·	approximately 5,900 miles of pipeline, having a peak-day delivery capacity of approximately 3.2 Bcf per day which includes deliveries to pipeline interconnects in South Louisiana;

·	31 compressor stations having an aggregate of approximately 536,000 horsepower; and

·	nine natural gas storage fields located in Indiana and Kentucky, having aggregate storage capacity of approximately 178.0 Bcf of gas, of which approximately 63.0 Bcf is designated as working gas.

·	approximately 7,500 miles of pipeline, having a peak-day delivery capacity of approximately 3.5 Bcf per day;

·	29 compressor stations having an aggregate of approximately 225,000 horsepower; and

·	two natural gas storage fields located in Louisiana and Mississippi, having aggregate storage capacity of approximately 131.0 Bcf of gas, of which approximately 83.0 Bcf is designated as working gas.

(a)	the Clean Air Act and analogous state laws which impose obligations related to air emissions;

(b)	the Water Pollution Control Act, commonly referred to as the Clean Water Act, and analogous state laws which regulate discharge of wastewaters from our facilities into state and federal waters;

(c)

the Comprehensive Environmental Response, Compensation and Liability Act, commonly referred to as CERCLA, or the Superfund law, and analogous state laws which regulate the cleanup of hazardous substances that may have been released at properties currently or previously owned or operated by us or locations to which we have sent wastes for disposal; and

(d)	the Resource Conservation and Recovery Act, and analogous state laws which impose requirements for the handling and discharge of solid and hazardous waste from our facilities. Item 1A, "Risk Factors." includes further discussion regarding our environmental risk factors.

·	operating terms and conditions of service;

·	the types of services we may offer to our customers;

·	construction of new facilities;

·	creation, extension or abandonment of services or facilities;

·	accounts and records; and

·	relationships with certain types of affiliated companies involved in the natural gas business.

·	existing and new competition to deliver natural gas to our markets;

·	the growth in demand for natural gas in our markets;

·	whether the market will continue to support long-term contracts;

·	the current basis differentials, or market price spreads between two points on our pipelines;

·	whether our business strategy continues to be successful; and

·	the effects of state regulation on customer contracting practices.

·	worldwide economic conditions;

·	weather conditions and seasonal trends;

·	levels of domestic production and consumer demand;

·	the availability of LNG;

·	a material decrease in the price of natural gas could have an adverse effect on the shippers who have contracted for capacity on our planned expansion projects;

·	the availability of adequate transportation capacity;

·	the price and availability of alternative fuels;

·	the effect of energy conservation measures;

·	the nature and extent of governmental regulation and taxation; and

·	the anticipated future prices of natural gas, LNG and other commodities.

·	performance of our business following the acquisition, expansion or construction of assets that does not meet expectations;

·	a significant increase in our indebtedness and working capital requirements, which could, among other things, have an adverse impact on our credit ratings;

·	the inability to timely and effectively integrate into our operations the operations of newly acquired, expanded or constructed assets;

·	the incurrence of substantial unforeseen environmental and other liabilities, including liabilities arising from the operation of an acquired business or asset prior to our acquisition for which we are not indemnified or for which the indemnity is inadequate;

·	diversion of our management’s attention from other business concerns; and

·	regulatory risks created by the nature or location of acquired businesses.

·	we are unable to identify attractive expansion projects or acquisition candidates or we are outbid by competitors;

·	we are unable to obtain necessary governmental approvals;

·	we are unable to raise financing for such expansions or acquisitions on economically acceptable terms; or

·	we are unable to secure adequate customer commitments to use the expanded or acquired facilities.

·	Loews and its affiliates may engage in competition with us.

·

Neither our partnership agreement nor any other agreement requires Loews or its affiliates (other than our general partner) to pursue a business strategy that favors us. Directors and officers of Loews and its affiliates have a fiduciary duty to make decisions in the best interest of Loews shareholders, which may be contrary to our interests.

·	Our general partner is allowed to take into account the interests of parties other than us, such as Loews and its affiliates, in resolving conflicts of interest, which has the effect of limiting its fiduciary duty to our unitholders.

·	Some officers of our general partner who provide services to us may devote time to affiliates of our general partner and may be compensated for services rendered to such affiliates.

·

Our partnership agreement limits the liability and reduces the fiduciary duties of our general partner, while also restricting the remedies available to our unitholders for actions that, without these limitations, might constitute breaches of fiduciary duty. By purchasing common units, unitholders are deemed to have consented to some actions and conflicts of interest that might otherwise constitute a breach of fiduciary or other duties under applicable law.

·	Our general partner determines the amount and timing of asset purchases and sales, borrowings, repayments of indebtedness, issuances of additional partnership securities and cash reserves, each of which can affect the amount of cash that is available for distribution to our unitholders.

·

Our general partner determines the amount and timing of any capital expenditures and whether an expenditure is for maintenance capital, which reduces operating surplus, or a capital improvement expenditure, which does not. Such determination can affect the amount of cash that is distributed to our unitholders and the ability of the subordinated units to convert to common units.

·

In some instances, our general partner may cause us to borrow funds in order to permit the payment of cash distributions, even if the purpose or effect of the borrowing is to make a distribution on the subordinated units, to make incentive distributions or to accelerate the expiration of the subordination period.

·	Our general partner determines which costs, including allocated overhead, incurred by it and its affiliates are reimbursable by us.

·

Our partnership agreement does not restrict our general partner from causing us to pay it or its affiliates for any services rendered on terms that are fair and reasonable to us or entering into additional contractual arrangements with any of these entities on our behalf, and provides that reimbursement to Loews for amounts allocable to us consistent with accounting and allocation methodologies generally permitted by the FERC for rate-making purposes and past business practices is deemed fair and reasonable to us.

·	Our general partner intends to limit its liability regarding our contractual obligations.

·

Our general partner may exercise its rights to call and purchase (1) all of our common units if at any time it and its affiliates own more than 80% of the outstanding common units or (2) all of our equity securities (including common units) if it and its affiliates own more than 50% in the aggregate of the outstanding common units, subordinated units and any other classes of equity securities and it receives an opinion of outside legal counsel to the effect that our being a pass-through entity for tax purposes has or is reasonably likely to have a material adverse effect on the maximum applicable rates we can charge our customers.

·	Our general partner controls the enforcement of obligations owed to us by it and its affiliates.

·	Our general partner decides whether to retain separate counsel, accountants or others to perform services for us.

·

permits our general partner to make a number of decisions in its individual capacity, as opposed to in its capacity as our general partner. This entitles our general partner to consider only the interests and factors that it desires, and it has no duty or obligation to give any consideration to any interest of, or factors affecting us, our affiliates or any limited partner. Decisions made by our general partner in its individual capacity will be made by a majority of the owners of our general partner, and not by the board of directors of our general partner. Examples of these kinds of decisions include the exercise of its call rights, its voting rights with respect to the units it owns and its registration rights and the determination of whether to consent to any merger or consolidation of the partnership;

·	provides that our general partner shall not have any liability to us or our unitholders for decisions made in its capacity as general partner so long as it acted in good faith, meaning it believed that the decisions were in the best interests of the partnership;

·

generally provides that affiliate transactions and resolutions of conflicts of interest not approved by the conflicts committee of the board of directors of our general partner and not involving a vote of unitholders must be on terms no less favorable to us than those generally provided to or available from unrelated third parties or be “fair and reasonable” to us and that, in determining whether a transaction or resolution is “fair and reasonable,” our general partner may consider the totality of the relationships between the parties involved, including other transactions that may be particularly advantageous or beneficial to us; and

·

provides that our general partner and its officers and directors will not be liable for monetary damages to us, our limited partners or assignees for any acts or omissions unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that the general partner or those other persons acted in bad faith or engaged in fraud or willful misconduct.

·	make certain loans or investments;

·	make any material change to the nature of our business, including consolidations, liquidations or dissolutions;

·	enter into a merger, consolidation, sale and leaseback transaction or sale of assets;

·	make distributions if any default or event of default occurs;

·	incur additional indebtedness or guarantee other indebtedness; or

·	grant liens or make certain negative pledges.

·	our financial performance without regard to financing methods, capital structure or historical cost basis;

·	our ability to generate cash sufficient to pay interest on our indebtedness and to make distributions to our partners;

·	our operating performance and return on invested capital as compared to those of other companies in the natural gas transportation and storage business, without regard to financing methods and capital structure; and

·	the viability of acquisitions and capital expenditure projects.

·	increasing competition for the transportation and storage of available gas supplies originating in a number of our supply areas;

·	increasing competition from new and proposed pipelines providing natural gas to our market areas from other supply areas;

·	the success of pipeline expansion in areas such as the Barnett Shale and Fayetteville Shale is dependent on natural gas prices being sufficiently high to support continued development in those areas;

·	the likelihood that LNG from the Gulf Coast region will become an increasingly important source of supply for our customers;

·	a change in the price of natural gas at different locations (basis differentials), which means that the value of the transportation services we offer may change over time based upon macro economic conditions.

·	$38.5 million increase in gas storage and PAL revenues mainly due to favorable natural gas price spreads and volatility in forward natural gas prices;

·	$26.0 million increase in firm transportation revenues, excluding fuel, primarily due to higher reservation rates and additional capacity reserved by shippers due to increased production in the East Texas region; and

·	$5.3 million increase due mainly to hurricane insurance recoveries received in 2006 and gas lost in 2005 related to Hurricanes Katrina and Rita (hurricanes).

·	$10.5 million decrease in interruptible transportation revenues due in part to customers shifting to firm services and supply disruptions caused by the hurricanes;

·	$7.1 million decrease in fuel retained due to lower realized natural gas prices and reduced throughput; and

·	$5.5 million decrease in revenues from the amortization of acquired executory contracts.

·	$12.6 million increase in outside services and overheads mainly due to growth in operations and regulatory compliance;

·	$12.2 million from the sale of storage gas related to Phase I of our Western Kentucky storage expansion project that occurred in 2005;

·

$10.2 million higher employee benefits costs comprised mainly of $6.3 million from the amortization of a regulatory asset for postretirement benefits as a result of the Texas Gas rate case settlement and $3.5 million from a special termination benefit charge recorded as a result of the early retirement incentive program; and

·	$3.7 million from an increase in depreciation and amortization due to an increase in our asset base and $2.6 million increased expense from the lease of third-party pipeline capacity.

·	$18.2 million decrease in hurricane-related costs from $7.3 million of hurricane-related insurance recoveries recognized in 2006 and a reduction in hurricane-related operating expenses from amounts incurred in 2005;

·	$14.9 million decrease in company-used gas due to operational efficiencies, lower natural gas prices and reduced throughput resulting in decreased usage.

·

$259.8 million increase in transportation revenues, substantially all of which was attributable to Gulf South, and increased interruptible revenues due to supply disruptions caused by the hurricanes. Lower revenues from contract renewals and related discounting at the Lebanon terminus of our Texas Gas system were partially offset by new rates, subject to refund, implemented by Texas Gas on November 1, 2005, and by new projects including transportation agreements related to our market area storage expansion project in Western Kentucky and increased capacity from Carthage, Texas by leasing capacity on a third-party pipeline.

·	$27.6 million increase in PAL and gas storage revenues of which $29.2 million was attributable to Gulf South. Storage revenues at Texas Gas were lower by $2.0 million primarily as a result of unusually high interruptible storage revenue generated in 2004 due to favorable market conditions; and

·	$9.4 million increase in Other revenues of which $11.1 million was attributable to Gulf South.

·	$207.4 million increase attributable to Gulf South, $12.9 million of which was due to casualty losses recognized as a result of the hurricanes..

·	$12.2 million decrease due to the sale of storage gas related to Phase I of our Western Kentucky storage expansion project, partially offset by asset retirements.

·	$54.2 million increase in net income before noncash adjustments for depreciation and amortization, provision for deferred income taxes and gain on disposal of operating assets;

·

$17.4 million increase in cash from a reduction in operating assets net of operating liabilities mainly from increases in payables and deferred income on PAL agreements, and decreases in receivables, partly offset by an increase in other current assets primarily from the recognition of unrealized gains on derivatives; and

·	$34.8 million decrease in cash from a reduction in other noncurrent liabilities net of noncurrent assets.

·	$117.4  million increase in capital expenditures mainly related to our expansion projects; and

·	$27.5 million reduction in advances to affiliates.

·	$419.7 million decrease in cash used from the payment of notes and other long-term debt in 2005 slightly offset by payment in 2006 of interim financing borrowed in 2005 for capital expenditures incurred in connection with the acquisition of Gulf South; and

·	$76.2 million decrease in cash provided from public offerings of common units.

·	We may not complete projects, including growth or expansion projects, that we commence, or we may complete projects on materially different terms or timing than anticipated and we may not be able to achieve the intended benefits of any such project, if completed.

·

The successful completion, timing, cost, scope and future financial performance of our expansion projects could differ materially from our expectations due to weather, untimely regulatory approvals or denied applications, land owner opposition, the lack of adequate materials, labor difficulties, difficulties we may encounter with partners or potential partners, expansion cost higher than anticipated and numerous other factors beyond our control.

·

The gas transmission and storage operations of our subsidiaries are subject to rate-making policies and actions by the FERC or customers that could have an adverse impact on the rates we charge and our ability to recover our income tax allowance, our full cost of operating our pipelines and a reasonable return.

·

We are subject to laws and regulations relating to the environment and pipeline operations which may expose us to significant costs, liabilities and loss of revenues. Any changes in such regulations or their application could negatively affect our business, financial condition and results of operations.

·	Our operations are subject to operational hazards and unforeseen interruptions for which we may not be adequately insured.

·	The cost of insuring our assets may increase dramatically.

·

Because of the natural decline in gas production from existing wells, our success depends on our ability to obtain access to new sources of natural gas, which is dependent on factors beyond our control. Any decrease in supplies of natural gas in our supply areas could adversely affect our business, financial condition and results of operations.

·	Successful development of LNG import terminals in the eastern or northeastern United States could reduce the demand for our services.

·	We may not be able to maintain or replace expiring gas transportation and storage contracts at favorable rates.

·	Significant changes in natural gas prices could affect supply and demand, reducing system throughput and adversely affecting our revenues.

·	the distribution by Boardwalk Pipelines of $126.4 million of cash, receivables and other working capital assets to BPHC;

·	the contribution, directly and indirectly, by BPHC of all the equity interests of Boardwalk Pipelines to the Partnership;

·	the Partnership’s reimbursement to BPHC for $42.1 million of capital expenditures it incurred in connection with the acquisition of Gulf South;

·	the assumption by the Partnership of $250.0 million of indebtedness to Loews from BPHC;

·	the issuance by the Partnership of 53,256,122 common units, 33,093,878 subordinated units, representing an 83.5% limited partnership interest in the Partnership, to BPHC; and

·	the issuance by the Partnership of a 2.0% general partner interest and all of its incentive distribution rights to Boardwalk GP.

·

Litigation filed by Jack Grynberg alleging that approximately 300 energy companies, including Texas Gas, had violated the False Claims Act in connection with the measurement, royalty valuation and purchase of hydrocarbons. In October 2006, the United States District Judge issued an order dismissing these claims, including the claims against Texas Gas, for lack of subject matter jurisdiction. That order is, however, subject to appeal; and

·

A claim by certain parties for back rental associated with their alleged ownership of a partial mineral interest in a tract of land in a gas storage field owned by Texas Gas. In December 2003, a lawsuit was filed against Texas Gas in Muhlenberg County, Kentucky, seeking unspecified damages related to this claim. In April 2005, in the first phase of this lawsuit, the court entered an order granting partial summary judgment against Texas Gas related to the vesting of legal title to the disputed acreage. However, in January 2007, the court entered an order concluding that the plaintiff was estopped by his actions from pursuing his claims and dismissed the lawsuit. The plaintiff has filed a motion to vacate the order dismissing the lawsuit and is expected to appeal.

(1)	the EPA will not pursue any further action against Texas Gas for EPA costs related to the site no matter how much the planned remedial action ultimately may cost, and

(2)	the Super Fund law provides protection from “contribution” suits for parties that settle, i.e. suits from other potentially responsible parties that perform or finance cleanup at the site.

(a)	recognize the funded status of a benefit plan in its statement of financial position,

(b)	recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service cost or credits that arise during the period but are not recognized as components of net periodic benefit cost,

(c)	measure defined benefit plan assets and obligations as of the date of the employer’s fiscal year-end statement of financial position, and

(d)	disclose in the notes to the financial statements additional information about certain effects on net periodic benefit cost for the next fiscal year that arise from delayed recognition of gains or losses, prior service cost or credits, and transition asset or obligation.

·	Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

·

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

·	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

·	base salary;

·	annual incentive compensation awards, including cash bonuses and grants of phantom common units (Phantom Common Units) under our LTIP;

·	annual grants of phantom general partner units (Phantom GP Units) under our SLTIP; and

·	retirement, medical and related benefits.

(1)	Reflects cash amounts paid in 2007 to the Named Executive Officers for services performed by them during 2006.

(2)	Represents compensation expense accrued for 2006 related to Phantom Common Units granted in 2006 and 2005. The accruals were made pursuant to SFAS No. 123(R), Share Based Payments. See footnote (1) to the Grants of Plan-Based Awards table presented below.

(5)

Includes matching contributions made under a 401(k) plan ($13,200), club memberships ($7,200), spouse travel, tax gross-up on spouse travel and imputed life insurance premiums. The total included in the change in pension value and nonqualified deferred compensation column includes the change in qualified retirement plan account balance ($60,562), interest and pay credits for the supplemental retirement plan ($83,935) and excess nonqualified deferred compensation plan earnings ($9,961).

(6)

Includes matching contributions made under a 401(k) plan ($13,200), spouse travel and imputed life insurance premiums. The total included in the change in pension value and nonqualified deferred compensation column includes the change in qualified retirement plan account balance ($28,675) and interest and pay credits for the supplemental retirement plan ($11,658).

(1)

On July 24, 2006, our SLTIP became effective. The plan provides for the issuance of up to 500 Phantom GP Units to our key employees. Each Phantom GP Unit entitles the holder thereof, upon vesting, to a lump sum cash payment in an amount determined by a formula based on cash distributions made by us to our general partner during the four quarters preceding the vesting date and the implied yield on our common units, up to a maximum of $50,000 per unit. Concurrent with the approval of the Plan, Messrs. Gafvert, Jones and Buskill were awarded 25, 15 and 12 Phantom GP Units, that have a 3.5 year vesting period. On December 20, 2006, Messrs. Gafvert, Jones and Buskill were awarded 25, 15 and 10 Phantom GP Units that have a 4.0 year vesting period. The fair value of the awards was determined as of the date of grant and will be remeasured each quarter until settlement in accordance with the treatment of awards classified as liabilities prescribed in SFAS No. 123(R). The fair value at grant date of the July 24, 2006 grants and the December 20, 2006 grants were $27,422 and $50,000, respectively, per GP Phantom Unit. The fair value of the awards will be recognized ratably over the vesting period. As of December 31, 2006 the remeasured fair value of each of the July 24, 2006 grants was $47,718 and the fair value of each of the December 20, 2006, grants was $50,000. See footnote (2) to the Outstanding Equity Awards at Fiscal Year -End table presented below. Note 9 in Item 8 of this Report contains more information regarding our SLTIP.

(2)

Reflects the fair value at the date of grant of Phantom Common Units under our LTIP. The closing price of our common units on such date on the NYSE was $31.12. Each such grant includes a tandem grant of Distribution Equivalent Rights (DERs); vests 50% on the second anniversary of the grant date and 50% on the third anniversary of the grant date; and will be payable to the grantee in cash upon vesting in an amount equal to the sum of the fair market value of the units (as defined in the plan) that vest on the vesting date plus the vested amount then credited to the grantee’s DER account, less applicable taxes. Note 9 in Item 8 of this Report contains more information regarding our LTIP.

(1)

On December 15, 2005, Phantom Common Units were awarded Gafvert, Jones and Buskill in the amount of 8,030; 4,283 and 1,874. The vesting period is 3.5 years. On the grant date, the closing sales price on the common units on the NYSE was $18.68. On December 20, 2006, Messrs. Gafvert, Jones and Buskill were awarded additional grants of Phantom Common Units in the amount of 6,427; 2,571 and 1,205. On the December 20, 2006 grant date the closing sale price on the NYSE was $31.12.

(2)

The market value per share reported in the above table is based on the NYSE last sale price on December 29, 2006 of $30.82. Included in the market value is the accumulated non-vested amounts related to the DER that were tandem grants to the Phantom Common Units referred to in footnote (1) above. Such DER amounts for Messrs. Gafvert, Jones and Buskill were $10,590, $5,648 and $2,471.

(1)

The Salary Continuation Plan became closed to new participants and compensation deferrals in 1995. The only activity in the plan is the addition of earnings on individual account balances and any withdrawals from account balances. Earnings on the deferred compensation balances are computed at the prime rate of interest plus 2%, compounded monthly. Aggregate earnings in 2006 includes $9,961 reported in the Summary Compensation Table above.

(1)	As of February 9, 2007, we had 75,156,122 common units and 33,093,878 subordinated units issued and outstanding.

(2)	30,583 of these units are owned by Arebell, LLC, a limited liability company controlled by Mr. Rebell.

(3)	Represents one quarter of the number of units owned by a general partnership in which a one-quarter interest is held by a trust of which Mr. Tisch is managing trustee.

(4)	Loews Corporation is the parent company of BPHC and may, therefore, be deemed to beneficially own the units held by BPHC. The address of BPHC is 3800 Frederica Street, Owensboro, Kentucky 42301. The address of Loews is 667 Madison Avenue, New York, New York 10021.

(i)	during the past three years the director has been an employee, or an immediate family member has been an executive officer, of us;

(ii)	the director or an immediate family member received, during any twelve month period within the past three years, more than $100,000 in direct compensation from us, excluding director and committee fees, pension payments and certain forms of deferred compensation;

(iii)

the director is a current partner or employee or an immediate family member is a current partner of a firm that is our internal or external auditor, or an immediate family member is a current employee of such a firm and participates in the firm’s audit, assurance or tax compliance (but not tax planning) practice or, within the last three years, the director or an immediate family member was a partner employee of such a firm and personally worked on our audit within that time;

(iv)	the director or an immediate family member has at any time during the past three years been employed as an executive officer of another company where any of our present executive officers at the same time serves or served on that company’s compensation committee; or

(v)

the director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, us for property or services in an amount which, in any of the last three years, exceeds the greater of $1 million, or 2% of the other company’s consolidated gross revenues.

(1)	Includes the aggregate fees and expenses for annual financial statement audit and quarterly financial statements reviews.

(2)

Includes the aggregate fees and expenses for services that were reasonably related to the performance of the financial statement audits or reviews described above and not included under "Audit Fees" above, including, principally, consents and comfort letters, audits of employee benefits plans, accounting consultations, Sarbanes-Oxley implementation, and due diligence for the GS-Acquisition and other potential acquisitions.

(3)	Includes the aggregate fees and expenses for tax compliance and tax planning services.