Good morning. Before we begin, please recognize and acknowledge the ancestral home, culture, and oral teachings of the Treaty 7 signatories, which includes the Stoney- Nakodas, nations comprised of the Chiniki, Bearspaw, and Goodstoney First Nations, as well as the Siksika, Kainai, Piikani, and Tsuu T'ina First Nations. We acknowledge that this territory is also home to the Métis Nation within the Alberta Battle River Territory District five and six. Welcome, everyone. My name is Jim Bertram, and I am the chair of Keyera's board of directors. Thank you for joining us today for our 2025 annual and special meeting of shareholders. We're holding the meeting in person and online. Applying technology by allowing virtual participation will make the meeting more relevant, accessible, and engaging for all involved, permitting a broader base of shareholders to participate regardless of their geographic location.
Today, I'm joined by Dean Setoguchi, Keyera's President and Chief Executive Officer; Christy Elliott, Keyera's General Counsel and Corporate Secretary. I'm also joined by Eileen Marikar, Keyera's Chief Financial Officer, who is available to answer any questions. Our 2025 director nominees and Keyera's executive team, as well as representatives from Deloitte LLP, Keyera's independent auditors, are also attending today's meeting in person or virtually. Before beginning the formal part of the meeting, I wish to take a few moments on behalf of the board to acknowledge two individuals who have been instrumental to Keyera and its success. I wish to acknowledge our current Lead Independent Director, Doug Haughey, and Director, Michael Norris, who are not standing for reelection to the board at this meeting.
On behalf of the board, I wish to extend our deepest appreciation and sincere gratitude to Doug and Michael for their many contributions as directors, including Doug acting as chair of our Governance and Sustainability Committee and Michael acting as chair of our Audit Committee. We wish to thank you both for your service as directors and extend our best wishes to you and your families in the future. Guys, your wisdom and leadership will be missed by me and the board, as well as your friendship. I will now ask Christy to take us through the details of the meeting. Christy.
Thank you, Jim. Welcome to our shareholders and all other guests attending the meeting this morning. Today, we are joined in person and online by our board of directors. As Jim noted, Doug Haughey and Michael Norris are not standing for reelection. In addition, Tim Kitchen and Bob Pritchard are standing for election to the board for the first time at this meeting. All remaining current directors, including our Chair, Jim Bertram, have been nominated by the board for election at this meeting. Our nominated directors standing for election are Jim Bertram, Isabelle Brassard, Michael Crothers, Blair Goertzen, Tim Kitchen, Gianna Manes, Thomas O'Connor, Bob Pritchard, Charlene Ripley, Dean Setoguchi, and Janet Woodruff. We will conduct today's meeting in three parts. First, we will complete the business portion of the meeting.
During this portion, shareholders will have the opportunity to vote and submit questions on each item of business described in our notice of meeting. Following the business portion, our President and CEO, Dean Setoguchi, will provide a brief presentation and business update on Keyera. The final portion of the meeting will consist of a question and answer session to address inquiries that have been submitted online. We remind you that only shareholders and proxy holders who are attending in person or who have logged on using their 12-digit control number are able to vote today. These shareholders and proxy holders may vote on any and all business items at any time during the business portion of the meeting. Thank you to those shareholders who voted prior to the meeting.
If you voted in advance and do not wish to change your vote, there is nothing further that you need to do. If you wish to change your vote, you can submit your vote using the handheld device or online during the meeting. This action will have the same effect as revoking your previously submitted proxy. For those attending online, instructions on how to vote will appear on your screens. Voting polls will remain open until the conclusion of the business portion of the meeting. Shareholders and proxy holders may also submit questions at any time during the meeting. If you're attending online and wish to submit a question, please select the messaging tab and enter your comment or question in the Ask a Question box. You may submit a question at any time from now until the conclusion of the Q&A portion of the meeting.
We will endeavor to address as many of the questions submitted as we can. Unanswered questions will be addressed on our website at keyera.com shortly after the meeting. I would also like to remind you that some of the statements made in this meeting may be considered forward-looking. We encourage you to review the cautionary statements and other information contained in our filings on SEDAR, which outline a number of factors that could cause actual results to differ materially from those projected in any forward-looking statements made during, excuse me, during the meeting. Copies of these filings are available on our website at keyera.com or on SEDAR at sedarplus.ca. As the virtual component of this meeting depends on technology, we appreciate your patience in the event we need to pause or experience technical issues. I will now invite our Board Chair, Jim Bertram, to call the meeting to order.
Thank you, Christy. It is now shortly after 10:00 A.M. Mountain Time on May 15th, 2025. This meeting is officially called to order. As provided in our bylaws, I will act as chairman of this meeting. Christy Elliott will act as secretary. Nazim Nathoo of Odyssey Trust has been appointed to act as scrutineer. We will now deal with the business items specified in the notice of the meeting. Voting on these items will be conducted by poll. You may vote on all or any one of the business items at any time prior to closing of the polls. I now declare voting to be open on all resolutions. I'll now ask Christy to lead us through each of these business items. Christy.
Thank you, Jim. I confirm that on April 15th, 2025, the notice of the meeting related circular form and or related circular and form of proxy were mailed to shareholders of record as of March 27th, 2025. The scrutineer's report shows that a quorum of shareholders is present for the transaction of business at this meeting. A copy of the scrutineer's report, along with an affidavit confirming the mailing of the notice and related materials, will be filed with the records of today's meeting. With respect to the formal business portion of the meeting, I will read each business item. We will then pause briefly to enable shareholders and proxy holders an opportunity to vote, to confirm whether any related and to confirm whether any related questions have been submitted. Where a question has been received on a specific business item, we will seek to address it at that time.
Questions of a more general nature will be addressed during the Q&A portion of the meeting. As Jim noted, voting for all business items is now open. Voting will remain open until the last item of business is concluded and voting is declared to be closed. Certain shareholders have volunteered to move or second motions in respect of each item of business. I will call on these individuals at the appropriate time. Preliminary voting results have been received and will be announced at the conclusion of the formal business portion of the meeting. The first item of business is to receive the audited consolidated financial statements for the year ended December 31st, 2024. The financial statements have been approved by the board of directors and previously mailed to shareholders. I confirm we've received no questions on the financial statements.
As no shareholder vote is required or proposed with respect to the financial statements, I'll proceed to the next item. The second item of business is the election of directors. The board has fixed the number of directors to be elected at this meeting at 11. Accordingly, there are 11 directors nominated for election at this meeting. Information about each of our 11 director nominees is provided at pages 24 through 48 of our circular. Shareholders have the ability to vote for or withhold from voting for each individual director nominee. In accordance with the advance notice provisions of our bylaws, the only persons nominated to stand for election at this meeting are the director nominees set forth in our circular. As there are no further nominations, I declare the nominations to be closed. May I please have a motion on this item?
My name is Mark Elliott. I'm a shareholder, and I move that each of Jim Bertram, Isabelle Brassard, Michael Crothers, Blair Goertzen, Tim Kitchen, Gianna Manes, Thomas O'Connor, Bob Pritchard, Charlene Ripley, Dean Setoguchi, and Janet Woodruff be hereby elected directors of Keyera Corp. to hold office until the next annual meeting of shareholders or until their respective successors have been appointed.
My name is Brandon Wood. I am a shareholder, and I second the motion.
Thank you. Mr. Chairman, I confirm we've received no questions on the election of directors. Shareholders and proxy holders are invited to submit their vote now if you've not already done so. The next item involves the appointment of Deloitte LLP Chartered Professional Accountants as the corporation's independent auditors for the upcoming year. The board of directors recommends the appointment of Deloitte LLP as auditor. May I please have a motion on this matter?
My name is Mark Elliott. I'm a shareholder, and I move that Deloitte LLP Chartered Professional Accountants be appointed auditors of the corporation to hold office until the next annual meeting of shareholders at such remuneration as shall be fixed by the board of directors.
My name is Brandon Wood. I'm a shareholder, and I second the motion.
Thank you. Mr. Chairman, I confirm we've received no questions on the appointment of auditors. Shareholders and proxy holders may submit their vote now if they've not already done so. The next item involves the approval of all unallocated awards under the corporation's long-term incentive plan in accordance with Section 613A of the TSX Company Manual. The full text of this resolution is set out at page 23 of our circular. The board of directors recommends that shareholders vote to approve all unallocated awards under the long-term incentive plan. May I please have a motion on this matter?
My name is Mark Elliott. I am a shareholder, and I move that the resolution set out on page 23 of the circular with respect to the approval of all unallocated awards under the long-term incentive plan be approved.
My name is Brandon Wood. I'm a shareholder, and I second the motion.
Mr. Chairman, I confirm we've received no questions on this item. Shareholders and proxy holders may submit their vote now if they've not already done so. The last item of business is an advisory vote on the corporation's approach to executive compensation, commonly referred to as a say-on-pay vote. The full text of this advisory resolution is set out at page 23 of our circular. The board of directors recommends shareholders vote to approve this resolution. I will now ask for a motion on this matter.
My name is Mark Elliott. I'm a shareholder, and I move that the ordinary resolution set out at page 23 of the circular with respect to the corporation's approach to executive compensation be approved.
My name is Brandon Wood. I am a shareholder, and I second the motion.
Thank you. Mr. Chairman, I confirm we've received no questions on this item. We invite shareholders and proxy holders to submit their vote now if you have not already done so. As this is the last item of business before the conclusion of the formal portion of the meeting, for those who have not voted on all resolutions, please do so now. Jim, I confirm that the shareholders have now had an opportunity to vote.
Thank you, Christy. As everyone has now had an opportunity to vote, I now declare the voting polls for the meeting to be closed. Christy, I would ask you to please read the preliminary voting results of the meeting.
Thank you, Jim. I've received the scrutineer's report and can confirm the preliminary voting results to be as follows. Each of the 11 nominated directors have been elected with an average support of over 96.1% of the shares voted or represented at the meeting. Deloitte LLP have been duly appointed as the corporation's auditors for the upcoming year with average support of 81.83% of shares voted or represented at the meeting. The long-term incentive plan resolution has been duly approved with support of over 85.43% of shares voted or represented at the meeting. Finally, the say-on-pay advisory resolution has been duly approved with support of over 96.03% of shares voted or represented at the meeting. Final voting results will be filed on our website as well as SEDAR as soon as practicable after the meeting.
Thank you, Christy. As that concludes the formal business of the meeting, I now declare the formal business portion of the meeting to be terminated. I will now turn the meeting over to Keyera's President and CEO, Dean Setoguchi, who will provide a brief management presentation. Dean's presentation will be followed by a question and answer session to address inquiries submitted during the meeting. You may continue to submit questions in the online platform until conclusion of the question and answer session or ask questions in person. Dean?
Thanks, Jim. Good morning, everyone. I'm pleased to see today's event. Before we begin, I want to take a moment to thank our retiring directors, Mike Norris and Doug Haughey, for their contributions over the past 12 years. Doug, I'm wondering where your shorts that you said you'd wear today are. Oh, come on, that's soft. Both Doug and Mike joined our board in 2013, and their insight, expertise, and thoughtful guidance have helped shape Keyera into what it is today. It's been a privilege to work alongside them, and their contributions to Keyera will be felt for many years to come. Thank you for that. I also want to welcome our two newly elected directors, Tim Kitchen and also Bob Pritchard, who are both here with us today. We're fortunate to have such accomplished individuals join our board.
I look forward to working with Tim and Bob as we continue to grow and move Keyera forward. Great to have you on our team. With that, I'll now direct your attention to the forward-looking information and non-GAAP financial measures on the screen. You can also find this information on our website. At Keyera, our purpose is to empower the lives of people today to create a sustainable tomorrow. We pursue this purpose by living our core values and advancing our strategic priorities every day. I'm very proud of how our team has progressed our strategic priorities in 2024. First, we remain financially disciplined. We delivered record annual EBITDA, realized margin, and net earnings. This allowed us to further strengthen our balance sheet ending the year with low leverage.
We delivered another sustainable dividend increase and received approval for a normal course issuer bid, giving us yet another tool to generate shareholder value. We also worked to make our assets more competitive. We improved our operating reliability, optimized costs, and delivered more valuable solutions for our customers. As a result, we achieved record throughput at many of our core assets. That helped drive record realized margins across all three of our business segments, and we grew our fee-for-service margin by 9% year over year. Next, we strengthened our integrated value chain. We made solid progress in advancing our capital-efficient growth projects, including the KFS FRAC II debottleneck, KFS FRAC III, and KAPS Zone 4. What you see behind me, this masterpiece, is our KFS site, and it will be the site where we expand our FRAC II and build our FRAC III.
You can also see on the right-hand side of the screen, on the other side of that windy road, that's Dow's site. That's where eventually they'll expand their cracker, and it just demonstrates how well we're positioned with our KFS site. Throughout this process, we've remained disciplined about securing the appropriate long-term contractual backing to ensure each of these projects meets our return thresholds. Finally, we made progress on long-term business sustainability. Our safety performance was strong with a lost-time incident frequency rate, emissions intensity by 25% by 2025 relative to our 2019 baseline. We delivered against all the objectives of our financial framework. We maintained our BBB investment grade rating and ended the year with net debt to EBITDA well below our target range. This financial strength provides us the opportunity, the optionality to pursue an equity self-fund organic growth opportunities that will enhance shareholder value.
Our dividend payout ratio was well within our target range, and we delivered a 16% corporate return on capital in 2024, amongst the highest in our peer group. At its core, Keyera is a dividend growth company. Since 2008, our DCF per share has grown at an annual average rate of 7%. That growth has supported a 6% average annual increase in our dividend over the same period. Looking ahead, we are well positioned for capital-efficient growth that further strengthens our integrated value chain and allows Keyera to continue on this trajectory. Despite recent commodity price volatility, we remain constructive on the growth outlook for Western Canada. Keyera is well positioned to support and benefit from this growth. Canada is home to one of the world's largest oil and gas reserves, responsibly developed under some of the most stringent environmental and social standards.
Producers here also operate with highly competitive cost structures. With new egress coming online through TMX, Coastal GasLink, LNG Canada, and more planned expansions underway, Canadian production is gaining better access to international markets. This enhanced connectivity creates a more supportive environment for producers to continue investing and growing volumes. While this outlook is encouraging, we must also recognize the factors that could impact Canada's long-term competitiveness. The recent threat of tariffs highlights the ongoing risks of barriers that can limit access. Now is the time to create a policy environment that enables responsible growth, attracts capital, and expands access to global markets for the benefit of all Canadians. Fortunately, Canadian producers are in a strong position to grow. Years of constrained egress and discounted prices have made producers resilient and efficient. They have proven they can scale production through changing market conditions.
With low leverage and strong free cash flow, producers are set to invest in growing their production, and Keyera is strategically positioned to help enable this growth. In line with this production growth, NGL volumes are also expected to grow. Transporting and processing NGLs is what Keyera does best, and we're confident in our ability to capture our fair share of this growth. Against this macro backdrop, we laid out a plan in December to grow our fee-for-service adjusted EBITDA by 7%-8% annually from 2024 to 2027. Most of this growth will come from filling available capacity on our existing infrastructure, and the rest will come from advancing capital-efficient growth projects. We are already making meaningful progress towards our growth target. In February, we sanctioned our FRAC II debottleneck, which will add about 8,000 barrels per day of capacity in 2026.
We signed new commercial agreements with Elta Gas that enhance market access and customer flexibility. Our Wapiti Gas plant is now expected to reach capacity in 2026, a year earlier than anticipated, and volumes continue to ramp up at Simonet. This morning, we announced the sanctioning of KFS FRAC III, a major expansion of our core FRAC complex in Fort Saskatchewan. When combined with the FRAC II debottleneck, these projects will increase our total FRAC capacity by about 60%. These investments are backed by long-term customer commitments with a high degree of take-or-pay and are essential to meeting the growing needs of the basin. For KAPS Zone 4, commercial discussions are nearing completion. We're also actively evaluating other opportunities for growth beyond 2027. Some of these include expanding rail and logistics capabilities, investing in new liquids extraction opportunities, and expanding gathering and processing capacity in the North region.
Any investments we pursue must be aligned with our strategy and fit within the financial guardrails of our financial framework. To wrap up, Keyera has a proven track record of creating shareholder value by staying focused on our strategy, maintaining financial discipline, and delivering value for our customers. I'm proud of our team and what we accomplished last year, and I'm excited about the opportunities ahead.