Exhibit 99.3



|Pembina Pipeline Corporation | 
|---------------------------- | 





MANAGEMENT'S
REPORT

The
audited Consolidated Financial Statements of Pembina Pipeline Corporation (the "Company" or "Pembina") are
the responsibility of Pembina's management. The financial statements have been prepared in accordance with International Financial
Reporting Standards as issued by the International Accounting Standards Board, using management's best estimates and judgments,
where appropriate.

Management
is responsible for the reliability and integrity of the financial statements, the notes to the financial statements and other
financial information contained in this report. In the preparation of these financial statements, estimates are sometimes necessary
because a precise determination of certain assets and liabilities is dependent on future events. Management believes such estimates
have been based on careful judgments and have been properly reflected in the accompanying financial statements.

Management's
Assessment of Internal Controls over Financial Reporting

Management
is responsible for establishing and maintaining adequateinternal control
over financial reporting, as defined in Rules 13a - 15(f) and 15d - 15(f) under the United States Securities Exchange Act of 1934,
as amended (the "Exchange Act") and under National Instrument 52-109 Certification of Disclosure in Issuers' Annual
and Interim Filings - (“NI 52-109”).

Management,
including the Chief Executive Officer ("CEO") and the Chief Financial Officer ("CFO"), has conducted an evaluation
of Pembina’s internal control over financial reporting based on criteria established in Internal Control - Integrated Framework
(1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based
on management’s assessment as at December 31, 2013, management has concluded that Pembina’s internal control over
financial reporting is effective.

Due
to its inherent limitations, internal control over financial reporting is not intendedto provide absolute assurance that a misstatement of Pembina’s
financial statements would be prevented or detected. Further, the evaluation of the effectiveness of internal control over financial
reporting was made as of a specific date, and continued effectiveness in future periods is subject to the risks that controls
may become inadequate.

The
Board of Directors of the Company (the "Board") is responsible for ensuring management fulfils its responsibilities
for financial reporting and internal control. The Board is assisted in exercising its responsibilities through the Audit Committee,
which consists of four non-management directors. The Audit Committee meets periodically with management and the auditors to satisfy
itself that management's responsibilities are properly discharged, to review the financial statements and to recommend approval
of the financial statements to the Board.



39









|Pembina Pipeline Corporation | 
|---------------------------- | 



KPMG
LLP, the independent auditors, have audited the Company's financial statements in accordance with Canadian generally accepted
auditing standards and Public Company Accounting Oversight Board (United States) , and have also audited the effectiveness of
Pembina's internal control over financial reporting as of December 31, 2013 and has included an attestation report on management's
assessment in their reports which follow. The independent auditors have full and unrestricted access to the Audit Committee to
discuss their audit and their related findings.







|                                          |                                                   
|----------------------------------------- | --------------------------------------------------
|Michael
    H. Dilger                     | Peter
    D. Robertson                            
|President and Chief
    Executive Officer | Senior Vice President,
    Chief Financial Officer
|Pembina Pipeline
    Corporation          | Pembina Pipeline
    Corporation                  
|                                          |                                                   
|February 26, 2014                         |                                                   









40











|Pembina Pipeline Corporation | 
|---------------------------- | 





| |                                     |                            
| | ----------------------------------- | ---------------------------
| | kpmg
    LLP                        | Telephone(403)
    691-8000
| | 205
    - 5th Avenue SW             | Fax(403)
    691-8008      
| | Suite
    3100, Bow Valley Square 2 | www.kpmg.ca                
| | Calgary
    AB                      |                            
| | T2P
    4B9                         |                            



INDEPENDENT
AUDITORS’ REPORT OF REGISTERED PUBLIC ACCOUNTING FIRM

To
the Shareholders and Board of Directors of Pembina Pipeline Corporation



We
have audited the accompanying consolidated financial statements of Pembina Pipeline Corporation (the “Corporation”),
which comprise the consolidated statements of financial position as at December 31, 2013 and December 31, 2012, the consolidated
statements of earnings and comprehensive income, changes in equity and cash flow for the years then ended, and notes, comprising
a summary of significant accounting policies and other explanatory information.



Management’s
Responsibility for the Consolidated Financial Statements

Management
is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International
Financial Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.



Auditors’
Responsibility

Our
responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits
in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free from material misstatement.



An
audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of
the consolidatedfinancial statements, whether due to fraud or error. In making those risk assessments, we consider internal
control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to
design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation
of the consolidated financial statements.



We
believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit
opinion.



Opinion

In our opinion,
the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Corporation
as at December 31, 2013 and December 31, 2012, and its consolidated financial performance and its consolidated cash flows for
the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting
Standards Board.



KPMG
LLP is a Canadian limited liability partnership and a member firm of the KPMG

network of independent
member firms affiliated with KPMG International Cooperative

(“KPMG International”),
a Swiss entity. KPMG Canada provides services to KPMG LLP.



KPMG Confidential



41













|Pembina Pipeline Corporation | 
|---------------------------- | 









Other
Matter

We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the
Corporation’s internal control over financial reporting as of December 31, 2013, based on the criteria established in
Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)
(1992), and our report dated February 26, 2014 expressed an unmodified (unqualified) opinion on the effectiveness of the
Corporation’s internal control over financial reporting.





Brian Rogers KPMG



Chartered
Accountants

Calgary,
Canada



February
26, 2014























KPMG
LLP is a Canadian limited liability partnership and a member firm of the KPMG

network of independent
member firms affiliated with KPMG International Cooperative

(“KPMG International”),
a Swiss entity. KPMG Canada provides services to KPMG LLP.



KPMG Confidential





42













|Pembina Pipeline Corporation | 
|---------------------------- | 



| |                                     |                            
| | ----------------------------------- | ---------------------------
| | kpmg
    LLP                        | Telephone(403)
    691-8000
| | 205
    - 5th Avenue SW             | Fax(403)
    691-8008      
| | Suite
    3100, Bow Valley Square 2 | www.kpmg.ca                
| | Calgary
    AB                      |                            
| | T2P
    4B9                         |                            



Report
of INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the
Shareholders and Board of Directors of Pembina Pipeline Corporation

We
have audited Pembina Pipeline Corporation (the “Corporation”) internal control over financial reporting as at
December 31, 2013, based on the criteria established in Internal Control - Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO) (1992). The Corporation’s management is responsible for
maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal
control over financial reporting, included in the accompanying Management’s Report to the Shareholders. Our
responsibility is to express an opinion on the Corporation’s internal control over financial reporting based on our
audit.

We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial
reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness
of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary
in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

An
entity’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. An entity’s internal control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the entity; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the entity are being made only in accordance with authorizations of management and directors of the entity; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition
of the entity’s assets that could have a material effect on the financial statements.

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our
opinion, the Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31,
2013, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO) (1992).

KPMG
LLP is a Canadian limited liability partnership and a member firm of the KPMG

network of independent
member firms affiliated with KPMG International Cooperative

(“KPMG International”),
a Swiss entity. KPMG Canada provides services to KPMG LLP.



KPMG Confidential



43









|Pembina Pipeline Corporation | 
|---------------------------- | 







We
also have audited, in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting
Oversight Board (United States), the consolidated statements of financial position of the Corporation as of December 31,
2013 and December 31, 2012, and the related consolidated statements of earnings and comprehensive income, changes in equity and
cash flow for the years then ended, and our report dated February 26, 2014 expressed an unmodified (unqualified) opinion on those
consolidated financial statements.



Brian Rogers KPMG

Chartered
Accountants

Calgary,
Canada



February
26, 2014









KPMG
LLP is a Canadian limited liability partnership and a member firm of the KPMG

network of independent
member firms affiliated with KPMG International Cooperative

(“KPMG International”),
a Swiss entity. KPMG Canada provides services to KPMG LLP.



KPMG Confidential



44









|Pembina Pipeline Corporation | 
|---------------------------- | 



CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION



|As at December 31 ($ millions)                           |  | Note |  | 2013 |        | 2012
|-------------------------------------------------------- |  | ---- |  | ---- | ------ | ----
|Assets Current assets                                    |  |      |  |      |        |     
|Cash and cash equivalents                                |  |      |  |      | 51     |     
|Trade receivables and other                              |  | 6    |  |      | 434    |     
|Derivative financial instruments                         |  | 22   |  |      | 4      |     
|Inventory                                                |  |      |  |      | 159    |     
|                                                         |  |      |  |      | 648    |     
|Non-current assets                                       |  |      |  |      |        |     
|Property, plant and equipment                            |  | 7    |  |      | 5,750  |     
|Intangible assets and goodwill                           |  | 8    |  |      | 2,564  |     
|Investments in equity accounted investees                |  | 9    |  |      | 165    |     
|Deferred tax assets                                      |  | 10   |  |      | 15     |     
|                                                         |  |      |  |      | 8,494  |     
|Total Assets                                             |  |      |  |      | 9,142  |     
|Liabilities and Shareholders' Equity Current liabilities |  |      |  |      |        |     
|Trade payables and accrued liabilities                   |  | 11   |  |      | 461    |     
|Taxes payable                                            |  |      |  |      | 38     |     
|Dividends payable                                        |  |      |  |      | 44     |     
|Loans and borrowings                                     |  | 12   |  |      | 262    |     
|Derivative financial instruments                         |  | 22   |  |      | 13     |     
|                                                         |  |      |  |      | 818    |     
|Non-current liabilities                                  |  |      |  |      |        |     
|Loans and borrowings                                     |  | 12   |  |      | 1,409  |     
|Convertible debentures                                   |  | 13   |  |      | 604    |     
|Derivative financial instruments                         |  | 22   |  |      | 107    |     
|Employee benefits, share-based payments and other        |  |      |  |      | 25     |     
|Provisions                                               |  | 14   |  |      | 309    |     
|Deferred tax liabilities                                 |  | 10   |  |      | 699    |     
|                                                         |  |      |  |      | 3,153  |     
|Total Liabilities                                        |  |      |  |      | 3,971  |     
|Equity                                                   |  |      |  |      |        |     
|Equity attributable to shareholders of the Company       |  |      |  |      |        |     
|Common share capital                                     |  | 15   |  |      | 5,972  |     
|Preferred share capital                                  |  | 15   |  |      | 391    |     
|Deficit                                                  |  |      |  |      | (1,189 | )   
|Accumulated other comprehensive income                   |  |      |  |      | (8     | )   
|                                                         |  |      |  |      | 5,166  |     
|Non-controlling interest                                 |  | 27   |  |      | 5      |     
|Total Equity                                             |  |      |  |      | 5,171  |     
|Total Liabilities and Equity                             |  |      |  |      | 9,142  |     















See
accompanying notes to the consolidated financial statements

45









|Pembina Pipeline Corporation | 
|---------------------------- | 



CONSOLIDATED
STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME



|Year Ended December 31 ($ millions, except per share amounts)                 |  | Note |  | 2013 |       | 2012
|----------------------------------------------------------------------------- |  | ---- |  | ---- | ----- | ----
|Revenue                                                                       |  | 18   |  |      | 5,025 |     
|Cost of sales                                                                 |  |      |  |      | 4,238 |     
|Gain on commodity-related derivative financial instruments                    |  |      |  |      | 6     |     
|Gross profit                                                                  |  | 18   |  |      | 793   |     
|General and administrative                                                    |  |      |  |      | 132   |     
|Acquisition-related and other expense                                         |  |      |  |      | 1     |     
|                                                                              |  |      |  |      | 133   |     
|Results from operating activities                                             |  |      |  |      | 660   |     
|Net finance costs                                                             |  | 17   |  |      | 166   |     
|Earnings before income tax                                                    |  |      |  |      | 494   |     
|                                                                              |  |      |  |      |       |     
|Current tax expense                                                           |  | 10   |  |      | 38    |     
|Deferred tax expense                                                          |  | 10   |  |      | 105   |     
|Income tax expense                                                            |  |      |  |      | 143   |     
|                                                                              |  |      |  |      |       |     
|Earnings for the year attributable to shareholders                            |  |      |  |      | 351   |     
|                                                                              |  |      |  |      |       |     
|Other comprehensive income (loss) that will never be reclassified to earnings |  |      |  |      |       |     
|Remeasurements of defined benefit liability                                   |  |      |  |      | 24    |     
|Related tax                                                                   |  |      |  |      | (6    | )   
|Other comprehensive income (loss), net of tax                                 |  | 20   |  |      | 18    |     
|Total comprehensive income attributable to shareholders                       |  |      |  |      | 369   |     
|Earnings per common share                                                     |  |      |  |      |       |     
|Basic and diluted earnings per common share(dollars)                          |  | 19   |  |      | 1.12  |     







































See
accompanying notes to the consolidated financial statements

46









|Pembina Pipeline Corporation | 
|---------------------------- | 



CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY



|                                                                      |      | Attributable
    to Shareholders of the Company |                          |        
|--------------------------------------------------------------------- | ---- | ----------------------------------------------- | ------------------------ | -------
|($
    millions)                                                      | Note | Common
        Shares                           | Preferred
        Shares | Deficit
|December
    31, 2011                                                 |      | 1,812                                           |                          | (835)  
|Total
    comprehensive income                                        |      |                                                 |                          |        
|Earnings                                                              |      |                                                 |                          | 225    
|Other
    comprehensive income                                        |      |                                                 |                          |        
|Defined
    benefit plan actuarial losses, net of tax                 | 20   |                                                 |                          |        
|Total
    comprehensive income                                        |      |                                                 |                          | 225    
|Transactions
    with shareholders of the Company                     |      |                                                 |                          |        
|Dividend
    reinvestment plan                                        | 15   | 219                                             |                          |        
|Share-based
    payment transactions, debenture conversions and other | 15   | 9                                               |                          |        
|Dividends
    declared - common                                       | 15   |                                                 |                          | (418)  
|Common
    shares issued on Acquisition                               | 15   | 3,284                                           |                          |        
|Total
    transactions with shareholders of the Company               |      | 3,512                                           |                          | (418)  
|Non-controlling
    interest assumed on Acquisition                   | 27   |                                                 |                          |        
|December
    31, 2012                                                 |      | 5,324                                           |                          | (1,028)
|                                                                      |      |                                                 |                          |        
|Total
    comprehensive income                                        |      |                                                 |                          |        
|Earnings                                                              |      |                                                 |                          | 351    
|Other
    comprehensive income                                        |      |                                                 |                          |        
|Defined
    benefit plan actuarial gains, net of tax                  | 20   |                                                 |                          |        
|Total
    comprehensive income                                        |      |                                                 |                          | 351    
|Transactions
    with shareholders of the Company                     |      |                                                 |                          |        
|Common
    shares issued, net of issue costs                          | 15   | 335                                             |                          |        
|Preferred
    shares issued, net of issue costs                       | 15   |                                                 | 391                      |        
|Dividend
    reinvestment plan                                        | 15   | 286                                             |                          |        
|Share-based
    payment transactions, debenture conversions and other | 15   | 27                                              |                          |        
|Dividends
    declared - common                                       | 15   |                                                 |                          | (507)  
|Dividends
    declared - preferred                                    | 15   |                                                 |                          | (5)    
|Total
    transactions with shareholders of the Company               |      | 648                                             | 391                      | (512)  
|December
    31, 2013                                                 |      | 5,972                                           | 391                      | (1,189)











See
accompanying notes to the consolidated financial statements

47









|Pembina Pipeline Corporation | 
|---------------------------- | 



CONSOLIDATED
STATEMENTS OF CASH FLOWS



|Year Ended December 31 ($ millions)                                        |  | Note |  | 2013 |      | 2012
|-------------------------------------------------------------------------- |  | ---- |  | ---- | ---- | ----
|Cash provided by (used in)                                                 |  |      |  |      |      |     
|Operating activities                                                       |  |      |  |      |      |     
|Earnings for the year                                                      |  |      |  |      | 351  |     
|Adjustments for                                                            |  |      |  |      |      |     
|Depreciation and amortization                                              |  |      |  |      | 171  |     
|Unrealized gain on commodity-related derivative financial instruments      |  |      |  |      | (7   | )   
|Net finance costs                                                          |  | 17   |  |      | 166  |     
|Deferred income tax expense                                                |  | 10   |  |      | 105  |     
|Share-based payments expense                                               |  | 21   |  |      | 34   |     
|Other                                                                      |  |      |  |      | 2    |     
|Changes in non-cash working capital                                        |  |      |  |      | (75  | )   
|Payments from equity accounted investees                                   |  |      |  |      | 19   |     
|Net interest paid                                                          |  | 17   |  |      | (115 | )   
|Cash flow from operating activities                                        |  |      |  |      | 651  |     
|Financing activities                                                       |  |      |  |      |      |     
|Bank borrowings                                                            |  |      |  |      | 170  |     
|Repayment of loans and borrowings                                          |  |      |  |      | (649 | )   
|Issuance of debt                                                           |  |      |  |      | 200  |     
|Issuance of common shares                                                  |  |      |  |      | 345  |     
|Issuance of preferred shares                                               |  |      |  |      | 400  |     
|Financing fees                                                             |  |      |  |      | (29  | )   
|Exercise of stock options                                                  |  |      |  |      | 17   |     
|Dividends paid (net of shares issued under the dividend reinvestment plan) |  |      |  |      | (221 | )   
|Cash flow from financing activities                                        |  |      |  |      | 233  |     
|Investing activities                                                       |  |      |  |      |      |     
|Capital expenditures                                                       |  |      |  |      | (880 | )   
|Changes in non-cash investing working capital and other                    |  |      |  |      | 33   |     
|Contributions to equity accounted investees                                |  |      |  |      | (13  | )   
|Cash acquired on Acquisition                                               |  | 27   |  |      |      |     
|Cash flow used in investing activities                                     |  |      |  |      | (860 | )   
|Change in cash                                                             |  |      |  |      | 24   |     
|Cash (bank indebtedness), beginning of year                                |  |      |  |      | 27   |     
|Cash and cash equivalents end of year                                      |  |      |  |      | 51   |     























See
accompanying notes to the consolidated financial statements

48







|Pembina Pipeline Corporation | 
|---------------------------- | 



NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS





|    |                                                         | Page
|--- | ------------------------------------------------------- | ----
|    |                                                         |     
|1.  | REPORTING
    ENTITY                                    | 50  
|2.  | BASIS OF PREPARATION                                    | 50  
|3.  | CHANGES IN ACCOUNTING
    POLICIES                      | 52  
|4.  | SIGNIFICANT ACCOUNTING
    POLICIES                     | 52  
|5.  | DETERMINATION
    OF FAIR VALUES                        | 65  
|6.  | TRADE RECEIVABLES
    AND OTHER                         | 66  
|7.  | PROPERTY, PLANT
    AND EQUIPMENT                       | 66  
|8.  | INTANGIBLE ASSETS
    AND GOODWILL                      | 67  
|9.  | INVESTMENTS IN
    EQUITY ACCOUNTED INVESTEES           | 68  
|10. | INCOME TAXES                                            | 68  
|11. | TRADE PAYABLES
    AND ACCRUED LIABILITIES              | 70  
|12. | LOANS AND BORROWINGS                                    | 70  
|13. | CONVERTIBLE DEBENTURES                                  | 71  
|14. | PROVISIONS                                              | 72  
|15. | SHARE CAPITAL                                           | 72  
|16. | PERSONNEL EXPENSES                                      | 74  
|17. | NET FINANCE COSTS                                       | 75  
|18. | OPERATING SEGMENTS                                      | 75  
|19. | EARNINGS PER COMMON
    SHARE                           | 77  
|20. | PENSION PLAN                                            | 78  
|21. | SHARE-BASED PAYMENTS                                    | 81  
|22. | FINANCIAL INSTRUMENTS
    AND FINANCIAL RISK MANAGEMENT | 83  
|23. | OPERATING LEASES                                        | 87  
|24. | CAPITAL MANAGEMENT                                      | 88  
|25. | GROUP ENTITIES                                          | 88  
|26. | RELATED PARTIES                                         | 89  
|27. | ACQUISITION                                             | 89  
|28. | SUBSEQUENT EVENTS                                       | 91  













49









|Pembina Pipeline Corporation | 
|---------------------------- | 



NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

| | 1. | REPORTING
ENTITY
| | -- | ----------------

Pembina
Pipeline Corporation ("Pembina" or the "Company") is an energy transportation and service provider domiciled
in Canada. The consolidated financial statements ("Financial Statements") include the accounts of the Company, its subsidiary
companies, partnerships and any interests in associates and jointly controlled entities as at and for the year ended December
31, 2013. These Financial Statements present fairly the financial position, financial performance and cash flows of the Company.

Pembina
owns or has interests in pipelines that transport conventional crude oil and natural gas liquids ("NGL"), oil sands
and heavy oil pipelines, gas gathering and processing facilities, and an NGL infrastructure and logistics business. Facilities
are located in Canada and in the U.S. Pembina also offers midstream services that span across its operations.

| | 2. | BASIS
                                         OF PREPARATION
| | -- | -------------------------------------------------------------

| | a. | Statement
of compliance
| | -- | -----------------------

The
Financial Statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as
issued by the International Accounting Standards Board ("IASB").

Certain
insignificant comparative amounts have been reclassified to conform with the presentation adopted in the current year.

The
Financial Statements were authorized for issue by the Board of Directors on February 26, 2014.

| | b. | Basis
of measurement
| | -- | --------------------

The
Financial Statements have been prepared on the historical cost basis except for the following items in the statement of financial
position:

| | • | derivative
                                                                                                                              financial
                                                                                                                              instruments
                                                                                                                              are
                                                                                                                              measured
                                                                                                                              at
                                                                                                                              estimated
                                                                                                                              fair
                                                                                                                              value;
                                                                                                                              and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | liabilities
                                                                                                                              for
                                                                                                                              cash-settled
                                                                                                                              share-based
                                                                                                                              payment
                                                                                                                              arrangements
                                                                                                                              are
                                                                                                                              measured
                                                                                                                              at
                                                                                                                              estimated
                                                                                                                              fair
                                                                                                                              value.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | c. | Functional
and presentation currency
| | -- | ------------------------------------

The
Financial Statements are presented in Canadian dollars, which is the functional currency of the Company and its subsidiaries.
All financial information presented in Canadian dollars has been disclosed in millions except where noted.

| | d. | Use
of estimates and judgments
| | -- | ------------------------------

The
preparation of the Financial Statements in conformity with IFRS requires management to make judgments, estimates and assumptions
that are based on the circumstances and estimates at the date of the financial statements and affect the application of accounting
policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Judgments,
estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the
period in which the estimates are revised and in any future periods affected.

The
following judgment and estimation uncertainties are those management considers material to the Company's financial statements:

50









|Pembina Pipeline Corporation | 
|---------------------------- | 



Judgments

| | (i) | Business
combinations
| | --- | ---------------------

Business
combinations are accounted for using the acquisition method of accounting. The determination of fair value often requires Management
to make judgments about future possible events. The assumptions with respect to determining the fair value of property, plant
and equipment and intangible assets acquired generally require the most judgment.

| | (ii) | Depreciation
and amortization
| | ---- | -----------------------------

Depreciation
and amortization of property, plant and equipment and intangible assets are based on management's judgment of the most appropriate
method to reflect the pattern of an asset's future economic benefit expected to be consumed by the Company. Among other factors,
these judgments are based on industry standards and historical experience.

Estimates

| | (i) | Business
Combinations
| | --- | ---------------------

Estimates
of future cash flows, forecast prices, interest rates and discount rates are made in determining the fair value of assets acquired
and liabilities assumed. Changes in any of the assumptions or estimates used in determining
the fair value of acquired assets and liabilities could impact the amounts assigned to assets, liabilities, intangible assets
and goodwill in the purchase price analysis. Future earnings can be affected as a result of changes in future depreciation
and amortization, asset or goodwill impairment.

| | (ii) | Provisions
and contingencies
| | ---- | ----------------------------

Provisions
recognized are based on management's judgment about assessing contingent liabilities and timing, scope and amount of liabilities.
Management uses judgment in determining the likelihood of realization of contingent assets and liabilities to determine the outcome
of contingencies.

Based
on the long-term nature of the decommissioning provision, the most significant uncertainties in estimating the provision are
the discount rates used, the costs that will be incurred and the timing of when these costs will occur. In addition,
in determining the provision it is assumed that the Company will utilize technology and materials that are
currently available.

| | (iii) | Deferred
taxes
| | ----- | --------------

The
calculation of the deferred tax asset or liability is based on assumptions about the timing of many taxable events and the enacted
or substantively enacted rates anticipated to apply to income in the years in which temporary differences are expected to be realized
or reversed.

| | (iv) | Depreciation
and amortization
| | ---- | -----------------------------

Estimated
useful lives of property, plant and equipment is based on management's assumptions and estimates of the physical useful lives
of the assets, the economic life, which may be associated with the reserve life and commodity type of the production area, in
addition to the estimated residual value.

| | (v) | Impairment
tests
| | --- | ----------------

Annual
goodwill impairment tests include management's estimates of future cash flows and discount rates.

51









|Pembina Pipeline Corporation | 
|---------------------------- | 



| | 3. | CHANGES
IN ACCOUNTING POLICIES
| | -- | ------------------------------

Except
for the changes below, accounting policies as disclosed in Note 4 have been applied to all periods consistently.

The
Company has adopted the following new standards and amendments to standards, including any consequential amendments to other standards,
as of January 1, 2013. The nature and effects of the changes are explained below:

| | a) | IFRS
                                                                                                                                        7
                                                                                                                                        Financial
                                                                                                                                        Instruments:
                                                                                                                                        Disclosures
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As
a result of the amendments to IFRS 7, the Company has reviewed and, when required, expanded its disclosures about the offsetting
of financial assets and financial liabilities. The amendment has had no significant impact to the Company's disclosure in the
financial statements.

| | b) | IFRS
                                                                                                                                        13
                                                                                                                                        Fair
                                                                                                                                        Value
                                                                                                                                        Measurement
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

IFRS
establishes a single framework for measuring fair value and making disclosures about fair value measurements when such measurements
are required or permitted by other IFRSs. The change had no significant impact on the measurements of the Company's assets and
liabilities

| | c) | IAS
                                                                                                                                        19
                                                                                                                                        Employee
                                                                                                                                        Benefits (2011)
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As
a result of IAS 19 (2011), the Company has changed its accounting policy with respect to the basis for determining the income
or expense related to its post-employment defined benefit plan.

Under
IAS 19 (2011), the Company determines net interest expense on the net defined benefit liability for the period by applying
the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net
defined benefit liability, taking into account any changes in the net defined benefit liability during the period as a result
of contributions and benefit payments. Consequently, the net interest on the net defined benefit liability now comprises:
interest cost on the defined benefit obligation and interest income on plan assets. Previously, the Company determined
interest income on plan assets based on their long-term expected rate of return.

The
quantitative impact is not material to the financial statements.

| | 4. | SIGNIFICANT
ACCOUNTING POLICIES
| | -- | -------------------------------

The
accounting policies as set out below have been applied consistently to all periods presented in these Financial Statements.

| | a. | Basis
of consolidation
| | -- | ----------------------

| | i) | Business
combinations
| | -- | ---------------------

The
Company measures goodwill as the fair value of the consideration transferred including the recognized amount of any non-controlling
interest in the acquiree, less the net recognized amount (generally fair value) of the identifiable assets acquired and liabilities
assumed, all measured as of the acquisition date. When the excess is negative, a bargain purchase gain is recognized immediately
in earnings.

52







|Pembina Pipeline Corporation | 
|---------------------------- | 



The
Company elects on a transaction-by-transaction basis whether to measure non-controlling interest at its fair value, or at its
proportionate share of the recognized amount of the identifiable net assets, at the acquisition date.

Non-controlling
interests represent equity interests in subsidiaries owned by outside parties. The share of net assets of subsidiaries attributable
to non-controlling interests is presented as a separate component of equity. Their share of net income and other comprehensive
income is also recognized in this separate component of equity. Changes in the Company's ownership interest in subsidiaries that
do not result in a loss of control are accounted for as equity transactions. Adjustments to non-controlling interests are based
on a proportionate amount of the net assets of the subsidiary. No adjustments are made to goodwill and no gain or loss is recognized
in earnings.

Transaction
costs, other than those associated with the issue of debt or equity securities, that the Company incurs in connection with a business
combination are expensed as incurred.

| | ii) | Subsidiaries
| | --- | ------------

Subsidiaries
are entities controlled by the Company. The financial statements of subsidiaries are included in the Financial Statements from
the date that control commences until the date that control ceases. The accounting policies of subsidiaries are aligned with the
policies adopted by the Company.

| | iii) | Investments
in associates and jointly controlled entities (equity accounted investees)
| | ---- | --------------------------------------------------------------------------------------

Associates
are those entities in which the Company has significant influence, but not control or joint control, over the financial and operating
policies. Significant influence is presumed to exist when the Company holds between 20 and 50 percent of the voting power of another
entity. Joint ventures are those entities over whose activities the Company has joint control, established by contractual agreement
and requiring unanimous consent for strategic financial and operating decisions.

The
Financial Statements include the Company's share of the earnings and other comprehensive income, after adjustments to align the
accounting policies with those of the Company, from the date that significant influence or joint control commences until the date
that significant influence or joint control ceases. The Company's investments in its associates and joint ventures are accounted
for using the equity method and are recognized initially at cost, including transaction costs.

When
the Company's share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest, including
any long-term investments, is reduced to nil, and the recognition of further losses is discontinued except to the extent that
the Company has an obligation or has made payments on behalf of the investee.

| | iv) | Jointly
controlled operations
| | --- | -----------------------------

A
jointly controlled operation is a joint venture carried on by each venture using its own assets in pursuit of the joint operations.
The Financial Statements include the assets that the Company controls and the liabilities that it incurs in the course of pursuing
the joint operation and the expenses that the Company incurs and its share of the income that it earns from the joint operation.

| | v) | Transactions
eliminated on consolidation
| | -- | ----------------------------------------

Intra-group
balances and transactions, and any unrealized revenue and expenses arising from intra-group transactions, are eliminated in preparing
the consolidated financial statements. Unrealized gains arising from transactions with equity-accounted investees are eliminated
against the investment to the extent of the Company's interest in the investee. Unrealized losses are eliminated in the same way
as unrealized gains, but only to the extent that there is no evidence of impairment.

53









|Pembina Pipeline Corporation | 
|---------------------------- | 



| | vi) | Foreign
currency
| | --- | ----------------

Transactions
in foreign currencies are translated to the Company's functional currency, Canadian dollars, at exchange rates at the dates of
the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to
the Company's functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the
difference between amortized cost in the functional currency at the beginning of the period, adjusted for effective interest and
payments during the period, and the amortized cost in foreign currency translated at the exchange rate at the end of the reporting
period.

Non-monetary
assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency
at the exchange rate at the date that the fair value was determined. Non-monetary items that are measured in terms of historical
cost in a foreign currency are translated using the exchange rate at the date of the transaction.

Foreign
currency differences arising on retranslation are recognized in earnings.

| | b. | Inventories
| | -- | -----------

Inventories
are measured at the lower of cost and net realizable value and consist primarily of crude oil and NGL. The cost of inventories
is determined using the weighted average costing method and includes direct purchase costs and when applicable, costs of production,
extraction, fractionation costs, and transportation costs. Net realizable value is the estimated selling price in the ordinary
course of business less the estimated selling costs. All changes in the value of the inventories are reflected in inventories
and cost of sales.

| | c. | Financial
instruments
| | -- | ---------------------

Financial
assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the
Company has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle
the liability simultaneously.

| | i) | Non-derivative
financial assets
| | -- | -------------------------------

The
Company initially recognizes loans and receivables and deposits on the date that they are originated. All other financial assets
(including assets designated at fair value through earnings) are recognized initially on the trade date at which the Company becomes
a party to the contractual provisions of the instrument.

The
Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the
rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and
rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained
by the Company is recognized as a separate asset or liability.

54









|Pembina Pipeline Corporation | 
|---------------------------- | 



The
Company classifies non-derivative financial assets into the following categories:

Cash
and cash equivalents

Cash
and cash equivalents comprise cash balances, call deposits and short-term investments with original maturities of ninety days
or less that are subject to an insignificant risk of changes in their fair value, and are used by the Company in the management
of its short-term commitments.

Trade
and other receivables

Trade
and other receivables are financial assets with fixed or determinable payments that are not quoted in an active market.

Such
assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition,
loans and receivables are measured at amortized cost using the effective interest method less any impairment losses.

| | ii) | Non-derivative
financial liabilities
| | --- | ------------------------------------

The
Company initially recognizes debt securities issued and subordinated liabilities on the date that they are originated. All other
financial liabilities (including liabilities designated at fair value through earnings) are recognized initially on the trade
date at which the Company becomes a party to the contractual provisions of the instrument.

The
Company derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire.

The
Company's non-derivative financial liabilities are comprised of the following: bank indebtedness, trade payables and accrued liabilities,
taxes payable, dividends payable, loans and borrowings including finance lease obligations and the liability component of convertible
debentures.

Such
financial liabilities are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial
recognition these financial liabilities are measured at amortized cost using the effective interest method.

Bank
overdrafts that are repayable on demand and form an integral part of the Company's cash management are included as a component
of cash and cash equivalents for the purpose of the statement of cash flows.

| | iii) | Common
share capital
| | ---- | --------------------

Common
shares are classified as equity. Incremental costs directly attributable to the issue of common shares and share options are recognized
as a deduction from equity, net of any tax effects.

| | iv) | Preferred
share capital
| | --- | -----------------------

Preferred
shares are classified as equity because they bear discretionary dividends and do not contain any obligations to deliver cash or
other financial assets. Discretionary dividends are recognized as equity distributions on approval by the Company's Board of Directors.
Incremental costs directly attributable to the issue of preferred shares are recognized as a deduction from equity, net of any
tax effects.

55









|Pembina Pipeline Corporation | 
|---------------------------- | 



| | v) | Compound
financial instruments
| | -- | ------------------------------

The
Company's convertible debentures are compound financial instruments consisting of a financial liability and an embedded conversion
feature. In accordance with IAS 39, the embedded derivatives are required to be separated from the host contracts and accounted
for as stand-alone instruments.

Debentures
containing a cash conversion option allow Pembina to pay cash to the converting holder of the debentures, at the option of the
Company. As such, the conversion feature is presented as a financial derivative liability within long-term derivative financial
instruments. Debentures without a cash conversion option are settled in shares on conversion, and therefore the conversion feature
is presented within equity, in accordance with its contractual substance.

On
initial recognition and at each reporting date, the embedded conversion feature is measured using a method whereby the fair value
is measured using an option pricing model. Subsequent to initial recognition, any unrealized gains or losses arising from fair
value changes are recognized through earnings in the statement of earnings and comprehensive income at each reporting date. If
the conversion feature is included in equity, it is not remeasured subsequent to initial recognition. On initial recognition,
the debt component, net of issue costs, is recorded as a financial liability and accounted for at amortized cost. Subsequent to
initial recognition, the debt component is accreted to the face value of the debentures using the effective interest rate method.
Upon conversion, the corresponding portions of the debt and equity are removed from those captions and transferred to share capital.

| | vi) | Derivative
financial instruments
| | --- | --------------------------------

The
Company holds derivative financial instruments to manage its interest rate, commodity, power costs and foreign exchange risk exposures
as well as cash conversion features on convertible debentures and a redemption liability. Embedded derivatives are separated from
the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded
derivative meet the definition of a derivative, and the combined instrument is not measured at fair value through earnings. Derivatives
are recognized initially at fair value with attributable transaction costs recognized in earnings as incurred. Subsequent to initial
recognition, derivatives are measured at fair value and changes in non-commodity-related derivatives are recognized immediately
in earnings in net finance costs and changes in commodity-related derivatives are recognized immediately in earnings in operating
activities.

| | d. | Property,
plant and equipment
| | -- | -----------------------------

| | i) | Recognition
and measurement
| | -- | ---------------------------

Items
of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.

Cost
includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes
the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for
their intended use, estimated decommissioning provisions and borrowing costs on qualifying assets.

Cost
also may include any gain or loss realized on foreign currency transactions directly attributable to the purchase or construction
of property, plant and equipment. Purchased software that is integral to the functionality of the related equipment is capitalized
as part of that equipment.

56







|Pembina Pipeline Corporation | 
|---------------------------- | 



When
parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate components of
property, plant and equipment.

The
gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with
the carrying amount of property, plant and equipment, and are recognized within other expense (income) in earnings.

| | ii) | Subsequent
costs
| | --- | ----------------

The
cost of replacing a part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is
probable that the future economic benefits embodied within the part will flow to the Company, and its cost can be measured reliably.
The carrying amount of the replaced part is derecognized. The cost of maintenance and repair expenses of the property, plant and
equipment are recognized in earnings as incurred.

| | iii) | Depreciation
| | ---- | ------------

Depreciation
is based on the cost of an asset less its residual value. Significant components of individual assets, other than land, are assessed
and if a component has a useful life that is different from the remainder of the asset, that component is depreciated separately.

Depreciation
is recognized in earnings on a straight line or declining balance basis, which most closely reflects the expected pattern of consumption
of the future economic benefits embodied in the asset. Pipeline assets and facilities are generally depreciated using the straight
line method over 27 to 75 years (an average of 51 years) or declining balance method at rates ranging from 3 percent to 37 percent
per annum (an average rate of 17 percent per annum). Facilities and equipment are depreciated using straight line method over
27 to 75 years (at an average rate of 38 years) or declining balance method at rates ranging from 8 to 37 percent (at an average
rate of 19 percent per annum). Other assets are depreciated using the straight line method over 3 to 60 years (an average of 39
years) or declining balance method at rates ranging from 6 percent to 21 percent (at an average rate of 7 percent per annum).
These rates are established to depreciate remaining net book value over the shorter of their useful lives, economic lives or contractual
duration of the related assets.

Leased
assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company
will obtain ownership by the end of the lease term.

Depreciation
methods, useful lives, economic lives and residual values are reviewed annually and adjusted if appropriate.

| | e. | Intangible
assets
| | -- | -----------------

| | i) | Goodwill
| | -- | --------

Goodwill
that arises upon acquisitions is included in intangible assets. See Note 4(a)(i) for the policy on measurement of goodwill at
initial recognition.

Subsequent
measurement

Goodwill
is measured at cost less accumulated impairment losses.

In
respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment, and
an impairment loss on such an investment is allocated to the investment and not to any asset, including goodwill, that forms the
carrying amount of the equity accounted investee.

57









|Pembina Pipeline Corporation | 
|---------------------------- | 



| | ii) | Other
intangible assets
| | --- | -----------------------

Other
intangible assets acquired individually by the Company and have finite useful lives are recognized and measured at cost less accumulated
amortization and accumulated impairment losses.

| | iii) | Subsequent
expenditures
| | ---- | -----------------------

Subsequent
expenditures are capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates.
All other expenditures are recognized in earnings as incurred.

| | iv) | Amortization
| | --- | ------------

Amortization
is based on the cost of an asset less its residual value.

Amortization
is recognized in earnings on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill,
from the date that they are available for use. The estimated useful lives of other intangible assets with finite useful lives
range from 2 to 33 years (at an average of 19 years).

Amortization
methods, useful lives and residual values are reviewed annually and adjusted if appropriate.

| | f. | Leased
assets
| | -- | -------------

Leases
which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. The leased asset
is initially recognized at an amount equal to the lower of its fair value and the present value of the minimum lease payments.
Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.

Other
leases are operating leases and are not recognized in the Company's statement of financial position.

| | g. | Lease
payments
| | -- | --------------

Payments
made under operating leases are recognized in earnings on a straight-line basis over the term of the lease. Lease incentives received
are recognized as an integral part of the total lease expense, over the term of the lease.

Minimum
lease payments made under finance leases are apportioned between the finance cost and the reduction of the outstanding liability.
The finance cost is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the
remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the
remaining life.

| | i) | Determining
whether an arrangement contains a lease
| | -- | ---------------------------------------------------

At
inception of an arrangement, the Company determines whether such an arrangement is or contains a lease. A specific asset is the
subject of a lease if fulfilment of the arrangement is dependent on the use of that specified asset. An arrangement conveys the
right to use the asset if the arrangement conveys to a lessee the right to control the use of the underlying asset.

At
inception or upon reassessment of the arrangement, the Company separates payments and other consideration required by such an
arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Company concludes,
for a finance lease, that it is impracticable to separate the payments reliably, an asset and liability are recognized at an amount
equal to the fair value of the underlying asset. Subsequently, the liability is reduced as payments are made and an imputed finance
cost on the liability is recognized using the Company's incremental borrowing rate.

58









|Pembina Pipeline Corporation | 
|---------------------------- | 



| | h. | Impairment
| | -- | ----------

| | i) | Non-derivative
financial assets
| | -- | -------------------------------

A
financial asset not carried at fair value through earnings is assessed at each reporting date to determine whether there is objective
evidence that it is impaired. A financial asset is impaired if there is objective evidence of impairment as a result of one or
more events that occurred after the initial recognition of the asset, and that a loss event had a negative effect on the estimated
future cash flows of that asset and the impact can be estimated reliably.

Objective
evidence that financial assets are impaired can include default or delinquency by a debtor, restructuring of an amount due to
the Company on terms that the Company would not consider otherwise, indications that a debtor or issuer will enter bankruptcy,
adverse changes in the payment status of borrowers or issuers in the Company, economic conditions that correlate with defaults
or the disappearance of an active market for a security or a significant or prolonged decline in the fair value below cost.

Trade
receivables ("Receivables")

The
Company considers evidence of impairment for Receivables at both a specific asset and collective level. All individually significant
Receivables are assessed for specific impairment. All individually significant Receivables found not to be specifically impaired
are then collectively assessed for any impairment that has been incurred but not yet identified. Receivables that are not individually
significant are collectively assessed for impairment by grouping together Receivables with similar risk characteristics.

In
assessing collective impairment, the Company uses historical trends of the probability of default, timing of recoveries and the
amount of loss incurred, adjusted for management's judgment as to whether current economic and credit conditions are such that
the actual losses are likely to be greater or less than suggested by historical trends.

An
impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying
amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate. Losses
are recognized in earnings and reflected in an allowance account against Receivables. Interest on the impaired asset continues
to be recognized through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease,
the decrease in impairment loss is reversed through earnings.

| | ii) | Non-financial
assets
| | --- | --------------------

The
carrying amounts of the Company's non-financial assets, other than linefill and assets arising from employee benefits and deferred
tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication
exists, the asset's recoverable amount is estimated.

For
goodwill and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount
is estimated each year at the same time. An impairment loss is recognized if the carrying amount of an asset or its related Cash
Generating Unit ("CGU") exceeds its estimated recoverable amount.

59









|Pembina Pipeline Corporation | 
|---------------------------- | 



The
recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value
in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset or CGU. For the purpose of impairment testing,
assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from
continuing use that are largely independent of the cash inflows of other assets or CGUs. For the purpose of goodwill impairment
testing, CGUs are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill
is monitored for internal purposes. Goodwill acquired in a business combination is allocated to CGUs or groups of CGUs that are
expected to benefit from the synergies of the combination.

The
Company's corporate assets do not generate separate cash inflows and are utilized by more than one CGU. Corporate assets are allocated
to CGUs on a reasonable and consistent basis and tested for impairment as part of the testing of the CGU to which the corporate
asset is allocated. If there is an indication that a corporate asset may be impaired, then the recoverable amount is determined
for the CGU to which the corporate asset belongs.

Impairment
losses are recognized in earnings. An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its
estimated recoverable amount. Impairment losses recognized in respect of CGUs are allocated first to reduce the carrying amount
of any goodwill allocated to the CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the CGU (group
of CGUs) on a pro rata basis.

An
impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognized in prior periods
are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is
reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed
only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortization, if no impairment loss had been recognized.

Goodwill
that forms part of the carrying amount of an investment in an associate is not recognized separately, and therefore is not tested
for impairment separately. Instead, the entire amount of the investment in an associate is tested for impairment as a single asset
when there is objective evidence that the investment in an associate may be impaired.

| | i. | Employee
benefits
| | -- | -----------------

| | i) | Defined
contribution plans
| | -- | --------------------------

A
defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity
and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution
pension plans are recognized as an employee benefit expense in earnings in the periods during which services are rendered by employees.
Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available.
Contributions to a defined contribution plan due more than 12 months after the end of the period in which the employees
render the service are discounted to their present value.

60







|Pembina Pipeline Corporation | 
|---------------------------- | 



| | ii) | Defined
benefit pension plans
| | --- | -----------------------------

A defined benefit pension plan is a post-employment
benefit plan other than a defined contribution plan. The Company's net obligation in respect of Defined Benefit Pension Plans
("Plans") is calculated separately for each plan by estimating the amount of future benefit that employees have earned
in return for their service in the current and prior periods, discounted to determine its present value, less the fair value of
any plan assets. The discount rate used to determine the present value is established by referencing market yields on high-quality
corporate bonds on the measurement date with cash flows that match the timing and amount of expected benefits.

The calculation is performed, at a minimum,
every three years by a qualified actuary using the actuarial cost method. When the calculation results in a benefit to the Company,
the recognized asset is limited to the present value of economic benefits available in the form of future expenses payable from
the plan, any future refunds from the plan or reductions in future contributions to the plan. In order to calculate the present
value of economic benefits, consideration is given to any minimum funding requirements that apply to any plan in the Company.
An economic benefit is available to the Company if it is realizable during the life of the plan or on settlement of the plan liabilities.



When
the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognized
in earnings immediately.

The
Company recognizes all actuarial gains and losses arising from defined benefit plans in other comprehensive income and expenses
related to defined benefit plans in personnel expenses in earnings.

The
Company recognizes gains or losses on the curtailment or settlement of a defined benefit plan when the curtailment or settlement
occurs. The gain or loss on curtailment comprises any resulting change in the fair value of plan assets, change in the present
value of defined benefit obligation and any related actuarial gains or losses and past service cost that had not previously been
recognized.

| | iii) | Short-term
employee benefits
| | ---- | ----------------------------

Short-term
employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A
liability is recognized for the amount expected to be paid under short-term cash bonus if the Company has a present legal or constructive
obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

| | iv) | Share-based
payment transactions
| | --- | --------------------------------

For
equity settled share-based payment plans, the fair value of the share-based payment at grant date is recognized as an expense,
with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The
amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting
conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that
meet the related service conditions at the vesting date.

61









|Pembina Pipeline Corporation | 
|---------------------------- | 



For
cash settled share-based payment plans, the fair value of the amount payable to employees is recognized as an expense with a corresponding
increase in liabilities, over the period that the employees unconditionally become entitled to payment. The liability is remeasured
at each reporting date and at settlement date. Any changes in the fair value of the liability are recognized as an expense in
earnings.

| | j. | Provisions
| | -- | ----------

A
provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions
are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the
time value of money and the risks specific to the liability. Provisions are remeasured at each reporting date based on the best
estimate of the settlement amount. The unwinding of the discount rate (accretion) is recognized as a finance cost.

Decommissioning
obligation

The
Company's activities give rise to dismantling, decommissioning and site disturbance remediation activities. A provision is made
for the estimated cost of site restoration and capitalized in the relevant asset category.

Decommissioning
obligations are measured at the present value, based on a risk free rate, of management's best estimate of expenditure required
to settle the obligation at the balance sheet date. Subsequent to the initial measurement, the obligation is adjusted at the end
of each period to reflect the passage of time, changes in the risk free rate and changes in the estimated future cash flows underlying
the obligation. The increase in the provision due to the passage of time is recognized as finance costs whereas increases or decreases
due to changes in the estimated future cash flows or risk free rate are added to or deducted from the cost of the related asset.

| | k. | Revenue
| | -- | -------

Revenue
in the course of ordinary activities is measured at the fair value of the consideration received or receivable. Revenue is recognized
when persuasive evidence exists that the significant risks and rewards of ownership have been transferred to the customer or the
service has been provided, recovery of the consideration is probable, the associated costs can be estimated reliably, there is
no continuing management involvement with the goods, and the amount of revenue can be measured reliably.

The
timing of the transfer of significant risks and rewards varies depending on the individual terms of the sales or service agreement.
For product sales, usually transfer of significant risks and rewards occurs when the product is delivered to a customer. For pipeline
transportation revenues and storage revenue, transfer of significant risks and rewards usually occurs when the service is provided
as per the contract with the customer. For rate or contractually regulated pipeline operations, revenue is recognized in a manner
that is consistent with the underlying rate design as mandated by agreement or regulatory authority.

Certain
commodity buy/sell arrangements where the risks and rewards of ownership have not transferred are recognized on a net basis in
earnings.

| | l. | Finance
income and finance costs
| | -- | --------------------------------

Finance
income comprises interest income on funds deposited and invested, gains on non-commodity-related derivatives measured at fair
value through earnings and foreign exchange gains. Interest income is recognized as it accrues in earnings, using the effective
interest method.

62









|Pembina Pipeline Corporation | 
|---------------------------- | 



Finance
costs comprise interest expense on loans and borrowings, unwinding of discount rate on provisions, losses on disposal of available
for sale financial assets, losses on non-commodity-related derivatives, impairment losses recognized on financial assets (other
than trade and other receivables) and foreign exchange losses.

Borrowing
costs that are not directly attributable to the acquisition or construction of a qualifying asset are recognized in earnings
using the effective interest method.

| | m. | Income
tax
| | -- | ----------

Income
tax expense comprises current and deferred tax. Current and deferred taxes are recognized in earnings except to the extent that
it relates to a business combination, or items are recognized directly in equity or in other comprehensive income.

Current
tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred
tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. Deferred tax is not recognized for:

| | • | temporary
                                                                                                                              differences
                                                                                                                              on
                                                                                                                              the
                                                                                                                              initial
                                                                                                                              recognition
                                                                                                                              of
                                                                                                                              assets
                                                                                                                              or
                                                                                                                              liabilities
                                                                                                                              in
                                                                                                                              a
                                                                                                                              transaction
                                                                                                                              that
                                                                                                                              is
                                                                                                                              not
                                                                                                                              a
                                                                                                                              business
                                                                                                                              combination
                                                                                                                              and
                                                                                                                              that
                                                                                                                              affects
                                                                                                                              neither
                                                                                                                              accounting
                                                                                                                              nor
                                                                                                                              taxable
                                                                                                                              earnings;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | temporary
                                                                                                                              differences
                                                                                                                              relating
                                                                                                                              to
                                                                                                                              investments
                                                                                                                              in
                                                                                                                              subsidiaries
                                                                                                                              and
                                                                                                                              jointly
                                                                                                                              controlled
                                                                                                                              entities
                                                                                                                              to
                                                                                                                              the
                                                                                                                              extent
                                                                                                                              that
                                                                                                                              it
                                                                                                                              is
                                                                                                                              probable
                                                                                                                              that
                                                                                                                              they
                                                                                                                              will
                                                                                                                              not
                                                                                                                              reverse
                                                                                                                              in
                                                                                                                              the
                                                                                                                              foreseeable
                                                                                                                              future;
                                                                                                                              and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | taxable
                                                                                                                              temporary
                                                                                                                              differences
                                                                                                                              arising
                                                                                                                              on
                                                                                                                              the
                                                                                                                              initial
                                                                                                                              recognition
                                                                                                                              of
                                                                                                                              goodwill.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
measurement of deferred tax reflects the tax consequences that would follow the manner in which the Company expects, at the end
of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred
tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws
that have been enacted or substantively enacted by the reporting date.

Deferred
tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and
they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they
intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

A
deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it
is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed
at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

In
determining the amount of current and deferred tax, the Company takes into account the impact of uncertain tax positions and whether
additional taxes and interest may be due. This assessment relies on estimates and assumptions and may involve a series of judgments
about future events. New information may become available that causes the Company to change its judgment regarding the adequacy
of existing tax liabilities, such changes to tax liabilities will impact tax expense in the period that such a determination is
made.

63









|Pembina Pipeline Corporation | 
|---------------------------- | 



| | n. | Earnings
per common share
| | -- | -------------------------

The
Company presents basic and diluted earnings per common share ("EPS") data for its common shares. Basic EPS is
calculated by dividing the earnings attributable to common shareholders of the Company by the weighted average number of
common shares outstanding during the period. Earnings attributable to shareholders are  adjusted for accumulated preferred
dividends. Diluted EPS is determined by adjusting the earnings attributable to common shareholders and the weighted average
number of common shares outstanding, for the effects of all potentially dilutive common shares, which comprise convertible
debentures and share options granted to employees ("Convertible Instruments"). Only outstanding and Convertible
Instruments that will have a dilutive effect are included in fully diluted calculations.

The
dilutive effect of Convertible Instruments is determined whereby outstanding Convertible Instruments at the end of the period
are assumed to have been converted at the beginning of the period or at the time issued if issued during the year. Amounts charged
to earnings relating to the outstanding Convertible Instruments are added back to earnings for the diluted calculations. The shares
issued upon conversion are included in the denominator of per share basic calculations for the date of issue.

| | o. | Segment
reporting
| | -- | -----------------

An
operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to transactions with any of the Company's other components. All operating
segments' operating results are reviewed regularly by the Company's Chief Executive Officer ("CEO"), Chief Financial
Officer ("CFO") and Senior Vice Presidents ("SVPs") to make decisions about resources to be allocated to the
segment and assess its performance, and for which discrete financial information is available.

Segment
results that are reported to the CEO, CFO and SVPs include items directly attributable to a segment as well as those that can
be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, corporate general and administrative expenses,
finance income and costs and income tax assets and liabilities.

Segment
capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and intangible assets
other than goodwill.

| | p. | Cash
flow statements
| | -- | --------------------

The
cash flow statement is prepared using the indirect method for calculating cash flow from operating activities. Changes in balance
sheet items that have not resulted in cash flows such as share-based payment expense, unrealized gains and losses, depreciation
and amortization, employee future benefit expenses, deferred income tax expense, share of profit from equity accounted investees,
among others, have been eliminated for the purpose of preparing this statement. Dividends paid to ordinary shareholders, among
other expenditures, are included in financing activities. Interest paid is included in operating activities.

| | q. | New
standards and interpretations not yet adopted
| | -- | -------------------------------------------------

Certain
new standards, interpretations, amendments and improvements to existing standards were issued by the IASB or International Financial
Reporting Interpretations Committee ("IFRIC") for accounting periods beginning on or after January 1, 2014. The Company
has reviewed these and determined the following:

IFRS
9 (2010) Financial Instruments: Does not have a mandatory effective date but is available for adoption. The Company is
currently evaluating the impact that the standard will have on its results of operations and financial position and is assessing
when adoption will occur.

IAS
32 Financial Instruments: Presentation is effective for annual periods beginning on or after January 1, 2014. The Company
is currently evaluating the impact that the standard will have on its results of operations and financial position.

64







|Pembina Pipeline Corporation | 
|---------------------------- | 



IFRIC
21 Levies:Interpretation is effective for annual periods beginning on or after January 1, 2014. The Company is currently
evaluating the impact that the standard will have on its results of operations and financial position.

| | 5. | 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 following methods.
When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific
to that asset or liability.

| | i) | Property,
plant and equipment
| | -- | -----------------------------

The
fair value of property, plant and equipment recognized as a result of a business combination is based on market values when available
and depreciated replacement cost when appropriate. Depreciated replacement cost reflects adjustments for physical deterioration
as well as functional and economic obsolescence.

| | ii) | Intangible
assets
| | --- | -----------------

The
fair value of intangible assets acquired in a business combination is determined using the multi-period excess earnings method,
whereby the subject asset is valued after deducting a fair return on all other assets that are part of creating the related cash
flows.

The
fair value of other intangible assets is based on the discounted cash flows expected to be derived from the use and eventual sale
of the assets.

| | iii) | Derivatives
| | ---- | -----------

Fair
value of derivatives are estimated by reference to independent monthly forward settlement prices, interest rate yield curves,
currency rates, quoted market prices per share and volatility rates at the period ends.

Fair
values reflect the credit risk of the instrument and include adjustments to take account of the credit risk of the company, entity
and counterparty when appropriate.

| | iv) | Non-derivative
financial assets and liabilities
| | --- | -----------------------------------------------

Fair
value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest
cash flows, discounted at the market rate of interest at the reporting date. In respect of the convertible debentures, the fair
value is determined by the market price of the convertible debenture on the reporting date. For finance leases the market rate
of interest is determined by reference to similar lease agreements.

| | v) | Share-based
                                                                                                                                 payment
                                                                                                                                 transactions
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
fair value of the employee share options is measured using the Black-Scholes formula. Measurement inputs include share price on
measurement date, exercise price of the instrument, expected volatility (based on weighted average historic volatility adjusted
for changes expected due to publicly available information), weighted average expected life of the instruments (based on historical
experience and general option holder behaviour), expected dividends, expected forfeitures and the risk-free interest rate (based
on government bonds). Service and non-market performance conditions attached to the transactions are not taken into account in
determining fair value.

The
fair value of the long-term share unit award incentive plan and associated distribution units are measured based on the reporting
date market price of the Company's shares. Expected dividends are not taken into account in determining fair value as they are
issued as additional distribution share units.

65









|Pembina Pipeline Corporation | 
|---------------------------- | 



| | vi) | Inventories
| | --- | -----------

The
net realizable value of inventories is determined based on the estimated selling price in the ordinary course of business less
estimated cost to sell.

6.	TRADE
RECEIVABLES AND OTHER

|December 31($ millions)                                              |  | 2013 |     | 2012
|-------------------------------------------------------------------- |  | ---- | --- | ----
|Trade accounts receivable from customers                             |  |      | 419 |     
|Trade accounts receivable and other receivables from related parties |  |      |     |     
|Prepayments                                                          |  |      | 15  |     
|Total current trade and other receivables                            |  |      | 434 |     



7.	PROPERTY,
PLANT AND EQUIPMENT

|($ millions)                        |  | Land and Land Rights |     | Pipelines |  | Facilities and Equipment |       | Linefill and Other |  | Assets Under Construction |       | Total
|----------------------------------- |  | -------------------- | --- | --------- |  | ------------------------ | ----- | ------------------ |  | ------------------------- | ----- | -----
|Cost                                |  |                      |     |           |  |                          |       |                    |  |                           |       |      
|Balance at December 31, 2011        |  |                      | 67  |           |  |                          | 2,500 |                    |  |                           | 529   |      
|Acquisition (Note 27)               |  |                      | 18  |           |  |                          | 276   |                    |  |                           | 1,319 |      
|Additions                           |  |                      | 6   |           |  |                          | 20    |                    |  |                           | 38    |      
|Change in decommissioning provision |  |                      |     |           |  |                          | (140  | )                  |  |                           | (31   | )    
|Capitalized interest                |  |                      |     |           |  |                          |       |                    |  |                           |       |      
|Transfers                           |  |                      | 2   |           |  |                          | (61   | )                  |  |                           | 218   |      
|Disposals and other                 |  |                      | (5  | )         |  |                          | (1    | )                  |  |                           | (1    | )    
|Balance at December 31, 2012        |  |                      | 88  |           |  |                          | 2,594 |                    |  |                           | 2,072 |      
|Additions                           |  |                      | 7   |           |  |                          | 104   |                    |  |                           | 285   |      
|Change in decommissioning provision |  |                      |     |           |  |                          | (19   | )                  |  |                           | (8    | )    
|Capitalized interest                |  |                      |     |           |  |                          | 5     |                    |  |                           | 5     |      
|Transfers                           |  |                      | 11  |           |  |                          | 105   |                    |  |                           | 320   |      
|Disposals and other                 |  |                      |     |           |  |                          | (6    | )                  |  |                           | (4    | )    
|Balance at December 31, 2013        |  |                      | 106 |           |  |                          | 2,783 |                    |  |                           | 2,670 |      
|                                    |  |                      |     |           |  |                          |       |                    |  |                           |       |      
|Depreciation                        |  |                      |     |           |  |                          |       |                    |  |                           |       |      
|Balance at December 31, 2011        |  |                      | 4   |           |  |                          | 707   |                    |  |                           | 93    |      
|Depreciation                        |  |                      |     |           |  |                          | 71    |                    |  |                           | 54    |      
|Transfers                           |  |                      |     |           |  |                          | 1     |                    |  |                           | 25    |      
|Disposals                           |  |                      |     |           |  |                          | (2    | )                  |  |                           |       |      
|Balance at December 31, 2012        |  |                      | 4   |           |  |                          | 777   |                    |  |                           | 172   |      
|Depreciation                        |  |                      | 1   |           |  |                          | 52    |                    |  |                           | 73    |      
|Transfers                           |  |                      |     |           |  |                          |       |                    |  |                           |       |      
|Disposals and other                 |  |                      |     |           |  |                          | (5    | )                  |  |                           | (4    | )    
|Balance at December 31, 2013        |  |                      | 5   |           |  |                          | 824   |                    |  |                           | 241   |      
|                                    |  |                      |     |           |  |                          |       |                    |  |                           |       |      
|Carrying amounts                    |  |                      |     |           |  |                          |       |                    |  |                           |       |      
|December 31, 2012                   |  |                      | 84  |           |  |                          | 1,817 |                    |  |                           | 1,900 |      
|December 31, 2013                   |  |                      | 101 |           |  |                          | 1,959 |                    |  |                           | 2,429 |      



66







|Pembina Pipeline Corporation | 
|---------------------------- | 



Property,
plant and equipment under construction

Costs
of assets under construction at December 31, 2013 totalled $636 million ($2012: $752 million) including capitalized borrowing
costs.

For
the year ended December 31, 2013, capitalized borrowing costs related to the construction of the new pipelines or facilities amounted
to $35 million (2012: $14 million), with capitalization rates ranging from 4.4 percent to 5.0 percent (2012: 4.3 percent to 4.8
percent).

Commitments

At
December 31, 2013, the Company has contractual commitments for the acquisition and or construction of property, plant and equipment
of $1,322 million (December 31, 2012: $363 million).

8.	INTANGIBLE
ASSETS AND GOODWILL

|                                              |  |  |          |   |  |  | Intangible Assets           |  |  |  |                       
|--------------------------------------------- |  |  | -------- | - |  |  | --------------------------- |  |  |  | ----------------------
|($ millions)                                  |  |  | Goodwill |   |  |  | Purchase and Sale Contracts |  |  |  | Customer Relationships
|Cost                                          |  |  |          |   |  |  |                             |  |  |  |                       
|Balance at December 31, 2011                  |  |  | 223      |   |  |  | 23                          |  |  |  |                       
|Acquisition (Note 27)                         |  |  | 1,753    |   |  |  | 157                         |  |  |  | 227                   
|Additions and other                           |  |  |          |   |  |  | 5                           |  |  |  |                       
|Balance at December 31, 2012                  |  |  | 1,976    |   |  |  | 185                         |  |  |  | 227                   
|Additions and other                           |  |  | (10      | ) |  |  | 3                           |  |  |  |                       
|Balance at December 31, 2013                  |  |  | 1,966    |   |  |  | 188                         |  |  |  | 227                   
|                                              |  |  |          |   |  |  |                             |  |  |  |                       
|Amortization                                  |  |  |          |   |  |  |                             |  |  |  |                       
|Accumulated amortization at December 31, 2011 |  |  |          |   |  |  | 2                           |  |  |  |                       
|Amortization                                  |  |  |          |   |  |  | 25                          |  |  |  | 15                    
|Balance at December 31, 2012                  |  |  |          |   |  |  | 27                          |  |  |  | 15                    
|Amortization                                  |  |  |          |   |  |  | 33                          |  |  |  | 19                    
|Balance at December 31, 2013                  |  |  |          |   |  |  | 60                          |  |  |  | 34                    
|                                              |  |  |          |   |  |  |                             |  |  |  |                       
|Carrying amounts                              |  |  |          |   |  |  |                             |  |  |  |                       
|December 31, 2012                             |  |  | 1,976    |   |  |  | 158                         |  |  |  | 212                   
|December 31, 2013                             |  |  | 1,966    |   |  |  | 128                         |  |  |  | 193                   

The
purchase option of $277 million to acquire property, plant and equipment is not being amortized because it is not exercisable
until 2018.

The
aggregate carrying amount of intangible assets and goodwill allocated to each operating segment is as follows:

|($ millions) December 31 |  | 2013 |       | 2012
|------------------------ |  | ---- | ----- | ----
|Conventional Pipelines   |  |      | 316   |     
|Oil Sands and Heavy Oil  |  |      | 33    |     
|Gas Services             |  |      | 195   |     
|Midstream                |  |      | 2,020 |     
|                         |  |      | 2,564 |     

Impairment
testing

For
the purpose of impairment testing, goodwill is allocated to the Company's operating segments which represent the lowest level
within the Company at which the goodwill is monitored for internal management purposes. Impairment testing for goodwill was performed
at December 31, 2013. The recoverable amounts were based on their value in use and were determined to be higher than their carrying
amounts.

67







|Pembina Pipeline Corporation | 
|---------------------------- | 



Value
in use was determined by discounting the future cash flows generated from the continuing use of each CGU. The
calculation of the value in use was based on the following key assumptions:

Cash
flows were projected based on past experience, actual operating results and the first 5 years of the business plan approved by
management. Cash flows for periods up to 75 years were extrapolated using a constant medium-term inflation rate of 2 percent.
Pre-tax discount rates between 8.6 percent and 9.4 percent were applied in determining the recoverable amount of the CGUs. The discount rates were estimated based on past experience, the Company's risk free rate and average cost of debt in addition
to estimates of the specific CGU's equity risk premium, size premium, small capitalization premium, projection
risk, betas, tax rate and industry targeted debt to equity ratios.

9.	INVESTMENTS
IN EQUITY ACCOUNTED INVESTEES

The
Company has a 50 percent interest in two jointly controlled, equity accounted investees (Fort Saskatchewan Ethylene Storage Corporation
and Fort Saskatchewan Ethylene Storage Limited Partnership) that are reported using the equity method of accounting. The carrying
value of the investment at December 31, 2013 is $165 million (2012: $161 million).

At
December 31, 2013, the Company has contractual commitments for additional investment in its equity accounted investees of $24
million (December 31, 2012: NIL).

10.	INCOME
TAXES

The
components of the deferred tax assets and deferred tax liabilities are as follows:

|($ millions) December 31                    |  | 2013 |      | 2012
|------------------------------------------- |  | ---- | ---- | ----
|Deferred income tax assets                  |  |      |      |     
|Derivative financial instruments            |  |      | 6    |     
|Provisions                                  |  |      | 78   |     
|Benefit of loss carryforwards               |  |      | 14   |     
|Other deductible temporary differences      |  |      | 22   |     
|                                            |  |      |      |     
|Deferred income tax liabilities             |  |      |      |     
|Property, plant and equipment               |  |      | (588 | )   
|Intangible assets                           |  |      | (124 | )   
|Investments in equity accounted investees   |  |      | (17  | )   
|Taxable limited partnership income deferral |  |      | (64  | )   
|Other taxable temporary differences         |  |      | (11  | )   
|Net deferred tax liabilities(1)             |  |      | (684 | )   

| | (1) | The
                                                                    Company has recognized a net deferred tax asset of $15 million
                                                                    (December 31, 2012: $8 million) relating to its U.S. subsidiaries.
                                                                    The Company has determined that it is probable that future
                                                                    taxable profits will be sufficient to utilize the deferred
                                                                    tax asset.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
Company's consolidated effective tax rate for the year ended December 31, 2013 was 25 percent (2012: 25 percent).

68









|Pembina Pipeline Corporation | 
|---------------------------- | 



Reconciliation
of effective tax rate

|Year Ended December 31($ millions, except as noted) |  | 2013 |     | 2012
|--------------------------------------------------- |  | ---- | --- | ----
|Earnings before income tax                          |  |      | 494 |     
|                                                    |  |      |     |     
|Statutory tax rate (percent)                        |  |      | 25  | %   
|                                                    |  |      |     |     
|Income tax at statutory rate                        |  |      | 124 |     
|Tax rate changes on deferred income tax balances    |  |      | 1   |     
|Changes in estimate and other                       |  |      | (2  | )   
|Permanent items                                     |  |      | 13  |     
|Other                                               |  |      | 7   |     
|Income tax expense                                  |  |      | 143 |     

Income
tax expense

|Year Ended December 31($ millions)                |  | 2013 |     | 2012
|------------------------------------------------- |  | ---- | --- | ----
|Current tax expense                               |  |      | 38  |     
|Deferred tax expense                              |  |      |     |     
|Origination and reversal of temporary differences |  |      | 51  |     
|Tax rate changes on deferred tax balances         |  |      | 1   |     
|Decrease in tax loss carry forward                |  |      | 53  |     
|Total deferred tax expense                        |  |      | 105 |     
|Total income tax expense                          |  |      | 143 |     

The
movement of the net deferred tax liability is as follows:

|($ millions)                                               |  | 2013 |     | 2012
|---------------------------------------------------------- |  | ---- | --- | ----
|Balance at January 1                                       |  |      | 584 |     
|Deferred income tax expense                                |  |      | 105 |     
|Income tax expense (benefit) in other comprehensive income |  |      | 6   |     
|Acquisition (Note 27)                                      |  |      | (3  | )   
|Preferred share issue costs                                |  |      | (7  | )   
|Other                                                      |  |      | (1  | )   
|Balance at December 31                                     |  |      | 684 |     

Deferred
tax items recovered directly in equity

|Year Ended December 31 ($ millions)             |  | 2013 |    | 2012
|----------------------------------------------- |  | ---- | -- | ----
|Preferred share issue costs                     |  |      | 7  |     
|Other comprehensive (income) loss               |  |      | (6 | )   
|Deferred tax items recovered directly in equity |  |      | 1  |     

Cash
taxes received during the year were $2 million (2012: nil)

The
Company has temporary differences associated with its investments in foreign subsidiaries, branches, and interests in joint ventures.
At December 31, 2013, the Company has not recorded a deferred tax asset or liability for these temporary differences (December
31, 2012: nil) as the Company controls the timing of the reversal and it is not probable that the temporary differences will reverse
in the foreseeable future.

At
December 31, 2013, the Company had $37 million (December 31, 2012: $35 million) of U.S. tax losses that will expire after 2030.
The Company has recorded deferred tax assets in respect of these losses, as it has been determined that it is probable that future
taxable profits will be sufficient to utilize these losses.

69







|Pembina Pipeline Corporation | 
|---------------------------- | 



11.	TRADE
PAYABLES AND ACCRUED LIABILITIES

|December 31($ millions)                  |  | 2013 |     | 2012
|---------------------------------------- |  | ---- | --- | ----
|Trade payables                           |  |      | 359 |     
|Non-trade payables & accrued liabilities |  |      | 102 |     
|                                         |  |      | 461 |     

12.	LOANS
AND BORROWINGS

This
note provides information about the contractual terms of the Company's interest-bearing loans and borrowings, which are measured
at amortized cost.

Carrying
value, terms and conditions, and debt maturity schedule

Terms
and conditions of outstanding loans were as follows:

|December
    31 ($ millions)               |                                                |                                                      |                       | Carrying
    amount
|------------------------------------------ | ---------------------------------------------- | ---------------------------------------------------- | --------------------- | -------------------
|                                           | Available
    facilities at
 December 31, 2013 | Nominal

    interest rate                           | Year
    of
 maturity | 2013               
|Operating
    facility(3)                  | 30                                             | prime
        + 0.45
        or
        BA(2)+ 1.45  | 2014(1)               |                    
|Revolving
    unsecured credit facility(3) | 1,500                                          | prime
        + 0.45
        or
        BA(2) + 1.45 | 2018                  | 46                 
|Senior
    unsecured notes - Series A      | 175                                            | 5.99                                                 | 2014                  | 175                
|Senior
    unsecured notes - Series C      | 200                                            | 5.58                                                 | 2021                  | 197                
|Senior
    unsecured notes - Series D      | 267                                            | 5.91                                                 | 2019                  | 266                
|Senior
    unsecured term facility         | 75                                             | 6.16                                                 | 2014                  | 75                 
|Senior
    unsecured medium-term notes 1   | 250                                            | 4.89                                                 | 2021                  | 249                
|Senior
    unsecured medium-term notes 2   | 450                                            | 3.77                                                 | 2022                  | 448                
|Senior
    unsecured medium-term notes 3   | 200                                            | 4.75                                                 | 2043                  | 198                
|Subsidiary
    debt                        | 8                                              | 5.04                                                 | 2014                  | 8                  
|Finance
    lease liabilities              |                                                |                                                      |                       | 9                  
|Total
    interest bearing liabilities     | 3,155                                          |                                                      |                       | 1,671              
|Less
    current portion                   |                                                |                                                      |                       | (262)              
|Total
    non-current                      |                                                |                                                      |                       | 1,409              

| | (1) | Operating
                                                                       facility expected to be renewed on an annual basis.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Bankers'
                                                                       Acceptance.
| | --- | -------------------------------------------------------------------------------------------

| | (3) | The
                                                                       nominal interest rate is based on the Company's credit
                                                                       rating at December 31, 2013.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

All
facilities are governed by specific debt covenants which Pembina has been in compliance with during the years ended December 31,
2013 and 2012.

For
more information about the Company's exposure to interest rate, foreign currency and liquidity risk, see financial instruments
and financial risk management Note 22.

70









|Pembina Pipeline Corporation | 
|---------------------------- | 



13.	CONVERTIBLE
DEBENTURES

|($
    millions, except as noted)                 | Series
    C
 - 5.75%      | Series
    E
 - 5.75%                           | Series
    F -
 5.75%                           | Total
|------------------------------------------------- | -------------------------- | ----------------------------------------------- | ----------------------------------------------- | -----
|Conversion
    price (dollars)                    | $28.55                     | $24.94                                          | $29.53                                          |      
|Interest
    payable semi-annually in arrears on: | May
    31 and November 30 | June
        30 and
        December
        31 | June
        30 and
        December
        31 |      
|Maturity
    date                                 | November
    30, 2020      | December
    31, 2017                           | December
    31, 2018                           |      
|Balance
    at December 31, 2011                  | 289                        |                                                 |                                                 | 289  
|Assumed
    on Acquisition(1) (Note 27)           |                            | 159                                             | 158                                             | 317  
|Conversions
    and redemptions                   |                            | (1)                                             |                                                 | (1)  
|Accretion
    of liability                        |                            | 1                                               | 1                                               | 2    
|Deferred
    financing fees (net of amortization) | 1                          | 1                                               | 1                                               | 3    
|Balance
    at December 31, 2012                  | 290                        | 160                                             | 160                                             | 610  
|Conversions
    and redemptions                   | (1)                        | (9)                                             | (1)                                             | (11) 
|Accretion
    of liability                        |                            | 1                                               | 1                                               | 2    
|Deferred
    financing fee (net of amortization)  | 1                          | 1                                               | 1                                               | 3    
|Balance
    at December 31, 2013                  | 290                        | 153                                             | 161                                             | 604  

| | (1) | Excludes
                                                                       conversion feature of convertible debentures which is recognized
                                                                       in derivative financial instruments.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
Series C debentures may be converted at the option of the holder at a conversion price of $28.55 per common share at any time
prior to maturity and may be redeemed by the Company. The Company may, at its option on or after November 30, 2014 and prior to
November 30, 2016, elect to redeem the Series C debentures in whole or in part, provided that the volume weighted average trading
price of the common shares on the TSX during the 20 consecutive trading days ending on the fifth trading day preceding the date
on which the notice of redemption is given is not less than 125 percent of the conversion price of the Series C debentures. On
or after November 30, 2016, the Series C debentures may be redeemed in whole or in part at the option of the Company at a price
equal to their principal amount plus accrued and unpaid interest. The Company may also elect to pay interest on the debentures
by issuing shares.

The
Series E debentures may be converted at the option of the holder at a conversion price of $24.94 per common share at any time
prior to maturity and may be redeemed by the Company. The Company may, at its option on or after December 31, 2013 and prior to
December 31, 2015, elect to redeem the Series E debentures in whole or in part, provided that the volume weighted average trading
price of the common shares on the TSX during the 20 consecutive trading days ending on the fifth trading day preceding the date
on which the notice of redemption is given is not less than 125 percent of the conversion price of the Series E debentures. On
or after December 31, 2015, the Series E debentures may be redeemed in whole or in part at the option of the Company at a price
equal to their principal amount plus accrued and unpaid interest. Any accrued unpaid interest will be paid in cash.

The
Series F debentures may be converted at the option of the holder at a conversion price of $29.53 per common share at any time
prior to maturity and may be redeemed by the Company. The Company may, at its option on or after December 31, 2014 and prior to
December 31, 2016, elect to redeem the Series F debentures in whole or in part, provided that the volume weighted average trading
price of the common shares on the TSX during the 20 consecutive trading days ending on the fifth trading day preceding the date
on which the notice of redemption is given is not less than 125 percent of the conversion price of the Series F debentures. On
or after December 31, 2016, the Series F debentures may be redeemed in whole or in part at the option of the Company at a price
equal to their principal amount plus accrued and unpaid interest. Any accrued unpaid interest will be paid in cash.

71









|Pembina Pipeline Corporation | 
|---------------------------- | 



The
Company retains a cash conversion option on the Series E and F convertible debentures, allowing the Company to pay cash to the
converting holder of the debentures, at the option of the Company. For convertible debentures with a cash conversion option, the
conversion feature is recognized as an embedded derivative and accounted for as a derivative financial instrument, measured at
fair value using an option pricing model.

14.	PROVISIONS

The
Company has estimated the net present value of its total decommissioning obligations based on a total future liability of $309
million. The estimate has applied a medium-term inflation rate and current discount rate and includes a revision in the decommissioning
assumptions and associated costs and timing of payments. The obligations are expected to be paid over the next 75 years with majority
being paid between 30 and 40 years. The Company applied a 2 percent inflation rate per annum and a risk free rate of 3.2 percent
(2012: 2.4 percent) to calculate the present value of the decommissioning provision. The remeasured decommissioning provision
decreased property, plant and equipment and decommissioning provision liability. Of the re-measurement reduction of the decommissioning
provision, $33 million (2012: $6 million) was in excess of the carrying amount of the related asset and was credited to depreciation
expense.

The
property, plant and equipment of the Company consist primarily of underground pipelines, above ground equipment facilities and
storage assets. No amount has been recorded relating to the removal of the underground pipelines or for the storage assets as
the potential obligations relating to these assets cannot be reasonably estimated due to the indeterminate timing or scope of
the asset retirement. As the timing and scope of retirement become determinable for these assets, a provision for the cost of
retirement will be recorded.

|($ millions)                                           |  | 2013 |     | 2012
|------------------------------------------------------ |  | ---- | --- | ----
|Balance at January 1                                   |  |      | 361 |     
|Unwinding of discount rate                             |  |      | 9   |     
|Decommissioning liabilities settled during the period  |  |      | (1  | )   
|Change in rates                                        |  |      | (88 | )   
|Change in estimates and other                          |  |      | 28  |     
|Assumed on Acquisition (Note 27)                       |  |      |     |     
|Total                                                  |  |      | 309 |     
|Less current portion (included in accrued liabilities) |  |      |     |     
|Balance at December 31                                 |  |      | 309 |     

15.	SHARE
CAPITAL

Pembina
is authorized to issue an unlimited number of common shares and an unlimited number of a class of preferred shares designated
as Preferred Shares, Series A. The holders of the common shares are entitled to receive notice of, attend at and vote at any meeting
of the shareholders of the Company, receive dividends declared and share in the remaining property of the Company upon distribution
of the assets of the Company among its shareholders for the purpose of winding-up its affairs.

Pembina
has adopted a shareholder rights plan ("Plan") as a mechanism designed to assist the board in ensuring the fair and
equal treatment of all shareholders in the face of an actual or contemplated unsolicited bid to take control of the company. Take-over
bids may be structured in such a way as to be coercive or discriminatory in effect, or may be initiated at a time when it will
be difficult for the board to prepare an adequate response. Such offers may result in shareholders receiving unequal or unfair
treatment, or not realizing the full or maximum value of their investment in Pembina. The Plan discourages the making of any such
offers by creating the potential of significant dilution to any offeror who does so.

72





|Pembina Pipeline Corporation | 
|---------------------------- | 



Common
Share Capital

|($ millions, except as noted)                                     |  | Number of Common Shares (thousands) |         | Common Share Capital
|----------------------------------------------------------------- |  | ----------------------------------- | ------- | --------------------
|Balance at December 31, 2011                                      |  |                                     | 167,908 |                     
|Dividend reinvestment plan                                        |  |                                     | 8,338   |                     
|Share-based payment transactions, debenture conversions and other |  |                                     | 444     |                     
|Issued on Acquisition (Note 27)                                   |  |                                     | 116,536 |                     
|Balance at December 31, 2012                                      |  |                                     | 293,226 |                     
|Issued, net of issue costs                                        |  |                                     | 11,207  |                     
|Dividend reinvestment plan                                        |  |                                     | 9,384   |                     
|Share-based payment transactions, debenture conversions and other |  |                                     | 1,327   |                     
|Balance at December 31, 2013                                      |  |                                     | 315,144 |                     

Preferred
Share Capital

|($ millions, except as noted)                                 |  | Number of Preferred Shares (thousands) |        | Preferred Share Capital
|------------------------------------------------------------- |  | -------------------------------------- | ------ | -----------------------
|Balance at December 31, 2012 and 2011                         |  |                                        |        |                        
|Class A, Series 1 Preferred shares issued, net of issue costs |  |                                        | 10,000 |                        
|Class A, Series 3 Preferred shares issued, net of issue costs |  |                                        | 6,000  |                        
|Balance at December 31, 2013                                  |  |                                        | 16,000 |                        

On
July 26, 2013, Pembina issued 10,000,000 cumulative redeemable 5-year rate reset Class A Preferred shares, Series 1 ("Series
1 Preferred Shares") at a price of $25.00 per Series 1 Preferred Share for aggregate proceeds of $250 million. The holders
of Series 1 Preferred Shares are entitled to receive fixed cumulative dividends at an annual rate of $1.0625 per share when declared
by the Board of Directors. The dividend rate will reset on December 1, 2018and every five years thereafter at a rate equal
to the sum of the then five-year Government of Canada bond yield plus 2.47 percent. The Series 1 Preferred Shares are redeemable
by the Company at the Company's option on December 1, 2018 and on December 1 of every fifth year thereafter.

Holders
of the Series 1 Preferred Shares have the right to convert all or any part of their shares into cumulative redeemable floating
rate Class A Preferred shares, Series 2 ("Series 2 Preferred Shares"), subject to certain conditions, on December 1,
2018 and on December 1 of every fifth year thereafter. Holders of Series 2 Preferred Shares will be entitled to receive cumulative
quarterly floating dividends at a rate equal to the sum of the then 90-day Government of Canada Treasury Bill yield plus 2.47
percent, if, as and when declared by the Board of Directors of Pembina.

On
October 2, 2013, Pembina closed its offering of 6,000,000 cumulative redeemable rate reset Class A Preferred shares, Series 3
(the "Series 3 Preferred Shares") at a price of $25.00 per share for aggregate proceeds of $150 million. The
holders of Series 3 Preferred Shares are entitled to receive fixed cumulative dividends at an annual rate of $1.1750 per share,
if, as and when declared by the Board of Directors. The dividend rate will reset on March 1, 2019and every five years
thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield plus 2.60 percent. The Series 3 Preferred
Shares are redeemable by the Company at its option on March 1, 2019and on March 1 of every fifth year thereafter.

73









|Pembina Pipeline Corporation | 
|---------------------------- | 



Holders
of the Series 3 Preferred Shares have the right to convert their shares into cumulative redeemable floating rate Class A Preferred
shares, Series 4 ("Series 4 Preferred Shares"), subject to certain conditions, on March 1, 2019 and on March 1 of every
fifth year thereafter. Holders of Series 4 Preferred Shares will be entitled to receive a cumulative quarterly floating dividend
at a rate equal to the sum of the then 90-day Government of Canada Treasury Bill yield plus 2.60 percent, if, as and when declared
by the Board of Directors of Pembina.

Dividends

The
Company has a Premium DividendTM and Dividend Reinvestment Plan. Eligible common shareholders have the opportunity to receive
additional common shares by reinvesting the cash dividends declared payable by the Company on its common shares.

The
following dividends were declared by the Company:

|Year Ended December 31($ millions)               |  | 2013 |     | 2012
|------------------------------------------------ |  | ---- | --- | ----
|Common shares                                    |  |      |     |     
|$1.65 per qualifying share (2012: $1.61)         |  |      | 507 |     
|Preferred shares                                 |  |      |     |     
|$.3726 per qualifying Series 1 share (2012: nil) |  |      | 4   |     
|$.1932 per qualifying Series 3 share (2012: nil) |  |      | 1   |     
|                                                 |  |      | 5   |     

On
January 7, 2014 and February 10, 2014, Pembina announced that the Board of Directors declared a dividend for each of January and
February of $0.14 per qualifying common share ($1.68 annualized) in the total amount of approximately $90 million.

On
January 7, 2014, Pembina announced that the Board of Directors had declared a quarterly dividend of $0.265625 per Series 1 Class
A Preferred Share to be paid to holders of Series 1 Class A Preferred Shares of record on February 1, 2014, and a dividend of
$0.29375 per Series 3 Class A Preferred Share to holders of Series 3 Class A Preferred Shares of record on February 1, 2014 in
the amount of $4 million.

On
January 16, 2014, Pembina announced the initial dividend on the Series 5 Class A Preferred Shares, to be paid on March 1, 2014
to holders of Series 5 Class A Preferred Shares of record on February 1, 2014 for the period commencing on the date of issuance
(January 16, 2014) up to but excluding February 28, 2014 in the amount of $0.1507 per share in the total amount of $2 million.

16.	PERSONNEL
EXPENSES

|Year Ended December 31 ($ millions)     |  | 2013 |     | 2012
|--------------------------------------- |  | ---- | --- | ----
|Salaries and wages                      |  |      | 118 |     
|Share-based payment transactions        |  |      | 34  |     
|Short-term incentive plan               |  |      | 26  |     
|Pension plan expense                    |  |      | 12  |     
|Health, savings plan and other benefits |  |      | 10  |     
|Personnel expenses                      |  |      | 200 |     



74







|Pembina Pipeline Corporation | 
|---------------------------- | 



17.	NET
FINANCE COSTS

|Year Ended December 31 ($ millions)                                          |  | 2013 |     | 2012
|---------------------------------------------------------------------------- |  | ---- | --- | ----
|Interest income from:                                                        |  |      |     |     
|Bank deposits and other                                                      |  |      | (5  | )   
|Interest expense on financial liabilities measured at amortized cost:        |  |      |     |     
|Loans and borrowings                                                         |  |      | 55  |     
|Convertible debentures                                                       |  |      | 42  |     
|Unwinding of discount                                                        |  |      | 9   |     
|Gain in fair value of non-commodity-related derivative financial instruments |  |      | (6  | )   
|Loss on revaluation of conversion feature of convertible debentures          |  |      | 71  |     
|Foreign exchange gains and other                                             |  |      |     |     
|Net finance costs                                                            |  |      | 166 |     

Net
interest paid of $115 million (2012: $118 million) includes capitalized borrowing costs of $35 million (2012: $14 million).

18.	OPERATING
SEGMENTS

The
Company determines its reportable segments based on the nature of operations and includes four operating segments: Conventional
Pipelines, Oil Sands & Heavy Oil, Gas Services and Midstream.

Conventional
Pipelines consists of the tariff based operations of pipelines and related facilities to deliver crude oil, condensate and NGL
in Alberta and B.C.

Oil
Sands & Heavy Oil consists of the Syncrude, Horizon, Nipisi and Mitsue Pipelines, and the Cheecham Lateral. These pipelines
and related facilities deliver synthetic crude oil produced from oil sands under long-term cost-of-service arrangements.

Gas
Services consists of natural gas gathering and processing facilities, including four gas plants, twelve compressor stations and
over 350 kilometres of gathering systems.

Midstream
consists of the Company's interests in extraction and fractionation facilities, terminalling and storage hub services under a
mixture of short, medium and long-term contractual arrangements.

The
financial results of the business segments are included below. Performance is measured based on results from operating activities,
net of depreciation and amortization, as included in the internal management reports that are reviewed by the Company's CEO, CFO
and SVPs. The segments results from operating activities, before depreciation and amortization, is used to measure
performance as management believes that such information is the most relevant in evaluating results of certain segments relative
to other entities that operate within these industries. Intersegment transactions are recorded at market value and eliminated
under corporate and intersegment eliminations.

75







|Pembina Pipeline Corporation | 
|---------------------------- | 



|Year
    Ended December 31, 2013($ millions)                                   | Conventional
        Pipelines(1) | Oil
        Sands &
        Heavy
        Oil | Gas
        Services | Midstream(2) | Corporate
        &
        Intersegment
        Eliminations | Total
|------------------------------------------------------------------------------ | --------------------------------- | --------------------------------------------- | -------------------- | ------------ | ------------------------------------------------------------- | -----
|Revenue:                                                                       |                                   |                                               |                      |              |                                                               |      
|Pipeline
    transportation                                                    | 411                               | 195                                           |                      |              | (49)                                                          | 557  
|Terminalling,
    storage and hub services                                     |                                   |                                               |                      | 4,347        |                                                               | 4,347
|Gas
    Services                                                               |                                   |                                               | 121                  |              |                                                               | 121  
|Total
    revenue                                                              | 411                               | 195                                           | 121                  | 4,347        | (49)                                                          | 5,025
|Operating
    expenses                                                         | 162                               | 64                                            | 43                   | 91           | (4)                                                           | 356  
|Cost
    of goods sold, including product purchases                            |                                   |                                               |                      | 3,767        | (48)                                                          | 3,719
|Realized
    gain (loss) on commodity-related derivative financial instruments | 2                                 |                                               |                      | (3)          |                                                               | (1)  
|Operating
    margin                                                           | 251                               | 131                                           | 78                   | 486          | 3                                                             | 949  
|Depreciation
    and amortization included in operations                       | 12                                | 17                                            | 20                   | 114          |                                                               | 163  
|Unrealized
    gain on commodity-related derivative financial instruments      | 1                                 |                                               |                      | 6            |                                                               | 7    
|Gross
    profit                                                               | 240                               | 114                                           | 58                   | 378          | 3                                                             | 793  
|Depreciation
    included in general and administrative                        |                                   |                                               |                      |              | 8                                                             | 8    
|Other
    general and administrative                                           | 9                                 | 3                                             | 6                    | 25           | 81                                                            | 124  
|Acquisition-related
    and other expenses (income)                            | 2                                 |                                               |                      | 1            | (2)                                                           | 1    
|Reportable
    segment results from operating activities                       | 229                               | 111                                           | 52                   | 352          | (84)                                                          | 660  
|Net
    finance costs (income)                                                 | 5                                 | 1                                             | 1                    | (4)          | 163                                                           | 166  
|Reportable
    segment earnings (loss) before tax                              | 224                               | 110                                           | 51                   | 356          | (247)                                                         | 494  
|Capital
    expenditures                                                       | 325                               | 38                                            | 258                  | 254          | 5                                                             | 880  

| | (1) | 5.2
                                                                       percent of Conventional Pipelines revenue is under regulated
                                                                       tolling arrangements.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | NGL
                                                                       product and services, terminalling, storage and hub services
                                                                       revenue includes $158 million associated with U.S. midstream
                                                                       sales.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

76







|Pembina Pipeline Corporation | 
|---------------------------- | 



|Year
    Ended December 31, 2012($ millions)                                     | Conventional
        Pipelines(1) | Oil
        Sands &
        Heavy
        Oil | Gas
        Services | Midstream(2) | Corporate
        &
        Intersegment
        Eliminations | Total
|-------------------------------------------------------------------------------- | --------------------------------- | --------------------------------------------- | -------------------- | ------------ | ------------------------------------------------------------- | -----
|Revenue:                                                                         |                                   |                                               |                      |              |                                                               |      
|Pipeline
    transportation                                                      | 339                               | 172                                           |                      |              | (19)                                                          | 492  
|NGL
    product and services, terminalling, storage and hub services             |                                   |                                               |                      | 2,847        |                                                               | 2,847
|Gas
    Services                                                                 |                                   |                                               | 88                   |              |                                                               | 88   
|Total
    revenue                                                                | 339                               | 172                                           | 88                   | 2,847        | (19)                                                          | 3,427
|Operating
    expense                                                            | 130                               | 55                                            | 29                   | 60           | (3)                                                           | 271  
|Cost
    of goods sold, including product purchases                              |                                   |                                               |                      | 2,494        | (19)                                                          | 2,475
|Realized
    loss on commodity-related derivative financial instruments          |                                   |                                               |                      | (5)          |                                                               | (5)  
|Operating
    margin                                                             | 209                               | 117                                           | 59                   | 288          | 3                                                             | 676  
|Depreciation
    and amortization included in operations                         | 44                                | 20                                            | 15                   | 95           |                                                               | 174  
|Unrealized
    gain (loss) on commodity-related derivative financial instruments | (9)                               |                                               |                      | 45           |                                                               | 36   
|Gross
    profit                                                                 | 156                               | 97                                            | 44                   | 238          | 3                                                             | 538  
|Depreciation
    included in general and administrative                          |                                   |                                               |                      |              | 6                                                             | 6    
|Other
    general and administrative                                             | 7                                 | 2                                             | 4                    | 15           | 63                                                            | 91   
|Acquisition-related
    and other expenses                                       | 1                                 |                                               |                      | 2            | 23                                                            | 26   
|Reportable
    segment results from operating activities                         | 148                               | 95                                            | 40                   | 221          | (89)                                                          | 415  
|Net
    finance costs                                                            | 6                                 | 2                                             |                      | 3            | 104                                                           | 115  
|Reportable
    segment earnings (loss) before tax                                | 142                               | 93                                            | 40                   | 218          | (193)                                                         | 300  
|Capital
    expenditures                                                         | 187                               | 30                                            | 163                  | 204          |                                                               | 584  

| | (1) | 5.1
                                                                       percent of Conventional Pipelines revenue is under regulated
                                                                       tolling arrangements.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | NGL
                                                                       product and services, terminalling, storage and hub services
                                                                       revenue includes $97 million associated with U.S. midstream
                                                                       sales.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

19.	EARNINGS
PER COMMON SHARE

Basic
earnings per common share

The
calculation of basic earnings per common share at December 31, 2013 was based on the earnings attributable to common shareholders
of $344 million (2012: $225 million) and a weighted average number of common shares outstanding of 307 million (2012: 259 million).

Diluted
earnings per common share

The
calculation of diluted earnings per common share at December 31, 2013 was based on earnings attributable to common shareholders
of $344 million (December 31, 2012: $225 million), and weighted average number of common shares outstanding after adjustment for
the effects of all dilutive potential common shares of 308 million (2012: 259 million).

77







|Pembina Pipeline Corporation | 
|---------------------------- | 



Earnings
attributable to common shareholders

|Year Ended December 31 ($ millions)                               |  | 2013 |     | 2012
|----------------------------------------------------------------- |  | ---- | --- | ----
|Earnings                                                          |  |      | 351 |     
|Dividends on preferred shares                                     |  |      | (5  | )   
|Cumulative dividends on preferred shares, not yet declared        |  |      | (2  | )   
|Earnings contributable to common shareholders (basic and diluted) |  |      | 344 |     

Weighted
average number of common shares

|(In thousands of shares, except as noted)                         |  | 2013 |         | 2012
|----------------------------------------------------------------- |  | ---- | ------- | ----
|Issued common shares at January 1                                 |  |      | 293,226 |     
|Effect of shares issued                                           |  |      | 8,781   |     
|Effect of share options exercised                                 |  |      | 350     |     
|Effect of conversion of convertible debentures                    |  |      | 83      |     
|Effect of shares issued under dividend reinvestment plan          |  |      | 4,771   |     
|Weighted average number of common shares at December 31 (basic)   |  |      | 307,211 |     
|                                                                  |  |      |         |     
|Dilutive effect of share options on issue                         |  |      | 870     |     
|Weighted average number of common shares at December 31 (diluted) |  |      | 308,081 |     
|                                                                  |  |      |         |     
|Basic and diluted earnings per common share (dollars)             |  | $    | 1.12    |     

At
December 31, 2013, the effect of the conversion of the convertible debentures was excluded from the diluted earnings per common
share calculation as the impact was anti-dilutive. If the convertible debentures were included, an additional 23 million (2012:
23 million) common shares would be added to the weighted average number of common shares and $32 million (2012: $27 million) would
be added to earnings, representing after tax interest expense of the convertible debentures.

The
average market value of the Company's shares for purposes of calculating the dilutive effect of share options was based on quoted
market prices for the period during which the options were outstanding.

20.	PENSION
PLAN

|December 31 ($ millions)                      |  | 2013 |    | 2012
|--------------------------------------------- |  | ---- | -- | ----
|Registered defined benefit (asset) obligation |  |      | (5 | )   
|Supplemental defined benefit obligation       |  |      | 7  |     
|Other accrued benefit obligations             |  |      | 1  |     
|Net employee benefit obligations              |  |      | 3  |     

The
Company maintains a defined contribution plan and non-contributory defined pension plans covering its employees. The Company contributes
5 to 10 percent of an employee's earnings to the defined contribution plan until the employee's age plus years of service equals
50, at which time they become eligible for the defined benefit plans. The defined benefit plans include a funded registered plan
for all employees and an unfunded supplemental retirement plan for those employees affected by the Canada Revenue Agency maximum
pension limits. The Company also has other accrued benefit obligations which include a non-contribution unfunded post employment
extended health and dental plan provided to a few remaining retired employees. The defined benefit plans are administered by a
single pension fund that is legally separated from the Company. Benefits under the plans are based on the length of service and
the annual average best three years of earnings during the last ten years of service of the employee. Benefits paid out of the
plans are not indexed. The Company measures its accrued benefit obligations and the fair value of plan assets for accounting purposes
as at December 31 of each year. The most recent actuarial valuation was at December 31, 2012.

78









|Pembina Pipeline Corporation | 
|---------------------------- | 



The
defined benefit plans expose the Company to actuarial risks such as longevity risk, interest rate risk, and market (investment)
risk.

Defined
benefit obligations

|December 31                                                  |  | 2013            |     | 2012             
|------------------------------------------------------------ |  | --------------- | --- | -----------------
|($ millions)                                                 |  | Registered Plan |     | Supplemental Plan
|Present value of unfunded obligations                        |  |                 |     |                  
|Present value of funded obligations                          |  |                 | 119 |                  
|Total present value of obligations                           |  |                 | 119 |                  
|Fair value of plan assets                                    |  |                 | 124 |                  
|Recognized asset (liability) for defined benefit obligations |  |                 | 5   |                  

The
Company funds the defined benefit obligation plans in accordance with government regulations by contributing to trust funds administered
by an independent trustee. The funds are invested primarily in equities and bonds. Defined benefit plan contributions totalled
$13 million for the year ended December 31, 2013 (2012: $10 million).

The
Company has determined that, in accordance with the terms and conditions of the defined benefit plans, and in accordance with
statutory requirements of the plans, the present value of refunds or reductions in future contributions is not lower than the
balance of the total fair value of the plan assets less the total present value of obligations. As such, no decrease in the defined
benefit asset is necessary at December 31, 2013 and December 31, 2012.

Registered
defined benefit pension plan assets comprise

|December 31(percentages) |  | 2013 |     | 2012
|------------------------ |  | ---- | --- | ----
|Equity securities        |  |      | 64  |     
|Debt                     |  |      | 35  |     
|Other                    |  |      | 1   |     
|                         |  |      | 100 |     

Movement
in the present value of the defined benefit pension obligation

|Year Ended December 31                                 |  | 2013            |     | 2012             
|------------------------------------------------------ |  | --------------- | --- | -----------------
|($ millions)                                           |  | Registered Plan |     | Supplemental Plan
|Defined benefits obligations at January 1              |  |                 | 122 |                  
|Benefits paid by the plan                              |  |                 | (6  | )                
|Current service costs                                  |  |                 | 9   |                  
|Interest expense                                       |  |                 | 5   |                  
|Actuarial (gains) losses in other comprehensive income |  |                 | (11 | )                
|Defined benefit obligations at December 31             |  |                 | 119 |                  



79







|Pembina Pipeline Corporation | 
|---------------------------- | 

Movement
in the present value of registered defined benefit pension plan assets

|Year Ended December 31($ millions)                  |  | 2013 |     | 2012
|--------------------------------------------------- |  | ---- | --- | ----
|Fair value of plan assets at January 1              |  |      | 100 |     
|Contributions paid into the plan                    |  |      | 13  |     
|Benefits paid by the plan                           |  |      | (6  | )   
|Return on plan assets                               |  |      | 12  |     
|Interest income                                     |  |      | 5   |     
|Fair value of registered plan assets at December 31 |  |      | 124 |     

Expense
recognition in earnings

|Registered Plan                    |  | 2013 |    | 2012
|---------------------------------- |  | ---- | -- | ----
|Year Ended December 31($ millions) |  |      |    |     
|Current service costs              |  |      | 9  |     
|Interest on obligation             |  |      | 5  |     
|Expected return on plan assets     |  |      | (4 | )   
|                                   |  |      | 10 |     

The
expense is recognized in the following line items in the statement of comprehensive income:

|Registered Plan                    |  | 2013 |    | 2012
|---------------------------------- |  | ---- | -- | ----
|Year Ended December 31($ millions) |  |      |    |     
|Operating expenses                 |  |      | 5  |     
|General and administrative expense |  |      | 5  |     
|                                   |  |      | 10 |     

Expense
recognized for the Supplemental Plan was less than $1 million for each of the years ended December 31, 2013 and 2012.

Actuarial
gains and losses recognized in other comprehensive income

|                                                |  | 2013            |     | 2012             
|----------------------------------------------- |  | --------------- | --- | -----------------
|($ millions)                                    |  | Registered Plan |     | Supplemental Plan
|Balance at January 1                            |  |                 | (25 | )                
|Remeasurements gain:                            |  |                 |     |                  
|Actuarial gain (loss) arising from              |  |                 |     |                  
|Demographic assumptions                         |  |                 | (2  | )                
|Financial assumptions                           |  |                 | 7   |                  
|Experience adjustments                          |  |                 | 4   |                  
|Return on plan assets excluding interest income |  |                 | 9   |                  
|Recognized during the period after tax          |  |                 | 18  |                  
|Balance at December 31                          |  |                 | (7  | )                

Principal
actuarial assumptions used:

|December 31 (weighted average percent) |  | 2013 |     | 2012
|-------------------------------------- |  | ---- | --- | ----
|Discount rate                          |  |      | 4.9 | %   
|Future pension earning increases       |  |      | 4.0 | %   



80







|Pembina Pipeline Corporation | 
|---------------------------- | 



Assumptions
regarding future mortality are based on published statistics and mortality tables. The current longevities underlying the values
of the liabilities in the defined plans are as follows:

|December 31(years)                             |  | 2013 |      | 2012
|---------------------------------------------- |  | ---- | ---- | ----
|Longevity at age 65 for current pensioners     |  |      |      |     
|Males                                          |  |      | 21.3 |     
|Females                                        |  |      | 23.5 |     
|Longevity at age 65 for current member aged 45 |  |      |      |     
|Males                                          |  |      | 22.4 |     
|Females                                        |  |      | 24.2 |     

The
calculation of the defined benefit obligation is sensitive to the discount rate, compensation increases, retirements and termination
rates as set out above. An increase or decrease of the estimated discount rate of 4.9 percent by 100 basis points at December
31, 2013 is considered reasonably possible in the next financial year but would not have a material impact on the obligation.

The
Company expects to contribute $10 million to the defined benefit plans in 2014.

21.	SHARE-BASED
PAYMENTS

At
December 31, 2013, the Company has the following share-based payment arrangements:

Share
option plan (equity settled)

The
Company has a share option plan under which employees are eligible to receive options to purchase shares in the Company.

Long-term
share unit award incentive (cash-settled) plan

In
2005, the Company established a long-term share unit award incentive plan. Under the share-based compensation plan, awards of
restricted (RSU) and performance (PSU) share units are made to officers, non-officers and directors. The plan results in participants
receiving cash compensation based on the value of the underlying notional shares granted under the plan. Payments are based on
a trading value of the Company's common shares plus notional dividends and performance of the Company.

Terms
and conditions of share option plan and share unit award incentive plan

The
terms and conditions relating to the grants of the share option program and the long-term share unit award incentive plans are
listed in the tables below:

|Grant date share options granted to employees (thousands of options, except as noted) |  | Number of options |       | Contractual life of options
|------------------------------------------------------------------------------------- |  | ----------------- | ----- | ---------------------------
|January 3, 2012                                                                       |  |                   | 55    |                            
|April 2, 2012                                                                         |  |                   | 19    |                            
|August 9, 2012                                                                        |  |                   | 1,372 |                            
|October 1, 2012                                                                       |  |                   | 49    |                            
|January 2, 2013                                                                       |  |                   | 61    |                            
|April 1, 2013                                                                         |  |                   | 52    |                            
|August 9, 2013                                                                        |  |                   | 1,605 |                            
|October 1, 2013                                                                       |  |                   | 70    |                            

One-third vest on the first anniversary of the grant date, one-third vest on the second anniversary of the grant date, and one-third
vest on the third anniversary of the grant date.

81







|Pembina Pipeline Corporation | 
|---------------------------- | 



Long-term
share unit award incentive plan(1)

|Grant date PSUs to Officers, Non-Officers(2) and Directors (thousands of units, except as noted) |  | Units |     | Contractual life of PSU
|------------------------------------------------------------------------------------------------ |  | ----- | --- | -----------------------
|January 1, 2012                                                                                  |  |       | 188 |                        
|April 2, 2012 (on Acquisition)                                                                   |  |       | 201 |                        
|January 1, 2013                                                                                  |  |       | 292 |                        

PSUs
vest on the third anniversary of the grant date. Actual PSUs awarded is based on the trading value of the shares and performance
of the Company.

|Grant date RSUs to Officers, Non-Officers(2) and Directors (thousands of units, except as noted) |  | Units |     | Contractual life of RSU
|------------------------------------------------------------------------------------------------ |  | ----- | --- | -----------------------
|January 1, 2012                                                                                  |  |       | 186 |                        
|April 2, 2012 (on Acquisition)                                                                   |  |       | 177 |                        
|January 1, 2013                                                                                  |  |       | 285 |                        

One-third vest on the first anniversary of the grant date, one-third vest on the second anniversary of the grant date, and one-third
vest on the third anniversary of the grant date.

| | (1) | Distribution
                                                                       Units are granted in addition to RSU and PSU grants based
                                                                       on notional accrued dividends from RSU and PSU granted
                                                                       but not paid.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Non-Officers
                                                                       defined as senior selected positions within the Company.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------

Disclosure
of share option plan

The
number and weighted average exercise prices of share options as follows:

|(thousands
    of options, except as noted) | Number
    of Options | Weighted
    Average Exercise Price (dollars)
|------------------------------------------- | --------------------- | ---------------------------------------------
|Outstanding
    at December 31, 2011        | 2,674                 | $20.24                                       
|Granted                                     | 1,495                 | $26.70                                       
|Exercised                                   | (428)                 | $16.96                                       
|Forfeited                                   | (209)                 | $24.73                                       
|Outstanding
    at December 31, 2012        | 3,532                 | $23.11                                       
|Granted                                     | 1,787                 | $32.17                                       
|Exercised                                   | (887)                 | $19.08                                       
|Forfeited
    or expired                    | (233)                 | $26.14                                       
|Outstanding
    as at December 31, 2013     | 4,199                 | $27.65                                       

As
of December 31, 2013, the following options are outstanding:

|(thousands
        of options, except as noted)
        Exercise
        Price(dollars) | Number
        outstanding
        at
        December 31, 2013 | Options
    Exercisable | Weighted
        average
        remaining
        life
|--------------------------------------------------------------------------------------- | --------------------------------------------------------------- | ----------------------- | -------------------------------------------------------
|$14.18
    - $17.99                                                                     | 117                                                             | 117                     | 1.92
    years                                         
|$18.00
    - $20.99                                                                     | 419                                                             | 417                     | 3.65
    years                                         
|$21.00
    - $29.99                                                                     | 1,957                                                           | 752                     | 5.25
    years                                         
|$30.00
    - $33.93                                                                     | 1,706                                                           | 12                      | 6.56
    years                                         
|Total                                                                                   | 4,199                                                           | 1,298                   |                                                        

The
weighted average share price at the date of exercise for share options exercised in the year ended December 31, 2013 was $33.12
(December 31, 2012: $28.28).

Expected
volatility estimated by considering historic average share price volatility. The weighted average inputs used in the measurement
of the fair values at grant date of share options are the following:

82









|Pembina Pipeline Corporation | 
|---------------------------- | 



Share
options granted

|Year
    Ended December 31(dollars, except as noted)             | 2013  | 2012 
|---------------------------------------------------------------- | ----- | -----
|Weighted
    average                                             |       |      
|Fair
    value at grant date                                     | 2.59  | 2.10 
|Share
    price at grant date                                    | 31.60 | 26.68
|Exercise
    price                                               | 32.17 | 26.70
|Expected
    volatility (percent)                                | 20.6  | 21.4 
|Expected
    option life (years)                                 | 3.67  | 3.67 
|Expected
    annual dividends per option                         | 1.65  | 1.61 
|Expected
    forfeitures (percent)                               | 7.9   | 7.9  
|Risk-free
    interest rate (based on government bonds)(percent) | 1.4   | 1.3  

Disclosure
of long-term share unit award incentive plan

The
long-term share unit award incentive plan was valued using the reporting date market price of the Company's shares of $37.42 (December
31, 2012: $28.46). Actual payment may differ from amount valued based on market price and company performance.

Long-term
share unit award incentive units granted

|Year
        Ended December 31
        (thousands
        of share units) | 2013 | 2012
|------------------------------------------------------------------------- | ---- | ----
|Number
    of share units granted                                         | 577  | 752 

Employee
expenses

|Year
        Ended December 31
        ($
        millions)            | 2013 | 2012
|---------------------------------------------------------------------- | ---- | ----
|Share
    option plan, equity settled                                  | 3    | 2   
|Long-term
    share unit award incentive plan                          | 31   | 15  
|Share
    based payment expense                                        | 34   | 17  
|                                                                       |      |     
|Total
    carrying amount of liabilities for cash settled arrangements | 48   | 34  
|Total
    intrinsic value of liability for vested benefits             | 30   | 16  

22.	FINANCIAL
INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

Risk
Management

Pembina
has exposure to counterparty credit risk, liquidity risk and market risk. Pembina recognizes that effective management of these
risks is a critical success factor in managing organization and shareholder value.

Risk
management strategies, policies and limits ensure risks and exposures are aligned to Pembina’s business strategy and risk
tolerance. The Company’s Board of Directors is responsible for providing risk management oversight at Pembina. The Company's
Audit Committee oversees how management monitors compliance with the Company's risk management policies and procedures and reviews
the adequacy of this risk framework in relation to the risks faced by the Company. Internal audit personnel assist the Audit Committee
in its oversight role by monitoring and evaluating the effectiveness of the organization’s risk management system.

83









|Pembina Pipeline Corporation | 
|---------------------------- | 



Counterparty
credit risk

Counterparty
credit risk represents the financial loss the Company would experience if a counterparty to a financial instrument failed to meet
its contractual obligations in accordance with the terms and conditions of the financial instruments with the Company. Counterparty
credit risk arises primarily from the Company's cash and cash equivalents, trade and other receivables, and from counterparties
to its derivative financial instruments. The carrying amount of the Company’s cash and cash equivalents, trade and other
receivables and derivative financial instruments represents the maximum counterparty credit exposure, without taking into account
security held.

The
Company manages counterparty credit risk through established credit management techniques, including conducting comprehensive
financial and other assessments for all new counterparties and regular reviews of existing counterparties to establish and
monitor a counterparty's creditworthiness, setting exposure limits, monitoring exposures against these limits and obtaining
financial assurances where warranted. The Company utilizes various sources of financial, credit and business information in
assessing the creditworthiness of a counterparty including external credit ratings, where available, and in other cases,
detailed financial statement analysis in order to generate an internal credit rating based on quantitative and qualitative
factors. The establishment of counterparty exposure limits is governed by a Board  of Directors designated
counterparty exposure limit matrix which represents the maximum dollar amounts of counterparty exposure by debt rating that
can be approved for a counterparty. The Company continues to closely monitor and reassess the creditworthiness of
its counterparties, which has resulted in the Company reducing or mitigating its exposure to certain counterparties where it
was deemed warranted and permitted under contractual terms.

Financial
assurances may include guarantees, letters of credit and cash. Letters of credit are held on $51 million (December 31, 2012: $45
million) of the receivables balance.

Typically,
the Company has collected its receivables in full and at December 31, 2013, approximately 86 percent were current. The Company
has a general lien and a continuing and first priority security interest in, and a secured charge on, all of a shipper’s
petroleum in its custody. The risk of non-collection is considered to be low and no impairment of trade and other receivables
has been made.

The
Company monitors and manages its concentration of counterparty credit risk on an ongoing basis. The Company believes these measures
minimize its counterparty credit risk but there is no certainty that they will protect it against all material losses. As part
of its ongoing operations, the Company must balance its market and counterparty credit risks when making business decisions.

Liquidity
risk

Liquidity
risk is the risk the Company will not be able to meet its financial obligations as they come due. The following are the contractual
maturities of financial liabilities, including estimated interest payments.

|                                                       | Outstanding
    balances due by period
|------------------------------------------------------ | --------------------------------------
|December
        31, 2013
        ($
        millions) | Carrying
        Amount               
|Trade
    payables and accrued liabilities             | 461                                   
|Taxes
    payable                                      | 38                                    
|Loans
    and borrowings                               | 1,671                                 
|Convertible
    debentures                             | 604                                   
|Dividends
    payable                                  | 44                                    
|Derivative
    financial liabilities                   | 120                                   
|Office and vehicle leases                              |                                       
|Construction commitments                               |                                       

The
Company manages its liquidity risk by forecasting cash flows over a 12 month rolling time period to identify financing requirements.
These financing requirements are then addressed through a combination of credit facilities and through access to capital markets,
if required.

84









|Pembina Pipeline Corporation | 
|---------------------------- | 



Market
risk

Pembina’s
results are subject to movements in commodity prices, foreign exchange and interest rates. A formal Risk Management Program
including policies and procedures has been designed to mitigate these risks.

| | a. | Commodity
                                                                                                                                 price
                                                                                                                                 risk
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Pembina’s
Midstream business is exposed to changes in commodity prices as a result of frac-spread risk or the relative
price differential between the input cost of the natural gas required to produce NGL products and the price in which they
are sold. Pembina responds to commodity price risk by using an active Risk Management Program to fix revenues on a minimum of
50 percent of the committed term natural gas supply costs. Pembina Midstream business is also exposed to variability in
quality, time and location differentials. The Company utilizes financial derivative instruments as part of its overall risk
management strategy to assist in managing the exposure to commodity price risk as a result of these activities. The Company
does not trade financial instruments for speculative purposes.

| | b. | Foreign
exchange risk
| | -- | ---------------------



Pembina’s
commodity-related cash flows are subject to currency risk, primarily arising from the denomination of specific cash flows
in US dollars. Pembina responds to this risk using an active Risk Management Program to exchange foreign currency for domestic
currency at a fixed rate.

| | c. | Interest
rate risk
| | -- | ------------------



Pembina
has floating interest rate debt which subjects the Company to interest rate risk. Pembina responds to this risk under the active
Risk Management Program to enter into financial derivative contracts to fix interest rates.

At
the reporting date, the interest rate profile of the Company's interest-bearing financial instruments was:

|                              | Carrying
    Amounts of Financial Liability
|----------------------------- | -------------------------------------------
|December
    31($ millions)   | 2013                                       
|Fixed
    rate instruments    | (1,625)                                    
|Variable
    rate instruments | (46)                                       
|                              | (1,671)                                    

Cash
flow sensitivity analysis for variable rate instruments

A
change of 100 basis points in interest rates at the reporting date would have (increased) decreased earnings by the amounts shown
below. This analysis assumes that all other variables remain constant.

|December
    31($ millions)    | 2013         | 2012        
|------------------------------ | ------------ | ------------
|                               | ±
    100 bp | ±
    100 bp
|Variable
    rate instruments  | ±
    1      | ±
    5     
|Interest
    rate swap         |              | ±
    (4)   
|Earnings
    sensitivity (net) | ±
    1      | ±
    1     



85







|Pembina Pipeline Corporation | 
|---------------------------- | 



Fair
values

The
fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position,
are as follows:

|December
    31                                     | 2013                    | 2012              
|--------------------------------------------------- | ----------------------- | ------------------
|($
    millions)                                    | Carrying
        Amount | Fair
        Value
|Financial
    assets carried at fair value          |                         |                   
|Derivative
    financial instruments                | 4                       | 4                 
|Financial
    assets carried at amortized cost      |                         |                   
|Cash
    and cash equivalents                       | 51                      | 51                
|Trade
    and other receivables                     | 434                     | 434               
|                                                    | 485                     | 485               
|Financial
    liabilities carried at fair value     |                         |                   
|Derivative
    financial instruments                | 120                     | 120               
|Financial
    liabilities carried at amortized cost |                         |                   
|Trade
    payables and accrued liabilities          | 461                     | 461               
|Taxes
    payable                                   | 38                      | 38                
|Dividends
    payable                               | 44                      | 44                
|Loans
    and borrowings                            | 1,671                   | 1,764             
|Convertible
    debentures                          | 604(1)                  | 633               
|                                                    | 2,818                   | 2,940             

(1)	Carrying
amount excludes conversion feature of convertible debentures.

The
basis for determining fair values is disclosed in Note 5.

Interest
rates used for determining fair value

The
interest rates used to discount estimated cash flows, when applicable, are based on the government yield curve at the reporting
date plus and adequate credit spread, and were as follows:

|December
    31 (percents) | 2013            | 2012           
|-------------------------- | --------------- | ---------------
|Derivatives                | 1.2%
    - 2.4% | 1.2%
    - 2.5%
|Loans
    and borrowings   | 1.7%
    - 5.0% | 2.0%
    - 4.4%

Fair
value of power derivatives are based on market rates reflecting forward curves.

Fair
value hierarchy

The
fair value of financial instruments carried at fair value is classified according to the following hierarchy based on the amount
of observable inputs used to value the instruments.

Level
1: Unadjusted quoted prices are available in active markets for identical assets or liabilities as the reporting date. Pembina
does not use Level 1 inputs for any of its fair value measurements.

Level
2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e.
as prices) or indirectly (i.e. derived from prices). Level 2 valuations are based on inputs, including 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. All of Pembina's significant financial instruments carried
at fair value are valued using Level 2 inputs.

86







|Pembina Pipeline Corporation | 
|---------------------------- | 



The
following table is a summary of the net derivative financial instrument liability:

|December
    31($ millions)                                   | 2013 | 2012
|------------------------------------------------------------- | ---- | ----
|Commodity                                                     | 5    | 11  
|Interest
    rate                                             | 8    | 14  
|Foreign
    exchange                                          | 1    |     
|Conversion
    feature of convertible debentures (Note 13)    | 99   | 30  
|Redemption
    liability related to acquisition of subsidiary | 3    | 5   
|Net
    derivative financial instruments liability            | 116  | 60  

Sensitivity
analysis

The
following table shows the impact on earnings if the underlying risk variables of the derivative financial instruments changed
by a specified amount, with other variables held constant.

|December
    31, 2013($ millions)                 |                                                      | +
    Change | -
    Change
|------------------------------------------------- | ---------------------------------------------------- | ------------ | ------------
|Frac
    spread related                           |                                                      |              |             
|Natural
    gas                                   | (AECO
    +/- $0.25 per GJ)                          | 1            | (1)         
|NGL
    (includes propane, butane and condensate) | (Belvieu
    +/- U.S. $0.10 per gal)                 | (3)          | 3           
|Foreign
    exchange (U.S.$ vs. Cdn$)             | (FX
    rate +/- $0.05)                              | (2)          | 2           
|Product
    margin                                |                                                      |              |             
|Crude
    oil                                     | (WTI
    +/- $2.50 per bbl)                          | (2)          | 2           
|NGL
    (includes condensate)                     | (Belvieu
    +/- U.S. $0.10 per gal)                 | 3            | (3)         
|Corporate                                         |                                                      |              |             
|Interest
    rate                                 | (Rate
    +/- 50 basis points)                       | 2            | (2)         
|Power                                             | (AESO
    +/- $5.00 per MW/h)                        | 4            | (4)         
|Conversion
    feature of convertible debentures  | (Pembina
    share price +/- $0.50 per common share) | (4)          | 4           

23.	OPERATING
LEASES

Leases
as lessee

Operating
lease rentals are payable as follows:

|December
    31($ millions) | 2013 | 2012
|--------------------------- | ---- | ----
|Less
    than 1 year        | 26   | 23  
|Between
    1 and 5 years   | 206  | 110 
|More
    than 5 years       | 306  | 153 
|                            | 538  | 286 

The
Company leases a number of offices, warehouses, vehicles and rail cars under operating leases. The leases run for a period of
one to fifteen years, with an option to renew the lease after that date. The Company has sublet office space up to 2022 and has
contracted sub-lease payments of $44 million over the term.

87







|Pembina Pipeline Corporation | 
|---------------------------- | 



24.	CAPITAL
MANAGEMENT

The
Company's objective when managing capital is to safeguard the Company's ability to provide a stable stream of dividends to shareholders
that is sustainable over the long-term. The Company manages its capital structure and makes adjustments to it in light of changes
in economic conditions and risk characteristics of its underlying asset base and based on requirements arising from significant
capital development activities. Pembina manages and monitors its capital structure and short-term financing requirements using
Non-GAAP measures; the ratios of debt to EBITDA, debt to Enterprise Value, adjusted cash flow to debt and debt to equity. The
metrics are used to measure the Company's overall debt position and measure the strength of the Company's balance sheet. The Company
remains satisfied that the leverage currently employed in the Company's capital structure is sufficient and appropriate given
the characteristics and operations of the underlying asset base. The Company, upon approval from its Board of Directors, will
balance its overall capital structure through new equity or debt issuances, as required.

The
Company maintains a conservative capital structure that allows it to finance its day-to-day cash requirements through its operations,
without requiring external sources of capital. The Company funds its operating commitments, short-term capital spending as well
as its dividends to shareholders through this cash flow, while new borrowing and equity issuances are reserved for the support
of specific significant development activities. The capital structure of the Company consists of shareholder's equity plus long-term
liabilities. Long-term debt is comprised of bank credit facilities, unsecured notes, finance lease obligations and convertible
debentures.

Pembina
is subject to certain financial covenants in its credit facility agreements and is in compliance with all financial covenants
as of December 31, 2013.

Note
15 of these financial statements shows the change in Share Capital for the year ended December 31, 2013.

25.	GROUP
ENTITIES

Significant
subsidiaries

|                                             | Ownership
    Interest
|-------------------------------------------- | ----------------------
|December
    31(percentages)                 | 2013                  
|Pembina
    Pipeline                         | 100                   
|Pembina
    Gas Services Limited Partnership | 100                   
|Pembina
    Oil Sands Pipeline LP            | 100                   
|Pembina
    Midstream Limited Partnership    | 100                   
|Pembina
    North Limited Partnership        | 100                   
|Pembina
    West Limited Partnership         | 100                   
|Pembina
    NGL Corporation                  | 100                   
|Pembina
    Facilities NGL LP                | 100                   
|Pembina
    Infrastructure and Logistics LP  | 100                   
|Pembina
    Empress NGL Partnership          | 100                   
|Pembina
    Resource Services Canada         | 100                   
|Pembina
    Resource Services (U.S.A.)       | 100                   

88









|Pembina Pipeline Corporation | 
|---------------------------- | 



26.	RELATED
PARTIES

All
transactions with related parties were made on terms equivalent to those that prevail in arm's length transactions.

Key
management personnel and director compensation

Key
management consists of the Company's directors and certain key officers.

Compensation

In
addition to short-term employee benefits - including salaries, director fees and bonuses - the Company also provides key management
personnel with share-based compensation, contributes to post employment pension plans and provides car allowances, parking and
business club memberships.

Key
management personnel compensation comprised:

|Year
    Ended December 31($ millions)   | 2013 | 2012
|---------------------------------------- | ---- | ----
|Short-term
    employee benefits         | 4    | 3   
|Share-based
    compensation and other   | 7    | 6   
|Total
    compensation of key management | 11   | 9   

Transactions

Key
management personnel and directors of the Company control less than one percent of the voting common shares of the Company (consistent
with the prior year). Certain directors and key management personnel also hold Pembina convertible debentures and preferred shares.
Dividend and interest payments received for the common shares and debentures held are commensurate with other non-related holders
of those instruments.

Certain
officers are subject to employment agreements in the event of termination without just cause or change of control.

Post-employment benefit plans

Pembina
has significant influence over the pension plans for the benefit of their respective employees.

Transactions

|($
    millions)                             |             | Transaction
        Value
        Year
        Ended December 31 | Balance
        Outstanding
        As
        At December 31
|-------------------------------------------- | ----------- | ---------------------------------------------------------------- | -------------------------------------------------------------
|Post-employment
        benefit
        plan | Transaction | 2013                                                             | 2012                                                         
|Defined
    benefit plan                     | Funding     | 13                                                               | 10                                                           

27.	ACQUISITION

On
April 2, 2012, Pembina acquired all of the outstanding Provident Energy Ltd. ("Provident") common shares (the "Provident
Shares") in exchange for Pembina common shares valued at approximately $3.3 billion (the "Acquisition"). Provident
shareholders received 0.425 of a Pembina common share for each Provident Share held for a total of 116,535,750 Pembina common
shares. On closing, Pembina assumed all of the rights and obligations of Provident relating to the 5.75 percent convertible unsecured
subordinated debentures of Provident maturing December 31, 2017, and the 5.75 percent convertible unsecured subordinated debentures
of Provident maturing December 31, 2018 (collectively, the "Provident Debentures"). The face value of the outstanding
Provident Debentures at April 2, 2012 was $345 million. The debentures remain outstanding and continue with terms and maturity
as originally set out in their respective indentures. Pursuant to the Acquisition, Provident amalgamated with a wholly-owned subsidiary
of Pembina and has continued under the name "Pembina NGL Corporation". The results of the acquired business are included
as part of the Midstream business.

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The
purchase price equation is based on assessed fair values and is as follows:

|($
    millions)                                               |      
|-------------------------------------------------------------- | -----
|Cash                                                           | 9    
|Trade
    receivables and other                                | 195  
|Inventory                                                      | 87   
|Property,
    plant and equipment                              | 1,988
|Intangible
    assets and goodwill (including $1,744 goodwill) | 2,405
|Trade
    payables and accrued liabilities                     | (249)
|Derivative
    financial instruments - current                 | (53) 
|Derivative
    financial instruments - non-current             | (36) 
|Loans
    and borrowings                                       | (215)
|Convertible
    debentures                                     | (317)
|Provisions
    and other                                       | (128)
|Deferred
    tax liabilities                                   | (403)
|Other
    equity                                               | 6    
|Non-controlling
    interest                                   | (5)  
|                                                               | 3,284

The
determination of fair values and the purchase price equation are based upon an independent valuation. The primary drivers that
generate goodwill are synergies and business opportunities from the integration of Pembina and Provident and the acquisition of
a talented workforce. The recognized goodwill is generally not expected to be deductible for tax purposes.

Upon
closing of the Acquisition, Pembina repaid Provident's revolving term credit facility of $205 million.

Pembina’s
common shares were listed and began trading on the NYSE under the symbol "PBA" on April 2, 2012.

Revenue
generated by the Provident business for the period from the Acquisition date of April 2, 2012 to December 31, 2012, before intersegment
eliminations, was $1,151.4 million. Net earnings, before intersegment eliminations, for the same period were $54.2 million.

Unaudited
proforma consolidated revenue (prepared as if the  Acquisition had occurred on January 1, 2012) for the year ended December
31, 2012 are $3,967.5 million and net earnings for the same period are $277 million.

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28.	SUBSEQUENT
EVENTS

On
January 16, 2014, Pembina closed its offering of 10,000,000 cumulative redeemable rate reset Class A Preferred shares, Series
5 (the "Series 5 Preferred Shares") at a price of $25.00 per share for aggregate proceeds of $250 million. The
holders of Series 5 Preferred Shares are entitled to receive fixed cumulative dividends at an annual rate of $1.25 per share,
if, as and when declared by the Board of Directors. The dividend rate will reset on June 1, 2019and every five years thereafter
at a rate equal to the sum of the then five-year Government of Canada bond yield plus 3.00 percent. The Series 5 Preferred Shares
are redeemable by the Company at its option on June 1, 2019and on June 1 of every fifth year thereafter.

Holders
of the Series 5 Preferred Shares have the right to convert their shares into cumulative redeemable floating rate Class A Preferred
shares, Series 6 ("Series 6 Preferred Shares"), subject to certain conditions, on June 1, 2019 and on June 1 of every
fifth year thereafter. Holders of Series 5 Preferred Shares will be entitled to receive a cumulative quarterly floating dividend
at a rate equal to the sum of the then 90-day Government of Canada Treasury Bill yield plus 3.00 percent, if, as and when declared
by the Board of Directors of Pembina.

Proceeds
from the offering were used to partially fund capital projects, to reduce indebtedness under the Company’s credit facilities,
and for other general corporate purposes of the Company. The Series 5 Preferred Shares began trading on the Toronto Stock Exchange
on January 16, 2014 under the symbol PPL.PR.E.

The
Company’s Board of Directors declared an initial dividend of $0.1507 per Series 5 Preferred Share for the period from January
16, 2014 to February 28, 2014 which is payable on March 1, 2014 to shareholders of record at the close of business on February
1, 2014.

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LEFT INTENTIONALLY BLANK





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|Pembina Pipeline Corporation | 
|---------------------------- | 

CORPORATE
INFORMATION



|HEAD
                                                                      OFFICE
        Pembina
        Pipeline Corporation
        Suite
        3800, 525 - 8th Avenue S.W.
        Calgary,
        Alberta T2P 1G1
        AUDITORS
        KPMG
        LLP
        Chartered
        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
        TSX
        listing symbols for:
        Common
        shares: PPL
        Convertible
        debentures: PPL.DB.C, PPL.DB.E, PPL.DB.F
        Preferred
        shares: PPL.PR.A, PPL.PR.C, PPL.PR.E
        NYSE
        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 | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 



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