INVESTMENTS IN UNCONSOLIDATED AFFILIATES

6 Months Ended

Jun. 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.

		Equity Earnings from				Investments in
	Ownership	Unconsolidated Affiliates				Unconsolidated Affiliates
	Interest at	Three months		Six Months
(unaudited)	June 30,	ended June 30,		ended June 30,		June 30,	December 31,
(millions of dollars)	2015	2015	2014	2015	2014	2015	2014
Northern Border (a)	50%	15	16	34	39	492	505
Great Lakes	46.45%	-	2	12	12	666	672
		15	18	46	51	1,158	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 six months ended June 30, 2015 and 2014.

The summarized financial information for Northern Border is as follows:

(unaudited)
(millions of dollars)	June 30, 2015		December 31, 2014
ASSETS
Cash and cash equivalents	40		41
Other current assets	32		34
Plant, property and equipment, net	1,142		1,163
Other assets	34		34
	1,248		1,272
LIABILITIES AND PARTNERS’ EQUITY
Current liabilities	63		64
Deferred credits and other	24		22
Long-term debt, including current maturities	411		411
Partners’ equity
Partners’ capital	752		777
Accumulated other comprehensive loss	(2	)	(2	)
	1,248		1,272

	Three months ended				Six months ended
(unaudited)	June 30,				June 30,
(millions of dollars)	2015		2014		2015		2014
Transmission revenues	69		69		144		155
Operating expenses	(18	)	(16	)	(34	)	(34	)
Depreciation	(14	)	(15	)	(29	)	(30	)
Financial charges and other	(6	)	(6	)	(11	)	(12	)
Net income	31		32		70		79

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 six months ended June 30, 2015 and 2014.

The summarized financial information for Great Lakes is as follows:

(unaudited)
(millions of dollars)	June 30, 2015	December 31, 2014
ASSETS
Current assets	70	66
Plant, property and equipment, net	736	748
	806	814
LIABILITIES AND PARTNERS’ EQUITY
Current liabilities	52	38
Long-term debt, including current maturities	307	316
Partners’ equity	447	460
	806	814

	Three months ended				Six months ended
(unaudited)	June 30,				June 30,
(millions of dollars)	2015		2014		2015		2014
Transmission revenues	28		29		76		77
Operating expenses	(14	)	(12	)	(25	)	(24	)
Depreciation	(7	)	(7	)	(14	)	(14	)
Financial charges and other	(6	)	(6	)	(12	)	(13	)
Net income	1		4		25		26