Boardwalk Pipeline Partners Reports Second Quarter Earnings and Announces Increase in Quarterly Distribution to $0.38 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 June June: see month. 30, 2006, which included the following items: --Income before income taxes of $32.1 million for the quarter and $101.9 million for the six months ended June 30, 2006, a 41% and 19% increase from $22.8 million and $85.6 million in the comparable 2005 periods. --Operating revenues of $128.7 million for the quarter and $303.1 million for the six months ended June 30, 2006, a 9% and 13% increase from $118.3 million and $268.6 million in the comparable 2005 periods. --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 $65.4 million for the quarter and $168.9 million for the six months ended June 30, 2006, a 20% and 14% increase from $54.6 million and $148.7 million in the comparable 2005 periods. --The Partnership declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. a quarterly distribution of $0.38 per unit, an increase of $0.02 per unit, or 6%, from the distribution paid in April 2006. The financial information presented includes the results of operations of Boardwalk Pipeline Partners, LP and its subsidiaries and, for periods prior to the Partnership's initial public offering in November November: see month. 2005, 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. Subsequent to November 2005, with the exception of certain income-based state taxes, the Partnership no longer includes income taxes in its results of operations. As a result, for the quarter and six months ended June 30, 2006, the Partnership's net income approximates its income before income taxes. The Partnership stated that operating results for the quarter and six months ended June 30, 2006, were driven primarily by the following: --Higher demand for parking-and-lending and storage services due to favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. natural gas price spreads and high volatility in the forward price of natural gas. --Strong 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 Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and . The Partnership invested $16.0 million for the quarter and $28.2 million for the six months ended June 30, 2006 in maintenance capital. Expansion capital invested was $14.7 million for the quarter and $21.9 million for the six months ended June 30, 2006. Earnings Per Unit Earnings per limited partner unit of the Partnership were $0.35 for common units and $0.22 for subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. units for the second quarter of 2006. Earnings per limited partner unit for the six months ended June 30, 2006, were $0.95 for both common and subordinated units, which was reduced by an assumed 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 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 No. 03-6). Under EITF No. 03-6, earnings are allocated to participating securities in accordance with contractual participation rights assuming that all earnings for the period were distributed. The assumed allocation to the general partner's IDRs was a result of the Partnership's earnings exceeding the threshold in its partnership agreement for allocation of a portion of distributions to the IDRs. The Partnership did not make or declare TO DECLARE. To make known or publish. By tho constitution of the United States, congress have power to declare war. In this sense the word, declare, signifies, not merely to make it known that war exists, but also to make war and to carry it on. 4 Dall. 37; 1 Story, Const. Sec. any distribution to the general partner on account of its IDRs in the first or second quarters 2006. The following schedule provides a reconciliation of limited partners' interest in 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 common limited partner units in accordance with EITF No. 03-6 utilized in calculating earnings per common and subordinated limited partner unit.
For the For the Six
Quarter Ended Months Ended
June 30, 2006 June 30, 2006
-------------- -------------
Limited partners' interest in net income $31,262 $99,597
Less assumed allocation to incentive
distribution rights - 3,503
-------------- -------------
Net income available to limited partners 31,262 96,094
Less assumed allocation to
subordinated units 7,372 31,378
-------------- -------------
Net income available to common units $23,890 $64,716
============== =============
Quarterly Distribution The Partnership declared a quarterly distribution on its common, subordinated, and general partner units in the amount of $0.38 per unit, payable on August 18, 2006, to unit holders of record as of August 11, 2006. Conference Call The Partnership has scheduled a conference call for Monday Monday: see week. , July July: see month. 31, 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 second quarter results. Dial-in Dial-in: 800-510-9691 Passcode: 34835392 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 September September: see month. 30, 2006. Replay Dial-in: 888-286-8010 Replay Passcode: 29748492 Non-GAAP Financial Measure - EBITDA 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. 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 Partnership's EBITDA to its net income, the most directly comparable GAAP financial measure, for each of the periods presented below.
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
--------- --------- --------- ---------
Net Income $31,900 $13,705 $101,630 $51,562
Add:
Depreciation and amortization 18,727 17,864 37,410 35,059
Interest expense 15,215 15,074 30,847 29,739
Interest income (698) (594) (1,242) (746)
Interest income from
affiliates (7) (553) (7) (957)
Income taxes/charge-in-lieu
of income taxes 246 9,088 246 34,073
--------- --------- --------- ---------
EBITDA $65,383 $54,584 $168,884 $148,730
========= ========= ========= =========
About Boardwalk Boardwalk Pipeline Partners, LP is a limited partnership engaged, through its subsidiaries, 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 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 Partnership's overall business and financial performance, can be found in the reports and other documents filed by the Partnership 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 Partnership expressly disclaims any obligation or undertaking to release publicly any updates or revisions to its forward-looking statements to reflect any change in the Partnership'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 per unit amounts)
(Unaudited)
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
--------- -------- --------- ---------
Operating Revenues:
Gas transportation $105,390 $99,898 $256,402 $236,772
Parking and lending 9,414 6,687 22,931 13,076
Gas storage 7,196 5,240 16,814 10,232
Other 6,662 6,437 6,961 8,564
--------- -------- --------- ---------
Total operating revenues 128,662 118,262 303,108 268,644
--------- -------- --------- ---------
Operating Costs and Expenses:
Operation and maintenance 36,833 36,343 75,160 67,628
Administrative and general 22,844 19,838 50,232 37,979
Depreciation and amortization 18,727 17,864 37,410 35,059
Taxes other than income
taxes* 6,785 7,419 12,014 14,559
Net (gain) loss on disposal
of operating assets (2,391) 484 (2,205) 484
--------- -------- --------- ---------
Total operating costs and
expenses 82,798 81,948 172,611 155,709
--------- -------- --------- ---------
Operating Income 45,864 36,314 130,497 112,935
--------- -------- --------- ---------
Other (Income) Deductions:
Interest expense 15,215 15,074 30,847 29,739
Interest income (698) (594) (1,242) (746)
Interest income from
affiliates (7) (553) (7) (957)
Miscellaneous other income,
net (792) (406) (977) (736)
--------- -------- --------- ---------
Total other (income)
deductions 13,718 13,521 28,621 27,300
--------- -------- --------- ---------
Income before income taxes 32,146 22,793 101,876 85,635
Income taxes and charge-in-lieu
of income taxes* 246 9,088 246 34,073
--------- -------- --------- ---------
Net Income* $31,900 $13,705 $101,630 $51,562
========= ======== ========= =========
* Results of operations reflect a change in the tax status associated
with Boardwalk Pipeline Partners coincident with its initial public
offering and conversion to an MLP on November 15, 2005. Boardwalk
Pipeline Partners recorded a charge-in-lieu of income taxes and
certain state franchise taxes for the three and six month periods
ended June 30, 2005, and each period thereafter through the date of
the offering. A subsidiary of Boardwalk Pipeline Partners directly
incurs some income-based state taxes following the date of the
offering.
For the For the
Three Months Six Months
Ended Ended
June 30, 2006 June 30, 2006
------------- -------------
Calculation of limited partners' interest
in 2006 net income:
Net income to partners $31,900 $101,630
Less general partner's interest in net
income 638 2,033
------------- -------------
Limited partners' interest in net
income $31,262 $99,597
============= =============
Basic and diluted net income per limited
partner unit:
Common units $0.35 $0.95
============= =============
Subordinated units $0.22 $0.95
============= =============
Cash distribution to common and
subordinated unitholders and general
partner
unit equivalents $0.36 $0.54
============= =============
Weighted-average number of limited
partner units outstanding:
Common units 68,256,122 68,256,122
Subordinated units 33,093,878 33,093,878
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