-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KJkt+pIbmkdENNX+t/8W11XBwOeTjaKQCtjPKIE9nu8n9sHMv8v2+yG7FXFyfP9Y wRYASIj25M9D0saGUDr/GQ== 0000950129-02-004835.txt : 20021002 0000950129-02-004835.hdr.sgml : 20021002 20021002130731 ACCESSION NUMBER: 0000950129-02-004835 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20021002 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20021002 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHERN BORDER PARTNERS LP CENTRAL INDEX KEY: 0000909281 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS TRANSMISSION [4922] IRS NUMBER: 931120873 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12202 FILM NUMBER: 02779491 BUSINESS ADDRESS: STREET 1: 1400 SMITH ST STREET 2: C/O ENRON BLDG CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7138536161 MAIL ADDRESS: STREET 1: 1400 SMITH ST STREET 2: ENRON BUILDING RM 4524 CITY: HOUSTON STATE: TX ZIP: 77002 8-K 1 h00166e8vk.txt NORTHERN BORDER PARTNERS, L.P.- OCTOBER 2, 2002 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): October 2, 2002 NORTHERN BORDER PARTNERS, L.P. (Exact name of registrant as specified in its charter) DELAWARE 1-12202 93-1120873 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 1111 SOUTH 103RD STREET OMAHA, NEBRASKA (Address of principal 68124 executive offices) (Zip Code) Registrant's telephone number, including area code: (877) 208-7318 NOT APPLICABLE (Former name or former address, if changed since last report) ITEM 5. OTHER EVENTS RE-AUDIT OF 1999 AND 2000 FINANCIAL STATEMENTS. Northern Border Partners, L.P. (the "Partnership") announced that its independent public accountants, KPMG LLP ("KPMG"), have completed the re-audit of the Partnership's 1999 and 2000 financial statements, which were originally audited by Arthur Andersen LLP ("Arthur Andersen"). The reports of KPMG on the re-audit of the Partnership's 1999 and 2000 financial statements are filed herein as Exhibit 99.01. No adjustments to the earnings, cash flows and balance sheet information were required by KPMG to amounts reported previously in the Partnership's reports on Form 10-K for the years ended December 31, 1999 and 2000. The Partnership issued a press release to announce the completion of the re-audit of its financial statements, which is included as Exhibit 99.02. As previously announced, the Partnership, based upon the decision of its audit committee, in February 2002 named KPMG as the Partnership's independent auditing firm replacing Arthur Andersen. KPMG conducted the audit of the Partnership's financial statements for the fiscal year ending December 31, 2001, and its report was included in the Partnership's 2001 10-K filing. The audit reports of Arthur Andersen on the Partnership's financial statements for 1999 and 2000 did not contain adverse opinions or disclaimers and were not qualified or modified as to audit scope, uncertainty or accounting principles. Arthur Andersen advised the Partnership that it has not withdrawn any of its opinions expressed in their auditor's report for any periods for which they conducted audits of the Partnership. While Arthur Andersen's audits of the 1999 and 2000 financial statements were comprehensive and complete and resulted in unqualified opinions, in order to provide investors with additional confidence, the Partnership's policy committee requested for KPMG to re-audit the Partnership's financial statements for 1999 and 2000. AMENDMENT TO ITEMS 10 AND 13 OF 2001 FORM 10-K. Items 10 and 13 of the Partnership's 2001 Form 10-K is being updated in light of the purchase by TransCanada PipeLines Limited of the general partner interest in the Partnership formerly owned by The Williams Companies, Inc. The amended portion of Item 10 now reads as follows: In August 2002, TransCanada designated Paul MacGregor as its member on the Partnership Policy Committee. Mr. MacGregor is also TC PipeLines' alternate representative on the Northern Border Pipeline Management Committee. Additionally, Mr. MacGregor serves as the Vice President, Eastern Gas Development, of TransCanada a position he has held since September 1999 and as the Vice President, Business Development, of the general partner of TC PipeLines a position he has also held since April 1999. From July 1998 to September 1999, Mr. MacGregor was Vice-President, North American Pipeline Investments for TransCanada's Transmission Division. From 1997 until July 1998, he was a Vice-President of Alberta Natural Gas Company Ltd. (energy services), a former subsidiary of TransCanada which has since merged into TransCanada. Mr. MacGregor started his career with TransCanada in 1981 and has held various other positions in the Facilities Planning and Evaluations, Finance and Operations Group. The amended portion of Item 13 now reads as follows: The Partnership Policy Committee, whose members are designated by our three general partners, establishes the business policies of the Partnership. We have three representatives on the Northern Border Pipeline Management Committee, each of whom votes a portion of our 70% interest on the Northern Border Pipeline Management Committee, with the other 30% interest being voted by a representative of TC PipeLines, LP. Our representatives on the Northern Border Pipeline Management Committee are also designated by our general partners, while the fourth representative is designated by the general partner of TC PipeLines, which is an affiliate of one of our general partners. Our general partners (subsidiaries of Enron and a subsidiary of TransCanada) and their respective affiliates, currently actively engage or may engage in the businesses in which we engage or in which we may engage in the future. As a result, conflicts of interest may arise between our general partners and their affiliates on the one hand, and the Partnership on the other 2 hand. In such case the members of the Partnership Policy Committee will generally have a fiduciary duty to resolve such conflicts in a manner that is in our best interest. Enron (the parent of two of our general partners) and its affiliates and TC PipeLines (a 30% owner of Northern Border Pipeline Company whose general partner is an affiliate of one of our general partners) and its affiliates also actively engage in interstate pipeline transportation of natural gas in the United States separate from their interests in Northern Border Pipeline. As a result, conflicts also may arise between Enron and its affiliates, TransCanada and its affiliates or TC PipeLines and its affiliates, on the one hand, and the Northern Border Pipeline Company on the other hand. If such conflicts arise, the representatives on the Northern Border Pipeline Management Committee will generally have a fiduciary duty to resolve such conflicts in a manner that is in the best interest of Northern Border Pipeline. Unless otherwise provided for in a partnership agreement, the laws of Delaware and Texas generally require a general partner of a partnership to adhere to fiduciary duty standards under which it owes its partners the highest duties of good faith, fairness and loyalty. Similar rules apply to persons serving on the Partnership Policy Committee or the Northern Border Management Committee. Because of the competing interests identified above, our Partnership Agreement and the partnership agreement for Northern Border Pipeline contain provisions that modify certain of these fiduciary duties. For example: o Our Partnership Agreement states that our general partners, their affiliates and their officers and directors will not be liable for damages to us, our limited partners or their assignees for errors of judgment or for any acts or omissions if the general partners and such other persons acted in good faith. o Our Partnership Agreement allows our general partners and our Partnership Policy Committee to take into account the interests of parties in addition to our interest in resolving conflicts of interest. o Our Partnership Agreement provides that the general partners will not be in breach of their obligations under our Partnership Agreement or their duties to us or our unitholders if the resolution of a conflict is fair and reasonable to us. The latitude given in our Partnership Agreement in connection with resolving conflicts of interest may significantly limit the ability of a unitholder to challenge what might otherwise be a breach of fiduciary duty. o Our Partnership Agreement provides that a purchaser of Common Units is deemed to have consented to certain conflicts of interest and actions of the general partners and their affiliates that might otherwise be prohibited and to have agreed that such conflicts of interest and actions do not constitute a breach by the general partners of any duty stated or implied by law or equity. o Our Audit Committee will, at the request of a general partner or a member of the Partnership Policy Committee, review conflicts of interest that may arise between a general partner and its affiliates (or the member of the Partnership Policy Committee designated by it), on the one hand, and the unitholders or us, on the other. Any resolution of a conflict approved by the Audit Committee is conclusively deemed fair and reasonable to us. o We entered into an amendment to the partnership agreement of Northern Border Pipeline that relieves us and TC PipeLines, their affiliates and their transferees from any duty to offer business opportunities to Northern Border Pipeline, subject to specified exceptions. We are required to indemnify the members of the Partnership Policy Committee and general partners, their affiliates and their respective officers, directors, employees, agents and trustees to the fullest extent permitted by law against liabilities, costs and expenses incurred by any such person who acted in good faith and in a manner reasonably believed to be in, or (in the case of a person other than one of the general partners) not opposed to, our best interests and with respect to any criminal proceedings, had no reasonable cause to believe the conduct was unlawful. 3 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits. Exhibit No. and Description of Exhibit 99.01 - Report of KPMG LLP 99.02 - Press release issued by Northern Border Partners, L.P. 99.03 - Consent of KPMG LLP to incorporation of its report. 4 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. NORTHERN BORDER PARTNERS, L.P. By: /s/ Jerry L. Peters -------------------------------------- Jerry L. Peters Chief Financial and Accounting Officer Dated: October 2, 2002 5 EXHIBIT INDEX 99.01 - Report of KPMG LLP 99.02 - Press release issued by Northern Border Partners, L.P. 99.03 - Consent of KPMG LLP to incorporation of its report EX-99.01 3 h00166exv99w01.txt REPORT OF KPMG LLP EXHIBIT 99.01 KPMG Two Central Park Plaza Suite 1501 Omaha, NE 68102 233 South 13th Street, Suite 1600 Lincoln, NE 68508-2041 Independent Auditors' Report Northern Border Partners L.P.: We have audited the accompanying consolidated balance sheets of Northern Border Partners L.P. (a Delaware limited partnership) and Subsidiaries as of December 31, 2001 and 2000, and the related consolidated statements of income, comprehensive income, cash flows, and changes in partners' equity for each of the years in the three-year period ended December 31, 2001. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Northern Border Partners L.P. and Subsidiaries as of December 31, 2001 and 2000, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States of America. As discussed in note 7 to the consolidated financial statements, Northern Border Partners L.P. and Subsidiaries adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative Instruments and Hedging Activities, which was subsequently amended by SFAS No. 137 and SFAS No. 138. /s/ KPMG LLP September 6, 2002 Omaha, Nebraska KPMG Two Central Park Plaza Suite 1501 Omaha, NE 68102 233 South 13th Street, Suite 1600 Lincoln, NE 68508-2041 Report of Independent Public Accountants on Schedule Northern Border Partners, L.P.: We have audited in accordance with auditing standards generally accepted in the United States of America, the consolidated financial statements of Northern Border Partners, L.P. and Subsidiaries as of December 31, 2001 and 2000 and for each of the years in the three-year period ended December 31, 2001 included in this Form 10-K, and have issued our report thereon dated September 6, 2002. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedule of Northern Border Partners L.P. and Subsidiaries listed in Item 14 of Part IV of this Form 10-K is the responsibility of the Company's management and is presented for purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, fairly states in all material respects, the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. /s/ KPMG LLP September 6, 2002 Omaha, Nebraska EX-99.02 4 h00166exv99w02.txt PRESS RELEASE EXHIBIT 99.02 NORTHERN BORDER News PARTNERS, L.P. Release 1111 South 103rd Street Omaha, Nebraska 68124-1000 For Further Information, Contact Public Relations Contact: Beth Jensen (402) 398-7806 Investor Relations Contact: Ellen Konsdorf (402) 398-7840 NORTHERN BORDER PARTNERS' RE-AUDIT CONFIRMS FINANCIALS For Immediate Release: October 2, 2002 OMAHA - Northern Border Partners, L.P. (NYSE- NBP) announced today that its independent public accountants KPMG LLP have completed re-audits of, and issued unqualified opinions on, the Partnership's 1999 and 2000 financial statements, which were originally audited by Arthur Andersen LLP. No adjustments of previously reported financial information were required as a result of the re-audits. KPMG previously audited the Partnership's 2001 financial statements. "While Andersen's audits of the 1999 and 2000 financial statements were comprehensive, complete and resulted in unqualified opinions, in order to provide investors with additional confidence, the Partnership's policy committee subsequently requested that KPMG re-audit the Partnership's financial statements for those two years," said Jerry Peters, chief financial officer. "KPMG has completed its re-audits and confirmed our previously issued financial statements." Northern Border Partners, L.P. owns a 70 percent general partner interest in Northern Border Pipeline Company, which owns a 1,249-mile interstate pipeline system that transports natural gas from the Montana-Saskatchewan border to markets in the Midwestern United States. Additionally, the Partnership owns the 350-mile long Midwestern Gas Transmission system, which stretches from Portland, Tennessee to Joliet, Illinois. The Partnership also has gathering systems and processing plants in the Powder River, Wind River, and Williston Basins in the U. S.; owns and operates processing plants and gathering pipelines in Alberta, Canada; and transports coal-water slurry via a pipeline in the southwestern U. S. Northern Border Partners' information may be found at http://www.northernborderpartners.com/. - ## EX-99.03 5 h00166exv99w03.txt CONSENT OF KMPG LLP EXHIBIT 99.03 CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Partnership Policy Committee Northern Border Partners, L.P.: We consent to the incorporation by reference in the Registration Statements on Form S-3 (File No. 333-63566 and File No. 333-72323) and on Form S-8 (File No. 333-66949) of Northern Border Partners, L.P. and Subsidiaries (the Partnership) of our report dated September 6, 2002 relating to the consolidated balance sheets of Northern Border Partners, L.P. and Subsidiaries as of December 31, 2001 and 2000, and the related consolidated statements of income, comprehensive income, cash flows and changes in partners' equity for each of the years in the three-year period ended December 31, 2001 which report appears in the December 31, 2001 Annual Report on Form 10-K of Northern Border Partners, L.P. Our report refers to the Partnership's adoption of Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative Instruments and Hedging Activities, which was subsequently amended by SFAS No. 137 and SFAS No. 138. /s/ KPMG LLP Omaha, Nebraska September 27, 2002 -----END PRIVACY-ENHANCED MESSAGE-----