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Boardwalk Announces Second Quarter 2012 Results

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

Three Months Ended

June 30,

For the

Six Months Ended

June 30,

2012     2011 2012     2011
Net Income $ 65.1 $ 15.2 $ 157.7 $ 98.2
Income taxes 0.1 0.3 0.2
Depreciation and amortization 60.7 56.7 124.4 113.1
Interest expense 43.5 39.6 84.5 79.9
Interest income (0.1 ) (0.1 ) (0.2 ) (0.2 )
Loss on early retirement of debt       7.4  
EBITDA 169.3 111.4 366.7 298.6
Less:
Cash paid for interest, net of capitalized interest (1) 30.2 25.1 85.2 84.2
Maintenance capital expenditures (2) 16.7 26.3 36.4 41.7
Other (3) 0.1 0.1 0.2 0.3
Add:
Cash received for settlements 5.0 5.4
Loss on disposal of assets 1.4
Asset impairment 2.9   28.5   7.1   28.5  
Distributable Cash Flow $ 130.2   $ 88.4   $ 257.4   $ 202.3  
 
(1) The three and six months ended June 30, 2012, include a payment of $6.8 million related to the settlement of a treasury rate lock and the six months ended June 30, 2011, includes a payment of $7.4 million related to the early extinguishment of debt.
(2) The three and six months ended June 30, 2011, include $12.4 million of maintenance capital expenditures related to the Carthage compressor station fire incident.
(3) Includes non-cash items such as the equity component of allowance for funds used during construction.

About Boardwalk

Boardwalk Pipeline Partners, LP (NYSE:BWP) is a limited partnership engaged, through its subsidiaries, in the transportation, storage and gathering of natural gas. Boardwalk operates approximately 14,300 miles of pipeline and underground storage fields with aggregate working gas capacity of approximately 186 Bcf. Boardwalk is a subsidiary of Loews Corporation (NYSE: L), which holds 61% 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

Three Months Ended

June 30,

For the

Six Months Ended

June 30,

  2012       2011 2012     2011
Operating Revenues:
Gas transportation $ 245.0 $ 244.3 $ 532.5 $ 534.8
Parking and lending 7.8 3.1 11.8 6.3
Gas storage 18.9 11.7 38.7 25.5
Other   4.1     2.9     5.7     6.4  
Total operating revenues   275.8     262.0     588.7     573.0  
 
Operating Costs and Expenses:
Fuel and gas transportation 15.0 28.2 33.7 52.0
Operation and maintenance 42.5 42.1 79.7 77.2
Administrative and general 25.2 33.7 59.4 70.8
Depreciation and amortization 60.7 56.7 124.4 113.1
Asset impairment 2.9 28.5 7.1 28.5
Net (gain) loss on disposal of operating assets (0.6 ) (3.0 ) (3.8 ) 1.4
Taxes other than income taxes   21.6     21.2     46.1     44.9  
Total operating costs and expenses   167.3     207.4     346.6     387.9  
 
Operating income   108.5     54.6     242.1     185.1  
 
Other Deductions (Income):
Interest expense 41.5 37.6 80.5 75.9
Interest expense - affiliates 2.0 2.0 4.0 4.0
Loss on early retirement of debt 7.4
Interest income (0.1 ) (0.1 ) (0.2 ) (0.2 )
Miscellaneous other income, net   (0.1 )   (0.1 )   (0.2 )   (0.4 )
Total other deductions   43.3     39.4     84.1     86.7  
 
Income before income taxes 65.2 15.2 158.0 98.4
 
Income taxes   0.1         0.3     0.2  
 
Net Income $ 65.1   $ 15.2   $ 157.7   $ 98.2  
 
Net Income per Unit:
Basic and diluted net income per unit:
Common units $ 0.30   $ 0.07   $ 0.73   $ 0.49  
Class B units $ 0.07   $ (0.16 ) $ 0.26   $ 0.04  
Cash distribution declared and paid to common units $ 0.5325   $ 0.5225   $ 1.0625   $ 1.0425  
Cash distribution declared and paid to class B units $ 0.30   $ 0.30   $ 0.60   $ 0.60  
Weighted-average number of units outstanding:
Common units 184.9 172.0 183.8 170.9
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 June 30, 2012, (in millions, except per unit data):

               
Total

Common Units

Class B

Units

General Partner and IDRs

Net income $ 65.1
Less: Net income attributable to predecessor equity    
Net income attributable to limited partner unitholders

and general partner

65.1
Declared distribution $ 114.9   $ 98.5 $ 6.8 $ 9.6
Assumed allocation of undistributed net loss   (49.8 )   (43.5 )   (5.3 )   (1.0 )
Assumed allocation of net income attributable to

limited partner unitholders and general partner

$ 65.1   $ 55.0   $ 1.5   $ 8.6  
Weighted-average units outstanding 184.9 22.9
Net income per unit $ 0.30 $ 0.07
 

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 June 30, 2011, (in millions, except per unit data):

               
Total

Common Units

Class B Units

General Partner and IDRs

Net income $ 15.2
Declared distribution   106.9   $ 92.2 $ 6.9 $ 7.8
Assumed allocation of undistributed net loss   (91.7 )   (79.4 )   (10.5 )   (1.8 )
Assumed allocation of net income $ 15.2   $ 12.8   $ (3.6 ) $ 6.0  
Weighted average units outstanding 172.0 22.9
Net income per unit $ 0.07 $ (0.16 )
 

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 six months ended June 30, 2012, (in millions, except per unit data):

               
Total

Common Units

Class B Units

General Partner and IDRs

Net income $ 157.7
Less: Net income attributable to predecessor equity   (0.2 )
Net income attributable to limited partner unitholders

and general partner

157.5
Declared distribution $ 229.8   $ 196.9 $ 13.7 $ 19.2
Assumed allocation of undistributed net loss   (72.3 )   (63.1 )   (7.8 )   (1.4 )
Assumed allocation of net income attributable to

limited partner unitholders and general partner

$ 157.5   $ 133.8   $ 5.9   $ 17.8  
Weighted-average units outstanding 183.8 22.9
Net income per unit $ 0.73 $ 0.26
 

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 six months ended June 30, 2011, (in millions, except per unit data):

               
Total

Common Units

Class B Units

General Partner and IDRs

Net income $ 98.2
Declared distribution   209.8   $ 180.8 $ 13.8 $ 15.2
Assumed allocation of undistributed net loss   (111.6 )   (96.5 )   (12.9 )   (2.2 )
Assumed allocation of net income $ 98.2   $ 84.3   $ 0.9   $ 13.0  
Weighted average units outstanding 170.9 22.9
Net income per unit $ 0.49 $ 0.04




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