Exhibit 99.2
ENBRIDGE ENERGY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF INCOME
| | Three months ended
September 30, | | Nine months ended
September 30, | |
| | 2006 | | 2005 | | 2006 | | 2005 | |
| | (unaudited; in millions, except per unit amounts) | |
| | | | | | | | | |
Operating revenue | | $ | 1,532.3 | | $ | 1,809.6 | | $ | 4,845.6 | | $ | 4,392.4 | |
Operating expenses | | | | | | | | | |
Cost of natural gas | | 1,265.9 | | 1,659.8 | | 4,099.2 | | 3,882.4 | |
Operating and administrative | | 95.1 | | 82.4 | | 256.3 | | 237.2 | |
Power | | 27.8 | | 19.0 | | 78.3 | | 53.2 | |
Depreciation and amortization | | 34.8 | | 36.5 | | 101.5 | | 103.9 | |
| | 1,423.6 | | 1,797.7 | | 4,535.3 | | 4,276.7 | |
Operating income | | 108.7 | | 11.9 | | 310.3 | | 115.7 | |
Interest expense | | (28.5 | ) | (28.4 | ) | (84.0 | ) | (79.6 | ) |
Other income | | 2.0 | | 2.1 | | 7.4 | | 3.4 | |
Net income (loss) | | $ | 82.2 | | $ | (14.4 | ) | $ | 233.7 | | $ | 39.5 | |
Net income (loss) allocable to limited partner units | | $ | 73.5 | | $ | (19.5 | ) | $ | 210.6 | | $ | 22.6 | |
Net income (loss) per limited partner unit (basic and diluted) | | $ | 1.03 | | $ | (0.32 | ) | $ | 3.11 | | $ | 0.37 | |
Weighted average units outstanding | | 71.7 | | 62.1 | | 67.8 | | 61.5 | |
ENBRIDGE ENERGY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | Nine months ended
September 30, | |
| | 2006 | | 2005 | |
| | (unaudited; in millions) | |
| | | | | |
Cash provided by operating activities | | | | | |
Net income | | $ | 233.7 | | $ | 39.5 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | |
Depreciation and amortization | | 101.5 | | 103.9 | |
Derivative fair value (gains) losses | | (53.1 | ) | 69.4 | |
Inventory market price adjustments | | 16.7 | | — | |
Other | | 5.1 | | (0.1 | ) |
Changes in operating assets and liabilities, net of cash acquired: | | | | | |
Receivables, trade and other | | (5.3 | ) | (13.1 | ) |
Due from General Partner and affiliates | | 9.2 | | (6.2 | ) |
Accrued receivables | | 236.8 | | (338.8 | ) |
Inventory | | (56.7 | ) | (66.2 | ) |
Current and long-term other assets | | (3.3 | ) | (3.3 | ) |
Due to General Partner and affiliates | | 2.0 | | 13.5 | |
Accounts payable and other | | (18.5 | ) | (2.0 | ) |
Accrued purchases | | (258.5 | ) | 385.5 | |
Interest payable | | 19.0 | | 24.5 | |
Property and other taxes payable | | 1.3 | | 1.6 | |
Net cash provided by operating activities | | 229.9 | | 208.2 | |
| | | | | |
Cash used in investing activities | | | | | |
| | | | | |
Additions to property, plant and equipment | | (514.3 | ) | (261.9 | ) |
Changes in construction payables | | 17.4 | | 3.3 | |
Asset acquisitions, net of cash acquired | | (33.3 | ) | (186.4 | ) |
Other | | 0.4 | | 2.7 | |
Net cash used in investing activities | | (529.8 | ) | (442.3 | ) |
| | | | | |
Cash provided by financing activities | | | | | |
| | | | | |
Proceeds from unit issuances, net | | 509.6 | | 127.5 | |
Distributions to partners | | (169.8 | ) | (157.3 | ) |
Repayments of Credit Facility, net | | — | | (175.0 | ) |
Net issuances of commercial paper | | 143.9 | | 455.0 | |
Repayment on affiliate loan | | (20.0 | ) | — | |
Other | | — | | (1.0 | ) |
Net cash provided by financing activities | | 463.7 | | 249.2 | |
Net increase in cash and cash equivalents | | 163.8 | | 15.1 | |
Cash and cash equivalents at beginning of year | | 89.8 | | 78.3 | |
Cash and cash equivalents at end of period | | $ | 253.6 | | $ | 93.4 | |
ENBRIDGE ENERGY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
| | September 30,
2006 | | December 31,
2005 | |
| | (unaudited; $ in millions) | |
ASSETS | | | | | |
Current assets | | | | | |
Cash and cash equivalents | | $ | 253.6 | | $ | 89.8 | |
Receivables, trade and other, net of allowance for doubtful accounts of $4.0 in 2006 and $4.5 in 2005 | | 114.9 | | 109.7 | |
Due from General Partner and affiliates | | 10.9 | | 20.1 | |
Accrued receivables | | 378.5 | | 615.3 | |
Inventory | | 175.9 | | 138.9 | |
Other current assets | | 12.7 | | 11.5 | |
| | 946.5 | | 985.3 | |
Property, plant and equipment, net | | 3,509.6 | | 3,080.0 | |
Other assets, net | | 24.3 | | 22.2 | |
Goodwill | | 265.7 | | 258.2 | |
Intangibles, net | | 92.4 | | 82.7 | |
| | $ | 4,838.5 | | $ | 4,428.4 | |
LIABILITIES AND PARTNERS’ CAPITAL | | | | | |
Current liabilities | | | | | |
Due to General Partner and affiliates | | $ | 14.5 | | $ | 12.5 | |
Accounts payable and other | | 183.0 | | 247.9 | |
Accrued purchases | | 388.2 | | 646.7 | |
Interest payable | | 28.8 | | 11.4 | |
Property and other taxes payable | | 22.2 | | 21.8 | |
Current maturities of long-term debt | | 31.0 | | 31.0 | |
| | 667.7 | | 971.3 | |
| | | | | |
Long-term debt | | 1,827.4 | | 1,682.9 | |
Loans from General Partner and affiliates | | 134.0 | | 151.8 | |
Environmental liabilities | | 4.2 | | 4.8 | |
Other long-term liabilities | | 172.3 | | 253.8 | |
| | 2,805.6 | | 3,064.6 | |
Commitments and contingencies | | | | | |
| | | | | |
Partners’ capital | | | | | |
Class A common units (Units issued—49,938,834 in 2006 and 2005) | | 1,159.9 | | 1,142.4 | |
Class B common units (Units issued—3,912,750 in 2006 and 2005) | | 68.9 | | 67.2 | |
Class C units (Units issued —10,869,565 in 2006) | | 503.7 | | — | |
i-units (Units issued—12,440,455 in 2006 and 11,704,948 in 2005) | | 459.3 | | 421.7 | |
General Partner | | 47.6 | | 34.6 | |
Accumulated other comprehensive loss | | (206.5 | ) | (302.1 | ) |
| | 2,032.9 | | 1,363.8 | |
| | $ | 4,838.5 | | $ | 4,428.4 | |
NET INCOME PER COMMON AND i-UNIT
Net income per common and i-unit is computed by dividing net income, after deduction of Enbridge Energy Company, Inc.’s (the “General Partner”) allocation, by the weighted average number of our limited partner units outstanding. The General Partner’s allocation is equal to an amount based upon its general partner interest, adjusted to reflect an amount equal to its incentive distributions and an amount required to reflect depreciation on the General Partner’s historical cost basis for assets contributed on formation of the Partnership. We have no dilutive securities. Net income per limited partner unit was determined as follows:
| | Three months ended
September 30, | | Nine months ended
September 30, | |
| | 2006 | | 2005 | | 2006 | | 2005 | |
| | (in millions, except per unit amounts) | |
| | | | | | | | | |
Net income (loss) | | $ | 82.2 | | $ | (14.4 | ) | $ | 233.7 | | $ | 39.5 | |
Allocations to the General Partner: | | | | | | | | | |
Net (income) loss allocated to General Partner | | (1.7 | ) | 0.3 | | (4.7 | ) | (0.8 | ) |
Incentive distributions to General Partner | | (7.0 | ) | (5.4 | ) | (18.3 | ) | (16.0 | ) |
Historical cost depreciation adjustments | | — | | — | | (0.1 | ) | (0.1 | ) |
| | (8.7 | ) | (5.1 | ) | (23.1 | ) | (16.9 | ) |
Net income (loss) allocable to limited partner units | | $ | 73.5 | | $ | (19.5 | ) | $ | 210.6 | | $ | 22.6 | |
Weighted average units outstanding | | 71.7 | | 62.1 | | 67.8 | | 61.5 | |
Net income (loss) per limited partner unit (basic and diluted) | | $ | 1.03 | | $ | (0.32 | ) | $ | 3.11 | | $ | 0.37 | |
SEGMENT INFORMATION
Our business is divided into operating segments, defined as components of the enterprise, about which financial information is available and evaluated regularly by our Chief Operating Decision Maker in deciding how resources are allocated and performance is assessed.
Each of our reportable segments is a business unit that offers different services and products that is managed separately, since each business segment requires different operating strategies. We have segregated our business activities into three distinct operating segments:
· Liquids;
· Natural Gas; and
· Marketing.
The following tables present certain financial information about our business segments:
| | As of and for the three months ended September 30, 2006 | |
| | Liquids | | Natural Gas | | Marketing | | Corporate | | Total | |
| | (in millions) | |
Total revenue | | $ | 127.2 | | $ | 1,251.9 | | $ | 772.4 | | $ | — | | $ | 2,151.5 | |
Less: Intersegment revenue | | — | | 565.3 | | 53.9 | | — | | 619.2 | |
Operating revenue | | 127.2 | | 686.6 | | 718.5 | | — | | 1,532.3 | |
Cost of natural gas | | — | | 568.0 | | 697.9 | | — | | 1,265.9 | |
Operating and administrative | | 36.0 | | 56.9 | | 1.1 | | 1.1 | | 95.1 | |
Power | | 27.8 | | — | | — | | — | | 27.8 | |
Depreciation and amortization | | 16.0 | | 18.7 | | 0.1 | | — | | 34.8 | |
Operating income | | 47.4 | | 43.0 | | 19.4 | | .(1.1) | | 108.7 | |
Interest expense | | — | | — | | — | | (28.5 | ) | (28.5 | ) |
Other income | | — | | — | | — | | 2.0 | | 2.0 | |
Net income | | $ | 47.4 | | $ | 43.0 | | $ | 19.4 | | $ | (27.6 | ) | $ | 82.2 | |
Capital expenditures (excluding acquisitions) | | $ | 50.8 | | $ | 175.6 | | $ | 0.9 | | $ | 1.8 | | $ | 229.1 | |
| | As of and for the three months ended September 30, 2005 | |
| | Liquids | | Natural Gas | | Marketing | | Corporate | | Total | |
| | (in millions) | |
Total revenue | | $ | 104.1 | | $ | 1,267.5 | | $ | 1,162.6 | | $ | — | | $ | 2,534.2 | |
Less: Intersegment revenue | | — | | 669.6 | | 55.0 | | — | | 724.6 | |
Operating revenue | | 104.1 | | 597.9 | | 1,107.6 | | — | | 1,809.6 | |
Cost of natural gas | | — | | 513.9 | | 1,145.9 | | — | | 1,659.8 | |
Operating and administrative | | 36.1 | | 44.3 | | 1.4 | | 0.6 | | 82.4 | |
Power | | 19.0 | | — | | — | | — | | 19.0 | |
Depreciation and amortization | | 18.3 | | 18.1 | | 0.1 | | — | | 36.5 | |
Operating income | | 30.7 | | 21.6 | | (39.8 | ) | (0.6 | ) | 11.9 | |
Interest expense | | — | | — | | — | | (28.4 | ) | (28.4 | ) |
Other income | | — | | — | | — | | 2.1 | | 2.1 | |
Net income (loss) | | $ | 30.7 | | $ | 21.6 | | $ | (39.8 | ) | $ | (26.9 | ) | $ | (14.4 | ) |
Capital expenditures (excluding acquisitions) | | $ | 17.3 | | $ | 69.2 | | $ | — | | $ | 0.7 | | $ | 87.2 | |
| | As of and for the nine months ended September 30, 2006 | |
| | Liquids | | Natural Gas | | Marketing | | Corporate | | Total | |
| | (in millions) | |
Total revenue | | $ | 374.7 | | $ | 4,085.1 | | $ | 2,406.4 | | $ | — | | $ | 6,866.2 | |
Less: Intersegment revenue | | — | | 1,854.0 | | 166.6 | | — | | 2,020.6 | |
Operating revenue | | 374.7 | | 2,231.1 | | 2,239.8 | | — | | 4,845.6 | |
Cost of natural gas | | — | | 1,908.4 | | 2,190.8 | | — | | 4,099.2 | |
Operating and administrative | | 99.7 | | 150.6 | | 3.7 | | 2.3 | | 256.3 | |
Power | | 78.3 | | — | | — | | — | | 78.3 | |
Depreciation and amortization | | 47.8 | | 53.2 | | 0.3 | | 0.2 | | 101.5 | |
Operating income | | 148.9 | | 118.9 | | 45.0 | | (2.5 | ) | 310.3 | |
Interest expense | | — | | — | | — | | (84.0 | ) | (84.0 | ) |
Other income | | — | | — | | — | | 7.4 | | 7.4 | |
Net income | | $ | 148.9 | | $ | 118.9 | | $ | 45.0 | | $ | (79.1 | ) | $ | 233.7 | |
Total assets | | $ | 1,752.4 | | $ | 2,584.1 | | $ | 264.6 | | $ | 237.4 | | $ | 4,838.5 | |
Capital expenditures (excluding acquisitions) | | $ | 101.6 | | $ | 404.7 | | $ | 1.8 | | $ | 6.2 | | $ | 514.3 | |
| | As of and for the nine months ended September 30, 2005 | |
| | Liquids | | Natural Gas | | Marketing | | Corporate | | Total | |
| | (in millions) | |
Total revenue | | $ | 303.1 | | $ | 3,180.1 | | $ | 2,658.5 | | $ | — | | $ | 6,141.7 | |
Less: Intersegment revenue | | — | | 1,635.3 | | 114.0 | | — | | 1,749.3 | |
Operating revenue | | 303.1 | | 1,544.8 | | 2,544.5 | | — | | 4,392.4 | |
Cost of natural gas | | — | | 1,299.9 | | 2,582.5 | | — | | 3,882.4 | |
Operating and administrative | | 105.5 | | 126.3 | | 3.1 | | 2.3 | | 237.2 | |
Power | | 53.2 | | — | | — | | — | | 53.2 | |
Depreciation and amortization | | 53.6 | | 49.9 | | 0.4 | | — | | 103.9 | |
Operating income | | 90.8 | | 68.7 | | (41.5 | ) | (2.3 | ) | 115.7 | |
Interest expense | | — | | — | | — | | (79.6 | ) | (79.6 | ) |
Other income | | — | | — | | — | | 3.4 | | 3.4 | |
Net income | | $ | 90.8 | | $ | 68.7 | | $ | (41.5 | ) | $ | (78.5 | ) | $ | 39.5 | |
Total assets | | $ | 1,672.8 | | $ | 2,239.4 | | $ | 557.4 | | $ | 91.4 | | $ | 4,561.0 | |
Capital expenditures (excluding acquisitions) | | $ | 52.0 | | $ | 206.5 | | $ | — | | $ | 3.4 | | $ | 261.9 | |
