CALGARY, ALBERTA -- (Marketwire) -- 02/21/13 -- Inter Pipeline Fund ("Inter Pipeline") (TSX: IPL.UN) announced today its financial and operating results for the three and twelve month periods ended December 31, 2012.
-- Funds from operations(i) increased to a record $423 million, up $28 million or 7% over 2011 levels-- Low annual payout ratio before sustaining capital(i) of 68%-- Generated record net income of $307 million-- Total distributions to unitholders surpassed $2 billion since inception, including $285 million declared in 2012-- Throughput volumes on oil sands and conventional oil pipeline systems averaged a record 988,100 barrels per day (b/d), 31,900 b/d higher than 2011-- Oil sands transportation segment achieved record throughput of 812,600 b/d-- Annual throughput volumes averaged 175,500 b/d on Inter Pipeline's conventional oil pipeline systems, an increase of 5,500 b/d over 2011-- Announced $2.2 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-- Issued $400 million in senior medium term notes at attractive interest rates-- Completed $459 million acquisition of four petroleum storage terminals in Denmark, more than doubling European storage capacity to 19 million barrels
Fourth Quarter Highlights
-- Fourth quarter funds from operations(i) increased to $101 million, a gain of $11 million or 12% over fourth quarter 2011 levels-- Low quarterly payout ratio before sustaining capital(i) of 73%-- Announced 5.7% distribution increase to annual rate of $1.11 per unit, Inter Pipeline's ninth consecutive distribution increase-- Combined oil sands and conventional volume levels set a new quarterly record of 1,014,900 b/d-- Announced 5-year agreement to transport diluent for Suncor Energy-- Distributions to unitholders were $73 million or $0.2675 per unit
(i)Please refer to the "Non-GAAP and additional GAAP Financial Measures" section of the MD&A
Funds From Operations
Inter Pipeline generated record financial results in 2012. Funds from operations totaled $422.6 million or $1.57 per unit, an increase of $28.4 million or 7% over 2011 levels. This marks the 11th consecutive year of increased funds from operations, with three of Inter Pipeline's four business segments achieving record levels. The oil sands transportation segment realized gains as the Polaris pipeline system entered commercial service; the conventional oil pipeline segment showed very strong cash flow on volume strength; and the bulk liquid storage segment's results were boosted by the Danish petroleum storage business which was acquired in early 2012.
By business segment, the NGL extraction, oil sands transportation, conventional oil pipelines and bulk liquid storage businesses contributed $194.6 million, $172.8 million, $153.4 million and $80.2 million to funds from operations, respectively. Corporate costs, including interest, income tax and general and administrative charges were $178.4 million for the year.