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Pembina Pipeline Corp.(NYSE:PBA)

2013 Annual Meeting of Shareholders Conference Call

May 9, 2013 4:00 pm ET

Executives

Robert Michaleski – Chief Executive Officer

Jennifer Harker – Corporate Secretary

Michael Dilger – President and Chief Operating Officer

Operator

Good afternoon ladies and gentlemen and welcome to the annual and special meeting of shareholders of Pembina Pipeline Corporation. My name is Lorne Gordon, and it’s my privilege to be Chairman of the Board of Directors of Pembina and I’ll preside over this meeting as chairman. With me on the podium today are Bob Michaleski, Chief Executive Officer of Pembina, and Jennifer Harker, Corporate Secretary of Pembina. In the audience today, our Pembina’s President and Chief Operating Officer, Mick Dilger as well as a number of representatives Pembina’s Executive management team, employees, and external advisors. With also accusers in attendance today, please stand so we can recognize you.

Thank you. We would like at this time to introduce the Board of Directors of Pembina. They are Tom Buchanan, David LeGresly, Leslie O'Donoghue, Randy Findlay, All Edgeworth, Grant Billing, Jeff Smith, the medium will come to order. I appoint Jennifer Harker, to act as Secretary of the meeting and the representative of Computershare Trust Company present here today (inaudible) to active scrutineers. Will the Secretary please stay with the notice and proof of the mailing of the notice of the meeting?

Jennifer Harker

I have received the declaration from Computershare Trust Company of Canada indicating that the notice of meeting information, circular, form of proxy and 2012 audited financial statements were mailed to shareholders of record as of March 28 2013. I can also advice that the notice of this meetings and related materials were provided to the Directors, officers and auditors of the company.

Unidentified Company Representative

Thanks, Jennifer. I direct that this declaration together with the copies of the documents mailed to shareholders to be kept by the Secretary with the minutes of this meeting. The reading of the notice of the meeting will be dispensed with. The corporation’s [biology] provide that business maybe transacted at a meeting if there is a quorum present.

Jennifer Harker

That quorum is present.

Unidentified Company Representative

Accordingly, I declare this meeting as regularly called and properly constituted for the transaction of business. We’ll start with the formal part of the meeting and then after its determination Bob Michaleski will be making a presentation on Pembina’s activates and will answer any questions at that time. I request to certain shareholders or proxy holders move and second proposed motions at this meeting. This is not intended to limit discussion or to suggest the budget shareholders are not welcome to move or second motion. Registered shareholders and proxy holders should feel free to initiate discussion on any motion. However, I would ask you to hold questions or comments not related to our formal motion to the general question period at the end of the meeting.

All registered shareholders who have not already submitted proxies were provided with forms of ballets for their use in connection with the votes to be conducted at this meeting, when they registered with scrutinizers before entering the meeting. The first item of business is the presentation of financial statements for the physical year ended December 31, 2012. These statements including the auditors report have been mailed to all registered shareholders and to beneficial shareholders who request these materials. Extra copies are also available at this meeting. Brian Rogers of KPMG LLP, Brian, company’s auditors is here in attendance and is available to answer questions following the formal part of the meeting.

The next sight of business is the election of Directors of Pembina to hold office until the next annual meeting or until their successors are duly elected or appointed. The number of directors of Pembina to be elected at this meeting has been fixed at nine. Pembina’s information circular set forth management’s proposed nine director nominees with the Secretary please read the names of those nine persons who have been nominated by management.

Unidentified Speaker

The management nominees are as follows: Grant Billing, Thomas Buchanan, Allan Edgeworth, Randall Findlay, Lorne Gordon, David LeGresley, Robert Michaleski, Leslie O'Donoghue and Jeffrey Smith.

Unidentified Company Representative

Are there any other nominations? If there are no further nominations, I declare the nominations closed. May I now have the motion from the floor to like those nominated as Directors of payment for the upcoming year.

Question-and-Answer Session

Unidentified Analyst

(inaudible)

Unidentified Company Representative

Yes madam. Perhaps move to get a motion on the floor, and then we will have discussion. Thank you.

Operator

So moved.

Unidentified Analyst

Second motion.

Unidentified Company Representative

Is there any discussion?

Unidentified Analyst

Good afternoon. My name is (inaudible) proxy holder and a shareholder and reason I raised my hand so curiously is because many of these meetings that I go to it’s two, two train and you don’t get a chance to have any discussion because it’s all over and said and done with, we all know that the voting shares are held greatly and largely not by the small holder but I stand up here and speak in behalf of not only myself but hopefully some of the small shareholders as well.

In regard to the Directorships that we are to be voting on more correctly, probably already have voted on, I am always dismayed to find that we have Directors doing what they do in specific that we have some Directors that are multiple directors on multiple boards when this is possibly a part time position and I know (inaudible) lovely friend about that because she has four directorship and we always just about that, and we have part time work, we have a Director here who earned according to my information $246,839 which was more than you Mr. Gordon and you are the Chair, because you earned $233,840.

I would love to see many regular Canadian making that kind of money for part time work. So therefore I have to say I am not in favor or putting our stock on the board not just for that reason but generally speaking, the directors as well, that being the compensation directors, which bring it for to the other directors. We have Mr. Billings and Mr. Buchanan who are on the compensation Board.

And I question there, I’m not going to use the word intelligence. Perhaps thinking process is a better more gentle way of putting it because what they are putting forth and what has been put forth is that we have a CEO, who presently is wrecking in $27,562,000 with all forms of compensation, which was put forth by the Board of Directors. And I know that we’re going to be given the sad story that oil is compared to 30 to 40 other people in the city who are in and amongst the same pool and they are all scratching each others backs.

But as a million people in Calgary, I wonder how many of those millions got a 15% raise, which is what Mr. [Miskoliski] have I pronounced it correctly, I’m trying. He got a 15% rates from last year to this year. I’d also liked to see how many regular million people in Calgary get a 25% rate, which is what the directors’ sound quite all right to do with Mr. Delger from last year to this year. I know Mr. Delger got on some extra responsibilities. But even so making a $1.74 million is just a little bit more than my stomach can take.

Mainly of the directors are making these kinds of decisions and it comes out of our bottom line and therefore comes out of the 4.79% yield that we are getting as of this morning and I know there is other better places to put our money and some of us are still here because we bought at a lower rate and we’re getting a better yield. But for those who are just purchasing in that’s the yield they’re getting and perhaps if some of those millions were to be directed to the bottom line where the yield would be put up a little higher for the regular small shareholder, we get maybe a little better return. And so therefore I’m saying no to the directors, they are just earning too much money and not giving us the best paying for our dollar. Thank you.

Unidentified Company Representative

Well, thanks for your comments and we will take them as submitted. Bob will be making presentation later in the meeting, and he will be reviewing with you the total return for shareholder over the last year, and I suspect your financials are good to more than 4.79%, but thank you for your comments.

As previously noted, registry shareholders who have not submitted a proxy or provided with forms of ballots of un-registration with the scrutineers, the blue ballot is the ballot to be used for this vote. If you are a registered shareholder and have not received a blue ballot, and have not completed a proxy, please raise your hands so that the scrutineers can provide you with the appropriate ballot.

It appears that everybody has a ballot and accordingly the instructions would be to please mark and X in the box opposite for or with whole as the case might be, then sign and put your name on the lines provided. Please hold your ballot up and the scrutineers will be please to collect them. Thank you.

This scrutineers will count the ballots and report back to us later in the meeting. The next item on the business is to – is the appointment of the auditors of Pembina, may I have motion that the firm of KPMG LLP of Calgary, Alberta we appointed auditors of Pembina until the next annual meeting or until the successor is appointed, and that the remuneration and the scope of their audit is to be fixed by Pembina’s board upon a recommendation of its audit committee. So (inaudible).

Unidentified Company Representative

I second the emotion.

Unidentified Company Representative

Is there any discussion on emotion? All in favor signify by raising your right hand. Contrary. The emotion is carried unanimously, thank you. The next item of business is at this meeting is the approval of Pembina’s approach to executive compensation has more fully discussed in Pembina’s information circular. In order to be past, the non-binding resolution must be approved by a majority of the votes cast by Pembina’s shareholders, President [person] are represented by proxy at this meeting. At this time, I would ask to have emotion to conduct a vote of Pembina shareholders to approve Pembina’s approach to executive compensation as set forth in Pembina’s information circular.

Unidentified Company Representative

Mr. Chairman I move that the resolution approving Pembina’s approach to executive compensation all is more particularly described in Pembina’s information circular be approved and authorized by Pembina’s shareholders as a non-binding resolution of Pembina’s shareholders.

Unidentified Company Representative

I second the emotion.

Unidentified Company Representative

Thank you. You have heard the emotion is there any discussion? I understand previous vote that everyone has the appropriate ballot, and I would therefore request this is the yellow ballot. If you have completed your yellow ballot, if you raise your hand the scrutineers will collect the ballot later in the meeting.

The next item of business at this meeting is the approval of the amendment to Pembina’s articles to create a new class of preferred shares designated as Class A Preferred Shares, or it’s more fully disclosed in the Pembina’s information circular.

In order to be passed the special resolution must be approved by at least sixty six and two-thirds percent of the votes cast by Pembina’s shareholders present in person or represented by proxy at this meeting. At this time, I would ask to have a motion to conduct a vote of Pembina shareholders to approve the special resolution which is set out in Appendix A of Pembina’s information circular.

Unidentified Company Representative

Mr. Chairman, I move that the special resolution in Appendix A of Pembina’s information circular approving the amendment to the Pembina’s articles to create a new class of preferred shares be approved and authorized by Pembina’s shareholders as a special resolution of Pembina shareholders.

Unidentified Company Representative

Motion.

Unidentified Company Representative

You have heard the motion. Is there any discussion?

If there is no discussion, we will proceed with voting on this matter by ballot. And, as I mentioned, I understand everybody has the ballots they require, the ballot for this resolution is the pink ballot and you’re requested to fill it out marking for recast as the case may be. Thank you.

The next item of business is the approval of the amendment to Pembina’s articles to change the designation and terms of Pembina’s existing internally held preferred shares as more fully disclosed in Pembina’s information circular. In order to be past the special resolution must be approved by at least 66.66% of the votes cast by Pembina shareholders, president person are represented by proxy at this meeting.

At this time, I would ask to have a motion to conduct a vote on Pembina shareholders to approve the special resolution, which is set out in Appendix B of Pembina’s information circular.

Unidentified Company Representative

Mr. Chairman I moved to special resolution in Appendix B of Pembina’s information circular, approving the amendment to Pembina’s article to change the designation in terms of Pembina’s existing internally help the first shares be approved and authorized by Pembina shareholder as a special resolution of Pembina shareholders.

Unidentified Company Representative

Got it. I second the motion. Thank you.

Unidentified Company Representative

You have varied the motion and is there any discussion? There is no discussion. We will proceed with voting on this matter by ballot. And once again I understand that everyone has the ballot that they require and this is the purple ballot, actually it’s already been completed. Thank you.

The next item of business is the approval of the amendment to Pembina’s articles to increase the minimum number of – the maximum number of Director of Pembina from 11 to 13, as more fully disclosed in Pembina’s information circular. In order to be passed, the special resolution must be approved by at least 66.66% of the vote cast by Pembina shareholder president person are represented by proxy at this meeting. At this time, I would ask to have a motion to conduct a vote of Pembina shareholders to approve this special resolution, which is set out in Pembina’s information circular.

Mr. Chairman, I move that the special resolution in Pembina’s information circular approving the amendment, the Pembina’s articles to increase the maximum number of directors of Pembina from 11 to 13 be approved and authorized by Pembina shareholders as a special resolution of Pembina shareholders.

Unidentified Company Representative

Second motion.

Unidentified Company Representative

You have heard the motion is there any discussion on the motions?

Unidentified Analyst

I am here again. I'm bearing a (Inaudible). God Almighty, why do we need to have more, we’re already spending enough money on you guys, really it is just unconscionable the way the group with you want to spend money. The number we have is more than sufficient. Other companies that I go to and I have already gone to about eight or nine meetings in the last week, they don't have that many and I don't see any need for having more, it's just unconscious. No.

Unidentified Company Representative

Is there any other discussion on the motion? Thanks very much.

Again we will proceed by way of ballot, and the ballot to be used here is the green ballot. Appears to be completed thank you. Again we will hear from computer share momentarily.

The next item of business is the approval of the continuation, amendment, and restatement of Pembina‘s shareholders rates plan; as more fully disclosed in Pembina’s information circular. In order to be passed the ordinary resolution must be approved by a majority of the votes cast by Pembina shareholders, present in person are represented by proxy at this meeting. May I have a motion to conduct a vote of Pembina shareholders to approve the resolution, which is set out in Pembina’s information circular.

Unidentified Company Representative

Mister Chairman, I move to the resolution in Pembina’s information circular approving the continuation amendment and restatement of Pembina’s shareholders rights plan be approved and authorized by Pembina’s shareholders as an ordinary resolution of Pembina’s shareholders. Thanks Scott.

Unidentified Company Representative

All second motion.

Lorne B. Gordon

Thank you, Linda. If there is no discussion, once again we will vote by ballot and this is the grey ballot. It appears to be all completed and thank you. I think we’ve covered all the resolutions. We will take a short adjournment and we will tabulate the results from a computer share and we will report our results momentarily

Unidentified Company Representative

Ladies and gentlemen, I now have this scrutineer’s report and call the meeting back to order. I received the scrutineer’s report on the balance required for each of the items of business considered at the meeting and voted on by way of balance. The results were as follows: in respect of election of Directors Pembina, I am pleased to announce that each of Director nominees received an excess of 82% of the votes cast to be elected, the particulars of which will posted on SEDAR following the meeting. The resolution to approve the non-binding advisory board on the approach to executive compensation has been approved by approximately 96% of the votes cast. Accordingly, I declare the non-binding resolution to be passed. The special resolution to approve the amendment of the articles of Pembina to create a new class of preferred shares has been approved by approximately 93% of the votes cast.

According, I declare the special resolution to be passed. The special resolution to approve the amendment to articles of Pembina to change the designation and terms of Pembina’s existing internally held preferred shares has approved by approximately 94% of the votes cast. Accordingly, I declare the special resolution to be passed. The special resolution to amend the articles of Pembina to increase the maximum number of Directors from 11 to 13 has been approved by approximately 97% of the votes cast. Accordingly, I declare a special resolution to be best. The ordinary resolution to approve the continuation, amendment and restatement of Pembina’s shareholders’ rates plan has been approved by approximately 95% of the votes cast. Accordingly, I declare the ordinary resolution to be passed. As there is no further business to be considered at the meeting and I have motion to terminate the meeting.

Unidentified Company Representative

I move this meeting to terminate.

Unidentified Company Representative

Second emotion, all on paper. I declare a formal portion of this meeting terminated and thank you all very much for coming out on a sunny Friday afternoon, but you’re going to be very – please to hear what Bob has to say about the excellent results for Pembina and the activities with we are pursuing going forward. Thanks very much for your attention.

Robert Michaleski

Thanks, and good afternoon everyone. For me it’s a great privilege for me to welcome all of our new and existing shareholders, I would like to thank those of you in the room and also on the webcast for joining us today for Pembina’s 2013 Annual Meeting of Shareholders. Last year when we met, we had just completed our acquisition of Provident Energy, and we are embarking on a new journey as a much larger fully integrated energy transportation and midstream service provider.

I’m very excited and proud to share with you the progress we’ve made as the combined entity. I believe that together we have achieved and we’ll continue to achieve so much more than our two companies on a standalone basis. With our expanded asset base, and world class team of employees, the future for Pembina has never been brighter. Now today I’m going to briefly go over Pembina’s past performance including the first quarter results of 2013, which we released yesterday. Then I’ll discuss the many exciting growth projects we’re working on to drive long-term and sustainable shareholder value.

After my remarks, we’ll take questions from the floor and then have a chance to mingle. Before we get started, I’d like to draw your attention to our disclaimer and remind you that many marks today may include forward-looking information and statement. I encourage you to review the slide and our filings on CEDAR and EDGAR for more information regarding risks and uncertainties that could affect our future results of operations. Now Pembina has always been committed delivering on our promises, while in many ways, our company has changed over the last year, our vision has not. We strive each and everyday to achieve our long range vision of being the operator, employer, partner, neighbor and investment of choice in North Americas energy infrastructure sector.

Our value proposition rests on four key pillars. First as one of Canvas is largest and most diversified energy infrastructure in service providers. We view ourselves as an industry leader in our space. We continually look for ways to maximize our asset base and provide MTN service offerings to our customers while seeking to meet or exceed industry best practices for being a responsible operator. To us that means safe, reliable and responsible operations.

Second, we have a very solid business platform. We have a great suite of assets that overly economic and prolific geological formations. And we have a strong balance sheet to support our continued growth. Further, our cash flow stream is for the most part dominated by fee for service revenue. This provides us with cash flow certainty, so we can invest in those opportunities that will continue to enhance the shareholder value.

Third, we are seeing continuing demand for our services, but the current commodity price environment, relatively high oil prices and low natural gas prices, there continues to be an industry focus on conventional oil and condensate, liquids rich natural gas drilling and increased production from the oil sands. Now this combined with plays that are being further developed on the back of technological advances all point to increase demand for payment of full suite of crude oil and NGL pipeline and extreme services. And last but of course not least, we believe we are well positioned for future growth.

This is evidence for our capital spending plan of over $1 billion for 2013 and the fact we continue to secure attractive fee-for-service projects that leverage our integrated assets and service offerings.

Now, this slide provides a quick overview of where we stand today. Over the last year, our company has grown substantially. We now have a total enterprise value of approximately – well just over $12 billion with about 308 million shares outstanding. I still think back to 1997 when we went public and we had an enterprise value have $600 million. The scale and scope of our high quality assets together with our proven strategy positions us well to continue delivering long-term and sustainable returns for our shareholders, something that has always been a homework of our company.

Today, we pay out dividends of $1.62 per share per year and based on our share price today which is hovering around $34.40, this amounts to an effective yield of just under 5%. With the future that has never looked brighter, there is no doubt in my mind that it is a direct result of our past successes and our commitments to delivering on our promises which is broadest to where we stand today.

Now, this slide, I just like to maybe just pause on this slide. The value we generated while our yields are slightly under 5%, but we’ve looked at our 10-year returns would you look at capital appreciation plus dividend.

We’ve actually produced a total return of approximately 565% from the beginning of 2003 to May 7 of 2013. Now I’d have to say that those results are pretty spectacular and I think the fact is that I think we’ll talk about it a little bit further that we think that we can continue to deliver strong results. So we have a strong track record of generating consistent and sustainable dividends to our shareholders. I am very proud that since Pembina was first listed on the Toronto Stock Exchange, 15 years ago as an income trust, we’ve distributed almost $2.5 billion to shareholders, and our 10 year annual accumulated growth rate and dividends is approximately 4%.

Now, the growth and diversification of our asset base along with maximizing our existing operations has also resulted in an impressive cash flow per share growth profile as evidenced by this slide. Since 2003, we’ve grown our cash flow per share at a compound annual growth rate of 8% and we see a compound annual growth rate and operating margin, totaling approximately 18%. And in the past few months, we have had much to be proud of. We released record first quarter results yesterday, announced an increase to our capital spending plan, which is the largest in the company’s history and we made substantial progress in our next wave of growth opportunities.

This next slide shows us an introduction to each of our business units and I’ll quickly provide a few quick highlights for each. First is our Oil Sands & Heavy Oil Business, which plays an important and growing role and supporting Alberta’s oil sands industry. With long-term agreements underpinning each of the five pipelines in this business, we earn a fixed return on invested capital, are able to fully recover operating expenses and have no throughput risk.

Since our acquisition Cutbank Complex in 2009, our GAAP service business has diversified and vertically integrated our asset base enhanced the flexibility and integration of our businesses and increased our fee-for-service revenue. We are significantly expanding this business unit with numerous expansion projects, which we expect will provide approximately 1 billion cubic feet a day our processing capacity by late 2014.

Now Pembina's Conventional Pipelines business remains the backbone of the company, and those so well developed strategically located network that allows us to transport crude oil and natural gas liquids from key producing areas in both Alberta and British Columbia to transportation infrastructure and ultimately to market. With increasing volumes and demand, we’re working to expand our Conventional Pipeline capacity by about 40% and possibly more in the future whether open season process which currently way.

At last our Midstream business increases our optionality and provides ancillary value-added services for customers, which around other fully integrated service offerings. These services range from crude oil truck, crude oil truck and full service terminals and hydrocarbon product storage to rail on and off loading and NGL fractionation. Overall, we have a very robust speed of assets, and we continue to see strong performance and growth opportunities any to these businesses.

Now here you can see that Pembina is well positioned with operations across the hydrocarbon value chain. We have the ability to grow our business by providing our customers with the one stop shop for field handling, processing, transportation, storage and fractionation, and marketing, which helps our customers to find an integrated solution, that adds value to their own businesses.

Our recently announced $1 billion NGL infrastructure expansion, which I’ll discuss momentarily is a great example of how we help meet our customers’ ongoing needs. This strategy enables us to generate revenue every time the molecule is touched, which of course is the way we create ongoing value for our shareholders.

Now, over the years, we’ve grown our assets, integrated our operations and branched out geographically. We now have an impressive operating footprint, the majority of our assets in Western Canada, but we also have facilities located in natural gas liquids markets in Eastern Canada and United States. Now making sure our assets are located in key areas near long life, economic, hydrocarbon reserves is critical. It allows us to take advantage of the production growth we are seeing by producers in many areas of the Western Canadian sedimentary basin that may not have been developed without the advances in technology we’ve seen over the last few years. This is resulted in many new and exciting growth projects for Pembina, some of which I’ll discuss in a moment.

Pembina has established infrastructure in key growth regions which include the Montney, Duvernay, Alberta Deep Basin, Pelican Lake heavy oil, Athabasca oil sands, the Cardium, Swan Hills, Marcellus and Utica. The strategic location of our assets along with our unwavering commitment to providing safe and reliable services for our customers has resulted in a larger suite of growth projects in Pembina’s history. Between now and 2015, we expect to have almost $3 billion in announced projects coming on stream and by the end of this year, we expect to have our Saturn I facility and the first phases of our NGL and crude oil pipeline expansions and service. And we have identified another $2 billion our very promising opportunities along the hydrocarbon value chain which we are currently investigating.

Now this growth extends across all of our operations, where we are seeing a hot bed of activity in the NGL and condensate space right now. Our plans include capitalizing on this activity, which can be seen in our recent announcement to invest $1 billion by expanding our NGL infrastructure.

Crude oil activity hasn’t slowed down either. We are currently undertaking two major crude oil system expansions to keep up with customer demand and for transportation capacity. We are also working on our open season to assist the long-term needs of our customers. The preliminary results of the open season were sufficient to allow us to proceed with the next steps.

What is most worthy about our capital spend anytime going forward is that it is almost entirely directed towards deeper service projects. The goal here, of course, is to reduce volatility and secure long-term cash flow that ultimately generates returns for shareholders. The largest of our proved capital investments, which I mentioned earlier is $1 billion NGL infrastructure expansion. This is made up of three components as detailed in this slide.

Now, with respect to our $170 million Saturn II facility, we have entered into a 10-year firm service contract with a third-party for 130 million cubic feet per day of facilities 200 million cubic feet per day capacity. Now, based on full utilization of that facility, we expect Saturn II will be able to extract approximately 13,000 barrels per day of natural gas liquids, which we will then transport on the same pipeline lateral, terminal is currently starting for Saturn I through our Peace Pipeline.

This project was particularly attractive for us as we were able to leverage the engineering work we completed for Saturn I and thereby reduced our overall costs and schedule. Our project timeline indicates the facility could be up and running in late 2015, but we are still in the early days and need to secure our regulatory environment approvals.

The next piece of NGL infrastructure expansion in our Phase II pipeline capacity expansion on Northern/Piece NGL Systems; we expect that this expansion will cost us about $415 million and will bring capacity on Northern and Peace Pipelines 220,000 barrels per day from our current 167,000 barrels per day and to mid-2015.

We are also going to be doubling our fractionation capacity at our Redwater site with our $415 million RFS II project. Again, with this project, we are able to deliver to engineering work that was completed for the original Redwater facility, which makes us all the more attractive. RFS II, like RFS will have 73,000 barrel per day ethane-plus fractionator

We have secured committed take or pay revenue streams for a 10 year term from the in-service date or 97% of the operating capacity. Further, ethane produced at this facility will be sold under long-term arrangement with the major NGL customer. We are aiming to have RFS II in-service in late in the fourth quarter of 2015.

Our success in security and suite of projects, which you can really see compliment one another is a clear demonstration of the value of the Provident acquisition and our resulting integrated service offering.

We are able to take liquids-rich gas from the field, process it at our gas plants, extract valuable NGL from gas stream, transport those natural gas liquids on our pipelines and then fractionate them to the components for end users at our Redwater facility.

In the case of propane, we are able to rail this product to customers as needed. The ability to offer this one stop shot was one of the key driving factors and our decision to purchase Provident in late 2011 and I think you will agree that we are really starting to see the strategic synergies, we believe would result from combining our two asset bases.

Still on the subject of the NGL, this slide shows our increasing gas processing capacity and the associated natural gas liquids we are presently and will be able to extract in the near future from the liquids rich gas streams processed at our plants.

We're currently working on three projects in this business, the Resthaven facility, Saturn I and Saturn II. What is interesting to me is that when we purchased our Cutbank Complex in 2009, we were looking for a way to move a step up to hydrocarbon value chain and become a more integrated business. We believed as an operator, transporter and service provider, we would be able to maximize the gas processing assets and also generate feedstock for our pipelines.

This model has proven quite successful for us with five expansions having been completed duration less than four years. And these are attractive projects, which is the most part underpinned by long-term deeper service contracts.

We are very excited that by 2015, we should have over 1 billion cubic feet of gas processing capacity and an associated 55,000 barrels per day of natural gas liquids and compensate that can be transported on our pipeline systems.

I'm excited to have the opportunity to share with you now a video of the progress we are making at our Saturn I site, which shows the tower being lifted for our deethanizer. This is as very important milestone in the construction of this project and I'm proud to say that the team completed on time without any safety incidents. So there's going to be a video, here we go

Well, we’re seeing a lot of activity in the NGL space that doesn't mean the rest of our business is slowing down. In fact, you’re continuing to see a strong demand for increasing crude oil and condensate capacity in our pipeline systems as well.

This slide shows the strength in our throughput profile over the last several quarters. It wasn't too long ago that we plan for an annual 3% to 5% decline rate of pipeline volumes, due and national depletion of the reserve space. Today we're not only seeing a reversal of the trend, but looking out five or so years we're seeing the need for even more capacity, as many of our customers are ramping up production.

As an example the Duvernay has shown promising yields to condensate, which can be used to [dilute] heavy oil and bitumen for transportation on pipelines, as well as ultra light oil. We understand that the economics of place like the Duvernay are becoming increasingly favorable with improvements in drilling and recovery technology. And our present commodity price environment is still exploring exploration.

I was indicated on the previous slide, we are supporting growth and some of the most attractive place in the Western Canadian Sedimentary Basin. And seeing the resulting increases and throughput on our systems. In fact, some of our pipelines are currently operating at or near capacity. This slide details the expansions we are currently pursuing to offer our customers additional capacity. We have thus far been able to keep up with demand, but we’re maybe in need of more capacity in some of our pipelines even beyond the expansions detailed here.

To this end, as I mentioned earlier, we recently completed our non-binding open season for our hydrocarbon products we transport and overdated transportation in services, so we could assess the needs of our customers and entry at large going forward. The volumes resulting from this open season were sufficient to allow us to proceed with next steps and may ultimately mean further expansion of our existing systems.

Now looking at our financings activity for 2013, Pembina is currently in a strong financial position with approximately $1.4 billion available on a $1.5 billion credit facility. We also recently completed $345 million equity offering and a $200 million 30-year note offering, which further gives us confidence and our ability to execute our growth strategy.

At today’s meeting, our shareholders voted in favor of amending our bylaw such that we can issue preferred shares. This will allows us to further diversify our capital structure should we choose to and lend us even more confidence in our ability to fund the capital program going forward.

Now we believe that we will have ongoing access to capital markets at attractive terms to fund our growth projects going forward. And we have opened to U.S. investors to assist the funding our 2013, 2014 plans.

Now all of this gives us a high degree of confidence in moving forward with our business strategy and our plans to grow responsibly. We intend to continue generating stable dividends in the near-term, while also steadily building shareholder value over the long-term. Most of this ever the best way to predict a company’s future is to look at its past. Well I believe at Pembina our past is truly indicative of what we plan to do and where we plan to be in the future.

We have a proven track record and experienced management team who take a lot of pride and continuing to deliver on our promises, to shareholders, stakeholders, employees, our neighbors and our operating communities and others. Something that we’ve been doing since 1997 and something we intend to do going forward. We will continue to focus on how we get the job done and set a high standard for safety, environmental responsibility and being a good corporate citizen.

We also have an envied suite of assets which is well-established and located in prime areas new long-life resource plays and key markets. These assets generate a highly stable contacted cash flow stream and with our fee-for-service focus capital program, we see the predictability of our cash flows increasing in the future.

Now beyond the projects, I outlined today, which totalled over $1 billion, we have a very promising growth portfolio with unrest opportunities in the range of $5 billion. Our confidence in being able to execute on these opportunities underpinned by our strong balance sheet, investment grade credit ratings and our ability to access the debt and equity markets on an attractive terms.

So in closing, I would like to reiterate that we got tremendous assets, strong financials, great customers, motivated employees and forward-looking business strategy that will enable us to achieve our vision of being the investment of choice in North America’s energy infrastructure sector. I feel privileged to be part of this great team and thank you for your continued support.

We will be happy to now take any questions that people may have in the audience. With that I would like you to step forward to the microphone if you have any questions. If I can answer them, we have a lot of other people in this room that will be able to answer them, but I’ll do my best. Well, that’s pretty easy. Well, we’re going to hang around here for a bit, so I think if you have any questions, oh there is a question here, yes.

Unidentified Analyst

Of course, of course, we’ve got to have question here. I know that we’ve got a BBB rating and I am just wondering how is that going to impact, if and when we go forward with the preferred shares and so forth, what we can expect to get out of the returns for the preferred shares?

Unidentified Company Representative

Well, I don’t think the BBB credit rating is going to have any really significant burying on our ability to raise preferred share equity. I think that we probably have had lots of opportunities to raise preferred shares but unfortunately our articles did not allow us to do so. So with the approval that we have today, we should be able to access the preferred share market and I don’t know what the rates or coupons are these days, but they are probably somewhere around 4.75%, so that would be a reasonable expectation I would think.

Unidentified Analyst

Okay. That was question number one. Question number two is getting back to a familiar background, what’s going to happen when you decide to leave us because I know that our lovely directors I think have decided somewhere along the line that there is a $5 million or close to $5 million payout that we have to give you on top of which, I think, we’ve given you $19 million in value for shares, so that’s close to $20 million if you’re leaving you decide to cash in, what does that do to our bottom line?

Unidentified Company Representative

Well, so your question is really related to the, what are the plans for the future and we have been planning for the future for several years here. We do have a succession plan in place for not only for the Board of Directors, but for the management team. I believe we built a tremendous team here at Pembina to be able carry forward as we move on. As far as my own personal situation is concerned, I mean, obviously information circular show what there is there, that’s a lot of – and lots of that’s my personal network is tied up in this company and I believe in this company, and I will continue on as long as I can.

Unidentified Analyst

Okay. Thank you. And I’m glad to see that our shares have gone up and value (inaudible). You have indicated I will say that, however, for those of us just like a house, it’s great to know your house has gone up in value. It’s great to know your shares has gone up in value that until your cash (inaudible) it doesn’t do us any good, but don’t let them go down, and Paul I’m telling you don’t let the share value go down.

Unidentified Company Representative

Well that’s my margin orders I understand you got it clear.

Unidentified Analyst

Okay. And make sure you got that dividend up to something that’s little more reasonable, because right now on $4.79 I’m sorry for those who are purchasing its not reasonable it’s going to be better than that. Thank you.

Unidentified Company Representative

Well, what we’re going to do what we can, and I think as indicated in my speech, I indicated that the future looks very much like the past, and I believe that we’ll be able to continue to deliver the strong results. We’ve talked about cash flow per share growth of somewhere between 8% and 10%, and dividend per share growth of somewhere between 3% and 5%. And I think that’s pretty remarkable in the space that we’re in today. And so I think we’re on track to do exactly that. Thank you for your questions.

Unidentified Analyst

My name is [Karl Bodon] and I’ve just represent my wife and I just wanted to comment, because sometime if I don’t know if you think about guys like me and others that kind of depends on what you do to get the income that we’re looking for to have a comfortable retirement. Hence from that standpoint, I just feel it, I need to stand here. Thank you for the tremendous job that all of you have done, and so partially the lady behind me. You’re [sadly] when you compared to the rest of your peers, it’s not at all the line and Paul if anything I think you in the low end of the range.

Unidentified Company Representative

That’s what I try to tell the competition [Kennedy] as well.

Unidentified Speaker

Yes, and I must also say, I was not put up to do this, this is of freewill and choice, but knowing I’ll keeping aside company like Pembina it’s was a great deal realizing to hundreds of thousand of people they were may be small investors, those had invest $10,000 or million dollars of somewhere in between and so this is very significant and just wanted to know about is appreciated. Thank you very much.

Unidentified Company Representative

Thank you, I think your observation is really quite valid I think that pretty much everybody at Pembina including our Board of Directors we do worry about our shareholders and shareholder base we know that a lot of people are really looking at their investment Pembina to supplement retirement income and so on. I think is that is probably one of the first thoughts in our mind everyday is to not ever reduce a dividend to our shareholder and do the best that we can to increase it and to the extent that we can increase the underlying value of the investment in the company, well that’s positive to because that, that’s going to be available in some point in time to be distributed somewhere to others whether is to family or whoever. So, it’s first of all, on the mine and appreciate the comment. Thank you.

Are there any other comments, well, if they’re not, we’re going to be round with some refreshments to be shared outside. Management is available the Board of Directors available to take any questions that you may have. So thanks again for participating today with that pretty much of full houses [Mark] on a warm Friday afternoon when people could be doing other things, but we do appreciate your interest and being here today and we look forward to continue to deliver on our promises to you shareholders. Thanks again.

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Source: Pembina Pipeline's CEO Presents at 2013 Annual Meeting of Shareholders Conference (Transcript)
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