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Keyera Corp. Announces Year End 2012 Results

CALGARY, Feb. 14, 2013 /CNW/ - Keyera Corp. (TSX:KEY)(TSX:KEY.DB.A), announced 
their 2012 year end results today, the highlights of which are included in 
this press release. The entire press release can be viewed by visiting 
Keyera's website at www.keyera.com or, to view the MD&A and financial 
statements, visit either Keyera's website or the System for Electronic 
Document Analysis and Retrieval at www.sedar.com. 
HIGHLIGHTS 


    --  Keyera delivered solid results in 2012 from all segments of its
        business and kicked off a number of exciting new growth
        initiatives.
    --  Earnings before interest, taxes, depreciation and amortization
        (1,2) ("EBITDA") were $326.8 million in 2012, 28% higher than
        the $255.1 million posted in 2011.
    --  Net earnings in 2012 were $130.6 million ($1.71 per share),
        compared to $135.2 million ($1.91 per share) in 2011.
    --  Distributable cash flow(1,2) for 2012 was $199.9 million ($2.62
        per share) compared to $202.2 million ($2.85 per share) in
        2011, largely due to weaker propane margins and higher
        maintenance capital costs in 2012.
    --  Keyera's Gathering and Processing business delivered operating
        margin(3) of $150.9 million in 2012 compared to $152.7 million
        in 2011. In the NGL Infrastructure segment, operating margin(1)
        of $112.5 million was $43.6 million, or 63% higher than the
        prior year. Marketing operating margin(3) was $92.0 million in
        2012 compared to $76.5 million in 2011.
    --  In the fourth quarter, Keyera announced plans to enhance
        recoveries of ethane and other NGLs at its Rimbey gas plant
        through the addition of a 400 million cubic feet per day turbo
        expander unit.
    --  Keyera also has a number of projects underway in its NGL
        Infrastructure segment. At its Fort Saskatchewan facility,
        construction began on a 30,000 barrel per day de-ethanizer, as
        well as additional underground NGL storage capacity and
        development of a new brine pond. To support deliveries of NGLs
        and crude oil to customers by rail, Keyera is developing rail
        terminals at South Cheecham, south of Fort McMurray, and at
        Hull, Texas.
    --  In December, Keyera added iso-octane rail loading capabilities
        at its Edmonton Terminal and loaded the first rail cars for
        delivery to customers on the Gulf Coast. Keyera expects to
        increase rail deliveries of iso-octane produced at Alberta
        EnviroFuels in 2013.
    --  Keyera increased the size of its unsecured revolving credit
        facility from $500 million to $750 million, with the potential
        to increase it to $1 billion, subject to certain conditions. In
        addition, the term has been extended to December 13, 2016.
    --  Total growth capital investment was $446 million in 2012, of
        which $281 million was acquisitions.  Keyera expects its 2013
        growth capital investment, excluding acquisitions, to be
        between $250 million and $300 million.(4)

(1)See "Non-GAAP Financial Measures" on page 47 of the MD&A.
(2)See page 35 and 36 of the MD&A for a reconciliation of distributable cash 
flow to cash flow from operating activities and EBITDA to net earnings.
(3)See Note 30 to the Financial Statements.
(4)See "Capital Expenditures and Acquisitions" on page 32 of the MD&A for 
further discussion of Keyera's capital investment program.
                                                             
                              Three months ended  Twelve months ended
                                 December 31,         December 31,

Summary of Key Measures
(Thousands of Canadian
dollars, except where noted)     2012        2011      2012       2011

Net earnings                   56,651    (21,188)   130,601    135,218

  Per share ($/share) - basic    0.73      (0.30)      1.71       1.91

Cash flow from operating       26,053      50,792   237,979    178,215
activities
                                                           

Distributable cash flow(1)     74,396      51,207   199,873    202,187

  Per share( )($/share)          0.96        0.72      2.62       2.85

Dividends declared             41,104      35,760   157,095    136,175

  Per share( )($/share)          0.53        0.50      2.06       1.92

  Payout ratio %(1)               55%         70%       79%        67%

EBITDA(2)                     109,195      26,810   326,843    255,091

Gathering and Processing:                                             

Gross processing throughput     1,205       1,189     1,202      1,159
(MMcf/d)

Net processing throughput         982         911       964        883
(MMcf/d)

NGL Infrastructure:                                                   

Gross processing throughput       116         102        92         89
(Mbbl/d)

Net processing throughput          39          36        35         29
(Mbbl/d)

Marketing:                                                            

Inventory value               183,165     136,827   183,165    136,827

Sales volumes (bbl/d)         114,700      89,400    93,100     76,600
                                                                      

Capital expenditures           56,655      70,676   446,349    170,780
                                                                      

Long-term debt                                      619,666    478,364

Credit facilities                                   135,000    241,000

Working capital surplus(3)                        (160,839)  (186,507)

Net debt                                            593,827    532,857

Convertible debentures                               11,083     15,519

Net debt (including                                 604,910    548,376
debentures)
                                                                      

Common shares outstanding -                          77,663     71,601
end of period

Weighted average number of                           76,186     70,844
shares outstanding - basic

Weighted average number of                           76,884     72,025
shares outstanding - diluted

Notes:

(1)  Payout ratio is defined as dividends declared to shareholders
     divided by distributable cash flow.  Payout ratio and
     distributable cash flow are not standard measures under GAAP. See
     page 35 for a reconciliation of distributable cash flow to its
     most closely related GAAP measure.

(2)  EBITDA is defined as earnings (including unrealized gains/losses
     from financial contracts relating to the Liquids Business Unit)
     before interest, taxes, depreciation, amortization, accretion,
     impairment expenses and any other non-cash items such as
     gains/losses on the disposal of property, plant and equipment. 
     EBITDA is not a standard measure under GAAP.  See section titled
     "EBITDA" on page 36 of the MD&A for a reconciliation of EBITDA to
     its most closely related GAAP measure.

(3)  Working capital is defined as current assets less current
     liabilities.
    Message to Shareholders

Continued demand for services in all business segments underpinned Keyera's 
solid results in 2012. Keyera benefitted from the acquisition of the Alberta 
EnviroFuels facility in January, and from contribution from several growth 
projects we have been developing over the past year or two. We were successful 
in securing a number of new growth projects in 2012 that are now under 
development and are expected to provide value added services to our customers 
in the future. These projects, together with other new business opportunities 
currently under evaluation, are anticipated to provide our shareholders with 
continued value growth in the future.

EBITDA in 2012 was $326.8 million, 28% higher than in 2011. Net earnings were 
$130.6 million ($1.71 per share), compared to $135.2 million ($1.91 per share) 
the previous year. Distributable cash flow was $199.9 million ($2.62 per 
share) in 2012, compared to $202.2 million ($2.85 per share) in 2011. 
Distributable cash flow in 2012 was affected by higher maintenance capital 
costs, primarily due to the extensive turnaround completed in October at 
Alberta EnviroFuels, weak propane results in the early part of the year and 
unscheduled repairs at certain facilities.

Effective with the November 2012 dividend that was paid to shareholders on 
December 17, 2012, we increased our dividend by 5.9% to 18 cents per share per 
month, or $2.16 per share annually. This was Keyera's tenth dividend increase 
since going public in 2003, representing a 7.5% compound annual growth rate in 
dividends per share.

Throughput at our Gathering and Processing plants remained steady in 2012, as 
producers continued to focus on drilling liquids-rich gas. On a net basis, 
throughput increased by 9% compared to 2011, largely the result of acquiring 
additional plant ownership interests and higher throughputs at certain 
facilities. Remediation costs related to the Cranberry pipeline and repairs 
made at the Strachan gas plant offset strong performance elsewhere, resulting 
in operating margin of $150.9 million in 2012, $1.8 million less than the 
previous year.

The NGL Infrastructure business grew significantly in 2012 due to the addition 
of Alberta EnviroFuels, higher NGL production in western Canada and growing 
demand for fractionation, storage and handling services. As a result, activity 
levels have increased significantly in this segment of our business. Keyera's 
NGL fractionators operated at full capacity for most of the year, with demand 
for service exceeding available capacity. Diluent deliveries increased 
throughout the year at the Alberta Diluent Terminal, where we moved to 24-hour 
a day operations in the fourth quarter. Demand for storage resulted in higher 
utilization levels and higher fees. As a result, operating margin for NGL 
Infrastructure in 2012 was $112.5 million, 63% higher than in 2011.

In our Marketing segment, physical sales of butane and condensate were solid 
throughout the year and Keyera's crude oil midstream business also delivered 
good results. Iso-octane markets were strong in 2012 and demand for product 
was evident in both traditional and new markets across North America. 
Marketing margins were affected by lower sales of iso-octane due to the 
scheduled maintenance turnaround at Alberta EnviroFuels in the fall and weak 
propane results in the first three quarters of the year. Despite these 
factors, Marketing recorded operating margin of $92.0 million in 2012, 20% 
higher than in 2011.

Continued producer activity in west central Alberta is driving a number of new 
initiatives at Keyera's gas plants. Producers continue to seek additional 
services at the Rimbey gas plant to support active drilling programs in the 
Glauconite and Duvernay geological zones. Gross throughput at Rimbey averaged 
319 million cubic feet per day in the fourth quarter of 2012, up 17% from the 
same period in 2011, and NGL handling facilities at the plant were running 
near capacity. In September, we announced that we were constructing a 400 
million cubic feet per day turbo expander at Rimbey to extract up to 20,000 
barrels per day of ethane, as well as incremental propane, butane and 
condensate. Supporting the project is a long-term sales agreement with a large 
ethane consumer in Alberta and a long-term fee-for-service processing 
agreement with a large producer. Discussions are ongoing regarding the 
construction of a pipeline to deliver gas to Rimbey from lands west of the 
plant, where several producers are drilling Duvernay wells.

In the fourth quarter, Keyera purchased a newly constructed producer-built 
pipeline connected to the Strachan North gathering system and started 
receiving volumes at the Strachan gas plant. Keyera also entered into an 
agreement with a producer in the Minnehik Buck Lake area to purchase a 
pipeline currently under construction. The purchase will occur upon the 
completion of construction, which is expected in the first half of 2013. A 
similar agreement is in place to purchase a producer-built pipeline that will 
connect to the Carlos pipeline. Construction of the pipeline is expected in 
2013.

Keyera continues to work on the commercial terms necessary for an expansion of 
the Simonette gas plant. In the fourth quarter, several multi-national energy 
companies licensed wells in the lands adjacent to the plant. These new 
entrants, together with other producers, are targeting the Montney, Duvernay 
and other zones in the region.

The combination of increased NGL production and continued interest in oil 
sands developments have resulted in a number of new business opportunities for 
Keyera. At our facility in Fort Saskatchewan, we are constructing a 30,000 
barrel per day de-ethanizer, developing new underground storage caverns and 
creating a new brine pond to support our storage business. Construction of our 
rail and truck terminal at South Cheecham is well underway, and we are 
beginning the refurbishment of the rail and truck terminal in Hull, Texas, 
that we acquired in late 2012.

With the significant discounts in the price of Canadian crude oils, oil 
producers are anxious to develop alternate arrangements for delivery of crude 
oil by rail. We are currently working with these producers to develop rail 
delivery alternatives using Keyera's logistics expertise, as well as our rail 
terminals in the Edmonton/Fort Saskatchewan and South Cheecham areas. We 
believe that we can provide our customers with significant value in this area 
and have already modified the terminal design at South Cheecham to accommodate 
additional dilbit loading spots.

We were very pleased with the performance of Alberta EnviroFuels in 2012, and 
with the interest we have seen from customers interested in acquiring 
iso-octane. Modifications to our rail loading facility at the Edmonton 
Terminal to handle iso-octane were completed in December and iso-octane was 
delivered to the Gulf Coast via rail car in early January 2013. Throughout 
2013, our intention is to grow the amount of iso-octane delivered by rail car 
to augment our existing iso-octane sales to the west coast, which are 
currently constrained by apportionment on the Kinder Morgan Trans Mountain 
pipeline.

In 2013, we anticipate growth capital investment, excluding acquisitions, will 
be between $250 million and $300 million. Given the current projects Keyera 
already has underway and other opportunities under consideration, if current 
levels of industry activity are sustained we anticipate that our growth 
capital investment for the next several years may continue at levels similar 
to 2013.

In anticipation of the growth opportunities available to us, in December we 
expanded our unsecured revolving credit facility from $500 million to $750 
million, with the potential to increase it to $1 billion. We also extended the 
term of the facility by a year to December 13, 2016. As of December 31, 2012, 
only $135 million was drawn on the facility, providing considerable future 
financing flexibility.

Looking forward, we are encouraged by the number of new initiatives we have 
underway to provide value added services for our customers. As always, the 
combination of our customer service mindset, our strategic facilities and our 
skilled employees has enabled Keyera to provide superior returns to our 
shareholders.

On behalf of Keyera's directors and management team, thank you for your 
continued support.

Jim V. Bertram
Chief Executive Officer
Keyera Corp.

DISCLAIMER

Certain statements contained in this document contain forward-looking 
statements. These statements relate to future events or Keyera's future 
performance. Such statements are predictions only and actual events or 
results may differ materially. The use of words such as "anticipate", 
"continue", "estimate", "expect", "may", "will", "project", "should", "plan", 
"intend", "believe", and similar expressions, including the negatives thereof, 
is intended to identify forward looking statements. All statements other 
than statements of historical fact contained in this document are forward 
looking statements.

The forward looking statements reflect management's current beliefs and 
assumptions with respect to such things as the outlook for general economic 
trends, industry trends, commodity prices, capital markets, and the 
governmental, regulatory and legal environment. In some instances, this 
document may also contain forward-looking statements attributed to third party 
sources. Management believes that its assumptions and analysis in this 
document are reasonable and that the expectations reflected in the forward 
looking statements contained herein are also reasonable. However, Keyera 
cannot assure readers that these expectations will prove to be correct.

All forward looking statements involve known and unknown risks, uncertainties 
and other factors that may cause actual results, events, levels of activity 
and achievements to differ materially from those anticipated in the forward 
looking statements. Such factors include but are not limited to: general 
economic, market and business conditions; access to capital and debt markets; 
operational matters, including potential hazards inherent in our operations; 
risks arising from co-ownership of facilities; activities of other facility 
owners; access to third party facilities, competitive action by other 
companies; activities of producers and other customers and overall industry 
activity levels; changes in gas composition; fluctuations in commodity prices 
and supply/demand trends; processing and marketing margins; effects of weather 
conditions; availability of construction crews and materials; fluctuations in 
interest rates and foreign currency exchange rates; changes in operating and 
capital costs, including fluctuations in input costs; actions by governmental 
authorities; decisions or approvals of administrative tribunals; changes in 
environmental and other regulations; reliance on key personnel; competition 
for, among other things, capital, acquisition opportunities and skilled 
personnel; changes in tax laws, including the effects that such changes may 
have on unitholders, and in particular any differential effects relating to 
unitholder's country of residence; and other factors, many of which are beyond 
the control of Keyera, some of which are discussed in this document and in 
Keyera's Annual Information Form dated February 14, 2013 filed on SEDAR and 
available on the Keyera website at www.keyera.com.

Proposed construction and completion schedules and budgets for capital 
projects are subject to many variables, including weather; availability and 
prices of materials; labour; customer project approvals and expected in 
service dates; regulatory approvals; and macro socio-economic trends. As a 
result, expected timing, costs and benefits associated with these projects may 
differ materially from the descriptions in this Document. Further, some of the 
projects discussed in this document are subject to securing sufficient 
producer/customer interest and may not proceed if sufficient commitments are 
not obtained.

Readers are cautioned that they should not unduly rely on the forward looking 
statements in this document. Further, readers are cautioned that the forward 
looking statements in this document speak only as of the date of this document.

Any statements relating to "reserves" are deemed to be forward looking 
statements as they involve the implied assessment, based on certain estimates 
and assumptions, that the reserves described can be profitably produced in the 
future.

All forward looking statements contained in this document and accompanying 
documents are expressly qualified by this cautionary statement. Further 
information about the factors affecting forward looking statements and 
management's assumptions and analysis thereof, is available in filings made by 
Keyera with Canadian provincial securities commissions, which can be viewed on 
SEDAR at www.sedar.com.

about Keyera, please visit our website atwww.keyera.com or contact:

John Cobb, Vice President, Investor Relations and Information Technology  or 
Julie Puddell, Manager, Investor Relations

E-mail:ir@keyera.com, Telephone: (403) 205-7670 / Toll Free: (888) 699-4853, 
Facsimile:  (403) 205-8425.

SOURCE: Keyera Corp.

To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/February2013/14/c5732.html

CO: Keyera Corp.
ST: Alberta
NI: OIL ERN 

-0- Feb/14/2013 22:00 GMT


 
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