Boardwalk Pipeline Partners Reports First Quarter Earnings and Announces Quarterly Distribution of $0.36 Per Unit.OWENSBORO Owensboro, city (1990 pop. 53,549), seat of Daviess co., W Ky., on the Ohio River; settled c.1800, inc. as a city 1866. It is an important tobacco market and a shipping point for a farm and oil region. , Ky. -- Boardwalk Pipeline Partners, LP (NYSE NYSE See: New York Stock Exchange :BWP BWP In currencies, this is the abbreviation for the Botswana Pula. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) announced today its results for the quarter ended March 31, 2006, which included the following items: --Income before income taxes of $69.7 million for the three months ended March 31, 2006, an 11% increase from $62.8 million in the comparable 2005 period. --Operating revenues of $174.4 million for the three months ended March 31, 2006, a 16% increase from $150.4 million in the comparable 2005 period. --Earnings before interest, taxes, depreciation and amortization (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) of $104.0 million for the three months ended March 31, 2006, a 10% increase from $94.7 million in the comparable 2005 period. --The Company has declared a quarterly distribution of $0.36 per unit, a $0.01 per unit increase from the $0.35 per unit minimum quarterly distribution disclosed in the Company's November 2005 initial public offering (IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. ). The financial information presented includes the results of operations of Boardwalk Pipeline Partners, LP and its subsidiaries and, for periods prior to the IPO, its predecessor, Boardwalk Pipelines Boardwalk Pipeline Partners, LP operates a natural gas transportation and storage system through its two subsidiaries. They maintain approximately 13,470 miles of pipelines, directly serving customers in 11 U.S. states. LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control (now known as Boardwalk Pipelines, LP) and its subsidiaries. In connection with its IPO, the Company converted to a limited partnership and accordingly no longer includes income taxes in its results of operations. As a result, for the first quarter of 2006, the Company's net income was equal to its income before income taxes. Financial Results for the Three Months Ended March 31, 2006 and 2005 The Company stated that operating results for the three months ended March 31, 2006 were driven primarily by the following: --higher demand for park-and-loan and storage services due to high volatility in the price of natural gas; --continuing wide west-to-east basis differentials from supply areas in East and South Texas to key markets and delivery interconnects in Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. , Mississippi Mississippi, state, United StatesMississippi (mĭs'əsĭp`ē), one of the Deep South states of the United States. It is bordered by Alabama (E), the Gulf of Mexico (S), Arkansas and Louisiana, with most of the border formed by and Florida; and --higher operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. due to several factors, including growth in the Company's operations and amortization of regulatory assets due to a rate case settlement. For the three months ended March 31, 2006 the Company invested $12.2 million in maintenance capital projects and $7.2 million for its expansion projects. Earnings Per Unit Earnings per limited partner unit of the Company were $0.58 for the first quarter of 2006, which was reduced by an allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of a portion of the Company's earnings to the general partner's incentive distribution rights (IDRs) in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting applicable to companies having two classes of securities (EITF EITF Emerging Issues Task Force EITF Edinburgh International Television Festival EITF Europe International Taekwon-Do Federation 03-6), notwithstanding that notwithstanding; although. See also: Notwithstanding the Company did not make any distribution to the general partner in the first quarter on account of its IDRs. This allocation to the general partner's IDRs resulted from the Company's first quarter earnings per unit exceeding the threshold in its partnership agreement for allocation of a portion of distributions to the IDRs. This resulted from the seasonal nature of the Company's business, with a higher portion of annual earnings typically generated in the first and fourth quarters of a calendar year relative to the second and third quarters. Rate Case Settlement The Company also announced today that its Texas Gas Transmission Texas Gas Transmission is a natural gas pipeline which brings gas from the Louisiana Gulf coast up through Arkansas, Mississippi, Tennessee, and Kentucky, to supply gas to Illinois, Indiana, and Ohio. It is owned by Loews Corporation. Its FERC code is 18. LLC subsidiary received an order from the Federal Energy Regulatory Commission The Federal Energy Regulatory Commission (FERC) is the United States federal agency with jurisdiction over electricity sales, wholesale electric rates, hydroelectric licensing, natural gas pricing, and oil pipeline rates. approving its uncontested Offer of Settlement in its current rate case proceeding, resolving all issues. The settlement provides that the effective date of Texas Gas' next general rate case shall not be earlier than November 1, 2010; however, the settlement contains no mandatory filing provision. The order issued on April 21, 2006, will become final if no requests for rehearing rehearing n. conducting a hearing again based on the motion of one of the parties to a lawsuit, petition or criminal prosecution, usually by the court or agency which originally heard the matter. are filed by May 22, 2006. Quarterly Distribution The Company declared a quarterly distribution on its common, subordinated, and general partners' units in the amount of $0.36 per unit, payable on May 19, 2006 to unit holders of record as of May 12, 2006. CONFERENCE CALL The Company has scheduled a conference call for Monday, May 1, 2006, at 10:00 a.m. CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT , to review the first quarter results. Dial-in Dial-in: 800-435-1398 Passcode: 96158064 Webcast The earnings call may be accessed via the Boardwalk website at www.boardwalkpipelines.com. Please go to the website at least 15 minutes before the broadcast to register and download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. Replay An audio replay will also be available on the Boardwalk website www.boardwalkpipelines.com immediately following the call until midnight June 30, 2006. Replay Dial-in: 888-286-8010 Replay Passcode: 71396916 Non-GAAP Financial Measure - EBITDA EBITDA is used as a supplemental financial measure by management and by external users of the Company's financial statements, such as investors, commercial banks, research analysts and rating agencies, to assess the Company'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. EBITDA should not be considered an alternative to net income, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , cash flow from operating activities or any other measure of financial performance or liquidity presented in accordance with generally accepted accounting principles (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). EBITDA is not necessarily comparable to a similarly titled measure of another company. The following table presents a reconciliation of the Company's EBITDA to its net income, the most directly comparable GAAP financial measure, for each of the periods presented below.
(Thousands of Dollars)
(Unaudited)
For the three months
ended March 31,
2006 2005
----------- ------------
Net income $ 69,730 $ 37,857
Add:
Depreciation and amortization 18,683 17,195
Interest expense 15,632 14,665
Income tax expense - 24,985
----------- ------------
EBITDA $ 104,045 $ 94,702
=========== ============
EPU EPU Energy Processing Unit EPU Economic Planning Unit (Malaysia) EPU E Pluribus Unum EPU European Payments Union (organization formed after WWII) EPU Emergency Power Unit Reconciliation The following schedule provides a reconciliation of the Net Income as reported to net income allocable al·lo·ca·ble adj. Capable of being allocated. Adj. 1. allocable - capable of being distributed allocatable, apportionable distributive - serving to distribute or allot or disperse to limited partner units in accordance with EITF No. 03-6 utilized in calculation earnings per limited partner unit.
(Thousands of Dollars)
(Unaudited)
For the three months
ended March 31,
2006
-----------
Net income $ 69,730
Less general partner's interest in net income 1,395
-----------
Limited partners' interest in net income 68,335
Less net income allocable to general partner's
incentive distribution rights based on assumed cash
distribution 9,960
-----------
Net income allocable to limited partner units in
accordance with EITF No. 03-6 $ 58,375
===========
About Boardwalk Boardwalk Pipeline Partners, LP is a limited partnership engaged, through its subsidiaries, Texas Gas Transmission, LLC and Gulf South Pipeline Company, LP, in the interstate in·ter·state adj. Involving, existing between, or connecting two or more states. n. One of a system of highways extending between the major cities of the 48 contiguous United States. Noun 1. transportation and storage of natural gas. Boardwalk owns and operates interstate natural gas pipeline systems, comprised of an aggregate of approximately 13,470 miles of pipeline and underground storage fields having aggregate working gas capacity of approximately 143 Bcf. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Statements contained in this press release which are not historical facts are "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are inherently uncertain and subject to a variety of risks that could cause actual results to differ materially from those expected by management. A discussion of the important risk factors and other considerations that could materially impact these matters, as well as the Company's overall business and financial performance, can be found in the reports and other documents filed by the Company and its predecessor with the Securities and Exchange Commission. Given these risk factors, investors and analysts should not place undue reliance on forward-looking statements. Any such forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to its forward-looking statements to reflect any change in the Company's expectations with regard thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. or any change in events, conditions or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or on which any forward-looking statement is based.
BOARDWALK PIPELINE PARTNERS, LP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Thousands of Dollars, except number of units and earnings per unit)
(Unaudited)
For the
Three Months Ended
March 31,
2006 2005
---------- ----------
Operating Revenues:
Gas transportation $164,529 $143,263
Gas storage 9,618 4,992
Other 299 2,127
--------- ----------
Total operating revenues 174,446 150,382
--------- ----------
Operating Costs and Expenses:
Operation and maintenance 38,327 31,285
Administrative and general 27,388 18,141
Depreciation and amortization 18,683 17,195
Taxes other than income taxes * 5,229 7,140
Net loss on disposal of operating assets 186 -
--------- ----------
Total operating costs and expenses 89,813 73,761
--------- ----------
Operating Income 84,633 76,621
--------- ----------
Other Deductions:
Interest expense 15,632 14,665
Interest (income) from affiliates - (404)
Miscellaneous other (income), net (729) (482)
--------- ----------
Total other deductions 14,903 13,779
--------- ----------
Income before income taxes 69,730 62,842
Charge-in-lieu of income taxes * - 24,985
--------- ----------
Net Income * $69,730 $37,857
========= ==========
* Results of operations reflect a change in the tax status
associated with Boardwalk Pipeline Partners coincident with its
initial public offering on November 15, 2005. Boardwalk Pipeline
Partners recorded certain state franchise taxes and a
charge-in-lieu of income taxes for the three-month period ended
March 31, 2005, and each period thereafter through the date of the
offering.
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