UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): NOVEMBER 2, 2005
NORTHERN BORDER PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
DELAWARE 1-12202 93-1120873
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
13710 FNB PARKWAY
OMAHA, NEBRASKA 68154-5200
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (402) 492-7300
-------------------------------------
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
Attached as Exhibit 99.1 is a copy of Northern Border Partners, L.P.'s
press release, dated November 2, 2005, announcing Northern Border Partners,
L.P.'s financial results for the quarter ended September 30, 2005, and earnings
guidance for the remainder of 2005 and for 2006.
ITEM 2.05 COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES.
We expect Black Mesa Pipeline to be temporarily shut down upon
expiration of our coal slurry transportation contract on December 31, 2005. The
Mohave Generating Station (Mohave) co-owners, the Hopi Tribe, the Navajo Nation,
Peabody Western Coal Company and other interested parties continue to negotiate
water and coal supply issues. Black Mesa is working to resolve coal slurry
transportation issues so that operations may resume in the future. If there are
successful resolutions of all of these issues and the project receives a
favorable Environmental Impact Statement, we believe our coal slurry pipeline
will be modified and reconstructed in late 2008 and 2009. We anticipate that the
capital expenditures for the Black Mesa refurbishment project will be in the
range of $175 million to $200 million, which will be supported by revenues from
a new transportation contract.
We expect to incur temporary shut down and stand by cash costs of up to
$11.5 million, which include:
<Table>
<Caption>
Dollars in Millions
Severance (one time cost) $0.8
Pension Plan Termination 3.5
(includes $1.0 previously reserved)
On-going Expenses (to 2008) 3.7-7.2
-----------
Total $8.0 - 11.5
</Table>
If the issues are not resolved and the Mohave is permanently closed, we
expect to incur pipeline removal and remediation costs of approximately $2
million to $4 million, net of salvage, and to take a non-cash impairment charge
of approximately $12 million related to goodwill and the remaining undepreciated
cost of the pipeline. The costs associated with permanent shut down are pre-tax
and do not consider tax implications. Depending on how negotiations progress and
in accordance with accounting rules an impairment charge may be required prior
to final resolution of the issues concerning Mohave even though the project may
ultimately proceed.
ITEM 7.01 REGULATION FD DISCLOSURE.
Attached as Exhibit 99.1 is a copy of Northern Border Partners, L.P.'s
press release, dated November 2, 2005, announcing Northern Border Partners,
L.P.'s financial results for the quarter ended September 30, 2005, and earnings
guidance for the remainder of 2005 and for 2006.
ITEM 8.01 OTHER EVENTS.
UPDATE ON THE IMPACT OF ENRON'S CHAPTER 11 FILING ON OUR BUSINESS
Please refer to our Form 10-K for the year ended December 31, 2004
("2004 10-K"), and our Form 10-Q for the quarter ended March 31, 2005 ("First
Quarter 10-Q"), "Management's Discussion and Analysis of Financial Condition and
Results of Operations-Update On The Impact of Enron's Chapter 11 Filing On Our
Business" regarding the bankruptcy claims held by Northern Border Pipeline
Company, Crestone Gas Gathering, and Bear Paw Energy, LLC against Enron Corp.,
and/or Enron North America Corp. ("ENA") (the "Claims"). We reported that
settlement agreements had been entered into and approved by the bankruptcy court
for certain of the Claims.
In June 2005, Northern Border Pipeline Company, Crestone Gathering
Services, a wholly-owned subsidiary of Crestone Energy Ventures, and Bear Paw
Energy, LLC executed term sheets with a third party for the sale of the Claims
held against Enron and ENA. Proceeds from the sale of the Claims are expected to
be $14.6 million of which $14.0 million have been received. In the third quarter
of 2005, Northern Border Pipeline recognized revenue of $9.4 million ($6.6
million, net to the Partnership) as a result of the sale.
BIGHORN GAS GATHERING PREFERRED A SETTLEMENT
During third quarter 2005, we recognized $5.4 million from a settlement
related to a special income allocation from Bighorn Gas Gathering. The
settlement with our partner in Bighorn eliminates provisions of the joint
venture agreement that provided for cash flow incentives based on well
connections. Therefore, in the future, we will receive its distributions and
earnings based on our 49 percent ownership interest in Bighorn Gas Gathering.
FORWARD-LOOKING STATEMENT
- -------------------------
The statements above that are not historical information are 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 we believe that our
expectations regarding future events are based on reasonable assumptions within
the bounds of our knowledge of our business, we can give no assurance that our
goals will be achieved or that our expectations regarding future developments
will be realized. Important factors that could cause actual results to differ
materially from those in the forward-looking statements herein include:
o renewal of the coal slurry pipeline transportation contract under
reasonable terms;
o the impact of a potential impairment charge related to Black Mesa.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
99.1 Northern Border Partners, L.P. press release dated
November 2, 2005.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NORTHERN BORDER PARTNERS, L.P.
Date: November 2, 2005 By: /s/ Jerry L. Peters
--------------------------------
Name: Jerry L. Peters
Title: Chief Financial and
Accounting Officer
EXHIBIT INDEX
Exhibit 99.1 -- Northern Border Partners, L.P. press release dated
November 2, 2005.