Boardwalk Announces Third Quarter 2013 Results and Announces Quarterly Distribution of $0.5325 Per Unit

HOUSTON, Oct. 28, 2013 /PRNewswire/ -- Boardwalk Pipeline Partners, LP, (NYSE: BWP) announced today that it has declared a quarterly cash distribution per common unit of $0.5325 ($2.13 annualized) payable on November 14, 2013, to unitholders of record as of November 7, 2013.

(Logo: http://photos.prnewswire.com/prnh/20130521/MM18411LOGO )

The Partnership also announced its results for the third quarter and nine months ended September 30, 2013, which included the following items:

  • Operating revenues of $275.5 million for the quarter and $892.7 for the nine months ended September 30, 2013, a 2% and 4% increase from $270.6 million and $859.3 million in the comparable 2012 periods;
  • Net income attributable to controlling interests of $62.3 million for the quarter and $234.2 million for the nine months ended September 30, 2013, an 7% and 8% increase from $58.2 million and $215.9 million in the comparable 2012 periods;
  • Adjusted Earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) of $171.9 million for the quarter and $559.1 million for the nine months ended September 30, 2013, a 6% increase from $162.0 million and $528.7 million.
  • Distributable cash flow of $116.6 million for the quarter and $420.2 million for the nine months ended September 30, 2013, a 17% and 18% increase from $99.7 million and $354.7 million in the comparable 2012 periods.

Compared with the third quarter of 2012, operating revenues increased $4.9 million, operating expenses increased $3.2 million and adjusted EBITDA increased $9.9 million in the third quarter of 2013, including the results of Boardwalk Louisiana Midstream, LLC, (Louisiana Midstream) which was acquired in October 2012. In addition to the impacts of Louisiana Midstream, the Partnership's operating revenues were partially offset by lower transportation revenues of $13.0 million primarily due to contract renewals and unfavorable market conditions. Parking and lending and storage revenues were lower by $2.9 million due to decreased parking opportunities from a reduction in the level of, and volatility in, natural gas price spreads between time periods. Operating costs and expenses were also impacted by a $12.5 million gain recognized on the sale of storage gas, which was sold as a result of a change in the storage gas needed to support no-notice services.

Operating results on a year-to-date basis were impacted by the revenue and expense factors discussed above. Additionally, for the nine month period ended September 30, 2013, operating costs were impacted by a $29.5 million gain recognized on the sale of storage gas.

Capital Program

Growth capital expenditures were $177.4 million and maintenance capital expenditures were $36.9 million for the nine months ended September 30, 2013. 

Conference Call

The Partnership has scheduled a conference call for October 28, 2013, at 9:00 a.m. Eastern time to review the quarterly results. The earnings call may be accessed via the Boardwalk website at www.bwpmlp.com. Please access the website at least 10 minutes before the event begins to register and download and install any necessary audio software. Those interested in participating in the question and answer session of the conference call should dial (877) 703-6106 for callers in the U.S. or (857) 244-7305 for callers outside the U.S. The PIN number to access the call is 76857337. 

Replay

An online replay will be available on the Boardwalk website immediately following the call.

Non-GAAP Financial Measures - Adjusted EBITDA and Distributable Cash Flow

The Partnership uses non-GAAP measures to evaluate its business and performance, including Adjusted EBITDA and Distributable Cash Flow. Adjusted EBITDA is used as a supplemental financial measure by management and by external users of the Partnership's financial statements, such as investors, commercial banks, research analysts and rating agencies, to assess the Partnership's operating and financial performance, ability to generate cash and return on invested capital as compared to those of other companies in the natural gas transportation, gathering and storage business. Distributable Cash Flow is used as a supplemental financial measure by management and by external users of the Partnership's financial statements to assess the Partnership's ability to make cash distributions to its unitholders and general partner.

Adjusted EBITDA and Distributable Cash Flow should not be considered alternatives to net income, operating income, cash flow from operating activities or any other measure of financial performance or liquidity presented in accordance with generally accepted accounting principles (GAAP). Adjusted EBITDA and Distributable Cash Flow are not necessarily comparable to similarly titled measures of another company.

The following table presents a reconciliation of the Partnership's Adjusted EBITDA and Distributable Cash Flow to its net income, the most directly comparable GAAP financial measure, for each of the periods presented (in millions):

 


For the

Three Months Ended

September 30,


For the

Nine Months Ended

September 30,


2013


2012


2013


2012

Net income attributable to controlling interests

$

62.3



$

58.2



$

234.2



$

215.9


Income taxes



0.1



0.3



0.4


Depreciation and amortization

68.7



60.4



202.8



184.8


Interest expense

41.0



43.5



122.2



128.0


Interest income

(0.1)



(0.2)



(0.4)



(0.4)


          Adjusted EBITDA

171.9



162.0



559.1



528.7


Less:








Cash paid for interest, net of capitalized interest  (1)

55.2



57.1



126.9



142.3


Maintenance capital expenditures

15.1



14.9



36.9



51.3


Add:








Proceeds from insurance recoveries and settlements (2)



5.0





9.2


Proceeds from sale of operating assets

27.4



3.2



48.6



5.6


Net (gain) loss on sale of operating assets

(13.0)



0.5



(29.2)



(3.1)


Asset impairment



1.1



1.2



8.2


Other (3)

0.6



(0.1)



4.3



(0.3)


          Distributable Cash Flow, as reported

$

116.6



$

99.7



$

420.2



$

354.7


 

(1)

The three and nine months ended September 30, 2012, includes payments of $2.4 million and $9.2 million related to the early settlement of an interest rate swap and the settlement of a treasury rate lock.

 

(2)

Represents insurance recoveries associated with the Carthage compressor fire and a legal settlement. Excludes proceeds recognized in earnings.

 

(3)

The nine months ended September 30, 2013, includes ethylene inventory that was acquired through the acquisition of BLM that was subsequently sold. All periods presented include non-cash items such as the equity component of allowance for funds used during construction and equity in earnings of unconsolidated affiliates.

About Boardwalk

Boardwalk Pipeline Partners, LP (NYSE: BWP) is a midstream master limited partnership that provides transportation, storage, gathering and processing of natural gas and liquids for its customers. Boardwalk and its subsidiaries own and operate approximately 14,410 miles of natural gas and liquids pipelines and underground storage caverns with an aggregate working gas capacity of approximately 201 billion cubic feet and liquids capacity of approximately 18 million barrels. Boardwalk is a subsidiary of Loews Corporation (NYSE: L), which holds 53% of Boardwalk's equity, excluding incentive distribution rights. Additional information about the Partnership can be found on its website at www.bwpmlp.com.

 

 

BOARDWALK PIPELINE PARTNERS, LP

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Millions, except per unit amounts)

(Unaudited)

 


For the

Three Months Ended

September 30,



For the

Nine Months Ended

September 30,



2013



2012



2013



2012


Operating Revenues:












Transportation

$

233.5



$

241.2



$

759.9



$

773.7


Parking and lending


4.9




8.3




19.9




20.1


Storage


27.4




18.3




82.9




57.0


Other


9.7




2.8




30.0




8.5


Total operating revenues


275.5




270.6




892.7




859.3














Operating Costs and Expenses:












Fuel and transportation


18.5




18.2




68.6




51.9


Operation and maintenance


47.0




40.1




131.0




119.6


Administrative and general


29.1




25.7




89.4




85.1


Depreciation and amortization


68.7




60.4




202.8




184.8


Asset impairment





1.1




1.2




8.2


Net (gain) loss on sale of operating assets


(13.0)




0.5




(29.2)




(3.1)


Taxes other than income taxes


22.0




23.1




72.9




69.2


Total operating costs and expenses


172.3




169.1




536.7




515.7














Operating income


103.2




101.5




356.0




343.6














Other Deductions (Income):












Interest expense


41.0




41.5




122.2




122.0


Interest expense – affiliates





2.0







6.0


Interest income


(0.1)




(0.2)




(0.4)




(0.4)


Equity losses in unconsolidated affiliates


0.6







0.6





Miscellaneous other income, net





(0.1)




(0.2)




(0.3)


Total other deductions


41.5




43.2




122.2




127.3














Income before income taxes


61.7




58.3




233.8




216.3














Income taxes





0.1




0.3




0.4














Net Income


61.7




58.2




233.5




215.9


Net loss attributable to noncontrolling interests


(0.6)







(0.7)





Net income attributable to controlling interests

$

62.3



$

58.2



$

234.2



$

215.9














Net Income per Unit:












Basic net income per unit:












Common units

$

0.27



$

0.26



$

0.96



$

0.99


Class B units

$

(0.32)



$

(0.02)



$

(0.11)



$

0.21


Weighted-average number of units outstanding - basic:












Common units


220.4




192.6




213.5




186.8


Class B units


22.9




22.9




22.9




22.9


Diluted net income per unit:












Common units

$

0.21



$

0.26



$

0.90



$

0.99


Class B units

$



$

(0.02)



$

0.19



$

0.21


Weighted-average number of units outstanding - diluted:












Common units


243.2




192.6




221.2




186.8


Class B units





22.9




15.2




22.9


Cash distribution declared and paid to common units

$

0.5325



$

0.5325



$

1.5975



$

1.595


Cash distribution declared and paid to class B units

$

0.30



$

0.30



$

0.90



$

0.90


 

BOARDWALK PIPELINE PARTNERS, LP  
NET INCOME PER UNIT RECONCILIATION 
(Unaudited)

Basic net income per unit is calculated based on the weighted average number of units outstanding for the period.  Diluted net income per unit is calculated assuming that the class B units converted on the date that they became convertible, or July 1, 2013.

The following table provides a reconciliation of net income and the assumed allocation of net income to the common and class B units for purposes of computing basic and diluted net income per unit for the three months ended September 30, 2013, (in millions, except per unit data):   

 


Total



Common

Units



Class B

Units



General

Partner

and IDRs


Net income

$

61.7











Less: Net loss attributable to noncontrolling interests


(0.6)











Net income attributable to controlling interests


62.3











Declared distribution


141.9



$

129.5



$



$

12.4


Assumed allocation of undistributed net loss - basic


(79.6)




(70.7)




(7.3)




(1.6)


Assumed allocation of net income attributable to limited
    partner unitholders and general partner - basic

$

62.3



$

58.8



$

(7.3)



$

10.8


Allocation for diluted earnings per unit





(7.3)




7.3





Assumed allocation of net income attributable to limited
    partner unitholders and general partner - diluted

$

62.3



$

51.5



$



$

10.8


Weighted-average units outstanding - basic





220.4




22.9





Weighted-average units outstanding - diluted





243.2








Net income per unit - basic




$

0.27



$

(0.32)





Net income per unit - diluted




$

0.21



$





The following table provides a reconciliation of net income and the assumed allocation of net income to the common and class B units for purposes of computing net income per unit for the three months ended September 30, 2012, (in millions, except per unit data):

 


Total



Common

Units



Class B

Units



General

 Partner

and IDRs


Net income

$

58.2











Less: Net loss attributable to predecessor equity


(0.8)











Net income attributable to controlling interests


59.0











Declared distribution


128.2



$

110.6



$

6.8



$

10.8


Assumed allocation of undistributed net loss


(69.2)




(60.6)




(7.2)




(1.4)


Assumed allocation of net income attributable to limited
     partner unitholders and general partner

$

59.0



$

50.0



$

(0.4)



$

9.4


Weighted-average units outstanding





192.6




22.9





Net income per unit




$

0.26



$

(0.02)





The following table provides a reconciliation of net income and the assumed allocation of net income to the common and class B units for purposes of computing basic and diluted net income per unit for the nine months ended September 30, 2013, (in millions, except per unit data):   

 


Total



Common

Units



Class B

Units



General

Partner

and IDRs


Net income

$

233.5











Less: Net loss attributable to noncontrolling interests


(0.7)











Net income attributable to controlling interests


234.2











Declared distribution


405.7



$

357.5



$

13.7



$

34.5


Assumed allocation of undistributed net loss - basic


(171.5)




(151.9)




(16.2)




(3.4)


Assumed allocation of net income attributable to limited
    partner unitholders and general partner - basic

$

234.2



$

205.6



$

(2.5)



$

31.1


Allocation for diluted earnings per unit





(5.4)



5.4





Assumed allocation of net income attributable to limited
    partner unitholders and general partner - diluted

$

234.2



$

200.2



$

2.9



$

31.1


Weighted-average units outstanding - basic





213.5




22.9





Weighted-average units outstanding - diluted





221.2




15.2





Net income per unit - basic




$

0.96



$

(0.11)





Net income per unit - diluted




$

0.90



$

0.19





The following table provides a reconciliation of net income and the assumed allocation of net income to the common and class B units for purposes of computing net income per unit for the nine months ended September 30, 2012, (in millions, except per unit data):

 


Total



Common

Units



Class B

Units



General

 Partner

and IDRs


Net income

$

215.9











Less: Net loss attributable to predecessor equity


(0.6)











Net income attributable to controlling interests


216.5











Declared distribution


364.8



$

313.7



$

20.6



$

30.5


Assumed allocation of undistributed net loss


(148.3)




(129.5)




(15.8)




(3.0)


Assumed allocation of net income attributable to limited
     partner unitholders and general partner

$

216.5



$

184.2



$

4.8



$

27.5


Weighted-average units outstanding





186.8




22.9





Net income per unit




$

0.99



$

0.21





 

Contact:               

Investor Contact:
Molly Ladd Whitaker
866-913-2122
molly.whitaker@bwpmlp.com

Media Contact:
Joe Hollier
713-479-8670
joe.hollier@bwpmlp.com

               

 

SOURCE Boardwalk Pipeline Partners, LP



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