Q2 2024 Emera Inc Earnings Call

Speaker Change: Good morning, ladies and gentlemen, and welcome to Emera Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a questioning-answer session.

Operator: Conference call. At this time, all lines are in a listen-only mode.

Operator: At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to put up a question. If anyone has any difficulties hearing the conference, please press star zero for operator assistance at any time. I would now like to turn the conference over to Dave Bezanson. Please do so.

Operator: Following the presentation, we will conduct a questioning-answer session. Instructions will be provided at that time for you to support a question. If anyone has any difficulties hearing the conference, please press store zero for operator's assistance at any time.

Speaker Change: Instructions will be provided at that time for you to upvote a question. If anyone has any difficulties hearing the conference, please press star zero for operator assistance at any time. I would now like to turn the conference over to Dave Bezanson. Please go ahead.

Dave Bezanson: I would now like to turn a conference over to Dave Bezanson. Please go ahead.

Dave Bezanson: Thank you, Jenny, and thank you all for joining us this morning for Emera's Q2 2024 conference call and live webcast. Emera's second quarter earnings release was distributed this morning by a newswire, and the financial statements, management's discussion and analysis, and the presentation being referenced on this call are available on our website at amira.com.

Dave Bezanson: Thank you, Jenny. And thank you all for joining us this morning for Emera's Q2 2024 conference call and live webcast. Emera's second quarter earnings release was distributed this morning by a news wire, and the financial statements, management's discussion and analysis, and the presentation being referenced on this call are available on our website at emera.com. Joining me on this morning's call are Scott Balfour, Emera's President and Chief Executive Officer, Greg Blunden, Emera's Chief Financial Officer, and other members of Emera's management team.

Dave Bezanson: Thank you, Jenny, and thank you all for joining us this morning for Emera's Q2 2024 conference call and live webcast.

Speaker Change: Emera's second quarter earnings release was distributed this morning by a newswire, and the financial statements, management's discussion and analysis, and the presentation being referenced on this call are available on our website at emera.com.

Dave Bezanson: Joining me for this morning call are Scott Balfour, Emera's President and Chief Executive Officer, Greg Blunden, Emera's Chief Financial Officer, and other members of Emera's management team. This morning's discussion will include forward-looking information, which is subject to the cautionary statement contained in the supporting slide. Today's discussion and presentation will also include references to non-GAAP financial measures.

Speaker Change: Joining me for this morning's call are Scott Balfour, Emera's President and Chief Executive Officer, Greg Blunden, Emera's Chief Financial Officer, and other members of Emera's management team.

Dave Bezanson: This morning's discussion will include forward-looking information, which is subject to the cautionary statement contained in the supporting slide. Today's discussion and presentation will also include references to non-GAAP financial measures. Please refer to the appendix for definitional information and reconciliations of historical non-GAAP measures to the closest GAAP financial measure. Now, I will turn things over to Scott.

Speaker Change: This morning's discussion will include forward-looking information, which is subject to the cautionary statement contained in the supporting slide.

Speaker Change: Today's discussion and presentation will also include references to non-GAAP financial measures. Please refer to the appendix for definitional information and reconciliations of historical non-GAAP measures to the closest GAAP financial measure. And now I will turn things over to Scott.

Dave Bezanson: Please refer to the appendix for definitional information and reconciliations of historical non-GAAP measures to the closest GAAP financial measure, and now I will turn things over to Scott.

Scott Balfour: Thank you, Dave, and good morning, everyone. Before we get into the results for the quarter, I'd like to spend a few minutes on the significant steps we've taken recently to improve our credit metrics and balance sheet and reposition the company for future growth.

Scott Balfour: Thank you, Dave, and good morning, everyone. Before we get into the results for the quarter, I'd like to spend a few minutes on the significant steps we've taken recently to improve our credit metrics and balance sheet and reposition the company for future growth. In the second quarter, we announced a $500 million US hybrid offering, the sale of our interest in the Labrador Island, and the securitization of $117 million of unrecovered fuel costs at Nova Scotia Power. Combined, these actions have provided approximately $2 billion in liquidity and have resulted in a reduction of holding company debt for credit rating purposes of approximately $1.3 billion.

Scott Balfour: We announced a $500 million US hybrid offering, the sale of our interest in the Labrador Island Link, and the securitization of $117 million of unrecovered fuel costs at Nova Scotia Power. Combined, these actions have provided approximately $2 billion in liquidity and have resulted in a reduction of holding company debt for credit rating purposes of approximately $1.3 billion. These actions have significantly improved our holding company debt to total debt metric by approximately 400 basis points to end the quarter at 35%, and they have added 90 basis points to our CFO to debt metric.

Scott Balfour: Thank you, Dave, and good morning, everyone. Before we get into the results for the quarter, I'd like to spend a few minutes on the significant steps we've taken recently to improve our credit metrics and balance sheet and reposition the company for future growth.

Scott Balfour: In the second quarter, we announced a $500 million U.S. hybrid offering.

Scott Balfour: The sale of our interest in the Labrador Island Link and the securitization of $117 million of unrecovered fuel costs at Nova Scotia Power.

Scott Balfour: Combined, these actions have provided approximately $2 billion in liquidity and have resulted in a reduction of holding company debt for credit rating purposes of approximately $1.3 billion.

Scott Balfour: These actions have significantly improved our holding company debt to total debt metric by approximately 400 basis points to end the quarter at 35%, and they've added 90 basis points to our CFO to debt metric.

Scott Balfour: These actions have significantly improved our holding company debt to total debt metric by approximately 400 basis points to end the quarter at 35% and they have added 90 basis points to our CFO to debt metric.

Scott Balfour: In June, we followed these actions with the reduction of a dividend growth rate, which when matched with our 5-7% target EPS growth, will lead to a steady improvement in our dividend pay-off ratio over time. The sale of New Mexico gas, as announced earlier this week, will further reduce holding company debt, strengthen our balance sheet, and more efficiently contribute to funding our capital investments in our high growth markets. The New Mexico gas sale proceeds will further reduce holding company debt by approximately $1 billion in improve our holding company to debt metric approximately 200 basis points. This transaction will also reduce our requirement for new equity and improve our ratio of cash from operations to debt by 50 basis points.

Scott Balfour: In June, we followed these actions with the reduction of our dividend growth rate, which when matched with our 5 to 7 percent target EPS growth, will lead to a steady improvement in our dividend payout ratio over time. The sale of New Mexico gas, as announced earlier this week, will further reduce holding company debt, strengthen our balance sheet, and more efficiently contribute to funding our capital investments in our high-growth markets. New Mexico gas sale proceeds will further reduce holding company debt by approximately $1 billion and improve our holding company to debt metric by approximately 200 basis points.

Scott Balfour: In June , we followed these actions with the reduction of our dividend growth rate, which when matched with our 5-7% target EPS growth, will lead to a steady improvement in our dividend payout ratio over time.

Scott Balfour: The sale of New Mexico gas, as announced earlier this week, will further reduce holding company debt, strengthen our balance sheet, and more efficiently contribute to funding our capital investments in our high-growth markets.

Scott Balfour: The new Mexico gas sale proceeds will further reduce holding company debt by approximately $1 billion and improve our holding company to debt metric approximately 200 basis points.

Scott Balfour: This transaction will also reduce our requirement for new equity and improve our ratio of cash from operations to debt by 50 basis points. New Mexico gas has been an important part of Emera since 2016, and we're proud of what we've accomplished with the New Mexico Gas Team over the past eight years. We've strengthened the business and its performance and have invested in all parts of the business to expand and maintain a safe, reliable system that will serve customers in the state for decades to come. As I said to employees in New Mexico earlier this week, this announcement comes with mixed emotions for all of us at Emera.

Scott Balfour: This transaction will also reduce our requirement for new equity and improve our ratio of cash from operations to debt by 50 basis points.

Scott Balfour: New Mexico gas has been an important part of America since 2016, and we're proud of what we've accomplished with the New Mexico gas team over the past eight years. We've strengthened the business and its performance and have invested in all parts of the business to expand and maintain a safe, reliable system that will serve customers in the state for decades to come.

Scott Balfour: New Mexico Gas has been an important part of Emera since 2016, and we're proud of what we've accomplished with the New Mexico Gas team over the past eight years.

Scott Balfour: We've strengthened the business and its performance and have invested in all parts of the business to expand and maintain a safe, reliable system that will serve customers in the state for decades to come.

Scott Balfour: As I said to employees in New Mexico earlier this week, this announcement comes with mixed emotions for all of us at Emera. But Bernard Capital Partners clearly recognized what we know at Emera, and that is that New Mexico Gas is a great business with a skilled and dedicated team. We look forward to continuing to work closely with our New Mexico Gas colleagues over the next year, along with the team at Bernhard, to secure regulatory approval and ensure a smooth transition for New Mexico Gas customers. And of course, the New Mexico Gas Team. Once closed, proceeds from this sale, along with the recent Labrador Island Link transaction, will more than exceed the 15% of our funding plan that we set as a target last year.

Speaker Change: As I said to employees in New Mexico earlier this week, this announcement comes with mixed emotions for all of us at Emera.

Scott Balfour: But Bernard's capital partners clearly recognized what we know at Emera, and that is that New Mexico Gas is a great business with a skilled and dedicated team. We look forward to continuing to work closely with our New Mexico Gas colleagues over the next year, along with the team at Bernhard, to secure regulatory approval and ensure a smooth transition for New Mexico Gas customers and, of course, the New Mexico Gas team. Once closed, proceeds from this sale, along with the recent Labrador Island Link transaction, will more than exceed the 15% of our funding plan that we set as a target last year for all these actors.

Bernard: But Bernard's capital partners clearly recognized what we know at Emera, and that is that New Mexico Gas is a great business with a skilled and dedicated team.

Bernard: We look forward to continuing to work closely with our New Mexico Gas colleagues over the next year, along with the team at Bernhard, to secure regulatory approval and ensure a smooth transition for New Mexico Gas customers, and of course, the New Mexico Gas team.

Bernard: Once closed, proceeds from this sale, along with the recent Labrador Island Link transaction, will more than exceed the 15% of our funding plan that we set as a target last year.

Scott Balfour: All these actions, the sale of will, the hybrid offering, the famed securitization, adjusting the dividend growth rate, and finally the sale of New Mexico Gas, were part of a very strategic effort to strengthen our balance sheet, improve credit metrics, and fund our ambitious capital plan. We've worked with focus and determination over the past eight months to optimize our portfolio and to put ourselves in a stronger position where we can deploy capital in areas where it is most valuable to deliver higher quality earnings and cash flows, creating an even stronger Amira today and into the future.

Scott Balfour: The sale of Lill, the hybrid offering, the Pham securitization, adjusting the dividend growth rate, and finally, the sale of New Mexico Gas were part of a very strategic effort to strengthen our balance sheet, improve credit metrics, and fund our ambitious capital plan. We've worked with focus and determination over the past eight months to optimize our portfolio and to put ourselves in a stronger position where we can deploy capital in areas where it is most valuable to deliver higher quality earnings and cash flows, creating an even stronger Emera today and into the future. Greg will take us through the results for the quarter, but I want to reiterate that we remain confident in our forward-looking earnings.

Bernard: All these actions, the sale of Lill, the hybrid offering, the Pham securitization, adjusting the dividend growth rate, and finally the sale of New Mexico Gas, were part of a very strategic effort to strengthen our balance sheet, improve credit metrics, and fund our ambitious capital plan.

Bernard: We've worked with focus and determination over the past eight months to optimize our portfolio and to put ourselves in a stronger position where we can deploy capital in areas where it is most valuable to deliver higher quality earnings and cash flows, creating an even stronger Emera today and into the future.

Scott Balfour: Greg will take us through the results for the quarter, but I want to reiterate that we remain confident in our forward-looking earnings. The comparatively weak start to 2024 does not change our view in the forward earnings growth potential of our business, including the average 5 to 7% medium-term growth guidance that we rolled out in June. When we announced our plan to fund part of our capital plan through asset sales last November, we highlighted the significant customer growth and the growing demand for cleaner and more reliable energy. These dynamics continue. Just to touch on a few of the important projects we have underway across the business in Florida, Tampa Electric recently completed Advanced Gas Path Combustion Turbine Upgrades at its base site plant, which resulted in 157 megawatts of new capacity and a 3.7% improvement in the station's overall operating efficiency, all for only $87 million US dollars.

Bernard: Greg will take us through the results for the quarter, but I want to reiterate that we remain confident in our forward-looking earnings.

Scott Balfour: The comparatively weak start to 2024 does not change our view of the forward earnings growth potential of our business, including the average 5 to 7% medium-term growth guidance that we rolled out in June. When we announced our plan to fund part of our capital plan through asset sales last November, we highlighted the significant customer growth and the growing demand for cleaner and more reliable energy. These dynamics continue.

Greg Blunden: The comparatively weak start to 2024 does not change our view in the forward earnings growth potential of our business, including the average 5-7% medium-term growth guidance that we rolled out in June .

Greg Blunden: When we announced our plan to fund part of our capital plan through asset sales last November , we highlighted the significant customer growth and the growing demand for cleaner and more reliable energy.

Scott Balfour: Just to touch on a few of the important projects we have underway across the business, in Florida, Tampa Electric recently completed advanced gas path combustion turbine upgrades at its Bayside plant, which resulted in 157 megawatts of new capacity and a 3.7% improvement in the station's overall operating efficiency, all for only 87 million U.S. dollars. As a result, this facility now has more generation capacity with a lower emission profile and produces energy at a lower cost per megawatt.

Greg Blunden: These dynamics continue.

Greg Blunden: Just to touch on a few of the important projects we have underway across the business, in Florida, Tampa Electric recently completed advanced gas path combustion turbine upgrades at its Bayside plant.

Greg Blunden: which resulted in 157 megawatts of new capacity and a 3.7 percent improvement in the station's overall operating efficiency, all for only 87 million US dollars.

Scott Balfour: As a result, this facility now has more generation capacity with a lower emission profile and produces energy at a lower cost per megawatt. The team is also making good strides with respect to the South Tampa Resiliency Project, where they're working closely with the team at McDill Air Force Base to install four reciprocating natural gas-fired engines on the base. This project provides the base with the resiliency they need while strengthening the Tampa Electric Grid and avoiding costly transmission upgrades, otherwise needed to serve the fast growing load in South Tampa.

Greg Blunden: As a result, this facility now has more generation capacity with lower emission profile and produces energy at a lower cost per megawatt.

Scott Balfour: The team is also making good strides with respect to the South Tampa Resiliency Project, where they're working closely with the team at MacDill Air Force Base to install four reciprocating natural gas-fired engines on the base. This project provides the base with the resiliency it needs while strengthening the TAMP electric grid and avoiding costly transmission upgrades otherwise needed to serve the fast growing load in South Tampa. As the people of Florida know all too well, hurricane season is upon us, and Hurricane Debbie moved into western Florida earlier this week. However, with the benefit of its underground system, there was virtually no impact on People's Gas System or its customers.

Greg Blunden: The team is also making good strides with respect to the South Tampa Resiliency Project where they're working closely with the team at MacDill Air Force Base to install four reciprocating natural gas fired engines on the base.

Greg Blunden: This project provides the base with the resiliency they need while strengthening the Tampa electric grid and avoiding costly transmission upgrades otherwise needed to serve the fast-growing load in South Tampa.

Scott Balfour: As the people of Florida know all too well, hurricane season is upon us, and Hurricane Debbie moved into western Florida earlier this week. With benefits of its underground system, there was virtually no impact to people's gas system or its customers. And while the storm was not in the direct path of Tampa Electric service territory, there were of course impacts from the severe wind and rain. William. But the team was able to restore all customers safely and quickly, with all customers fully restored before the end of the day. Further evidence of the value of our investments in resiliency through the storm protection plan.

Greg Blunden: As the people of Florida know all too well, hurricane season is upon us, and Hurricane Debbie moved into western Florida earlier this week.

Speaker Change: With benefit of its underground system, there was virtually no impact to People's Gas System or its customers.

Scott Balfour: And while the storm was not in the direct path of TAMP's electric service territory, there were, of course, impacts from the severe wind and rain, but the team was able to restore all customers safely and quickly, with all customers fully restored before the end of the day. Further evidence of the value of our investments in resiliency through the Storm Protection Plan. In Nova Scotia, we have a number of transformational projects underway. In June, the regulator approved Nova Scotia Power's 150-megawatt battery energy storage system project. The application sought the approval for the collection of $237.7 million required to develop three 50-megawatt, four-hour grid-scale battery facilities.

Speaker Change: And while the storm was not in the direct path of Tampa Electric Service Territory, there were of course impacts from the severe wind and rain. But the team was able to restore all customers safely and quickly, with all customers fully restored before the end of the day.

Speaker Change: Further evidence of the value of our investments in resiliency through the Storm Protection Plan.

Scott Balfour: In Nova Scotia, we have a number of transformational projects underway. In June, the regulator approved Nova Scotia Power's 150 megawatt battery energy storage system project. The applications on the approval for collection of $237.7 million required to develop three 50 megawatt four hour grid scale battery facilities. The project includes financial support from the federal government's Smart Renewables and Electrification Pathways and Electricity Pre-Development Programs, as well as a financial agreement with the law communities to make an equity investment in connection with the project while also lowering the cost for customers. These projects will come into service in late 2025 and early 2026.

Scott Balfour: The project includes financial support from the federal government's Smart Renewables and Electrification Pathways and Electricity Predevelopment Program, as well as a financial agreement with the Canada Infrastructure Bank and the WMA, enabling Nova Scotia's 13 Mi'kmaq communities to make an equity investment in connection with the project, while also lowering the cost for customers. These projects will come into service in late 2025 and early 2026. Additionally, Nova Scotia Power's Rec Cove Hydro Facility, comprised of two 106 megawatt units, has been undergoing a $102 million major life extension program.

Speaker Change: In Nova Scotia, we have a number of transformational projects underway. In June , the regulator approved Nova Scotia Power's 150-megawatt battery energy storage system project.

Speaker Change: The application sought the approval for collection of $237.7 million required to develop three 50-megawatt, four-hour grid-scale battery facilities.

Speaker Change: The project includes financial support from the federal government's Smart Renewables and Electrification Pathways and electricity pre-development programs.

Speaker Change: as well as a financial agreement with the Canada Infrastructure Bank and the WMA, enabling Nova Scotia's 13 Mi'kmaq communities to make an equity investment in connection with the project while also lowering the cost for customers.

Speaker Change: These projects will come into service in late 2025 and early 2026.

Scott Balfour: Additionally, Nova Scotia Power's Reccove Hydro Facility, comprised of two 106 megawatt units, has been undergoing a $102 million major life extension program. To maintain continued operation, the life extension work is being staggered, with Unit 1 wrapping up early in September of this year. These units will now operate more efficiently over a wider range, operating down to 30 megawatts compared to a previous 50 megawatt floor. This added flexibility is beneficial as we transition to higher renewable and variable generation sources like wind and solar. This major investment on this extremely valuable asset will extend the life of Reccove by an additional 50 years.

Speaker Change: Additionally, Nova Scotia Power's Rec Cove Hydro Facility, comprised of two 106 megawatt units, has been undergoing a $102 million major life extension program.

Scott Balfour: To maintain continued operation, the life extension work is being staggered, with Unit One wrapping up early in September of this year. These units will now operate more efficiently over a wider range, operating down to 30 megawatts, compared to a previous 50 megawatt floor.

Speaker Change: To maintain continued operation, the life extension work is being staggered, with Unit One wrapping up early in September of this year.

Speaker Change: These units will now operate more efficiently over a wider range, operating down to 30 megawatts compared to a previous 50 megawatt floor. This added flexibility is beneficial as we transition to higher renewable and variable generation sources like wind and solar.

Scott Balfour: This added flexibility is beneficial as we transition to higher renewable and variable generation sources like wind and solar. This major investment in this extremely valuable asset will extend the life of Recco by an additional 50 years. Overall, we're on track to deliver our $8.8 billion three-year capital plan. Our utilities are investing in reliability and storm hardening, modernizing their grids, and keeping pace with customer growth in Florida and Nova Scotia. So far this year, we've invested $1.4 billion in capital, with over 75% of that in the state of Florida.

Speaker Change: This major investment on this extremely valuable asset will extend the life of RECCO by an additional 50 years.

Scott Balfour: Overall, we're on track to deliver our $8.8 billion through your capital plan. Our utilities are investing in reliability and storm hardening, modernizing our grades and keeping pace with customer growth in Florida and Nova Scotia. So far this year, we've invested $1.4 billion in capital, with over 75% of that in the state of Florida.

Speaker Change: Overall, we're on track to deliver our $8.8 billion three-year capital plan.

Speaker Change: Our utilities are investing in reliability and storm hardening, modernizing our grids, and keeping pace with customer growth in Florida and Nova Scotia.

Speaker Change: So far this year, we've invested $1.4 billion in capital, with over 75% of that in the state of Florida.

Scott Balfour: Earlier this quarter, we received unanimous approval from the New Mexico Public Regulation Commission for the rate case settlement agreement at New Mexico Gas. As a reminder, the settlement included a base revenue increase of $30 million US, which will come into effect on October 1st of this year. It also maintained the ROE at 9.375 percent and capital structure of 52 percent equity, 48 percent debt, and made the weather normalization adjustment mechanism a regular part of the tariff. You will note from our New Mexico Gas Company sale announcement that we and Bernhard have committed to fully respect the future test year that the rate application was based on, which is October 1st, 2024, to September 30th, 2025, which means unless otherwise directed by the PRC, the target closing date for the transaction will not occur earlier than October 1st, 2025.

Scott Balfour: Earlier this quarter, we received unanimous approval from the New Mexico Public Regulation Commission for the Rape Case Settlement Agreement at New Mexico Gas. As a reminder, the settlement includes a base revenue increase of $30 million. The U.S., which will come into effect on October 1st of this year. It also maintained the ROE at 9.375% and capital structure of 52% equity, 48% debt, and made the weather normalization adjustment mechanism a regular part of the tariff.

Speaker Change: Earlier this quarter, we received unanimous approval from the New Mexico Public Regulation Commission for the Rate Case Settlement Agreement at New Mexico Gas.

Speaker Change: As a reminder, the settlement included a base revenue increase of $30 million.

Speaker Change: U.S., which will come into effect on October 1st of this year. It also maintained the ROE at 9.375% and capital structure of 52% equity, 48% debt, and made the weather normalization adjustment mechanism a regular part of the tariff.

Gregory Blunden: You will note from our New Mexico Gas Company sale announcement that we and Bernhard have committed to fully respect the future test year that the rate application was based on, which is October 1st, 2024 to September 30th, 2025, which means, unless otherwise directed by the PRC, the targeted closing date for the transaction will not occur earlier than October 1st, 2025. Looking ahead, there are two more important initiatives on the immediate horizon that will be important drivers of growth and de-risk.

Speaker Change: You will note from our New Mexico Gas Company sale announcement that we and Bernhard have committed to fully respect the future test year that the rate application was based on, which is October 1st, 2024 to September 30th, 2025.

Speaker Change: Which means unless otherwise directed by the PRC, the targeted closing date for the transaction will not occur earlier than October 1st, 2025.

Scott Balfour: Looking ahead, there are two more important initiatives on the immediate horizon that will be important drivers of growth and de-risking. First, in Nova Scotia, the potential securitization of additional deferred fuel costs related to delayed energy deliveries from Maxgrap Falls. Miles, both the provincial and federal governments have publicly indicated their focus on this issue, and we are optimistic there will be more clarity in the coming months. This is an important affordability initiative for customers in Nova Scotia, and would also provide critical assistance in stabilizing Nova Scotia Power's credit rating position. The team at Nova Scotia Power is supporting these efforts in partnership with both governments.

Speaker Change: Looking ahead, there are two more important initiatives on the immediate horizon that will be important drivers of growth and de-risking.

Gregory Blunden: First, in Nova Scotia, the potential securitization of additional deferred fuel costs related to delayed energy delivery from Muskrat Falls. Both the provincial and federal governments have publicly indicated their focus on this issue, and we are optimistic there will be more clarity in the coming months. This is an important affordability initiative for customers in Nova Scotia and would also provide critical assistance in stabilizing Nova Scotia Power's credit rating. The team at Nova Scotia Power is supporting these efforts in partnership with both governments.

Speaker Change: First, in Nova Scotia, the potential securitization of additional deferred fuel costs related to delayed energy deliveries from Muskrat Falls.

Speaker Change: Both the provincial and federal governments have publicly indicated their focus on this issue and we are optimistic there will be more clarity in the coming months.

Speaker Change: This is an important affordability initiative for customers in Nova Scotia and would also provide critical assistance in stabilizing Nova Scotia Power's credit rating position.

Speaker Change: The team at Nova Scotia Power is supporting these efforts in partnership with both governments.

Scott Balfour: Secondly, the team at Tampa Electra continues to advance its rate application, with the regulatory hearing scheduled for the week of August 26th, and a final decision due in early November for new rates to be effective January 1st, 2025.

Gregory Blunden: Secondly, the team at Tampa Electric continues to advance its rate application, with the regulatory hearing scheduled for the week of August 26th and a final decision due in early November for new rates to be effective January 1st, 2025. It's been an incredibly busy and productive quarter, and indeed the years so far. I'm more confident than ever that we are taking the right strategic steps to deliver for customers and shareholders. With that, I'll turn it over to Greg to walk us through the highlights of the quarterly and year-to-date results.

Speaker Change: Secondly, the team at Tampa Electric continues to advance its rate application, with the regulatory hearing scheduled for the week of August 26th and a final decision due in early November for new rates to be effective January 1st, 2025.

Scott Balfour: It's been an incredibly busy and productive quarter, and indeed the years so far. I'm more confident than ever that we are taking the right strategic steps to deliver for customers and shareholders.

Speaker Change: It's been an incredibly busy and productive quarter and indeed the year so far. I'm more confident than ever that we are taking the right strategic steps to deliver for customers and shareholders. With that, I'll turn it over to Greg to walk us through the highlights of the quarterly and year-to-date results.

Gregory Blunden: With that, I'll turn it over to Greg to walk us through the highlights of the quarterly and year-to-date results. Thank you, Scott, and good morning, everyone. This morning we reported second quarter adjusted earnings of $151 million in adjusted earnings per share of 53 cents compared to $162 million and 60 cents in Q2 of 2023. Your adjusted earnings were $367 million and adjusted earnings per share was $1.28 compared to $430 million and $1.58 of the same period in 2023. Consistent with Q1, the reduction in adjusted EPS for this quarter was expected. On going higher operating costs, resulting largely from higher interest expense, have impacted our results.

Gregory Blunden: Thank you, Scott, and good morning everyone. This morning, we reported second quarter adjusted earnings of 151 million dollars and adjusted earnings per share of 53 cents compared to 162 million dollars and 60 cents in Q2 of 2023. Your adjusted earnings were $367 million, and adjusted earnings per share was $1.28 compared to $430 million and $1.58 for the same period in 2023. Consistent with Q1, the reduction in adjusted EPS for this quarter was expected.

Greg Blunden: Thank you, Scott, and good morning, everyone. This morning, we reported second quarter adjusted earnings of $151 million and adjusted earnings per share of $0.53 compared to $162 million and $0.60 in Q2 of 2023.

Greg Blunden: Your adjusted earnings were $367 million and adjusted earnings per share was $1.28 compared to $430 million and $1.58 for the same period in 2023.

Greg Blunden: Consistent with Q1, the reduction in adjusted EPS for this quarter was expected.

Gregory Blunden: On the positive side, this quarter's results continue to reflect the favorable customer growth at Tampa Electric, Peoples Gas, and Nova Scotia Power and the new rates at Peoples Gas and Tampa Electric. I would like to note that we have excluded the $107 million after-tax gain on our sale of our equity interest in the Labrador Island Link from our adjusted earnings for the quarter.

Greg Blunden: Ongoing higher operating costs resulting largely from higher interest expense have impacted our results. On the positive side, this quarter's results continue to reflect the favorable customer growth in Tampa Electric, Peoples Gas, and Nova Scotia Power, and the new rates at Peoples Gas and Tampa Electric.

Gregory Blunden: On the positive side, this quarter's results continue to reflect the favorable customer growth in Tampa Electric, People's Gas and Nova Scotia Power, and the new rates at People's Gas and Tampa Electric. I would like to note that we have excluded the $107 million after-tax gain on our sale of our equity interests in the Labrador Island Link from our adjusted earnings for the quarter. This would above the rise increase adjusted EPS by 37 cents. People's Gas continues to deliver robust performance driven by the new rates at the beginning of this year that reflect the growth of the experience over the last three years.

Greg Blunden: I would like to note that we have excluded the $107 million after-tax gain on our sale of our equity interest in the Labrador Island Link from our adjusted earnings for the quarter. This would have otherwise increased adjusted EPS by 37 cents.

Gregory Blunden: This would have otherwise increased adjusted EPS by 37 cents. People's Gas continues to deliver robust performance, driven by the new rates at the beginning of this year that reflect the growth it has experienced over the last three years.

Greg Blunden: People's Gas continues to deliver robust performance, driven by the new rates at the beginning of this year that reflect the growth it has experienced over the last three years. This increase was somewhat offset by higher operating costs in New Mexico Gas, and as a result, the gas segment was up $6 million, or three cents.

Gregory Blunden: This increase was somewhat offset by higher operating costs in New Mexico gas, and as a result, the gas segment was up $6 million or 3 cents. Tempo Electric delivered strong results with growth of $7 million or $0.02 over Q2 of 2023, driven primarily by new base rates that went into effect on January 1st and strong customer growth partially offset by higher operating costs. Weather in the quarter was consistent with the very favorable weather experienced in Q2 of 2023.

Gregory Blunden: This increase was somewhat offset by higher operating costs into Mexico gas, and as a result, the gas segment was up $6 million. Tampa Electric delivered strong results with growth of $7 million or two cents over Q2 of 2023, driven primarily by new base rates that went into effect on January 1st and strong customer growth, partially offset by higher operating costs. Whether in the quarter was consistent with the very favorable weather experiencing Q2 of 2023. In Tampa Electric, we'll have the opportunity to recover forecasted 2025 operating costs as an outcome of its base rate application previously mentioned by Scott.

Greg Blunden: Tampa Electric delivered strong results with growth of $7 million or $0.02 over Q2 of 2023, driven primarily by new base rates that went into effect on January 1st and strong customer growth partially offset by higher operating costs.

Greg Blunden: Weather in the quarter was consistent with the very favorable weather experienced in Q2 of 2023.

Gregory Blunden: And Tampa Electric will have the opportunity to recover forecasted 2025 operating costs as a no-come of its base rate application, previously mentioned by Scott. I would also like to note that Q3 is an important quarter for Tampa Electric, with earnings contributions in the quarter comparable to the first two quarters combined. The weakening Canadian dollar modestly increased Ariane's contribution from her U.S. operations by $3 million for the quarter.

Speaker Change: And Tampa Electric will have the opportunity to recover forecasted 2025 operating costs as a no-come of its base rate application previously mentioned by Scott. I would also like to note that Q3 is an important quarter for Tampa Electric with earnings contributions in the quarter comparable to the first two quarters combined.

Gregory Blunden: I would also like to note that Q3 is an important quarter for Tampa Electric, with earnings contributions in the quarter comparable to the first two quarters combined. The weekly income dollar modestly increased earnings contribution from a US operations by $3 million for the quarter. Corporate costs increase by $15 million or six cents is quarter primarily driven by higher interest expense and the unfavorable translation of US dollar short term debt, partially offset by lower corporate taxes. And higher share count decrease adjusted earnings for share by three cents in the quarter, largely because of our drip and ATM activity over the past 12 months.

Speaker Change: The weakening Canadian dollar modestly increased earnings contribution from U.S. operations by $3 million for the quarter.

Gregory Blunden: Corporate costs increased by $15 million, or $0.06 this quarter, primarily driven by higher interest expense and the unfavorable translation of U.S. dollar short-term debt, partially offset by lower corporate taxes. And a higher share count decreased adjusted earnings per share by three cents in the quarter, largely because of our DRIP and ATM activity over the past 12 months. Our Canadian utilities earnings were $7 million or $0.02 lower quarter over quarter, primarily due to Nova Scotia Power's higher operating costs to support the customer growth we are experiencing and Income Tax Expense, partially offset by higher revenue as a result of that customer growth. And lastly, contributions from Mirror Energy decreased very modestly by $3 million or one cent for the quarter.

Speaker Change: Corporate costs increased by $15 million or 6 cents this quarter, primarily driven by higher interest expense and the unfavorable translation of U.S. dollar short-term debt partially offset by lower corporate taxes.

Speaker Change: And higher share count decreased adjusted earnings per share by three cents in the quarter, largely because of our DRIP and ATM activity over the past 12 months.

Gregory Blunden: Collins. Our Canadian utilities earnings were $7 million or $2 cents lower, quarter over quarter, primarily due to Nova Scotia Power's higher operating costs to support the customer growth we are experiencing, and income tax expense, partially offset by higher revenue as a result of that customer growth. And lastly, contributions from our mirror energy decreased very modestly by $3 million, or 1 cent, for the quarter. Year to date, adjusted earnings per share decreased by $0.30 to $1.28 during by higher corporate costs, lower contributions from Tample Electric, Nova Scotia Power, New Mexico Gas, and a Mirror Energy as well as an increased share count.

Speaker Change: Our Canadian Utilities earnings were $7 million or $0.02 lower quarter over quarter, primarily due to Nova Scotia Power's higher operating costs to support the customer growth we are experiencing.

Speaker Change: and Income Tax Expense, partially offset by higher revenue as a result of that customer growth.

Speaker Change: And lastly, contributions from Emera Energy decreased very modestly by $3 million or one cent for the quarter.

Gregory Blunden: Year-to-date adjusted earnings per share decreased by 30 cents to $1.28, driven by higher corporate costs, lower contributions from Tampa Electric, Nova Scotia Power, New Mexico Gas, and Emera Energy, as well as an increased share count. However, these were partially offset by increased earnings at People's Gas. Higher interest costs, losses on foreign currency bank balances, and higher operating and maintenance costs due to the timing of long-term compensation hedges contributed to the increase in corporate costs year-over-year, partially offset by increased corporate income tax recovery. The higher share count decreased adjusted earnings per year-to-date earnings by $0.07 compared to 2023.

Speaker Change: Year-to-date adjusted earnings per share decreased by 30 cents to $1.28 driven by higher corporate costs, lower contributions from Tampa Electric, Nova Scotia Power, New Mexico Gas, and Emera Energy, as well as an increased share count. These were partially offset by increased earnings at People's Gas.

Gregory Blunden: These were partially offset by increased earnings at People's Gas. Higher interest costs, losses on foreign currency bank balances, and higher operating and maintenance costs due to the timing of long-term compensation hedges contributed to the increase in corporate cost year over year, partially offset by increased corporate income tax recovery. The higher share count decreased the adjusted earnings per year-to-date earnings by $0.7 compared to 2023. At Tample Electric, new rates and strong customer growth were offset by higher interest costs and unfavorable weather, resulting in a decrease of $15 million or $6.00 year over year. As a reminder, in the first six months of 2023, Tample Electric experienced an extraordinarily strong weather-driven load compared to historical norms. Whereas in the first quarter of this year, it was the mildest weather experience in West Central Florida in 50 years.

Speaker Change: Higher interest costs, losses on foreign currency bank balances, and higher operating and maintenance costs due to the timing of long-term compensation hedges contributed to the increase in corporate costs year-over-year, partially offset by increased corporate income tax recoveries.

Speaker Change: The higher share count decreased adjusted earnings per year-to-date earnings by 7 cents compared to 2023.

Gregory Blunden: At Tampa Electric, new rates and strong customer growth were offset by higher interest costs and unfavorable weather, resulting in a decrease of $15 million, or $0.06, year-over-year. As a reminder, in the first six months of 2023, Tampa Electric experienced an extraordinarily high weather-driven load compared to historical norms, whereas in the first quarter of this year, it was the mildest weather experience in West Central Florida in 50 years As we have discussed previously, minimizing regulatory lag, especially in an environment of high interest rates, rising costs, and customer growth, is an important piece of our overall company strategy. Tampa Electric's rate case continues to progress forward, with a final decision expected in early November and new rates effective on January 1st, 2025.

Speaker Change: At Tampa Electric, new rates and strong customer growth were offset by higher interest costs and unfavorable weather, resulting in a decrease of $15 million, or $0.06, year-over-year.

Speaker Change: As a reminder, in the first six months of 2023, Tampa Electric experienced an extraordinarily strong weather-driven load compared to historical norms, whereas in the first quarter of this year, it was the mildest weather experienced in West Central Florida in 50 years.

Gregory Blunden: As we have discussed previously, minimizing regulatory lag, especially in an environment of high interest rates, rising costs, and customer growth, is an important piece of our overall company strategy. Tample electric trade case continues to progress forward with a final decision expected in early November and new rates effect of January 1st of 2025. We continue to be confident that we will receive a constructive outcome that will allow Tample Electric to recover its higher operating costs and recover on the base rate investments it has been making since 2022. Year-to-date and mirror energy's results were solid, but they did not compare to the strength of 2023 that benefited from a much stronger natural gas market.

Speaker Change: As we have discussed previously, minimizing regulatory lag, especially in an environment of high interest rates, rising costs, and customer growth, is an important piece of our overall company strategy.

Speaker Change: Tampa Electric's rate case continues to progress forward, with a final decision expected in early November and new rates effective January 1st of 2025.

Gregory Blunden: We continue to be confident that we will receive a constructive outcome that will allow Tampa Electric to recover its higher operating costs and recover on the base rate investments it has been making since 2022. Year-to-date, Emera Energy's results were solid, but they did not compare to the strength of 2023, which benefited from a much stronger natural gas market. Emera Energy is down $13 million, or 5 cents. However, we continue to expect annual earnings to be within our guidance range of $15 to $30 million U.S. dollars.

Speaker Change: We continue to be confident that we will receive a constructive outcome that will allow Tampa Electric to recover its higher operating costs and recover on the base rate investments it has been making since 2022.

Speaker Change: Year-to-date, Emera Energy's results were solid, but they did not compare to the strength of 2023 that benefited from a much stronger natural gas market. Emera Energy is down $13 million or $0.05, however, we continue to expect annual earnings to be within our guidance range of $15 to $30 million U.S. dollars.

Gregory Blunden: Mirror energy is down 13 million or 5 cents; however, we continue to expect annual earnings to be within our guidance range of 15 to 30 million US dollars. Our Canadian utilities earnings were 12 million dollars or 4 cents lower year-to-date, primarily due to those kosher powers higher operating costs to support the customer growth we are experiencing and in contacts, partially offset by higher revenues as a result of customer growth. The weakening gained dollar modestly increased the earnings contribution from a US operations by $3 million year-to-date. And on a positive note, the gas utilities year-to-date results increased 10 million dollars or 4 cents, with the segment benefiting from new rates of People's Gas, offset by lower asset management optimization revenues and higher operating costs in New Mexico gas.

Gregory Blunden: Our Canadian utilities earnings were 12 million dollars, or four cents lower year-to-date, primarily due to those kosher power sources, higher operating costs to support the customer growth we are experiencing, and in contact, partially offset by higher revenues as a result of customer growth. The weakening Canadian dollar modestly increased the earnings contribution from our U.S. operations by $3 million here today.

Speaker Change: Our Canadian utilities earnings were $12 million or $0.04 lower year-to-date, primarily due to Nova Scotia Power's higher operating costs to support the customer growth we are experiencing and income tax, partially offset by higher revenues as a result of customer growth.

Speaker Change: The weakening Canadian dollar modestly increased the earnings contribution from our U.S. operations by $3 million year-to-date.

Gregory Blunden: And on a positive note, the gas utility's year-to-date results increased $10 million, or 4 cents, with the segment benefiting from new rates for people's gas offset by lower asset management optimization revenues and higher operating costs in New Mexico gas. Stepping back from the adjusted earnings discussion, we want to turn our focus again to the continued progress we are making towards improving key credit metrics, as Scott discussed earlier in the presentation. The strategic decisions and work completed to date demonstrate our firm commitment to retaining investment grade ratings.

Speaker Change: And on a positive note, the gas utility's year-to-date results increased $10 million or 4 cents, with the segment benefiting from new rates of people's gas offset by lower asset management optimization revenues and higher operating costs in New Mexico gas.

Gregory Blunden: Stepping back from the adjusted earnings discussion, we want to turn our focus again to the continued progress we are making towards improving key credit metrics. The Scott discussed earlier in the presentation, the strategic decisions and work completed-to-date demonstrated our firm commitment to retaining investment grade ratings. Continued execution of the strategy in support of a stronger balance sheet would position us to return to stable investment grade ratings in the near future. The previously announced transactions, the sale of the Labrador Ionline, the $500 million US dollar hybrid offering, and the $117 million dollar FAMP securitization, and Nova Scotia Power provided approximately $1.3 billion of debt Action.

Speaker Change: Stepping back from the adjusted earnings discussion, we want to turn our focus again to the continued progress we are making towards improving key credit metrics. As Scott discussed earlier in the presentation,

Scott Balfour: The strategic decisions and work completed to date demonstrate our firm commitment to retaining investment-grade ratings. Continuing execution of this strategy in support of a stronger balance sheet will position us to return to stable investment-grade ratings in the near future.

Gregory Blunden: Continuing execution of this strategy in support of a stronger balance sheet will position us to return to stable investment grade ratings in the near future. The previously announced transactions, the sale of the Labrador Island Link, the $500 million U.S. dollar hybrid offering, and the $117 million Pham securitization at Nova Scotia Power provided approximately $1.3 billion of debt reduction. Compared to Q2 2023, these actions have improved our holding company debt-to-total debt metric by 400 basis points, bringing us to approximately 35%.

Scott Balfour: The previously announced transactions, the sale of the Labrador Island Link, the $500 million U.S. dollar hybrid offering, and the $117 million Pham Securitization of Nova Scotia Power provided approximately $1.3 billion of debt reduction.

Gregory Blunden: Compared to Q2 2023, these actions have improved our holding company debt to total debt metric by 400 basis points, bringing us to approximately 35%. The announced sale of New Mexico gas will strengthen our balance sheet in a material way. The equity proceeds will further reduce holding company debt by approximately $1 billion and further improve our holding company to total debt by approximately 200 basis points while reducing our need for new equity in the future. Year-to-date, our operating cash flow is $1.2 billion, an increase of 7% over the same period in 2023. And on a trailing 12-month basis, our operating cash flow is $2.4 billion.

Scott Balfour: Compared to Q2 2023, these actions have improved our holding company debt-to-total debt metric by 400 basis points, bringing us to approximately 35%.

Gregory Blunden: The announced sale of New Mexico Gas will strengthen our balance sheet in a material way. The equity proceeds will further reduce holding company debt by approximately $1 billion and further improve our holding company's total debt by approximately 200 basis points while reducing our need for new equity in the future. Year-to-date, our operating cash flow is $1.2 billion, an increase of 7% over the same period in 2023. And on a trailing 12-month basis, our operating cash flow is $2.4 billion. This results in a strong ratio of reported operating cash flow to debt of approximately 12.5% at June 30th. This is the ratio of our actual cashflow available to service our debt and meet our obligations.

Scott Balfour: The announced sale of New Mexico Gas will strengthen our balance sheet in a material way. The equity proceeds will further reduce holding company debt by approximately $1 billion and further improve our holding company to total debt by approximately 200 basis points while reducing our need for new equity in the future.

Scott Balfour: Year-to-date, our operating cash flow is $1.2 billion, an increase of 7% over the same period in 2023. And on a trailing 12-month basis, our operating cash flow is $2.4 billion.

Gregory Blunden: This results in a strong ratio of reported operating cash flow to debt of approximately 12.5% at June 30th. This is a ratio of our actual cash flow available to servicer debt and meet our obligations. We expect strong reported operating cash flow over the balance of the year. While the collection of fuel deferrals is winding down in Tampa, the potential for the securitization of the Nova Scotia Power fan would accelerate our cash flow growth in the second half of the year, which we would expect to result in a record-full-year operating cash flow. Of course, a reported cash flow includes net-over recovery, so fuel and storm-related deferrals.

Scott Balfour: This results in a strong ratio of reported operating cash flow to debt of approximately 12.5% at June 30th.

Scott Balfour: This is the ratio of our actual cash flow available to service our debt and meet our obligations.

Gregory Blunden: We expect strong reported operating cash flow over the balance of the year. While the collection of fuel deferrals is winding down in Tampa, the potential for the securitization of Nova Scotia power, Pham, would accelerate our cash flow growth in the second half of the year, which we would expect to result in a record full-year operating cash flow. Of course, our reported cash flow includes net over-recoveries of fuel and storm-related deferral

Scott Balfour: We expect strong reported operating cash flow over the balance of the year. While the collection of fuel deferrals is winding down in Tampa, the potential for the securitization of Nova Scotia power, Pham, would accelerate our cash flow growth in the second half of the year, which we would expect to result in a record full-year operating cash loss.

Scott Balfour: Of course, our reported cash flow includes net over-recoveries of fuel and storm-related deferrals. We acknowledge that normalizations are appropriate in periods of extreme year-over-year volatility in cash flow linked to commodity prices and storm costs.

Gregory Blunden: We acknowledge that normalizations are appropriate in periods of extreme year-over-year volatility in cash flow linked to commodity prices and storm costs. And we have demonstrated our ability to effectively manage through these various high costs. And as of June 30th, the deferred fuel and storm cost balances at Tampa Electric, People's Gas, and New Mexico Gas were immaterial. The Nova Scotia Power fan balance of 314 million is the only remaining material deferral. And, as it has been previously discussed, we are pursuing an opportunity to securitize those costs. Looking ahead, we expect our 2024 cash flow to debt metric to be in the range of 11.5 to 12 percent.

Gregory Blunden: We acknowledge that normalizations are appropriate in periods of extreme year-over-year volatility in cash flow linked to commodity prices and storm costs. And we have demonstrated our ability to effectively manage through these periods of high costs. And as of June 30th, the deferred fuel and storm cost balances at Tampa Electric, People's Gas, and New Mexico Gas were immaterial.

Scott Balfour: And we have demonstrated our ability to effectively manage through these periods of high costs, and as of June 30th, the deferred fuel and storm cost balances at Tampa Electric, People's Gas, and New Mexico Gas were immaterial.

Gregory Blunden: The Nova Scotia power fan balance of $314 million is the only remaining material deferral, and as has been previously discussed, we are pursuing an opportunity to securitize those costs. Looking ahead, we expect our 2024 cash flow to debt metric to be in the range of 11.5% to 12%. And if you adjust these on a pro forma basis for the impact of the sale of New Mexico gas, the range increases to 12% to 12.5% for Moody's and 11% to 11.5% for S&P. Improvements now and between now and the end of the year are expected to be driven by a number of factors. The full year impact of new base rates on people's gas.

Scott Balfour: The Nova Scotia power fan balance of $314 million is the only remaining material deferral, and as has been previously discussed, we are pursuing an opportunity to securitize those costs.

Scott Balfour: Looking ahead, we expect our 2024 cash-loaded debt metric to be in the range of 11.5%-12%.

Gregory Blunden: And you adjust these on a pro-format basis for the impact of the sale of New Mexico Gas, the range increases to 12 to 12.5 percent for Moody's and 11 to 11.5 percent for S&P. Improvements now and toward between now and the end of the year are expected to be driven by a number of factors. The full-year impact of new base rates of People's Gas, improved cash flow from Tampa Electric supported by the 2024 Gibra and lower interest costs. Lower corporate interest costs due to lower expected rates and lower debt volumes driven by our asset sales are continued and normal use of our ATM and DRIP.

Speaker Change: And if you adjust these on a pro forma basis for the impact of the sale of New Mexico gas, the range increases to 12 to 12.5% for Moody's and 11 to 11.5% for S&P.

Speaker Change: Improvements between now and the end of the year are expected to be driven by a number of factors.

Gregory Blunden: Approved cash flow from Tampa Electric supported by the 2000-24 GBRA and lower interest costs. Lower corporate interest costs due to lower expected rates and lower debt volumes driven by our asset sales and our continued and normal use of our ATM and direct, and lastly, the potential for securitization of additional fuel costs at Nova Scotia Power. We have also made significant headway on our whole-code debt-to-total-debt metric. Where we ended last year at approximately 40%, we have already improved that by 500 basis points to 35%, or 33% if you adjust the June 30th numbers to reflect the impact of the New Mexico gas sale.

Speaker Change: The full year impact of new base rates of people's gas, improved cash flow from Tampa Electric supported by the 2024 GIBRA and lower interest costs, lower corporate interest costs due to lower expected rates and lower debt volumes driven by our asset sales and our continued and normal use of our ATM and DRIP.

Gregory Blunden: And lastly, the potential for securitization of additional fuel costs at Nova Scotia Power.

Speaker Change: And lastly, the potential for securitization of additional fuel costs at Nova Scotia Power.

Gregory Blunden: We have also made significant headway in our whole code debt to total debt metric. Where we ended last year at approximately 40 percent, we have already improved that by 500 basis points to 35 percent, or 33 percent if you adjust the June 30 at numbers to reflect the impact of the New Mexico Gas sale. We continue to de-leverage by making the appropriate capital allocation decisions. Whether it is selling assets, issuing equity to the ATM or DRIP, or leaning into the hybrid market when it's available, we have shown that we are focused on doing the right thing for shareholders and creditors alike.

Speaker Change: We have also made significant headway on our whole-code debt-to-total-debt metric. Where we ended last year at approximately 40%, we have already improved that by 500 basis points to 35%, or 33% if you adjust the June 30th numbers to reflect the impact of the New Mexico gas sale.

Gregory Blunden: We continue to deleverage by making the appropriate capital allocation decisions. Whether it is selling assets, issuing equity to the ATM or DRIP, or leaning into the hybrid market when it is available, we have shown that we are focused on doing the right thing for shareholders and creditors alike. Before I turn it back over to Scott, I would like to reiterate that we are confident in our ability to grow our EPS at the pace that we set out back in June.

Speaker Change: We continue to deleverage by making the appropriate capital allocation decisions, whether it is selling assets, issuing equity through the ATM or DRIP, or leaning into the hybrid market when it is available, we have shown that we are focused on doing the right thing for shareholders and creditors alike.

Gregory Blunden: Before I turn it back over to Scott, I would like to reiterate that we are confident in our ability to grow our EPS at the pace that we set out back in June. We are already starting to see interest rates subside, and when coupled with our recent debt repayments, we expect our corporate interest expense to be materially lower in the second half of 2024. The growth we are experiencing our utilities show no signs of abating, which will make it easier for us to make the investments that our utilities require. No doubt there will be periods where weakness is in some quarters, but our plan is solid and we continue to work on it.

Speaker Change: Before I turn it back over to Scott, I would like to reiterate that we are confident in our ability to grow our EPS at the pace that we set out back in June .

Gregory Blunden: We are already starting to see interest rates subside, and when coupled with our recent debt repayments, we expect our corporate interest expense to be materially lower in the second half of 2024. The growth we are experiencing in our utilities shows no signs of abating, which will make it easier for us to make the investments that our utilities require. No doubt there will be periods when there are weaknesses in some quarters, but our plan is solid, and we continue to work on it. Now, I'll turn it back over to Scott.

Scott Balfour: We are already starting to see interest rates subside, and when coupled with our recent debt repayments, we expect our corporate interest expense to be materially lower in the second half of 2024.

Speaker Change: The growth we are experiencing in our utilities show no signs of abating, which will make it easier for us to make the investments that our utilities require. No doubt there will be periods where weaknesses in some quarters, but our plan is solid and we continue to work on it. And now I'll turn it back over to Scott.

Scott Balfour: And now we'll turn it back over to Scott. Thanks, Greg. I'd like to wrap up the call with two messages. First, a thank you to the team. As you all know, the process to sell part of the portfolio was not easy work, and we concluded two processes within a little over two months; challenging to say the least. Secondly, as a result of that hard work, we've optimized the portfolio, solidified the business, strengthened the balance sheet, addressed our payout ratio, and ensured our path to achieve or surpass our target credit metrics. I believe that we are now incredibly well positioned with a competitively strong dividend yield, strong rate base and EPS growth in front of us, and with significant growth opportunities focused in Florida, one of the best regions in North America to own and operate utilities.

Scott Balfour: I'd like to wrap up the call with two messages. First, a thank you to the team. As you all know, the process to sell part of the portfolio was not easy work, and we concluded two processes within a little over two months. Challenging, to say the least.

Scott Balfour: Thanks, Greg. I'd like to wrap up the call with two messages. First, a thank you to the team.

Scott Balfour: As you all know, the process to sell part of the portfolio was not easy work, and we concluded two processes within a little over two months, challenging to say the least.

Scott Balfour: Secondly, as a result of that hard work, we've optimized the portfolio, solidified the business, strengthened the balance sheet, addressed our payout ratio, and ensured our path to achieve or surpass our target credit metric. I believe that we are now incredibly well positioned, with a competitively strong dividend yield, a strong rate base, and EPS growth in front of us, and with significant growth opportunities focused in Florida, one of the best regions in North America to own and operate utilities. I'm more confident than ever in our ability to deliver competitively strong value to our shareholders over the next few years. And with that, I'll turn the call back.

Scott Balfour: Secondly, as a result of that hard work, we've optimized the portfolio, solidified the business, strengthened the balance sheet, addressed our payout ratio, and ensured our path to achieve or surpass our target credit metrics.

Scott Balfour: I believe that we are now incredibly well positioned.

Scott Balfour: With a competitively strong dividend yield, strong rate base and EPS growth in front of us, and with significant growth opportunities focused in Florida, one of the best regions in North America to own and operate utilities.

Scott Balfour: I'm more confident than ever in our ability to deliver competitively strong value to our shareholders over the next few years.

Scott Balfour: I'm more confident than ever in our ability to deliver competitively strong value to our shareholders over the next few years. And with that, I'll turn the call back to Dave.

Dave Bezanson: And with that, I'll turn the call back to Dave.

Dave Bezanson: Thank you, Scott. This includes the presentation, and we'd now like to open the call for questions for panelists. Thank you.

Operator: Thank you, Scott. This concludes the presentation, and we'd now like to open the call for questions from analysts.

Dave Bezanson: Thank you, Scott. This concludes the presentation, and we'd now like to open the call for questions from analysts.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press the star followed by the number on your touchtone phone. You will hear a prompt that your hand has been raised. Questions will be taken in the order of If you wish to cancel your request, please press the star followed by 2. If you are using a speakerphone, please lift the handset before pressing any keys.

Operator: Ladies and gentlemen, we will now begin the question-and-answer session. If you have a question, please press to store followed by the one and a custom phone. We will hear a prompt that your hand has been raised. Questions will be taken in the order received. The district council, your request, you express to store followed by the two. If you are using a speaker phone, please lift the handset before pressing your keys.

Speaker Change: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. If you have a question, please press the star followed by the 1 and touch the phone.

Speaker Change: You will hear a prompt that your hand has been raised. Questions will be taken in the order received.

Speaker Change: If you wish to cancel your request, please press the star followed by the 2. If you are using a speakerphone, please lift the handset before pressing any keys.

Rob Hope: Your first question is from Rob Hope from Scotiabank. Please ask your question. Good morning, everyone.

Rob Hope: Your first question is from Rob Hope from Skillshare Fan, please ask your question. Good morning, everyone. With the New Mexico sale and the little sale announced, how do you think about your funding plan in 24 and 25 and 26 versus your prior commentary? And specifically, once New Mexico was closed, could we see the ATM seat?

Speaker Change: Your first question is from Rob Hope from Skillshare Bank. Please ask your question.

Rob Hope: Good morning, everyone. With the New Mexico sale and the little sale announced, how do you think about your funding plan in 24 and 25 and 26 versus your prior commentary? And specifically, you know, once New Mexico is closed, could we see the ATMC?

Rob Hope: Good morning, everyone.

Speaker Change: With the New Mexico sale and the little sale announced, how do you think about your funding plan in 24 and 25 and 26 versus your prior commentary? And specifically, you know, once New Mexico is closed, could we see the ATM seat?

Gregory Blunden: Good morning, Rob. It's Greg. I'd kind of break it into two pieces. I wouldn't anticipate any material change in our approach to funding over the balance of this year, but certainly with the incremental sale of New Mexico gas to complement the little that does provide some flexibility in the future and probably a little bit premature rollover funding plan later this year to cover the 25 to 27. I'm curious, but all things being equal, we would expect to have less reliance on the ATM over the coming years. Appreciate that.

Scott Balfour: I'd kind of break it into two pieces. I wouldn't anticipate any material change in our approach to funding over the balance of this year, but certainly with the incremental sale of New Mexico gas to complement the little that does provide some flexibility in the future. And, probably a little bit premature, we'll roll out our funding plan later this year to cover the 25 to 27 periods, but all things being equal, we would expect to have less reliance on the ATM over the coming years.

Speaker Change: Good morning, Rob. It's Greg.

Rob Hope: I'd kind of break it into two pieces. I wouldn't anticipate any material change in our approach to funding over the balance of this year.

Rob Hope: But certainly with the incremental sale of New Mexico gas to complement the lill, that does provide some flexibility in the future and probably a little bit premature. We'll roll out our funding plan later this year to cover the 25 to 27 periods.

Rob Hope: All things being equal, we would expect to have less reliance on the ATM over the coming years.

Rob Hope: I appreciate that, and then. I guess this is a bit of a two-part question, but, Where are we in terms of the securitization of the remaining fuel costs in Nova Scotia? And based on your commentary, is it fair to assume that, you know, we'll say discussions or the relationship with the government in Nova Scotia is moving in the right direction? Rob, it's Peter Gregg from Nova Scotia.

Gregory Blunden: And then I guess this is a bit of a two-part question, but where are we in terms of the securitization of the remaining fuel costs in Nova Scotia and based on the your commentary? Is it fair to assume that, you know, we'll say discussions or the relationship with the government in Nova Scotia is moving our direction?

Speaker Change: Appreciate that and then

Speaker Change: I guess this is a bit of a two-part question, but...

Speaker Change: Where are we in terms of the securitization of the remaining fuel costs in Nova Scotia, and based on your commentary, you know, is it fair to assume that, you know, we'll say discussions or the relationship with the government in Nova Scotia is moving in the right direction?

Peter Gregg: Hi Rob, it's Peter Gregg from Nova Scotia Power. Thanks for the question. Yeah, a two-parter. I'll start at the bottom, the last one first.

Peter Gregg: Rob, it's Peter Greg from Nova Scotia Power. Thanks for the question. Yeah, two parrots. I started the last one first. We have a very productive working relationship with the government here in Nova Scotia. We work with them every day on a number of key files. And so yes, very confident in that strength of that relationship.

Peter Gregg: Hi Rob, it's Peter Gregg from Nova Scotia Power. Thanks for the question. Yeah, two-parter. I'll start at the bottom, the last one first. We have a very productive working relationship with the government here in Nova Scotia.

Peter Gregg: We have a very productive working relationship with the government here in Nova Scotia. We work with them every day on a number of key files. And so yes, I'm very confident in that, the strength of that relationship. And on the potential for securitization, not much more I can say than I think Scott and Gregg have already touched on it. I'd just say we're having good, productive discussions with the federal government and do see the potential for that securitization, as both Scott and Gregg mentioned.

Peter Gregg: We work with them every day on a number of key files, and so yes, very confident in the strength of that relationship. And on the potential for securitization, not much more I can say than...

Peter Gregg: And on the potential for securitization, I'm much more I can say than. Scott and Greg already touched on it. I just say we're having good, productive discussions with the federal government and do see the potential for that securitization, as both Scott and Greg mentioned.

Speaker Change: I think Scott and Gregg already touched on it, but I'd just say we're having good, productive discussions with the federal government and do see the potential for that securitization, as both Scott and Gregg mentioned.

Unknown Executive: Thank you.

Speaker Change: Thank you.

Maurice Choy: Thank you once again. Please press star one should you wish to ask me a question.

Maurice Choy: Thank you once again. Please press star 1 should you wish to ask a question. Your next question is from Maurice Choy from RBC Capital Markets. Please ask your question. Thanks and good morning, everybody.

Speaker Change: Thank you.

Speaker Change: Thank you once again. Please press star 1 should you wish to ask a question. Your next question is from Maurice Choy from RBC Capital Markets. Please ask your question.

Maurice Choy: Your next question is from Maurice Choi from RBC Capital Markets. Please ask our question. Thanks. Thank you.

Unknown Executive: Conference call. At this time, all lines are in a listen only mode. Following the presentation, we will conduct a questioning answer session. Instructions will be provided at that time for you to support a question. If anyone has any difficulties hearing the conference, please press store zero for operators assistance at any time.

Maurice Choy: Thanks and good morning everyone. So I'm going to come back to slide 11, where you shared your line of sight to, if not through, the 12% CFO2 debt threshold. A couple of things on this. For the 11 to 12% range, can you help us bridge what gets you this 50 basis points to 12%? I know, and to that as well, I recall in the past you spoke about improving this metric by 50 basis points annually after you've reached 12%. Is that something you still foresee? And are these generally just done through new custom rates? Or are they just transactions you're pondering?

Maurice Choy: Good morning, everyone. Some of the come back to slide 11 where you shared your line of sight to, if not through, the 12% year for the death threshold. A couple of things on this for the 11% range. Can you help us bridge what gets you this 50 basis points to 12% and to that as well. I recall in the past you spoke about proving this metric 50 basis points annually of the year, which 12% is that something is still for C and are these generally just done through a new customer rates or are they are just transactions you're pondering.

Maurice Choi: Thanks and good morning, everyone. I just want to come back to slide 11, where you shared your line of sight to, if not through, the 12% CFO2 debt threshold. A couple of things on this. For the 11...

Maurice Choi: Can you help us bridge what gets you this 50 basis points to 12%?

Dave Bezanson: I would now like to turn a conference over to Dave Bezanson. Please go ahead.

Speaker Change: And to that as well, I recall in the past you spoke about improving this metric 50 basis points annually after you've reached 12%. Is that something you still foresee and are these generally just done through new custom rates or are they are just transactions you're pondering?

Dave Bezanson: Thank you Jenny and thank you all for joining us this morning for Emera's Q2 2024 conference call and live webcast. Emera's second quarter earnings release was distributed this morning by a newswire and the financial statements, management's discussion and analysis and the presentation being referenced on this call are available on our website at amira.com. Joining me for this morning call are Scott Balfour, Emera's president and chief executive officer, Greg Blunden, Emera's chief financial officer and other members of the Amira's management team.

Gregory Blunden: Yeah, Maurice is for a good morning. You know, really we're trying to provide a range because obviously there will be some volatility in cash load in particular period of time. So really the 50 basis point range is intended to reflect that. Not tied to any specific action that needs to be taken or anything like that, but just what we would expect to be a kind of a normal volatility in potential cash flow or period of time. So, you know, again, nothing, all things being equal, you know, think of the midpoint of that with some volatility on the up and down side of it.

Gregory Blunden: Really, we're trying to provide a range because obviously there will be some volatility in cash flow at any particular period of time. So really, the 50 basis point range is intended to reflect that, not tied to any specific action that needs to be taken or anything like that, but just what we would expect to be a kind of normal volatility in potential cash flow over a period of time. Again, all things being equal, think of the midpoint of that with some volatility on the up and down side of it.

Speaker Change: Yeah, Maurice, this is Greg. Good morning. You know, really, we're trying to provide a range because obviously there will be some volatility in cash flow at any particular period of time. So really, the 50 basis point range is intended to reflect that.

Dave Bezanson: This morning's discussion will include forward-looking information which is subject to the cautionary statement contained in the supporting slide. Today's discussion and presentation will also include references to non-gap financial measures. Please refer to the appendix for definitional information and reconciliation of historical non-gap measures to the closest gap financial measure.

Speaker Change: not tied to any specific action that needs to be taken or anything like that, but just what we would expect to be a kind of a normal volatility in potential cash flow over a period of time. So, you know, again, nothing, all things being equal, you know, think of the midpoint of that with some volatility on the up and downside of it. In terms of once we get to where we want to be, yes, we are still committed to

Gregory Blunden: In terms of once we get to where we want to be, yes, we are still committed to improving our credit metrics every year. I think, as we've said before, we'd like to have at least a 100 basis point cushion on our threshold metrics and are confident that we'll be able to achieve that over the next year or two.

Gregory Blunden: In terms of once we get to where we want to be, yes, we are still committed to improving our credit metrics every year. I think, as we've said before, we'd like to have at least 100 basis point cushion on our threshold metrics. And, you know, confident that we'll be able to achieve that over the next year or two. And the pathway to get that 100 basis point cushion that generally just mostly customer rates or something else. Yeah, no, you know, just general growth in the business. I think the way to think of it. You know, all of our utilities, you know, will be in for rates over the next couple of years. Tampa Electric in right now with, you know, a fairly significant ask from customers.

Scott Balfour: And now I will turn things over to Scott. Thank you Dave and good morning everyone. Before we get into the results for the quarter, I'd like to spend a few minutes on the significant steps we've taken recently to improve our credit metrics and balance sheet and reposition the company for future growth. In the second quarter, we announced a $500 million US hybrid offering, the sale of our interest in the Labrador Island link and the securitization of $117 million of unrecovered fuel costs at Nova Scotia Power.

Speaker Change: improving our credit metrics every year. I think, as we've said before, we'd like to have at least 100 basis point cushion on our threshold metrics and confident that we'll be able to achieve that over the next year or two.

Scott Balfour: Combined, these actions have provided approximately $2 billion in liquidity and have resulted in a reduction of holding company debt for credit rating purposes of approximately $1.3 billion. These actions have significantly improved our holding company debt total debt metric by approximately 400 basis points to end the quarter at 35% and they've added 90 basis points to our CFO to debt metric. In June, we followed these actions with the reduction of a dividend growth rate, which when matched with our five to seven percent target EPS growth will lead to a steady improvement in our dividend pay-over ratio over time.

Maurice Choy: And the pathway to get that 100 basis points cushion, is that generally just mostly custom rates or something else?

Speaker Change: And the pathway to get that 100 basis points cushion, is that generally just mostly custom rates or something else?

Gregory Blunden: Yeah, no, you know, just general growth in the business. I think the way to think of it is, all of our utilities will be in for rates over the next couple of years, Tampa Electric is in right now with, you know, a fairly significant demand from customers. And so, yes, a lot of it will just be the normal growth of our business that will be supported by rates that are needed for those customer investments that we're making.

Speaker Change: Yeah, no, you know, just general growth in the business, I think the way to think of it, you know, all of our utilities, you know, will be in for rates over the next couple of years, Tampa Electric in right now with, you know, a fairly significant ask from from customers.

Unknown Executive: And so, yes, a lot of it will just be the normal growth from our business, so that we'll be supported by rates that are needed for those customer investments that we're making. And since you point out the Tampa Electric rate case, you obviously have seen the settlement at Duke. Your thoughts on whether or not a similar outcome can emerge for you.

Speaker Change: And so yes, a lot of it will just be the normal growth from our business that will be supported by rates that are needed for those customer investments that we're making.

Maurice Choy: And since you point out the Tampa electric rate case, you obviously have seen the settlement at Duke. What are your thoughts on whether or not a similar outcome could emerge for you?

Speaker Change: And since you point out the Tampa electric weight case, you obviously have seen the settlement at Duke. Your thoughts on whether or not a similar outcome could emerge for you?

Unknown Executive: Any workies on the line?

Archibald Collins: I know Archie's on the line. Would you like to respond to that? Sure.

Unknown Executive: Aren't you? Would you like to respond to that? Sure. Happy to do that.

Archibald Collins: Sure, happy to do that. Good morning, Maurice. Um...

Unknown Executive: Good morning, Maurice. I guess first of all, I would just simply say, you know, we applaud Duke and the interveners to their case for achieving a settlement that all parties felt was fair and balanced. I think your specific question is, does the presence of that settlement increase the likelihood of a temple electric achieving a settlement before our litigated hearing dates? And I think the answer to that is no, Maurice. We're always open to a settlement, but at this point, the window is closing rapidly, and we had a pre-hearing yesterday, and all signs right now are pointing towards conducting the litigated hearing the week of the 26th of August.

Archibald Collins: I guess first of all, I would just simply say, you know, we applaud Duke and the intervenors in their case for achieving a settlement that all parties felt was fair and balanced. I think your specific question is, does the presence of that settlement increase the likelihood of Tampa Electric achieving a settlement before our scheduled hearing date? And I think the answer to that is, Maurice. We're always open to a settlement, but at this point, the window is closing rapidly, and we had a pre-hearing yesterday, and all signs right now are pointing toward conducting the contested hearing the week of the 26th of August.

Scott Balfour: The sale of New Mexico Gas, as announced earlier this week, will further reduce holding company debt, strengthen our balance sheet, and more efficiently contribute to funding our capital investments in our high growth markets. The new Mexico Gas sale proceeds will further reduce holding company debt by approximately $1 billion in improve our holding company to debt metric approximately 200 basis points. This transaction will also reduce our requirement for new equity and improve our ratio of cash from operations to debt by 50 basis points.

Speaker Change: I guess, first of all, I would just simply say, you know, we...

Maurice Choy: Were there any particular items within this? I'm happy hearing that there was a bigger hurdle to meet on for both sides that you highlighted.

Speaker Change: Claude

Speaker Change: Duke and the intervenors to their case for achieving...

Speaker Change: A settlement that all parties felt was was fair and balanced.

Speaker Change: I think your specific question is, does the presence of that settlement increase the likelihood of Tampa Electric achieving a settlement before our litigated hearing dates?

Speaker Change: And I think the answer to that is no, Maurice, we're always...

Scott Balfour: New Mexico Gas has been an important part of America since 2016, and we're proud of what we've accomplished with the New Mexico Gas team over the past eight years. We've strengthened the business and its performance and have invested in all parts of the business to expand and maintain a safe reliable system that will serve customers in the state for decades to come. As I said to employees in New Mexico earlier this week, this announcement comes with mixed emotions for all of us at Amira.

Speaker Change: We're always open to a settlement, but at this point, the window is closing rapidly. And, you know, we had a pre-hearing yesterday, and all signs right now are pointing towards conducting the litigated hearing the week of the 26th of August .

Unknown Executive: Was there any particular items within this hearing that was a bigger hurdle to meet that for both sides that you highlight? No, not at all. I mean, it was just yesterday's hearing was just standard fare, reviewing the open issues, seeing which ones could be resolved prior to the settlement. The relationship we have with the all intervening parties, throughout the entire process, has been professional, very cordial, and so yesterday's pre-hearing was consistent with that. It was as expected. We feel, we obviously feel really good with the case that we've put forward. And again, we're preparing to show the litigated hearing.

Speaker Change: Were there any particular items within this?

Maurice Choi: I'm happy hearing that there was a bigger hurdle to meet at for both sides that you highlight.

Scott Balfour: But Bernard Capital Partners clearly recognized what we know at Amira and that is that New Mexico Gas is a great business with a skilled and dedicated team. We look forward to continuing to work closely with the New Mexico Gas colleagues over the next year along with the team at Bernhard to secure regulatory approval and ensure a smooth transition for New Mexico Gas customers and of course the New Mexico Gas team. Once closed proceeds from this sale along with the recent Labrador Island link transaction will more than exceed the 15% of our funding plan that we set as a target last year.

Archibald Collins: No, not at all. Yesterday's pre-hearing was just standard fare, reviewing the open issues and seeing which ones could be resolved prior to the settlement. The relationship we have had with all intervening parties, you know, throughout the entire process has been professional and very cordial. And so yesterday's pre-hearing was consistent with that. I mean, it was as expected. We obviously feel really good about the case that we've put forward. And again, we're preparing to sort of litigate again.

Speaker Change: No, not at all. I mean, it was just

Speaker Change: Yesterday's pre-hearing was just standard fare, reviewing the open issues, seeing which ones could be resolved prior to the settlement. The relationship we have with all intervening parties...

Speaker Change: You know, throughout the entire process has been professional.

Speaker Change: Very cordial. And so yesterday's pre-hearing was consistent with that. I mean, it was it was as expected. We feel, we obviously feel really good with the case that we've put forward.

Scott Balfour: All these actions, the sale of will, the hybrid offering, the famed securitization, adjusting the David and growth rate, and finally the sale of New Mexico Gas were part of a very strategic effort to strengthen our balance sheet, improve credit metrics, and fund our ambitious capital plan. We've worked with focus and determination over the past eight months to optimize our portfolio and to put ourselves in a stronger position where we can deploy capital in areas where it is most valuable to deliver higher quality earnings and cash flows, creating an even stronger Amira today and into the future.

Speaker Change: And again, we're preparing to sort of look at it day-to-day.

Unknown Executive: Thank you very much.

Maurice Choy: Thanks, if I could finish up with one final one here. Scott, you mentioned that you reconfirmed a 5 to 7% EPS CAGR given the NMGC potential sale. But can you also confirm the payout ratio of being approximately 80% by 2027 that given the modest NMGC? Yeah, so no, no.

Maurice Choy: I finish up with one final one here. You mentioned that we confirmed a 57% EPS carrier given the NMGC potential sale, but can you give us a little bit more time? Yes.

Speaker Change: Thank you. I could finish up with one final one here. Scott, you mentioned that you reconfirmed a 5-7% EPS CAGR.

Speaker Change: given the NMGC potential sale, but can you also confirm the payout ratio of being approximately 80% by 2027, given the modest NMGC?

Unknown Executive: No change to the reference that we made as part of that June announcement, Maurice. So, you know, our expectation is that with delivery of that earnings growth that's in front of us, that we should see the pay-up ratio get very close to that 80% number within the guidance period, and obviously continued reduction in the years that follow.

Scott Balfour: Yeah, so no change to the reference that we made as part of that June announcement, Maurice. So, you know, our expectation is that with delivery of the earnings growth that's in front of us, we should see the payout ratio get very close to that 80% number within the guidance period and, obviously, continued reduction in the years that follow. Thank you very much.

Scott Balfour: Greg will take us through the results for the quarter but I want to reiterate that we remain confident in our forward-looking earnings. The comparatively weak start to 2024 does not change our view in the forward earnings growth potential of our business, including the average 5% to 7% medium-term growth guidance that we rolled out in June. When we announced our plan to fund part of our capital plan through asset sales last November, we highlighted the significant customer growth and the growing demand for cleaner and more reliable energy.

Scott Balfour: Yeah, so no change to the reference that we made as part of that June announcement, Maurice. So, you know, our expectation is that with delivery of that earnings growth that's in front of us, that we should see the payout ratio get very close to that 80% number within the guidance period and obviously continued reduction in the years to follow.

Unknown Executive: Thank you very much.

Maurice Choi: Thank you very much.

Unknown Executive: Thank you.

Operator: Thank you once again. Please press star 1 should you wish to ask a question. There are no further questions at this time. I will now hand the call back to Dave Bezanson for his closing remarks.

Operator: Once again, please press the door.

Scott Balfour: These dynamics continue. Just to touch on a few of the important projects we have underway across the business, in Florida, Tampa Electric recently completed advanced gas-path combustion turbine upgrades at its base-side plant, which resulted in 157 megawatts of new capacity and a 3.7% improvement in the station's overall operating efficiency, all for only $87 million US dollars. As a result, this facility now has more generation capacity with lower emission profile and produces energy at a lower cost per megawatt.

Operator: One should wish to ask a question.

Speaker Change: Thank you once again. Please press star 1 should you wish to ask a question.

Speaker Change: Hello, I'm Scott Balfour, and I'm Scott Balfour, and I'm Scott Balfour,

Operator: There are no further questions at this time.

Speaker Change: www.globalonenessproject.org

Dave Bezanson: I will now hand the call back to Dave Bessensen for the closing remarks. Thank you, Jenny. And thank you all for your interest in Amira.

Speaker Change: There are no further questions at this time. I will now hand the call back to Dave Bezanson for the closing remarks.

Dave Bezanson: Thank you, Jenny, and thank you all for your interest in EMERA. Before wrapping up, please note that our next Analyst Call will be held on November 8th at 5 p.m. Eastern Time. I hope you all enjoy the rest of your summer.

Dave Bezanson: Before wrapping up, please note that our next analyst call will be held on November 8th at 5 p.m. Eastern time. I hope you all enjoy the rest of your summer.

Dave Bezanson: Thank you, Jenny, and thank you all for your interest in Emera. Before wrapping up, please note that our next analyst call will be held on November 8th at 5 p.m. Eastern Time. Hope you all enjoy the rest of your summer.

Operator: Thank you, ladies and gentlemen.

Operator: Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining us. You may all disconnect your lines.

Operator: The conference has now ended. Thank you all for joining. You may all disconnect our lines.

Scott Balfour: The team is also making goods strides with respect to the South Tampa Resiliency Project, where they're working closely with the team at McDill Air Force Base to install four reciprocating natural gas-fired engines on the base. This project provides the base with the resiliency they need while strengthening the Tampa Electric Grid and avoiding costly transmission upgrades otherwise needed to serve the fast-growing load in South Tampa. As the people of Florida know all too well, Hurricane season is upon us and Hurricane Debbie moved into Western Florida earlier this week.

Speaker Change: Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect your lines.

Scott Balfour: With benefit of its underground system, there was virtually no impact to people's gas system or its customers. And while the storm was not in the direct path of Tampa Electric Service Territory, there were of course impacts from the severe wind and rain. Foundation. But the team was able to restore all customers safely and quickly, with all customers fully restored before the end of the day. Further evidence of the value of our investments in resiliency through this storm protection plan.

Scott Balfour: In Nova Scotia, we have a number of transformational projects underway. In June, the regulator approved Nova Scotia Power's 150 MW battery energy storage system project. The application sought the approval for collection of $237.7 million required to develop three 50 megawatt four-hour grid scale battery facilities. The project includes financial support from the federal government's smart renewables and electrification pathways and electricity pre-development programs, as well as a financial agreement with the Canada Infrastructure Bank and the WMA, enabling Nova Scotia's 13 MIGMA communities to make an equity investment in connection with the project while also lowering the cost for customers.

Scott Balfour: These projects will come into service in late 2025 and early 2026. Additionally, Nova Scotia Power's Reccove Hydro Facility, comprised of two 106 megawatt units, has been undergoing a $102 million major life extension program. To maintain continued operation, the life extension work is being staggered, with Unit 1 wrapping up early in September of this year. These units will now operate more efficiently over a wider range, operating down to 30 MW compared to a previous 50 MW floor.

Scott Balfour: This added flexibility is beneficial as we transition to higher renewable and variable generation sources like wind and solar. This major investment on this extremely valuable asset will extend the life of Reccove by an additional 50 years. Overall, we're on track to deliver our $8.8 billion through your capital plan. Our utilities are investing in reliability and storm hardening, modernizing our grids, and keeping pace with customer growth in Florida and Nova Scotia. So far this year, we've invested $1.4 billion in capital, with over 75% of that in the state of Florida.

Scott Balfour: Earlier this quarter, we received unanimous approval from the New Mexico Public Regulation Commission for the rate case settlement agreement at New Mexico Gas. As a reminder, the settlement included a base revenue increase of $30 million US, which will come into effect on October 1st of this year. It also maintained the ROE at 9.375 percent and capital structure of 52 percent equity 48 percent debt, and made the weather normalization adjustment mechanism a regular part of the tariff.

Scott Balfour: You will note from our New Mexico Gas Company sale announcement that we and Bernhard have committed to fully respect the future test year that the rate application was based on, which is October 1st, 2024, to September 30th, 2025, which means unless otherwise directed by the 25th. Looking ahead, there are two more important initiatives on the immediate horizon that will be important drivers of growth and de-risking. First, in Nova Scotia, the potential securitization of additional deferred fuel costs related to delayed energy deliveries from Maxgrap Falls.

Scott Balfour: Both the provincial and federal governments have publicly indicated their focus on this issue and we are optimistic there will be more clarity in the coming months. This is an important affordability initiative for customers in Nova Scotia and would also provide critical assistance in stabilizing Nova Scotia power's credit rating position. The team at Nova Scotia power is supporting these efforts in partnership with both governments. Secondly, the team at Tampa Electra continues to advance its rate application with the regulatory hearing scheduled for the week of August 26th and a final decision due in early November for new rates to be effective January 1st, 2025. It's been an incredibly busy and productive quarter and indeed the years so far.

Scott Balfour: I'm more confident than ever that we are taking the right strategic steps to deliver for customers and shareholders.

Gregory Blunden: With that, I'll turn it over to Greg to walk us through the highlights of the quarterly and year-to-date results. Thank you Scott and good morning everyone. This morning we reported second quarter adjusted earnings of $151 million and adjusted earnings per share of 53 cents compared to $162 million and 60 cents in Q2 of 2023. Your adjusted earnings were $367 million and adjusted earnings for share was $1.28 compared to $430 million and $1.58 of the same period in 2023.

Gregory Blunden: Consistent with Q1, the reduction in justice EPS for this quarter was expected. On going higher operating costs, resulting largely from higher interest expense have impacted our results. On the positive side, this quarter's results continue to reflect the favorable customer growth in Tampa electric, people's gas and Nova Scotia power and the new rates at people's gas and Tampa electric. I would like to note that we have excluded the $107 million after tax gain on our sale of equity interest in the Labrador Island link from our adjusted earnings for the quarter.

Gregory Blunden: This would above the rise increase adjusted EPS by 37 cents. People's gas continues to deliver robust performance driven by the new rates at the beginning of this year that reflect the growth of the experience over the last three years. This increase was somewhat offset by higher operating costs into Mexico gas and as a result, the gas segment was up $6 million or $3 cents. Tampa electric delivered strong results with growth of $7 million or $2 cents over Q2 of 2023 driven primarily by new base rates that wouldn't do effect on January 1st and strong customer growth partially offset by higher operating costs.

Gregory Blunden: Whether in the quarter was consistent with the very favorable weather experience in Q2 of 2023 and Tampa electric will have the opportunity to recover forecasted 2025 operating costs as an outcome of its base rate application previously mentioned by Scott. I would also like to note that Q3 is an important quarter for Tampa electric with earnings contributions in the quarter comparable to the first two quarters combined. The weekly income dollar modestly increased earnings contribution from a US operations by $3 million for the quarter.

Gregory Blunden: Corpor costs increase by $15 million or $6 cents is quarter primarily driven by higher interest expense and the unfavorable translation of US dollar short term debt partially offset by lower corporate taxes. And higher share count decreased adjusted earnings for share by $3 cents in the quarter largely because of our drip and ATM activity over the past 12 months.

Gregory Blunden: Awards. Our Canadian utilities earnings for $7 million or $2 cents lower, quarter over quarter, primarily due to Nova Scotia powers higher operating costs to support the customer growth we are experiencing. Income tax expense partially offset by higher revenue as a result of that customer growth. And lastly, contributions from our mirror energy decreased very modestly by $3 million or $1 cents for the quarter. Year to date, adjusted earnings per share decreased by $0.30 to $1.28 during by higher corporate costs, lower contributions from tample electric, Nova Scotia power, New Mexico gas, and a mirror energy as well as an increased share count.

Gregory Blunden: These were partially offset by increased earnings at people's gas. Higher interest costs, losses on foreign currency bank balances and higher operating and maintenance costs due to the timing of long-term compensation hedges contributed to the increase in corporate cost of your year, partially offset by increased corporate income tax recovery. The higher share count decreased the adjusted earnings per year-to-date earnings by $0.7 compared to 2023. At tample electric, new rates and strong customer growth were offset by higher interest costs and unfavorable weather resulting in a decrease of $15 million or $6.00 year-to-year.

Gregory Blunden: As a reminder, in the first six months of 2023, tample electric experience and extraordinary strong weather-driven load compared to historical norms, whereas in the first quarter of this year, it was the mildest weather experience in West Central Florida in 50 years. As we have discussed previously, minimizing regulatory lag, especially in an environment of high interest rates, rising costs and customer growth is an important piece of our overall company strategy. Tample electric trade case continues to progress forward with a final decision expected in early November and new rates effect of January 1st of 2025.

Gregory Blunden: We continue to be confident that we will receive a constructive outcome that will allow tample electric to recover its higher operating costs and recover on the base rate investments it has been making since 2022. Year-to-date and mirror energy's results were solid, but they did not compare to the strength of 2023 that benefited from a much stronger natural gas market. Mirror energy is down 13 million or 5 cents, so we continue to expect annual earnings to be within our guidance range of 15 to 30 million US dollars.

Gregory Blunden: Our Canadian utilities earnings were 12 million dollars or 4 cents lower year-to-date. Primarily due to those kosher powers, higher operating costs to support the customer growth we are experiencing and in contacts, partially offset by higher revenues as a result of customer growth. The weakening gained dollar modestly increased the earnings contribution from a US operations by $3 million year-to-date. And on a positive note, the gas utilities year-to-date results increased $10 million or 4 cents with a segment benefiting from new rates of people's gas offset by lower asset management optimization revenues in higher operating costs in New Mexico.

Gregory Blunden: Stepping back from the adjusted earnings discussion, we want to turn our focus, again, to the continued progress we are making towards improving key credit metrics. As Scott discussed earlier in the presentation, the strategic decisions and work completed to date demonstrate our firm commitment to retaining investment grade ratings. Continuing execution of the strategy in support of a stronger balance sheet will position us to return to stable investment grade ratings in the near future. The previous enhanced transactions, the sale of the Labador Ionlin, the $500 million US dollar hybrid offering and the $117 million FAM securitization and Nova Scotia power, provided approximately $1.3 billion of debt reduction.

Gregory Blunden: Action. Compared to Q2 2023, these actions have improved our holding company debt to total debt metric by 400 basis points, bringing us to approximately 35%. The announced sale of New Mexico gas will strengthen our balance sheet in a material way. The equity proceeds will further reduce holding company debt by approximately $1 billion, and further improve our holding company to total debt by approximately 200 basis points, while reducing our need for new equity in the future.

Gregory Blunden: Year-to-date, our operating cash flow is $1.2 billion, an increase of 7% over the same period in 2023. And on a trailing 12-month basis, our operating cash flow is $2.4 billion. This results in a strong ratio of reported operating cash flow to debt of approximately 12.5% at June 30th. This is a ratio of our actual cash flow available to servicer debt and meet our obligations. We expect strong reported operating cash flow over the balance of the year.

Gregory Blunden: While the collection of fuel deferrals is winding down in Tampa, the potential for the securitization of the Nova Scotia Power FAM would accelerate our cash flow growth in the second half of the year, which we would expect to result in a record-full-year operating cash flow. Of course, a reported cash flow includes net-over recovery, so fuel and storm related deferrals. We acknowledge that normalizations are appropriate in periods of extreme year-over-year volatility in cash flow linked to commodity prices and storm costs.

Gregory Blunden: And we have demonstrated our ability to effectively manage through these various high-costs. And as of June 30th, the deferred fuel and storm cost balances, a Tampa electric people's gas, a new Mexo gas, were a material. The Nova Scotia Power FAM balance, a 314 million is the only remaining material deferral, and as it been previously discussed, we are pursuing an opportunity to securitize those costs. Looking ahead, we expect our 2024 cash flow debt metric to be in the range of 11.5 to 12 percent.

Gregory Blunden: And you adjust these on a pro-format basis for the impact of the sale of new Mexo gas, the range increases to 12 to 12.5 percent for Moody's and 11 to 11.5 percent for S&P. Improvements now and between now and the end of the year are expected to be driven by a number of factors. The full-year impact of new base rates of people's gas, improved cash flow from Tampa electric supported by the 2024 G-BRA and lower interest costs, lower corporate interest costs due to lower expected rates and lower debt volumes driven by our asset sales and our continued and normal use of our ATM and drip. And lastly, the potential for securitization of additional fuel costs at Nova Scotia Power.

Gregory Blunden: We have also made significant headway in our whole code debt to total debt metric, where we ended last year at approximately 40 percent. We have already improved that by 500 basis points to 35 percent or 33 percent if you adjust the June 30 numbers to reflect the impact of the new Mexo gas sale. We continue to de-laverage by making the appropriate capital allocation decisions, whether it is selling assets, issuing equity to the ATM or drip, or leaning into the hybrid market when it's available we have shown that we are focused on doing the right thing for shareholders and creditors alike.

Gregory Blunden: Before I turn it back over to Scott, I would like to reiterate that we are confident in our ability to grow our EPS at the pace that we set out back in June. We are already starting to see interest rates subside and when coupled with our recent debt repayments we expect our corporate interest expense to be materially lower in the second half of 2024. The growth we are experiencing are utilities show no signs of abating which will make it easier for us to make the investments that our utilities require. No doubt there will be periods where weaknesses in some quarters, but our plan is solid and we continue to work on it.

Scott Balfour: And now we'll turn it back over to Scott. Thanks, Craig.

Scott Balfour: I'd like to wrap up the call with two messages. First, a thank you to the team. As you all know, the process to sell part of the portfolio was not easy work, and we concluded two processes within a little over two months, challenging to say the least. Secondly, as a result of that hard work, we've optimized the portfolio, solidified the business, strengthened the balance sheet, addressed our payout ratio, and ensured our path to achieve or surpass our target credit metrics.

Scott Balfour: I believe that we are now incredibly well-positioned with a competitively strong dividend yield, strong rate base and EPS growth in front of us, and with significant growth opportunities focused in Florida, one of the best regions in North America to own and operate utilities.

Scott Balfour: I'm more confident than ever in our ability to deliver competitively strong value to our shareholders over the next few years.

Dave Bezanson: And with that, I'll turn the call back to Dave. Thank you, Scott.

Unknown Executive: This includes the presentation, and we'd now like to open the call for questions for the panelists. Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press just to our followed by the one and a touch tone phone. We will hear a prompt that your hand has been raised. Questions will be taken in the order received. The district council, your request, you express the store followed by the sale.

Unknown Executive: If you are using a speaker phone, since lifting handset before pressing titles.

Rob Hope: Your first question is from Rob Hope from Skillshare Band. Please ask your question. Good morning, everyone.

Gregory Blunden: With the New Mexico sale and the little sale announced, how do you think about your funding plan in 24 and 25 and 26 versus your prior commentary? And specifically, once New Mexico is closed, could we see the ATM seat? Good morning, Rob. It's Greg. I'd kind of break it into two pieces. I wouldn't anticipate any material change in our approach to funding over the balance of this year, but certainly with the incremental sale of New Mexico gas to complement the little that does provide some flexibility in the future and probably a little bit premature rollover funding plan later this year to cover the 25 to 27 periods. But all things being equal, we would expect to have less reliance on the ATM over the coming years. Appreciate that.

Gregory Blunden: And then, I guess this is a bit of a two part question, but where are we in terms of the securitization of the remaining fuel costs in Nova Scotia? And based on the commentary, is it fair to assume that we'll say discussions or the relationship with the government in Nova Scotia is moving our direction?

Gregory Blunden: Rob, it's Peter Greg from Nova Scotia Power. Thanks for the question. Yeah, two parter. I started the last one first. We have a very productive working relationship with the government here in Nova Scotia. We work with them every day on a number of key files. And so, yes, very confident in that strength of that relationship. And on the potential for securitization, I'm much more I can say than... Thanks, Scott, and Greg already touched on it. Let's just say we're having good productive discussions with the federal government, and do see the potential for that securitization as both Scott and Greg mentioned. Thank you.

Unknown Executive: Thank you once again, please press star one should you wish to ask me a question.

Maurice Choy: Your next question is from Maurice Choy from RBC Capital Markets, please ask your question. Thanks, and good morning, everyone. Some of the come back to slide 11, where you shared your line of sight to, if not through the 12% year for the debt threshold. A couple of things on this for the 11% range, can you help us bridge what gets you this 50 basis points to 12% and to that as well.

Maurice Choy: I recall in the past, you spoke about improving this metric 50 basis points annually after you've reached 12%. Is that something you still foresee and are these generally just done through a new customer rates or are they are just transactions you're pondering?

Gregory Blunden: Yeah, Maurice, this is for a good morning. You know, really we're trying to provide a range because obviously there's there will be some volatility in cash load any particular period of time. So really the 50 basis point ranges is intended to reflect that not tied to any specific action that needs to be taken or anything like that, but just what we would expect to be a kind of a normal volatility in potential cash flow or a period of time.

Gregory Blunden: So, you know, again, nothing all things being equal, you know, think of the midpoint of that with some volatility on the up and down side of it. In terms of once we get to where we want to be, yes, we are still committed to improving our credit metrics every year. I think as we've said before, we'd like to have at least 100 basis point cushion on our threshold metrics. And, you know, confident that we'll be able to achieve that over the next year or two.

Gregory Blunden: And the pathway to get that 100 basis point cushion that generally just mostly customer rates or something else. Yeah, no, you know, just general growth in the business. I think the way to think of it, you know, all of our utilities, you know, we'll be in for rates over the next couple of years, Tampa electric in right now with, you know, a fairly significant ask from customers. And so, yes, a lot of it will just be the normal growth from our business, so that will be supported by rates that are needed for those customer investments that we're making.

Unknown Executive: And since you point out the Tampa electric rate case, you obviously have seen the settlement at Duke, your thoughts on whether or not a similar outcome can emerge for you. Any workies on the line, aren't you would you like to respond to that? Sure, happy to do that.

Unknown Executive: Good morning, Maurice. I guess first of all, I would just simply say, you know, we applaud Duke and the interveners to their case for achieving a settlement that all parties felt was fair and balanced. I think your specific question is, does the presence of that settlement increase the likelihood of temple electric achieving a settlement before our litigated hearing dates? And I think the answer to that is no Maurice. We're always open to his settlement, but at this point, the window is closing rapidly, and we had a pre-hearing yesterday, and all signs right now are pointing towards conducting the litigated hearing the week of the 26th of August.

Unknown Executive: Were there any particular items within this pre-hearing that was a bigger hurdle to meet that for both sides that you highlight? No, not at all. I mean, it was just yesterday's pre-hearing was just standard fare, reviewing the open issues, seeing which ones could be resolved prior to the settlement. The relationship we have with the in all intervening parties, throughout the entire process has been professional, very cordial, and so yesterday's pre-hearing was consistent with that. I mean, it was as expected. We feel, we obviously feel really good with the case that we've put forward, and again, we're preparing to show the litigated hearing.

Unknown Executive: Thank you very much.

Unknown Executive: I finished up with one final one here.

Unknown Executive: You mentioned that we confirmed a 57% EPS carrier given the NMGC potential sale, but can you confirm the payout ratio of being approximately 80% between 27% that given the modest NMGC? Yeah, so no change to the reference that we made as part of that June announcement, Maurice. So, you know, our expectation is that with delivery of that earnings growth that's in front of us, that we should see the payout ratio get very close to that 80% number within the guidance period and obviously continued reduction in the years that fall.

Unknown Executive: Thank you very much. Thank you once again, please press door. One should be wish to ask a question. There are no further questions at this time.

Dave Bezanson: I will now hand the call back to Dave Bessensen for the closing remarks. Thank you, Jenny. And thank you all for your interest in Amira. Before wrapping up, please note that our next question is if analyst call will be held on November 8th at 5 p.m. Eastern time.

Unknown Executive: I hope you all enjoy the rest of your summer. Thank you, ladies and gentlemen.

Unknown Executive: The conference has now ended. Thank you all for joining. You may all disconnect our lines.