Good day, and welcome to the Pembina Pipeline Corporation business update conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Cameron Goldade, Interim Chief Financial Officer. Please go ahead. Thank you, Mary. Good morning, everyone. Welcome to Pembina's conference call and webcast to review our announcement this morning that Pembina and KKR are creating a joint venture to merge our Western Canadian processing assets. On the call today, we also have Scott Burrows, President and Chief Executive Officer, Jaret Sprott, Senior Vice President and Chief Operating Officer, Pipeline and Facilities. This call is also being webcast and will be available for replay on our website. Throughout this call, we will refer to an accompanying presentation, which is also available for download on our website. I'd like to remind you that some of the comments made today may be forward-looking information in nature and are based on Pembina's current expectations, estimates, judgments subject to risks and uncertainties, which could cause actual results to differ materially from expectations. Further, some of the information provided refers to non-GAAP measures. To learn more about these forward-looking statements and non-GAAP measures, please see the press release Pembina issued today, available online at pembina.com and on both SEDAR and EDGAR. I will now turn things over to Scott and Jaret to review the transaction and the joint venture, and then we'll open up the line for questions. Thanks, Cam. With the release of our fourth quarter and full year 2021 results last week, we once again highlighted the momentum in our business arising from higher commodity prices, the advantages we see in the Canadian energy space, and the many exciting opportunities available to Pembina. Today, we are pleased to detail one of those opportunities, the creation of a new joint venture through which Pembina and KKR will combine their respective Western Canadian natural gas processing assets into a single new entity, which will be owned 60% by Pembina and 40% by KKR's Global Infrastructure Fund following the closing of the transaction. The combined entity, which Pembina will operate and manage, will include Pembina's field-based natural gas processing assets, the Veresen Midstream business, and the business currently carried on by Energy Transfer Canada. Concurrently, the new company will also acquire Energy Transfer LP's remaining 51% interest in Energy Transfer Canada. Pembina's Empress, Younger, and Burstall assets will be excluded from the transaction, and Pembina will retain its current ownership position in those assets. Collectively, the ascribed value of these transactions is approximately CAD 11.4 billion, excluding assets under construction. As part of the transactions, Pembina and KKR intend to dispose of NewCo's non-operated interest in the Key Access Pipeline System, or KAPS, following the closing of the transaction, subject to receiving acceptable purchase terms through the sales process. Completion of the transaction is subject to approval under the Competition Act, concurrent closing with Energy Transfer's 51% interest in Energy Transfer Canada and other customary closing conditions. We expect closing to occur late in the second quarter or third quarter of 2022. We are very excited to be creating this joint venture with KKR. We have enjoyed a strong relationship as partners in Veresen Midstream. We work well together, and we share a mutual desire to invest capital and generate attractive returns. The formation of this joint venture is a natural extension of our relationship, and the benefits and strategic rationale of this transaction are compelling. First, the deal brings together three complementary platforms to create a premier, highly competitive Western Canadian gas processing entity with the ability to serve customers throughout the Duvernay and Montney trends from both north central Alberta to Northeast B.C. Second, efficiencies are expected from the combination of three platforms, enabling cost reductions and an enhanced customer service offering. When applied to the combined entity, Pembina's scale and supply chain advantages will translate into value for customers. Further, Pembina will look to operate the assets within Pembina's current operating management system with a focus on operational excellence and continuous improvement. Third, Pembina will increase its ownership in Veresen Midstream and its exposure to volume growth in Northeast BC. With LNG Canada set to come online in the middle of this decade, our own LNG project in partnership with the Haisla Nation and many of the largest and well-capitalized producers in our industry planning multi-phase development projects, Northeast BC is among the most exciting long-term opportunities in Western Canadian energy. Fourth, the transaction will further diversify Pembina's gas processing asset suite and customer base. For example, Pembina will increase its exposure into the Sour Montney in the oily formations of Patterson Creek. We will benefit from increased processing in the Fox Creek area, which will provide opportunities to maximize processing utilization to provide customers enhanced optionality and lower cost structure. Fifth, the transaction provides for an area of mutual interest for natural gas processing in Western Canada, which provides strong structural alignment for the joint venture partners. Within the area of mutual interest, Pembina and KKR will grow their franchise together. We know that KKR is trusting Pembina to be stewards of their capital based on our strong working relationship and our more than 65-year history operating in Western Canada. Finally, the new entity will be well-capitalized and able to pursue future opportunities in a capital-efficient manner. As the energy sector has evolved, the opportunities available from partnerships such as this one between public and private infrastructure owners have become more compelling, particularly in the natural gas processing value chain. The financial merits of this deal are equally compelling with tangible and immediate benefits for Pembina shareholders. Upon closing, Pembina expects to receive approximately CAD 700 million in after-tax proceeds subject to final closing adjustments, with CAD 150 million devoted to additional share repurchases and the remaining approximately CAD 550 million used to repay debt. With the $150 million allocation to share repurchases through this transaction, Pembina's overall repurchase target in 2022 will increase from $200 million to $350 million. Following the planned sale of NewCo's non-operating interest in KAPS, net proceeds after repayment of the KAPS construction facility will be distributed to Pembina and KKR according to their ownership interests. The joint venture is intended to have an investment-grade capital structure consistent with Pembina's financial guardrails, with a target leverage of 3.5x-4x debt-to-EBITDA. The entity will be independently funded and has obtained commitments for CAD 4.75 billion of senior unsecured credit facilities, including a dedicated facility to support the construction of KAPS. We currently expect approximately CAD 4.3 billion of these facilities to be drawn upon closing. We expect mid- to high single-digit accretion to Pembina's adjusted cash flow from operating activities per share over the next five years. The accretion is expected to be driven by a combination of the net impact of the purchase and sale components of the transaction, synergies associated with combining the operations of the three businesses, significant tax synergies and the planned repurchase of Pembina's common shares using cash proceeds obtained from the transaction. We are pleased to announce that upon closing and subject to approval and declaration by its board of directors, Pembina intends to increase its common share dividend by three-quarters of a cent per share per month. This 3.6% increase reflects the immediate cash flow accretion from the creation of the joint venture and recognizes Pembina's long-standing track record of sustainable growing dividend. I'm going to pass it over to Jaret now to talk a bit about the operational aspects of the joint venture. Thank you, Scott. Good morning, everyone. As you can see on the map, the combination of these three platforms creates a scaled and highly competitive gas processing business. Altogether, the new company will serve customers through an industry-leading platform that includes 25 gas processing facilities, providing approximately 5 Bcf/d of capacity and generating approximately $950 million of adjusted EBITDA on a gross basis. The new business is expected to have the following characteristics. Physical capacity utilization of approximately 65%, offering a strong base cash flow stream and incremental low-cost processing capacity to meet customers' evolving needs. Contract tenures ranging from 5 to nearly 25 years with an average of 14 years. Approximately 94% of the operating expenses across the asset portfolio are flow-through. Approximately 80% of the counterparty credit exposure is with investment-grade or secured entities. Finally, tax pools of approximately CAD 4.6 billion. Turning to the next slide, I wanna touch on the governance structure of NewCo. Pembina will serve as the manager and operator of the new company, enabling the joint venture to benefit from Pembina's operating capabilities, institutional knowledge and management systems. Further, the joint venture will be led by Chris Rousch, current President and CEO of Veresen Midstream. With alignment being a governing principle, the joint venture includes areas of mutual interest provisions where Pembina and KKR have agreed to pursue field-based natural gas gathering and processing assets in Western Canada within the joint venture. Finally, as you would expect, the shareholder agreement includes certain governance and liquidity provisions, including right of first offer, right of first refusal, and tag-along provisions. Importantly, the new company will adhere to and build on Pembina's strong program of continuously improving ESG performance. This includes aligning with Pembina's target to achieve 30% reduction in greenhouse gas emissions intensity by 2030 against the 2019 baseline. Pembina's policies and management systems related to health, safety, environment, cybersecurity, Aboriginal and tribal relations and other ESG matters will also be maintained. An ESG strategy will be established after the company is formed. Initial priorities that Pembina and KKR have identified include building upon Pembina's leading safety culture to continuously reduce process and occupational safety incidents with the ultimate goal of zero incidents. Enhancing diversity, equity and inclusion across NewCo assets. Embracing Pembina's commitment to meaningful partnering and engaging with Indigenous communities with an aim of continuously increasing the number of local Indigenous suppliers each year. With that, I'll pass it back to Scott to close out. Thank you. Thanks, Jaret. In closing, I want to reiterate how excited we are about this joint venture and the opportunity to extend our relationship with KKR and achieve strong alignment in our gas business. We believe the strategic rationale and financial benefits we have outlined today are compelling for each of the owners as well as our many stakeholders. Through the combination of our platforms, we are creating a premier and highly competitive Western Canadian natural gas processing entity. With a meaningful platform which spans the Montney and the Duvernay trend, our ability to provide reliable, safe, and high-value service to our customers will create value for them as it will for Pembina and KKR. The entity will be an extension of the owners and apply the same ESG foundation and frameworks implicit in the broader business today. Finally, the financial merits of this transaction are compelling, and we've been purposeful in aligning NewCo's financial policies with Pembina's guardrails. With approximately CAD 700 million in cash proceeds, we are in a position to increase our 2022 share repurchase target by approximately CAD 150 million to CAD 350 million in total and also reduce debt by approximately CAD 550 million. The net benefits of the transactions and associated efficiencies are expected to drive mid- to high single-digit adjusted cash flow per share accretion, setting us up for a solid dividend increase upon closing. Finally, longer term, having a well-capitalized entity able to pursue future opportunities in a capital-efficient manner gives us another tool in our toolkit as value creation opportunities present themselves. With that, we'll wrap things up. Mary, please go ahead and open up the line for questions. Thank you. If you do wish to ask a question at this time, please signal by pressing star one on your telephone keypad. Please ensure the mute function on your telephone is switched off to allow your signals to reach our equipment. Again, please press star one to ask a question. We can now take our first question from Jeremy Tonet of J.P. Morgan. Please go ahead. Hi, good morning. Morning, Jeremy. I just want to dig in on the synergies a little bit more if we could. I guess what's the vision over time? Could these plants be physically connected to create a super system? What type of operating leverage do you see, I guess, to your downstream assets here? Or do you see other kind of, you know, capital synergies going forward here, in the joint entity? Morning, Jeremy, Jaret here. Thanks for your enthusiasm. I need a little bit of that right now. The team and myself are a little tired. I do want to start, Jeremy, by just saying, and to all those on the call, really big appreciation to the deal teams on both sides, KKR and Pembina and Energy Transfer, as well as the external folks that helped us through this. It was a lot of hard work. Really wanted to get that out there. Jeremy, on the operating synergies, obviously in the Duvernay area, some of these assets are within a radius that we would be able to connect. That would be one potential synergy for our customers to really maximize utilization of existing process in that area, drive down the cost structure for the customers, not only from the capital side, but also from the operating side. Looking at the larger portfolio of assets, one of the things we really like about these three platforms is that they are actually kind of fairly distinct in where they're geographically located. As Scott mentioned, the Wapiti plant and the Patterson Creek plants, those are more focused in areas where we don't really participate today. Obviously, we already have a working interest in Veresen Midstream. We'll increase that from 45%-60%. Across the entire portfolio of the gas processing business, Jeremy, you know, we're really starting to take a look at our cost structure and really trying to drive that operational excellence and continuous improvement model, recognizing that costs are increasing for our customers. Even though this is a pretty much a flow through operated asset, we're really trying to drive that down, you know, and looking at the customer's cost structure. We believe there's a lot of benefits there. Got it. Will your NGL pipeline system pick up any incremental volumes over time here, or just wondering downstream synergies you might see as well? All of these plants are in operation today, Jeremy, and Pembina's system picks up a lot of those volumes. Obviously, all of the GBU plants are connected into our pipeline system with the exception of CEIP, that's in Saskatchewan. The Veresen Midstream plants today are connected into Pembina's pipeline system. You know, obviously, all of the liquids that move into the Edmonton market today from other existing assets, Pembina has the benefit of moving those as well. We will work with our customers. We recognize that there are gonna be options out there, and we will work with our customers to continue to provide that integrated value solution. Got it. Thanks. Just one last one on the deal, if I could. Just wondering, if we think about competition antitrust, are there any areas to focus here, you know, to get the deal closed? Does KAPS, you know, need to be sold to make that happen? Just the NewCo with KKR, this might be a question more directed to them, but is this an entity that could go public over time or any color on their exit strategy that you might be in a position to share? Yeah, Jeremy, I think I'll leave the KKR question to KKR to answer. I mean, I think what we tried to highlight is we built in structural alignment into the agreements as well as protections for Pembina. So we feel like we're pretty well protected in various scenarios. But as it relates to KKR's ultimate plans, I'll let you ask KKR. As it relates to a Competition Bureau, you know, like any transaction of this size, it'll go through the normal course. You know, we believe, based on kinda our analysis that we should be able to move through the Competition Bureau here. You know, we did indicate today in a press release that we would be selling KAPS as it's non-core and non-operated. Got it. I'll leave it there. Thank you very much. Thanks, Jeremy. We can now take our next question from Rob Hope of Deutsche Bank. Please go ahead. Morning, everyone. I just wanna get a sense of kind of how you envision the KKR relationship on a longer-term basis. You know, is this a relationship that you can see expand into other asset types? Secondly, you know, are these assets gonna be held in a fund with a kind of a redemption date, so, you know, the relationship may have a sunset date? Yeah, I mean, to speak to the last one, Rob, you know, again, it's probably a better question for KKR. I mean, I think you know, the assets here that they've got are held across multiple funds, so can't really speak to what their exact plans are, but they are held across multiple funds. Sorry, I think there was a second question in there. I'm just wondering, like, could you see your relationship with KKR, you know, expand into other asset types there as well? Yeah, I mean, I think for now, you know, we have a gas processing AMI. I'd never say never, Rob, but right now the focus is on field-based gas processing. Okay. Maybe just as a follow-up, you know, as you take a look at NewCo, you know, is the focus of this entity moving forward gonna be on, you know, greenfield development, including kind of, you know, building out the Hythe expansion as you had pointed out? Or could we see it take a bit more of an M&A tilt and try to consolidate some additional gathering plants? Well, I'll kinda talk kind of short term, Rob. Obviously, integration is gonna be top of mind, not only from integrating the assets commercially, but also with respect to continuing to provide safe, reliable operations for our customers and our staff. That'll be priority one. Then immediately after that is to optimize the existing white space that we have in our assets to drive down our cost structure for our customers. That will be number two. Then I think, you know, with respect to M&A, I can let Scott and Cam talk about this, but Pembina is always interested in accretive M&A projects. I do think that this is a well-operated, well-funded growth vehicle that we now have another alternative to look at those types of opportunities through a different lens. Yeah, I, nothing to add there. I think Jaret answered it. Thank you. We can now take our next question from Robert Catellier of CIBC. Please go ahead. Just a follow-up question on the area of mutual interest. Can you describe the area that's contained in that? Is it just limited to gathering and processing? Good morning. It's basically Western Canada, so the three western provinces. Yes, well defined into the gathering and processing, but the typical assets that are included in our types of infrastructure, so also condensate stabilization, separation, you know, those types of things. It purposefully didn't include our Empress and Younger extraction assets. Those are more like mainline straddles with field-based fractionation. Those were left out at Pembina's request. Okay. You know, just bigger picture here, what do you think this means for the Phase VIII Peace Pipeline expansion and also for frac capacity requirements? I think I kind of view them as, you know, somewhat independent. The activity in behind these assets today, you know, was already taking place. Just overall, the increase in activity that we are seeing in Alberta and we ultimately will see in Northeast BC, due to the high quality of that formation, you know, new infrastructure will be required. I think I spoke on Friday morning about the frac capacity in Fort Saskatchewan and everyone's recognition that that's tightening. It'll be business as usual on that front. We'll obviously try to provide the customers with a lower cost option that ultimately will hopefully yield in more liquids for the customer, higher net back and more infrastructure for Pembina. Okay, last question for me. It just has to do with the accretion. I'm curious as to the shape of that accretion over five years and really the source. I'm curious as to how much you think is coming from just the transaction itself, the purchase and sale, versus the ability to get either lower cost or revenue synergies, especially in light of the cost being largely flow-through. Yeah, maybe I'll try and tackle that, Rob. You are correct. There is a shape to the accretion. As you can appreciate, you know, one of the benefits of this transaction is getting more exposure to Veresen Midstream, which, you know, with everything going on in Northeast B.C., you know, we believe at least has a solid growing profile to it over the next few years as it, you know, ramps into the LNG Canada timeframe. You've also got the benefit of, you know, the tax synergies, which, you know, really provide for, you know, essentially no cash tax payable for the next three to four years in the entity, which is a savings there. You know, there's obviously a portion of this which is related to the buy and sell transactions there and the share repurchases, the latter being you know a fairly modest portion of the accretion. You know, I would say the synergies you know to Jared's point you know we've been relatively conservative so far on the synergies. You know, it's not a huge driver of the accretion in the near term, but I think as we get into the operations and wrap our arms around this certainly as time plays out and we see more opportunities to serve the customers there's potential for that to become more meaningful. Okay. Thank you, guys. We can now take our next question from Ben Pham of BMO. Please go ahead. Hi. Thanks. Good morning. Just had a couple questions on the structure and maybe a bit of clarification on background. Was there any other structures you guys were contemplating as you went through this? Were you considering selling down Veresen Midstream, getting out? Like, how do you figure out what assets to contribute? Like, was there anything else that you were looking at as you went through this process? No, Ben. I mean, I think from early on, we saw the strategic rationale of combining the three platforms. I think as we've tried to highlight, we're bullish on natural gas, especially Northeast B.C. From our perspective, this was the transaction we contemplated. Okay. It looks like, I mean, correct me if I'm wrong. It looks like you're contributing 55% to EBITDA. You're getting an uplift in money back. It appears that the value that you're selling down is more than Energy Transfer. I'm just curious, you know, why 60% then? Like, why not 55/50? You could have effectively sold down more value or created more value by moving the ownership levels around. Yeah, no, I mean, you can appreciate there's a lot of factors that go into that. You know, obviously we always wanna be at least 50/50. That's been pretty consistently within Pembina's DNA as we've looked at other JVs. In terms of the 60/40, you know, some of it comes down to our partners' wishes too and where they wanna be and their desire to you know, to take funds out or put funds into the venture. That obviously played in. You know, we're quite comfortable at these levels and you know, whether we're you know, somewhere between 50/50 and where we are today or you know, or higher as time goes on and it evolves, you know, we're comfortable with that level of ownership. Okay. Maybe one last one on the structure. Again, like how do you think about really cost of capital of this NewCo now? It seems like, you know, the market is 12 times EBITDA. It's above where you're trading. Like what extent do you maybe drop down more assets or sell down assets of Pembina? Like, how do you think about that process? Yeah, sure. Let me. You know, I think first and foremost, we very much structured this vehicle to comply or to fall squarely within Pembina's guardrails. That was really important to Pembina from the get-go. We talk about in the materials, you know, an investment-grade capital structure. We think this entity, you know, will certainly have a, you know, an attractive capital cost or cost of capital, excuse me, to be able to, you know, to execute its business. As Jared said, in terms of dropping down more assets or, you know, extending this vehicle, I think, you know, for the moment, our view of the scope of this entity is around the field-based processing. You know, certainly as other opportunities become available, whether it's greenfield or as Jaret suggested, you know, if there's a compelling acquisition opportunity that arises, that's certainly something that we would look to engage into this vehicle. Okay. Got it. Okay. Thank you. We can now take our next question from Patrick Kenny of National Bank Financial. Please go ahead. Hey, good morning, guys. Just maybe back to the conversation around counterparty risk and cash flow quality profile. I see the 80% there from IG and secured entities, but just curious if we exclude the secured entities, if you had a percentage of EBITDA that was generated from IG counterparties on a standalone basis versus pro forma. Pat, it's Cam. I don't have that number at my fingertips. You know, you can appreciate if we go back to where Pembina is. You know, I think we're sort of north of our guardrail on entities without security or close thereto. The impact, obviously, Veresen Midstream is very accretive to that guardrail given the two entities who are behind Cutbank Ridge Partnership. You know, there is a slightly higher concentration of non-investment grade counterparties in the ETC portfolio, although, you know, with the relative contribution of ETC to this entity, you know, it doesn't move the numbers in any meaningful way. Okay, thanks for that. Also just on a PropCon debt to EBITDA basis, I know you mentioned you were remaining within your guardrails here, but can you just confirm if the deal is credit accretive out of the gate here pro forma, or does it take some time to get that metric back down to where you might be on a standalone basis? Yeah. Pat, if you look at the corporate credit metrics, I mean, the way the agencies would look at it, they don't include joint venture debt in those metrics. Those would certainly be credit positive, you know, strongly credit positive in some cases, you know, through our upgrades, metric levels. If you look at it on a proportionately consolidated basis, I think you have to remember that there's some debt in that CAD 4.3 billion associated with the KAPS construction facility. So when you take that out, you know, we are essentially leverage neutral. I think we lever up by, you know, 0.1 or 0.5 of a turn of PropCon leverage, but we're essentially there. Clearly, as time goes on and that profile grows with what we see in Northeast BC, you know, we're there if not leverage accretive. Got it. Thanks for that, Cam. Just maybe for Jaret or Scott, just curious, you know, with this expanded gas processing footprint, what this might mean for the expansion or longer-term vision for the Prince Rupert LPG terminal. You know, do you see an opportunity to maybe upsize your physical presence on the West Coast? As well, maybe comment on perhaps increasing the contracted profile of that asset base as well. Yeah. Hey, good morning, Pat. I think I mentioned on Friday that we're actively, you know, in the foreseeable future, you know, wanna make a decision on Prince Rupert expansion. Long term, we like international markets for the propane product specifically. This deal doesn't have a whole bunch of influence on that. I very similar to kinda the frack conversation. I see them just as a little bit of independent outcomes. Okay. Thanks, Jaret. I'll jump back in the queue. All right. Well, that looks like it's the last question. Just wanted to thank everybody for jumping on at short notice. As Jaret said, thank all the deal team and our external parties that participated in this transaction. We're really excited about what the future holds. Thank you very much for joining us today. This concludes today's call. Thank you for your participation. You may now disconnect.