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 question-and-answer session. [Operator Instructions]. I would now like to turn the conference over to Dave Bezanson. Please go ahead.

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 emera.com. 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. 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. And now I want to 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. 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. In June, we followed these actions with the reduction of our dividend growth rate, which, when matched with our 5% to 7% 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. 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. 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.…

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. Year-to-date, 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. 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. 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 $0.37. Peoples 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 $0.03. 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 1 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 and Tampa Electric will have the opportunity to recover forecasted 2025 operating costs as a outcome of its base rate application previously mentioned by Scott. I would…

Thanks, Greg. I'd like to wrap up the call with 2 messages. First, thank you to the team. As you all know, the process to sell part of the portfolio was not easy work, and we concluded 2 processes within a little over 2 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. 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.

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

[Operator Instructions] Your first question is from Rob Hope from Scotiabank. Please ask your question.

Good morning, everyone. With the New Mexico sale and the LIL 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 ceased?

Yeah. 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 LIL, 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.

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 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 Power. Thanks for the question. Yes, two-parter. I'd start at the bottom, 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, not much more I can say than, I think, Scott and Greg 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 Greg mentioned.

Thank you.

[Operator Instructions] Your next question is from Maurice Choy from RBC Capital Markets. Please ask your question.

Thanks, and good morning, everyone. So, let's come back to Slide 11, where you shared your line of sight to, if not through, the 12% CFO 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, I recall in the past, you spoke about improving this metric 50 basis points annually after you've reach 12%. Is that something you still foresee? And are these generally just done through new customer rates? Or are they just transactions you're pondering?

Yes. Maurice, this is Greg. Good morning. Really, we're trying to provide a range because, obviously, there's -- 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 a normal volatility in potential cash flow over a period of time. So again, nothing -- all things being equal, 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 confident that we'll be able to achieve that over the next year or two.

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

Yes. No, just general growth in the business, I think the way to think of it. All of our utilities will be in for rates over the next couple of years. Tampa Electric in, right now, with a fairly significant ask from customers. 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.

Understood. And since you pointed out the Tampa Electric rate case, you obviously have seen the settlement at Duke. Your thoughts on whether or not a similar outcome could emerge for you?

I've Archie on the line. Archie, would you like to respond to that?

Sure, happy to do that. Maurice, I guess, first of all, I would just simply say, 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 Tampa 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.

Were there any particular items within this pre-hearing that was a bigger hurdle to meet for both sides that you'd highlight?

No, not at all. 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. 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 litigate it here.

Thank you. I'd 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 being approximately 80% by '27 that -- given the models that than NMGC?

Yes. So, no change to the reference that we made as part of that June announcement, Maurice. So, 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 follow.

Thank you very much.

Thank you. [Operator Instructions] There are no further questions at this time. I will now hand the call back to Dave Bezanson for the closing remarks.

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 8 at 5:00 p.m. Eastern Time. Hope you all enjoy the rest of your summer.

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