Enhanced Investments - Financial Portal

Published: 2022-05-05

FINANCIAL

STATEMENTS

& NOTES

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION(unaudited)
($ mil ions)	March 31, 2022	December 31, 2021
Assets
Current assets
Cash and cash equivalents			28	43
Trade receivables and other			1,022	812
Inventory			227	376
Derivative financial instruments (Note 12)			46	14
			1,323	1,245
Non-current assets
Property, plant and equipment (Note 3)			18,097	18,193
Intangible assets and goodwil			6,214	6,238
Investments in equity accounted investees (Note 4)			4,553	4,622
Right-of-use assets			542	581
Finance lease receivable			220	211
Deferred tax assets			246	257
Derivative financial instruments and other assets (Note 12)			181	109
			30,053	30,211
Total assets			31,376	31,456
Liabilities and equity
Current liabilities
Trade payables and other			1,059	1,063
Loans and borrowings (Note 5)			950	1,000
Dividends payable			116	115
Lease liabilities			84	88
Contract liabilities (Note 8)			81	71
Derivative financial instruments (Note 12)			117	53
			2,407	2,390
Non-current liabilities
Loans and borrowings (Note 5)			9,557	9,645
Subordinated hybrid notes (Note 5)			595	594
Lease liabilities			614	635
Decommissioning provision (Note 6)			277	412
Contract liabilities (Note 8)			212	220
Deferred tax liabilities			3,034	3,011
Other liabilities			174	186
			14,463	14,703
Total liabilities			16,870	17,093
Equity
Attributable to shareholders			14,446	14,303
Attributable to non-control ing interest			60	60
Total equity			14,506	14,363
Total liabilities and equity			31,376	31,456
See accompanying notes to the condensed consolidated interim financial statements
					Pembina Pipeline Corporation First Quarter 2022 35

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME(unaudited)
	3 Months Ended March 31
			2021
($ mil ions, except per share amounts)		2022		(Restated Note 14)
Revenue (Note 8)					3,038	2,016
Cost of sales (Note 10)					2,244	1,364
Loss on commodity-related derivative financial instruments (Note 12)					22	93
Share of profit from equity accounted investees (Note 4)					86	71
Gross profit					858	630
General and administrative					107	87
Other expense					9	16
Results from operating activities					742	527
Net finance costs (Note 9)					109	104
Earnings before income tax					633	423
Current tax expense					121	58
Deferred tax expense					31	45
Income tax expense					152	103
Earnings					481	320
Other comprehensive income (loss), net of tax (Note 11 & 12)
Exchange loss on translation of foreign operations					(46)	(63)
Impact of hedging activities					16	8
Total comprehensive income attributable to shareholders					451	265
Earnings attributable to common shareholders, net of preferred share dividends					448	281
Earnings per common share – basic and diluted (dol ars)					0.81	0.51
Weighted average number of common shares (mil ions)
Basic					551	550
Diluted					552	550
See accompanying notes to the condensed consolidated interim financial statements
36 Pembina Pipeline Corporation First Quarter 2022

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY(unaudited)
	Attributable to Shareholders of the Company
			Common	Preferred							Non-
		Total	Share			Share					Control ing
		Equity	($ mil ions)	Capital			Capital	Deficit	AOCI(1)	Total	Interest
December 31, 2021				15,678			2,517	(3,920)	28	14,303	60	14,363
Total comprehensive income
Earnings				—			—	481	—	481	—	481
Other comprehensive loss (Note 11)				—			—	—	(30)	(30)	—	(30)
Total comprehensive income (loss)				—			—	481	(30)	451	—	451
Transactions with shareholders of the Company (Note 7)
Part VI.1 tax on preferred shares				—			(3)	—	—	(3)	—	(3)
Repurchase of common shares				(17)			—	(11)	—	(28)	—	(28)
Share-based payment transactions				101			—	—	—	101	—	101
Dividends declared – common				—			—	(347)	—	(347)	—	(347)
Dividends declared – preferred				—			—	(31)	—	(31)	—	(31)
Total transactions with shareholders of the Company				84			(3)	(389)	—	(308)	—	(308)
March 31, 2022				15,762			2,514	(3,828)	(2)	14,446	60	14,506
December 31, 2020				15,644			2,946	(3,637)	2	14,955	60	15,015
Total comprehensive income (loss)
Earnings				—			—	320	—	320	—	320
Other comprehensive loss (Note 11)				—			—	—	(55)	(55)	—	(55)
Total comprehensive income (loss)				—			—	320	(55)	265	—	265
Transactions with shareholders of the Company (Note 7)
Part VI.1 tax on preferred shares				—			(3)	—	—	(3)	—	(3)
Preferred shares redemption				—			(170)	—	—	(170)	—	(170)
Share-based payment transactions				8			—	—	—	8	—	8
Dividends declared – common				—			—	(346)	—	(346)	—	(346)
Dividends declared – preferred				—			—	(36)	—	(36)	—	(36)
Total transactions with shareholders of the Company				8			(173)	(382)	—	(547)	—	(547)
March 31, 2021				15,652			2,773	(3,699)	(53)	14,673	60	14,733
(1)	Accumulated Other Comprehensive Income (loss) ("AOCI").
See accompanying notes to the condensed consolidated interim financial statements
					Pembina Pipeline Corporation First Quarter 2022 37

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS(unaudited)
	3 Months Ended March 31
($ mil ions)		2022	2021
Cash provided by (used in)Operating activitiesEarnings
		481	320
Adjustments for:
Share of profit from equity accounted investees		(86)	(71)
Distributions from equity accounted investees		155	115
Depreciation and amortization		177	175
Unrealized (gain) loss on commodity-related derivative financial instruments		(25)	5
Net finance costs (Note 9)		109	104
Net interest paid		(119)	(109)
Income tax expense		152	103
Taxes paid		(152)	(127)
Share-based compensation expense		47	28
Share-based compensation payment		(45)	(32)
Net change in contract liabilities		6	5
Other		(6)	19
Change in non-cash operating working capital		(39)	(79)
Cash flow from operating activities		655	456
Financing activities
Net decrease in bank borrowings		(84)	(103)
Proceeds from issuance of long-term debt, net of issue costs		—	593
Repayment of long-term debt		(50)	(250)
Repayment of lease liability		(23)	(24)
Exercise of stock options		97	1
Repurchase of common shares		(28)	—
Redemption of preferred shares		—	(170)
Common share dividends paid		(347)	(346)
Preferred share dividends paid		(31)	(37)
Cash flow used in financing activities		(466)	(336)
Investing activities
Capital expenditures		(179)	(127)
Contributions to equity accounted investees		(19)	(12)
Receipt of finance lease payments		3	3
Interest paid during construction		(8)	(9)
Advances to related parties		—	(10)
Changes in non-cash investing working capital and other		(1)	(2)
Cash flow used in investing activities		(204)	(157)
Change in cash and cash equivalents		(15)	(37)
Effect of movement in exchange rates on cash held		—	1
Cash and cash equivalents, beginning of period		43	81
Cash and cash equivalents, end of period		28	45
See accompanying notes to the condensed consolidated interim financial statements
38 Pembina Pipeline Corporation First Quarter 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. 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 months ended March 31, 2022.
Pembina owns an integrated network of hydrocarbon liquids and natural gas pipelines, gas gathering and processing facilities, oil and natural gas liquids infrastructure and logistics services, and a growing export terminals business. Pembina's integrated assets and commercial operations along the majority of the hydrocarbon value chain al ow it to offer a ful spectrum of midstream and marketing services to the energy sector.
These Interim Financial Statements and the notes hereto have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, as issued by the International Accounting Standards Board. The accounting policies applied are in accordance with International Financial Reporting Standards ("IFRS"), are consistent with the audited annual consolidated financial statements of the Company as at and for the year ended December 31, 2021 ("Consolidated Financial Statements") 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 May 5, 2022.
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 months ended March 31, 2022.
2. DETERMINATION OF FAIR VALUES
A number of the Company's accounting policies and disclosures require the determination of fair value for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the methods set out in the Consolidated Financial Statements. These methods have been applied consistently to al periods presented in these Interim Financial Statements.
Impacts of Geopolitical Events in Eastern Europe and the Ongoing COVID-19 Pandemic
Measuring fair values using significant unobservable inputs has become more chal enging in the current environment, where the geopolitical events in Eastern Europe and continuing events and conditions related to the COVID-19 pandemic are driving significant volatility in commodity prices and currencies, disruption of business operations and a significant increase in economic uncertainty. Management applied its judgment in determining the impact of the significant uncertainties created by these events and conditions on the assessed fair values of assets and liabilities in the Interim Financial Statements.
	Pembina Pipeline Corporation First Quarter 2022 39

3. PROPERTY, PLANT AND EQUIPMENT
				Cavern
	Land and		Facilities and	Storage and	Assets Under
($ mil ions)	Land Rights	Pipelines	Equipment	Other	Construction	Total
CostBalance at December 31, 2021
		456	9,279				9,384	2,084				915	22,118
Additions and transfers								—	40				17	26			94	177
Change in decommissioning provision								—	(16)					(81)	(16)			—	(113)
Disposals and other								(1)	(49)					(3)	—			—	(53)
Foreign exchange								(1)	(10)					(4)	—			—	(15)
Balance at March 31, 2022		454	9,244				9,313	2,094				1,009	22,114
DepreciationBalance at December 31, 2021
								26	2,015					1,421	463			—	3,925
Depreciation								1	48				67	21			—	137
Disposals and other								—	(42)					(3)	—			—	(45)
Balance at March 31, 2022								27	2,021					1,485	484			—	4,017
Carrying amountsBalance at December 31, 2021
		430	7,264				7,963	1,621				915	18,193
Balance at March 31, 2022		427	7,223				7,828	1,610				1,009	18,097
4. INVESTMENTS IN EQUITY ACCOUNTED INVESTEES
		Share of Profit from Equity Accounted
			Investees
										Investments in Equity Accounted
									Ownership Interest (percent)	Investees	3 Months Ended March 31
($ mil ions)									March 31, 2022 December 31, 2021	2022	2021						March 31, 2022 December 31, 2021
Al iance											50	50	38	34	2,622	2,686
Aux Sable									42.7 - 50	42.7 - 50		22	6	364	377
Ruby(1)													—	—	—	13			—	—
Veresen Midstream											45	45	22	17	1,349	1,349
CKPC											50	50	—	—			—	—
Cedar LNG											49.9	49.9	—	—	134	130
Other(2)											50 - 75	50 - 75		4	1			84	80
			86	71	4,553	4,622
(1)	Pembina owns a 50 percent convertible preferred interest in Ruby.
(2)	Other includes Pembina's interest in Grand Val ey and Fort Corp.
At March 31, 2022, Pembina had U.S. $1.3 bil ion in investments in equity accounted investees held by entities whose functional currency is the U.S. dol ar. The resulting foreign exchange gains and losses are included in other comprehensive income. For the three months ended March 31, 2022, Pembina recognized a loss of $19 mil ion (2021: $20 mil ion loss).
Financing Activities for Equity Accounted Investees
Ruby Pipeline, L.L.C. ("Ruby Pipeline"), a whol y-owned subsidiary of Ruby, had U.S. $475 mil ion principal amount of unsecured notes that matured on April 1, 2022 (the "2022 Notes"). Although Ruby Pipeline has sufficient liquidity to operate its business, it lacked sufficient liquidity to satisfy its obligations under the 2022 Notes on the maturity date of April 1, 2022. Accordingly, on March 31, 2022, Ruby Pipeline filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The risks and uncertainties surrounding the Chapter 11 proceedings raise substantial doubt as to Ruby Pipeline's ability to continue as a going concern.
Pembina does not have any financial commitments or obligations in respect of the debts or obligations of Ruby Pipeline, including in respect of the 2022 Notes, nor is Pembina contractual y obligated to provide any further contributions or funding to Ruby.
40 Pembina Pipeline Corporation First Quarter 2022

5. LONG-TERM DEBT
This note provides information about the contractual terms of Pembina's interest-bearing long-term debt, which are measured at amortized cost.
Carrying Value, Terms and Conditions, and Debt Maturity Schedule
						Carrying Value
	Authorized at	Nominal	Year of
($ mil ions)	March 31, 2022	Interest Rate	Maturity	March 31, 2022 December 31, 2021
Loans and borrowingsSenior unsecured credit facilities(1)(3)(4)
					3,333	1.60(2)	Various(1)		820	907
Senior unsecured medium-term notes series 2					450	3.77	2022		450	450
Senior unsecured medium-term notes series 3					450	4.75	2043		447	447
Senior unsecured medium-term notes series 4					600	4.81	2044		597	597
Senior unsecured medium-term notes series 5					450	3.54	2025		449	449
Senior unsecured medium-term notes series 6					500	4.24	2027		499	499
Senior unsecured medium-term notes series 7					600	3.71	2026		602	602
Senior unsecured medium-term notes series 8					650	2.99	2024		648	648
Senior unsecured medium-term notes series 9					550	4.74	2047		542	542
Senior unsecured medium-term notes series 10					650	4.02	2028		659	660
Senior unsecured medium-term notes series 11					800	4.75	2048		841	841
Senior unsecured medium-term notes series 12					650	3.62	2029		654	654
Senior unsecured medium-term notes series 13					700	4.54	2049		712	712
Senior unsecured medium-term notes series 14					600	2.56	2023		599	599
Senior unsecured medium-term notes series 15					600	3.31	2030		597	597
Senior unsecured medium-term notes series 16					400	4.67	2050		397	397
Senior unsecured medium-term notes series 17					500	3.53	2031		497	497
Senior unsecured medium-term notes series 18					500	4.49	2051		497	497
Senior unsecured medium-term notes series 3A					—	5.05	2022		—	50
Total loans and borrowings						10,507	10,645
Less current portion loans and borrowings						(950)	(1,000)
Total non-current loans and borrowings						9,557	9,645
Subordinated hybrid notesSubordinated notes, series 1
					600	4.80	2081		595	594
(1)	Pembina's unsecured credit facilities include a $2.5 bil ion revolving facility that matures in June 2026, a $500 mil ion non-revolving term loan that matures in August 2022, a
U.S. $250 mil ion non-revolving term loan that matures in May 2025 and a $20 mil ion operating facility that matures in May 2022, which is typical y renewed on an annual
basis.
(2)	The nominal interest rate is the weighted average of al drawn credit facilities based on Pembina's credit rating at March 31, 2022. Borrowings under the credit facilities bear
interest at prime, Bankers' Acceptance, or LIBOR rates, plus applicable margins.
(3)	Includes U.S. $250 mil ion variable rate debt outstanding at March 31, 2022 (December 31, 2021: U.S. $250 mil ion).
(4)	The U.S. dol ar denominated non-revolving term loan is designated as a hedge of the Company’s net investment in selected foreign operations with a U.S. dol ar functional
currency. Refer to Note 12 for foreign exchange risk management.
On March 14, 2022, Pembina's $50 mil ion senior unsecured medium term notes, series 3A, matured and were ful y repaid.
								Pembina Pipeline Corporation First Quarter 2022 41

6. DECOMMISSIONING PROVISION
($ mil ions)	2022
Balance at January 1		412
Unwinding of discount rate		4
Change in discount rates		(134)
Change in cost estimates and other		(5)
Balance at March 31		277
Pembina's decommissioning provision decreased by $135 mil ion for the three months ended March 31, 2022 primarily due to an increase in the credit-adjusted risk free rates of 4.8 percent to 5.9 percent (December 31, 2021: 3.3 percent to 4.7 percent).
7. SHARE CAPITAL
Common Share Capital
		Number of
		Common Shares	Common
($ mil ions, except as noted)		(mil ions)	Share Capital
Balance at December 31, 2021					550	15,678
Share-based payment transactions					3	101
Repurchased					(1)	(17)
Balance at March 31, 2022					552	15,762
Share Repurchase ProgramOn March 8, 2022, the Toronto Stock Exchange ("TSX") accepted the renewal of Pembina's normal course issuer bid (the "NCIB") that al ows the Company to repurchase, at its discretion, up to approximately 27.5 mil ion 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 wil be cancel ed. The NCIB commenced on March 10, 2022 and wil terminate on March 9, 2023 or on such earlier date as the Company has purchased the maximum number of common shares permitted pursuant to the notice of intention under the normal course issuer bid or at such time Pembina determines to no longer make purchases thereunder.
The fol owing table summarizes Pembina's share repurchases under its NCIB:
(mil ions, except as noted)		March 31, 2022	December 31, 2021
Number of common shares repurchased for cancel ation (thousands)					600	450
Average price per share		$46.43	$37.77
Total cost(1)					28	17
(1)	Total cost includes $17 mil ion (2021: $13 mil ion) charged to share capital and $11 mil ion (2021: $4 mil ion) charged to deficit.
Preferred Share Capital
				Number of Preferred
		Shares	Preferred
($ mil ions, except as noted)		(mil ions)	Share Capital
Balance at December 31, 2021					105	2,517
Part VI.1 tax					—	(3)
Balance at March 31, 2022					105	2,514
42 Pembina Pipeline Corporation First Quarter 2022

Dividends
The fol owing dividends were declared by Pembina:
3 Months Ended March 31($ mil ions)
	2022	2021
Common shares
$0.63 per common share (2021: $0.63)	347	346
Class A preferred shares
$0.31 per Series 1 Class A Preferred Share (2021: $0.31)	3	3
$0.28 per Series 3 Class A Preferred Share (2021: $0.28)	2	2
$0.28 per Series 5 Class A Preferred Share (2021: $0.28)	3	3
$0.27 per Series 7 Class A Preferred Share (2021: $0.27)	3	3
$0.27 per Series 9 Class A Preferred Share (2021: $0.27)	2	2
nil per Series 11 Class A Preferred Share (2021: $0.24)			—	1
nil per Series 13 Class A Preferred Share (2021: $0.36)			—	4
$0.28 per Series 15 Class A Preferred Share (2021: $0.28)			2	2
$0.30 per Series 17 Class A Preferred Share (2021: $0.30)			2	2
$0.29 per Series 19 Class A Preferred Share (2021: $0.29)			2	2
$0.31 per Series 21 Class A Preferred Share (2021: $0.31)			5	5
$0.33 per Series 23 Class A Preferred Share (2021: $0.33)			4	4
$0.33 per Series 25 Class A Preferred Share (2021: $0.33)			3	3
	31	36
On April 6, 2022, Pembina announced that its Board of Directors had declared a dividend of $0.21 per common share in the total amount of $116 mil ion, payable on May 13, 2022 to shareholders of record on April 25, 2022.
Pembina's Board of Directors also declared quarterly dividends for Pembina's Class A preferred shares on April 6, 2022 as outlined in the fol owing table:
						Dividend Amount
Series			Record Date	Payable Date	Per Share Amount		($ mil ions)
Series 1			May 2, 2022	June 1, 2022	$0.306625	3
Series 3			May 2, 2022	June 1, 2022	$0.279875	2
Series 5			May 2, 2022	June 1, 2022	$0.285813	3
Series 7			May 2, 2022	June 1, 2022	$0.273750	3
Series 9			May 2, 2022	June 1, 2022	$0.268875	2
Series 15			June 15, 2022	June 30, 2022	$0.279000	2
Series 17			June 15, 2022	June 30, 2022	$0.301313	2
Series 19			June 15, 2022	June 30, 2022	$0.292750	2
Series 21			May 2, 2022	June 1, 2022	$0.306250	5
Series 23			May 2, 2022	May 16, 2022	$0.328125	4
Series 25			May 2, 2022	May 16, 2022	$0.325000	3
								Pembina Pipeline Corporation First Quarter 2022 43

8. REVENUE
Revenue has been disaggregated into categories to reflect how the nature, timing and uncertainty of revenue and cash flows are affected by economic factors.
a. Revenue Disaggregation
	2022	2021
	Marketing	Marketing
3 Months Ended March 31
					& New			& New
			Pipelines	Facilities	Ventures					Total Pipelines	Facilities	Ventures							Total	($ mil ions)Take-or-pay(1)
				388	195				—	583				399	184						—	583
Fee-for-service(1)				105	33				—	138				79	40						—	119
Product sales(2)(3)											—	—				2,271	2,271				—	—	1,271	1,271
Revenue from contracts with customers				493	228				2,271	2,992				478	224						1,271	1,973
Operational finance lease income				7	1				—	8	4	—						—	4
Fixed operating lease income											29	9				—	38				30	9	—	39
Total external revenue				529	238				2,271	3,038				512	233						1,271	2,016
(1)	Revenue recognized over time.
(2)	Revenue recognized at a point in time.
(3)	Comparative 2021 period has been restated. See Note 14 to the Interim Financial Statements for further details.
b. Contract Liabilities
Significant changes in the contract liabilities balances during the period are as fol ows:
				3 Months Ended March 31, 2022						12 Months Ended December 31, 2021
	Other					Total	Other							Total
	Contract					Contract	Contract							Contract
($ mil ions)			Take-or-Pay	Liabilities					Liabilities				Take-or-Pay	Liabilities							Liabilities
Opening balance				3	288	291	3	289	292
Additions (net in the period)				22	1	23	—	64	64
Revenue recognized from contract liabilities(1)				—	(21)	(21)	—	(65)	(65)
Closing balance				25	268	293	3	288	291
Less current portion(2)				(25)	(56)	(81)	(3)	(68)	(71)
Ending balance				—	212	212	—	220	220
(1)	Recognition of revenue related to performance obligations satisfied in the current period that were included in the opening balance of contract liabilities.
(2)	As at March 31, 2022, the balance includes $25 mil ion of cash col ected under take-or-pay contracts which wil 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 has been received from customers. Contract liabilities include up-front payments or non-cash consideration received from customers for future transportation, processing and storage services. Contract liabilities also include consideration received from customers for take-or-pay commitments where the customer has a make-up right to ship or process future volumes under a firm contract. These amounts are non-refundable should the customer not use its make-up rights.
Pembina does not have any contract assets. In al 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.
44 Pembina Pipeline Corporation First Quarter 2022

9. NET FINANCE COSTS
	3 Months Ended March 31
($ mil ions)		2022	2021
Interest expense on financial liabilities measured at amortized cost:
Loans and borrowings		94	91
Subordinated hybrid notes		7	5
Leases		8	9
Unwinding of discount rate		4	4
(Gain) loss in fair value of non-commodity-related derivative financial instruments		(5)	4
Foreign exchange losses (gains) and other		1	(9)
Net finance costs		109	104
				Pembina Pipeline Corporation First Quarter 2022 45

10. OPERATING SEGMENTS
Pembina's operating segments are organized by three divisions: Pipelines, Facilities and Marketing & New Ventures.
					Corporate &
3 Months Ended March 31, 2022
			Marketing & New		Inter-segment
	Pipelines(1)	Facilities		Ventures(2)	Eliminations	Total	($ mil ions)
Revenue from external customers							529	238		2,271		—	3,038
Inter-segment revenue							44	119					—	(163)	—
Total revenue(3)							573	357		2,271		(163)	3,038
Operating expenses							141	134					—	(82)	193
Cost of goods sold, including product purchases							—	—	1,967		(83)	1,884
Depreciation and amortization included in operations							99	55				11	2	167
Cost of sales							240	189		1,978		(163)	2,244
Realized (gain) loss on commodity-related derivative
financial instruments							—	(7)				54	—	47
Share of profit from equity accounted investees							40	24				22	—	86
Unrealized (gain) loss on commodity-related
derivative financial instruments							—	(60)					35	—	(25)
Gross profit							373	259					226	—	858
Depreciation included in general and administrative							—	—				—	10	10
Other general and administrative							14	7				10	66	97
Other (income) expense							(9)	—				—	17	8
Impairment expense							—	—				1	—	1
Reportable segment results from operating activities							368	252					215	(93)	742
Net finance costs (income)							7	6				(6)	102	109
Reportable segment earnings before tax							361	246					221	(195)	633
Capital expenditures							114	30				29	6	179
Contributions to equity accounted investees							—	13				6	—	19
3 Months Ended March 31, 2021
					Corporate &
(Restated Note 14)($ mil ions)
			Marketing & New		Inter-segment
	Pipelines(1)	Facilities		Ventures(2)	Eliminations	Total
Revenue from external customers							512	233		1,271		—	2,016
Inter-segment revenue							41	106					—	(147)	—
Total revenue(3)							553	339		1,271		(147)	2,016
Operating expenses							137	111					—	(66)	182
Cost of goods sold, including product purchases							—	4	1,097		(84)	1,017
Depreciation and amortization included in operations							104	46				13	2	165
Cost of sales							241	161		1,110		(148)	1,364
Realized loss on commodity-related derivative
financial instruments							—	—				88	—	88
Share of profit from equity accounted investees							47	18				6	—	71
Unrealized (gain) loss on commodity-related
derivative financial instruments							—	(1)				6	—	5
Gross profit							359	197					73	1	630
Depreciation included in general and administrative							—	—				—	10	10
Other general and administrative							9	5				7	56	77
Other (income) expense							(6)	(1)				1	10	4
Impairment expense							10	—				2	—	12
Reportable segment results from operating activities							346	193					63	(75)	527
Net finance costs (income)							13	6				(4)	89	104
Reportable segment earnings (loss) before tax							333	187					67	(164)	423
Capital expenditures							83	40				2	2	127
Contributions to equity accounted investees							—	11				1	—	12
(1)	Pipelines transportation revenue includes $52 mil ion (2021: $52 mil ion) associated with U.S. pipeline revenue.
(2)	Marketing & New Ventures includes revenue of $88 mil ion (2021: $83 mil ion) associated with U.S. midstream sales.
(3)	During the three months ended March 31, 2022 and 2021, no one customer accounted for 10 percent or more of total revenues reported throughout al segments.
46 Pembina Pipeline Corporation First Quarter 2022

11. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
			Pension and
			other Post-
	Currency	Cash Flow	Retirement
	Translation	Hedge	Benefit Plan
($ mil ions)	Reserve	Reserve	Adjustments(2)	Total
Balance at December 31, 2020						48	—	(46)	2
Other comprehensive loss before hedging activities						(63)						—	—	(63)
Other comprehensive gain resulting from hedging activities(1)						3	5	—	8
Balance at March 31, 2021						(12)						5	(46)	(53)
Balance at December 31, 2021						32	8	(12)	28
Other comprehensive loss before hedging activities						(46)						—	—	(46)
Other comprehensive gain resulting from hedging activities(1)						4	12	—	16
Balance at March 31, 2022						(10)						20	(12)	(2)
(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 wil not be reclassified into earnings.
12. FINANCIAL INSTRUMENTS & RISK MANAGEMENT
Risk Management
Pembina's risk management strategies, policies and limits, ensure risks and exposures are aligned to its business strategy and risk tolerance. Pembina's Board of Directors is responsible for providing risk management oversight at Pembina and oversees how management monitors compliance with Pembina's risk management policies and procedures and reviews the adequacy of this risk framework in relation to the risks faced by Pembina.
Pembina has exposure to counterparty credit risk, liquidity risk and market risk. Pembina utilizes derivative instruments to stabilize the results of its marketing business and, as at March 31, 2022, the Company has entered into certain financial derivative contracts in order to manage commodity price, foreign exchange and interest rate risk. These instruments are not used for trading or speculative purposes.
Fair Values
The fair values of financial assets and liabilities, together with the carrying amounts shown in the condensed consolidated interim statements of financial position, are shown in the table below. Certain non-derivative financial instruments measured at amortized cost including cash and cash equivalents, trade receivables and other, finance lease receivables, advances to related parties and 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.
					March 31, 2022	December 31, 2021
	Fair Value(1)							Fair Value(1)
									Carrying	Carrying
									Value	Value	($ mil ions)				Level 1	Level 2	Level 3	Level 1				Level 2	Level 3
Financial assets carried at fair valueDerivative financial instruments(3)
										201	—	185	16	95				—	84	11
Financial liabilities carried at fair valueDerivative financial instruments(3)
										124	—	124	—	59				—	59	—
Contingent consideration(4)										65	—				31	34	70				—		35	35
Financial liabilities carried at amortized costLong-term debt(2)
									11,102	— 10,703	— 11,239					— 11,814	—
(1)	The basis for determining fair value is disclosed in Note 2.
(2)	Carrying value of current and non-current balances. Includes loans and borrowings and subordinated hybrid notes.
(3)	At March 31, 2022 al derivative financial instruments are carried at fair value through earnings, except for $20 mil ion in interest rate derivative financial assets that have
been designated as cash flow hedges.
(4)	Included in trade payables and other and other liabilities. Under the terms of the agreements on Pembina’s investment in the Cedar LNG Project, Pembina has commitments
to make additional payments on a positive final investment decision as wel as contributions to fund development costs and annual operating budgets.
	Pembina Pipeline Corporation First Quarter 2022 47

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 substantial y 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.
Derivative instruments
Pembina enters into derivative instruments to hedge future cash flows associated with interest rate, commodity, and foreign exchange exposures. Derivatives are considered effective hedges to the extent that they offset the changes in value of the hedged item or transaction resulting from a specified risk factor. In some cases, even though the derivatives are considered to be effective economic hedges, they do not meet the specific criteria for hedge accounting treatment and are classified as held at fair value through profit or loss ("FVTPL").
The fol owing table is a summary of the net derivative financial instruments:
	March 31, 2022	December 31, 2021
	Non-				Non-	Non-							Non-
			Current	Current	Current				Current		Current	Current						Current	Current
($ mil ions)			Asset(1)	Asset	Liability(1)				Liability	Total	Asset(1)	Asset	Liability(1)							Liability	Total
Commodity, power,
storage and rail financial
instruments				40	140										(116)	(7)	57	13	73					(48)	(6)	32
Interest rate				5	15										—	—	20					1	8				—	—	9
Foreign exchange				1	—										(1)	—	—	—	—					(5)	—	(5)
Net derivative financial
instruments				46	155										(117)	(7)	77	14	81					(53)	(6)	36
(1)	At March 31, 2022 the derivative financial instruments were offset by $14 mil ion (2021: $11 mil ion) when determining the net amounts presented on the condensed
consolidated interim statement of financial position.
Notional and Maturity Summary
The maturity and notional amount or quantity outstanding related to Pembina's derivative instruments are as fol ows:
						Liquids	Natural Gas	Power							Foreign	Interest
($ mil ions)						(bpd)						(GJ/d)	(GWh)										Exchange	Rate
As at March 31, 2022Purchases(1)
						—	47,453	6,131							—	—
Sales(1)						12,469						—	—	—	—
Mil ions of U.S. dol ars						—						—	—	223	250
Maturity dates						2023						2023	2040							2023	2025
As at December 31, 2021Purchases(1)
						—	62,615	6,166							—	—
Sales(1)						16,550						—	—	—	—
Mil ions of U.S. dol ars						—						—	—	272	250
Maturity dates						2022						2022	2040							2022	2025
(1)	Barrels per day ("bpd"), gigajoules per day ("GJ/d") and gigawatt hours ("GWh").
48 Pembina Pipeline Corporation First Quarter 2022

Gains and Losses on Derivative Instruments
Realized and unrealized losses (gains) on derivative instruments are as fol ows:
	3 Months Ended March 31
($ mil ions)		2022	2021
Derivative instruments held at FVTPL(1)Realized loss (gain)
Commodity-related		47	88
Foreign exchange		1	(5)
Unrealized (gain) loss
Commodity-related		(25)	5
Foreign exchange		(5)	4
Derivative instruments in hedging relationships(2)Unrealized gain
Interest rate		(12)	(5)
(1)	Realized and unrealized losses (gains) on commodity derivative instruments held at FVTPL are included in loss (gain) on commodity-related derivative financial instruments in
the Interim Financial Statements. Realized and unrealized losses (gains) on foreign exchange derivative instruments held at FVTPL are included in net finance costs in the
Interim Financial Statements.
(2)	Unrealized gains on derivatives in designated cash flow hedging relationships are recognized in the cash flow hedge reserve in accumulated other comprehensive income,
with realized (gains) losses being reclassified to net finance costs. Refer to Note 11 for amounts reclassified. No (gains) losses have been recognized in net income relating to
discontinued cash flow hedges.
Non-Derivative Instruments Designated as Net Investment Hedges
Pembina has designated certain U.S. dol ar denominated debt as a hedge of the Company's net investment in U.S. dol ar denominated subsidiaries and investments in equity accounted investees. The designated debt has been assessed as having no ineffectiveness as the U.S. dol ar debt has an equal and opposite exposure to U.S. dol ar fluctuations. As a result, al foreign exchange gains or losses on the debt are reported directly in other comprehensive income.
The fol owing balances of U.S. dol ar debt had been designated as hedges:
($ mil ions)				March 31, 2022	December 31, 2021
Notional amount of U.S. debt designated (in U.S. dol ars)					250	250
Carrying value of U.S. debt designated					312	316
Maturity date	2025		2025
					Pembina Pipeline Corporation First Quarter 2022 49

13. COMMITMENTS AND CONTINGENCIES
Commitments
Pembina had the fol owing contractual obligations outstanding as at March 31, 2022:
Contractual Obligations(1)	Payments Due by Period
($ mil ions)		Total	Less than 1 Year	1 – 3 Years	3 – 5 Years	After 5 Years
Leases(2)							945	107			175	146	517
Long-term debt(3)							17,158	1,454	2,441	1,602			11,661
Construction commitments(4)							880	276			41	24	539
Other							565	120			99	75	271
Total contractual obligations							19,548	1,957	2,756	1,847			12,988
(1)	Pembina enters into product purchase agreements and power purchase agreements to secure supply for future operations. Purchase prices of both NGL and power are
dependent on current market prices. Volumes and prices for NGL and power contracts cannot be reasonably determined, and therefore, an amount has not been included in
the contractual obligations schedule. Product purchase agreements range from one to 9 years and involve the purchase of NGL products from producers. Assuming product
is available, Pembina has secured between 40 and 188 mbpd of NGL each year up to and including 2030. Power purchase agreements range from one to 24 years and involve
the purchase of power from electrical service providers. Pembina has secured up to 78 megawatts per day each year up to and including 2046.
(2)	Includes terminals, rail, office space, land and vehicle leases.
(3)	Includes loans and borrowings, subordinated hybrid notes and interest payments on Pembina's senior unsecured medium-term notes and subordinated hybrid notes.
Excludes deferred financing costs.
(4)	Excluding significant projects that are awaiting regulatory approval, projects which Pembina is not committed to construct, and projects that are executed by equity
accounted investees.
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 al proceedings in which we are involved. Legal and administrative proceedings involving possible losses are inherently complex, and we apply significant judgment in estimating probable outcomes. Of most significance is a claim filed against Aux Sable by a counterparty to an NGL supply agreement. Aux Sable has filed Statements of Defense responding to the claim. While the final outcome of such actions and proceedings cannot be predicted with certainty, at this time management believes that the resolutions of such actions and proceedings wil not have a material impact on Pembina's financial position or results of operations.
Letters of Credit
Pembina has provided letters of credit to various third parties in the normal course of conducting business. The letters of credit include financial guarantees to counterparties for product purchases and sales, transportation services, utilities, engineering and construction services. The letters of credit have not had and are not expected to have a material impact on Pembina's financial position, earnings, liquidity or capital resources. As at March 31, 2022, Pembina had $144 mil ion (December 31, 2021: $135 mil ion) in letters of credit issued.
14. RESTATEMENT
During the third quarter of 2021 Pembina identified certain crude contracts that were recorded incorrectly within Marketing & New Ventures. Revenue and cost of goods sold associated with the contracts were recorded on a gross basis but should have been recorded on a net basis. The restatement reduced revenue and cost of goods sold for the three months ended March 31, 2021 by $29 mil ion with no impact on earnings, cash flows or financial position.
50 Pembina Pipeline Corporation First Quarter 2022

	HEAD OFFICEPembina Pipeline CorporationSuite 4000, 585 – 8th Avenue SWCalgary, Alberta T2P 1G1
	AUDITORSKPMG LLPChartered AccountantsCalgary, Alberta
	TRUSTEE, REGISTRAR & TRANSFER AGENTComputershare Trust Company of CanadaSuite 600, 530 – 8th Avenue SWCalgary, Alberta T2P 3S81.800.564.6253
	STOCK EXCHANGEPembina Pipeline Corporation
	Toronto Stock Exchange listing symbols for:COMMON SHARES PPLPREFERRED SHARES PPL.PR.A, PPL.PR.C, PPL.PR.E, PPL.PR.G, PPL.PR.I, PPL.PR.O, PPL.PR.Q, PPL.PR.S, PPL.PF.A, PPL.PF.C and PPL.PF.E
	New York Stock Exchange listing symbol for:COMMON SHARES PBA
	INVESTOR INQUIRIESPhone 403.231.3156Fax 403.237.0254Toll Free 1.855.880.7404Email investor-relations@pembina.comWebsite www.pembina.com
www.pembina.com