NORTHERN BORDER PARTNERS, L.P.

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Presentation transcript:

NORTHERN BORDER PARTNERS, L.P. DISTRIBUTION RECOMMENDATION & ANALYSIS JANUARY 2000

NORTHERN BORDER PARTNERS, L.P. DISTRIBUTION RECOMMENDATION & ANALYSIS Announce intention to complete $150 million of investments Bighorn constitutes $50 million of total Twelve to twenty-four month timeframe Announce distribution increase of $0.16/unit on January 19th Distribution rises to $2.60 Indicate confidence in business strategy, anticipated results from Bighorn investment and success of The Chicago Project Price impact of $2.60 distribution: 01/11 Price: $24.625 Distribution: $2.44 Yield: 9.91%

NORTHERN BORDER PARTNERS, L.P. DISTRIBUTION ANALYSIS Analysis examined distribution sustainability at various levels under different business scenarios One-time increase payable beginning February 15, 2000 Assumed utilization of cash reserves Distributions maintained through: Case 1 Case 2 Case 3 Case 4 Distribution Increase: $0.10 $0.12 $0.16 $0.20 Base Case [no Bighorn impact] 2011 2010 2007 2005 Base Case [w/ Bighorn] 2015 2013 2011 2009 Growth Case [Bighorn + $100 million 2024 2024 2019 2014 of projects @ 12% cash return]

NORTHERN BORDER PARTNERS, L.P. DISTRIBUTION ANALYSIS MAJOR ASSUMPTIONS NORTHERN BORDER PIPELINE Cost of service tariff with existing depreciation rates and 12% ROE Additional debt repayments are funded through equity contributions Level based on partners’ available cash NORTHERN BORDER PARTNERS, L.P. All Cases: No units are issued to repay debt Cash reserve includes equity contributions made to NBPL Base Case [no Bighorn impact]: NBPL and Black Mesa only; Bighorn distributions equal to financing costs Base Case [w/ Bighorn impact]: Bighorn distributions based upon low well count case Growth Case: Base Case [w/ Bighorn impact] plus two $50 million investments June 2000 & June 2001 Estimated distributions based upon 12% cash return