Enhanced Investments - Financial Portal

Published: 2020-05-07

Financial Statements & Notes

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION(unaudited)
($ millions)	March 31, 2020 December 31, 2019(1)
Assets
Current assets
Cash and cash equivalents		132	129
Trade receivables and other		533	707
Inventory		146	126
Derivative financial instruments (Note 13)		113	40
		924	1,002
Non-current assets
Property, plant and equipment (Note 4)		19,247	18,737
Investments in equity accounted investees (Note 5)		6,356	5,954
Intangible assets and goodwill		6,503	6,446
Right-of-use assets (Note 6)		716	730
Finance lease receivable (Note 6)		143	144
Advances to related parties and other assets		221	156
		33,186	32,167
Total assets		34,110	33,169
Liabilities and equity
Current liabilities
Trade payables and other		893	1,013
Loans and borrowings (Note 7)		323	74
Dividends payable		115	110
Lease liabilities		95	112
Contract liabilities (Note 10)		66	39
Taxes payable		1	103
Derivative financial instruments (Note 13)		32	6
		1,525	1,457
Non-current liabilities
Loans and borrowings (Note 7)		10,339	10,078
Lease liabilities		726	707
Decommissioning provision (Note 8)		865	864
Contract liabilities (Note 10)		244	192
Deferred tax liabilities		2,981	2,922
Other liabilities		166	179
		15,321	14,942
Total liabilities		16,846	16,399
Equity
Attributable to shareholders		17,204	16,710
Attributable to non-controlling interest		60	60
Total equity		17,264	16,770
Total liabilities and equity		34,110	33,169
(1)				Pembina has recast certain comparative information to reflect changes to the Purchase Price Allocation originally presented December 31, 2019. See Note 3.
See accompanying notes to the consolidated financial statements
31	Pembina Pipeline Corporation First Quarter 2020

	CONDENSED CONSOLIDATED INTERIM STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME(unaudited)
		3 Months Ended March 31
	($ millions, except per share amounts)		2020	2019
	Revenue (Note 10)		1,671	1,968
	Cost of sales		1,152	1,450
	(Gain) loss on commodity-related derivative financial instruments		(126)	26
	Share of profit from equity accounted investees (Note 5)		83	96
	Gross profit		728	588
	General and administrative		61	74
	Other expense		17	3
	Results from operating activities		650	511
	Net finance costs (Note 11)		209	79
	Earnings before income tax		441	432
	Current tax expense		76	76
	Deferred tax expense		51	43
	Income tax expense		127	119
	Earnings attributable to shareholders		314	313
	Other comprehensive (loss) income
	Exchange gain (loss) on translation of foreign operations		465	(85)
	Remeasurements of defined benefit liability, net of tax		14	—
	Total comprehensive income attributable to shareholders		793	228
	Earnings attributable to common shareholders, net of preferred share dividends		275	282
	Earnings per common share – basic (dollars)		0.50	0.55
	Earnings per common share – diluted (dollars)		0.50	0.55
	Weighted average number of common shares (millions)
	Basic		549	509
	Diluted		549	511
	See accompanying notes to the consolidated financial statements
Pembina Pipeline Corporation First Quarter 2020 32

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY(unaudited)
	Attributable to Shareholders of the Company
					Accumulated
		Common	Preferred			Other		Non-
	Share		Share		Comprehensive				Controlling	Total
($ millions)		Capital	Capital	Deficit	Income (Loss)		Total	Interest		Equity
December 31, 2019	15,539		2,956	(1,883)		98	16,710	60		16,770
Total comprehensive income
Earnings——	314		—	314	—		314
Other comprehensive income
Exchange loss on translation of foreign
operations———		465	465			465
Remeasurements of defined benefit liability, net of tax———		14	14	—		14
Total comprehensive income——	314		479	793	—		793
Transactions with shareholders of the Company
Part VI.1 tax on preferred shares (Note 9)	—										(2)	—	—	(2)	—	(2)
Share-based payment transactions (Note 9)	87										—	—	—	87	—	87
Dividends declared – common (Note 9)	—										—	(346)	—	(346)	—	(346)
Dividends declared – preferred (Note 9)	—										—	(38)	—	(38)	—	(38)
Total transactions with shareholders of the Company	87										(2)	(384)	—	(299)	—	(299)
March 31, 2020	15,626		2,954	(1,953)		577	17,204	60		17,264
December 31, 2018	13,662		2,423	(2,058)		317	14,344	60		14,404
Impact of change in accounting policy——	22		—	22	—		22
Opening Value January 1, 2019	13,662		2,423	(2,036)		317	14,366	60		14,426
Total comprehensive income
Earnings——	313		—	313	—		313
Other comprehensive income
Exchange gain on translation of foreign
operations———		(85)	(85)	—		(85)
Total comprehensive income——	313		(85)	228	—		228
Transactions with shareholders of the Company
Part VI.1 tax on preferred shares	—										(1)	—	—	(1)	—	(1)
Share-based payment transactions	89										—	—	—	89	—	89
Dividends declared – common	—										—	(290)	—	(290)	—	(290)
Dividends declared – preferred	—										—	(31)	—	(31)	—	(31)
Total transactions with shareholders of the Company	89										(1)	(321)	—	(233)	—	(233)
March 31, 2019	13,751		2,422	(2,044)		232	14,361	60		14,421
See accompanying notes to the consolidated financial statements
33	Pembina Pipeline Corporation First Quarter 2020

	CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS(unaudited)
		3 Months Ended March 31
	($ millions)		2020	2019
	Cash provided by (used in)Operating activitiesEarnings
			314	313
	Adjustments for:
	Share of profit from equity accounted investees		(83)	(96)
	Distributions from equity accounted investees		123	170
	Depreciation and amortization		177	125
	Unrealized (gain) loss on commodity-related derivative financial instruments		(109)	45
	Net finance costs (Note 11)		209	79
	Net interest paid		(99)	(81)
	Income tax expense		127	119
	Taxes paid		(186)	(71)
	Share-based compensation (recovery) expense		(5)	26
	Share-based compensation payment		(44)	(50)
	Net change in contract liabilities		17	3
	Other		10	(5)
	Change in non-cash operating working capital		(41)	31
	Cash flow from operating activities		410	608
	Financing activities
	Bank borrowings and issuance of debt (Note 7)		510	94
	Repayment of loans and borrowings		(1,115)	(53)
	Repayment of lease liability		(26)	(18)
	Issuance of medium term notes (Note 7)		1,073	—
	Issue costs and financing fees		(4)	—
	Exercise of stock options		82	86
	Dividends paid		(378)	(314)
	Cash flow provided by (used in) financing activities		142	(205)
	Investing activities
	Capital expenditures		(483)	(361)
	Contributions to equity accounted investees		(172)	(33)
	Receipt of finance lease payments		14	—
	Interest paid during construction		(14)	(8)
	Recovery of assets or proceeds from sale		2	—
	Advances to related parties		(11)	(10)
	Changes in non-cash investing working capital and other		108	27
	Cash flow used in investing activities		(556)	(385)
	Change in cash and cash equivalents		(4)	18
	Effect of movement in exchange rates on cash held		7	(3)
	Cash and cash equivalents, beginning of period		129	157
	Cash and cash equivalents, end of period		132	172
	See accompanying notes to the consolidated financial statements
Pembina Pipeline Corporation First Quarter 2020 34

NOTES TO THE CONDENSED CONSOLIDATED UNAUDITED INTERIM 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. The 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, 2020. These Interim Financial Statements and the notes thereto have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") applicable to the preparation of interim financial statements, including International Accounting Standard 34, Interim Financial Reporting ("IAS 34"). These Interim Financial Statements have been prepared following the same accounting policies and methods of computation as the annual consolidated financial statements of the Company as at and for the year ended December 31, 2019 ("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 7, 2020.
Pembina owns an integrated system of pipelines that transport various hydrocarbon liquids and natural gas products produced primarily in western Canada. The Company also owns gas gathering and processing facilities and an oil and natural gas liquids infrastructure, storage and logistics 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.
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 financial results. 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, 2020, except for the additional judgment applied by management in determining the impact on the Interim Financial Statements of significant uncertainties arising from the global outbreak of novel coronavirus ("COVID-19") described below.
Impact of the COVID-19 Pandemic and Recent Decline in Global Energy Prices
In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. Many governments have taken steps to contain the spread of the virus, resulting in a virtual shutdown of the global economy, which has led to significant disruption of business operations and a significant increase in economic uncertainty, with more volatile asset prices and currency exchange rates, and a marked decline in long-term interest rates. In addition, the resulting decrease in demand for crude oil, combined with the actions of certain Organization of Petroleum Exporting Countries and allied countries in March 2020 to temporarily increase the supply of crude oil has resulted in a significant decline global energy prices. Management applied judgment in determining the impact of the significant uncertainties created by these events and conditions on the carrying amounts of assets and liabilities in the Interim Financial Statements.
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 based on methods as set out in the Consolidated Financial Statements. These methods have been applied consistently to all periods presented in these Interim Financial Statements.
35	Pembina Pipeline Corporation First Quarter 2020

	Impact of the COVID-19 Pandemic
	Measuring fair values using significant unobservable inputs has become more challenging in the current environment, where events and conditions related to the COVID-19 pandemic are driving significant 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 these Interim Financial Statements.
	3. ACQUISITION
	On December 16, 2019, Pembina acquired all the issued and outstanding shares of Kinder Morgan Canada Limited ("Kinder Morgan Canada") by way of a plan of arrangement and the U.S. portion of the Cochin Pipeline system (collectively the "Kinder Acquisition") for total consideration of $4.3 billion.
	The purchase price equation, subject to finalization, is based on assessed fair values and is as follows:
	As at December 16, 2019($ millions)
Previously ReportedAdjustmentsRecast
	Purchase Price ConsiderationCommon shares
		1,710	—	1,710
	Cash (net of cash acquired)	2,009	—	2,009
	Preferred shares	536	—	536
		4,255	—	4,255
	Current assets	68	15	83
	Property, plant and equipment	2,660	(38)	2,622
	Intangible assets	1,254	—	1,254
	Right-of-use assets	348	(92)	256
	Finance lease receivable	—	115	115
	Goodwill	809	16	825
	Other assets	9	—	9
	Current liabilities	(124)	—	(124)
	Deferred tax liabilities	(281)	(16)	(297)
	Decommissioning provision	(74)	—	(74)
	Lease liability	(348)	—	(348)
	Other liabilities	(66)	—	(66)
		4,255	—	4,255
	For more information, see Note 6 of the Consolidated Financial Statements for the year ended December 31, 2019. During the three months ended March 31, 2020, Pembina adjusted the purchase price equation to reflect updated assumptions for the identification and classification of leases, which resulted in the recognition of finance lease receivables of $130 million, and reductions in the property, plant and equipment of $38 million and in the right-of-use assets of $92 million. Pembina also adjusted the allocation of fair value between Canadian and U.S. legal entities, resulting in a $16 million increase in the deferred tax liability and a corresponding increase in goodwill of $16 million. The purchase price allocation is not final as Pembina is continuing to obtain and verify information required to determine the fair value of certain assets and liabilities including the identification and classification of leases and the amount of deferred income taxes arising on their recognition.
Pembina Pipeline Corporation First Quarter 2020 36

4. PROPERTY, PLANT AND EQUIPMENT
			Facilities	Cavern
	Land and		and	Storage and	Assets Under
($ millions)	Land Rights	Pipelines	Equipment	Other	Construction	Total
CostBalance at December 31, 2019(1)
	455	8,767	8,763	1,936			1,493	21,414
Additions and transfers—	229							143	14			139	525
Change in decommissioning provision—		(1)	(5)	—			—	(6)
Foreign exchange adjustments								8		77	29	—			25	139
Disposals and other—		(2)	(6)	(7)			(13)	(28)
Balance at March 31, 2020	463	9,070	8,924	1,943			1,644	22,044
DepreciationBalance at December 31, 2019
								16	1,363	1,015	283			—	2,677
Depreciation								1		52	47	22			—	122
Disposals and other——	(2)	—			—	(2)
Balance at March 31, 2020								17	1,415	1,060	305			—	2,797
Carrying amountsBalance at December 31, 2019
	439	7,404	7,748	1,653			1,493	18,737
Balance at March 31, 2020	446	7,655	7,864	1,638			1,644	19,247
Assets subject to operating leasesDecember 31, 2019
								—	477							259	62		—	798
March 31, 2020								—	475							264	63		—	802
(1)	The December 31, 2019 balance has been recast. See Note 3.
5. INVESTMENTS IN EQUITY ACCOUNTED INVESTEES
		Share of Profit from Equity
										Investments
											Ownership Interest	Equity Investments	3 Months Ended March 31
($ millions)												March 31, 2020	December 31, 2019	2020	2019	March 31, 2020		December 31, 2019
Alliance											50%	50%	28					50	2,704	2,620
Aux Sable											42.7% - 50%	42.7% - 50%		4					4	450	426
Ruby(1)													-	-	31					29	1,377	1,273
Veresen Midstream											45%	45%	13					12	1,379	1,348
CKPC											50%	50%	5					1	331	171
Other											50% - 75%	50% - 75%		2					—	115	116
			83						96	6,356	5,954
(1)	Pembina owns a 50 percent convertible preferred interest in Ruby.
Pembina has U.S. $2.3 billion in Investments in Equity Accounted Investees that is held by entities whose functional currency is the U.S. dollar. The resulting foreign exchange gain for the three months ended March 31, 2020 of $248 million (2019: $77 million loss) has been included in Other Comprehensive Income.
Financing Activities
Prior to Pembina's deferral, on February 27, 2020, CKPC closed a syndicated senior secured U.S. $1.7 billion amortizing term facility and a U.S. $150 million revolving facility both of which have been guaranteed equally by the owners of CKPC through the completion of construction on a several basis. The final maturity date of the term facility and revolving facility is February 27, 2027. The parental guarantee results in the recognition of a financial guarantee liability of U.S. $17 million on Pembina's balance sheet, with an offsetting amount recorded as an equity contribution to the investment in CKPC.
37	Pembina Pipeline Corporation First Quarter 2020

	On April 27, 2020, Ruby fully repaid its 364-day term loan. Concurrent to repayment, Ruby issued a new 364-day term loan. The term loan will amortize at U.S. $16 million per quarter (U.S. $8 million per quarter net to Pembina), beginning June 2020, until a final payment of U.S. $16 million (U.S. $8 million net to Pembina) is payable March 31, 2021.
	6. LEASES
	Lessee Leases
	Pembina enters into arrangements to secure access to assets necessary for operating the business. Leased (right-of-use) assets include terminals, rail, buildings, land and other assets. Total cash outflows related to leases were $31 million for the three months ended March 31, 2020.
	Right-of-Use Assets
	($ millions)	Terminals	Rail	Buildings Land & Other	Total
	Balance at December 31, 2019(1)					225	238				118	149	730
	Additions	—			—				8	—	8
	Amortization	(3)			(10)				(5)	(4)	(22)
	Balance at March 31, 2020					222	228				121	145	716
	(1)	The December 31, 2019 balance of Terminals Right-of-Use Assets has been recast. See Note 3 Acquisition and further discussion below.
	Lessor Leases
	Pembina has entered into contracts for the use of its assets that have resulted in lease treatment for accounting purposes. Assets under operating leases include pipelines, terminals and storage tanks and caverns. See Note 4 for carrying value of property, plant and equipment under operating leases. Assets under finance leases include office sub-leases and terminal assets.
	As disclosed in Note 3, Pembina is continuing to obtain and verify information required to determine the identification and classification of lessor leases acquired on December 16, 2019 as part of the Kinder Acquisition. Finance lease conclusions completed during the quarter resulted in the recognition of an additional $130 million in finance lease receivables, of which $92 million related to lessee leases recognized at the acquisition date, resulting in the December 31, 2019 right-of-use asset balance being recast, for leased terminal assets, from $822 million to $730 million. Lessor lease identification could continue to materially impact the classification of acquired assets in the final purchase price allocation, the classification and carrying value of acquired assets at the reporting date, disclosures related to future lessor operating lease payments, and disclosures related to the carrying value of property, plant and equipment and right-of-use assets under operating leases.
	Maturity of Lease Receivables
	As at March 31, 2020
				Operating Leases(1)				Finance Leases	($ millions)Less than one year
									145	24
	One to two years								130	20
	Two to three years								129	18
	Three to four years								122	18
	Four to five years								103	18
	More than five years								988	191
	Total undiscounted lease receipts								1,617	289
	Unearned finance income				(136)
	Finance lease receivable				153
	Less current portion(2)				(10)
	Total non-current				143
	(1)	Includes undiscounted lessor operating lease payments of $144 million related to contracts for which lease identification and classification has not been finalized.
	(2)	Included in trade receivables and other on the Condensed Consolidated Interim Statement of Financial Position.
Pembina Pipeline Corporation First Quarter 2020 38

Expected credit losses on lease receivables are determined using a probability-weighted estimate of credit losses, measured as the present value of all expected cash shortfalls, discounted at the interest rates implicit in the leases, using reasonable and supportable information about past events, current conditions and forecasts of future economic conditions. Pembina considers the risk of default relating to lease receivables low based on Pembina's assessment of individual counterparty credit risk through established credit management techniques as disclosed in the Consolidated Financial Statements.
7. LOANS AND BORROWINGS
This note provides information about the contractual terms of Pembina's interest-bearing loans and borrowings, which are measured at amortized cost. Carrying Value, Terms and Conditions, and Debt Maturity Schedule
	Carrying Value
		Authorized at	Nominal	Year of
($ millions)		March 31, 2020	interest Rate	Maturity	March 31, 2020	December 31, 2019
Senior unsecured credit facilities(1)(3)							3,020	2.44(2)	Various(1)	1,541	2,097
Senior unsecured notes – series A							73	5.57	2020	74	74
Senior unsecured notes – series C							200	5.58	2021	199	199
Senior unsecured medium-term notes series 1							250	4.89	2021	250	250
Senior unsecured medium-term notes series 2							450	3.77	2022	449	449
Senior unsecured medium-term notes series 3							450	4.75	2043	446	446
Senior unsecured medium-term notes series 4							600	4.81	2044	596	596
Senior unsecured medium-term notes series 5							450	3.54	2025	449	449
Senior unsecured medium-term notes series 6							500	4.24	2027	498	498
Senior unsecured medium-term notes series 7							500	3.71	2026	498	498
Senior unsecured medium-term notes series 8							650	2.99	2024	646	646
Senior unsecured medium-term notes series 9							550	4.74	2047	542	542
Senior unsecured medium-term notes series 10							650	4.02	2028	662	398
Senior unsecured medium-term notes series 11							800	4.75	2048	844	298
Senior unsecured medium-term notes series 12							650	3.62	2029	654	398
Senior unsecured medium-term notes series 13							700	4.54	2049	714	714
Senior unsecured medium-term notes series 14							600	2.56	2023	598	598
Senior unsecured medium-term notes series 15							600	3.31	2030	597	597
Senior unsecured medium-term notes 3A							50	5.05	2022	52	52
Senior unsecured medium-term notes 5A							350	3.43	2021	353	353
Total interest bearing liabilities	10,662							10,152
Less current portion	(323)							(74)
Total non-current	10,339							10,078
(1)	Pembina's unsecured credit facilities include a $2.5 billion revolving facility that matures May 2024, a $500 million non-revolving term loan that matures August 2022 and a
$20 million operating facility that matures May 2020, which is typically renewed on an annual basis.
(2)	The nominal interest rate is the weighted average of all drawn credit facilities based on Pembina's credit rating at March 31, 2020. Borrowings under the credit facilities bear
interest at prime, Bankers' Acceptance, or LIBOR rates, plus applicable margins.
(3)	At March 31, 2020, includes U.S. $420 million (December 31, 2019: US$454 million).
On January 10, 2020, Pembina closed an offering of $1.0 billion of senior unsecured medium-term notes. The offering was conducted in three tranches, consisting of $250 million issued through a re-opening of Pembina's senior unsecured medium-term notes, series 10, having a fixed coupon of 4.02 percent per annum, payable semi-annually and maturing on March 27, 2028; $500 million issued through a re-opening of Pembina's senior unsecured medium-term notes, series 11, having a fixed coupon of 4.75 percent per annum, payable semi-annually and maturing on March 26, 2048; and $250 million issued through a re-opening of Pembina's senior unsecured medium-term notes, series 12, having a fixed coupon of 3.62 percent per annum, payable semi-annually and maturing on April 3, 2029.
39	Pembina Pipeline Corporation First Quarter 2020

	On April 3, 2020, Pembina entered into an unsecured $800 million revolving credit facility with certain existing lenders which provides additional liquidity and flexibility in Pembina’s capital structure in the current market conditions. The credit facility has an initial term of two years. The other terms and conditions of the credit facility, including financial covenants, are substantially similar to Pembina's unsecured $2.5 billion revolving credit facility.
	On May 7, 2020, Pembina entered into an unsecured U.S. $250 million non-revolving term loan with a global bank, which provides additional liquidity and flexibility in Pembina's capital structure in the current market conditions. The term loan has an initial term of five years. The other terms and conditions of the credit facility, including financial covenants, are substantially similar to Pembina's unsecured $2.5 billion revolving credit facility.
	All facilities are governed by specific debt covenants which Pembina was in compliance with at March 31, 2020 (December 31, 2019: in compliance).8. DECOMMISSIONING PROVISION
	($ millions)	2020
	Balance at January 1	867
	Unwinding of discount rate	4
	Additions	3
	Change in cost estimates and other	(7)
	Total	867
	Less current portion(1)	(2)
	Balance at March 31	865
	(1)	Included in trade payables and other on the Condensed Consolidated Interim Statement of Financial Position.
	Pembina applied a risk-free real return rate of 0.3 percent (December 31, 2019: 0.3 percent) to estimate the present value of the decommissioning provision. Changes in the measurement of the decommissioning provision are added to, or deducted from, the cost of the related property, plant and equipment or right of use asset. When a re-measurement of the decommissioning provision relates to a retired asset, the amount is recorded in earnings.
	9. SHARE CAPITALCommon Share Capital
			Number of
			Common Shares	Common
	($ millions, except as noted)		(millions)	Share Capital
	Balance at December 31, 2019				548	15,539
	Share-based payment transactions				2	87
	Balance at March 31, 2020				550	15,626
	Preferred Share Capital
						Number of Preferred
			Shares	Preferred
	($ millions, except as noted)		(millions)	Share Capital
	Balance at December 31, 2019				122	2,956
	Part VI.1 tax				—	(2)
	Balance at March 31, 2020				122	2,954
Pembina Pipeline Corporation First Quarter 2020 40

Dividends
The following dividends were declared by Pembina:
3 Months Ended March 31($ millions)
	2020	2019
Common shares
$0.63 per common share (2019: $0.57)	346	290
Preferred shares
$0.31 per Series 1 preferred share (2019: $0.31)	3	3
$0.28 per Series 3 preferred share (2019: $0.29)	2	2
$0.28 per Series 5 preferred share (2019: $0.31)	3	3
$0.27 per Series 7 preferred share (2019: $0.28)	3	3
$0.30 per Series 9 preferred share (2019: $0.30)	2	2
$0.36 per Series 11 preferred share (2019: $0.36)	2	2
$0.36 per Series 13 preferred share (2019: $0.36)	4	4
$0.28 per Series 15 preferred share (2019: $0.28)	2	2
$0.30 per Series 17 preferred share (2019: $0.31)	2	2
$0.31 per Series 19 preferred share (2019: $0.31)	3	3
$0.31 per Series 21 preferred share (2019: $0.31)	5	5
$0.33 per Series 23 preferred share (2019: nil)	4	—
$0.33 per Series 25 preferred share (2019: nil)	3	—
	38	31
On April 6, 2020, Pembina announced that its Board of Directors had declared a dividend of $0.21 per common share ($2.52 annually) in the total amount of $115 million, payable on May 15, 2020 to shareholders of record on April 24, 2020. Pembina's Board of Directors also declared quarterly dividends for Pembina's preferred shares as outlined in the following table:
					Dividend Amount
SeriesRecord DatePayable DatePer Share Amount	($ millions)
Series 1			May 1, 2020	June 1, 2020		$0.306625	3
Series 3			May 1, 2020	June 1, 2020		$0.279875	2
Series 5			May 1, 2020	June 1, 2020		$0.285813	3
Series 7			May 1, 2020	June 1, 2020		$0.273750	3
Series 9			May 1, 2020	June 1, 2020		$0.296875	3
Series 11			May 1, 2020	June 1, 2020		$0.359375	2
Series 13			May 1, 2020	June 1, 2020		$0.359375	4
Series 15			June 15, 2020	June 30, 2020		$0.279000	2
Series 17			June 15, 2020	June 30, 2020		$0.301313	2
Series 19			June 15, 2020	June 30, 2020		$0.312500	3
Series 21			May 1, 2020	June 1, 2020		$0.306250	5
Series 23			April 30, 2020	May 15, 2020		$0.328125	4
Series 25			April 30, 2020	May 15, 2020		$0.325000	3
41	Pembina Pipeline Corporation First Quarter 2020

	10. 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
		2020	2019
	3 Months Ended March 31	Marketing	Marketing
& New								& New
				Pipelines	Facilities	Ventures			Total	Pipelines	Facilities	Ventures					Total	($ millions)Take-or-pay(1)
				388	182	—					570	273	161				—	434
	Fee-for-service(1)									99	30	—				129			96	17		—	113
	Product sales(2)									—	—	923				923			—	3		1,396	1,399
	Revenue from contracts with customers			487	212	923					1,622	369	181				1,396	1,946
	Operational finance lease income				4	—	—					4				—	—			—	—
	Other revenue(3)									37	8	—				45			15	7		—	22
	Total external revenue			528	220	923					1,671	384	188				1,396	1,968
	(1)	Revenue recognized over time.
	(2)	Revenue recognized at a point in time.
	(3)	Includes fixed operating lease income of $45 million for the three months ended March 31, 2020.
	b. Contract LiabilitiesSignificant changes in the contract liabilities balances during the period are as follows:
					3 Months Ended March 31, 2020		12 Months Ended December 31, 2019
		Other				Total	Other
		Contract	Contract			Contract					Total Contract
	($ millions)			Take-or-Pay	Liabilities	Liabilities						Take-or-Pay	Liabilities					Liabilities
	Opening balance	8	223					231		9	159	168
	Additions (net in the period)				18	78					96		4	35	39
	Acquisition (Note 3)				—	—					—		—	77	77
	Revenue recognized from contract liabilities(1)				(3)	(14)					(17)		(5)	(48)	(53)
	Closing balance				23	287					310		8	223	231
	Less current portion(2)				(23)	(43)					(66)		(8)	(31)	(39)
	Ending balance				—	244					244		—	192	192
	(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, 2020, the balance includes $23 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 which payment 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 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 First Quarter 2020 42

11. NET FINANCE COSTS
	3 Months Ended March 31
($ millions)		2020	2019
Interest expense on financial liabilities measured at amortized cost:
Loans and borrowings		87	71
Leases		10	5
Unwinding of discount rate		5	3
Loss in fair value of non-commodity-related derivative financial instruments		46	3
Foreign exchange losses (gains) and other		61	(3)
Net finance costs(1)		209	79
(1)	Excludes operational finance lease income from lessor lease arrangements which is included in revenue as this income is generated from physical assets in the normal course
of operations.
43	Pembina Pipeline Corporation First Quarter 2020

	12. OPERATING SEGMENTS
	Pembina's operating segments are organized by three divisions: Pipelines, Facilities and Marketing & New Ventures.
	3 Months Ended March 31, 2020			Corporate &
			Marketing & New	Inter-division
		Pipelines(1)	Facilities		Ventures(2)	Eliminations	Total	($ millions)Revenue from external customers
					528	220				923	—	1,671
	Inter-division revenue				35	84				—	(119)	—
	Total revenue(3)				563	304				923	(119)	1,671
	Operating expenses				126	96				—	(43)	179
	Cost of goods sold, including product purchases				—	2				883	(79)	806
	Realized gain on commodity-related derivative
	financial instruments				—	—				(17)	—	(17)
	Share of profit from equity accounted investees				58	16				9	—	83
	Depreciation and amortization included in operations				99	53				13	2	167
	Unrealized gain on commodity-related derivative
	financial instruments				—	(5)				(104)	—	(109)
	Gross profit				396	174				157	1	728
	Depreciation included in general and administrative				—	—				—	10	10
	Other general and administrative				9	1				8	33	51
	Other expense				—	—				12	5	17
	Reportable segment results from operating activities				387	173				137	(47)	650
	Net finance costs				7	7				21	174	209
	Reportable segment earnings (loss) before tax				380	166				116	(221)	441
	Capital expenditures				328	136				15	4	483
	Contributions to equity accounted investees				—	41				153	—	194
	3 Months Ended March 31, 2019			Corporate &
			Marketing & New	Inter-division
		Pipelines(1)	Facilities		Ventures(2)	Eliminations	Total	($ millions)
	Revenue from external customers				384	188			1,396		—	1,968
	Inter-division revenue				32	83				—	(115)	—
	Total revenue(3)				416	271			1,396		(115)	1,968
	Operating expenses				98	85				—	(43)	140
	Cost of goods sold, including product purchases				—	1			1,265		(72)	1,194
	Realized gain on commodity-related derivative
	financial instruments				—	—				(19)	—	(19)
	Share of profit from equity accounted investees				79	12				5	—	96
	Depreciation and amortization included in operations				57	39				17	3	116
	Unrealized loss on commodity-related derivative
	financial instruments				—	—				45	—	45
	Gross profit				340	158				93	(3)	588
	Depreciation included in general and administrative				—	—				—	9	9
	Other general and administrative				10	5				13	37	65
	Other expense				1	—				1	1	3
	Reportable segment results from operating activities				329	153				79	(50)	511
	Net finance costs (income)				2	2				(3)	78	79
	Reportable segment earnings (loss) before tax				327	151				82	(128)	432
	Capital expenditures				192	112				55	2	361
	Contributions to equity accounted investees				—	26				64	—	90
	(1)	Pipelines transportation revenue includes $59 million (2019: $5 million) associated with U.S. pipeline revenue.
	(2)	Marketing & New Ventures includes revenue of $50 million (2019: $63 million) associated with U.S. midstream sales.
	(3)	During the first quarter of 2020, no one customer accounted for 10 percent or more of total revenues reported throughout all segments. During the first quarter of 2019: one
	customer accounted for 10 percent or more of total revenues, with $207 million reported throughout all segments.
Pembina Pipeline Corporation First Quarter 2020 44

13. FINANCIAL INSTRUMENTS
Fair ValuesThe fair values of financial assets and liabilities, together with the carrying amounts shown in the consolidated 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 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. A
financial guarantee included in other liabilities has a carrying amount that approximates fair value at the reporting date due to
the nature of the underlying development project and is classified in Level 3 of the fair value hierarchy.
	March 31, 2020	December 31, 2019
	Fair Value(1)				Fair Value(1)
			Carrying	Carrying
			Value	Value	($ millions)	Level 1					Level 2	Level 3	Level 1			Level 2			Level 3
Financial assets carried at fair valueDerivative financial instruments
			167	—					167	—					48	—					48	—
Financial liabilities carried at fair valueDerivative financial instruments
											41	—					41	—		9	—		9	—
Financial liabilities carried at amortized costLoans and borrowings(2)
			10,662	—					9,974	—	10,152	—			10,729			—
(1)	The basis for determining fair value is disclosed in Note 2.
(2)	Carrying value of current and non-current balances.
14. COMMITMENTS AND CONTINGENCIES
Commitments
Pembina had the following contractual obligations outstanding at March 31, 2020:
Contractual ObligationsPayments Due by Period
($ millions)			Total	Less than 1 Year						1 – 3 Years	3 – 5 Years								After 5 Years
Leases(1)			1,146			133	238	181			594
Loans and borrowings(2)			15,750			764	2,202	3,304						9,480
Construction commitments(3)			1,504			489	448	91			476
Other(4)			616			106	145	88			277
Total contractual obligations			19,016			1,492	3,033	3,664						10,827
(1)	Includes terminals, rail, office space, land and vehicle leases.
(2)	Excluding deferred financing costs. Including interest payments on senior unsecured notes.
(3)	Excluding significant projects that are awaiting regulatory approval at March 31, 2020, projects which Pembina is not committed to construct, and projects that are executed
by equity accounted investees.
(4)	Includes $46 million in commitments related to leases that have not yet commenced.
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 10 years and involve the purchase of NGL products from producers. Assuming product is available, Pembina has secured between 20 and 175 mbpd of NGL each year up to and including 2028. Power purchase agreements range from one to 25 years and involve the purchase of power from electrical service providers. Pembina has secured up to 71 megawatts per day each year up to and including 2043.
45	Pembina Pipeline Corporation First Quarter 2020

	Commitments to Equity Accounted Investees
	Pembina is contractually committed to provide CKPC with funding to construct assets that will form part of CKPC's PDH/PP Facility, subject to certain conditions being met. Following Pembina's decision to defer investment in CKPC, Pembina has deferred future contributions to CKPC.
	Pembina has a contractual commitment to advance U.S. $31 million to Ruby by March 31, 2021.
	Pembina has commitments to provide contributions to certain equity accounted investees based on annual budgets approved by the joint venture partners.
	Contingencies
	Pembina, its subsidiaries and its investments in equity accounted investees are subject to various legal and regulatory proceedings and actions 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. While the outcome of such actions and proceedings cannot be predicted with certainty, management believes that the resolutions of such actions and proceedings will not have a material impact on Pembina's financial position or results of operations.
	Letters of Credit
	Pembina has provided letters of credit to various third parties in the normal course of conducting business. The letters of credit include financial guarantees to counterparties for product purchases and sales, transportation services, utilities, engineering and construction services. The letters of credit have not had and are not expected to have a material impact on Pembina's financial position, earnings, liquidity or capital resources.
	At March 31, 2020 Pembina had $104 million (December 31, 2019: $103 million) in letters of credit issued to facilitate commercial transactions with third parties and to support regulatory requirements.
Pembina Pipeline Corporation First Quarter 2020 46

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.K, PPL.PR.M, 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