Execution of strategy and growth delivered record
operational and financial results in 2016
All financial
figures are in Canadian dollars unless noted otherwise.
CALGARY, Alberta, Feb. 23, 2017 /PRNewswire/ -- Pembina Pipeline
Corporation ("Pembina" or the "Company") (TSX: PPL; NYSE: PBA)
announced today its financial and operating results for the fourth
quarter of 2016.
Financial Overview
|
|
|
($ millions,
except where noted)
|
3
Months Ended
December 31
(unaudited)
|
12 Months Ended
December 31
|
|
2016
|
2015
|
2016
|
2015
|
Conventional
Pipelines revenue volumes (mbpd)(1)(2)
|
639
|
621
|
650
|
614
|
Oil Sands & Heavy
Oil contracted capacity (mbpd)(1)
|
975
|
880
|
975
|
880
|
Gas Services revenue
volumes net to Pembina (mboe/d)(2)(3)
|
163
|
103
|
139
|
110
|
Midstream Natural Gas
Liquids ("NGL") sales volumes
(mbpd)(1)
|
164
|
123
|
143
|
116
|
Total volume
(mboe/d)(3)
|
1,941
|
1,727
|
1,907
|
1,720
|
Revenue
|
1,251
|
1,242
|
4,265
|
4,635
|
Net
revenue(4)
|
514
|
407
|
1,764
|
1,507
|
Operating
margin(4)
|
376
|
304
|
1,335
|
1,118
|
Gross
profit
|
270
|
237
|
1,001
|
866
|
Earnings
|
131
|
130
|
466
|
406
|
Earnings per common
share – basic (dollars)
|
0.29
|
0.32
|
1.02
|
1.02
|
Earnings per common
share – diluted (dollars)
|
0.28
|
0.32
|
1.01
|
1.02
|
Adjusted
EBITDA(4)
|
342
|
269
|
1,189
|
983
|
Cash flow from
operating activities
|
286
|
285
|
1,077
|
801
|
Cash flow from
operating activities per common share – basic
(dollars)(4)
|
0.73
|
0.79
|
2.78
|
2.31
|
Adjusted cash flow
from operating activities(4)
|
292
|
280
|
986
|
878
|
Adjusted cash flow
from operating activities per common share – basic
(dollars)(4)
|
0.74
|
0.77
|
2.54
|
2.53
|
Common share
dividends declared
|
190
|
168
|
737
|
628
|
Preferred share
dividends declared
|
19
|
13
|
69
|
48
|
Dividends per common
share (dollars)
|
0.48
|
0.46
|
1.90
|
1.80
|
Capital
expenditures
|
453
|
448
|
1,745
|
1,811
|
Acquisition
|
|
566
|
|
|
|
|
|
|
|
|
|
|
|
3 Months Ended
December 31 (unaudited)
|
12 Months
Ended
December 31
|
|
2016
|
2015
|
2016
|
2015
|
($
millions)
|
Revenue(5)
|
Operating
Margin(4)
|
Revenue(5)
|
Operating
Margin(4)
|
Revenue(5)
|
Operating Margin(4)
|
Revenue(5)
|
Operating
Margin(4)
|
Conventional
Pipelines
|
184
|
118
|
163
|
109
|
719
|
494
|
628
|
401
|
Oil Sands & Heavy
Oil
|
54
|
37
|
56
|
36
|
202
|
140
|
213
|
139
|
Gas
Services(5)
|
82
|
60
|
51
|
33
|
271
|
195
|
208
|
144
|
Midstream(5)
|
194
|
158
|
137
|
123
|
572
|
496
|
458
|
427
|
Corporate
|
|
3
|
|
3
|
|
10
|
|
7
|
Total
|
514
|
376
|
407
|
304
|
1,764
|
1,335
|
1,507
|
1,118
|
|
|
(1)
|
mbpd is thousands of
barrels per day.
|
(2)
|
Revenue volumes are
equal to contracted plus interruptible volumes.
|
(3)
|
Revenue volumes
converted to mboe/d (thousands of barrels of oil equivalent per
day) from million cubic feet per day ("MMcf/d") at 6:1
ratio.
|
(4)
|
Refer to "Non-GAAP
Measures."
|
(5)
|
The amounts presented
for Midstream and Gas Services consist of net revenue (revenue less
cost of goods sold including product purchases). Refer to "Non-GAAP
Measures."
|
Highlights
- Generated earnings of $466
million in 2016, a 15 percent increase over the prior
year;
- Adjusted EBITDA was $1,189
million during 2016, 21 percent higher than 2015;
- Cash flow from operating activities was $1,077 million for 2016 compared to $801 million for 2015, an increase of 34 percent
on an annual basis. Adjusted cash flow from operating activities
increased by 12 percent to $986
million in 2016 compared to 2015;
- On a per share (basic) basis, cash flow from operating
activities increased 20 percent compared to the prior year;
- Gas Services generated record quarterly and annual revenue
volumes of 976 MMcf/d and 836 MMcf/d, respectively, in 2016,
representing a quarterly increase of 61 percent and an annual
increase of 27 percent;
- Fourth quarter NGL sales volumes reached a record 164 mboe/d, a
33 percent increase compared to the respective period in 2015. For
the full year, NGL sales volumes were a record 143 mboe/d, a 23
percent increase compared to 2015;
- Conventional Pipelines' fourth quarter revenue volumes
increased to 639 mbpd in 2016 compared to 621 mbpd in the fourth
quarter of 2015. For the full year, Conventional Pipelines' revenue
volumes were 650 mbpd compared to 614 mbpd in 2015; and
- In 2016, Pembina added over 400 MMcf/d of additional processing
capacity in its Gas Services business, increasing its total
capacity to approximately 1.7 billion cubic feet per day. This was
accomplished through the acquisition of the Kakwa River facility
and expansions of the Company's Resthaven and Musreau
facilities.
"2016 was a very successful year; I was encouraged to see such
strong results amidst the uncertainty that surrounded the oil and
gas industry for the majority of the year," said Mick Dilger, Pembina's President and Chief
Executive Officer. "Our people worked hard to bring in record
operational and financial results during the year, while running
our existing businesses safely and responsibly and executing on our
significant capital program. Across the board, our many
achievements in 2016 are evidence of the merits of sticking to our
long-term strategy."
Mr. Dilger added: "I'm very excited for what's sure to be a
transformational 2017. We are about to bring into service the
largest suite of growth projects in our history. Completion of
these projects, along with approximately $1.7 billion of major projects we brought into
service throughout 2016, including our Kakwa River facility
acquisition, lends confidence in our ability to continue generating
long-term and sustainable returns for our shareholders. As we focus
on on-time and on-budget delivery of our existing capital program,
we are also positioning our company for future opportunities as
evidenced by our recent announcement of our Duvernay infrastructure development and
service agreement."
New Developments in 2016 and Growth Projects Update
- Pembina's $2.4 billion Phase III
Expansion is over 60 percent complete and construction continues on
the largest section of the project between Fox Creek, Alberta and Namao, Alberta. The project continues to track
under budget and on-schedule for a mid-2017 in-service date;
- Development continues on Gas Services' Duvernay infrastructure program. Engineering
is 85 percent complete, as are all site grading and piling
activities, for its 100 MMcf/d Duvernay I plant. The Field Hub has
received all required regulatory and environmental approvals and
engineering is 55 percent complete;
- Overall construction of the Company's third fractionator at
Redwater ("RFS III") is 90 percent
complete. The project, which continues to trend on-budget, is
expected to be completed early in the third quarter of 2017;
- Pembina continues to advance construction of infrastructure in
support of North West Redwater Partnership's planned refinery and
has completed 70 percent of the overall project;
- At Pembina's Canadian Diluent Hub ("CDH"), pipeline
connectivity is complete between Pembina's Conventional Pipelines'
infrastructure and existing third-party diluent pipeline
connectivity at the Company's Redwater site and volumes are flowing to
third-party delivery connections. Additionally, 90 percent of civil
work associated with CDH is complete; and
- Pembina's proposed propane dehydrogenation and polypropylene
facility ("PDH/PP Facility") was conditionally awarded $300 million in royalty credits from the Alberta
Government's Petrochemicals Diversification Program. If the project
proceeds, Pembina expects to construct the PDH/PP Facility in close
proximity to the Company's Redwater Fractionation complex.
Fourth Quarter Dividends
- Declared and paid dividends of $0.16 per qualifying common share in October,
November and December 2016 for the
applicable record dates; and
- Declared and paid quarterly dividends per qualifying preferred
shares of: Series 1: $0.265625;
Series 3: $0.29375; Series 5:
$0.3125; Series 7: $0.28125; Series 9: $0.296875; Series 11: $0.359375; and Series 13: $0.359375 to shareholders on record as of
November 1, 2016.
Fourth Quarter 2016 Conference Call & Webcast
Pembina will host a conference call on Friday, February 24, 2017 at 8:00 a.m. MT (10:00 a.m.
ET) for interested investors, analysts, brokers and media
representatives to discuss details related to the fourth quarter of
2016. The conference call dial-in numbers for Canada and the U.S. are 647-427-7450 or
888-231-8191. A recording of the conference call will be available
for replay until March 3, 2017 at
11:59 p.m. ET. To access the replay,
please dial either 416-849-0833 or 855-859-2056 and enter the
password 15403233.
A live webcast of the conference call can be accessed on
Pembina's website at pembina.com under Investor Centre,
Presentation & Events, or by entering:
http://event.on24.com/r.htm?e=1307546&s=1&k=839F0601C7C0EB2364CB25344DAD8B85
in your web browser. Shortly after the call, an audio archive will
be posted on the website for a minimum of 90 days.
2017 Investor Day
Pembina will hold an Investor Day on Tuesday, May 16, 2017 at One King West Hotel in
Toronto, Ontario. For parties
interested in attending the event, please email
investor-relations@pembina.com to request an invitation.
About Pembina
Calgary-based Pembina Pipeline
Corporation is a leading transportation and midstream service
provider that has been serving North
America's energy industry for over 60 years. Pembina owns
and operates an integrated system of pipelines that transport
various products derived from natural gas and hydrocarbon liquids
produced primarily in western Canada. The Company also owns and operates gas
gathering and processing facilities and an oil and natural gas
liquids infrastructure and logistics business. Pembina's integrated
assets and commercial operations along the majority of the
hydrocarbon value chain allow it to offer a full spectrum of
midstream and marketing services to the energy sector. Pembina is
committed to working with its community and aboriginal neighbours,
while providing value for investors in a safe, environmentally
responsible manner. This balanced approach to operating ensures the
trust Pembina builds among all of its stakeholders is sustainable
over the long term. Pembina's common shares trade on the
Toronto and New York stock exchanges under PPL and PBA,
respectively. Pembina's preferred shares also trade on the
Toronto stock exchange. For more
information, visit www.pembina.com.
Forward-Looking Statements and Information
This document contains certain forward-looking statements and
information (collectively, "forward-looking statements"), including
forward-looking statements within the meaning of the "safe harbor"
provisions of applicable securities legislation, that are based on
Pembina's current expectations, estimates, projections and
assumptions in light of its experience and its perception of
historical trends. In some cases, forward-looking statements can be
identified by terminology such as "schedule", "will", "expects",
"future", "continue" and similar expressions suggesting future
events or future performance.
In particular, this document contains forward-looking
statements pertaining to, without limitation, the following:
Pembina's corporate strategy; planning, construction, capital
expenditure estimates, schedules, expected capacity, incremental
volumes, in-service dates, rights, activities and operations with
respect to planned new construction of, or expansions on existing
pipelines, gas services facilities, fractionation facilities,
terminalling, storage and hub facilities, facility and system
operations and throughput levels; anticipated synergies between
assets under development and existing assets of the Company; the
future level and sustainability of cash dividends that Pembina
intends to pay its shareholders; and expected future cash flows and
the sufficiency thereof.
The forward-looking statements are based on certain
assumptions that Pembina has made in respect thereof as at the date
of this news release regarding, among other things: oil and gas
industry exploration and development activity levels and the
geographic region of such activity; the success of Pembina's
operations and growth projects; prevailing commodity prices and
exchange rates and the ability of Pembina to maintain current
credit ratings; the availability of capital to fund future capital
requirements relating to existing assets and projects; future
operating costs; geotechnical and integrity costs; that any
third-party projects relating to Pembina's growth projects will be
sanctioned and completed as expected; that any required commercial
agreements can be reached; that all required regulatory and
environmental approvals can be obtained on the necessary terms in a
timely manner; that counterparties will comply with contracts in a
timely manner; that there are no unforeseen events preventing the
performance of contracts or the completion of the relevant
facilities; that there are no unforeseen material costs relating to
the facilities which are not recoverable from customers; prevailing
interest and tax rates; prevailing regulatory, tax and
environmental laws and regulations; maintenance of operating
margins; the amount of future liabilities relating to lawsuits and
environmental incidents; and the availability of coverage under
Pembina's insurance policies (including in respect of Pembina's
business interruption insurance policy).
Although Pembina believes the expectations and material
factors and assumptions reflected in these forward-looking
statements are reasonable as of the date hereof, there can be no
assurance that these expectations, factors and assumptions will
prove to be correct. These forward-looking statements are not
guarantees of future performance and are subject to a number of
known and unknown risks and uncertainties including, but not
limited to: the regulatory environment and decisions; the impact of
competitive entities and pricing; labour and material shortages;
reliance on key relationships and agreements; the strength and
operations of the oil and natural gas production industry and
related commodity prices; non-performance or default by
counterparties to agreements which Pembina or one or more of its
affiliates has entered into in respect of its business; actions by
governmental or regulatory authorities including changes in tax
laws and treatment, changes in royalty rates or increased
environmental regulation; fluctuations in operating results;
adverse general economic and market conditions in Canada, North
America and worldwide, including changes, or prolonged
weaknesses, as applicable, in interest rates, foreign currency
exchange rates, commodity prices, supply/demand trends and overall
industry activity levels; ability to access various sources of debt
and equity capital; changes in credit ratings; counterparty credit
risk; technology and security risks; and certain other risks
detailed from time to time in Pembina's public disclosure documents
available at www.sedar.com, www.sec.gov and through Pembina's
website at www.pembina.com.
This list of risk factors should not be construed as
exhaustive. Readers are cautioned that events or circumstances
could cause results to differ materially from those predicted,
forecasted or projected. The forward-looking statements contained
in this document speak only as of the date of this document.
Pembina does not undertake any obligation to publicly update or
revise any forward-looking statements or information contained
herein, except as required by applicable laws. The forward-looking
statements contained in this document are expressly qualified by
this cautionary statement.
Non-GAAP Measures
In this news release, Pembina has used the terms net revenue,
operating margin, adjusted earnings before interest, taxes,
depreciation and amortization (Adjusted EBITDA), adjusted cash flow
from operating activities, cash flow from operating activities per
common share and adjusted cash flow from operating activities per
common share (also known as "cash flow per share" and "adjusted
cash flow per share"), which do not have any standardized meaning
under IFRS ("Non-GAAP Measures"). Since Non-GAAP financial measures
do not have a standardized meaning prescribed by GAAP and are
therefore unlikely to be comparable to similar measures presented
by other companies, securities regulations require that Non-GAAP
financial measures are clearly defined, qualified and reconciled to
their nearest GAAP measure. Except as otherwise indicated, these
Non-GAAP measures are calculated and disclosed on a consistent
basis from period to period. Specific adjusting items may only be
relevant in certain periods. The intent of Non-GAAP measures is to
provide additional useful information respecting Pembina's
financial and operational performance to investors and analysts and
the measures do not have any standardized meaning under IFRS. The
measures should not, therefore, be considered in isolation or used
in substitute for measures of performance prepared in accordance
with IFRS.
Other issuers may calculate these Non-GAAP measures
differently. Investors should be cautioned that these measures
should not be construed as alternatives to revenue, earnings, cash
flow from operating activities, gross profit or other measures of
financial results determined in accordance with GAAP as an
indicator of Pembina's performance. For additional information
regarding Non-GAAP measures, including reconciliations to measures
recognized by GAAP, please refer to Pembina's management's
discussion and analysis for the period ended December 31, 2016, which is available online at
www.sedar.com, www.sec.gov and through Pembina's website at
www.pembina.com.
For further information: Investor Relations, Scott Burrows, Vice President, Finance &
Chief Financial Officer, (403) 231-3156, 1-855-880-7404, E-mail:
investor-relations@pembina.com, www.pembina.com