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Inergy Midstream Reports First Quarter Results



  Inergy Midstream Reports First Quarter Results

            Management to Host Conference Call Today at 10 a.m. CT

Business Wire

KANSAS CITY, Mo. -- February 5, 2013

Inergy Midstream, L.P. (NYSE:NRGM) (“Inergy Midstream”) today reported results
of operations for the quarter ended December 31, 2012, the first quarter of
fiscal 2013.

Inergy Midstream reported Adjusted EBITDA of $33.0 million for the quarter
ended December 31, 2012, an increase of $2.5 million, or approximately 8%,
from $30.5 million for the quarter ended December 31, 2011. Net income was
$6.5 million for the quarter ended December 31, 2012, and $17.6 million in the
same quarter of last year.

Distributable cash flow was $29.5 million for the quarter ended December 31,
2012, compared to $25.9 million in the same quarter of last year, an increase
of $3.6 million, or approximately 14%.

“Inergy Midstream achieved a number of important objectives in the December
quarter, including the completion of the MARC I pipeline and the acquisition
of the COLT Hub,” said John Sherman, Chairman and CEO of Inergy Midstream.
“The MARC I pipeline expands our natural gas footprint and transport
capability in the Northeast, while the COLT acquisition gives us a strong
presence in the Bakken and is expected to lead to future opportunities for
growth. With a strong balance sheet and our strategic portfolio of assets, we
are well-positioned to create long-term value for investors.”

Recent Events

As previously announced, the Board of Directors of Inergy Midstream’s general
partner declared a cash distribution of $0.39 per limited partner unit ($1.56
annually) for the quarter ended December 31, 2012. The distribution will be
paid on February 14, 2013.

On December 7, 2012, Inergy Midstream completed the acquisition of Rangeland
Energy, LLC, the owner and operator of the COLT crude oil rail loading
terminal, storage, and pipeline facilities located in Williams County, North
Dakota for $425 million. Concurrently with the closing of the acquisition,
Inergy Midstream completed a private placement of approximately 10.7 million
common units and $500 million of 6.0% senior unsecured notes due 2020.

Quarterly Results

In the quarter ended December 31, 2012, revenues increased to $50.4 million
compared to $46.8 million during the same quarter in the prior year.

In the quarter ended December 31, 2012, service-related costs decreased to
$10.9 million compared to $11.1 million during the same quarter in the prior
year.

In the quarter ended December 31, 2012, operating and administrative expenses
were $11.7 million compared to $6.1 million in the same period of fiscal 2012.

Inergy Midstream, L.P. and Inergy, L.P. (NYSE:NRGY) will conduct a live
conference call and internet webcast today, February 5, 2013, to discuss
results of operations for the quarter ended December 31, 2012 and their
business outlook. The call will begin at 10:00 a.m. Central Time. The call-in
number for the earnings call is 1-877-405-3427, and the conference name is
Inergy. The live internet webcast and the replay can be accessed on Inergy’s
website, www.inergylp.com. A digital recording of the call will be available
for one week following the call by dialing 1-855-859-2056 and entering the
pass code 92710595.

About Inergy Midstream, L.P.

Inergy Midstream, L.P., headquartered in Kansas City, Missouri, is a publicly
traded master limited partnership engaged in the development and operation of
natural gas, NGL and crude oil storage, transportation, and logistics
businesses in the Northeast region of the United States and in North Dakota.

About Inergy, L.P.

Inergy, L.P., headquartered in Kansas City, Missouri, is a publicly traded
master limited partnership. Inergy's operations include a natural gas storage
business in Texas and an NGL supply logistics, transportation, and marketing
business that serves customers in the United States and Canada. Through its
general partner interest and majority equity ownership interest in Inergy
Midstream, L.P., Inergy is also engaged in the development and operation of
natural gas, NGL and crude oil storage, transportation, and logistics
businesses in the Northeast region of the United States and in North Dakota.

Corporate news, unit prices, and additional information about Inergy
Midstream, including reports from the United States Securities and Exchange
Commission, are available on the company’s website, www.inergylp.com. For more
information, contact Vince Grisell in Inergy Midstream’s Investor Relations
Department at 816-842-8181 or via e-mail at
investorrelations@inergyservices.com.

We define EBITDA as income before income taxes plus net interest expense and
depreciation and amortization expense. We define Adjusted EBITDA as EBITDA
excluding the gain or loss on the disposal of assets, long-term incentive and
equity compensation expense, and transaction costs. Transaction costs are
third-party professional fees and other costs that are incurred in conjunction
with closing a transaction.

Adjusted EBITDA is a non-GAAP supplemental financial measure that management
and external users of our financial statements, such as industry analysts,
investors, lenders, and rating agencies, may use to assess:

  * our operating performance as compared to other publicly traded
    partnerships in the midstream energy industry, without regard to
    historical cost basis or financing methods;
  * the ability of our assets to generate sufficient cash flow to make
    distributions to our common unitholders;
  * our ability to incur and service debt and fund capital expenditures; and
  * the viability of acquisitions and other capital expenditure projects and
    the returns on investment in various opportunities.

EBITDA and Adjusted EBITDA should not be considered an alternative to net
income, income before income taxes, cash flows from operating activities, or
any other measure of financial performance calculated in accordance with GAAP,
as those items are used to measure operating performance, liquidity, and our
ability to service debt obligations. We believe that EBITDA provides
additional information for evaluating our ability to make distributions to our
common unitholders and is presented solely as a supplemental measure. We
believe that Adjusted EBITDA provides additional information for evaluating
our financial performance without regard to our financing methods, capital
structure, and historical cost basis. One should not consider Adjusted EBITDA
in isolation or as a substitute for analysis of our results as reported under
GAAP. EBITDA and Adjusted EBITDA, as we define them, may not be comparable to
EBITDA and Adjusted EBITDA or similarly titled measures used by other
corporations or partnerships in our industry, thereby diminishing such
measures’ utility.

This press release contains forward-looking statements, which are statements
that are not historical in nature. Forward-looking statements are subject to
certain risks, uncertainties, and assumptions. Should one or more of these
risks or uncertainties materialize or any underlying assumption proves
incorrect, actual results may vary materially from those anticipated,
estimated, or projected. Among the key factors that could cause actual results
to differ materially from those referred to in the forward-looking statements
are: changes in general and local economic conditions; competitive conditions
within our industry; our ability to complete internal growth projects on time
and on budget; the price and availability of debt and equity financing; the
effects of existing and future governmental legislation and regulations; and
natural disasters, weather-related delays, casualty losses, and other matters
beyond our control. These and other risks and assumptions are described in
Inergy Midstream’s annual report on Form 10-K and other reports that are
available from the United States Securities and Exchange Commission. Readers
are cautioned not to place undue reliance on forward-looking statements, which
reflect management’s view only as of the date made. We undertake no obligation
to update any forward-looking statement, except as otherwise required by law.

Inergy Midstream, L.P.
Consolidated Statements of Operations
For the Three Months Ended December 31, 2012 and 2011
(in millions, except unit and per unit data)
                                                                   
                                                       Three Months Ended
                                                       December 31,
                                                       2012         2011 ^(a)
                                                       (Unaudited)
Revenue:
Firm storage                                           $ 20.2       $ 20.9
Transportation                                           8.2          6.5
Hub services                                             3.2          4.3
Related party firm storage                               3.4          2.0
Salt                                                     12.6         13.1
Crude                                                    2.8          -       
                                                         50.4         46.8
                                                                     
Costs and expenses:
Storage related                                          2.2          1.9
Transportation related                                   1.0          1.7
Salt related                                             7.4          7.5
Crude related                                            0.3          -
Operating and administrative                             11.7         6.1
Depreciation and amortization                            15.2         12.0
Loss on disposal of assets                               0.6          -       
                                                         38.4         29.2    
                                                                     
Operating income                                         12.0         17.6
Interest expense, net                                    5.5          -       
Net income                                             $ 6.5        $ 17.6    
                                                                     
Less: net income prior to initial public                 -            14.2
offering of Inergy Midstream, L.P.
Less: net income earned by US Salt, LLC prior to         -            3.2     
acquisition
Net income available to partners                       $ 6.5        $ 0.2     
                                                                     
Partners’ interest information:
Non-managing general partner interest in net           $ 1.7        $ -       
income
Total limited partners’ interest in net income         $ 4.8        $ 0.2     
                                                                     
Net income per limited partner unit:
Basic                                                  $ 0.06       $ 0.00    
Diluted                                                $ 0.06       $ 0.00    
                                                                     
Weighted-average limited partners units
outstanding (in thousands):
Basic                                                    78,063       74,331  
Diluted                                                  78,063       74,331  
                                                                     

                                                     Three Months Ended
                                                     December 31,
                                                     2012           2011 ^(a)
                                                     (Unaudited)
Supplemental Information:                                          
                                                                     
Cash and cash equivalents                            $ -            $ 0.1
                                                                     
Outstanding debt:
Credit facility ^(f)                                 $ 179.8        $ 80.2
Senior unsecured notes ^(h)                            500.0          -       
Total debt                                           $ 679.8        $ 80.2    
                                                                     
Total partners’ capital                              $ 759.0        $ 748.4   
                                                                     
Limited partner units outstanding (in
thousands):
Common units                                           85,875         74,331  
                                                                     
EBITDA:
Net income                                           $ 6.5          $ 17.6
Depreciation and amortization                          15.2           12.0
Interest expense, net                                  5.5            -       
EBITDA ^(b)                                          $ 27.2         $ 29.6    
Long-term incentive and equity compensation            2.6            0.9
expense
Loss on disposal of assets                             0.6            -
Transaction costs                                      2.6            -       
Adjusted EBITDA ^(b)                                 $ 33.0         $ 30.5    
                                                                     
Distributable cash flow:
Adjusted EBITDA ^(b)                                 $ 33.0         $ 30.5
Cash interest expense ^(c)                             (2.9   )       -
Maintenance capital expenditures ^(d)                  (0.6   )       (0.4   )
Less: Pre-acquisition distributable cash flow          -              (4.2   )
of US Salt, LLC ^(g)
Distributable cash flow ^(e)                         $ 29.5         $ 25.9    
                                                                     
EBITDA:
Net cash provided by operating activities            $ 22.2         $ 31.9
Net changes in working capital balances                5.3            (1.4   )
Amortization of deferred financing costs               (2.6   )       -
Interest expense, net                                  5.5            -
Long-term incentive and equity compensation            (2.6   )       (0.9   )
expense
Loss on disposal of assets                             (0.6   )       -       
EBITDA                                               $ 27.2         $ 29.6    
Long-term incentive and equity compensation            2.6            0.9
expense
Loss on disposal of assets                             0.6            -
Transaction costs                                      2.6            -       
Adjusted EBITDA                                      $ 33.0         $ 30.5    
                                                                     

        On May 14, 2012, Inergy Midstream acquired 100% of the membership
        interests in US Salt from Inergy (“US Salt Acquisition”). The US Salt
        Acquisition is reflected in Inergy Midstream’s consolidated financial
(a)     statements based on the historical values, and periods prior to the
        acquisition have been retrospectively adjusted to include the
        historical balances of US Salt. This accounting treatment is similar
        to the pooling of interests and is required as the transaction is
        amongst entities under common control.
         
        EBITDA is defined as income (loss) before income taxes plus net
        interest expense and depreciation and amortization expense. As
        indicated in the table, Adjusted EBITDA represents EBITDA excluding
        the gain or loss on the disposal of assets, long-term incentive and
        equity compensation expenses, and transaction costs. Transaction costs
        are third-party professional fees and other costs that are incurred in
        conjunction with closing a transaction. EBITDA and Adjusted EBITDA
        should not be considered an alternative to net income, income before
        income taxes, cash flows from operating activities, or any other
        measure of financial performance calculated in accordance with
(b)     generally accepted accounting principles as those items are used to
        measure operating performance, liquidity, and our ability to service
        debt obligations. We believe that EBITDA provides additional
        information for evaluating our ability to make distributions to our
        common unitholders and is presented solely as a supplemental measure.
        We believe that Adjusted EBITDA provides additional information for
        evaluating our financial performance without regard to our financing
        methods, capital structure, and historical cost basis. EBITDA and
        Adjusted EBITDA, as we define them, may not be comparable to EBITDA
        and Adjusted EBITDA or similarly titled measures used by other
        corporations or partnerships.
         
(c)     Cash interest expense is book interest expense less amortization of
        deferred financing costs.
         
        Maintenance capital expenditures are defined as those capital
(d)     expenditures which do not increase operating capacity or revenues from
        existing levels.
         
        Distributable cash flow is defined as Adjusted EBITDA, less cash
        interest expense, maintenance capital expenditures, and income taxes.
        Distributable cash flow should not be considered an alternative to
        cash flows from operating activities or any other measure of financial
        performance calculated in accordance with generally accepted
(e)     accounting principles as those items are used to measure operating
        performance, liquidity, or the ability to service debt obligations. We
        believe that distributable cash flow provides additional information
        for evaluating our ability to declare and pay distributions to
        unitholders. Distributable cash flow, as we define it, may not be
        comparable to distributable cash flow or similarly titled measures
        used by other corporations and partnerships.
         
        On December 21, 2011, Inergy Midstream entered into a new $500 million
        revolving credit facility (“Credit Facility”) with a December 2016
        maturity date. The Credit Facility is available to fund acquisitions,
        working capital, and internal growth projects and for general
(f)     partnership purposes. On April 16, 2012, Inergy Midstream exercised a
        portion of its accordion feature under the Credit Facility and
        increased the loan commitments thereunder by $100 million. The
        aggregate amount of revolving loan commitments under the Credit
        Facility now equals $600 million.
         
        The amount represents US Salt’s distributable cash flow prior to the
(g)     acquisition of US Salt by Inergy Midstream from Inergy on May 14,
        2012, which has been retrospectively included in the historic results
        of operations of Inergy Midstream as discussed above.
         
        On December 7, 2012, the Company and NRGM Finance Corp. (“Finance
        Corp.” and together with Inergy Midstream, the “Issuers”) issued and
        sold $500 million in a private offering in aggregate principal amount
        of their 6.0% Senior Notes due 2020 pursuant to a purchase agreement
(h)     dated November 29, 2012. The Issuers issued the notes pursuant to an
        Indenture dated December 7, 2012, among the Issuers, the subsidiary
        guarantors, and U.S. Bank National Association as Trustee. The Company
        filed a copy of the Indenture as Exhibit 4.1 to the Current Report on
        Form 8-K filed by Inergy Midstream on December 13, 2012.

Contact:

Inergy Midstream, L.P.
Vince Grisell, 816-842-8181
investorrelations@inergyservices.com
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