OMAHA, Neb.--(BUSINESS WIRE)--Feb. 15, 2006--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:
-- 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.
-- 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:
-- 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.
-- 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.
-- 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.
-- 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.
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 $0.376 per mcf. Changes in both the average system rate and the average contracted capacity resulted from reduced demand for pipeline capacity and tighter natural gas market price spreads between Alberta, Canada and the U.S. Midwest in the shoulder months. In addition, Northern Border Pipeline rates are based on the distance of the transportation path. As a result, the weighted average system rate varies due to changing transportation paths as well as discounting activity.
Northern Border Pipeline Company
Total System Revenue Summary
----------------------------------------------------------------------
Fourth Quarter Full Year
-------------------------------------------
2005 2004 2005 2004
----------------------------------------------------------------------
Percent Contracted (1) 101% 100% 97% 101%
Weighted Average System
Rate ($/mcf) $0.369 $0.375 $0.371 (2) $0.376
Total Revenue (Millions) $80.0 $82.7 $312.3 (2) $329.1
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.
The primary differences between the periods for the segment were:
-- 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.
-- 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.
-- 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.
-- 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 $0.8 million due to an adjustment in depreciation rates.
BUSINESS OUTLOOK
Interstate Natural Gas Pipeline Segment
-- We anticipate that 2006 demand for Northern Border Pipeline's
transportation capacity will be similar to 2005 demand based
on our expectations of Canadian natural gas supply and demand
for natural gas in the Midwestern U.S. However, the level of
discounting in 2006 may vary from 2005 depending upon current
market conditions.
Northern Border Pipeline Company
Total System Revenue Forecast
(Years Ended December 31)
----------------------------------------------------------------------
2004 2005 2006
----------------------------------------------
Actual Actual Forecast
----------------------------------------------------------------------
Percent Currently
Contracted (1) 101% 97% 73%
Percent Expected To Be
Contracted N/A N/A 97% - 101%
Weighted Average System
Rate ($/mcf) $0.376 $0.371 (2) $0.350- $0.380
Total Revenue (Millions) $329 $312 (2) $305 - $320
1. Daily average contracted capacity compared to design capacity of
2,374 mmcfd.
2. Amounts exclude revenue from sale of Enron bankruptcy claims.
-- 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.
-- 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.
-- 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
-- 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.
-- 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.
-- The Partnership expects continued strong commodity prices and
additional volume growth in the Williston Basin in 2006.
-- 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
-- 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 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 1, 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.
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:
-- the impact of unsold capacity on Northern Border Pipeline
being greater or less than expected;
-- the ability to market pipeline capacity on favorable terms,
which is affected by:
-- future demand for and prices of natural gas;
-- competitive conditions in the overall natural gas and
electricity markets;
-- availability of supplies of Canadian and United States
natural gas;
-- availability of additional storage capacity; weather
conditions; and
-- competitive developments by Canadian and U.S. natural gas
transmission peers;
-- final orders by the FERC which adversely impact the requested
changes in Northern Border Pipeline's November 2005 rate case;
-- performance of contractual obligations by the shippers;
-- political and regulatory developments that impact FERC,
proceedings involving interstate pipelines and the interstate
pipelines' success in sustaining their positions in such
proceedings;
-- the ability to recover operating costs, costs of property,
plant and equipment and regulatory assets in our rates;
-- 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.
Natural Gas Gathering and Processing Segment:
-- 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;
-- prices of natural gas and natural gas liquids;
-- the composition and quality of the natural gas we gather and
process in our plants;
-- 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;
-- the efficiency of our plants in processing natural gas and
extracting natural gas liquids.
Coal Slurry Pipeline Segment:
-- renewal of the coal slurry pipeline transportation contract
under reasonable terms;
-- the impact of a potential impairment charge.
General:
-- 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;
-- regulatory actions and receipt of expected regulatory
clearances;
-- actions by rating agencies;
-- the ability to control operating costs;
-- conditions in the capital markets and the ability to access
the capital markets;
-- 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
-- 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 natural gas pipelines and is engaged in the gathering and processing of natural gas. More information may be found at http://www.northernborderpartners.com.
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 Fourth Quarter Year to Date
Income
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
-------- -------- -------- --------
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
======== ======== ======== ========
EBITDA (1) $20.9 $15.6 $83.8 $59.7
======== ======== ======== ========
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
-------- -------- -------- --------
Net Income $16.6 $11.8 $67.6 $44.5
======== ======== ======== ========
Northern Border Partners, L.P.
Summary Segment Information
---------------------------
(Unaudited)
Fourth Quarter Year to Date
2005 2004 2005 2004
-------- -------- -------- --------
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
-------- -------- -------- --------
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)
-------- -------- -------- --------
Net Income $0.3 $0.6 $3.9 $3.1
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CONTACT: Northern Border Partners, L.P.
Media Contact:
Beth Jensen, 402-492-3400
or
Investor Contacts:
Ellen Konsdorf or Jan Pelzer, 877-208-7318
SOURCE: Northern Border Partners, L.P