Delivering growth and strong financial performance with continued success in capital program execution
All financial figures are in Canadian dollars unless noted otherwise.
CALGARY, Nov. 3, 2016 /CNW/ - 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.
SOURCE Pembina Pipeline Corporation
