cibc analyst neutral, target C$12, heartland now $4 billionQ1/2020 First Look: Better Than Expected; HPC Costs Raised To $4B Key Points The company reported better-than-expected results with adjusted EBITDA of $255.2MM, compared to our estimate of $237.8MM and consensus of $250.9MM. FFO per share of $0.49 was higher than our estimate of $0.44 and in line with consensus. Our concern is with the Conventional segment, with materially weaker volumes than we expected, and indications that Q2 is off to a sequentially slower start, reflective of current the reality of the oil markets. The company announced that the Viking Connector pipeline was placed into service April 1, 2020 (on time and on budget) which is expected to add between 10,000 to 15,000 Bbl/d of throughput volumes. The company updated construction costs for the Heartland Petrochemical Complex (HPC) project, with revised costs of $4.0B compared to the prior estimate of $3.5B, representing an increase of 14%, about twice the increase we were expecting. To date, Inter Pipeline has invested $2.5B in the project. Due to the COVID-19 pandemic, the company stated that the construction timeline may be revised to early 2022 from late 2021 but is evaluating mitigation plans. EBITDA is still expected to be in the range of $450MM - $500MM, depending on the level of contracting. While the company cannot say for certain that a partner for the HPC will be found, the company continues the process; no additional updates were provided. The balance of operations were fine, and the NGL extraction segment performed better than expected with FFO of $43.2MM, due to higher realized pricing. The Bulk Liquids business continues to be highly utilized (95%) which contributed to FFO of $34.8MM. Cost cuts and salary reduction measures helped reduce corporate segment expenses more than expected at ($61.6MM) vs. our estimate of ($78.5MM). Although the company has secured additional liquidity over the past months with a new unsecured revolving credit facility for $1B and by extending the maturity date of its $500MM medium-term loan, we expect investors to remain cautious until the risks to the HPC project are resolved.