All financial figures
are in Canadian dollars unless otherwise noted. This news release
refers to certain financial measures that are not defined by
Generally Accepted Accounting Principles ("GAAP"), including net
revenue; adjusted earnings before interest, taxes, depreciation and
amortization ("adjusted EBITDA"); cash flow from operating
activities per common share; adjusted cash flow from operating
activities; and adjusted cash flow from operating activities per
common share. For more information see "Non-GAAP Measures"
herein.
|
CALGARY, AB, Aug. 5, 2021 /CNW/ - Pembina Pipeline
Corporation ("Pembina" or the "Company") (TSX: PPL) (NYSE: PBA)
announced today its financial and operating results for the second
quarter of 2021.
Highlights
- Updated 2021 adjusted EBITDA guidance range by raising the low
end; adjusted EBITDA is now expected to be $3.3 to $3.4
billion
- Second quarter and year-to-date adjusted EBITDA of $778 million and $1.6
billion
- Volumes across Pembina's pipeline systems and facilities
continue to rise, reflecting the impact of higher commodity prices
and strong Western Canadian Sedimentary Basin fundamentals
- The second quarter was highlighted by the announcement of three
transformational partnerships, including a partnership with the
Haisla Nation to develop the proposed Cedar LNG Project and Chinook
Pathways, a partnership with Western Indigenous Pipeline Group to
pursue ownership of the Trans Mountain Pipeline, as well as a
vision for the Alberta Carbon Grid
- Terminated arrangement agreement with Inter Pipeline on
July 25 and subsequently received a
$350 million termination fee
Financial and Operational Overview
|
3 Months Ended
June 30
|
6 Months Ended
June 30
|
($ millions,
except where noted)(unaudited)
|
2021
|
2020(3)
|
2021
|
2020(3)
|
Infrastructure and
other services revenue
|
739
|
707
|
1,484
|
1,455
|
Product sales
revenue
|
1,215
|
561
|
2,515
|
1,484
|
Total
revenue
|
1,954
|
1,268
|
3,999
|
2,939
|
Net
revenue(1)
|
894
|
776
|
1,893
|
1,641
|
Earnings
|
254
|
258
|
574
|
577
|
Earnings per common
share – basic & diluted (dollars)
|
0.39
|
0.40
|
0.91
|
0.91
|
Cash flow from
operating activities
|
584
|
642
|
1,040
|
1,052
|
Cash flow from
operating activities per common share – basic
(dollars)(1)
|
1.06
|
1.17
|
1.89
|
1.91
|
Adjusted cash flow
from operating activities(1)
|
538
|
586
|
1,120
|
1,162
|
Adjusted cash flow
from operating activities per common share – basic
(dollars)(1)
|
0.98
|
1.07
|
2.04
|
2.11
|
Common share
dividends declared
|
347
|
347
|
693
|
693
|
Dividends per common
share (dollars)
|
0.63
|
0.63
|
1.26
|
1.26
|
Capital
expenditures
|
146
|
211
|
273
|
694
|
Total volume
(mboe/d)(2)
|
3,500
|
3,427
|
3,491
|
3,468
|
Adjusted
EBITDA(1)
|
778
|
789
|
1,613
|
1,619
|
(1)
|
Refer to "Non-GAAP
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.
|
(3)
|
Comparative 2020
period has been restated. See "Voluntary Change in Accounting
Policy" in Pembina's management's discussion and analysis for the
three and six months ended June 30, 2021 ("MD&A") and Note 2 to
Pembina's unaudited condensed consolidated interim financial
statements as at and for the three and six months ended June 30,
2021 ("Interim Financial Statements").
|
Financial and Operational Overview by Division
|
3 Months Ended
June 30
|
6 Months Ended
June 30
|
|
2021
|
2020
|
2021
|
2020
|
($ millions,
except where noted)
|
Volumes(1)
|
Gross
Profit
|
Adjusted
EBITDA(2)
|
Volumes(1)
|
Gross
Profit(4)
|
Adjusted
EBITDA(2)
|
Volumes(1)
|
Gross
Profit
|
Adjusted
EBITDA(2)
|
Volumes(1)
|
Gross
Profit(4)
|
Adjusted
EBITDA(2)
|
Pipelines
|
2,627
|
341
|
522
|
2,555
|
379
|
540
|
2,607
|
700
|
1,051
|
2,592
|
778
|
1,090
|
Facilities
|
873
|
198
|
270
|
872
|
165
|
250
|
884
|
395
|
539
|
876
|
341
|
506
|
Marketing & New
Ventures(3)
|
—
|
12
|
38
|
—
|
(85)
|
29
|
—
|
85
|
128
|
—
|
72
|
84
|
Corporate
|
—
|
(1)
|
(52)
|
—
|
1
|
(30)
|
—
|
—
|
(105)
|
—
|
2
|
(61)
|
Total
|
3,500
|
550
|
778
|
3,427
|
460
|
789
|
3,491
|
1,180
|
1,613
|
3,468
|
1,193
|
1,619
|
(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.
|
(2)
|
Refer to "Non-GAAP
Measures".
|
(3)
|
Marketed natural gas
liquids ("NGL") volumes are excluded from Volumes to avoid double
counting. Refer to "Marketing & New Ventures Division" in
Pembina's MD&A for further information.
|
(4)
|
Comparative 2020
period has been restated. See "Voluntary Change in Accounting
Policy" in Pembina's MD&A and Note 2 to the Interim Financial
Statements.
|
Financial & Operational Highlights
Adjusted EBITDA
Change in Second Quarter Adjusted EBITDA ($
millions)(1)
(1)
|
Comparative 2020
period has been restated. See "Voluntary Change in Accounting
Policy" in Pembina's MD&A and Note 2 to the Interim Financial
Statements.
|
Pembina reported adjusted EBITDA of $778
million for the second quarter, one percent lower than the
same period in the prior year. Higher margins on NGL and crude oil
sales and the positive impact of higher marketed NGL volumes were
offset by an increase in the realized loss on commodity-related
derivatives. In addition, the year-over-year decrease was largely
due to lower revenue at Edmonton South Rail Terminal, due to an
$11 million non-recurring leasing
adjustment made in the second quarter of 2020; the impact of a
lower U.S. dollar exchange rate; higher power costs, a portion of
which were not recoverable in revenue; and higher general and
administrative expense. These factors were offset by strong
performance from existing assets along with Prince Rupert Terminal,
Empress Infrastructure and Duvernay III being placed into service
in Facilities, and higher interruptible volumes on the Peace
Pipeline system. Higher general & administrative expense was
largely due to higher long-term incentive costs driven by Pembina's
increasing share price in the second quarter of 2021 compared to a
decreasing share price in the second quarter of 2020, partially
offset by a reduction in salaries and wages.
Earnings
Change in Second Quarter Earnings ($
millions)(1)(2)(3)
(1)
|
Comparative 2020
period has been restated. See "Voluntary Change in Accounting
Policy" in Pembina's MD&A and Note 2 to the Interim Financial
Statements.
|
(2)
|
Marketing & New
Ventures results ex. hedging activities includes gross profit for
Marketing & New Ventures less realized and unrealized losses on
commodity-related derivative financial instruments.
|
(3)
|
Other includes other
expenses, impairments and corporate.
|
Pembina reported earnings of $254
million for the second quarter, two percent lower than the
same period in the prior year. In addition to the factors impacting
adjusted EBITDA, as noted above, earnings were positively impacted
by a lower unrealized loss on commodity-related derivatives and
lower current tax expense as a result of lower taxable income,
combined with the reduction of the Alberta corporate tax rate from 10 to 8
percent effective July 2020. Earnings in the second quarter
also were negatively impacted by lower income received associated
with the Canadian Emergency Wage Subsidy program, an increase in
acquisition related costs, lower share of profit from Ruby, and an
increase in net finance costs due to second quarter losses on
non-commodity-related derivative financial instruments compared to
gains recognized in the second quarter of 2020.
Cash Flow From Operating Activities
Cash flow from operating activities of $584 million for the second quarter was a
decrease of nine percent over the same period in the prior year.
The decrease was driven primarily by an increase in taxes paid due
to higher tax installments given the COVID-related deferrals in
2020, an increase in net interest paid, and a decrease in operating
results, as discussed above, after adjusting for non-cash items.
These factors were partially offset by a decreased change in
non-cash working capital. On a per share (basic) basis, cash flow
from operating activities for the second quarter also decreased by
nine percent compared to the same period in the prior year due to
the same factors.
Adjusted Cash Flow From Operating Activities
Adjusted cash flow from operating activities of $538 million was eight percent lower compared to
the same period in the prior year. The decrease is due to the same
factors impacting cash flow from operating activities, discussed
above, net of the increase in taxes paid and change in non-cash
working capital, and an increase in accrued share-based payment
expense, driven by Pembina's increasing share price in the second
quarter of 2021 compared to a decreasing share price in the second
quarter of 2020. On a per share (basic) basis, adjusted cash flow
from operating activities for the second quarter also decreased by
eight percent due to the same factors.
Volumes
Total volumes of 3,500 mboe/d for the second quarter represents
an approximately two percent increase over the same period in the
prior year. The increase was the result of higher volumes in
Pipelines, as discussed in further detail below.
Divisional Highlights
- Pipelines reported adjusted EBITDA for the second quarter of
$522 million, representing a three
percent decrease compared to the same period in the prior year. The
decrease was largely a result of lower revenue at Edmonton South
Rail Terminal due to a lease-related adjustment during the second
quarter of 2020; a lower U.S. dollar exchange rate; and increased
operating expenses due to higher integrity spending and higher
power costs, a portion of which were not recoverable in revenue.
These factors were partially offset by higher interruptible volumes
on Peace Pipeline and Cochin Pipeline.
Pipelines volumes of 2,627 mboe/d in the second quarter represent a
three percent increase compared to the same period in the prior
year. The increase largely was driven by higher interruptible
volumes on Peace Pipeline and Cochin Pipeline as well as higher
seasonal volumes on Alliance Pipeline. These increases were offset
by lower interruptible volumes on Vantage Pipeline, as market
conditions exist for end users to source their supply from the
Redwater Complex, and lower volumes on Ruby Pipeline due to
contract expirations.
- Facilities reported adjusted EBITDA of $270 million for the second quarter, which
represents an eight percent increase over the same period in the
prior year. The increase was primarily due to the contribution from
Empress Infrastructure and Duvernay III, which were placed into
service in the fourth quarter of 2020, and Prince Rupert Terminal
and Veresen Midstream's Hythe Developments, which were placed into
service in March 2021.
Facilities volumes of 873 mboe/d in the second quarter were
consistent with the same period in the prior year. Increased
revenue volumes associated with Duvernay III being placed into
service in the fourth quarter of 2020 were largely offset by lower
supply volumes on the East NGL System, as these volumes are now
being processed at Empress NGL Extraction Facility.
- Marketing & New Ventures reported second quarter adjusted
EBITDA of $38 million, consistent
with the same period in the prior year. Higher margins were
realized on NGL and crude oil sales as a result of the higher NGL
and crude oil prices during the second quarter of 2021 and higher
marketed NGL volumes. This was largely offset by the realized loss
on commodity-related derivatives, due to higher NGL and crude oil
market prices, compared to a realized gain in the same period in
the prior year. Additionally, in 2020, the majority of storage
margins were earned in the second quarter, whereas in 2021, storage
margins are being realized evenly throughout the year. Excluding
the impact of realized hedging losses, second quarter adjusted
EBITDA increased $78 million over the
same period in the prior year.
Marketed NGL volumes of 173 mboe/d in the second quarter represents
an 11 percent increase compared to the same period in the prior
year. Marketed NGL volumes increased as sales have returned to
pre-pandemic levels compared to the second quarter of 2020 when
Pembina built up storage positions due to lower commodity prices,
combined with increased volumes at Aux Sable.
Executive Overview
We continue to see considerable positive momentum in our
business including a second quarter highlighted by exciting
developments charting Pembina's future path. A combination of
rising volumes across many parts of our business, project
reactivations, a more than $5 billion
development portfolio of highly probable and highly economic growth
projects, and a number of transformational announcements
demonstrate that Pembina remains very well positioned.
Recent Activity & Guidance Update
Activity in the Western Canadian Sedimentary Basin ("WCSB")
continues to benefit from strengthening commodity prices across all
the products within Pembina's integrated value chain – crude oil,
condensate, natural gas, and natural gas liquids – and this has
enhanced our confidence in our 2021 outlook. Based on
year-to-date results and the outlook for the remainder of the year,
Pembina has updated its 2021 Adjusted EBITDA guidance range to
$3.3 to $3.4
billion. Relative to Pembina's initial guidance, the
revised outlook for the full year is based on stronger than
expected fundamental marketing results, as a result of
significantly higher NGL prices and higher marketed NGL volumes,
partially offset by significant realized hedging losses. Further,
the positive impact from modestly higher volumes across many of
Pembina's pipeline systems and facilities is being partially offset
by a number of factors including a stronger than expected Canadian
dollar relative to the U.S. dollar, higher operating costs and
integrity spending in the conventional and oil sands pipelines
businesses, and lower contributions from certain assets. In
addition, the revised outlook reflects higher general and
administrative expense due to Pembina's rising share price and the
resulting increase in long-term incentive compensation costs.
The Company has hedged approximately 50 percent of its 2021 frac
spread exposure, excluding Aux Sable, with these hedges having been
systematically entered into throughout 2019 and 2020.
Further, the Company has now hedged approximately 25 percent of its
2022 frac spread exposure, excluding Aux Sable, and expects to
reach its target of 50 percent by the end of the third quarter of
2021.
Stronger commodity prices and rising volumes mean Pembina's
customers are in ever-better financial positions, generating
significant free cash flow and improving their balance sheets, with
many reaching their leverage targets earlier than expected. This
sets the stage, we believe, for increased drilling activity and
increased capital spending by producers into 2022, with positive
implications for Pembina's business.
A positive outlook for the WCSB and customer demand for
incremental service led to the reactivation during the quarter of
Phase IX Peace Pipeline Expansion ("Phase IX") to support
customers' long-term development plans while furthering product
segregation on the Peace Pipeline system. Further decisions on
Phase VIII Peace Pipeline Expansion and Prince Rupert Terminal
Expansion are expected later this year and early next year,
respectively. The same outlook also supports our confidence in the
development of a portfolio of growth projects totaling more than
$5 billion with compelling rates of
return.
Termination of Proposed Inter Pipeline Transaction
On July 25, Pembina terminated the
arrangement agreement providing for the proposed acquisition by
Pembina of Inter Pipeline Ltd. ("Inter Pipeline"). In
connection with the termination, Inter Pipeline subsequently paid
Pembina the $350 million termination
fee provided for in the agreement.
The industrial logic of a combined Pembina and Inter Pipeline
remains unparalleled and the value creation between certain of our
assets is impossible to replicate by any other entity. While we are
disappointed with this outcome, we will continue to seek
opportunities for growth through focused acquisitions. Pembina
remains optimistic about its future, including the profitability of
our existing business given foreseeable sector tailwinds, as well
as with tremendous flexibility to pursue an ever increasing and
more diverse set of opportunities for growth, some of which we were
able to highlight and advance during this process.
Transformational Partnerships and ESG
Pembina recently announced three significant and
transformational partnerships that combine fundamentally strong
business opportunities with compelling environmental, social and
governance ("ESG") attributes: a partnership with the Haisla Nation
to develop the proposed Cedar LNG Project; a partnership with TC
Energy Corporation to jointly develop the Alberta Carbon Grid, a
world-scale carbon transportation and sequestration system; and
Chinook Pathways, a partnership with Western Indigenous Pipeline
Group to pursue ownership of the Trans Mountain Pipeline, following
completion of the construction of the Trans Mountain Expansion
project. Collectively, these partnerships support Pembina's global
market access strategy, allow for meaningful Indigenous
participation in Canadian energy development, and provide an
important large-scale infrastructure platform needed for
Alberta-based industries to
effectively manage their greenhouse gas emissions and contribute
positively to a lower-carbon economy. Together they will
further enable the responsible development of Canadian energy,
strengthening Canada's reputation
and providing a decades-long runway to continued development of oil
and gas resources that the world needs. We are proud of our
work with our communities and our role in creating meaningful
solutions that can deliver results that matter.
In closing, what has emerged over the course of an exciting past
few months reflects continued progress towards a clear vision for
Pembina's future. Our ambitions are being realized and we look
forward to continuing to build out our diversified and integrated
value chain, providing an exceptional customer service offering,
including global market access for their products. At the same
time, we remain committed to providing industry-leading total
shareholder returns, including a stable and growing dividend, and
furthering our ESG strategy in service of our employees,
communities, customers and investors.
Projects and New Developments(1)
Pipelines:
- During the quarter, Pembina reactivated Phase IX, which will
add capacity in the northwest Alberta-to-Gordondale, Alberta corridor to accommodate increased
activity in the northeast British
Columbia ("NEBC") Montney
play. The project has a revised estimated cost of approximately
$120 million, which reflects the
addition of a Wapiti-to-Kakwa corridor pump station offset by cost
savings identified through value engineering. Phase IX has an
expected in-service date in the second half of 2022.
- Pembina continues to progress its Phase VII Peace Pipeline
Expansion ("Phase VII"), which includes a new 20-inch,
approximately 220 km pipeline and two new pump stations or terminal
upgrades. Phase VII will add approximately 160,000 barrels per day
of incremental capacity upstream of Fox
Creek, accessing capacity available on the mainlines
downstream of Fox Creek. All major
procurement activities were completed by the end of the second
quarter and construction is underway and progressing according to
schedule. The project has a capital budget of $775 million and has an expected in-service date
in the first half of 2023.
- The previously announced Phase VIII Peace Pipeline Expansion
("Phase VIII") remains deferred. Initial contracts supporting the
project remain intact and customers continue to signal plans which
will necessitate the incremental capacity. Value engineering work
is ongoing and Pembina continues to evaluate this project in
discussions with its producing customers with a reactivation
decision expected in the fourth quarter of 2021.
- In support of Phase IX and the potential reactivation of Phase
VIII, Pembina has entered into an exclusivity agreement with, and
concurrently provided an irrevocable offer for, midstream services
to a premiere NEBC Montney producer. The exclusivity agreement
provides a bridge to negotiation of definitive agreements for
transportation and fractionation of a material volume of liquids
and NGL mix from certain NEBC Montney lands. Pembina and the
producer will work together over the next few months to develop and
execute definitive agreements by the end of 2021. All new firm
transportation and fractionation services provided under the
proposed arrangement would be supported by long-term, take-or-pay
agreements. Prior to deferral, Phase VIII had an associated capital
cost of approximately $500 million
but Pembina expects this level of investment to decrease given cost
and scope improvements.
Facilities:
- Pembina continues to progress Empress Cogeneration Facility.
The facility will use natural gas to generate up to 45 megawatts of
electrical power, reducing overall operating costs by providing
power and heat to the existing Empress NGL Extraction Facility. All
the power will be consumed on site, supplying approximately 90
percent of the site's power requirements. Further, this project
will contribute to annual greenhouse gas emission reductions at
Empress NGL Extraction Facility through the utilization of
co-generation waste heat and low-emission power generated. Pembina
anticipates a reduction of approximately 90,000 tonnes of carbon
dioxide equivalent per year based on the current energy demand of
Empress NGL Extraction Facility. Construction commenced in
May 2021. The project has a capital
budget of $120 million with an
expected in-service date in the fourth quarter of 2022.
- Prince Rupert Terminal Expansion remains deferred. Engineering
of the expansion is well advanced and Pembina expects to make a
final investment decision in the first quarter of 2022.
Marketing & New Ventures:
- Pembina's New Ventures group continues to advance business
opportunities in petrochemicals, liquefied natural gas ("LNG") and
low-carbon energy. New Ventures is focused on developing
opportunities that integrate into Pembina's core businesses, while
progressing projects that will extend Pembina's value-chain and
benefit stakeholders. During the second quarter of 2021, Pembina
announced a strategic partnership agreement with the Haisla First
Nation to develop the proposed Cedar LNG Project, a floating LNG
facility strategically positioned to leverage Canada's abundant natural gas supply and
British Columbia's growing LNG
infrastructure to produce industry-leading low–carbon, low-cost
Canadian LNG for overseas markets. The Cedar LNG Project will be
the largest First Nation-owned infrastructure project in
Canada and will have one of the
cleanest environmental profiles in the world. In addition, during
the quarter, Pembina and TC Energy Corporation announced their
intention to jointly develop the Alberta Carbon Grid, a world-scale
carbon transportation and sequestration system, which will enable
Alberta-based industries to
effectively manage their greenhouse gas emissions, contribute
positively to Alberta's
lower-carbon economy and create sustainable long-term value for
Pembina and TC Energy stakeholders.
Financing
- On June 1, 2021, Pembina redeemed
all of the 10 million issued and outstanding Cumulative Redeemable
Minimum Rate Reset Class A Preferred Shares, Series 13 (the "Series
13 Class A Preferred Shares") for a redemption price equal to
$25.00 per Series 13 Class A
Preferred Shares.
- On April 28, 2021, DBRS Limited
upgraded its ratings to 'BBB (high)' in respect of Pembina's senior
unsecured medium-term notes, 'BBB (low)' in respect of Pembina's
Fixed-to-Fixed Rate Subordinated Hybrid Notes (the "Series 1
Subordinated Notes") and 'Pfd-3 (high)' in respect of each issued
series of Pembina's Class A Preferred Shares, other than the Class
A Preferred Shares, Series 2021-A, which are deliverable to the
holders of the Series 1 Subordinated Notes following the occurrence
of certain bankruptcy or insolvency events in respect of
Pembina.
- During the quarter, Pembina extended its revolving and
operating credit facilities to June
2026 and May 2022,
respectively.
Dividends
- Pembina declared and paid dividends of $0.21 per common share in April, May and
June 2021 for the applicable record
dates.
- Pembina declared and paid quarterly dividends per Class A
Preferred Share of: Series 1: $0.306625; Series 3: $0.279875; Series 5: $0.285813; Series 7: $0.27375; Series 9: $0.268875; Series 13: $0.359375; and Series 21: $0.30625 to shareholders of record as of
May 3, 2021. Pembina also declared
and paid quarterly dividends per Class A Preferred Share of: Series
15: $0.279; Series 17: $0.301313; and Series 19: $0.29275 to shareholders of record on
June 15, 2021. Pembina also declared
and paid quarterly dividends per Class A Preferred Share of Series
23: $0.328125; and Series 25:
$0.3250 to shareholders of record on
April 30, 2021.
Second Quarter 2021 Conference Call & Webcast
Pembina will host a conference call on Friday, August 6, 2021 at 8:00 a.m. MT (10:00 a.m.
ET) for interested investors, analysts, brokers and media
representatives to discuss results for the second quarter of 2021.
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 August 13, 2021 at
11:59 p.m. ET. To access the replay,
please dial either 416-849-0833 or 855-859-2056 and enter the
password 3757059.
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://produceredition.webcasts.com/starthere.jsp?ei=1354428&tp_key=2545fc3b28
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 is a leading transportation and midstream service
provider that has been serving North America's energy
industry for more than 65 years. Pembina owns an integrated system
of pipelines that transport various hydrocarbon liquids and natural
gas products produced primarily in western Canada. The Company
also owns gas gathering and processing facilities; an oil and
natural gas liquids infrastructure and logistics business; and is
growing an export terminals 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
identifying additional opportunities to connect hydrocarbon
production to new demand locations through the development of
infrastructure that would extend Pembina's service offering even
further along the hydrocarbon value chain. These new developments
will contribute to ensuring that hydrocarbons produced in the
Western Canadian Sedimentary Basin and the other basins where
Pembina operates can reach the highest value markets throughout the
world.
Purpose of Pembina:
- To be the leader in delivering integrated infrastructure
solutions connecting global markets:
- Customers choose us first for reliable and value-added
services;
- Investors receive sustainable industry-leading total
returns;
- Employees say we are the 'employer of choice' and value
our safe, respectful, collaborative and fair work culture; and
- Communities welcome us and recognize the net positive
impact of our social and environmental commitment.
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 Information and Statements
This document 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", "schedule", "will", "expects",
"estimate", "potential", "planned", "future", "outlook",
"strategy", "protect", "trend", "commit", "maintain", "focus",
"ongoing", "believe" 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
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, including outlooks related thereto;
expectations about future demand for Pembina's infrastructure and
services; expectations relating to new infrastructure projects,
including the benefits therefrom and timing thereof; Pembina's
sustainability, climate change and environmental, social and
governance plans, initiatives and strategies; planning,
construction, capital expenditure estimates, schedules, locations,
expected capacity, incremental volumes, completion and in-service
dates, rights, activities and operations with respect to the
construction of, 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 projects
on its future financial performance and stakeholders; pipeline,
processing, fractionation and storage facility and system
operations and throughput levels; the expected benefits from
Pembina's agreements; decisions and activities related to deferred
projects; budget trends; the impact of current and expected market
conditions on Pembina; expectations regarding adjusted EBITDA;
expected sources of liquidity; expected cost savings and Pembina's
ability to maintain such cost savings into the future; expected
volumes across Pembina's conventional pipelines business; levels
and types of contracted volumes; Pembina's options for allocating
capital; plans and expectations relating to hedging; expectations
regarding the repurchase and redemption of shares and the timing
thereof; and expected future cash flows and the sufficiency thereof
to fund Pembina's capital program.
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; prevailing commodity prices, interest rates, carbon
prices, tax rates and exchange rates; 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
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; 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, climate change
initiatives or policies or increased environmental regulation; the
ability of Pembina to acquire or develop the necessary
infrastructure in respect of future development projects;
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; risks
relating to the current and potential adverse impacts of the
COVID-19 pandemic; constraints on the, or the unavailability of,
adequate infrastructure; the political environment in North
American and elsewhere, and public opinion; the ability to access
various sources of debt and equity capital; changes in credit
ratings; counterparty credit risk; technology and cyber security
risks; natural catastrophes; 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. Management approved
the 2021 adjusted EBITDA guidance contained herein as of the date
of this press release. The purpose of our adjusted EBITDA guidance
is to assist readers in understanding our expected and targeted
financial results, and this information may not be appropriate for
other purposes. 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,
adjusted earnings before interest, taxes, depreciation and
amortization (adjusted EBITDA), cash flow from operating activities
per common share, adjusted cash flow from operating activities, and
adjusted cash flow from operating activities per common share,
which do not have any standardized meaning under International
Financial Reporting Standards ("IFRS"). Since these 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 be clearly defined,
qualified and reconciled to their most directly comparable GAAP
measure. 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 performance to investors and analysts and the
measures do not have any standardized meaning under IFRS. The
measures should not, therefore, be considered in isolation or used
in substitute for measures of performance prepared in accordance
with IFRS.
Other issuers may calculate these non-GAAP measures
differently. Investors should be cautioned that these measures
should not be construed as alternatives to revenue, earnings, cash
flow from operating activities, gross profit or other measures of
financial results determined in accordance with GAAP as an
indicator of Pembina's performance. For additional information
regarding these non-GAAP measures, including reconciliations to,
the most directly comparable measures recognized by GAAP, please
refer to Pembina's MD&A for the three and six months ended
June 30, 2021, which is available
online at www.sedar.com, www.sec.gov and through Pembina's website
at www.pembina.com.
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SOURCE Pembina Pipeline Corporation