Strong results driven by increased revenue volumes and
solid operations
All financial figures are in Canadian dollars unless noted
otherwise.
CALGARY, Alberta, May 5, 2016 /PRNewswire/ - Pembina Pipeline
Corporation ("Pembina" or the
"Company") (TSX: PPL; NYSE: PBA) announced today its financial and
operating results for the first quarter of 2016.
Financial Overview
|
|
|
($ millions, except where
noted)
|
|
3 Months Ended March 31 (unaudited)
|
|
|
2016
|
2015
|
Conventional Pipelines revenue volumes
(mbpd)(1)(2)
|
|
670
|
633
|
Oil Sands & Heavy Oil contracted capacity
(mbpd)(1)
|
|
880
|
880
|
Gas Services average revenue volumes (mboe/d)
net to Pembina(2)(3)
|
|
113
|
113
|
Midstream Natural Gas Liquids ("NGL") sales volumes
(mbpd)(1)
|
|
141
|
129
|
Total volume (mboe/d)
|
|
1,804
|
1,755
|
Revenue
|
|
1,017
|
1,154
|
Net revenue(4)
|
|
394
|
375
|
Operating margin(4)
|
|
315
|
284
|
Gross profit
|
|
237
|
228
|
Earnings
|
|
102
|
120
|
Earnings per common share – basic and diluted
(dollars)
|
|
0.23
|
0.32
|
Adjusted EBITDA(4)
|
|
269
|
241
|
Cash flow from operating activities
|
|
271
|
120
|
Cash flow from operating activities per common share
– basic (dollars)(4)
|
|
0.72
|
0.35
|
Adjusted cash flow from operating
activities(4)
|
|
209
|
213
|
Adjusted cash flow from operating activities per
common share – basic
(dollars)(4)
|
|
0.56
|
0.63
|
Common share dividends declared
|
|
172
|
148
|
Preferred share dividends declared
|
|
14
|
10
|
Dividends per common share
(dollars)
|
|
0.46
|
0.44
|
Capital expenditures
|
|
375
|
498
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Months Ended March 31 (unaudited)
|
|
|
|
|
|
|
|
2016
|
2015
|
($ millions)
|
|
|
|
|
|
|
Net Revenue(4)
|
Operating Margin(4)
|
Net Revenue(4)
|
Operating Margin(4)
|
Conventional Pipelines
|
|
|
|
|
|
|
175
|
128
|
154
|
98
|
Oil Sands & Heavy Oil
|
|
|
|
|
|
|
52
|
33
|
55
|
35
|
Gas Services
|
|
|
|
|
|
|
53
|
37
|
54
|
37
|
Midstream
|
|
|
|
|
|
|
114
|
114
|
113
|
113
|
Corporate
|
|
|
|
|
|
|
|
3
|
(1)
|
1
|
Total
|
|
|
|
|
|
|
394
|
315
|
375
|
284
|
(1)
|
mbpd is thousands of barrels per
day.
|
(2)
|
Revenue volumes are equal to contracted plus
interruptible volumes.
|
(3)
|
Average 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."
|
Highlights
- Realized record revenue volumes for the second consecutive
quarter; Conventional Pipelines also reached record volumes with an
average of 670 mbpd;
- Safely placed over $740 million
assets into service, including $226
million in the first quarter of 2016 and an estimated
$515 million subsequent to quarter
end relating to RFS II, Musreau III and the Resthaven Expansion (as
defined below);
- Achieved Adjusted EBITDA of $269
million, 12 percent or $28
million higher than the first quarter of 2015;
- Cash flow from operating activities increased by 126 percent to
$271 million ($0.72 per common share-basic) as compared to the
first quarter of 2015;
- Closed a $566 million (including
closing adjustments) acquisition of a 250 MMcf/d gas processing
plant and associated midstream infrastructure from Paramount
Resources subsequent to quarter end;
- Received regulatory and environmental approval for the 270
kilometre, 24 and 16 inch Fox
Creek to Namao, Alberta
pipeline portion of Pembina's
Phase III Expansion;
- Increased the monthly dividend by 4.9 percent from $0.1525 per common share per month (or
$1.83 annually) to $0.16 per common share per month (or $1.92 annually), effective for the dividend
payable on May 13, 2016;
- Raised $765 million including
$170 million through a preferred
share issuance, $345 million through
a common share issuance and, subsequent to quarter end, an
additional $250 million through a
preferred share issuance; and
- Increased Pembina's unsecured
revolving credit facility from $2
billion to $2.5 billion.
"I'm pleased to report that Pembina has started the year off well by
delivering another solid quarter including achieving record revenue
volumes across our business," commented Scott Burrows, Pembina's Vice President Finance and Chief
Financial Officer. "Additionally, we have increased our dividend by
4.9 percent – which is now the fifth consecutive year that we've
increased the dividend and further demonstrates our proven track
record and commitment to growing shareholder value."
"Pembina has had a very busy
and exciting start to 2016," said Mick
Dilger, Pembina's President
and Chief Executive Officer. "So far this year, we've successfully
executed on our capital program by bringing into service
approximately $740 million of assets.
We've also acquired over $560 million
in new gas processing assets that are strategically integrated with
our existing asset base in one of our core operating areas and that
serve some of the most economic geology in North America. These assets substantially
increase our service offering through the addition of sour gas
processing and will also provide a platform of future growth
opportunities for our company."
"On another exciting note, I am pleased with our recent
announcement regarding entering into a joint feasibility study with
Petrochemical Industries Company K.S.C., for the evaluation of a
world-scale combined propane dehydrogenation and polypropylene
upgrading facility in Alberta.
Building this value-added facility would not only help provide a
much-needed local propane demand for our customers, it would also
benefit Alberta by providing
additional economic activity and tax base. I look forward to the
coming months as we undertake a detailed technical, financial and
commercial study to confirm this opportunity aligns with our
investment criteria."
New Developments in 2016 and Growth Projects Update
- Announced that Pembina entered
into a joint feasibility study with the Petrochemical Industries
Company K.S.C. ("PIC"), a subsidiary of the Kuwait Petroleum
Corporation, for the evaluation of a world-scale combined propane
dehydrogenation and polypropylene upgrading facility in
Alberta (the "PDH and PP
Facility"). The proposed PDH and PP Facility represents an
opportunity to develop crucial new market demand for propane in the
Province of Alberta, benefitting
Alberta's oil and gas producers,
as well as the Province. The final investment decision is expected
to be made by the middle of 2017;
- Commissioned the second ethane-plus fractionator at
Pembina's Redwater site ("RFS II") on April 1, 2016. RFS II was completed on budget and
one quarter later than originally expected. With RFS II in service,
Pembina's Redwater fractionation capacity has more than
doubled with over 146 mbpd of fractionation capacity;
- Completed and placed into service its 100 MMcf/d (gross)
expansion of its Resthaven facility (the "Resthaven Expansion")
subsequent to quarter end. The Resthaven Expansion was completed on
time and under budget;
- Completed and placed into service its 100 MMcf/d shallow cut
Musreau III facility ("Musreau III"), in April of 2016, ahead of
schedule and is anticipated to be under budget;
- Announced that Pembina has
agreements for downstream connections to multiple third-party
diluent pipelines at its planned Canadian Diluent Hub ("CDH") for
an initial aggregate take-away capacity in excess of 400 mbpd, as
well as received regulatory and environmental approvals for
CDH;
- Announced that Pembina entered
into a cost-of-service agreement to build a new pipeline lateral
that will transport production from the liquids-rich Montney resource play;
- Commissioned three above ground storage tanks at its Edmonton
North Terminal ("ENT"), which have a total working capacity of 550
mbbls, more than doubling the total capacity at ENT. ENT was placed
into service ahead of schedule and under budget;
- Completed a number of initiatives including the installation of
a new brine pond, upgrades to its rail rack and construction of a
new propane truck rack at its NGL storage and terminalling
facilities in Corunna, Ontario;
and
- Received regulatory and environmental approval for its
terminalling services project for the North West Redwater
Partnership ("North West") with respect to North West's planned
refinery for an expected capital cost of $180 million and anticipated in-service date of
late 2017.
Dividends
- Pembina's Board of Directors
declared dividends of $0.16 per
qualifying common share payable on May 13,
2016 and June 15, 2016 to
shareholders of record on April 25,
2016 and May 25, 2016.
- Pembina's Board of Directors
declared a quarterly dividend of $0.265625 per qualifying Series 1 preferred
share, $0.29375 per qualifying Series
3 preferred share, $0.3125 per
qualifying Series 5 preferred share, $0.28125 per qualifying Series 7 preferred share,
$0.296875 per qualifying Series 9
preferred share and $0.359375 per
qualifying Series 11 preferred share payable on June 1, 2016 to shareholders of record on
April 29, 2016.
First Quarter 2016 Conference Call & Webcast
Pembina will host a conference
call on Friday, May 6, 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 first 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 May
13, 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 92807523.
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=1102321&s=1&k=F368DC9F046C5E4E19F4477C954E5A83
in your web browser. Shortly after the call, an audio archive will
be posted on the website for a minimum of 90 days.
Annual General Meeting of Shareholders
The Company will hold its annual general meeting of shareholders
("AGM") on Thursday, May 12, 2016 at
2:00 p.m. MT (4:00 p.m. ET) at the Metropolitan Conference
Centre, 333 - 4th Avenue S.W., Calgary,
Alberta, Canada.
A live webcast of Pembina's AGM
presentation can be accessed on Pembina's website at www.pembina.com under
Investor Centre, Presentation & Events, or by entering:
http://event.on24.com/r.htm?e=1153442&s=1&k=8BA655A73E2B1A050271BF5A8E821E9D.
Participants are recommended to register for the webcast at least
10 minutes before the presentation start time.
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 in western Canada and North
Dakota. 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 entire 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. 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", "plans", "anticipates", "intends",
"should", "estimates", "continue", "could", "forecast" and similar
expressions suggesting future events or future performance.
In particular, this document contains forward-looking
statements, including certain financial outlooks, pertaining to,
without limitation, the following: Pembina's corporate strategy and future
financial and operating results; future dividends which may be
declared on Pembina's common
shares; 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, pipeline, processing, fractionation and
storage facility and system operations and throughput levels;
anticipated synergies between acquired assets, assets under
development and existing assets of the Company; the impact of share
price on annual share-based incentive expense; and, the anticipated
use of proceeds from financings.
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; expectations regarding
participation in Pembina's
dividend reinvestment plan; 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; 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, earnings before interest, taxes, depreciation and
amortization (EBITDA), adjusted EBITDA, adjusted cash flow from
operating activities, cash flow from operating activities per
common share, adjusted cash flow from operating activities per
common share and total enterprise value. 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 net earnings, cash flow
from operating activities 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 March 31, 2016,
which is available online at www.sedar.com,
www.sec.gov and through Pembina's website at
www.pembina.com.
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