Boardwalk Announces Third Quarter 2015 Results And Quarterly Distribution Of $0.10 Per Unit

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Nov 02, 2015, 06:00 ET

HOUSTON, Nov. 2, 2015 /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 19, 2015, to unitholders of record as of November 12, 2015.

The Partnership also announced its results for the third quarter ended September 30, 2015, which included the following items:

Operating revenues of $294.1 million for the quarter and $922.4 million for the nine months ended September 30, 2015, a 5% increase and a 1% decrease from $278.9 million and $929.2 million in the comparable 2014 periods;
Net income attributable to controlling interests of $38.3 million for the quarter and $156.4 million for the nine months ended September 30, 2015, a 31% increase and a 21% decrease from $29.2 million and $196.8 million in each of the comparable 2014 periods;
Earnings before interest, taxes, depreciation and amortization (EBITDA) of $161.2 million for the quarter and $533.1 million for the nine months ended September 30, 2015, a 14% and a 1% increase from $141.4 million and $528.9 million in the comparable 2014 periods; and
Distributable cash flow of $83.6 million for the quarter and $308.2 million for the nine months ended September 30, 2015, a 47% increase and a 10% decrease from $56.8 million and $342.7 million in the comparable 2014 periods.

Compared with the third quarter of 2014, the Partnership's operating revenues and EBITDA were favorably impacted by recently completed growth projects, additional revenues resulting from the Gulf South rate case and the acquisition of the Evangeline pipeline system, partially offset by contract expirations and renewals at lower rates. Operating expenses for the third quarter 2015 were higher compared to 2014 primarily due to the timing of maintenance activities.

For the nine-month period 2015, the Partnership's operating revenues were negatively impacted by the relatively normal 2015 winter season compared to the unusually cold and sustained winter of 2014, although the impact was partly offset by the receipt of insurance proceeds related to a business interruption claim at Boardwalk Louisiana Midstream. Operating expenses for the nine-month period were impacted by the items discussed above. The nine-month period 2014 results included an impairment charge related to the terminated Bluegrass Project.

Capital Program

Growth capital expenditures were $148.6 million and maintenance capital expenditures were $92.5 million for the nine months ended September 30, 2015.

Conference Call

The Partnership has scheduled a conference call for November 2, 2015, 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 number to access the call is 54271918.

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.

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. 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,
	2015		2014		2015		2014
Operating Revenues:
Transportation	$	255.6	$	238.9	$	802.1	$	788.9
Parking and lending		2.3		3.0		7.9		21.4
Storage		20.4		19.2		60.6		70.1
Other		15.8		17.8		51.8		48.8
Total operating revenues		294.1		278.9		922.4		929.2
Operating Costs and Expenses:
Fuel and transportation		23.9		31.9		74.5		94.8
Operation and maintenance		55.2		50.3		152.2		136.9
Administrative and general		31.7		31.8		94.1		89.1
Depreciation and amortization		79.8		72.2		242.4		211.0
Asset impairment		—		—		0.1		8.6
Net (gain) loss on disposal of operating assets		(0.1)		0.1		(0.2)		(1.1)
Taxes other than income taxes		22.9		24.1		69.9		72.3
Total operating costs and expenses		213.4		210.4		633.0		611.6
Operating income		80.7		68.5		289.4		317.6
Other Deductions (Income):
Interest expense		43.1		40.0		134.2		121.1
Interest income		(0.1)		(0.1)		(0.3)		(0.4)
Equity losses in unconsolidated affiliates		—		0.3		—		86.9
Miscellaneous other income, net		(0.7)		(0.2)		(1.3)		(0.3)
Total other deductions		42.3		40.0		132.6		207.3
Income before income taxes		38.4		28.5		156.8		110.3
Income taxes		0.1		0.1		0.4		0.4
Net income		38.3		28.4		156.4		109.9
Net loss attributable to noncontrolling interests		—		(0.8)		—		(86.9)
Net income attributable to controlling interests	$	38.3	$	29.2	$	156.4	$	196.8
Net Income per Unit:
Net income per common unit	$	0.15	$	0.12	$	0.62	$	0.79
Weighted-average number of common units outstanding		250.3		243.3		248.3		243.3
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,
	2015		2014		2015		2014
Net income	$	38.3	$	28.4	$	156.4	$	109.9
Net loss attributable to noncontrolling interests	—		(0.8)		—		(86.9)
Net income attributable to controlling interests	38.3		29.2		156.4		196.8
Income taxes	0.1		0.1		0.4		0.4
Depreciation and amortization	79.8		72.2		242.4		211.0
Interest expense	43.1		40.0		134.2		121.1
Interest income	(0.1)		(0.1)		(0.3)		(0.4)
EBITDA	161.2		141.4		533.1		528.9
Less:
Cash paid for interest, net of capitalized interest	46.1		51.5		137.5		127.6
Maintenance capital expenditures	37.1		24.9		92.5		63.9
Base gas capital expenditures	—		14.7		—		14.7
Add:
Proceeds from legal settlement	6.2		6.3		6.2		6.3
Goodwill impairment	—		—		—		—
Bluegrass Project impairment, net of noncontrolling interest	—		—		—		10.0
Other ⁽¹⁾	(0.6)		0.2		(1.1)		3.7
Distributable Cash Flow	$	83.6	$	56.8	$	308.2	$	342.7


(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, 2015, (in millions, except per unit data):

	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

	Total		Common Units		General Partner and IDRs
Net income	$	28.4
Less: Net loss attributable to noncontrolling interests		(0.8)
Net income attributable to controlling interests		29.2
Declared distribution		24.8	$	24.3	$	0.5
Assumed allocation of undistributed net income		4.4		4.3		0.1
Assumed allocation of net income attributable to limited partner unitholders and general partner	$	29.2	$	28.6	$	0.6
Weighted-average units outstanding				243.3
Net income per unit			$	0.12

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, 2015, (in millions, except per unit data):

	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

	Total		Common Units		General Partner and IDRs
Net income	$	109.9
Less: Net loss attributable to noncontrolling interests		(86.9)
Net income attributable to controlling interests		196.8
Declared distribution		74.5	$	73.0	$	1.5
Assumed allocation of undistributed net income		122.3		119.9		2.4
Assumed allocation of net income attributable to limited partner unitholders and general partner	$	196.8	$	192.9	$	3.9
Weighted-average units outstanding				243.3
Net income per unit			$	0.79