Inter Pipeline Fund Announces Class A Unit Offering Increased to $150 million and Change in Accounting Methodology
CALGARY, ALBERTA, January 13, 2006: Inter Pipeline Fund (Inter Pipeline) (TSX: IPL.UN) announced today the underwriters of its offering of Class A limited partnership units (Class A Units) have exercised their option to purchase an additional 2,500,000 Class A Units on the same terms and conditions as previously announced bringing the total Class A Units to be issued by Inter Pipeline to $150 million. The offering is expected to close on January 31, 2006.
Inter Pipeline has determined after consultation with its auditors that, effective for the fourth quarter of 2005, it is appropriate to change its method of accounting for unit-based compensation expense. This change will be accounted for retroactively with a positive restatement of prior years' net income. The restatement will increase net income in each of the years ended December 31, 2003 and 2004 and the first nine months of 2005. The amounts of these increases are currently estimated to be approximately $1.9 million, $8.8 million and $11.2 million, respectively. The resultant net income for these same periods will become $15.5 million, $80.8 million and $68.1 million, respectively. There will be no material impact on funds from operations in these respective periods.
Inter Pipeline previously valued the unit incentive options (Options) issued under its unit option incentive plan using the intrinsic value method, whereby the resulting net change in the number of vested Class A Units outstanding combined with the net change in the value of the Class A Units, from reporting period to reporting period, is recorded in the income statement in each reporting period. Inter Pipeline has decided to adopt the fair value method for valuing its Options. Under the fair value method, the value of each of the Options is determined on the date of grant using a binomial option pricing model, and that value is amortized as an expense over the vesting period of the Options.
| 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.
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
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| 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 and debentures of Inter Pipeline. |
Disclaimer
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Certain information contained herein may constitute forward-looking statements that involve risks and uncertainties. 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 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. 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. |
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