Inter Pipeline Fund Announces Very Strong First Quarter 2013 Financial and Operating Results

Inter Pipeline Fund Announces Very Strong First Quarter 2013 Financial and 
Operating Results 
CALGARY, ALBERTA -- (Marketwired) -- 05/09/13 -- Inter Pipeline Fund
("Inter Pipeline") (TSX:IPL.UN) announced today its financial and
operating results for the three month period ended March 31, 2013.  

--  Funds from operations(i) totaled $109 million, in line with first
    quarter 2012 levels 
--  Low quarterly payout ratio(i) of 72% 
--  Declared cash distributions of $77 million or $0.2775 per unit 
--  Net income for the quarter totaled $72 million 
--  Throughput volumes on oil sands and conventional oil pipeline systems
    averaged a quarterly record 1,075,300 barrels per day (b/d), 117,100 b/d
    higher than first quarter 2012 
--  Inter Pipeline's oil sands transportation segment achieved record
    throughputs of 890,000 b/d, an increase of 111,100 b/d compared to
    volumes shipped in the first quarter of 2012 
--  Throughput volumes averaged 185,300 b/d on Inter Pipeline's conventional
    oil pipeline systems, an increase of 6,000 b/d over first quarter 2012
--  Executed long-term, cost-of-service transportation agreements for a $2.6
    billion integrated development program for the Cold Lake and Polaris
    pipeline systems 
--  Polaris pipeline system delivered initial diluent volumes to Imperial's
    Kearl production site 

Subsequent Events 

--  Entered into a new long-term ethane sales agreement with NOVA Chemicals 
--  Increased capacity on Inter Pipeline's revolving credit facility from
    $750 million to $1.25 billion 

(i) Please refer to the "Non-GAAP and additional GAAP Financial
Measures" section of the MD&A.  
Funds From Operations   
Inter Pipeline generated strong financial results in the first
quarter of 2013.  Funds from operations totaled $109.4 million or
$0.40 per unit, comparable to the $110.8 million generated in the
first quarter of 2012.  The impact of weaker product pricing within
the NGL extraction business segment was largely offset by strong
results in Inter Pipeline's Canadian pipeline operations.   During
the quarter, Inter Pipeline set a new record with respect to
throughput volumes on its oil sands and conventional oil pipeline
Each business segment contributed significantly to funds from
operations, with the oil sands transportation segment setting a
quarterly record of $50.8 million. The NGL extraction, conventional
oil pipelines and bulk liquid storage businesses contributed $43.0
million, $40.4 million and $20.4 million to funds from operations,
respectively. Corporate costs, including interest, income tax and
general and administrative charges were $45.2 million for the
In 2013, Inter Pipeline adopted a new International Financial
Reporting Standard for consolidated financial statements. This
impacts how non-wholly owned subsidiaries are consolidated and
reported. Financial results, including funds from operations and net
income, are now reported on a 100 percent basis, with the
non-controlling interest portion reported separately on the financial
Cash Distributions   
Distributions declared to unitholders increased to $76.8 million or
$0.2775 per unit in the first quarter, compared to $69.9 million or
$0.2625 per unit in the first quarter of 2012.  Distributions were
higher due to an increase in the number of units outstanding and
Inter Pipeline's $0.06 per unit increase in annual distributions
effective with payments in January 2013.  Inter Pipeline's payout
ratio for the quarter was conservative at 72.2%.  
Oil Sands Transportation   
In the first quarter of 2013, throughput volumes in the oil sands
transportation segment reached a quarterly record of 890,000 b/d, up
111,100 b/d from first quarter 2012 levels. Cold Lake system volumes
averaged 533,200 b/d and throughputs on the Corridor system averaged
355,600 b/d. The Cold Lake and Corridor pipeline systems both
transported record throughput volumes on strong results from all
major connected production sites.  
Also during the quarter, Inter Pipeline commenced diluent deliveries
on its Polaris pipeline system to the Kearl oil sands project owned
by Imperial Oil.  
Inter Pipeline's oil sands transportation systems generate stable
cash flow under long-term contracts with Imperial Oil, Cenovus,
Canadian Natural Resources, Shell, Chevron and Marathon.  
In March, Inter Pipeline finalized agreements for a $2.6 billion
development plan that will expand and integrate transportation
services across the Cold Lake and Polaris pipeline systems. The
agreements provide committed capacity for 850,000 b/d of bitumen
blend and diluent transportation for the Foster Creek, Christina Lake
and Narrows Lake projects jointly owned by ConocoPhillips and Cenovus
Energy. These development plans involve the construction of about 840
kilometres of new pipeline and seven new pump stations.  In the first
quarter, development work and construction activities were advanced
according to schedule. New facilities are expected to be in service
for the Foster Creek and Christina Lake projects in phases beginning
in mid-2014, and for the Narrows Lake project in 2017.  
During the quarter, construction activities continued with respect to
a capacity expansion project on the west leg of the Cold Lake
pipeline system.  This project involves the installation of quarter
point pump stations at a capital cost of approximately $90 million. 
Upon completion, capacity on the Cold Lake system is expected to
increase from 535,000 b/d to approximately 650,000 b/d. The project
is expected to be operational in the second half of 2013 to
accommodate forecast production increases.  
In the first quarter of 2013, Inter Pipeline incurred approximately
$382 million in growth capital within its oil sands transportation
business segment.  
NGL Extraction    
Inter Pipeline's NGL extraction business generated funds from
operations of $43.0 million in the first quarter of 2013 compared to
$57.0 million in the same quarter of 2012.  Results were lower
primarily due to weaker frac-spread prices realized on propane-plus
volumes sold at the Cochrane extraction plant.  Realized frac-spread
prices averaged $0.88 US per US gallon in the first quarter, compared
to $1.15 in the first quarter of 2012. First quarter 2013 frac-spread
prices are in line with the 5-year average of $0.91 US per US gallon. 
Natural gas volumes processed at Inter Pipeline's NGL extraction
facilities at Cochrane and Empress, Alberta remained strong in the
first quarter, averaging roughly 2.8 billion cubic feet of natural
gas per day.  Flow rates were similar to levels processed in the
first quarter of 2012.  Total liquid extraction volumes, including
ethane and propane-plus products, averaged 115,000 b/d, up 3% from
levels produced in the first quarter of 2012.  
Conventional Oil Pipelines    
The conventional oil pipeline segment continued to generate strong
financial and operating results in the quarter. Funds from operations
totaled $40.4 million, similar to that generated in the first quarter
of 2012.  Revenue per barrel on Inter Pipeline's Bow River, Central
Alberta and Mid-Saskatchewan pipeline systems averaged $2.96 in the
first quarter of 2013 compared to $2.86 per barrel in the comparable
period of last year.  
Inter Pipeline's conventional oil pipeline systems again recorded
volume increases on a quarter over quarter basis.  In aggregate,
throughput volumes averaged 185,300 b/d in the first quarter,
representing a 6,000 b/d increase over first quarter 2012 levels.
Inter Pipeline continues to benefit from strong drilling activity in
certain service areas as producers aggressively deploy new drilling
and well completion technologies.  Inter Pipeline currently has a
number of capital projects underway on the Mid-Saskatchewan system to
upgrade facilities to accommodate increased production volumes. 
Bulk Liquid Storage   
Inter Pipeline's European bulk liquid storage business generated
funds from operations of $20.4 million, $1.1 million higher than in
the first quarter of 2012. This increase was primarily due to
inclusion of a full quarter of results from a Danish petroleum
storage business which Inter Pipeline acquired in mid January of
Tank utilization rates for the quarter averaged 87.4% compared to
88.9% in the first quarter of 2012. Utilization rates have remained
relatively strong despite an uncertain economic climate in Europe and
the lack of contango in forward oil commodity markets.  
In the first quarter, Inter Pipeline added additional capacity at the
Ensted terminal in Denmark through the acquisition of 400,000 barrels
of tank capacity for approximately $9.5 million.    
Financing Activity   
Inter Pipeline continues to maintain a strong balance sheet and is
well positioned to finance its future capital commitments.  At March
31, Inter Pipeline's total outstanding debt balance was approximately
$3.2 billion, resulting in a total debt to capitalization ratio of
66%. Excluding approximately $1.6 billion of non-recourse debt held
by Inter Pipeline (Corridor) Inc., Inter Pipeline's recourse debt to
capitalization ratio was 49%.  
In the first quarter, Inter Pipeline issued approximately $54 million
in new equity capital under its distribution reinvestment programs.  
Subsequent to quarter end, Inter Pipeline reached an agreement with
its lending syndicate to increase the capacity of its revolving
credit facility from $750 million to $1.25 billion.  Inter Pipeline
also has the ability to increase the commitment to $1.5 billion
subject to lender approval.     
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 first
quarter 2013 financial and operating results.   
To participate in the conference call, please dial 877-240-9772 or
416-340-9432. A pass code is not required. A recording of the call
will be available for replay until May 16, 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 per unit and                                   
 percent amounts where noted)                            Three Months Ended 
                                                                  March 31, 
Throughput and Production                               2013           2012 
Pipeline volumes (000 b/d)                                                  
 Oil sands transportation(1)                           890.0          778.9 
 Conventional oil pipelines                            185.3          179.3 
 Total pipeline volumes                              1,075.3          958.2 
Extraction production(1)(000 b/d)                                           
 Ethane                                                 78.4           78.6 
 Propane plus                                           36.6           33.0 
 Total extraction production                           115.0          111.6 
Financial Results(3)                                                        
Revenue                                               $327.7         $301.7 
Funds from operations(2)                                                    
 Oil sands transportation                      $        50.8  $        44.1 
 NGL extraction                                $        43.0  $        57.0 
 Conventional oil pipelines                    $        40.4  $        40.5 
 Bulk liquid storage                           $        20.4  $        19.3 
 Corporate costs                               $       (45.2) $       (50.1)
 Total funds from operations(2)                $       109.4  $       110.8 
 Per unit(2)                                   $        0.40  $        0.42 
Net Income                                     $        72.2  $        82.1 
Supplemental Financial Information                                          
Net income attributable to unitholders         $        69.7  $        79.6 
 Per unit (basic & diluted)                    $        0.25  $        0.30 
Cash distributions declared                    $        76.8  $        69.9 
 Per unit                                      $      0.2775  $      0.2625 
Payout ratio(2)                                         72.2%          64.7%
Capital expenditures(2,3 )                                                  
 Growth                                        $       407.6  $        40.2 
 Sustaining                                    $         5.9  $         6.4 
Total capital expenditures                     $       413.5  $        46.6 

(1) Empress V NGL production and Cold Lake volumes reported on a 100%
basis; Polaris volumes represent initial shipments that were prorated
over the 3 month period.  
(2) Please refer to the "Non-GAAP Financial Measures" section of the
(3) Amounts reported on a 100% basis that includes non-controlling
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 month period ended March
31, 2013 as compared to the three month period ended March 31, 2012.
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 owns 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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