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Boardwalk Announces Fourth 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 December 31,

 

For the Year Ended December 31,

2012   2011 2012   2011

Net Income

$ 90.1 $ 71.6 $ 306.0 $ 217.0
Income taxes 0.1 0.1 0.5 0.4
Depreciation and amortization 67.5 58.4 252.3 227.3
Interest expense 40.4 40.4 168.4 159.9
Interest income (0.3 ) (0.1 ) (0.7 ) (0.4 )
Loss on early retirement of debt    

 

13.2

 

EBITDA

197.8 170.4 726.5 617.4

Less:

Cash paid for interest, net of capitalized interest  (1)

27.5 23.1 169.8 172.7

Maintenance capital expenditures  (2)

28.5 34.0 79.8 94.6

Other  (3)

0.1 0.2 0.4 0.6
Add:

Cash received for settlements  (4)

9.6 10.4 9.6
Proceeds from sale of operating assets 0.4 14.0 5.9 31.5
Net (gain) loss on disposal of assets 0.3 1.5 (2.3 ) (2.4 )
Asset impairment 0.9   1.9   9.1   30.5  
Distributable Cash Flow $ 143.3   $ 140.1   $ 499.6   $ 418.7  
(1)   The year ended December 31, 2012, includes payments of $9.6 million related to the settlements of interest rate derivatives and the year ended December 31, 2011, includes premium payments of $21.0 million related to the early extinguishment of debt.
(2) The year ended December 31, 2011, includes $14.3 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.
(4) Represents proceeds received related to insurance recoveries associated with a 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 14,410 miles of natural gas and liquids pipelines and underground storage caverns with an aggregate working gas capacity of approximately 201 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

Three Months Ended

December 31,

  For the

Year Ended

December 31,

2012   2011 2012   2011
Operating Revenues:
Gas transportation $ 284.6

$

280.6 $ 1,058.3 $ 1,067.2
Parking and lending 7.9 3.5 28.0 12.0
Gas storage 27.7 14.7 84.7 52.2
Other   5.5     2.2     14.0     11.5  
Total operating revenues   325.7     301.0     1,185.0     1,142.9  
 
Operating Costs and Expenses:
Fuel and gas transportation 27.5 24.1 79.4 102.8
Operation and maintenance 47.1 45.9 166.2 169.0
Administrative and general 30.2 35.3 115.3 137.2
Depreciation and amortization 67.5 58.4 252.3 227.3
Asset impairment 0.9 1.9 9.1 30.5
Net loss (gain) on disposal of operating assets 0.3 1.5 (2.3 ) (2.4 )
Taxes other than income taxes   22.0     22.2     91.2     89.3  
Total operating costs and expenses   195.5     189.3     711.2     753.7  
 
Operating income   130.2     111.7     473.8     389.2  
 
Other Deductions (Income):
Interest expense 39.5 38.4 161.5 151.9
Interest expense - affiliates 0.9 2.0 6.9 8.0
Loss on early retirement of debt 13.2
Interest income (0.3 ) (0.1 ) (0.7 ) (0.4 )
Miscellaneous other expense (income), net   (0.1 )   (0.3 )   (0.4 )   (0.9 )
Total other deductions   40.0     40.0     167.3     171.8  
 
Income before income taxes 90.2 71.7 306.5 217.4
 
Income taxes   0.1     0.1     0.5     0.4  
 
Net Income $ 90.1  

$

71.6   $ 306.0   $ 217.0  
 
Net Income per Unit:
Basic and diluted net income per unit:
Common units $ 0.38  

$

0.36   $ 1.37   $ 1.09  
Class B units $ 0.14  

$

0.11   $ 0.36   $ 0.14  
 
Cash distribution declared and paid to common units $ 0.5325  

$

0.5275   $ 2.1275   $ 2.095  
 
Cash distribution declared and paid to class B units $ 0.30  

$

0.30   $ 1.20   $ 1.20  
 
Weighted-average number of units outstanding:
Common units 207.4 175.7 191.9 173.3
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 December 31, 2012, (in millions, except per unit data):

  Total  

Common Units

 

Class B Units

 

General Partner and IDRs

Net income $ 90.1

Add: Net loss attributable to predecessor equity

  (1.5 )

Net income attributable to limited partner unitholders and general partner

 

  91.6  
Declared distribution $ 128.2   $ 110.6 $ 6.9 $ 10.7
Assumed allocation of undistributed net loss   (36.6 )   (32.3 )   (3.6 )   (0.7 )
Assumed allocation of net income attributable to

limited partner unitholders and general partner

$ 91.6   $ 78.3   $ 3.3   $ 10.0  
Weighted-average units outstanding 207.4 22.9
Net income per unit $ 0.38 $ 0.14

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 December 31, 2011, (in millions, except per unit data):

  Total  

Common Units

 

Class B Units

 

General Partner and IDRs

Net income $ 71.6
Add: Net loss attributable to predecessor equity   (3.2 )

Net income attributable to limited partner unitholders and general partner

  74.8  
Declared distribution   114.0   $ 98.1 $ 6.8 $ 9.1
Assumed allocation of undistributed net loss   (39.2 )   (34.0 )   (4.3 )   (0.9 )
Assumed allocation of net income $ 74.8   $ 64.1   $ 2.5   $ 8.2  
Weighted average units outstanding 175.7 22.9
Net income per unit $ 0.36 $ 0.11

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 year ended December 31, 2012, (in millions, except per unit data):

  Total  

Common Units

 

Class B Units

 

General Partner and IDRs

Net income $ 306.0
Add: Net loss attributable to predecessor equity   (2.2 )

Net income attributable to limited partner unitholders and general partner

308.2
Declared distribution $ 493.1 $ 424.3 $ 27.5 $ 41.3
Assumed allocation of undistributed net loss   (184.9 )   (162.0 )   (19.2 )   (3.7 )
Assumed allocation of net income attributable to

limited partner unitholders and general partner

$ 308.2   $ 262.3   $ 8.3   $ 37.6  
Weighted-average units outstanding 191.9 22.9
Net income per unit $ 1.37 $ 0.36

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 year ended December 31, 2011, (in millions, except per unit data):

  Total  

Common Units

 

Class B Units

 

General Partner and IDRs

Net income $ 217.0
Add: Net loss attributable to predecessor equity   (3.2 )

Net income attributable to limited partner unitholders and general partner

  220.2  
Declared distribution   431.6   $ 371.6 $ 27.5 $ 32.5
Assumed allocation of undistributed net loss   (211.4 )   (183.0 )   (24.2 )   (4.2 )
Assumed allocation of net income $ 220.2   $ 188.6   $ 3.3   $ 28.3  
Weighted average units outstanding 173.3 22.9
Net income per unit $ 1.09 $ 0.14




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