Energia
Pembina Pipeline Corporation Reports Third Quarter Results
CALGARY, Alberta , Nov. 1, 2019 /CNW/ - Pembina Pipeline Corporation (" Pembina " or the "Company") (TSX: PPL; NYSE: PBA) announced today its financial and operating results for the third quarter of 2019.
The highlight of the quarter was the announcement of the approximately $4.35 billion acquisition of Kinder Morgan Canada and the U.S. portion of the Cochin Pipeline. This acquisition is highly strategic for Pembina , providing enhanced integration with our existing franchise, extension of our value chain and clear visibility to creating long-term value for our shareholders. It represents an ideal opportunity to continue building on our low-risk, long-term, fee-for-service business model while extending our reach into the U.S. through a highly desirable cross-border pipeline. Further, it will enhance our diversification, as well as Pembina's customer service offering as a leading provider of integrated services to hydrocarbon producers in Western Canada .
This transaction strengthens the quality of Pembina's adjusted EBITDA, is accretive to adjusted cash flow per share and fits squarely within Pembina's financial guardrails. Combined, these factors give us confidence to increase our monthly dividend by $0.01 per share upon close of the transaction. We are making progress on satisfying the closing conditions and look forward to the December 10, 2019 Kinder Morgan Canada shareholder vote. Our teams are busy preparing for closing which we currently expect will occur in the first quarter of 2020.
As discussed below under Projects and New Developments, Pembina has approved the first stage of the Phase IX Peace Pipeline Expansion. Since our Phase VIII announcement earlier this year we have continued to secure additional long-term contracts with producers operating in the northeast BC Montney. With the addition of Phase IX to our portfolio we now have approximately $1.8 billion of Peace Pipeline expansions underway. Phase IX largely completes our vision of full product segregation across the Peace Pipeline System, which will drive operational and capital efficiencies, strengthen Pembina's competitive advantage and ultimately benefit our customers.
Pipelines and Facilities are constructing $3.2 billion of capital projects, which in aggregate are trending on budget.
Pipelines:
Facilities:
Marketing & New Ventures:
On August 21, 2019 , Pembina announced that it had entered into agreements to acquire Kinder Morgan Canada Limited ("Kinder Morgan Canada") (the "Corporate Acquisition") and the U.S. portion of the Cochin Pipeline system ("Cochin US") from Kinder Morgan , Inc. for a total purchase price of approximately $4.35 billion (the "Kinder Acquisition"). The transaction values Kinder Morgan Canada at approximately $2.3 billion (including the assumption of Kinder Morgan Canada's outstanding preferred shares and outstanding debt) and Cochin US at approximately $2.05 billion . On September 10, 2019 , Pembina and Kinder Morgan Canada announced they had agreed to amend and restate the previously announced arrangement agreement in respect of the Corporate Acquisition to provide for the exchange of the preferred shares of Kinder Morgan Canada for preferred shares of Pembina with substantially the same terms, subject to approval by the preferred shareholders of Kinder Morgan Canada. Completion of the Kinder Acquisition is subject to the approval of common shareholders of Kinder Morgan Canada and clearance under the Competition Act ( Canada ). The Kinder Acquisition is not subject to the approval of the Kinder Morgan Canada preferred shareholders. Pembina has received early termination from the U.S. Federal Trade Commission pursuant to the Hart-Scott-Rodino Act and clearance under the Canada Transportation Act. Pembina currently expects the Kinder Acquisition will close in the first quarter of 2020, subject to receipt of the remaining approvals. Upon closing of the Kinder Acquisition, Pembina intends to increase its monthly dividend by $0.01 per common share.
Based on year-to-date results and the outlook for the remainder of the year, Pembina has revised its adjusted EBITDA guidance range to $2.95 - $3.05 billion . Further, current income tax expense in 2019 is now anticipated to be $250 to $270 million , with the increase over prior guidance related to higher taxable income in the current year and adjustments to prior period tax deductions.
As previously announced, on September 12, 2019 , Pembina closed an offering of $1.5 billion of senior unsecured medium-term notes. The offering was conducted in three tranches consisting of $600 million in senior unsecured medium-term notes, series 14, having a fixed coupon of 2.56 percent per annum, paid semi-annually, and maturing on June 1, 2023; $600 million in senior unsecured medium-term notes, series 15, having a fixed coupon of 3.31 percent per annum, paid semi-annually, and maturing on February 1, 2030; and $300 million issued through a re-opening of the Company's senior unsecured medium-term notes, series 13, having a fixed coupon of 4.54 percent per annum, paid semi-annually, and maturing on April 3, 2049.
Pembina will host a conference call on Friday, November 1, 2019 at 8:00 a.m. MT ( 10:00 a.m. ET ) for interested investors, analysts, brokers and media representatives to discuss details related to the third quarter 2019 results. The conference call dial-in numbers for Canada and the U.S. are 647-427-7450 or 888-231-8191. A recording of the conference call will be available for replay until November 8, 2019 at 11:59 p.m. ET . To access the replay, please dial either 416-849-0833 or 855-859-2056 and enter the password 9883147.
A live webcast of the conference call can be accessed on Pembina's website at pembina.com under Investor Centre/ Presentation & Events, or by entering:
https://event.on24.com/wcc/r/1880629/78775B9D629B9E21ED15FAE6CEBCA656 in your web browser. Shortly after the call, an audio archive will be posted on the website for a minimum of 90 days.
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.
2019
2019 a 2019.
Investor Relations: Scott Arnold , Manager Investor Relations, (403) 231-3156, 1-855-880-7404, E-mail: investor-relations@pembina.com, www.pembina.com