Commission
file number:
01-32665
|
||
BOARDWALK
PIPELINE PARTNERS, LP
|
||
(Exact
name of registrant as specified in its charter)
|
||
DELAWARE
|
||
(State
or other jurisdiction of incorporation or
organization)
|
||
20-3265614
|
||
(I.R.S.
Employer Identification No.)
|
||
3800
Frederica Street,
Owensboro, Kentucky 42301
(270)
926-8686
|
||
(Address
and Telephone Number of Registrant’s Principal Executive
Office)
|
||
Securities
registered pursuant to Section 12(b) of the Act:
|
||
Title
of each class
|
Name
of each exchange on which registered
|
|
Common
Units Representing Limited Partner Interests
|
New
York Stock Exchange
|
|
Securities
registered pursuant to Section 12(g) of the Act: NONE
|
· |
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.
|
Sales
Price Range per Common Unit
|
Cash
Distributions per Unit
(a)
|
|||||||||
High
|
Low
|
|||||||||
Year
ended December 31, 2006
|
||||||||||
Fourth
quarter
|
$
|
31.64
|
$
|
25.25
|
$
|
0.415
|
||||
Third
quarter
|
29.00
|
23.63
|
0.40
|
|||||||
Second
quarter
|
25.18
|
20.90
|
0.38
|
|||||||
First
quarter
|
22.00
|
17.98
|
0.36
|
|||||||
Year
ended December 31, 2005
|
||||||||||
Fourth
quarter (b)
|
19.23
|
17.58
|
0.179
(c
|
)
|
(a)
|
Represents
cash distributions attributable to the quarter and declared and
paid to
common and subordinated unitholders within 60 days after quarter
end. We
also paid cash distributions to our general partner with respect
to its
2.0% general partner interest, and with respect to that portion
of the
distribution in excess of $0.4025 per unit, its incentive distribution
rights described below.
|
(b)
|
For
the period from November 15, 2005, the date of our IPO, through
December 31, 2005.
|
(c)
|
The
distribution for the fourth quarter 2005 represents a pro-rated
distribution of $0.35 per common and subordinated unit for the
period from
November 15, 2005 through December 31,
2005.
|
Total
Quarterly Distribution
|
Marginal Percentage Interest in
Distributions
|
||||
Target
Amount
|
Common
and Subordinated Unitholders
|
General Partner
|
|||
Minimum
Quarterly Distribution
|
$0.3500
|
|
98%
|
2%
|
|
First
Target Distribution
|
up to $0.4025
|
|
98%
|
2%
|
|
Second
Target Distribution
|
above $0.4025 up to $0.4375
|
|
85%
|
15%
|
|
Third
Target Distribution
|
above
$0.4375 up to $0.5250
|
|
75%
|
25%
|
|
Thereafter
|
above
$0.5250
|
|
50%
|
50%
|
|
Boardwalk
Pipeline Partners
|
Predecessor
|
|||||||||||||||||
For
the Year Ended December 31,
|
For
the Period
May
17, 2003 through
December
31,
|
For
the Period
January
1, 2003 through
May
16,
|
For
the Year Ended
December
31,
|
||||||||||||||||
(expressed
in thousands)
|
2006
|
2005
|
2004
|
2003
|
2003
|
2002
|
|||||||||||||
Total
operating revenues
|
$
|
607,642
|
$
|
560,466
|
$
|
263,621
|
$
|
142,860
|
$
|
113,447
|
$
|
266,674
|
|||||||
Net
income
|
197,550
|
100,925
|
48,825
|
22,451
|
34,474
|
56,099
|
|||||||||||||
Total
assets
|
2,951,299
|
2,465,491
|
2,472,140
|
1,238,627
|
N/A
|
1,412,148
|
|||||||||||||
Long-term
debt
|
1,350,920
|
1,101,290
|
1,106,135
|
548,115
|
N/A
|
249,781
|
|||||||||||||
Earnings
per common and subordinated unit
|
$
|
1.85
|
*
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||
EBITDA**
|
$
|
331,468
|
$
|
289,002
|
$
|
144,489
|
$
|
77,241
|
$
|
78,380
|
$
|
149,569
|
· |
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.
|
Boardwalk
Pipeline Partners
|
Predecessor
|
||||||||||||||||||
For
the Year Ended December 31,
|
For
the Period May 17, 2003 through December
31,
|
For
the Period January 1, 2003 through May 16,
|
For
the Year Ended
December
31,
|
||||||||||||||||
2006
|
2005
|
2004
|
2003
|
2003
|
2002
|
||||||||||||||
Net
income
|
$
|
197,550
|
$
|
100,925
|
$
|
48,825
|
$
|
22,451
|
$
|
34,474
|
$
|
56,099
|
|||||||
Income
taxes and charge-in-lieu of income taxes
|
253
|
49,494
|
32,333
|
15,104
|
22,387
|
36,647
|
|||||||||||||
Elimination
of cumulative deferred taxes
|
-
|
10,102
|
-
|
-
|
-
|
-
|
|||||||||||||
Depreciation
and amortization
|
75,771
|
72,078
|
33,977
|
20,544
|
16,092
|
37,806
|
|||||||||||||
Interest
expense
|
62,123
|
60,067
|
30,081
|
19,368
|
7,392
|
20,490
|
|||||||||||||
Interest
income
|
(4,202
|
)
|
(1,478
|
)
|
(352
|
)
|
(205
|
)
|
-
|
(5
|
)
|
||||||||
Interest
income from affiliates, net
|
(27
|
)
|
(2,186
|
)
|
(375
|
)
|
(21
|
)
|
(1,965
|
)
|
(1,468
|
)
|
|||||||
EBITDA
|
$
|
331,468
|
$
|
289,002
|
$
|
144,489
|
$
|
77,241
|
$
|
78,380
|
$
|
149,569
|
· |
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.
|
December
31, 2006
|
December
31, 2005
|
December
31, 2004
|
|||
Expansion
capital
|
$
158.6
|
|
$
30.1
|
|
$
7.7
|
Maintenance
capital
|
41.7
|
|
52.9
|
|
34.2
|
Total
|
$
200.3
|
|
$
83.0
|
|
$
41.9
|
Payments
due by Period
|
|||||||||||||||||||
Total
|
Less than
1
Year
|
1-3 Years
|
4-5 Years
|
More than
5
Years
|
|||||||||||||||
Lease
commitments
|
$
|
34.8
|
$
|
5.9
|
$
|
14.3
|
$
|
4.1
|
$
10.5
|
||||||||||
Interest
on long-term debt
|
811.1
|
72.6
|
220.2
|
146.8
|
371.5
|
||||||||||||||
Capital
commitments
|
409.1
|
403.8
|
5.2
|
0.1
|
-
|
||||||||||||||
Principal
payments on long-term debt
|
1,360.0
|
-
|
-
|
-
|
1,360.0
|
||||||||||||||
Total
|
$
|
2,615.0
|
$
|
482.3
|
$
|
239.7
|
$
|
151.0
|
$
1,742.0
|
· |
$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.
|
December
31,
|
|||||||
ASSETS
|
2006
|
2005
|
|||||
Current
Assets:
|
|||||||
Cash
and cash equivalents
|
$
|
399,032
|
$
|
65,792
|
|||
Receivables:
|
|||||||
Trade,
net
|
54,082
|
59,115
|
|||||
Other
|
12,759
|
5,564
|
|||||
Gas
Receivables:
|
|||||||
Transportation
and exchange
|
9,115
|
29,557
|
|||||
Storage
|
11,704
|
12,576
|
|||||
Inventories
|
14,110
|
15,881
|
|||||
Costs
recoverable from customers
|
11,236
|
3,560
|
|||||
Gas
stored underground
|
14,001
|
6,500
|
|||||
Prepaid
expenses and other current assets
|
22,117
|
7,720
|
|||||
Total
current assets
|
548,156
|
206,265
|
|||||
Property,
Plant and Equipment:
|
|||||||
Natural
gas transmission plant
|
1,997,922
|
1,772,483
|
|||||
Other
natural gas plant
|
213,926
|
213,136
|
|||||
2,211,848
|
1,985,619
|
||||||
Less—accumulated
depreciation and amortization
|
187,412
|
118,213
|
|||||
Property,
plant and equipment, net
|
2,024,436
|
1,867,406
|
|||||
Other
Assets:
|
|||||||
Goodwill
|
163,474
|
163,474
|
|||||
Gas
stored underground
|
161,537
|
169,177
|
|||||
Costs
recoverable from customers
|
19,767
|
43,960
|
|||||
Other
|
33,929
|
15,209
|
|||||
Total
other assets
|
378,707
|
391,820
|
|||||
Total
Assets
|
$
|
2,951,299
|
$
|
2,465,491
|
December
31,
|
|||||||
LIABILITIES
AND PARTNERS’ CAPITAL
|
2006
|
2005
|
|||||
Current
Liabilities:
|
|||||||
Payables:
|
|||||||
Trade
|
$
|
56,604
|
$
|
20,433
|
|||
Affiliates
|
3,014
|
835
|
|||||
Other
|
14,459
|
3,681
|
|||||
Gas
Payables:
|
|||||||
Transportation
and exchange
|
15,485
|
14,710
|
|||||
Storage
|
42,127
|
27,559
|
|||||
Other
accrued taxes
|
16,082
|
16,004
|
|||||
Accrued
interest
|
19,376
|
17,996
|
|||||
Accrued
payroll and employee benefits
|
18,198
|
29,028
|
|||||
Current
note payable
|
-
|
42,100
|
|||||
Deferred
income
|
22,147
|
1,025
|
|||||
Other
current liabilities
|
20,926
|
28,916
|
|||||
Total
current liabilities
|
228,418
|
202,287
|
|||||
Long
-Term Debt
|
1,350,920
|
1,101,290
|
|||||
Other
Liabilities and Deferred Credits:
|
|||||||
Pension
and postretirement benefits
|
15,761
|
32,413
|
|||||
Asset
retirement obligation
|
14,307
|
14,074
|
|||||
Provision
for other asset retirement
|
39,644
|
33,212
|
|||||
Other
|
29,742
|
93,541
|
|||||
Total
other liabilities and deferred credits
|
99,454
|
173,240
|
|||||
Commitments
and Contingencies
|
|||||||
Partners’
Capital:
|
|||||||
Common
units - 75,156,122 and 68,256,122 common units issued and outstanding
as
of December 31, 2006 and 2005
|
941,792
|
705,609
|
|||||
Subordinated
units - 33,093,878 units issued and outstanding as of
December
31, 2006 and 2005
|
285,543
|
266,578
|
|||||
General
partner
|
22,060
|
16,661
|
|||||
Accumulated
other comprehensive income (loss), net of tax
|
23,112
|
(174
|
)
|
||||
Total
partners’ capital
|
1,272,507
|
988,674
|
|||||
Total
Liabilities and Partners’ Capital
|
$
|
2,951,299
|
$
|
2,465,491
|
For
the Year Ended December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
Operating
Revenues:
|
||||||||||
Gas
transportation
|
$
|
508,241
|
$
|
505,148
|
$
|
245,306
|
||||
Parking
and lending
|
49,163
|
21,426
|
8,182
|
|||||||
Gas
storage
|
32,396
|
21,667
|
7,289
|
|||||||
Other
|
17,842
|
12,225
|
2,844
|
|||||||
Total
operating revenues
|
607,642
|
560,466
|
263,621
|
|||||||
Operating
Costs and Expenses:
|
||||||||||
Operation
and maintenance
|
161,279
|
174,641
|
48,336
|
|||||||
Administrative
and general
|
97,298
|
78,752
|
52,535
|
|||||||
Depreciation
and amortization
|
75,771
|
72,078
|
33,977
|
|||||||
Taxes
other than income taxes*
|
24,175
|
27,361
|
19,044
|
|||||||
Net
(gain) on disposal of operating assets
|
(4,829
|
)
|
(7,846
|
)
|
-
|
|||||
Total
operating costs and expenses
|
353,694
|
344,986
|
153,892
|
|||||||
|
||||||||||
Operating
income
|
253,948
|
215,480
|
109,729
|
|||||||
Other
(Income) Deductions:
|
||||||||||
Interest
expense
|
62,123
|
60,067
|
30,081
|
|||||||
Interest
income
|
(4,202
|
)
|
(1,478
|
)
|
(352
|
)
|
||||
Interest
income from affiliates, net
|
(27
|
)
|
(2,186
|
)
|
(375
|
)
|
||||
Miscellaneous
other income, net
|
(1,749
|
)
|
(1,444
|
)
|
(783
|
)
|
||||
Total
other (income) deductions
|
56,145
|
54,959
|
28,571
|
|||||||
Income
before income taxes
|
197,803
|
160,521
|
81,158
|
|||||||
Income
taxes and charge-in-lieu of income taxes *
|
253
|
49,494
|
32,333
|
|||||||
Elimination
of cumulative deferred taxes *
|
-
|
10,102
|
-
|
|||||||
Net
income *
|
$
|
197,550
|
$
|
100,925
|
$
|
48,825
|
||||
Calculation
of limited partners’ interest in Net income:
|
For
the Year
Ended
December
31, 2006
|
For
the Period
November
15, 2005
through
December
31, 2005
|
|||||
Net
income
|
$
|
197,550
|
$
|
35,992
|
|||
Less
general partner’s interest in Net income
|
3,951
|
720
|
|||||
Limited
partners’ interest in Net income
|
$
|
193,599
|
$
|
35,272
|
|||
Basic
and diluted net income per limited partner unit:
|
|||||||
Common
and subordinated units
|
$
|
1.85
|
$
|
0.35
|
|||
Cash
distribution to common and subordinated unitholders and general
partner
unit equivalents
|
$
|
1.32
|
-
|
||||
Weighted-average
number of limited partners units outstanding:
|
|||||||
Common
units
|
68,977,766
|
68,256,122
|
|||||
Subordinated
units
|
33,093,878
|
33,093,878
|
For
the Year Ended December 31,
|
|||||
2006
|
2005
|
2004
|
|||
OPERATING
ACTIVITIES:
|
|||||
Net
income
|
$
197,550
|
$
100,925
|
$
48,825
|
||
Adjustments
to reconcile to cash provided from (used in) operations:
|
|||||
Depreciation
and amortization
|
75,771
|
72,078
|
33,977
|
||
Amortization
of acquired executory contracts
|
(3,997)
|
(9,630)
|
-
|
||
Provision
for deferred income taxes
|
(39)
|
54,682
|
43,428
|
||
Gain
on disposal of operating assets
|
(4,829)
|
(7,846)
|
-
|
||
Changes
in operating assets and liabilities, net of assets and liabilities
acquired:
|
|||||
Receivables
|
20,878
|
(21,147)
|
(9,777)
|
||
Inventories
|
1,772
|
(1,699)
|
(217)
|
||
Affiliates
|
2,180
|
(824)
|
(341)
|
||
Other
current assets
|
(18,058)
|
(3,669)
|
6,320
|
||
Accrued
and deferred income taxes
|
85
|
4,908
|
(10,996)
|
||
Payables
and accrued liabilities
|
31,902
|
43,788
|
(9,532)
|
||
Other,
including changes in noncurrent assets and liabilities
|
(47,663)
|
(12,852)
|
2,729
|
||
Net
cash provided by operating activities
|
255,552
|
218,714
|
104,416
|
||
INVESTING
ACTIVITIES:
|
|||||
Capital
expenditures, net
|
(200,330)
|
(82,955)
|
(41,920)
|
||
Proceeds
from sale of operating assets
|
3,646
|
4,725
|
-
|
||
Proceeds
from insurance reimbursements and other recoveries
|
5,928
|
4,177
|
-
|
||
Advances
to affiliates, net
|
(760)
|
(28,252)
|
(32,194)
|
||
Investment
in Gulf South, net of cash and working capital adjustment
receivable
|
-
|
-
|
(1,111,411)
|
||
Net
cash used in investing activities
|
(191,516)
|
(102,305)
|
(1,185,525)
|
||
FINANCING
ACTIVITIES:
|
|||||
Proceeds
from notes payable
|
-
|
42,100
|
-
|
||
Payments
of notes payable
|
(42,100)
|
(250,000)
|
-
|
||
Proceeds
from long-term debt, net of issuance costs
|
338,307
|
569,369
|
575,000
|
||
Payment
of long-term debt
|
(90,000)
|
(575,000)
|
(17,285)
|
||
Distributions
and dividends
|
(136,388)
|
(131,686)
|
(30,000)
|
||
Capital
contribution from parent and general partner
|
4,176
|
6,684
|
550,741
|
||
Proceeds
from sale of common units, net of related transaction
costs
|
195,209
|
271,398
|
-
|
||
Net
cash provided by (used in) financing activities
|
269,204
|
(67,135)
|
1,078,456
|
||
Increase
(decrease) in cash and cash equivalents
|
333,240
|
49,274
|
(2,653)
|
||
Cash
and cash equivalents at beginning of period
|
65,792
|
16,518
|
19,171
|
||
Cash
and cash equivalents at end of period
|
$
399,032
|
$
65,792
|
$
16,518
|
Paid
in Capital
|
Retained
Earnings
|
Accumulated
Other Comp Income (Loss)
|
Common
Units
|
Subordinated
Units
|
General
Partner
|
Total
Partners’ Capital
|
||||||||
Balance
January 1, 2004
|
$
520,910
|
$
2,451
|
-
|
-
|
-
|
-
|
-
|
|||||||
Add
(deduct):
|
||||||||||||||
Capital
contribution
|
550,741
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||
Net
income
|
-
|
48,825
|
-
|
-
|
-
|
-
|
-
|
|||||||
Dividends
paid
|
-
|
|
(30,000)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Balance
December 31, 2004
|
$
1,071,651
|
|
$
21,276
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Add
(deduct):
|
|
|
|
|
|
|
-
|
|||||||
Net
income
|
-
|
64,933
|
-
|
-
|
-
|
-
|
-
|
|||||||
Capital
contribution
|
6,684
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||
Dividends
paid
|
-
|
(233,087)
|
-
|
-
|
-
|
-
|
-
|
|||||||
Other
comprehensive income, net of tax
|
-
|
-
|
$
287
|
-
|
-
|
-
|
-
|
|||||||
Elimination
of deferred taxes on accumulated other comprehensive
income
|
-
|
|
-
|
|
64
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Balance
November 15, 2005
|
$
1,078,335
|
|
$(146,878)
|
|
$
351
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Boardwalk
Pipeline Partners, LP
|
|
|
|
|
|
|
||||||||
Add
(deduct):
|
||||||||||||||
Capital
contribution, including assumption of debt of $250.0
million
|
||||||||||||||
(53,256,122
common units, 33,093,878 subordinated units and 2% general
partner
interest)
|
-
|
-
|
$
351
|
$
410,456
|
$
255,061
|
$
15,941
|
$
681,809
|
|||||||
Sale
of common units, net of related transaction costs (15,000,000
units)
|
-
|
-
|
-
|
271,398
|
-
|
271,398
|
||||||||
Other
comprehensive loss
|
-
|
-
|
(525)
|
-
|
(525)
|
|||||||||
Net
income
|
-
|
|
-
|
|
-
|
|
23,755
|
|
11,517
|
|
720
|
|
35,992
|
|
Balance
December 31, 2005
|
-
|
|
-
|
|
$
(174)
|
|
$
705,609
|
|
$
266,578
|
|
$
16,661
|
|
$
988,674
|
|
Add
(deduct):
|
|
|
|
|
|
|
|
|||||||
Net
Income
|
-
|
-
|
-
|
130,990
|
62,609
|
3,951
|
197,550
|
|||||||
Distributions
paid
|
-
|
-
|
-
|
(90,016)
|
(43,644)
|
(2,728)
|
(136,388)
|
|||||||
Sale
of common units, net of related transaction costs (6,900,000
units)
|
-
|
-
|
-
|
195,209
|
-
|
-
|
195,209
|
|||||||
Capital
contribution
|
-
|
-
|
-
|
-
|
-
|
4,176
|
4,176
|
|||||||
Other
comprehensive income, net of tax
|
-
|
-
|
8,483
|
-
|
-
|
-
|
8,483
|
|||||||
Adjustment
to initially apply SFAS No. 158, net of tax
|
-
|
|
-
|
|
14,803
|
|
-
|
|
-
|
|
-
|
|
14,803
|
|
Balance
December 31, 2006
|
-
|
|
-
|
|
$
23,112
|
|
$
941,792
|
|
$
285,543
|
|
$
22,060
|
|
$1,272,507
|
For
the Year
Ended
December
31, 2006
|
For
the Year Ended December 31, 2005
|
For
the Year
Ended
December
31, 2004
|
||||||||
Net
income
|
$
|
197,550
|
$
|
100,925
|
$
|
48,825
|
||||
Other
comprehensive income (loss):
|
||||||||||
Gain
(loss) on cash flow hedges
|
19,405
|
(2,735
|
)
|
-
|
||||||
Reclassification
adjustment transferred to Net income
|
(10,922
|
)
|
2,561
|
-
|
||||||
Total
comprehensive income
|
$
|
206,033
|
$
|
100,751
|
$
|
48,825
|
· |
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.
|
Current
assets
|
$
|
71,283
|
||
Property,
plant and equipment
|
1,159,251
|
|||
Other
non-current assets
|
28,319
|
|||
Current
liabilities
|
(84,273
|
)
|
||
Other
liabilities and deferred credits
|
(53,153
|
)
|
||
$
|
1,121,427
|
(unaudited)
|
||||
For
the Year
Ended
December
31, 2004
|
||||
Operating
revenues
|
$
|
504,471
|
||
Income
before income taxes
|
121,598
|
|||
Net
income
|
73,525
|
For
the Year Ended December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
Allowance
for borrowed funds used during construction and capitalized interest
|
$
|
2.3
|
$
|
0.7
|
$
|
0.3
|
||||
Allowance
for equity funds used during construction
|
1.2
|
1.4
|
0.8
|
2006
|
2005
|
||
Operating
Revenues
|
$
3.3
|
$
(2.0)
|
|
Operating
Costs and Expenses
|
7.3
|
(10.9)
|
|
Increase/(Decrease)
in Net Income
|
$
10.6
|
$
(12.9)
|
· |
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.
|
2007
|
$
5.9
|
2008
|
5.6
|
2009
|
4.5
|
2010
|
4.2
|
2011
|
2.0
|
Thereafter
|
12.6
|
Total
|
$
34.8
|
Less
than 1 year
|
$
403.8
|
|
1-3
years
|
5.2
|
|
4-5
years
|
0.1
|
|
More
than 5 years
|
-
|
|
Total
|
$
409.1
|
Category
|
2006
Class Amount
|
Weighted-Average
Useful Lives (Years)
|
2005
Class Amount
|
Weighted-Average
Useful Lives (Years)
|
|||||||||
Depreciable
plant:
|
|||||||||||||
Intangible
|
$
|
18,901
|
9
|
|
$
|
10,776
|
30
|
||||||
Gathering
|
90,787
|
19
|
88,852
|
19
|
|||||||||
Storage
|
163,323
|
48
|
155,717
|
46
|
|||||||||
Transmission
|
1,601,064
|
45
|
1,484,901
|
42
|
|||||||||
General
|
63,698
|
16
|
64,548
|
19
|
|||||||||
Total
utility depreciable plant
|
1,937,733
|
43
|
1,804,794
|
41
|
|||||||||
Non-depreciable:
|
|||||||||||||
Land
|
9,386
|
9,470
|
|||||||||||
Storage
|
85,392
|
85,393
|
|||||||||||
Other
|
179,297
|
85,962
|
|||||||||||
Total
other
|
274,075
|
180,825
|
|||||||||||
Total
PPE
|
2,211,848
|
1,985,619
|
|||||||||||
Less:
accumulated depreciation
|
187,412
|
118,213
|
|||||||||||
Total
PPE, net
|
$
|
2,024,436
|
$
|
1,867,406
|
2006
|
2005
|
||||||
Balance
at beginning of year
|
$
|
14,074
|
$
|
3,254
|
|||
Liabilities
recorded
|
(366
|
)
|
10,593
|
||||
Liabilities
settled
|
-
|
(417
|
)
|
||||
Accretion
expense
|
599
|
644
|
|||||
Balance
at end of year
|
$
|
14,307
|
$
|
14,074
|
2006
|
2005
|
||||||
Regulatory
Assets:
|
|||||||
Pension
|
$
|
7,820
|
$
|
3,841
|
|||
Tax
effect of AFUDC equity
|
6,794
|
7,236
|
|||||
Unamortized
debt expense and premium on reacquired debt
|
11,703
|
12,701
|
|||||
Postretirement
benefits other than pension
|
10,569
|
33,156
|
|||||
Fuel
tracker
|
5,783
|
2,005
|
|||||
Imbalances/storage
valuation tracker
|
37
|
1,282
|
|||||
Total
regulatory assets
|
$
|
42,706
|
$
|
60,221
|
Regulatory
Liabilities:
|
|||||||
Provision
for asset retirement
|
$
|
39,644
|
$
|
33,212
|
|||
Unamortized
discount on long-term debt
|
(1,851
|
)
|
(2,024
|
)
|
|||
Total
regulatory liabilities
|
$
|
37,793
|
$
|
31,188
|
December
31,
|
|||||||
2006
|
2005
|
||||||
Boardwalk
Pipelines
|
|||||||
5.88%
Notes due 2016
|
$
|
250,000
|
-
|
||||
5.20%
Notes due 2018
|
185,000
|
$
|
185,000
|
||||
5.50%
Notes due 2017
|
300,000
|
300,000
|
|||||
Texas
Gas
|
|||||||
7.25%
Debentures due 2027
|
100,000
|
100,000
|
|||||
4.60%
Notes due 2015
|
250,000
|
250,000
|
|||||
Gulf
South
|
|||||||
5.05%
Notes due 2015
|
275,000
|
275,000
|
|||||
1,360,000
|
1,110,000
|
||||||
Unamortized
debt discount
|
(9,080
|
)
|
(8,710
|
)
|
|||
Total
long-term debt
|
$
|
1,350,920
|
$
|
1,101,290
|
|
December
31, 2006
|
December
31, 2005
|
|||||
Prepaid
expenses and other current assets
|
$
|
13.7
|
$
|
0.6
|
|||
Other
current liabilities
|
5.1
|
0.8
|
|||||
Accumulated
other comprehensive income (loss)
|
8.5
|
(0.2
|
)
|
Retirement
Plans
|
PBOP
|
||||||
For
the Year Ended December 31,
|
For
the Year Ended December 31,
|
||||||
2006
|
2005
|
2006
|
2005
|
||||
Funded
status:
|
|||||||
Projected
benefit obligation
|
$
136,886
|
$
116,931
|
-
|
-
|
|||
APBO
|
-
|
-
|
$
65,341
|
$
134,188
|
|||
Plan
assets at fair value
|
121,125
|
96,194
|
80,218
|
79,463
|
|||
Funded
status
|
(15,761)
|
(20,737)
|
14,877
|
(54,725)
|
|||
Unrecognized
net actuarial loss
|
-
|
15,691
|
-
|
20,412
|
|||
Net
amount recognized
|
$
(15,761)
|
$
(5,046)
|
$
14,877
|
$
(34,313)
|
|||
Items
not yet recognized as components of net periodic pension
cost:
|
|||||||
Prior
service cost
|
$
73
|
-
|
$
(70,744)
|
-
|
|||
Net
actuarial loss (gain)
|
17,967
|
-
|
22,316
|
-
|
|||
Total
|
$
18,040
|
-
|
$
(48,428)
|
-
|
Retirement
Plans
|
PBOP
|
|||||||
For
the Year Ended December 31,
|
For
the Year Ended December 31,
|
|||||||
2006
|
2005
|
2006
|
2005
|
|||||
Change
in benefit obligation:
|
||||||||
Benefit
obligation at beginning of period
|
$
116,931
|
$
104,412
|
$
134,188
|
$
125,599
|
||||
Service
cost
|
4,432
|
4,067
|
1,319
|
2,076
|
||||
Interest
cost
|
6,695
|
6,283
|
5,147
|
7,222
|
||||
Plan
participants’ contributions
|
-
|
-
|
1,509
|
1,328
|
||||
Actuarial
loss
|
6,326
|
6,214
|
4,902
|
5,379
|
||||
Benefits
paid
|
(3,576)
|
(4,045)
|
(7,633)
|
(7,416)
|
||||
Retirement
/ PBOP plan amendment
|
73
|
-
|
(75,271)
|
-
|
||||
Special
termination benefits (ERIP)
|
6,005
|
-
|
884
|
-
|
||||
Retiree
drug subsidy
|
-
|
-
|
296
|
-
|
||||
Benefit
obligation at end of period
|
$
136,886
|
$
116,931
|
$
65,341
|
$
134,188
|
||||
Change
in plan assets:
|
||||||||
Fair
value of plan assets at beginning of period
|
$
96,193
|
$
93,056
|
$
79,462
|
$
76,499
|
||||
Actual
return on plan assets
|
10,468
|
7,131
|
6,539
|
5,164
|
||||
Benefits
paid
|
(3,576)
|
(4,045)
|
(7,633)
|
(7,416)
|
||||
Company
contributions
|
18,040
|
52
|
341
|
3,888
|
||||
Plan
participants’ contributions
|
-
|
-
|
1,509
|
1,328
|
||||
Fair
value of plan assets at end of period
|
$
121,125
|
$
96,194
|
$
80,218
|
$
79,463
|
For
the Year Ended December 31,
|
|||||||
2006
|
2005
|
||||||
Projected
benefit obligation
|
$
|
136,886
|
$
|
116,931
|
|||
Accumulated
benefit obligation
|
118,147
|
94,935
|
|||||
Fair
value of plan assets
|
121,125
|
96,194
|
Retirement
Plans
|
PBOP
|
||||||||||||||||||
For
the Year Ended December 31,
|
For
the Year Ended December 31,
|
||||||||||||||||||
2006
|
2005
|
2004
|
2006
|
2005
|
2004
|
||||||||||||||
Service
cost
|
$
|
4,432
|
$
|
4,067
|
$
|
3,531
|
$
|
1,319
|
$
|
2,076
|
$
|
2,095
|
|||||||
Interest
cost
|
6,695
|
6,283
|
5,636
|
5,147
|
7,222
|
5,912
|
|||||||||||||
Expected
return on plan assets
|
(7,131
|
)
|
(6,859
|
)
|
(6,644
|
)
|
(4,653
|
)
|
(4,632
|
)
|
(5,252
|
)
|
|||||||
Amortization
of prior service credit
|
-
|
-
|
-
|
(4,527
|
)
|
-
|
-
|
||||||||||||
Amortization
of unrecognized net loss (gain)
|
713
|
300
|
(20
|
)
|
1,112
|
362
|
(66
|
)
|
|||||||||||
Special
termination benefit (ERIP)
|
6,005
|
-
|
-
|
884
|
-
|
-
|
|||||||||||||
Regulatory
asset decrease (increase)
|
(3,979
|
)
|
(3,713
|
)
|
(2,455
|
)
|
7,337
|
-
|
-
|
||||||||||
Net
periodic pension expense
|
$
|
6,735
|
$
|
78
|
$
|
48
|
$
|
6,619
|
$
|
5,028
|
$
|
2,689
|
Retirement
Plans
|
PBOP
|
||
2007
|
$
35,674
|
|
$
5,524
|
2008
|
3,808
|
|
5,393
|
2009
|
4,286
|
|
5,223
|
2010
|
6,280
|
|
5,012
|
2011
|
7,052
|
|
4,962
|
2012-2017
|
60,973
|
|
23,055
|
Retirement
Plan
|
PBOP
|
||||||||||||
December
31, 2006
|
December
31, 2005
|
December
31, 2006
|
December
31, 2005
|
||||||||||
Debt
securities
|
37.1
|
%
|
62.5
|
%
|
-
|
-
|
|||||||
Equity
securities
|
27.4
|
%
|
30.9
|
%
|
-
|
-
|
|||||||
Limited
partnership
|
12.1
|
%
|
6.4
|
%
|
-
|
-
|
|||||||
Other
|
23.4
|
%
|
0.2
|
%
|
-
|
-
|
|||||||
Fixed
income
|
-
|
-
|
46.3
|
%
|
45.2
|
%
|
|||||||
Cash
and other
|
-
|
-
|
53.7
|
%
|
54.8
|
%
|
|||||||
Total
|
100.0
|
%
|
100.00
|
%
|
100.0
|
%
|
100.0
|
%
|
Retirement
Plans
|
PBOP
|
||||
December
31, 2006
|
December
31, 2005
|
December
31, 2006
|
December
31, 2005
|
||
Discount
rate
|
5.75%
|
5.63%
|
5.75%
|
5.63%
|
|
Rate
of compensation increase
|
5.50%
|
5.50%
|
-
|
-
|
Retirement
Plans
|
PBOP
|
||||||
For
the Year Ended December 31,
|
For
the Year Ended December 31,
|
||||||
2006
|
2005
|
2004
|
2006
|
2005
|
2004
|
||
Discount
rate
|
5.63%
|
5.88%
|
6.25%
|
5.63%
to 5.75%
|
5.88%
|
5.88%
|
|
Expected
return on plan assets
|
7.50%
|
7.50%
|
7.50%
|
6.15%
to 5.00%
|
6.15%
to 5.00%
|
7.50%
to 5.00%
|
|
Rate
of compensation increase
|
5.50%
|
5.50%
|
5.50%
|
-
|
-
|
-
|
Effect
of 1% Increase:
|
2006
|
2005
|
2004
|
|||||||
Benefit
obligation at end of year
|
$
|
3,102
|
$
|
19,785
|
$
|
18,077
|
||||
Total
of service and interest costs for year
|
927
|
1,585
|
1,352
|
Effect
of 1% Decrease:
|
||||||||||
Benefit
obligation at end of year
|
$
|
(2,764
|
)
|
(16,077
|
)
|
(14,670
|
)
|
|||
Total
of service and interest costs for year
|
(757
|
)
|
(1,263
|
)
|
(1,078
|
)
|
|
|
|
|
|
|
|
|
||||||
|
|
Total
Quarterly Distribution
|
Marginal Percentage Interest in
Distributions
|
||||||||||
|
Target
Amount
|
Common
and
Subordinated
Unitholders
|
|
General Partner
|
|||||||||
Minimum
Quarterly Distribution
|
|
$0.3500
|
|
98%
|
2%
|
||||||||
First
Target Distribution
|
|
up to $0.4025
|
|
98%
|
2%
|
||||||||
Second
Target Distribution
|
|
above $0.4025 up to $0.4375
|
|
85%
|
15%
|
||||||||
Third
Target Distribution
|
|
above
$0.4375 up to $0.5250
|
|
75%
|
25%
|
||||||||
Thereafter
|
|
above
$0.5250
|
|
50%
|
50%
|
For
the Year Ended
December
31, 2006
|
For
the Period
November
15, 2005
through
December
31, 2005
|
||||||
Limited
partners' interest in net income
|
$
|
193,599
|
$
|
35,272
|
|||
Less
assumed allocation to incentive distribution rights
|
5,187
|
-
|
|||||
Net
income available to limited partners
|
188,412
|
35,272
|
|||||
Less
assumed allocation to subordinated units
|
61,087
|
11,382
|
|||||
Net
income available to common units
|
$
|
127,325
|
$
|
23,890
|
|||
Weighted
average common units
|
68,977,766
|
68,256,122
|
|||||
Weighted
average subordinated units
|
33,093,878
|
33,093,878
|
|||||
Net
income per limited partner unit - common and subordinated
units
|
$
|
1.85
|
$
|
0.35
|
Record
Date
|
Payable
Date
|
Distribution
per Unit
|
||
February
20, 2007
|
|
February
27, 2007
|
|
$
0.415
|
October
30, 2006
|
|
November
6, 2006
|
|
0.40
|
August
11, 2006
|
|
August
18, 2006
|
|
0.38
|
May
12, 2006
|
|
May
19, 2006
|
|
0.36
|
February
16, 2006
|
|
February
23, 2006
|
|
0.1788*
|
*Distribution
represented a prorated portion of the $0.35 per unit “minimum quarterly
distribution” (as defined in the Partnership’s partnership agreement) for
the period November 15, 2005 through December 31,
2005.
|
For
the Year Ended December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
Current
expense (benefit):
|
||||||||||
Federal
|
-
|
$
|
4,044
|
$
|
(9,131
|
)
|
||||
State
|
$
|
292
|
870
|
(1,964
|
)
|
|||||
Total
|
292
|
4,914
|
(11,095
|
)
|
||||||
Deferred
provision (benefit) :
|
||||||||||
Federal
|
-
|
36,690
|
35,803
|
|||||||
State
|
(39
|
)
|
7,890
|
7,625
|
||||||
Elimination
of cumulative deferred taxes
|
-
|
10,102
|
-
|
|||||||
Total
|
(39
|
)
|
54,682
|
43,428
|
||||||
Income
taxes and charge-in-lieu of income taxes
|
$
|
253
|
$
|
59,596
|
$
|
32,333
|
For
the Year Ended December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
Provision
at statutory rate
|
-
|
$
|
43,583
|
$
|
28,405
|
|||||
Increases
in taxes resulting from:
|
||||||||||
State
income taxes
|
$
|
253
|
5,694
|
3,680
|
||||||
Other,
net
|
-
|
217
|
248
|
|||||||
Elimination
of deferred taxes
|
-
|
10,102
|
-
|
|||||||
Income
taxes and charge-in-lieu of income taxes
|
$
|
253
|
$
|
59,596
|
$
|
32,333
|
2006
|
2005
|
|||||||
Financial
Assets
|
Carrying
Amount
|
Fair
Value
|
Carrying
Amount
|
Fair
Value
|
||||
Cash
and cash equivalents
|
$ 399,032
|
$ 399,032
|
$ 65,792
|
$ 65,792
|
||||
Financial
Liabilities
|
||||||||
Long-term
debt
|
$ 1,350,920
|
$ 1,318,293
|
$ 1,101,290
|
$ 1,090,854
|
For
the Year Ended December 31,
|
|||||||
2006
|
2005
|
||||||
Gain
(loss) on cash flow hedges, net of tax
|
$
|
8,309
|
$
|
(174
|
)
|
||
Adjustment
to initially apply SFAS No. 158, net of tax
|
14,803
|
-
|
|||||
Total
Accumulated other comprehensive income (loss), net of tax
|
$
|
23,112
|
$
|
(174
|
)
|
For
the Year Ended December 31,
|
||||||||||||
2006
|
2005
|
2004
|
||||||||||
Customer
|
Revenue
|
%
|
Revenue
|
%
|
Revenue
|
%
|
||||||
ProLiance
Energy, LLC
|
$ 55,129
|
9.1%
|
$ 51,168
|
9.1%
|
$ 56,742
|
21.5%
|
||||||
Atmos
Energy
|
56,413
|
9.3%
|
61,774
|
11.0%
|
28,569
|
10.8%
|
(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.
|
Retirement
Plans
|
||||||
Before
Application of SFAS No. 158
|
Adjustments
|
After
Application of SFAS No. 158
|
||||
Other
Assets - Costs recoverable from customers
|
$
7,820
|
-
|
$
7,820
|
|||
Other
Assets - Other
|
3,561
|
$
(3,561)
|
-
|
|||
Total
Assets
|
$
11,381
|
$
(3,561)
|
$
7,820
|
|||
Other
Liabilities and Deferred Credits - Other
|
1,282
|
14,479
|
15,761
|
|||
AOCI
(Loss)
|
-
|
(18,040)
|
(18,040)
|
|||
Total
Liabilities and Partners’ Capital
|
$
1,282
|
$
(3,561)
|
$
(2,279)
|
PBOP
|
||||||
Before
Application of SFAS No. 158
|
Adjustments
|
After
Application of SFAS No. 158
|
||||
Current
Assets - Costs recoverable from customers
|
$ 5,415
|
-
|
$ 5,415
|
|||
Other
Assets - Costs recoverable from customers
|
20,692
|
$
(15, 538)
|
5,154
|
|||
Other
Assets - Other
|
-
|
14,877
|
14,877
|
|||
Total
Assets
|
$
26,107
|
$
(661)
|
$ 25,446
|
|||
Pension
and postretirement benefits
|
$
33,551
|
$
(33,551)
|
-
|
|||
AOCI
Gain
|
-
|
32,890
|
$ 32,890
|
|||
Total
Liabilities and Partners’ Capital
|
$
33,551
|
$ (661)
|
$ 32,890
|
For
the Year Ended December 31,
|
||||||||||
2006
|
2005
|
2004
|
||||||||
Cash
paid during the period for:
|
||||||||||
Interest
(net of amount capitalized)
|
$
|
58,111
|
$
|
45,357
|
$
|
28,847
|
||||
Income
taxes, net
|
215
|
-
|
-
|
|||||||
Non-cash
capital contribution
|
-
|
681,809
|
-
|
|||||||
Non-cash
dividends
|
-
|
101,401
|
-
|
2006
For
the Quarter Ended:
|
||||||||
December
31
|
September
30
|
June
30
|
March
31
|
|||||
Operating
revenues
|
$
171,489
|
|
$
133,045
|
|
$
128,662
|
|
$
174,446
|
|
Operating
expenses
|
|
92,811
|
|
88,272
|
|
82,798
|
|
89,813
|
Operating
income
|
78,678
|
|
44,773
|
|
45,864
|
|
84,633
|
|
Interest
expense, net
|
13,348
|
|
14,424
|
|
14,517
|
|
15,632
|
|
Other
expense (income)
|
|
168
|
|
(416)
|
|
(799)
|
|
(729)
|
Income
before income taxes
|
|
65,162
|
|
30,765
|
|
32,146
|
|
69,730
|
Charge-in-lieu
of income taxes
|
|
(111)
|
|
118
|
|
246
|
|
-
|
Net
income
|
|
$ 65,273
|
|
$
30,647
|
|
$
31,900
|
|
$ 69,730
|
2005
For
the Quarter Ended:
|
||||||||
December
31
|
September
30
|
June
30
|
March
31
|
|||||
Operating
revenues
|
$
170,905
|
|
$
120,916
|
|
$
118,263
|
|
$
150,382
|
|
Operating
expenses
|
89,378
|
|
99,898
|
|
81,910
|
|
73,800
|
|
Operating
income
|
81,527
|
|
21,018
|
|
36,353
|
|
76,582
|
|
Interest
expense, net
|
14,964
|
|
14,632
|
|
14,482
|
|
14,511
|
|
Other
income
|
|
722
|
|
1,215
|
|
922
|
|
771
|
Income
before income taxes
|
67,285
|
|
7,601
|
|
22,793
|
|
62,842
|
|
Charge-in-lieu
of income taxes
|
22,476
|
|
3,047
|
|
9,088
|
|
24,985
|
|
Net
income
|
$ 44,809
|
|
$
4,554
|
|
$
13,705
|
|
$
37,857
|
· |
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.
|
Name
|
Age
|
Position
|
||
Rolf
A. Gafvert
|
53
|
Chief
Executive Officer and Director
|
||
H.
Dean Jones II
|
54
|
President
and Director
|
||
Jamie
L. Buskill
|
42
|
Chief
Financial Officer
|
||
Arthur
L. Rebell
|
66
|
Director,
Chairman of the Board
|
||
William
R. Cordes
|
58
|
Director
|
||
Thomas
E. Hyland
|
61
|
Director
|
||
Jonathan
E. Nathanson
|
45
|
Director
|
||
Mark
L. Shapiro
|
62
|
Director
|
||
Andrew
H. Tisch
|
57
|
Director
|
· |
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.
|
Summary
Compensation Table
|
|||||||||
Name
and
Position
|
Year
|
Salary
|
Bonus
(1)
|
Stock
Awards
(2)
|
Option
Awards
|
Non-Equity
Incentive Plan
Compensation
(3)
|
Change
in
Pension
value
and
nonqualified
deferred compensation earnings
|
All
Other
Compensation
|
Total
|
Rolf
A. Gafvert
|
2006
|
$
240,000
|
$300,000
|
$112,944
|
-
|
$183,442
|
-
|
$
32,149 (4)
|
$
868,535
|
Chief
Executive Officer and Director
|
|||||||||
H.
Dean Jones II
|
2006
|
325,000
|
195,000
|
59,778
|
-
|
110,065
|
154,458
(5)
|
24,432
(5)
|
868,733
|
President
and Director
|
|||||||||
Jamie
L. Buskill
|
2006
|
225,000
|
100,000
|
26,196
|
-
|
87,011
|
40,333
(6)
|
14,292
(6)
|
492,832
|
Chief
Financial Officer
|
(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
($11,658).
|
Grants
of Plan-Based Awards
|
|||||||||||
Name
|
Grant
Date
(2006)
|
Estimated
future payouts under
non-equity
incentive plan awards (1)
|
Estimated
future payouts under equity incentive plan awards
|
All
other stock awards: number of shares of stock or units
(#)
|
All
other options awards: number of securities underlying
options
(#)
|
Exercise
or base price of option awards ($/sh)
|
Grant
Date Fair Value of Stock and Option Awards
($)
(2)
|
||||
Thres-hold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
||||||
Rolf
Gafvert
|
12/20
|
-
|
-
|
1,250,000
|
-
|
-
|
-
|
6,427
|
-
|
-
|
200,000
|
7/24
|
-
|
-
|
1,250,000
|
-
|
-
|
-
|
-
|
-
|
-
|
||
H.
Dean Jones II
|
12/20
|
-
|
-
|
750,000
|
-
|
-
|
-
|
2,571
|
-
|
-
|
80,000
|
7/24
|
-
|
-
|
750,000
|
-
|
-
|
-
|
-
|
-
|
-
|
||
Jamie
Buskill
|
12/20
|
-
|
-
|
500,000
|
-
|
-
|
-
|
1,205
|
-
|
-
|
37,500
|
7/24
|
-
|
-
|
600,000
|
-
|
-
|
-
|
-
|
-
|
-
|
(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
$31.12. Each such grant includes a tandem grant of Distribution Equivalent
Rights (DERs); vests 50% on the second anniversary of the grant date
and
50% on the third anniversary of the grant date; and will be payable
to the
grantee in cash upon vesting in an amount equal to the sum of the
fair
market value of the units (as defined in the plan) that vest on the
vesting date plus the vested amount then credited to the grantee’s DER
account, less applicable taxes. Note 9 in Item 8 of this Report contains
more information regarding our LTIP.
|
Outstanding
Equity Awards at Fiscal Year End
|
|||||||||
Option
Awards
|
Stock
Awards
|
||||||||
Name
|
Number
of Securities Underlying Unexercised Options (#)
Exercisable
|
Number
of Securities Underlying Unexercised Options (#) Unexercisable
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options
(#)
|
Option
Exercise Price
($)
|
Option
Expiration Date
|
Number
of Shares or Units of Stock that Have
Not
Vested ($)(1)
|
Market
Value of Shares or Units of Stock that Have not Vested
($)(2)
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other
Rights
that Have Not Vested (#)
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares,
Units or
Rights that Have Not Vested ($)
|
Rolf
Gafvert
|
-
|
-
|
-
|
-
|
-
|
14,457
|
456,155
|
-
|
-
|
H.Dean
Jones II
|
-
|
-
|
-
|
-
|
-
|
6,854
|
216,888
|
-
|
-
|
Jamie
Buskill
|
-
|
-
|
-
|
-
|
-
|
3,079
|
97,366
|
-
|
-
|
(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 $2,471.
|
Pension
Benefits
|
||||
Name
|
Plan
Name
|
Number
of Years Credited Service (#)
|
Present
Value of Accumulated Benefit
($)
|
Payments
During 2006
($)
|
H.
Dean Jones II
|
TGRP
|
26.1
|
$470,863
|
-
|
SRP
|
26.1
|
576,311
|
-
|
|
Jamie
Buskill
|
TGRP
|
20.3
|
142,649
|
-
|
SRP
|
20.3
|
18,879
|
-
|
Nonqualified
Deferred Compensation (1)
|
|||||
Name
|
Executive
Contributions in 2006
($)
|
Registrant
Contributions in 2006
($)
|
Aggregate
Earnings in 2006
($)
|
Aggregate
Withdrawals/ Distributions during 2006
($)
|
Aggregate
Balance at December 31, 2006
($)
|
H.
Dean Jones II
|
-
|
-
|
23,524
|
-
|
$249,656
|
(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 $9,961 reported in the Summary
Compensation Table above.
|
Name
|
Fees
Earned or Paid in Cash
($)
(1)
|
Stock
Awards
($)
(4)
|
Option
Awards ($)
|
Non-Equity
Incentive Plan Compensation ($)
|
Change
in Pension Value and Nonqualified Deferred Compensation
Earnings
|
All
Other Compensation including perquisites
($)
|
Total
($)
|
William
R. Cordes
|
8,750 (2)
|
-
|
-
|
-
|
-
|
-
|
8,750
|
Thomas
E. Hyland
|
60,667 (3)
|
10,800
|
-
|
-
|
-
|
-
|
71,467
|
Mark
L. Shapiro
|
54,833
|
10,800
|
-
|
-
|
-
|
-
|
65,633
|
Name
of Beneficial Owner
|
Common Units
Beneficially Owned
|
Percentage of
Common Units Beneficially Owned (1)
|
Subordinated
Units Beneficially Owned
|
Percentage
of Subordinated Units Beneficially Owned (1)
|
Percentage
of Total Equity Securities Beneficially Owned
|
|||||
Jamie
L. Buskill
|
-
|
-
|
-
|
-
|
-
|
|||||
William
R. Cordes
|
||||||||||
Rolf
A. Gafvert
|
-
|
-
|
-
|
-
|
-
|
|||||
Thomas
E. Hyland
|
5,500
|
*
|
-
|
-
|
-
|
|||||
H.
Dean Jones II
|
-
|
-
|
-
|
-
|
-
|
|||||
Jonathan
E. Nathanson
|
10,000
|
*
|
-
|
-
|
-
|
|||||
Arthur
L. Rebell
|
36,583
(2)
|
*
|
-
|
-
|
-
|
|||||
Mark
L. Shapiro
|
10,500
|
*
|
-
|
-
|
-
|
|||||
Andrew
H. Tisch
|
18,550
(3)
|
*
|
-
|
-
|
-
|
|||||
All
directors and executive officers as a group
|
81,133
|
*
|
-
|
-
|
-
|
|||||
BPHC
(4)
|
53,256,122
|
70.86%
|
33,093,878
|
100.00%
|
80.17%
|
|||||
Loews
Corporation (4)
|
53,256,122
|
70.86%
|
33,093,878
|
100.00%
|
80.17%
|
(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.
|
Plan
category
|
Number
of securities to be issued upon exercise of outstanding options,
warrants
and rights
|
Weighted-average
exercise price of outstanding options, warrants and
rights
|
Number
of securities remaining available for future issuance under equity
compensation plan (excluding securities reflected in the first
column)
|
|||
Equity
compensation plans approved by security holders
|
-
|
N/A
|
-
|
|||
Equity
compensation plans not approved by security holders
|
-
|
N/A
|
3,524,000
|
(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.
|
2006
|
2005
|
||||||
Audit
fees (1)
|
$
|
1,513
|
$
|
1,271
|
|||
Audit
related fees (2)
|
553
|
990
|
|||||
Tax
fees (3)
|
2
|
6
|
|||||
Total
|
$
|
2,068
|
$
|
2,267
|
(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.
|
Description
|
Balance
at Beginning of Period
|
Charged
to Costs and Expenses
|
Other
Additions (Recoveries)
|
Deductions
(Write-offs)
|
Balance
at End of Period
|
|||||||||||
Allowance
for doubtful accounts:
|
||||||||||||||||
2006
|
$
|
730
|
$
|
2,053
|
-
|
$
|
173
|
$
|
2,610
|
|||||||
2005
|
174
|
745
|
$
|
(187
|
)
|
2
|
730
|
|||||||||
2004
|
203
|
-
|
-
|
29
|
174
|
|||||||||||
Inventory
obsolescence:
|
||||||||||||||||
2006
|
-
|
33
|
-
|
-
|
33
|
|||||||||||
2005
|
201
|
-
|
11
|
212
|
-
|
|||||||||||
2004
|
630
|
-
|
16
|
445
|
201
|
Exhibit
Number
|
||
Description
|
||
3.1
|
Certificate
of Limited Partnership of Boardwalk Pipeline Partners, LP (Incorporated
by
reference to Exhibit 3.1 to the Registrant’s Registration Statement on
Form S-1, Registration No. 333-127578, filed on August 16,
2005).
|
|
3.2
|
Second
Amended and Restated Agreement of Limited Partnership of Boardwalk
Pipeline Partners, LP dated as of September 19, 2006. (Incorporated
by
reference to Exhibit 3.1 to Boardwalk Pipeline Partners, LP Current
Report
on Form 8-K filed on September 25, 2006).
|
|
3.3
|
Certificate
of Limited Partnership of Boardwalk GP, LP (Incorporated by reference
to
Exhibit 3.3 to the Registrant’s Registration Statement on Form S-1,
Registration No. 333-127578, filed on August 16, 2005).
|
|
3.4
|
Agreement
of Limited Partnership of Boardwalk GP, LP (Incorporated by reference
to
Exhibit 3.4 to Amendment No. 1 to the Registrant’s Registration Statement
on Form S-1, Registration No. 333-127578, filed on September 22,
2005).
|
|
3.5
|
Certificate
of Formation of Boardwalk GP, LLC (Incorporated by reference to
Exhibit
3.5 to the Registrant’s Registration Statement on Form S-1, Registration
No. 333-127578, filed on August 16, 2005).
|
|
3.6
|
Amended
and Restated Limited Liability Company Agreement (Incorporated
by
reference to Exhibit 3.6 to Amendment No. 4 to Registrant’s Registration
Statement on Form S-1, Registration No. 333-127578, filed on October
31,
2005).
|
|
10.1
|
Amended
and Restated Revolving Credit Agreement, dated as of June 29, 2006,
among
Boardwalk Pipelines, LP, Boardwalk Pipeline Partners, LP, the several
banks and other financial institutions or entities parties to the
agreement as lenders, the issuers party to the agreement, Wachovia
Bank,
National Association., as administrative agent for the lenders
and the
issuers, Citibank, N.A., as syndication agent, JPMorgan Chase Bank,
N.A.,
Deutsche Bank Securities, Inc. and Union Bank of California, N.A.,
as
co-documentation agents, and Wachovia Capital Markets LLC and Citigroup
Global Markets Inc., as joint lead arrangers and joint book managers
(Incorporated by reference to Exhibit 10.1 to the Registrant’s Current
Report on Form 8-K filed on July 5, 2006).
|
|
10.2
|
Contribution,
Conveyance and Assumption Agreement, dated as of November 15, 2005,
by and
among Boardwalk Pipelines Holding Corp., Boardwalk GP, LLC, Boardwalk
Pipeline Partners, LP, Boardwalk Operating GP, LLC, Boardwalk GP,
LP, and
Boardwalk Pipelines, LLC (Incorporated by reference to Exhibit
10.1 to the
Registrant’s Current Report on Form 8-K filed on November 18,
2005).
|
|
10.3
|
Indenture
dated July 15, 1997, between Texas Gas Transmission Corporation
(now known
as Texas Gas Transmission, LLC) and The Bank of New York, as Trustee
(Incorporated by reference to Exhibit 4.1 to Texas Gas Transmission
Corporation’s Registration Statement on Form S-3, Registration No.
333-27359, filed on May 19, 1997).
|
|
10.4
|
Indenture
dated as of May 28, 2003, between TGT Pipeline, LLC and The Bank
of New
York, as Trustee (Incorporated by reference to Exhibit 3.6 to TGT
Pipeline, LLC’s (now known as Boardwalk Pipelines, LP) Registration
Statement on Form S-4, Registration No. 333-108693, filed on September
11,
2003).
|
10.5
|
Indenture
dated as of May 28, 2003, between Texas Gas Transmission, LLC and
The Bank
of New York, as Trustee (Incorporated by reference to Exhibit 3.5
to
Boardwalk Pipelines, LLC’s (now known as Boardwalk Pipelines, LP)
Registration Statement on Form S-4, Registration No. 333-108693,
filed on
September 11, 2003).
|
|
10.6
|
Indenture
dated as of January 18, 2005 between TGT Pipeline, LLC and The
Bank of New
York, as Trustee, (Incorporated by reference to Exhibit 10.1 to
TGT
Pipeline, LLC’s (now known as Boardwalk Pipelines, LP) Current Report on
Form 8-K filed on January 24, 2005).
|
|
10.7
|
Indenture
dated as of January 18, 2005, between Gulf South Pipeline Company,
LP and
The Bank of New York, as Trustee (Incorporated by reference to
Exhibit
10.2 to Boardwalk Pipelines, LLC’s (now known as Boardwalk Pipelines, LP)
Current Report on Form 8-K filed on January 24, 2005).
|
|
10.8
|
Indenture
dated as of November 21, 2006, between Boardwalk Pipelines, LP,
as issuer,
the Registrant, as guarantor, and The Bank of New York Trust Company,
N.A., as Trustee (Incorporated by reference to Exhibit 4.1 to the
Registrant’s Current Report on Form 8-K filed on November 22,
2006).
|
|
10.9
|
Services
Agreement, dated as of May 16, 2003 by and between Loews Corporation
and Texas Gas Transmission, LLC. (Incorporated by reference to
Exhibit
10.8 to Amendment No. 3 to the Registrant’s Registration Statement on Form
S-1, Registration No. 333-127578, filed on October 24, 2005).
(1)
|
|
10.10
|
Boardwalk
Pipeline Partners Long-Term Incentive Plan (Incorporated by reference
to
Exhibit 10.9 to Amendment No. 4 to the Registrant’s Registration Statement
on Form S-1, Registration No. 333-127578, filed on October 31,
2005).
|
|
10.11
|
Form
of Phantom Unit Award Agreement under the Boardwalk Pipeline Partners
Long-Term Incentive Plan (Incorporated by reference to Exhibit
10.10 to
the Registrant’s 2005 Annual Report on Form 10-K filed on March 16,
2006).
|
|
10.12
|
Boardwalk
Pipeline Partners Strategic Long Term Incentive Plan (Incorporated
by
reference to Exhibits 10.1 and 10.2 to the Registrant’s Current Report on
Form 8-K filed on July 28, 2006).
|
|
10.13
|
Form
of GP Phantom Unit Award Agreement under the Boardwalk Pipeline
Partners
Strategic Long Term Incentive Plan (Incorporated by reference to
Exhibits
10.1 and 10.2 to the Registrant’s Current Report on Form 8-K filed on July
28, 2006).
|
|
10.14
|
Letter
Agreement, dated November 10, 2006, between Boardwalk Pipeline
Partners,
LP and Enterprise Gas Marketing L.P. (Incorporated by reference
to Exhibit
10.1 to the Registrant’s current Report on Form 8-K filed on November 14,
2006).
|
|
*21.1
|
List
of Subsidiaries of the Registrant.
|
|
*31.1
|
Certification
of, Rolf A. Gafvert, Chief Executive Officer, pursuant to Rule
13a-14(a)
and Rule 15d-14(a).
|
|
*31.2
|
Certification
of Jamie L. Buskill, Chief Financial Officer, pursuant to Rule
13a-14(a)
and Rule 15d-14(a).
|
|
*32.1
|
Certifications
of Rolf A. Gafvert, Chief Executive Officer, pursuant to Section
906 of
the Sarbanes-Oxley Act of 2002.
|
|
*32.2
|
Certification
of Jamie L. Buskill, Chief Financial Officer, pursuant to Section
906 of
the Sarbanes-Oxley Act of 2002.
|
|
*
Filed herewith
(1)
The Services Agreements between Gulf South Pipeline Company, LP
and Loews
Corporation and between Boardwalk Pipelines, LP (formerly known
as
Boardwalk Pipelines, LLC) and Loews Corporation are not filed because
they
are identical to exhibit 10.9 except for the identities of Gulf
South
Pipeline Company, LP and Boardwalk Pipelines, LLC and the date
of the
agreement.
|
Boardwalk
Pipeline Partners, LP
|
|||||
By:
Boardwalk GP, LP
|
|||||
its
general partner
|
|||||
By:
Boardwalk GP, LLC
|
|||||
its
general partner
|
|||||
Dated:
February 23, 2007
|
By:
|
/s/
Jamie L. Buskill
|
|||
Jamie
L. Buskill
|
|||||
Chief
Financial Officer
|
Dated:
February 23, 2007
|
/s/
Rolf A. Gafvert
|
|
Rolf
A. Gafvert
|
Chief
Executive Officer and Director
(principal
executive officer)
|
|
Dated:
February 23, 2007
|
/s/
H. Dean Jones II
|
|
H.
Dean Jones II
|
President
and Director
|
|
Dated:
February 23, 2007
|
/s/
Jamie L. Buskill
|
|
Jamie
L. Buskill
|
Chief
Financial Officer
(principal
financial officer)
|
|
Dated:
February 23, 2007
|
/s/
Steven A. Barkauskas
|
|
Steven
A. Barkauskas
|
Vice
President and Corporate Controller
(principal
accounting officer)
|
|
Dated:
February 23, 2007
|
/s/
William R. Cordes
|
|
William
R. Cordes
|
Director
|
|
Dated:
February 23, 2007
|
/s/
Thomas E. Hyland
|
|
Thomas
E. Hyland
|
Director
|
|
Dated:
February 23, 2007
|
/s/
Jonathon E. Nathanson
|
|
Jonathon
E. Nathanson
|
Director
|
|
Dated:
February 23, 2007
|
/s/
Arthur L. Rebell
|
|
Arthur
L. Rebell
|
Director
|
|
Dated:
February 23, 2007
|
/s/
Mark L. Shapiro
|
|
Mark
L. Shapiro
|
Director
|
|
Dated:
February 23, 2007
|
/s/
Andrew H. Tisch
|
|
Andrew
H. Tisch
|
Director
|