All financial figures are in Canadian dollars unless otherwise
noted. This news release refers to certain financial measures and
ratios that are not specified, defined or determined in accordance
with Generally Accepted Accounting Principles ("GAAP"), including
net revenue; adjusted earnings before interest, taxes, depreciation
and amortization ("adjusted EBITDA"); adjusted cash flow from
operating activities; adjusted cash flow from operating activities
per common share; and proportionately consolidated debt-to-adjusted
EBITDA. For more information see "Non-GAAP and Other Financial
Measures" herein.
Pembina Pipeline Corporation ("Pembina" or the "Company") (TSX:
PPL; NYSE: PBA) announced today its financial and operating results
for the fourth quarter and full year 2023.
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the full release here:
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Highlights
- Record Results - reported 2023 full year earnings of
$1,776 million and record full year adjusted EBITDA of $3,824
million that exceeded the high-end of the Company's original 2023
guidance range. Reported fourth quarter earnings of $698 million
and record quarterly adjusted EBITDA of $1,033 million.
- Ethane Supply and Transportation Agreements - Pembina
has entered into long-term agreements with Dow Chemical Canada
("Dow") to supply and transport up to 50,000 barrels per day
("bpd") of ethane to support their recently announced Path2Zero
Project.
- Nipisi Pipeline Contracting - signed an incremental
long-term contract on the recently reactivated Nipisi Pipeline,
with line of sight to the asset being fully contracted by the end
of 2024.
- Wapiti Expansion - Pembina Gas Infrastructure ("PGI")
has approved a $140 million (net to Pembina) expansion of the
Wapiti Plant that will increase natural gas processing capacity by
115 million cubic feet per day ("mmcf/d") (gross to PGI).
- Phase VIII Peace Pipeline Expansion - the estimated
project cost has been further reduced to $430 million (previously
$475 million; original budget of $530 million).
- Common Share Dividend - the board of directors declared
a common share cash dividend for the first quarter of 2024 of
$0.6675 per share, to be paid, subject to applicable law, on March
28, 2024, to shareholders of record on March 15, 2024.
- Strong Balance Sheet - at December 31, 2023 the ratio of
proportionately consolidated debt-to-adjusted EBITDA was 3.3 times,
below the low end of the Company's targeted range.
Financial and Operational Overview
3 Months Ended December
31
12 Months Ended December
31
($ millions, except where noted)
2023
2022
2023
2022
Revenue
2,466
2,699
9,125
11,611
Net revenue(1)
1,117
1,043
3,994
4,247
Gross profit
850
681
2,840
3,123
Adjusted EBITDA(1)
1,033
925
3,824
3,746
Earnings
698
243
1,776
2,971
Earnings per common share – basic
(dollars)
1.21
0.39
3.00
5.14
Earnings per common share – diluted
(dollars)
1.21
0.39
2.99
5.12
Cash flow from operating activities
880
947
2,635
2,929
Cash flow from operating activities per
common share – basic (dollars)
1.60
1.72
4.79
5.30
Adjusted cash flow from operating
activities(1)
747
690
2,646
2,661
Adjusted cash flow from operating
activities per common share – basic (dollars)(1)
1.36
1.25
4.81
4.82
Capital expenditures
177
143
606
605
Total volumes (mboe/d)(2)
3,453
3,392
3,306
3,383
(1) Refer to "Non-GAAP and Other Financial
Measures".
(2) Total revenue volumes. Revenue volumes
are physical volumes plus volumes recognized from take-or-pay
commitments. Volumes are stated in thousand barrels of oil
equivalent per day ("mboe/d"), with natural gas volumes converted
to mboe/d from millions of cubic feet per day ("MMcf/d") at a 6:1
ratio, and also include revenue volumes from Pembina's equity
accounted investees.
Financial and Operational Overview by Division
3 Months Ended December
31
12 Months Ended December
31
2023
2022
2023
2022
($ millions, except where noted)
Volumes(1)
Reportable Segment Earnings
(Loss) Before Tax
Adjusted EBITDA(2)
Volumes(1)
Reportable Segment Earnings
(Loss) Before Tax
Adjusted EBITDA(2)
Volumes(1)
Reportable Segment Earnings
(Loss) Before Tax
Adjusted EBITDA(2)
Volumes(1)
Reportable Segment Earnings
(Loss) Before Tax
Adjusted EBITDA(2)
Pipelines
2,652
677
617
2,593
295
548
2,538
1,840
2,234
2,524
1,415
2,127
Facilities
801
143
324
799
145
288
768
610
1,213
859
1,804
1,137
Marketing & New Ventures
—
204
173
—
96
171
—
435
597
—
708
721
Corporate
—
(209)
(81)
—
(206)
(82)
—
(696)
(220)
—
(708)
(239)
Total
3,453
815
1,033
3,392
330
925
3,306
2,189
3,824
3,383
3,219
3,746
(1) Volumes for Pipelines and Facilities
divisions are revenue volumes, which are physical volumes plus
volumes recognized from take-or-pay commitments. Volumes are stated
in mboe/d, with natural gas volumes converted to mboe/d from MMcf/d
at a 6:1 ratio. Volumes do not include Empress processing capacity.
Marketed natural gas liquids ("NGL") volumes are excluded from
volumes to avoid double counting. Refer to "Marketing & New
Ventures Division" in Pembina's Management's Discussion and
Analysis dated February 22, 2024 for the three and twelve months
ended December 31, 2023 for further information.
(2) Refer to "Non-GAAP and Other Financial
Measures".
For further details on the Company's significant assets,
including definitions for capitalized terms used herein that are
not otherwise defined, refer to Pembina's Annual Information Form
for the year ended December 31, 2023 filed at www.sedarplus.ca
(filed with the U.S. Securities and Exchange Commission at
www.sec.gov under Form 40-F) and on Pembina's website at
www.pembina.com.
Financial & Operational Highlights
Adjusted EBITDA
Pembina reported record quarterly adjusted EBITDA of $1,033
million in the fourth quarter and record full year adjusted EBITDA
of $3,824 million. This represents a $108 million or 12 percent
increase, and a $78 million or two percent increase, respectively,
over the same periods in the prior year. For both the fourth
quarter and full year, reported adjusted EBITDA reflects strong
performance in the Pipelines and Facilities divisions as Pembina
continues to benefit from growing volumes and higher tolls on
certain systems, as well as continued strong results from the
marketing business.
Pipelines reported adjusted EBITDA of $617 million for the
fourth quarter, representing a $69 million or 13 percent increase
compared to the same period in the prior year, reflecting the net
impact of the following factors:
- higher volumes on the Peace Pipeline system, Drayton Valley
Pipeline, and on the recently reactivated Nipisi Pipeline;
- higher tolls primarily on the Cochin Pipeline and Peace
Pipeline systems, largely related to contractual inflation
adjustments; and
- lower contribution from the Alliance Pipeline, primarily due to
lower interruptible tolls and volumes.
Pipelines reported adjusted EBITDA of $2,234 million for the
full year, representing a $107 million or five percent increase
compared to the same period in the prior year, reflecting the net
impact of the following factors:
- higher contracted volumes and tolls on the Peace Pipeline
system;
- higher tolls and the impact of a higher U.S. dollar exchange
rate on the Cochin Pipeline;
- higher volumes on the Vantage Pipeline due to third party
outages in 2022;
- reactivation of the Nipisi Pipeline;
- lower volumes and higher operating costs due to the Northern
Pipeline system outage and the Alberta and British Columbia
wildfires (the "Wildfires"); and
- lower contribution from the Alliance Pipeline, primarily due to
the sale of linepack inventory in 2022, lower interruptible tolls
and volumes, and seasonal contracts being replaced by firm
contracts at lower regulated rates.
Facilities reported adjusted EBITDA of $324 million for the
fourth quarter, representing a $36 million or 13 percent increase
over the same period in the prior year, reflecting the net impact
of the following factors:
- higher contribution from the PGI assets, primarily from the
former Energy Transfer Canada plants, the Hythe Plant, and the
Dawson Assets due to higher volumes; and
- higher revenue at Vancouver Wharves.
Facilities reported adjusted EBITDA of $1,213 million for the
full year, representing a $76 million or seven percent increase
over the same period in the prior year, reflecting the net impact
of the following factors:
- higher contribution from the PGI assets, due to higher volumes
primarily at the former Energy Transfer Canada plants, the Hythe
Plant, and the Dawson Assets;
- a gain on the recognition of a finance lease; and
- lower volumes at the Redwater Complex and at Younger primarily
due to the Northern Pipeline system outage.
Marketing & New Ventures reported adjusted EBITDA of $173
million for the fourth quarter, representing a $2 million or one
percent increase compared to the same period in the prior year,
reflecting the net impact of the following factors:
- higher contribution from Aux Sable;
- lower natural gas marketing margins due to the decrease in
Chicago natural gas prices, as well as lower crude oil margins
resulting from the lower prices across the crude oil complex,
largely offset by higher NGL margins, primarily due to lower input
natural gas prices and higher marketed NGL volumes; and
- realized losses on commodity-related derivatives in the fourth
quarter of 2023 compared to realized gains in the fourth quarter of
2022.
Marketing & New Ventures reported adjusted EBITDA of $597
million for the full year, representing a $124 million or 17
percent decrease compared to the same period in the prior year,
reflecting the net impact of the following factors:
- lower crude oil, NGL, and natural gas margins, resulting from a
decrease in commodity prices;
- lower contribution from Aux Sable; and
- realized gains on commodity-related derivatives in 2023,
compared to realized losses in 2022.
Corporate reported adjusted EBITDA of negative $81 million for
the fourth quarter, which was largely consistent with the same
period in the prior year. Results were impacted by higher incentive
costs driven by Pembina's share price performance and increased
shared service revenue.
Corporate reported adjusted EBITDA of negative $220 million for
the full year, representing an $19 million or eight percent
increase over the same period in the prior year, reflecting the net
impact of the following factors:
- lower general and administrative costs, net of increased shared
service revenue; and
- lower long-term incentive costs.
Earnings
Pembina reported fourth quarter earnings of $698 million and
full year earnings of $1,776 million. This represents a $455
million or 187 percent increase, and a $1,195 million or 40 percent
decrease, respectively, over the same periods in the prior
year.
Pipelines had reportable segment earnings before tax in the
fourth quarter of $677 million, representing a $382 million or 129
percent increase over the prior period. In addition to the factors
impacting adjusted EBITDA, as noted above, the change in reportable
segment earnings before tax in the fourth quarter was due to the
reversal of a previous impairment related to the Nipisi Pipeline,
as well as the Ruby settlement provision and associated legal fees
incurred in the fourth quarter of 2022.
Pipelines had reportable segment earnings before tax for the
full year of $1,840 million, representing a $425 million or 30
percent increase over the prior year. In addition to the factors
impacting adjusted EBITDA and the factors impacting fourth quarter
reportable segment earnings before tax, as noted above, the change
in reportable segment earnings before tax for the full year was due
to higher depreciation.
Facilities had reportable segment earnings before tax in the
fourth quarter of $143 million representing a $2 million or one
percent decrease over the prior year. In addition to the factors
impacting adjusted EBITDA, as noted above, the change in reportable
segment earnings before tax in the fourth quarter was due to lower
project write-offs recognized in the quarter, largely offset by
higher depreciation.
Facilities had reportable segment earnings before tax for the
full year of $610 million representing a $1,194 million or 66
percent decrease over the prior year. In addition to the factors
impacting adjusted EBITDA, as noted above, the change in reportable
segment earnings before tax for the full year was due to the $1.1
billion gain recognized on the PGI Transaction during the third
quarter of 2022, partially offset by lower depreciation and lower
project write-offs.
Marketing & New Ventures had reportable segment earnings
before tax in the fourth quarter of $204 million representing a
$108 million or 113 percent increase over the prior year. In
addition to the factors impacting adjusted EBITDA, as noted above,
the change in reportable segment earnings before tax in the fourth
quarter was due to an unrealized gain on commodity-related
derivatives compared to a loss in the fourth quarter of 2022, lower
net finance costs due to decreased foreign exchange losses, and a
change in the insurance contract provision in the period.
Marketing & New Ventures had reportable segment earnings
before tax for the full year of $435 million representing a $273
million or 39 percent decrease, over the prior year. In addition to
the factors impacting adjusted EBITDA, as noted above, the change
in reportable segment earnings before tax in the full year was due
to an unrealized loss on commodity-related derivatives compared to
a gain in 2022, partially offset by lower net finance costs due to
gains recognized on non-commodity related derivatives compared to
losses in 2022.
In addition to the changes in reportable segment earnings before
tax for each division discussed above, the change in fourth quarter
earnings compared to the prior period was due to higher income tax
expense due to higher earnings compared to the prior period,
partially offset by the recognition of previously unrecognized
deferred tax assets. The change in the full year earnings compared
to the prior year was also primarily due to higher income tax
expense due to the tax impact of the PGI Transaction in 2022.
Cash Flow From Operating Activities
Cash flow from operating activities of $880 million for the
fourth quarter and $2,635 million for the full year represent a
seven percent and ten percent decrease, respectively, over the same
periods in the prior year.
The decrease in the fourth quarter was primarily driven by the
change in non-cash working capital, higher taxes paid, and a
decrease in payments collected through contract liabilities,
partially offset by higher operating results.
The decrease in the full year was primarily driven by the change
in non-cash working capital, lower operating results, a decrease in
payments collected through contract liabilities, and higher
share-based compensation payments, partially offset by higher
distributions from equity accounted investees and lower taxes
paid.
On a per share (basic) basis, cash flow from operating
activities was $1.60 per share for the fourth quarter and $4.79 per
share for the full year. This represents decreases of seven percent
and ten percent, respectively, compared to the same periods in the
prior year.
Adjusted Cash Flow From Operating Activities
Adjusted cash flow from operating activities of $747 million for
the fourth quarter and $2,646 million for the full year, represent
an eight percent increase and one percent decrease, respectively,
over the same periods in the prior year.
The increase in the fourth quarter was primarily driven by the
same items impacting cash flow from operating activities, discussed
above, excluding the change in non-cash working capital and taxes
paid, partially offset by higher current income tax expense.
The decrease in the full year was primarily driven by the same
items impacting cash flow from operating activities, discussed
above, excluding the change in non-cash working capital, taxes
paid, and share-based compensation payments, combined with higher
current tax expense, partially offset by lower accrued share-based
payment expense.
On a per share (basic) basis, adjusted cash flow from operating
activities was $1.36 per share for the fourth quarter and $4.81 per
share for the full year. This represents an increase of nine
percent and no change, respectively, compared to the same periods
in the prior year.
Volumes
Total volumes of 3,453 mboe/d for the fourth quarter and 3,306
mboe/d for the full year represent an increase of two percent and a
decrease of two percent, respectively, over the same periods in the
prior year.
Pipelines volumes of 2,652 mboe/d in the fourth quarter
represent a two percent increase compared to the same period in the
prior year, primarily reflecting the reactivation of the Nipisi
Pipeline in the fourth quarter of 2023, higher contracted volumes
on the Peace Pipeline system, as well as higher volumes on the
Drayton Valley Pipeline.
Pipelines volumes of 2,538 mboe/d for the full year represent a
one percent increase compared to the same period in the prior year,
primarily reflecting higher contracted volumes on the Peace
Pipeline system, the reactivation of the Nipisi Pipeline in the
fourth quarter of 2023, and higher volumes on the Vantage Pipeline
due to third-party outages in 2022, partially offset by lower
volumes related to the Northern Pipeline system outage, and the
impacts of the Wildfires.
Facilities volumes of 801 mboe/d in the fourth quarter were
consistent with the same period in the prior year, reflecting
higher volumes from PGI, primarily at the Hythe Gas Plant and at
the Dawson Assets, largely offset by lower volumes at the Redwater
Complex.
Facilities volumes of 768 mboe/d for the full year represent an
11 percent decrease compared to the same period in the prior year,
reflecting the net impact of the following factors:
- the disposition of Pembina's interest in the E1 and E6 assets
in exchange for a processing agreement that provides Pembina with
the right to first priority for gas processing at all Plains
Midstream-operated assets at Empress;
- lower volumes at the Redwater Complex and at Younger resulting
from the Northern Pipeline system outage and planned outages in the
third quarter of 2023; and
- higher volumes from PGI, primarily at the former Energy
Transfer Canada plants and at the Dawson Assets.
Excluding the impact of the disposition of Pembina’s interest in
the E1 and E6 assets at Empress, the Northern Pipeline system
outage, and the Wildfires, Facilities volumes would have increased
by five percent in 2023 compared to the same period in the prior
year.
Marketed NGL volumes of 217 mboe/d in the fourth quarter
represents a 12 percent increase compared to the same period in the
prior year, reflecting higher propane, ethane, and butane
sales.
Marketed NGL volumes of 185 mboe/d in the full year were largely
consistent with the same period in the prior year.
Quarterly Common Share Dividend
Pembina's board of directors has declared a common share cash
dividend for the first quarter of 2024 of $0.6675 per share, to be
paid, subject to applicable law, on March 28, 2024, to shareholders
of record on March 15, 2024. The common share dividends are
designated as "eligible dividends" for Canadian income tax
purposes. For non-resident shareholders, Pembina's common share
dividends should be considered "qualified dividends" and may be
subject to Canadian withholding tax.
For shareholders receiving their common share dividends in U.S.
funds, the cash dividend is expected to be approximately U.S.
$0.4940 per share (before deduction of any applicable Canadian
withholding tax) based on a currency exchange rate of 0.7401. The
actual U.S. dollar dividend will depend on the Canadian/U.S. dollar
exchange rate on the payment date and will be subject to applicable
withholding taxes.
Quarterly dividend payments are expected to be made on the last
business day of March, June, September and December to shareholders
of record on the 15th day of the corresponding month, if, as and
when declared by the board of directors. Should the record date
fall on a weekend or on a statutory holiday, the record date will
be the next succeeding business day following the weekend or
statutory holiday.
Executive Overview
2023 results reflect the strength of Pembina's business and are
highlighted by record annual adjusted EBITDA of $3.8 billion that
exceeded the high end of our original guidance range. These results
reflect growing volumes across many systems and a strong
contribution from the marketing business. While operations in the
first half of the year were impacted by the Wildfires and the
Northern Pipeline system outage, the second half of the year more
accurately reflected the underlying positive momentum in the
Western Canadian Sedimentary Basin (the "WCSB"). This is
demonstrated most notably by the more than four percent
year-over-year increase in second half volumes in the conventional
pipelines business.
Progressing Pembina's Strategy
In early 2023, Pembina outlined a strategy designed to ensure it
remains resilient into the future. Guided by this strategy, we are
working every day to strengthen our existing business to ensure we
help meet the energy needs of today and maximize the value of oil
and gas products from Western Canada by getting them to the best
markets in the world. We also recognize that the future of energy
will require lower emissions and new energy solutions - there is a
tremendous opportunity for Pembina to leverage its existing core
business to help meet that challenge. Furthermore, our strategy
demonstrates the value we place on doing this important work in a
way that benefits everyone that has a stake in Pembina’s business –
our investors, customers, employees, and communities.
A highlight of the fourth quarter was the announcement of a $3.1
billion acquisition of Enbridge’s interests in Alliance, Aux Sable,
and NRGreen joint ventures (the "Alliance/Aux Sable Acquisition").
Pembina's business is built around integrated,
difficult-to-replicate assets that provide an enduring competitive
advantage and unequaled market access for customers. Alliance
Pipeline and Aux Sable are world-class energy infrastructure assets
and increasing our existing ownership in them will further
strengthen our growing franchise. The Alliance/Aux Sable
Acquisition complements Pembina's strategy of providing access for
world-class, long-life resources from the WCSB to premium end
markets and increases exposure to lighter hydrocarbons, including
natural gas and natural gas liquids. The Alliance/Aux Sable
Acquisition is subject to the satisfaction or waiver of customary
closing conditions, including the receipt of required regulatory
approvals. The 30-day waiting period under U.S. Hart-Scott-Rodino
Act has expired without any further queries from the applicable
regulators. Pembina continues to expect the Alliance/Aux Sable
Acquisition to close in the first half of 2024.
In 2023, Pembina further progressed its strategy by sustaining
and enhancing our business through various previously disclosed
accomplishments. These include signing new contracts on the Peace
Pipeline system; signing new, or extending existing, contracts at
the Redwater Complex; reactivating the Nipisi Pipeline; and
approving new projects such as the 55,000 bpd RFS IV expansion, the
expansion of the NEBC pipeline system, and a cogeneration facility
at PGI's Kaybob 3 Plant.
In addition, Pembina is pleased to provide the following
business updates:
- PGI has approved an expansion (the "Wapiti Expansion") that
will increase natural gas processing capacity at the Wapiti Plant
by 115 mmcf/d (gross to PGI). The Wapiti Plant is fully integrated
into Pembina’s value chain and the liquids processed at the plant
are transported on the Peace Pipeline system. The Wapiti Expansion
is being driven by strong customer demand supported by growing
Montney production and will be fully underpinned by long-term,
take-or-pay contracts. The Wapiti Expansion, which includes a new
sales gas pipeline and other related infrastructure, is expected to
cost $140 million (net to Pembina) with an estimated in-service
date in the first half of 2026, subject to regulatory and
environmental approval.
- In November, Dow announced it is proceeding with construction
of a new integrated ethylene cracker and derivatives facility in
Fort Saskatchewan (the "Path2Zero Project"), which is scheduled be
completed in two phases with in-service dates in 2027 and 2029,
respectively. This is an important development for the WCSB,
representing a significant increase to the current ethane market in
Alberta. Given Pembina's existing leading ethane supply and
transportation business and extensive and integrated value chain,
there are multiple opportunities for the Company to benefit from
this new development, through both the existing asset base and new
investment opportunities. First, Pembina is excited to announce
that it has entered into long-term agreements with Dow to supply up
to 50,000 bpd of ethane and for the associated transportation on
the Alberta Ethane Gathering System ("AEGS"). Second, Pembina is a
major supplier of ethane to the petrochemical industry. To expand
its existing ethane supply portfolio, in support of the agreement
with Dow, Pembina is evaluating several possible options to invest
in new infrastructure, including incremental deep-cut processing
capacity at certain PGI gas plants, de-ethanizer expansions at
existing fractionation facilities, potential new straddle
facilities, and smaller capital efficient expansion opportunities.
Finally, the Path2Zero Project will directly drive incremental
ethane demand, the extraction of which should also increase the
supply of other associated NGL - propane, butane and condensate.
The resulting volume growth across the WCSB will benefit Pembina
over a period of many years and support higher utilization and
potential expansions of its assets, including gas processing
facilities, the Redwater fractionation complex, the Peace and
Northern pipeline systems, the AEGS, and storage facilities.
- Pembina recently closed open seasons on the Cochin Pipeline for
a total of 90,000 bpd with contracts expiring between 2027 and
2030, in respect of contracts previously expiring in July 2024. The
open seasons were more than three times oversubscribed,
highlighting strong customer interest and the value of Cochin
Pipeline service. Cochin Pipeline, which spans from Illinois to
Alberta, supplies light condensate to fill a structural diluent
shortfall in the WCSB. The desire of shippers to secure long-term
capacity highlights the important role that Cochin Pipeline plays
in supporting the Canadian oil industry's operations, development,
and growth. While contracted tolls are lower than historic levels,
Pembina has successfully increased daily volume throughput over the
past two years by up to 25,000 bpd, or approximately 25 percent,
through operational optimization and equipment upgrades.
- Given rising production from the Clearwater oil play, Pembina
continues to experience strong demand for service on the Nipisi
Pipeline, with current volumes of approximately 33,000 bpd.
Including an incremental contract signed with an anchor customer in
the fourth quarter, more than half of the capacity on the Nipisi
Pipeline is now contracted, on a long-term basis, with line of
sight to the asset being fully contracted by the end of 2024.
Looking Ahead to 2024 and
Beyond
Momentum within our business is expected to continue and Pembina
is well positioned to benefit from what it expects to be a
transformational period in the Canadian energy industry.
In 2024, Pembina will focus on progressing its current growth
projects – the Phase VIII Peace Pipeline expansion, RFS IV, the K3
Cogeneration Facility, the Wapiti Expansion and the NEBC MPS
Expansion - and delivering them on time and on budget. We also look
forward to progressing our other development opportunities, such as
Cedar LNG, the Alberta Carbon Grid, and further expansions of
assets in our core business. As well, upon closing of the
Alliance/Aux Sable Acquisition, we will prioritize integrating
those businesses and pursuing the near-term synergies we have
identified to extract greater value from these exceptional
assets.
In December, Pembina announced a 2024 adjusted EBITDA guidance
range of $3.725 billion to $4.025 billion, driven by continued
volume growth across the WCSB, new assets placed into service,
re-contracting of certain assets, and the prevailing commodity
price outlook at the time. This guidance range excludes the impact
of the recently announced Alliance/Aux Sable Acquisition. Pembina
will provide further updates to the guidance range as timing of the
closing of the Alliance/Aux Sable Acquisition becomes more
certain.
Throughout 2022 and 2023, Pembina has generated substantial free
cash flow, which has been allocated to strengthening the balance
sheet and returning capital to shareholders. During this time,
Pembina has paid down debt, reducing leverage below the low end of
its target range in anticipation of funding future capital
projects. Pembina expects to remain firmly within its financial
guardrails with ample liquidity and its leverage metrics are
expected to remain well within the ranges for a strong 'BBB' credit
rating.
Looking beyond 2024, over the next several years, Pembina sees
the potential for mid-single digit annual volume growth across the
WCSB, primarily from the northeast British Columbia ("NEBC")
Montney formation. Near-term catalysts, including new LNG export
capacity, the completion of the TransMountain Pipeline expansion,
and Dow's Path2Zero Project are expected to contribute to WCSB
production growth.
Pembina is uniquely positioned to capture new volumes and
benefit from the growth in the WCSB given the scope and reach of
its assets, highly economic expansion opportunities, existing
long-term contracts, and agreements with three premier NEBC
producers. Consistent with our strategy, we will continue to invest
in infrastructure to serve customers and enhance Pembina's
integrated value chain, while also pursuing opportunities to
enhance access to global markets and better align the Company's
future with the transition to a lower-carbon economy.
Our investors have come to expect strong and consistent
financial leadership from us, demonstrated by a secure and growing
dividend, an unwavering commitment to our financial guardrails, a
low-risk and primarily fee-based business with high take-or-pay or
cost-of-service contributions, and strong balance sheet metrics.
Investors can expect us to live up to our reputation and execute
our strategy with the same financial discipline that has made
Pembina successful to date.
Pembina's 2023 Annual Summary, including our messages to
shareholders, is available at
www.pembina.com/investors/investor-documents-filings.
Projects and New Developments(1)
Pipelines
- The Phase VIII Peace Pipeline expansion will enable segregated
pipeline service for ethane-plus and propane-plus NGL mix from
Gordondale, Alberta, which is centrally located within the Montney
trend, into the Edmonton area for market delivery. The project
includes new 10-inch and 16-inch pipelines, totaling approximately
150 kilometres, in the Gordondale to La Glace corridor of Alberta,
as well as new mid-point pump stations and terminal upgrades
located throughout the Peace Pipeline system. Phase VIII will add
approximately 235,000 bpd of incremental capacity between
Gordondale, Alberta and La Glace, Alberta, as well as approximately
65,000 bpd of capacity between La Glace, Alberta and the Namao hub
near Edmonton, Alberta. The estimated project cost has been revised
lower to $430 million (previously $475 million; original budget of
$530 million). The revised cost reflects highly effective project
management and execution, favourable weather conditions and
productive contractor relationships. The project is trending on
time, with three pump stations completed. The construction is
expected to be completed in the first quarter of 2024, with
pipeline and facility commissioning and start-up expected in the
second quarter of 2024.
- The NEBC MPS Expansion includes a new mid-point pump station,
terminal upgrades, and additional storage, which will support
approximately 40,000 bpd of incremental capacity on the NEBC
Pipeline system. This expansion is expected to cost $90 million and
will fulfill customer demand in light of growing production volumes
from NEBC and previously announced long-term midstream service
agreements with three premier NEBC Montney producers. The project
is trending on time and on budget and is expected to enter service
in the fourth quarter of 2024. Additionally, Pembina continues to
evaluate further expansions to support volume growth in
northeastern British Columbia, including new pipelines and terminal
upgrades on the NEBC Pipeline and downstream systems between
Taylor, British Columbia and Gordondale, Alberta. In 2023, Pembina
filed its project notification with the Canada Energy Regulator in
respect of the interprovincial portion of these expansions.
Facilities
- Pembina is constructing a new 55,000 bpd propane-plus
fractionator ("RFS IV") at its existing Redwater fractionation and
storage complex (the "Redwater Complex"). RFS IV is expected to
cost approximately $460 million and will leverage the design,
engineering and operating best practices of its existing
facilities. The project includes additional rail loading capacity
at the Redwater Complex. Subject to regulatory and environmental
approvals, RFS IV is expected to be in-service in the first half of
2026 and is currently trending on time and on budget. With the
addition of RFS IV, the fractionation capacity at the Redwater
Complex will total 256,000 bpd. Site clearing activities have been
completed, engineering and procurement activities continue, and
site construction is expected to begin in the second quarter of
2024.
- PGI's Wapiti Expansion will increase natural gas processing
capacity at the Wapiti Plant by 115 mmcf/d (gross to PGI). The
project, which includes a new sales gas pipeline and other related
infrastructure, is expected to cost $230 million ($140 million net
to Pembina) with an estimated in-service date in the first half of
2026, subject to regulatory and environmental approval.
- PGI is developing a 28 MW cogeneration facility at its K3 Plant
(the "K3 Cogeneration Facility"), which is expected to cost $115
million ($70 million net to Pembina). The K3 Cogeneration Facility
is expected to reduce overall operating costs by providing power
and heat to the gas processing facility, while reducing customers’
exposure to power prices. The K3 Cogeneration Facility is expected
to fully supply the K3 Plant's power requirements, with excess
power sold to the grid at market rates. Further, this project is
expected to contribute to a reduction in annual emissions
compliance costs at the K3 Plant through the utilization of the
cogeneration waste heat and the low-emission power generated and is
expected to be in-service in the first half of 2026.
Marketing & New Ventures
- Cedar LNG has substantially completed several key project
deliverables, including obtaining material regulatory approvals;
advancing inter-project agreements with Coastal GasLink and LNG
Canada; signing a heads of agreement with Samsung Heavy Industries
Co., Ltd. and Black & Veatch Corporation; and executing a lump
sum engineering, procurement, and construction agreement (the "EPC
Agreement") to provide Cedar LNG with the necessary services to
construct the project. In order to achieve this momentum, as at
December 31, 2023, Pembina had invested approximately $200 million
in Cedar LNG. Though numerous milestones have been achieved, the
Cedar LNG project still faces a number of schedule driven
interconnected elements that require resolution prior to making a
final investment decision ("FID"), including binding commercial
offtake, obtaining certain third-party consents, and project
financing. On this basis, a final investment decision is now
expected in the middle of 2024. As a result of the revised FID
timing, current year net contributions to Cedar LNG through to the
middle of 2024 are expected to be approximately $200 to $300
million. Further, in connection with, and following execution of,
the EPC Agreement, Pembina was required to provide financial
assurances to advance upstream infrastructure projects. In
addition, to further progress the project, Pembina expects to take
additional steps which will require providing additional financial
assurances. Total financial assurances up to $230 million may be
required in 2024, prior to an FID. These financial assurances may
become payable in the case of a negative FID. In conjunction with a
positive FID, these financial assurances will be transferred to
Cedar LNG.
- Pembina and TC Energy Corporation ("TC Energy") have formed a
partnership to develop the Alberta Carbon Grid ("ACG"), a carbon
transportation and sequestration platform. ACG is developing the
Industrial Heartland project, which will have the potential to
transport and store up to ten million tonnes of carbon dioxide
annually. ACG completed the appraisal well drilling, logging and
testing in December 2023. Preliminary data was consistent with
ACG’s storage capacity expectations and further work is underway to
confirm the initial results. Throughout 2024, ACG will continue to
progress commercial conversations, refine the project scope, and
advance project engineering, including facility design and work on
the pipeline routing.
Fourth Quarter 2023 Conference Call & Webcast
Pembina will host a conference call on Friday, February 23, 2024
at 8:00 a.m. MT (10:00 a.m. ET) for interested investors, analysts,
brokers and media representatives to discuss results for the fourth
quarter of 2023. The conference call dial-in numbers for Canada and
the U.S. are 1-416-764-8624 or 1-888-259-6580. A recording of the
conference call will be available for replay until Friday, March 1,
2024 at 11:59 p.m. ET. To access the replay, please dial either
1-416-764-8692 or 1-877-674-7070 and enter the password 454444
#.
A live webcast of the conference call can be accessed on
Pembina's website at www.pembina.com under Investor Centre/
Presentation & Events, or by entering:
https://events.q4inc.com/attendee/659522994 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
Pembina Pipeline Corporation is a leading energy transportation
and midstream service provider that has served North America's
energy industry for 70 years. Pembina owns an integrated network of
hydrocarbon liquids and natural gas pipelines, gas gathering and
processing facilities, oil and natural gas liquids infrastructure
and logistics services, and an export terminals business. Through
our integrated value chain, we seek to provide safe and reliable
energy solutions that connect producers and consumers across the
world, support a more sustainable future and benefit our customers,
investors, employees and communities. For more information, please
visit www.pembina.com.
Purpose of Pembina: We deliver extraordinary energy solutions so
the world can thrive.
Pembina is structured into three Divisions: Pipelines Division,
Facilities Division and Marketing & New Ventures Division.
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 news release contains certain forward-looking statements
and forward-looking 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
"continue", "anticipate", "will", "expects", "estimate",
"potential", "planned", "future", "outlook", "strategy", "protect",
"plan", "commit", "maintain", "focus", "ongoing", "believe" and
similar expressions suggesting future events or future
performance.
In particular, this news release contains forward-looking
statements, including certain financial outlooks, pertaining to,
without limitation, the following: future pipeline, processing,
fractionation and storage facility and system operations and
throughput levels; Pembina's strategy and the development of new
business initiatives and growth opportunities, including the
anticipated benefits therefrom and the expected timing thereof;
expectations about industry activities and development
opportunities, as well as the anticipated benefits thereof,
including operating segment and general market conditions outlooks
and industry developments for 2024 and thereafter; expectations
about future demand for Pembina's infrastructure and services,
including expectations in respect of customer contracts, future
volume growth in the WCSB, increased utilization and future tolls
and volumes; expectations relating to the development and
anticipated benefits of Pembina's new projects and developments,
including the Phase VIII Peace Pipeline expansion, Cedar LNG, RFS
IV, ACG, the NEBC MPS Expansion, the Wapiti Expansion and the K3
Cogeneration Facility, including the timing thereof; expectations
relating to the development and anticipated benefits of the
Path2Zero Project, including the timing thereof; the Alliance/Aux
Sable Acquisition, including the timing and anticipated benefits
thereof; Pembina's previously announced 2024 adjusted EBITDA
guidance range, and future revisions thereto; Pembina's future
common share dividends, including the timing, amount and expected
tax treatment thereof; planning, construction, locations, capital
expenditure estimates, schedules, regulatory and environmental
applications and anticipated approvals, expected capacity,
incremental volumes, contractual arrangements, completion and
in-service dates, rights, sources of product, activities, benefits
and operations with respect to new construction of, repairs to or
expansions on existing pipelines, systems, gas services facilities,
processing and fractionation facilities, terminalling, storage and
hub facilities and other facilities or energy infrastructure, as
well as the impact of Pembina's new projects on its future
financial performance and stakeholders; expectations regarding
Pembina's financial strength and condition; expectations regarding
Pembina's commercial agreements, including the expected timing and
benefit thereof; statements and expectations related to Pembina's
commitment to, and the effectiveness and impact of, its
sustainability goals and targets; and the impact of current and
expected market conditions on Pembina.
The forward-looking statements are based on certain factors and
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; prevailing commodity prices, interest rates, carbon
prices, tax rates, exchange rates and inflation rates; the ability
of Pembina to maintain current credit ratings; the availability and
cost of capital to fund future capital requirements relating to
existing assets, projects and the repayment or refinancing of
existing debt as it becomes due; 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; the satisfaction of the conditions to
closing of the Alliance/Aux Sable Acquisition in a timely manner,
including receipt of all necessary approvals; that the Alliance/Aux
Sable Acquisition will be completed on terms consistent with
management's current expectations; assumptions with respect to our
intention to complete share repurchases, including the funding
thereof, existing and future market conditions, including with
respect to Pembina's common share trading price, and compliance
with respect to applicable securities laws and regulations and
stock exchange policies; that any required commercial agreements
can be reached in the manner and on the terms expected by Pembina;
that all required regulatory and environmental approvals can be
obtained on the necessary terms and 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 projects; 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 and Indigenous and landowner
consultation requirements; the impact of competitive entities and
pricing; reliance on third parties to successfully operate and
maintain certain assets; reliance on key relationships, joint
venture partners and agreements; labour and material shortages; 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, changes in regulatory
processes or increased environmental regulation; the ability of
Pembina to acquire or develop the necessary infrastructure in
respect of future development projects; the ability of Pembina and
Enbridge to receive all necessary regulatory approvals and satisfy
all other necessary conditions to closing of the Alliance/Aux Sable
Acquisition on a timely basis or at all; Pembina's ability to
realize the anticipated benefits of the Alliance/Aux Sable
Acquisition; fluctuations in operating results; adverse general
economic and market conditions, including potential recessions in
Canada, North America and worldwide resulting in changes, or
prolonged weaknesses, as applicable, in interest rates, foreign
currency exchange rates, inflation rates, commodity prices,
supply/demand trends and overall industry activity levels;
constraints on the, or the unavailability of, adequate supplies,
infrastructure or labour; the political environment in North
American and elsewhere, and public opinion; the ability to access
various sources of debt and equity capital; adverse changes in
credit ratings; counterparty credit risk; technology and cyber
security risks; natural catastrophes; and certain other risks
detailed in Pembina's Annual Information Form and Management's
Discussion and Analysis, each dated February 22, 2024 for the year
ended December 31, 2023 and from time to time in Pembina's public
disclosure documents available at www.sedarplus.ca, 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 by forward-looking statements contained herein. The
forward-looking statements contained in this news release speak
only as of the date of this news release. 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. Management approved the 2024
adjusted EBITDA guidance contained herein on December 11, 2023. The
purpose of the 2024 adjusted EBITDA guidance is to assist readers
in understanding Pembina's expected and targeted financial results,
and this information may not be appropriate for other purposes. The
forward-looking statements contained in this news release are
expressly qualified by this cautionary statement.
Non-GAAP and Other Financial Measures
Throughout this news release, Pembina has disclosed certain
financial measures and ratios that are not specified, defined or
determined in accordance with GAAP and which are not disclosed in
Pembina's financial statements. Non-GAAP financial measures either
exclude an amount that is included in, or include an amount that is
excluded from, the composition of the most directly comparable
financial measure specified, defined and determined in accordance
with GAAP. Non-GAAP ratios are financial measures that are in the
form of a ratio, fraction, percentage or similar representation
that has a non-GAAP financial measure as one or more of its
components. These non-GAAP financial measures and non-GAAP ratios,
together with financial measures and ratios specified, defined and
determined in accordance with GAAP, are used by management to
evaluate the performance and cash flows of Pembina and its
businesses and to provide additional useful information respecting
Pembina's financial performance and cash flows to investors and
analysts.
In this news release, Pembina has disclosed the following
non-GAAP financial measures and non-GAAP ratios: net revenue,
adjusted EBITDA, adjusted EBITDA from equity accounted investees,
adjusted EBITDA per common share, adjusted cash flow from operating
activities, adjusted cash flow from operating activities per common
share, and proportionately consolidated debt-to-adjusted EBITDA.
The non-GAAP financial measures and non-GAAP ratios disclosed in
this news release do not have any standardized meaning under
International Financial Reporting Standards ("IFRS") and may not be
comparable to similar financial measures or ratios disclosed by
other issuers. Such financial measures and ratios should not,
therefore, be considered in isolation or as a substitute for, or
superior to, measures and ratios of Pembina's financial
performance, or cash flows specified, defined or determined in
accordance with IFRS, including revenue, earnings, cash flow from
operating activities and cash flow from operating activities per
share.
Except as otherwise described herein, these non-GAAP financial
measures and non-GAAP ratios are calculated on a consistent basis
from period to period. Specific reconciling items may only be
relevant in certain periods.
Below is a description of each non-GAAP financial measure and
non-GAAP ratio disclosed in this news release, together with, as
applicable, disclosure of the most directly comparable financial
measure that is determined in accordance with GAAP to which each
non-GAAP financial measure relates and a quantitative
reconciliation of each non-GAAP financial measure to such directly
comparable GAAP financial measure. Additional information relating
to such non-GAAP financial measures and non-GAAP ratios, including
disclosure of the composition of each non-GAAP financial measure
and non-GAAP ratio, an explanation of how each non-GAAP financial
measure and non-GAAP ratio provides useful information to investors
and the additional purposes, if any, for which management uses each
non-GAAP financial measure and non-GAAP ratio; an explanation of
the reason for any change in the label or composition of each
non-GAAP financial measure and non-GAAP ratio from what was
previously disclosed; and a description of any significant
difference between forward-looking non-GAAP financial measures and
the equivalent historical non-GAAP financial measures, is contained
in the "Non-GAAP & Other Financial Measures" section of the
management's discussion and analysis of Pembina dated February 22,
2024 for the year ended December 31, 2023 (the "MD&A"), which
information is incorporated by reference in this news release. The
MD&A is available on SEDAR+ at www.sedarplus.ca, EDGAR at
www.sec.gov and Pembina's website at www.pembina.com.
Net Revenue
Net revenue is a non-GAAP financial measure which is defined as
total revenue less cost of goods sold including product purchases.
The most directly comparable financial measure to net revenue that
is determined in accordance with GAAP and disclosed in Pembina's
financial statements is revenue.
3 Months Ended December 31
Pipelines
Facilities
Marketing &
New Ventures
Corporate &
Inter-segment
Eliminations
Total
($ millions)
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Revenue
737
686
248
237
1,660
1,921
(179)
(145)
2,466
2,699
Cost of goods sold, including product
purchases
11
—
—
—
1,476
1,734
(138)
(78)
1,349
1,656
Net revenue
726
686
248
237
184
187
(41)
(67)
1,117
1,043
12 Months Ended December 31
Pipelines
Facilities
Marketing &
New Ventures
Corporate &
Inter-segment
Eliminations
Total
($ millions)
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Revenue
2,707
2,508
909
1,268
6,087
8,471
(578)
(636)
9,125
11,611
Cost of goods sold, including product
purchases
17
—
—
6
5,509
7,682
(395)
(324)
5,131
7,364
Net revenue
2,690
2,508
909
1,262
578
789
(183)
(312)
3,994
4,247
Adjusted Earnings Before Interest, Taxes,
Depreciation and Amortization
Adjusted EBITDA is a non-GAAP financial measure and is
calculated as earnings before net finance costs, income taxes,
depreciation and amortization (included in operations and general
and administrative expense) and unrealized gains or losses on
commodity-related derivative financial instruments. The exclusion
of unrealized gains or losses on commodity-related derivative
financial instruments eliminates the non-cash impact of such gains
or losses.
Adjusted EBITDA also includes adjustments to earnings for losses
(gains) on disposal of assets, transaction costs incurred in
respect of acquisitions, dispositions and restructuring, impairment
charges or reversals in respect of goodwill, intangible assets,
investments in equity accounted investees and property, plant and
equipment, certain non-cash provisions and other amounts not
reflective of ongoing operations. These additional adjustments are
made to exclude various non-cash and other items that are not
reflective of ongoing operations.
The equivalent historical non-GAAP financial measure to 2024
adjusted EBITDA guidance is adjusted EBITDA for the year ended
December 31, 2023.
Adjusted EBITDA per common share is a non-GAAP ratio which is
calculated by dividing adjusted EBITDA by the weighted average
number of common shares outstanding.
3 Months Ended December 31
Pipelines
Facilities
Marketing &
New Ventures
Corporate &
Inter-segment
Eliminations
Total
($ millions, except per share amounts)
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Earnings (loss) before income tax
677
295
143
145
204
96
(209)
(206)
815
330
Adjustments to share of profit from equity
accounted investees and other
45
41
135
107
6
—
—
—
186
148
Net finance cost
6
6
3
(8)
(4)
6
111
109
116
113
Depreciation and amortization
109
104
46
34
12
10
11
14
178
162
Unrealized (gain) loss on
commodity-related derivative financial instruments
—
—
—
(2)
(46)
61
—
—
(46)
59
Impairment reversal
(231)
—
—
—
—
—
—
—
(231)
—
Gain on disposal of assets, transaction
costs incurred in respect of acquisitions and non-cash
provisions
11
102
(3)
12
1
(2)
6
1
15
113
Adjusted EBITDA
617
548
324
288
173
171
(81)
(82)
1,033
925
Adjusted EBITDA per common share – basic
(dollars)
1.87
1.68
12 Months Ended December 31
Pipelines
Facilities
Marketing &
New Ventures
Corporate &
Inter-segment
Eliminations
Total
($ millions, except per share amounts)
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Earnings (loss) before income tax
1,840
1,415
610
1,804
435
708
(696)
(708)
2,189
3,219
Adjustments to share of profit from equity
accounted investees and other
172
172
438
271
84
25
—
—
694
468
Net finance costs
28
28
9
13
4
27
425
418
466
486
Depreciation and amortization
414
396
159
196
46
44
44
47
663
683
Unrealized loss (gain) on
commodity-related derivative financial instruments
—
—
—
(50)
32
(83)
—
—
32
(133)
Gain on PGI Transaction
—
—
—
(1,110)
—
—
—
—
—
(1,110)
Impairment reversal
(231)
—
—
—
—
—
—
—
(231)
—
Transaction costs incurred in respect of
acquisitions, transformation and restructuring costs, contract
dispute settlement, gain on disposal of assets and non-cash
provisions
11
116
(3)
13
(4)
—
7
4
11
133
Adjusted EBITDA
2,234
2,127
1,213
1,137
597
721
(220)
(239)
3,824
3,746
Adjusted EBITDA per common share – basic
(dollars)
6.95
6.78
Adjusted EBITDA from Equity Accounted
Investees
In accordance with IFRS, Pembina's jointly controlled
investments are accounted for using equity accounting. Under equity
accounting, the assets and liabilities of the investment are
presented net in a single line item in the Consolidated Statement
of Financial Position, "Investments in Equity Accounted Investees".
Net earnings from investments in equity accounted investees are
recognized in a single line item in the Consolidated Statement of
Earnings and Comprehensive Income "Share of Profit from Equity
Accounted Investees". The adjustments made to earnings, in adjusted
EBITDA above, are also made to share of profit from investments in
equity accounted investees. Cash contributions and distributions
from investments in equity accounted investees represent Pembina's
share paid and received in the period to and from the investments
in equity accounted investees.
To assist in understanding and evaluating the performance of
these investments, Pembina is supplementing the IFRS disclosure
with non-GAAP proportionate consolidation of Pembina's interest in
the investments in equity accounted investees. Pembina's
proportionate interest in equity accounted investees has been
included in adjusted EBITDA.
3 Months Ended December 31
Pipelines
Facilities
Marketing &
New Ventures
Total
($ millions)
2023
2022
2023
2022
2023
2022
2023
2022
Share of profit (loss) from equity
accounted investees
31
44
48
49
15
(14)
94
79
Adjustments to share of profit from equity
accounted investees:
Net finance costs (income)
7
5
84
37
—
(1)
91
41
Income tax (recovery) expense
—
—
(13)
13
—
—
(13)
13
Depreciation and amortization
38
36
60
39
6
7
104
82
Unrealized loss (gain) on
commodity-related derivative financial instruments
—
—
7
11
—
(6)
7
5
Transaction costs incurred in respect of
acquisitions and non-cash provisions
—
—
(3)
7
—
—
(3)
7
Total adjustments to share of profit from
equity accounted investees
45
41
135
107
6
—
186
148
Adjusted EBITDA from equity accounted
investees
76
85
183
156
21
(14)
280
227
12 Months Ended December 31
Pipelines
Facilities
Marketing &
New Ventures
Total
($ millions)
2023
2022
2023
2022
2023
2022
2023
2022
Share of profit (loss) from equity
accounted investees
109
171
233
108
(26)
82
316
361
Adjustments to share of profit from equity
accounted investees:
Net finance costs
22
23
160
79
1
—
183
102
Income tax expense
—
—
41
14
—
—
41
14
Depreciation and amortization
150
149
207
138
25
25
382
312
Unrealized loss on commodity-related
derivative financial instruments
—
—
16
27
—
—
16
27
Transaction costs incurred in respect of
acquisitions and non-cash provisions
—
—
14
13
58
—
72
13
Total adjustments to share of profit from
equity accounted investees
172
172
438
271
84
25
694
468
Adjusted EBITDA from equity accounted
investees
281
343
671
379
58
107
1,010
829
Adjusted Cash Flow from Operating
Activities and Adjusted Cash Flow from Operating Activities per
Common Share
Adjusted cash flow from operating activities is a non-GAAP
financial measure which is defined as cash flow from operating
activities adjusting for the change in non-cash operating working
capital, adjusting for current tax and share-based compensation
payment, and deducting preferred share dividends paid. Adjusted
cash flow from operating activities deducts preferred share
dividends paid because they are not attributable to common
shareholders. The calculation has been modified to include current
tax and share-based compensation payment as it allows management to
better assess the obligations discussed below.
Management believes that adjusted cash flow from operating
activities provides comparable information to investors for
assessing financial performance during each reporting period.
Management utilizes adjusted cash flow from operating activities to
set objectives and as a key performance indicator of the Company's
ability to meet interest obligations, dividend payments and other
commitments.
Adjusted cash flow from operating activities per common share is
a non-GAAP ratio which is calculated by dividing adjusted cash flow
from operating activities by the weighted average number of common
shares outstanding.
3 Months Ended December
31
12 Months Ended December
31
($ millions, except per share amounts)
2023
2022
2023
2022
Cash flow from operating activities
880
947
2,635
2,929
Cash flow from operating activities per
common share – basic (dollars)
1.60
1.72
4.79
5.30
Add (deduct):
Change in non-cash operating working
capital
(54)
(220)
210
(177)
Current tax expense
(54)
18
(325)
(227)
Taxes paid, net of foreign exchange
49
28
236
334
Accrued share-based payment expense
(44)
(51)
(67)
(117)
Share-based compensation payment
—
—
77
45
Preferred share dividends paid
(30)
(32)
(120)
(126)
Adjusted cash flow from operating
activities
747
690
2,646
2,661
Adjusted cash flow from operating
activities per common share – basic (dollars)
1.36
1.25
4.81
4.82
Proportionately Consolidated
Debt-to-Adjusted EBITDA
Proportionately Consolidated Debt-to-Adjusted EBITDA is a
non-GAAP ratio that management believes is useful to investors and
other users of Pembina’s financial information in the evaluation of
the Company’s debt levels and creditworthiness.
As at December 31
($ millions, except as noted)
2023
2022
Loans and borrowings (current)
650
600
Loans and borrowings (non-current)
9,253
9,405
Loans and borrowings of equity accounted
investees
2,805
3,366
Proportionately consolidated debt
12,708
13,371
Adjusted EBITDA
3,824
3,746
Proportionately consolidated
debt-to-adjusted EBITDA (times)
3.3
3.6
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240222955162/en/
Investor Relations (403) 231-3156 1-855-880-7404 e-mail:
investor-relations@pembina.com www.pembina.com
Grafico Azioni Pembina Pipeline (NYSE:PBA)
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Grafico Azioni Pembina Pipeline (NYSE:PBA)
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