Exhibit 99.2
ENBRIDGE ENERGY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF INCOME
| | Year ended December 31, | |
| | 2007 | | 2006 | | 2005 | |
| | (in millions, except per unit amounts ) | |
| | | | | | | |
Operating revenue | | $ | 7,282.6 | | $ | 6,509.0 | | $ | 6,476.9 | |
Operating expenses | | | | | | | |
Cost of natural gas | | 6,246.9 | | 5,514.6 | | 5,763.3 | |
Operating and administrative | | 434.3 | | 364.8 | | 326.8 | |
Power | | 117.0 | | 107.6 | | 74.8 | |
Depreciation and amortization | | 165.6 | | 135.1 | | 138.2 | |
Gain on sale of assets | | — | | — | | (18.1 | ) |
| | 6,963.8 | | 6,122.1 | | 6,285.0 | |
Operating income | | 318.8 | | 386.9 | | 191.9 | |
Interest expense | | 99.8 | | 110.5 | | 107.7 | |
Other income | | 3.0 | | 8.5 | | 5.0 | |
Income from continuing operations before income tax expense | | 222.0 | | 284.9 | | 89.2 | |
Income tax expense | | 5.1 | | — | | — | |
Income from continuing operations | | 216.9 | | 284.9 | | 89.2 | |
Income from discontinued operations | | 32.6 | | — | | — | |
Net income | | $ | 249.5 | | $ | 284.9 | | $ | 89.2 | |
Net income allocable to limited partner units | | $ | 211.8 | | $ | 254.0 | | $ | 65.7 | |
Net income per limited partner unit (basic and diluted) | | $ | 2.45 | | $ | 3.62 | | $ | 1.06 | |
Weighted average limited partner units outstanding | | 86.3 | | 70.2 | | 62.1 | |
Cash distributions paid per limited partner unit | | $ | 3.725 | | $ | 3.700 | | $ | 3.700 | |
1
ENBRIDGE ENERGY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | Year ended December 31, | |
| | 2007 | | 2006 | | 2005 | |
| | (in millions ) | |
Cash provided by operating activities | | | | | | | |
Net income | | $ | 249.5 | | $ | 284.9 | | $ | 89.2 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | |
Depreciation and amortization | | 165.6 | | 135.1 | | 138.2 | |
Derivative fair value losses | | 64.2 | | (64.4 | ) | 58.4 | |
Gain on sale of net assets | | (32.6 | ) | — | | (18.1 | ) |
Inventory market price adjustments | | 4.5 | | 17.7 | | — | |
Other | | 1.8 | | 8.3 | | (0.8 | ) |
Changes in operating assets and liabilities, net of acquisitions: | | | | | | | |
Receivables, trade and other | | (11.1 | ) | (37.0 | ) | (38.0 | ) |
Due from General Partner and affiliates | | 3.3 | | (10.4 | ) | (12.4 | ) |
Accrued receivables | | (82.3 | ) | 98.8 | | (237.1 | ) |
Inventory | | 2.0 | | 1.1 | | (57.5 | ) |
Current and long-term other assets | | (4.0 | ) | (2.7 | ) | (2.2 | ) |
Due to General Partner and affiliates | | 23.2 | | 10.1 | | 2.6 | |
Accounts payable and other | | (3.0 | ) | 4.3 | | 42.2 | |
Accrued purchases | | 73.5 | | (116.4 | ) | 295.3 | |
Interest payable | | 9.5 | | 4.4 | | 8.8 | |
Current income tax payable | | 4.9 | | — | | — | |
Property and other taxes payable | | (4.7 | ) | (2.0 | ) | (1.5 | ) |
Settlement of interest rate derivatives | | (0.9 | ) | (10.2 | ) | — | |
Net cash provided by operating activities | | 463.4 | | 321.6 | | 267.1 | |
Cash used in investing activities | | | | | | | |
Additions to property, plant and equipment | | (1,980.2 | ) | (864.4 | ) | (344.8 | ) |
Changes in construction payables | | 83.6 | | 30.4 | | 2.8 | |
Asset acquisitions, net of cash acquired | | — | | (33.3 | ) | (186.4 | ) |
Proceeds from sale of net assets | | 133.0 | | 0.2 | | 105.4 | |
Settlement of natural gas collars | | — | | — | | (16.3 | ) |
Other | | (1.4 | ) | 0.1 | | 2.2 | |
Net cash used in investing activities | | (1,765.0 | ) | (867.0 | ) | (437.1 | ) |
Cash provided by financing activities | | | | | | | |
Net Proceeds from unit issuances | | 628.8 | | 509.6 | | 268.6 | |
Distributions to partners | | (245.4 | ) | (227.4 | ) | (210.6 | ) |
Net proceeds from issuances of long term debt | | 592.8 | | 297.6 | | — | |
Net Credit Facility borrowings (repayments) | | 400.0 | | — | | (175.0 | ) |
Net commercial paper issuances (repayments) | | (171.5 | ) | 111.4 | | 330.0 | |
Affiliate note borrowings | | 130.0 | | — | | — | |
Affiliate note repayments | | (136.2 | ) | (20.0 | ) | — | |
Repayments of First Mortgage Notes | | (31.0 | ) | (31.0 | ) | (31.0 | ) |
Other | | — | | — | | (0.5 | ) |
Net cash provided by financing activities | | 1,167.5 | | 640.2 | | 181.5 | |
Net increase (decrease) in cash and cash equivalents | | (134.1 | ) | 94.8 | | 11.5 | |
Cash and cash equivalents at beginning of year | | 184.6 | | 89.8 | | 78.3 | |
Cash and cash equivalents at end of year | | $ | 50.5 | | $ | 184.6 | | $ | 89.8 | |
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ENBRIDGE ENERGY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
| | December 31, | |
| | 2007 | | 2006 | |
| | (dollars in millions ) | |
ASSETS | | | | | |
Current assets | | | | | |
Cash and cash equivalents | | $ | 50.5 | | $ | 184.6 | |
Receivables, trade and other, net of allowance for doubtful accounts of $1.9 in 2007 and $2.4 in 2006 | | 157.8 | | 146.7 | |
Due from General Partner and affiliates | | 27.2 | | 30.5 | |
Accrued receivables | | 598.8 | | 516.5 | |
Inventory | | 110.6 | | 117.1 | |
Other current assets | | 14.8 | | 13.9 | |
| | 959.7 | | 1,009.3 | |
Property, plant and equipment, net | | 5,554.9 | | 3,824.9 | |
Goodwill | | 256.5 | | 265.7 | |
Intangibles, net | | 91.5 | | 97.8 | |
Other assets, net | | 29.0 | | 26.1 | |
| | $ | 6,891.6 | | $ | 5,223.8 | |
LIABILITIES AND PARTNERS’ CAPITAL | | | | | |
Current liabilities | | | | | |
Due to General Partner and affiliates | | $ | 45.8 | | $ | 22.6 | |
Accounts payable and other | | 392.1 | | 211.5 | |
Accrued purchases | | 603.8 | | 530.3 | |
Interest payable | | 20.9 | | 11.4 | |
Property and other taxes payable | | 22.5 | | 18.6 | |
Loans from General Partner and affiliates | | — | | 136.2 | |
Current maturities of long-term debt | | 31.0 | | 31.0 | |
| | 1,116.1 | | 961.6 | |
Long-term debt | | 2,862.9 | | 2,066.1 | |
Environmental liabilities | | 2.8 | | 3.3 | |
Notes from General Partner and affiliates | | 130.0 | | — | |
Other long-term liabilities | | 208.3 | | 149.4 | |
| | 4,320.1 | | 3,180.4 | |
Commitments and contingencies | | | | | |
| | | | | |
Partners’ capital | | | | | |
Class A common units (55,238,834 and 49,938,834 at December 31, 2007 and 2006, respectively) | | 1,340.7 | | 1,141.7 | |
Class B common units (3,912,750 at December 31, 2007 and 2006) | | 72.9 | | 67.6 | |
Class C units (18,073,367 and 11,070,152 at December 31, 2007 and 2006, respectively) | | 874.1 | | 509.8 | |
i-units (13,564,086 and 12,674,148 at December 31, 2007 and 2006, respectively) | | 515.3 | | 466.3 | |
General Partner | | 62.9 | | 47.6 | |
Accumulated other comprehensive loss | | (294.4 | ) | (189.6 | ) |
| | 2,571.5 | | 2,043.4 | |
| | $ | 6,891.6 | | $ | 5,223.8 | |
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NET INCOME PER COMMON AND i-UNIT
We compute net income per limited partner unit by dividing net income, after deducting our allocation to the General Partner, by the weighted average number of our limited partner units outstanding. The General Partner’s allocation is equal to an amount based upon its two percent 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 outstanding, therefore basic and diluted earnings per unit amounts are equal. Net income per limited partner unit was determined as follows:
| | Year ended December 31, | |
| | 2007 | | 2006 | | 2005 | |
| | (in millions,
except per unit amounts) | |
| | | | | | | |
Income from continuing operations | | $ | 216.9 | | $ | 284.9 | | $ | 89.2 | |
Income from discontinued operations | | 32.6 | | — | | — | |
Net income | | $ | 249.5 | | $ | 284.9 | | $ | 89.2 | |
Allocations to the General Partner: | | | | | | | |
Income from continuing operations | | $ | (4.3 | ) | $ | (5.7 | ) | $ | (1.8 | ) |
Incentive distributions to General Partner | | (32.5 | ) | (25.1 | ) | (21.6 | ) |
Historical cost depreciation adjustments | | (0.2 | ) | (0.1 | ) | (0.1 | ) |
| | (37.0 | ) | (30.9 | ) | (23.5 | ) |
Income from discontinued operations | | (0.7 | ) | — | | — | |
| | $ | (37.7 | ) | $ | (30.9 | ) | $ | (23.5 | ) |
Allocations to limited partner units | | | | | | | |
Income from continuing operations | | $ | 179.9 | | $ | 254.0 | | $ | 65.7 | |
Income from discontinued operations | | 31.9 | | — | | — | |
| | $ | 211.8 | | $ | 254.0 | | $ | 65.7 | |
Basic and diluted earnings per limited partner unit | | | | | | | |
Income from continuing operations | | $ | 2.08 | | $ | 3.62 | | $ | 1.06 | |
Income from discontinued operations | | 0.37 | | — | | — | |
Net income per limited partner unit (basic and diluted) | | $ | 2.45 | | $ | 3.62 | | $ | 1.06 | |
| | | | | | | |
Weighted average units outstanding | | 86.3 | | 70.2 | | 62.1 | |
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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 table presents certain financial information relating to our business segments:
| | For the three months ended December 31, 2007 | |
| | Liquids | | Natural Gas | | Marketing | | Corporate(1) | | Total | |
| | (unaudited; in millions) | |
Total revenue | | $ | 147.8 | | $ | 1,722.6 | | $ | 893.5 | | $ | — | | $ | 2,763.9 | |
Less: Intersegment revenue | | — | | 595.7 | | 47.9 | | — | | 643.6 | |
Operating revenue | | 147.8 | | 1,126.9 | | 845.6 | | — | | 2,120.3 | |
Cost of natural gas | | — | | 1,023.8 | | 832.4 | | — | | 1,856.2 | |
Operating and administrative | | 47.9 | | 76.4 | | 2.2 | | 1.2 | | 127.7 | |
Power | | 29.9 | | — | | — | | — | | 29.9 | |
Depreciation and amortization | | 17.9 | | 26.0 | | 0.4 | | — | | 44.3 | |
Operating income | | 52.1 | | 0.7 | | 10.6 | | (1.2 | ) | 62.2 | |
Interest expense | | — | | — | | — | | (29.6 | ) | (29.6 | ) |
Other income | | — | | — | | — | | 0.7 | | 0.7 | |
Income Tax Expense | | — | | — | | — | | (1.4 | ) | (1.4 | ) |
Income from continuing operations | | 52.1 | | 0.7 | | 10.6 | | (31.5 | ) | 31.9 | |
Income from discontinued operations | | — | | 32.6 | | — | | — | | 32.6 | |
Net Income | | $ | 52.1 | | $ | 33.3 | | $ | 10.6 | | $ | (31.5 | ) | $ | 64.5 | |
Capital expenditures (excluding acquisitions) | | $ | 371.0 | | $ | 175.2 | | $ | — | | $ | 5.6 | | $ | 551.8 | |
(1) Corporate consists of interest expense, interest income, and other costs such as certain taxes, which are not allocated to the other business segments.
| | For the three months ended December 31, 2006 | |
| | Liquids | | Natural Gas | | Marketing | | Corporate(1) | | Total | |
| | (unaudited; in millions) | |
Total revenue | | $ | 138.1 | | $ | 1,319.0 | | $ | 775.9 | | $ | — | | $ | 2,233.0 | |
Less: Intersegment revenue | | — | | 529.4 | | 40.2 | | — | | 569.6 | |
Operating revenue | | 138.1 | | 789.6 | | 735.7 | | — | | 1,663.4 | |
Cost of natural gas | | — | | 692.7 | | 722.7 | | — | | 1,426.7 | |
Operating and administrative | | 41.6 | | 64.8 | | 1.7 | | 0.4 | | 108.5 | |
Power | | 29.3 | | — | | — | | — | | 29.3 | |
Depreciation and amortization | | 16.3 | | 17.1 | | 0.2 | | — | | 33.6 | |
Operating income | | 50.9 | | 15.0 | | 11.1 | | (0.4 | ) | 76.6 | |
Interest expense | | — | | — | | — | | (26.5 | ) | (26.5 | ) |
Other income | | — | | — | | — | | 1.1 | | 1.1 | |
Net income | | $ | 50.9 | | $ | 15.0 | | $ | 11.1 | | $ | (25.8 | ) | $ | 51.2 | |
Capital expenditures (excluding acquisitions) | | $ | 135.6 | | $ | 210.1 | | $ | 0.1 | | $ | 4.3 | | $ | 350.1 | |
(1) Corporate consists of interest expense, interest income, and other costs such as certain taxes, which are not allocated to the other business segments.
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| | As of and for the Year Ended December 31, 2007 | |
| | Liquids | | Natural Gas | | Marketing | | Corporate(1) | | Total | |
| | (unaudited; in millions) | |
Total revenue | | $ | 548.1 | | $ | 5,807.3 | | $ | 3,527.5 | | $ | — | | $ | 9,882.9 | |
Less: Intersegment revenue | | — | | 2,363.3 | | 237.0 | | — | | 2,600.3 | |
Operating revenue | | 548.1 | | 3,444.0 | | 3,290.5 | | — | | 7,282.6 | |
Cost of natural gas | | — | | 2,990.0 | | 3,256.9 | | — | | 6,246.9 | |
Operating and administrative | | 156.1 | | 266.7 | | 8.0 | | 3.5 | | 434.3 | |
Power | | 117.0 | | — | | — | | — | | 117.0 | |
Depreciation and amortization | | 67.9 | | 96.1 | | 1.6 | | — | | 165.6 | |
Operating income | | 207.1 | | 91.2 | | 24.0 | | (3.5 | ) | 318.8 | |
Interest expense | | — | | — | | — | | (99.8 | ) | (99.8 | ) |
Other income | | — | | — | | — | | 3.0 | | 3.0 | |
Income Tax Expense | | — | | — | | — | | (5.1 | ) | (5.1 | ) |
Income from continuing operations | | 207.1 | | 91.2 | | 24.0 | | (105.4 | ) | 216.9 | |
Income from discontinued operations | | — | | 32.6 | | — | | — | | 32.6 | |
Net Income | | $ | 207.1 | | $ | 123.8 | | $ | 24.0 | | $ | (105.4 | ) | $ | 249.5 | |
Total assets | | $ | 2,976.9 | | $ | 3,461.1 | | $ | 349.6 | | $ | 104.0 | | $ | 6,891.6 | |
Capital expenditures (excluding acquisitions) | | $ | 1,218.8 | | $ | 747.9 | | $ | 1.6 | | $ | 11.9 | | $ | 1,980.2 | |
(1) Corporate consists of interest expense, interest income, and other costs such as certain taxes, which are not allocated to the other business segments.
| | As of and for the Year Ended December 31, 2006 | |
| | Liquids | | Natural Gas | | Marketing | | Corporate(1) | | Total | |
| | (unaudited; in millions) | |
Total revenue | | $ | 512.8 | | $ | 5,404.1 | | $ | 3,182.3 | | $ | — | | $ | 9,099.2 | |
Less: Intersegment revenue | | — | | 2,383.4 | | 206.8 | | — | | 2,590.2 | |
Operating revenue | | 512.8 | | 3,020.7 | | 2,975.5 | | — | | 6,509.0 | |
Cost of natural gas | | — | | 2,601.1 | | 2,913.5 | | — | | 5,514.6 | |
Operating and administrative | | 141.3 | | 215.4 | | 5.4 | | 2.7 | | 364.8 | |
Power | | 107.6 | | — | | — | | — | | 107.6 | |
Depreciation and amortization | | 64.1 | | 70.3 | | 0.5 | | 0.2 | | 135.1 | |
Operating income | | 199.8 | | 133.9 | | 56.1 | | (2.9 | ) | 386.9 | |
Interest expense | | — | | — | | — | | (110.5 | ) | (110.5 | ) |
Other income | | — | | — | | — | | 8.5 | | 8.5 | |
Net income | | $ | 199.8 | | $ | 133.9 | | $ | 56.1 | | $ | (104.9 | ) | $ | 284.9 | |
Total assets | | $ | 1,816.4 | | $ | 2,797.3 | | $ | 366.9 | | $ | 243.2 | | $ | 5,223.8 | |
Capital expenditures (excluding acquisitions) | | $ | 237.2 | | $ | 614.8 | | $ | 1.9 | | $ | 10.5 | | $ | 864.4 | |
(1) Corporate consists of interest expense, interest income, and other costs such as certain taxes, which are not allocated to the other business segments.
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