PEMBINA PIPELINE CORPORATION

Transcription

1 PEMBINA PIPELINE CORPORATION CORPORATE UPDATE TSX: PPL, NYSE: PBA September

2 FORWARD-LOOKING STATEMENTS & INFORMATION 2 This presentation is for information purposes only and is not intended to, and should not be construed to constitute, an offer to sell or the solicitation of an offer to buy, securities of Pembina Pipeline Corporation. This presentation and its contents should not be construed, under any circumstances, as investment, tax or legal advice. Any person accepting delivery of this presentation acknowledges the need to conduct their own thorough investigation into Pembina and its activities before considering any investment in its securities. This presentation contains certain forward-looking statements and information within the meaning of the "safe harbour" provisions of applicable securities legislation that are based on Pembina Pipeline Corporation's expectations, estimates, projections and assumptions in light of its experience and its perception of historical trends as well as current market conditions and perceived business opportunities. In some cases, forward-looking information can be identified by terminology such as "expects", "anticipates", "plans", "potential", "will", "continue", and similar expressions suggesting future events or future performance. In particular, this presentation contains forward-looking statements, including certain financial outlooks, pertaining to corporate strategy (capital expenditures, schedules, expected capacity, approval and contracting expectations with respect to current and potential projects), financial performance and future financing sources, the stability and sustainability of cash dividends, expansion and diversification opportunities, expectations regarding future supply, demand and commodity pricing. Undue reliance should not be placed on these forward-looking statements and information as they are based on assumptions made by Pembina as of the date hereof regarding, among other things, industry conditions, the availability and sources of capital, operating costs, the ability to reach required commercial agreements, and the ability to obtain required regulatory approvals. While Pembina believes the expectations and assumptions reflected in these forward-looking statements are reasonable as of the date hereof, there can be no assurance that they will prove to be correct. Forward-looking statements are subject to known and unknown risks and uncertainties which may cause actual performance and financial results to differ materially from the results expressed or implied, including but not limited to: the impact of competitive entities and pricing; reliance on key alliances and agreements; the strength and operations of the oil and natural gas industry and related commodity prices; regulatory environment; fluctuations in operating results; the availability and cost of labour and other materials; the ability to finance projects on advantageous terms; and tax laws and tax treatment. Additional information on these factors as well as other factors that could impact Pembina's operational and financial results are contained in Pembina's Annual Information Form and Management's Discussion and Analysis, and described in our public filings available in Canada at and in the United States at Readers are cautioned that this list of risk factors should not be construed as exhaustive. The forward-looking statements contained in this document speak only as of the date of this document. Except as expressly required by applicable securities laws, Pembina and its subsidiaries assume no obligation to update forward-looking statements and information should circumstances or management's expectations, estimates, projections or assumptions change. The forward-looking statements contained in this document are expressly qualified by this cautionary statement. Readers are cautioned that management of Pembina approved the financial outlooks contained herein as of the date of this presentation. The purpose of the financial outlooks contained herein is to give the reader an indication of the value of Pembina's current and anticipated growth projects. Readers should be cautioned that the information contained in the financial outlooks contained herein may not be appropriate for other purposes. In this presentation, we refer to certain financial measures such as EBITDA, total enterprise value and operating margin that are not determined in accordance with International Financial Reporting Standards ("Canadian GAAP"). For more information about these non-gaap and additional GAAP measures, see the Appendix to this presentation. All financial information is expressed in Canadian dollars unless otherwise specified.

3 PEMBINA IS A UNIQUE INVESTMENT OPPORTUNITY 3 Pembina represents a pure play energy infrastructure company that allows investors to participate in the resurgent volume growth of the Western Canadian Sedimentary Basin Well-Positioned for Growth Strong Demand for our Services Solid Business Platform

4 4 PEMBINA AT A GLANCE Oil Sands & Heavy Oil 1,650 km of pipelines with 880 mbpd of contracted capacity TSX: PPL NYSE: PBA Common shares outstanding (1) 328 million TSX common share trading price (1) $49.97 Gas Services 368 MMcf/d net natural gas processing capacity; 405 MMcf/d enhanced liquids extraction capacity; 375 km of gathering pipelines Conventional Pipelines 8,200 km network transports approx. 50% of Alberta's conventional crude oil & approx. 30% of western Canada's NGL Midstream 73,000 bpd fractionator; 21 truck terminals; 13.9 mmbbl storage capacity; product marketing; crude by rail; 2.4 bcf extraction capacity; Nexus Terminal hubs TSX 52-week trading range (1) $ $49.97 Market capitalization (2) Total enterprise value (3) Dividend $16.2 billion $18.0 billion Yield (1) ~3.5% Corporate credit rating (4) Member of the TSX/S&P 60 $1.74/share annualized ($0.145/share monthly) BBB (1) As at August 29, (2) As at August 6, 2014 (includes convertible debentures and preferred shares). (3) See "Non-GAAP and Additional GAAP measures." As at June 30, (4) DBRS and S&P.

5 IDEALLY LOCATED ASSETS Integrated system of pipelines transport hydrocarbon liquids produced in western Canada: conventional and synthetic crude oil, heavy oil and oil sands products, condensate (diluent) natural gas liquids Gas gathering and processing facilities Oil and natural gas liquids infrastructure and logistics business Full spectrum of midstream and marketing services that spans across operations Gas Processing Plant Redwater Fractionator Midstream Storage Facility Truck Terminal Pembina Conventional Pipelines Pembina Oil Sands Pipelines Third Party Pipelines Map for illustrative purposes only. 5

6 6 ASSETS AND MAJOR PLAYS IN WCSB Map for illustrative purposes only. ALBERTA MONTNEY ATHABASCA OIL SANDS SLAVE POINT SEAL PELICAN LAKE SWAN HILLS DEEP BASIN DUVERNAY CARDIUM Gas Processing Plant Redwater Fractionator Midstream Storage Facility Truck Terminal Rail Terminal Pembina Conventional Pipelines Pembina Oil Sands/Heavy Oil Pipelines BRITISH COLUMBIA

7 7 CUSTOMER FOCUSED VALUE CHAIN Gas Services Conventional Pipelines Midstream Gas/HVP Value Chain: Gathering and processing Transportation on Conventional Pipelines Fractionation at Redwater Production Gathering, Processing, Field Extraction HVP Feeder Pipelines Terminalling & Marketing Mainline Extraction Fractionation Logistics & Distribution Consumption Oil/Condensate/LVP Value Chain: Truck and full-service terminals Pipeline transportation Storage, logistics, distribution Production Mining/In-situ Midstream Field Terminalling &Treatment Upgrading Conventional & Oil Sands Pipelines LVP Feeder Pipelines Midstream Terminalling & Marketing Diluent Logistics & Distribution Refining Spec Products Logistics & Distribution Consumption

8 8 STRONG MARKET PERFORMANCE 500 % * Jan 1, 2004 Dec 31, 2013, inclusive of dividends reinvested total return* 4.6 % * CAGR in dividends per share* $2.8 billion in dividends paid since inception* * To December Pembina began paying dividends in % average compound annual return* * Jan 1, 2004 Dec 31, 2013, inclusive of dividends reinvested

9 Total Return (100 = January 1, 2004) STRONG MARKET PERFORMANCE Significant total return outperformance in 2013 calendar year compared to both the composite index (+25%) and average peer performance (+20%) 10 Year Total Return PPL vs. S&P/TSX (1) 2013 Calendar Year Total Return % 35% % % % S&P/TSX Index 15% 13% 11% 7% 4% Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 S&P TSX Peer 7 Peer 8 Peer 9 Pembina was the strongest performing Canadian energy infrastructure stock in 2013 Source: Bloomberg. Peer group includes: AltaGas, Enbridge, Enbridge Income Fund, Gibsons, Inter Pipeline, Keyera, TransCanada & Veresen (1) From January 1, 2004 to December 31,

10 Adjusted Cash Flow Per Share ($ millions) STRONG FINANCIAL PERFORMANCE $ % CAGR 21 in ACFPS % CAGR in operating margin $1,000 $900 $2.00 $800 $700 $1.50 $1.00 $0.50 $600 $500 $400 $300 $200 $ ACFPS Operating Margin See Non-GAAP and additional GAAP measures. 10

11 ($ millions) 2014 CAPITAL SPENDING PLAN 1,800 1,600 4% 15% Total 2014 planned Capex = $1.7 billion* 1,400 9% 76% higher than 2013 and largest in 1,200 Pembina s history 1,000 21% ~60% directed towards NGL-related value 800 chain activities 600 ~40% directed towards crude oil and % condensate-related value chain activities 200 ~$1.3 billion (77%) of total capital associated with previously announced projects 0 Conventional Pipelines Midstream - Crude Oil Midstream - NGL Gas Services Oil Sands & Heavy Oil * See "Forward-Looking Statements and Information." 11

12 FOCUSED ON FEE-FOR-SERVICE PROJECTS Projects (all fee-for-service) Conventional Pipelines Capital (C$MM) In-Service Red indicates projects under construction or development Phase II Crude Oil, Condensate & NGL Expansions $ Phase III Pipeline Expansions* $ 2, TAYLOR FORT MCMURRAY Other laterals $ Gas Services Resthaven Facility $ Musreau II Facility $ Saturn II Facility $ PRINCE GEORGE Midstream Cavern Development $ Full-Service Terminal $ EDMONTON Terminal and Hub Services $ RFS II Fractionator $ RFS III Fractionator $ Other $ 335 Committed Capital $ 4,910 Potential Cornerstone Pipeline* $ 1,000 ** KAMLOOPS CALGARY Uncommitted Opportunities $ 1,000 Total Unrisked Capital Opportunities $ 6,910 VANCOUVER * Phase II & III Expansions subject to environmental and regulatory approval. The potential Cornerstone Pipeline is subject to project sanctioning, reaching commercial agreements and obtaining regulatory approvals thereafter. ** In-service date in conjunction with the in-service date of the upstream oil sands project. Map is for illustrative purposes only See "Forward-Looking Statements and Information." 12

13 13 BUSINESS OVERVIEW

14 CONVENTIONAL PIPELINES KAMLOOPS FORT ST JOHN TAYLOR Map for illustrative purposes only. DUNVEGAN GRANDE PRAIRIE VALLEYVIEW NEBC/Western System Peace System Drayton Valley System Liquids Gathering System (LGS) ALBERTA CAROLINE SWAN HILLS WHITECOURT DRAYTON VALLEY FORT MCMURRAY FORT SASKATCHEWAN EDMONTON Northern System Swan Hills System Bonnie Glen System (50% Operated) Brazeau NGL System Operational excellence 99% reliable Proximal to prolific geology Q throughput: 573 mbpd (~18% increase from Q2 2013) 2013 throughput: 492 mbpd (~8% increase from 2012) Connected to refineries and export pipelines Over 300 receipt points adding diversity to producers and product type 14

15 SOLID BUSINESS PLATFORM 100% of revenue is fee-for-service No direct commodity exposure Expansions underpinned by long-term contracts Established infrastructure captures incremental production from major resources plays Diversification in geology and geography Tightening pipeline capacity has customers signing firm service (take-orpay) arrangements Continued construction of major gathering laterals into existing and new service areas Excellent customer relations See Forward-Looking Statements & Information. 15

16 (mbpd) GROWING THROUGHPUT Solid industry performance combined with strategically located assets has led to strength in Pembina's throughput profile 393 mbpd mbpd 456 mbpd 414 mbpd 374 mbpd 573 mbpd Crude & Condensate NGL Capacity expansions of ~430,000 bpd underway See Forward-Looking Statements & Information." 16

17 mbpd OUR EXPANSIONS COULD BRING CAPACITY TO ~1.4 MILLION BPD 1,400 ~1,400 mbpd 1,200 1, Pre-Expansion Phase I Phase II Phase III Phase III (Ultimate (in-service) (late 2014 to mid (late 2016 to mid Capacity) 2015) 2017) Total (combined system capacity) Crude Oil & Condensate NGL Project under development See "Forward-Looking Statements & Information." Phase III Expansions subject to regulatory approval. 17

18 $2 BILLION PHASE III EXPANSION FT. ST. JOHN TAYLOR DAWSON CREEK BRITISH COLUMBIA LAGLACE Map for illustrative purposes only. GORDONDALE GRANDE PRAIRIE VALLEYVIEW Phase III Expansion SWAN HILLS FOX CREEK WHITECOURT EDSON Projects currently under construction Previously announced Phase II Expansion Pembina crude oil and condensate pipelines Pembina NGL pipelines Other Pembina pipelines Truck terminals ALBERTA NAMAO Redwater Fractionator FT SASKATCHEWAN Heartland Hub EDMONTON ~1,000 mbpd ultimate capacity on Peace & Northern Pipelines Phase III will have 320 mbpd initial capacity between Fox Creek and Edmonton with ability to increase to over 500 mbpd 540 km total of new pipeline Underpinned by long-term transportation service agreements with 30 customers for 75% of initial capacity Potential start-up between late-2016 and mid-2017, subject to regulatory approval Expected EBITDA $270-$300 million See "Forward-Looking Statements and Information." 18

19 OIL SANDS & HEAVY OIL Syncrude Pipeline Horizon Pipeline Cheecham Lateral Nipisi Pipeline Mitsue Pipeline Peace Pipeline Operational excellence 99+% reliable over operating history Diverse connectivity to various industry hubs for crude oil and condensate Superior relationships with aboriginal communities, key stakeholders and producers ALBERTA Proven track record of reliable and safe transportation services Map for illustrative purposes only, using third-party info. 19

20 SOLID BUSINESS PLATFORM PIPELINE SYSTEM SYNCRUDE HORIZON CHEECHAM NIPISI & MITSUE Contracted Capacity (bpd) 389, , , ,000 Contract Type Cost-of-Service Fixed Return Fixed Return Fixed Return Initial Term 25+ years 25+ years 25+ years 10+ years Shippers Syncrude Partnership: Canadian Oil Sands 36.74% Imperial Oil 25% Suncor 12% Sinopec 9.03% Nexen 7.23% Murphy 5% Mocal 5% CNRL Conoco Total Nexen CNOOC CNRL Cenovus PMLP Contracts are long-life and provide flow through of eligible operating expenses (1) Denotes ultimate capacity with the addition of pump stations. See Forward-Looking Statements & Information. 20

21 POTENTIAL CORNERSTONE PIPELINE Signed $35 million engineering support agreement ("ESA") Commenced stakeholder consultation and progressing engineering Application expected to be filed by end of September Proposed Cornerstone Pipeline system: new 24" diluted bitumen and 12" diluent pipeline between Edmonton and KOSP's upstream development (~ 320 km) Working to execute binding transportation services agreements CNRL HORIZON SYNCRUDE FORT MCMURRAY CHEECHAM TERMINAL UPSTREAM DEVELOPMENT Vertical integration: directly or indirectly creates synergy with all Pembina business units Potential start-up to coincide with in-service date of upstream development project PEMBINA NEXUS TERMINAL Syncrude Pipeline Horizon Pipeline Cheecham Lateral Proposed Cornerstone Route See "Forward-Looking Statements & Information." The Cornerstone Pipeline is subject to project sanctioning, reaching commercial agreements and obtaining regulatory approvals thereafter. EDMONTON 21

22 mbpd GROWING OIL SANDS & HEAVY OIL CAPACITY 1,400 ~1,300 mbpd 1,200 1, Syncrude Syncrude Expansion Cheecham Lateral Horizon Nipisi & Mitsue Nipisi & Mistue Expansions Potential Cornerstone Total In-service assets Capacity could reach over 1.3 million barrels per day * Cornerstone Pipeline subject to project sanctioning, commercial agreements and regulatory approvals. See "Forward-Looking Statements & Information." 22

23 GAS SERVICES CUTBANK GAS PLANT CUTBANK COMPLEX RESTHAVEN SATURN I & II KAKWA GAS PLANT ALBERTA MUSREAU GAS PLANT Fort McMurray Edmonton PEACE PIPELINE RESTHAVEN GAS PLANT Gas Processing Plant Redwater Fractionator Pembina Conventional Pipelines Pembina Gas Services Pipelines Gas Services Pipelines Under Construction PEACE PIPELINE FOX CREEK PUMP STATION Operational excellence 96% reliable Regional wells contain total NGL of bbls/mmcf Q average processing volume: 522 MMcf/d (80% increase from Q2 2013) Constructing three new gas processing plants: Resthaven, Musreau II, and Saturn II Kamloops Calgary Maps for illustrative purposes only. SATURN I GAS PLANT SATURN II GAS PLANT 23

24 24 SOLID BUSINESS PLATFORM Strategically positioned infrastructure in active and emerging NGL rich plays Provide gas gathering, compression and shallow/deep cut processing services 100% fee-for-service revenue (no direct commodity exposure) Underpinned by long-term contracts 75% of 2013 revenue was protected with take or pay commitments Expansion projects largely contracted Aggregate supply for Pembina's integrated assets to provide comprehensive services for producers

25 MMcf/d bpd (NGL and C 5 output) EXPANDING TO MEET CUSTOMER DEMAND 1, ,198 MMcf/d 60,000 1, , , , Additional 56% of contracted growth by end of , ,000 Cutbank Musreau Deep cut Shallow cut Expansion Saturn Resthaven Musreau II Saturn II Total In-Service Under Construction bpd (NGL and C 5 output) ~55,000 bpd of NGL Conventional Pipelines Fractionation Marketing See "Forward-Looking Statements & Information." 25

26 NGL MIDSTREAM Redwater West: 73 mbpd NGL fractionator and 7.8 mmbbls of finished product cavern storage Industry-leading rail-based terminal (largest NGL rail yard in Canada) with crude by rail and unit train capability Younger extraction and fractionation facility in B.C. Map for illustrative purposes only. Taylor Gas Processing Plant Redwater Fractionator Midstream Storage Facility Truck Terminal Rail Terminal Pembina Pipelines Third Party Pipelines Empress East: 2.3 bcf/d capacity in the straddle plants at Empress, Alberta 20 mbpd of fractionation capacity and 1.1 mmbbls of cavern storage in Sarnia, Ontario Ownership of 5.1 mmbbls of hydrocarbon storage at Corunna, Ontario Enbridge pipeline access to east/central North American propane and butane markets Empress Redwater Cromer 13.9 Sarnia Coruna MMbbl (net) Lynchburg commercial cavern storage 26

27 STRONG DEMAND FOR OUR SERVICES: FULL NGL SERVICE OFFERING RFS II: Doubling size of Redwater at estimated cost of $415MM expected on-stream Q Incremental 73,000 bpd of C2+ fractionation capacity Committed take-or-pay revenue streams for an additional 10-year term from the in-service date, for 97% of the operating capacity Ethane produced at RFS II will be sold under a longterm arrangement with a major NGL consumer Cavern Development: At Redwater, 13 caverns in service and 5 in development Significant demand in west and east Investigating propane export opportunities See "Forward-Looking Statements & Information." 27

28 bpd NATURAL GAS LIQUIDS FRACTIONATION GROWTH ~250 mbpd RFS III New $400 million 55,000 bpd propaneplus fractionator Underpinned by long-term take-or-pay contracts with multiple producers Leverage design and engineering work completed for RFS I and RFS II In-service in the third quarter of 2017, subject to regulatory and environmental approvals NEW HVP LATERAL New $60 million ethane-plus Willesden Green lateral; connected to Pembina's Brazeau Pipeline for delivery into Fort Saskatchewan area Will bring additional 10,000 bpd under long-term contract into Redwater facility In-service in mid-2015, subject to regulatory and environmental approval In-service assets Projects under development Could triple Pembina's fractionation capacity at Redwater with RFS III See "Forward-Looking Statements and Information." RFS III subject to regulatory approval. 28

29 millions of barrels thousands of barrels STORAGE POTENTIAL NGL SALT CAVERN STORAGE POTENTIAL ABOVE GROUND STORAGE POTENTIAL 40 ~38 MM bbls 2,000 ~1.8 mmbbls 1, , , , , In-Service RFS Under Development RFS Potential Growth Corunna Potential Growth Total Existing Storage PNT-E PNT-E (Under Construction) PNT-H (Under Evaluation) Total In-service assets Projects under development Substantial storage cavern and above ground storage development potential See "Forward-Looking Statements & Information." 29

30 CRUDE OIL MIDSTREAM TAYLOR PRINCE GEORGE Gas Processing Plant Redwater Fractionator Midstream Storage Facility Truck Terminal Rail Terminal Midstream Operations Other Pembina Pipelines Third Party Pipelines Map for illustrative purposes only. ALBERTA CALGARY EDMONTON PEMBINA NEXUS TERMINAL FORT MCMURRAY FORT SASKATCHEWAN Develop and provide terminal, hub & storage services to support the energy industry 630,000 barrels of above ground crude oil and condensate storage capacity Expansion potential to over 3,000 mbpd at PNT-E Over 1,150 mbpd can access PNT through connected pipelines 30

31 SOLID BUSINESS PLATFORM Revenue generated from multiple service offerings Liquids capture and terminaling support growth for other Pembina businesses Interconnectivity increases options for customers Access to 5 diluent streams through PNT and growing Increasing fee-for-service revenue through development of full service terminals, storage and other services Truck terminals bringing ~90,000 bpd on to Pembina's conventional pipelines 1 Crude by loading rail capability Upside opportunities in various market conditions (1) Q Average, includes truck and full service terminal volumes. 31

32 PEMBINA NEXUS TERMINAL Crude oil Dilbit Synthetic Crude Diluent Heavy Export Red indicates Pembinaowned existing and proposed pipelines and connections Dashed lines and/or grey text indicates proposed projects whereas black indicates existing assets See "Forward-Looking Statements & Information." Difficult to replicate our asset locations 32

33 STRONG FINANCIAL PLATFORM

34 LIQUIDITY & ACCESS TO CAPITAL Access capital at attractive rates DRIP (1) currently raising ~$26 million per month; raised $286 million for full year 2013 $1.5 billion credit facility: currently completely undrawn $650 million of preferred shares raised (in 2013 and 2014) Capital Structure (2) 21% 3% $600 million 30-year notes at 4.81% issued in April 2014 $200 million 30-year notes at 4.75% issued in April 2013 Weighted average length of debt is 19 years Weighted average cost of debt is 4.8% 8% 8% 60% Prudent and flexible capital structure Senior debt to total capital ~24% (2) Dedicated to our BBB credit ratings Equity Debentures Preferreds Debt Cash Committed to maintaining our investment grade rating (1) DRIP is the Premium Dividend and Dividend Reinvestment Plan. (2) At June 30,

35 DEBT METRICS Total Debt to EBITDA Funds from Operations / Total Debt 5.0x 35% 4.0x 3.0x 30% 25% 20% 2.0x 1.0x 15% 10% 5% 0.0x Total Debt / EBITDA Funds from Operations / Total Debt Total Debt / Total Book Capitalization Total Debt / Total Enterprise Value 70% 30% 60% 50% 40% 30% 20% 10% 25% 20% 15% 10% 5% Total Debt / Book Capitalization Total Debt / Total Enterprise Value Management continues to demonstrate prudent financial discipline (1) 2012 adjusted for full-year contribution from the Provident assets. All financials as at respective year-end. See "Non-GAAP & Additional GAAP Measures." 35

36 Total Debt / 2013E EBITDA CLEAN BALANCE SHEET 7.0x BBB 6.0x 5.0x A- BBB(H) A- BBB BBB+ 4.0x 3.0x NR BBB 2.0x Ba2 1.0x 0.0x Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Total Debt / 2013E EBITDA Pembina continues to employ significantly less leverage than its peers Source: Company filings, Bloomberg. Ratings based on S&P (Moody/DBRS used if S&P rating unavailable). Peer group includes AltaGas, Enbridge, Enbridge Income Fund, Gibsons, Inter Pipeline, Keyera, TransCanada & Veresen. See "Forward-Looking Statements & Information" and "Non-GAAP & Additional GAAP Measures." 36

37 SUMMARY

38 38 SUMMARY Strategically located and well-established infrastructure Extensive asset footprint with high barriers to entry Assets service long-life, economic hydrocarbon reserves Proven track record and management team History of safe and reliable operations Demonstrated ability to execute on business plan and generate returns for shareholders 38% total return in 2013 Solid historical financial and operational performance under experienced leaders Highly contracted and stable cash flow Fee-for-service focused capital program Strong growth portfolio $1.7 billion capital spending plan for 2014 ~$7 billion of unrisked projects Strong balance sheet Investment-grade credit rating with proven access to debt/equity markets and financial flexibility Attractive debt metrics History of stable and growing dividends Delivered on our promises Increased dividend in 2013 & 2014 Strong foundation set with the right strategy and people in place

39 GOING THE DISTANCE Planning BOB MICHALESKI MICK DILGER MICK DILGER PETER ROBERTSON PETER ROBERTSON SCOTT BURROWS SCOTT BURROWS Chief Executive Officer President & Chief Executive Officer President & Chief Operating Officer Senior Vice President, Chief Financial Officer Vice President, Finance & Chief Financial Officer Vice President, Capital Markets Senior Manager, Corporate Development & Pembina Pipeline Corporation Pembina Pipeline Corporation Suite 3800, th Avenue S.W. Calgary, AB T2P 1G1 Suite 3800, th Avenue S.W. Phone Calgary, AB T2P 1G1 Fax Phone Toll Free Fax investor-relations@pembina.com Toll Free Trustee, Registrar investor-relations@pembina.com & Transfer Agent Computershare Trust Company of Canada Trustee, Registrar & Transfer Agent Suite 600, Computershare th Avenue S.W. Trust Company of Canada Calgary, Alberta T2P 3S8 Suite 600, th Avenue S.W Calgary, Alberta T2P 3S

40 40 NON-GAAP AND ADDITIONAL GAAP MEASURES This presentation uses certain terms that are not defined by GAAP but are used by management of Pembina to evaluate Pembina's performance. Non-GAAP and additional 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. Pembina uses the non-gaap terms "total enterprise value" (Pembina's market capitalization plus preferred shares, senior debt and convertible debentures), EBITDA (results from operating activities plus share of profit from equity accounted investees (before tax) plus depreciation and amortization (included in operations and general and administrative expense) and unrealized gains or losses on commodityrelated derivative financial instruments) and Adjusted Cash Flow from Operating Activities (cash flow from operating activities plus the change in non-cash working capital and excluding preferred share dividends and acquisition-related expenses), and the additional GAAP term "operating margin" (gross profit before depreciation and amortization included in operations and unrealized gain/loss on commodity-related derivative financial instruments). Financial ratios are used to demonstrate financial leverage (extent to which debt is used in a company s capital structure) which include Total Debt (Total Senior Debt outstanding plus face value of Convertible Debentures as per the financial statements of the corresponding reporting year), Interest Coverage (EBITDA divided by Net Interest Paid (interest paid plus interest received), Total Debt to Total Capitalization (Total Debt divided by Total Equity less non-controlling interest) and Funds From Operations to Total Debt (Adjusted Cash Flow from Operating Activities divided by Total Debt). Management believes these non-gaap measures provide an indication of the results generated by Pembina's business activities and the value those businesses generate. Investors should be cautioned that these non-gaap measures should not be construed as an alternative to net earnings, cash flow from operating activities or other measures of financial performance determined in accordance with GAAP as an indicator of Pembina's performance. For additional information with respect to financial measures which have not been identified by GAAP, including reconciliations to the closest comparable GAAP measure, see Pembina's Management's Discussion and Analysis for the fiscal year ended December 31, 2013, available on SEDAR at or in Pembina's annual report on Form 40-F for the fiscal year ended December 31, 2013 available on EDGAR at