Boardwalk Announces First Quarter 2017 Results And Quarterly Distribution Of $0.10 Per Unit

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May 01, 2017, 06:00 ET

HOUSTON, May 1, 2017 /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 May 18, 2017, to unitholders of record as of May 11, 2017.

The Partnership also announced its results for the first quarter ended March 31, 2017, which included the following items:

Operating revenues of $367.0 million, a 6% increase from $345.0 million in the comparable 2016 period. Operating revenues, less fuel and transportation expense, were $347.8 million, a 7% increase from $324.7 million in the comparable 2016 period;
Net income of $119.3 million, an 18% increase from $101.0 million in the comparable 2016 period;
Earnings before interest, taxes, depreciation and amortization (EBITDA) of $246.2 million, an 11% increase from $222.7 million in the comparable 2016 period; and
Distributable cash flow of $176.1 million, a 10% increase from $160.1 million in the comparable 2016 period.

Compared with the first quarter of 2016, the Partnership's operating revenues in the first quarter of 2017 were favorably impacted by recently completed growth projects and an increase in the Partnership's parking and lending and storage revenues from improved market conditions.

Capital Program

Growth capital expenditures were $108.9 million and maintenance capital expenditures were $24.6 million for the three months ended March 31, 2017.

Conference Call

The Partnership has scheduled a conference call for May 1, 2017, 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 5389383.

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 as an approximation of net operating revenues generated by the Partnership, that when realized in cash, will be available to be distributed 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 primarily 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 March 31,
	2017		2016
Operating Revenues:
Transportation	$	318.6	$	305.9
Parking and lending		5.4		4.1
Storage		23.4		21.0
Other		19.6		14.0
Total operating revenues		367.0		345.0
Operating Costs and Expenses:
Fuel and transportation		19.2		20.3
Operation and maintenance		40.4		43.4
Administrative and general		34.6		34.7
Depreciation and amortization		80.6		79.0
Taxes other than income taxes		27.4		26.0
Total operating costs and expenses		202.2		203.4
Operating income		164.8		141.6
Other Deductions (Income):
Interest expense		46.2		42.6
Interest income		(0.1)		(0.1)
Miscellaneous other income		(0.8)		(2.1)
Total other deductions		45.3		40.4
Income before income taxes		119.5		101.2
Income taxes		0.2		0.2
Net income	$	119.3	$	101.0
Net Income per Unit:
Net income per common unit	$	0.47	$	0.40
Weighted-average number of common units outstanding		250.3		250.3
Cash distribution declared and paid to common units	$	0.10	$	0.10

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 March 31,
	2017		2016
Net income	$	119.3	$	101.0
Income taxes	0.2		0.2
Depreciation and amortization	80.6		79.0
Interest expense	46.2		42.6
Interest income	(0.1)		(0.1)
EBITDA	246.2		222.7
Less:
Cash paid for interest, net of capitalized interest ⁽¹⁾	44.7		46.0
Maintenance capital expenditures	24.6		14.6
Other⁽²⁾	0.8		2.0
Distributable Cash Flow	$	176.1	$	160.1

(1) The three months ended March 31, 2017, includes $1.5 million of payments related to the settlement of interest rate derivatives.

(2) Includes other non-cash items, such as asset impairments, the net gain on sale of operating assets and the related proceeds and 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 March 31, 2017, (in millions, except per unit data):

	Total		Common Units		General Partner and IDRs
Net income	$	119.3
Declared distribution		25.5	$	25.0	$	0.5
Assumed allocation of undistributed net income		93.8		91.9		1.9
Assumed allocation of net income attributable to limited partner unitholders and general partner	$	119.3	$	116.9	$	2.4
Weighted-average units outstanding				250.3
Net income per unit			$	0.47

	Total		Common Units		General Partner and IDRs
Net income	$	101.0
Declared distribution		25.5	$	25.0	$	0.5
Assumed allocation of undistributed net income		75.5		74.0		1.5
Assumed allocation of net income attributable to limited partner unitholders and general partner	$	101.0	$	99.0	$	2.0
Weighted-average units outstanding				250.3
Net income per unit			$	0.40