EX-99.2 3 a07-2876_1ex99d2.htm EX-99.2

Exhibit 99.2

ENBRIDGE ENERGY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF INCOME

 

Three months
ended December 31,

 

Year ended
December 31,

 

 

 

2006

 

2005

 

2006

 

2005

 

 

 

(unaudited; dollars and units in millions,
except per unit amounts)

 

Operating revenue

 

$

1,663.4

 

$

2,084.5

 

$

6,509.0

 

$

6,476.9

 

Operating expenses

 

 

 

 

 

 

 

 

 

Cost of natural gas

 

1,406.9

 

1,880.9

 

5,506.1

 

5,763.3

 

Operating and administrative

 

108.5

 

89.6

 

364.8

 

326.8

 

Power

 

29.3

 

21.6

 

107.6

 

74.8

 

Depreciation and amortization

 

33.6

 

34.3

 

135.1

 

138.2

 

Gain on sale of assets

 

—  

 

(18.1

)

—  

 

(18.1

)

 

 

1,578.3

 

2,008.3

 

6,113.6

 

6,285.0

 

Operating income

 

85.1

 

76.2

 

395.4

 

191.9

 

Interest expense

 

(26.5

)

(28.1

)

(110.5

)

(107.7

)

Other income

 

1.1

 

1.6

 

8.5

 

5.0

 

Net income

 

$

59.7

 

$

49.7

 

$

293.4

 

$

89.2

 

Net income allocable to common and i-units

 

$

51.7

 

$

43.1

 

$

262.3

 

$

65.7

 

Net income per common and i-unit (basic and diluted)

 

$

0.67

 

$

0.68

 

$

3.74

 

$

1.06

 

Weighted average units outstanding

 

77.4

 

63.6

 

70.2

 

62.1

 

 

1



ENBRIDGE ENERGY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS

 

Year ended
December 31,

 

 

 

2006

 

2005

 

 

 

(unaudited; in millions)

 

Cash provided by operating activities

 

 

 

 

 

Net income

 

$

293.4

 

$

89.2

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

135.1

 

138.2

 

Derivative fair value (gains) losses

 

(64.4

)

58.4

 

Environmental liabilities

 

(1.4

)

(0.5

)

Gain on sale of asset

 

—  

 

(18.1

)

Inventory market price adjustments

 

17.7

 

––  

 

Cash paid for settlement of interest rate derivatives

 

(10.2

)

––  

 

Other

 

9.7

 

(0.3

)

Changes in operating assets and liabilities, net of cash acquired:

 

 

 

 

 

Receivables, trade and other

 

(37.0

)

(38.0

)

Due from General Partner and affiliates

 

(10.4

)

(12.4

)

Accrued receivables

 

98.8

 

(237.1

)

Inventory

 

1.1

 

(57.5

)

Current and long-term other assets

 

(2.7

)

(2.2

)

Due to General Partner and affiliates

 

10.1

 

2.6

 

Accounts payable and other

 

0.5

 

42.2

 

Accrued purchases

 

(121.1

)

295.3

 

Interest payable

 

4.4

 

8.8

 

Property and other taxes payable

 

(2.0

)

(1.5

)

Net cash provided by operating activities

 

321.6

 

267.1

 

Cash used in investing activities

 

 

 

 

 

Additions to property, plant and equipment

 

(864.4

)

(344.8

)

Changes in construction payables

 

30.4

 

2.8

 

Asset acquisitions, net of cash acquired

 

(33.3

)

(186.4

)

Proceeds from sale of assets

 

0.2

 

105.4

 

Settlement of natural gas collars

 

—  

 

(16.3

)

Other

 

0.1

 

2.2

 

Net cash used in investing activities

 

(867.0

)

(437.1

)

Cash provided by financing activities

 

 

 

 

 

Proceeds from unit issuances, net

 

509.6

 

268.6

 

Distributions to partners

 

(227.4

)

(210.6

)

Repayments of Credit Facilities, net

 

—  

 

(175.0

)

Net issuances of commercial paper

 

111.4

 

330.0

 

Proceeds from issuance of senior notes, net of issue costs

 

297.6

 

—  

 

Repayments on affiliate loan

 

(20.0

)

—  

 

Repayments of First Mortgage Notes

 

(31.0

)

(31.0

)

Other

 

—  

 

(0.5

)

Net cash provided by financing activities

 

640.2

 

181.5

 

Net increase in cash and cash equivalents

 

94.8

 

11.5

 

Cash and cash equivalents at beginning of year

 

89.8

 

78.3

 

Cash and cash equivalents at end of year

 

$

184.6

 

$

89.8

 

 

2



ENBRIDGE ENERGY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

 

December 31,

 

 

 

2006

 

2005

 

 

 

(unaudited; dollars in
millions)

 

ASSETS

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

 

$

184.6

 

$

89.8

 

Receivables, trade and other, net of allowance for doubtful accounts of $2.4 in 2006 and $4.5 in 2005

 

146.7

 

109.7

 

Due from General Partner and affiliates

 

30.5

 

20.1

 

Accrued receivables

 

516.5

 

615.3

 

Inventory

 

117.1

 

138.9

 

Other current assets

 

13.9

 

11.5

 

 

 

1,009.3

 

985.3

 

Property, plant and equipment, net

 

3,824.9

 

3,080.0

 

Other assets, net

 

32.5

 

22.2

 

Goodwill

 

265.7

 

258.2

 

Intangibles, net

 

91.4

 

82.7

 

 

 

$

5,223.8

 

$

4,428.4

 

LIABILITIES AND PARTNERS’ CAPITAL

 

 

 

 

 

Current liabilities

 

 

 

 

 

Due to General Partner and affiliates

 

$

22.6

 

$

12.5

 

Accounts payable and other

 

207.7

 

247.9

 

Accrued purchases

 

525.6

 

646.7

 

Interest payable

 

11.4

 

11.4

 

Property and other taxes payable

 

18.6

 

21.8

 

Loans from General Partner and affiliates

 

136.2

 

––  

 

Current maturities of long-term debt

 

31.0

 

31.0

 

 

 

953.1

 

971.3

 

Long-term debt

 

2,066.1

 

1,682.9

 

Environmental liabilities

 

3.3

 

4.8

 

Loans from General Partner and affiliates

 

—  

 

151.8

 

Other long-term liabilities

 

149.4

 

253.8

 

 

 

3,171.9

 

3,064.6

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Partners’ capital

 

 

 

 

 

Class A common units (Units issued—49,938,834 in 2006 and 2005)

 

1,147.0

 

1,142.4

 

Class B common units (Units issued—3,912,750 in 2006 and 2005)

 

68.0

 

67.2

 

Class C units (Units issued—11,070,152 in 2006)

 

511.0

 

—  

 

i-units (Units issued—12,674,148 in 2006 and 11,704,948 in 2005)

 

467.7

 

421.7

 

General Partner

 

47.8

 

34.6

 

Accumulated other comprehensive loss

 

(189.6

)

(302.1

)

 

 

2,051.9

 

1,363.8

 

 

 

$

5,223.8

 

$

4,428.4

 

3



NET INCOME PER COMMON AND i-UNIT

We compute net income per limited partner unit by dividing net income, after deducting our allocation to the General Partner, by the weighted average number of our limited partner units outstanding.  The General Partner’s allocation is equal to an amount based upon its two percent general partner interest, adjusted to reflect an amount equal to its incentive distributions and an amount required to reflect depreciation on the General Partner’s historical cost basis for assets contributed on formation of the Partnership.  We have no dilutive securities outstanding, therefore basic and diluted earnings per unit amounts are equal.  Net income per limited partner unit was determined as follows:

 

Three months ended
December 31,

 

Year ended
December 31,

 

 

 

2006

 

2005

 

2006

 

2005

 

 

 

(unaudited; dollars and units in millions,
except per unit amounts)

 

Net income

 

$

59.7

 

$

49.7

 

$

293.4

 

$

89.2

 

Allocations to the General Partner:

 

 

 

 

 

 

 

 

 

Net income allocated to General Partner

 

(1.2

)

(1.0

)

(5.9

)

(1.8

)

Incentive distributions earned

 

(6.8

)

(5.6

)

(25.1

)

(21.6

)

Historical cost depreciation adjustments

 

—  

 

—  

 

(0.1

)

(0.1

)

 

 

(8.0

)

(6.6

)

(31.1

)

(23.5

)

Net income allocable to limited partner units

 

$

51.7

 

$

43.1

 

$

262.3

 

$

65.7

 

Weighted average units outstanding

 

77.4

 

63.6

 

70.2

 

62.1

 

Net income per limited partner unit (basic and diluted)

 

$

0.67

 

$

0.68

 

$

3.74

 

$

1.06

 

 

4



SEGMENT INFORMATION

Our business is divided into operating segments, defined as components of the enterprise, about which financial information is available and evaluated regularly by our Chief Operating Decision Maker in deciding how resources are allocated and performance is assessed.

Each of our reportable segments is a business unit that offers different services and products that is managed separately, since each business segment requires different operating strategies. We have segregated our business activities into three distinct operating segments: Liquids, Natural Gas and Marketing.

The following table presents certain financial information relating to our business segments:

 

As of and for the three months ended December 31, 2006

 

 

 

Liquids

 

Natural Gas

 

Marketing

 

Corporate(1)

 

Total

 

 

 

(unaudited; in millions)

 

Total revenue

 

$

138.1

 

$

1,319.0

 

$

775.9

 

$

—  

 

$

2,233.0

 

Less: Intersegment revenue

 

—  

 

529.4

 

40.2

 

—  

 

569.6

 

Operating revenue

 

138.1

 

789.6

 

735.7

 

—  

 

1,663.4

 

Cost of natural gas

 

—  

 

684.2

 

722.7

 

—  

 

1,406.9

 

Operating and administrative

 

41.6

 

64.8

 

1.7

 

0.4

 

108.5

 

Power

 

29.3

 

—  

 

—  

 

—  

 

29.3

 

Depreciation and amortization

 

16.3

 

17.1

 

0.2

 

––  

 

33.6

 

Gain on sale of assets

 

—  

 

—  

 

—  

 

—  

 

—  

 

Operating income

 

50.9

 

23.5

 

11.1

 

(0.4

)

85.1

 

Interest expense

 

—  

 

—  

 

—  

 

(26.5

)

(26.5

)

Other income

 

—  

 

—  

 

—  

 

1.1

 

1.1

 

Net income

 

$

50.9

 

$

23.5

 

$

11.1

 

$

(25.8

)

$

59.7

 

Capital expenditures (excluding acquisitions)

 

$

135.6

 

$

210.1

 

$

0.1

 

$

4.3

 

$

350.1

 

 

(1)             Corporate consists of interest expense, interest income, and certain other costs such as franchise taxes, which are not allocated to the other business segments.

5



 

 

As of and for the three months ended December 31, 2005

 

 

 

Liquids

 

Natural Gas

 

Marketing

 

Corporate(1)

 

Total

 

 

 

(unaudited; in millions)

 

Total revenue

 

$

114.9

 

$

1,765.0

 

$

1,225.7

 

$

—  

 

$

3,105.6

 

Less: Intersegment revenue

 

—  

 

957.7

 

63.4

 

—  

 

1,021.1

 

Operating revenue

 

114.9

 

807.3

 

1,162.3

 

—  

 

2,084.5

 

Cost of natural gas

 

—  

 

718.8

 

1,162.1

 

—  

 

1,880.9

 

Operating and administrative

 

38.7

 

48.7

 

1.0

 

1.2

 

89.6

 

Power

 

21.6

 

—  

 

—  

 

—  

 

21.6

 

Depreciation and amortization

 

18.1

 

16.1

 

0.1

 

—  

 

34.3

 

Gain on sale of assets

 

—  

 

(18.1

)

––  

 

—  

 

(18.1

)

Operating income

 

36.5

 

41.8

 

(0.9

)

(1.2

)

76.2

 

Interest expense

 

—  

 

—  

 

—  

 

(28.1

)

(28.1

)

Other income

 

—  

 

—  

 

—  

 

1.6

 

1.6

 

Net income

 

$

36.5

 

$

41.8

 

$

(0.9

)

$

(27.7

)

$

49.7

 

Capital expenditures (excluding acquisitions)

 

$

25.0

 

$

57.3

 

$

0.2

 

$

0.4

 

$

82.9

 

 

(1)             Corporate consists of interest expense, interest income, and certain other costs such as franchise taxes, which are not allocated to the other business segments.

 

As of and for the Year Ended December 31, 2006

 

 

 

Liquids

 

Natural Gas

 

Marketing

 

Corporate(1)

 

Total

 

 

 

(unaudited; in millions)

 

Total revenue

 

$

512.8

 

$

5,404.1

 

$

3,182.3

 

$

—  

 

$

9,099.2

 

Less: Intersegment revenue

 

—  

 

2,383.4

 

206.8

 

—  

 

2,590.2

 

Operating revenue

 

512.8

 

3,020.7

 

2,975.5

 

—  

 

6,509.0

 

Cost of natural gas

 

—  

 

2,592.6

 

2,913.5

 

—  

 

5,506.1

 

Operating and administrative

 

141.3

 

215.4

 

5.4

 

2.7

 

364.8

 

Power

 

107.6

 

—  

 

—  

 

—  

 

107.6

 

Depreciation and amortization

 

64.1

 

70.3

 

0.5

 

0.2

 

135.1

 

Gain on sale of assets

 

—  

 

—  

 

—  

 

—  

 

—  

 

Operating income

 

199.8

 

142.4

 

56.1

 

(2.9

)

395.4

 

Interest expense

 

—  

 

—  

 

—  

 

(110.5

)

(110.5

)

Other income

 

—  

 

—  

 

—  

 

8.5

 

8.5

 

Net income

 

$

199.8

 

$

142.4

 

$

56.1

 

$

(104.9

)

$

293.4

 

Total assets

 

$

1,816.4

 

$

2,797.3

 

$

366.9

 

$

243.2

 

$

5,223.8

 

Capital expenditures (excluding acquisitions)

 

$

237.2

 

$

614.8

 

$

1.9

 

$

10.5

 

$

864.4

 

 

(1)             Corporate consists of interest expense, interest income, and certain other costs such as franchise taxes, which are not allocated to the other business segments.

6



 

 

As of and for the Year Ended December 31, 2005

 

 

 

Liquids

 

Natural Gas

 

Marketing

 

Corporate(1)

 

Total

 

 

 

(unaudited; in millions)

 

Total revenue

 

$

418.0

 

$

4,945.1

 

$

3,884.2

 

$

—  

 

$

9,247.3

 

Less: Intersegment revenue

 

—  

 

2,593.0

 

177.4

 

—  

 

2,770.4

 

Operating revenue

 

418.0

 

2,352.1

 

3,706.8

 

—  

 

6,476.9

 

Cost of natural gas

 

—  

 

2,018.7

 

3,744.6

 

—  

 

5,763.3

 

Operating and administrative

 

144.2

 

175.0

 

4.1

 

3.5

 

326.8

 

Power

 

74.8

 

—  

 

—  

 

—  

 

74.8

 

Depreciation and amortization

 

71.7

 

66.0

 

0.5

 

—  

 

138.2

 

Gain on sale of assets

 

—  

 

(18.1

)

––  

 

—  

 

(18.1

)

Operating income

 

127.3

 

110.5

 

(42.4

)

(3.5

)

191.9

 

Interest expense

 

—  

 

—  

 

—  

 

(107.7

)

(107.7

)

Other income

 

—  

 

—  

 

—  

 

5.0

 

5.0

 

Net income

 

$

127.3

 

$

110.5

 

$

(42.4

)

$

(106.2

)

$

89.2

 

Total assets

 

$

1,664.0

 

$

2,145.9

 

$

512.3

 

$

106.2

 

$

4,428.4

 

Capital expenditures (excluding acquisitions)

 

$

77.0

 

$

263.8

 

$

0.2

 

$

3.8

 

$

344.8

 

 

(1)             Corporate consists of interest expense, interest income, and certain other costs such as franchise taxes, which are not allocated to the other business segments.

7