EXHIBIT 99.1
(NORTHERN BORDER News
PARTNERS, L.P. LOGO) 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 INCREASED
FIRST QUARTER RESULTS
FOR IMMEDIATE RELEASE: Tuesday, April 22, 2003
OMAHA - Northern Border Partners, L.P. (NYSE - NBP) reports first
quarter 2003 net income of $32.7 million or $0.69 per unit compared to $28.0
million or $0.62 per unit in the first quarter 2002. Earnings before interest,
taxes, depreciation and amortization (EBITDA) increased from $79.0 million in
the first quarter of 2002 to $86.9 million in the first quarter 2003.
First quarter 2003 net income reflects a charge of approximately
$600,000 or $0.01 per unit for the cumulative effect of the Partnership's
required implementation of Statement of Financial Accounting Standards (SFAS)
No. 143 "Accounting for Asset Retirement Obligations". SFAS No. 143 requires
entities to record on a present value basis, a liability for asset retirement
obligations, if the liability can be reasonably estimated.
First quarter 2003 earnings also includes $2.9 million ($0.07 per unit)
resulting from a retroactive cash distribution and special income allocation for
the prior year from the Partnership's interest in a Powder River Basin gathering
system. This distribution, determined in accordance with a joint venture
agreement, was based on the number of wells connected to the gathering system in
the preceding year. If certain targets are not met, Northern Border Partners
receives a disproportionate share of cash distributions.
Delivered volumes in the Partnership's interstate natural gas pipelines
segment increased during first quarter 2003 to 280 billion cubic feet (Bcf) from
226 Bcf for the first quarter of 2002. Average gathering volumes increased to
1,153 million cubic feet per day (MMcf/d) during the first quarter 2003 compared
to 995 MMcf/d for the first quarter 2002. Processing volumes
were 130 MMcf/d for the first quarter of 2003 compared to 126 MMcf/d for the
first quarter 2002.
"Overall earnings and cash flow were up for the quarter, compared to
the same time period a year ago," said Bill Cordes, chairman and chief executive
officer of Northern Border Partners. "The interstate pipelines' results include
Viking Gas Transmission for the first time following our acquisition of this
system early this year. Strong commodity prices and the Powder River Basin
special income allocation were the primary drivers for the gathering and
processing segment's higher results."
The Partnership reiterated that for the full year 2003, it expects
earnings per unit in the range of $2.55 to $2.65 per unit.
Northern Border Partners will host a conference call to review first
quarter 2003 results on Tuesday, April 22, 2003 at 10:00 a.m. Eastern time.
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 through June 30, 2003 on Northern Border Partners'
website.
A replay of the call will be available through April 29, 2003 by
dialing, toll free in the United States and Canada, 800-642-1687 and entering
the conference ID number 9543009.
The Partnership has disclosed EBITDA amounts in this press release.
These amounts are non-GAAP financial measures. Management believes EBITDA
provides useful information to investors as a measure of comparability to peer
companies. However, EBITDA calculations may vary slightly from company to
company, so the Partnership's computation of EBITDA may not be comparable to
other companies. Management further uses EBITDA to compare the financial
performance of its segments and to internally manage those business segments. On
a consolidated basis, EBITDA is reconciled to cash flows from operating
activities determined under GAAP. For segment information of this press release,
EBITDA is reconciled to net income rather than to cash flows from operating
activities, since the Partnership does not determine segment cash flows from
operating activities due to its inter-company cash management activity.
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 including Enron's announced intention to form PipeCo of
which Northern Plains and Pan Border would be a part; potential regulation under
Public Utilities Holding Company Act; 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)
FIRST QUARTER
2003 2002
-------- --------
Operating Revenue $ 141.3 $ 118.0
Net Income Before Cumulative Effect of Change in Accounting Principle $ 33.3 $ 28.0
Net Income $ 32.7 $ 28.0
Per Unit Net Income (before cumulative effect of change in accounting principle) $ 0.70 $ 0.62
Per Unit Net Income $ 0.69 $ 0.62
Cash Flows From Operating Activities $ 56.8 $ 56.6
EBITDA (1) $ 86.9 $ 79.0
CONSOLIDATED STATEMENT OF INCOME
(Unaudited: In Millions Except Net Income Per Unit)
FIRST QUARTER
2003 2002
-------- --------
Operating Revenue $ 141.3 $ 118.0
-------- --------
Operating Expenses
Product Purchases 21.1 10.7
Operations and Maintenance 31.2 24.9
Depreciation and Amortization 20.3 18.4
Taxes Other Than Income 9.6 7.5
-------- --------
Total Operating Expenses 82.2 61.5
-------- --------
Operating Income 59.1 56.5
Interest Expense, Net (20.5) (21.0)
Other Income (Expense) (2.0) 0.6
Equity Earnings from Investments 7.7 3.2
Minority Interest (11.0) (11.3)
-------- --------
Net Income Before Cumulative Effect of Change in Accounting Principle 33.3 28.0
Cumulative Effect of Change in Accounting Principle, net of tax (0.6) 0.0
-------- --------
Net Income $ 32.7 $ 28.0
======== ========
Per Unit Net Income (before cumulative effect of change in accounting principle) $ 0.70 $ 0.62
======== ========
Per Unit Net Income $ 0.69 $ 0.62
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Average Units Outstanding 43.8 41.6
======== ========
RECONCILIATION OF EBITDA (1) TO NET INCOME
EBITDA (1) $ 86.9 $ 79.0
Minority Interest (11.0) (11.3)
Interest Expense, Net (20.5) (21.0)
Depreciation and Amortization (20.3) (18.4)
Income taxes (included in Other Income (Expense)) (1.9) (0.3)
Equity AFUDC (included in Other Income (Expense)) 0.1 0.0
Cumulative Effect of Change in Accounting Principle, net of tax (0.6) 0.0
-------- --------
Net Income $ 32.7 $ 28.0
======== ========
RECONCILIATION OF EBITDA (1) TO CASH FLOWS FROM OPERATING ACTIVITIES
EBITDA (1) $ 86.9 $ 79.0
Interest Expense, Net (20.5) (21.0)
Changes in Current Assets and Liabilities 1.4 (1.0)
Equity Earnings from Investments (7.7) (3.2)
Distributions Received from Equity Investments 7.2 2.8
Changes in Reserves and Deferred Credits (9.4) (0.2)
Other (1.1) 0.2
-------- --------
Cash Flows From Operating Activities $ 56.8 $ 56.6
======== ========
NORTHERN BORDER PARTNERS, L.P.
OTHER FINANCIAL INFORMATION
(Unaudited: In Millions)
MARCH 31, DECEMBER 31,
2003 2002
-------- --------
SUMMARY BALANCE SHEET DATA
Total assets by segment:
Interstate Natural Gas Pipelines $2,012.9 $1,853.8
Natural Gas Gathering and Processing 832.9 823.9
Coal Slurry Pipeline 21.6 20.4
Other (assets not allocated to segments) 20.8 27.4
-------- --------
Total consolidated assets $2,888.2 $2,725.5
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Consolidated capitalization:
Long-term debt, including current maturities $1,553.9 $1,403.7
Partners' capital 931.5 936.5
Minority interests in partners' equity 241.3 243.0
Accumulated other comprehensive income 8.6 7.5
-------- --------
Total capitalization 2,735.3 2,590.7
Consolidated other current liabilities and reserves and deferred credits 152.9 134.8
-------- --------
Total liabilities and capitalization $2,888.2 $2,725.5
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FIRST QUARTER
2003 2002
-------- --------
CAPITAL EXPENDITURES AND EQUITY INVESTMENTS (2)
Maintenance -
Interstate Natural Gas Pipelines $ 1.7 $ 2.3
Natural Gas Gathering and Processing 0.6 1.0
Coal Slurry Pipeline 0.5 0.4
-------- --------
2.8 3.7
-------- --------
Growth -
Interstate Natural Gas Pipelines 121.0 1.1
Natural Gas Gathering and Processing 1.3 16.4
Coal Slurry Pipeline 0.0 0.0
-------- --------
122.3 17.5
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Total $ 125.1 $ 21.2
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(1) EBITDA is computed from (a) net income plus (b) the cumulative effect of
change in accounting principle; (c) minority interest; (d) interest
expense, net; (e) income taxes; and (f) depreciation and amortization less
(g) equity AFUDC.
(2) Interstate Natural Gas Pipelines' capital expenditures reflect the
Partnership's 70% ownership of Northern Border Pipeline. Management
classifies expenditures that are expected to generate additional revenues
or significant operating efficiency as growth capital expenditures and
equity investments. Any remaining capital expenditures are classified as
maintenance.
SUMMARY SEGMENT INFORMATION
(Unaudited)
FIRST QUARTER
2003 2002
---------- ----------
INTERSTATE NATURAL GAS PIPELINES SEGMENT
Operating Results:
Gas Delivered (MMcf) 280,175 226,290
Average Throughput (MMcf/d) 3,311 2,580
Financial Results (In Millions):
Operating Revenue $ 93.3 $ 82.2
---------- ----------
Operating Expenses
Operations and Maintenance 13.8 8.3
Depreciation and Amortization 16.5 15.0
Taxes Other Than Income 8.7 6.8
---------- ----------
Total Operating Expenses 39.0 30.1
---------- ----------
Operating Income 54.3 52.1
Interest Expense, Net (12.4) (13.0)
Other Income (Expense) (1.4) 0.6
Equity Earnings from Investments 0.4 0.0
---------- ----------
Net Income 40.9 39.7
Net income to Minority Interest (11.0) (11.3)
---------- ----------
Net Income to Northern Border Partners $ 29.9 $ 28.4
========== ==========
EBITDA (1) $ 71.4 $ 67.9
========== ==========
Distributions from Northern Border Pipeline:
Paid to Northern Border Partners $ 29.3 $ 27.4
Paid to Minority Interest $ 12.5 $ 11.8
---------- ----------
Total Distributions $ 41.8 $ 39.2
========== ==========
Note: Beginning in January 2003, the Interstate Natural Gas Pipelines segment information includes the
operating results for Viking Gas Transmission
RECONCILIATION OF EBITDA (1) TO NET INCOME
EBITDA (1) $ 71.4 $ 67.9
Minority Interest (11.0) (11.3)
Interest Expense, Net (12.4) (13.0)
Depreciation and Amortization (16.5) (15.0)
Income taxes (included in Other Income (Expense)) (1.7) (0.2)
Equity AFUDC (included in Other Income (Expense)) 0.1 0.0
---------- ----------
Net Income $ 29.9 $ 28.4
========== ==========
SUMMARY SEGMENT INFORMATION
(Unaudited)
FIRST QUARTER
2003 2002
-------- --------
NATURAL GAS GATHERING AND PROCESSING SEGMENT
Operating Results:
Volumes (MMcf/d):
Gathering 1,153 995
Processing 130 126
Financial Results (In Millions):
Operating Revenue $ 42.6 $ 30.6
-------- --------
Operating Expenses
Product Purchases 21.1 10.7
Operations and Maintenance 12.0 10.9
Depreciation and Amortization 3.4 3.0
Taxes Other Than Income 0.8 0.6
-------- --------
Total Operating Expenses 37.3 25.2
-------- --------
Operating Income 5.3 5.4
Interest Expense, Net (0.2) (0.2)
Other Income (Expense) (0.2) 0.0
Equity Earnings from Investments 7.3 3.2
-------- --------
Net Income Before Cumulative Effect of Change in Accounting Principle 12.2 8.4
Cumulative Effect of Change in Accounting Principle, net of tax (0.2) 0.0
-------- --------
Net Income $ 12.0 $ 8.4
======== ========
EBITDA (1) $ 15.8 $ 11.7
======== ========
Distributions Received from Equity Investments $ 7.2 $ 2.8
======== ========
RECONCILIATION OF EBITDA (1) TO NET INCOME
EBITDA (1) $ 15.8 $ 11.7
Interest Expense, Net (0.2) (0.2)
Depreciation and Amortization (3.4) (3.0)
Income taxes (included in Other Income (Expense)) 0.0 (0.1)
Cumulative Effect of Change in Accounting Principle, net of tax (0.2) 0.0
-------- --------
Net Income $ 12.0 $ 8.4
======== ========
SUMMARY SEGMENT INFORMATION
(Unaudited)
FIRST QUARTER
2003 2002
-------- --------
COAL SLURRY PIPELINE SEGMENT
Operating Results:
Tons of Coal Shipped (In Thousands) 1,129 949
Financial Results (In Millions):
Operating Revenue $ 5.4 $ 5.2
-------- --------
Operating Expenses
Operations and Maintenance 3.6 4.3
Depreciation and Amortization 0.4 0.4
Taxes Other Than Income 0.2 0.1
-------- --------
Total Operating Expenses 4.2 4.8
-------- --------
Operating Income 1.2 0.4
Other Expense (0.2) (0.1)
-------- --------
Net Income Before Cumulative Effect of Change in Accounting Principle 1.0 0.3
Cumulative Effect of Change in Accounting Principle, net of tax (0.4) 0.0
-------- --------
Net Income $ 0.6 $ 0.3
======== ========
EBITDA (1) $ 1.6 $ 0.8
======== ========
RECONCILIATION OF EBITDA (1) TO NET INCOME
EBITDA (1) $ 1.6 $ 0.8
Depreciation and Amortization (0.4) (0.4)
Income taxes (included in Other Expense) (0.2) (0.1)
Cumulative Effect of Change in Accounting Principle, net of tax (0.4) 0.0
-------- --------
Net Income $ 0.6 $ 0.3
======== ========