Inter Pipeline Fund Announces Increase to Monthly Distributions
CALGARY, ALBERTA--(Marketwire - Oct. 21, 2009) - Inter Pipeline Fund ("Inter Pipeline") (TSX:IPL.UN) announced today that it will increase its monthly cash distributions to unitholders from $0.07 to $0.075 per unit commencing with its payment in January 2010. On an annualized basis, cash distributions will increase from $0.84 to $0.90 per unit, or 7.1%.
Unitholders of record as of December 22, 2009 will be eligible for Inter Pipeline's new cash distribution rate, with initial payments expected on or about January 15, 2010.
The decision to increase monthly cash distributions was made following completion of Inter Pipeline's annual strategic planning process. This process involves a detailed review of financial and operating performance, growth projects under development and the long term strategic positioning of the business.
"The distribution increase announced today is a clear indication of our strong, confident outlook for the business," commented David Fesyk, President and Chief Executive Officer. "Inter Pipeline's industry fundamentals remain strong and major capital projects under development are advancing according to plan. In the near term, these projects will add significant new cash flow and further enhance the long term sustainability of distributions to unitholders."
Inter Pipeline has successfully advanced several major organic development projects in recent years. A $1.8 billion capacity expansion project on the Corridor pipeline system is now mechanically complete and will begin generating incremental cash flow no later than January 1, 2011. Pipeline capacity expansion work continues on the Cold Lake oil sands system under a multi-year, phased expansion program. In addition, Inter Pipeline recently announced a new diluent supply contract for Imperial Oil and ExxonMobil Canada's Kearl oil sands development and a new segregated oil delivery project on the Bow River pipeline system. Collectively, these expansion projects are expected to increase EBITDA by approximately $200 million per year when in service. This represents an increase of roughly 60% above Inter Pipeline's 2008 EBITDA of $343 million.
Since inception in 1997, Inter Pipeline has distributed $8.81 per unit, or more than $1.2 billion in cash payments to its unitholders. The currently announced distribution increase represents Inter Pipeline's 6th consecutive increase in cash distributions.
Consistent with previous guidance, Inter Pipeline continues to believe that it is well positioned to maintain cash distributions, including the announced monthly rate increase, despite becoming a taxable entity in 2011.
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, Germany and Ireland. Additional information about Inter Pipeline can be found at www.interpipelinefund.com
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.
Only persons who are residents of Canada, or if partnerships are Canadian partnerships, in each case for purposes of the Income Tax Act (Canada) are entitled to purchase and own Class A Units of Inter Pipeline.
Certain information contained herein may constitute forward-looking statements that involve risks and uncertainties. Forward-looking statements in this news release include, but are not limited to, statements regarding Inter Pipeline's belief that it is well positioned to maintain its increased level of cash distributions to unitholders through 2011 and beyond. Readers are cautioned not to place undue reliance on forward-looking statements. 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 risks and uncertainties include, but are not limited to, risks associated with operations, such as loss of markets, regulatory matters, environmental risks, industry competition, potential delays and cost overruns of construction projects, including the Corridor pipeline system expansion project, 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 www.sedar.com. 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 noted.
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.
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