INVESTMENTS IN UNCONSOLIDATED AFFILIATES

9 Months Ended

Sep. 30, 2014

INVESTMENTS IN UNCONSOLIDATED AFFILIATES

INVESTMENTS IN UNCONSOLIDATED AFFILIATES

NOTE 4INVESTMENTS 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.

		Equity Earnings (Loss) from				Investments in
	Ownership	Unconsolidated Affiliates				Unconsolidated Affiliates
	Interest at	Three months		Nine Months
(unaudited)	September	ended September 30,		ended September 30,		September	December
	30,					30,	31,
(millions of dollars)	2014	2014	2013	2014	2013	2014	2013
Northern Border (a)	50%	14	17	53	48	508	523
Great Lakes	46.45%	1	(2)	13	-	666	672
		15	15	66	48	1,174	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 nine months ended September 30, 2014 and 2013.

The summarized financial information for Northern Border is as follows:

(unaudited)
(millions of dollars)	September 30, 2014	December 31, 2013
ASSETS
Cash and cash equivalents	42	27
Other current assets	32	34
Plant, property and equipment, net	1,173	1,197
Other assets	34	33
	1,281	1,291
LIABILITIES AND PARTNERS’ EQUITY
Current liabilities	67	51
Deferred credits and other	22	19
Long-term debt, including current maturities	411	411
Partners’ equity
Partners’ capital	783	812
Accumulated other comprehensive loss	(2)	(2	)
	1,281	1,291

	Three months ended				Nine months ended
(unaudited)	September 30,				September 30,
(millions of dollars)	2014		2013		2014		2013
Transmission revenues	66		72		221		213
Operating expenses	(16	)	(18	)	(50	)	(56	)
Depreciation	(15	)	(15	)	(44	)	(44	)
Financial charges and other	(8	)	(6	)	(20	)	(17	)
Net income	27		33		107		96

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 nine months ended September 30, 2014 and 2013.

The summarized financial information for Great Lakes is as follows:

(unaudited)
(millions of dollars)	September 30, 2014	December 31, 2013
ASSETS
Current assets	46	52
Plant, property and equipment, net	752	771
	798	823
LIABILITIES AND PARTNERS’ EQUITY
Current liabilities	26	28
Long-term debt, including current maturities	326	335
Partners’ equity	446	460
	798	823

	Three months ended				Nine months ended
(unaudited)	September 30,				September 30,
(millions of dollars)	2014		2013		2014		2013
Transmission revenues	29		26		106		90
Operating expenses	(14	)	(15	)	(38	)	(45	)
Depreciation	(7	)	(8	)	(21	)	(24	)
Financial charges and other	(6	)	(6	)	(19	)	(20	)
Net income(loss)	2		(3	)	28		1