Inter Pipeline Fund Announces Very Strong Third Quarter 2012

Inter Pipeline Fund Announces Very Strong Third Quarter 2012
Financial and Operating Results 
CALGARY, ALBERTA -- (Marketwire) -- 11/08/12 -- Inter Pipeline Fund
("Inter Pipeline") (TSX:IPL.UN) announced today its financial and
operating results for the three and nine month periods ended
September 30, 2012.  

--  Funds from operations(i) of $106 million were the third highest
    quarterly results in Inter Pipeline's history after excluding one time
--  Low quarterly payout ratio before sustaining capital(i) of 67% 
--  Total distributions to unitholders surpassed $2 billion since inception,
    including $71 million declared in the third quarter 
--  Combined quarterly throughput volumes on Inter Pipeline's oil sands and
    conventional oil pipeline systems averaged a record 1,011,100 barrels
    per day (b/d) or 17,800 b/d higher than third quarter 2011 
--  Oil sands transportation business generated record funds from
    operations(i) of $44 million and transported record volumes of 836,600
--  Volumes averaged 174,500 b/d on Inter Pipeline's conventional oil
    pipeline systems representing an increase of 5,200 b/d quarter over
--  Announced $2.1 billion integrated oil sands development program for Cold
    Lake and Polaris pipeline systems 
--  Polaris pipeline system entered commercial service for the Kearl oil
    sands project, which is expected to generate approximately $36 million
    of EBITDA(i) annually    

(i) Please refer to the "Non-GAAP Financial Measures" section of the
Funds From Operations   
Inter Pipeline generated very strong financial results in the third
quarter of 2012.  Funds from operations totaled $106.4 million or
$0.39 per unit. This represents a decrease of $5.5 million from third
quarter 2011 levels, however prior period results were positively
impacted by a one time $20.5 million pricing adjustment in the NGL
extraction business segment.  
Strong Q3 2012 results included an initial revenue contribution from
the Polaris pipeline system, increased throughput in the conventional
oil pipeline segment, very strong throughput levels at the Cochrane
NGL extraction plant and higher cash flow in the bulk liquid storage
segment due to the first quarter
 2012 acquisition of a petroleum
storage business in Denmark.  
Third quarter funds from operations from the NGL extraction, oil
sands transportation, conventional oil pipelines and bulk liquid
storage businesses were $50.4 million, $44.1 million, $38.9 million
and $17.6 million, respectively. Corporate costs, including interest
and income tax expenses, were $44.6 million in the quarter.   
Cash Distributions   
Distributions declared to unitholders increased to $71.3 million or
$0.2625 per unit in the third quarter of 2012, compared to $62.5
million or $0.24 per unit declared in the same period of 2011.  Inter
Pipeline increased its monthly cash distribution rate from $0.08 to
$0.0875 per unit in January 2012. In addition, the number of
outstanding limited partnership units has increased through the
monthly issuance of new equity under Inter Pipeline's cash
distribution reinvestment plans. Since inception, Inter Pipeline has
distributed in excess of $2 billion to unitholders.  
Inter Pipeline's third quarter payout ratio was a low 67.0% before
sustaining capital.  Including sustaining capital expenditures of
$11.2 million, Inter Pipeline's payout ratio was 75.0%.  
Oil Sands Transportation   
Throughput levels on Inter Pipeline's oil sands transportation
systems achieved record levels in the third quarter. The Cold Lake
and Corridor pipeline systems transported an average of 836,600 b/d
in Q3, up 12,600 b/d from the third quarter of 2011.  Cash flow in
the segment also set a new quarterly record, with funds from
operations of $44.1 million. The Cold Lake and Corridor systems
generate stable cash flow under long term cost of service based
Inter Pipeline's third oil sands system, the Polaris diluent
transportation system, entered into commercial service in the third
quarter. With completion of commissioning activities, the Polaris
system is now generating cash flow under a 25-year, cost-of-service
transportation agreement with Imperial Oil for its Kearl oil sands
project. New facilities, totalling $90 million, were constructed on
time and under budget.  Deliveries under the Kearl contract are
expected to generate an incremental $36 million in annual EBITDA over
the life of the contract.  
In the third quarter, Inter Pipeline announced a $2.1 billion
development plan for the Cold Lake and Polaris pipeline systems that
will expand and integrate transportation services across both
systems. Anchoring these developments is an arrangement to provide
bitumen blend and diluent transportation services to the Foster
Creek, Christina Lake and Narrows Lake projects jointly owned by
ConocoPhillips and Cenovus Energy. These development plans involve
the construction of approximately 840 kilometres of new pipeline and
seven new pump stations.  Inter Pipeline intends to provide 820,000
b/d of firm bitumen blend and diluent capacity to the three oil sands
projects.  Subject to the execution of a binding transportation
agreement, new facilities are expected to be in service for the
Foster Creek and Christina Lake projects by mid-2014, and for the
Narrows Lake project in 2017.    
A $90 million expansion of the Cold Lake system is currently
underway, with quarter-point pump stations being constructed on the
west mainline segment between La Corey, Alberta and Edmonton. This
expansion will increase system capacity from 535,000 b/d to
approximately 650,000 b/d by mid 2013 to meet near term production
NGL Extraction    
The NGL extraction business segment generated very strong results in
the third quarter, with funds from operations totaling $50.4 million.
Results were $12.2 million lower than in the prior period.  In the
third quarter of last year, Inter Pipeline recorded a one-time $20.5
million positive revenue adjustment related to the historical pricing
of NGL sales from a counterparty.  
Inter Pipeline's NGL extraction facilities at Cochrane and Empress,
Alberta processed a combined 2.5 billion cubic feet of natural gas
per day (bcf/d) in the quarter, similar to the comparable period of
2011.  Higher volumes at the Cochrane extraction plant were offset by
reduced natural gas throughputs at Inter Pipeline's Empress
facilities. Total liquid extraction volumes, including ethane and
propane-plus products, averaged 106,500 b/d, an increase of 4,500 b/d
over production levels in the third quarter of 2011.  
Margins on the sale of propane-plus products from the Cochrane
extraction facility remained strong in the quarter relative to
historical averages. Realized frac-spread prices averaged $0.92 US
per US gallon, slightly higher than the 5-year average of $0.86 US
per US gallon.  
Conventional Oil Pipelines    
The conventional oil pipeline segment again generated strong results
in the third quarter, contributing $38.9 million to funds from
operations. Strong throughput volumes, higher transportation tolls
and increased midstream marketing revenue resulted in a 9% increase
in funds from operations compared to third quarter 2011 levels.
Average revenue per barrel on the Bow River, Central Alberta and Mid
Saskatchewan systems increased to $2.92 in the third quarter of 2012
from $2.75 in the third quarter of 2011.  
Conventional oil transportation volumes averaged 174,5
00 b/d in the
third quarter of 2012, a gain of 5,200 b/d or 3% over third quarter
2011 levels. Inter Pipeline continues to benefit from oil drilling
activity in its service areas and the impact of new well completion
technologies on its conventional oil gathering systems.  
Bulk Liquid Storage   
Inter Pipeline's European bulk liquid storage business reported
significantly higher results in the third quarter.  Funds from
operations were $17.6 million, nearly double the $9 million generated
in the third quarter of 2011. Gains were primarily driven by the
inclusion of financial results from the Danish petroleum storage
business which was acquired in January 2012.  
Tank utilization rates for the quarter averaged 88.0%, compared to
97.8% in the comparable period last year. Utilization rates were
lower due to the addition of operating results from the Danish
petroleum storage business and reduced demand for storage capacity at
the Immingham terminal in the United Kingdom.  
During the quarter, two new condensate storage tanks and a heavy fuel
oil tank were commissioned at the Immingham terminal, adding 75,000
barrels of capacity under long term contract. Construction was
completed on schedule and under budget at a total capital cost of $13
Financing Activity   
Inter Pipeline's outstanding debt balance was approximately $3.1
billion at September 30, resulting in a total debt to capitalization
ratio of 66.1%. Excluding approximately $1.7 billion of non-recourse
debt held by Inter Pipeline (Corridor) Inc., Inter Pipeline's
recourse debt to capitalization ratio remained moderately leveraged
at 47.6%.  
In the third quarter, Inter Pipeline raised approximately $52 million
in equity capital under its distribution reinvestment programs.
Participation rates remain high among Inter Pipeline's Class A
unitholders. During the first nine months of 2012, Inter Pipeline
raised nearly $157 million under its distribution reinvestment
programs, compared to approximately $47 million in the comparable
period last year.   
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 third
quarter 2012 financial and operating results.   
To participate in the conference call, please dial 877-240-9772 or
416-340-8527. A pass code is not required. A recording of the call
will be available for replay until November 15, 2012, 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.      

                Selected Financial and Operating Highlights                 
(millions of dollars, except                                                
 where noted)                     Three Months Ended    Nine Months Ended   
                                    September 30,         September 30,     
                                      2012       2011       2012       2011 
Pipeline volumes (000 b/d)                                                  
  Oil sands transportation(1)        836.6      824.0      804.0      791.9 
  Conventional oil pipelines         174.5      169.3      175.1      168.0 
  Total pipeline volumes           1,011.1      993.3      979.1      959.9 
Extraction production(1)(000                                                
  Ethane                              71.0       69.8       72.5       74.6 
  Propane plus                        35.5       32.2       35.7       35.0 
  Total extraction production        106.5      102.0      108.2      109.6 
  Oil sands transportation           $77.5      $73.0     $216.2     $213.5 
  NGL extraction                    $123.4     $158.2     $366.4     $455.5 
  Conventional oil pipelines         $59.2      $45.7     $169.2     $131.5 
  Bulk liquid storage                $35.7      $25.2     $116.8      $77.9 
Total revenue                       $295.8     $302.1     $868.6     $878.4 
Net income (loss)                    $65.9      $76.6     $249.9     $202.1 
  Per unit (basic & diluted)         $0.24      $0.29      $0.93      $0.78 
Funds from operations(2)            $106.4     $111.9     $321.7     $304.1 
  Per unit(2)                        $0.39      $0.43      $1.20      $1.17 
Cash distributions                   $71.3      $62.5     $211.8     $186.6 
  Per unit                         $0.2625    $0.2400    $0.7875    $0.7200 
Payout ratio before sustaining                                              
 capital(2)                           67.0%      55.8%      65.8%      61.4%
Payout ratio after sustaining                                               
 capital(2)                           75.0%      58.5%      71.3%      63.9%
Capital expenditures                                                        
  Growth(2)                         $107.4      $29.8     $213.8      $98.4 
  Sustaining(2)                      $11.2       $5.0      $24.5      $12.2 
Total capital expenditures          $118.6      $34.8     $238.3     $110.6 
(1) Empress V NGL production and Cold Lake volumes reported on a 100% basis.
(2) Please refer to the "Non-GAAP Financial Measures" section of the MD&A.  

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, 2012 as compared to the three and nine month
periods ended September 30, 2011. These documents are available at and at 
Inter Pipeline Fund    
Inter Pipeline is a major petroleum transportation, bulk liquid
storage and natural gas liquids extraction business based in Calgary,
Alberta, Canada. Structured as a publicly traded limited partnership,
Inter Pipeline own
s and operates energy infrastructure assets in
western Canada, the United Kingdom, Denmark, Germany and Ireland.
Additional information about Inter Pipeline can be found at  
Inter Pipeline is a member of the S&P/TSX Composite Index.  Class A
Units trade on the Toronto Stock Exchange under the symbol IPL.UN.  
Eligible Investors   
Pursuant to Inter Pipeline's limited partnership agreement dated
October 9, 1997, as amended, all unitholders are required to be
residents of Canada.  A copy of the limited partnership agreement can
be found at by selecting "Corporate
Governance". If a unitholder is a non-resident of Canada
("Non-Eligible Unitholder"), he will not be considered to be a member
of the partnership effective the date the Class A Units were
acquired. Inter Pipeline requires all Non-Eligible Unitholders to
dispose of their Class A Units in accordance with the limited
partnership agreement.  
In most cases, a unitholder with an address outside of Canada will be
a Non-Eligible Unitholder.  
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 pipeline 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 the General Partner of
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.  
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 Fund - Investor Relations:
Jeremy Roberge
Vice President, Capital Markets
403-290-6015 or 1-866-716-7473 
Inter Pipeline Fund - Media Relations:
Tony Mate
Director, Corporate and Investor Communications
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