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CORPORATE PRESENTATION – Inter Pipeline Ltd.

Inter Pipeline Ltd. · Jan 1, 2015 · 46 slides

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Slides

  1. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 1
    Corporate Presentation January 2015
  2. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 2
    Market Information Market Capitalization 11.7 billion Enterprise Value 16.1 billion Annualized Dividend 1.47/share Yield 4.1% Information as at close of markets on December 31, 2014 1
  3. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 3
    World Scale Energy Infrastructure Assets Oil Sands Conventional NGL Bulk Liquid Transportation Oil Pipelines Extraction Storage Over 2.2 million 3,700 km Process 40% of 19 million b/d of barrels of pipeline network natural gas…
  4. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 4
    Areas of Operation 2014 September YTD EBITDA Fort McMurray ALBERTA SASKATCHEWAN SCOTLAND DENMARK Edmonton North Sea Hardisty Cochrane IRELAND B.C. Extraction ENGLAND GERMANY Plant Calgary Empress II & V FRANCE…
  5. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 5
    Investment Value Proposition Strategic Financial Infrastructure Financial Strength Strength Assets Majority underpinned Solid balance sheet by stable cost of service revenue Strong Investor Excellent access to Returns capital…
  6. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 6
    Dividend Growth /Share *Based on actual dividends to December 2014 and 0.1225/share per month thereafter 5
  7. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 7
    5-Year Dividend CAGR 18.0% 17.0% 16.0% 14.0% 12.0% 10.2% 10.0% 8.0% 7.5% 6.0% 6.0% 3.7% 4.0% 2.2% 2.0% 0.3% 0.0% 0.0% Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 CAGR from 2010 to 2015E; 2015E is based on current…
  8. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 8
    Enterprise Growth Million 7
  9. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 9
    Recent Developments Increased annual dividend 14% to 1.47 per share 3.1 billion integrated oil sands development FCCL expansion project program in progress 850,000 b/d commitment CNR Kirby South 80,000 Issued 900 million of b/d…
  10. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 10
    2014 September YTD EBITDA 44% 9
  11. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 11
    Oil Sands Transportation Three major oil sands pipeline AOSP Imperial Kearl systems with combined ultimate Suncor Husky Sunrise capacity of 4.5 million b/d Fort McMurray Jacos/Nexen AOC Hangingstone Corridor Hangingstone Cold…
  12. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 12
    Polaris Pipeline Capacity 000s b/d 1,200 800 1,200 Available Capacity 700 660 600 10 7 5 18 30 500 120 400 Contracted 350 Volumes 300 540 200 100 0 FCCL Imperial Husky CNR Kirby Suncor JACOS AOC Ultimate…
  13. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 13
    Cold Lake Pipeline Capacity 000s b/d 1,900 1,800 2,000 Available Capacity 1,600 673 1,400 63 14 1,200 500 1,000 Contracted 800 Volumes 650 600 1,227 400 200 0 Original Cold FCCL CNR Kirby South Osum Orion Ultimate…
  14. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 14
    Corridor Pipeline Capacity 000s b/d 1,400 1,400 1,200 1,000 Potential 935 3rd Party Capacity** 800 600 465 400 344 Contracted 200 465 Volumes 0 Current Throughput* Installed Capacity Ultimate Capacity *current…
  15. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 15
    EBITDA Growth by Pipeline System Million 250 200 150 100 50 0 2008 2009 2010 2011 2012 2013 Corridor Cold Lake Polaris 14
  16. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 16
    Oil Sands Project Summary Capital LT Annual Pipeline Contract InService Implied Cost EBITDA Project System Type Date Multiple (mm) (mm) FCCL Foster Creek & Christina Lake Polaris COS 2014 1,300 120 10.8x FCCL Foster Creek Cold…
  17. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 17
    Commercially Secured EBITDA Profile Million 350 Cold Lake & Polaris: FCCL Narrows Lake 300 Polaris: Imperial Kearl Phase II Expansion 250 Polaris: AOC 200 Hangingstone Phase I 150 Cold Lake: FCCL Foster Creek 100 Cold…
  18. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 18
    Oil Sands Growth Opportunities Identified 4+ billion of Imperial Kearl Husky Sunrise Expansion potential opportunities Imperial Aspen from 2015+ Fort McMurray Cenovus - Telephone Lake AOC Hangingstone Identified 1.3 million b/d…
  19. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 19
    Services Integration: Terminals & Storage Pipeline capacity (million b/d) Pipeline Stream (b/d) Lamont diluent up to 1.6 Lamont blend up to 1.5 Hardisty blend up to 1.4 Multi-Modal Storage Connections Cheecham diluent up to…
  20. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 20
    Oil Sands Volume Growth Bitumen 000s b/d Diluent 000s b/d Source: CERI Study No.141 July 2014 19
  21. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 21
    Oil Sands Forecast vs. Capacity Million b/d Heavy Blend + SCO Supply to Market 7.0 Northern Gateway 6.0 TCPL Energy East 5.0 TMPL Expansion Production / Capacity 4.0 Keystone XL Rail (Expansion) 3.0 Alberta Clipper…
  22. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 22
    2014 September YTD EBITDA 24% 21
  23. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 23
    Conventional Pipelines Edmonton 3,700 km of oil pipelines ALBERTA SASK. servicing 135 producers Hardisty 100% fee based business, excluding midstream Stettler marketing Kerrobert Growing production from Viking, Pekisko,…
  24. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 24
    Conventional EBITDA Millions 160 140 120 100 80 60 40 20 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Oil Gathering Hardisty Midstream Marketing 23
  25. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 25
    Conventional Throughput 000s b/d 225 202 196 200 187 176 37 175 34 169 170 165 35 23 26 28 150 22 33 33 66 125 33 36 41 54 100 75 129 113 110 108 107 50 98 100 25 0 2008 2009 2010 2011 2012 2013 2014 YTD* Bow…
  26. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 26
    Growth Opportunities Edmonton System expansions ALBERTA Hardisty Merchant storage additions SASK. Stettler Kerrobert Rail connections Kindersley Hardisty South transmission expansion Calgary Brooks MSPL expansion…
  27. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 27
    Saskatchewan Viking Growth Number of Wells Production (b/d) 1,200 60,000 IPL pipeline services Viking producers 1,000 50,000 100 million expansion in progress 800 40,000 Increases available capacity by 95,000 b/d 600 30,000…
  28. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 28
    2014 September YTD EBITDA 20% 27
  29. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 29
    NGL Extraction Three large scale extraction Edmonton ALBERTA plants produced 95,700 b/d of NGLs* Strategically located on the TransCanada Alberta system Cochrane 2.5 bcf/d 6.2 bcf/d of extraction Capacity SASKATCHEWAN capacity…
  30. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 30
    Historical Frac Spread Frac Spread: Mont Belvieu NGL less AECO Natural Gas US / US Gal 1.60 1.40 1.20 Closed extraction acquisition 1.00 0.80 15 year average frac spread: 58.7 US cents 0.60 0.40 0.20 0.00 Jan-04…
  31. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 31
    Future Opportunities New developments require additional infrastructure ALBERTA SASK. Leverage IPLs strengths in: Pipelines MONTNEY Plant operations Terminals Major project DUVERNAY development Edmonton Opportunities to…
  32. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 32
    2014 September YTD EBITDA 12% 31
  33. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 33
    Bulk Liquid Storage SCOTLAND Petroleum and petrochemical DENMARK storage facilities NORTHERN North Sea IRELAND Tyne Seal Sands 12 multi-product terminals WALES Riverside Asnaes Immingham West Stigsnaes Immingham East…
  34. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 34
    Strategic Drivers Long-life infrastructure assets Strong organic investment potential Geographic diversification, mature markets Stable political and regulatory environments Fee-based cash flow Experienced operations and…
  35. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 35
    Capacity Utilization Simon Storage 100% 75% 50% 25% 0% Q1 2006 2006 Q12007 2007 Q12008 2008 Q12009 2009 Q12010 2010 Q12011 2011 Q12012 2012 Q12013 2013 Q12014 2014 Inter Terminals 100% 75% 50% 25%…
  36. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 36
    Acquisition Growth Opportunities Aquisition opportunities in NW Europe: Conversion of refinery tank storage to regional import terminals Opportunities to acquire oil distribution terminals as major oil companies focus upstream…
  37. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 37
    Organic Growth Opportunities 57,000 bbl new stainless steel chemical tanks under construction in Germany Assessing demand for additional chemical tankage at Seal Sands and Tyne Tank upgrades to provide storage for a broader…
  38. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 38
    37
  39. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 39
    Financial Discipline Recourse Debt to Total Capitalization 60% Capital Structure* as at September 30, 2014 50% 40% 30% 11% 20% 10% 0% 48% 2009 2010 2011 2012 2013 Q3 2014 41% Conservative Payout Ratio** 100% 80%…
  40. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 40
    Capital Markets Activity Excellent access to capital markets MTN Debt Maturity Profile 2,325 million medium term notes issued 2044 2017 22% 17% 900 million MTNs issued in 2018 May 2014 9% 2022 17% 2020 Over 1 billion in equity…
  41. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 41
    EBITDA by Business Segment Million 1,100 1,000 900 800 700 600 500 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F* 2015F* Oil Sands Transportation Conventional Oil Pipelines NGL Extraction…
  42. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 42
    Projected EBITDA by Contract Type 2013 Annual EBITDA Projected 2015 Annual EBITDA 10% 41% 60% 30% 37% No volume or commodity price Volume & operating cost Volume and commodity price exposure and flow-through of…
  43. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 43
    EBITDA Stability Inter Pipeline Mid Cap Peers 2015F EBITDA 2015F EBITDA* 10% 38% 30% 60% 35% 27% No volume or commodity price Volume & operating cost Volume and commodity price exposure and flow-through of exposure but no…
  44. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 44
    Dividend Stability Million 500 450 400 350 300 250 200 150 100 50 0 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 FFO Dividend FFO Dividend FFO Dividend FFO Dividend FFO Dividend FFO* Dividend*…
  45. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 45
    Looking Forward Experienced management team with a solid track record of increasing shareholder value Continued focus on developing over 7 billion of major oil sands growth opportunities Long-term contracts expected to generate…
  46. CORPORATE PRESENTATION – Inter Pipeline Ltd. – slide 46
    Contact Information Christian Bayle President & CEO Brent Heagy Chief Financial Officer Jeremy Roberge Vice President, Capital Markets investorrelationsinterpipeline.com Inter Pipeline Ltd. Suite 2600, 237 4th Avenue SW…

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