INVESTMENTS IN UNCONSOLIDATED AFFILIATES

9 Months Ended

Sep. 30, 2015

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.

	Ownership	Equity Earnings from Unconsolidated Affiliates				Investments in Unconsolidated Affiliates
	Interest at	Three months		Nine Months
(unaudited)	September 30,	ended September 30,		ended September 30,		September 30,	December 31,
(millions of dollars)	2015	2015	2014	2015	2014	2015	2014
Northern Border (a)	50%	16	14	50	53	487	505
Great Lakes	46.45%	1	1	13	13	664	672
		17	15	63	66	1,151	1,177

(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 does not have undistributed earnings from Northern Border for the nine months ended September 30, 2015 and 2014.

The summarized financial information for Northern Border is as follows:

(unaudited)
(millions of dollars)	September 30, 2015	December 31, 2014
ASSETS
Cash and cash equivalents	40	41
Other current assets	33	34
Plant, property and equipment, net	1,135	1,163
Other assets	18	34
	1,226	1,272
LIABILITIES AND PARTNERS’ EQUITY
Current liabilities	50	64
Deferred credits and other	25	22
Long-term debt, including current maturities	411	411
Partners’ equity
Partners’ capital	742	777
Accumulated other comprehensive loss	(2)	(2)
	1,226	1,272

	Three months ended		Nine months ended
(unaudited)	September 30,		September 30,
(millions of dollars)	2015	2014	2015	2014
Transmission revenues	71	66	215	221
Operating expenses	(17)	(16)	(51)	(50)
Depreciation	(16)	(15)	(45)	(44)
Financial charges and other	(6)	(8)	(17)	(20)
Net income	32	27	102	107

Great Lakes

The Partnership made an equity contribution to Great Lakes of $4 million in the first quarter of 2015. 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 does not have undistributed earnings from Great Lakes for the nine months ended September 30, 2015 and 2014.

The summarized financial information for Great Lakes is as follows:

(unaudited)
(millions of dollars)	September 30, 2015	December 31, 2014
ASSETS
Current assets	67	66
Plant, property and equipment, net	730	748
	797	814
LIABILITIES AND PARTNERS’ EQUITY
Current liabilities	48	38
Long-term debt, including current maturities	307	316
Partners’ equity	442	460
	797	814

	Three months ended		Nine months ended
(unaudited)	September 30,		September 30,
(millions of dollars)	2015	2014	2015	2014
Transmission revenues	29	29	105	106
Operating expenses	(15)	(14)	(40)	(38)
Depreciation	(7)	(7)	(21)	(21)
Financial charges and other	(5)	(6)	(17)	(19)
Net income	2	2	27	28