INVESTMENTS IN UNCONSOLIDATED AFFILIATES

3 Months Ended

Mar. 31, 2014

INVESTMENTS IN UNCONSOLIDATED AFFILIATES

INVESTMENTS IN UNCONSOLIDATED AFFILIATES

NOTE 3        INVESTMENTS IN UNCONSOLIDATED AFFILIATES

Northern Border and Great Lakes are regulated by FERC and are operated by TransCanada. The Partnership uses the equity method of accounting for its interests in its equity investees.

	Ownership	Equity Earnings from Unconsolidated Affiliates		Investments inUnconsolidated Affiliates
	Interest at	Three months
(unaudited)	March 31,	ended March 31,		March 31,	December 31,
(millions of dollars)	2014	2014	2013	2014	2013
Northern Border(a)	50%	23	16	525	523
Great Lakes	46.45%	10	2	681	672
		33	18	1,206	1,195

(a)                Equity earnings from Northern Border is net of the 12-year amortization of a $10 million transaction fee paid to the operator of Northern Border at the time of the Partnership’s additional 20 percent interest acquisition in April 2006.

Northern Border

The Partnership recorded no undistributed earnings from Northern Border for the three months ended March 31, 2014 and 2013.

The summarized financial information for Northern Border is as follows:

(unaudited)
(millions of dollars)	March 31, 2014	December 31, 2013
ASSETS
Cash and cash equivalents	40	27
Other current assets	44	34
Plant, property and equipment, net	1,191	1,197
Other assets	32	33
	1,307	1,291
LIABILITIES AND PARTNERS’ EQUITY
Current liabilities	62	51
Deferred credits and other	20	19
Long-term debt, including current maturities	411	411
Partners’ equity
Partners’ capital	816	812
Accumulated other comprehensive loss	(2)	(2)
	1,307	1,291

	Three months ended
(unaudited)	March 31,
(millions of dollars)	2014	2013
Transmission revenues	86	72
Operating expenses	(18)	(19)
Depreciation	(15)	(15)
Financial charges and other	(6)	(5)
Net income	47	33

Great Lakes

The Partnership made an equity contribution to Great Lakes of $4 million in the first quarter of 2014. This amount represents the Partnership’s 46.45 percent share of a $9 million cash call from Great Lakes to make a scheduled debt repayment.

The Partnership recorded no undistributed earnings from Great Lakes for the three months ended March 31, 2014 and 2013.

The summarized financial information for Great Lakes is as follows:

(unaudited)
(millions of dollars)	March 31, 2014	December 31, 2013
ASSETS
Current assets	69	52
Plant, property and equipment, net	764	771
	833	823
LIABILITIES AND PARTNERS’ EQUITY
Current liabilities	28	28
Long-term debt, including current maturities	326	335
Partners’ equity	479	460
	833	823

	Three months ended
(unaudited)	March 31,
(millions of dollars)	2014	2013
Transmission revenues	48	35
Operating expenses	(12)	(15)
Depreciation	(7)	(8)
Financial charges and other	(7)	(7)
Net income	22	5