REPORT TO SHAREHOLDERS
Second Quarter 2025
MANAGEMENT'S DISCUSSION AND ANALYSIS
Table of Contents
1. About Pembina									2
2. Financial & Operating Overview									3
3. Segment Results									7
4. Liquidity & Capital Resources									22
5. Share Capital									26
6. Capital Expenditures									28
7. Selected Quarterly Information									29
8. Selected Equity Accounted Investee Information									31
9. Related Party Transactions									32
10. Accounting Policies & Estimates									33
11. Non-GAAP & Other Financial Measures									34
12. Other									39
13. Abbreviations									41
14. Forward-Looking Statements & Information									42

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.

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:

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

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

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

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

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

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

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

d.Investors receive sustainable industry-leading total returns.

Earnings in the second quarter of 2025 decreased by $62 million compared to the prior period. Significant factors impacting the quarter by segment include:

•Pipelines: Decrease largely due to lower tolls on new contracts on the Cochin Pipeline and lower revenue at the Edmonton Terminals, partially offset by higher demand on seasonal contracts on the Alliance Pipeline, as well as higher revenue on the Peace Pipeline system due to increased volumes and higher tolls mainly related to contractual inflation adjustments.

•Facilities: Decrease largely due to lower share of profit from PGI and a planned outage during the period for an asset upgrade, which resulted in higher costs driven by the associated retirement at the Redwater Complex.

•Marketing & New Ventures: Lower net revenue due to a decrease in NGL margins and volumes, combined with lower other income due to no similar gain to that recognized in the second quarter of 2024 related to Pembina's financial assurances assumed by Cedar LNG upon positive final investment decision. This was partially offset by higher revenue from risk management and physical derivatives, as well as an increase in share of profit from Cedar LNG.

•Corporate and Income Tax: Higher primarily due to lower acquisition and integration costs, combined with lower general and administrative expense. This was partially offset by no similar net gain on acquisition to that recognized in the second quarter of 2024.

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

Earnings during the first six months of 2025 increased by $2 million compared to the prior period. Significant factors impacting the period by segment include:

•Pipelines: Positive impacts from Pembina acquiring a controlling ownership interest in Alliance on April 1, 2024, combined with higher seasonal revenue on the Alliance Pipeline. Additionally, higher revenue on the Peace Pipeline system due to increased volumes and higher tolls mainly related to contractual inflation adjustments, as well as higher contracted volumes on the Nipisi Pipeline. These impacts were partially offset by lower tolls on new contracts on the Cochin Pipeline and lower revenue at the Edmonton Terminals.

•Facilities: Decrease largely due to lower share of profit from PGI, partially offset by the positive impacts of Pembina acquiring a controlling ownership interest in Aux Sable on April 1, 2024.

•Marketing & New Ventures: Positive impacts from Pembina acquiring a controlling ownership interest in Aux Sable on April 1, 2024, combined with higher revenue from risk management and physical derivative contracts, as well as higher WCSB NGL margins resulting from higher marketed NGL volumes. This was partially offset by a share of loss from Cedar LNG, lower NGL margins from Aux Sable, and lower other income.

•Corporate and Income Tax: Lower largely due to higher net finance costs, higher income tax expense, and no similar net gain on acquisition to that recognized in the second quarter of 2024. This was partially offset by lower acquisition and integration costs.

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

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. The Pipelines Division manages pipeline transportation capacity of 3.0 mmboe/d(1) and above ground storage capacity of approximately 10 mmbbls(1) within its conventional, oil sands and heavy oil, and transmission assets. The conventional assets include strategically located pipelines and terminalling hubs that gather and transport light and medium crude 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. 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, enhancing flexibility and optionality in our 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 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(1) for its customers. Condensate and NGL extracted at virtually all Canadian-based facilities have access to transportation on Pembina's pipelines. In addition, all NGL transported along the Alliance Pipeline are extracted through the Channahon Facility at the terminus. The Facilities Division includes approximately 430 mbpd(1) of NGL fractionation capacity, 21 mmbbls(1) 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.

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, 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 seek to provide enhanced access to global markets and to support a transition to a lower-carbon economy. The Marketing & New Ventures Division includes Pembina's interest in the Cedar LNG project, a liquified natural gas ("LNG") export facility currently under construction (the "Cedar LNG Project"). Additionally, Pembina is pursuing opportunities associated with low-carbon commodities and large-scale greenhouse gas ("GHG") emissions reductions.

(1)Net capacity.

(1)    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.

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

(1)    Pipelines includes Grand Valley in both the three and six month periods ended June 30, 2025 and 2024. In addition, Alliance is included in the three month results for 2024, reflecting its contribution during the period. Pembina owned a 50 percent interest in Alliance up to the closing of the acquisition on April 1, 2024. The results of Alliance following closing of the acquisition are fully consolidated and incorporated into Pembina's financial results. See Note 3 to the Interim Financial Statements.

(2)    Facilities includes PGI and Fort Corp.

(3)    Marketing and New Ventures includes Greenlight in 2025, Cedar LNG and ACG in both the three and six month periods ended June 30, 2025 and 2024, and Aux Sable in the three month results for 2024, reflecting its contribution during the period. Pembina owned approximately a 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. The results of Aux Sable following closing of the acquisition are fully consolidated and incorporated into Pembina's financial results. See Note 3 to the Interim Financial Statements.

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

(5)    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.

For the three and six months ended June 30, 2025, contributions in the Facilities Division were made to PGI to partially fund growth capital projects. Contributions in Marketing & New Ventures in both 2025 and 2024 were made to Cedar LNG to fund the Cedar LNG Project. Refer to the "Segment Results – Marketing & New Ventures Division – Projects & New Developments" sections of this MD&A for additional information.

(1)    Includes inter-segment transactions. See Note 4 to the Interim Financial Statements.

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

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

(1)    Includes inter-segment transactions. See Note 4 to the Interim Financial Statements.

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

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

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

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

(3)     Includes values attributed to Pembina's conventional, transmission and oil sands and heavy oil assets within the Pipelines Division. Refer to Pembina's AIF for the year ended December 31, 2024.

The following outlines the projects and new developments that have recently come into service within Pipelines:

(1)    For further details on Pembina's significant assets, including definitions for capitalized terms used herein that are not otherwise defined, refer to Pembina's AIF for the year ended December 31, 2024 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 is advancing more than $1.0 billion of conventional NGL and condensate pipeline expansions to reliably and cost-effectively meet rising transportation demand from growing production in the WCSB. Pembina's outlook for volume growth is secured by long-term contracts underpinned by take-or-pay agreements, areas of dedication across the Montney and Duvernay formations, and other long-term agreements that ensure a strong base of committed volumes. The potential expansions under development include:

•Taylor-to-Gordondale Project - a new approximately 89 kilometer, 16-inch pipeline proposed by Pouce Coupé Pipe Line Ltd. (a subsidiary of Pembina) connecting mostly condensate volumes from Taylor, British Columbia to the Gordondale, Alberta area. Engineering activities are continuing and subject to regulatory and board approval, Pembina expects to move forward with this expansion. A final investment decision is anticipated in the first quarter of 2026.

•Fox Creek-to-Namao Expansion - an expansion of the Peace Pipeline system that, through the addition of new pump stations, would add approximately 70,000 bpd of propane-plus capacity to the market delivery pipelines from Fox Creek, Alberta to Namao, Alberta. Engineering and regulatory activities are progressing and subject to regulatory and board approval, Pembina expects to move forward with this expansion. A final investment decision is expected by the end of 2025.

•Pembina is also evaluating and engineering further expansions to support volume growth in northeast British Columbia, including new pipelines and terminal upgrades.

(1)    Includes inter-segment transactions. See Note 4 to the Interim Financial Statements.

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

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

(1)    Includes inter-segment transactions. See Note 4 to the Interim Financial Statements.

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

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

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

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

(3)     Includes values attributed to Pembina's 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, 2024.

Facilities 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 Facilities:

(1)    For further details on Pembina's significant assets, including definitions for capitalized terms used herein that are not otherwise defined, refer to Pembina's AIF for the year ended December 31, 2024 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.

(2)    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 late 2026/early 2027, supporting long-term plant utilization. During the first half of 2025, detailed engineering advanced and long-lead equipment was ordered.

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. During the first half of 2025, construction for the pipeline progressed, detailed engineering advanced and long-lead equipment was ordered related to the battery.

PGI has entered into an agreement with a Montney producer 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. The expected in-service date of the North Gold Creek Battery is the second quarter of 2026.

(1)    Includes inter-segment transactions. See Note 4 to the Interim Financial Statements.

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

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

Change in Adjusted EBITDA ($ millions)(1)(2)(3)

(1)    Includes inter-segment transactions. See Note 4 to the Interim Financial Statements.

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

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

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

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

(3)     Includes values attributed to Pembina's marketing activities and new ventures projects within the Marketing & New Ventures operating segment. For further details on Pembina's marketing activities and projects, refer to Pembina's AIF for the year ended December 31, 2024.

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

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.

(1)    For further details on Pembina's significant assets, including definitions for capitalized terms used herein that are not otherwise defined, refer to Pembina's AIF for the year ended December 31, 2024 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.

(1)    Excludes inter-segment eliminations.

(2)    Fixed fee income related to shared service agreements with PGI.

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

(1)    Excludes inter-segment eliminations.

(2)    Fixed fee income related to shared service agreements with PGI.

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

(1)    Current assets of $1.4 billion (December 31, 2024: $1.6 billion) less current liabilities of $1.8 billion (December 31, 2024: $2.9 billion). As at June 30, 2025, working capital included $597 million (December 31, 2024: $1.5 billion) associated with the current portion of long-term debt and $210 million (December 31, 2024: $141 million) in cash.

(2)    Includes U.S. $250 million variable rate debt outstanding at June 30, 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 Pembina's MD&A for the year ended December 31, 2024 and Note 24 to the Consolidated Financial Statements for more information. Management continues to monitor Pembina's liquidity and remains satisfied that the leverage employed in Pembina's capital structure is sufficient and appropriate given the characteristics and operations of the underlying asset base.

Management may adjust Pembina's capital structure as a result of changes in economic conditions or the risk characteristics of the underlying assets. To maintain or modify Pembina's capital structure in the future, Pembina may renegotiate debt terms, repay existing debt, seek new borrowings, issue additional equity or hybrid securities and/or repurchase or redeem additional common or preferred shares.

As at June 30, 2025, Pembina's credit facilities (collectively, the "Credit Facilities") consisted of: an unsecured $1.5 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 2029 (the "Revolving Facility"); an unsecured $1.0 billion (December 31, 2024: $1.0 billion) sustainability linked revolving credit facility, which matures in June 2027 (the "SLL Credit Facility"); an unsecured U.S. $250 million (December 31, 2024: U.S. $250 million) non-revolving term loan, which matures in April 2030; and an operating facility of $50 million (December 31, 2024: $50 million), which matures in June 2025 and is typically renewed on an annual basis. Additionally, Pembina's Credit Facilities includes a $270 million (December 31, 2024: $270 million) term loan and a U.S. $240 million (December 31, 2024: $240 million) term loan assumed from Alliance, which both mature in December 2025.

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.

The SLL Credit Facility contains pricing adjustments that reduce or increase borrowing costs based on Pembina's performance relative to a GHG emissions intensity reduction performance target. Previously, Pembina announced its commitment to reduce its GHG emissions intensity by 30 percent by 2030, relative to baseline 2019 levels, which were revised following Pembina acquiring a controlling ownership interest in Alliance and Aux Sable on April 1, 2024. The specific terms of the SLL Credit Facility include annual intermediate targets that align with Pembina's trajectory towards its 2030 target.

Pembina is also subject to customary restrictions on its operations and activities under the indenture governing its medium-term notes and the agreements governing its Credit Facilities, including restrictions on the granting of security, incurring indebtedness and the sale of its assets.

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

On July 23, 2025, Pembina announced the approval of amendments (the "Amendments") to the indenture governing the Series 1 Subordinated Notes. 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 attaching 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).

Pembina is subject to certain financial covenants under the indentures governing its medium-term notes and the agreements governing the credit facilities. As at June 30, 2025, Pembina was in compliance with those covenants (December 31, 2024: in compliance).

Debt

Financial Covenant(1)

Ratio

Ratio as at June 30, 2025

Senior unsecured medium-term notes

Funded Debt to Capitalization

Maximum 0.70(2)

0.40

Credit facilities

Debt to Capital

Maximum 0.70(3)

0.40

(1)    Terms as defined in relevant agreements.

(2)    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.

(3)    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.

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 $256 million (December 31, 2024: $276 million) were held by Pembina as at June 30, 2025, primarily in respect of customer trade receivables.

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, 2024 for further information.

Pembina had the following contractual obligations outstanding as at June 30, 2025:

(1)Pembina enters into product purchase agreements and power purchase agreements to secure supply for future operations. Purchase prices of both NGL and power are dependent on current market prices. Volumes and prices for NGL and power contracts cannot be reasonably determined, and therefore, an amount has not been included in the contractual obligations schedule. Product purchase agreements range from one to 16 years and involve the purchase of NGL products from producers. Assuming product is available, Pembina has secured between 26 and 202 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 76 megawatts per day each year up to and including 2048.

(2)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.

(3)Pembina signed two transportation and processing related 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 tonnes per annum, while the GSA will allow for transport on the Coastal GasLink Pipeline of approximately 200 million cubic feet per day of Canadian natural gas to Cedar LNG. These commercial agreements account for approximately 50 percent of the operating capacity for the Cedar LNG Project and a total commitment of approximately $10.5 billion. These commitments are expected to commence upon the anticipated in-service date of the Cedar LNG Project in late 2028.

(4)Includes pipelines, facilities, terminals, rail, office space, land and vehicle leases.

(5)Excludes projects that are executed by equity accounted investees.

(6)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.

On July 24, 2025, Pembina announced that Alliance Pipeline Limited Partnership ("Alliance") has reached a negotiated settlement (the "Settlement") with shippers and interested parties on the Canadian portion of the Alliance Pipeline. The Settlement includes a revised toll schedule, effective November 1, 2025, which reduces long-term firm tolls by an average of 14 percent 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. Alliance has filed an application with the Canada Energy Regulator seeking approval of the Settlement, which is requested by September 15, 2025. Pembina anticipates the Settlement will result in an approximate $50 million 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.

As at June 30, 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.

Pembina has provided letters of credit to various third parties in the normal course of conducting business. The letters of credit include financial guarantees to counterparties for product purchases and sales, transportation services, utilities, engineering and construction services. The letters of credit have not had, and are not expected to have, a material impact on Pembina's financial position, earnings, liquidity or capital resources. As at June 30, 2025, Pembina had $210 million (December 31, 2024: $209 million) in letters of credit issued.

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.

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, 9, 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 15th day of February, May, August and November in each year, if, as and when declared by the Board of Directors of Pembina.

(1)    Balance includes 2.8 million exercisable stock options.

(1)    Includes $46 million for the three months ended June 30, 2025 (2024: $32 million) and $71 million for the six months ended June 30, 2025 (2024: $47 million) related to non-recoverable sustainment activities.

In both the second quarter and first six months of 2025, Pipelines capital expenditures largely related to expansions to support volume growth in NEBC and investments in smaller growth projects, while during the same periods of 2024, these expenditures were associated with Pembina's Phase VIII Peace Pipeline expansion, which was placed into service in May 2024. Facilities capital expenditures during these periods in 2025 and 2024 primarily related to Redwater expansion projects. Marketing & New Ventures had no significant capital expenditures during these periods, while Corporate capital expenditures related mainly to information technology infrastructure and systems development.

In both the second quarter and first six months of 2025, the change in non-recoverable sustaining capital was primarily attributed to supporting safe and reliable operations.

Future capital expenditures for the remainder of 2025 are estimated to be approximately $500 million and are primarily related to the construction of RFS IV, expansions to support volume growth in NEBC, investments in smaller growth projects, including various laterals and terminals, and spending on projects previously placed into service. Of the total future capital expenditure, approximately $120 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.

(1)    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 and are excluded from total volumes to avoid double counting.

(2)    Includes Pembina's proportionate share of volumes from equity accounted investees.

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

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

•contributions made by Pembina to PGI of $124 million in the first six months 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;

•the completion of the Alliance and Aux Sable acquisition in the second quarter of 2024;

•the closing of the offering of 29.9 million subscription receipts of the Company in December 2023 to fund a portion of the purchase price of the Alliance and Aux Sable acquisition and the conversion of 29.9 million subscription receipts into common shares of the Company, concurrent with the closing of the Alliance and Aux Sable Acquisition;

•the impairment reversal of $231 million recognized in the fourth quarter of 2023 in the Pipelines Division related to successful contract negotiations on the Nipisi Pipeline and the pipeline being put back into service in October 2023; and

•contributions made by Pembina of $145 million to Aux Sable in the fourth quarter of 2023, representing Pembina's proportionate share of a claim filed by a counterparty to an NGL supply agreement with Aux Sable which was settled and discontinued in the fourth quarter of 2023.

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 June 30, 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.

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

(2)    Relates to the U.S. $2.7 billion senior unsecured construction/term loan facility entered into by Cedar LNG.

As at June 30, 2025, Pembina's ownership percentage of the cash balance associated with Pembina's investments in equity accounted investees totaled $86 million (December 31, 2024: $43 million) of which $7 million (December 31, 2024: nil) related to PGI and $74 million (December 31, 2024: $39 million) for Cedar LNG.

As at June 30, 2025, Pembina's various equity accounted investees held letters of credit totaling $155 million (December 31, 2024: $164 million) primarily in respect of obligations for engineering, procurement and construction.

(1)    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.

(2)    Other includes transactions with Grand Valley, ACG, and Greenlight.

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

(4)    As at June 30, 2025, trade receivables and other includes $27 million due from PGI (December 31, 2024: $34 million), and $6 million due from Cedar LNG (December 31, 2024: $2 million).

Critical accounting judgments and estimates used in preparing the Interim Financial Statements are described in Note 2 of Pembina's Consolidated Financial Statements. The preparation of financial statements in conformity with IFRS requires management to make both judgments and estimates that could materially affect the amounts recognized in the financial statements. By their nature, judgments and estimates may change in light of new facts and circumstances in the internal and external environment. There have been no material changes to Pembina's critical accounting estimates and judgments during the three and six months ended June 30, 2025.

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.

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.

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.

(1)    Presented net of adjusting items.

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.