Keyera Announces 2024 Year End Results

Press Release

CALGARY, AB, Feb. 13, 2025 – Keyera Corp. (TSX: KEY) (“Keyera”) announced its fourth quarter and year-end 2024 financial results today, the highlights of which are included in this news release. To view Management’s Discussion and Analysis (the “MD&A”) and financial statements, visit either Keyera’s website or its filings on SEDAR+ at www.sedarplus.ca.

“Keyera had an outstanding 2024, achieving record results across all three business segments” said Dean Setoguchi, President and CEO. “We continued to execute our strategy and deliver value to our customers by leveraging the strength of our integrated value chain. Looking ahead, we have a clear pathway to continued margin growth by filling available capacity and advancing capital-efficient growth projects. Our financial strength positions us well to allocate capital to the highest-value opportunities.”

Fourth Quarter and Year-End Highlights

• Financial Results
  • Adjusted earnings before interest, taxes, depreciation, and amortization¹ (“adjusted EBITDA”) were $313 million for the quarter (Q4 2023 – $339 million) and a record $1.28 billion for the full year (2023 – $1.21 billion). These strong results were driven by record quarterly realized margin contributions from the Liquids Infrastructure segment and record annual realized margin contributions from all three business segments.
  • Distributable cash flow¹ (“DCF”) was $168 million or $0.73 per share for the quarter (Q4 2023 – $234 million or $1.02 per share) and <$771 million or $3.36 per share for the full year (2023 – $855 million or $3.73 per share). The decrease in both figures compared to the prior year periods is mostly due to higher cash taxes.
  • Net earnings were $89 million for the fourth quarter (Q4 2023 – $49 million) and a record $487 million for the full year (2023 – $424 million).
• Record Fee-for-Service Realized Margin¹ Driven by the Continued Filling of Available Capacity
  • Fee-for-service realized margin¹ hit a new annual record of $970 million (2023 – $891 million), achieving a year-over-year growth rate of 9%.
  • The Gathering and Processing (“G&P”) segment delivered quarterly realized margin¹ of $107 million (Q4 2023 – $116 million), and an annual record of $413 million (2023 – $395 million). The annual increase is mostly due to the cost and downtime associated with the 2023 Alberta wildfires, and higher contributions from the Simonette gas plant. These results also include record annual throughput at the Wapiti and Pipestone gas plants even with a planned turnaround at the Wapiti gas plant.
  • The Liquids Infrastructure segment achieved record quarterly realized margin¹ of $153 million (Q4 2023 – $130 million), and an annual record of $558 million (2023 – $496 million). The main contributors of this performance were the continued steady ramp up of KAPS, record quarterly and annual margin contributions from fractionation and storage services at KFS, and record quarterly and annual deliveries from Keyera’s industry leading condensate system.
• Marketing Segment Delivers Record Year – The Marketing segment delivered quarterly realized margin¹ of $99 million (Q4 2023 – $129 million) and a record annual realized margin¹ of $485 million (2023 – $479 million), above the previously guided range of $450 million to $480 million. These results were largely driven by strong contributions from iso-octane sales and propane exports off the west coast of Canada.
• Strong Financial Position – The company ended the year with net debt to adjusted EBITDA² of 2.0 times, below the targeted range of 2.5 to 3.0 times. The company remains well positioned to pursue and equity self-fund growth opportunities that will enhance shareholder value.

2024 Guidance Results

• Marketing segment realized margin¹ delivered an annual record of $485 million, above the latest guidance range of $450 million to $480 million.
• Annual growth capital spending excluding capitalized interest was $116 million, above the latest guidance range of $80 million to $100 million. The additional capital includes optimization work at the Brazeau River gas plant and tie-ins to support new customer volumes at the Wapiti gas plant.
• Maintenance capital spending was $136 million, within the latest guidance range of $120 million to $140 million.
• Cash taxes were $105 million, slightly above the latest guidance of $90 million to $100 million, due to stronger financial performance.

Advancing Capital-Efficient Growth Projects

• The company has formally sanctioned the debottleneck of KFS Fractionation Unit II (“KFS Frac II”), which will add approximately 8,000 barrels per day of capacity for about $85 million. The project is expected to generate strong returns on a standalone basis. The additional capacity is now anticipated to come online earlier than originally planned, with an expected in-service date of mid-2026 (previously late 2026).
• The 47,000 barrel per day KFS Fractionation Unit III project (“KFS Frac III”) continues to receive strong contractual support from customers. A formal sanction decision is expected later this year, and the project is expected to be in service in 2028. Combined, the KFS Frac II debottleneck and the KFS Frac III project will increase Keyera’s total fractionation capacity by about 60%.
• The company has completed front-end engineering and design for KAPS Zone 4 and continues to progress toward securing sufficient contractual backing.
• The company continues to progress other potential opportunities which include the expansion of North Region G&P capacity, expanding rail and logistics capabilities as fractionation volumes continue to grow, and further liquids extraction projects.

Long-Term Propane Export and Fractionation Agreements with AltaGas

As previously announced, Keyera has secured long-term propane sales agreements with AltaGas’ Canadian west coast terminals. These agreements enhance Keyera and customer access to international pricing, diversifying sales opportunities. Additionally, AltaGas has committed to moving incremental NGL mix volumes, which includes volumes produced from AltaGas’ Pipestone II plant (currently under construction), through Keyera’s integrated system, further supporting ongoing fractionation expansions and future rail and logistics projects.

AEF Outage

AEF will be taken offline for approximately 6 weeks in the spring of 2025 to conduct maintenance activities addressing an unexpected operational issue. These activities are required to ensure continued safe and reliable operations. The outage is expected to reduce 2025 realized margin¹ for the Marketing segment by approximately $40 million, with no increase to maintenance capital. The company still expects to be within its stated base Marketing realized margin¹ guidance of $310 million to $350 million for 2025. Consistent with prior years, Marketing segment realized margin¹ guidance will be provided with first quarter results in mid-May, after the conclusion of the NGL contracting season.

2025 Guidance Unchanged

• This past December, the company announced a new 7-8% annual growth target for fee-based adjusted EBITDA¹ over the 2024-2027 period.
• Base Marketing realized margin¹ guidance remains between $310 million to $350 million. Consistent with prior years, Marketing segment realized margin¹ guidance will be provided with first quarter results in mid-May, after the conclusion of the NGL contracting season.
• Growth capital expenditures are expected to range between $300 million and $330 million. This includes capital investments to advance the KFS Frac II debottleneck, KFS Frac III, KAPS Zone 4, enhancements at AEF, and optimization work across the portfolio.
• Maintenance capital expenditures are expected to range between $70 million and $90 million.
• Cash taxes are expected to range between $100 million and $110 million.

Summary of Key Measures	Three months ended December 31,		Twelve months ended December 31,
(Thousands of Canadian dollars, except where noted)	2024	2023	2024	2023
Net earnings	88,906	49,192	486,628	424,032
Per share ($/share) – basic	0.39	0.21	2.12	1.85
Cash flow from operating activities	316,431	230,739	1,265,788	975,486
Funds from operations1	227,274	290,643	962,438	1,027,493
Distributable cash flow1	168,301	233,563	770,914	854,622
Per share ($/share)1	0.73	1.02	3.36	3.73
Dividends declared	119,160	114,577	467,473	449,141
Per share ($/share)	0.52	0.50	2.04	1.96
Payout ratio %1	71 %	49 %	61 %	53 %
Adjusted EBITDA1	312,732	339,244	1,275,275	1,211,774
Operating margin	307,295	445,786	1,385,601	1,432,938
Realized margin1	359,189	374,701	1,454,867	1,369,401
Gathering and Processing
Operating margin	107,834	114,851	412,600	392,430
Realized margin1	107,303	115,983	412,718	394,530
Gross processing throughput3 (MMcf/d)	1,532	1,625	1,492	1,588
Net processing throughput3 (MMcf/d)	1,380	1,393	1,324	1,358
Liquids Infrastructure
Operating margin	154,295	128,133	557,021	486,467
Realized margin1	152,576	130,170	557,590	496,114
Gross processing throughput4 (Mbbl/d)	187	206	176	185
Net processing throughput4 (Mbbl/d)	102	116	97	101
AEF iso-octane production volumes (Mbbl/d)	15	15	13	15
Marketing
Operating margin	45,264	202,851	416,129	554,251
Realized margin1	99,408	128,597	484,708	478,967
Inventory value	270,225	225,790	270,225	225,790
Sales volumes (Bbl/d)	243,500	253,900	207,500	200,700
Acquisitions	—	—	—	366,537
Growth capital expenditures	48,580	34,121	115,985	216,177
Maintenance capital expenditures	44,435	40,221	136,340	119,973
Total capital expenditures	93,015	74,342	252,325	702,687
Weighted average number of shares outstanding – basic and diluted	229,153	229,153	229,153	229,153
As at December 31,			2024	2023
Long-term debt5			3,379,498	3,426,994
Credit facility			—	470,000
Working capital deficit (surplus) (current assets less current liabilities)			60,930	(272,793)
Net debt			3,440,428	3,624,201
Common shares outstanding – end of period			229,153	229,153

CEO’s Message to Shareholders

Another year of solid strategy execution. I am very proud of the Keyera team for delivering value for our customers and record financial results in 2024. For the second consecutive year, we had a Lost Time Incident Frequency (LTIF) of zero, underscoring our continued commitment to safety. We set numerous new volume records across our integrated system. We achieved record realized margins across all three business units, leading to record annual EBITDA and ended the year in a very strong financial position. I am confident in our team’s ability to keep this momentum going as we continue to grow.

Constructive long-term volume growth outlook for Western Canada. The growth outlook for the Western Canadian Sedimentary Basin remains strong. Western Canada has one of the largest, most cost-competitive hydrocarbon resources in the world. Years of low commodity prices and constrained egress options have made Canadian producers very cost-efficient and resilient. These producers have proven they can continue to grow through changing market conditions. With expanded export capabilities, producers can now access high-value overseas markets to support their growth plans. Additionally, demand within the basin is increasing, driven by a growing petrochemical industry, and rising power needs. Keyera’s assets are strategically positioned to benefit from and enable this growth.

Clear pathway to continued growth of high-quality, fee-based cash flow. We have set a target to reach a 7-8% CAGR for fee-based adjusted EBITDA from 2024 to 2027. Most of this growth will come from the continued filling of available capacity which exists in the Gathering and Processing (G&P) segment, KAPS, and our condensate handling systems, all of which contributed to numerous new throughput records this quarter. Capital-efficient growth projects like the KFS Frac II debottleneck and KAPS Zone 4 will also drive growth over this timeframe, while KFS Frac III is expected to be in service in 2028.

Marketing segment cash flow accelerates fee-based growth. Our Marketing segment delivered record realized margin this year, driven by increased volumes flowing through Keyera’s integrated system and continued strong iso-octane sales. By leveraging our physical assets and logistics expertise, we connect customers to the highest value markets. Cash flow from this segment is re-invested into growing stable, fee-based cash flows, further enhancing our value, and giving Keyera a distinct competitive advantage.

Allocating capital to maximize value for shareholders. Our strong balance sheet provides us with the flexibility to allocate capital to the highest value option. In 2024, we increased our dividend once again, supported by the continued growth in our fee-based business. In November, we implemented our inaugural Normal Course Issuer Bid (NCIB). The use of the NCIB will be weighed carefully against other capital allocation opportunities. We have a rich inventory of organic growth investments and see many other potential opportunities given the expected growth in the basin. Keyera will continue to leverage our asset base and exercise financial discipline to deliver on our strategy and create value for our customers and shareholders.

On behalf of Keyera’s board of directors and management team I want to thank our employees, customers, shareholders, Indigenous rights holders, and other stakeholders for their continued support.

Dean Setoguchi
President and CEO
Keyera Corp.

Notes:
1	Keyera uses certain non-Generally Accepted Accounting Principles (“GAAP”) and other financial measures such as EBITDA, adjusted EBITDA, funds from operations, distributable cash flow, distributable cash flow per share, payout ratio, realized margin, fee-for-service realized margin, return on invested capital (“ROIC”) and compound annual growth rate (“CAGR”) for fee-based adjusted EBITDA. Since these measures are not standard measures under GAAP, they may not be comparable to similar measures reported by other entities. For additional information, and where applicable, for a reconciliation of the historical non-GAAP financial measures to the most directly comparable GAAP measure, refer to the section of this news release titled “Non-GAAP and Other Financial Measures”. For the assumptions associated with the base realized margin guidance for the Marketing segment, refer to the sections titled “Segmented Results of Operations: Marketing” and “Forward-Looking Statements” of Management’s Discussion and Analysis for the period ended December 31, 2024.
2	Ratio is calculated in accordance with the covenant test calculations related to the company’s credit facility and senior note agreements and excludes hybrid notes.
3	Includes gas volumes and the conversion of liquids volumes handled through the processing facilities to a gas volume equivalent. Net processing throughput refers to Keyera’s share of raw gas processed at its processing facilities.
4	Fractionation throughput in the Liquids Infrastructure segment is the aggregation of volumes processed through the fractionators and the de-ethanizers at the Keyera and Dow Fort Saskatchewan facilities.
5	Long-term debt includes the total value of Keyera’s hybrid notes which receive 50% equity treatment by Keyera’s rating agencies. The hybrid notes are also excluded from Keyera’s covenant test calculations related to the company’s credit facility and senior note agreements.

Fourth Quarter and Year-End 2024 Results Conference Call and Webcast

Keyera will be conducting a conference call and webcast for investors, analysts, brokers and media representatives to discuss the financial results for the fourth quarter and year-end of 2024 at 8:00 a.m. Mountain Time (10:00 a.m. Eastern Time) on Thursday, February 13, 2025. Callers may participate by dialing 1-888-510-2154 or 1-437-900-0527. A recording of the conference call will be available for replay until 10:00 PM Mountain Time on Thursday, February 27, 2025 (12:00 AM Eastern Time on Friday, February 28, 2025), by dialing 1-888-660-6345 or 1-289-819-1450 and entering passcode 08660.

To join the conference call without operator assistance, you may register and enter your phone number here to receive an instant automated call back. This link will be active on Thursday, February 13, 2025, at 7:00 AM Mountain Time (9:00 AM Eastern Time).

A live webcast of the conference call can be accessed here or through Keyera’s website at http://www.keyera.com/news/events. Shortly after the call, an audio archive will be posted on the website for 90 days.

Additional Information

For more information about Keyera Corp., please visit our website at www.keyera.com or contact:

Dan Cuthbertson, General Manager, Investor Relations
Rahul Pandey, Senior Advisor, Investor Relations
Katie Shea, Senior Advisor, Investor Relations
Email: ir@keyera.com
Telephone: 1-403-205-7670
Toll free: 1-888-699-4853

For media inquiries, please contact:

Amanda Condie, Manager, Corporate Communications
Email: media@keyera.com
Telephone: 1-855-797-0036

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