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ASSET ACQUISITIONS

6 Months Ended

Jun. 30, 2010

NOTE 4 ASSET ACQUISITIONS

Yuma Lateral Asset Purchase

At the time of the July 1, 2009 acquisition of North Baja from TransCanada, TransCanada had begun an expansion project of the North Baja pipeline from the Mexico/Arizona border to Yuma, Arizona (Yuma Lateral). The Partnership agreed to acquire the expansion facilities and contracts for an additional sum up to $10.0 million, if TransCanada completed the project by June 30, 2010. On March 5, 2010, the Partnership acquired the expansion facilities and contracts in place at that time for a purchase price of $7.6 million. The Yuma Lateral was placed into service on March 13, 2010. The North Baja acquisition agreement provided that an additional payment of up to $2.4 million be made to TransCanada in the event that any other shippers contracted for services on the Yuma Lateral before June 30, 20 10. A potential shipper signed a precedent agreement with North Baja on June 29, 2010 to enter into agreements for service on the Yuma Lateral. An amendment to the acquisition agreement between the Partnership and TransCanada was entered into on June 29, 2010 to allow TransCanada to continue to pursue additional contracts until December 31, 2010 and, as a result, receive an additional payment of up to $2.4 million.

The Yuma Lateral asset purchase was accounted for as a transaction between entities under common control, similar to a pooling of interests, whereby the assets acquired were recorded at TransCanada’s carrying value. As the fair value paid for the Yuma Lateral assets of $7.6 million was greater than the $6.1 million recorded as Plant, property and equipment, the excess purchase price paid of $1.5 million was recorded as a reduction to Partners’ Equity. In the second quarter, $1.5 million of additional construction costs were incurred by TransCanada to complete the Yuma Lateral. These costs were recorded by North Baja as Plant, property and equipment and a contribution of capital from TransCanada, thereby reducing the excess purchase price paid by the Partnership from $1.5 million to $nil.

CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions	Jun. 30, 2010	Dec. 31, 2009
Current Assets
Cash and cash equivalents	$ 2.7	$ 3.1
Accounts receivable and other (Note 11)	6.9	8.6
Total current assets	9.6	11.7
Plant, property and equipment (net of $125.2 accumulated depreciation; 2009 - $118.3)	319.6	318.0
Goodwill	130.2	130.2
Other assets	0.8	1.0
Total assets	1,663.6	1,675.1
Current Liabilities
Accounts payable and accrued liabilities	4.5	4.5
Accrued interest	1.4	1.3
Current portion of long-term debt (Note 5)	51.6	53.4
Current portion of fair value of derivative contracts (Note 10)	13.4	12.9
Total current liabilities	70.9	72.1
Long-term debt (Note 5)	485.5	487.9
Fair value of derivative contracts and other (Note 10)	6.6	11.6
Total liabilities	563.0	571.6
Partners' Equity
Common units	1,098.3	1,105.6
General partner	23.4	23.6
Accumulated other comprehensive loss	(21.1)	(25.7)
Total partners' equity	1,100.6	1,103.5
Total liabilities and partners' equity	1,663.6	1,675.1
Great Lakes Gas Transmission Limited Partnership
Current Assets
Investment in Great Lakes (Note 2) and Northern Border (Note 3)	691.5	691.2
Northern Border Pipeline Company
Current Assets
Investment in Great Lakes (Note 2) and Northern Border (Note 3)	$ 511.9	$ 523.0

CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2010	Dec. 31, 2009
CONSOLIDATED BALANCE SHEET
Plant, property and equipment, accumulated depreciation	$ 125.2	$ 118.3

CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' EQUITY (Parenthetical) $ in Millions	Jun. 30, 2010 USD ($)
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' EQUITY
Losses related to cash flow hedges reported in accumulated other comprehensive income that will be reclassified to net income in the next 12 months	$ 13.4