PMMBF Pembina Pipeline Corporation (PK)

TABLE OF CONTENTS

GLOSSARY

In this Prospectus, the following terms have the meanings set out below.

“ABCA” means the Business Corporations Act (Alberta), as amended, including the regulations promulgated thereunder.

“AIF” means the annual information form of Pembina dated February 21, 2019 for the year ended December 31, 2018.

“Annual MD&A” means the management’s discussion and analysis of financial condition and results of operations of Pembina for the year ended December 31, 2018.

“Board” means the board of directors of Pembina.

“Class A Preferred Shares” means the Class A preferred shares, issuable in series, of Pembina.

“Class B Preferred Shares” means the Class B preferred shares of Pembina.

“Common Shares” means the common shares in the capital of Pembina.

“Corporation” or “Pembina” means Pembina Pipeline Corporation, a corporation organized under the laws of the Province of Alberta, Canada and, unless the context requires otherwise, includes its subsidiaries.

“Credit Facilities” means, collectively, Pembina’s unsecured $2.5 billion revolving credit facility due May 31, 2024, which includes a $750 million accordion feature, its unsecured $1.0 billion non-revolving term loan due March 31, 2021 and its unsecured operating facility of $20 million due May 31, 2020.

“DRIP” means Pembina’s Premium Dividend^TM and Dividend Reinvestment Plan and all associated agreements, as amended and restated effective January 6, 2016.

“GAAP” means generally accepted accounting principles in effect from time to time in Canada.

“Information Circular” means the management information circular of Pembina dated March 15, 2019 relating to the annual and special meeting of Shareholders held on May 3, 2019 and the special meeting of holders of Class A Preferred Shares held on May 3, 2019, as adjourned to May 31, 2019 and further adjourned to June 25, 2019.

“Interim MD&A” means the management’s discussion and analysis of financial condition and results of operations of Pembina for the three and six months ended June 30, 2019.

“NI 41-101” means National Instrument 41-101 – General Prospectus Requirements.

“NI 44-102” means National Instrument 44-102 – Shelf Distributions.

“NYSE” means the New York Stock Exchange.

“Option Plan” means the stock option plan of Pembina approved by the Shareholders on May 26, 2011, as amended effective November 20, 2016. For further information with respect to the Option Plan, see “Information about the long-term incentive plans – stock option plan” in the Information Circular.

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“Options” means the options granted by Pembina under the Option Plan.

“Preferred Shares” means the Class A Preferred Shares that may be issued from time to time under this Prospectus and one or more Prospectus Supplements.

“Rights Plan” has the meaning ascribed thereto under the heading “Description of the Common Shares, Preferred Shares and Capital Structure of Pembina – Common Shares”.

“SEC” means the United States Securities and Exchange Commission.

“Securities” means, collectively, the Common Shares, the Preferred Shares, the Warrants, the Subscription Receipts and the Units.

“Series 1 Class A Preferred Shares” means the cumulative redeemable rate reset Class A Preferred Shares, Series 1 of Pembina, issued on July 26, 2013.

“Series 3 Class A Preferred Shares” means the cumulative redeemable rate reset Class A Preferred Shares, Series 3 of Pembina, issued on October 2, 2013.

“Series 5 Class A Preferred Shares” means the cumulative redeemable rate reset Class A Preferred Shares, Series 5 of the Corporation, issued on January 16, 2014.

“Series 7 Class A Preferred Shares” means the cumulative redeemable rate reset Class A Preferred Shares, Series 7 of the Corporation, issued on September 11, 2014.

“Series 9 Class A Preferred Shares” means the cumulative redeemable rate reset Class A Preferred Shares, Series 9 of the Corporation, issued on April 10, 2015.

“Series 11 Class A Preferred Shares” means the cumulative redeemable minimum rate reset Class A Preferred Shares, Series 11 of the Corporation, issued on January 15, 2016.

“Series 13 Class A Preferred Shares” means the cumulative redeemable minimum rate reset Class A Preferred Shares, Series 13 of the Corporation, issued on April 27, 2016.

“Series 15 Class A Preferred Shares” means the cumulative redeemable rate reset Class A Preferred Shares, Series 15 of the Corporation, issued on October 2, 2017.

“Series 17 Class A Preferred Shares” means the cumulative redeemable rate reset Class A Preferred Shares, Series 17 of the Corporation, issued on October 2, 2017.

“Series 19 Class A Preferred Shares” means the cumulative redeemable rate reset Class A Preferred Shares, Series 19 of the Corporation, issued on October 2, 2017.

“Series 21 Class A Preferred Shares” means the cumulative redeemable minimum rate reset Class A Preferred Shares, Series 21 of the Corporation, issued on December 7, 2017.

“Series 12 MTNs” means the 3.62% medium term notes, Series 12 of the Corporation, maturing on April 3, 2029, issued on April 3, 2019.

“Series 13 MTNs” means the 4.54% medium term notes, Series 13 of the Corporation, maturing on April 3, 2049, issued on April 3, 2019.

“Shareholders” means the holders of Common Shares.

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“Subscription Receipts” means the subscription receipts of Pembina that may be issued from time to time under this Prospectus and one or more Prospectus Supplements.

“TSX” means the Toronto Stock Exchange.

“Units” means the units comprising any combination of Securities, which may be issued from time to time under this Prospectus and one or more Prospectus Supplements.

“U.S.” or “United States” means the United States of America.

“U.S. Exchange Act” means the United States Securities Exchange Act of 1934, as amended.

“U.S. Securities Act” means the United States Securities Act of 1933, as amended.

“Warrants” means the warrants to purchase Common Shares, which may be issued from time to time under this Prospectus and one or more Prospectus Supplements.

“WCSB” means the Western Canadian Sedimentary Basin.

Words importing the singular number include the plural, and vice versa, and words importing any gender include all genders.

Unless otherwise specified, Pembina’s financial information in this Prospectus, including the documents incorporated by reference herein, have been prepared in accordance with GAAP in effect from time to time, which are currently International Financial Reporting Standards as issued by the International Accounting Standards Board, and which differ in certain significant respects from United States generally accepted accounting principles. Accordingly, Pembina’s financial statements may not be comparable to the financial statements of U.S. companies.

contingent on the closing thereof and incorporates by reference forward-looking statements pertaining to the anticipated closing of the Kinder Acquisition and the timing thereof; the anticipated timing of the special meeting of the shareholders of Kinder Morgan Canada Limited; the anticipated financing of the cash consideration for the Cochin US Acquisition; and other forward-looking statements relating to Pembina’s future plans, growth projects, business strategies and expected results from future operations.

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 at the time such forward-looking statements are made. Pembina believes the expectations reflected in the forward-looking statements are reasonable as at the date hereof or as at the date specified in the documents incorporated by reference herein, as the case may be, but no assurance can be given that these expectations will prove to be correct and the forward-looking statements included in this Prospectus and in the documents incorporated by reference herein should not be unduly relied upon.

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. These factors include, but are not limited to, the risk factors described under “Risk Factors” in this Prospectus and under “Risk Factors” in the AIF, the Annual MD&A and the Interim MD&A, as well as the other risk factors described in any documents incorporated by reference that are filed after the date hereof. These factors should not, however, be construed as exhaustive.

The forward-looking statements in this Prospectus speak as of the date hereof, and the forward-looking statements in the documents incorporated by reference into this Prospectus speak as of the date of the document in which they are contained and, unless required by law, Pembina does not undertake any obligation to publicly update or revise such forward-looking statements, whether as a result of new information, future events or otherwise. Any forward-looking statements contained or incorporated by reference herein are expressly qualified by this cautionary statement.

NON-GAAP MEASURES

The documents incorporated by reference in this Prospectus contain references to the terms “net revenue”, “adjusted EBITDA” (adjusted earnings before interest, taxes, depreciation and amortization), “adjusted cash flow from operating activities”, “cash flow from operating activities per common share” and “adjusted cash flow from operating activities per common share”. These terms are not defined by GAAP, but are used by management to evaluate the performance of Pembina and its businesses. These non-GAAP financial measures do not have a standardized meaning prescribed by GAAP and are, therefore, unlikely to be comparable to similar measures presented by other issuers, and should not be construed as alternatives to revenue, earnings, cash flow from operating activities, gross profit or other measures calculated in accordance with GAAP as indicators of Pembina’s performance.

These non-GAAP financial measures have the meanings set out in the Annual MD&A and the Interim MD&A. The specific rationale for, and additional information associated with, each non-GAAP financial measure, including a reconciliation to the most directly comparable measure calculated in accordance with GAAP for the applicable period then ended, are also discussed therein. See “Non-GAAP Measures” in the Annual MD&A and the Interim MD&A.

by reference herein may be obtained on request without charge from the Corporate Secretary of Pembina at #4000, 585 – 8th Avenue S.W., Calgary, Alberta, T2P 1G1, Telephone (403) 231-7500. These documents are also available through the internet on the System for Electronic Document Analysis and Retrieval (SEDAR), which can be accessed at www.sedar.com, and on the SEC’s Electronic Data Gathering, Analysis and Retrieval system (EDGAR), which can be accessed at www.sec.gov.

The following documents filed by Pembina, with the securities commissions or similar authorities in each of the provinces of Canada, are specifically incorporated by reference in, and form an integral part of, this Prospectus, provided that such documents are not incorporated by reference to the extent that their contents are modified or superseded by a statement contained in this Prospectus or in any other subsequently filed document that is also incorporated by reference in this Prospectus:

Any documents of the type required by National Instrument 44-101 – Short Form Prospectus Distributions to be incorporated by reference in a short form prospectus, including any material change reports (excluding material change reports filed on a confidential basis), interim financial statements, annual financial statements and the auditors’ report thereon, management’s discussion and analysis of financial condition and results of operations, information circulars, annual information forms and business acquisition reports filed by the Corporation with the securities commissions or similar authorities in the provinces of Canada subsequent to the date of this Prospectus and prior to the termination of the distribution period of this Prospectus are deemed to be incorporated by reference in this Prospectus. In addition, to the extent that any document or information incorporated by reference into this Prospectus is included in any report on Form 6-K, Form 40-F, Form 20-F, Form 10-K, Form 10-Q or Form 8-K (or any respective successor form) that is filed with or furnished to the SEC after the date of this Prospectus, such document or information shall be deemed to be incorporated by reference as an exhibit to the registration statement of which this Prospectus forms a part (in the case of Form 6-K and Form 8-K, if and to the extent expressly set out therein). We may also incorporate other information filed with or furnished to the SEC under the U.S. Exchange Act, provided that information included in any report on Form 6-K or Form 8-K shall be deemed to be incorporated by reference only if and to the extent expressly set out therein.

Any statement contained in this Prospectus or in a document (or part thereof) incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this Prospectus to the extent that a statement contained herein or in any subsequently filed document (or part thereof) which also is, or is deemed to be, incorporated by reference herein modifies or supersedes such statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set out in the document that it modifies or supersedes. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue

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statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus.

Upon a new annual information form being filed by the Corporation with the applicable securities regulatory authorities during the currency of this Prospectus, the previous annual information form and any material change reports filed prior to the commencement of the Corporation’s financial year in which the new annual information form is filed shall be deemed no longer to be incorporated by reference into this Prospectus for purposes of future offers and sales of Securities hereunder. Upon new annual financial statements, together with the notes thereto and the auditors’ report thereon, and the related management’s discussion and analysis being filed by the Corporation with the applicable securities regulatory authorities during the currency of this Prospectus, all previous annual financial statements, interim financial statements and the related management’s discussion and analysis shall be deemed no longer to be incorporated by reference into this Prospectus for purposes of future offers and sales of Securities hereunder.

Upon interim financial statements and the related management’s discussion and analysis being filed by the Corporation with the applicable securities regulatory authorities during the currency of this Prospectus, all previous interim financial statements and the related management’s discussion and analysis filed prior to the new interim consolidated financial statements shall be deemed no longer to be incorporated by reference into this Prospectus for purposes of future offers and sales of Securities hereunder. In addition, upon a new annual information form being filed by the Corporation with the applicable securities regulatory authorities during the currency of this Prospectus for which the corresponding annual financial statements include at least nine months of the financial results of an acquired business for which a business acquisition report was filed by Pembina and incorporated by reference into this Prospectus, such business acquisition report shall be deemed no longer to be incorporated by reference into this Prospectus for purposes of future offers and sales of Securities hereunder. Upon a new information circular in connection with an annual meeting of Shareholders being filed by the Corporation with the applicable securities regulatory authorities during the currency of this Prospectus, the previous information circular filed in connection with an annual general meeting of Shareholders shall be deemed no longer to be incorporated by reference into this Prospectus for purposes of future offers and sales of Securities hereunder.

One or more Prospectus Supplements containing the specific variable terms for an issue of Securities and other information related to those Securities will be delivered to purchasers of such Securities together with this Prospectus to the extent required by applicable securities legislation and will be deemed to be incorporated by reference into this Prospectus as of the date of the Prospectus Supplement solely for the purposes of the distribution of the Securities to which the Prospectus Supplement pertains.

Prospective investors should rely only on the information contained in or incorporated by reference in this Prospectus or any Prospectus Supplement. The Corporation has not authorized anyone to provide prospective investors with different or additional information. The Corporation is not making an offer of Securities in any jurisdiction where the offer is not permitted by law.

MARKETING MATERIALS

Certain “marketing materials” (as that term is defined in NI 41-101) may be used in connection with a distribution of Securities under this Prospectus and the applicable Prospectus Supplement(s). Any “template version” (as that term is defined in NI 41-101) of “marketing materials” pertaining to a distribution of Securities, and filed by the Corporation after the date of the Prospectus Supplement for the distribution and before the termination of the distribution of such Securities, will be deemed to be incorporated by reference in that Prospectus Supplement solely for the purposes of the distribution of the Securities to which the Prospectus Supplement pertains.

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the Credit Facilities and a new $1.0 billion committed term facility which will be provided by a syndicate of lenders on substantially the same terms as Pembina’s existing Credit Facilities. In addition, Pembina will assume Kinder Morgan Canada Limited’s 12,000,000 outstanding series 1 preferred shares (the “KML Series 1 Preferred Shares”) and 10,000,000 outstanding series 3 preferred shares (the “KML Series 3 Preferred Shares”) which are listed on the TSX under the symbols “KML.PR.A” and “KML.PR.C”, respectively.

The KML Series 1 Preferred Shares were issued at a price of $25.00 per share and the holders are entitled to receive dividends at an annual rate of $1.3125 per share, payable quarterly, up to but excluding November 15, 2022, at which time the fixed dividend rate will reset and the holders will have the option to convert to preferred shares which have a floating dividend rate. This reset of the fixed dividend rate, and the ability of the holders to convert to floating rate preferred shares, will also occur every five years thereafter. On each reset date (starting with November 15, 2022), Kinder Morgan Canada Limited has the option to redeem the shares for their original issue price of $25.00.

The KML Series 3 Preferred Shares were issued at a price of $25.00 per share and the holders are entitled to receive dividends at an annual rate of $1.3000 per share, payable quarterly, up to but excluding February 15, 2023, at which time the fixed dividend rate will reset and the holders will have the option to convert to preferred shares which have a floating dividend rate. This reset of the fixed dividend rate, and the ability of the holders to convert to floating rate preferred shares, will also occur every five years thereafter. On each reset date (starting with February  15, 2023), Kinder Morgan Canada Limited has the option to redeem the shares for their original issue price of $25.00.

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 9 Class A Preferred Shares, Series 11 Class A Preferred Shares, Series 13 Class A Preferred Shares, Series 15 Class A Preferred Shares, Series 17 Class A Preferred Shares, Series 19 Class A Preferred Shares and Series 21 Class A Preferred Shares are listed and posted for trading on the TSX

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under the symbols “PPL.PR.A”, “PPL.PR.C”, “PPL.PR.E”, “PPL.PR.G”, “PPL.PR.I”, “PPL.PR.K”, “PPL.PR.M”, “PPL.PR.O”, “PPL.PR.Q”, “PPL.PR.S” and “PPL.PF.A”, respectively. The following tables sets forth the monthly price ranges for and trading volumes of the Series 1, Series 3, Series 5, Series 7, Series 9, Series 11, Series 13, Series 15, Series 17, Series 19 and Series 21 Class A Preferred Shares on the TSX for August 1, 2018 to August 29, 2019, as reported by the TSX.

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RECENT DEVELOPMENTS

Amendment of Pembina’s Articles

At the annual and special meeting of Shareholders held on May 3, 2019, the Shareholders approved a special resolution to amend Pembina’s articles to increase the limit on the number of Class A Preferred Shares the Corporation 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 (the “Amendment”), such amount being equal to 50 percent of the number of Common Shares issued and outstanding as of the record date for the meeting. At a special meeting of the holders of Class A Preferred Shares held on June 25, 2019, the holders of Class A Preferred Shares approved a special resolution to effect the Amendment. Articles of amendment reflecting the Amendment were filed on June 25, 2019. For further information with respect to the Amendment,

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see “Business of the meetings – Approve an increase in the number of Class A preferred shares we can issue” in the Information Circular.

Kinder Acquisition

On August 21, 2019, Pembina announced that it had entered into agreements pursuant to which it has agreed, subject to certain conditions, to acquire Kinder Morgan Canada Limited (the “Corporate Acquisition”) and the U.S. portion of the Cochin Pipeline system (“Cochin US”) from Kinder Morgan, Inc (the “Cochin US Acquisition” and, collectively with the Corporate Acquisition, the “Kinder Acquisition”). Under the terms of the arrangement agreement governing the Corporate Acquisition (the “Arrangement Agreement”), Pembina will acquire all of the issued and outstanding restricted voting shares and special voting shares of Kinder Morgan Canada Limited and all of the class B units of Kinder Morgan Canada Limited Partnership by way of a plan of arrangement under the Business Corporations Act (Alberta). Pembina is offering to acquire each of the outstanding restricted voting shares and each class B unit in exchange for 0.3068 of a Common Share (or approximately 35.7 million Common Shares on an aggregate basis). Under the terms of the purchase and sale agreement governing the Cochin US Acquisition (the “Purchase and Sale Agreement”), Pembina, through its wholly-owned subsidiary Pembina U.S. Corporation, will acquire all of the outstanding membership interests in Kinder Morgan Cochin LLC, the entity holding Cochin US, from Kinder Morgan LP, for US$1.546 billion in cash, representing approximately $2.05 billion based on the prevailing Canadian / U.S. dollar exchange rate at the time of the announcement. Pursuant to the Corporate Acquisition, Pembina will also acquire Kinder Morgan Canada Limited’s obligations under the KML Series 1 Preferred Shares (as defined herein) and the KML Series 3 Preferred Shares (as defined herein). The Kinder Acquisition is cross-conditional on the closing of both the Corporate Acquisition and the Cochin US Acquisition. For more information, see the Kinder Acquisition MCR, which is incorporated by reference herein.

Dividend Increase

Subject to closing of the Kinder Acquisition, Pembina’s board of directors has also approved a $0.01 per Common Share, or approximately five percent, increase to its monthly Common Share dividend rate. The dividend increase will not be effective until following the closing of the Kinder Acquisition and is subject to compliance with applicable laws.

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 the board of directors, which considers earnings, cash flow, capital requirements, the financial condition of Pembina and other relevant factors when making its dividend determination.

pursuant to the “Dividend Reinvestment Component” of the DRIP, or (b) a Premium Dividend^™ equal to 101 percent of the amount of reinvested dividends, pursuant to the “Premium Dividend^™ Component” of the DRIP. Until otherwise announced by the Corporation, the Board has set the current discount rate at three percent to the Average Market Price. Additional information about the terms and conditions of the DRIP, including eligibility restrictions and withholding taxes, can be found on Pembina’s website at www.pembina.com. Pembina will determine, for each dividend payment date during a period for which the DRIP is not suspended, the amount of new equity or premium cash payments, if any, that will be made available under the DRIP on that date.

Class A Preferred Shares

The Class A Preferred Shares are the Preferred Shares that Pembina may offer and issue from time to time under this Prospectus and one or more Prospectus Supplements. For a description of the Class B Preferred Shares, which are a separate class of securities from the Class A Preferred Shares described below, please refer to “Description of the Common Shares, Preferred Shares and Capital Structure of Pembina – Class B Preferred Shares”.

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. The Class A Preferred Shares were not intended to and will not be used by the Corporation for anti-takeover purposes without Shareholder approval.

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.

The holders of each series of Class A Preferred Shares shall be entitled to receive dividends as and when declared by the Board in respect of such series of Class A Preferred Shares. If any cumulative dividends or amounts payable on a return of capital in the event of the liquidation, dissolution or winding-up of Pembina 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: (a) 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 (b) 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 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.

No series of Class A Preferred Shares shall be convertible into any other class of shares of the Corporation, but may be convertible into another series of Class A Preferred Shares.

Each series of Class A Preferred Shares shall be redeemable by the Corporation on such terms as determined by the Board.

Holders of any series of Class A Preferred Shares shall 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, to attend or to vote at any meeting of the shareholders of Pembina, unless the Board shall determine otherwise in the terms

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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 in the foregoing sentence, the material characteristics of each series of Class A Preferred Shares are substantially the same.

The specific terms of any offerings of Preferred Shares, including the designation of the particular series, the number of Preferred Shares offered, the offering price, any voting rights, the dividend rate, the dividend payment dates, and terms for redemption at the option of Pembina or the holder, any exchange or conversion terms and any other specific terms, will be described in one or more Prospectus Supplements.

See “Risk Factors – Risks Relating to the Securities”.

Class B Preferred Shares

Holders of Class B Preferred Shares shall not be entitled to receive notice of, to attend or to vote at any meeting of the shareholders of Pembina, except as required by law. The Class B Preferred Shares are retractable and redeemable at the option of the holder thereof and the Corporation, respectively. The price or consideration payable at which each Class B Preferred Share shall be retracted or redeemed (the “Redemption Amount”) shall be the fair market value of the consideration received therefor, as determined by the Board at the time of issuance of the Class B Preferred Shares, as adjusted from time to time pursuant to the terms of the Class B Preferred Shares.

The Class B Preferred Shares were not intended to and will not be used by the Corporation 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.

All of the issued Class B Preferred Shares of Pembina were cancelled pursuant to the amalgamation between Pembina and its wholly-owned subsidiary, Alberta Oil Sands Pipeline Ltd., on October 1, 2015, and, as of the date hereof, no Class B Preferred Shares are issued and outstanding.

The holders of Class B Preferred Shares shall be entitled to receive, if and when declared by the Board, preferential non-cumulative dividends based on the Redemption Amount applicable to such shares at the rate to be set by the Board.

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 per share together with all declared but unpaid dividends thereon.

The Corporation will not offer Warrants for sale separately to any member of the public in Canada, unless the offering is in connection with and forms part of the consideration for an acquisition or merger transaction or unless the applicable Prospectus Supplement containing the specified terms of the Warrants to be offered separately is first approved for filing by the securities commissions or similar authorities in each of the provinces of Canada where the Warrants will be offered for sale.

Holders of Warrants are not Shareholders. The following sets forth certain general terms of the Warrants qualified by this Prospectus. The specific terms of the Warrants, and the extent to which the general terms described in this section apply to those Warrants, will be set out in the applicable Prospectus Supplement. This description will include, where applicable:

The Corporation reserves the right to set out in a Prospectus Supplement specific terms of the Warrants that are not within the parameters set out in this Prospectus. In addition, to the extent that any particular terms of the Warrants described in a Prospectus Supplement differ from any of the terms described in this Prospectus, the description of such terms set out in this Prospectus shall be deemed to have been superseded by the description of such differing terms set out in such Prospectus Supplement with respect to such Warrants.

See “Risk Factors – Risks Relating to the Securities”.

DESCRIPTION OF THE SUBSCRIPTION RECEIPTS

Subscription Receipts may be offered separately or in combination with one or more other Securities. The Subscription Receipts will be issued under a Subscription Receipt agreement to be entered into between the Corporation and one or more financial institutions or trust companies acting as escrow agent. A copy of the Subscription Receipt agreement will be filed by the Corporation with the securities commission or similar authority in each of the provinces of Canada and the SEC after it has been entered into by the Corporation and will be available on Pembina’s profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. The applicable Prospectus Supplement will include details of the Subscription Receipt agreement covering the Subscription Receipts being offered.

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A Subscription Receipt will entitle the holder thereof to receive a Common Share and/or other securities of Pembina, for no additional consideration, upon the completion of a particular transaction or event, typically an acquisition of the assets or securities of another entity by Pembina or one or more of its subsidiaries. The subscription proceeds from an offering of Subscription Receipts will be held in escrow by an escrow agent pending the completion of the transaction or the termination time (the time at which the escrow terminates regardless of whether the transaction or event has occurred). Holders of Subscription Receipts will receive Common Shares and/or other securities of Pembina upon the completion of the particular transaction or event or, if the transaction or event does not occur by the termination time, a return of the subscription funds for their Subscription Receipts together with any interest or other income earned thereon, as determined by the terms of the applicable Subscription Receipt agreement.

Holders of Subscription Receipts are not Shareholders. The following sets forth certain general terms of the Subscription Receipts qualified by this Prospectus. The specific terms of the Subscription Receipts, and the extent to which the general terms described in this section apply to those Subscription Receipts, will be set out in the applicable Prospectus Supplement. This description will include, where applicable:

The Corporation reserves the right to set out in a Prospectus Supplement specific terms of the Subscription Receipts that are not within the parameters set out in this Prospectus. In addition, to the extent that any particular terms of the Subscription Receipts described in a Prospectus Supplement differ from any of the terms described in this Prospectus, the description of such terms set out in this Prospectus shall be deemed to have been superseded by the description of such differing terms set out in such Prospectus Supplement with respect to such Subscription Receipts.

See “Risk Factors – Risks Relating to the Securities”.

The following sets forth certain general terms of the Units qualified by this Prospectus. The specific terms of the Units, and the extent to which the general terms described in this section apply to those Units, will be set out in the applicable Prospectus Supplement. This description will include, where applicable:

The Corporation reserves the right to set out in a Prospectus Supplement specific terms of the Units that are not within the parameters set out in this Prospectus. In addition, to the extent that any particular terms of the Units described in a Prospectus Supplement differ from any of the terms described in this Prospectus, the description of such terms set out in this Prospectus shall be deemed to have been superseded by the description of such differing terms set out in such Prospectus Supplement with respect to such Units.

See “Risk Factors – Risks Relating to the Securities”.

amounted to approximately $314 million for the twelve month period ended June 30, 2019. The amounts for the twelve month period ended December 31, 2018 have been adjusted to reflect the issuance by the Corporation of the Series 12 MTNs and Series 13 MTNs on April 3, 2019, including the use of proceeds therefrom, as if such Series 12 MTNs and Series 13 MTNs were issued and the proceeds used as at January 1, 2018. Pembina’s profit or loss attributable to the Shareholders before interest expense and income tax for the twelve month period ended December 31, 2018 was $2,015 million and for the twelve month period ended June 30, 2019 was $2,145 million, which are 4.2 times and 4.7 times Pembina’s aggregate dividend and interest expense requirements (adjusted as described above for the twelve month period ended December 31, 2018) for such periods, respectively.

Any offering of Securities, other than Common Shares, will be a new issue of securities with no established trading market. Unless otherwise specified in the applicable Prospectus Supplement, such Securities will not be listed on any securities exchange. Certain dealers may make a market in such Securities, but will not be obligated to do so and may discontinue any market making at any time without notice. No assurance can be given that any dealer will make a market in such Securities or as to the liquidity of the trading market, if any, for such Securities.

Except as set out in a Prospectus Supplement relating to a particular offering of Securities, in connection with any offering of Securities, other than an “at-the-market distribution”, the underwriters, dealers or agents, as the case may be, may over-allot or effect transactions intended to fix or stabilize the market price of the Securities at a level above that which might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time. No underwriter of, or dealer involved in, an “at-the-market distribution” under this Prospectus, nor any person or company acting jointly or in concert with such an underwriter or dealer, may enter into any transaction that is intended to stabilize or maintain the market price of the offered Securities or securities of the same class as the Securities distributed under the “at-the-market distribution” pursuant to this Prospectus, including selling an aggregate number or principal amount of Securities that would result in the underwriter or dealer creating an over-allocation position in the Securities.

relevant Prospectus Supplement(s) or that any secondary market which does develop will continue. This may affect the pricing of such Securities in the secondary market, if any, the transparency and availability of trading prices, the liquidity of the securities and the extent of regulation of such Securities.

The public offering prices of the Securities may be determined by negotiation between Pembina and underwriters based on several factors and may bear no relationship to the prices at which Securities will trade in the public market subsequent to such offering. See “Plan of Distribution”.

The Common Shares or other listed Securities may be subject to price and volume fluctuations, and the market price for the Common Shares or other listed Securities, as applicable, following an offering may drop below the offering price.

In recent years, securities markets have experienced considerable price and volume volatility, which may have been unrelated to the operating performance of Pembina and not necessarily determined solely by reference to the underlying value of Pembina’s assets. The market price of publicly traded securities is affected by many variables, including the strength of the economy generally, commodity prices, the availability and attractiveness of alternative investments and the breadth of the public market for the securities. The effect of these and other factors on the market price of securities on the stock exchanges on which Pembina securities trade suggests that the trading price of the Common Shares and other listed Securities may be volatile. The market price for such Securities may be affected by numerous factors beyond the control of Pembina. These fluctuations may affect the price of the Common Shares or other listed Securities following an offering, and the market price of the Common Shares or other listed Securities, as applicable, may drop below the offering price. As a result of this volatility, securityholders may not be able to sell their Common Shares and other listed Securities at or above the offering price. Pembina cannot predict at what price the Common Shares or other listed Securities issued by Pembina will trade in the future.

The decision to pay dividends and the amount of such dividends is subject to the discretion of the Board based on numerous factors and may vary from time to time.

Cash dividends to holders of Common Shares or Preferred Shares are not guaranteed. Although Pembina currently intends to pay monthly cash dividends to its Shareholders, these cash dividends may be reduced or suspended. The amount of cash available to Pembina to pay dividends, if any, can vary significantly from period to period for a number of reasons, including, among other things: Pembina’s operational and financial performance; fluctuations in operating costs; the amount of cash required or retained for debt service or repayment; amounts required to fund capital expenditures and working capital requirements; access to equity markets; foreign exchange rates and interest rates; and the risk factors set herein and documents incorporated by reference herein.

The decision whether or not to pay dividends and the amount of any such dividends are subject to the discretion of the Board, which regularly evaluates Pembina’s proposed dividend payments and the solvency test requirements of the ABCA. In addition, the level of dividends per Common Share will be affected by the number of outstanding Common Shares and other securities that may be entitled to receive cash dividends or other payments, such as Preferred Shares and debt securities which may be entitled to payment in priority to dividends on Common Shares. Dividends may be increased, reduced or suspended depending on Pembina’s operational success and the performance of its assets. The market value of the Securities may deteriorate if Pembina is unable to meet dividend expectations in the future, and that deterioration may be material.

Pembina may issue additional Securities in the future which may dilute the holdings of existing securityholders, including holders of Securities purchased hereunder, or which may have priority over existing securityholders.

Pembina may issue additional Securities, which may dilute existing securityholders, including purchasers of the Securities hereunder. Pembina may also issue debt securities that have priority over holders of other Securities

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with respect to payment in the event of an insolvency or winding-up of Pembina. Securityholders will have no pre-emptive rights in connection with any such further issuances. The Board has the discretion to determine the designation, rights, privileges, restrictions and conditions attached to any series of Preferred Shares, the price and terms of any debt securities and the price and terms for any issuances of Common Shares, Preferred Shares, Warrants, Subscription Receipts and Units.

Credit ratings may not reflect all risks of an investment in the Preferred Shares and may change.

Credit ratings may not reflect all risks associated with an investment in Preferred Shares. Any credit ratings applied to Preferred Shares are an assessment of Pembina’s ability to pay its obligations. Consequently, real or anticipated changes in the credit ratings will generally affect the market value of Preferred Shares. The credit ratings, however, may not reflect the potential impact of risks related to structure, market or other factors discussed herein on the value of Preferred Shares. There is no assurance that any credit rating assigned to the Preferred Shares will remain in effect for any given period of time or that any rating will not be lowered or withdrawn entirely by the relevant rating agency.

Increases in interest rates may cause the market price or value of the Preferred Shares to decline.

Prevailing interest rates will affect the market price or value of the Preferred Shares. The market price or value of the Preferred Shares may decline as prevailing interest rates for comparable instruments rise, and increase as prevailing interest rates for comparable debt instruments decline.

Risks Relating to the Kinder Acquisition

Possible Failure to Realize Anticipated Benefits of the Kinder Acquisition

The Kinder Acquisition is subject to normal commercial risks that such transaction may not be completed on the terms negotiated or at all. Pembina is proposing to complete the Kinder Acquisition to strengthen the position of Pembina in the pipeline industry and to create the opportunity to realize certain benefits including, among other things, potential cost savings. Achieving the benefits of the Kinder Acquisition depends in part on successfully consolidating functions and integrating operations, procedures and personnel in a timely and efficient manner, as well as the ability of Pembina, after giving effect to the Kinder Acquisition, to realize the anticipated growth opportunities and synergies from combining the acquired businesses and operations of Kinder Morgan Canada Limited and the Cochin Pipeline system with those of Pembina.

The integration of the Kinder Morgan Canada Limited and the Cochin Pipeline assets into Pembina’s operations 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 result in the loss of key employees and the disruption of ongoing business, customer and employee relationships that may adversely affect Pembina’s ability to achieve the anticipated benefits of the Kinder Acquisition.

Satisfaction of Conditions Precedent

The completion of the Kinder Acquisition is subject to a number of condition precedents, certain of which are outside the control of Kinder Morgan Canada Limited, Kinder Morgan, Inc. and Pembina, including obtaining the requisite approvals from shareholders of Kinder Morgan Canada Limited and receipt of certain required regulatory approvals, including approval under the Competition Act (Canada) and the Canada Transportation Act. A substantial delay in obtaining satisfactory approvals or the imposition of unfavourable terms or conditions to the regulatory approvals necessary to complete the Kinder Acquisition could delay the effective date and may adversely affect the business, financial condition or results of Pembina or the combined company. There is no certainty, nor can Pembina provide any assurance, that these conditions will be satisfied or, if satisfied, when they will be satisfied.

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Entry into New Business Activities

Completion of the Kinder Acquisition will result in a combination of the current business activities currently carried on by each of Kinder Morgan Canada Limited, Kinder Morgan Cochin LLC and Pembina as separate entities. The combination of these activities into the combined company may expose Pembina to different business risks than those to which it was exposed prior to the Kinder Acquisition. As a result of the changing risk profile of the companies, the combined company may be subject to review of its credit ratings, which may result in a downgrade or negative outlook being assigned to the combined company.

After the completion of the Kinder Acquisition, Pembina will face the same risks currently facing each of Kinder Morgan Canada Limited, Kinder Morgan Cochin LLC and Pembina, in addition to other risks.