So yes, that’s exactly what we want to be able to do. And again, we see it on the liquid side as well. We’ve redeployed a lot of capital into the Gulf Coast, where we weren’t. And at the same time, now we’ve got egress opportunities, which I’m not sure many people were seeing 2 years ago. But once again, the good old mainline in Western Canadian Sedimentary Basin is proving a robust area. And then yes, of course, on the gas transmission side, whether it’s on the on the LNG side. A lot of our capital, I would say, has moved south in the last few years. Eventually, the Northeast is going to have to do something, and that will create opportunities, too. So — and obviously, around The Great Lakes, I mean, it is the benefit of portfolio. Not all jurisdictions are going to be the most attractive at the time.
But when you’ve got assets in 43 states and provinces in 5 countries, you can make those capital allocation decisions with great discipline.
Operator: Your next question comes from the line of Robert Kwan from RBC Capital Markets.
Robert Kwan: If I can just start on the Dominion funding side of things. And you made a comment that you expect to exit the deal funded well within the 4.5x to 5x. I’m just wondering if you can square that out. I think at the outset of the deal, you were targeting being at the midpoint or even in the lower half of the range and just in achieving whatever the target is now — do you think you can do that within the levers that avoids the usage of the ATM?
Pat Murray: Well, I think, Robert, as Greg said, we’ll look at all the levers that we have to complete what is really just about 10%, 15% of the overall funding for that acquisition. — really the goal behind getting some of that — or a big chunk of that financing done early on in the process was allow us as much flexibility as we have to kind of do what we need to do throughout 2024 to close off the rest of the funding. So I think we’re really comfortable that we can fund this in a way that maintains us well within that 4.5x to 5x. And that’s how we’ll move forward on the funding.
Robert Kwan: Okay. As you — also just on finishing on capital allocation and just your approach to thinking about your payout. When you look at your earnings profile and you’ve really focused more on DCF payout versus earnings payout. So just what are the accounting measures that differ sustainably over the long term versus your view of the true economics underlying your assets? And specifically, you’ve got about $1 billion of maintenance CapEx. How much of that is coming from your gas distribution segment?
Pat Murray: So I think about half of the current maintenance capital is coming from the distribution [indiscernible] bit as we acquire these three utilities in the U.S. as we go around. I think if you’re asking kind of what the difference between EPS and DCF is, it really is that primarily that difference between depreciation and what we would call maintenance capital. But I think the important thing to know about with our assets, of course, is that if you maintain your assets appropriately like we believe we do, their life is almost not ending. And so as a result, you can utilize these assets for a very long period of time. So when we look at our payout, what we’re really looking at is that cash flow generation and how sustainable that is and therefore, make kind of dividend increase decisions based on it.
That’s why we’ve been guiding for a number of years now that we’re going to grow that dividend in line with how we grow cash flow. So I think cash is king in our mind within this business. And so we make sure that, that’s sustainable and then we make our dividend recommendations based on that. And our plan would be to continue to grow the dividend in line with cash flows.
Operator: Your next question from the line of Praneeth Satish from Wells Fargo.
Praneeth Satish: So as it relates to the funding for the LDC acquisition, you mentioned the levers that you have. But I mean it looks like Q1 was incrementally strong. So is there a scenario here where you generate more EBITDA than expected this year and therefore get to where you need to be from a leverage perspective and avoid having to sell more assets or ATM issuance? Or is it too early to think that? Just trying to think through the dynamics there. .
Greg Ebel: Yes, I think it’s a little early. I think what we’re really trying to release is making sure we’ve got that maximum flexibility. Again, we haven’t come to conclusions where you’re right, very strong quarter. As you know, we’ve got some seasonality in our year in the first quarter and the fourth quarter are always much stronger. I think what we’ll do is, as Pat mentioned in his early commentary, I believe, that as we get the assets in the door here, and I expect you’ll see this as we announce second quarter, give you a good outlook for the full economics of the transaction, if you will, and what the full year will look like on a fully loaded basis. So I think that will give you a good view at this time. Yes, I mean, look, we came into the year stronger and finished stronger than we thought.
We’ve started the first quarter stronger than a lot of people were looking for, and we felt we would have a strong start. And I believe we’ve been able to execute both on the funding to date and getting these assets in the house much quicker than we thought. From an energy fundamentals perspective, I’ve mentioned some of the things going on in the gas side. I mean I think you got to give it to us that the LP team have been bang on their expectations of what would happen with volumes and stuff, and we’re nailing those. So yes, optimistic start to the year, but we’ll come back and talk to you in August exactly how the full year will look.
Praneeth Satish: That’s very helpful. And then on Gray Oak, so you could see the open season started there. Do you think producers though are waiting to see the outcome of some of these potential offshore VLCC docs like spot before committing more barrels to Corpus? And then, I guess, just broadly, how do you think about the risks to your corporate footprint if one of those offshore projects get sanctioned maybe how much of your volume flowing into Ingleside is backed by take-or-pay contracts?
