Boardwalk Announces Third Quarter 2016 Results And Quarterly Distribution Of $0.10 Per Unit

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Oct 31, 2016, 06:00 ET

HOUSTON, Oct. 31, 2016 /PRNewswire/ -- Boardwalk Pipeline Partners, LP, (NYSE:BWP) announced today that it has declared a quarterly cash distribution per common unit of $0.10 ($0.40 annualized) payable on November 17, 2016, to unitholders of record as of November 10, 2016.

The Partnership also announced its results for the third quarter ended September 30, 2016, which included the following items:

Operating revenues of $303.3 million for the quarter and $954.6 million for the nine months ended September 30, 2016, a 3% increase from $294.1 million and $922.4 million in the comparable 2015 periods. Operating revenues, less fuel and transportation expense, were $284.2 million for the quarter and $903.6 million for the nine months ended September 30, 2016, a 6% increase and a 7% increase from $269.0 million and $844.4 million in the comparable 2015 periods.
Net income of $47.3 million for the quarter and $214.0 million for the nine months ended September 30, 2016, a 23% increase and a 37% increase from $38.3 million and $156.4 million in the comparable 2015 periods;
Earnings before interest, taxes, depreciation and amortization (EBITDA) of $176.2 million for the quarter and $589.2 million for the nine months ended September 30, 2016, a 9% increase and an 11% increase from $161.2 million and $533.1 million in the comparable 2015 periods; and
Distributable cash flow of $90.0 million for the quarter and $379.0 million for the nine months ended September 30, 2016, an 8% increase and a 23% increase from $83.6 million and $308.2 million in the comparable 2015 periods.

Compared with the third quarter of 2015, the Partnership's operating revenues were favorably impacted by recently completed growth projects and an increase in the Partnership's parking and lending and storage services from improved market conditions.

For the nine-month period, the Partnership's operating revenues, net income and EBITDA were positively impacted by the items discussed above, as well as the Gulf South rate case and the return to service in mid-2015 of the Evangeline pipeline system.

Capital Program
Growth capital expenditures were $350.3 million and maintenance capital expenditures were $82.1 million for the nine months ended September 30, 2016.

Conference Call
The Partnership has scheduled a conference call for October 31, 2016, at 9:30 a.m. Eastern time to review the quarterly results, current market conditions and distribution amount. The earnings webcast 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 (855) 793-3255 for callers in the U.S. or (631) 485-4925 for callers outside the U.S. The Conference ID to access the call is 90369196.

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

Non-GAAP Financial Measures - EBITDA and Distributable Cash Flow
The Partnership uses non-GAAP measures to evaluate its business and performance, including EBITDA and distributable cash flow. 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 midstream portion of the natural gas and natural gas liquids industry. 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.

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). EBITDA and distributable cash flow are not necessarily comparable to similarly titled measures of another company.

Tax Notification
This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat 100% of Boardwalk's distributions to foreign investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, Boardwalk's distributions to foreign investors are subject to federal income tax withholding at the highest applicable tax rate.

About Boardwalk
Boardwalk Pipeline Partners, LP (NYSE: BWP) is a midstream master limited partnership that transports and stores natural gas and liquids for its customers. 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,
	2016		2015		2016		2015
Operating Revenues:
Transportation	$	259.6	$	255.6	$	835.3	$	802.1
Parking and lending		4.9		2.3		13.4		7.9
Storage		23.4		20.4		68.0		60.6
Other		15.4		15.8		37.9		51.8
Total operating revenues		303.3		294.1		954.6		922.4
Operating Costs and Expenses:
Fuel and transportation		19.1		25.1		51.0		78.0
Operation and maintenance		52.1		54.0		143.8		148.7
Administrative and general		34.4		31.7		104.6		94.1
Depreciation and amortization		80.6		79.8		238.7		242.4
Asset impairment		—		—		—		0.1
Net gain on sale of operating assets		(0.1)		(0.1)		(0.1)		(0.2)
Taxes other than income taxes		23.5		22.9		72.0		69.9
Total operating costs and expenses		209.6		213.4		610.0		633.0
Operating income		93.7		80.7		344.6		289.4
Other Deductions (Income):
Interest expense		48.4		43.1		136.4		134.2
Interest income		(0.1)		(0.1)		(0.3)		(0.3)
Miscellaneous other income, net		(1.9)		(0.7)		(5.9)		(1.3)
Total other deductions		46.4		42.3		130.2		132.6
Income before income taxes		47.3		38.4		214.4		156.8
Income taxes		—		0.1		0.4		0.4
Net Income	$	47.3	$	38.3	$	214.0	$	156.4
Net Income per Unit:
Net income per common unit	$	0.19	$	0.15	$	0.84	$	0.62
Weighted-average number of common units outstanding		250.3		250.3		250.3		248.3
Cash distribution declared and paid to common units	$	0.10	$	0.10	$	0.30	$	0.30

The following table presents a reconciliation of the Partnership's 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,
	2016		2015		2016		2015
Net Income	$	47.3	$	38.3	$	214.0	$	156.4
Income taxes	—		0.1		0.4		0.4
Depreciation and amortization	80.6		79.8		238.7		242.4
Interest expense	48.4		43.1		136.4		134.2
Interest income	(0.1)		(0.1)		(0.3)		(0.3)
EBITDA	176.2		161.2		589.2		533.1
Less:
Cash paid for interest, net of capitalized interest	43.6		46.1		122.3		137.5
Maintenance capital expenditures	40.7		37.1		82.1		92.5
Add:
Proceeds from legal settlement	—		6.2		—		6.2
Other ⁽¹⁾	(1.9)		(0.6)		(5.8)		(1.1)
Distributable Cash Flow	$	90.0	$	83.6	$	379.0	$	308.2

(1) Includes other non-cash items, such as the equity component of allowance for funds used during construction.

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

The following table provides a reconciliation of net income and the assumed allocation of net income to the common units for purposes of computing net income per unit for the three months ended September 30, 2016, (in millions, except per unit data):

	Total		Common Units		General Partner and IDRs
Net income	$	47.3
Declared distribution		25.5	$	25.0	$	0.5
Assumed allocation of undistributed net income		21.8		21.4		0.4
Assumed allocation of net income attributable to limited partner unitholders and general partner	$	47.3	$	46.4	$	0.9
Weighted-average units outstanding				250.3
Net income per unit			$	0.19

	Total		Common Units		General Partner and IDRs
Net income	$	38.3
Declared distribution		25.5	$	25.0	$	0.5
Assumed allocation of undistributed net income		12.8		12.5		0.3
Assumed allocation of net income attributable to limited partner unitholders and general partner	$	38.3	$	37.5	$	0.8
Weighted-average units outstanding				250.3
Net income per unit			$	0.15

The following table provides a reconciliation of net income and the assumed allocation of net income to the common units for purposes of computing net income per unit for the nine months ended September 30, 2016, (in millions, except per unit data):

	Total		Common Units		General Partner and IDRs
Net income	$	214.0
Declared distribution		76.6	$	75.1	$	1.5
Assumed allocation of undistributed net income		137.4		134.7		2.7
Assumed allocation of net income attributable to limited partner unitholders and general partner	$	214.0	$	209.8	$	4.2
Weighted-average units outstanding				250.3
Net income per unit			$	0.84

	Total		Common Units		General Partner and IDRs
Net income	$	156.4
Declared distribution		76.6	$	75.1	$	1.5
Assumed allocation of undistributed net income		79.8		78.2		1.6
Assumed allocation of net income attributable to limited partner unitholders and general partner	$	156.4	$	153.3	$	3.1
Weighted-average units outstanding				248.3
Net income per unit			$	0.62