Boardwalk Pipeline Partners, LP - FORM 8-K - EX-99.1 - BWP EXHIBIT 99.1 - August 3, 2015

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8-K - BWP 8-K 2Q 2015 EARNINGS RELEASE - Boardwalk Pipeline Partners, LPbwp2015q28kearningsrelease.htm

Exhibit 99.1

News Release
 
 
 


BOARDWALK ANNOUNCES SECOND QUARTER 2015 RESULTS
AND QUARTERLY DISTRIBUTION OF $0.10 PER UNIT
HOUSTON, August 3, 2015 -- 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 August 20, 2015, to unitholders of record as of August 13, 2015.
The Partnership also announced its results for the second quarter ended June 30, 2015, which included the following items:

•
Operating revenues of $298.6 million for the quarter and $628.3 million for the six months ended June 30, 2015, a 2% increase and a 3% decrease from $293.4 million and $650.3 million in the comparable 2014 periods;
•
Net income attributable to controlling interests of $40.4 million for the quarter and $118.1 million for the six months ended June 30, 2015, a 30% decrease from $57.4 million and $167.6 million in each of the comparable 2014 periods;
•
Earnings before interest, taxes, depreciation and amortization (EBITDA) of $167.3 million for the quarter and $371.9 million for the six months ended June 30, 2015, a slight increase and a 4% decrease from $167.1 million and $387.5 million in the comparable 2014 periods; and
•
Distributable cash flow of $92.3 million for the quarter and $224.6 million for the six months ended June 30, 2015, a 26% decrease and a 21% decrease from $124.1 million and $285.9 million in the comparable 2014 periods.


Compared with the second quarter of 2014, the Partnership’s operating revenues and EBITDA were favorably impacted by the receipt of insurance proceeds related to a business interruption claim at Boardwalk Louisiana Midstream and additional revenues resulting from the ongoing Gulf South rate case. Storage and parking and lending revenues continued to be negatively impacted by unfavorable market conditions. Operating expenses for the second quarter 2015 were higher compared to 2014 due to the timing of maintenance project activities. The 2014 period was favorably impacted by $4.5 million as a result of a legal settlement.

For the six-month period, the Partnership’s operating revenues and EBITDA 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 favorable effects of the second quarter items discussed above. Operating expenses for the six-month period were impacted by the items discussed above. The six-month period 2014 results included an impairment charge related to the terminated Bluegrass Project.

Capital Program
Growth capital expenditures were $80.9 million and maintenance capital expenditures were $55.4 million for the six months ended June 30, 2015.





Exhibit 99.1



Conference Call

The Partnership has scheduled a conference call for August 3, 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 PIN number to access the call is 74493272.

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



Exhibit 99.1


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.



Exhibit 99.1


BOARDWALK PIPELINE PARTNERS, LP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Millions, except per unit amounts)
(Unaudited)
 
For the
Three Months Ended
June 30,
 
For the
Six Months Ended
June 30,
 
2015
 
2014
 
2015
 
2014
Operating Revenues:
 
 
 
 
 
 
 
 
 
 
 
Transportation
$
256.9

 
$
245.7

 
$
546.5

 
$
550.0

Parking and lending
 
2.8

 
 
9.2

 
 
5.6

 
 
18.4

Storage
 
20.9

 
 
22.1

 
 
40.2

 
 
50.9

Other
 
18.0

 
 
16.4

 
 
36.0

 
 
31.0

Total operating revenues
 
298.6

 
 
293.4

 
 
628.3

 
 
650.3

Operating Costs and Expenses:
 
 

 
 
 
 
 
 
 
 
 
Fuel and transportation
 
23.6

 
 
29.9

 
 
50.6

 
 
62.9

Operation and maintenance
 
54.6

 
 
43.9

 
 
97.0

 
 
86.6

Administrative and general
 
31.8

 
 
30.5

 
 
62.4

 
 
57.3

Depreciation and amortization
 
81.0

 
 
69.6

 
 
162.6

 
 
138.8

Asset impairment
 
—

 
 
1.4

 
 
0.1

 
 
8.6

Net gain on sale of operating assets
 
(0.1
)
 
 
(0.8
)
 
 
(0.1
)
 
 
(1.2
)
Taxes other than income taxes
 
21.8

 
 
22.4

 
 
47.0

 
 
48.2

Total operating costs and expenses
 
212.7

 
 
196.9

 
 
419.6

 
 
401.2

Operating income
 
85.9

 
 
96.5

 
 
208.7

 
 
249.1

Other Deductions (Income):
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
45.9

 
 
40.2

 
 
91.1

 
 
81.1

Interest income
 
(0.1
)
 
 
(0.2
)
 
 
(0.2
)
 
 
(0.3
)
Equity losses in unconsolidated affiliates
 
—

 
 
0.5

 
 
—

 
 
86.6

Miscellaneous other income, net
 
(0.4
)
 
 
—

 
 
(0.6
)
 
 
(0.1
)
Total other deductions
 
45.4

 
 
40.5

 
 
90.3

 
 
167.3

Income before income taxes
 
40.5

 
 
56.0

 
 
118.4

 
 
81.8

Income taxes
 
0.1

 
 
0.1

 
 
0.3

 
 
0.3

Net income
 
40.4

 
 
55.9

 
 
118.1

 
 
81.5

Net loss attributable to noncontrolling interests
 
—

 
 
(1.5
)
 
 
—

 
 
(86.1
)
Net income attributable to controlling interests
$
40.4

 
$
57.4

 
$
118.1

 
$
167.6

Net Income per Unit:
 
 
 
 
 
 
 
 
 
 
 
Net income per common unit
$
0.16

 
$
0.23

 
$
0.47

 
$
0.68

Weighted-average number of common units outstanding
 
250.3

 
 
243.3

 
 
247.3

 
 
243.3

Cash distribution declared and paid to common units
$
0.10

 
$
0.10

 
$
0.20

 
$
0.20




Exhibit 99.1


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
June 30,
 
For the
Six Months Ended
June 30,
 
2015
 
2014
 
2015
 
2014
Net income
$
40.4

 
$
55.9

 
$
118.1

 
$
81.5

Net loss attributable to noncontrolling interests
—

 
(1.5
)
 
—

 
(86.1
)
Net income attributable to controlling interests
40.4

 
57.4

 
118.1

 
167.6

Income taxes
0.1

 
0.1

 
0.3

 
0.3

Depreciation and amortization
81.0

 
69.6

 
162.6

 
138.8

Interest expense
45.9

 
40.2

 
91.1

 
81.1

Interest income
(0.1
)
 
(0.2
)
 
(0.2
)
 
(0.3
)
 EBITDA
167.3

 
167.1

 
371.9

 
387.5

Less:
 
 
 
 
 
 
 
Cash paid for interest, net of capitalized interest 
37.2

 
23.5

 
91.4

 
76.1

Maintenance capital expenditures
37.4

 
23.0

 
55.4

 
39.0

Add:
 
 
 
 
 
 
 
Bluegrass Project impairment, net of
   noncontrolling interest
—

 
—

 
—

 
10.0

Other (1)
(0.4
)
 
3.5

 
(0.5
)
 
3.5

Distributable Cash Flow
$
92.3

 
$
124.1

 
$
224.6

 
$
285.9


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




Exhibit 99.1



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 June 30, 2015, (in millions, except per unit data):
 
Total
 
Common
Units
 
General Partner
and IDRs
Net income
$
40.4

 
 
 
 
 
 
Declared distribution
 
25.6

 
$
25.1

 
$
0.5

Assumed allocation of undistributed net income
 
14.8

 
 
14.5

 
 
0.3

Assumed allocation of net income attributable to limited
partner unitholders and general partner
$
40.4

 
$
39.6

 
$
0.8

Weighted-average units outstanding
 
 
 
 
250.3

 
 
 
Net income per unit
 
 
 
$
0.16

 
 
 

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 June 30, 2014, (in millions, except per unit data):
 
Total
 
Common
Units
 
General Partner
and IDRs
Net income
$
55.9

 
 
 
 
 
 
Less: Net loss attributable to noncontrolling interests
 
(1.5
)
 
 
 
 
 
 
Net income attributable to controlling interests
 
57.4

 
 
 
 
 
 
Declared distribution
 
24.8

 
$
24.3

 
$
0.5

Assumed allocation of undistributed net income
 
32.6

 
 
32.0

 
 
0.6

Assumed allocation of net income attributable to limited
partner unitholders and general partner
$
57.4

 
$
56.3

 
$
1.1

Weighted-average units outstanding
 
 
 
 
243.3

 
 
 
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 units for purposes of computing net income per unit for the six months ended June 30, 2015, (in millions, except per unit data):
 
Total
 
Common
Units
 
General Partner
and IDRs
Net income
$
118.1

 
 
 
 
 
 
Declared distribution
 
51.1

 
$
50.1

 
$
1.0

Assumed allocation of undistributed net income
 
67.0

 
 
65.7

 
 
1.3

Assumed allocation of net income attributable to limited
partner unitholders and general partner
$
118.1

 
$
115.8

 
$
2.3

Weighted-average units outstanding
 
 
 
 
247.3

 
 
 
Net income per unit
 
 
 
$
0.47

 
 
 



Exhibit 99.1


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 six months ended June 30, 2014, (in millions, except per unit data):
 
Total
 
Common
Units
 
General Partner
and IDRs
Net income
$
81.5

 
 
 
 
 
 
Less: Net loss attributable to noncontrolling interests
 
(86.1
)
 
 
 
 
 
 
Net income attributable to controlling interests
 
167.6

 
 
 
 
 
 
Declared distribution
 
49.6

 
$
48.7

 
$
0.9

Assumed allocation of undistributed net income
 
118.0

 
 
115.6

 
 
2.4

Assumed allocation of net income attributable to limited
partner unitholders and general partner
$
167.6

 
$
164.3

 
$
3.3

Weighted-average units outstanding
 
 
 
 
243.3

 
 
 
Net income per unit
 
 
 
$
0.68

 
 
 





SOURCE:    Boardwalk Pipeline Partners, LP

INVESTOR CONTACTS:    
Molly Ladd Whitaker, 866-913-2122
Director of Investor Relations and Corporate Communications
ir@bwpmlp.com
or
Jamie Buskill, 713-479-8082
Senior VP, Chief Financial and Administrative Officer and Treasurer

MEDIA CONTACT:
Joe Hollier, 713-479-8670
Manager of Corporate Communications
joe.hollier@bwpmlp.com   



Boardwalk Pipeline Partners, LP Reports