Pembina Pipeline Corporation

08/04/2022 | Press release | Distributed by Public on 08/04/2022 15:10

MANAGEMENT'S DISCUSSION AND ANALYSIS - Form 6-K

Basis of Presentation
The following Management's Discussion and Analysis ("MD&A") of the financial and operating results of Pembina Pipeline Corporation ("Pembina" or the "Company") is dated August 4, 2022, and is supplementary to, and should be read in conjunction with, Pembina's unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2022 ("Interim Financial Statements") as well as Pembina's audited consolidated annual financial statements ("Consolidated Financial Statements") and MD&A for the year ended December 31, 2021. All financial information provided in this MD&A has been prepared in accordance with International Accounting Standard ("IAS") 34 Interim Financial Reporting and is expressed in Canadian dollars, unless otherwise noted. A description of Pembina's operating segments and additional information about Pembina is filed with Canadian and U.S. securities commissions, including quarterly and annual reports, annual information forms (which are filed with the U.S. Securities and Exchange Commission under Form 40-F) and management information circulars, which can be found online at www.sedar.com, www.sec.gov and through Pembina's website at www.pembina.com. Information contained in or otherwise accessible through Pembina's website does not form part of this MD&A and is not incorporated into this document by reference.
Abbreviations
For a list of abbreviations that may be used in this MD&A, refer to the "Abbreviations" section of this MD&A.

Non-GAAP Financial Measures
Pembina has disclosed certain financial measures and ratios within this MD&A that management believes provide meaningful information in assessing Pembina's underlying performance, but which are not specified, defined or determined in accordance with Canadian generally accepted accounting principles ("GAAP") and which are not disclosed in Pembina's Interim Financial Statements. Such non-GAAP financial measures and non-GAAP ratios do not have any standardized meaning prescribed by IFRS and may not be comparable to similar financial measures disclosed by other issuers. Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A for additional information regarding these non-GAAP measures and non-GAAP ratios.
Risk Factors and Forward-Looking Information
Management has identified the primary risk factors that could have a material impact on the financial results and operations of Pembina. Such risk factors are presented in the "Risk Factors" sections of Pembina's MD&A and Annual Information Form ("AIF"), each for the year ended December 31, 2021 and have been updated in the "Risk Factors" section of this MD&A, as necessary. The Company's financial and operational performance is potentially affected by a number of factors, including, but not limited to, the factors described within the "Forward-Looking Statements & Information" section of this MD&A. This MD&A contains forward-looking statements based on Pembina's current expectations, estimates, projections and assumptions. This information is provided to assist readers in understanding the Company's future plans and expectations and may not be appropriate for other purposes.
Pembina Pipeline Corporation Second Quarter 2022 1

1. ABOUT PEMBINA
Pembina Pipeline Corporation is a leading energy transportation and midstream service provider that has served North America's energy industry for more than 65 years. Pembina owns an integrated network of hydrocarbon liquids and natural gas pipelines, gas gathering and processing facilities, oil and natural gas liquids infrastructure and logistics services, and a growing export terminals business. Through our integrated value chain, we seek to provide safe and reliable infrastructure solutions which connect producers and consumers of energy across the world, support a more sustainable future and benefit our customers, investors, employees and communities. For more information, please visit www.pembina.com.
Purpose of Pembina:
To be the leader in delivering integrated infrastructure solutions connecting global markets:
•Customers choose us first for reliable and value-added services;
•Investors receive sustainable industry-leading total returns;
•Employees say we are the 'employer of choice' and value our safe, respectful, collaborative and inclusive work culture; and
•Communities welcome us and recognize the net positive impact of our social and environmental commitment.
Western Canadian Processing Joint Venture
On March 1, 2022, Pembina announced that it has entered into definitive agreements with affiliates of KKR & Co., Inc. (collectively, "KKR") to combine their respective western Canadian natural gas processing assets into a single, new joint venture entity ("Newco"). Pembina will hold a 60 percent interest in Newco and serve as its operator and manager, while KKR's global infrastructure funds will hold the remaining 40 percent interest in Newco.
Pembina will contribute to Newco its field-based gas processing assets, which include the Cutbank Complex, the Saturn Complex, the Resthaven Facility, the Duvernay Complex and the Saskatchewan Ethane Extraction Plant, as well as its 45 percent interest in Veresen Midstream. Pembina's Empress, Younger and Burstall assets will be excluded from the transaction and Pembina will retain its current ownership position in respect of such assets.
KKR will contribute its 55 percent interest in Veresen Midstream to Newco, as well as the 49 percent interest in Energy Transfer Canada ULC ("ETC") that it currently owns. Newco has also agreed to acquire the remaining 51 percent interest in ETC from an affiliate of Energy Transfer LP, aligning ownership of those assets and driving additional efficiencies within Newco. The contribution of Pembina's and KKR's assets to Newco, and Newco's acquisition of the remaining 51 percent interest in ETC, are cross-conditional upon each other and will occur concurrently.
On July 27, 2022, the Canadian Competition Bureau issued a no action letter for the joint venture transaction. Issuance of the no action letter allows Pembina and KKR to proceed with next steps on closing the transaction, which is expected to occur in August 2022 subject to the satisfaction of the remaining conditions. Pursuant to an agreement with the Canadian Competition Bureau, and consistent with Pembina and KKR's intention to divest upon announcing their joint venture, Pembina and KKR's global infrastructure funds will divest the 50 percent, non-operated interest in the Key Access Pipeline System which will be contributed into Newco as part of the transaction.
In connection with closing of the transaction, and subject to approval and declaration by its Board of Directors, Pembina also intends to increase its common share dividend upon closing by $0.0075 per share per month, or 3.6 percent. The increase, if implemented, would reflect the expected immediate cash flow accretion from creation of the joint venture.

2Pembina Pipeline CorporationSecond Quarter 2022

2. FINANCIAL & OPERATING OVERVIEW
Consolidated Financial Overview for the Three Months Ended June 30
Results of Operations
($ millions, except where noted) 2022
2021
Change
Revenue 3,095 1,902 1,193
Net revenue(1)
1,020 894 126
Gross profit
711 550 161
Earnings
418 254 164
Earnings per common share - basic (dollars)
0.70 0.39 0.31
Earnings per common share - diluted (dollars)
0.69 0.39 0.30
Cash flow from operating activities 604 584 20
Cash flow from operating activities per common share - basic (dollars)
1.09 1.06 0.03
Adjusted cash flow from operating activities(1)
683 538 145
Adjusted cash flow from operating activities per common share - basic (dollars)(1)
1.23 0.98 0.25
Capital expenditures(5)
152 146 6
Adjusted EBITDA(1)
849 778 71
Total volumes (mboe/d)(2)
3,344 3,500 (156)
Change in Earnings ($ millions)(3)(4)
Results Overview
Earnings in the second quarter of 2022 were positively impacted by higher gross profit in Marketing & New Ventures due to higher margins on crude oil and NGL sales, combined with a gain on commodity-related derivatives compared to a loss for the second quarter of 2021. Pipelines gross profit was positively impacted by higher volumes on the Peace Pipeline system and higher tolls due to inflation, combined with a higher contribution from Alliance, partially offset by lower contracted volumes on the Nipisi and Mitsue Pipeline systems due to expiration of contracts. Facilities gross profit was positively impacted by realized gains for certain gas processing fees tied to AECO prices, offset by higher depreciation. Other expense and impairments decreased due to lower acquisition, restructuring costs and impairment charges in the period compared to the second quarter of 2021. Net finance costs increased due to foreign exchange losses compared to gains in the second quarter of 2021. Income tax expense increased as a result of higher earnings in the second quarter of 2022.
Pembina Pipeline Corporation Second Quarter 2022 3

Changes in Results for the Three Months Ended June 30
Revenue
$1.2 billion increase, largely due to an increase in crude oil and NGL market prices, higher volumes on the Peace Pipeline system and higher tolls largely due to inflation, combined with higher recoverable costs, partially offset by lower contracted volumes on the Nipisi and Mitsue Pipeline systems as a result of the expiration of contracts during the fourth quarter of 2021.
Cost of goods sold
$1.1 billion increase, largely due to higher crude oil and NGL market prices.
Operating expenses
$25 million increase, primarily due to higher power and fuel costs, the majority of which are recoverable, as a result of higher power pool prices and higher AECO prices during the second quarter of 2022, combined with higher integrity costs and higher recoverable geotechnical costs largely related to the Western Pipeline.
Depreciation and amortization included in operations
$10 million increase, primarily due to asset retirements, partially offset by a smaller asset base in Pipelines resulting from the impairment of the Nipisi and Mitsue Pipeline systems during the fourth quarter of 2021 due to contract expirations.
Share of profit from equity accounted investees
$22 million increase, largely due to higher share of profit from Alliance as a result of higher volumes driven by a wider AECO-Chicago natural gas price differential, combined with the sale of linepack inventory in the second quarter of 2022.
Realized loss on commodity-related derivatives
$16 million negative variance, primarily due to realized losses on crude oil- and NGL- based derivative instruments driven by the change in crude oil and NGL market prices during the second quarter of 2022, partially offset by the increase in the AECO price during the period resulting in realized gains for certain gas processing fees tied to AECO prices.
Unrealized gain on commodity-related derivatives
$64 million positive variance, due to contracts maturing in the period, the change in the forward prices for power and propane during the second quarter of 2022, partially offset by newly added contracts.
General & administrative
$11 million increase, primarily due to higher incentive costs driven by Pembina's performance relative to peers.
Other income
$43 million increase, primarily due to lower acquisition costs related to the arrangement agreement with Inter Pipeline Ltd. which was terminated in the third quarter of 2021.
Impairments
$23 million decrease, primarily due to a $21 million impairment charge recognized on Pembina's interest in Fort Corp. during the second quarter of 2021 compared to nil recognized in the second quarter of 2022.
Net finance costs
$29 million increase, primarily driven by foreign exchange losses compared to gains in the second quarter of 2021 as the value of the Canadian dollar relative to the U.S. dollar decreased during the second quarter of 2022.
Current tax expense Consistent with the prior period.
Deferred tax expense
$25 million increase, primarily due to the growth in earnings during the second quarter of 2022 and the recovery on the impairment expense recognized in the second quarter of 2021.
Cash flow from operating activities
$20 million increase, primarily driven by an increase in operating results after adjusting for non-cash items, a $33 million increase in distributions from equity accounted investees, combined with a $20 million increase in payments collected through contract liabilities, partially offset by a $105 million change in non-cash working capital, $17 million increase in taxes paid and a $12 million increase in net interest paid.
Adjusted cash flow from operating activities(1)
$145 million increase, largely due to the same items impacting cash flow from operating activities, discussed above, net of the change in non-cash working capital and taxes paid.
Adjusted EBITDA(1)
$71 million increase, largely due to higher margins on crude oil and NGL sales, higher volumes on the Peace Pipeline system and higher tolls due to inflation, combined with a higher contribution from Aux Sable and Alliance, partially offset by a lower contribution from Ruby due to Ruby Pipeline, L.L.C ("Ruby Pipeline") filing for bankruptcy protection on March 31, 2022, higher realized losses on commodity-related derivatives, lower contracted volumes on the Nipisi and Mitsue Pipeline systems as a result of the expiration of contracts, and higher general & administrative expense. Refer to the "Selected Equity Accounted Investee Information" section for further details on Ruby. Included in adjusted EBITDA is $177 million (2021: $174 million) related to equity accounted investees.
Total volumes (mboe/d)(2)
156 mboe/d decrease, largely driven by Ruby Pipeline filing for bankruptcy protection on March 31, 2022 and contract expirations on the Nipisi and Mitsue Pipeline systems, combined with lower volumes on the Alberta Ethane Gathering System ("AEGS") due to third party outages and lower volumes at the Saturn Complex due to scheduled maintenance, partially offset by higher volumes on the Peace Pipeline system and on the Drayton Valley Pipeline. Volumes include 231 mboe/d (2021: 321 mboe/d) related to equity accounted investees.
Increase; Decrease; or No impact; to earnings, adjusted EBITDA, cash flow from operations, adjusted cash flow from operating activities or total volumes.
(1) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.
(2) Total revenue volumes. See the "Abbreviations" section of this MD&A for definition. Marketed NGL volumes are excluded from volumes to avoid double counting. Refer to the "Marketing & New Ventures" section of this MD&A for further information.
(3) Facilities results ex. commodity-related derivatives and Marketing & New Ventures results ex. commodity-related derivatives includes gross profit less realized and unrealized commodity related derivative financial instruments.
(4) Other includes other expenses and corporate.
(5) Includes capital expenditures related to assets held for sale of $6 million for the three months ended June 30, 2022.
4Pembina Pipeline CorporationSecond Quarter 2022

Consolidated Financial Overview for the Six Months Ended June 30
Results of Operations
($ millions, except where noted) 2022 2021 Change
Revenue 6,133 3,918 2,215
Net revenue(1)
2,174 1,893 281
Gross profit
1,568 1,180 388
Earnings
899 574 325
Earnings per common share - basic (dollars)
1.51 0.91 0.60
Earnings per common share - diluted (dollars)
1.50 0.91 0.59
Cash flow from operating activities 1,259 1,040 219
Cash flow from operating activities per common share - basic (dollars)
2.28 1.89 0.39
Adjusted cash flow from operating activities(1)
1,383 1,120 263
Adjusted cash flow from operating activities per common share - basic (dollars)(1)
2.50 2.04 0.46
Capital expenditures(5)
331 273 58
Adjusted EBITDA(1)
1,854 1,613 241
Total volumes (mboe/d)(2)
3,358 3,491 (133)
Change in Earnings ($ millions)(3)(4)
Results Overview
Results for the first six months ended June 30, 2022 were positively impacted by higher gross profit in Marketing & New Ventures due to higher margins on crude oil and NGL sales, combined with unrealized gains on commodity-related derivatives compared to losses for the first six months of 2021. Pipelines gross profit was positively impacted by higher volumes on the Peace Pipeline system and higher tolls due to inflation, combined with a higher contribution from Alliance, partially offset by lower contracted volumes on the the the Nipisi and Mitsue Pipeline systems due to expiration of contracts and a lower share of profit from Ruby. Facilities gross profit was positively impacted by higher gains on commodity-related derivatives for certain gas processing fees tied to AECO prices, offset by higher depreciation. Other expense and impairments decreased due to lower acquisition, restructuring, and impairment charges in the period compared to 2021. Income tax expense increased as a result of higher earnings for the period. Net finance costs increased due to foreign exchange losses compared to gains in 2021, combined with higher interest expense. General & administrative increased due to higher long-term incentive costs driven by Pembina's performance relative to peers.
Pembina Pipeline Corporation Second Quarter 2022 5

Changes in Results for the Six Months Ended June 30
Revenue
$2.2 billion increase, largely due to an increase in crude oil and NGL market prices, higher volumes on the Peace Pipeline system and higher tolls largely due to inflation, combined with higher recoverable costs, partially offset by lower contracted volumes on the Nipisi and Mitsue Pipeline systems due to expiration of contracts in fourth quarter of 2021.
Cost of goods sold
$1.9 billion increase, largely due to higher crude oil and NGL market prices.
Operating expenses
$36 million increase, primarily due to higher power and fuel costs, the majority of which are recoverable, as a result of higher power pool prices and higher AECO prices during the period, combined with higher integrity costs and higher recoverable geotechnical costs largely related to the Western Pipeline.
Depreciation and amortization included in operations
$12 million increase, primarily due to asset retirements, combined with the Prince Rupert Terminal being placed into service in March 2021, partially offset by a smaller asset base in Pipelines resulting from the impairment of certain Oil Sands assets during the fourth quarter of 2021 due to contract expirations.
Share of profit from equity accounted investees
$36 million increase, primarily due to higher share of profit from Alliance and Aux Sable driven by a wider AECO-Chicago natural gas price differential, combined with the sale of linepack inventory at Alliance in the second quarter of 2022, partially offset by a lower contribution from Ruby due to Ruby Pipeline filing for bankruptcy protection on March 31, 2022, and an unrealized loss on commodity-related derivatives in Aux Sable.
Realized loss on commodity-related derivatives
$25 million positive variance, largely due to the increase in the AECO price during the period resulting in realized gains for certain gas processing fees tied to AECO prices, partially offset by realized losses on crude oil- and NGL- based derivative instruments driven by the change in crude oil and NGL market prices.
Unrealized gain on commodity-related derivatives
$94 million positive variance, primarily due to contracts maturing in the period, the increase in the forward prices for power and natural gas during the first six months of 2022, combined with the increase in the AECO price during the period resulting in realized gains for certain gas processing fees tied to AECO prices, partially offset by newly added contracts.
General & administrative
$31 million increase largely due to higher long-term incentive costs primarily driven by Pembina's performance relative to peers.
Other income
$39 million increase, primarily due to lower acquisition costs related to the arrangement agreement with Inter Pipeline Ltd. which was terminated in the third quarter of 2021, combined with lower restructuring costs, and a gain on the initial recognition of a new lease on the Western Pipeline.
Impairments
$35 million decrease, primarily due to impairment charges of $21 million recognized on Pembina's interest in Fort Corp in 2021 and $10 million on an advance made to Ruby in 2021 compared to nil in 2022.
Net finance costs
$34 million increase, primarily driven by foreign exchange losses in the period compared to gains in 2021 as the value of the Canadian dollar relative to the U.S. dollar decreased during 2022, combined with higher interest expense as a result of terming out variable rate debt to fixed rate debt at higher interest rates.
Current tax expense
$61 million increase, primarily due to higher earnings for the period.
Deferred tax expense
$11 million increase, primarily due to the growth in earnings for the period and the recovery on the impairment expense recognized in the first six months of 2021.
Cash flow from operating activities
$219 million increase, primarily driven by an increase in operating results after adjusting for non-cash items, a $73 million increase in distributions from equity accounted investees, combined with a $21 million increase in payments collected through contract liabilities, partially offset with a $65 million change in non-cash working capital, $42 million increase in taxes paid, $22 million increase in net interest paid, and a $13 million increase in share-based compensation payments.
Adjusted cash flow from operating activities(1)
$263 million increase, largely due to the same items impacting cash flow from operating activities, discussed above, net of the change in non-cash working capital, taxes paid and share-based compensation payments, partially offset by $61 million higher current tax expense and $23 million increase in accrued share-based payments.
Adjusted EBITDA(1)
$241 million increase, primarily due to higher margins on crude oil and NGL sales, higher volumes on the Peace Pipeline system and higher tolls due to inflation, and a higher contribution from Alliance and from Aux Sable, combined with lower losses on commodity-related derivatives and higher recoverable costs from the Horizon Pipeline system, partially offset by lower contribution from Ruby, discussed above, lower contracted volumes on the Nipisi and Mitsue Pipeline systems, and higher general & administrative. Included in adjusted EBITDA is $355 million (2021: $358 million) related to equity accounted investees.
Total volumes (mboe/d)(2)
133 mboe/d decrease, largely driven by lower volumes on the Ruby Pipeline and contract expirations on the Nipisi and Mitsue Pipeline systems, lower volumes on AEGS due to third party outages; lower volumes at the Redwater Complex, and lower volumes at the Saturn Complex due to scheduled maintenance, partially offset by higher volumes on the Peace Pipeline system and Drayton Valley Pipeline due to increased upstream activities, higher volumes on the Dawson Assets and from the Veresen Midstream Hythe Developments that went into service in March 2021 and higher contracted volumes at the Cutbank Complex. Volumes include 262 mboe/d (2021: 328 mboe/d) related to equity accounted investees.
Increase; Decrease; or No impact; to earnings, adjusted EBITDA, cash flow from operations, adjusted cash flow from operating activities or total volumes.
(1) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.
(2) Total revenue volumes. See the "Abbreviations" section of this MD&A for definition. Marketed NGL volumes are excluded from volumes to avoid double counting. Refer to the "Marketing & New Ventures" section of this MD&A for further information.
(3) Facilities results ex. commodity-related derivatives and Marketing & New Ventures results ex. commodity-related derivatives includes gross profit less realized and unrealized commodity related derivative financial instruments.
(4) Other includes other expenses and corporate.
(5) Includes capital expenditures related to assets held for sale of $6 million for the six months ended June 30, 2022.
6Pembina Pipeline CorporationSecond Quarter 2022

3. SEGMENT RESULTS
Business Overview
The Pipelines Division provides customers with pipeline transportation, terminalling, storage and rail services in key market hubs in Canada and the United States for crude oil, condensate, natural gas liquids and natural gas. The division manages pipeline transportation capacity of 3.1 mmboe/d(1), above ground storage capacity of 11 mmbls(1) and rail terminalling capacity of approximately 105 mboe/d(1) within its conventional, oil sands and heavy oil, and transmission assets. The conventional assets include strategically located pipelines and terminalling hubs that gather and transport light and medium crude oils, condensate and natural gas liquids from western Alberta and northeast British Columbia to the Edmonton, Alberta area for further processing or transportation on downstream pipelines. The oil sands and heavy oil assets transport heavy and synthetic crude oil produced within Alberta to the Edmonton, Alberta area and offer associated storage, terminalling and rail services. The transmission assets transport natural gas, ethane and condensate throughout Canada and the United States on long haul pipelines linking various key market hubs. In addition, the Pipelines Division assets provide linkages between Pembina's upstream and downstream assets across North America, enabling integrated customer service offerings. Together, these assets supply products from hydrocarbon producing regions to refineries, fractionators and market hubs in Alberta, British Columbia, Illinois and California, as well as other regions throughout North America.
The Facilities Division includes infrastructure that provides Pembina's customers with natural gas, condensate and NGL services. Pembina's natural gas gathering and processing assets are strategically positioned in active, liquids-rich areas of the WCSB and Williston Basin and are integrated with the Company's other businesses. Pembina provides sweet and sour gas gathering, compression, condensate stabilization, and both shallow cut and deep cut gas processing services with a total capacity of approximately 6.1 bcf/d(2) for its customers. Condensate and NGL extracted at virtually all Canadian-based facilities have access to transportation on Pembina's pipelines. In addition, all NGL transported along the Alliance Pipeline are extracted through the Pembina operated Channahon Facility at the terminus. The Facilities Division includes approximately 354 mbpd(2) of NGL fractionation capacity, 21 mmbbls(1) of cavern storage capacity and associated pipeline and rail terminalling facilities and a liquefied propane export facility on Canada's West Coast. These facilities are fully integrated with the Company's other divisions, providing customers with the ability to access a comprehensive suite of services to enhance the value of their hydrocarbons. In addition, Pembina owns a bulk marine import/export terminal in Vancouver, British Columbia.
The Marketing & New Ventures Division strives to maximize the value of hydrocarbon liquids and natural gas originating in the basins where the Company operates. Pembina pursues this goal through the creation of new markets, and further enhances existing markets, to support both the Company's and its customers' overall business interests. In particular, Pembina seeks to identify opportunities to connect hydrocarbon production to new demand locations through the development of infrastructure. Pembina strives to increase producer netbacks and product demand to improve the overall competitiveness of the basins where the Company operates. Within the Marketing & New Ventures Division, Pembina undertakes value-added commodity marketing activities including buying and selling products (natural gas, ethane, propane, butane, condensate, crude oil and electricity), commodity arbitrage, and optimizing storage opportunities. The marketing business enters into contracts for capacity on both Pembina's and third-party infrastructure, handles proprietary and customer volumes and aggregates production for onward sale.
(1)Net capacity.
(2)Net capacity; includes Aux Sable capacity; the financial and operational results for Aux Sable are included in the Marketing & New Ventures Division; excludes impact of Newco transaction.
Pembina Pipeline Corporation Second Quarter 2022 7

Financial and Operational Overview by Division
3 Months Ended June 30
2022 2021
($ millions, except where noted)
Volumes(1)
Reportable Segment Earnings (Loss) Before Tax
Adjusted EBITDA(2)
Volumes(1)
Reportable Segment Earnings (Loss) Before Tax
Adjusted EBITDA(2)
Pipelines 2,476 382 523 2,627 325 522
Facilities 868 143 277 873 161 270
Marketing & New Ventures(3)
- 139 103 - 9 38
Corporate - (149) (54) - (167) (52)
Total 3,344 515 849 3,500 328 778
6 Months Ended June 30
2022 2021
($ millions, except where noted)
Volumes(1)
Reportable Segment Earnings (Loss) Before Tax
Adjusted EBITDA(2)
Volumes(1)
Reportable Segment Earnings (Loss) Before Tax
Adjusted EBITDA(2)
Pipelines 2,486 743 1,044 2,607 658 1,051
Facilities 872 389 558 884 348 539
Marketing & New Ventures(3)
- 360 370 - 76 128
Corporate - (344) (118) - (331) (105)
Total 3,358 1,148 1,854 3,491 751 1,613
(1) Volumes for Pipelines and Facilities are revenue volumes, which are physical volumes plus volumes recognized from take-or-pay commitments. Volumes are stated in mboe/d, with natural gas volumes converted to mboe/d from MMcf/d at a 6:1 ratio.
(2) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.
(3) Marketed NGL volumes are excluded from volumes to avoid double counting. Refer to the "Marketing & New Ventures" section of this MD&A for further information.
8Pembina Pipeline CorporationSecond Quarter 2022

Pipelines
Financial Overview for the Three Months Ended June 30
Results of Operations
($ millions, except where noted) 2022 2021 Change
Conventional revenue(1)(2)
392 342 50
Transmission revenue(1)(2)
118 110 8
Oil Sands revenue(1)(2)
94 102 (8)
Pipelines revenue(1)
604 554 50
Operating expenses(1)
156 132 24
Depreciation and amortization included in operations 96 108 (12)
Share of profit from equity accounted investees 48 27 21
Gross profit 400 341 59
Reportable segment earnings before tax 382 325 57
Adjusted EBITDA(3)
523 522 1
Volumes (mboe/d)(4)
2,476 2,627 (151)
Distributions from equity accounted investees 83 60 23
Change in Results
Conventional revenue(1)(2)
Increase largely due to higher volumes on the Peace Pipeline system as higher crude oil and NGL market prices resulted in increased upstream activity, combined with higher tolls largely due to inflation and higher recoverable costs on the Western Pipeline.
Transmission revenue(1)(2)
Increase primarily due to higher volumes on the Cochin Pipeline, combined with the recognition of deferred revenue volumes on the Vantage Pipeline in the second quarter of 2022 compared to in the third and fourth quarters of 2021.
Oil Sands revenue(1)(2)
Decrease largely due to lower contracted volumes on the Nipisi and Mitsue Pipeline systems as a result of the expiration of contracts during the fourth quarter of 2021.
Operating expenses(1)
Increase largely due to an increase in power costs, the majority of which are recovered in revenue, as a result of the higher power pool price during the second quarter of 2022, combined with higher recoverable geotechnical costs primarily related to the Western Pipeline.
Depreciation and amortization included in operations
Decrease primarily due to fewer asset retirements in the second quarter of 2022 compared to the second quarter of 2021 and a smaller asset base resulting from the impairment of the Nipisi and Mitsue Pipeline systems and the Edmonton South Rail Terminal in the fourth quarter of 2021 due to contract expirations.
Share of profit from equity accounted investees
Increase primarily due to higher volumes driven by a wider AECO-Chicago natural gas price differential, combined with higher revenues at Alliance as a result of the sale of linepack inventory in the second quarter of 2022.
Reportable segment earnings before tax
Increase largely due to higher volumes on the Peace Pipeline system and higher tolls due to inflation, combined with a higher contribution from Alliance, higher volumes on the Vantage Pipeline and lower depreciation, partially offset by the expiration of contracts on the Nipisi and Mitsue Pipeline systems.
Adjusted EBITDA(3)
Consistent with the prior period. Due to the same items impacting reportable segment earnings before tax, discussed above, net of the change in depreciation, largely offset by lower adjusted EBITDA from Ruby due to Ruby Pipeline filing for bankruptcy protection on March 31, 2022. Included in adjusted EBITDA is $85 million (2021: $65 million) related to Alliance and nil (2021: $40 million) related to Ruby. Refer to the "Selected Equity Accounted Investee Information" section for further details on Ruby.
Volumes (mboe/d)(4)
Decrease largely driven by Ruby Pipeline filing for bankruptcy protection on March 31, 2022 and contract expirations on the Nipisi and Mitsue Pipeline systems, combined with lower volumes on AEGS due to third party outages, partially offset by higher volumes on the Peace Pipeline system, Drayton Valley Pipeline, Vantage Pipeline, and on the Cochin Pipeline. Refer to the "Selected Equity Accounted Investee Information" section for further details on Ruby. Volumes include 142 mboe/d (2021: 136 mboe/d) related to Alliance and nil (2021: 99 mboe/d) related to Ruby.
Distributions from equity accounted investees
$83 million (2021: $60 million) from Alliance. The increase in distributions from Alliance is due to the same factors impacting share of profit from equity accounted investees discussed above, combined with its debt re-financing in the fourth quarter of 2021.
Pembina Pipeline Corporation Second Quarter 2022 9

Change in Adjusted EBITDA ($ millions)(2)(3)

Change in Reportable Segment Earnings Before Tax($ millions)(2)
(1) Includes inter-segment transactions. See Note 10 to the Interim Financial Statements.
(2) Conventional, transmission and oil sands revenue include revenue generated from Pembina's conventional, transmission and oil sands and heavy oil assets within the Pipelines operating segment, respectively. For further details on Pembina's assets, refer to Pembina's AIF for the year ended December 31, 2021.
(3) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.
(4) Revenue volumes. See the "Abbreviations" section of this MD&A for definition.

10Pembina Pipeline CorporationSecond Quarter 2022

Financial Overview for the Six Months Ended June 30
Results of Operations
($ millions, except where noted) 2022 2021 Change
Conventional revenue(1)(2)
752 671 81
Transmission revenue(1)(2)
223 218 5
Oil Sands revenue(1)(2)
202 218 (16)
Total revenue(1)
1,177 1,107 70
Operating expenses(1)
297 269 28
Depreciation and amortization included in operations 195 212 (17)
Share of profit from equity accounted investees 88 74 14
Gross profit 773 700 73
Reportable segment earnings before tax 743 658 85
Adjusted EBITDA(3)
1,044 1,051 (7)
Volumes (mboe/d)(4)
2,486 2,607 (121)
Distributions from equity accounted investees 170 128 42
Change in Results
Conventional revenue(1)(2)
Increase largely due to higher volumes on the Peace Pipeline system as higher crude oil and NGL market prices resulted in increased upstream activity, combined with higher tolls largely due to inflation and higher recoverable costs on the Western Pipeline.
Transmission revenue(1)(2)
Consistent with the prior period. Higher volumes on the Cochin Pipeline were largely offset by lower volumes on AEGS due to third party outages.
Oil Sands revenue(1)(2)
Decrease largely due to lower contracted volumes on the Nipisi and Mitsue Pipeline systems as a result of the expiration of contracts during the fourth quarter of 2021, partially offset by $13 million in higher recoverable costs on the Horizon Pipeline system related to extensive slope mitigation.
Operating expenses(1)
Increase largely due to higher recoverable geotechnical costs primarily related to the Western Pipeline, combined with an increase in power costs, the majority of which are recovered in revenue, as a result of the higher power pool price during the first six months of 2022, partially offset by lower operating expense associated with the Nipisi and Mitsue Pipeline systems due to expiration of contracts during the fourth quarter of 2021.
Depreciation and amortization included in operations
Decrease primarily due to fewer asset retirements in the first six months of 2022 compared to the first six months of 2021 and a smaller asset base resulting from the impairment of the Nipisi and Mitsue Pipeline systems and the Edmonton South Rail Terminal in the fourth quarter of 2021 due to contract expirations.
Share of profit from equity accounted investees
Increase primarily due to higher share of profit from Alliance as a result of higher volumes driven by a wider AECO-Chicago natural gas price differential, combined with the sale of linepack inventory in the second quarter of 2022 and lower interest expenses as a result of its debt re-financing in the fourth quarter of 2021, partially offset by lower contributions from Ruby due to Ruby Pipeline filing for bankruptcy protection on March 31, 2022. Refer to the "Selected Equity Accounted Investee Information" section for further details on Ruby.
Reportable segment earnings before tax
Increase largely due to higher volumes on the Peace Pipeline system and higher tolls due to inflation, combined with higher contribution from Alliance, higher recoverable costs from the Horizon Pipeline system, lower depreciation and a $10 million impairment charge recognized during the first quarter of 2021 associated with an advance made to Ruby compared to nil recognized in the first six months of 2022, partially offset by a lower contribution from Ruby and the expiration of contracts on the Nipisi and Mitsue Pipeline systems.
Adjusted EBITDA(3)
Decrease primarily due to lower adjusted EBITDA from Ruby, combined with the same items impacting reportable segment earnings before tax, net of the change in impairments and depreciation. Included in adjusted EBITDA is $161 million (2021: $140 million) related to Alliance and $15 million (2021: $87 million) related to Ruby. Refer to the "Selected Equity Accounted Investee Information" section for further details on Ruby.
Volumes(mboe/d)(4)
Decrease largely driven by Ruby Pipeline filing for bankruptcy protection on March 31, 2022 and contract expirations on the Nipisi and Mitsue Pipeline systems, combined with lower volumes on AEGS due to third party outages, partially offset by higher volumes on the Peace Pipeline system and Drayton Valley Pipeline as higher crude oil and NGL market prices have resulted in increased upstream activity, and higher volumes on the Cochin Pipeline. Volumes include 144 mboe/d (2021: 142 mboe/d) related to Alliance and 28 mboe/d (2021: 102 mboe/d) related to Ruby.
Distributions from equity accounted investees
$170 million (2021: $115 million) from Alliance and nil (2021: $13 million) from Ruby. The change in distributions is due to the same factors impacting share of profit from equity accounted investees discussed above.
Pembina Pipeline Corporation Second Quarter 2022 11

Change in Adjusted EBITDA ($ millions)(2)(3)

Change in Reportable Segment Earnings Before Tax($ millions)(2)
(1) Includes inter-segment transactions. See Note 10 to the Interim Financial Statements.
(2) Conventional, transmission and oil sands revenue include revenue generated from Pembina's conventional, transmission and oil sands and heavy oil assets within the Pipelines operating segment, respectively. For further details on Pembina's assets, refer to Pembina's AIF for the year ended December 31, 2021.
(3) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.
(4) Revenue volumes. See the "Abbreviations" section of this MD&A for definition.
12Pembina Pipeline CorporationSecond Quarter 2022

Financial and Operational Overview
3 Months Ended June 30 6 Months Ended June 30
2022 2021 2022 2021
($ millions, except where noted)
Volumes(1)
Reportable Segment Earnings Before Tax
Adjusted EBITDA(2)
Volumes(1)
Reportable Segment Earnings Before Tax
Adjusted EBITDA(2)
Volumes(1)
Reportable Segment Earnings Before Tax
Adjusted
EBITDA(2)
Volumes(1)
Reportable Segment Earnings Before Tax
Adjusted
EBITDA(2)
Pipelines(3)
Conventional 937 254 298 892 220 269 917 499 584 877 419 521
Transmission 564 102 168 685 69 185 593 187 334 680 156 388
Oil Sands 975 27 58 1,050 36 68 976 64 133 1,050 83 142
General & administrative(4)
- (1) (1) - - - - (7) (7) - - -
Total 2,476 382 523 2,627 325 522 2,486 743 1,044 2,607 658 1,051
(1) Revenue volumes in mboe/d. See the "Abbreviations" section of this MD&A for definition.
(2) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.
(3) Includes values attributed to Pembina's conventional, transmission and oil sands and heavy oil assets within the Pipelines operating segment. Refer to Pembina's AIF for the year ended December 31, 2021.
(4) Includes general & administrative expenses related to engineering & construction, systems & operations, and business development within the Pipeline operating segment. These expenses were included at the asset level in 2021 and elevated to the divisional level as at January 1, 2022.
Projects & New Developments(1)
Pipelines continues to focus on the execution of various system expansions. The projects in the following table were recently placed into service.
Significant Projects In-service Date
NEBC Montney Infrastructure February 2021
Phase VII Peace Pipeline Expansion June 2022
The following outlines the projects and new developments within Pipelines:
Phase VII was completed approximately $150 million under budget and was placed into service June 1, 2022. Phase VII was constructed to provide transportation for the growing condensate supply in the WCSB and will divert condensate off of the existing LaGlace-Kakwa-Fox Creek corridor, creating additional firm capacity for Pembina's customers.
Pembina has now executed the previously referenced long-term agreements with a third leading NEBC Montney producer, Tourmaline Oil Corp. ("Tourmaline"), which include the commitment of significant volumes from another multi-phase NEBC Montney development. The agreements allow Tourmaline to call for future firm transportation and fractionation services on a take-or-pay basis as the acreage is developed. This most recent agreement, together with two other previously executed NEBC Montney service agreements, provide three leading Montney producers with certainty of transportation egress from this key area for their future development and access to the remainder of Pembina's integrated value chain, including fractionation and marketing services.
The contracting of Alliance Pipeline continues to progress very well, highlighting the strong AECO-Chicago price differential and the value of Alliance's reliable and highly competitive access to mid-western U.S. gas markets, and as a conduit to the Gulf Coast and its robust LNG market. During the second quarter of 2022, Alliance offered three open seasons to the market. The largest of the open seasons resulted in approximately 270 mmcf/d of incremental long-term firm service, with a volume weighted average term of 15 years, commencing in November 2022. The other two open seasons were for short-term firm service. Recent open seasons have resulted in Alliance being contracted over 90 percent for both the current gas year ending October 31, 2022 and next gas year, ending October 31, 2023.
Pembina Pipeline Corporation Second Quarter 2022 13

Phase VIII Peace Pipeline Expansion
Capital Budget: $530 million
In-service Date: First half of 2024
Status: On time, trending on budget
During the second quarter, Pembina reactivated the previously deferred Phase VIII Peace Pipeline Expansion. Phase VIII will enable segregated pipeline service for ethane-plus and propane-plus NGL mix from Gordondale, Alberta, which is centrally located within the Montney trend, into the Edmonton area for market delivery. The project includes new 10-inch and 16-inch pipelines, totaling approximately 150 km, in the Gordondale to La Glace corridor of Alberta, as well as new mid-point pump stations and terminal upgrades located throughout the Peace Pipeline system. Phase VIII will add approximately 235 mbpd of incremental capacity between Gordondale, Alberta and La Glace, Alberta, as well as approximately 65 mbpd of capacity between La Glace, Alberta and the Namao hub near Edmonton, Alberta.
The project has an estimated cost of approximately $530 million, which relative to the original $500 million cost estimate, reflects additional capital compared to the original scope, including $90 million of infrastructure previously removed out of Phase VII. Further, the revised cost estimate reflects the net positive effect of cost savings arising from contracting strategies and value engineering over cost increases due to market factors. Approximately $75 million had been spent on this project at the end of 2021, with an incremental $65 million expected to be spent in 2022. Engineering and procurement activities are underway.
Phase IX Peace Pipeline Expansion
Capital Budget: $120 million
In-service Date: Fourth quarter of 2022
Status: On time, trending on budget
This expansion includes new 6-inch and 16-inch pipelines debottlenecking the corridor north of Gordondale, Alberta as well as upgrades at one pump station. In addition, this expansion will see existing pipelines, which are currently batching, converted to single product lines. Phase IX also includes a pump station in the Wapiti-to-Kakwa corridor that was previously part of the Phase VII project scope. Construction of the Wapiti-to-Kakwa pump station was completed in July 2022. Further, clearing activities are complete and mainline pipeline construction commenced in June as planned.
(1) For further details on Pembina's significant assets, including definitions for capitalized terms used herein that are not otherwise defined, refer to Pembina's AIF for the year ended December 31, 2021 filed at www.sedar.com (filed with the U.S. Securities and Exchange Commission at www.sec.gov under Form 40-F) and on Pembina's website at www.pembina.com.
14Pembina Pipeline CorporationSecond Quarter 2022

Facilities
Financial Overview for the Three Months Ended June 30
Results of Operations(1)
($ millions, except where noted) 2022 2021 Change
Gas Services revenue(2)(3)
176 163 13
NGL Services revenue(2)(3)
184 171 13
Facilities revenue(2)
360 334 26
Operating expenses(2)
141 112 29
Cost of goods sold(2)
2 2 -
Depreciation and amortization included in operations
80 56 24
Realized gain on commodity-related derivative financial instruments (10) - (10)
Unrealized loss (gain) on commodity-related derivative financial instruments 9 (16) 25
Share of profit from equity accounted investees
20 18 2
Gross profit 158 198 (40)
Reportable segment earnings before tax 143 161 (18)
Adjusted EBITDA(4)
277 270 7
Volumes (mboe/d)(5)
868 873 (5)
Distributions from equity accounted investees 33 34 (1)
Changes in Results
Gas Services revenue(2)(3)
Increase largely due to higher contracted volumes at the Cutbank Complex and higher recoveries as a result of higher power and fuel costs.
NGL Services revenue(2)(3)
Increase primarily due to higher recoveries at the Redwater Complex as a result of higher power and fuel costs.
Operating expenses(2)
Increase largely due to an increase in power and fuel costs, the majority of which are recovered in revenue, as a result of higher power pool prices and higher AECO prices during the second quarter of 2022, combined with higher integrity costs.
Depreciation and amortization included in operations
Increase primarily due to asset retirements in the second quarter of 2022.
Realized gain on commodity-related derivatives
Certain gas processing fees are tied to AECO prices and the increase in the AECO price has resulted in a realized gain for the second quarter of 2022.
Unrealized loss (gain) on commodity-related derivatives
Unrealized loss on commodity-related derivatives primarily due to contracts maturing in the period.
Share of profit from equity accounted investees
Consistent with the prior period.
Reportable segment earnings before tax
Decrease primarily due to the unrealized loss on commodity-related derivatives in the second quarter of 2022 compared to gains in the second quarter of 2021 and higher depreciation, partially offset by a $21 million impairment charge recognized on Pembina's interest in Fort Corp. during the second quarter of 2021 compared to nil recognized in the second quarter of 2022, combined with a realized gain on commodity-related derivatives recognized in the first quarter of 2022 and higher contracted volumes at the Cutbank Complex.
Adjusted EBITDA(4)
Increase primarily due to the realized gain on commodity-related derivatives recognized in the second quarter of 2022 and higher contracted volumes at the Cutbank Complex. Included in adjusted EBITDA is $50 million (2021: $50 million) related to Veresen Midstream.
Volumes (mboe/d)(5)
Consistent with the prior period. Lower volumes at the Saturn Complex due to scheduled maintenance, largely offset by higher contracted volumes at the Cutbank Complex. Volumes include 89 mboe/d (2021: 86 mboe/d) related to Veresen Midstream.
Distributions from equity accounted investees
Consistent with the prior period. $32 million (2021: $33 million) from Veresen Midstream and $1 million (2021: $1 million) from Fort Corp.
Pembina Pipeline Corporation Second Quarter 2022 15

Change in Adjusted EBITDA ($ millions)(3)(4)

Change in Reportable Segment Earnings Before Tax($ millions)(3)
(1) At June 30, 2022, Pembina reclassified all of the assets and liabilities associated with the gas processing assets that will be disposed of as part of the Newco transaction to Assets and Liabilities Held for Sale on its Statement of Financial Position. There was no impact to Pembina's operating results or cash flows for the second quarter of 2022. Closing is expected to occur in August 2022.
(2) Includes inter-segment transactions. See Note 10 to the Interim Financial Statements.
(3) Gas services and NGL services revenue include revenue generated from Pembina's gas services and NGL services assets within the Facilities operating segment, respectively. For further details on Pembina's assets, refer to Pembina's AIF for the year ended December 31, 2021.
(4) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.
(5) Revenue volumes. See the "Abbreviations" section of this MD&A for definition.
16Pembina Pipeline CorporationSecond Quarter 2022

Financial Overview for the Six Months Ended June 30
Results of Operations(1)
($ millions, except where noted) 2022 2021 Change
Gas Services revenue(2)(3)
351 331 20
NGL Services revenue(2)(3)
366 342 24
Facilities revenue(2)
717 673 44
Operating expenses(2)
275 223 52
Cost of goods sold(2)
2 6 (4)
Depreciation and amortization included in operations
135 102 33
Realized gain on commodity-related derivative financial instruments
(17) - (17)
Unrealized gain on commodity-related derivative financial instruments (51) (17) (34)
Share of profit from equity accounted investees
44 36 8
Gross profit 417 395 22
Reportable segment earnings before tax 389 348 41
Adjusted EBITDA(4)
558 539 19
Volumes (mboe/d)(5)
872 884 (12)
Distributions from equity accounted investees 68 63 5
Changes in Results
Gas Services revenue(2)(3)
Increase largely due to higher contracted volumes at the Cutbank Complex and higher recoveries as a result of higher power and fuel costs.
NGL Services revenue(2)(3)
Increase primarily due to higher recoveries at the Redwater Complex as a result of higher power and fuel costs and the Prince Rupert Terminal being placed into service in March 2021.
Operating expenses(2)
Increase largely due to an increase in power and fuel costs, the majority of which are recovered in revenue, as a result of higher power pool prices and higher AECO prices during the first six months of 2022, combined with higher integrity costs.
Depreciation and amortization included in operations
Increase primarily due to asset retirements in the first six months of 2022, combined with the Prince Rupert Terminal being placed into service in March 2021.
Realized & unrealized gain on commodity-related derivatives
Certain gas processing fees are tied to AECO prices and the significant increase in the AECO price resulted in higher unrealized and realized gains during the first six months of 2022.
Share of profit from equity accounted investees
Increase primarily due to higher volumes on the Dawson Assets and from the Veresen Midstream Hythe Developments going into service in March 2021.
Reportable segment earnings before tax
Increase primarily due to the higher gains on commodity-related derivatives recognized during the first six months of 2022, combined with a $21 million impairment charge recognized on Pembina's interest in Fort Corp. during the second quarter of 2021 compared to nil recognized in the second quarter of 2022, higher contracted volumes at the Cutbank Complex and higher contribution from Veresen Midstream, partially offset by higher depreciation and higher integrity costs.
Adjusted EBITDA(4)
Increase primarily due to the realized gain on commodity-related derivatives recognized during the first six months of 2022, higher contracted volumes at the Cutbank Complex and higher contribution from Veresen Midstream, partially offset by higher integrity costs. Included in adjusted EBITDA is $104 million (2021: $96 million) related to Veresen Midstream.
Volumes (mboe/d)(5)
Decrease largely due to lower volumes at the Redwater Complex, combined with, lower volumes at the Saturn Complex due to scheduled maintenance, partially offset by higher volumes on the Dawson Assets and from the Veresen Midstream Hythe Developments going into service in March 2021 and higher contracted volumes at the Cutbank Complex. Volumes include 90 mboe/d (2021: 84 mboe/d) related to Veresen Midstream.
Distributions from equity accounted investees
Consistent with the prior period. $66 million (2021: $61 million) from Veresen Midstream and $2 million (2021: $2 million) from Fort Corp.

Pembina Pipeline Corporation Second Quarter 2022 17

Change in Adjusted EBITDA ($ millions)(3)(4)

Change in Reportable Segment Earnings Before Tax($ millions)(3)
(1) At June 30, 2022, Pembina reclassified all of the assets and liabilities associated with the gas processing assets that will be disposed of as part of the Newco transaction to Assets and Liabilities Held for Sale on its Statement of Financial Position. There was no impact to Pembina's operating results or cash flows for the second quarter of 2022. Closing is expected to occur in August 2022.
(2) Includes inter-segment transactions. See Note 10 to the Interim Financial Statements.
(3) Gas services and NGL services revenue include revenue generated from Pembina's gas services and NGL services assets within the Facilities operating segment, respectively. For further details on Pembina's assets, refer to Pembina's AIF for the year ended December 31, 2021.
(4) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.
(5) Revenue volumes. See the "Abbreviations" section of this MD&A for definition.
18Pembina Pipeline CorporationSecond Quarter 2022

Financial and Operational Overview
3 Months Ended June 30 6 Months Ended June 30
2022 2021 2022 2021
($ millions, except where noted)
Volumes(1)
Reportable Segment Earnings Before Tax
Adjusted EBITDA(2)
Volumes(1)
Reportable Segment Earnings Before Tax
Adjusted EBITDA(2)
Volumes(1)
Reportable Segment Earnings Before Tax
Adjusted
EBITDA(2)
Volumes(1)
Reportable Segment Earnings Before Tax
Adjusted
EBITDA(2)
Facilities(3)
Gas Services 664 71 171 662 101 155 669 238 341 669 193 308
NGL Services 204 73 107 211 60 115 203 156 222 215 155 231
General & administrative(4)
- (1) (1) - - - - (5) (5) - - -
Total 868 143 277 873 161 270 872 389 558 884 348 539
(1) Revenue volumes in mboe/d, with natural gas volumes converted to mboe/d from MMcf/d at a 6:1 ratio. See the "Abbreviations" section of this MD&A for definition.
(2) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.
(3) Includes values attributed to Pembina's gas and NGL services assets within the Facilities operating segment. For a description of Pembina's gas and NGL assets, refer to Pembina's AIF for the year ended December 31, 2021.
(4) Includes general & administrative expenses related to engineering & construction and business development within the Facilities operating segment. These expenses were included at the asset level in 2021 and elevated to the divisional level as at January 1, 2022.
Projects & New Developments(1)
Facilities continues to build-out its natural gas and NGL processing and fractionation assets to service customer demand. The projects in the following table were recently placed into service.
Significant Projects In-service Date
Vancouver Wharves Expansion
June 2021
Prince Rupert Terminal March 2021
Veresen Midstream(2)
Hythe Developments March 2021
The following outlines the projects and new developments within Facilities:
Empress Cogeneration Facility
Capital Budget: $120 million
In-service Date: Third quarter of 2022
Status: Ahead of schedule, on budget
The Empress Cogeneration Facility will use natural gas to generate up to 45 megawatts of electrical power, thereby reducing overall operating costs by providing electricity and heat to the existing Empress NGL Extraction Facility. All the power will be consumed on site, thereby supplying up to 90 percent of the site's electrical requirements. Further, this project will contribute to annual greenhouse gas emission reductions at the Empress NGL Extraction Facility through the utilization of the cogeneration waste heat and the low-emission power generated. Pembina anticipates a reduction of approximately 90,000 tonnes of carbon dioxide equivalent per year based on the current energy demand of the Empress NGL Extraction Facility. The electrical contractor is finishing their scope of work and commissioning activities are underway.
(1) For further details on Pembina's significant assets, including definitions for capitalized terms used herein that are not otherwise defined, refer to Pembina's AIF for the year ended December 31, 2021 filed at www.sedar.com (filed with the U.S. Securities and Exchange Commission at www.sec.gov under Form 40-F) and on Pembina's website at www.pembina.com.
(2) Veresen Midstream is an equity accounted investee, in which Pembina had a 45 percent interest in as of June 30, 2022. Results from Veresen Midstream impact share of profit from equity accounted investees and proportionally consolidated metrics. See Note 4 to the Interim Financial Statements.
Pembina Pipeline Corporation Second Quarter 2022 19

Marketing & New Ventures
Financial Overview for the Three Months Ended June 30
Results of Operations
($ millions, except where noted) 2022
2021(1)
Change
Marketing revenue(2)
2,300 1,163 1,137
Cost of goods sold(2)
2,157 1,098 1,059
Net revenue(2)(3)
143 65 78
Depreciation and amortization included in operations 11 12 (1)
Realized loss on commodity-related derivative financial instruments 59 33 26
Unrealized (gain) loss on commodity-related derivative financial instruments (74) 15 (89)
Share of profit from equity accounted investees 6 7 (1)
Gross profit 153 12 141
Reportable segment earnings before tax 139 9 130
Adjusted EBITDA(3)
103 38 65
Volumes (mboe/d)(4)
176 173 3
Distributions from equity accounted investees 29 18 11
Change in Results
Net revenue(2)(3)
Higher margins on crude oil and NGL sales as a result of the increased crude oil and NGL market price environment contributed to a significant quarter-over-quarter increase for the marketing business.
Realized loss on commodity-related derivatives
Realized loss primarily due to higher crude oil and NGL market prices during the second quarter of 2022, which also drove higher margins on crude oil and NGL sales, resulting in a realized loss on crude oil- and NGL- based derivative instruments for the period.
Unrealized (gain) loss on commodity-related derivatives
Unrealized gain on commodity-related derivatives primarily due to contracts maturing in the period, the change in the forward prices for power and propane during the second quarter of 2022, partially offset by newly added contracts.
Share of profit from equity accounted investees Consistent with the prior period. Higher revenues at Aux Sable as a result of a wider AECO-Chicago natural gas price differential and higher NGL margins were largely offset by an unrealized loss on commodity-related derivatives.
Reportable segment earnings before tax
Increase largely due to higher margins on crude oil and NGL sales, discussed above, combined with a gain on commodity-related derivatives for the second quarter of 2022 compared to the second quarter of 2021.
Adjusted EBITDA(3)
Increase largely due to the same items impacting reportable segment earnings before tax, discussed above, net of the unrealized gain on commodity-related derivatives, combined with higher adjusted EBITDA from Aux Sable due to a wider AECO-Chicago natural gas price differential and higher NGL margins. Included in adjusted EBITDA is $41 million (2021: $14 million) related to Aux Sable.
Volumes (mboe/d)(4)
Consistent with the prior period. Revenue volumes includes 39 mboe/d (2021: 36 mboe/d) related to Aux Sable.
Distributions from equity accounted investees
$29 million (2021: $18 million) from Aux Sable. Increase largely due to higher revenues at Aux Sable as a result of a wider AECO-Chicago natural gas price differential and higher NGL margins.
20Pembina Pipeline CorporationSecond Quarter 2022

Change in Adjusted EBITDA ($ millions)(3)

Change in Reportable Segment Earnings Before Tax(1)(5)($ millions)
(1) Comparative 2021 period has been restated. See "Accounting Policies & Estimates - Restatement of Revenue and Cost of Goods Sold" section of this MD&A and Note 15 to the Interim Financial Statements for further details.
(2) Includes inter-segment transactions. See Note 10 to the Interim Financial Statements.
(3) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.
(4) Marketed NGL volumes. See the "Abbreviations" section of this MD&A for definition.
(5) Other includes depreciation & amortization, impairment expense and net finance costs.
Pembina Pipeline Corporation Second Quarter 2022 21

Financial Overview for the Six Months Ended June 30
Results of Operations
($ millions, except where noted) 2022
2021(1)
Change
Marketing revenue(2)
4,571 2,434 2,137
Cost of goods sold(2)
4,124 2,195 1,929
Net revenue(2)(3)
447 239 208
Depreciation and amortization included in operations 22 25 (3)
Realized loss on commodity-related derivative financial instruments 113 121 (8)
Unrealized (gain) loss on commodity-related derivative financial instruments (39) 21 (60)
Share of profit from equity accounted investees 27 13 14
Gross profit 378 85 293
Reportable segment earnings before tax 360 76 284
Adjusted EBITDA(3)
370 128 242
Volumes (mboe/d)(4)
191 197 (6)
Distributions from equity accounted investees 62 36 26
Change in Results
Net revenue(2)(3)
Higher margins on crude oil and NGL sales as a result of the increased crude oil and NGL price environment contributed to a significant year-over-year increase for the marketing business.
Realized loss on commodity-related derivatives
Realized loss primarily due to higher crude oil and NGL market prices during the first six months of 2022, which also drove higher margins on crude oil and NGL sales, resulting in a realized loss on crude oil- and NGL- based derivative instruments for the period.
Unrealized (gain) loss on commodity-related derivatives
Unrealized gain on commodity-related derivatives primarily due to contracts maturing in the period, combined with the increase in the forward prices for power and natural gas during the first six months of 2022, partially offset by newly added contracts.
Share of profit from equity accounted investees
Increase largely due to higher revenues at Aux Sable as a result of a wider AECO-Chicago natural gas price differential during the majority of the first six months of 2022 and higher NGL margins, partially offset by an unrealized loss on commodity-related derivatives.
Reportable segment earnings before tax
Increase largely due to higher margins on crude oil and NGL sales as a result of the higher crude oil and NGL prices, combined with the unrealized gain on commodity-related derivatives for the first six months of 2022 compared to the first six months of 2021, a higher contribution from Aux Sable, discussed above, and a lower realized loss on commodity-related derivatives for the first six months of 2022 compared to the first six months of 2021.
Adjusted EBITDA(3)
Increase largely due to the same items impacting reportable segment earnings before tax, discussed above, net of the unrealized gain on commodity-related derivatives, combined with higher adjusted EBITDA from Aux Sable due to a wider AECO-Chicago natural gas price differential during the majority of the first six months of 2022 and higher NGL margins. Included in adjusted EBITDA is $69 million (2021: $26 million) related to Aux Sable.
Volumes (mboe/d)(4)
Consistent with the prior period. Revenue volumes includes 36 mboe/d (2021: 36 mboe/d) related to Aux Sable.
Distributions from equity accounted investees
$62 million (2021: $36 million) from Aux Sable. Increase largely due to the same factors impacting share of profit from equity accounted investees discussed above.

22Pembina Pipeline CorporationSecond Quarter 2022

Change in Adjusted EBITDA($ millions)(3)

Change in Reportable Segment Earnings Before Tax(1)(5)($ millions)
(1) Comparative 2021 period has been restated. See "Accounting Policies & Estimates - Restatement of Revenue and Cost of Goods Sold" section of this MD&A and Note 15 to the Interim Financial Statements for further details.
(2) Includes inter-segment transactions. See Note 10 to the Interim Financial Statements.
(3) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.
(4) Marketed NGL volumes. See the "Abbreviations" section of this MD&A for definition.
(5) Other includes depreciation & amortization, impairment expense and net finance costs.
Pembina Pipeline Corporation Second Quarter 2022 23

Financial and Operational Overview
3 Months Ended June 30 6 Months Ended June 30
2022 2021 2022 2021
($ millions, except where noted)
Volumes(1)
Reportable Segment Earnings Before Tax
Adjusted EBITDA(2)
Volumes(1)
Reportable Segment Earnings Before Tax
Adjusted EBITDA(2)
Volumes(1)
Reportable Segment Earnings Before Tax
Adjusted
EBITDA(2)
Volumes(1)
Reportable Segment Earnings Before Tax
Adjusted
EBITDA(2)
Marketing & New Ventures(3)
Marketing 176 146 111 173 13 42 191 371 382 197 85 135
New Ventures(4)
- (7) (8) - (4) (4) - (11) (12) - (9) (7)
Total 176 139 103 173 9 38 191 360 370 197 76 128
(1) Marketed NGL volumes in mboe/d. Marketed NGL volumes. See the "Abbreviations" section of this MD&A for definition.
(2) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.
(3) Includes values attributed to Pembina's marketing activities and new ventures projects within the Marketing & New Ventures operating segment. For further details on Pembina's marketing activities and projects, refer to Pembina's AIF for the year ended December 31, 2021.
(4) All New Ventures projects have not yet commenced operations and therefore have no volumes.
Projects & New Developments(1)
Pembina's New Ventures group continues to advance business opportunities in liquefied natural gas ("LNG"), low-carbon energy, and petrochemicals. New Ventures is focused on developing opportunities that integrate into Pembina's core businesses, while progressing projects that will extend Pembina's value-chain and benefit stakeholders.
Pembina has formed a partnership with the Haisla First Nation to develop the proposed Cedar LNG Project, a floating LNG facility strategically positioned to leverage Canada's abundant natural gas supply and British Columbia's growing LNG infrastructure to produce industry-leading low carbon, low-cost Canadian LNG for overseas markets. Cedar LNG's application for an Environmental Assessment Certificate was submitted to the British Columbia Environmental Assessment Office in February of 2022 and is currently under review. Front End Engineering Design activities and commercial discussions with a diverse group of potential customers are both underway.
Pembina and TC Energy Corporation ("TC Energy") intend to develop the Alberta Carbon Grid ("ACG"), a world-leading carbon transportation and sequestration platform that will enable Alberta-based industries to effectively manage their greenhouse gas emissions, contribute positively to Alberta's current and future lower-carbon economy, and create sustainable long-term value for Pembina and TC Energy stakeholders. During the first quarter of 2022, the Government of Alberta announced that ACG was successfully chosen to move to the next stage of the province's carbon capture utilization and storage process in the industrial heartland. During the second quarter, Pembina and TC Energy progressed discussions with the Government of Alberta, surface and sub-surface engineering and planning, and engagement with customers and stakeholders. Pembina and TC Energy are exploring options to potentially create several hubs throughout the province to gather and store carbon dioxide ("CO2") safely and cost-effectively from multiple industries. Pembina's and TC Energy's long-term vision is to annually transport and store up to 20 million tonnes of CO2 through several hubs across Alberta.
(1) For further details on Pembina's significant assets, including definitions for capitalized terms used herein that are not otherwise defined, refer to Pembina's AIF for the year ended December 31, 2021 filed at www.sedar.com (filed with the U.S. Securities and Exchange Commission at www.sec.gov under Form 40-F) and on Pembina's website at www.pembina.com.
24Pembina Pipeline CorporationSecond Quarter 2022

Corporate
Financial Overview for the Three Months Ended June 30
Results of Operations(1)
($ millions, except where noted) 2022 2021 Change
General and administrative 65 62 3
Other (income) expense (14) 18 (32)
Net finance costs 98 86 12
Reportable segment loss before tax (149) (167) 18
Adjusted EBITDA(2)
(54) (52) (2)
Change in Results
General & administrative
Consistent with the prior period.
Other (income) expense
Decrease primarily due to lower acquisition costs related to the arrangement agreement with Inter Pipeline Ltd. which was terminated in the third quarter of 2021.
Net finance costs
Increase primarily driven by foreign exchange losses compared to gains in the second quarter of 2021 as the value of the Canadian dollar relative to the U.S. dollar decreased during the second quarter of 2022.
Reportable segment loss before tax
Increase primarily due to lower acquisition costs, discussed above, partially offset by foreign exchange losses in the second quarter of 2022.
Adjusted EBITDA(2)
Consistent with the prior period.
(1) Includes inter-segment eliminations.
(2) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.
Financial Overview for the Six Months Ended June 30
Results of Operations(1)
($ millions, except where noted) 2022 2021 Change
General and administrative
141 128 13
Other expense 3 28 (25)
Net finance costs 200 175 25
Reportable segment loss before tax (344) (331) (13)
Adjusted EBITDA(2)
(118) (105) (13)
Change in Results
General & administrative
Increase primarily due to higher long-term incentive costs driven by Pembina's performance relative to peers.
Other expense
Decrease primarily due to lower acquisition costs related to the arrangement agreement with Inter Pipeline Ltd. which was terminated in the third quarter of 2021 and lower restructuring costs.
Net finance costs
Increase primarily driven by foreign exchange losses in the period compared to gains in the first six months of 2021 as the value of the Canadian dollar relative to the U.S. dollar decreased in the period, combined with higher interest expense as a result of terming out variable rate debt to fixed rate debt at higher interest rates.
Reportable segment loss before tax
Decrease primarily due to foreign exchange losses in the first six months of 2022, combined with higher long-term incentive costs and interest expense, discussed above, partially offset by lower acquisition costs and lower restructuring costs, discussed above.
Adjusted EBITDA(2)
Decrease primarily due to higher long-term incentive costs, discussed above.
(1) Includes inter-segment eliminations.
(2) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.
Pembina Pipeline Corporation Second Quarter 2022 25

4. LIQUIDITY & CAPITAL RESOURCES
Available Sources of Liquidity
($ millions) June 30, 2022 December 31, 2021
Working capital(1)
985 (1,145)
Variable rate debt(2)(3)
Senior unsecured credit facilities 862 910
Variable rate bank debt swapped to fixed (322) (316)
Total variable rate loans and borrowings outstanding (weighted average interest rate of 2.9% (2021: 1.1%)) 540 594
Fixed rate debt(2)
Senior unsecured medium-term notes 9,650 9,700
Variable rate bank debt swapped to fixed 322 316
Total fixed rate loans and borrowings outstanding (weighted average interest rate of 3.9% (2021: 3.9%)) 9,972 10,016
Total loans and borrowings outstanding 10,512 10,610
Cash and unutilized debt facilities 2,476 2,469
Subordinated hybrid notes (weighted average interest rate of 4.8% (2021: 4.8%) 600 600
(1) As at June 30, 2022, working capital included $1.5 billion (December 31, 2021: $1.0 billion) associated with the current portion of long-term debt.
(2) Face value.
(3) Includes U.S. $250 million variable rate debt outstanding at June 30, 2022 (December 31, 2021: U.S. $250 million).
Pembina currently anticipates that its cash flow from operating activities, the majority of which is derived from fee-based contracts, will be more than sufficient to meet its operating obligations, to fund its dividend and to fund its capital expenditures in the short-term and long-term. Pembina expects to source funds required for debt maturities from cash, its credit facilities and by accessing the capital markets, as required. Based on its successful access to financing in the capital markets over the past several years, Pembina expects to continue to have access to additional funds as required. Refer to "Risk Factors - General Risk Factors - Additional Financing and Capital Resources" in Pembina's MD&A for the year ended December 31, 2021 and Note 25 to the Consolidated Financial Statements for more information. Management continues to monitor Pembina's liquidity situation and remains satisfied that the leverage employed in Pembina's capital structure is sufficient and appropriate given the characteristics and operations of the underlying asset base.
Management may adjust Pembina's capital structure as a result of changes in economic conditions or the risk characteristics of the underlying assets. To maintain or modify Pembina's capital structure in the future, Pembina may renegotiate debt terms, repay existing debt, seek new borrowings, issue additional equity or hybrid securities and/or repurchase additional common or preferred shares.
As at June 30, 2022, Pembina's credit facilities consisted of: an unsecured $2.5 billion (December 31, 2021: $2.5 billion) revolving credit facility, which includes a $750 million (December 31, 2021: $750 million) accordion feature and matures in June 2026 (the "Revolving Facility"); an unsecured $425 million (December 31, 2021: $500 million) non-revolving term loan, which matures in August 2022; an unsecured U.S. $250 million (December 31, 2021: U.S. $250 million) non-revolving term loan, which matures in May 2025; and an operating facility of $20 million (December 31, 2021: $20 million), which matures in May 2023 and is typically renewed on an annual basis (collectively, the "Credit Facilities"). There are no mandatory principal repayments due over the term of the Credit Facilities, with principal repayments not due until maturity. Pembina is required to meet certain specific and customary affirmative and negative financial covenants under the indenture governing its medium-term notes and the agreements governing its Credit Facilities, including a requirement to maintain certain financial ratios. See "Liquidity & Capital Resources - Covenants" below for more information. Pembina is also subject to customary restrictions on its operations and activities under the indenture governing its medium-term notes and the agreements governing its Credit Facilities, including restrictions on the granting of security, incurring indebtedness and the sale of its assets.
26Pembina Pipeline CorporationSecond Quarter 2022

Financing Activity
On March 14, 2022, Pembina's $50 million senior unsecured medium term notes, series 3A, matured and were fully repaid.
On June 24, 2022, Pembina repaid $75 million on its non-revolving term loan. As at June 30, 2022 the non-revolving term loan has an outstanding balance of $425 million.
Following the second quarter of 2022, on July 27, 2022, the Revolving Facility was replaced with two credit facilities: an unsecured $1.0 billion sustainability linked revolving credit facility (the "SLL Credit Facility") that has a term of four years, maturing June 2026 and an amendment and restatement of the Revolving Facility into an unsecured $1.5 billion revolving credit facility, which includes a $750 million accordion feature and matures in June 2027 (the "New Revolving Facility"). The SLL Credit Facility contains pricing adjustments that reduce or increase borrowing costs based on Pembina's performance relative to a greenhouse gas ("GHG") emissions intensity reduction performance target. Previously, Pembina announced its commitment to reduce its GHG emissions intensity by 30 percent by 2030, relative to baseline 2019 levels. The specific terms of the SLL Credit Facility include annual intermediate targets that align with Pembina's trajectory towards its 2030 goal.
With the exception of the sustainability linked adjustments to borrowing costs, the terms and conditions of the SLL Credit Facility and the New Revolving Facility, including financial covenants, are substantially similar to each other and are substantially similar to the Revolving Facility.
Covenants
Pembina's financial covenants under the indenture governing its medium-term notes and the agreements governing the Credit Facilities include the following:
Debt Instrument
Financial Covenant(1)
Ratio
Ratio as at June 30, 2022
Senior unsecured medium-term notes Funded Debt to Capitalization Maximum 0.70 0.41
Credit Facilities
Debt to Capital
Maximum 0.70
0.42
(1) Terms as defined in relevant agreements.
Pembina was in compliance with all covenants under the note indenture governing its medium-term notes and the agreements governing its Credit Facilities as at June 30, 2022 (December 31, 2021: in compliance).
Credit Risk
Pembina continues to actively monitor and reassess the creditworthiness of its counterparties. The majority of Pembina's credit exposure is to investment grade or split-investment grade counterparties. Pembina assesses all counterparties during the on-boarding process and actively monitors credit limits and exposure across the business. Pembina may reduce or mitigate its exposure to certain counterparties where it is deemed warranted and permitted under contractual terms. Where warranted, financial assurances may be sought from counterparties to mitigate and reduce risk, which assurances may include guarantees, letters of credit and cash collateral. Letters of credit totaling $175 million (December 31, 2021: $100 million) were held as at June 30, 2022, primarily in respect of customer trade receivables.
Pembina Pipeline CorporationSecond Quarter 2022 27

Credit Ratings
The following information with respect to Pembina's credit ratings is provided as such information relates to Pembina's financing costs and liquidity. Specifically, credit ratings affect Pembina's ability to obtain short-term and long-term financing and the cost of such financing. A reduction in the current ratings of Pembina's debt by its rating agencies, particularly a downgrade below investment-grade ratings, could adversely affect Pembina's cost of financing and its access to sources of liquidity and capital. In addition, changes in credit ratings and the associated costs may affect Pembina's ability to enter into normal course derivative or hedging transactions. Credit ratings are intended to provide investors with an independent measure of the credit quality of any issues of securities. The credit ratings assigned by the rating agencies are not recommendations to purchase, hold or sell the securities, nor do the credit ratings comment on the market price or suitability for a particular investor. Any credit rating may not remain in effect for a given period of time or may be revised or withdrawn entirely by a rating agency in the future if, in its judgment, circumstances so warrant.
DBRS Limited ("DBRS") rates Pembina's senior unsecured medium-term notes 'BBB (high)'. DBRS has also assigned a debt rating of 'BBB (low)' to Pembina's Series 1 Subordinated Notes and a rating of 'Pfd-3 (high)' for each issued series of Pembina's Class A Preferred Shares, other than the Class A Preferred Shares, Series 2021-A (the "Series 2021-A Class A Preferred Shares"), which are deliverable to the holders of the Series 1 Subordinated Notes following the occurrence of certain bankruptcy or insolvency events in respect of Pembina.
The long-term corporate credit rating assigned by S&P Global Ratings ("S&P") on Pembina is 'BBB'. S&P has also assigned a debt rating of 'BBB' to Pembina's senior unsecured medium-term notes, a debt rating of 'BB+' to the Series 1 Subordinated Notes, and a rating of 'P-3 (High)' to each issued series of Pembina's Class A Preferred Shares, other than the Series 2021-A Class A Preferred Shares.
Refer to "Description of the Capital Structure of Pembina - Credit Ratings" in the AIF for the year ended December 31, 2021, for further information.
28Pembina Pipeline CorporationSecond Quarter 2022

Contractual Obligations and Off-Balance Sheet Arrangements
Contractual Obligations
Pembina had the following contractual obligations outstanding as atJune 30, 2022:
Contractual Obligations(1)
Payments Due By Period
($ millions) Total Less than 1 year 1 - 3 years 3 - 5 years After 5 years
Leases(2)
920 102 174 143 501
Long-term debt(3)
17,103 1,983 2,151 1,888 11,081
Construction commitments(4)(5)
1,205 372 265 37 531
Other
538 81 121 75 261
Total contractual obligations
19,766 2,538 2,711 2,143 12,374
(1)
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 9 years and involve the purchase of NGL products from producers. Assuming product is available, Pembina has secured between 40 and 190 mbpd of NGL each year up to and including 2030. Power purchase agreements range from one to 24 years and involve the purchase of power from electrical service providers. Pembina has secured up to 78 megawatts per day each year up to and including 2046.
(2)
Includes terminals, rail, office space, land and vehicle leases.
(3)
Includes loans and borrowings, subordinated hybrid notes and interest payments on Pembina's senior unsecured medium-term notes and subordinated hybrid notes. Excludes deferred financing costs.
(4)
Excluding significant projects that are awaiting regulatory approval, projects which Pembina is not committed to construct, and projects that are executed by equity accounted investees.
(5)
Includes construction commitments related to assets held for sale of $264 million as at June 30, 2022; $6 million related to payments due in less than 1 year, $15 million 1-3 years, $12 million 3-5 years, and $231 million after 5 years.
Off-Balance Sheet Arrangements
As at June 30, 2022, Pembina does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on Pembina's financial condition, results of operations, liquidity or capital expenditures.
Letters of Credit
Pembina has provided letters of credit to various third parties in the normal course of conducting business. The letters of credit include guarantees to counterparties for product purchases and sales, transportation services, utilities, engineering and construction services. The letters of credit have not had and are not expected to have a material impact on Pembina's financial position, earnings, liquidity or capital resources. As at June 30, 2022, Pembina had $173 million (December 31, 2021: $135 million) in letters of credit issued.
Pembina Pipeline CorporationSecond Quarter 2022 29

5. SHARE CAPITAL
Common Shares
On March 8, 2022, the Toronto Stock Exchange ("TSX") accepted the renewal of Pembina's normal course issuer bid (the "NCIB") that allows the Company to repurchase, at its discretion, up to five percent of the Company's outstanding common shares (representing approximately 27.5 million common shares) through the facilities of the TSX, the New York Stock Exchange and/or alternative Canadian trading systems or as otherwise permitted by applicable securities law, subject to certain restrictions on the number of common shares that may be purchased on a single day. Common shares purchased by the Company under the NCIB will be cancelled. The NCIB commenced on March 10, 2022 and will terminate on March 9, 2023 or on such earlier date as the Company has purchased the maximum number of common shares permitted pursuant to the notice of intention under the NCIB or at such time Pembina determines to no longer make purchases thereunder.
The following table summarizes Pembina's share repurchases under its NCIB:
(millions, except as noted) June 30, 2022 December 31, 2021
Number of common shares repurchased for cancellation (thousands)
1,975 450
Average price per share $47.73 $37.77
Total cost(1)
94 17
(1) Total cost includes $56 million (2021: $13 million) charged to share capital and $38 million (2021: $4 million) charged to deficit.
Common Share Dividends
Common share dividends are payable if, as and when declared by Pembina's Board of Directors. The amount and frequency of dividends declared and payable is at the discretion of Pembina's Board of Directors, which considers earnings, cash flow, capital requirements, the financial condition of Pembina and other relevant factors when making its dividend determination.
Preferred Share Dividends
Other than in respect of the Series 2021-A Class A Preferred Shares, the holders of Pembina's Class A Preferred Shares are entitled to receive fixed cumulative dividends. Dividends on the Series 1, 3, 5, 7, 9 and 21 Class A Preferred Shares are payable quarterly on the first day of March, June, September and December, if, as and when declared by the Board of Directors of Pembina. Dividends on the Series 15, 17 and 19 Class A Preferred Shares are payable on the last day of March, June, September and December in each year, if, as and when declared by the Board of Directors of Pembina. Dividends on the Series 23 and 25 Class A Preferred Shares are payable on the 15th day of February, May, August and November in each year, if, as and when declared by the Board of Directors of Pembina.
Dividends are not payable on the Series 2021-A Class A Preferred Shares, nor shall any dividends accumulate or accrue, prior to delivery to the holders of the Series 1 Subordinated Notes following the occurrence of certain bankruptcy or insolvency events in respect of Pembina. Thereafter, dividends on the Series 2021-A Class A Preferred Shares are payable on the 25th day of January and July in each year, if, as and when declared by the Board of Directors.
30Pembina Pipeline CorporationSecond Quarter 2022

Outstanding Share Data
Issued and outstanding (thousands)(1)
July 29, 2022
Common shares 554,975
Stock options 12,668
Stock options exercisable 6,570
Series 1 Class A Preferred Shares 10,000
Series 3 Class A Preferred Shares 6,000
Series 5 Class A Preferred Shares 10,000
Series 7 Class A Preferred Shares 10,000
Series 9 Class A Preferred Shares 9,000
Series 15 Class A Preferred Shares 8,000
Series 17 Class A Preferred Shares 6,000
Series 19 Class A Preferred Shares 8,000
Series 21 Class A Preferred Shares 16,000
Series 23 Class A Preferred Shares 12,000
Series 25 Class A Preferred Shares 10,000
(1) Pembina issued 600,000 Series 2021-A Class A Preferred shares to the Computershare Trust Company of Canada, to be held in trust to satisfy its obligations under the indenture governing the Series 1 Subordinated Notes, in connection with the issuance of the Series 1 Subordinated Notes.
Pembina Pipeline CorporationSecond Quarter 2022 31

6. CAPITAL EXPENDITURES
3 Months Ended June 30 6 Months Ended June 30
($ millions) 2022 2021 2022 2021
Pipelines 75 95 189 178
Facilities 48 36 78 76
Marketing & New Ventures 17 10 46 12
Corporate and other projects 12 5 18 7
Total capital expenditures(1)(2)
152 146 331 273
(1) Includes $48 million for the three months ended June 30, 2022 (2021: $17 million) and $97 million for the six months ended June 30, 2022 (2021: $30 million) related to non-recoverable sustainment activities.
(2) Includes capital expenditures related to assets held for sale of $6 million for the three and six months ended June 30, 2022.
In both 2022 and 2021, Pipeline capital expenditures continued to be largely related to Pembina's Peace Pipeline system expansion projects. Pipeline capital expenditures in 2022 also included slope mitigation on the Syncrude and Horizon Pipeline systems. In 2022, Facilities capital expenditures were primarily related to continued expansion at the Empress Co-generation Facility. In 2021, Facilities capital expenditures were largely related to the expansion at Empress and the Prince Rupert Terminal. Marketing & New Ventures capital expenditures primarily related to the purchase of linefill for the Phase VII Peace Pipeline expansion in 2022 and development activities at Cedar LNG in 2021 and 2022. Corporate capital expenditures in 2021 and 2022 relate to IT infrastructure and systems development.
Contributions to Equity Accounted Investees
3 Months Ended June 30 6 Months Ended June 30
($ millions) 2022 2021 2022 2021
Aux Sable 1 - 2 1
Veresen Midstream - - 13 11
Cedar LNG 5 - 10 -
Total 6 - 25 12
In both 2022 and 2021, contributions made to Veresen Midstream were to fund general capital expenditures. In 2022, contributions made to Cedar LNG were to fund front-end engineering and design capital expenditures.

32Pembina Pipeline CorporationSecond Quarter 2022

7. SELECTED QUARTERLY INFORMATION
Selected Quarterly Operating Information
(mboe/d) 2022 2021 2020
Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3
Volumes(1)(2)
Pipelines
Conventional Pipelines
937 897 959 918 892 862 993 863
Transmission Pipelines 564 621 616 595 685 674 684 661
Oil Sands Pipelines 975 975 996 1,050 1,050 1,051 1,053 1,056
Facilities
Gas Services
664 675 677 660 662 677 673 657
NGL Services 204 201 189 188 211 218 211 214
Total 3,344 3,369 3,437 3,411 3,500 3,482 3,614 3,451
(1) Revenue volumes. See the "Abbreviations" section of this MD&A for definition.
(2) Includes Pembina's proportionate share of volumes from equity accounted investees.
Deferred Take-or-pay Revenue
($ millions) 2022 2021 2020
Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3
Pipelines
Opening balance
24 3 21 32 22 3 42 45
Revenue deferred
49 47 43 48 45 42 52 66
Revenue recognized
(46) (26) (61) (59) (35) (23) (91) (69)
Ending take-or-pay contract liability balance
27 24 3 21 32 22 3 42
Facilities
Opening balance
1 - - 3 1 - - 2
Revenue deferred
2 1 - - 2 1 - 1
Revenue recognized - - - (3) - - - (3)
Transfers to liabilities related to assets held for sale (Note 14)
(3) - - - - - - -
Ending take-or-pay contract liability balance
- 1 - - 3 1 - -
Pembina Pipeline CorporationSecond Quarter 2022 33

Quarterly Financial Information
($ millions, except where noted)
2022 2021
2020
Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3
Revenue 3,095 3,038 2,560 2,149 1,902 2,016 1,680 1,496
Net revenue(1)
1,020 1,154 1,084 961 894 999 954 849
Operating expenses 211 193 206 187 186 182 201 178
Realized loss (gain) on commodity-related derivative financial instruments 49 47 36 43 33 88 6 (7)
Share of profit (loss) from equity accounted investees 74 85 83 75 52 71 (244) 62
Gross profit 711 857 785 682 550 630 247 568
Earnings (loss) 418 481 80 588 254 320 (1,216) 323
Earnings (loss) per common share - basic (dollars)
0.70 0.81 0.08 1.01 0.39 0.51 (2.28) 0.52
Earnings (loss) per common share - diluted (dollars)
0.69 0.81 0.08 1.01 0.39 0.51 (2.28) 0.52
Cash flow from operating activities 604 655 697 913 584 456 766 434
Cash flow from operating activities per common share - basic (dollars)
1.09 1.19 1.27 1.66 1.06 0.83 1.39 0.78
Adjusted cash flow from operating activities(1)
683 700 734 786 538 582 603 524
Adjusted cash flow from operating activities per common share - basic (dollars)(1)
1.23 1.27 1.33 1.43 0.98 1.06 1.10 0.95
Common shares outstanding (millions):
Weighted average - basic 554 551 550 550 550 550 550 550
Weighted average - diluted 557 552 551 551 551 550 550 550
End of period 555 552 550 550 550 550 550 550
Common share dividends declared 349 347 346 347 347 346 346 346
Dividends per common share
0.63 0.63 0.63 0.63 0.63 0.63 0.63 0.63
Preferred share dividends declared 32 31 33 31 35 36 38 38
Capital expenditures(2)
152 179 176 209 146 127 161 174
Contributions to equity accounted investees 6 19 305 18 - 12 - 28
Distributions from equity accounted investees 145 155 128 106 112 115 109 111
Adjusted EBITDA(1)
849 1,005 970 850 778 835 866 796
(1) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.
(2) Includes capital expenditures related to assets held for sale of $6 million for the three and six months ended June 30, 2022.
During the periods in the table above, Pembina's financial and operating results were impacted by the following factors and trends:
•New large-scale growth projects across Pembina's business being placed into service;
•Volatility in commodity market prices impacting margins within the marketing business, partially mitigated through Pembina's risk management program;
•Volatility in the AECO-Chicago natural gas price differential, power pool prices, foreign exchange rates, and inflation impacting operating results;
•The COVID-19 pandemic and the resulting decrease in demand for commodities starting in the second quarter of 2020, which led to a significant decline in global energy prices and a reduction in capital spending budgets by Pembina and its customers in 2020, and the subsequent recovery in demand for commodities and global energy prices in 2021, which continued through the first six months of 2022 in connection with supply concerns associated with the current conflict between Ukraine and Russia;
•Higher net finance costs impacting earnings associated with debt related to financing growth projects, volatility in foreign exchange rates and volatility in Pembina's share price impacting incentive costs;
•Impairments recognized on Pembina's interests in Ruby, CKPC and the assets associated with Jordan Cove in the fourth quarter of 2020 and on certain assets in Pipelines as a result of contract expirations in the fourth quarter of 2021;
•Contract expiries on certain assets;
•The receipt and associated tax of the $350 million termination fee in connection with the termination of the arrangement agreement with Inter Pipeline Ltd. received in the third quarter of 2021;
•Higher contributions made to Alliance to redeem all of its issued and outstanding senior notes; and
•Higher number of common shares as a result of option exercises, partially offset by share repurchases.
34Pembina Pipeline CorporationSecond Quarter 2022

8. SELECTED EQUITY ACCOUNTED INVESTEE INFORMATION
Loans and Borrowings of Equity Accounted Investees
Under equity accounting, the assets and liabilities of an investment are reported as a single line item in the Consolidated Statement of Financial Position, "Investments in Equity Accounted Investees". To assist readers' understanding and to evaluate the capitalization of Pembina's investments, loans and borrowings associated with investments in equity accounted investees are presented below based on Pembina's proportionate ownership in such investments, as at June 30, 2022. The loans and borrowings are presented and classified by the division in which the results for the investment are reported. Please refer to the "Abbreviations" section for a summary of Pembina's investments in equity accounted investees and the division in which their results are reported.
($ millions)(1)
June 30, 2022 December 31, 2021
Pipelines(2)
649 642
Facilities 1,190 1,214
Marketing & New Ventures 2 1
Total 1,841 1,857
(1) Balances reflect Pembina's ownership percentage of the outstanding balance face value.
(2) Balance includes $306 million (2021: $300 million) of loans and borrowings associated with Ruby Pipeline, L.L.C.. On March 31, 2022, Ruby Pipeline, L.L.C. voluntarily filed for relief under Chapter 11 of the U.S. Bankruptcy Code. Refer to "Financing Activities for Equity Accounted Investees" section below for further details.
Financing Activities for Equity Accounted Investees
Ruby Pipeline, a wholly-owned subsidiary of Ruby, had U.S. $475 million principal amount of unsecured notes that matured on April 1, 2022 (the "2022 Notes"). Although Ruby Pipeline has sufficient liquidity to operate its business, it lacked sufficient liquidity to satisfy its obligations under the 2022 Notes on the maturity date of April 1, 2022. Accordingly, on March 31, 2022, Ruby Pipeline filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The risks and uncertainties surrounding the Chapter 11 proceedings raise substantial doubt as to Ruby Pipeline's ability to continue as a going concern.
Pembina does not have any financial commitments or obligations in respect of the debts or obligations of Ruby Pipeline, including in respect of the 2022 Notes, nor is Pembina contractually obligated to provide any further contributions or funding to Ruby.
Commitments to Equity Accounted Investees
Pembina has commitments to provide contributions to certain equity accounted investees based on annual budgets approved by the joint venture partners and contractual agreements.
Credit Risk for Equity Accounted Investees
At June 30, 2022, Pembina's various equity accounted investees held letters of credit totaling $69 million (December 31, 2021: $73 million) primarily in respect of customer trade receivables.
Pembina Pipeline CorporationSecond Quarter 2022 35

9. OTHER
Related Party Transactions
Pembina 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, unless otherwise noted. Pembina contracts capacity from its equity accounted investees, advances funds to support operations, provides letters of credit, including financial guarantees, and provides services, on a cost recovery basis, to investments in equity accounted investees.
For the three and six months ended June 30, 2022, Pembina had no other transactions with "related parties" (as defined in IAS 24 Related Party Disclosures) except those pertaining to contributions to Pembina's defined benefit pension plan and remuneration of key management personnel and the Board of Directors of Pembina, in the ordinary course of their employment or directorship agreements, respectively.
Risk Management
Pembina's risk management strategies, policies and limits, ensure risks and exposures are aligned to its business strategy and risk tolerance. Pembina's Board of Directors is responsible for providing risk management oversight at Pembina and oversees how management monitors compliance with Pembina's risk management policies and procedures and reviews the adequacy of this risk framework in relation to the risks faced by Pembina.
Pembina has exposure to counterparty credit risk, liquidity risk and market risk. Pembina utilizes derivative instruments to stabilize the results of its marketing business and, as at June 30, 2022, the Company has entered into certain financial derivative contracts in order to manage commodity price, foreign exchange and interest rate risk. These instruments are not used for trading or speculative purposes. For more information on Pembina's derivative instruments, refer to Note 12 to the Interim Financial Statements.
Pembina's Canadian dollar drawings on its Credit Facilities have variable rate components that reference the Canadian Dollar Offered Rate ("CDOR"). CDOR rates will cease to be published at the end of June 2024. CDOR is expected to be replaced by the Canadian Overnight Repo Rate Average ("CORRA"). Pembina will continue to monitor developments and the potential impact on the business.
Disclosure Controls and Procedures ("DC&P") and Internal Control over Financial Reporting ("ICFR")
Management's Report on Internal Control over Financial Reporting
Pembina's management is responsible for establishing and maintaining disclosure controls and procedures and internal control over financial reporting, as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings. The objective of this instrument is to improve the quality, reliability and transparency of information that is filed or submitted under Canadian securities legislation.
The President and Chief Executive Officer and interim Chief Financial Officer have designed, with the assistance of management, DC&P and ICFR to provide reasonable assurance that material information relating to Pembina's business is made known to them, is reported on a timely basis, that financial reporting is reliable and that financial statements prepared for external purposes are in accordance with IFRS.
Changes in Internal Control Over Financial Reporting
There were no changes in the second quarter of 2022 that had or are likely to have a material impact on Pembina's ICFR.
36Pembina Pipeline CorporationSecond Quarter 2022

10. ACCOUNTING POLICIES & ESTIMATES
Changes in Accounting Policies
The accounting policies used in preparing the Interim Financial Statements are described in Note 3 of Pembina's Consolidated Financial Statements. Except as noted below, there were no new accounting standards or amendments to existing standards adopted in the first six months of 2022 that have a material impact on Pembina's financial statements.
Assets Held for Sale
Non-current assets, or disposal groups comprising of assets and liabilities, are classified as held-for-sale if it is highly probable that they will be recovered primarily through sale rather than through continued use.
Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, or employee benefit assets, which continue to be measured in accordance with the Company's other accounting policies. Impairment losses on initial classification as held-for-sale and subsequent gains and losses on remeasurement are recognized to earnings.
Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortized or depreciated.
Critical Accounting Judgments & Estimates
Critical accounting judgments and estimates used in preparing the Interim Financial Statements are described in Note 2 of Pembina's Consolidated Financial Statements. The preparation of consolidated financial statements in conformity with IFRS requires management to make both judgments and estimates that could materially affect the amounts recognized in the financial statements. By their nature, judgments and estimates may change in light of new facts and circumstances in the internal and external environment. There have been no material changes to Pembina's critical accounting estimates and judgments during the three and six months ended June 30, 2022.
Restatement of Revenue and Cost of Goods Sold
During the third quarter of 2021 Pembina identified certain crude contracts that were recorded incorrectly within Marketing & New Ventures. Revenue and cost of goods sold associated with the contracts were recorded on a gross basis but should have been recorded on a net basis. The restatement reduced revenue and cost of goods sold for the three and six months ended June 30, 2021 by $52 million and $81 million, respectively, with no impact on earnings, cash flows or financial position.
Pembina Pipeline CorporationSecond Quarter 2022 37

11. RISK FACTORS
Management has identified the primary risk factors that could potentially have a material impact on the financial results and operations of Pembina. With the exception of the risks noted below, there have been no material changes to the risk factors presented in Pembina's MD&A and AIF for the year ended December 31, 2021. Pembina's MD&A and AIF are available at www.sedar.com, www.sec.gov and through Pembina's website at www.pembina.com.
Impacts of Geopolitical Events in Eastern Europe
While Pembina's operations, based solely in North America, have not been, and are unlikely to be, directly impacted, the current conflict between Ukraine and Russia and the international response has, and may continue to have, potential wide-ranging consequences for global market volatility and economic conditions, including energy and commodity prices, which may, in turn, increase inflationary pressures and interest rates. Certain countries, including Canada and the United States, have imposed strict financial and trade sanctions against Russia, which have, and may continue to have, far-reaching effects on the global economy and energy and commodity prices. The short-, medium- and long-term implications of the conflict in Ukraine are difficult to predict with any certainty at this time and there remains uncertainty relating to the potential impact of the conflict on Pembina, and it could have a material and adverse effect on our business, financial condition and results of operations. Depending on the extent, duration, and severity of the conflict, it may have the effect of heightening many of the other risks described in Pembina's AIF for the year ended December 31, 2021, including, without limitation, the risks relating to Pembina's exposure to commodity prices; the successful completion of Pembina's growth and expansion projects, including the expected return on investment thereof; supply chains and Pembina's ability to obtain required equipment, materials or labour; cybersecurity risks; inflationary pressures; and restricted access to capital and increased borrowing costs as a result of increased interest rates.
38Pembina Pipeline CorporationSecond Quarter 2022

12. NON-GAAP & OTHER FINANCIAL MEASURES
Throughout this MD&A, Pembina has disclosed certain financial measures that are not specified, defined or determined in accordance with GAAP and which are not disclosed in Pembina's financial statements. Non-GAAP financial measures either exclude an amount that is included in, or include an amount that is excluded from, the composition of the most directly comparable financial measure specified, defined and determined in accordance with GAAP. These non-GAAP financial measures and ratios, together with financial measures and ratios specified, defined and determined in accordance with GAAP, are used by management to evaluate the performance and cash flows of Pembina and its businesses and to provide additional useful information respecting Pembina's financial performance and cash flows to investors and analysts.
In this MD&A, Pembina has disclosed the following non-GAAP financial measures and non-GAAP ratios: net revenue, adjusted EBITDA from equity accounted investees, adjusted EBITDA, adjusted EBITDA per common share, adjusted cash flow from operating activities and adjusted cash flow from operating activities per common share.
Non-GAAP financial measures and ratios disclosed in this MD&A do not have any standardized meaning under IFRS and may not be comparable to similar financial measures disclosed by other issuers. The financial measures and ratios should not, therefore, be considered in isolation or as a substitute for, or superior to, measures and ratios of Pembina's financial performance, or cash flows specified, defined or determined in accordance with IFRS, including revenue, earnings before income tax, share of profit from equity accounted investees and cash flow from operating activities.
Except as otherwise described herein, these non-GAAP financial measures and non-GAAP ratios are calculated on a consistent basis from period to period. Specific reconciling items may only be relevant in certain periods.
Below is a description of each non-GAAP financial measure and non-GAAP ratio disclosed in this MD&A, together with, as applicable, disclosure of: the most directly comparable financial measure that is specified, defined and determined in accordance with GAAP to which each non-GAAP financial measure relates; a quantitative reconciliation of each non-GAAP financial measure to such directly comparable GAAP financial measure; the composition of each non-GAAP financial measure and non-GAAP ratio; an explanation of how each non-GAAP financial measure and non-GAAP ratio provides useful information to investors and the additional purposes, if any, for which management uses each non-GAAP financial measure and non-GAAP ratio; and an explanation of the reason for any change in the label or composition of each non-GAAP financial measure and non-GAAP ratio from what was previously disclosed.
Net Revenue
Net revenue is a non-GAAP financial measure which is defined as total revenue less cost of goods sold including product purchases. Management believes that net revenue provides investors with a single measure to indicate the margin on sales before non-product operating expenses that is comparable between periods. Management utilizes net revenue to compare consecutive results in Marketing & New Ventures and Facilities, to aggregate revenue generated by each of the Company's divisions and to set comparable objectives. The most directly comparable financial measure to net revenue that is specified, defined and determined in accordance with GAAP and disclosed in the Pembina's financial statements is revenue.
3 Months Ended June 30
Pipelines
Facilities
Marketing &
New Ventures
Corporate &
Inter-segment Eliminations
Total
($ millions)
2022 2021 2022 2021 2022
2021(1)
2022 2021 2022
2021(1)
Revenue 604 554 360 334 2,300 1,163 (169) (149) 3,095 1,902
Cost of goods sold, including product purchases
- - 2 2 2,157 1,098 (84) (92) 2,075 1,008
Net revenue 604 554 358 332 143 65 (85) (57) 1,020 894
(1) Comparative 2021 period has been restated. See "Accounting Policies & Estimates - Restatement of Revenue and Cost of Goods Sold" section of this MD&A and Note 15 to the Interim Financial Statements for further details.

Pembina Pipeline CorporationSecond Quarter 2022 39

6 Months Ended June 30
Pipelines
Facilities
Marketing &
New Ventures
Corporate &
Inter-segment Eliminations
Total
($ millions)
2022 2021 2022 2021 2022
2021(1)
2022 2021 2022
2021(1)
Revenue 1,177 1,107 717 673 4,571 2,434 (332) (296) 6,133 3,918
Cost of goods sold, including product purchases
- - 2 6 4,124 2,195 (167) (176) 3,959 2,025
Net revenue 1,177 1,107 715 667 447 239 (165) (120) 2,174 1,893
(1) Comparative 2021 period has been restated. See "Accounting Policies & Estimates - Restatement of Revenue and Cost of Goods Sold" section of this MD&A and Note 15 to the Interim Financial Statements for further details.
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("adjusted EBITDA") and adjusted EBITDA per Common Share
Adjusted EBITDA is a non-GAAP financial measure and is calculated as earnings before net finance costs, income taxes, depreciation and amortization (included in operations and general and administrative expense) and unrealized gains or losses on commodity-related derivative financial instruments. The exclusion of unrealized gains or losses on commodity-related derivative financial instruments eliminates the non-cash impact of such gains or losses.
Adjusted EBITDA also includes adjustments to earnings for losses (gains) on disposal of assets, transaction costs incurred in respect of acquisitions, dispositions and restructuring, impairment charges or reversals in respect of goodwill, intangible assets, investments in equity accounted investees and property, plant and equipment, certain non-cash provisions and other amounts not reflective of ongoing operations. In addition, Pembina's proportionate share of results from investments in equity accounted investees with a preferred interest is presented in adjusted EBITDA as a 50 percent common interest. These additional adjustments are made to exclude various non-cash and other items that are not reflective of ongoing operations.
Management believes that adjusted EBITDA provides useful information to investors as it is an important indicator of an issuer's ability to generate liquidity through cash flow from operating activities and equity accounted investees. Management also believes that adjusted EBITDA provides an indicator of operating income generated from capital expenditures, which includes operational finance income and gains from lessor lease arrangements. Adjusted EBITDA is also used by investors and analysts for assessing financial performance and for the purpose of valuing an issuer, including calculating financial and leverage ratios. Management utilizes adjusted EBITDA to set objectives and as a key performance indicator of the Company's success. Pembina presents adjusted EBITDA as management believes it is a measure frequently used by analysts, investors and other stakeholders in evaluating the Company's financial performance.
Adjusted EBITDA per common share is a non-GAAP financial ratio which is calculated by dividing adjusted EBITDA by the weighted average number of common shares outstanding.
3 Months Ended June 30
Pipelines
Facilities
Marketing &
New Ventures
Corporate &
Inter-segment Eliminations
Total
($ millions, except per share amounts)
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
Earnings before income tax
382 325 143 161 139 9 (149) (167) 515 328
Adjustments to share of profit from equity accounted investees and other 38 80 34 35 31 7 - - 103 122
Net finance costs (income)
8 2 11 12 7 (5) 98 86 124 95
Depreciation and amortization
96 108 80 56 11 12 11 12 198 188
Unrealized loss (gain) on commodity-related derivative financial instruments - - 9 (16) (74) 15 - - (65) (1)
Transaction costs incurred in respect of acquisitions - - - - - - (12) 17 (12) 17
Impairment charges - - - 22 - 1 - - - 23
Transformation and restructuring costs, contract dispute settlement, (gain) loss on disposal of assets and non-cash provisions (1) 7 - - (11) (1) (2) - (14) 6
Adjusted EBITDA 523 522 277 270 103 38 (54) (52) 849 778
Adjusted EBITDA per common share - basic (dollars)
1.53 1.41
40Pembina Pipeline CorporationSecond Quarter 2022

6 Months Ended June 30
Pipelines
Facilities
Marketing &
New Ventures
Corporate &
Inter-segment Eliminations
Total
($ millions, except per share amounts)
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
Earnings before income tax 743 658 389 348 360 76 (344) (331) 1,148 751
Adjustments to share of profit from equity accounted investees and other 91 156 68 66 37 13 - - 196 235
Net finance costs (income) 15 15 17 18 1 (9) 200 175 233 199
Depreciation and amortization 195 212 135 102 22 25 23 24 375 363
Unrealized (gain) loss on commodity-related derivative financial instruments - - (51) (17) (39) 21 - - (90) 4
Transaction costs incurred in respect of acquisitions - - - - - - - 18 - 18
Impairment charges - 10 - 22 - 3 - - - 35
Transformation and restructuring costs, contract dispute settlement, (gain) loss on disposal of assets and non-cash provisions - - - - (11) (1) 3 9 (8) 8
Adjusted EBITDA 1,044 1,051 558 539 370 128 (118) (105) 1,854 1,613
Adjusted EBITDA per common share - basic (dollars)
3.36 2.93
Adjusted EBITDA from Equity Accounted Investees
In accordance with IFRS, Pembina's jointly controlled investments are accounted for using equity accounting. Under equity accounting, the assets and liabilities of the investment are presented net in a single line item in the Consolidated Statement of Financial Position, "Investments in Equity Accounted Investees". Net earnings from investments in equity accounted investees are recognized in a single line item in the Consolidated Statement of Earnings and Comprehensive Income "Share of Profit from Equity Accounted Investees". The adjustments made to earnings, in adjusted EBITDA above, are also made to share of profit from investments in equity accounted investees. Cash contributions and distributions from investments in equity accounted investees represent Pembina's share paid and received in the period to and from the investments in equity accounted investees.
To assist in understanding and evaluating the performance of these investments, Pembina is supplementing the IFRS disclosure with non-GAAP proportionate consolidation of Pembina's interest in the investments in equity accounted investees. Pembina's proportionate interest in equity accounted investees has been included in adjusted EBITDA.
3 Months Ended June 30
Pipelines
Facilities
Marketing &
New Ventures
Total
($ millions)
2022 2021 2022 2021 2022 2021 2022 2021
Share of profit from equity accounted investees
48 27 20 18 6 7 74 52
Adjustments to share of profit from equity accounted investees:
Net finance costs (income)
3 16 11 7 (1) 1 13 24
Depreciation and amortization
35 51 23 28 6 6 64 85
Unrealized loss on commodity-related derivative financial instruments - - - - 26 - 26 -
Share of earnings in excess of equity interest(1)
- 13 - - - - - 13
Total adjustments to share of profit from equity accounted investees 38 80 34 35 31 7 103 122
Adjusted EBITDA from equity accounted investees 86 107 54 53 37 14 177 174
(1) Pembina's proportionate share of results from investments in equity accounted investees with a preferred interest is presented in adjusted EBITDA as a 50 percent common interest.
Pembina Pipeline CorporationSecond Quarter 2022 41

6 Months Ended June 30
Pipelines
Facilities
Marketing &
New Ventures
Total
($ millions)
2022 2021 2022 2021 2022 2021 2022 2021
Share of profit from equity accounted investees
88 74 44 36 27 13 159 123
Adjustments to share of profit from equity accounted investees:
Net finance costs (income)
14 33 19 15 (1) 1 32 49
Depreciation and amortization
75 105 49 51 12 12 136 168
Unrealized loss on commodity-related derivative financial instruments - - - - 26 - 26 -
Share of earnings in excess of equity interest(1)
2 18 - - - - 2 18
Total adjustments to share of profit from equity accounted investees 91 156 68 66 37 13 196 235
Adjusted EBITDA from equity accounted investees 179 230 112 102 64 26 355 358
(1) Pembina's proportionate share of results from investments in equity accounted investees with a preferred interest is presented in adjusted EBITDA as a 50 percent common interest.
Adjusted Cash Flow from Operating Activities and Adjusted Cash Flow from Operating Activities per Common Share
Adjusted cash flow from operating activities is a non-GAAP measure which is defined as cash flow from operating activities adjusting for the change in non-cash operating working capital, adjusting for current tax and share-based compensation payment, and deducting preferred share dividends paid. Adjusted cash flow from operating activities deducts preferred share dividends paid because they are not attributable to common shareholders. The calculation has been modified to include current tax and share-based compensation payment as it allows management to better assess the obligations discussed below. Management believes that adjusted cash flow from operating activities provides comparable information to investors for assessing financial performance during each reporting period. Management utilizes adjusted cash flow from operating activities to set objectives and as a key performance indicator of the Company's ability to meet interest obligations, dividend payments and other commitments. Adjusted cash flow from operating activities per common share is a non-GAAP financial ratio which is calculated by dividing adjusted cash flow from operating activities by the weighted average number of common shares outstanding.
3 Months Ended June 30 6 Months Ended June 30
($ millions, except per share amounts) 2022 2021 2022 2021
Cash flow from operating activities 604 584 1,259 1,040
Cash flow from operating activities per common share - basic (dollars)
1.09 1.06 2.28 1.89
Add (deduct):
Change in non-cash operating working capital 103 (2) 142 77
Current tax expense (54) (56) (175) (114)
Taxes paid, net of foreign exchange 86 69 238 197
Accrued share-based payment expense (24) (22) (63) (40)
Share-based compensation payment - - 45 32
Preferred share dividends paid (32) (35) (63) (72)
Adjusted cash flow from operating activities 683 538 1,383 1,120
Adjusted cash flow from operating activities per common share - basic (dollars)
1.23 0.98 2.50 2.04

42Pembina Pipeline CorporationSecond Quarter 2022

13. ABBREVIATIONS
The following is a list of abbreviations that may be used in this MD&A:
Other
AECO
Alberta Energy Company benchmark price for natural gas
B.C.
British Columbia
GAAP
Canadian generally accepted accounting principles
IFRS
International Financial Reporting Standards
NGL
Natural gas liquids
U.S.
United States
WCSB
Western Canadian Sedimentary Basin
Deep cut
Ethane-plus capacity extraction gas processing capabilities
Shallow cut
Sweet gas processing with propane and/or condensate-plus extraction capabilities
Volumes
Volumes for Pipelines and Facilities are revenue volumes, defined as physical volumes plus volumes recognized from take-or-pay commitments. Volumes for Marketing & New Ventures are marketed NGL volumes. Volumes are stated in mboe/d, with natural gas volumes converted to mboe/d from MMcf/d at a 6:1 ratio.
Measurement
Regulators & Acts
bpd
barrels per day
ABCA
Business Corporations Act (Alberta)
mbbls
thousands of barrels
AER
Alberta Energy Regulator
mbpd
thousands of barrels per day
BCEAO
British Columbia Environmental Assessment Office
mmbpd
millions of barrels per day
BCOGC
British Columbia Oil and Gas Commission
mmbbls
millions of barrels
BCUC
British Columbia Utilities Commission
mboe/d
thousands of barrels of oil equivalent per day
CER
Canadian Energy Regulator
mmboe/d
millions of barrels of oil equivalent per day
FERC
United States Federal Energy Regulatory Commission
MMcf/d
millions of cubic feet per day
ICA
Interstate Commerce Act of 1887 (United States)
bcf/d
billions of cubic feet per day
NEB
National Energy Board
km
kilometer
NGA
Natural Gas Act of 1938 (United States)
PHMSA
Pipeline and Hazardous Material Safety Administration
IAAC Impact Assessment Agency of Canada
Investments in Equity Accounted Investees
Pipelines:
Alliance
50 percent interest in both Alliance Pipeline Limited Partnership and Alliance Pipeline L.P.
Ruby
50 percent convertible, cumulative preferred interest in Ruby Pipeline Holding Company L.L.C.
Grand Valley
75 percent jointly controlled interest in Grand Valley 1 Limited Partnership wind farm ("Grand Valley")
Facilities:
Veresen Midstream
45 percent interest in Veresen Midstream Limited Partnership, which owns assets in western Canada serving the Montney geological play in northwestern Alberta and northeastern B.C. including gas processing plants and gas gathering pipelines and compression
Fort Corp
50 percent interest in Fort Saskatchewan Ethylene Storage Limited Partnership and Fort Saskatchewan Ethylene Corporation
Marketing & New Ventures:
Aux Sable
An ownership interest in Aux Sable (approximately 42.7 percent in Aux Sable U.S. and 50 percent in Aux Sable Canada), which includes an NGL fractionation facility and gas processing capacity near Chicago, Illinois and other natural gas and NGL processing facilities, logistics and distribution assets in the U.S. and Canada, as well as transportation contracts on Alliance
CKPC 50 percent interest in the PDH/PP Facility
Cedar LNG
49.9 percent interest in the proposed floating LNG facility in Kitimat, British Columbia, Canada
Readers are referred to the AIF dated February 24, 2022 on www.sedar.com for additional descriptions.
Pembina Pipeline CorporationSecond Quarter 2022 43

14. FORWARD-LOOKING STATEMENTS & INFORMATION
In the interest of providing Pembina's security holders and potential investors with information regarding Pembina, including management's assessment of the Company's future plans and operations, certain statements contained in this MD&A constitute forward-looking statements or forward-looking information (collectively, "forward-looking statements"). Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "could", "would", "believe", "plan", "intend", "design", "target", "undertake", "view", "indicate", "maintain", "explore", "entail", "schedule", "objective", "strategy", "likely", "potential", "outlook", "aim", "purpose", "goal" and similar expressions suggesting future events or future performance.
By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Pembina believes the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this MD&A should not be unduly relied upon. These forward-looking statements speak only as of the date of the MD&A.
In particular, this MD&A contains forward-looking statements pertaining to the following:
•future levels and sustainability of cash dividends that Pembina intends to pay to its shareholders and the dividend payment dates;
•Pembina's intention to increase its common share dividend upon closing of the joint venture transaction with KKR, including the amount and timing thereof;
•planning, construction, locations, capital expenditure estimates, schedules, regulatory and environmental applications and anticipated approvals, expected capacity, incremental volumes, completion and in-service dates, rights, sources of product, activities, benefits and operations with respect to new construction of, or expansions on existing, pipelines, systems, gas services facilities, processing and fractionation facilities, terminalling, storage and hub facilities and other facilities or energy infrastructure, as well as the impact of Pembina's new projects on its future financial performance;
•future pipeline, processing, fractionation and storage facility and system operations and throughput levels;
•Pembina's commitment to, and the effectiveness and impact of, its risk management policies;
•expected reductions in carbon dioxide levels;
•treatment under existing and proposed governmental regulatory regimes, including taxes, competition, environmental, project assessment and GHG laws and regulations
•Pembina's strategy and the development and expected timing of new business; initiatives and growth opportunities and the impact thereof;
•increased throughput potential, processing capacity and fractionation capacity due to increased oil and gas industry activity and new connections and other initiatives on Pembina's pipelines and at Pembina's facilities;
•expected future cash flows and the sufficiency thereof, financial strength, sources of and access to funds at acceptable rates, future contractual obligations, future financing options, availability of capital for capital expenditures, operating obligations, dividends, debt maturities and the use of proceeds from financings;
•Pembina's capital structure, including the sufficiency of the amount of leverage employed therein and future actions that may be taken with respect thereto, including expectations regarding the repurchase or redemption of common shares, repayments of existing debt, new borrowings, equity or hybrid securities issuances and the timing thereof;
•Pembina's expectations regarding the creditworthiness of its counterparties;
•tolls and tariffs and processing, transportation, fractionation, storage and services commitments and contracts;
•the outcomes and effectiveness of Pembina's DC&P;
•operating risks, including the amount of future liabilities related to pipelines spills and other environmental incidents;
•the expected demand for, and prices and inventory levels of, crude oil and other petroleum products, including NGL;
•the anticipated closing of the joint venture with KKR and the timing thereof, including the receipt of regulatory approvals and satisfaction of closing conditions, the resultant business and assets of Newco and the cash flow accretion created by the joint venture;
•the development and anticipated benefits of Pembina's new projects and developments, including the Cedar LNG Project and the Alberta Carbon Grid; and
•the impact of current market conditions on Pembina.

Various factors or assumptions are typically applied by Pembina in drawing conclusions or making the forecasts, projections, predictions or estimations set out in forward-looking statements based on information currently available to Pembina. These factors and assumptions include, but are not limited to:
•oil and gas industry exploration and development activity levels and the geographic region of such activity;
•the success of Pembina's operations;
•prevailing commodity prices, interest rates, carbon prices, tax rates and exchange rates;
•the ability of Pembina to maintain current credit ratings;
•the availability of capital to fund future capital requirements relating to existing assets and projects;
•expectations regarding Pembina's pension plan;
•future operating costs including geotechnical and integrity costs being consistent with historical costs;
•oil and gas industry compensation levels remaining consistent;
•in respect of current developments, expansions, planned capital expenditures, completion dates and capacity expectations: that third parties will provide any necessary support; that any third-party projects relating to growth projects will be sanctioned and completed as expected; that any required commercial agreements can be reached; that all required regulatory and environmental approvals can be obtained on the necessary terms in a timely manner; that counterparties will comply with contracts in a timely manner; that there are no unforeseen events preventing the performance of contracts or the completion of the relevant facilities, and that there are no unforeseen material costs relating to the facilities which are not recoverable from customers;
•in respect of the stability of Pembina's dividends: prevailing commodity prices, margins and exchange rates; that Pembina's future results of operations will be consistent with past performance and management expectations in relation thereto; the continued availability of capital at acceptable prices to fund future capital requirements relating to existing assets and projects, including but not limited to future capital expenditures relating to expansion, upgrades and maintenance shutdowns; the success of growth projects and new developments; future operating costs; that counterparties to agreements will continue to perform their obligations in a timely manner; that there are no unforeseen events preventing the performance of contracts; and that there are no unforeseen material construction or other costs related to current growth projects or current operations;
•prevailing regulatory regimes, including with respect to taxes, competition, environmental, project assessment and GHG laws and regulations and tax pool utilization; and
•the amount of future liabilities relating to lawsuits and environmental incidents and the availability of coverage under Pembina's insurance policies (including in respect of Pembina's business interruption insurance policy).
The actual results of Pembina could differ materially from those anticipated in these forward-looking statements as a result of the material risk factors set forth below:
•the regulatory environment and decisions and Indigenous and landowner consultation requirements;
•the impact of competitive entities and pricing;
•labour and material shortages;
•reliance on third parties to successfully operate and maintain certain assets;
•reliance on key relationships, joint venture partners, and agreements and the outcome of stakeholder engagement;
•the strength and operations of the oil and natural gas production industry and related commodity prices;
•non-performance or default by counterparties to agreements which Pembina or one or more of its subsidiaries has entered into in respect of its business;
•actions by joint venture partners or other partners which hold interests in certain of Pembina's assets;
•adverse actions by governmental or regulatory authorities including changes in tax laws and treatment, changes in project assessment regulations, royalty rates, climate change initiatives or policies or increased environmental regulation;
•fluctuations in operating results;
•adverse changes in general economic and market conditions in Canada, North America and Internationally, including changes, or prolonged weakness, as applicable, in interest rates, foreign currency exchange rates, commodity prices, supply/demand trends and overall industry activity levels;
•risks related to the current and potential adverse impacts of geopolitical events in Eastern Europe;
•risks related to the current and potential adverse impacts of the COVID-19 pandemic;
•constraints on, or the unavailability of adequate infrastructure;
•the political environment, in Canada, North America and Internationally, and public opinion;
•ability to access various sources of debt and equity capital, and on acceptable terms;
•adverse changes in credit ratings;
•technology and security risks;
•natural catastrophes; and
•the other factors discussed under "Risk Factors" herein and in Pembina's MD&A and AIF for the year ended December 31, 2021, which are available at www.sedar.com, www.sec.gov and through Pembina's website at www.pembina.com.
These factors should not be construed as exhaustive. Unless required by law, Pembina does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Any forward-looking statements contained herein are expressly qualified by this cautionary statement.
44Pembina Pipeline CorporationSecond Quarter 2022

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(unaudited)
($ millions)
June 30, 2022 December 31, 2021
Assets
Current assets
Cash and cash equivalents 71 43
Trade receivables and other 990 812
Inventory 285 376
Derivative financial instruments (Note 12)
55 14
Assets held for sale (Note 14)
3,112 -
4,513 1,245
Non-current assets
Property, plant and equipment (Note 3)
15,530 18,193
Intangible assets and goodwill 6,025 6,238
Investments in equity accounted investees (Note 4)
4,538 4,622
Right-of-use assets 521 581
Finance lease receivable
222 211
Deferred tax assets 239 257
Derivative financial instruments and other assets (Note 12)
96 109
27,171 30,211
Total assets 31,684 31,456
Liabilities and equity
Current liabilities
Trade payables and other 1,045 1,063
Loans and borrowings (Note 5)
1,475 1,000
Dividends payable 117 115
Lease liabilities 79 88
Contract liabilities (Note 8)
94 71
Derivative financial instruments (Note 12)
94 53
Liabilities related to assets held for sale (Note 14)
624 -
3,528 2,390
Non-current liabilities
Loans and borrowings (Note 5)
9,071 9,645
Subordinated hybrid notes (Note 5)
595 594
Lease liabilities 600 635
Decommissioning provision (Note 6)
233 412
Contract liabilities (Note 8)
132 220
Deferred tax liabilities 2,578 3,011
Other liabilities 158 186
13,367 14,703
Total liabilities 16,895 17,093
Equity
Attributable to shareholders 14,729 14,303
Attributable to non-controlling interest 60 60
Total equity 14,789 14,363
Total liabilities and equity 31,684 31,456
Subsequent events (note 5 and 14)
See accompanying notes to the condensed consolidated interim financial statements
Pembina Pipeline CorporationSecond Quarter 2022 45

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME
(unaudited)
3 Months Ended June 30 6 Months Ended June 30
($ millions, except per share amounts) 2022
2021
(Restated Note 15)
2022
2021
(Restated Note 15)
Revenue (Note 8)
3,095 1,902 6,133 3,918
Cost of sales (Note 10)
2,474 1,372 4,718 2,736
(Gain) Loss on commodity-related derivative financial instruments (Note 12)
(16) 32 6 125
Share of profit from equity accounted investees (Note 4)
74 52 159 123
Gross profit 711 550 1,568 1,180
General and administrative 90 79 197 166
Other (income) expense (18) 25 (10) 29
Impairment expense - 23 - 35
Results from operating activities 639 423 1,381 950
Net finance costs (Note 9)
124 95 233 199
Earnings before income tax 515 328 1,148 751
Current tax expense 54 56 175 114
Deferred tax expense 43 18 74 63
Income tax expense 97 74 249 177
Earnings 418 254 899 574
Other comprehensive income (loss), net of tax (Note 11 & 12)
Exchange gain (loss) on translation of foreign operations 116 (59) 70 (122)
Impact of hedging activities (8) 3 8 11
Total comprehensive income attributable to shareholders 526 198 977 463
Earnings attributable to common shareholders, net of preferred share dividends
385 218 832 499
Earnings per common share - basic (dollars)
0.70 0.39 1.51 0.91
Earnings per common share - diluted (dollars)
0.69 0.39 1.50 0.91
Weighted average number of common shares (millions)
Basic 554 550 552 550
Diluted 557 551 555 551
See accompanying notes to the condensed consolidated interim financial statements
46Pembina Pipeline CorporationSecond Quarter 2022

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY
(unaudited)
Attributable to Shareholders of the Company Total Equity
($ millions)
Common Share Capital Preferred Share Capital Deficit
AOCI(1)
Total Non-Controlling Interest
December 31, 2021 15,678 2,517 (3,920) 28 14,303 60 14,363
Total comprehensive income
Earnings
- - 899 - 899 - 899
Other comprehensive income (Note 11)
- - - 78 78 - 78
Total comprehensive income
- - 899 78 977 - 977
Transactions with shareholders of the Company (Note 7)
Part VI.1 tax on preferred shares
- (5) - - (5) - (5)
Repurchase of common shares (56) - (38) - (94) - (94)
Share-based payment transactions
307 - - - 307 - 307
Dividends declared - common
- - (696) - (696) - (696)
Dividends declared - preferred
- - (63) - (63) - (63)
Total transactions with shareholders of the Company 251 (5) (797) - (551) - (551)
June 30, 2022 15,929 2,512 (3,818) 106 14,729 60 14,789
December 31, 2020 15,644 2,946 (3,637) 2 14,955 60 15,015
Total comprehensive income (loss)
Earnings
- - 574 - 574 - 574
Other comprehensive loss (Note 11)
- - - (111) (111) - (111)
Total comprehensive income (loss) - - 574 (111) 463 - 463
Transactions with shareholders of the Company (Note 7)
Part VI.1 tax on preferred shares
- (4) - - (4) - (4)
Preferred shares redemption
- (420) - - (420) - (420)
Share-based payment transactions
17 - - - 17 - 17
Dividends declared - common
- - (693) - (693) - (693)
Dividends declared - preferred
- - (71) - (71) - (71)
Total transactions with shareholders of the Company 17 (424) (764) - (1,171) - (1,171)
June 30, 2021 15,661 2,522 (3,827) (109) 14,247 60 14,307
(1) Accumulated Other Comprehensive Income (loss) ("AOCI").
See accompanying notes to the condensed consolidated interim financial statements
Pembina Pipeline CorporationSecond Quarter 2022 47

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(unaudited)
3 Months Ended June 30 6 Months Ended June 30
($ millions) 2022 2021 2022 2021
Cash provided by (used in)
Operating activities
Earnings 418 254 899 574
Adjustments for:
Share of profit from equity accounted investees (74) (52) (159) (123)
Distributions from equity accounted investees 145 112 300 227
Depreciation and amortization 198 188 375 363
Impairment expense - 23 - 35
Unrealized (gain) loss on commodity-related derivative financial instruments (65) (1) (90) 4
Net finance costs (Note 9)
124 95 233 199
Net interest paid (100) (88) (219) (197)
Income tax expense 97 74 249 177
Taxes paid (86) (69) (238) (196)
Share-based compensation expense 25 29 72 57
Share-based compensation payment - - (45) (32)
Net change in contract liabilities 34 14 40 19
Other (9) 3 (16) 10
Change in non-cash operating working capital
(103) 2 (142) (77)
Cash flow from operating activities
604 584 1,259 1,040
Financing activities
Net increase in bank borrowings 105 289 21 186
Proceeds from issuance of long-term debt, net of issue costs - - - 593
Repayment of long-term debt (75) - (125) (250)
Repayment of lease liability (22) (17) (45) (41)
Exercise of stock options 205 2 302 3
Repurchase of common shares (66) - (94) -
Redemption of preferred shares - (250) - (420)
Common share dividends paid (349) (347) (696) (693)
Preferred share dividends paid (32) (35) (63) (72)
Cash flow used in financing activities (234) (358) (700) (694)
Investing activities
Capital expenditures (152) (146) (331) (273)
Contributions to equity accounted investees (6) - (25) (12)
Acquisitions - (37) - (37)
Receipt of finance lease payments 3 3 6 6
Interest paid during construction (7) (5) (15) (14)
Recovery of assets or proceeds from sale of assets 25 12 25 12
Advances to related parties - - - (10)
Changes in non-cash investing working capital and other (47) (46) (48) (48)
Cash flow used in investing activities (184) (219) (388) (376)
Change in cash and cash equivalents 186 7 171 (30)
Cash transferred to assets held for sale (Note 14)
(147) - (147) -
Effect of movement in exchange rates on cash held 4 5 4 6
Cash and cash equivalents, beginning of period 28 45 43 81
Cash and cash equivalents, end of period 71 57 71 57
See accompanying notes to the condensed consolidated interim financial statements

48Pembina Pipeline CorporationSecond Quarter 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. REPORTING ENTITY
Pembina Pipeline Corporation ("Pembina" or the "Company") is a Calgary-based, leading energy transportation and midstream service provider that has served North America's energy industry for more than 65 years. These condensed consolidated unaudited interim financial statements ("Interim 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 three and six months ended June 30, 2022.
Pembina owns an integrated network of hydrocarbon liquids and natural gas pipelines, gas gathering and processing facilities, oil and natural gas liquids infrastructure and logistics services, and a growing export terminals 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.
These Interim Financial Statements and the notes hereto have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, as issued by the International Accounting Standards Board. The accounting policies applied are in accordance with International Financial Reporting Standards ("IFRS"), are consistent with the audited annual consolidated financial statements of the Company as at and for the year ended December 31, 2021 ("Consolidated Financial Statements"), except as noted below, and should be read in conjunction with those Consolidated Financial Statements. The Interim Financial Statements were authorized for issue by Pembina's Board of Directors on August 4, 2022.
Assets Held for Sale
Non-current assets, or disposal groups comprising of assets and liabilities, are classified as held-for-sale if it is highly probable that they will be recovered primarily through sale rather than through continued use.
Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, or employee benefit assets, which continue to be measured in accordance with the Company's other accounting policies. Impairment losses on initial classification as held-for-sale and subsequent gains and losses on remeasurement are recognized to earnings.
Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortized or depreciated.
Use of Estimates and Judgments
Management is required to make estimates and assumptions and use judgment in the application of accounting policies that could have a significant impact on the amounts recognized in the Interim Financial Statements. Actual results may differ from estimates and those differences may be material. By their nature, judgments and estimates may change in light of new facts and circumstances in the internal and external environment. There have been no material changes to Pembina's critical accounting estimates and judgments during the three and six months ended June 30, 2022.
Pembina Pipeline CorporationSecond Quarter 2022 49

2. 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 methods set out in the Consolidated Financial Statements. These methods have been applied consistently to all periods presented in these Interim Financial Statements.
Impacts of Geopolitical Events in Eastern Europe and the Ongoing COVID-19 Pandemic
Measuring fair values using significant unobservable inputs has become more challenging in the current environment, where the geopolitical events in Eastern Europe and continuing events and conditions related to the COVID-19 pandemic are driving significant volatility in commodity prices and currencies, disruption of business operations and a significant increase in economic uncertainty and inflation. Management applied its judgment in determining the impact of the significant uncertainties created by these events and conditions on the assessed fair values of assets and liabilities in the Interim Financial Statements.
3. 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, 2021 456 9,279 9,384 2,084 915 22,118
Additions and transfers 20 605 116 47 (466) 322
Change in decommissioning provision - (20) (100) (25) - (145)
Disposals and other - (55) (79) (9) - (143)
Foreign exchange 1 15 7 - - 23
Transfers to assets held for sale (Note 14)
(2) (475) (2,442) (104) (20) (3,043)
Balance at June 30, 2022 475 9,349 6,886 1,993 429 19,132
Depreciation
Balance at December 31, 2021 26 2,015 1,421 463 - 3,925
Depreciation 3 96 125 40 - 264
Disposals and other - (41) (36) (3) - (80)
Transfers to assets held for sale (Note 14)
- (85) (384) (38) - (507)
Balance at June 30, 2022 29 1,985 1,126 462 - 3,602
Carrying amounts
Balance at December 31, 2021 430 7,264 7,963 1,621 915 18,193
Balance at June 30, 2022 446 7,364 5,760 1,531 429 15,530
50Pembina Pipeline CorporationSecond Quarter 2022

4. INVESTMENTS IN EQUITY ACCOUNTED INVESTEES
Ownership Interest(percent)
Share of Profit from Equity Accounted Investees Investments in Equity Accounted Investees
6 Months Ended June 30
($ millions) June 30, 2022 December 31, 2021 2022 2021 June 30, 2022 December 31, 2021
Alliance
50 50 85 59 2,623 2,686
Aux Sable
42.7 - 50 42.7 - 50 32 13 354 377
Ruby(1)
- - - 13 - -
Veresen Midstream
45 45 39 35 1,335 1,349
Cedar LNG 49.9 49.9 - - 139 130
Other(2)
50 - 75 50 - 75 3 3 87 80
159 123 4,538 4,622
(1) Pembina owns a 50 percent convertible preferred interest in Ruby.
(2) Other includes Pembina's interest in CKPC, Grand Valley and Fort Corp.
At June 30, 2022, Pembina had U.S. $1.3 billion in investments in equity accounted investees held by entities whose functional currency is the U.S. dollar. The resulting foreign exchange gains and losses are included in other comprehensive income. For the three and six months ended June 30, 2022, Pembina recognized a gain of $48 million and a gain of $29 million (2021: $23 million loss and $43 million loss), respectively.
Financing Activities for Equity Accounted Investees
Ruby Pipeline, L.L.C. ("Ruby Pipeline"), a wholly-owned subsidiary of Ruby, had U.S. $475 million principal amount of unsecured notes that matured on April 1, 2022 (the "2022 Notes"). Although Ruby Pipeline has sufficient liquidity to operate its business, it lacked sufficient liquidity to satisfy its obligations under the 2022 Notes on the maturity date of April 1, 2022. Accordingly, on March 31, 2022, Ruby Pipeline filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The risks and uncertainties surrounding the Chapter 11 proceedings raise substantial doubt as to Ruby Pipeline's ability to continue as a going concern.
Pembina does not have any financial commitments or obligations in respect of the debts or obligations of Ruby Pipeline, including in respect of the 2022 Notes, nor is Pembina contractually obligated to provide any further contributions or funding to Ruby.
Pembina Pipeline CorporationSecond Quarter 2022 51

5. LONG-TERM DEBT
This note provides information about the contractual terms of Pembina's interest-bearing long-term debt, which are measured at amortized cost.
Carrying Value, Terms and Conditions, and Debt Maturity Schedule
Carrying Value
($ millions)
Authorized at June 30, 2022 Nominal Interest Rate Year of Maturity June 30, 2022 December 31, 2021
Loans and borrowings
Senior unsecured credit facilities(1)(3)(4)
3,267
2.87(2)
Various(1)
859 907
Senior unsecured medium-term notes series 2 450 3.77 2022 450 450
Senior unsecured medium-term notes series 3 450 4.75 2043 447 447
Senior unsecured medium-term notes series 4 600 4.81 2044 597 597
Senior unsecured medium-term notes series 5 450 3.54 2025 449 449
Senior unsecured medium-term notes series 6 500 4.24 2027 499 499
Senior unsecured medium-term notes series 7 600 3.71 2026 602 602
Senior unsecured medium-term notes series 8 650 2.99 2024 649 648
Senior unsecured medium-term notes series 9 550 4.74 2047 542 542
Senior unsecured medium-term notes series 10 650 4.02 2028 659 660
Senior unsecured medium-term notes series 11 800 4.75 2048 840 841
Senior unsecured medium-term notes series 12 650 3.62 2029 653 654
Senior unsecured medium-term notes series 13 700 4.54 2049 712 712
Senior unsecured medium-term notes series 14 600 2.56 2023 600 599
Senior unsecured medium-term notes series 15 600 3.31 2030 597 597
Senior unsecured medium-term notes series 16 400 4.67 2050 397 397
Senior unsecured medium-term notes series 17 500 3.53 2031 497 497
Senior unsecured medium-term notes series 18 500 4.49 2051 497 497
Senior unsecured medium-term notes series 3A - 5.05 2022 - 50
Total loans and borrowings 10,546 10,645
Less current portion loans and borrowings (1,475) (1,000)
Total non-current loans and borrowings 9,071 9,645
Subordinated hybrid notes
Subordinated notes, series 1 600 4.80 2081 595 594
(1) Pembina's unsecured credit facilities include a $2.5 billion revolving facility that matures in June 2026, a $425 million non-revolving term loan that matures in August 2022, a U.S. $250 million non-revolving term loan that matures in May 2025 and a $20 million operating facility that matures in May 2023, which is typically renewed on an annual basis.
(2) The nominal interest rate is the weighted average of all drawn credit facilities based on Pembina's credit rating at June 30, 2022. Borrowings under the credit facilities bear interest at prime, Bankers' Acceptance, or LIBOR rates, plus applicable margins.
(3) Includes U.S. $250 million variable rate debt outstanding at June 30, 2022 (December 31, 2021: U.S. $250 million).
(4) The U.S. dollar denominated non-revolving term loan is designated as a hedge of the Company's net investment in selected foreign operations with a U.S. dollar functional currency. Refer to Note 12 for foreign exchange risk management.
On March 14, 2022, Pembina's $50 million senior unsecured medium term notes, series 3A, matured and were fully repaid.
On June 24, 2022, Pembina repaid $75 million on its non-revolving term loan. As at June 30, 2022 the non-revolving term loan has an outstanding balance of $425 million.

52Pembina Pipeline CorporationSecond Quarter 2022

Following the second quarter of 2022, on July 27, 2022, Pembina's $2.5 billion unsecured revolving credit facility (the "Revolving Facility") was replaced with two credit facilities: an unsecured $1.0 billion sustainability linked revolving credit facility (the "SLL Credit Facility") and an amendment and restatement of the Revolving Facility into an unsecured $1.5 billion revolving credit facility, which includes a $750 million accordion feature and matures in June 2027 (the "New Revolving Facility"). The SLL Credit Facility contains pricing adjustments that reduce or increase borrowing costs based on Pembina's performance relative to a greenhouse gas ("GHG") emissions intensity reduction performance target. Previously, Pembina announced its commitment to reduce its GHG emissions intensity by 30 percent by 2030, relative to baseline 2019 levels. The specific terms of the SLL Credit Facility include annual intermediate targets that align with Pembina's trajectory towards its 2030 goal. The SLL Credit Facility has a term of four years, maturing June 1, 2026.
With the exception of the sustainability linked adjustments to borrowing costs, the terms and conditions of the SLL Credit Facility and the New Revolving Facility, including financial covenants, are substantially similar to each other and are substantially similar to the Revolving Facility.
6. DECOMMISSIONING PROVISION
($ millions) 2022
Balance at January 1 412
Unwinding of discount rate 8
Change in rates (185)
Transfers to liabilities related to assets held for sale (Note 14)
(20)
Change in cost estimates and other 18
Balance at June 30 233
Pembina's decommissioning provision decreased by $179 million for the six months ended June 30, 2022 primarily due to an increase in the credit-adjusted risk free rates of 5.8 percent to 6.8 percent (December 31, 2021: 3.3 percent to 4.7 percent) and a change to inflation of 2.0 percent (December 31, 2021: 1.8 percent).
Pembina Pipeline CorporationSecond Quarter 2022 53

7. SHARE CAPITAL
Common Share Capital
($ millions, except as noted)
Number of
Common Shares
(millions)
Common
Share Capital
Balance at December 31, 2021 550 15,678
Share-based payment transactions 7 307
Repurchased (2) (56)
Balance at June 30, 2022 555 15,929
Share Repurchase Program
On March 8, 2022, the Toronto Stock Exchange ("TSX") accepted the renewal of Pembina's normal course issuer bid (the "NCIB") that allows the Company to repurchase, at its discretion, up to five percent of the Company's outstanding common shares (representing approximately 27.5 million common shares) through the facilities of the TSX, the New York Stock Exchange and/or alternative Canadian trading systems or as otherwise permitted by applicable securities law, subject to certain restrictions on the number of common shares that may be purchased on a single day. Common shares purchased by the Company under the NCIB will be cancelled. The NCIB commenced on March 10, 2022 and will terminate on March 9, 2023 or on such earlier date as the Company has purchased the maximum number of common shares permitted pursuant to the notice of intention under the NCIB or at such time Pembina determines to no longer make purchases thereunder.
The following table summarizes Pembina's share repurchases under its NCIB:
(millions, except as noted) June 30, 2022 December 31, 2021
Number of common shares repurchased for cancellation (thousands)
1,975 450
Average price per share $47.73 $37.77
Total cost(1)
94 17
(1) Total cost includes $56 million (2021: $13 million) charged to share capital and $38 million (2021: $4 million) charged to deficit.
Preferred Share Capital
($ millions, except as noted)
Number of Preferred Shares
(millions)
Preferred
Share Capital
Balance at December 31, 2021 105 2,517
Part VI.1 tax - (5)
Balance at June 30, 2022 105 2,512
54Pembina Pipeline CorporationSecond Quarter 2022

Dividends
The following dividends were declared by Pembina:
6 Months Ended June 30
($ millions) 2022 2021
Common shares
$1.26 per common share (2021: $1.26)
696 693
Class A preferred shares
$0.61 per Series 1 Class A Preferred Share (2021: $0.61)
6 6
$0.56 per Series 3 Class A Preferred Share (2021: $0.56)
3 3
$0.57 per Series 5 Class A Preferred Share (2021: $0.57)
6 6
$0.54 per Series 7 Class A Preferred Share (2021: $0.54)
5 5
$0.53 per Series 9 Class A Preferred Share (2021: $0.53)
5 5
nil per Series 11 Class A Preferred Share (2021: $0.24)
- 2
nil per Series 13 Class A Preferred Share (2021: $0.59)
- 6
$0.56 per Series 15 Class A Preferred Share (2021: $0.56)
4 4
$0.60 per Series 17 Class A Preferred Share (2021: $0.60)
4 4
$0.59 per Series 19 Class A Preferred Share (2021: $0.59)
5 5
$0.61 per Series 21 Class A Preferred Share (2021: $0.61)
10 10
$0.66 per Series 23 Class A Preferred Share (2021: $0.66)
8 8
$0.65 per Series 25 Class A Preferred Share (2021: $0.65)
7 7
63 71
On July 6, 2022, Pembina announced that its Board of Directors had declared a dividend of $0.21 per common share in the total amount of $117 million, payable on August 15, 2022 to shareholders of record on July 25, 2022.
Pembina's Board of Directors also declared quarterly dividends for Pembina's Class A preferred shares on July 6, 2022 as outlined in the following table:
Series Record Date Payable Date Per Share Amount
Dividend Amount
($ millions)
Series 1 August 2, 2022 September 1, 2022 $0.306625 3
Series 3 August 2, 2022 September 1, 2022 $0.279875 2
Series 5 August 2, 2022 September 1, 2022 $0.285813 3
Series 7 August 2, 2022 September 1, 2022 $0.273750 3
Series 9 August 2, 2022 September 1, 2022 $0.268875 2
Series 15 September 15, 2022 October 3, 2022 $0.279000 2
Series 17 September 15, 2022 October 3, 2022 $0.301313 2
Series 19 September 15, 2022 October 3, 2022 $0.292750 2
Series 21 August 2, 2022 September 1, 2022 $0.306250 5
Series 23 August 2, 2022 August 15, 2022 $0.328125 4
Series 25 August 2, 2022 August 15, 2022 $0.325000 3
Pembina Pipeline CorporationSecond Quarter 2022 55

8. REVENUE
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
2022 2021
3 Months Ended June 30 Pipelines Facilities Marketing & New Ventures Total Pipelines Facilities Marketing & New Ventures Total
($ millions)
Take-or-pay(1)
413 195 - 608 389 180 - 569
Fee-for-service(1)
111 32 - 143 93 36 - 129
Product sales(2)(3)
- - 2,300 2,300 - - 1,163 1,163
Revenue from contracts with customers 524 227 2,300 3,051 482 216 1,163 1,861
Operational finance lease income 6 - - 6 4 - - 4
Fixed operating lease income 29 9 - 38 28 9 - 37
Total external revenue 559 236 2,300 3,095 514 225 1,163 1,902
(1) Revenue recognized over time.
(2) Revenue recognized at a point in time.
(3) Comparative 2021 period has been restated. See Note 15 to the Interim Financial Statements for further details.
2022 2021
6 Months Ended June 30 Pipelines Facilities Marketing & New Ventures Total Pipelines Facilities Marketing & New Ventures Total
($ millions)
Take-or-pay(1)
801 390 - 1,191 788 364 - 1,152
Fee-for-service(1)
216 65 - 281 172 76 - 248
Product sales(2)(3)
- - 4,571 4,571 - - 2,434 2,434
Revenue from contracts with customers 1,017 455 4,571 6,043 960 440 2,434 3,834
Operational finance lease income 13 1 - 14 8 - - 8
Fixed operating lease income 58 18 - 76 58 18 - 76
Total external revenue 1,088 474 4,571 6,133 1,026 458 2,434 3,918
(1) Revenue recognized over time.
(2) Revenue recognized at a point in time.
(3) Comparative 2021 period has been restated. See Note 15 to the Interim Financial Statements for further details.
b.Contract Liabilities
Significant changes in the contract liabilities balances during the period are as follows:
6 Months Ended June 30, 2022 12 Months Ended December 31, 2021

($ millions)
Take-or-Pay Other Contract Liabilities Total
Contract Liabilities
Take-or-Pay Other Contract Liabilities Total
Contract Liabilities
Opening balance 3 288 291 3 289 292
Additions (net in the period)
27 66 93 - 64 64
Revenue recognized from contract liabilities(1)
- (63) (63) - (65) (65)
Transfers to liabilities related to assets held for sale (Note 14)
(3) (92) (95) - - -
Closing balance
27 199 226 3 288 291
Less current portion(2)
(27) (67) (94) (3) (68) (71)
Ending balance - 132 132 - 220 220
(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 June 30, 2022, the balance includes $27 million of cash collected under take-or-pay contracts which will be recognized within one year as the customer chooses to ship, process, or otherwise forego the associated service.

56Pembina Pipeline CorporationSecond Quarter 2022

Contract liabilities depict Pembina's obligation to perform services in the future for cash and non-cash consideration which have 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.
In all instances where goods or services have been transferred to a customer in advance of the receipt of customer consideration, Pembina's right to consideration is unconditional and has therefore been presented as a receivable.
9. NET FINANCE COSTS
3 Months Ended June 30 6 Months Ended June 30

($ millions)
2022 2021 2022 2021
Interest expense on financial liabilities measured at amortized cost:
Loans and borrowings 95 91 189 182
Subordinated hybrid notes 8 8 15 13
Leases 8 9 16 18
Unwinding of discount rate 4 4 8 8
Loss in fair value of non-commodity-related derivative financial instruments 8 4 3 8
Foreign exchange losses (gains) and other 1 (21) 2 (30)
Net finance costs 124 95 233 199
Pembina Pipeline CorporationSecond Quarter 2022 57

10. OPERATING SEGMENTS
Pembina's operating segments are organized by three divisions: Pipelines, Facilities and Marketing & New Ventures.
3 Months Ended June 30, 2022
Pipelines(1)
Facilities
Marketing &
New Ventures(2)
Corporate & Inter-segment Eliminations Total
($ millions)
Revenue from external customers 559 236 2,300 - 3,095
Inter-segment revenue 45 124 - (169) -
Total revenue(3)
604 360 2,300 (169) 3,095
Operating expenses 156 141 - (86) 211
Cost of goods sold, including product purchases - 2 2,157 (84) 2,075
Depreciation and amortization included in operations 96 80 11 1 188
Cost of sales 252 223 2,168 (169) 2,474
Realized (gain) loss on commodity-related derivative financial instruments - (10) 59 - 49
Share of profit from equity accounted investees 48 20 6 - 74
Unrealized loss (gain) on commodity-related derivative financial instruments - 9 (74) - (65)
Gross profit 400 158 153 - 711
Depreciation included in general and administrative - - - 10 10
Other general and administrative 10 5 10 55 80
Other income - (1) (3) (14) (18)
Reportable segment results from operating activities
390 154 146 (51) 639
Net finance costs 8 11 7 98 124
Reportable segment earnings (loss) before tax
382 143 139 (149) 515
Capital expenditures(4)
75 48 17 12 152
Contributions to equity accounted investees - - 6 - 6
3 Months Ended June 30, 2021
Pipelines(1)
Facilities
Marketing &
New Ventures(2)
Corporate & Inter-segment Eliminations Total
(Restated Note 15)
($ millions)
Revenue from external customers 514 225 1,163 - 1,902
Inter-segment revenue 40 109 - (149) -
Total revenue(3)
554 334 1,163 (149) 1,902
Operating expenses 132 112 - (58) 186
Cost of goods sold, including product purchases - 2 1,098 (92) 1,008
Depreciation and amortization included in operations 108 56 12 2 178
Cost of sales 240 170 1,110 (148) 1,372
Realized loss on commodity-related derivative financial instruments - - 33 - 33
Share of profit from equity accounted investees 27 18 7 - 52
Unrealized (gain) loss on commodity-related derivative financial instruments - (16) 15 - (1)
Gross profit 341 198 12 (1) 550
Depreciation included in general and administrative - - - 10 10
Other general and administrative 7 2 8 52 69
Other expense (income) 7 1 (1) 18 25
Impairment expense - 22 1 - 23
Reportable segment results from operating activities
327 173 4 (81) 423
Net finance costs (income) 2 12 (5) 86 95
Reportable segment earnings (loss) before tax
325 161 9 (167) 328
Capital expenditures
95 36 10 5 146
Contributions to equity accounted investees - - - - -
(1) Pipelines transportation revenue includes $55 million (2021: $55 million) associated with U.S. pipeline revenue.
(2) Marketing & New Ventures includes revenue of $89 million (2021: $40 million) associated with U.S. midstream sales.
(3) During 2022 and 2021, no one customer accounted for 10 percent or more of total revenues reported throughout all segments.
(4) Includes capital expenditures related to assets held for sale of $6 million.

58Pembina Pipeline CorporationSecond Quarter 2022

6 Months Ended June 30, 2022
Pipelines(1)
Facilities
Marketing & New Ventures(2)
Corporate & Inter-segment Eliminations Total
($ millions)
Revenue from external customers 1,088 474 4,571 - 6,133
Inter-segment revenue 89 243 - (332) -
Total revenue(3)
1,177 717 4,571 (332) 6,133
Operating expenses 297 275 - (168) 404
Cost of goods sold, including product purchases - 2 4,124 (167) 3,959
Depreciation and amortization included in operations 195 135 22 3 355
Cost of sales 492 412 4,146 (332) 4,718
Realized (gain) loss on commodity-related derivative financial instruments - (17) 113 - 96
Unrealized gain on commodity-related derivative financial instruments - (51) (39) - (90)
Share of profit from equity accounted investees 88 44 27 - 159
Gross profit 773 417 378 - 1,568
Depreciation included in general and administrative - - - 20 20
Other general and administrative 24 12 20 121 177
Other (income) expense (9) (1) (3) 3 (10)
Reportable segment results from operating activities
758 406 361 (144) 1,381
Net finance costs 15 17 1 200 233
Reportable segment earnings (loss) before tax
743 389 360 (344) 1,148
Capital expenditures(4)
189 78 46 18 331
Contributions to equity accounted investees - 13 12 - 25
6 Months Ended June 30, 2021
Pipelines(1)
Facilities
Marketing & New Ventures(2)
Corporate & Inter-segment Eliminations Total
(Restated Note 15)
($ millions)
Revenue from external customers 1,026 458 2,434 - 3,918
Inter-segment revenue 81 215 - (296) -
Total revenue(3)
1,107 673 2,434 (296) 3,918
Operating expenses 269 223 - (124) 368
Cost of goods sold, including product purchases - 6 2,195 (176) 2,025
Depreciation and amortization included in operations 212 102 25 4 343
Cost of sales 481 331 2,220 (296) 2,736
Realized loss on commodity-related derivative financial instruments - - 121 - 121
Unrealized (gain) loss on commodity-related derivative financial instruments - (17) 21 - 4
Share of profit from equity accounted investees 74 36 13 - 123
Gross profit 700 395 85 - 1,180
Depreciation included in general and administrative - - - 20 20
Other general and administrative 16 7 15 108 146
Other expense 1 - - 28 29
Impairment expense 10 22 3 - 35
Reportable segment results from operating activities 673 366 67 (156) 950
Net finance costs (income) 15 18 (9) 175 199
Reportable segment earnings (loss) before tax 658 348 76 (331) 751
Capital expenditures 178 76 12 7 273
Contributions to equity accounted investees - 11 1 - 12
(1) Pipelines transportation revenue includes $107 million (2021: $106 million) associated with U.S. pipeline revenue.
(2) Marketing & New Ventures includes revenue of $177 million (2021: $123 million) associated with U.S. midstream sales.
(3) During 2022 and 2021, no one customer accounted for 10 percent or more of total revenues reported throughout all segments.
(4) Includes capital expenditures related to assets held for sale of $6 million.
Pembina Pipeline CorporationSecond Quarter 2022 59

11. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
($ millions) Currency Translation Reserve
Cash Flow Hedge
Reserve
Pension and other Post-Retirement Benefit Plan Adjustments(2)
Total
Balance at December 31, 2020 48 - (46) 2
Other comprehensive loss before hedging activities (122) - - (122)
Other comprehensive gain resulting from hedging activities(1)
7 4 - 11
Balance at June 30, 2021 (67) 4 (46) (109)
Balance at December 31, 2021 32 8 (12) 28
Other comprehensive gain before hedging activities 70 - - 70
Other comprehensive (loss) gain resulting from hedging activities(1)
(6) 14 - 8
Balance at June 30, 2022 96 22 (12) 106
(1) Amounts relate to hedges of the Company's net investment in foreign operations (reported in Currency Translation Reserve) and interest rate derivatives designated as cash flow hedges (reported in Cash Flow Hedge Reserve) (Note 12).
(2) Pension and other Post-Retirement Benefit Plan Adjustments will not be reclassified into earnings.
12. FINANCIAL INSTRUMENTS & RISK MANAGEMENT
Risk Management
Pembina's risk management strategies, policies and limits, ensure risks and exposures are aligned to its business strategy and risk tolerance. Pembina's Board of Directors is responsible for providing risk management oversight at Pembina and oversees how management monitors compliance with Pembina's risk management policies and procedures and reviews the adequacy of this risk framework in relation to the risks faced by Pembina.
Pembina has exposure to counterparty credit risk, liquidity risk and market risk. Pembina utilizes derivative instruments to stabilize the results of its marketing business and, as at June 30, 2022, the Company has entered into certain financial derivative contracts in order to manage commodity price, foreign exchange and interest rate risk. These instruments are not used for trading or speculative purposes.
Pembina's Canadian dollar drawings on its Credit Facilities have variable rate components that reference the Canadian Dollar Offered Rate ("CDOR"). CDOR rates will cease to be published at the end of June 2024. CDOR is expected to be replaced by the Canadian Overnight Repo Rate Average ("CORRA"). Pembina will continue to monitor developments and the potential impact on the business.
Fair Values
The fair values of financial assets and liabilities, together with the carrying amounts shown in the condensed consolidated interim statements of financial position, are shown in the table below. Certain non-derivative financial instruments measured at amortized cost including cash and cash equivalents, trade receivables and other, finance lease receivables, advances to related parties, trade payables and other, and other liabilities have been excluded because they have carrying amounts that approximate their fair value due to the nature of the item or the short time to maturity. These instruments would be classified in Level 2 of the fair value hierarchy.
60Pembina Pipeline CorporationSecond Quarter 2022

June 30, 2022 December 31, 2021
Carrying
Value
Fair Value(1)
Carrying
Value
Fair Value(1)
($ millions)
Level 1
Level 2
Level 3
Level 1 Level 2 Level 3
Financial assets carried at fair value
Derivative financial instruments(3)(4)
232 - 184 48 95 - 84 11
Financial liabilities carried at fair value
Derivative financial instruments(3)
96 - 96 - 59 - 59 -
Contingent consideration(5)
61 - 26 35 70 - 35 35
Financial liabilities carried at amortized cost
Long-term debt(2)
11,141 - 9,983 - 11,239 - 11,814 -
(1) The basis for determining fair value is disclosed in Note 2.
(2) Carrying value of current and non-current balances. Includes loans and borrowings and subordinated hybrid notes.
(3) At June 30, 2022 all derivative financial instruments are carried at fair value through earnings, except for $22 million in interest rate derivative financial assets that have been designated as cash flow hedges.
(4) Includes $115 million transferred to assets held for sale for the six months ended June 30, 2022.
(5) Included in trade payables and other and other liabilities. Under the terms of the agreements on Pembina's investment in the Cedar LNG Project, Pembina has commitments to make additional payments on a positive final investment decision as well as contributions to fund development costs and annual operating budgets.
Level 2
Pembina's Level 2 financial instruments carried at fair value are valued using inputs that include quoted forward prices for commodities, time value and volatility factors, which can be substantially observed or corroborated in the marketplace. Instruments in this category include non-exchange traded derivatives such as over-the-counter physical forwards and options, including those that have prices similar to quoted market prices. Pembina obtains quoted market prices for its inputs from information sources including banks, Bloomberg Terminals and Natural Gas Exchange.
Level 3
Changes in fair value of the derivative assets classified as Level 3 in the fair value hierarchy were as follows:
($ millions) 2022
Level 3 derivative asset at January 1
11
Total gain (loss):
Included in earnings 37
Level 3 derivative asset at June 30
48
There were no transfers into or out of Level 3 during the three and six months ended June 30, 2022.
Derivative instruments
Pembina enters into derivative instruments to hedge future cash flows associated with interest rate, commodity, and foreign exchange exposures. Derivatives are considered effective hedges to the extent that they offset the changes in value of the hedged item or transaction resulting from a specified risk factor. In some cases, even though the derivatives are considered to be effective economic hedges, they do not meet the specific criteria for hedge accounting treatment and are classified as held at fair value through profit or loss ("FVTPL").
The following table is a summary of the net derivative financial instruments:
June 30, 2022 December 31, 2021

($ millions)
Current Asset(1)
Non-Current Asset(2)
Current Liability(1)
Non-Current Liability Total
Current Asset(1)
Non-Current Asset
Current Liability(1)
Non-Current Liability Total
Commodity financial instruments 47 163 (86) (3) 121 13 73 (48) (6) 32
Interest rate 8 14 - - 22 1 8 - - 9
Foreign exchange - - (8) - (8) - - (5) - (5)
Net derivative financial instruments 55 177 (94) (3) 135 14 81 (53) (6) 36
(1) At June 30, 2022 the derivative financial instruments were offset by $3 million (2021: $11 million) when determining the net amounts presented on the condensed consolidated interim statement of financial position.
(2) Includes $115 million transferred to assets held for sale for the six months ended June 30, 2022.
Pembina Pipeline CorporationSecond Quarter 2022 61

Notional and Maturity Summary
The maturity and notional amount or quantity outstanding related to Pembina's derivative instruments are as follows:
($ millions)
Liquids
(bpd)
Natural Gas
(GJ/d)
Power
(GWh)
Foreign Exchange Interest Rate
As at June 30, 2022
Purchases(1)
326 73,958 11,340 - -
Sales(1)
16,693 - - - -
Millions of U.S. dollars - - - 309 250
Maturity dates 2023 2023 2040 2023 2025
As at December 31, 2021
Purchases(1)
- 62,615 6,166 - -
Sales(1)
16,550 - - - -
Millions of U.S. dollars - - - 272 250
Maturity dates 2022 2022 2040 2022 2025
(1) Barrels per day ("bpd"), gigajoules per day ("GJ/d") and gigawatt hours ("GWh").
Gains and Losses on Derivative Instruments
Realized and unrealized losses (gains) on derivative instruments are as follows:
3 Months Ended June 30 6 Months Ended June 30
($ millions) 2022 2021 2022 2021
Derivative instruments held at FVTPL(1)
Realized (gain) loss
Commodity-related
49 33 96 121
Foreign exchange
2 (3) 3 (8)
Unrealized (gain) loss
Commodity-related (65) (1) (90) 4
Foreign exchange 8 4 3 8
Derivative instruments in hedging relationships(2)
Unrealized gain
Interest rate
(2) 1 (14) (4)
(1) Realized and unrealized losses (gains) on commodity derivative instruments held at FVTPL are included in loss (gain) on commodity-related derivative financial instruments in the Interim Financial Statements. Realized and unrealized losses (gains) on foreign exchange derivative instruments held at FVTPL are included in net finance costs in the Interim Financial Statements.
(2) Unrealized gains on derivatives in designated cash flow hedging relationships are recognized in the cash flow hedge reserve in accumulated other comprehensive income, with realized (gains) losses being reclassified to net finance costs. Refer to Note 11 for amounts reclassified. No (gains) losses have been recognized in net income relating to discontinued cash flow hedges.
Non-Derivative Instruments Designated as Net Investment Hedges
Pembina has designated certain U.S. dollar denominated debt as a hedge of the Company's net investment in U.S. dollar denominated subsidiaries and investments in equity accounted investees. The designated debt has been assessed as having no ineffectiveness as the U.S. dollar debt has an equal and opposite exposure to U.S. dollar fluctuations. As a result, all foreign exchange gains or losses on the debt are reported directly in other comprehensive income.
The following balances of U.S. dollar debt had been designated as hedges:
($ millions) June 30, 2022 December 31, 2021
Notional amount of U.S. debt designated (in U.S. dollars)
250 250
Carrying value of U.S. debt designated 321 316
Maturity date 2025 2025
62Pembina Pipeline CorporationSecond Quarter 2022

13. COMMITMENTS AND CONTINGENCIES
Commitments
Pembina had the following contractual obligations outstanding as at June 30, 2022:
Contractual Obligations(1)
Payments Due by Period
($ millions) Total Less than 1 Year 1 - 3 Years 3 - 5 Years After 5 Years
Leases(2)
920 102 174 143 501
Long-term debt(3)
17,103 1,983 2,151 1,888 11,081
Construction commitments(4)(5)
1,205 372 265 37 531
Other 538 81 121 75 261
Total contractual obligations
19,766 2,538 2,711 2,143 12,374
(1)
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 9 years and involve the purchase of NGL products from producers. Assuming product is available, Pembina has secured between 40 and 190 mbpd of NGL each year up to and including 2030. Power purchase agreements range from one to 24 years and involve the purchase of power from electrical service providers. Pembina has secured up to 78 megawatts per day each year up to and including 2046.
(2)
Includes terminals, rail, office space, land and vehicle leases.
(3)
Includes loans and borrowings, subordinated hybrid notes and interest payments on Pembina's senior unsecured medium-term notes and subordinated hybrid notes. Excludes deferred financing costs.
(4)
Excluding significant projects that are awaiting regulatory approval, projects which Pembina is not committed to construct, and projects that are executed by equity accounted investees.
(5)
Includes construction commitments related to assets held for sale of $264 million as at June 30, 2022; $6 million related to payments due in less than 1 year, $15 million 1-3 years, $12 million 3-5 years, and $231 million after 5 years.
Commitments to Equity Accounted Investees
Pembina has commitments to provide contributions to certain equity accounted investees based on annual budgets approved by the joint venture partners and contractual agreements.
Contingencies
Pembina, including its subsidiaries and its investments in equity accounted investees, are subject to various legal and regulatory and tax proceedings, actions and audits 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. Of most significance is a claim filed against Aux Sable by a counterparty to an NGL supply agreement. Aux Sable has filed Statements of Defense responding to the claim. While the final outcome of such actions and proceedings cannot be predicted with certainty, at this time management believes that the resolutions of such actions and proceedings will not have a material impact on Pembina's financial position or results of operations.
Letters of Credit
Pembina has provided letters of credit to various third parties in the normal course of conducting business. The letters of credit include financial guarantees to counterparties for product purchases and sales, transportation services, utilities, engineering and construction services. The letters of credit have not had and are not expected to have a material impact on Pembina's financial position, earnings, liquidity or capital resources. As at June 30, 2022, Pembina had $173 million (December 31, 2021: $135 million) in letters of credit issued.
Pembina Pipeline CorporationSecond Quarter 2022 63

14. ASSETS HELD FOR SALE
On March 1, 2022, Pembina announced that it has entered into definitive agreements with affiliates of KKR & Co., Inc. (collectively, "KKR") to combine their respective western Canadian natural gas processing assets into a single, new joint venture entity ("Newco"). Pembina will hold a 60 percent interest in Newco and serve as its operator and manager, while KKR's global infrastructure funds will hold the remaining 40 percent interest in Newco.
Pembina committed to a plan to sell its field-based gas processing assets, which include the Cutbank Complex, the Saturn Complex, the Resthaven Facility, the Duvernay Complex and the Saskatchewan Ethane Extraction Plant, which are all reported within the Facilities operating segment. Based on facts and circumstances, management has determined that these assets should be presented as a disposal group held for sale as at June 30, 2022. Pembina will retain its 45 percent interest in Veresen Midstream post transaction and as such Pembina's carrying amount for Veresen Midstream will continue to be recovered through continuing use and no reclassification to held for sale is required.
The table below details the assets and liabilities held for sale measured at their carrying amount as at June 30, 2022:
($ millions)
June 30, 2022
Cash and cash equivalents 147
Trade receivables and other 91
Inventory 18
Property, plant and equipment (Note 3)
2,536
Intangible assets and goodwill 205
Derivative financial instruments (Note 12)
115
Total assets held for sale 3,112
Trade payables and other 26
Decommissioning provision (Note 6)
20
Contract liabilities (Note 8)
95
Deferred tax liabilities 483
Total liabilities related to assets held for sale 624
On July 27, 2022, the Canadian Competition Bureau issued a no action letter for the joint venture transaction. Issuance of the no action letter allows Pembina and KKR to proceed with next steps on closing the transaction, which is expected to occur in August 2022 subject to the satisfaction of the remaining conditions. Pursuant to an agreement with the Canadian Competition Bureau, and consistent with Pembina and KKR's intention to divest upon announcing their joint venture, Pembina and KKR's global infrastructure funds will divest the 50 percent, non-operated interest in the Key Access Pipeline System which will be contributed into Newco as part of the transaction.
15. RESTATEMENT
During the third quarter of 2021 Pembina identified certain crude contracts that were recorded incorrectly within Marketing & New Ventures. Revenue and cost of goods sold associated with the contracts were recorded on a gross basis but should have been recorded on a net basis. The restatement reduced revenue and cost of goods sold for the three and six months ended June 30, 2021 by $52 million and $81 million, respectively, with no impact on earnings, cash flows or financial position.
64Pembina Pipeline CorporationSecond Quarter 2022


HEAD OFFICE
Pembina Pipeline Corporation
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AUDITORS
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STOCK EXCHANGE
Pembina Pipeline Corporation
Toronto Stock Exchange listing symbols for:
COMMON SHARES PPL
PREFERRED SHARES PPL.PR.A, PPL.PR.C, PPL.PR.E, PPL.PR.G, PPL.PR.I, PPL.PR.O, PPL.PR.Q, PPL.PR.S, PPL.PF.A, PPL.PF.C and PPL.PF.E
New York Stock Exchange listing symbol for:
COMMON SHARESPBA
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FAX403.237.0254
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