Okay, I think we're ready to go. Good afternoon, ladies and gentlemen, and welcome to the annual and special meeting of shareholders of Pembina Pipeline Corporation. My name is Randy Findlay. I am chairman of the board of directors of Pembina, and I will preside over the meeting today as chairman. With me on the podium today, we have our CEO, Mick Dilger, and Chris Sherman, who is vice president, general counsel, and corporate secretary for Pembina. In the audience today are a number of representatives of Pembina's executive management team, employees, and external advisors. We're going to ask the executives to stand up, and you can see what good-looking folks they are. What a bunch. We're so proud to have them. I would like at this time to introduce the other members of the board of directors of Pembina in attendance today.
Maybe you'll just stand as I call your name. Anne-Marie Ainsworth, Maureen Howe, Gord Kerr, David LeGresley, Bob Michaleski, Leslie O'Donoghue, Bruce Rubin, Jeff Smith, and Henry Sykes. The meeting will now come to order. I appoint Chris Sherman to act as secretary of the meeting and the representatives of Computershare Trust Company present here today, Connor Doyle and Erica Rowe, to act as scrutineers. Will the secretary please table the notice and proof of mailing of the notice of meeting?
I have received an affidavit from Computershare Trust Company of Canada indicating that the notice of meeting, information circular, and form of proxy were mailed to shareholders of record as at March 28, 2019. In addition, I have an affidavit from Computershare Trust Company of Canada confirming the mailing of the 2018 audited financial statements to shareholders on March 4th, 2019. I can also advise that the notice of this meeting and related materials were provided to the directors, officers, and the auditors of the company.
Thank you, Chris. I direct that these affidavits, together with the copies of the documents mailed to the shareholders, be kept by the secretary with the minutes of this meeting. The reading of the notice of meeting will be dispensed with. The corporation's bylaws provide that business may be transacted at a meeting if there is a quorum present. I have been advised by Computershare that a quorum is present. Accordingly, I declare that this meeting is regularly called and properly constituted for the transaction of business. We will start with the formal part of the meeting as usual, and then after its termination, we'll go into the interesting part where Mick will be making a short presentation on Pembina's activities, and he'll be available to answer any questions at that time concerning our operations.
I have requested that certain shareholders or proxy holders move and second motions proposed at this meeting. This is not intended to limit discussion or to suggest that other shareholders are not welcome to move or second motions. Registered shareholders and proxy holders should feel free to initiate discussion on any motion. However, I would ask that you to hold questions or comments not related to the specific formal motion to the general question period at the end of the meeting. If you have a question, please identify yourself, indicate whether you are a shareholder or a proxy holder. All registered shareholders who have not already submitted proxies and proxy holders were provided with forms of ballots for their use in connection with the votes to be conducted at this meeting when they registered with the scrutineers before entering the meeting.
If you are not a registered shareholder and have not completed a proxy or a proxy holder and have not yet received ballots, please raise your hand so that the scrutineers can provide you with the appropriate ballots. I think everybody's okay. I don't see any hands going up. Good. Okay. First item of business is the presentation of the financial statements for the fiscal year ended December 31, 2018. These statements, including the auditor's report, have been mailed to all registered shareholders and to beneficial shareholders who requested these materials. Extra copies are available at this meeting. Elio Luongo, Kimberly Payne, Steven Douglas, Imran Hassan, and Bruce Weatherdon of KPMG LLP, Pembina's auditors, are in attendance and are available to answer any questions following the formal part of this meeting. Okay.
The next item of business is the election of the directors of Pembina to hold office until the next annual meeting or until their successors are duly elected or appointed. The number of directors of Pembina to be elected at this meeting has been fixed at 11. Pembina's information circular sets forth management's proposed 11 director nominees. Each of the nominees remains qualified and has consented to his or her nomination as directors here today. Would the secretary please read the names of the 11 persons who have been nominated by management?
The management nominees are as follows: Randall J. Findlay, Anne-Marie N. Ainsworth, Michael H. Dilger, Maureen E. Howe, Gordon J. Kerr, David M.B. LeGresley, Robert B. Michaleski, Leslie A. O'Donoghue, Bruce D. Rubin, Jeffrey T. Smith, and Henry W. Sykes.
All of the director nominees, other than Mr. Dilger, are independent, and all of the directors currently sit on our board. I'd like to say a few words about each of the nominees. As you will see, they bring a diversity of skills and experience to our board. First of all, Ms. Ainsworth resides in the U.S. and serves on the boards of several public companies. Prior to that, she was the President and CEO of Oiltanking Partners. Prior to that, she held executive positions at Sunoco and Shell. She joined our board in October 2014. Ms. Howe has served on our board since October 2017. She currently serves as a director of Methanex Corporation, TimberWest Forest Group, and she is the Chairperson of the University of British Columbia's Hager and North Centre for Financial Research. Previously, she was Managing Director at RBC Capital Markets.
She has extensive experience in the capital markets and financial services industry, specializing in the energy infrastructure sector. Mr. Kerr was President and CEO of Enerplus Corporation until 2013 and is past Chair of the Canadian Association of Petroleum Producers. He is currently a member of the Management Advisory Council for the Haskayne School of Business at the University of Calgary. He was first appointed to the board in January 2015. Mr. LeGresley is a corporate director who serves as Board Chair of Equitable Group Inc. He was a senior executive at National Bank Financial for over 12 years and has extensive experience in the financial services industry, he's been on our board since 2010. Mr. Michaleski was Pembina CEO from January 2000 until December 2013, as well as President until January 2012. He also sits on the boards of several other public companies.
He's been on our board since 2000. Ms. O'Donoghue is the Executive Vice President, Chief Strategy and Corporate Development Officer at Nutrien Ltd. She has served on our board since 2008. In this role, she has extensive experience with, among other things, complex capital markets and mergers and acquisitions and transactions. Mr. Rubin has served on our board since May 2017. He resides in the U.S. and is an independent businessman. He has over 38 years of experience in the energy refining and petrochemical sectors. Mr. Rubin has held various executive positions with Sunoco Chemicals and Braskem America. Mr. Smith is an independent businessman and corporate director with experience in oil and gas operations, finance, mergers and acquisitions, and governance, human resources, and compensation, health, and safety. He has served on our board since 2012. Mr. Sykes has served on our board since October 2017.
He currently serves as a director of several private companies and is past Chair of Arts Commons and the Arctic Institute of North America. Previously, he was President and Director of MGM Energy Corp. and President of ConocoPhillips Canada, he was an executive at Gulf Canada Resources. We will now proceed with the election of the directors. Are there any further nominations? If there are no further nominations, I declare nominations closed. May I have a motion to elect the 11 nominees as directors of Pembina Pipeline Corporation, please?
Moved.
Thank you. Could I have a seconder?
I second the motion.
Thank you. Is there any discussion? Yes.
I would like to find out why-
Would you just, for everybody, state your name and-
It's Moraika Kinapshire, and I would like to find out why Ms. O'Donoghue, if she's working full time, why is she cheating the people at Nutrien and spending time with us or vice versa? She's not giving full value to either place if she's still working full time somewhere else.
Ms. O'Donoghue is very talented, brings lots of expertise to our board. She has a perfect record of attendance at our board meetings and our committee meetings. She was previously chair of our Governance and Nomination Committee. I can't speak for her role at Nutrien, but I can speak that she gives more than 100% to Pembina.
Okay, thank you. I just pity the people at Nutrien because there's only 24 hours a day. I'd also like to find out that in the last two years, I'm glad to see our share price has finally gone up by 11% over the last two years. Why has the pay for the directors gone up anywhere from 13% up to 46% for the directors? That is not in lockstep with what the price of the shares have gone up with.
Compensation for directors, management, and indeed to all of the folks at Pembina, we look at surveys compared to our competitors and judge the proper compensation in line with the peer groups. When we look at that, we find that we're certainly not overpaying any of our directors, any of our senior management or any of our other folks. We offer every year a say on pay for executive compensation. This year the results of that was over 90% approval of that. It's reviewed by two proxy advisory teams, ISS and Glass Lewis. Both of them recommended that folks vote in favor of the compensation that's been recommended.
I thank you for your comments, although the numbers speak for themselves that we as shareholders are only getting a 4.79% dividend. As I say, the directors are getting anywhere from 13%, 14%, 12%, 46%, 15% more. The numbers are not in lockstep no matter what you say. Even though I love you, Randy, they're not in lockstep. The third thing I'd like to make a comment on, I would like to see the board of directors from now on, instead of having their backs to us, I would like the chairs to be turned around the other way so that we can look them in the eye, and they can look us in the eye. Thank you.
Well, we can certainly try that next year. They're such a wonderful-looking group that it'll take the focus away from me when I'm trying to read this, and you'll be distracted. It's your choice. Okay. Thank you for your comments. Where were we? We had a seconder of the motion. Now, if there's no further discussion, as there are no further nominees, I've been advised that sufficient votes have been cast in advance of the meeting to elect the 11 nominees as directors of Pembina. However, in accordance with our majority voting policy for director elections, we will proceed with the voting on this matter by ballot, and the scrutineers will tabulate the votes received in favor of each director individually. The blue ballot is the ballot to be used for the vote.
Please vote on the ballot by marking an X in the box opposite for, or withhold, as the case may be, then sign and print your name on the lines provided. Then fold up your ballot, and the scrutineers will collect these ballots. Okay. Anybody still have a ballot that hasn't been collected? No? Okay. The scrutineers will count the ballots and report back to us later in the meeting. May I have a motion that the firm of KPMG LLP of Calgary, Alberta, be appointed auditors of Pembina until the next annual meeting or until a successor is appointed, and that their remuneration and the scope of their audit is to be fixed by Pembina's board upon recommendation of its audit committee.
Moved.
Thank you. Do I have a seconder?
I second the motion.
Thank you. Is there any discussion of the motion? None. All in favor signify by raising your right hand.
Who's that?
Oh, sorry. The light is coming in right there.
I realize you have that issue right now with the light in your eye. I'd like to find out why it is we have not changed auditors since 1997. To me, that cozy relationship is way too cozy. I do believe good financial fiscal accounting policy is that it be changed every five years. I'd like to know why we're so cozy with the auditors, because that is not a good thing. It's like having a fox with the key to the henhouse.
I wouldn't classify it as a cozy relationship. I would classify it as a professional relationship. Every five years, the lead auditor is required to be changed out, so that prevents coziness, if you will. Like all audit firms, they have a quality standard advisor who makes sure that the audit is being done to the high quality. In addition, the audit committee performs their Gord, is it every year or every three years you do a review of the?
We do an annual review, and then we do a review within a five-year period.
Right. Sorry.
Did I answer?
Sorry, Gord.
We do an annual review. We do an annual review. Within a five-year period, a full review. Randy Smith, right now we have the new lead auditor coming in.
Okay. If you're fine with that, I was asking for a show of hands for approval of the auditors. All right. Good. Motion carried. Now move on to the next item of business at this meeting is the approval of the continuation of Pembina's shareholders' rights plan. That was fully disclosed in our information circular. In order to be passed, the ordinary resolution must be approved by a majority of the votes cast by Pembina shareholders present in person or represented by proxy at this meeting. At this time, I would ask to have a motion to conduct a vote of Pembina shareholders to approve the resolution, which is set forth in Pembina's information circular.
Mr. Chairman, I move that the resolution on page nine of Pembina's information circular approving the continuation of Pembina's shareholders' rights plan be approved and authorized by Pembina shareholders as an ordinary resolution of Pembina shareholders.
Thank you. Is there a seconder?
I second the motion.
Thank you. You have heard the motion. Is there any discussion? If there's no discussion, we will proceed with the voting on this matter by ballot. Again, the green ballot is the ballot that's to be used for this vote. Please vote on the ballot by marking an X in the box opposite for or withhold, as the case may be, then sign and print your name on the lines provided. The scrutineers will now collect the ballots. Anybody still have a ballot that needs to be collected? No? Okay. The scrutineers will count the ballots and report back to us later in the meeting. Next item of business at this meeting is the approval of the amendment to Pembina's articles to increase the limit on the number of Class A preferred shares Pembina is authorized to issue, again, as more fully disclosed in our information circular.
In order to be passed, the special resolution must be approved by two-thirds of the votes cast by Pembina shareholders present in person or represented by proxy at this meeting. The special resolution must also be approved by the holders of Pembina's outstanding Class A preferred shares, voting as a separate class at a meeting of such shareholders currently scheduled to take place on May 31st, 2019. At this time I would ask to have a motion to conduct a vote of Pembina shareholders to approve the resolution, which is set forth in Pembina's information circular.
Mr. Chairman, I move that the resolution on pages 11 to 12 of Pembina's information circular, approving the amendment to the articles of Pembina to increase the limit of the number of Class A preferred shares Pembina is authorized to issue, be approved and authorized by Pembina shareholders as a special resolution of Pembina shareholders.
Thank you. Can I have a seconder for the motion, please?
I second the motion.
Thank you. You've heard the motion. Is there any discussion? If there's no discussion, we will proceed with the voting on this matter, again, by ballot. This time it's the yellow ballot, is the ballot to be used for this vote. I think we know the routine. Please vote on the ballot by marking an X in the box opposite for or withhold, as the case may be, then sign and print your name on the lines provided. Then please fold up your ballot, and the scrutineers will collect the ballots. The scrutineers will count the ballots, and they will bring it back to us later in the meeting. Okay, looks like we're there. Next item of business at this meeting is the approval of Pembina's approach to executive compensation, as more fully disclosed in Pembina's information circular.
In order to be passed, the non-binding resolution must be approved by a majority of the votes cast by Pembina shareholders present in person or represented by proxy at this meeting. At this time, I would ask to have a motion to conduct a vote on Pembina shareholders to approve Pembina's approach to executive compensation as set forth in Pembina's information circular.
Mr. Chairman, I move that the resolution approving Pembina's approach to executive compensation, all as more particularly described in Pembina's information circular, be approved and authorized by Pembina shareholders as a non-binding resolution of Pembina shareholders.
Thank you. Could I have a seconder, please?
I second the motion.
You've heard the motion. Is there any discussion? Yes.
What would this motion be without discussion? Again, I
What would this meeting be without your questions?
Again, I take a look at the numbers, and numbers don't generally lie. We all know that there's two people up there that I dearly love, one being Randy and the other one being Mick. However, when I take a look at compensation of our dear beloved CEO of CAD 7,131,000, I doubt, unless the first two rows of people, if we exclude them, I don't think anybody else in the room even has that much of a net worth, let alone making that in one year. That being a 22% increase over the year before when he was making CAD 5.8 million. I do believe that that's just overboard. The same with Mr. Burrows, who got an 18.9% increase, and the year before got a 22% increase, which also came on the heels of a 28% increase. Now we take a look at Mr. Taylor, likewise.
He got a 17% increase. We take a look at Mr. Murphy, a 20% increase with CAD 2.2 million. You know, folks, there's unemployed people out there who don't even have a job, and they're very qualified. I'm sure you could go out to that marketplace and get very qualified people for less money, because it all comes out of the bottom line, out of my pocket, where I'm only getting 4.7% as a dividend. I'm not exactly that happy about that. I know the shares are doing well these days, but folks, it's the little shareholder that's not getting their equal share of the pie.
If there's no further discussion, we will proceed with voting on this matter by ballot. This time we're going to use the orange ballot for the vote. Please vote on the ballot by marking an X in the box opposite for or withhold, as the case may be. Sign and print your name on the lines provided. Fold up your ballot. The scrutineers will collect them. I'm repeating myself, but I'll go back around executive compensation, that it received over 90% approval from the shareholders with their chance to vote on it. It was recommended for approval by ISS and Glass Lewis, and we used extensive surveys of our competitors as to what is the proper level of compensation for our executive team.
Chairman, with all due respect, though, I do understand what you're saying. Just because the other companies that you're comparing yourself to, just because they're running off the train trestle and jumping into the water, smoking their pot, does not mean that we have to follow suit and be equally immoral in doing so. Therefore, following the trend, if it's not a good trend, is not an acceptable answer. Thank you.
I think we've collected all the ballots. Here they come right now with the results of the ballots. Thank you. You can see, I have the scrutineers report available, let me go through the results with you. In respect to the election of directors of Pembina, I'm pleased to announce that each of the director nominees received the majority of the votes cast to be elected, the particulars of which will be posted on SEDAR following this meeting and also will be available in the press release immediately following this meeting. We will have the individual voting totals for the directors. The ordinary resolution to approve the continuation of Pembina shareholders' rights plan has been approved by approximately 94.55, I'll only go to two decimal points, of the votes cast. I declare the ordinary resolution to be passed.
Special resolution to approve the amendment to Pembina's articles to increase the limit on the number of Class A preferred shares has been approved by approximately 95% of the votes cast. Accordingly, I declare the special resolution to be passed. The resolution to approve the non-binding advisory vote on the approach to executive compensation has been approved by approximately 91.7% of the votes cast, and accordingly, I declare the non-binding resolution to be passed as well. We're ending the formal part of the business here. Is there any further business to be considered at this meeting? If not, may I have a motion to terminate the meeting, please?
I move this meeting be terminated. I second the motion.
Thank you. All those in favor signify by raising your right hand. Any contrary? I declare the formal portion of this meeting terminated. Thank you all for attending. I'd now like to turn it over to the more interesting part of the meeting, over to Mick, who's going to talk about some of the things that have gone on in the last year that I'm sure you'll find very interesting, as well as a good look into the future for Pembina. Thank you.
Nicely done.
All right. Seems like my mic is working. 65 years in 30 minutes. Here we go. Fellow shareholders, welcome. Thank you for your support, and fellow board members. We've been through a lot in the last year and a half. CAD 10 billion of acquisition, CAD 5 billion new projects, entered the petrochemical business, fighting the fight on the LNG business. It's been a real whirlwind and great guidance from this team, a very cohesive team. To my fellow employees, 2018 was a tough year. It was really tough. Everybody was performing incredibly high levels, and we got through a very tough acquisition and deployed a new strategy all in one year, and we are starting to reap the rewards of that. Just some administrative things. What this says is this presentation is full of estimates. We believe the estimates are appropriate, but they're not promises.
This page says that we are using some non-accounting measures in this presentation. I certainly won't read all those. In the last year, here's the things we've completed since the last AGM. As I mentioned, we integrated two large organizations very successfully. I got asked on the call, "How's it going?" It's going very well. When we made the acquisition, the immediate synergies are on track, and that made it a good acquisition. We've wrung more profit out of some of the assets, and we're working to exploit the Alliance Pipeline, and once we complete that, it will be a very good acquisition. Last, if we can get Jordan Cove on track, it'll be an outstanding acquisition. We're quickly zooming in on a very good transaction, and what remains possible is an outstanding transaction. We worked 7 million hours last year safely. It was unbelievable.
Most recently, the coldest February on record here, we actually set performance records. Hats off to our people in the field. I don't know how you felt if you walked your dog in the month of February, but I was sure thinking about our people out there working hard and working safely. Record pipeline volumes, almost two and a half million barrels a day, and our facilities are sneaking up on 1 million BOEs of throughput. We're really getting some size. Placed CAD 1 billion of projects into service safely, on time, and on budget. We have CAD 700 million more growth projects to implement in 2019. We raised almost CAD 800 million. The capital markets are very friendly to our company. Almost CAD 5 billion in new projects secured.
The most noteworthy were the Peace expansions as well as the entry, the FID on our petrochemical joint venture, which was CAD 2.5 billion net to Pembina. Extremely exciting. Then we just announced the annual dividend increase. Feel very good about that, and I'll show you some graphs on that. The correct numbers for total returns since last year are 15%, and I'll show you 10-year returns, which are in excess of that. First, the purpose of our company is fourfold. We want our employees to have a reliable, safe, and respectful place to work. We want to be the employer of choice. We want our customers to choose us first. We want to be the service provider of choice. We want our investors to say Pembina is a great investment and have industry-leading, but most importantly, sustainable returns.
We've built a business to create sustainable returns, and we want to leave communities in better shape than we found them. Our slogan is to leave a net positive impact on communities. We believe that by only doing all of those four things well will we be successful. When you see one of those things not being done well in a company, you'll probably quickly see that the company on whole isn't doing very well. Starting with customers. I'm going to build a company history here in 2 minutes, 65 years in 2 minutes. It started with the geology, the conventional geology, and then more recently, the prolific shale geology, the Montney Duvernay. If you look at here, these resources are massive. They're larger than Vancouver Island.
They're hundreds of meters thick, and there's about 100 years of reserve life left on this map sheet. The facilities Pembina is building, if they're well-maintained, and they will be, they can last decades and decades. This is a great place to own infrastructure. I've drawn here our conventional pipelines and what a great location. They're right on top of where the money is. We are very uniquely positioned to provide pipeline services for this prolific geology. That took us about 55 years to build. It's a huge network. We've been building Peace Pipeline out for almost 10 years. If you consider when we first started the planning of phase 1 to now, it's been almost 10 years of continuous planning and building.
Our oil sands pipelines, 2001, we really got started, and for the first bunch of years of my career, it was all about oil sands growth. We've got about 1 million barrels a day of oil sands pipes. We added transmission business unit recently. That was with the Veresen acquisition and the marquee assets there, of course, are the Alliance Pipeline, Aux Sable, Vantage Pipeline, and down in the U.S., Alliance, reaching all the way down into the U.S. into the Chicago area, and then Ruby Pipeline, which takes gas out of the Rockies hub to Malin, where we hope to extend that pipe and export LNG through Jordan Cove. In 2009, we added the gas processing business. It's a massive business now. You can see all the plants started humbly, and the orange plants are the new ones that are under construction now.
We added Veresen through Veresen in 2017, another massive bunch of plants up in the Montney. It's kind of a missing puzzle piece for us. Collectively, first our fractionators, Redwater. This is the largest frac complex in Canada, one of the largest in all of North America, acquired through Provident and then grown dramatically. I'll show you that later. Then our Oxbow position down in the Chicago area, Channahon, and extraction there. The processing business, about 6 billion cubic feet a day. The fractionation business, about 350,000 barrels a day, are clearly the industry leaders in their space. Recently, FID, the polypropylene, it's taking advantage of the abundant supply of propane in the Redwater area and on the West Coast, the Prince Rupert propane export terminal is coming out of the ground very nicely. That's it in 65 years in 2 minutes.
From a customer service point of view, in the beginning, there was production and there was consumption, we've been filling in the pieces in between production and consumption for decades now. As I said, for 55 years, that was really about hydrocarbon liquids gathering pipelines, two dominant franchises were built in northern and southern Alberta, the conventional pipeline system, then in the oil business. Our next endeavor in 2005 was to add marketing around those assets. We had a strong asset base, we realized we could market around those assets, we did, we made a lot of money in a very short time doing that. We really started to develop that LBP, the oil condensate value chain first. In 2009, I believe, yes, we went into gas processing, we liked the gas processing business.
We made money at, we made extraordinary money by taking more liquids out of the gas stream and putting them on our pipelines, which were not full at the time. We made good money processing. We made great money using spare capacity on the pipeline. We became our own customer, so to speak, that's really where the real vertical integration value chain thinking came from. In 2012, we acquired Provident and went downstream of our pipelines. Where do these NGLs go? Well, they need to be fractionated. They need to be railed, they need to be marketed. We merged with Provident, the rest is history there. Now we have the crude oil condensate value chain. We have the natural gas liquids value chain. The only other hydrocarbon, of course, is gas. We merged with Veresen, 95% gas.
Now we can provide all hydrocarbon services to any one of our producer customers. We give them full meal deal. It doesn't end there. We started to say, where do these hydrocarbons go? Well, propane gets turned into polypropylene. Propane can be exported to higher value markets. Maybe we can put the gas into an LNG plant and take it to Tokyo and double our producer's net back. We're extending that value chain. Some of these things are secured, some are proposed, some remain only possibilities right now. We continue to drive towards higher value markets. When I get asked, "What's Pembina going to do next?" We're going to get the products to the highest value markets, anything between what we have and where those markets are, we're going to fill in that value chain. That's our objective.
Here's the journey on the pipeline side. Back in 1997, we had 550,000 barrels a day. We had about 300 of that full, about 60% full, now we have 3 million barrels a day. What was considered a business that was flat or declining is now 10 times the size. Very proud of that accomplishment. In 2009, we had no gas processing, bought a small plant at 300 million a day through all the Peace. Started out mainly for processing. In the middle phase, from Younger all the way to kind of Kakwa River was really where NGLs became valuable, particularly incremental demand for ethane, we built a lot of extraction, maybe that opportunity will come back again in the future. More recently, it's the condensate boom.
The shales have a lot of condensate, we're building a lot of stabilization and additional gas plants. We're a 6 Bcf a day, largest in Canada. Fractionation, similar story. We had no fractionation in 2011 and 2012 when we bought Provident. They had 73. Actually, it was 65 at Redwater 1 and 20 at Sarnia, and we've since built. Most recently, we're building down at Empress. At 350,000 barrels a day, we're one of the largest in North America. Storage, bought 6 million of Provident, added about 6 million more since then, and we have some above-ground storage. If we're not the largest storage owner in the country, we're very close. This gives us tremendous flexibility around our pipeline assets. Why do customers keep coming back to Pembina? This is the customer section, after all.
No matter what product you have or where you have it, you're just one phone call away from the service for everything. You don't have to worry about what's coming out of the ground. You don't have to worry about where it's going. You can call us, we can provide a market for your product. As we step down the value chain, it's going to be higher and higher value markets. We're going to be able to offer our customers dollars, not pennies, to get them to the right markets. Discounts for multiple commitments, volume discounts. Our fees drop as volume goes up. We have what we call outage coordination. If you're a Pembina customer in a gas plant, a pipeline, a fractionation plant, if any one of those pieces is down, you don't pay for anything.
If you have those services with three or four different service providers, if your gas plant goes down, you're still paying the pipe, you're still paying the frack. That outage coordination is pretty significant. We got your back on outage coordination. Step-up rights, we'll give you an option to step up. If you have 1,000 barrels a day now, you might have two. You don't have to choose. Are you going to choose one or 2,000? You don't have to choose. We'll give you 1,000. You have an option to get to 2,000. Expansion opportunities. We have that massive storage position, so even if there's a downstream outage, we can take you to storage so you can still produce. As I said, we're developing access to alternative markets. That's the service offering. That's why we win. Over to investors.
Here's our returns last year from an accounting perspective. Earnings per share, 22%. If cash is king to you, we were 31% cash flow per share growth and EBITDA, so pre-tax growth at 41%. Pretty exceptional returns. We had an outstanding year last year. We had to raise guidance two times. It was a lot of fun. Our guardrails. This is how we govern ourselves. This is how you judge whether we're taking too much risk or not. We will be over 80% fee for service. You don't have to worry about commodity prices because you're getting a fee. We will maintain a payout ratio of under 100% of the fee-based income. What that means is we're going to pay your dividend out of the highly predictable fee stream. We are not relying on our commodity business to pay your dividend. Counterparty credit.
Three-quarters of our customers are investment-grade, or we have instruments in place to make them investment grade-like. When we build a plant for somebody, we know we're going to get paid back over that time period. We've had no significant bankruptcies or bad debts at all, even through the worst of the worst times. Our strong BBB credit rating, you can see our credit metrics are actually getting stronger every year. Fee-based, you can see these charts here, they not only show the quantum of our EBITDA growth, but also the quality. The gray bars are the very least risky cash flows, and the dark gray bar at the top of the stack is our more risky commodity exposed. You can see the relative size of those, how much more low-risk cash flow we've generated in most recent years.
We are not only improving the quantity, but we're also improving the quality, which speaks very well for maintaining a very high valuation in the market. Here's our kind of EBITDA per share growth. We're not just getting bigger, we're growing value per share, which is really what all of us care about here in the room. You might think, man, 2019 looks pretty flat to 2018. You're mathematically correct, we just made way too much money last year. That's really what it was there. It should have really been a straight line between CAD 1.7 billion and CAD 3 billion, we just made way too much money, it kind of screwed up the graph. Dividends, we announced a 5% dividend increase. Again, we've been growing that at about 4.5%.
What's cool on this graph to me, the gray, though, is the amount of cash we have left over after we pay dividends. Now our payout ratio is about CAD 1 out of every CAD 2 we can reinvest in the business. We're cash generating somewhere CAD 800 million, CAD 900 million, CAD 1 billion a year. If we borrow CAD 1 billion against that, we can grow at CAD 2 billion a year without even raising equity or issuing more shares, which will dilute all of us because shareholders hate dilution. That means we got to share our money with more people. To the extent we can reinvest and borrow, we can grow without sharing that money with a bunch of different shareholders. Here, if you bought shares in 2009, you bought CAD 100 worth of shares, you now have CAD 480 compared to some of the other indices here.
You have had an 18.5% annualized compounded return. If you started the year with CAD 1, you have CAD 1.185 at the end of every year, and so on and so on for 10 years. That's pretty special. As I said, 480% total return over the time period. Here's just another way to. I'm not going to focus on our ratios here, but this is about how much we borrow compared to all the other companies in our space. It gives you a very nice visual of the amount of borrowing we have compared to our peers. Many of our peers are borrowing about twice as much as we are for their size. We're very conservatively managed. Employees. In 2010, about 400 employees, 2,200 by the end of last year. We're heading for 2,500 employees by the end of this year.
It's been a wild ride. We are being recognized as one of Canada's top employers, one of Alberta's top employers, and last year, for the first time, as one of the best places to work for young people. Extremely proud of that. Our safety record, the blue is industry, the red is Pembina, and you can see we're well ahead of our industry peers on average on safety. We're exceptionally proud of that. Communities. On the right side, we focus on wellness, education, safety, and the environment. We have a community investment fund. We invested about CAD 7.5 million last year. We budgeted CAD 10 million this year. That puts us in the top 10% of companies in Canada in terms of reinvesting in the community, and hit CAD 4 million for United Way this year. I think we were second in Calgary on that.
Look at the number per employee. CAD 1,800 per employee for the United Way is pretty fantastic. 5,500 volunteer hours worked. We really do mean it when we say we want to leave communities in better shape than we found them. We walk the talk. This was our first year for our corporate sustainability report. We are aligning that with what our stakeholders want. We have the four stakeholders. What do they want to see from us? That's what our report reflects. It was the inaugural year, and there's no company like Pembina that has the asset mix we have. We need time to study it, compare ourselves year over year. It's hard to compare our company to others, but we're just getting started and we're studying what we can do different.
Can we electrify more of our facilities, for example, to reduce GHGs? Things like that. We're just getting started on that, there'll be more to come next year at the AGM. What's next? More of the same. More Peace, more Duvernay, more cogeneration. We're going to keep on rolling and doing new things to lengthen and enhance the value chain to get higher level of service to our customers. Recently announced projects, a couple of pump stations with Phase 4 on our Fox Creek to Namao pipeline. Our Phase 5 expansion, some pipes, some pumps. Phase 6, which is underway now, additional looping. Phase 7, kind of coming over the flatlands, a little cheaper that way, a bunch of pipes, some pumps. Phase 8, which really surprised us. The demand from the end of 2018 to early 2019 really caught us a bit by surprise.
We'd already been engineering Phase 8, we were able to take it in stride. Phase 9 is being engineered now. We'll see when that happens. Future, as I say, Phase 9's underway. I don't know where it ends. These are massive hydrocarbon resources in the Duvernay and the Montney, we are really just getting started. Alliance Pipeline, there's demand for that pipe to be expanded. We are talking to customers now, we'll see what's possible here. Maybe we'll be able to announce something in the summer. We'll see. Guys won't let me talk about it yet. More gathering. You can kind of throw in the, "Oh, yeah, and gathering system," it's hundreds of millions of CAD a year. They're not trivial. Facilities division, we've got the mass amount of plants. The gift that keeps on giving here is the Duvernay and the Montney.
We're expanding both. We've got the Prince Rupert export terminal underway. Hythe developments, that was a sour development in the Veresen Midstream asset base underway. Empress fractionation. The guys down in Empress are happy to be building again. As I say, Duvernay processing, storage, fractionation, cogeneration. Fractionation complex in Alberta is starting to fill up, and we'll see where that takes us in the near future. Prince Rupert, CAD 250 million. It's kind of our inaugural international investment, so it's not our biggest investment, but it is one of our most exciting because we're getting landlocked hydrocarbons onto the water where they're worth a lot more money. We're really excited about that project. It's modest at 25,000 barrels a day, but it is expandable. We walked into an existing location. We knocked down an abandoned old pulp mill that was an absolute nightmare.
It was kind of like Chernobyl, we cleaned it up. Now we're putting up a sparkling new facility, we've really done a solid for the community. Something we're really proud of there. We should be in service by mid-2020. Our Canada Kuwait Petrochemical Corp, that's a 50/50 joint venture between ourselves and the Kuwaitis. Our job is to bring the propane. Their job is to market the polypropylene. The company in the middle is the joint venture that turns propane into polypropylene. They're a world leader in polypropylene marketing, and we're a world leader in propane supply. We're really excited about that initiative for our industry because the value add to a barrel of propane is dramatic and will flow through to our customers. Jordan Cove is the tiger.
One minute we think we've got it by the tail, and another time it's got us. It's been a seesaw ride. We're learning a lot. We've taken a lot of ground. We've spent some money, but we've got a lot done. We just got our draft EIS from FERC, and it looks like the conditions are achievable. We have non-binding offtake agreements for well in excess of our capacity, we're getting solid signals from our customers that they want this, they want to buy what we're selling, which is fantastic. We're up to about 80% of the acquired right of way for the pipeline. We have support where it's needed most from the landowners. Hydrocarbon projects don't get done without landowner support, and we're winning on the ground. We've got a Class 2 cost estimate for the facility.
Actually, a lump sum agreement, which means someone will build us this facility at a pre-agreed to cost, we don't have that capital cost risk on the plant. We have a Class 3 cost estimate on the pipe. We will take the cost risk on that, but that's because we're really good at building pipelines. We don't view it that risky. What's outstanding, we need a final FERC approval, which we are hearing is in January. We need Oregon State approvals, which we're working on, we need to turn those non-binding agreements into binding agreements, we want to sell down our ownership. Remember when I said we make about CAD 1 billion, we borrow CAD 1 billion when we don't need to issue shares? If we did this whole project, we'd need to issue a bunch of shares.
We want to sell it down so that we can build it from within cash flow. We also, we're just not ready for CAD 10 billion projects. We're a CAD 35 billion company. CAD 10 billion is just too big for us. The same reason insurance companies reinsure. We're reinsuring this risk because it's just a bit too big for us. What's our value proposition? We're diversified. We're integrated. We have strategic assets, and we're going to take those hydrocarbons to the world. We have visible growth. We govern ourselves by our financial guardrails, so you know your dividend is safe. We have value chain extensions. We can grow at CAD 1 billion to CAD 2 billion a year, as I mentioned, and we're self-funding. We're not going to suffer dilution. 80-plus, I think we're 87% fee for service right now. Again, we're paying the dividend out of very high-quality cash flow stream.
We think we can maintain and continue to grow that with, hopefully, a little positive surprise from now on, again, in terms of a second increase. Very strong balance sheet. You saw our financial strength compared to our peers. We're very conservative. We're in a great place right now to react to opportunities. We care about all the stakeholders. It only works when all the stakeholders are rowing in the same direction. That's the end of my formal presentation. Would be just thrilled if there were some questions.
Hello. Mark DeBoer. I've been a shareholder since the income trust days.
Oh.
Just looking at your business that's regulator fee for service, the part that does have the commodity price risk, would you say the frac spread area is the most challenging?
Certainly. The frac spread is really, you're relying on two commodities because you're buying extraction rights, which is gas-based.
You're selling a hydrocarbon liquid, which is ultimately a derivative of the oil price. You have two things moving around, that's really where it gets more risky. Compared to other parts of our marketing business where you're, for example, buying an NGL mix, you're fractionating it, and you're selling it. That's a lot less volatile.
The second question, 75% of your counterparty risk is investment-grade customers. Of the part that isn't investment-grade, with the news two days ago, would you say your customers who are in a dry gas business is probably the part that keep you sleepless at night, I guess?
Think about our gas business. It's really mostly gas going to Chicago. You're right, the Alberta gas price isn't great, our customers are really getting the Chicago gas price, which is CAD 3-CAD 4. We're in the gas business, we're in the best part. We're in the part where our customers make a lot of money. The other parts of our business, which are more liquids-based, they're getting CAD 80 for condensate, Canadian, gas is kind of a byproduct. The condensate or the liquids economics are carrying them, they're not as worried about gas prices. We're pretty defensive right now in terms of having a muted impact of lower natural gas prices. That being said, I think with the Shell LNG announcement, Chevron's saying the right things, that there is hope on the horizon for gas prices in the future.
The part that's going to Chicago, that would be Alliance Pipeline?
That's correct. Yeah.
You're looking to expand that. Would you project this would help NGL prices go up a bit, or?
Any product leaving the basin is good. The way we look at it, we're applauding Shell, we're applauding AltaGas. Whoever's moving product out of the basin is good for the basin overall.
We're trying to do our part with propane. Propane's our main focus. We're looking at butane. Jordan Cove is methane. We're doing what we can. We think the oil egress is well in hand. We've got some pretty fantastic peer companies that are doing everything humanly possible to get oil out of the basin.
Thanks.
Amos Riebney, shareholder. How do we differ? Veresen had Jordan Cove project turned down. How do we, as Pembina, differ in our presentation to the powers to be? Who's FERC?
FERC is the U.S. regulator, they're the people who ultimately determine on behalf of the United States whether a project is suitable or not. We just had that draft opinion from FERC, which was quite positive. The last Veresen project was denied by FERC, you asked me the question, why were they and why do we think we're different from a FERC perspective? Part of it is that, remember I mentioned we had 80% of the land? No government wants to take land away from landowners. They'd rather have landowners sign up on their own. By signing up all those landowners, we're showing the government that they don't have to take the land away, so there won't be a fight over that. That's point A. Point B is need and necessity. Do you have customers?
Is this plant required? This gas is going to go to displace coal in China and other parts of the world. We have customers that want to take it there, they want to do that. We have producer customers who desperately want to get their gas to international markets. We're proving need and necessity quite effectively, I think. That's the difference.
Thank you.
You're welcome.
My turn again. I'd like to find out, the terminal that we've got up in the Rupert area, is that going to be impacted at all with the idiots that we've got in government that keep wanting to not have any tankers going up and down that side of our coast? Are we going to be impacted with that at all?
Which one of those two do you want me to answer? No, it won't.
No. Okay. I also see that you made a great presentation on us helping the communities again. What does Pembina plan to do in helping getting our next federal election with our boy child kicked out and putting some donation forth towards that?
We are apolitical. We don't fund any political parties. That's up to all the people, all the shareholders in the room, to decide what's in their own best interest. We don't tell our employees how to vote. We don't fund political parties at all. We let our employees do that for themselves.
How diplomatic, Mick. Okay. I think we've got to get Alberta back into business again. I think with our new government here, Jason, who I've known for about 25 years, I think he's going to do that, and hopefully it'll help us as well. I know that his sidekick, I shouldn't call her that, she's a very strong woman, Sonya, the Energy Minister, who I've also known for a long time. She will kick ass as well.
Well, maybe we'll send you to Ottawa to represent us. I think there'll be some ass-kicking going on there.
Okay.
Stephen Krasnow, longtime shareholder. Macro risk is something that a lot of us think about, and when you talk about Middle East long-term joint ventures, and the potential for macro risk, that's the thrust of my question. How have you structured the Kuwaiti joint venture to account for the macro risk of something changing at the Kuwaiti end that frustrates, willingly or unwillingly, their interest or ability to go forward in the joint venture?
They're actually investing here to avoid macro risk. If you think about what happened to poor Kuwait, was lit on fire some years ago and they had all their oil assets in one small basket. They're actually moving money across the globe to mitigate macro risk, and that's why they're here. The terms of our venture is we each have to perform, and if the other party doesn't perform, then we can step into their shoes.
Okay. Thank you.
You're welcome.
Hi. Mark DeBoer. When you purchased Veresen, I understand the infrastructure was very complementary to your current infrastructure. What type of synergies did you get from this as far as cost savings going forward, what was the objective, I guess, as far as synergies?
We have kind of a three-year plan. I actually report that to the board every year, how we're doing versus target. I think our Was it CAD 100 million year one, Scott? Yeah, CAD 100 million of cost synergies, whether they were G&A, operating costs, tax, loan amortize. As we became much bigger, our borrowing costs went down. We did achieve that for year one, it grows every year beyond that. The big juice is in combining the value chains. The NuVista deal was a great example. We provide NuVista's processing, gathering liquids, their condensate, their natural gas down to Chicago. We won that because we could offer the Chicago market to NuVista. We would not have won that without it. That's really where we think we can take it, if you think, man, what if we could put NuVista into LNG?
You can really start to dream on how this thing could work out, as if you can get a customer's propane to Korea or South America and their gas to Tokyo, where the best markets are in the world, then they're just not going to phone anybody else. We're well on our way to doing that.
You're able to offer your customers more of a complete service, full package.
Yes
versus what you had prior to the acquisition.
A much higher gas price than they were enjoying in Western Canada.
Great. Okay, thanks.
All right, looks like it's beer time. All right, everyone. Well, thank you very much. I really appreciate those questions. Thanks for your support, and I think we'll have some refreshments outside and our board and management and employees will be out there, and so feel free to ask them any questions and we'll see you again next year.