EXHIBIT 99.1
Northern Border News
Partners, L.P. Release 13710 FNB Parkway
Omaha, Nebraska 68154-5200
For Further Information
Contact:
Media Contact:
Beth Jensen
(402) 492-3400
Investor Contact:
Ellen Konsdorf
(402) 492-7500
NORTHERN BORDER PARTNERS REPORTS
FOURTH QUARTER AND YEAR-END RESULTS
FOR IMMEDIATE RELEASE: Thursday, January 30, 2003
OMAHA - Northern Border Partners, L.P. (NYSE - NBP) today reported
fourth quarter 2002 net income of $24.0 million or $0.49 per unit compared to
$20.3 million or $0.45 per unit in the fourth quarter 2001. Full-year net income
for 2002 was $113.7 million ($2.44 per unit) as compared to full year 2001 net
income of $87.8 million ($2.12 per unit). Earnings before interest, taxes,
depreciation and amortization (EBITDA) decreased from $76.1 million in the
fourth quarter of 2001 to $71.7 million in the fourth quarter 2002. EBITDA for
2002 increased to $317.2 million compared to $303.0 million for 2001.
Fourth quarter 2002 earnings reflect a $7.0 million non-cash charge
related to a reserve established by Northern Border Pipeline Company. The
reserve was recorded to reflect the potential costs that may arise from its
treatment of previously collected quantities of natural gas used in utility
operations to cover electric power costs. While the ultimate outcome of this
matter cannot be predicted, Northern Border Pipeline has concluded it prudent to
establish a reserve at this time.
The fourth quarter 2001 results included $3.9 million ($13.3 million
for the year) for goodwill amortization under prior accounting requirements. The
annual change in net income also includes a full year of ownership in 2002 of
acquisitions completed in 2001.
Delivered volumes in the Partnership's interstate natural gas pipelines
segment increased during fourth quarter 2002 to 241.6 billion cubic feet (Bcf)
from 231.9 Bcf for the fourth quarter of 2001. Average gathering volumes
increased to 1,185 million cubic feet per day (MMcf/d) during the fourth quarter
2002 compared to 905 MMcf/d for the fourth quarter 2001. Processing volumes were
123 MMcf/d for the fourth quarter of 2002 compared to 120 MMcf/d for the fourth
quarter 2001.
"Our interstate pipelines continue their pattern of high utilization
and stable cash flows and our gathering and processing segment continues to
grow," said Bill Cordes, chairman and chief executive officer of Northern Border
Partners. "Looking forward to 2003, we will focus on three major goals:
integrating Viking Gas Transmission's operations into our interstate pipeline
group; developing our Powder River Basin businesses to meet customer growth
needs resulting from the recently issued Environmental Impact Statements; and
negotiating with potential customers for capacity subscriptions on Northern
Border Pipeline. Financially for 2003, our current expectations are for earnings
per unit in the range of $2.55 to $2.65."
Northern Border Partners will host a conference call to review fourth
quarter and year-end 2002 results as well as the outlook for 2003 on Thursday,
January 30, 2003 at 10:30 a.m. E.T. Interested parties may listen via the
Internet live or on a replay basis through the Partnership's website at
http://www.northernborderpartners.com. The call will also be archived on
Northern Border Partners' website.
A replay of the call will be available through February 5, 2003 by
dialing, toll free in the United States and Canada, (800) 642-1687 and entering
the conference ID number 7231739.
Northern Border Partners, L.P., a leading transporter of natural gas,
owns interests in four interstate natural gas pipeline systems: a 70 percent
general partner interest in Northern Border Pipeline Company; Midwestern Gas
Transmission Company; Viking Gas Transmission Company; and one-third interest in
Guardian Pipeline, L.L.C. 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, L.P. 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 natural gas development in the Powder River, Wind River, Williston and
Western Canadian Sedimentary Basins; regulatory actions and receipt of expected
regulatory clearances; competitive conditions in the overall natural gas and
electricity markets; our ability to market pipeline capacity on favorable terms;
prices of natural gas and natural gas liquids; developments in the voluntary
petition for bankruptcy by Enron; and conditions in the capital markets and our
ability to access the capital markets.
######
NORTHERN BORDER PARTNERS, L.P.
FINANCIAL HIGHLIGHTS
(Unaudited: In Millions Except Net Income Per Unit)
<Table>
<Caption>
FOURTH QUARTER YEAR TO DATE
2002 2001 2002 2001
-------- -------- -------- --------
Operating Revenue $ 128.1 $ 123.4 $ 495.6 $ 461.5
Net Income $ 24.0 $ 20.3 $ 113.7 $ 87.8
Per Unit Net Income $ 0.49 $ 0.45 $ 2.44 $ 2.12
Cash Flows From Operating Activities $ 63.9 $ 72.3 $ 243.1 $ 233.9
EBITDA(1) $ 71.7 $ 76.1 $ 317.2 $ 303.0
</Table>
CONSOLIDATED STATEMENT OF INCOME
(Unaudited: In Millions Except Net Income Per Unit)
<Table>
<Caption>
FOURTH QUARTER YEAR TO DATE
2002 2001 2002 2001
-------- -------- -------- --------
Operating Revenue $ 128.1 $ 123.4 $ 495.6 $ 461.5
-------- -------- -------- --------
Operating Expenses
Product Purchases 15.8 10.0 50.6 39.7
Operations and Maintenance 36.4 32.4 111.7 96.5
Depreciation and Amortization 19.8 20.6 75.9 76.3
Taxes Other Than Income 8.9 7.1 32.4 28.1
-------- -------- -------- --------
Total Operating Expenses 80.9 70.1 270.6 240.6
-------- -------- -------- --------
Operating Income 47.2 53.3 225.0 220.9
Interest Expense, Net (19.3) (22.1) (82.9) (89.9)
Other Income (Expense) (0.1) (0.2) (0.2) (1.6)
Equity Earnings from Investments 4.4 0.5 14.6 1.7
Minority Interest (8.2) (11.2) (42.8) (42.1)
-------- -------- -------- --------
Net Income Before Extraordinary Items 24.0 20.3 113.7 89.0
Extraordinary Loss From Debt Restructuring(3) 0.0 0.0 0.0 (1.2)
-------- -------- -------- --------
Net Income $ 24.0 $ 20.3 $ 113.7 $ 87.8
======== ======== ======== ========
Per Unit Net Income $ 0.49 $ 0.45 $ 2.44 $ 2.12
======== ======== ======== ========
Average Units Outstanding 43.8 41.6 42.7 38.5
======== ======== ======== ========
</Table>
2001 IMPACT OF ACCOUNTING CHANGE FOR GOODWILL AND OTHER INTANGIBLE ASSETS(2)
<Table>
Net Income $ 20.3 $ 87.8
Goodwill Amortization 3.9 13.3
-------- --------
Adjusted Net Income $ 24.2 $ 101.1
======== ========
Per Unit Net Income $ 0.45 $ 2.12
Goodwill Amortization 0.09 0.35
-------- --------
Adjusted Per Unit Net Income $ 0.54 $ 2.47
======== ========
</Table>
(1) Represents net income plus minority interest; interest expense, net; income
taxes;and depreciation and amortization less equity AFUDC.
(2) As a result of Statement of Financial Accounting Standards ("SFAS") No. 142,
beginning January 1, 2002, the Partnership no longer records amortization
expense related to goodwill. For comparison purposes, the 2001 goodwill
amortization has been added back to net income and per unit net income.
(3) Relates to restructuring of debt at Black Mesa Pipeline Company.
NORTHERN BORDER PARTNERS, L.P.
OTHER FINANCIAL INFORMATION
(Unaudited: In Millions)
<Table>
<Caption>
DECEMBER 31, DECEMBER 31,
2002 2001
------------ ------------
SUMMARY BALANCE SHEET DATA
Total assets by segment:
Interstate Natural Gas Pipelines $ 1,853.8 $ 1,858.9
Natural Gas Gathering and Processing 823.9 792.3
Coal Slurry Pipeline 20.4 22.0
Other (assets not allocated to segments) 29.2 14.2
------------ ------------
Total consolidated assets $ 2,727.3 $ 2,687.4
============ ============
Consolidated capitalization:
Long-term debt, including current maturities $ 1,403.7 $ 1,423.2
Partners' capital 936.5 894.4
Minority interests in partners' equity 243.0 250.1
Accumulated other comprehensive income 7.5 20.5
------------ ------------
Total capitalization 2,590.7 2,588.2
Consolidated other current liabilities,
reserves and deferred credits 136.6 99.2
------------ ------------
Total liabilities and capitalization $ 2,727.3 $ 2,687.4
============ ============
</Table>
<Table>
<Caption>
FOURTH QUARTER YEAR TO DATE
2002 2001 2002 2001
-------- -------- -------- --------
CAPITAL EXPENDITURES AND EQUITY INVESTMENTS(1)
Maintenance -
Interstate Natural Gas Pipelines $ 2.2 $ 1.4 $ 9.6 $ 6.3
Natural Gas Gathering and Processing 1.1 1.4 3.5 2.4
Coal Slurry Pipeline 0.0 0.1 0.4 0.3
-------- -------- -------- --------
3.3 2.9 13.5 9.0
-------- -------- -------- --------
Growth -
Interstate Natural Gas Pipelines 2.3 3.9 5.2 135.5
Natural Gas Gathering and Processing 4.7 24.6 33.2 506.9
Coal Slurry Pipeline 0.0 0.0 0.0 0.0
-------- -------- -------- --------
7.0 28.5 38.4 642.4
-------- -------- -------- --------
Total 10.3 31.4 51.9 651.4
======== ======== ======== ========
</Table>
(1) Interstate Natural Gas Pipelines' capital expenditures reflect the
Partnership's 70% ownership of Northern Border Pipeline.
SUMMARY SEGMENT INFORMATION
(Unaudited)
<Table>
<Caption>
FOURTH QUARTER YEAR TO DATE
2002 2001 2002 2001
-------- -------- -------- --------
INTERSTATE NATURAL GAS PIPELINES SEGMENT
Operating Results:
Gas Delivered (MMcf) 241,592 231,876 935,654 891,935
Average Throughput (MMcf/d) 2,703 2,575 2,636 2,605
Financial Results (In Millions):
Operating Revenue $ 86.0 $ 85.1 $ 339.4 $ 322.6
-------- -------- -------- --------
Operating Expenses
Operations and Maintenance 21.8 10.3 48.6 36.9
Depreciation and Amortization 15.8 15.5 61.0 59.8
Taxes Other Than Income 8.1 6.6 29.2 26.1
-------- -------- -------- --------
Total Operating Expenses 45.7 32.4 138.8 122.8
-------- -------- -------- --------
Operating Income 40.3 52.7 200.6 199.8
Interest Expense, Net (11.6) (13.9) (51.5) (55.4)
Other Income (Expense) 0.1 0.2 1.2 0.0
-------- -------- -------- --------
Net Income 28.8 39.0 150.3 144.4
Net income to Minority Interest (8.2) (11.2) (42.8) (42.1)
-------- -------- -------- --------
Net Income to Northern Border Partners $ 20.6 $ 27.8 $ 107.5 $ 102.3
======== ======== ======== ========
EBITDA(1) $ 56.3 $ 68.2 $ 263.3 $ 258.3
======== ======== ======== ========
Distributions from Northern Border Pipeline:
Paid to Northern Border Partners $ 29.3 $ 26.7 $ 114.9 $ 100.1
Paid to Minority Interest $ 12.5 $ 11.5 $ 49.2 $ 42.9
-------- -------- -------- --------
Total Distributions $ 41.8 $ 38.2 $ 164.1 $ 143.0
======== ======== ======== ========
</Table>
2001 IMPACT OF ACCOUNTING CHANGE FOR GOODWILL AND OTHER INTANGIBLE ASSETS(2)
<Table>
Net Income $ 27.8 $ 102.3
Goodwill Amortization(2) 0.4 0.9
-------- --------
Adjusted Net Income $ 28.2 $ 103.2
======== ========
</Table>
Note: Beginning in May 2001, the Pipeline segment information includes the
operating results for Midwestern Gas Transmission.
(1) Represents net income plus minority interest; interest expense, net; income
taxes, which are included in other income (expense); and depreciation and
amortization less equity AFUDC.
(2) As a result of Statement of Financial Accounting Standards ("SFAS") No. 142,
beginning January 1, 2002, the Partnership no longer records amortization
expense related to goodwill. For comparison purposes, the 2001 goodwill
amortization has been added back to net income and per unit net income.
SUMMARY SEGMENT INFORMATION
(Unaudited)
<Table>
<Caption>
FOURTH QUARTER YEAR TO DATE
2002 2001 2002 2001
-------- -------- -------- --------
NATURAL GAS GATHERING AND PROCESSING SEGMENT
Operating Results:
Volumes (MMcf/d):
Gathering 1,185 905 1,089 793
Processing 123 120 127 118
Financial Results (In Millions):
Operating Revenue $ 36.7 $ 32.7 $ 134.7 $ 116.8
-------- -------- -------- --------
Operating Expenses
Product Purchases 15.8 10.0 50.6 39.7
Operations and Maintenance 10.3 17.6 43.2 43.2
Depreciation and Amortization 3.6 4.7 13.3 14.3
Taxes Other Than Income 0.7 0.3 2.7 1.5
-------- -------- -------- --------
Total Operating Expenses 30.4 32.6 109.8 98.7
-------- -------- -------- --------
Operating Income 6.3 0.1 24.9 18.1
Interest Expense, Net (0.2) (0.5) (0.8) (0.7)
Other Income (Expense) 0.0 0.0 (0.4) 1.2
Equity Earnings from Investments 4.4 0.5 14.6 1.7
-------- -------- -------- --------
Net Income $ 10.5 $ 0.1 $ 38.3 $ 20.3
======== ======== ======== ========
EBITDA(1) $ 14.3 $ 7.0 $ 52.9 $ 41.4
======== ======== ======== ========
Distributions Received from Equity Investments $ 2.1 $ 3.3 $ 10.8 $ 7.1
======== ======== ======== ========
</Table>
2001 IMPACT OF ACCOUNTING CHANGE FOR GOODWILL AND OTHER INTANGIBLE ASSETS(2)
<Table>
Net Income $ 0.1 $ 20.3
Goodwill Amortization(2) 3.4 12.0
-------- --------
Adjusted Net Income $ 3.5 $ 32.3
======== ========
</Table>
(1) Represents net income plus interest expense, net; depreciation and
amortization;and income taxes, which are included in other income (expense).
(2) As a result of Statement of Financial Accounting Standards ("SFAS") No. 142,
beginning January 1, 2002, the Partnership no longer records amortization
expense related to goodwill. For comparison purposes, the 2001 goodwill
amortization has been added back to net income and per unit net income.
SUMMARY SEGMENT INFORMATION
(Unaudited)
<Table>
<Caption>
FOURTH QUARTER YEAR TO DATE
2002 2001 2002 2001
-------- -------- -------- --------
COAL SLURRY PIPELINE SEGMENT
Operating Results:
Tons of Coal Shipped (In Thousands) 1,230 1,338 4,639 4,932
Financial Results (In Millions):
Operating Revenue $ 5.4 $ 5.6 $ 21.5 $ 22.1
-------- -------- -------- --------
Operating Expenses
Operations and Maintenance 2.9 3.4 14.4 13.3
Depreciation and Amortization 0.4 0.3 1.6 2.2
Taxes Other Than Income 0.1 0.2 0.5 0.6
-------- -------- -------- --------
Total Operating Expenses 3.4 3.9 16.5 16.1
-------- -------- -------- --------
Operating Income 2.0 1.7 5.0 6.0
Interest Expense, Net 0.0 0.0 0.0 (0.7)
Other Expense (0.3) (0.4) (0.9) (0.8)
-------- -------- -------- --------
Net Income $ 1.7 $ 1.3 $ 4.1 $ 4.5
======== ======== ======== ========
EBITDA(1) $ 2.4 $ 2.0 $ 6.7 $ 8.3
======== ======== ======== ========
</Table>
2001 IMPACT OF ACCOUNTING CHANGE FOR GOODWILL AND OTHER INTANGIBLE ASSETS(2)
<Table>
Net Income $ 1.3 $ 4.5
Goodwill Amortization(2) 0.1 0.4
-------- --------
Adjusted Net Income $ 1.4 $ 4.9
======== ========
</Table>
(1) Represents net income plus interest expense, net; depreciation and
amortization;and income taxes, which are included in other expense.
(2) As a result of Statement of Financial Accounting Standards ("SFAS") No. 142,
beginning January 1, 2002, the Partnership no longer records amortization
expense related to goodwill. For comparison purposes, the 2001 goodwill
amortization has been added back to net income and per unit net income.