6-K - PBA - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August, 2023

Commission File Number: 001-35563

PEMBINA PIPELINE CORPORATION

(Name of registrant)

(Room #39-095) 4000, 585 8th Avenue S.W.

Calgary, Alberta T2P 1G1

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

o Form 20-F	x Form 40-F

INCORPORATION BY REFERENCE

Exhibit 99.1 to this Report on Form 6-K is hereby incorporated by reference as an exhibit to the Registration Statement on Form F-10 (File No. 333-261207) of Pembina Pipeline Corporation.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		PEMBINA PIPELINE CORPORATION
Date:	August 3, 2023	By:	/s/ Cameron J. Goldade
			Name: Cameron J. Goldade
			Title: Senior Vice President & Chief Financial Officer

Form 6-K Exhibit Index

Exhibit Number	Document Description
99.1	Q2 2023 Management's Discussion and Analysis & Financial Statements
99.2	CEO Certificate
99.3	CFO Certificate

Document

REPORT TO SHAREHOLDERS
Second Quarter 2023
MANAGEMENT'S DISCUSSION AND ANALYSIS
Table of Contents
1. About Pembina	2
2. Financial & Operating Overview	3
3. Segment Results	7
4. Liquidity & Capital Resources	23
5. Share Capital	27
6. CapitalExpenditures	29
7. Selected Quarterly Information	30
8. Selected Equity Accounted Investee Information	33
9. Other	34
10. Accounting Policies & Estimates	36
11. Non-GAAP & Other Financial Measures	37
12. Abbreviations	41
13. Forward-Looking Statements & Information	43

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 3, 2023, 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, 2023 ("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, 2022. 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 or Consolidated 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 or ratios disclosed by other issuers. Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A for additional information regarding these non-GAAP financial 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, 2022. 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 2023 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 an export terminals business. Through our integrated value chain, we seek to provide safe and reliable energy solutions that connect producers and consumers across the world, support a more sustainable future and benefit our customers, investors, employees and communities. For more information, please visit www.pembina.com.

Pembina's Purpose and Strategy

We deliver extraordinary energy solutions so the world can thrive.

Pembina will build on its strengths by continuing to invest in and grow the core businesses that provide critical transportation and midstream services to help ensure reliable and secure energy supply. Pembina will capitalize on exciting opportunities to leverage its assets and expertise into new service offerings that proactively respond to the transition to a lower-carbon economy. In continuing to meet global energy demand and its customers' needs, while ensuring Pembina's long-term success and resilience, the Company has established four strategic priorities:

1.To be resilient, we will sustain, decarbonize, and enhance our businesses. This priority is focused on strengthening and growing our existing franchise and demonstrating environmental leadership.

2.To thrive, we will invest in the energy transition to improve the basins in which we operate. We will expand our portfolio to include new businesses associated with lower-carbon commodities.

3.To meet global demand, we will transform and export our products. We will continue our focus on supporting the transformation of Western Canadian Sedimentary Basin commodities into higher margin products and enabling more coastal egress.

4.To set ourselves apart, we will create a differentiated experience for our stakeholders. We remain committed to delivering excellence for our four key stakeholder groups meaning that:

a.Employees say we are the 'employer of choice' and value our safe, respectful, collaborative, and inclusive work culture.

b.Communities welcome us and recognize the net positive impact of our social and environmental commitment.

c.Customers choose us first for reliable and value-added services.

d.Investors receive sustainable industry-leading total returns.

2 Pembina Pipeline Corporation Second Quarter 2023

FINANCIAL & OPERATING OVERVIEW

Consolidated Financial Overview for the Three Months Ended June 30

Results of Operations

($ millions, except where noted)	2023	2022	Change
Revenue	2,070	3,095	(1,025)
Net revenue(1)	858	1,020	(162)
Gross profit	659	711	(52)
Adjusted EBITDA(1)	823	849	(26)
Earnings	363	418	(55)
Earnings per common share – basic (dollars)	0.60	0.70	(0.10)
Earnings per common share – diluted (dollars)	0.60	0.69	(0.09)
Cash flow from operating activities	653	604	49
Cash flow from operating activities per common share – basic (dollars)	1.19	1.09	0.10
Adjusted cash flow from operating activities(1)	606	683	(77)
Adjusted cash flow from operating activities per common share – basic (dollars)(1)	1.10	1.23	(0.13)
Capital expenditures	123	152	(29)
Total volumes (mboe/d)(2)	3,187	3,344	(157)

Change in Earnings ($ millions)

Results Overview

Earnings in the second quarter of 2023 reflect continued strong performance in the Pipelines and Facilities Divisions, excluding the negative impact of the Northern Pipeline system outage, Wildfires, and third-party outages, as well as a lower pricing environment for the period compared to 2022 for the Marketing & New Ventures Division. The second quarter was also negatively impacted by costs incurred in relation to, an insurance contract provision connected to Cedar LNG, a deferred recognition of flow-through capital charges on the Peace Pipeline system, and a final arbitration award issued against CKPC. Additionally, earnings were impacted by the following factors:

•Pipelines: lower contributions from Alliance, partially offset by higher revenue on the Cochin Pipeline.

•Facilities: high Share of Profit from PGI and lower depreciation, partially offset by lower contribution resulting from the change in ownership of the majority of Pembina's field-based gas processing assets, which were wholly-owned prior to the creation of PGI on August 15, 2022 (the "PGI Transaction"), and are now being accounted for in Share of Profit from PGI, which is affected by expenses such as income taxes, depreciation, and interest.

•Marketing & New Ventures: higher gains on commodity-related derivatives and lower net finance costs.

Pembina Pipeline Corporation Second Quarter 2023 3

Changes in Results for the Three Months Ended June 30
Revenue	$1.0 billion decrease. Lower revenue in Marketing & New Ventures primarily due to a decrease in prices across the crude oil complex, lower NGL prices and lower crude oil volumes, combined with lower revenue in Facilities largely due to revenue from the field-based gas processing assets contributed to PGI in connection with the PGI Transaction now being reflected in share of profit from equity accounted investees ("Share of Profit") (second quarter of 2022, included $118 million in revenue related to the assets contributed to PGI) and lower recoverable costs. Additionally, during the second quarter of 2023, volumes on certain assets in Pipelines were temporarily curtailed due to the wildfires in Alberta and British Columbia ("Wildfires"), resulting in a negative impact to consolidated revenue of $23 million. Also, on February 23, 2023, service on the Northern Pipeline system resumed at reduced operating pressures, following the unplanned outage which occurred in the first quarter of 2023 ("Northern Pipeline system outage"), resulting in a negative impact to consolidated revenue of $17 million. Full operating pressure resumed mid-May on the Northern Pipeline system. These results were partially offset by higher tolls on the Cochin Pipeline and the Peace Pipeline system.
Cost of goods sold	$863 million decrease, primarily due to lower crude oil and NGL market prices, as well as lower crude oil volumes in Marketing & New Ventures.
Operating expenses	$22 million decrease, primarily due to lower Facilities operating expenses primarily due to the PGI Transaction (second quarter of 2022, included $32 million in operating expenses related to the assets contributed to PGI), coupled with lower operating expenses at Empress and lower recoverable geotechnical costs related to the Western Pipeline, partially offset by the costs associated with the Northern Pipeline system outage.
Cash flow from operating activities	$49 million increase, primarily driven by an increase in the change in non-cash working capital, higher distributions from equity accounted investees, and lower taxes paid, partially offset by earnings adjusted for items not involving cash and a decrease in payments collected through contract liabilities.
Adjusted cash flow from operating activities(1)	$77 million decrease, largely due to the change in cash flow from operating activities, excluding the change in non-cash working capital and taxes paid, combined with higher current tax expense, partially offset by lower accrued share-based payment expense.
Adjusted EBITDA(1)	$26 million decrease, primarily due to the impact in the Pipelines and Facilities Divisions resulting from the Wildfires ($24 million) and Northern Pipeline system outage ($23 million). These are combined with lower net revenue from Facilities and Marketing & New Ventures, as well as $21 million associated with, a combination of, an insurance contract provision related to the parental guarantee and letters of credit for Cedar LNG, a deferred recognition of flow-through charges related to capital integrity work that resulted in a revenue timing difference, and a final arbitration award issued against CKPC. These factors were partially offset by realized gains on commodity-related derivatives during the second quarter of 2023 compared to losses recognized during the second quarter of 2022 and higher adjusted EBITDA from equity accounted investees, due to the contributions from PGI which outweighed the lower contributions from Alliance and Aux Sable.
Total volumes<br><br>(mboe/d)(2)	157 mboe/d decrease, largely driven by the disposition of Pembina's interest in certain Facilities assets at Empress in the fourth quarter of 2022, the impacts of the Wildfires and the Northern Pipeline system outage which resulted in lower volumes of 58 mboe/d and 57 mboe/d, respectively, partially offset by higher volumes at the Alberta Ethane Gathering System ("AEGS") due to third-party outages in the second quarter of 2022 and the volumes from PGI's gas processing assets following the PGI Transaction.

(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. Volumes do not include Empress processing capacity. 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.

4 Pembina Pipeline Corporation Second Quarter 2023

Consolidated Financial Overview for the Six Months Ended June 30

Results of Operations

($ millions, except where noted)	2023	2022	Change
Revenue	4,367	6,133	(1,766)
Net revenue(1)	1,804	2,174	(370)
Gross profit	1,331	1,568	(237)
Adjusted EBITDA(1)	1,770	1,854	(84)
Earnings	732	899	(167)
Earnings per common share – basic (dollars)	1.21	1.51	(0.30)
Earnings per common share – diluted (dollars)	1.21	1.50	(0.29)
Cash flow from operating activities	1,111	1,259	(148)
Cash flow from operating activities per common share – basic (dollars)	2.02	2.28	(0.26)
Adjusted cash flow from operating activities(1)	1,240	1,383	(143)
Adjusted cash flow from operating activities per common share – basic (dollars)(1)	2.25	2.50	(0.25)
Capital expenditures	260	331	(71)
Total volumes (mboe/d)(2)	3,186	3,358	(172)

Change in Earnings ($ millions)

Results Overview

Earnings during the first six months of 2023 reflect continued strong performance in the Pipelines Divisions, excluding the negative impact of the Northern Pipeline system outage, Wildfires, and third-party outages, as well as a lower pricing environment for the period compared to 2022 for the Marketing & New Ventures Division. The second quarter was also negatively impacted by costs incurred in relation to, an insurance contract provision connected to Cedar LNG, a deferred recognition of flow-through capital charges on the Peace Pipeline system, and a final arbitration award issued against CKPC. Additionally, earnings were impacted by the following factors:

•Pipelines: lower contributions from Alliance, partially offset by higher revenue mainly on the Cochin Pipeline and the Peace Pipeline system.

•Facilities: lower contribution resulting from the change in ownership of the majority of Pembina's wholly-owned field-based gas processing assets and commodity-related derivatives as part of the PGI Transaction, partially offset by high Share of Profit from PGI and lower depreciation.

•Marketing & New Ventures: lower contribution from Aux Sable, partially offset by gains on commodity-related derivatives for the period compared to losses recognized during the first six months of 2022 and lower net finance costs.

•Corporate: lower income tax expense resulting from lower current period earnings and the tax impact of the PGI Transaction, coupled with shared service revenue recognized in the period.

Pembina Pipeline Corporation Second Quarter 2023 5

Changes in Results for the Six Months Ended June 30
Revenue	$1.8 billion decrease. Lower revenue in Marketing & New Ventures primarily due to a decrease in prices across the crude oil complex and lower crude oil volumes, as well as lower NGL prices and marketed NGL volumes, combined with lower revenue in Facilities largely due to revenue from the field-based gas processing assets contributed to PGI now being reflected in Share of Profit (2022 included $231 million in revenue related to the assets contributed to PGI) and lower recoverable costs. In addition, the Northern Pipeline system outage and the Wildfires had a negative impact on consolidated revenue of $54 million and $23 million, respectively. These results were partially offset by higher Pipelines revenue mainly on the Cochin Pipeline and the Peace Pipeline system.
Cost of goods sold	$1.4 billion decrease, primarily due to lower crude oil and NGL market prices, as well as lower crude oil and marketed NGL volumes in Marketing & New Ventures.
Operating expenses	$15 million decrease, primarily due to lower Facilities operating expenses primarily due to the PGI Transaction (2022 included $61 million in operating expenses related to the assets contributed to PGI) and lower recoverable costs at Empress, combined with lower recoverable geotechnical costs related to the Western Pipeline, partially offset with higher power costs in Pipelines, the majority of which are recoverable, as a result of the higher power pool price during the quarter, and the $23 million in costs associated with the Northern Pipeline system outage.
Cash flow from operating activities	$148 million decrease, primarily driven by a decrease in earnings adjusted for items not involving cash, a decrease in the change in non-cash working capital, higher share-based compensation payments, and a decrease in payments collected through contract liabilities, partially offset by lower taxes paid and higher distributions from equity accounted investees.
Adjusted cash flow from operating activities(1)	$143 million decrease, primarily due to the same items impacting cash flow from operating activities, discussed above, excluding the change in non-cash working capital, taxes paid, and share-based compensation payments, partially offset by lower accrued share-based payment expense.
Adjusted EBITDA(1)	$84 million decrease, primarily due to the impact in the Pipelines and Facilities Divisions resulting from the Northern Pipeline system outage ($77 million) and the Wildfires ($24 million). These are combined with lower net revenue from Facilities and Marketing & New Ventures, as well as $21 million associated with, a combination of, an insurance contract provision related to the parental guarantee and letters of credit for Cedar LNG, a deferred recognition of flow-through charges related to capital integrity work that resulted in a revenue timing difference, and a final arbitration award issued against CKPC. These factors were partially offset by realized gains on commodity-related derivatives during the first six months of 2023 compared to losses recognized during the first six months of 2022. Additionally, adjusted EBITDA from equity accounted investees increased, primarily due to the contributions from PGI which outweighed the lower contributions from Aux Sable, Alliance, and Ruby, while general and administrative expenses decreased due to lower long-term incentive costs.
Total volumes<br><br>(mboe/d)(2)	172 mboe/d decrease, largely driven by the disposition of Pembina's interest in certain Facilities assets at Empress in the fourth quarter of 2022, impacts of the Northern Pipeline system outage and the Wildfires which resulted in lower volumes of 92 mboe/d and 29 mboe/d, respectively, combined with lower volumes from Ruby, partially offset by the volumes from PGI's gas processing assets following the PGI Transaction and higher volumes on certain Pipeline systems and third-party outages in 2022.

(1) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

6 Pembina Pipeline Corporation Second Quarter 2023

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. Through Pembina's wholly-owned and joint venture assets, the Pipelines Division manages pipeline transportation capacity of 2.8 mmboe/d(1), above ground storage capacity of 11 mmbbls(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, and Illinois, 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. Through its wholly-owned assets and its interest in PGI, Pembina's natural gas gathering and processing facilities 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 5.4 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 Aux Sable 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. This includes developing new business platforms and undertaking initiatives that seek to reduce the greenhouse gas ("GHG") emissions intensity of Pembina's and its customers' operations.

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. Through this infrastructure capacity, as well as utilizing the Company's expansive rail fleet and logistics capabilities, Pembina's marketing business adds incremental value to the commodities by accessing high value markets across North America and globally.

Pembina Pipeline Corporation Second Quarter 2023 7

The Marketing & New Ventures Division is also responsible for the development of new large-scale, or value chain extending projects, including those that provide enhanced access to global markets and support a transition to a lower-carbon economy. Currently, Pembina is pursuing opportunities associated with liquefied natural gas ("LNG"), low-carbon commodities, and large-scale GHG emissions reductions.

(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.

Financial and Operational Overview by Division

	3 Months Ended June 30
	2023		2022
($ 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	2,438	350		501	2,476	382	523
Facilities	749	153		272	868	147	277
Marketing & New Ventures	—	115		96	—	135	103
Corporate	—	(161)		(46)	—	(149)	(54)
Total	3,187	457		823	3,344	515	849
	6 Months Ended June 30
	2023		2022
($ 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	2,452	726		1,026	2,486	743	1,044
Facilities	734	288		570	872	397	558
Marketing & New Ventures	—	235		265	—	352	370
Corporate	—	(317)		(91)	—	(344)	(118)
Total	3,186	932		1,770	3,358	1,148	1,854

(1) Total revenue volumes. See the "Abbreviations" section of this MD&A for definition. Volumes do not include Empress processing capacity. 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.

(2) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

8 Pembina Pipeline Corporation Second Quarter 2023

Equity Accounted Investees Overview by Division(1)

	3 Months Ended June 30
	2023					2022
($ millions, except where noted)	Share of profit	Adjusted EBITDA(2)	Contributions	Distributions(4)	Volumes (3)	Share of profit	Adjusted EBITDA(2)	Contributions	Distributions(4)	Volumes (3)
Pipelines	20	61	1	66	132	48	86	—	83	142
Facilities	69	145	1	108	337	20	54	—	33	89
Marketing & New Ventures	8	16	9	17	34	6	37	6	29	39
Total	97	222	11	191	503	74	177	6	145	270	6 Months Ended June 30
---	---	---	---	---	---	---	---	---	---	---
	2023					2022
($ millions, except where noted)	Share of profit	Adjusted EBITDA(2)	Contributions	Distributions(4)	Volumes (3)	Share of profit	Adjusted EBITDA(2)	Contributions	Distributions(4)	Volumes (3)
Pipelines	55	140	1	136	140	88	179	—	170	172
Facilities	117	320	33	229	340	44	112	13	68	90
Marketing & New Ventures	7	20	15	25	34	27	64	12	62	36
Total	179	480	49	390	514	159	355	25	300	298

(1) Pipelines includes Alliance, Ruby (Pembina ceased to have an interest in the Ruby Pipeline on January 13, 2023) and Grand Valley. Facilities includes PGI, Veresen Midstream (which was contributed to PGI as part of the PGI Transaction on August 15, 2022), and Fort Corp. Marketing and New Ventures includes Aux Sable, CKPC, and Cedar LNG. Refer to the "Abbreviations" section of this MD&A for further information.

(2) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

(3) Total revenue volumes. See the "Abbreviations" section of this MD&A for definition.

(4) Distributions exclude returns of capital. In April 2023, Pembina received an incremental $26 million from PGI as a return of capital.

Pembina Pipeline Corporation Second Quarter 2023 9

Pipelines

Financial Overview for the Three Months Ended June 30

Results of Operations

($ millions, except where noted)	2023	2022	Change
Conventional revenue(1)(2)	375	392	(17)
Transmission revenue(1)(2)	135	118	17
Oil Sands revenue(1)(2)	98	94	4
Pipelines revenue(1)	608	604	4
Operating expenses(1)	160	156	4
Depreciation and amortization included in operations	101	96	5
Share of profit from equity accounted investees	20	48	(28)
Gross profit	367	400	(33)
Reportable segment earnings before tax	350	382	(32)
Adjusted EBITDA(3)	501	523	(22)
Volumes (mboe/d)(4)	2,438	2,476	(38)	Change in Results
---	---
Pipelines revenue(1)	Consistent with prior period. Higher volumes on certain of Pembina's Pipelines assets and higher tolls on the Cochin Pipeline and the Peace Pipeline system, were largely offset by lower revenue due to the impacts of the Wildfires, the impact of third-party outages on certain of Pembina's Pipelines assets, the Northern Pipeline system outage, as well as a deferred recognition of flow-through charges related to capital integrity work on the Peace Pipeline system that resulted in a revenue timing difference.
Operating expenses(1)	Consistent with prior period. Higher recoverable power costs, as a result of the higher power pool price during the period, as well as costs associated with the Northern Pipeline system outage, were largely offset by lower recoverable geotechnical costs related to the Western Pipeline.
Share of profit from equity accounted investees	Decrease primarily due to lower revenues from Alliance as the second quarter of 2022 included the sale of linepack inventory, combined with seasonal contracts being replaced by firm contracts at lower regulated rates and lower interruptible volumes driven by a narrower AECO-Chicago natural gas price differential.
Reportable segment earnings before tax	Decrease primarily due to lower contributions from Alliance, discussed above, the impacts of the Wildfires, the impact of third-party outages on certain of Pembina's Pipelines assets, and the Northern Pipeline system outage, as well as a deferred recognition of flow-through capital charges on the Peace Pipeline system, partially offset by higher volumes on certain of Pembina's Pipelines assets and higher tolls on the Cochin Pipeline and the Peace Pipeline system.
Adjusted EBITDA(3)	Decrease due to the same items impacting reportable segment earnings before tax, discussed above. Included in adjusted EBITDA is $61 million (2022: $85 million) related to Alliance.
Volumes (mboe/d)(4)	Decrease largely due to lower volumes on the Peace Pipeline system and Drayton Valley Pipeline mainly due to the impacts of the Wildfires, lower volumes related to the Northern Pipeline system outage, combined with lower interruptible volumes at Alliance, discussed above, partially offset by higher volumes at AEGS due to third-party outages in the second quarter of 2022. Volumes include 132 mboe/d (2022: 142 mboe/d) related to Alliance.

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

(1) Includes inter-segment transactions. See Note 9 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 Division, respectively. For further details on Pembina's assets, refer to Pembina's AIF for the year ended December 31, 2022.

(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.

10 Pembina Pipeline Corporation Second Quarter 2023

Financial Overview for the Six Months Ended June 30

Results of Operations

($ millions, except where noted)	2023	2022	Change
Conventional revenue(1)(2)	763	752	11
Transmission revenue(1)(2)	273	223	50
Oil Sands revenue(1)(2)	200	202	(2)
Pipelines revenue(1)	1,236	1,177	59
Operating expenses(1)	332	297	35
Depreciation and amortization included in operations	200	195	5
Share of profit from equity accounted investees	55	88	(33)
Gross profit	759	773	(14)
Reportable segment earnings before tax	726	743	(17)
Adjusted EBITDA(3)	1,026	1,044	(18)
Volumes (mboe/d)(4)	2,452	2,486	(34)	Change in Results
---	---
Pipelines revenue(1)	Increase largely due to higher recoverable costs on various systems, higher tolls and the higher U.S. dollar exchange rate on revenues from the Cochin Pipeline, as well as higher tolls and volumes on the Peace Pipeline system, and higher volumes on the Vantage Pipeline due to third-party outages in 2022, partially offset by lower revenue due to the Northern Pipeline system outage and the Wildfires, as well as a deferred recognition of flow-through charges related to capital integrity work on the Peace Pipeline system that resulted in a revenue timing difference.
Operating expenses(1)	Increase largely due to higher recoverable power costs, as a result of the higher power pool price during the period, as well as costs associated with the Northern Pipeline system outage, partially offset by lower recoverable geotechnical costs primarily related to the Western Pipeline.
Share of profit from equity accounted investees	Decrease primarily due to lower revenues from Alliance as the second quarter of 2022 included the sale of linepack inventory, combined with seasonal contracts being replaced by firm contracts at lower regulated rates.
Reportable segment earnings before tax	Decrease primarily due to lower contributions from Alliance, higher operating expenses associated with the Northern Pipeline system outage, as well as a deferred recognition of flow-through capital charges on the Peace Pipeline system, partially offset by higher revenue, as discussed above.
Adjusted EBITDA(3)	Decrease due to the same items impacting reportable segment earnings before tax, discussed above, as well as no adjusted EBITDA from Ruby since the first quarter of 2022. Refer to the "Selected Equity Accounted Investee Information" section for further details on Ruby. Included in adjusted EBITDA is $138 million (2022: $161 million) related to Alliance and nil (2022: $15 million) related to Ruby.
Volumes (mboe/d)(4)	Decrease largely due to lower volumes related to the Northern Pipeline system outage and from Ruby, partially offset by higher volumes at AEGS and on the Vantage Pipeline due to third-party outages in the second quarter of 2022 and higher volumes on the Peace Pipeline system. Volumes include 140 mboe/d (2022: 144 mboe/d) related to Alliance and nil (2022: 28 mboe/d) related to Ruby.

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

(1) Includes inter-segment transactions. See Note 9 to the Interim Financial Statements.

(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.

Pembina Pipeline Corporation Second Quarter 2023 11

Financial and Operational Overview

	3 Months Ended June 30					6 Months Ended June 30
	2023		2022			2023			2022
($ 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<br><br>EBITDA(2)	Volumes(1)	Reportable Segment Earnings Before Tax	Adjusted<br><br>EBITDA(2)
Pipelines(3)
Conventional	881	230	280	937	254		298	890	470	568	917	499	584
Transmission	580	90	160	564	102		168	587	197	337	593	187	334
Oil Sands	977	31	62	975	27		58	975	62	124	976	64	133
General & administrative	—	(1)	(1)	—	(1)		(1)	—	(3)	(3)	—	(7)	(7)
Total	2,438	350	501	2,476	382		523	2,452	726	1,026	2,486	743	1,044

(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 Division. Refer to Pembina's AIF for the year ended December 31, 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
Phase VII Peace Pipeline Expansion	June 2022
Phase IX Peace Pipeline Expansion	December 2022

The following outlines the projects and new developments within Pipelines:

Phase VIII Peace Pipeline Expansion
Capital Budget: $530 million	In-service Date: First half of 2024	Status: On time, trending under budget
This expansion 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. Pipe manufacturing is complete and mainline construction activities have commenced. One pump station has been completed, with two additional pump stations expected to be completed in the second half of 2023.

(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, 2022 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.

12 Pembina Pipeline Corporation Second Quarter 2023

Facilities

Financial Overview for the Three Months Ended June 30

Results of Operations

($ millions, except where noted)	2023	2022	Change
Gas Services revenue(1)(2)	47	176	(129)
NGL Services revenue(1)(2)	173	184	(11)
Facilities revenue(1)	220	360	(140)
Operating expenses(1)	90	141	(51)
Cost of goods sold(1)	—	2	(2)
Depreciation and amortization included in operations	41	80	(39)
Realized gain on commodity-related derivative financial instruments	—	(10)	10
Unrealized loss on commodity-related derivative financial instruments	—	9	(9)
Share of profit from equity accounted investees	69	20	49
Gross profit	158	158	—
Reportable segment earnings before tax	153	147	6
Adjusted EBITDA(3)	272	277	(5)
Volumes (mboe/d)(4)	749	868	(119)
Changes in Results
---	---
Facilities revenue(1)	Decrease largely due to the change in ownership of the majority of Pembina's wholly-owned field-based gas processing assets as part of the PGI Transaction. The revenue from these assets is included in Share of Profit (second quarter of 2022, included $118 million in revenue related to the assets contributed to PGI). This is combined with lower recoverable costs mainly as a result of the commissioning of the Empress Cogeneration Facility which occurred in the fourth quarter of 2022 and lower supply volumes at the Redwater Complex and at Younger resulting from the Northern Pipeline system outage.
Operating expenses(1)	Decrease largely due to the PGI Transaction which resulted in operating expenses for the formerly wholly-owned field-based gas processing assets now being accounted for in Share of Profit (second quarter of 2022, included $32 million in operating expenses related to the assets contributed to PGI), as well as reduced operating expenses resulting from the commissioning of the Empress Cogeneration Facility, discussed above.
Depreciation and amortization included in operations	Decrease primarily due to an asset retirement in the second quarter of 2022 and the field-based gas processing assets contributed to PGI as part of the PGI Transaction now being accounted for under equity accounting by Pembina for its investment in PGI.
Realized and unrealized (gain) loss on commodity-related derivatives	The commodity-related derivatives were transferred as part of the field-based gas processing assets contributed to PGI on August 15, 2022.
Share of profit from equity accounted investees	Increase primarily due to the high earnings of the former Energy Transfer Canada plants and the Dawson Assets, partially offset by income tax expense, depreciation resulting from the PGI assets recorded at fair value, and interest on long-term debt, compared to the contributions in the second quarter of 2022 when Pembina owned a 45 percent interest in Veresen Midstream, as well as the impacts of the Wildfires.
Reportable segment earnings before tax	Consistent with prior period. High Share of Profit from PGI and lower depreciation, were largely offset by lower contributions resulting from the change in ownership of the majority of Pembina's wholly-owned field-based gas processing assets and commodity-related derivatives as part of the PGI Transaction.
Adjusted EBITDA(3)	Consistent with prior period. Lower contributions resulting from the change in ownership of Pembina's formerly wholly-owned field-based gas processing assets and realized commodity-related derivatives as part of the PGI Transaction, were largely offset by the strong performance of certain PGI gas processing assets, as discussed above. Included in adjusted EBITDA is $141 million (2022: nil) related to PGI and nil (2022: $50 million) related to Veresen Midstream.
Volumes (mboe/d)(4)	Decrease primarily due to the disposition of Pembina's interest in the assets comprising the Empress I Plant, Empress I Expansion Plant, and the Empress VI Plant (collectively "E1 and E6") in the fourth quarter of 2022, in exchange for a processing agreement that provides Pembina the right to first priority for gas processing at all Plains Midstream-operated assets at Empress. In addition, the Northern Pipeline system outage resulted in lower volumes at Younger and at the Redwater Complex, partially offset by the volumes from PGI, primarily at the former Energy Transfer Canada plants and on the Dawson Assets. Volumes include 337 mboe/d (2022: nil) related to PGI and nil (2022: 89 mboe/d) related to Veresen Midstream.

Pembina Pipeline Corporation Second Quarter 2023 13

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

(1) Includes inter-segment transactions. See Note 9 to the Interim Financial Statements.

(2) 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, 2022.

(3) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

(4) Total revenue volumes. See the "Abbreviations" section of this MD&A for definition. Volumes do not include Empress processing capacity.

14 Pembina Pipeline Corporation Second Quarter 2023

Financial Overview for the Six Months Ended June 30

Results of Operations

($ millions, except where noted)	2023	2022	Change
Gas Services revenue(1)(2)	84	351	(267)
NGL Services revenue(1)(2)	344	366	(22)
Facilities revenue(1)	428	717	(289)
Operating expenses(1)	170	275	(105)
Cost of goods sold(1)	—	2	(2)
Depreciation and amortization included in operations	75	135	(60)
Realized gain on commodity-related derivative financial instruments	—	(17)	17
Unrealized gain on commodity-related derivative financial instruments	—	(51)	51
Share of profit from equity accounted investees	117	44	73
Gross profit	300	417	(117)
Reportable segment earnings before tax	288	397	(109)
Adjusted EBITDA(3)	570	558	12
Volumes (mboe/d)(4)	734	872	(138)	Changes in Results
---	---
Facilities revenue(1)	Decrease largely due to the change in ownership of the majority of Pembina's wholly-owned field-based gas processing assets as part of the PGI Transaction. The revenue from these assets is included in Share of Profit (the first six months of 2022 included $231 million in revenue related to the assets contributed to PGI). This is combined with lower recoverable costs as a result of the commissioning of the Empress Cogeneration Facility and the disposition of Pembina's interest in the E1 and E6 assets in the fourth quarter of 2022 and lower supply volumes at Younger and the Redwater Complex resulting from the Northern Pipeline system outage.
Operating expenses(1)	Decrease largely due to the PGI Transaction which resulted in operating expenses for the formerly wholly-owned field-based gas processing assets now being accounted for in Share of Profit (the first six months of 2022 included $61 million in operating expenses related to the assets contributed to PGI), as well as reduced operating expenses resulting from the commissioning of the Empress Cogeneration Facility and the disposition of Pembina's interest in the E1 and E6 assets, discussed above.
Depreciation and amortization included in operations	Decrease primarily due to the field-based gas processing assets contributed as part of the PGI Transaction now being accounted for under equity accounting by Pembina for its investment in PGI and an asset retirement in the second quarter of 2022.
Realized and unrealized gain on commodity-related derivatives	The commodity-related derivatives were transferred as part of the field-based gas processing assets contributed to PGI on August 15, 2022.
Share of profit from equity accounted investees	Increase primarily due to the high earnings from the former Energy Transfer Canada plants and the Dawson Assets, partially offset by depreciation resulting from the PGI assets recorded at fair value, interest expense on long-term debt, and income tax expense, compared to the contributions in the first half of 2022 when Pembina owned a 45 percent interest in Veresen Midstream.
Reportable segment earnings before tax	Decrease primarily due to lower contributions resulting from the change in ownership of the majority of Pembina's wholly-owned field-based gas processing assets and commodity-related derivatives as part of the PGI Transaction, combined with lower supply volumes at Younger and the Redwater Complex, partially offset by the high Share of Profit from PGI and lower depreciation.
Adjusted EBITDA(3)	Increase primarily due to the adjusted EBITDA from certain PGI gas processing assets, discussed above, partially offset by lower contributions from the change in ownership of Pembina's formerly wholly-owned field-based gas processing assets as part of the PGI Transaction and lower supply volumes at Younger and at the Redwater Complex. Included in adjusted EBITDA is $313 million (2022: nil) related to PGI and nil (2022: $104 million) related to Veresen Midstream.
Volumes (mboe/d)(4)	Decrease primarily due to the disposition of Pembina's interest in the E1 and E6 assets in exchange for a processing agreement that provides Pembina the right to first priority for gas processing at all Plains Midstream-operated assets at Empress, as well as lower volumes at the Redwater Complex and at Younger resulting from the Northern Pipeline system outage, partially offset by the volumes from PGI, primarily at the former Energy Transfer Canada plants and on the Dawson Assets. Volumes include 340 mboe/d (2022: nil) related to PGI and nil (2022: 90 mboe/d) related to Veresen Midstream.

Pembina Pipeline Corporation Second Quarter 2023 15

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

(1) Includes inter-segment transactions. See Note 9 to the Interim Financial Statements.

(3) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

(4) Total revenue volumes. See the "Abbreviations" section of this MD&A for definition. Volumes do not include Empress processing capacity.

16 Pembina Pipeline Corporation Second Quarter 2023

Financial and Operational Overview

	3 Months Ended June 30					6 Months Ended June 30
	2023		2022			2023			2022
($ 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<br><br>EBITDA(2)	Volumes(1)	Reportable Segment Earnings Before Tax	Adjusted<br><br>EBITDA(2)
Facilities(3)
Gas Services	564	84	167	664	75		171	563	143	360	669	246	341
NGL Services	185	70	106	204	73		107	171	146	211	203	156	222
General & administrative	—	(1)	(1)	—	(1)		(1)	—	(1)	(1)	—	(5)	(5)
Total	749	153	272	868	147		277	734	288	570	872	397	558

(1) Total revenue volumes. See the "Abbreviations" section of this MD&A for definition. Volumes do not include Empress processing capacity.

(2) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

(3) Includes values attributed to Pembina's Gas Services 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, 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
Empress Cogeneration Facility	November 2022

The following outlines the projects and new developments within Facilities:

RFS IV
Capital Budget: $460 million	In-service Date(2): First half of 2026	Status: On time, on budget
RFS IV is a 55,000 bpd propane-plus fractionator at the existing Redwater fractionation and storage complex (the "Redwater Complex"). The project includes additional rail loading capacity and will leverage the design, engineering, and operating best practices of its existing facilities. With the addition of RFS IV, the fractionation capacity at the Redwater Complex will total 256,000 bpd. Engineering activities are progressing and the ordering of long-lead equipment commenced in the second quarter of 2023.

(2) Subject to environmental and regulatory approvals. See the "Forward-Looking Statements & Information" section of this MD&A.

Pembina Pipeline Corporation Second Quarter 2023 17

Marketing & New Ventures

Financial Overview for the Three Months Ended June 30

Results of Operations

($ millions, except where noted)	2023	2022	Change
Marketing revenue(1)	1,357	2,300	(943)
Cost of goods sold(1)	1,277	2,157	(880)
Net revenue(1)(2)	80	143	(63)
Depreciation and amortization included in operations	11	11	—
Realized (gain) loss on commodity-related derivative financial instruments	(14)	59	(73)
Unrealized gain on commodity-related derivative financial instruments	(34)	(74)	40
Share of profit from equity accounted investees	8	6	2
Gross profit	125	153	(28)
Reportable segment earnings before tax	115	135	(20)
Adjusted EBITDA(2)	96	103	(7)
Volumes (mboe/d)(3)	163	176	(13)
Change in Results
---	---
Net revenue(1)(2)	Decrease largely due to lower margins on crude oil resulting from the lower prices across the crude oil complex, coupled with lower NGL margins due to lower propane and butane prices.
Realized (gain) loss on commodity-related derivatives	The realized gain is primarily due to a $7 million gain (2022: $12 million loss) on NGL-based derivative instruments and $5 million in realized gains related to renewable power purchase agreements and crude oil-based derivatives (2022: $47 million loss).
Unrealized gain on commodity-related derivatives	Unrealized gain on commodity-related derivatives primarily due to the change in the forward price for propane and gains on newly added contracts, partially offset by the change in the forward price for power and contracts maturing in the period.
Reportable segment earnings before tax	Decrease largely due to lower margins on crude oil and NGL sales, as well as costs related to an insurance contract provision associated with the parental guarantee and letters of credit for Cedar LNG and a final arbitration award issued against CKPC, partially offset by higher gains on commodity-related derivatives for the quarter compared to the second quarter of 2022 and lower net finance costs related to gains on non-commodity related derivatives compared to losses in the second quarter of 2022.
Adjusted EBITDA(2)	Decrease largely due to a lower adjusted EBITDA contribution from Aux Sable as a result of lower NGL prices, as well as the costs impacting reportable segment earnings before tax, as discussed above, related to Cedar LNG and CKPC, partially offset by realized gains on commodity-related derivatives, compared to losses in the second quarter of 2022, which more than offset the decrease in net revenue. Included in adjusted EBITDA is $21 million (2022: $41 million) related to Aux Sable.
Volumes (mboe/d)(3)	Marketed NGL volumes decreased largely due to reduced ethane sales as a result of lower supply volumes from the Redwater Complex following the Northern Pipeline system outage. Revenue volumes include 34 mboe/d (2022: 39 mboe/d) related to Aux Sable.

Change in Adjusted EBITDA ($ millions)(2)

(1) Includes inter-segment transactions. See Note 9 to the Interim Financial Statements.

(2) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

(3) Marketed NGL volumes in mboe/d. See the "Abbreviations" section of this MD&A for definition.

18 Pembina Pipeline Corporation Second Quarter 2023

Financial Overview for the Six Months Ended June 30

Results of Operations

($ millions, except where noted)	2023	2022	Change
Marketing revenue(1)	2,915	4,571	(1,656)
Cost of goods sold(1)	2,686	4,124	(1,438)
Net revenue(1)(2)	229	447	(218)
Depreciation and amortization included in operations	23	22	1
Realized (gain) loss on commodity-related derivative financial instruments	(38)	113	(151)
Unrealized gain on commodity-related derivative financial instruments	—	(39)	39
Share of profit from equity accounted investees	7	27	(20)
Gross profit	251	378	(127)
Reportable segment earnings before tax	235	352	(117)
Adjusted EBITDA(2)	265	370	(105)
Volumes (mboe/d)(3)	178	191	(13)	Change in Results
---	---
Net revenue(1)(2)	Decrease largely due to lower NGL margins resulting from lower propane and butane prices and lower marketed NGL volumes, discussed below, coupled with lower margins on crude oil resulting from the lower prices across the crude oil complex.
Realized (gain) loss on commodity-related derivatives	The realized gain is primarily due to a $28 million gain (2022: $37 million loss) on NGL-based derivative instruments and $8 million in realized gains related to renewable power purchase agreements and crude oil-based derivatives (2022: $76 million loss).
Unrealized gain on commodity-related derivative financial instruments	Primarily due to unrealized gains on NGL-based derivatives due to the change in forward prices and newly added contracts, offset by unrealized losses due to the change in the forward price for power and contracts maturing in the period.
Share of profit from equity accounted investees	Decrease largely due to lower revenues at Aux Sable as a result of lower NGL prices and re-contracting in the fourth quarter of 2022, partially offset by an unrealized loss on commodity-related derivatives during the first six months of 2022.
Reportable segment earnings before tax	Decrease largely due to lower margins on NGL and crude oil sales and lower marketed NGL volumes, combined with lower contribution from Aux Sable, as well as costs related to an insurance contract provision associated with the parental guarantee and letters of credit for Cedar LNG and a final arbitration award issued against CKPC, partially offset by gains on commodity-related derivatives for the period compared to losses recognized during 2022 and lower net finance costs related to gains on non-commodity related derivatives compared to losses in the first six months of 2022.
Adjusted EBITDA(2)	Decrease largely due to the same items impacting reportable segment earnings before tax, as discussed above, excluding the unrealized loss on commodity-related derivatives and lower net finance costs, combined with lower adjusted EBITDA from Aux Sable as a result of lower NGL prices and re-contracting in 2022. Included in adjusted EBITDA is $25 million (2022: $69 million) related to Aux Sable.
Volumes (mboe/d)(3)	Marketed NGL volumes decreased largely due to reduced ethane and butane sales as a result of lower supply volumes from the Redwater Complex following the Northern Pipeline system outage. Revenue volumes include 34 mboe/d (2022: 36 mboe/d) related to Aux Sable.

Change in Adjusted EBITDA ($ millions)(2)

(1) Includes inter-segment transactions. See Note 9 to the Interim Financial Statements.

(2) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

(3) Marketed NGL volumes in mboe/d. See the "Abbreviations" section of this MD&A for definition.

Pembina Pipeline Corporation Second Quarter 2023 19

Financial and Operational Overview

	3 Months Ended June 30					6 Months Ended June 30
	2023		2022			2023			2022
($ 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<br><br>EBITDA(2)	Volumes(1)	Reportable Segment Earnings Before Tax	Adjusted<br><br>EBITDA(2)
Marketing & New Ventures(3)
Marketing	163	130	111	176	142		111	178	254	283	191	363	382
New Ventures(4)	—	(15)	(15)	—	(7)		(8)	—	(19)	(18)	—	(11)	(12)
Total	163	115	96	176	135		103	178	235	265	191	352	370

(1) Marketed NGL 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 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, 2022.

(4) All New Ventures projects have not yet commenced operations and therefore have no volumes.

20 Pembina Pipeline Corporation Second Quarter 2023

Projects & New Developments(1)

The New Ventures group is responsible for the development of new large-scale, or value chain extending projects, including those that provide enhanced access to global markets and support a transition to a lower-carbon economy. Currently, Pembina is pursuing opportunities associated with LNG, low-carbon commodities, and large-scale GHG emissions reductions.

Pembina has formed a partnership with the Haisla Nation to develop the proposed Cedar LNG project, a three million tonne per annum 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, cost-competitive Canadian LNG for overseas markets. Cedar LNG will provide a valuable outlet for WCSB natural gas to access global markets, and it is expected to achieve higher prices for Canadian producers, contribute to lower overall emissions, and enhance global energy security. Given that Cedar LNG will be a floating facility, manufactured in the controlled conditions of a shipyard, it is expected that the project will have lower construction and execution risk. Further, powered by BC Hydro, Cedar LNG is expected to be one of the greenest LNG facilities in the world. Cedar LNG is expected to be structured as a tolling business providing a low risk, long-term cash flow stream, and strengthening Pembina's financial resilience.

Cedar LNG received its LNG Facility Permit from the BC Energy Regulator in July 2023. This is another major regulatory milestone after receiving its Environmental Assessment Certificate from the B.C. Environmental Assessment Office, a positive Decision Statement from the federal Minister of Environment and Climate Change, and a pipeline permit for the Cedar LNG Pipeline connection to the Coastal GasLink Pipeline.

Cedar LNG has signed non-binding Memorandums of Understanding with investment grade counterparties for long-term liquefaction services and is fully subscribed in relation to the project's total capacity. Work towards the signing of definitive commercial agreements is ongoing.

Cedar LNG elected to progress a second Front End Engineering Design ("FEED") process for the floating LNG vessel in late 2022 and has been waiting for that work to progress to the same stage as the original FEED. In conjunction with detailed commercial discussions and ongoing negotiations between LNG Canada and Coastal GasLink, this has resulted in the anticipated final investment decision being revised to the fourth quarter of 2023.

Pembina and TC Energy Corporation ("TC Energy") continue to develop the Alberta Carbon Grid ("ACG"), a carbon transportation and sequestration platform that is intended to enable Alberta-based industries to effectively manage their GHG emissions, contribute positively to Alberta's lower-carbon economy, and create sustainable long-term value for Pembina and TC Energy stakeholders. Pembina and TC Energy are exploring options to create several hubs throughout Alberta. The first hub is the Industrial Heartland project, which is expected to have the potential of transporting and storing up to ten million tonnes of carbon dioxide ("CO2") annually. The first phase of the Industrial Heartland project will have the potential of transporting and storing up to five million tonnes of CO2 annually. Pembina and TC Energy continue to progress surface and sub-surface engineering and planning, while engaging with customers and other stakeholders. In 2023, ACG licensed and purchased existing seismic data and completed the acquisition of new seismic data. This data will be integrated into subsurface geophysical models and help guide the location of an appraisal well expected to be drilled in 2023.

Pembina Pipeline Corporation Second Quarter 2023 21

Corporate

Financial Overview for the Three Months Ended June 30

Results of Operations(1)

($ millions)	2023	2022	Change
Shared service revenue	11	—	11
General and administrative	66	65	1
Other expense (income)	1	(14)	15
Net finance costs	103	98	5
Income tax expense	94	97	(3)
Reportable segment loss before tax	(161)	(149)	(12)
Adjusted EBITDA(2)	(46)	(54)	8	Change in Results
---	---
Shared service revenue	Pertains to fixed fee income related to shared service agreements with joint ventures following the PGI Transaction. $5 million was netted against general and administrative in the second quarter of 2022.
General and administrative	Consistent with prior period. Higher consulting fees, salaries and wages, and information technology-related maintenance costs were largely offset by lower long-term incentive costs driven by Pembina's performance relative to peers, and the change in Pembina's share price in the second quarter of 2023 compared to the second quarter of 2022.
Other expense (income)	The change is primarily due to acquisition fees. In the second quarter of 2022, the acquisition fees associated with the PGI Transaction, which were previously expensed, were capitalized as it was concluded that PGI was an investment in a joint venture. Apart from this, other expenses were consistent with the prior period.
Income tax expense	Lower in the second quarter of 2023 as a result of lower earnings compared to the same period in 2022.
Reportable segment loss before tax	Decrease largely due to the change in acquisition fees, discussed above, partially offset by shared service revenue.
Adjusted EBITDA(2)	Increase largely due to the same items impacting reportable segment loss before tax, discussed above, excluding the change in acquisition fees.

(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)	2023	2022	Change
Shared service revenue	22	—	22
General and administrative	134	141	(7)
Other expense	—	3	(3)
Net finance costs	204	200	4
Income tax expense	200	249	(49)
Reportable segment loss before tax	(317)	(344)	27
Adjusted EBITDA(2)	(91)	(118)	27	Change in Results
---	---
Shared service revenue	Pertains to fixed fee income related to shared service agreements with joint ventures following the PGI Transaction. $10 million was netted against general and administrative in 2022.
General and administrative	Lower long-term incentive costs driven by the change in Pembina's share price in 2023 compared to 2022 and Pembina's performance relative to peers, partially offset by higher information technology-related maintenance costs, consulting costs, and salaries and wages.
Income tax expense	Lower in 2023 as a result of lower earnings compared to the same period in 2022.
Reportable segment loss before tax	Increase primarily due to the shared service revenue and lower long-term incentive costs, partially offset by higher information technology-related maintenance costs, consulting costs, and salaries and wages.
Adjusted EBITDA(2)	Increase largely due to the same items impacting reportable segment loss before tax, discussed above.

(1) Includes inter-segment eliminations.

(2) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

22 Pembina Pipeline Corporation Second Quarter 2023

LIQUIDITY & CAPITAL RESOURCES

Available Sources of Liquidity

($ millions)	June 30, 2023	December 31, 2022
Working capital(1)	(630)	(696)
Variable rate debt(2)
Senior unsecured credit facilities	881	771
Interest rate swapped debt	(31)	(338)
Total variable rate loans and borrowings outstanding (weighted average interest rate of 6.0% (2022: 5.9%))	850	433
Fixed rate debt(2)
Senior unsecured medium-term notes	9,100	9,200
Interest rate swapped debt	31	338
Total fixed rate loans and borrowings outstanding (weighted average interest rate of 4.0% (2022: 3.9%))	9,131	9,538
Total loans and borrowings outstanding	9,981	9,971
Cash and unutilized debt facilities	2,057	2,181
Subordinated hybrid notes (weighted average interest rate of 4.8% (2022: 4.8%))	600	600

(1) As at June 30, 2023, working capital included $650 million (December 31, 2022: $600 million) associated with the current portion of long-term debt.

(2) Face value.

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, 2022 and Note 24 to the Consolidated Financial Statements for more information. Management continues to monitor Pembina's liquidity 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 or redeem additional common or preferred shares.

As at June 30, 2023, Pembina's credit facilities consisted of: an unsecured $1.5 billion (December 31, 2022: $1.5 billion) revolving credit facility, which includes a $750 million (December 31, 2022: $750 million) accordion feature, which provides Pembina with the ability to increase the credit facility subject to lender approval, and matures in June 2028 (the "Revolving Facility"); an unsecured $1.0 billion (December 31, 2022: $1.0 billion) sustainability linked revolving credit facility, which matures in June 2027 (the "SLL Credit Facility"); an unsecured U.S. $250 million (December 31, 2022: U.S. $250 million) non-revolving term loan, which matures in May 2025; and an operating facility of $50 million (December 31, 2022: $20 million), which matures in June 2024 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.

The SLL Credit Facility contains pricing adjustments that reduce or increase borrowing costs based on Pembina's performance relative to a 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 target.

Pembina Pipeline Corporation Second Quarter 2023 23

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.

With the exception of the sustainability-linked adjustments to borrowing costs, the terms and conditions of the SLL Credit Facility and the Revolving Facility, including financial covenants, are substantially similar to each other.

Financing Activity

On May 31, 2023, Pembina completed an extension on its $1.5 billion Revolving Facility, which now matures on June 1,

2028, and an extension on its $1.0 billion SLL Credit Facility, which now matures on June 1, 2027.

On June 1, 2023, Pembina's $600 million senior unsecured medium-term notes, series 14, matured and were fully repaid.

On June 22, 2023, Pembina closed an offering of $500 million aggregate principal amount of senior unsecured medium-term notes. The offering was conducted in three tranches, consisting of the issuance of $300 million principal amount of senior unsecured medium-term notes, series 19, having a fixed coupon of 5.72 percent per annum, payable semi-annually and maturing on June 22, 2026; $100 million principal amount issued through a re-opening of Pembina's senior unsecured medium-term notes, series 5, having a fixed coupon of 3.54 percent per annum, paid semi-annually, and maturing on February 3, 2025; and $100 million principal amount issued through a re-opening of Pembina's senior unsecured medium-term notes, series 6, having a fixed coupon of 4.24 percent per annum, paid semi-annually, and maturing on June 15, 2027.

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, 2023
Senior unsecured medium-term notes	Funded Debt to Capitalization	Maximum 0.70	0.38
Credit Facilities	Debt to Capital	Maximum 0.70	0.39

(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, 2023 (December 31, 2022: 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 counterparties. Pembina assesses all high exposure 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, and such assurances may include guarantees, letters of credit and cash collateral. Letters of credit totaling $158 million (December 31, 2022: $168 million) were held as at June 30, 2023, primarily in respect of customer trade receivables.

24 Pembina Pipeline Corporation Second Quarter 2023

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 rating agencies 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 Fixed-To-Fixed Rate Subordinated Notes, Series 1 (the "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, 2022 for further information.

Contractual Obligations and Off-Balance Sheet Arrangements

Contractual Obligations

Pembina had the following contractual obligations outstanding as at June 30, 2023:

Contractual Obligations(1)	Payments Due By Period
($ millions)	Total	Less than 1 year	1 – 3 years	3 – 5 years	After 5 years
Leases(2)	870	100	172	143	455
Long-term debt(3)	16,242	1,152	1,929	3,026	10,135
Construction commitments(4)	844	314	504	26	—
Other commitments related to lease contracts(5)	473	43	81	76	273
Transportation and processing(6)	96	40	31	14	11
Funding commitments(7)	61	53	8	—	—
Software, cloud computing and other	36	13	20	2	1
Total contractual obligations	18,622	1,715	2,745	3,287	10,875

(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 nine years and involve the purchase of NGL products from producers. Assuming product is available, Pembina has secured between 11 and 184 mbpd of NGL each year up to and including 2031. Power purchase agreements range from one to 25 years and involve the purchase of power from electrical service providers. Pembina has secured up to 75 megawatts per day each year up to and including 2047.

(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. Excludes deferred financing costs.

(4)Excludes 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)Relates to expected variable lease payments excluded from the measurements of the lease liability and payments related to non-lease components in lessee lease contracts.

(6)Take-or-pay payments for minimum volumes to be transported or processed, including $16 million of contract transportation on the Alliance Pipeline.

(7)Pembina has committed to fund the construction of an asset that will connect Pembina's assets into a third-party pipeline.

Pembina Pipeline Corporation Second Quarter 2023 25

Off-Balance Sheet Arrangements

As at June 30, 2023, 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 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, 2023, Pembina had $150 million (December 31, 2022: $198 million) in letters of credit issued.

26 Pembina Pipeline Corporation Second Quarter 2023

SHARE CAPITAL

Common Shares

On March 7, 2023, 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 are cancelled. The NCIB commenced on March 10, 2023 and will terminate on March 9, 2024 or on such earlier date as the Company has purchased the maximum number of common shares permitted pursuant to 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, 2023	December 31, 2022
Number of common shares repurchased for cancellation (thousands)	1,197	7,154
Average price per share	$41.76	$46.55
Total cost(1)	50	333

(1) Total cost includes $34 million (December 31, 2022: $204 million) charged to share capital and $16 million (December 31, 2022: $129 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 Shares

On January 16, 2023, Pembina announced that it did not intend to exercise its right to redeem the ten million Cumulative Redeemable Minimum Rate Reset Class A Preferred Shares, Series 25 (the "Series 25 Class A Preferred Shares") outstanding on February 15, 2023. The annual dividend rate for the Series 25 Class A Preferred Shares for the five-year period from and including February 15, 2023 to, but excluding, February 15, 2028 is 6.481 percent.

On January 30, 2023, Pembina announced that it did not intend to exercise its right to redeem the 16 million Cumulative Redeemable Minimum Rate Reset Class A Preferred Shares, Series 21 (the "Series 21 Class A Preferred Shares") outstanding on March 1, 2023. The annual dividend rate for the Series 21 Class A Preferred Shares for the five-year period from and including March 1, 2023 to, but excluding March 1, 2028 is 6.302 percent.

On February 14, 2023, holders of an aggregate of 1,028,130 of the 16 million Series 21 Class A Preferred Shares elected to convert, on a one-for-one basis, their Series 21 Class A Preferred Shares into Cumulative Redeemable Floating Rate Class A Preferred Shares, Series 22 ("Series 22 Class A Preferred Shares"). As a result of the exercise of such conversion rights, Pembina has 14,971,870 Series 21 Class A Preferred Shares and 1,028,130 Series 22 Class A Preferred Shares issued and outstanding.The annual dividend rate applicable to the Series 22 Class A Preferred Shares for the three-month floating rate period from and including June 1, 2023, to, but excluding, September 1, 2023, is 7.710.

Pembina Pipeline Corporation Second Quarter 2023 27

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 or floating cumulative dividends. Dividends on the Series 1, 3, 5, 7, 9, 21 and 22 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 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 of Series 2021-A Class A Preferred Shares 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.

Outstanding Share Data

Issued and outstanding (thousands)(1)	July 31, 2023
Common shares	549,198
Stock options	12,007
Stock options exercisable	8,593
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	14,972
Series 22 Class A Preferred Shares	1,028
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.

28 Pembina Pipeline Corporation Second Quarter 2023

CAPITAL EXPENDITURES

	3 Months Ended June 30		6 Months Ended June 30
($ millions)	2023	2022	2023	2022
Pipelines	77	75	183	189
Facilities	33	48	53	78
Marketing & New Ventures	—	17	3	46
Corporate and other projects	13	12	21	18
Total capital expenditures(1)	123	152	260	331

(1) Includes $30 million for the three months ended June 30, 2023 (2022: $48 million) and $47 million for the six months ended June 30, 2023 (2022: $97 million) related to non-recoverable sustainment activities.

In both the second quarter and first six months of 2023 and 2022, Pipeline capital expenditures continued to be largely related to Pembina's Peace Pipeline system expansion projects and slope mitigation projects. Pipeline capital expenditures in 2023 also included the reactivation of the Nipisi Pipeline system. Facilities capital expenditures in 2023 primarily related to Redwater expansion projects. In 2022, Facilities capital expenditures were primarily related to continued expansion at the Empress Co-generation Facility. In 2022, Marketing & New Ventures capital expenditures were primarily related to the purchase of linefill for the Phase VII Peace Pipeline expansion. Corporate capital expenditures in 2023 and 2022 related mainly to information technology infrastructure and systems development.

Future capital expenditures for the remaining months of 2023 are estimated to be between $495 million and $545 million and are primarily related to the construction of the Phase VIII Peace Pipeline Expansion, investments in smaller growth projects, including various laterals and terminals, and spending on projects previously placed into service. Of the total future capital expenditure, between $85 million to $95 million is designated for non-recoverable sustaining capital to ensure safe and reliable operations.

For contributions to equity accounted investees, refer to the "Segment Results - Equity Accounted Investees Overview by Division" section of this MD&A.

Pembina Pipeline Corporation Second Quarter 2023 29

SELECTED QUARTERLY INFORMATION

Selected Quarterly Operating Information

(mboe/d)	2023		2022				2021
	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3
Volumes(1)(2)
Pipelines
Conventional Pipelines	881	900	1,024	977	937	897	959	918
Transmission Pipelines	580	594	593	577	564	621	616	595
Oil Sands Pipelines	977	973	976	977	975	975	996	1,050
Facilities
Gas Services	564	563	588	686	664	675	677	660
NGL Services	185	158	211	207	204	201	189	188
Total	3,187	3,188	3,392	3,424	3,344	3,369	3,437	3,411
Marketing & New Ventures
Marketed NGL	163	194	193	184	176	206	193	177

(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.

Take-or-pay Contract Liabilities

($ millions)	2023		2022				2021
	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3
Opening balance	26	3	15	27	25	3	21	35
Revenue deferred	51	49	48	55	51	48	43	48
Revenue recognized	(37)	(26)	(60)	(68)	(46)	(26)	(61)	(62)
Transfers to liabilities related to assets held for sale	—	—	—	3	(3)	—	—	—
Disposition	—	—	—	(2)	—	—	—	—
Ending take-or-pay contract liability balance	40	26	3	15	27	25	3	21

30 Pembina Pipeline Corporation Second Quarter 2023

Quarterly Financial Information

($ millions, except where noted)	2023		2022				2021
	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3
Revenue	2,070	2,297	2,699	2,779	3,095	3,038	2,560	2,149
Net revenue(1)	858	946	1,043	1,030	1,020	1,154	1,084	961
Operating expenses	189	200	240	225	211	193	206	187
Realized (gain) loss on commodity-related derivative financial instruments	(14)	(24)	(10)	19	49	47	36	43
Share of profit from equity accounted investees	97	82	79	123	74	85	83	75
Gross profit	659	672	681	874	711	857	785	682
Adjusted EBITDA(1)	823	947	925	967	849	1,005	970	850
Earnings	363	369	243	1,829	418	481	80	588
Earnings per common share – basic (dollars)	0.60	0.61	0.39	3.24	0.70	0.81	0.08	1.01
Earnings per common share – diluted (dollars)	0.60	0.61	0.39	3.23	0.69	0.81	0.08	1.01
Cash flow from operating activities	653	458	947	723	604	655	697	913
Cash flow from operating activities per common share – basic (dollars)	1.19	0.83	1.72	1.30	1.09	1.19	1.27	1.66
Adjusted cash flow from operating activities(1)	606	634	690	588	683	700	734	786
Adjusted cash flow from operating activities per common share – basic (dollars)(1)	1.10	1.15	1.25	1.07	1.23	1.27	1.33	1.43
Common shares outstanding (millions):
Weighted average – basic	550	550	551	554	554	551	550	550
Weighted average – diluted	551	551	553	556	557	552	551	551
End of period	549	550	550	552	555	552	550	550
Common share dividends declared	367	359	359	354	349	347	346	347
Dividends per common share	0.67	0.65	0.65	0.64	0.63	0.63	0.63	0.63
Preferred share dividends declared	31	28	32	31	32	31	33	31
Capital expenditures	123	137	143	131	152	179	176	209
Contributions to equity accounted investees	11	38	46	24	6	19	305	18
Distributions from equity accounted investees	191	199	235	138	145	155	128	106

(1) Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

During the periods highlighted in the table above, there were new large-scale growth projects across Pembina's business being placed into service. The company's financial and operating results have also been impacted by the volatility of commodity market prices, fluctuations in foreign exchange rates, and inflation. In addition to these factors, several other notable elements have impacted Pembina's financial and operating results during the specified periods above, including:

•the receipt and associated tax of the $350 million payment received from the termination of the arrangement agreement with Inter Pipeline Ltd. in the third quarter of 2021;

•higher contributions made to Alliance to redeem all of its issued and outstanding senior notes in 2021;

•impairments recognized on certain assets in Pipelines as a result of contract expirations in the fourth quarter of 2021;

•the completion of the PGI Transaction, which resulted in a gain recognized by Pembina of $1.1 billion in the third quarter of 2022 and other impacts to Pembina's earnings;

•the Ruby Settlement Agreement in the fourth quarter of 2022 with Ruby Pipeline, L.L.C. (the "Ruby Subsidiary") which provided for the payment in January 2023 from Pembina to the Ruby Subsidiary of U.S. $102 million in exchange for the release of Pembina from any causes of action arising in connection with, among other things, the prepetition distributions and the Ruby Subsidiary Bankruptcy (as defined below); and

•the Northern Pipeline system outage in the first and second quarter of 2023 and the Wildfires in the second quarter of 2023.

Pembina Pipeline Corporation Second Quarter 2023 31

Selected Quarterly Market Pricing

	2023		2022				2021
($ average)	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3
WTI (USD/bbl)	73.78	76.13	82.64	91.56	108.41	94.29	77.19	70.50
FX (USD/CAD)	1.34	1.35	1.36	1.31	1.28	1.27	1.26	1.25
AECO Natural Gas (CAD/GJ)	2.22	4.12	5.29	5.50	5.95	4.35	4.68	3.15
Station 2 Natural Gas (CAD/GJ)	1.79	2.74	3.06	2.94	6.45	4.46	3.51	3.22
Chicago Citygate Natural Gas (USD/mmbtu)	1.99	4.32	5.86	7.86	6.97	5.74	5.87	3.40
Mt Belvieu Propane (USD/gal)	0.68	0.82	0.80	1.08	1.25	1.31	1.25	1.06
Alberta Power Pool (CAD/MWh)	159.87	141.42	213.64	221.90	122.49	90.47	107.23	100.27
Pembina 20-day volume-weighted average share price	41.57	43.63	46.26	44.99	47.97	46.57	37.99	39.77

32 Pembina Pipeline Corporation Second Quarter 2023

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, 2023. 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, 2023	December 31, 2022
Pipelines(2)	346	672
Facilities(3)	2,400	2,694
Marketing & New Ventures	—	—
Total	2,746	3,366

(1) Balances reflect Pembina's ownership percentage of the outstanding balance face value.

(2) Balance at December 31, 2022 includes $322 million of loans and borrowings associated with Ruby, which were extinguished upon the completion of the sale of Ruby

on January 13, 2023. Refer to "Financing Activities for Equity Accounted Investees" section below for further details.

(3) December 31, 2022 balance includes $330 million, Pembina's ownership share of $550 million of loans and borrowings on a PGI credit facility funding the construction of the Key Access Pipeline System ("KAPS") project, which was fully repaid upon the closing of the sale of KAPS on April 26, 2023.

Financing Activities for Equity Accounted Investees

The Ruby Subsidiary had U.S. $475 million principal amount (100 percent gross) of unsecured notes that matured on April 1, 2022 (the "2022 Notes"). On March 31, 2022, the Ruby Subsidiary 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 "Ruby Subsidiary Bankruptcy") as it lacked sufficient liquidity to satisfy its obligations under the 2022 Notes on the maturity date. On November 18, 2022, Pembina and certain of its subsidiaries entered into the Ruby Settlement Agreement with the Ruby Subsidiary which provided for the release of Pembina from any causes of action arising in connection with, among other things, the prepetition distributions and the Ruby Subsidiary Bankruptcy in exchange for a U.S. $102 million payment by Pembina to the Ruby Subsidiary. In January 2023, the United States Bankruptcy Court for the District of Delaware approved the Ruby Subsidiary's Chapter 11 plan of reorganization (the "Ruby Subsidiary Plan") and the Ruby Settlement Agreement. The Ruby Subsidiary Plan provided for the sale of the Ruby Subsidiary's reorganized equity to a third-party, which sale was completed on January 13, 2023, and the distribution of the sales proceeds and cash on hand of the Ruby Subsidiary to the creditors of the Ruby Subsidiary, including approximately U.S. $14 million to an affiliate of Pembina in respect of the subordinated notes issued by the Ruby Subsidiary to that Pembina affiliate. Following the completion of the sale of the Ruby Subsidiary's reorganized equity, Pembina ceased to have any ownership interest in the Ruby Pipeline.

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, 2023, Pembina's various equity accounted investees held letters of credit totaling $60 million (December 31, 2022: $75 million) primarily in respect of customer trade receivables.

Pembina Pipeline Corporation Second Quarter 2023 33

OTHER

Related Party Transactions

Pembina enters into transactions with related parties in the normal course of business and all transactions are measured at their exchange amount, unless otherwise noted. Pembina contracts capacity from certain of its equity accounted investees, advances funds to support operations, provides letters of credit, including financial guarantees, and provides services, on a fixed fee and cost recovery basis, to certain equity accounted investees. These services are provided under separate service agreements.

PGI

Pembina provides management services to PGI for a fixed fee of $52 million per year, which is included in shared service revenue. Pembina also bills PGI for services provided on a cost recovery basis and for payments made by Pembina, on behalf of PGI, to third parties. Services provided to PGI for the three and six months ended June 30, 2023 totaled $65 million and $128 million (2022: nil for the three and six months ended June 30), respectively. PGI provides Pembina with extraction services under long-term fee-for-service arrangements, with total services received by Pembina from PGI for the three and six months ended June 30, 2023 of $1 million and $8 million (2022: nil for the three and six months ended June 30), respectively. As at June 30, 2023, trade receivables and other includes $33 million due from PGI (December 31, 2022: $41 million).

Ruby

During the first quarter of 2023, Pembina settled an advance due from Ruby for U.S. $14 million as well as a provision payable to Ruby for U.S. $102 million, both of which are related to the Ruby Subsidiary Bankruptcy. See "Selected Equity Accounted Investee Information – Financing Activities for Equity Accounted Investees" for further information.

Aux Sable

Pembina operates and provides oversight for the facilities owned by Aux Sable. As the operating partner, Pembina recovers operating costs, and other costs on a cost recovery basis. Total services provided by Pembina to Aux Sable for the three and six months ended June 30, 2023 totaled $35 million and $65 million (2022: $25 million and $49 million), respectively.

Alliance

Pembina provides management services to Alliance for a fixed fee of $11 million per year (2022: $11 million), which is included in shared service revenue, and also provides services to Alliance on a cost recovery basis.

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 business and, as at June 30, 2023, the Company has entered into certain financial derivative contracts in order to manage commodity price, interest rate, cost of power and foreign exchange risk. Pembina has also entered into power purchase agreements to secure cost-competitive renewable energy, fix the price for a portion of the power Pembina consumes, and reduce its emissions. For more information on Pembina's derivative instruments, refer to Note 12 to the Interim Financial Statements.

34 Pembina Pipeline Corporation Second Quarter 2023

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 Senior Vice President and 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 2023 that had or are likely to have a material impact on Pembina's ICFR.

Pembina Pipeline Corporation Second Quarter 2023 35

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 other new accounting standards or amendments to existing standards adopted in the six months ended June 30, 2023 that have a material impact on Pembina's financial statements.

IFRS 17 Insurance Contracts

The Company adopted IFRS 17 Insurance Contracts effective January 1, 2023. IFRS 17 establishes principles for the recognition, measurement, presentation, and disclosure of insurance contracts. IFRS 17 has been applied using a full retrospective approach and as a result, the Company has restated certain comparative amounts. Refer to Note 2 of the Interim Financial Statements for further information.

Pembina's insurance contracts are comprised of a parental guarantee and letters of credit that it provides to the Company's joint venture, Cedar LNG. Under the contracts, Pembina will reimburse Cedar LNG's counterparties in the event that Cedar LNG is unable to pay its obligations when due. Pembina does not receive premiums from the joint venture or the counterparty for providing the insurance contract, and as a result the contracts are considered onerous. On initial recognition or when the contract is modified, Pembina recognizes the cost of providing the contract on behalf of the joint venture as an in-substance contribution to the joint venture. All other changes to the insurance liability are recognized in earnings.

Pembina applies judgments to determine the future probability and expected cashflows related to its insurance contracts. These judgments include assessing different scenarios for the likelihood that the Cedar LNG project will reach a positive final investment decision ("FID") and assessing the potential cash outflows that Pembina would be required to make under the different scenarios. A risk adjustment is then applied to the probability weighted cash outflows for the non-financial risks inherent in the scenarios, and the credit-adjusted discount rate is used to incorporate the financial risks of non-performance.

Amendments to IAS 1 – Disclosure of Accounting Policies

The Company adopted Amendments to IAS 1 Disclosure of Accounting Policies effective January 1, 2023. The amendments replace the requirement to disclose 'significant' accounting policies with a requirement to disclose 'material' accounting policies and establish guidance on how to apply the concept of materiality in determining material accounting policy disclosures.

The amendments had no impact on the policies disclosed in the Interim Financial Statements; rather, they will increase the emphasis on the material policies in the annual consolidated financial statements.

Critical Accounting Judgments & Estimates

Critical accounting judgments and estimates used in preparing the Interim Financial Statements are described in Note 2 of the 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, 2023.

36 Pembina Pipeline Corporation Second Quarter 2023

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, earnings before interest, taxes, depreciation, and amortization ("adjusted EBITDA"), adjusted EBITDA per common share, adjusted EBITDA from equity accounted investees, 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 Pembina's financial statements is revenue.

3 Months Ended June 30		Facilities		Marketing & <br>New Ventures		Corporate & <br>Inter-segment Eliminations		Total
( millions)
	2022	2023	2022	2023	2022	2023	2022	2023	2022
Revenue	604	220	360	1,357	2,300	(115)	(169)	2,070	3,095
Cost of goods sold, including product purchases	—	—	2	1,277	2,157	(65)	(84)	1,212	2,075
Net revenue	604	220	358	80	143	(50)	(85)	858	1,020

All values are in US Dollars.

Pembina Pipeline Corporation Second Quarter 2023 37

6 Months Ended June 30		Facilities		Marketing & <br>New Ventures		Corporate & <br>Inter-segment Eliminations		Total
( millions)
	2022	2023	2022	2023	2022	2023	2022	2023	2022
Revenue	1,177	428	717	2,915	4,571	(212)	(332)	4,367	6,133
Cost of goods sold, including product purchases	—	—	2	2,686	4,124	(123)	(167)	2,563	3,959
Net revenue	1,177	428	715	229	447	(89)	(165)	1,804	2,174

All values are in US Dollars.

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. 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 Pembina'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 Pembina, 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 ratio which is calculated by dividing adjusted EBITDA by the weighted average number of common shares outstanding.

3 Months Ended June 30		Facilities		Marketing & <br>New Ventures		Corporate & <br>Inter-segment Eliminations		Total
( millions, except per share amounts)
	2022	2023	2022	2023	2022	2023	2022	2023	2022
Earnings before income tax	382	153	147	115	135	(161)	(149)	457	515
Adjustments to share of profit from equity accounted investees and other	38	76	34	8	31	—	—	125	103
Net finance costs (income)	8	2	7	(4)	11	103	98	109	124
Depreciation and amortization	96	41	80	11	11	12	11	166	198
Unrealized (gain) loss on commodity-related derivative financial instruments	—	—	9	(34)	(74)	—	—	(34)	(65)
Transaction costs incurred in respect of acquisitions	—	—	—	—	—	—	(12)	—	(12)
Impairment charges, transformation and restructuring costs, contract dispute settlement, gain on disposal of assets and non-cash provisions	(1)	—	—	—	(11)	—	(2)	—	(14)
Adjusted EBITDA	523	272	277	96	103	(46)	(54)	823	849
Adjusted EBITDA per common share – basic (dollars)								1.50	1.53

All values are in US Dollars.

38 Pembina Pipeline Corporation Second Quarter 2023

6 Months Ended June 30		Facilities		Marketing & <br>New Ventures		Corporate & <br>Inter-segment Eliminations		Total
( millions, except per share amounts)
	2022	2023	2022	2023	2022	2023	2022	2023	2022
Earnings before income tax	743	288	397	235	352	(317)	(344)	932	1,148
Adjustments to share of profit from equity accounted investees and other	91	203	68	13	37	—	—	301	196
Net finance costs (income)	15	4	9	(3)	9	204	200	220	233
Depreciation and amortization	195	75	135	23	22	22	23	321	375
Unrealized gain on commodity-related derivative financial instruments	—	—	(51)	—	(39)	—	—	—	(90)
Impairment charges, transformation and restructuring costs, contract dispute settlement, gain on disposal of assets and non-cash provisions	—	—	—	(3)	(11)	—	3	(4)	(8)
Adjusted EBITDA	1,044	570	558	265	370	(91)	(118)	1,770	1,854
Adjusted EBITDA per common share – basic (dollars)								3.22	3.36

All values are in US Dollars.

Adjusted EBITDA from Equity Accounted Investees

In accordance with IFRS, Pembina's joint ventures 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		Facilities		Marketing & <br>New Ventures
( millions)
	2022	2023	2022	2023	2022	2023	2022
Share of profit from equity accounted investees	48	69	20	8	6	97	74
Adjustments to share of profit from equity accounted investees:
Net finance costs (income)	3	1	11	—	(1)	6	13
Income tax expense	—	21	—	—	—	21	—
Depreciation and amortization	35	41	23	8	6	85	64
Unrealized loss on commodity-related derivative financial instruments	—	9	—	—	26	9	26
Transaction costs incurred in respect of acquisitions	—	4	—	—	—	4	—
Total adjustments to share of profit from equity accounted investees	38	76	34	8	31	125	103
Adjusted EBITDA from equity accounted investees	86	145	54	16	37	222	177

All values are in US Dollars.

Pembina Pipeline Corporation Second Quarter 2023 39

6 Months Ended June 30		Facilities		Marketing & <br>New Ventures
( millions)
	2022	2023	2022	2023	2022	2023	2022
Share of profit from equity accounted investees	88	117	44	7	27	179	159
Adjustments to share of profit from equity accounted investees:
Net finance costs (income)	16	54	19	—	(1)	64	34
Income tax expense	—	34	—	—	—	35	—
Depreciation and amortization	75	96	49	13	12	183	136
Unrealized loss on commodity-related derivative financial instruments	—	9	—	—	26	9	26
Transaction costs incurred in respect of acquisitions and non-cash provisions	—	10	—	—	—	10	—
Total adjustments to share of profit from equity accounted investees	91	203	68	13	37	301	196
Adjusted EBITDA from equity accounted investees	179	320	112	20	64	480	355

All values are in US Dollars.

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 payments, 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 expense and accrued share-based payment expense 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)	2023	2022	2023	2022
Cash flow from operating activities	653	604	1,111	1,259
Cash flow from operating activities per common share – basic (dollars)	1.19	1.09	2.02	2.28
Add (deduct):
Change in non-cash operating working capital	(11)	103	188	142
Current tax expense	(78)	(54)	(177)	(175)
Taxes paid, net of foreign exchange	66	86	113	238
Accrued share-based payment expense	7	(24)	(13)	(63)
Share-based compensation payment	—	—	77	45
Preferred share dividends paid	(31)	(32)	(59)	(63)
Adjusted cash flow from operating activities	606	683	1,240	1,383
Adjusted cash flow from operating activities per common share – basic (dollars)	1.10	1.23	2.25	2.50

40 Pembina Pipeline Corporation Second Quarter 2023

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 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, and also include revenue volumes from Pembina's equity accounted investees.		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	BCER	British Columbia Energy Regulator
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

Pembina Pipeline Corporation Second Quarter 2023 41

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. On January 13, 2023, pursuant to the Ruby Subsidiary Plan, Ruby Pipeline Holding Company L.L.C sold its equity interest in the Ruby Subsidiary. As a result, Pembina ceased to have an interest in the Ruby Pipeline.
Grand Valley	75 percent interest in Grand Valley 1 Limited Partnership wind farm
Facilities:
PGI	60 percent interest in Pembina Gas Infrastructure Inc., a premier gas processing entity in Western Canada serving customers throughout the Montney and Duvernay trends from central Alberta to northeast British Columbia
Veresen Midstream	Prior to August 15, 2022, Pembina owned a 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. On August 15, 2022, Pembina contributed its equity interest in Veresen Midstream to PGI, resulting in Pembina holding a 60 percent interest indirectly through its investment in PGI.
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, and transportation contracts on Alliance
CKPC	50 percent interest in Canada Kuwait Petrochemical Corporation and the PDH/PP Facility which was cancelled in the third quarter of 2022
Cedar LNG	49.9 percent interest in Cedar LNG Partners LP and the proposed floating LNG facility in Kitimat, British Columbia, Canada

Readers are referred to the AIF for the year ended December 31, 2022 for additional descriptions, which is available at www.sedar.com, www.sec.gov and through Pembina’s website at www.pembina.com.

42 Pembina Pipeline Corporation Second Quarter 2023

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;

•planning, construction, locations, capital expenditure estimates, schedules, regulatory and environmental applications and anticipated approvals, expected capacity, incremental volumes, contractual arrangements, 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;

•treatment under existing and proposed governmental regulatory regimes, including taxes, 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 and ICFR;

•operating risks, including the amount of future liabilities related to pipelines spills and other environmental incidents;

•management's belief regarding certain claims against Pembina;

•the expected demand for, and prices and inventory levels of, crude oil and other petroleum products, including NGL;

•the development and anticipated benefits of Pembina's new projects and developments, including the Phase VIII Peace Pipeline Expansion, RFS IV, the Cedar LNG project and the ACG, including the timing thereof; 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, exchange rates and inflation rates;

•the ability of Pembina to maintain current credit ratings;

•the availability and cost of capital to fund future capital requirements relating to existing assets, projects and the repayment of refinancing existing debt as it becomes due;

•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 Pembina's 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 there are no supply chain disruptions impacting Pembina's ability to obtain required equipment, materials or labour; 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 attractive 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; 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; current operations or the repayment or refinancing of existing debt as it becomes due;

•prevailing regulatory, tax and environmental 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;

•reliance on third parties to successfully operate and maintain certain assets;

•labour and material shortages;

•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;

•actions by governmental or regulatory authorities including changes in tax laws and treatment, changes in royalty rates, changes in regulatory processes or increased environmental regulation;

•fluctuations in operating results;

•adverse general economic and market conditions, including potential recessions in Canada, North America and worldwide, resulting in changes, or prolonged weaknesses, as applicable, in interest rates, foreign currency exchange rates, inflation rates, commodity prices, supply/demand trends and overall industry activity levels;

•constraints on, or the unavailability of adequate infrastructure;

•the political environment in North America and elsewhere, and public opinion;

•ability to access various sources of debt and equity capital on acceptable terms;

•adverse changes in credit ratings;

•counterparty credit risk;

•technology and security risks, including cyber-security risks;

•natural catastrophes; and

•the other factors discussed under "Risk Factors" in Pembina's MD&A and AIF for the year ended December 31, 2022, 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. Management approved the 2023 capital expenditure guidance contained herein as of the date of MD&A. The purpose of the 2023 capital expenditure guidance is to assist readers in understanding Pembina's expected future capital expenditures, and this information may not be appropriate for other purposes. Any forward-looking statements contained herein are expressly qualified by this cautionary statement.

Pembina Pipeline Corporation Second Quarter 2023 43

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

(unaudited)

($ millions)	June 30, 2023	December 31, 2022
Assets <br>Current assets
Cash and cash equivalents	57	94
Trade receivables and other	715	912
Inventory	154	269
Derivative financial instruments (Note 12)	90	87
	1,016	1,362
Non-current assets
Property, plant and equipment (Note 4)	15,517	15,518
Intangible assets and goodwill	6,087	6,131
Investments in equity accounted investees (Note 5)	7,162	7,382
Right-of-use assets	524	518
Finance lease receivables	197	219
Deferred tax assets	225	261
Derivative financial instruments (Note 12)	36	42
Other assets	50	54
	29,798	30,125
Total assets	30,814	31,487
Liabilities and equity<br>Current liabilities
Trade payables and other	807	1,266
Loans and borrowings (Note 6)	650	600
Lease liabilities	75	79
Contract liabilities (Note 8)	82	56
Derivative financial instruments (Note 12)	32	57
	1,646	2,058
Non-current liabilities
Loans and borrowings (Note 6)	9,356	9,405
Subordinated hybrid notes (Note 6)	595	595
Lease liabilities	575	596
Decommissioning provision	303	259
Contract liabilities (Note 8)	133	138
Deferred tax liabilities	2,502	2,507
Other liabilities	110	140
	13,574	13,640
Total liabilities	15,220	15,698
Equity
Attributable to shareholders	15,534	15,729
Attributable to non-controlling interest	60	60
Total equity	15,594	15,789
Total liabilities and equity	30,814	31,487

See accompanying notes to the condensed consolidated interim financial statements

44 Pembina Pipeline Corporation Second Quarter 2023

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)	2023	2022	2023	2022
Revenue (Note 8)	2,070	3,095	4,367	6,133
Cost of sales (Note 9)	1,556	2,474	3,253	4,718
(Gain) loss on commodity-related derivative financial instruments (Note 12)	(48)	(16)	(38)	6
Share of profit from equity accounted investees (Note 5)	97	74	179	159
Gross profit	659	711	1,331	1,568
General and administrative	84	90	176	197
Other expense (income)	9	(18)	3	(10)
Results from operating activities	566	639	1,152	1,381
Net finance costs (Note 10)	109	124	220	233
Earnings before income tax	457	515	932	1,148
Current tax expense	78	54	177	175
Deferred tax expense	16	43	23	74
Income tax expense	94	97	200	249
Earnings	363	418	732	899
Other comprehensive (loss) income, net of tax (Note 11 & 12)
Exchange (loss) gain on translation of foreign operations	(83)	116	(94)	70
Impact of hedging activities	7	(8)	3	8
Other comprehensive (loss) income, net of tax	(76)	108	(91)	78
Total comprehensive income attributable to shareholders	287	526	641	977
Earnings attributable to common shareholders, net of preferred share dividends	328	385	667	832
Earnings per common share – basic (dollars)	0.60	0.70	1.21	1.51
Earnings per common share – diluted (dollars)	0.60	0.69	1.21	1.50
Weighted average number of common shares (millions)
Basic	550	554	550	552
Diluted	551	557	551	555

See accompanying notes to the condensed consolidated interim financial statements

Pembina Pipeline Corporation Second Quarter 2023 45

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, 2022	15,793	2,208	(2,613)	341	15,729	60	15,789
Total comprehensive income (loss)
Earnings	—	—	732	—	732	—	732
Other comprehensive loss (Note 11)	—	—	—	(91)	(91)	—	(91)
Total comprehensive income (loss)	—	—	732	(91)	641	—	641
Transactions with shareholders of the Company (Note 7)
Part VI.1 tax on preferred shares	—	(5)	—	—	(5)	—	(5)
Repurchase of common shares	(34)	—	(16)	—	(50)	—	(50)
Share-based payment transactions	4	—	—	—	4	—	4
Dividends declared – common	—	—	(726)	—	(726)	—	(726)
Dividends declared – preferred	—	—	(59)	—	(59)	—	(59)
Total transactions with shareholders of the Company	(30)	(5)	(801)	—	(836)	—	(836)
June 30, 2023	15,763	2,203	(2,682)	250	15,534	60	15,594
December 31, 2021	15,678	2,517	(3,920)	28	14,303	60	14,363
Total comprehensive income (loss)
Earnings	—	—	899	—	899	—	899
Other comprehensive income	—	—	—	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

(1) Accumulated Other Comprehensive Income (loss) ("AOCI").

See accompanying notes to the condensed consolidated interim financial statements

46 Pembina Pipeline Corporation Second Quarter 2023

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

(unaudited)

	3 Months Ended June 30		6 Months Ended June 30
($ millions)	2023	2022	2023	2022
Cash provided by (used in)
Operating activities
Earnings	363	418	732	899
Adjustments for items not involving cash:
Share of profit from equity accounted investees	(97)	(74)	(179)	(159)
Depreciation and amortization	166	198	321	375
Unrealized gain on commodity-related derivative financial instruments	(34)	(65)	—	(90)
Net finance costs	109	124	220	233
Share-based compensation expense	(6)	25	15	72
Income tax expense	94	97	200	249
Cash items paid or received:
Distributions from equity accounted investees	191	145	390	300
Net interest paid	(97)	(100)	(223)	(219)
Share-based compensation payment	—	—	(77)	(45)
Taxes paid	(66)	(86)	(113)	(238)
Change in non-cash operating working capital	11	(103)	(188)	(142)
Net change in contract liabilities	23	34	23	40
Other	(4)	(9)	(10)	(16)
Cash flow from operating activities	653	604	1,111	1,259
Financing activities
Net increase in bank borrowings	16	105	117	21
Proceeds from issuance of long-term debt, net of issue costs	491	—	491	—
Repayment of long-term debt	(600)	(75)	(600)	(125)
Repayment of lease liability	(20)	(22)	(40)	(45)
Exercise of stock options	1	205	1	302
Repurchase of common shares	(50)	(66)	(50)	(94)
Common share dividends paid	(367)	(349)	(726)	(696)
Preferred share dividends paid	(31)	(32)	(59)	(63)
Cash flow used in financing activities	(560)	(234)	(866)	(700)
Investing activities
Capital expenditures	(123)	(152)	(260)	(331)
Contributions to equity accounted investees	(11)	(6)	(49)	(25)
Proceeds from sale of assets	—	25	15	25
Receipt of finance lease payments	3	3	7	6
Interest paid during construction	(3)	(7)	(6)	(15)
Return of capital from equity accounted investees	26	—	26	—
Changes in non-cash investing working capital and other	(20)	(47)	(13)	(48)
Cash flow used in investing activities	(128)	(184)	(280)	(388)
Change in cash and cash equivalents	(35)	186	(35)	171
Cash transferred to assets held for sale	—	(147)	—	(147)
Effect of movement in exchange rates on cash held	(1)	4	(2)	4
Cash and cash equivalents, beginning of period	106	28	107	43
Cash and cash equivalents, end of period	70	71	70	71
Long-term restricted cash included in other assets	13	—	13	—
Short-term cash and cash equivalents, end of period	57	71	57	71

See accompanying notes to the condensed consolidated interim financial statements

Pembina Pipeline Corporation Second Quarter 2023 47

NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS

REPORTING ENTITY

Pembina Pipeline Corporation ("Pembina" or the "Company") is a Calgary-based, leading transportation and midstream service provider serving North America's energy industry. 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, 2023.

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 an 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"), other than as described in Note 2, are consistent with the audited annual consolidated financial statements of the Company as at and for the year ended December 31, 2022 ("Consolidated Financial Statements"), 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 3, 2023.

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, 2023.

48 Pembina Pipeline Corporation Second Quarter 2023

CHANGES IN ACCOUNTING POLICIES

IFRS 17 Insurance Contracts

As a result of the initial adoption, Pembina's consolidated statement of financial position as at December 31, 2022, was restated to include an additional $12 million in investments in equity accounted investees and trade payables and other. As at June 30, 2023, trade payables and other related to insurance contracts was $20 million.

Amendments to IAS 1 – Disclosure of Accounting Policies

DETERMINATION OF FAIR VALUES

Several of Pembina'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.

Pembina Pipeline Corporation Second Quarter 2023 49

PROPERTY, PLANT AND EQUIPMENT

($ millions)	Land and<br><br>Land Rights	Pipelines	Facilities and<br><br>Equipment	Cavern Storage and Other	Assets Under Construction	Total
Cost
Balance at December 31, 2022	481	9,495	6,949	2,014	367	19,306
Additions and transfers	—	86	34	13	112	245
Change in decommissioning provision	—	3	17	5	—	25
Foreign exchange and other	(2)	(27)	(11)	(15)	—	(55)
Balance at June 30, 2023	479	9,557	6,989	2,017	479	19,521
Depreciation
Balance at December 31, 2022	32	2,087	1,185	484	—	3,788
Depreciation	3	97	88	37	—	225
Other	—	(6)	(2)	(1)	—	(9)
Balance at June 30, 2023	35	2,178	1,271	520	—	4,004
Carrying amounts
Balance at December 31, 2022	449	7,408	5,764	1,530	367	15,518
Balance at June 30, 2023	444	7,379	5,718	1,497	479	15,517

50 Pembina Pipeline Corporation Second Quarter 2023

INVESTMENTS IN EQUITY ACCOUNTED INVESTEES

	Ownership Interest (percent)		Share of Profit from Equity Accounted Investees		Investments in Equity Accounted Investees

( millions)	June 30, 2023	December 31, 2022	2023	2022	June 30, 2023	December 31, 2022
Alliance	50	50	54	85	2,500	2,609
Aux Sable	42.7 - 50	42.7 - 50	12	32	343	360
Veresen Midstream(1)	—	—	—	39	—	—
PGI	60	60	113	—	4,051	4,158
Cedar LNG(2)	49.9	49.9	—	—	178	167
Other(3)	50 - 75	50 - 75	—	3	90	88
			179	159	7,162	7,382

All values are in US Dollars.

(1) Pembina owned a 45 percent interest in Veresen Midstream up to the closing of the PGI Transaction (as defined below) on August 15, 2022. As part of the transaction, Pembina contributed its 45 percent interest in Veresen Midstream to PGI.

(2) The Investment in equity accounted investees balance as at December 31, 2022 has been restated to include an additional $12 million related to the initial adoption of IFRS 17 Insurance Contracts. Refer to Note 2 for further information.

(3) Other includes Pembina's interest in Ruby, CKPC, Grand Valley and Fort Corp. Pembina owned a 50 percent convertible, cumulative preferred interest in Ruby which it sold on January 13, 2023. Refer to "Financing Activities for Equity Accounted Investees" section below for further details on Ruby.

At June 30, 2023, Pembina had U.S. $1.2 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, 2023, Pembina recognized a loss of $33 million and $36 million (2022: gain of $48 million and $29 million), respectively.

PGI Acquisition

On August 15, 2022, Pembina acquired a 60 percent equity interest in PGI, a newly formed joint venture that is jointly controlled by Pembina and KKR (the "PGI Transaction"). Pembina serves as PGI's operator and manager.

The cost of Pembina's 60 percent interest in PGI was allocated to PGI's identifiable net assets based on fair values on the acquisition date, including adjustments identified during the six months ended June 30, 2023 resulting from PGI's assessment of acquired revenue contracts and associated deferred tax impacts as follows:

As at August 15, 2022	Previously reported	Adjustments	Updated
($ millions)	in Q4 2022
Current assets	641	(6)	635
Non-current assets	6,641	19	6,660
Current liabilities	1,164	(2)	1,162
Non-current liabilities	2,834	16	2,850
Allocated to PGI assets and liabilities	3,284	(1)	3,283
Goodwill	899	1	900
Pembina's cost of investment in PGI	4,183	—	4,183

During the second quarter of 2023, pursuant to an agreement with the Competition Bureau, and consistent with Pembina's and KKR's intention to divest upon announcing the PGI Transaction, a subsidiary of PGI completed the sale of its 50 percent non-operated interest in the Key Access Pipeline System ("KAPS") which was contributed to PGI as part of the transaction. The majority of proceeds from the sale were used to reduce debt at PGI, with $26 million distributed to Pembina as a return of capital.

Pembina Pipeline Corporation Second Quarter 2023 51

Financing Activities for Equity Accounted Investees

Ruby

In January 2023, the United States Bankruptcy Court for the District of Delaware approved the Ruby Subsidiary's Chapter 11 plan of reorganization (the "Ruby Subsidiary Plan") and the Ruby Settlement Agreement. The Ruby Subsidiary Plan provided for the sale of the Ruby Subsidiary's reorganized equity to a third-party, which sale was completed on January 13, 2023, and the distribution of the sales proceeds and cash on hand of the Ruby Subsidiary to the creditors of the Ruby Subsidiary, including approximately U.S. $14 million to an affiliate of Pembina in respect of the subordinated notes issued by the Ruby Subsidiary to that Pembina affiliate. Following the completion of the sale of the Ruby Subsidiary's reorganized equity, Pembina ceased to have any ownership interest in the Ruby Pipeline.

Cedar LNG

Under Pembina's insurance contracts issued in support of the Cedar LNG project, Pembina is obligated to reimburse the costs incurred by certain of Cedar LNG's counterparties if, and only if, Cedar LNG fails to satisfy its obligations under its contracts with those counterparties. Pembina has an aggregate maximum exposure under these issued insurance contracts of $90 million, although any payment, if required, would be capped at the amount of costs actually incurred by the counterparty. Refer to Note 2 for further information on Pembina's insurance contracts provided to Cedar LNG.

52 Pembina Pipeline Corporation Second Quarter 2023

LONG-TERM DEBT

This note provides information about the contractual terms of Pembina's interest-bearing long-term debt, which is measured at amortized cost.

Carrying Value, Terms and Conditions, and Debt Maturity Schedule

($ millions)	Authorized at June 30, 2023	Nominal Interest Rate	Year of Maturity	June 30, 2023	December 31, 2022
Variable rate debt(1)
Senior unsecured credit facilities(2)(3)(4)	2,881	6.33(5)	Various(2)	881	771
Fixed rate debt(1)
Senior unsecured medium-term notes series 3	450	4.75	2043	450	450
Senior unsecured medium-term notes series 4	600	4.81	2044	600	600
Senior unsecured medium-term notes series 5	550	3.54	2025	550	450
Senior unsecured medium-term notes series 6	600	4.24	2027	600	500
Senior unsecured medium-term notes series 7	600	3.71	2026	600	600
Senior unsecured medium-term notes series 8	650	2.99	2024	650	650
Senior unsecured medium-term notes series 9	550	4.74	2047	550	550
Senior unsecured medium-term notes series 10	650	4.02	2028	650	650
Senior unsecured medium-term notes series 11	800	4.75	2048	800	800
Senior unsecured medium-term notes series 12	650	3.62	2029	650	650
Senior unsecured medium-term notes series 13	700	4.54	2049	700	700
Senior unsecured medium-term notes series 14	—	2.56	2023	—	600
Senior unsecured medium-term notes series 15	600	3.31	2030	600	600
Senior unsecured medium-term notes series 16	400	4.67	2050	400	400
Senior unsecured medium-term notes series 17	500	3.53	2031	500	500
Senior unsecured medium-term notes series 18	500	4.49	2051	500	500
Senior unsecured medium-term notes series 19	300	5.72	2026	300	—
Total fixed rate loans and borrowings outstanding				9,100	9,200
Deferred financing costs				25	34
Total loans and borrowings				10,006	10,005
Less current portion loans and borrowings				(650)	(600)
Total non-current loans and borrowings				9,356	9,405
Subordinated hybrid notes
Subordinated notes, series 1	600	4.80	2081	595	595

(1) Face value.

(2) Pembina's unsecured credit facilities include a $1.5 billion revolving facility that matures in June 2028, a $1.0 billion sustainability linked revolving facility that matures in June 2027, a U.S. $250 million non-revolving term loan that matures in May 2025 and a $50 million operating facility that matures in June 2024, which is typically renewed on an annual basis.

(3) Includes U.S. $250 million variable rate debt outstanding at June 30, 2023 (2022: U.S. $250 million) and fully hedged at 1.47 percent.

(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.

(5) The nominal interest rate is the weighted average of all drawn credit facilities based on Pembina's credit rating at June 30, 2023. Borrowings under the credit facilities bear interest at prime, Bankers' Acceptance or SOFR rates, plus applicable margins. The impact of interest rate hedges described in the footnote above are not reflected in this figure.

On May 31, 2023, Pembina completed an extension on its $1.5 billion Revolving Facility, which now matures June 1, 2028, and an extension on its $1.0 billion SLL Credit Facility, which now matures on June 1, 2027.

On June 1, 2023, Pembina's $600 million senior unsecured medium-term notes, series 14, matured and were fully repaid.

Pembina Pipeline Corporation Second Quarter 2023 53

SHARE CAPITAL

Common Share Capital

($ millions, except as noted)	Number of<br><br>Common Shares<br><br>(millions)	Common<br><br>Share Capital
Balance at December 31, 2022	550	15,793
Share-based payment transactions(1)	—	4
Repurchased	(1)	(34)
Balance at June 30, 2023	549	15,763

(1) Exercised options are settled by issuing the net number of common shares equivalent to the gain upon exercise.

Share Repurchase Program

The following table summarizes Pembina's share repurchases under its NCIB:

(millions, except as noted)	June 30, 2023	December 31, 2022
Number of common shares repurchased for cancellation (thousands)	1,197	7,154
Average price per share	$41.76	$46.55
Total cost(1)	50	333

(1) Total cost includes $34 million (December 31, 2022: $204 million) charged to share capital and $16 million (December 31, 2022: $129 million) charged to deficit.

Preferred Share Capital

($ millions, except as noted)	Number of Preferred Shares<br><br>(millions)	Preferred<br><br>Share Capital
Balance at December 31, 2022	93	2,208
Part VI.1 tax	—	(5)
Balance at June 30, 2023	93	2,203

On February 14, 2023, holders of an aggregate of 1,028,130 of the 16 million issued and outstanding Cumulative Redeemable Minimum Rate Reset Class A Preferred Shares, Series 21 (the "Series 21 Class A Preferred Shares") elected to convert, on a one-for-one basis, their Series 21 Class A Preferred Shares into Cumulative Redeemable Floating Rate Class A Preferred Shares, Series 22 ("Series 22 Class A Preferred Shares"). As a result of the exercise of such conversion rights, Pembina has 14,971,870 Series 21 Class A Preferred Shares and 1,028,130 Series 22 Class A Preferred Shares issued and outstanding. The annual dividend rate applicable to the Series 22 Class A Preferred Shares for the three-month floating rate period from and including June 1, 2023, to, but excluding, September 1, 2023, is 7.710.

On February 15, 2023, none of the Cumulative Redeemable Minimum Rate Reset Class A Preferred Shares, Series 25 ("Series 25 Class A Preferred Shares") outstanding were converted into Cumulative Redeemable Floating Rate Class A Preferred Shares, Series 26. The annual dividend rate for the Series 25 Class A Preferred Shares for the five-year period from and including February 15, 2023 to, but excluding, February 15, 2028 is 6.481 percent.

54 Pembina Pipeline Corporation Second Quarter 2023

Dividends

The following dividends were declared by Pembina:

6 Months Ended June 30
($ millions)	2023	2022
Common shares
$1.32 per common share (2022: $1.26)	726	696
Class A preferred shares
$0.62 per Series 1 Class A Preferred Share (2022: $0.61)	6	6
$0.56 per Series 3 Class A Preferred Share (2022: $0.56)	3	3
$0.58 per Series 5 Class A Preferred Share (2022: $0.57)	6	6
$0.54 per Series 7 Class A Preferred Share (2022: $0.54)	6	5
$0.54 per Series 9 Class A Preferred Share (2022: $0.53)	5	5
$0.78 per Series 15 Class A Preferred Share (2022: $0.56)	6	4
$0.60 per Series 17 Class A Preferred Share (2022: $0.60)	4	4
$0.58 per Series 19 Class A Preferred Share (2022: $0.59)	5	5
$0.70 per Series 21 Class A Preferred Share (2022: $0.61)	10	10
$0.49 per Series 22 Class A Preferred Share (2022: nil)	1	—
nil per Series 23 Class A Preferred Share (2022: $0.66)	—	8
$0.74 per Series 25 Class A Preferred Share (2022: $0.65)	7	7
	59	63

On August 3, 2023, Pembina announced that its Board of Directors had declared a common share cash dividend for the third quarter of 2023 of $0.6675 per share to be paid on September 29, 2023, to shareholders of record on September 15, 2023.

Pembina's Board of Directors also declared quarterly dividends for Pembina's Class A preferred shares on July 10, 2023 as outlined in the following table:

Series	Record Date	Payable Date	Per Share Amount	Dividend Amount<br><br>($ millions)
Series 1	August 1, 2023	September 1, 2023	$0.306625	3
Series 3	August 1, 2023	September 1, 2023	$0.279875	2
Series 5	August 1, 2023	September 1, 2023	$0.285813	3
Series 7	August 1, 2023	September 1, 2023	$0.273750	3
Series 9	August 1, 2023	September 1, 2023	$0.268875	2
Series 15	September 15, 2023	October 2, 2023	$0.385250	3
Series 17	September 15, 2023	October 2, 2023	$0.301313	2
Series 19	September 15, 2023	October 2, 2023	$0.292750	2
Series 21	August 1, 2023	September 1, 2023	$0.393875	6
Series 22	August 1, 2023	September 1, 2023	$0.485836	1
Series 25	July 31, 2023	August 15, 2023	$0.405063	4

Pembina Pipeline Corporation Second Quarter 2023 55

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
3 Months Ended June 30	Facilities	Marketing & New Ventures	Corporate	Total	Pipelines	Facilities	Marketing & New Ventures	Corporate	Total
( millions)
Take-or-pay(1)	90	—	—	506	413	195	—	—	608
Fee-for-service(1)	22	—	—	125	111	32	—	—	143
Product sales(2)	—	1,357	—	1,357	—	—	2,300	—	2,300
Revenue from contracts with customers	112	1,357	—	1,988	524	227	2,300	—	3,051
Operational finance lease income	—	—	—	6	6	—	—	—	6
Fixed operating lease income	11	—	—	57	29	9	—	—	38
Variable operating lease income	—	—	—	3	—	—	—	—	—
Shared service revenue(3)	3	—	11	16	—	—	—	—	—
Total external revenue	126	1,357	11	2,070	559	236	2,300	—	3,095

All values are in US Dollars.

							2022
6 Months Ended June 30		Facilities		Marketing & New Ventures		Total	Pipelines	Facilities	Marketing & New Ventures		Total
( millions)	Corporate		Corporate
Take-or-pay(1)		171		—	—	1,000	801	390	—	—	1,191
Fee-for-service(1)		57		—	—	289	216	65	—	—	281
Product sales(2)		—		2,915	—	2,915	—	—	4,571	—	4,571
Revenue from contracts with customers		228		2,915	—	4,204	1,017	455	4,571	—	6,043
Operational finance lease income		1		—	—	13	13	1	—	—	14
Fixed operating lease income		19		—	—	111	58	18	—	—	76
Variable operating lease income		—		—	—	7	—	—	—	—	—
Shared service revenue(3)		6		—	22	32	—	—	—	—	—
Total external revenue		254		2,915	22	4,367	1,088	474	4,571	—	6,133

All values are in US Dollars.

(1) Revenue recognized over time.

(2) Revenue recognized at a point in time.

(3) Fixed fee income related to shared service agreements with joint ventures.

56 Pembina Pipeline Corporation Second Quarter 2023

b.Contract Liabilities

Significant changes in the contract liabilities balances during the period are as follows:

	6 Months Ended June 30, 2023			12 Months Ended December 31, 2022
($ millions)	Take-or-Pay	Other Contract Liabilities	Total<br> Contract Liabilities	Take-or-Pay	Other Contract Liabilities	Total<br> Contract Liabilities
Opening balance	3	191	194	3	288	291
Additions (net in the period)	37	25	62	2	57	59
Disposition	—	—	—	(2)	(90)	(92)
Revenue recognized from contract liabilities(1)	—	(41)	(41)	—	(64)	(64)
Closing balance	40	175	215	3	191	194
Less current portion(2)	(40)	(42)	(82)	(3)	(53)	(56)
Ending balance	—	133	133	—	138	138

(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, 2023, the balance includes $40 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.

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, terminalling 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.

Pembina Pipeline Corporation Second Quarter 2023 57

OPERATING SEGMENTS

Pembina's operating segments are organized by three divisions: Pipelines, Facilities and Marketing & New Ventures.

3 Months Ended June 30, 2023	Facilities	Marketing &<br><br>New Ventures(2)	Corporate & Inter-segment Eliminations	Total
( millions)
Revenue from external customers(3)	126	1,357	11	2,070
Inter-segment revenue	94	—	(126)	—
Total revenue(4)	220	1,357	(115)	2,070
Operating expenses	90	—	(61)	189
Cost of goods sold, including product purchases	—	1,277	(65)	1,212
Depreciation and amortization included in operations	41	11	2	155
Cost of sales	131	1,288	(124)	1,556
Realized gain on commodity-related derivative financial instruments	—	(14)	—	(14)
Share of profit from equity accounted investees	69	8	—	97
Unrealized gain on commodity-related derivative financial instruments	—	(34)	—	(34)
Gross profit	158	125	9	659
Depreciation included in general and administrative	—	—	10	11
Other general and administrative	3	7	56	73
Other expense	—	7	1	9
Reportable segment results from operating activities	155	111	(58)	566
Net finance costs (income)	2	(4)	103	109
Reportable segment earnings (loss) before tax	153	115	(161)	457
Capital expenditures	33	—	13	123
Contributions to equity accounted investees	1	9	—	11

All values are in US Dollars.

3 Months Ended June 30, 2022	Facilities	Marketing &<br><br>New Ventures(2)	Corporate & Inter-segment Eliminations	Total
( millions)
Revenue from external customers(3)	236	2,300	—	3,095
Inter-segment revenue	124	—	(169)	—
Total revenue(4)	360	2,300	(169)	3,095
Operating expenses	141	—	(86)	211
Cost of goods sold, including product purchases	2	2,157	(84)	2,075
Depreciation and amortization included in operations	80	11	1	188
Cost of sales	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	20	6	—	74
Unrealized loss (gain) on commodity-related derivative financial instruments	9	(74)	—	(65)
Gross profit	158	153	—	711
Depreciation included in general and administrative	—	—	10	10
Other general and administrative	5	10	55	80
Other income	(1)	(3)	(14)	(18)
Reportable segment results from operating activities	154	146	(51)	639
Net finance costs	7	11	98	124
Reportable segment earnings (loss) before tax	147	135	(149)	515
Capital expenditures(5)	48	17	12	152
Contributions to equity accounted investees	—	6	—	6

All values are in US Dollars.

(1) Pipelines transportation revenue includes $67 million (2022: $55 million) associated with U.S. pipeline revenue.

(2) Marketing & New Ventures includes revenue of $47 million (2022: $89 million) associated with U.S. midstream sales.

(3) Includes $16 million of fixed fee income (2022: nil) related to shared service agreements with joint ventures.

(4) During the three months ended June 30, 2023, one customer accounted for 10 percent or more of total revenues with $229 million reported throughout all segments. During the three months ended June 30, 2022, no one customer accounted for 10 percent or more of total revenues reported throughout all segments.

(5) Includes capital expenditures related to assets held for sale of $6 million in 2022.

58 Pembina Pipeline Corporation Second Quarter 2023

6 Months Ended June 30, 2023	Facilities	Marketing & New Ventures(2)	Corporate & Inter-segment Eliminations	Total
( millions)
Revenue from external customers(3)	254	2,915	22	4,367
Inter-segment revenue	174	—	(234)	—
Total revenue(4)	428	2,915	(212)	4,367
Operating expenses	170	—	(113)	389
Cost of goods sold, including product purchases	—	2,686	(123)	2,563
Depreciation and amortization included in operations	75	23	3	301
Cost of sales	245	2,709	(233)	3,253
Realized gain on commodity-related derivative financial instruments	—	(38)	—	(38)
Share of profit from equity accounted investees	117	7	—	179
Gross profit	300	251	21	1,331
Depreciation included in general and administrative	—	—	19	20
Other general and administrative	8	16	115	156
Other expense	—	3	—	3
Reportable segment results from operating activities	292	232	(113)	1,152
Net finance costs (income)	4	(3)	204	220
Reportable segment earnings (loss) before tax	288	235	(317)	932
Capital expenditures	53	3	21	260
Contributions to equity accounted investees	33	15	—	49

All values are in US Dollars.

6 Months Ended June 30, 2022	Facilities	Marketing & New Ventures(2)	Corporate & Inter-segment Eliminations	Total
( millions)
Revenue from external customers(3)	474	4,571	—	6,133
Inter-segment revenue	243	—	(332)	—
Total revenue(4)	717	4,571	(332)	6,133
Operating expenses	275	—	(168)	404
Cost of goods sold, including product purchases	2	4,124	(167)	3,959
Depreciation and amortization included in operations	135	22	3	355
Cost of sales	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	44	27	—	159
Gross profit	417	378	—	1,568
Depreciation included in general and administrative	—	—	20	20
Other general and administrative	12	20	121	177
Other (income) expense	(1)	(3)	3	(10)
Reportable segment results from operating activities	406	361	(144)	1,381
Net finance costs	9	9	200	233
Reportable segment earnings (loss) before tax	397	352	(344)	1,148
Capital expenditures(5)	78	46	18	331
Contributions to equity accounted investees	13	12	—	25

All values are in US Dollars.

(1) Pipelines transportation revenue includes $139 million (2022: $107 million) associated with U.S. pipeline revenue.

(2) Marketing & New Ventures includes revenue of $151 million (2022: $177 million) associated with U.S. midstream sales.

(3) Includes $32 million of fixed fee income (2022: nil) related to shared service agreements with joint ventures.

(4) During six months ended June 30, 2023 and 2022, no one customer accounted for 10 percent or more of total revenues reported throughout all segments.

(5) Includes capital expenditures related to assets held for sale of $6 million in 2022.

Pembina Pipeline Corporation Second Quarter 2023 59

NET FINANCE COSTS

	3 Months Ended June 30		6 Months Ended June 30
($ millions)	2023	2022	2023	2022
Interest expense on financial liabilities measured at amortized cost:
Loans and borrowings	99	95	196	189
Subordinated hybrid notes	8	8	15	15
Leases	7	8	15	16
Unwinding of discount rate	4	4	8	8
(Gain) loss in fair value of non-commodity-related derivative financial instruments	(10)	8	(21)	3
Foreign exchange losses and other	1	1	7	2
Net finance costs	109	124	220	233

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

($ millions)	Currency Translation Reserve	Cash Flow Hedge<br><br>Reserve	Pension and other Post-Retirement Benefit Plan Adjustments(2)	Total
Balance at December 31, 2022	307	31	3	341
Other comprehensive loss before hedging activities	(94)	—	—	(94)
Other comprehensive gain (loss) resulting from hedging activities(1)	7	(4)	—	3
Balance at June 30, 2023	220	27	3	250

(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.

60 Pembina Pipeline Corporation Second Quarter 2023

FINANCIAL INSTRUMENTS & RISK MANAGEMENT

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, 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.

								December 31, 2022
		Fair Value(1)						Carrying<br><br>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(2)		—		92		34		129		—		92	37
Financial liabilities carried at fair value
Derivative financial instruments(2)		—		32		12		64		—		57	7
Contingent consideration(3)		—		—		36		49		—		12	37
Financial liabilities carried at amortized cost
Long-term debt(4)		—		9,763		—		10,600		—		9,590	—

All values are in US Dollars.

(1) The basis for determining fair value is disclosed in Note 3.

(2) At June 30, 2023 all derivative financial instruments are carried at fair value through earnings, except for $27 million in interest rate derivative financial assets that have been designated as cash flow hedges.

(3) Included in trade payables and other. 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.

(4) Carrying value of current and non-current balances. Includes loans and borrowings and subordinated hybrid notes.

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

Pembina has entered into long-term power purchase agreements that resulted in the recognition of embedded derivatives which Pembina has classified in Level 3 of the fair value hierarchy. The embedded derivatives are accounted for at fair value with realized and unrealized gains and losses recognized in earnings. The fair value is measured using a forward pricing model based on the fixed off take price and forward power price differentials at each reporting date. The fair value is determined using the contracted wind price at the reporting date compared to the quoted forward Alberta Electric System Operator ("AESO") wind power prices at the reporting date from a third-party information source, adjusted for various factors including inflation and credit spread. The significant unobservable inputs that impact the fair value of the Level 3 derivative instruments are wind discounts and forward power prices. Wind discounts are calculated as the decrease in realized power price for wind generators relative to average power pool prices as a result of wind generation, and are adjusted by management's projections of the wind escalation rate over time. Forward power prices are determined using a long-term price forecast.

Changes in fair value of the derivative net assets classified as Level 3 in the fair value hierarchy were as follows:

($ millions)	2023
Level 3 derivative net asset at January 1	30
Included in gain (loss) on commodity-related derivative financial instruments in earnings	(8)
Level 3 derivative net asset at June 30	22

There were no transfers into or out of Level 3 during the six months ended June 30, 2023.

Pembina Pipeline Corporation Second Quarter 2023 61

RELATED PARTIES

Pembina enters into transactions with related parties in the normal course of business and all transactions are measured at their exchange amount, unless otherwise noted. Pembina contracts capacity from certain of its equity accounted investees, advances funds to support operations, provides letters of credit, including financial guarantees, and provides services, on a fixed fee and cost recovery basis, to certain equity accounted investees. A summary of the significant related party transactions are as follows:

Equity Accounted Investees

	3 Months Ended June 30		6 Months Ended June 30
($ millions)	2023	2022	2023	2022
Services provided(1)	104	41	205	84
Services received	4	4	14	7	As at:	June 30, 2023	December 31, 2022
---	---	---
Advances to related parties(2)	1	22
Trade receivables and other	33	42
Trade payables and other(3)	17	150

(1) Services provided by Pembina include payments made by Pembina on behalf of related parties.

(2) During the six months ended June 30, 2023, Pembina settled an advance due from Ruby for U.S. $14 million and Fort Corp. repaid advances of $1 million.

(3) As at December 31, 2022, trade payables and other included U.S. $102 million related to the Ruby Settlement Agreement with Ruby, which was settled in January 2023.

PGI

Ruby

Aux Sable

Alliance

62 Pembina Pipeline Corporation Second Quarter 2023

COMMITMENTS AND CONTINGENCIES

Commitments

Pembina was committed for the following amounts under its contracts and arrangements as at June 30, 2023:

Contractual Obligations(1)	Payments Due by Period
($ millions)	Total	Less than 1 Year	1 – 3 Years	3 – 5 Years	After 5 Years
Construction commitments(2)	844	314	504	26	—
Other commitments related to lease contracts(3)	473	43	81	76	273
Transportation and processing(4)	96	40	31	14	11
Funding commitments(5)	61	53	8	—	—
Software, cloud computing and other	36	13	20	2	1
Total contractual obligations	1,510	463	644	118	285

(2)Excludes significant projects that are awaiting regulatory approval, projects which Pembina is not committed to construct, and projects that are executed by equity accounted investees.

(3)Relates to expected variable lease payments excluded from the measurements of the lease liability and payments related to non-lease components in lessee lease contracts.

(4)Take-or-pay payments for minimum volumes to be transported or processed, including $16 million of contract transportation on the Alliance Pipeline.

(5)Pembina has committed to fund the construction of an asset that will connect Pembina's assets into a third-party pipeline.

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 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 Pipeline Corporation Second Quarter 2023 63

HEAD OFFICE Pembina Pipeline Corporation Suite 4000, 585 - 8th Avenue SW Calgary, Alberta T2P 1G1 AUDITORS KPMG LLP Chartered Professional Accountants Calgary, Alberta TRUSTEE, REGISTRAR & TRANSFER AGENT Computershare Trust Company of Canada Suite 600, 530 - 8th Avenue SW Calgary, Alberta T2P 3S8 1.800.564.6253 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.B and PPL.PF.E New York Stock Exchange listing symbol for: COMMON SHARES PBA INVESTOR INQUIRIES PHONE 403.231.3156 FAX 403.237.0254 TOLL FREE 1.855.880.7404 EMAIL investor-relations@pembina.com WEBSITE www.pembina.com

Document

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, J. Scott Burrows, President and Chief Executive Officer of Pembina Pipeline Corporation, certify the following:

Review: I have reviewed the interim financial report and interim MD&A (together, the "interim filings") of Pembina Pipeline Corporation (the "issuer") for the interim period ended June 30, 2023.
No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
Responsibility: The issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, for the issuer.
Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a)designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b)designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.

5.1 Control framework: The control framework the issuer's other certifying officer(s) and I used to design the issuer's ICFR is Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

5.2 N/A

5.3 N/A

Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on April 1, 2023 and ended on June 30, 2023 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.

Date: August 3, 2023

(signed) "J. Scott Burrows"

J. Scott Burrows

President and Chief Executive Officer

of Pembina Pipeline Corporation

Document

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, Cameron J. Goldade, Senior Vice President & Chief Financial Officer of Pembina Pipeline Corporation, certify the following:

Review: I have reviewed the interim financial report and interim MD&A (together, the "interim filings") of Pembina Pipeline Corporation (the "issuer") for the interim period ended June 30, 2023.
No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
Responsibility: The issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, for the issuer.
Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a)designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

5.2 N/A

5.3 N/A

Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on April 1, 2023 and ended on June 30, 2023 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.

Date: August 3, 2023

(signed) "Cameron J. Goldade"

Cameron J. Goldade

Senior Vice President & Chief Financial Officer

of Pembina Pipeline Corporation