Pembina Pipeline Corporation Reports Record Results for the Fourth Quarter of 2024 and Provides Business Update

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.

CALGARY, Alberta–(BUSINESS WIRE)–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 of 2024.

Highlights

• Record Results – reported 2024 full year earnings of $1,874 million, record full year adjusted EBITDA of $4,408 million, and record full year adjusted cash flow from operating activities of $3,265 million ($5.70 per share). Reported fourth quarter earnings of $572 million, record quarterly adjusted EBITDA of $1,254 million, and record quarterly adjusted cash flow from operating activities of $922 million ($1.59 per share).
• Business Updates – developments during and following the fourth quarter included:
  • Pembina Gas Infrastructure (“PGI”) closed separate transactions with Whitecap Resources Inc. (“Whitecap”) and Veren Inc. (“Veren”) that included asset acquisitions and funding of up to a total of $700 million ($420 million net to Pembina) for new infrastructure development.
  • In November 2024, the northeast British Columbia (“NEBC”) MPS Expansion was placed into service on time and under budget, adding to Pembina’s record of strong project execution.
  • Pembina continues to successfully contract the Nipisi Pipeline to serve growing volumes from the Clearwater area and recently contracted an additional 25,000 bbl/d of capacity on a long-term basis.
  • Pembina continues to advance a process with multiple parties to remarket its contracted Cedar LNG Project capacity and has received non-binding proposals covering well in excess of its contracted capacity.
  • Pembina is advancing development work on various capital efficient projects to meet its ethane supply commitments below the low end of the capital range previously communicated, and respond to growing demand for services, including the de-ethanizer expansion at RFS III, the Taylor-to-Gordondale pipeline expansion, and the Fox-to-Namao pipeline expansion.
  • Pembina has entered into agreements for a 50 percent interest in the Greenlight Electricity Centre Limited Partnership, which is developing a power generation facility to serve data centre customers.
  • Pembina has secured the sole natural gas liquids (“NGL”) extraction rights from the Yellowhead Mainline natural gas pipeline and is advancing engineering of an up to 500 MMcf/d straddle facility.
• Common Share Dividend Declared – the board of directors declared a common share cash dividend for the first quarter of 2025 of $0.69 per share to be paid, subject to applicable law, on March 31, 2025, to shareholders of record on March 17, 2025.

Financial and Operational Overview

Financial and Operational Overview by Division

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, 2024, and Pembina’s Management’s Discussion and Analysis dated February 27, 2025 for the three and twelve months ended December 31, 2024, 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 $1,254 million in the fourth quarter and record full year adjusted EBITDA of $4,408 million. This represents a $221 million or 21 percent increase, and a $584 million or 15 percent increase, respectively, over the same periods in the prior year. For both the fourth quarter and full year, reported adjusted EBITDA compared to the prior periods is largely due to the positive net impacts of increased ownership in Alliance and Aux Sable (the “Alliance/Aux Sable Acquisition”), higher NGL margins, and volume growth across the business, partially offset by lower net revenue on the Cochin Pipeline. Additional factors impacting fourth quarter and full year results in each division are discussed below.

2024 results exceeded Pembina’s most recent 2024 adjusted EBITDA guidance range of $4.225 billion to $4.325 billion. Relative to the midpoint of the guidance range, actual results reflect the following:

• the timing of capital recovery recognition on certain assets within Pipelines and at PGI, resulting in a recognition in the fourth quarter of previously deferred revenue ($37 million);
• lower general & administrative expense primarily due to lower long-term incentive costs during the fourth quarter ($30 million);
• stronger results from the marketing business due to a significant improvement in NGL frac spreads ($46 million); and
• stronger fourth quarter results in the Pipelines and Facilities divisions ($20 million).

Pipelines reported adjusted EBITDA of $686 million for the fourth quarter, representing a $69 million or 11 percent increase compared to the same period in the prior year, reflecting the net impact of the following factors:

• higher contribution from Alliance due to increased ownership following the Alliance/Aux Sable Acquisition and higher demand on seasonal contracts;
• higher revenue related to the timing of capital recovery recognition on certain Pipeline assets ($23 million);
• higher volumes on the Nipisi Pipeline;
• net revenues on the Peace Pipeline system were consistent as higher contracted volumes and contractual inflation adjustments on tolls were largely offset by earlier recognition of take-or-pay deferred revenue during the first half of 2024; and
• lower net revenue on the Cochin Pipeline, largely due to lower firm tolls and lower interruptible demand resulting from a narrower condensate price differential between western Canada and the U.S. Gulf Coast.

Pipelines reported adjusted EBITDA of $2,533 million for the full year, representing a $299 million or 13 percent increase compared to the same period in the prior year, reflecting the net impact of the following factors:

• higher contribution from Alliance due to increased ownership following the Alliance/Aux Sable Acquisition and higher demand on seasonal contracts;
• no impacts in 2024 from the Northern Pipeline system outage and the wildfires, which affected 2023;
• higher revenue and volumes, primarily on the Peace Pipeline system and on the Nipisi Pipeline;
• contractual inflation adjustments on tolls;
• higher net revenue related to the timing of capital recovery recognition on certain Pipelines assets ($23 million); and
• lower net revenue and volumes on the Cochin Pipeline.

Facilities reported adjusted EBITDA of $373 million for the fourth quarter, representing a $49 million or 15 percent increase over the same period in the prior year, reflecting the net impact of the following factors:

• the inclusion within Facilities of adjusted EBITDA from Aux Sable following the Alliance/Aux Sable Acquisition; and
• higher contribution from PGI assets, due to higher revenue associated with the oil batteries acquired in the fourth quarter of 2024, higher volumes at certain PGI assets, and the timing of capital recovery recognition ($14 million).

Facilities reported adjusted EBITDA of $1,347 million for the full year, representing a $134 million or 11 percent increase over the same period in the prior year, reflecting the net impact of the following factors:

• the inclusion within Facilities of adjusted EBITDA from Aux Sable following the Alliance/Aux Sable Acquisition;
• higher contribution from PGI assets, due to higher revenue associated with the oil batteries acquired in the fourth quarter of 2024, higher volumes at certain PGI assets, and the timing of capital recovery recognition ($14 million);
• no impacts in 2024 from the Northern Pipeline system outage and the wildfires, which affected volumes in 2023; and
• a gain on the recognition of a finance lease, which affected 2023 only.

Marketing & New Ventures reported adjusted EBITDA of $234 million for the fourth quarter, representing a $61 million or 35 percent increase compared to the same period in the prior year, reflecting the net impact of the following factors:

• higher net revenue from contracts with customers due to increased ownership interest in Aux Sable;
• higher NGL margins; and
• lower realized gains on commodity-related derivatives.

Marketing & New Ventures reported adjusted EBITDA of $724 million for the full year, representing a $127 million or 21 percent increase compared to the same period in the prior year, reflecting the net impact of the following factors:

• higher net revenue from contracts with customers due to increased ownership interest in Aux Sable following the Alliance/Aux Sable Acquisition;
• higher NGL margins;
• lower realized gains on commodity-related derivatives; and
• the nine-day unplanned outage at Aux Sable in July 2024.

Corporate reported adjusted EBITDA of negative $39 million for the fourth quarter, representing a $42 million or 52 percent increase compared to the same period in the prior year, reflecting lower incentive costs.

Corporate reported adjusted EBITDA of negative $196 million for the full year, representing a $24 million or 11 percent increase over the same period in the prior year, reflecting lower general and administrative expense, primarily due to lower consulting costs and lower incentive costs.

Earnings

Pembina reported fourth quarter earnings of $572 million and full year earnings of $1,874 million. This represents a $126 million or 18 percent decrease, and a $98 million or six percent increase, respectively, over the same periods in the prior year.

Pipelines had earnings in the fourth quarter of $534 million, representing a $143 million or 21 percent decrease over the prior period. Pipelines had earnings for the full year of $1,907 million, representing a $67 million or four percent increase over the prior year. In addition to the factors impacting adjusted EBITDA, as noted above, the change in earnings in both the fourth quarter and full year was due to the reversal of a previous impairment related to the Nipisi Pipeline, which impacted the fourth quarter of 2023.

Facilities had earnings in the fourth quarter of $177 million representing a $34 million or 24 percent increase over the prior year. Facilities had earnings for the full year of $666 million representing a $56 million or nine percent increase over the prior year. In addition to the factors impacting adjusted EBITDA, as noted above, the change in earnings in both the fourth quarter and full year was due to unrealized gains recognized by PGI on interest rate derivative financial instruments compared to unrealized losses in 2023.

Marketing & New Ventures had earnings in the fourth quarter of $245 million representing a $41 million or 20 percent increase over the prior year. In addition to the factors impacting adjusted EBITDA, as noted above, the change in earnings in the fourth quarter was due to unrealized losses on commodity-related derivatives, compared to unrealized gains in the prior period, and unrealized gains on interest rate derivative financial instruments, recognized by Cedar LNG.

Marketing & New Ventures had earnings for the full year of $569 million representing a $134 million or 31 percent increase, over the prior year. In addition to the factors impacting adjusted EBITDA, as noted above, the change in full year earnings was due to unrealized gains on interest rate derivative financial instruments recognized by Cedar LNG; gains associated with the derecognition of the provision related to financial assurances provided by Pembina, which were assumed by Cedar LNG following the positive final investment decision (“FID”) in June 2024; larger unrealized losses on commodity-related derivatives, primarily related to renewable power purchase agreements and crude oil, and higher depreciation.

In addition to the changes in earnings for each division discussed above, the change in both the fourth quarter and full year earnings compared to the prior period was due to higher interest expense and higher income tax expense. The change in full year earnings was further affected by the loss on Alliance/Aux Sable Acquisition, higher acquisition fees and integration costs, and an income tax recovery in 2024 compared to an expense in 2023.

Cash Flow From Operating Activities

Cash flow from operating activities of $902 million for the fourth quarter and $3,214 million for the full year represent a three percent and 22 percent increase, respectively, over the same periods in the prior year.

The increase in the fourth quarter was primarily driven by higher operating results, partially offset by the change in non-cash working capital, and lower distributions from equity accounted investees and higher net interest paid, both largely as a result of the Alliance/Aux Sable Acquisition.

The increase in the full year was primarily driven by higher operating results, the change in non-cash working capital, and an increase in payments collected through contract liabilities, partially offset by lower distributions from equity accounted investees, higher net interest paid, higher taxes paid, and higher share-based payments.

On a per share (basic) basis, cash flow from operating activities was $1.55 per share for the fourth quarter and $5.61 per share for the full year. This represents a decrease of three percent and an increase of 17 percent, respectively, compared to the same periods in the prior year, due to the same factors noted above, as well as additional common shares issued in connection with the Alliance/Aux Sable Acquisition financing.

Adjusted Cash Flow From Operating Activities

Adjusted cash flow from operating activities of $922 million for the fourth quarter and $3,265 million for the full year, represent a 23 percent increase 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, combined with lower accrued share-based payment expense, partially offset by higher income tax expense.

The increase 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 payments, combined with lower current income tax expense, partially offset by higher accrued share-based payment expense, distributions to non-controlling interest, and higher preferred dividends paid.

On a per share (basic) basis, adjusted cash flow from operating activities was $1.59 per share for the fourth quarter and $5.70 per share for the full year. This represents an increase of 17 percent and 19 percent, respectively, compared to the same periods in the prior year, due to the same factors noted above, as well as additional common shares issued in connection with the Alliance/Aux Sable Acquisition financing.

Volumes

Total Pipelines and Facilities volumes of 3,667 mboe/d for the fourth quarter and 3,548 mboe/d for the full year represent an increase of six percent and seven percent, respectively, over the same periods in the prior year.

Pipelines volumes of 2,790 mboe/d in the fourth quarter represent a five percent increase compared to the same period in the prior year, primarily reflecting the Alliance/Aux Sable Acquisition, the reactivation of the Nipisi Pipeline, lower volumes on the Peace Pipeline system due to earlier recognition of take-or-pay deferred revenue in the first half of 2024, which more than offset the increase from higher contracted volumes, and lower volumes on the Cochin Pipeline largely due to lower interruptible demand.

Pipelines volumes of 2,711 mboe/d for the full year represent a seven percent increase compared to the same period in the prior year, primarily reflecting the Alliance/Aux Sable Acquisition, the reactivation of the Nipisi Pipeline, no impact of the Northern Pipeline system outage and the wildfires, which impacted 2023 only, higher volumes on the Peace Pipeline system due to higher contracted volumes, and lower volumes on the Cochin Pipeline.

Facilities volumes of 877 mboe/d in the fourth quarter represent a nine percent increase compared to the same period in the prior year, reflecting volumes now being recognized at Aux Sable following the Alliance/Aux Sable Acquisition.

Facilities volumes of 837 mboe/d for the full year represent a nine percent increase compared to the same period in the prior year, reflecting volumes now being recognized at Aux Sable following the Alliance/Aux Sable Acquisition, no impact of the Northern Pipeline system outage, which impacted 2023 only, higher interruptible and contracted volumes on certain PGI assets, partially offset by lower volumes due to a planned outage and a rail strike at the Redwater Complex.

Marketed NGL volumes of 252 mboe/d in the fourth quarter and 228 mboe/d for the full year represents a 16 percent and 23 percent increase, respectively, compared to the same periods in the prior year, reflecting higher propane, ethane, and butane sales largely due to the increase in Pembina’s ownership interest in Aux Sable. The increase in the full year was also impacted by lower supply volumes from the Redwater Complex in 2023 due to the Northern Pipeline system outage.

Marketed crude oil volumes of 96 mboe/d in the fourth quarter and 99 mboe/d for the full year represents a 17 percent and 15 percent increase, respectively, compared to the same periods in the prior year, reflecting increased blending opportunities due to favourable price differentials.

Executive Overview

Successful Strategy Execution

2024 was marked by several accomplishments that highlight the successful execution of Pembina’s strategy and our focus on strengthening the existing franchise, increasing our exposure to lighter hydrocarbons and resilient end-use markets, and accessing global market pricing for Canadian energy products. Highlights included:

• Growing our presence in resilient northeast U.S. natural gas and NGL markets by fully consolidating ownership of Alliance and Aux Sable.
• Furthering global market access for Canadian natural gas producers by reaching a positive FID on the Cedar LNG Project.
• Adding capital efficient, timely, and certain capacity to accommodate growing Western Canadian Sedimentary Basin (“WCSB”) production through completion of the Phase VIII Peace Pipeline Expansion.
• Supporting growth-focused Montney and Duvernay area customers with tailored solutions through two PGI transactions.
• Capitalizing on new long-term, stable demand for ethane from Alberta’s growing petrochemical industry by entering a 50,000 barrel per day ethane supply agreement with Dow Chemical Canada (“Dow”).
• Commercial successes across the business, including executing incremental contracts or renewing contracts for:
  • approximately 170 mboe/d of pipeline transportation, primarily on Alliance Pipeline, Peace Pipeline, and Nipisi Pipeline;
  • over six million barrels of storage at the Edmonton Terminals;
  • approximately 200 MMcf/d of gas processing, primarily at Musreau, Patterson Creek, and K3; and
  • additional fractionation services across the Redwater Complex.

Preliminary 2024 data suggests annual production growth in British Columbia and Alberta of approximately four percent, with NGL and condensate growth having outpaced other hydrocarbons. Pembina’s assets play an essential role in the basin, and as such the Company’s conventional pipeline and gas processing volume growth roughly mirrored year-over-year basin growth, and asset utilization has continued to rise.

The Pembina Advantage

Our portfolio of high-quality assets, combined with the breadth of our capabilities, provides an unmatched service offering for our customers. We provide fully integrated, end-to-end solutions across all products – natural gas, NGL (ethane, propane and butane), condensate, and crude oil. Through our unique combination of strategically-placed assets and strong customer and community relationships we have built strong competitive advantages, allowing us to capitalize on opportunities and serve our customers better. Successfully meeting the needs of our customers will underpin Pembina’s future success and in turn our ability to deliver industry-leading returns to our investors, remain an employer-of-choice to a highly engaged workforce, and have a positive net impact within our communities.

Looking Ahead: Our Vision for 2025 and Beyond

Pembina operates at the heart of the WCSB, one of North America’s most significant hydrocarbon-producing regions. Significant and multi-year volume growth in WCSB production is expected through the balance of the decade due to a variety of catalysts driving transformational change across the Canadian energy industry.

Contacts

For further information:
Investor Relations
(403) 231-3156
1-855-880-7404
e-mail: investor-relations@pembina.com
www.pembina.com

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