Delivering growth and strong financial performance with
continued success in capital program execution
All financial figures are in Canadian dollars unless noted
otherwise.
CALGARY, Alberta, Nov. 3, 2016 /PRNewswire/ -- Pembina Pipeline
Corporation ("Pembina" or the "Company") (TSX: PPL; NYSE: PBA)
announced today its financial and operating results for the third
quarter of 2016.
Financial Overview
|
|
|
($ millions,
except where noted)
|
3 Months Ended
September 30 (unaudited)
|
9 Months Ended
September 30 (unaudited)
|
|
2016
|
2015
|
2016
|
2015
|
Conventional
Pipelines revenue volumes (mbpd)(1)(2)
|
643
|
600
|
654
|
612
|
Oil Sands & Heavy
Oil contracted capacity (mbpd)(1)
|
975
|
880
|
975
|
880
|
Gas Services revenue
volumes (mboe/d) net to Pembina(2)(3)
|
149
|
115
|
131
|
112
|
Midstream Natural Gas
Liquids ("NGL") sales volumes
(mbpd)(1)
|
136
|
109
|
136
|
114
|
Total volume
(mboe/d)(3)
|
1,903
|
1,704
|
1,896
|
1,718
|
Revenue
|
970
|
1,026
|
3,014
|
3,393
|
Net
revenue(4)
|
427
|
374
|
1,250
|
1,100
|
Operating
margin(4)
|
317
|
271
|
959
|
814
|
Gross
profit
|
246
|
201
|
731
|
629
|
Earnings
|
120
|
113
|
335
|
276
|
Earnings per common
share – basic and diluted (dollars)
|
0.25
|
0.29
|
0.73
|
0.70
|
Adjusted
EBITDA(4)
|
287
|
245
|
847
|
714
|
Cash flow from
operating activities
|
247
|
187
|
791
|
516
|
Cash flow from
operating activities per common share – basic
(dollars)(4)
|
0.63
|
0.54
|
2.05
|
1.51
|
Adjusted cash flow
from operating activities(4)
|
250
|
209
|
694
|
598
|
Adjusted cash flow
from operating activities per common share – basic
(dollars)(4)
|
0.64
|
0.60
|
1.80
|
1.75
|
Common share
dividends declared
|
188
|
158
|
547
|
460
|
Preferred share
dividends declared
|
20
|
14
|
50
|
35
|
Dividends per common
share (dollars)
|
0.48
|
0.46
|
1.42
|
1.34
|
Capital
expenditures
|
537
|
478
|
1,292
|
1,363
|
Acquisition
|
|
|
566
|
|
|
|
|
|
3 Months Ended
September 30 (unaudited)
|
9 Months Ended
September 30 (unaudited)
|
|
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
|
183
|
121
|
159
|
92
|
535
|
376
|
465
|
292
|
Oil Sands & Heavy
Oil
|
49
|
36
|
52
|
33
|
148
|
103
|
157
|
103
|
Gas
Services
|
72
|
52
|
54
|
39
|
189
|
135
|
157
|
111
|
Midstream(5)
|
122
|
106
|
109
|
105
|
378
|
338
|
321
|
304
|
Corporate
|
1
|
2
|
|
2
|
|
7
|
|
4
|
Total
|
427
|
317
|
374
|
271
|
1,250
|
959
|
1,100
|
814
|
(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 consist of net revenue (revenue less cost of goods
sold including product purchases). Refer to "Non-GAAP
Measures."
|
Highlights
- Generated third quarter and year-to-date earnings of
$120 million and $335 million, a six and 21 percent increase,
respectively, over the same periods of the prior year;
- Adjusted EBITDA was $287 million
in the third quarter and $847 million
year-to-date, 17 percent and 19 percent higher than the third
quarter and first nine months of 2015;
- Cash flow from operating activities increased by 32 percent and
53 percent to $247 million and
$791 million while adjusted cash flow
from operating activities increased by 20 percent and 16 percent to
$250 million and $694 million compared to the third quarter and
first nine months of 2015;
- On a per share (basic) basis during the three and nine months
ended September 30, 2016, cash flow
from operating activities increased 17 percent and 36 percent,
respectively, and adjusted cash flow from operating activities
increased seven percent and three percent, respectively, compared
to the same periods of the prior year;
- Completed previously announced expansions of both the Vantage
and Horizon pipeline systems under-budget; and
- Raised $500 million of gross
proceeds through the issuance of senior unsecured Series 7
medium-term notes.
"I'm pleased with our quarterly results during a time in which
we are undertaking an unprecedented volume of construction
activities at Pembina," said Mick
Dilger, Pembina's President and Chief Executive Officer. "We
continue to experience success in executing our large capital
program while maintaining our focus on safe and reliable
operations. With a strong balance sheet in hand, we are
well-positioned to complete the remainder of our secured growth
portfolio and enhance long-term shareholder value."
New Developments in 2016 and Growth Projects Update
- Pembina's $2.4 billion Phase III
Expansion is now approximately 50 percent complete and construction
is underway on the largest section of the project between
Fox Creek, Alberta and
Namao, Alberta;
- Secured regulatory approval for Pembina's 100 MMcf/d Duvernay I
facility and progressed development of the supporting
infrastructure;
- Construction activity at the Company's third fractionator ("RFS
III") is ongoing, with mechanical construction 75 percent
complete;
- Progressed development of terminalling infrastructure at
Pembina's Redwater site in support
of North West Redwater Partnership's planned refinery;
- Completed 70 percent of civil work associated with Pembina's
Canadian Diluent Hub and advanced development of further
interconnectivity between Pembina's existing Conventional and
Midstream infrastructure; and
- Pembina and Petrochemical Industries Company K.S.C. ("PIC"), a
subsidiary of the Kuwait Petroleum Corporation, have completed
their detailed technical, financial and commercial study regarding
the development of a combined propane dehydrogenation ("PDH") and
polypropylene ("PP") upgrading facility in Alberta (the "PDH and PP Facility"). Pembina
and PIC are jointly evaluating the study findings and expect to
make a decision on proceeding to Front End Engineering Design by
the end of 2016.
Dividends
- Declared and paid dividends of $0.16 per qualifying common share in July, August
and September 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: $0.5002 to shareholders on record as of
August 1, 2016.
Third Quarter 2016 Conference Call & Webcast
Pembina will host a conference call on Friday, November 4,
2016 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 third 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 November 11, 2016 at
11:59 p.m. ET. To access the replay,
please dial either 416-849-0833 or 855-859-2056 and enter the
password 92805628.
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=1102324&s=1&k=B668FDE0C802236008BA502A98896DE9
in your web browser. Shortly after the call, an audio archive will
be posted on the website for a minimum of 90 days.
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" 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; and anticipated synergies between
acquired assets, assets under development and existing assets of
the Company.
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; interest
and tax rates; prevailing regulatory, tax and environmental laws
and regulations; maintenance of operating margins; the amount of
future liabilities relating to 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") and total enterprise value, 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 the 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 September 30,
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