TC Energy Corporation (TRP) Earnings Call Transcript & Summary

Thank you for standing by. This is the conference operator. Welcome to the TC Energy Second Quarter 2026 Results Conference Call. [Operator Instructions] The conference call is being recorded. [Operator Instructions] I would now like to turn the conference over to Mr. Gavin Wylie, Vice President, Investor Relations. Please go ahead.

Thank you. I'd like to welcome you to TC Energy's Second Quarter 2026 Conference Call. Joining me are Francois Poirier, President and Chief Executive Officer; Sean O'Donnell, Executive Vice President and Chief Financial Officer; along with other members of our senior leadership team. Francois and Sean will begin today with some comments on our operational and financial highlights. A copy of the slide presentation is available on our website under the Investors section. Following their remarks, we'll take questions from the investment community. We ask that you please limit yourself to 2 questions. And if you're a member of the media, please contact our media team. Today's remarks will include forward-looking statements that are subject to important risks and uncertainties. For more information, please see the reports filed by TC Energy with Canadian securities regulators and with the U.S. Securities and Exchange Commission. Finally, we'll refer to certain non-GAAP measures that may not be comparable to similar measures presented by other entities. A reconciliation is contained in the appendix of this presentation. With that, I'll now turn the call to Francois.

Thanks, Gavin, and good morning, everyone. I'd like to begin today with an update on the strong momentum we continue to see across our businesses. We're capitalizing on the competitive advantages afforded by our incumbent footprint in some of the highest growth markets in North America and converting strong demand into high-return growth projects. Our consistent focus on safety and execution excellence is the foundation that delivers reliable service, it wins new business, and it ultimately drives higher financial performance that continues to create long-term shareholder value. Through the first half of 2026, we've made meaningful progress on our development pipeline. We placed approximately $2 billion of assets into service, largely on time and on budget or better, and we expect to place approximately $3.5 billion into service by the end of the year. Including approximately $700 million of new natural gas pipeline projects we announced this quarter, we've now sanctioned $3 billion of growth projects at a weighted average unlevered after-tax IRR of approximately 12%. Our late-stage pending approval bucket now stands at approximately $7 billion, up $1 billion from last quarter. This portfolio reflects multiple projects in advanced stages of commercial discussions with large anchor customers and now includes our Crossroads project, where we have executed precedent agreements subject to Board approval with multiple anchor customers and are in advanced discussions with several other potential shippers. We continue to evaluate opportunities to expand the project scope with additional shippers and expect to sanction the project in the fourth quarter of this year. Looking further out, we have over $20 billion of additional projects in advanced stages of origination that align with our targeted 5 to 7x build multiple range, further supporting our long-term growth visibility. Collectively, this progress reinforces our ability to grow our capital investments while maintaining our disciplined approach to project execution, risk-adjusted returns and balance sheet strength. Our expanding capital backlog is anchored by fundamental demand growth driven by the next wave of LNG, accelerating power and data center load, LDC reliability and connectivity between low-cost supply and high-value markets, each aligning to a strategic pillar of our portfolio. Our latest outlook now points to an approximately 51 Bcf per day of incremental North American natural gas demand by 2035, and that's a 40% increase over 2025 levels and represents an 11 Bcf a day increase from our original outlook. Accelerating power demand accounts for more than half of this increase and now represents approximately 16 Bcf per day of incremental growth through 2035. Importantly, nearly 70% of this demand growth is concentrated in the U.S. Heartland, Alberta and Mexico, regions where TC Energy has a strong incumbent position and significant existing infrastructure. Additionally, customers are increasingly prioritizing supply diversity and reliability. And by 2035, more than 60% of North American natural gas production will originate from TC Energy connected basins, primarily Appalachia and the WCSB. So why are we growing our backlog and capturing growth? In the majority of premium markets we serve, we are the incumbent, often the largest provider, and that allows us to develop cost competitive expansions, converting this strong fundamental backdrop into our growing capital backlog. Our extensive footprint and our integrated storage capability and long-standing customer relationships allow us to develop innovative commercial solutions that meet evolving customer needs. Today's project announcements are a clear example of these advantages in action, reflecting growing demand from natural gas-fired power generation and data center development. The 2 U.S. projects on our Columbia system were sanctioned at a weighted average build multiple of approximately 5.8x, demonstrating the quality of our opportunity set. And in Canada, we continue to serve growing customer demand through our multiyear growth program with the latest expansion project on our NGPL system. Across our systems, we continue to see high-quality, low-risk and highly executable opportunities with more to come. Fundamentals in Canada are strengthening and customer demand continues to validate our strategy. Our outlook calls for over 8 Bcf per day of additional Canadian natural gas demand through 2035, driven by NextWave LNG, including Coastal GasLink Phase 2, industrial growth and evolving power and data center load. Our extensive natural gas franchise is uniquely positioned to capture this growth with the NGTL system serving as the primary conduit connecting Western Canadian supply to expanding markets within Alberta and across North America. The market signals we're seeing today reinforce this view. Our recent 2029 Greater Edmonton area offering closed fully subscribed and our 2030 to 2032 intra-Alberta offering saw record amounts of participation by data center developers. Given the strong customer interest, we are exploring opportunities to expand this offering to better meet customer demand. With additional receipt and export offerings currently in market, we will look to convert visible demand into incremental projects across our Canadian assets. Our focus is straightforward: understand customer demand, invest where the market is growing at competitive returns and continue to deliver low-risk repeatable performance. On to Bruce Power. We are seeing similar momentum in Ontario power markets where power demand is expected to grow significantly over the coming decades. Against this backdrop, Bruce Power continued execution excellence is strengthening its ability to competitively serve this growing demand. As a testament to this, Bruce Power returned Unit 3 to service following its major component replacement more than 7 months ahead of the ISO schedule and approximately 15% below the cost of Unit 6. The result was driven by a strong focus on innovation and a repeatable stage build approach, capturing learnings from each refurbishment to improve productivity, reduce risk and enhance execution certainty. Disciplined upfront planning and design maturity continue to improve cost, schedule and execution certainty across the program. New technologies and automation have already provided meaningful productivity gains, including our Unit 4 recently achieving the most efficient CAN-DUDfuel on record. The Bruce Power story continues to resonate strongly, and I'd encourage anyone looking for a deeper dive to review the Bruce Power investor teach-in available on our website. And with that, I'll turn it over to Sean to walk through the numbers.

Thanks, Francois. Good morning, everybody. As we walk through the second quarter financial results, I'll also touch on how our strong asset performance, continued project delivery excellence and commercial optimization are each contributing to the upper end of our 2026 EBITDA outlook range. Overall, TC delivered a 12% year-over-year growth in comparable EBITDA, marking another solid quarter of contributions by each of our business units. Our natural gas pipeline business has performed extremely well with daily average flows up 3% across our 3-country network as compared to this same quarter last year, driven by strong customer utilization and high levels of operational availability. In Power and Energy Solutions, Bruce Power achieved 99% availability in an exceptionally strong quarter following the return of Unit 3 in June from its major component replacement outage that Francois mentioned. On the right-hand side, you'll see that each business increased its comparable EBITDA contribution compared to the same quarter last year. In Canada Gas, EBITDA increased by $38 million or 4%, primarily due to higher flow-through depreciation on the NGTL and Canadian Mainline systems, along with higher incentive earnings on the NGTL system. In the U.S., EBITDA increased by $129 million or 12% due to additional contract sales and higher earnings from ANR and Columbia Gas. In our Mexico business, EBITDA increased by $90 million or 28%, driven by higher earnings related to the May 25 in-service date of Southeast Gateway as well as higher earnings from Cert. Finally, in Power and Energy Solutions, EBITDA increased by $60 million or 20% due to higher contributions from Bruce Power, reflecting the early return of Unit 3, strong availability and an annual price increase. Overall, it was a great quarter, supported by high system availability and performance across our pipeline assets and a particularly strong contribution from Bruce Power. Turning to our comparable EBITDA outlook. We are now targeting the upper end of our 2026 range of $11.6 billion to $11.8 billion, reflecting the strong operational performance our teams have delivered year-to-date and our high degree of confidence in our execution plans for the balance of the year. Looking ahead to 2028, we continue to target comparable EBITDA of $12.6 billion to $13.1 billion, representing an approximate 6% annualized midpoint growth from our 2025 results. On the right-hand side of the page, we've highlighted several of the key financial tailwinds that are contributing to both our 2026 and 2028 outlook, including many of the same drivers that we benefited from in 2025. The key drivers include continued strong asset availability, expected rate case schedules, disciplined project execution and continued commercial and technical innovation and optimizations across the portfolio. As Francois highlighted, the depth of our project backlog continues to grow, which is extending the visibility of our development pipeline well beyond 2030. We introduced a new feature to our net capital expenditure outlook this quarter. So we'll walk through the key data points for you to understand where the project backlog stands. First, as Francois mentioned, we sanctioned approximately $3 billion of growth projects year-to-date, including today's announcements. Second, we've grown our pending approval bucket in gray to approximately $7 billion, up from $6 billion last quarter. And finally, our $20-plus billion backlog of projects in origination, we've added the gray hash bars to our annual capital outlook to provide greater visibility into potential timing of these projects and a new pie chart to the right to highlight the demand drivers that are influencing the current composition of this segment of our project backlog. It's worth highlighting on the pie chart that nearly 2/3 of our origination backlog is associated with power generation. That's consistent with our year-over-year increased natural gas demand outlook that Francois mentioned earlier on Slide 6. As a general statement on FID timing, I'd say that we're looking to advance opportunities as early as possible, but expect that the sustained growth in our investment pace to occur in 2029, 2030 and beyond. While some of the FID time lines on our origination pipeline will remain dynamic, our approach to underwriting will remain disciplined. Any annual increase in our pacing of capital allocation will be underpinned by strong risk-adjusted returns, continued outstanding performance by our project delivery teams on cost and schedule and our commitment to maintaining our balance sheet strength and our 4.75x leverage target. Finally, we released this year's report on sustainability. Report provides a comprehensive overview of our sustainability performance and progress in support of our strategic priorities. A few highlights I'd like to draw your attention to. TC has reduced methane emissions intensity by 24% since 2019, while increasing throughput by 20% and growing our comparable EBITDA in our natural gas business by 57% over the same time frame. Our report provides details on the planned pathways to further advance our methane intensity target of a 40% to 55% reduction by 2035 from 2019 levels in a manner that supports asset competitiveness and strong financial performance. And finally, to evidence the effectiveness of our early and deep engagement with indigenous communities and their meaningful community and economic participation in our projects, I'm pleased to share that we've invested $5.4 billion with indigenous and native American businesses from 2021 through 2025. I encourage you to visit the report on our website to learn more. With that, I'll pass the call back to Francois.

Thanks, Sean. We continue to see the benefits of our disciplined strategy and clear set of strategic priorities. Across the business, we've delivered strong performance with second quarter comparable EBITDA increasing 12% year-over-year. And today, we now expect to be at the upper end of our 2026 comparable EBITDA outlook range. Additionally, the quarter's achievements from the return of Bruce Power Unit 3 more than 7 months ahead of schedule to the sanctioning of approximately $3 billion of growth projects year-to-date, further reinforces our confidence in the outlook for the business. I'd like to leave you with this. Our confidence is driven not only by the scale of the opportunities we see ahead, but by our ability to consistently execute. With safety, operational and project execution excellence, we will continue to find innovative commercial solutions to meet evolving customer needs, increase the return on our existing assets. secure new capital projects and consistently deliver solid financial performance. Operator, we're now ready to take questions.

[Operator Instructions] And our first question for today will come from Theresa Chen with Barclays.

Would you elaborate on what you're seeing in terms of demand from your customers in Alberta, in particular, whether it be data center related or just looking at the numerous large-scale WCS crude egress projects that are currently under development, supporting robust outlook for oil sands production growth and incremental demand for natural gas as well or from a demand pull perspective on LNG exports, how are these dynamics impacting your ability to negotiate creative tolling structures with Canadian producers given already constrained gas takeaway capacity?

This is Francois. I'll just say at a very high level, then I'll pass it on to Tina dynamic in Alberta is similar to the dynamic across our footprint. And as you saw, we've increased our outlook to 51 Bcf a day of growth across the continent by 2035. A growing portion of that gas demand is coming from power generation. And lots of that opportunity is certainly in Alberta, but also in the U.S. Heartland. And of course, we have strong incumbency in both those regions. So over to you, Tina.

Yes. Thanks, Francois. Theresa, specific to your question about Canada, we are seeing growth across multiple sectors. Francois mentioned in his opening remarks about 8 to 10 Bcf of incremental demand. For us to address that demand, we have approximately half a dozen service offerings in the market totaling about 1 Bcf per day of capacity, spanning both receipt and delivery sides of NGTL and covering intra-Alberta and export points. So these offerings serve as a really helpful marker on the demand signal and directly inform our conversations on our next phase of growth for NGTL. Near-term demand targeted through the 2029 Greater Edmonton area offering, we saw a very strong market uptake on that, and we have 2030 to 2032 phased expansion that's going to unlock over 1 Bcf of intra-basin and egress opportunities. So we're seeing strong interest in the offerings with demand across both egress and intra-basin, and we're using this market data to inform our discussions on the next phase of growth across Canada.

And maybe turning to the Heartland in the U.S. Congratulations on the precedent agreements on Crossroads, and we look forward to FID in the fourth quarter. Would you be able to share any color at this point related to the ultimate size and perhaps relevant economics on the project and maybe subsequent expansion opportunities within the same corridor given the outsized interest you're seeing currently?

Theresa, this is Tina again. We are -- as we mentioned, we are really pleased to have signed a precedent agreement with a large anchor customers for our Crossroads expansion, expect to sanction that in the fourth quarter of this year. We're seeing significant market activity taking place across the Midwest region, which is supportive of broader investment thesis for us. We're seeing about 5 to 6 Bcf of demand growth across the Midwest, representing about a 2 Bcf year-over-year growth expectation out through 2035. We're the largest operator across several Midwest states, including Ohio, Wisconsin, Michigan, Indiana, and our footprint provides really strong delivery presence into those key demand centers. And from a competitive standpoint, incumbency and integration really matter in this market. So with our Columbia and our Crossroads, Northern Border, Great Lakes systems together give us a highly advantaged footprint. From the perspective of the Crossroads expansion, we would progress that through the next phase of discussions and sanctioning, and that will fall within our 5 to 7x build multiple.

The next question will come from Praneeth Satish with Wells Fargo.

Just on the backlog changes. So you increased the pending project backlog by about $1 billion this quarter and then the potential backlog by $5 billion. I guess, can we assume that the increase to the pending project backlog is basically the Crossroads project? And then the $5 billion increase to the origination backlog, I mean, that's quite significant. Any more detail you can provide in terms of the type of projects being added? I think, Sean, you mentioned 2/3 is power gen. But any more clarity in terms of the split between U.S., NGTL, Bruce Power and Mexico that you can share?

Yes. Praneeth, it's Sean. I'll take that. Thank you for a good question. We've got a lot of growth capital showing up in a lot of slides. Let me break it down for you a little bit. On your pending approval question, the way to think about that on Page 7, we show about $700 million that's been sanctioned. So $700 million moved from pending into sanctioned. And then when you go back to '13, you've seen that our pending has moved up. And yes, that is round numbers largely crossroads. And I would tell you it's going to be slightly north of $1 billion, but round numbers, you're exactly right. To the second part of your question on the potential project inventory, what we're calling origination in our new chart on Page 13. Yes, look, we felt it important to include actually on the slide this quarter because it is growing quite quickly. As you noted, $20 billion this year on origination in years, as you can see on the hatch bar chart and then a large portion of that is falling outside of 2030 and beyond. The largely power, as we said, 2/3. And then geographically, the way -- the rule of thumb I would give you on that $20 billion is about 2/3 of that is U.S. within that customer segment bar charts. And then to Francois's comments earlier, we have quite a bit of activity across NGTL on both the producer and the demand side. So about 1/3 of that capital is right now penciled for the Canadian markets.

Got it. That's very helpful. And then maybe switching gears. You've talked about using AI to optimize your pipeline network, which I think is is actually one of the more compelling AI use cases that we've seen so far in midstream. Can you give us an update, I guess, on that initiative at large and the results that you've seen so far? How much of the system is currently covered by the pilot that you're doing? What are the benefits that you're realizing today? And then how should we think about potentially scaling that pilot across the rest of your system? Can those gains be kind of linearly applied and the time frame to get there?

Praneet, it's Francois. I'll take that one. I appreciate the question, something we're really excited about ourselves. Look, we have proof-of-concept initiatives going across the organization. I would say, on a fairly small segments of pipe, 100 kilometers here, 100 kilometers there type of thing. No, you cannot linearly extrapolate because we picked some of the lowest-hanging fruit areas where we thought there would be a greater potential. Maybe a little bit of color on how we're doing this. Our teams across the company compete for the capital to implement AI solutions in their regions. So they have to present business cases. They have to commit to outcomes and then they get an allocation of capital. That's a good, strong fundamental way with accountabilities to deliver outcomes to figure out what the potential is. We're really at the very front end of that process. It takes time to have people sort of understand that's how we want to do things. And so we only have a near-term target for 2026 of $100 million of AI-related incremental EBITDA, and we're on track for achieving that this year, about halfway there with 2 quarters behind us. We expect to be able to articulate that potential in more detail hopefully by our November time frame all the way out to, let's say, 2030, but we need to let this process where the teams provide the business cases and compete for capital inform that for us. So it's still a little bit early to provide that kind of detail, but stay tuned. Our intention when we do provide that detail is to do it with lots of supporting proof points and information.

The next question will come from Aaron MacNeil with TD Cowen.

You've launched several NGTL and Alberta area open seasons ahead of establishing a long-term framework for future growth investments. When customers are bidding in these projects today, are they effectively underwriting projects based on a tentative new regulatory and return construct? Or is the ultimate return framework for those investments still to be determined?

It's still to be determined. The open seasons, Aaron, we're undertaking are to gauge at a much more detailed and granular fashion the level of demand for service and broken down specifically into different regions and service areas. as Tina mentioned, we're seeing more demand, and we're actually looking to potentially upsize some of the intra-Alberta offerings that we're undertaking. We are in parallel with that, having discussions with our customers about an investment framework. And it's still in the early stages of those discussions, but we hope to have some progress to report by the end of the year.

Okay. Great. You touched on the free cash flow inflection at Bruce Power at the update a few weeks ago. But based on your internal forecasting, what level of annual growth capital do you believe TC Energy could fund organically in 2029 and 2030 while sort of maintaining your targeted leverage metrics? And how should investors think about the funding plan if all those opportunities in your pipeline come to fruition?

Aaron, it's Sean. I'll take that question, a good one, and thank you for pulling forward the Bruce teaching, and that's an important hinge here to understand the growth capital in Gasco. I would -- let me describe the framework that we're using a 3-part framework, and we can drill into it a little bit. Funding growth capital, 3-part framework. First one is, look, the commitment to the 4.75 leverage or better, that's a firm commitment, right? And our organic deleveraging plan over the last couple and the next couple of years are going to set us up very well for that 29, 30 kind of ramp on growth capital that you're seeing. And it brings us really to the timing of that funding need. could be 29, could be 30, but I think you're also getting a sense for what kind of the 30s are going to look like. And let me now hinge back to that Bruce slide. The critical years for the Bruce MCR program are 2031 and 2032 when the final 2 units complete their MCR program. So -- and what Bruce unlocks for us is another $2 billion to $3 billion a year of growth capital, right? So that 2031, 2032 is an incredibly powerful addition from Bruce. So we've got this 2- or 3-year window between 2029 and call it, 2030 or 2031 that we're really solving for to support Tina and Greg. And the hierarchy of funding sources as we look at that 3-year window, 29 to 31 before Bruce really kicks in is -- obviously, it's just compounding the EBITDA gains that we're delivering quarter-over-quarter for you, that in parallel with driving the best projects into our sanction buckets, the best build multiples obviously create the best amount of cash flow. And look, if we have such growth in that 29, 30, 31 window that there is a funding gap, we've got a couple of levers that we can pull, right? Obviously, from a -- whether it be capital rotation or any other kind of capital market. But what we are -- we have 2 or 3 years to solve for, how tall does that growth capital go, how many years before the Bruce cash flow kicks in? And then ultimately, what is the lowest cost of capital the year before on a dollar per share basis. That's the framework. And I think, like I said, over the next year or 2 as we really see what '29 and '30 are going to look like, that's the amount of time we have to solve for that least cost, best dollar per share funding solution.

The next question will come from Jeremy Tonet with JPMorgan.

Just wanted to come back to Canada -- Canadian growth opportunities, if I could. It seems like there's a lot of opportunities as you outlined here. But just wondering if you could walk us through how it competes for capital, a lot of attractive opportunities in the U.S. The economics seem a bit better than what has been achieved in Canada historically. I just wondering the scope, the potential for improvements on either ROE, equity layer or otherwise, so that would attract your capital into Canada versus the U.S. as far as future growth projects are concerned.

Thanks, Jeremy. Look, we're in the middle of these conversations with our shippers. We're doing a lot of listening. So I don't want to front-run any discussions we're having with them. What I will say is that it is a lower risk supportive regulatory framework in Canada than we have in the U.S. in terms of protections around capital cost of debt, billing determinants, et cetera. And we also know that if we want higher returns, we're going to have to earn it. So we're working with our customers to talk through ways like through ancillary services or any cost savings that we're able to materialize can be shared to create a win-win. What's important here is to keep our focus on delivering to our customers what they need, which is growth intra-basin and growth to export points. And I do want and prefer to see some balance in our capital allocation from a geographic basis. It's not simply where does the highest IRR project discretely come from. You want some portfolio diversification for economic diversification from economies, from regulatory regimes, from policy environments. So we do keep that balance in mind in addition to the specific return of specific projects. So all those things go into the discussion, and we're doing a lot of listening right now.

Understood. Appreciate the thoughts. And continuing on the lines of geographic diversification. I was wondering if we could go south 2 borders. And any thoughts you could share with regards to the strategy in Mexico going forward as far as the amount of exposure you want to have in the country, growth opportunities there and whether any type of Mexican monetization in the future still makes sense.

Jeremy, it's Sean. I'll take that one. Look, I think part of what we're seeing in the Mexico portfolio, candidly, not dissimilar to what we're seeing in the U.S. at this point, major trunk lines all built. We're seeing CFE in the last 2 years bring more generation online than they arguably have in over a decade. There's 10 gigawatts of gas-fired gen. I think 5 are commissioned already, more pending this year, 3 gigawatts on our system. So as we've been talking about, that gas-fired -- largely gas-fired power market is growing into the pipeline capacity that we have built for it, we and others. So I think you just have that maturation cycle right now on gen growing into the pipe, but you're certainly seeing capital market and other kind of investors and strategics entering the space. So we like exactly what we have. We're not seeing any other materially large kind of investments being required anytime soon, but certainly kind of growing into the portfolio. So I'll kind of leave it at that because it's operating exactly as designed and exactly as we've kind of included in guidance in our outlook.

The next question will come from Rob Hope with Scotia Bank.

So it's good to see another increase in the pending approval backlog as well as the increase in the origination that you noted in the prepared remarks. You also did comment that the timing of FIDs is dynamic. Can you speak to how these projects are marching towards FID decisions just given the fact that we are seeing a number of kind of changing dynamics out there in the market and potentially some upside in these projects. So how are these projects kind of working through the funnel? And is the target still to have $8 billion of projects sanctioned this year?

Rob, it's Francois. I'll take that, and I'll maybe take the back half of that question first. We typically sanction $3 billion to $4 billion a year of new projects. And we're halfway through the year, and we're already at the bottom end of that range. when you throw in the potential and our expectation of sanctioning Crossroads in the fourth quarter, which will be a sizable project on its own, plus some of the other irons we have in the fire in the U.S. and in Canada, there's a very good chance that we're going to be in that $6 billion to $8 billion of sanctioned capital for 2026, which would be a great outcome and achieve our stretch goals. With respect to the first part of your question... I'm sorry.

Yes, I'll take that first part. I think your question was related to what's required to get to sanctioning. And you think of the projects in origination, we talked already about Canada and some of the demand growth we're seeing there. In the U.S., we have under origination, as we've talked about before, about $14 billion of capital, 10 to 11 Bcf of capacity centered around power generation, data center demand, coal-to-gas conversions, et cetera. And we go through a rigorous process to sanction our projects, detailed conversations with our customers, ensuring we drive the highest value for our shareholders. The Crossroads expansion is next up, I believe, for sanctioning. We did talk today about our Central Virginia capacity project and our Clark project, which are important projects for us on our Columbia Gas and our Columbia Gulf systems. We are looking forward to developing more of those across the next couple of quarters and go through our process with discipline before we announce the projects.

Yes. Sorry about that, Rob, in answering the second part of the question, I lost the thread on the first part, so Tina helped me out there.

Not a problem. And then just maybe as a follow-up, like we're seeing across the industry, everyone's growth expectations tilt higher. Can you maybe just provide kind of your views on supply chain contractor availability and just the status of the market, could we be entering into a bit more of a constrained supply chain?