# EDGAR Filing Document

**Accession Number:** 0001546066
**File Stem:** 0001546066-26-000014
**Filing Date:** 2026-2
**Character Count:** 1094029
**Document Hash:** 38fa68765a4a48bac5fa112c023d7968
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001546066-26-000014.hdr.sgml**: 20260227

**ACCESSION NUMBER**: 0001546066-26-000014

**CONFORMED SUBMISSION TYPE**: 40-F

**PUBLIC DOCUMENT COUNT**: 172

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260227

**DATE AS OF CHANGE**: 20260226

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** PEMBINA PIPELINE CORP
- **CENTRAL INDEX KEY:** 0001546066
- **STANDARD INDUSTRIAL CLASSIFICATION:** OIL AND GAS FIELD EXPLORATION SERVICES [1382]
- **ORGANIZATION NAME:** 01 Energy & Transportation
- **EIN:** 000000000
- **STATE OF INCORPORATION:** A0
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 40-F
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-35563
- **FILM NUMBER:** 26691419

**BUSINESS ADDRESS:**
- **STREET 1:** (ROOM #39-095) 4000, 585 8TH AVENUE S.W.
- **CITY:** CALGARY
- **STATE:** A0
- **ZIP:** T2P 1G1
- **BUSINESS PHONE:** 403-231-7500

**MAIL ADDRESS:**
- **STREET 1:** (ROOM #39-095) 4000, 585 8TH AVENUE S.W.
- **CITY:** CALGARY
- **STATE:** A0
- **ZIP:** T2P 1G1

?xml version='1.0' encoding='ASCII'? pba-20251231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

**FORM 40-F**

(Check One)

---

| | |
|:---|:---|
| ☐ | Registration statement pursuant to Section 12 of the Securities Exchange Act of 1934 |
| | or |
| ☒ | Annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 |

---

For the fiscal year ended December 31, 2025

Commission file number **1-35563**

**PEMBINA PIPELINE CORPORATION**

(Exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| **Alberta, Canada** | **4612** | **None** |
| (Province or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number (if applicable)) | (I.R.S. Employer Identification Number (if Applicable)) |

---

**Suite 4000, 585 – 8th Avenue S.W., Calgary, Alberta, Canada T2P 1G1**

**(403) 231-7500**

(Address and Telephone Number of Registrant's Principal Executive Offices)

**CT Corporation System, 28 Liberty Street, New York, New York 10005 (212) 894-8940**

(Name, Address (Including Zip Code) and Telephone Number

(Including Area Code) of Agent For Service in the United States)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

---

| | | |
|:---|:---|:---|
| **<u>Title of each class</u>** | **<u>Trading Symbol</u>** | **<u>Name of each exchange on which registered</u>** |
| **Common Shares** | **PBA** | **New York Stock Exchange** |

---

Securities registered or to be registered pursuant to Section 12(g) of the Act. **None**

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act. **None**

For annual reports, indicate by check mark the information filed with this Form:

☒ Annual Information Form ☒ Audited Annual Financial Statements

Auditor Name: KPMG LLP Auditor Location: Calgary, Canada Auditor Firm ID: 85

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report: 581,068,405.

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No ____

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (s.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).

Yes [X] No ____

------

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.

Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

☐

**FORM 40-F**

**Principal Documents**

The following documents, filed as Exhibits 99.1 and 99.2 to this Annual Report on Form 40-F of Pembina Pipeline Corporation ("Pembina"), are hereby incorporated by reference into this Annual Report on Form 40-F:

(a)Annual Information Form for the fiscal year ended December 31, 2025; and

(b)Management's Discussion and Analysis for the fiscal year ended December 31, 2025 and Audited Consolidated Financial Statements for the fiscal year ended December 31, 2025. Pembina's Audited Consolidated Financial Statements included in this Annual Report on Form 40-F have been prepared in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board. Therefore, they are not comparable in all respects to financial statements of United States companies that are prepared in accordance with United States generally accepted accounting principles.

**ADDITIONAL DISCLOSURE**

**Certifications and Disclosure Regarding Controls and Procedures.**

(a)<u>Certifications</u>. See Exhibits 99.3, 99.4, 99.5 and 99.6 to this Annual Report on Form 40-F.

(b)<u>Disclosure Controls and Procedures</u>. As of the end of Pembina's fiscal year ended December 31, 2025, an evaluation of the effectiveness of Pembina's "disclosure controls and procedures" (as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) was carried out by Pembina's management, with the participation of its principal executive officer and principal financial officer. Based upon that evaluation, Pembina's principal executive officer and principal financial officer have concluded that as of the end of that fiscal year Pembina's disclosure controls and procedures are effective to ensure that information required to be disclosed by Pembina in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission (the "Commission") rules and forms and (ii) accumulated and communicated to Pembina's management, including its principal executive officer and principal financial officers, to allow timely decisions regarding required disclosure.

It should be noted that while Pembina's principal executive officer and principal financial officer believe that Pembina's disclosure controls and procedures provide a reasonable level of assurance that they are effective, they do not expect that Pembina's disclosure controls and procedures or internal control over financial reporting will prevent

40-F2

------

all errors or fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

(c)<u>Management's Annual Report on Internal Control Over Financial Reporting</u>. The required disclosure is included in the "Management's Report" that accompanies Pembina's Consolidated Financial Statements for the fiscal year ended December 31, 2025, filed as Exhibit 99.2 to this Annual Report on Form 40-F.

(d)<u>Attestation Report of the Registered Public Accounting Firm</u>. The required disclosure is included in the "Report of Independent Registered Public Accounting Firm" that accompanies Pembina's Consolidated Financial Statements for the fiscal year ended December 31, 2025, filed as Exhibit 99.2 to this Annual Report on Form 40-F.

(e)<u>Changes in Internal Control Over Financial Reporting</u>. Pembina's internal controls over financial reporting as of April 1, 2025, include the business processes associated with the Alliance, Aux Sable and NRGreen acquisition. Other than in connection with the Alliance, Aux Sable and NRGreen acquisition, no changes were made in Pembina's internal control over financial reporting during the fiscal year ended December 31, 2025 that have materially affected or are reasonably likely to materially affect Pembina's internal control over financial reporting.

**Notices Pursuant to Regulation BTR.**

None.

**Audit Committee Financial Expert.**

Pembina's board of directors has determined that Alister Cowan and Maureen Howe, members of Pembina's audit committee, each qualify as an "audit committee financial expert" (as such term is defined in paragraph (8) of General Instruction B to Form 40-F) and are "independent" as that term is defined in the rules of the New York Stock Exchange.

**Code of Ethics.**

Pembina has adopted a Code of Ethics that meets the definition of a "code of ethics" set forth in paragraph (9) of General Instruction B to Form 40-F, and that applies to all of its employees, including its principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions.

Since the beginning of Pembina's last fiscal year, there have not been any waivers, including implicit waivers, granted from, any provision of the Code of Ethics.

The Code of Ethics is available for viewing on Pembina's website at www.pembina.com and is available in print to any shareholder who requests it. Requests for copies of the Code of Ethics should be made by contacting: Investor Relations by phone at (855) 880-7404 or by e-mail at investor-relations@pembina.com.

If any further amendment to the Code of Ethics is made, or if any waiver from the provisions thereof is granted, Pembina will disclose the information about such amendment or waiver required by Form 40-F to be disclosed, by posting such disclosure on Pembina's website, which may be accessed at www.pembina.com.

**Principal Accountant Fees and Services.**

The required disclosure is included under the heading "Audit Committee Information-External Auditor Service Fees" in Pembina's Annual Information Form for the fiscal year ended December 31, 2025, filed as Exhibit 99.1 to this Annual Report on Form 40-F.

**Pre-Approval Policies and Procedures.**

(a)Pembina's audit committee pre-approves all audit and non-services provided to Pembina by its external auditor, KPMG LLP. Also see "Audit Committee Information-Pre-Approval Policies and Procedures for Audit and Non-Audit Services" in Pembina's Annual Information Form for the fiscal year ended December 31, 2025, filed as Exhibit 99.1 to this Annual Report on Form 40-F.

(b)Of the fees reported in Exhibit 99.1 to this Annual Report on Form 40-F under the heading "Audit Committee Information-External Auditor Service Fees", none of the fees billed by KPMG LLP were approved by Pembina's audit committee pursuant to the *de minimis* exception provided by Section (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

40-F3

------

**Off-Balance Sheet Arrangements.**

Pembina does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

**Contractual Obligations.**

The required disclosure is included under the heading "Contractual Obligations" in Pembina's Management's Discussion and Analysis for the fiscal year ended December 31, 2025, filed as Exhibit 99.2 to this Annual Report on Form 40-F.

**Identification of the Audit Committee.**

Pembina has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The members of the audit committee are: Maureen E. Howe (Chair), Alister Cowan, Andy J. Mah, Leslie O'Donoghue and Bruce D. Rubin.

**Mine Safety Disclosure.** 

Not applicable.

**New York Stock Exchange Disclosure**.

<u>NYSE Statement of Governance Differences</u>

As a foreign private issuer listed on the NYSE, Pembina is not required to comply with most of the NYSE corporate governance standards, so long as it complies with Canadian corporate governance practices. In order to claim such an exemption, however, Pembina must disclose the significant difference between its corporate governance practices and those required to be followed by U.S. domestic companies under the NYSE's corporate governance standards. Pembina has included a description of such significant differences in corporate governance practices on its website, which may be accessed at <u>www.pembina.com</u>.

**UNDERTAKING AND CONSENT TO SERVICE OF PROCESS**

**A.** **<u>Undertaking.</u>**

Pembina undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.

**B.** **<u>Consent to Service of Process.</u>**

Pembina has previously filed a Form F-X in connection with the class of securities in relation to which the obligation to file this report arises.

Any change to the name or address of the agent for service of process of Pembina shall be communicated promptly to the Commission by an amendment to the Form F-X referencing the file number of Pembina.

**SIGNATURES**

Pursuant to the requirements of the Exchange Act, the registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized, on February 26, 2026.

40-F4

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---

| | |
|:---|:---|
| **Pembina Pipeline Corporation** | **Pembina Pipeline Corporation** |
| By: | /s/ "J. Scott Burrows*"* |
| Name: | J. Scott Burrows |
| Title: | President and Chief Executive Officer |

---

40-F5

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**EXHIBIT INDEX**

---

| | |
|:---|:---|
| Exhibit | Description |
| 97 | <u>[Clawback Policy](clawbackpolicyq42025.htm)</u> |
| 99.1 | <u>[Annual Information Form for the fiscal year ended December 31, 2025](aifppcq42025.htm)</u> |
| 99.2 | <u>[Management's Discussion and Analysis for the fiscal year ended December 31, 2025 and Audited Consolidated Financial Statements for the fiscal year ended December 31, 2025, prepared in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board, and Attestation Reports of Independent Registered Accounting Firm](pba-20251231_d2.htm)</u> |
| 99.3 | <u>[Certification of Chief Executive Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934](ceocertificateofannualfili.htm)</u> |
| 99.4 | <u>[Certification of Chief Financial Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934](cfocertificateofannualfili.htm)</u> |
| 99.5 | <u>[Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350](ceosoxcertificateppcq42025.htm)</u> |
| 99.6 | <u>[Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350](cfosoxcertificateq42025.htm)</u> |
| 99.7 | <u>[Consent of KPMG LLP](consentofkpmgllp-ppcq42025.htm)</u> |
| 101 | Inline Interactive Data File |
| 104 | Cover Page Interactive Data File |

---

## Ex-97

![clabackpolicy.jpg](clabackpolicy.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;I.PURPOSE OF THE POLICY

Pembina Pipeline Corporation (the "**Corporation**") has publicly traded securities on the New York Stock Exchange ("**NYSE**"). This Policy has been adopted by Pembina in accordance with NYSE listing requirements.

The purpose of this Policy is to clarify when the Corporation may be required to recoup incentive-based compensation from an Executive Officer.

&nbsp;&nbsp;&nbsp;&nbsp;II.SCOPE AND APPLICATION

Application of Policy

This Policy applies in the event of <u>any</u> restatement ("**Restatement**") of the Corporation's interim or annual financial statements due to its material non-compliance with financial reporting requirements under applicable securities laws.

For clarity, this Policy does not apply to restatements of the Corporation's financial statements that are not caused by non-compliance with financial reporting requirements, such as, but not limited to, a retrospective: (a) application of a change in accounting principles; (b) revision to reportable segment information due to a change in the organizational structure of the Corporation; (c) reclassification due to a discontinued operation; (d) application of a change in reporting entity, such as from a reorganization of entities under common control; (e) adjustment to provision amounts in connection with a prior business combination; and (f) revision for stock splits, reverse stock splits or share consolidations, dividends or other changes in capital structure.

This Policy applies to: (i) all Incentive-Based Compensation (as defined below) received on or after October 2, 2023 (the "**Effective Date**"), as required by Rule 10D-1 of the U.S. Securities Exchange Act of 1934 ("**Rule 10-D**"); (ii) bonus or other incentive-based or equity-based compensation required to be reimbursed pursuant to Rule 304 of the Sarbanes-Oxley Act of 2002; and (iii) any other bonus or incentive-based or equity-based compensation that the Board, in its sole discretion, elects to clawback under this policy, as described herein.

AUGUST 2025

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Executive Officers Subject to the Policy

This Policy applies to only to those executives of the Corporation who serve or served as an "executive officer" of Pembina, as such term is defined under Rule 10D ("**Executive Officers**") at any time during the Clawback Period (as defined below). An "Executive Officer" includes the Corporation's current or former CEO, CFO, Vice President, Accounting (or any other current or former officer or person who performs or performed a similar role for the Corporation), any senior officer and senior vice president of the Corporation, and any other current or former officer or person who performs or performed a significant policy-making function for the Corporation, including executive officers of the Corporation's subsidiaries, if they perform such policy-making functions.

All Executive Officers are subject to this Policy, even if an Executive Officer had no responsibility for the financial statement errors which required a Restatement.

Definitions

In this Policy:

"**Board**" or "**Board of Directors**" means the board of directors of the Corporation from time to time;

"**CEO**" means the President and Chief Executive Officer of the Corporation;

"**CFO**" means the Chief Financial Officer of the Corporation;

"**Corporation**" means Pembina Pipeline Corporation;

"**NYSE**" means the New York Stock Exchange;

"**Pembina**" means collectively, the Corporation and its subsidiaries;

"**Policy**" means this Clawback Policy; and

"**SEC**" means the United States Securities and Exchange Commission.

&nbsp;&nbsp;&nbsp;&nbsp;III.COMPENSATION SUBJECT TO POLICY

This Policy applies to any Incentive-Based Compensation "received" by an Executive Officer during the Clawback Period (as such terms are defined below).

Incentive- Based Compensation

Incentive-based compensation includes ("**Incentive-Based Compensation**"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)incentive awards paid or granted to an Executive Officer under the Corporation's incentive compensation plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)stock options or equity-based awards (or any amount attributable to such awards) paid or granted to an Executive Officer under the Corporation's incentive compensation plans; and

AUGUST 2025

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)any other incentive-based compensation (including any cash or equity compensation) that is paid, vested, earned or granted pursuant any other award made by the Corporation to the Executive Officer,

in each case <u>based wholly or in part upon the attainment of a "financial reporting measure"</u>.

Financial reporting measures are measures that are determined and presented in accordance with the accounting principles used in preparing the Corporation's financial statements and any measures derived wholly or in part from such financial information (including, but not limited to, non-GAAP measures, share price and total shareholder return).

For clarity, "Incentive-Based Compensation" does not include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)base annual salary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)compensation which is awarded based solely on service to the Corporation (e.g. a time-vested awards); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)compensation which is awarded based solely on non-financial reporting measures, subjective standards, strategic measures (e.g. completion of a merger) or operational measures (e.g. attainment of a certain market share).

Claw-Back Period and Performance Period

The Clawback Period consists of any of the three completed fiscal years immediately preceding: (a) the date that the Board concludes, or reasonably should have concluded, that the Corporation is required to prepare a Restatement, or (b) the date that a court, regulator, or other legally authorized body directs the Corporation to prepare a Restatement.

For purposes of this Policy, Incentive-Based Compensation is deemed "received" in the fiscal period during which the applicable financial reporting measure (as specified in the terms of the award) is attained (the "**Performance** Period"), even if the payment or grant occurs after the end of that fiscal period.

For the avoidance of doubt, the Clawback Period with respect to an Executive Officer applies to Incentive-Based Compensation received by the Executive Officer (a) after beginning services as an Executive Officer (including compensation derived from an award authorized before the individual is newly hired as an Executive Officer, e.g. inducement grants) and (b) if that person served as an Executive Officer at any time during the Performance Period for such Incentive-Based Compensation.

&nbsp;&nbsp;&nbsp;&nbsp;IV.AMOUNT TO BE REPAID

Subject to the limitations set forth below under "Repayment of Recoverable Amount", the amount of Incentive-Based Compensation that must be repaid by the Executive Officer is the amount of Incentive-Based Compensation previously received by the Executive Officer that exceeds the amount of Incentive-Based Compensation that the Executive Officer otherwise would have received had such Incentive-Based Compensation been determined based on the Restatement (the "**Recoverable Amount**").

AUGUST 2025

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Determining the Recoverable Amount

After a Restatement, the Corporation will recalculate the applicable financial reporting measure and the Recoverable Amount in accordance with SEC and the NYSE rules. The Corporation will determine whether, based on that financial reporting measure as calculated relying on the original financial statements, the Executive Officer received a greater amount of Incentive-Based Compensation than would have been received applying the recalculated financial measure.

Where Incentive-Based Compensation is based only in part on the achievement of a financial reporting measure, the Corporation will determine the portion of the original Incentive-Based Compensation derived from the financial reporting measure which was restated and will recalculate the affected portion based on the restated financial reporting measure to determine the Recoverable Amount.

For Incentive-Based Compensation that is not subject to mathematical recalculation directly from the information in an accounting restatement (e.g., Incentive-Based Compensation based on share price or total shareholder return):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Recoverable Amount shall be based on a reasonable estimate of the effect of the accounting restatement on the share price or total shareholder return upon which the Incentive-Based Compensation was received; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Corporation shall maintain and provide documentation of the determination of that reasonable estimate to the NYSE.

Recoverable Amounts must be calculated on a pre-tax basis to ensure that the Corporation recovers the full amount of Incentive-Based Compensation that was erroneously awarded.

Equity Compensation

If equity compensation is recoverable due to being granted to the Executive Officer (when the accounting results were the reason the equity compensation was granted) or vested by the Executive Officer (when the accounting results were the reason the equity compensation was vested), in each case during the Clawback Period, the Corporation will recover the excess portion of the equity award that would not have been granted or vested based on the Restatement, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)if the equity award is still outstanding, the Executive Officer will forfeit the excess portion of the award;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)if the equity award has been exercised or settled into shares (the "**Underlying Shares**"), and the Executive Officer still holds the Underlying Shares, the Corporation will recover the number of Underlying Shares relating to the excess portion of the award (less any exercise price paid for the Underlying Shares); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)if the Underlying Shares have been sold by the Executive Officer, the Corporation will recover the proceeds received by the Executive Officer from the sale of the Underlying Shares relating to the excess portion of the award (less any exercise price paid for the Underlying Shares).

AUGUST 2025

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Repayment of Recoverable Amount

The Human Resources and Compensation Committee will take such action as it deems appropriate, in its sole and absolute discretion, to reasonably promptly to recover the Recoverable Amount, unless the Human Resources and Compensation Committee determines that it would be impracticable to recover such amount because:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)the Corporation has made a reasonable and documented attempt to recover the Recoverable Amount and has determined that the direct costs of enforcing recovery would exceed the Recoverable Amount, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Corporation, to fail to meet the requirements of 26 U.S.C. 401(a)(13) or 26 U.S.C. 411(a) and regulations thereunder, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)if the recovery of the incentive-based compensation would, based on an opinion of legal counsel, violate the laws of the Province of Alberta and the federal laws of Canada applicable therein.

In no event shall the Corporation be required to award Executive Officers an additional payment if the restated or accurate financial results would have resulted in a higher incentive compensation payment.

&nbsp;&nbsp;&nbsp;&nbsp;V.ADDITIONAL CLAWBACK REQUIRED BY SECTION 304 OF THE SARBANES-OXLEY ACT OF 2002

In addition to the provisions described above, if the Corporation is required to prepare an accounting restatement due to the material noncompliance of the Corporation, with any financial reporting requirement under securities laws as a result of misconduct, then, in accordance with Section 304 of the Sarbanes-Oxley Act of 2002, the CEO and CFO (at the time the financial document embodying such financial reporting requirement was originally issued) shall reimburse the Corporation for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)any bonus or other incentive-based or equity-based compensation received from the Corporation during the 12-month period following the first public issuance or filing with the SEC (whichever first occurs) of such financial document; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)any profits realized from the sale of securities of the Corporation during that 12-month period.

To the extent that subsections II, III and IV of this Policy (the "**Rule 10D-1 Clawback Requirements**") would provide for recovery of Incentive-Based Compensation recoverable by the Corporation pursuant to Section 304 of the Sarbanes-Oxley Act, in accordance with this subsection V (the "**Sarbanes-Oxley Clawback Requirements**") and/or any other recovery obligations (including pursuant to employment agreements, or plan awards), the amount such Executive Officer has already reimbursed the Corporation shall be credited to the required recovery under the Rule 10D-1 Clawback Requirements. Recovery pursuant to the Rule 10D-1 Clawback Requirements does not preclude recovery under the Sarbanes-Oxley Clawback Requirements, to the extent any applicable amounts have not been reimbursed to the Corporation.

AUGUST 2025

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&nbsp;&nbsp;&nbsp;&nbsp;VI.ADDITIONAL CLAWBACKS AT THE DISCRETION OF THE BOARD

Notwithstanding anything to the contrary in this policy, if the Corporation is required to prepare an accounting restatement due to material non-compliance with any financial reporting requirement under any applicable securities law and/or any act of fraud breach of fiduciary duty or willful or reckless misconduct in the performance of the Executive Officer's duties that resulted in or contributed to the restatement, the Board may, in its sole discretion, determine to recover, on an after-tax basis, any incentive-based compensation paid or granted to any Executive Officer, including (a) the Executive Officer's incentive awards paid or granted under the Corporation's annual or long-term cash incentive compensation program; (b) any stock options or other equity-based awards (or any amount attributable to such awards) paid or granted to the Executive Officer under the Corporation's long-term equity incentive programs; and (c) any other incentive-based compensation paid or granted pursuant any other award made by the Corporation to the Executive Officer, up to an aggregate amount that shall not exceed the difference between (i) the value of the incentive-based compensation paid or granted to such Executive Officer during the Clawback Period and (ii) the value of the incentive-based compensation that would have been paid or granted to such Executive Officer in the absence of such accounting restatement and/or any related act of fraud or breach of fiduciary duty or willful or reckless misconduct, as determined in good faith by the Board. For the avoidance of doubt, the amount of incentive-based compensation that the Board may elect to clawback pursuant to this provision may exceed the amount that the Corporation is required to clawback pursuant to applicable law; provided, that this provision shall be applied without duplication of any amount required to be clawed back pursuant to applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;VII.INDEMNIFICATION

The Corporation will not indemnify or provide insurance to cover any repayment of Incentive-Based Compensation in accordance with this Policy.

&nbsp;&nbsp;&nbsp;&nbsp;VIII.REVIEWED AND APPROVED

The CFO and the Chief Legal, People and Corporate Affairs Officer are the owners of this Policy.

This Policy will be:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• periodically reviewed by the CFO and the Chief Legal, People and Corporate Affairs Officer and submitted to the Human Resources and Compensation Committee for recommendation to the Board for approval when material changes are proposed.

This Policy was approved by the Board of Directors of the Corporation on November 2, 2023 and by the Human Resources and Compensation Committee in August 2025.

&nbsp;&nbsp;&nbsp;&nbsp;IX.RELATED POLICIES

The following policies relate to the subject matter of this Policy:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Code of Ethics Policy (Canada)

AUGUST 2025

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Code of Ethics Policy (US)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Whistleblower Policy

&nbsp;&nbsp;&nbsp;&nbsp;X.SUPPORTING DOCUMENTS

Rules and Conventions in support of this Policy may be created and approved by the CFO and the Chief Legal, People and Corporate Affairs Officer.

AUGUST 2025

## Exhibit 99.1

![a2018aifversion6image1a07.jpg](a2018aifversion6image1a07.jpg)

**PEMBINA PIPELINE CORPORATION**

**ANNUAL INFORMATION FORM**

**For the Year Ended December 31, 2025** 

**February 26, 2026**

------

**TABLE OF CONTENTS** 

---

| | |
|:---|:---|
| | **Page** |
| **[GLOSSARY OF TERMS](#i00c00ef2611f4a62937ccd758772668b_7)** | **-[1](#i00c00ef2611f4a62937ccd758772668b_7)-** |
| **[ABBREVIATIONS AND CONVERSIONS](#i00c00ef2611f4a62937ccd758772668b_10)** | **-[15](#i00c00ef2611f4a62937ccd758772668b_10)-** |
| **[NON-GAAP FINANCIAL MEASURES](#i00c00ef2611f4a62937ccd758772668b_13)** | **-[16](#i00c00ef2611f4a62937ccd758772668b_13)-** |
| **[FORWARD-LOOKING STATEMENTS AND INFORMATION](#i00c00ef2611f4a62937ccd758772668b_16)** | **-[17](#i00c00ef2611f4a62937ccd758772668b_16)-** |
| **[CORPORATE STRUCTURE](#i00c00ef2611f4a62937ccd758772668b_19)** | **-[21](#i00c00ef2611f4a62937ccd758772668b_19)-** |
| **[GENERAL DEVELOPMENTS OF PEMBINA](#i00c00ef2611f4a62937ccd758772668b_34)** | **-[23](#i00c00ef2611f4a62937ccd758772668b_34)-** |
| **[DESCRIPTION OF PEMBINA'S BUSINESS AND OPERATIONS](#i00c00ef2611f4a62937ccd758772668b_49)** | **-[31](#i00c00ef2611f4a62937ccd758772668b_49)-** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Pembina's Purpose, Values, and Strategy](#i00c00ef2611f4a62937ccd758772668b_52) | **-[31](#i00c00ef2611f4a62937ccd758772668b_52)-** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Overview of Pembina's Business](#i00c00ef2611f4a62937ccd758772668b_55) | **-[32](#i00c00ef2611f4a62937ccd758772668b_55)-** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Pipelines Division](#i00c00ef2611f4a62937ccd758772668b_58) | **-[34](#i00c00ef2611f4a62937ccd758772668b_58)-** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Facilities Division](#i00c00ef2611f4a62937ccd758772668b_61) | **-[40](#i00c00ef2611f4a62937ccd758772668b_61)-** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Marketing & New Ventures Division](#i00c00ef2611f4a62937ccd758772668b_64) | **-[46](#i00c00ef2611f4a62937ccd758772668b_64)-** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Seasonality](#i00c00ef2611f4a62937ccd758772668b_67) | **-[49](#i00c00ef2611f4a62937ccd758772668b_67)-** |
| **[OTHER INFORMATION RELATING TO PEMBINA'S BUSINESS](#i00c00ef2611f4a62937ccd758772668b_70)** | **-[50](#i00c00ef2611f4a62937ccd758772668b_70)-** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Operational Excellence Management System](#i00c00ef2611f4a62937ccd758772668b_73) | **-[50](#i00c00ef2611f4a62937ccd758772668b_73)-** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Industry Regulation](#i00c00ef2611f4a62937ccd758772668b_76) | **-[55](#i00c00ef2611f4a62937ccd758772668b_76)-** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Corporate Governance](#i00c00ef2611f4a62937ccd758772668b_79) | **-[58](#i00c00ef2611f4a62937ccd758772668b_79)-** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Social, Community and Indigenous Engagement](#i00c00ef2611f4a62937ccd758772668b_82) | **-[62](#i00c00ef2611f4a62937ccd758772668b_82)-** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Indemnification and Insurance](#i00c00ef2611f4a62937ccd758772668b_85) | **-[63](#i00c00ef2611f4a62937ccd758772668b_85)-** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Employees](#i00c00ef2611f4a62937ccd758772668b_88) | **-[64](#i00c00ef2611f4a62937ccd758772668b_88)-** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Equity, Diversity and Inclusion](#i00c00ef2611f4a62937ccd758772668b_91) | **-[64](#i00c00ef2611f4a62937ccd758772668b_91)-** |
| **[CANADIAN OIL AND GAS INDUSTRY](#i00c00ef2611f4a62937ccd758772668b_94)** | **-[66](#i00c00ef2611f4a62937ccd758772668b_94)-** |
| **[DESCRIPTION OF THE CAPITAL STRUCTURE OF PEMBINA](#i00c00ef2611f4a62937ccd758772668b_109)** | **-[69](#i00c00ef2611f4a62937ccd758772668b_109)-** |
| **[DIVIDENDS AND DISTRIBUTIONS](#i00c00ef2611f4a62937ccd758772668b_136)** | **-[77](#i00c00ef2611f4a62937ccd758772668b_136)-** |
| **[MARKET FOR SECURITIES](#i00c00ef2611f4a62937ccd758772668b_142)** | **-[79](#i00c00ef2611f4a62937ccd758772668b_142)-** |
| **[DIRECTORS AND OFFICERS](#i00c00ef2611f4a62937ccd758772668b_151)** | **-[80](#i00c00ef2611f4a62937ccd758772668b_151)-** |
| **[AUDIT COMMITTEE INFORMATION](#i00c00ef2611f4a62937ccd758772668b_163)** | **-[84](#i00c00ef2611f4a62937ccd758772668b_163)-** |
| **[RISK FACTORS](#i00c00ef2611f4a62937ccd758772668b_178)** | **-[87](#i00c00ef2611f4a62937ccd758772668b_178)-** |
| **[INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS](#i00c00ef2611f4a62937ccd758772668b_193)** | **-[110](#i00c00ef2611f4a62937ccd758772668b_193)-** |
| **[MATERIAL CONTRACTS](#i00c00ef2611f4a62937ccd758772668b_196)** | **-[110](#i00c00ef2611f4a62937ccd758772668b_196)-** |
| **[LEGAL PROCEEDINGS AND REGULATORY ACTIONS](#i00c00ef2611f4a62937ccd758772668b_199)** | **-[110](#i00c00ef2611f4a62937ccd758772668b_199)-** |
| **[REGISTRAR AND TRANSFER AGENT](#i00c00ef2611f4a62937ccd758772668b_202)** | **-[110](#i00c00ef2611f4a62937ccd758772668b_202)-** |
| **[INTERESTS OF EXPERTS](#i00c00ef2611f4a62937ccd758772668b_205)** | **-[110](#i00c00ef2611f4a62937ccd758772668b_205)-** |
| **[W](#i00c00ef2611f4a62937ccd758772668b_1589)[ELL](#i00c00ef2611f4a62937ccd758772668b_1589)[-KNOWN SEASONED ISSUER](#i00c00ef2611f4a62937ccd758772668b_1589)** | **-[110](#i00c00ef2611f4a62937ccd758772668b_1589)-** |
| **[ADDITIONAL INFORMATION](#i00c00ef2611f4a62937ccd758772668b_208)** | **-[110](#i00c00ef2611f4a62937ccd758772668b_208)-** |
| **[APPENDIX "A" - AUDIT COMMITTEE CHARTER](#i00c00ef2611f4a62937ccd758772668b_211)** | **- A-[1](#i00c00ef2611f4a62937ccd758772668b_211)-** |

---

 -i-

------

**GLOSSARY OF TERMS**

Terms used in this Annual Information Form and not otherwise defined have the meanings set forth below:

"**2026 Base Shelf Prospectus**" means the short form base shelf prospectus filed with the securities commissions or similar regulatory authorities in each of the provinces of Canada on January 23, 2026, allowing Pembina to offer and issue, from time to time: (i) Common Shares; (ii) Class A Preferred Shares; (iii) warrants to purchase Common Shares; (iv) bonds, debentures, notes or other evidence of indebtedness of any kind, nature or description of the Company; (v) subscription receipts of the Company; and (vi) units comprising any combination of the foregoing (together with the foregoing, collectively, the "**2026 Securities**") during the 37 month period that the 2026 Base Shelf Prospectus is valid, which 2026 Securities may be offered separately or together, in amounts, at prices and on terms to be determined based on market conditions at the time of the sale and set forth in one or more shelf prospectus supplements;

"**2026 MTN Prospectus**" means the short form base shelf prospectus filed with the securities commissions or similar regulatory authorities in each of the provinces of Canada on January 23, 2026, allowing Pembina to offer and issue, from time to time, medium term notes during the 37 month period that the 2026 MTN Prospectus is valid, which medium term notes may be offered at rates of interest, prices and on terms to be determined based on market conditions at the time of the sale and set forth in one or more shelf prospectus supplements or pricing supplements;

"**ABCA**" means the *Business Corporations Act* (Alberta);

"**Advantage**" has the meaning ascribed thereto under "*Directors and Officers – Directors of Pembina*";

"**AEGS**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Pipelines Division – Assets"*;

"**AEPA**" means Alberta Environment and Protected Areas, a ministry of the Government of Alberta;

"**AER**" means the Alberta Energy Regulator;

"**AESO**" means the Alberta Electric System Operator;

"**Alberta Carbon Grid**" has the meaning ascribed thereto under "*Marketing & New Ventures Division – New Ventures*";

"**Alliance Canada**" means Alliance Pipeline Limited Partnership;

"**Alliance Pipeline**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Pipelines Division – Assets*";

"**Alliance/Aux Sable Acquisition**" has the meaning ascribed thereto under "*General Developments of Pembina – Developments in 2023*";

"**Alliance U.S.**" means Alliance Pipeline L.P.;

**"AltaGas**" means AltaGas Ltd.;

"**Amended Federal Methane Regulations**" has the meaning ascribed thereto under "*Risk Factors – Risks Inherent in Pembina's Business – Environmental Costs and Liabilities*";

"**Anti-Corruption Laws**" means Canada's *Criminal Code* and *Corruption of Foreign Public Officials Act*, the United States *Foreign Corrupt Practices Act*, various state laws in the United States that criminalize bribery and corruption of United States Government Officials, the *U.K. Bribery Act, 2010*, the principles described in the Organisation for Economic Co-operation and Development's C*onvention on Combating Bribery of Foreign Public Officials in International Business Transactions* and its Commentaries, and any local anti-bribery or anti-corruption laws applicable to Pembina;

"**AUC**" means the Alberta Utilities Commission;

------

"**Aux Sable**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**Aux Sable Canada**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**Aux Sable U.S.**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**Aux Sable U.S. LP**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**B.C.**" means the province of British Columbia;

"**BCEAO**" means the British Columbia Environmental Assessment Office;

"**BCER**" means the British Columbia Energy Regulator;

"**BCMOE**" means the British Columbia Ministry of Environment;

"**BCUC**" means the British Columbia Utilities Commission;

"**Birch-to-Taylor Expansion**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Pipelines Division – Assets*";

"**Board**" or "**Board of Directors**" means the board of directors of Pembina from time to time;

"**Brazeau Pipeline**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Pipelines Division – Assets*";

"**BRFN**" has the meaning ascribed thereto under "*Risk Factors – General Risk Factors – Indigenous Land Claims and Consultation Obligations*";

"**Burstall**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**Canada/Alberta MOU**" has the meaning ascribed thereto under "*Risk Factors – Risks Inherent in Pembina's Business – Regulation and Legislation*";

"**Canada Yield Price**" has the meaning ascribed thereto under "*Description of the Capital Structure of Pembina – Medium Term Notes*";

"**CDH**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Pipelines Division – Assets*";

***"*Cedar LNG**" means Pembina's partnership with the Haisla Nation to develop the Cedar LNG Project;

"**Cedar LNG Project**" has the meaning ascribed thereto under "*General Developments of Pembina – Developments in 2024*";

"**CER**" means the Canada Energy Regulator;

"**CER Act**" has the meaning ascribed thereto under "*Other Information Relating to Pembina's Business – Industry Regulation – CER*";

"**Channahon Facility**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

------

"**Class A Preferred Shares**" means class A preferred shares of Pembina, issuable in series, and, where the context requires, includes the Series 1 Class A Preferred Shares, the Series 2 Class A Preferred Shares, the Series 3 Class A Preferred Shares, the Series 4 Class A Preferred Shares, the Series 5 Class A Preferred Shares, the Series 6 Class A Preferred Shares, the Series 7 Class A Preferred Shares, the Series 8 Class A Preferred Shares, the Series 9 Class A Preferred Shares, the Series 15 Class A Preferred Shares, the Series 16 Class A Preferred Shares, the Series 17 Class A Preferred Shares, the Series 18 Class A Preferred Shares, the Series 19 Class A Preferred Shares, the Series 21 Class A Preferred Shares, the Series 22 Class A Preferred Shares, the Series 25 Class A Preferred Shares, the Series 26 Class A Preferred Shares and the Series 2021-A Class A Preferred Shares;

"**Class B Preferred Shares**" means class B preferred shares of Pembina;

"**Cochin Pipeline**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Pipelines Division – Assets*";

"**Common Shares**" means the common shares of Pembina;

"**Company**" or "**Pembina**" means Pembina Pipeline Corporation, an ABCA corporation, and, unless the context otherwise requires, includes its subsidiaries;

"**condensate**" means a hydrocarbon mixture consisting primarily of pentanes and heavier hydrocarbon liquids;

"**Crown**" has the meaning ascribed thereto under "*Risk Factors – General Risk Factors – Indigenous Land Claims and Consultation Obligations*";

"**CRC**" means Cutbank Ridge Corporation ULC, a joint venture between Ovintiv Canada ULC, a subsidiary of Ovintiv, and Cutbank Dawson Gas Resources Ltd., a subsidiary of Mitsubishi Corporation;

"**Cutbank Complex**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**Cutbank Gas Plant**" means PGI's shallow cut sweet gas processing facility located near Grande Prairie, Alberta;

"**Dawson Assets**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**DBRS**" means DBRS Morningstar;

"**deep cut**" means ethane-plus extraction gas processing capabilities;

"**Directive 088**" has the meaning ascribed thereto under "*Other Information Relating to Pembina's Business – Industry Regulation – AER and AUC*";

"**Drayton Valley Pipeline**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Pipelines Division – Assets*";

"**DRIPA**" has the meaning ascribed thereto under "*Risk Factors – General Risk Factors – Indigenous Land Claims and Consultation Obligations*";

"**Duvernay Complex**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**Duvernay Field Hub**" means PGI's 30 MMcf/d gas, 10 mbpd condensate and 5 mbpd water handling and condensate stabilization facility located near Fox Creek, Alberta;

"**Duvernay I**" means PGI's 100 percent interest in the Duvernay I 110 MMcf/d shallow cut gas processing facility located near Fox Creek, Alberta;

"**Duvernay II**" means PGI's 100 percent interest in the Duvernay II 110 MMcf/d shallow cut gas processing facility located near Fox Creek, Alberta;

------

"**Duvernay III**" means PGI's 100 percent interest in the Duvernay III 110 MMcf/d shallow cut gas processing facility located near Fox Creek, Alberta;

"**Duvernay Sour Gas Treating Facilities**" means PGI's sour gas sweetening system, amine regeneration and acid incineration facility located near Fox Creek, Alberta;

"**EA Act**" has the meaning ascribed thereto under "*Risk Factors – General Risk Factors – Indigenous Land Claims and Consultation Obligations*";

"**East NGL System**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**ECCC**" means Environment and Climate Change Canada, a department of the Government of Canada;

"**ECMP**" has the meaning ascribed thereto under "*Other Information Relating to Pembina's Business – Operational Excellence Management System – Emergency & Continuity Management Program*";

"**EDGAR**" means the Electronic Data Gathering, Analysis and Retrieval system;

"**EDI**" means equity, diversity and inclusion;

"**Edmonton Terminals**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Pipelines Division – Assets*";

"**Empress**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**Empress Co-generation Facility**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**Empress Pipeline**" is an approximately 25 km pipeline of buried HVP ethane pipeline and associated riser facilities that connect the Alberta ethane market serviced by the AEGS to the Burstall ethane cavern storage facilities in Southern Saskatchewan;

"**Enbridge**" means Enbridge Inc.;

"**ENT**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Pipelines Division – Assets*";

"**equity accounted investees**" means Pembina's working interest in PGI, Grand Valley, Fort Corp, the Alberta Carbon Grid and Cedar LNG, and, prior to the closing of the Alliance/Aux Sable Acquisition, Alliance Pipeline, Aux Sable and NRGreen;

"**ESG**" means environmental, social and governance, the three central factors in measuring the sustainability and societal impact of a company;

"**Federal Methane Regulations**" has the meaning ascribed thereto under "*Risk Factors – Risks Inherent in Pembina's Business – Environmental Costs and Liabilities*";

"**FERC**" means the United States Federal Energy Regulatory Commission;

"**FID**" means final investment decision;

"**Financial Statements**" means Pembina's audited consolidated financial statements for the period ended December 31, 2025;

"**Five Year Government of Canada Yield**" has the meaning ascribed thereto under "*Description of the Capital Structure of Pembina – Subordinated Notes – Subordinated Notes, Series 2*";

"**Form 40-F**" means Pembina's annual report on Form 40-F for the fiscal year ended December 31, 2025 filed with the SEC;

------

"**Fort Corp**" means, collectively, Fort Saskatchewan Ethylene Storage Corporation and Fort Saskatchewan Ethylene Storage Limited Partnership;

"**Fox Creek**" refers to the Peace Pipeline pump station and terminal located near Fox Creek, Alberta;

"**Fox Creek-to-Namao Expansion**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Pipelines Division – Assets*";

"**frac spread ratio**" has the meaning ascribed thereto under "*Risk Factors – Risks Inherent in Pembina's Business – Commodity Price and Volume Risk*";

"**GAAP**" means Canadian generally accepted accounting principles, which are within the framework of IFRS;

"**GGPPA**" has the meaning ascribed thereto under "*Other Information Relating to Pembina's Business – Industry Regulation – ECCC*";

"**GHG**" means greenhouse gas;

"**Gordondale**" refers to the Peace Pipeline pump station and terminal located near Gordondale, Alberta;

"**Government of Canada Yield**" has the meaning ascribed thereto under "*Description of the Capital Structure of Pembina – Medium Term Notes*";

"**Government Officials**" (foreign or domestic) include: government ministers and their staff; members of legislative bodies or other elected officials; judges and ambassadors; officials or employees of government departments and agencies, regardless of rank or position; any employee of any branch of government at any level: federal, state, or local; customs, immigration, tax, and police personnel; an officer or employee of any state-owned or state-controlled company, including Crown corporations and excluding foreign state-owned companies when they operate commercially in Canada or the United States of America; persons employed by a board, commission, or other body or authority that is established to perform a duty or function on behalf of a foreign state; Indigenous government officials; political parties, party officials, and candidates for political office; and employees of public international organizations, such as the United Nations or World Bank;

"**Grand Valley**" means Pembina's 75 percent interest in the Grand Valley Limited Partnership wind farm;

"**Greenlight Project**" has the meaning ascribed thereto under "*General Developments of Pembina – Developments in 2025*";

"**Horizon Pipeline**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Pipelines Division – Assets*";

"**Horizon Project**" means the Horizon Oil Sands Project located approximately 70 km north of Fort McMurray, Alberta;

"**HSE**" has the meaning ascribed thereto under "*Other Information Relating to Pembina's Business – Corporate Governance – Corporate Governance Policies*";

"**HVP**" means high vapour pressure;

"**Hybrid Note Indenture**" means the indenture dated January 25, 2021, between Pembina and Computershare Trust Company of Canada;

"**Hythe Gas Plant**" means PGI's sweet and sour gas processing facility located near Grande Prairie, Alberta;

"**IAA**" has the meaning ascribed thereto under "*Other Information Relating to Pembina's Business – Industry Regulation – CER*";

"**IAAC**" has the meaning ascribed thereto under "*Risk Factors – Risks Inherent in Pembina's Business – Regulation and Legislation*";

"**ICA**" means the *Interstate Commerce Act of 1887* (United States);

------

"**IFRS**" means the International Financial Reporting Standards, as issued by the International Accounting Standards Board;

"**K3 Cogeneration Facility**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**K3 Plant**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**KA Plant**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**Kakwa**" refers to the Peace Pipeline pump station and terminal located west of the Kakwa River Deep Cut Plant;

"**Kakwa 1-35 Gas Plant**" means PGI's 100 percent interest in the shallow cut sweet gas processing facility located near Grande Prairie, Alberta;

"**Kakwa River Deep Cut Plant**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**Kaybob Complex**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**Keyera**" means Keyera Corporation;

"**Kinder Morgan Canada Acquisition**" means Pembina's acquisition of KML, which closed on December 16, 2019;

"**KKR**" means KKR & Co, Inc.;

"**KML**" means PKM Canada Limited, formerly Kinder Morgan Canada Limited;

"**KML Series 1 Preferred Shares**" means the cumulative redeemable minimum rate reset preferred shares, series 1 in the capital of KML;

"**KML Series 2 Preferred Shares**" means the cumulative redeemable floating rate preferred shares, series 2 in the capital of KML, which were issuable on conversion of the KML Series 1 Preferred Shares;

"**KML Series 3 Preferred Shares**" means the cumulative redeemable minimum rate reset preferred shares, series 3 in the capital of KML;

"**KML Series 4 Preferred Shares**" means the cumulative redeemable floating rate preferred shares, series 4 in the capital of KML, which were issuable on conversion of the KML Series 3 Preferred Shares;

"**LGS**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Pipelines Division – Assets*";

"**LLR**" means Licensee Liability Rating;

"**LMR**" means Liability Management Rating;

"**LNG**" means liquefied natural gas;

"**LPG**" means liquefied petroleum gas;

"**MD&A**" means the management's discussion and analysis of the financial and operating results of Pembina dated February 26, 2026, for the year ended December 31, 2025, an electronic copy of which is available on Pembina's profile on the SEDAR+ website at www.sedarplus.ca, in Pembina's annual report on Form 40-F filed on the EDGAR website at www.sec.gov, or at www.pembina.com;

------

"**Medium Term Notes**" means, collectively, the Medium Term Notes, Series 3, the Medium Term Notes, Series 4,the Medium Term Notes, Series 5, the Medium Term Notes, Series 6, the Medium Term Notes, Series 7, the Medium Term Notes, Series 9, the Medium Term Notes, Series 10, the Medium Term Notes, Series 11, the Medium Term Notes, Series 12, the Medium Term Notes, Series 13, the Medium Term Notes, Series 15, the Medium Term Notes, Series 16, the Medium Term Notes, Series 17, the Medium Term Notes, Series 18, the Medium Term Notes, Series 20, the Medium Term Notes, Series 21, the Medium Term Notes, Series 22 and the Medium Term Notes, Series 23;

"**Medium Term Notes, Series 3**" means, collectively, the $200 million, $150 million and $100 million aggregate principal amount of medium term notes of Pembina issued on April 30, 2013, February 2, 2015 and June 16, 2015, respectively. See "*Description of the Capital Structure of Pembina – Medium Term Notes*";

"**Medium Term Notes, Series 4**" means the $600 million aggregate principal amount of medium term notes of Pembina issued on April 4, 2014. See "*Description of the Capital Structure of Pembina – Medium Term Notes*";

"**Medium Term Notes, Series 5**" means, collectively, the $450 million and $100 million aggregate principal amount of medium term notes of Pembina issued on February 2, 2015 and June 22, 2023, respectively, which matured on February 3, 2025. See "*Description of the Capital Structure of Pembina – Medium Term Notes*";

"**Medium Term Notes, Series 6**" means, collectively, the $500 million and $100 million aggregate principal amount of medium term notes of Pembina issued on June 16, 2015 and June 22, 2023, respectively. See "*Description of the Capital Structure of Pembina – Medium Term Notes*";

"**Medium Term Notes, Series 7**" means, collectively, the $500 million and $100 million aggregate principal amount of medium term notes of Pembina issued on August 11, 2016 and May 28, 2020, respectively. See "*Description of the Capital Structure of Pembina – Medium Term Notes*";

"**Medium Term Notes, Series 9**" means, collectively, the $300 million and $250 million aggregate principal amount of medium term notes of Pembina issued on January 20, 2017 and August 16, 2017, respectively. See "*Description of the Capital Structure of Pembina – Medium Term Notes*";

"**Medium Term Notes, Series 10**" means, collectively, the $400 million and $250 million aggregate principal amount of medium term notes of Pembina issued on March 26, 2018 and January 10, 2020, respectively. See "*Description of the Capital Structure of Pembina – Medium Term Notes*";

"**Medium Term Notes, Series 11**" means, collectively, the $300 million and $500 million aggregate principal amount of medium term notes of Pembina issued on March 26, 2018 and January 10, 2020, respectively. See "*Description of the Capital Structure of Pembina – Medium Term Notes*";

"**Medium Term Notes, Series 12**" means, collectively, the $400 million and $250 million aggregate principal amount of medium term notes of Pembina issued on April 3, 2019 and January 10, 2020, respectively. See "*Description of the Capital Structure of Pembina – Medium Term Notes*";

"**Medium Term Notes, Series 13**" means, collectively, the $400 million and $300 million aggregate principal amount of medium term notes of Pembina issued on April 3, 2019 and September 12, 2019, respectively. See "*Description of the Capital Structure of Pembina – Medium Term Notes*";

"**Medium Term Notes, Series 15**" means the $600 million aggregate principal amount of medium term notes of Pembina issued on September 12, 2019. See "*Description of the Capital Structure of Pembina – Medium Term Notes*";

"**Medium Term Notes, Series 16**" means the $400 million aggregate principal amount of medium term notes of Pembina issued on May 28, 2020. See "*Description of the Capital Structure of Pembina – Medium Term Notes*";

"**Medium Term Notes, Series 17**" means the $500 million aggregate principal amount of medium term notes of Pembina issued on December 10, 2021. See "*Description of the Capital Structure of Pembina – Medium Term Notes*";

"**Medium Term Notes, Series 18**" means the $500 million aggregate principal amount of medium term notes of Pembina issued on December 10, 2021. See "*Description of the Capital Structure of Pembina – Medium Term Notes*";

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"**Medium Term Notes, Series 19**" means the $300 million aggregate principal amount of medium term notes of Pembina issued on June 22, 2023, of which $150 million aggregate principal amount was redeemed on each of July 6, 2024 and November 17, 2024, respectively. See "*General Developments of Pembina – Developments in 2024*";

"**Medium Term Notes, Series 20**" means, collectively, the $600 million and $150 million aggregate principal amount of medium term notes of Pembina issued on January 12, 2024 and June 28, 2024, respectively. See "*Description of the Capital Structure of Pembina – Medium Term Notes*";

"**Medium Term Notes, Series 21**" means the $600 million aggregate principal amount of medium term notes of Pembina issued on January 12, 2024. See "*Description of the Capital Structure of Pembina – Medium Term Notes*";

"**Medium Term Notes, Series 22**" means, collectively, the $600 million and $150 million aggregate principal amount of medium term notes of Pembina issued on January 12, 2024 and June 28, 2024, respectively. See "*Description of the Capital Structure of Pembina – Medium Term Notes*";

"**Medium Term Notes, Series 23**" means the $650 million aggregate principal amount of medium term notes of Pembina issued on June 28, 2024. See "*Description of the Capital Structure of Pembina – Medium Term Notes*";

"**Musreau I**" means the Musreau A, Musreau C and Musreau D trains, shallow cut sweet gas processing facility, owned 100 percent by PGI, and PGI's 50 percent interest in the Musreau B train, located near Grande Prairie, Alberta;

"**Musreau II**" means PGI's 100 MMcf/d shallow cut sweet gas processing plant and associated NGL and gas gathering pipelines near Musreau I;

"**Musreau III**" means PGI's 100 MMcf/d shallow cut sweet gas processing facility near Musreau I and II;

"**Musreau Deep Cut**" means the 205 MMcf/d NGL extraction facility and related approximately 10 km NGL sales pipeline connected to the Peace Pipeline and located at the Musreau I facility;

"**Namao**" refers to the Peace Pipeline interconnect junction located near Namao, Alberta;

"**NCIB**" means normal course issuer bid;

"**NEBC MPS Expansion**" means the infrastructure expansion to the NEBC Pipelines in northeastern British Columbia for the transportation and fractionation of liquids, which included terminal upgrades, additional operational storage, and a new mid-point pump station to support incremental capacity on the NEBC Pipelines;

"**NEBC Pipelines**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Pipelines Division – Assets*";

"**NGA**" means the *Natural Gas Act of 1938* (United States);

"**NGL**" means natural gas liquids, including ethane, propane, butane and condensate;

"**NI 44-102**" means National Instrument 44-102 – *Shelf Distributions;* 

"**Nipisi Pipeline**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Pipelines Division – Assets*";

"**North 40 Terminal**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Pipelines Division – Assets*";

"**Northern Pipeline**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Pipelines Division – Assets*";

"**Northwest Pipeline**" means the pipeline system and related facilities delivering crude oil from northeastern British Columbia to Boundary Lake, Alberta;

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"**Note Exchange**" has the meaning ascribed thereto under "*Description of the Capital Structure of Pembina – Subordinated Notes – Subordinated Notes, Series 1"*;

"**NRGreen**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Pipelines Division – Assets*";

"**NYSE**" means the New York Stock Exchange;

"**OEMS**" has the meaning ascribed thereto under "*Other Information Relating to Pembina's Business – Operational Excellence Management System*";

"**OPEC**" means the Organization of the Petroleum Exporting Countries;

"**Option Plan**" means the stock option plan of Pembina approved by the Shareholders on May 26, 2011, as amended effective November 30, 2016, February 26, 2020, August 4, 2022 and August 3, 2023;

"**Ovintiv**" means Ovintiv Inc.;

"**Palermo Conditioning Plant**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**Patterson Creek**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**Peace Pipeline**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Pipelines Division – Assets*";

"**PETRONAS**" means PETRONAS LNG Limited;

"**PGI**" means Pembina Gas Infrastructure Inc.;

"**Phase VIII Expansion**" means the Phase VIII expansion to the Peace Pipeline, which included 10-inch and 16-inch pipelines in the Gordondale to La Glace corridor, as well as six new pump stations or terminal upgrades located between Gordondale and Fox Creek;

"**PHMSA**" means the U.S. Pipeline and Hazardous Materials Safety Administration;

"**Plan**" has the meaning ascribed thereto under "*Description of the Capital Structure of Pembina – Common Shares*";

"**PMM**" has the meaning ascribed thereto under "*Other Information Relating to Pembina's Business – Operational Excellence Management System – Operations and Maintenance Program*";

"**Pouce Coupé Pipeline**" means the pipeline system and related facilities delivering sweet crude oil and HVP hydrocarbon products from Dawson Creek, British Columbia to Pouce Coupé, Alberta;

"**Prairie Rose Pipeline**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**Prince Rupert Terminal**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**PRT Optimization**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**rate base**" means the amount of investment on which a return is authorized to be earned, which typically includes net plant in service plus an allowance for working capital;

"**Redemption Amount**" has the meaning ascribed thereto under "*Description of the Capital Structure of Pembina – Class B Preferred Shares*";

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"**Redwater Complex**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**Resthaven Facility**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**Revolving Credit Facility**" has the meaning ascribed thereto under "*Description of the Capital Structure of Pembina – Credit Facilities*";

"**RFS I**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**RFS II**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**RFS III**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

**"RFS IV"** has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**rich gas**" means natural gas with relatively high NGL content including ethane, propane, butane and condensate;

"**Ruby Pipeline**" means the natural gas transmission system delivering natural gas production from the Rockies basin owned by the Ruby Subsidiary, which was previously owned equally by each of Pembina and Kinder Morgan, Inc.;

"**Ruby Settlement Agreement**" means the settlement agreement entered into on November 18, 2022 between Pembina and the Ruby Subsidiary in connection with the Ruby Subsidiary Bankruptcy;

"**Ruby Subsidiary**" means Ruby Pipeline, L.L.C., a wholly-owned subsidiary of Ruby Pipeline Holding Company, L.L.C.;

"**Ruby Subsidiary Bankruptcy**" means the voluntary petition for relief filed by the Ruby Subsidiary on March 31, 2022 under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware;

"**Ruby Subsidiary Plan**" means the Ruby Subsidiary's Chapter 11 plan of reorganization, which was approved by the United States Bankruptcy Court for the District of Delaware in January 2023;

"**S&P**" means S&P Global Ratings, a division of The McGraw-Hill Companies;

"**SACC**" has the meaning ascribed thereto under "*Risk Factors – Risks Inherent in Pembina's Business – Regulation and Legislation*";

"**Saturn I**" means PGI's deep cut NGL extraction facility located in the Berland area of Alberta with 220 MMcf/d of extraction capacity;

"**Saturn II**" means PGI's second deep cut NGL extraction facility in the Berland area, a twin of Saturn I;

"**Saturn Complex**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**Saturn Gas Plant**" means PGI's sweet gas processing facility located near Dawson Creek, British Columbia;

"**SEC**" means the United States Securities and Exchange Commission;

"**SEDAR+**" means the System for Electronic Document Analysis and Retrieval+;

"**Senior Note Indenture**" means the indenture dated March 29, 2011 between Pembina and Computershare Trust Company of Canada, as further supplemented by the second supplemental note indenture dated October 24, 2014, and as further

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supplemented by the third supplemental indenture dated April 4, 2018 providing for the issuance of the Medium Term Notes. Certain subsidiaries of Pembina are also party to the Senior Note Indenture as former guarantors thereunder;

"**Series 1 Class A Preferred Shares**" means the cumulative redeemable rate reset Class A Preferred Shares, series 1 of Pembina, issued July 26, 2013. See "*Description of the Capital Structure of Pembina – Class A Preferred Shares*";

"**Series 2 Class A Preferred Shares**" means the cumulative redeemable floating rate Class A Preferred Shares, series 2 of Pembina, issuable on conversion of the Series 1 Class A Preferred Shares. See "*Description of the Capital Structure of Pembina – Class A Preferred Shares*";

"**Series 3 Class A Preferred Shares**" means the cumulative redeemable rate reset Class A Preferred Shares, series 3 of Pembina, issued October 2, 2013. See "*Description of the Capital Structure of Pembina – Class A Preferred Shares*";

"**Series 4 Class A Preferred Shares**" means the cumulative redeemable floating rate Class A Preferred Shares, series 4 of Pembina, issuable on conversion of the Series 3 Class A Preferred Shares. See "*Description of the Capital Structure of Pembina – Class A Preferred Shares*";

"**Series 5 Class A Preferred Shares**" means the cumulative redeemable rate reset Class A Preferred Shares, series 5 of Pembina, issued January 16, 2014. See "*Description of the Capital Structure of Pembina – Class A Preferred Shares*";

"**Series 6 Class A Preferred Shares**" means the cumulative redeemable floating rate Class A Preferred Shares, series 6 of Pembina, issuable on conversion of the Series 5 Class A Preferred Shares. See "*Description of the Capital Structure of Pembina – Class A Preferred Shares*";

"**Series 7 Class A Preferred Shares**" means the cumulative redeemable rate reset Class A Preferred Shares, series 7 of Pembina, issued September 11, 2014. See "*Description of the Capital Structure of Pembina – Class A Preferred Shares*";

"**Series 8 Class A Preferred Shares**" means the cumulative redeemable floating rate Class A Preferred Shares, series 8 of Pembina, issuable on conversion of the Series 7 Class A Preferred Shares. See "*Description of the Capital Structure of Pembina – Class A Preferred Shares*";

"**Series 9 Class A Preferred Shares**" means the cumulative redeemable rate reset Class A Preferred Shares, series 9 of Pembina, issued April 10, 2015 and redeemed on December 1, 2025. See "*Description of the Capital Structure of Pembina – Class A Preferred Shares*";

"**Series 15 Class A Preferred Shares**" means the cumulative redeemable rate reset Class A Preferred Shares, series 15 of Pembina, issued in exchange for the Veresen Series A Preferred Shares on October 2, 2017. See "*Description of the Capital Structure of Pembina – Class A Preferred Shares*";

"**Series 16 Class A Preferred Shares**" means the cumulative redeemable floating rate Class A Preferred Shares, series 16 of Pembina, issuable on conversion of the Series 15 Class A Preferred Shares. See "*Description of the Capital Structure of Pembina – Class A Preferred Shares*";

"**Series 17 Class A Preferred Shares**" means the cumulative redeemable rate reset Class A Preferred Shares, series 17 of Pembina, issued in exchange for the Veresen Series C Preferred Shares on October 2, 2017. See "*Description of the Capital Structure of Pembina – Class A Preferred Shares*";

"**Series 18 Class A Preferred Shares**" means the cumulative redeemable floating rate Class A Preferred Shares, series 18 of Pembina, issuable on conversion of the Series 17 Class A Preferred Shares. See "*Description of the Capital Structure of Pembina – Class A Preferred Shares*";

"**Series 19 Class A Preferred Shares**" means the cumulative redeemable rate reset Class A Preferred Shares, series 19 of Pembina, issued in exchange for the Veresen Series E Preferred Shares on October 2, 2017, and redeemed on June 30, 2025. See "*Description of the Capital Structure of Pembina – Class A Preferred Shares*";

"**Series 20 Class A Preferred Shares**" means the cumulative redeemable floating rate Class A Preferred Shares, series 20 of Pembina, issuable on conversion of the Series 19 Class A Preferred Shares. See "*Description of the Capital Structure of Pembina – Class A Preferred Shares*";

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"**Series 21 Class A Preferred Shares**" means the cumulative redeemable minimum rate reset Class A Preferred Shares, series 21 of Pembina, issued December 7, 2017 and issuable on conversion of the Series 22 Class A Preferred Shares. See "*Description of the Capital Structure of Pembina – Class A Preferred Shares*";

"**Series 22 Class A Preferred Shares**" means the cumulative redeemable floating rate Class A Preferred Shares, series 22 of Pembina, issued March 1, 2023 and redeemed on January 8, 2025, and further issuable on conversion of the Series 21 Class A Preferred Shares. See "*Description of the Capital Structure of Pembina – Class A Preferred Shares*";

"**Series 23 Class A Preferred Shares**" means the cumulative redeemable minimum rate reset Class A Preferred Shares, series 23 of Pembina, issued in exchange for the KML Series 1 Preferred Shares on December 16, 2019 and redeemed on November 15, 2022. See "*Description of the Capital Structure of Pembina – Class A Preferred Shares*";

"**Series 24 Class A Preferred Shares**" means the cumulative redeemable floating rate Class A Preferred Shares, series 24 of Pembina, which were issuable on conversion of the Series 23 Class A Preferred Shares prior to their redemption on November 15, 2022. See "*Description of the Capital Structure of Pembina – Class A Preferred Shares*";

"**Series 25 Class A Preferred Shares**" means the cumulative redeemable minimum rate reset Class A Preferred Shares, series 25 of Pembina, issued in exchange for the KML Series 3 Preferred Shares on December 16, 2019. See "*Description of the Capital Structure of Pembina – Class A Preferred Shares*";

"**Series 26 Class A Preferred Shares**" means the cumulative redeemable floating rate Class A Preferred Shares, series 26 of Pembina, issuable on conversion of the Series 25 Class A Preferred Shares. See "*Description of the Capital Structure of Pembina – Class A Preferred Shares*";

"**Series 2021-A Class A Preferred Shares**" means the cumulative redeemable fixed-to-fixed rate Class A Preferred Shares, Series 2021-A issued on January 25, 2021 and redeemed on July 28, 2025. See "*Description of the Capital Structure of Pembina*";

"**shallow cut**" means sweet gas processing with propane and/or condensate-plus extraction capabilities;

"**Shareholders**" means the holders of Common Shares;

"**SMP**" has the meaning ascribed thereto under "*Other Information Relating to Pembina's Business – Operational Excellence Management System – Security Management Program*";

"**Steeprock Gas Plant**" means PGI's sour gas processing facility located near Grande Prairie, Alberta;

"**Sturgeon Refinery**" means the crude oil upgrader, built and operated by North West Redwater Partnership in Sturgeon County, Alberta;

"**Subordinated Note Indenture**" means the indenture dated June 6, 2025 between Pembina and Computershare Trust Company of Canada;

"**Subordinated Notes"** means, collectively, the Subordinated Notes, Series 2 and Subordinated Notes, Series 3;

"**Subordinated Notes, Series 1**" means the $600 million aggregate principal amount of 4.80 percent Fixed-to-Fixed Rate Subordinated Notes, Series 1 due January 25, 2081 of Pembina, issued on January 25, 2021, and exchanged for an equal principal amount of Subordinated Notes, Series 3 on July 25, 2025 pursuant to the Note Exchange. See "*Description of the Capital Structure of Pembina – Subordinated Notes"*;

"**Subordinated Notes, Series 2**" means, collectively, the $200 million and $225 million aggregate principal amount of 5.95 percent Fixed-to-Fixed Rate Subordinated Notes, Series 2 due June 6, 2055 of Pembina, issued on June 6, 2025 and October 8, 2025, respectively. See "*Description of the Capital Structure of Pembina – Subordinated Notes"*;

"**Subordinated Notes, Series 3**" means the $600 million aggregate principal amount of 4.80 percent Fixed-to-Fixed Rate Subordinated Notes, Series 3 due January 25, 2081 of Pembina, issued on July 25, 2025. See "*Description of the Capital Structure of Pembina – Subordinated Notes"*;

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"**Subscription Receipts**" has the meaning ascribed thereto under "*General Developments of Pembina – Developments in 2023*";

"**Sunrise Gas Plant**" means PGI's sweet gas processing facility located near Dawson Creek, British Columbia;

"**Syncrude Pipeline**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Pipelines Division – Assets*";

"**Syncrude Project**" means the joint venture that was formed for the recovery of oil sands, crude bitumen or products derived from the Athabasca oil sands, located near Fort McMurray, Alberta;

"**take-or-pay**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Pipelines Division – Customers and Commercial Structure*";

"**Taylor-to-Belloy Pipeline**" means the pipeline and related facilities delivering NGL from Taylor, British Columbia to Belloy, Alberta;

"**Taylor-to-Boundary Lake Pipeline**" means the pipeline and related facilities delivering HVP hydrocarbon products from Taylor, British Columbia to Boundary Lake, Alberta;

"**Taylor-to-Gordondale Expansion**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Pipelines Division – Assets*";

"**TC Energy**" means TC Energy Corporation;

"**throughput**" means volume of product delivered through a pipeline or terminal;

"**TIER**" has the meaning ascribed thereto under "*Other Information Relating to Pembina's Business – Operational Excellence Management System – Environment Management Program*";

"**TMQ**" has the meaning ascribed thereto under "*Other Information Relating to Pembina's Business – Operational Excellence Management System – Operations and Maintenance Program*";

"**Tower Gas Plant**" means PGI's sweet gas processing facility located near Dawson Creek, British Columbia;

"**TSX**" means the Toronto Stock Exchange;

"**UNDRIP**" has the meaning ascribed thereto under "*Risk Factors – General Risk Factors – Indigenous Land Claims and Consultation Obligations*";

"**U.S. EPA**" means the U.S. Environmental Protection Agency;

"**Vancouver Wharves**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**Vantage Pipeline**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Pipelines Division – Assets*";

"**Veren**" means Veren Inc.;

"**Veren Transaction**" has the meaning ascribed thereto under "*General Developments of Pembina – Developments in 2024*";

"**Veresen**" means Veresen Inc.;

"**Veresen Acquisition**" means the acquisition of Veresen, pursuant to which Pembina acquired all of the issued and outstanding common shares of Veresen and Veresen Preferred Shares, by way of a plan of arrangement under the ABCA, in accordance with the terms and conditions of an arrangement agreement dated May 1, 2017 between Pembina and Veresen;

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"**Veresen Preferred Shares**" means the Veresen Series A Preferred Shares, the Veresen Series B Preferred Shares, the Veresen Series C Preferred Shares, the Veresen Series D Preferred Shares, the Veresen Series E Preferred Shares and the Veresen Series F Preferred Shares;

"**Veresen Series A Preferred Shares**" means the cumulative redeemable preferred shares, series A of Veresen, issued February 14, 2012;

"**Veresen Series B Preferred Shares**" means the cumulative redeemable preferred shares, series B of Veresen, which were issuable on conversion of the Veresen Series A Preferred Shares;

"**Veresen Series C Preferred Shares**" means the cumulative redeemable preferred shares, series C of Veresen, issued October 21, 2013;

"**Veresen Series D Preferred Shares**" means the cumulative redeemable preferred shares, series D of Veresen, which were issuable on conversion of the Veresen Series C Preferred Shares;

"**Veresen Series E Preferred Shares**" means the cumulative redeemable preferred shares, series E of Veresen, issued April 1, 2015;

"**Veresen Series F Preferred Shares**" means the cumulative redeemable preferred shares, series F of Veresen, which were issuable on conversion of the Veresen Series E Preferred Shares;

"**Wapiti Expansion**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**Wapiti Plant**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*";

"**WCSB**" means the Western Canadian Sedimentary Basin;

"**Whitecap**" means Whitecap Resources Inc.;

"**Whitecap Transaction**" has the meaning ascribed thereto under "*General Developments of Pembina – Developments in 2024*"; and

"**Younger**" has the meaning ascribed thereto under "*Description of Pembina's Business and Operations – Facilities Division – Assets*".

All dollar amounts set forth in this Annual Information Form are in Canadian dollars unless otherwise indicated. References to "$" or "C$" are to Canadian dollars and references to "US$" are to U.S. dollars. On February 25, 2026, the daily exchange rate reported by the Bank of Canada was C$1.00 equals US$0.7307.

Except where otherwise indicated, all information in this Annual Information Form is presented as at the end of Pembina's most recently completed financial year, being December 31, 2025.

A reference made in this Annual Information Form to other documents or to information or documents available on a website does not constitute the incorporation by reference into this Annual Information Form of such other documents or such other information or documents available on such website, unless otherwise stated.

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**ABBREVIATIONS AND CONVERSIONS**

In this Annual Information Form, the following abbreviations have the indicated meanings:

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| | |
|:---|:---|
| mbbls | thousands of barrels, each barrel representing 34.972 Imperial gallons or 42 U.S. gallons |
| mmbbls | millions of barrels |
| bpd | barrels per day |
| mcf | thousand cubic feet |
| mbpd | thousands of barrels per day |
| mmbpd | millions of barrels per day |
| MMcf/d | million cubic feet per day |
| mboe/d | thousands of barrels of oil equivalent per day |
| mmboe/d | millions of barrels of oil equivalent per day |
| bcf/d | billion cubic feet per day |
| km | kilometres |
| CO2 | carbon dioxide |
| CO2<sup>e</sup> | carbon dioxide equivalent |
| MW | megawatt |
| mtpa | million tonnes per annum |

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Barrels of oil equivalent ("**boe**") may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf of natural gas: 1 bbl of crude oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

The following table sets forth certain standard conversions between Standard Imperial Units and the International System of Units (or metric units).

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| | | |
|:---|:---|:---|
| **<u>To convert from</u>** | **<u>To</u>** | **<u>Multiply by</u>** |
| bbls | cubic metres | 0.159 |
| cubic metres | bbls | 6.293 |
| miles | kilometres | 1.609 |
| kilometres | miles | 0.621 |

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**NON–GAAP FINANCIAL MEASURES**

Throughout this Annual Information Form, Pembina has disclosed certain financial measures and ratios that are not specified, defined or determined in accordance with GAAP and which are not disclosed in the Financial Statements. Non-GAAP financial measures either exclude an amount that is included in, or include an amount that is excluded from, the composition of the most directly comparable financial measure specified, defined and determined in accordance with GAAP. These non-GAAP financial measures and non-GAAP ratios, together with financial measures and ratios specified, defined and determined in accordance with GAAP, are used by management to evaluate the performance and cash flows of Pembina and its businesses and to provide additional useful information respecting Pembina's financial performance and cash flows to investors and analysts.

In this Annual Information Form, Pembina has disclosed the following non-GAAP financial measures and non-GAAP ratios: net revenue, adjusted earnings before interest, taxes, depreciation and amortization ("**adjusted EBITDA**"), and adjusted EBITDA per common share.

Non-GAAP financial measures and non-GAAP ratios disclosed in this Annual Information Form do not have any standardized meaning under IFRS and may not be comparable to similar financial measures disclosed by other issuers. The financial measures and ratios should not, therefore, be considered in isolation or as a substitute for, or superior to, measures and ratios of Pembina's financial performance, or cash flows specified, defined or determined in accordance with IFRS, including revenue, earnings, and earnings per common share.

Except as otherwise described herein, these non-GAAP financial measures and non-GAAP ratios are calculated on a consistent basis from period to period. Specific reconciling items may only be relevant in certain periods.

Additional information relating to each non-GAAP financial measure and non-GAAP ratio disclosed in this Annual Information Form, including: (i) an explanation of the composition of each non-GAAP financial measure and non-GAAP ratio; (ii) an explanation of how each non-GAAP financial measure and non-GAAP ratio provides useful information to investors and the additional purposes, if any, for which management uses each non-GAAP financial measure and non-GAAP ratio; (iii) a quantitative reconciliation of each non-GAAP financial measure to the most directly comparable financial measure that is specified, defined and determined in accordance with GAAP; and (iv) an explanation of the reason for any change in the label or composition of each non-GAAP financial measure and non-GAAP ratio from what was previously disclosed, is contained in the "*Non-GAAP & Other Financial Measures*" section of the MD&A, which section is incorporated by reference in this Annual Information Form. The MD&A is available on SEDAR+ at www.sedarplus.ca, EDGAR at www.sec.gov and Pembina's website at www.pembina.com.

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**FORWARD-LOOKING STATEMENTS AND INFORMATION**

Certain statements contained in this Annual Information Form constitute "forward-looking statements" within the meaning of the *United States Private Securities Litigation Reform Act of 1995* and "forward-looking information" within the meaning of applicable Canadian securities legislation (collectively, "**forward-looking statements**"). All forward-looking statements are based on Pembina's current expectations, estimates, projections, beliefs, judgments and assumptions based on information available at the time the applicable forward-looking statement was made and in light of Pembina's experience and its perception of historical trends. Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "could", "would", "believe", "plan", "intend", "design", "target", "undertake", "view", "indicate", "maintain", "explore", "entail", "schedule", "objective", "strategy", "likely", "potential", "outlook", "aim", "propose", "goal", and similar expressions suggesting future events or future performance.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Pembina believes the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this Annual Information Form should not be unduly relied upon. The forward-looking statements included herein speak only as of the date of the Annual Information Form.

In particular, this Annual Information Form contains forward-looking statements pertaining to, among other things, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the future levels and sustainability of cash dividends that Pembina intends to pay to its Shareholders, including expected dividend payment dates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• planning, construction, capital expenditure and funding estimates, schedules, regulatory and environmental applications and anticipated approvals, expected capacity, incremental volumes, in-service dates, rights, activities, benefits and operations with respect to new construction of, or expansions on existing pipelines, gas services facilities, fractionation facilities, terminalling, storage and hub facilities and other facilities or energy infrastructure, as well as the impact of Pembina's new projects on its future financial performance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• pipeline, processing, fractionation and storage facility and system operations and throughput levels;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• treatment under existing and proposed governmental policies and regulations, including those relating to taxes, the environment, tariffs, project assessment requirements and GHG regulations and related abandonment and reclamation obligations, and Indigenous, landowner and other stakeholder consultation requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pembina's estimates of and strategy for payment of future abandonment costs and decommissioning obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Pembina's strategy and the development and expected timing of new business initiatives, growth opportunities and the impact thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increased throughput potential, processing capacity and fractionation capacity due to increased oil and gas industry activity and new connections and other initiatives on Pembina's pipelines and at Pembina's facilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• expected future cash flows and the sufficiency thereof, financial strength, sources of and access to funds at acceptable rates, future contractual obligations, future financing options, future renewal of its credit facilities, availability of capital to fund growth plans, investments operating obligations and dividends and the use of proceeds from financings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• future demand for Pembina's infrastructure and services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• statement regarding Pembina's investment relating to managing its environmental liability and the benefits thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• tolls and tariffs, and processing, transportation, fractionation, storage and services commitments and contracts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• operating risks (including the amount of future liabilities related to pipeline spills and other environmental incidents) and related insurance coverage and inspection and integrity programs;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• inventory and pricing of commodities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the future success, growth, expansions, contributions, capacity expectations, results of operations, financial strength of certain of Pembina's equity accounted investees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the development, in-service dates and anticipated benefits of Pembina's new projects and developments, including the Taylor-to-Gordondale Expansion, the Birch-to-Taylor Expansion, the Fox Creek-to-Namao Expansion, RFS IV, the K3 Cogeneration Facility, the Wapiti Expansion, the Cedar LNG Project, the Alberta Carbon Grid, the PRT Optimization and the Greenlight Project, as well as the timing thereof and certain costs related thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• expectations in respect of PGI's infrastructure development commitments, including the amounts and timing thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**•** compliance by the Company with integrity regulatory compliance requirements, including the effectiveness of related programs and systems;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the effectiveness and impact of Pembina's OEMS and other operations and governance policies and ESG-related practices and targets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of the current commodity price environment on Pembina; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• competitive conditions and Pembina's ability to position itself competitively in the industry.

Various factors or assumptions are typically applied by Pembina in drawing conclusions or making the forecasts, projections, predictions or estimations set out in forward-looking statements based on information currently available to Pembina. These factors and assumptions include, but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• oil and gas industry exploration and development activity levels and the geographic region of such activity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the success of Pembina's operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• prevailing commodity prices, interest rates, carbon prices, tax rates, exchange rates and inflation rates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ability of Pembina to maintain current credit ratings;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• future operating costs, including geotechnical and integrity costs, being consistent with historical costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• oil and gas industry compensation levels remaining consistent with historical levels;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in respect of current developments, expansions, planned capital expenditures, completion dates and capacity expectations: that third parties will provide any necessary support; that any third-party projects relating to Pembina's growth projects will be sanctioned and completed as expected; that any required commercial agreements can be reached; that all required regulatory and environmental approvals can be obtained on acceptable terms in a timely manner; that counterparties will comply with contracts in a timely manner; that there are no supply chain disruptions impacting Pembina's ability to obtain required equipment, materials or labour; that there are no unforeseen events preventing the performance of contracts or the completion of the relevant facilities; and that there are no unforeseen material costs relating to the facilities which are not recoverable from customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in respect of the stability of Pembina's dividends: prevailing commodity prices, margins and exchange rates; that Pembina's future results of operations will be consistent with past performance and management expectations in relation thereto; the continued availability of capital at attractive prices to fund future capital requirements relating to existing assets and projects, including, but not limited to, future capital expenditures relating to expansion, upgrades and maintenance shutdowns; the success of growth projects; future operating costs; that counterparties to agreements will continue to perform their obligations in a timely manner; that there are no unforeseen events preventing the performance of contracts; and that there are no unforeseen material construction or other costs

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related to current growth projects, current operations or the repayment or refinancing of existing debt as it becomes due;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• prevailing regulatory, tax and environmental laws and regulations and tax pool utilization; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the amount of future liabilities relating to lawsuits and environmental incidents and the availability of coverage under Pembina's insurance policies (including in respect of Pembina's business interruption insurance policy).

The actual results of Pembina could differ materially from those anticipated in the forward-looking statements included in this Annual Information Form as a result of the material risk factors set forth below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the regulatory environment and decisions, including the outcome of regulatory hearings, and Indigenous and landowner consultation requirements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of competitive entities and pricing;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• labour and material shortages;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reliance on key relationships and agreements and the outcome of stakeholder engagement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the strength and operations of the oil and natural gas production industry and related commodity prices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• non-performance or default by counterparties to agreements which Pembina or one or more of its subsidiaries has entered into in respect of its business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• actions by joint venture partners or other partners which hold interests in certain of Pembina's assets;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• fluctuations in operating results;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• constraints on, or the unavailability of, adequate infrastructure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the political environment and public opinion in North America and elsewhere, including changes in trade relations between Canada and the U.S.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• geopolitical events, political uncertainty and the impacts thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ability to access various sources of debt and equity capital;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in credit ratings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• counterparty credit risk;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• technology and security risks including cybersecurity risks and risks relating to Pembina's use of artificial intelligence;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• natural catastrophes; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• other risk factors as set out in this Annual Information Form under "*Risk Factors*".

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These factors should not be construed as exhaustive. Unless required by law, Pembina does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Any forward-looking statements contained herein are expressly qualified by this cautionary statement.

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**CORPORATE STRUCTURE**

**Name, Address and Formation**

Pembina Pipeline Corporation is a corporation amalgamated under the ABCA. It is the successor to Pembina Pipeline Income Fund (the "**Fund**") following the completion of the reorganization of the Fund from an income trust structure to a corporate structure by way of plan of arrangement involving the Fund, Pembina and the holders of the Fund's trust units, pursuant to which the trust was reorganized into Pembina on October 1, 2010. Pembina is also the successor to Veresen following the completion of the Veresen Acquisition on October 2, 2017, whereby, among other things, Pembina amalgamated with Veresen and the resulting entity continued as "Pembina Pipeline Corporation". Pembina's principal and registered office is located at Suite 4000, 585 - 8th Avenue S.W., Calgary, Alberta, T2P 1G1.

**Pembina's Subsidiaries**

The following chart indicates Pembina's material subsidiaries, including their jurisdictions of incorporation, formation or organization and the percentage of voting securities owned, or controlled or directed, directly or indirectly, by Pembina or its subsidiaries.

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| | | |
|:---|:---|:---|
| **Principal Subsidiaries**<sup>(1)</sup> | **Jurisdiction of Incorporation/Formation/ Organization** | **Ownership** |
| Alliance Pipeline Limited Partnership | Alberta | 100% |
| Pembina Empress NGL Partnership | Alberta | 100% |
| Pembina Holding Canada LP | Alberta | 100% |
| Pembina Infrastructure and Logistics LP | Alberta | 100% |
| Pembina Midstream Limited Partnership | Alberta | 100% |
| Pembina Oil Sands Pipeline L.P. | Alberta | 100% |
| Pembina Pipeline | Alberta | 100% |
| Alliance Pipeline L.P. | Delaware U.S. | 100% |
| Pembina Cochin LLC | Delaware U.S. | 100% |
| Aux Sable Liquid Products LP | Delaware U.S. | 100% |

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<sup>(1) &nbsp;&nbsp;&nbsp;&nbsp;</sup>Subsidiaries are omitted where, at Pembina's most recent financial year-end: (i) the total assets of the subsidiary do not exceed 10 percent of Pembina's consolidated assets; (ii) the revenue of the subsidiary does not exceed 10 percent of Pembina's consolidated revenue; and (iii) the conditions in (i) and (ii) would be satisfied if the omitted subsidiaries were aggregated, and the reference in (i) and (ii) changed from 10 percent to 20 percent.

**Amended Articles**

On May 13, 2013, Pembina filed articles of amendment under the ABCA to create a new class of shares, the Class A Preferred Shares, to change the designation and terms of the Class B Preferred Shares, and to increase the maximum number of directors of Pembina from eleven to thirteen, after receiving Shareholder approval for such amendments.

On October 2, 2017, Pembina filed articles of amendment under the ABCA to create the Series 15, Series 16, Series 17, Series 18, Series 19 and Series 20 Class A Preferred Shares.

On October 2, 2017, Pembina filed articles of amalgamation under the ABCA to effect the amalgamation of Pembina and Veresen pursuant to the Veresen Acquisition. Pursuant to the Veresen Acquisition, all of the outstanding Veresen Series A, C and E Preferred Shares were exchanged for Series 15, 17 and 19 Class A Preferred Shares, respectively. The Series 15, 17 and 19 Class A Preferred Shares have substantially the same terms and conditions as the previously outstanding Veresen Series A, C and E Preferred Shares. The Series 16, 18 and 20 Class A Preferred Shares have substantially the same terms and conditions as the Veresen Series B, D and F Preferred Shares. The issued and outstanding Series 19 Class A Preferred Shares were redeemed by Pembina on June 30, 2025.

On December 1, 2017, Pembina filed articles of amendment under the ABCA to create the Series 21 and Series 22 Class A Preferred Shares. The issued and outstanding Series 22 Class A Preferred Shares were redeemed by Pembina on January 8, 2025.

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On June 25, 2019, Pembina filed articles of amendment under the ABCA to increase the limit on the number of Class A Preferred Shares Pembina is authorized to issue from 20 percent of the number of Common Shares issued and outstanding at the time of issuance to a maximum of 254,850,850 Class A Preferred Shares, after receiving approval from the Shareholders and the holders of the Class A Preferred Shares for such amendment.

On December 16, 2019, Pembina filed articles of amendment under the ABCA to create the Series 23, Series 24, Series 25 and Series 26 Class A Preferred Shares. Pursuant to the Kinder Morgan Canada Acquisition, all of the outstanding KML Series 1 and 3 Preferred Shares were exchanged for Series 23 and 25 Class A Preferred Shares, respectively. The Series 23 and 25 Class A Preferred Shares have substantially the same terms and conditions as the previously outstanding KML Series 1 and 3 Preferred Shares. The Series 24 and 26 Class A Preferred Shares have substantially the same terms and conditions as the KML Series 2 and 4 Preferred Shares. The issued and outstanding Series 23 Preferred Shares were redeemed and subsequently cancelled by Pembina on November 15, 2022.

On January 22, 2021, Pembina filed articles of amendment under the ABCA to create the Series 2021-A Class A Preferred Shares in connection with the issuance of the Subordinated Notes, Series 1. On January 25, 2021, prior to the issuance of such Series 2021-A Preferred Shares, Pembina filed articles of amendment amending and restating the terms of the Series 2021-A Class A Preferred Shares. The Series 2021-A Class A Preferred Shares were redeemed and subsequently cancelled by Pembina on July 28, 2025.

See "*Description of the Capital Structure of Pembina*".

**Amended By-laws**

On May 8, 2020, at the annual and special meeting of Shareholders (the "**2020 Meeting**"), Shareholders confirmed Pembina's amended and restated By-law No. 1 to, among other things: (i) permit only one officer or director, rather than two officers or directors, to execute certain documents on behalf of the Company, and (ii) provide that the Chair of the Board of Directors does not receive a second or casting vote when there is a voting deadlock at a meeting of the Board of Directors, bringing Pembina's by-laws in line with its peers and best corporate governance practices. At the 2020 Meeting, Shareholders also confirmed By-law No. 2, a by-law relating to the advance notice for the nomination of directors, which provides a framework for nominating directors for election to the Board of Directors.

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**GENERAL DEVELOPMENTS OF PEMBINA**

During the three-year period ending on December 31, 2025 and 2026 year-to-date, Pembina continued to execute its business plan and advance its growth strategy as discussed below.

**Developments in 2023**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Acquisitions and Divestitures.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Alliance/Aux Sable Acquisition.** On December 13, 2023, Pembina announced that it had entered into an agreement to acquire all of the interests of Enbridge in the Alliance Pipeline, Aux Sable and NRGreen joint ventures for an aggregate purchase price of approximately $3.1 billion, including approximately $327 million of assumed debt, representing Enbridge's proportionate share of the indebtedness of Alliance Canada and Alliance U.S. (the "**Alliance/Aux Sable Acquisition**"). The Alliance/Aux Sable Acquisition closed on April 1, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Projects.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Construction of RFS IV.** On February 23, 2023, Pembina sanctioned construction of RFS IV at the Redwater Complex, with an estimated in-service date in the first half of 2026, subject to environmental and regulatory approvals. See "*Description of Pembina's Business and Operations – Facilities Division – Assets*".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Cedar LNG Environmental Assessment Certificate.** On March 14, 2023, Cedar LNG received its Environmental Assessment Certificate from the BCEAO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **K3 Cogeneration Facility.** On December 11, 2023, Pembina announced that PGI had been developing the K3 Cogeneration Facility, with an estimated in-service date in the first half of 2026, subject to environmental and regulatory approvals. See "*Description of Pembina's Business and Operations – Facilities Division – Assets*".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Financing Activities.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Renewal of NCIB.** On March 7, 2023, Pembina announced that the TSX approved the renewal of Pembina's NCIB to purchase up to five percent of its outstanding Common Shares. The renewed NCIB commenced on March 10, 2023 and expired on March 9, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Common Share Dividend Increase.** On May 4, 2023, Pembina announced that its Board of Directors approved a 2.3 percent increase in its quarterly Common Share dividend rate from $0.6525 per Common Share to $0.6675 per Common Share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Medium Term Notes Offering.** On June 22, 2023, Pembina issued and sold $100 million aggregate principal amount through a re-opening of its Medium Term Notes, Series 5, $100 million aggregate principal amount through a re-opening of its Medium Term Notes, Series 6 and $300 million aggregate principal amount of Medium Term Notes, Series 19. See "*Description of the Capital Structure of Pembina – Medium Term Notes*".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Subscription Receipt Offering.** In connection with the Alliance/Aux Sable Acquisition, on December 13, 2023, Pembina announced a bought deal offering in Canada and the United States of 26,000,000 subscription receipts ("**Subscription Receipts**") at a price of $42.85 per Subscription Receipt for total gross proceeds of approximately $1.1 billion (the "**Subscription Receipt Offering**"). In connection with the Subscription Receipt Offering, Pembina granted to the underwriters an over-allotment option (the "**Over-Allotment Option**") to purchase up to an additional 3,900,000 Subscription Receipts on the same terms and conditions as the Subscription Receipt Offering. The Subscription Receipt Offering closed on December 19, 2023, pursuant to which Pembina issued and sold 29,900,000 Subscription Receipts (including 3,900,000 Subscription Receipts issued pursuant to the Over-Allotment Option) at a price of $42.85 per Subscription Receipt for total gross proceeds of approximately $1.28 billion.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Asset Updates, Commercial Agreements and Governance.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Henry Sykes appointed Chair of the Board of Directors.** On January 1, 2023, Henry Sykes was appointed as Chair of the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Approval of Ruby Subsidiary Plan and Ruby Settlement Agreement.** On January 13, 2023, the United States Bankruptcy Court of the District of Delaware approved the Ruby Subsidiary Plan and the Ruby Settlement Agreement. Pursuant to the Ruby Subsidiary Plan, the sale of the Ruby Subsidiary's reorganized equity was completed, and Pembina ceased to have any ownership interest in the Ruby Pipeline.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Extension of Ethane Supply Contract.** On February 23, 2023, Pembina announced that it extended its contract to supply ethane on a long-term basis to a key customer. See "*Description of Pembina's Business and Operations – Pipelines Division – Assets*".

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**Developments in 2024**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Acquisitions and Divestitures.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Whitecap Transaction.** On July 2, 2024, Pembina announced that PGI had entered into a purchase and sale agreement with Whitecap to acquire a 50 percent working interest in Whitecap's Kaybob Complex, as well as an agreement to support the future infrastructure development for Whitecap's Lator growth area, for gross proceeds of $420 million ($252 million, net to Pembina) (the "**Whitecap Transaction**"). The Whitecap Transaction closed on December 31, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Aux Sable U.S. Acquisition.** On August 8, 2024, Pembina announced that it had acquired the remaining 14.6 percent interest in Aux Sable's U.S. operations from certain subsidiaries of The Williams Companies, Inc. and acquired fully consolidated ownership of all Aux Sable assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Veren Transaction.** On September 9, 2024, Pembina announced that PGI had entered into agreements with Veren and certain of its affiliates that include the $400 million ($240 million, net to Pembina) acquisition by PGI of Veren's Gold Creek and Karr area oil batteries and support for future infrastructure development (the "**Veren Transaction**"). The Veren Transaction closed on October 9, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Projects.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Approval of Wapiti Expansion.** On February 22, 2024, Pembina announced that PGI had approved the Wapiti Expansion, with an estimated in-service date in the first half of 2026, subject to regulatory and environmental approval. See "*Description of Pembina's Business and Operations – Facilities Division – Assets*".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Cedar FID.** On June 25, 2024, Pembina announced a positive FID on the proposed floating LNG facility in Kitimat, British Columbia, within the traditional territory of the Haisla Nation (the "**Cedar LNG Project**"). See "*Description of Pembina's Business and Operations – Marketing & New Ventures Division – New Venture*s".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Financing Activities.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Medium Term Notes Offerings and Redemptions.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ On January 12, 2024, Pembina issued and sold $600 million aggregate principal amount of Medium Term Notes, Series 20, $600 million aggregate principal amount of Medium Term Notes, Series 21 and $600 million aggregate principal amount of Medium Term Notes, Series 22. See "*Description of the Capital Structure of Pembina – Medium Term Notes*".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ On June 28, 2024, Pembina issued and sold $650 million aggregate principal amount of Medium Term Notes, Series 23, $150 million aggregate principal amount of Medium Term Notes, Series 20 and $150 million aggregate principal amount of Medium Term Notes, Series 22. See "*Description of the Capital Structure of Pembina – Medium Term Notes*".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ On July 6, 2024, Pembina redeemed $150 million aggregate principal amount of Medium Term Notes, Series 19 for a redemption price of approximately $1,002.19 for each $1,000 principal amount of Medium Term Notes, Series 19.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ On November 17, 2024, Pembina redeemed $150 million aggregate principal amount of Medium Term Notes, Series 19 for a redemption price of approximately $1,023.19 for each $1,000 principal amount of Medium Term Notes, Series 19.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Subscription Receipt Conversion.** In connection with closing of the Alliance/Aux Sable Acquisition, each holder of Subscription Receipts received, automatically and without additional consideration or further action on the part of the holder, one Common Share for each Subscription Receipt. On March 28, 2024, Pembina made a cash payment per Subscription Receipt, to holders of Subscription Receipts of record as of March 15, 2024, of $0.6675 (a "**Dividend Equivalent Payment**"), such amount being equal to the dividend per Common Share paid on such date to holders of Common Shares. No further Dividend Equivalent Payment will be paid or is payable to holders

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of Subscription Receipts in connection with closing of the Alliance/Aux Sable Acquisition. The Subscription Receipts were delisted from the TSX effective as of the close of trading on April 1, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Common Share Dividend Increase.** On May 9, 2024, Pembina announced that its Board of Directors approved a 3.4 percent increase in its quarterly Common Share dividend rate from $0.6675 per Common Share to $0.69 per Common Share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Renewal of NCIB.** On May 13, 2024, Pembina announced that the TSX approved the renewal of Pembina's NCIB to purchase up to five percent of its outstanding Common Shares. The renewed NCIB commenced on May 16, 2024 and expired on May 15, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Asset Updates, Commercial Agreements and Governance.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Ethane Supply Agreements.** On February 22, 2024, Pembina announced that it had entered into long-term agreements with Dow Chemical Canada to supply up to 50,000 bpd of ethane and for the associated transportation on the AEGS, for the Path2Zero Project, a new integrated ethylene cracker and derivatives facility in Fort Saskatchewan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **New Assets in Service.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ On May 30, 2024, the Phase VIII Expansion was placed into service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ On November 29, 2024, the NEBC MPS Expansion was placed into service.

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**Developments in 2025**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**• Projects.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Lator Infrastructure Funding.** As part of the Whitecap Transaction, PGI agreed to support future infrastructure development for Whitecap's Lator area development (the "**Lator Infrastructure**"), including a new battery and gathering laterals, which PGI will own and is supported by long-term take-or-pay agreements with an area-of-dedication for all volumes produced by Whitecap from the area. On January 2, 2025, Pembina announced that PGI anticipates funding up to $400 million ($240 million net to Pembina) for the battery and gathering laterals within the first phase of the Lator Infrastructure, with all gas volumes flowing to PGI's Musreau Deep Cut upon startup in late 2026 or early 2027, supporting long-term plant utilization. All funding of the Lator Infrastructure is backstopped by long-term take-or-pay agreements based on the capital spent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Gold Creek and Karr Infrastructure Funding.** As part of the Veren Transaction, PGI committed to fund capital up to $300 million ($180 million net to Pembina) for future battery and gathering infrastructure in the Gold Creek and Karr areas, with approximately $100 million ($60 million net to Pembina) of the amount committed at the time of the announcement. On January 2, 2025, Pembina announced that, in response to a request by Veren for additional battery infrastructure, the total funding commitment was increased to approximately $200 million ($120 million net to Pembina), which will be supported by long-term take-or-pay commitments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Greenlight Electricity Centre.** On February 27, 2025, Pembina announced that it had entered into agreements for a 50 percent interest in the Greenlight Electricity Centre Limited Partnership ("**Greenlight LP**"), which is developing a gas-fired combined cycle power generation facility to be located in Alberta's Industrial Heartland and constructed in multiple phases, up to approximately 1,800 MW (the "**Greenlight Project**"). The Greenlight Project would be constructed on land adjacent to Pembina's Redwater Complex. Greenlight LP is owned equally by Pembina and Kineticor Holdings LP#3, a subsidiary of OPSEU Pension Trust. On October 6, 2025, Pembina provided an update on the Greenlight Project and announced Greenlight LP successfully advanced through Phase 1 of the AESO large load allocation process and through subsequent commercial efforts secured a 907 MW allocation. This allocation has been assigned to a potential customer and would allow an innovation infrastructure development to begin operating prior to the Greenlight Project entering service. Greenlight LP has also entered an equipment supply contract for two turbines that provides certainty on equipment availability and delivery timing for the first phase of the project. This supports the current schedule with start-up of the Greenlight Project as early as 2030.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Financing Activities.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Preferred Share Redemptions.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**▪** On January 8, 2025, Pembina redeemed all of its 1,028,130 issued and outstanding Series 22 Class A Preferred Shares for a redemption price equal to $25.50 per Series 22 Class A Preferred Share, plus all accrued and unpaid dividends thereon to but excluding the date fixed for redemption, less any tax required to be deducted or withheld by Pembina. The total redemption price paid by Pembina was approximately $26 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ On June 30, 2025, Pembina redeemed all of its 8,000,000 issued and outstanding Series 19 Class A Preferred Shares for a redemption price equal to $25.00 per Series 19 Class A Preferred Share, less any tax required to be deducted or withheld by Pembina. The total redemption price paid by Pembina was approximately $200 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ On December 1, 2025, Pembina redeemed all of its 9,000,000 issued and outstanding Series 9 Class A Preferred Shares for a redemption price equal to $25.00 per Series 9 Class A Preferred Share, less any tax required to be deducted or withheld by Pembina. The total redemption price paid by Pembina was approximately $225 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Subordinated Note Offerings.** 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ On June 6, 2025, Pembina issued and sold $200 million aggregate principal amount of Subordinated Notes, Series 2. See "*Description of the Capital Structure of Pembina – Subordinated Notes – Subordinated Notes, Series 2*".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ On October 10, 2025, Pembina issued and sold $225 million aggregate principal amount of Subordinated Notes, Series 2. See "*Description of the Capital Structure of Pembina – Subordinated Notes, Series 2*".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Note Exchange.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**▪** On July 25, 2025, Pembina completed the Note Exchange, pursuant to which all of the outstanding Subordinated Notes, Series 1 were exchanged for an equal principal amount of Subordinated Notes, Series 3. See "*Description of the Capital Structure of Pembina – Subordinated Notes*".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ On July 28, 2025, in connection with the Note Exchange, Pembina redeemed all of its 600,000 issued and outstanding Series 2021-A Class A Preferred Shares pursuant to a mandatory redemption provision attaching to the Series 2021-A Class A Preferred Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Common Share Dividend Increase.** On May 8, 2025, Pembina announced that its Board of Directors approved a 3.0 percent increase in its quarterly Common Share dividend rate from $0.69 per Common Share to $0.71 per Common Share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Renewal of NCIB.** On May 14, 2025, Pembina announced that the TSX approved the renewal of Pembina's NCIB to purchase up to five percent of its outstanding Common Shares. The renewed NCIB commenced on May 16, 2025 and expires on the earlier of May 15, 2026 and the date on which Pembina has acquired the maximum number of Common Shares allowable under the renewed NCIB or the date on which Pembina otherwise decides not to make any further repurchases under the renewed NCIB.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Asset Updates, Commercial Agreements and Governance.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **LPG Export Agreement.** On August 1, 2025, Pembina announced that it had entered into a long-term tolling agreement with AltaGas for 30,000 bpd of LPG export capacity at AltaGas' current Ridley Island Propane Export Terminal and future Ridley Island Energy Export Facility. Under the agreement, Pembina secured a term deal for export capacity of 20,000 bpd starting in April 2026, and an additional 10,000 bpd starting in April 2027.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Alliance Pipeline Settlement.** On September 16, 2025, Pembina announced that the CER approved the negotiated settlement between Alliance Canada and shippers and interested parties on the Canadian portion of the Alliance Pipeline. The negotiated settlement included a revised term-differentiated toll schedule which established a new 10-year toll and reduced the existing 1-year, 3-year, and 5-year tolls. Under the settlement, long-term shippers were provided a one-time term extension option, enabling them to take advantage of the new term-differentiated tolls, effective November 1, 2025. Shippers subsequently elected the 10-year toll option on approximately 96 percent of the 1.325 billion cubic feet per day of firm capacity available.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **PETRONAS Cedar Capacity.** On November 5, 2025, Pembina and PETRONAS announced a 20-year agreement for 1.0 mtpa of Pembina's liquefaction capacity at the Cedar LNG facility. The agreement is a synthetic liquefaction service structure for 1.0 mtpa of capacity, under which Pembina will provide transportation and liquefaction capacity to PETRONAS over a 20-year term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Ovintiv Cedar Capacity.** On December 15, 2025, Pembina and Ovintiv announced a 12-year agreement for 0.5 mtpa of Pembina's liquefaction capacity at the Cedar LNG facility. The agreement is a synthetic liquefaction service structure for 0.5 mtpa of capacity, under which Pembina will provide transportation and liquefaction capacity to Ovintiv over a 12-year term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Organizational Changes.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**▪** On December 15, 2025, Pembina announced that Stu Taylor, Senior Vice President & Corporate Development Officer, Janet Loduca, Senior Vice President, External Affairs and Chief Legal & Sustainability Officer and Eva Bishop, Senior Vice President & Corporate Services Officer retired from

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their positions as officers of Pembina effective December 31, 2025. Mr. Taylor remains as an advisor to Pembina to support the ongoing development of Pembina's LNG business. In addition, Sarah Schwann was appointed as the Chief Legal, People, and Corporate Affairs Officer of Pembina.

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**Developments to date in 2026**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Asset Updates, Commercial Agreements and Governance.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ **Pipeline Expansions Sanctioned.** On February 26, 2026, Pembina announced that it is proceeding with two conventional pipeline expansion projects totalling $425 million to service growing volumes in northeast British Columbia and Alberta. The Birch-to- Taylor Expansion includes a new 95-kilometre pipeline and facility upgrades that will add approximately 120,000 bpd of capacity in that corridor. The initial scope of the Taylor-to-Gordondale Expansion includes new and upgraded pump stations downstream of Taylor, British Columbia and a new 16- kilometre pipeline connecting production in Alberta to the Gordondale pump station.

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**DESCRIPTION OF PEMBINA'S BUSINESS AND OPERATIONS**

**Pembina's Purpose, Values, and Strategy** 

**<u>Purpose:</u>** We deliver extraordinary energy solutions so the world can thrive.

**<u>Values:</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Safe:** We care for each other.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Trustworthy:** We have each other's backs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Respectful:** We seek to be gracious and kind.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Collaborative:** We are great together.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• **Entrepreneurial:** We create to succeed.

**<u>Strategy:</u>**

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.**To thrive, we will invest in the energy transition to improve the basins in which we operate.** We will prioritize lighter commodities as we continue to invest in new infrastructure and expand our portfolio to include new businesses associated with lower-carbon commodities.

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

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

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.*Customers* choose us first for reliable and value-added services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.*Investors* receive sustainable industry-leading total returns.

These four strategic priorities will ensure Pembina is stewarding to achieve financial excellence. We remain committed to maintaining our strong financial position and delivering industry-leading returns through adherence to our financial guardrails, prudent capital allocation, and a focus on return on invested capital.

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**Overview of Pembina's Business**

There are three general sectors in the oil and gas industry: upstream, midstream and downstream. The upstream sector encompasses exploration for, and production of, hydrocarbon gas and liquids in their raw forms. In the midstream sector, hydrocarbon products are gathered, processed, transported and marketed to the downstream sector. The downstream sector consists of refineries, petrochemical facilities, end-use customers, local distributors and wholesalers.

Pembina Pipeline Corporation is a leading energy transportation and midstream service provider that has served North America's energy industry for more than 70 years. Pembina owns an extensive network of strategically located assets, including hydrocarbon liquids and natural gas pipelines, gas gathering and processing facilities, oil and natural gas liquids infrastructure and logistics services, and an export terminals business. Through our integrated value chain, we seek to provide safe and reliable energy solutions that connect producers and consumers across the world, support a more sustainable future and benefit our customers, investors, employees and communities. For more information, please visit www.pembina.com.

Pembina is structured into three divisions: Pipelines Division, Facilities Division and Marketing & New Ventures Division, which are described in their respective sections of this Annual Information Form.

The following map illustrates Pembina's primary assets:

![system_mapx2025xlabelsx2xm.jpg](system_mapx2025xlabelsx2xm.jpg)

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The following table sets forth certain financial highlights for 2025 and 2024.

**Financial Highlights**

(in $ millions unless otherwise noted)

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Pipelines** | **Pipelines** | **Facilities** | **Facilities** | **Marketing & <br>New Ventures** | **Marketing & <br>New Ventures** | **Corporate & <br>Inter-segment Eliminations** | **Corporate & <br>Inter-segment Eliminations** | **Total** | **Total** |
| | **Pipelines** | **Pipelines** | **Facilities** | **Facilities** | **Marketing & <br>New Ventures** | **Marketing & <br>New Ventures** | **Corporate & <br>Inter-segment Eliminations** | **Corporate & <br>Inter-segment Eliminations** | **Total** | **Total** |
| *($ millions)* | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 |
| Volumes<sup>(1)</sup> | **2786** | 2711 | **871** | 837 | **—** |  | **—** |  | **3656** | 3548 |
| Revenue | **3521** | 3386 | **1228** | 1127 | **4065** | 3796 | **(1036)** | (925) | **7778** | 7384 |
| Cost of goods sold, including product purchases | **51** | 40 | **—** |  | **3524** | 3198 | **(674)** | (630) | **2901** | 2608 |
| Net revenue<sup>(2)</sup> | **3470** | 3346 | **1228** | 1127 | **541** | 598 | **(362)** | (295) | **4877** | 4776 |
| Earnings (loss) | **1938** | 1907 | **562** | 666 | **457** | 569 | **(750)** | (1422) | **1694** | 1874 |
| Earnings |  |  |  |  |  |  |  |  | **1694** | 1874 |
| &nbsp;&nbsp;&nbsp;&nbsp;Earnings per common share – basic (dollars) |  |  |  |  |  |  |  |  | **2.67** | 3.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;Earnings per common share – diluted (dollars) |  |  |  |  |  |  |  |  | **2.66** | 3.00 |
| Adjusted EBITDA<sup>(2)</sup> | **2596** | 2533 | **1396** | 1347 | **499** | 724 | **(202)** | (196) | **4289** | 4408 |
| Adjusted EBITDA per common share – basic *(dollars)*<sup>(2)</sup> |  |  |  |  |  |  |  |  | **7.38** | 7.69 |

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<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Volumes for Pipelines and Facilities are revenue volumes, defined as physical volumes plus volumes recognized from take-or-pay commitments. Volumes for Marketing & New Ventures are marketed crude oil and NGL volumes and are excluded from total volumes. Volumes are stated in mboe/d, with natural gas volumes converted to mboe/d from MMcf/d at a 6:1 ratio, and also include revenue volumes from Pembina's equity accounted investees.

<sup>(2)&nbsp;&nbsp;&nbsp;&nbsp;</sup>See the "*Non–GAAP Financial Measures*" section.

The proportional breakdown of earnings and adjusted EBITDA<sup>(1)</sup> in 2025 for each of Pembina's three divisions<sup>(2)</sup> was as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2025 earnings by division 2025 adjusted EBITDA by division*

![a2025earningsbydivision.jpg](a2025earningsbydivision.jpg)![a2025adjebitdabydiv.jpg](a2025adjebitdabydiv.jpg)

<sup>(1)</sup> See the "*Non-GAAP Financial Measures*" section.

<sup>(2)</sup> Excluding corporate division and inter-segment eliminations.

See "*Segment Results*" in the MD&A for a further discussion of financial and operational results and new developments for Pembina's business segments for the years ended December 31, 2025 and 2024.

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**Pipelines Division** 

*Overview*

The Pipelines Division provides customers with pipeline transportation, terminalling, and storage in key market hubs in Canada and the United States for crude oil, condensate, natural gas liquids and natural gas. Through Pembina's wholly-owned and joint venture assets, the Pipelines Division manages pipeline transportation capacity of approximately 3.0 mmboe/d<sup>(1)</sup> and above ground storage capacity of approximately 10 mmbbls<sup>(1)</sup> within its conventional, oil sands and heavy oil, and transmission assets. The conventional assets include strategically located pipelines and terminalling hubs that gather and transport light and medium crude oil, condensate and natural gas liquids from western Alberta and northeast British Columbia to downstream pipelines and processing facilities in the Edmonton, Alberta area. The oil sands and heavy oil assets transport heavy and synthetic crude oil produced within Alberta to the Edmonton, Alberta area and offer associated storage and terminalling services. The transmission assets transport natural gas, ethane and condensate throughout Canada and the United States on long haul pipelines linking various key market hubs. In addition, the Pipelines Division assets provide linkages to Pembina's Facilities Division assets across North America, enabling flexibility and optionality in the Company's customer service offerings. Together, these assets supply products from hydrocarbon producing regions to refineries, fractionators and market hubs in Alberta, British Columbia, and Illinois, as well as other regions throughout North America.

<sup>(1)</sup> Net capacity.

*Assets* 

Pembina's assets within the Pipelines Division include conventional assets, oil sands and heavy oil assets, and transmission assets.

Pembina's primary conventional assets include the following:

• The Peace Pipeline system ("**Peace Pipeline**"), which includes approximately 4,565 km of pipelines, including gathering laterals, that transport ethane mix (C2+), propane mix (C3+), crude oil and condensate from northwestern Alberta to Edmonton, Alberta and to Fort Saskatchewan, Alberta.

• The Northern Pipeline system ("**Northern Pipeline**"), which includes approximately 670 km of pipelines, including gathering laterals, that transport NGL from Belloy, Alberta to Fort Saskatchewan, Alberta.

The current total combined capacity of the Peace Pipeline and Northern Pipeline systems is approximately 1.1 mmbpd. In December 2025, Pembina announced it is proceeding with the Fox Creek-to-Namao expansion, which, through the addition of pump stations, will add approximately 70,000 bpd of propane-plus capacity to the Peace Pipeline market delivery pipelines from Fox Creek, Alberta to Namao, Alberta ("**Fox Creek-to-Namao Expansion**"). The Fox Creek-to-Namao Expansion is expected to cost approximately $200 million, with an anticipated in-service date in the first quarter of 2027.

• The Drayton Valley Pipeline system ("**Drayton Valley Pipeline**"), which includes approximately 1,100 km of pipelines, including gathering laterals, with a capacity of 145 mbpd, that transport crude oil and condensate from the area southwest of Edmonton, Alberta to Edmonton, Alberta.

• The Plateau Pipeline system and Pouce Coupé Pipeline system, both located primarily in northeast British Columbia, (collectively, "**NEBC Pipelines**"), include approximately 400 km of pipelines, including gathering laterals, that transport NGL, crude oil and condensate from northeastern British Columbia to Taylor, British Columbia and then transportation from Taylor, British Columbia to northwestern Alberta.

In February 2026, Pembina announced its subsidiary, Plateau Pipe Line Ltd., is proceeding with the Birch-to-Taylor expansion, which includes a new 95-kilometre pipeline and facility upgrades that will add approximately 120,000 bpd of propane-plus and condensate capacity in that corridor ("**Birch-to-Taylor Expansion**"). Plateau Pipe Line Ltd. has obtained all necessary permits to begin preliminary construction activities. The project has an estimated cost of approximately $310 million, and an anticipated in-service date in the fourth quarter of 2027.

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Pembina is also proceeding with a phased approach to the Taylor-to-Gordondale expansion ("**Taylor-to-Gordondale Expansion**"), which is being optimized to meet customers' near-term transportation needs while maintaining Pembina's track record of disciplined capital investment.

In February 2026, Pembina announced that Pembina and Plateau Pipe Line Ltd., a subsidiary of Pembina, are proceeding with the initial scope of the Taylor-to-Gordondale Expansion, which includes new and upgraded pump stations downstream of Taylor, British Columbia and a new 16-kilometre pipeline connecting production in Alberta to the Gordondale pump station. The initial scope of the project has an estimated cost of approximately $115 million, with an anticipated in-service date in the first quarter of 2027, subject to regulatory approval.

The remaining scope of the Taylor-to-Gordondale Expansion includes an approximately 89 kilometer, 16-inch pipeline being proposed by Pouce Coupé Pipe Line Ltd., a subsidiary of Pembina, to connect mostly condensate volumes from Taylor, British Columbia to the Gordondale, Alberta area. On February 10, 2026, the CER issued a Certificate of Public Convenience and Necessity for the CER regulated Taylor-to-Gordondale Pipeline Project. This was the final federal regulatory approval required for the pipeline. Pembina will continue to evaluate the incremental scope in conjunction with the timing of customers' egress requirements.

• The Liquids Gathering Pipeline system ("**LGS**"), which includes approximately 425 km of pipelines, including gathering laterals, that transport NGL from northeastern British Columbia to Gordondale, Alberta.

• The Brazeau NGL Pipeline system ("**Brazeau Pipeline**"), which includes approximately 500 km of pipelines, including gathering laterals, with a capacity of 61 mbpd, that transport NGL from natural gas processing plants southwest of Edmonton, Alberta to Fort Saskatchewan, Alberta.

• The Canadian Diluent Hub ("**CDH**"), which includes approximately 500 mbbls of above ground storage and provides direct connectivity for domestic and U.S. condensate volumes to the oil sands via downstream third-party pipelines.

• The Edmonton North Terminal ("**ENT**"), which includes approximately 900 mbbls of above ground storage with access to crude oil and condensate supply transported on Pembina's operated pipelines and products from various third-party operated pipelines.

• 13 truck terminals, which provide pipeline and market access for crude oil, condensate, and propane mix (C3+) production that is not pipeline connected.

Pembina's primary oil sands and heavy oil assets include the following:

• The Syncrude Pipeline system ("**Syncrude Pipeline**"), which includes approximately 450 km of pipelines, with a capacity of 389 mbpd. Pembina is the sole transporter of synthetic crude oil for the Syncrude Project to delivery points near Edmonton, Alberta.

• The Horizon Pipeline system ("**Horizon Pipeline**"), which includes approximately 525 km of pipelines, with a capacity of 335 mbpd. Pembina transports synthetic crude oil for the Horizon Project to delivery points near Edmonton, Alberta.

• The Nipisi Pipeline system ("**Nipisi Pipeline**"), which includes approximately 350 km of pipelines, with a capacity of approximately 100 mbpd, that transports heavy oil from the Clearwater formation near the Slave Lake area of Alberta to Pembina's North 40 Terminal and other downstream third-party terminals.

• The terminals at Edmonton, Alberta (the "**Edmonton Terminals**"), which consist of 34 merchant tanks with a capacity of approximately 11.5 mmbbls (9.0 mmbbls net to Pembina) of storage. The terminals are connected to a highly diverse suite of inbound pipelines and outbound connections, resulting in robust connectivity in the Edmonton, Alberta area. The Edmonton Terminals include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The Edmonton South Terminal is a merchant tank terminal located in Sherwood Park, Alberta. The assets in this facility consist of 13 storage tanks with a total storage capacity of approximately 4.4 mmbbls. The 13 tanks are currently leased from Trans Mountain Corporation under a long-term arrangement and are subleased to third parties.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The North 40 Terminal ("**North 40 Terminal**") is a merchant tank terminal located in Sherwood Park, Alberta. The assets in this facility consist of nine storage tanks with a total storage capacity of approximately 2.2 mmbbls.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The Base Line Terminal is a joint venture asset owned by Pembina (50 percent) and Keyera (50 percent) and is operated by Pembina. It is a merchant crude oil storage terminal located on leased land at Keyera's Alberta EnviroFuels facility in Sherwood Park, Alberta. The assets in this facility consist of 12 storage tanks with a total storage capacity of 4.8 mmbbls (2.4 mmbbls net to Pembina).

Pembina's primary transmission assets include the following:

• The Alliance Pipeline system ("**Alliance Pipeline**") is held through Alliance Canada and Alliance U.S.

The Alliance Pipeline delivers an average of 1.7 bcf/d of rich gas and consists of an approximately 3,850 km integrated Canadian and U.S. natural gas transmission pipeline, from the WCSB and the Williston Basin in North Dakota to natural gas markets in the Chicago, Illinois area. The Alliance Pipeline connects to Aux Sable U.S.'s Channahon Facility in Channahon, Illinois, which extracts NGL from the natural gas transported before delivery to downstream pipelines.

The Canadian portion of the Alliance Pipeline consists of a 1,561 km natural gas mainline pipeline and 732 km of related lateral pipelines connected to natural gas receipt locations, primarily at gas processing facilities in northwestern Alberta and northeastern British Columbia, and related infrastructure. Alliance Canada owns the Canadian portion of the Alliance Pipeline.

The U.S. portion of the Alliance Pipeline consists of 1,556 km of infrastructure, including the 129 km Tioga lateral in North Dakota. Alliance U.S., an affiliate of Alliance Canada, owns the U.S. portion of the Alliance Pipeline system.

• The Cochin Pipeline system ("**Cochin Pipeline**") includes an approximately 2,500 km pipeline, which currently spans from Kankakee County, Illinois to Fort Saskatchewan, Alberta. The Cochin Pipeline transports refined condensate primarily to be used as diluent to facilitate bitumen transportation. The Cochin Pipeline traverses two provinces in Canada and four states in the U.S. and has an annual average capacity of 110 mbpd.

• The Vantage Pipeline system ("**Vantage Pipeline**") includes an approximately 800 km, 68 mbpd pipeline and gathering laterals that link ethane supply from the Bakken resource play in North Dakota to the petrochemical market in Alberta. Volumes originate from two gas plants in Tioga, North Dakota extending northwest through Saskatchewan and terminating near Empress, Alberta, where it is connected to the Alberta Ethane Gathering System ("**AEGS**").

• The AEGS transports ethane within Alberta from various ethane extraction plants to major petrochemical complexes located near Joffre, Alberta and Fort Saskatchewan, Alberta. At 1,120 km in total length, with an aggregate design capacity of approximately 330 mbpd, AEGS is comprised of an east leg, west leg and a bi-directional north leg, which together form an integrated system that includes interconnections with underground storage sites in Fort Saskatchewan, Alberta and Burstall, Saskatchewan.

• NRGreen Power Limited Partnership ("**NRGreen**"), which includes four waste heat recovery units with the capacity to generate 20 MW of electricity along the Alliance Pipeline in Saskatchewan, and a 14 MW waste heat recovery unit at Alliance Pipeline's Windfall compressor station near Whitecourt, Alberta.

*Customers and Commercial Structure*

There are approximately 70 shippers on the conventional assets, including independent producers and multinational oil and gas companies. The primary assets connected to Pembina's conventional assets include: the Enbridge pipeline systems for multiple products; Pembina's North 40 Terminal and the Trans Mountain Pipeline system near Edmonton, Alberta; the Strathcona refinery in the Edmonton, Alberta area; Pembina's CDH near Fort Saskatchewan, Alberta; connected oil sands diluent pipelines; and all major NGL fractionators near Fort Saskatchewan, Alberta.

Pembina's conventional terminals are configured to access, and provide services for, the common grades of Canadian crude oil, as well as access domestic and imported condensate streams. The terminals provide essential services for Pembina's customers with outbound delivery flexibility and above ground storage.

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At Pembina's truck terminals, the customer base generally comprises the same producers who seek to transport various products, including condensate, on Pembina's conventional and oil sands and heavy oil systems. Truck terminals are particularly attractive to producers who are unable to justify pipeline/oil battery connections due to relatively low daily production or are producing in advance of being pipeline connected.

The contracts related to conventional assets are fee-for-service in nature, but vary in their structure as follows:

• <u>Firm contracts:</u> Pembina focuses on securing base volumes on its Peace Pipeline and Northern Pipeline systems under a firm contract structure, where a fee-for-service toll, which includes flow-through operating costs for power and extraordinary events, is set under the contract and customers receive a firm amount of pipeline capacity for the transportation of their products. Under firm contracts, customers also agree to a minimum revenue or volume commitment ("**take-or-pay**").

• <u>Cost-of-service contracts:</u> Pembina's conventional pipelines in British Columbia and its cross-border pipelines are primarily operated under a cost-of-service methodology whereby Pembina flows through the actual operating costs of the systems to shippers while recovering a return on invested capital. Under cost-of-service contracts, Pembina is obligated to hold a fixed capacity for the shippers and the shippers have an obligation to pay their share of the rate base and operating costs of the system whether they use all of the fixed capacity or not.

• <u>Non-firm or interruptible contracts:</u> Capacity on conventional assets that has not been secured under the firm contracts or cost-of-service contracts structures described above is contracted under fee-for-service, month-to-month contracts on an interruptible basis. These contracts do not require Pembina to guarantee a specified amount of dedicated capacity for a customer. Rather, under a non-firm or interruptible contract structure, customers nominate volumes on a monthly basis and tariffs are set periodically by receipt point.

The majority of crude oil, condensate and NGL product transported on the Peace Pipeline and Northern Pipeline systems are contracted under long-term, firm, take-or-pay contracts. As of December 31, 2025, the weighted average remaining term on the Peace Pipeline and Northern Pipeline firm contracts was approximately 8 years.

Services provided on other conventional assets and systems such as the Drayton Valley Pipeline, LGS, Brazeau Pipeline, CDH, and ENT are generally under interruptible contracts.

The major shippers on Pembina's oil sands and heavy oil assets are primarily large upstream exploration and production companies.

Pembina's oil sands and heavy oil assets provide services predominantly under long-term, extendible contracts, which allow Pembina to pass along eligible operating expenses to customers. As a result, financial results of these assets are primarily driven by the amount of capital invested and they are not significantly impacted by fluctuations in certain operating expenses, physical throughput or commodity prices, with the exception of the Nipisi Pipeline which is contracted primarily on a firm contract basis, and can therefore benefit from increased physical throughput.

Pembina's Syncrude Pipeline is fully contracted under a cost-of-service, extendible, long-term agreement.

The Horizon Pipeline is fully contracted to a single customer and is operated under the terms of a long-term fixed return, extendible contract.

The capacity on the Nipisi Pipeline is contracted under a combination of cost-of-service and firm service long-term contracts with minimum take-or-pay commitments.

The Edmonton Terminals service customers consisting of a diverse mix of production, refining, marketing and integrated companies. The Edmonton Terminals are primarily contracted under long-term and medium-term take-or-pay agreements.

As at December 31, 2025, Alliance Canada had 26 long-term firm shippers and Alliance U.S. had 25 long-term firm shippers. Firm transportation contracts are take-or-pay in nature and shippers are obligated to pay demand charges on contracted capacity in Canada and reservation charges on contracted capacity in the U.S. Alliance Canada has secured approximately 1.27 bcf/d of 10-year receipt take-or-pay agreements as part of the Alliance Pipeline settlement which came into effect on November 1, 2025. In addition, Alliance Canada sells seasonal firm and interruptible transportation service on a price-biddable basis.

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The Cochin Pipeline has medium to long-term contractual commitments with shippers for an aggregate of 90 mbpd that commenced August 1, 2024.

Transportation service on the Vantage Pipeline is underpinned by long-term, fee-for-service contracts with take-or-pay provisions. Currently, Vantage Pipeline contracts are with one customer with petrochemical infrastructure in Alberta, with multiple receipt points along the Vantage Pipeline. Approximately 50 percent of the Vantage Pipeline's capacity is contracted on a take-or-pay basis with additional volumes flowing on a fee-for-service basis.

The AEGS shipper community is currently comprised of either major ethane producers or consumers that have significant energy infrastructure and/or petrochemical investments in Alberta. AEGS is contracted under long-term take-or-pay agreements.

*Competition*

Competition among existing crude oil, condensate and NGL pipelines is based primarily on the cost of transportation, access to supply, the quality and reliability of service, contract carrier alternatives, proximity and access to markets, and integration with additional service offerings.

Pembina's conventional pipelines are feeder pipelines that move products in the field from oil batteries, processing facilities and storage tanks to facilities, markets and downstream pipelines primarily in the Edmonton, Alberta and Fort Saskatchewan, Alberta areas as outlined above. The majority of Pembina's conventional assets are connected to existing oil batteries and other facilities. Existing volumes generally remain connected to the applicable pipeline system until it is uneconomic to continue providing pipeline transportation services. This can occur for numerous reasons, including low volumes or increased integrity maintenance costs, in which case the connection may be discontinued and the producer may truck volumes to an alternate delivery point. With Pembina's track record of safe, reliable and cost-effective operations, service tenure, the complex and strategically located nature of its systems, and high levels of customer service, it is difficult for a competitor to fully replicate Pembina's service offering.

Production volumes that are unconnected via pipeline are typically trucked to the most cost-effective truck unloading facility and there is direct competition from numerous service providers serving the same area. Typically, a producer's selection of a truck terminal is only partially based on tolls. It may also be based on proximity, whether the volumes need some form of treatment to meet pipeline specifications, or location based arbitrage opportunities associated with the applicable product. Pembina owns truck terminals to assist in aggregating unconnected volumes onto its systems. There are several other pipelines and terminal operators which compete for trucked volumes in Pembina's operating areas. Competition for these volumes include local market fractionators for NGL, as well as rail and numerous pipelines connected to terminal operations for crude oil and condensate.

The Edmonton Terminals assets provide excellent inbound and outbound connectivity, both in terms of the facilities to which they are connected and the diversity of products that may be stored and transported by them. In addition to the considerable market access offered to customers via pipeline, including the Trans Mountain Pipeline, the Edmonton Terminals are able to offer customers the flexibility to move crude oil to markets, store or blend product, supplement deliveries to markets with constrained pipeline capacity, provide security of egress to manage product disruptions, and supply different or unique crude types to refineries looking to maintain set crude specifications.

While the limited availability of land for development in the area around the Edmonton Terminals and the significant capital investment required to enter the terminalling business are significant barriers to entry, the Edmonton Terminals are subject to competition from other storage facilities which are either in the general vicinity of the terminals or which have gathering systems that are, or could potentially extend into, areas served by the Edmonton Terminals.

While regional infrastructure capacity for delivery to the Edmonton, Alberta area is sufficient for current production levels, the primary focus of infrastructure development is expected to be on providing access to markets outside of Alberta for the majority of bitumen and heavy oil produced in Alberta, including through potential incremental merchant storage capacity opportunities at Pembina's terminals. In the long-term, expansions of existing condensate and synthetic crude diluent supply infrastructure, as well as blended bitumen and heavy oil pipeline delivery systems, may be required depending on future development of oil sands assets and production of heavy oil. See *"Risk Factors – Risks Inherent in Pembina's Business – Reserve Replacement, Throughput and Product Demand".*

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Given the long-term nature of oil sands and heavy oil investments, most pipelines serving existing production are underpinned by long-term transportation agreements. Competition primarily arises with respect to incremental supply that requires additional pipeline capacity. In some cases, existing pipeline companies have under-utilized assets which can be re-purposed to suit a prospective customer's needs, giving them a competitive advantage when competing for new projects. In other cases, where construction of significant new infrastructure is required, pipeline companies compete for these opportunities based primarily on their operating expertise, cost of capital and commercial flexibility.

As described further under "*Canadian Oil and Gas Industry*", Alliance Pipeline competes with other natural gas transportation alternatives throughout North America. Further, the WCSB, which Alliance Pipeline serves, faces competition from other natural gas producing regions. Alliance Pipeline's competitive position is strengthened by its unique ability to transport rich gas from the WCSB and Bakken to markets in the Chicago, Illinois area.

Condensate used in Canada is primarily supplied by local production and imports from the U.S. While the Cochin Pipeline competes with pipeline systems capable of transporting significant volumes of diluent, the Cochin Pipeline's delivery point in Fort Saskatchewan, Alberta has a low gravity diluent pool and a high level of connectivity, making the Cochin Pipeline an attractive mode of shipping condensate.

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**Facilities Division** 

*Overview*<sup>1</sup>

The Facilities Division includes infrastructure that provides Pembina's customers with natural gas, condensate and NGL services. Through its wholly-owned assets and its interest in PGI, Pembina's natural gas gathering and processing facilities are strategically positioned in active, liquids-rich areas of the WCSB and Williston Basin and may be serviced by the Company's other businesses. Pembina provides its customers with sweet and sour gas gathering, compression, condensate stabilization, and both shallow cut and deep cut gas processing services with a total capacity of approximately 6.7 bcf/d. Condensate and NGL extracted at virtually all Canadian-based facilities have access to transportation on Pembina's pipelines. In addition, all NGL transported along the Alliance Pipeline are extracted through the Channahon Facility at the terminus. The Facilities Division includes approximately 430 mbpd of NGL fractionation capacity, 21 mmbbls of cavern storage capacity, various oil batteries, associated pipeline, and rail terminalling facilities and a liquefied propane export facility on Canada's West Coast. These facilities are accessible to Pembina's other strategically located assets and pipeline systems, providing customers with flexibility and optionality to access a comprehensive suite of services to enhance the value of their hydrocarbons. In addition, Pembina owns a bulk marine import/export terminal in Vancouver, British Columbia.

<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>References to capacity in this paragraph are to net capacity and exclude projects under development.

*Assets*

Pembina's assets within the Facilities Division include the gas services assets and the NGL services assets.

Pembina's primary gas services assets include the following:

• Pembina's 60 percent operating interest in PGI, which has ownership interests in the following assets as noted below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The Saturn Gas Plant (100 percent), Sunrise Gas Plant (100 percent) and Tower Gas Plant (100 percent) (collectively, the "**Dawson Assets**") located southeast of Fort St. John, British Columbia, which have combined gross processing capacity of 1,100 MMcf/d (660 MMcf/d net to Pembina). These assets also include approximately 900 km of gas gathering lines and three liquids hubs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The Cutbank Complex (the "**Cutbank Complex**") located near Grande Prairie, Alberta, which includes three shallow cut sweet gas processing plants (the Cutbank Gas Plant (100 percent), Musreau I (89 percent) comprised of three trains, Musreau II/ III (100 percent) comprised of two trains), and one deep cut sweet gas processing plant (the Musreau Deep Cut (100 percent)). In total, the Cutbank Complex has 745 MMcf/d (431 MMcf/d net to Pembina) of sweet gas processing capacity including 205 MMcf/d (123 MMcf/d net to Pembina) of sweet deep cut extraction capacity. The Cutbank Complex also includes approximately 350 km of gathering pipelines, nine field compression stations, and centralized condensate stabilization.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The Hythe Gas Plant (100 percent) and Steeprock Gas Plant (100 percent), which are located northwest of Grande Prairie, Alberta with sweet and sour gas processing capacity of 641 MMcf/d (385 MMcf/d net to Pembina). The plants have approximately 350 km of associated gathering lines.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The Saturn Complex (the "**Saturn Complex**"), which is located near Hinton, Alberta and includes the Saturn I (100 percent) and Saturn II (100 percent) facilities for a total of 435 MMcf/d (261 MMcf/d net to Pembina) of deep cut gas processing capacity, as well as approximately 25 km of gathering pipelines.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The Patterson Creek Plant (100 percent) ("**Patterson Creek**"), which is a sweet gas processing facility located southeast of Grande Prairie, Alberta with shallow cut NGL recovery. Patterson Creek has an operational capacity of 390 MMcf/d (234 MMcf/d net to Pembina), as well as approximately 500 km of gathering pipelines.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The Kaybob South 3 Processing Plant (97 percent) (the "**K3 Plant**"), which is located south of Fox Creek, Alberta, is a sour gas processing facility with shallow cut NGL recovery. The K3 Plant has an operational capacity of 375 MMcf/d (218 MMcf/d net to Pembina), as well as approximately 750 km of gathering pipelines. PGI is developing a 28 MW cogeneration facility at the K3 Plant (the "**K3 Cogeneration Facility**"), which is expected to reduce overall operating costs by providing power and heat to the gas processing facility, while reducing customers' exposure to power prices. The K3 Cogeneration Facility is expected to fully supply the K3 Plant's power

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requirements, with excess power sold to the grid at market rates. Further, the K3 Cogeneration Facility is expected to contribute to a reduction in annual emissions compliance costs at the K3 Plant through the utilization of the cogeneration waste heat and the low-emission power generated. The K3 Cogeneration Facility is expected to cost approximately $115 million ($70 million net to Pembina) and is expected to be in-service at the end of the first quarter of 2026.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The Duvernay Complex (100 percent) (the "**Duvernay Complex**"), which is located near Fox Creek, Alberta, currently includes three shallow cut sweet gas processing trains (Duvernay I, Duvernay II and Duvernay III, the Duvernay Sour Treating Facilities and the Duvernay Field Hub). In total, the Duvernay Complex has 360 MMcf/d (198 MMcf/d net to Pembina) of shallow cut sweet gas processing capacity, 60 mbpd of raw inlet condensate stabilization facilities, 15 mbpd of water handling facilities, a 150 MMcf/d sour gas sweetening system with 300 MMcf/d of amine regeneration capability and up to one tonne of sulphur per day of acid incineration. Supporting infrastructure includes a 12 km sales gas pipeline and over 50 km of gas gathering and fuel gas pipelines.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The Resthaven Facility (78 percent) (the "**Resthaven Facility**"), which is located near Grande Cache, Alberta and includes 300 MMcf/d (141 MMcf/d net to Pembina) of raw-to-deep cut sweet gas processing capacity, as well as approximately 30 km of gathering pipelines.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The Kakwa River facility (100 percent), which has 200 MMcf/d (120 MMcf/d net to Pembina) of raw-to-deep cut sour gas processing capacity (the "**Kakwa River Deep Cut Plant**") and 50 MMcf/d (30 MMcf/d net to Pembina) of shallow cut capacity (the "**Kakwa River Shallow Cut Plant**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The Kaybob South Amalgamated Plant (94 percent) (the "**KA Plant**"), which is a sour gas processing facility located southwest of Fox Creek, Alberta with shallow cut NGL recovery. The KA Plant has an operational capacity of 220 MMcf/d (124 MMcf/d net to Pembina) and includes approximately 250 km of gathering pipelines.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The Wapiti Plant (100 percent) (the "**Wapiti Plant**"), which is a sour gas processing facility located southwest of Grande Prairie, Alberta with shallow cut NGL recovery. The Wapiti Plant has an operational capacity of 200 MMcf/d (120 MMcf/d net to Pembina) and includes approximately 450 km of gathering pipelines. PGI is developing an expansion at the Wapiti Plant (the "**Wapiti Expansion**") that will increase natural gas processing capacity at the Wapiti Plant by 115 MMcf/d (69 MMcf/d net to Pembina). The development of the Wapiti Expansion is driven by strong customer demand supported by growing Montney production and will be fully underpinned by long-term, take-or-pay contacts. The Wapiti Expansion, which consists of a new sales gas pipeline and other related infrastructure, is expected to cost approximately $230 million ($140 million net to Pembina) and is expected to be in-service at the end of the first quarter of 2026.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The Smoke Lake Plant (100 percent), which is a gas processing facility located near Fox Creek, Alberta with a capacity of 60 MMcf/d (36 MMcf/d net to Pembina). The Smoke Lake Plant is not currently in operation. PGI will continue to pursue opportunities to re-contract this asset.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The 15-07 Kaybob Complex (50 percent) (the "**Kaybob Complex**"), which is located south of Fox Creek, Alberta and has an operational capacity of 165 MMcf/d (50 MMcf/d net to Pembina) of gas processing and condensate stabilization of 15 mbpd (5 mbpd net to Pembina). The Kaybob Complex is operated by Whitecap.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ 13 batteries, which collect and treat crude oil and condensate production from various wells and provide downstream market access through the Peace Pipeline.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ PGI has entered into arrangements with certain producers to fund a total of $850 million ($510 million net to Pembina) in new infrastructure, including with Whitecap in respect of a new battery and gathering laterals in the Lator area ($400 million gross, $240 million net to Pembina) and a new battery and gathering infrastructure in the Gold Creek and Karr areas ($300 million gross, $180 million net to Pembina), and with another producer for an under-construction battery in the Wapiti/North Gold Creek Montney area ($150 million gross, $90 million net to Pembina). While the customers are constructing and will operate these new assets, PGI will retain ownership, underpinned by long-term take-or-pay contracts and area-of-dedication agreements.

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• The Younger NGL Extraction Facility ("**Younger**") which is a 640 MMcf/d (459 MMcf/d net to Pembina) extraction facility and approximately 10 mbpd, net to Pembina, fractionation facility located southeast of Fort St. John, British Columbia, that supplies specification NGL products to local markets, as well as NGL mix supply transported on the Company's pipeline systems to the Fort Saskatchewan, Alberta area for fractionation and sale, and condensate to Pembina's CDH.

• The Empress NGL Extraction Facility ("**Empress**"), which is comprised of a 1,200 MMcf/d (1,065 MMcf/d net to Pembina) extraction facility located at Empress, Alberta, which includes 37 mbpd, net to Pembina, of ethane-plus fractionation, and 30 mbpd of propane-plus fractionation. At Empress, NGL mix is extracted from natural gas at straddle plants and all of the extracted NGL is fractionated, with the ethane and condensate sold into western Canadian markets. The remaining propane and butane, at Pembina's option, is either distributed for sale into western Canadian and mid-western U.S. markets or Pembina recombines the propane and butane and transports the mix to Sarnia, Ontario for further re-fractionation, distribution and sale into markets in eastern Canada and the eastern U.S. The Empress Co-generation Facility (the "**Empress Co-generation Facility"**) uses natural gas to generate up to 45 MW of electrical power, thereby reducing overall operating costs at Empress, and contributes to GHG emission reductions through the utilization of the co-generation waste heat and the low-emission power generated.

• Burstall Ethane Storage ("**Burstall**"), which is comprised of an ethane storage facility, with capacity of 1 mmbbls, located near Burstall, Saskatchewan.

Pembina's primary NGL services assets include the following:

• The fractionation and storage facilities ("**Redwater Complex**"), which include two 73 mbpd ethane-plus fractionators (being "**RFS I**" and "**RFS II**", respectively); a 55 mbpd propane-plus fractionator ("**RFS III**"); and 12.1 mmbbls of cavern storage located in Redwater, Alberta. The Redwater Complex purchases NGL mix from various natural gas and NGL producers and fractionates it into finished products for further distribution and sale. Also located at the Redwater Complex are Pembina's truck and rail terminals with unit train capability, which service Pembina's proprietary and customer needs for importing and exporting NGL products. In 2023, Pembina sanctioned construction of a new 55 mbpd propane-plus fractionator ("**RFS IV**") at the Redwater Complex. The project includes additional rail loading capacity at the Redwater Complex. RFS IV is expected to cost approximately $525 million and will leverage the design, engineering and operating best practices of its existing facilities. RFS IV is expected to be in-service in the second quarter of 2026. With the addition of RFS IV, the fractionation capacity at the Redwater Complex will total 256 mbpd. The Redwater Co-generation Facility uses natural gas to generate up to 45 MW of electrical power, thereby reducing overall operating costs at Redwater, and contributes to GHG emission reductions through the utilization of the co-generation waste heat and the low-emission power generated.

• The East NGL System ("**East NGL System**"), which includes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Up to 20 mbpd of fractionation capacity and 1.2 mmbbls of cavern storage in Sarnia, Ontario;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ Storage and terminalling assets/capacity at Kerrobert, Saskatchewan, and Superior, Wisconsin; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ 6 mmbbls of hydrocarbon storage, truck and rail loading facilities at Corunna, Ontario.

• The Prince Rupert Terminal (the "**Prince Rupert Terminal**"), a 20 mbpd propane export terminal located on Watson Island, British Columbia on lands leased from a wholly-owned subsidiary of the City of Prince Rupert. The Prince Rupert Terminal includes a rail terminal, moving propane from rail cars to pressurized storage spheres, and ultimately to 'handysize' vessels destined for international markets. Pembina is optimizing its Prince Rupert Terminal (the "**PRT Optimization**"), primarily through increasing storage capacity, that will allow the Prince Rupert Terminal to accommodate medium gas carrier vessels. The PRT Optimization is expected to expand access to additional markets with higher realized propane prices, while significantly reducing shipping costs per unit, thereby improving netbacks for Pembina and its customers. The PRT Optimization is expected to be in-service in mid-2028 with an estimated capital cost of $145 million.

• Vancouver Wharves ("**Vancouver Wharves**"), located in North Vancouver, B.C., is a 118-acre bulk marine terminal facility that in 2025 transferred approximately 3.4 million tons of bulk cargo and 5.3 mmbbls of liquids predominantly to offshore export markets. Vancouver Wharves is operated under an operating lease and asset ownership agreement with the B.C. Railway Company and a corresponding water lot lease with the Port of Vancouver. The terminal includes 800,000 tonnes of bulk storage capacity, 450,000 barrels of distillate storage capacity, four berths, facilities that can house up to 355 rail cars and connectivity to three Class 1 rail companies.

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• A 50 percent interest in Fort Corp, which has 27,500 metric tonnes of ethylene storage and 33,400 metric tonnes of ethane-plus NGL mix storage near Fort Saskatchewan, Alberta.

<u>Aux Sable</u>

Aux Sable ("**Aux Sable**") includes Aux Sable U.S. and Aux Sable Canada:

• Aux Sable U.S. ("**Aux Sable U.S.**") is comprised of Aux Sable Liquids Products Inc., Aux Sable Liquid Products LP ("**Aux Sable U.S. LP**"), Aux Sable Extraction LP and Aux Sable Midstream LLC. Aux Sable U.S. is wholly-owned by Pembina. The primary assets of Aux Sable U.S. include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The Channahon Facility ("**Channahon Facility**"), located in Channahon, Illinois, about 80 km southwest of Chicago at the eastern terminus of the Alliance Pipeline. The Channahon Facility is capable of processing 2.1 bcf/d of natural gas and can produce approximately 131 mbpd of specification NGL products. All of the natural gas delivered via the Alliance Pipeline is processed at the Channahon Facility. The Channahon Facility includes storage and rail facilities as well as NGL pipelines that connect the facility to various third-party terminals, refineries and petrochemical plants. The scale and geographic location of the Channahon Facility provides producers located in western Canada and North Dakota with economic options for liquids rich gas takeaway and access to U.S. NGL markets, avoiding costly investments in field processing and transportation infrastructure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The Palermo Conditioning Plant ("**Palermo Conditioning Plant**"), located near Palermo, North Dakota, an 80 MMcf/d plant, which receives gas from gathering systems servicing nearby Bakken shale oil and gas production areas and removes the condensate, which is trucked to various local third-party terminals, while leaving the majority of the NGL products in the rich gas prior to shipping on the Alliance Pipeline via delivery on the Prairie Rose Pipeline.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The Prairie Rose Pipeline ("**Prairie Rose Pipeline**"), a 120 MMcf/d pipeline connecting the Palermo Conditioning Plant to the Alliance Pipeline.

• Aux Sable Canada ("**Aux Sable Canada**") is comprised of Aux Sable Canada LP and Aux Sable Canada Ltd. Aux Sable Canada is wholly-owned by Pembina. The primary assets of Aux Sable Canada include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The Heartland Offgas Plant ("**HOP**"), a 20 MMcf/d extraction plant located in Fort Saskatchewan, Alberta. HOP produces valuable products including hydrogen, ethane, and other natural gas liquids from a refinery offgas stream supplied from Shell's Scotford Complex. The products are returned to Shell via pipeline.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;◦ The Septimus Pipeline, which is located in northeastern British Columbia and transports sweet, liquids rich gas from the Septimus and Wilder gas plants to the Alliance Pipeline, for downstream processing at Aux Sable U.S.'s Channahon Facility. The Septimus Pipeline is 100 percent owned by Aux Sable Canada and has a capacity of approximately 350 MMcf/d.

*Customers and Commercial Structure*

Pembina's gas services assets have approximately 80 customers, including independent producers as well as multinational oil and gas companies. Pembina processes customers' natural gas at PGI's Cutbank Complex, Saturn Complex, Resthaven Facility, Duvernay Complex, Dawson Assets, Hythe Gas Plant, Steeprock Gas Plant, K3 Plant, KA Plant, Patterson Creek, and the Wapiti Plant. The processed natural gas is delivered to Enbridge's T-North system in British Columbia, NOVA Gas Transmission Ltd.'s pipeline system, the Alliance Pipeline system, and the Coastal GasLink Pipeline. The processed NGL are delivered to Pembina's Peace Pipeline and Northern Pipeline systems, Brazeau Pipeline, and the NEBC Pipelines.

The commercial structure underpinning Pembina's gas services assets is primarily fee-based and therefore Pembina is largely protected from fluctuations in the price of natural gas and NGL. The liquids handling, gathering and processing business is based on charging fees to customers on the volume of raw or processed gas that is gathered and/or processed through its facilities and the fees are largely based on a fixed-fee-for-service methodology and, in some instances, based on fixed return on invested capital. The fee-for-service contracts associated with certain PGI assets comprise a mixture of firm, take-or-pay and interruptible service contracts of varying durations. The contractual fee structure incorporates a capital fee based on functional unit usage, as well as provisions for the recovery of operating and overhead costs. PGI's business is primarily supported by long-term contractual arrangements. In particular:

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• Duvernay I and the associated Duvernay Field Hub connecting the Tony Creek and Fox Creek areas in Alberta are subject to agreements with large and diversified investment grade oil and gas producers and are supported by a combination of fee-for-service, fixed return and take-or-pay arrangements. The Duvernay II, Duvernay III and Duvernay Sour Gas Treating Facilities are supported by 20-year contracts with a combination of fee-for-service, fixed-return and take-or-pay arrangements.

• The Dawson Assets are supported by fee-for-service agreements with the CRC and Ovintiv, whereby the CRC has committed to use the Dawson Assets on an exclusive basis for a 30-year term within an area of mutual interest.

• The Hythe Gas Plant and Steeprock Gas Plant are supported by a cost of service-agreement and take-or-pay arrangements for the majority of the available capacity of these facilities under 15 to 20-year agreements.

• The Kakwa River Deep Cut Plant is fully contracted with 20-year take-or-pay arrangements.

Under transportation agreements with natural gas shippers on the Alliance Pipeline, Aux Sable U.S. LP has the right to extract NGL from all of the natural gas transported for the durations of the applicable agreements. Aux Sable's financial results are partially included in the Marketing & New Ventures Division, for cash flow derived from commodity sales, and partially included in the Facilities Division, for cash flow derived from fee-based contracts.

Pembina's net share of capacity at Younger and Empress are not under any third-party contracts and are used exclusively by Pembina's marketing business for proprietary volumes.

Gas processing infrastructure requirements are largely driven by area profitability and resource inventory, which is impacted by commodity prices, and producers' ability to access capital. When gas prices are relatively low and NGL prices are relatively high, producers are incentivized to extract as much NGL out of the raw gas stream as possible. When NGL prices are lower, producers may opt to leave more liquids entrenched within their raw gas. Pembina has the flexibility to offer facilities with varying degrees of liquids extraction capability to support customers in a variety of market conditions.

Gas processing is part of an integrated value chain, whereby Pembina's gas processing assets separate crude oil and condensate, process sweet and sour gas, and extract NGLs from the gas, and gas can be transported by Pembina to the Chicago, Illinois area. The extracted liquids are transported through Pembina's conventional pipelines to its CDH, ENT, Edmonton Terminals and fractionation complexes, where Pembina is able to market the products to end users.

Pembina's NGL service assets provide a multitude of services for its customers. It is common practice for customers to sign up for more than one service with Pembina, including fractionation, storage, loading and off-loading.

At the Redwater Complex, Pembina provides NGL fractionation, storage and terminalling (loading and off-loading) services. NGL fractionation services at the Redwater Complex are provided under predominantly multi-year, take-or-pay contracts. Pembina also provides third-party terminalling services at the Redwater Complex for the Sturgeon Refinery, which is operated by the Northwest Redwater Limited Partnership under a long-term fixed-return agreement.

Through its East NGL System, Pembina provides NGL fractionation, storage and terminalling (loading and off-loading) services in Superior, Wisconsin and Sarnia, Ontario primarily on an interruptible, fee-for-service basis to Pembina's Marketing & New Ventures Division. Pembina also provides storage and terminalling services in Corunna, Ontario on both fee-for-service and fixed-return agreements, on an annual and multi-year basis, to third-party customers and Pembina's Marketing & New Ventures Division.

The Prince Rupert Terminal provides export of propane produced in western Canada for delivery into international propane markets. The terminal primarily provides service on a fee-for-service basis to Pembina's Marketing & New Ventures Division and their customers.

Vancouver Wharves capacity is contracted under long-term, take-or-pay terminal service agreements. Some of Pembina's major long-term contracts at Vancouver Wharves are extendible.

*Competition*

Pembina's gas services assets are subject to competition from other gas processors or producer-owned infrastructure. These alternative options are either in the general vicinity of Pembina's facilities, or have gathering systems that extend, or could

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potentially extend, into areas served by these facilities. Going forward, the demand for additional processing infrastructure will be determined primarily by the rate at which the WCSB gas production grows. Pembina's competitive advantage stems from its integrated value chain, which allows gathering and processing facilities, including through PGI facilities, to become part of a wellhead-to-market infrastructure solution, benefiting from seamless commercial alignment.

Pembina's NGL services assets are subject to competition from other fractionators, truck terminals, rail services, storage facilities, and export terminals, which are either in the general vicinity of Pembina's facilities or have gathering systems that extend, or could potentially extend, into areas served by Pembina's facilities. Going forward, it is expected that demand for additional infrastructure will be determined primarily by the rate at which the WCSB hydrocarbon production grows.

Vancouver Wharves is subject to competition from significantly smaller distillates facilities in the area. There are various new competitive grain terminals that could increase competitive pressures on Vancouver Wharves' grain business. For sulphur and mineral concentrates, Vancouver Wharves enjoys a distinct advantage as it is one of only a few facilities on the west coast of North America that is currently permitted to handle these commodities.

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**Marketing & New Ventures Division**

*Overview* 

The Marketing & New Ventures Division leverages Pembina's integrated value chain and existing network of pipelines, facilities, and energy infrastructure assets to maximize the value of hydrocarbon liquids and natural gas originating in the basins where the Company operates. Pembina pursues the creation of new markets, and further enhances existing markets, to support both the Company's and its customers' business interests. In particular, Pembina seeks to identify opportunities to connect hydrocarbon production to new demand locations through the development of infrastructure. The division also focuses on developing new business platforms and undertaking initiatives that seek to reduce the GHG emissions of Pembina's and its customers' operations.

*Marketing Activities*

Within the Marketing & New Ventures Division, Pembina undertakes value-added commodity marketing activities, including buying and selling products (natural gas, ethane, propane, butane, condensate, crude oil, electricity and carbon credits), commodity arbitrage, and optimizing storage opportunities. The marketing business enters into contracts for capacity on both Pembina's and third-party infrastructure, handles proprietary and customer volumes and aggregates production for onward sale. Through this infrastructure capacity, including Pembina's Prince Rupert Terminal and 30,000 bpd of export capacity secured at AltaGas' Ridley Island facilities, as well as utilizing the Company's expansive rail fleet and logistics capabilities, Pembina's marketing business adds incremental value to the commodities by accessing high value markets across North America and globally.

The Marketing & New Ventures Division also enters into power purchase agreements for renewable power, thus reducing Pembina's or its customers' GHG emissions.

The value potential associated with Pembina's marketing business is dependent upon, among other things, Pembina's ability to: access supply of hydrocarbons; access connections to both downstream pipelines and end-use markets; understand the value of the commodities transported, stored and terminalled; provide flexibility and a variety of storage options; and adjust to a liquid, responsive, forward commodity market. Pembina actively monitors market conditions and commodity stream values and qualities to target revenue opportunities and service offerings. Pembina is also proactively working with upstream and downstream customers to develop value-added terminalling solutions and increase available optionality.

Financial and operational results in the marketing business are subject to commodity price fluctuations, product price differentials, location basis differentials, foreign exchange rates and volumes. The prices of products that are marketed by Pembina are subject to volatility as a result of these factors and other considerations including seasonal demand changes, weather conditions, general economic conditions, changes in crude oil, NGL, natural gas and electricity markets and other factors. See "*Risk Factors – Risks Inherent in Pembina's Business – Commodity Price and Volume Risk*".

Aux Sable's financial results are partially included in the Marketing & New Ventures Division, for cash flow derived from commodity sales, and partially included in the Facilities Division, for cash flow derived from fee-based contracts.

Customers within Pembina's marketing business are generally those who produce, consume and/or market crude oil, condensate, NGL, natural gas and electricity, are downstream markets for those products, or are interested in ancillary services related to those products. Customers within the crude oil and condensate marketing business include shippers transacting with Pembina's Pipeline Division, other upstream producers, and companies that market crude oil and condensate. Customers within the NGL marketing business include those transacting with Pembina's Facilities Division, as well as other downstream companies that either consume NGL for production in various industries, such as petrochemicals and agriculture, or market NGL to end consumers. Customers within the natural gas marketing business include companies that purchase natural gas off the Alliance Pipeline and companies that supply natural gas to fill straddle facilities.

The contractual arrangements associated with Pembina's marketing business vary by service offering.

*New Ventures*

The Marketing & New Ventures Division is also responsible for the development of new large-scale, or value chain extending projects, including those that provide enhanced access to global markets and support a transition to a lower-carbon economy.

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Currently, Pembina is pursuing opportunities associated with LNG, natural gas-fired power generation, and large-scale GHG emissions reductions.

<u>Cedar LNG</u> 

Cedar LNG has secured a 20-year take-or-pay, fixed toll contract with ARC Resources Ltd. ("**ARC**") for 1.5 mtpa of LNG. As part of the arrangement with ARC, ARC will supply Cedar LNG with approximately 200 MMcf/d of natural gas to be transported via the Coastal GasLink Pipeline from its production base in the Montney. Pembina also entered into an agreement with Cedar LNG for 1.5 mtpa of capacity on the same terms as ARC with the intention to recontract this capacity to third-parties at a later date. In the fourth quarter of 2025, Pembina announced a 20-year, 1.0 mtpa, take-or-pay agreement with PETRONAS, and a 12-year, 0.5 mtpa, take-or-pay agreement with Ovintiv for liquefaction capacity at Cedar LNG, which completed Pembina's recontracting efforts for the 1.5 mtpa of capacity.

The Cedar LNG Project has an estimated cost of approximately US$3.4 billion (gross), including US$2.3 billion (gross), or approximately 70 percent of the estimated cost, for the floating LNG production unit, which is being constructed under a fixed-price, lump-sum agreement with Samsung Heavy Industries and Black & Veatch, and US$1.1 billion (gross) related to onshore infrastructure, owner's costs, commissioning and start-up costs, financial assurances during construction, and other costs. The total cost of the Cedar LNG Project, including approximately US$0.6 billion (gross) of interest during construction and transaction costs, is expected to be approximately US$4.0 billion (gross). The anticipated in-service date of the Cedar LNG Project is in late 2028.

<u>Greenlight Electricity Centre</u>

Pembina, and its partner Kineticor Holdings LP#3, a subsidiary of OPSEU Pension Trust, continue to make significant progress towards the commercialization of the proposed Greenlight Project. The Greenlight Project is a proposed multi-phased natural gas-fired combined cycle power generation facility, to be located in Sturgeon County, Alberta, with a capacity of up to approximately 1,800 megawatts designed to advance Alberta's innovation economy. The partners continue to progress towards a final investment decision in the first half of 2026. Greenlight represents an extension of Pembina's existing value chain and an opportunity to enhance growth by investing in long-term contracted infrastructure with an investment grade counterparty, while diversifying its customer base. Greenlight would also create incremental demand for natural gas and associated liquids production within western Canada. Pembina is well positioned to leverage the assets and capabilities of its current core business to further support the project and serve customer demand for gas egress and liquids handling and transportation.

<u>Alberta Carbon</u> <u>Grid</u> 

Pembina and TC Energy have formed a partnership to develop a carbon transportation and sequestration platform ("**Alberta Carbon Grid**"). Alberta Carbon Grid completed the appraisal well drilling, logging and testing, with well data that was incorporated into a detailed subsurface model confirming the sequestration capability. Alberta Carbon Grid continues commercial conversations with potential customers and refining the project scope.

*Competition*

Pembina's marketing activities operate in a highly competitive, largely undifferentiated market, where numerous parties including midstream companies, integrated producers, refiners, and trading firms offer similar NGL, crude oil, and natural gas logistics and marketing services. Because these services are standardized, competitors frequently match Pembina on price, efficiency, and commercial terms. Competition is primarily driven by access to supply, pipeline and storage connectivity, and fractionation capacity, with major midstream operators and others competing for similar volumes and market outlets. Broad market dynamics, including commodity price volatility and regional production trends, continue to influence margin opportunities and intensify competition as companies seek to secure supply and optimize logistics. While Pembina's

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integrated value chain provides strategic advantages, competition for contracts, supply access, and customer relationships remains significant and ongoing across all marketing streams.

In its New Ventures division, Pembina faces evolving competitive dynamics in the global LNG sector. Pembina competes with other North American LNG projects for capital investment, natural gas supply, and long-term offtake agreements, seeking to leverage the shipping distance advantages of its West Coast assets. Pembina is evaluating opportunities to supply and develop contracted power generation for growing industrial demand in Alberta, including potential innovation centre infrastructure. Competition for these infrastructure opportunities is similarly intense and jurisdiction driven, with Alberta leveraging its comparative strength of competitive regulatory and economic environments versus other North American regions.

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**Seasonality**

Pembina's businesses are affected by seasonality in the following ways:

• Construction and operational maintenance activities may vary seasonally. In western Canada, site access and ground conditions can be impacted by spring melting, and, as a result, for conventional pipeline assets Pembina typically experiences higher pipeline maintenance and integrity spending in the first and fourth quarters of the year. Labour productivity may be negatively impacted by seasonal weather conditions including extreme temperatures in the winter.

• Conventional feeder pipelines and gathering systems generally experience lower volumes during the spring months as a result of reduced drilling primarily due to weight restrictions on roads, producers conducting maintenance on their batteries and gas plant turnarounds. The magnitude and duration of road weight restrictions are dependent upon spring weather conditions. Many battery operators also perform maintenance work on production facilities during the spring months. Road restrictions, and battery and facility maintenance can also impact gathering pipeline receipts during the fall months, although the impact on throughput is generally less pronounced than during the spring months. Similar seasonality impacts are experienced upstream of the pipelines at Pembina's gas processing facilities.

• Volumes transported on the Alliance Pipeline and volumes processed at gas processing facilities are generally higher during winter months as gas compression is more efficient in cold weather and there is, therefore, increased availability to flow interruptible volumes in the winter months, subject to customer demand for the service.

• The financial performance of Pembina's marketing business can be affected by seasonal demands for products and other market factors. Propane inventory in western Canada generally builds over the second and third quarters of the year and is sold in the fourth quarter and the first quarter of the following year during the winter heating season. Condensate, butane and ethane are generally sold ratably throughout the year. See "*Risk Factors – Risks Inherent in Pembina's Business – Commodity Price and Volume Risk*".

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**OTHER INFORMATION RELATING TO PEMBINA'S BUSINESS**

**Operational Excellence Management System**

Pembina is committed to operational excellence, which means placing the highest value on the health and safety of its workforce and communities, and safeguarding its assets and the environment. One of the ways in which Pembina delivers this is through its Operational Excellence Management System ("**OEMS**") by applying risk management, processes, procedures and accountabilities to document a consistent approach to the way it operates. Pembina's OEMS provides a framework for the design, development, and implementation of a comprehensive suite of programs, standards, processes, procedures, and tools that guide operating activities. The OEMS also supports continuous improvement of operational activities through the Plan-Do-Check-Act cycle. The OEMS is designed to anticipate, prevent, manage and mitigate conditions that may adversely affect the safety and security of Pembina's employees, the public, the environment, and its infrastructure assets while also serving as a means to demonstrate compliance with government regulations and alignment with Pembina's corporate policies.

As outlined below, the OEMS includes a number of individual programs intended to drive safety, reliability, efficiency, cost-effectiveness and the continuous improvement of the Company's operational performance. Pembina's Quality Assurance Program includes certain processes to systematically and independently verify that these individual programs are established and are working effectively, while also promoting continuous improvement through the identification of opportunities to implement and communicate lessons learned.

![pembina-oms_sustainability.jpg](pembina-oms_sustainability.jpg)

Operational improvements, findings and industry changes are assessed, risked and prioritized, with corrective and preventative actions identified and implemented using the Plan-Do-Check-Act cycle. These actions are underpinned by goals and objectives with delivery monitored against targets through assurance and management reviews. OEMS contains expectations that guide work conducted through the asset lifecycle, ensuring Pembina's projects are designed, constructed, operated and decommissioned or abandoned in a manner that considers the safety and security of the public, Pembina personnel and physical assets, and the protection of property and the environment. Each of the OEMS programs is described more fully in the sections below.

*Asset Integrity Management Program*

Pembina employs comprehensive asset integrity management programs and dedicates a significant portion of its annual operating budget directly to integrity management activities. Pembina's integrity management programs include the systems, processes, analysis and documentation designed to ensure proactive and transparent management of its pipeline systems and facilities, in compliance with applicable standards and regulations.

Pembina's asset integrity management programs incorporate industry best practices and are designed to meet or exceed regulatory requirements with the goal of achieving enhanced safety, reliability and longevity of the Company's assets.

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Integrity management begins at the engineering and design phase. Pembina has a robust set of engineering and design specifications to ensure learnings and best practices are captured and consistently applied to future projects. At the early stages of building a new pipeline, Pembina ensures that pipeline routes are chosen to avoid geologically unstable or high consequence areas and to minimize environmental impact. To further mitigate the risk and impact of an incident, Pembina designs its pipelines so they can be safely shut down and segments can be isolated by installing block valves at strategic intervals along the system. Where appropriate, Pembina takes extra safety precautions, such as increasing pipe wall thickness or depth-of-cover, to help mitigate risks. In addition, when it comes to choosing materials for new construction, Pembina uses steel pipe and other products that have been manufactured to meet or exceed applicable regulatory specifications and industry standards. As part of the design of facilities, impacts to existing infrastructure are identified and mitigation measures established as part of the process hazard assessment process. The outcome is that lifecycle costs are minimized, while assuring safe, reliable and compliant operation.

Proactive pipeline integrity management activities extend into operations through programs, including right-of-way patrols and public awareness to reduce the likelihood of third-party damage, system-specific hazard evaluations and risk assessments, geotechnical programs to manage slope instability and river crossings, the use of specific chemicals to reduce the likelihood of internal corrosion from impurities and bacteria in the oil, cathodic protection to mitigate the possible growth of external corrosion, training and competency management programs for staff and contractors, and enhanced emergency response procedures and training exercises.

Pembina's facility integrity management program is based on best-in-class industry practices and codes that ensure process safety, asset reliability and regulatory requirements are met. It includes operations rounds and surveillance, process condition monitoring, maintenance programs for equipment and protective control systems, inspection and repair programs for piping, pressure vessels, pressure relief devices, and tanks, training and competency management programs for staff and contractors. Pembina applies a continuous improvement approach to its facility integrity practices including the application of risk-based inspection methodologies on applicable facilities that will make integrity management more proactive and predictive.

Pembina plans and executes scheduled turnarounds and outages at its gas processing, fractionation and pipeline facilities to complete required maintenance and inspection of pressure equipment, tanks, piping and pressure relieving devices. By using data collected through Pembina's facility integrity program, the Company can provide safe, reliable and cost-effective operation of its facilities – to the benefit of Pembina's customers and Shareholders.

*Emergency & Continuity Management Program*

Pembina is committed to anticipating, responding to, and recovering from unplanned disruptive events, ensuring the ongoing safety and operational integrity of Pembina's assets, the environment, and the safety of workers and the public.

To uphold this commitment, Pembina's Emergency & Continuity Management Program ("**ECMP**") was established to plan, prepare, respond, and recover from emergencies, a crisis, or disaster. This program reflects Pembina's proactive approach to safeguarding people, protecting the environment, and maintaining business continuity under all circumstances. Furthermore, the ECMP addresses regulatory expectations and industry standards for:

• conducting hazard assessments;

• developing emergency management plans;

• facilitating emergency response exercises;

• delivering emergency management training to personnel;

• conducting community awareness activities;

• facilitating first responder engagement sessions; and

• participating in mutual aid associations or industry groups.

Pembina's ECMP is made up of the following four core components:

1.**Prevention and Mitigation.** Defines actions taken by Pembina to identify and reduce the risks of hazards before an emergency occurs.

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2.**Preparedness.** Ensures that Pembina has the capacity to respond effectively and rapidly when people, the environment, or property will be, or are, affected by hazards. Preparedness ensures that the necessary plans and resources are in place and practiced.

3.**Response.** Defines the actions to be taken to minimize the impact on people, the environment or property, and the impacts to customers, with an emphasis on prevention of injury and loss of life.

4.**Recovery.** Ensures actions taken following an emergency restore and repair infrastructure and services to the level of pre-emergency function. Recovery programs and activities should ensure that resources (personnel and assets) are replaced/replenished/debriefed and that the response is reviewed as part of a continuous improvement process.

*Security Management Program*

Pembina is committed to anticipating, preventing, managing, and mitigating security threats and associated risks that could affect people, information, property, or the environment.

To uphold this commitment, Pembina's Security Management Program ("**SMP**") is established to identify, protect, detect, respond to, and recover from security risks. The SMP uses a risk-based management system approach consisting of five concurrent and continuous functions:

1.**Identify.** The Identify function is foundational to understanding the business context, the resources that support critical functions, and the related security risks to Pembina to focus and prioritize its efforts, consistent with its risk management strategy and business needs.

2.**Protect.** The Protect function supports the ability to limit or contain the impact of a potential security event.

3.**Detect.** The Detect function enables timely discovery of security events.

4.**Respond.** The Respond function supports the ability to contain the impact of potential security events.

5.**Recover.** The Recover function supports timely recovery to normal operations to reduce the impact from security events.

*Safety Management Program* 

Pembina's Safety Management Program is aligned with its HSE Policy and other programs that form Pembina's OEMS. It employs a systematic approach comprised of principles, standards, procedures, guidelines, and other supporting documents. To support the Safety Management Program, Pembina has established life saving rules and safety culture expectations applicable to all personnel and Pembina activities to ensure critical safety risks are managed effectively. The Company's corporate safety culture of "Zero by Choice" seeks to minimize incidents, and Pembina believes its employees and contractors can achieve this by recognizing that "Safety Starts with Me".

The Safety Management Program is designed to drive continuous improvement and enhance safety performance through measurement and risk management. Pembina uses leading and lagging metrics, incident reporting, audits and other assurance tools as inputs from the Safety Management Program to identify continuous improvement opportunities. Pembina has built a strong reporting culture, enabling it to investigate and learn from incidents and near misses.

In addition, Pembina has a comprehensive approach to process safety and a management of change system is in place to confirm that changes to existing and future facilities are properly recognized, evaluated and managed to confirm that health, safety, security, operational and environmental risks arising from these changes remain at acceptable levels. Pembina uses process hazard analysis, which is a formal risk assessment method that identifies potential hazards and assesses the adequacy of existing or proposed safeguards to manage the risks of its operations.

To promote and measure safety performance, Pembina uses a comprehensive, balanced scorecard that includes both leading and lagging metrics. Leading metrics on this scorecard include leadership visibility in the field, positive safety recognitions, contractor inspections and recognizing when personnel stop work due to unsafe conditions. These metrics drive proactive cultural behaviours by leaders, employees and contractors to sustain and improve the Company's safety performance. The scorecard also includes traditional lagging metrics such as total recordable injury frequency, serious injuries or fatalities, potential serious injuries and fatalities, environmental releases, vehicle incidents and product releases classified as Tier 1

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process safety events. These leading and lagging safety performance metrics are also one of the factors used to determine executive and other employee short-term incentive plan payments.

To support a learning culture, an incident review panel meets every other month to review selected incidents to identify and share investigation root causes, lessons learned and track corrective actions. Participants in the incident review panel include the executive team, operations and project leaders and safety specialists.

*Environment Management Program* 

Pembina's assets are subject to environmental regulation. The Company must comply with applicable federal, provincial, state and local laws and regulations in Canada and the U.S. Such laws and regulations govern, among other things, construction, operating and maintenance standards, management and control of emissions and waste discharge and protection of aquatic and terrestrial wildlife and habitat. Management expects that Pembina's facilities and operations meet or exceed those requirements. Pembina participates in the following applicable regulated emissions reporting programs: Canadian Greenhouse Gas Reporting Program, Canadian National Pollutant Release Inventory Reporting, Alberta Specified Gas Reporting Regulation, Alberta's *Technology Innovation and Emissions Reduction Regulation* ("**TIER**"), British Columbia Greenhouse Gas Emission Reporting Regulation, Saskatchewan Management and Reduction of Greenhouse Gases (Reporting) Regulation, and U.S. EPA Greenhouse Gas Report, as well as other provincial and state air quality reporting requirements under asset-specific approval conditions.

Pembina has implemented an Environment Management Program, which provides guidance on regulatory requirements and Pembina's commitment to environmental protection for all phases in the lifecycle of an asset: project planning, construction, operation, decommissioning, and reclamation.

Pembina's focus on integrity management and safe operations continues to result in low incident frequency and minimal environmental impact. Each year, to manage environmental liability, Pembina invests in the remediation and reclamation of spill sites, thereby reducing Pembina's environmental liabilities. In addition to the environmental expenses associated with its operations, Pembina also invests in environmental assessment, planning, permitting and post-construction monitoring and reclamation associated with the Company's capital projects.

Pembina is committed to reducing the GHG emissions intensity of its businesses. Pembina has developed a GHG emissions intensity reduction target of reducing its GHG emissions intensity by 30 percent by 2030, relative to 2019 baseline emissions, incorporated ESG metrics into short-term incentive compensation metrics, and developed strategies to address the transition to lower-carbon energy resources. The GHG reduction target will help guide business decisions and improve overall emissions intensity performance, while increasing Pembina's long-term value, and ensuring Canadian energy is developed and delivered responsibly. To meet the target, Pembina will focus on operational efficiency and modernization, greater use of renewable and lower emission energy sources, and investments in a lower-carbon economy.

Pembina's 2024 Sustainability Report details Pembina's environmental performance and commitment to continuous improvement, transparency and engagement as it continues to further integrate sustainable business practices throughout the Company. The 2024 Sustainability Report is available at www.pembina.com/sustainability.

*Damage Prevention and Public Awareness Programs*

Working safely around pipelines and preventing damage to Pembina owned and operated pipelines, facilities and associated infrastructure is in the best interest of all of Pembina's stakeholders. Pipeline infrastructure is often buried underground and, as a result, preventing pipeline damage depends on operators, the public and stakeholders working together to be aware of the dangers and taking appropriate actions to prevent the risk of damage. Pembina's Damage Prevention and Public Awareness Programs are dedicated to worker safety, public safety, protection of the environment and the preservation of the integrity of the Company's infrastructure. These programs have been developed to meet or exceed the regulatory requirements for Damage Prevention and Awareness Programs in the areas Pembina operates.

Pembina is committed to establishing meaningful and open communications with those who live and work around the Company's underground infrastructure to increase the awareness of the presence of Pembina's underground infrastructure and their requirements for how to work safely in the vicinity of the Company's pipelines.

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*Operations and Maintenance Program*

As part of Pembina's commitment to safe and reliable operations that ensure the protection of its people and the environment, Pembina personnel must adhere to the day-to-day operations and maintenance requirements as set out in the Operations and Maintenance Program. The Operations and Maintenance Program includes Pembina's operator qualification program, maintenance expectations, and how assets are operated.

<u>Operator Qualification Program</u>

Pembina's Operator Qualification Programs for the United States operation of the Alliance Pipeline, Vantage Pipeline, Cochin Pipeline and Aux Sable assets are in place in accordance with the PHMSA Operator Qualification Rule, and are intended to ensure that Pembina's operations and maintenance staff are trained and qualified to perform their duties safely and effectively.

The Operator Qualification Programs establish the procedures, requirements and responsibilities for qualifying personnel and any other individuals who perform "Covered Tasks" at any facilities for which Pembina is responsible. These procedures have been developed to ensure compliance with 49 CFR Part 192, Subpart N and 49 CFR 195 Subpart G (known as the "**OQ Rule**"). The Operator Qualification Programs apply to all applicable Pembina personnel and any applicable subsidiary personnel, contractor personnel, subcontractor personnel and personnel of all other Pembina related entities who perform "Covered Tasks" on the U.S. segments of the Aux Sable, Vantage Pipeline, Cochin Pipeline or Alliance Pipeline assets. All personnel who perform "Covered Tasks" in relation to these assets must be qualified in accordance with the Operator Qualification Programs.

<u>Training, Mentorship and Qualification</u> 

In Canada, Pembina's training, mentorship and qualification program ("**TMQ**") is a technical competency framework designed specifically for operations roles in Pembina's processing and pipelines businesses. The program ensures technical competence through standardized training, on the job mentorship, and formal evaluation. TMQ ensures employees are equipped with the technical knowledge, skills, and internal qualifications necessary to operate Pembina's assets safely and effectively.

<u>Preventative Maintenance Management Tool</u>

Pembina's SAP-based preventative maintenance management tool ("**PMM**") was implemented for all of Pembina's legacy assets in 2018 and for the assets acquired in connection with the transaction with KKR to combine their respective western Canadian natural gas processing assets into PGI in 2023. In 2024, Pembina completed the implementation of PMM on the assets acquired in connection with the Alliance/Aux Sable Acquisition. The objective of PMM is to ensure safe, consistent and efficient asset management and maintenance. PMM is a key component of Pembina's OEMS and a driver of safe and efficient asset management and operation.

<u>Pipeline Control Room Management Program</u>

Pembina has a Pipeline Control Room Management Program in place to ensure that the Company's pipeline systems are operated safely and reliably. As part of the Pipeline Control Room Management Program, Pembina employs modern supervisory control and data acquisition ("**SCADA**") technology on the majority of its pipeline systems. The SCADA systems allow for continuous electronic monitoring and control of the pipeline systems from dedicated computer consoles located in Pembina's control centre in Sherwood Park, Alberta and Alliance's Gas Control Centre in Calgary, Alberta. Operators monitor the computer consoles 24 hours per day, 365 days per year. The SCADA systems and associated leak detection software continually monitor pipeline flow and operating conditions. Line balance calculations are performed automatically by the system and alarms are triggered when imbalances are detected. When imbalance alarms are triggered, trained control centre operators investigate the alarm or shut down the pipeline in accordance with Pembina's Segment Imbalance Response Protocol.

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**Industry Regulation** 

Pembina's assets are subject to oversight by various regulatory bodies, including, but not limited to, the AER, AUC, AEPA, BCER, BCMOE, BCUC, BCEAO, CER, ECCC, the Illinois Environmental Protection Agency, the U.S. EPA, PHMSA and the FERC.

*AER and AUC*

The AER regulates, among other things, the construction, operation, discontinuation and abandonment of non-utility pipelines, associated installations and gas processing plants in Alberta pursuant to the *Pipeline Act* (Alberta), the *Oil and Gas Conservation Act* (Alberta) and the *Responsible Energy Development Act* (Alberta). A licence from the AER is necessary to construct and operate a pipeline, associated installations or a gas processing plant within Alberta. The AER may impose conditions on such a licence. When making decisions on these kinds of regulatory matters, the AER considers the social and economic effects of the proposed activities, effects on the environment, and potential impacts on directly and adversely impacted landowners and Indigenous communities. Environmental and water protection regulations are also administered or considered by the AER.

With respect to toll-regulation in Alberta, once a licence to construct a pipeline or a gas processing plant is issued by the AER, subject to regulatory intervention, the pipeline or gas processing plant is free to establish tolls or prices in a competitive market environment. Tolls or prices are established under contracts of varying terms and conditions and for pipelines are also posted by location for non-firm (interruptible) service. Posted pipeline tolls which are applied to non-firm volumes can generally be adjusted to respond to changing volumes, costs and market circumstances. Contracted pipeline tolls on firm contracts can also be adjusted, where permitted by the terms of the contract, for such things as changes in the consumer price index, changes in power costs, extraordinary natural events that impact pipeline integrity and changes to regulations associated with pipelines. On application, an AER-regulated pipeline or gas processing plant may be declared a common carrier or common processor. Common carriers or processors must provide access and may not discriminate between customers. Where a pipeline or processing plant has been declared a common carrier or processor, customers also have recourse to the AUC with respect to tariff or price matters.

Pembina is subject to regulation by the AER under the AER's liability management framework. Since 2021, the AER has been in the process of phasing-out its former liability management regime, which included the LLR Program and LMR. In February 2025, the AER announced amendments to the *Oil and Gas Conservation Rules, Pipeline Rules* and various AER Directives to formally eliminate the LMR and LLR.

AER Directive 088: Licensee Life-cycle Management ("**Directive 088**") came into force on December 1, 2021. Directive 088 institutes a holistic assessment regime with several different regulatory tools not limited to the current use of security deposits. The new holistic liability management framework includes Licencee Capability Assessments (which replaces the LLR Program), Licensee Special Actions, a process to address legacy and post-closure sites and an expanded mandate of the Orphan Well Association. The new regime, which applies to licence transfers, also includes the Inventory Reduction Program. Under the Inventory Reduction Program, which became effective on January 1, 2022, all licencees that have liability associated with inactive infrastructure are required to spend a specified amount each year on reclamation activities or post equivalent security with the AER. The specified amount is calculated based on a licencee's proportion of the total industry inactive liability and financial health.

The AER also regulates, in conjunction with AEPA, airborne emissions from energy resource activities including oil and gas pipelines and processing plants. The AER's authority includes regulation of methane emissions in the upstream oil and gas sector, pursuant to the *Methane Emission Reduction Regulation* and Directives 060 and 017.

*AEPA*

Comprehensive GHG emissions regulations for industrial facilities in Alberta, including oil and gas facilities, are administered by AEPA under TIER.

*BCEAO* 

Major projects are subject to an environmental assessment as described in the *Reviewable Projects Regulation* ("**RPR**") in B.C. The RPR identifies activities that may have significant adverse effects and sets criteria for an environmental assessment. Reviewable projects need an environmental assessment certificate before they can be constructed. Pembina prepares annual environmental and stakeholder engagement reports for assets that have been subject to an environmental assessment.

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*BCMOE* 

BCMOE regulates water and waste discharges and operations at the Vancouver Wharves facility and manages permit compliance obligations including monitoring, reporting, and inspections.

*BCER*

The construction, operation and abandonment of non-utility oil and gas pipelines and associated installations and facilities in B.C. is regulated by the BCER pursuant to the *Energy Resource Activities Act* (British Columbia). A permit from the BCER is required to construct or operate a pipeline or associated installations or facilities. The BCER may impose any conditions it considers necessary on such a permit. Decisions by the BCER must, among other things, provide for the sound development of the oil and gas sector by fostering a healthy environment, a sound economy and social well-being; and ensure safe and efficient practices. The BCER also has a mandate to encourage the participation of Indigenous peoples in regulatory processes affecting them.

The BCER administers methane emissions regulations in B.C., under the *Drilling and Production Regulation* and the *Energy Resource Activities Act* (British Columbia), which address methane emissions in the upstream oil and gas sector. The BCER is also responsible for ensuring the proper cleanup, reclamation and restoration of oil and gas infrastructure sites, and the management of liability associated with such sites pursuant to the Permittee Capability Assessment program discussed under "*Environmental Costs and Liabilities*" below.

The BCER administers the *Dormancy and Shutdown Regulation* ("**DSR**"). The DSR establishes timelines for decommissioning and restoration of deactivated assets and sites. The DSR also sets notification and follow-up obligations to ensure companies communicate regularly with interested persons about the specified work to decommission, assess or restore dormant and former sites.

*BCUC* 

The tolls on certain B.C. pipelines are rate-regulated by the BCUC. The BCUC approves tolls that may be charged by common carriers and regulates other tolls on a complaint basis.

*CER*

Pursuant to the *Canadian Energy Regulator Act* (the "**CER Act**"), the CER administers authorizations for the export of oil and regulates interprovincial and international pipelines including: their construction and operation; traffic, tolls and tariffs; liabilities for unintended or uncontrolled releases; and the pipeline company's financial requirements. A certificate or order issued under the CER Act is required for the construction and operation of such interprovincial or international pipelines. When considering an application for a certificate or order, the CER has a broad "public interest" mandate and must facilitate and consider Indigenous participation in the regulatory process prior to making a recommendation to the Minister of Energy and Natural Resources. CER Act certificates may be subject to any conditions which are necessary or in the "public interest". Interprovincial and international pipelines may also be subject to impact assessment under the *Impact Assessment Act* (Canada) (the "**IAA**") as part of the certificate process.

Under the CER Act and regulations, companies that own and/or operate CER-regulated pipelines are divided into two groups for regulation of tolls and tariffs. Group 1 consists of the major pipeline companies which are subject to enhanced regulatory oversight by the CER. The other pipeline companies under the jurisdiction of the CER, not included in Group 1, have been classified as Group 2. The Canadian segments of the Alliance Pipeline and the Cochin Pipeline are classified as Group 1, though the tolls on the Cochin Pipeline have been regulated on a complaint basis since 1986. Pembina's other CER-regulated pipelines are classified as Group 2 by the CER. For these Group 2 pipeline systems, if no complaint is filed, the CER may presume that the filed tariffs are just and reasonable. The Northwest Pipeline, the Taylor-to-Belloy Pipeline, the Pouce Coupé Pipeline and the Pouce Coupé lateral, all licensed by Pembina's wholly-owned subsidiary Pouce Coupé Pipe Line Ltd., are regulated by the CER. Pembina's Taylor-to-Boundary Lake Pipeline, which is owned by Pembina Energy Services Inc., Pembina's Vantage Pipeline, which is owned by Pembina Prairie Facilities Ltd., and Pembina's Empress Pipeline, which is owned by Veresen NGL Pipeline Inc., all wholly-owned subsidiaries of Pembina, are also regulated by the CER. The four pipelines collectively referred to as the "Tupper Pipelines", licensed by Veresen Energy Pipeline Inc., and 60 percent owned by Pembina, are also regulated by the CER. The Kerrobert pipeline is regulated by the CER but is not operated by Pembina.

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Pembina maintains a minimum of $1,070 million in financial resources to meet the absolute liability limit requirements in the CER Act and *Pipeline Financial Requirements Regulations*. The CER requires the Company to maintain these financial resources and readily accessible funds in specific types of financial instruments.

The CER also regulates the abandonment of interprovincial and international pipelines. The CER requires all CER-regulated pipeline companies to set funds (known as abandonment funds) aside to fund future abandonment work. Each pipeline has an abandonment fund and the size of a particular abandonment fund depends on the abandonment cost estimate of the pipeline. The CER reviews and updates abandonment cost estimates every five years to ensure accuracy. Companies must contribute a set annual abandonment contribution to their abandonment fund, which is collected by the applicable company through an abandonment surcharge on tolls.

*ECCC*

ECCC is responsible for administering the federal GHG pricing regulations under the *Greenhouse Gas Pollution Pricing Act* (Canada) ("**GGPPA**"), *Clean Electricity Regulations*, and other federal emissions reduction regulations, including methane emissions regulations applicable outside British Columbia, Alberta and Saskatchewan under the Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector). ECCC is also responsible for international agreements on airborne emissions.

*Illinois Environmental Protection Agency*

The Illinois Environmental Protection Agency regulates environmental quality in Illinois. The agency is responsible for equivalent environmental compliance and permitting roles as seen with the agencies/departments listed above. The agency also supervises solid and hazardous waste management, water quality, and environmental cleanup initiatives.

*U.S. EPA*

The U.S. EPA conducts environmental assessment, research, and education. It has the responsibility of maintaining and enforcing national standards under a variety of environmental laws, in consultation with state, tribal, and local governments. The U.S. EPA's enforcement powers include fines, sanctions, and other measures. It delegates some permitting, monitoring, and enforcement responsibility to U.S. states and to certain federally recognized tribes. The agency also works with industries and all levels of government in a wide variety of voluntary pollution prevention programs and energy conservation efforts.

*PHMSA*

The PHMSA oversees the safe operation and maintenance of interstate oil and gas pipelines under 49 CFR Part 190 – *Pipeline Safety Enforcement and Regulatory Procedures*. The PHMSA's regulation and enforcement programs are designed to ensure that such pipelines are operated safely, reliably and in an environmentally sound manner. These programs are inspection and investigation based and not permit based.

*FERC*

The FERC is an independent U.S. agency that regulates, as relevant to Pembina, interstate natural gas pipelines, and the transportation in interstate commerce of liquid hydrocarbons (crude oil, refined products, and NGL).

The U.S. segments of the Alliance Pipeline are interstate natural gas pipelines subject to FERC jurisdiction under the NGA. A key regulatory principle underlying the FERC's jurisdiction is non-discrimination, such that interstate natural gas pipeline companies are prohibited from granting any undue preference to any person, or unduly discriminating against or in favor of any person, with respect to rates or terms and conditions of service.

FERC jurisdiction under the NGA extends to virtually all commercial aspects of an interstate natural gas pipeline's business, including rates and charges, construction of new facilities, extension or abandonment of service and facilities, accounts and records, depreciation and amortization policies, the acquisition and disposition of facilities, the initiation and discontinuation of services, affiliate relationships and certain other matters. A certificate of public convenience and necessity from the FERC is necessary to construct and operate an interstate natural gas pipeline. The FERC has announced proposals to increase flexibility and expediency to encourage further natural gas infrastructure development. In June 2025, FERC issued two orders to facilitate and expedite construction authorization timelines and raise blanket certification cost limitations for interstate

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natural gas pipeline projects on a temporary basis, along with two orders initiating administrative proceedings to consider more permanent regulations related to facilitating and expediting certificate-related projects.

In general, the NGA requires that rates charged by interstate natural gas pipeline companies must be "just and reasonable" and are subject to FERC approval. Under the FERC's current policies, a pipeline may obtain approval to charge negotiated rates, but such pipelines must also post in applicable tariff(s) cost-based "recourse" rates that are available for shippers that do not opt to negotiate rates. The FERC approved Alliance U.S.'s proposal to offer shippers both negotiated and "recourse" rate options. Accordingly, Alliance U.S.'s existing tariff contains both negotiated and "recourse" rates.

The U.S. segments of the Vantage Pipeline and Cochin Pipeline are subject to the FERC's jurisdiction under the ICA*.* Unlike FERC's NGA jurisdiction, FERC's jurisdiction over liquids pipelines pursuant to the ICA is more limited. FERC does not have jurisdiction over the construction, extension or abandonment of pipelines transporting liquids in interstate commerce. FERC's jurisdiction over pipelines transporting crude oil, NGL or refined products in interstate commerce is generally limited to the rates, terms and conditions of service provided. Like the NGA, the ICA also requires that the rates of liquids pipelines be "just and reasonable", and a carrier may be subject to a complaint or protest from shippers challenging those rates. Liquids pipelines, however, may not negotiate rates with individual customers; instead, liquids pipelines must justify new rates and rate changes using specific FERC-prescribed methodologies, such as cost of service, the consent of an unaffiliated shipper, or by applying the FERC's annual index adjustment. Liquids pipeline companies may enter into contracts with individual shippers, but such contracts typically must be made available to all similarly situated shippers. As with interstate natural gas pipeline regulation, a key regulatory principle underlying FERC's ICA jurisdiction is that of non-discrimination, such that pipelines providing transportation of oil, natural gas liquids or refined products in interstate commerce are prohibited from granting any undue preference to any person, unduly discriminating against or in favor of any person, or maintaining any unreasonable difference in rates or terms and conditions of service.

See "*Risk Factors – Risks Inherent in Pembina's Business – Abandonment Costs*", "*Risk Factors – Risks Inherent to Pembina's Business – Environmental Costs and Liabilities*" and "*Risk Factors – Risks Inherent to Pembina's Business – Regulation and Legislation*".

**Corporate Governance**

Pembina maintains corporate governance and ethical practices, both within the corporate boardroom and throughout its operations, in line with its commitment to creating a culture of integrity. Pembina's corporate governance practices aim to:

• operate in a safe, reliable and environmentally responsible way in the communities in which it operates;

• emphasize employee engagement, inclusion and well-being in a safe, respectful, collaborative and fair work environment;

• ensure Pembina meets its obligations to all regulatory bodies, business partners, customers, stakeholders, employees and Shareholders;

• enhance and preserve value; and

• protect dividends.

See "*Description of Pembina's Business and Operations – Pembina's Purpose, Values, and Strategy*".

As a public company listed on the TSX and the NYSE, Pembina takes into account rules and regulations applicable to listed issuers in both Canada and the U.S. Pembina's corporate governance practices comply with the Canadian governance guidelines, which include the governance rules of the TSX and the Canadian Securities Administrators, including:

• National Instrument 52-110 *– Audit Committees*;

• National Policy 58-201 *– Corporate Governance Guidelines*; and

• National Instrument 58-101 *– Disclosure of Corporate Governance Practices*.

As a non-U.S. company, Pembina is not required to comply with most of the governance listing standards of the NYSE, but it must disclose how its governance practices differ from those followed by U.S. companies that are subject to the NYSE standards. Pembina's governance practices comply with the NYSE standards for U.S. companies in all significant respects, except as summarized in the Statement of Significant Differences found on Pembina's website at www.pembina.com/about/governance.

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Pembina also complies with the governance listing standards of the NYSE and the governance rules of the SEC that apply to foreign private issuers.

Many of Pembina's best governance practices are derived from the NYSE rules and comply with applicable rules adopted by the SEC to meet the requirements of the *Sarbanes-Oxley Act of 2002* and the *Dodd-Frank Wall Street Reform and Consumer Protection Act,* such as having an audit committee and a compensation committee that meet the enhanced independence standards applicable to those committees.

The Board of Directors oversees Pembina's corporate stewardship. The Board recognizes the importance of ESG issues and fulfills its mandated duties directly and by delegating the following ESG related responsibilities to its four standing committees.

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| | |
|:---|:---|
| **Committee** | **ESG Related Responsibilities** |
| Audit Committee | • Oversees the integrity of Pembina's financial statements, the reporting process, the effectiveness of internal controls over financial reporting and the internal audit function. |
| Human Resources and Compensation Committee | • Oversees Pembina's approach to director compensation, employee wellness, employee compensation, executive performance and compensation, executive succession planning and programs and initiatives that relate to corporate EDI.  |
| Human Resources and Compensation Committee | • Focuses on sustainability and climate by including ESG metrics in incentive plan design and compensation decisions for executives. |
| Human Resources and Compensation Committee | • Monitors and oversees progress against Pembina's EDI strategy and diversity targets. |
| Governance, Nominating and Corporate Social Responsibility Committee | • Responsible for Pembina's corporate governance practices.  |
| Governance, Nominating and Corporate Social Responsibility Committee | • Oversees Pembina's ESG strategy, including climate and other material topics, and makes recommendations to the Board on the integration of ESG considerations into long-term business planning, organizational structure and corporate policies and practices.  |
| | • Monitors, reviews and provides oversight of performance and reporting on ESG matters, including progress against Pembina's emissions reduction targets. |
| | • Reviews ESG matters on a quarterly basis and provides oversight of Pembina's program to identify and monitor the impacts of proposed legislation and other emerging issues, trends and public opinion impacts in ESG areas and recommends appropriate responses to the Board. |
| | • Oversees risks related to corporate governance, disclosure, corporate social responsibility (including ESG matters) and assists the Board in establishing appropriate risk oversight functions at the Board and Committee levels. |
| Safety, Environment and Operational Excellence Committee | • Oversees the development, implementation and monitoring of risks, policies and procedures related to process safety and occupational health and safety, environment, operational excellence, asset integrity management, corporate security and cybersecurity.&nbsp;&nbsp;&nbsp;&nbsp; |

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Further information about Pembina's corporate governance practices will be included in Pembina's management information circular for its 2026 annual meeting of Shareholders. In addition, copies of Pembina's Code of Ethics Policy, Whistleblower Policy and other corporate governance policies can be found on Pembina's website at www.pembina.com.

*Corporate Governance Policies*

Pembina's governance framework includes corporate policies that align with Pembina's strategy and purpose, comply with the laws and regulations applicable to Pembina's business and adhere to best practices in the industry. Pembina's corporate policies reflect Pembina's core values and beliefs, which in turn influence the OEMS and associated programs. Certain of these policies are outlined below.

<u>Board Diversity Policy</u>

The Board recognizes that diversity among its directors supports balanced decision and debate which, in turn, enhances decision-making by the Board and fosters Pembina's commitment to delivering benefits to its four key stakeholder groups – customers, investors, employees and communities – by utilizing the difference in perspective of the members of the Board. Under the policy, the Board considers candidates to the Board based on merit with regard to the benefits of diversity on the Board, and with a view to the following specific diversity targets: (i) a Board composition in which each of the female and male genders comprises at least 30 percent of the independent directors on the Board; and (ii) a Board composition in which at least 40 percent of the independent directors be individuals that are women, persons with disabilities, Indigenous peoples, or members of other racial, ethnic and/or visible minorities.

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<u>Health, Safety and Environment ("</u>**<u>HSE</u>**<u>") Policy</u> 

Health, safety and the environment are top priorities in all of Pembina's operations and business activities. Pembina is committed to providing a safe and healthy environment and complying with all applicable laws and regulations designed to: (i) protect the health and safety of workers and the public; and (ii) safeguard the environment affected by its activities. Pembina is also committed to continuous improvement and risk management in its HSE performance. These areas are of paramount importance to management, employees and contractors at the Company. Pembina believes that excellence in HSE practices is essential to the well-being of the Company.

The Safety, Environment and Operational Excellence Committee of the Board of Directors monitors compliance with the HSE Policy through regular reporting.

<u>Enterprise Risk Management Policy</u>

Pembina recognizes that risk is present in all business activities and that the effective management of risk is a critical success factor in maximizing organization and security values. The Enterprise Risk Management Policy sets out the Company's enterprise risk management principles and specifies expectations associated with Pembina's risk management activities and governance. Enterprise risk management consists of risk management practices and procedures applied across the Company to identify, measure, assess, respond to, monitor and report on principal risks that may affect the achievement of business objectives.

<u>Code of Ethics Policy</u> 

Pembina's reputation is one of its most important assets. The purpose of the Code of Ethics Policy is to establish a high standard of integrity and ethical behaviour to support Pembina's reputation and its relationships with its internal and external stakeholders. All personnel are expected to comply with the Code of Ethics Policy at all times. Leaders must set the tone by upholding the highest standards of honesty and integrity, setting standards and providing guidance. The Code of Ethics Policy sets out principles for ethical conduct in the following areas: conflicts of interest; human rights; business relationships and fair dealing; honesty, integrity, and compliance with the law; government relations; health, safety and environmental matters; personnel relations; integrity of financial information; disclosure and insider trading; stakeholder and public relations; privacy and confidentiality; protecting the Company's assets and records; gifts, entertainment, benefits and business expenses; workplace environment and relationships; and reporting responsibilities and procedures.

<u>Anti-Bribery Policy</u>

Corruption and bribery pose legal, commercial and reputational risks to Pembina and can also result in erosion of internal trust and confidence. The Anti-Bribery Policy formalizes and records Pembina's procedures to ensure that Pembina and its personnel conduct business in an honest and ethical manner when dealing with Government Officials and all other parties, and comply with Anti-Corruption Laws. The Anti-Bribery Policy reflects the standards Pembina expects its contractors, consultants, agents and other third-party representatives to adhere when acting on Pembina's behalf.

<u>Sanctions Policy</u>

Pembina is committed to carrying out its business activities in compliance with applicable sanctions laws, rules and regulations. Failure to comply with such laws, rules and regulations can lead to severe civil and criminal penalties against Pembina and personnel of Pembina involved in improper activity may cause significant reputational damage to Pembina. As such, the key objectives of the Sanctions Policy are to provide guidance and requirements for Pembina and its personnel to comply with all applicable legal obligations related to sanctions laws, rules and regulations, to protect Pembina's reputation and ensure continued access to the goods, services and technology required to conduct its business, and demonstrate Pembina's commitment to compliance with sanctions laws, rules and regulations to third parties, including joint venture partners, governmental authorities and local stakeholders.

<u>Alcohol and Drug Policy</u> 

As part of Pembina's commitment to the health, safety and wellness of its directors, employees, contractors and the public, Pembina has comprehensive alcohol and drug policies in place which require that all personnel remain fit for work while on duty or on call. These policies form a part of Pembina's approach to risk mitigation and safety and supports the HSE Policy.

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Pembina has also implemented an alcohol and drug policy for Department of Transportation workers as required under applicable United States' laws.

<u>Indigenous & Tribal Relations Policy</u> 

As part of Pembina's approach to Indigenous relations, Pembina seeks to enter into lasting and mutually-beneficial relationships with Indigenous and Tribal peoples affected by its operations. By striving for positive and mutually-beneficial relationships with Indigenous and Tribal communities, Pembina's directors, employees, consultants and contractors will help build continued success for Pembina's existing and expanding systems and other businesses.

<u>Community Relations Policy</u>

As part of Pembina's approach to community relations, Pembina seeks to develop enduring relationships based on mutual trust with stakeholders that could potentially be affected by Pembina's current or future operations. Pembina is committed to being recognized as a leader in its relationships with communities, where Pembina is welcomed as a safe and responsible partner whose positive social impact creates significant value for all of its stakeholders. Pembina's employees, consultants, contractors and directors will recognize and respond to the needs of its community, while addressing broader social issues by: understanding what communities value and what is important to them; making measurable commitments and delivering on them; minimizing potential impacts of Pembina's projects and operations by conducting early, meaningful and ongoing engagement; and identifying partnership opportunities in support of community and economic development for mutual benefit.

<u>Whistleblower Policy</u> 

Pembina is committed to high standards of professional and ethical conduct in all activities. Pembina's reputation for honesty and integrity among its stakeholders is key to the success of its business. The transparency, honesty, integrity and accountability of Pembina's financial, administrative and management practices are vital. These high standards guide the decisions of the Board of Directors and are relied upon by Pembina's stakeholders and the financial markets.

For these reasons, it is critical to maintain a workplace where concerns regarding questionable business practices can be raised without fear of discrimination, retaliation or harassment. Pembina also believes that encouraging a culture of openness and ethical leadership from management supports this process. Pembina's Whistleblower Policy encourages directors, employees, consultants, contractors, agents and external stakeholders to act responsibly, raise concerns and report any potential instances of unethical practices within Pembina, rather than overlooking a problem or seeking a resolution of the problem outside Pembina. In addition to raising concerns directly with Pembina management, individuals may report concerns anonymously and on a confidential basis: (i) through Pembina's Whistleblower Hotline, which is available 24 hours a day, seven days a week both online and through a toll-free number, or (ii) by writing to the Chair of the Board of Directors. Complaints received by Pembina under its Whistleblower Policy are promptly and thoroughly investigated.

<u>Security Policy</u>

Pembina is committed to protecting people in the workplace and individuals within Pembina's facilities, the environment, information, and assets through their life cycle. Pembina's security practices and procedures must comply with legal and regulatory requirements and meet industry standards and best practices. Pembina believes that excellence in security management is essential to the well-being of the Company. As such, the Security Policy is intended to ensure security threats and associated risks are identified and managed with appropriate mitigation and response procedures to minimize the impact of security incidents adversely affecting Pembina's stakeholders, information, logistical/physical infrastructure and property, and to ensure compliance with all applicable Company policies, security regulations and standards.

<u>Privacy Policy</u>

Pembina is committed to maintaining the accuracy, confidentiality and security of personal information in accordance with applicable privacy laws. Protection of personal information is of paramount importance to management, employees and contractors at the Company. Pembina's Privacy Policy sets out the manner in which Pembina collects, uses, discloses, protects and otherwise manages personal information.

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<u>Respectful Workplace Policy (Canada)/Policy Prohibiting Harassment and Discrimination (United States)</u>

Pembina is committed to providing a respectful workplace in which all people are treated with respect and dignity. The safety and well-being of everyone working for or in connection with Pembina is a core value. Harassment, discrimination and violence will not be tolerated in any form. These policies establish clear standards and expectations for all personnel to prevent and protect individuals from harassment, discrimination and violence in the workplace.

<u>Supplier Code of Conduct</u>

Pembina prides itself on working with suppliers who value safety, uphold the highest standards of ethics and integrity, and are economically, environmentally, and socially responsible. The purpose of the Supplier Code of Conduct is to help ensure Pembina works with suppliers who share Pembina's commitment to the following principles: creating a safe workplace; environmental stewardship; EDI; protection of human rights; no forced labour or child labour; ethics, integrity and compliance; anti-corruption and anti-bribery; privacy, confidentiality, and information security; compliance with applicable laws and policies; representing the Pembina brand; and reporting breaches of the Supplier Code of Conduct. These principles help shape Pembina's business philosophy on a day-to-day basis.

**Social, Community and Indigenous Engagement**

*Community Engagement*

Pembina is committed to building long-term relationships with communities, where we are welcomed as a safe and responsible partner whose positive social impact creates significant value for all of Pembina's stakeholders.

Pembina's guiding principles on its approach to community engagement are set out in Pembina's Community Relations Policy. See "*Other Information Relating to Pembina's Business – Corporate Governance – Corporate Governance Policies*".

Pembina's community engagement helps to identify and understand local priorities, which may be supported through its community investment program. Three pillars guide Pembina's community investment program strategy, ensuring a balanced approach to decision-making. The three pillars are: strong Indigenous communities; safe, inclusive and connected communities; and a sustainable future. Through these three community investment pillars, Pembina aspires to create resilient, thriving communities by supporting initiatives that matter to the community and connecting employees to the communities where Pembina operates.

*Indigenous Engagement*

Pembina recognizes that in order to achieve its business goals, the Company needs to work closely with communities across its operations, including Indigenous communities.

Pembina's guiding principles on its engagement with Indigenous communities are set out in Pembina's Indigenous & Tribal Relations Policy. See "*Other Information Relating to Pembina's Business – Corporate Governance – Corporate Governance Policies*".

Pembina's projects may take place on lands where Indigenous communities have rights and title. Pembina strives to engage with Indigenous communities early in the development phase of proposed developments, and to conduct meaningful consultation to understand potential impacts, seek mitigations, discuss possible benefits associated with the Company's proposed developments, and ensure better planned, executed and remediated projects. Pembina's engagement and consultation often exceed regulatory requirements and can take a variety of forms, such as personal meetings, desktop reviews, and site visits. Indigenous communities also have a unique understanding of the environment; Pembina works with Indigenous communities to understand their perspectives and, where possible, incorporates these perspectives into the Company's day-to-day business. Pembina is actively working to create awareness amongst Indigenous communities regarding environmental requirements and programs associated with its projects.

Pembina's Indigenous Engagement Strategy underscores a strong commitment to reconciliation, long-term relationship building with Indigenous communities in its operating areas and expanding Pembina's social and economic benefits to communities. The Indigenous Engagement Strategy outlines Pembina's path to reconciliation, focuses on four directions and is aligned with the Truth and Reconciliation Commission of Canada's Calls to Action.

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The four directions under Pembina's Indigenous Engagement Strategy are:

• **Lifecycle Alignment** – Building, maintaining and formalizing long-term relationships with Indigenous and Tribal communities near Pembina's projects and operations, and embedding Indigenous inclusion and engagement in governance, internal policies, standards and processes for decision-making.

• **Economic Reconciliation** – Supporting equitable access to jobs, training and education opportunities, and working with Indigenous communities to gain long-term sustainable benefits from economic development projects. This also includes ensuring procurement opportunities are available to Indigenous contractors within Pembina's asset areas.

• **Community Development** – Creating long-term community relationships and collaboratively identifying sustainable partnerships based on community needs and opportunities in alignment with Pembina's community investment strategy.

• **Cultural Appreciation** – Providing Indigenous cultural awareness training and educational opportunities for Pembina senior leadership and employees, while recognizing there are many distinct Indigenous communities and Tribes with unique languages, cultures, traditions, rights, priorities and protocols.

Pembina seeks to develop sustainable business relationships with Indigenous communities that deliver safety, performance, cost competitiveness and quality. Pembina's Standard for Indigenous and Tribal Contracting ensures the inclusion of capable Indigenous suppliers in Pembina's work. As part of this standard, and through Pembina's competitive processes, suppliers are required to demonstrate (and are evaluated on) their commitment to Indigenous economic development, inclusion partnerships and strategic alliances. Further, this standard helps to support Pembina's commitment to Indigenous economic reconciliation as part of Call to Action 92 of the Truth and Reconciliation Commission of Canada: Calls to Action.

Pembina believes that the future of Canada's energy sector development is inextricably linked to meaningful partnerships and commercial relationships with Indigenous communities. In June 2021, Pembina entered into a partnership with the Haisla Nation for the development of a proposed floating LNG facility in Kitimat, B.C., within the traditional territory of the Haisla Nation. On June 25, 2024, Cedar LNG announced a positive FID. Cedar LNG is the world's first Indigenous majority-owned LNG project.

See "*Description of Pembina's Business and Operations – Marketing & New Ventures Division*".

Finally, Pembina is focused on giving back to communities where we live and work in alignment with Pembina's community investment strategy. See "*Social, Community and Indigenous Engagement – Community Engagement*".

**Indemnification and Insurance**

Pembina maintains insurance coverage in relation to the ownership of its assets and also maintains standard director and officers' liability insurance consistent with industry practice.

Pembina believes its insurance program reflects what a prudent owner and operator of similar assets would maintain. This insurance coverage is subject to limits and exclusions or limitations on coverage that Pembina considers reasonable given the cost of procuring such insurance and current operating conditions. However, there can be no assurance that insurance coverage will be adequate in any particular situation or that insurers will be able to fulfill their obligations should a claim be made. Further, there can be no assurance that such insurance coverage will be available in the future on commercially reasonable terms or at commercially reasonable rates.

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**Employees**

As at December 31, 2025, Pembina employed 2,974 personnel, of which 1,885 were located in Pembina's field offices and engaged in the performance of field operations and superintendence activities, and 1,089 were located in Pembina's Calgary, Alberta office and engaged in the performance of facilities engineering, systems, management, finance, accounting, administration, human resources, information services, drafting, business development, safety and environmental services and other activities. Of the above field operations employees, 178 are unionized. Pembina's workforce is relatively stable with limited turnover. To ensure Pembina attracts and retains an engaged workforce, employees are provided a comprehensive and competitive total rewards package, including benefits, savings, a retirement plan and incentive compensation programs.

In addition to Pembina's employees, the Company also uses independent contractors throughout the organization to supply a range of services on an as needed basis.

**Equity, Diversity and Inclusion** 

Pembina's approach to EDI is embedded in how Pembina attracts, retains, and develops its employees and Pembina continues to work towards building an inclusive workplace that aligns with its core values. Pembina continues to offer core EDI-based programming such as EDI Foundations learning sessions, Inclusion Networks and Acknowledgment Months. These programs continue to provide meaningful opportunities for employees to connect, learn, and share their experiences, and ultimately, contribute to building a culture of inclusion and belonging at Pembina.

Pembina is committed to creating an inclusive environment for all by identifying and removing existing barriers and preventing new barriers for people with disabilities as they relate to employment, receipt of goods and services, the built environment, and information and communications. In 2025, Pembina introduced the *Accessibility Standard* to create a barrier-free environment for all stakeholders and expanded the *Accommodation Standard* to include a robust accommodation request process for employees and job candidates.

Pembina is committed to reviewing its policies, standards, processes and procedures to ensure equity, meet legal requirements, foster a diverse and welcoming culture, and strengthen its reputation and ability to attract and retain talent.

*EDI Targets*

<br>Pembina's executive and Board EDI targets aim to increase the representation of women and other underrepresented groups while aligning to its merit-based approach focusing on qualified, high-performing individuals. In 2025, Pembina continued to exceed its targets for women in executive leadership, overall executive diversity, and Board diversity. For more information on our Board diversity targets, refer to our Board Diversity Policy (see "*Other Information Relating to Pembina's Business – Corporate Governance – Corporate Governance Policies*").

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The graph below outlines Pembina's results against EDI targets as at December 31, 2025<sup>(1)(2)</sup>:

![aif-charta.jpg](aif-charta.jpg)

<sup>(1)</sup> Women in Executive and Executive Diversity metrics are in respect of Pembina's Canadian and U.S. workforce and includes Executive Officer and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Vice President level positions.

<sup>(2)</sup> Women on Board and Board Diversity metrics are in respect of independent directors of the Board.

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**CANADIAN OIL AND GAS INDUSTRY**

**General**

The discussion below provides a high-level overview of the crude oil industry, the NGL and natural gas industry and the midstream infrastructure industry within those commodities, with a focus on western Canada, given that a significant portion of Pembina's operations are situated in Alberta. Pembina also has operations in eastern Canada and the U.S. Volumes which feed into those assets predominantly originate in western Canada before being transported to eastern markets via Pembina and third-party pipelines.

Western Canada is the major source of conventional crude oil, synthetic crude oil, natural gas, bitumen and related products, including NGL and condensate, in Canada. Production comes primarily from Alberta with lesser amounts from British Columbia, Saskatchewan, Manitoba and the Northwest Territories. Synthetic crude oil and bitumen come from the oil sands developments near Fort McMurray, Alberta.

Efficient, low cost, and safe transportation by pipeline, rail and truck from producing fields and facilities to refineries, processing plants and domestic and export markets is essential to the Canadian oil and gas industry.

**Canadian Crude and Heavy Oil** 

Western Canada has one of the world's largest crude oil reserves, and over the past decade, the crude oil industry in western Canada has implemented improved drilling technologies, which have enabled increased recoveries and have enhanced economics. Technologies such as multi-stage hydraulic fracturing have allowed producers to access tighter areas of conventional reserves as well as shales and siltstones, which were previously considered to be uneconomical.

Alberta is also abundant in oil sands *–* a natural mixture of sand, water, clay and a type of natural heavy oil called bitumen. Once the bitumen is recovered and processed to separate it from the sand and water, it is then upgraded to produce synthetic crude oil. Oil sands may be extracted by surface mining where it is moved by trucks to a processing facility or by in situ processes which use steam, solvents and/or thermal energy to allow the bitumen to be pumped to the surface. Because bitumen is so viscous, it often requires dilution with lighter hydrocarbons, such as condensate, to make it transportable by pipeline.

Crude oil production is generally consumed in refineries. Refineries are widely distributed geographically and can be located anywhere along the transportation chain, from the production basin hub locations to mid-point junctions on transmission networks to tidewater where foreign production is able to access North American markets via marine transport.

Pipelines continue to be the safest, most economical and predominant mode of transporting large amounts of crude oil, however, transporting hydrocarbon products by rail is an alternative given the extensive rail infrastructure network across North America.

*Product Transportation*

Feeder pipeline systems gather petroleum products from producing fields and facilities for transport to regional centres for storage, refining and connection to larger pipelines. From these centres, petroleum products are further transported by export pipeline or rail systems either to domestic markets in western or eastern Canada or to markets in the northern U.S., mid-west U.S. and U.S. gulf coast for end-use or used as feedstock in refineries or the petrochemical industry. The major operational centre for the Canadian oil and natural gas industry is the Edmonton/Fort Saskatchewan area of Alberta, which is the largest crude oil refining centre in western Canada and a major fractionation and market hub for NGL and related products. In addition, the Edmonton/Fort Saskatchewan area is the hub of the Alberta feeder pipeline network and the starting point of many large Canadian export pipelines.

Truck terminals are a means for oil, condensate and NGL production, which is not pipeline connected, to secure transportation access to market.

The primary export liquids pipelines originating in the Edmonton area are the Trans Mountain Pipeline and the Enbridge Pipeline. Crude oil and refined products delivered to domestic and export markets on the west coast are transported through the Trans Mountain Pipeline, which includes the Trans Mountain Expansion project that began operating in May 2024. Crude oil and refined products delivered to eastern Canada, the northern U.S. and U.S. gulf coast are transported through the Enbridge Pipeline. NGL delivered to eastern Canadian and export markets are transported through the Enbridge Pipeline. The existing Keystone Pipeline and Express Pipeline also export crude oil from Hardisty, Alberta to the U.S.

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Crude storage assets provide numerous strategic advantages, including access to buffer volumes to fulfill downstream obligations when upstream production interruptions occur, capacity for egress interruptions that would otherwise impact upstream production, exploiting market price differentials between commodity grades and over time, and the ability to finely control crude specification quality through in-tank or in-line blending of various crude commodity grades.

**Natural Gas Liquids**

The NGL industry involves the production, storage, fractionation and transportation of products that are extracted from natural gas prior to its sale to end-use customers. Natural gas is a mixture of various hydrocarbon components, the most abundant of which is methane. The higher value hydrocarbons, which include ethane (C2), propane (C3), butane (C4) and condensate (C5+), are generally in gaseous form at the pressures and temperatures under which natural gas is gathered and transported. NGL extraction facilities recover NGL mix from natural gas in a liquid form. The majority of NGL supply in western Canada is derived from natural gas processing, with the remainder derived from the refining of crude oil. The profitability of the industry is based on the products extracted being of greater economic value as separate commodities (net of the costs of extraction and transportation) than as components of natural gas.

The NGL value chain begins with the gathering of gas produced from the wellhead and moving it to a gas plant. The gas is then processed through field processing plants and mainline extraction facilities, as well as treated for removal of water, sulphur and other impurities. The value chain culminates with the transportation of NGL mix from the gas plant via pipeline to fractionation facilities where the NGL mix will be separated into saleable products and marketed to the final NGL customers.

Condensate is produced naturally at the wellhead when natural gas is brought to the surface at a gas well. It is then either trucked to a connection point on a pipeline or the natural gas plant may be connected directly into a gathering pipeline system for onward delivery to market. Condensate is used primarily as a diluent to blend with heavy crude oil and bitumen to decrease viscosity and density, allowing transport in pipelines. In addition, condensate is used as a refinery feedstock in the production of gasoline, kerosene and jet fuel. With the growth in demand for diluents for heavy oil transportation, there is a requirement to manage diluents prior to injection into the various diluent delivery pipelines. This demand includes accessing the greatest variety of diluents, meeting diluent quality specifications and storage.

The North American markets for NGL are largely continental in nature, though exports are rapidly increasing, with end uses varying substantially by product, from heating and transportation fuels to petrochemical and crude oil refining feed stocks. Ethane is used as feedstock for the petrochemical industry. Propane is the most versatile of the NGL products with uses such as home and commercial heating, crop drying, cooking, motor fuel and petrochemical feedstock. Butane is used primarily in gasoline blending, either directly or in the production of iso-octane and as a diluent for heavy oil.

*NGL Extraction*

NGL is recovered at three distinct types of facilities: natural gas field plants, natural gas mainline straddle plants and oil refineries. Field plants process raw natural gas, which is produced from wells in the immediate vicinity, to remove impurities such as water, sulphur and CO2 prior to the delivery of natural gas to the major natural gas pipeline systems. Field plants also remove almost all condensate and as much as 65 percent of propane and 80 percent of butane to meet pipeline specifications, leaving ethane and unrecovered NGL in the natural gas. Most western Canadian field plants do not extract ethane but leave it in the natural gas. Once processed, the natural gas is then compressed and delivered to one of the major gas transmission systems in the region. In Alberta, any residual NGL and ethane in the natural gas is often extracted at mainline straddle plants prior to export.

NGL extraction produces a mixed hydrocarbon product (either ethane-plus (C2+) or propane-plus (C3+)), which must be further processed in subsequent steps to separate out the individual products. At most field facilities, only sufficient NGL to make the natural gas marketable is extracted; however, with the addition of deep cut processing facilities and mainline straddle plants, further NGL extraction is possible to ensure the maximum amount of NGL is recovered. NGL products have historically been priced relative to oil, so this additional level of recovery is dependent on the relative value between oil and natural gas. As the relative price of oil versus natural gas increases, the economic impetus for this activity is also increased.

*NGL Fractionation*

NGL mix extracted at field plants and straddle plants is transported via pipelines, truck or rail to fractionation facilities, which separate the mix into its components: ethane, propane, butane and condensate. Due to size, storage and transportation

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limitations, fractionation generally does not occur at field plants, but rather at larger, well-connected, centralized locations. Once fractionated, the products are stored and transported to end markets by pipeline, truck or rail.

*NGL Transportation*

The efficient movement of NGL products requires significant infrastructure, including transportation assets (pipelines, trucks and rail cars), storage facilities, and terminals (rail and truck). The safest, most efficient and lowest-cost means for moving NGL products to markets is by pipeline. The Canadian energy sector has an extensive pipeline network for the transportation of NGL to fractionation facilities, petrochemical complexes, underground storage facilities and the end-user. Pipelines serve as the main mode of NGL transportation (pre- and post-fractionation).

*NGL West Coast Export*

A portion of Canadian produced NGL products are being shipped globally through facilities on the west coast of Canada. NGL products are transported to facilities, including Pembina's Prince Rupert Terminal in Prince Rupert, B.C., where products are transformed into liquefied petroleum gases and loaded to ships destined for global markets. These facilities allow for producers to realize differentiated global propane prices.

*NGL Storage*

Storage assets offer a number of key strategic advantages, which include: (i) providing the necessary operational buffer between production of NGL (which varies daily depending on gas flows and composition) and their consumption (which can vary from day-to-day and season-to-season depending on market needs); (ii) allowing for storage of NGL products for future utilization; and (iii) exploiting seasonal price differentials that may develop over the course of a year (particularly for propane and butane).

**Natural Gas Transportation**

The efficient movement of natural gas requires significant infrastructure, including pipelines and storage facilities. The safest, most efficient and the lowest-cost means for moving natural gas to markets is by pipeline. The Canadian energy sector has an extensive pipeline network for the transportation of natural gas to field plants and extraction facilities. Pipelines serve as the main mode of natural gas transportation, and growing natural gas supply and pipeline infrastructure over the past several years has created increased competition throughout North America.

The natural gas transportation industry from western Canada to eastern markets has historically been serviced by companies affiliated with TC Energy, with most natural gas volumes being transported on the Canadian Mainline. The Canadian Mainline carries natural gas from the WCSB to Ontario, where it is further transported throughout eastern Canada and the United States via various interconnecting pipelines. There are currently no other major pipeline systems which carry natural gas to eastern Canada.

Natural gas transportation to the United States has multiple service options, with several pipelines connecting the WCSB to natural gas markets south of the Canadian border. The Alliance Pipeline delivers rich gas from the WCSB to natural gas markets through Aux Sable U.S.'s Channahon Facility in Illinois, which extracts NGL from the natural gas transported before delivery to downstream pipelines, servicing the United States Midwest. The BC Pipeline (or the Westcoast Transmission System), owned by Enbridge, transports natural gas from Fort Nelson, British Columbia, and Gordondale, Alberta, south to the Canada-United States border at Huntingdon/Sumas, where it services markets in British Columbia and the United States Pacific Northwest. The TC Energy-owned Northern Border Pipeline transports WCSB natural gas to consumers in the United States Midwest, while the TC Energy-owned Gas Transmission Northwest pipeline system transports WCSB and Rockies natural gas to the United States Pacific Northwest and to California.

*West Coast LNG*

In recent years, an increasing number of LNG facilities have been constructed and proposed for development on the west coast of Canada to transport LNG to Asian markets. These projects will allow gas producers to sell natural gas to diversified, premium priced markets, while benefiting from closer shipping distances to Asia as compared to terminals in the US Gulf Coast. The LNG Canada export terminal, the first Canadian LNG terminal to be operating, delivered its first cargo in June 2025. Other projects under development include the Cedar LNG project, the Ksi Lisims LNG project, and the Woodfibre LNG project.

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**DESCRIPTION OF THE CAPITAL STRUCTURE OF PEMBINA**

The authorized capital of Pembina consists of an unlimited number of Common Shares, a number of Class A Preferred Shares, issuable in series, not to exceed 254,850,850 Class A Preferred Shares, and an unlimited number of Class B Preferred Shares. As of December 31, 2025, there were approximately 581 million Common Shares outstanding, and approximately 3 million Common Shares issuable pursuant to outstanding options under the Option Plan. In addition, 10 million Series 1 Class A Preferred Shares, 6 million Series 3 Class A Preferred Shares, 10 million Series 5 Class A Preferred Shares, 10 million Series 7 Class A Preferred Shares, 8 million Series 15 Class A Preferred Shares, 6 million Series 17 Class A Preferred Shares, approximately 15 million Series 21 Class A Preferred Shares and 10 million Series 25 Class A Preferred Shares were issued and outstanding as of December 31, 2025.

The following is a summary of the rights, privileges, restrictions and conditions attaching to the Common Shares, the Class A Preferred Shares and the Class B Preferred Shares.

**Common Shares**

Holders of Common Shares are entitled to receive notice of and to attend all meetings of Shareholders and to one vote at such meetings for each Common Share held. The holders of the Common Shares are, at the discretion of the Board of Directors and subject to applicable legal restrictions, entitled to receive any dividends declared by the Board of Directors on the Common Shares, and are entitled to share in the remaining property of Pembina upon liquidation, dissolution or winding-up, subject to the rights of the holders of the Class A Preferred Shares and Class B Preferred Shares.

Pembina has a shareholder rights plan (the "**Plan**") that was adopted to ensure, to the extent possible, that all Shareholders are treated fairly in connection with any takeover bid for Pembina and to ensure that the Board is provided with sufficient time to evaluate unsolicited take-over bids and to explore and develop alternatives to maximize Shareholder value. The Plan creates a right that attaches to each present and subsequently issued Common Share. Until the Separation Time (as defined in the Plan), which typically occurs at the time of an unsolicited takeover bid, whereby a person acquires or attempts to acquire 20 percent or more of the Common Shares, the rights are not separable from the Common Shares, are not exercisable and no separate rights certificates are issued. Each right entitles the holder, other than the 20 percent acquirer, from and after the Separation Time and before certain expiration times, to acquire one Common Share at a substantial discount to the market price at the time of exercise. The Board of Directors may waive the application of the Plan in certain circumstances. The Plan was reconfirmed by Shareholders at Pembina's 2025 annual meeting of Shareholders and must be reconfirmed at every third annual meeting of Shareholders thereafter. Accordingly, the Plan, with such amendments as the Board of Directors determines to be necessary or advisable, and as may otherwise be required by law, is expected to be placed before Shareholders for approval at Pembina's 2028 meeting of Shareholders. A copy of the agreement relating to the current Plan has been filed on Pembina's SEDAR+ and EDGAR profiles on May 13, 2016 and May 31, 2016, respectively.

**Class A Preferred Shares**

The Class A Preferred Shares were not intended to and will not be used by the Company for anti-takeover purposes without Shareholder approval. Subject to certain limitations, the Board may, from time to time, issue Class A Preferred Shares in one or more series and determine for any such series, its designation, number of shares and respective rights, privileges, restrictions and conditions. The Class A Preferred Shares as a class have, among others, the provisions described below.

Each series of Class A Preferred Shares shall rank on parity with every other series of Class A Preferred Shares, and shall have priority over the Common Shares, the Class B Preferred Shares and any other class of shares ranking junior to the Class A Preferred Shares with respect to redemption, the payment of dividends, the return of capital and the distribution of assets in the event of the liquidation, dissolution or winding-up of Pembina. The Class A Preferred Shares of any series may also be given such preferences, not inconsistent with the provisions thereof, over the Common Shares, the Class B Preferred Shares and over any other class of shares ranking junior to the Class A Preferred Shares, as may be determined by the Board.

In the event of the liquidation, dissolution or winding-up of Pembina, if any cumulative dividends or amounts payable on a return of capital in respect of a series of Class A Preferred Shares are not paid in full, the Class A Preferred Shares of all series shall participate rateably in: (i) the amounts that would be payable on such shares if all such dividends were declared at or prior to such time and paid in full; and (ii) the amounts that would be payable in respect of the return of capital as if all such amounts were paid in full; provided that if there are insufficient assets to satisfy all such claims, the claims of the holders of the Class A Preferred Shares with respect to repayment of capital shall first be paid and satisfied and any assets remaining shall be applied towards the payment and satisfaction of claims in respect of dividends. After payment to the holders of any series of Class A Preferred Shares of the amount so payable, the holders of such series of Class A Preferred Shares shall not be

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entitled to share in any further distribution of the property or assets of Pembina in the event of the liquidation, dissolution or winding-up of Pembina.

Holders of any series of Class A Preferred Shares will not be entitled (except as otherwise provided by law and except for meetings of the holders of Class A Preferred Shares or a series thereof) to receive notice of, attend at, or vote at any meeting of Shareholders of Pembina, unless the Board shall determine otherwise in the terms of a particular series of Class A Preferred Shares, in which case voting rights shall only be provided in circumstances where Pembina shall have failed to pay a certain number of dividends on such series of Class A Preferred Shares, which determination and number of dividends and any other terms in respect of such voting rights, shall be determined by the Board and set out in the designations, rights, privileges, restrictions and conditions of such series of Class A Preferred Shares. Other than as set out below, the material characteristics of each series of Class A Preferred Shares are substantially the same.

The table below outlines, as of December 31, 2025, the number of outstanding, and the material provisions of, each of the issued series of Class A Preferred Shares.

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Series** | **Issue Date** | **Issued and Outstanding** | **Amount (C$)** | **Annual Dividend Rate** | **Redemption and Conversion Option Date**<sup>(2)</sup> | **Reset Spread** | **Per Share Base Redemption/ Liquidation Value** | **Right to Convert on a one-for-one basis**<sup>(4)</sup> |
| 1 | July 26, 2013 | 10000000 | $250000000 | $1.63125<sup>(1)</sup> | December 1, 2028 | 2.47%<sup>(3)</sup> | $25.00 | Series 2 |
| 3 | October 2, 2013 | 6000000 | $150000000 | $1.50475<sup>(1)</sup> | March 1, 2029 | 2.60%<sup>(3)</sup> | $25.00 | Series 4 |
| 5 | January 16, 2014 | 10000000 | $250000000 | $1.70350<sup>(1)</sup> | June 1, 2029 | 3.00%<sup>(3)</sup> | $25.00 | Series 6 |
| 7 | September 11, 2014 | 10000000 | $250000000 | $1.48825<sup>(1)</sup> | December 1, 2029 | 2.94%<sup>(3)</sup> | $25.00 | Series 8 |
| 15 | October 2, 2017<sup>(5)</sup> | 8000000 | $200000000 | $1.54100<sup>(6)</sup> | September 30, 2027 | 2.92%<sup>(3)</sup> | $25.00 | Series 16 |
| 17 | October 2, 2017<sup>(5)</sup> | 6000000 | $150000000 | $1.65125<sup>(6)</sup> | March 31, 2029 | 3.01%<sup>(3)</sup> | $25.00 | Series 18 |
| 21 | December 7, 2017 | 14971870 | $374296750 | $1.57550<sup>(1)</sup> | March 1, 2028 | 3.26%<sup>(7)</sup> | $25.00 | Series 22 |
| 25 | December 16, 2019<sup>(8)</sup> | 10000000 | $250000000 | $1.62025<sup>(9)</sup> | February 15, 2028 | 3.51%<sup>(10)</sup> | $25.00 | Series 26 |

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**Notes:**

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;The holder is entitled to receive a fixed, cumulative preferential dividend per year payable quarterly on the first day of March, June, September and December, as declared by the Board of Directors.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;The Company may, at its option, redeem all or a portion of an outstanding series of Class A Preferred Shares on the Redemption Option Date and every fifth year thereafter for the Base Redemption Value per share plus all accrued and unpaid dividends.

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;The dividend rate will reset on the Redemption and Conversion Option Date and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield plus the applicable Reset Spread noted above.

<sup>(4)</sup> &nbsp;&nbsp;&nbsp;&nbsp;A holder has the right, subject to certain conditions, to convert their Class A Preferred Shares into cumulative redeemable Class A Preferred Shares of a specified series on the Conversion Option Date and every fifth anniversary thereafter. The even numbered series of Class A Preferred Shares carry the right to receive floating, cumulative preferential dividends at a rate, reset quarterly, equal to the sum of the then 90 day Government of Canada treasury bill rate plus the applicable Reset Spread noted above.

<sup>(5)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Effective October 2, 2017 and pursuant to the Veresen Acquisition, all of the outstanding Veresen Series A, C and E Preferred Shares were exchanged for Series 15, 17 and 19 Class A Preferred Shares, respectively. On June 30, 2025, Pembina redeemed all of the issued and outstanding Series 19 Class A Preferred Shares.

<sup>(6)</sup> &nbsp;&nbsp;&nbsp;&nbsp;The holder is entitled to receive a fixed, cumulative preferential dividend per year payable quarterly on the last day of March, June, September and December, as declared by the Board of Directors.

<sup>(7)</sup> &nbsp;&nbsp;&nbsp;&nbsp;The dividend rate will reset on the Redemption and Conversion Option Date and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield plus the applicable Reset Spread noted above, provided that in any event, the rate for the Series 21 Class A Preferred Shares shall not be less than 4.90 percent.

<sup>(8)</sup> **&nbsp;&nbsp;&nbsp;&nbsp;**Effective December 16, 2019 and pursuant to the Kinder Morgan Canada Acquisition, all of the outstanding KML Series 1 and 3 Preferred Shares were exchanged for Series 23 and 25 Class A Preferred Shares, respectively. On November 15, 2022, Pembina redeemed all of the issued and outstanding Series 23 Class A Preferred Shares.

<sup>(9)</sup> &nbsp;&nbsp;&nbsp;&nbsp;The holder is entitled to receive a fixed, cumulative preferential dividend per year payable quarterly on the 15th day of February, May, August and November, as declared by the Board of Directors.

<sup>(10)</sup> **&nbsp;&nbsp;&nbsp;&nbsp;**The dividend rate will reset on the Redemption and Conversion Option Date and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield plus the applicable Reset Spread noted above, provided that in any event, the rate for the Series 25 Class A Preferred Shares shall not be less than 5.20 percent.

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**Class B Preferred Shares**

The Class B Preferred Shares were not intended to and will not be used by the Company for anti-takeover purposes without Shareholder approval. If at any time a holder of Class B Preferred Shares ceases to be, or is not, a direct or indirect wholly-owned subsidiary of Pembina, Pembina, with or without knowledge of such event, shall be deemed, without further action or notice, to have automatically redeemed all of the Class B Preferred Shares held by such holder in exchange for the redemption amount per Class B Preferred Share as set out in Pembina's articles together with all declared but unpaid dividends thereon (the "**Redemption Amount**").

Holders of Class B Preferred Shares are not entitled to receive notice of, to attend or to vote at any meeting of the Shareholders, except as required by law. The Class B Preferred Shares are retractable and redeemable at the option of the holder thereof and Pembina, respectively.

The holders of Class B Preferred Shares shall be entitled to receive, if and when declared by the Board of Directors, preferential non-cumulative dividends and upon the liquidation, dissolution or winding-up of Pembina, the holders of Class B Preferred Shares shall be entitled to receive for each such share, in priority to the holders of Common Shares, the Redemption Amount.

There are currently no Class B Preferred Shares outstanding.

**Credit Facilities** 

Pembina's credit facilities as at December 31, 2025 consisted of an unsecured $2.5 billion revolving credit facility due June 2030 (the "**Revolving Credit Facility**"), which includes a $750 million accordion feature, an unsecured $50 million operating facility due June 2026 and which is typically renewed on an annual basis, and a $600 million non-revolving term loan due October 2027. Pembina also has an unsecured US$250 million non-revolving term loan due April 2030. The terms and conditions of the US$250 million non-revolving term loan and the $600 million non-revolving term loan, including financial covenants, are substantially similar to the Revolving Credit Facility. There are no repayments due over the term of any of Pembina's credit facilities. The increase in the Revolving Credit Facility reflects the cancellation of the $1.0 billion sustainability-linked revolving credit facility in September 2025, which previously matured in June 2027, and its addition to the Revolving Credit Facility.

As at December 31, 2025, Pembina had $1,305 million drawn on revolving and non-revolving bank debt and $106 million in cash, leaving approximately $2.3 billion of cash and unutilized debt facilities.

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**Medium Term Notes**

Subject to certain conditions, as noted below, Pembina may redeem each series of Medium Term Notes, either in whole, or in part, upon not less than 30 (except, in the case of the Medium Term Notes, Series 16, Medium Term Notes, Series 17, Medium Term Notes, Series 18, Medium Term Notes, Series 20, Medium Term Notes, Series 21, Medium Term Notes, Series 22 and the Medium Term Notes, Series 23, not less than 10) and not more than 60 days prior notice, at a price equal to the greater of (i) par and (ii) the Canada Yield Price (as defined below), plus, in either case, accrued but unpaid interest, if any, to, but excluding, the date of redemption. In addition, certain Medium Term Notes can be redeemed at par within three or six months of the maturity date thereof. In respect of the Medium Term Notes, "**Canada Yield Price**" means, in effect, a price equal to the price of a specific series of Medium Term Notes, as applicable, calculated in accordance with generally accepted financial practice in Canada to provide a yield to maturity equal to the Government of Canada Yield (as defined below) plus the Redemption Premium set forth in the table below. In respect of the Medium Term Notes, "**Government of Canada Yield**" means, on any date, in effect, the yield to maturity on such date compounded semi-annually which a non-callable Government of Canada bond would carry if issued, in Canadian dollars in Canada, at 100 percent of its principal amount on such date with a term to maturity equal to the remaining term to maturity of the specified series of Medium Term Notes, as applicable. The Government of Canada Yield will be the average of the yields determined by two major Canadian investment dealers selected by Pembina. In certain circumstances following a Change of Control (as such term is defined in the Senior Note Indenture) and a resulting downgrade in the ratings of the Medium Term Notes to below an investment grade, Pembina will be required to make an offer to repurchase all or, at the option of any holder of Medium Term Notes, any part, at a purchase price payable in cash equal to 101 percent of the aggregate outstanding principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase. After certain dates (as set forth below), the Medium Term Notes, Series 3, 4, 6, 7, 9, 10, 11, 12, 13, 15, 16, 17, 18, 20, 21, 22 and 23 may be redeemed at a price equal to par, plus accrued but unpaid interest, if any, to but excluding the date of redemption.

The table below outlines, as of December 31, 2025, the aggregate principal amount outstanding, and the material provisions of, each of Pembina's issued series of Medium Term Notes.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Series** | **Issue Date** | **Maturity Date** | **Principal and Outstanding Amount (C$)** | **Annual Coupon Rate** | **Optional Redemption Premium (per annum)** |
| 3<sup>(1)</sup> | April 30, 2013 | April 30, 2043 | $200000000 | 4.75% | 0.585% |
| 3<sup>(1)</sup> | February 2, 2015<sup>(2)</sup> | April 30, 2043 | $150000000 | 4.75% | 0.585% |
| 3<sup>(1)</sup> | June 16, 2015<sup>(2)</sup> | April 30, 2043 | $100000000 | 4.75% | 0.585% |
| 4<sup>(3)</sup> | April 4, 2014 | March 25, 2044 | $600000000 | 4.81% | 0.450% |
| 6<sup>(4)</sup> | June 16, 2015 | June 15, 2027 | $500000000 | 4.24% | 0.560% |
| 6<sup>(4)</sup> | June 22, 2023<sup>(5)</sup> | June 15, 2027 | $100000000 | 4.24% | 0.560% |
| 7<sup>(6)</sup> | August 11, 2016 | August 11, 2026 | $500000000 | 3.71% | 0.655% |
| 7<sup>(6)</sup> | May 28, 2020<sup>(7)</sup> | August 11, 2026 | $100000000 | 3.71% | 0.655% |
| 9<sup>(8)</sup> | January 20, 2017 | January 21, 2047 | $300000000 | 4.74% | 0.610% |
| 9<sup>(8)</sup> | August 16, 2017<sup>(9)</sup> | January 21, 2047 | $250000000 | 4.74% | 0.610% |
| 10<sup>(10)</sup> | March 26, 2018 | March 27, 2028 | $400000000 | 4.02% | 0.450% |
|  | January 10, 2020<sup>(11)</sup> | March 27, 2028 | $250000000 | 4.02% | 0.450% |
| 11<sup>(12)</sup> | March 26, 2018 | March 26, 2048 | $300000000 | 4.75% | 0.605% |
|  | January 10, 2020<sup>(13)</sup> | March 26, 2048 | $500000000 | 4.75% | 0.605% |
| 12<sup>(14)</sup> | April 3, 2019 | April 3, 2029 | $400000000 | 3.62% | 0.475% |
|  | January 10, 2020 <sup>(15)</sup> | April 3, 2029 | $250000000 | 3.62% | 0.475% |
| 13<sup>(16)</sup> | April 3, 2019 | April 3, 2049 | $400000000 | 4.54% | 0.640% |
| 13<sup>(16)</sup> | September 12, 2019<sup>(17)</sup> | April 3, 2049 | $300000000 | 4.54% | 0.640% |
| 15<sup>(18)</sup> | September 12, 2019 | February 1, 2030 | $600000000 | 3.31% | 0.485% |
| 16<sup>(19)</sup> | May 28, 2020 | May 28, 2050 | $400000000 | 4.67% | 0.895% |
| 17<sup>(20)</sup> | December 10, 2021 | December 10, 2031 | $500000000 | 3.53% | 0.475% |
| 18<sup>(21)</sup> | December 10, 2021 | December 10, 2051 | $500000000 | 4.49% | 0.650% |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Series** | **Issue Date** | **Maturity Date** | **Principal and Outstanding Amount (C$)** | **Annual Coupon Rate** | **Optional Redemption Premium (per annum)** |
| 20<sup>(22)</sup> | January 12, 2024 | January 12, 2032 | $600000000 | 5.02% | 0.430% |
| 20<sup>(22)</sup> | June 28, 2024<sup>(23)</sup> | January 12, 2032 | $150000000 | 5.02% | 0.430% |
| 21<sup>(24)</sup> | January 12, 2024 | January 12, 2034 | $600000000 | 5.21% | 0.480% |
| 22<sup>(25)</sup> | January 12, 2024 | January 12, 2054 | $600000000 | 5.67% | 0.615% |
| 22<sup>(25)</sup> | June 28, 2024<sup>(26)</sup> | January 12, 2054 | $150000000 | 5.67% | 0.615% |
| 23<sup>(27)</sup> | June 28, 2024 | June 28, 2033 | $650000000 | 5.22% | 0.430% |

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**Notes:**

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Pembina may redeem the Medium Term Notes, Series 3, (a) at any time prior to October 30, 2042 at a price equal to the greater of (i) par and (ii) the Canada Yield Price, and (b) at any time on or after October 30, 2042 at a price equal to par, plus, in either case, accrued but unpaid interest, if any, to but excluding the date of redemption.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;On February 2, 2015 and June 16, 2015, Pembina re-opened its Medium Term Notes, Series 3 for $150 million and $100 million aggregate principal amounts, respectively.

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Pembina may redeem the Medium Term Notes, Series 4, (a) at any time prior to September 25, 2043 at a price equal to the greater of (i) par and (ii) the Canada Yield Price, and (b) at any time on or after September 25, 2043 at a price equal to par, plus, in either case, accrued but unpaid interest, if any, to but excluding the date of redemption.

<sup>(4)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Pembina may redeem the Medium Term Notes, Series 6, (a) at any time prior to March 15, 2027 at a price equal to the greater of (i) par and (ii) the Canada Yield Price and (b) at any time on or after March 15, 2027 at a price equal to par, plus, in either case, accrued but unpaid interest, if any, to but excluding the date of redemption.

<sup>(5)</sup> &nbsp;&nbsp;&nbsp;&nbsp;On June 22, 2023, Pembina re-opened its Medium Term Notes, Series 6 for $100 million aggregate principal amount.

<sup>(6)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Pembina may redeem the Medium Term Notes, Series 7, (a) at any time prior to May 11, 2026 at a price equal to the greater of (i) par and (ii) the Canada Yield Price and (b) at any time on or after May 11, 2026 at a price equal to par, plus, in either case, accrued but unpaid interest, if any, to but excluding the date of redemption.

<sup>(7)</sup> &nbsp;&nbsp;&nbsp;&nbsp;On May 28, 2020, Pembina re-opened its Medium Term Notes, Series 7 for $100 million aggregate principal amount.

<sup>(8)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Pembina may redeem the Medium Term Notes, Series 9, (a) at any time prior to July 21, 2046 at a price equal to the greater of (i) par and (ii) the Canada Yield Price and (b) at any time on or after July 21, 2046 at a price equal to par, plus, in either case, accrued but unpaid interest, if any, to but excluding the date of redemption.

<sup>(9)</sup> &nbsp;&nbsp;&nbsp;&nbsp;On August 16, 2017, Pembina re-opened its Medium Term Notes, Series 9 for $250 million aggregate principal amount.

<sup>(10)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Pembina may redeem the Medium Term Notes, Series 10, (a) at any time prior to December 27, 2027 at a price equal to the greater of (i) par and (ii) the Canada Yield Price and (b) at any time on or after December 27, 2027 at a price equal to par, plus, in either case, accrued but unpaid interest, if any, to but excluding the date of redemption.

<sup>(11)</sup> &nbsp;&nbsp;&nbsp;&nbsp;On January 10, 2020, Pembina re-opened its Medium Term Notes, Series 10 for $250 million aggregate principal amount.

<sup>(12)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Pembina may redeem the Medium Term Notes, Series 11, (a) at any time prior to September 26, 2047 at a price equal to the greater of (i) par and (ii) the Canada Yield Price and (b) at any time on or after September 26, 2047 at a price equal to par, plus, in either case, accrued but unpaid interest, if any, to but excluding the date of redemption.

<sup>(13)</sup> &nbsp;&nbsp;&nbsp;&nbsp;On January 10, 2020, Pembina re-opened its Medium Term Notes, Series 11 for $500 million aggregate principal amount.&nbsp;&nbsp;&nbsp;&nbsp;

<sup>(14)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Pembina may redeem the Medium Term Notes, Series 12, (a) at any time prior to January 3, 2029 at a price equal to the greater of (i) par and (ii) the Canada Yield Price and (b) at any time on or after January 3, 2029 at a price equal to par, plus, in either case, accrued but unpaid interest, if any, to but excluding the date of redemption.

<sup>(15)</sup> &nbsp;&nbsp;&nbsp;&nbsp;On January 10, 2020, Pembina re-opened its Medium Term Notes, Series 12 for $250 million aggregate principal amount.&nbsp;&nbsp;&nbsp;&nbsp;

<sup>(16)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Pembina may redeem the Medium Term Notes, Series 13, (a) at any time prior to October 3, 2048 at a price equal to the greater of (i) par and (ii) the Canada Yield Price and (b) at any time on or after October 3, 2048 at a price equal to par, plus, in either case, accrued but unpaid interest, if any, to but excluding the date of redemption.

<sup>(17)</sup> &nbsp;&nbsp;&nbsp;&nbsp;On September 12, 2019, Pembina re-opened its Medium Term Notes, Series 13 for $300 million aggregate principal amount.

<sup>(18)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Pembina may redeem the Medium Term Notes, Series 15, (a) at any time prior to November 1, 2029 at a price equal to the greater of (i) par and (ii) the Canada Yield Price and (b) at any time on or after November 1, 2029 at a price equal to par, plus, in either case, accrued but unpaid interest, if any, to but excluding the date of redemption.

<sup>(19)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Pembina may redeem the Medium Term Notes, Series 16, (a) at any time prior to November 28, 2049 at a price equal to the greater of (i) par and (ii) the Canada Yield Price and (b) at any time on or after November 28, 2049 at a price equal to par, plus, in either case, accrued but unpaid interest, if any, to but excluding the date of redemption.

<sup>(20)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Pembina may redeem the Medium Term Notes, Series 17, (a) at any time prior to September 10, 2031 at a price equal to the greater of (i) par and (ii) the Canada Yield Price and (b) at any time on or after September 10, 2031 at a price equal to par, plus, in either case, accrued but unpaid interest, if any, to but excluding the date of redemption.

<sup>(21)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Pembina may redeem the Medium Term Notes, Series 18, (a) at any time prior to June 10, 2051 at a price equal to the greater of (i) par and (ii) the Canada Yield Price and (b) at any time on or after June 10, 2051 at a price equal to par, plus, in either case, accrued but unpaid interest, if any, to but excluding the date of redemption.

<sup>(22)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Pembina may redeem the Medium Term Notes, Series 20, (a) at any time prior to October 12, 2031 at a price equal to the greater of (i) par and (ii) the Canada Yield Price and (b) at any time on or after October 12, 2031 at a price equal to par, plus, in either case, accrued but unpaid interest, if any, to but excluding the date of redemption.

<sup>(23)</sup> &nbsp;&nbsp;&nbsp;&nbsp;On June 28, 2024, Pembina re-opened its Medium Term Notes, Series 20 for $150 million aggregate principal amount.

<sup>(24)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Pembina may redeem the Medium Term Notes, Series 21, (a) at any time prior to October 12, 2033 at a price equal to the greater of (i) par and (ii) the Canada Yield Price and (b) at any time on or after October 12, 2033 at a price equal to par, plus, in either case, accrued but unpaid interest, if any, to but excluding the date of redemption.

<sup>(25)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Pembina may redeem the Medium Term Notes, Series 22, (a) at any time prior to July 12, 2053 at a price equal to the greater of (i) par and (ii) the Canada Yield Price and (b) at any time on or after July 12, 2053 at a price equal to par, plus, in either case, accrued but unpaid interest, if any, to but excluding the date of redemption.

<sup>(26)</sup> &nbsp;&nbsp;&nbsp;&nbsp;On June 28, 2024, Pembina re-opened its Medium Term Notes, Series 22 for $150 million aggregate principal amount.

<sup>(27)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Pembina may redeem the Medium Term Notes, Series 23, (a) at any time prior to March 28, 2033 at a price equal to the greater of (i) par and (ii) the Canada Yield Price and (b) at any time on or after March 28, 2033 at a price equal to par, plus, in either case, accrued but unpaid interest, if any, to but excluding the date of redemption.

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**Subordinated Notes** 

*Subordinated Notes, Series 1*

<u>Consent and Proxy Solicitation</u> 

On July 23, 2025, Pembina announced the approval of amendments to the Hybrid Note Indenture governing Pembina's Subordinated Notes, Series 1. The Hybrid Note Indenture amendments provided for, among other things, the exchange (the "**Note Exchange**") of all of the outstanding Subordinated Notes, Series 1 for an equal principal amount of Subordinated Notes, Series 3. The Subordinated Notes, Series 3 have the same economic terms as the Subordinated Notes, Series 1 including interest rate, interest payment dates, interest reset dates, maturity date and redemption provisions, but do not provide for an entitlement to delivery of Series 2021-A Class A Preferred Shares upon the occurrence of certain bankruptcy and related events. The Note Exchange was completed on July 25, 2025, following the execution of the supplemental indenture implementing the amendments to the Hybrid Note Indenture.

*Subordinated Notes, Series 2*

<u>Interest and Maturity</u>

Pembina will pay interest on the Subordinated Notes, Series 2 semi-annually, in arrears, on June 6 and December 6 of each year. From June 6, 2025 to June 6, 2035, the Subordinated Notes, Series 2 will bear interest at 5.95 percent per annum. From June 6, 2035, and on every fifth anniversary of such date, the interest rate on the Subordinated Notes, Series 2 will reset for the subsequent five-year period at a rate per annum equal to the Five Year Government of Canada Yield, plus 2.713%. In respect of the Subordinated Notes, "**Five Year Government of Canada Yield**" means the bid yield to maturity (assuming semi-annual compounding) of a Canadian dollar denominated non-callable Government of Canada bond with a term to maturity of five years, provided that, if such rate is not publicly available, "**Five Year Government of Canada Yield**" means the average of the yields determined by two registered Canadian investment dealers (each of which is a member of the Canadian Investment Regulatory Organization), selected by Pembina, as being the yield to maturity (assuming semi-annual compounding) which a Canadian dollar denominated non-callable Government of Canada bond would carry if issued in Canadian dollars at 100 percent of its principal amount on such date with a term to maturity of five years.

The Subordinated Notes, Series 2 mature on June 6, 2055. As of December 31, 2025, there is $425 million aggregate principal amount of Subordinated Notes, Series 2 outstanding.

<u>Deferral Right</u>

So long as no event of default under the Subordinated Note Indenture has occurred and is continuing, Pembina may elect, on any date other than an interest payment date, to defer the interest payable on the Subordinated Notes, Series 2 on one or more occasions for up to five consecutive years. There is no limit on the number of interest deferrals on the Subordinated Notes, Series 2 that may occur.

<u>Redemption</u>

Subject to certain conditions from March 6, 2035 to June 6, 2035 and on any interest payment date or any interest reset date, as applicable, Pembina may redeem the Subordinated Notes, Series 2, at a redemption price equal to par, plus accrued and unpaid (including deferred, as applicable) interest to the date fixed for redemption. Pembina may also redeem the Subordinated Notes, Series 2 in certain other limited circumstances.

*Subordinated Notes, Series 3*

<u>Interest and Maturity</u>

Pembina will pay interest on the Subordinated Notes, Series 3 semi-annually, in arrears, on January 25 and July 25 of each year. From July 25, 2025 to January 25, 2031, the Subordinated Notes, Series 3 will bear interest at 4.80 percent per annum. From January 25, 2031, and on every fifth anniversary of such date, the interest rate on the Subordinated Notes, Series 3 will reset for the subsequent five-year period at a rate per annum equal to the Five Year Government of Canada Yield, plus (i) for the period from January 25, 2031 to January 25, 2051, 4.167 percent; and (ii) for the period from January 25, 2051 to January 25, 2081, 4.917 percent.

------

The Subordinated Notes, Series 3 mature on January 25, 2081. As of December 31, 2025, there is $600 million aggregate principal amount of Subordinated Notes, Series 3 outstanding.

<u>Deferral Right</u>

So long as no event of default under the Subordinated Note Indenture has occurred and is continuing, Pembina may elect, on any date other than an interest payment date, to defer the interest payable on the Subordinated Notes, Series 3 on one or more occasions for up to five consecutive years. There is no limit on the number of interest deferrals on the Subordinated Notes, Series 3 that may occur.

<u>Redemption</u>

Subject to certain conditions from October 25, 2030 to January 25, 2031 and on any interest payment date or any interest reset date, as applicable, Pembina may redeem the Subordinated Notes, Series 3, at a redemption price equal to par, plus accrued and unpaid (including deferred, as applicable) interest to the date fixed for redemption. Pembina may also redeem the Subordinated Notes, Series 3 in certain other limited circumstances.

**Credit Ratings**

The following information with respect to Pembina's credit ratings is provided as it relates to Pembina's financing costs and liquidity. Specifically, credit ratings affect Pembina's ability to obtain short-term and long-term financing and impact the cost of such financing. A reduction in the current ratings on Pembina's debt by its rating agencies, particularly a downgrade below investment grade ratings, could adversely affect Pembina's cost of financing and its access to sources of liquidity and capital. In addition, changes in credit ratings may affect Pembina's ability to enter into, and the associated costs of entering into, normal course derivative or hedging transactions. Credit ratings are intended to provide investors with an independent measure of credit quality of any issues of debt securities.

Pembina has paid each of S&P and DBRS their customary fees in connection with the provision of the below ratings. Pembina has not made any payments to S&P or DBRS over the past two years for services unrelated to the provision of such ratings.

*DBRS Limited*

DBRS has assigned a debt rating of 'BBB (high)' to each issued senior unsecured note of Pembina and assigned a debt rating of 'BBB (low)' to the Subordinated Notes, Series 2 and Subordinated Notes, Series 3.

The 'BBB' rating is the fourth highest rating of DBRS's ten rating categories for long-term debt, which range from 'AAA' to 'D'. The 'BBB' rating indicates that, in DBRS's view, the rated securities are of adequate investment grade credit quality. The capacity for the payment of financial obligations is considered acceptable; however, the issuer may be vulnerable to future events. DBRS uses "high" and "low" designations on ratings from 'AA' to 'C' to indicate the relative standing of securities being rated within a particular rating category. The absence of a "high" or "low" designation indicates that a rating is in the middle of the category.

Each issued series of Class A Preferred Shares has been rated 'Pfd-3 (high)' by DBRS. The Pfd-3 rating is the third highest of six rating categories for preferred shares, which range from a high of Pfd-1 to a low of D. "High" or "low" grades are used to indicate the relative standing within a rating category. The absence of either a "high" or "low" designation indicates the rating is in the middle of the category. According to the DBRS rating system, preferred shares rated Pfd-3 are of adequate credit quality. While protection of dividends and principal is still considered acceptable, the issuing entity is more susceptible to adverse changes in financial and economic conditions, and there may be other adverse conditions present which detract from debt protection.

When a significant event occurs that directly impacts the credit quality of a particular entity or group of entities, DBRS will attempt to provide an immediate rating opinion. However, if there is uncertainty regarding the outcome of the event, and DBRS is unable to provide an objective, forward-looking opinion in a timely fashion, then the ratings of the issuer will be placed "Under Review".

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*S&P*

S&P has assigned a long-term corporate credit rating on Pembina of 'BBB'. S&P has assigned a rating of 'BBB' to each issued senior unsecured note and a rating of 'BB+' to the Subordinated Notes, Series 2 and Subordinated Notes, Series 3.

The 'BBB' rating is the fourth highest rating of S&P's ten rating categories for issuances of long-term debt which range from 'AAA' to 'D'. Issues of debt securities rated 'BBB' are judged by S&P to exhibit adequate protection parameters; however, adverse economic conditions or changing circumstances are more likely to weaken the obligor's capacity to meet its financial commitment on the obligation. The 'BB' rating is the fifth highest rating of S&P's ten rating categories for issues of long-term debt. Issues of debt securities rated 'BB' are, according to the S&P rating system, regarded as having significant speculative characteristics. While such securities will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions. An obligation rated 'BB' is less vulnerable to non-payment than other speculative issues; however, S&P regards the obligor as facing major ongoing uncertainties or exposure to adverse business, financial or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation. Ratings from 'AA' to 'CCC' may be modified by the addition of a plus (+) or minus (–) sign to show relative standing within the major rating categories.

Each issued series of Class A Preferred Shares has been rated 'P-3 (High)' by S&P. S&P's ratings for preferred shares range from a high of 'P-1' to a low of 'D'. "High" or "low" grades are used to indicate the relative standing within a rating category. According to the S&P rating system, securities rated P-3 are regarded as having significant speculative characteristics. While such securities will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions. An obligation rated P-3 (High) is less vulnerable to non-payment than other speculative issues; however, it faces major ongoing uncertainties or exposure to adverse business, financial or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.

**These securities ratings are not recommendations to purchase, hold or sell the securities in as much as such ratings do not comment as to market price or suitability for a particular investor. There is no assurance that any rating will remain in effect for any given period of time or that any rating will not be revised or withdrawn entirely by a rating agency in the future if, in its judgment, circumstances so warrant.**

See "*Risk Factors – General Risk Factors – Credit Ratings*".

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**DIVIDENDS AND DISTRIBUTIONS**

**Cash Dividends**

The declaration and payment of any dividend by Pembina is at the discretion of the Board of Directors and will depend on numerous factors, including compliance with applicable laws and the financial performance, debt obligations, working capital requirements and future capital requirements of Pembina and its subsidiaries. See "*Risk Factors*". The agreements governing Pembina's credit facilities provide that if an event of default has occurred under the credit facilities, the indebtedness may be accelerated by the lenders, and the ability to pay dividends thereupon ceases. Pembina is restricted from making distributions (including the declaration of dividends) if it is in default under its credit facilities (or a default would be expected to occur as a result of such distribution).

*Common Shares*

Quarterly Common Share dividend payments are made on the last business day of March, June, September, and December to shareholders of record on the 15<sup>th</sup> day of the corresponding month, if, as and when declared by the Board of Directors. Should the record date fall on a weekend or on a statutory holiday, the record date will be the next succeeding business day following the weekend or statutory holiday.

The following table sets forth the amount of quarterly cash dividends paid by Pembina on its Common Shares in 2023, 2024 and 2025.

**Cash Dividends Per Common Share**

---

| | | | |
|:---|:---|:---|:---|
| **Month of Payment Date** | **2023** | **2024** | **2025** |
| March | $0.6525 | $0.6675 | $0.69 |
| June | $0.6675<sup>(1)</sup> | $0.69<sup>(2)</sup> | $0.71<sup>(3)</sup> |
| September | $0.6675 | $0.69 | $0.71 |
| December | $0.6675 | $0.69 | $0.71 |
| **Total** | **$2.6550** | **$2.7375** | **$2.8400** |

---

**Notes:**

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;On May 4, 2023, Pembina announced an increase to its quarterly dividend from $0.6525 to $0.6675.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;On May 9, 2024, Pembina announced an increase to its quarterly dividend from $0.6675 to $0.69.

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;On May 8, 2025, Pembina announced an increase to its quarterly dividend from $0.69 to $0.71.

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*Class A Preferred Shares*

Dividends on each issued series of Class A Preferred Shares (excluding the Series 15, 17 and 25 Class A Preferred Shares) are payable on the first calendar day of March, June, September, and December of each year, if, as and when declared by the Board. Dividends on the Series 15 and 17 Class A Preferred Shares are payable on the last calendar day of March, June, September, and December of each year, if, as and when declared by the Board. Dividends on the Series 25 Class A Preferred Shares are payable on the 15<sup>th</sup> calendar day of February, May, August and November of each year, if, as and when declared by the Board. Additional information regarding dividends payable on the Class A Preferred Shares can be found under the heading "*Description of the Capital Structure of Pembina – Class A Preferred Shares*" herein.

The following table sets forth the amount of quarterly cash dividends paid by Pembina on its Class A Preferred Shares in 2023, 2024, 2025 and to date in 2026.

**Cash Dividends Per Class A Preferred Share**

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| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Quarterly Payment Date**<sup>(1)</sup> | **Series**<br>**1** | **Series**<br>**3** | **Series**<br>**5** | **Series**<br>**7** | **Series**<br>**9**<sup>(2)</sup> | **Series**<br>**15** | **Series**<br>**17** | **Series**<br>**19**<sup>(3)</sup> | **Series**<br>**21** | **Series**<br>**22**<sup>(4)</sup> | **Series** <br>**25** | **Total** |
| **2023** |  |  |  |  |  |  |  |  |  |  |  |  |
| Feb | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | $0.325000 | $0.325000 |
| Mar | $0.306625 | $0.279875 | $0.285813 | $0.273750 | $0.268875 | $0.385250 | $0.301313 | $0.292750 | $0.306250 | N/A | N/A | $2.700501 |
| May | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | $0.405063 | $0.405063 |
| June | $0.306625 | $0.279875 | $0.285813 | $0.273750 | $0.268875 | $0.385250 | $0.301313 | $0.292750 | $0.393875 | $0.485584 | N/A | $3.273710 |
| Aug | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | $0.405063 | $0.405063 |
| Sept | $0.306625 | $0.279875 | $0.285813 | $0.273750 | $0.268875 | $0.385250 | $0.301313 | $0.292750 | $0.393875 | $0.485836 | N/A | $3.273962 |
| Nov | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | $0.405063 | $0.405063 |
| Dec | $0.306625 | $0.279875 | $0.285813 | $0.273750 | $0.268875 | $0.385250 | $0.301313 | $0.292750 | $0.393875 | $0.519386 | N/A | $3.307512 |
| **2024** |  |  |  |  |  |  |  |  |  |  |  |  |
| Feb | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | $0.405063 | $0.405063 |
| Mar | $0.407813 | $0.279875 | $0.285813 | $0.273750 | $0.268875 | $0.385250 | $0.301313 | $0.292750 | $0.393875 | $0.523436 | N/A | $3.412750 |
| May | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | $0.405063 | $0.405063 |
| June | $0.407813 | $0.376188 | $0.285813 | $0.273750 | $0.268875 | $0.385250 | $0.412813 | $0.292750 | $0.393875 | $0.521019 | N/A | $3.618146 |
| Aug | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | $0.405063 | $0.405063 |
| Sept | $0.407813 | $0.376188 | $0.425875 | $0.273750 | $0.268875 | $0.385250 | $0.412813 | $0.292750 | $0.393875 | $0.515301 | N/A | $3.752490 |
| Nov | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | $0.405063 | $0.405063 |
| Dec | $0.407813 | $0.376188 | $0.425875 | $0.273750 | $0.268875 | $0.385250 | $0.412813 | $0.292750 | $0.393875 | $0.476693 | N/A | $3.713882 |
| **2025** |  |  |  |  |  |  |  |  |  |  |  |  |
| Feb | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | $0.405063 | $0.405063 |
| Mar | $0.407813 | $0.376188 | $0.425875 | $0.372063 | $0.268875 | $0.385250 | $0.412813 | $0.292750 | $0.393875 | N/A | N/A | $3.335502 |
| May | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | $0.405063 | $0.405063 |
| June | $0.407813 | $0.376188 | $0.425875 | $0.372063 | $0.268875 | $0.385250 | $0.412813 | $0.292750 | $0.393875 | N/A | N/A | $3.335502 |
| Aug | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | $0.405063 | $0.405063 |
| Sept | $0.407813 | $0.376188 | $0.425875 | $0.372063 | $0.268875 | $0.385250 | $0.412813 | N/A | $0.393875 | N/A | N/A | $3.042752 |
| Nov | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | $0.405063 | $0.405063 |
| Dec | $0.407813 | $0.376188 | $0.425875 | $0.372063 | $0.268875 | $0.385250 | $0.412813 | N/A | $0.393875 | N/A | N/A | $3.042752 |
| **2026** |  |  |  |  |  |  |  |  |  |  |  |  |
| Feb | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | $0.405063 | $0.405063 |
| Mar<sup>(5)</sup> | $0.407813 | $0.376188 | $0.425875 | $0.372063 | N/A | $0.385250 | $0.412813 | N/A | $0.393875 | N/A | N/A | $2.773877 |

---

**Notes:**

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;A holder of Series 1, 3, 5, 7 and 21 Class A Preferred Shares is entitled to receive a fixed, cumulative preferential dividend payable quarterly on the first calendar day of March, June, September and December, as declared by the Board of Directors. Prior to the redemption of the Series 22 Class A Preferred Shares in January 2025, a holder of Series 22 Class A Preferred Shares was entitled to receive a floating rate, cumulative preferential dividend payable quarterly on the first calendar day of March, June, September and December, as declared by the Board of Directors. Prior to the redemption of the Series 9 Class A Preferred Shares in December 2025, a holder of Series 9 Class A Preferred Shares was entitled to receive a fixed, cumulative preferential dividend payable quarterly on the first calendar day of March, June, September and December, as declared by the Board of Directors. A holder of Series 15 and 17 Class A Preferred Shares is entitled to receive a fixed, cumulative preferential dividend payable quarterly on the last calendar day of March, June, September and December, as declared by the Board of Directors. Prior to the redemption of the Series 19 Class A Preferred Shares in June 2025, a holder of Series 19 Class A Preferred Shares was entitled to receive a fixed rate, cumulative preferential dividend payable quarterly on the last calendar day of March, June,

------

September and December, as declared by the Board of Directors. A holder of Series 25 Class A Preferred Shares is entitled to receive a fixed, cumulative preferential dividend payable quarterly on the 15<sup>th</sup> calendar day of February, May, August and November, as declared by the Board of Directors.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;On December 1, 2025, Pembina redeemed all of its 9,000,000 issued and outstanding Series 9 Class A Preferred Shares for a redemption price equal to $25.00 per Series 9 Class A Preferred Share.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;On June 30, 2025, Pembina redeemed all of its 8,000,000 issued and outstanding Series 19 Class A Preferred Shares for a redemption price equal to $25.00 per Series 19 Class A Preferred Share.

<sup>(4)</sup> &nbsp;&nbsp;&nbsp;&nbsp;On January 8, 2025, Pembina redeemed all of its 1,028,130 issued and outstanding Series 22 Class A Preferred Shares for a redemption price equal to $25.50 per Series 22 Class A Preferred Share, plus all accrued and unpaid dividends thereon to but excluding the date fixed for redemption.

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;On January 20, 2026, Pembina announced that the Board of Directors had declared a quarterly dividend of $0.407813 per Series 1 Class A Preferred Share, $0.376188 per Series 3 Class A Preferred Share, $0.425875 per Series 5 Class A Preferred Share, $0.372063 per Series 7 Class A Preferred Share and $0.393875 per Series 21 Class A Preferred Share to be paid, subject to applicable law, on March 2, 2026 to holders of record on February 2, 2026. On January 20, 2026, Pembina announced that the Board of Directors had declared a quarterly dividend of $0.385250 per Series 15 Class A Preferred Share and $0.412813 per Series 17 Class A Preferred Share to be paid, subject to applicable law, on March 31, 2026 to holders of record on March 16, 2026.

**MARKET FOR SECURITIES**

**Trading Price and Volume**

The Common Shares are listed and traded on the TSX under the symbol "PPL". The Common Shares are also listed on the NYSE under the trading symbol "PBA". The following table sets forth the price ranges for and trading volumes of the Common Shares on the TSX and on the NYSE for 2025.

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **TSX (PPL)**<sup>(1)</sup> | **TSX (PPL)**<sup>(1)</sup> | **TSX (PPL)**<sup>(1)</sup> | **TSX (PPL)**<sup>(1)</sup> | **NYSE (PBA)**<sup>(1)</sup> | **NYSE (PBA)**<sup>(1)</sup> | **NYSE (PBA)**<sup>(1)</sup> | **NYSE (PBA)**<sup>(1)</sup> |
| **Month** | **High ($)** | **Low ($)** | **Close ($)** | **Volume** | **High (US$)** | **Low (US$)** | **Close (US$)** | **Volume** |
| January | 54.92 | 51.94 | 52.46 | 41146748 | 38.07 | 35.94 | 36.11 | 9358211 |
| February | 56.44 | 50.85 | 56.24 | 52379918 | 39.03 | 34.76 | 38.87 | 11098117 |
| March | 58.12 | 53.33 | 57.56 | 105751810 | 40.68 | 37.20 | 40.03 | 10949175 |
| April | 58.58 | 48.35 | 52.70 | 66834439 | 41.08 | 34.14 | 38.20 | 7460482 |
| May | 54.98 | 51.06 | 51.43 | 64134457 | 39.64 | 36.82 | 37.48 | 12094834 |
| June | 52.86 | 49.86 | 51.13 | 107241875 | 38.96 | 36.49 | 37.51 | 13199145 |
| July | 51.82 | 49.39 | 51.50 | 55510885 | 37.79 | 36.12 | 37.19 | 6761692 |
| August | 53.10 | 48.74 | 51.87 | 59644867 | 38.28 | 35.45 | 37.77 | 11229843 |
| September | 57.00 | 51.33 | 56.27 | 83905555 | 40.88 | 37.22 | 40.46 | 10316976 |
| October | 59.20 | 52.17 | 53.06 | 60428164 | 42.39 | 37.37 | 37.83 | 9243803 |
| November | 54.85 | 51.21 | 54.17 | 58259906 | 39.10 | 36.42 | 38.99 | 8431090 |
| December | 55.20 | 50.60 | 52.29 | 79903030 | 39.89 | 36.72 | 38.06 | 10937153 |

---

**Note:**

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Sources: TMX Datalinx (PPL) and Bloomberg (PBA). The above table includes only the monthly price ranges for and trading volumes of the Common Shares on the TSX (PPL) and NYSE (PBA).

The Series 1 Class A Preferred Shares, Series 3 Class A Preferred Shares, Series 5 Class A Preferred Shares, Series 7 Class A Preferred Shares, Series 15 Class A Preferred Shares, Series 17 Class A Preferred Shares, Series 21 Class A Preferred Shares and Series 25 Class A Preferred Shares are listed and traded on the TSX under the symbols "PPL.PR.A", "PPL.PR.C", "PPL.PR.E", "PPL.PR.G", "PPL.PR.O", "PPL.PR.Q", "PPL.PF.A" and "PPL.PF.E", respectively. The following tables set forth the price range for and trading volume of the Series 1, Series 3, Series 5, Series 7, Series 15, Series 17, Series 21, and Series 25 Class A Preferred Shares on the TSX for 2025.

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Series 1 (PPL.PR.A)**<sup>(1)</sup> | **Series 1 (PPL.PR.A)**<sup>(1)</sup> | **Series 1 (PPL.PR.A)**<sup>(1)</sup> | **Series 1 (PPL.PR.A)**<sup>(1)</sup> | **Series 3 (PPL.PR.C)**<sup>(1)</sup> | **Series 3 (PPL.PR.C)**<sup>(1)</sup> | **Series 3 (PPL.PR.C)**<sup>(1)</sup> | **Series 3 (PPL.PR.C)**<sup>(1)</sup> | **Series 5 (PPL.PR.E)**<sup>(1)</sup> | **Series 5 (PPL.PR.E)**<sup>(1)</sup> | **Series 5 (PPL.PR.E)**<sup>(1)</sup> | **Series 5 (PPL.PR.E)**<sup>(1)</sup> |
| **Month** | **High ($)** | **Low ($)** | **Close ($)** | **Volume** | **High ($)** | **Low ($)** | **Close ($)** | **Volume** | **High ($)** | **Low ($)** | **Close ($)** | **Volume** |
| January | 23.63 | 23.00 | 23.40 | 104449 | 22.63 | 21.60 | 22.55 | 83731 | 25.00 | 24.20 | 24.70 | 240980 |
| February | 23.14 | 22.70 | 22.75 | 74982 | 22.41 | 21.99 | 22.25 | 40845 | 24.50 | 23.81 | 23.85 | 82492 |
| March | 22.75 | 22.22 | 22.69 | 101079 | 22.46 | 22.00 | 22.46 | 77491 | 24.21 | 23.50 | 24.21 | 126468 |
| April | 22.93 | 20.76 | 22.15 | 167287 | 22.67 | 20.49 | 21.17 | 252698 | 24.41 | 22.38 | 23.50 | 203161 |
| May | 23.13 | 21.79 | 23.13 | 68005 | 22.74 | 21.10 | 22.74 | 73458 | 24.78 | 23.15 | 24.76 | 154175 |
| June | 24.25 | 23.13 | 24.25 | 149645 | 24.40 | 22.69 | 24.40 | 86874 | 25.40 | 24.75 | 25.35 | 292313 |
| July | 24.73 | 24.07 | 24.72 | 194624 | 25.00 | 24.45 | 24.80 | 169107 | 25.77 | 25.25 | 25.72 | 125330 |
| August | 24.75 | 24.30 | 24.74 | 218356 | 24.77 | 24.32 | 24.60 | 31338 | 25.49 | 25.00 | 25.27 | 86948 |
| September | 24.75 | 24.43 | 24.75 | 86008 | 24.68 | 24.40 | 24.46 | 379725 | 25.52 | 25.09 | 25.46 | 73901 |

---

------

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Series 1 (PPL.PR.A)**<sup>(1)</sup> | **Series 1 (PPL.PR.A)**<sup>(1)</sup> | **Series 1 (PPL.PR.A)**<sup>(1)</sup> | **Series 1 (PPL.PR.A)**<sup>(1)</sup> | **Series 3 (PPL.PR.C)**<sup>(1)</sup> | **Series 3 (PPL.PR.C)**<sup>(1)</sup> | **Series 3 (PPL.PR.C)**<sup>(1)</sup> | **Series 3 (PPL.PR.C)**<sup>(1)</sup> | **Series 5 (PPL.PR.E)**<sup>(1)</sup> | **Series 5 (PPL.PR.E)**<sup>(1)</sup> | **Series 5 (PPL.PR.E)**<sup>(1)</sup> | **Series 5 (PPL.PR.E)**<sup>(1)</sup> |
| **Month** | **High ($)** | **Low ($)** | **Close ($)** | **Volume** | **High ($)** | **Low ($)** | **Close ($)** | **Volume** | **High ($)** | **Low ($)** | **Close ($)** | **Volume** |
| October | 25.17 | 24.47 | 25.17 | 82337 | 24.95 | 24.45 | 24.89 | 51721 | 25.94 | 25.30 | 25.94 | 101921 |
| November | 25.14 | 23.56 | 24.68 | 230414 | 24.77 | 24.00 | 24.53 | 35095 | 25.78 | 25.29 | 25.70 | 65171 |
| December | 24.96 | 24.47 | 24.83 | 57751 | 24.95 | 24.39 | 24.80 | 104761 | 25.87 | 25.41 | 25.63 | 85546 |

---

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Series 7 (PPL.PR.G)**<sup>(1)</sup> | **Series 7 (PPL.PR.G)**<sup>(1)</sup> | **Series 7 (PPL.PR.G)**<sup>(1)</sup> | **Series 7 (PPL.PR.G)**<sup>(1)</sup> | **Series 15 (PPL.PR.O)**<sup>(1)</sup> | **Series 15 (PPL.PR.O)**<sup>(1)</sup> | **Series 15 (PPL.PR.O)**<sup>(1)</sup> | **Series 15 (PPL.PR.O)**<sup>(1)</sup> | **Series 17 (PPL.PR.Q)**<sup>(1)</sup> | **Series 17 (PPL.PR.Q)**<sup>(1)</sup> | **Series 17 (PPL.PR.Q)**<sup>(1)</sup> | **Series 17 (PPL.PR.Q)**<sup>(1)</sup> |
| **Month** | **High ($)** | **Low ($)** | **Close ($)** | **Volume** | **High ($)** | **Low ($)** | **Close ($)** | **Volume** | **High ($)** | **Low ($)** | **Close ($)** | **Volume** |
| January | 23.15 | 22.10 | 23.00 | 305218 | 23.42 | 22.52 | 23.42 | 116351 | 24.70 | 23.83 | 24.47 | 79497 |
| February | 22.88 | 22.46 | 22.65 | 57045 | 23.53 | 23.15 | 23.23 | 49351 | 24.52 | 24.07 | 24.19 | 90189 |
| March | 22.74 | 22.45 | 22.59 | 286041 | 23.52 | 23.06 | 23.36 | 56763 | 24.14 | 23.79 | 24.13 | 69581 |
| April | 22.90 | 20.91 | 21.75 | 69729 | 23.57 | 21.35 | 22.08 | 168091 | 24.50 | 22.37 | 23.00 | 69701 |
| May | 23.24 | 21.54 | 23.22 | 127498 | 23.69 | 22.35 | 23.69 | 38982 | 24.74 | 22.99 | 24.60 | 35733 |
| June | 24.40 | 23.01 | 24.39 | 511002 | 24.79 | 23.68 | 24.79 | 83761 | 25.22 | 24.53 | 25.00 | 57309 |
| July | 24.90 | 24.53 | 24.89 | 104591 | 25.38 | 24.70 | 25.05 | 97218 | 25.24 | 24.79 | 25.16 | 132955 |
| August | 24.80 | 24.28 | 24.64 | 89725 | 25.97 | 24.58 | 24.94 | 41678 | 25.40 | 25.00 | 25.27 | 44622 |
| September | 24.84 | 24.52 | 24.84 | 260905 | 24.99 | 24.51 | 24.85 | 118604 | 25.50 | 25.00 | 25.28 | 118418 |
| October | 25.34 | 24.75 | 25.34 | 97787 | 25.54 | 24.60 | 25.54 | 81158 | 25.60 | 25.10 | 25.55 | 46067 |
| November | 25.14 | 24.57 | 25.05 | 136163 | 25.59 | 24.55 | 25.13 | 113090 | 25.71 | 25.02 | 25.58 | 34202 |
| December | 25.36 | 25.00 | 25.27 | 369491 | 25.52 | 24.95 | 25.40 | 54410 | 25.87 | 25.25 | 25.49 | 54891 |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Series 21 (PPL.PF.A)**<sup>(1)</sup> | **Series 21 (PPL.PF.A)**<sup>(1)</sup> | **Series 21 (PPL.PF.A)**<sup>(1)</sup> | **Series 21 (PPL.PF.A)**<sup>(1)</sup> | **Series 25 (PPL.PF.E)**<sup>(1)</sup> | **Series 25 (PPL.PF.E)**<sup>(1)</sup> | **Series 25 (PPL.PF.E)**<sup>(1)</sup> | **Series 25 (PPL.PF.E)**<sup>(1)</sup> |
| **Month** | **High ($)** | **Low ($)** | **Close ($)** | **Volume** | **High ($)** | **Low ($)** | **Close ($)** | **Volume** |
| January | 24.78 | 23.99 | 24.60 | 88155 | 25.71 | 24.60 | 25.35 | 125921 |
| February | 24.41 | 23.85 | 24.25 | 86899 | 25.10 | 24.72 | 24.72 | 84479 |
| March | 24.60 | 24.00 | 24.60 | 69362 | 24.80 | 23.89 | 24.70 | 146223 |
| April | 25.00 | 23.22 | 23.97 | 199919 | 24.99 | 23.12 | 24.47 | 157292 |
| May | 25.14 | 23.50 | 24.78 | 72513 | 25.20 | 24.40 | 25.14 | 65226 |
| June | 25.44 | 24.85 | 25.44 | 107796 | 25.67 | 25.05 | 25.67 | 68012 |
| July | 25.50 | 25.00 | 25.46 | 147632 | 25.80 | 25.35 | 25.53 | 109746 |
| August | 25.24 | 24.90 | 25.15 | 87791 | 25.58 | 25.02 | 25.30 | 82065 |
| September | 25.43 | 25.12 | 25.40 | 334926 | 25.80 | 25.35 | 25.80 | 47536 |
| October | 25.97 | 25.29 | 25.97 | 112027 | 25.97 | 25.48 | 25.85 | 72294 |
| November | 25.85 | 25.34 | 25.59 | 394672 | 26.16 | 25.57 | 25.86 | 47222 |
| December | 25.86 | 25.35 | 25.86 | 62982 | 26.22 | 25.63 | 26.11 | 52054 |

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**DIRECTORS AND OFFICERS**

**Directors of Pembina** 

The following table sets out the name and residence for each director of Pembina as of the date of this Annual Information Form, the date on which they were appointed as a director of Pembina and their principal occupations during the past five years.

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| | | |
|:---|:---|:---|
| **Name and Residence** | **Date Appointed** | **Principal Occupation<br>During the Past Five Years** |
| Henry W. Sykes<sup>(1)(6)</sup><br>Calgary, Alberta, Canada | October 2, 2017 | Independent businessman since 2014; prior thereto, the President and director of MGM Energy Corp. from January 2007 to June 2014; prior thereto, President of ConocoPhillips Canada from 2001 to 2006; prior thereto, Executive Vice-President, Business Development of Gulf Canada Resources Ltd. |

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| | | |
|:---|:---|:---|
| **Name and Residence** | **Date Appointed** | **Principal Occupation<br>During the Past Five Years** |
| Anne-Marie N. Ainsworth<sup>(4)(5)</sup><br>Houston, Texas, U.S. | October 7, 2014 | Independent businesswoman since 2014; prior thereto, President and Chief Executive Officer of the general partner of Oiltanking Partners, L.P. and Oiltanking Holding Americas, Inc. from November 2012 to March 2014; prior thereto, Senior Vice President of Refining of Sunoco Inc. from November 2009 to March 2012. Currently a member of the board of directors of Archrock, Inc., Kirby Corporation and HF Sinclair Corporation. |
| J. Scott Burrows<br>Calgary, Alberta, Canada | February 22, 2022 | President and Chief Executive Officer of Pembina since February 2022; prior thereto, interim President and Chief Executive Officer of Pembina since November 2021; prior thereto, Senior Vice President and Chief Financial Officer of Pembina since July 2017; prior thereto, Vice President, Finance and Chief Financial Officer of Pembina since January 2015. Currently a member of the board of directors of National Bank of Canada. |
| Cynthia Carroll<sup>(3)(4)</sup><br>Naples, Florida, U.S. | May 8, 2020 | Independent businesswoman since 2013; prior thereto, Chief Executive Officer of Anglo American plc from 2007 to 2013, and prior thereto, held various executive roles at Alcan Aluminum Corporation, including President of Bauxite, Alumina and Specialty Chemicals and Chief Executive Officer of the Primary Metal Group, Alcan's core business. Currently a member of the board of directors of Baker Hughes Company and Glencore plc. |
| Alister Cowan<sup>(2)(3)</sup><br>Calgary, Alberta, Canada | December 3, 2024 | Independent businessman since 2023; prior thereto, Executive Advisor of Suncor Energy Inc. ("**Suncor**") in 2023 and Chief Financial Officer of Suncor from 2014 to 2023; prior thereto, Chief Financial Officer of Husky Energy Inc. from 2008 to 2014; prior thereto Executive Vice President and Chief Financial Officer and Chief Compliance Officer of British Columbia Hydro and Power Authority from 2004 to 2008. Currently the independent lead director of The Chemours Company and a director of Smiths Group plc. |
| Ana Dutra<sup>(3)(5)(7)</sup><br>Indian River Shores, Florida, U.S. | May 6, 2022 | Independent businesswoman since 2019; prior thereto, President and Chief Executive Officer of The Executives' Club of Chicago from 2014 to 2018. Currently a member of the board of directors of Carparts.com, Inc. |
| Maureen E. Howe<sup>(2)(5)</sup><br>Vancouver, British Columbia, Canada | October 2, 2017 | Independent businesswoman since 2008; prior thereto, a Research Analyst and Managing Director at RBC Capital Markets from 1996 to 2008. Currently a member of the board of directors of Methanex Corporation and Freehold Royalties Ltd. |
| David M.B. LeGresley<sup>(3)(5)</sup><br>Toronto, Ontario, Canada | August 16, 2010 | Independent businessman since 2008, including serving as the Chair of the board of directors of EQB Inc. (formerly Equitable Group Inc.) from 2014 to 2023; prior thereto, Vice Chairman of National Bank Financial from 2006 to 2008 and Executive Vice President, Corporate and Investment Banking from 1999 to 2006. |
| Andy J. Mah<sup>(2)(3)</sup><br>Calgary, Alberta, Canada | February 24, 2023 | Independent businessman since 2022; prior thereto, Chief Executive Officer of Advantage Energy Ltd. ("**Advantage**") from January 2009 to December 2021; prior thereto, President of Advantage from June 2006 to January 2009.  |
| Leslie A. O'Donoghue<sup>(2)(4)</sup><br>Calgary, Alberta, Canada | December 17, 2008 | Independent businesswoman since 2020; prior thereto, Executive Advisor to the Chief Executive Officer in 2019 and Executive Vice President and Chief Strategy & Corporate Development Officer of Nutrien Ltd. from 2018 to 2019; prior thereto, Executive Vice President, Corporate Development and Strategy and Chief Risk Officer of Agrium Inc., which merged with Potash Corporation of Saskatchewan to form Nutrien Ltd., from 2012 to 2018. Currently a member of the board of directors of Methanex Corporation. |
| Bruce D. Rubin<sup>(2)(4)</sup><br>Swarthmore, Pennsylvania, U.S. | May 5, 2017 | Independent businessman since 2014; Chief Executive Officer of Braskem America, Inc. and an executive with Braskem America, Inc. from 2010 until 2013; prior thereto, Chief Executive Officer of Sunoco Chemicals and Senior Vice President of Sunoco Inc. from 2008 until 2010. |

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**Notes**:

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Mr. Sykes was appointed Chair of the Board effective January 1, 2023.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Member of Audit Committee.

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<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Member of Human Resources and Compensation Committee.

<sup>(4)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Member of the Safety, Environment and Operational Excellence Committee.

<sup>(5)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Member of the Governance, Nominating and Corporate Social Responsibility Committee.

<sup>(6)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Mr. Sykes was a director of Parallel Energy Trust ("**Parallel**"), a TSX-listed company, from March 2011 until February 2016. On November 9, 2015, Parallel filed an application in the Alberta Court of Queen's Bench for creditor protection under the *Companies' Creditors Arrangement Act* (Canada) and filed voluntary petitions for relief under Chapter 11 of the *United States Bankruptcy Code*. In the Chapter 11 proceedings, the U.S. Bankruptcy Court approved the sale of the assets of Parallel and the sale closed on January 28, 2016. Further, on March 3, 2016, the Canadian entities of Parallel filed for bankruptcy under the *Bankruptcy and Insolvency Act* (Canada) and a notice to creditors was sent by the trustee on March 4, 2016.

<sup>(7)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Ms. Dutra was a director of Amyris, Inc. ("**Amyris**"), which was delisted from the Nasdaq Stock Exchange in August 2023. Amyris and certain of its American subsidiaries commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware in August 2023 in connection with an operational and financial restructuring. Amyris completed its Chapter 11 proceedings and its plan of reorganization became effective on May 7, 2024.

Shareholders elect the directors of Pembina at each annual meeting of the Shareholders. The directors of Pembina serve until the next annual meeting of the Shareholders or until their successors are duly elected or appointed. All of Pembina's directors are "independent" within the meaning of National Instrument 58–101 – *Disclosure of Corporate Governance Practices*, adopted by the Canadian Securities Administrators, with the exception of Mr. Burrows, who is President and Chief Executive Officer of Pembina. In addition, Pembina has adopted Director Independence Guidelines which meet or exceed the requirements set out in National Policy 58–201 – *Corporate Governance Guidelines*, National Instrument 52–110 – *Audit Committees*, the SEC rules and regulations, the *Sarbanes-Oxley Act of 2002* and the NYSE rules.

The Board of Directors has four standing committees, the Audit Committee, the Safety, Environment and Operational Excellence Committee, the Human Resources and Compensation Committee, and the Governance, Nominating and Corporate Social Responsibility Committee. Additional information regarding the responsibilities of these committees will be contained in Pembina's management information circular for its 2026 annual meeting of Shareholders.

**Executive Officers of Pembina**

The following table sets out the name, residence and office held with Pembina for each executive officer of the Company as at the date of this Annual Information Form, as well as their principal occupations during at least the past five years.

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| | | |
|:---|:---|:---|
| **Name and Residence** | **Office with Pembina** | **Principal Occupation<br>During the Past Five Years** |
| J. Scott Burrows<br>Calgary, Alberta, Canada | President and Chief Executive Officer | President and Chief Executive Officer since February 2022; prior thereto, interim President and Chief Executive Officer since November 2021; prior thereto, Senior Vice President and Chief Financial Officer since July 2017; prior thereto, Vice President, Finance and Chief Financial Officer since January 2015. |
| Cameron J. Goldade<br>Calgary, Alberta, Canada | Chief Financial Officer | Chief Financial Officer (previously Senior Vice President and Chief Financial Officer) since August 2022; prior thereto, interim Chief Financial Officer since November 2021; prior thereto, Vice President, Capital Markets since June 2017; prior thereto, Senior Manager of Capital Markets since January 2015. |
| Sarah J. Schwann<br>Calgary, Alberta, Canada | Chief Legal, People and Corporate Affairs Officer | Chief Legal, People and Corporate Affairs Officer since January 2026; prior thereto; Vice President, Technical Services since September 2024; prior thereto; Vice President, External Affairs since April 2020.  |
| Christopher S. Scherman<br>Houston, Texas, U.S. | Chief Marketing and Strategy Officer | Chief Marketing and Strategy Officer (previously Senior Vice President, Marketing and Strategy Officer) since March 2023; prior thereto, Vice President, Marketing since January 2020; prior thereto, Vice President, General Counsel and Corporate Secretary since October 2017. |
| Jaret A. Sprott<br>Calgary, Alberta, Canada | Chief Operating Officer | Chief Operating Officer (previously Senior Vice President and Chief Operating Officer) since February 2022; prior thereto, Senior Vice President and Chief Operating Officer, Facilities since January 2018; prior thereto, Vice President, Gas Services since January 2015. |

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| | | |
|:---|:---|:---|
| **Name and Residence** | **Office with Pembina** | **Principal Occupation<br>During the Past Five Years** |
| C. Ian Balfour<br>Calgary, Alberta, Canada | Senior Vice President, Project Delivery and Technical Excellence | Senior Vice President, Project Delivery and Technical Excellence since January 2026; prior thereto, Vice President, Gas and NGL Services since July 2024; prior thereto, Vice President NGL Services since May 2023; prior thereto Vice President, Conventional Pipelines since January 2020. |
| Carmen Lee-Essington<br>Calgary, Alberta, Canada | Senior Vice President, Operations | Senior Vice President, Operations since January 2026; prior thereto Vice President, CBU and OBU Services since July 2024; prior thereto Vice President, Conventional Pipelines since September 2023. |
| Christopher Rousch<br>Calgary, Alberta, Canada | Senior Vice President, Commercial and Customer Service | Senior Vice President, Commercial and Customer Service since January 2026; prior thereto Vice President, PGI, in the role of President and CEO of PGI since August 2022; prior thereto Vice President, Veresen, in the role of President and CEO of Veresen Midstream since January 2020. |

---

Effective as of December 31, 2025, each of Stu Taylor, former Senior Vice President and Corporate Development Officer, Janet Loduca, former Senior Vice President, External Affairs and Chief Legal and Sustainability Officer, and Eva Bishop, former Senior Vice President and Corporate Services Officer, retired from their positions as officers of Pembina. Mr. Taylor will remain as an advisor to Pembina to support the ongoing development of Pembina's LNG business.

Effective as of January 1, 2026, Ian Balfour was appointed as the Senior Vice President, Project Delivery and Technical Excellence of Pembina, Carmen Lee-Essington was appointed as the Senior Vice President, Operations of Pembina, Christopher Rousch was appointed as the Senior Vice President, Commercial and Customer Service of Pembina.

As at February 25, 2026, the directors and executive officers of Pembina beneficially owned, or controlled or directed, directly or indirectly, an aggregate of 387,058 Common Shares, representing approximately 0.07 percent of the then outstanding Common Shares.

**Conflicts of Interest**

The directors and officers of Pembina may be directors or officers of entities which are in competition with or are customers or suppliers of Pembina or certain entities in which Pembina holds an equity investment. As such, these directors or officers of Pembina may encounter conflicts of interest in the administration of their duties with respect to Pembina. Directors and officers of Pembina are required to disclose the existence of potential conflicts in accordance with Pembina's Code of Ethics Policy and other corporate governance policies which can be found on Pembina's website at www.pembina.com and in accordance with the ABCA. See "*Risk Factors – General Risk Factors – Potential Conflicts of Interest*"*.*

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**AUDIT COMMITTEE INFORMATION**

**The Audit Committee's Charter**

The Audit Committee Charter is set forth in Appendix "A" to this Annual Information Form.

**Composition of the Audit Committee and Relevant Experience and Education**

The following table sets out each member of Pembina's Audit Committee, the date on which they became a member and additional details regarding their relevant experience and education. Each member is independent and financially literate within the meaning of NI 52–110 and in accordance with Pembina's Director Independence Guidelines available at www.pembina.com. The business experience outlined below provides each member with the skill set and financial literacy required to carry out their duties as a member of the Audit Committee.

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| | | |
|:---|:---|:---|
| **Name** | **Member Since** | **Experience and Education** |
| Maureen E. Howe (Chair) | October, 2017 | Ms. Howe currently serves as a member of the board of directors of Methanex Corporation and Freehold Royalties Ltd. She is a member of the Audit Committee of Methanex Corporation and the Chair of the Audit Committee of Freehold Royalties Ltd. Ms. Howe previously served as a member of the board of directors and Chair of the Audit Committee of Mosaic Forest Management, a private company. She has served as Managing Director at RBC Capital Markets in equity research and was regularly a top ranked analyst in Canada by independent industry surveys. Prior to joining RBC Capital Markets, Ms. Howe held finance positions in the utility industry, investment banking and portfolio management.<br>Ms. Howe holds a Bachelor of Commerce (Honours) from the University of Manitoba and a Ph.D. in Finance from the University of British Columbia. She is a member of the Institute of Corporate Directors. |
| Alister Cowan | December, 2024 | Mr. Cowan has 40 years of experience working in accounting and finance and over 20 years working as a Chief Financial Officer of various public and Crown corporations overseeing the preparation and certification of financial statements and operation of internal controls. In 2023 he was Executive Advisor of Suncor and before that, was Chief Financial Officer from 2014- 2023 where he oversaw financial operations, accounting, investor relations, treasury, tax, internal audit and enterprise risk management. Prior to joining Suncor, Mr. Cowan was Chief Financial Officer of Husky Energy Inc. from 2008 to 2014. Before that, he was Executive Vice President and Chief Financial Officer and Chief Compliance Officer of British Columbia Hydro and Power Authority from 2004 to 2008. He is the independent lead director of The Chemours Company and a director of Smiths Group plc. He is the Chair of the Audit Committee of The Chemours Company and is a member of the Audit Committee of Smiths Group plc. <br>Mr. Cowan has a Bachelor of Arts in Accounting and Finance from Heriot-Watt University. He received his Chartered Accountant designation and is a member of the Institute of Chartered Accountants of Scotland. Mr. Cowan is also a member of the Institute of Corporate Directors. |
| Andy J. Mah | February, 2023 | Mr. Mah was the Chief Executive Officer of Advantage, a Canadian oil and gas exploration and production company, from January 2009 to December 31, 2021. Prior to Advantage, Mr. Mah held executive and leadership positions at Ketch Resources Trust, Unocal Corporation, Northrock Resources Ltd., and BP Canada. <br>Mr. Mah has a Bachelor of Science in Chemistry and a Bachelor of Science in Chemical Engineering from the University of Saskatchewan. He is a member of The Association of Professional Engineers and Geoscientists of Alberta (APEGA), and is also a member of the Institute of Corporate Directors. |

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| | | |
|:---|:---|:---|
| Leslie O'Donoghue | May, 2020 | Ms. O'Donoghue retired from Nutrien Ltd. at end of 2019, after 20 years with the company. Her most recent roles were Executive Vice President and Chief Strategy & Corporate Development Officer and Executive Advisor to the CEO. While at Agrium Inc., the predecessor to Nutrien Ltd. prior to its merger with Potash Corporation of Saskatchewan, Ms. O'Donoghue held a number of roles including Executive Vice President, Corporate Development & Strategy & Chief Risk Officer, Executive Vice President, Operations and Chief Legal Officer and Senior Vice President, Business Development. Before joining Agrium Inc., she was a partner in the national law firm of Blake, Cassels & Graydon LLP. She currently serves as a director of Methanex Corporation and is a member of the audit committee.<br>Ms. O'Donoghue holds a Bachelor of Arts (Economics) degree from the University of Calgary and an LL.B. from Queen's University; she was admitted to the Alberta Bar in 1989. Ms. O'Donoghue is also a member of the Institute of Corporate Directors. |
| Bruce Rubin | May, 2025 | Mr. Rubin was Chief Executive Officer of Sunoco Chemicals and a Senior Vice President of Sunoco Inc. from 2008 to 2010 and held various other executive positions during a 32-year career with that company. Mr. Rubin was the first Chief Executive Officer of Braskem America and served with Braskem America in an executive capacity from 2010 until 2013. He was also an Executive Advisor for Court Square Capital Partners from 2013 to 2015, an Operating Advisor for The Carlyle Group from 2015 to 2017, and an advisor for Braskem America from 2014 to 2017. Mr. Rubin has a Master of Business Administration in Finance and Management from Widener University and a Bachelor of Science in Chemical Engineering from the University of Pennsylvania. He is a member of the Institute of Corporate Directors. |

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**Pre-Approval Policies and Procedures for Audit and Non-Audit Services** 

As outlined in Pembina's Audit Committee Charter and the terms of engagement with Pembina's external auditors, the Audit Committee of the Board is directly responsible for overseeing the relationship, reports, qualifications, independence and performance of the external auditor and audit services by other registered public accounting firms engaged by Pembina. The Audit Committee has the authority and responsibility to recommend the appointment and the revocation of the appointment of the external auditors engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services, and to fix their remuneration. The external auditor reports directly to the Audit Committee. The Audit Committee's appointment of the external auditor is subject to annual approval by the Shareholders.

The Audit Committee is also responsible for the pre-approval of all permissible non-audit services to be provided by the external auditors considering the potential impact of such services on the independence of external auditors and, subject to any *de minimis* exemption available under applicable laws. Such approval can be given either specifically or pursuant to pre-approval policies and procedures adopted by the Audit Committee, including the delegation of this ability to one or more members of the Audit Committee to the extent permitted by applicable law, provided that any pre-approvals granted pursuant to any such delegation must be detailed as to the particular service to be provided, may not delegate Audit Committee responsibilities to management of Pembina, and must be reported to the full Audit Committee at the first scheduled meeting of the Audit Committee following such pre-approval. Fees paid for audit and audit-related services must be greater than 50 percent of the total fees paid to the auditor in each fiscal year.

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**External Auditor Service Fees** 

The following table sets out the fees paid or payable by Pembina for professional services provided by KPMG LLP during each of the last two financial years:

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| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;**YEAR** | &nbsp;&nbsp;&nbsp;**AUDIT FEES**<sup>(1)</sup> | &nbsp;&nbsp;&nbsp;**AUDIT-RELATED FEES**<sup>(2)</sup> | &nbsp;&nbsp;&nbsp;**TAX FEES**<sup>(3)</sup> | &nbsp;&nbsp;&nbsp;**ALL OTHER FEES**<sup>(4)</sup> |
| 2025 | $5326532 | $145175 | $75274 | $170907 |
| 2024 | $3861043 | $160107 | $20800 | $247844 |

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**Notes**:

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Audit fees were for professional services rendered by KPMG LLP for the audit of Pembina's annual financial statements and reviews of Pembina's quarterly financial statements, as well as services provided in connection with statutory and regulatory filings or engagements. 2025 fees may be adjusted if accrued estimates as of the date hereof differ from actual totals once known.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Audit-related fees are for assurance and related services, including French translations in connection with statutory and regulatory filings, reasonably related to the performance of the audit or review of Pembina's financial statements and not reported under "Audit Fees" above. In 2025, these fees included audit fees for the pension plan and Younger facility pension plan audits of $35,310 (2024 - $33,705) and $29,960 (2024 - $28,088), respectively.

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Tax fees were for tax compliance of nil (2024: $4,815) and tax advice and tax planning of $75,274 (2024: $15,985). 2025 and 2024 fees included tax consultation and tax compliance fees incurred for preparing and filing the tax returns for Pembina's subsidiaries.

<sup>(4)</sup> &nbsp;&nbsp;&nbsp;&nbsp;All other fees are fees for products and services provided by Pembina's auditors other than those described as "*Audit Fees*", "*Audit-related Fees*" and "*Tax Fees*" which included fees related to advice and assistance with assurance and advisory services over GHG emissions and ESG sustainability reporting.

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**RISK FACTORS**

The following information is a summary only of certain risk factors relating to Pembina, its subsidiaries and/or its equity accounted investees, or an investment in securities of Pembina, and is qualified in its entirety by reference to, and must be read in conjunction with, the detailed information appearing elsewhere in this Annual Information Form. Shareholders and prospective investors should carefully consider these risk factors before investing in Pembina's securities, as each of these risks may negatively affect the trading price of Pembina's securities, the amount of dividends paid to Shareholders and holders of Class A Preferred Shares and the ability of Pembina to service its debt obligations, including obligations under debt securities that Pembina may issue from time to time. Information regarding Pembina's risk assessment and management processes can be found in Pembina's management information circular for its most recent annual meeting of Shareholders.

**Prospective investors should carefully consider the risk factors set out below and consider all other information contained herein and in Pembina's other public filings before making an investment decision in respect of any securities of Pembina.**

Pembina's value proposition is based on balancing economic benefit against risk. Where appropriate, Pembina will seek to reduce risk. Pembina continually works to mitigate the impact of potential risks to its business by identifying all significant risks so that they can be appropriately managed. To assist with identifying and managing risk, Pembina has implemented a comprehensive risk management program.

**Risks Inherent in Pembina's Business**

*Commodity Price and Volume Risk* 

Pembina's business is exposed to commodity price volatility and a substantial decline in the prices of these commodities could adversely affect its financial results.

Certain of the transportation contracts or tolling arrangements with respect to Pembina's pipeline assets do not include take-or-pay commitments from crude oil and natural gas producers and, as a result, Pembina is exposed to volume risk with respect to those assets. A decrease in volumes transported can directly and adversely affect Pembina's revenues and earnings. The demand for, and utilization of, Pembina's pipeline assets may be impacted by factors such as changing market fundamentals, capacity bottlenecks, operational incidents, regulatory restrictions, system maintenance, weather and increased competition. Market fundamentals, such as commodity prices and price differentials, natural gas and gasoline consumption, alternative energy sources and global supply disruptions outside of Pembina's control can impact both the supply of and demand for the commodities transported on Pembina's pipelines, which can, in turn, impact the demand for, and utilization of, Pembina's pipeline assets. See "*Reserve Replacement, Throughput and Product Demand*" below*.* 

Pembina's Marketing business includes activities related to product storage, terminalling, and hub services. These activities expose Pembina to certain risks relating to fluctuations in commodity prices and, as a result, Pembina may experience volatility in revenue and impairments related to the book value of stored product. Primarily, Pembina enters into contracts to purchase and sell crude oil, condensate, NGL and natural gas at floating market prices and, as a result, the prices of products that are marketed by Pembina are subject to volatility as a result of factors such as seasonal demand changes, the actions of OPEC, extreme weather conditions (the severity of which could increase due to climate change), geopolitical events such as armed conflict and political instability, and developments relating thereto, market inventory levels, general economic conditions, the availability and price of transportation logistics, changes in commodity markets, the availability and pricing of alternate fuel sources and other factors. Pembina manages its risk exposure by balancing purchases and sales to secure less volatile margins; however, Pembina may be unsuccessful in securing such margins and may, at times, have unbalanced purchases and sales. Further, in certain situations, a producer or supplier could fail to deliver contracted volumes or could deliver in excess of contracted volumes, or a purchaser could purchase less than contracted volumes. Any of these circumstances could cause Pembina's purchases and sales to be unbalanced, which may increase Pembina's exposure to commodity price risks and could increase volatility in its revenue and cash flows. Notwithstanding Pembina's management of price and quality risk, marketing margins for commodities can vary and have varied significantly from period to period in the past. This variability could have an adverse effect on the results of Pembina's Marketing business and its overall results of operations. To assist in reducing this inherent variability in its Marketing business, Pembina has invested, and will continue to invest, in assets that have a fee-based revenue component.

Pembina is also exposed to potential price declines and decreasing frac spreads between the time Pembina purchases NGL feedstock and sells NGL products. Frac spread is the difference between the revenue from the sale of NGL if removed from a gas stream and the value such NGL would have had if left in the gas stream and sold at natural gas prices. Frac spreads can

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change significantly from period to period depending on the relationship between NGL and natural gas prices (the "**frac spread ratio**"), absolute commodity prices, transport differentials and changes in the Canadian to U.S. dollar exchange rate. In addition, there is also a differential between NGL product prices and crude oil prices which can change margins realized for midstream products. The amount of profit or loss made on the extraction portion of the business will generally increase or decrease with frac spreads. This exposure could result in variability of cash flow generated by the Marketing business. <br>*Competition* 

Pembina competes with other pipeline, midstream, marketing and gas processing, fractionation and handling/storage service providers in its service areas as well as other transporters of crude oil, NGL and natural gas. The introduction of competing transportation alternatives into Pembina's service areas could result in the reduction of throughput in Pembina's pipelines which could result in decreased revenues and profits for Pembina. Additionally, potential pricing differentials on the components of NGL may result in these components being transported by competing gas pipelines. Pembina is determined to meet, and believes that it is prepared for, these existing and potential competitive pressures, including through agreements which provide for areas of dedication over the geographic areas in which Pembina's pipeline infrastructure is located. In addition, competition from non-hydrocarbon based energy sources may have an adverse effect on the production of crude oil, NGL and natural gas and, as a result, on the demand for Pembina's services. Pembina also competes with other businesses for growth and business opportunities, including competition related to potential Greenfield development opportunities, which could impact its ability to grow through acquisitions and developments and could impact earnings and cash flow available to pay dividends and to service obligations under Pembina's debt securities and other debt obligations.

See "*Description of Pembina's Business and Operations*".

*Regulation and Legislation* 

In addition to environmental and social considerations, regulatory authorities consider economic aspects of pipelines. There is legislation aimed at ensuring that producers have fair and reasonable opportunities to produce, process and market their reserves. For example, in certain instances, regulatory authorities may declare the operator of a pipeline to be a common carrier of crude oil, NGL or natural gas. In doing so, regulators establish conditions under which a pipeline must accept and carry product, including the tariffs that may be charged, and requires that operators cannot unduly discriminate between their customers. Additionally, producers and shippers may apply to the appropriate regulatory authorities for a review of tariffs in certain instances, and such tariffs may then be regulated if it is found that the tariffs are not just and reasonable. The potential for enhanced regulatory oversight of tariffs for pipelines, including the Alliance Pipeline (the tolls and tariffs of which are subject to enhanced CER oversight as a Group 1 company) and certain pipelines owned by Pembina's subsidiaries in British Columbia (the tolls and tariffs of which are subject to BCUC oversight), could result in tariff levels that are less favourable to Pembina and could impact the economic operation of such pipeline systems.

The AER is the primary regulatory body that oversees Pembina's Alberta-issued development permits, with some minor exceptions. Certain of Pembina's subsidiaries own pipelines in British Columbia, which are regulated by the BCER and the BCUC, and pipelines that cross provincial or international boundaries, which are regulated by the CER and/or the FERC and PHMSA. Certain of Pembina's operations and expansion projects are subject to additional regulations and, as Pembina's operations expand throughout Canada and North America, Pembina may be required to comply with the requirements of additional regulators and legislative bodies, including the Impact Assessment Agency of Canada (the "**IAAC**"), the BCEAO, the Ontario Energy Board, the Ontario Ministry of Natural Resources, the Ontario Ministry of the Environment, Conservation and Parks, the Saskatchewan Ministry of Energy and Resources and Regulatory Services (Oil and Gas) under Manitoba Department of Business, Mining, Trade and Job Creation.

In the U.S., FERC regulates interstate natural gas pipelines and the transportation of crude oil, NGL and refined products in interstate commerce. Under the NGA, FERC regulates the construction, extension, and abandonment of interstate natural gas pipelines and the rates, terms and conditions of service and other aspects of the business of interstate natural gas pipelines. Interstate natural gas pipelines' rates, terms and conditions of service are filed at FERC and publicly available. Under the ICA, FERC regulates the rates, terms and conditions of the transportation in interstate commerce of crude oil, NGL and refined products. Pipeline safety is regulated by the PHMSA, which sets standards for the design, construction, pressure testing, operation and maintenance, corrosion control, training and qualification of personnel, accident reporting and record keeping. The Office of Pipeline Safety, within the PHMSA, inspects and enforces the pipeline safety regulations across the U.S. All regulations and environmental, safety and economic compliance obligations are subject to change at the initiative of FERC, PHMSA or other United States Federal agencies with jurisdiction over aspects of the operations of pipelines, including environmental, economic and safety regulations. Changes by FERC in its regulations or policies could adversely impact

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Pembina's natural gas pipelines, making the construction, extension, expansion or abandonment of such pipelines more costly, causing delays in the permitting of such projects or impacting the likelihood of success of completion of such projects. Similarly, changes in FERC's regulations or policies could adversely impact the rates that Pembina's FERC-regulated pipelines are able to charge and how such pipelines do business, whether such pipelines are regulated by FERC pursuant to the NGA or the ICA. Pembina continually monitors existing, new and changing regulations in all jurisdictions in which it currently operates, or into which it may expand in the future, and the potential implications to its operations; however, Pembina cannot predict future regulatory changes, and any such compliance and regulatory changes in any one or multiple jurisdictions could have a material adverse impact on Pembina and its financial results.

Pursuant to the IAA, the IAAC is the authority responsible for conducting all federal impact assessments for certain designated projects under the IAA. Pursuant to the five-year review process mandated by the IAA, the federal government is currently reviewing the list of designated projects which are subject to mandatory assessment under the IAA, such as international and interprovincial pipelines of at least 75 kilometers in length. Based on the IAAC's 2024 discussion paper regarding its review of designated projects, it does not appear that the IAAC is considering any changes to the inclusion or types of pipelines that are currently listed as designated projects. The Minister of Environment and Climate Change Canada (the "**Minister**") may also designate a project as reviewable under the IAA. However, pursuant to recent amendments to the IAA as further discussed below, a potential for non-negligible adverse effects within federal jurisdiction must exist for the Minister to designate a project as reviewable.

The CER continues to oversee approved federal, interprovincial and international energy projects, with new projects being referred to a review panel under the IAA. The Strategic Assessment of Climate Change ("**SACC**") sets out the types of information that project proponents are required to file and how the information may be considered. The SACC and new guidance on a "best in class" approach to GHG emissions requirements, which guidance is yet to be released, are expected to strictly limit GHG emissions from IAA-regulated projects, in support of the federal government's net-zero by 2050 goal discussed under "*Environmental Costs and Liabilities*" below.

In 2023, the Supreme Court of Canada held that the IAA was, in significant part, unconstitutional. In response to this decision, the federal government amended the IAA pursuant to the *Budget Implementation Act (2024, No. 1)*, which received royal assent in June 2024. The amendments narrow the scope of project effects that may trigger an assessment pursuant to the IAA. The amendments also permit the substitution of a federal impact assessment with equivalent assessment processes from another jurisdiction and clarify the public interest test to be applied when determining whether to allow a designated project to proceed. Relatively few projects have been subject to the federal impact assessment regime to date and Pembina continues to actively monitor developments in this area. To the extent these changes lengthen the review timeline for projects or expand the scope of the matters to be considered, the regime could materially impact the amount of time and capital resources required by Pembina to seek and obtain approval to construct and operate certain international or interprovincial pipelines or other projects designated pursuant to the IAA project list or ministerial designation powers under the IAA. In September 2025, the IAAC released a Red Tape Progress Report and announced that it is re-engineering its processes under the IAA to ensure that projects receive federal approvals in two years or less. The ongoing development of the CER Act and IAA regime could materially and directly impact Pembina's business and financial results, and could indirectly affect Pembina's business and financial results by impacting the financial condition and growth projects of its customers and, ultimately, production levels and throughput on Pembina's pipelines and in its facilities.

On June 24, 2024, the federal government amended the *Competition Act* (Canada) to address "greenwashing" by prohibiting representations to the public regarding the benefits that a business or business activity have on the environment and climate change when such statements are not substantiated. Pembina will continue to monitor this area for developments.

<br>On November 27, 2025, the federal government and Alberta provincial government signed a Memorandum of Understanding ("**Canada/Alberta MOU**") which addressed, among other things, the oil and gas emissions cap, Pathways carbon capture and storage project, *Oil Tanker Moratorium Act*, applicability of the *Clean Electricity Regulations* in Alberta, and the development of a new bitumen pipeline from Alberta to the West Coast. See "*Environmental Costs and Liabilities*" below for further details regarding the potential impacts of the Canada/Alberta MOU on Pembina.

In addition to the direct regulation of pipelines and midstream facilities, Pembina's business and operations are subject to, and may be adversely affected by changes in, environmental, health and safety laws and regulations, as described under "*Environmental Costs and Liabilities*" below. Pembina's business and financial condition may also be influenced by regulatory changes applicable to land sales, exploration, development and retail and consumer uses, and federal and foreign legislation affecting, in particular, foreign investment, through legislation such as the *Competition Act* (Canada), the *Investment Canada Act* (Canada) and equivalent legislation in foreign jurisdictions.

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There can be no assurance that changes to regulatory and environmental laws or policies and government incentive programs relating to the pipeline or crude oil and natural gas industry, or unfavourable decisions of regulatory bodies or outcomes of regulatory hearings, will not adversely affect Pembina or the value of its securities.

See "*Other Information Relating to Pembina's Business – Industry Regulation*".

*Operational Risks* 

Operational risks include, but are not limited to: pipeline leaks; the breakdown or failure of equipment, pipelines and facilities, information systems or processes; the compromise of information and control systems; the performance of equipment at levels below those originally intended (whether due to misuse, unexpected degradation or design, construction or manufacturing defects); releases at truck terminals, storage terminals and hubs; releases associated with the loading and unloading of potentially harmful substances onto rail cars and trucks; adverse sea conditions (including storms and rising sea levels) and releases or spills from shipping vessels loaded at Pembina's Vancouver Wharves or the Prince Rupert Terminal; failure to maintain adequate supplies of spare parts; operator error; labour disputes; disputes with interconnected facilities and carriers; operational disruptions or apportionment on third-party systems or refineries, which may prevent the full utilization of Pembina's facilities and pipelines; and catastrophic events, including, but not limited to, those related to climate change and extreme weather events, including fires, floods and other natural disasters, explosions, train derailments, earthquakes, widespread epidemics or pandemic outbreaks, acts of civil protest or disobedience, terrorism or sabotage, and other similar events, many of which are beyond the control of Pembina and all of which could result in operational disruptions, damage to assets, related releases or other environmental issues, and delays in construction, labour and materials. Pembina may also be exposed from time to time to additional operational risks not stated in the immediately preceding sentence. In addition, the consequences of any operational incident (including as a result of adverse sea conditions) at Vancouver Wharves and the Prince Rupert Terminal or involving a vessel receiving products from Vancouver Wharves or the Prince Rupert Terminal may be even more significant as a result of the complexities involved in addressing leaks and releases occurring in the ocean or along coastlines and/or the repair of marine terminals. Any leaks, releases or other incidents involving such vessels, or other similar operations along the West Coast, could result in significant harm to the environment, curtailment of, or disruptions of and/or delays in, offshore shipping activity in the affected areas, including Pembina's ability to effectively carry on operations at Vancouver Wharves and the Prince Rupert Terminal. The occurrence or continuance of any of the foregoing events could increase the cost of operating Pembina's assets and/or reduce revenue, or result in damages, claims or fines, environmental damages, personal injury or loss of life, all of which could adversely affect Pembina's operations, financial performance and/or reputation. Additionally, facilities and pipelines are reliant on electrical power for their operations. A failure or disruption within the local or regional electrical power supply or distribution or transmission systems could significantly affect ongoing operations. Further, a significant increase in the cost of power or fuel, whether through increased demand or otherwise, could have a materially negative effect on the level of profit realized in cases where the relevant contracts do not provide for recovery of such costs.

Pembina is committed to preserving customer and shareholder value by proactively managing operational risk through safe and reliable operations. Operational leaders are responsible for the supervision of operational risk by ensuring appropriate policies, procedures and systems are in place within their business units and internal controls are operating efficiently. Pembina also has an extensive program to manage pipeline system integrity, which includes the development and use of in-line inspection tools and various other leak detection technologies. Pembina's maintenance, inspection, excavation and repair programs are focused on risk mitigation and, as such, integrity maintenance programs are developed and resources are directed to areas based on continual risk assessments and infrastructure is replaced or repaired as required to ensure that Pembina's assets are operated safely and reliably. Pembina carries insurance coverage with respect to some, but not all, casualty occurrences in amounts customary for similar business operations, which coverage may not be sufficient to compensate for all casualty occurrences. In addition, Pembina has a comprehensive Security Management Program designed to reduce security-related risks. See "*Other Information Relating to Pembina's Business – Operational Excellence Management Program*".

*Reliance on Principal Customers* 

Pembina sells services and products to large customers within its area of operations and relies on several significant customers to purchase product for the Marketing business. As of December 31, 2025, one customer accounted for more than 10 percent of Pembina's revenue. If for any reason this customer, or any of the other significant customers, are unable to perform their obligations under the various agreements with Pembina, the revenue and operations of Pembina could be negatively impacted, which could also adversely affect the cash flow available for dividends and to service obligations under Pembina's debt securities and other debt obligations. See "*General Risk Factors – Counterparty Credit Risk*" below.

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*Completion and Timing of Expansion Projects* 

The successful completion of Pembina's growth and expansion projects is dependent on a number of factors outside of Pembina's control, including the impact of general economic, business and market conditions, availability of capital on terms and rates acceptable to Pembina, receipt of regulatory approvals, reaching long-term commercial arrangements with customers in respect of certain portions of the expansions, construction schedules, commissioning difficulties or delays and costs that may change depending on supply, demand and/or inflation, labour, materials and equipment availability, contractor non-performance, acts of civil protest or disobedience, terrorism or sabotage, weather conditions, cost of engineering services, change in governments that granted the requisite regulatory approvals, and completion of third-party infrastructure projects that Pembina's projects rely upon. There is no certainty, nor can Pembina provide any assurance, that necessary regulatory approvals will be received on terms that maintain the expected return on investment associated with a specific project, or at all, or that satisfactory commercial arrangements with suppliers or customers will be entered into on a timely basis, or at all, or that third parties will comply with contractual obligations in a timely manner. Factors such as special interest group opposition, Indigenous, landowner and other stakeholder consultation requirements, civil protest or disobedience, changes in shipper support, and changes to the legislative or regulatory framework could all have an impact on meeting contractual and regulatory milestones. As a result, the cost estimates and completion dates for Pembina's major projects may change during different stages of the project. Greenfield and early stage projects face additional challenges, including securing leases, easements, rights-of-way, permits and/or licenses from landowners or governmental authorities allowing access for such purposes, as well as Indigenous consultation requirements. Accordingly, actual costs and construction schedules may vary from initial estimates and these differences can be significant, and certain projects may not proceed as planned, or at all. Further, there is a risk that maintenance will be required more often than currently planned or that significant maintenance capital projects could arise that were not previously anticipated.

Under most of Pembina's construction and operating agreements, the Company is obligated to construct the facilities and pipelines regardless of delays and cost increases and Pembina bears the risk for any cost overruns. Future agreements entered into with customers with respect to expansions may contain similar conditions. While Pembina is not currently aware of any significant undisclosed cost overruns with respect to its current projects at the date hereof, any such cost overruns may adversely affect the economics of particular projects, as well as Pembina's business operations and financial results, and could reduce Pembina's expected return on investment which could, in turn, reduce the level of cash available for dividends and to service obligations under Pembina's debt securities and other debt obligations.

See "*General Risk Factors – Additional Financing and Capital Resources*" and "*Customer Contracts*" below.

*Reliance on Other Facilities and Third-Party Services*

Certain of the Company's terminals, pipelines and rail activities are dependent upon their interconnections with other terminals, pipelines and rail networks and facilities owned and operated by third parties to reach end markets and as a significant source of supply for the Company's facilities. These connections are important to Pembina and its customers as they provide critical transportation routes, both from the perspective of delivering product to Pembina's facilities and providing product egress. Risks may be created as a result of: differences in pressures; specifications or capacities which affect operations; planned and unplanned outages or curtailments at third-party facilities that restrict deliveries to or from Pembina's facilities; and measurement and component balancing errors affecting product deliveries. As well, there may be issues with respect to scheduling and service delivery by third parties that affect Pembina's operations, such as the scheduling and availability of timely and reliable rail service by the railway companies on which Pembina relies to move product. Operational disruptions, apportionment, regulatory action and other events on third-party systems and infrastructure may prevent the full utilization of Pembina's facilities, require Pembina to spend additional capital, or otherwise negatively affect Pembina's operations.

Pembina is unable to control operations, events, decisions, regulatory actions or public perceptions with respect to third-party assets and facilities, making the mitigation of these risks challenging. Although Pembina employs strategies to assist in mitigating these risks, including having multiple connections, service arrangements or transportation alternatives available in order to provide flexibility during curtailments or interruptions, there is no assurance such strategies will be effective. Where such alternatives are not available or are not effective, Pembina's operations may be significantly affected.

*Possible Failure to Realize Anticipated Benefits of Corporate Strategy* 

Pembina evaluates the value proposition for new investments, acquisitions and divestitures on an ongoing basis. Planning and investment analysis is highly dependent on accurate forecasting assumptions and, to the extent that these assumptions do

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not materialize, financial performance may be lower or more volatile than expected. Volatility in the economy, changes in cost estimates, failure to obtain regulatory approvals and permits, project scoping and risk assessment could result in decreased returns and loss of profits for Pembina.

As part of its ongoing strategy, Pembina may complete acquisitions of assets or other entities in the future. Achieving the benefits of completed and future acquisitions depends, in part, on successfully consolidating functions and integrating operations, procedures and personnel in a timely and efficient manner, as well as Pembina's ability to realize the anticipated growth opportunities and synergies from combining the acquired businesses and operations with those of Pembina. In particular, large scale acquisitions may involve significant pricing and integration risk. The integration of acquired businesses and entities requires the dedication of substantial management effort, time and resources, which may divert management's focus and resources from other strategic opportunities and from operational matters during this process. The integration process may also result in the loss of key employees and the disruption of ongoing business, customer and employee relationships, which may adversely affect Pembina's ability to achieve the anticipated benefits of any acquisitions. Acquisitions may also expose Pembina to additional risks, including risks relating to entry into markets or businesses in which Pembina has little or no direct prior experience, increased credit risks through the assumption of additional debt, costs and contingent liabilities and exposure to liabilities of the acquired business or assets.

As part of its value proposition evaluation, Pembina may also desire to divest assets to optimize its operations and financial performance. Pembina may, however, be unable to sell certain assets or, if Pembina is able to sell certain assets, it may not receive the optimal or desired amount of proceeds from such asset sales. Additionally, the timing to close any asset sales could be significantly different than Pembina's expected timeline.

See "*General Risk Factors – Additional Financing and Capital Resources*" below.

*Joint Ownership and Third-Party Operators* 

Certain of Pembina's assets are jointly owned and are governed by partnership or shareholder agreements entered into with third-parties. As a result, certain decisions relating to these assets require the approval of a simple majority of the owners, while others require supermajority or unanimous approval of the owners. In addition, certain of these assets are operated by unrelated third-party entities. The success of these assets is, to some extent, dependent on the effectiveness of the business relationship and decision-making among Pembina and the other joint owner(s) and the expertise and ability of any third-party operators to operate and maintain the assets. While Pembina believes that there are prudent governance and other contractual rights in place, there can be no assurance that Pembina will not encounter disputes with joint owners or that assets operated by third parties will perform as expected. Further, if a joint owner were to become insolvent, regulators may require Pembina to assume such joint owner's obligations and Pembina may face operational challenges during any insolvency proceedings, resulting in additional costs. Such events could impact operations or cash flows of these assets or cause them to not operate as Pembina expects which could, in turn, have a negative impact on Pembina's business operations and financial results, and could reduce Pembina's expected return on investment, thereby reducing the level of cash available for dividends and to service obligations under Pembina's debt securities and other debt obligations.

Agreements for joint ownership often contain restrictions on transferring an interest in an asset or an entity, including consent requirements and rights of first refusal. Such provisions may restrict Pembina's ability to transfer its interests in such assets or entities or to acquire a joint venture owner's interest in such assets or entities, and may also restrict Pembina's ability to maximize the value of a sale of its interest.

*Reserve Replacement, Throughput and Product Demand* 

Pembina's pipeline revenue is based on a variety of tolling arrangements, including fee-for-service, cost-of-service agreements and market-based tolls. As a result, certain pipeline revenue is heavily dependent upon throughput levels of crude oil, condensate, NGL and natural gas. Future throughput on crude oil, NGL and natural gas pipelines and replacement of crude oil and natural gas reserves in Pembina's service areas will be dependent upon the activities of producers operating in those areas as they relate to exploiting their existing reserve bases and exploring for and developing additional reserves, and technological improvements leading to increased recovery rates. Similarly, the volumes of natural gas processed through Pembina's gas processing assets depends on the production of natural gas in the areas serviced by the gas processing business and associated pipelines. Without reserve additions, or expansion of the service areas, volumes on such pipelines and in such facilities would decline over time as reserves are depleted. As crude oil and natural gas reserves are depleted, production costs may increase relative to the value of the remaining reserves in place, causing producers to shut-in production or seek out lower cost alternatives for transportation. If, as a result, the level of tolls collected by Pembina decreases, cash flow

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available for dividends to Shareholders and to service obligations under Pembina's debt securities and Pembina's other debt obligations could be adversely affected.

Over the long-term, the ability and willingness of shippers to continue production will also depend, in part, on the level of demand and prices for crude oil, condensate, NGL and natural gas in the markets served by the crude oil, NGL and natural gas pipelines and gas processing and gathering infrastructure in which Pembina has an interest. Producers may shut-in production at lower product prices or higher production costs.

Global economic events may continue to have a substantial impact on the prices of crude oil, condensate, NGL and natural gas. Pembina cannot predict the impact of future supply/demand or economic conditions, fuel conservation measures, alternative fuel requirements, governmental regulation or technological advances in fuel efficiency and energy generation in the energy and petrochemical industries or future demand for and prices of natural gas, crude oil, condensate and NGL. A lower commodity price environment will generally reduce drilling activity and, as a result, the demand for Pembina's assets and services could decline. Producers in the areas serviced by Pembina may not be successful in exploring for and developing additional reserves or achieving technological improvements to increase recovery rates and lower production costs during periods of lower commodity prices, which may also reduce demand for Pembina's assets and services.

Future prices of these hydrocarbons are determined by supply and demand factors, including weather and general economic conditions as well as economic, political and other conditions in other crude oil and natural gas producing regions, all of which are beyond Pembina's control. The rate and timing of production from proven natural gas reserves tied into gas plants is at the discretion of producers and is subject to regulatory constraints. Producers have no obligation to produce from their natural gas reserves, which means production volumes are at the discretion of producers. Lower production volumes may increase the competition for natural gas supply at gas processing plants, which could result in higher shrinkage premiums being paid to natural gas producers. In addition, lower production volumes may lead to less demand for pipelines and processing capacity and could adversely impact Pembina's ability to re-contract on favourable terms with shippers as current agreements expire.

*Customer Contracts* 

Throughput on Pembina's pipelines is governed by transportation contracts or tolling arrangements with various crude oil and natural gas producers. Pembina is party to numerous contracts of varying durations in respect of its gas gathering, processing and fractionation facilities as well as its terminalling and storage services. Any default by counterparties under such contracts or any expiration or early termination of such contracts or tolling arrangements without renewal or replacement, provided that such contracts are material to Pembina's business and operations, may have an adverse effect on Pembina's business and results from operations and there is no guarantee that any of the contracts that Pembina currently has in place will be renewed at the end of their term, including on terms favourable to Pembina, or replaced with other contracts in the event of early termination. Further, certain contracts associated with the services described above are comprised of a mixture of firm and non-firm commitments. The revenue that Pembina earns on non-firm or firm commitments without take-or-pay service is dependent on the volume of crude oil, condensate, NGL and natural gas produced by producers in the relevant geographic areas. Accordingly, lower production volumes in these areas, including for reasons such as low commodity prices, may have an adverse effect on Pembina's revenue, which could also adversely affect the cash flow available for dividends and to service obligations under Pembina's debt securities and other debt obligations.

See "*Description of Pembina's Business and Operations*".

*Inflation*

The general rate of inflation impacts the economies and business environments in which Pembina operates. In response to easing global inflationary pressures, major central banks, including the Bank of Canada and the U.S. Federal Reserve, decreased benchmark interest rates multiple times throughout 2025 and, although inflation trended downward in 2025, inflationary pressures may increase in the future, resulting in central banks raising interest rates in the future. While many of Pembina's pipeline transportation agreements and facilities agreements contain provisions protecting against inflation by adjusting pricing based on changes in the consumer price index or other similar figures, increased inflation and any economic conditions resulting from governmental attempts to reduce future increases in inflation, including the imposition of higher interest rates or wage and price controls, may negatively impact levels of demand for Pembina's services and cost of inputs, and could, accordingly, have a negative impact on Pembina's business, financial condition and results of operations. Higher interest rates as a result of inflation could negatively impact the Company's borrowing costs, which could, in turn, have a

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negative impact on Pembina's cash flow and ability to service obligations under its debt securities and other debt obligations, and impact Pembina's ability to sanction new projects.

*Risks Relating to Natural Gas and NGL Composition*

Each of Pembina's gas processing facilities is designed to process natural gas and NGL feedstock within a certain range of composition specifications. The facilities may require modification to operate efficiently if the composition of the natural gas or NGL being processed changes significantly. The configuration of each of Pembina's gas processing facilities may not be optimal for efficient operation in the future if a change in inlet natural gas or NGL composition is outside a plant's acceptable range of composition specifications.

Pembina monitors plant throughput, natural gas and NGL composition, third-party system performance and industry development activity in the production areas surrounding its facilities on an ongoing basis. This information is used to assist with ongoing operational decisions, bringing on new production and new customers, evaluating expansion opportunities and assessing opportunities to modify or add new services to accept the inlet gas and NGL in the areas surrounding its facilities.

*Risks Relating to Leases and Rights of Way Access*

Certain Pembina facilities and associated infrastructure are located on lands leased or licensed from third parties and such leases and licenses must be renewed from time to time. Failure to renew the leases or licenses on terms acceptable to Pembina could significantly reduce the operations of such facilities and could result in related decommissioning costs for Pembina, pursuant to the terms of such leases or licenses. Successful development of new pipelines or extensions to existing pipelines depends in part on securing leases, easements, rights-of-way, permits and/or licenses from landowners or governmental authorities allowing access for such purposes. The process of securing rights-of-way or similar access is becoming more complex, particularly in more densely populated, environmentally sensitive and other areas. The inability to secure such rights-of-way or similar access could have an adverse effect on Pembina's operations and financial results.

*Urban Encroachment Near Leases and Rights of Way*

Pembina operates certain assets in or near urban areas. Land use decisions made by municipal governments or other authorities may increase or introduce exposure to the public within defined emergency planning zones. Unmitigated, such exposure has the potential to increase the severity and likelihood of public safety impacts should a failure event occur. Urban encroachment may result in incremental capital expenditures to increase pipeline wall thickness and re-route pipelines so that emergency planning zones can be reduced in size or avoid areas of development. Operational pressures may also be required to be lowered, which reduces throughput on pipelines. These issues could impact the competitiveness of certain assets and Pembina's ability to meet customer demand.

*Reputation* 

Reputational risk is the potential risk that market- or company-specific events, or other factors, could result in the deterioration of Pembina's reputation with key stakeholders. Pembina's business and operations, projects and growth opportunities require us to have strong relationships with key stakeholders, including local communities, Indigenous communities and other groups directly impacted by the Company's activities, as well as governments and government agencies.

The potential for deterioration of Pembina's reputation exists in many business decisions, which may negatively impact Pembina's business and the value of its securities. Reputational risk cannot be managed in isolation from other forms of risk. Credit, market, operational, insurance, liquidity, environmental, regulatory and legal, and technology risks, among others, must all be managed effectively to safeguard Pembina's reputation. Pembina's reputation could also be impacted by the actions and activities of other companies operating in the energy industry, particularly other energy infrastructure providers, over which Pembina has no control. In particular, Pembina's reputation could be impacted by negative publicity related to pipeline incidents, expansion plans or new projects or due to opposition from civilians or organizations opposed to energy, oil sands and pipeline development and, particularly, with transportation of production from oil sands producing regions. Further, Pembina's reputation could be negatively impacted by changing public attitudes towards climate change and the perceived causes thereof, over which the Company has no control. Negative impacts resulting from a compromised reputation, whether caused by Pembina's actions or otherwise, could include revenue loss, reduction in customer base, delays in obtaining regulatory approvals with respect to growth projects, reduced access to capital or decreased value of Pembina's securities and reduced insurance capacity and coverage.

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*Environmental Costs and Liabilities* 

Pembina's operations, facilities and petroleum product shipments are subject to extensive national, regional and local environmental, health and safety laws and regulations governing, among other things, discharges to air, land and water, the handling and storage of petroleum products and hazardous materials, waste disposal, the protection of employee health, safety and the environment, and the investigation and remediation of contamination. Pembina's facilities may experience incidents, malfunctions or other unplanned events that may result in spills or emissions and/or result in personal injury, fines, penalties, other sanctions or property damage. Pembina may also incur liability for environmental contamination associated with past and present activities and properties.

Pembina's pipelines and facilities must maintain a number of environmental and other permits from various governmental authorities in order to operate, and Pembina's facilities are subject to inspection and audit from time to time. Failure to maintain compliance with regulatory and permit requirements could result in operational interruptions, fines or penalties, or the need to install additional pollution control technology. Licenses and permits must be renewed from time to time and there is no guarantee that a license or permit will be renewed on the same or similar conditions as it was initially granted. There can be no assurance that Pembina will be able to obtain all licenses, permits, registrations, approvals and authorizations that may be required to conduct operations that it may wish to undertake. Further, if at any time regulatory authorities deem any of Pembina's pipelines or facilities unsafe or not in compliance with applicable laws or regulations, they may order such facilities to be shut down. Certain significant environmental legislative initiatives that may materially impact Pembina's business and financial results and condition are outlined below.

In 2021, the federal government enacted the *Canadian Net-Zero Emissions Accountability Act*, which legislated a federal commitment to achieve net-zero GHG emissions by 2050 and a nearer-term target of the federal government's Nationally Determined Contribution under the Paris Climate Agreement, which currently is a 40 to 50 percent GHG emissions reduction by 2030. The upstream crude oil and natural gas industry is expected to contribute a significant amount of the reduction needed to achieve these goals. In 2023, the federal government released its "2023 Progress Report on the 2030 Emissions Reduction Plan" and highlighted the importance of new regulatory changes, such as the implementation of an oil and gas emissions cap and methane reduction requirements, to Canada's success in reaching long-term climate targets.

The federal government's net-zero strategy includes a number of specific measures described below, but is also expected to affect the decision-making of all federal government bodies, including federal regulators, consistent with, for instance, the application of the SACC to projects subject to the IAA, as described above. However, given the Supreme Court of Canada's holding that the IAA was substantially unconstitutional in 2023, the implementation of many of these measures is expected to be subject to challenge. In addition, on November 9, 2025, the federal government announced its new Climate Competitiveness Strategy which unveiled the government's intention to strengthen or clarify certain existing climate policies, such as industrial carbon pricing, greenwashing regulations and methane regulations, and potentially eliminate other policies, such as the oil and gas emissions cap that was scheduled to take effect in 2030. The policy changes under the Climate Competitiveness Strategy are yet to take effect.

The federal government has mandated a pan-Canadian carbon price pursuant to the GGPPA. On June 5, 2025, the federal government introduced Bill C-4 to repeal the portion of the GGPPA pertaining to the consumer-facing carbon price, which was reduced to $0 per tonne on April 1, 2025. The federal government, however, has maintained its industrial Output-Based Pricing System ("**Federal OBPS**"). The carbon price is $95 per tonne in 2025, rising by $15 per tonne per year until 2030 to a price of $170 per tonne. The GGPPA establishes a set of minimum national standards for carbon pricing in Canada, which standards apply to provinces that otherwise fail to impose equally stringent provincial carbon pricing measures. The 2030 Emissions Reduction Plan stated that the federal government will explore ways to maintain the carbon price against future legislative changes. The increasing carbon price and any potential future amendments to the GGPPA may impose additional costs on the operations of Pembina and Pembina's customers.

On November 4, 2025, the federal government announced that it will take steps to strengthen the Federal OBPS, such as by developing a long term price trajectory past 2030 and imposing the federal backstop where provincial systems fall short of the federal equivalency benchmark.

The *Technology Innovation and Emissions Reduction Regulation* ("**TIER**") is Alberta's output-based carbon pricing regime for large emitters. The TIER facilitates emissions reductions for facilities that emitted 100,000 tonnes of GHGs or more in 2016 or any subsequent year. The TIER also allows facilities emitting less than 100,000 tonnes of GHGs but more than 2,000 tonnes of GHGs to opt-in as a regulated facility. Facilities which are subject to the TIER are exempt from the Federal OBPS carbon price included in the GGPPA as they have been deemed equivalent. In May 2025, the government of Alberta announced that it will

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pause its industrial carbon price at $95 per tonne instead of increasing to $110 per tonne in 2026. However, pursuant to the Canada/Alberta MOU, the federal government committed to work with Alberta in developing a new industrial carbon pricing agreement by April 1, 2026 that increases the price stringency of the TIER regime so that it better aligns with the GGPPA's industrial carbon price.

Amendments to the TIER came into force on January 1, 2023 and include, among other things, the addition of emissions associated with flaring to the regulated emissions of aggregate oil and gas facilities and the annual tightening of emission reduction benchmarks. On September 16, 2025, the Province of Alberta announced that the TIER will be amended to recognize on-site emissions reductions investments as a way for entities to meet their compliance obligations, thereby introducing a new compliance method. Based on an June 2025 Discussion Document, it is anticipated that half of an entity's expenditures on eligible projects can be considered towards TIER compliance. The Discussion Document also lists potential eligible projects, such as retrofitting stationary equipment for increased energy efficiency, low carbon fuel production for internal facility use, carbon capture and storage and heat recovery and certain study-based projects that support an eligible project.

As at December 31, 2025, Pembina had eleven TIER large final emitter facilities, including the Alberta section of the Alliance Pipeline, and five TIER aggregate facilities. At present, the operational and financial impacts of TIER are anticipated to increase over the next five years, due to annual increases in the stringency of emissions performance benchmarks. As more facilities expand and increase production, it is anticipated that additional facilities will become subject to the TIER. The potential costs and benefits to Pembina of those facilities under the TIER are continuing to be assessed.

In British Columbia, an output-based pricing system ("**B.C. OBPS**") was introduced on April 1, 2024, replacing the Clean B.C. Industrial Incentive Program. The B.C. OBPS ensures that there is a price incentive for industrial emitters to reduce GHG emissions, while also seeking to promote innovation and protect competitiveness. Pembina has four facilities subject to the B.C. OBPS, including the B.C. section of the Alliance Pipeline. The financial impacts of this new program on Pembina and its facilities are still being determined.

In Saskatchewan, an output-based performance standards ("**SK OBPS**") program came into effect in 2019. Pembina has four facilities subject to the SK OBPS, including the Saskatchewan section of the Alliance Pipeline, which became covered under this program in 2023. Similar to the B.C. OBPS, it is an intensity-based program in which covered facilities are required to meet an established intensity benchmark. The SK OBPS program was expanded in 2020 and updated in 2023, covering more industrial sectors including the natural gas pipeline sector. Facilities which are subject to the SK OBPS are exempt from the Federal OBPS carbon price included in the GGPPA as they have been deemed equivalent. This may change as in April 2025, the government of Saskatchewan set the rate of its provincial industrial carbon price to $0 per tonne. While the federal government has announced its intention to impose the Federal OBPS backstop in provinces that fall short of the equivalency requirements, it is currently unclear when and how the federal government will do so. Pembina will continue to monitor changes regarding the industrial carbon price. The financial impacts of the SK OBPS program on Pembina and its facilities are expected to increase over the next five years.

The federal Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) ("**Federal Methane Regulations**"), which require reduction of fugitive and vented gas emissions from the upstream oil and gas sector, came into force on January 1, 2020. Draft amendments to the Federal Methane Regulations were released on December 16, 2023 ("**Amended Federal Methane Regulations**"). The Amended Federal Methane Regulations, which the federal government described as "enhanced methane regulations" in November 2025, include enhanced reduction targets, an annual third-party inspection requirement and a performance-based option as an alternative pathway to compliance. The Amended Federal Methane Regulations are planned to take effect in 2027 and apply across the sector by 2030, and may impose additional costs on the operations of Pembina and Pembina's customers.

By an equivalency agreement with the federal government, which originally came into force October 26, 2020, the Federal Methane Regulations do not currently apply in Alberta. The federal and Alberta governments entered into a new equivalency agreement prior to the October 26, 2025 expiry date of the original agreement. The new agreement will be in place until 2030. Pursuant to the Canada/Alberta MOU, the parties agreed to enter into a new methane equivalency agreement on or before April 1, 2026, with a 2035 target date and a new 75% reduction target relative to 2014 emissions levels. The Federal Methane Regulations apply in Ontario and Manitoba but not currently, due to equivalency agreements similar to that in effect in Alberta, in British Columbia or Saskatchewan.

2024 was the second compliance period for the federal Clean Fuel Regulations, which requires all producers and importers of gasoline and diesel in Canada to reduce or offset the carbon intensity of the fuels they produce or import. The Clean Fuel

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Regulations are intended to facilitate a decrease in the carbon intensity of gasoline and diesel used in Canada by approximately 15 percent below 2016 levels by 2030. On November 4, 2025, the federal government announced that it will make "targeted updates" to the Clean Fuel Regulations. The potential costs and benefits of the Clean Fuel Regulations and any "targeted updates" thereto to Pembina and its customers are continuing to be assessed.

In late 2024, the federal government released proposed regulations that, if adopted, would impose a cap on GHG emissions from the upstream oil and gas sector and the LNG sector. The proposed regulations would establish a cap-and-trade system for prescribed activities, such as onshore and offshore oil and gas production, oil sands production and upgrading, natural gas production and processing, and the production of LNG. GHG emissions from certain activities will be capped while emissions of GHGs from specified industrial activities will be prohibited, unless the operator registers in accordance with the regulations. The proposed regulations contemplate reducing emissions from the oil and gas sector by 35 percent below 2019 levels by 2030 to 2032. The federal government completed public consultations regarding the draft regulations and originally announced that it anticipated publishing the final regulations in 2025. However, on November 4, 2025, the federal government announced that, pursuant to its new Climate Competitive Strategy, the GHG emissions cap may no longer be necessary. Additionally, pursuant to the Canada/Alberta MOU, the federal government stated that it will not implement the oil and gas emissions cap in consideration for the mutual commitments agreed to in the Canada/Alberta MOU. <br>Additionally, the federal government released the *Clean Electricity Regulations* on December 17, 2024, which sets limits on the amount of CO2 that is emitted during the generation of electricity from fossil fuels. Pursuant to the Canada/Alberta MOU, the federal government suspended the *Clean Electricity Regulations* in Alberta pending a new industrial carbon pricing agreement to be executed by April 1, 2026. Upon completion of the new industrial carbon pricing agreement and factoring all other measures of the Canada/Alberta MOU to the satisfaction of both parties, the federal government will place the *Clean Electricity Regulations* in Alberta on hold.

The Government of Alberta, in its climate change legislation and guidelines, has legislated an overall cap on oil sands GHG emissions. The legislated emissions cap on oil sands operations has been set to a maximum of 100 megatonnes of CO2<sup>e</sup> in any year, which excludes new upgrading capacity and existing upgrader expansions, up to a combined maximum of 10 million tonnes of CO2<sup>e</sup>, and the electricity portion of cogeneration. This legislated cap may limit oil sands production growth in the future, and its interaction with the proposed federal oil and gas sector emissions cap is unknown at this time.

Pembina is subject to regulation by the AER under the AER's liability management framework. Since 2021, the AER has been in the process of phasing-out its former liability management regime, which included the LLR Program and LMR. In February 2025, the AER announced amendments to the *Oil and Gas Conservation Rules, Pipeline Rules* and various AER Directives to formally eliminate the LMR and LLR.

Directive 088, which came into force on December 1, 2021, institutes a holistic assessment regime with several different regulatory tools not limited to the current use of security deposits. The new holistic liability management framework includes Licencee Capability Assessments (which replaces the LLR Program), Licensee Special Actions, a process to address legacy and post-closure sites, and an expanded mandate of the Orphan Well Association. The new regime, which applies to licence transfers, also includes the Inventory Reduction Program.

Pembina is subject to regulation by the BCER under the Permittee Capability Assessment program ("**PCA Program**"), which became effective in 2022. The PCA Program is similar to the intent of the AER's Directive 088 to assess licensees holistically. It assesses the overall risk of the licensee by examining both financial health measures and deemed liabilities. Licensees are then required to provide security deposits or reduce their deemed liabilities such that their assessed risk under the PCA Program is reduced to zero in a given year. Failure to do so may restrict the licensee's ability to transfer licenses or result in enforcement action by the BCER. Pursuant to the *Energy Statutes Amendment Act, 2022* (British Columbia), the BCER has broadened authority to impose liability for cleanup, restoration and management of oil and gas infrastructure sites on directors and/or officers of a current or former permittee, or on a "responsible person", which is broadly defined to include those holding a legal or beneficial interest in petroleum or natural gas rights, production or profits associated with the oil and gas activity at issue, among others. As of June 1, 2024, the PCA Program was expanded to include dormant facilities and pipelines.

Policy reviews relating to climate change, liability management and other environmental issues are ongoing in the jurisdictions in which Pembina operates. Through active participation with industry associations and direct engagement with regulatory bodies, Pembina will continue to monitor and assess for material impacts to Pembina's business as regulations and policies continue to be developed.

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While Pembina believes its current operations are in material compliance with applicable environmental, health and safety laws, there can be no assurance that substantial costs or liabilities will not be incurred as a result of non-compliance with such laws. Moreover, it is possible that other developments, such as changes in environmental, health and safety laws, regulations and enforcement policies thereunder, including with respect to climate change, claims for damages to persons or property resulting from Pembina's operations, and the discovery of pre-existing environmental liabilities in relation to Pembina's existing or future properties or operations, could result in significant costs and liabilities to Pembina. If Pembina is not able to recover the resulting costs or increased costs through insurance or increased tolls, cash flow available to pay dividends to Shareholders and to service obligations under Pembina's debt securities and Pembina's other debt obligations could be adversely affected.

Changes in environmental, health and safety regulations and legislation, including with respect to climate change, may also impact Pembina's customers and could result in crude oil and natural gas development and production becoming uneconomical, which would impact throughput and revenue on Pembina's systems and in its facilities.

See "*Risks Inherent in Pembina's Business – Reserve Replacement, Throughput and Product Demand*" above.

While Pembina maintains insurance for damage caused by seepage or pollution from its pipelines or facilities in an amount it considers prudent and in accordance with industry standards, certain provisions of such insurance may limit the availability thereof in respect of certain occurrences unless they are discovered within fixed time periods, which typically range from 72 hours to 30 days. Although Pembina believes it has adequate pipeline monitoring systems in place to monitor for a significant spill of product, if Pembina is unaware of a problem or is unable to locate the problem within the relevant time period, insurance coverage may lapse and may not be available.

*Abandonment Costs* 

Pembina is responsible for compliance with all applicable laws and regulations regarding the dismantling, decommissioning, environmental, reclamation and remediation activities associated with abandonment of its pipeline systems and other assets at the end of their economic life, and these abandonment costs may be significant. An accounting provision is made for the estimated cost of site restoration and such cost is either capitalized in the relevant asset category or applied directly to profit and loss. A provision is recognized if, as a result of a past event, Pembina has a present legal or constructive obligation that can be reliably estimated, and it is probable that an outflow of economic benefits will be required to settle the obligation. Pembina's estimates of the costs of such abandonment or decommissioning could be materially different than the actual costs incurred. For more information with respect to Pembina's estimated net present value of decommissioning obligations, see Note 15 to Pembina's Financial Statements, which note is incorporated by reference herein.

The proceeds from the disposition of certain assets, including in respect of certain pipeline systems and line fill, may be available to offset abandonment costs. Pembina may, in the future, determine it prudent or be required by applicable laws or regulations to establish and fund additional reclamation funds to provide for payment of future abandonment costs. Such reserves could decrease cash flow available to pay for dividends to Shareholders and to service obligations under Pembina's debt securities and Pembina's other debt obligations.

To the best of its knowledge, Pembina has complied in all material respects with CER requirements relative to its wholly-owned CER-regulated pipelines for abandonment funding and has completed the compliance-based filings that are required under the applicable CER rules and regulations regarding the abandonment of its pipeline systems and assets. Pembina also has ownership in CER-regulated pipelines including in respect of the Alliance Pipeline, the Tupper pipelines and the Kerrobert pipeline. Pembina, and its joint venture partner, in the case of the Tupper pipelines, is responsible for the abandonment funding and the submission of the CER-compliance based filings for those CER-regulated pipelines. Every five years, the CER reviews the amount of funds that companies must set aside to pay for future abandonment of their pipeline systems. Most recently, the CER completed a review of the abandonment funding calculations and obligations on March 27, 2024. Pembina continues to complete the annual reporting as required by the CER and meet the funding obligations imposed by the CER.

*Operating and Capital Costs* 

The operating and capital costs of Pembina's assets may vary considerably from current and forecasted values and rates and represent significant components of the cost of providing service. In general, as equipment ages, costs associated with such equipment may increase over time. In addition, operating and capital costs may increase as a result of a number of factors beyond Pembina's control, including general economic, business and market conditions and supply, demand and/or inflation in respect of required goods and/or services. Dividends may be reduced if significant increases in operating or capital costs are

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incurred and this may also impact the ability of Pembina to service obligations under its debt securities and other debt obligations.

Although certain operating costs are recaptured through the tolls charged on natural gas volumes processed and crude oil and NGL transported, respectively, to the extent such tolls escalate, producers may seek lower cost alternatives or stop production of their crude oil and/or natural gas.

*Hedging Activities*

The Company utilizes financial derivative instruments as part of its overall risk management strategy to assist in managing the exposure to commodity price, interest rate, cost of power and foreign exchange risks. As an example of commodity price mitigation, the Company actively fixes a portion of its exposure to fractionation margins through the use of derivative financial instruments. Additionally, Pembina's Marketing business is also exposed to variability in quality, time and location differentials for various products, and financial instruments may be used to offset the Company's exposures to these differentials. However, these hedging arrangements may expose the Company to risk of financial loss in certain circumstances and there is no guarantee that such hedging arrangements and other efforts to manage market and inventory risks will generate profits or mitigate all of the market and inventory risk associated with Pembina's business. Further, certain hedging arrangements may limit the benefit the Company would otherwise receive from increases in commodity price, decreases in interest rates and changes in foreign exchange rates, and may expose Pembina to credit risks associated with counterparties with whom the Company has contracts. The Company does not trade financial instruments for speculative purposes. Commodity price fluctuations and volatility can also impact producer activity and throughput in Pembina's infrastructure, which is discussed in more detail above.

For more information with respect to Pembina's financial instruments and financial risk management program, see Note 23 to Pembina's Financial Statements, which note is incorporated by reference herein.

*Risks Relating to NGL by Rail* 

Pembina's operations include rail loading, offloading and terminalling facilities. Pembina relies on railroads and trucks to distribute its products for customers and to transport raw materials to its processing facilities. Costs for environmental damage, damage to property and/or personal injury in the event of a railway incident involving hydrocarbons have the potential to be significant. At this time, the *Railway Safety Act* (Canada), which governs the operation of railway equipment, does not contemplate regulatory enforcement proceedings against shippers, but consignors and shippers may be subject to regulatory proceedings under the *Transportation of Dangerous Goods Act* (Canada), which specifies, among other things, the obligations of shippers to identify and classify dangerous goods, select appropriate equipment and prepare shipping documentation. While the *Canada Transportation Act* was amended in 2015 to preclude railway companies from shifting liability for third-party claims to shippers by tariff publication alone, major Canadian railways have adopted standard contract provisions designed to implement such a shift. Under various environmental statutes in both Canada and the U.S., Pembina could be held responsible for environmental damage caused by hydrocarbons loaded at its facilities or being carried on its leased rail cars. Pembina partially mitigates this risk by securing insurance coverage, but such insurance coverage may not be adequate in the event of an incident.

Railway incidents in Canada and the U.S. have prompted regulatory bodies to initiate reviews of transportation rules and publish various directives. Regulators in Canada and the U.S. have begun to phase-in more stringent engineering standards for tank cars used to move hydrocarbon products, which require all North American tank cars carrying crude oil or ethanol to be retrofitted and all tank cars carrying flammable liquids to be compliant in accordance with the required regulatory timelines. In addition, in 2020, the Government of Canada directed industry to review and update the rules regarding the transportation of crude oil and liquefied petroleum gas. While most legislative and regulatory changes apply directly to railway companies, costs associated with retrofitting locomotives and rail cars, implementing safety systems, increased inspection and reporting requirements may be indirectly passed on to Pembina through increased freight rates and car leasing costs. In addition, regulators in Canada and the U.S. have implemented changes that impose obligations directly on consignors and shippers, such as Pembina, relating to the certification of product, equipment procedures and emergency response procedures.

In the event that Pembina is ultimately held liable for any damages resulting from its activities relating to transporting NGL by rail, for which insurance is not available, or increased costs or obligations are imposed on Pembina as a result of new regulations, this could have an impact on Pembina's business, operations and prospects and could impact earnings and cash flow available to pay dividends and to service obligations under Pembina's debt securities and other debt obligations.

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*Risks Related to Diluent Usage in the Oil Sands*

Oil sands production continues to rely on diluent (primarily condensate) blending to enable transportation of bitumen to markets via pipeline or rail. A shortage, or increase in the price, of diluent may cause oil sands producers' transportation costs to increase, which may result in less demand for the Company's services and have a negative impact on Pembina's financial performance and cash flows. Further, oil sands producers continue to invest in and evaluate technologies and methodologies to reduce the volume of diluent required for product transport. Constraints of diluent supply in the market or increases in diluent costs may accelerate such producers' investments in diluent replacement technologies. A material reduction in diluent demand from oil sands producers, whether as a result of decreased supply, or increased prices, of diluent or due to the successful implementation of diluent reduction technologies, could reduce volumes shipped on Pembina's pipeline assets and reduce demand for capacity at certain of Pembina's facilities particularly for fractionation services, which could, in either case, have a negative impact on Pembina's financial performance and cash flows*.*

**Risk Factors Relating to the Securities of Pembina** 

*Dilution of Shareholders* 

Pembina is authorized to issue, among other classes of shares, an unlimited number of Common Shares for consideration on terms and conditions as established by the Board of Directors without the approval of Shareholders in certain instances. Existing Shareholders have no pre-emptive rights in connection with such further issuances. Any issuance of Common Shares may have a dilutive effect on existing Shareholders.

*Risk Factors Relating to the Activities of Pembina and the Ownership of Securities* 

The following is a list of certain risk factors relating to the activities of Pembina and the ownership of its securities:

• the level of Pembina's indebtedness from time to time could impair Pembina's ability to obtain additional financing on a timely basis to take advantage of business opportunities that may arise, which may have an adverse effect on the value of Pembina's securities;

• the uncertainty of future dividend payments by Pembina and the level thereof, as Pembina's dividend practices and the funds available for the payment of dividends from time to time will be dependent upon, among other things, operating cash flow generated by Pembina and its subsidiaries, financial requirements for Pembina's operations, the execution of its growth strategy and the satisfaction of solvency tests imposed by the ABCA for the declaration and payment of dividends;

• Pembina may make future acquisitions or may enter into financings or other transactions involving the issuance of securities of Pembina which may be dilutive to the holders of Pembina's securities;

• the inability of Pembina to manage growth effectively, and realize the anticipated growth opportunities from acquisitions and new projects, could have an adverse impact on Pembina's business, operations and prospects, which may also have an adverse effect on the value of Pembina's securities; and

• the market value of the Common Shares may deteriorate materially if Pembina is unable to maintain its cash dividend practices or make cash dividends in the future.

*Market Value of Common Shares and Other Securities* 

Pembina cannot predict at what price the Common Shares, Class A Preferred Shares or other securities issued by Pembina will trade in the future. Common Shares, Class A Preferred Shares and other securities of Pembina will not necessarily trade at values determined solely by reference to the underlying value of Pembina's assets. One of the factors that may influence the market price of the Common Shares and the Class A Preferred Shares is the annual dividend yield of such securities. An increase in interest rates may lead holders and/or purchasers of Common Shares or Class A Preferred Shares to demand a higher annual dividend yield, which could adversely affect the market price of the Common Shares or Class A Preferred Shares. In addition, the market price for Common Shares, Class A Preferred Shares and other securities of Pembina may be affected by announcements of new developments, changes in Pembina's operating results, failure to meet analysts' expectations, changes in credit ratings, changes in general market conditions, fluctuations in the market for equity or debt securities and other factors beyond the control of Pembina. There can be no assurance that the market price of the Common Shares, Class A Preferred Shares and other securities of Pembina will not experience significant fluctuations in the future,

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including fluctuations that are unrelated to Pembina's performance. For these reasons, investors should not rely on past trends in the price of Common Shares, Class A Preferred Shares or other securities issued by Pembina to predict the future price of Common Shares or Class A Preferred Shares or Pembina's financial results.

**Accordingly, holders are encouraged to obtain independent legal, tax and investment advice with respect to the holding of Common Shares or Class A Preferred Shares and other securities issued by Pembina.** 

**General Risk Factors** 

*Health and Safety* 

The operation of Pembina's business is subject to hazards of gathering, processing, transporting, fractionating, storing and marketing hydrocarbon products. Such hazards include, but are not limited to: blowouts; fires; explosions; gaseous leaks, including sour gas; migration of harmful substances; oil spills; corrosion; and acts of vandalism and terrorism. These hazards may interrupt operations, impact Pembina's reputation, cause loss of life or personal injury to the Company's workers or contractors, result in loss of or damage to equipment, property, information technology systems, related data and control systems or cause environmental damage that may include polluting water, land or air. Further, several of the Company's pipeline systems and related assets are operated in close proximity to populated areas and a major incident could result in injury or loss of life to members of the public. A public safety incident could also result in reputational damage to the Company, material repair costs or increased costs of operating and insuring Pembina's assets.

*Cybersecurity* 

Pembina's technology infrastructure, technologies and data are becoming increasingly integrated. Such integration creates a risk that the failure of one system, including due to factors such as telecommunication failures, cyber-terrorism, security breaches and intentional or inadvertent user misuse or error, could lead to failure of other systems which may also have an impact on the Company's physical assets and its ability to safely operate such assets. Furthermore, Pembina and its third-party vendors collect and store sensitive data in the ordinary course of business, including personal identification information of employees as well as proprietary business information and that of the Company's customers, suppliers, investors and other stakeholders. Notable cybersecurity threats include unauthorized access to information technology systems due to hacking, viruses, cyber phishing attacks and other causes that can result in service disruptions, system failures and unauthorized access to confidential business information. Due to Pembina's high level of technological integration, such an attack on the information technology systems of one segment or asset of Pembina could have a material adverse effect on the broader business, operations or financial results of the Company.

A breach in the security or failure of Pembina's information technology could result in operational outages, delays, damage to assets or the environment, reputational harm, increased vulnerability to fraud or extortion, lost profits, compromised or otherwise unusable internal systems, lost data and other adverse outcomes for which Pembina could be held liable, all of which could adversely affect Pembina's reputation, business, operations or financial results. As a result of a cyber-attack or security breach, Pembina could also be liable under laws that protect the privacy of personal information or subject to regulatory penalties.

As a result of the critical nature of energy infrastructure and Pembina's use of information systems and other digital technologies to control its assets, Pembina faces an increased risk of cyber-attacks. Cyber threat actors have attacked and threatened to attack energy infrastructure, and various government agencies have increasingly stressed that these attacks are targeting critical infrastructure, and are increasing in sophistication, magnitude, and frequency. New cybersecurity legislation, regulations and orders have been recently implemented or proposed resulting in additional actual and anticipated regulatory oversight and compliance requirements, which is expected to require significant internal and external resources. Pembina cannot predict the potential impact to its business of potential future legislation, regulations or orders relating to cybersecurity.

Furthermore, media reports about a cyber-attack or other significant security incident affecting the Company, whether accurate or not, or, under certain circumstances, Pembina's failure to make adequate or timely disclosures to the public, law enforcement, other regulatory agencies or affected individuals following any such event, whether due to delayed discovery or otherwise, could negatively impact its operating results and result in other negative consequences, including damage to Pembina's reputation or competitiveness, harm to its relationships with customers, partners, suppliers and other third parties, interruption to its management, remediation or increased protection costs, significant litigation or regulatory action, fines or penalties, all of which could materially adversely affect the Company's business, operations, reputation or financial results.

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*Artificial Intelligence*

Pembina's infrastructure, technologies and data may integrate the use of artificial intelligence ("**AI**"), which presents certain risks, challenges and unintended consequences that could impact Pembina's business and operations. AI algorithms and training methodologies may be flawed, and dependence on AI for decision-making, without adequate safeguards, could introduce operational vulnerabilities by generating inaccurate outcomes or unintended results based on deficiencies in underlying data. The use of AI also carries inherent risks related to data privacy and cybersecurity, including the potential for intended or unintended transmission of proprietary or sensitive information. AI tools may rely on datasets that include content subject to license, copyright, trademark, patent or other intellectual property protections, raising potential compliance concerns. The legal and regulatory framework for AI remains uncertain and under development, with potential liability risks related to breaches of intellectual property or privacy rights. As new AI laws and regulations develop, Pembina's obligation to comply could result in significant costs, impact its business or limit the incorporation of certain AI capabilities into its operations.

*Additional Financing and Capital Resources* 

The timing and amount of Pembina's capital expenditures and contributions to equity accounted investees, and the ability of Pembina to repay or refinance existing debt as it becomes due, directly affects the amount of cash available for Pembina to pay dividends. Future acquisitions, expansions of Pembina's assets, other capital expenditures and the repayment or refinancing of existing debt as it becomes due may be financed from sources such as cash generated from operations, the issuance of additional Common Shares, Class A Preferred Shares or other securities (including debt securities) of Pembina and borrowings. Dividends may be reduced, or even eliminated, at times when significant capital or other expenditures are made. There can be no assurance that sufficient capital will be available on terms acceptable to Pembina, or at all, to make additional investments, fund future expansions or make other required capital expenditures. During periods of weakness in the global economy, and, in particular, the commodity-related industry sectors, Pembina may experience restricted access to capital and increased borrowing costs. The ability of Pembina to raise capital depends on, among other factors, the overall state of capital markets, Pembina's credit rating, investor demand for investments in the energy industry generally and demand for Pembina's securities specifically. To the extent that external sources of capital, including the proceeds from the issuance of additional Common Shares, Class A Preferred Shares or other securities or the availability of additional credit facilities, become limited or unavailable on acceptable terms, or at all, due to credit market conditions or otherwise, Pembina's ability to make the necessary capital investments to maintain or expand its operations, to repay outstanding debt or to invest in assets, as the case may be, may be impaired. To the extent Pembina is required to use operating cash flow to finance capital expenditures or acquisitions or to repay existing debt as it becomes due, the level of dividends payable may be reduced.

*Counterparty Credit Risk* 

Counterparty credit risk represents the financial loss Pembina may experience if a counterparty to a financial instrument or commercial agreement fails to meet its contractual obligations to Pembina in accordance with the terms and conditions of such instruments or agreements with Pembina. Counterparty credit risk arises primarily from Pembina's trade and other receivables, finance lease receivables, advances to related parties and derivative financial instruments.

Pembina continues to closely monitor and reassess the creditworthiness of its counterparties, including financial institutions. Pembina may reduce or mitigate its exposure to certain counterparties where it is deemed warranted and permitted under contractual terms. Pembina manages counterparty credit risk through established credit management techniques, including conducting comprehensive financial and other assessments on all high exposure new counterparties. Pembina 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-designated counterparty exposure limit matrix which represents the maximum dollar amounts of counterparty exposure by debt rating that can be approved for a particular counterparty. While Pembina takes active steps to monitor and manage its counterparty credit risk, its credit procedures and policies cannot completely eliminate counterparty credit risk and Pembina cannot predict to what extent Pembina's business would be impacted by deteriorating conditions in the economy, including possible declines in the creditworthiness of its customers, vendors or counterparties. Further, it is possible that payment or performance defaults from these parties, if significant, could adversely affect Pembina's earnings, cash flows and financial results.

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Financial assurances from counterparties may include guarantees, letters of credit and cash. As at December 31, 2025, letters of credit totalling approximately $249 million (2024: $276 million) were held primarily in respect of customer trade receivables.

Pembina has typically collected its receivables in full. As at December 31, 2025, approximately 98 percent (2024: 99 percent) of receivables were current. Pembina has a general lien and a continuing and first priority security interest in, and a secured charge on, all of a shipper's petroleum products in its custody. The risk of non-collection is considered to be low and no material impairment of trade and other receivables has been made as of the date hereof.

Pembina monitors and manages its concentration of counterparty credit risk on an ongoing basis. Pembina also evaluates counterparty risk from the perspective of future exposure with existing or new counterparties that support future capital expansion projects. Pembina believes these measures are prudent and allow for effective management of its counterparty credit risk but there is no certainty that they will protect Pembina against all material losses. As part of its ongoing operations, Pembina must balance its market and counterparty credit risks when making business decisions.

*Debt Service* 

As at December 31, 2025, Pembina had exposure to floating interest rates on approximately $1,305 million (2024: $788 million) in debt. Pembina may enter into certain derivative financial instruments to manage the Company's exposure to floating interest rates.

Pembina and its subsidiaries are permitted to borrow funds to finance the purchase of pipelines and other energy infrastructure assets, to fund capital expenditures or other financial obligations or expenditures in respect of such assets and for working capital purposes. Amounts paid in respect of interest and principal on debt incurred in respect of those assets reduce the amount of cash flow available for dividends on the Common Shares and Class A Preferred Shares. Pembina is also required to meet certain financial covenants under the indentures governing its medium-term notes and the agreements governing the credit facilities, and is subject to customary restrictions on its operations and activities, including restrictions on the granting of security, incurring indebtedness and the sale of its assets.

The lenders under Pembina's credit facilities have been provided with guarantees and subordination agreements. If Pembina becomes unable to pay its debt service charges or otherwise commits an event of default, payments to the lenders under its credit facilities will rank in priority to dividends.

Although Pembina believes its existing credit facilities are sufficient for its immediate liquidity requirements, there can be no assurance that the amount available thereunder will be adequate for the future financial obligations of Pembina or that additional funds will be able to be obtained on terms acceptable to Pembina, or at all.

*Credit Ratings* 

Rating agencies regularly evaluate Pembina and base their ratings of Pembina's long-term and short-term debt and Class A Preferred Shares on a number of factors. These factors include Pembina's financial strength as well as factors not entirely within Pembina's control, including conditions affecting the industry in which Pembina operates generally and the wider state of the economy. A credit rating downgrade could also limit Pembina's access to debt and preferred share markets.

Pembina's borrowing costs and ability to raise funds are also directly impacted by its credit ratings. Credit ratings may also be important to suppliers or counterparties when they seek to engage in certain transactions with Pembina. A credit rating downgrade may impair Pembina's ability to enter into arrangements with suppliers or counterparties, engage in certain transactions, limit Pembina's access to private and public credit markets or increase the costs of borrowing under its existing credit facilities. There can be no assurance that one or more of Pembina's credit ratings will not be downgraded.

*Reliance on Management, Key Individuals and a Skilled Workforce*

Pembina is dependent on senior management and directors of the Company in respect of the governance, administration and management of all matters relating to Pembina and its operations and administration. The loss of the services of key individuals could have a detrimental effect on Pembina and the Company might not be able to find replacements on a timely basis or with the same level of skill and experience. In addition, Pembina's operations require the retention and recruitment of a skilled workforce, including engineers, technical personnel and other professionals. Pembina competes with other companies in the energy industry for this skilled workforce. If the Company is unable to retain current employees and/or

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recruit new employees of comparable skill, knowledge and experience, Pembina's business and operations could be negatively impacted. The costs associated with retaining and recruiting key individuals and a skilled workforce could adversely affect Pembina's business opportunities and financial results and there is no assurance that Pembina will continue to attract and retain all personnel necessary for the development and operation of its business.

*Indigenous Land Claims and Consultation Obligations* 

Indigenous people have claimed title and rights to a considerable portion of the lands in western Canada. The successful assertion of Indigenous title or other Indigenous rights claims may have an adverse effect on western Canadian crude oil and natural gas production or oil sands development and may result in reduced demand for Pembina's assets and infrastructure that service those areas, which could have a material adverse effect on Pembina's business and operations.

In Canada, the federal and provincial governments (the "**Crown**") have a duty to consult and, when appropriate, accommodate Indigenous peoples when the interests of the Indigenous peoples may be affected by a Crown action or decision. Crown actions include the decision to issue a regulatory approval relating to activities that may impact Indigenous rights, interests or lands. The Crown may rely on steps undertaken by a regulatory agency to fulfill its duty to consult and accommodate in whole or in part. Therefore, the processes established by regulatory bodies, such as the AER, the BCER, the BCEAO and the CER, often include an assessment of Indigenous rights claims and consultation obligations. While the Crown holds ultimate responsibility for ensuring consultation is adequate, this issue is often a major aspect of regulatory permitting processes. If a regulatory body, or the Crown itself, determines that the duty to consult has not been appropriately discharged relative to the issuance of regulatory approvals required by Pembina, the issuance of such approvals may be delayed or denied, thereby impacting Pembina's Canadian operations.

As described in "*Regulation and Legislation*" above, the CER Act, IAA, and associated amendments to the *Fisheries Act* (Canada) and the *Canadian Navigable Waters Act* (Canada) replaced previously applicable regimes in 2019. A number of the federal regulatory process amendments pertained to the participation of Indigenous groups and the protection of Indigenous and treaty rights. The now-current legislation generally codifies existing law and practice with respect to these matters. For example, decision makers are now expressly required to consider the effects (positive or negative) of a proposed project on constitutionally-protected Indigenous rights, as well as Indigenous peoples themselves, and ensure that consultation is undertaken during the planning phase of impact assessment processes. The legislation also creates a larger role for Indigenous governing bodies in the impact assessment process (enabling the delegation of certain aspects of the impact assessment process to such groups) and requires decision makers to consider Indigenous traditional knowledge in certain cases.

The federal government is advancing recognition of Indigenous rights across Canada. As part of these efforts, the federal government enacted the *United Nations Declaration on the Rights of Indigenous Peoples Act* ("**UNDRIP**") on June 21, 2021, with the purpose of affirming the application of the UNDRIP in Canadian law. The federal government published its UNDRIP Action Plan on June 21, 2023, which is comprised of 181 guiding measures spanning the 2023-2028 period. Until 2025, courts had not determined whether UNDRIP creates new substantive rights that might impact development activities, such as those of Pembina or its customers. However, on February 19, 2025, the Federal Court of Canada in *Kebaowek First Nation v. Canadian Nuclear Laboratories*, 2025 FC 319 determined that UNDRIP must guide the Crown's analysis of the scope of the duty to consult and accommodate. According to the Federal Court, the Crown must interpret the duty to consult through the more rigorous informed, prior and free consent standard set out in UNDRIP, which operates as an added "layer" to existing constitutional obligations. In its decision, the Federal Court acknowledged the importance of this decision as one of the first to test Canada's commitments to implement the principles set out in UNDRIP and decide how these principles can aid the interpretation of Canadian law. In May 2025, the Crown appealed this decision to the Federal Court of Appeal. The Federal Court has not issued a decision on the appeal.

Structurally similar legislation to UNDRIP, the *Declaration on the Rights of Indigenous Peoples Act* ("**DRIPA**"), was enacted by British Columbia in 2019. The DRIPA is just one piece of the Government of British Columbia's strategy to include greater First Nation involvement in regulatory decision-making. The recognition of Indigenous rights is also facilitated by the renewed British Columbia *Environmental Assessment Act* (the "**EA Act**") that came into force in late 2019. The EA Act is designed as a "consent-based" environmental assessment model and is intended to support reconciliation with Indigenous peoples and the implementation of the UNDRIP. The legislation requires the BCEAO to seek participating Indigenous groups' consent with respect to, among other things, the decision to issue an environmental assessment certificate to a given project. While the EA Act does not strictly require consent in most cases, the legislation creates significant participation opportunities for Indigenous groups during environmental assessments. Furthermore, the Government of British Columbia is beginning to explore bilateral "Consent Decision-Making Agreements" under the DRIPA which require First Nation consent for certain

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resource development projects, including having completed two of such agreements since June 6, 2022. These developments may increase the time required to obtain regulatory approvals or the risk of such approvals and thereby impact Pembina's operations in British Columbia.

Pembina continues to actively monitor the development of the regulations required to facilitate the implementation of the UNDRIP Act, DRIPA, EA Act and the impact that other federal and provincial government initiatives on Indigenous rights may have on its business.

In addition, Pembina is monitoring the impact of judgments of the Supreme Court of British Columbia with respect to First Nation claims as well as similar developments in Alberta, including the judgment in favour of the Blueberry River First Nation ("**BRFN**") against the Province of British Columbia relating to the cumulative impact of industrial development within the BRFN treaty area, the judgment in favour of Saik'uz First Nation and Stellat'en First Nation in nuisance against the Crown and private company Rio Tinto Alcan Inc., and the judgment in favour of the Gitxaala Nation and Ehattesahet First Nation requiring consultation prior to staking mineral claims. Pembina is also monitoring the appeal proposed by British Columbia, the City of Richmond and the Musqueam First Nation of the September 2025 decision of the Supreme Court of British Columbia that determined that the Crown had unjustifiably infringed the Cowichan Nation's Aboriginal title by issuing fee simple land grants to third parties.

These judgments have contributed and may further contribute to the acceleration of the Government of British Columbia's imposition of additional requirements to obtain regulatory approvals for developing pipelines or associated facilities, and in some instances restrictions on those approvals, and could cause delays, suspensions, or deferrals in the development of such facilities. The recent judgments may also impact the current and future activities of producers operating in British Columbia and cause them to decrease production, which could, in turn, reduce such producers' demand for Pembina's existing pipeline capacity and processing assets, and may have an adverse effect on Pembina's business. On January 18, 2023, the Government of British Columbia and BRFN announced that they had entered into the Blueberry River First Nations Implementation Agreement in response to the BRFN decision. The agreement creates a framework for how resource development may continue within the BRFN claim area, which includes, among other things, limiting new surface disturbances from oil and gas development in BRFN's claim area to 750 hectares per year while a long-term cumulative effects management regime is developed and implemented. The Government of British Columbia has also reached interim agreements with four other Treaty 8 First Nations which commit to a similar development of a revised approach to environmental assessment in their territories. Duncan's First Nation in Alberta has also filed a claim similar to that of BRFN regarding cumulative impacts in Northwestern Alberta. Pembina continues to actively monitor regulatory developments relating to Indigenous claims in British Columbia and Alberta; however, Pembina cannot predict future regulatory changes that may arise to address the Court's decisions in these or future cases and any such regulatory changes could impact the operations of Pembina and Pembina's customers.

*Potential Conflicts of Interest* 

Shareholders and other securityholders of Pembina are dependent on senior management and the directors of Pembina for the governance, administration and management of Pembina. Certain directors and officers of Pembina may be directors or officers of entities in competition to Pembina or may be directors or officers of certain entities in which Pembina holds an equity investment in. As such, certain directors or officers of Pembina may encounter conflicts of interest in the administration of their duties with respect to Pembina. Pembina mitigates this risk by requiring directors and officers to disclose the existence of potential conflicts in accordance with Pembina's Code of Ethics Policy and in accordance with the ABCA.

*Litigation* 

In the course of their business, Pembina and its various subsidiaries and affiliates may be subject to lawsuits and other claims, including with respect to Pembina's growth or expansion projects. In recent years, there has been an increase in climate and disclosure-related litigation against governments as well as companies involved in the energy industry and there is no assurance that Pembina will not be impacted by such litigation, or by other legal proceedings. Defence and settlement costs associated with such lawsuits and claims may be substantial, even with respect to lawsuits and claims that have no merit. Due to the inherent uncertainty of the litigation process, the resolution of any particular legal or other proceeding may have a material adverse effect on the financial position or operating results of Pembina.

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*Changes in Tax Legislation*

Tax legislation that Pembina is subject to may be amended (or the interpretation of such legislation may change), retroactively or prospectively, resulting in tax consequences that materially differ from those contemplated by Pembina in the jurisdictions in which Pembina has operations, which may create a risk of non-compliance and re-assessment. While Pembina believes that its tax filing positions are appropriate and supportable, it is possible that governing tax authorities may: (i) amend tax legislation (or its interpretation of such legislation may change), or (ii) successfully challenge Pembina's interpretation of tax legislation, either of which could expose Pembina to additional tax liabilities and may affect Pembina's estimate of current and future income taxes and could have an adverse effect on the financial condition and prospects of Pembina and the distributable cash flow available to pay dividends and to service obligations under Pembina's debt securities and other debt obligations.

*Foreign Exchange Risk* 

Pembina's cash flows, including a portion of its commodity-related cash flows and certain cash flows from U.S.-based infrastructure assets, are subject to currency risk, arising from the denomination of specific cash flows in U.S. dollars. Additionally, a portion of Pembina's capital expenditures, and contributions or loans to Pembina's U.S.-based investments in equity accounted investees, may be denominated in U.S. dollars. Pembina monitors, assesses and responds to these foreign currency risks using an active risk management program, which may include the exchange of foreign currency for domestic currency at a fixed rate.

*Political Uncertainty*

Political and social events and decisions made in Canada, the U.S. and elsewhere, including changes to federal, provincial, state or municipal governments in Canada and the U.S., may create future uncertainty on international and national financial and economic markets. This uncertainty may impact the energy industry in Canada and may have an adverse effect on Pembina's business and financial results.

A Canadian federal election occurred in 2025. Canadians returned the governing Liberal Party of Canada to power as a minority government, but under a new Prime Minister. The new government has announced its intention to transform Canada into an "energy superpower," including through the expansion of oil and gas production and exports. Following the election, the government introduced legislation to officially repeal the federal consumer-based carbon tax and announced plans to modify the federal industrial OBPS regime. It is unclear whether regulations proposed, but not yet enacted, under the previous government, such as the oil and gas emissions cap regulation, will take effect. Pembina continues to monitor changes to the federal government's climate change policy and how such changes will impact Pembina's business activities. For example, the federal government stated in November 2025 that it will not implement the oil and gas emissions cap in consideration for the mutual commitments agreed to in the Canada/Alberta MOU.

Policy changes at the provincial level are also a source of uncertainty. For example, the Government of Alberta introduced various legislative changes pertaining to the generation and transmission of electricity in 2024 and has indicated additional changes are forthcoming. Such changes have created uncertainty with respect to the pace and requirements of future renewables development in Alberta, which could impact renewables projects that Pembina's customers or partners have under development, which might in turn impact, among other things, progress on GHG emissions reduction efforts. Pembina continues to evaluate the impact of any potential changes on its business and to monitor new developments.

*Tariffs and Trade Policies*

Pembina's business could be adversely affected by the imposition of new tariffs or changes to existing tariffs and export or import restrictions. A significant portion of Pembina's revenue is derived from the transportation, processing and marketing of hydrocarbons produced in Canada, and many of Pembina's Canadian customers rely on access, through Pembina's and third party pipelines and facilities, to U.S. markets for the sale of their products. In addition, although a significant portion of Pembina's assets and operations are located in Canada, Pembina also owns and operates assets in the United States. Further, Pembina's Marketing business markets products to customers in both the U.S. and to customers in Canada.

Accordingly, the introduction of new trade policies or barriers, including the imposition of new tariffs, duties or other trade restrictions on Canadian hydrocarbon products exported to the U.S., or the imposition of new or retaliatory tariffs, duties or trade restrictions on hydrocarbon products imported into Canada from the U.S., could result in a decrease in, or increase the volatility of, commodity prices and/or price differentials which could, in turn, reduce the demand for Pembina's services and

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have an adverse effect on Pembina's business, financial condition and results of operations. <br>Tariffs imposed by the Canada and U.S. governments on energy exports varied throughout 2025. On March 4, 2025, the U.S. announced a 10 percent tariff on oil and gas imports from Canada. However, a few days later, the U.S. implemented a tariff exemption for all energy imports from Canada that are compliant with the Canada-United States-Mexico Agreement ("**CUSMA**"). On August 1, 2025, the U.S. increased the tariff on imports from Canada that are not compliant with the CUSMA to 35 percent. Canada did not include energy imports from the U.S. as part of its counter tariff measures. In 2026, Canada, the U.S. and Mexico are scheduled to review the CUSMA pursuant to its five-year review provision. Pembina continues to monitor developments in Canada-U.S. trade relations closely. However, the Company cannot predict the full impact that changing government policies, legislation or trade disputes may have on its business, financial condition and results of operations.

*Risks Relating to Breach of Confidentiality*

Pembina regularly enters into confidentiality agreements with third parties prior to the disclosure of any confidential information when discussing potential business relationships or other transactions. Breaches of confidentiality could subject Pembina to competitive risk and may cause significant damage to its business. There is no assurance that, in the event of a breach of confidentiality, Pembina will be able to obtain equitable remedies from a court of competent jurisdiction in a timely manner, if at all, in order to prevent or mitigate any damage to its business that such a breach of confidentiality may cause.

*Concentration of Assets in the Western Canadian Sedimentary Basin*

The majority of Pembina's assets are concentrated in the WCSB, which leaves the Company exposed to the economic conditions of that area. Pembina mitigates this risk through a diversity of business activities within the area and by owning and operating assets in the U.S.

*Impacts of Geopolitical Events*

While Pembina's operations, based solely in North America, have not been directly impacted to date, global or international geopolitical events such as armed conflict and political instability, including political uncertainty in certain South American countries, the ongoing conflicts in the Middle East and between Ukraine and Russia, and international responses thereto, may have potential wide-ranging consequences for global market volatility and economic conditions, including energy and commodity prices, which may, in turn, increase inflationary pressures and interest rates. The short-, medium- and long-term implications of any such geopolitical events, including potential direct and indirect impacts on Pembina which could have a material and adverse effect on Pembina's business, financial condition and results of operations, are difficult to predict with any certainty. Depending on their extent, duration, and severity, such geopolitical events may have the effect of heightening many of the other risks described herein, including, without limitation, the risks relating to Pembina's exposure to commodity prices; the successful completion of Pembina's growth and expansion projects, including the expected return on investment thereof; supply chains and Pembina's ability to obtain required equipment, materials or labour; cybersecurity risks; inflationary pressures; and restricted access to capital and increased borrowing costs as a result of increased interest rates.<br>*Modern Slavery Act*

In 2024, the *Fighting Against Forced Labour and Child Labour in Supply Chain Act* came into force in Canada. Pursuant to the legislation, any company that is subject to reporting requirements, including Pembina, is required to conduct certain due diligence on its supply chains and to file an annual report accordingly. While Pembina is currently unaware of any forced or child labour in any of its supply chains, the increased scrutiny on the supply chains of Canadian companies could uncover the risk or existence of forced or child labour in a supply chain to which Pembina has a connection, which could negatively impact Pembina's reputation. In 2026, Pembina will be submitting its third report.<br>

*Internal Controls*

Effective internal controls are necessary for Pembina to provide reliable financial reports, manage its risk exposure and help prevent fraud. Although Pembina undertakes numerous procedures to help ensure the reliability of its financial reports, including those imposed by Canadian and U.S. securities laws, Pembina cannot be certain that such measures will ensure that it will maintain adequate control over financial processes and reporting. If Pembina or its independent auditors discover a material weakness, the disclosure of that fact, even if quickly remedied, could reduce the market's confidence in Pembina and its financial statements and negatively impact the trading price of the Common Shares or Class A Preferred Shares.

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**Risks Related to Climate Change**

*Risks Relating to Changing Investor Sentiment in the Oil and Gas Industry*

A number of factors, including the concerns of the effects of the use of fossil fuels on climate change, concerns of the impact of oil and gas operations on the environment, concerns of environmental damage relating to spills of petroleum products during transportation and concerns of Indigenous rights, have affected certain investors' sentiments towards investing in the oil and gas industry. As a result of these concerns, some investors have announced that they are no longer willing to fund or invest in oil and gas properties or companies and/or are reducing the amount of such investments over time. Additionally, companies across all sectors have been subjected to a heightened level of awareness and scrutiny from institutional, retail and public investors with respect to their ESG practices and, as such, issuers are increasingly being required to develop and implement more robust ESG policies, practices and disclosures. Developing and implementing such policies and practices and preparing such disclosures can involve significant costs and require a significant time commitment from the Board of Directors, management and employees. Failure to implement the policies and practices expected by investors may result in such investors reducing their investment in Pembina or not investing in Pembina at all. Any reduction in the investor base interested or willing to invest in the oil and gas industry and, more specifically, Pembina may result in limits on Pembina's ability to access capital, increases to the cost of capital, a downgrade in Pembina's credit ratings and outlooks, and a decrease in the price and liquidity of Pembina's securities even if Pembina's operating results, underlying asset values or prospects have not changed.

In May 2025, Pembina published its 2024 Sustainability Report which highlights certain of Pembina's ESG policies and practices, including, but not limited to, energy transition and climate, employee well-being and culture, health and safety, responsible asset management and Indigenous and community engagement. However, certain investors of Pembina may not be satisfied with the degree and/or speed at which Pembina is implementing and bolstering its ESG policies and practices. If Pembina is unable to meet such investors' expectations, Pembina's business, as well as its reputation, could be adversely affected. Additionally, Pembina may be subject to increased potential liability in connection with its ESG-related disclosures pursuant to legislation restricting "greenwashing", including the interpretation of any such legislation. See "*Risk Factors – Risks Inherent to Pembina's Business – Regulation and Legislation*".

*Energy Market Transition*

Changing consumer preferences, new technologies, government regulation or other external factors may lead to an acceleration away from fossil-based sources of energy, including energy derived from crude oil and natural gas, to renewable and other alternative sources of energy. This may lead to lower global demand for crude oil and natural gas and related commodities and, in turn, may lead to lower prices for crude oil, natural gas and NGL and related commodities. This could negatively impact the Company's producing customers and lead to less demand for Pembina's services, which could negatively impact the revenue the Company receives from, and the value of, its pipelines, facilities and other infrastructure assets, the useful life of those assets and accelerate the timing of decommissioning.

In addition, Pembina may invest in opportunities related to an energy transition, which may involve investments in businesses, operations or assets relating to renewable or other alternative forms of energy. Such investments may involve certain risks and uncertainties in addition to those identified herein in respect of Pembina's existing businesses, operations and assets, including the obligation to comply with additional regulatory and other legal requirements associated with such businesses, operations or assets and the potential requirement for additional sources of capital to make, develop and/or maintain such investments and Pembina's ability to access such sources of capital. In the event Pembina were to complete such investments, there can be no guarantee that Pembina will realize a return on those investments or businesses, operations or assets that is similar to the returns it receives in respect of its existing business, operations and assets or that would offset any loss in revenue from, or the value of, the Company's existing pipeline, facilities and other infrastructure assets resulting from the impact of the potential energy transition. As a result, any such investment could reduce the level of cash available for dividends and to service obligations under Pembina's debt securities and other debt obligations and may also negatively impact the trading price of Pembina's securities.

*Greenhouse Gas Emissions and Targets* 

Among other sustainability goals, Pembina has committed to reducing GHG emissions intensity of its operations by 30 percent by 2030 (based on a 2019 baseline year). The Company's ability to lower GHG emissions in respect of its 2030 emissions intensity reduction target is subject to numerous risks and uncertainties, and Pembina's actions taken to implement these objectives may also expose the Company to certain additional and/or heightened financial and operational risks. A reduction

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in GHG emissions intensity relies on, among other things, Pembina's ability to implement and improve energy efficiency at all facilities, future development and growth opportunities, development and deployment of new technologies, investment in lower-carbon power and transition to greater use of renewable and lower emission energy sources. In the event that the Company is unable to implement these strategies and technologies as planned without negatively impacting its expected operations or business plans, or in the event that such strategies or technologies do not perform as expected, the Company may be unable to meet its GHG emissions intensity reduction targets or goals on the current timelines, or at all.

Other risks and uncertainties that may impact the Company's ability to lower GHG emissions in respect of its 2030 emissions intensity reduction target include customer contracts and regulatory uncertainty. Emissions reduction projects are not developed in isolation of the long-term contracts underpinning Pembina's commercial structure. Many capital expenditures require approvals or participation from customers, sometimes subject to stringent pay-back requirements. For Pembina, advancing credible emissions reduction projects requires commercial engagement and customer support, adding complexity and risk to its decarbonization planning. In addition, the Company continues to monitor evolving climate change policies and carbon pricing regulations across the jurisdictions in which we operate. Emerging and duplicative regulations, permitting ambiguity, and slow-moving or restrictive incentive programs can negatively impact the pace and scale of decarbonization investment, creating a competitive disadvantage for Canadian projects relative to jurisdictions with established incentive programs. Government action to create efficient regulation and maximize value of clean growth incentives will be critical to the success of the energy transition in Canada and a balanced, responsible, and competitive regulatory regime is required to support investment in decarbonization, particularly for new and emerging clean growth industries. Certainty of carbon policies and incentives impact the return profile and competitiveness of decarbonization projects and can vary significantly. Lack of certainty brings additional complexity to the evaluation of decarbonization opportunities.

In addition, achieving the Company's GHG emissions intensity reductions target and goals could require significant capital expenditures and resources, with the potential that the costs required to achieve such target and goals materially differ from Pembina's original estimates and expectations. In addition, while the intent is to improve efficiency and increase the use of renewable and lower-carbon energy, the shift in resources and focus towards GHG emissions reduction could have a negative impact on Pembina's operating results. The overall final cost of investing in and implementing a GHG emissions intensity reduction strategy and technologies in furtherance of such strategy, and the resultant change in the deployment of the Company's resources and focus, could have a material adverse effect on Pembina's business, financial condition and results of operations.

*Risks Relating to Weather Conditions*

Weather conditions (including those associated with climate change) can affect the demand for and price of natural gas and NGL. As a result, changes in weather patterns may affect Pembina's gas processing business. For example, colder winter temperatures generally increase demand for natural gas and NGL used for heating which tends to result in increased throughput volume on the Alliance Pipeline and at the Company's gas processing facilities and higher prices in the processing and storage businesses. Pembina has capacity to handle any such increased volume of throughput and storage at its facilities to meet changes in seasonal demand; however, at any given time, processing and storage capacity is finite.

Weather conditions (including those associated with climate change) may impact Pembina's ability to complete capital projects, repairs or facility turnarounds on time, potentially resulting in delays and increased costs. Weather may also affect access to Pembina's facilities, and the operations and projects of Pembina's customers or shippers, which may impact the supply and/or demand for Pembina's services. With respect to construction activities, in areas where construction can be conducted in non-winter months, Pembina attempts to schedule its construction timetables so as to minimize potential delays due to cold winter weather.

Changes and/or extreme variability in weather patterns, including with respect to the impact on the geophysical environment, as well as increases in the frequency of extreme weather events, such as floods, cyclones, hurricanes, droughts and forest fires, increases the potential risk for Pembina's assets, including operational disruptions, transportation difficulties, supply chain disruptions, employee safety incidents, and damage to assets, which may result in lower revenues, higher costs or project delays.

See also "*Risk Factors – Risks Inherent in Pembina's Business – Environmental Costs and Liabilities*"; and "*Risk Factors – Risks Inherent in Pembina's Business – Reputation*".

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**INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS**

To the knowledge of the directors and executive officers of Pembina, none of the directors or executive officers of Pembina, and no person or company that is the direct or indirect beneficial owner of, or who exercises control or direction over, more than 10 percent of the Common Shares, and no associate or affiliate of any of the foregoing, has had any material interest, direct or indirect, in any transaction with Pembina since January 1, 2023 that has materially affected Pembina, or in any proposed transaction that would reasonably be expected to materially affect Pembina.

**MATERIAL CONTRACTS**

Other than as set forth herein, no contracts material to Pembina and its subsidiaries were entered into during 2025 or 2026 to date or are currently in effect, other than contracts entered into in the ordinary course of business.

**LEGAL PROCEEDINGS AND REGULATORY ACTIONS**

Other than as set forth herein, there are no outstanding legal proceedings, or regulatory actions, penalties or sanctions imposed by a court or regulatory body material to Pembina to which Pembina or any of its direct or indirect subsidiaries is or was a party or in respect of which any of the properties of Pembina or any of its direct or indirect subsidiaries are or were subject, during Pembina's most recent financial year, nor are there any such proceedings, actions, penalties or sanctions known to be contemplated.

**REGISTRAR AND TRANSFER AGENT**

The registrar and transfer agent for the Common Shares, the Class A Preferred Shares and the Subordinated Notes and the trustee for the Medium Term Notes is Computershare Trust Company of Canada, at its principal offices in Calgary, Alberta and Toronto, Ontario. The co-transfer agent and registrar for the Common Shares in the U.S. is Computershare Investor Services U.S., at its principal offices in Golden, Colorado.

**INTERESTS OF EXPERTS**

KPMG LLP has confirmed with respect to the Company that they are independent within the meaning of the relevant rules and related interpretations prescribed by the relevant professional bodies in Canada and any applicable legislation or regulations. KPMG LLP has also confirmed that they are independent with respect to the Company under all relevant U.S. professional and regulatory standards.

**WELL-KNOWN SEASONED ISSUER**

On January 23, 2026, Pembina filed each of the 2026 Base Shelf Prospectus and the 2026 MTN Prospectus as a "WKSI base shelf prospectus" (as defined in NI 44-102) pursuant to Part 9B of NI 44-102. As at the date hereof, Pembina satisfies the conditions under subsection 9B.2(1) of NI 44-102 and is eligible to file a "WKSI base shelf prospectus".

 **ADDITIONAL INFORMATION**

Additional information relating to Pembina filed with the Canadian securities commissions and the SEC can be found on Pembina's profile on the SEDAR+ website at www.sedarplus.ca, the EDGAR website at www.sec.gov, and on Pembina's website at www.pembina.com. Additional information, including directors' and officers' remuneration and indebtedness, principal holders of Pembina's securities and securities authorized for issuance under equity compensation plans, as applicable, is contained in Pembina's management information circular for its most recent annual meeting of Shareholders that involved the election of directors. Additional financial information relating to Pembina is provided in Pembina's Financial Statements and MD&A, which have also been filed on SEDAR+ and EDGAR.

Any document referred to in this Annual Information Form and described as being filed on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov (including those documents referred to as being incorporated by reference in this Annual Information Form) may be obtained free of charge from us by contacting Pembina's Investor Relations Department by telephone (toll free 1-855-880-7404) or by email (investor-relations@pembina.com).

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**APPENDIX "A" – AUDIT COMMITTEE CHARTER**![accharterimagea07.jpg](accharterimagea07.jpg)

I.&nbsp;&nbsp;&nbsp;&nbsp;ROLE AND OBJECTIVES

The Audit Committee (the "Committee") of the Board of Directors (the "Board") of Pembina Pipeline Corporation ("Pembina" or the "Corporation") has been delegated certain oversight responsibilities relating to the Corporation's financial statements, the external auditors, the internal audit function, compliance with legal and regulatory requirements and management information technology.

The Committee carries out its responsibilities with a view to the purpose of Pembina, and its role is to support Pembina's commitment to providing sustainable industry-leading total returns to investors.

The objectives of the Committee are to maintain oversight of:

(a)&nbsp;&nbsp;&nbsp;&nbsp;the quality and integrity of Pembina's financial statements, the reporting process and effectiveness of internal controls over financial reporting;

(b)&nbsp;&nbsp;&nbsp;&nbsp;the relationship, reports, qualifications, independence and performance of the external auditor;

(c)&nbsp;&nbsp;&nbsp;&nbsp;the internal audit function;

(d)&nbsp;&nbsp;&nbsp;&nbsp;the audit, finance and financial risk identification, assessment and management program;

(e) &nbsp;&nbsp;&nbsp;&nbsp;compliance with legal and regulatory requirements related to financial reporting and financial controls;

(f)&nbsp;&nbsp;&nbsp;&nbsp;management of information technology related to financial reporting and financial controls; and

(g) &nbsp;&nbsp;&nbsp;&nbsp;maintenance of open avenues of communication among management of the Corporation, the external auditors, the internal auditors and the Board.

II.&nbsp;&nbsp;&nbsp;&nbsp;MEMBERSHIP AND ACCESS

The Board will appoint members of the Committee. Each member shall serve until their successor is appointed, or the member resigns, is removed by the Board or ceases to be a director of the Corporation.

The Committee must be composed of not less than three (3) members of the Board, each of whom must be independent pursuant to the Corporation's Director Independence Guidelines and applicable law and financially literate as determined by the Board using its business judgment. In addition, at least one (1) member must be an "audit committee financial expert" within the meaning of that term under the United States Securities Exchange Act of 1934, as amended, and the rules adopted by the United States Securities and Exchange Commission thereunder. The Board will fill any vacancy if the Committee has less than three (3) members and may remove members by resolution.

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The Board will appoint the chair of the Committee (the "Chair") from amongst its members, in consultation with the Governance, Nominating and Corporate Social Responsibility Committee.

The Committee has the authority to select, engage, remunerate and terminate independent financial, legal or other advisors to assist it in carrying out its duties, as deemed necessary. The Corporation will provide appropriate funding, as determined by the Committee, for payment of: (i) compensation to the external auditor for the purpose of preparing or issuing an audit report or performing other audit, review or attestation services for Pembina, (ii) compensation to any advisors employed by the Committee, and (iii) ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.

In discharging its duties under this Charter, the Committee may: investigate any matter brought to its attention and will have access to all books, records, facilities and personnel; conduct meetings or interview any officer or employee, the Corporation's legal counsel, external auditors and consultants; and invite any such persons to attend any part of any meeting of the Committee.

The Committee has neither the duty nor the responsibility to conduct audit, accounting or legal reviews, or to ensure that the Corporation's financial statements are complete, accurate and in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"); rather, management is responsible for the financial reporting process, internal review process, and the preparation of the Corporation's financial statements in accordance with IFRS, and the Corporation's external auditor is responsible for auditing those financial statements.

III.&nbsp;&nbsp;&nbsp;&nbsp;DUTIES AND RESPONSIBILITIES

**A.&nbsp;&nbsp;&nbsp;&nbsp;Pembina's Financial Statements, the Reporting Process and Internal Controls over Financial Reporting** 

The Committee will meet with management, the internal auditor and the external auditor to review and discuss annual and interim financial statements, the related management's discussion and analysis ("MD&A") and earnings press release, and other financial disclosures and determine whether to recommend the approval of such documents to the Board.

(a)In connection with these procedures, the Committee will, as applicable and without limitation, review and discuss with management, internal audit and the external auditor:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.the information to be included in the financial statements and financial disclosures which require approval by the Board including Pembina's annual and interim financial statements, notes thereto, MD&A and earnings press releases paying particular attention to any use of "pro forma", "adjusted" and "non-GAAP" information, and ensuring that adequate procedures are in place for the review of the Corporation's public disclosure of financial information extracted or derived from the financial statements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii.any significant financial reporting issues identified during the reporting period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii.any significant change in accounting policies, or selection or application of accounting principles, and their impact on the results and the disclosure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv.all significant risks and uncertainties identified and significant estimates and judgments made in connection with the preparation of Pembina's financial statements that may have a material impact to the financial statements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v.any significant deficiencies or material weaknesses identified by management, internal auditors or the external auditor, compensating or mitigating controls and final assessment and impact on disclosure;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vi.any major issues as to the adequacy of the internal controls and any special audit steps adopted in light of material control deficiencies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vii.significant adjustments identified by management, internal auditor, or the external auditor and assessment of associated internal control deficiencies, as applicable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;viii.any unresolved issues between management and the external auditor that could materially impact the financial statements and other financial disclosures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ix.any material correspondence with regulators, government agencies, any employee or whistleblower complaints, reports of non-compliance which raise issues regarding the Corporation's financial statements or accounting policies and significant changes in regulations which may have a material impact on the Corporation's financial statements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;x.the effect of regulatory and accounting initiatives, as well as any off-balance sheet structures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;xi.significant matters of concern respecting audits and financial reporting processes, including any illegal acts, that have been identified in the course of the preparation or audit of Pembina's financial statements; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;xii.any analyses prepared by management and/or the external auditor setting forth significant financial reporting issues and judgments made in connection with the preparation of financial statements including analyses of the effects of IFRS on the financial statements.

(b)In connection with the annual audit of Pembina's financial statements, the Committee will review with the external auditor:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.prior to commencement of the annual audit, plans, scope, staffing, engagement terms and proposed fees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii.reports or opinions to be rendered in connection therewith including the external auditor's review or audit findings report including alternative treatments of significant financial information within IFRS that have been discussed with management and associated impacts on disclosure; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii.the adequacy of internal controls, any audit problems or difficulties, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)any restrictions on the scope of the external auditor's activities or on access to requested information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)any significant disagreements with management, and management's response (including discussion among management, the external auditor and, as necessary, internal and external legal counsel);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)any litigation, claim or contingency, including tax assessments and claims, that could have a material impact on the financial position of the Corporation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)the impact on current or potential future disclosures.

(c)In connection with its review of the annual audited financial statements and interim financial statements, the Committee will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.review any significant concerns raised during the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") certifications with respect to the financial statements and Pembina's disclosure controls and internal controls. In particular, the Committee will review with the CEO, CFO, internal auditor and external auditor:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)all significant deficiencies, material weaknesses or significant changes in the design or operation of Pembina's internal control over financial reporting that could adversely affect Pembina's ability to record, process, summarize and report financial information required to be disclosed by the Corporation in the reports that it files or submits under applicable securities laws, within the required time periods; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)any fraud, whether or not material, that involves management of Pembina or other employees who have a significant role in Pembina's internal control over financial reporting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii.review with the CEO, CFO and the internal auditor, Pembina's disclosure controls and procedures and, at least annually, will review management's conclusions about the efficacy of disclosure controls and procedures, including any significant deficiencies, material weaknesses or material non-compliance with disclosure controls and procedures.

(d)The Committee will maintain a Whistleblower Policy, including procedures for the:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.receipt retention and treatment of complaints, including those regarding accounting, internal accounting controls or auditing matters; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii.confidential, anonymous submissions of concerns, including those regarding questionable accounting or auditing matters.

**B.&nbsp;&nbsp;&nbsp;&nbsp;The External Auditor**

The Committee, in its capacity as a committee of the Board, is directly responsible for overseeing the relationships, reports, qualifications, independence and performance of the external auditor and audit services by other registered public accounting firms engaged by the Corporation. The Committee shall have the authority and responsibility to recommend to the Board the appointment and the revocation of the appointment of the external auditors engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services, and to fix their remuneration.

The external auditor will report directly to the Committee. The Committee's appointment of the external auditor is subject to annual approval by the shareholders.

With respect to the external auditor, the Committee is responsible for:

(a)recommending to the Board the appointment, termination, compensation, retention and oversight of the work of the external auditor engaged by the Corporation including the review and approval of the terms of the external auditor's annual engagement letter and the proposed fees;

(b)resolution of disagreements or disputes between management and the external auditor regarding financial reporting for audit, review or attestation services;

(c)pre-approval of all legally permissible non-audit services to be provided by the external auditors considering the potential impact of such services on the independence of external auditors and, subject to any *de minimis* exemption available under applicable laws. Such approval can be given either specifically or pursuant to pre-approval policies and procedures adopted by the Committee including the delegation of this ability to one (1) or more members of the Committee to the extent permitted by applicable law, provided that any pre-approvals granted pursuant to any such delegation may not delegate Committee responsibilities to management of Pembina, and must be reported to the

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full Committee at the first scheduled meeting of the Committee following such pre-approval. Fees paid for audit and audit-related services shall be greater than 50 percent of the total fees paid to the auditor in a fiscal year;

(d)obtaining and reviewing, at least annually, a written report by the external auditor describing the external auditor's internal quality-control procedures, any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five (5) years, respecting one (1) or more independent audits carried out by the firm, and any steps taken to deal with any such issues and all relationships between the external auditors and the Corporation;

(e)the annual review of the external auditor which assesses three (3) key factors of audit quality for the Committee to consider and assess including: independence, objectivity and professional skepticism; quality of the engagement team; and quality of communications and interactions with the external auditor;

(f)a written comprehensive review of the external auditor is to be considered, if required, each year and completed at least every five (5) years which will include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.an assessment of the quality of services and sufficiency of resources provided by the external auditor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii.an assessment of auditor independence, objectivity and professional skepticism;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii.an assessment of the value of the services provided by the external auditor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv.an assessment of the written input from the external auditor summarizing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)background of the firm, size, resources, geographical coverage, relevant industry experience, including reputational challenges, systemic audit quality issues identified by Canadian Public Accountability Board ("CPAB") and Public Company Accounting Oversight Board ("PCAOB") in public reports;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)industry experience of the audit team and plans for training and development of the team;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)how the external auditor demonstrated objectivity and professional skepticism during the audit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)how the firm and audit team have met all criteria for independence including identification of all relationships that the external auditor has with the Corporation and its affiliates and steps taken to address possible institutional threats;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e)involvement of an engagement quality control review ("EQCR") partner and significant concerns raised by the EQCR partner;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f)matters raised to national office or specialists during the review;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g)significant disagreements between management and the external auditor and steps taken to resolve such disagreements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h)satisfaction with communication and cooperation with management and the Committee; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i)findings and firm responses to reviews of the Corporation by CPAB and PCAOB;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v.communication of the results of the comprehensive review of the external auditor to the Board and recommending that the Board take appropriate action, in response to the review, as required. The Committee

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may recommend tendering the external auditor engagement at their discretion. In addition to rotation of the lead, EQCR and other partner as required by law as well as a cooling-off period after they are rotated off, the Committee, together with the Board, will also consider whether it is necessary to periodically rotate the external audit firm itself. It will be at the discretion of the Committee if the incumbent external auditor is invited to participate in the tendering process; and

(g)setting clear hiring policies for Pembina regarding external auditor partners and employees and former partners and employees of the present and former external auditor of the Corporation. Before any external auditor partner, senior manager or manager is offered employment by the Corporation, prior approval from the Committee Chair must be received and a one (1) year grace period must pass from the date any work was completed on a Pembina audit engagement before an external auditor employee can be considered for contract or employment by the Corporation.

**C.&nbsp;&nbsp;&nbsp;&nbsp;The Internal Audit Function**

The Committee, in its capacity as a committee of the Board, will carry out the following responsibilities to confirm the Corporation's internal audit function has sufficient authority to fulfill its duties:

(a)review and approve any proposed appointment, replacement, or dismissal of the head of Pembina's internal audit team, which individual also functions as the Chief Audit Executive as defined by the Institute of Internal Auditors ("IIA") (the "Head of Internal Audit");

(b)review and approve any changes to the internal audit charter;

(c)annually review and approve the annual internal audit plan (the "Plan") and all major changes to the Plan;

(d)receive reports on the performance of the Plan and the operation of Internal Audit;

(e)review the qualifications and competencies of the Head of Internal Audit, with reference to the IIA's Global Internal Audit Standards and annually convey its view of the performance of the Head of Internal Audit to the CFO as input into the compensation approval process;

(f)review with the Head of Internal Audit and senior management, the effectiveness of the internal audit function in conformance with the IIA's Global Internal Audit Standards and the Internal Audit Charter, including the appropriate authority, role, responsibilities, scope, resourcing and services of the internal audit function;

(g)receive assurance annually from the Head of Internal Audit on the independence of the internal audit function; and

(h)on a regular basis, meet separately with the Head of Internal Audit to discuss any matters that the Committee or the Head of Internal Audit believes should be discussed privately.

**D.&nbsp;&nbsp;&nbsp;&nbsp;Other**

The Committee will also:

(a)meet separately with management, the CFO, the internal auditor, the external auditor and, as is appropriate, internal and external legal counsel and independent advisors in respect of issues not elsewhere listed concerning any other audit, finance or financial risk matters;

(b)review the appointment of the CFO and any other key financial executives who are involved in the financial reporting process;

 A-6 FEBRUARY 2026

------

(c)review the Corporation's information technology practices and developments as they relate to financial reporting;

(d)from time to time discuss the staffing levels and competencies of the finance team with the external auditor;

(e)oversee the Corporation's hedging strategy;

(f)at least annually, review a report on the Corporation's annual insurance coverage including the risk retention philosophy and resulting uninsured exposure, if any, including corporate liability protection programs for directors and officers;

(g)review incidents, alleged or otherwise, as reported by whistleblowers, management, the internal auditor, the external auditor, internal or external counsel or otherwise, relating to fraud, conflicts of interest, or illegal acts pertaining to financial statement disclosures, accounting, internal accounting controls or auditing matters and establish procedures for receipt, treatment and retention of records of incident investigations;

(h)assist with Board oversight in respect of issues not elsewhere listed concerning the integrity of Pembina's financial statements, its compliance with legal and regulatory requirements, the independent auditor's qualifications and independence, and the performance of Pembina's internal audit function and independent auditors;

(i)monitor the funding exposure of the pension plans;

(j)receive and review reports from the Canadian and the US Pension Committees and approve or recommend, as appropriate, with respect to risk management of pension assets and liabilities, actuarial valuation as required by statute, the Statement of Investment Policies and Procedures, funding policy and corporate performance for the pension plans, and jointly with the Human Resources and Compensation Committee, report on the status of the pension plans to the Board at least annually; and

(k)have the authority and responsibility to recommend the appointment and the revocation of the appointment of registered public accounting firms (in addition to the external auditors) engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services, and to fix their remuneration.

IV.&nbsp;&nbsp;&nbsp;&nbsp;COMMITTEE MEETINGS

The Committee will meet quarterly, or more frequently at the discretion of the members of the Committee, as circumstances require.

Additionally, the external auditor may call a meeting of the Committee, provided the external auditor abides by the notice requirements set forth below.

Notice of each meeting of the Committee will be given to each member and to the internal and external auditors who are invited to attend each meeting of the Committee. The notice will:

(a)&nbsp;&nbsp;&nbsp;&nbsp;be in writing (which may be communicated by email);

(b)&nbsp;&nbsp;&nbsp;&nbsp;be accompanied by an agenda that states the nature of the business to be transacted at the meeting in reasonable detail;

(c)&nbsp;&nbsp;&nbsp;&nbsp;be given at least 48 hours preceding the time stipulated for the meeting, unless notice is waived by the Committee members; and

 A-7 FEBRUARY 2026

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(d)&nbsp;&nbsp;&nbsp;&nbsp;if documentation is to be considered at the meeting, it should be provided seven (7) days in advance of the meeting if practicable, and in any event with reasonably sufficient time to review documentation. Under some circumstances, due to the confidential nature of matters to be discussed at the meeting, it may not be prudent or appropriate to distribute materials in advance.

A quorum for a meeting of the Committee is a majority of the members present in person or by means of electronic, telephone or other communications facilities that permit all persons participating to hear each other.

If the Chair is not present at a meeting of the Committee, a Chair will be selected from among the members present. The Chair will not have a second or deciding vote in the event of an equality of votes.

In conjunction with each regularly scheduled Committee meeting, and as the Committee deems necessary, at non-regularly scheduled meetings, the Committee will hold an in-camera session, without management, employees or internal or external auditors present, and will meet in separate sessions with each of the CFO, the Head of Internal Audit and the lead partner of the external auditor at least annually.

The Committee may invite others to attend any part of any meeting of the Committee as it deems appropriate. This includes other directors, members of management, any employee, the Corporation's legal counsel, external auditors, advisors and consultants.

Minutes will be kept of all meetings of the Committee. The minutes will include copies of all resolutions passed at each meeting, will be maintained with the Corporation's records and will be available for review by members of the Committee, the Board, the external auditor and as required pursuant to applicable law.

V.&nbsp;&nbsp;&nbsp;&nbsp;ADDITIONAL RESPONSIBILITIES

A.&nbsp;&nbsp;&nbsp;&nbsp;Review of Charter

The Committee shall review and reassess the adequacy of this Charter at least annually or otherwise, as it deems appropriate, and propose recommended changes to the Governance, Nominating and Corporate Social Responsibility Committee for review and recommendation to the Board for approval.

B.&nbsp;&nbsp;&nbsp;&nbsp;Review of Policies

The Committee shall review proposed changes to Board policies relating to the matters set out in this Charter, annually or as it otherwise deems appropriate.

C.&nbsp;&nbsp;&nbsp;&nbsp;Financial Risk Management

The Committee shall provide oversight of financial risk management with respect to the areas outlined in this Charter.

D.&nbsp;&nbsp;&nbsp;&nbsp;Evaluation

The assessment of the Committee shall be facilitated annually by the Board Chair.

E.&nbsp;&nbsp;&nbsp;&nbsp;Disclosure Documents

The Committee will prepare reports, if and when required, for inclusion in the Corporation's disclosure documents.

 A-8 FEBRUARY 2026

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F.&nbsp;&nbsp;&nbsp;&nbsp;Reporting and Board Advisory Role

The Committee shall report regularly to the Board on its activities, including the results of meetings and reviews undertaken, and any associated recommendations. The Committee shall periodically facilitate and promote education of the Board with regard to the matters set out in this Charter, including education sessions with external consultants at the Committee's discretion.

The Committee shall facilitate information sharing with other Board committees as required to address matters of mutual interest or concern in respect of matters set out in this Charter. The Committee will perform such other functions as are assigned by law and the Corporation's by-laws, and on the instructions of the Board.

 A-9 FEBRUARY 2026

## Exhibit 99.2

?xml version='1.0' encoding='ASCII'? pba-20251231_d2

---

| | | |
|:---|:---|:---|
| **REPORT TO SHAREHOLDERS** | ![pembinacolourlogoa19.jpg](pba-20251231_g1.jpg) | ![pembinacolourlogoa19.jpg](pba-20251231_g1.jpg) |
| **Year ended December 31, 2025** | ![pembinacolourlogoa19.jpg](pba-20251231_g1.jpg) | ![pembinacolourlogoa19.jpg](pba-20251231_g1.jpg) |
| **MANAGEMENT'S DISCUSSION AND ANALYSIS** | **MANAGEMENT'S DISCUSSION AND ANALYSIS** |  |
| **Table of Contents** |  |  |
| [1. About Pembina](#ie712fa7e1bb04f279f6526094cc7ef36_7) | [1. About Pembina](#ie712fa7e1bb04f279f6526094cc7ef36_7) | [2](#ie712fa7e1bb04f279f6526094cc7ef36_7) |
| [2. Financial & Operating Overview](#ie712fa7e1bb04f279f6526094cc7ef36_10) | [2. Financial & Operating Overview](#ie712fa7e1bb04f279f6526094cc7ef36_10) | [3](#ie712fa7e1bb04f279f6526094cc7ef36_10) |
| [3. Segment Results](#ie712fa7e1bb04f279f6526094cc7ef36_31) | [3. Segment Results](#ie712fa7e1bb04f279f6526094cc7ef36_31) | [7](#ie712fa7e1bb04f279f6526094cc7ef36_31) |
| [4. Liquidity & Capital Resources](#ie712fa7e1bb04f279f6526094cc7ef36_139) | [4. Liquidity & Capital Resources](#ie712fa7e1bb04f279f6526094cc7ef36_139) | [22](#ie712fa7e1bb04f279f6526094cc7ef36_139) |
| [5. Share Capital](#ie712fa7e1bb04f279f6526094cc7ef36_163) | [5. Share Capital](#ie712fa7e1bb04f279f6526094cc7ef36_163) | [26](#ie712fa7e1bb04f279f6526094cc7ef36_163) |
| [6. Capital](#ie712fa7e1bb04f279f6526094cc7ef36_181)Expenditures | [6. Capital](#ie712fa7e1bb04f279f6526094cc7ef36_181)Expenditures | [27](#ie712fa7e1bb04f279f6526094cc7ef36_181) |
| [7. Selected Quarterly Information](#ie712fa7e1bb04f279f6526094cc7ef36_187) | [7. Selected Quarterly Information](#ie712fa7e1bb04f279f6526094cc7ef36_187) | [28](#ie712fa7e1bb04f279f6526094cc7ef36_187) |
| [8. Selected Equity Accounted Investee Information](#ie712fa7e1bb04f279f6526094cc7ef36_205) | [8. Selected Equity Accounted Investee Information](#ie712fa7e1bb04f279f6526094cc7ef36_205) | [30](#ie712fa7e1bb04f279f6526094cc7ef36_205) |
| [9. Related Party Transactions](#ie712fa7e1bb04f279f6526094cc7ef36_223) | [9. Related Party Transactions](#ie712fa7e1bb04f279f6526094cc7ef36_223) | [31](#ie712fa7e1bb04f279f6526094cc7ef36_223) |
| [10. Accounting Policies & Estimates](#ie712fa7e1bb04f279f6526094cc7ef36_229) | [10. Accounting Policies & Estimates](#ie712fa7e1bb04f279f6526094cc7ef36_229) | [32](#ie712fa7e1bb04f279f6526094cc7ef36_229) |
| [11. Risk Factors](#ie712fa7e1bb04f279f6526094cc7ef36_583) | [11. Risk Factors](#ie712fa7e1bb04f279f6526094cc7ef36_583) | [35](#ie712fa7e1bb04f279f6526094cc7ef36_583) |
| [1](#ie712fa7e1bb04f279f6526094cc7ef36_241)[2](#ie712fa7e1bb04f279f6526094cc7ef36_241)[. Non-GAAP & Other Financial Measures](#ie712fa7e1bb04f279f6526094cc7ef36_241) | [1](#ie712fa7e1bb04f279f6526094cc7ef36_241)[2](#ie712fa7e1bb04f279f6526094cc7ef36_241)[. Non-GAAP & Other Financial Measures](#ie712fa7e1bb04f279f6526094cc7ef36_241) | [64](#ie712fa7e1bb04f279f6526094cc7ef36_241) |
| [1](#ie712fa7e1bb04f279f6526094cc7ef36_274)[3](#ie712fa7e1bb04f279f6526094cc7ef36_274)[. Other](#ie712fa7e1bb04f279f6526094cc7ef36_274) | [1](#ie712fa7e1bb04f279f6526094cc7ef36_274)[3](#ie712fa7e1bb04f279f6526094cc7ef36_274)[. Other](#ie712fa7e1bb04f279f6526094cc7ef36_274) | [69](#ie712fa7e1bb04f279f6526094cc7ef36_274) |
| [1](#ie712fa7e1bb04f279f6526094cc7ef36_298)[4](#ie712fa7e1bb04f279f6526094cc7ef36_298)[. Abbreviations](#ie712fa7e1bb04f279f6526094cc7ef36_298) | [1](#ie712fa7e1bb04f279f6526094cc7ef36_298)[4](#ie712fa7e1bb04f279f6526094cc7ef36_298)[. Abbreviations](#ie712fa7e1bb04f279f6526094cc7ef36_298) | [74](#ie712fa7e1bb04f279f6526094cc7ef36_298) |
| [1](#ie712fa7e1bb04f279f6526094cc7ef36_301)[5](#ie712fa7e1bb04f279f6526094cc7ef36_301)[. Forward-Looking Statements & Information](#ie712fa7e1bb04f279f6526094cc7ef36_301) | [1](#ie712fa7e1bb04f279f6526094cc7ef36_301)[5](#ie712fa7e1bb04f279f6526094cc7ef36_301)[. Forward-Looking Statements & Information](#ie712fa7e1bb04f279f6526094cc7ef36_301) | [76](#ie712fa7e1bb04f279f6526094cc7ef36_301) |

---

**Basis of Presentation**

The following Management's Discussion and Analysis ("MD&A") of the financial and operating results of Pembina Pipeline Corporation ("Pembina" or the "Company") is dated February 26, 2026, and is supplementary to, and should be read in conjunction with, Pembina's audited consolidated financial statements as at and for the year ended December 31, 2025 ("Consolidated Financial Statements"). The Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board, using the accounting policies described in Note 3 of the Consolidated Financial Statements. All dollar amounts contained in this MD&A are expressed in Canadian dollars unless otherwise noted. For further details on Pembina and Pembina's significant assets, including definitions for capitalized terms used herein and not otherwise defined, refer to Pembina's annual information form ("AIF") for the year ended December 31, 2025. Additional information about Pembina filed with Canadian and U.S. securities commissions, including quarterly and annual reports, annual information forms (filed with the U.S. Securities and Exchange Commission under Form 40-F) and management information circulars, can be found online at www.sedarplus.ca, www.sec.gov and through Pembina's website at www.pembina.com. Information contained in or otherwise accessible through Pembina's website does not form part of this MD&A and is not incorporated into this document by reference.

**Abbreviations**

For a list of abbreviations that may be used in this MD&A, refer to the "Abbreviations" section of this MD&A.

**Non-GAAP and Other Financial Measures** 

Pembina has disclosed certain financial measures and ratios within this MD&A that management believes provide meaningful information in assessing Pembina's underlying performance, but which are not specified, defined or determined in accordance with the Canadian generally accepted accounting principles ("GAAP") and which are not disclosed in Pembina's Consolidated Financial Statements. Such non-GAAP financial measures and non-GAAP ratios do not have any standardized meaning prescribed by IFRS and may not be comparable to similar financial measures or ratios disclosed by other issuers. Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A for additional information regarding these non-GAAP financial measures and non-GAAP ratios.

**Risk Factors and Forward-Looking Information**

Management has identified the primary risk factors that could have a material impact on the financial results and operations of Pembina. Such risk factors are presented in the "Risk Factors" section of this MD&A and are also included in Pembina's AIF. The Company's financial and operational performance is potentially affected by a number of factors, including, but not limited to, the factors described within the "Forward-Looking Statements & Information" section of this MD&A. This MD&A contains forward-looking statements based on Pembina's current expectations, estimates, projections and assumptions. This information is provided to assist readers in understanding the Company's future plans and expectations and may not be appropriate for other purposes.

**Pembina Pipeline Corporation 2025 Annual Report** 1

------

**1. ABOUT PEMBINA** 

Pembina Pipeline Corporation is a leading energy transportation and midstream service provider that has served North America's energy industry for more than 70 years. Pembina owns an extensive network of strategically located assets, including hydrocarbon liquids and natural gas pipelines, gas gathering and processing facilities, oil and natural gas liquids infrastructure and logistics services, and an export terminals business. Through our integrated value chain, we seek to provide safe and reliable energy solutions that connect producers and consumers across the world, support a more sustainable future and benefit our customers, investors, employees and communities. For more information, please visit www.pembina.com.

**Pembina's Purpose and Strategy** 

We deliver extraordinary energy solutions so the world can thrive.

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.**To thrive, we will invest in the energy transition to improve the basins in which we operate.** We will prioritize lighter commodities as we continue to invest in new infrastructure and expand our portfolio to include new businesses associated with lower-carbon commodities.

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

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

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.*Customers* choose us first for reliable and value-added services.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.*Investors* receive sustainable industry-leading total returns.

2 **Pembina Pipeline Corporation 2025 Annual Report**

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**2. FINANCIAL & OPERATING OVERVIEW**

**Consolidated Financial Overview for the Three Months Ended December 31**

**Results of Operations**

---

| | | | |
|:---|:---|:---|:---|
| *($ millions, except where noted)* | **2025** | 2024 | Change |
| Revenue | **1913** | 2145 | (232) |
| Net revenue<sup>(1)</sup> | **1139** | 1383 | (244) |
| Operating expenses | **241** | 270 | (29) |
| Gross profit | **827** | 1024 | (197) |
| Adjusted EBITDA<sup>(1)</sup> | **1075** | 1254 | (179) |
| Earnings | **489** | 572 | (83) |
| Earnings per common share – basic and diluted *(dollars)* | **0.78** | 0.92 | (0.14) |
| Cash flow from operating activities | **861** | 902 | (41) |
| Cash flow from operating activities per common share – basic *(dollars)* | **1.48** | 1.55 | (0.07) |
| Adjusted cash flow from operating activities<sup>(1)</sup> | **731** | 922 | (191) |
| Adjusted cash flow from operating activities per common share – basic *(dollars)*<sup>(1)</sup> | **1.26** | 1.59 | (0.33) |
| Capital expenditures | **235** | 242 | (7) |

---

**Change in Earnings** *($ millions)*![34](pba-20251231_g2.jpg)

**Earnings Overview**

Earnings in the fourth quarter of 2025 decreased by $83 million compared to the prior period. The change primarily reflects narrower WCSB and U.S. NGL frac spreads as well as lower revenue from derivative contracts within the Marketing & New Ventures Division. Results also include the impact of a new toll structure and revenue sharing mechanism on the Alliance Pipeline, and period specific capital recoveries that impacted the fourth quarter of 2024 with no similar impact in the same period in 2025. These factors were offset by a gain on a land sale recognized within the Corporate and Marketing & New Ventures Division, as well as volume growth and solid performance across the Pipelines and Facilities Divisions. Further details by division are outlined below:

• **Pipelines:** Decrease largely due to lower revenue on the Canadian portion of the Alliance Pipeline as a result of reduced long-term firm tolls and impacts from the new revenue-sharing mechanism resulting from the negotiated settlement between Alliance and its shippers effective November 2025 ("Alliance Negotiated Settlement"), partially offset by higher seasonal revenue on the Alliance Pipeline. Lower earnings was also due to the recognition of period specific capital recoveries that impacted certain Pipelines assets in the fourth quarter of 2024 with no similar impact in the same period in 2025, lower volumes on the Cochin Pipeline, and higher depreciation and amortization expense. These decreases were offset in part by higher revenue on the Peace Pipeline system and lower operating expenses on the Cochin Pipeline.

• **Facilities:** Consistent with prior period as a higher share of profit from PGI due to an increase in contributions from certain PGI assets was largely offset by minor decreases in revenue across certain other Facilities assets.

**Pembina Pipeline Corporation 2025 Annual Report** 3

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• **Marketing & New Ventures:** Decrease primarily due to lower net revenue as a result of narrower WCSB and U.S. NGL frac spreads in the fourth quarter of 2025 compared to the same period in 2024, lower net revenue from risk management and other derivative contracts primarily due to an unrealized loss on the embedded derivative arising from the Cedar LNG capacity commercial arrangement entered into during the fourth quarter of 2025, combined with lower unrealized gains recognized by Cedar LNG, partially offset by a higher share of profit from Greenlight due to a gain on the sale of land to a third-party potential customer.

• **Corporate and Income Tax:** Higher largely due to a gain on the sale of land to a third-party potential customer of Greenlight in the fourth quarter of 2025, combined with lower net finance costs, income tax expense, as well as acquisition and integration costs, partially offset by higher long-term incentive and restructuring costs.

**Adjusted EBITDA**<sup>(1)</sup> **Overview**

Adjusted EBITDA in the fourth quarter of 2025 decreased by $179 million compared to the prior period. The change primarily reflects a lower contribution from the Marketing & New Ventures Division, the impact of a new toll structure and revenue sharing mechanism on the Alliance Pipeline, and period specific capital recoveries that impacted 2024 with no similar impact in 2025, partially offset by volume growth and solid performance across the Pipelines and Facilities Divisions. Further details by division are outlined below:

• **Pipelines:** Decrease largely due to lower revenue on the Canadian portion of the Alliance Pipeline as a result of the Alliance Negotiated Settlement, partially offset by higher seasonal revenue on the Alliance Pipeline. Lower results were also due to period specific capital recoveries that impacted certain Pipelines assets in the fourth quarter of 2024 with no similar impact in the same period in 2025 and lower volumes on the Cochin Pipeline. These decreases were offset in part by higher revenue on the Peace Pipeline system and lower operating expenses on the Cochin Pipeline.

• **Facilities:** Consistent with prior period. Higher contributions from certain PGI assets due to an increase in volumes and the positive impact of PGI's acquisition of a 50 percent working interest in Whitecap Resources Inc.'s ("Whitecap") Kaybob Complex in the fourth quarter of 2024, were largely offset by lower revenue due to period specific capital recoveries that impacted certain PGI assets in the fourth quarter of 2024 with no similar impact in the same period in 2025 and minor decreases in revenue across certain other Facilities assets.

• **Marketing & New Ventures:** Decrease primarily due to narrower WCSB and U.S. NGL frac spreads in the fourth quarter of 2025 compared to the same period in 2024 and lower realized gains on crude oil-based derivatives due to lower volumes and narrower crude oil price spreads, partially offset by realized gains on NGL-based derivatives in the fourth quarter of 2025 compared to losses in the same period in 2024.

• **Corporate:** Lower primarily due to higher long-term incentive costs, partially offset by lower non-compensation related general and administrative costs.

Further details and additional factors impacting earnings and adjusted EBITDA by divisions are discussed in the "Segment Results" section of this MD&A.

**Cash Flow Measures**

---

| | |
|:---|:---|
| **For the Three Months Ended December 31** | **For the Three Months Ended December 31** |
| **Cash flow from operating activities** | $41 million decrease, primarily driven by lower earnings adjusted for items not involving cash and higher taxes paid, partially offset by the change in non-cash operating working capital primarily driven by movements in trade accounts receivable resulting from commodity price and volume fluctuations, as well as higher distributions received from equity accounted investees. |
| **Adjusted cash flow from operating activities**<sup>(1)</sup> | $191 million decrease, primarily due to the same items impacting cash flow from operating activities, discussed above, excluding the change in non-cash working capital and taxes paid, combined with higher current income tax expense and accrued share-based payment expense. |
| **Adjusted cash flow from operating activities per common share – basic (*dollars*)**<sup>(1)</sup> | $0.33 decrease, primarily due to the factors impacting adjusted cash flow from operating activities, discussed above, while outstanding common shares remained consistent with prior period. |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

4 **Pembina Pipeline Corporation 2025 Annual Report**

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**Consolidated Financial Overview for the Twelve Months Ended December 31**

**Results of Operations** 

---

| | | | |
|:---|:---|:---|:---|
| *($ millions, except where noted)* | **2025** | 2024 | Change |
| Revenue | **7778** | 7384 | 394 |
| Net revenue<sup>(1)</sup> | **4877** | 4776 | 101 |
| Operating expenses | **961** | 976 | (15) |
| Gross profit | **3193** | 3316 | (123) |
| Adjusted EBITDA<sup>(1)</sup> | **4289** | 4408 | (119) |
| Earnings | **1694** | 1874 | (180) |
| Earnings per common share – basic *(dollars)* | **2.67** | 3.00 | (0.33) |
| Earnings per common share – diluted *(dollars)* | **2.66** | 3.00 | (0.34) |
| Cash flow from operating activities | **3301** | 3214 | 87 |
| Cash flow from operating activities per common share – basic *(dollars)* | **5.68** | 5.61 | 0.07 |
| Adjusted cash flow from operating activities<sup>(1)</sup> | **2854** | 3265 | (411) |
| Adjusted cash flow from operating activities per common share – basic *(dollars)*<sup>(1)</sup> | **4.91** | 5.70 | (0.79) |
| Capital expenditures | **784** | 955 | (171) |

---

**Change in Earnings** *($ millions)*![34](pba-20251231_g3.jpg)

**Earnings Overview**

Earnings during 2025 decreased by $180 million compared to the prior year. The change primarily reflects narrower WCSB and U.S. NGL frac spreads, impairment recognized within PGI share of profit, the impact of a new toll structure and revenue sharing mechanism on the Alliance Pipeline, and period specific capital recoveries that impacted 2024 with no similar impact in 2025. These factors were partially offset by gains recognized within each division and higher revenue from derivative contracts within the Marketing & New Ventures Division, as well as volume growth and solid performance across the Pipelines and Facilities Divisions. Further details by division are outlined below:

• **Pipelines:** Increase largely due to the positive impacts from Pembina acquiring a controlling ownership interest in Alliance on April 1, 2024, combined with higher seasonal revenue, partially offset by the impacts of the Alliance Negotiated Settlement. Additionally, earnings were impacted by higher revenue on the Peace Pipeline system due to increased volumes and higher tolls mainly related to contractual inflation adjustments, higher revenue on the Nipisi Pipeline, and the recognition of a gain on the sale of the North segment of the Western Pipeline in the third quarter of 2025. These impacts were partially offset by lower net revenue on the Cochin Pipeline, Vantage Pipeline, and at the Edmonton Terminals, along with a decrease in revenue on certain Pipeline assets due to period specific capital recoveries that impacted 2024 with no similar impact in 2025, as well as higher depreciation and amortization expense.

• **Facilities:** Decrease largely due to lower share of profit from PGI primarily due to an impairment of certain PGI assets and higher depreciation and amortization expense. These results were partially offset by the positive impacts of Pembina acquiring a controlling ownership interest in Aux Sable on April 1, 2024, the recognition of a gain following the amendment of PGI's credit facility, and higher contributions from certain PGI assets.

**Pembina Pipeline Corporation 2025 Annual Report** 5

------

• **Marketing & New Ventures:** Lower primarily due to narrower WCSB and U.S. NGL frac spreads in 2025 compared to 2024 and lower other income, partially offset by the positive impacts from Pembina acquiring a controlling ownership interest in Aux Sable on April 1, 2024, a higher share of profit from Greenlight due to a gain on the sale of land to a third-party potential customer in the fourth quarter of 2025, and higher revenue from risk management and other derivative contracts.

• **Corporate and Income Tax:** Consistent with prior year. A gain on the sale of land to a third-party potential customer of Greenlight in the fourth quarter of 2025 combined with lower acquisition and integration costs compared to those incurred in 2024, were largely offset by higher income tax expense, net finance costs, general and administrative expenses, and restructuring costs, along with no similar net gain on acquisition to that recognized in the second quarter of 2024 following Pembina acquiring a controlling ownership interest in Alliance and Aux Sable on April 1, 2024.

**Adjusted EBITDA**<sup>(1)</sup> **Overview**

Adjusted EBITDA during 2025 decreased by $119 million compared to the prior year. The change primarily reflects lower contribution from the Marketing & New Ventures Division, the impact of a new toll structure and revenue sharing mechanism on the Alliance Pipeline, and period specific capital recoveries that impacted 2024 with no similar impact in 2025. These factors were partially offset by volume growth and solid performance across the Pipelines and Facilities Divisions. Further details by division are outlined below:

• **Pipelines:** Positive impacts from Pembina acquiring a controlling ownership interest in Alliance on April 1, 2024, combined with higher seasonal revenue, partially offset by the impacts of the Alliance Negotiated Settlement. Additionally, earnings were impacted by higher revenue on the Peace Pipeline system due to increased volumes and higher tolls mainly related to contractual inflation adjustments, higher revenue on the Nipisi Pipeline, and the recognition of a gain on the sale of the North segment of the Western Pipeline in the third quarter of 2025. These impacts were partially offset by lower net revenue on the Cochin Pipeline, Vantage Pipeline, and at the Edmonton Terminals, along with a decrease in revenue on certain Pipeline assets due to period specific capital recoveries that impacted 2024 with no similar impact in 2025.

• **Facilities:** Increase largely due to the net positive impacts from Pembina acquiring a controlling ownership interest in Aux Sable on April 1, 2024, combined with higher contributions from certain PGI assets related to an increase in volumes and the net impact of PGI's acquisition of a 50 percent working interest in Whitecap's Kaybob Complex and PGI's acquisition of Whitecap's Gold Creek and Karr oil batteries in the fourth quarter of 2024 (collectively, the "Whitecap Transactions"). These increases were partially offset by lower volumes at certain PGI assets due to outages in 2025 and third-party downstream restrictions.

• **Marketing & New Ventures:** Decrease primarily due to narrower NGL frac spreads in 2025 compared to 2024 and lower realized gains on crude oil-based derivatives due to lower volumes and narrower crude oil price spreads. These decreases were partially offset by the net positive impacts from Pembina acquiring a controlling ownership interest in Aux Sable on April 1, 2024 and lower realized losses on NGL-based derivatives.

• **Corporate:** Consistent with prior year. Higher incentive costs as well as salaries and wages were largely offset by lower other expenses.

Further details and additional factors impacting on earnings and adjusted EBITDA by divisions are discussed in the "Segment Results" section of this MD&A.

**Cash Flow Metrics**

---

| | |
|:---|:---|
| **For the Twelve Months Ended December 31** | **For the Twelve Months Ended December 31** |
| **Cash flow from operating activities** | $87 million increase, primarily driven by the change in non-cash operating working capital largely driven by movements in trade accounts receivable resulting from commodity price and volume fluctuations and lower taxes paid. These increases were partially offset by lower distributions received from equity accounted investees and higher net interest paid, both largely the result of Pembina acquiring a controlling ownership interest in Alliance and Aux Sable on April 1, 2024, as well as the net change in contract liabilities.  |
| **Adjusted cash flow from operating activities**<sup>(1)</sup> | $411 million decrease, primarily driven by the same factors impacting cash flow from operating activities, discussed above. However, when excluding the change in non-cash working capital and taxes paid, the adjusted result reflects a decrease. The decrease was further impacted by higher current income tax expense. |
| **Adjusted cash flow from operating activities per common share – basic (*dollars*)**<sup>(1)</sup> | $0.79 decrease, primarily due to the factors impacting adjusted cash flow from operating activities, discussed above, as well as an increase in outstanding common shares following the conversion of subscription receipts into common shares, concurrent with the closing of Pembina's acquisition of a controlling ownership interest in Alliance and Aux Sable on April 1, 2024. |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

6 **Pembina Pipeline Corporation 2025 Annual Report**

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**3. SEGMENT RESULTS**

**Business Overview**

The Pipelines Division provides customers with pipeline transportation, terminalling, and storage in key market hubs in Canada and the United States for crude oil, condensate, natural gas liquids and natural gas. Through Pembina's wholly-owned and joint venture assets, the Pipelines Division manages pipeline transportation capacity of approximately 3.0 mmboe/d<sup>(1)</sup> and above ground storage capacity of approximately 10 mmbbls<sup>(1)</sup> within its conventional, oil sands and heavy oil, and transmission assets. The conventional assets include strategically located pipelines and terminalling hubs that gather and transport light and medium crude oil, condensate and natural gas liquids from western Alberta and northeast British Columbia to downstream pipelines and processing facilities in the Edmonton, Alberta area. The oil sands and heavy oil assets transport heavy and synthetic crude oil produced within Alberta to the Edmonton, Alberta area and offer associated storage and terminalling services. The transmission assets transport natural gas, ethane and condensate throughout Canada and the United States on long haul pipelines linking various key market hubs. In addition, the Pipelines Division assets provide linkages to Pembina's Facilities Division assets across North America, enabling flexibility and optionality in the Company's customer service offerings. Together, these assets supply products from hydrocarbon producing regions to refineries, fractionators and market hubs in Alberta, British Columbia, and Illinois, as well as other regions throughout North America.

The Facilities Division includes infrastructure that provides Pembina's customers with natural gas, condensate and NGL services. Through its wholly-owned assets and its interest in PGI, Pembina's natural gas gathering and processing facilities are strategically positioned in active, liquids-rich areas of the WCSB and Williston Basin and may be serviced by the Company's other businesses. Pembina provides its customers with sweet and sour gas gathering, compression, condensate stabilization, and both shallow cut and deep cut gas processing services with a total capacity of approximately 6.7 bcf/d<sup>(1)</sup>. Condensate and NGL extracted at virtually all Canadian-based facilities have access to transportation on Pembina's pipelines. In addition, all NGL transported along the Alliance Pipeline are extracted through the Channahon Facility at the terminus. The Facilities Division includes approximately 430 mbpd<sup>(1)</sup> of NGL fractionation capacity, 21 mmbbls<sup>(1)</sup> of cavern storage capacity, various oil batteries, associated pipeline and rail terminalling facilities and a liquefied propane export facility on Canada's West Coast. These facilities are accessible to Pembina's other strategically-located assets and pipeline systems, providing customers with flexibility and optionality to access a comprehensive suite of services to enhance the value of their hydrocarbons. In addition, Pembina owns a bulk marine import/export terminal in Vancouver, British Columbia.

The Marketing & New Ventures Division leverages Pembina's integrated value chain and existing network of pipelines, facilities, and energy infrastructure assets to maximize the value of hydrocarbon liquids and natural gas originating in the basins where the Company operates. Pembina pursues the creation of new markets, and further enhances existing markets, to support both the Company's and its customers' business interests. In particular, Pembina seeks to identify opportunities to connect hydrocarbon production to new demand locations through the development of infrastructure. The division also focuses on developing new business platforms and undertaking initiatives that seek to reduce the GHG emissions of Pembina's and its customers' operations.

Within the Marketing & New Ventures Division, Pembina undertakes value-added commodity marketing activities, including buying and selling products (natural gas, ethane, propane, butane, condensate, crude oil, electricity, and carbon credits), commodity arbitrage, and optimizing storage opportunities. The marketing business enters into contracts for capacity on both Pembina's and third-party infrastructure, handles proprietary and customer volumes and aggregates production for onward sale. Through this infrastructure capacity, including Pembina's Prince Rupert Terminal and 30,000 bdp of export capacity secured at AltaGas' Ridley Island facilities, as well as utilizing the Company's expansive rail fleet and logistics capabilities, Pembina's marketing business adds incremental value to the commodities by accessing high value markets across North America and globally.

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

<sup>(1)</sup> Net capacity.

**Pembina Pipeline Corporation 2025 Annual Report** 7

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**Financial and Operational Overview by Division**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** |
| | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 |
| *($ millions, except where noted)* | **Volumes**<sup>(1)</sup> | **Earnings (loss)** | **Adjusted EBITDA**<sup>(2)</sup> | Volumes<sup>(1)</sup> | Earnings (loss) | Adjusted EBITDA<sup>(2)</sup> |
| Pipelines | **2815** | **470** | **643** | 2790 | 534 | 686 |
| Facilities | **898** | **178** | **366** | 877 | 177 | 373 |
| Marketing & New Ventures | **337** | **115** | **116** | 349 | 245 | 234 |
| Corporate | **—** | **(126)** | **(50)** |  | (212) | (39) |
| Income tax expense | **—** | **(148)** | **—** |  | (172) |  |
| Total |  | **489** | **1075** |  | 572 | 1254 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** |
| | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 |
| *($ millions, except where noted)* | **Volumes**<sup>(1)</sup> | **Earnings (loss)** | **Adjusted EBITDA**<sup>(2)</sup> | Volumes<sup>(1)</sup> | Earnings (loss) | Adjusted EBITDA<sup>(2)</sup> |
| Pipelines | **2786** | **1938** | **2596** | 2711 | 1907 | 2533 |
| Facilities | **871** | **562** | **1396** | 837 | 666 | 1347 |
| Marketing & New Ventures | **339** | **457** | **499** | 327 | 569 | 724 |
| Corporate | **—** | **(750)** | **(202)** |  | (1422) | (196) |
| Income tax (expense) recovery | **—** | **(513)** | **—** |  | 154 |  |
| Total |  | **1694** | **4289** |  | 1874 | 4408 |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Volumes in mboe/d. See the "Abbreviations" section of this MD&A for definition. Volumes for Pipelines and Facilities divisions are revenue volumes, which are physical volumes plus volumes recognized from take-or-pay commitments. Volumes for Marketing & New Ventures are marketed crude oil and NGL volumes.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

**Equity Accounted Investees Overview by Division**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** |
| | **2025** | **2025** | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 | 2024 | 2024 |
| *($ millions, except where noted)* | **Share of profit** | **Adjusted EBITDA**<sup>(5)</sup> | **Contributions** | **Distributions** | **Volumes**<sup>(6)</sup> | Share of profit | Adjusted EBITDA<sup>(5)</sup> | Contributions | Distributions | Volumes<sup>(6)</sup> |
| Pipelines<sup>(1)</sup> | **1** | **1** | **—** | **—** | **—** |  |  |  |  |  |
| Facilities<sup>(2)</sup> | **74** | **200** | **45** | **148** | **386** | 59 | 195 |  | 131 | 358 |
| Marketing &<br>New Ventures<sup>(3)</sup> | **96** | **(1)** | **82** | **—** | **—** | 74 |  |  |  |  |
| Total | **171** | **200** | **127** | **148** | **386** | 133 | 195 |  | 131 | 358 |

---

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** |
| | **2025** | **2025** | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 | 2024 | 2024 |
| *($ millions, except where noted)* | **Share of profit** | **Adjusted EBITDA**<sup>(5)</sup> | **Contributions** | **Distributions** | **Volumes**<sup>(6)</sup> | Share of profit | Adjusted EBITDA<sup>(5)</sup> | Contributions | Distributions | Volumes<sup>(6)</sup> |
| Pipelines<sup>(1)(4)</sup> | **1** | **4** | **—** | **—** | **—** | 42 | 88 | 5 | 80 | 37 |
| Facilities<sup>(2)</sup> | **134** | **744** | **243** | **544** | **364** | 231 | 717 | 124 | 515 | 358 |
| Marketing &<br>New Ventures<sup>(3)(4)</sup> | **74** | **(4)** | **168** | **—** | **—** | 55 | 39 | 242 | 31 | 9 |
| Total | **209** | **744** | **411** | **544** | **364** | 328 | 844 | 371 | 626 | 404 |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Pipelines includes Grand Valley.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Facilities includes PGI and Fort Corp.

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Marketing and New Ventures includes Greenlight in 2025, Cedar LNG and ACG.

<sup>(4)</sup> &nbsp;&nbsp;&nbsp;&nbsp;For the comparative 2024 period, the results of Alliance and Aux Sable are equity-accounted for the first quarter of 2024. Pembina owned a 50 percent interest in Alliance, an approximately 42.7 percent interest in Aux Sable's U.S operations, and a 50 percent interest in Aux Sable's Canadian operations up to the closing of the acquisition on April 1, 2024. Following the closing of the acquisition, the results of Alliance and Aux Sable are fully consolidated and incorporated into Pembina's financial results.

<sup>(5)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

<sup>(6)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Volumes in mboe/d. See the "Abbreviations" section of this MD&A for definition.

Refer to the "Segment Results – Changes in Results" sections of this MD&A under each of the divisions for additional information.

In 2025, contributions in the Facilities Division were made to PGI to partially fund growth capital projects. Contributions in Marketing & New Ventures in 2025 and 2024 were made to Greenlight and Cedar LNG to fund ongoing project development costs. Refer to the "Segment Results – Marketing & New Ventures Division – Projects & New Developments" sections of this MD&A for additional information.

8 **Pembina Pipeline Corporation 2025 Annual Report**

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**Pipelines**

**Financial Overview for the Three Months Ended December 31**

**Results of Operations**

---

| | | | |
|:---|:---|:---|:---|
| *($ millions, except where noted)* | **2025** | 2024 | Change |
| &nbsp;&nbsp;Pipelines revenue<sup>(1)</sup> | **871** | 948 | (77) |
| &nbsp;&nbsp;Cost of goods sold<sup>(1)</sup> | **14** | 5 | 9 |
| Net revenue<sup>(1)(2)</sup> | **857** | 943 | (86) |
| Operating expenses<sup>(1)</sup> | **200** | 231 | (31) |
| Depreciation and amortization included in gross profit | **164** | 147 | 17 |
| Share of profit from equity accounted investees | **1** |  | 1 |
| Gross profit | **494** | 565 | (71) |
| Earnings | **470** | 534 | (64) |
| Adjusted EBITDA<sup>(2)</sup> | **643** | 686 | (43) |
| Volumes<sup>(3)</sup> | **2815** | 2790 | 25 |

---

---

| | |
|:---|:---|
| **Change in Results** | |
| **Net revenue**<sup>(1)(2)</sup> | Decrease largely due to lower revenue as a result of the impacts of the Alliance Negotiated Settlement ($33 million) and the presentation of certain flow-through costs on a net basis, with an offsetting decrease to operating expenses for the Alliance Pipeline ($18 million). These impacts were partially offset by higher demand on seasonal contracts on the Alliance Pipeline ($19 million). Lower net revenue due to period specific capital recoveries that impacted certain Pipelines assets in the fourth quarter of 2024 with no similar impact in the same period in 2025 ($23 million), lower interruptible volumes on the Cochin Pipeline driven by narrower condensate price differentials, the sale of the North segment of the Western Pipeline in the third quarter of 2025, and lower revenue at the Edmonton Terminals largely due to lower fees. These decreases were partially offset by higher volumes on the Peace Pipeline system. |
| **Operating expenses**<sup>(1)</sup> | Decrease largely due to the presentation of certain flow-through costs now netted within revenue in 2025 for the Alliance Pipeline. Lower operating expenses were also due to the sale of the North segment of the Western Pipeline in third quarter of 2025 and lower repairs and maintenance costs on the Cochin Pipeline. |
| **Depreciation and amortization included in gross profit** | Higher primarily due to a change in estimate related to the decommissioning provision of certain assets and a decrease in the estimated useful life of an intangible asset. |
| **Earnings** | Decrease largely due to the impacts of the Alliance Negotiated Settlement, partially offset by higher seasonal revenue on the Alliance Pipeline. Lower earnings were also driven by period specific capital recoveries that impacted certain Pipelines assets in the fourth quarter of 2024 with no similar impact in the same period in 2025, lower interruptible volumes on the Cochin Pipeline, and higher depreciation and amortization expense. These decreases were partially offset by higher volumes on the Peace Pipeline system and lower operating expenses on the Cochin Pipeline. |
| **Adjusted EBITDA**<sup>(2)</sup> | Decrease largely due to the same factors impacting earnings, discussed above, excluding the change in depreciation and amortization expense. |
| **Volumes**<sup>(3)</sup> | Higher largely due to higher interruptible and contracted volumes on the Peace Pipeline system, an increase in volumes on AEGS as the fourth quarter in 2024 was impacted by third-party outages, and an increase in contracted volumes on the Nipisi Pipeline. This is partially offset by narrower condensate price differentials resulting in lower interruptible volumes on the Cochin Pipeline and the sale of the North segment of the Western Pipeline in third quarter of 2025. |

---

**Change in Adjusted EBITDA** *($ millions)*<sup>(1)(2)</sup>![48](pba-20251231_g4.jpg)

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Includes inter-segment transactions. See Note 5 to the Consolidated Financial Statements.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Revenue volumes in mboe/d. See the "Abbreviations" section of this MD&A for definition.

**Pembina Pipeline Corporation 2025 Annual Report** 9

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**Financial Overview for the Twelve Months Ended December 31**

**Results of Operations**

---

| | | | |
|:---|:---|:---|:---|
| *($ millions, except where noted)* | **2025** | 2024 | Change |
| &nbsp;&nbsp;Pipelines revenue<sup>(1)</sup> | **3521** | 3386 | 135 |
| &nbsp;&nbsp;Cost of goods sold<sup>(1)</sup> | **51** | 40 | 11 |
| Net revenue<sup>(1)(2)</sup> | **3470** | 3346 | 124 |
| Operating expenses<sup>(1)</sup> | **804** | 832 | (28) |
| Depreciation and amortization included in gross profit | **641** | 557 | 84 |
| Share of profit from equity accounted investees | **1** | 42 | (41) |
| Gross profit | **2026** | 1999 | 27 |
| Earnings | **1938** | 1907 | 31 |
| Adjusted EBITDA<sup>(2)</sup> | **2596** | 2533 | 63 |
| Volumes<sup>(3)</sup> | **2786** | 2711 | 75 |

---

---

| | |
|:---|:---|
| **Change in Results** | |
| **Net revenue**<sup>(1)(2)</sup> | Increase largely due to higher net revenue on the Alliance Pipeline resulting from Pembina acquiring a controlling ownership interest in Alliance on April 1, 2024, and higher demand on seasonal contracts ($60 million), partially offset by the impacts of the Alliance Negotiated Settlement ($33 million). Also contributing to the increase were higher interruptible and contracted volumes on the Peace Pipeline system, higher contracted volumes on the Nipisi Pipeline, and higher tolls on the Peace Pipeline system mainly related to contractual inflation adjustments. Higher net revenue on the NEBC Pipelines in 2025 due to the NEBC MPS Expansion being placed into service in November 2024, along with favourable U.S. dollar foreign exchange rate impacts on certain assets, contributed to an increase to net revenue. <br>These increases were offset in part by lower net revenue on the Cochin Pipeline largely due to lower tolls as a result of the replacement of long-term contracts that expired in mid-July 2024 and lower volumes due to narrower condensate price differentials. Revenue was also lower due to the presentation of certain flow-through costs on a net basis, with an offsetting decrease to operating expenses for the Alliance Pipeline ($39 million), as well as lower revenue due to period specific capital recoveries that impacted 2024 with no similar impact in 2025 ($23 million). In addition, lower tolls and volumes on the Vantage Pipeline, lower revenue on the Western Pipeline due to the sale of the North segment of the Western Pipeline in the third quarter of 2025, lower revenue at the Edmonton Terminals largely due to lower fees and the decommissioning of the Edmonton South Rail Terminal in the second quarter of 2024, and lower recoverable power and geotechnical costs, contributed to a decrease to net revenue. |
| **Operating expenses**<sup>(1)</sup> | Decrease largely due to the presentation of certain flow-through costs now netted within revenue in 2025 for the Alliance Pipeline and the sale of the North segment of the Western Pipeline in third quarter of 2025. Additionally, there were lower geotechnical spend on certain Pipelines assets and lower power costs resulting from a lower power pool price during 2025, both of which were partially recovered in revenue. The decreases were offset in part by higher costs related to Pembina acquiring a controlling ownership interest in Alliance on April 1, 2024. |
| **Depreciation and amortization included in gross profit** | Higher largely due to Pembina acquiring a controlling ownership interest in Alliance on April 1, 2024, new assets placed into service in the second half of 2024, a change in estimate related to the decommissioning provision of certain assets, and a decrease in the estimated useful life of an intangible asset in 2025.  |
| **Share of profit from equity accounted investees** | Following Pembina acquiring a controlling ownership interest in Alliance on April 1, 2024, the results from Alliance are no longer accounted for in share of profit and are fully consolidated.  |
| **Earnings** | Increase largely due to higher net revenue on the Alliance Pipeline as a result of the net positive impacts of Pembina acquiring a controlling ownership interest in Alliance on April 1, 2024 and higher seasonal revenue, partially offset by the impacts of the Alliance Negotiated Settlement. Additionally, higher net revenue on the Peace Pipeline system, Nipisi Pipeline, and NEBC Pipelines, also contributed to the increase in earnings, as well as the recognition of a gain on the sale of the North segment of the Western Pipeline in the third quarter of 2025 and favourable foreign exchange rate impacts on certain assets. These factors were partially offset by lower tolls and volumes on the Cochin Pipeline and Vantage Pipeline, along with a decrease in revenue on certain Pipeline assets due to period specific capital recoveries that impacted 2024 with no similar impact in 2025. Furthermore, lower revenue at the Edmonton Terminals along with higher depreciation and amortization expense, contributed to the offsetting decrease. |
| **Adjusted EBITDA**<sup>(2)</sup> | Increase largely due to the same factors impacting earnings, discussed above, excluding the gain on the sale of the North segment of the Western Pipeline and the change in depreciation and amortization expense.  |
| **Volumes**<sup>(3)</sup> | Higher largely due to Pembina acquiring a controlling ownership interest in Alliance on April 1, 2024. Additionally, higher contracted volumes on the Peace Pipeline system and the Nipisi Pipeline, and higher interruptible volumes on the Peace Pipeline system in the 2025 period compared to the same period in 2024 which was impacted by planned outages for the commissioning of the Phase VIII Peace Pipeline Expansion, contributed to an increase to volumes. These increases were offset in part by lower volumes on the Cochin Pipeline due to narrower condensate price differentials and lower interruptible volumes on the Vantage Pipeline. |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Includes inter-segment transactions. See Note 5 to the Consolidated Financial Statements.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Revenue volumes in mboe/d. See the "Abbreviations" section of this MD&A for definition.

10 **Pembina Pipeline Corporation 2025 Annual Report**

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**Change in Adjusted EBITDA** *($ millions)*<sup>(1)(2)</sup>![48](pba-20251231_g5.jpg)

**Financial and Operational Overview**

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** |
| | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 |
| *($ millions, except where noted)* | **Volumes**<sup>(3)</sup> | **Earnings** | **Adjusted**<br>**EBITDA**<sup>(2)</sup> | Volumes<sup>(3)</sup> | Earnings | Adjusted<br>EBITDA<sup>(2)</sup> | **Volumes**<sup>(3)</sup> | **Earnings** | **Adjusted** <br>**EBITDA**<sup>(2)</sup> | Volumes<sup>(3)</sup> | Earnings | Adjusted <br>EBITDA<sup>(2)</sup> |
| **Pipelines**<sup>(4)</sup> |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Conventional | **1059** | **317** | **379** | 1034 | 321 | 373 | **1025** | **1223** | **1439** | 1001 | 1149 | 1370 |
| &nbsp;&nbsp;&nbsp;Transmission | **705** | **115** | **193** | 720 | 160 | 224 | **717** | **576** | **891** | 687 | 592 | 865 |
| &nbsp;&nbsp;&nbsp;Oil Sands & <br>Heavy Oil | **1051** | **38** | **71** | 1036 | 53 | 89 | **1044** | **139** | **266** | 1023 | 166 | 298 |
| Total | **2815** | **470** | **643** | 2790 | 534 | 686 | **2786** | **1938** | **2596** | 2711 | 1907 | 2533 |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Includes inter-segment transactions. See Note 5 to the Consolidated Financial Statements.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Revenue volumes in mboe/d. See the "Abbreviations" section of this MD&A for definition.

<sup>(4)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Includes values attributed to Pembina's conventional, transmission and oil sands and heavy oil assets within the Pipelines Division. Refer to Pembina's AIF for the year ended December 31, 2025.

**Projects & New Developments**<sup>(1)</sup>

The following table outlines the projects which have recently come into service within the Pipelines Division:

---

| | |
|:---|:---|
| Significant Projects | In-service Date |
| Phase VIII Peace Pipeline Expansion | May 2024 |
| NEBC MPS Expansion | November 2024 |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;For further details on Pembina's significant assets, including definitions for capitalized terms used herein that are not otherwise defined, refer to Pembina's AIF for the year ended December 31, 2025 filed at www.sedarplus.ca (filed with the U.S. Securities and Exchange Commission at www.sec.gov under Form 40-F) and on Pembina's website at www.pembina.com.

The Pipelines Division continues to grow its transportation assets to service customer demand. The following outlines the projects and new developments within the Pipelines Division:

---

| | | |
|:---|:---|:---|
| **Fox Creek-to-Namao Expansion** | | |
| **Capital Budget:** $200 million | **In-service Date**<sup>(1)</sup>**:** Q1 2027 | **Status:** Recently sanctioned |
| Pembina is developing an expansion of the Peace Pipeline system that, through the addition of three new midpoint pump stations and upgrades to the existing three pump stations, will add approximately 70,000 bpd of propane-plus capacity to the market delivery pipelines from Fox Creek, Alberta to Namao, Alberta, while also increasing operational and logistical flexibility. This expansion will increase the total capacity of the Peace and Northern Pipeline systems to approximately 1.2 mbpd. The project was sanctioned in December 2025. | Pembina is developing an expansion of the Peace Pipeline system that, through the addition of three new midpoint pump stations and upgrades to the existing three pump stations, will add approximately 70,000 bpd of propane-plus capacity to the market delivery pipelines from Fox Creek, Alberta to Namao, Alberta, while also increasing operational and logistical flexibility. This expansion will increase the total capacity of the Peace and Northern Pipeline systems to approximately 1.2 mbpd. The project was sanctioned in December 2025. | Pembina is developing an expansion of the Peace Pipeline system that, through the addition of three new midpoint pump stations and upgrades to the existing three pump stations, will add approximately 70,000 bpd of propane-plus capacity to the market delivery pipelines from Fox Creek, Alberta to Namao, Alberta, while also increasing operational and logistical flexibility. This expansion will increase the total capacity of the Peace and Northern Pipeline systems to approximately 1.2 mbpd. The project was sanctioned in December 2025. |

---

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| | | |
|:---|:---|:---|
| **Birch-to-Taylor Expansion** | | |
| **Capital Budget:** $310 million  | **In-service Date**<sup>(1)</sup>**:** Q4 2027 | **Status:** Recently sanctioned |
| The Birch-to-Taylor Expansion includes a new 95-kilometre pipeline and facility upgrades that will add approximately 120,000 bpd of propane-plus and condensate capacity to that corridor. Plateau Pipe Line Ltd., a subsidiary of Pembina, has obtained all necessary permits to begin preliminary construction activities in 2026.  | The Birch-to-Taylor Expansion includes a new 95-kilometre pipeline and facility upgrades that will add approximately 120,000 bpd of propane-plus and condensate capacity to that corridor. Plateau Pipe Line Ltd., a subsidiary of Pembina, has obtained all necessary permits to begin preliminary construction activities in 2026.  | The Birch-to-Taylor Expansion includes a new 95-kilometre pipeline and facility upgrades that will add approximately 120,000 bpd of propane-plus and condensate capacity to that corridor. Plateau Pipe Line Ltd., a subsidiary of Pembina, has obtained all necessary permits to begin preliminary construction activities in 2026.  |

---

**Pembina Pipeline Corporation 2025 Annual Report** 11

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| | | |
|:---|:---|:---|
| **Taylor-to-Gordondale Expansion** | | |
| **Capital Budget:** $115 million  | **In-service Date**<sup>(1)</sup>**:** Q1 2027 | **Status:** Recently sanctioned |
| The Taylor-to-Gordondale Expansion will further accommodate growing volumes in northeast British Columbia and Alberta. Pembina and Plateau Pipe Line Ltd., a subsidiary of Pembina, are proceeding with the initial scope of this project, which includes new and upgraded pump stations downstream of Taylor, British Columbia and a new 16-kilometre pipeline connecting production in Alberta to the Gordondale pump station. | The Taylor-to-Gordondale Expansion will further accommodate growing volumes in northeast British Columbia and Alberta. Pembina and Plateau Pipe Line Ltd., a subsidiary of Pembina, are proceeding with the initial scope of this project, which includes new and upgraded pump stations downstream of Taylor, British Columbia and a new 16-kilometre pipeline connecting production in Alberta to the Gordondale pump station. | The Taylor-to-Gordondale Expansion will further accommodate growing volumes in northeast British Columbia and Alberta. Pembina and Plateau Pipe Line Ltd., a subsidiary of Pembina, are proceeding with the initial scope of this project, which includes new and upgraded pump stations downstream of Taylor, British Columbia and a new 16-kilometre pipeline connecting production in Alberta to the Gordondale pump station. |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Subject to environmental and regulatory approvals. See the "Forward-Looking Statements & Information" section of this MD&A.

Pembina is proceeding with a phased approach to the Taylor-to-Gordondale Expansion, which is being optimized to meet customers' near-term transportation needs while maintaining Pembina's track record of disciplined capital investment. Pembina continues to evaluate additional scope under the Taylor-to-Gordondale Expansion, including an approximately 89 kilometer, 16-inch pipeline being proposed by Pouce Coupé Pipe Line Ltd., a subsidiary of Pembina, to connect mostly condensate volumes from Taylor, British Columbia to the Gordondale, Alberta area. On February 10, 2026, the CER issued a Certificate of Public Convenience and Necessity for the CER regulated Taylor-to-Gordondale Pipeline Project. This was the final federal regulatory approval required for the pipeline. Pembina will continue to evaluate the incremental scope in conjunction with the timing of customers' egress requirements.

12 **Pembina Pipeline Corporation 2025 Annual Report**

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**Facilities**

**Financial Overview for the Three Months Ended December 31** 

**Results of Operations**

---

| | | | |
|:---|:---|:---|:---|
| *($ millions, except where noted)* | **2025** | 2024 | Change |
| Facilities revenue<sup>(1)</sup> | **326** | 320 | 6 |
| Operating expenses<sup>(1)</sup> | **153** | 138 | 15 |
| Depreciation and amortization included in gross profit | **57** | 55 | 2 |
| Share of profit from equity accounted investees | **74** | 59 | 15 |
| Gross profit | **190** | 186 | 4 |
| Earnings | **178** | 177 | 1 |
| Adjusted EBITDA<sup>(2)</sup> | **366** | 373 | (7) |
| Volumes<sup>(3)</sup> | **898** | 877 | 21 |

---

---

| | |
|:---|:---|
| **Changes in Results** | |
| **Revenue**<sup>(1)</sup> | Consistent with prior period. Higher operating recoveries at the fractionation facilities within the Redwater Complex, largely offset by minor decreases in revenue across certain other Facilities assets. |
| **Operating expenses**<sup>(1)</sup> | Increase primarily due to higher operating expenses related to repairs and maintenance costs at the Redwater Complex in the fourth quarter of 2025 compared to the same period in 2024, the majority of which were recovered in revenue. |
| **Share of profit from equity accounted investees** | Higher earnings from PGI due to an increase in volumes on certain PGI assets and the net impact of PGI's acquisition of a 50 percent working interest in Whitecap's Kaybob Complex in the fourth quarter of 2024. Additionally, there was lower other expense as the fourth quarter of 2024 was impacted by costs related to asset disposals, partially offset by lower revenue due to period specific capital recoveries that impacted certain PGI assets in the fourth quarter of 2024 with no similar impact in the same period in 2025. |
| **Earnings** | Consistent with prior period. A higher share of profit from PGI, discussed above, was largely offset by minor decreases in revenue across certain other Facilities assets. |
| **Adjusted EBITDA**<sup>(2)</sup> | Consistent with prior period. Higher contributions from certain PGI assets related to an increase in volumes and the net positive impact of the acquisition of Whitecap's Kaybob Complex in the fourth quarter of 2024, were largely offset by minor decreases in revenue across certain other Facilities assets, and lower revenue due to period specific capital recoveries that impacted certain PGI assets in the fourth quarter of 2024 with no similar impact in the same period in 2025. Included in adjusted EBITDA is $198 million (2024: $193 million) related to PGI. |
| **Volumes**<sup>(3)</sup> | Increase is primarily due to higher volumes as a result of the acquisition of Whitecap's Kaybob Complex in the fourth quarter of 2024, higher volumes at the Dawson Assets due to higher natural gas prices, and higher volumes at the Duvernay Complex. This is partially offset by a decrease in Aux Sable volumes due to lower ethane margins. Volumes include 386 mboe/d (2024: 358 mboe/d) related to PGI. |

---

**Change in Adjusted EBITDA** *($ millions)*<sup>(1)(2)</sup>![48](pba-20251231_g6.jpg)

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Includes inter-segment transactions. See Note 5 to the Consolidated Financial Statements.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Revenue volumes in mboe/d. See the "Abbreviations" section of this MD&A for definition.

**Pembina Pipeline Corporation 2025 Annual Report** 13

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**Financial Overview for the Twelve Months Ended December 31**

**Results of Operations**

---

| | | | |
|:---|:---|:---|:---|
| *($ millions, except where noted)* | **2025** | 2024 | Change |
| Facilities revenue<sup>(1)</sup> | **1228** | 1127 | 101 |
| Operating expenses<sup>(1)</sup> | **553** | 474 | 79 |
| Depreciation and amortization included in gross profit | **209** | 183 | 26 |
| Share of profit from equity accounted investees | **134** | 231 | (97) |
| Gross profit | **600** | 701 | (101) |
| Earnings | **562** | 666 | (104) |
| Adjusted EBITDA<sup>(2)</sup> | **1396** | 1347 | 49 |
| Volumes<sup>(3)</sup> | **871** | 837 | 34 |

---

---

| | |
|:---|:---|
| **Changes in Results** | |
| **Revenue**<sup>(1)</sup> | Increase largely due to Pembina acquiring a controlling ownership interest in Aux Sable on April 1, 2024, combined with higher operating recoveries at the fractionation facilities within the Redwater Complex, partially offset by the impact of a planned outage at the Redwater Complex related to an asset upgrade in the second quarter of 2025. |
| **Operating expenses**<sup>(1)</sup> | Increase largely due to Pembina acquiring a controlling ownership interest in Aux Sable on April 1, 2024, combined with higher repairs and maintenance costs at the Redwater Complex, the majority of which were recovered in revenue, along with minor increases across multiple other operating costs. |
| **Depreciation and amortization included in gross profit** | Higher largely due to Pembina acquiring a controlling ownership interest in Aux Sable on April 1, 2024, combined with an asset upgrade and associated retirement at the Redwater Complex in the second quarter of 2025, resulting in a planned outage during the same period. |
| **Share of profit from equity accounted investees** | Decrease due to lower earnings from PGI largely the result of impairment of $146 million (net to Pembina, after tax) recognized on certain PGI assets. Additionally, lower revenue driven by outages at certain PGI assets in 2025 and third-party downstream restrictions impacting the Dawson Assets, contributed to a decrease in share of profit from PGI. This was partially offset by the recognition of a $23 million gain (net to Pembina, after tax) following the amendment of PGI's credit facility, gains recognized by PGI on interest rate derivative financial instruments in 2025 compared to losses in 2024, and lower other expense as 2024 was impacted by costs related to asset disposals. Additionally, higher contributions due to the Whitecap Transactions and higher volumes at the Duvernay Complex, contributed to the offsetting increase to share of profit from PGI. |
| **Earnings** | Decrease primarily due to lower share of profit from PGI and higher depreciation and amortization expense. This was partially offset by the net positive impacts of Pembina acquiring a controlling ownership interest in Aux Sable on April 1, 2024. |
| **Adjusted EBITDA**<sup>(2)</sup> | Increase primarily due to the net positive impacts of Pembina acquiring a controlling ownership interest in Aux Sable on April 1, 2024, combined with higher contributions from PGI largely the result of the Whitecap Transactions and higher volumes at the Duvernay Complex. This was partially offset by outages at certain PGI assets in 2025 and third-party downstream restrictions impacting the Dawson Assets. Included in adjusted EBITDA is $735 million (2024: $709 million) related to PGI. |
| **Volumes**<sup>(3)</sup> | Higher largely due to Pembina acquiring a controlling ownership interest in Aux Sable on April 1, 2024, partially offset by a decrease in volumes due to lower ethane margins and lower utilization in 2025 compared to 2024 due to third-party restrictions and planned outages at the Channahon Facility in the second quarter of 2025. Additionally, higher volumes at the Redwater Complex and Younger were due to a planned outage and a rail strike impacting the Redwater Complex that occurred in the third quarter of 2024, which resulted in volume curtailments. Higher volumes on certain PGI assets due to the Whitecap Transactions and higher volumes at the Duvernay Complex, were largely offset by volume curtailments at certain PGI assets resulting from a turnaround that began in the second quarter of 2025 and continued into the third quarter, combined with third-party downstream restrictions impacting the Dawson Assets. Volumes include 364 mboe/d (2024: 358 mboe/d) related to PGI.  |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Includes inter-segment transactions. See Note 5 to the Consolidated Financial Statements.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Revenue volumes in mboe/d. See the "Abbreviations" section of this MD&A for definition.

14 **Pembina Pipeline Corporation 2025 Annual Report**

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**Change in Adjusted EBITDA** *($ millions)*<sup>(1)(2)</sup>![48](pba-20251231_g7.jpg)

**Financial and Operational Overview**

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** |
| | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 |
| *($ millions, except where noted)* | **Volumes**<sup>(3)</sup> | **Earnings** | **Adjusted** <br>**EBITDA**<sup>(2)</sup> | Volumes<sup>(3)</sup> | Earnings | Adjusted<br>EBITDA<sup>(2)</sup> | **Volumes**<sup>(3)</sup> | **Earnings** | **Adjusted** <br>**EBITDA**<sup>(2)</sup> | Volumes<sup>(3)</sup> | Earnings | Adjusted <br>EBITDA<sup>(2)</sup> |
| **Facilities**<sup>(4)</sup> |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Gas Services | **631** | **91** | **226** | 597 | 77 | 222 | **610** | **209** | **849** | 598 | 299 | 817 |
| &nbsp;&nbsp;&nbsp;NGL Services | **267** | **87** | **140** | 280 | 100 | 151 | **261** | **353** | **547** | 239 | 367 | 530 |
| Total | **898** | **178** | **366** | 877 | 177 | 373 | **871** | **562** | **1396** | 837 | 666 | 1347 |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Includes inter-segment transactions. See Note 5 to the Consolidated Financial Statements.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Revenue volumes in mboe/d. See the "Abbreviations" section of this MD&A for definition.

<sup>(4)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Includes values attributed to Pembina's gas services and NGL services assets within the Facilities operating segment. For a description of Pembina's gas and NGL assets, refer to Pembina's AIF for the year ended December 31, 2025.

**Projects & New Developments**<sup>(1)</sup>

The Facilities Division continues to grow its natural gas and NGL processing and fractionation assets to service customer demand. The following outlines the projects and new developments within the Facilities Division:

---

| | | |
|:---|:---|:---|
| **RFS IV** | | |
| **Capital Budget:** $525 million<br>**Revised Capital Cost:** $500 million |<br>**In-service Date**<sup>(2)</sup>**:** Q2 2026 |<br>**Status:** On time, trending under budget |
| RFS IV is a 55,000 bpd propane-plus fractionator at the existing Redwater fractionation and storage complex (the "Redwater Complex"). The project includes additional rail loading capacity and will leverage the design, engineering, and operating best practices of the existing facilities at the Redwater Complex. With the addition of RFS IV, the fractionation capacity at the Redwater Complex will total 256,000 bpd. Pembina has entered into a lump-sum engineering, procurement and construction agreement in respect of the project, for more than 70 percent of the project cost. Engineering, procurement, and fabrication is substantially complete, while field construction has progressed to approximately 90 percent complete.  | RFS IV is a 55,000 bpd propane-plus fractionator at the existing Redwater fractionation and storage complex (the "Redwater Complex"). The project includes additional rail loading capacity and will leverage the design, engineering, and operating best practices of the existing facilities at the Redwater Complex. With the addition of RFS IV, the fractionation capacity at the Redwater Complex will total 256,000 bpd. Pembina has entered into a lump-sum engineering, procurement and construction agreement in respect of the project, for more than 70 percent of the project cost. Engineering, procurement, and fabrication is substantially complete, while field construction has progressed to approximately 90 percent complete.  | RFS IV is a 55,000 bpd propane-plus fractionator at the existing Redwater fractionation and storage complex (the "Redwater Complex"). The project includes additional rail loading capacity and will leverage the design, engineering, and operating best practices of the existing facilities at the Redwater Complex. With the addition of RFS IV, the fractionation capacity at the Redwater Complex will total 256,000 bpd. Pembina has entered into a lump-sum engineering, procurement and construction agreement in respect of the project, for more than 70 percent of the project cost. Engineering, procurement, and fabrication is substantially complete, while field construction has progressed to approximately 90 percent complete.  |

---

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| | | |
|:---|:---|:---|
| **Wapiti Expansion** | | |
| **Capital Budget:** $140 million (net to Pembina) | **In-service Date**<sup>(2)</sup>**:** End of Q1 2026 | **Status:** On time, trending on budget |
| PGI is developing an expansion that will increase natural gas processing capacity at the Wapiti Plant by 115 MMcf/d (gross to PGI). The expansion opportunity is driven by strong customer demand supported by growing Montney production and is fully underpinned by long-term, take-or-pay contracts. The project includes a new sales gas pipeline and other related infrastructure. Commissioning is underway and the expansion is expected to be in-service at the end of the first quarter. | PGI is developing an expansion that will increase natural gas processing capacity at the Wapiti Plant by 115 MMcf/d (gross to PGI). The expansion opportunity is driven by strong customer demand supported by growing Montney production and is fully underpinned by long-term, take-or-pay contracts. The project includes a new sales gas pipeline and other related infrastructure. Commissioning is underway and the expansion is expected to be in-service at the end of the first quarter. | PGI is developing an expansion that will increase natural gas processing capacity at the Wapiti Plant by 115 MMcf/d (gross to PGI). The expansion opportunity is driven by strong customer demand supported by growing Montney production and is fully underpinned by long-term, take-or-pay contracts. The project includes a new sales gas pipeline and other related infrastructure. Commissioning is underway and the expansion is expected to be in-service at the end of the first quarter. |

---

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| | | |
|:---|:---|:---|
| **K3 Cogeneration Facility** | | |
| **Capital Budget:** $70 million (net to Pembina) | **In-service Date**<sup>(2)</sup>**:** End of Q1 2026 | **Status:** On time, trending under budget |
| PGI is developing a 28 MW cogeneration facility at its K3 Plant, which is expected to reduce overall operating costs by providing power and heat to the gas processing facility, while reducing customers' exposure to power prices. The K3 Cogeneration Facility is expected to fully supply the K3 Plant's power requirements, with excess power sold to the grid at market rates. Further, through the utilization of the cogeneration waste heat and the low-emission power generated, the project is expected to contribute to a reduction in annual emissions compliance costs at the K3 Plant. Commissioning is underway and the project is expected to be in-service at the end of the first quarter. | PGI is developing a 28 MW cogeneration facility at its K3 Plant, which is expected to reduce overall operating costs by providing power and heat to the gas processing facility, while reducing customers' exposure to power prices. The K3 Cogeneration Facility is expected to fully supply the K3 Plant's power requirements, with excess power sold to the grid at market rates. Further, through the utilization of the cogeneration waste heat and the low-emission power generated, the project is expected to contribute to a reduction in annual emissions compliance costs at the K3 Plant. Commissioning is underway and the project is expected to be in-service at the end of the first quarter. | PGI is developing a 28 MW cogeneration facility at its K3 Plant, which is expected to reduce overall operating costs by providing power and heat to the gas processing facility, while reducing customers' exposure to power prices. The K3 Cogeneration Facility is expected to fully supply the K3 Plant's power requirements, with excess power sold to the grid at market rates. Further, through the utilization of the cogeneration waste heat and the low-emission power generated, the project is expected to contribute to a reduction in annual emissions compliance costs at the K3 Plant. Commissioning is underway and the project is expected to be in-service at the end of the first quarter. |

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**Pembina Pipeline Corporation 2025 Annual Report** 15

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| | | |
|:---|:---|:---|
| **Prince Rupert Terminal Optimization** | | |
| **Capital Budget:** $145 million | **In-service Date**<sup>(2)</sup>**:** Mid-2028 | **Status:** Recently sanctioned |
| Pembina is optimizing its Prince Rupert Terminal ("PRT"), primarily through increasing storage capacity, that will allow PRT to accommodate medium gas carrier vessels. The PRT optimization is expected to expand access to additional markets with higher realized propane prices, while significantly reducing shipping costs per unit, thereby improving netbacks for Pembina and its customers. Earthworks at site are nearing completion, and engineering activities and procurement of long-lead equipment has commenced. | Pembina is optimizing its Prince Rupert Terminal ("PRT"), primarily through increasing storage capacity, that will allow PRT to accommodate medium gas carrier vessels. The PRT optimization is expected to expand access to additional markets with higher realized propane prices, while significantly reducing shipping costs per unit, thereby improving netbacks for Pembina and its customers. Earthworks at site are nearing completion, and engineering activities and procurement of long-lead equipment has commenced. | Pembina is optimizing its Prince Rupert Terminal ("PRT"), primarily through increasing storage capacity, that will allow PRT to accommodate medium gas carrier vessels. The PRT optimization is expected to expand access to additional markets with higher realized propane prices, while significantly reducing shipping costs per unit, thereby improving netbacks for Pembina and its customers. Earthworks at site are nearing completion, and engineering activities and procurement of long-lead equipment has commenced. |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;For further details on Pembina's significant assets, including definitions for capitalized terms used herein that are not otherwise defined, refer to Pembina's AIF for the year ended December 31, 2025 filed at www.sedarplus.ca (filed with the U.S. Securities and Exchange Commission at www.sec.gov under Form 40-F) and on Pembina's website at www.pembina.com.

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

Pursuant to an agreement with Whitecap, PGI has committed to support infrastructure development in the Lator area, including a new battery and gathering laterals (the "Lator Infrastructure"), which PGI will own. PGI anticipates funding up to $400 million ($240 million net to Pembina) for the battery and gathering laterals within the first phase of the Lator Infrastructure development, with all gas volumes flowing to PGI's Musreau facility upon startup, which is expected in the fourth quarter of 2026, supporting long-term plant utilization. Site grading and piling installation for the battery was completed in the fourth quarter of 2025, and Pembina's pipeline execution scope is approximately 60 percent complete.

Pursuant to an agreement with Whitecap, PGI has committed to fund capital up to $300 million ($180 million net to Pembina) for battery and gathering infrastructure in the Gold Creek and Karr areas, which is expected to be in service in the second quarter of 2026. The gathering pipeline infrastructure has been completed and battery construction is approximately 50 percent complete.

Pursuant to an agreement with a Montney producer, PGI has committed to fund and acquire an under-construction battery and additional infrastructure (the "North Gold Creek Battery") in the Wapiti/North Gold Creek Montney area for a capital commitment up to $150 million ($90 million net to Pembina). The North Gold Creek Battery will be operated by the producer and highly contracted under a long-term, take-or-pay agreement. Pipeline installations are complete and all equipment has been installed at the North Gold Creek Battery, with electrical and instrumentation work progressing. The expected in-service date of the North Gold Creek Battery is the second quarter of 2026.

16 **Pembina Pipeline Corporation 2025 Annual Report**

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**Marketing & New Ventures**

**Financial Overview for the Three Months Ended December 31**

**Results of Operations**

---

| | | | |
|:---|:---|:---|:---|
| *($ millions, except where noted)* | **2025** | 2024 | Change |
| &nbsp;&nbsp;&nbsp;Marketing & New Ventures revenue<sup>(1)</sup> | **985** | 1133 | (148) |
| &nbsp;&nbsp;&nbsp;Cost of goods sold<sup>(1)</sup> | **927** | 919 | 8 |
| Net revenue<sup>(1)(2)</sup> | **58** | 214 | (156) |
| Operating expenses<sup>(1)</sup> | **6** | 12 | (6) |
| Depreciation and amortization included in gross profit | **18** | 17 | 1 |
| Share of profit from equity accounted investees | **96** | 74 | 22 |
| Gross profit | **130** | 259 | (129) |
| Earnings | **115** | 245 | (130) |
| Adjusted EBITDA<sup>(2)</sup> | **116** | 234 | (118) |
| Crude oil sales volumes<sup>(3)</sup> | **77** | 96 | (19) |
| NGL sales volumes<sup>(3)</sup> | **260** | 252 | 8 |

---

---

| | |
|:---|:---|
| **Change in Results** | |
| **Net revenue**<sup>(1)(2)</sup> | Lower NGL net revenue from contracts with customers was driven primarily by lower NGL margins due to narrower WCSB and U.S. NGL frac spreads in the fourth quarter of 2025 compared to the same period in 2024. Crude net revenue from contracts with customers remained consistent for the fourth quarter of 2025 compared to the fourth quarter of 2024.<br>Lower revenue from risk management and other derivative contracts was primarily due to an unrealized loss on the embedded derivative arising from the Cedar LNG capacity commercial arrangement entered into during the fourth quarter of 2025 (refer to the "Other - Risk Management - Financial Instruments" section of this MD&A), lower realized gains on crude oil-based derivatives due to lower volumes and narrower crude oil price spreads, and unrealized losses on renewable power purchase agreements in the fourth quarter of 2025 compared to gains in the fourth quarter of 2024. These decreases were partially offset by gains on NGL-based derivatives in the fourth quarter of 2025 compared to losses in the same period of 2024. The fourth quarter of 2025 included unrealized losses on derivative instruments of $78 million (2024: $41 million loss) and realized gains on derivative instruments of $35 million (2024: $52 million gain). |
| **Share of profit from equity accounted investees** | Increase largely due to a gain of $62 million (net to Pembina, pre-tax) recognized by Greenlight on the sale of land to a third-party potential customer in the fourth quarter of 2025, partially offset by lower share of profit from Cedar LNG due to lower unrealized gains on interest rate derivative financial instruments, offset in part by unrealized foreign exchange gains on U.S. dollar denominated debt recognized by Cedar LNG in the fourth quarter of 2025 compared to losses in the fourth quarter of 2024. |
| **Earnings** | Decrease primarily due to narrower WCSB and U.S. NGL frac spreads in the fourth quarter of 2025 compared to the same period in 2024, and lower net revenue from risk management and other derivative contracts, discussed above. These decreases were partially offset by higher share of profit from Greenlight due to a gain on sale of land to a third-party potential customer, offset in part by lower share of profit from Cedar LNG. |
| **Adjusted EBITDA**<sup>(2)</sup> | Decrease largely due to narrower WCSB and U.S. NGL frac spreads in the fourth quarter of 2025 compared to the same period in 2024, as well as lower realized gains on crude oil-based derivatives due to lower volumes and narrower crude oil price spreads, partially offset by realized gains on NGL-based derivatives in the fourth quarter of 2025 compared to losses in the fourth quarter of 2024. |
| **Crude oil sales volumes**<sup>(3)</sup> | Lower primarily due to decreased blending opportunities. |

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**Change in Adjusted EBITDA** *($ millions)*<sup>(1)(2)</sup>![48](pba-20251231_g8.jpg)

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Includes inter-segment transactions. See Note 5 to the Consolidated Financial Statements.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Marketed crude oil and NGL volumes in mboe/d. See the "Abbreviations" section of this MD&A for definition.

**Pembina Pipeline Corporation 2025 Annual Report** 17

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**Financial Overview for the Twelve Months Ended December 31**

**Results of Operations**

---

| | | | |
|:---|:---|:---|:---|
| *($ millions, except where noted)* | **2025** | 2024 | Change |
| &nbsp;&nbsp;&nbsp;Marketing & New Ventures revenue<sup>(1)</sup> | **4065** | 3796 | 269 |
| &nbsp;&nbsp;&nbsp;Cost of goods sold<sup>(1)</sup> | **3524** | 3198 | 326 |
| Net revenue<sup>(1)(2)</sup> | **541** | 598 | (57) |
| Operating expenses<sup>(1)</sup> | **30** | 25 | 5 |
| Depreciation and amortization included in gross profit | **71** | 64 | 7 |
| Share of profit from equity accounted investees | **74** | 55 | 19 |
| Gross profit | **514** | 564 | (50) |
| Earnings | **457** | 569 | (112) |
| Adjusted EBITDA<sup>(2)</sup> | **499** | 724 | (225) |
| Crude oil sales volumes<sup>(3)</sup> | **93** | 99 | (6) |
| NGL sales volumes<sup>(3)</sup> | **246** | 228 | 18 |

---

---

| | |
|:---|:---|
| **Change in Results** | |
| **Net revenue**<sup>(1)(2)</sup> | Lower net revenue from contracts with customers was largely driven by lower NGL margins due to narrower WCSB and U.S. NGL frac spreads in 2025 compared to 2024. This was partially offset by Pembina acquiring a controlling ownership interest in Aux Sable on April 1, 2024 and no similar impact to the nine-day unplanned outage at Aux Sable in July 2024.<br>Higher revenue from risk management and other derivative contracts was primarily due to lower unrealized losses on renewable power purchase agreements, largely due to improved forward power prices, and unrealized gains on NGL-based derivatives in 2025, compared to losses in 2024. In addition, lower realized losses on NGL-based derivatives, contributed to an increase in net revenue. These increases were partially offset by lower realized gains on crude oil-based derivatives due to lower volumes and narrower crude oil price spreads and an unrealized loss on the embedded derivative arising from the Cedar LNG capacity commercial arrangement entered into during the fourth quarter of 2025 (refer to the "Other - Risk Management - Financial Instruments" section of this MD&A). The 2025 year included unrealized losses on derivative instruments of $37 million (2024: $170 million loss) and realized gains on derivative instruments of $133 million (2024: $241 million gain). |
| **Share of profit from equity accounted investees** | Increase largely due to a gain of $62 million (net to Pembina, pre-tax) recognized by Greenlight on the sale of land to a third-party potential customer in the fourth quarter of 2025, combined with unrealized foreign exchange gains on U.S. dollar denominated debt recognized by Cedar LNG in 2025 compared to losses in 2024. These increases were partially offset by unrealized losses on interest rate derivative financial instruments recognized by Cedar LNG in 2025 compared to gains in 2024, as well as the results from Aux Sable from the first quarter of 2024, which are fully consolidated following Pembina acquiring a controlling ownership interest on April 1, 2024. |
| **Earnings** | Decrease primarily due to narrower WCSB and U.S. NGL frac spreads in 2025 compared to 2024, as well as no similar gain to that recognized in the 2024 period associated with the derecognition of the provision related to financial assurances provided by Pembina which were assumed by Cedar LNG following the positive final investment decision in June 2024 in respect of the Cedar LNG project, a floating LNG export facility currently under construction (the "Cedar LNG Project"). This was partially offset by the net positive impacts of Pembina acquiring a controlling ownership interest in Aux Sable on April 1, 2024, higher share of profit from Greenlight, and higher revenue from risk management and other derivative contracts. |
| **Adjusted EBITDA**<sup>(2)</sup> | Decrease primarily due to narrower WCSB and U.S. NGL frac spreads in 2025 compared to 2024 and lower realized gains on crude oil-based derivatives due to lower volumes and narrower crude oil price spreads, partially offset by the net positive impacts of Pembina acquiring a controlling ownership interest in Aux Sable on April 1, 2024, and lower realized losses on NGL-based derivatives. |
| **NGL sales volumes**<sup>(3)</sup> | Increase due to higher WCSB ethane volumes, combined with higher ethane, propane, and butane volumes at Aux Sable largely due to the increase in Pembina's ownership interest in Aux Sable and no similar impact to the nine-day unplanned outage in July 2024. |

---

<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Includes inter-segment transactions. See Note 5 to the Consolidated Financial Statements.

<sup>(2)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

<sup>(3)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Marketed crude oil and NGL volumes in mboe/d. See the "Abbreviations" section of this MD&A for definition.

18 **Pembina Pipeline Corporation 2025 Annual Report**

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**Change in Adjusted EBITDA** *($ millions)*<sup>(1)(2)</sup>![48](pba-20251231_g9.jpg)

**Financial and Operational Overview**

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** | **3 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** |
| | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 |
| *($ millions, except where noted)* | **Volumes**<sup>(3)</sup> | **Earnings** | **Adjusted** <br>**EBITDA**<sup>(2)</sup> | Volumes<sup>(3)</sup> | Earnings | Adjusted <br>EBITDA<sup>(2)</sup> | **Volumes**<sup>(3)</sup> | **Earnings** | **Adjusted** <br>**EBITDA**<sup>(2)</sup> | Volumes<sup>(3)</sup> | Earnings | Adjusted <br>EBITDA<sup>(2)</sup> |
| **Marketing & New Ventures**<sup>(4)</sup> |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Marketing | **337** | **86** | **122** | 349 | 174 | 237 | **339** | **467** | **521** | 327 | 510 | 731 |
| &nbsp;&nbsp;&nbsp;New Ventures<sup>(5)</sup> | **—** | **29** | **(6)** |  | 71 | (3) | **—** | **(10)** | **(22)** |  | 59 | (7) |
| Total | **337** | **115** | **116** | 349 | 245 | 234 | **339** | **457** | **499** | 327 | 569 | 724 |

---

<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Includes inter-segment transactions. See Note 5 to the Consolidated Financial Statements.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Marketed crude oil and NGL volumes in mboe/d. See the "Abbreviations" section of this MD&A for definition.

<sup>(4)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Includes values attributed to Pembina's marketing activities and new ventures projects within the Marketing & New Ventures operating segment. For further details on Pembina's marketing activities and projects, refer to Pembina's AIF for the year ended December 31, 2025.

<sup>(5)</sup> &nbsp;&nbsp;&nbsp;&nbsp;All New Ventures projects have not yet commenced operations and therefore have no volumes.

**Projects & New Developments**<sup>(1)</sup> 

The New Ventures group is responsible for the development of new large-scale, or value chain extending projects, including those that provide enhanced access to global markets and support a transition to a lower-carbon economy.

---

| | | |
|:---|:---|:---|
| **Cedar LNG** | | |
| **Capital Budget:** U.S. $2 billion (net)  | **In-service Date:** Late-2028 | **Status:** On time, on budget |

| Cedar LNG has secured a 20-year take-or-pay, fixed toll contract with ARC Resources Ltd. for 1.5 mtpa of LNG. Pembina previously signed a 20-year take-or-pay liquefaction tolling service agreement for 1.5 mtpa of LNG to support the final investment decision on Cedar LNG in June 2024 with the expectation of remarketing the capacity at a later stage. During the fourth quarter of 2025, Pembina announced a 20-year take-or-pay agreement with PETRONAS related to 1.0 mtpa of liquefaction capacity, and a 12-year take-or-pay agreement with Ovintiv related to 0.5 mtpa of liquefaction capacity at Cedar LNG, which completes Pembina's remarketing efforts. | Cedar LNG has secured a 20-year take-or-pay, fixed toll contract with ARC Resources Ltd. for 1.5 mtpa of LNG. Pembina previously signed a 20-year take-or-pay liquefaction tolling service agreement for 1.5 mtpa of LNG to support the final investment decision on Cedar LNG in June 2024 with the expectation of remarketing the capacity at a later stage. During the fourth quarter of 2025, Pembina announced a 20-year take-or-pay agreement with PETRONAS related to 1.0 mtpa of liquefaction capacity, and a 12-year take-or-pay agreement with Ovintiv related to 0.5 mtpa of liquefaction capacity at Cedar LNG, which completes Pembina's remarketing efforts. | Cedar LNG has secured a 20-year take-or-pay, fixed toll contract with ARC Resources Ltd. for 1.5 mtpa of LNG. Pembina previously signed a 20-year take-or-pay liquefaction tolling service agreement for 1.5 mtpa of LNG to support the final investment decision on Cedar LNG in June 2024 with the expectation of remarketing the capacity at a later stage. During the fourth quarter of 2025, Pembina announced a 20-year take-or-pay agreement with PETRONAS related to 1.0 mtpa of liquefaction capacity, and a 12-year take-or-pay agreement with Ovintiv related to 0.5 mtpa of liquefaction capacity at Cedar LNG, which completes Pembina's remarketing efforts. |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;For further details on Pembina's significant assets, including definitions for capitalized terms used herein that are not otherwise defined, refer to Pembina's AIF for the year ended December 31, 2025 filed at www.sedarplus.ca (filed with the U.S. Securities and Exchange Commission at www.sec.gov under Form 40-F) and on Pembina's website at www.pembina.com.

Pembina, and its partner Kineticor, an OPTrust portfolio company, continue to make significant progress towards the commercialization of the Greenlight Electricity Centre. The project is a proposed multi-phased natural gas-fired combined cycle power generation facility, to be located in Sturgeon County, Alberta, with a capacity of up to approximately 1,800 megawatts, designed to advance Alberta's innovation economy. In 2025, the partners secured a 907 MW power grid allocation, which was subsequently assigned to a potential customer, entered into an approximately $190 million (net to Pembina) purchase and sale agreement with the potential customer for land, and signed an agreement which provides certainty of availability and delivery timing for two turbines. Pembina and Kineticor continue to progress various workstreams including finalizing a commercial agreement, engineering, procurement and regulatory, and expect to make a final investment decision in the first half of 2026.

**Pembina Pipeline Corporation 2025 Annual Report** 19

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**Corporate and Income Tax** 

**Financial Overview for the Three Months Ended December 31**

**Results of Operations**

---

| | | | |
|:---|:---|:---|:---|
| *($ millions)* | **2025** | 2024 | Change |
| Revenue<sup>(1)(2)</sup> | **11** | 11 |  |
| General and administrative | **79** | 67 | 12 |
| Other expense | **21** | 8 | 13 |
| Gain on disposal of assets | **(96)** |  | (96) |
| Net finance costs | **135** | 151 | (16) |
| Earnings (loss) | **(126)** | (212) | 86 |
| Adjusted EBITDA<sup>(3)</sup> | **(50)** | (39) | (11) |
| Income tax expense | **148** | 172 | (24) |

---

---

| | |
|:---|:---|
| **Change in Results** | |
| **General and administrative** | Increase largely due to higher long-term incentive costs, partially offset by lower non-compensation related general and administrative costs. |
| **Other expense** | Increase largely due to restructuring costs incurred in the fourth quarter of 2025, partially offset by lower acquisition fees and integration costs compared to those incurred in the fourth quarter of 2024 following Pembina acquiring a controlling ownership interest in Alliance and Aux Sable on April 1, 2024. |
| **Gain on disposal of assets** | Increased due to a pre-tax gain of $96 million related to the sale of land to a third-party potential customer of Greenlight in the fourth quarter of 2025. |
| **Net finance costs** | Decrease primarily due to gains on foreign exchange in the fourth quarter of 2025 compared to losses in the fourth quarter of 2024, combined with higher interest income and lower interest expense on long-term debt, driven by reduced costs on medium-term notes, partially offset by higher interest expense associated with new debt issued in the fourth quarter of 2025. |
| **Earnings (loss)** | Increase largely due to a gain recognized on the sale of land to a third-party potential customer of Greenlight, lower net finance costs, and lower acquisition fees and integration costs, partially offset by higher long-term incentive costs and restructuring costs. |
| **Adjusted EBITDA**<sup>(3)</sup> | Decrease largely due to higher long-term incentive costs, partially offset by lower non-compensation related general and administrative costs. |
| **Income tax expense** | Decrease largely due to lower taxable earnings in the current period. |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Excludes inter-segment eliminations.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Primarily consists of fixed fee income related to shared service agreements with PGI.

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

20 **Pembina Pipeline Corporation 2025 Annual Report**

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**Financial Overview for the Twelve Months Ended December 31**

**Results of Operations**

---

| | | | |
|:---|:---|:---|:---|
| *($ millions)* | **2025** | 2024 | Change |
| Revenue<sup>(1)(2)</sup> | **46** | 45 | 1 |
| General and administrative | **325** | 305 | 20 |
| Other expense | **20** | 35 | (15) |
| Gain on disposal of assets | **(96)** |  | (96) |
| Loss on acquisition | **—** | 616 | (616) |
| Net finance costs | **554** | 518 | 36 |
| Earnings (loss) | **(750)** | (1422) | 672 |
| Adjusted EBITDA<sup>(3)</sup> | **(202)** | (196) | (6) |
| Income tax expense (recovery) | **513** | (154) | 667 |

---

---

| | |
|:---|:---|
| **Change in Results** | |
| **General and administrative** | Increase largely due to higher long-term and short-term incentives costs and higher salaries and wages, partially offset by lower non-compensation related general and administrative costs. |
| **Other expense** | Decrease largely due to lower acquisition fees and integration costs compared to those incurred in 2024 following Pembina acquiring a controlling ownership interest in Alliance and Aux Sable on April 1, 2024, partially offset by restructuring costs incurred in the fourth quarter of 2025. |
| **Gain on disposal of assets** | Increase primarily due to a pre-tax gain of $96 million related to the sale of land to a third-party potential customer of Greenlight in the fourth quarter of 2025. |
| **Loss on acquisition** | In the second quarter of 2024, Pembina recognized a $616 million loss from the disposition of Pembina's previous investments in the Alliance, Aux Sable, and NRGreen joint ventures following Pembina's acquisition of a controlling interest in the joint ventures, offset by a $626 million deferred tax recovery recognized from the acquisition, resulting in a net gain of $10 million. |
| **Net finance costs** | Increase primarily due to lower interest income, along with higher interest expense on long-term debt, resulting from a combination of additional borrowings in 2025 following Pembina acquiring a controlling ownership interest in Alliance and Aux Sable on April 1, 2024, and higher interest rates. This is partially offset by gains on foreign exchange in 2025 compared to losses in 2024. |
| **Earnings (loss)** | Increase largely due to no similar loss recognized in 2025, compared to the loss recognized in the second quarter of 2024 following Pembina acquiring a controlling ownership interest in Alliance and Aux Sable on April 1, 2024, combined with a gain recognized on the sale of land to a third-party potential customer of Greenlight as well as lower acquisition fees and integration costs, discussed above. This was partially offset by higher net finance costs, long-term and short-term incentive costs, and restructuring costs.  |
| **Adjusted EBITDA**<sup>(3)</sup> | Consistent with prior year. Higher general and administrative expenses were largely offset by lower other expenses not deducted in the calculation of adjusted EBITDA.  |
| **Income tax expense (recovery)** | Income tax expense in 2025 resulted primarily from the absence of items similar to those recognized in 2024. Those items included a deferred tax recovery in connection with Pembina's acquisition of a controlling ownership interest in Alliance and Aux Sable, as well as an adjustment in the tax basis of an investment in a partnership. Additionally, higher taxable earnings contributed to the tax expense in 2025. As a result, the effective tax rate for 2025 was 23 percent compared to an effective tax recovery rate of 9 percent in 2024. |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Excludes inter-segment eliminations.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Primarily consists of fixed fee income related to shared service agreements with PGI.

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

**Pembina Pipeline Corporation 2025 Annual Report** 21

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**4. LIQUIDITY & CAPITAL RESOURCES**

**Available Sources of Liquidity**

---

| | | |
|:---|:---|:---|
| **As at December 31**<br>*($ millions)* | **2025** | 2024 |
| Working capital<sup>(1)</sup> | **(806)** | (1335) |
| Variable rate debt |  |  |
| &nbsp;&nbsp;&nbsp;Senior unsecured credit facilities<sup>(2)</sup> | **1305** | 1148 |
| &nbsp;&nbsp;&nbsp;Interest rate swapped debt | **—** | (360) |
| Total variable rate loans and borrowings outstanding (weighted average interest rate of 4.0% <br>(2024: 5.2%)) | **1305** | 788 |
| Fixed rate debt |  |  |
| &nbsp;&nbsp;&nbsp;Senior unsecured medium-term notes | **10350** | 10900 |
| &nbsp;&nbsp;&nbsp;Interest rate swapped debt | **—** | 360 |
| Total fixed rate loans and borrowings outstanding (weighted average interest rate of 4.5% (2024: 4.4%)) | **10350** | 11260 |
| Total loans and borrowings outstanding | **11655** | 12048 |
| Cash and unutilized debt facilities | **2294** | 2518 |
| Subordinated hybrid notes (weighted average interest rate of 5.3% (2024: 4.8%)) | **1025** | 600 |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Current assets of $1.3 billion (December 31, 2024: $1.6 billion) less current liabilities of $2.1 billion (December 31, 2024: $2.9 billion). As at December 31, 2025, working capital included $600 million (December 31, 2024: $1.5 billion) associated with the current portion of long-term debt and $106 million (December 31, 2024: $141 million) in cash.

<sup>(2)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Includes U.S. $250 million variable rate debt outstanding at December 31, 2025 (December 31, 2024: U.S. $250 million).

Pembina currently anticipates that its cash flow from operating activities, the majority of which is derived from fee-based contracts, will be more than sufficient to meet its operating obligations, to fund its dividends and to fund its capital expenditures in the short term and long term. Pembina expects to source funds required for debt maturities from cash, its credit facilities, and by accessing the capital markets, as required. Based on its successful access to financing in the capital markets over the past several years, Pembina expects to continue to have access to additional funds as required. Refer to "Risk Factors – General Risk Factors – Additional Financing and Capital Resources" in this MD&A and Note 23 to the Consolidated Financial Statements for more information. Management continues to monitor Pembina's liquidity and remains satisfied that the leverage employed in Pembina's capital structure is sufficient and appropriate given the characteristics and operations of the underlying asset base.

Management may adjust Pembina's capital structure as a result of changes in economic conditions or the risk characteristics of the underlying assets. To maintain or modify Pembina's capital structure in the future, Pembina may renegotiate debt terms, repay existing debt, seek new borrowings, issue additional equity or hybrid securities and/or repurchase or redeem additional common or preferred shares.

As at December 31, 2025, Pembina's credit facilities (collectively, the "Credit Facilities") consisted of: an unsecured $2.5 billion (December 31, 2024: $1.5 billion) revolving credit facility, which includes a $750 million (December 31, 2024: $750 million) accordion feature, which provides Pembina with the ability to increase the credit facility subject to lender approval, and matures in June 2030 (the "Revolving Facility"); an unsecured U.S. $250 million (December 31, 2024: U.S. $250 million) non-revolving term loan, which matures in April 2030; an unsecured $600 million (December 31, 2024: nil) non-revolving term loan ("Two-Year Term Loan") established in the fourth quarter of 2025, which matures in October 2027; and an operating facility of $50 million (December 31, 2024: $50 million), which matures in June 2026 and is typically renewed on an annual basis. During the fourth quarter of 2025, Pembina fully repaid the Canadian and U.S. term loans originally assumed from Alliance (December 31, 2024: $270 million and U.S. $240 million, respectively), prior to their contractual maturity dates in December 2025. The increase in the Revolving Facility reflects the cancellation of the $1.0 billion (December 31, 2024: $1.0 billion) sustainability-linked revolving credit facility in September 2025, which previously matured in June 2027, and its addition to the Revolving Facility.

22 **Pembina Pipeline Corporation 2025 Annual Report** 

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There are no mandatory principal repayments due over the term of the Credit Facilities. Pembina is required to meet certain specific and customary affirmative and negative financial covenants under the indenture governing its medium-term notes and the agreements governing its Credit Facilities, including a requirement to maintain certain financial ratios. See "Liquidity & Capital Resources – Covenants" below for more information.

Pembina is also subject to customary restrictions on its operations and activities under the indenture governing its medium-term notes and the agreements governing its Credit Facilities, including restrictions on the granting of security, incurring indebtedness and the sale of its assets.

**Financing Activity**

On April 2, 2025, Pembina completed an extension on its unsecured U.S. $250 million non-revolving term loan, which now matures in April 2030.

On June 6, 2025, Pembina closed a $200 million offering of Fixed-to-Fixed Rate Subordinated Notes, Series 2 (the "Series 2 Subordinated Notes") due June 6, 2055. The Series 2 Subordinated Notes bear interest at a rate of 5.95 percent, which will reset on June 6, 2035, and on every fifth anniversary thereafter, based on the five-year Government of Canada yield plus 2.713 percent, provided that the interest rate during any subsequent fixed rate period will not be less than 5.95 percent. Pembina's Series 2 Subordinated Notes are subject to optional redemption by Pembina from March 6, 2035 to June 6, 2035, and thereafter, on any interest payment date or any interest reset date, as applicable. Pembina may also redeem the Series 2 Subordinated Notes in certain other limited circumstances. Pembina used the net proceeds of the offering of the Series 2 Subordinated Notes to fund the redemption of its outstanding Cumulative Redeemable Rate Reset Class A Preferred Shares, Series 19 ("Series 19 Class A Preferred Shares") on June 30, 2025.

On July 23, 2025, Pembina announced the approval of amendments (the "Amendments") to the indenture governing Pembina's 4.80 percent Fixed-to-Fixed Rate Subordinated Notes, Series 1 (the "Series 1 Subordinated Notes") due January 25, 2081. The Amendments provided for, among other things, the exchange (the "Note Exchange") of all of the outstanding Series 1 Subordinated Notes for an equal principal amount of 4.80 percent Fixed-to-Fixed Rate Subordinated Notes, Series 3 of Pembina (the "Series 3 Subordinated Notes") due January 25, 2081. The Series 3 Subordinated Notes have the same economic terms as the Series 1 Subordinated Notes, including interest rate, interest payment dates, interest reset dates, maturity date and redemption provisions, but do not provide for an entitlement to delivery of preferred shares upon the occurrence of certain bankruptcy and related events. The Note Exchange was completed on July 25, 2025, following the execution of the supplemental indenture implementing the Amendments. The Series 3 Subordinated Notes rank equally in right of payment with the Series 2 Subordinated Notes. Pursuant to the mandatory redemption provisions attached to the Class A Preferred Shares, Series 2021-A (the "Series 2021-A Class A Preferred Shares"), in connection with the Note Exchange, on July 28, 2025, Pembina redeemed all of the issued and outstanding Series 2021-A Class A Preferred Shares (refer to the "Share Capital - Preferred Shares" section of this MD&A for further information).

On September 9, 2025, Pembina completed an extension on its $2.5 billion Revolving Facility, which now matures on June 1, 2030.

On October 10, 2025, Pembina closed a $225 million offering of Series 2 Subordinated Notes pursuant to a re-opening. Following closing of the offering of the Series 2 Subordinated Notes, $425 million aggregate principal amount of Series 2 Subordinated Notes are issued and outstanding. Pembina used the net proceeds of the offering to fund the redemption of its outstanding Cumulative Redeemable Rate Reset Class A Preferred Shares, Series 9 (the "Series 9 Class A Preferred Shares") on December 1, 2025 and for general corporate purposes.

**Pembina Pipeline Corporation 2025 Annual Report** 23

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On October 31, 2025, Pembina closed a $600 million Two-Year Term Loan with certain existing lenders. The proceeds of the Two-Year Term Loan have been used to repay the $270 million term loan outstanding at Alliance, and existing amounts drawn under Pembina's $2.5 billion revolving credit facility. The Two-Year Term Loan has an initial term of two years and is pre-payable at the option of Pembina. The other terms and conditions of the Two-Year Term Loan, including financial covenants, are substantially similar to Pembina's $2.5 billion revolving credit facility.

**Covenants**

Pembina is subject to certain financial covenants under the indentures governing its medium-term notes and the agreements governing the Credit Facilities. As at December 31, 2025, Pembina was in compliance with those covenants (December 31, 2024: in compliance).

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| | | | |
|:---|:---|:---|:---|
| **Debt** | **Financial Covenant**<sup>(1)</sup> | **Ratio** | **Ratio as at December 31, 2025** |
| Senior unsecured medium-term notes | Funded Debt to Capitalization | Maximum 0.70<sup>(2)</sup> | 0.40 |
| Credit facilities | Debt to Capital | Maximum 0.70<sup>(3)</sup> | 0.40 |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Terms as defined in relevant agreements.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Covenant must be met at the reporting date and filed within 90 days after the end of each fiscal year and within 10 business days after filing of the Consolidated Financial Statements.

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Covenant must be met at the reporting date and filed within 120 days after the end of each fiscal year and 60 days after each quarter.

**Credit Risk**

Pembina continues to actively monitor and reassess the creditworthiness of its counterparties. The majority of Pembina's credit exposure is to investment grade counterparties. Pembina assesses all high exposure counterparties during the on-boarding process and actively monitors credit limits and exposure across the business. Pembina may reduce or mitigate its exposure to certain counterparties where it is deemed warranted and permitted under contractual terms. Where warranted, financial assurances may be sought from counterparties to mitigate and reduce risk, and such assurances may include guarantees, letters of credit and cash collateral. Letters of credit totaling $249 million (December 31, 2024: $276 million) were held by Pembina as at December 31, 2025, primarily in respect of customer trade receivables.

**Credit Ratings**

The following information with respect to Pembina's credit ratings is provided as such information relates to Pembina's financing costs and liquidity. Specifically, credit ratings affect Pembina's ability to obtain short-term and long-term financing and the cost of such financing. A reduction in the current ratings of Pembina's debt by its rating agencies, particularly a downgrade below investment-grade ratings, could adversely affect Pembina's cost of financing and its access to sources of liquidity and capital. In addition, changes in credit ratings and the associated costs may affect Pembina's ability to enter into normal course derivative or hedging transactions. Credit ratings are intended to provide investors with an independent measure of the credit quality of any issues of securities. The credit ratings assigned by the rating agencies are not recommendations to purchase, hold or sell the securities, nor do the credit rating agencies comment on the market price or suitability for a particular investor. Any credit rating may not remain in effect for a given period of time or may be revised or withdrawn entirely by a rating agency in the future if, in its judgment, circumstances so warrant.

DBRS Limited ("DBRS") rates Pembina's senior unsecured medium-term notes 'BBB (high)'. DBRS has also assigned a debt rating of 'BBB (low)' to Pembina's Fixed-To-Fixed Rate Subordinated Notes and a rating of 'Pfd-3 (high)' for each issued series of Pembina's Class A Preferred Shares.

The long-term corporate credit rating assigned by S&P Global Ratings ("S&P") on Pembina is 'BBB'. S&P has also assigned a debt rating of 'BBB' to Pembina's senior unsecured medium-term notes, a debt rating of 'BB+' to Pembina's Fixed-to-Fixed Rate Subordinated Notes, and a rating of 'P-3 (High)' to each issued series of Pembina's Class A Preferred Shares.

Refer to "Description of the Capital Structure of Pembina – Credit Ratings" in the AIF for the year ended December 31, 2025 for further information.

24 **Pembina Pipeline Corporation 2025 Annual Report** 

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**Commitments and Off-Balance Sheet Arrangements**

**Commitments**

Pembina had the following contractual obligations outstanding as at December 31, 2025:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Contractual Obligations**<sup>(1)</sup> | **Payments Due By Period** | **Payments Due By Period** | **Payments Due By Period** | **Payments Due By Period** | **Payments Due By Period** |
| *($ millions)* | Total | Less than 1 year | 1 – 3 years | 3 – 5 years | After 5 years |
| Long-term debt<sup>(2)</sup>  | 19571 | 1254 | 2790 | 2791 | 12736 |
| Transportation and processing<sup>(3)</sup> | 11312 | 74 | 216 | 1185 | 9837 |
| Leases<sup>(4)</sup> | 815 | 113 | 203 | 144 | 355 |
| Construction commitments<sup>(5)</sup> | 392 | 361 | 29 | 2 |  |
| Other commitments related to lease contracts<sup>(6)</sup> | 591 | 44 | 105 | 158 | 284 |
| Funding commitments, software, and other | 65 | 46 | 18 | 1 |  |
| Total contractual obligations | 32746 | 1892 | 3361 | 4281 | 23212 |

---

<sup>(1)</sup> Pembina enters into product purchase agreements and power purchase agreements to secure supply for future operations. Purchase prices of both NGL and power are dependent on current market prices. Volumes and prices for NGL and power contracts cannot be reasonably determined, and therefore, an amount has not been included in the contractual obligations schedule. Product purchase agreements range from one to 15 years and involve the purchase of NGL products from producers. Assuming product is available, Pembina has secured between 26 and 175 mbpd of NGL each year up to and including 2040. Power purchase agreements range from one to 24 years and involve the purchase of power from electrical service providers. Pembina has secured up to 74 megawatts per day each year up to and including 2049.

<sup>(2)</sup> Includes loans and borrowings, subordinated hybrid notes and interest payments on Pembina's senior unsecured medium-term notes and subordinated hybrid notes. Excludes deferred financing costs.

<sup>(3)</sup> In 2024, Pembina signed two agreements relating to the Cedar LNG Project: (a) Liquefaction Tolling Services Agreement ("LTSA"); and, (b) Gas Supply Agreement ("GSA"). The LTSA is a 20-year take-or-pay fixed toll contract for 1.5 million mpta, while the GSA will allow for transport on the Coastal GasLink Pipeline of approximately 200 million MMcf/d of Canadian natural gas to Cedar LNG. These agreements represent a total commitment of approximately $10.6 billion, which will commence on in-service date of the Cedar LNG Project in late 2028. In 2025, Pembina contracted the rights to this respective liquefaction and transportation capacity to two third-party customers.

<sup>(4)</sup> Includes pipelines, facilities, terminals, rail, office space, land and vehicle leases.

<sup>(5)</sup> Excludes projects that are executed by equity accounted investees.

<sup>(6)</sup> Relates to expected variable lease payments excluded from the measurement of the lease liability, payments under lease contracts which have not yet commenced, and payments related to non-lease components in lessee lease contracts.

**Contingencies**

Pembina, including its subsidiaries and its investments in equity accounted investees, are subject to various legal and regulatory and tax proceedings, actions and audits arising in the normal course of business. Pembina represents its interests vigorously in all proceedings in which it is involved. Legal and administrative proceedings involving possible losses are inherently complex, and the Company applies significant judgment in estimating probable outcomes. As at December 31, 2025, there were no significant claims filed against Pembina for which management believes the resolution of any such actions or proceedings would have a material impact on Pembina's financial position or results of operations.

**Off-Balance Sheet Arrangements**

As at December 31, 2025, Pembina did not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on Pembina's financial condition, results of operations, liquidity or capital expenditures.

**Letters of Credit**

Pembina has provided letters of credit to various third parties in the normal course of conducting business. The letters of credit include financial guarantees to counterparties for product purchases and sales, transportation services, utilities, engineering and construction services. The letters of credit have not had, and are not expected to have, a material impact on Pembina's financial position, earnings, liquidity or capital resources. As at December 31, 2025, Pembina had $124 million (December 31, 2024: $209 million) in letters of credit issued.

**Pembina Pipeline Corporation 2025 Annual Report** 25

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**5. SHARE CAPITAL**

**Common Shares**

On May 14, 2025, the Toronto Stock Exchange ("TSX") accepted the renewal of Pembina's normal course issuer bid (the "NCIB") that allows the Company to repurchase, at its discretion, up to five percent of the Company's outstanding common shares (representing approximately 29 million common shares) through the facilities of the TSX, the New York Stock Exchange and/or alternative Canadian trading systems or as otherwise permitted by applicable securities law, subject to certain restrictions on the number of common shares that may be purchased on a single day. The NCIB commenced on May 16, 2025 and will expire on the earlier of May 15, 2026, the date on which Pembina has acquired the maximum number of common shares allowable under the NCIB or the date on which Pembina otherwise decides not to make any further repurchases under the NCIB. No common shares were purchased by Pembina during the years ended December 31, 2025 and 2024.

**Common Share Dividends** 

Common share dividends are payable if, as and when declared by Pembina's Board of Directors. The amount and frequency of dividends declared and payable is at the discretion of Pembina's Board of Directors, which considers earnings, cash flow, capital requirements, the financial condition of Pembina and other relevant factors when making its dividend determination.

**Preferred Shares**

On January 8, 2025, Pembina redeemed all of the approximately one million issued and outstanding Cumulative Redeemable Floating Rate Class A Preferred Shares, Series 22 ("Series 22 Class A Preferred Shares") at a redemption price of $25.50 per Series 22 Class A Preferred Share, plus all accrued and unpaid dividends thereon. Pembina had announced its intention to redeem the Series 22 Class A Preferred Shares during the fourth quarter of 2024 and, as a result, the equity was reclassified as a financial liability of approximately $26 million for the total redemption price in that same quarter.

On June 30, 2025, Pembina redeemed all of the eight million issued and outstanding Series 19 Class A Preferred Shares at a redemption price of $25.00 per Series 19 Class A Preferred Share. The total redemption price for the Series 19 Class A Preferred Shares was $200 million.

On July 28, 2025, in connection with the Note Exchange, Pembina redeemed all of the 600,000 issued and outstanding Series 2021-A Class A Preferred Shares, which were deliverable to holders of the Series 1 Subordinated Notes following the occurrence of certain bankruptcy and related events. The Series 2021-A Class A Preferred Shares were issued by Pembina to Computershare Trust Company of Canada to be held in trust to satisfy its obligations under the indenture governing the Series 1 Subordinated Notes.

On December 1, 2025, in connection with the October 10, 2025 offering of Series 2 Subordinated Notes, Pembina redeemed all of its outstanding Series 9 Class A Preferred Shares at a price equal to $25.00 per Series 9 Class A Preferred Share, for a total redemption price of $225 million.

**Preferred Share Dividends** 

The holders of Pembina's Class A Preferred Shares are entitled to receive fixed or floating cumulative dividends, as applicable. Dividends on the Series 1, 3, 5, 7, and 21 Class A Preferred Shares are payable quarterly on the first day of March, June, September and December, if, as and when declared by the Board of Directors of Pembina. Dividends on the Series 15 and 17 Class A Preferred Shares are payable on the last day of March, June, September and December in each year, if, as and when declared by the Board of Directors of Pembina. Dividends on the Series 25 Class A Preferred Shares are payable on the 15<sup>th</sup> day of February, May, August and November in each year, if, as and when declared by the Board of Directors of Pembina.

26 **Pembina Pipeline Corporation 2025 Annual Report** 

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**Outstanding Share Data**

---

| | |
|:---|:---|
| Issued and outstanding *(thousands)* | **February 20, 2026** |
| &nbsp;&nbsp;&nbsp;Common shares | 581231 |
| &nbsp;&nbsp;&nbsp;Stock options<sup>(1)</sup> | 2037 |
| &nbsp;&nbsp;&nbsp;Series 1 Class A Preferred Shares | 10000 |
| &nbsp;&nbsp;&nbsp;Series 3 Class A Preferred Shares | 6000 |
| &nbsp;&nbsp;&nbsp;Series 5 Class A Preferred Shares | 10000 |
| &nbsp;&nbsp;&nbsp;Series 7 Class A Preferred Shares | 10000 |
| &nbsp;&nbsp;&nbsp;Series 15 Class A Preferred Shares | 8000 |
| &nbsp;&nbsp;&nbsp;Series 17 Class A Preferred Shares | 6000 |
| &nbsp;&nbsp;&nbsp;Series 21 Class A Preferred Shares | 14972 |
| &nbsp;&nbsp;&nbsp;Series 25 Class A Preferred Shares | 10000 |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Balance includes 1.76 million exercisable stock options.

**6. CAPITAL EXPENDITURES**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **3 Months Ended December 31** | **3 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** |
| *($ millions)* | **2025** | 2024 | **2025** | 2024 |
| Pipelines | **146** | 97 | **362** | 539 |
| Facilities | **82** | 127 | **376** | 345 |
| Marketing & New Ventures | **6** | 9 | **20** | 30 |
| Corporate and other projects | **1** | 9 | **26** | 41 |
| Total capital expenditures<sup>(1)</sup> | **235** | 242 | **784** | 955 |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Includes $55 million for the three months ended December 31, 2025 (2024: $79 million) and $141 million for the twelve months ended December 31, 2025 (2024: $179 million) related to non-recoverable sustainment activities.

In both 2025 and 2024, Pipelines capital expenditures largely related to expansions to support volume growth in NEBC and investments in smaller growth projects. Additionally, 2024 capital expenditures were associated with Pembina's Phase VIII Peace Pipeline expansion, which was placed into service in May 2024. Facilities capital expenditures in both 2025 and 2024 primarily related to Redwater expansion projects. Marketing & New Ventures and Corporate capital expenditures during these periods related mainly to information technology infrastructure and systems development.

In both the fourth quarter and full year of 2025, the non-recoverable sustaining capital expenditure was primarily attributed to supporting safe and reliable operations.

Future capital expenditures for 2026 are estimated to be approximately $940 million and are primarily related to the construction of RFS IV, the Prince Rupert Terminal Optimization, the Fox Creek-to-Namao Peace Pipeline Expansion, spending to advance potential future projects, including preliminary construction activities to support optimized execution of the Birch-to-Taylor and Taylor-to-Gordondale expansions, and investments in smaller growth projects, including various laterals and terminals. Of the total future capital expenditure, approximately $210 million is designated for non-recoverable sustaining capital, which will continue to support safe and reliable operations.

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

**Pembina Pipeline Corporation 2025 Annual Report** 27

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**7. SELECTED QUARTERLY INFORMATION**

**Selected Quarterly Operating Information**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| *(mboe/d)* | **2025** | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 | 2024 |
|  | **Q4** | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| **Volumes**<sup>(1)(2)</sup> |  |  |  |  |  |  |  |  |
| Pipelines – *transportation volumes* |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Conventional Pipelines | **1059** | 1001 | 1006 | 1033 | 1034 | 992 | 969 | 1007 |
| &nbsp;&nbsp;&nbsp;Transmission Pipelines | **705** | 699 | 722 | 740 | 720 | 713 | 726 | 588 |
| &nbsp;&nbsp;&nbsp;Oil Sands and Heavy Oil Pipelines | **1051** | 1050 | 1040 | 1035 | 1036 | 1033 | 1021 | 1003 |
| Facilities – *processing and fractionation volumes* |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Gas Services | **631** | 598 | 590 | 619 | 597 | 584 | 599 | 612 |
| &nbsp;&nbsp;&nbsp;NGL Services | **267** | 262 | 236 | 277 | 280 | 226 | 256 | 193 |
| Total revenue volumes | **3713** | 3610 | 3594 | 3704 | 3667 | 3548 | 3571 | 3403 |
| Marketing & New Ventures – *sales volumes* |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Marketed crude oil | **77** | 111 | 95 | 88 | 96 | 117 | 100 | 80 |
| &nbsp;&nbsp;Marketed NGL | **260** | 237 | 207 | 281 | 252 | 227 | 219 | 215 |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Volumes in mboe/d. See the "Abbreviations" section of this MD&A for definition. Volumes for Pipelines and Facilities divisions are revenue volumes, which are physical volumes plus volumes recognized from take-or-pay commitments. Volumes for Marketing & New Ventures are marketed crude oil and NGL volumes.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Includes Pembina's proportionate share of volumes from equity accounted investees.

**Take-or-pay Contract Liabilities**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| *($ millions)* | **2025** | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 | 2024 |
|  | **Q4** | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| &nbsp;&nbsp;Opening balance | **6** | 9 | 7 | 1 | 11 | 12 | 7 | 1 |
| &nbsp;&nbsp;Revenue deferred | **50** | 51 | 57 | 58 | 58 | 67 | 55 | 52 |
| &nbsp;&nbsp;&nbsp;Revenue recognized | **(55)** | (54) | (55) | (52) | (68) | (68) | (50) | (46) |
| &nbsp;&nbsp;Ending take-or-pay contract liability balance | **1** | 6 | 9 | 7 | 1 | 11 | 12 | 7 |

---

**Selected Quarterly Market Pricing**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 | 2024 |
| *($ average)* | **Q4** | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| WTI (USD/bbl) | **59.14** | 64.93 | 63.74 | 71.42 | 70.27 | 75.10 | 80.57 | 76.96 |
| FX (USD/CAD) | **1.39** | 1.38 | 1.38 | 1.43 | 1.40 | 1.36 | 1.37 | 1.35 |
| AECO Natural Gas (CAD/GJ) | **2.22** | 0.94 | 1.96 | 1.92 | 1.38 | 0.77 | 1.36 | 1.94 |
| Station 2 Natural Gas (CAD/GJ) | **1.75** | 0.45 | 0.43 | 1.22 | 0.85 | 0.47 | 0.72 | 2.45 |
| Chicago Citygate Natural Gas (USD/mmbtu) | **3.43** | 2.71 | 2.99 | 3.91 | 2.71 | 1.76 | 1.60 | 2.49 |
| Mt Belvieu Propane (USD/gal) | **0.66** | 0.70 | 0.79 | 0.90 | 0.77 | 0.73 | 0.75 | 0.84 |
| Alberta Power Pool (CAD/MWh) | **43.18** | 51.53 | 40.48 | 40.30 | 51.72 | 55.23 | 45.28 | 98.89 |
| Pembina 20-day volume-weighted average share price at quarter end | **52.68** | 54.11 | 51.30 | 55.90 | 54.05 | 55.19 | 50.22 | 47.54 |

---

28 **Pembina Pipeline Corporation 2025 Annual Report** 

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**Quarterly Financial Information**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| *($ millions, except where noted)* | **2025** | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 | 2024 |
|  | **Q4** | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 |
| Revenue | **1913** | 1791 | 1792 | 2282 | 2145 | 1844 | 1855 | 1540 |
| Net revenue<sup>(1)</sup> | **1139** | 1211 | 1184 | 1343 | 1383 | 1259 | 1222 | 912 |
| Operating expenses | **241** | 259 | 235 | 226 | 270 | 277 | 240 | 189 |
| Share of profit (loss) from equity accounted investees | **171** | (66) | 74 | 30 | 133 | (17) | 61 | 151 |
| Gross profit | **827** | 658 | 780 | 928 | 1024 | 747 | 815 | 730 |
| Adjusted EBITDA<sup>(1)</sup> | **1075** | 1034 | 1013 | 1167 | 1254 | 1019 | 1091 | 1044 |
| Earnings | **489** | 286 | 417 | 502 | 572 | 385 | 479 | 438 |
| Earnings per common share – basic *(dollars)* | **0.78** | 0.43 | 0.65 | 0.80 | 0.92 | 0.60 | 0.75 | 0.74 |
| Earnings per common share – diluted *(dollars)* | **0.78** | 0.43 | 0.65 | 0.80 | 0.92 | 0.60 | 0.75 | 0.73 |
| Cash flow from operating activities | **861** | 810 | 790 | 840 | 902 | 922 | 954 | 436 |
| Cash flow from operating activities per common share – basic *(dollars)* | **1.48** | 1.39 | 1.36 | 1.45 | 1.55 | 1.59 | 1.64 | 0.79 |
| Adjusted cash flow from operating activities<sup>(1)</sup> | **731** | 648 | 698 | 777 | 922 | 724 | 837 | 782 |
| Adjusted cash flow from operating activities per common share – basic *(dollars)*<sup>(1)</sup> | **1.26** | 1.12 | 1.20 | 1.34 | 1.59 | 1.25 | 1.44 | 1.42 |
| Common shares outstanding *(millions)*: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Weighted average – basic | **581** | 581 | 581 | 581 | 581 | 580 | 580 | 549 |
| &nbsp;&nbsp;&nbsp;Weighted average – diluted | **582** | 582 | 582 | 582 | 582 | 581 | 581 | 550 |
| &nbsp;&nbsp;&nbsp;End of period | **581** | 581 | 581 | 581 | 581 | 580 | 580 | 549 |
| Common share dividends declared | **412** | 413 | 412 | 401 | 401 | 401 | 400 | 367 |
| Dividends per common share | **0.71** | 0.71 | 0.71 | 0.69 | 0.69 | 0.69 | 0.69 | 0.67 |
| Preferred share dividends declared | **32** | 32 | 35 | 35 | 34 | 34 | 33 | 31 |
| Capital expenditures | **235** | 178 | 197 | 174 | 242 | 262 | 265 | 186 |
| Contributions to equity accounted investees | **127** | 108 | 126 | 50 |  | 124 | 144 | 103 |
| Distributions from equity accounted investees | **148** | 128 | 136 | 132 | 131 | 133 | 123 | 239 |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Refer to the "Non-GAAP & Other Financial Measures" section of this MD&A.

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

• a gain on the sale of land in the fourth quarter of 2025 involving both land held directly by Pembina and within the Greenlight joint venture, which resulted in a gain being recognized across two segments, within the Corporate Division ($96 million pre-tax gain) and included in share of profit from Greenlight in the Marketing & New Ventures Division ($62 million gain, net to Pembina, pre-tax);

• an impairment of $146 million (net to Pembina, after tax), recognized in the third quarter of 2025 within Pembina's equity accounted investee, related to certain PGI assets;

• contributions made by Pembina to PGI of $243 million in the full year of 2025, to partially fund growth capital projects;

• contributions made by Pembina to Cedar LNG of $241 million in 2024, to fund the Cedar LNG Project; and

• the completion of the Alliance and Aux Sable acquisition in the second quarter of 2024.

**Pembina Pipeline Corporation 2025 Annual Report** 29

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**8. SELECTED EQUITY ACCOUNTED INVESTEE INFORMATION**

**Loans and Borrowings of Equity Accounted Investees**

Under equity accounting, the assets and liabilities of an investee are reported as a single line item in the Consolidated Statement of Financial Position, "Investments in Equity Accounted Investees". To assist readers' understanding and to evaluate the capitalization of Pembina's investments, loans and borrowings associated with investments in equity accounted investees are presented below based on Pembina's proportionate ownership in such investees, as at December 31, 2025. The loans and borrowings are presented and classified by the division in which the results for the investee are reported. Please refer to the "Abbreviations" section for a summary of Pembina's investments in equity accounted investees and the division in which their results are reported.

---

| | | |
|:---|:---|:---|
| **As at December 31**<br>*($ millions)*<sup>(1)</sup> | **2025** | 2024 |
| Pipelines | **16** | 19 |
| Facilities | **3230** | 2941 |
| Marketing & New Ventures<sup>(2)</sup> | **616** | 373 |
| Total | **3862** | 3333 |

---

<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Balances reflect Pembina's ownership percentage of the outstanding balance face value.

<sup>(2)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Relates to the U.S. $2.7 billion senior unsecured construction/term loan facility entered into by Cedar LNG.

**Cash and Cash Equivalents of Equity Accounted Investees**

As at December 31, 2025, Pembina's ownership percentage of the cash balance associated with Pembina's investments in equity accounted investees totaled $100 million (December 31, 2024: $43 million) of which $67 million (December 31, 2024: nil) related to Greenlight, $20 million (December 31, 2024: $39 million) related to Cedar LNG, and $11 million (December 31, 2024: nil) related to PGI.

**Financing Activities for Equity Accounted Investees** 

**PGI**

On March 21, 2025, pursuant to an amended and restated credit agreement, PGI exercised the accordion feature under its existing revolving credit facility and opened a new $500 million revolving credit facility, maturing on March 21, 2027. Concurrently, PGI reestablished a $500 million accordion under the credit facility.

**Commitments to Equity Accounted Investees** 

Pembina has commitments to provide contributions to certain equity accounted investees based on its ownership interest. These contributions are determined and approved by the joint venture partners to fund operating budgets, growth capital, and significant projects development costs, including the Cedar LNG Project and Greenlight.

**Credit Risk for Equity Accounted Investees**

As at December 31, 2025, Pembina's various equity accounted investees held letters of credit totaling $157 million (December 31, 2024: $164 million) primarily in respect of obligations for engineering, procurement and construction.

30 **Pembina Pipeline Corporation 2025 Annual Report** 

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**9. RELATED PARTY TRANSACTIONS**

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

A summary of the significant related party transactions and balances are as follows:

---

| | | |
|:---|:---|:---|
| **For the years ended December 31**<br>*($ millions)* | **2025** | 2024 |
| &nbsp;&nbsp;&nbsp;PGI | **242** | 242 |
| &nbsp;&nbsp;&nbsp;Cedar LNG | **19** | 26 |
| &nbsp;&nbsp;Aux Sable<sup>(1)</sup> | **—** | 32 |
| &nbsp;&nbsp;Alliance<sup>(1)</sup> | **—** | 4 |
| &nbsp;&nbsp;Other<sup>(2)</sup> | **—** | 2 |
| Total services provided<sup>(3)</sup> | **261** | 306 |
| &nbsp;&nbsp;&nbsp;PGI | **8** | 8 |
| &nbsp;&nbsp;Alliance<sup>(1)</sup> | **—** | 3 |
| Total services received | **8** | 11 |
| **As at December 31**<br>*($ millions)* | **2025** | 2024 |
| &nbsp;&nbsp;&nbsp;PGI | **39** | 34 |
| &nbsp;&nbsp;&nbsp;Cedar LNG | **4** | 2 |
| &nbsp;&nbsp;Greenlight<sup>(4)</sup> | **27** |  |
| &nbsp;&nbsp;Other<sup>(2)</sup> | **—** | 1 |
| Trade receivables and other | **70** | 37 |
| Right-of-use assets<sup>(5)</sup> | **32** |  |
| Lease liabilities<sup>(5)</sup> | **32** |  |

---

<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>As of April 1, 2024, following the completion of Pembina's acquisition of a controlling interest in Alliance and Aux Sable, these entities became consolidated subsidiaries of Pembina and, as such, are no longer related parties.

<sup>(2)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Other includes transactions with Grand Valley and ACG.

<sup>(3)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Services provided by Pembina include payments made by Pembina on behalf of related parties.

<sup>(4)&nbsp;&nbsp;&nbsp;&nbsp;</sup>On November 5, 2025, Pembina issued a $27 million promissory note to Greenlight, with a 10.0 percent annual interest rate payable semi-annually, with an optional prepayment, and a maturity date of the earlier of five days after Greenlight's positive final investment decision or September 30, 2026.

<sup>(5)&nbsp;&nbsp;&nbsp;&nbsp;</sup>As at December 31, 2025, Pembina had a lease arrangement with PGI for the use of a natural gas storage asset. Under the terms of the agreement, Pembina recognized a right-of-use asset and a corresponding lease liability. The lease commenced on September 1, 2025 and has a term of 15 years. Lease payments are made on a monthly basis and are structured as a combination of a fixed fee and flow-through charges.

**Pembina Pipeline Corporation 2025 Annual Report** 31

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**10. ACCOUNTING POLICIES & ESTIMATES**

**Changes in Accounting Policies**

The accounting policies used in preparing the Consolidated Financial Statements are described in Note 3 of Pembina's Consolidated Financial Statements. There were no new accounting standards or amendments to existing standards adopted in the year ended December 31, 2025 that have a material impact on Pembina's financial statements.

**New Standards and Interpretations Not Yet Adopted**

**IFRS 18 Presentation and Disclosure in Financial Statements ("IFRS 18")**

IFRS 18 was issued in April 2024 and effective January 1, 2027, with early application permitted. The standard introduces key changes to the structure of the statement of earnings and comprehensive income, required disclosures for certain management-defined performance measures, and aggregation and disaggregation of line items in the financial statements. Pembina is currently reviewing the impact of this standard on its Consolidated Financial Statements.

**Critical Accounting Judgments and Estimates**

The preparation of the Consolidated Financial Statements in conformity with IFRS requires management to make judgments, estimates, and assumptions that are based on facts and circumstances as at the date of the Consolidated Financial Statements, which could affect 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. Information about estimates and judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the to the Consolidated Financial Statements are described below.

**Judgments** 

*Assessment of Joint Control for Joint Arrangements*

Joint arrangements represent arrangements where Pembina has joint control established by a contractual agreement. Joint arrangements give rise to either joint operations or joint ventures. The determination of joint control requires significant judgment about each party's substantive rights, exposure to variability of returns, and the power necessary for the party to affect its respective returns. Joint control exists when decisions about the relevant activities require the unanimous consent of the parties that control the arrangement collectively. Ownership percentage alone may not be a determinant of joint control.

*Determination of Cash Generating Units in Assessment of Non-Financial Asset Impairments*

For the purpose of impairment testing, assets that cannot be tested individually are grouped together into cash generating units ("CGUs"). CGUs are the smallest group of assets that generate cash inflows from the continued use of the related assets, and are largely independent from other assets. CGUs may incorporate integrated assets from multiple operating segments, which reflects the lowest level at which goodwill is monitored for management 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. In determining CGUs, significant management judgment is required to assess what constitutes independent cash flows. When an impairment test is performed, the carrying value of a CGU or group of CGUs is compared to its recoverable amount. As such, the asset composition of a CGU or group of CGUs directly impacts both the carrying value and recoverability of the assets included therein.

32 **Pembina Pipeline Corporation 2025 Annual Report** 

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*Performance Obligations in Revenue Arrangements*

Pembina recognizes revenue equal to the consideration that it is entitled to for satisfying a performance obligation to a customer.

Performance obligations in Pembina's contracts with customers include:

• promises to perform or provide the right to transportation, liquefaction, fractionation, terminalling, storage services, and construction over a specified contractual term and/or for a specified volume of commodities; and

• promises to transfer control of commodities to the customer at a specified time periods and locations.

Certain contracts may arise that require Pembina to apply significant judgment when identifying the contract's performance obligations where (i) Pembina is providing both services and commodities; (ii) Pembina is providing services and purchasing commodities from the same counterparty; or (iii) Pembina is both purchasing and selling commodities from the same counterparty.

In contracts where Pembina performs service-type activities to enhance the value of a product and is either purchasing or selling the product, identification of the performance obligations in the contract will depend on whether Pembina or the customer has control of the product when Pembina performs the service activity. If Pembina controls a product while performing the service activity that enhances the product, the service activity is for Pembina's benefit and is not considered a performance obligation. As a result, any fees that Pembina receives from a supplier for performing a service for Pembina's benefit are treated as a reduction in the purchase price of the product rather than as revenue, or in the case of a product sales contract, any fees related to performing the service are allocated to the product sales revenue rather than separately recognizing service revenues.

Other situations may have Pembina purchasing and subsequently selling a product without ever obtaining control of that product or selling and then subsequently repurchasing a product without ever losing control of the product. In these cases, Management will determine whether the substance of the arrangement is to provide a service to a customer where the net proceeds will be recognized as service revenue, or to receive a service where the net proceeds will be recognized as a cost outside of revenue.

*Assessment of Whether Recontracting Services Constitutes Net Settlement of the Original Supplier Agreement*

When Pembina recontracts services received from a supplier to a separate customer, judgment is required to assess whether the arrangement constitutes a net settlement of the original supplier agreement. This evaluation involves analyzing the rights and obligations of all parties, the Company's continued exposure to risks under the supplier contract, and whether the Company provides incremental goods or services to the customer. The conclusion of the assessment determines whether the agreements are accounted for as financial instruments or under other standards, which can result in significantly different accounting outcomes.

**Estimates**

*Recoverability of Non-Financial Assets*

Non-financial assets, other than inventory, assets arising from employee benefits, and deferred tax assets, are assessed 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.

Goodwill is assessed at each reporting date to determine whether there is any indication of impairment. In addition, goodwill is tested for impairment annually, or more frequently, if an impairment indicator exists.

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An impairment loss is recognized if the carrying amount of an asset, CGU or group of CGUs exceeds its estimated recoverable amount. The estimated recoverable amount is determined as the higher of value in use and fair value less costs of disposal, by using either the income (cash flow) approach or comparable market transactions, if available. When using the income approach, management is required to make significant estimates and assumptions concerning future cash flows, which are impacted by energy transition considerations, access to global markets, and business contracting assumptions. In addition, when determining the appropriate discount rate, management is required to make assumptions concerning the current industry and economic environment, as well as asset and cash-flow specific risk premiums.

These estimates and assumptions are susceptible to change and may differ from actual future developments. This estimation uncertainty could impact quantified recoverable amounts; and therefore, any related impairment charges, which may be material.

Impairment losses are recognized in earnings. Impairment losses recognized in respect of a CGU (group 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.

For non-financial assets, excluding goodwill, 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. An impairment reversal is recognized in earnings under impairment (reversal) expense. An impairment loss in respect of goodwill is not reversed.

Goodwill that forms part of the carrying amount of an investment in an equity accounted investee is not recognized separately; and therefore, is not tested for impairment separately. Rather, the investment, including its respective goodwill, is tested for impairment as a single asset when there is objective evidence it may be impaired as a result of one or more events having occurred that could negatively impact the estimated future cash flows from the investment. If the investment does not generate cash flows that are largely independent of those from other Pembina assets, its carrying value is added to a CGU to which the investment relates.

*Fair Value of Level 3 Derivative Instruments*

Refer to the "Other - Risk Management - Financial Instruments" section of this MD&A for estimates used in the valuation of Level 3 derivative instruments.

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**11. RISK FACTORS**

Pembina's value proposition is based on balancing economic benefit against risk. Where appropriate, Pembina will seek to reduce risk. Pembina continually works to mitigate the impact of potential risks to its business by identifying all significant risks so that they can be appropriately managed. To assist with identifying and managing risk, Pembina has implemented a comprehensive risk management program. The risks that may affect the business and operations of Pembina and its operating subsidiaries are described below. Further, additional discussion about counterparty risk, market risk, liquidity risk and additional information on financial risk management can be found in Note 23 of the Consolidated Financial Statements.

**Risks Inherent in Pembina's Business**

**Commodity Price and Volume Risk** 

Pembina's business is exposed to commodity price volatility and a substantial decline in the prices of these commodities could adversely affect its financial results.

Certain of the transportation contracts or tolling arrangements with respect to Pembina's pipeline assets do not include take-or-pay commitments from crude oil and natural gas producers and, as a result, Pembina is exposed to volume risk with respect to those assets. A decrease in volumes transported can directly and adversely affect Pembina's revenues and earnings. The demand for, and utilization of, Pembina's pipeline assets may be impacted by factors such as changing market fundamentals, capacity bottlenecks, operational incidents, regulatory restrictions, system maintenance, weather and increased competition. Market fundamentals, such as commodity prices and price differentials, natural gas and gasoline consumption, alternative energy sources and global supply disruptions outside of Pembina's control can impact both the supply of and demand for the commodities transported on Pembina's pipelines, which can, in turn, impact the demand for, and utilization of, Pembina's pipeline assets. See "*Reserve Replacement, Throughput and Product Demand*" below*.* 

Pembina's Marketing business includes activities related to product storage, terminalling, and hub services. These activities expose Pembina to certain risks relating to fluctuations in commodity prices and, as a result, Pembina may experience volatility in revenue and impairments related to the book value of stored product. Primarily, Pembina enters into contracts to purchase and sell crude oil, condensate, NGL and natural gas at floating market prices and, as a result, the prices of products that are marketed by Pembina are subject to volatility as a result of factors such as seasonal demand changes, the actions of OPEC, extreme weather conditions (the severity of which could increase due to climate change), geopolitical events such as armed conflict and political instability, and developments relating thereto, market inventory levels, general economic conditions, the availability and price of transportation logistics, changes in commodity markets, the availability and pricing of alternate fuel sources and other factors. Pembina manages its risk exposure by balancing purchases and sales to secure less volatile margins; however, Pembina may be unsuccessful in securing such margins and may, at times, have unbalanced purchases and sales. Further, in certain situations, a producer or supplier could fail to deliver contracted volumes or could deliver in excess of contracted volumes, or a purchaser could purchase less than contracted volumes. Any of these circumstances could cause Pembina's purchases and sales to be unbalanced, which may increase Pembina's exposure to commodity price risks and could increase volatility in its revenue and cash flows. Notwithstanding Pembina's management of price and quality risk, marketing margins for commodities can vary and have varied significantly from period to period in the past. This variability could have an adverse effect on the results of Pembina's Marketing business and its overall results of operations. To assist in reducing this inherent variability in its Marketing business, Pembina has invested, and will continue to invest, in assets that have a fee-based revenue component.

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Pembina is also exposed to potential price declines and decreasing frac spreads between the time Pembina purchases NGL feedstock and sells NGL products. Frac spread is the difference between the revenue from the sale of NGL if removed from a gas stream and the value such NGL would have had if left in the gas stream and sold at natural gas prices. Frac spreads can change significantly from period to period depending on the relationship between NGL and natural gas prices (the "frac spread ratio"), absolute commodity prices, transport differentials and changes in the Canadian to U.S. dollar exchange rate. In addition, there is also a differential between NGL product prices and crude oil prices which can change margins realized for midstream products. The amount of profit or loss made on the extraction portion of the business will generally increase or decrease with frac spreads. This exposure could result in variability of cash flow generated by the Marketing business.

**Regulation and Legislation** 

In addition to environmental and social considerations, regulatory authorities consider economic aspects of pipelines. There is legislation aimed at ensuring that producers have fair and reasonable opportunities to produce, process and market their reserves. For example, in certain instances, regulatory authorities may declare the operator of a pipeline to be a common carrier of crude oil, NGL or natural gas. In doing so, regulators establish conditions under which a pipeline must accept and carry product, including the tariffs that may be charged, and requires that operators cannot unduly discriminate between their customers. Additionally, producers and shippers may apply to the appropriate regulatory authorities for a review of tariffs in certain instances, and such tariffs may then be regulated if it is found that the tariffs are not just and reasonable. The potential for enhanced regulatory oversight of tariffs for pipelines, including the Alliance Pipeline (the tolls and tariffs of which are subject to enhanced CER oversight as a Group 1 company) and certain pipelines owned by Pembina's subsidiaries in British Columbia (the tolls and tariffs of which are subject to BCUC oversight), could result in tariff levels that are less favourable to Pembina and could impact the economic operation of such pipeline systems.

The AER is the primary regulatory body that oversees Pembina's Alberta-issued development permits, with some minor exceptions. Certain of Pembina's subsidiaries own pipelines in British Columbia, which are regulated by the BCER and the BCUC, and pipelines that cross provincial or international boundaries, which are regulated by the CER and/or the FERC and PHMSA. Certain of Pembina's operations and expansion projects are subject to additional regulations and, as Pembina's operations expand throughout Canada and North America, Pembina may be required to comply with the requirements of additional regulators and legislative bodies, including the Impact Assessment Agency of Canada (the "IAAC"), the BCEAO, the Ontario Energy Board, the Ontario Ministry of Natural Resources, the Ontario Ministry of the Environment, Conservation and Parks, the Saskatchewan Ministry of Energy and Resources and Regulatory Services (Oil and Gas) under Manitoba Department of Business, Mining, Trade and Job Creation.

In the U.S., FERC regulates interstate natural gas pipelines and the transportation of crude oil, NGL and refined products in interstate commerce. Under the NGA, FERC regulates the construction, extension, and abandonment of interstate natural gas pipelines and the rates, terms and conditions of service and other aspects of the business of interstate natural gas pipelines. Interstate natural gas pipelines' rates, terms and conditions of service are filed at FERC and publicly available. Under the ICA, FERC regulates the rates, terms and conditions of the transportation in interstate commerce of crude oil, NGL and refined products. Pipeline safety is regulated by the PHMSA, which sets standards for the design, construction, pressure testing, operation and maintenance, corrosion control, training and qualification of personnel, accident reporting and record keeping. The Office of Pipeline Safety, within the PHMSA, inspects and enforces the pipeline safety regulations across the U.S. All regulations and environmental, safety and economic compliance obligations are subject to change at the initiative of FERC, PHMSA or other United States Federal agencies with jurisdiction over aspects of the operations of pipelines, including environmental, economic and safety regulations. Changes by FERC in its regulations or policies could adversely impact Pembina's natural gas pipelines, making the construction, extension, expansion or abandonment of such pipelines more costly, causing delays in the permitting of such projects or impacting the likelihood of success of completion of such projects.

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Similarly, changes in FERC's regulations or policies could adversely impact the rates that Pembina's FERC-regulated pipelines are able to charge and how such pipelines do business, whether such pipelines are regulated by FERC pursuant to the NGA or the ICA. Pembina continually monitors existing, new and changing regulations in all jurisdictions in which it currently operates, or into which it may expand in the future, and the potential implications to its operations; however, Pembina cannot predict future regulatory changes, and any such compliance and regulatory changes in any one or multiple jurisdictions could have a material adverse impact on Pembina and its financial results.

Pursuant to the *Impact Assessment Act* (Canada) (the "IAA"), the IAAC is the authority responsible for conducting all federal impact assessments for certain designated projects under the IAA. Pursuant to the five-year review process mandated by the IAA, the federal government is currently reviewing the list of designated projects which are subject to mandatory assessment under the IAA, such as international and interprovincial pipelines of at least 75 kilometers in length. Based on the IAAC's 2024 discussion paper regarding its review of designated projects, it does not appear that the IAAC is considering any changes to the inclusion or types of pipelines that are currently listed as designated projects. The Minister of Environment and Climate Change Canada (the "Minister") may also designate a project as reviewable under the IAA. However, pursuant to recent amendments to the IAA as further discussed below, a potential for non-negligible adverse effects within federal jurisdiction must exist for the Minister to designate a project as reviewable.

The CER continues to oversee approved federal, interprovincial and international energy projects, with new projects being referred to a review panel under the IAA. The Strategic Assessment of Climate Change ("SACC") sets out the types of information that project proponents are required to file and how the information may be considered. The SACC and new guidance on a "best in class" approach to GHG emissions requirements, which guidance is yet to be released, are expected to strictly limit GHG emissions from IAA-regulated projects, in support of the federal government's net-zero by 2050 goal discussed under "*Environmental Costs and Liabilities*" below.

In 2023, the Supreme Court of Canada held that the IAA was, in significant part, unconstitutional. In response to this decision, the federal government amended the IAA pursuant to the *Budget Implementation Act (2024, No. 1)*, which received royal assent in June 2024. The amendments narrow the scope of project effects that may trigger an assessment pursuant to the IAA. The amendments also permit the substitution of a federal impact assessment with equivalent assessment processes from another jurisdiction and clarify the public interest test to be applied when determining whether to allow a designated project to proceed. Relatively few projects have been subject to the federal impact assessment regime to date and Pembina continues to actively monitor developments in this area. To the extent these changes lengthen the review timeline for projects or expand the scope of the matters to be considered, the regime could materially impact the amount of time and capital resources required by Pembina to seek and obtain approval to construct and operate certain international or interprovincial pipelines or other projects designated pursuant to the IAA project list or ministerial designation powers under the IAA. In September 2025, the IAAC released a Red Tape Progress Report and announced that it is re-engineering its processes under the IAA to ensure that projects receive federal approvals in two years or less. The ongoing development of the CER Act and IAA regime could materially and directly impact Pembina's business and financial results, and could indirectly affect Pembina's business and financial results by impacting the financial condition and growth projects of its customers and, ultimately, production levels and throughput on Pembina's pipelines and in its facilities.

On June 24, 2024, the federal government amended the *Competition Act* (Canada) to address "greenwashing" by prohibiting representations to the public regarding the benefits that a business or business activity have on the environment and climate change when such statements are not substantiated. Pembina will continue to monitor this area for developments.

On November 27, 2025, the federal government and Alberta provincial government signed a Memorandum of Understanding ("Canada/Alberta MOU") which addressed, among other things, the oil and gas emissions cap, Pathways carbon capture and storage project, *Oil Tanker Moratorium Act*, applicability of the *Clean Electricity Regulations* in Alberta, and the development of a new bitumen pipeline from Alberta to the West Coast. See "*Environmental Costs and Liabilities*" below for further details regarding the potential impacts of the Canada/Alberta MOU on Pembina.

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In addition to the direct regulation of pipelines and midstream facilities, Pembina's business and operations are subject to, and may be adversely affected by changes in, environmental, health and safety laws and regulations, as described under "*Environmental Costs and Liabilities*" below. Pembina's business and financial condition may also be influenced by regulatory changes applicable to land sales, exploration, development and retail and consumer uses, and federal and foreign legislation affecting, in particular, foreign investment, through legislation such as the *Competition Act* (Canada), the *Investment Canada Act* (Canada) and equivalent legislation in foreign jurisdictions.

There can be no assurance that changes to regulatory and environmental laws or policies and government incentive programs relating to the pipeline or crude oil and natural gas industry, or unfavourable decisions of regulatory bodies or outcomes of regulatory hearings, will not adversely affect Pembina or the value of its securities.

See "*Other Information Relating to Pembina's Business – Industry Regulation*" in the AIF for the year ended December 31, 2025 for further information.

**Operational Risks** 

Operational risks include, but are not limited to: pipeline leaks; the breakdown or failure of equipment, pipelines and facilities, information systems or processes; the compromise of information and control systems; the performance of equipment at levels below those originally intended (whether due to misuse, unexpected degradation or design, construction or manufacturing defects); releases at truck terminals, storage terminals and hubs; releases associated with the loading and unloading of potentially harmful substances onto rail cars and trucks; adverse sea conditions (including storms and rising sea levels) and releases or spills from shipping vessels loaded at Pembina's Vancouver Wharves or the Prince Rupert Terminal; failure to maintain adequate supplies of spare parts; operator error; labour disputes; disputes with interconnected facilities and carriers; operational disruptions or apportionment on third-party systems or refineries, which may prevent the full utilization of Pembina's facilities and pipelines; and catastrophic events, including, but not limited to, those related to climate change and extreme weather events, including fires, floods and other natural disasters, explosions, train derailments, earthquakes, widespread epidemics or pandemic outbreaks, acts of civil protest or disobedience, terrorism or sabotage, and other similar events, many of which are beyond the control of Pembina and all of which could result in operational disruptions, damage to assets, related releases or other environmental issues, and delays in construction, labour and materials. Pembina may also be exposed from time to time to additional operational risks not stated in the immediately preceding sentence. In addition, the consequences of any operational incident (including as a result of adverse sea conditions) at Vancouver Wharves and the Prince Rupert Terminal or involving a vessel receiving products from Vancouver Wharves or the Prince Rupert Terminal may be even more significant as a result of the complexities involved in addressing leaks and releases occurring in the ocean or along coastlines and/or the repair of marine terminals. Any leaks, releases or other incidents involving such vessels, or other similar operations along the West Coast, could result in significant harm to the environment, curtailment of, or disruptions of and/or delays in, offshore shipping activity in the affected areas, including Pembina's ability to effectively carry on operations at Vancouver Wharves and the Prince Rupert Terminal. The occurrence or continuance of any of the foregoing events could increase the cost of operating Pembina's assets and/or reduce revenue, or result in damages, claims or fines, environmental damages, personal injury or loss of life, all of which could adversely affect Pembina's operations, financial performance and/or reputation. Additionally, facilities and pipelines are reliant on electrical power for their operations. A failure or disruption within the local or regional electrical power supply or distribution or transmission systems could significantly affect ongoing operations. Further, a significant increase in the cost of power or fuel, whether through increased demand or otherwise, could have a materially negative effect on the level of profit realized in cases where the relevant contracts do not provide for recovery of such costs.

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Pembina is committed to preserving customer and shareholder value by proactively managing operational risk through safe and reliable operations. Operational leaders are responsible for the supervision of operational risk by ensuring appropriate policies, procedures and systems are in place within their business units and internal controls are operating efficiently. Pembina also has an extensive program to manage pipeline system integrity, which includes the development and use of in-line inspection tools and various other leak detection technologies. Pembina's maintenance, inspection, excavation and repair programs are focused on risk mitigation and, as such, integrity maintenance programs are developed and resources are directed to areas based on continual risk assessments and infrastructure is replaced or repaired as required to ensure that Pembina's assets are operated safely and reliably. Pembina carries insurance coverage with respect to some, but not all, casualty occurrences in amounts customary for similar business operations, which coverage may not be sufficient to compensate for all casualty occurrences. In addition, Pembina has a comprehensive Security Management Program designed to reduce security-related risks.

**Competition** 

Pembina competes with other pipeline, midstream, marketing and gas processing, fractionation and handling/storage service providers in its service areas as well as other transporters of crude oil, NGL and natural gas. The introduction of competing transportation alternatives into Pembina's service areas could result in the reduction of throughput in Pembina's pipelines which could result in decreased revenues and profits for Pembina. Additionally, potential pricing differentials on the components of NGL may result in these components being transported by competing gas pipelines. Pembina is determined to meet, and believes that it is prepared for, these existing and potential competitive pressures, including through agreements which provide for areas of dedication over the geographic areas in which Pembina's pipeline infrastructure is located. In addition, competition from non-hydrocarbon based energy sources may have an adverse effect on the production of crude oil, NGL and natural gas and, as a result, on the demand for Pembina's services. Pembina also competes with other businesses for growth and business opportunities, including competition related to potential Greenfield development opportunities, which could impact its ability to grow through acquisitions and developments and could impact earnings and cash flow available to pay dividends and to service obligations under Pembina's debt securities and other debt obligations.

See "*Description of Pembina's Business and Operations*" in the AIF for the year ended December 31, 2025 for further information.

*Reliance on Principal Customers* 

Pembina sells services and products to large customers within its area of operations and relies on several significant customers to purchase product for the Marketing business. As of December 31, 2025, one customer accounted for more than 10 percent of Pembina's revenue. If for any reason this customer, or any of the other significant customers, are unable to perform their obligations under the various agreements with Pembina, the revenue and operations of Pembina could be negatively impacted, which could also adversely affect the cash flow available for dividends and to service obligations under Pembina's debt securities and other debt obligations. See "*General Risk Factors – Counterparty Credit Risk*" below.

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*Completion and Timing of Expansion Projects* 

The successful completion of Pembina's growth and expansion projects is dependent on a number of factors outside of Pembina's control, including the impact of general economic, business and market conditions, availability of capital on terms and rates acceptable to Pembina, receipt of regulatory approvals, reaching long-term commercial arrangements with customers in respect of certain portions of the expansions, construction schedules, commissioning difficulties or delays and costs that may change depending on supply, demand and/or inflation, labour, materials and equipment availability, contractor non-performance, acts of civil protest or disobedience, terrorism or sabotage, weather conditions, cost of engineering services, change in governments that granted the requisite regulatory approvals, and completion of third-party infrastructure projects that Pembina's projects rely upon. There is no certainty, nor can Pembina provide any assurance, that necessary regulatory approvals will be received on terms that maintain the expected return on investment associated with a specific project, or at all, or that satisfactory commercial arrangements with suppliers or customers will be entered into on a timely basis, or at all, or that third parties will comply with contractual obligations in a timely manner. Factors such as special interest group opposition, Indigenous, landowner and other stakeholder consultation requirements, civil protest or disobedience, changes in shipper support, and changes to the legislative or regulatory framework could all have an impact on meeting contractual and regulatory milestones. As a result, the cost estimates and completion dates for Pembina's major projects may change during different stages of the project. Greenfield and early stage projects face additional challenges, including securing leases, easements, rights-of-way, permits and/or licenses from landowners or governmental authorities allowing access for such purposes, as well as Indigenous consultation requirements. Accordingly, actual costs and construction schedules may vary from initial estimates and these differences can be significant, and certain projects may not proceed as planned, or at all. Further, there is a risk that maintenance will be required more often than currently planned or that significant maintenance capital projects could arise that were not previously anticipated.

Under most of Pembina's construction and operating agreements, the Company is obligated to construct the facilities and pipelines regardless of delays and cost increases and Pembina bears the risk for any cost overruns. Future agreements entered into with customers with respect to expansions may contain similar conditions. While Pembina is not currently aware of any significant undisclosed cost overruns with respect to its current projects at the date hereof, any such cost overruns may adversely affect the economics of particular projects, as well as Pembina's business operations and financial results, and could reduce Pembina's expected return on investment which could, in turn, reduce the level of cash available for dividends and to service obligations under Pembina's debt securities and other debt obligations.

See "*General Risk Factors – Additional Financing and Capital Resources*" and "*Customer Contracts*" below.

**Urban Encroachment Near Leases and Rights of Way**

Pembina operates certain assets in or near urban areas. Land use decisions made by municipal governments or other authorities may increase or introduce exposure to the public within defined emergency planning zones. Unmitigated, such exposure has the potential to increase the severity and likelihood of public safety impacts should a failure event occur. Urban encroachment may result in incremental capital expenditures to increase pipeline wall thickness and re-route pipelines so that emergency planning zones can be reduced in size or avoid areas of development. Operational pressures may also be required to be lowered, which reduces throughput on pipelines. These issues could impact the competitiveness of certain assets and Pembina's ability to meet customer demand.

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**Reliance on Other Facilities and Third-Party Services**

Certain of the Company's terminals, pipelines and rail activities are dependent upon their interconnections with other terminals, pipelines and rail networks and facilities owned and operated by third parties to reach end markets and as a significant source of supply for the Company's facilities. These connections are important to Pembina and its customers as they provide critical transportation routes, both from the perspective of delivering product to Pembina's facilities and providing product egress. Risks may be created as a result of: differences in pressures; specifications or capacities which affect operations; planned and unplanned outages or curtailments at third-party facilities that restrict deliveries to or from Pembina's facilities; and measurement and component balancing errors affecting product deliveries. As well, there may be issues with respect to scheduling and service delivery by third parties that affect Pembina's operations, such as the scheduling and availability of timely and reliable rail service by the railway companies on which Pembina relies to move product. Operational disruptions, apportionment, regulatory action and other events on third-party systems and infrastructure may prevent the full utilization of Pembina's facilities, require Pembina to spend additional capital, or otherwise negatively affect Pembina's operations.

Pembina is unable to control operations, events, decisions, regulatory actions or public perceptions with respect to third-party assets and facilities, making the mitigation of these risks challenging. Although Pembina employs strategies to assist in mitigating these risks, including having multiple connections, service arrangements or transportation alternatives available in order to provide flexibility during curtailments or interruptions, there is no assurance such strategies will be effective. Where such alternatives are not available or are not effective, Pembina's operations may be significantly affected.

**Possible Failure to Realize Anticipated Benefits of Corporate Strategy** 

Pembina evaluates the value proposition for new investments, acquisitions and divestitures on an ongoing basis. Planning and investment analysis is highly dependent on accurate forecasting assumptions and, to the extent that these assumptions do not materialize, financial performance may be lower or more volatile than expected. Volatility in the economy, changes in cost estimates, failure to obtain regulatory approvals and permits, project scoping and risk assessment could result in decreased returns and loss of profits for Pembina.

As part of its ongoing strategy, Pembina may complete acquisitions of assets or other entities in the future. Achieving the benefits of completed and future acquisitions depends, in part, on successfully consolidating functions and integrating operations, procedures and personnel in a timely and efficient manner, as well as Pembina's ability to realize the anticipated growth opportunities and synergies from combining the acquired businesses and operations with those of Pembina. In particular, large scale acquisitions may involve significant pricing and integration risk. The integration of acquired businesses and entities requires the dedication of substantial management effort, time and resources, which may divert management's focus and resources from other strategic opportunities and from operational matters during this process. The integration process may also result in the loss of key employees and the disruption of ongoing business, customer and employee relationships, which may adversely affect Pembina's ability to achieve the anticipated benefits of any acquisitions. Acquisitions may also expose Pembina to additional risks, including risks relating to entry into markets or businesses in which Pembina has little or no direct prior experience, increased credit risks through the assumption of additional debt, costs and contingent liabilities and exposure to liabilities of the acquired business or assets.

As part of its value proposition evaluation, Pembina may also desire to divest assets to optimize its operations and financial performance. Pembina may, however, be unable to sell certain assets or, if Pembina is able to sell certain assets, it may not receive the optimal or desired amount of proceeds from such asset sales. Additionally, the timing to close any asset sales could be significantly different than Pembina's expected timeline.

See "*General Risk Factors – Additional Financing and Capital Resources*" below.

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**Joint Ownership and Third-Party Operators** 

Certain of Pembina's assets are jointly owned and are governed by partnership or shareholder agreements entered into with third-parties. As a result, certain decisions relating to these assets require the approval of a simple majority of the owners, while others require supermajority or unanimous approval of the owners. In addition, certain of these assets are operated by unrelated third-party entities. The success of these assets is, to some extent, dependent on the effectiveness of the business relationship and decision-making among Pembina and the other joint owner(s) and the expertise and ability of any third-party operators to operate and maintain the assets. While Pembina believes that there are prudent governance and other contractual rights in place, there can be no assurance that Pembina will not encounter disputes with joint owners or that assets operated by third parties will perform as expected. Further, if a joint owner were to become insolvent, regulators may require Pembina to assume such joint owner's obligations and Pembina may face operational challenges during any insolvency proceedings, resulting in additional costs. Such events could impact operations or cash flows of these assets or cause them to not operate as Pembina expects which could, in turn, have a negative impact on Pembina's business operations and financial results, and could reduce Pembina's expected return on investment, thereby reducing the level of cash available for dividends and to service obligations under Pembina's debt securities and other debt obligations.

Agreements for joint ownership often contain restrictions on transferring an interest in an asset or an entity, including consent requirements and rights of first refusal. Such provisions may restrict Pembina's ability to transfer its interests in such assets or entities or to acquire a joint venture owner's interest in such assets or entities, and may also restrict Pembina's ability to maximize the value of a sale of its interest.

**Reserve Replacement, Throughput and Product Demand** 

Pembina's pipeline revenue is based on a variety of tolling arrangements, including fee-for-service, cost-of-service agreements and market-based tolls. As a result, certain pipeline revenue is heavily dependent upon throughput levels of crude oil, condensate, NGL and natural gas. Future throughput on crude oil, NGL and natural gas pipelines and replacement of crude oil and natural gas reserves in Pembina's service areas will be dependent upon the activities of producers operating in those areas as they relate to exploiting their existing reserve bases and exploring for and developing additional reserves, and technological improvements leading to increased recovery rates. Similarly, the volumes of natural gas processed through Pembina's gas processing assets depends on the production of natural gas in the areas serviced by the gas processing business and associated pipelines. Without reserve additions, or expansion of the service areas, volumes on such pipelines and in such facilities would decline over time as reserves are depleted. As crude oil and natural gas reserves are depleted, production costs may increase relative to the value of the remaining reserves in place, causing producers to shut-in production or seek out lower cost alternatives for transportation. If, as a result, the level of tolls collected by Pembina decreases, cash flow available for dividends to Shareholders and to service obligations under Pembina's debt securities and Pembina's other debt obligations could be adversely affected.

Over the long-term, the ability and willingness of shippers to continue production will also depend, in part, on the level of demand and prices for crude oil, condensate, NGL and natural gas in the markets served by the crude oil, NGL and natural gas pipelines and gas processing and gathering infrastructure in which Pembina has an interest. Producers may shut-in production at lower product prices or higher production costs.

Global economic events may continue to have a substantial impact on the prices of crude oil, condensate, NGL and natural gas. Pembina cannot predict the impact of future supply/demand or economic conditions, fuel conservation measures, alternative fuel requirements, governmental regulation or technological advances in fuel efficiency and energy generation in the energy and petrochemical industries or future demand for and prices of natural gas, crude oil, condensate and NGL. A lower commodity price environment will generally reduce drilling activity and, as a result, the demand for Pembina's assets and services could decline. Producers in the areas serviced by Pembina may not be successful in exploring for and developing additional reserves or achieving technological improvements to increase recovery rates and lower production costs during periods of lower commodity prices, which may also reduce demand for Pembina's assets and services.

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Future prices of these hydrocarbons are determined by supply and demand factors, including weather and general economic conditions as well as economic, political and other conditions in other crude oil and natural gas producing regions, all of which are beyond Pembina's control. The rate and timing of production from proven natural gas reserves tied into gas plants is at the discretion of producers and is subject to regulatory constraints. Producers have no obligation to produce from their natural gas reserves, which means production volumes are at the discretion of producers. Lower production volumes may increase the competition for natural gas supply at gas processing plants, which could result in higher shrinkage premiums being paid to natural gas producers. In addition, lower production volumes may lead to less demand for pipelines and processing capacity and could adversely impact Pembina's ability to re-contract on favourable terms with shippers as current agreements expire.

**Customer Contracts** 

Throughput on Pembina's pipelines is governed by transportation contracts or tolling arrangements with various crude oil and natural gas producers. Pembina is party to numerous contracts of varying durations in respect of its gas gathering, processing and fractionation facilities as well as its terminalling and storage services. Any default by counterparties under such contracts or any expiration or early termination of such contracts or tolling arrangements without renewal or replacement, provided that such contracts are material to Pembina's business and operations, may have an adverse effect on Pembina's business and results from operations and there is no guarantee that any of the contracts that Pembina currently has in place will be renewed at the end of their term, including on terms favourable to Pembina, or replaced with other contracts in the event of early termination. Further, certain contracts associated with the services described above are comprised of a mixture of firm and non-firm commitments. The revenue that Pembina earns on non-firm or firm commitments without take-or-pay service is dependent on the volume of crude oil, condensate, NGL and natural gas produced by producers in the relevant geographic areas. Accordingly, lower production volumes in these areas, including for reasons such as low commodity prices, may have an adverse effect on Pembina's revenue, which could also adversely affect the cash flow available for dividends and to service obligations under Pembina's debt securities and other debt obligations.

See "*Description of Pembina's Business and Operations*" in the AIF for the year ended December 31, 2025 for further information.

**Inflation**

The general rate of inflation impacts the economies and business environments in which Pembina operates. In response to easing global inflationary pressures, major central banks, including the Bank of Canada and the U.S. Federal Reserve, decreased benchmark interest rates multiple times throughout 2025 and, although inflation trended downward in 2025, inflationary pressures may increase in the future, resulting in central banks raising interest rates in the future. While many of Pembina's pipeline transportation agreements and facilities agreements contain provisions protecting against inflation by adjusting pricing based on changes in the consumer price index or other similar figures, increased inflation and any economic conditions resulting from governmental attempts to reduce future increases in inflation, including the imposition of higher interest rates or wage and price controls, may negatively impact levels of demand for Pembina's services and cost of inputs, and could, accordingly, have a negative impact on Pembina's business, financial condition and results of operations. Higher interest rates as a result of inflation could negatively impact the Company's borrowing costs, which could, in turn, have a negative impact on Pembina's cash flow and ability to service obligations under its debt securities and other debt obligations, and impact Pembina's ability to sanction new projects.

**Risks Relating to Natural Gas and NGL Composition**

Each of Pembina's gas processing facilities is designed to process natural gas and NGL feedstock within a certain range of composition specifications. The facilities may require modification to operate efficiently if the composition of the natural gas or NGL being processed changes significantly. The configuration of each of Pembina's gas processing facilities may not be optimal for efficient operation in the future if a change in inlet natural gas or NGL composition is outside a plant's acceptable range of composition specifications.

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Pembina monitors plant throughput, natural gas and NGL composition, third-party system performance and industry development activity in the production areas surrounding its facilities on an ongoing basis. This information is used to assist with ongoing operational decisions, bringing on new production and new customers, evaluating expansion opportunities and assessing opportunities to modify or add new services to accept the inlet gas and NGL in the areas surrounding its facilities.

**Risks Relating to Leases and Rights of Way Access**

Certain Pembina facilities and associated infrastructure are located on lands leased or licensed from third parties and such leases and licenses must be renewed from time to time. Failure to renew the leases or licenses on terms acceptable to Pembina could significantly reduce the operations of such facilities and could result in related decommissioning costs for Pembina, pursuant to the terms of such leases or licenses. Successful development of new pipelines or extensions to existing pipelines depends in part on securing leases, easements, rights-of-way, permits and/or licenses from landowners or governmental authorities allowing access for such purposes. The process of securing rights-of-way or similar access is becoming more complex, particularly in more densely populated, environmentally sensitive and other areas. The inability to secure such rights-of-way or similar access could have an adverse effect on Pembina's operations and financial results.

**Reputation** 

Reputational risk is the potential risk that market- or company-specific events, or other factors, could result in the deterioration of Pembina's reputation with key stakeholders. Pembina's business and operations, projects and growth opportunities require us to have strong relationships with key stakeholders, including local communities, Indigenous communities and other groups directly impacted by the Company's activities, as well as governments and government agencies.

The potential for deterioration of Pembina's reputation exists in many business decisions, which may negatively impact Pembina's business and the value of its securities. Reputational risk cannot be managed in isolation from other forms of risk. Credit, market, operational, insurance, liquidity, environmental, regulatory and legal, and technology risks, among others, must all be managed effectively to safeguard Pembina's reputation. Pembina's reputation could also be impacted by the actions and activities of other companies operating in the energy industry, particularly other energy infrastructure providers, over which Pembina has no control. In particular, Pembina's reputation could be impacted by negative publicity related to pipeline incidents, expansion plans or new projects or due to opposition from civilians or organizations opposed to energy, oil sands and pipeline development and, particularly, with transportation of production from oil sands producing regions. Further, Pembina's reputation could be negatively impacted by changing public attitudes towards climate change and the perceived causes thereof, over which the Company has no control. Negative impacts resulting from a compromised reputation, whether caused by Pembina's actions or otherwise, could include revenue loss, reduction in customer base, delays in obtaining regulatory approvals with respect to growth projects, reduced access to capital or decreased value of Pembina's securities and reduced insurance capacity and coverage.

**Environmental Costs and Liabilities** 

Pembina's operations, facilities and petroleum product shipments are subject to extensive national, regional and local environmental, health and safety laws and regulations governing, among other things, discharges to air, land and water, the handling and storage of petroleum products and hazardous materials, waste disposal, the protection of employee health, safety and the environment, and the investigation and remediation of contamination. Pembina's facilities may experience incidents, malfunctions or other unplanned events that may result in spills or emissions and/or result in personal injury, fines, penalties, other sanctions or property damage. Pembina may also incur liability for environmental contamination associated with past and present activities and properties.

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Pembina's pipelines and facilities must maintain a number of environmental and other permits from various governmental authorities in order to operate, and Pembina's facilities are subject to inspection and audit from time to time. Failure to maintain compliance with regulatory and permit requirements could result in operational interruptions, fines or penalties, or the need to install additional pollution control technology. Licenses and permits must be renewed from time to time and there is no guarantee that a license or permit will be renewed on the same or similar conditions as it was initially granted. There can be no assurance that Pembina will be able to obtain all licenses, permits, registrations, approvals and authorizations that may be required to conduct operations that it may wish to undertake. Further, if at any time regulatory authorities deem any of Pembina's pipelines or facilities unsafe or not in compliance with applicable laws or regulations, they may order such facilities to be shut down. Certain significant environmental legislative initiatives that may materially impact Pembina's business and financial results and condition are outlined below.

In 2021, the federal government enacted the Canadian Net-Zero Emissions Accountability Act, which legislated a federal commitment to achieve net-zero GHG emissions by 2050 and a nearer-term target of the federal government's Nationally Determined Contribution under the Paris Climate Agreement, which currently is a 40 to 50 percent GHG emissions reduction by 2030. The upstream crude oil and natural gas industry is expected to contribute a significant amount of the reduction needed to achieve these goals. In 2023, the federal government released its "2023 Progress Report on the 2030 Emissions Reduction Plan" and highlighted the importance of new regulatory changes, such as the implementation of an oil and gas emissions cap and methane reduction requirements, to Canada's success in reaching long-term climate targets.

The federal government's net-zero strategy includes a number of specific measures described below, but is also expected to affect the decision-making of all federal government bodies, including federal regulators, consistent with, for instance, the application of the SACC to projects subject to the IAA, as described above. However, given the Supreme Court of Canada's holding that the IAA was substantially unconstitutional in 2023, the implementation of many of these measures is expected to be subject to challenge. In addition, on November 9, 2025, the federal government announced its new Climate Competitiveness Strategy which unveiled the government's intention to strengthen or clarify certain existing climate policies, such as industrial carbon pricing, greenwashing regulations and methane regulations, and potentially eliminate other policies, such as the oil and gas emissions cap that was scheduled to take effect in 2030. The policy changes under the Climate Competitiveness Strategy are yet to take effect.

The federal government has mandated a pan-Canadian carbon price pursuant to the GGPPA. On June 5, 2025, the federal government introduced Bill C-4 to repeal the portion of the GGPPA pertaining to the consumer-facing carbon price, which was reduced to $0 per tonne on April 1, 2025. The federal government, however, has maintained its industrial Output-Based Pricing System ("Federal OBPS"). The carbon price is $95 per tonne in 2025, rising by $15 per tonne per year until 2030 to a price of $170 per tonne. The GGPPA establishes a set of minimum national standards for carbon pricing in Canada, which standards apply to provinces that otherwise fail to impose equally stringent provincial carbon pricing measures. The 2030 Emissions Reduction Plan stated that the federal government will explore ways to maintain the carbon price against future legislative changes. The increasing carbon price and any potential future amendments to the GGPPA may impose additional costs on the operations of Pembina and Pembina's customers.

On November 4, 2025, the federal government announced that it will take steps to strengthen the Federal OBPS, such as by developing a long term price trajectory past 2030 and imposing the federal backstop where provincial systems fall short of the federal equivalency benchmark.

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The *Technology Innovation and Emissions Reduction Regulation* ("TIER") is Alberta's output-based carbon pricing regime for large emitters. The TIER facilitates emissions reductions for facilities that emitted 100,000 tonnes of GHGs or more in 2016 or any subsequent year. The TIER also allows facilities emitting less than 100,000 tonnes of GHGs but more than 2,000 tonnes of GHGs to opt-in as a regulated facility. Facilities which are subject to the TIER are exempt from the Federal OBPS carbon price included in the GGPPA as they have been deemed equivalent. In May 2025, the government of Alberta announced that it will pause its industrial carbon price at $95 per tonne instead of increasing to $110 per tonne in 2026. However, pursuant to the Canada/Alberta MOU, the federal government committed to work with Alberta in developing a new industrial carbon pricing agreement by April 1, 2026 that increases the price stringency of the TIER regime so that it better aligns with the GGPPA's industrial carbon price. Amendments to the TIER came into force on January 1, 2023 and include, among other things, the addition of emissions associated with flaring to the regulated emissions of aggregate oil and gas facilities and the annual tightening of emission reduction benchmarks. On September 16, 2025, the Province of Alberta announced that the TIER will be amended to recognize on-site emissions reductions investments as a way for entities to meet their compliance obligations, thereby introducing a new compliance method. Based on an June 2025 Discussion Document, it is anticipated that half of an entity's expenditures on eligible projects can be considered towards TIER compliance. The Discussion Document also lists potential eligible projects, such as retrofitting stationary equipment for increased energy efficiency, low carbon fuel production for internal facility use, carbon capture and storage and heat recovery and certain study-based projects that support an eligible project.

As at December 31, 2025, Pembina had eleven TIER large final emitter facilities, including the Alberta section of the Alliance Pipeline, and five TIER aggregate facilities. At present, the operational and financial impacts of TIER are anticipated to increase over the next five years, due to annual increases in the stringency of emissions performance benchmarks. As more facilities expand and increase production, it is anticipated that additional facilities will become subject to the TIER. The potential costs and benefits to Pembina of those facilities under the TIER are continuing to be assessed.

In British Columbia, an output-based pricing system ("B.C. OBPS") was introduced on April 1, 2024, replacing the Clean B.C. Industrial Incentive Program. The B.C. OBPS ensures that there is a price incentive for industrial emitters to reduce GHG emissions, while also seeking to promote innovation and protect competitiveness. Pembina has four facilities subject to the B.C. OBPS, including the B.C. section of the Alliance Pipeline. The financial impacts of this new program on Pembina and its facilities are still being determined.

In Saskatchewan, an output-based performance standards ("SK OBPS") program came into effect in 2019. Pembina has four facilities subject to the SK OBPS, including the Saskatchewan section of the Alliance Pipeline, which became covered under this program in 2023. Similar to the B.C. OBPS, it is an intensity-based program in which covered facilities are required to meet an established intensity benchmark. The SK OBPS program was expanded in 2020 and updated in 2023, covering more industrial sectors including the natural gas pipeline sector. Facilities which are subject to the SK OBPS are exempt from the Federal OBPS carbon price included in the GGPPA as they have been deemed equivalent. This may change as in April 2025, the government of Saskatchewan set the rate of its provincial industrial carbon price to $0 per tonne. While the federal government has announced its intention to impose the Federal OBPS backstop in provinces that fall short of the equivalency requirements, it is currently unclear when and how the federal government will do so. Pembina will continue to monitor changes regarding the industrial carbon price. The financial impacts of the SK OBPS program on Pembina and its facilities are expected to increase over the next five years.

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The federal Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) ("Federal Methane Regulations"), which require reduction of fugitive and vented gas emissions from the upstream oil and gas sector, came into force on January 1, 2020. Draft amendments to the Federal Methane Regulations were released on December 16, 2023 ("Amended Federal Methane Regulations"). The Amended Federal Methane Regulations, which the federal government described as "enhanced methane regulations" in November 2025, include enhanced reduction targets, an annual third-party inspection requirement and a performance-based option as an alternative pathway to compliance. The Amended Federal Methane Regulations are planned to take effect in 2027 and apply across the sector by 2030, and may impose additional costs on the operations of Pembina and Pembina's customers.

By an equivalency agreement with the federal government, which originally came into force October 26, 2020, the Federal Methane Regulations do not currently apply in Alberta. The federal and Alberta governments entered into a new equivalency agreement prior to the October 26, 2025 expiry date of the original agreement. The new agreement will be in place until 2030. Pursuant to the Canada/Alberta MOU, the parties agreed to enter into a new methane equivalency agreement on or before April 1, 2026, with a 2035 target date and a new 75% reduction target relative to 2014 emissions levels. The Federal Methane Regulations apply in Ontario and Manitoba but not currently, due to equivalency agreements similar to that in effect in Alberta, in British Columbia or Saskatchewan.

2024 was the second compliance period for the federal Clean Fuel Regulations, which requires all producers and importers of gasoline and diesel in Canada to reduce or offset the carbon intensity of the fuels they produce or import. The Clean Fuel Regulations are intended to facilitate a decrease in the carbon intensity of gasoline and diesel used in Canada by approximately 15 percent below 2016 levels by 2030. On November 4, 2025, the federal government announced that it will make "targeted updates" to the Clean Fuel Regulations. The potential costs and benefits of the Clean Fuel Regulations and any "targeted updates" thereto to Pembina and its customers are continuing to be assessed.

In late 2024, the federal government released proposed regulations that, if adopted, would impose a cap on GHG emissions from the upstream oil and gas sector and the LNG sector. The proposed regulations would establish a cap-and-trade system for prescribed activities, such as onshore and offshore oil and gas production, oil sands production and upgrading, natural gas production and processing, and the production of LNG. GHG emissions from certain activities will be capped while emissions of GHGs from specified industrial activities will be prohibited, unless the operator registers in accordance with the regulations. The proposed regulations contemplate reducing emissions from the oil and gas sector by 35 percent below 2019 levels by 2030 to 2032. The federal government completed public consultations regarding the draft regulations and originally announced that it anticipated publishing the final regulations in 2025. However, on November 4, 2025, the federal government announced that, pursuant to its new Climate Competitive Strategy, the GHG emissions cap may no longer be necessary. Additionally, pursuant to the Canada/Alberta MOU, the federal government stated that it will not implement the oil and gas emissions cap in consideration for the mutual commitments agreed to in the Canada/Alberta MOU.

Additionally, the federal government released the *Clean Electricity Regulations* on December 17, 2024, which sets limits on the amount of CO2 that is emitted during the generation of electricity from fossil fuels. Pursuant to the Canada/Alberta MOU, the federal government suspended the *Clean Electricity Regulations* in Alberta pending a new industrial carbon pricing agreement to be executed by April 1, 2026. Upon completion of the new industrial carbon pricing agreement and factoring all other measures of the Canada/Alberta MOU to the satisfaction of both parties, the federal government will place the *Clean Electricity Regulations* in Alberta on hold.

The Government of Alberta, in its climate change legislation and guidelines, has legislated an overall cap on oil sands GHG emissions. The legislated emissions cap on oil sands operations has been set to a maximum of 100 megatonnes of CO2<sup>e</sup> in any year, which excludes new upgrading capacity and existing upgrader expansions, up to a combined maximum of 10 million tonnes of CO2<sup>e</sup>, and the electricity portion of cogeneration. This legislated cap may limit oil sands production growth in the future, and its interaction with the proposed federal oil and gas sector emissions cap is unknown at this time.

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Pembina is subject to regulation by the AER under the AER's liability management framework. Since 2021, the AER has been in the process of phasing-out its former liability management regime, which included the LLR Program and LMR. In February 2025, the AER announced amendments to the *Oil and Gas Conservation Rules, Pipeline Rules* and various AER Directives to formally eliminate the LMR and LLR.

Pembina is subject to regulation by the BCER under the Permittee Capability Assessment program ("PCA Program"), which became effective in 2022. The PCA Program is similar to the intent of the AER's Directive 088 to assess licensees holistically. It assesses the overall risk of the licensee by examining both financial health measures and deemed liabilities. Licensees are then required to provide security deposits or reduce their deemed liabilities such that their assessed risk under the PCA Program is reduced to zero in a given year. Failure to do so may restrict the licensee's ability to transfer licenses or result in enforcement action by the BCER. Pursuant to the *Energy Statutes Amendment Act, 2022* (British Columbia), the BCER has broadened authority to impose liability for cleanup, restoration and management of oil and gas infrastructure sites on directors and/or officers of a current or former permittee, or on a "responsible person", which is broadly defined to include those holding a legal or beneficial interest in petroleum or natural gas rights, production or profits associated with the oil and gas activity at issue, among others. As of June 1, 2024, the PCA Program was expanded to include dormant facilities and pipelines.

Directive 088, which came into force on December 1, 2021, institutes a holistic assessment regime with several different regulatory tools not limited to the current use of security deposits. The new holistic liability management framework includes Licencee Capability Assessments (which replaces the LLR Program), Licensee Special Actions, a process to address legacy and post-closure sites, and an expanded mandate of the Orphan Well Association. The new regime, which applies to licence transfers, also includes the Inventory Reduction Program.

Policy reviews relating to climate change, liability management and other environmental issues are ongoing in the jurisdictions in which Pembina operates. Through active participation with industry associations and direct engagement with regulatory bodies, Pembina will continue to monitor and assess for material impacts to Pembina's business as regulations and policies continue to be developed.

While Pembina believes its current operations are in material compliance with applicable environmental, health and safety laws, there can be no assurance that substantial costs or liabilities will not be incurred as a result of non-compliance with such laws. Moreover, it is possible that other developments, such as changes in environmental, health and safety laws, regulations and enforcement policies thereunder, including with respect to climate change, claims for damages to persons or property resulting from Pembina's operations, and the discovery of pre-existing environmental liabilities in relation to Pembina's existing or future properties or operations, could result in significant costs and liabilities to Pembina. If Pembina is not able to recover the resulting costs or increased costs through insurance or increased tolls, cash flow available to pay dividends to Shareholders and to service obligations under Pembina's debt securities and Pembina's other debt obligations could be adversely affected.

Changes in environmental, health and safety regulations and legislation, including with respect to climate change, may also impact Pembina's customers and could result in crude oil and natural gas development and production becoming uneconomical, which would impact throughput and revenue on Pembina's systems and in its facilities.

See "*Risks Inherent in Pembina's Business – Reserve Replacement, Throughput and Product Demand*" above.

While Pembina maintains insurance for damage caused by seepage or pollution from its pipelines or facilities in an amount it considers prudent and in accordance with industry standards, certain provisions of such insurance may limit the availability thereof in respect of certain occurrences unless they are discovered within fixed time periods, which typically range from 72 hours to 30 days. Although Pembina believes it has adequate pipeline monitoring systems in place to monitor for a significant spill of product, if Pembina is unaware of a problem or is unable to locate the problem within the relevant time period, insurance coverage may lapse and may not be available.

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**Abandonment Costs** 

Pembina is responsible for compliance with all applicable laws and regulations regarding the dismantling, decommissioning, environmental, reclamation and remediation activities associated with abandonment of its pipeline systems and other assets at the end of their economic life, and these abandonment costs may be significant. An accounting provision is made for the estimated cost of site restoration and such cost is either capitalized in the relevant asset category or applied directly to profit and loss. A provision is recognized if, as a result of a past event, Pembina has a present legal or constructive obligation that can be reliably estimated, and it is probable that an outflow of economic benefits will be required to settle the obligation. Pembina's estimates of the costs of such abandonment or decommissioning could be materially different than the actual costs incurred. For more information with respect to Pembina's estimated net present value of decommissioning obligations, see Note 15 to the Consolidated Financial Statements.

The proceeds from the disposition of certain assets, including in respect of certain pipeline systems and line fill, may be available to offset abandonment costs. Pembina may, in the future, determine it prudent or be required by applicable laws or regulations to establish and fund additional reclamation funds to provide for payment of future abandonment costs. Such reserves could decrease cash flow available to pay for dividends to Shareholders and to service obligations under Pembina's debt securities and Pembina's other debt obligations.

To the best of its knowledge, Pembina has complied in all material respects with CER requirements relative to its wholly-owned CER-regulated pipelines for abandonment funding and has completed the compliance-based filings that are required under the applicable CER rules and regulations regarding the abandonment of its pipeline systems and assets. Pembina also has ownership in CER-regulated pipelines including in respect of the Alliance Pipeline, the Tupper pipelines and the Kerrobert pipeline. Pembina, and its joint venture partner, in the case of the Tupper pipelines, is responsible for the abandonment funding and the submission of the CER-compliance based filings for those CER-regulated pipelines. Every five years, the CER reviews the amount of funds that companies must set aside to pay for future abandonment of their pipeline systems. Most recently, the CER completed a review of the abandonment funding calculations and obligations on March 27, 2024. Pembina continues to complete the annual reporting as required by the CER and meet the funding obligations imposed by the CER.

**Operating and Capital Costs** 

The operating and capital costs of Pembina's assets may vary considerably from current and forecasted values and rates and represent significant components of the cost of providing service. In general, as equipment ages, costs associated with such equipment may increase over time. In addition, operating and capital costs may increase as a result of a number of factors beyond Pembina's control, including general economic, business and market conditions and supply, demand and/or inflation in respect of required goods and/or services. Dividends may be reduced if significant increases in operating or capital costs are incurred and this may also impact the ability of Pembina to service obligations under its debt securities and other debt obligations.

Although certain operating costs are recaptured through the tolls charged on natural gas volumes processed and crude oil and NGL transported, respectively, to the extent such tolls escalate, producers may seek lower cost alternatives or stop production of their crude oil and/or natural gas.

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**Hedging Activities**

The Company utilizes financial derivative instruments as part of its overall risk management strategy to assist in managing the exposure to commodity price, interest rate, cost of power and foreign exchange risks. As an example of commodity price mitigation, the Company actively fixes a portion of its exposure to fractionation margins through the use of derivative financial instruments. Additionally, Pembina's Marketing business is also exposed to variability in quality, time and location differentials for various products, and financial instruments may be used to offset the Company's exposures to these differentials. However, these hedging arrangements may expose the Company to risk of financial loss in certain circumstances and there is no guarantee that such hedging arrangements and other efforts to manage market and inventory risks will generate profits or mitigate all of the market and inventory risk associated with Pembina's business. Further, certain hedging arrangements may limit the benefit the Company would otherwise receive from increases in commodity price, decreases in interest rates and changes in foreign exchange rates, and may expose Pembina to credit risks associated with counterparties with whom the Company has contracts. The Company does not trade financial instruments for speculative purposes. Commodity price fluctuations and volatility can also impact producer activity and throughput in Pembina's infrastructure, which is discussed in more detail above.

For more information with respect to Pembina's financial instruments and financial risk management program, see Note 23 to the Consolidated Financial Statements.

**Risks Relating to NGL by Rail** 

Pembina's operations include rail loading, offloading and terminalling facilities. Pembina relies on railroads and trucks to distribute its products for customers and to transport raw materials to its processing facilities. Costs for environmental damage, damage to property and/or personal injury in the event of a railway incident involving hydrocarbons have the potential to be significant. At this time, the *Railway Safety Act* (Canada), which governs the operation of railway equipment, does not contemplate regulatory enforcement proceedings against shippers, but consignors and shippers may be subject to regulatory proceedings under the *Transportation of Dangerous Goods Act* (Canada), which specifies, among other things, the obligations of shippers to identify and classify dangerous goods, select appropriate equipment and prepare shipping documentation. While the *Canada Transportation Act* was amended in 2015 to preclude railway companies from shifting liability for third-party claims to shippers by tariff publication alone, major Canadian railways have adopted standard contract provisions designed to implement such a shift. Under various environmental statutes in both Canada and the U.S., Pembina could be held responsible for environmental damage caused by hydrocarbons loaded at its facilities or being carried on its leased rail cars. Pembina partially mitigates this risk by securing insurance coverage, but such insurance coverage may not be adequate in the event of an incident.

Railway incidents in Canada and the U.S. have prompted regulatory bodies to initiate reviews of transportation rules and publish various directives. Regulators in Canada and the U.S. have begun to phase-in more stringent engineering standards for tank cars used to move hydrocarbon products, which require all North American tank cars carrying crude oil or ethanol to be retrofitted and all tank cars carrying flammable liquids to be compliant in accordance with the required regulatory timelines. In addition, in 2020, the Government of Canada directed industry to review and update the rules regarding the transportation of crude oil and liquefied petroleum gas. While most legislative and regulatory changes apply directly to railway companies, costs associated with retrofitting locomotives and rail cars, implementing safety systems, increased inspection and reporting requirements may be indirectly passed on to Pembina through increased freight rates and car leasing costs. In addition, regulators in Canada and the U.S. have implemented changes that impose obligations directly on consignors and shippers, such as Pembina, relating to the certification of product, equipment procedures and emergency response procedures.

In the event that Pembina is ultimately held liable for any damages resulting from its activities relating to transporting NGL by rail, for which insurance is not available, or increased costs or obligations are imposed on Pembina as a result of new regulations, this could have an impact on Pembina's business, operations and prospects and could impact earnings and cash flow available to pay dividends and to service obligations under Pembina's debt securities and other debt obligations.

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**Risks Related to Diluent Usage in the Oil Sands**

Oil sands production continues to rely on diluent (primarily condensate) blending to enable transportation of bitumen to markets via pipeline or rail. A shortage, or increase in the price, of diluent may cause oil sands producers' transportation costs to increase, which may result in less demand for the Company's services and have a negative impact on Pembina's financial performance and cash flows. Further, oil sands producers continue to invest in and evaluate technologies and methodologies to reduce the volume of diluent required for product transport. Constraints of diluent supply in the market or increases in diluent costs may accelerate such producers' investments in diluent replacement technologies. A material reduction in diluent demand from oil sands producers, whether as a result of decreased supply, or increased prices, of diluent or due to the successful implementation of diluent reduction technologies, could reduce volumes shipped on Pembina's pipeline assets and reduce demand for capacity at certain of Pembina's facilities particularly for fractionation services, which could, in either case, have a negative impact on Pembina's financial performance and cash flows*.*

**Risk Factors Relating to the Securities of Pembina** 

**Dilution of Shareholders** 

Pembina is authorized to issue, among other classes of shares, an unlimited number of Common Shares for consideration on terms and conditions as established by the Board of Directors without the approval of Shareholders in certain instances. Existing Shareholders have no pre-emptive rights in connection with such further issuances. Any issuance of Common Shares may have a dilutive effect on existing Shareholders.

**Risk Factors Relating to the Activities of Pembina and the Ownership of Securities** 

The following is a list of certain risk factors relating to the activities of Pembina and the ownership of its securities:

• the level of Pembina's indebtedness from time to time could impair Pembina's ability to obtain additional financing on a timely basis to take advantage of business opportunities that may arise, which may have an adverse effect on the value of Pembina's securities;

• the uncertainty of future dividend payments by Pembina and the level thereof, as Pembina's dividend practices and the funds available for the payment of dividends from time to time will be dependent upon, among other things, operating cash flow generated by Pembina and its subsidiaries, financial requirements for Pembina's operations, the execution of its growth strategy and the satisfaction of solvency tests imposed by the ABCA for the declaration and payment of dividends;

• Pembina may make future acquisitions or may enter into financings or other transactions involving the issuance of securities of Pembina which may be dilutive to the holders of Pembina's securities;

• the inability of Pembina to manage growth effectively, and realize the anticipated growth opportunities from acquisitions and new projects, could have an adverse impact on Pembina's business, operations and prospects, which may also have an adverse effect on the value of Pembina's securities; and

• the market value of the Common Shares may deteriorate materially if Pembina is unable to maintain its cash dividend practices or make cash dividends in the future.

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**Market Value of Common Shares and Other Securities** 

Pembina cannot predict at what price the Common Shares, Class A Preferred Shares or other securities issued by Pembina will trade in the future. Common Shares, Class A Preferred Shares and other securities of Pembina will not necessarily trade at values determined solely by reference to the underlying value of Pembina's assets. One of the factors that may influence the market price of the Common Shares and the Class A Preferred Shares is the annual dividend yield of such securities. An increase in interest rates may lead holders and/or purchasers of Common Shares or Class A Preferred Shares to demand a higher annual dividend yield, which could adversely affect the market price of the Common Shares or Class A Preferred Shares. In addition, the market price for Common Shares, Class A Preferred Shares and other securities of Pembina may be affected by announcements of new developments, changes in Pembina's operating results, failure to meet analysts' expectations, changes in credit ratings, changes in general market conditions, fluctuations in the market for equity or debt securities and other factors beyond the control of Pembina. There can be no assurance that the market price of the Common Shares, Class A Preferred Shares and other securities of Pembina will not experience significant fluctuations in the future, including fluctuations that are unrelated to Pembina's performance. For these reasons, investors should not rely on past trends in the price of Common Shares, Class A Preferred Shares or other securities issued by Pembina to predict the future price of Common Shares or Class A Preferred Shares or Pembina's financial results.

Accordingly, holders are encouraged to obtain independent legal, tax and investment advice with respect to the holding of Common Shares or Class A Preferred Shares and other securities issued by Pembina.

**General Risk Factors** 

**Health and Safety** 

The operation of Pembina's business is subject to hazards of gathering, processing, transporting, fractionating, storing and marketing hydrocarbon products. Such hazards include, but are not limited to: blowouts; fires; explosions; gaseous leaks, including sour gas; migration of harmful substances; oil spills; corrosion; and acts of vandalism and terrorism. These hazards may interrupt operations, impact Pembina's reputation, cause loss of life or personal injury to the Company's workers or contractors, result in loss of or damage to equipment, property, information technology systems, related data and control systems or cause environmental damage that may include polluting water, land or air. Further, several of the Company's pipeline systems and related assets are operated in close proximity to populated areas and a major incident could result in injury or loss of life to members of the public. A public safety incident could also result in reputational damage to the Company, material repair costs or increased costs of operating and insuring Pembina's assets.

**Cybersecurity** 

Pembina's technology infrastructure, technologies and data are becoming increasingly integrated. Such integration creates a risk that the failure of one system, including due to factors such as telecommunication failures, cyber-terrorism, security breaches and intentional or inadvertent user misuse or error, could lead to failure of other systems which may also have an impact on the Company's physical assets and its ability to safely operate such assets. Furthermore, Pembina and its third-party vendors collect and store sensitive data in the ordinary course of business, including personal identification information of employees as well as proprietary business information and that of the Company's customers, suppliers, investors and other stakeholders. Notable cybersecurity threats include unauthorized access to information technology systems due to hacking, viruses, cyber phishing attacks and other causes that can result in service disruptions, system failures and unauthorized access to confidential business information. Due to Pembina's high level of technological integration, such an attack on the information technology systems of one segment or asset of Pembina could have a material adverse effect on the broader business, operations or financial results of the Company.

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A breach in the security or failure of Pembina's information technology could result in operational outages, delays, damage to assets or the environment, reputational harm, increased vulnerability to fraud or extortion, lost profits, compromised or otherwise unusable internal systems, lost data and other adverse outcomes for which Pembina could be held liable, all of which could adversely affect Pembina's reputation, business, operations or financial results. As a result of a cyber-attack or security breach, Pembina could also be liable under laws that protect the privacy of personal information or subject to regulatory penalties.

As a result of the critical nature of energy infrastructure and Pembina's use of information systems and other digital technologies to control its assets, Pembina faces an increased risk of cyber-attacks. Cyber threat actors have attacked and threatened to attack energy infrastructure, and various government agencies have increasingly stressed that these attacks are targeting critical infrastructure, and are increasing in sophistication, magnitude, and frequency. New cybersecurity legislation, regulations and orders have been recently implemented or proposed resulting in additional actual and anticipated regulatory oversight and compliance requirements, which is expected to require significant internal and external resources. Pembina cannot predict the potential impact to its business of potential future legislation, regulations or orders relating to cybersecurity.

Furthermore, media reports about a cyber-attack or other significant security incident affecting the Company, whether accurate or not, or, under certain circumstances, Pembina's failure to make adequate or timely disclosures to the public, law enforcement, other regulatory agencies or affected individuals following any such event, whether due to delayed discovery or otherwise, could negatively impact its operating results and result in other negative consequences, including damage to Pembina's reputation or competitiveness, harm to its relationships with customers, partners, suppliers and other third parties, interruption to its management, remediation or increased protection costs, significant litigation or regulatory action, fines or penalties, all of which could materially adversely affect the Company's business, operations, reputation or financial results.

**Artificial Intelligence**

Pembina's infrastructure, technologies and data may integrate the use of artificial intelligence ("AI"), which presents certain risks, challenges and unintended consequences that could impact Pembina's business and operations. AI algorithms and training methodologies may be flawed, and dependence on AI for decision-making, without adequate safeguards, could introduce operational vulnerabilities by generating inaccurate outcomes or unintended results based on deficiencies in underlying data. The use of AI also carries inherent risks related to data privacy and cybersecurity, including the potential for intended or unintended transmission of proprietary or sensitive information. AI tools may rely on datasets that include content subject to license, copyright, trademark, patent or other intellectual property protections, raising potential compliance concerns. The legal and regulatory framework for AI remains uncertain and under development, with potential liability risks related to breaches of intellectual property or privacy rights. As new AI laws and regulations develop, Pembina's obligation to comply could result in significant costs, impact its business or limit the incorporation of certain AI capabilities into its operations.

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**Additional Financing and Capital Resources** 

The timing and amount of Pembina's capital expenditures and contributions to equity accounted investees, and the ability of Pembina to repay or refinance existing debt as it becomes due, directly affects the amount of cash available for Pembina to pay dividends. Future acquisitions, expansions of Pembina's assets, other capital expenditures and the repayment or refinancing of existing debt as it becomes due may be financed from sources such as cash generated from operations, the issuance of additional Common Shares, Class A Preferred Shares or other securities (including debt securities) of Pembina and borrowings. Dividends may be reduced, or even eliminated, at times when significant capital or other expenditures are made. There can be no assurance that sufficient capital will be available on terms acceptable to Pembina, or at all, to make additional investments, fund future expansions or make other required capital expenditures. During periods of weakness in the global economy, and, in particular, the commodity-related industry sectors, Pembina may experience restricted access to capital and increased borrowing costs. The ability of Pembina to raise capital depends on, among other factors, the overall state of capital markets, Pembina's credit rating, investor demand for investments in the energy industry generally and demand for Pembina's securities specifically. To the extent that external sources of capital, including the proceeds from the issuance of additional Common Shares, Class A Preferred Shares or other securities or the availability of additional credit facilities, become limited or unavailable on acceptable terms, or at all, due to credit market conditions or otherwise, Pembina's ability to make the necessary capital investments to maintain or expand its operations, to repay outstanding debt or to invest in assets, as the case may be, may be impaired. To the extent Pembina is required to use operating cash flow to finance capital expenditures or acquisitions or to repay existing debt as it becomes due, the level of dividends payable may be reduced.

**Counterparty Credit Risk** 

Counterparty credit risk represents the financial loss Pembina may experience if a counterparty to a financial instrument or commercial agreement fails to meet its contractual obligations to Pembina in accordance with the terms and conditions of such instruments or agreements with Pembina. Counterparty credit risk arises primarily from Pembina's trade and other receivables, finance lease receivables, advances to related parties and derivative financial instruments.

Pembina continues to closely monitor and reassess the creditworthiness of its counterparties, including financial institutions. Pembina may reduce or mitigate its exposure to certain counterparties where it is deemed warranted and permitted under contractual terms. Pembina manages counterparty credit risk through established credit management techniques, including conducting comprehensive financial and other assessments on all high exposure new counterparties. Pembina 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-designated counterparty exposure limit matrix which represents the maximum dollar amounts of counterparty exposure by debt rating that can be approved for a particular counterparty. While Pembina takes active steps to monitor and manage its counterparty credit risk, its credit procedures and policies cannot completely eliminate counterparty credit risk and Pembina cannot predict to what extent Pembina's business would be impacted by deteriorating conditions in the economy, including possible declines in the creditworthiness of its customers, vendors or counterparties. Further, it is possible that payment or performance defaults from these parties, if significant, could adversely affect Pembina's earnings, cash flows and financial results.

Financial assurances from counterparties may include guarantees, letters of credit and cash. As at December 31, 2025, letters of credit totalling approximately $249 million (2024: $276 million) were held primarily in respect of customer trade receivables.

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Pembina has typically collected its receivables in full. As at December 31, 2025, approximately 98 percent (2024: 99 percent) of receivables were current. Pembina has a general lien and a continuing and first priority security interest in, and a secured charge on, all of a shipper's petroleum products in its custody. The risk of non-collection is considered to be low and no material impairment of trade and other receivables has been made as of the date hereof.

Pembina monitors and manages its concentration of counterparty credit risk on an ongoing basis. Pembina also evaluates counterparty risk from the perspective of future exposure with existing or new counterparties that support future capital expansion projects. Pembina believes these measures are prudent and allow for effective management of its counterparty credit risk but there is no certainty that they will protect Pembina against all material losses. As part of its ongoing operations, Pembina must balance its market and counterparty credit risks when making business decisions.

**Debt Service** 

As at December 31, 2025, Pembina had exposure to floating interest rates on approximately $1,305 million (2024: $788 million) in debt. Pembina may enter into certain derivative financial instruments to manage the Company's exposure to floating interest rates.

Pembina and its subsidiaries are permitted to borrow funds to finance the purchase of pipelines and other energy infrastructure assets, to fund capital expenditures or other financial obligations or expenditures in respect of such assets and for working capital purposes. Amounts paid in respect of interest and principal on debt incurred in respect of those assets reduce the amount of cash flow available for dividends on the Common Shares and Class A Preferred Shares. Pembina is also required to meet certain financial covenants under the indentures governing its medium-term notes and the agreements governing the credit facilities, and is subject to customary restrictions on its operations and activities, including restrictions on the granting of security, incurring indebtedness and the sale of its assets.

The lenders under Pembina's credit facilities have been provided with guarantees and subordination agreements. If Pembina becomes unable to pay its debt service charges or otherwise commits an event of default, payments to the lenders under its credit facilities will rank in priority to dividends.

Although Pembina believes its existing credit facilities are sufficient for its immediate liquidity requirements, there can be no assurance that the amount available thereunder will be adequate for the future financial obligations of Pembina or that additional funds will be able to be obtained on terms acceptable to Pembina, or at all.

**Credit Ratings** 

Rating agencies regularly evaluate Pembina and base their ratings of Pembina's long-term and short-term debt and Class A Preferred Shares on a number of factors. These factors include Pembina's financial strength as well as factors not entirely within Pembina's control, including conditions affecting the industry in which Pembina operates generally and the wider state of the economy. A credit rating downgrade could also limit Pembina's access to debt and preferred share markets.

Pembina's borrowing costs and ability to raise funds are also directly impacted by its credit ratings. Credit ratings may also be important to suppliers or counterparties when they seek to engage in certain transactions with Pembina. A credit rating downgrade may impair Pembina's ability to enter into arrangements with suppliers or counterparties, engage in certain transactions, limit Pembina's access to private and public credit markets or increase the costs of borrowing under its existing credit facilities. There can be no assurance that one or more of Pembina's credit ratings will not be downgraded.

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**Reliance on Management, Key Individuals and a Skilled Workforce** 

Pembina is dependent on senior management and directors of the Company in respect of the governance, administration and management of all matters relating to Pembina and its operations and administration. The loss of the services of key individuals could have a detrimental effect on Pembina and the Company might not be able to find replacements on a timely basis or with the same level of skill and experience. In addition, Pembina's operations require the retention and recruitment of a skilled workforce, including engineers, technical personnel and other professionals. Pembina competes with other companies in the energy industry for this skilled workforce. If the Company is unable to retain current employees and/or recruit new employees of comparable skill, knowledge and experience, Pembina's business and operations could be negatively impacted. The costs associated with retaining and recruiting key individuals and a skilled workforce could adversely affect Pembina's business opportunities and financial results and there is no assurance that Pembina will continue to attract and retain all personnel necessary for the development and operation of its business.

**Indigenous Land Claims and Consultation Obligations** 

Indigenous people have claimed title and rights to a considerable portion of the lands in western Canada. The successful assertion of Indigenous title or other Indigenous rights claims may have an adverse effect on western Canadian crude oil and natural gas production or oil sands development and may result in reduced demand for Pembina's assets and infrastructure that service those areas, which could have a material adverse effect on Pembina's business and operations.

In Canada, the federal and provincial governments (the "Crown") have a duty to consult and, when appropriate, accommodate Indigenous peoples when the interests of the Indigenous peoples may be affected by a Crown action or decision. Crown actions include the decision to issue a regulatory approval relating to activities that may impact Indigenous rights, interests or lands. The Crown may rely on steps undertaken by a regulatory agency to fulfill its duty to consult and accommodate in whole or in part. Therefore, the processes established by regulatory bodies, such as the AER, the BCER, the BCEAO and the CER, often include an assessment of Indigenous rights claims and consultation obligations. While the Crown holds ultimate responsibility for ensuring consultation is adequate, this issue is often a major aspect of regulatory permitting processes. If a regulatory body, or the Crown itself, determines that the duty to consult has not been appropriately discharged relative to the issuance of regulatory approvals required by Pembina, the issuance of such approvals may be delayed or denied, thereby impacting Pembina's Canadian operations.

As described in "*Regulation and Legislation*" above, the CER Act, IAA, and associated amendments to the *Fisheries Act* (Canada) and the *Canadian Navigable Waters Act* (Canada) replaced previously applicable regimes in 2019. A number of the federal regulatory process amendments pertained to the participation of Indigenous groups and the protection of Indigenous and treaty rights. The now-current legislation generally codifies existing law and practice with respect to these matters. For example, decision makers are now expressly required to consider the effects (positive or negative) of a proposed project on constitutionally-protected Indigenous rights, as well as Indigenous peoples themselves, and ensure that consultation is undertaken during the planning phase of impact assessment processes. The legislation also creates a larger role for Indigenous governing bodies in the impact assessment process (enabling the delegation of certain aspects of the impact assessment process to such groups) and requires decision makers to consider Indigenous traditional knowledge in certain cases.

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The federal government is advancing recognition of Indigenous rights across Canada. As part of these efforts, the federal government enacted the *United Nations Declaration on the Rights of Indigenous Peoples Act* ("UNDRIP") on June 21, 2021, with the purpose of affirming the application of the UNDRIP in Canadian law. The federal government published its UNDRIP Action Plan on June 21, 2023, which is comprised of 181 guiding measures spanning the 2023-2028 period. Until 2025, courts had not determined whether UNDRIP creates new substantive rights that might impact development activities, such as those of Pembina or its customers. However, on February 19, 2025, the Federal Court of Canada in *Kebaowek First Nation v. Canadian Nuclear Laboratories*, 2025 FC 319 determined that UNDRIP must guide the Crown's analysis of the scope of the duty to consult and accommodate. According to the Federal Court, the Crown must interpret the duty to consult through the more rigorous informed, prior and free consent standard set out in UNDRIP, which operates as an added "layer" to existing constitutional obligations. In its decision, the Federal Court acknowledged the importance of this decision as one of the first to test Canada's commitments to implement the principles set out in UNDRIP and decide how these principles can aid the interpretation of Canadian law. In May 2025, the Crown appealed this decision to the Federal Court of Appeal. The Federal Court has not issued a decision on the appeal.

Structurally similar legislation to UNDRIP, the *Declaration on the Rights of Indigenous Peoples Act* ("DRIPA"), was enacted by British Columbia in 2019. The DRIPA is just one piece of the Government of British Columbia's strategy to include greater First Nation involvement in regulatory decision-making. The recognition of Indigenous rights is also facilitated by the renewed British Columbia *Environmental Assessment Act* (the "EA Act") that came into force in late 2019. The EA Act is designed as a "consent-based" environmental assessment model and is intended to support reconciliation with Indigenous peoples and the implementation of the UNDRIP. The legislation requires the BCEAO to seek participating Indigenous groups' consent with respect to, among other things, the decision to issue an environmental assessment certificate to a given project. While the EA Act does not strictly require consent in most cases, the legislation creates significant participation opportunities for Indigenous groups during environmental assessments. Furthermore, the Government of British Columbia is beginning to explore bilateral "Consent Decision-Making Agreements" under the DRIPA which require First Nation consent for certain resource development projects, including having completed two of such agreements since June 6, 2022. These developments may increase the time required to obtain regulatory approvals or the risk of such approvals and thereby impact Pembina's operations in British Columbia.

Pembina continues to actively monitor the development of the regulations required to facilitate the implementation of the UNDRIP Act, DRIPA, EA Act and the impact that other federal and provincial government initiatives on Indigenous rights may have on its business.

In addition, Pembina is monitoring the impact of judgments of the Supreme Court of British Columbia with respect to First Nation claims as well as similar developments in Alberta, including the judgment in favour of the Blueberry River First Nation ("BRFN") against the Province of British Columbia relating to the cumulative impact of industrial development within the BRFN treaty area, the judgment in favour of Saik'uz First Nation and Stellat'en First Nation in nuisance against the Crown and private company Rio Tinto Alcan Inc., and the judgment in favour of the Gitxaala Nation and Ehattesahet First Nation requiring consultation prior to staking mineral claims. Pembina is also monitoring the appeal proposed by British Columbia, the City of Richmond and the Musqueam First Nation of the September 2025 decision of the Supreme Court of British Columbia that determined that the Crown had unjustifiably infringed the Cowichan Nation's Aboriginal title by issuing fee simple land grants to third parties.

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These judgments have contributed and may further contribute to the acceleration of the Government of British Columbia's imposition of additional requirements to obtain regulatory approvals for developing pipelines or associated facilities, and in some instances restrictions on those approvals, and could cause delays, suspensions, or deferrals in the development of such facilities. The recent judgments may also impact the current and future activities of producers operating in British Columbia and cause them to decrease production, which could, in turn, reduce such producers' demand for Pembina's existing pipeline capacity and processing assets, and may have an adverse effect on Pembina's business. On January 18, 2023, the Government of British Columbia and BRFN announced that they had entered into the Blueberry River First Nations Implementation Agreement in response to the BRFN decision. The agreement creates a framework for how resource development may continue within the BRFN claim area, which includes, among other things, limiting new surface disturbances from oil and gas development in BRFN's claim area to 750 hectares per year while a long-term cumulative effects management regime is developed and implemented. The Government of British Columbia has also reached interim agreements with four other Treaty 8 First Nations which commit to a similar development of a revised approach to environmental assessment in their territories. Duncan's First Nation in Alberta has also filed a claim similar to that of BRFN regarding cumulative impacts in Northwestern Alberta. Pembina continues to actively monitor regulatory developments relating to Indigenous claims in British Columbia and Alberta; however, Pembina cannot predict future regulatory changes that may arise to address the Court's decisions in these or future cases and any such regulatory changes could impact the operations of Pembina and Pembina's customers.

**Potential Conflicts of Interest** 

Shareholders and other securityholders of Pembina are dependent on senior management and the directors of Pembina for the governance, administration and management of Pembina. Certain directors and officers of Pembina may be directors or officers of entities in competition to Pembina or may be directors or officers of certain entities in which Pembina holds an equity investment in. As such, certain directors or officers of Pembina may encounter conflicts of interest in the administration of their duties with respect to Pembina. Pembina mitigates this risk by requiring directors and officers to disclose the existence of potential conflicts in accordance with Pembina's Code of Ethics Policy and in accordance with the ABCA.

**Litigation** 

In the course of their business, Pembina and its various subsidiaries and affiliates may be subject to lawsuits and other claims, including with respect to Pembina's growth or expansion projects. In recent years, there has been an increase in climate and disclosure-related litigation against governments as well as companies involved in the energy industry and there is no assurance that Pembina will not be impacted by such litigation, or by other legal proceedings. Defence and settlement costs associated with such lawsuits and claims may be substantial, even with respect to lawsuits and claims that have no merit. Due to the inherent uncertainty of the litigation process, the resolution of any particular legal or other proceeding may have a material adverse effect on the financial position or operating results of Pembina.

**Changes in Tax Legislation**

Tax legislation that Pembina is subject to may be amended (or the interpretation of such legislation may change), retroactively or prospectively, resulting in tax consequences that materially differ from those contemplated by Pembina in the jurisdictions in which Pembina has operations, which may create a risk of non-compliance and re-assessment. While Pembina believes that its tax filing positions are appropriate and supportable, it is possible that governing tax authorities may: (i) amend tax legislation (or its interpretation of such legislation may change), or (ii) successfully challenge Pembina's interpretation of tax legislation, either of which could expose Pembina to additional tax liabilities and may affect Pembina's estimate of current and future income taxes and could have an adverse effect on the financial condition and prospects of Pembina and the distributable cash flow available to pay dividends and to service obligations under Pembina's debt securities and other debt obligations.

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**Foreign Exchange Risk** 

Pembina's cash flows, including a portion of its commodity-related cash flows and certain cash flows from U.S.-based infrastructure assets, are subject to currency risk, arising from the denomination of specific cash flows in U.S. dollars. Additionally, a portion of Pembina's capital expenditures, and contributions or loans to Pembina's U.S.-based investments in equity accounted investees, may be denominated in U.S. dollars. Pembina monitors, assesses and responds to these foreign currency risks using an active risk management program, which may include the exchange of foreign currency for domestic currency at a fixed rate.

**Political Uncertainty**

Political and social events and decisions made in Canada, the U.S. and elsewhere, including changes to federal, provincial, state or municipal governments in Canada and the U.S., may create future uncertainty on international and national financial and economic markets. This uncertainty may impact the energy industry in Canada and may have an adverse effect on Pembina's business and financial results.

A Canadian federal election occurred in 2025. Canadians returned the governing Liberal Party of Canada to power as a minority government, but under a new Prime Minister. The new government has announced its intention to transform Canada into an "energy superpower," including through the expansion of oil and gas production and exports. Following the election, the government introduced legislation to officially repeal the federal consumer-based carbon tax and announced plans to modify the federal industrial OBPS regime. It is unclear whether regulations proposed, but not yet enacted, under the previous government, such as the oil and gas emissions cap regulation, will take effect. Pembina continues to monitor changes to the federal government's climate change policy and how such changes will impact Pembina's business activities. For example, the federal government stated in November 2025 that it will not implement the oil and gas emissions cap in consideration for the mutual commitments agreed to in the Canada/Alberta MOU.

Policy changes at the provincial level are also a source of uncertainty. For example, the Government of Alberta introduced various legislative changes pertaining to the generation and transmission of electricity in 2024 and has indicated additional changes are forthcoming. Such changes have created uncertainty with respect to the pace and requirements of future renewables development in Alberta, which could impact renewables projects that Pembina's customers or partners have under development, which might in turn impact, among other things, progress on GHG emissions reduction efforts. Pembina continues to evaluate the impact of any potential changes on its business and to monitor new developments.

**Tariffs and Trade Policies**

Pembina's business could be adversely affected by the imposition of new tariffs or changes to existing tariffs and export or import restrictions. A significant portion of Pembina's revenue is derived from the transportation, processing and marketing of hydrocarbons produced in Canada, and many of Pembina's Canadian customers rely on access, through Pembina's and third party pipelines and facilities, to U.S. markets for the sale of their products. In addition, although a significant portion of Pembina's assets and operations are located in Canada, Pembina also owns and operates assets in the United States. Further, Pembina's Marketing business markets products to customers in both the U.S. and to customers in Canada.

Accordingly, the introduction of new trade policies or barriers, including the imposition of new tariffs, duties or other trade restrictions on Canadian hydrocarbon products exported to the U.S., or the imposition of new or retaliatory tariffs, duties or trade restrictions on hydrocarbon products imported into Canada from the U.S., could result in a decrease in, or increase the volatility of, commodity prices and/or price differentials which could, in turn, reduce the demand for Pembina's services and have an adverse effect on Pembina's business, financial condition and results of operations.

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Tariffs imposed by the Canada and U.S. governments on energy exports varied throughout 2025. On March 4, 2025, the U.S. announced a 10 percent tariff on oil and gas imports from Canada. However, a few days later, the U.S. implemented a tariff exemption for all energy imports from Canada that are compliant with the Canada-United States-Mexico Agreement ("CUSMA"). On August 1, 2025, the U.S. increased the tariff on imports from Canada that are not compliant with the CUSMA to 35 percent. Canada did not include energy imports from the U.S. as part of its counter tariff measures. In 2026, Canada, the U.S. and Mexico are scheduled to review the CUSMA pursuant to its five-year review provision. Pembina continues to monitor developments in Canada-U.S. trade relations closely. However, the Company cannot predict the full impact that changing government policies, legislation or trade disputes may have on its business, financial condition and results of operations.

**Risks Relating to Breach of Confidentiality**

Pembina regularly enters into confidentiality agreements with third parties prior to the disclosure of any confidential information when discussing potential business relationships or other transactions. Breaches of confidentiality could subject Pembina to competitive risk and may cause significant damage to its business. There is no assurance that, in the event of a breach of confidentiality, Pembina will be able to obtain equitable remedies from a court of competent jurisdiction in a timely manner, if at all, in order to prevent or mitigate any damage to its business that such a breach of confidentiality may cause.

**Concentration of Assets in the Western Canadian Sedimentary Basin**

The majority of Pembina's assets are concentrated in the WCSB, which leaves the Company exposed to the economic conditions of that area. Pembina mitigates this risk through a diversity of business activities within the area and by owning and operating assets in the U.S.

**Impacts of Geopolitical Events**

While Pembina's operations, based solely in North America, have not been directly impacted to date, global or international geopolitical events such as armed conflict and political instability, including political uncertainty in certain South American countries, the ongoing conflicts in the Middle East and between Ukraine and Russia, and international responses thereto, may have potential wide-ranging consequences for global market volatility and economic conditions, including energy and commodity prices, which may, in turn, increase inflationary pressures and interest rates. The short-, medium- and long-term implications of any such geopolitical events, including potential direct and indirect impacts on Pembina which could have a material and adverse effect on Pembina's business, financial condition and results of operations, are difficult to predict with any certainty. Depending on their extent, duration, and severity, such geopolitical events may have the effect of heightening many of the other risks described herein, including, without limitation, the risks relating to Pembina's exposure to commodity prices; the successful completion of Pembina's growth and expansion projects, including the expected return on investment thereof; supply chains and Pembina's ability to obtain required equipment, materials or labour; cybersecurity risks; inflationary pressures; and restricted access to capital and increased borrowing costs as a result of increased interest rates.

**Modern Slavery Act**

In 2024, the *Fighting Against Forced Labour and Child Labour in Supply Chain Act* came into force in Canada. Pursuant to the legislation, any company that is subject to reporting requirements, including Pembina, is required to conduct certain due diligence on its supply chains and to file an annual report accordingly. While Pembina is currently unaware of any forced or child labour in any of its supply chains, the increased scrutiny on the supply chains of Canadian companies could uncover the risk or existence of forced or child labour in a supply chain to which Pembina has a connection, which could negatively impact Pembina's reputation. In 2026, Pembina will be submitting its third report.

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**Internal Controls**

Effective internal controls are necessary for Pembina to provide reliable financial reports, manage its risk exposure and help prevent fraud. Although Pembina undertakes numerous procedures to help ensure the reliability of its financial reports, including those imposed by Canadian and U.S. securities laws, Pembina cannot be certain that such measures will ensure that it will maintain adequate control over financial processes and reporting. If Pembina or its independent auditors discover a material weakness, the disclosure of that fact, even if quickly remedied, could reduce the market's confidence in Pembina and its financial statements and negatively impact the trading price of the Common Shares or Class A Preferred Shares.

**Risks Related to Climate Change**

**Risks Relating to Changing Investor Sentiment in the Oil and Gas Industry**

A number of factors, including the concerns of the effects of the use of fossil fuels on climate change, concerns of the impact of oil and gas operations on the environment, concerns of environmental damage relating to spills of petroleum products during transportation and concerns of Indigenous rights, have affected certain investors' sentiments towards investing in the oil and gas industry. As a result of these concerns, some investors have announced that they are no longer willing to fund or invest in oil and gas properties or companies and/or are reducing the amount of such investments over time. Additionally, companies across all sectors have been subjected to a heightened level of awareness and scrutiny from institutional, retail and public investors with respect to their ESG practices and, as such, issuers are increasingly being required to develop and implement more robust ESG policies, practices and disclosures. Developing and implementing such policies and practices and preparing such disclosures can involve significant costs and require a significant time commitment from the Board of Directors, management and employees. Failure to implement the policies and practices expected by investors may result in such investors reducing their investment in Pembina or not investing in Pembina at all. Any reduction in the investor base interested or willing to invest in the oil and gas industry and, more specifically, Pembina may result in limits on Pembina's ability to access capital, increases to the cost of capital, a downgrade in Pembina's credit ratings and outlooks, and a decrease in the price and liquidity of Pembina's securities even if Pembina's operating results, underlying asset values or prospects have not changed.

In May 2025, Pembina published its 2024 Sustainability Report which highlights certain of Pembina's ESG policies and practices, including, but not limited to, energy transition and climate, employee well-being and culture, health and safety, responsible asset management and Indigenous and community engagement. However, certain investors of Pembina may not be satisfied with the degree and/or speed at which Pembina is implementing and bolstering its ESG policies and practices. If Pembina is unable to meet such investors' expectations, Pembina's business, as well as its reputation, could be adversely affected. Additionally, Pembina may be subject to increased potential liability in connection with its ESG-related disclosures pursuant to legislation restricting "greenwashing", including the interpretation of any such legislation. See "*Risk Factors – Risks Inherent to Pembina's Business – Regulation and Legislation*".

**Energy Market Transition**

Changing consumer preferences, new technologies, government regulation or other external factors may lead to an acceleration away from fossil-based sources of energy, including energy derived from crude oil and natural gas, to renewable and other alternative sources of energy. This may lead to lower global demand for crude oil and natural gas and related commodities and, in turn, may lead to lower prices for crude oil, natural gas and NGL and related commodities. This could negatively impact the Company's producing customers and lead to less demand for Pembina's services, which could negatively impact the revenue the Company receives from, and the value of, its pipelines, facilities and other infrastructure assets, the useful life of those assets and accelerate the timing of decommissioning.

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In addition, Pembina may invest in opportunities related to an energy transition, which may involve investments in businesses, operations or assets relating to renewable or other alternative forms of energy. Such investments may involve certain risks and uncertainties in addition to those identified herein in respect of Pembina's existing businesses, operations and assets, including the obligation to comply with additional regulatory and other legal requirements associated with such businesses, operations or assets and the potential requirement for additional sources of capital to make, develop and/or maintain such investments and Pembina's ability to access such sources of capital. In the event Pembina were to complete such investments, there can be no guarantee that Pembina will realize a return on those investments or businesses, operations or assets that is similar to the returns it receives in respect of its existing business, operations and assets or that would offset any loss in revenue from, or the value of, the Company's existing pipeline, facilities and other infrastructure assets resulting from the impact of the potential energy transition. As a result, any such investment could reduce the level of cash available for dividends and to service obligations under Pembina's debt securities and other debt obligations and may also negatively impact the trading price of Pembina's securities.

**Greenhouse Gas Emissions and Targets** 

Among other sustainability goals, Pembina has committed to reducing GHG emissions intensity of its operations by 30 percent by 2030 (based on a 2019 baseline year). The Company's ability to lower GHG emissions in respect of its 2030 emissions intensity reduction target is subject to numerous risks and uncertainties, and Pembina's actions taken to implement these objectives may also expose the Company to certain additional and/or heightened financial and operational risks. A reduction in GHG emissions intensity relies on, among other things, Pembina's ability to implement and improve energy efficiency at all facilities, future development and growth opportunities, development and deployment of new technologies, investment in lower-carbon power and transition to greater use of renewable and lower emission energy sources. In the event that the Company is unable to implement these strategies and technologies as planned without negatively impacting its expected operations or business plans, or in the event that such strategies or technologies do not perform as expected, the Company may be unable to meet its GHG emissions intensity reduction targets or goals on the current timelines, or at all.

Other risks and uncertainties that may impact the Company's ability to lower GHG emissions in respect of its 2030 emissions intensity reduction target include customer contracts and regulatory uncertainty. Emissions reduction projects are not developed in isolation of the long-term contracts underpinning Pembina's commercial structure. Many capital expenditures require approvals or participation from customers, sometimes subject to stringent pay-back requirements. For Pembina, advancing credible emissions reduction projects requires commercial engagement and customer support, adding complexity and risk to its decarbonization planning. In addition, the Company continues to monitor evolving climate change policies and carbon pricing regulations across the jurisdictions in which we operate. Emerging and duplicative regulations, permitting ambiguity, and slow-moving or restrictive incentive programs can negatively impact the pace and scale of decarbonization investment, creating a competitive disadvantage for Canadian projects relative to jurisdictions with established incentive programs. Government action to create efficient regulation and maximize value of clean growth incentives will be critical to the success of the energy transition in Canada and a balanced, responsible, and competitive regulatory regime is required to support investment in decarbonization, particularly for new and emerging clean growth industries. Certainty of carbon policies and incentives impact the return profile and competitiveness of decarbonization projects and can vary significantly. Lack of certainty brings additional complexity to the evaluation of decarbonization opportunities.

In addition, achieving the Company's GHG emissions intensity reductions target and goals could require significant capital expenditures and resources, with the potential that the costs required to achieve such target and goals materially differ from Pembina's original estimates and expectations. In addition, while the intent is to improve efficiency and increase the use of renewable and lower-carbon energy, the shift in resources and focus towards GHG emissions reduction could have a negative impact on Pembina's operating results. The overall final cost of investing in and implementing a GHG emissions intensity reduction strategy and technologies in furtherance of such strategy, and the resultant change in the deployment of the Company's resources and focus, could have a material adverse effect on Pembina's business, financial condition and results of operations.

62 **Pembina Pipeline Corporation 2025 Annual Report** 

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**Risks Relating to Weather Conditions**

Weather conditions (including those associated with climate change) can affect the demand for and price of natural gas and NGL. As a result, changes in weather patterns may affect Pembina's gas processing business. For example, colder winter temperatures generally increase demand for natural gas and NGL used for heating which tends to result in increased throughput volume on the Alliance Pipeline and at the Company's gas processing facilities and higher prices in the processing and storage businesses. Pembina has capacity to handle any such increased volume of throughput and storage at its facilities to meet changes in seasonal demand; however, at any given time, processing and storage capacity is finite.

Weather conditions (including those associated with climate change) may impact Pembina's ability to complete capital projects, repairs or facility turnarounds on time, potentially resulting in delays and increased costs. Weather may also affect access to Pembina's facilities, and the operations and projects of Pembina's customers or shippers, which may impact the supply and/or demand for Pembina's services. With respect to construction activities, in areas where construction can be conducted in non-winter months, Pembina attempts to schedule its construction timetables so as to minimize potential delays due to cold winter weather.

Changes and/or extreme variability in weather patterns, including with respect to the impact on the geophysical environment, as well as increases in the frequency of extreme weather events, such as floods, cyclones, hurricanes, droughts and forest fires, increases the potential risk for Pembina's assets, including operational disruptions, transportation difficulties, supply chain disruptions, employee safety incidents, and damage to assets, which may result in lower revenues, higher costs or project delays.

See also "*Risk Factors – Risks Inherent in Pembina's Business – Environmental Costs and Liabilities*"; and "*Risk Factors – Risks Inherent in Pembina's Business – Reputation*".

**Pembina Pipeline Corporation 2025 Annual Report** 63

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**12. NON-GAAP & OTHER FINANCIAL MEASURES**

Throughout this MD&A, Pembina has disclosed certain financial measures and ratios that are not specified, defined or determined in accordance with GAAP and which are not disclosed in Pembina's financial statements. Non-GAAP financial measures either exclude an amount that is included in, or include an amount that is excluded from, the composition of the most directly comparable financial measure specified, defined and determined in accordance with GAAP. These non-GAAP financial measures and non-GAAP ratios, together with financial measures and ratios specified, defined and determined in accordance with GAAP, are used by management to evaluate the performance and cash flows of Pembina and its businesses and to provide additional useful information respecting Pembina's financial performance and cash flows to investors and analysts.

In this MD&A, Pembina has disclosed the following non-GAAP financial measures and non-GAAP ratios: net revenue, earnings before interest, taxes, depreciation, and amortization ("adjusted EBITDA"), adjusted EBITDA per common share, adjusted EBITDA from equity accounted investees, adjusted cash flow from operating activities and adjusted cash flow from operating activities per common share.

Non-GAAP financial measures and non-GAAP ratios disclosed in this MD&A do not have any standardized meaning under IFRS and may not be comparable to similar financial measures disclosed by other issuers. The financial measures and ratios should not, therefore, be considered in isolation or as a substitute for, or superior to, measures and ratios of Pembina's financial performance, or cash flows specified, defined or determined in accordance with IFRS, including revenue, earnings, share of profit from equity accounted investees and cash flow from operating activities.

Except as otherwise described herein, these non-GAAP financial measures and non-GAAP ratios are calculated on a consistent basis from period to period. Specific reconciling items may only be relevant in certain periods*.*

Below is a description of each non-GAAP financial measure and non-GAAP ratio disclosed in this MD&A, together with, as applicable, disclosure of: the most directly comparable financial measure that is specified, defined and determined in accordance with GAAP to which each non-GAAP financial measure relates; a quantitative reconciliation of each non-GAAP financial measure to such directly comparable GAAP financial measure; the composition of each non-GAAP financial measure and non-GAAP ratio; an explanation of how each non-GAAP financial measure and non-GAAP ratio provides useful information to investors and the additional purposes, if any, for which management uses each non-GAAP financial measure and non-GAAP ratio; and an explanation of the reason for any change in the label or composition of each non-GAAP financial measure and non-GAAP ratio from what was previously disclosed.

64 **Pembina Pipeline Corporation 2025 Annual Report** 

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**Net Revenue**

Net revenue is a non-GAAP financial measure which is defined as total revenue less cost of goods sold. Management believes that net revenue provides investors with a single measure to indicate the margin on sales before non-product operating expenses that is comparable between periods. Management utilizes net revenue to compare consecutive results, to aggregate revenue generated by each of the Company's divisions and to set comparable objectives. The most directly comparable financial measure to net revenue that is specified, defined and determined in accordance with GAAP and disclosed in Pembina's financial statements is revenue.

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Pipelines** | **Pipelines** | **Facilities** | **Facilities** | **Marketing & <br>New Ventures** | **Marketing & <br>New Ventures** | **Corporate & <br>Inter-segment Eliminations** | **Corporate & <br>Inter-segment Eliminations** | **Total** | **Total** |
| **3 Months Ended December 31**<br>*($ millions)* | **Pipelines** | **Pipelines** | **Facilities** | **Facilities** | **Marketing & <br>New Ventures** | **Marketing & <br>New Ventures** | **Corporate & <br>Inter-segment Eliminations** | **Corporate & <br>Inter-segment Eliminations** | **Total** | **Total** |
|  | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 |
| Revenue | **871** | 948 | **326** | 320 | **985** | 1133 | **(269)** | (256) | **1913** | 2145 |
| Cost of goods sold | **14** | 5 | **—** |  | **927** | 919 | **(167)** | (162) | **774** | 762 |
| Net revenue | **857** | 943 | **326** | 320 | **58** | 214 | **(102)** | (94) | **1139** | 1383 |

---

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Pipelines** | **Pipelines** | **Facilities** | **Facilities** | **Marketing & <br>New Ventures** | **Marketing & <br>New Ventures** | **Corporate & <br>Inter-segment Eliminations** | **Corporate & <br>Inter-segment Eliminations** | **Total** | **Total** |
| **12 Months Ended December 31**<br>*($ millions)* | **Pipelines** | **Pipelines** | **Facilities** | **Facilities** | **Marketing & <br>New Ventures** | **Marketing & <br>New Ventures** | **Corporate & <br>Inter-segment Eliminations** | **Corporate & <br>Inter-segment Eliminations** | **Total** | **Total** |
|  | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 |
| Revenue | **3521** | 3386 | **1228** | 1127 | **4065** | 3796 | **(1036)** | (925) | **7778** | 7384 |
| Cost of goods sold | **51** | 40 | **—** |  | **3524** | 3198 | **(674)** | (630) | **2901** | 2608 |
| Net revenue | **3470** | 3346 | **1228** | 1127 | **541** | 598 | **(362)** | (295) | **4877** | 4776 |

---

**Adjusted EBITDA and Adjusted EBITDA per Common Share**

Adjusted EBITDA is a non-GAAP financial measure and is calculated as earnings before net finance costs, income taxes, depreciation and amortization (included in gross profit and general and administrative expense), and unrealized gains or losses from derivative instruments. The exclusion of unrealized gains or losses from derivative instruments eliminates the non-cash impact of such gains or losses.

Adjusted EBITDA also includes adjustments to earnings for non-controlling interest, losses (gains) on disposal of assets, transaction costs incurred in respect of acquisitions, dispositions and restructuring, impairment charges or reversals in respect of goodwill, intangible assets, investments in equity accounted investees and property, plant and equipment, certain non-cash provisions and other amounts not reflective of ongoing operations. These additional adjustments are made to exclude various non-cash and other items that are not reflective of ongoing operations. Following completion of Pembina acquiring a controlling ownership interest in Alliance and Aux Sable on April 1, 2024, Pembina revised the definition of adjusted EBITDA to deduct earnings for the 14.6 percent non-controlling interest in the Aux Sable U.S. operations. Pembina's subsequent acquisition of the remaining interest in Aux Sable's U.S. operations in the third quarter of 2024 resulted in all of Aux Sable's results being included in the adjusted EBITDA calculation beginning on August 1, 2024.

Management believes that adjusted EBITDA provides useful information to investors as it is an important indicator of Pembina's ability to generate liquidity through cash flow from operating activities and equity accounted investees. Management also believes that adjusted EBITDA provides an indicator of operating income generated from capital expenditures, which includes operational finance income and gains from lessor lease arrangements. Adjusted EBITDA is also used by investors and analysts for assessing financial performance and for the purpose of valuing Pembina, including calculating financial and leverage ratios. Management utilizes adjusted EBITDA to set objectives and as a key performance indicator of the Company's success. Pembina presents adjusted EBITDA as management believes it is a measure frequently used by analysts, investors and other stakeholders in evaluating the Company's financial performance. The most directly comparable financial measure to adjusted EBITDA that is specified, defined and determined in accordance with GAAP and disclosed in Pembina's financial statements is earnings.

Adjusted EBITDA per common share is a non-GAAP ratio which is calculated by dividing adjusted EBITDA by the weighted average number of common shares outstanding.

**Pembina Pipeline Corporation 2025 Annual Report** 65

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---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Pipelines** | **Pipelines** | **Facilities** | **Facilities** | **Marketing & <br>New Ventures** | **Marketing & <br>New Ventures** | **Corporate & <br>Inter-segment Eliminations** | **Corporate & <br>Inter-segment Eliminations** | **Income Taxes** | **Income Taxes** | **Total** | **Total** |
| **3 Months Ended December 31**<br>*($ millions, except per share amounts)* | **Pipelines** | **Pipelines** | **Facilities** | **Facilities** | **Marketing & <br>New Ventures** | **Marketing & <br>New Ventures** | **Corporate & <br>Inter-segment Eliminations** | **Corporate & <br>Inter-segment Eliminations** | **Income Taxes** | **Income Taxes** | **Total** | **Total** |
|  | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 |
| Earnings (loss) | **470** | 534 | **178** | 177 | **115** | 245 | **(126)** | (212) | **(148)** | (172) | **489** | 572 |
| Adjustments for: |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Income tax expense |  |  |  |  |  |  |  |  | **148** | 172 | **148** | 172 |
| &nbsp;&nbsp;Adjustments to share of profit (loss) from equity accounted investees | **—** |  | **126** | 136 | **(97)** | (74) | **—** |  |  |  | **29** | 62 |
| &nbsp;&nbsp;Net finance costs | **8** | 5 | **4** | 2 | **1** | 5 | **135** | 151 |  |  | **148** | 163 |
| &nbsp;&nbsp;Depreciation and amortization | **164** | 148 | **57** | 55 | **18** | 17 | **17** | 15 |  |  | **256** | 235 |
| &nbsp;&nbsp;Unrealized loss from derivative instruments | **—** |  | **—** |  | **78** | 41 | **—** |  |  |  | **78** | 41 |
| &nbsp;&nbsp;Transaction and integration costs in respect of acquisitions | **—** |  | **—** |  | **—** |  | **—** | 7 |  |  | **—** | 7 |
| &nbsp;&nbsp;Restructuring costs | **—** |  | **—** |  | **—** |  | **15** |  |  |  | **15** |  |
| &nbsp;&nbsp;(Gain) loss on disposal of assets | **—** | (1) | **—** |  | **1** |  | **(96)** |  |  |  | **(95)** | (1) |
| &nbsp;&nbsp;Other non-cash provisions | **1** |  | **1** | 3 | **—** |  | **5** |  |  |  | **7** | 3 |
| Adjusted EBITDA | **643** | 686 | **366** | 373 | **116** | 234 | **(50)** | (39) | **—** |  | **1075** | 1254 |
| Adjusted EBITDA per common <br>share – basic *(dollars)* |  |  |  |  |  |  |  |  |  |  | **1.85** | 2.16 |

---

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Pipelines** | **Pipelines** | **Facilities** | **Facilities** | **Marketing & <br>New Ventures** | **Marketing & <br>New Ventures** | **Corporate & <br>Inter-segment Eliminations** | **Corporate & <br>Inter-segment Eliminations** | **Income Taxes** | **Income Taxes** | **Total** | **Total** |
| **12 Months Ended December 31**<br>*($ millions, except per share amounts)* | **Pipelines** | **Pipelines** | **Facilities** | **Facilities** | **Marketing & <br>New Ventures** | **Marketing & <br>New Ventures** | **Corporate & <br>Inter-segment Eliminations** | **Corporate & <br>Inter-segment Eliminations** | **Income Taxes** | **Income Taxes** | **Total** | **Total** |
|  | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 |
| Earnings (loss) | **1938** | 1907 | **562** | 666 | **457** | 569 | **(750)** | (1422) | **(513)** | 154 | **1694** | 1874 |
| Adjustments for: |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Income tax expense (recovery) |  |  |  |  |  |  |  |  | **513** | (154) | **513** | (154) |
| &nbsp;&nbsp;Adjustments to share of profit (loss) from equity accounted investees | **3** | 46 | **610** | 486 | **(78)** | (16) | **—** |  |  |  | **535** | 516 |
| &nbsp;&nbsp;Net finance costs | **27** | 24 | **13** | 10 | **8** | 9 | **554** | 518 |  |  | **602** | 561 |
| &nbsp;&nbsp;Depreciation and amortization | **643** | 560 | **209** | 183 | **71** | 64 | **64** | 55 |  |  | **987** | 862 |
| &nbsp;&nbsp;Unrealized (gain) loss from derivative instruments | **—** |  | **—** |  | **37** | 170 | **—** |  |  |  | **37** | 170 |
| &nbsp;&nbsp;Loss on acquisition | **—** |  | **—** |  | **—** |  | **—** | 616 |  |  | **—** | 616 |
| &nbsp;&nbsp;Derecognition of insurance contract provision | **—** |  | **—** |  | **—** | (34) | **—** |  |  |  | **—** | (34) |
| &nbsp;&nbsp;Transaction and integration costs in respect of acquisition | **—** |  | **—** |  | **—** |  | **5** | 25 |  |  | **5** | 25 |
| &nbsp;&nbsp;Restructuring costs | **—** |  | **—** |  | **—** |  | **15** |  |  |  | **15** |  |
| &nbsp;&nbsp;Non-controlling interest<sup>(1)</sup> | **—** |  | **—** |  | **—** | (12) | **—** |  |  |  | **—** | (12) |
| &nbsp;&nbsp;(Gain) loss on disposal of assets | **(18)** | (13) | **—** | (1) | **1** | (7) | **(96)** |  |  |  | **(113)** | (21) |
| &nbsp;&nbsp;Other non-cash provisions | **3** | 9 | **2** | 3 | **3** | (19) | **6** | 12 |  |  | **14** | 5 |
| Adjusted EBITDA | **2596** | 2533 | **1396** | 1347 | **499** | 724 | **(202)** | (196) | **—** |  | **4289** | 4408 |
| Adjusted EBITDA per common <br>share – basic *(dollars)* |  |  |  |  |  |  |  |  |  |  | **7.38** | 7.69 |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Presented net of adjusting items.

66 **Pembina Pipeline Corporation 2025 Annual Report** 

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**Adjusted EBITDA from Equity Accounted Investees** 

In accordance with IFRS, Pembina's joint ventures are accounted for using equity accounting. Under equity accounting, the assets and liabilities of the investment are presented net in a single line item in the Consolidated Statement of Financial Position, "Investments in Equity Accounted Investees". Earnings from investments in equity accounted investees are recognized in a single line item in the Consolidated Statement of Earnings and Comprehensive Income "Share of Profit from Equity Accounted Investees". The adjustments made to earnings, in adjusted EBITDA above, are also made to share of profit from investments in equity accounted investees. Cash contributions and distributions from investments in equity accounted investees represent Pembina's share paid and received in the period to and from the investments in equity accounted investees.

To assist in understanding and evaluating the performance of these investments, Pembina is supplementing the IFRS disclosure with non-GAAP proportionate consolidation of Pembina's interest in the investments in equity accounted investees. Pembina's proportionate interest in equity accounted investees has been included in adjusted EBITDA.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Pipelines** | **Pipelines** | **Facilities** | **Facilities** | **Marketing & <br>New Ventures** | **Marketing & <br>New Ventures** | **Total** | **Total** |
| **3 Months Ended December 31**<br>*($ millions)* | **Pipelines** | **Pipelines** | **Facilities** | **Facilities** | **Marketing & <br>New Ventures** | **Marketing & <br>New Ventures** | **Total** | **Total** |
|  | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 |
| Share of profit from equity accounted investees | **1** |  | **74** | 59 | **96** | 74 | **171** | 133 |
| Adjustments to share of profit (loss) from equity accounted investees: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Net finance costs (income) | **—** |  | **32** | 37 | **(35)** | (74) | **(3)** | (37) |
| &nbsp;&nbsp;Income tax expense | **—** |  | **27** | 23 | **—** |  | **27** | 23 |
| &nbsp;&nbsp;Depreciation and amortization | **—** |  | **63** | 66 | **—** |  | **63** | 66 |
| &nbsp;&nbsp;Unrealized loss (gain) on commodity-related derivative financial instruments | **—** |  | **3** | (3) | **—** |  | **3** | (3) |
| &nbsp;&nbsp;Gain on disposal of assets | **—** |  | **—** |  | **(62)** |  | **(62)** |  |
| &nbsp;&nbsp;Transaction costs incurred in respect of acquisitions and non-cash provisions | **—** |  | **1** | 13 | **—** |  | **1** | 13 |
| Total adjustments to share of profit (loss) from equity accounted investees | **—** |  | **126** | 136 | **(97)** | (74) | **29** | 62 |
| Adjusted EBITDA from equity accounted investees | **1** |  | **200** | 195 | **(1)** |  | **200** | 195 |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Pipelines** | **Pipelines** | **Facilities** | **Facilities** | **Marketing & <br>New Ventures** | **Marketing & <br>New Ventures** | **Total** | **Total** |
| **12 Months Ended December 31**<br>*($ millions)* | **Pipelines** | **Pipelines** | **Facilities** | **Facilities** | **Marketing & <br>New Ventures** | **Marketing & <br>New Ventures** | **Total** | **Total** |
|  | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 |
| Share of profit from equity accounted investees | **1** | 42 | **134** | 231 | **74** | 55 | **209** | 328 |
| Adjustments to share of profit (loss) from equity accounted investees: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Net finance costs (income) | **1** | 7 | **113** | 175 | **(16)** | (23) | **98** | 159 |
| &nbsp;&nbsp;Income tax expense | **—** |  | **46** | 73 | **—** |  | **46** | 73 |
| &nbsp;&nbsp;Depreciation and amortization | **2** | 39 | **254** | 221 | **—** | 7 | **256** | 267 |
| &nbsp;&nbsp;Unrealized loss on commodity-related derivative financial instruments | **—** |  | **4** | 2 | **—** |  | **4** | 2 |
| &nbsp;&nbsp;Gain on disposal of assets | **—** |  | **(2)** |  | **(62)** |  | **(64)** |  |
| &nbsp;&nbsp;Impairment expense | **—** |  | **193** |  | **—** |  | **193** |  |
| &nbsp;&nbsp;Other non-cash provisions | **—** |  | **2** | 15 | **—** |  | **2** | 15 |
| Total adjustments to share of profit (loss) from equity accounted investees | **3** | 46 | **610** | 486 | **(78)** | (16) | **535** | 516 |
| Adjusted EBITDA from equity accounted investees | **4** | 88 | **744** | 717 | **(4)** | 39 | **744** | 844 |

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**Pembina Pipeline Corporation 2025 Annual Report** 67

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**Adjusted Cash Flow from Operating Activities and Adjusted Cash Flow from Operating Activities per Common Share**

Adjusted cash flow from operating activities is a non-GAAP measure which is defined as cash flow from operating activities adjusting for the change in non-cash operating working capital, adjusting for current tax and share-based compensation payments, and deducting distributions to non-controlling interests and preferred share dividends paid. Adjusted cash flow from operating activities deducts distributions to non-controlling interest and preferred share dividends paid because they are not attributable to common shareholders. The calculation has been modified to exclude current tax expense and accrued share-based payment expense, and to include the impact of cash paid for taxes and share-based compensation, as it allows management to better assess the obligations discussed below.

Management believes that adjusted cash flow from operating activities provides comparable information to investors for assessing financial performance during each reporting period. Management utilizes adjusted cash flow from operating activities to set objectives and as a key performance indicator of the Company's ability to meet interest obligations, dividend payments and other commitments. Adjusted cash flow from operating activities per common share is a non-GAAP financial ratio which is calculated by dividing adjusted cash flow from operating activities by the weighted average number of common shares outstanding.

Following completion of Pembina acquiring a controlling ownership interest in Alliance and Aux Sable on April 1, 2024, Pembina revised the definition of adjusted cash flow from operating activities to deduct distributions related to non-controlling interest in the Aux Sable U.S. operations. On August 1, 2024, Pembina acquired the remaining interest in Aux Sable's U.S. operations.

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| | | | | |
|:---|:---|:---|:---|:---|
| | **3 Months Ended December 31** | **3 Months Ended December 31** | **12 Months Ended December 31** | **12 Months Ended December 31** |
| *($ millions, except per share amounts)* | **2025** | 2024 | **2025** | 2024 |
| Cash flow from operating activities | **861** | 902 | **3301** | 3214 |
| Cash flow from operating activities per common share – basic *(dollars)* | **1.48** | 1.55 | **5.68** | 5.61 |
| Add (deduct): |  |  |  |  |
| &nbsp;&nbsp;Change in non-cash operating working capital | **(164)** | 73 | **(221)** | 43 |
| &nbsp;&nbsp;Current tax expense | **(94)** | (73) | **(432)** | (261) |
| &nbsp;&nbsp;Taxes paid, net of foreign exchange | **189** | 52 | **346** | 404 |
| &nbsp;&nbsp;Accrued share-based payment expense | **(29)** | (3) | **(95)** | (82) |
| &nbsp;&nbsp;Share-based compensation payment | **—** | 5 | **89** | 91 |
| &nbsp;&nbsp;Preferred share dividends paid | **(32)** | (34) | **(134)** | (132) |
| &nbsp;&nbsp;Distributions to non-controlling interest | **—** |  | **—** | (12) |
| Adjusted cash flow from operating activities | **731** | 922 | **2854** | 3265 |
| Adjusted cash flow from operating activities per common share – basic *(dollars)* | **1.26** | 1.59 | **4.91** | 5.70 |

---

68 **Pembina Pipeline Corporation 2025 Annual Report** 

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**13. OTHER**

**Selected Annual Financial Information**

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| | | | |
|:---|:---|:---|:---|
| *($ millions, except where noted)* | **2025** | 2024 | 2023<sup>(1)</sup> |
| Revenue | **7778** | 7384 | 6331 |
| Earnings | **1694** | 1874 | 1776 |
| &nbsp;&nbsp;&nbsp;Per common share - basic *(dollars)* | **2.67** | 3.00 | 3.00 |
| &nbsp;&nbsp;&nbsp;Per common share - diluted *(dollars)* | **2.66** | 3.00 | 2.99 |
| Total assets | **35555** | 35967 | 32618 |
| Total non-current liabilities | **16719** | 15549 | 13584 |
| Common share dividends declared *($ per share)* | **2.82** | 2.74 | 2.66 |
| Preferred share dividends declared | **134** | 132 | 120 |

---

<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Comparative 2023 period has been adjusted. Refer to Pembina's audited consolidated financial statements as at and for the year ended December 31, 2024.

See the "Quarterly Financial Information" section for the factors impacting the years ended December 31, 2025 and 2024. The increase in revenues, earnings and earnings per common share (basic and diluted) between 2024 and 2023 was largely due to the net impacts of Pembina acquiring a controlling interest in Alliance and Aux Sable on April 1, 2024, combined with no similar impact in 2024 of the Northern Pipeline system outage and the wildfires in Alberta and British Columbia that affected 2023. These factors were partially offset by no similar impairment reversal to that recognized in 2023 related to the reactivation of the Nipisi Pipeline, combined with higher net finance costs.

**Risk Management** 

Pembina's risk management strategies, policies and limits, ensure risks and exposures are aligned to its business strategy and risk tolerance. Pembina's Board of Directors is responsible for providing risk management oversight at Pembina and oversees how management monitors compliance with Pembina's risk management policies and procedures and reviews the adequacy of this risk framework in relation to the risks faced by Pembina.

Pembina has exposure to counterparty credit risk, liquidity risk and market risk. Pembina utilizes derivative instruments to stabilize the results of its business and, as at December 31, 2025, the Company has entered into certain financial derivative contracts in order to manage commodity price, cost of power, and foreign exchange risk. Pembina has also entered into power purchase agreements to secure cost-competitive renewable energy, fix the price for a portion of the power Pembina consumes, and reduce its emissions.

**Financial Instruments**

*Fair Values*

The fair value of financial instruments utilizes a variety of valuation inputs. When measuring fair value, Pembina uses observable market data to the greatest extent possible. Depending on the nature of these valuation inputs, financial instruments are categorized as follows:

**a. Level 1**

Level 1 fair values are based on inputs that are unadjusted observable quoted prices from active markets for identical assets or liabilities as at the measurement date.

**Pembina Pipeline Corporation 2025 Annual Report** 69

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**b. Level 2**

Level 2 fair values are based on inputs, other than quoted market prices included in Level 1, that are either directly or indirectly observable. Level 2 fair value inputs include quoted forward market prices, time value, and broker quotes that are observable for the duration of the financial instrument's contractual term. These inputs are often adjusted for factors specific to the asset or liability, such as, location differentials and credit risk.

Financial instruments that utilize Level 2 fair valuation inputs include derivatives arising from physical commodity forward contracts, commodity swaps and options, and forward interest rate and foreign-exchange swaps. In addition, Pembina's loans and borrowings utilize Level 2 fair valuation inputs, whereby the valuation technique is based on discounted future interest and principal payments using the current market interest rates of instruments with similar terms.

**c. Level 3**

Level 3 fair values utilize inputs that are not based on observable market data. Rather, various valuation techniques are used to develop inputs.

Financial instruments that utilize Level 3 fair valuation inputs include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.**Power Purchase Agreements:** Pembina's long-term power purchase agreements have given rise to embedded derivative instruments. The fair value of these embedded derivatives are measured using discounted projected cash flow models. The key unobservable inputs in the valuation include forecasted power prices from EDC Associates Ltd. and management estimates of renewable wind power pricing discounts. The power purchase agreements have a maturity date ranging from 2040 to 2041 and a notional that ranges from 100 MW to 105 MW of renewable energy capacity. The forecasted power prices, before applying the forecasted wind power pricing discount, range from $52.54 per MWh to $77.36 per MWh (2024: $46.69 MWh to $76.03 MWh). Lastly, the forecasted wind power pricing discount applied ranges from 50 percent to 67 percent (2024: 42 percent to 68 percent).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii.**Cedar LNG Capacity Commercial Arrangement:** Pembina's provision of Cedar LNG transportation and liquefaction capacity to a third-party customer has given rise to an embedded derivative instrument with option features. The fair-value of this embedded derivative is measured using Black-Scholes option modelling, using a notional of 1.0 million tonnes of LNG per annum for a term of 20 years. The term commences when Cedar LNG becomes commercially operational. The key unobservable inputs in the valuation include: (a) the forecasted spread between the forward global Japan Korea Marker LNG index and the forward AECO natural gas index; and, (b) the forecasted volatility of such commodity prices. The forecasted spread between these market pricing indices ranges from $6.32 per MMBtu to $9.03 per MMBtu (in U.S. dollars). Lastly, the forecasted average volatility of such commodity prices is 18 percent.

The fair valuation of embedded derivative instruments is judged to be a significant management estimate. The respective assumptions and inputs are susceptible to change and may differ from actual future developments. This estimation uncertainty could materially impact the quantified fair value; and therefore, the gains and losses on derivative financial instruments.

70 **Pembina Pipeline Corporation 2025 Annual Report** 

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The carrying values of financial assets and liabilities in relation to their respective fair values, together with their appropriate fair value categorization are illustrated in the table below. Certain other non-derivative financial instruments measured at amortized cost, including cash and cash equivalents, trade receivables and other, trade payables and other, and other liabilities have been excluded since their carrying values are judged to approximate their fair values due to their nature and short maturity. These instruments would be categorized as Level 2 in the fair value hierarchy.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 | 2024 |
| **As at December 31** | **Carrying<br>Value** | **Fair Value** | **Fair Value** | **Fair Value** | Carrying<br>Value | Fair Value | Fair Value | Fair Value |
| *($ millions)* | **Carrying<br>Value** | **Level 1** | **Level 2** | **Level 3** | Carrying<br>Value | Level 1 | Level 2 | Level 3 |
| **Financial assets carried at fair value** |  |  |  |  |  |  |  |  |
| Derivative financial instruments<sup>(1)</sup> | **128** | **—** | **14** | **114** | 13 |  | 13 |  |
| **Financial liabilities carried at fair value** |  |  |  |  |  |  |  |  |
| Derivative financial instruments<sup>(1)</sup> | **138** | **—** | **9** | **129** | 159 |  | 42 | 117 |
| **Financial liabilities carried at amortized cost** |  |  |  |  |  |  |  |  |
| Long-term debt<sup>(2)</sup> | **12688** | **—** | **12708** | **—** | 12656 |  | 12649 |  |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;At December 31, 2025, all derivative financial instruments are carried at fair value through earnings. At December 31, 2024, all derivative financial instruments are carried at fair value through earnings, except for $5 million in interest rate derivative financial assets that were designated as cash flow hedge and matured on March 31, 2025.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Carrying value of current and non-current balances. Includes loans and borrowings and subordinated notes.

*Gains and Losses from Derivative Instruments* 

---

| | | |
|:---|:---|:---|
| **For the years ended December 31** | | |
| *($ millions)* | **2025** | 2024 |
| **Derivative instruments held at fair value through earnings** |  |  |
| *Realized gain recorded in revenue from risk management and other derivative contracts* |  |  |
| &nbsp;&nbsp;Commodity-related gain | **(133)** | (241) |
| *Unrealized (gain) loss recorded in revenue from risk management and other derivative contracts* |  |  |
| &nbsp;&nbsp;&nbsp;Commodity-related (gain) loss | **(25)** | 170 |
| &nbsp;&nbsp;&nbsp;Cedar LNG capacity commercial arrangement embedded derivative loss | **62** |  |
| **Derivative instruments in hedging relationships** |  |  |
| &nbsp;&nbsp;Interest rate loss recorded in other comprehensive income<sup>(1)</sup> | **4** | 10 |

---

<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Unrealized losses or gains for designated cash flow hedges are recognized in impact of hedging activities in the Consolidated Statements of Earnings and Comprehensive Income, with realized losses or gains being reclassified to net finance costs. The movement in other comprehensive income relates to realized losses on interest rate forward swaps, which matured on March 31, 2025. A gain of $4 million was recognized during the first quarter of 2025, prior to the maturity date, that was reclassified to net finance costs (2024: $17 million realized gain). No losses or gains have been recognized in net income relating to discontinued cash flow hedges.

**Alliance Negotiated Settlement**

On September 15, 2025, the CER approved the negotiated settlement between Alliance Pipeline Limited Partnership ("Alliance") and shippers and interested parties on the Canadian portion of the Alliance Pipeline. The Alliance Negotiated Settlement includes a revised toll schedule, effective November 1, 2025, which is expected to reduce long-term firm tolls on a volume weighted average basis and introduces a 10-year toll option. The agreement also includes a revenue-sharing mechanism for seasonal and interruptible transportation services and provides shippers with a one-time term extension option. Pembina anticipates the Alliance Negotiated Settlement to result in an annual reduction in long-term firm service revenue over the next 10 years, plus impacts from the new revenue-sharing provision, which will depend on future commodity prices. The settlement outcome approved by the CER was within the expected range of outcomes used in the impairment test performed in the first quarter of 2025.

**Tax Regulations**

The One Big Beautiful Bill Act was enacted in the United States on July 4, 2025. Pembina has assessed the impact of this legislation and does not anticipate any material impact to Pembina.

**Pembina Pipeline Corporation 2025 Annual Report** 71

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**Pension Plan**

Pembina maintains defined contribution plans and defined benefit pension plans for employees and retirees. The defined benefit plans include a funded registered plan for all qualified employees and an unfunded supplemental retirement plan for those employees affected by the Canada Revenue Agency maximum pension limits. At the end of 2025, the pension plans carried a net asset of $37 million (2024: net asset of $8 million). At December 31, 2025, plan obligations amounted to $294 million (2024: $284 million) compared to plan assets of $331 million (2024: $292 million). In 2025, the pension plans' expense was $31 million (2024: $29 million). Pembina's contributions to the pension plans totaled $17 million in 2025 (2024: $18 million).

**Disclosure Controls and Procedures and Internal Control over Financial Reporting** 

**Disclosure Controls and Procedures**

Pembina maintains disclosure controls and procedures ("DC&P") designed to provide reasonable assurance that information required to be disclosed in Pembina's annual filings, interim filings and other reports filed or submitted by it under applicable securities laws is recorded, processed, summarized and reported accurately and in the time periods specified under such securities laws, and include controls and procedures designed to ensure such information is accumulated and communicated to Pembina's management, including its certifying officers, as appropriate to allow timely decisions regarding required disclosure. As at December 31, 2025, an evaluation of the effectiveness of the design and operation of Pembina's DC&P, as defined in Rule 13a – 15(e) and 15(d) – 15(e) under the United States *Securities Exchange Act of 1934*, as amended (the "Exchange Act") and National Instrument 52-109 *Certification of Disclosure in Issuer's Annual and Interim Filings* ("NI 52-109"), was carried out by management, including the President and Chief Executive Officer ("CEO") and the Chief Financial Officer ("CFO"). Based on the evaluation, the CEO and CFO have concluded that the design and operation of Pembina's DC&P were effective as at December 31, 2025 to ensure that material information relating to Pembina is made known to the CEO and CFO by others.

It should be noted that while the CEO and CFO believe that Pembina's DC&P provide a reasonable level of assurance that they are effective, they do not expect that Pembina's DC&P will prevent all errors or fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

**Management's Annual Report on Internal Control over Financial Reporting**

Pembina maintains internal control over financial reporting which is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a – 15(e) and 15(d) – 15(e) under the Exchange Act and NI 52-109*.*

Under the supervision and with the participation of our CEO and our CFO, management has conducted an evaluation of the effectiveness of our internal control over financial reporting, as at December 31, 2025 based on the framework set forth in Internal Control – Integrated Framework issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on management's assessment as at December 31, 2025, the CEO and CFO have concluded that Pembina's internal control over financial reporting is effective.

Due to its inherent limitations, internal control over financial reporting is not intended to 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 at a specific date, and continued effectiveness in future periods is subject to the risks that controls may become inadequate.

72 **Pembina Pipeline Corporation 2025 Annual Report** 

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The effectiveness of internal control over financial reporting as at December 31, 2025 was audited by KPMG LLP, an independent registered public accounting firm, as stated in their Report of Independent Registered Public Accounting Firm, which is included in the Consolidated Financial Statements.

**Changes in Internal Control over Financial Reporting**

Pembina previously excluded controls, policies and procedures associated with the Alliance, Aux Sable, and NRGreen joint ventures (the "Acquirees") controlling interests in which were acquired on April 1, 2024, from the Company's evaluation of the effectiveness of its internal control over financial reporting, as permitted under applicable securities laws in Canada and the United States. Effective April 1, 2025, the controls, policies and procedures of the Acquirees came into scope of Pembina's internal control over financial reporting and have been incorporated into Pembina's evaluation of the effectiveness thereof. Other than the integration of the controls, policies and procedures of the Acquirees in the second quarter of 2025, there has been no change in Pembina's internal control over financial reporting that occurred during the year ended December 31, 2025 that has materially affected, or are reasonably likely to materially affect, Pembina's internal control over financial reporting.

**Pembina Pipeline Corporation 2025 Annual Report** 73

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**14. ABBREVIATIONS**

The following is a list of abbreviations that may be used in this MD&A:

---

| | |
|:---|:---|
| **Other** | |
| AECO | Alberta Energy Company benchmark price for natural gas |
| B.C. | British Columbia |
| GAAP | Canadian generally accepted accounting principles |
| IFRS | International Financial Reporting Standards |
| NGL | Natural gas liquids |
| LNG | Liquefied natural gas |
| U.S. | United States |
| WCSB | Western Canadian Sedimentary Basin |
| Deep cut | Ethane-plus capacity extraction gas processing capabilities |
| Shallow cut | Sweet gas processing with propane and/or condensate-plus extraction capabilities |
| Volumes | Volumes for Pipelines and Facilities are revenue volumes, defined as physical volumes plus volumes from take-or-pay commitments. Volumes for Marketing & New Ventures are marketed crude oil and NGL volumes. Volumes are stated in mboe/d, with natural gas volumes converted to mboe/d from MMcf/d at a 6:1 ratio, and also include revenue volumes from Pembina's equity accounted investees. |
| Frac spreads | The margin between the value of extracted NGLs and the cost of the natural gas used to produce them. |

---

---

| | | | |
|:---|:---|:---|:---|
| **Measurement** | | | |
| bpd | barrels per day | mtpa | million tonnes per annum |
| mbbls | thousands of barrels | MMcf/d | millions of cubic feet per day |
| mbpd | thousands of barrels per day | MMBtu | million British thermal units |
| mmbpd | millions of barrels per day | bcf/d | billions of cubic feet per day |
| mmbbls | millions of barrels | km | kilometer |
| mboe/d | thousands of barrels of oil equivalent per day | MW | Megawatt |
| mmboe/d | millions of barrels of oil equivalent per day | MWh | Megawatt hour |

---

---

| | |
|:---|:---|
| **Regulators & Acts** | |
| ABCA | *Business Corporations Act* (Alberta) |
| AER | Alberta Energy Regulator |
| BCEAO | British Columbia Environmental Assessment Office |
| BCER | British Columbia Energy Regulator |
| BCUC | British Columbia Utilities Commission |
| CER | Canadian Energy Regulator |
| FERC | United States Federal Energy Regulatory Commission |
| GGPPA | Greenhouse Gas Pollution Pricing Act (Canada) |
| ICA | *Interstate Commerce Act of 1887* (United States) |
| NGA | *Natural Gas Act of 1938* (United States) |
| OPEC | Organization of the Petroleum Exporting Countries |
| PHMSA | Pipeline and Hazardous Material Safety Administration |
| IAAC | Impact Assessment Agency of Canada |

---

74 **Pembina Pipeline Corporation 2025 Annual Report** 

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---

| | |
|:---|:---|
| **Investments in Equity Accounted Investees** | |
| ***Pipelines:*** | |
| Grand Valley | 75 percent interest in Grand Valley 1 Limited Partnership wind farm |
| Alliance | Prior to the completion of Pembina acquiring a controlling ownership interest in Alliance on April 1, 2024, Pembina owned a 50 percent interest in Alliance Pipeline Limited Partnership, Alliance Pipeline L.P., and NRGreen Power Limited Partnership |
| ***Facilities:*** |  |
| PGI | 60 percent interest in Pembina Gas Infrastructure Inc., a premier gas processing entity in western Canada serving customers throughout the Montney and Duvernay trends from central Alberta to northeast British Columbia |
| Fort Corp | 50 percent interest in Fort Saskatchewan Ethylene Storage Limited Partnership and Fort Saskatchewan Ethylene Storage Corporation |
| ***Marketing & New Ventures:*** |  |
| Cedar LNG | 49.9 percent interest in Cedar LNG Partners LP and the proposed floating LNG facility in Kitimat, British Columbia, Canada |
| ACG | 50 percent interest in Alberta Carbon Grid Heartland Limited Partnership and the proposed Heartland carbon dioxide transportation and sequestration system.  |
| Greenlight | 50 percent interest in the Greenlight Electricity Centre Limited Partnership, which is developing a gas-fired combined cycle power generation facility to be located in Alberta's Industrial Heartland. |
| Aux Sable | Prior to the completion of Pembina acquiring a controlling ownership interest in Aux Sable on April 1, 2024, Pembina owned an ownership interest of an approximate 42.7 percent in Aux Sable U.S. and 50 percent in Aux Sable Canada, which includes an NGL fractionation facility and gas processing capacity near Chicago, Illinois and other natural gas and NGL processing facilities, logistics and distribution assets in the U.S. and Canada, and transportation contracts on Alliance. |

---

Readers are referred to the AIF for the year ended December 31, 2025 for additional descriptions, which is available at www.sedarplus.ca, www.sec.gov and through Pembina's website at www.pembina.com.

**Pembina Pipeline Corporation 2025 Annual Report** 75

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**15. FORWARD-LOOKING STATEMENTS & INFORMATION**

In the interest of providing Pembina's security holders and potential investors with information regarding Pembina, including management's assessment of the Company's future plans and operations, certain statements contained in this MD&A constitute forward-looking statements or forward-looking information (collectively, "forward-looking statements"). Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "could", "would", "believe", "plan", "intend", "design", "target", "undertake", "view", "indicate", "maintain", "explore", "entail", "schedule", "objective", "strategy", "likely", "potential", "outlook", "aim", "purpose", "goal" and similar expressions suggesting future events or future performance.

By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Pembina believes the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this MD&A should not be unduly relied upon. These forward-looking statements speak only as of the date of this MD&A.

In particular, this MD&A contains forward-looking statements pertaining to the following:

• future levels and sustainability of cash dividends that Pembina intends to pay to its shareholders and anticipated dividend payment dates;

• planning, construction, locations, capital expenditure and funding estimates, schedules, regulatory and environmental applications and anticipated approvals, expected capacity, incremental volumes, contractual arrangements, in-service dates, sources of product, activities, benefits and operations with respect to new construction of, or expansions on existing, pipelines, systems, gas services facilities, processing and fractionation facilities, terminalling, storage and hub facilities and other facilities or energy infrastructure, as well as the impact of Pembina's new projects on its future financial performance;

• future pipeline, processing, fractionation, and storage facility and system operations;

• treatment under existing and proposed governmental laws, policies and regulations, including those relating to taxes, the environmental, tariffs and project assessments;

• potential changes or amendments to existing or proposed governmental laws, policies and regulations;

• Pembina's strategy and the development and expected timing of new business initiatives and growth opportunities and the impact thereof;

• increased processing capacity and fractionation capacity due to increased oil and gas industry activity and new connections and other initiatives on Pembina's pipelines and at Pembina's facilities;

• expected future cash flows and the sufficiency thereof, financial strength, sources of and access to funds, future contractual obligations, future financing options, availability of capital for capital expenditures, operating obligations, debt maturities, letters of credit and the use of proceeds from financings;

• Pembina's capital structure, including the sufficiency of the amount of leverage employed therein and future actions that may be taken with respect thereto, including expectations regarding the repurchase or redemption of common shares or other securities, repayments of existing debt, new borrowings, equity or hybrid securities issuances and the timing thereof;

• potential actions undertaken by Pembina to mitigate counterparty risk;

• tolls and tariffs, and processing, transportation, fractionation, storage and services commitments and contracts;

• the outcomes and effectiveness of Pembina's DC&P and ICFR;

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

• the development, in-service dates and anticipated benefits of Pembina's new projects and developments, including RFS IV, the Wapiti Expansion, the K3 Cogeneration Facility, the Taylor-to-Gordondale Expansion, the Fox Creek-to-Namao Expansion, Birch-to-Taylor Expansion, Prince Rupert Terminal Optimization, the Greenlight Electricity Centre and the Cedar LNG Project, including the timing thereof and certain costs related thereto;

• expectations in respect of PGI's infrastructure development commitments, including the amounts and timing thereof;

• the Lator Infrastructure, including the anticipated amount of funding by PGI in the first phase and expected startup date;

• the expected in-service date of the North Gold Creek Battery;

• the expected costs, timing and impact of the Alliance Negotiated Settlement; and

• the impact of current and future market conditions on Pembina.

Various factors or assumptions are typically applied by Pembina in drawing conclusions or making the forecasts, projections, predictions or estimations set out in forward-looking statements based on information currently available to Pembina. These factors and assumptions include, but are not limited to:

• oil and gas industry exploration and development activity levels and the geographic region of such activity;

• the success of Pembina's operations;

• prevailing commodity prices, interest rates, carbon prices, tax rates, exchange rates and inflation rates;

• the ability of Pembina to maintain current credit ratings;

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

• future operating costs, including geotechnical and integrity costs being consistent with historical costs;

• oil and gas industry compensation levels remaining consistent with historical levels;

• in respect of current developments, expansions, planned capital expenditures, completion dates and capacity expectations: that third parties will provide any necessary support; that any third-party projects relating to Pembina's growth projects will be sanctioned and completed as expected; that any required commercial agreements can be reached; that all required regulatory and environmental approvals can be obtained on acceptable terms in a timely manner; that there are no supply chain disruptions impacting Pembina's ability to obtain required equipment, materials or labour; that counterparties will comply with contracts in a timely manner; that there are no unforeseen events preventing the performance of contracts or the completion of the relevant facilities, and that there are no unforeseen material costs relating to the facilities which are not recoverable from customers;

• in respect of the stability of Pembina's dividends: prevailing commodity prices, margins and exchange rates; that Pembina's future results of operations will be consistent with past performance and management expectations in relation thereto; the continued availability of capital at attractive prices to fund future capital requirements relating to existing assets and projects, including but not limited to future capital expenditures relating to expansion, upgrades and maintenance shutdowns; the success of growth projects; future operating costs; that counterparties to agreements will continue to perform their obligations in a timely manner; that there are no unforeseen events preventing the performance of contracts; and that there are no unforeseen material construction or other costs related to current growth projects; current operations or the repayment or refinancing of existing debt as it becomes due;

• the inputs used by Pembina's management in the fair valuation of embedded derivative instruments remaining consistent;

• prevailing regulatory, tax and environmental laws and regulations and tax pool utilization; and

• the amount of future liabilities relating to lawsuits and environmental incidents and the availability of coverage under Pembina's insurance policies (including in respect of Pembina's business interruption insurance policy).

The actual results of Pembina could differ materially from those anticipated in these forward-looking statements as a result of the material risk factors set forth below:

• the regulatory environment and decisions, including the outcome of regulatory hearings, and Indigenous and landowner consultation requirements;

• the impact of competitive entities and pricing;

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

• labour and material shortages;

• reliance on key relationships and agreements and the outcome of stakeholder engagement;

• the strength and operations of the oil and natural gas production industry and related commodity prices;

• non-performance or default by counterparties to agreements which Pembina or one or more of its subsidiaries has entered into in respect of its business;

• actions by joint venture partners or other partners which hold interests in certain of Pembina's assets;

• actions by governmental or regulatory authorities including changes in tax laws and treatment, the imposition of new tariffs or other changes in international trade policies or relations, changes in royalty rates, regulatory decisions, changes in regulatory processes or increased environmental regulation;

• fluctuations in operating results;

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

• constraints on, or the unavailability of adequate infrastructure;

• the political environment and public opinion in North America and elsewhere, including changes in trade relations between Canada and the U.S.;

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

• adverse changes in credit ratings;

• counterparty credit risk;

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

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

• natural catastrophes; and

• the other factors discussed under "Risk Factors" herein and in the AIF for the year ended December 31, 2025, which are available at www.sedarplus.ca, www.sec.gov and through Pembina's website at www.pembina.com.

These factors should not be construed as exhaustive. Unless required by law, Pembina does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Management approved the 2026 capital expenditure guidance contained herein as of the date of this MD&A. The purpose of the 2026 capital expenditure guidance is to assist readers in understanding Pembina's expected future capital expenditures, and this information may not be appropriate for other purposes. Any forward-looking statements contained herein are expressly qualified by this cautionary statement.

76 **Pembina Pipeline Corporation 2025 Annual Report** 

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---

| | |
|:---|:---|
| **CONSOLIDATED FINANCIAL STATEMENTS AND NOTES** | **CONSOLIDATED FINANCIAL STATEMENTS AND NOTES** |
| **Table of Contents** | |
| [CONSOLIDATED STATEMENT OF FINANCIAL POSITION](#ie712fa7e1bb04f279f6526094cc7ef36_304) | [85](#ie712fa7e1bb04f279f6526094cc7ef36_304) |
| [CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME](#ie712fa7e1bb04f279f6526094cc7ef36_307) | [86](#ie712fa7e1bb04f279f6526094cc7ef36_307) |
| [CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY](#ie712fa7e1bb04f279f6526094cc7ef36_310) | [87](#ie712fa7e1bb04f279f6526094cc7ef36_310) |
| [CONSOLIDATED STATEMENTS OF CASH FLOWS](#ie712fa7e1bb04f279f6526094cc7ef36_313) | [88](#ie712fa7e1bb04f279f6526094cc7ef36_313) |
| [NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS](#ie712fa7e1bb04f279f6526094cc7ef36_316) | [89](#ie712fa7e1bb04f279f6526094cc7ef36_319) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[1. REPORTING ENTITY](#ie712fa7e1bb04f279f6526094cc7ef36_319) | [89](#ie712fa7e1bb04f279f6526094cc7ef36_319) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[2. BASIS OF PREPARATION](#ie712fa7e1bb04f279f6526094cc7ef36_697) | [89](#ie712fa7e1bb04f279f6526094cc7ef36_697) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[3. MATERIAL ACCOUNTING POLICIES](#ie712fa7e1bb04f279f6526094cc7ef36_703) | [91](#ie712fa7e1bb04f279f6526094cc7ef36_703) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4[. ACQUISITION](#ie712fa7e1bb04f279f6526094cc7ef36_328) | [102](#ie712fa7e1bb04f279f6526094cc7ef36_328) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5[. OPERATING SEGMENTS](#ie712fa7e1bb04f279f6526094cc7ef36_331) | [103](#ie712fa7e1bb04f279f6526094cc7ef36_331) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6[. TRADE RECEIVABLES AND OTHER](#ie712fa7e1bb04f279f6526094cc7ef36_727) | [104](#ie712fa7e1bb04f279f6526094cc7ef36_727) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7[. INVENTORY](#ie712fa7e1bb04f279f6526094cc7ef36_730) | [104](#ie712fa7e1bb04f279f6526094cc7ef36_730) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8[. PROPERTY, PLANT AND EQUIPMENT](#ie712fa7e1bb04f279f6526094cc7ef36_343) | [105](#ie712fa7e1bb04f279f6526094cc7ef36_343) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9[. INTANGIBLE ASSETS AND GOODWILL](#ie712fa7e1bb04f279f6526094cc7ef36_349) | [107](#ie712fa7e1bb04f279f6526094cc7ef36_349) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10[. INVESTMENTS IN EQUITY ACCOUNTED INVESTEES](#ie712fa7e1bb04f279f6526094cc7ef36_352) | [109](#ie712fa7e1bb04f279f6526094cc7ef36_352) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11[. INCOME TAXES](#ie712fa7e1bb04f279f6526094cc7ef36_796) | [112](#ie712fa7e1bb04f279f6526094cc7ef36_796) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12[. TRADE PAYABLES AND OTHER](#ie712fa7e1bb04f279f6526094cc7ef36_802) | [113](#ie712fa7e1bb04f279f6526094cc7ef36_802) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13[. LEASES](#ie712fa7e1bb04f279f6526094cc7ef36_805) | [114](#ie712fa7e1bb04f279f6526094cc7ef36_805) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14[. LONG-TERM DEBT](#ie712fa7e1bb04f279f6526094cc7ef36_367) | [115](#ie712fa7e1bb04f279f6526094cc7ef36_367) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15[. DECOMMISSIONING PROVISION](#ie712fa7e1bb04f279f6526094cc7ef36_376) | [117](#ie712fa7e1bb04f279f6526094cc7ef36_376) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16[. SHARE CAPITAL](#ie712fa7e1bb04f279f6526094cc7ef36_382) | [118](#ie712fa7e1bb04f279f6526094cc7ef36_382) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17[. EARNINGS PER COMMON SHARE](#ie712fa7e1bb04f279f6526094cc7ef36_889) | [120](#ie712fa7e1bb04f279f6526094cc7ef36_889) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18[. REVENUE](#ie712fa7e1bb04f279f6526094cc7ef36_403) | [121](#ie712fa7e1bb04f279f6526094cc7ef36_403) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19[. NET FINANCE COSTS](#ie712fa7e1bb04f279f6526094cc7ef36_418) | [122](#ie712fa7e1bb04f279f6526094cc7ef36_418) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20[. PENSION PLAN](#ie712fa7e1bb04f279f6526094cc7ef36_916) | [123](#ie712fa7e1bb04f279f6526094cc7ef36_916) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[2](#ie712fa7e1bb04f279f6526094cc7ef36_922)[1](#ie712fa7e1bb04f279f6526094cc7ef36_922)[. SHARE-BASED PAYMENTS](#ie712fa7e1bb04f279f6526094cc7ef36_922) | [125](#ie712fa7e1bb04f279f6526094cc7ef36_922) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22[. ACCUMULATED OTHER COMPREHENSIVE INCOME](#ie712fa7e1bb04f279f6526094cc7ef36_421) | [127](#ie712fa7e1bb04f279f6526094cc7ef36_421) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23[. FINANCIAL INSTRUMENTS & RISK MANAGEMENT](#ie712fa7e1bb04f279f6526094cc7ef36_424) | [128](#ie712fa7e1bb04f279f6526094cc7ef36_424) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24[. CAPITAL MANAGEMENT](#ie712fa7e1bb04f279f6526094cc7ef36_1003) | [134](#ie712fa7e1bb04f279f6526094cc7ef36_1003) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25[. GROUP ENTITIES](#ie712fa7e1bb04f279f6526094cc7ef36_1006) | [135](#ie712fa7e1bb04f279f6526094cc7ef36_1006) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[2](#ie712fa7e1bb04f279f6526094cc7ef36_442)[6](#ie712fa7e1bb04f279f6526094cc7ef36_442)[. RELATED PARTIES](#ie712fa7e1bb04f279f6526094cc7ef36_442) | [136](#ie712fa7e1bb04f279f6526094cc7ef36_442) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[2](#ie712fa7e1bb04f279f6526094cc7ef36_448)[7](#ie712fa7e1bb04f279f6526094cc7ef36_448)[. COMMITMENTS AND CONTINGENCIES](#ie712fa7e1bb04f279f6526094cc7ef36_448) | [138](#ie712fa7e1bb04f279f6526094cc7ef36_448) |

---

**Pembina Pipeline Corporation 2025 Annual Report** 77

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**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 Control over Financial Reporting*

Management is responsible for establishing and maintaining disclosure controls and procedures ("DC&P") and internal control over financial reporting, as defined in Rule 13a – 15(e) and 15(d) – 15(e) under the United States *Securities Exchange Act of 1934,* as amended (the "Exchange Act") and National Instrument 52-109 *Certification of Disclosure in Issuers' Annual and Interim Filings.*

Under the supervision and with the participation of the President and Chief Executive Officer ("CEO") and the Chief Financial Officer ("CFO"), management has conducted an evaluation of Pembina's internal control over financial reporting based on the framework set forth in Internal Control – Integrated Framework issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on management's assessment as at December 31, 2025, the CEO and CFO have concluded that Pembina's internal control over financial reporting is effective.

Due to its inherent limitations, internal control over financial reporting is not intended to 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 at a specific date, and continued effectiveness in future periods is subject to the risks that controls may become inadequate.

The Board of Directors of Pembina (the "Board") is responsible for ensuring management fulfills its responsibilities for financial reporting and internal control. The Board is assisted in exercising its responsibilities through the Audit Committee, which consists of five non-management directors. The Audit Committee meets periodically with management and the internal and external 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.

KPMG LLP, the independent auditors, have audited Pembina's consolidated financial statements and the effectiveness of internal control over financial reporting as of December 31, 2025 in accordance with the standards of the Public Company Accounting Oversight Board (United States). The independent auditors have full and unrestricted access to the Audit Committee to discuss their audit and their related findings.

78 **Pembina Pipeline Corporation 2025 Annual Report** 

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*Changes in Internal Control over Financial Reporting*

Pembina previously excluded controls, policies and procedures associated with the Alliance, Aux Sable, and NRGreen joint ventures (the "Acquirees") controlling interests in which were acquired on April 1, 2024, from the Company's evaluation of the effectiveness of its internal control over financial reporting, as permitted under applicable securities laws in Canada and the United States. Effective April 1, 2025, the controls, policies and procedures of the Acquirees came into scope of Pembina's internal control over financial reporting and have been incorporated into Pembina's evaluation of the effectiveness thereof. Other than the integration of the controls, policies and procedures of the Acquirees in the second quarter of 2025, there has been no change in Pembina's internal control over financial reporting that occurred during the year ended December 31, 2025 that has materially affected, or are reasonably likely to materially affect, Pembina's internal control over financial reporting.

---

| | |
|:---|:---|
| *"J. Scott Burrows"*<br>**J. Scott Burrows**<br>President and Chief Executive Officer | *"Cameron J. Goldade"*<br>**Cameron J. Goldade**<br>Chief Financial Officer |

---

February 26, 2026

**Pembina Pipeline Corporation 2025 Annual Report** 79

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**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

**To the Shareholders and Board of Directors of Pembina Pipeline Corporation**

**Opinion on the Consolidated Financial Statements**

We have audited the accompanying consolidated statements of financial position of Pembina Pipeline Corporation (the Company) as at December 31, 2025 and 2024, the related consolidated statements of earnings and comprehensive income, changes in equity, and cash flows for each of the years then ended, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2025 and 2024, and the financial performance and its cash flows for each of the years then ended, in conformity with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as at December 31, 2025, based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 26, 2026 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

**Basis for Opinion**

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audit Matters**

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

80 **Pembina Pipeline Corporation 2025 Annual Report** 

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**Evaluation of the recoverable amount of Pembina Gas Infrastructure Inc.**

As discussed in Note 10, the Company's equity method investment in Pembina Gas Infrastructure Inc. ("PGI") as of December 31, 2025 was $3,578 million. As discussed in Note 3 the Company records its share of PGI's profit or loss and comprehensive income, which includes any impairment losses. PGI is required to estimate the recoverable amount of its goodwill at least annually, or whenever PGI identifies an impairment indicator. PGI calculated the recoverable amount in its annual goodwill impairment test using a fair value less cost to sell approach based on a discounted cash flow model. No impairment loss was recognized by PGI for the year ended December 31, 2025.

We identified the evaluation of the recoverable amount of PGI as a critical audit matter. A high degree of subjective auditor judgment was required to evaluate the projected cash flows of the assets, and after-tax discount rate assumptions used to discount the projected cash flows.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the determination of the projected cash flows of the assets, and after-tax discount rate assumptions used to discount the projected cash flows. We compared PGI's historical projected cash flows of the assets to actual historical results to assess PGI's ability to accurately forecast. We evaluated PGI's projected cash flows of the assets, by comparing to actual historical results. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:

• testing the recoverable amount for PGI using the investee's projected cash flows of the assets, and after-tax discount rate, and comparing the result to the investee's calculated recoverable amount

• evaluating the after-tax discount rate used in the valuation by comparing the inputs against publicly available market data for comparable entities and assessing the resulting after-tax discount rate

• evaluating the historical and projected cash flow multiples implied in the valuation by comparing them to publicly available historical and projected cash flow multiples for comparable entities.

**Evaluation of the recoverable amount of the Alliance cash generating unit**

As discussed in Note 3(f), non-financial assets are assessed 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. As discussed in Note 8, the Canada Energy Regulator had initiated a toll review of the Alliance Canada pipeline assets in late 2024. As the toll review continued into the first quarter of 2025, the Company performed an impairment test for the Cash-Generating Unit ("CGU") that includes the Alliance Canada assets. The recoverable amount was determined using a fair value less costs of disposal approach by discounting the projected cash flows, including probability weighted settlement outcomes for the Alliance Canada assets. The recoverable amount of the CGU exceeded the carrying value of $6.3 billion as of March 31, 2025 and as a result, no impairment was recognized.

We identified the evaluation of the recoverable amount of the CGU as a critical audit matter. A high degree of subjective auditor judgment was required to evaluate the method to estimate commodity price assumptions used in the determination of the projected cash flows of the assets, and after-tax discount rate assumptions used to discount the projected cash flows.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the method used to estimate the commodity price assumptions used in the projected cash flows of the assets, and the after-tax discount rate assumptions used to discount the projected cash flows. We evaluated the Company's method for estimating forecasted commodity prices. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:

• evaluating the after-tax discount rate used in the valuation by comparing the inputs against publicly available market data for comparable entities and assessing the resulting after-tax discount rate

**Pembina Pipeline Corporation 2025 Annual Report** 81

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• evaluating the historical and projected cash flow multiples implied in the valuation by comparing them to publicly available historical and projected cash flow multiples for comparable entities

**Evaluation of the Cedar LNG capacity commercial arrangement**

As discussed in Note 3(b), the Company's material accounting policy requires embedded derivatives in other financial instruments or other contracts (host contracts) to be recorded separately if the following criteria are met: (a) the economic characteristics and risks are not closely related to the host contract; (b) a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and, (c) the host contract is not measured at fair value through profit or loss. If a separable option-based embedded derivative in a revenue contract has a fair value at contract inception, a corresponding contract asset or liability is attributed to the revenue contract that results in a decrease or increase, respectively, to revenue as the future services are provided. As described in Note 23, the Company's provision of Cedar LNG transportation and liquefaction capacity to a third-party customer (the "contractual agreement") has given rise to an embedded derivative instrument with option features. The fair value of this embedded derivative was measured using Black-Scholes option modelling. The key unobservable inputs in the valuation include forward commodity pricing and volatility in commodity prices. As described in Note 18, the Company recognized a contract liability at contract inception equal to the fair value of the embedded derivative of $176 million.

We identified the assessment of the embedded derivative and its fair value measurement as a critical audit matter. A high degree of auditor judgment was required to evaluate the application of the Company's material accounting policy over the contractual arrangement and the embedded derivative, and to evaluate the appropriateness of management's selection of the valuation model and the appropriateness of the related forward commodity pricing and volatility assumptions used to measure the fair value of the embedded derivative.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the application of the accounting policy to the contractual arrangement and embedded derivative, the selection of the valuation model, and the forward commodity pricing and volatility assumptions used in measuring the fair value of the embedded derivative. We evaluated the initial recognition of the host contract and its embedded derivative by examining the terms and conditions of the host contract, considering its economic characteristics and risks, and comparing the results to the related requirements of IFRS. We assessed the model used to determine the fair value of the embedded derivative by comparing the model and its calculations to the contractual agreement. We evaluated the Company's method and data used to estimate unobservable forward commodity prices. In addition, we involved financial instrument valuation professionals with specialized skills and knowledge, who assisted in:

• evaluating the Company's selection of the Black-Scholes model to estimate the fair value of the embedded derivative

• testing the appropriateness of the Company's forward volatility assumption,

• testing the Company's calculation of the fair value of the embedded derivative using the Black-Scholes pricing model.

/s/ KPMG LLP

Chartered Professional Accountants

We have served as the Company's auditor since 1997.

Calgary, Canada

February 26, 2026

82 **Pembina Pipeline Corporation 2025 Annual Report** 

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**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

**To the Shareholders and Board of Directors of Pembina Pipeline Corporation**

**Opinion on Internal Control Over Financial Reporting**

We have audited Pembina Pipeline Corporation's (the Company) internal control over financial reporting as at December 31, 2025, based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as at December 31, 2025, based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial position of the Company as at December 31, 2025 and 2024, the related consolidated statements of earnings and comprehensive income, changes in equity, and cash flows for each of the years then ended, and the related notes (collectively, the consolidated financial statements), and our report dated February 26, 2026 expressed an unqualified opinion on those consolidated financial statements.

**Basis for Opinion**

The Company'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 Annual Report on Internal Control over Financial Reporting on page [78](#ie712fa7e1bb04f279f6526094cc7ef36_643) of Management's Discussion and Analysis. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. 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 of internal control over financial reporting 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.

**Definition and Limitations of Internal Control Over Financial Reporting**

A company'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. A company'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 company; (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 company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

**Pembina Pipeline Corporation 2025 Annual Report** 83

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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.

/s/ KPMG LLP

Chartered Professional Accountants

Calgary, Canada

February 26, 2026

84 **Pembina Pipeline Corporation 2025 Annual Report** 

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**CONSOLIDATED STATEMENTS OF FINANCIAL POSITION**

---

| | | |
|:---|:---|:---|
| **As at December 31** <br>*($ millions)* | **2025** | 2024 |
| **Assets <br>Current assets** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | **106** | 141 |
| &nbsp;&nbsp;&nbsp;&nbsp;Trade receivables and other *(Note 6)* | **836** | 1005 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax receivable *(Note 11)* | **19** | 113 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory *(Note 7)* | **284** | 301 |
| &nbsp;&nbsp;&nbsp;&nbsp;Derivative financial instruments *(Note 23)* | **14** | 13 |
|  | **1259** | 1573 |
| **Non-current assets** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Property, plant and equipment *(Note 8)* | **22550** | 22738 |
| &nbsp;&nbsp;&nbsp;&nbsp;Intangible assets and goodwill *(Note 9)* | **6345** | 6528 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments in equity accounted investees *(Note 10)* | **4344** | 4267 |
| &nbsp;&nbsp;&nbsp;&nbsp;Right-of-use assets *(Note 13)* | **526** | 530 |
| &nbsp;&nbsp;&nbsp;&nbsp;Finance lease receivables *(Note 13)* | **239** | 223 |
| &nbsp;&nbsp;&nbsp;&nbsp;Derivative financial instruments *(Note 23)* | **114** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets | **178** | 108 |
|  | **34296** | 34394 |
| **Total assets** | **35555** | 35967 |
| **Liabilities and equity<br>Current liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Trade payables and other *(Note 12)* | **1321** | 1202 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans and borrowings *(Note 14)* | **600** | 1525 |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liabilities | **83** | 89 |
| &nbsp;&nbsp;&nbsp;&nbsp;Contract liabilities *(Note 18)* | **39** | 43 |
| &nbsp;&nbsp;&nbsp;&nbsp;Derivative financial instruments *(Note 23)* | **22** | 49 |
|  | **2065** | 2908 |
| **Non-current liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans and borrowings *(Note 14)* | **11066** | 10535 |
| &nbsp;&nbsp;&nbsp;&nbsp;Subordinated hybrid notes *(Note 14)* | **1022** | 596 |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liabilities | **539** | 576 |
| &nbsp;&nbsp;&nbsp;&nbsp;Decommissioning provision *(Note 15)* | **540** | 426 |
| &nbsp;&nbsp;&nbsp;&nbsp;Contract liabilities *(Note 18)* | **305** | 255 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred tax liabilities *(Note 11)* | **2957** | 2868 |
| &nbsp;&nbsp;&nbsp;&nbsp;Derivative financial instruments *(Note 23)* | **116** | 110 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | **174** | 183 |
|  | **16719** | 15549 |
| **Total liabilities** | **18784** | 18457 |
| **Total equity** | **16771** | 17510 |
| **Total liabilities and equity** | **35555** | 35967 |

---

*See accompanying notes to the audited consolidated financial statements*

---

| | |
|:---|:---|
| Approved on behalf of the Board of Directors: | |
| *"Maureen E. Howe"*<br>**Maureen E. Howe**<br>Director | *"Henry W. Sykes"*<br>**Henry W. Sykes**<br>Director |

---

**Pembina Pipeline Corporation 2025 Annual Report** 85

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**CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME**

---

| | | |
|:---|:---|:---|
| **For the years ended December 31** | | |
| *($ millions, except per share amounts)* | **2025** | 2024 |
| &nbsp;&nbsp;&nbsp;&nbsp;Revenue *(Note 18)* | **7778** | 7384 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cost of sales *(Note 5)* | **4794** | 4396 |
| &nbsp;&nbsp;&nbsp;&nbsp;Share of profit from equity accounted investees *(Note 10)* | **209** | 328 |
| **Gross profit** | **3193** | 3316 |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative | **477** | 444 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other expense (income) | **20** | (4) |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on disposal of assets | **(113)** | (21) |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on acquisition | **—** | 616 |
| **Results from operating activities** | **2809** | 2281 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net finance costs *(Note 19)* | **602** | 561 |
| **Earnings before income tax** | **2207** | 1720 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current tax expense | **432** | 261 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred tax expense (recovery) | **81** | (415) |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax expense (recovery) *(Note 11)* | **513** | (154) |
| **Earnings** | **1694** | 1874 |
| Earnings attributable to: |  |  |
| &nbsp;&nbsp;Shareholders | **1694** | 1864 |
| &nbsp;&nbsp;Non-controlling interest | **—** | 10 |
| **Other comprehensive (loss) income, net of tax** *(Note 22)* |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Exchange (loss) gain on translation of foreign operations | **(272)** | 436 |
| &nbsp;&nbsp;&nbsp;&nbsp;Impact of hedging activities | **6** | (37) |
| &nbsp;&nbsp;&nbsp;&nbsp;Re-measurement of defined benefit asset or liability (*Note 20*)  | **32** | 21 |
| Other comprehensive (loss) income, net of tax | **(234)** | 420 |
| **Total comprehensive income attributable to shareholders** | **1460** | 2294 |
| Comprehensive income attributable to: |  |  |
| &nbsp;&nbsp;Shareholders | **1460** | 2284 |
| &nbsp;&nbsp;Non-controlling interest | **—** | 10 |
| **Earnings attributable to common shareholders, net of preferred share dividends** | **1550** | 1721 |
| **Earnings per common share** – basic *(dollars) (Note 17)* | **2.67** | 3.00 |
| **Earnings per common share** – diluted *(dollars) (Note 17)* | **2.66** | 3.00 |
| **Weighted average number of common shares** *(millions)* |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | **581** | 573 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | **582** | 574 |

---

*See accompanying notes to the audited consolidated financial statements* 

86 **Pembina Pipeline Corporation 2025 Annual Report** 

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**CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | Attributable to Shareholders of the Company | Attributable to Shareholders of the Company | Attributable to Shareholders of the Company | Attributable to Shareholders of the Company | Attributable to Shareholders of the Company | | Total Equity |
| *($ millions)* | Common Share Capital | Preferred Share Capital | Deficit | AOCI<sup>(1)</sup> | Total | Non-Controlling Interest | Total Equity |
| December 31, 2024 | 17008 | 2164 | (2303) | 641 | 17510 |  | 17510 |
| **Total comprehensive income (loss)** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Earnings  |  |  | 1694 |  | 1694 |  | 1694 |
| &nbsp;&nbsp;&nbsp;Other comprehensive loss *(Note 22)* |  |  |  | (234) | (234) |  | (234) |
| Total comprehensive income (loss) |  |  | 1694 | (234) | 1460 |  | 1460 |
| **Transactions with shareholders of the Company** *(Note 16)* | **Transactions with shareholders of the Company** *(Note 16)* |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Part VI.1 tax on preferred shares |  | (10) |  |  | (10) |  | (10) |
| &nbsp;&nbsp;&nbsp;Preferred shares redemption  |  | (425) |  |  | (425) |  | (425) |
| &nbsp;&nbsp;&nbsp;Share-based payment transactions | 8 |  |  |  | 8 |  | 8 |
| &nbsp;&nbsp;&nbsp;Dividends declared – common  |  |  | (1638) |  | (1638) |  | (1638) |
| &nbsp;&nbsp;&nbsp;Dividends declared – preferred |  |  | (134) |  | (134) |  | (134) |
| Total transactions with shareholders of the Company | 8 | (435) | (1772) |  | (2199) |  | (2199) |
| **December 31, 2025** | 17016 | 1729 | (2381) | 407 | 16771 |  | 16771 |
| December 31, 2023 | 15765 | 2199 | (2372) | 221 | 15813 |  | 15813 |
| **Total comprehensive income** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Earnings |  |  | 1864 |  | 1864 | 10 | 1874 |
| &nbsp;&nbsp;&nbsp;Other comprehensive income *(Note 22)* |  |  |  | 420 | 420 |  | 420 |
| Total comprehensive income |  |  | 1864 | 420 | 2284 | 10 | 2294 |
| **Transactions with shareholders of the Company** *(Note 16)* | **Transactions with shareholders of the Company** *(Note 16)* |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Common shares issued, net of issue costs | 1230 |  |  |  | 1230 |  | 1230 |
| &nbsp;&nbsp;&nbsp;Part VI.1 tax on preferred shares  |  | (9) |  |  | (9) |  | (9) |
| &nbsp;&nbsp;&nbsp;Share-based payment transactions  | 13 |  |  |  | 13 |  | 13 |
| &nbsp;&nbsp;&nbsp;Dividends declared – common  |  |  | (1569) |  | (1569) |  | (1569) |
| &nbsp;&nbsp;&nbsp;Dividends declared – preferred  |  |  | (132) |  | (132) |  | (132) |
| &nbsp;&nbsp;&nbsp;Dividend equivalent payment – subscription receipts |  |  | (20) |  | (20) |  | (20) |
| &nbsp;&nbsp;&nbsp;Preferred shares reclassified to trade payables and other |  | (26) |  |  | (26) |  | (26) |
| &nbsp;&nbsp;&nbsp;Distributions to non-controlling interests |  |  |  |  |  | (12) | (12) |
| &nbsp;&nbsp;&nbsp;Non-controlling interest recognized on acquisition |  |  |  |  |  | 148 | 148 |
| &nbsp;&nbsp;&nbsp;Purchase of non-controlling interest |  |  | (74) |  | (74) | (146) | (220) |
| Total transactions with shareholders of the Company | 1243 | (35) | (1795) |  | (587) | (10) | (597) |
| **December 31, 2024** | 17008 | 2164 | (2303) | 641 | 17510 |  | 17510 |

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&nbsp;&nbsp;&nbsp;&nbsp;<sup>(1)</sup>&nbsp;&nbsp;&nbsp;&nbsp;Accumulated Other Comprehensive Income ("AOCI").

*See accompanying notes to the audited consolidated financial statements*

**Pembina Pipeline Corporation 2025 Annual Report** 87

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**CONSOLIDATED STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
| **For the years ended December 31** | | |
| *($ millions)* | **2025** | 2024 |
| **Cash provided by (used in)** |  |  |
| **Operating activities** |  |  |
| Earnings | **1694** | 1874 |
| Adjustments for items not involving cash: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Share of profit from equity accounted investees *(Note 10)* | **(209)** | (328) |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | **987** | 862 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on acquisition | **—** | 616 |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized loss from derivative instruments *(Note 23)* | **37** | 170 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net finance costs *(Note 19)* | **602** | 561 |
| &nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation expense *(Note 21)* | **94** | 84 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax expense (recovery) *(Note 11)* | **513** | (154) |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on asset disposal | **(113)** | (21) |
| &nbsp;&nbsp;&nbsp;&nbsp;Derecognition of insurance contract provision | **—** | (34) |
| Cash items paid or received: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Distributions from equity accounted investees *(Note 10)* | **544** | 626 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net interest paid *(Note 19)* | **(583)** | (502) |
| &nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation payment | **(89)** | (91) |
| &nbsp;&nbsp;&nbsp;&nbsp;Taxes paid | **(346)** | (404) |
| Change in non-cash operating working capital | **221** | (43) |
| Net change in contract liabilities *(Note 18)* | **(24)** | (3) |
| Other | **(27)** | 1 |
| **Cash flow from operating activities** | **3301** | 3214 |
| **Financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in bank borrowings *(Note 14)* | **191** | (274) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of long-term debt, net of issue costs *(Note 14)* | **1021** | 2733 |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from subscription receipts *(Note 16)* | **—** | 1228 |
| &nbsp;&nbsp;&nbsp;&nbsp;Repayment of long-term debt | **(1154)** | (1009) |
| &nbsp;&nbsp;&nbsp;&nbsp;Repayment of lease liability | **(84)** | (78) |
| &nbsp;&nbsp;&nbsp;&nbsp;Issuance of common shares on exercise of options | **6** | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;Redemption of preferred shares *(Note 16)* | **(451)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common share dividends paid *(Note 16)* | **(1638)** | (1569) |
| &nbsp;&nbsp;&nbsp;&nbsp;Preferred share dividends paid *(Note 16)* | **(134)** | (132) |
| &nbsp;&nbsp;&nbsp;&nbsp;Distributions to non-controlling interest | **—** | (12) |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchase of non-controlling interest | **—** | (220) |
| **Cash flow (used in) from financing activities** | **(2243)** | 678 |
| **Investing activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital expenditures | **(784)** | (955) |
| &nbsp;&nbsp;&nbsp;&nbsp;Contributions to equity accounted investees *(Note 10)* | **(410)** | (371) |
| &nbsp;&nbsp;&nbsp;&nbsp;Acquisition net of cash acquired *(Note 4)* | **—** | (2620) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of assets | **139** | 38 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest paid during construction *(Note 19)* | **(28)** | (26) |
| &nbsp;&nbsp;&nbsp;&nbsp;Advances to related parties *(Note 26)* | **(27)** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Return of capital from equity accounted investees *(Note 10)* | **—** | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes in non-cash investing working capital and other | **20** | (42) |
| **Cash flow used in investing activities** | **(1090)** | (3913) |
| Change in cash and cash equivalents | **(32)** | (21) |
| Effect of movement in exchange rates on cash held | **(3)** | 11 |
| Cash and cash equivalents, beginning of period | **141** | 151 |
| **Cash and cash equivalents, end of period** | **106** | 141 |

---

*See accompanying notes to the audited consolidated financial statements*

88 **Pembina Pipeline Corporation 2025 Annual Report** 

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**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**1. REPORTING ENTITY**

Pembina Pipeline Corporation ("Pembina" or the "Company") is a Calgary-based, leading transportation and midstream service provider serving North America's energy industry. The audited consolidated financial statements ("Consolidated Financial Statements") include the accounts of Pembina, its subsidiary companies, partnerships and any investments in associates and joint arrangements as at and for the year ended December 31, 2025.

Pembina owns an extensive network of strategically located assets which include hydrocarbon liquids and natural gas pipelines, gas gathering and processing facilities, oil and natural gas liquids infrastructure and logistics services, and an export terminals business. Pembina's network of strategically located assets and commercial operations along the majority of the hydrocarbon value chain allow it to offer a full spectrum of midstream and marketing services to the energy sector.

**2. BASIS OF PREPARATION**

The Consolidated Financial Statements are presented in Canadian dollars, Pembina's functional currency, with all values presented in millions, unless otherwise indicated.

The Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). The material accounting policies applied in preparation of the Consolidated Financial Statements are set out below in Note 3 and have been applied consistently to all periods presented.

The Consolidated Financial Statements were authorized for issue by Pembina's Board of Directors on February 26, 2026.

**a. Basis of Measurement** 

The Consolidated Financial Statements have been prepared on a historical cost basis with some exceptions, as detailed in the accounting policies set out below.

**b. Basis of Consolidation**

These Consolidated Financial Statements include the results of the Company and its subsidiaries together with its interests in joint arrangements.

**i) Subsidiaries**

Subsidiaries are entities, including unincorporated entities such as partnerships, controlled by Pembina. The financial results of subsidiaries are included in the Consolidated Financial Statements from the date that control commences until the date when control ceases. Balances and transactions, including any revenue and expenses, with or between subsidiaries have been eliminated in preparing the Consolidated Financial Statements.

For the acquisition of a controlling ownership interest in Alliance and Aux Sable on April 1, 2024, Pembina elected to measure its initial carrying value of the non-controlling interests equal to the proportionate value of the net assets that the non-controlling interests relate to. Non-controlling interests are recognized as a component of equity and are subsequently increased by the proportionate amount of net income or contributions attributable to the non-controlling interest, and decreased by any distributions paid. After initial recognition, if a non-controlling interest is acquired, the non-controlling interest is derecognized. Differences between the carrying amount of the non-controlling interest and the consideration paid are recognized directly in retained earnings, and are not recognized in earnings.

**Pembina Pipeline Corporation 2025 Annual Report** 89

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**ii) Joint Arrangements**

Joint arrangements represent arrangements where Pembina has joint control established by a contractual agreement. Joint arrangements give rise to either joint operations or joint ventures. The determination of joint control requires significant judgment about each party's substantive rights, exposure to variability of returns, and the power necessary for the party to affect its respective returns. Joint control exists when decisions about the relevant activities require the unanimous consent of the parties that control the arrangement collectively. Ownership percentage alone may not be a determinant of joint control.

*Joint Operations*

Pembina recognizes its direct right to the assets, liabilities, revenues and expenses of joint operations and its share of any jointly held or incurred assets, liabilities, revenues and expenses from the date that joint control commences until the date that joint control ceases.

*Joint Ventures and the Equity Method*

Joint ventures are accounted for using the equity method of accounting. The acquisition of interests in a joint venture that is a business are measured and recorded using the acquisition method. Other acquisitions of interests in a joint venture are measured and recorded at cost. Joint ventures are adjusted thereafter for any change in the Company's share of the investees' net assets.

Pembina's Consolidated Financial Statements include its share of the equity accounted investees' profit or loss and comprehensive income until the date that joint control ceases. When Pembina'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 Pembina has an obligation or has made payments on behalf of the investee. Distributions from and contributions to investments in equity accounted investees are recognized when received or paid.

Unrealized gains arising from transactions with joint ventures are eliminated against the investment to the extent of Pembina's interest in the investee. However, unrealized gains that arise in a circumstance where the Company has contributed a business to a joint venture are fully recognized. Losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

*Business Combinations Achieved in Stages* 

When Pembina acquires control of investees that it previously had joint control or significant influence of, the previously recognized equity investment is remeasured to fair value and recorded as an in-substance disposition, with a corresponding gain or loss recognized for the difference between the fair value and the carrying value on the acquisition date. An allocation of goodwill is included in the carrying value of the net assets disposed, however, the derecognition of deferred tax liabilities previously recognized by Pembina on its investment in the investees is excluded from the measurement of the gain or loss and presented separately.

When measuring the acquired assets, assumed liabilities, non-controlling interests, and goodwill acquired in a business combination achieved in stages, the fair value of Pembina's ownership in the investees as well as the fair value of the other previous relationships with the investees are included as part of the consideration paid in exchange for the business.

90 **Pembina Pipeline Corporation 2025 Annual Report** 

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**iii) Foreign Currency**

For each subsidiary and joint venture, Pembina determines the entity's respective functional currency. The assets and liabilities of these entities, whose functional currencies are other than Canadian dollars, are translated into Canadian dollars at the foreign exchange rate as at the reporting date, while revenues and expenses are translated using average monthly foreign exchange rates. Foreign exchange differences arising on translation of these entities are included in exchange gain (loss) on translation of foreign operations in other comprehensive income. Judgments are required concerning the entity's economic environment in which it operates and the nature of the cash flows that materialize, with consideration given to the currency that influences sales prices, financing activities, the country whose competitive forces and regulatory environment has the most influence, and the currency that most significantly impacts operating costs and economics.

**c. Use of Estimates and Judgments**

The preparation of the Consolidated Financial Statements in conformity with IFRS requires management to make judgments, estimates, and assumptions that are based on facts and circumstances as at the date of the Consolidated Financial Statements, which could affect 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. Information about estimates and judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the financial statements is included in the following notes:

**Judgments** 

• Note 2(b)(ii): Assessment of joint control for joint arrangements;

• Note 3(f)(ii): The determination of cash generating units ("CGUs") in the assessment of non-financial asset impairments;

• Note 3(i): Identification of performance obligations in revenue arrangements; and

• Note 3(b)(v): Assessment of whether recontracting services constitutes net settlement of the original supplier agreement.

**Estimates**

• Note 3(f)(ii): Recoverability of non-financial assets; and

• Note 23: Fair value of Level 3 derivative instruments.

**3. MATERIAL ACCOUNTING POLICIES**

**a. Inventories**

Inventories are measured at the lower of cost and net realizable value and consist primarily of crude oil, natural gas liquids ("NGL") and spare parts that are expected to be used within one year of the financial reporting date. 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, and transportation. All changes in the measurement of inventories are reflected in earnings.

**b. Financial Instruments**

Financial assets and liabilities are offset and the net amount presented in the Consolidated Statement of Financial Position when, and only when, Pembina 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.

**Pembina Pipeline Corporation 2025 Annual Report** 91

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**i) Non-Derivative Financial Assets**

Pembina initially recognizes trade receivables, loan receivables and cash deposits on the date that they are originated. All other financial assets are recognized on the trade date at which Pembina becomes a party to the contractual provisions of the instrument.

Pembina 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 and the related risks and rewards of ownership in a transaction with a third party. Any remaining interest of a transferred financial asset is recognized as a separate asset or liability. On derecognition, the difference between the carrying amount and the consideration received is recognized in earnings.

Pembina classifies non-derivative financial assets into the following categories:

*Financial Assets at Amortized Cost*

A financial asset is classified in this category if the asset is held for the intention of collecting contractual cash flows on specified dates that are solely payments of principal and interest. At initial recognition, financial assets at amortized cost are recognized at fair value plus directly attributable transaction costs. After initial recognition, these financial assets are recorded at amortized cost using the effective interest method less any expected credit losses and impairment loss allowances. Pembina's non-derivative financial assets measured at amortized cost include cash and cash equivalents, trade receivables and other, and other assets.

*Financial Assets at Fair Value Through Other Comprehensive Income*

A financial asset is classified in this category if the asset is held for the intention of both collecting contractual cash flows and selling financial assets.

**ii) Non-Derivative Financial Liabilities**

Pembina's non-derivative financial liabilities are comprised of trade payables and other, loans and borrowings, and other liabilities.

Pembina initially recognizes non-derivative financial liabilities at fair value less any directly attributable transaction costs, on the trade date at which Pembina becomes a party to the contractual provisions of the instrument. After initial recognition these financial liabilities are measured at amortized cost using the effective interest method.

Pembina derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire. On derecognition, the difference between the carrying value of the liability and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in earnings.

Pembina records a modification or exchange of an existing liability as a derecognition of the original financial liability if the terms are substantially different, assessing both qualitative and quantitative factors. In doing so, the original instrument is derecognized with any extinguishment gain or loss recognized in net finance expense, and the modified or exchanged instrument is accounted for as a new instrument.

If the expected cashflows of an existing non-derivative liability are modified but the modification is not treated as a derecognition, Pembina adjusts the gross carrying amount of the liability to the present value of the estimated contractual cash flows using the instrument's original effective interest rate, with the difference recorded in earnings. However, if contractual cashflows include variable market interest payments, such as Pembina's revolving credit facilities, the effective interest rate on the instrument is revised at the same time as the revision to the estimated cashflows resulting in no change to the carrying value of the financial liability.

92 **Pembina Pipeline Corporation 2025 Annual Report** 

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**iii) Common Share Capital**

Common shares and share options arising from share-based payment transactions are classified as equity. When the company repurchases its own common shares, share capital is reduced by the average carrying value of the shares repurchased. The excess of the purchase price over the average carrying value is recognized as an increase in deficit. Shares are cancelled upon repurchase.

**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. Pembina's preferred shares include a redemption option that allow Pembina to call the instrument. If Pembina provides a redemption notice to the preferred shareholders, the instrument is reclassified from equity to be a financial liability until the redemption amount is paid and the shares are cancelled.

**v) Derivative and Hedge Accounting**

Contracts that meet the definition of a derivative instrument are recorded at fair value through earnings. This includes contracts for the delivery of commodities or services where the contract or underlying commodity being delivered is net cash settleable, unless the Company has (a) applied the "own use" (or "normal purchase normal sale") scope exemption, or (b) the derivative instrument has formally been designated as a hedging instrument.

To assess whether the own-use scope exemption is appropriate, Pembina uses judgment to evaluate whether (a) the transaction is reasonable in relation to the business needs; and (b) the business has the intent to deliver or take delivery of the underlying item or commodity. Application of the own use scope exemption is reviewed each reporting period to assess whether the qualifying factors continue to be met.

When Pembina recontracts services received from a supplier to a separate customer, judgment is required to assess whether the arrangement constitutes a net settlement of the original supplier agreement. This evaluation involves analyzing the rights and obligations of all parties, the Company's continued exposure to risks under the supplier contract, and whether the Company provides incremental goods or services to the customer. The conclusion of the assessment determines whether the agreements are accounted for as financial instruments or under other standards, which can result in significantly different accounting outcomes.

Derivative instruments that arise from financial contracts do not qualify for the own use scope exemption as such transactions do not result in physical settlement or delivery of the underlying item or commodity. Rather, these arrangements form part of Pembina's risk management strategy, whereby derivative instruments are used to assist in managing exposure to commodity prices, interest rates, and foreign exchange rates.

All unrealized and realized gains and losses from physical derivative instruments and commodity-related financial derivative instruments (purchases, sales, and related foreign exchange instruments) are recorded on a net basis in revenue as Revenue from risk management and other derivative contracts. All unrealized and realized gains and losses from non-commodity related financial instruments (interest rate and foreign exchange instruments) are included in Net finance costs.

Embedded derivatives in other financial instruments or other contracts (host contracts) are recorded separately if the following criteria are met: (a) The economic characteristics and risks are not closely related to the host contract; (b) a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and, (c) the host contract is not measured at fair value through profit or loss. The embedded derivative can be formally designated as a hedging instrument or recorded at fair value, with changes in fair value recorded in earnings (see Note 23 *Financial Instruments & Risk Management*). If a separable option-based embedded derivative in a revenue contract has a fair value at contract inception, a corresponding contract asset or liability is attributed to the revenue contract that results in a decrease or increase, respectively, to revenue as the future services are provided (see Note 18(b) *Revenue - Contract Liabilities*).

**Pembina Pipeline Corporation 2025 Annual Report** 93

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Derivative instruments executed for risk management purposes may be designated as hedging instruments. At the inception and formal designation of the hedge relationship, Pembina documents the following: The relationship between the hedging instrument and hedged item; the related risk management strategy and objectives; the nature of the risk being hedged; and, how the Company will assess whether the hedging relationship meets the hedge effectiveness requirements on an ongoing basis. Hedge accounting is discontinued prospectively when the hedging relationship no longer qualifies for hedge accounting, or the hedging instrument is sold or terminated.

All derivative instruments that have been formally designated as hedging instruments are accounted for and classified as either: (a) cash flow hedges; or (b) net investment hedges. For both classifications, the effective portion of gains or losses is recognized and accumulated in 'other comprehensive income' ("OCI"), while any ineffective portion is recognized immediately in earnings. For Pembina's cash flow hedges, the amount accumulated in OCI is reclassified into earnings when the hedged forecasted transaction occurs. For net investment hedges, the amount accumulated in OCI is reclassified to earnings on disposal of the foreign operation.

**c. Property, Plant and Equipment**

Items of property, plant and equipment are measured initially at cost, or at fair value if acquired as part of a business combination or have been transferred from a customer. Such a fair value is determined using either (a) comparable and observable market values when available, (b) an income approach, or (c) the depreciated replacement cost valuation method.

Depreciation is measured on a straight line or declining balance basis over the useful life of the asset, commencing when an asset is placed into service, and is included in cost of sales and general and administrative expense. Estimated useful lives are based on management's assumptions, such as, an asset's economic life and physical life, which can include the relevant commodity reserves in a particular production area that the asset serves. Assets are also assessed to determine whether they may have significant components with different useful lives. Estimated useful lives and depreciation methods are reviewed annually and are subject to revision based on new or additional information. Pembina has assessed the residual values of depreciable assets to be insignificant.

**d. Intangible Assets and Goodwill**

Intangible assets that are acquired individually are initially measured at cost or measured at fair value if acquired as part of a business combination. Intangible assets other than goodwill are amortized straight-line over their estimated remaining useful life, based on their remaining carrying value. Amortization expense is included in cost of sales and general and administrative expense. Finite intangible assets include purchase and sales contracts and other, customer relationships and certain software costs.

Amortization methods, useful lives and residual values are reviewed annually and adjusted if appropriate. Goodwill is not amortized.

**e. Leases**

A specific asset is the subject of a lease if a contract conveys the right to control the use of that identified asset for a period of time in exchange for consideration. This determination is made at inception of a contract, on the acquisition date if acquired as part of a business combination, or when the terms and conditions of the contract are amended.

At inception or on reassessment of a contract that contains a lease component, Pembina allocates contract consideration to the lease and non-lease components based on the components' relative stand-alone prices. The consideration allocated to the lease components is recognized in accordance with the policies for lessee and lessor leases, as described below. The consideration allocated to non-lease components is recognized in accordance with the nature of the non-lease component.

94 **Pembina Pipeline Corporation 2025 Annual Report** 

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**i) Lessee**

The lease liability is initially measured at the present value of the lease payments, discounted using the rate Pembina would be required to pay to borrow over a similar term with a similar security to obtain an asset of a similar value to the right-of-use asset, or using the interest rate implicit in the lease if readily determinable. Lease payments used in the calculation of the lease liability exclude variable payments unless those payments are in-substance fixed. Lease payments in an optional renewal period are included in the lease liability if Pembina is reasonably certain to exercise such an option. Management applies its best estimate with respect to the likelihood of exercising renewal, extension and termination options in determining the lease term. The lease liability is subsequently increased by interest expense and decreased by lease payments made.

The lease liability is remeasured when there is a change in future lease payments arising from a previously-variable payment becoming in-substance fixed, or a change in the assessment of whether a purchase option, extension option or termination option is reasonably certain to be exercised. A corresponding adjustment is made to the right-of-use asset when a liability is remeasured, or the adjustment is recorded in earnings if the right-of-use asset has been reduced to zero. Right-of-use assets are initially recognized at an amount equal to the lease liability, then subsequently depreciated over the lease term on a straight-line basis and adjusted for any lease liability remeasurements. The right-of-use assets are included in the respective CGUs for the purposes of impairment testing.

Pembina has elected to apply the recognition exemptions for short-term and low value leases. Pembina recognizes lease payments associated with these leases as an expense on a straight-line basis over the lease term.

**ii) Lessor**

Lessor leases are classified as either operating leases or finance leases according to the substance of the contract at contract inception. Leases transferring substantially all of the risks incidental to asset ownership are classified as finance leases, while all other leases are classified as operating leases. Subleases are classified as either operating or finance leases in reference to the right-of-use asset arising from the head lease.

Finance lease receivables acquired in a business combination are initially recognized at an amount equal to the fair value of the underlying leased assets. Finance lease receivables outside of a business combination are initially measured at the net present value of the future lease payments and the unguaranteed residual values of the underlying assets, discounted using the interest rate implicit in the lease.

Lessor lease income is generated from physical assets in the normal course of operations and recognized in revenue starting from the commencement date of a lease. The timing and amount of the lease income depends on the classification of the lease and characteristics of the cashflows.

Lease payments received for finance leases include both the finance income and a principal repayment of the finance lease receivable. The finance income on the finance lease receivable is recognized using the interest rate implicit in the lease and recognized in lease income. Payments related to the principal repayment are not recognized in earnings and are classified as investing cashflows in the Consolidated Statements of Cash Flows.

Lease payments from operating leases are recognized in lease income on a straight-line basis and are fully recognized in earnings and operating cash flows in the Consolidated Statements of Cash Flows. When the timing of lease income for operating leases differs from when Pembina is entitled to the associated lease payment, a deferred lease asset or liability is recognized in the Consolidated Statement of Financial Position.

Variable lease income represents lease payments that were uncertain and are excluded from measurement of a finance lease receivable and are comprised of non-minimum charges based on customer-usage. Variable lease income is recognized in the period the uncertainty is resolved.

**Pembina Pipeline Corporation 2025 Annual Report** 95

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**f. Impairment**

**i) Non-Derivative Financial Assets**

Impairment of financial assets carried at amortized cost is assessed using the lifetime expected credit loss of the financial asset at initial recognition and throughout the life of the financial asset. However, if credit risk has not increased significantly since initial recognition, impairment is assessed at the 12-month expected credit loss of the financial asset at the reporting date.

Impairment losses are recognized in earnings and reflected as a reduction in the related financial asset.

**ii) Non-Financial Assets**

Non-financial assets, other than inventory, assets arising from employee benefits, and deferred tax assets, are assessed 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.

Goodwill is assessed at each reporting date to determine whether there is any indication of impairment. In addition, goodwill is tested for impairment annually, or more frequently, if an impairment indicator exists.

For the purpose of impairment testing, assets that cannot be tested individually are grouped together into CGUs. CGUs are the smallest group of assets that generate cash inflows from the continued use of the related assets, and are largely independent from other assets. CGUs may incorporate integrated assets from multiple operating segments, which reflects the lowest level at which goodwill is monitored for management 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. In determining CGUs, significant management judgment is required to assess what constitutes independent cash flows. When an impairment test is performed, the carrying value of a CGU or group of CGUs is compared to its recoverable amount. As such, the asset composition of a CGU or group of CGUs directly impacts both the carrying value and recoverability of the assets included therein.

An impairment loss is recognized if the carrying amount of an asset, CGU or group of CGUs exceeds its estimated recoverable amount. The estimated recoverable amount is determined as the higher of value in use and fair value less costs of disposal, by using either the income (cash flow) approach or comparable market transactions, if available. When using the income approach, management is required to make significant estimates and assumptions concerning future cash flows, which are impacted by energy transition considerations, access to global markets, and business contracting assumptions. In addition, when determining the appropriate discount rate, management is required to make assumptions concerning the current industry and economic environment, as well as asset and cash-flow specific risk premiums.

These estimates and assumptions are susceptible to change and may differ from actual future developments. This estimation uncertainty could impact quantified recoverable amounts; and therefore, any related impairment charges, which may be material.

Impairment losses are recognized in earnings. Impairment losses recognized in respect of a CGU (group 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.

For non-financial assets, excluding goodwill, 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. An impairment reversal is recognized in earnings under impairment (reversal) expense. An impairment loss in respect of goodwill is not reversed.

96 **Pembina Pipeline Corporation 2025 Annual Report** 

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Goodwill that forms part of the carrying amount of an investment in an equity accounted investee is not recognized separately; and therefore, is not tested for impairment separately. Rather, the investment, including its respective goodwill, is tested for impairment as a single asset when there is objective evidence it may be impaired as a result of one or more events having occurred that could negatively impact the estimated future cash flows from the investment. If the investment does not generate cash flows that are largely independent of those from other Pembina assets, its carrying value is added to a CGU to which the investment relates.

**g. Employee Benefits**

**i) Defined Benefit Pension Plans** 

Pembina's net obligation in respect of defined benefit pension 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 of the defined benefit obligation is performed each reporting period; however, the calculation of the actuarial funding valuation is performed, at a minimum, every three years by a qualified actuary using the actuarial cost method. The actuarial valuation is prepared using management's best estimates with respect to longevity, discount and inflation rates, compensation increases, market returns on plan assets, retirement and termination rates. When the calculation results in a benefit to Pembina, 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.

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

**ii) Share-Based Payment Transactions**

For equity settled share-based payment plans ("options"), 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.

The fair value of options are measured using the Black-Scholes formula on grant date. Measurement inputs include share price on measurement date, exercise price of the option, expected volatility (based on weighted average historic volatility), weighted average expected life of the option (based on historical experience and general option holder behavior), expected dividends, expected forfeitures and the risk-free interest rate (based on government bonds). Service and 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 volume-weighted average price of Pembina's shares for the 20 days ending of the relevant financial year.

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. The fair value is determined by using a model that takes into account the extent to which the employees have rendered services or performance conditions to date, and other market conditions which may impact the number of awards expected to be earned and vest. Any changes in the fair value of the liability are recognized as an expense in earnings.

**Pembina Pipeline Corporation 2025 Annual Report** 97

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**h. Provisions**

A provision is recognized if, as a result of a past event, Pembina has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic resources will be required to settle the obligation. With regards to these potential obligations, Pembina considers environmental laws, regulations and interpretations by regulatory authorities in determining expected cash flows.

Provisions are measured at each reporting date based on the best estimate of the settlement amount. Where the effect of the time value of money is material, provisions are discounted at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount rate is recognized as accretion in finance costs.

**i) Decommissioning Provision**

Pembina's activities give rise to certain dismantling, decommissioning, environmental reclamation, and remediation obligations at the end of an asset's economic life. Decommissioning costs are recognized as part of the cost of the relevant asset. The unwinding of the discount is expensed as incurred and recognized in net finance costs. To measure the decommissioning provision, estimated future expected cash flows, including assumptions concerning inflation and anticipated changes in environmental laws and regulations, are discounted using a credit-adjusted risk-free rate. Changes in the estimated future expected cash flows used in measuring the decommissioning provision are added to or deducted from the cost of the respective asset to which the decommissioning provision relates.

**i. Revenue**

Pembina recognizes revenue equal to the consideration that it is entitled to for satisfying a performance obligation to a customer.

Performance obligations in Pembina's contracts with customers include:

• promises to perform or provide the right to transportation, liquefaction, fractionation, terminalling, storage services, and construction over a specified contractual term and/or for a specified volume of commodities; and

• promises to transfer control of commodities to the customer at a specified time periods and locations.

Certain contracts may arise that require Pembina to apply significant judgment when identifying the contract's performance obligations where (i) Pembina is providing both services and commodities; (ii) Pembina is providing services and purchasing commodities from the same counterparty; or (iii) Pembina is both purchasing and selling commodities from the same counterparty.

In contracts where Pembina performs service-type activities to enhance the value of a product and is either purchasing or selling the product, identification of the performance obligations in the contract will depend on whether Pembina or the customer has control of the product when Pembina performs the service activity. If Pembina controls a product while performing the service activity that enhances the product, the service activity is for Pembina's benefit and is not considered a performance obligation. As a result, any fees that Pembina receives from a supplier for performing a service for Pembina's benefit are treated as a reduction in the purchase price of the product rather than as revenue, or in the case of a product sales contract, any fees related to performing the service are allocated to the product sales revenue rather than separately recognizing service revenues.

Other situations may have Pembina purchasing and subsequently selling a product without ever obtaining control of that product or selling and then subsequently repurchasing a product without ever losing control of the product. In these cases, Management will determine whether the substance of the arrangement is to provide a service to a customer where the net proceeds will be recognized as service revenue, or to receive a service where the net proceeds will be recognized as a cost outside of revenue.

98 **Pembina Pipeline Corporation 2025 Annual Report** 

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For the Alliance Pipeline, Pembina is required to share a portion of fee-for-service and take-or-pay revenue earned on competitively priced volumes above minimum volume thresholds with customers who have take-or-pay contracts. This shared revenue is recorded as a reduction to the associated revenue, such that net revenue only reflects Pembina's portion that it retains. The portion payable to firm shippers is recognized as a refund liability.

Pembina disaggregates its revenue streams from contacts with customers into three categories based on the nature of the revenue generating activity and the certainty of the associated cashflows to be received from the customer. Information about the nature of the services provided, consideration received, and timing of the satisfaction of performance obligations for each category is discussed below.

**i) Take-or-Pay** 

*Transportation, liquefaction, and other services*

Under take-or-pay contracts, Pembina offers transportation, liquefaction, fractionation, terminalling, and storage services that are either provided directly by Pembina or Pembina provides its right to use such services to the customer. In a take-or-pay contract, Pembina is entitled to a minimum fee for the firm service promised to a customer over the contract period, regardless of actual volumes transported, liquified, fractionated, terminalled, or stored. This minimum fee is either a set fee for an annual minimum volume, or an annual minimum revenue requirement. In addition, the minimum fee may include variable consideration for operating or capital costs incurred by Pembina that are recovered from the customer. Estimating the variable consideration to be recognized involves judgment, particularly in assessing the risk of a significant revenue reversal. For contracts where management has identified multiple performance obligations, management estimates the stand-alone selling price of each performance obligation taking into consideration the location and volume of goods and services being provided, the market environment, and customer specific considerations.

Pembina satisfies its performance obligations and recognizes revenue for services under take-or-pay commitments when volumes are transported, liquefied, terminalled, stored, or capacity utilized. Make-up rights may arise when a customer does not fulfill their minimum volume commitment in a certain period but is allowed to use the delivery of past or future volumes to meet this commitment. These make-up rights are subject to expiry and have varying conditions associated with them. When contract terms allow a customer to exercise their make-up rights using firm volume commitments, revenue is not recognized until these make-up rights are used, expire, or management determines breakage has occurred. If Pembina bills a customer for unused service in an earlier period and the customer utilizes available make-up rights, Pembina records a refund liability for the amount to be returned to the customer through an annual adjustment process. For contracts where no make-up rights exist, revenue is recognized to take-or-pay levels once Pembina has an enforceable right to payment for the take-or-pay volumes. Make-up rights generally expire within a contract year and substantially all the related contract years follow the calendar year.

As a result of deferring revenue related to customer underutilization until the earlier of when the customer uses the volumes or the customers' make-up rights expire, a portion of cashflows received from the customer in early quarters of the year is deferred and not recognized in revenue until later quarters, although there is no impact on cash flows received from the customers.

When up-front payments or non-cash consideration is received in exchange for future services to be performed, revenue is deferred as a contract liability and recognized over the period the performance obligation is expected to be satisfied. Non- cash consideration is measured at fair value when received.

**Pembina Pipeline Corporation 2025 Annual Report** 99

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*Operating services* 

When a contract has the effect of providing the customer with a lease over a Pembina-owned transportation, terminalling, or storage asset, Pembina remains responsible for operating and maintaining the asset over the contract term. Pembina's promise to provide a service of operating a leased asset is a stand-ready performance obligation. Fixed fees earned for operating services are recognized evenly over the contract term and variable flow-through fees, including capital maintenance and turnaround charges, are recognized in the period the services are performed. When the timing of payments received in exchange for the services performed differs from when the work is performed and the revenue recognized, a contract asset or liability is recognized in the Consolidated Statement of Financial Position.

**ii) Fee-for-Service** 

Fee-for-service revenue includes firm contracted revenue that is not subject to take-or-pay commitments and interruptible service. Pembina satisfies its performance obligations for transportation, liquefaction, fractionation, terminalling, and storage as volumes of product are transported, liquefied, fractionated, terminalled, or capacity utilized. Revenue is based on a contracted fee and consideration is variable with respect to volumes. Payment is generally due in the month following Pembina's provision of service and revenue is recognized as the performance obligation is satisfied.

**iii) Product Sales** 

Pembina's performance obligation in a product sale is to transfer control of a distinct product or products to the customer. Pembina satisfies its performance obligation on product sales and recognizes the associated revenue when the customer obtains control of the product, which may differ from when legal title or physical custody transfers. The determination of control requires judgments in determining who has the rights to direct the use of and obtain substantially all the remaining economic benefits from the specified product. Such judgments consider the specific nature and purposes of the product in relation to Pembina's operations and business model, the location and point of sale, and what purpose the product serves for the customer.

Product sale contracts that are concluded to be derivative instruments and that settle by physical delivery of the underlying commodity are not accounted for as revenue from contracts with customers. Rather, such derivative instruments are recorded on a net basis in revenue as 'Revenue from risk management and other derivative contracts'.

**j. Income Tax**

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

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 relating to investments in subsidiaries and joint arrangements 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 Pembina 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.

100 **Pembina Pipeline Corporation 2025 Annual Report** 

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Deferred tax assets and liabilities are offset only if there is a legally enforceable right to offset, and they relate to income taxes levied by the same taxation authority on either: i) the same taxable entity; or ii) different taxable entities where the intent is to settle current tax liabilities and assets on a net basis, or where tax liabilities and assets will be realized simultaneously in each future period.

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 be applicable to income in the years in which temporary differences are expected to be realized or reversed. Deferred income tax assets are recognized to the extent that it is probable that the deductible temporary differences will be recoverable in future periods and estimates and judgment are used in assessing the recognition. 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. Estimates including, but not limited to, the timing of reversal and future taxability may differ on actual realization and may result in an income tax charge or credit in future periods.

In determining the amount of current and deferred tax, Pembina considers income tax exposures 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 Pembina 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.

**k. Segment Reporting**

An operating segment is a component of Pembina 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 Pembina's President and Chief Executive Officer ("CEO"), Chief Financial Officer ("CFO") and other Officers 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 other Officers include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

**l. New Standards and Interpretations Not Yet Adopted** 

Pembina continually monitors for new accounting standards and amendments to existing accounting standards issued by the IASB. The new standards or amendments are not expected to have a material impact to Pembina's financial statements except for the items outlined below.

**i) IFRS 18 Presentation and Disclosure in Financial Statements ("IFRS 18")**

IFRS 18 was issued in April 2024 and effective January 1, 2027, with early application permitted. The standard introduces key changes to the structure of the statement of earnings and comprehensive income, required disclosures for certain management-defined performance measures, and aggregation and disaggregation of line items in the financial statements. Pembina is currently reviewing the impact of this standard on its Consolidated Financial Statements.

**Pembina Pipeline Corporation 2025 Annual Report** 101

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**4. ACQUISITION**

On April 1, 2024, Pembina completed the acquisition of Enbridge Inc.'s interests in the Alliance, Aux Sable, and NRGreen joint ventures (the "Acquirees") for an aggregate purchase price of $2.8 billion, net of $327 million of assumed debt, representing Enbridge's proportionate share of the indebtedness of Alliance (the "Alliance/Aux Sable Acquisition"). Pembina's completion of the Alliance/Aux Sable Acquisition resulted in an in-substance disposition at fair value of $2.6 billion for the Company's previous investments, which were accounted for under the equity method of accounting at $2.8 billion, as well as allocated goodwill of $380 million, resulting in a loss on disposition of $616 million. The loss was offset by a deferred tax recovery of $626 million. The loss on disposition and the deferred tax recovery were recorded in the Consolidated Statement of Earnings and Comprehensive Income for the year ended December 31, 2024. The fair value of the previously held equity investment in the Acquirees is included as a component of the purchase price.

Following the Acquisition, Pembina owned all equity interests in Alliance, Aux Sable's Canadian operations and NRGreen businesses, and an 85.4 percent interest in Aux Sable's U.S. operations. Pembina made no adjustments to the purchase price allocation during the first quarter of 2025 and finalized it as at March 31, 2025.

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

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| | | | |
|:---|:---|:---|:---|
| **As at April 1, 2024** | **Previously reported** | **Adjustments** | **Final** |
| *($ millions)* | **in Q2 2024** |  |  |
| **Purchase Price Consideration** |  |  |  |
| Cash (net of cash acquired) | 2620 |  | 2620 |
| Equity investment in Acquirees | 2562 |  | 2562 |
| Other | 12 |  | 12 |
|  | **5194** | **—** | **5194** |
| **Fair Value of Net Assets Acquired** |  |  |  |
| Current assets | 240 |  | 240 |
| Property, plant and equipment | 6339 | 6 | 6345 |
| Other long-term assets | 38 | 19 | 57 |
| Goodwill | 805 | (2) | 803 |
| Current liabilities | (219) | (17) | (236) |
| Long-term debt | (596) |  | (596) |
| Deferred tax liabilities | (937) | 1 | (936) |
| Provisions | (52) |  | (52) |
| Other long-term liabilities | (276) | (7) | (283) |
| Non-controlling interest in Aux Sable's U.S. operations | (148) |  | (148) |
|  | **5194** | **—** | **5194** |

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The fair value of Pembina's previous equity investment in the Acquirees was determined based on the negotiated purchase price paid to Enbridge, adjusted for identified control synergies measured using a discounted cash flow model. Goodwill of $803 million recognized on the transaction is a result of deferred taxes recognized on the transaction, which are recorded at the Company's effective tax rate without discounting. Pembina recognized $24 million in acquisition-related expenses. All acquisition-related expenses have been expensed as incurred and are included in other expenses in the Consolidated Financial Statements.

On August 1, 2024, Pembina acquired the remaining 14.6 percent interest in Aux Sable's U.S. operations from certain subsidiaries of The Williams Companies for U.S. $160 million. Pembina's subsequent acquisition of the non-controlling interest was recorded directly in equity.

102 **Pembina Pipeline Corporation 2025 Annual Report** 

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**5. OPERATING SEGMENTS**

Pembina determines its reportable segments based on the nature of operations and includes three operating segments: Pipelines, Facilities and Marketing & New Ventures.

The Pipelines segment includes conventional, oil sands and transmission pipeline systems, crude oil storage and terminalling business and related infrastructure serving various markets and basins across North America.

The Facilities segment includes fractionation facilities and related infrastructure, and a liquefied propane export facility on Canada's West Coast. In addition, all NGL transported along the Alliance Pipeline are extracted through the Pembina operated Channahon Facility at the terminus. These facilities provide Pembina's customers with natural gas and NGL services that are fully accessible to Pembina's other strategically located assets and pipeline systems. The Facilities segment also includes a bulk marine terminal in the Port of Vancouver, Canada.

The Marketing & New Ventures segment undertakes value-added commodity marketing activities including buying and selling products, commodity arbitrage, and optimizing storage opportunities, by contracting capacity on Pembina's and various third-party pipelines and utilizing Pembina's rail fleet and rail logistics capabilities. Marketing & New Ventures activities also include identifying commercial opportunities to further develop other Pembina assets, to optimize Pembina's existing rights to services provided by other parties, and to develop value chain extending projects. Pembina's Marketing business also includes sales of products from Aux Sable's NGL extraction facility near Chicago, Illinois and other natural gas and NGL processing facilities, logistics and distribution assets in the United States and Canada.

The financial results of the operating segments are included below. Performance is measured based on results from operating activities, as included in the internal management reports that are reviewed by Pembina's CEO, CFO and other Officers. These results are 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. Inter-segment transactions are recorded at market value and eliminated under corporate and inter-segment eliminations.

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| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **For the year ended December 31, 2025** | **Pipelines**<sup>(1)</sup> | **Facilities** | **Marketing & New Ventures**<sup>(2)</sup> | **Corporate & Inter-segment Eliminations** | **Total** |  |  |  |  |  |
| *($ millions)* | **Pipelines**<sup>(1)</sup> | **Facilities** | **Marketing & New Ventures**<sup>(2)</sup> | **Corporate & Inter-segment Eliminations** | **Total** |  |  |  |  |  |
| &nbsp;&nbsp;Revenue from external customers | **Pipelines**<sup>(1)</sup> | **Facilities** | **Marketing & New Ventures**<sup>(2)</sup> | **Corporate & Inter-segment Eliminations** | **Total** | 3316 | 357 | 4059 | 46 | 7778 |
| &nbsp;&nbsp;Inter-segment revenue | 205 | 871 | 6 | (1082) |  |  |  |  |  |  |
| Total revenue<sup>(3)</sup> | 3521 | 1228 | 4065 | (1036) | 7778 |  |  |  |  |  |
| &nbsp;&nbsp;Operating expenses<sup>(4)</sup> | 804 | 553 | 30 | (426) | 961 |  |  |  |  |  |
| &nbsp;&nbsp;Cost of goods sold | 51 |  | 3524 | (674) | 2901 |  |  |  |  |  |
| &nbsp;&nbsp;Depreciation and amortization included in gross profit | 641 | 209 | 71 | 11 | 932 |  |  |  |  |  |
| Cost of sales | 1496 | 762 | 3625 | (1089) | 4794 |  |  |  |  |  |
| &nbsp;&nbsp;Share of profit from equity accounted investees | 1 | 134 | 74 |  | 209 |  |  |  |  |  |
| **Gross profit** | 2026 | 600 | 514 | 53 | 3193 |  |  |  |  |  |
| &nbsp;&nbsp;Depreciation included in general and administrative | 2 |  |  | 53 | 55 |  |  |  |  |  |
| &nbsp;&nbsp;Other general and administrative<sup>(4)</sup> | 82 | 23 | 45 | 272 | 422 |  |  |  |  |  |
| &nbsp;&nbsp;Other (income) expense | (5) | 2 | 3 | 20 | 20 |  |  |  |  |  |
| &nbsp;&nbsp;(Gain) loss on disposal of assets | (18) |  | 1 | (96) | (113) |  |  |  |  |  |
| **Results from operating activities** | 1965 | 575 | 465 | (196) | 2809 |  |  |  |  |  |
| &nbsp;&nbsp;Net finance costs | 27 | 13 | 8 | 554 | 602 |  |  |  |  |  |
| **Earnings (loss) before tax** | 1938 | 562 | 457 | (750) | 2207 |  |  |  |  |  |
| &nbsp;&nbsp;Income tax expense |  |  |  |  | 513 |  |  |  |  |  |
| **Earnings (loss)** | 1938 | 562 | 457 | (750) | 1694 |  |  |  |  |  |
| &nbsp;&nbsp;Capital expenditures | 362 | 376 | 20 | 26 | 784 |  |  |  |  |  |
| &nbsp;&nbsp;Contributions to equity accounted investees |  | 243 | 168 |  | 411 |  |  |  |  |  |

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**Pembina Pipeline Corporation 2025 Annual Report** 103

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| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **For the year ended December 31, 2024** | **Pipelines**<sup>(1)</sup> | **Facilities** | **Marketing & New Ventures**<sup>(2)</sup> | **Corporate & Inter-segment Eliminations** | **Total** |  |  |  |  |  |
| *($ millions)* | **Pipelines**<sup>(1)</sup> | **Facilities** | **Marketing & New Ventures**<sup>(2)</sup> | **Corporate & Inter-segment Eliminations** | **Total** |  |  |  |  |  |
| &nbsp;&nbsp;Revenue from external customers | **Pipelines**<sup>(1)</sup> | **Facilities** | **Marketing & New Ventures**<sup>(2)</sup> | **Corporate & Inter-segment Eliminations** | **Total** | 3185 | 358 | 3796 | 45 | 7384 |
| &nbsp;&nbsp;Inter-segment revenue | **Pipelines**<sup>(1)</sup> | **Facilities** | **Marketing & New Ventures**<sup>(2)</sup> | **Corporate & Inter-segment Eliminations** | **Total** | 201 | 769 |  | (970) |  |
| Total revenue<sup>(3)</sup> | 3386 | 1127 | 3796 | (925) | 7384 |  |  |  |  |  |
| &nbsp;&nbsp;Operating expenses<sup>(4)</sup> | 832 | 474 | 25 | (355) | 976 |  |  |  |  |  |
| &nbsp;&nbsp;Cost of goods sold | 40 |  | 3198 | (630) | 2608 |  |  |  |  |  |
| &nbsp;&nbsp;Depreciation and amortization included in gross profit | 557 | 183 | 64 | 8 | 812 |  |  |  |  |  |
| Cost of sales | 1429 | 657 | 3287 | (977) | 4396 |  |  |  |  |  |
| &nbsp;&nbsp;Share of profit from equity accounted investees | 42 | 231 | 55 |  | 328 |  |  |  |  |  |
| **Gross profit** | 1999 | 701 | 564 | 52 | 3316 |  |  |  |  |  |
| &nbsp;&nbsp;Depreciation included in general and administrative | 3 |  |  | 47 | 50 |  |  |  |  |  |
| &nbsp;&nbsp;Other general and administrative<sup>(4)</sup> | 65 | 23 | 48 | 258 | 394 |  |  |  |  |  |
| &nbsp;&nbsp;Other expense (income) | 13 | 3 | (55) | 35 | (4) |  |  |  |  |  |
| &nbsp;&nbsp;Gain on disposal of assets | (13) | (1) | (7) |  | (21) |  |  |  |  |  |
| &nbsp;&nbsp;Loss on acquisition |  |  |  | 616 | 616 |  |  |  |  |  |
| **Results from operating activities** | 1931 | 676 | 578 | (904) | 2281 |  |  |  |  |  |
| &nbsp;&nbsp;Net finance costs | 24 | 10 | 9 | 518 | 561 |  |  |  |  |  |
| **Earnings (loss) before tax** | 1907 | 666 | 569 | (1422) | 1720 |  |  |  |  |  |
| &nbsp;&nbsp;Income tax recovery |  |  |  |  | (154) |  |  |  |  |  |
| **Earnings (loss)** | 1907 | 666 | 569 | (1422) | 1874 |  |  |  |  |  |
| &nbsp;&nbsp;Capital expenditures | 539 | 345 | 30 | 41 | 955 |  |  |  |  |  |
| &nbsp;&nbsp;Contributions to equity accounted investees | 5 | 124 | 242 |  | 371 |  |  |  |  |  |

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<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Pipelines revenue includes $506 million (2024: $501 million) associated with U.S. pipeline revenue.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Marketing & New Ventures includes revenue of $1.1 billion (2024: $845 million) associated with U.S. midstream sales.

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;During 2025, one customer accounted for 10 percent or more of total revenues with $849 million reported throughout all segments. During 2024, no customer accounted for 10 percent or more of total gross profit reported throughout all segments.

<sup>(4)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Pembina incurred $651 million (2024: $576 million) of employee costs, of which $372 million (2024: $329 million) was recorded in operating expenses and $279 million (2024: $247 million) in general and administrative expenses. Employee costs include salaries, benefits and share-based compensation.

**Geographical Information**

**Non-Current Assets**

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| | | |
|:---|:---|:---|
| **For the years ended December 31**  | | |
| *($ millions)* | **2025** | 2024 |
| Canada | **27874** | 27701 |
| United States | **6269** | 6685 |
| **Total non-current assets**<sup>(1)</sup> | **34143** | 34386 |

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<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Excludes derivative financial instruments and post-employment benefit assets.

**6. TRADE RECEIVABLES AND OTHER** 

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| | | |
|:---|:---|:---|
| **As at December 31** | | |
| *($ millions)* | **2025** | 2024 |
| Trade and accrued receivables from customers | **686** | 844 |
| Other receivables | **46** | 89 |
| Prepayments | **34** | 35 |
| Related party receivables *(Note 26)* | **70** | 37 |
| **Total trade receivables and other** | **836** | 1005 |

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**7. INVENTORY**

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| | | |
|:---|:---|:---|
| **As at December 31**  | | |
| *($ millions)* | **2025** | 2024 |
| Crude oil and NGL | **124** | 149 |
| Materials, supplies and other | **160** | 152 |
| **Total inventory** | **284** | 301 |

---

104 **Pembina Pipeline Corporation 2025 Annual Report** 

------

**8. PROPERTY, PLANT AND EQUIPMENT**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| *($ millions)* | **Land and**<br>**Land Rights** | **Pipelines** | **Facilities and**<br>**Equipment** | **Cavern Storage and Other** | **Assets Under Construction** | **Total** |
| **Cost** |  |  |  |  |  |  |
| Balance at December 31, 2023 | 480 | 9613 | 7048 | 2027 | 588 | 19756 |
| Additions and transfers | 4 | 452 | 416 | 141 | (79) | 934 |
| Change in decommissioning provision |  | 8 | 21 | 4 |  | 33 |
| Acquisition (*Note 4*) | 200 | 4538 | 1509 | 41 | 57 | 6345 |
| Foreign exchange | 12 | 216 | 105 | 2 | 5 | 340 |
| Dispositions and other | (2) | (38) | (4) | (94) | (6) | (144) |
| Balance at December 31, 2024 | 694 | 14789 | 9095 | 2121 | 565 | 27264 |
| Additions and transfers | (2) | 77 | 208 | 54 | 444 | 781 |
| Change in decommissioning provision |  | 44 | 33 | 2 |  | 79 |
| Foreign exchange | (8) | (160) | (80) | (2) | (2) | (252) |
| Dispositions and other | (34) | (25) | (42) | (36) | (6) | (143) |
| **Balance at December 31, 2025** | **650** | **14725** | **9214** | **2139** | **1001** | **27729** |
| **Depreciation** |  |  |  |  |  |  |
| Balance at December 31, 2023 | 38 | 2083 | 1316 | 521 |  | 3958 |
| Depreciation | 8 | 268 | 259 | 92 |  | 627 |
| Dispositions and other | 1 | (16) | 19 | (63) |  | (59) |
| Balance at December 31, 2024 | 47 | 2335 | 1594 | 550 |  | 4526 |
| Depreciation | 9 | 311 | 302 | 82 |  | 704 |
| Transfers | (1) | 15 | 4 | (18) |  |  |
| Dispositions and other |  | (23) | (25) | (3) |  | (51) |
| **Balance at December 31, 2025** | **55** | **2638** | **1875** | **611** |  | **5179** |
| **Carrying amounts** |  |  |  |  |  |  |
| Balance at December 31, 2024 | 647 | 12454 | 7501 | 1571 | 565 | 22738 |
| **Balance at December 31, 2025** | **595** | **12087** | **7339** | **1528** | **1001** | **22550** |
| **Assets subject to operating leases** |  |  |  |  |  |  |
| Balance at December 31, 2024 | 43 | 649 | 564 | 111 |  | 1367 |
| **Balance at December 31, 2025** | **42** | **635** | **535** | **123** | **—** | **1335** |

---

**Property, Plant and Equipment Under Construction** 

For the year ended December 31, 2025, included in additions and transfers are capitalized borrowing costs related to the construction of new pipelines or facilities amounting to $27 million (2024: $23 million), with capitalization rates ranging from 4.55 percent to 4.63 percent (2024: 4.45 percent to 4.75 percent).

**Depreciation**

Pipeline assets, facilities and equipment are depreciated using the straight-line method with remaining useful life of one to 75 years with the majority of assets depreciated over 40 years. Cavern storage and other assets are depreciated using the straight-line method over five to 40 years with the majority of assets depreciated over 40 years. These rates are established to depreciate remaining net book value over the shorter of their useful lives or economic lives.

**Pembina Pipeline Corporation 2025 Annual Report** 105

------

**Alliance Negotiated Settlement**

On December 12, 2024, Pembina announced that the Canada Energy Regulatory ("CER") had initiated a toll review of the Alliance Canada pipeline assets. As the toll review continued into the first quarter of 2025, Pembina performed an impairment test during that quarter for the CGU that includes the Alliance Canada assets. The test determined that the recoverable amount of the CGU exceeded the carrying value of $6.3 billion as of March 31, 2025 and as a result, no impairment was recognized.

The recoverable amount calculated in the first quarter of 2025, was determined using a fair value less costs of disposal approach by discounting the projected future cash flows, including probability-weighted settlement outcomes for the Alliance Canada assets (Level 3). The recoverable amount was sensitive to changes in key assumptions, including the outcome of the CER toll review, and the after-tax discount rate of 7.9 percent used to discount the projected cash flows and changes in the commodity price environment. A 1.1 percent increase in the discount rate would have reduced the recoverable amount of the CGU to its carrying value.

At the time the impairment test was performed, the recoverable amount was also sensitive to possible changes to the estimated outcome of the CER toll review. On September 15, 2025, the CER approved the negotiated settlement (the "Alliance Negotiated Settlement") between Alliance Pipeline Limited Partnership ("Alliance") and shippers and interested parties on the Canadian portion of the Alliance Pipeline. The settlement outcome approved by the CER was within the expected range of outcomes used in the impairment test performed in the first quarter of 2025.

106 **Pembina Pipeline Corporation 2025 Annual Report** 

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**9. INTANGIBLE ASSETS AND GOODWILL**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **Intangible Assets** | **Intangible Assets** | **Intangible Assets** | |
|<br>*($ millions)* |<br>**Goodwill** | **Purchase and Sale** <br>**Contracts and Other** | **Customer**<br>**Relationships** | **Total** |<br>**Total Goodwill**<br>**& Intangible**<br>**Assets** |
| **Cost** |  |  |  |  |  |
| Balance at December 31, 2023 | 4551 | 296 | 1826 | 2122 | 6673 |
| Additions |  | 30 | 28 | 58 | 58 |
| Acquisition (*Note 4*) | 803 |  |  |  | 803 |
| Dispositions and other | (380) | (2) | (38) | (40) | (420) |
| Foreign exchange | 50 |  | 61 | 61 | 111 |
| Balance at December 31, 2024 | 5024 | 324 | 1877 | 2201 | 7225 |
| Additions |  | 29 |  | 29 | 29 |
| Dispositions and other |  | (6) |  | (6) | (6) |
| Foreign exchange | (36) |  | (35) | (35) | (71) |
| **Balance at December 31, 2025** | **4988** | **347** | **1842** | **2189** | **7177** |
| **Amortization** |  |  |  |  |  |
| Balance at December 31, 2023 |  | 48 | 560 | 608 | 608 |
| Amortization |  | 17 | 99 | 116 | 116 |
| Dispositions and other |  |  | (27) | (27) | (27) |
| Balance at December 31, 2024 |  | 65 | 632 | 697 | 697 |
| Amortization |  | 22 | 120 | 142 | 142 |
| Dispositions and other |  | 1 | (8) | (7) | (7) |
| **Balance at December 31, 2025** | **—** | **88** | **744** | **832** | **832** |
| **Carrying amounts** |  |  |  |  |  |
| Balance at December 31, 2024 | 5024 | 259 | 1245 | 1504 | 6528 |
| **Balance at December 31, 2025** | **4988** | **259** | **1098** | **1357** | **6345** |

---

Intangible assets have a finite useful life and are amortized using the straight-line method over five to 50 years.

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

---

| | | |
|:---|:---|:---|
| **As at December 31** | **2025** | 2024 |
| *($ millions)* | **2025** | 2024 |
| Pipelines | **3057** | 3089 |
| Facilities | **440** | 442 |
| Marketing & New Ventures | **1491** | 1493 |
| **Total goodwill** | **4988** | 5024 |

---

**Goodwill Impairment Testing**

For the purpose of impairment testing, goodwill is allocated to Pembina's operating segments which represent the groups of CGUs at which goodwill is monitored for management purposes. Annually, impairment testing for goodwill is performed in the fourth quarter.

**Pembina Pipeline Corporation 2025 Annual Report** 107

------

The goodwill test was performed and no impairment was identified as it was determined that the recoverable amount for each operating segment exceeded the carrying amount, including goodwill. The recoverable amount was determined using a fair value less costs of disposal approach by discounting each operating segment's expected future cash flows (Level 3). The key assumptions that impact the recoverable amount include the following:

• Cash flows for the first five years are projected based on past experience, actual operating results and the business plan approved by management. Cash flows for Pipelines and Facilities incorporate assumptions regarding contracted volumes and rates, which are based on market expectations. In addition, revenue and cost of product projections for Marketing & New Ventures incorporate assumptions regarding commodity volumes and pricing, which are sensitive to changes in the commodity price environment.

• Cash flows for the remaining years of the useful lives of the assets within each operating segment are extrapolated for periods up to 74 years (2024: 75 years) using a long-term growth rate, except where contracted, long-term cash flows indicate that no growth rate should be applied or a specific reduction in cash flows is more appropriate.

• After-tax discount rates are applied in determining the recoverable amount of operating segments. Discount rates are estimated based on the risk free rate and average cost of debt, targeted debt to equity ratio, in addition to estimates of the specific operating segment's equity risk premium, size premium, projection risk, asset risk, and betas.

For each operating segment, key assumptions and discount rate sensitivity are presented below:

---

| | | | |
|:---|:---|:---|:---|
| | **Operating Segments** | **Operating Segments** | **Operating Segments** |
|<br>**As at December 31, 2025** | **Pipelines** | **Facilities** | **Marketing & <br>New Ventures** |
| **Key assumptions used** | | | |
| Average annual pre-tax cash flow *($ millions)* | 2162 | 1908 | 890 |
| After-tax discount rate | 5.8% | 5.9% | 8.3% |
| Long-term growth rate | 1.6% | 2.2% | 2.3% |
| **Incremental change in rates that would result in carrying value equal to recoverable amount** |  |  |  |
| Increase in after-tax discount rate<sup>(1)</sup> | 350 bps | 440 bps | 1,680 bps |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Presented in basis points ("bps").

108 **Pembina Pipeline Corporation 2025 Annual Report** 

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**10. INVESTMENTS IN EQUITY ACCOUNTED INVESTEES**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Ownership Interest** <br>**at December 31** *(percent)* | **Ownership Interest** <br>**at December 31** *(percent)* | **Share of Profit from Equity Investments** | **Share of Profit from Equity Investments** | **Investment in Equity Accounted <br>Investees at December 31** | **Investment in Equity Accounted <br>Investees at December 31** |
| | **Ownership Interest** <br>**at December 31** *(percent)* | **Ownership Interest** <br>**at December 31** *(percent)* | **For the years ended December 31**  | **For the years ended December 31**  | **Investment in Equity Accounted <br>Investees at December 31** | **Investment in Equity Accounted <br>Investees at December 31** |
| *($ millions)* | **2025** | 2024 | **2025** | 2024 | **2025** | 2024 |
| PGI<sup>(1)</sup> | **60** | 60 | **131** | 227 | **3578** | 3740 |
| Cedar LNG | **49.9** | 49.9 | **14** | 22 | **591** | 430 |
| Alliance<sup>(2)</sup> | **100** | 100 | **—** | 42 | **—** |  |
| Aux Sable<sup>(2)</sup> | **100** | 100 | **—** | 33 | **—** |  |
| Greenlight<sup>(3)</sup> | **50** |  | **60** |  | **82** |  |
| Other<sup>(4)</sup> | **50 - 75** | 50 - 75 | **4** | 4 | **93** | 97 |
| **Total** |  |  | **209** | 328 | **4344** | 4267 |

---

<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>PGI share of profit for the twelve months ended December 31, 2025, includes an impairment of a single CGU and an impairment of an asset within PGI of $146 million (net to Pembina, after tax), due to contract expirations and future utilization uncertainty.

<sup>(2)&nbsp;&nbsp;&nbsp;&nbsp;</sup>On April 1, 2024, Pembina completed its acquisition of Enbridge's interests in the Alliance, Aux Sable, and NRGreen joint ventures. On August 1, 2024, Pembina acquired the remaining non-controlling interest in Aux Sable's U.S. operations.

<sup>(3)&nbsp;&nbsp;&nbsp;&nbsp;</sup>In the first quarter of 2025, Pembina entered into agreements for a 50 percent interest in the Greenlight Electricity Centre Limited Partnership, which is developing a power generation facility to serve data centre customers.

<sup>(4)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Other includes Pembina's interest in Grand Valley, Fort Corp and Alberta Carbon Grid Heartland Limited Partnership and the proposed Heartland carbon dioxide transportation and sequestration system ("ACG").

Investments in equity accounted investees include the unamortized differences between the purchase price and the underlying net book value of the investee's assets and liabilities at the purchase date, which is comprised of $1.1 billion (2024: $1.1 billion) in goodwill and $(0.4) billion (2024: $(0.4) billion) in property, plant and equipment and intangible assets.

**Sale of Land**

During the fourth quarter of 2025, Pembina completed the sale of land to Greenlight, a related party, for proceeds of $21 million and a gain of $6 million. Greenlight subsequently sold land, including land acquired from Pembina, to a third-party potential customer for a pre-tax gain of $62 million (net to Pembina).

**Distributions and Contributions**

The following table summarizes distributions from and contributions to Pembina's investments in equity accounted investees:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **For the years ended December 31** | **Distributions**<sup>(1)</sup> | **Distributions**<sup>(1)</sup> | **Contributions** | **Contributions** |
| *($ millions)* | **2025** | 2024 | **2025** | 2024 |
| PGI | **534** | 505 | **243** | 124 |
| Cedar LNG | **—** |  | **147** | 241 |
| Alliance | **—** | 80 | **—** | 5 |
| Aux Sable | **—** | 31 | **—** | 1 |
| Greenlight | **—** |  | **21** |  |
| Other<sup>(2)</sup> | **10** | 10 | **—** |  |
| **Total** | **544** | 626 | **411** | 371 |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Distributions exclude returns of capital. In 2025, Pembina received no return of capital from Cedar LNG (2024: $63 million from Cedar LNG).

<sup>(2)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Other includes Pembina's interest in Grand Valley, Fort Corp, and ACG.

Distributions received from equity accounted investees, excluding returns of capital, are included in operating activities in the Consolidated Statement of Cash Flows.

Contributions made to and returns of capital received from investments in equity accounted investees are included in investing activities in the Consolidated Statement of Cash Flows.

**Financing Activities for Equity Accounted Investees**

**PGI**

On March 21, 2025, pursuant to an amended and restated credit agreement, PGI exercised the accordion feature under its existing revolving credit facility and opened a new $500 million revolving credit facility, maturing on March 21, 2027. Concurrently, PGI reestablished a $500 million accordion under the credit facility.

**Pembina Pipeline Corporation 2025 Annual Report** 109

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**Summarized Financial Information**

Financial information for Pembina's equity accounted investees is presented (at 100 percent) in the following tables and is prepared under the financial reporting framework adopted by each equity accounted investee (IFRS except for Alliance, Aux Sable, and Grand Valley which are in accordance with U.S. GAAP). Differences between the equity accounted investee's earnings (loss) and earnings attributable to Pembina relate to the different accounting standards applied and amortization of the excess of the purchase price over the underlying net book value of the investee's assets and liabilities at the purchase date.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **For the year ended December 31, 2025**<br>*($ millions)* | **PGI** | **Cedar LNG** | **Greenlight** | **Other**<sup>(1)</sup> |
| **Earnings and Comprehensive Income** | | | | |
| Revenue | 1678 |  |  | 40 |
| Expenses | (460) | (6) | (3) | (16) |
| Depreciation and amortization | (396) |  |  | (15) |
| Impairment expense | (322) |  |  |  |
| Interest expense | (237) |  | (1) | (1) |
| Finance income and other | 49 | 34 |  |  |
| Gain on land sale |  |  | 124 |  |
| Income tax expense | (77) |  |  |  |
| Earnings | **235** | **28** | **120** | **8** |
| Earnings attributable to Pembina | **131** | **14** | **60** | **4** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **As at December 31, 2025**<br>*($ millions)* | **PGI** | **Cedar LNG** | **Greenlight** | **Other**<sup>(1)</sup> |
| **Statements of Financial Position** | | | | |
| Cash and cash equivalents | 18 | 41 | 133 | 4 |
| Other current assets | 529 | 12 | 9 | 4 |
| Non-current assets | 13364 | 2725 | 82 | 75 |
| Current trade, other payables and provisions | 249 | 260 | 9 | 3 |
| Other current liabilities | 100 | 41 |  | 3 |
| Non-current trade, other payables and provisions | 145 | 1 |  |  |
| Other non-current liabilities | 7432 | 1551 | 54 | 19 |

---

<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Other includes Pembina's interest in Grand Valley, Fort Corp, and ACG.

110 **Pembina Pipeline Corporation 2025 Annual Report** 

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **For the year ended December 31, 2024**<br>*($ millions)* | **PGI** | **Cedar LNG** | **Alliance**<sup>(1)</sup> | **Aux Sable**<sup>(1)</sup> | **Other**<sup>(3)</sup> |
| **Earnings and Comprehensive Income** | | | | | |
| Revenue | 1676 |  | 252 | 329 | 44 |
| Expenses | (522) | (3) | (81) | (238) | (20) |
| Depreciation and amortization | (368) |  | (40) | (13) | (14) |
| Interest expense | (253) |  | (11) |  | (1) |
| Finance (costs) income and other | (39) | 47 | 2 |  | (1) |
| Income tax expense | (122) |  |  |  |  |
| Earnings | **372** | **44** | **122** | **78** | **8** |
| Earnings attributable to Pembina | **227** | **22** | **42** | **33** | **4** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **As at December 31, 2024**<br>*($ millions)* | **PGI** | **Cedar LNG** | **Alliance**<sup>(2)</sup> | **Aux Sable**<sup>(2)</sup> | **Other**<sup>(3)</sup> |
| **Statements of Financial Position** | | | | | |
| Cash and cash equivalents |  | 79 |  |  | 4 |
| Other current assets | 501 | 3 |  |  | 5 |
| Non-current assets | 13033 | 1665 |  |  | 86 |
| Current trade, other payables and provisions | 210 | 7 |  |  | 3 |
| Other current liabilities | 47 |  |  |  | 3 |
| Non-current trade, other payables and provisions | 129 |  |  |  |  |
| Other non-current liabilities | 6913 | 1048 |  |  | 22 |

---

<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>The accounting for the results of all Alliance, Aux Sable, and NRGreen businesses changed from the equity method of accounting to being fully consolidated and incorporated into Pembina's financial results commencing April 1, 2024. As such, the numbers presented reflect only the results for the three months ended March 31, 2024.

<sup>(2)&nbsp;&nbsp;&nbsp;&nbsp;</sup>As at December 31, 2024, Pembina holds 100 percent equity ownership in all Alliance, Aux Sable, and NRGreen businesses.

<sup>(3)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Other includes Pembina's interest in Grand Valley, Fort Corp, and ACG.

**PGI Goodwill Impairment Testing**

At each reporting date, Pembina determines whether there is objective evidence that its equity accounted investments are impaired. For the period ended December 31, 2025, it was determined that there is no objective evidence indicating that Pembina's equity accounted investments are impaired. Pembina's assessment of whether there is objective evidence the equity accounted investment in PGI is impaired is sensitive to a decrease in PGI's projected cash flows, a decrease in the long-term growth rate, or an increase in the after-tax discount rate, any of which could be objective evidence that Pembina's equity accounted investment in PGI is impaired. Pembina also believes an impairment expense recognized by PGI as a result of its annual goodwill impairment test would provide objective evidence that Pembina's equity accounted investment in PGI is impaired.

PGI performed its annual goodwill impairment test in the third quarter of 2025 calculating the recoverable amount based on the fair value less cost to sell. No impairment expense was recognized.

There is measurement uncertainty associated with PGI's annual impairment test. The key assumptions used by PGI that impact the recoverable amount were the projected cash flows for the remaining useful life of the assets, the after-tax discount rate and the long-term growth rate. The following table provides sensitivities to reasonably possible changes in each estimate that could result in an impairment of PGI's goodwill.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **As at December 31** | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 |
|  | **Actual** | **Increase (decrease) required for impairment** | **Increase (decrease) required for impairment** | Actual | Increase (decrease) required for impairment | Increase (decrease) required for impairment |
| **Key assumptions used** |  |  |  |  |  |  |
| Average annual pre-tax cash flow *($ millions)*<sup>(1)</sup> | **1303** | **(20.8** | **%)** | 1232 | (6.0 | %) |
| After-tax discount rate | **6.9%** | **230** | **bps** | 7.6% | 60 | bps |
| Long-term growth rate | **1.9%** | **(470)** | **bps** | 1.8% | (90) | bps |

---

<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Average annual forecasted pre-tax cash flows represent 100 percent of PGI's forecasted cash flows.

**Pembina Pipeline Corporation 2025 Annual Report** 111

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**11. INCOME TAXES**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Deferred Income Tax Expense (Recovery)** | **Deferred Income Tax Expense (Recovery)** | **Deferred Income Tax Liability (Asset)** | **Deferred Income Tax Liability (Asset)** |
| | **For the years ended December 31** | **For the years ended December 31** | **As at December 31** | **As at December 31** |
|<br>*($ millions)* | **2025** | **2024** | **2025** | **2024** |
| Derivative financial instruments | (15) | (39) | (33) | (25) |
| Share-based payments | (2) | 3 | (38) | (36) |
| Provisions | (30) | (9) | (136) | (106) |
| Benefit of loss carryforwards | 8 | 23 | (679) | (687) |
| Other deductible temporary differences | 25 | 66 | (91) | (107) |
| Property, plant and equipment | 128 | 85 | 3454 | 3326 |
| Employee benefits | (3) | (3) | 9 | 2 |
| Intangible assets | 1 | 9 | 270 | 269 |
| Investments in equity accounted investees | 49 | (635) | 200 | 151 |
| Taxable limited partnership income deferral | (80) | 85 | 1 | 81 |
| Total net deferred income tax expense (recovery) and liabilities<sup>(1)</sup> | **81** | **(415)** | **2957** | **2868** |

---

<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>As at December 31, 2025, there were no deferred income tax liabilities related to acquisitions (2024: $936 million deferred income tax liability).

**Reconciliation of Effective Tax Rate**

---

| | | |
|:---|:---|:---|
| **For the years ended December 31**  | | |
| *($ millions, except as noted)* | **2025** | 2024 |
| Earnings before income tax | **2207** | 1720 |
| Canadian statutory tax rate *(percent)* | **23.3** | 23.8 |
| Income tax at statutory rate | **514** | 409 |
| Tax rate changes and foreign rate differential | **29** | 4 |
| Changes in estimate and other | **10** | (24) |
| Permanent items | **(10)** | (1) |
| Income in equity accounted investee | **(30)** | (54) |
| Acquisition impact | **—** | (488) |
| Income tax expense (recovery) | **513** | (154) |

---

The increase in the effective tax rate from (9.0) percent to 23.2 percent is primarily due to the deferred tax liability derecognition in prior year in connection with Pembina acquiring a controlling ownership interest in Alliance and Aux Sable.

**Income Tax Expense**

---

| | | |
|:---|:---|:---|
| **For the years ended December 31**  | | |
| *($ millions)* | **2025** | 2024 |
| **Current tax expense** | **432** | 261 |
| **Deferred tax expense (recovery)** |  |  |
| Origination and reversal of temporary differences | **58** | (476) |
| Tax rate changes on deferred tax balances | **16** | (1) |
| Decrease in tax loss carry forward | **7** | 62 |
| Total deferred tax expense (recovery) | **81** | (415) |
| Total income tax expense (recovery) | **513** | (154) |

---

**Deferred Tax Items Recovered Directly in Equity**

---

| | | |
|:---|:---|:---|
| **For the years ended December 31**  | | |
| *($ millions)* | **2025** | 2024 |
| Preferred share issue costs | **(1)** | (1) |
| Other comprehensive (loss) income *(Note 22)*: |  |  |
| &nbsp;&nbsp;Change in fair value of net investment hedges | **(7)** | 5 |
| &nbsp;&nbsp;Remeasurements of defined benefit liability or asset | **(10)** | (7) |
| Deferred tax items recovered directly in equity | **(18)** | (3) |

---

112 **Pembina Pipeline Corporation 2025 Annual Report** 

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Pembina has temporary differences associated with its investments in subsidiaries. At December 31, 2025, Pembina had not recorded a deferred tax asset or liability for these temporary differences (2024: nil) as Pembina controls the timing of the reversal and it is not probable that the temporary differences will reverse in the foreseeable future.

At December 31, 2025, Pembina had U.S. $1.6 billion (2024: U.S. $1.7 billion) of U.S. tax losses that do not expire and $34 million (2024: $32 million) of Canadian tax losses that will expire after 2034. Pembina has determined that it is probable that future taxable profits will be sufficient to utilize these losses. The gross amount of deductible temporary differences for which no deferred tax asset is recognized as at December 31, 2025 is $57 million (2024: $57 million).

**12. TRADE PAYABLES AND OTHER**

---

| | | |
|:---|:---|:---|
| **As at December 31** | | |
| *($ millions)* | **2025** | 2024 |
| Trade payables | **559** | 530 |
| Other payables & accrued liabilities | **662** | 672 |
| Alliance refundable liability<sup>(1)</sup> | **100** |  |
| **Total trade payables and other** | **1321** | 1202 |

---

<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Represents a refundable liability following the Alliance Negotiated Settlement.

**Pembina Pipeline Corporation 2025 Annual Report** 113

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**13. LEASES**

**Lessee Leases**

Pembina enters into arrangements to secure access to assets necessary for operating the business. Leased (right-of-use) assets include terminals, rail, buildings, land and other assets. Total cash outflows related to leases were $117 million for the year ended December 31, 2025 (2024: $110 million).

**Right-of-Use Assets**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| *($ millions)* | **Terminals** | **Rail** | **Buildings** | **Land & Other** | **Total** |
| Balance at January 1, 2023 | 158 | 146 | 113 | 106 | 523 |
| Additions and adjustments |  | 32 |  | 24 | 56 |
| Acquisition *(Note 4)* | 12 | 1 |  | 15 | 28 |
| Depreciation | (14) | (35) | (15) | (13) | (77) |
| Balance at December 31, 2024 | 156 | 144 | 98 | 132 | 530 |
| Additions and adjustments | 23 | 27 | 1 | 28 | 79 |
| Depreciation | (11) | (36) | (15) | (21) | (83) |
| **Balance at December 31, 2025** | **168** | **135** | **84** | **139** | **526** |

---

**Lessor Leases**

Pembina has entered into contracts for the use of its assets that have resulted in lease treatment for accounting purposes. Assets under operating leases include pipelines, terminals and storage assets. See Note 8 for carrying value of property, plant and equipment under operating leases. Assets under finance leases include pipelines, terminals, and storage assets.

**Maturity of Lease Receivables** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| **As at December 31** | **2025** | **2025** | **2024** | **2024** |
| *($ millions)* | **Operating Leases** | **Finance Leases** | **Operating Leases** | **Finance Leases** |
| Less than one year | 177 | 32 | 186 | 30 |
| One to two years | 164 | 34 | 168 | 31 |
| Two to three years | 149 | 34 | 160 | 31 |
| Three to four years | 142 | 34 | 145 | 31 |
| Four to five years | 106 | 35 | 139 | 32 |
| More than five years | 342 | 292 | 450 | 294 |
| Total undiscounted lease receipts | 1080 | 461 | 1248 | 449 |
| Unearned finance income on lease receipts |  | (238) |  | (241) |
| Discounted unguaranteed residual value |  | 23 |  | 21 |
| Finance lease receivable |  | 246 |  | 229 |
| Less current portion<sup>(1)</sup> |  | (7) |  | (6) |
| Total non-current |  | 239 |  | 223 |

---

<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Included in trade receivables and other on the Consolidated Statement of Financial Position.

114 **Pembina Pipeline Corporation 2025 Annual Report** 

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**14. LONG-TERM DEBT**

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

**Carrying Value, Terms and Conditions, and Debt Maturity Schedule**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | | | **Carrying Value** | **Carrying Value** |
| *($ millions)* | **Authorized at December 31, 2025** | **Nominal Interest Rate** | **Year of Maturity** | **December 31, 2025** | December 31, 2024 |
| **Variable rate debt** |  |  |  |  |  |
| Senior unsecured credit facilities<sup>(1)(2)</sup> | 3493 | 4.00<sup>(3)</sup> | Various<sup>(1)</sup> | **1305** | 1148 |
| **Fixed rate debt** |  |  |  |  |  |
| Senior unsecured medium-term notes series 3 | 450 | 4.75 | 2043 | **450** | 450 |
| Senior unsecured medium-term notes series 4 | 600 | 4.81 | 2044 | **600** | 600 |
| Senior unsecured medium-term notes series 5 |  | 3.54 | 2025 | **—** | 550 |
| Senior unsecured medium-term notes series 6 | 600 | 4.24 | 2027 | **600** | 600 |
| Senior unsecured medium-term notes series 7 | 600 | 3.71 | 2026 | **600** | 600 |
| Senior unsecured medium-term notes series 9 | 550 | 4.74 | 2047 | **550** | 550 |
| Senior unsecured medium-term notes series 10 | 650 | 4.02 | 2028 | **650** | 650 |
| Senior unsecured medium-term notes series 11 | 800 | 4.75 | 2048 | **800** | 800 |
| Senior unsecured medium-term notes series 12 | 650 | 3.62 | 2029 | **650** | 650 |
| Senior unsecured medium-term notes series 13 | 700 | 4.54 | 2049 | **700** | 700 |
| Senior unsecured medium-term notes series 15 | 600 | 3.31 | 2030 | **600** | 600 |
| Senior unsecured medium-term notes series 16 | 400 | 4.67 | 2050 | **400** | 400 |
| Senior unsecured medium-term notes series 17 | 500 | 3.53 | 2031 | **500** | 500 |
| Senior unsecured medium-term notes series 18 | 500 | 4.49 | 2051 | **500** | 500 |
| Senior unsecured medium-term notes series 20 | 750 | 5.02 | 2032 | **750** | 750 |
| Senior unsecured medium-term notes series 21 | 600 | 5.21 | 2034 | **600** | 600 |
| Senior unsecured medium-term notes series 22 | 750 | 5.67 | 2054 | **750** | 750 |
| Senior unsecured medium-term notes series 23 | 650 | 5.22 | 2033 | **650** | 650 |
| Total fixed rate loans and borrowings outstanding |  |  |  | **10350** | 10900 |
| Deferred financing costs |  |  |  | **11** | 12 |
| **Total loans and borrowings** |  |  |  | **11666** | 12060 |
| Less current portion loans and borrowings |  |  |  | **(600)** | (1525) |
| Total non-current loans and borrowings |  |  |  | **11066** | 10535 |
| **Fixed-to-fixed rate subordinated notes** |  |  |  |  |  |
| Subordinated notes, series 1 |  | 4.80 | 2081 | **—** | 596 |
| Subordinated notes, series 2 | 425 | 5.95 | 2055 | **425** |  |
| Subordinated notes, series 3 | 600 | 4.80 | 2081 | **600** |  |
|  |  |  |  | **1025** | 596 |
| Deferred financing costs |  |  |  | **(3)** |  |
| **Total fixed-to-fixed rate subordinated notes** |  |  |  | **1022** | 596 |

---

<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Pembina's unsecured credit facilities include a $2.5 billion revolving facility that matures in June 2030, an unsecured $600 million non-revolving term loan that matures in October 2027, and a $50 million operating facility that matures in June 2026, which is typically renewed on an annual basis. During the fourth quarter of 2025, Pembina fully repaid the Canadian and U.S. term loans originally assumed from Alliance (December 31, 2024: $270 million and U.S. $240 million, respectively), prior to their contractual maturity dates in December 2025. The $2.5 billion revolving facility reflects the cancellation of the $1.0 billion sustainability-linked revolving credit facility in September 2025, which previously matured in June 2027, and its addition into the Revolving Facility.

<sup>(2)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Includes U.S. $250 million variable rate debt outstanding at December 31, 2025 (2024: U.S. $250 million). The U.S. dollar denominated non-revolving term loan is designated as a hedge of the Company's net investment in selected foreign operations with a U.S. dollar functional currency.

<sup>(3)&nbsp;&nbsp;&nbsp;&nbsp;</sup>The nominal interest rate is the weighted average of all drawn credit facilities based on Pembina's credit rating at December 31, 2025. Borrowings under the credit facilities bear interest at prime rates, the Canadian Overnight Repo Rate Average ("CORRA"), or the USD Secured Overnight Financing Rate ("SOFR"), plus applicable margins.

**Pembina Pipeline Corporation 2025 Annual Report** 115

------

On April 2, 2025, Pembina completed an extension on its unsecured U.S. $250 million non-revolving term loan, which now matures in April 2030.

On June 6, 2025, Pembina closed a $200 million offering of Fixed-to-Fixed Rate Subordinated Notes, Series 2 (the "Series 2 Subordinated Notes") due June 6, 2055. The Series 2 Subordinated Notes bear interest at a rate of 5.95 percent, which will reset on June 6, 2035, and on every fifth anniversary thereafter, based on the five-year Government of Canada yield plus 2.713 percent, provided that the interest rate during any subsequent fixed rate period will not be less than 5.95 percent. Pembina's Series 2 Subordinated Notes are subject to optional redemption by Pembina from March 6, 2035 to June 6, 2035, and thereafter, on any interest payment date or any interest reset date, as applicable. Pembina may also redeem the Series 2 Subordinated Notes in certain other limited circumstances. Pembina used the net proceeds of the offering of the Series 2 Subordinated Notes to fund the redemption of its outstanding Cumulative Redeemable Rate Reset Class A Preferred Shares, Series 19 ("Series 19 Class A Preferred Shares") on June 30, 2025.

On July 23, 2025, Pembina announced the approval of amendments (the "Amendments") to the indenture governing Pembina's 4.80 percent Fixed-to-Fixed Rate Subordinated Notes, Series 1 (the "Series 1 Subordinated Notes") due January 25, 2081. The Amendments provided for, among other things, the exchange (the "Note Exchange") of all of the outstanding Series 1 Subordinated Notes for an equal principal amount of 4.80 percent Fixed-to-Fixed Rate Subordinated Notes, Series 3 of Pembina (the "Series 3 Subordinated Notes") due January 25, 2081. The Series 3 Subordinated Notes have the same economic terms as the Series 1 Subordinated Notes, including interest rate, interest payment dates, interest reset dates, maturity date and redemption provisions, but do not provide for an entitlement to delivery of preferred shares upon the occurrence of certain bankruptcy and related events. The Note Exchange was completed on July 25, 2025, following the execution of the supplemental indenture implementing the Amendments. The Series 3 Subordinated Notes rank equally in right of payment with the Series 2 Subordinated Notes. Pursuant to the mandatory redemption provisions attached to the Class A Preferred Shares, Series 2021-A (the "Series 2021-A Class A Preferred Shares"), in connection with the Note Exchange, on July 28, 2025, Pembina redeemed all of the issued and outstanding Series 2021-A Class A Preferred Shares (refer to the "Share Capital - Preferred Shares" section of this MD&A for further information).

On September 9, 2025, Pembina completed an extension on its $2.5 billion Revolving Facility, which now matures on June 1, 2030.

On October 10, 2025, Pembina closed a $225 million offering of Series 2 Subordinated Notes pursuant to a re-opening. Following closing of the offering of the Series 2 Subordinated Notes, $425 million aggregate principal amount of Series 2 Subordinated Notes are issued and outstanding. Pembina used the net proceeds of the offering to fund the redemption of its outstanding Cumulative Redeemable Rate Reset Class A Preferred Shares, Series 9 (the "Series 9 Class A Preferred Shares") on December 1, 2025 and for general corporate purposes.

On October 31, 2025, Pembina closed a $600 million Two-Year Term Loan with certain existing lenders. The proceeds of the Two-Year Term Loan have been used to repay the $270 million term loan outstanding at Alliance, and existing amounts drawn under Pembina's $2.5 billion revolving credit facility. The Two-Year Term Loan has an initial term of two years and is pre-payable at the option of Pembina. The other terms and conditions of the Two-Year Term Loan, including financial covenants, are substantially similar to Pembina's $2.5 billion revolving credit facility.

For more information about Pembina's exposure to interest rate, foreign currency and liquidity risk, see Note 23 *Financial Instruments & Risk Management*.

116 **Pembina Pipeline Corporation 2025 Annual Report** 

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**Covenants**

Pembina is subject to certain financial covenants under its medium-term note indentures and credit facilities agreements and complies with all financial covenants as of December 31, 2025. Pembina's financial covenants under the indenture governing its medium-term notes and the agreements governing the credit facilities include the following:

---

| | | |
|:---|:---|:---|
| **Debt** | **Financial Covenant**<sup>(1)</sup> | **Ratio** |
| Senior unsecured medium-term notes | Funded Debt to Capitalization | Maximum 0.70<sup>(2)</sup> |
| Credit facilities | Debt to Capital | Maximum 0.70<sup>(3)</sup> |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Terms as defined in relevant agreements.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Covenant must be met at the reporting date and filed within 90 days after the end of each fiscal year and within 10 business days after filing of the Consolidated Financial Statements.

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Covenant must be met at the reporting date and filed within 120 days after the end of each fiscal year and 60 days after each quarter.

**15. DECOMMISSIONING PROVISION**

The decommissioning provision reflects the discounted cash flows expected to be incurred to decommission Pembina's pipelines, facilities and equipment, cavern storage, and other assets, including estimated environmental reclamation and remediation costs.

The undiscounted cash flows at the time of decommissioning are calculated using an estimated timing of economic outflows over the next 83 years, with the majority estimated at 48 years. The estimated economic lives of the underlying assets form the basis for determining the timing of economic outflows. Pembina applied credit-adjusted risk-free rates of 4.6 percent to 5.6 percent (2024: 4.6 percent to 5.5 percent) and an inflation rate of 2.3 percent (2024: 2.3 percent).

---

| | | |
|:---|:---|:---|
| *($ millions)* | **2025** | 2024 |
| Balance at January 1 | **432** | 342 |
| Unwinding of discount rate | **25** | 20 |
| Change in rates | **(8)** | 49 |
| Provisions settled in the period | **(8)** | (10) |
| Acquisition *(Note 4)* | **—** | 52 |
| Disposition | **(19)** | (17) |
| Change in cost estimates and other | **126** | (4) |
| Total | **548** | 432 |
| Current portion of provision<sup>(1)</sup> | **8** | 6 |
| **Balance at December 31** | **540** | 426 |

---

<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Included in trade payables and other on the Consolidated Statement of Financial Position.

Pembina collects funds from shippers for future abandonment costs for CER pipelines. Funds collected from shippers are set aside in trusts and are eligible to be withdrawn for abandonment activities related to the applicable CER pipelines. The funds collected from shippers are reported within revenue and a reimbursement right is recorded within other assets. As at December 31, 2025, Pembina's reimbursement right is valued at $36 million (2024: $20 million).

**Pembina Pipeline Corporation 2025 Annual Report** 117

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**16. SHARE CAPITAL**

Pembina is authorized to issue an unlimited number of common shares, without par value, 254,850,850 Class A preferred shares, issuable in series and an unlimited number of Class B preferred shares. The holders of the common shares are entitled to receive notice of, attend and vote at any meeting of the shareholders of Pembina, receive dividends declared and share in the remaining property of Pembina upon distribution of the assets of Pembina among its shareholders for the purpose of winding-up its affairs.

**Common Share Capital**

---

| | | |
|:---|:---|:---|
| *($ millions, except as noted)* | **Number of** <br>**Common Shares**<br>*(millions)* | **Common**<br>**Share Capital** |
| Balance at December 31, 2023 | 549 | 15765 |
| Issued in connection with subscription receipts conversion, net of issue costs | 30 | 1230 |
| Share-based payment transactions<sup>(1)</sup> | 2 | 13 |
| Balance at December 31, 2024 | 581 | 17008 |
| Share-based payment transactions<sup>(1)</sup> |  | 8 |
| **Balance at December 31, 2025** | **581** | **17016** |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Exercised options are settled by issuing the net number of common shares equivalent to the gain upon exercise.

**Share Repurchase Program**

On May 14, 2025, the Toronto Stock Exchange ("TSX") accepted the renewal of Pembina's normal course issuer bid (the "NCIB") that allows the Company to repurchase, at its discretion, up to five percent of the Company's outstanding common shares (representing approximately 29 million common shares) through the facilities of the TSX, the New York Stock Exchange and/or alternative Canadian trading systems or as otherwise permitted by applicable securities law, subject to certain restrictions on the number of common shares that may be purchased on a single day. The NCIB commenced on May 16, 2025 and will expire on the earlier of May 15, 2026, the date on which Pembina has acquired the maximum number of common shares allowable under the NCIB or the date on which Pembina otherwise decides not to make any further repurchases under the NCIB. No common shares were purchased by Pembina during the years ended December 31, 2025 and 2024.

**Preferred Share Capital**

---

| | | |
|:---|:---|:---|
| *($ millions, except as noted)* | **Number of**<br>**Preferred Shares**<br>*(millions)* | **Preferred**<br>**Share Capital** |
| Balance at December 31, 2023 | 93 | 2199 |
| Class A, Series 22 Preferred shares reclassification |  | (26) |
| Part VI.1 tax |  | (9) |
| Balance at December 31, 2024 | 93 | 2164 |
| Class A, Series 9 Preferred Shares redeemed | (9) | (225) |
| Class A, Series 19 Preferred Shares redeemed | (8) | (200) |
| Class A, Series 22 Preferred Shares redeemed | (1) |  |
| Part VI.1 tax |  | (10) |
| **Balance at December 31, 2025** | **75** | **1729** |

---

On January 8, 2025, Pembina redeemed all of the approximately one million issued and outstanding Cumulative Redeemable Floating Rate Class A Preferred Shares, Series 22 ("Series 22 Class A Preferred Shares") at a redemption price of $25.50 per Series 22 Class A Preferred Share, plus all accrued and unpaid dividends thereon. Pembina had announced its intention to redeem the Series 22 Class A Preferred Shares during the fourth quarter of 2024 and, as a result, the equity was reclassified as a financial liability of approximately $26 million for the total redemption price in that same quarter.

118 **Pembina Pipeline Corporation 2025 Annual Report** 

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On June 30, 2025, Pembina redeemed all of the eight million issued and outstanding Series 19 Class A Preferred Shares at a redemption price of $25.00 per Series 19 Class A Preferred Share. The total redemption price for the Series 19 Class A Preferred Shares was $200 million.

On July 28, 2025, in connection with the Note Exchange, Pembina redeemed all of the 600,000 issued and outstanding Series 2021-A Class A Preferred Shares, which were deliverable to holders of the Series 1 Subordinated Notes following the occurrence of certain bankruptcy and related events. The Series 2021-A Class A Preferred Shares were issued by Pembina to Computershare Trust Company of Canada to be held in trust to satisfy its obligations under the indenture governing the Series 1 Subordinated Notes.

On December 1, 2025, in connection with the October 10, 2025 offering of Series 2 Subordinated Notes, Pembina redeemed all of its outstanding Series 9 Class A Preferred Shares at a price equal to $25.00 per Series 9 Class A Preferred Share, for a total redemption price of $225 million.

**Dividends**

The following dividends were declared and paid by Pembina:

---

| | | |
|:---|:---|:---|
| **12 Months Ended December 31** | | |
| *($ millions)* | **2025** | 2024 |
| Common shares |  |  |
| &nbsp;&nbsp;&nbsp;Common share | **1638** | 1569 |
| Class A preferred shares |  |  |
| &nbsp;&nbsp;&nbsp;Series 1 Class A Preferred Share | **16** | 16 |
| &nbsp;&nbsp;&nbsp;Series 3 Class A Preferred Share | **9** | 8 |
| &nbsp;&nbsp;&nbsp;Series 5 Class A Preferred Share | **17** | 14 |
| &nbsp;&nbsp;&nbsp;Series 7 Class A Preferred Share | **15** | 11 |
| &nbsp;&nbsp;&nbsp;Series 9 Class A Preferred Share | **10** | 10 |
| &nbsp;&nbsp;&nbsp;Series 15 Class A Preferred Share | **12** | 12 |
| &nbsp;&nbsp;&nbsp;Series 17 Class A Preferred Share | **10** | 9 |
| &nbsp;&nbsp;&nbsp;Series 19 Class A Preferred Share | **5** | 9 |
| &nbsp;&nbsp;&nbsp;Series 21 Class A Preferred Share | **24** | 24 |
| &nbsp;&nbsp;&nbsp;Series 22 Class A Preferred Share | **—** | 3 |
| &nbsp;&nbsp;&nbsp;Series 25 Class A Preferred Share | **16** | 16 |
|  | **134** | 132 |

---

On February 26, 2026, Pembina announced that its Board of Directors had declared a common share cash dividend for the first quarter of 2026 of $0.71 per share to be paid on March 31, 2026, to shareholders of record on March 16, 2026.

Pembina's Board of Directors also declared quarterly dividends for Pembina's Class A preferred shares on January 20, 2026 as outlined in the following table:

---

| | | | |
|:---|:---|:---|:---|
| **Series** | **Record Date** | **Payable Date** | **Dividend Amount**<br>*($ millions)* |
| Series 1, 3, 5, 7, and 21 | February 2, 2026 | March 2, 2026 | 20 |
| Series 15 and 17 | March 16, 2026 | March 31, 2026 | 5 |
| Series 25 | February 2, 2026 | February 17, 2026 | 4 |
|  |  |  | 29 |

---

**Pembina Pipeline Corporation 2025 Annual Report** 119

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**17. EARNINGS PER COMMON SHARE**

**Basic Earnings Per Common Share**

The calculation of basic earnings per common share at December 31, 2025 was based on the earnings attributable to common shareholders of $1.6 billion (2024: $1.7 billion) and a weighted average number of common shares outstanding of 581 million (2024: 573 million).

**Diluted Earnings Per Common Share**

The calculation of diluted earnings per common share at December 31, 2025 was based on earnings attributable to common shareholders of $1.6 billion<sup>(1)</sup> (2024: $1.7 billion<sup>(1)</sup>), and a weighted average number of common shares outstanding after adjustment for the effects of all dilutive potential common shares of 582 million (2024: 574 million).

**Earnings Attributable to Common Shareholders**

---

| | | |
|:---|:---|:---|
| **For the years ended December 31** | | |
| *($ millions)* | **2025** | 2024 |
| Earnings attributable to common shareholders | **1694** | 1864 |
| Dividends on preferred shares | **(144)** | (143) |
| **Basic and diluted earnings attributable to common shareholders** | **1550** | 1721 |

---

**Weighted Average Number of Common Shares**

---

| | | |
|:---|:---|:---|
| *(In millions of shares, except as noted)* | **2025** | 2024 |
| Issued common shares at January 1 | **581** | 549 |
| Effect of shares issued on exercise of options | **—** | 1 |
| Effect of subscription receipt issuance | **—** | 23 |
| **Basic weighted average number of common shares at December 31** | **581** | 573 |
| Dilutive effect of share options on issue<sup>(1)</sup> | **1** | 1 |
| **Diluted weighted average number of common shares at December 31** | **582** | 574 |
| **Basic earnings per common share (dollars)** | **2.67** | 3.00 |
| **Diluted earnings per common share (dollars)** | **2.66** | 3.00 |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;The average market value of Pembina's shares for purposes of calculating the dilutive effect of share options for the years ended December 31, 2025 and 2024 was based on quoted market prices for the period during which the options were outstanding.

120 **Pembina Pipeline Corporation 2025 Annual Report** 

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**18. REVENUE** 

Revenue has been disaggregated into categories to reflect how the nature, timing and uncertainty of revenue and cash flows are affected by economic factors.

**a.Revenue Disaggregation**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **For the years ended December 31** | **2025** | **2025** | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 | 2024 | 2024 |
| **For the years ended December 31** | **Pipelines** | **Facilities** | **Marketing & New Ventures** | **Corporate** | **Total** | Pipelines | Facilities | Marketing & New Ventures | Corporate | Total |
| *($ millions)* | **Pipelines** | **Facilities** | **Marketing & New Ventures** | **Corporate** | **Total** | Pipelines | Facilities | Marketing & New Ventures | Corporate | Total |
| Take-or-pay<sup>(1)</sup> | **2553** | **208** | **12** | **—** | **2773** | 2422 | 209 | 5 |  | 2636 |
| Fee-for-service<sup>(1)</sup> | **542** | **81** | **150** | **—** | **773** | 512 | 85 | 138 |  | 735 |
| Product sales<sup>(2)</sup> | **6** | **—** | **3783** | **—** | **3789** | 2 |  | 3569 |  | 3571 |
| **Revenue from contracts with customers** | **3101** | **289** | **3945** | **—** | **7335** | 2936 | 294 | 3712 |  | 6942 |
| &nbsp;&nbsp;Realized gain from derivative instruments | **—** | **—** | **133** | **—** | **133** |  |  | 241 |  | 241 |
| &nbsp;&nbsp;Unrealized loss from derivative instruments | **—** | **—** | **(37)** | **—** | **(37)** |  |  | (170) |  | (170) |
| **Revenue from risk management and other derivative contracts** | **—** | **—** | **96** | **—** | **96** |  |  | 71 |  | 71 |
| Lease income | **187** | **43** | **5** | **—** | **235** | 223 | 40 | 4 |  | 267 |
| Shared service revenue<sup>(3)</sup> and other | **28** | **25** | **13** | **46** | **112** | 26 | 24 | 9 | 45 | 104 |
| **Total external revenue** | **3316** | **357** | **4059** | **46** | **7778** | 3185 | 358 | 3796 | 45 | 7384 |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Revenue recognized over time.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Revenue recognized at a point in time.

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Includes $55 million of fixed fee income in 2025 (2024: $58 million) related to shared service agreements with joint ventures.

**b.Contract Liabilities**

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

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **For the years ended December 31** | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 |
| <br>*($ millions)* | **Take-or-Pay** | **Other Contract Liabilities** | **Total<br> Contract Liabilities** | Take-or-Pay | Other Contract Liabilities | Total<br> Contract Liabilities |
| Opening balance | **1** | **297** | **298** | 1 | 158 | 159 |
| Additions (net in the period)<sup>(1)</sup> | **—** | **186** | **186** |  | 49 | 49 |
| Alliance/Aux Sable Acquisition | **—** | **—** | **—** |  | 144 | 144 |
| Revenue recognized from contract liabilities<sup>(2)</sup> | **—** | **(43)** | **(43)** |  | (44) | (44) |
| Transfers to trade payables and other<sup>(3)</sup> | **—** | **(97)** | **(97)** |  |  |  |
| Disposition | **—** | **—** | **—** |  | (10) | (10) |
| Closing balance | **1** | **343** | **344** | 1 | 297 | 298 |
| Less current portion<sup>(4)</sup> | **(1)** | **(38)** | **(39)** | (1) | (42) | (43) |
| **Ending balance** | **—** | **305** | **305** |  | 255 | 255 |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;For the year ended December 31, 2025, additions include $176 million resulting from the initial valuation of an embedded derivative in the Company's contract to provide the right to use Pembina's Cedar LNG transportation and liquefaction capacity (refer to Note 3(b)(v) and Note 23 - *Fair Values*).

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Recognition of revenue related to performance obligations satisfied in the period that were included in the opening balance of contract liabilities.

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Represents a refundable liability transferred to trade payables and other in the third quarter of 2025, following the Alliance Negotiated Settlement. &nbsp;&nbsp;&nbsp;&nbsp;

<sup>(4)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Represents cash collected under take-or-pay contracts which will be recognized within one year as the customer chooses to ship, process, or otherwise forego the associated service.

Contract liabilities depict Pembina's obligation to perform services in the future for cash and non-cash consideration which have been received from customers. Contract liabilities include up-front payments or non-cash consideration received from customers for future services. Contract liabilities also include consideration received from customers for take-or-pay commitments where the customer has a make-up right to ship or process future volumes under a firm contract. These amounts are non-refundable should the customer not use its make-up rights.

**Pembina Pipeline Corporation 2025 Annual Report** 121

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**c.Revenue Allocated to Remaining Performance Obligations**

Pembina's existing long-term contracts with customers have given rise to wholly unsatisfied or partially unsatisfied performance obligations. These contracts exist primarily for long-term service contracts on Pembina's operating assets, or the recontracting of Pembina's capacity provided by another party, and exclude commodity marketing contracts that are typically short-term in nature. The remaining performance obligations on the long-term contracts represent revenue and cash flows that Pembina has contracted, but not yet earned.

Revenue to be recognized in future periods for the remaining performance obligations will be a combination of variable and fixed consideration. Variable consideration is often dependent on the future volumes of the related good or service to be provided, flow-through charges, commodity market prices, make-up-rights, and other factors. Although variable consideration is a significant component of Pembina's future revenues, it is often driven by factors outside Pembina's influence, and therefore future periods are materially constrained.

After constraining the variable consideration, the remaining fixed consideration related to the future performance obligations does not provide an accurate representation of, or meaningful correlation to Pembina's future take-or-pay revenues, total revenues, gross margin, or earnings. In addition, the results of contracted leasing arrangements, which also have revenue components, are a significant component to the future performance of Pembina but are excluded from revenue allocated to remaining performance obligations. Given the nature of Pembina's contractual revenue arrangements discussed above, the amount of revenue allocated to the remaining performance obligations are not representative of Pembina's future revenues and cash-flows, and has not been disclosed.

**19. NET FINANCE COSTS**

---

| | | |
|:---|:---|:---|
| **For the years ended December 31** | | |
| *($ millions)* | **2025** | 2024 |
| Interest expense on financial liabilities measured at amortized cost: |  |  |
| &nbsp;&nbsp;&nbsp;Loans and borrowings | **515** | 514 |
| &nbsp;&nbsp;&nbsp;Subordinated hybrid notes | **39** | 29 |
| &nbsp;&nbsp;&nbsp;Leases | **33** | 32 |
| Interest income | **(11)** | (46) |
| Unwinding of discount rate | **25** | 20 |
| Foreign exchange losses and other | **1** | 12 |
| Net finance costs | **602** | 561 |

---

Net interest paid of $611 million (2024: $528 million) includes interest paid during construction and capitalized of $28 million (2024: $26 million).

122 **Pembina Pipeline Corporation 2025 Annual Report** 

------

**20. PENSION PLAN**

---

| | | |
|:---|:---|:---|
| **As at December 31**  | | |
| *($ millions)*  | **2025** | 2024 |
| Registered defined benefit net asset | **(53)** | (23) |
| Supplemental defined benefit net obligation | **16** | 15 |
| Net employee benefit assets | **(37)** | (8) |

---

Pembina maintains defined contribution plans and non-contributory defined benefit pension plans covering its employees. Pembina contributes five to 10 percent of an employee's salary 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. Pembina ended eligibility for new entrants to the defined benefit plan as of January 1, 2021. Pembina recognized $17 million in expense for the defined contribution plan during the year (2024: $16 million). The defined benefit plans include a funded registered plan for all eligible employees and an unfunded supplemental retirement plan for those employees affected by the Canada Revenue Agency maximum pension limits. The defined benefit plans are administered by separate pension funds that are legally separated from Pembina. Benefits under the plans are based on the length of service and the annual average best three years of earnings during the last 10 years of service of the employee. Benefits paid out of the plans are not indexed. Pembina 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 funding valuation was at December 31, 2024. The defined benefit plans expose Pembina to actuarial risks such as longevity risk, interest rate risk, and market (investment) risk.

**Defined Benefit Obligations**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **As at December 31** | **2025** | **2025** | 2024 | 2024 |
| *($ millions)* | **Registered**<br>**Plans** | **Supplemental**<br>**Plan** | Registered<br>Plan | Supplemental<br>Plan |
| Present value of unfunded obligations |  | **16** |  | 15 |
| Present value of funded obligations | **278** |  | 269 |  |
| Total present value of obligations | **278** | **16** | 269 | 15 |
| Fair value of plan assets | **331** |  | 292 |  |
| Recognized defined benefit assets (obligations) | **53** | **(16)** | 23 | (15) |

---

Pembina 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 totaled $17 million for the year ended December 31, 2025 (2024: $18 million).

Pembina 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, 2025 (2024: nil).

**Registered Defined Benefit Pension Plan Assets Comprise**

---

| | | |
|:---|:---|:---|
| **As at December 31** | | |
| *(Percent)*  | **2025** | 2024 |
| Equity securities | **63** | 61 |
| Debt | **33** | 34 |
| Other | **4** | 5 |
|  | **100** | 100 |

---

**Pembina Pipeline Corporation 2025 Annual Report** 123

------

**Movement in the Present Value of the Defined Benefit Pension Obligation**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **2025** | **2025** | 2024 | 2024 |
| *($ millions)* | **Registered**<br>**Plans** | **Supplemental**<br>**Plan** | Registered<br>Plan | Supplemental<br>Plan |
| Defined benefits obligations at January 1 | **269** | **15** | 250 | 14 |
| Benefits paid by the plan | **(18)** | **(1)** | (15) | (1) |
| Current service costs | **30** | **1** | 28 | 1 |
| Interest expense | **13** | **1** | 11 | 1 |
| Actuarial gain in other comprehensive income | **(16)** | **—** | (5) |  |
| Defined benefit obligations at December 31 | **278** | **16** | 269 | 15 |

---

**Movement in the Present Value of Registered Defined Benefit Pension Plan Assets**

---

| | | |
|:---|:---|:---|
| *($ millions)* | **2025** | 2024 |
| Fair value of plan assets at January 1 | **292** | 255 |
| Contributions paid into the plan | **17** | 18 |
| Benefits paid by the plan | **(18)** | (15) |
| Return on plan assets | **26** | 22 |
| Interest income | **14** | 12 |
| Fair value of registered plan assets at December 31 | **331** | 292 |

---

**Expense Recognition in Earnings** 

---

| | | |
|:---|:---|:---|
| **For the years ended December 31**  | | |
| *($ millions)* | **2025** | 2024 |
| **Registered Plan** |  |  |
| Current service costs | **30** | 29 |
| Interest on obligation | **13** | 11 |
| Interest on plan assets | **(14)** | (12) |
|  | **29** | 28 |

---

The expense is recognized in the following line items in the Consolidated Statement of Comprehensive Income:

---

| | | |
|:---|:---|:---|
| **For the years ended December 31**  | | |
| *($ millions)* | **2025** | 2024 |
| **Registered Plan** |  |  |
| Operating expenses | **16** | 15 |
| General and administrative expense | **13** | 13 |
|  | **29** | 28 |

---

Expense recognized for the Supplemental Plan was less than $2 million for each of the years ended December 31, 2025 and 2024.

**Actuarial Gains and Losses Recognized in Other Comprehensive Income** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2025** | 2024 | 2024 | 2024 |
| *($ millions)* | **Registered**<br>**Plans** | **Supplemental**<br>**Plan** | **Total** | Registered<br>Plan | Supplemental<br>Plan | Total |
| Balance at January 1 | **13** | **1** | **14** | (8) | 1 | (7) |
| Remeasurements: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Financial assumptions | **10** | **—** | **10** | 2 |  | 2 |
| &nbsp;&nbsp;&nbsp;Experience adjustments | **3** | **—** | **3** | 2 |  | 2 |
| &nbsp;&nbsp;&nbsp;Return on plan assets excluding interest income | **19** | **—** | **19** | 17 |  | 17 |
| Recognized gain during the period after tax | **32** | **—** | **32** | 21 |  | 21 |
| Balance at December 31 | **45** | **1** | **46** | 13 | 1 | 14 |

---

124 **Pembina Pipeline Corporation 2025 Annual Report** 

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Principal actuarial assumptions used:

---

| | | |
|:---|:---|:---|
| **As at December 31** | | |
| *(weighted average percent)* | **2025** | 2024 |
| Discount rate | **5.0** | 4.7 |
| Future pension earning increases | **4.0** | 4.0 |

---

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:

---

| | | |
|:---|:---|:---|
| **As at December 31**  | | |
| *(years)* | **2025** | 2024 |
| **Longevity at age 65 for current pensioners** |  |  |
| Males | **22** | 22 |
| Females | **25** | 24 |
| **Longevity at age 65 for current member aged 45** |  |  |
| Males | **23** | 23 |
| Females | **25** | 25 |

---

The calculation of the defined benefit obligation is sensitive to the discount rate, compensation increases, retirements and termination rates as set out above. A change in the estimated discount rate of five percent by 100 basis points at December 31, 2025 is considered reasonably possible in the next financial year. An increase by 100 basis points would result in a $32 million reduction to the obligation whereas, a decrease would lead to a $40 million increase to the obligation.

Pembina expects to contribute $19 million to the defined benefit plans in 2026.

**21. SHARE-BASED PAYMENTS**

At December 31, 2025, Pembina has the following share-based payment arrangements:

**Share Option Plan (Equity-Settled)**

Pembina maintains a share option plan under which eligible employees were previously granted options to purchase shares of Pembina. Effective May 2024, Pembina ceased granting any new options under this plan. All options outstanding as at December 31, 2025 relate to grants made prior to May 2024 and will continue to be governed by their original terms until expiry. No new options will be granted in future periods.

**Long-Term Share Unit Award Incentive Plan (Cash-Settled)**

Pembina has 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 and employees. 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 the trading value of Pembina's common shares plus notional dividends and performance of Pembina.

Pembina also has a deferred share unit ("DSU") plan. Under the DSU plan, directors are required to take at least 50 percent of total director compensation as DSUs, until such time that they have met certain share ownership guidelines. A DSU is a notional share that has the same value as one Pembina common share. Its value changes with Pembina's share price. DSUs do not have voting rights but they accrue dividends as additional DSU units, at the same rate as dividends paid on Pembina's common shares. DSUs are paid out when a director retires from the board and are redeemed for cash using the weighted average trading price of common shares on the Toronto Stock Exchange ("TSX") for the last five trading days before the redemption date, multiplied by the number of DSUs the director holds.

**Pembina Pipeline Corporation 2025 Annual Report** 125

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**Terms and Conditions of Share Option Plan and Share Unit Award Incentive Plan**

**Share Option Plan**

Share options vest one-third on the first anniversary of the grant date, one-third on the second anniversary of the grant date and one-third on the third anniversary of the grant date and have a contractual life of seven years.

**Long-Term Share Unit Award Incentive Plan**<sup>(1)</sup>

The total long-term share unit awards granted to Officers, Board of Directors, and employees during the year were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Grant year**<br>*(thousands of units)* | **PSUs** <sup>(2)</sup> | **RSUs** <sup>(2)</sup> | **DSUs** | **Total** |
| 2024 | 780 | 1359 | 32 | 2171 |
| 2025 | 672 | 1194 | 27 | 1893 |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Distribution units are granted in addition to RSU and PSU grants based on notional accrued dividends.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Contractual life of 3 years.

PSUs vest on the third anniversary of the grant date. RSUs vest one-third on the first anniversary of the grant date, one-third on the second anniversary of the grant date and one-third on the third anniversary of the grant date. Actual units awarded are based on the trading value of the shares and performance of Pembina.

**Disclosure of Share Option Plan**

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

---

| | | |
|:---|:---|:---|
| *(thousands of options, except as noted)* | **Number of Options** | **Weighted Average Exercise Price** *(dollars)* |
| Balance at December 31, 2023 | 10682 | $42.38 |
| Granted | 165 | $50.46 |
| Exercised<sup>(1)</sup> | (6519) | $42.90 |
| Forfeited | (37) | $46.02 |
| Expired | (119) | $44.80 |
| Balance at December 31, 2024 | 4172 | $41.78 |
| Exercised<sup>(1)</sup> | (1481) | $41.31 |
| Forfeited | (9) | $45.19 |
| Expired | (48) | $44.15 |
| **Balance at December 31, 2025** | **2634** | **$41.99** |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Exercise represents the net number of common shares equivalent to the employee's gain upon exercise.

As of December 31, 2025, the following options are outstanding:

---

| | | | |
|:---|:---|:---|:---|
| *(thousands of options, except as noted)*<br>**Exercise Price** *(dollars)* | **Options Outstanding** <br>**at December 31, 2025** | **Options Exercisable** | **Weighted Average**<br>**Remaining Life** *(years)* |
| $26.83 – $37.03 | 440 | 440 | 2 |
| $37.04 – $37.50 | 610 | 610 | 2 |
| $37.51 – $45.50 | 597 | 583 | 2 |
| $45.51 – $48.08 | 457 | 301 | 3 |
| $48.09 – $50.46 | 530 | 421 | 2 |
| Total | 2634 | 2355 | 2 |

---

Options are exercised regularly throughout the year. Therefore, the weighted average share price during the year of $55.20 (2024: $51.47) is representative of the weighted average share price at the date of exercise.

126 **Pembina Pipeline Corporation 2025 Annual Report** 

------

Expected volatility is 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:

**Share Options Granted**

---

| | | |
|:---|:---|:---|
| **For the years ended December 31**<br>*(dollars, except as noted)* | **2025** | 2024 |
| Weighted average |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Fair value at grant date | **—** | 6.96 |
| &nbsp;&nbsp;&nbsp;&nbsp;Expected volatility *(percent)* | **—** | 25.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Expected option life *(years)* | **—** | 3.67 |
| Expected annual dividends per option | **—** | 2.74 |
| Expected forfeitures *(percent)* | **—** | 7.2 |
| Risk-free interest rate (based on government bonds) *(percent)* | **—** | 3.9 |

---

**Disclosure of Long-Term Share Unit Award Incentive Plan**

The long-term share unit award incentive plans were valued using the volume weighted average price for the 20 days ending December 31, 2025 of $52.68 (2024: $54.05). Actual payment may differ from the amount valued based on market price and company performance.

**Employee Expenses**

---

| | | |
|:---|:---|:---|
| **For the years ended December 31** | | |
| *($ millions)* | **2025** | 2024 |
| Share option plan, equity settled | **2** | 3 |
| Long-term share unit award incentive plan | **92** | 81 |
| Share-based compensation expense | **94** | 84 |
| Total carrying amount of liabilities for cash settled arrangements | **165** | 158 |
| Total intrinsic value of liability for vested benefits | **98** | 105 |

---

**22. ACCUMULATED OTHER COMPREHENSIVE INCOME**

---

| | | | | |
|:---|:---|:---|:---|:---|
| *($ millions)* | **Currency Translation Reserve** | **Cash Flow Hedge** <br>**Reserve** | **Pension and other Post-Retirement Benefit Plan Adjustments**<sup>(2)</sup> | **Total** |
| Balance at December 31, 2023 | 211 | 18 | (8) | 221 |
| Other comprehensive gain before hedging activities | 436 |  | 21 | 457 |
| Other comprehensive loss resulting from hedging activities<sup>(1)</sup> | (27) | (10) |  | (37) |
| Balance at December 31, 2024 | 620 | 8 | 13 | 641 |
| Other comprehensive (loss) gain before hedging activities | (272) |  | 32 | (240) |
| Other comprehensive gain (loss) resulting from hedging activities, net of tax<sup>(1)</sup> | 14 | (8) |  | 6 |
| Balance at December 31, 2025 | 362 |  | 45 | 407 |

---

<sup>(1) &nbsp;&nbsp;&nbsp;&nbsp;</sup>Amounts relate to hedges of the Company's net investment in foreign operations (reported in Currency Translation Reserve) and interest rate forward swaps (reported in Cash Flow Hedge Reserve) (Note 23), which matured on March 31, 2025. At December 31, 2025, the other comprehensive loss resulting from hedging activities for interest rate forward swaps includes a realized gain of $4 million that was reclassified to net finance costs (2024: $17 million realized gain).

<sup>(2) &nbsp;&nbsp;&nbsp;&nbsp;</sup>Pension and other Post-Retirement Benefit Plan Adjustments will not be reclassified into earnings.

**Pembina Pipeline Corporation 2025 Annual Report** 127

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**23. FINANCIAL INSTRUMENTS & RISK MANAGEMENT**

**Risk Management Overview**

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. Pembina's Board of Directors is responsible for providing risk management oversight and oversees how management monitors compliance with the organization's risk management policies and procedures. In addition, the Board of Directors reviews the adequacy of this risk framework in relation to the risks faced by Pembina. Internal audit personnel assist the Board of Directors in its oversight role by monitoring and evaluating the effectiveness of the organization's risk management system.

**Counterparty Credit Risk** 

Counterparty credit risk represents the financial loss Pembina may experience if a counterparty to a financial instrument or commercial agreement fails to meet its contractual obligations to Pembina in accordance with the terms and conditions of such instruments or agreements with Pembina. Counterparty credit risk arises primarily from Pembina's trade and other receivables, finance lease receivables, advances to related parties and derivative financial instruments.

Pembina manages counterparty credit risk through established credit management techniques. These techniques include conducting comprehensive financial and other assessments of new high exposure counterparties, regular reviews of existing counterparties to monitor their creditworthiness, setting exposure limits, monitoring exposures against these limits, entering into master netting arrangements, and obtaining financial assurances where warranted. Pembina utilizes various sources of financial, credit and business information in assessing the creditworthiness of a counterparty. This information includes 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 Board of Directors has approved a counterparty exposure limit matrix which establishes the maximum exposure that can be approved for a counterparty based on debt rating. Pembina continues to closely monitor and reassess the creditworthiness of its counterparties, which has resulted in Pembina reducing or mitigating its exposure to certain counterparties where it was deemed warranted and permitted under contractual terms.

Financial assurances from counterparties may include guarantees, letters of credit and cash. As at December 31, 2025, letters of credit totalling approximately $249 million (2024: $276 million) were held primarily in respect of customer trade receivables.

Pembina typically has collected its trade receivables in full and at December 31, 2025, 98 percent were current (2024: 99 percent). Management defines current as outstanding accounts receivable under 30 days past due. Pembina has a general lien and a continuing and first priority security interest in, and a secured charge on, all of a shipper's petroleum products in its custody.

At December 31, the aging of trade and other receivables was as follows:

---

| | | |
|:---|:---|:---|
| *($ millions)* | **2025** | 2024 |
| 31-60 days past due | **1** | 1 |
| Greater than 61 days past due | **2** | 2 |
|  | **3** | 3 |

---

Pembina measures the lifetime expected credit loss at initial recognition and throughout the life of a customer trade receivable. The lifetime expected credit loss is determined based on Pembina's historical default rates, adjusted for forward-looking estimates. Management believes that customer trade receivables past due by greater than 30 days are fully collectible based on historical default rates.

128 **Pembina Pipeline Corporation 2025 Annual Report** 

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Expected credit losses on finance lease receivables are determined using a probability-weighted estimate of credit losses, measured as the present value of all expected cash shortfalls, discounted at the interest rates implicit in the leases, using reasonable and supportable information about past events, current conditions, and forecasts of future economic conditions. Pembina considers the risk of default relating to lease receivables low based on its assessment of individual counterparty credit risk through the established credit management techniques as discussed above.

Pembina monitors and manages its concentration of counterparty credit risk on an ongoing basis. Pembina 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, Pembina must balance its market and counterparty credit risks when making business decisions.

**Liquidity Risk**

Liquidity risk is the risk Pembina 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** | **Outstanding Balances Due by Period** | **Outstanding Balances Due by Period** | **Outstanding Balances Due by Period** |
| | **Carrying Amount** | **Expected Cash Flows** | **Less Than <br>1 Year** | **1 - 3 Years** | **3 - 5 Years** | **More Than 5 Years** |
|<br>**As at December 31, 2025**<br>*($ millions)* | **Carrying Amount** | **Expected Cash Flows** | **Less Than <br>1 Year** | **1 - 3 Years** | **3 - 5 Years** | **More Than 5 Years** |
| Trade payables and other | 1321 | 1321 | 1321 |  |  |  |
| Loans and borrowings | 11666 | 18020 | 1059 | 2681 | 2683 | 11597 |
| Subordinated hybrid notes | 1022 | 1409 | 54 | 108 | 108 | 1139 |
| Derivative financial liabilities | 138 | 139 | 22 | 22 | 20 | 75 |
| Lease liabilities | 622 | 815 | 113 | 203 | 144 | 355 |

---

Pembina 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.

**Market Risk**

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

**a. Commodity Price Risk**

Certain of the transportation contracts or tolling arrangements with respect to Pembina's pipeline assets do not include take-or-pay commitments from crude oil and natural gas producers and, as a result, Pembina is exposed to volume risk with respect to those assets. A decrease in volumes transported can directly and adversely affect Pembina's revenues and earnings. The demand for, and utilization of, Pembina's pipeline assets may be impacted by factors such as changing market fundamentals, capacity bottlenecks, operational incidents, regulatory restrictions, system maintenance, weather and increased competition. Market fundamentals, such as commodity prices and price differentials, natural gas and gasoline consumption, alternative energy sources and global supply disruptions outside of Pembina's control can impact both the supply of and demand for the commodities transported on Pembina's pipelines, which can, in turn, impact the demand for, and utilization of, Pembina's pipeline assets.

Pembina's Marketing business includes activities related to product storage, terminalling, and hub services. These activities expose Pembina to certain risks relating to fluctuations in commodity prices and, as a result, Pembina may experience volatility in revenue and impairments related to the book value of stored product. Primarily, Pembina enters into contracts to purchase and sell crude oil, condensate, NGL, power and natural gas at floating market prices. As a result, the prices of products that are marketed by Pembina are subject to volatility due to factors such as seasonal demand changes, extreme weather conditions, market inventory levels, general economic conditions, changes in global markets and other factors. Pembina manages its risk exposure by balancing purchases and sales to secure less volatile margins.

**Pembina Pipeline Corporation 2025 Annual Report** 129

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Notwithstanding Pembina's management of price and quality risk, marketing margins for commodities can vary and have varied significantly from period to period in the past. This variability could have an adverse effect on the results of Pembina's Marketing business and its overall results of operations. To assist in reducing this inherent variability in its Marketing business, Pembina has invested, and will continue to invest, in assets that have a fee-based revenue component.

Pembina is also exposed to potential price declines and decreasing frac spreads between the time Pembina purchases NGL feedstock and sells NGL products. Frac spread is the difference between the revenue from the sale of NGL if removed from a gas stream and the value such NGL would have had if left in the gas stream and sold at natural gas prices. Frac spreads can change significantly from period to period depending on the relationship between NGL and natural gas prices (the "frac spread ratio"), absolute commodity prices, transport differentials and changes in the Canadian to U.S. dollar exchange rate. In addition, there is also a differential between NGL product prices and crude oil prices which can change margins realized for midstream products. The amount of profit or loss made on the extraction portion of the business will generally increase or decrease with frac spreads. This exposure could result in variability of cash flow generated by the Marketing business.

Pembina's commercial arrangements relating to its Cedar LNG capacity have given rise to commodity price risk exposure. These commercial arrangements have led to Pembina contracting its Cedar LNG capacity to third-party customers. Such contracting has incorporated, but not exclusively, pricing mechanisms that include spreads between global LNG and Canadian natural gas market pricing. The related pricing mechanism may result in additional cash flows to Pembina if spreads rise above specified thresholds, but in no instances will the pricing mechanism result in a reduction of cash flows. The pricing spread is subject to volatility, particularly in the context of the global LNG market, which is undergoing significant change and rebalancing. The inherent market exposure could result in variability of cash flow and earnings.

Pembina utilizes financial derivative instruments as part of its overall risk management strategy to assist in managing the exposure to commodity price, interest rate, cost of power, and foreign exchange risk. As an example of commodity price mitigation, Pembina actively fixes a portion of its exposure to frac spread margins through the use of derivative financial instruments. Pembina has also entered into power purchase agreements to secure cost-competitive renewable energy, fix the price for a portion of the power Pembina consumes, and reduce its emissions. Pembina's Marketing business is exposed to variability in quality, time and location differentials for various products, and financial instruments may be used to offset Pembina's exposures to these differentials.

The following table shows the impact on earnings if the underlying forward commodity prices of the derivative financial instruments increased or decreased by 15 percent, with other variables held constant.

---

| | | |
|:---|:---|:---|
| **As at December 31, 2025**<br>*($ millions)* | **15 Percent**<br>**Price Increase** | **15 Percent**<br>**Price Decrease** |
| Crude oil<sup>(1)</sup> | (5) | 5 |
| Natural gas | 8 | (8) |
| NGL<sup>(2)</sup> | (19) | 19 |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Includes condensate.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Includes propane and butane. 

**b. Foreign Exchange Risk**

Certain of Pembina's cash flows, namely a portion of its commodity-related cash flows, certain cash flows from U.S. infrastructure assets, are subject to currency risk, arising from the denomination of specific cash flows in U.S. dollars. Additionally, a portion of Pembina's capital expenditures and loans to wholly-owned U.S. entities, may be denominated in U.S. dollars. Furthermore, the value of the investment in U.S. dollar denominated subsidiaries will fluctuate with changes in exchange rates when translated into Pembina's functional currency.

Pembina monitors, assesses and responds to these foreign currency risks using an active risk management program, which may include the issuance of U.S. dollar debt, and exchange of foreign currency for domestic currency at a fixed rate.

130 **Pembina Pipeline Corporation 2025 Annual Report** 

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The following table shows the impact on earnings if the underlying foreign exchange risk rate of the derivative financial instruments increased or decreased by $0.10, with other variables held constant.

---

| | | |
|:---|:---|:---|
| **As at December 31, 2025** | **$0.10** | **$0.10** |
| *($ millions)* | **Rate Increase** | **Rate Decrease** |
| U.S. to Canadian dollars | (10) | 10 |

---

**c. Interest Rate Risk**

Interest bearing financial liabilities include Pembina's debt and lease liabilities. Pembina has floating interest rate debt in the form of its Credit Facilities, which subjects Pembina to interest rate risk. Pembina monitors and assesses variable interest rate risk and responds to this risk by issuing long-term debt with fixed interest rates or by entering into interest rate swaps.

Pembina's U.S. drawings on its Credit Facilities have variable rate components that reference the U.S. SOFR. Pembina's Canadian dollar drawings on its Credit Facilities have variable rate components that reference the CORRA.

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

---

| | | |
|:---|:---|:---|
| **As at December 31** | | |
| *($ millions)* | **2025** | 2024 |
| **Carrying amounts of financial liability** |  |  |
| Fixed rate instruments<sup>(1)</sup> | **12005** | 12173 |
| Variable rate instruments<sup>(2)</sup> | **1305** | 1148 |
|  | **13310** | 13321 |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Includes lease liabilities and subordinated hybrid notes.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;At December 31, 2025, there were no financial derivative contracts designated as cash flow hedging instruments. At December 31, 2024, this includes financial derivative contracts designated as cash flow hedging instruments, fixing the interest rates on U.S. $250 million of variable rate debt.

**Cash Flow Sensitivity Analysis for Variable Rate Instruments**

The following table shows the impact on earnings if interest rates at the reporting date would have increased or decreased by 100 basis points, with other variables held constant.

---

| | | |
|:---|:---|:---|
| **As at December 31, 2025**<br>*($ millions)* | **100 Basis Point**<br>**Increase** | **100 Basis Point**<br>**Decrease** |
| Variable rate instruments | 9 | (9) |

---

**Fair Values**

The fair value of financial instruments utilizes a variety of valuation inputs. When measuring fair value, Pembina uses observable market data to the greatest extent possible. Depending on the nature of these valuation inputs, financial instruments are categorized as follows:

**a. Level 1**

Level 1 fair values are based on inputs that are unadjusted observable quoted prices from active markets for identical assets or liabilities as at the measurement date.

**b. Level 2**

Level 2 fair values are based on inputs, other than quoted market prices included in Level 1, that are either directly or indirectly observable. Level 2 fair value inputs include quoted forward market prices, time value, and broker quotes that are observable for the duration of the financial instrument's contractual term. These inputs are often adjusted for factors specific to the asset or liability, such as, location differentials and credit risk.

Financial instruments that utilize Level 2 fair valuation inputs include derivatives arising from physical commodity forward contracts, commodity swaps and options, and forward interest rate and foreign-exchange swaps. In addition, Pembina's loans and borrowings utilize Level 2 fair valuation inputs, whereby the valuation technique is based on discounted future interest and principal payments using the current market interest rates of instruments with similar terms.

**Pembina Pipeline Corporation 2025 Annual Report** 131

------

**c. Level 3**

Level 3 fair values utilize inputs that are not based on observable market data. Rather, various valuation techniques are used to develop inputs.

Financial instruments that utilize Level 3 fair valuation inputs include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.**Power Purchase Agreements:** Pembina's long-term power purchase agreements have given rise to embedded derivative instruments. The fair value of these embedded derivatives are measured using discounted projected cash flow models. The key unobservable inputs in the valuation include forecasted power prices from EDC Associates Ltd. and management estimates of renewable wind power pricing discounts. The power purchase agreements have a maturity date ranging from 2040 to 2041 and a notional that ranges from 100 megawatt ("MW") to 105 MW of renewable energy capacity. The forecasted power prices, before applying the forecasted wind power pricing discount, range from $52.54 per megawatt hour ("MWh") to $77.36 per MWh (2024: $46.69 MWh to $76.03 MWh). Lastly, the forecasted wind power pricing discount applied ranges from 50 percent to 67 percent (2024: 42 percent to 68 percent).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii.**Cedar LNG Capacity Commercial Arrangement:** Pembina's provision of Cedar LNG transportation and liquefaction capacity to a third-party customer has given rise to an embedded derivative instrument with option features. The fair-value of this embedded derivative is measured using Black-Scholes option modelling, using a notional of 1.0 million tonnes of LNG per annum for a term of 20 years. The term commences when Cedar LNG becomes commercially operational. The key unobservable inputs in the valuation include: (a) the forecasted spread between the forward global Japan Korea Marker LNG index and the forward Alberta Energy Company ("AECO") natural gas index; and, (b) the forecasted volatility of such commodity prices. The forecasted spread between these market pricing indices ranges from $6.32 per Million British Thermal Units ("MMBtu") to $9.03 per MMBtu (in U.S. dollars). Lastly, the forecasted average volatility of such commodity prices is 18 percent.

The fair valuation of embedded derivative instruments is judged to be a significant management estimate. The respective assumptions and inputs are susceptible to change and may differ from actual future developments. This estimation uncertainty could materially impact the quantified fair value; and therefore, the gains and losses on derivative financial instruments.

The following table illustrates the sensitivity of Level 3 derivative financial instruments:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **As at December 31** |  | **2025** | **2025** | 2024 | 2024 |
| *($ millions)* |  | **Earnings Increase** | **Earnings Decrease** | Earnings Increase | Earnings Decrease |
| Power purchase agreements | Forward power prices and renewable wind power pricing discounts (+/-10 percent) | **54** | **(54)** | 53 | (53) |
| Cedar LNG capacity commercial arrangement | Forward commodity pricing (+/-10 percent) and volatility in commodity prices (+/-5 percent) | **184** | **(102)** |  |  |

---

132 **Pembina Pipeline Corporation 2025 Annual Report** 

------

The carrying values of financial assets and liabilities in relation to their respective fair values, together with their appropriate fair value categorization are illustrated in the table below. Certain other non-derivative financial instruments measured at amortized cost, including cash and cash equivalents, trade receivables and other, trade payables and other, and other liabilities have been excluded since their carrying values are judged to approximate their fair values due to their nature and short maturity. These instruments would be categorized as Level 2 in the fair value hierarchy.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | December 31, 2024 | December 31, 2024 | December 31, 2024 | December 31, 2024 |
| | **Carrying<br>Value** | **Fair Value** | **Fair Value** | **Fair Value** | Carrying<br>Value | Fair Value | Fair Value | Fair Value |
| *($ millions)* | **Carrying<br>Value** | **Level 1** | **Level 2** | **Level 3** | Carrying<br>Value | Level 1 | Level 2 | Level 3 |
| **Financial assets carried at fair value** |  |  |  |  |  |  |  |  |
| Derivative financial instruments<sup>(1)</sup> | **128** | **—** | **14** | **114** | 13 |  | 13 |  |
| **Financial liabilities carried at fair value** |  |  |  |  |  |  |  |  |
| Derivative financial instruments<sup>(1)</sup> | **138** | **—** | **9** | **129** | 159 |  | 42 | 117 |
| **Financial liabilities carried at amortized cost** |  |  |  |  |  |  |  |  |
| Long-term debt<sup>(2)</sup> | **12688** | **—** | **12708** | **—** | 12656 |  | 12649 |  |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;At December 31, 2025, all derivative financial instruments are carried at fair value through earnings. At December 31, 2024, all derivative financial instruments are carried at fair value through earnings, except for $5 million in interest rate derivative financial assets that were designated as cash flow hedge and matured on March 31, 2025.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Carrying value of current and non-current balances. Includes loans and borrowings and subordinated notes.

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

---

| | | |
|:---|:---|:---|
| **For the year ended December 31** | | |
| *($ millions)* | **2025** | 2024 |
| Level 3 derivative net (liability) asset at January 1 | **(117)** | 15 |
| New contracts added<sup>(1)</sup> | **176** |  |
| Loss from power purchase agreements embedded derivatives<sup>(2)</sup> | **(12)** | (132) |
| Loss from Cedar LNG capacity commercial arrangement embedded derivative<sup>(2)</sup> | **(62)** |  |
| Level 3 derivative net liability at December 31 | **(15)** | (117) |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Relates to Cedar LNG's embedded derivative arising from the Cedar LNG capacity commercial arrangement entered into during the fourth quarter of 2025.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Net realized and unrealized loss included in Revenue from risk management and derivative contracts (see Note 18 *Revenue*).

There were no transfers into or out of Level 3 during the year ended December 31, 2025.

**Hedge Accounting**

**a. Net Investment Hedges**

Pembina has designated certain U.S. dollar denominated debt as a hedge of the Company's net investment in U.S. dollar denominated subsidiaries and investments in equity accounted investees. This hedging activity is in aid of Pembina's risk management strategy for foreign exchange risk. The designated debt has been assessed as having no ineffectiveness as the U.S. dollar denominated debt has an equal and opposite exposure to U.S. dollar fluctuations. The designated debt is recorded in loans and borrowings on the Consolidated Statements of Financial Position and all related gains and losses are recorded directly in other comprehensive income.

The details of the U.S. dollar denominated debt are as follows:

---

| | | |
|:---|:---|:---|
| **For the years ended December 31**<br>*($ millions)* | **2025** | 2024 |
| Notional amount of U.S. debt designated *(in U.S. dollars)* | **250** | 250 |
| Carrying value of U.S. debt designated | **343** | 360 |
| Maturity date | **2030** | 2025 |

---

**Pembina Pipeline Corporation 2025 Annual Report** 133

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**b. Cash Flow Hedges**

Pembina had designated interest rate forward swaps as hedging instruments to manage interest rate risk exposure related to Credit Facilities. The designated interest rate forward swaps were recorded in derivative financial instruments on the Consolidated Statements of Financial Position and all related gains or losses were recorded directly in other comprehensive income, with realized gains or losses reclassified to net finance costs. The interest rate forward swaps matured on March 31, 2025.

There was no interest rate forward swap derivative instrument as at December 31, 2025. The interest rate forward swap derivative instruments as at December 31, 2024 had a notional amount of $360 million, a carrying value of $5 million, and a 2025 maturity date.

**Gains and Losses from Derivative Instruments**

---

| | | |
|:---|:---|:---|
| **For the years ended December 31** | | |
| *($ millions)* | **2025** | 2024 |
| **Derivative instruments held at fair value through earnings** |  |  |
| *Realized gain recorded in revenue from risk management and other derivative contracts* |  |  |
| &nbsp;&nbsp;Commodity-related gain | **(133)** | (241) |
| *Unrealized (gain) loss recorded in revenue from risk management and other derivative contracts* |  |  |
| &nbsp;&nbsp;&nbsp;Commodity-related (gain) loss | **(25)** | 170 |
| &nbsp;&nbsp;&nbsp;Cedar LNG capacity commercial arrangement embedded derivative loss | **62** |  |
| **Derivative instruments in hedging relationships** |  |  |
| &nbsp;&nbsp;Interest rate loss recorded in other comprehensive income<sup>(1)</sup> | **4** | 10 |

---

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Unrealized losses or gains for designated cash flow hedges are recognized in impact of hedging activities in the Consolidated Statements of Earnings and Comprehensive Income, with realized losses or gains being reclassified to net finance costs. The movement in other comprehensive income relates to realized losses on interest rate forward swaps, which matured on March 31, 2025. A gain of $4 million was recognized during the first quarter of 2025, prior to the maturity date, that was reclassified to net finance costs (2024: $17 million realized gain). No losses or gains have been recognized in net income relating to discontinued cash flow hedges.

**24. CAPITAL MANAGEMENT**

Pembina's objective when managing capital is to ensure a strong financial position and a stable stream of dividends to shareholders that is sustainable over the long term. Pembina manages its capital structure based on requirements arising from significant capital development activities, the risk characteristics of its underlying asset base and changes in economic conditions. Pembina manages its capital structure and short-term financing requirements using non-GAAP measures, including the ratios of debt to adjusted EBITDA, debt to total enterprise value, adjusted cash flow to debt, debt to equity, and rating agency metrics such as funds from operations to debt. The metrics are used to measure Pembina's financial leverage and measure the strength of Pembina's balance sheet. Pembina remains satisfied that the leverage currently employed in its capital structure is appropriate given the characteristics and operations of the underlying asset base.

Pembina maintains a capital structure that allows it to finance its day-to-day cash requirements through its operations, without requiring external sources of capital. Pembina 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 primarily reserved for the support of specific significant development activities. The capital structure of Pembina consists of shareholder's equity, comprised of common and preferred equity, and long-term debt. Long-term debt is comprised of bank credit facilities, unsecured notes, and subordinated hybrid notes.

Note 16 of these financial statements shows the change in share capital for the year ended December 31, 2025.

134 **Pembina Pipeline Corporation 2025 Annual Report** 

------

**25. GROUP ENTITIES**

**Significant Subsidiaries** 

---

| | | | |
|:---|:---|:---|:---|
| **As at December 31**  |  | Ownership Interest | Ownership Interest |
| *(percentages)* | Jurisdiction | **2025** | 2024 |
| Pembina Pipeline | Alberta | **100** | 100 |
| Pembina Empress NGL Partnership | Alberta | **100** | 100 |
| Pembina Holding Canada L.P. | Alberta | **100** | 100 |
| Pembina Infrastructure and Logistics L.P. | Alberta | **100** | 100 |
| Pembina Midstream Limited Partnership | Alberta | **100** | 100 |
| Pembina Oil Sands Pipeline L.P. | Alberta | **100** | 100 |
| Aux Sable Liquid Products L.P. | Delaware U.S. | **100** | 100 |
| Alliance Pipeline Limited Partnership | Alberta | **100** | 100 |
| Alliance Pipeline L.P. | Delaware U.S. | **100** | 100 |
| Pembina Cochin LLC | Delaware U.S. | **100** | 100 |

---

**Pembina Pipeline Corporation 2025 Annual Report** 135

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**26. RELATED PARTIES** 

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

A summary of the significant related party transactions and balances are as follows:

---

| | | |
|:---|:---|:---|
| **For the years ended December 31**<br>*($ millions)* | **2025** | 2024 |
| &nbsp;&nbsp;&nbsp;PGI | **242** | 242 |
| &nbsp;&nbsp;&nbsp;Cedar LNG | **19** | 26 |
| &nbsp;&nbsp;Aux Sable<sup>(1)</sup> | **—** | 32 |
| &nbsp;&nbsp;Alliance<sup>(1)</sup> | **—** | 4 |
| &nbsp;&nbsp;Other<sup>(2)</sup> | **—** | 2 |
| Total services provided<sup>(3)</sup> | **261** | 306 |
| &nbsp;&nbsp;&nbsp;PGI | **8** | 8 |
| &nbsp;&nbsp;Alliance<sup>(1)</sup> | **—** | 3 |
| Total services received | **8** | 11 |
| ***As at December 31***<br>*($ millions)* | **2025** | 2024 |
| &nbsp;&nbsp;&nbsp;PGI | **39** | 34 |
| &nbsp;&nbsp;&nbsp;Cedar LNG | **4** | 2 |
| &nbsp;&nbsp;Greenlight<sup>(4)</sup> | **27** |  |
| &nbsp;&nbsp;Other<sup>(2)</sup> | **—** | 1 |
| Trade receivables and other | **70** | 37 |
| Right-of-use assets<sup>(5)</sup> | **32** |  |
| Lease liabilities<sup>(5)</sup> | **32** |  |

---

<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>As of April 1, 2024, following the completion of Pembina's acquisition of a controlling interest in Alliance and Aux Sable, these entities became consolidated subsidiaries of Pembina and, as such, are no longer related parties.

<sup>(2)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Other includes transactions with Grand Valley and ACG.

<sup>(3)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Services provided by Pembina include payments made by Pembina on behalf of related parties.

<sup>(4)&nbsp;&nbsp;&nbsp;&nbsp;</sup>On November 5, 2025, Pembina issued a $27 million promissory note to Greenlight, with a 10.0 percent annual interest rate payable semi-annually, with an optional prepayment, and a maturity date of the earlier of five days after Greenlight's positive final investment decision or September 30, 2026.

<sup>(5)&nbsp;&nbsp;&nbsp;&nbsp;</sup>As at December 31, 2025, Pembina had a lease arrangement with PGI for the use of a natural gas storage asset. Under the terms of the agreement, Pembina recognized a right-of-use asset and a corresponding lease liability. The lease commenced on September 1, 2025 and has a term of 15 years. Lease payments are made on a monthly basis and are structured as a combination of a fixed fee and flow-through charges.

**Key Management Personnel and Director Compensation**

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

**Compensation** 

In addition to short-term employee benefits, including salaries, director fees and short-term incentives, Pembina 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:

---

| | | |
|:---|:---|:---|
| **For the years ended December 31**  | | |
| *($ millions)* | **2025** | 2024 |
| Short-term employee benefits | **16** | 11 |
| Share-based compensation and other<sup>(1)</sup> | **26** | 13 |
| Total compensation of key management | **42** | 24 |

---

<sup>(1)&nbsp;&nbsp;&nbsp;&nbsp;</sup>Includes termination benefits.

136 **Pembina Pipeline Corporation 2025 Annual Report** 

------

**Transactions**

Key management personnel and directors of Pembina control less than one percent of the voting common shares of Pembina (consistent with the prior year). Certain directors and key management personnel also hold Pembina preferred shares. Dividend payments received for the common and preferred shares 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. No balance payable is outstanding at December 31, 2025 (2024: nil).

---

| | | | |
|:---|:---|:---|:---|
| *($ millions)* |  | **Transaction Value** <br>**Years Ended December 31** | **Transaction Value** <br>**Years Ended December 31** |
| **Post-employment benefit plan** | **Transaction** | **2025** | 2024 |
| Defined benefit plan | Funding | **17** | 18 |

---

**Pembina Pipeline Corporation 2025 Annual Report** 137

------

**27. COMMITMENTS AND CONTINGENCIES** 

**Commitments** 

Pembina was committed for the following amounts under its contracts and arrangements as at December 31, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** |
| **Contractual Obligations**<sup>(1)</sup><br>*($ millions)* | **Total** | **Less than 1 year** | **1 – 3 years** | **3 – 5 years** | **After 5 years** |
| Transportation and processing<sup>(2)</sup> | 11312 | 74 | 216 | 1185 | 9837 |
| Construction commitments<sup>(3)</sup> | 392 | 361 | 29 | 2 |  |
| Other commitments related to lease contracts<sup>(4)</sup> | 591 | 44 | 105 | 158 | 284 |
| Funding commitments, software, and other | 65 | 46 | 18 | 1 |  |
| Total contractual obligations | 12360 | 525 | 368 | 1346 | 10121 |

---

<sup>(1)</sup> Pembina enters into product purchase agreements and power purchase agreements to secure supply for future operations. Purchase prices of both NGL and power are dependent on current market prices. Volumes and prices for NGL and power contracts cannot be reasonably determined, and therefore, an amount has not been included in the contractual obligations schedule. Product purchase agreements range from one to 15 years and involve the purchase of NGL products from producers. Assuming product is available, Pembina has secured between 26 and 175 mbpd of NGL each year up to and including 2040. Power purchase agreements range from one to 24 years and involve the purchase of power from electrical service providers. Pembina has secured up to 74 megawatts per day each year up to and including 2049.

<sup>(2)</sup> In 2024, Pembina signed two agreements relating to the Cedar LNG Project: (a) Liquefaction Tolling Services Agreement ("LTSA"); and, (b) Gas Supply Agreement ("GSA"). The LTSA is a 20-year take-or-pay fixed toll contract for 1.5 million mpta, while the GSA will allow for transport on the Coastal GasLink Pipeline of approximately 200 million MMcf/d of Canadian natural gas to Cedar LNG. These agreements represent a total commitment of approximately $10.6 billion, which will commence on in-service date of the Cedar LNG Project in late 2028. In 2025, Pembina contracted the rights to this respective liquefaction and transportation capacity to two third-party customers.

<sup>(3)</sup> Excludes projects that are executed by equity accounted investees.

<sup>(4)</sup> Relates to expected variable lease payments excluded from the measurement of the lease liability, payments under lease contracts which have not yet commenced, and payments related to non-lease components in lessee lease contracts.

**Commitments to Equity Accounted Investees** 

Pembina has commitments to provide contributions to certain equity accounted investees based on its ownership interest. These contributions are determined and approved by the joint venture partners to fund operating budgets, growth capital, and significant projects development costs, including the Cedar LNG Project and Greenlight.

**Contingencies**

Pembina, including its subsidiaries and its investments in equity accounted investees, are subject to various legal and regulatory and tax proceedings, actions and audits arising in the normal course of business. Pembina represents its interests vigorously in all proceedings in which it is involved. Legal and administrative proceedings involving possible losses are inherently complex, and the Company applies significant judgment in estimating probable outcomes. As at December 31, 2025, there were no significant claims filed against Pembina for which management believes the resolution of any such actions or proceedings would have a material impact on Pembina's financial position or results of operations.

**Letters of Credit**

Pembina has provided letters of credit to various third parties in the normal course of conducting business. The letters of credit include financial guarantees to counterparties for product purchases and sales, transportation services, utilities, engineering and construction services. The letters of credit have not had and are not expected to have a material impact on Pembina's financial position, earnings, liquidity or capital resources. As at December 31, 2025, Pembina had $124 million (December 31, 2024: $209 million) in letters of credit issued.

138 **Pembina Pipeline Corporation 2025 Annual Report** 

------

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

## Exhibit 99.3

**CERTIFICATION REQUIRED BY RULE 13a-14(a) OR RULE 15d-14(a) UNDER THE**

**SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT**

**TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, J. Scott Burrows, certify that:

1. I have reviewed this annual report on Form 40-F of Pembina Pipeline Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4. The issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Evaluated the effectiveness of the issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Disclosed in this report any change in the issuer's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer's internal control over financial reporting;

5. The issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer's auditors and the audit committee of the issuer's board of directors (or persons performing the equivalent function):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: February 26, 2026 | | |
| | /s/ "J. Scott Burrows*"* | /s/ "J. Scott Burrows*"* |
| | Name: | J. Scott Burrows |
| | Title: | President and Chief Executive Officer |

---

## Exhibit 99.4

**CERTIFICATION REQUIRED BY RULE 13a-14(a) OR RULE 15d-14(a) UNDER THE**

**SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT**

**TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Cameron J. Goldade, certify that:

1. I have reviewed this annual report on Form 40-F of Pembina Pipeline Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4. The issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Evaluated the effectiveness of the issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Disclosed in this report any change in the issuer's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer's internal control over financial reporting;

5. The issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer's auditors and the audit committee of the issuer's board of directors (or persons performing the equivalent function):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: February 26, 2026 | | |
| | /s/ *"Cameron J. Goldade"* | /s/ *"Cameron J. Goldade"* |
| | Name: | Cameron J. Goldade |
| | Title: | Chief Financial Officer |

---

## Exhibit 99.5

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906**

**OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Annual Report of Pembina Pipeline Corporation (the "Company") on Form 40-F for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, J. Scott Burrows, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly represents, in all material respects, the financial condition and results of the operations of the Company.

---

| | |
|:---|:---|
| Date: February 26, 2026 | |
| | /s/ *"J. Scott Burrows"* |
| | J. Scott Burrows |
| | President and Chief Executive Officer |

---

## Exhibit 99.6

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906**

**OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Annual Report of Pembina Pipeline Corporation (the "Company") on Form 40-F for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Cameron J. Goldade, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly represents, in all material respects, the financial condition and results of the operations of the Company.

---

| | |
|:---|:---|
| Date: February 26, 2026 | |
| | /s/ *"Cameron J. Goldade"* |
| | Cameron J. Goldade |
| | Chief Financial Officer |

---

## Exhibit 99.7

![kpmgimagea07a.jpg](kpmgimagea07a.jpg)

KPMG LLP

KPMG Tower

2200, 240 Fourth Ave SW

Calgary AB T2P 4H4

Telephone (403) 691-8000

Fax (403) 691-8008

**Consent of Independent Registered Public Accounting Firm**

The Board of Directors

Pembina Pipeline Corporation:

We consent to the use of:

**•** our report dated February 26, 2026, on the consolidated financial statements of Pembina Pipeline Corporation (the "Entity") which comprise the consolidated statements of financial position as at December 31, 2025 and December 31, 2024, the related consolidated statements of earnings and comprehensive income, changes in equity and cash flows for each of the years then ended, and the related notes (collectively the "consolidated financial statements"), and

**•** our report dated February 26, 2026 on the effectiveness of the Entity's internal control over financial reporting as at December 31, 2025

each of which is included in the Annual Report on Form 40-F of the Entity for the fiscal year ended December 31, 2025.

We also consent to the incorporation by reference of such reports in the Registration Statement No. 333-276023 on Form F-10 of the Entity.

/s/ KPMG LLP

Chartered Professional Accountants

February 26, 2026

Calgary, Canada

KPMG LLP, an Ontario limited liability partnership and member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. KPMG Canada provides services to KPMG LLP.