EXHIBIT 99.1
NORTHERN BORDER PARTNERS, L.P. REVISES
INITIALLY RELEASED 2001 NET INCOME
FOR IMMEDIATE RELEASE: Monday, March 11, 2002
OMAHA - Northern Border Partners, L.P. (NYSE - NBP) today announced it
is revising its initially released fourth quarter and full year 2001 net income
to $20.3 million or $0.45 per unit, and $87.8 million or $2.12 per unit,
respectively. The revision relates to noncash adjustments in accounting for
certain commodity hedges of Bear Paw Energy, the Partnership's U.S. gathering
and processing segment.
In 2001 Bear Paw Energy entered into swap agreements with Enron North
America (ENA), a subsidiary of Enron Corp., to hedge a portion of its share of
the natural gas and natural gas liquids expected to be received as processing
fees in 2001 to 2005. During the fourth quarter of 2001, the hedging
relationships were discontinued due to concerns over the liquidity of ENA.
Previously, the Partnership believed that the change in the market value of the
swaps due to the ENA bankruptcy would result in a reduction in future income
recognition over the term of the swaps. However, under generally accepted
accounting principles, income from these agreements will continue to be
recognized over their original term and the $5.3 million loss in the value of
the hedge will be charged to net income in 2001.
"The rules regarding accounting for these financial instruments are
complex and evolving," said Bill Cordes, chairman and chief executive officer of
Northern Border Partners. "This does not change the estimate of our exposure to
ENA, which has been fully reserved to-date. The overall effect of this revision
is to move $5.3 million of income from 2001 or $0.12 per unit to the years 2002
through 2005, with just over $4.6 million related to the year 2002. Cash flow is
not impacted. It is also important to note this is a change in the preliminary
earnings information released in January only and not a restatement of financial
statements previously filed with the SEC. We continue to expect to file our Form
10-K on a timely basis."
Northern Border Partners will host an analyst conference call to
discuss this revision on Tuesday, March 12, 2002 at 8:30 am EST. The Partnership
will also simulcast the call live via the Internet at
http://www.northernborderpartners.com.
A replay of the call will be available through Tuesday, March 19, 2002
by dialing, toll free, (888) 203-1112 and entering confirmation code 759631. The
call will also be archived on the Northern Border Partners' website.
Northern Border Partners, L.P. owns a 70 percent general partner interest
in Northern Border Pipeline Company, which owns a 1,249-mile interstate pipeline
system that transports natural gas from the Montana-Saskatchewan border to
markets in the Midwestern United States. Additionally, the Partnership owns the
350-mile long Midwestern Gas Transmission system, which stretches from Portland,
Tennessee to Joliet, Illinois. The Partnership also has gathering systems and
processing plants in the Powder River, Wind River, and Williston Basins in the
U.S.; owns and operates processing plants and gathering pipelines in Alberta,
Canada; and transports coal-water slurry via a pipeline in the southwestern
U.S. Northern Border Partners information may be found at
http://www.northernborderpartners.com/.
This press release includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Although Northern Border Partners, L.P. believes that its
expectations are based on reasonable assumptions, it can give no assurance that
such expectations will be achieved. Important factors that could cause actual
results to differ materially from those in the forward-looking statements
include developments in the voluntary petitions for bankruptcy by Enron; natural
gas developments in the Powder River, Wind River, Williston and Western Canadian
Sedimentary Basins; regulatory actions; competitive conditions in the overall
natural gas and electricity markets; prices of natural gas and natural gas
liquids; and conditions in the capital markets.
##
FINANCIAL HIGHLIGHTS
(Unaudited: In Millions Except Net Income Per Unit)
<Table>
<Caption>
FOURTH QUARTER YEAR-TO-DATE
2001 2000 2001 2000
-------------- ------------- -------------- -------------
Operating Revenue $123.4 $92.1 $461.5 $339.7
Recurring Net Income $20.3 $20.4 $92.6 $76.7
Per Unit Recurring Net Income $0.45 $0.65 $2.24 $2.50
Cash Flows From Operating Activities $72.3 $23.2 $233.9 $169.6
EBITDA* $76.1 $70.1 $303.0 $259.3
CONSOLIDATED STATEMENT OF INCOME
(Unaudited: In Millions Except Net Income Per Unit)
<Table>
<Caption>
FOURTH QUARTER YEAR-TO-DATE
2001 2000 2001 2000
-------------- ------------- -------------- -------------
Operating Revenue $123.4 $92.1 $461.5 $339.7
-------------- ------------- -------------- -------------
Operating Expenses
Product Purchases 10.0 0.0 39.7 0.0
Operations and Maintenance 32.4 20.7 96.5 62.1
Depreciation and Amortization 20.6 14.8 76.3 60.7
Taxes Other Than Income 7.1 6.4 28.1 28.6
-------------- ------------- -------------- -------------
Total Operating Expenses 70.1 41.9 240.6 151.4
-------------- ------------- -------------- -------------
Operating Income 53.3 50.2 220.9 188.3
Interest Expense, Net (22.1) (23.0) (91.1) (81.5)
Other Income (Expense) (0.2) 3.1 (1.6) 8.6
Equity Earnings (Losses) from Investments 0.5 0.5 1.7 (0.6)
Minority Interest (11.2) (10.4) (42.1) (38.1)
-------------- ------------- -------------- -------------
Net Income $20.3 $20.4 $87.8 $76.7
Non-Recurring Items 0.0 0.0 (4.8) 0.0
-------------- ------------- -------------- -------------
Recurring Net Income $20.3 $20.4 $92.6 $76.7
============== ============= ============== =============
EBITDA* $76.1 $70.1 $303.0 $259.3
============== ============= ============== =============
Per Unit Net Income $0.45 $0.65 $2.12 $2.50
============== ============= ============== =============
Per Unit Recurring Net Income $0.45 $0.65 $2.24 $2.50
============== ============= ============== =============
Average Units Outstanding 41.6 30.6 38.5 29.7
============== ============= ============== =============
* Represents net income plus minority interest, interest expense, net, income
taxes and depreciation and amortization including goodwill amortization
netted against equity earnings (losses) from investments, less equity AFUDC.
NORTHERN BORDER PARTNERS, L.P.
OTHER FINANCIAL INFORMATION
(Unaudited: In Millions)
DECEMBER 31,
--------------------------------
2001 2000
-------------- -------------
SUMMARY BALANCE SHEET DATA
Total assets by segment:
Pipeline 1,858.9 1,768.5
Gas gathering and processing 792.3 279.9
Coal slurry 22.0 29.6
Other (assets not allocated to segments) 14.2 4.7
-------------- -------------
Total consolidated assets 2,687.4 2,082.7
============== =============
Consolidated capitalization:
Long-term debt, including current maturities 1,423.2 1,172.0
Partners' capital 894.4 572.3
Minority interests in partners' capital 250.1 248.1
Accumulated other comprehensive income 20.5 0.0
-------------- -------------
Total capitalization 2,588.2 1,992.4
Consolidated other current liabilities and reserves and deferred credits 99.2 90.3
-------------- -------------
Total liabilities and capitalization 2,687.4 2,082.7
============== =============
FOURTH QUARTER YEAR-TO-DATE
2001 2000 2001 2000
-------------- ------------- -------------- -------------
CAPITAL EXPENDITURES AND EQUITY INVESTMENTS**
Maintenance -
Pipeline $1.4 $3.0 $6.3 $5.7
Gas Gathering and Processing 1.4 0.0 2.4 0.0
Coal Slurry 0.1 0.0 0.3 0.4
-------------- ------------- -------------- -------------
2.9 3.0 9.0 6.1
-------------- ------------- -------------- -------------
Growth -
Pipeline 3.9 2.9 135.5 5.2
Gas Gathering and Processing 24.6 3.8 506.9 242.1
Coal Slurry 0.0 0.0 0.0 0.0
-------------- ------------- -------------- -------------
28.5 6.7 642.4 247.3
-------------- ------------- -------------- -------------
Total 31.4 9.7 651.4 253.4
============== ============= ============== =============
** Pipeline capital expenditures reflect the Partnership's 70% ownership of
Northern Border Pipeline.
SUMMARY SEGMENT INFORMATION
(Unaudited)
FOURTH QUARTER YEAR-TO-DATE
2001 2000 2001 2000
-------------- ------------- -------------- -------------
PIPELINE SEGMENT
Operating Results:
Gas Delivered (MMcf) 231,876 216,638 891,935 852,674
Average Throughput (MMcf/d) 2,575 2,430 2,605 2,400
Financial Results (In Millions):
Operating Revenue $85.1 $79.2 $322.6 $311.0
-------------- ------------- -------------- -------------
Operating Expenses
Operations and Maintenance 10.3 11.6 36.9 41.5
Depreciation and Amortization 15.5 13.7 59.8 57.3
Taxes Other Than Income 6.6 6.3 26.1 28.0
-------------- ------------- -------------- -------------
Total Operating Expenses 32.4 31.6 122.8 126.8
-------------- ------------- -------------- -------------
Operating Income 52.7 47.6 199.8 184.2
Interest Expense, Net (13.9) (16.1) (55.4) (65.2)
Other Income (Expense) 0.2 3.1 0.0 8.1
-------------- ------------- -------------- -------------
Net Income 39.0 34.6 144.4 127.1
Net income to Minority Interest (11.2) (10.4) (42.1) (38.1)
-------------- ------------- -------------- -------------
Net Income to Northern Border Partners $27.8 $24.2 $102.3 $89.0
============== ============= ============== =============
EBITDA* $68.2 $64.3 $258.3 $249.3
============== ============= ============== =============
Distributions from Northern Border Pipeline:
Paid to Northern Border Partners $26.7 $25.7 $100.1 $94.4
Paid to Minority Interest $11.5 $11.0 $42.9 $40.5
-------------- ------------- -------------- -------------
Total Distributions $38.2 $36.7 $143.0 $134.9
============== ============= ============== =============
Note: Beginning in May 2001, the Pipeline segment information includes the
operating results for Midwestern Gas Transmission.
* Represents net income plus minority interest, interest expense, net, income
taxes and depreciation and amortization less equity AFUDC.
SUMMARY SEGMENT INFORMATION
(Unaudited)
FOURTH QUARTER YEAR-TO-DATE
2001 2000 2001 2000
-------------- ------------- -------------- -------------
GAS GATHERING AND PROCESSING SEGMENT
Operating Results:
Volumes (MMcf/d):
Gathering 905 397 793 397
Processing 120 0 118 0
Financial Results (In Millions):
Operating Revenue $32.7 $7.5 $116.8 $7.5
-------------- ------------- -------------- -------------
Operating Expenses
Product Purchases 10.0 0.0 39.7 0.0
Operations and Maintenance 17.6 5.1 43.2 5.1
Depreciation and Amortization 4.7 0.4 14.3 0.4
Taxes Other Than Income 0.3 0.0 1.5 0.0
-------------- ------------- -------------- -------------
Total Operating Expenses 32.6 5.5 98.7 5.5
-------------- ------------- -------------- -------------
Operating Income 0.1 2.0 18.1 2.0
Interest Expense, Net (0.5) 0.0 (0.7) 0.0
Other Income (Expense) 0.0 0.0 1.2 0.0
Equity Earnings (Losses) from Investments 0.5 0.5 1.7 (0.6)
-------------- ------------- -------------- -------------
Net Income $0.1 $2.5 $20.3 $1.4
============== ============= ============== =============
EBITDA* $7.0 $4.5 $41.4 $4.0
============== ============= ============== =============
Distributions Received from Equity Investments $3.3 $0.9 $7.1 $0.9
============== ============= ============== =============
Note: There are no operating results reported in first three quarters of 2000
for Gas Gathering and Processing since the initial acquisitions were made in
September 2000.
* Represents net income plus interest expense, net, income taxes and
depreciation and amortization, including goodwill amortization netted against
equity earnings (losses) from investments.
SUMMARY SEGMENT INFORMATION
(Unaudited)
FOURTH QUARTER YEAR-TO-DATE
2001 2000 2001 2000
-------------- ------------- -------------- -------------
COAL SLURRY SEGMENT
Operating Results:
Tons of Coal Shipped (In Thousands) 1,338 1,219 4,932 4,711
Financial Results (In Millions):
Operating Revenue $5.6 $5.4 $22.1 $21.2
-------------- ------------- -------------- -------------
Operating Expenses
Operations and Maintenance 3.4 3.2 13.3 13.2
Depreciation and Amortization 0.3 0.7 2.2 3.0
Taxes Other Than Income 0.2 0.2 0.6 0.6
-------------- ------------- -------------- -------------
Total Operating Expenses 3.9 4.1 16.1 16.8
-------------- ------------- -------------- -------------
Operating Income 1.7 1.3 6.0 4.4
Interest Expense, Net 0.0 (0.4) (0.7) (1.7)
Other Expense (0.4) 0.0 (0.8) 0.0
-------------- ------------- -------------- -------------
Net Income $1.3 $0.9 $4.5 $2.7
============== ============= ============== =============
EBITDA* $2.0 $2.1 $8.3 $7.7
============== ============= ============== =============
* Represents net income plus interest expense, net, depreciation and
amortization and income taxes, which are included in other expense.