DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION | 12 Months Ended |
Dec. 31, 2018shares | |
Document Information [Abstract] | |
Document Type | 40-F |
Document Period End Date | Dec. 31, 2018 |
Amendment Flag | false |
Entity Registrant Name | Pembina Pipeline Corp |
Entity Central Index Key | 1,546,066 |
Entity Current Reporting Status | Yes |
Entity Emerging Growth Company | false |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | Q4 |
Entity Common Stock, Shares Outstanding (in shares) | 508,045,197 |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 157 | $ 321 |
Trade receivables and other | 604 | 529 |
Inventory | 198 | 168 |
Derivative financial instruments | 54 | 4 |
Current assets | 1,013 | 1,022 |
Non-current assets | ||
Property, plant and equipment | 14,730 | 13,546 |
Investments in equity accounted investees | 6,368 | 6,229 |
Intangible assets and goodwill | 4,409 | 4,714 |
Advances to related parties | 135 | 42 |
Other assets | 9 | 13 |
Non-current assets | 25,651 | 24,544 |
Total Assets | 26,664 | 25,566 |
Current liabilities | ||
Trade payables and accrued liabilities | 803 | 677 |
Loans and borrowings | 480 | 163 |
Dividends payable | 97 | 91 |
Convertible debentures | 0 | 93 |
Contract liabilities | 37 | 44 |
Derivative financial instruments | 6 | 79 |
Taxes payable | 67 | 3 |
Current liabilities | 1,490 | 1,150 |
Non-current liabilities | ||
Loans and borrowings | 7,057 | 7,300 |
Decommissioning provision | 569 | 546 |
Contract liabilities | 131 | 113 |
Employee benefits, share-based payments and other | 74 | 66 |
Taxes payable | 15 | 22 |
Deferred tax liabilities | 2,774 | 2,376 |
Other liabilities | 150 | 152 |
Non-current liabilities | 10,770 | 10,575 |
Total Liabilities | 12,260 | 11,725 |
Equity | ||
Attributable to shareholders | 14,344 | 13,781 |
Attributable to non-controlling interest | 60 | 60 |
Total Equity | 14,404 | 13,841 |
Total Liabilities and Equity | 26,664 | 25,566 |
Commitments, Contingencies and Guarantees |
CONSOLIDATED STATEMENTS OF EARN
CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME - CAD ($) shares in Millions, $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of profit or loss and other comprehensive income [abstract] | ||
Revenue | $ 7,351 | $ 5,400 |
Cost of sales | 5,457 | 3,971 |
(Gain) loss on commodity-related derivative financial instruments | (22) | 71 |
Share of profit from equity accounted investees | 411 | 116 |
Gross profit | 2,327 | 1,474 |
General and administrative | 279 | 236 |
Other expense | 27 | 28 |
Results from operating activities | 2,021 | 1,210 |
Net finance costs | 279 | 185 |
Earnings before income tax | 1,742 | 1,025 |
Current tax expense | 70 | 48 |
Deferred tax expense | 394 | 94 |
Income tax expense | 464 | 142 |
Earnings attributable to shareholders | 1,278 | 883 |
Other comprehensive (loss) income | ||
Exchange gain on translation of foreign operations | 330 | 1 |
Remeasurements of defined benefit liability, net of tax | (6) | 3 |
Total comprehensive income attributable to shareholders | 1,602 | 887 |
Earnings attributable to common shareholders, net of preferred share dividends | $ 1,157 | $ 803 |
Earnings per common share - basic (in CAD per share) | $ 2.28 | $ 1.87 |
Earnings per common share - diluted (in CAD per share) | $ 2.28 | $ 1.86 |
Weighted average number of common shares (millions) | ||
Basic (in shares) | 505 | 426 |
Diluted (in shares) | 509 | 432 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - CAD ($) $ in Millions | Total | Common share capital | Preferred share capital | Issued capitalCommon share capital | Issued capitalPreferred share capital | Deficit | DeficitCommon share capital | DeficitPreferred share capital | Accumulated other comprehensive (loss) income | Total | TotalCommon share capital | TotalPreferred share capital | Non-controlling interest |
Equity, beginning balance at Dec. 31, 2016 | $ 8,296 | $ 8,808 | $ 1,509 | $ (2,010) | $ (11) | $ 8,296 | $ 0 | ||||||
Total comprehensive income | |||||||||||||
Earnings | 883 | 883 | 883 | 0 | |||||||||
Other comprehensive (loss) income | |||||||||||||
Exchange loss on translation of foreign operations | 1 | 1 | 1 | ||||||||||
Remeasurements of defined benefit liability, net of tax | 3 | 3 | 3 | ||||||||||
Total comprehensive income attributable to shareholders | 887 | 883 | 4 | 887 | |||||||||
Transactions with shareholders of the Company | |||||||||||||
Shares issued, net of issue costs | $ 4,356 | $ 915 | 4,356 | 915 | $ 4,356 | $ 915 | |||||||
Dividend reinvestment plan | 148 | 148 | 148 | 148 | |||||||||
Debenture conversions | 73 | 73 | 73 | 73 | |||||||||
Share-based payment transactions | 62 | 62 | 62 | 62 | |||||||||
Dividends declared | (873) | (83) | $ (873) | $ (83) | (873) | (83) | |||||||
Total transactions with shareholders of the Company | 4,598 | 4,639 | 915 | (956) | 0 | 4,598 | |||||||
Non-controlling interest recognized on Acquisition | 60 | 60 | |||||||||||
Equity, ending balance at Dec. 31, 2017 | 13,841 | 13,447 | 2,424 | (2,083) | (7) | 13,781 | 60 | ||||||
Total comprehensive income | |||||||||||||
Earnings | 1,278 | 1,278 | 1,278 | 0 | |||||||||
Other comprehensive (loss) income | |||||||||||||
Exchange loss on translation of foreign operations | 330 | 330 | 330 | ||||||||||
Remeasurements of defined benefit liability, net of tax | (6) | (6) | (6) | ||||||||||
Total comprehensive income attributable to shareholders | 1,602 | 1,278 | 324 | 1,602 | 0 | ||||||||
Transactions with shareholders of the Company | |||||||||||||
Shares issued, net of issue costs | (1) | (1) | (1) | ||||||||||
Debenture conversions | 140 | 140 | 140 | ||||||||||
Share-based payment transactions | 75 | 75 | 75 | ||||||||||
Dividends declared | $ (1,131) | $ (122) | $ (1,131) | $ (122) | $ (1,131) | $ (122) | |||||||
Total transactions with shareholders of the Company | (1,039) | 215 | (1) | (1,253) | 0 | (1,039) | 0 | ||||||
Equity, ending balance at Dec. 31, 2018 | $ 14,404 | $ 13,662 | $ 2,423 | $ (2,058) | $ 317 | $ 14,344 | $ 60 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities | ||
Earnings | $ 1,278 | $ 883 |
Adjustments for: | ||
Share of profit from equity accounted investees | (411) | (116) |
Distributions from equity accounted investees | 622 | 157 |
Depreciation and amortization | 417 | 382 |
Unrealized gain on commodity-related derivative financial instruments | (73) | (23) |
Net finance costs | 279 | 185 |
Net interest paid | (259) | (153) |
Income tax expense | 464 | 142 |
Taxes paid | (26) | (30) |
Share-based compensation expense | 63 | 73 |
Share-based compensation payment | (32) | (22) |
Loss on asset disposal | 19 | 12 |
Net change in contract liabilities | 11 | 41 |
Other | (13) | 0 |
Change in non-cash operating working capital | (83) | (18) |
Cash flow from operating activities | 2,256 | 1,513 |
Financing activities | ||
Bank borrowings and issuance of debt | 1,366 | 2,542 |
Repayment of loans and borrowings | (1,998) | (1,279) |
Issuance of preferred shares | 0 | 400 |
Issuance of medium term notes | 700 | 1,200 |
Issue costs and financing fees | (8) | (23) |
Exercise of stock options | 61 | 46 |
Dividends paid (net of shares issued under the dividend reinvestment plan) | (1,247) | (781) |
Cash flow (used in) from financing activities | (1,126) | 2,105 |
Investing activities | ||
Capital expenditures | (1,226) | (1,839) |
Contributions to equity accounted investees | (58) | (7) |
Acquisitions | 0 | (1,338) |
Interest paid during construction | (35) | (63) |
Recovery of assets or proceeds from sale | 5 | 2 |
Advances to related parties | (84) | (23) |
Changes in non-cash investing working capital and other | 87 | (64) |
Cash flow used in investing activities | (1,311) | (3,332) |
Change in cash and cash equivalents | (181) | 286 |
Effect of movement in exchange rates on cash held | 17 | 0 |
Cash and cash equivalents, beginning of year | 321 | 35 |
Cash and cash equivalents, end of year | $ 157 | $ 321 |
REPORTING ENTITY
REPORTING ENTITY | 12 Months Ended |
Dec. 31, 2018 | |
Management Commentary [Abstract] | |
REPORTING ENTITY | REPORTING ENTITY Pembina Pipeline Corporation ("Pembina" or the "Company") is a Calgary-based, leading transportation and midstream service provider serving North America's energy industry. The consolidated financial statements include the accounts of the Company, its subsidiary companies, partnerships and any investments in associates and joint arrangements as at and for the year ended December 31, 2018 . Pembina owns an integrated system of pipelines that transport various hydrocarbon liquids and natural gas products produced primarily in western Canada. The Company also owns gas gathering and processing facilities and an oil and natural gas liquids infrastructure, storage and logistics business. Pembina's integrated assets and commercial operations along the majority of the hydrocarbon value chain allow it to offer a full spectrum of midstream and marketing services to the energy sector. |
BASIS OF PREPARATION
BASIS OF PREPARATION | 12 Months Ended |
Dec. 31, 2018 | |
Corporate Information And Statement Of IFRS Compliance [Abstract] | |
BASIS OF PREPARATION | BASIS OF PREPARATION a. Basis of measurement and statement of compliance The consolidated financial statements have been prepared on a historical cost basis with some exceptions, as detailed in the accounting policies set out below in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB"). These accounting policies have been applied consistently for all periods presented in these consolidated financial statements. Certain insignificant comparative amounts have been reclassified to conform to the presentation adopted in the current year. These consolidated financial statements were authorized for issue by Pembina's Board of Directors on February 21, 2019 . b. Functional and presentation currency The consolidated financial statements are presented in Canadian dollars. All financial information presented in Canadian dollars has been disclosed in millions, except where noted. The assets and liabilities of subsidiaries, and investments in equity accounted investees, whose functional currencies are other than Canadian dollars are translated into Canadian dollars at the foreign exchange rate at the balance sheet date, while revenues and expenses of such subsidiaries are translated using average monthly foreign exchange rates, which approximate the foreign exchange rates on the dates of the transactions. Foreign exchange differences arising on translation of subsidiaries and investments in equity accounted investees with a functional currency other than the Canadian dollar are included in other comprehensive income. c. Use of estimates and judgments The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that are based on the facts and circumstances and estimates at the date of the consolidated financial statements and affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Judgments, estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. The following judgment and estimation uncertainties are those management considers material to the Company's consolidated financial statements: Judgments (i) Business combinations Business combinations are accounted for using the acquisition method of accounting. The determination of fair value often requires management to make judgments about future possible events. The assumptions with respect to determining the fair value of property, plant and equipment, intangible assets and liabilities acquired, as well as the determination of deferred taxes, generally require the most judgment. (ii) Depreciation and amortization Depreciation and amortization of property, plant and equipment and intangible assets are based on management's judgment of the most appropriate method to reflect the pattern of an asset's future economic benefit expected to be consumed by the Company. Among other factors, these judgments are based on industry standards and historical experience. (iii) Impairment Assessment of impairment of non-financial assets is based on management’s judgment of whether or not there are sufficient internal or external factors that would indicate that an asset, investment, or cash generating unit ("CGU") is impaired. The determination of a CGU is based on management’s judgment and is an assessment of the smallest group of assets that generate cash inflows independently of other assets. In addition, management applies judgment to assign goodwill acquired as part of a business combination to the CGU or group of CGUs that is expected to benefit from the synergies of the business combination for purposes of impairment testing. When an impairment test is performed, the carrying value of a CGU or group of CGUs is compared to its recoverable amount, defined as the greater of fair value less costs to sell and value in use. As such, the asset composition of a CGU or group of CGUs directly impacts both the carrying value and recoverability of the assets included therein. (iv) Assessment of joint control over joint arrangements The determination of joint control requires judgment about the influence the Company has over the financial and operating decisions of an arrangement and the extent of the benefits it obtains based on the facts and circumstances of the arrangement during the reporting period. Joint control exists when decisions about the relevant activities require the unanimous consent of the parties that control the arrangement collectively. Ownership percentage alone may not be a determinant of joint control. (v) Pattern of revenue recognition The pattern of revenue recognition is impacted by management’s judgments as to the nature of the Company’s performance obligations, the amount of consideration allocated to performance obligations that are not sold on a stand-alone basis, the valuation of material rights and the timing of when those performance obligations have been satisfied. (vi) Leases Management applies judgment to determine if an arrangement contains a lease from both a lessee and lessor perspective. This assessment is based on management’s expectations regarding existing and future customers and the nature of the underlying assets. Estimates (i) Business combinations Estimates of future cash flows, forecast prices, interest rates, discount rates, cost, market values and useful lives are made in determining the fair value of assets acquired and liabilities assumed. Changes in any of the assumptions or estimates used in determining the fair value of acquired assets and liabilities could impact the amounts assigned to assets, liabilities, intangible assets, goodwill and deferred taxes in the purchase price equation. Future earnings can be affected as a result of changes in future depreciation and amortization, asset or goodwill impairment. (ii) Provisions and contingencies Management uses judgment in determining the likelihood of realization of contingent assets and liabilities to determine the outcome of contingencies. Provisions recognized are based on management's best estimate of the timing, scope and amount of expected future cash outflows to settle the obligation. Based on the long-term nature of the decommissioning provision, the most significant uncertainties in estimating the provision are the discount and inflation rates used, the costs that will be incurred and the timing of when these costs will occur. (iii) Deferred taxes The calculation of the deferred tax asset or liability is based on assumptions about the timing of many taxable events and the enacted or substantively enacted rates anticipated to be applicable to income in the years in which temporary differences are expected to be realized or reversed. (iv) Depreciation and amortization Estimated useful lives of property, plant and equipment and intangible assets are based on management's assumptions and estimates of the physical useful lives of the assets, the economic lives, which may be associated with the reserve lives and commodity type of the production area, in addition to the estimated residual value. (v) Goodwill impairment test In determining the recoverable amount as part of annual goodwill impairment testing, management uses its best estimates of future cash flows, and assesses discount rates to reflect management’s best estimate of a rate that reflects a current market assessment of the time value of money and the specific risks associated with the underlying assets and cash flows. (vi) Impairment of financial assets The measurement of financial assets carried at amortized cost includes management’s estimates regarding the expected credit losses that will be realized on these financial assets. (vii) Revenue from contracts with customers In estimating the contract value, management makes assessments as to whether variable consideration is constrained or not reasonably estimable, such that an amount or portion of an amount cannot be included in the estimate of the contract value. Management's estimates of the likelihood of a customer’s ability to use outstanding make-up rights may impact the timing of revenue recognition. In addition, in determining the amount of consideration to be allocated to performance obligations that are not sold on a stand-alone basis, management estimates the stand-alone selling price of each performance obligation under the contract, taking into consideration the location and volume of goods or services being provided, the market environment, and customer specific considerations. (viii) Fair value of financial instruments For Level 2 valued financial instruments, management makes assumptions and estimates value based on observable inputs such as quoted forward prices, time value and volatility factors. For Level 3 valued financial instruments, management uses estimates of financial forecasts, expected cash flows and risk adjusted discount rates to measure fair value. (ix) Employee benefit obligations An actuarial valuation is prepared to measure the Company’s net employee benefit obligations using management’s best estimates with respect to longevity, discount rates, compensation increases, market returns on plan assets, retirement and termination rates. |
CHANGES IN ACCOUNTING POLICIES
CHANGES IN ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies, Changes In Accounting Estimates And Errors [Abstract] | |
CHANGES IN ACCOUNTING POLICIES | CHANGES IN ACCOUNTING POLICIES Except for the changes as described below, accounting policies as disclosed in Note 4 of the Consolidated Financial Statements have been applied to all periods consistently. The Company has retrospectively adopted IFRS 15 Revenue from Contracts with Customers effective January 1, 2018. IFRS 15 Revenue from Contracts with Customers a. Transition IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognized, and has replaced IAS 18 Revenue and related interpretations. The Company adopted IFRS 15 at the date of initial application of January 1, 2018, and has applied IFRS 15 retrospectively, restating the reported comparative period. In determining the restated values, the Company used the practical expedient to not restate contracts that began and ended in the same annual reporting period. No significant impact was identified as a result of the practical expedient applied on transition. b. Consolidated financial statement impacts An opening Consolidated Statement of Financial Position at January 1, 2017 has not been presented as the impact of the adoption of IFRS 15 on the opening Consolidated Statement of Financial Position is immaterial. The following table presents the impact of adopting IFRS 15 on the Company’s Consolidated Statement of Financial Position, Consolidated Statement of Earnings and Comprehensive Income and the Consolidated Statement of Cash Flows for the year ended December 31, 2017 for each of the line items affected. i. Consolidated Statement of Financial Position As at December 31, 2017 ($ millions) Previously Reported Adjustments Restated Trade payables and accrued liabilities 713 (36 ) 677 Contract liabilities — 44 44 Deficit (2,075 ) (8 ) (2,083 ) ii. Consolidated Statement of Earnings and Other Comprehensive Income Year ended December 31, 2017 ($ millions) Previously Reported Adjustments Restated Revenue 5,408 (8 ) 5,400 Earnings before income tax 1,033 (8 ) 1,025 Earnings attributable to shareholders 891 (8 ) 883 Basic earnings per common share 1.89 (0.02 ) 1.87 Diluted earnings per common share 1.88 (0.02 ) 1.86 iii. Consolidated Statement of Cash Flows Year ended December 31, 2017 ($ millions) Previously Reported Adjustments Restated Cash provided by (used in) Operating activities Earnings 891 (8 ) 883 Net change in contract liabilities 33 8 41 Cash flow from operating activities 1,513 — 1,513 c. Accounting policies The details of significant accounting policies under IFRS 15 and the nature of the changes to previous accounting policies under IAS 18 are outlined below. Take-or-Pay The Company provides transportation, gas processing, fractionation, terminalling, and storage services under take-or-pay contracts. In a take-or-pay contract, the Company is entitled to a minimum fee for the firm service promised to a customer over the contract period, regardless of actual volumes transported, processed, or stored. This minimum fee can be represented as a set fee for an annual minimum volume, or an annual minimum revenue requirement. In addition, these contracts may include variable consideration for operating costs that are flow through to the customer. The Company satisfies its performance obligations and recognizes revenue for services under take-or-pay commitments when volumes are transported, processed, or stored. Make-up rights may arise when a customer does not fulfill their minimum volume commitment in a certain period, but is allowed to use the delivery of future volumes to meet this commitment. These make-up rights are subject to expiry and have varying conditions associated with them. Under IFRS 15, when contract terms allow a customer to exercise their make-up rights using firm volume commitments, revenue is not recognized until these make-up rights are used, expire, or management determines that it is remote that they will be utilized. If the Company bills a customer for unused service in an earlier period and the customer utilizes available make-up rights, the Company records a refund liability for the amount to be returned to the customer through an annual adjustment process. For contracts where no make-up rights exist, revenue is recognized to take-or-pay levels once Pembina has an enforceable right to payment for the take-or-pay volumes. Make-up rights generally expire within a contract year, and the majority of the related contract years follow the calendar year. Under the previously utilized IAS 18, revenue was recognized based on capacity provided under contracted firm service rather than volumes transported, processed, or stored. This resulted in revenue being recognized to take-or-pay levels once firm service had been provided for all contracts. As a result of IFRS 15 adoption, when customers are transporting, processing, or storing volumes below their take-or-pay commitments early in a contract year, and the customer has the right to exercise their make up rights against future firm volume commitments, there will be a change to the timing of revenue recognition. Where the Company has a right to invoice to take-or-pay levels throughout the contract year, revenue is deferred and a contract liability is recorded for the volumes invoiced that were not utilized by the customer. Once the customers has used its make-up rights or it is determined to be remote that a customer will use them, the previously deferred revenue is recognized. In these instances, there will be a deferral of revenue in early quarters of the year, with subsequent recognition occurring in later quarters although there is no impact on cash flows. The change did not have a significant impact on annual revenue recognition as the majority of related contracts have make-up rights that expire within a given calendar year. For certain arrangements where the customer does not have make-up rights, where the make-up rights have been determined to be insignificant, and for cost of service agreements, revenue is recognized using the practical expedient to recognize revenue in an amount equal to the Company's right to invoice. For these arrangements, the consideration the Company is entitled to invoice in each period is representative of the value provided to the customer. There is no change to how revenue is recognized for these contracts under IFRS 15 compared to IAS 18. When up-front payments or non-cash consideration is received in exchange for future services to be performed, revenue is deferred as a contract liability and recognized over the period the performance obligation is expected to be satisfied. Non-cash consideration is measured at the fair value of the non-cash consideration received. There is no change to how revenue is recognized for these contracts under IFRS 15 compared to IAS 18. Fee-for-Service Fee-for-service revenue includes firm contracted revenue that is not subject to take-or-pay commitments and interruptible revenue. The Company satisfies its performance obligations for transportation, gas processing, fractionation, terminalling, and storage as volumes of product are transported, processed, or stored. Revenue is based on a contracted fee and consideration is variable with respect to volumes. Payment is due in the month following the Company’s provision of service. There is no change to how revenue is recognized for fee-for-service revenue under IFRS 15 compared to IAS 18. Product Sales The Company satisfies its performance obligation on product sales at the time legal title to the product is transferred to the customer. Certain commodity buy/sell arrangements where control of the product has not transferred to the Company are recognized on a net basis in revenue. For product sales, revenue is recognized using the practical expedient to recognize revenue in an amount equal to the Company's right to invoice as the consideration the Company is entitled to invoice in each period is representative of the value provided to the customer. There is no change to how revenue is recognized for these product sales under IFRS 15 compared to IAS 18. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Significant Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES The accounting policies as set out below have been applied consistently to all periods presented in these consolidated financial statements. a. Basis of consolidation i) Business combinations The Company measures goodwill as the fair value of the consideration transferred including the recognized amount of any non-controlling interest in the acquiree, less the fair value of the identifiable assets acquired and liabilities assumed, all measured as of the acquisition date. When the excess is negative, a bargain purchase gain is recognized immediately in earnings. The Company elects on a transaction-by-transaction basis whether to measure non-controlling interest at its fair value, or at its proportionate share of the recognized amount of the identifiable net assets, at the acquisition date. Non-controlling interests represent equity interests in subsidiaries owned by outside parties. The share of net assets of subsidiaries attributable to non-controlling interests is presented as a separate component of equity. Their share of net income and other comprehensive income is also recognized in this separate component of equity. Changes in the Company's ownership interest in subsidiaries that do not result in a loss of control are accounted for as equity transactions. Adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary. No adjustments are made to goodwill and no gain or loss is recognized in earnings. Transaction costs, other than those associated with the issue of debt or equity securities, that the Company incurs in connection with a business combination are expensed as incurred. ii) Subsidiaries Subsidiaries are entities, including unincorporated entities such as partnerships, controlled by the Company. The financial results of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries are aligned with the policies adopted by the Company. iii) Joint arrangements Joint arrangements represent activities where the Company has joint control established by a contractual agreement. Joint control requires unanimous consent for the relevant financial and operational decisions. A joint arrangement is either a joint operation, whereby the parties have rights to the assets and obligations for the liabilities, or a joint venture, whereby the parties have rights to the net assets. For a joint operation, the consolidated financial statements include the Company's proportionate share of the assets, liabilities, revenues, expenses and cash flows of the arrangement with items of a similar nature on a line-by-line basis, from the date that joint control commences until the date that joint control ceases. Joint ventures are accounted for using the equity method of accounting and are initially recognized at cost, or fair value if acquired as part of a business combination. Joint ventures are adjusted thereafter for the post-acquisition change in the Company's share of the equity accounted investment's net assets. The Company's consolidated financial statements include its share of the equity accounted investment's profit or loss and other comprehensive income, until the date that joint control ceases. When the Company's share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest, including any long-term investments, is reduced to nil, and the recognition of further losses is discontinued except to the extent that the Company has an obligation or has made payments on behalf of the investee. Distributions from investments in equity accounted investees are recognized when received. Acquisition of an incremental ownership in a joint arrangement where the Company maintains joint control is recorded at cost or fair value if acquired as part of a business combination. Where the Company has a partial disposal, including a deemed disposal, of a joint arrangement and maintains joint control, the resulting gains or losses are recorded in earnings at the time of disposal. iv) Transactions eliminated on consolidation Balances and transactions, and any revenue and expenses arising from intersegment transactions, are eliminated in preparing the consolidated financial statements. Gains arising from transactions with investments in equity accounted investees are eliminated against the investment to the extent of the Company's interest in the investee. Losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment. v) Foreign currency Transactions in foreign currencies are translated to the Company's functional currency at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the Company's functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortized cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortized cost in foreign currency translated at the exchange rate at the end of the reporting period. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Gains and losses arising from translation of foreign subsidiaries or investments in equity accounted investees with a functional currency other than the Company's Canadian dollar reporting currency are reflected in other comprehensive income. Asset and liability accounts are translated at the period-end exchange rates while revenues, expenses, gains and losses are translated at the exchange rates in effect at the time of the transaction. b. Cash and cash equivalents Cash and cash equivalents comprise cash balances, call deposits and short-term investments with original maturities of ninety days or less, and are used by the Company in the management of its short-term commitments. c. Inventories Inventories are measured at the lower of cost and net realizable value and consist primarily of crude oil, NGL and spare parts. The cost of inventories is determined using the weighted average costing method and includes direct purchase costs and when applicable, costs of production, extraction, fractionation, and transportation. Net realizable value is the estimated selling price in the ordinary course of business less the estimated selling costs. All changes in the value of the inventories are reflected in earnings. d. Financial instruments Financial assets and liabilities are offset and the net amount presented in the consolidated statement of financial position when, and only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. i) Non-derivative financial assets The Company initially recognizes loans, receivables, advances to related parties and deposits on the date that they are originated. All other financial assets are recognized on the trade date at which the Company becomes a party to the contractual provisions of the instrument. The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Company is recognized as a separate asset or liability. On derecognition, the difference between the carrying amount of the financial asset and the consideration received is recognized in earnings. The Company classifies non-derivative financial assets into the following categories: Financial assets at amortized cost A financial asset is classified in this category if the asset is held within a business model whose objective is to collect contractual cash flows on specified dates that are solely payments of principal and interest. At initial recognition, financial assets at amortized costs are recognized at fair value plus directly attributable transaction costs. Subsequent to initial recognition, these financial assets are recorded at amortized cost using the effective interest method less any impairment losses. Financial assets at fair value through other comprehensive income A financial asset is classified in this category if the asset is held within a business model whose objective is met by both collecting contractual cash flows and selling financial assets. The Company did not have any financial assets classified as fair value through other comprehensive income during the years covered in these financial statements. Financial assets at fair value through earnings A financial asset is classified in this category if it is not classified as a financial asset at amortized cost or a financial asset at fair value through other comprehensive income, or it is an equity instrument designated as such on initial recognition. At initial recognition, and subsequently, these financial assets are recognized at fair value. ii) Non-derivative financial liabilities The Company initially recognizes financial liabilities on the trade date at which the Company becomes a party to the contractual provisions of the instrument. Non-derivative financial liabilities are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortized cost using the effective interest method. The Company derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire. On derecognition, the difference between the carrying value of the liability and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in earnings. The Company records a modification or exchange of an existing liability as a derecognition of the financial liability if the terms are substantially different, resulting in a difference of more than 10 percent when comparing the present value of the remaining cash flows of the existing liability to the present value of the discounted cash flow under the new terms using the original effective interest rate. If a modification to an existing liability causes a revision to the estimated payments of the liability but is not treated as a derecognition, the Company adjusts the gross carrying amount of the liability to the present value of the estimated contractual cash flows using the instrument’s original effective interest rate, with the difference recorded in earnings. The Company's non-derivative financial liabilities are comprised of the following: bank overdrafts, trade payables and accrued liabilities, taxes payable, dividends payable, loans and borrowings including finance lease obligations, other liabilities and the liability component of convertible debentures. Bank overdrafts that are repayable on demand and form an integral part of the Company's cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. iii) Common share capital Common shares are classified as equity. Incremental costs directly attributable to the issue of common shares and share options are recognized as a deduction from equity, net of any tax effects. iv) Preferred share capital Preferred shares are classified as equity because they bear discretionary dividends and do not contain any obligations to deliver cash or other financial assets. Discretionary dividends are recognized as equity distributions on approval by the Company's Board of Directors. Incremental costs directly attributable to the issue of preferred shares are recognized as a deduction from equity, net of any tax effects. v) Compound financial instruments The Company's convertible debentures are compound financial instruments consisting of a financial liability and an embedded conversion feature. In accordance with IFRS 9, the embedded derivatives are required to be separated from the host contracts and accounted for as stand-alone instruments. Debentures containing a cash conversion option allow Pembina to pay cash to the converting holder of the debentures, at the option of the Company. As such, the conversion feature is presented as a financial derivative liability within long-term derivative financial instruments. Debentures without a cash conversion option are settled in shares on conversion, and therefore the conversion feature is presented within equity, in accordance with its contractual substance. On initial recognition and at each reporting date, the embedded conversion feature is measured at fair value using an option pricing model. Subsequent to initial recognition, any unrealized gains or losses arising from fair value changes are recognized through earnings in the statement of earnings and comprehensive income at each reporting date. If the conversion feature is included in equity, it is not remeasured subsequent to initial recognition. On initial recognition, the debt component, net of issue costs, is recorded as a financial liability and accounted for at amortized cost. Subsequent to initial recognition, the debt component is accreted to the face value of the debentures using the effective interest rate method. Upon conversion, the corresponding portions of the debt and equity are removed from those captions and transferred to share capital. vi) Derivative financial instruments The Company holds derivative financial instruments to manage its interest rate, commodity, power costs and foreign exchange risk exposures as well as a cash conversion features on convertible debentures and a redemption liability. Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative meet the definition of a derivative, and the combined instrument is not measured at fair value through earnings. Derivatives are recognized initially at fair value with attributable transaction costs recognized in earnings as incurred. Subsequent to initial recognition, derivatives are measured at fair value and changes in non-commodity-related derivatives are recognized immediately in earnings as part of net finance costs and changes in commodity-related derivatives are recognized immediately in earnings. e. Property, plant and equipment i) Recognition and measurement Items of property, plant and equipment are measured initially at cost, unless they are acquired as part of a business combination in which case they are initially measured at fair value. Thereafter, property, plant and equipment are recorded net of accumulated depreciation and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, estimated decommissioning provisions and borrowing costs on qualifying assets. Cost may also include any gain or loss realized on foreign currency transactions directly attributable to the purchase or construction of property, plant and equipment. Purchased software that is integral to the functionality of the related equipment is capitalized as part of that equipment. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate components of property, plant and equipment. The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognized in earnings. ii) Subsequent costs The cost of replacing a part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company, and its cost can be measured reliably. The carrying amount of the replaced part is derecognized and recorded as depreciation expense. The cost of maintenance and repair expenses of the property, plant and equipment are recognized in earnings as incurred. iii) Depreciation Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed and if a component has a useful life that is different from the remainder of the asset, that component is depreciated separately. Land and linefill are not depreciated. Depreciation is recognized in earnings on a straight line or declining balance basis, which most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Depreciation methods, useful lives, economic lives and residual values are reviewed annually and adjusted if appropriate. f. Intangible assets i) Goodwill Goodwill that arises upon acquisitions is included in intangible assets and goodwill. See Note 4(a)(i) for the policy on measurement of goodwill at initial recognition. Subsequent measurement Goodwill is measured at cost less accumulated impairment losses. In respect of investments in equity accounted investees, goodwill is included in the carrying amount of the investment, and an impairment loss on such an investment is allocated to the investment and not to any asset, including goodwill, that forms the carrying amount of the investment in equity accounted investee. ii) Other intangible assets Other intangible assets acquired individually by the Company are initially recognized and measured at cost, unless they are acquired as part of a business combination in which case they are initially measured at fair value. Thereafter, intangible assets with finite useful lives are recorded net of accumulated amortization and accumulated impairment losses. iii) Subsequent expenditures Subsequent expenditures are capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditures are recognized in earnings as incurred. iv) Amortization Amortization is based on the cost of an asset less its residual value. Amortization is recognized in earnings over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. Amortization methods, useful lives and residual values are reviewed annually and adjusted if appropriate. g. Leases At inception of an arrangement, the Company determines whether such an arrangement is or contains a lease. A specific asset is the subject of a lease if fulfilment of the arrangement is dependent on the use of that specified asset. An arrangement conveys the right to use the asset if the arrangement conveys to a lessee the right to control the use of the underlying asset. At inception or upon reassessment of the arrangement, the Company separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. Leases which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. The leased asset is initially recognized at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Minimum lease payments made under finance leases are apportioned between the finance cost and the reduction of the outstanding liability. The finance cost is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Other leases are operating leases and are not recognized in the Company's consolidated statement of financial position. Payments made under lessee operating leases are recognized in earnings on a straight-line basis over the term of the lease. Lease incentives received are deferred and recognized over the term of the lease. Payments received under lessor operating leases are recognized in earnings in accordance with the benefit received by the customer. h. Impairment i) Non-derivative financial assets Impairment of financial assets carried at amortized cost is assessed using the lifetime expected credit loss of the financial asset at initial recognition and throughout the life of the financial asset, except for advances to related parties and other assets for which credit risk has not increased significantly since initial recognition, which are assessed at the twelve month expected credit loss of the financial asset at the reporting date. The Company uses a loss allowance matrix to determine the impairment loss allowance for trade receivables. In determining the loss allowance matrix, the Company uses historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for management's judgment as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends. Impairment losses are recognized in earnings and reflected as a reduction in the related financial asset. ii) Non-financial assets The carrying amounts of the Company's non-financial assets, other than inventory, assets arising from employee benefits and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated. For goodwill and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated annually in connection with the annual goodwill impairment test. An impairment loss is recognized if the carrying amount of an asset or its related CGU exceeds its estimated recoverable amount. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset, CGU or group of CGUs. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into CGUs, the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets. CGUs may incorporate integrated assets from multiple operating segments. For the purpose of goodwill impairment testing, CGUs are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal purposes. Goodwill acquired in a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination. The Company's corporate assets do not generate separate cash inflows and are utilized by more than one CGU. Corporate assets are allocated to CGUs on a reasonable and consistent basis and tested for impairment as part of the testing of the CGU to which the corporate asset is allocated. If there is an indication that a corporate asset may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset has been allocated. Impairment losses are recognized in earnings. Impairment losses recognized in respect of a CGU (group of CGUs) are allocated first to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the CGU (group of CGUs) on a pro rata basis. An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Goodwill that forms part of the carrying amount of an investment in an equity accounted investee is not recognized separately, and therefore is not tested for impairment separately. Instead, the entire amount of the investment is tested for impairment as a single asset when there is objective evidence that the equity accounted investee may be impaired, unless the equity accounted investee does not generate cash flows that are largely independent of those from other assets of the entity in which case it is combined in a CGU with the related assets. i. Employee benefits i) Defined contribution plans A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in earnings in the periods during which services are rendered by employees. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available. Contributions to a defined contribution plan due more than twelve months after the end of the period in which the employees render the service are discounted to their present value. ii) Defined benefit pension plans A defined benefit pension plan is a post-employment benefit plan other than a defined contribution plan. The Company's net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods, discounted to determine its present value, less the fair value of any plan assets. The discount rate used to determine the present value is established by referencing market yields on high-quality corporate bonds on the measurement date with cash flows that match the timing and amount of expected benefits. The calculation is performed, at a minimum, every three years by a qualified actuary using the actuarial cost method. When the calculation results in a benefit to the Company, the recognized asset is limited to the present value of economic benefits available in the form of future expenses payable from the plan, any future refunds from the plan or reductions in future contributions to the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements that apply to any plan in the Company. An economic benefit is available to the Company if it is realizable during the life of the plan or on settlement of the plan liabilities. When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognized in earnings immediately. The Company recognizes all actuarial gains and losses arising from defined benefit plans in other comprehensive income and expenses related to defined benefit plans in earnings. The Company recognizes gains or losses on the curtailment or settlement of a defined benefit plan when the curtailment or settlement occurs. The gain or loss on curtailment comprises any resulting change in the fair value of plan assets, change in the present value of defined benefit obligation and any related actuarial gains or losses and past service cost that had not previously been recognized. iii) Short-term employee benefits Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably. iv) Share-based payment transactions For equity settled share-based payment plans, the fair value of the share-based payment at grant date is recognized as an expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that meet the related service conditions at the vesting date. For cash settled share-based payment plans, the fair value of the amount payable to employees is recognized as an expense with a corresponding increase in liabilities, over the period that the employees unconditionally become entitled to payment. The liability is remeasured at each reporting date and at settlement date. Any changes in the fair value of the liability are recognized as an expense in earnings. j. Provisions A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Provisions are remeasured at each reporting date based on the best estimate of the settlement amount. The unwinding of the discount rate is recognized as accretion in finance costs. i) Decommissioning provision The Company's activities give rise to certain dismantling, decommissioning, environmental reclamation and remediation obligations at the end of an asset's economic life. A provision is made for the estimated cost of site restoration and capitalized in the relevant asset category. Decommissioning obligations are measured at the present value, based on a risk-free rate, of management's best estimate of what is reasonably expected to be incurred to settle the obligation at the end of an asset's economic life. Subsequent to the initial measurement, the obligation is adjusted at the end of each period to reflect the passage of time, changes in the risk-free rate and changes in the estimated future cash flows underlying the obligation. The increase in the provision due to the passage of time is recognized as accretion in finance costs whereas increases or decreases due to changes in the estimated future cash flows or risk-free rate are added to or deducted from the cost of the related asset. k. Revenue Accounting policies related to revenue from contracts with customers are disclosed in Note 3 Changes in Accounting Policies. l. Finance income and finance costs Finance income comprises interest income on funds deposited and invested, gains on non-commodity-related derivatives measured at fair value through earnings and foreign exchange gains. Interest income is recognized as it accrues in earnings, using the effective interest rate method. Finance costs comprise interest expense on loans and borrowings and convertible debentures, accretion on provisions, losses on disposal of available for sale financial assets, losses on non-commodity-related derivatives, impairment losses recognized on financial assets (other than trade and other receivables) and foreign exchange losses. Borrowing costs that are not directly attributable to the acquisition or construction of a qualifying asset are recognized in earnings using the effective interest rate method. m. Income tax I |
DETERMINATION OF FAIR VALUES
DETERMINATION OF FAIR VALUES | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurement [Abstract] | |
DETERMINATION OF FAIR VALUES | DETERMINATION OF FAIR VALUES A number of the Company's accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability. i) Property, plant and equipment The fair value of property, plant and equipment recognized as a result of a business combination or transferred from a customer is based on market values when available, income approach and depreciated replacement cost when appropriate. Depreciated replacement cost reflects adjustments for physical deterioration as well as functional and economic obsolescence. ii) Intangible assets The fair value of intangible assets acquired in a business combination is determined by an active market value or using the multi-period excess earnings method, whereby the subject asset is valued after deducting a fair return on all other assets that are part of creating the related cash flows. The fair value of other intangible assets is based on the discounted cash flows expected to be derived from the use and eventual sale of the assets. iii) Derivatives Fair value of derivatives are estimated by reference to independent monthly forward prices, interest rate yield curves, currency rates and quoted market prices per share at the period ends. Fair values reflect the credit risk of the instrument and include adjustments to take account of the credit risk of the company, entity and counterparty when appropriate. iv) Non-derivative financial assets and liabilities The fair value of non-derivative financial assets and liabilities is determined on initial recognition, on a recurring basis, or for disclosure purposes. Fair values of financial assets at amortized cost are calculated based on the present value of estimated future principal and interest cash flows, discounted at the market rate of interest at the reporting date. Fair values of financial assets held at fair value are calculated using a probability-weighted income approach based on current market expectations for future cash flows. In respect of convertible debentures, the fair value is determined by the market price of the convertible debenture on the reporting date. For finance leases, the market rate of interest is determined by reference to similar lease agreements. For other financial liabilities where market rates are not readily available, a risk adjusted market rate is used which incorporates the nature of the instrument as well as the risk associated with the underlying cash payments. v) Share-based compensation transactions The fair value of employee share options is measured using the Black-Scholes formula on grant date. Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic volatility adjusted for changes expected due to publicly available information), weighted average expected life of the instruments (based on historical experience and general option holder behaviour), expected dividends, expected forfeitures and the risk-free interest rate (based on government bonds). Service and non-market performance conditions attached to the transactions are not taken into account in determining fair value. The fair value of the long-term share unit award incentive plan and associated distribution units are measured based on the volume-weighted average price for 20 days ending at the reporting date of the Company's shares. vi) Finance lease assets The fair value of finance lease assets is based on market values at the inception date. |
ACQUISITION
ACQUISITION | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations1 [Abstract] | |
ACQUISITION | ACQUISITION On October 2, 2017 , Pembina acquired all the issued and outstanding shares of Veresen Inc. ("Veresen") by way of a plan of arrangement (the “Arrangement”) for total consideration of $6.4 billion comprised of $1.5 billion in cash and 99.466 million common shares valued at $4.4 billion and series 15, 17 and 19 preferred shares valued at $522 million . In accordance with the Arrangement, Veresen was amalgamated with Pembina and the outstanding Veresen preferred shares were exchanged for Pembina preferred shares with the same terms and conditions. The acquisition was accounted for as a business combination using the acquisition method where the acquired tangible and intangible assets and assumed liabilities were recorded at their estimated fair values at the date of acquisition. The purchase price equation was based on assessed fair values as follows: ($ millions) October 2, 2017 Purchase Price Consideration Common shares 4,356 Cash 1,522 Preferred shares 522 6,400 Current assets 303 Investments in jointly controlled businesses 6,115 Property, plant and equipment 612 Intangible assets & other long term assets 175 Goodwill 1,781 Current liabilities (192 ) Long term debt (993 ) Deferred tax liabilities (1,210 ) Decommissioning provision (10 ) Other long term liabilities (121 ) Non-controlling interest (60 ) 6,400 The determination of fair values and the purchase price equation was based upon an independent valuation. The primary drivers that generated goodwill were synergies and business opportunities from the integration of Pembina and Veresen. Upon closing of the Acquisition, Pembina repaid Veresen's revolving credit facility of $152 million . The recognition of goodwill is not expected to be deductible for tax purposes. The Company recognized $25 million in acquisition-related expenses in 2017. All acquisition-related expenses were expensed as incurred and included in other expenses in the Consolidated Statement of Earnings and Comprehensive Income. Revenue generated by the Veresen business for the period from the Acquisition date of October 2, 2017 to December 31, 2017 was $15 million . Net earnings for the same period were $111 million . If the acquisition had occurred on January 1, 2017, management estimates that consolidated revenue would have increased an additional $44 million and consolidated gross profit for the year would have increased an additional $247 million . In determining these amounts, management assumed that the fair value adjustments that arose on the date of acquisition would have been the same if the acquisition had occurred on January 1, 2017. During the twelve months ended December 31, 2018 Goodwill and Deferred tax liabilities in the purchase price equation were adjusted by $7 million , to reflect a reduction of tax losses available for future deduction. |
TRADE RECEIVABLES AND OTHER
TRADE RECEIVABLES AND OTHER | 12 Months Ended |
Dec. 31, 2018 | |
Subclassifications of assets, liabilities and equities [abstract] | |
TRADE RECEIVABLES AND OTHER | TRADE RECEIVABLES AND OTHER As at December 31 ($ millions) 2018 2017 Trade receivables from customers 178 178 Other receivables 411 335 Prepayments 16 17 Impairment loss allowance (1 ) (1 ) Total trade receivables and other 604 529 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2018 | |
Property, plant and equipment [abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT ($ millions) Land and Land Rights Pipelines Facilities and Equipment Cavern Storage and Other Assets Under Construction Total Cost Balance at December 31, 2016 218 4,253 5,514 1,089 1,965 13,039 Additions and transfers 70 1,895 1,230 133 (1,428 ) 1,900 Acquisition (Note 6) 41 448 — — 123 612 Change in decommissioning provision — 63 (21 ) — — 42 Disposals and other — (9 ) (8 ) 1 (1 ) (17 ) Balance at December 31, 2017 329 6,650 6,715 1,223 659 15,576 Additions and transfers 12 531 469 231 291 1,534 Change in decommissioning provision — (10 ) 5 19 — 14 Disposals and other (1 ) (7 ) (30 ) 5 (11 ) (44 ) Balance at December 31, 2018 340 7,164 7,159 1,478 939 17,080 Depreciation Balance at December 31, 2016 7 966 575 160 — 1,708 Depreciation 2 136 148 48 — 334 Disposals and other — (6 ) (2 ) (4 ) — (12 ) Balance at December 31, 2017 9 1,096 721 204 — 2,030 Depreciation 3 142 164 55 — 364 Disposals and other — (17 ) (18 ) (9 ) — (44 ) Balance at December 31, 2018 12 1,221 867 250 — 2,350 Carrying amounts Balance at December 31, 2017 320 5,554 5,994 1,019 659 13,546 Balance at December 31, 2018 328 5,943 6,292 1,228 939 14,730 Property, plant and equipment under construction Costs of assets under construction at December 31, 2018 totaled $939 million ( 2017 : $659 million ) including capitalized borrowing costs. For the year ended December 31, 2018 , included in additions and transfers are capitalized borrowing costs related to the construction of new pipelines or facilities amounting to $35 million ( 2017 : $63 million ), with capitalization rates ranging from 3.86 percent to 4.01 percent ( 2017 : 3.87 percent to 4.39 percent). Depreciation Pipeline assets are depreciated using the straight line method over four to 75 years with the majority of assets depreciated over 40 years. Facilities and equipment are depreciated using the straight line method over four to 75 years with the majority of assets depreciated over 40 years. Other assets are depreciated using the straight line method over three to 40 years with the majority of assets depreciated over 40 years. These rates are established to depreciate remaining net book value over the shorter of their useful lives or economic lives. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL Intangible Assets ($ millions) Goodwill Purchase and Sale Contracts and Other Customer Relationships Purchase Option Total Total Goodwill & Intangible Assets Cost Balance at December 31, 2016 2,097 212 488 277 977 3,074 Acquisition (Note 6) 1,774 — 151 — 151 1,925 Additions and other — 4 (1 ) — 3 3 Balance at December 31, 2017 3,871 216 638 277 1,131 5,002 Additions and other 7 11 1 — 12 19 Transfers — — — (277 ) (277 ) (277 ) Balance at December 31, 2018 3,878 227 639 — 866 4,744 Amortization Balance at December 31, 2016 — 127 113 — 240 240 Amortization — 18 30 — 48 48 Balance at December 31, 2017 — 145 143 — 288 288 Amortization — 19 28 — 47 47 Balance at December 31, 2018 — 164 171 — 335 335 Carrying amounts Balance at December 31, 2017 3,871 71 495 277 843 4,714 Balance at December 31, 2018 3,878 63 468 — 531 4,409 Intangible assets with a finite useful life are amortized using the straight line method over two to 60 years. The purchase option attributable to the Facilities Division of $277 million to assume an additional interest in the Younger Facilities was reclassified to property, plant and equipment on exercise of the option effective April 1, 2018. The aggregate carrying amount of intangible assets and goodwill allocated to each operating segment is as follows: As at December 31 ($ millions) 2018 2017 (1) Goodwill Intangible Assets Total Goodwill Intangible Assets Total Pipelines Division 1,897 278 2,175 1,891 290 2,181 Facilities Division 541 102 643 540 380 920 Marketing & New Ventures Division 1,440 131 1,571 1,440 153 1,593 Corporate — 20 20 — 20 20 3,878 531 4,409 3,871 843 4,714 (1) The allocation of goodwill and intangible assets have been restated with comparative operating segments. Goodwill Impairment Testing For the purpose of impairment testing, goodwill is allocated to the Company’s operating segments which represents the lowest level within the Company at which the goodwill is monitored for management purposes. As a result of the change in operating segments effective January 1, 2018 as discussed in Note 20, goodwill has been reallocated accordingly. Consistent with the prior year, impairment testing for goodwill was performed as at September 30, 2018. The recoverable amounts were based on their value in use and were determined to be higher than their carrying amounts. The recoverable amount was determined using the value-in-use model by discounting the future cash flows generated from the continuing use of each operating segment. The calculation of the value in use is based on the following key assumptions: • Cash flows are projected based on past experience, actual operating results and five years ( 2017 : four years) of the business plan approved by management. • Long-term growth: cash flows for periods up to 75 years ( 2017 : 75 years) were extrapolated using a constant medium-term inflation, except where contracted, long-term cash flows indicated that no inflation should be applied or a specific reduction in cash flows was more appropriate. • Pre-tax discount rates were applied in determining the recoverable amount of operating segments. Discount rates were estimated based on past experience, the risk free rate and average cost of debt, targeted debt to equity ratio, in addition to estimates of the specific operating segment’s equity risk premium, size premium, projection risk, betas and tax rate. The following summarizes the key assumptions used in the impairment test: Operating Segments 2018 Pipelines Division Facilities Division Marketing & New Ventures Division (Percent) Pre-tax discount rate 7.60 7.47 13.08 Adjusted inflation rate 1.22 1.61 1.80 Incremental increase in discount rate that would result in carrying value equal to recoverable amount Increase in pre-tax discount rate 3.60 4.87 4.75 |
INVESTMENTS IN EQUITY ACCOUNTED
INVESTMENTS IN EQUITY ACCOUNTED INVESTEES | 12 Months Ended |
Dec. 31, 2018 | |
Interests In Other Entities [Abstract] | |
INVESTMENTS IN EQUITY ACCOUNTED INVESTEES | INVESTMENTS IN EQUITY ACCOUNTED INVESTEES Ownership Interest at December 31 Share of Profit from Equity Investments Investment in Equity Accounted Investees at December 31 12 Months Ended December 31 ($ millions) 2018 2017 2018 2017 2018 2017 Alliance 50 % 50 % 160 40 2,799 2,776 Aux Sable 42.7% - 50% 42.7% - 50% 102 22 480 449 Ruby Pipeline (1) 50% (1) 50% (1) 118 29 1,648 1,516 Veresen Midstream 45.3 % 46.3 % 26 22 1,324 1,365 Other 50% - 75% 50% - 75% 5 3 117 123 411 116 6,368 6,229 (1) Ownership interest in Ruby is presented as a 50 percent proportionate share with the benefit of a preferred distribution structure. Share of profit from equity accounted investees for Ruby is equal to the preferred interest distribution. Investments in equity accounted investees include the unamortized excess of the purchase price over the underlying net book value of the investee’s assets and liabilities at the purchase date, which is comprised of $98 million ( 2017 : $90 million ) Goodwill, $3.0 billion ( 2017 : $3.1 billion ) in property, plant and equipment and intangibles and $52 million in long-term debt ( 2017 : $87 million ). The Company has US $2.6 billion in Investments in Equity Accounted Investees that is held by entities whose functional currency is the US dollar. The resulting foreign exchange gain for the year ended December 31, 2018 of $ 295 million (2017: $ 16 million ) has been included in Other Comprehensive Income. Distributions received from equity investments for the year ended December 31, 2018 were $622 million ( 2017 : $157 million ) and are included in Operating Activities in the Consolidated Statement of Cash Flows. Distributions from Alliance are subject to satisfying certain financing conditions including a minimum debt service coverage ratio requirement. Contributions made to investments in equity accounted investees for the year ended December 31, 2018 were $58 million ( 2017 : $7 million ) and are included in Investing activities in the Consolidated Statement of Cash Flows. Summarized combined financial information of equity accounted investees (presented at 100 percent) is as follows: For the years ended December 31 ($ millions) 2018 2017 Net Income and Comprehensive Income Revenue 3,605 870 Cost of sales (1,566 ) (377 ) General and administrative expense (171 ) (69 ) Depreciation and amortization (511 ) (131 ) Finance costs and other (308 ) (80 ) Net Income and Comprehensive Income 1,049 213 Net income and Comprehensive Income attributable to Pembina 411 116 As at December 31 ($ millions) 2018 2017 Balance Sheet Current assets 838 763 Non-current assets 11,667 11,420 Current liabilities 908 957 Non-current liabilities 5,262 4,978 On March 29, 2018, Ruby Pipeline, L.L.C., in which Pembina owns a 50 percent preferred interest, amended the maturity date of its US $203 million 364-Day Term Loan, originally maturing March 30, 2018 to March 28, 2019. The Term Loan will continue to amortize at US $16 million per quarter (US $8 million net), beginning March 30, 2018, until a final bullet payment of US $141 million (US $70 million net) is payable on the amended maturity date. On April 20, 2018 Veresen Midstream successfully amended and extended its Senior Secured Credit Facilities which were originally scheduled to mature on March 31, 2020. Under the terms of the amendment and extension reached with a syndicate of lenders, Veresen Midstream increased its borrowing capacity to $200 million under the Revolving Credit Facility and to $2.6 billion of availability under the Term Loan A and used the proceeds to repay an existing US $705 million Term Loan B on April 30, 2018. Other terms and conditions in the facilities were modified to reflect the operating nature of the business including modifying the covenant package and increasing the permitted distributions out of Veresen Midstream. The maturity date of the two debt facilities was extended to April 20, 2022. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
INCOME TAXES | INCOME TAXES The movements of the components of the deferred tax assets and deferred tax liabilities are as follows: ($ millions) Balance at December 31, 2017 Recognized in Earnings Recognized in Other Comprehensive Income Acquisition Equity Other Balance at December 31, 2018 Deferred income tax assets Derivative financial instruments 11 (29 ) — — — — (18 ) Employee benefits 7 — 2 — — — 9 Share-based payments 21 5 — — — — 26 Provisions 153 3 — — — — 156 Benefit of loss carryforwards 180 (33 ) — (7 ) — 13 153 Other deductible temporary differences 56 16 — — (4 ) — 68 Deferred income tax liabilities Property, plant and equipment (1,361 ) (299 ) — — — — (1,660 ) Intangible assets (198 ) 80 — — — — (118 ) Investments in equity accounted investees (1,173 ) (89 ) — — — — (1,262 ) Taxable limited partnership income deferral (56 ) (66 ) — — — — (122 ) Other taxable temporary differences (16 ) 18 — — — (8 ) (6 ) Total deferred tax liabilities (2,376 ) (394 ) 2 (7 ) (4 ) 5 (2,774 ) ($ millions) Balance at December 31, 2016 Recognized in Earnings Recognized in Other Comprehensive Income Acquisition Equity Other Balance at December 31, 2017 Deferred income tax assets Derivative financial instruments 20 (9 ) — — — — 11 Employee benefits 8 — (1 ) — — — 7 Share-based payments 12 9 — — — — 21 Provisions 133 12 — 8 — — 153 Benefit of loss carryforwards 90 (57 ) — 137 — 10 180 Other deductible temporary differences 41 12 — 11 (3 ) (5 ) 56 Deferred income tax liabilities Property, plant and equipment (1,193 ) (243 ) — 75 — — (1,361 ) Intangible assets (150 ) (6 ) — (42 ) — — (198 ) Investments in equity accounted investees (6 ) 190 — (1,357 ) — — (1,173 ) Taxable limited partnership income deferral (25 ) 4 — (35 ) — — (56 ) Other taxable temporary differences (10 ) (6 ) — — — — (16 ) Total deferred tax liabilities (1,080 ) (94 ) (1 ) (1,203 ) (3 ) 5 (2,376 ) The Company's consolidated statutory tax rate for the year ended December 31, 2018 was 27 percent ( 2017 : 27 percent). Reconciliation of effective tax rate For the years ended December 31 ($ millions, except as noted) 2018 2017 Earnings before income tax 1,742 1,025 Statutory tax rate 27 % 27 % Income tax at statutory rate 470 277 Tax rate changes on deferred income tax balances (1 ) 1 Changes in estimate and other (6 ) 18 U.S. Tax Reform — (166 ) Permanent items 1 12 Income tax expense 464 142 The Company’s estimate of impact of U.S. Tax Reform may be adjusted in the future based on anticipated regulations or guidance from the US Treasury and the Internal Revenue Service. Income tax expense For the years ended December 31 ($ millions) 2018 2017 Current tax expense 70 48 Deferred tax expense Origination and reversal of temporary differences 378 286 Tax rate changes on deferred tax balances (1 ) (191 ) Decrease (increase) in tax loss carry forward 17 (1 ) Total deferred tax expense 394 94 Total income tax expense 464 142 Deferred tax items recovered directly in equity For the years ended December 31 ($ millions) 2018 2017 Share issue costs (4 ) (3 ) Other comprehensive income (loss) 2 (1 ) Deferred tax items recovered directly in equity (2 ) (4 ) The Company has temporary differences associated with its investments in subsidiaries. At December 31, 2018 , the Company has no t recorded a deferred tax asset or liability for these temporary differences ( 2017 : nil ) as the Company controls the timing of the reversal and it is not probable that the temporary differences will reverse in the foreseeable future. At December 31, 2018 , the Company had US$221 million ( 2017 : US$261 million ) of U.S. tax losses that will expire after 2030 and $349 million ( 2017 : $394 million ) of Canadian tax losses that will expire after 2035. The Company has determined that it is probable that future taxable profits will be sufficient to utilize these losses. |
TRADE PAYABLES AND ACCRUED LIAB
TRADE PAYABLES AND ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
Subclassifications of assets, liabilities and equities [abstract] | |
TRADE PAYABLES AND ACCRUED LIABILITIES | TRADE PAYABLES AND ACCRUED LIABILITIES As at December 31 ($ millions) 2018 2017 Trade payables 519 465 Other payables & accrued liabilities 284 212 Total current trade and accrued liabilities 803 677 |
LOANS AND BORROWINGS
LOANS AND BORROWINGS | 12 Months Ended |
Dec. 31, 2018 | |
Financial Instruments [Abstract] | |
LOANS AND BORROWINGS | LOANS AND BORROWINGS This note provides information about the contractual terms of the Company's interest-bearing loans and borrowings, which are measured at amortized cost. Carrying value, terms and conditions, and debt maturity schedule Carrying value ($ millions) Authorized at December 31, 2018 Nominal interest rate Year of maturity December 31, 2018 December 31, 2017 Senior unsecured credit facilities (1) 3,520 3.2 (2) Various (1) 1,305 1,778 Senior unsecured notes – series A 73 5.565 2020 76 — Senior unsecured notes – series C 200 5.58 2021 199 199 Senior unsecured notes – series D 267 5.91 2019 267 266 Alberta Ethane Gathering System LP senior notes — 5.565 2020 — 77 Senior unsecured medium-term notes series 1 250 4.89 2021 250 249 Senior unsecured medium-term notes series 2 450 3.77 2022 449 449 Senior unsecured medium-term notes series 3 450 4.75 2043 446 446 Senior unsecured medium-term notes series 4 600 4.81 2044 596 596 Senior unsecured medium-term notes series 5 450 3.54 2025 448 448 Senior unsecured medium-term notes series 6 500 4.24 2027 498 498 Senior unsecured medium-term notes series 7 500 3.71 2026 498 497 Senior unsecured medium-term notes series 8 650 2.99 2024 646 645 Senior unsecured medium-term notes series 9 550 4.74 2047 541 541 Senior unsecured medium-term notes series 10 400 4.02 2028 398 — Senior unsecured medium-term notes series 11 300 4.75 2048 298 — Senior unsecured medium-term notes 1A — 4.00 2018 — 152 Senior unsecured medium-term notes 3A 50 5.05 2022 50 52 Senior unsecured medium-term notes 4A 200 3.06 2019 205 207 Senior unsecured medium-term notes 5A 350 3.43 2021 353 354 Finance lease liabilities and other — 14 9 Total interest bearing liabilities 7,537 7,463 Less current portion (480 ) (163 ) Total non-current 7,057 7,300 (1) Pembina's unsecured credit facilities include a $2.5 billion revolving facility that matures May 2023, $1.0 billion non-revolving term loan facility that matures March 2021 and a $20 million operating facility that matures May 2019, which is typically renewed on an annual basis. (2) The nominal interest rate is the weighted average of all drawn credit facilities based on the Company's credit rating at December 31, 2018 . Borrowings under the credit facilities bear interest at prime, Bankers' Acceptance, or LIBOR rates, plus applicable margins. On March 9, 2018, Pembina extended its revolving unsecured credit facility (the "Revolver") to May 31, 2023. Concurrently, Pembina entered into a $1 billion non-revolving term loan facility (the "Term Loan") for an initial three year term that is pre-payable at the Company's option. The other terms and conditions of the Term Loan, including financial covenants, are substantially similar to Pembina's Revolver. On March 26, 2018, Pembina closed an offering of $400 million of senior unsecured Series 10 medium-term notes (the "Series 10 Notes"). The Series 10 Notes have a fixed coupon of 4.02 percent per annum, paid semi-annually, and mature on March 27, 2028. Simultaneously, Pembina closed an offering of $300 million of senior unsecured Series 11 medium-term notes (the "Series 11 Notes"). The Series 11 Notes have a fixed coupon of 4.75 percent per annum, paid semi-annually, and mature on March 26, 2048. On April 4, 2018, Pembina entered into a note exchange agreement with AEGS noteholders to exchange AEGS senior notes for unsecured senior notes ("Series A") of Pembina under Pembina’s Note Indenture. The Series A fixed coupon remained at 5.565 percent per annum and are non-amortizing with a bullet payment of $73 million at maturity on May 4, 2020. On November 22, 2018, Pembina's $150 million senior unsecured medium term note 1A matured and was fully repaid. All facilities are governed by specific debt covenants which Pembina was in compliance with at December 31, 2018 ( 2017 : in compliance). For more information about the Company's exposure to interest rate, foreign currency and liquidity risk, see Note 24 Financial Instruments . |
CONVERTIBLE DEBENTURES
CONVERTIBLE DEBENTURES | 12 Months Ended |
Dec. 31, 2018 | |
Financial Instruments [Abstract] | |
CONVERTIBLE DEBENTURES | CONVERTIBLE DEBENTURES ($ millions, except as noted) Series F – 5.75% Conversion price (dollars per share) $29.53 Interest payable semi-annually in arrears on: June 30 and December 31 Maturity Date December 31, 2018 Balance at December 31, 2016 143 Conversions and redemptions (52 ) Unwinding of discount rate 1 Deferred financing fee (net of amortization) 1 Balance at December 31, 2017 93 Conversions and redemptions (93 ) Repayment at maturity (2 ) Unwinding of discount rate 1 Deferred financing fee (net of amortization) 1 Balance at December 31, 2018 — On December 31, 2018, Pembina's Series F Convertible Debentures matured. At maturity, the outstanding principal of $1.6 million plus accrued and unpaid interest was settled in cash. FINANCIAL INSTRUMENTS ancial risk management Pembina has exposure to counterparty credit risk, liquidity risk and market risk. Pembina recognizes that effective management of these risks is a critical success factor in managing organization and shareholder value. Risk management strategies, policies and limits ensure risks and exposures are aligned to Pembina's business strategy and risk tolerance. The Company's Board of Directors is responsible for providing risk management oversight at Pembina and oversees how management monitors compliance with the Company's risk management policies and procedures and reviews the adequacy of this risk framework in relation to the risks faced by the Company. Internal audit personnel assist the Board of Directors in its oversight role by monitoring and evaluating the effectiveness of the organization's risk management system. Counterparty credit risk Counterparty credit risk represents the financial loss the Company may experience if a counterparty to a financial instrument or commercial agreement failed to meet its contractual obligations to Pembina in accordance with the terms and conditions of the financial instruments or agreements with the Company. Counterparty credit risk arises primarily from the Company's cash and cash equivalents, trade and other receivables, advances to related parties, and from counterparties to its derivative financial instruments. The carrying amount of the Company's cash and cash equivalents, trade and other receivables, advances to related parties and derivative financial instruments represents the maximum counterparty credit exposure, without taking into account security held. The Company manages counterparty credit risk through established credit management techniques, including conducting comprehensive financial and other assessments for all new counterparties and regular reviews of existing counterparties to establish and monitor a counterparty's creditworthiness, setting exposure limits, monitoring exposures against these limits and obtaining financial assurances where warranted. The Company utilizes various sources of financial, credit and business information in assessing the creditworthiness of a counterparty including external credit ratings, where available, and in other cases, detailed financial statement analysis in order to generate an internal credit rating based on quantitative and qualitative factors. The establishment of counterparty exposure limits is governed by a Board of Directors designated counterparty exposure limit matrix which represents the maximum dollar amounts of counterparty exposure by debt rating that can be approved for a counterparty. The Company continues to closely monitor and reassess the creditworthiness of its counterparties, which has resulted in the Company reducing or mitigating its exposure to certain counterparties where it was deemed warranted and permitted under contractual terms. Financial assurances from counterparties may include guarantees, letters of credit and cash. At December 31, 2018 letters of credit totaling $122 million ( 2017 : $110 million ) were held primarily in respect of customer trade receivables. The Company typically has collected its trade receivables in full and at December 31, 2018 , 99 percent were current ( 2017 : 96 percent ). Management defines current as outstanding accounts receivable under 30 days past due. The Company has a general lien and a continuing and first priority security interest in, and a secured charge on, all of a shipper's petroleum products in its custody. At December 31, the aging of trade and other receivables was as follows: Past Due 2018 2017 31-60 days past due 2 6 Greater than 61 days — — 2 6 The Company uses a loss allowance matrix to measure lifetime expected credit losses at initial recognition and throughout the life of the receivable. The loss allowance matrix is determined based on the Company’s historical default rates over the expected life of trade receivables, adjusted for forward-looking estimates. Management believes the unimpaired amounts that are past due by greater than 30 days are fully collectible based on historical default rates of customers and management’s assessment of counterparty credit risk through established credit management techniques as discussed above. Advances to related parties held at amortized cost consists of funds advanced by Pembina to a jointly controlled entity. Expected credit losses are measured using a probability-weighted estimate of credit losses, measured as the present value of all expected cash shortfalls, discounted at the effective interest rate of the financial asset, using reasonable and supportable information about past events, current conditions and forecasts of future economic conditions. Management considers the risk of default relating to the advances to be low due to their priority ranking against other interests, and firm contracted revenues underpinning expected future cash flows from the jointly controlled entity's assets. At December 31, 2018 , the impairment loss allowance amounted to $1 million ( 2017 : $1 million ). Pembina recognized less than $1 million in impairment losses on financial assets during 2018 ( 2017 : $1 million ). The Company monitors and manages its concentration of counterparty credit risk on an ongoing basis. The Company believes these measures minimize its counterparty credit risk but there is no certainty that they will protect it against all material losses. As part of its ongoing operations, the Company must balance its market and counterparty credit risks when making business decisions. Liquidity risk Liquidity risk is the risk the Company will not be able to meet its financial obligations as they come due. The following are the contractual maturities of financial liabilities, including estimated interest payments. Outstanding balances due by period December 31, 2018 Carrying Amount Expected Cash Flows Less Than 1 Year 1 - 3 Years 3 - 5 Years More Than 5 Years ($ millions) Trade payables and accrued liabilities 803 803 803 — — — Taxes payable 82 82 67 3 4 8 Loans and borrowings 7,537 10,794 724 2,334 1,183 6,553 Dividends payable 97 97 97 — — — Derivative financial liabilities 6 6 6 — — — Finance leases 23 23 9 11 3 — The Company manages its liquidity risk by forecasting cash flows over a 12 month rolling time period to identify financing requirements. These financing requirements are then addressed through a combination of credit facilities and through access to capital markets, if required. Market risk Pembina's results are subject to movements in commodity prices, foreign exchange and interest rates. A formal Risk Management Program including policies and procedures has been designed to mitigate these risks. a. Commodity price risk Certain of the transportation contracts or tolling arrangements with respect to Pembina's pipeline assets do not include take-or-pay commitments from crude oil and gas producers and, as a result, Pembina is exposed to throughput risk with respect to those assets. A decrease in volumes transported can directly and adversely affect Pembina’s revenues and earnings. The demand for, and utilization of, Pembina's pipeline assets may be impacted by factors such as changing market fundamentals, capacity bottlenecks, operational incidents, regulatory restrictions, system maintenance, weather and increased competition. Market fundamentals, such as commodity prices and price differentials, natural gas and gasoline consumption, alternative energy sources and global supply disruptions outside of Pembina’s control can impact both the supply of and demand for the commodities transported on Pembina’s pipelines. Pembina's Marketing business includes activities related to product storage, terminalling, and hub services. These activities expose Pembina to certain risks relating to fluctuations in commodity prices and, as a result, Pembina may experience volatility in revenue and impairments related to the book value of stored product with respect to these activities. Primarily, Pembina enters into contracts to purchase and sell crude oil, condensate, NGL and natural gas at floating market prices; as a result, the prices of products that are marketed by Pembina are subject to volatility as a result of factors such as seasonal demand changes, extreme weather conditions, market inventory levels, general economic conditions, changes in crude oil markets and other factors. Pembina manages its risk exposure by balancing purchases and sales to secure less volatile margins. Notwithstanding Pembina's management of price and quality risk, marketing margins for commodities can vary and have varied significantly from period to period in the past. This variability could have an adverse effect on the results of Pembina's Marketing business and its overall results of operations. To assist in reducing this inherent variability in its Marketing business, Pembina has invested, and will continue to invest, in assets that have a fee-based revenue component. Pembina is also exposed to potential price declines and decreasing frac spreads between the time Pembina purchases NGL feedstock and sells NGL products. Frac spread is the difference between the sale prices of NGL products and the cost of NGL sourced from natural gas and acquired at prices related to natural gas prices. Frac spreads can change significantly from period to period depending on the relationship between NGL and natural gas prices (the "frac spread ratio"), absolute commodity prices, and changes in the Canadian to U.S. dollar exchange rate. In addition to the frac spread ratio changes, there is also a differential between NGL product prices and crude oil prices which can change margins realized for midstream products. The amount of profit or loss made on the extraction portion of the business will generally increase or decrease with frac spreads. This exposure could result in variability of cash flow generated by the Marketing business, which could affect Pembina and the cash dividends that Pembina is able to distribute. The Company utilizes financial derivative instruments as part of its overall risk management strategy to assist in managing the exposure to commodity price, interest rate, cost of power and foreign exchange risk. As an example of commodity price mitigation, the Company actively fixes a portion of its exposure to fractionation margins through the use of derivative financial instruments. Additionally, Pembina's Marketing business is also exposed to variability in quality, time and location differentials for various products, and financial instruments may be used to offset the Company’s exposures to these differentials. The Company does not trade financial instruments for speculative purposes. b. Foreign exchange risk Certain of Pembina's cash flows, namely a portion of its commodity-related cash flows, certain cash flows from U.S.-based infrastructure assets, and distributions from U.S.-based investments in equity accounted investees, are subject to currency risk, arising from the denomination of specific cash flows in U.S. dollars. Additionally, a portion of Pembina's capital expenditures, and contributions or loans to Pembina’s U.S.-based investments in equity accounted investees, may be denominated in U.S. dollars. Pembina monitors, assesses, and responds to these foreign currency risks using an active risk management program, which may include the exchange of foreign currency for domestic currency at a fixed rate. c. Interest rate risk Pembina has floating interest rate debt which subjects the Company to interest rate risk. Pembina responds to this risk under its active risk management program to enter into financial derivative contracts to fix interest rates. At the reporting date, the interest rate profile of the Company's interest-bearing financial instruments was: As at December 31 ($ millions) 2018 2017 Carrying Amounts of Financial Liability Fixed rate instruments 6,232 5,685 Variable rate instruments (1) 1,305 1,778 7,537 7,463 (1) At December 31, 2018 , the Company held no positions in financial derivative contracts to fix interest rates (December 31, 2017: $100 million ). Cash flow sensitivity analysis for variable rate instruments A change of 100 basis points in interest rates at the reporting date would have (increased) decreased earnings by the amounts shown below. This analysis assumes that all other variables remain constant. As at December 31 ($ millions) 2018 2017 ± 100 bp ± 100 bp Variable rate instruments ±13 ±18 Interest rate swap ±0 ±1 Earnings sensitivity (net) ±13 ±17 Fair values The fair values of financial assets and liabilities, together with the carrying amounts shown in the Consolidated Statements of Financial Position, are as follows: 2018 2017 As at December 31 Carrying Fair Value (3) Carrying value Fair Value (3) ($ millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Financial assets carried at fair value Derivative financial instruments 54 — 54 — 4 — 4 — Advances to related parties 58 — — 58 — — — — 112 — 54 58 4 — 4 — Financial assets carried at amortized cost Cash and cash equivalents 157 157 — — 321 321 — — Trade receivables and other 604 604 — — 529 529 — — Advances to related parties 77 — 77 — 42 — 42 — Other assets 9 — 9 — 13 — 13 — 847 761 86 — 905 850 55 — Financial liabilities carried at fair value Derivative financial instruments (1) 6 — 6 — 79 — 79 — Financial liabilities carried at amortized cost Trade payables and accrued liabilities 803 803 — — 677 677 — — Taxes payable (1) 82 82 — — 25 25 — — Dividends payable 97 97 — — 91 91 — — Loans and borrowings (1) 7,537 — 7,588 — 7,463 — 7,686 — Convertible debentures (2) — — — — 93 145 — — 8,519 982 7,588 — 8,349 938 7,686 — (1) Carrying value of current and non-current balances. (2) Carrying value excludes conversion feature of convertible debentures. (3) The basis for determining fair value is disclosed in Note 5. Interest rates used for determining fair value The interest rates used to discount estimated cash flows, when applicable, are based on the government yield curve at the reporting date plus and adequate credit spread, and were as follows: As at December 31 (percent) 2018 2017 Derivatives 2.2 - 2.3 1.4 - 1.8 Loans and borrowings 2.6 - 5.6 2.0 - 4.7 Fair value of power derivatives are based on market rates reflecting forward curves. Fair value hierarchy The fair value of financial instruments carried at fair value is classified according to the following hierarchy based on the amount of observable inputs used to value the instruments. Level 1: Unadjusted quoted prices are available in active markets for identical assets or liabilities as the reporting date. Pembina does not use Level 1 inputs for any of its fair value measurements. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 2 valuations are based on inputs, including quoted forward prices for commodities, time value and volatility factors, which can be substantially observed or corroborated in the marketplace. Instruments in this category include non-exchange traded derivatives such as over-the-counter physical forwards and options, including those that have prices similar to quoted market prices. Pembina obtains quoted market prices for its inputs from information sources including banks, Bloomberg Terminals and Natural Gas Exchange. The majority of Pembina's significant financial instruments carried at fair value are valued using Level 2 inputs. Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs). Level 3 valuations use unobservable inputs, such as a financial forecast developed using the entity’s own data for expected cash flows and risk adjusted discount rates, to measure fair value to the extent that relevant observable inputs are not available. The unobservable inputs reflect the assumptions that market participants would use when pricing the asset or liability, including assumptions about risk. In developing unobservable inputs, the entity’s own data is used and adjusted for reasonably available information that would be used by other market participants. Advances to related parties carried at fair value consist of funds advances by Pembina to a jointly controlled entity with an equity conversion option. Fair value is measured on a recurring basis using a valuation model that considers the present value of management's best estimate of future cash flows expected to result from the asset under development in the jointly controlled entity, discounted using a risk-adjusted discount rate. The following table is a summary of the net derivative financial instruments, which is consistent with the gross balances: 2018 2017 As at December 31 ($ millions) Current Asset Non-Current Asset Current Liability Non-Current Liability Total Current Asset Non-Current Asset Current Liability Non-Current Liability Total Commodity, power, storage and rail financial instruments 44 — (2 ) — 42 4 — (31 ) — (27 ) Interest rate — — — — — — — (2 ) — (2 ) Foreign exchange 10 — (4 ) — 6 — — — — — Conversion feature of convertible debentures (Note 14) — — — — — — — (46 ) — (46 ) Net derivative financial instruments 54 — (6 ) — 48 4 — (79 ) — (75 ) Sensitivity analysis The following table shows the impact on earnings if the underlying risk variables of the derivative financial instruments changed by a specified amount, with other variables held constant. As at December 31, 2018 ($ millions) + Change - Change Frac spread related Natural gas (AECO +/- $0.25 per GJ) 2 (2 ) NGL (includes propane, butane and condensate) (Belvieu/Conway +/- U.S. $0.10 per gal) (9 ) 9 Foreign exchange (US$ vs. C$) (FX rate +/- $0.10) 13 (13 ) Product margin Crude oil (WTI +/- $2.50 per bbl) (3 ) 3 NGL (includes propane, butane and condensate) (Belvieu/Conway +/- U.S. $0.10 per gal) N/A N/A Corporate (1) Interest rates (Rate +/- 50 basis points) — — (1) As at December 31, 2018 , there were no outstanding financial derivative contracts related to power and interest rates. |
DECOMISSIONING PROVISION
DECOMISSIONING PROVISION | 12 Months Ended |
Dec. 31, 2018 | |
Other Provisions, Contingent Liabilities And Contingent Assets [Abstract] | |
DECOMMISSIONING PROVISION | DECOMMISSIONING PROVISION ($ millions) 2018 2017 Balance at January 1 551 496 Unwinding of discount rate 12 12 Change in rates — 43 Acquisition — 10 Additions 18 33 Change in estimates and other (8 ) (43 ) Total 573 551 Less current portion (included in accrued liabilities) (4 ) (5 ) Balance at December 31 569 546 The Company applied a 1.8 percent inflation rate per annum ( 2017 : 1.8 percent) and a risk-free rate of 2.3 percent ( 2017 : 2.3 percent) to calculate the present value of the decommissioning provision. Changes in the measurement of the decommissioning provision are added to, or deducted from, the cost of the related asset in property, plant and equipment. When a re-measurement reduction of the decommissioning provision is in excess of the carrying amount of the related asset, the amount is credited to depreciation expense. For the year ended December 31, 2018 , $4 million was credited to depreciation expense ( 2017 : $4 million ). |
SHARE CAPITAL
SHARE CAPITAL | 12 Months Ended |
Dec. 31, 2018 | |
Share Capital, Reserves And Other Equity Interest [Abstract] | |
SHARE CAPITAL | SHARE CAPITAL Pembina is authorized to issue an unlimited number of common shares, without par value, Class A Preferred Shares, issuable in series, not to exceed 20 percent of the number of issued and outstanding common shares at the time of issuance of any Class A Preferred Shares and an unlimited number of Class B Preferred Shares. The holders of the common shares are entitled to receive notice of, attend and vote at any meeting of the shareholders of the Company, receive dividends declared and share in the remaining property of the Company upon distribution of the assets of the Company among its shareholders for the purpose of winding-up its affairs. Pembina has adopted a shareholder rights plan ("Plan") as a mechanism designed to assist the board in ensuring the fair and equal treatment of all shareholders in the face of an actual or contemplated unsolicited bid to take control of the Company. Take-over bids may be structured in such a way as to be coercive or discriminatory in effect, or may be initiated at a time when it will be difficult for the board to prepare an adequate response. Such offers may result in shareholders receiving unequal or unfair treatment, or not realizing the full or maximum value of their investment in Pembina. The Plan discourages the making of any such offers by creating the potential of significant dilution to any offeror who does so. The Plan was reconfirmed at Pembina's 2016 meeting of shareholders and must be reconfirmed at every third annual meeting thereafter. Accordingly, the Plan, with such amendments as the Board of Directors determines to be necessary or advisable, and as may otherwise be required by law, is expected to be placed before Shareholders for approval at Pembina's 2019 annual meeting. A copy of the agreement relating to the current Plan has been filed on Pembina's SEDAR and EDGAR profiles. Common Share Capital ($ millions, except as noted) Number of Common Shares (millions) Common Share Capital Balance at December 31, 2016 397 8,808 Issued, net of issue costs 99 4,356 Dividend reinvestment plan 4 148 Debenture conversions 2 73 Share-based payment transactions 1 62 Balance at December 31, 2017 503 13,447 Debenture conversions 3 140 Share-based payment transactions 2 75 Balance at December 31, 2018 508 13,662 Preferred Share Capital ($ millions, except as noted) Number of Preferred Shares (millions) Preferred Share Capital Balance at December 31, 2016 62 1,509 Class A, Series 15 Preferred shares issued, net of issue costs 8 178 Class A, Series 17 Preferred shares issued, net of issue costs 6 141 Class A, Series 19 Preferred shares issued, net of issue costs 8 203 Class A, Series 21 Preferred shares issued, net of issue costs 16 393 Balance at December 31, 2017 100 2,424 Preferred Shares issued, net of issue costs — (1 ) Balance at December 31, 2018 100 2,423 On December 7, 2017, Pembina issued 16 million cumulative redeemable minimum rate reset class A Series 21 Preferred Shares for aggregate gross proceeds of $400 million . The holders of Series 21 Preferred Shares are entitled to receive fixed cumulative dividends at an annual rate of $1.225 per share, if, as and when declared by the Board of Directors. The dividend rate will reset on March 1, 2023 and every fifth year thereafter at a rate equal to the sum of the then five -year Government of Canada bond yield plus 3.26 percent, provided that, in any event, such rate shall not be less than 4.90 percent. The Series 21 Preferred Shares are redeemable by the Company at its option on March 1, 2023 and every fifth year thereafter at a price of $25.00 per share plus accrued and unpaid dividends. Holders of the Series 21 Preferred Shares have the right to convert their shares into cumulative redeemable floating rate Class A Preferred Shares, Series 22 ("Series 22 Preferred Shares"), subject to certain conditions, on March 1, 2023 and every fifth year thereafter. Holders of Series 22 Preferred Shares will be entitled to receive a cumulative quarterly floating dividend at a rate equal to the sum of the then 90 -day government of Canada bond yield plus 3.26 percent, if, as and when declared by the Board of Directors. On October 2, 2017, in connection with the Acquisition, the outstanding preferred shares of Veresen have been exchanged for Pembina Class A Series 15, 17 and 19 Preferred Shares with the same terms and conditions as the shares previously issued by Veresen. Dividends on the Series 15, 17 and 19 Preferred Shares will continue to be paid on the last business day of March, June, September and December in each year, if, as and when declared by the Board of Directors. Dividends The following dividends were declared by the Company: For the years ended December 31 ($ millions) 2018 2017 Common shares Common shares $2.24 per qualifying share (2017: $2.04) 1,131 873 Preferred shares $1.062500 per qualifying Series 1 preferred share (2017: $1.062500) 11 11 $1.175000 per qualifying Series 3 preferred share (2017: $1.175000) 7 7 $1.250000 per qualifying Series 5 preferred share (2017: $1.250000) 12 12 $1.125000 per qualifying Series 7 preferred share (2017: $1.125000) 11 11 $1.187500 per qualifying Series 9 preferred share (2017: $1.187500) 11 11 $1.437500 per qualifying Series 11 preferred share (2017: $1.437500) 10 10 $1.437500 per qualifying Series 13 preferred share (2017: $1.437500) 14 14 $1.116000 per qualifying Series 15 preferred share (2017: $0.279000) 9 2 $1.250000 per qualifying Series 17 preferred share (2017: $0.312500) 8 2 $1.250000 per qualifying Series 19 preferred share (2017: $0.312500) 10 3 $1.200650 per qualifying Series 21 preferred share (2017: nil) 19 — 122 83 Pembina's Board of Directors approved a 5.6 percent increase in its monthly common share dividend rate (from $0.18 per common share to $0.19 per common share), effective for the dividend paid on June 15, 2018. On January 7, 2019, Pembina announced that its Board of Directors had declared a dividend of $0.19 per qualifying common share ( $2.28 annually) in the total amount of $97 million , payable on February 15, 2019 to shareholders of record on January 25, 2019. Pembina's Board of Directors also declared quarterly dividends for the Company's preferred shares as outlined in the following table: Series Record Date Payable Date Per Share Amount Dividend Amount ($ millions) Series 1 February 1, 2019 March 1, 2019 $0.306625 3 Series 3 February 1, 2019 March 1, 2019 $0.293750 2 Series 5 February 1, 2019 March 1, 2019 $0.312500 3 Series 7 February 1, 2019 March 1, 2019 $0.281250 3 Series 9 February 1, 2019 March 1, 2019 $0.296875 2 Series 11 February 1, 2019 March 1, 2019 $0.359375 2 Series 13 February 1, 2019 March 1, 2019 $0.359375 4 Series 15 March 15, 2019 April 1, 2019 $0.279000 2 Series 17 March 15, 2019 April 1, 2019 $0.312500 2 Series 19 March 15, 2019 April 1, 2019 $0.312500 3 Series 21 February 1, 2019 March 1, 2019 $0.306250 5 On January 30, 2019, Pembina announced that it does not intend to exercise its right to redeem the six million Cumulative Redeemable Rate Reset Class A Preferred Shares, Series 3 ("Series 3 Shares") shares outstanding on March 1, 2019. On February 6, 2019, Pembina announced that its Board of Directors had declared a dividend of $0.19 per qualifying common share ( $2.28 annually) in the total amount of $97 million , payable on March 15, 2019 to shareholders of record on February 25, 2019. DRIP Pembina suspended its Premium Dividend™ and Dividend Reinvestment Plan ("DRIP"), effective April 25, 2017. Accordingly, the March 2017 dividend was the last dividend with the ability to be reinvested through the DRIP. Shareholders who were enrolled in the program automatically received dividends in the form of cash. If Pembina elects to reinstate the DRIP in the future, shareholders that were enrolled in the DRIP at suspension and remain enrolled at reinstatement will automatically resume participation in the DRIP. Prior to its suspension in 2017 DRIP proceeds were $ 148 million . |
DEFERRED REVENUE
DEFERRED REVENUE | 12 Months Ended |
Dec. 31, 2018 | |
Subclassifications of assets, liabilities and equities [abstract] | |
DEFERRED REVENUE | DEFERRED REVENUE Deferred revenue consists of asset purchases that occurred at a nominal value in exchange for future toll reductions which is amortized to revenue over the life of the asset. Deferred revenue also includes other payments received from customers or lessors related to capital expenditures or lease inducements which are amortized over the lease or contract terms. The Company will adopt IFRS 15 Revenue from Contracts with Customers on January 1, 2018. See discussion in note 4 (r) for additional information. |
PERSONNEL EXPENSES
PERSONNEL EXPENSES | 12 Months Ended |
Dec. 31, 2018 | |
Analysis of income and expense [abstract] | |
PERSONNEL EXPENSES | PERSONNEL EXPENSES For the years ended December 31 ($ millions) 2018 2017 Salaries and wages 254 194 Share-based compensation expense (Note 23) 63 73 Short-term incentive plan 59 45 Pension plan expense 23 20 Health, savings plan and other benefits 21 18 420 350 PENSION PLAN As at December 31 ($ millions) 2018 2017 Registered defined benefit net obligation 19 10 Supplemental defined benefit net obligation 12 11 Other accrued benefit obligations — 1 Net employee benefit obligations 31 22 The Company maintains a defined contribution plan and non-contributory defined benefit pension plans covering its employees. On April 1, 2018, Pembina exercised its option to assume an additional interest in the Younger extraction and fractionation facilities ("Younger Facilities"). Accordingly, Pembina also assumed the Bargaining Unit Pension Plan for Employees at the Younger Plant ("Younger Plan") with the net obligation of $6 million . The Company contributes five to 10 percent of an employee's earnings to the defined contribution plan until the employee's age plus years of service equals 50 , at which time they become eligible for the defined benefit plans. The Company recognized $8 million in expense for the defined contribution plan during the year ( 2017 : $7 million ). The defined benefit plans include a funded registered plan for all eligible employees and an unfunded supplemental retirement plan for those employees affected by the Canada Revenue Agency maximum pension limits. The defined benefit plans are administered by separate pension funds that are legally separated from the Company. Benefits under the plans are based on the length of service and the annual average best three years of earnings during the last ten years of service of the employee. Benefits paid out of the plans are not indexed. The Company measures its accrued benefit obligations and the fair value of plan assets for accounting purposes as at December 31 of each year. The most recent actuarial valuation was at December 31, 2016. The defined benefit plans expose the Company to actuarial risks such as longevity risk, interest rate risk, and market (investment) risk. Defined benefit obligations As at December 31 ($ millions) 2018 2017 Registered Plans Supplemental Plan Registered Plan Supplemental Plan Present value of unfunded obligations — 12 — 11 Present value of funded obligations 212 — 192 — Total present value of obligations 212 12 192 11 Fair value of plan assets 193 — 182 — Recognized liability for defined benefit obligations (19 ) (12 ) (10 ) (11 ) The Company funds the defined benefit obligation plans in accordance with government regulations by contributing to trust funds administered by an independent trustee. The funds are invested primarily in equities and bonds. Defined benefit plan contributions totalled $19 million for the year ended December 31, 2018 ( 2017 : $16 million ). The Company has determined that, in accordance with the terms and conditions of the defined benefit plans, and in accordance with statutory requirements of the plans, the present value of refunds or reductions in future contributions is not lower than the balance of the total fair value of the plan assets less the total present value of obligations. As such, no decrease in the defined benefit asset is necessary at December 31, 2018 ( 2017 : nil ). Registered defined benefit pension plan assets comprise As at December 31 (Percent) 2018 2017 Equity securities 61 65 Debt 39 35 100 100 Movement in the present value of the defined benefit pension obligation 2018 2017 ($ millions) Registered Plans Supplemental Plan Registered Plan Supplemental Plan Defined benefits obligations at January 1 192 11 180 10 Benefits paid by the plan (12 ) — (13 ) — Current service costs 14 1 14 — Interest expense 7 — 7 — Transfer from Younger 16 — — — Actuarial losses in other comprehensive income (5 ) — 4 1 Defined benefit obligations at December 31 212 12 192 11 Movement in the present value of registered defined benefit pension plan assets ($ millions) 2018 2017 Fair value of plan assets at January 1 182 164 Contributions paid into the plan 19 16 Benefits paid by the plan (12 ) (13 ) Return on plan assets (13 ) 8 Transfer from Younger 10 — Interest income 7 7 Fair value of registered plan assets at December 31 193 182 Expense recognition in earnings For the years ended December 31 ($ millions) 2018 2017 Registered Plan Current service costs 14 14 Interest on obligation 8 7 Expected return on plan assets (7 ) (7 ) 15 14 The expense is recognized in the following line items in the consolidated statement of comprehensive income: For the years ended December 31 ($ millions) 2018 2017 Registered Plan Operating expenses 8 7 General and administrative expense 7 7 15 14 Expense recognized for the Supplemental Plan was less than $1 million for each of the years ended December 31, 2018 and 2017 . Actuarial gains and losses recognized in other comprehensive income 2018 2017 ($ millions) Registered Plans Supplemental Plan Total Registered Plan Supplemental Plan Total Balance at January 1 (22 ) (1 ) (23 ) (25 ) (1 ) (26 ) Remeasurements: — Financial assumptions 3 — 3 (4 ) — (4 ) Experience adjustments — — — 1 — 1 Return on plan assets excluding interest income (9 ) — (9 ) 6 — 6 Recognized during the period after tax (6 ) — (6 ) 3 — 3 Balance at December 31 (28 ) (1 ) (29 ) (22 ) (1 ) (23 ) Principal actuarial assumptions used: As at December 31 (weighted average percent) 2018 2017 Discount rate 3.8 % 3.6 % Future pension earning increases 4.0 % 4.0 % Assumptions regarding future mortality are based on published statistics and mortality tables. The current longevities underlying the values of the liabilities in the defined plans are as follows: As at December 31 (years) 2018 2017 Longevity at age 65 for current pensioners Males 21.7 21.7 Females 24.1 24.1 Longevity at age 65 for current member aged 45 Males 22.8 22.8 Females 25.1 25.1 The calculation of the defined benefit obligation is sensitive to the discount rate, compensation increases, retirements and termination rates as set out above. An increase or decrease of the estimated discount rate of 3.8 percent by 100 basis points at December 31, 2018 is considered reasonably possible in the next financial year but would not have a material impact on the obligation. The Company expects to contribute $20 million to the defined benefit plans in 2019 . |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 12 Months Ended |
Dec. 31, 2018 | |
Revenue From Contracts With Customers [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue has been disaggregated into categories to reflect how the nature, timing and uncertainty of revenue and cash flows are affected by economic factors. a. Revenue disaggregation 2018 2017 For the years ended December 31 ($ millions) Pipelines Division Facilities Division Marketing & New Ventures Division Total Pipelines Division Facilities Division Marketing & New Ventures Division Total Take-or-Pay (1) 979 582 — 1,561 681 534 — 1,215 Fee-for-Service (1) 424 103 — 527 324 58 2 384 Product Sales (2) — 464 4,721 5,185 — 208 3,531 3,739 Revenue from contracts with customers 1,403 1,149 4,721 7,273 1,005 800 3,533 5,338 Lease and other revenue 61 17 — 78 62 — — 62 Total external revenue 1,464 1,166 4,721 7,351 1,067 800 3,533 5,400 (1) Revenue recognized over time. (2) Revenue recognized at a point in time. b. Contract balances Significant changes in the contract liabilities balances during the period are as follows: ($ millions) 2018 2017 Balance at January 1 157 81 Additions (net in the period) 38 99 Revenue recognized from contract liabilities (1) (27 ) (23 ) Closing balance 168 157 Less current portion (2) (37 ) (44 ) Balance at December 31 131 113 (1) Recognition of revenue related to performance obligations satisfied in the current period that were included in the opening balance of contract liabilities. (2) As at December 31, 2018 , the balance includes $9 million of cash collected under take-or-pay contracts which will be recognized in revenue by December 31, 2019 as the customer chooses to ship, process, or otherwise forego the associated service ( December 31, 2017 : $8 million ). Contract liabilities depict the Company’s obligation to perform services in the future for which payment has been received from customers. Contract liabilities include up-front payments or non-cash consideration received from customers for future transportation, processing and storage services. Contract liabilities also include consideration received from customers for take-or-pay commitments where the customer has a make-up right to ship or process future volumes under a firm contract. These amounts are non-refundable should the customer not use its make-up rights. The Company does not have any contract assets. In all instances where goods or services have been transferred to a customer in advance of the receipt of customer consideration, the Company’s right to consideration is unconditional and has therefore been presented as a receivable. c. Revenue allocated to remaining performance obligations Pembina expects to recognize revenue in future periods that includes current unsatisfied remaining performance obligations totaling $10.6 billion . Over the next five years, this remaining performance obligation will be recognized annually ranging from $1.1 billion declining to $962 million . Subsequently, up to 2042, Pembina will recognize from $1.0 billion to $7 million per year. In preparing the above figures, the Company has taken the practical expedient to exclude contracts that are being accounted for using the practical expedient to recognize revenue in an amount equal to the Company's right to invoice, as well as the practical expedient to exclude contracts that have original expected durations of one year or less. Variable consideration relating to flow through costs are not included in the amounts presented. These flow through costs do not impact net income or cash flow, and due to the long-term nature of the contracts there is significant uncertainty in estimating these amounts. In addition, the Company excludes contracted revenue amounts for assets not yet in-service unless both board of directors approval and regulatory approval for the asset has been obtained. |
NET FINANCE COSTS
NET FINANCE COSTS | 12 Months Ended |
Dec. 31, 2018 | |
Analysis of income and expense [abstract] | |
NET FINANCE COSTS | NET FINANCE COSTS For the years ended December 31 ($ millions) 2018 2017 Interest expense on financial liabilities measured at amortized cost: Loans and borrowings 268 162 Convertible debentures 6 9 Unwinding of discount rate 12 12 Gain in fair value of non-commodity-related derivative financial instruments (4 ) (8 ) Loss on revaluation of conversion feature of convertible debentures — 13 Foreign exchange gain and other (3 ) (3 ) Net finance costs 279 185 Net interest paid of $ 294 million ( 2017 : $216 million ) includes interest paid during construction and capitalized of $ 35 million ( 2017 : $63 million ). |
OPERATING SEGMENTS
OPERATING SEGMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Operating Segments [Abstract] | |
OPERATING SEGMENTS | OPERATING SEGMENTS Effective January 1, 2018, Pembina's operating segments are organized by three Divisions: Pipelines, Facilities and Marketing & New Ventures. The Company determines its reportable segments based on the nature of operations and includes three operating segments: Pipelines, Facilities and Marketing & New Ventures. The Pipelines segment includes conventional, oil sands and transmission pipeline systems and related infrastructure serving various markets and basins across North America. The Facilities segment includes processing and fractionation facilities and related infrastructure that provide Pembina's customers with natural gas and NGL services and are highly integrated with the Company's other businesses. The Marketing & New Ventures segment undertakes value-added commodity marketing activities including buying and selling products and optimizing storage opportunities, by contracting capacity on Pembina's and various third-party pipelines and utilizing the Company's rail fleet and rail logistics capabilities. Marketing activities also include identifying commercial opportunities to further develop other Pembina assets. Pembina's Marketing business also includes results from Aux Sable's NGL extraction facility near Chicago, Illinois and other natural gas and NGL processing facilities, logistics and distribution assets in the United States and Canada. The financial results of the operating segments are included below. Performance is measured based on results from operating activities, net of depreciation and amortization, as included in the internal management reports that are reviewed by the Company's Chief Executive Officer, Chief Financial Officer and other Senior Vice Presidents. These results are used to measure performance as management believes that such information is the most relevant in evaluating results of certain segments relative to other entities that operate within these industries. Intersegment transactions are recorded at market value and eliminated under corporate and intersegment eliminations. For the year ended December 31, 2018 Pipelines Division (1) Facilities Division Marketing & New Ventures Division (2) Corporate & Inter-Division Eliminations Total ($ millions) Revenue from external customers 1,464 1,166 4,721 — 7,351 Inter-Division revenue 124 302 — (426 ) — Total revenue (3) 1,588 1,468 4,721 (426 ) 7,351 Operating expenses 396 313 — (158 ) 551 Cost of goods sold, including product purchases — 462 4,335 (282 ) 4,515 Realized loss on commodity-related derivative financial instruments — — 51 — 51 Share of profit from equity accounted investees 279 30 102 — 411 Depreciation and amortization included in operations 216 149 26 — 391 Unrealized gain on commodity-related derivative financial instruments — — (73 ) — (73 ) Gross profit 1,255 574 484 14 2,327 Depreciation included in general and administrative — — — 26 26 Other general and administrative 26 17 41 169 253 Other expense — 5 12 10 27 Reportable segment results from operating activities 1,229 552 431 (191 ) 2,021 Net finance costs 9 6 16 248 279 Reportable segment earnings (loss) before tax 1,220 546 415 (439 ) 1,742 Capital expenditures 711 348 134 33 1,226 Contributions to equity accounted investees — 58 — — 58 (1) Pipelines Division transportation revenue includes $25 million associated with U.S. pipeline sales. (2) Marketing & New Ventures Division includes revenue of $240 million associated with U.S. midstream sales. (3) During the period, one customer accounted for 10 percent of total revenues, with $792 million reported throughout all segments. For the year ended December 31, 2017 (1) Pipelines Division (2) Facilities Division Marketing & New Ventures Division (3) Corporate & Inter-Division Eliminations Total ($ millions) Revenue from external customers 1,067 800 3,533 — 5,400 Inter-Division revenue 69 169 — (238 ) — Total revenue (4) 1,136 969 3,533 (238 ) 5,400 Operating expenses 330 227 — (107 ) 450 Cost of goods sold, including product purchases — 197 3,105 (140 ) 3,162 Realized loss on commodity-related derivative financial instruments 1 — 93 — 94 Share of profit from equity accounted investees 72 22 22 — 116 Depreciation and amortization included in operations 195 138 26 — 359 Unrealized gain on commodity-related derivative financial instruments (1 ) — (22 ) — (23 ) Gross profit 683 429 353 9 1,474 Depreciation included in general and administrative — — — 23 23 Other general and administrative 20 23 19 151 213 Other (income) expense (6 ) 11 1 22 28 Reportable segment results from operating activities 669 395 333 (187 ) 1,210 Net finance costs 10 12 7 156 185 Reportable segment earnings (loss) before tax 659 383 326 (343 ) 1,025 Capital expenditures 1,328 440 57 14 1,839 Contributions to equity accounted investees — 1 6 — 7 (1) Restated with comparative segments. (2) Pipelines Division transportation revenue includes $22 million associated with U.S. pipeline sales. (3) Marketing & New Ventures Division includes revenue of $215 million associated with U.S. midstream sales. (4) During the period, no one customer accounted for 10 percen t or more of total revenue. |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2018 | |
Earnings per share [abstract] | |
EARNINGS PER COMMON SHARE | EARNINGS PER COMMON SHARE Basic earnings per common share The calculation of basic earnings per common share at December 31, 2018 was based on the earnings attributable to common shareholders of $1.2 billion ( 2017 : $797 million ) and a weighted average number of common shares outstanding of 505 million ( 2017 : 426 million ). Diluted earnings per common share The calculation of diluted earnings per common share at December 31, 2018 was based on earnings attributable to common shareholders of $1.2 billion ( 2017 : $803 million ), and weighted average number of common shares outstanding after adjustment for the effects of all dilutive potential common shares of 509 million ( 2017 : 432 million ). Earnings attributable to common shareholders For the years ended December 31 ($ millions) 2018 2017 Earnings 1,278 883 Dividends on preferred shares (122 ) (83 ) Cumulative dividends on preferred shares, not yet declared (3 ) (3 ) Basic earnings attributable to common shareholders 1,153 797 Effect of after-tax interest on debentures to earnings 4 6 Diluted earnings attributable to common shareholders 1,157 803 Weighted average number of common shares (In millions of shares, except as noted) 2018 2017 Issued common shares at January 1 503 397 Effect of shares issued on Acquisition — 25 Effect of shares issued on exercise of options 1 — Effect of conversion of convertible debentures 1 1 Effect of shares issued under dividend reinvestment plan — 3 Basic weighted average number of common shares at December 31 505 426 Dilutive effect of debentures converted 2 4 Dilutive effect of share options on issue 2 2 Diluted weighted average number of common shares at December 31 509 432 Basic earnings per common share (dollars) 2.28 1.87 Diluted earnings per common share (dollars) 2.28 1.86 The average market value of the Company's shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for the period during which the options were outstanding. |
PENSION PLAN
PENSION PLAN | 12 Months Ended |
Dec. 31, 2018 | |
Employee Benefits [Abstract] | |
PENSION PLAN | PERSONNEL EXPENSES For the years ended December 31 ($ millions) 2018 2017 Salaries and wages 254 194 Share-based compensation expense (Note 23) 63 73 Short-term incentive plan 59 45 Pension plan expense 23 20 Health, savings plan and other benefits 21 18 420 350 PENSION PLAN As at December 31 ($ millions) 2018 2017 Registered defined benefit net obligation 19 10 Supplemental defined benefit net obligation 12 11 Other accrued benefit obligations — 1 Net employee benefit obligations 31 22 The Company maintains a defined contribution plan and non-contributory defined benefit pension plans covering its employees. On April 1, 2018, Pembina exercised its option to assume an additional interest in the Younger extraction and fractionation facilities ("Younger Facilities"). Accordingly, Pembina also assumed the Bargaining Unit Pension Plan for Employees at the Younger Plant ("Younger Plan") with the net obligation of $6 million . The Company contributes five to 10 percent of an employee's earnings to the defined contribution plan until the employee's age plus years of service equals 50 , at which time they become eligible for the defined benefit plans. The Company recognized $8 million in expense for the defined contribution plan during the year ( 2017 : $7 million ). The defined benefit plans include a funded registered plan for all eligible employees and an unfunded supplemental retirement plan for those employees affected by the Canada Revenue Agency maximum pension limits. The defined benefit plans are administered by separate pension funds that are legally separated from the Company. Benefits under the plans are based on the length of service and the annual average best three years of earnings during the last ten years of service of the employee. Benefits paid out of the plans are not indexed. The Company measures its accrued benefit obligations and the fair value of plan assets for accounting purposes as at December 31 of each year. The most recent actuarial valuation was at December 31, 2016. The defined benefit plans expose the Company to actuarial risks such as longevity risk, interest rate risk, and market (investment) risk. Defined benefit obligations As at December 31 ($ millions) 2018 2017 Registered Plans Supplemental Plan Registered Plan Supplemental Plan Present value of unfunded obligations — 12 — 11 Present value of funded obligations 212 — 192 — Total present value of obligations 212 12 192 11 Fair value of plan assets 193 — 182 — Recognized liability for defined benefit obligations (19 ) (12 ) (10 ) (11 ) The Company funds the defined benefit obligation plans in accordance with government regulations by contributing to trust funds administered by an independent trustee. The funds are invested primarily in equities and bonds. Defined benefit plan contributions totalled $19 million for the year ended December 31, 2018 ( 2017 : $16 million ). The Company has determined that, in accordance with the terms and conditions of the defined benefit plans, and in accordance with statutory requirements of the plans, the present value of refunds or reductions in future contributions is not lower than the balance of the total fair value of the plan assets less the total present value of obligations. As such, no decrease in the defined benefit asset is necessary at December 31, 2018 ( 2017 : nil ). Registered defined benefit pension plan assets comprise As at December 31 (Percent) 2018 2017 Equity securities 61 65 Debt 39 35 100 100 Movement in the present value of the defined benefit pension obligation 2018 2017 ($ millions) Registered Plans Supplemental Plan Registered Plan Supplemental Plan Defined benefits obligations at January 1 192 11 180 10 Benefits paid by the plan (12 ) — (13 ) — Current service costs 14 1 14 — Interest expense 7 — 7 — Transfer from Younger 16 — — — Actuarial losses in other comprehensive income (5 ) — 4 1 Defined benefit obligations at December 31 212 12 192 11 Movement in the present value of registered defined benefit pension plan assets ($ millions) 2018 2017 Fair value of plan assets at January 1 182 164 Contributions paid into the plan 19 16 Benefits paid by the plan (12 ) (13 ) Return on plan assets (13 ) 8 Transfer from Younger 10 — Interest income 7 7 Fair value of registered plan assets at December 31 193 182 Expense recognition in earnings For the years ended December 31 ($ millions) 2018 2017 Registered Plan Current service costs 14 14 Interest on obligation 8 7 Expected return on plan assets (7 ) (7 ) 15 14 The expense is recognized in the following line items in the consolidated statement of comprehensive income: For the years ended December 31 ($ millions) 2018 2017 Registered Plan Operating expenses 8 7 General and administrative expense 7 7 15 14 Expense recognized for the Supplemental Plan was less than $1 million for each of the years ended December 31, 2018 and 2017 . Actuarial gains and losses recognized in other comprehensive income 2018 2017 ($ millions) Registered Plans Supplemental Plan Total Registered Plan Supplemental Plan Total Balance at January 1 (22 ) (1 ) (23 ) (25 ) (1 ) (26 ) Remeasurements: — Financial assumptions 3 — 3 (4 ) — (4 ) Experience adjustments — — — 1 — 1 Return on plan assets excluding interest income (9 ) — (9 ) 6 — 6 Recognized during the period after tax (6 ) — (6 ) 3 — 3 Balance at December 31 (28 ) (1 ) (29 ) (22 ) (1 ) (23 ) Principal actuarial assumptions used: As at December 31 (weighted average percent) 2018 2017 Discount rate 3.8 % 3.6 % Future pension earning increases 4.0 % 4.0 % Assumptions regarding future mortality are based on published statistics and mortality tables. The current longevities underlying the values of the liabilities in the defined plans are as follows: As at December 31 (years) 2018 2017 Longevity at age 65 for current pensioners Males 21.7 21.7 Females 24.1 24.1 Longevity at age 65 for current member aged 45 Males 22.8 22.8 Females 25.1 25.1 The calculation of the defined benefit obligation is sensitive to the discount rate, compensation increases, retirements and termination rates as set out above. An increase or decrease of the estimated discount rate of 3.8 percent by 100 basis points at December 31, 2018 is considered reasonably possible in the next financial year but would not have a material impact on the obligation. The Company expects to contribute $20 million to the defined benefit plans in 2019 . |
SHARE-BASED PAYMENTS
SHARE-BASED PAYMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Share-based Payment Arrangements [Abstract] | |
SHARE-BASED PAYMENTS | SHARE-BASED PAYMENTS At December 31, 2018 , the Company has the following share-based payment arrangements: Share option plan (equity settled) The Company has a share option plan under which employees are eligible to receive options to purchase shares in the Company. Long-term share unit award incentive plan (cash-settled) In 2005, the Company established a long-term share unit award incentive plan. Under the share-based compensation plan, awards of restricted ("RSU") and performance ("PSU") share units are made to officers, non-officers and directors. The plan results in participants receiving cash compensation based on the value of the underlying notional shares granted under the plan. Payments are based on a trading value of the Company's common shares plus notional dividends and performance of the Company. In 2015, the Company also established a deferred share units ("DSU") plan. Under the DSU plan, directors are required to take at least 40 percent of total director compensation, excluding meeting fees, as DSUs. A DSU is a notional share that has the same value as one Pembina common share. Its value changes with Pembina's share price. DSUs do not have voting rights but they accrue dividends as additional DSUs, at the same rate as dividends paid on the Company's common shares. DSUs are paid out when a director retires from the board and are redeemed for cash using the weighted average of trading price of common shares on the Toronto Stock Exchange ("TSX") for the last five trading days before the redemption date, multiplied by the number of DSUs the director holds. As of January 1, 2018 directors no longer receive meeting fees, but their base retainer and committee retainer has been increased. Terms and conditions of share option plan and share unit award incentive plan The terms and conditions relating to the grants of the share option program and the long-term share unit award incentive plans are listed in the tables below: Grant date share options granted to employees (thousands of options, except as noted) Number of options Contractual life of options March 7, 2017 1,697 7 May 16, 2017 64 7 August 14, 2017 868 7 October 11, 2017 40 7 November 14, 2017 784 7 December 8, 2017 77 7 March 6, 2018 1,993 7 May 14, 2018 310 7 July 10, 2018 424 7 August 15, 2018 961 7 October 10, 2018 94 7 November 13, 2018 939 7 December 31, 2018 34 7 One-third vest on the first anniversary of the grant date, one-third vest on the second anniversary of the grant date and one-third vest on the third anniversary of the grant date. Long-term share unit award incentive plan (1) Grant date RSUs, PSUs and DSUs to Officers, Non-Officers (2) and Directors (thousands of units, except as noted) PSUs (3) RSUs (3) DSUs Total January 1, 2017 307 303 32 642 January 1, 2018 404 395 44 843 PSUs vest on the third anniversary of the grant date. RSUs vest one-third on the first anniversary of the grant date, one-third on the second anniversary of the grant date and one-third on the third anniversary of the grant date. Actual units awarded are based on the trading value of the shares and performance of the Company. (1) Distribution Units are granted in addition to RSU and PSU grants based on notional accrued dividends from RSU and PSU granted but not paid. (2) Non-Officers defined as senior selected positions within the Company. (3) Contractual life of 3 years . Disclosure of share option plan The number and weighted average exercise prices of share options as follows: (thousands of options, except as noted) Number of Options Weighted Average Exercise Price (dollars) Outstanding at December 31, 2016 14,310 $39.68 Granted 3,530 $43.28 Exercised (1,405 ) $33.03 Forfeited (502 ) $40.58 Expired (256 ) $47.15 Outstanding at December 31, 2017 15,677 $40.94 Granted 4,755 $43.86 Exercised (1,729 ) $35.34 Forfeited (523 ) $41.56 Expired (252 ) $49.2 Outstanding at December 31, 2018 17,928 $42.12 As of December 31, 2018 , the following options are outstanding: (thousands of options, except as noted) Exercise Price (dollars) Number outstanding at December 31, 2018 Options Exercisable Weighted average remaining life $26.52 – $39.14 4,015 2,825 3.65 $39.15 – $41.55 4,000 1,690 4.93 $41.56 – $43.56 4,216 2,651 4.2 $43.57 – $46.00 2,571 285 6.41 $46.01 – $52.01 3,126 2,189 3.88 Total 17,928 9,640 4.50 The weighted average market price at the date of exercise for share options exercised in the year ended December 31, 2018 was $44.97 ( 2017 : $43.49 ). Expected volatility is estimated by considering historic average share price volatility. The weighted average inputs used in the measurement of the fair values at grant date of share options are the following: Share options granted For the years ended December 31 (dollars, except as noted) 2018 2017 Weighted average Fair value at grant date 3.86 4.49 Share price at grant date 43.67 43.13 Exercise price 43.86 43.28 Expected volatility (percent) 20.26 23.5 Expected option life (years) 3.67 3.67 Expected annual dividends per option 2.24 2.04 Expected forfeitures (percent) 6.7 6.1 Risk-free interest rate (based on government bonds) (percent) 2.1 1.2 Disclosure of long-term share unit award incentive plan The long-term share unit award incentive plans was valued using the volume weighted average price for 20 days ending December 31, 2018 of $42.89 ( 2017 : $44.94 ). Actual payment may differ from amount valued based on market price and company performance. Employee expenses For the years ended December 31 ($ millions) 2018 2017 Share option plan, equity settled 14 16 Long-term share unit award incentive plan 49 57 Share-based compensation expense 63 73 Total carrying amount of liabilities for cash settled arrangements 96 79 Total intrinsic value of liability for vested benefits 57 36 |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Financial Instruments [Abstract] | |
FINANCIAL INSTRUMENTS | CONVERTIBLE DEBENTURES ($ millions, except as noted) Series F – 5.75% Conversion price (dollars per share) $29.53 Interest payable semi-annually in arrears on: June 30 and December 31 Maturity Date December 31, 2018 Balance at December 31, 2016 143 Conversions and redemptions (52 ) Unwinding of discount rate 1 Deferred financing fee (net of amortization) 1 Balance at December 31, 2017 93 Conversions and redemptions (93 ) Repayment at maturity (2 ) Unwinding of discount rate 1 Deferred financing fee (net of amortization) 1 Balance at December 31, 2018 — On December 31, 2018, Pembina's Series F Convertible Debentures matured. At maturity, the outstanding principal of $1.6 million plus accrued and unpaid interest was settled in cash. FINANCIAL INSTRUMENTS ancial risk management Pembina has exposure to counterparty credit risk, liquidity risk and market risk. Pembina recognizes that effective management of these risks is a critical success factor in managing organization and shareholder value. Risk management strategies, policies and limits ensure risks and exposures are aligned to Pembina's business strategy and risk tolerance. The Company's Board of Directors is responsible for providing risk management oversight at Pembina and oversees how management monitors compliance with the Company's risk management policies and procedures and reviews the adequacy of this risk framework in relation to the risks faced by the Company. Internal audit personnel assist the Board of Directors in its oversight role by monitoring and evaluating the effectiveness of the organization's risk management system. Counterparty credit risk Counterparty credit risk represents the financial loss the Company may experience if a counterparty to a financial instrument or commercial agreement failed to meet its contractual obligations to Pembina in accordance with the terms and conditions of the financial instruments or agreements with the Company. Counterparty credit risk arises primarily from the Company's cash and cash equivalents, trade and other receivables, advances to related parties, and from counterparties to its derivative financial instruments. The carrying amount of the Company's cash and cash equivalents, trade and other receivables, advances to related parties and derivative financial instruments represents the maximum counterparty credit exposure, without taking into account security held. The Company manages counterparty credit risk through established credit management techniques, including conducting comprehensive financial and other assessments for all new counterparties and regular reviews of existing counterparties to establish and monitor a counterparty's creditworthiness, setting exposure limits, monitoring exposures against these limits and obtaining financial assurances where warranted. The Company utilizes various sources of financial, credit and business information in assessing the creditworthiness of a counterparty including external credit ratings, where available, and in other cases, detailed financial statement analysis in order to generate an internal credit rating based on quantitative and qualitative factors. The establishment of counterparty exposure limits is governed by a Board of Directors designated counterparty exposure limit matrix which represents the maximum dollar amounts of counterparty exposure by debt rating that can be approved for a counterparty. The Company continues to closely monitor and reassess the creditworthiness of its counterparties, which has resulted in the Company reducing or mitigating its exposure to certain counterparties where it was deemed warranted and permitted under contractual terms. Financial assurances from counterparties may include guarantees, letters of credit and cash. At December 31, 2018 letters of credit totaling $122 million ( 2017 : $110 million ) were held primarily in respect of customer trade receivables. The Company typically has collected its trade receivables in full and at December 31, 2018 , 99 percent were current ( 2017 : 96 percent ). Management defines current as outstanding accounts receivable under 30 days past due. The Company has a general lien and a continuing and first priority security interest in, and a secured charge on, all of a shipper's petroleum products in its custody. At December 31, the aging of trade and other receivables was as follows: Past Due 2018 2017 31-60 days past due 2 6 Greater than 61 days — — 2 6 The Company uses a loss allowance matrix to measure lifetime expected credit losses at initial recognition and throughout the life of the receivable. The loss allowance matrix is determined based on the Company’s historical default rates over the expected life of trade receivables, adjusted for forward-looking estimates. Management believes the unimpaired amounts that are past due by greater than 30 days are fully collectible based on historical default rates of customers and management’s assessment of counterparty credit risk through established credit management techniques as discussed above. Advances to related parties held at amortized cost consists of funds advanced by Pembina to a jointly controlled entity. Expected credit losses are measured using a probability-weighted estimate of credit losses, measured as the present value of all expected cash shortfalls, discounted at the effective interest rate of the financial asset, using reasonable and supportable information about past events, current conditions and forecasts of future economic conditions. Management considers the risk of default relating to the advances to be low due to their priority ranking against other interests, and firm contracted revenues underpinning expected future cash flows from the jointly controlled entity's assets. At December 31, 2018 , the impairment loss allowance amounted to $1 million ( 2017 : $1 million ). Pembina recognized less than $1 million in impairment losses on financial assets during 2018 ( 2017 : $1 million ). The Company monitors and manages its concentration of counterparty credit risk on an ongoing basis. The Company believes these measures minimize its counterparty credit risk but there is no certainty that they will protect it against all material losses. As part of its ongoing operations, the Company must balance its market and counterparty credit risks when making business decisions. Liquidity risk Liquidity risk is the risk the Company will not be able to meet its financial obligations as they come due. The following are the contractual maturities of financial liabilities, including estimated interest payments. Outstanding balances due by period December 31, 2018 Carrying Amount Expected Cash Flows Less Than 1 Year 1 - 3 Years 3 - 5 Years More Than 5 Years ($ millions) Trade payables and accrued liabilities 803 803 803 — — — Taxes payable 82 82 67 3 4 8 Loans and borrowings 7,537 10,794 724 2,334 1,183 6,553 Dividends payable 97 97 97 — — — Derivative financial liabilities 6 6 6 — — — Finance leases 23 23 9 11 3 — The Company manages its liquidity risk by forecasting cash flows over a 12 month rolling time period to identify financing requirements. These financing requirements are then addressed through a combination of credit facilities and through access to capital markets, if required. Market risk Pembina's results are subject to movements in commodity prices, foreign exchange and interest rates. A formal Risk Management Program including policies and procedures has been designed to mitigate these risks. a. Commodity price risk Certain of the transportation contracts or tolling arrangements with respect to Pembina's pipeline assets do not include take-or-pay commitments from crude oil and gas producers and, as a result, Pembina is exposed to throughput risk with respect to those assets. A decrease in volumes transported can directly and adversely affect Pembina’s revenues and earnings. The demand for, and utilization of, Pembina's pipeline assets may be impacted by factors such as changing market fundamentals, capacity bottlenecks, operational incidents, regulatory restrictions, system maintenance, weather and increased competition. Market fundamentals, such as commodity prices and price differentials, natural gas and gasoline consumption, alternative energy sources and global supply disruptions outside of Pembina’s control can impact both the supply of and demand for the commodities transported on Pembina’s pipelines. Pembina's Marketing business includes activities related to product storage, terminalling, and hub services. These activities expose Pembina to certain risks relating to fluctuations in commodity prices and, as a result, Pembina may experience volatility in revenue and impairments related to the book value of stored product with respect to these activities. Primarily, Pembina enters into contracts to purchase and sell crude oil, condensate, NGL and natural gas at floating market prices; as a result, the prices of products that are marketed by Pembina are subject to volatility as a result of factors such as seasonal demand changes, extreme weather conditions, market inventory levels, general economic conditions, changes in crude oil markets and other factors. Pembina manages its risk exposure by balancing purchases and sales to secure less volatile margins. Notwithstanding Pembina's management of price and quality risk, marketing margins for commodities can vary and have varied significantly from period to period in the past. This variability could have an adverse effect on the results of Pembina's Marketing business and its overall results of operations. To assist in reducing this inherent variability in its Marketing business, Pembina has invested, and will continue to invest, in assets that have a fee-based revenue component. Pembina is also exposed to potential price declines and decreasing frac spreads between the time Pembina purchases NGL feedstock and sells NGL products. Frac spread is the difference between the sale prices of NGL products and the cost of NGL sourced from natural gas and acquired at prices related to natural gas prices. Frac spreads can change significantly from period to period depending on the relationship between NGL and natural gas prices (the "frac spread ratio"), absolute commodity prices, and changes in the Canadian to U.S. dollar exchange rate. In addition to the frac spread ratio changes, there is also a differential between NGL product prices and crude oil prices which can change margins realized for midstream products. The amount of profit or loss made on the extraction portion of the business will generally increase or decrease with frac spreads. This exposure could result in variability of cash flow generated by the Marketing business, which could affect Pembina and the cash dividends that Pembina is able to distribute. The Company utilizes financial derivative instruments as part of its overall risk management strategy to assist in managing the exposure to commodity price, interest rate, cost of power and foreign exchange risk. As an example of commodity price mitigation, the Company actively fixes a portion of its exposure to fractionation margins through the use of derivative financial instruments. Additionally, Pembina's Marketing business is also exposed to variability in quality, time and location differentials for various products, and financial instruments may be used to offset the Company’s exposures to these differentials. The Company does not trade financial instruments for speculative purposes. b. Foreign exchange risk Certain of Pembina's cash flows, namely a portion of its commodity-related cash flows, certain cash flows from U.S.-based infrastructure assets, and distributions from U.S.-based investments in equity accounted investees, are subject to currency risk, arising from the denomination of specific cash flows in U.S. dollars. Additionally, a portion of Pembina's capital expenditures, and contributions or loans to Pembina’s U.S.-based investments in equity accounted investees, may be denominated in U.S. dollars. Pembina monitors, assesses, and responds to these foreign currency risks using an active risk management program, which may include the exchange of foreign currency for domestic currency at a fixed rate. c. Interest rate risk Pembina has floating interest rate debt which subjects the Company to interest rate risk. Pembina responds to this risk under its active risk management program to enter into financial derivative contracts to fix interest rates. At the reporting date, the interest rate profile of the Company's interest-bearing financial instruments was: As at December 31 ($ millions) 2018 2017 Carrying Amounts of Financial Liability Fixed rate instruments 6,232 5,685 Variable rate instruments (1) 1,305 1,778 7,537 7,463 (1) At December 31, 2018 , the Company held no positions in financial derivative contracts to fix interest rates (December 31, 2017: $100 million ). Cash flow sensitivity analysis for variable rate instruments A change of 100 basis points in interest rates at the reporting date would have (increased) decreased earnings by the amounts shown below. This analysis assumes that all other variables remain constant. As at December 31 ($ millions) 2018 2017 ± 100 bp ± 100 bp Variable rate instruments ±13 ±18 Interest rate swap ±0 ±1 Earnings sensitivity (net) ±13 ±17 Fair values The fair values of financial assets and liabilities, together with the carrying amounts shown in the Consolidated Statements of Financial Position, are as follows: 2018 2017 As at December 31 Carrying Fair Value (3) Carrying value Fair Value (3) ($ millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Financial assets carried at fair value Derivative financial instruments 54 — 54 — 4 — 4 — Advances to related parties 58 — — 58 — — — — 112 — 54 58 4 — 4 — Financial assets carried at amortized cost Cash and cash equivalents 157 157 — — 321 321 — — Trade receivables and other 604 604 — — 529 529 — — Advances to related parties 77 — 77 — 42 — 42 — Other assets 9 — 9 — 13 — 13 — 847 761 86 — 905 850 55 — Financial liabilities carried at fair value Derivative financial instruments (1) 6 — 6 — 79 — 79 — Financial liabilities carried at amortized cost Trade payables and accrued liabilities 803 803 — — 677 677 — — Taxes payable (1) 82 82 — — 25 25 — — Dividends payable 97 97 — — 91 91 — — Loans and borrowings (1) 7,537 — 7,588 — 7,463 — 7,686 — Convertible debentures (2) — — — — 93 145 — — 8,519 982 7,588 — 8,349 938 7,686 — (1) Carrying value of current and non-current balances. (2) Carrying value excludes conversion feature of convertible debentures. (3) The basis for determining fair value is disclosed in Note 5. Interest rates used for determining fair value The interest rates used to discount estimated cash flows, when applicable, are based on the government yield curve at the reporting date plus and adequate credit spread, and were as follows: As at December 31 (percent) 2018 2017 Derivatives 2.2 - 2.3 1.4 - 1.8 Loans and borrowings 2.6 - 5.6 2.0 - 4.7 Fair value of power derivatives are based on market rates reflecting forward curves. Fair value hierarchy The fair value of financial instruments carried at fair value is classified according to the following hierarchy based on the amount of observable inputs used to value the instruments. Level 1: Unadjusted quoted prices are available in active markets for identical assets or liabilities as the reporting date. Pembina does not use Level 1 inputs for any of its fair value measurements. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 2 valuations are based on inputs, including quoted forward prices for commodities, time value and volatility factors, which can be substantially observed or corroborated in the marketplace. Instruments in this category include non-exchange traded derivatives such as over-the-counter physical forwards and options, including those that have prices similar to quoted market prices. Pembina obtains quoted market prices for its inputs from information sources including banks, Bloomberg Terminals and Natural Gas Exchange. The majority of Pembina's significant financial instruments carried at fair value are valued using Level 2 inputs. Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs). Level 3 valuations use unobservable inputs, such as a financial forecast developed using the entity’s own data for expected cash flows and risk adjusted discount rates, to measure fair value to the extent that relevant observable inputs are not available. The unobservable inputs reflect the assumptions that market participants would use when pricing the asset or liability, including assumptions about risk. In developing unobservable inputs, the entity’s own data is used and adjusted for reasonably available information that would be used by other market participants. Advances to related parties carried at fair value consist of funds advances by Pembina to a jointly controlled entity with an equity conversion option. Fair value is measured on a recurring basis using a valuation model that considers the present value of management's best estimate of future cash flows expected to result from the asset under development in the jointly controlled entity, discounted using a risk-adjusted discount rate. The following table is a summary of the net derivative financial instruments, which is consistent with the gross balances: 2018 2017 As at December 31 ($ millions) Current Asset Non-Current Asset Current Liability Non-Current Liability Total Current Asset Non-Current Asset Current Liability Non-Current Liability Total Commodity, power, storage and rail financial instruments 44 — (2 ) — 42 4 — (31 ) — (27 ) Interest rate — — — — — — — (2 ) — (2 ) Foreign exchange 10 — (4 ) — 6 — — — — — Conversion feature of convertible debentures (Note 14) — — — — — — — (46 ) — (46 ) Net derivative financial instruments 54 — (6 ) — 48 4 — (79 ) — (75 ) Sensitivity analysis The following table shows the impact on earnings if the underlying risk variables of the derivative financial instruments changed by a specified amount, with other variables held constant. As at December 31, 2018 ($ millions) + Change - Change Frac spread related Natural gas (AECO +/- $0.25 per GJ) 2 (2 ) NGL (includes propane, butane and condensate) (Belvieu/Conway +/- U.S. $0.10 per gal) (9 ) 9 Foreign exchange (US$ vs. C$) (FX rate +/- $0.10) 13 (13 ) Product margin Crude oil (WTI +/- $2.50 per bbl) (3 ) 3 NGL (includes propane, butane and condensate) (Belvieu/Conway +/- U.S. $0.10 per gal) N/A N/A Corporate (1) Interest rates (Rate +/- 50 basis points) — — (1) As at December 31, 2018 , there were no outstanding financial derivative contracts related to power and interest rates. |
OPERATING LEASES
OPERATING LEASES | 12 Months Ended |
Dec. 31, 2018 | |
Leases1 [Abstract] | |
OPERATING LEASES | OPERATING LEASES Leases as lessee The Company leases a number of offices, warehouses, land and rail cars under operating leases. The leases run for a period of one to 16 years, with an option to renew the lease after that date. The Company has sublet office space and rail cars up to 2027 and has contracted sub-lease payments for a minimum of $85 million over the term. Refer to note 29 for further details regarding operating lease commitments. Leases as lessor Operating lease revenues are receivable as follows: As at December 31 ($ millions) 2018 2017 Less than 1 year 80 62 Between 1 and 5 years 376 246 More than 5 years 899 702 1,355 1,010 The Company’ lease revenues are generated through minimum payments for certain pipeline and terminaling assets that run for a period of 25 to 30 years with options to renew for an additional 10 years. The carrying value of property, plant and equipment under lease at December 31, 2018 is $614 million ( 2017 : $484 million ). Total revenue earned from minimum lease payments was $78 million in 2018 ( 2017 : $62 million ). |
CAPITAL MANAGEMENT
CAPITAL MANAGEMENT | 12 Months Ended |
Dec. 31, 2018 | |
Corporate Information And Statement Of IFRS Compliance [Abstract] | |
CAPITAL MANAGEMENT | CAPITAL MANAGEMENT The Company's objective when managing capital is to ensure a stable stream of dividends to shareholders that is sustainable over the long-term. The Company manages its capital structure based on requirements arising from significant capital development activities, the risk characteristics of its underlying asset base, and changes in economic conditions. Pembina manages its capital structure and short-term financing requirements using non-GAAP measures, including the ratios of debt to adjusted EBITDA, debt to total enterprise value, adjusted cash flow to debt and debt to equity. The metrics are used to measure the Company's financial leverage and measure the strength of the Company's balance sheet. The Company remains satisfied that the leverage currently employed in its capital structure is sufficient and appropriate given the characteristics and operations of the underlying asset base. The Company, upon approval from its Board of Directors, will balance its overall capital structure through new equity or debt issuances, as required. The Company maintains a conservative capital structure that allows it to finance its day-to-day cash requirements through its operations, without requiring external sources of capital. The Company funds its operating commitments, short-term capital spending as well as its dividends to shareholders through this cash flow, while new borrowing and equity issuances are primarily reserved for the support of specific significant development activities. The capital structure of the Company consists of shareholder's equity, comprised of common and preferred equity, plus long-term debt. Long-term debt is comprised of bank credit facilities, unsecured notes and finance lease obligations. Pembina is subject to certain financial covenants in its credit facility agreements and is in compliance with all financial covenants as of December 31, 2018 . Note 16 of these financial statements shows the change in Share Capital for the year ended December 31, 2018 . |
GROUP ENTITIES
GROUP ENTITIES | 12 Months Ended |
Dec. 31, 2018 | |
Interests In Other Entities [Abstract] | |
GROUP ENTITIES | GROUP ENTITIES Significant subsidiaries As at December 31 Ownership Interest (percentages) 2018 2017 Pembina Pipeline 100 100 Pembina Gas Services Limited Partnership 100 100 Pembina Oil Sands Pipeline L.P. 100 100 Pembina Midstream Limited Partnership 100 100 Pembina Infrastructure and Logistics L.P. 100 100 Pembina Holding Canada L.P. 100 100 Pembina U.S. Corporation 100 100 |
RELATED PARTIES
RELATED PARTIES | 12 Months Ended |
Dec. 31, 2018 | |
Related Party [Abstract] | |
RELATED PARTIES | RELATED PARTIES The Company enters into transactions with related parties in the normal course of business and on terms equivalent to those that prevail in arm's length transactions. The Company advances funds to support operations and provides services to investments in equity accounted investees. A summary of the significant related party transactions are as follows: Equity accounted investees ($ millions) 2018 2017 For the years ended December 31: Services provided 42 8 Interest income 6 1 As at December 31: Advances to related parties (1) 135 42 Trade receivables and other 12 5 (1) Includes $58 million (2017: $13 million) in advances to Canada Kuwait Petrochemical Corporation ("CKPC") convertible to shares at the Company's discretion and $75 million (2017: $29 million) in advances to Ruby Pipeline, L.L.C. Key management personnel and director compensation Key management consists of the Company's directors and certain key officers. Compensation In addition to short-term employee benefits, including salaries, director fees and short term incentives, the Company also provides key management personnel with share-based compensation, contributes to post employment pension plans and provides car allowances, parking and business club memberships. Key management personnel compensation comprised: For the years ended December 31 ($ millions) 2018 2017 Short-term employee benefits 10 8 Share-based compensation and other 13 7 Total compensation of key management 23 15 Transactions Key management personnel and directors of the Company control less than one percent of the voting common shares of the Company (consistent with the prior year). Certain directors and key management personnel also hold Pembina preferred shares. Dividend payments received for the common and preferred shares held are commensurate with other non-related holders of those instruments. Certain officers are subject to employment agreements in the event of termination without just cause or change of control. Post-employment benefit plans Pembina has significant influence over the pension plans for the benefit of their respective employees. No balance payable is outstanding at December 31, 2018 ( December 31, 2017 : nil ). Transactions ($ millions) Transaction value year ended December 31 Post-employment benefit plan Transaction 2018 2017 Defined benefit plan Funding 19 16 |
COMMITMENTS, CONTINGENCIES AND
COMMITMENTS, CONTINGENCIES AND GUARANTEES (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Other Provisions, Contingent Liabilities And Contingent Assets [Abstract] | |
COMMITMENTS, CONTINGENCIES AND GUARANTEES | COMMITMENTS, CONTINGENCIES AND GUARANTEES Commitments Pembina had the following contractual obligations outstanding at December 31, 2018 : Payments Due By Period Contractual Obligations ($ millions) Total Less than 1 year 1 – 3 years 3 – 5 years After 5 years Leases and other (1) 796 118 220 163 295 Loans and borrowings (2) 10,794 724 2,334 1,183 6,553 Construction commitments (3) 1,001 643 34 19 305 Advances to related parties (4) 96 96 — — — Total contractual obligations 12,687 1,581 2,588 1,365 7,153 (1) Includes office space, surface land, vehicles and rail car leases. (2) Excluding deferred financing costs. Including interest payments on senior unsecured notes. (3) Excluding significant projects that are awaiting regulatory approval at December 31, 2018 and for which Pembina is not committed to construct. (4) The Company has a contractual commitment to advance $96 million ( US$70 million ) to the Company's jointly controlled investment, Ruby Pipeline, L.L.C. by March 28, 2019 . Pembina enters into product purchase agreements and power purchase agreements to secure supply for future operations. Purchase prices of both NGL and power are dependent on current market prices. Volumes and prices for NGL and power contracts cannot be reasonably determined and therefore an amount has not been included in the contractual obligations schedule. Product purchase agreements range from one to 10 years and involve the purchase of NGL products from producers. Assuming product is available, Pembina has secured between 24 and 105 mbpd each year up to and including 2027 . Power purchase agreements range from one to 25 years and involve the purchase of power from electrical service providers. The Company has secured up to 59 megawatts per day each year up to and including 2043 . Contingencies The Company, its subsidiaries and its investments in equity accounted investees are subject to various legal and regulatory proceedings and actions arising in the normal course of business. We represent our interests vigorously in all proceedings in which we are involved. Legal and administrative proceedings involving possible losses are inherently complex, and we apply significant judgment in estimating probable outcomes. While the outcome of such actions and proceedings cannot be predicted with certainty, management believes that the resolutions of such actions and proceedings will not have a material impact on the Company’s financial position or results of operations. Guarantees The Company has $69 million ( 2017 : $26 million ) in letters of credit issued to facilitate commercial transactions with third parties and to support regulatory requirements. The Company has provided guarantees to various third parties in the normal course of conducting business. The guarantees include financial guarantees to counterparties for product purchases and sales, transportation services, utilities, engineering and construction services. The guarantees have not had and are not expected to have a material impact on the Company's financial position, earnings, liquidity or capital resources. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Significant Accounting Policies [Abstract] | |
Statement of compliance | The consolidated financial statements have been prepared on a historical cost basis with some exceptions, as detailed in the accounting policies set out below in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB"). These accounting policies have been applied consistently for all periods presented in these consolidated financial statements. |
Functional and presentation currency | Functional and presentation currency The consolidated financial statements are presented in Canadian dollars. All financial information presented in Canadian dollars has been disclosed in millions, except where noted. The assets and liabilities of subsidiaries, and investments in equity accounted investees, whose functional currencies are other than Canadian dollars are translated into Canadian dollars at the foreign exchange rate at the balance sheet date, while revenues and expenses of such subsidiaries are translated using average monthly foreign exchange rates, which approximate the foreign exchange rates on the dates of the transactions. Foreign exchange differences arising on translation of subsidiaries and investments in equity accounted investees with a functional currency other than the Canadian dollar are included in other comprehensive income. |
Use of estimates and judgments | Use of estimates and judgments The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that are based on the facts and circumstances and estimates at the date of the consolidated financial statements and affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Judgments, estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. The following judgment and estimation uncertainties are those management considers material to the Company's consolidated financial statements: Judgments (i) Business combinations Business combinations are accounted for using the acquisition method of accounting. The determination of fair value often requires management to make judgments about future possible events. The assumptions with respect to determining the fair value of property, plant and equipment, intangible assets and liabilities acquired, as well as the determination of deferred taxes, generally require the most judgment. (ii) Depreciation and amortization Depreciation and amortization of property, plant and equipment and intangible assets are based on management's judgment of the most appropriate method to reflect the pattern of an asset's future economic benefit expected to be consumed by the Company. Among other factors, these judgments are based on industry standards and historical experience. (iii) Impairment Assessment of impairment of non-financial assets is based on management’s judgment of whether or not there are sufficient internal or external factors that would indicate that an asset, investment, or cash generating unit ("CGU") is impaired. The determination of a CGU is based on management’s judgment and is an assessment of the smallest group of assets that generate cash inflows independently of other assets. In addition, management applies judgment to assign goodwill acquired as part of a business combination to the CGU or group of CGUs that is expected to benefit from the synergies of the business combination for purposes of impairment testing. When an impairment test is performed, the carrying value of a CGU or group of CGUs is compared to its recoverable amount, defined as the greater of fair value less costs to sell and value in use. As such, the asset composition of a CGU or group of CGUs directly impacts both the carrying value and recoverability of the assets included therein. (iv) Assessment of joint control over joint arrangements The determination of joint control requires judgment about the influence the Company has over the financial and operating decisions of an arrangement and the extent of the benefits it obtains based on the facts and circumstances of the arrangement during the reporting period. Joint control exists when decisions about the relevant activities require the unanimous consent of the parties that control the arrangement collectively. Ownership percentage alone may not be a determinant of joint control. (v) Pattern of revenue recognition The pattern of revenue recognition is impacted by management’s judgments as to the nature of the Company’s performance obligations, the amount of consideration allocated to performance obligations that are not sold on a stand-alone basis, the valuation of material rights and the timing of when those performance obligations have been satisfied. (vi) Leases Management applies judgment to determine if an arrangement contains a lease from both a lessee and lessor perspective. This assessment is based on management’s expectations regarding existing and future customers and the nature of the underlying assets. Estimates (i) Business combinations Estimates of future cash flows, forecast prices, interest rates, discount rates, cost, market values and useful lives are made in determining the fair value of assets acquired and liabilities assumed. Changes in any of the assumptions or estimates used in determining the fair value of acquired assets and liabilities could impact the amounts assigned to assets, liabilities, intangible assets, goodwill and deferred taxes in the purchase price equation. Future earnings can be affected as a result of changes in future depreciation and amortization, asset or goodwill impairment. (ii) Provisions and contingencies Management uses judgment in determining the likelihood of realization of contingent assets and liabilities to determine the outcome of contingencies. Provisions recognized are based on management's best estimate of the timing, scope and amount of expected future cash outflows to settle the obligation. Based on the long-term nature of the decommissioning provision, the most significant uncertainties in estimating the provision are the discount and inflation rates used, the costs that will be incurred and the timing of when these costs will occur. (iii) Deferred taxes The calculation of the deferred tax asset or liability is based on assumptions about the timing of many taxable events and the enacted or substantively enacted rates anticipated to be applicable to income in the years in which temporary differences are expected to be realized or reversed. (iv) Depreciation and amortization Estimated useful lives of property, plant and equipment and intangible assets are based on management's assumptions and estimates of the physical useful lives of the assets, the economic lives, which may be associated with the reserve lives and commodity type of the production area, in addition to the estimated residual value. (v) Goodwill impairment test In determining the recoverable amount as part of annual goodwill impairment testing, management uses its best estimates of future cash flows, and assesses discount rates to reflect management’s best estimate of a rate that reflects a current market assessment of the time value of money and the specific risks associated with the underlying assets and cash flows. (vi) Impairment of financial assets The measurement of financial assets carried at amortized cost includes management’s estimates regarding the expected credit losses that will be realized on these financial assets. (vii) Revenue from contracts with customers In estimating the contract value, management makes assessments as to whether variable consideration is constrained or not reasonably estimable, such that an amount or portion of an amount cannot be included in the estimate of the contract value. Management's estimates of the likelihood of a customer’s ability to use outstanding make-up rights may impact the timing of revenue recognition. In addition, in determining the amount of consideration to be allocated to performance obligations that are not sold on a stand-alone basis, management estimates the stand-alone selling price of each performance obligation under the contract, taking into consideration the location and volume of goods or services being provided, the market environment, and customer specific considerations. (viii) Fair value of financial instruments For Level 2 valued financial instruments, management makes assumptions and estimates value based on observable inputs such as quoted forward prices, time value and volatility factors. For Level 3 valued financial instruments, management uses estimates of financial forecasts, expected cash flows and risk adjusted discount rates to measure fair value. (ix) Employee benefit obligations An actuarial valuation is prepared to measure the Company’s net employee benefit obligations using management’s best estimates with respect to longevity, discount rates, compensation increases, market returns on plan assets, retirement and termination rates. |
Basis of consolidation | Basis of consolidation i) Business combinations The Company measures goodwill as the fair value of the consideration transferred including the recognized amount of any non-controlling interest in the acquiree, less the fair value of the identifiable assets acquired and liabilities assumed, all measured as of the acquisition date. When the excess is negative, a bargain purchase gain is recognized immediately in earnings. The Company elects on a transaction-by-transaction basis whether to measure non-controlling interest at its fair value, or at its proportionate share of the recognized amount of the identifiable net assets, at the acquisition date. Non-controlling interests represent equity interests in subsidiaries owned by outside parties. The share of net assets of subsidiaries attributable to non-controlling interests is presented as a separate component of equity. Their share of net income and other comprehensive income is also recognized in this separate component of equity. Changes in the Company's ownership interest in subsidiaries that do not result in a loss of control are accounted for as equity transactions. Adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary. No adjustments are made to goodwill and no gain or loss is recognized in earnings. Transaction costs, other than those associated with the issue of debt or equity securities, that the Company incurs in connection with a business combination are expensed as incurred. ii) Subsidiaries Subsidiaries are entities, including unincorporated entities such as partnerships, controlled by the Company. The financial results of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries are aligned with the policies adopted by the Company. iii) Joint arrangements Joint arrangements represent activities where the Company has joint control established by a contractual agreement. Joint control requires unanimous consent for the relevant financial and operational decisions. A joint arrangement is either a joint operation, whereby the parties have rights to the assets and obligations for the liabilities, or a joint venture, whereby the parties have rights to the net assets. For a joint operation, the consolidated financial statements include the Company's proportionate share of the assets, liabilities, revenues, expenses and cash flows of the arrangement with items of a similar nature on a line-by-line basis, from the date that joint control commences until the date that joint control ceases. Joint ventures are accounted for using the equity method of accounting and are initially recognized at cost, or fair value if acquired as part of a business combination. Joint ventures are adjusted thereafter for the post-acquisition change in the Company's share of the equity accounted investment's net assets. The Company's consolidated financial statements include its share of the equity accounted investment's profit or loss and other comprehensive income, until the date that joint control ceases. When the Company's share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest, including any long-term investments, is reduced to nil, and the recognition of further losses is discontinued except to the extent that the Company has an obligation or has made payments on behalf of the investee. Distributions from investments in equity accounted investees are recognized when received. Acquisition of an incremental ownership in a joint arrangement where the Company maintains joint control is recorded at cost or fair value if acquired as part of a business combination. Where the Company has a partial disposal, including a deemed disposal, of a joint arrangement and maintains joint control, the resulting gains or losses are recorded in earnings at the time of disposal. iv) Transactions eliminated on consolidation Balances and transactions, and any revenue and expenses arising from intersegment transactions, are eliminated in preparing the consolidated financial statements. Gains arising from transactions with investments in equity accounted investees are eliminated against the investment to the extent of the Company's interest in the investee. Losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment. v) Foreign currency Transactions in foreign currencies are translated to the Company's functional currency at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the Company's functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortized cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortized cost in foreign currency translated at the exchange rate at the end of the reporting period. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Gains and losses arising from translation of foreign subsidiaries or investments in equity accounted investees with a functional currency other than the Company's Canadian dollar reporting currency are reflected in other comprehensive income. Asset and liability accounts are translated at the period-end exchange rates while revenues, expenses, gains and losses are translated at the exchange rates in effect at the time of the transaction. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents comprise cash balances, call deposits and short-term investments with original maturities of ninety days or less, and are used by the Company in the management of its short-term commitments. |
Inventories | Inventories Inventories are measured at the lower of cost and net realizable value and consist primarily of crude oil, NGL and spare parts. The cost of inventories is determined using the weighted average costing method and includes direct purchase costs and when applicable, costs of production, extraction, fractionation, and transportation. Net realizable value is the estimated selling price in the ordinary course of business less the estimated selling costs. All changes in the value of the inventories are reflected in earnings. |
Financial instruments | Financial instruments Financial assets and liabilities are offset and the net amount presented in the consolidated statement of financial position when, and only when, the Company has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. i) Non-derivative financial assets The Company initially recognizes loans, receivables, advances to related parties and deposits on the date that they are originated. All other financial assets are recognized on the trade date at which the Company becomes a party to the contractual provisions of the instrument. The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Company is recognized as a separate asset or liability. On derecognition, the difference between the carrying amount of the financial asset and the consideration received is recognized in earnings. The Company classifies non-derivative financial assets into the following categories: Financial assets at amortized cost A financial asset is classified in this category if the asset is held within a business model whose objective is to collect contractual cash flows on specified dates that are solely payments of principal and interest. At initial recognition, financial assets at amortized costs are recognized at fair value plus directly attributable transaction costs. Subsequent to initial recognition, these financial assets are recorded at amortized cost using the effective interest method less any impairment losses. Financial assets at fair value through other comprehensive income A financial asset is classified in this category if the asset is held within a business model whose objective is met by both collecting contractual cash flows and selling financial assets. The Company did not have any financial assets classified as fair value through other comprehensive income during the years covered in these financial statements. Financial assets at fair value through earnings A financial asset is classified in this category if it is not classified as a financial asset at amortized cost or a financial asset at fair value through other comprehensive income, or it is an equity instrument designated as such on initial recognition. At initial recognition, and subsequently, these financial assets are recognized at fair value. ii) Non-derivative financial liabilities The Company initially recognizes financial liabilities on the trade date at which the Company becomes a party to the contractual provisions of the instrument. Non-derivative financial liabilities are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortized cost using the effective interest method. The Company derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire. On derecognition, the difference between the carrying value of the liability and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in earnings. The Company records a modification or exchange of an existing liability as a derecognition of the financial liability if the terms are substantially different, resulting in a difference of more than 10 percent when comparing the present value of the remaining cash flows of the existing liability to the present value of the discounted cash flow under the new terms using the original effective interest rate. If a modification to an existing liability causes a revision to the estimated payments of the liability but is not treated as a derecognition, the Company adjusts the gross carrying amount of the liability to the present value of the estimated contractual cash flows using the instrument’s original effective interest rate, with the difference recorded in earnings. The Company's non-derivative financial liabilities are comprised of the following: bank overdrafts, trade payables and accrued liabilities, taxes payable, dividends payable, loans and borrowings including finance lease obligations, other liabilities and the liability component of convertible debentures. Bank overdrafts that are repayable on demand and form an integral part of the Company's cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. iii) Common share capital Common shares are classified as equity. Incremental costs directly attributable to the issue of common shares and share options are recognized as a deduction from equity, net of any tax effects. iv) Preferred share capital Preferred shares are classified as equity because they bear discretionary dividends and do not contain any obligations to deliver cash or other financial assets. Discretionary dividends are recognized as equity distributions on approval by the Company's Board of Directors. Incremental costs directly attributable to the issue of preferred shares are recognized as a deduction from equity, net of any tax effects. v) Compound financial instruments The Company's convertible debentures are compound financial instruments consisting of a financial liability and an embedded conversion feature. In accordance with IFRS 9, the embedded derivatives are required to be separated from the host contracts and accounted for as stand-alone instruments. Debentures containing a cash conversion option allow Pembina to pay cash to the converting holder of the debentures, at the option of the Company. As such, the conversion feature is presented as a financial derivative liability within long-term derivative financial instruments. Debentures without a cash conversion option are settled in shares on conversion, and therefore the conversion feature is presented within equity, in accordance with its contractual substance. On initial recognition and at each reporting date, the embedded conversion feature is measured at fair value using an option pricing model. Subsequent to initial recognition, any unrealized gains or losses arising from fair value changes are recognized through earnings in the statement of earnings and comprehensive income at each reporting date. If the conversion feature is included in equity, it is not remeasured subsequent to initial recognition. On initial recognition, the debt component, net of issue costs, is recorded as a financial liability and accounted for at amortized cost. Subsequent to initial recognition, the debt component is accreted to the face value of the debentures using the effective interest rate method. Upon conversion, the corresponding portions of the debt and equity are removed from those captions and transferred to share capital. vi) Derivative financial instruments The Company holds derivative financial instruments to manage its interest rate, commodity, power costs and foreign exchange risk exposures as well as a cash conversion features on convertible debentures and a redemption liability. Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative meet the definition of a derivative, and the combined instrument is not measured at fair value through earnings. Derivatives are recognized initially at fair value with attributable transaction costs recognized in earnings as incurred. Subsequent to initial recognition, derivatives are measured at fair value and changes in non-commodity-related derivatives are recognized immediately in earnings as part of net finance costs and changes in commodity-related derivatives are recognized immediately in earnings. |
Property, plant and equipment | Property, plant and equipment i) Recognition and measurement Items of property, plant and equipment are measured initially at cost, unless they are acquired as part of a business combination in which case they are initially measured at fair value. Thereafter, property, plant and equipment are recorded net of accumulated depreciation and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, estimated decommissioning provisions and borrowing costs on qualifying assets. Cost may also include any gain or loss realized on foreign currency transactions directly attributable to the purchase or construction of property, plant and equipment. Purchased software that is integral to the functionality of the related equipment is capitalized as part of that equipment. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate components of property, plant and equipment. The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognized in earnings. ii) Subsequent costs The cost of replacing a part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company, and its cost can be measured reliably. The carrying amount of the replaced part is derecognized and recorded as depreciation expense. The cost of maintenance and repair expenses of the property, plant and equipment are recognized in earnings as incurred. iii) Depreciation Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed and if a component has a useful life that is different from the remainder of the asset, that component is depreciated separately. Land and linefill are not depreciated. Depreciation is recognized in earnings on a straight line or declining balance basis, which most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Depreciation methods, useful lives, economic lives and residual values are reviewed annually and adjusted if appropriate. |
Intangible assets | Intangible assets i) Goodwill Goodwill that arises upon acquisitions is included in intangible assets and goodwill. See Note 4(a)(i) for the policy on measurement of goodwill at initial recognition. Subsequent measurement Goodwill is measured at cost less accumulated impairment losses. In respect of investments in equity accounted investees, goodwill is included in the carrying amount of the investment, and an impairment loss on such an investment is allocated to the investment and not to any asset, including goodwill, that forms the carrying amount of the investment in equity accounted investee. ii) Other intangible assets Other intangible assets acquired individually by the Company are initially recognized and measured at cost, unless they are acquired as part of a business combination in which case they are initially measured at fair value. Thereafter, intangible assets with finite useful lives are recorded net of accumulated amortization and accumulated impairment losses. iii) Subsequent expenditures Subsequent expenditures are capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditures are recognized in earnings as incurred. iv) Amortization Amortization is based on the cost of an asset less its residual value. Amortization is recognized in earnings over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. Amortization methods, useful lives and residual values are reviewed annually and adjusted if appropriate. |
Leases | Leases At inception of an arrangement, the Company determines whether such an arrangement is or contains a lease. A specific asset is the subject of a lease if fulfilment of the arrangement is dependent on the use of that specified asset. An arrangement conveys the right to use the asset if the arrangement conveys to a lessee the right to control the use of the underlying asset. At inception or upon reassessment of the arrangement, the Company separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. Leases which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. The leased asset is initially recognized at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Minimum lease payments made under finance leases are apportioned between the finance cost and the reduction of the outstanding liability. The finance cost is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Other leases are operating leases and are not recognized in the Company's consolidated statement of financial position. Payments made under lessee operating leases are recognized in earnings on a straight-line basis over the term of the lease. Lease incentives received are deferred and recognized over the term of the lease. Payments received under lessor operating leases are recognized in earnings in accordance with the benefit received by the customer. |
Impairment | Impairment i) Non-derivative financial assets Impairment of financial assets carried at amortized cost is assessed using the lifetime expected credit loss of the financial asset at initial recognition and throughout the life of the financial asset, except for advances to related parties and other assets for which credit risk has not increased significantly since initial recognition, which are assessed at the twelve month expected credit loss of the financial asset at the reporting date. The Company uses a loss allowance matrix to determine the impairment loss allowance for trade receivables. In determining the loss allowance matrix, the Company uses historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for management's judgment as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends. Impairment losses are recognized in earnings and reflected as a reduction in the related financial asset. ii) Non-financial assets The carrying amounts of the Company's non-financial assets, other than inventory, assets arising from employee benefits and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated. For goodwill and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated annually in connection with the annual goodwill impairment test. An impairment loss is recognized if the carrying amount of an asset or its related CGU exceeds its estimated recoverable amount. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset, CGU or group of CGUs. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into CGUs, the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets. CGUs may incorporate integrated assets from multiple operating segments. For the purpose of goodwill impairment testing, CGUs are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal purposes. Goodwill acquired in a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination. The Company's corporate assets do not generate separate cash inflows and are utilized by more than one CGU. Corporate assets are allocated to CGUs on a reasonable and consistent basis and tested for impairment as part of the testing of the CGU to which the corporate asset is allocated. If there is an indication that a corporate asset may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset has been allocated. Impairment losses are recognized in earnings. Impairment losses recognized in respect of a CGU (group of CGUs) are allocated first to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the CGU (group of CGUs) on a pro rata basis. An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Goodwill that forms part of the carrying amount of an investment in an equity accounted investee is not recognized separately, and therefore is not tested for impairment separately. Instead, the entire amount of the investment is tested for impairment as a single asset when there is objective evidence that the equity accounted investee may be impaired, unless the equity accounted investee does not generate cash flows that are largely independent of those from other assets of the entity in which case it is combined in a CGU with the related assets. |
Employee benefits | Employee benefits i) Defined contribution plans A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in earnings in the periods during which services are rendered by employees. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available. Contributions to a defined contribution plan due more than twelve months after the end of the period in which the employees render the service are discounted to their present value. ii) Defined benefit pension plans A defined benefit pension plan is a post-employment benefit plan other than a defined contribution plan. The Company's net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods, discounted to determine its present value, less the fair value of any plan assets. The discount rate used to determine the present value is established by referencing market yields on high-quality corporate bonds on the measurement date with cash flows that match the timing and amount of expected benefits. The calculation is performed, at a minimum, every three years by a qualified actuary using the actuarial cost method. When the calculation results in a benefit to the Company, the recognized asset is limited to the present value of economic benefits available in the form of future expenses payable from the plan, any future refunds from the plan or reductions in future contributions to the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements that apply to any plan in the Company. An economic benefit is available to the Company if it is realizable during the life of the plan or on settlement of the plan liabilities. When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognized in earnings immediately. The Company recognizes all actuarial gains and losses arising from defined benefit plans in other comprehensive income and expenses related to defined benefit plans in earnings. The Company recognizes gains or losses on the curtailment or settlement of a defined benefit plan when the curtailment or settlement occurs. The gain or loss on curtailment comprises any resulting change in the fair value of plan assets, change in the present value of defined benefit obligation and any related actuarial gains or losses and past service cost that had not previously been recognized. iii) Short-term employee benefits Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably. iv) Share-based payment transactions For equity settled share-based payment plans, the fair value of the share-based payment at grant date is recognized as an expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that meet the related service conditions at the vesting date. For cash settled share-based payment plans, the fair value of the amount payable to employees is recognized as an expense with a corresponding increase in liabilities, over the period that the employees unconditionally become entitled to payment. The liability is remeasured at each reporting date and at settlement date. Any changes in the fair value of the liability are recognized as an expense in earnings. |
Provisions | Provisions A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Provisions are remeasured at each reporting date based on the best estimate of the settlement amount. The unwinding of the discount rate is recognized as accretion in finance costs. |
Decommissioning provision | Decommissioning provision The Company's activities give rise to certain dismantling, decommissioning, environmental reclamation and remediation obligations at the end of an asset's economic life. A provision is made for the estimated cost of site restoration and capitalized in the relevant asset category. Decommissioning obligations are measured at the present value, based on a risk-free rate, of management's best estimate of what is reasonably expected to be incurred to settle the obligation at the end of an asset's economic life. Subsequent to the initial measurement, the obligation is adjusted at the end of each period to reflect the passage of time, changes in the risk-free rate and changes in the estimated future cash flows underlying the obligation. The increase in the provision due to the passage of time is recognized as accretion in finance costs whereas increases or decreases due to changes in the estimated future cash flows or risk-free rate are added to or deducted from the cost of the related asset. |
Revenue | Revenue Accounting policies related to revenue from contracts with customers are disclosed in Note 3 Changes in Accounting Policies. |
Finance income and finance costs | Finance income and finance costs Finance income comprises interest income on funds deposited and invested, gains on non-commodity-related derivatives measured at fair value through earnings and foreign exchange gains. Interest income is recognized as it accrues in earnings, using the effective interest rate method. Finance costs comprise interest expense on loans and borrowings and convertible debentures, accretion on provisions, losses on disposal of available for sale financial assets, losses on non-commodity-related derivatives, impairment losses recognized on financial assets (other than trade and other receivables) and foreign exchange losses. Borrowing costs that are not directly attributable to the acquisition or construction of a qualifying asset are recognized in earnings using the effective interest rate method. |
Income tax | Income tax Income tax expense comprises current and deferred tax. Current and deferred taxes are recognized in earnings except to the extent that it relates to a business combination, or items are recognized directly in equity or in other comprehensive income. Current tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for: • temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable earnings; • temporary differences relating to investments in subsidiaries and joint arrangements to the extent that it is probable that they will not reverse in the foreseeable future; and • taxable temporary differences arising on the initial recognition of goodwill. The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously. A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. In determining the amount of current and deferred tax, the Company takes into account income tax exposures and whether additional taxes and interest may be due. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information may become available that causes the Company to change its judgment regarding the adequacy of existing tax liabilities, such changes to tax liabilities will impact tax expense in the period that such a determination is made. |
Earnings per common share | Earnings per common share The Company presents basic and diluted earnings per common share ("EPS") data for its common shares. Basic EPS is calculated by dividing the earnings attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. To calculate earnings attributable to common shareholders, earnings are adjusted for accumulated preferred dividends. Diluted EPS is determined by adjusting the earnings attributable to common shareholders and the weighted average number of common shares outstanding, for the effects of all potentially dilutive common shares, which comprise convertible debentures and share options granted to employees ("convertible instruments"). Only outstanding and convertible instruments that will have a dilutive effect are included in fully diluted calculations. The dilutive effect of convertible instruments is determined whereby outstanding convertible instruments at the end of the period are assumed to have been converted at the beginning of the period or at the time issued if issued during the year. Amounts charged to earnings relating to the outstanding convertible instruments are added back to earnings for the diluted calculations. The shares issued upon conversion are included in the denominator of per share basic calculations for the date of issue. |
Segment reporting | Segment reporting An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company's other components. All operating segments' operating results are reviewed regularly by the Company's Chief Executive Officer ("CEO"), Chief Financial Officer ("CFO") and other Senior Vice Presidents ("SVPs") to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. Segment results that are reported to the CEO, CFO and other SVPs include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. |
New standards and interpretations not yet adopted | New standards and interpretations not yet adopted Certain new standards, interpretations, amendments and improvements to existing standards were issued by the IASB or IFRIC and are effective for accounting periods beginning after January 1, 2019 . These standards have not been applied in preparing these consolidated financial statements. Those which may be relevant to Pembina are described below: IFRS 16 Leases IFRS 16 replaces existing leases guidance, including IAS 17 Leases , IFRIC 4 Determining whether an Arrangement contains a Lease , SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease . Pembina will adopt the new standard on the effective date of January 1, 2019. IFRS 16 introduces a new lease definition which increases the focus on control of the underlying asset and may change which contracts are identified as leases. In addition, IFRS 16 introduces a single, on balance sheet lease accounting model for lessees. For all identified lessee arrangements, subject to recognition exemptions for short term leases where the term is 12 months or less and leases of low value items (under $5,000), a right-of-use ("ROU") asset and a lease liability are recognized, representing the right to use the underlying asset and the obligation to make lease payments respectively. For identified lessor arrangements, the accounting remains similar to the current standard with lessors continuing to classify such arrangements as finance or operating leases. Leases in which Pembina is a lessee Pembina has substantially completed the determination of which lessee arrangements are or contain leases. System and new process implementation continue. The initial quantitative impact of applying IFRS 16 has been estimated for lessee accounting, however the disclosed impact may change as Pembina is working through the testing and assessment of controls over its new information technology system as well as finalizing decisions regarding practical expedients. In addition, new guidance and interpretations continue to be released and Pembina’s accounting policies are subject to change until Pembina presents its first financial statements that include the date of initial adoption. A material impact is expected to result from the recognition of new assets and liabilities for rail car, office space and land surface operating lease arrangements. The nature of expenses related to identified lessee arrangements will change as IFRS 16 replaces straight-line operating lease expense with depreciation of right of use assets and interest expense relating to lease liabilities. In addition, cash flow from operating activities will be higher, and cash flow from financing activities will be lower as lease obligation repayments will be reported as financing activities on the Consolidated Statement of Cash Flows. There will be no net impact on cash flows. Pembina estimates that lease liabilities and ROU assets in excess of $400 million will be recorded on adoption of IFRS 16. The Company continues to evaluate if it will elect to apply the practical expedient to account for lease components and non-lease components as a single lease component by class of underlying asset. If this practical expedient were to be selected, it would result in an increase in the ROU asset and lease liability on initial adoption. The Company does not expect the adoption of IFRS 16 to impact its ability to comply with debt covenants described in Note 13. Leases in which Pembina is a lessor Pembina continues to assess certain transportation, storage and other service arrangements to determine if lessor accounting would apply when considering the new lease definition. As these assessments are not yet finalized, the impact of lessor accounting related to these arrangements cannot be determined. Transition Pembina intends to adopt IFRS 16 using the modified retrospective approach, which will result in the cumulative effect of initial application recognized as an adjustment to the opening balance of retained earnings at January 1, 2019 and no restatement of the comparative period. Pembina intends to assess whether all contracts are, or contain, a lease using the IFRS 16 definition and not apply the practical expedient to carry forward lease assessments using existing leases guidance. Conceptual Framework In March 2018, the IASB issued a revised Conceptual Framework for Financial Reporting, effective for annual periods beginning on or after January 1, 2020 with early application permitted. The Conceptual Framework sets out the fundamental concepts of financial reporting and is applied to develop accounting policies when no IFRS Standard applies to a particular transaction. The revised Conceptual Framework includes: new concepts on measurement, presentation and disclosure, and derecognition; updated definitions of an asset and a liability and related recognition criteria; and clarifications in important areas, such as the roles of stewardship, prudence and measurement uncertainty in financial reporting. The Company intends to adopt the revised Conceptual Framework for Financial Reporting on its effective date. The Company is currently evaluating the impact that the standard will have on its earnings and financial position. |
Determination of fair values | A number of the Company's accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability. i) Property, plant and equipment The fair value of property, plant and equipment recognized as a result of a business combination or transferred from a customer is based on market values when available, income approach and depreciated replacement cost when appropriate. Depreciated replacement cost reflects adjustments for physical deterioration as well as functional and economic obsolescence. ii) Intangible assets The fair value of intangible assets acquired in a business combination is determined by an active market value or using the multi-period excess earnings method, whereby the subject asset is valued after deducting a fair return on all other assets that are part of creating the related cash flows. The fair value of other intangible assets is based on the discounted cash flows expected to be derived from the use and eventual sale of the assets. iii) Derivatives Fair value of derivatives are estimated by reference to independent monthly forward prices, interest rate yield curves, currency rates and quoted market prices per share at the period ends. Fair values reflect the credit risk of the instrument and include adjustments to take account of the credit risk of the company, entity and counterparty when appropriate. iv) Non-derivative financial assets and liabilities The fair value of non-derivative financial assets and liabilities is determined on initial recognition, on a recurring basis, or for disclosure purposes. Fair values of financial assets at amortized cost are calculated based on the present value of estimated future principal and interest cash flows, discounted at the market rate of interest at the reporting date. Fair values of financial assets held at fair value are calculated using a probability-weighted income approach based on current market expectations for future cash flows. In respect of convertible debentures, the fair value is determined by the market price of the convertible debenture on the reporting date. For finance leases, the market rate of interest is determined by reference to similar lease agreements. For other financial liabilities where market rates are not readily available, a risk adjusted market rate is used which incorporates the nature of the instrument as well as the risk associated with the underlying cash payments. v) Share-based compensation transactions The fair value of employee share options is measured using the Black-Scholes formula on grant date. Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic volatility adjusted for changes expected due to publicly available information), weighted average expected life of the instruments (based on historical experience and general option holder behaviour), expected dividends, expected forfeitures and the risk-free interest rate (based on government bonds). Service and non-market performance conditions attached to the transactions are not taken into account in determining fair value. The fair value of the long-term share unit award incentive plan and associated distribution units are measured based on the volume-weighted average price for 20 days ending at the reporting date of the Company's shares. vi) Finance lease assets The fair value of finance lease assets is based on market values at the inception date. |
CHANGES IN ACCOUNTING POLICIES
CHANGES IN ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies, Changes In Accounting Estimates And Errors [Abstract] | |
Disclosure of initial application of standards or interpretations | The following table presents the impact of adopting IFRS 15 on the Company’s Consolidated Statement of Financial Position, Consolidated Statement of Earnings and Comprehensive Income and the Consolidated Statement of Cash Flows for the year ended December 31, 2017 for each of the line items affected. i. Consolidated Statement of Financial Position As at December 31, 2017 ($ millions) Previously Reported Adjustments Restated Trade payables and accrued liabilities 713 (36 ) 677 Contract liabilities — 44 44 Deficit (2,075 ) (8 ) (2,083 ) ii. Consolidated Statement of Earnings and Other Comprehensive Income Year ended December 31, 2017 ($ millions) Previously Reported Adjustments Restated Revenue 5,408 (8 ) 5,400 Earnings before income tax 1,033 (8 ) 1,025 Earnings attributable to shareholders 891 (8 ) 883 Basic earnings per common share 1.89 (0.02 ) 1.87 Diluted earnings per common share 1.88 (0.02 ) 1.86 iii. Consolidated Statement of Cash Flows Year ended December 31, 2017 ($ millions) Previously Reported Adjustments Restated Cash provided by (used in) Operating activities Earnings 891 (8 ) 883 Net change in contract liabilities 33 8 41 Cash flow from operating activities 1,513 — 1,513 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations1 [Abstract] | |
Disclosure of detailed information about business combinations | The purchase price equation was based on assessed fair values as follows: ($ millions) October 2, 2017 Purchase Price Consideration Common shares 4,356 Cash 1,522 Preferred shares 522 6,400 Current assets 303 Investments in jointly controlled businesses 6,115 Property, plant and equipment 612 Intangible assets & other long term assets 175 Goodwill 1,781 Current liabilities (192 ) Long term debt (993 ) Deferred tax liabilities (1,210 ) Decommissioning provision (10 ) Other long term liabilities (121 ) Non-controlling interest (60 ) 6,400 |
TRADE RECEIVABLES AND OTHER (Ta
TRADE RECEIVABLES AND OTHER (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Subclassifications of assets, liabilities and equities [abstract] | |
Disclosure of trade receivables and other | As at December 31 ($ millions) 2018 2017 Trade receivables from customers 178 178 Other receivables 411 335 Prepayments 16 17 Impairment loss allowance (1 ) (1 ) Total trade receivables and other 604 529 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, plant and equipment [abstract] | |
Disclosure of detailed information about property, plant and equipment | ($ millions) Land and Land Rights Pipelines Facilities and Equipment Cavern Storage and Other Assets Under Construction Total Cost Balance at December 31, 2016 218 4,253 5,514 1,089 1,965 13,039 Additions and transfers 70 1,895 1,230 133 (1,428 ) 1,900 Acquisition (Note 6) 41 448 — — 123 612 Change in decommissioning provision — 63 (21 ) — — 42 Disposals and other — (9 ) (8 ) 1 (1 ) (17 ) Balance at December 31, 2017 329 6,650 6,715 1,223 659 15,576 Additions and transfers 12 531 469 231 291 1,534 Change in decommissioning provision — (10 ) 5 19 — 14 Disposals and other (1 ) (7 ) (30 ) 5 (11 ) (44 ) Balance at December 31, 2018 340 7,164 7,159 1,478 939 17,080 Depreciation Balance at December 31, 2016 7 966 575 160 — 1,708 Depreciation 2 136 148 48 — 334 Disposals and other — (6 ) (2 ) (4 ) — (12 ) Balance at December 31, 2017 9 1,096 721 204 — 2,030 Depreciation 3 142 164 55 — 364 Disposals and other — (17 ) (18 ) (9 ) — (44 ) Balance at December 31, 2018 12 1,221 867 250 — 2,350 Carrying amounts Balance at December 31, 2017 320 5,554 5,994 1,019 659 13,546 Balance at December 31, 2018 328 5,943 6,292 1,228 939 14,730 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets [Abstract] | |
Disclosure of reconciliation of changes in intangible assets and goodwill | Intangible Assets ($ millions) Goodwill Purchase and Sale Contracts and Other Customer Relationships Purchase Option Total Total Goodwill & Intangible Assets Cost Balance at December 31, 2016 2,097 212 488 277 977 3,074 Acquisition (Note 6) 1,774 — 151 — 151 1,925 Additions and other — 4 (1 ) — 3 3 Balance at December 31, 2017 3,871 216 638 277 1,131 5,002 Additions and other 7 11 1 — 12 19 Transfers — — — (277 ) (277 ) (277 ) Balance at December 31, 2018 3,878 227 639 — 866 4,744 Amortization Balance at December 31, 2016 — 127 113 — 240 240 Amortization — 18 30 — 48 48 Balance at December 31, 2017 — 145 143 — 288 288 Amortization — 19 28 — 47 47 Balance at December 31, 2018 — 164 171 — 335 335 Carrying amounts Balance at December 31, 2017 3,871 71 495 277 843 4,714 Balance at December 31, 2018 3,878 63 468 — 531 4,409 |
Disclosure of goodwill and intangible assets by segment | The aggregate carrying amount of intangible assets and goodwill allocated to each operating segment is as follows: As at December 31 ($ millions) 2018 2017 (1) Goodwill Intangible Assets Total Goodwill Intangible Assets Total Pipelines Division 1,897 278 2,175 1,891 290 2,181 Facilities Division 541 102 643 540 380 920 Marketing & New Ventures Division 1,440 131 1,571 1,440 153 1,593 Corporate — 20 20 — 20 20 3,878 531 4,409 3,871 843 4,714 (1) The allocation of goodwill and intangible assets have been restated with comparative operating segments. For the year ended December 31, 2018 Pipelines Division (1) Facilities Division Marketing & New Ventures Division (2) Corporate & Inter-Division Eliminations Total ($ millions) Revenue from external customers 1,464 1,166 4,721 — 7,351 Inter-Division revenue 124 302 — (426 ) — Total revenue (3) 1,588 1,468 4,721 (426 ) 7,351 Operating expenses 396 313 — (158 ) 551 Cost of goods sold, including product purchases — 462 4,335 (282 ) 4,515 Realized loss on commodity-related derivative financial instruments — — 51 — 51 Share of profit from equity accounted investees 279 30 102 — 411 Depreciation and amortization included in operations 216 149 26 — 391 Unrealized gain on commodity-related derivative financial instruments — — (73 ) — (73 ) Gross profit 1,255 574 484 14 2,327 Depreciation included in general and administrative — — — 26 26 Other general and administrative 26 17 41 169 253 Other expense — 5 12 10 27 Reportable segment results from operating activities 1,229 552 431 (191 ) 2,021 Net finance costs 9 6 16 248 279 Reportable segment earnings (loss) before tax 1,220 546 415 (439 ) 1,742 Capital expenditures 711 348 134 33 1,226 Contributions to equity accounted investees — 58 — — 58 (1) Pipelines Division transportation revenue includes $25 million associated with U.S. pipeline sales. (2) Marketing & New Ventures Division includes revenue of $240 million associated with U.S. midstream sales. (3) During the period, one customer accounted for 10 percent of total revenues, with $792 million reported throughout all segments. For the year ended December 31, 2017 (1) Pipelines Division (2) Facilities Division Marketing & New Ventures Division (3) Corporate & Inter-Division Eliminations Total ($ millions) Revenue from external customers 1,067 800 3,533 — 5,400 Inter-Division revenue 69 169 — (238 ) — Total revenue (4) 1,136 969 3,533 (238 ) 5,400 Operating expenses 330 227 — (107 ) 450 Cost of goods sold, including product purchases — 197 3,105 (140 ) 3,162 Realized loss on commodity-related derivative financial instruments 1 — 93 — 94 Share of profit from equity accounted investees 72 22 22 — 116 Depreciation and amortization included in operations 195 138 26 — 359 Unrealized gain on commodity-related derivative financial instruments (1 ) — (22 ) — (23 ) Gross profit 683 429 353 9 1,474 Depreciation included in general and administrative — — — 23 23 Other general and administrative 20 23 19 151 213 Other (income) expense (6 ) 11 1 22 28 Reportable segment results from operating activities 669 395 333 (187 ) 1,210 Net finance costs 10 12 7 156 185 Reportable segment earnings (loss) before tax 659 383 326 (343 ) 1,025 Capital expenditures 1,328 440 57 14 1,839 Contributions to equity accounted investees — 1 6 — 7 (1) Restated with comparative segments. (2) Pipelines Division transportation revenue includes $22 million associated with U.S. pipeline sales. (3) Marketing & New Ventures Division includes revenue of $215 million associated with U.S. midstream sales. (4) During the period, no one customer accounted for 10 percen t or more of total revenue. |
Disclosure of key assumptions used in goodwill impairment | The following summarizes the key assumptions used in the impairment test: Operating Segments 2018 Pipelines Division Facilities Division Marketing & New Ventures Division (Percent) Pre-tax discount rate 7.60 7.47 13.08 Adjusted inflation rate 1.22 1.61 1.80 Incremental increase in discount rate that would result in carrying value equal to recoverable amount Increase in pre-tax discount rate 3.60 4.87 4.75 |
INVESTMENTS IN EQUITY ACCOUNT_2
INVESTMENTS IN EQUITY ACCOUNTED INVESTEES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Interests In Other Entities [Abstract] | |
Disclosure of interests in joint ventures | Ownership Interest at December 31 Share of Profit from Equity Investments Investment in Equity Accounted Investees at December 31 12 Months Ended December 31 ($ millions) 2018 2017 2018 2017 2018 2017 Alliance 50 % 50 % 160 40 2,799 2,776 Aux Sable 42.7% - 50% 42.7% - 50% 102 22 480 449 Ruby Pipeline (1) 50% (1) 50% (1) 118 29 1,648 1,516 Veresen Midstream 45.3 % 46.3 % 26 22 1,324 1,365 Other 50% - 75% 50% - 75% 5 3 117 123 411 116 6,368 6,229 (1) Ownership interest in Ruby is presented as a 50 percent proportionate share with the benefit of a preferred distribution structure. Share of profit from equity accounted investees for Ruby is equal to the preferred interest distribution. Summarized combined financial information of equity accounted investees (presented at 100 percent) is as follows: For the years ended December 31 ($ millions) 2018 2017 Net Income and Comprehensive Income Revenue 3,605 870 Cost of sales (1,566 ) (377 ) General and administrative expense (171 ) (69 ) Depreciation and amortization (511 ) (131 ) Finance costs and other (308 ) (80 ) Net Income and Comprehensive Income 1,049 213 Net income and Comprehensive Income attributable to Pembina 411 116 As at December 31 ($ millions) 2018 2017 Balance Sheet Current assets 838 763 Non-current assets 11,667 11,420 Current liabilities 908 957 Non-current liabilities 5,262 4,978 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Disclosure of movement in components of deferred tax assets and liabilities | The movements of the components of the deferred tax assets and deferred tax liabilities are as follows: ($ millions) Balance at December 31, 2017 Recognized in Earnings Recognized in Other Comprehensive Income Acquisition Equity Other Balance at December 31, 2018 Deferred income tax assets Derivative financial instruments 11 (29 ) — — — — (18 ) Employee benefits 7 — 2 — — — 9 Share-based payments 21 5 — — — — 26 Provisions 153 3 — — — — 156 Benefit of loss carryforwards 180 (33 ) — (7 ) — 13 153 Other deductible temporary differences 56 16 — — (4 ) — 68 Deferred income tax liabilities Property, plant and equipment (1,361 ) (299 ) — — — — (1,660 ) Intangible assets (198 ) 80 — — — — (118 ) Investments in equity accounted investees (1,173 ) (89 ) — — — — (1,262 ) Taxable limited partnership income deferral (56 ) (66 ) — — — — (122 ) Other taxable temporary differences (16 ) 18 — — — (8 ) (6 ) Total deferred tax liabilities (2,376 ) (394 ) 2 (7 ) (4 ) 5 (2,774 ) ($ millions) Balance at December 31, 2016 Recognized in Earnings Recognized in Other Comprehensive Income Acquisition Equity Other Balance at December 31, 2017 Deferred income tax assets Derivative financial instruments 20 (9 ) — — — — 11 Employee benefits 8 — (1 ) — — — 7 Share-based payments 12 9 — — — — 21 Provisions 133 12 — 8 — — 153 Benefit of loss carryforwards 90 (57 ) — 137 — 10 180 Other deductible temporary differences 41 12 — 11 (3 ) (5 ) 56 Deferred income tax liabilities Property, plant and equipment (1,193 ) (243 ) — 75 — — (1,361 ) Intangible assets (150 ) (6 ) — (42 ) — — (198 ) Investments in equity accounted investees (6 ) 190 — (1,357 ) — — (1,173 ) Taxable limited partnership income deferral (25 ) 4 — (35 ) — — (56 ) Other taxable temporary differences (10 ) (6 ) — — — — (16 ) Total deferred tax liabilities (1,080 ) (94 ) (1 ) (1,203 ) (3 ) 5 (2,376 ) |
Disclosure of reconciliation of effective tax rate | The Company's consolidated statutory tax rate for the year ended December 31, 2018 was 27 percent ( 2017 : 27 percent). Reconciliation of effective tax rate For the years ended December 31 ($ millions, except as noted) 2018 2017 Earnings before income tax 1,742 1,025 Statutory tax rate 27 % 27 % Income tax at statutory rate 470 277 Tax rate changes on deferred income tax balances (1 ) 1 Changes in estimate and other (6 ) 18 U.S. Tax Reform — (166 ) Permanent items 1 12 Income tax expense 464 142 |
Disclosure of income tax expense | Income tax expense For the years ended December 31 ($ millions) 2018 2017 Current tax expense 70 48 Deferred tax expense Origination and reversal of temporary differences 378 286 Tax rate changes on deferred tax balances (1 ) (191 ) Decrease (increase) in tax loss carry forward 17 (1 ) Total deferred tax expense 394 94 Total income tax expense 464 142 |
Disclosure of deferred tax items recovered directly in equity | Deferred tax items recovered directly in equity For the years ended December 31 ($ millions) 2018 2017 Share issue costs (4 ) (3 ) Other comprehensive income (loss) 2 (1 ) Deferred tax items recovered directly in equity (2 ) (4 ) |
TRADE PAYABLES AND ACCRUED LI_2
TRADE PAYABLES AND ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Subclassifications of assets, liabilities and equities [abstract] | |
Disclosure of trade payables and accrued liabilities | As at December 31 ($ millions) 2018 2017 Trade payables 519 465 Other payables & accrued liabilities 284 212 Total current trade and accrued liabilities 803 677 |
LOANS AND BORROWINGS (Tables)
LOANS AND BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Financial Instruments [Abstract] | |
Disclosure of detailed information about borrowings | Carrying value, terms and conditions, and debt maturity schedule Carrying value ($ millions) Authorized at December 31, 2018 Nominal interest rate Year of maturity December 31, 2018 December 31, 2017 Senior unsecured credit facilities (1) 3,520 3.2 (2) Various (1) 1,305 1,778 Senior unsecured notes – series A 73 5.565 2020 76 — Senior unsecured notes – series C 200 5.58 2021 199 199 Senior unsecured notes – series D 267 5.91 2019 267 266 Alberta Ethane Gathering System LP senior notes — 5.565 2020 — 77 Senior unsecured medium-term notes series 1 250 4.89 2021 250 249 Senior unsecured medium-term notes series 2 450 3.77 2022 449 449 Senior unsecured medium-term notes series 3 450 4.75 2043 446 446 Senior unsecured medium-term notes series 4 600 4.81 2044 596 596 Senior unsecured medium-term notes series 5 450 3.54 2025 448 448 Senior unsecured medium-term notes series 6 500 4.24 2027 498 498 Senior unsecured medium-term notes series 7 500 3.71 2026 498 497 Senior unsecured medium-term notes series 8 650 2.99 2024 646 645 Senior unsecured medium-term notes series 9 550 4.74 2047 541 541 Senior unsecured medium-term notes series 10 400 4.02 2028 398 — Senior unsecured medium-term notes series 11 300 4.75 2048 298 — Senior unsecured medium-term notes 1A — 4.00 2018 — 152 Senior unsecured medium-term notes 3A 50 5.05 2022 50 52 Senior unsecured medium-term notes 4A 200 3.06 2019 205 207 Senior unsecured medium-term notes 5A 350 3.43 2021 353 354 Finance lease liabilities and other — 14 9 Total interest bearing liabilities 7,537 7,463 Less current portion (480 ) (163 ) Total non-current 7,057 7,300 (1) Pembina's unsecured credit facilities include a $2.5 billion revolving facility that matures May 2023, $1.0 billion non-revolving term loan facility that matures March 2021 and a $20 million operating facility that matures May 2019, which is typically renewed on an annual basis. (2) The nominal interest rate is the weighted average of all drawn credit facilities based on the Company's credit rating at December 31, 2018 . Borrowings under the credit facilities bear interest at prime, Bankers' Acceptance, or LIBOR rates, plus applicable margins. |
CONVERTIBLE DEBENTURES (Tables)
CONVERTIBLE DEBENTURES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Financial Instruments [Abstract] | |
Disclosure of convertible debentures | ($ millions, except as noted) Series F – 5.75% Conversion price (dollars per share) $29.53 Interest payable semi-annually in arrears on: June 30 and December 31 Maturity Date December 31, 2018 Balance at December 31, 2016 143 Conversions and redemptions (52 ) Unwinding of discount rate 1 Deferred financing fee (net of amortization) 1 Balance at December 31, 2017 93 Conversions and redemptions (93 ) Repayment at maturity (2 ) Unwinding of discount rate 1 Deferred financing fee (net of amortization) 1 Balance at December 31, 2018 — |
DECOMISSIONING PROVISION (Table
DECOMISSIONING PROVISION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Provisions, Contingent Liabilities And Contingent Assets [Abstract] | |
Disclosure of decommissioning provisions | ($ millions) 2018 2017 Balance at January 1 551 496 Unwinding of discount rate 12 12 Change in rates — 43 Acquisition — 10 Additions 18 33 Change in estimates and other (8 ) (43 ) Total 573 551 Less current portion (included in accrued liabilities) (4 ) (5 ) Balance at December 31 569 546 |
SHARE CAPITAL (Tables)
SHARE CAPITAL (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Share Capital, Reserves And Other Equity Interest [Abstract] | |
Disclosure of classes of share capital | Common Share Capital ($ millions, except as noted) Number of Common Shares (millions) Common Share Capital Balance at December 31, 2016 397 8,808 Issued, net of issue costs 99 4,356 Dividend reinvestment plan 4 148 Debenture conversions 2 73 Share-based payment transactions 1 62 Balance at December 31, 2017 503 13,447 Debenture conversions 3 140 Share-based payment transactions 2 75 Balance at December 31, 2018 508 13,662 Preferred Share Capital ($ millions, except as noted) Number of Preferred Shares (millions) Preferred Share Capital Balance at December 31, 2016 62 1,509 Class A, Series 15 Preferred shares issued, net of issue costs 8 178 Class A, Series 17 Preferred shares issued, net of issue costs 6 141 Class A, Series 19 Preferred shares issued, net of issue costs 8 203 Class A, Series 21 Preferred shares issued, net of issue costs 16 393 Balance at December 31, 2017 100 2,424 Preferred Shares issued, net of issue costs — (1 ) Balance at December 31, 2018 100 2,423 |
Disclosure of dividends | The following dividends were declared by the Company: For the years ended December 31 ($ millions) 2018 2017 Common shares Common shares $2.24 per qualifying share (2017: $2.04) 1,131 873 Preferred shares $1.062500 per qualifying Series 1 preferred share (2017: $1.062500) 11 11 $1.175000 per qualifying Series 3 preferred share (2017: $1.175000) 7 7 $1.250000 per qualifying Series 5 preferred share (2017: $1.250000) 12 12 $1.125000 per qualifying Series 7 preferred share (2017: $1.125000) 11 11 $1.187500 per qualifying Series 9 preferred share (2017: $1.187500) 11 11 $1.437500 per qualifying Series 11 preferred share (2017: $1.437500) 10 10 $1.437500 per qualifying Series 13 preferred share (2017: $1.437500) 14 14 $1.116000 per qualifying Series 15 preferred share (2017: $0.279000) 9 2 $1.250000 per qualifying Series 17 preferred share (2017: $0.312500) 8 2 $1.250000 per qualifying Series 19 preferred share (2017: $0.312500) 10 3 $1.200650 per qualifying Series 21 preferred share (2017: nil) 19 — 122 83 Pembina's Board of Directors also declared quarterly dividends for the Company's preferred shares as outlined in the following table: Series Record Date Payable Date Per Share Amount Dividend Amount ($ millions) Series 1 February 1, 2019 March 1, 2019 $0.306625 3 Series 3 February 1, 2019 March 1, 2019 $0.293750 2 Series 5 February 1, 2019 March 1, 2019 $0.312500 3 Series 7 February 1, 2019 March 1, 2019 $0.281250 3 Series 9 February 1, 2019 March 1, 2019 $0.296875 2 Series 11 February 1, 2019 March 1, 2019 $0.359375 2 Series 13 February 1, 2019 March 1, 2019 $0.359375 4 Series 15 March 15, 2019 April 1, 2019 $0.279000 2 Series 17 March 15, 2019 April 1, 2019 $0.312500 2 Series 19 March 15, 2019 April 1, 2019 $0.312500 3 Series 21 February 1, 2019 March 1, 2019 $0.306250 5 |
PERSONNEL EXPENSES (Tables)
PERSONNEL EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Analysis of income and expense [abstract] | |
Disclosure of personnel expenses | For the years ended December 31 ($ millions) 2018 2017 Salaries and wages 254 194 Share-based compensation expense (Note 23) 63 73 Short-term incentive plan 59 45 Pension plan expense 23 20 Health, savings plan and other benefits 21 18 420 350 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue From Contracts With Customers [Abstract] | |
Disclosure of disaggregation of revenue from contracts with customers | 2018 2017 For the years ended December 31 ($ millions) Pipelines Division Facilities Division Marketing & New Ventures Division Total Pipelines Division Facilities Division Marketing & New Ventures Division Total Take-or-Pay (1) 979 582 — 1,561 681 534 — 1,215 Fee-for-Service (1) 424 103 — 527 324 58 2 384 Product Sales (2) — 464 4,721 5,185 — 208 3,531 3,739 Revenue from contracts with customers 1,403 1,149 4,721 7,273 1,005 800 3,533 5,338 Lease and other revenue 61 17 — 78 62 — — 62 Total external revenue 1,464 1,166 4,721 7,351 1,067 800 3,533 5,400 (1) Revenue recognized over time. (2) Revenue recognized at a point in time. |
Disclosure of significant changes in contract assets and contract liabilities | Significant changes in the contract liabilities balances during the period are as follows: ($ millions) 2018 2017 Balance at January 1 157 81 Additions (net in the period) 38 99 Revenue recognized from contract liabilities (1) (27 ) (23 ) Closing balance 168 157 Less current portion (2) (37 ) (44 ) Balance at December 31 131 113 (1) Recognition of revenue related to performance obligations satisfied in the current period that were included in the opening balance of contract liabilities. (2) As at December 31, 2018 , the balance includes $9 million of cash collected under take-or-pay contracts which will be recognized in revenue by December 31, 2019 as the customer chooses to ship, process, or otherwise forego the associated service ( December 31, 2017 : $8 million ). |
NET FINANCE COSTS (Tables)
NET FINANCE COSTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Analysis of income and expense [abstract] | |
Disclosure of detailed information about net finance costs | For the years ended December 31 ($ millions) 2018 2017 Interest expense on financial liabilities measured at amortized cost: Loans and borrowings 268 162 Convertible debentures 6 9 Unwinding of discount rate 12 12 Gain in fair value of non-commodity-related derivative financial instruments (4 ) (8 ) Loss on revaluation of conversion feature of convertible debentures — 13 Foreign exchange gain and other (3 ) (3 ) Net finance costs 279 185 |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Operating Segments [Abstract] | |
Disclosure of operating segments | The aggregate carrying amount of intangible assets and goodwill allocated to each operating segment is as follows: As at December 31 ($ millions) 2018 2017 (1) Goodwill Intangible Assets Total Goodwill Intangible Assets Total Pipelines Division 1,897 278 2,175 1,891 290 2,181 Facilities Division 541 102 643 540 380 920 Marketing & New Ventures Division 1,440 131 1,571 1,440 153 1,593 Corporate — 20 20 — 20 20 3,878 531 4,409 3,871 843 4,714 (1) The allocation of goodwill and intangible assets have been restated with comparative operating segments. For the year ended December 31, 2018 Pipelines Division (1) Facilities Division Marketing & New Ventures Division (2) Corporate & Inter-Division Eliminations Total ($ millions) Revenue from external customers 1,464 1,166 4,721 — 7,351 Inter-Division revenue 124 302 — (426 ) — Total revenue (3) 1,588 1,468 4,721 (426 ) 7,351 Operating expenses 396 313 — (158 ) 551 Cost of goods sold, including product purchases — 462 4,335 (282 ) 4,515 Realized loss on commodity-related derivative financial instruments — — 51 — 51 Share of profit from equity accounted investees 279 30 102 — 411 Depreciation and amortization included in operations 216 149 26 — 391 Unrealized gain on commodity-related derivative financial instruments — — (73 ) — (73 ) Gross profit 1,255 574 484 14 2,327 Depreciation included in general and administrative — — — 26 26 Other general and administrative 26 17 41 169 253 Other expense — 5 12 10 27 Reportable segment results from operating activities 1,229 552 431 (191 ) 2,021 Net finance costs 9 6 16 248 279 Reportable segment earnings (loss) before tax 1,220 546 415 (439 ) 1,742 Capital expenditures 711 348 134 33 1,226 Contributions to equity accounted investees — 58 — — 58 (1) Pipelines Division transportation revenue includes $25 million associated with U.S. pipeline sales. (2) Marketing & New Ventures Division includes revenue of $240 million associated with U.S. midstream sales. (3) During the period, one customer accounted for 10 percent of total revenues, with $792 million reported throughout all segments. For the year ended December 31, 2017 (1) Pipelines Division (2) Facilities Division Marketing & New Ventures Division (3) Corporate & Inter-Division Eliminations Total ($ millions) Revenue from external customers 1,067 800 3,533 — 5,400 Inter-Division revenue 69 169 — (238 ) — Total revenue (4) 1,136 969 3,533 (238 ) 5,400 Operating expenses 330 227 — (107 ) 450 Cost of goods sold, including product purchases — 197 3,105 (140 ) 3,162 Realized loss on commodity-related derivative financial instruments 1 — 93 — 94 Share of profit from equity accounted investees 72 22 22 — 116 Depreciation and amortization included in operations 195 138 26 — 359 Unrealized gain on commodity-related derivative financial instruments (1 ) — (22 ) — (23 ) Gross profit 683 429 353 9 1,474 Depreciation included in general and administrative — — — 23 23 Other general and administrative 20 23 19 151 213 Other (income) expense (6 ) 11 1 22 28 Reportable segment results from operating activities 669 395 333 (187 ) 1,210 Net finance costs 10 12 7 156 185 Reportable segment earnings (loss) before tax 659 383 326 (343 ) 1,025 Capital expenditures 1,328 440 57 14 1,839 Contributions to equity accounted investees — 1 6 — 7 (1) Restated with comparative segments. (2) Pipelines Division transportation revenue includes $22 million associated with U.S. pipeline sales. (3) Marketing & New Ventures Division includes revenue of $215 million associated with U.S. midstream sales. (4) During the period, no one customer accounted for 10 percen t or more of total revenue. |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings per share [abstract] | |
Disclosure of earnings per common share | Earnings attributable to common shareholders For the years ended December 31 ($ millions) 2018 2017 Earnings 1,278 883 Dividends on preferred shares (122 ) (83 ) Cumulative dividends on preferred shares, not yet declared (3 ) (3 ) Basic earnings attributable to common shareholders 1,153 797 Effect of after-tax interest on debentures to earnings 4 6 Diluted earnings attributable to common shareholders 1,157 803 Weighted average number of common shares (In millions of shares, except as noted) 2018 2017 Issued common shares at January 1 503 397 Effect of shares issued on Acquisition — 25 Effect of shares issued on exercise of options 1 — Effect of conversion of convertible debentures 1 1 Effect of shares issued under dividend reinvestment plan — 3 Basic weighted average number of common shares at December 31 505 426 Dilutive effect of debentures converted 2 4 Dilutive effect of share options on issue 2 2 Diluted weighted average number of common shares at December 31 509 432 Basic earnings per common share (dollars) 2.28 1.87 Diluted earnings per common share (dollars) 2.28 1.86 |
PENSION PLAN (Tables)
PENSION PLAN (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Employee Benefits [Abstract] | |
Disclosure of obligations and plan assumptions | Principal actuarial assumptions used: As at December 31 (weighted average percent) 2018 2017 Discount rate 3.8 % 3.6 % Future pension earning increases 4.0 % 4.0 % Assumptions regarding future mortality are based on published statistics and mortality tables. The current longevities underlying the values of the liabilities in the defined plans are as follows: As at December 31 (years) 2018 2017 Longevity at age 65 for current pensioners Males 21.7 21.7 Females 24.1 24.1 Longevity at age 65 for current member aged 45 Males 22.8 22.8 Females 25.1 25.1 As at December 31 ($ millions) 2018 2017 Registered defined benefit net obligation 19 10 Supplemental defined benefit net obligation 12 11 Other accrued benefit obligations — 1 Net employee benefit obligations 31 22 |
Disclosure of analysis of present value of defined benefit obligations | Defined benefit obligations As at December 31 ($ millions) 2018 2017 Registered Plans Supplemental Plan Registered Plan Supplemental Plan Present value of unfunded obligations — 12 — 11 Present value of funded obligations 212 — 192 — Total present value of obligations 212 12 192 11 Fair value of plan assets 193 — 182 — Recognized liability for defined benefit obligations (19 ) (12 ) (10 ) (11 ) |
Disclosure of fair value of plan assets | Registered defined benefit pension plan assets comprise As at December 31 (Percent) 2018 2017 Equity securities 61 65 Debt 39 35 100 100 |
Disclosure of movement in benefit obligation and plan assets, recognized expenses, and actuarial gains and losses | Movement in the present value of the defined benefit pension obligation 2018 2017 ($ millions) Registered Plans Supplemental Plan Registered Plan Supplemental Plan Defined benefits obligations at January 1 192 11 180 10 Benefits paid by the plan (12 ) — (13 ) — Current service costs 14 1 14 — Interest expense 7 — 7 — Transfer from Younger 16 — — — Actuarial losses in other comprehensive income (5 ) — 4 1 Defined benefit obligations at December 31 212 12 192 11 Movement in the present value of registered defined benefit pension plan assets ($ millions) 2018 2017 Fair value of plan assets at January 1 182 164 Contributions paid into the plan 19 16 Benefits paid by the plan (12 ) (13 ) Return on plan assets (13 ) 8 Transfer from Younger 10 — Interest income 7 7 Fair value of registered plan assets at December 31 193 182 Expense recognition in earnings For the years ended December 31 ($ millions) 2018 2017 Registered Plan Current service costs 14 14 Interest on obligation 8 7 Expected return on plan assets (7 ) (7 ) 15 14 The expense is recognized in the following line items in the consolidated statement of comprehensive income: For the years ended December 31 ($ millions) 2018 2017 Registered Plan Operating expenses 8 7 General and administrative expense 7 7 15 14 Actuarial gains and losses recognized in other comprehensive income 2018 2017 ($ millions) Registered Plans Supplemental Plan Total Registered Plan Supplemental Plan Total Balance at January 1 (22 ) (1 ) (23 ) (25 ) (1 ) (26 ) Remeasurements: — Financial assumptions 3 — 3 (4 ) — (4 ) Experience adjustments — — — 1 — 1 Return on plan assets excluding interest income (9 ) — (9 ) 6 — 6 Recognized during the period after tax (6 ) — (6 ) 3 — 3 Balance at December 31 (28 ) (1 ) (29 ) (22 ) (1 ) (23 ) |
SHARE-BASED PAYMENTS (Tables)
SHARE-BASED PAYMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Share-based Payment Arrangements [Abstract] | |
Disclosure of terms and conditions of share-based payment arrangement | The terms and conditions relating to the grants of the share option program and the long-term share unit award incentive plans are listed in the tables below: Grant date share options granted to employees (thousands of options, except as noted) Number of options Contractual life of options March 7, 2017 1,697 7 May 16, 2017 64 7 August 14, 2017 868 7 October 11, 2017 40 7 November 14, 2017 784 7 December 8, 2017 77 7 March 6, 2018 1,993 7 May 14, 2018 310 7 July 10, 2018 424 7 August 15, 2018 961 7 October 10, 2018 94 7 November 13, 2018 939 7 December 31, 2018 34 7 One-third vest on the first anniversary of the grant date, one-third vest on the second anniversary of the grant date and one-third vest on the third anniversary of the grant date. Long-term share unit award incentive plan (1) Grant date RSUs, PSUs and DSUs to Officers, Non-Officers (2) and Directors (thousands of units, except as noted) PSUs (3) RSUs (3) DSUs Total January 1, 2017 307 303 32 642 January 1, 2018 404 395 44 843 PSUs vest on the third anniversary of the grant date. RSUs vest one-third on the first anniversary of the grant date, one-third on the second anniversary of the grant date and one-third on the third anniversary of the grant date. Actual units awarded are based on the trading value of the shares and performance of the Company. (1) Distribution Units are granted in addition to RSU and PSU grants based on notional accrued dividends from RSU and PSU granted but not paid. (2) Non-Officers defined as senior selected positions within the Company. (3) Contractual life of 3 years . |
Disclosure of number and weighted average exercise prices of share options | The number and weighted average exercise prices of share options as follows: (thousands of options, except as noted) Number of Options Weighted Average Exercise Price (dollars) Outstanding at December 31, 2016 14,310 $39.68 Granted 3,530 $43.28 Exercised (1,405 ) $33.03 Forfeited (502 ) $40.58 Expired (256 ) $47.15 Outstanding at December 31, 2017 15,677 $40.94 Granted 4,755 $43.86 Exercised (1,729 ) $35.34 Forfeited (523 ) $41.56 Expired (252 ) $49.2 Outstanding at December 31, 2018 17,928 $42.12 |
Disclosure of range of exercise prices of outstanding share options | As of December 31, 2018 , the following options are outstanding: (thousands of options, except as noted) Exercise Price (dollars) Number outstanding at December 31, 2018 Options Exercisable Weighted average remaining life $26.52 – $39.14 4,015 2,825 3.65 $39.15 – $41.55 4,000 1,690 4.93 $41.56 – $43.56 4,216 2,651 4.2 $43.57 – $46.00 2,571 285 6.41 $46.01 – $52.01 3,126 2,189 3.88 Total 17,928 9,640 4.50 |
Disclosure of number and weighted average remaining contractual life of outstanding share options | As of December 31, 2018 , the following options are outstanding: (thousands of options, except as noted) Exercise Price (dollars) Number outstanding at December 31, 2018 Options Exercisable Weighted average remaining life $26.52 – $39.14 4,015 2,825 3.65 $39.15 – $41.55 4,000 1,690 4.93 $41.56 – $43.56 4,216 2,651 4.2 $43.57 – $46.00 2,571 285 6.41 $46.01 – $52.01 3,126 2,189 3.88 Total 17,928 9,640 4.50 |
Disclosure of indirect measurement of fair value of goods or services received, share options granted during period | Share options granted For the years ended December 31 (dollars, except as noted) 2018 2017 Weighted average Fair value at grant date 3.86 4.49 Share price at grant date 43.67 43.13 Exercise price 43.86 43.28 Expected volatility (percent) 20.26 23.5 Expected option life (years) 3.67 3.67 Expected annual dividends per option 2.24 2.04 Expected forfeitures (percent) 6.7 6.1 Risk-free interest rate (based on government bonds) (percent) 2.1 1.2 |
Disclosure of employee share-based compensation expense | Employee expenses For the years ended December 31 ($ millions) 2018 2017 Share option plan, equity settled 14 16 Long-term share unit award incentive plan 49 57 Share-based compensation expense 63 73 Total carrying amount of liabilities for cash settled arrangements 96 79 Total intrinsic value of liability for vested benefits 57 36 |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Financial Instruments [Abstract] | |
Disclosure of aging of trade and other receivables | At December 31, the aging of trade and other receivables was as follows: Past Due 2018 2017 31-60 days past due 2 6 Greater than 61 days — — 2 6 |
Disclosure of how entity manages liquidity risk | Liquidity risk is the risk the Company will not be able to meet its financial obligations as they come due. The following are the contractual maturities of financial liabilities, including estimated interest payments. Outstanding balances due by period December 31, 2018 Carrying Amount Expected Cash Flows Less Than 1 Year 1 - 3 Years 3 - 5 Years More Than 5 Years ($ millions) Trade payables and accrued liabilities 803 803 803 — — — Taxes payable 82 82 67 3 4 8 Loans and borrowings 7,537 10,794 724 2,334 1,183 6,553 Dividends payable 97 97 97 — — — Derivative financial liabilities 6 6 6 — — — Finance leases 23 23 9 11 3 — |
Disclosure of financial instruments by type of interest rate | At the reporting date, the interest rate profile of the Company's interest-bearing financial instruments was: As at December 31 ($ millions) 2018 2017 Carrying Amounts of Financial Liability Fixed rate instruments 6,232 5,685 Variable rate instruments (1) 1,305 1,778 7,537 7,463 (1) At December 31, 2018 , the Company held no positions in financial derivative contracts to fix interest rates (December 31, 2017: $100 million |
Disclosure of cash flow sensitivity analysis for variable rate instruments | A change of 100 basis points in interest rates at the reporting date would have (increased) decreased earnings by the amounts shown below. This analysis assumes that all other variables remain constant. As at December 31 ($ millions) 2018 2017 ± 100 bp ± 100 bp Variable rate instruments ±13 ±18 Interest rate swap ±0 ±1 Earnings sensitivity (net) ±13 ±17 |
Disclosure of fair value and carrying amounts of financial assets | The fair values of financial assets and liabilities, together with the carrying amounts shown in the Consolidated Statements of Financial Position, are as follows: 2018 2017 As at December 31 Carrying Fair Value (3) Carrying value Fair Value (3) ($ millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Financial assets carried at fair value Derivative financial instruments 54 — 54 — 4 — 4 — Advances to related parties 58 — — 58 — — — — 112 — 54 58 4 — 4 — Financial assets carried at amortized cost Cash and cash equivalents 157 157 — — 321 321 — — Trade receivables and other 604 604 — — 529 529 — — Advances to related parties 77 — 77 — 42 — 42 — Other assets 9 — 9 — 13 — 13 — 847 761 86 — 905 850 55 — Financial liabilities carried at fair value Derivative financial instruments (1) 6 — 6 — 79 — 79 — Financial liabilities carried at amortized cost Trade payables and accrued liabilities 803 803 — — 677 677 — — Taxes payable (1) 82 82 — — 25 25 — — Dividends payable 97 97 — — 91 91 — — Loans and borrowings (1) 7,537 — 7,588 — 7,463 — 7,686 — Convertible debentures (2) — — — — 93 145 — — 8,519 982 7,588 — 8,349 938 7,686 — (1) Carrying value of current and non-current balances. (2) Carrying value excludes conversion feature of convertible debentures. (3) The basis for determining fair value is disclosed in Note 5. The following table is a summary of the net derivative financial instruments, which is consistent with the gross balances: 2018 2017 As at December 31 ($ millions) Current Asset Non-Current Asset Current Liability Non-Current Liability Total Current Asset Non-Current Asset Current Liability Non-Current Liability Total Commodity, power, storage and rail financial instruments 44 — (2 ) — 42 4 — (31 ) — (27 ) Interest rate — — — — — — — (2 ) — (2 ) Foreign exchange 10 — (4 ) — 6 — — — — — Conversion feature of convertible debentures (Note 14) — — — — — — — (46 ) — (46 ) Net derivative financial instruments 54 — (6 ) — 48 4 — (79 ) — (75 ) |
Disclosure of fair value and carrying amounts of financial liabilities | The fair values of financial assets and liabilities, together with the carrying amounts shown in the Consolidated Statements of Financial Position, are as follows: 2018 2017 As at December 31 Carrying Fair Value (3) Carrying value Fair Value (3) ($ millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Financial assets carried at fair value Derivative financial instruments 54 — 54 — 4 — 4 — Advances to related parties 58 — — 58 — — — — 112 — 54 58 4 — 4 — Financial assets carried at amortized cost Cash and cash equivalents 157 157 — — 321 321 — — Trade receivables and other 604 604 — — 529 529 — — Advances to related parties 77 — 77 — 42 — 42 — Other assets 9 — 9 — 13 — 13 — 847 761 86 — 905 850 55 — Financial liabilities carried at fair value Derivative financial instruments (1) 6 — 6 — 79 — 79 — Financial liabilities carried at amortized cost Trade payables and accrued liabilities 803 803 — — 677 677 — — Taxes payable (1) 82 82 — — 25 25 — — Dividends payable 97 97 — — 91 91 — — Loans and borrowings (1) 7,537 — 7,588 — 7,463 — 7,686 — Convertible debentures (2) — — — — 93 145 — — 8,519 982 7,588 — 8,349 938 7,686 — (1) Carrying value of current and non-current balances. (2) Carrying value excludes conversion feature of convertible debentures. (3) The basis for determining fair value is disclosed in Note 5. The following table is a summary of the net derivative financial instruments, which is consistent with the gross balances: 2018 2017 As at December 31 ($ millions) Current Asset Non-Current Asset Current Liability Non-Current Liability Total Current Asset Non-Current Asset Current Liability Non-Current Liability Total Commodity, power, storage and rail financial instruments 44 — (2 ) — 42 4 — (31 ) — (27 ) Interest rate — — — — — — — (2 ) — (2 ) Foreign exchange 10 — (4 ) — 6 — — — — — Conversion feature of convertible debentures (Note 14) — — — — — — — (46 ) — (46 ) Net derivative financial instruments 54 — (6 ) — 48 4 — (79 ) — (75 ) |
Disclosure of discount rates used to determine fair value of liabilities | The interest rates used to discount estimated cash flows, when applicable, are based on the government yield curve at the reporting date plus and adequate credit spread, and were as follows: As at December 31 (percent) 2018 2017 Derivatives 2.2 - 2.3 1.4 - 1.8 Loans and borrowings 2.6 - 5.6 2.0 - 4.7 |
Disclosure of type of risk sensitivity analysis | As at December 31, 2018 ($ millions) + Change - Change Frac spread related Natural gas (AECO +/- $0.25 per GJ) 2 (2 ) NGL (includes propane, butane and condensate) (Belvieu/Conway +/- U.S. $0.10 per gal) (9 ) 9 Foreign exchange (US$ vs. C$) (FX rate +/- $0.10) 13 (13 ) Product margin Crude oil (WTI +/- $2.50 per bbl) (3 ) 3 NGL (includes propane, butane and condensate) (Belvieu/Conway +/- U.S. $0.10 per gal) N/A N/A Corporate (1) Interest rates (Rate +/- 50 basis points) — — (1) As at December 31, 2018 , there were no outstanding financial derivative contracts related to power and interest rates. |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Leases1 [Abstract] | |
Disclosure of operating lease revenues as lessor | Operating lease revenues are receivable as follows: As at December 31 ($ millions) 2018 2017 Less than 1 year 80 62 Between 1 and 5 years 376 246 More than 5 years 899 702 1,355 1,010 |
GROUP ENTITIES (Tables)
GROUP ENTITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Interests In Other Entities [Abstract] | |
Disclosure of interests in subsidiaries | As at December 31 Ownership Interest (percentages) 2018 2017 Pembina Pipeline 100 100 Pembina Gas Services Limited Partnership 100 100 Pembina Oil Sands Pipeline L.P. 100 100 Pembina Midstream Limited Partnership 100 100 Pembina Infrastructure and Logistics L.P. 100 100 Pembina Holding Canada L.P. 100 100 Pembina U.S. Corporation 100 100 |
RELATED PARTIES (Tables)
RELATED PARTIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party [Abstract] | |
Disclosure of transactions between related parties | ($ millions) Transaction value year ended December 31 Post-employment benefit plan Transaction 2018 2017 Defined benefit plan Funding 19 16 A summary of the significant related party transactions are as follows: Equity accounted investees ($ millions) 2018 2017 For the years ended December 31: Services provided 42 8 Interest income 6 1 As at December 31: Advances to related parties (1) 135 42 Trade receivables and other 12 5 (1) Includes $58 million (2017: $13 million) in advances to Canada Kuwait Petrochemical Corporation ("CKPC") convertible to shares at the Company's discretion and $75 million (2017: $29 million) in advances to Ruby Pipeline, L.L.C. |
Disclosure of key management personnel compensation | Key management personnel compensation comprised: For the years ended December 31 ($ millions) 2018 2017 Short-term employee benefits 10 8 Share-based compensation and other 13 7 Total compensation of key management 23 15 |
COMMITMENTS, CONTINGENCIES AN_2
COMMITMENTS, CONTINGENCIES AND GUARANTEES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Provisions, Contingent Liabilities And Contingent Assets [Abstract] | |
Disclosure of contingent liabilities | Pembina had the following contractual obligations outstanding at December 31, 2018 : Payments Due By Period Contractual Obligations ($ millions) Total Less than 1 year 1 – 3 years 3 – 5 years After 5 years Leases and other (1) 796 118 220 163 295 Loans and borrowings (2) 10,794 724 2,334 1,183 6,553 Construction commitments (3) 1,001 643 34 19 305 Advances to related parties (4) 96 96 — — — Total contractual obligations 12,687 1,581 2,588 1,365 7,153 (1) Includes office space, surface land, vehicles and rail car leases. (2) Excluding deferred financing costs. Including interest payments on senior unsecured notes. (3) Excluding significant projects that are awaiting regulatory approval at December 31, 2018 and for which Pembina is not committed to construct. (4) The Company has a contractual commitment to advance $96 million ( US$70 million ) to the Company's jointly controlled investment, Ruby Pipeline, L.L.C. by March 28, 2019 . |
CHANGES IN ACCOUNTING POLICIE_2
CHANGES IN ACCOUNTING POLICIES - Consolidated Financial Statement Impacts (Details) - CAD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Balance Sheet | ||
Trade payables and accrued liabilities | $ 803 | $ 677 |
Contract liabilities | 37 | 44 |
Deficit | (2,083) | |
Profit or loss [abstract] | ||
Revenue | 7,351 | 5,400 |
Earnings before income tax | 1,742 | 1,025 |
Earnings | $ 1,278 | $ 883 |
Basic earnings per common share (in CAD per share) | $ 2.28 | $ 1.87 |
Diluted earnings per common share (in CAD per share) | $ 2.28 | $ 1.86 |
Statement of cash flows [abstract] | ||
Earnings | $ 1,278 | $ 883 |
Net change in contract liabilities | 11 | 41 |
Cash flow from operating activities | $ 2,256 | 1,513 |
Previously Reported | IFRS 15 | ||
Balance Sheet | ||
Trade payables and accrued liabilities | 713 | |
Contract liabilities | 0 | |
Deficit | (2,075) | |
Profit or loss [abstract] | ||
Revenue | 5,408 | |
Earnings before income tax | 1,033 | |
Earnings | $ 891 | |
Basic earnings per common share (in CAD per share) | $ 1.89 | |
Diluted earnings per common share (in CAD per share) | $ 1.88 | |
Statement of cash flows [abstract] | ||
Earnings | $ 891 | |
Net change in contract liabilities | 33 | |
Cash flow from operating activities | 1,513 | |
Adjustments | IFRS 15 | ||
Balance Sheet | ||
Trade payables and accrued liabilities | (36) | |
Contract liabilities | 44 | |
Deficit | (8) | |
Profit or loss [abstract] | ||
Revenue | (8) | |
Earnings before income tax | (8) | |
Earnings | $ (8) | |
Basic earnings per common share (in CAD per share) | $ (0.02) | |
Diluted earnings per common share (in CAD per share) | $ (0.02) | |
Statement of cash flows [abstract] | ||
Earnings | $ (8) | |
Net change in contract liabilities | 8 | |
Cash flow from operating activities | $ 0 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - Future Adoption Of New Accounting Standard - IFRS 16 $ in Millions | Jan. 01, 2019CAD ($) |
Disclosure of expected impact of initial application of new standards or interpretations [line items] | |
Lease liabilities | $ 400 |
Right-of-use assets | $ 400 |
DETERMINATION OF FAIR VALUES (D
DETERMINATION OF FAIR VALUES (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurement [Abstract] | |
Period of measure for calculating weighted average share price of share options | 20 days |
ACQUISITION - Narrative (Detail
ACQUISITION - Narrative (Details) shares in Thousands, $ in Millions | Oct. 02, 2017CAD ($)shares | Dec. 31, 2017CAD ($) | Dec. 31, 2018CAD ($) | Dec. 31, 2017CAD ($) |
Disclosure of detailed information about business combination [line items] | ||||
Repayments of borrowings | $ 1,998 | $ 1,279 | ||
Veresen | ||||
Disclosure of detailed information about business combination [line items] | ||||
Purchase price consideration | $ 6,400 | |||
Cash consideration | 1,522 | |||
Repayments of borrowings | $ 152 | |||
Acquisition-related costs for transaction recognised separately from acquisition of assets and assumption of liabilities in business combination | $ 25 | |||
Revenue of acquiree since acquisition date | 15 | |||
Earnings of acquiree since acquisition date | $ 111 | |||
Revenue of combined entity as if combination occurred at beginning of period | 44 | |||
Earnings of combined entity as if combination occurred at beginning of period | $ 247 | |||
Subsequent recognition of deferred tax liabilities, goodwill | $ 7 | |||
Ordinary shares | Veresen | ||||
Disclosure of detailed information about business combination [line items] | ||||
Equity interests of acquirer (in shares) | shares | 99,466 | |||
Equity interests of acquirer | $ 4,356 | |||
Preferred share capital | Veresen | ||||
Disclosure of detailed information about business combination [line items] | ||||
Equity interests of acquirer | $ 522 |
ACQUISITION - Purchase Price Co
ACQUISITION - Purchase Price Consideration (Details) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Oct. 02, 2017 |
Purchase Price Consideration | |||
Goodwill | $ 3,878 | $ 3,871 | |
Veresen | |||
Purchase Price Consideration | |||
Cash | $ 1,522 | ||
Purchase Price Consideration | 6,400 | ||
Current assets | 303 | ||
Investments in jointly controlled businesses | 6,115 | ||
Property, plant and equipment | 612 | ||
Intangible assets & other long term assets | 175 | ||
Goodwill | 1,781 | ||
Current liabilities | (192) | ||
Long term debt | (993) | ||
Deferred tax liabilities | (1,210) | ||
Decommissioning provision | (10) | ||
Other long term liabilities | (121) | ||
Non-controlling interest | (60) | ||
Identifiable assets acquired (liabilities assumed) | 6,400 | ||
Veresen | Common shares | |||
Purchase Price Consideration | |||
Equity interests of acquirer | 4,356 | ||
Veresen | Preferred shares | |||
Purchase Price Consideration | |||
Equity interests of acquirer | $ 522 |
TRADE RECEIVABLES AND OTHER (De
TRADE RECEIVABLES AND OTHER (Details) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Subclassifications of assets, liabilities and equities [abstract] | ||
Trade receivables from customers | $ 178 | $ 178 |
Other receivables | 411 | 335 |
Prepayments | 16 | 17 |
Impairment loss allowance | (1) | (1) |
Total trade receivables and other | $ 604 | $ 529 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Property Types (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment, beginning balance | $ 13,546 | |
Property, plant and equipment, ending balance | 14,730 | $ 13,546 |
Cost | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment, beginning balance | 15,576 | 13,039 |
Additions and transfers | 1,534 | 1,900 |
Acquisition (Note 6) | 612 | |
Change in decommissioning provision | 14 | 42 |
Disposals and other | (44) | (17) |
Property, plant and equipment, ending balance | 17,080 | 15,576 |
Depreciation | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment, beginning balance | 2,030 | 1,708 |
Depreciation | 364 | 334 |
Disposals and other | (44) | (12) |
Property, plant and equipment, ending balance | 2,350 | 2,030 |
Land and Land Rights | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment, beginning balance | 320 | |
Property, plant and equipment, ending balance | 328 | 320 |
Land and Land Rights | Cost | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment, beginning balance | 329 | 218 |
Additions and transfers | 12 | 70 |
Acquisition (Note 6) | 41 | |
Change in decommissioning provision | 0 | 0 |
Disposals and other | (1) | 0 |
Property, plant and equipment, ending balance | 340 | 329 |
Land and Land Rights | Depreciation | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment, beginning balance | 9 | 7 |
Depreciation | 3 | 2 |
Disposals and other | 0 | 0 |
Property, plant and equipment, ending balance | 12 | 9 |
Pipelines | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment, beginning balance | 5,554 | |
Property, plant and equipment, ending balance | 5,943 | 5,554 |
Pipelines | Cost | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment, beginning balance | 6,650 | 4,253 |
Additions and transfers | 531 | 1,895 |
Acquisition (Note 6) | 448 | |
Change in decommissioning provision | (10) | 63 |
Disposals and other | (7) | (9) |
Property, plant and equipment, ending balance | 7,164 | 6,650 |
Pipelines | Depreciation | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment, beginning balance | 1,096 | 966 |
Depreciation | 142 | 136 |
Disposals and other | (17) | (6) |
Property, plant and equipment, ending balance | 1,221 | 1,096 |
Facilities and Equipment | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment, beginning balance | 5,994 | |
Property, plant and equipment, ending balance | 6,292 | 5,994 |
Facilities and Equipment | Cost | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment, beginning balance | 6,715 | 5,514 |
Additions and transfers | 469 | 1,230 |
Acquisition (Note 6) | 0 | |
Change in decommissioning provision | 5 | (21) |
Disposals and other | (30) | (8) |
Property, plant and equipment, ending balance | 7,159 | 6,715 |
Facilities and Equipment | Depreciation | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment, beginning balance | 721 | 575 |
Depreciation | 164 | 148 |
Disposals and other | (18) | (2) |
Property, plant and equipment, ending balance | 867 | 721 |
Cavern Storage and Other | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment, beginning balance | 1,019 | |
Property, plant and equipment, ending balance | 1,228 | 1,019 |
Cavern Storage and Other | Cost | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment, beginning balance | 1,223 | 1,089 |
Additions and transfers | 231 | 133 |
Acquisition (Note 6) | 0 | |
Change in decommissioning provision | 19 | 0 |
Disposals and other | 5 | 1 |
Property, plant and equipment, ending balance | 1,478 | 1,223 |
Cavern Storage and Other | Depreciation | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment, beginning balance | 204 | 160 |
Depreciation | 55 | 48 |
Disposals and other | (9) | (4) |
Property, plant and equipment, ending balance | 250 | 204 |
Assets Under Construction | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment, beginning balance | 659 | |
Property, plant and equipment, ending balance | 939 | 659 |
Assets Under Construction | Cost | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment, beginning balance | 659 | 1,965 |
Additions and transfers | 291 | (1,428) |
Acquisition (Note 6) | 123 | |
Change in decommissioning provision | 0 | 0 |
Disposals and other | (11) | (1) |
Property, plant and equipment, ending balance | 939 | 659 |
Assets Under Construction | Depreciation | ||
Reconciliation of changes in property, plant and equipment [abstract] | ||
Property, plant and equipment, beginning balance | 0 | 0 |
Depreciation | 0 | 0 |
Disposals and other | 0 | 0 |
Property, plant and equipment, ending balance | $ 0 | $ 0 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT - Narrative (Details) - CAD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of detailed information about property, plant and equipment [line items] | |||
Property, plant and equipment | $ 14,730 | $ 13,546 | |
Capitalized borrowing costs | $ 35 | $ 63 | |
Minimum | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Capitalized borrowing costs, capitalization rate | 3.86% | 3.87% | |
Maximum | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Capitalized borrowing costs, capitalization rate | 4.01% | 4.39% | |
Construction in progress | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Property, plant and equipment | $ 939 | $ 659 | |
Pipeline Assets | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Property, plant and equipment | $ 5,943 | 5,554 | |
Pipeline Assets | Minimum | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Useful life | 4 years | ||
Pipeline Assets | Maximum | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Useful life | 75 years | ||
Pipeline Assets | Average | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Useful life | 40 years | ||
Facilities and Equipment | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Property, plant and equipment | $ 6,292 | 5,994 | |
Facilities and Equipment | Minimum | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Useful life | 4 years | ||
Facilities and Equipment | Maximum | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Useful life | 75 years | ||
Facilities and Equipment | Average | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Useful life | 40 years | ||
Cavern Storage and Other | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Property, plant and equipment | $ 1,228 | 1,019 | |
Cavern Storage and Other | Minimum | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Useful life | 3 years | ||
Cavern Storage and Other | Maximum | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Useful life | 40 years | ||
Cavern Storage and Other | Average | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Useful life | 40 years | ||
Gross carrying amount | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Property, plant and equipment | $ 17,080 | 15,576 | $ 13,039 |
Gross carrying amount | Construction in progress | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Property, plant and equipment | 939 | 659 | 1,965 |
Gross carrying amount | Pipeline Assets | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Property, plant and equipment | 7,164 | 6,650 | 4,253 |
Gross carrying amount | Facilities and Equipment | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Property, plant and equipment | 7,159 | 6,715 | 5,514 |
Gross carrying amount | Cavern Storage and Other | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Property, plant and equipment | $ 1,478 | $ 1,223 | $ 1,089 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL - Intangible Assets and Goodwill (Details) - CAD ($) $ in Millions | Apr. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Reconciliation of changes in intangible assets and goodwill [abstract] | |||
Intangible assets and goodwill, beginning balance | $ 4,714 | ||
Intangible assets and goodwill, ending balance | $ 4,409 | $ 4,714 | |
Minimum | |||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||
Finite-lived intangible asset, useful life | 2 years | ||
Maximum | |||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||
Finite-lived intangible asset, useful life | 60 years | ||
Cost | |||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||
Intangible assets and goodwill, beginning balance | $ 5,002 | 3,074 | |
Acquisitions | 1,925 | ||
Additions and other | 19 | 3 | |
Transfers | (277) | ||
Intangible assets and goodwill, ending balance | 4,744 | 5,002 | |
Amortization | |||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||
Intangible assets and goodwill, beginning balance | 288 | 240 | |
Amortization | 47 | 48 | |
Intangible assets and goodwill, ending balance | 335 | 288 | |
Goodwill | |||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||
Intangible assets and goodwill, beginning balance | 3,871 | ||
Intangible assets and goodwill, ending balance | 3,878 | 3,871 | |
Goodwill | Cost | |||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||
Intangible assets and goodwill, beginning balance | 3,871 | 2,097 | |
Acquisitions | 1,774 | ||
Additions and other | 7 | 0 | |
Transfers | 0 | ||
Intangible assets and goodwill, ending balance | 3,878 | 3,871 | |
Goodwill | Amortization | |||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||
Intangible assets and goodwill, beginning balance | 0 | 0 | |
Intangible assets and goodwill, ending balance | 0 | 0 | |
Purchase and Sale Contracts and Other | |||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||
Intangible assets and goodwill, beginning balance | 71 | ||
Intangible assets and goodwill, ending balance | 63 | 71 | |
Purchase and Sale Contracts and Other | Cost | |||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||
Intangible assets and goodwill, beginning balance | 216 | 212 | |
Acquisitions | 0 | ||
Additions and other | 11 | 4 | |
Transfers | 0 | ||
Intangible assets and goodwill, ending balance | 227 | 216 | |
Purchase and Sale Contracts and Other | Amortization | |||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||
Intangible assets and goodwill, beginning balance | 145 | 127 | |
Amortization | 19 | 18 | |
Intangible assets and goodwill, ending balance | 164 | 145 | |
Customer Relationships | |||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||
Intangible assets and goodwill, beginning balance | 495 | ||
Intangible assets and goodwill, ending balance | 468 | 495 | |
Customer Relationships | Cost | |||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||
Intangible assets and goodwill, beginning balance | 638 | 488 | |
Acquisitions | 151 | ||
Additions and other | 1 | (1) | |
Transfers | 0 | ||
Intangible assets and goodwill, ending balance | 639 | 638 | |
Customer Relationships | Amortization | |||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||
Intangible assets and goodwill, beginning balance | 143 | 113 | |
Amortization | 28 | 30 | |
Intangible assets and goodwill, ending balance | 171 | 143 | |
Purchase Option | |||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||
Intangible assets and goodwill, beginning balance | 277 | ||
Intangible assets and goodwill, ending balance | 0 | 277 | |
Purchase Option | Cost | |||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||
Intangible assets and goodwill, beginning balance | 277 | 277 | |
Acquisitions | 0 | ||
Additions and other | 0 | 0 | |
Transfers | $ (277) | (277) | |
Intangible assets and goodwill, ending balance | 0 | 277 | |
Purchase Option | Amortization | |||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||
Intangible assets and goodwill, beginning balance | 0 | 0 | |
Amortization | 0 | 0 | |
Intangible assets and goodwill, ending balance | 0 | 0 | |
Intangible Assets | |||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||
Intangible assets and goodwill, beginning balance | 843 | ||
Intangible assets and goodwill, ending balance | 531 | 843 | |
Intangible Assets | Cost | |||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||
Intangible assets and goodwill, beginning balance | 1,131 | 977 | |
Acquisitions | 151 | ||
Additions and other | 12 | 3 | |
Transfers | (277) | ||
Intangible assets and goodwill, ending balance | 866 | 1,131 | |
Intangible Assets | Amortization | |||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||
Intangible assets and goodwill, beginning balance | 288 | 240 | |
Amortization | 47 | 48 | |
Intangible assets and goodwill, ending balance | $ 335 | $ 288 |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL - Intangible Assets and Goodwill by Segment (Details) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of operating segments [line items] | ||
Goodwill | $ 3,878 | $ 3,871 |
Intangible Assets | 531 | 843 |
Total | 4,409 | 4,714 |
Operating segments | Pipelines Division | ||
Disclosure of operating segments [line items] | ||
Goodwill | 1,897 | 1,891 |
Intangible Assets | 278 | 290 |
Total | 2,175 | 2,181 |
Operating segments | Facilities Division | ||
Disclosure of operating segments [line items] | ||
Goodwill | 541 | 540 |
Intangible Assets | 102 | 380 |
Total | 643 | 920 |
Operating segments | Marketing & New Ventures Division | ||
Disclosure of operating segments [line items] | ||
Goodwill | 1,440 | 1,440 |
Intangible Assets | 131 | 153 |
Total | 1,571 | 1,593 |
Corporate | ||
Disclosure of operating segments [line items] | ||
Goodwill | 0 | 0 |
Intangible Assets | 20 | 20 |
Total | $ 20 | $ 20 |
INTANGIBLE ASSETS AND GOODWIL_4
INTANGIBLE ASSETS AND GOODWILL - Key Assumptions of Goodwill Impairment (Details) - Goodwill | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items] | ||
Period of business plan used in cash flows estimate of value in use | 5 years | 4 years |
Period of cash flows used in long-term growth estimate of value in use | 75 years | 75 years |
Pipelines Division | ||
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items] | ||
Pre-tax discount rate | 7.60% | |
Adjusted inflation rate | 1.22% | |
Increase in pre-tax discount rate | 3.60% | |
Facilities Division | ||
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items] | ||
Pre-tax discount rate | 7.47% | |
Adjusted inflation rate | 1.61% | |
Increase in pre-tax discount rate | 4.87% | |
Marketing & New Ventures Division | ||
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items] | ||
Pre-tax discount rate | 13.08% | |
Adjusted inflation rate | 1.80% | |
Increase in pre-tax discount rate | 4.75% |
INVESTMENTS IN EQUITY ACCOUNT_3
INVESTMENTS IN EQUITY ACCOUNTED INVESTEES - Investment Interest (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of joint ventures [line items] | ||
Share of Profit from Equity Investments | $ 411 | $ 116 |
Investments in Equity Accounted Investees | $ 6,368 | $ 6,229 |
Alliance | ||
Disclosure of joint ventures [line items] | ||
Ownership Interest at December 31 | 50.00% | 50.00% |
Share of Profit from Equity Investments | $ 160 | $ 40 |
Investments in Equity Accounted Investees | 2,799 | 2,776 |
Aux Sable | ||
Disclosure of joint ventures [line items] | ||
Share of Profit from Equity Investments | 102 | 22 |
Investments in Equity Accounted Investees | $ 480 | $ 449 |
Aux Sable | Minimum | ||
Disclosure of joint ventures [line items] | ||
Ownership Interest at December 31 | 42.70% | 42.70% |
Aux Sable | Maximum | ||
Disclosure of joint ventures [line items] | ||
Ownership Interest at December 31 | 50.00% | 50.00% |
Ruby Pipeline | ||
Disclosure of joint ventures [line items] | ||
Ownership Interest at December 31 | 50.00% | 50.00% |
Share of Profit from Equity Investments | $ 118 | $ 29 |
Investments in Equity Accounted Investees | $ 1,648 | $ 1,516 |
Veresen Midstream | ||
Disclosure of joint ventures [line items] | ||
Ownership Interest at December 31 | 45.30% | 46.30% |
Share of Profit from Equity Investments | $ 26 | $ 22 |
Investments in Equity Accounted Investees | 1,324 | 1,365 |
Other | ||
Disclosure of joint ventures [line items] | ||
Share of Profit from Equity Investments | 5 | 3 |
Investments in Equity Accounted Investees | $ 117 | $ 123 |
Other | Minimum | ||
Disclosure of joint ventures [line items] | ||
Ownership Interest at December 31 | 50.00% | 50.00% |
Other | Maximum | ||
Disclosure of joint ventures [line items] | ||
Ownership Interest at December 31 | 75.00% | 75.00% |
INVESTMENTS IN EQUITY ACCOUNT_4
INVESTMENTS IN EQUITY ACCOUNTED INVESTEES - Narrative (Details) $ in Millions, $ in Millions | 12 Months Ended | |||||
Dec. 31, 2018CAD ($) | Dec. 31, 2017CAD ($) | Dec. 31, 2018USD ($) | Apr. 30, 2018USD ($) | Apr. 20, 2018CAD ($) | Mar. 29, 2018USD ($) | |
Disclosure of joint ventures [line items] | ||||||
Goodwill | $ 3,878 | $ 3,871 | ||||
Property, plant and equipment | 14,730 | 13,546 | ||||
Long-term debt | 7,057 | 7,300 | ||||
Investments in equity accounted investees | 6,368 | 6,229 | ||||
Exchange gain on translation of foreign operations | 330 | 1 | ||||
Distributions from equity accounted investees | (622) | (157) | ||||
Contributions to equity accounted investees | 58 | 7 | ||||
Joint ventures | ||||||
Disclosure of joint ventures [line items] | ||||||
Goodwill | 98 | 90 | ||||
Property, plant and equipment | 3,000 | 3,100 | ||||
Long-term debt | 52 | 87 | ||||
Investments in equity accounted investees | $ 2,600 | |||||
Exchange gain on translation of foreign operations | 295 | 16 | ||||
Distributions from equity accounted investees | (622) | (157) | ||||
Contributions to equity accounted investees | 58 | 7 | ||||
Ruby Pipeline | ||||||
Disclosure of joint ventures [line items] | ||||||
Investments in equity accounted investees | $ 1,648 | $ 1,516 | ||||
Proportion of ownership interest in joint venture | 50.00% | 50.00% | ||||
Term Loan | Ruby Pipeline | ||||||
Disclosure of joint ventures [line items] | ||||||
Quarterly amortization amount | $ 8 | |||||
Bullet payment due at maturity | 70 | |||||
Ruby Pipeline | Term Loan | ||||||
Disclosure of joint ventures [line items] | ||||||
Notional amount | 203 | |||||
Quarterly amortization amount | 16 | |||||
Bullet payment due at maturity | $ 141 | |||||
Veresen Midstream | Revolving Credit Facility | ||||||
Disclosure of joint ventures [line items] | ||||||
Notional amount | $ 200 | |||||
Veresen Midstream | Term Loan A | ||||||
Disclosure of joint ventures [line items] | ||||||
Notional amount | $ 2,600 | |||||
Veresen Midstream | Term Loan B | ||||||
Disclosure of joint ventures [line items] | ||||||
Notional amount repaid at maturity | $ 705 |
INVESTMENTS IN EQUITY ACCOUNT_5
INVESTMENTS IN EQUITY ACCOUNTED INVESTEES - Financial Information of Investments (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Net Income and Comprehensive Income | ||
Revenue | $ 7,351 | $ 5,400 |
Cost of sales | 5,457 | 3,971 |
General and administrative expense | 279 | 236 |
Finance costs and other | 279 | 185 |
Earnings attributable to shareholders | 1,278 | 883 |
Net Income Attributable To Pembina | 411 | 116 |
Total comprehensive income attributable to shareholders | 1,602 | 887 |
Comprehensive Income Attributable To Pembina | 411 | 116 |
Balance Sheet | ||
Current assets | 1,013 | 1,022 |
Non-current assets | 25,651 | 24,544 |
Current liabilities | 1,490 | 1,150 |
Non-current liabilities | 10,770 | 10,575 |
Joint ventures | ||
Net Income and Comprehensive Income | ||
Revenue | 3,605 | 870 |
Cost of sales | (1,566) | (377) |
General and administrative expense | (171) | (69) |
Depreciation and amortization | (511) | (131) |
Finance costs and other | (308) | (80) |
Earnings attributable to shareholders | 1,049 | 213 |
Total comprehensive income attributable to shareholders | 1,023 | 208 |
Balance Sheet | ||
Current assets | 838 | 763 |
Non-current assets | 11,667 | 11,420 |
Current liabilities | 908 | 957 |
Non-current liabilities | $ 5,262 | $ 4,978 |
INCOME TAXES - Movement in Comp
INCOME TAXES - Movement in Components of Deferred Taxes (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of changes in deferred tax liability (asset) [abstract] | ||
Deferred income tax liability (asset), beginning balance | $ (2,376) | $ (1,080) |
Recognized in Earnings | (394) | (94) |
Recognized in Other Comprehensive Income | 2 | (1) |
Acquisition | (7) | (1,203) |
Equity | (4) | (3) |
Other | 5 | 5 |
Deferred income tax liability (asset), ending balance | (2,774) | (2,376) |
Derivative financial instruments | ||
Reconciliation of changes in deferred tax liability (asset) [abstract] | ||
Deferred income tax liability (asset), beginning balance | 11 | 20 |
Recognized in Earnings | (29) | (9) |
Recognized in Other Comprehensive Income | 0 | 0 |
Acquisition | 0 | 0 |
Equity | 0 | 0 |
Other | 0 | 0 |
Deferred income tax liability (asset), ending balance | (18) | 11 |
Employee benefits | ||
Reconciliation of changes in deferred tax liability (asset) [abstract] | ||
Deferred income tax liability (asset), beginning balance | 7 | 8 |
Recognized in Earnings | 0 | 0 |
Recognized in Other Comprehensive Income | 2 | (1) |
Acquisition | 0 | 0 |
Equity | 0 | 0 |
Other | 0 | 0 |
Deferred income tax liability (asset), ending balance | 9 | 7 |
Share-based payments | ||
Reconciliation of changes in deferred tax liability (asset) [abstract] | ||
Deferred income tax liability (asset), beginning balance | 21 | 12 |
Recognized in Earnings | 5 | 9 |
Recognized in Other Comprehensive Income | 0 | 0 |
Acquisition | 0 | 0 |
Equity | 0 | 0 |
Other | 0 | 0 |
Deferred income tax liability (asset), ending balance | 26 | 21 |
Provisions | ||
Reconciliation of changes in deferred tax liability (asset) [abstract] | ||
Deferred income tax liability (asset), beginning balance | 153 | 133 |
Recognized in Earnings | 3 | 12 |
Recognized in Other Comprehensive Income | 0 | 0 |
Acquisition | 0 | 8 |
Equity | 0 | 0 |
Other | 0 | 0 |
Deferred income tax liability (asset), ending balance | 156 | 153 |
Benefit of loss carryforwards | ||
Reconciliation of changes in deferred tax liability (asset) [abstract] | ||
Deferred income tax liability (asset), beginning balance | 180 | 90 |
Recognized in Earnings | (33) | (57) |
Recognized in Other Comprehensive Income | 0 | 0 |
Acquisition | (7) | 137 |
Equity | 0 | 0 |
Other | 13 | 10 |
Deferred income tax liability (asset), ending balance | 153 | 180 |
Other deductible temporary differences | ||
Reconciliation of changes in deferred tax liability (asset) [abstract] | ||
Deferred income tax liability (asset), beginning balance | 56 | 41 |
Recognized in Earnings | 16 | 12 |
Recognized in Other Comprehensive Income | 0 | 0 |
Acquisition | 0 | 11 |
Equity | (4) | (3) |
Other | 0 | (5) |
Deferred income tax liability (asset), ending balance | 68 | 56 |
Property, plant and equipment | ||
Reconciliation of changes in deferred tax liability (asset) [abstract] | ||
Deferred income tax liability (asset), beginning balance | (1,361) | (1,193) |
Recognized in Earnings | (299) | (243) |
Recognized in Other Comprehensive Income | 0 | 0 |
Acquisition | 0 | 75 |
Equity | 0 | 0 |
Other | 0 | 0 |
Deferred income tax liability (asset), ending balance | (1,660) | (1,361) |
Intangible assets | ||
Reconciliation of changes in deferred tax liability (asset) [abstract] | ||
Deferred income tax liability (asset), beginning balance | (198) | (150) |
Recognized in Earnings | 80 | (6) |
Recognized in Other Comprehensive Income | 0 | 0 |
Acquisition | 0 | (42) |
Equity | 0 | 0 |
Other | 0 | 0 |
Deferred income tax liability (asset), ending balance | (118) | (198) |
Investments in equity accounted investees | ||
Reconciliation of changes in deferred tax liability (asset) [abstract] | ||
Deferred income tax liability (asset), beginning balance | (1,173) | (6) |
Recognized in Earnings | (89) | 190 |
Recognized in Other Comprehensive Income | 0 | 0 |
Acquisition | 0 | (1,357) |
Equity | 0 | 0 |
Other | 0 | 0 |
Deferred income tax liability (asset), ending balance | (1,262) | (1,173) |
Taxable limited partnership income deferral | ||
Reconciliation of changes in deferred tax liability (asset) [abstract] | ||
Deferred income tax liability (asset), beginning balance | (56) | (25) |
Recognized in Earnings | (66) | 4 |
Recognized in Other Comprehensive Income | 0 | 0 |
Acquisition | 0 | (35) |
Equity | 0 | 0 |
Other | 0 | 0 |
Deferred income tax liability (asset), ending balance | (122) | (56) |
Other taxable temporary differences | ||
Reconciliation of changes in deferred tax liability (asset) [abstract] | ||
Deferred income tax liability (asset), beginning balance | (16) | (10) |
Recognized in Earnings | 18 | (6) |
Recognized in Other Comprehensive Income | 0 | 0 |
Acquisition | 0 | 0 |
Equity | 0 | 0 |
Other | (8) | 0 |
Deferred income tax liability (asset), ending balance | $ (6) | $ (16) |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Effective Income Tax Rate (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes [Abstract] | ||
Earnings before income tax | $ 1,742 | $ 1,025 |
Statutory tax rate | 27.00% | 27.00% |
Income tax at statutory rate | $ 470 | $ 277 |
Tax rate changes on deferred income tax balances | (1) | 1 |
Changes in estimate and other | (6) | 18 |
U.S. Tax Reform | 0 | (166) |
Permanent items | 1 | 12 |
Income tax expense | $ 464 | $ 142 |
INCOME TAXES - Income Tax Expen
INCOME TAXES - Income Tax Expense (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes [Abstract] | ||
Current tax expense | $ 70 | $ 48 |
Deferred tax expense | ||
Origination and reversal of temporary differences | 378 | 286 |
Tax rate changes on deferred tax balances | (1) | (191) |
Decrease (increase) in tax loss carry forward | 17 | (1) |
For the years ended December 31 | 394 | 94 |
Income tax expense | $ 464 | $ 142 |
INCOME TAXES - Deferred Tax Ite
INCOME TAXES - Deferred Tax Items Recovered Directly in Equity (Details) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2018CAD ($) | Dec. 31, 2017CAD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016CAD ($) | |
Income Taxes [Abstract] | |||||
Share issue costs | $ (4,000,000) | $ (3,000,000) | |||
Other comprehensive income (loss) | 2,000,000 | (1,000,000) | |||
Deferred tax items recovered directly in equity | (2,000,000) | (4,000,000) | |||
Temporary differences associated with its investments in subsidiaries and interests in joint arrangements | 0 | 0 | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||||
Unused tax losses for which no deferred tax asset recognised | 2,774,000,000 | 2,376,000,000 | $ 1,080,000,000 | ||
Benefit of loss carryforwards | |||||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||||
Unused tax losses for which no deferred tax asset recognised | (153,000,000) | (180,000,000) | $ (90,000,000) | ||
Benefit of loss carryforwards | United States | |||||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||||
Unused tax losses for which no deferred tax asset recognised | $ 221 | $ 261 | |||
Benefit of loss carryforwards | CANADA | |||||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||||
Unused tax losses for which no deferred tax asset recognised | $ 349,000,000 | $ 394,000,000 |
TRADE PAYABLES AND ACCRUED LI_3
TRADE PAYABLES AND ACCRUED LIABILITIES (Details) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Subclassifications of assets, liabilities and equities [abstract] | ||
Trade payables | $ 519 | $ 465 |
Other payables & accrued liabilities | 284 | 212 |
Total current trade and accrued liabilities | $ 803 | $ 677 |
LOANS AND BORROWINGS - Carrying
LOANS AND BORROWINGS - Carrying Value, Terms and Conditions, and Debt Maturity Schedule (Details) - CAD ($) | Dec. 31, 2018 | Apr. 04, 2018 | Mar. 26, 2018 | Dec. 31, 2017 |
Disclosure of detailed information about borrowings [line items] | ||||
Carrying value | $ 7,537,000,000 | $ 7,463,000,000 | ||
Less current portion | (480,000,000) | (163,000,000) | ||
Total non-current | 7,057,000,000 | 7,300,000,000 | ||
Senior unsecured credit facilities | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | $ 3,520,000,000 | |||
Nominal interest rate | 3.20% | |||
Carrying value | $ 1,305,000,000 | 1,778,000,000 | ||
Senior unsecured notes – series A | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | $ 73,000,000 | |||
Nominal interest rate | 556.50% | 5.565% | ||
Carrying value | $ 76,000,000 | 0 | ||
Senior unsecured notes – series C | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | $ 200,000,000 | |||
Nominal interest rate | 558.00% | |||
Carrying value | $ 199,000,000 | 199,000,000 | ||
Senior unsecured notes – series D | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | $ 267,000,000 | |||
Nominal interest rate | 591.00% | |||
Carrying value | $ 267,000,000 | 266,000,000 | ||
Alberta Ethane Gathering System LP senior notes | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | $ 0 | |||
Nominal interest rate | 556.50% | |||
Carrying value | $ 0 | 77,000,000 | ||
Senior unsecured medium-term notes series 1 | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | $ 250,000,000 | |||
Nominal interest rate | 489.00% | |||
Carrying value | $ 250,000,000 | 249,000,000 | ||
Senior unsecured medium-term notes series 2 | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | $ 450,000,000 | |||
Nominal interest rate | 377.00% | |||
Carrying value | $ 449,000,000 | 449,000,000 | ||
Senior unsecured medium-term notes series 3 | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | $ 450,000,000 | |||
Nominal interest rate | 475.00% | |||
Carrying value | $ 446,000,000 | 446,000,000 | ||
Senior unsecured medium-term notes series 4 | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | $ 600,000,000 | |||
Nominal interest rate | 481.00% | |||
Carrying value | $ 596,000,000 | 596,000,000 | ||
Senior unsecured medium-term notes series 5 | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | $ 450,000,000 | |||
Nominal interest rate | 354.00% | |||
Carrying value | $ 448,000,000 | 448,000,000 | ||
Senior unsecured medium-term notes series 6 | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | $ 500,000,000 | |||
Nominal interest rate | 424.00% | |||
Carrying value | $ 498,000,000 | 498,000,000 | ||
Senior unsecured medium-term notes series 7 | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | $ 500,000,000 | |||
Nominal interest rate | 371.00% | |||
Carrying value | $ 498,000,000 | 497,000,000 | ||
Senior unsecured medium-term notes series 8 | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | $ 650,000,000 | |||
Nominal interest rate | 299.00% | |||
Carrying value | $ 646,000,000 | 645,000,000 | ||
Senior unsecured medium-term notes series 9 | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | $ 550,000,000 | |||
Nominal interest rate | 474.00% | |||
Carrying value | $ 541,000,000 | 541,000,000 | ||
Senior unsecured medium-term notes series 10 | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | $ 400,000,000 | $ 400,000,000 | ||
Nominal interest rate | 402.00% | 4.02% | ||
Carrying value | $ 398,000,000 | 0 | ||
Senior unsecured medium-term notes series 11 | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | $ 300,000,000 | $ 300,000,000 | ||
Nominal interest rate | 475.00% | 4.75% | ||
Carrying value | $ 298,000,000 | 0 | ||
Senior unsecured medium-term notes 1A | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | $ 0 | |||
Nominal interest rate | 400.00% | |||
Carrying value | $ 0 | 152,000,000 | ||
Senior unsecured medium-term notes 3A | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | $ 50,000,000 | |||
Nominal interest rate | 505.00% | |||
Carrying value | $ 50,000,000 | 52,000,000 | ||
Senior unsecured medium-term notes 4A | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | $ 200,000,000 | |||
Nominal interest rate | 306.00% | |||
Carrying value | $ 205,000,000 | 207,000,000 | ||
Senior unsecured medium-term notes 5A | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | $ 350,000,000 | |||
Nominal interest rate | 343.00% | |||
Carrying value | $ 353,000,000 | 354,000,000 | ||
Finance lease liabilities and other | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Carrying value | 14,000,000 | $ 9,000,000 | ||
Revolving unsecured credit facility | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | 2,500,000,000 | |||
Non-revolving unsecured credit facility | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | 1,000,000,000 | |||
Operating facility | Fixed rate instruments | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Authorized | $ 20,000,000 |
LOANS AND BORROWINGS - Narrativ
LOANS AND BORROWINGS - Narrative (Details) - CAD ($) | Mar. 09, 2018 | Dec. 31, 2018 | Nov. 22, 2018 | Apr. 04, 2018 | Mar. 26, 2018 |
Term Loan | |||||
Disclosure of detailed information about borrowings [line items] | |||||
Notional amount | $ 1,000,000,000 | ||||
Maturity, term | 3 years | ||||
Senior unsecured medium-term notes series 10 | Fixed rate instruments | |||||
Disclosure of detailed information about borrowings [line items] | |||||
Notional amount | $ 400,000,000 | $ 400,000,000 | |||
Nominal interest rate | 402.00% | 4.02% | |||
Senior unsecured medium-term notes series 11 | Fixed rate instruments | |||||
Disclosure of detailed information about borrowings [line items] | |||||
Notional amount | $ 300,000,000 | $ 300,000,000 | |||
Nominal interest rate | 475.00% | 4.75% | |||
Senior unsecured notes – series A | Fixed rate instruments | |||||
Disclosure of detailed information about borrowings [line items] | |||||
Notional amount | $ 73,000,000 | ||||
Nominal interest rate | 556.50% | 5.565% | |||
Bullet payment due at maturity | $ 73,000,000 | ||||
Senior unsecured medium-term notes 1A | Fixed rate instruments | |||||
Disclosure of detailed information about borrowings [line items] | |||||
Notional amount | $ 0 | ||||
Nominal interest rate | 400.00% | ||||
Notional amount repaid at maturity | $ 150,000,000 |
CONVERTIBLE DEBENTURES (Details
CONVERTIBLE DEBENTURES (Details) - CAD ($) $ / shares in Units, $ in Millions | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of detailed information about financial instruments [line items] | |||
Conversions and redemptions | $ 140 | $ 73 | |
Series F Convertible Debenture | |||
Disclosure of detailed information about financial instruments [line items] | |||
Nominal interest rate | 5.75% | 5.75% | |
Conversion price (dollars per share) | $ 29.53 | $ 29.53 | |
Convertible debentures, beginning balance | $ 93 | 143 | |
Conversions and redemptions | (93) | (52) | |
Repayment at maturity | (2) | ||
Unwinding of discount rate | 1 | 1 | |
Deferred financing fee (net of amortization) | 1 | 1 | |
Convertible debentures, ending balance | $ 0 | $ 0 | $ 93 |
Repayments of debentures | $ 1.6 |
DECOMISSIONING PROVISION - Deta
DECOMISSIONING PROVISION - Detailed Disclosure (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Minimum | ||
Reconciliation of changes in other provisions [abstract] | ||
Estimated economic lives of assets covered by the decommissioning provision | 1 year | |
Maximum | ||
Reconciliation of changes in other provisions [abstract] | ||
Estimated economic lives of assets covered by the decommissioning provision | 83 years | |
Average | ||
Reconciliation of changes in other provisions [abstract] | ||
Estimated economic lives of assets covered by the decommissioning provision | 50 years | |
Decommissioning provision | ||
Reconciliation of changes in other provisions [abstract] | ||
Other provisions, beginning balance | $ 551 | $ 496 |
Unwinding of discount rate | 12 | 12 |
Change in rates | 0 | 43 |
Acquisition | 0 | 10 |
Additions | 18 | 33 |
Change in estimates and other | (8) | (43) |
Other provisions, ending balance | 573 | 551 |
Less current portion (included in accrued liabilities) | (4) | (5) |
Other non-current provisions | $ 569 | $ 546 |
Inflation rate for preset value | 1.80% | 1.80% |
Risk-free rate for preset value | 2.30% | 2.30% |
Depreciation expense | $ 4 | $ 4 |
SHARE CAPITAL - Narrative (Deta
SHARE CAPITAL - Narrative (Details) - CAD ($) $ / shares in Units, $ in Millions | Feb. 06, 2019 | Jan. 07, 2019 | Dec. 01, 2018 | Jun. 15, 2018 | Jun. 14, 2018 | Dec. 07, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 01, 2019 | Dec. 31, 2016 |
Disclosure of classes of share capital [line items] | |||||||||||
Maximum number of preference shares issuable as a percentage of ordinary shares issued and outstanding | 20.00% | ||||||||||
Number of shares issued (in shares) | 503,000,000 | 397,000,000 | |||||||||
Proceeds from dividend reinvestment plan | $ 148 | ||||||||||
Common share capital | |||||||||||
Disclosure of classes of share capital [line items] | |||||||||||
Number of shares outstanding (in shares) | 508,000,000 | 503,000,000 | 397,000,000 | ||||||||
Value of shares issued | $ 13,662 | $ 13,447 | $ 8,808 | ||||||||
Percentage of increase in dividend rate | 5.60% | ||||||||||
Monthly dividends paid per share (in CAD per share) | $ 0.19 | $ 0.18 | |||||||||
Dividends paid per share (in CAD per share) | $ 2.24 | $ 2.04000 | |||||||||
Dividends declared | $ 1,131 | $ 873 | |||||||||
Proceeds from dividend reinvestment plan | 148 | ||||||||||
Common share capital | Issued capital | |||||||||||
Disclosure of classes of share capital [line items] | |||||||||||
Proceeds from dividend reinvestment plan | $ 148 | ||||||||||
Common share capital | Major ordinary share transactions | |||||||||||
Disclosure of classes of share capital [line items] | |||||||||||
Monthly dividends paid per share (in CAD per share) | $ 0.19 | $ 0.19 | |||||||||
Dividends paid per share (in CAD per share) | $ 2.28 | ||||||||||
Dividends declared | $ 97 | $ 97 | |||||||||
Preferred share capital | |||||||||||
Disclosure of classes of share capital [line items] | |||||||||||
Number of shares outstanding (in shares) | 100,000,000 | 100,000,000 | 62,000,000 | ||||||||
Value of shares issued | $ 2,423 | $ 2,424 | $ 1,509 | ||||||||
Dividends declared | $ 122 | $ 83 | |||||||||
Class A, Series 1 Rate Reset Preference Shares | |||||||||||
Disclosure of classes of share capital [line items] | |||||||||||
Number of shares converted (in shares) | 0 | ||||||||||
Number of shares outstanding (in shares) | 10,000,000 | ||||||||||
Class A, Series 21 Preferred shares issued, net of issue costs | |||||||||||
Disclosure of classes of share capital [line items] | |||||||||||
Number of shares issued (in shares) | 16,000,000 | ||||||||||
Value of shares issued | $ 400 | ||||||||||
Dividends paid per share (in CAD per share) | $ 1.225 | ||||||||||
Dividend rate period | 5 years | ||||||||||
Variable rate on dividends | 3.26% | ||||||||||
Redemption price per share on preferred stock (in CAD per share) | $ 25 | ||||||||||
Dividends paid per share (in CAD per share) | $ 1.200650 | $ 0 | |||||||||
Dividends declared | $ 19 | $ 0 | |||||||||
Class A, Series 21 Preferred shares issued, net of issue costs | Minimum | |||||||||||
Disclosure of classes of share capital [line items] | |||||||||||
Percentage of increase in dividend rate | 4.90% | ||||||||||
Class A Series 22 Preferred Shares | |||||||||||
Disclosure of classes of share capital [line items] | |||||||||||
Dividend rate period | 90 days | ||||||||||
Variable rate on dividends | 3.26% | ||||||||||
Class A Series 3 Rate Reset Preference ShareS | |||||||||||
Disclosure of classes of share capital [line items] | |||||||||||
Number of shares outstanding (in shares) | 6,000,000 |
SHARE CAPITAL - Common and Pref
SHARE CAPITAL - Common and Preferred Share Capital (Details) - CAD ($) shares in Millions, $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of number of shares outstanding [abstract] | ||
Dividend reinvestment plan | $ 148 | |
Debenture conversions | $ 140 | 73 |
Share-based payment transactions | $ 75 | $ 62 |
Common share capital | ||
Reconciliation of number of shares outstanding [abstract] | ||
Number of shares, Beginning balance (in shares) | 503 | 397 |
Issued, net of issue costs (in shares) | 99 | |
Dividend reinvestment plan (in shares) | 4 | |
Debenture conversions (in shares) | 3 | 2 |
Share-based payment transactions (in shares) | 2 | 1 |
Number of shares, Ending balance (in shares) | 508 | 503 |
Share capital, beginning balance | $ 13,447 | $ 8,808 |
Issued, net of issue costs | 4,356 | |
Dividend reinvestment plan | 148 | |
Debenture conversions | 73 | |
Share-based payment transactions | 62 | |
Share capital, ending balance | $ 13,662 | $ 13,447 |
Preferred share capital | ||
Reconciliation of number of shares outstanding [abstract] | ||
Number of shares, Beginning balance (in shares) | 100 | 62 |
Issued, net of issue costs (in shares) | 0 | |
Number of shares, Ending balance (in shares) | 100 | 100 |
Share capital, beginning balance | $ 2,424 | $ 1,509 |
Issued, net of issue costs | (1) | 915 |
Share capital, ending balance | $ 2,423 | $ 2,424 |
Class A, Series 15 Preferred shares issued, net of issue costs | ||
Reconciliation of number of shares outstanding [abstract] | ||
Issued, net of issue costs (in shares) | 8 | |
Issued, net of issue costs | $ 178 | |
Class A, Series 17 Preferred shares issued, net of issue costs | ||
Reconciliation of number of shares outstanding [abstract] | ||
Issued, net of issue costs (in shares) | 6 | |
Issued, net of issue costs | $ 141 | |
Class A, Series 19 Preferred shares issued, net of issue costs | ||
Reconciliation of number of shares outstanding [abstract] | ||
Issued, net of issue costs (in shares) | 8 | |
Issued, net of issue costs | $ 203 | |
Class A, Series 21 Preferred shares issued, net of issue costs | ||
Reconciliation of number of shares outstanding [abstract] | ||
Issued, net of issue costs (in shares) | 16 | |
Issued, net of issue costs | $ 393 |
SHARE CAPITAL - Dividends (Deta
SHARE CAPITAL - Dividends (Details) - CAD ($) $ / shares in Units, $ in Millions | Mar. 15, 2019 | Feb. 01, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Common share capital | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends paid | $ 1,131 | $ 873 | ||
Dividends paid per share (in CAD per share) | $ 2.24 | $ 2.04000 | ||
Preferred share capital | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends paid | $ 122 | $ 83 | ||
Series 1 preferred share | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends paid | $ 11 | $ 11 | ||
Dividends paid per share (in CAD per share) | $ 1.062500 | $ 1.062500 | ||
Series 3 preferred share | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends paid | $ 7 | $ 7 | ||
Dividends paid per share (in CAD per share) | $ 1.175 | $ 1.175 | ||
Series 5 preferred share | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends paid | $ 12 | $ 12 | ||
Dividends paid per share (in CAD per share) | $ 1.25 | $ 1.25 | ||
Series 7 preferred share | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends paid | $ 11 | $ 11 | ||
Dividends paid per share (in CAD per share) | $ 1.125 | $ 1.125 | ||
Series 9 preferred share | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends paid | $ 11 | $ 11 | ||
Dividends paid per share (in CAD per share) | $ 1.1875 | $ 1.1875 | ||
Series 11 preferred share | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends paid | $ 10 | $ 10 | ||
Dividends paid per share (in CAD per share) | $ 1.4375 | $ 1.4375 | ||
Series 13 preferred share | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends paid | $ 14 | $ 14 | ||
Dividends paid per share (in CAD per share) | $ 1.4375 | $ 1.4375 | ||
Series 15 preferred share | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends paid | $ 9 | $ 2 | ||
Dividends paid per share (in CAD per share) | $ 1.116000 | $ 0.279 | ||
Series 17 preferred share | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends paid | $ 8 | $ 2 | ||
Dividends paid per share (in CAD per share) | $ 1.250000 | $ 0.3125 | ||
Series 19 preferred share | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends paid | $ 10 | $ 3 | ||
Dividends paid per share (in CAD per share) | $ 1.250000 | $ 0.31250 | ||
Series 21 preferred share | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends paid | $ 19 | $ 0 | ||
Dividends paid per share (in CAD per share) | $ 1.200650 | $ 0 | ||
Major preference share transactions | Series 1 preferred share | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners per share (in CAD per share) | $ 0.306625 | |||
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners | $ 3 | |||
Major preference share transactions | Series 3 preferred share | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners per share (in CAD per share) | $ 0.293750 | |||
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners | $ 2 | |||
Major preference share transactions | Series 5 preferred share | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners per share (in CAD per share) | $ 0.312500 | |||
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners | $ 3 | |||
Major preference share transactions | Series 7 preferred share | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners per share (in CAD per share) | $ 0.281250 | |||
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners | $ 3 | |||
Major preference share transactions | Series 9 preferred share | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners per share (in CAD per share) | $ 0.296875 | |||
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners | $ 2 | |||
Major preference share transactions | Series 11 preferred share | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners per share (in CAD per share) | $ 0.359375 | |||
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners | $ 2 | |||
Major preference share transactions | Series 13 preferred share | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners per share (in CAD per share) | $ 0.359375 | |||
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners | $ 4 | |||
Major preference share transactions | Series 15 preferred share | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners per share (in CAD per share) | $ 0.279000 | |||
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners | $ 2 | |||
Major preference share transactions | Series 17 preferred share | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners per share (in CAD per share) | $ 0.312500 | |||
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners | $ 2 | |||
Major preference share transactions | Series 19 preferred share | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners per share (in CAD per share) | $ 0.312500 | |||
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners | $ 3 | |||
Major preference share transactions | Series 21 preferred share | ||||
Disclosure of classes of share capital [line items] | ||||
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners per share (in CAD per share) | $ 0.306250 | |||
Dividends proposed or declared before financial statements authorised for issue but not recognised as distribution to owners | $ 5 |
PERSONNEL EXPENSES (Details)
PERSONNEL EXPENSES (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Analysis of income and expense [abstract] | ||
Salaries and wages | $ 254 | $ 194 |
Share-based compensation expense (Note 23) | 63 | 73 |
Short-term incentive plan | 59 | 45 |
Pension plan expense | 23 | 20 |
Health, savings plan and other benefits | 21 | 18 |
Personnel expenses | $ 420 | $ 350 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS - Revenue Disaggregation (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Revenue from contracts with customers | $ 7,273 | $ 5,338 |
Lease and other revenue | 78 | 62 |
Revenue | 7,351 | 5,400 |
Pipelines Division | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Revenue from contracts with customers | 1,403 | 1,005 |
Lease and other revenue | 61 | 62 |
Revenue | 1,464 | 1,067 |
Facilities Division | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Revenue from contracts with customers | 1,149 | 800 |
Lease and other revenue | 17 | 0 |
Revenue | 1,166 | 800 |
Marketing & New Ventures Division | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Revenue from contracts with customers | 4,721 | 3,533 |
Lease and other revenue | 0 | 0 |
Revenue | 4,721 | 3,533 |
Take-or-Pay | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Revenue from contracts with customers | 1,561 | 1,215 |
Take-or-Pay | Pipelines Division | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Revenue from contracts with customers | 979 | 681 |
Take-or-Pay | Facilities Division | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Revenue from contracts with customers | 582 | 534 |
Take-or-Pay | Marketing & New Ventures Division | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Revenue from contracts with customers | 0 | 0 |
Fee-for-Service | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Revenue from contracts with customers | 527 | 384 |
Fee-for-Service | Pipelines Division | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Revenue from contracts with customers | 424 | 324 |
Fee-for-Service | Facilities Division | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Revenue from contracts with customers | 103 | 58 |
Fee-for-Service | Marketing & New Ventures Division | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Revenue from contracts with customers | 0 | 2 |
Product Sales | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Revenue from contracts with customers | 5,185 | 3,739 |
Product Sales | Pipelines Division | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Revenue from contracts with customers | 0 | 0 |
Product Sales | Facilities Division | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Revenue from contracts with customers | 464 | 208 |
Product Sales | Marketing & New Ventures Division | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Revenue from contracts with customers | $ 4,721 | $ 3,531 |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS - Contract Balances (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue From Contracts With Customers [Abstract] | ||
Balance at January 1 | $ 157 | $ 81 |
Additions (net in the period) | 38 | 99 |
Revenue recognized from contract liabilities | (27) | (23) |
Closing balance | 168 | 157 |
Less current portion | (37) | (44) |
Balance at December 31 | $ 131 | $ 113 |
REVENUE FROM CONTRACTS WITH C_5
REVENUE FROM CONTRACTS WITH CUSTOMERS - Narrative (Details) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Contract liabilities | $ 37 | $ 44 |
Transaction price allocated to remaining performance obligations | 10,600 | |
Take-or-Pay | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Contract liabilities | 9 | $ 8 |
Not Later than Five Years | Maximum | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Transaction price allocated to remaining performance obligations | 1,100 | |
Not Later than Five Years | Minimum | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Transaction price allocated to remaining performance obligations | 962 | |
Later than Five Years Not Later than Twenty Three Years | Maximum | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Transaction price allocated to remaining performance obligations | 1,000 | |
Later than Five Years Not Later than Twenty Three Years | Minimum | ||
Disclosure of disaggregation of revenue from contracts with customers [line items] | ||
Transaction price allocated to remaining performance obligations | $ 7 |
NET FINANCE COSTS (Details)
NET FINANCE COSTS (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Interest expense on financial liabilities measured at amortized cost: | ||
Loans and borrowings | $ 268 | $ 162 |
Convertible debentures | 6 | 9 |
Unwinding of discount rate | 12 | 12 |
Gain in fair value of non-commodity-related derivative financial instruments | (4) | (8) |
Loss on revaluation of conversion feature of convertible debentures | 0 | 13 |
Foreign exchange gain and other | (3) | (3) |
Net finance costs | $ 279 | $ 185 |
NET FINANCE COSTS - Narrative (
NET FINANCE COSTS - Narrative (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Analysis of income and expense [abstract] | ||
Net interest paid | $ 294 | $ 216 |
Interest paid during construction | $ 35 | $ 63 |
OPERATING SEGMENTS - Narrative
OPERATING SEGMENTS - Narrative (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2018CAD ($)segment | Dec. 31, 2017CAD ($) | |
Operating Segments [Abstract] | ||
Number of operating segments | segment | 3 | |
Disclosure of operating segments [line items] | ||
Revenue | $ 7,351 | $ 5,400 |
Pipelines Division | ||
Disclosure of operating segments [line items] | ||
Revenue | 1,464 | 1,067 |
Marketing & New Ventures Division | ||
Disclosure of operating segments [line items] | ||
Revenue | 4,721 | 3,533 |
Operating segments | Pipelines Division | ||
Disclosure of operating segments [line items] | ||
Revenue | 1,464 | 1,067 |
Operating segments | Marketing & New Ventures Division | ||
Disclosure of operating segments [line items] | ||
Revenue | 4,721 | 3,533 |
United States | Operating segments | Pipelines Division | ||
Disclosure of operating segments [line items] | ||
Pipeline transportation | $ 25 | 22 |
Customer 1 | ||
Disclosure of operating segments [line items] | ||
Percentage of entity's revenue | 10.00% | |
Revenue | $ 792 | |
Midstream | United States | Operating segments | Marketing & New Ventures Division | ||
Disclosure of operating segments [line items] | ||
Terminalling, storage and hub services | $ 240 | $ 215 |
OPERATING SEGMENTS - Financial
OPERATING SEGMENTS - Financial Information by Segment (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of operating segments [line items] | ||
Revenue | $ 7,351 | $ 5,400 |
Operating expenses | 551 | 450 |
Cost of goods sold, including product purchases | 4,515 | 3,162 |
Realized loss on commodity-related derivative financial instruments | 51 | 94 |
Share of profit from equity accounted investees | 411 | 116 |
Depreciation and amortization included in operations | 391 | 359 |
Unrealized gain on commodity-related derivative financial instruments | (73) | (23) |
Net finance costs (income) | 2,327 | 1,474 |
Depreciation included in general and administrative | 26 | 23 |
Other general and administrative | 253 | 213 |
Other (income) expense | 27 | 28 |
Results from operating activities | 2,021 | 1,210 |
Net finance costs | 279 | 185 |
Earnings before income tax | 1,742 | 1,025 |
Capital expenditures | 1,226 | 1,839 |
Contributions to equity accounted investees | 58 | 7 |
Pipelines Division | ||
Disclosure of operating segments [line items] | ||
Revenue | 1,464 | 1,067 |
Facilities Division | ||
Disclosure of operating segments [line items] | ||
Revenue | 1,166 | 800 |
Marketing & New Ventures Division | ||
Disclosure of operating segments [line items] | ||
Revenue | 4,721 | 3,533 |
Operating segments | Pipelines Division | ||
Disclosure of operating segments [line items] | ||
Revenue | 1,464 | 1,067 |
Operating expenses | 396 | 330 |
Realized loss on commodity-related derivative financial instruments | 1 | |
Share of profit from equity accounted investees | 279 | 72 |
Depreciation and amortization included in operations | 216 | 195 |
Unrealized gain on commodity-related derivative financial instruments | (1) | |
Net finance costs (income) | 1,255 | 683 |
Other general and administrative | 26 | 20 |
Other (income) expense | 0 | (6) |
Results from operating activities | 1,229 | 669 |
Net finance costs | 9 | 10 |
Earnings before income tax | 1,220 | 659 |
Capital expenditures | 711 | 1,328 |
Operating segments | Facilities Division | ||
Disclosure of operating segments [line items] | ||
Revenue | 1,166 | 800 |
Operating expenses | 313 | 227 |
Cost of goods sold, including product purchases | 462 | 197 |
Share of profit from equity accounted investees | 30 | 22 |
Depreciation and amortization included in operations | 149 | 138 |
Net finance costs (income) | 574 | 429 |
Other general and administrative | 17 | 23 |
Other (income) expense | 5 | 11 |
Results from operating activities | 552 | 395 |
Net finance costs | 6 | 12 |
Earnings before income tax | 546 | 383 |
Capital expenditures | 348 | 440 |
Contributions to equity accounted investees | 58 | 1 |
Operating segments | Marketing & New Ventures Division | ||
Disclosure of operating segments [line items] | ||
Revenue | 4,721 | 3,533 |
Cost of goods sold, including product purchases | 4,335 | 3,105 |
Realized loss on commodity-related derivative financial instruments | 51 | 93 |
Share of profit from equity accounted investees | 102 | 22 |
Depreciation and amortization included in operations | 26 | 26 |
Unrealized gain on commodity-related derivative financial instruments | (73) | (22) |
Net finance costs (income) | 484 | 353 |
Other general and administrative | 41 | 19 |
Other (income) expense | 12 | 1 |
Results from operating activities | 431 | 333 |
Net finance costs | 16 | 7 |
Earnings before income tax | 415 | 326 |
Capital expenditures | 134 | 57 |
Contributions to equity accounted investees | 6 | |
Corporate & Inter-Division Eliminations | ||
Disclosure of operating segments [line items] | ||
Revenue | (426) | (238) |
Operating expenses | (158) | (107) |
Cost of goods sold, including product purchases | (282) | (140) |
Net finance costs (income) | 14 | 9 |
Depreciation included in general and administrative | 26 | 23 |
Other general and administrative | 169 | 151 |
Other (income) expense | 10 | 22 |
Results from operating activities | (191) | (187) |
Net finance costs | 248 | 156 |
Earnings before income tax | (439) | (343) |
Capital expenditures | 33 | 14 |
Corporate & Inter-Division Eliminations | Pipelines Division | ||
Disclosure of operating segments [line items] | ||
Revenue | 124 | 69 |
Corporate & Inter-Division Eliminations | Facilities Division | ||
Disclosure of operating segments [line items] | ||
Revenue | 302 | 169 |
Operating Segments and Corporate & Inter-Division Eliminations | Pipelines Division | ||
Disclosure of operating segments [line items] | ||
Revenue | 1,588 | 1,136 |
Operating Segments and Corporate & Inter-Division Eliminations | Facilities Division | ||
Disclosure of operating segments [line items] | ||
Revenue | 1,468 | 969 |
Operating Segments and Corporate & Inter-Division Eliminations | Marketing & New Ventures Division | ||
Disclosure of operating segments [line items] | ||
Revenue | $ 4,721 | $ 3,533 |
EARNINGS PER COMMON SHARE - Nar
EARNINGS PER COMMON SHARE - Narrative (Details) - CAD ($) shares in Millions, $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings per share [abstract] | ||
Earnings attributable to common shareholders | $ 1,153 | $ 797 |
Weighted average number of common shares (in shares) | 505 | 426 |
Profit (loss), attributable to ordinary equity holders of parent entity including dilutive effects | $ 1,157 | $ 803 |
Adjusted weighted average number of ordinary shares outstanding (in shares) | 509 | 432 |
EARNINGS PER COMMON SHARE - Ear
EARNINGS PER COMMON SHARE - Earnings Attributable to Common Shareholders (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings per share [abstract] | ||
Earnings | $ 1,278 | $ 883 |
Dividends on preferred shares | (122) | (83) |
Cumulative dividends on preferred shares, not yet declared | (3) | (3) |
Basic earnings attributable to common shareholders | 1,153 | 797 |
Effect of after-tax interest on debentures to earnings | 4 | 6 |
Diluted earnings attributable to common shareholders | $ 1,157 | $ 803 |
EARNINGS PER COMMON SHARE - Wei
EARNINGS PER COMMON SHARE - Weighted Average Number of Common Shares (Details) - $ / shares shares in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings per share [line items] | ||
Number of shares issued (in shares) | 503 | 397 |
Effect of shares issued (in shares) | 0 | 25 |
Effect of shares issued on exercise of options (in shares) | 1 | 0 |
Effect of conversion of convertible debentures (in shares) | 1 | 1 |
Effect of shares issued under dividend reinvestment plan (in shares) | 0 | 3 |
Weighted average number of common shares at December 31 (basic) (in shares) | 505 | 426 |
Dilutive effect of debentures converted (in shares) | 2 | 4 |
Dilutive effect of share options on issue (in shares) | 2 | 2 |
Weighted average number of common shares at December 31 (diluted) (in shares) | 509 | 432 |
Basic earnings per common share (in CAD per share) | $ 2.28 | $ 1.87 |
Diluted earnings per common share (in CAD per share) | $ 2.28 | $ 1.86 |
PENSION PLAN - Employee Benefit
PENSION PLAN - Employee Benefit Obligations (Details) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of defined benefit plans [line items] | ||
Net employee benefit obligations | $ 31 | $ 22 |
Registered Plans | ||
Disclosure of defined benefit plans [line items] | ||
Net employee benefit obligations | 19 | 10 |
Supplemental Plan | ||
Disclosure of defined benefit plans [line items] | ||
Net employee benefit obligations | 12 | 11 |
Other accrued benefit obligations | ||
Disclosure of defined benefit plans [line items] | ||
Net employee benefit obligations | $ 0 | $ 1 |
PENSION PLAN - Narrative (Detai
PENSION PLAN - Narrative (Details) - CAD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Apr. 01, 2018 | |
Disclosure of net defined benefit liability (asset) [line items] | |||
Net employee benefit obligations | $ 31,000,000 | $ 22,000,000 | |
Post-employment benefit expense, defined contribution plans | $ 8,000,000 | 7,000,000 | |
Number of best years of earnings | 3 years | ||
Number of years of service | 10 years | ||
Decrease in defined benefit plan related to present value of refunds or reductions in future contributions | $ 0 | 0 | |
Pension plan expense | $ 23,000,000 | 20,000,000 | |
Estimated discount rate | 3.80% | ||
Increase (decrease) of estimated discount rate | 1 | ||
Expected future contributions to plan in 2019 | $ 20,000,000 | ||
Younger Plan | |||
Disclosure of net defined benefit liability (asset) [line items] | |||
Net employee benefit obligations | $ 6,000,000 | ||
Registered Plans | |||
Disclosure of net defined benefit liability (asset) [line items] | |||
Net employee benefit obligations | 19,000,000 | 10,000,000 | |
Pension plan expense | 15,000,000 | 14,000,000 | |
Supplemental Plan | |||
Disclosure of net defined benefit liability (asset) [line items] | |||
Net employee benefit obligations | 12,000,000 | 11,000,000 | |
Plan assets | Registered Plans | |||
Disclosure of net defined benefit liability (asset) [line items] | |||
Contributions paid into the plan | $ 19,000,000 | 16,000,000 | |
Minimum | |||
Disclosure of net defined benefit liability (asset) [line items] | |||
Employer contributions percent | 5.00% | ||
Maximum | |||
Disclosure of net defined benefit liability (asset) [line items] | |||
Employer contributions percent | 10.00% | ||
Employee's age plus years of service | 50 years | ||
Maximum | Supplemental Plan | |||
Disclosure of net defined benefit liability (asset) [line items] | |||
Pension plan expense | $ 1,000,000 | $ 1,000,000 |
PENSION PLAN - Defined Benefit
PENSION PLAN - Defined Benefit Obligations (Details) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Registered Plans | ||
Disclosure of defined benefit plans [line items] | ||
Total present value of obligations | $ 212 | $ 192 |
Fair value of plan assets | 193 | 182 |
Recognized liability for defined benefit obligations | (19) | (10) |
Supplemental Plan | ||
Disclosure of defined benefit plans [line items] | ||
Total present value of obligations | 12 | 11 |
Fair value of plan assets | 0 | 0 |
Recognized liability for defined benefit obligations | $ (12) | $ (11) |
PENSION PLAN - Plan Assets (Det
PENSION PLAN - Plan Assets (Details) - Registered Plans | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of fair value of plan assets [line items] | ||
Equity securities | 61.00% | 65.00% |
Debt | 39.00% | 35.00% |
Total | 100.00% | 100.00% |
PENSION PLAN - Movement in Plan
PENSION PLAN - Movement in Plan (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Registered Plans | ||
Disclosure of net defined benefit liability (asset) [line items] | ||
Current service costs | $ 14 | $ 14 |
Return on plan assets | (7) | (7) |
Interest expense (income) | 8 | 7 |
Registered Plans | Present value of defined benefit obligation | ||
Disclosure of net defined benefit liability (asset) [line items] | ||
Net defined benefit liability (asset), beginning balance | (192) | (180) |
Benefits paid by the plan | (12) | (13) |
Current service costs | 14 | 14 |
Interest expense (income) | 7 | 7 |
Transfer from Younger | 16 | 0 |
Actuarial losses in other comprehensive income | (5) | 4 |
Net defined benefit liability (asset), ending balance | (212) | (192) |
Registered Plans | Plan assets | ||
Disclosure of net defined benefit liability (asset) [line items] | ||
Net defined benefit liability (asset), beginning balance | 182 | 164 |
Contributions paid into the plan | 19 | 16 |
Benefits paid by the plan | (12) | (13) |
Return on plan assets | (13) | 8 |
Interest expense (income) | (7) | (7) |
Transfer from Younger | 10 | 0 |
Net defined benefit liability (asset), ending balance | 193 | 182 |
Supplemental Plan | Present value of defined benefit obligation | ||
Disclosure of net defined benefit liability (asset) [line items] | ||
Net defined benefit liability (asset), beginning balance | (11) | (10) |
Benefits paid by the plan | 0 | 0 |
Current service costs | 1 | 0 |
Interest expense (income) | 0 | 0 |
Transfer from Younger | 0 | 0 |
Actuarial losses in other comprehensive income | 0 | 1 |
Net defined benefit liability (asset), ending balance | $ (12) | $ (11) |
PENSION PLAN - Expense Recogniz
PENSION PLAN - Expense Recognized in Earnings (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of net defined benefit liability (asset) [line items] | ||
Pension plan expense | $ 23 | $ 20 |
Registered Plans | ||
Disclosure of net defined benefit liability (asset) [line items] | ||
Current service costs | 14 | 14 |
Interest on obligation | 8 | 7 |
Expected return on plan assets | (7) | (7) |
Pension plan expense | 15 | 14 |
Registered Plans | Operating expenses | ||
Disclosure of net defined benefit liability (asset) [line items] | ||
Pension plan expense | 8 | 7 |
Registered Plans | General and administrative expense | ||
Disclosure of net defined benefit liability (asset) [line items] | ||
Pension plan expense | $ 7 | $ 7 |
PENSION PLAN - Actuarial Gains
PENSION PLAN - Actuarial Gains and Losses Recognized in OCI (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Actuarial effect in other comprehensive income | ||
Disclosure of net defined benefit liability (asset) [line items] | ||
Net defined benefit liability (asset), beginning balance | $ (23) | $ (26) |
Actuarial gain (loss) arising from | ||
Financial assumptions | 3 | (4) |
Experience adjustments | 0 | 1 |
Return on plan assets excluding interest income | (9) | 6 |
Recognized during the period after tax | (6) | 3 |
Net defined benefit liability (asset), ending balance | (29) | (23) |
Registered Plans | ||
Actuarial gain (loss) arising from | ||
Return on plan assets excluding interest income | (7) | (7) |
Registered Plans | Actuarial effect in other comprehensive income | ||
Disclosure of net defined benefit liability (asset) [line items] | ||
Net defined benefit liability (asset), beginning balance | (22) | (25) |
Actuarial gain (loss) arising from | ||
Financial assumptions | 3 | (4) |
Experience adjustments | 0 | 1 |
Return on plan assets excluding interest income | (9) | 6 |
Recognized during the period after tax | (6) | 3 |
Net defined benefit liability (asset), ending balance | (28) | (22) |
Supplemental Plan | Actuarial effect in other comprehensive income | ||
Disclosure of net defined benefit liability (asset) [line items] | ||
Net defined benefit liability (asset), beginning balance | (1) | (1) |
Actuarial gain (loss) arising from | ||
Financial assumptions | 0 | 0 |
Experience adjustments | 0 | 0 |
Return on plan assets excluding interest income | 0 | 0 |
Recognized during the period after tax | 0 | 0 |
Net defined benefit liability (asset), ending balance | $ (1) | $ (1) |
PENSION PLAN - Actuarial Assump
PENSION PLAN - Actuarial Assumptions (Details) - year | Dec. 31, 2018 | Dec. 31, 2017 |
Employee Benefits [Abstract] | ||
Discount rate | 3.80% | 3.60% |
Future pension earning increases | 4.00% | 4.00% |
Current male pensioners at age 65 | ||
Disclosure of defined benefit plans [line items] | ||
Assumptions regarding mortality longevities (in years) | 21.7 | 21.7 |
Current female pensioners at age 65 | ||
Disclosure of defined benefit plans [line items] | ||
Assumptions regarding mortality longevities (in years) | 24.1 | 24.1 |
Current male members at age 45 | ||
Disclosure of defined benefit plans [line items] | ||
Assumptions regarding mortality longevities (in years) | 22.8 | 22.8 |
Current female members at age 45 | ||
Disclosure of defined benefit plans [line items] | ||
Assumptions regarding mortality longevities (in years) | 25.1 | 25.1 |
SHARE-BASED PAYMENTS - Narrativ
SHARE-BASED PAYMENTS - Narrative (Details) | Dec. 31, 2018CAD ($)shares | Nov. 13, 2018shares | Oct. 10, 2018shares | Aug. 15, 2018shares | Jul. 10, 2018shares | May 14, 2018shares | Mar. 06, 2018shares | Jan. 01, 2018shares | Dec. 08, 2017shares | Nov. 14, 2017shares | Oct. 11, 2017shares | Aug. 14, 2017shares | May 16, 2017shares | Mar. 07, 2017shares | Jan. 01, 2017shares | Dec. 31, 2018CAD ($)shares | Dec. 31, 2017CAD ($)shares |
Disclosure of range of exercise prices of outstanding share options [line items] | |||||||||||||||||
Trading days prior to redemption date | 5 days | ||||||||||||||||
Number of options (in shares) | 34,000 | 939,000 | 94,000 | 961,000 | 424,000 | 310,000 | 1,993,000 | 77,000 | 784,000 | 40,000 | 868,000 | 64,000 | 1,697,000 | 4,755,000 | 3,530,000 | ||
Number of long-term share units granted (in shares) | 843,000 | 642,000 | |||||||||||||||
Weighted average share price at the date of exercise for share options exercised (in CAD per share) | $ | $ 44.97 | $ 43.49 | |||||||||||||||
Measurement period for weighted average exercise price of lon-term share unit award incentive plans | 20 days | ||||||||||||||||
Weighted average exercise price long-term share unit award incentive plans (in CAD per share) | $ | $ 42.89 | $ 42.89 | $ 44.94 | ||||||||||||||
RSUs | |||||||||||||||||
Disclosure of range of exercise prices of outstanding share options [line items] | |||||||||||||||||
Number of long-term share units granted (in shares) | 395,000 | 303,000 | |||||||||||||||
Contractual life of outstanding long-term share unit award incentive plans | 3 years | ||||||||||||||||
PSUs | |||||||||||||||||
Disclosure of range of exercise prices of outstanding share options [line items] | |||||||||||||||||
Number of long-term share units granted (in shares) | 404,000 | 307,000 | |||||||||||||||
Contractual life of outstanding long-term share unit award incentive plans | 3 years | ||||||||||||||||
Options vesting on first anniversary of grant date | |||||||||||||||||
Disclosure of range of exercise prices of outstanding share options [line items] | |||||||||||||||||
Number of options (in shares) | 0.3333 | ||||||||||||||||
Options vesting on first anniversary of grant date | RSUs | |||||||||||||||||
Disclosure of range of exercise prices of outstanding share options [line items] | |||||||||||||||||
Number of long-term share units granted (in shares) | 0.3333 | ||||||||||||||||
Options vesting on second anniversary of grant date | |||||||||||||||||
Disclosure of range of exercise prices of outstanding share options [line items] | |||||||||||||||||
Number of options (in shares) | 0.3333 | ||||||||||||||||
Options vesting on second anniversary of grant date | RSUs | |||||||||||||||||
Disclosure of range of exercise prices of outstanding share options [line items] | |||||||||||||||||
Number of long-term share units granted (in shares) | 0.3333 | ||||||||||||||||
Options vesting on third anniversary of grant date | |||||||||||||||||
Disclosure of range of exercise prices of outstanding share options [line items] | |||||||||||||||||
Number of options (in shares) | 0.3333 | ||||||||||||||||
Options vesting on third anniversary of grant date | RSUs | |||||||||||||||||
Disclosure of range of exercise prices of outstanding share options [line items] | |||||||||||||||||
Number of long-term share units granted (in shares) | 0.3333 | ||||||||||||||||
Minimum | |||||||||||||||||
Disclosure of range of exercise prices of outstanding share options [line items] | |||||||||||||||||
DSUs as a percent of total director compensation | 40.00% | 40.00% |
SHARE-BASED PAYMENTS - Grand Da
SHARE-BASED PAYMENTS - Grand Date Share Options Granted to Employees (Details) shares in Thousands | Dec. 31, 2018sharesyear | Nov. 13, 2018sharesyear | Oct. 10, 2018sharesyear | Aug. 15, 2018sharesyear | Jul. 10, 2018sharesyear | May 14, 2018sharesyear | Mar. 06, 2018sharesyear | Dec. 08, 2017sharesyear | Nov. 14, 2017sharesyear | Oct. 11, 2017sharesyear | Aug. 14, 2017sharesyear | May 16, 2017sharesyear | Mar. 07, 2017sharesyear | Dec. 31, 2018sharesyear | Dec. 31, 2017shares |
Share-based Payment Arrangements [Abstract] | |||||||||||||||
Number of options (in shares) | shares | 34 | 939 | 94 | 961 | 424 | 310 | 1,993 | 77 | 784 | 40 | 868 | 64 | 1,697 | 4,755 | 3,530 |
Contractual life of options | year | 7 | 7 | 7 | 7 | 7 | 7 | 7 | 7 | 7 | 7 | 7 | 7 | 7 | 7 |
SHARE-BASED PAYMENTS - Long-ter
SHARE-BASED PAYMENTS - Long-term Share Unit Aware Incentive Plan (Details) - shares shares in Thousands | Jan. 01, 2018 | Jan. 01, 2017 |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Number of long-term share units granted (in shares) | 843 | 642 |
PSUs | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Number of long-term share units granted (in shares) | 404 | 307 |
RSUs | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Number of long-term share units granted (in shares) | 395 | 303 |
DSUs | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Number of long-term share units granted (in shares) | 44 | 32 |
SHARE-BASED PAYMENTS - Share Op
SHARE-BASED PAYMENTS - Share Option Plan (Details) shares in Thousands | Dec. 31, 2018CAD ($)shares | Nov. 13, 2018shares | Oct. 10, 2018shares | Aug. 15, 2018shares | Jul. 10, 2018shares | May 14, 2018shares | Mar. 06, 2018shares | Dec. 08, 2017shares | Nov. 14, 2017shares | Oct. 11, 2017shares | Aug. 14, 2017shares | May 16, 2017shares | Mar. 07, 2017shares | Dec. 31, 2018CAD ($)shares | Dec. 31, 2017CAD ($)shares |
Share-based Payment Arrangements [Abstract] | |||||||||||||||
Options outstanding, beginning balance (in shares) | shares | 15,677 | 14,310 | |||||||||||||
Granted (in shares) | shares | 34 | 939 | 94 | 961 | 424 | 310 | 1,993 | 77 | 784 | 40 | 868 | 64 | 1,697 | 4,755 | 3,530 |
Exercised (in shares) | shares | (1,729) | (1,405) | |||||||||||||
Forfeited (in shares) | shares | (523) | (502) | |||||||||||||
Expired (in shares) | shares | (252) | (256) | |||||||||||||
Options outstanding, ending balance (in shares) | shares | 17,928 | 17,928 | 15,677 | ||||||||||||
Weighted average exercise price, outstanding, beginning balance (in CAD per share) | $ | $ 40.94 | $ 39.68 | |||||||||||||
Weighted average exercise price, granted (in CAD per share) | $ | 43.86 | 43.28 | |||||||||||||
Weighted average exercise price, exercised (in CAD per share) | $ | 35.34 | 33.03 | |||||||||||||
Weighted average exercise price, forfeited (in CAD per share) | $ | 41.56 | 40.58 | |||||||||||||
Weighted average exercise price, expired (in CAD per share) | $ | 49.2 | 47.15 | |||||||||||||
Weighted average exercise price, outstanding, ending balance (in CAD per share) | $ | $ 42.12 | $ 42.12 | $ 40.94 |
SHARE-BASED PAYMENTS - Exercise
SHARE-BASED PAYMENTS - Exercise Price Range of Outstanding Share Options (Details) shares in Thousands | Dec. 31, 2018CAD ($)sharesyear | Dec. 31, 2017shares | Dec. 31, 2016shares |
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | |||
Number outstanding (in shares) | 17,928 | 15,677 | 14,310 |
Options Exercisable (in shares) | 9,640 | ||
Weighted average remaining life (in years) | year | 4.50 | ||
$26.52 – $39.14 | |||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | |||
Number outstanding (in shares) | 4,015 | ||
Options Exercisable (in shares) | 2,825 | ||
Weighted average remaining life (in years) | year | 3.65 | ||
$39.15 – $41.55 | |||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | |||
Number outstanding (in shares) | 4,000 | ||
Options Exercisable (in shares) | 1,690 | ||
Weighted average remaining life (in years) | year | 4.93 | ||
$41.56 – $43.56 | |||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | |||
Number outstanding (in shares) | 4,216 | ||
Options Exercisable (in shares) | 2,651 | ||
Weighted average remaining life (in years) | year | 4.20 | ||
$43.57 – $46.00 | |||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | |||
Number outstanding (in shares) | 2,571 | ||
Options Exercisable (in shares) | 285 | ||
Weighted average remaining life (in years) | year | 6.41 | ||
$46.01 – $52.01 | |||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | |||
Number outstanding (in shares) | 3,126 | ||
Options Exercisable (in shares) | 2,189 | ||
Weighted average remaining life (in years) | year | 3.88 | ||
Minimum | $26.52 – $39.14 | |||
Disclosure of range of exercise prices of outstanding share options [line items] | |||
Exercise price of outstanding share options | $ | $ 26.52 | ||
Minimum | $39.15 – $41.55 | |||
Disclosure of range of exercise prices of outstanding share options [line items] | |||
Exercise price of outstanding share options | $ | 39.15 | ||
Minimum | $41.56 – $43.56 | |||
Disclosure of range of exercise prices of outstanding share options [line items] | |||
Exercise price of outstanding share options | $ | 41.56 | ||
Minimum | $43.57 – $46.00 | |||
Disclosure of range of exercise prices of outstanding share options [line items] | |||
Exercise price of outstanding share options | $ | 43.57 | ||
Minimum | $46.01 – $52.01 | |||
Disclosure of range of exercise prices of outstanding share options [line items] | |||
Exercise price of outstanding share options | $ | 46.01 | ||
Maximum | $26.52 – $39.14 | |||
Disclosure of range of exercise prices of outstanding share options [line items] | |||
Exercise price of outstanding share options | $ | 39.14 | ||
Maximum | $39.15 – $41.55 | |||
Disclosure of range of exercise prices of outstanding share options [line items] | |||
Exercise price of outstanding share options | $ | 41.55 | ||
Maximum | $41.56 – $43.56 | |||
Disclosure of range of exercise prices of outstanding share options [line items] | |||
Exercise price of outstanding share options | $ | 43.56 | ||
Maximum | $43.57 – $46.00 | |||
Disclosure of range of exercise prices of outstanding share options [line items] | |||
Exercise price of outstanding share options | $ | 46 | ||
Maximum | $46.01 – $52.01 | |||
Disclosure of range of exercise prices of outstanding share options [line items] | |||
Exercise price of outstanding share options | $ | $ 52.01 |
SHARE-BASED PAYMENTS - Share _2
SHARE-BASED PAYMENTS - Share Options Granted (Details) | 12 Months Ended | |
Dec. 31, 2018CAD ($)year | Dec. 31, 2017CAD ($)year | |
Share-based Payment Arrangements [Abstract] | ||
Weighted average fair value at grant date | $ 3.86 | $ 4.49 |
Weighted average share price at grant date | 43.67 | 43.13 |
Weighted average exercise price | $ 43.86 | $ 43.28 |
Weighted average expected volatility (percent) | 20.26% | 23.50% |
Weighted average expected option life (years) | year | 3.67 | 3.67 |
Expected annual dividends per option | $ 2.24 | $ 2.04 |
Expected forfeitures (percent) | 6.70% | 6.10% |
Risk-free interest rate (based on government bonds)(percent) | 2.10% | 1.20% |
SHARE-BASED PAYMENTS - Employee
SHARE-BASED PAYMENTS - Employee Expenses (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Payment Arrangements [Abstract] | ||
Share option plan, equity settled | $ 14 | $ 16 |
Long-term share unit award incentive plan | 49 | 57 |
Share-based compensation expense | 63 | 73 |
Total carrying amount of liabilities for cash settled arrangements | 96 | 79 |
Total intrinsic value of liability for vested benefits | $ 57 | $ 36 |
FINANCIAL INSTRUMENTS - Narrati
FINANCIAL INSTRUMENTS - Narrative (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Financial Instruments [Abstract] | ||
Letters of credit outstanding, amount | $ 122 | $ 110 |
Trade receivables, current percentage | 99.00% | 96.00% |
Allowance account for credit losses of financial assets | $ 1 | $ 1 |
Expense recognised during period for bad and doubtful debts | $ 1 | $ 1 |
FINANCIAL INSTRUMENTS - Aging o
FINANCIAL INSTRUMENTS - Aging of Trade and Other Receivables (Details) - Trade receivables and other - Financial assets past due but not impaired - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of financial assets that are either past due or impaired [line items] | ||
Carrying value | $ 2 | $ 6 |
31-60 days past due | ||
Disclosure of financial assets that are either past due or impaired [line items] | ||
Carrying value | 2 | 6 |
Greater than 61 days | ||
Disclosure of financial assets that are either past due or impaired [line items] | ||
Carrying value | $ 0 | $ 0 |
FINANCIAL INSTRUMENTS - Liquidi
FINANCIAL INSTRUMENTS - Liquidity Risk (Details) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of maturity analysis for derivative financial liabilities [line items] | ||
Derivative financial liabilities | $ 6 | $ 79 |
Derivative financial liabilities, Expected Cash Flow | 6 | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | ||
Trade payables and accrued liabilities | 803 | 677 |
Taxes payable | 82 | |
Loans and borrowings | 7,537 | 7,463 |
Dividends payable | 97 | $ 91 |
Finance leases | 23 | |
Trade payables and accrued liabilities, Expected Cash Flows | 803 | |
Taxes Payable, Expected Cash Flows | 82 | |
Loans and borrowings, Expected Cash Flows | 10,794 | |
Dividends payable, Expected Cash Flows | 97 | |
Finance leases, Expected Cash Flows | 23 | |
Less than 1 year | ||
Disclosure of maturity analysis for derivative financial liabilities [line items] | ||
Derivative financial liabilities, Expected Cash Flow | 6 | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | ||
Trade payables and accrued liabilities, Expected Cash Flows | 803 | |
Taxes Payable, Expected Cash Flows | 67 | |
Loans and borrowings, Expected Cash Flows | 724 | |
Dividends payable, Expected Cash Flows | 97 | |
Finance leases, Expected Cash Flows | 9 | |
1 - 3 Years | ||
Disclosure of maturity analysis for derivative financial liabilities [line items] | ||
Derivative financial liabilities, Expected Cash Flow | 0 | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | ||
Trade payables and accrued liabilities, Expected Cash Flows | 0 | |
Taxes Payable, Expected Cash Flows | 3 | |
Loans and borrowings, Expected Cash Flows | 2,334 | |
Dividends payable, Expected Cash Flows | 0 | |
Finance leases, Expected Cash Flows | 11 | |
3 - 5 Years | ||
Disclosure of maturity analysis for derivative financial liabilities [line items] | ||
Derivative financial liabilities, Expected Cash Flow | 0 | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | ||
Trade payables and accrued liabilities, Expected Cash Flows | 0 | |
Taxes Payable, Expected Cash Flows | 4 | |
Loans and borrowings, Expected Cash Flows | 1,183 | |
Dividends payable, Expected Cash Flows | 0 | |
Finance leases, Expected Cash Flows | 3 | |
More than 5 years | ||
Disclosure of maturity analysis for derivative financial liabilities [line items] | ||
Derivative financial liabilities, Expected Cash Flow | 0 | |
Disclosure of maturity analysis for non-derivative financial liabilities [line items] | ||
Trade payables and accrued liabilities, Expected Cash Flows | 0 | |
Taxes Payable, Expected Cash Flows | 8 | |
Loans and borrowings, Expected Cash Flows | 6,553 | |
Dividends payable, Expected Cash Flows | 0 | |
Finance leases, Expected Cash Flows | $ 0 |
FINANCIAL INSTRUMENTS - Interes
FINANCIAL INSTRUMENTS - Interest Rate Risk (Details) - CAD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Fixed rate instruments | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
As at December 31 | $ 6,232,000,000 | $ 5,685,000,000 |
Variable rate instruments | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
As at December 31 | 1,305,000,000 | 1,778,000,000 |
Fixed interest rates under derivative contracts, portion of underlying instrument | 0 | 100,000,000 |
Fixed and variable rate instruments | ||
Disclosure of financial instruments by type of interest rate [line items] | ||
As at December 31 | $ 7,537,000,000 | $ 7,463,000,000 |
FINANCIAL INSTRUMENTS - Cash Fl
FINANCIAL INSTRUMENTS - Cash Flow Sensitivity Analysis for Variable Rate Instruments (Details) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure Of Sensitivity Analysis For Variable Rate Instruments [Line Items] | ||
Percentage of reasonably possible increase in interest rate | 1.00% | 1.00% |
Increase (decrease) in earnings due to reasonably possible increase in interest rate assumption | $ 13 | $ 17 |
Percentage of reasonably possible decrease in interest rate | (1.00%) | (1.00%) |
Increase (decrease) in earnings due to reasonably possible decrease in interest rate assumption | $ (13) | $ (17) |
Variable rate instruments | ||
Disclosure Of Sensitivity Analysis For Variable Rate Instruments [Line Items] | ||
Increase (decrease) in earnings due to reasonably possible increase in interest rate assumption | 13 | 18 |
Increase (decrease) in earnings due to reasonably possible decrease in interest rate assumption | (13) | (18) |
Interest rate swap | ||
Disclosure Of Sensitivity Analysis For Variable Rate Instruments [Line Items] | ||
Increase (decrease) in earnings due to reasonably possible increase in interest rate assumption | 0 | 1 |
Increase (decrease) in earnings due to reasonably possible decrease in interest rate assumption | $ 0 | $ (1) |
FINANCIAL INSTRUMENTS - Fair Va
FINANCIAL INSTRUMENTS - Fair Value of Financial Instruments (Details) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Carrying Value | $ 8,519 | $ 8,349 |
Financial assets carried at fair value | ||
Disclosure of financial assets [line items] | ||
Carrying Value | 112 | 4 |
Financial assets carried at amortized cost | ||
Disclosure of financial assets [line items] | ||
Carrying Value | 847 | 905 |
Level 1 | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Fair Value | 982 | 938 |
Level 1 | Financial assets carried at fair value | ||
Disclosure of financial assets [line items] | ||
Fair Value | 0 | 0 |
Level 1 | Financial assets carried at amortized cost | ||
Disclosure of financial assets [line items] | ||
Fair Value | 761 | 850 |
Level 2 | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Fair Value | 7,588 | 7,686 |
Level 2 | Financial assets carried at fair value | ||
Disclosure of financial assets [line items] | ||
Fair Value | 54 | 4 |
Level 2 | Financial assets carried at amortized cost | ||
Disclosure of financial assets [line items] | ||
Fair Value | 86 | 55 |
Level 3 | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Fair Value | 0 | 0 |
Level 3 | Financial assets carried at fair value | ||
Disclosure of financial assets [line items] | ||
Fair Value | 58 | 0 |
Level 3 | Financial assets carried at amortized cost | ||
Disclosure of financial assets [line items] | ||
Fair Value | 0 | 0 |
Derivative financial instruments | Financial liabilities carried at fair value | ||
Disclosure of financial liabilities [line items] | ||
Carrying Value | 6 | 79 |
Derivative financial instruments | Level 1 | Financial liabilities carried at fair value | ||
Disclosure of financial liabilities [line items] | ||
Fair Value | 0 | 0 |
Derivative financial instruments | Level 2 | Financial liabilities carried at fair value | ||
Disclosure of financial liabilities [line items] | ||
Fair Value | 6 | 79 |
Derivative financial instruments | Level 3 | Financial liabilities carried at fair value | ||
Disclosure of financial liabilities [line items] | ||
Fair Value | 0 | 0 |
Trade payables and accrued liabilities | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Carrying Value | 803 | 677 |
Trade payables and accrued liabilities | Level 1 | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Fair Value | 803 | 677 |
Trade payables and accrued liabilities | Level 2 | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Fair Value | 0 | 0 |
Trade payables and accrued liabilities | Level 3 | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Fair Value | 0 | 0 |
Taxes Payable | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Carrying Value | 82 | 25 |
Taxes Payable | Level 1 | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Fair Value | 82 | 25 |
Taxes Payable | Level 2 | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Fair Value | 0 | 0 |
Taxes Payable | Level 3 | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Fair Value | 0 | 0 |
Dividends payable | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Carrying Value | 97 | 91 |
Dividends payable | Level 1 | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Fair Value | 97 | 91 |
Dividends payable | Level 2 | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Fair Value | 0 | 0 |
Dividends payable | Level 3 | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Fair Value | 0 | 0 |
Loans and borrowings | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Carrying Value | 7,537 | 7,463 |
Loans and borrowings | Level 1 | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Fair Value | 0 | 0 |
Loans and borrowings | Level 2 | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Fair Value | 7,588 | 7,686 |
Loans and borrowings | Level 3 | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Fair Value | 0 | 0 |
Convertible debentures | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Carrying Value | 0 | 93 |
Convertible debentures | Level 1 | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Fair Value | 0 | 145 |
Convertible debentures | Level 2 | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Fair Value | 0 | 0 |
Convertible debentures | Level 3 | Financial liabilities carried at amortized cost | ||
Disclosure of financial liabilities [line items] | ||
Fair Value | 0 | 0 |
Derivative financial instruments | Financial assets carried at fair value | ||
Disclosure of financial assets [line items] | ||
Carrying Value | 54 | 4 |
Derivative financial instruments | Level 1 | Financial assets carried at fair value | ||
Disclosure of financial assets [line items] | ||
Fair Value | 0 | 0 |
Derivative financial instruments | Level 2 | Financial assets carried at fair value | ||
Disclosure of financial assets [line items] | ||
Fair Value | 54 | 4 |
Derivative financial instruments | Level 3 | Financial assets carried at fair value | ||
Disclosure of financial assets [line items] | ||
Fair Value | 0 | 0 |
Advances to related parties | Financial assets carried at fair value | ||
Disclosure of financial assets [line items] | ||
Carrying Value | 58 | 0 |
Advances to related parties | Financial assets carried at amortized cost | ||
Disclosure of financial assets [line items] | ||
Carrying Value | 77 | 42 |
Advances to related parties | Level 1 | Financial assets carried at fair value | ||
Disclosure of financial assets [line items] | ||
Fair Value | 0 | 0 |
Advances to related parties | Level 1 | Financial assets carried at amortized cost | ||
Disclosure of financial assets [line items] | ||
Fair Value | 0 | 0 |
Advances to related parties | Level 2 | Financial assets carried at fair value | ||
Disclosure of financial assets [line items] | ||
Fair Value | 0 | 0 |
Advances to related parties | Level 2 | Financial assets carried at amortized cost | ||
Disclosure of financial assets [line items] | ||
Fair Value | 77 | 42 |
Advances to related parties | Level 3 | Financial assets carried at fair value | ||
Disclosure of financial assets [line items] | ||
Fair Value | 58 | 0 |
Advances to related parties | Level 3 | Financial assets carried at amortized cost | ||
Disclosure of financial assets [line items] | ||
Fair Value | 0 | 0 |
Cash and cash equivalents | Financial assets carried at amortized cost | ||
Disclosure of financial assets [line items] | ||
Carrying Value | 157 | 321 |
Cash and cash equivalents | Level 1 | Financial assets carried at amortized cost | ||
Disclosure of financial assets [line items] | ||
Fair Value | 157 | 321 |
Cash and cash equivalents | Level 2 | Financial assets carried at amortized cost | ||
Disclosure of financial assets [line items] | ||
Fair Value | 0 | 0 |
Cash and cash equivalents | Level 3 | Financial assets carried at amortized cost | ||
Disclosure of financial assets [line items] | ||
Fair Value | 0 | 0 |
Trade receivables and other | Financial assets carried at amortized cost | ||
Disclosure of financial assets [line items] | ||
Carrying Value | 604 | 529 |
Trade receivables and other | Level 1 | Financial assets carried at amortized cost | ||
Disclosure of financial assets [line items] | ||
Fair Value | 604 | 529 |
Trade receivables and other | Level 2 | Financial assets carried at amortized cost | ||
Disclosure of financial assets [line items] | ||
Fair Value | 0 | 0 |
Trade receivables and other | Level 3 | Financial assets carried at amortized cost | ||
Disclosure of financial assets [line items] | ||
Fair Value | 0 | 0 |
Other assets | Financial assets carried at amortized cost | ||
Disclosure of financial assets [line items] | ||
Carrying Value | 9 | 13 |
Other assets | Level 1 | Financial assets carried at amortized cost | ||
Disclosure of financial assets [line items] | ||
Fair Value | 0 | 0 |
Other assets | Level 2 | Financial assets carried at amortized cost | ||
Disclosure of financial assets [line items] | ||
Fair Value | 9 | 13 |
Other assets | Level 3 | Financial assets carried at amortized cost | ||
Disclosure of financial assets [line items] | ||
Fair Value | $ 0 | $ 0 |
FINANCIAL INSTRUMENTS - Inter_2
FINANCIAL INSTRUMENTS - Interest Rates Used for Determining Fair Values (Details) - Discounted cash flow | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Derivatives | Minimum | ||
Disclosure of significant unobservable inputs used in fair value measurement of liabilities [line items] | ||
Interest rates used for determining fair value | 2.20% | 1.40% |
Derivatives | Maximum | ||
Disclosure of significant unobservable inputs used in fair value measurement of liabilities [line items] | ||
Interest rates used for determining fair value | 2.30% | 1.80% |
Loans and borrowings | Minimum | ||
Disclosure of significant unobservable inputs used in fair value measurement of liabilities [line items] | ||
Interest rates used for determining fair value | 2.60% | 2.00% |
Loans and borrowings | Maximum | ||
Disclosure of significant unobservable inputs used in fair value measurement of liabilities [line items] | ||
Interest rates used for determining fair value | 5.60% | 4.70% |
FINANCIAL INSTRUMENTS - Summary
FINANCIAL INSTRUMENTS - Summary of Net Derivative Financial Instruments (Details) - CAD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of financial assets [line items] | ||
Current Asset | $ 54 | $ 4 |
Non-Current Asset | 0 | 0 |
Disclosure of financial liabilities [line items] | ||
Current Liability | (6) | (79) |
Non-Current Liability | 0 | 0 |
Total | 48 | (75) |
Commodity, power, storage and rail financial instruments | ||
Disclosure of financial liabilities [line items] | ||
Current Liability | (2) | (31) |
Non-Current Liability | 0 | 0 |
Total | 42 | (27) |
Interest rate | ||
Disclosure of financial liabilities [line items] | ||
Current Liability | 0 | (2) |
Non-Current Liability | 0 | 0 |
Total | 0 | (2) |
Foreign exchange | ||
Disclosure of financial liabilities [line items] | ||
Current Liability | (4) | 0 |
Non-Current Liability | 0 | 0 |
Total | 6 | 0 |
Conversion feature of convertible debentures (Note 14) | ||
Disclosure of financial liabilities [line items] | ||
Current Liability | 0 | (46) |
Non-Current Liability | 0 | 0 |
Total | 0 | (46) |
Commodity, power, storage and rail financial instruments | ||
Disclosure of financial assets [line items] | ||
Current Asset | 44 | 4 |
Non-Current Asset | 0 | 0 |
Interest rate | ||
Disclosure of financial assets [line items] | ||
Current Asset | 0 | 0 |
Non-Current Asset | 0 | 0 |
Foreign exchange | ||
Disclosure of financial assets [line items] | ||
Current Asset | 10 | 0 |
Non-Current Asset | 0 | 0 |
Conversion feature of convertible debentures (Note 14) | ||
Disclosure of financial assets [line items] | ||
Current Asset | 0 | 0 |
Non-Current Asset | $ 0 | $ 0 |
FINANCIAL INSTRUMENTS - Sensiti
FINANCIAL INSTRUMENTS - Sensitivity Analysis of Market Risk (Details) $ in Millions | Dec. 31, 2018CAD ($)$ / bbl$ / gal$ / $$ / GJ | Dec. 31, 2017CAD ($) |
Disclosure Of Sensitivity Analysis For Types Of Market Risk [Line Items] | ||
Percentage of reasonably possible increase in interest rate | 1.00% | 1.00% |
Percentage of reasonably possible decrease in interest rate | (1.00%) | (1.00%) |
Increase (decrease) in earnings due to reasonably possible increase in interest rate assumption | $ 13 | $ 17 |
Increase (decrease) in earnings due to reasonably possible decrease in interest rate assumption | $ (13) | $ (17) |
Frac spread related Natural gas | ||
Disclosure Of Sensitivity Analysis For Types Of Market Risk [Line Items] | ||
Value of reasonably possible increase in price | $ / GJ | 0.25 | |
Value of reasonably possible decrease in price | $ / GJ | 0.25 | |
Increase (decrease) in earnings due to reasonably possible increase in price | $ 2 | |
Increase (decrease) in earnings due to reasonably possible decrease in price | $ (2) | |
Frac spread related NGL (includes propane, butane and condensate) | ||
Disclosure Of Sensitivity Analysis For Types Of Market Risk [Line Items] | ||
Value of reasonably possible increase in price | $ / gal | 0.10 | |
Value of reasonably possible decrease in price | $ / gal | 0.10 | |
Increase (decrease) in earnings due to reasonably possible increase in price | $ (9) | |
Increase (decrease) in earnings due to reasonably possible decrease in price | $ 9 | |
Foreign exchange interest rate | ||
Disclosure Of Sensitivity Analysis For Types Of Market Risk [Line Items] | ||
Value of reasonably possible increase in price | $ / $ | 0.10 | |
Value of reasonably possible decrease in price | $ / $ | 0.10 | |
Increase (decrease) in earnings due to reasonably possible increase in price | $ 13 | |
Increase (decrease) in earnings due to reasonably possible decrease in price | $ (13) | |
Product margin on Crude oil | ||
Disclosure Of Sensitivity Analysis For Types Of Market Risk [Line Items] | ||
Value of reasonably possible increase in price | $ / bbl | 2.50 | |
Value of reasonably possible decrease in price | $ / bbl | 2.50 | |
Increase (decrease) in earnings due to reasonably possible increase in price | $ (3) | |
Increase (decrease) in earnings due to reasonably possible decrease in price | $ 3 | |
Product margin on NGL | ||
Disclosure Of Sensitivity Analysis For Types Of Market Risk [Line Items] | ||
Value of reasonably possible increase in price | $ / gal | 0.10 | |
Value of reasonably possible decrease in price | $ / gal | 0.10 | |
Corporate Interest rate | ||
Disclosure Of Sensitivity Analysis For Types Of Market Risk [Line Items] | ||
Percentage of reasonably possible increase in interest rate | 0.50% | |
Percentage of reasonably possible decrease in interest rate | 0.50% | |
Increase (decrease) in earnings due to reasonably possible increase in interest rate assumption | $ 0 | |
Increase (decrease) in earnings due to reasonably possible decrease in interest rate assumption | $ 0 |
OPERATING LEASES - Leases as Le
OPERATING LEASES - Leases as Lessee (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018CAD ($) | |
Disclosure of maturity analysis of operating lease payments [line items] | |
Minimum sub-lease payments | $ 85 |
Minimum | |
Disclosure of maturity analysis of operating lease payments [line items] | |
Lessee operating lease term | 1 year |
Maximum | |
Disclosure of maturity analysis of operating lease payments [line items] | |
Lessee operating lease term | 16 years |
OPERATING LEASES - Leases as _2
OPERATING LEASES - Leases as Lessor (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of finance lease and operating lease by lessor [line items] | ||
Operating lease revenue as receivable | $ 1,355 | $ 1,010 |
Property, plant and equipment | 14,730 | 13,546 |
Operating lease revenue | 78 | 62 |
Property, plant and equipment under operating leases | ||
Disclosure of finance lease and operating lease by lessor [line items] | ||
Property, plant and equipment | 614 | 484 |
Less than 1 year | ||
Disclosure of finance lease and operating lease by lessor [line items] | ||
Operating lease revenue as receivable | 80 | 62 |
Between 1 and 5 years | ||
Disclosure of finance lease and operating lease by lessor [line items] | ||
Operating lease revenue as receivable | 376 | 246 |
More than 5 years | ||
Disclosure of finance lease and operating lease by lessor [line items] | ||
Operating lease revenue as receivable | $ 899 | $ 702 |
Minimum | ||
Disclosure of finance lease and operating lease by lessor [line items] | ||
Lessor operating lease term | 25 years | |
Maximum | ||
Disclosure of finance lease and operating lease by lessor [line items] | ||
Lessor operating lease term | 30 years | |
Lessor operating lease term of renewal | 10 years |
GROUP ENTITIES (Details)
GROUP ENTITIES (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Pembina Pipeline | ||
Disclosure of subsidiaries [line items] | ||
Ownership Interest | 100.00% | 100.00% |
Pembina Gas Services Limited Partnership | ||
Disclosure of subsidiaries [line items] | ||
Ownership Interest | 100.00% | 100.00% |
Pembina Oil Sands Pipeline L.P. | ||
Disclosure of subsidiaries [line items] | ||
Ownership Interest | 100.00% | 100.00% |
Pembina Midstream Limited Partnership | ||
Disclosure of subsidiaries [line items] | ||
Ownership Interest | 100.00% | 100.00% |
Pembina Infrastructure and Logistics L.P. | ||
Disclosure of subsidiaries [line items] | ||
Ownership Interest | 100.00% | 100.00% |
Pembina Holding Canada L.P. | ||
Disclosure of subsidiaries [line items] | ||
Ownership Interest | 100.00% | 100.00% |
Pembina U.S. Corporation | ||
Disclosure of subsidiaries [line items] | ||
Ownership Interest | 100.00% | 100.00% |
RELATED PARTIES - Equity Accoun
RELATED PARTIES - Equity Accounted Investees (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party [Abstract] | ||
Services provided | $ 42 | $ 8 |
Interest income | 6 | 1 |
Advances to related parties | 135 | 42 |
Trade receivables and other | $ 12 | $ 5 |
RELATED PARTIES - Narrative (De
RELATED PARTIES - Narrative (Details) - CAD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of transactions between related parties [line items] | ||
Contributions to equity accounted investees | $ 58,000,000 | $ 7,000,000 |
Defined benefit plan, balance payable | 0 | 0 |
Canada Kuwait Petrochemical Corporation | ||
Disclosure of transactions between related parties [line items] | ||
Contributions to equity accounted investees | 58,000,000 | 13,000,000 |
Ruby Pipeline | ||
Disclosure of transactions between related parties [line items] | ||
Contributions to equity accounted investees | $ 75,000,000 | $ 29,000,000 |
RELATED PARTIES - Key Managemen
RELATED PARTIES - Key Management Personnel Compensation (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party [Abstract] | ||
Short-term employee benefits | $ 10 | $ 8 |
Share-based compensation and other | 13 | 7 |
Total compensation of key management | $ 23 | $ 15 |
RELATED PARTIES - Post-employme
RELATED PARTIES - Post-employment Benefit Plans (Details) - CAD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party [Abstract] | ||
Defined benefit plan | $ 19 | $ 16 |
COMMITMENTS, CONTINGENCIES AN_3
COMMITMENTS, CONTINGENCIES AND GUARANTEES - Contractual Obligations (Details) - Dec. 31, 2018 $ in Millions, $ in Millions | CAD ($) | USD ($) |
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | $ 12,687 | |
Leases and other | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 796 | |
Loans and borrowings | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 10,794 | |
Construction commitments | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 1,001 | |
Advances to related parties | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 96 | |
Less than 1 year | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 1,581 | |
Less than 1 year | Leases and other | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 118 | |
Less than 1 year | Loans and borrowings | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 724 | |
Less than 1 year | Construction commitments | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 643 | |
Less than 1 year | Advances to related parties | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 96 | |
1 - 3 Years | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 2,588 | |
1 - 3 Years | Leases and other | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 220 | |
1 - 3 Years | Loans and borrowings | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 2,334 | |
1 - 3 Years | Construction commitments | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 34 | |
1 - 3 Years | Advances to related parties | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 0 | |
3 - 5 Years | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 1,365 | |
3 - 5 Years | Leases and other | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 163 | |
3 - 5 Years | Loans and borrowings | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 1,183 | |
3 - 5 Years | Construction commitments | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 19 | |
3 - 5 Years | Advances to related parties | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 0 | |
After 5 years | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 7,153 | |
After 5 years | Leases and other | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 295 | |
After 5 years | Loans and borrowings | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 6,553 | |
After 5 years | Construction commitments | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 305 | |
After 5 years | Advances to related parties | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | 0 | |
Less than three months | Advances to related parties | Ruby Pipeline | ||
Disclosure of contingent liabilities [line items] | ||
Total contractual obligations | $ 96 | $ 70 |
COMMITMENTS, CONTINGENCIES AN_4
COMMITMENTS, CONTINGENCIES AND GUARANTEES - Narrative (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2018CAD ($)MWMBbls | Dec. 31, 2017CAD ($) | |
Disclosure of contingent liabilities [line items] | ||
Letters of credit outstanding, amount | $ | $ 69 | $ 26 |
Natural Gas | Minimum | ||
Disclosure of contingent liabilities [line items] | ||
Commitments maturity, term | 1 year | |
Natural Gas | Maximum | ||
Disclosure of contingent liabilities [line items] | ||
Commitments maturity, term | 10 years | |
Natural Gas | Not More than Nine Years | Minimum | ||
Disclosure of contingent liabilities [line items] | ||
Commitments, quantity secured | 24 | |
Natural Gas | Not More than Nine Years | Maximum | ||
Disclosure of contingent liabilities [line items] | ||
Commitments, quantity secured | 105 | |
Electrical Power | Minimum | ||
Disclosure of contingent liabilities [line items] | ||
Commitments maturity, term | 1 year | |
Electrical Power | Maximum | ||
Disclosure of contingent liabilities [line items] | ||
Commitments maturity, term | 25 years | |
Electrical Power | Not More than Twenty Five Years | Maximum | ||
Disclosure of contingent liabilities [line items] | ||
Daily power required | MW | 59 |