TC Energy Corporation Q1 FY2026 earnings call

• Entered 2026 with strong momentum, best safety performance in six years. - Generated over $3 billion of comparable EBITDA, up 14% year over year. - Reached settlement agreements on Canadian mainline, ANR, and Great Lakes assets. - Announced $1.5 billion Appalachia Supply Project on Columbia Gas System. - Consecutive open seasons in Ohio and on crossroads system saw strong response. - Reached new commercial agreements for Coastal GasLink Phase 2 in Canada. - Bruce Power MCR program execution on track, with distributions expected to exceed capital spend by 2030 and free cash flow growth by 2032. - U.S. heartland is strategically important with over 27,000 miles of pipeline infrastructure, and natural gas demand expected to grow 40% through 2035. - Added project execution dashboard for visibility on key projects driving EBITDA growth.

TC Energy delivered 14% year-over-year growth in comparable EBITDA, reaching over $3 billion. Canadian and U.S. natural gas pipeline businesses performed exceptionally well, setting records. Power and energy solutions business had Bruce Power with 88% availability in the quarter and Alberta cogeneration fleet with 99.5% availability. Mexico and U.S. natural gas businesses placed over $8 billion of new assets into service in 2025. Canadian natural gas pipelines benefited from higher flow through depreciation and NGTL incentive earnings, while power and energy solutions saw higher contributions from Bruce Power. The Heartland region represents approximately three-quarters of U.S. deliveries, with natural gas demand expected to grow 40% through 2035. The $1.5 billion Appalachia Supply Project on Columbia Gas System is expected to add 0.8 BCF per day of capacity with an anticipated in-service date of 2030 and potential for up to 2 BCF per day through future expansions.

• Reaffirming 2026 comparable EBITDA outlook at $11.6 to $11.8 billion, and 2028 comparable EBITDA target at $12.6 to $13.1 billion. - Projects tracking on schedule and on or under budget, similar to 2025 where over $8 billion of projects were placed into service on time and 15% below budget. - Expecting continued EBITDA growth towards 2030 and beyond, with the Bruce MCR program post-2030 setting up well for this.

• Project execution is a strong focus as critical to continued growth. - Human capital, supply chain, and permitting/policy environment could be potential limiters. Supply chain is tighter in the U.S. than Canada. Permitting and policy environment needs to be monitored as constraints could present themselves.

Q: Appreciate the implication that the Appalachian Supply Project arguably has a bit of pre-spend for future growth. Can you give us a sense of what the economics of a fully loaded project at 2BCF might look like from a build multiple perspective, and then what needs to happen to get to 2BCF per day, and when do you think that could happen by?

A: Tina Baraka mentioned the nature of facilities allows for leveraging future opportunities, can be expanded with minor modifications, and is in a high-growth corridor.

Q: Can you give more details on the open season on NGTL and how a project like that would compete for capital versus other opportunities across the portfolio?

A: Tina Baraka said they launched an open season on NGTL due to increased demand, goal is to aggregate customer demand efficiently, and investments are gauged for competitive risk-adjusted return.

Q: When you mark the two BCF of capital-efficient expansions, is 2BCF a specific point or line-of-sight to customer interests, and are there other opportunities?

A: Tina Baraka said marked 2BCF based on economic expansion, could be expanded further, and in a great high-growth corridor with other opportunities.

Q: How does the settlement compare to guidance expectations and room for upside?

A: Francois said outcome is positive, consistent with estimates, and within predictions.

Q: Can you elaborate on the new investment framework in discussion for NGTL and how it relates to Canadian Mainline Settlement?

A: Francois said Mainline was a win-win, new investment framework is an extension, early days but win-win on risk-adjusted basis.

Q: What are the gating items to FID from the successful Crossroads pipeline open season, and view of magnitude of opportunity size and relative competitive positioning?

A: Tina Baraka said focus on refining commitments and scope with customers, potential to upsize, and in Midwest, see about five-plus BCF per day of incremental gas demand over next 10 years with highly advantaged footprint.

Q: How is the project development pipeline progressing, book-to-bill ratio?

A: Francois said pipeline in aggregate is solidly within five to seven times EBITDA build multiple and 12% in Libra to IRR after-tax range, backlog building due to customers upsizing.

Q: What would be looked for in Canada's electricity and nuclear strategy to underpin future investment in Bruce, and when could discussions kick off?

A: Francois and Greg said Bruce is best in class, have ambitions to invest in nuclear across country, immediate focus on Bruce MCR program and expansion.

Q: Conceptually about the $6 billion of late-stage projects pending approval, what's in the bucket?

A: Tina Baraka said projects not included in pending capital are advancing based on customer discussions and power generation growth, continuing to find opportunities in Midwest corridor.

Q: On the NGL side, with the revised CGL framework, walk through how it limits TC Energy's construction and cost exposure and what it means for returns if CGL Phase II goes FID later in the decade?

A: Tina Baraka said LNG Canada will lead project execution as execution manager, limits capital commitments and liability, and project is attractive on levered return basis.

Q: In the U.S., what factors will determine whether you can continue to grow versus maintain market share in next wave of U.S. LNG projects, and spare capacity vs likely requirement for new builds?

A: Tina Baraka said have developed strong approach to serving LNG export corridor, have projects underway and well positioned to capture additional opportunities through expansion of facilities.

Q: Go back to the $15 billion backlog and follow-up, how much of Canadian expansion is in that backlog and what's the opportunity set?

A: Tina Baraka said very little of NGTL expansion is in the backlog, early days in conversations with customers, could be several billion dollars.

Q: From the very top, what are the areas of business seen as emerging limiters to the durability of growth?

A: Francois said human capital, supply chain, and permitting/policy environment could be limiters, with human capital being a key one.

Q: Clarify on the Appalachian Supply Project, is it bringing incremental Marcellus egress or improving connectivity to existing supply?

A: Tina Baraka said TC is number one transporter of Appalachian supply in the region, project will allow additional egress out of the basin.

Q: On Midwest gas demand growth, where is the gas supply coming from and conversations with Appalachia producers?

A: Tina Baraka said supply opportunities give access to Appalachia, Gulf Coast region, Mid-Continent, Bakken, and WCSB, and customers are looking for supply optionality.

Q: On Crossroads, competing with others for demand, and diversification of gray bar projects awaiting finalization?

A: Tina Baraka said confident of winning fair share, gray bar projects have fair degree of diversification across the asset base