Pembina Pipeline Corporation · TSX:PPL
Pembina Pipeline — Investor Day (May 2019)
113 slides from Pembina Pipeline's investor day presentation, May 14, 2019
Slide 1: Pembina Pipeline Corporation Investor Day
Pembina Pipeline Corporation TSX: PPL | NYSE: PBA Investor Day May 14, 2019
Slide 2: Forward-looking statements and information
Forward-looking statements and information This presentation contains certain forward-looking growth projects (including the ability to finance such projects materials; the ability to finance projects on advantageous statements and information that are based on Pembina's on favorable terms); future
Slide 3: Non-GAAP measures
Non-GAAP measures In this presentation, Pembina has used the terms adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA), Adjusted EBITDA per common share, adjusted cash flow from operating activities, and adjusted cash flow from operating activities per common sh
Slide 4: Presenting team and agenda
Presenting team and agenda Mick Dilger Jaret Sprott Jason Wiun Stuart Taylor Scott Burrows President & Senior Vice President & Senior Vice President & Senior Vice President, Senior Vice President & Chief Executive Officer Chief Operating Officer, Chief Operating Officer, Marketing and New Chief Fina
Slide 5: Introduction
Introduction
Slide 6: Highlights since last Investor Day
Highlights since last Investor Day • Pembina employees and contractors worked ~7 million hours in 2018 and achieved strong performance Safety against both internal and external benchmarks • Record annual Pipelines volumes(1) of ~2,500 mboe/d and Facilities volumes(1) of ~900 mboe/d Operational • Pla
Slide 7: Purpose of Pembina
Purpose of Pembina
Slide 8: Purpose of Pembina
Purpose of Pembina Stakeholders Customers choose us first Investors receive sustainable for reliable and value-added industry-leading total returns services Employees say we are the Communities welcome us and ‘employer of choice’ and recognize the net positive value our safe, respectful, impact of o
Slide 9: Employees Communities
Employees Communities
Slide 10: Employees say we are the employer of choice
Employees say we are the 'employer of choice' and value our safe, respectful, collaborative and fair work culture Employee summary (1) Recognized for being a top employer Total employees Location 2018 2010 430 46% 54% Field Head Office ~2,200 Employee recordable injury rates per 200,000 hours worked
Slide 11: Communities welcome us and recognize the net positive impact
Communities welcome us and recognize the net positive impact of our social and environmental commitment We invest in: Community Building $7,500,000 5,500 $4,000,000 Playgrounds, community halls, recreation facilities Invested in 2018 Hours volunteered in 2018 Raised for United Way in 2018 ~$3,400 pe
Slide 12: Sustainability at Pembina
Sustainability at Pembina • In 2018, Pembina released its inaugural Sustainability Report, consolidating and sharing our work in the areas associated with corporate sustainability • Report is rooted in the way we do business, largely aligned with the Purpose of Pembina and a natural evolution of the
Slide 13: Customers Investors
Customers Investors
Slide 14: Pembina has built a large franchise
MONTNEY (Resource Life ~160 years) OIL SANDS (Resource Life ~300 years) DUVERNAY (Resource Life ~400 years) Pembina has built a large franchise allowing is to deliver safe, reliable, integrated and cost-effective customer service Source: Scotiabank GBM, BCOGC, NEB, AER, Geoscout. 14
Slide 15: Conventional Pipelines
—— Conventional Pipelines BRITISH ALBERTA SASKATCHEWAN COLUMBIA — Oil Sands Pipelines / —— Transmission Pipelines FORT ST. JOHN ey Ml O FORT MCMURRAY @l Gas Processing Plant C) PRINCE RUPERT LPG x ‘ed a Under Construction Gas Processing Plant Pe il Fractionator il Under Construction Fractionator il
Slide 16: The Pembina Store
The Pembina Store Gas & NGL (HVP) Gas Consumers NGL NGL (proposed) Alliance Mainline Extraction Gathering, 3rd Party Pipeline and Fractionation Processing, Pipelines Field Extraction (Younger, Empress, Aux Sable) Industrial Users C2 C2 C3 C2+ mix C4 3rd Party C3+ mix Pipelines & NGL Prince Rupert PD
Slide 17: Strategic priorities
Strategic priorities 1 Protect the franchise 2 Enhance the franchise 3 Access global markets • Safe, reliable and cost-effective • Focus on being better, not just • Enhance the value of operations bigger Pembina’s existing assets • Fill capacity and optimize the • Growth within the strategic • Stren
Slide 18: Pembina's Financial guardrails
Financial guardrails Maintain target of 80% fee-based contribution 1 to Adjusted EBITDA(1) Pembina’s 2 Target <100% payout of fee-based distributable cash flow Financial (Standard Payout Ratio) Guardrails Target 75% credit exposure from investment 3 grade and secured counterparties Maintain strong B
Slide 19: Strategic investment criteria
Strategic investment criteria Structural Diversification Alignment Customer Longevity Reputation Profitability Scale & Commercial Manageable Resource Risk & Return Risk Intensity Integration Expertise Market Access Potential Scarcity Financeability Strategic investment criteria will remain the guidi
Slide 20: Our approach to capital allocation
Our approach to capital allocation… Use of capital Considerations 10 year track record • Dividend policy centered around: • Paid $6B in dividends(1) 1. Fee-based cash flow coverage Dividends • 4% average annual growth 2. Organic investment requirements • No dividend cut 3. Consistency and sustainabi
Slide 21: Proportionately consolidated capital in service
…has a strong track record of value creation Per share growth ROIC and capital in-service Infrastructure build out Increased utilization Commodity downturn 12.0% $30,000 $6.00 Proportionately consolidated capital in service ($MM) $5.00 10.0% $25,000 $4.00 8.0% $20,000 ROIC % $/share $3.00 6.0% $15,0
Slide 22: How Pembina makes money across the commodity cycle
How Pembina makes money across the commodity cycle Natural gas Natural gas liquids Crude oil and condensate High price • Volume increases on: • Marketing • Conventional Pipelines (No arbitrage) › Transmission Pipelines • Drives volumes on: • Oil Sands & Heavy Oil › Gas Services › Gas Services Pipeli
Slide 23: WCSB Commodity Overview
WCSB Commodity Overview
Slide 24: Crude oil & natural gas
Crude oil & natural gas Western Canadian gas production and egress capacity Western Canadian crude production and egress capacity 25 7,500 Rail Capacity (Unit Train Capacity) Coastal Gas Link Expansion 7,000 20 TransCanada Keystone XL Coastal Gas Link Actual 6,500 production 6,000 Trans Mountain Exp
Slide 25: Condensate
Condensate Canada remains a net importer(1) mbpd 1,200 • Domestic demand exceeds 1,100 domestic supply 1,000 900 Southern Lights Pipeline Capacity (~180 mbbl/d) • Strong condensate pricing is 800 driving domestic production 700 Cochin Pipeline Capacity (~95 mbbl/d) 600 500 • Ample running room for d
Slide 26: Natural gas liquids
Natural gas liquids Ethane supply and demand outlook (1) Propane supply and demand outlook(1) 1,200,000 500,000 1,000,000 400,000 800,000 300,000 bpd bpd 600,000 200,000 400,000 200,000 100,000 - - 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2018 2019 2020 2021 2022 2023 2024 2025 2026 20
Slide 27: Energy market today: challenges create opportunities
Energy market today: challenges create opportunities Challenge Opportunity • Canada’s supply of energy far exceeds its domestic • Global energy requirements increasing, with all requirements sources of energy needed to meet objective of improving the standard of living for all • Global oil and gas i
Slide 28: Facilities Division
Facilities Division
Slide 29: Question 1
Question 1 Can you provide an overview of the assets in the Facilities Division and how they are performing?
Slide 30: 6.1 bcf/d of gas processing and ~360 mbpd of fractionation capacity
6.1 bcf/d of gas processing and ~360 mbpd of fractionation capacity The financial and operating results for Aux Sable are included in the Marketing & New Ventures Division. 30
Slide 31: Facilities
Facilities Revenue volumes(1)(2) 2018 operations reliability 0 10 0 20 0 30 0 40 0 50 0 60 0 70 0 80 0 NGL Services 2018 241 mboe/d NGL Services Gas Services 2017 194 mboe/d 2018 Gas Services 683 mboe/d 2017 606 mboe/d (3) 1,00kbp d 1,50kbp d 2,00kbp d 2,50kbp d 3,00kbp d 3,50kbp d 96.0% 97.9% Adjus
Slide 32: Question 2
Question 2 With low gas prices are you seeing decreased utilization in your gas plants?
Slide 33: Portfolio of highly contracted and utilized gas processing assets
Portfolio of highly contracted and utilized gas processing assets Gas Services Q1 2019 utilization (1)(2) 100% Total Avg. Utilization 75% • Gas Services facilities are highly contracted, with 50% high take-or-pay percentages 25% • Fee-for-service extraction facilities were 90%+ utilized over recent
Slide 34: Question 3
Question 3 How do you think about incremental gathering and processing?
Slide 35: A focus on getting better not just bigger
A focus on getting better not just bigger Gas Services: Diversification over time Gas Services: Growth strategy 2014 geological contribution 2014 liquids output (~25,000 bpd) • Pembina is more inclined to pursue the development or acquisition of ~10% Cretaceous ~6% gas processing assets that: Montne
Slide 36: History of follow-on brownfield investment
History of follow-on brownfield investment Cutbank Complex Saturn Complex Resthaven ~$145 mm ~$150 mm ~$325 mm ~$270 mm ~$175 mm ~$295 mm Initial Investment Follow On Investment Initial Investment Follow On Investment Initial Investment Follow On Investment Duvernay Complex Veresen Midstream ~$330 m
Slide 37: Question 4
Question 4 What does Canadian West Coast LNG mean for Pembina?
Slide 38: Impact of Canadian West Coast LNG
Impact of Canadian West Coast LNG Asset location Pembina assets: ~1 bcf/d • Favorably located to benefit from processing capacity activity ramp Gas demand pull • Throughput on our system will benefit as demand grows Gas processing Liquids extraction and transportation Price throughout entire basin F
Slide 39: Question 5
Question 5 How do you see the Duvernay play contributing to the future growth of Pembina?
Slide 40: Duvernay overview
Duvernay overview • Pembina’s Duvernay Complex is backstopped by 230,000+ acres of Chevron/KUFPEC lands dedicated under a 20-year agreement • Shell is a working interest partner in Duvernay I gas plant Duvernay Complex • Pembina anticipates subsequent continued growth across its value chain, includi
Slide 41: Duvernay Complex
Duvernay Complex Gas capacity: 50,000 boe/d C3+ capacity: 13,500 bpd C5+ capacity: 60,000 bpd Water capacity: 25,000 bpd 160,000 ~148,000 53% 140,000 120,000 ~97,000 100,000 169% Boe/d 80,000 60,000 ~36,000 40,000 20,000 0 2017 2019 2020 Duvernay I Duvernay II Duvernay III Continued growth following
Slide 42: Question 6
Question 6 The basin has experienced increased demand for fractionation services – are you looking at additional fractionation opportunities?
Slide 43: Redwater fractionation and storage complex
Redwater fractionation and storage complex 240,000 200,000 RFS III placed • Demand for fractionation capacity is increasing into service 160,000 • RFS complex is expected to be ~90% utilized by the end of 2019 bpd 120,000 • Market dynamics are showing the need for additional 80,000 frac capacity 40,
Slide 44: Northeast BC fractionation opportunity
Northeast BC fractionation opportunity Infrastructure NEBC Liquids • Leverage expertise developed at Redwater Complex Pipeline Gathering Legend › Replicate 55,000 bpd C3+ RFS III design Pipeline CN Rail • Rail loading and product storage Pembina Pipelines Fort St. John VMLP Gas Plant Advantage Pembi
Slide 45: Question 7
Question 7 Why was the Hythe expansion so important for Pembina?
Slide 46: Hythe Developments: fully integrated service offering
Hythe Developments: fully integrated service offering • In 2018, Pembina and its joint venture entities executed a Natural gas gathering comprehensive agreement with NuVista Energy Limited Expansion of the Hythe gas plant • Collectively, the deal included all of Pembina’s businesses across Natural g
Slide 47: Pipelines Division
Pipelines Division |
Slide 48: Question 8
Question 8 Can you provide an overview of the assets in the Pipelines Division and how they are performing?
Slide 49: Total hydrocarbon transport capacity
(Crude oil, condensate and NGL) (Heavy oil and synthetic crude oil) (Natural gas and ethane) Total hydrocarbon transport capacity set to reach ~3 million barrels per day See "Forward-looking statements and information". 49
Slide 50: Pipelines highlights
Pipelines highlights 0 20 0 Revenue volumes(1)(2) 40 0 60 0 80 0 10 00 2018 operations reliability 2018 Conventional 897 mboe/d Conventional 2017 796 mboe/d Oil Sands Transmission 2018 Oil Sands 1,066 mboe/d 2017 1,087 mboe/d 99.7% 2018 Transmission 566 mboe/d 99.6% (3) 2017 567 mboe/d 98.5% 1,00kbp
Slide 51: Pipelines Division revenue volumes
Pipelines Division revenue volumes Total Pipelines Division revenue volumes(1) 2,500 mbpd 2,500 mbpd 2,300 mbpd 1,600 mbpd 1,500 mbpd 1,500 mbpd 1,400 mbpd 2013 2014 2015 2016 2017 2018 1Q19 Pembina's Pipeline Division continues to see strong system volume growth (1) 2013-2017 volumes have been rest
Slide 52: Question 9
Question 9 Can you remind me what the recent pipeline expansions included?
Slide 53: Conventional Pipelines revenue volumes
Conventional Pipelines revenue volumes(1)(2)(3) 1,400 Phase IV & V 1,200 Phase III 1,000 880 mbpd 880 mbpd 800 Phase II Phase I 690 mbpd mbpd 590 mbpd 600 560 mbpd 520 mbpd 440 mbpd 400 200 0 2013 2014 2015 2016 2017 2018 1Q19 Crude & condensate NGL Total capacity Pembina's Conventional Pipeline bus
Slide 54: History of Peace Pipeline development
History of Peace Pipeline development Capital Time in Phase In-service date Cost construction Phase I $135 million December 2013 25 months Phase II $660 million Q2/Q3 2015 29 – 34 months Phase III $2.44 billion July 2017 43 months Phase IV $75 million December 2018 20 months Phase V $385 million Dec
Slide 55: Question 10
Question 10 How has the Peace Pipeline contracting profile changed throughout various expansion phases?
Slide 56: Peace expansions: peak contracted volumes
Peace expansions: peak contracted volumes Peak in ~1 million 2022 bpd Peak in 2019/20 110 Peak in 2019 100 mbpd 390 Peak in 2017 390 Phase I & II Phase III Phase IV, V & VI Phase VII & VIII Peace System expansions are underpinned by growing and extending the contract profile, producing highly reliab
Slide 57: Question 11
Question 11 What would Phase IX expansion of Peace Pipeline mean for Pembina and its customers?
Slide 58: Future Peace Pipeline development options
Future Peace Pipeline development options • Pembina is currently evaluating the potential for Peace Phase IX, including: › Further market delivery capacity expansion to 1.3 million bpd through the addition of pump stations from Fox Creek to Namao › Further product segregation and additional capacity
Slide 59: Question 12
Question 12 What is Pembina’s competitive advantage in conventional pipelines?
Slide 60: Competitive advantage in Conventional Pipelines
Competitive advantage in Conventional Pipelines • The Pembina Store – a suite of integrated services along the hydrocarbon value chain, maximizing netbacks to producers • Aligned outages across the value chain • Ability to transport any product the customer drills, not limited to condensate and NGL
Slide 61: Advantage of connectivity
Advantage of connectivity Access Pipeline Redwater fractionation • Pembina’s conventional and storage I, II & III CDH Polaris Pipeline Norlite Pipeline pipeline system benefits Keyera FSCS from extensive connectivity to major hubs, fractionation Keyera FSPL Cold Lake Pipeline complexes and market 3r
Slide 62: Question 13
Question 13 Can we get an update on the Alliance expansion?
Slide 63: Potential expansion of Alliance Pipeline
Potential expansion of Alliance Pipeline 1,750 100.0% 1,700 99.8% mmcf/d 1,650 99.6% 1,600 99.4% 1,550 99.2% 1,500 99.0% 2013 2014 2015 2016 2017 2018 Revenue Volumes Capacity Reliabiity Bakken only expansion: › Significant associated gas & NGL growth is projected as oil economics drive activity › F
Slide 64: Why a Bakken solution is needed
Why a Bakken solution is needed Bakken producer revenue mix(1) Bakken natural gas production(2) Dry Gas NGLs 15% 4% 81% Crude Oil • Bakken economics driven by crude oil; gas and NGL • 81% of gas produced is captured and sold are by-products • 4% of gas produced is flared as it is not tied into a pip
Slide 65: Marketing
Marketing
Slide 66: Question 14
Question 14 Can you provide an overview of the Marketing business and how it is performing?
Slide 67: Why Marketing matters to Pembina
Why Marketing matters to Pembina 1 Protect the franchise 2 Enhance the franchise 3 Access global markets • Make integrated service • Support new infrastructure • Attract customers through offerings more robust development required to fulfill improved service offerings global energy needs • Internati
Slide 68: Marketing
Marketing Marketed NGL volumes 2018 results 0 20 40 60 80 10 0 12 0 14 0 16 0 18 0 20 0 2018 175 mboe/d • Year-over-year increase was due primarily 2017 180 mboe/d to a full year contribution from Pembina’s investment in Aux Sable Gas Services Rail volumes • Pembina’s marketing business has grown al
Slide 69: Question 15
Question 15 What are the key drivers of financial results within Marketing?
Slide 70: Marketing overview
Marketing overview Buying and selling Marketing and distribution Utilize storage to manage Aux Sable’s natural commodities to take of NGL products short and long-term gas processing, advantage of price, (ethane, propane, butane differences between supply NGL extraction & location and time spreads an
Slide 71: Marketing value drivers
Marketing value drivers Crude oil differentials(1) Propane inventories(2) NGL frac spreads(3) 30 140,000 $60 20 120,000 $50 10 North American Propane Inventory (Mbbl) 100,000 0 $40 -10 CAD 80,000 C$bbl -20 $30 60,000 -30 -40 $20 40,000 -50 Mar-12 Mar-19 Feb-15 Jan-11 May-13 Jun-17 Jan-18 Oct-12 Apr-
Slide 72: Question 16
Question 16 How will Pembina’s propane exposure change over time?
Slide 73: Western Canadian propane exposure
Western Canadian propane exposure Sales markets Benchmark price exposure Pre Prince Rupert Terminal and PDH/PP Facility Pre Prince Rupert Terminal and PDH/PP Facility 1% Canada and USA 9% Conway Markets Mt. Belvieu International Markets 48% 52% including Mexico International 27% 63% Local Demand Pos
Slide 74: Question 17
Question 17 What advantages does your rail operation provide you and your customers?
Slide 75: Rail at Redwater Complex
Rail at Redwater Complex 2015 – 2019 rail market destinations – by country 100,000 80,000 60,000 mbpd 40,000 20,000 0 2015 2016 2017 2018 2019F Canada USA Mexico Pembina has significant capabilities in rail logistics What our scale and expertise affords us • Record ~26,000 railcar shipments in 2018
Slide 76: New Ventures: Accessing premium markets
New Ventures: Accessing premium markets
Slide 77: Question 18
Question 18 How does New Ventures fit with the rest of your business?
Slide 78: Working to facilitate new market access for customers
Working to facilitate new market access for customers Pembina participation opportunities Market PPL Midstream Product conditions assets? Key markets Feedstock Partnership Full ownership LNG / AB Over- Jordan Cove Natural Gas supplied Power / N.A. Gas Market LNG RFS Cogen I Challenge: WCSB is Over
Slide 79: Why Pembina is developing LPG terminals
Why Pembina is developing LPG terminals • Growing North American production and robust international market demand for clean-burning LPG • Eastern Canada and US expected to be supplied by growing US production • Improves WCSB producer netbacks • West Coast provides advantageous shipping routes to nu
Slide 80: Propane pricing
Propane pricing Historical Propane Pricing $2.50 $2.00 $1.50 $1.00 $0.50 $- 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (1) (2) Edmonton Propane Price Latin America Price Far East Index Price(3) Access to global pricing provides a value up lift to WCSB customers (1) Source: OPIS. (3) Source: W
Slide 81: Prince Rupert Terminal overview
Prince Rupert Terminal overview • Developing the ~25,000 bpd Prince Rupert LPG Export Terminal • Constructed on private land owned by the City of Prince Rupert • Site features sheltered berth, existing dock infrastructure and well-established rail connections between Redwater, AB and Watson Island,
Slide 82: Prince Rupert Terminal
Prince Rupert Terminal PEMBINA
Slide 83: Prince Rupert Terminal
Prince Rupert Terminal 83 83
Slide 84: Prince Rupert Terminal
Prince Rupert Terminal 84 84
Slide 85: Prince Rupert Terminal
Prince Rupert Terminal 85 85
Slide 86: Prince Rupert Terminal
Prince Rupert Terminal 86 86
Slide 87: Why Pembina is entering the petrochemical business
Why Pembina is entering the petrochemical business • Attracts global pricing for WCSB hydrocarbons, improving customer netbacks, diversifying pricing • Undervalued NGL becomes an advantaged input cost rather than disadvantaged output • Extends Pembina’s value-chain and provides a full-service, integ
Slide 88: CKPC: stronger than the sum of its parts
CKPC: stronger than the sum of its parts $4.5 billion gross ($2.5 billion net) Pembina Canada RFS Propane PP Propylene United States Complex (~23,000 bpd) (550,000 MT) (550,000 MT) Asia South America Third Party PDH Facility PP Facility Shipping Fractionation Facilities Pembina PIC • Alberta-specifi
Slide 89: Polypropylene is a value-added product
Polypropylene is a value-added product North American PP to Edmonton propane price spread(1) $2,500 $2,000 $1,500 US$/MT $1,000 $500 - 2010 2011 2012 2013 2014 2015 2016 2017 2018 Propane to PP Spread North America PP Price Edmonton Propane Price Average Propane to PP Spread (~US$1,200 per MT) Stron
Slide 90: CKPC: a prudent approach to manage risk
CKPC: a prudent approach to manage risk • Detailed FEED completed with Class II capital cost estimate Capital cost • Securing EPC lump sum contracting to ensure cost certainty for key portions of the project's scope • Commercially proven PDH and PP process technologies • Access to proximate, diverse
Slide 91: Pembina is well positioned to support an ethane solution
Pembina is well positioned to support an ethane solution • Pembina’s assets are uniquely positioned to supply all of the feedstock requirements for Alberta’s next ethane cracker project • A new ethane cracker might be located in either Fort Saskatchewan or Joffre › Two most advantaged locations in o
Slide 92: Why Pembina is entering the LNG market
Why Pembina is entering the LNG market • Creates incremental demand and market diversity for abundant and stranded WCSB natural gas, improving producer netbacks and enhancing Pembina’s base business • Long-term LNG tolling arrangements, backstopped by investment grade international counterparties, e
Slide 93: Global LNG supply and demand outlook
Global LNG supply and demand outlook Global LNG supply and demand balance to 2040(mtpa)(1) Historical and Forecasted Gas and LNG Pricing (US$/mmbtu)(2) 21.00 800 18.00 600 15.00 12.00 400 9.00 6.00 200 3.00 - - 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 Existing LNG Supply LNG Suppl
Slide 94: Jordan Cove LNG
Jordan Cove LNG Accomplishments to date • Draft Environmental Impact Statement from FERC • Non-binding off-take agreements with customers in excess of the planned capacity • Right of way land acquisition • Class II cost estimate for the facility with leading consortium Outstanding • Final FERC decis
Slide 95: Pursuing a portfolio of LNG opportunities
Pursuing a portfolio of LNG opportunities • LNG is ‘in-strategy’ Northeast • Exploring multiple LNG BC LNG opportunities to optimize: › Capital cost and intensity › Construction time › Regulatory approvals Floating › Stakeholder alignment LNG › Brownfield infrastructure Jordan Cove LNG Pembina is in
Slide 96: Strong financial position
Strong financial position
Slide 97: Question 19
Question 19 How are you going to finance your growth?
Slide 98: Financial guardrails
Financial guardrails 2015 2019E 1 Maintain target of 80% fee-based contribution 2015 to Adjusted EBITDA(1) ~77% ~86% Target <100% payout of fee-based 2 distributable cash flow by 2018(2) ~135% ~76% (Standard Payout Ratio) (72%) (57%) Target 75% credit exposure from investment 3 grade and secured cou
Slide 99: Commitment to a strong BBB credit rating
Commitment to a strong BBB credit rating Debt/Adjusted EBITDA (2019 Forecast)(1) Leverage comparison across industry(4) x x 3.75x - 4.25x x Pembina continues to employ less leverage x 3.7x 9.0x than its peer group average x x 8.0x 2019 Forecast Target Fund from operations/Debt (2019 Forecast)(2) 7.0
Slide 100: Proportionately consolidated debt
Proportionately consolidated debt • Pembina manages its balance sheet to avoid falling below the Pembina Pipeline Corporation rating agencies’ downgrade threshold Current loans and borrowings $480 • We entered 2019 with a strong balance sheet, employing prudent Non-current loans and borrowings $7,05
Slide 101: We continue to generate new accretive growth opportunities
We continue to generate new accretive growth opportunities 2018 Investor Day Today • Peace pipeline expansions • Duvernay development • Processing facilities • Peace pipeline expansions • PDH/PP • Jordan Cove LNG • Alliance expansion • Duvernay development • Jordan Cove LNG • Laterals and connection
Slide 102: Secured growth projects
Secured growth projects Projects recently placed into service In-service Capital Cost (1) ($MM) Phases IV & V December 2018 $460 Burstall Ethane Storage January 2019 $190 Prince Rupert Export Redwater Infrastructure Various $118 Terminal Peace Phase IV,V, VI, VII & VIII Total $768 MM Expansions Secu
Slide 103: Funding outlook
Funding outlook Objectives 2019-23 secured growth funding plan • Commitment to Pembina’s financial guardrails › Maintain strong BBB rating with conservative balance sheet metrics Over $750 million › Regular dialogue with rating agencies Cash of ‘excess’ cash flow available • Finance growth ~50/50 de
Slide 104: Question 20
Question 20 How do you see 2019 shaping up?
Slide 105: Revised 2019 guidance
Revised 2019 guidance Adjusted EBITDA December 2018 May 2019 IFRS 16 Impact $2.8 - $3.0 billion $2.85 - $3.05 billion Capital expenditures December 2018 May 2019 Peace Phase VIII Duvernay Complex $1.64 billion Jordan Cove $2.0 billion JV contributions & advances 2019 capital budget has been revised
Slide 106: Adjusted EBITDA and Adjusted EBITDA per Share
Transformational growth is generating record financial results Adjusted EBITDA and Adjusted EBITDA per share $2,850 MM to $3,050 MM $3,000 ~$5.60 - ~$6.00 per share $6.00 $5.62 Adjusted EBITDA Adjusted EBITDA per share $2.8 B $2,500 $5.00 $3.98 Adjusted EBITDA per Share $2,000 $4.00 $1.7 B Adjusted
Slide 107: Question 21
Question 21 How do you think about the dividend?
Slide 108: Dividend growth supported by growing cash flow
Dividend growth supported by growing cash flow $5.00 5.3% dividend increase announced May 2, 2019 $1,200 $4.50 ACFPS CAGR: ~12%(3) $4.00 Dividend per share CAGR: ~4.1%(3) $1,000 Cash flow after dividends ($MM)(2) $3.50 $800 $3.00 $/Share $2.50 $600 $2.00 $400 $1.50 $1.00 $200 $0.50 $0.00 $0 2009 201
Slide 109: Closing
Closing
Slide 110: Attractive investment against the broader market
Attractive investment against the broader market 5 year dividend per share growth 5 year EPS growth Current dividend yield 9% 15% 5.1% 14% 6% 3.2% 4% 2.1% 5% Pembina has outperformed the broader market Source: Bloomberg. 110
Slide 111: Pembina historical performance
Pembina historical performance Key metrics 700 ✓ 4.5% dividend growth rate(2) Relative Total Return (100 = January 1, 2009) 600 ~470% ✓ ~$7.1 billion in dividends paid since 500 inception(3) ~340% 400 ✓ 11% adjusted cash flow per share ~240% growth(2) 300 ~220% ✓ ~18% total return compound annual 20
Slide 112: Pembina's value proposition
Pembina's value proposition ✓ Diverse and integrated assets, strategically located to serve world-class geology ✓ Visible growth while remaining dedicated to our financial guardrails ✓ Large scale growth and value chain extension projects under development ✓ Organic growth of $1 to $2 billion per ye
Slide 113: Contact Us
CONTACT US Pembina Pipeline Corporation Suite 4000 – 585 8th Avenue S.W. Calgary, Alberta T2P 1G1 www.pembina.com investor-relations@pembina.com Toll free: 1.855.880.7404 Phone: 403.231.3156