Exhibit 99.1
[NORTHERN BORDER PARTNERS, L.P.]
News 13710 FNB Parkway
Release Omaha, NE 68154-5200
For Further Information
Contact:
Media Contact:
Beth Jensen
(402) 492-3400
Investor Contacts:
Ellen Konsdorf
Jan Pelzer
(877) 208-7318
NORTHERN BORDER PARTNERS, L.P.
REPORTS FOURTH QUARTER AND
YEAR END 2005 RESULTS
FOR IMMEDIATE RELEASE: Wednesday, February 15, 2006
OMAHA -- Northern Border Partners, L.P. (NYSE: NBP) today reported
fourth quarter 2005 net income of $35.9 million or $0.72 per unit compared with
net income of $40.1 million or $0.80 per unit for fourth quarter 2004. For the
full year 2005, Northern Border Partners reported net income of $147.0 million,
or $2.93 per unit, compared with $144.7 million, or $2.89 per unit for the same
period in 2004. Cash flow as measured by earnings before interest, taxes,
depreciation and amortization (EBITDA) was $94.0 million for fourth quarter 2005
down from $100.4 million in the fourth quarter of 2004. EBITDA for the full year
2005 was $372.0 million compared with $366.9 million for the same period one
year ago. Distributable cash flow for 2005 was $191.4 million or $3.88 per unit
compared to $203.8 million or $4.15 per unit in 2004.
"Our 2005 earnings were slightly better than our previous expectations
and were the highest in the history of Northern Border Partners," said Bill
Cordes, chief executive officer of Northern Border Partners. "Our gathering and
processing segment continues to perform well, reporting record net income for
the year, due primarily to higher prices and higher volumes in the Williston
Basin for natural gas and natural gas liquids. The interstate natural gas
pipeline segment's earnings were better than our earlier expectations, but they
are lower than last year due to unsold capacity and capacity sold at a discount
on Northern Border Pipeline."
FOURTH QUARTER 2005 HIGHLIGHTS
Fourth quarter 2005 results compared to 2004 included:
o Increased operating margin of $8.0 million from the Partnership's
gathering and processing operations in the Williston Basin. Gathered
and processed volumes increased by 12 percent and the average price
realized for natural gas increased by 19 percent while the average
price realized for natural gas liquids increased by 37 percent.
o Operating and maintenance expenses increased by $9.9 million primarily
as a result of reversals of prior accruals related to Enron Corp.
which reduced 2004 expenses.
FULL YEAR 2005 HIGHLIGHTS
Comparison of full-year 2005 vs. 2004 included:
o Operating revenue from interstate pipelines was lower on a year over
year basis. An increase in revenue of $9.4 million on Northern Border
Pipeline as the result of the sale of its bankruptcy claims against
Enron was offset by lower operating revenue on the pipeline of $16.2
million related to uncontracted and discounted capacity.
o Increased operating margins of $30.2 million from the Partnership's
gathering and processing operations due primarily to higher prices and
higher volumes in the Williston Basin for natural gas and natural gas
liquids. This was partially offset by lower volumes gathered and
gathering rates in the Powder River.
o Equity earnings from investments increased 38 percent to $24.8 million
in 2005 from $18.0 million in 2004 due to the settlement of our
preferred A shares with Bighorn Gas Gathering and improved results
from our gathering and processing joint ventures interests.
o Operations and maintenance expenses for Northern Border Partners were
higher on a year over year basis. In 2004, operations and maintenance
expense was lower as a result of reversals of prior years' accruals
for Enron-related items totaling $11.1 million. In addition, 2004
operations and maintenance expense was reduced by a $3.3 million gain
on the sale of non-strategic assets in the Powder River Basin.
INTERSTATE NATURAL GAS PIPELINE SEGMENT
The interstate natural gas pipeline segment contributed net income of
$123.6 million for full year 2005, compared with $134.6 million in 2004.
2
Operating revenue for the segment includes a decrease at Northern Border
Pipeline of $2.7 million in fourth quarter 2005 and $16.8 million for the full
year, related primarily to capacity on the pipeline that went unsold or was sold
at discounted rates. The full year 2005 reduction was partially offset by a $9.4
million recovery from the sale of the pipeline's bankruptcy claims against Enron
and Enron North America in the third quarter.
Average daily throughput for the interstate natural gas pipeline segment
was essentially flat year over year at 3,204 million cubic feet per day (mmcfd)
in 2005 compared with 3,166 mmcfd in 2004, including a fourth quarter decline
for Northern Border Pipeline and a fourth quarter increase for Midwestern Gas
Transmission.
As shown in the table below, Northern Border Pipeline's average daily
contracted firm capacity for 2005 declined by 4 percent from 2004. The
pipeline's weighted average system rate for firm demand for 2005 was $0.371 per
mcf, 1 percent below the 2004 average rate of $0.376 per mcf. Changes in both
the average system rate and the average contracted capacity resulted from
reduced demand for pipeline capacity and tighter natural gas market price
spreads between Alberta, Canada and the U. S. Midwest in the shoulder months. In
addition, Northern Border Pipeline rates are based on the distance of the
transportation path. As a result, the weighted average system rate varies due to
changing transportation paths as well as discounting activity.
NORTHERN BORDER PIPELINE COMPANY
TOTAL SYSTEM REVENUE SUMMARY
<Table>
<Caption>
FOURTH QUARTER FULL YEAR
--------------------- -----------------------
2005 2004 2005 2004
- ------------------------------------------------------------------------------------------------
PERCENT CONTRACTED(1) 101% 100% 97% 101%
WEIGHTED AVERAGE SYSTEM RATE ($/MCF) $0.369 $0.375 $0.371(2) $0.376
TOTAL REVENUE (MILLIONS) $80.0 $82.7 $312.3(2) $329.1
</Table>
1. Daily average contracted capacity compared to a design capacity of 2,374
mmcfd.
2. Amounts exclude revenue from sale of Enron bankruptcy claims.
NATURAL GAS GATHERING AND PROCESSING SEGMENT
Net income from the natural gas gathering and processing segment was $16.6
million in the fourth quarter 2005 compared to $11.8 million in fourth quarter
2004. Full year net income was $67.6 million, an increase of 52 percent or $23.1
million over 2004. The Bear Paw/Crestone midstream assets have experienced four
consecutive years of growth since their purchase by Northern Border Partners.
3
The primary differences between the periods for the segment were:
o Gathering and processing volumes in the Williston Basin were 64 mmcfd
in 2005 compared with 55 mmcfd in 2004, a 16 percent increase,
primarily attributable to additional well connects. Bear Paw's
Williston Basin operations connected 114 wells during 2005, which set
a well-connect record in the basin for Bear Paw since the Partnership
purchased this entity in 2001.
o Prices realized for natural gas and natural gas liquids increased.
Natural gas prices increased 44 percent from $4.76 per million British
thermal units (mmBtu) in 2004 to $6.87 per mmBtu in 2005, net of
hedging. The average price received for natural gas liquids climbed 70
percent, from $0.53 per gallon in 2004 to $0.92 per gallon in 2005,
net of hedging.
o Volumes on the Partnership's wholly-owned gathering systems in the
Powder River Basin declined by approximately 9 percent, from
approximately 206 mmcfd in 2004 to approximately 187 mmcfd in 2005,
due to system production declines and diversion of a producer's volume
to its own gathering system.
o Equity earnings increased by $6.1 million due to increased volumes and
transportation rates from our joint venture pipelines, as well as an
increase of $2.7 million over 2004, as a result of a settlement of
Preferred A shares in Bighorn Gas Gathering.
COAL SLURRY PIPELINE SEGMENT
On December 31, 2005, Black Mesa Pipeline's transportation contract with
the coal supplier of the Mohave Generating Station expired and our coal slurry
pipeline operations were temporarily shut down as expected. We incurred
temporary shut down costs of $0.7 million in the fourth quarter which were
reflected in the segment's operation and maintenance expense. Net income for the
coal slurry pipeline segment was $3.9 million for full year 2005, up $0.8
million due to an adjustment in depreciation rates.
BUSINESS OUTLOOK
INTERSTATE NATURAL GAS PIPELINE SEGMENT
o We anticipate that 2006 demand for Northern Border Pipeline's
transportation capacity will be similar to 2005 demand based on our
expectations of Canadian natural gas supply
4
and demand for natural gas in the Midwestern U. S. However, the level
of discounting in 2006 may vary from 2005 depending upon current
market conditions.
NORTHERN BORDER PIPELINE COMPANY
TOTAL SYSTEM REVENUE FORECAST
(YEARS ENDED DECEMBER 31)
<Table>
<Caption>
2004 2005 2006
------------------------------------------
ACTUAL ACTUAL FORECAST
- ----------------------------------------------------------------------------------
PERCENT CURRENTLY CONTRACTED(1) 101% 97% 73%
PERCENT EXPECTED TO BE CONTRACTED N/A N/A 97% - 101%
WEIGHTED AVERAGE SYSTEM RATE ($/MCF) $0.376 $0.371(2) $0.350- $0.380
TOTAL REVENUE (MILLIONS) $329 $312(2) $305 - $320
</Table>
1. Daily average contracted capacity compared to design capacity of
2,374 mmcfd.
2. Amounts exclude revenue from sale of Enron bankruptcy claims.
o On November 1, 2005 as required by the provisions of the settlement of
Northern Border Pipeline's 1999 rate case, the pipeline filed a new
rate case with the Federal Energy Regulatory Commission (FERC). In
December 2005, the FERC issued an order that identified the issues
raised in the proceeding and accepted the proposed rates but suspended
their effectiveness until May 1, 2006, at which time the new rates
will be collected subject to refund until final resolution of the rate
case. A procedural schedule was established setting a hearing
commencement date of October 4, 2006. An initial decision is scheduled
for February 2007, unless resolved earlier with a settlement between
FERC staff, Northern Border Pipeline and a majority of the customers
and subsequently approved by the Commission. In the meantime,
increased revenues from the new rates will be reserved, thereby
resulting in minimal impact to Northern Border Pipeline's financial
results.
o Northern Border Pipeline's Chicago III Expansion Project is expected
to go into service in April 2006. The Chicago III Expansion Project
will increase Northern Border Pipeline's transportation capacity 130
mmcfd to 974 mmcfd from Harper, Iowa to the Chicago market area.
Midwestern Gas Transmission's Eastern Extension Project's application
for a certificate of public convenience and necessity from the FERC is
pending. Since the certificate has not yet been received, the proposed
in-service date of November 2006 may be delayed. The Eastern Extension
Project will extend Midwestern Gas Transmission's transportation
service 31 miles into Tennessee.
5
o On February 7, 2006, Guardian Pipeline, L.L.C. announced that it had
signed precedent agreements with two major Wisconsin utility companies
for an expansion of its existing pipeline system in eastern Wisconsin.
The proposed project will expand and extend Guardian 106 miles from
its current terminus near Ixonia to the Green Bay area. The expansion
will bring an additional 537,200 dekatherms per day of capacity to the
area. Capital costs are estimated to range between $200 million and
$250 million and pending all necessary approvals, construction could
begin in early 2008. Viking Gas Transmission Company, a subsidiary of
Northern Border Partners, owns a one-third interest in Guardian.
NATURAL GAS GATHERING AND PROCESSING SEGMENT
o Bear Paw Energy receives a significant portion of its revenue from the
sale of commodities in exchange for gathering and processing services.
Therefore, the segment's results are exposed to market risk due to its
sensitivity to natural gas and natural gas liquids prices. Bear Paw
Energy utilizes financial instruments to hedge commodity price risk.
For 2006, approximately 47 percent and 24 percent of its projected
equity natural gas and natural gas liquids volumes, respectively, are
hedged.
o Approximately $28 million of growth capital expenditures are
anticipated for the segment in 2006. Williston Basin expansions and
optimization projects are projected to be $15 million.
o The Partnership expects continued strong commodity prices and
additional volume growth in the Williston Basin in 2006.
o For 2006, volumes through our 100 percent owned assets in the Powder
River Basin are expected to continue to decline between 5 and 10
percent compared to 2005 averages. Volumes on the joint venture
pipelines are expected to increase by approximately 5 percent above
2005 figures.
COAL SLURRY PIPELINE
o As expected, on December 31, 2005, our coal slurry pipeline operations
were temporarily shut down. Black Mesa Pipeline is working to resolve
coal slurry transportation issues and interested parties continue to
negotiate water and coal supply issues so that operations may resume
at the Mohave Generating Station in the future. If these issues are
6
resolved and the project receives a favorable Environmental Impact
Statement in a timely manner, Black Mesa Pipeline would be
reconstructed in 2008 and 2009 for a targeted in service date of 2010.
DISTRIBUTION DECLARATION
On January 20, 2006, the Partnership Policy Committee declared the
Partnership's quarterly cash distribution of $0.80 per unit for the fourth
quarter of 2005. The indicated annual rate is $3.20. The distribution is payable
February 14, 2006 to unitholders of record on January 31, 2006.
CONFERENCE CALL
Northern Border Partners will host a conference call on Wednesday February
15, 2006 at 12:30 p.m. Eastern Time to review fourth quarter and full year 2005
results. This call may be accessed via the Partnership's website at
http://www.northernborderpartners.com. The webcast will be available on the
Partnerships' website through March 15, 2006. The call in number for the live
conference call is 303-262-2050. An audio replay of the call will be available
through March 15, 2006 by dialing, toll free in the United States and Canada,
800-405-2236 and entering passcode 11051430.
NON-GAAP FINANCIAL MEASURES
The Partnership has disclosed in this press release EBITDA and DCF amounts
that are non-GAAP financial measures. Management believes EBITDA and DCF provide
useful information to investors as a measure of comparability to peer companies.
However, these calculations may vary from company to company, so the
Partnership's computations may not be comparable to those of other companies.
DCF is not necessarily the same as available cash as defined in the Partnership
Agreements. Management further uses EBITDA to compare the financial performance
of its segments and to internally manage those business segments. The three and
twelve months ended December 31, 2005 and 2004 reconciliations of EBITDA to net
income and EBITDA to cash flow from operating activities, and computations of
DCF are included in the financial information with this release. On a
consolidated basis, EBITDA is reconciled to cash flow from operating activities
determined under GAAP. For segment information of this press release, EBITDA is
reconciled to net income rather than to cash flow from operating activities,
since the Partnership does not determine segment cash flow from operating
activities due to its intercompany cash management activity.
7
FORWARD-LOOKING STATEMENT
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 believes that its
expectations regarding future events are based on reasonable assumptions, it can
give no assurance that its goals will be achieved. Important factors that could
cause actual results to differ materially from those in the forward-looking
statements herein include:
INTERSTATE NATURAL GAS PIPELINE SEGMENT:
o the impact of unsold capacity on Northern Border Pipeline being
greater or less than expected;
o the ability to market pipeline capacity on favorable terms, which is
affected by:
o future demand for and prices of natural gas;
o competitive conditions in the overall natural gas and electricity
markets;
o availability of supplies of Canadian and United States natural
gas;
o availability of additional storage capacity; weather conditions;
and
o competitive developments by Canadian and U.S. natural gas
transmission peers;
o final orders by the FERC which adversely impact the requested changes
in Northern Border Pipeline's November 2005 rate case;
o performance of contractual obligations by the shippers;
o political and regulatory developments that impact FERC, proceedings
involving interstate pipelines and the interstate pipelines' success
in sustaining their positions in such proceedings;
o the ability to recover operating costs, costs of property, plant and
equipment and regulatory assets in our rates;
o timely receipt of approval by FERC for construction and operation of
the Midwestern Gas Transmission Eastern Extension Project and required
regulatory clearances; our ability to acquire all necessary
rights-of-way and obtain agreements for interconnects in a timely
manner; our ability to promptly obtain all necessary materials and
supplies required for construction.
8
NATURAL GAS GATHERING AND PROCESSING SEGMENT:
o the rate of development, well performance, gas quality, and
competitive conditions in gas fields near our natural gas gathering
systems in the Powder River and Williston Basins and our investments
in the Powder River and Wind River Basins;
o prices of natural gas and natural gas liquids;
o the composition and quality of the natural gas we gather and process
in our plants;
o the impact on drilling and production by factors beyond our control,
including the demand for natural gas and refinery grade crude oil ;
producers' desire and ability to obtain necessary permits; reserve
performance; and capacity constraints on the pipelines that transport
natural gas, crude oil and natural gas liquids from the producing
areas and our facilities;
o the efficiency of our plants in processing natural gas and extracting
natural gas liquids.
COAL SLURRY PIPELINE SEGMENT:
o renewal of the coal slurry pipeline transportation contract under
reasonable terms;
o the impact of a potential impairment charge.
GENERAL:
o developments in the December 2, 2001, filing by Enron of a voluntary
petition for bankruptcy protection under Chapter 11 of the United
States Bankruptcy Code affecting our settled claims;
o regulatory actions and receipt of expected regulatory clearances;
o actions by rating agencies;
o the ability to control operating costs;
o conditions in the capital markets and the ability to access the
capital markets;
o the risk inherent in the use of information systems in our business,
implementation of new software and hardware, and the impact on the
timeliness of information for financial reporting; and
o acts of nature, sabotage, terrorism or other similar acts causing
damage to our facilities or our suppliers' or shippers' facilities.
Northern Border Partners, L.P. is a publicly traded partnership whose
purpose is to own, operate and acquire a diversified portfolio of energy assets.
The Partnership owns and manages
9
natural gas pipelines and is engaged in the gathering and processing of natural
gas. More information may be found at http://www.northernborderpartners.com.
##########
10
NORTHERN BORDER PARTNERS, L.P.
FINANCIAL HIGHLIGHTS
(Unaudited: In Millions Except Per Unit Amounts)
FOURTH QUARTER YEAR TO DATE
2005 2004 2005 2004
---------- ---------- ---------- ----------
Operating Revenue $ 185.7 $ 156.8 $ 678.6 $ 590.4
Net Income $ 35.9 $ 40.1 $ 147.0 $ 144.7
Per Unit Net Income $ 0.72 $ 0.80 $ 2.93 $ 2.89
Cash Flows From Operating Activities $ 64.7 $ 52.7 $ 267.4 $ 244.6
EBITDA (1) $ 94.0 $ 100.4 $ 372.0 $ 366.9
Distributable Cash Flow $ 43.0 $ 54.3 $ 191.4 $ 203.8
Distributable Cash Flow Per Unit $ 0.87 $ 1.11 $ 3.88 $ 4.15
CONSOLIDATED STATEMENT OF INCOME
(Unaudited: In Millions Except Per Unit Amounts)
FOURTH QUARTER YEAR TO DATE
2005 2004 2005 2004
---------- ---------- ---------- ----------
Operating Revenue $ 185.7 $ 156.8 $ 678.6 $ 590.4
---------- ---------- ---------- ----------
Operating Expenses
Product Purchases 54.0 32.2 167.3 103.2
Operations and Maintenance 34.5 24.6 129.9 111.2
Depreciation and Amortization 22.8 22.3 86.0 86.4
Taxes Other Than Income 9.5 8.8 38.6 36.2
---------- ---------- ---------- ----------
Total Operating Expenses 120.8 87.9 421.8 337.0
---------- ---------- ---------- ----------
Operating Income 64.9 68.9 256.8 253.4
Interest Expense, Net (22.3) (20.6) (86.9) (77.0)
Other Income (Expense), Net 0.6 0.2 3.3 1.6
Equity Earnings from Investments 5.5 4.1 24.8 18.0
Minority Interest (11.0) (13.8) (45.7) (50.0)
---------- ---------- ---------- ----------
Income From Continuing Operations Before Income Taxes 37.7 38.8 152.3 146.0
Income Taxes 2.0 1.0 5.8 5.1
---------- ---------- ---------- ----------
Income From Continuing Operations 35.7 37.8 146.5 140.9
Discontinued Operations, net of tax 0.2 2.3 0.5 3.8
---------- ---------- ---------- ----------
Net Income $ 35.9 $ 40.1 $ 147.0 $ 144.7
========== ========== ========== ==========
Per Unit Income From Continuing Operations $ 0.71 $ 0.76 $ 2.92 $ 2.81
========== ========== ========== ==========
Per Unit Net Income $ 0.72 $ 0.80 $ 2.93 $ 2.89
========== ========== ========== ==========
Average Units Outstanding 46.4 46.4 46.4 46.4
========== ========== ========== ==========
FOOTNOTES TO FINANCIAL TABLES
(1) EBITDA is computed from net income plus minority interest; interest expense,
net; income taxes; and depreciation and amortization less equity AFUDC.
(2) 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.
(3) Volume information presented in operating results includes 100% of the
volumes for joint ventures and equity investments as well as for wholly-owned
subsidiaries.
NORTHERN BORDER PARTNERS, L.P.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited: In Millions Except Per Unit Amounts)
RECONCILIATION OF EBITDA TO NET INCOME FOURTH QUARTER YEAR TO DATE
2005 2004 2005 2004
---------- ---------- ---------- ----------
EBITDA (1) $ 94.0 $ 100.4 $ 372.0 $ 366.9
Minority Interest (11.0) (13.8) (45.7) (50.0)
Interest Expense, Net (22.3) (20.6) (86.9) (77.0)
Depreciation and Amortization (including amounts in Other
Income, Net and Discontinued Operations) (23.1) (22.5) (86.4) (87.2)
Income taxes (including amounts in Discontinued Operations) (2.0) (3.4) (6.5) (8.1)
Equity AFUDC (included in Other Income, Net) 0.3 0.0 0.5 0.1
---------- ---------- ---------- ----------
Net Income $ 35.9 $ 40.1 $ 147.0 $ 144.7
========== ========== ========== ==========
RECONCILIATION OF EBITDA TO CASH FLOWS FROM OPERATING ACTIVITIES
EBITDA (1) $ 94.0 $ 100.4 $ 372.0 $ 366.9
Interest Expense, Net (22.3) (20.6) (86.9) (77.0)
Changes in Current Assets and Liabilities (1.9) (21.8) 3.7 (19.3)
Equity Earnings from Investments (5.5) (4.1) (24.8) (18.0)
Distributions Received from Equity Investments 4.4 3.4 16.5 12.5
Changes in Reserves and Deferred Credits 0.1 0.4 (0.3) (2.7)
Gain on Sale of Assets 0.0 (3.2) 0.0 (6.6)
Other (4.1) (1.8) (12.8) (11.2)
---------- ---------- ---------- ----------
Cash Flows From Operating Activities $ 64.7 $ 52.7 $ 267.4 $ 244.6
========== ========== ========== ==========
RECONCILIATION OF EBITDA TO DISTRIBUTABLE CASH FLOW
EBITDA (1) $ 94.0 $ 100.4 $ 372.0 $ 366.9
Interest Expense, Net (22.3) (20.6) (86.9) (77.0)
Maintenance Capital (10.5) (8.2) (29.4) (21.0)
Distributions to Minority Interest (17.1) (14.9) (60.9) (61.7)
Other (1.1) (2.4) (3.4) (3.4)
---------- ---------- ---------- ----------
Distributable Cash Flow $ 43.0 $ 54.3 $ 191.4 $ 203.8
========== ========== ========== ==========
Distributable Cash Flow Per Unit $ 0.87 $ 1.11 $ 3.88 $ 4.15
========== ========== ========== ==========
NORTHERN BORDER PARTNERS, L.P.
OTHER FINANCIAL INFORMATION
(Unaudited: In Millions)
DECEMBER 31, DECEMBER 31,
2005 2004
--------------- ---------------
SUMMARY BALANCE SHEET DATA
Total assets by segment:
Interstate Natural Gas Pipeline $ 1,889.0 $ 1,904.7
Natural Gas Gathering and Processing 590.5 570.1
Coal Slurry Pipeline 16.4 18.3
Other (assets not allocated to segments) 28.0 21.6
--------------- ---------------
Total consolidated assets $ 2,523.9 $ 2,514.7
=============== ===============
Consolidated capitalization:
Long-term debt, including current maturities $ 1,355.0 $ 1,330.4
Partners' capital 767.6 780.2
Minority interests in partners' equity 274.5 290.1
Accumulated other comprehensive income (2.0) 9.2
--------------- ---------------
Total capitalization 2,395.1 2,409.9
Consolidated other current liabilities and
reserves and deferred credits 128.8 104.8
--------------- ---------------
Total liabilities and capitalization $ 2,523.9 $ 2,514.7
=============== ===============
FOURTH QUARTER YEAR TO DATE
2005 2004 2005 2004
--------------- --------------- --------------- ---------------
CAPITAL EXPENDITURES AND EQUITY INVESTMENTS (2)
Maintenance -
Interstate Natural Gas Pipeline $ 8.9 $ 6.8 $ 23.4 $ 15.9
Natural Gas Gathering and Processing 0.8 1.4 2.3 3.4
Coal Slurry Pipeline 0.0 0.0 0.0 1.6
Other 0.8 0.0 3.7 0.1
--------------- --------------- --------------- ---------------
10.5 8.2 29.4 21.0
--------------- --------------- --------------- ---------------
Growth -
Interstate Natural Gas Pipeline 8.1 0.2 16.3 0.3
Natural Gas Gathering and Processing 3.4 17.1 22.8 22.1
Coal Slurry Pipeline 0.0 0.0 0.0 0.0
--------------- --------------- --------------- ---------------
11.5 17.3 39.1 22.4
--------------- --------------- --------------- ---------------
Total $ 22.0 $ 25.5 $ 68.5 $ 43.4
=============== =============== =============== ===============
NORTHERN BORDER PARTNERS, L.P.
SUMMARY SEGMENT INFORMATION
(Unaudited)
FOURTH QUARTER YEAR TO DATE
2005 2004 2005 2004
------------ ------------ ------------ ------------
INTERSTATE NATURAL GAS PIPELINE SEGMENT
Operating Results (3):
Gas Delivered (mmcf) 284,958 283,129 1,141,902 1,130,634
Average Throughput (mmcfd) 3,166 3,159 3,204 3,166
Financial Results (In Millions):
Operating Revenue $ 96.3 $ 96.5 $ 378.7 $ 383.6
------------ ------------ ------------ ------------
Operating Expenses
Operations and Maintenance 16.5 9.2 62.0 52.7
Depreciation and Amortization 17.3 17.1 67.2 67.1
Taxes Other Than Income 9.0 7.9 35.3 32.8
------------ ------------ ------------ ------------
Total Operating Expenses 42.8 34.2 164.5 152.6
------------ ------------ ------------ ------------
Operating Income 53.5 62.3 214.2 231.0
Interest Expense, Net (11.3) (11.8) (45.0) (43.9)
Other Income, Net 0.3 0.3 2.3 0.7
Equity Earnings from Investments 1.1 0.6 2.3 1.6
------------ ------------ ------------ ------------
Income Before Income Taxes 43.6 51.4 173.8 189.4
Income Taxes 1.9 1.0 4.5 4.8
------------ ------------ ------------ ------------
Net Income 41.7 50.4 169.3 184.6
Net income to Minority Interest (11.0) (13.8) (45.7) (50.0)
------------ ------------ ------------ ------------
Net Income to Northern Border Partners $ 30.7 $ 36.6 $ 123.6 $ 134.6
============ ============ ============ ============
EBITDA (1) $ 72.2 $ 80.4 $ 285.9 $ 300.7
============ ============ ============ ============
Distributions from Northern Border Pipeline:
Paid to Northern Border Partners $ 39.9 $ 34.7 $ 142.0 $ 143.9
Paid to Minority Interest $ 17.1 $ 14.9 $ 60.9 $ 61.7
------------ ------------ ------------ ------------
Total Distributions $ 57.0 $ 49.6 $ 202.9 $ 205.6
============ ============ ============ ============
RECONCILIATION OF EBITDA TO NET INCOME
EBITDA (1) $ 72.2 $ 80.4 $ 285.9 $ 300.7
Minority Interest (11.0) (13.8) (45.7) (50.0)
Interest Expense, Net (11.3) (11.8) (45.0) (43.9)
Depreciation and Amortization (17.6) (17.2) (67.6) (67.5)
Income taxes (1.9) (1.0) (4.5) (4.8)
Equity AFUDC (included in Other Income (Expense)) 0.3 0.0 0.5 0.1
------------ ------------ ------------ ------------
Net Income $ 30.7 $ 36.6 $ 123.6 $ 134.6
============ ============ ============ ============
NORTHERN BORDER PARTNERS, L.P.
SUMMARY SEGMENT INFORMATION
(Unaudited)
FOURTH QUARTER YEAR TO DATE
2005 2004 2005 2004
---------- ---------- ---------- ----------
NATURAL GAS GATHERING AND PROCESSING SEGMENT
Operating Results (3):
Volumes (mmcfd):
Gathering 1,079 1,048 1,044 1,022
Processing 65 58 64 55
Financial Results (In Millions):
Operating Revenue $ 83.2 $ 54.6 $ 275.3 $ 184.7
---------- ---------- ---------- ----------
Operating Expenses
Product Purchases 54.0 32.2 167.3 103.2
Operations and Maintenance 12.4 9.6 44.9 35.9
Depreciation and Amortization 4.3 3.7 16.0 14.8
Taxes Other Than Income 0.4 0.7 2.4 2.5
---------- ---------- ---------- ----------
Total Operating Expenses 71.1 46.2 230.6 156.4
---------- ---------- ---------- ----------
Operating Income 12.1 8.4 44.7 28.3
Interest Expense, Net 0.0 (0.1) (0.2) (0.4)
Other Income (Expense) 0.1 0.0 0.6 0.2
Equity Earnings from Investments 4.4 3.5 22.5 16.4
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Income Before Income Taxes 16.6 11.8 67.6 44.5
Income Taxes 0.0 0.0 0.0 0.0
---------- ---------- ---------- ----------
Net Income $ 16.6 $ 11.8 $ 67.6 $ 44.5
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EBITDA (1) $ 20.9 $ 15.6 $ 83.8 $ 59.7
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Distributions Received from Equity Investments $ 4.4 $ 3.4 $ 16.5 $ 12.5
========== ========== ========== ==========
RECONCILIATION OF EBITDA TO NET INCOME
EBITDA (1) $ 20.9 $ 15.6 $ 83.8 $ 59.7
Interest Expense, Net 0.0 (0.1) (0.2) (0.4)
Depreciation and Amortization (4.3) (3.7) (16.0) (14.8)
Income taxes 0.0 0.0 0.0 0.0
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Net Income $ 16.6 $ 11.8 $ 67.6 $ 44.5
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NORTHERN BORDER PARTNERS, L.P.
SUMMARY SEGMENT INFORMATION
(Unaudited)
FOURTH QUARTER YEAR TO DATE
2005 2004 2005 2004
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COAL SLURRY PIPELINE SEGMENT
Operating Results:
Tons of Coal Shipped (In Thousands) 1,027 1,306 4,561 4,652
Financial Results (In Millions):
Operating Revenue $ 6.2 $ 5.7 $ 24.6 $ 22.0
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Operating Expenses
Operations and Maintenance 4.4 3.4 16.0 13.3
Depreciation and Amortization 1.1 1.5 2.6 4.5
Taxes Other Than Income 0.2 0.2 0.8 0.8
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Total Operating Expenses 5.7 5.1 19.4 18.6
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Operating Income 0.5 0.6 5.2 3.4
Other Income 0.0 0.0 (0.1) 0.0
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Income Before Income Taxes 0.5 0.6 5.1 3.4
Income Taxes 0.2 0.0 1.2 0.3
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Net Income $ 0.3 $ 0.6 $ 3.9 $ 3.1
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EBITDA (1) $ 1.6 $ 2.1 $ 7.7 $ 7.9
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RECONCILIATION OF EBITDA TO NET INCOME
EBITDA (1) $ 1.6 $ 2.1 $ 7.7 $ 7.9
Depreciation and Amortization (1.1) (1.5) (2.6) (4.5)
Income taxes (0.2) 0.0 (1.2) (0.3)
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Net Income $ 0.3 $ 0.6 $ 3.9 $ 3.1
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