Boardwalk Announces Second Quarter 2011 Results

Boardwalk Pipeline Partners, LP, (NYSE:BWP) announced today its results for the second quarter ended June 30, 2011, which included the following items:

• Operating revenues of $262.0 million for the quarter and $573.0 million for the six months ended June 30, 2011, a 2% and 3% increase from $256.7 million and $557.2 million in the comparable 2010 period;
• Net income of $15.2 million for the quarter, including a $28.5 million non-cash impairment charge, and $98.2 million for the six months ended June 30, 2011, a 72% and 32% decrease from $54.4 million and $144.7 million in the comparable 2010 period;
• Earnings before interest, taxes, depreciation and amortization (EBITDA) of $111.4 million for the quarter, including a $28.5 million non-cash impairment charge, and $298.6 million for the six months ended June 30, 2011, a 24% and 9% decrease from $145.7 million and $326.6 million in the comparable 2010 period; and
• Distributable cash flow of $88.4 million for the quarter and $200.9 million for the six months ended June 30, 2011, a 21% and 18% decrease from $112.0 million and $246.2 million in the comparable 2010 period.

Operating results for the second quarter 2011 were primarily driven by:

• Higher gas transportation revenues from increased capacities from the completion of several compression projects in 2010 and operating our Fayetteville Lateral at its design capacity;
• Lower parking and lending and storage revenues due to unfavorable market conditions;
• Higher operating costs and expenses primarily due to a non-cash impairment charge of $28.5 million associated with the Partnership’s materials and supplies and increased operation and maintenance expenses primarily related to integrity management and reliability spending; and
• Higher other deductions as a result of increased interest expense from higher average interest rates on long-term debt and lower capitalized interest.

Operating results on a year-to-date basis were impacted by the revenue and expense factors mentioned above, as well as first quarter items, which included a $5.0 million charge related to a fire at a compressor station near Carthage, Texas, and a $7.4 million loss on the early extinguishment of debt.

Capital Program

Growth capital expenditures were $32.0 million and maintenance capital expenditures were $41.7 million for the six months ended June 30, 2011.

Conference Call

The Partnership has scheduled a conference call for August 1, 2011, at 9:00 a.m. Eastern time to review the second quarter results. The earnings call may be accessed via the Boardwalk website at www.bwpmlp.com. Please go to 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 (800) 510-9691 for callers in the U.S. or (617) 614-3453 for callers outside the U.S. The PIN number to access the call is 87283936.

Replay

An online replay will also 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 natural gas transportation, gathering and storage business. Distributable Cash Flow is used as a supplemental financial measure by management and by external users of the Partnership’s financial statements to assess the Partnership’s ability to make cash distributions 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.

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):

About Boardwalk

Boardwalk Pipeline Partners, LP, is a limited partnership engaged, through its subsidiaries, Gulf Crossing Pipeline Company LLC, Gulf South Pipeline Company, LP and Texas Gas Transmission, LLC, in the interstate transportation and storage of natural gas. Boardwalk’s interstate natural gas pipeline systems have approximately 14,200 miles of pipeline and underground storage fields having aggregate working gas capacity of approximately 167 Bcf.