BWP
$14.76
Boardwalk Pipeline Partners LP
($.07)
(.47%)
Earnings Details
2nd Quarter June 2017
Monday, July 31, 2017 6:00:00 AM
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Summary

Boardwalk Pipeline Partners LP (BWP) Recent Earnings

Boardwalk Pipeline Partners LP (BWP) reported 2nd Quarter June 2017 earnings of $0.28 per share on revenue of $317.6 million. The consensus earnings estimate was $0.29 per share on revenue of $321.3 million. Revenue grew 3.7% on a year-over-year basis.

Boardwalk Pipeline Partners LP operates in the midstream portion of the natural gas. The Company provides transportation, storage, gathering and processing services natural gas and NGL industry.

Results
Reported Earnings
$0.28
Earnings Whisper
-
Consensus Estimate
$0.29
Reported Revenue
$317.6 Mil
Revenue Estimate
$321.3 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Boardwalk Announces Second Quarter 2017 Results And Quarterly Distribution Of $0.10 Per Unit

Boardwalk Pipeline Partners, LP, (BWP) announced today that it has declared a quarterly cash distribution per common unit of $0.10 ($0.40 annualized) payable on August 17, 2017, to unitholders of record as of August 10, 2017.

The Partnership also announced its results for the second quarter ended June 30, 2017, which included the following items:

Operating revenues of $317.6 million for the quarter and $684.6 million for the six months ended June 30, 2017, a 4% increase and a 5% increase from $306.3 million and $651.3 million in the comparable 2016 periods. Operating revenues, less fuel and transportation expense, were $303.1 million for the quarter and $650.9 million for the six months ended June 30, 2017, a 3% increase and a 5% increase from $294.7 million and $619.4 million in the comparable 2016 periods;

Net income of $23.7 million for the quarter and $143.0 million for the six months ended June 30, 2017, a 64% decrease and a 14% decrease from $65.7 million and $166.7 million in the comparable 2016 periods. During the second quarter of 2017, the Partnership sold its Flag City Processing Partners, LLC subsidiary, which owns the Flag City processing plant, and related assets, to a third party for $64.7 million, including customary adjustments. The Partnership recorded $47.1 million of losses and impairment charges related to the sale. Excluding the impact of the Flag City sale, Net income would have been $70.8 million and $190.1 million for the quarter and six months ended June 30, 2017;

Earnings before interest, taxes, depreciation and amortization (EBITDA) of $148.0 million for the quarter and $394.2 million for the six months ended June 30, 2017, a 22% decrease and a 5% decrease from $190.3 million and $413.0 million in the comparable 2016 periods. Excluding the impact of the Flag City sale, EBITDA would have been $195.1 million and $441.3 million for the quarter and six months ended June 30, 2017; and

Distributable cash flow of $201.8 million for the quarter and $377.9 million for the six months ended June 30, 2017, a 57% increase and a 31% increase from $128.9 million and $289.0 million in the comparable 2016 periods. Excluding the impact of the Flag City sale, distributable cash flow would have been $137.1 million and $313.2 million for the quarter and six months ended June 30, 2017.

Compared with the second quarter of 2016, the Partnership’s operating revenues in the second quarter of 2017 were favorably impacted by recently completed growth projects. The second quarter of 2016 was favorably impacted by $12.7 million of proceeds received from the settlement of a legal claim.

For the six-month period, the Partnership’s operating revenues, net income and EBITDA were impacted by the items discussed above.

Capital Program

Growth capital expenditures were $258.4 million and maintenance capital expenditures were $44.4 million for the six months ended June 30, 2017.

Conference Call

The Partnership has scheduled a conference call for July 31, 2017, 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 Conference ID to access the call is 49473667.

Replay

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

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 as an approximation of net operating revenues generated by the Partnership, that when realized in cash, will be available to be distributed 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.

Tax Notification

This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat 100% of Boardwalk’s distributions to foreign investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, Boardwalk’s distributions to foreign investors are subject to federal income tax withholding at the highest applicable tax rate.

About Boardwalk

Boardwalk Pipeline Partners, LP (BWP) is a midstream master limited partnership that primarily transports and stores natural gas and liquids for its customers. 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
For the
Three Months Ended
Six Months Ended
June 30,
June 30,
2017
2016
2017
2016
Operating Revenues:
Transportation
$
278.7
$
269.8
$
597.3
$
575.7
Parking and lending
7.9
4.4
13.3
8.5
Storage
19.9
23.6
43.3
44.6
Other
11.1
8.5
30.7
22.5
Total operating revenues
317.6
306.3
684.6
651.3
Operating Costs and Expenses:
Fuel and transportation
14.5
11.6
33.7
31.9
Operation and maintenance
51.6
48.3
92.0
91.7
Administrative and general
34.2
35.5
68.8
70.2
Depreciation and amortization
80.2
79.1
160.8
158.1
Loss on sale of assets and impairments
47.1
--
47.1
--
Taxes other than income taxes
22.8
22.5
50.2
48.5
Total operating costs and expenses
250.4
197.0
452.6
400.4
Operating income
67.2
109.3
232.0
250.9
Other Deductions (Income):
Interest expense
43.9
45.4
90.1
88.0
Interest income
(0.2)
(0.1)
(0.3)
(0.2)
Miscellaneous other income, net
(0.6)
(1.9)
(1.4)
(4.0)
Total other deductions
43.1
43.4
88.4
83.8
Income before income taxes
24.1
65.9
143.6
167.1
Income taxes
0.4
0.2
0.6
0.4
Net income
$
23.7
$
65.7
$
143.0
$
166.7
Net Income per Unit:
Net income per common unit
$
0.09
$
0.26
$
0.56
$
0.65
Weighted-average number of common units outstanding
250.3
250.3
250.3
250.3
Cash distribution declared and paid to common units per $
0.10
$
0.10
$
0.20
$
0.20
common unit

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
For the
Three Months Ended
Six Months Ended
June 30,
June 30,
2017
2016
2017
2016
Net income (3)
$
23.7
$
65.7
$
143.0
$
166.7
Income taxes
0.4
0.2
0.6
0.4
Depreciation and amortization
80.2
79.1
160.8
158.1
Interest expense
43.9
45.4
90.1
88.0
Interest income
(0.2)
(0.1)
(0.3)
(0.2)
EBITDA (3)
148.0
190.3
394.2
413.0
Less:
Cash paid for interest, net of capitalized interest (1) 37.7
32.7
82.4
78.7
Maintenance capital expenditures
19.8
26.8
44.4
41.4
Add:
Proceeds from sale of operating assets
64.8
--
64.8
0.1
Loss on sale of assets and impairments
47.1
--
47.1
--
Other(2)
(0.6)
(1.9)
(1.4)
(4.0)
Distributable Cash Flow(3)
$
201.8
$
128.9
$
377.9
$
289.0
(1) The six months ended June 30, 2017, includes $1.5 million of payments related to the settlement of interest rate derivatives.
(2) Includes other non-cash items, such as the equity component of allowance for funds used during construction.
(3) Net income, EBITDA and Distributable Cash Flow were impacted by the sale of the Flag City processing plant and related assets as follows:
For the
For the
Three Months Ended
Six Months Ended
June 30, 2017
June 30, 2017
Net
EBITDA
Distributable
Net
EBITDA
Distributable
Income
Cash Flow
Income
Cash Flow
Per above:
$
23.7$
148.0 $
201.8
$
143.0 $
394.2 $
377.9
Items impacting comparability related to
the sale of the Flag City processing plant
and related assets:
Loss on sale of assets and
47.1
47.1
--
47.1
47.1
--
impairments
Proceeds from the sale of the Flag City
--
--
(64.7)
--
--
(64.7)
processing plant and related assets
Adjusted:
$
70.8$
195.1 $
137.1
$
190.1 $
441.3 $
313.2

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, 2017, (in millions, except per unit data):

Total
Common
General
Units
Partner
and IDRs
Net income
$ 23.7
Declared distribution
25.6
$
25.1
$
0.5
Assumed allocation of undistributed net loss
(1.9)
(1.9)
--
Assumed allocation of net income attributable to limited $ 23.7
$
23.2
$
0.5
partner unitholders and general partner
Weighted-average units outstanding
250.3
Net income per unit
$
0.09

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, 2016, (in millions, except per unit data):

Total
Common
General
Units
Partner
and IDRs
Net income
$ 65.7
Declared distribution
25.6 $
25.1
$
0.5
Assumed allocation of undistributed net income
40.1
39.3
0.8
Assumed allocation of net income attributable to limited $ 65.7 $
64.4
$
1.3
partner unitholders and general partner
Weighted-average units outstanding
250.3
Net income per unit
$
0.26

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, 2017, (in millions, except per unit data):

Total
Common
General
Units
Partner
and IDRs
Net income
$ 143.0
Declared distribution
51.1
$
50.1
$
1.0
Assumed allocation of undistributed net income
91.9
90.1
1.8
Assumed allocation of net income attributable to limited $ 143.0
$
140.2
$
2.8
partner unitholders and general partner
Weighted-average units outstanding
250.3
Net income per unit
$
0.56

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, 2016, (in millions, except per unit data):

Total
Common
General
Units
Partner
and IDRs
Net income
$ 166.7
Declared distribution
51.1
$
50.1
$
1.0
Assumed allocation of undistributed net income
115.6
113.3
2.3
Assumed allocation of net income attributable to limited $ 166.7
$
163.4
$
3.3
partner unitholders and general partner
Weighted-average units outstanding
250.3
Net income per unit
$
0.65

INVESTOR CONTACTS: Molly Ladd Whitaker, 866-913-2122Director of Investor Relations and Corporate Communicationsir@bwpmlp.com

or

Jamie Buskill, 713-479-8082Senior VP, Chief Financial and Administrative Officer and Treasurer

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SOURCE Boardwalk Pipeline Partners, LP

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