The success of this project is not only important for Tc energy and for our customer LNG, Canada.

Francois: It's a nation building project that will provide Canada's first direct path for sustainably produced Canadian natural gas to reach global LNG markets.

Francois: In Mexico, we are making meaningful progress on our southeast Gateway Marine pipeline.

Francois: We reached a milestone in the fourth quarter, when we began offshore pipe installation for the project.

Francois: We've now completed 100% of the concrete waste coding on all of the offshore pipe and the remainder of the offshore pipe installation will continue throughout this year.

And with all critical permits for construction obtained the onshore construction at all landfall sites continues to progress on plan.

Robert Catellier: And with all critical permits for construction obtained, the onshore construction at all landfall sites continues to progress on plan. Importantly, the project continues to track schedule and expected cost of U.S. $4.5 billion as we continue to see benefits from sanctioning this project under our enhanced capital allocation governance process that included a Class III estimate prior to our final investment decision. Now, while our utility-like assets do not carry any material volumetric or commodity price risk, continued high utilizations throughout the fourth quarter continue to reflect volume growth and the incremental demand for our services that underpins our future investment within our integrated natural gas business. Total NGTL system deliveries in Canada averaged 14.5 BCF a day, while our investment grew by 9% year over year. In the U.S., various pipelines achieved record throughput volumes, including our GTN system, which achieved an all-time delivery record of 3.1 BCF in November.

Francois: Importantly, the project continues to track schedule and expected cost of U S $4 $5 billion as we continue to see benefits from sanctioning. This project under our enhanced capital allocation governance process that included a class III estimate prior to a final investment decision.

Francois: Now, while our utility like assets do not carry any material volumetric our commodity price risk continued high utilization throughout the fourth quarter continued to reflect volume growth and the incremental demand for our services that underpins our future investments.

Within our integrated natural gas business total NGL system deliveries in Canada averaged $14 five Bcf a day, while our investment base.

Francois: Grew by 9% year over year.

Francois: In the U S. Various pipelines achieved record throughput volumes, including our <unk> system, which achieved an all time delivery record of three one bcf.

Francois: In November.

Robert Catellier: And our Mexico pipeline's daily throughput was also higher, averaging 2.7 BCF per day, which is up 30% compared with the fourth quarter of 2022 level. In our power and energy solutions business, our focus on operational excellence centers around our assets being available to deliver power when it is needed most, and our Alberta Cogent Power Fleet achieved 99% availability in the fourth quarter. And Bruce Power also had strong performance and averaged 92% availability throughout 2023, which is well above our historical average. Bruce Power Unit 6 returned to commercial operations in 2023 following its major component replacement outage ahead of schedule and within budget. Bruce also submitted its final basis of estimate for the Unit 4 MCR with the ISO in the fourth quarter, and we have now received the ISO's approval last week.

Francois: And our Mexico pipelines daily throughput was also higher averaging two seven Bcf per day, which is up 30% compared with the fourth quarter of 2022 levels.

Francois: And our power and energy solutions business, our focus on operational excellence centers around our assets being available to deliver power when it was needed most.

Francois: In our Alberta, Cogent power fleet achieved 99% availability in the fourth quarter and at Bruce Power also had strong performance and averaged a 92% availability throughout 2023, which is well above our historical averages.

Francois: Bruce Power's unit six returned to commercial operations in 2023, following its major component replacement outage ahead of schedule and within budget.

Francois: Bruce also submitted its final basis of estimate for the unit four MCR with the ISO in the fourth quarter and we have now received the <unk> approval last week.

Robert Catellier: Unit 4 will be the third of six units in the Bruce MCR program, where we are extending its asset life for the next 40 years. This exceptional, emissionless asset produces 30% of the electricity in Ontario. On Southbow, Bevan and the team continue to make progress on the proposed spin-off of our liquids pipelines business into a stand-alone, investment-grade entity. Vandafo has been named as incoming Senior VP and CFO.

Francois: Unit four will be the third of six units in the Bruce MCR program, where we are extending its asset life for the next 40 years. This exceptional emission less asset produces 30% of the electricity in Ontario.

Francois: On South pole Bevan and team continue to make progress on the proposed spin off of our liquids pipelines business into a standalone investment grade entity.

Francois: <unk> has been named as incoming senior VP and CFO with over 30 years of experience in the energy industry, including being the CFO of a public company for eight years van will be instrumental in leading south both financial and strategic affairs.

Robert Catellier: With over 30 years of experience in the energy industry, including being the CFO of a public company for eight years, Van will be instrumental in leading South Bow's financial and strategic affairs. Additionally, Lori Morata was named as incoming Senior VP and General Counsel. Lori will oversee South Bow's legal, compliance, and regulatory activities, bringing over 20 years of experience in the energy industry and 30 years overall as a lawyer. For the next step... We expect our proxy circular will be filed in the first half of this year, and we remain on track to advance a shareholder vote by mid-year. It is expected that we will hold our AGM concurrently with the shareholder vote on the spinoff transaction. Now, I'll turn the call over to Joel. Thanks, Francois.

Francois: Additionally, lowering mahratta was named as incoming senior VP and general counsel.

Francois: Laurie will oversee south both legal compliance and regulatory activities, bringing over 20 years of experience in the energy industry.

Francois: 30 years overall practicing law.

Francois: For next steps, we expect our proxy circular will be filed in the first half of this year and we remain on track to advance a shareholder vote by mid year.

Francois: It is expected that we will hold our AGM concurrently with a shareholder vote on the spin off transaction.

Francois: And now I'll turn the call over to Joel.

Thanks Francois.

Joel Hunter: Strong operational performance during the fourth quarter delivered 16% year-over-year growth in comparable EBITDA. The primary driver of this growth relates to increased comparable EBITDA from our Canadian natural gas pipelines business, largely related to the recognition of a $200 million incentive payment upon meeting certain project milestones on coastal gas links. This amount was settled through a cash distribution on February 12, 2024, and it was recognized as income from equity investments in our consolidated income statement for the year ended December 31st, 2023. I'll note that, even when excluding the $200 million incentive payment, we delivered approximately 8% growth in comparable EBITDA versus fourth quarter 2022. As Francois mentioned, our base business performed exceptionally well during the fourth quarter, and throughout 2023, our team safely placed approximately $5.3 billion of projects into service on budget. We also delivered a 24% increase in quarterly comparable earnings relative to last year. This largely resulted from increased comparable EBITDA, partially offset by higher interest expense and higher net income attributable to non-controlling interests following the Columbia sale in 2023.

Joel Hunter: Strong operational performance during the fourth quarter delivered 16% year over year growth in comparable EBITDA.

The primary driver of this growth relates to increased comparable EBITDA from our Canadian natural gas pipelines business.

Joel Hunter: Largely related to the recognition of a $200 million incentive payment upon meeting certain project milestones on coastal gas link.

Joel Hunter: This amount was settled through a cash distribution on February 12, 2024, and it was recognized as income from equity investments in our consolidated income statement for the year ended December 31 2023.

Speaker Change: I'll note that even when excluding the $200 million incentive payment, we delivered approximately 8% growth in comparable EBITDA versus fourth quarter 2022.

Speaker Change: As Francois mentioned, our base business performed exceptionally well during the fourth quarter and throughout 2023, our teams safely placed approximately $5 3 billion of projects into service on budget.

Speaker Change: We also delivered a 24% increase in quarterly comparable earnings relative to last year.

Speaker Change: This largely resulted from increased comparable EBITDA, partially offset by higher interest expense and higher net income attributable to noncontrolling interests. Following the Columbia sale in 2023.

Joel Hunter: For 2024, we expect comparable EBITDA to be between $11.2 to $11.5 billion, consistent with what we announced at our November 2023 Investor Day. This growth is primarily driven by an increase in the NGTL system, the full year impact of projects placed into service in 2023, and approximately $7 billion of new projects expected to be placed in service this year. Comparable earnings per common share are expected to be lower than in 2023, largely due to higher net income attributable to non-controlling interests related to the Columbia sale.

Speaker Change: For 2024, we expect comparable EBITDA to be between 11, two and two <unk> 5 billion consistent.

Speaker Change: Consistent with what we announced at our November 2023 Investor Day.

Speaker Change: This growth is primarily driven by an increase in the NGL system. The full year impact of projects placed into service in 2023, and approximately $7 billion of new projects expected to be placed in service this year.

Speaker Change: Comparable earnings per common share is expected to be lower than 2023, largely due to higher net income attributable to noncontrolling interests related to the Columbus sale.

Speaker Change: Total net capital expenditures for this year are expected to be approximately eight to eight 5 billion.

Joel Hunter: Total net capital expenditures for this year are expected to be approximately $8-8.5 billion. I'll now discuss a few highlights from our 2024 outlook. Within our integrated natural gas pipelines business, comparable EBITDA is expected to be consistent in Canada due to the continued growth of our NGTL system, partially offset by the absence of the coastal gas link incentive payment that was recognized this year, hire in the U.S., largely due to assets placed in service in 2023 and projects we expect to place into service in 2024, including Gillis Access and GTN Express, and hire in Mexico, with growth underpinned by Without taking into account impacts related to the proposed spinoff, comparable EBITDA from the liquids pipelines business is expected to be consistent with 2023.

Speaker Change: I will now discuss a few highlights from our 2024 outlook.

Speaker Change: Within our integrated natural gas pipelines business comparable EBITDA is expected to be consistent in Canada due to the continued growth of our NGL system, partially offset by the absence of the coastal gas link incentive payment that was recognized this year high.

Speaker Change: Higher in the U S largely due to assets placed in service in 2023 and projects, we expect to place into service in 2024, including Gillis access and <unk> Express and higher in Mexico with growth underpinned by a full year of incremental revenue from the BTR lateral that was placed into service in Q3 2023.

Yes.

With Bruce Power unit, six having returned to service comparable EBITDA from our power and energy solutions business is also expected to increase relative to 2023.

Speaker Change: Without taking into account impacts related to the proposed spinoff comparable EBITDA from the liquids pipelines business is expected to be consistent with 2023.

Speaker Change: Consistent.

Joel Hunter: Consistent with what we showed on Investor Day, and excluding contributions from the Liquids Pipelines business, shown on the left-hand side of this slide, Comparable EBITDA out to 2026 is expected to be in the range of $11.2 to $11.5 billion. Growth out to 2026 is underpinned by high-quality assets that are expected to be placed into service, further supported by the highly rate-regulated and long-term contracted nature of our business. I'll note that recent announcements related to our Heartland project and the Bruce Unit 4 MCR were included in our Net Capital Expenditures Outlook shown at Investor Day. However, these projects do not change our commitment to limiting net capital spending to $6-7 billion with a bias to the lower end in 2025 and beyond. Looking to the right-hand side of this slide, Southbow's long-term outlook also remains consistent with what Bevin showed at Investor Day.

Speaker Change: With what we showed at Investor day, and excluding contributions from the liquids pipelines business shown on the left hand side of this slide comparably EBITDA out to 2026 is expected to be in the range of $11 two to $11 5 billion.

Speaker Change: Growth out to 2026 is underpinned by high quality assets that are expected to be placed into service further supported by the highly rate regulated and long term contracted nature of our business.

Speaker Change: I will note that recent announcements related to our Heartland project and Bruce unit four MCR were included in our net capital expenditures outlook shown it in Investor Day. These projects do not change our commitment to limited net capital spending to $6 billion to $7 billion.

Speaker Change: With a bias to the lower end in 2025 and beyond.

Speaker Change: Looking to the right hand side of this slide <unk> long term outlook also remains consistent with what Devin showed at Investor day.

Joel Hunter: The South Bow team expects to see comparable EBITDA growth averaging 2-3% out to 2026, delivering low-risk, double-digit shareholder returns. Devon and his team have the intention to have the majority, if not all, of the capital structure in place prior to the spinoff, subject to a successful shareholder vote. Anticipated proceeds from the senior and subordinated debt issued at South Bow will be used to repay approximately $8 billion of TC Energy debt and help meet future funding requirements. Underpinned by our strong performance last year, TCEnergy's Board of Directors has declared a first quarter 2024 dividend of $0.96 per common share, which is equivalent to $3.84 per share on an annualized basis, representing a 3.2% year-over-year increase.

The south both team expects to be see comparable EBIT growth, averaging 2% to 3% out to 2026, delivering low risk double digit shareholder returns.

Speaker Change: Devin and his team have the intention to have the majority if not all of the capital structure in place prior to the spinoff subject to a successful shareholder vote and.

Speaker Change: The anticipated proceeds from the senior and subordinated debt issued itself, though will be used to repay approximately $8 billion of PC energy debt and help meet future funding requirements.

Speaker Change: Underpinned by a strong performance last year TC Energy's Board of Directors has declared a first quarter 2024 dividend of <unk> 96 per common share, which is equivalent to $3 84 per share on an annualized basis, representing a three 2% year over year increase.

Robert Catellier: This is the 24th consecutive year the board has raised a dividend, which is foundational to the enduring value proposition of TC Energy. Thank you, and I'll pass the call back to Francois. Thanks, Jewel.

Speaker Change: This is the 24th consecutive year. The board has raised the dividend, which is foundational to the enduring value proposition of Tc energy.

France: And I'll pass the call back to France, what.

France: Thanks, Joel we.

Robert Catellier: We had a great success in 2023 focusing on executing a clearly defined set of priorities that directly align to our strategic vision and value proposition. So for 2024, there should be no surprise that our strategic priorities will look very similar to 2023.

France: We had a great success in 2023, focusing on executing a clearly defined set of priorities that directly aligned to our strategic vision and value proposition. So.

France: So for 2024, there should be no surprise that our strategic priorities will look very similar to 2020 threes.

France: First we will continue to maximize the value of our assets through safety and operational excellence and by successfully executing the spinoff of <unk>.

Robert Catellier: We'll continue to maximize the value of our assets through safety and operational excellence and by successfully executing the spinoff of Southbow. Second, we will remain focused on project execution, delivering on-time and on-budget, including Bruce Powers MCR-3 and advancing Southeast Gateway's mechanical completion by the end of 2024. And third, we will continue our path to achieving and sustaining our 4.75 debt to EBITDA upper limit by the end of 2024 by advancing our divestiture program and continuing to streamline our business through our efficiency efforts. By executing on our high-quality secured capital program, we expect to deliver 2024 comparable EBITDA of $11.2 to $11.5 billion and incremental long-term value for our shareholders. With that, I'll turn it over to the operator for questions. We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad.

France: Second we will remain focused on project execution.

France: Delivering on time and on budget.

France: Including Bruce Power's MCR, three and advancing southeast gateways mechanical completion by the end of 2024.

France: And third we will continue our path to achieving and sustaining our $4 75 debt to EBITDA upper limit by the end of 2024 by advancing our divestiture program and continuing to streamline our business through our efficiency efforts.

France: By executing on our high quality secured capital program, we expect to deliver 2024 comparable EBITDA of $11 two to $11 5 billion and incremental long term value for our shareholders.

Speaker Change: With that I'll turn it over to the operator for questions.

Speaker Change: We will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad.

Operator: You will hear a tone acknowledging your request. Please limit your questions to two, and if you should have additional questions, please re-enter the queue. If you are using a speakerphone, please pick up your handset before pressing any key.

Speaker Change: You will hear insulin acknowledging your request.

Speaker Change: Please limit your questions to queue and if you should have additional questions. Please re enter the queue.

Speaker Change: If youre using a speakerphone please pick up your handset before pressing any keys to it.

Operator: To withdraw your question, please press the star then. The first question comes from Rob Hope of Scotia. Please go ahead. Good morning, everyone.

Speaker Change: Draw. Your question. Please press Star then two.

Speaker Change: The first question comes from Rob Hope of Scotiabank.

Robert Hope: Please go ahead.

Robert Hope: Good morning, everyone questions on Mexico, Southeast Gateway has over half the spend with the door already as we take a look into 2024, what key milestones should we be watching for what do you view as the highest risk factors and how it spend you.

Robert Hope: Questions on Mexico. Southeast Gateway has over half the spend out the door already. You know, as we take a look into 2024, what key milestones should we be watching for? What do you view as the highest risk factors?

Robert Hope: And how is the spend, you know? Have you seen an increase in any contingencies there? Hey, good morning, Rob. This is Stan.

Robert Hope: Have you seen a increase in any contingencies there.

Robert Hope: Hey, good morning, Rob This is Stan as Francois pointed out we have but no change in our cost of schedule and we're continuing to track to the $4 5 billion dollar cost estimate in summer 2025 and service date.

Stan: As Francois pointed out, we have no change in our cost or schedule, and we're continuing to track to the $4.5 billion cost estimate and summer 2025 in-service date. We've spent about $2.5 billion or so to date. We'll spend another $1.5 billion this year and about $500 or $600 million closing things out in 2025. Just a couple of highlights.

Speaker Change: We spent about $2 $5 billion or so to date, we'll spend another $1 $5 billion this year and about five or $600 million closing things out in 2025.

Speaker Change: Just a couple of highlights as of earlier. This week, we've laid about 225 kilometers, which is about 34% of our subsea pipeline in the Gulf of Mexico. The work that we're doing onshore is progressing nicely at all three of our landfill falls as a matter of fact at the ACO, we actually completed our drill.

Stan: As of earlier this week, we've laid about 225 kilometers, which is about 34 percent of our subsea pipeline in the Gulf of Mexico. The work that we're doing onshore is progressing nicely at all three of our landfalls. As a matter of fact, at Podesio, we actually completed our drill last week on time and on schedule.

Speaker Change: Last week on time and on schedule. The microtel that we're building in a class of Copa should be completed sometime by the end of this month.

Stan: The microtunnel that we're building in Coatzacoca should be completed sometime by the end of this month. So, going forward, when I think about the next milestones, we should have all of the deep water portion of the subsea pipeline completed by early summer, and the shallow water tie-in work should be completed by the end of the summer.

Speaker Change: So going forward when I think about next milestones we should have all of the deepwater portion of the subsea pipeline completed by early summer.

Speaker Change: The shallow water tie in work should be completed by the end of the summer and then the compressor work will be completed this fall. So that we could then turn our attention to our commissioning activities and putting the project in service.

Stan: And then the compressor work will be completed this fall so that we can then turn our attentions to commissioning activities and putting the project in service for summer 2025. So no changes to capital costs, no changes to contingencies at this point in time, but the project is progressing nicely as planned. Excellent.

Speaker Change: For summer 2025, so no changes to capital costs no changes to contingencies at this point in time, but the project is progressing nicely as planned.

Speaker Change: Excellent.

Speaker Change: Then just keeping on Mexico is there any updated thinking on how to get to the 10% Mexico EBITDA limits and is this more of a near term or longer term targets or where can we see some additional clarity there.

Robert Catellier: And then just keeping on Mexico, is there any updated thinking on how to get to the 10% Mexico-Ibidal limit? And you know, is this more of a near-term or longer-term target? Or where can we see some additional clarity there? Rob, it's Francois.

Rob It's Francois I'll take that one as we've said before we remain committed to reducing our exposure as a percentage of consolidated EBITDA.

Robert Catellier: I'll take that one. As we've said before, we remain committed to reducing our exposure as a percentage of consolidated EBITDA. That 10% threshold was prior to the spin. Post-spin, if we're successful, probably more in the 12% range. We are exploring a variety of different avenues to begin lowering our exposure. We are prepared to transact in 2024, but we're not going to give up shareholder value to do that. We're progressing nicely on construction of Southeast Gateway, so we're going to take our time and do this in an orderly fashion and look forward to being reducing to that 10 to 12 percent level in the next two or three years. Thank you. The next question comes from Sarisa Chen of Barclays. Please go ahead. Good morning.

That 10% threshold was prior to the spin.

Speaker Change: Hi.

Speaker Change: <unk> spend if we're successful probably more in the 12% range.

Speaker Change: We are exploring a variety of different avenues to begin lowering our exposure.

Speaker Change: We are prepared to transact in 2024.

But we're not going to give up shareholder value to do that.

Speaker Change: We're progressing nicely on.

Speaker Change: On construction on southeast Gateway.

Speaker Change: So we're going to take our time and do this in an orderly fashion and.

Speaker Change: Look over the next two or three years to be reducing to that 10% to 12% level.

Speaker Change: Thank you.

Speaker Change: The next question comes from Theresa Chen of Barclays.

Theresa Chen: Please go ahead.

Theresa Chen: Hi, good morning, maybe hitting on that last point and.

Teresa: Maybe hitting on that last point and putting it in relation to the broader asset divestiture program, as you seek to de-lever towards your target by the end of this year, can you provide any updates on the progress of additional asset sales this year and just the steps from here, transaction timing, size, and such, anything we can think about there? Teresa, we have a number of processes in the market right now. So I'm going to maintain deal discipline to the fullest extent possible but still try and help you here.

Theresa Chen: That brought our asset divestiture program.

Theresa Chen: If you seek to Delever.

Theresa Chen: This year can you provide any updates on the progress of additional asset sales this year and just you know the.

Speaker Change: Steps from here in transaction timing and size and such anything you can think about there.

Speaker Change: Teresa we have a number of processes in market right now so I'm going to maintain.

Speaker Change: Deal discipline to every extent possible, but still try and help you here.

Speaker Change: As we've mentioned in the past, we're not looking to do a single transaction to achieve the $3 billion like we did last year with the very sizable GSP transaction.

Robert Catellier: As we've mentioned in the past, we're not looking to do a single transaction to achieve the $3 billion like we did last year with the very sizable GIP transaction. Think of us doing anywhere from, let's say, two to four transactions to get to that $3 billion number. Those smaller transaction sizes tend to widen the buyer universe because more people can write both check sizes. So we have seen good interest in the different processes that we have underway. These processes tend to have their own natural pace and cadence.

Think of us doing anywhere from let's say two to four transactions to get to that $3 billion number.

Speaker Change: Those smaller transaction sizes tend to widen the buyer universe, because more people can write those check sizes. So we have seen good interest in the different processes that we have underway.

Speaker Change: These processes tend to have their natural pace and cadence.

Robert Catellier: We're hopeful that we'll be able to make at least one announcement in the first half of the year, but again, we're going to be disciplined and make sure that we're preserving value for our shareholders. That is helpful. And then turning to Southbow and the anticipated, you know, growth post spin in order to aid in its own deleveraging. When we think about the potential upside opportunity in MarketLink going forward, just given the many moving pieces in that mid-continent or Permian to Gulf Coast part of the world, you have certain competitors expanding capacity, others having contract roll-off near term, others converting crude back to NGL service, and vice versa. How should we think about MarketLink's potential expansion of earnings with this background? Theresa, this is Bevan. You basically just acknowledged the premise of the spin.

Speaker Change: We're hopeful that we'll be able to make at least one announcement in the first half of the year, but again.

Speaker Change: We're going to be disciplined and make sure that we're preserving value for our shareholders.

That is helpful. Thank you and then turning on Q itself, though and the anticipated.

Speaker Change: Growth post spin and in order to aid in its own deleveraging when we think about the potential upside opportunity in market link and going forward just given the many moving pieces and in that Nick content or Permian to Gulf Coast are part of the world. So you have certain competitors.

Speaker Change: Standing capacity, others, having contract roll off you know near term and others converting crude back to NGL service and vice versa.

Speaker Change: How should we think about marketing links and potential expansion of earnings with this background.

Devin: Theresa this is devin.

Theresa Chen: You basically just acknowledged the premise for the spin there's a tremendous opportunity for us.

Bevan: There's a tremendous opportunity for South Bow to address the tremendous demand that we've been seeing in the Gulf Coast. We had over 150,000 barrels of additional demand on our market link system here in the last half of 2023. And that allowed us to underpin over 200,000 barrels a day of incremental contracts on that market link system for the balance of the year. So we accelerated a bit of the growth that we were anticipating in 2024 into 2023. A lot of that came from, I've shared previously, you know, the fingers and toes strategy. So we added the Port Menchis link last year on time and on budget, and that began seeing consistent flows, providing that additional outlet for those customers on the market link. In addition, we brought on the capability to hit tidewater.

Devin: South bow to address the tremendous demand that we've been seeing in the Gulf Coast, we had over 150000.

Devin: Barrels additional demand on our market link system here in the last half of the of 2023.

Devin: And that allowed us to underpin over 200000 barrels a day of incremental contracts on that market link system here in the balance of the year. So we accelerated a bit of the growth that we're anticipating in 'twenty four into 'twenty three.

Devin: A lot of that came from.

Devin: Shared previously the fingers and toes strategy. So we added the port Neches link last year on time and on budget and that.

Devin: Began seeing consistent flows providing that additional outlet for those customers on market link. In addition, we brought on the capability to hit Tidewater. So as you mentioned many are providing different access to tidewater, we have six terminals that can now provide.

Bevan: So, as you mentioned, many are providing different access to tidewater. We have six terminals that can now provide that capability for our customers. So our South Bow strategy is to leverage that pre-capitalized system on the Gulf Coast, but we're also seeing similar opportunities in Alberta where we have an underutilized or underdeveloped system. We've already capitalized our Grand Rapids system, for example, and bringing on additional volumes onto that system is very accretive. And so that underpins our ability to have our own capital structure to attend to those opportunities is a really strong opportunity for our Thank you. The next question comes from Praneet Satish of Wells Fargo. Please go ahead. Thanks. Good morning. Maybe we can just go back to the asset sales for a second. I'm just wondering how the interest rate environment could influence the timing of asset sales over the balance of the year.

Devin: That capability for our customers. So our strategy is to leverage that pre capitalized system on the Gulf coast.

But also we're seeing similar opportunities in Alberta, where we have an.

Devin: Underutilize our under we've already capitalized are at Grand Rapids system for example, and bringing on additional volumes onto that system is very accretive and so that underpins our ability to have our own capital structure to attend to those opportunities as a really strong opportunity for our share.

Devin: Holders.

Speaker Change: Thank you.

Speaker Change: Okay.

Wells Fargo: The next question comes from Preneed cities of Wells Fargo. Please go ahead.

Speaker Change: Thanks, Good morning, maybe.

Speaker Change: Maybe just back to the asset sales for a second I'm just wondering how the the interest rate environment could influence the timing of asset sales over the balance of the year.

Praneet Satish: I mean, I know you mentioned you expect to potentially transact at least one deal in the first half of this year, but I think the general consensus is that interest rates will fall over the balance of the year. So, does that favor maybe waiting until the latter half of the year to announce more asset sales? I'm just curious about your thoughts on that and whether that makes a difference in how you perceive the cadence of sales. Thanks, Praneeth. Interesting question.

Speaker Change: I mean, I know you mentioned you expect to potentially transact at least one deal in the first half.

Speaker Change: Of this year, but I think the general consensus is that interest rates will fall over the balance of the year. So does that favor maybe waiting towards the latter half of the year to announce more asset sales.

Speaker Change: Curious for your thoughts on that and whether that makes a difference in how you perceive the cadence of sales.

Speaker Change: Thanks, <unk> interesting question.

Robert Catellier: As I said in Teresa's prior question, these transactions tend to, you know, have their own cadence, and momentum is, you know, a very powerful thing. No question that in the current environment, certainly when you're thinking about financial buyers, the underlying interest rate environment does have an impact on valuation. We're being really disciplined here. We're not in a rush. The agencies have given us feedback that we do have until the end of 2024 to get to our below the upper limit of $4.75 trillion debt, and we're going to take our time. And it's not lost on us that as monetary policy starts to ease in the second half of the year, we may benefit from that. But having said that, our first priority is to achieve a minimum of $3 billion in divestitures and to do that by the end of the year. And while we're not going to undertake fire sales, if we see reasonable value today, we will transact on it. I got it.

Speaker Change: As I said in the <unk> prior question are.

Speaker Change: These transactions tend to.

Speaker Change: Have their own cadence and momentum is a very powerful thing.

Speaker Change: No question that in the current environment, certainly when you're thinking about financial buyers that the underlying interest rate environment does have an impact on valuation.

Speaker Change: Being really disciplined here, we're not in a rush the agencies have given us the feedback that we do have until the end of 2024 to get to our below the upper limit of $4 75 debt to EBITDA and we're going to take our time and it's not lost on us that.

Speaker Change: As monetary policy starts to ease in the second half of the year, we may benefit from that but having said that our first priority is to achieve a minimum of $3 billion of divestitures and to do that by the end of the year and while we're not going to undertake fire sales, if we see reasonable value today, we will.

Speaker Change: <unk> Act on it.

Speaker Change: Got it thank you.

Praneet Satish: And then it looks like, you know, gas deliveries from power plants to power plants that another record. Just wondering if you could talk about how much of this uptick is being driven by demand from data centers, as that seems to be picking up quite a bit here, and whether you're seeing any data centers reach out to you directly for gas supply to maybe power cogen units or go around the grid. Hey, Pernit, this is Stan.

Speaker Change: And then it looks like gas deliveries from from power gas deliveries to power plants that another record I'm. Just wondering if you could talk about how much of this uptick is being driven by demand from data centers.

Speaker Change: Is that seems to be picking up quite a bit here and whether youre seeing any data centers reach out to you directly.

Speaker Change: For gas supply to maybe power co Gen units.

Speaker Change: Go around the grid.

Speaker Change: Hey, Puneet. This is Stan I can take that one data centers as you know tend to be high demand consumers that need a constant and reliable energy source such as provided by natural gas and we are looking at several options across our footprint that includes some of our smaller pipes out west opportunities on the Columbia system in Virginia in May.

Stan: I can take that one. Data centers, as you know, tend to be high-demand consumers that need a constant and reliable energy source, such as that provided by natural gas, and we are looking at several options across our footprint. That includes some of our smaller pipes out west, opportunities on the Columbia system in Virginia, and maybe most recently on A&R, where the assets that we have in Mount Pleasant, Wisconsin, are going to indirectly serve Microsoft's new data center via a local distribution company that will be in between us and them. So, yes, this is a growing demand source for us and something that we are well aware of and expect to take advantage of in the future. Thank you. The next question comes from Jeremy Tonet of JPMorgan. Please go ahead. Hi, good morning.

Speaker Change: Most most recently on Anr were the assets that we have in Mount Pleasant, Wisconsin are going to indirectly serve Microsoft's new data center.

Speaker Change: Distribution company that will be in between us and them. So yes. This is a growing demand source for us and something that we are well aware of and expect to take advantage of in the future.

Speaker Change: Thank you.

Speaker Change: The next question comes from Jeremy Tonet of J P. Morgan.

Jeremy Bryan Tonet: Please go ahead.

Jeremy Bryan Tonet: Hi, good morning.

Jeremy Bryan Tonet: Good morning.

Jeremy Bryan Tonet: Morning. I just wanted to kind of expand on the LNG outlook, I guess, as well, with the moratorium in the U.S. Your thoughts, I guess, on positioning for West Coast Canada there, future growth, and you know, possible expansions on those facilities. It seems like with the cost put into those facilities overall, economies of scale would argue for further expansions. Just wondering how you see North American energy exports, you know, the outlook going forward and the impact on tariffs. I'll start at a high level there, Jeremy, and then I'll ask Stan to provide a little bit more detail. Look, we're the only gas transmission company that has a dominant footprint in all three countries, and we have access to all shores of North America. So LNG demand growth is, as our customer, is going to be a big source of our growth going forward. You're right; brownfield economics typically beat greenfield economics all day long.

Jeremy Bryan Tonet: Just wanted to kind of expand on the LNG.

Jeremy Bryan Tonet: Outlook, I guess as well with the moratorium in the U S. Just wondering.

Your thoughts I guess, some positioning for west coast, Canada their future growth.

Possible expansions on those facilities it seems like with the cost put into those facilities overall economies of scale would make would argue for further expansion, but just wondering how you see north American LNG export.

Jeremy Bryan Tonet: Outlook going forward and the impact on the Cherokee.

Speaker Change: I'll start at a high level, there Jeremy and then I'll ask Stan to provide a little bit more detail.

Stan: Look we're the only gas transmission company that has a.

Stan: Dominant footprint.

Stan: In all three countries and we have access to all shores of North America, So LNG <unk>.

Stan: <unk> growth is.

Stan: As our customer is going to be a big source of our growth going forward.

Stan: Youre right Brownfield economics, typically beat Greenfield economics, all day long so.

Stan:

Robert Catellier: So where we are already serving LNG export, we see opportunities for us to grow throughput. And Stan, over to you for a little bit more detail. Yeah, hey, Jeremy, just to maybe double-click on that, from a macro perspective, we're exporting around 14 BCF of LNG from the U.S. today. We see that growing to somewhere north of 30 BCF by the end of the decade across all of North America, with maybe three to four BCF coming from Canada and two to three BCF coming from Mexico. But you also referenced the moratorium or the stay and maybe just a couple points about it.

Stan: Where we are already serving LNG export.

We see opportunities for us to grow throughput and stand over to you for a little bit more detail.

Speaker Change: Yeah, Hey, Jeremy just maybe double click on that from a macro perspective, we're exporting around 14 Bcf of LNG from the U S. Today, we see that growing to somewhere north of 30 Bcf by the end of the decade across all of North America with that maybe three years to four Bcf coming from Canada in two to three Bcf coming from Mexico, but yes.

Speaker Change: You also referenced the moratorium or the stay and maybe just a couple of points on it. So first of all the stay impacts about 20 or so projects that are currently in the approval queue, but it does not impact projects that are already approved so projects like our <unk> project, which is slated for in service later this year and our east lateral xpress.

Stan: First of all, the stay impacts about 20 or so projects that are currently in the approval queue, but it does not impact projects that are already approved. So projects like our Gillis project, which is slated for in-service later this year, and our East Lateral Express project, which is slated for in-service in 2025, are not going to be impacted. But today, our assets transport about 25 percent of the LNG terminals, and those two projects are just going to further enhance that. On a bigger picture, though, what I would note is really the diversity of our pipeline network across North America, which is one of our biggest strengths. And we're going to continue to see strong demand for our assets across the LDC, power generation, and LNG export sector. And should a pause in LNG exports in the U.S. be extended for a significant period of time, the geographical diversity that our pipelines afford us may provide opportunities both in Mexico and Canada. And as a matter of fact, we heard Canadian Energy Minister Wilkinson express that exact sentiment just a few weeks ago.

Speaker Change: Which is slated for in service in 2025 are not going to be impacted but today, our assets transport about 25% of delivered LNG terminals and those two projects are just going to further enhance that a bigger picture, though what I would note is it really is the diversity of our pipeline network across North America, which is one of our biggest.

Speaker Change: Strength, and we're going to continue to see strong demand for our assets across the LDC power generation and LNG exports sector and should a pause and LNG exports in the U S be extended for a significant period of time, the geographical diversity that our pipelines afford us maybe wealthy opportunities both in.

Speaker Change: <unk> in Canada, and as a matter of fact that we heard that the Canadian energy Minister Wilkinson expressed that exact sentiment just a few weeks ago.

Speaker Change: Got it that's very helpful. And then maybe kind of expanding on the U S gas pipe.

Stan: That's very helpful. And, Stan, maybe kind of expanding the U.S. gas pipe network. I was just wondering, you know, as far as future growth is concerned, where do you see, I guess, more of the growth coming from? Is it just more of these kind of bolt-ons, or do you see the potential for anything like bigger brownfield expansions or even greenfield expansions here, just, you know, given the increased peaking needs for natural gas across the U.S.? Again, given our best-in-class footprint, we're going to leverage our in-corridor expansions to the greatest degree possible. So I don't see us doing a lot of greenfield expansions, particularly because it makes it more challenging on the permitting and construction front.

Speaker Change: Network out and I was just wondering you know as far as future growth is concerned where do you see I guess more of the growth coming from is it just more of these kind of bolt ons or do you see the potential for anything like bigger brownfield expansions or even greenfield expansion here, just given increased peaking needs for natural gas.

Speaker Change: Across the U S.

Speaker Change: Again, given the how our best in class footprint, we're going to leverage our in corridor expansions to the greatest degree possible. So I don't see us doing a lot of greenfield expansion, particularly it makes it more challenging on the permitting and construction front, but I continue to point out to you at the growth in the power generation sector, and our Heartland project debt.

Stan: But I continue to point out to you the growth in the power generation sector, and our Heartland project that we just announced today is another example of that, where coal-fired power generation is retiring, demand for energy continues to grow, and our assets are uniquely positioned to fill that gap. So growth in power generation, growth in LNG exports over the longer term, as well as increased connectivity with our LDC customers, I think are gonna be the main drivers for our U.S. pipe. I got it.

Speaker Change: We announced today is another example of that where.

Speaker Change: Coal fired power generation is retiring demand for energy continues to grow and all assets are uniquely positioned to fill that gap so growth in power generation.

Speaker Change: And LNG exports longer term as well as increased connectivity with our LDC customers I think are going to be the main drivers for our U S bike.

Speaker Change: Got it thank you for that I'll leave it there. Thank you.

Jeremy Bryan Tonet: Thank you for that. I'll leave it there. Thank you. The next question comes from Linda Ezergailis, TD Corporation. Please go ahead.

Speaker Change: The next question comes from Linda <unk> of TD Colin. Please go ahead.

Linda: Thank you.

Linda Ezergailis: Thank you. I'm just wondering if you can give us any update on how you're progressing with your productivity and cost-effectiveness, and others. Thank you. Where are you at in terms of identifying opportunities and, Hi, Linda. This is Stan.

Linda: Wondering if you can give us any update on how you're progressing on your productivity and cost effectiveness initiatives in your natural gas business, where are you at in terms of identifying opportunities and implementing them.

Linda: Yeah, Hi, Linda this is Stan I think you're referring to what we call. Our project focused initiative and you may recall that that is all about creating value by fundamentally changing the way, we do our work around safety operational excellence and cost and capital discipline.

Stan: I think you're referring to what we call our Project Focus Initiative, and you may recall that that is all about creating value by fundamentally changing the way we do our work around safety, operational excellence, and cost and capital discipline. Last year, we announced a target run rate of about $750 million in efficiencies that would be realized by the end of 2025. And you could think of that as being made up of things like capital reductions, expense reductions, and revenue enhancement. At the end of last year, we actually captured and implemented run rate efficiencies of about $230 million.

Stan: Last year, we announced a target run rate of about $750 million of efficiencies that would be realized by the end of 2025 and you could think of that as being made up of things like capital reductions our expense reductions and revenue enhancements.

Stan: At the end of last year, we actually captured and implement implemented run rate efficiencies of about $230 million, we expect to generate another $270 million of efficiencies by the end of this year. So we'll have a cumulative amount of around $500 million and the balance of the $750 million will be generated in 2025, So I would say.

Stan: We expect to generate another $270 million of efficiencies by the end of this year, so we'll have a cumulative amount of around $500 million, and the balance of the $750 million will be generated in 2025. So I would say things are progressing nicely and according to plan. Thank you. And maybe just as a bigger picture follow-up... Realizing that you've got a lot of priorities, I'm just wondering if you could also give us a regulatory update in terms of how you're thinking about any sort of significant natural gas pipeline filings, any sort of settlements, and with the backdrop of the Chevron doctrine being challenged as well, maybe affecting how you approach your regulatory relationships. I mean, it's been pretty foundational for the agencies being able to interpret any sort of ambiguous statutes in the U.S. and for the courts to defer to that.

Stan: Things are progressing nicely.

Stan: According to plan.

Speaker Change: Thank you and maybe just as a bigger picture follow up.

Speaker Change: Realizing that you've got a lot of.

Speaker Change: Our priorities I'm just wondering if you could also give us a regulatory update in terms of how youre thinking about any sort of significant natural gas pipeline filings are any sort of settlement and with the backdrop of the chevron doctrine being a challenge is.

Speaker Change: Well, maybe influencing how you approach your regulatory relationships I mean, it's been pretty foundational for.

Speaker Change: The agencies being able to interpret any sort of ambiguous statutes in the U S and that the courts would defer to that and if that gets you know discarded or clawed back I'm, just any sort of early thoughts on how that might shift your approach to to managing your regulatory relationships and our strategies.

Robert Catellier: And if that gets, you know, discarded or clawed back, just any sort of early thoughts on how that might shift your approach to managing your regulatory relationships and strategy. Linda, I'll start and pass it over to Stan for a bit more detail, just sort of the bigger picture, pulling up to 40,000 feet. We've had very good success getting permits for our projects. As a matter of fact, we recently received FERC approval for one of our projects in Virginia about four months early. So it's going to allow us to actually accelerate a little bit of our capital spend, which will generate incremental EBITDA earlier than we had expected, and that's going to improve the IRR of the project. As a general matter, as you know, we're spending more capital on maintenance because the utilization of our assets is so high.

Speaker Change: Linda I'll start and pass it over to Stan for a bit more detail just sort of bigger picture pulling up to 40000 feet. We've had very good success in getting permits for our projects as a matter of fact, we recently received.

Linda: FERC approval for one of our projects in Virginia about four months early so it's going to allow us to actually accelerate a little bit of our capital spend which will generate incremental EBITDA earlier than we had expected and that's going to improve the IRR of the project.

Stan: As a general matter as you know we're spending more capital.

Stan: On maintenance because the utilization of our assets is so high. So we are as a strategy in order to minimize regulatory lag in the United States is going to be continuing to file rate cases more frequently wherever we are allowed to do that and of course, we are going to be proceeding.

Robert Catellier: So we are, as a strategy, in order to minimize regulatory lag in the United States, going to be continuing to file rate cases more frequently wherever we are allowed to do that. And, of course, we are going to be proceeding in that regard in Columbia in 2025. With respect to the Chevron doctrine and some of the other details, I'll kick it over to Stan. Yeah, Linda, I would maybe preface my remarks by saying that, you know, given that we are making, as an industry and a company, long-term, large-dollar capital investments in critically needed energy infrastructure, predictability and stability in the regulatory, judicial, and legislative processes are really critical for us. I really don't see, absent there being something unforeseen, any drastic changes in terms of how we file and prosecute rape cases, for example, due to the Chevron doctrine, in that you may recall that in the U.S., most of our rape cases tend to be settled with our customers rather than litigated. Nor do I see there being any significant changes with respect to how we operate the pipeline. Given that this could lead to more litigious outcomes, we may have to build in longer lead times for originating and constructing our projects.

Stan: In that regard on on Colombia in 2025.

Stan: With respect to the Chevron doctrine and some of the other details I'll kick it over to Stan.

Stan: Yes, Linda I would maybe preface my remarks by saying that you know given that we are making as an industry and our company long term large dollar capital investments and critically needed energy infrastructure predictability and stability in the regulatory judicial and legislative process is really critical for us.

Stan: I really don't see absent there being something.

Stan: And foreseen.

Stan: A drastic changes in terms of how we.

Stan: File and prosecute rate cases for example, the Chevron doctrine.

Stan: Recall that in the U S. Most of our rate cases tend to be settled with our customers rather than litigated, nor do I see there being any significant changes with respect to how we operate the pipe.

Stan: Given that this could lead to more of the tickets outcomes. We may have to build in longer lead times for originating in constructing our projects, but at the end of the day, we need to wait and see what if anything comes out of the Supreme Court decision and then we'll respond to those changes accordingly.

Stan: But at the end of the day, we need to wait and see what, if anything, comes out of the Supreme Court decision, and then we'll respond to those changes accordingly. The next question comes from Ben Pham of BMO. Please go ahead. Hi, thanks. Good morning. Maybe to go back on the asset sale program, you mentioned a more positive backdrop year-to-date versus last year. I'm wondering, what's your lowlines

Speaker Change: Thank you.

Speaker Change: The next question comes from Ben Pham.

Ben Pham: With BMO. Please go ahead.

Hi, Thanks, Good morning, maybe to go back on the asset sale program, you mentioned more and more positive backdrop.

Ben Pham: Year to date versus last year.

Ben Pham: I'm wondering what's your willingness then too.

Ben Pham: then perhaps, execute on more than $3 billion this year and just push the leverage down even more. Ben, we have an openness to that, but it's going to be on the basis of compelling valuations in our various processes, given that we want to make sure that we achieve our $3 billion target for 2024. We've got many conversations going on. Not only is there competition within processes, but there's competition between processes, too. So to the extent we could see some compelling valuations, we would be open to considering exceeding the $3 billion target. Okay.

Ben Pham: Maybe perhaps.

Speaker Change: Execute on more than 3 billion. This this year and just pushed the leverage down even more.

Speaker Change: Ben we have an openness to that.

Speaker Change: But it's going to be on the basis of compelling valuations and our various processes.

Speaker Change: Given that we want to make sure that we achieve.

Speaker Change: Our $3 billion target for 2024, we've got many conversations going on not only is there competition within processes, but there's competition between processes so to the extent.

Speaker Change: We could.

Speaker Change: See some compelling valuations, we would be open to considering a X.

Speaker Change: <unk> the $3 billion target.

Speaker Change: Okay got it and then maybe a question on <unk>.

Ben Pham: And then maybe a question on Liquid's performance this year and going forward, just given the better result, I guess, for $2,300 million or so. But doesn't that warrant, or just more directionally, maybe a bit more upside?

Speaker Change: Liquids performance this year and going forward just given the.

Speaker Change: The better result, I guess for for 'twenty 300 million or so.

Speaker Change: Doesn't that warrant or this is more directionally maybe bit more upside.

Bevan: Thighs to your..., your middle decade e-bidder guidance for the liquid segment. So Ben, this is Bevan. Thanks for the question. As I mentioned earlier, we were able to accelerate a little bit of the growth that we were anticipating in 24 back into 23. However, I do want to temper our outlook for Q1 of this year. As you know, we have a marketing affiliate that optimizes the utilization of our Gulf Coast system primarily, and we have some accounting differences between physical and financial trades that we think will have a bit of a headwind here in Q1. So I just temper our results here in the near term. We want to reaffirm our outlook of that two to 3% long-term growth. That is, you know, we believe we'll be able to underwrite that growth consistently. And that's what we want to be, a very predictable deliverer of EBITDA growth for our shareholders. Okay, great. Thanks for tying that together.

Speaker Change: Five to your.

Speaker Change: In the middle of the decade, our EBIT guidance for liquid segment.

Speaker Change: So Ben this is Kevin.

Kevin: The question as I've mentioned earlier, we did we were able to accelerate a little bit of the growth that we're anticipating in 'twenty four back into 'twenty three I do want to temper our outlook for Q1 of this year.

Kevin: As you know we have marketing affiliates that optimizes the utilized utilization of our Gulf Coast system, primarily and we have some.

Kevin: Basically accounting differences between physical and financial trades that we think will have a bit of a headwind here in Q1. So I'd just temper our results here in the near term, we want to reaffirm our outlook of that 2% to 3% long term growth.

Kevin: That is.

Kevin: We believe we will be able to underwrite that growth consistently and thats. What we want to be is a very predictable deliverable of deliver of EBITDA growth for our shareholders.

Speaker Change: Okay, Great I think that's the kind of theater.

Brian Reynolds: Thank you. The next question comes from Brian Reynolds of UBS. Please go ahead. Hi. Good morning, everyone.

Speaker Change: Thank you.

Speaker Change: The next question comes from Brian Reynolds of UBS. Please go ahead.

Speaker Change: Okay.

Brian Reynolds: Hi, good morning, everyone.

Brian Reynolds: Maybe to follow up on some of the softball questions as it relates to TV future debt issuance were used to repay T C.

Brian Reynolds: Maybe I could follow up on some of the South Doe questions, as it relates to the future debt issuance used to repay TC. You know, just given some of the outperformance we've seen since it's been from TC, but also liquids, and now you have the $200 million CGL payment, which it sounds like that wasn't originally in the guide because you had to meet some performance metrics. Just kind of curious if we could see, you know, any evolution, whether it's a couple hundred million here or anything more material as it relates to that ultimate debt issuance to TC from Southville.

Some of the outperformance we've seen some sustained from TC, but also liquid.

Brian Reynolds: $200 million CGM.

Brian Reynolds: It sounds like that wasn't originally in the guide could you handle.

Brian Reynolds: Metrics, just kind of curious if we could see any evolution, whether it's couple of hundred million here or anything more material.

Brian Reynolds: Material as it relates to that ultimate debt issuance to TCE from some softball.

Brian Reynolds: Yes.

Bevan: Yes, Brian, this is Bevan again. First off, we are going to come out with an investment-grade rating. Post the successful shareholder vote, we'll be going out to the market, which fortunately, we've seen some improvement in the debt capital markets here since the announcement of the spin back in July. We'll look to set up that capital structure that allows us to underwrite future performance. If we're able to, we have to balance the needs of both TC and Southbow as we divide the dividend and the debt going forward, and we'll optimize that for our shareholders. But right now, I would say it's more constructive than we would have thought last July, so that's a good thing for the outlook of both entities. Brian, it's Joel here.

Brian Reynolds: Yes, so Brian this is bevin again, so first off we are going to come out with an investment grade rating.

Bevin: Post the successful shareholder vote will be going out to the market, which unfortunately, we have seen some improvement in the debt capital markets here over since the announcement of the spin back in July.

Bevin: We will look to set up that capital structure that allows us to.

Bevin: Underwrite the future performance and.

Bevin: If we are able to.

Bevin: Have a.

Bevin: We have to balance the needs of both Tcs South bow as we as we divide the dividend and the debt going forward and we will optimize that for our shareholders, but right now I would say, it's more constructive than what we would have thought last July so thats a good thing for the outlook of both entities.

Bevin: Brian It's it's Joel here I would just add to that to what we showed you at Investor day back in November is that just given the current rate environment. The proceeds that we'll receive from self though whether it's around $8 billion that we'd have the ability to buy back some of our debt at a discount so we'd expect to.

Joel Hunter: I'll just add to that too. And what we showed you at Investor Day back in November is that just given the current rate environment, the proceeds that we'll receive from Southbow, whether it's around $8 billion, we have the ability to buy back some of our debt at a discount. So we expect to take out more than what the proceeds are from Southbow given that our debt would be trading at a discount. Transcribed by https://otter.ai. Great, super helpful.

Bevin: Take out more than what the proceeds are from from self though given that our debt would be trading at a discount.

Speaker Change: Great Super helpful. It sounds like more to come.

Brian Reynolds: Sounds like more to come. On the northern border, switching to the gas side, you know, NAGPAS constraints seem to be getting to a pretty tough level at this point, with expansion, you know, really needed, you know, soon. So I'm just curious if you can give us an update on Bison Express. And ultimately, how does that, you know, I hope it doesn't overflow through potential cost implications as it relates to your $67 billion outlook. You guys are very committed to that. How does the basin's need for expansion intertwine with your commitments at $67 billion? Yeah, I would just say that our Bison Express project is progressing as planned. We have every expectation of bringing that in-service, on-time, on-budget. As you pointed out, there is a need for additional egress capacity from the basin.

Speaker Change: On northern border or the gas side Nat.

Speaker Change: Natgas and strengthen given a pretty tough level at this points.

With expansion really need it soon so.

Speaker Change: So you can give us an update on biking express and ultimately how does that you know.

Speaker Change: Flow through its potential cost implications as it relates to your $67 billion outlook you guys are very committed to that.

The basic need for expansion.

Speaker Change: It's fine with you a commitment.

Speaker Change: Outlook.

Speaker Change: Yes.

Speaker Change: Yeah, I would just say that our Bison Express project is progressing as planned and we have every expectation of bringing them back in service on time on budget. As you pointed out there is a need for additional egress capacity out of the basin.

Brian Reynolds: These dollars are included in our $6 billion capital plan going forward, and we have every expectation of executing on that accordingly. Great. Fair enough. I'll leave it there. Enjoy the rest of your morning.

Speaker Change: These dollars are included in our $6 billion capital plan going forward and have every expectation on executing on that accordingly.

Speaker Change: Okay fair enough I'll leave it there and what else do your morning.

Speaker Change: The next question comes from Robert Kwan of RBC capital markets. Please go ahead.

Robert Kwan: The next question comes from Robert Kwan of RBC Capital Markets. Please go ahead. Thank you. Good morning.

Robert Kwan: Thank you good morning.

Robert Catellier: On the back of the sanctioning of Heartland, and as it relates to the placeholder TAPx in your plan through 2026, can you just talk about what segments and what types of projects would be the largest contributors, especially the 2026 bucket, with that comment specifically building on Stan's answer? If the pause on the non-FTA export permits is made more permanent, how much of that gray bucket is at risk? www.transcanada.ca It's Francois. I'll take that one, Robert.

Robert Kwan: On the back of the sanctioning of Heartland and as it relates to sort of placeholder Capex and your plans for 2026 can you just talk about what segments.

Robert Kwan: The projects would be the largest contributors, especially the 2026 bucket.

Robert Kwan: That comment specifically building on Stan's answer if the pause on the non FTA export permits is made more permanent how much of that great bucket is at risk.

It's Francois I'll take that one Robert.

Robert Catellier: You know, when you think about our capital stack, not just in 2026 but as a general matter, think of about $2 billion a year of recoverable maintenance capital across our three pipeline systems. That would be one contributor. Secondly, eight or nine hundred million dollars a year on average of Bruce Power capital for the major component replacement program as well as Project 2030 efficiencies on the non-reactor side of the plant and then predominantly growth capital across our three natural gas footprints. When you look at our projects and the impact of the pause on the capital stack, as Dan mentioned, one of our projects, Gillis, could be impacted by any meaningful delays in its sanctioning. But these are small dollars, the low hundreds of millions.

Speaker Change: When you think about our capital stack.

Francois: Not just in 2026, but as a general matter think of about $2 billion, a year of recoverable maintenance capital across our three pipeline systems.

Francois: B when contributor secondly.

Francois: Eight or $900 million a year on average of Bruce power capital for the major component replacement program as well as the project 2030 efficiencies on the non reactor side of the plant.

Francois: And then.

Francois: Predominantly.

Francois: Growth capital across our three natural gas footprints.

Francois: When you look at our projects and the impact of the pause.

Francois: On the capital stack as Stan mentioned.

Francois: One of our projects are jealous.

Francois: Could be impacted by any meaningful delays in its sanctioning, but these are small dollars mm.

Low hundreds of millions.

Robert Catellier: And so, you know, as we mentioned at our Investor Day in November, our capital is pretty much spoken for through 2026 and now, with the Heartland Project, 2027. We haven't increased the aggregate limits.

Francois: And so as.

Francois: As we mentioned.

Francois: At our Investor Day in November our capital is pretty much spoken for through 2006, and now with with the Heartland project 27.

Francois: We haven't increased the aggregate limits and in November we included some of the sanction capital in our in our.

Robert Catellier: In November, we included some of the unsanctioned capital in our disclosures; both the MCR-4 at Bruce and Heartland were in the unsanctioned or as yet to be sanctioned growth category. And we remain steadfast in our focus on maintaining our capital spend, not just within the six to seven but, frankly, to the lower end of that range. From a value creation standpoint, the prize there is if we execute on the plan for roughly $6 billion a year, and it might be, you know, plus or minus $100 or $200 in any given year. Then we have excess capital to either accelerate deleveraging or to ultimately proceed with share buybacks.

Francois: Disclosures are both the MCR four at Bruce and Heartland.

Francois:

Francois: We're in it.

Francois: In November in the unsanctioned are as yet to be sanction growth.

Francois: And we remain steadfast in our.

Francois:

Francois: Focus on maintaining our capital spend not just within the six to seven but frankly.

Francois: To the lower end of that range.

Francois: From a.

Francois: A value creation standpoint, the prize there is if we execute on plan.

Francois: For roughly $6 billion, a year and it might be plus or minus a 100 or 200 in any given year.

Francois: Then we have excess capital to either accelerate deleveraging or two ultimately proceed with share buybacks. We're building in that Optionality on an annual basis.

Robert Catellier: We're building in that optionality on an annual basis, which is something that we have not done in the past. So from my perspective, if for some reason a project, an individual project, is deferred and we end up at five and a half instead of six, for example, we still have good uses for that capital in accelerating our deleveraging and ultimately doing share buybacks because those are value creation for our shareholders. All right, thank you. And if I can just finish with the interplay between the 4.75 times target and, you know, the comments on executing the asset sale program in a manner that is, is positive to shareholder value or put differently, that you're not going to fire sale assets. If, you know, if the markets work against you, you know, what are you thinking?

Francois: Which is something that we have not done in the past so from my perspective, if for some reason a project an individual project is deferred and we ended up at five and a half instead of six for example.

Francois: We still have good uses for that capital and accelerating our deleveraging and ultimately doing share buybacks because.

Francois: Those are value accretive to.

Francois: To our shareholders.

Francois: As shareholders.

Speaker Change: Got it thank you.

Speaker Change: And if I can just finish with the interplay between the 475 times target and the comments on executing the asset sale program in a manner that is positive to shareholder value or put differently that youre not going to fire sale assets.

Speaker Change: Yes, if the markets work against you.

Speaker Change: How are you thinking about.

Robert Kwan: you know, that target, particularly as well into 2025, which is kind of just a bridgier set path, roughly Southeast Gateway, and really the goal being 2026. So how do you, like I said, think about that target in 2025 as well? Yeah, so, good question, Robert.

Speaker Change: That target, particularly as well into 2025, which is kind of just a bridge year half roughly of southeast gateway and really the goal being 2020. So how do you like I said think about.

That target in 2025 as well.

Speaker Change: Yeah. So good question Robert based on our conversations.

Robert Catellier: Based on the conversations we're having and how our processes are going to date, we're very confident in achieving the $3 billion number in 2024, and we are steadfast in achieving that amount of deleveraging. It's a high priority for us to get below a 4.75 upper limit by the end of 2024. With respect to 2025, we would need either incremental divestitures or incremental EBITDA, about $400 million of incremental EBITDA, in order to stay below that 4.75 level. And to the extent, as was asked previously, we have an opportunity to perhaps upsize the program in 2024, we'll consider that. We also feel that we can get to the $3 billion number without transacting in Mexico in 2024. But, as we said, we're focused on reducing our exposure in Mexico over the next 2 or 3 years to get to that 10 to 12% of consolidated EBITDA level.

Speaker Change: Conversations were having and how our processes are going to date.

Speaker Change: We're very confident on achieving a $3 billion number in 2024, and we are steadfast in achieving that amount of deleveraging. It's a high priority for us to get to below a 475 upper limit by the end of 2024.

Speaker Change: With respect to 2025.

Speaker Change: We would need either incremental divestitures or incremental EBITDA above $400 million of incremental EBITDA.

Speaker Change: In order to stay below that $4 75 level and to.

Speaker Change: To the extent as as was asked previously we have an opportunity to perhaps upside of the program in 'twenty four we will consider that.

Speaker Change: We also feel that we can get to the $3 billion number without transacting in Mexico in 2024.

Speaker Change: But as we said we're focused on reducing our exposure in Mexico.

Speaker Change: Over the next two or three years to get to that 10 to 12.

Speaker Change: Percent of consolidated EBITDA level. So you could look to us pulling on some of those leavers.

Robert Kwan: So, you could look to us pulling on some of those levers, including how successful our efficiency program is around revenue increases and cost reductions, to fill any gaps that we see in 2025 and beyond. Okay, that's great. Thank you. You're welcome. The next question comes from Robert Catellier of CIBC Capital Market. Please go ahead. Hey, good morning.

Speaker Change: Including.

Speaker Change: How successful are.

Speaker Change: Efficiency program is around revenue increases and cost reductions to to fill any gaps that we see in 2025 and beyond.

Speaker Change: Okay. That's great. Thank you.

Speaker Change: Youre welcome.

Speaker Change: The next question comes from Robert <unk> of CIBC capital markets. Please go ahead.

Robert: Hey, good morning, and congratulations on all the accomplishments in 2023.

Robert Catellier: And congratulations on all the accomplishments in 2023. I had a quick follow-up on the liquid side. I wondered if you could give an update on where you are with Keystone and returning that asset to its previous level of pressure. Robert, this is Devin.

Robert: I had a quick follow up on the liquid side I wondered if you could give an update on where you are with Keystone in returning that asset to its previous level of pressure.

Robert: Robert This is Devin so we've had as I mentioned earlier.

Bevan: So we've had, as I mentioned earlier, outstanding performance operationally here year over year. We continue to increase our system operating factor. We achieved record levels here at the end of the year and early this year. That is only as a result of our prime focus on operating our system very safely, and that included doing all the integrity work last year. We've done full in-line inspections on over 80% of our system to date, and that will be all complete prior to any spin transaction. In doing those in-line inspections, as well as all of the physical digs, over 60 digs this past year to confirm anything that we do see in areas of potential concern, we have found no potential issues with the integrity of our system.

Robert: Outstanding performance operationally here year over year, we continue to.

Robert: Increase our system operating factor, we achieved a record record levels here at the end of the year and early this year.

Devin: That is only as a result of our prime focus on operating our system very safely and that included.

Devin: Doing all the integrity work last year, we've done full in line inspections on over 80% of our system to date that will be all complete.

Devin: Prior to <unk>.

Devin: The spin transaction.

In doing those in line inspections as well as all of the physical digs over 60 digs. This past year to do conformation of of anything that we do see and in areas of potential concern. We have found no potential incident or issues.

Devin: With the integrity of our systems or our confidence has increased significantly here since undertaking that work, we're working very closely with both our regulators both FEMSA in the United States as well as the CR.

Bevan: So our confidence has increased significantly here since undertaking that work. We're working very closely with both our regulators, both PHMSA in the United States as well as the CER, and we've managed to address all the issues so far that they have raised, but their determination is up to them as to returning the system to its original operating pressure. That said, because of our operational performance, we were able to deliver all of our contract capacity, and we've been able to move spot batches as well. So, our operational excellence is allowing us to continue to deliver strong performance. Okay, thanks for that detailed answer, Bevan. I just wanted to move on to the... All right, you know, asset development and the regulatory side.

Devin: We've managed to address all the issues so far that that they have raised.

Devin: But their determination is up to them as to returning.

Devin: The system to its original operating pressure.

Devin: That said because of our operational performance, we were able to deliver all of our contract capacity and we've been able to move spot batches as well. So our operational excellence is allowing us to continue to deliver strong performance.

Speaker Change: Okay. Thanks for that detailed answer Bhavan.

I just wanted to move on to the.

Speaker Change: Right.

Speaker Change: So at the moment and the regulatory side.

Bevan: Specifically on cost sharing on development costs before projects are permitted, I wondered if you've, what your approach there is to cost sharing might be in light of the high utilization of assets across the industry and just the tough permitting environment, and maybe specifically you can address what type of progress you're making with government funding for pre-development on key projects in Ontario, such as the Ontario Pump Storage. Thanks, Robert. I'll start with a very high level.

Speaker Change: Specifically on cost sharing on development costs before projects or permanent I wondered if you've what you're.

Speaker Change: <unk> there is two a two car sharing might be in light of the.

Speaker Change: High utilization of assets across the industry and just the tough permitting environment.

Speaker Change:

Speaker Change: And maybe specifically you can address.

Speaker Change: You know what type of progress, you're making with government funding for pre development on key.

Speaker Change: Projects in Ontario, such as the Ontario pumped storage.

Speaker Change: Thanks, Robert I'll start with a very high level I'll ask Stan to provide some context on cost sharing in the U S. And then as we can touch on our current energy solutions projects in Ontario, and the only comment I wanted to make before passing it over is that a just to remind you that in cana.

Robert Catellier: I'll ask Stan to provide some context on cost sharing in the U.S., and then Ansley can touch on our power and energy solutions projects in Ontario. And the only comment I wanted to make before passing it over is that, in Canada, we have mechanisms to reimburse development costs or include development costs, you know, as spent in our tariff structure. And so the notion of cost-sharing for development is really more of a U.S. question rather than one in Canada.

Speaker Change: We have mechanisms too.

<unk> have.

Reimbursement of development costs or inclusion of development costs.

Stan: I've spent in our tariff structure and so the notion of cost sharing for development is really more of a U S question, rather than one in Canada, so over to Houston, and then over to Anthony.

Stan: So, over to you, Stan, and then over to Anne. Good morning, Robert. Again, I'll just reiterate, first of all, that the progress on all of our projects is going really, really well. This year, we're on track to put three projects in service. We put our Virginia electrification project in service on time and on budget a couple of weeks ago.

Houston: Yeah. Good morning, Robert again, I'll, just reiterate first of all that the progress in all of our projects is building that went really really well this year, we're on track to put.

The three projects in service, we put our Virginia electrification project in service on time and on budget. A couple of weeks ago. Later this summer, we'll put our gearless project into service and then assuming we get a.

Stan: Later this summer, we'll put our Gillis project into service, and a timely and favorable re-hearing order on GTN will put the balance of that project into service by the end of the year. With respect to things like risk sharing mechanisms, we've been doing that for a very, very long time in the U.S. As a matter of fact, many, if not almost all of our projects, have some sort of cost sharing that's usually around a 50-50 split between us and our customers should we have cost overruns. We also have other protections where, in certain instances, should a customer not reach FID, they will reimburse That's something that we've been doing for a long time, just as part of our DNA.

Houston: Timely and favorable rehearing order on a on GTA will put the balance of that project in service by the end of the year with respect to things like risk.

Houston: Risk sharing mechanisms, we've been doing that for a very very long time in the U S. As a matter of fact, many if not almost all of our projects at some sort of a cost sharing that's usually around a 50 50 split between us and our customers should be have cost overruns. You also have other protections where in certain instances should a customer or not.

Houston: They will reimburse us for 100% of our development costs that that's something that we've been doing for a long time, just as part of our DNA.

Stan: The regulatory front with respect to building projects has gotten a little bit more complex, but I think we have the skills and the talent to navigate that. I see us continuing to originate and build new projects within this five to seven times build multiple and within our $6 billion build forward annual capital spend. Hi, Robert. It's Ainsley.

Houston: The regulatory front with respect to the building projects has gotten a little bit more complex, but I think we have the skills and the talent to navigate that and I see us continuing to originate and build new projects.

Houston: Within this five to seven times build multiple and within our $6 billion go forward annual capital spend.

Houston: Hi, Robert intensely.

Houston: In the power and energy solutions business, our near term focus is really on nuclear and pumped hydro and a big part of the reason for that is the policy support that we see for both of those two factors, particularly in Ontario, and so we are in discussions with.

Ainsley: In the power and energy solutions business, our near-term focus is really on nuclear and pumped hydro. And a big part of the reason for that is the policy support that we see for both of those two sectors, particularly in Ontario. And so we are in discussions with the province on cost recovery agreements for those projects. As we progress them, we will remain very disciplined with respect to the capital that we would put at risk. And so we do anticipate advancing those agreements in the near term, both with respect to the work that we have begun on Bruce Power and Nuclear New Build Bruce C at that site, as well as our Ontario Pumped Storage Project. Thanks, everyone. The next question comes from Patrick Kenny of National Bank Finance. Please go ahead. Thank you. Yeah, good morning.

Houston: The province on cost recovery agreements for those projects as we progress and we will remain very disciplined with respect to our capital.

Houston: That we would put at risk and so we do anticipate advancing those agreements in the near term both with respect to the work that we have begun on Bruce power and nuclear new boundaries see at that site as well as our Ontario pump storage project.

Houston: Yeah.

Speaker Change: Okay. Thanks, everyone.

Speaker Change: The next question comes from Patrick Kenny of National Bank Financial. Please go ahead.

Patrick Kenny: Thank you good morning.

Patrick Kenny: Just on CGL and these potential cost recoveries from contractors. I'm not sure if you can comment on or confirm if all claims have been filed with the courts at this point, what the total amount of all claims might look like, and also... if you've assumed any successful litigation or settlement within your 4.75 leverage target by year end, or if we should be thinking about these potential recoveries being 2025 at the earliest. Yeah, sure. It's Greg Grant here.

Patrick Kenny: C G L and these potential cost recoveries from contractors.

Patrick Kenny: Not sure if you can comment on or confirm if all claims have been filed with the courts at this point.

Patrick Kenny: What the total amount of all claims might look like.

Speaker Change: And also.

Speaker Change: If you've assumed any successful litigation or settlements within your $4 75 leverage target by year end.

Speaker Change: Or if we should be thinking about these potential recoveries being 2025 at the earliest.

Speaker Change: Yes sure.

Craig Ranch: Craig Ranch or I'll go first and then Joe can talk to the 475, but.

Greg Grant: I'll go first and then Joel can talk to the 475, but, first, you gave me the mic. I think this was a monumental effort that the team was able to accomplish here on CGL. It took everybody, operations, commercial, project execution, stakeholder, and team effort to achieve the readiness by the end of the year, so that $200 million was quite important to the team. And if you think about... Moving forward into 2024, safe execution is the mandate and what we're gonna continue to focus on as we work through some of the reclamation work. We're not really gonna get into talking about individual claims or what that looks like.

Craig Ranch: First just given and you gave me that Mike I'm going to thank the team again I think this is a monumental effort.

Craig Ranch: The team was able to achieve here on CGM took everybody operations commercial and project execution stakeholder.

Craig Ranch: Team effort to achieve the readiness by the end of the year, so that $200 million is quite important to the team.

Craig Ranch: As you think about moving forward into 2020 for safe execution is.

Craig Ranch: The mandate and what we're going to continue to focus on as we worked through some of the reclamation work.

Speaker Change: We're not really going to get into talking about individual claims or what that looks like.

Joel Hunter: I think what I would say is that we will vigorously defend the claims, but also pursue cost recoveries, which we do expect net recoveries. And just to highlight, we remain on track to the 14 and a half billion. Yeah, and Pat Stroll here, just with respect to the net recoveries that Greg has highlighted, we're not going to give you a dollar amount on that, but we do factor that into our funding plan here as it relates to this year. Okay, great, thanks for that. And then, just on NGTL, I'm wondering if.

Speaker Change: What what I would say is we will vigorously defend the claims but also in pursuing cost recoveries, which we do expect net recoveries and just highlight we remain on track.

Speaker Change: The $14 5 billion.

Speaker Change: And pads dual here just with respect to the net recoveries that Greg has highlighted we are and I can't give you a dollar amount on that but we do factor that into our funding plan here as it relates to two this year.

Speaker Change: Okay, great. Thanks for that and then just on the GTO I'm wondering if you might have an update on where you're at with rolling over the debt.

Patrick Kenny: If you might have an update on where you're at with rolling over the... Five-Year Revenue Requirement Settlement. And I know you can't comment too much either on, you know, what a potential minority stake in NGTO might look like, but I'm just curious if having the new revenue settlement in place represents any sort of precursor to executing on a type of ownership transaction with NGTL. Sure, Greg here.

Speaker Change: Five year revenue requirement settlement.

Speaker Change: And I know you can't comment too much either on you know what a potential minority stake in NGL might look like but.

Speaker Change: Just curious if you are having the new revenue settlement in place reps.

Speaker Change: It represents any sort of precursor to executing on any type of ownership transaction with N. G T O.

Speaker Change: Sure Greg here I'll talk about this settlement just as a reminder.

Greg Grant: I'll talk about the settlement just as a reminder. The settlement's in place until the end of 2024. Discussions are going well with customers. I can't talk too much about the actual settlement itself, but you've seen the system and the health of the basin here recently.

Speaker Change: Settlements in place until the end of 2024 discussions are going well with customers Ken.

Ken talked to too much around.

Speaker Change: The actual settlement itself, but.

Speaker Change: You've seen the system and the health of the base and here recently, we've hit all time highs on NGL here in January.

Greg Grant: We've hit all-time highs on NGTL here in January, and continuing to see significant usage at decade-level highs, heading out of the mainline. So, quite happy with the health of the basin.

Speaker Change: Continuing to see significant usage and decade level highs heading out of mainline so quite happy with the health of the basin.

Robert Catellier: I think the conversations are going well with the customers. We'll probably look not until mid-year before we start to get closer to settlement, but we expect a settlement with customers here later this year, when we can comment more. And with respect to the impact of the settlement or on the timing of any potential minority interest sale on NGTL, Pat, you know, we obviously have, it's public information that our settlement expires at the end of the year, that we are working towards a renewal of that settlement with our customers, and we have in our own minds a view as to what a fair outcome is, and we will obviously factor that into our view of the fairness of any Okay, that's great.

Speaker Change: The conversations are going well with the customers.

Speaker Change: We will be looking probably not until mid year before we start to get closer to a settlement, but we expect a settlement with customers sure Les.

Speaker Change: Later, this year, where we can comment more.

Speaker Change: And with respect to the impact of the settlement or on the timing of any potential minority interest sale on in GTO Pat.

Speaker Change: We.

Speaker Change: Obviously have.

Speaker Change: It's <unk>.

Speaker Change: Public information that our settlement expires at the end of the year that we are working towards a renewal of that settlement with our customers.

Speaker Change: We have in our own minds, a view as to what a fair outcome is.

Speaker Change: We will obviously factor that into our view of fairness.

Speaker Change: Any transaction for a minority interest in NGL.

Patrick Kenny: I appreciate your comments. Thank you. Thanks, Pat. The next question comes from Olivia Halperty of Goldman Sachs. Please go ahead. Hi, good morning. Thank you for taking our question. I was wondering if we could just start on Bruce.

Speaker Change: Okay. That's great I appreciate your comments thank you.

Thanks Pat.

Speaker Change: The next question comes from Olivia help Ritchie of Goldman Sachs. Please go ahead hi.

Olivia Ritchie: Hi, Good morning, Thank you for taking our questions.

Olivia Ritchie: Wondering if we could just start on Bruce availability continues to be strong, but I can acknowledge the maintenance heavy fourth quarter.

Olivia Halperty: Availability continues to be strong, though I acknowledge the maintenance-heavy fourth quarter. Is there any planned maintenance you can point us to for 2024? And more broadly, following the successful and accelerated MCR on Unit 6, are there any lessons learned that you can apply to future MCRs? And how much conservatism would you say is baked into the MCR timelines?

Olivia Ritchie: Is there any planned maintenance you can point us to for 2024 and more broadly following the successful and accelerated MCR on unit six are there any lessons learned that you can apply to future mtr's and how much conservatism would you say is baked into the MCR timelines.

Ansley: Hi Olivia, it's Ansley. I'll take that question. So we definitely did see strong performance from Bruce Power last year across both the operating units as well as with the performance of Unit 6 of the MCR program. Heading into 2024, we can expect availability to be similar to what we've seen in 2023, so we expect continued strong performance. There will be regular planned outages, as we also saw in 2023, but that is factored into that guidance. From an MCR perspective, we certainly have taken many lessons learned from the Unit 6 MCR project and have applied them to the planning and the execution of the future units. So we're currently in execution on Unit 3, and we're seeing some of the benefits of those lessons learned already on Unit 4. It will be a similar story beyond just the lessons at Bruce Power. We have also certainly engaged with industry and have continued to apply lessons learned from outside of Bruce Power as well. Maybe the last thing I would highlight with respect to Bruce Power's performance for 2024.

Olivia Ritchie: Hi, Olivia it's Anthony I'll take that question and so we definitely did see strong performance from Bruce power last year across both the operating units as well as with the performance of unit six MCR program.

Anthony: Heading into 2024, and we can expect availability to be similar to what we've seen in 2023. So we expect continued strong performance there will be regular planned outages as we also saw in 2023, but.

Anthony: But that is factored into them into that guidance.

Anthony: From a.

Anthony: NCR perspective.

Anthony: We certainly have taken many lessons learned from the unit six MCR project and have applied them to the planning and the execution of the future units. So we're currently in execution on unit three a M.

Anthony: And and we're seeing some of the benefits of those lessons learned already on unit four it will be a similar story beyond just the lessons at Bruce power. We have also certainly engaged with industry and has continued to apply lessons learned from outside of.

Anthony: At Bruce power as well, maybe the last thing I would highlight with respect to Bruce power performance at for 2024, we do expect our annual price increase to come in in April and so we'll share more at that point in time.

Olivia Halperty: We do expect our annual price increase to come in April, and so we'll share more at that point in time. Okay, thank you for all the color there. And then I guess just more broadly on the 2024 EBITDA guidance, what is the largest driver of potential variability? And maybe you could sensitize what could drive performance to the high end versus the low end of the target growth range. Thanks for that question, Olivia. We don't take a meaningful amount of commodity price or volumetric risk.

Speaker Change: Okay. Thank you for all the color there and then I guess just more broadly on the 2020 for EBITDA guidance. What is the largest driver of potential variability and maybe you could sensitize what could drive performance to the high end versus the low end of the target growth range.

Speaker Change: Thanks for that question Olivia.

Speaker Change: We don't take a meaningful amount of a commodity price or volumetric risk so essentially.

Robert Catellier: So essentially, the drivers of performance for us are operational excellence through strong availability of our assets and bringing in our projects on time and on budget. So if we perform according to plan, we will fall within that range. And to the extent we find more efficiencies or increased availability in operations, you could see us move to the upper end, or, as you saw in 2023, above the upper end of the range of our guidance. And then the other factor, of course, is delivering on our projects on time.

Speaker Change: The drivers of performance for us our operational excellence through strong availability of our assets and bringing in our projects on time and on budget. So if we.

Speaker Change: Perform according to plan.

Speaker Change: We will fall within that range and to the extent, we find more efficiencies or increased availability in operations you could see us move to the upper end or as you saw in 2023 above the upper end of the range of our guidance.

Speaker Change: And then the other factor of course is on delivering on our projects on time.

Speaker Change: Got it appreciate the color there. Thanks. Thank you.

Robert Catellier: Got it. Appreciate the color there. Thanks. Thank you. Ladies and gentlemen, this concludes the question and answer session. If there are any further questions, please contact Investor Relations at TC Energy. I will now turn the call over to Gavin Wiley. Please go ahead, Mr.

Speaker Change: Ladies and gentlemen. This concludes the question and answer session. If there are any further questions. Please contact investor relations at Tc energy.

Speaker Change: I'll now turn the call over to Gavin Wylie. Please go ahead Mr. Wiley.

Yes, Thank you and thanks, everyone for participating this morning as noted if you have any additional questions or we weren't able to get through the entirety of the question slate today. Please contact the Investor Relations team are always happy to help we very much appreciate your interest here in TC energy and look forward to our next update so thank you and have a great day.

Gavin Wiley: Thank you and thank you everyone for participating this morning. As noted, if you have any additional questions or we weren't able to get through the entirety of the questions late today, please contact the Investor Relations team. We're always happy to help. We very much appreciate your interest here at TC Energy and look forward to our next update. So, thank you, and have a great day. This brings today's conference call to a close. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Speaker Change: This brings to a close today's conference call. You may disconnect. Your lines. Thank you for participating and have a place to stay.

Speaker Change: <unk>.