Inter Pipeline Announces Record Third Quarter 2013 Financial and Operating Results

Inter Pipeline Announces Record Third Quarter 2013 Financial and Operating 
CALGARY, ALBERTA -- (Marketwired) -- 11/07/13 -- Inter Pipeline Ltd.
("Inter Pipeline") (TSX:IPL) announced today strong financial and
operating results for the three and nine month periods ended
September 30, 2013. 

--  Completed a highly successful conversion from a limited partnership
    structure to a dividend paying corporation
--  Funds from operations(i) totaled $123 million, a new quarterly record
--  Low quarterly payout ratio(i) of 70.5%
--  Announced a $0.15 per share annualized dividend increase, representing
    Inter Pipeline's largest ever increase and second in 2013
--  Oil sands and conventional oil pipeline volumes averaged 1,028,900
    barrels per day (b/d), with both business segments generating record
    quarterly cash flow
--  Announced a long-term agreement to transport diluent and bitumen blend
    for Canadian Natural Resources' Kirby South oil sands project, involving
    a capital investment of $95 million
--  Announced a $50 million pipeline connection to a new rail loading
    facility owned by Canexus Corporation
--  Announced a $45 million expansion of the Polaris pipeline system to
    accommodate additional diluent deliveries to Imperial Oil's Kearl oil
    sands project
--  Successfully commissioned a $63 million liquid sweetening project at the
    Cochrane NGL extraction plant
--  Incurred record growth capital expenditures(i) of $566 million during
    the quarter
--  Issued $500 million of senior medium-term notes at an attractive
    interest rate of 3.448%

Subsequent Events 

--  Raised $345 million in new equity through the highly successful issuance
    of Inter Pipeline Ltd. common shares
--  Announced a long-term agreement to provide diluent transportation
    service to the Hangingstone oil sands project under development by
    Athabasca Oil Corporation

(i) Please refer to the "Non-GAAP and additional GAAP Financial
Measures" section of the MD&A. 
Corporate Conversion Event 
At a special meeting held on August 22, 2013, Inter Pipeline's
unitholders approved a proposed conversion of its structure from a
publicly-traded limited partnership to a dividend paying corporation.
Unitholders voted 99% in favour of the proposed corporate conversion. 
As a Canadian corporation, Inter Pipeline expects to benefit from
improved liquidity and broader access to both domestic and
international capital markets. Under its former limited partnership
structure, Inter Pipeline was prevented from accessing US and other
international sources of equity capital. 
Inter Pipeline is also in the process of implementing certain
enhancements to its corporate governance model. These changes include
plans to appoint a new independent chairman of the board and the
commencement of Annual General Meetings in 2014. 
Financial Performance 
Inter Pipeline generated strong financial results in the third
quarter of 2013. Funds from operations totaled $123.3 million or
$0.44 per share, compared to $109.3 million in the third quarter of
2012. The oil sands transportation and conventional oil gathering
business segments both generated record quarterly financial results,
reflecting volume growth and contributions from new pipeline projects
that entered commercial service during the quarter. 
By segment, Inter Pipeline's oil sands transportation, conventional
oil pipelines, NGL extraction and bulk liquid storage businesses
contributed funds from operations of $55.7 million, $47.0 million,
$43.2 million and $17.2 million, respectively. Corporate costs,
including interest, income tax and general and administrative charges
amounted to $39.8 million for the quarter.  
Cash Dividends 
Cash dividend payments to shareholders increased by 19% in the third
quarter compared to the comparable period last year. Declared
dividends totaled $85 million or $0.2975 per share, compared to $71
million or $0.2625 per share in the third quarter of 2012. 
In early September, Inter Pipeline announced a 13.2% increase in its
monthly dividend rate. This increase, the largest in Inter Pipeline's
history, results in annualized dividend payments increasing by $0.15
per share to $1.29 per share. Inter Pipeline's latest dividend
increase supplements the $0.03 per year dividend increase announced
in early June when its former general partner was purchased and fees
payable to an external manager were cancelled. 
During the third quarter, Inter Pipeline's dividend payout ratio was
Oil Sands Transportation 
In the third quarter of 2013, throughput volumes in the oil sands
transportation segment totaled 832,900 b/d, similar to levels
transported during the same period last year. The Cold Lake, Corridor
and Polaris pipeline systems averaged 458,500 b/d, 354,300 b/d, and
20,100 b/d, respectively. 
During the quarter, Inter Pipeline announced a new long-term
agreement to transport approximately 80,000 b/d of bitumen blend and
diluent for the Kirby South oil sands project operated by Canadian
Natural Resources. Inter Pipeline has completed construction of
approximately 40 kilometres of pipeline and related facilities on the
Cold Lake system at a capital cost of approximately $95 million.
Project costs had previously been backstopped by Canadian Natural
Resources during the construction period. Upon commissioning of the
new facilities in August, Inter Pipeline began generating incremental
EBITDA of approximately $35 million annually. 
In another long-term agreement, Canexus Corporation signed a ten-year
commitment for 100,000 b/d of firm bitumen blend capacity on a new
pipeline segment from the Cold Lake pipeline system to its new unit
train loading operations near Bruderheim, Alberta. Inter Pipeline
will construct a new 13 kilometre pipeline lateral and metering
facilities at a capital cost of approximately $50 million. Inter
Pipeline expects to generate incremental EBITDA of approximately $10
million annually over the life of the contract with Canexus. 
Also during the quarter, Inter Pipeline announced that it will
increase diluent delivery capacity on the Polaris pipeline system in
support of the phased development of Imperial Oil's Kearl oil sands
project. Imperial has elected to increase its firm capacity
commitment from 60,000 b/d to 120,000 b/d. In response, Inter
Pipeline will install additional pumping capacity on the Polaris
system at a capital cost of approximately $45 million. Inter Pipeline
expects to generate approximately $19 million per year in incremental
EBITDA from this project. 
Subsequent to quarter end, Inter Pipeline entered into an agreement
with Athabasca Oil Corporation to transport an initial 4,500 b/d of
diluent under a 25-year ship-or-pay agreement for its Hangingstone
oil sands project. Inter Pipeline will construct a new pipeline
lateral on the Polaris system and related facilities at a capital
cost of approximately $25 million. Inter Pipeline holds exclusive
rights to deliver additional diluent volumes to the Hangingstone
project which could rise to 30,000 b/d pending the phased development
of this project. 
In total, Inter Pipeline is currently advancing approximately $2.7
billion in organic investments within its oil sands transportation
business segment. These investments are commercially secured under
signed transportation agreements which will provide stable, long-term
cash flow. 
Conventional Oil Pipelines 
In the third quarter, the conventional oil pipeline segment
transported 196,000 b/d, a gain of 21,500 b/d compared to the third
quarter of 2013. Higher throughput volumes were the result of strong
drilling activity in areas serviced by Inter Pipeline's conventional
oil pipeline systems. Inter Pipeline's conventional oil gathering
systems also benefitted from volumes diverted from competing regional
pipelines due to system outages. 
The Bow River, Central Alberta and Mid-Saskatchewan pipeline systems
generated record funds from operations in the third quarter, totaling
$47 million compared to $39 million in the third quarter of last
year. In addition to the volume gains, increased midstream marketing
activities contributed to record results. 
Combined, Inter Pipeline's conventional oil gathering systems
generated revenues of $2.91 per barrel, similar to that realized in
the comparable period of last year. 
NGL Extraction 
Inter Pipeline's NGL extraction facilities at Cochrane and Empress
processed a total of 2.9 billion cubic feet per day (bcf/d) during
the quarter, 0.3 bcf/d higher than in the third quarter of 2012.
Combined ethane and propane-plus production averaged 113,500 b/d, an
increase of 7,000 b/d over third quarter 2012 production. Throughput
volume increases at Empress more than offset reductions at the
Cochrane extraction plant. During the third quarter, Cochrane plant
volumes were adversely affected by flow restrictions imposed on the
TransCanada pipeline system due to flooding events in Alberta. 
Inter Pipeline realized frac-spread pricing of US$0.97 per US gallon
on propane-plus sales at the Cochrane plant during the quarter, up
from the US$0.92 realized in the third quarter of 2012. 
In August, Inter Pipeline commissioned a new $63 million project to
reduce the sulphur content of propane-plus streams produced at the
Cochrane NGL extraction plant. The successful completion of this
project will allow Inter Pipeline continuing access to premium-priced
markets for low sulphur NGL products. 
Bulk Liquid Storage 
Tank utilization rates in Inter Pipeline's European bulk liquid
storage operations averaged 82% in the third quarter, compared to 88%
in the same period in 2012. Lower utilization rates were primarily
the result of backwardated pricing in the forward markets for
petroleum products stored at various terminals in Europe. 
During the quarter, Inter Pipeline divested land holdings associated
with a former truck terminal operation for proceeds of approximately
Financing Activity 
Inter Pipeline continues to benefit from strong access to capital
markets and is well positioned to finance its ongoing organic growth
program. During the quarter, Inter Pipeline successfully issued $500
million in senior, unsecured medium-term notes. These notes mature on
July 20, 2020 and bear interest at an attractive annual rate of
Additionally, subsequent to quarter end Inter Pipeline raised $345
million through the issuance of common equity at a price of $25.15
per share. Net proceeds were used to reduce debt outstanding under
Inter Pipeline's $1.25 billion revolving credit facility. 
As at September 30, 2013, Inter Pipeline's recourse debt to
capitalization ratio was 58.5% compared to 57.8% at June 30, 2013.
After including the impact of the $345 million equity offering, this
ratio would have been reduced to 49.9%. 
Conference Call & Webcast 
Inter Pipeline will hold a conference call and webcast today at 2:30
p.m. (Mountain Time) / 4:30 p.m. (Eastern Time) to discuss its third
quarter 2013 financial and operating results. 
To participate in the conference call, please dial 866-223-7781 or
416-340-8530. A pass code is not required. A recording of the call
will be available for replay until November 14, 2013, by dialling
800-408-3053 or 905-694-9451. The pass code for the replay is
A webcast of the conference call can be accessed on Inter Pipeline's
website at by selecting "Investor Relations"
then "Webcasts & Conference Calls". An archived version of the
webcast will be available for approximately 90 days. 

                 Select Financial and Operating Highlights                  
(millions of dollars, except      Three Months            Nine Months       
 per share and percent               Ended                   Ended          
 amounts where noted)            September 30,           September 30,      
Throughput and Production          2013        2012        2013        2012 
Pipeline volumes (000 b/d)                                                  
 Oil sands transportation1        832.9       836.6       830.4       804.0 
 Conventional oil pipelines       196.0       174.5       184.1       175.1 
 Total pipeline volumes         1,028.9     1,011.1     1,014.5       979.1 
Extraction production1 (000                                                 
 Ethane                            75.3        71.0        73.4        72.5 
 Propane plus                      38.2        35.5        35.0        35.7 
 Total extraction production      113.5       106.5       108.4       108.2 
Financial Results3                                                          
Revenue                          $340.5      $300.7      $988.5      $882.3 
Funds from operations2                                                      
 Oil sands transportation         $55.7       $47.0      $155.5      $135.1 
 NGL extraction                   $43.2       $50.4      $117.3      $155.9 
 Conventional oil pipelines       $47.0       $38.9      $130.9      $114.7 
 Bulk liquid storage              $17.2       $17.6       $57.1       $60.2 
 Corporate costs                 $(39.8)     $(44.6)    $(122.7)    $(135.7)
 Total funds from                                                           
  operations2                    $123.3      $109.3      $338.1      $330.2 
 Per share2                       $0.44       $0.40       $1.21       $1.23 
Net (loss) Income                 $77.8       $68.4     $(131.6)     $257.3 
Supplemental Financial                                                      
Net income attributable to                                                  
 shareholders                     $74.8       $65.9     $(139.4)     $249.9 
Per share - basic                 $0.27       $0.24      $(0.50)      $0.93 
 - diluted                        $0.26       $0.24      $(0.50)      $0.93 
Cash dividends declared           $84.6       $71.3      $239.6      $211.8 
 Per share                      $0.2975     $0.2625     $0.8550     $0.7875 
Payout ratio2                      70.5%       67.0%       72.8%       65.8%
Capital expenditures2,3                                                     
 Growth                          $566.1      $108.6    $1,369.5      $217.4 
 Sustaining                        $7.4       $11.4       $19.1       $24.8 
Total capital expenditures       $573.5      $120.0    $1,388.6      $242.2 
1. Empress V NGL production and Cold Lake volumes reported on a 100% basis; 
Polaris volumes represent initial shipments that were prorated for the 9    
month period.                                                               
2. Please refer to the "Non-GAAP Financial Measures" section of the MD&A.   
3. Amounts reported on a 100% basis that includes non-controlling interest. 

MD&A, Financial Statements & Notes 
The Management's Discussion and Analysis ("MD&A") and consolidated
financial statements provide a detailed explanation of Inter
Pipeline's operating results for the three and nine month periods
ended September 30, 2013 as compared to the three and nine month
periods ended September 30, 2012. These documents are available at and at 
Inter Pipeline Ltd. 
Inter Pipeline is a major petroleum transportation, bulk liquid
storage and natural gas liquids extraction business based in Calgary,
Alberta, Canada. Inter Pipeline owns and operates energy
infrastructure assets in western Canada and northern Europe.
Additional information about Inter Pipeline can be found at 
Inter Pipeline shares trade on the Toronto Stock Exchange under the
symbol IPL.  
Certain information contained herein may constitute forward-looking
statements that involve known and unknown risks, assumptions,
uncertainties and other factors. Forward-looking statements in this
news release include, but are not limited to, statements regarding
timing and completion of, and EBITDA Inter Pipeline expects to
generate from, the Polaris and Cold Lake pipeline and other projects
and possible future Cold Lake and Polaris pipeline expansions.
Readers are cautioned not to place undue reliance on forward-looking
statements, as such statements are not guarantees of future
performance. Inter Pipeline in no manner represents that actual
results, levels of activity and achievements will be the same in
whole or in part as those set out in the forward-looking statements
herein. Such information, although considered reasonable by Inter
Pipeline at the time of preparation, may later prove to be incorrect
and actual results may differ materially from those anticipated in
the statements made. For this purpose, any statements that are not
statements of historical fact may be deemed to be forward-looking
statements. Forward-looking statements often contain terms such as
"may", "will", "should", "anticipate", "expects" and similar
expressions. Such assumptions, risks, uncertainties and other factors
include, but are not limited to, assumptions, risks and uncertainties
associated with: operations, such as loss of markets, regulatory
matters, environmental matters, industry competition, potential
delays and cost overruns of construction projects, including the
Polaris and Cold Lake pipeline system projects, the status, credit
risk and continued existence of customers having contracts with Inter
Pipeline and its subsidiaries, and the ability to access sufficient
capital from internal and external sources. You can find a discussion
of those risks and uncertainties in Inter Pipeline's securities
filings at The forward-looking statements contained in
this news release are made as of the date of this document, and,
except to the extent required by applicable securities laws and
regulations, Inter Pipeline assumes no obligation to update or revise
forward-looking statements made herein or otherwise, whether as a
result of new information, future events, or otherwise. The
forward-looking statements contained in this document are expressly
qualified by this cautionary note. 
Effective September 1, 2013, Inter Pipeline completed a plan of
arrangement that resulted in the reorganization of Inter Pipeline
Fund, a limited partnership, into Inter Pipeline, a dividend paying
corporation. Pursuant to the arrangement, among other things, each
outstanding Class A unit of Inter Pipeline Fund was exchanged for one
common share of Inter Pipeline. Accordingly, any references to Inter
Pipeline for any period prior to September 1, 2013 refer to Inter
Pipeline Fund and its consolidated subsidiaries, as applicable, and
any references to Inter Pipeline subsequent to September 1, 2013
refer to Inter Pipeline Ltd. and its consolidated subsidiaries, as
applicable. Similarly, any references to common shares, shareholders
or dividends for any period prior to September 1, 2013, refer to
Class A units, unitholders and distributions of the former Inter
Pipeline Fund, and any references to common shares, shareholders or
dividends for any period on or after September 1, 2013 refer to
common shares, shareholders and dividends of Inter Pipeline Ltd. 
All dollar values are expressed in Canadian dollars unless otherwise
Non-GAAP Financial Measures  
Certain financial measures referred to in this news release are not
measures recognized by GAAP. These non-GAAP financial measures do not
have standardized meanings prescribed by GAAP and therefore may not
be comparable to similar measures presented by other entities.
Investors are cautioned that these non-GAAP financial measures should
not be construed as alternatives to other measures of financial
performance calculated in accordance with GAAP. 
Inter Pipeline Ltd. - Investor Relations
Jeremy Roberge
Vice President, Capital Markets
403-290-6015 or 1-866-716-7473 
Inter Pipeline Ltd. - Media Relations
Tony Mate
Director, Corporate and Investor Communications
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