Boardwalk Announces Third Quarter 2012 Results

  Boardwalk Announces Third Quarter 2012 Results

          Also Announces Quarterly Distribution of $0.5325 Per Unit

Business Wire

HOUSTON -- October 29, 2012

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 15, 2012, to unitholders of record as of
November 8, 2012.

The Partnership also announced its results for the third quarter and nine
months ended September 30, 2012, which included the following items:

  *Operating revenues of $270.6 million for the quarter and $859.3 million
    for the nine months ended September 30, 2012, a 1% and 2% increase from
    $268.9 million and $841.9 million in the comparable 2011 periods;
  *Net income of $59.0 million for the quarter and $216.7 million for the
    nine months ended September 30, 2012, a 25% and 49% increase from $47.2
    million and $145.4 million in the comparable 2011 periods;
  *Earnings before interest, taxes, depreciation and amortization (EBITDA) of
    $162.8 million for the quarter and $529.5 million for the nine months
    ended September 30, 2012, a 10% and 18% increase from $148.4 million and
    $447.0 million in the comparable 2011 periods; and
  *Distributable cash flow of $98.0 million for the quarter and $354.2
    million for the nine months ended September 30, 2012, a 53% and 34%
    increase from $64.1 million and $265.0 million in the comparable 2011
    periods.

Operating revenues for the third quarter of 2012 increased $1.7 million
compared to the third quarter of 2011, driven by $12.2 million of revenues
contributed by Boardwalk HP Storage Company, LLC (HP Storage) which was
acquired in the first quarter of 2012, and an increase in parking and lending
and storage revenues of $5.4 million. The increases in operating revenues were
offset by the effects of lower natural gas prices on fuel revenues and lower
interruptible transportation service revenues from decreases in basis spreads
between locations on the pipelines. Including expenses from HP Storage,
operating expenses for the quarter were favorable by $8.6 million compared to
the 2011 period mainly due to lower fuel expenses from lower natural gas
prices, lower maintenance project costs mainly due to timing and lower general
and administrative expenses due to cost management activities. The 2011 period
was favorably impacted by $6.2 million of gains from the sale of storage gas.

Operating results on a year-to-date basis were impacted by the revenue and
expense factors discussed above. The 2011 operating expenses included a $28.6
million material and supplies impairment, a $5.0 million charge related to a
fire at a compressor station near Carthage, Texas and $9.2 million of gains
from the sale of storage gas.

Capital Program

Growth capital expenditures were $84.2 million and maintenance capital
expenditures were $51.3 million for the nine months ended September 30, 2012.

Conference Call

The Partnership has scheduled a conference call for October 29, 2012, at 9:00
a.m. Eastern time to review the third quarter and nine months' results. The
earnings call may be accessed via the Boardwalk website at www.bwpmlp.com.
Please go to 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 (800) 299-7089 for callers in the U.S. or (617)
801-9714 for callers outside the U.S. The PIN number to access the call is
29246984.

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 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.

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.

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               For the
                                   Three Months Ended   Nine Months Ended
                                   September 30,         September 30,
                                   2012      2011       2012       2011
Net Income                         $ 59.0     $ 47.2     $ 216.7     $ 145.4
Income taxes                       0.1        0.1        0.4         0.3
Depreciation and amortization      60.4       55.8       184.8       168.9
Interest expense                   43.5       39.6       128.0       119.5
Interest income                    (0.2   )   (0.1   )   (0.4    )   (0.3    )
Loss on early retirement of debt   —         5.8       —          13.2    
EBITDA                             162.8      148.4      529.5       447.0
Less:
Cash paid for interest, net of     57.1       65.4       142.3       149.6
capitalized interest^(1)
Maintenance capital                14.9       18.9       51.3        60.6
expenditures^(2)
Other^(3)                         0.1        0.1        0.3         0.4
Add:
Cash received for settlements^(4) 5.0        —          10.4        —
Loss on disposal of assets         1.2        —          —           —
Asset impairment                   1.1       0.1       8.2        28.6    
Distributable Cash Flow            $ 98.0    $ 64.1    $ 354.2    $ 265.0 

      The three and nine months ended September 30, 2012, include payments of
      $2.4 million and $9.2 million related to the early settlement of an
(1)  interest rate swap and the settlement of a treasury rate lock and the
      three and nine months ended September 30, 2011, include payments of $5.8
      million and $13.2 million related to the early extinguishment of debt.
      The three and nine months ended September 30, 2011, includes $2.6
(2)   million and $15.0 million of maintenance capital expenditures related to
      the fire at a compressor station near Carthage, Texas.
(3)   Includes non-cash items such as the equity component of allowance for
      funds used during construction.
      Represents proceeds received related to insurance recoveries associated
(4)   with the fire at a compressor station near Carthage, Texas, and a legal
      settlement.

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 14,540 miles of pipelines and underground storage
caverns with an aggregate working gas capacity of approximately 197 billion
cubic feet and liquids capacity of approximately 20 million barrels. Boardwalk
is a subsidiary of Loews Corporation (NYSE: L), which holds 55% 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                  For the
                              Three Months Ended      Nine Months Ended     
                              September 30,            September 30,
                               2012       2011      2012       2011     
Operating Revenues:
Gas transportation            $ 241.2      $ 251.8     $ 773.7      $ 786.6
Parking and lending             8.3          2.2         20.1         8.5
Gas storage                     18.3         12.0        57.0         37.5
Other                          2.8        2.9       8.5        9.3    
Total operating revenues       270.6      268.9     859.3      841.9  
                                                                      
Operating Costs and Expenses:
Fuel and gas transportation     18.2         26.7        51.9         78.7
Operation and maintenance       39.4         45.9        119.1        123.1
Administrative and general      24.5         31.1        83.9         101.9
Depreciation and amortization   60.4         55.8        184.8        168.9
Asset impairment                1.1          0.1         8.2          28.6
Net loss (gain) on disposal     1.2          (5.3  )     (2.6   )     (3.9   )
of operating assets
Taxes other than income taxes  23.1       22.2      69.2       67.1   
Total operating costs and      167.9      176.5     514.5      564.4  
expenses
                                                                      
Operating income               102.7      92.4      344.8      277.5  
                                                                      
Other Deductions (Income):
Interest expense                41.5         37.6        122.0        113.5
Interest expense - affiliates   2.0          2.0         6.0          6.0
Loss on early retirement of     —            5.8         —            13.2
debt
Interest income                 (0.2   )     (0.1  )     (0.4   )     (0.3   )
Miscellaneous other expense    0.3        (0.2  )    0.1        (0.6   )
(income), net
Total other deductions         43.6       45.1      127.7      131.8  
                                                                      
Income before income taxes      59.1         47.3        217.1        145.7
Income taxes                   0.1        0.1       0.4        0.3    
Net Income                    $ 59.0      $ 47.2     $ 216.7     $ 145.4  
                                                                      
Net Income per Unit:
Basic and diluted net income
per unit:
Common units                  $ 0.26      $ 0.23     $ 0.99      $ 0.72   
Class B units                 $ (0.02  )   $ —        $ 0.21      $ 0.04   
Cash distribution declared    $ 0.5325    $ 0.525    $ 1.5950    $ 1.5675 
and paid to common units
Cash distribution declared    $ 0.30      $ 0.30     $ 0.90      $ 0.90   
and paid to class B units
Weighted-average number of
units outstanding:
Common units                    192.6        175.7       186.8        172.5
Class B units                   22.9         22.9        22.9         22.9
                                                                             

                       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 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):

                                              Common      Class B     General
                                 Total      Units      Units      Partner
                                                                      and IDRs
Net income                        $ 59.0
Declared distribution             $ 128.2    $ 110.6     $ 6.8       $ 10.8
Assumed allocation of              (69.2 )    (60.6 )    (7.2  )    (1.4 )
undistributed net loss
Assumed allocation of net
income attributable to limited    $ 59.0     $ 50.0     $ (0.4  )   $ 9.4  
partner unitholders and general
partner
Weighted-average units                          192.6       22.9
outstanding
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 net income per unit for the three months ended September 30, 2011,
(in millions, except per unit data):

                                               Common      Class B    General
                                  Total      Units      Units     Partner
                                                                      and IDRs
Net income                         $ 47.2
Declared distribution               107.8    $ 92.7      $ 6.9      $ 8.2
Assumed allocation of               (60.6 )    (52.5 )    (6.9 )    (1.2 )
undistributed net loss
Assumed allocation of net income   $ 47.2     $ 40.2     $ —       $ 7.0  
Weighted average units                           175.7       22.9
outstanding
Net income per unit                            $ 0.23      $ —

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):

                                             Common       Class B     General
                               Total       Units       Units      Partner
                                                                      and IDRs
Net income                      $ 216.7
Less: Net income attributable    (0.2   )
to predecessor equity
Net income attributable to
limited partner unitholders       216.5
and general partner
Declared distribution           $ 364.8     $ 313.7      $ 20.6      $ 30.5
Assumed allocation of            (148.3 )    (129.5 )    (15.8 )    (3.0 )
undistributed net loss
Assumed allocation of net
income attributable to          $ 216.5     $ 184.2     $ 4.8      $ 27.5 
limited partner unitholders
and general partner
Weighted-average units                         186.8        22.9
outstanding
Net income per unit                          $ 0.99       $ 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 nine months ended September 30, 2011,
(in millions, except per unit data):

                                             Common       Class B     General
                               Total       Units       Units      Partner
                                                                      and IDRs
Net income                      $ 145.4
Declared distribution            317.6     $ 273.6      $ 20.6      $ 23.4
Assumed allocation of            (172.2 )    (149.0 )    (19.7 )    (3.5 )
undistributed net loss
Assumed allocation of net       $ 145.4     $ 124.6     $ 0.9      $ 19.9 
income
Weighted average units                         172.5        22.9
outstanding
Net income per unit                          $ 0.72       $ 0.04

Contact:

Boardwalk Pipeline Partners, LP
Molly Ladd Whitaker, 866-913-2122
Director of Investor Relations and Corporate Communications
or
Jamie Buskill, 713-479-8082
Senior VP, Chief Financial and Administrative Officer
 
Press spacebar to pause and continue. Press esc to stop.