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NORTHERN BORDER PARTNERS, L.P. REPORTS 1997 NET INCOME OF $53.0 MILLION, OR $1.97 PER UNIT
FOR IMMEDIATE RELEASE: Thursday, January 29, 1998
HOUSTON -- Northern Border Partners, L.P. today reported 1997 net income of $53.0 million, or $1.97 per unit. The amounts compare to 1996 net income of $50.3 million, or $1.88 per unit. Net income for 1997 includes $3.3 million, or $0.12 per unit, related to amounts received by Northern Border Pipeline Company (Northern Border Pipeline) for vacating certain microwave frequency bands. Operating revenues were $198.6 million for 1997 and $201.9 million for 1996.
For the fourth quarter of 1997 Northern Border Partners, L.P. reported net income of $14.1 million, or $0.51 per unit. This compares to $11.8 million, or $0.44 per unit, for the fourth quarter of 1996. Net income for the period includes $1.3 million, or $0.05 per unit, related to amounts received by Northern Border Pipeline for vacating certain microwave frequency bands. Net income for the fourth quarter of 1997 also increased due to a return allowed on equity funds used during construction of The Chicago Project, an expansion and extension of Northern Border Pipeline into the Chicago area, as well as earnings from increased ownership in Black Mesa Pipeline.
Throughput volumes for 1997 averaged 1,770 million cubic feet per day (MMcf/d) versus 1,764 MMcf/d for 1996.
"We are very pleased with the strong performance from Northern Border Pipeline," said Larry L. DeRoin, chief executive officer of Northern Border Partners, L.P. "The Chicago Project, which will increase Northern Border Pipeline's capacity 42 percent, received all necessary Federal Energy Regulatory Commission approvals in 1997 and is now under construction with a targeted November 1998 in-service date. Construction is proceeding in sequence, so that it will not interfere with current levels of service, with the first new compressor station going through commissioning at this time and expected to undergo initial operating tests next week," DeRoin said. "Additionally, we are evaluating indications of interest received for a moderate expansion project which is targeted for a 2000 in-service date. 1997 was a milestone year for Northern Border Pipeline, as well as our Partnership."
As previously announced, the Partnership's regular quarterly cash distribution was increased to $0.575 from $0.55 per unit, or an annual cash distribution of $2.30 from $2.20 per unit, effective with the fourth quarter 1997 distribution, which is payable on February 13, 1998, to unitholders of record as of January 30, 1998. "The increase is attributed to continued progress on The Chicago Project," DeRoin added. "The Partnership reiterates its intention to increase the annual cash distribution to $2.40 per unit, from the current $2.30 per unit, by the fourth quarter of 1998."
Northern Border Partners, L.P. owns a 70 percent general partner interest in Northern Border Pipeline Company, which owns a 969-mile U.S. interstate pipeline system that transports about 20 percent of all Canadian natural gas produced in western Canada and the Williston Basin to major gas consuming markets in the United States and is currently expanding capacity and extending the pipeline 243 miles to the Chicago, Illinois area. The Partnership also owns 100% of Black Mesa Pipeline, a 273-mile coal-water slurry pipeline from Kayenta, Arizona to Laughlin, Nevada. The common units of Northern Border Partners, L.P. are listed on the New York Stock Exchange and trade under the symbol "NBP".
| Northern Border Partners, L.P.Financial Highlights(Unaudited: in millions except net income per unit) |
| Fourth Quarter | Year-to-Date |
| 1997 | 1996 | 1997 | 1996 |
| Operating Revenue | $ 51.1 | $ 43.2 | $198.6 | $201.9 |
| Net Income | $ 14.1 | $ 11.8 | $ 53.0 | $ 50.3 |
| Per Unit Net Income | $ .51 | $ .44 | $ 1.97 | $ 1.88 |
| Average Units Outstanding | 26.8 | 26.2 | 26.4 | 26.2 |
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| Consolidated Statement of Income *(Unaudited: in millions) |
| Fourth Quarter | Year-to-Date |
| 1997 | 1996 | 1997 | 1996 |
| Operating Revenue | $ 51.1 | $ 43.2 | $198.6 | $201.9 |
| Operating Expenses |
Operations and maintenance | 11.2 | 7.4 | 37.4 | 28.3 |
Depreciation and amortization | 10.3 | 6.3 | 40.2 | 47.0 |
| 4.8 | 5.6 | 22.8 | 24.4 |
| 26.3 | 19.3 | 100.4 | 99.7 |
| Operating Income | 24.8 | 23.9 | 98.2 | 102.2 |
| Interest expense | ( 9.5) | ( 8.0) | ( 34.5) | ( 33.1) |
| Other income | 4.8 | 0.9 | 11.6 | 3.3 |
| Minority interest | ( 6.0) | ( 5.0) | ( 22.3) | ( 22.1) |
| Net Income | $ 14.1 | $ 11.8 | $ 53.0 | $ 50.3 |
| * Black Mesa Pipeline and Williams Technologies, Inc. are included on a consolidated basis effective June 1997. Prior to this time Black Mesa Pipeline was accounted for on the equity method and included in Other income. |
| Operating Highlights(Unaudited) |
| Fourth Quarter | Year-to-Date |
| 1997 | 1996 | 1997 | 1996 |
| Northern Border Pipeline Company: |
| Gas Delivered (MMcf) | 161,585 | 163,301 | 633,280 | 633,908 |
| Average throughput (MMcf/d) | 1,794 | 1,814 | 1,770 | 1,764 |
| Financial Results (in millions): |
| $ 45.7 | $ 43.2 | $ 186.1 | $ 201.9 |
Depreciation & Amortization | $ 9.7 | $ 6.3 | $ 38.7 | $ 47.0 |
| $ 8.9 | $ 8.0 | $ 33.0 | $ 33.1 |
| $ 5.8 | $ 5.0 | $ 21.8 | $ 22.1 |
| $ 13.6 | $ 11.7 | $ 50.9 | $ 51.7 |
For additional information please contact:
A. H. Davis
(713) 853-6941
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