Boardwalk Pipeline Partners Q4 Profit Falls - Quick Facts

(RTTNews) - Boardwalk Pipeline Partners LP (BWP) reported fourth-quarter net income attributable to controlling interests of $19.5 million, a 78% decrease from $90.1 million in the year ago quarter. Net income per unit for the quarter was $0.08, down from $0.38 last year.

Compared with the fourth quarter of 2012, the Partnership's results were impacted by lower transportation revenues of $13.3 million primarily due to contract expirations and contract renewals. Parking and lending and storage revenues were lower by $3.6 million due to decreased parking opportunities from a reduction in the level of, and volatility in, natural gas price spreads between time periods. Operating expenses were negatively impacted by a goodwill impairment charge of $51.5 million.

Operating revenues for the quarter were $312.9 million, a 4% decrease from $325.7 million in the comparable 2012 period.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.31 per share and revenues of $320.28 million for the fourth-quarter. Analysts' estimates typically exclude special items.

The company announced that it has declared a quarterly cash distribution per common unit of $0.10 ($0.40 annualized) payable on February 27, 2014, to unitholders of record as of February 20, 2014. The reduction in the distribution will free up internally generated cash to help fund growth and reduce leverage in order to strengthen the balance sheet during the difficult market conditions impacting the Partnership.

The Partnership does not anticipate the need to issue and sell additional limited partner units in 2014.

The parent of the general partner has offered to provide the Partnership with up to $300.0 million in subordinated debt if requested by the Partnership to fund 2014 growth and has expressed its willingness to offer financial support for the proposed Bluegrass Project should that project be approved.

The Partnership forecasts distributable cash flow for the year ended December 31, 2014, to be approximately $400.0 million, reflecting a $158.6 million decrease from 2013. The decline in distributable cash flow is primarily due to continued, unfavorable market fundamentals negatively impacting the Partnership's existing natural gas transportation and storage revenues.

The Partnership anticipates an annualized $40.0 million reduction of revenues from 2014 firm transportation contract renewals and expirations. Additionally, the continued narrowing of the forward natural gas pricing curve, which is currently backwardated, is expected to reduce parking and lending and storage opportunities in 2014. The Partnership realized $56.0 million of distributable cash flow in 2013 from sales of storage gas and does not plan to sell storage gas in 2014.

Looking ahead for 2014, the company expects net income attributable to controlling interests of $210.0 million.