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.)
|
||
9
Greenway Plaza, Suite 2800
Houston,
Texas 77046
(866)
913-2122
|
||
(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
|
|
Item
1. Financial Statements
|
September
30,
|
December
31,
|
|||||||
ASSETS
|
2009
|
2008
|
||||||
Current
Assets:
|
||||||||
Cash
and cash equivalents
|
$ | 122.9 | $ | 137.7 | ||||
Short-term
investments
|
- | 175.0 | ||||||
Receivables:
|
||||||||
Trade,
net
|
71.6 | 67.3 | ||||||
Other
|
24.1 | 18.0 | ||||||
Gas
transportation receivables
|
5.6 | 13.5 | ||||||
Inventories
|
4.5 | 2.6 | ||||||
Costs
recoverable from customers
|
5.4 | 5.4 | ||||||
Gas
stored underground
|
3.9 | 0.2 | ||||||
Prepayments
|
12.0 | 17.3 | ||||||
Other
current assets
|
9.1 | 14.8 | ||||||
Total
current assets
|
259.1 | 451.8 | ||||||
Property,
Plant and Equipment:
|
||||||||
Natural
gas transmission plant
|
6,297.1 | 3,871.0 | ||||||
Other
natural gas plant
|
220.7 | 215.2 | ||||||
Construction
work-in-progress
|
243.4 | 2,196.4 | ||||||
Property,
plant and equipment, gross
|
6,761.2 | 6,282.6 | ||||||
Less—accumulated
depreciation and amortization
|
527.1 | 382.4 | ||||||
Property,
plant and equipment, net
|
6,234.1 | 5,900.2 | ||||||
Other
Assets:
|
||||||||
Goodwill
|
163.5 | 163.5 | ||||||
Gas
stored underground
|
134.8 | 124.8 | ||||||
Costs
recoverable from customers
|
15.1 | 15.4 | ||||||
Other
|
98.9 | 65.9 | ||||||
Total
other assets
|
412.3 | 369.6 | ||||||
Total
Assets
|
$ | 6,905.5 | $ | 6,721.6 |
September
30,
|
December
31,
|
|||||||
LIABILITIES
AND PARTNERS’ CAPITAL
|
2009
|
2008
|
||||||
Current
Liabilities:
|
||||||||
Payables:
|
||||||||
Trade
|
$ | 81.9 | $ | 216.4 | ||||
Affiliates
|
1.3 | 1.8 | ||||||
Other
|
8.7 | 7.4 | ||||||
Gas
transportation payables
|
7.9 | 11.6 | ||||||
Accrued
taxes, other
|
71.7 | 35.2 | ||||||
Accrued
interest
|
32.2 | 40.1 | ||||||
Accrued
interest – affiliate
|
3.3 | - | ||||||
Accrued
payroll and employee benefits
|
14.6 | 16.3 | ||||||
Construction
retainage
|
37.9 | 76.3 | ||||||
Deferred
income
|
24.3 | 1.8 | ||||||
Other
current liabilities
|
34.4 | 27.1 | ||||||
Total
current liabilities
|
318.2 | 434.0 | ||||||
Long
–term debt
|
2,924.5 | 2,889.4 | ||||||
Long
–term debt – affiliate
|
100.0 | - | ||||||
Total
long-term debt
|
3,024.5 | 2,889.4 | ||||||
Other
Liabilities and Deferred Credits:
|
||||||||
Pension
liability
|
33.5 | 35.7 | ||||||
Asset
retirement obligation
|
16.9 | 18.0 | ||||||
Provision
for other asset retirement
|
48.5 | 45.6 | ||||||
Payable
to affiliate
|
26.7 | 20.6 | ||||||
Other
|
50.0 | 33.3 | ||||||
Total
other liabilities and deferred credits
|
175.6 | 153.2 | ||||||
Commitments
and Contingencies
|
||||||||
Partners’
Capital:
|
||||||||
Common
units – 169.7 million units outstanding as of
September
30, 2009, and 154.9 million units outstanding as of December
31, 2008
|
2,666.3 | 2,504.8 | ||||||
Class
B units – 22.9 million units outstanding as of
September
30, 2009, and December 31, 2008
|
682.3 | 692.8 | ||||||
General
partner
|
66.1 | 62.9 | ||||||
Accumulated
other comprehensive loss
|
(27.5 | ) | (15.5 | ) | ||||
Total
partners’ capital
|
3,387.2 | 3,245.0 | ||||||
Total
Liabilities and Partners’ Capital
|
$ | 6,905.5 | $ | 6,721.6 |
For
the
Three
Months Ended
September
30,
|
For
the
Nine
Months Ended
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Operating
Revenues:
|
||||||||||||||||
Gas
transportation
|
$ | 175.7 | $ | 172.8 | $ | 545.9 | $ | 509.5 | ||||||||
Parking
and lending
|
9.5 | 3.0 | 25.3 | 12.7 | ||||||||||||
Gas
storage
|
14.3 | 13.7 | 42.2 | 38.0 | ||||||||||||
Other
|
5.9 | 2.1 | 16.8 | 19.0 | ||||||||||||
Total
operating revenues
|
205.4 | 191.6 | 630.2 | 579.2 | ||||||||||||
Operating
Costs and Expenses:
|
||||||||||||||||
Fuel
and gas transportation
|
11.6 | 32.8 | 38.1 | 79.9 | ||||||||||||
Operation
and maintenance
|
35.7 | 35.6 | 98.7 | 84.2 | ||||||||||||
Administrative
and general
|
29.8 | 25.8 | 89.3 | 78.3 | ||||||||||||
Depreciation
and amortization
|
52.5 | 33.6 | 150.5 | 91.4 | ||||||||||||
Contract
settlement gain
|
- | - | - | (11.2 | ) | |||||||||||
Asset
impairment
|
- | - | - | 1.4 | ||||||||||||
Net
loss (gain) on disposal of operating assets and related
contracts
|
1.4 | (36.1 | ) | 7.8 | (50.1 | ) | ||||||||||
Taxes
other than income taxes
|
20.0 | 11.1 | 59.6 | 34.0 | ||||||||||||
Total
operating costs and expenses
|
151.0 | 102.8 | 444.0 | 307.9 | ||||||||||||
|
||||||||||||||||
Operating
income
|
54.4 | 88.8 | 186.2 | 271.3 | ||||||||||||
Other
Deductions (Income):
|
||||||||||||||||
Interest
expense
|
32.6 | 9.3 | 90.5 | 46.0 | ||||||||||||
Interest
expense – affiliates
|
3.1 | - | 4.8 | - | ||||||||||||
Interest
income
|
- | (0.7 | ) | (0.2 | ) | (2.1 | ) | |||||||||
Miscellaneous
other income, net
|
- | 6.3 | (0.2 | ) | 0.2 | |||||||||||
Total
other deductions
|
35.7 | 14.9 | 94.9 | 44.1 | ||||||||||||
Income
before income taxes
|
18.7 | 73.9 | 91.3 | 227.2 | ||||||||||||
Income
tax (benefit) expense
|
(0.1 | ) | 0.3 | 0.2 | 0.8 | |||||||||||
Net
Income
|
$ | 18.8 | $ | 73.6 | $ | 91.1 | $ | 226.4 | ||||||||
Net
Income per Unit:
|
For
the
Three
Months Ended
September
30,
|
For
the
Nine
Months Ended
September
30,
|
||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Basic
and diluted net income per unit:
|
||||||||||||||||
Common
units (a)
|
$ | 0.10 | $ | 0.47 | $ | 0.51 | $ | 1.65 | ||||||||
Class
B units
|
$ | (0.10 | ) | $ | 0.30 | $ | (0.09 | ) | $ | 0.30 | ||||||
Subordinated
units (a)
|
$ | - | $ | 0.47 | $ | - | $ | 1.61 | ||||||||
Cash
distribution to common and subordinated units (a)
|
$ | 0.49 | $ | 0.47 | $ | 1.455 | $ | 1.395 | ||||||||
Cash
distribution to class B units
|
$ | 0.30 | $ | - | $ | 0.90 | $ | - | ||||||||
Weighted-average
number of units outstanding:
|
||||||||||||||||
Common
units (a)
|
166.2 | 100.7 | 158.9 | 94.6 | ||||||||||||
Class
B units (b)
|
22.9 | 22.9 | 22.9 | 22.9 | ||||||||||||
Subordinated
units (a)
|
- | 33.1 | - | 33.1 | ||||||||||||
(a)
All of the 33.1 million subordinated units converted to common units on a
one-for-one basis in November 2008.
|
||||||||||||||||
(b)
Number of class B units shown is weighted from July 1, 2008, which is the
date they became eligible to participate in earnings.
|
For
the Nine Months Ended
September
30,
|
||||||||
2009
|
2008
|
|||||||
OPERATING
ACTIVITIES:
|
||||||||
Net
income
|
$ | 91.1 | $ | 226.4 | ||||
Adjustments
to reconcile to cash provided by operations:
|
||||||||
Depreciation
and amortization
|
150.5 | 91.4 | ||||||
Amortization
of deferred costs
|
7.0 | 6.9 | ||||||
Amortization
of acquired executory contracts
|
- | (0.2 | ) | |||||
Asset
impairment
|
- | 1.4 | ||||||
Net
loss (gain) on disposal of operating assets and related
contracts
|
7.8 | (50.1 | ) | |||||
Changes
in operating assets and liabilities:
|
||||||||
Trade
and other receivables
|
(8.3 | ) | 2.4 | |||||
Gas
receivables and storage assets
|
(5.9 | ) | 5.8 | |||||
Costs
recoverable from customers
|
- | 0.6 | ||||||
Inventories
|
(30.8 | ) | (1.3 | ) | ||||
Other
assets
|
(25.9 | ) | (39.4 | ) | ||||
Trade
and other payables
|
18.0 | 6.7 | ||||||
Other
payables, affiliates
|
2.8 | 0.7 | ||||||
Gas
payables
|
(0.8 | ) | 12.9 | |||||
Accrued
liabilities
|
21.0 | 14.9 | ||||||
Other
liabilities
|
39.2 | (3.0 | ) | |||||
Net
cash provided by operating activities
|
265.7 | 276.1 | ||||||
INVESTING
ACTIVITIES:
|
||||||||
Capital
expenditures
|
(656.9 | ) | (1,905.6 | ) | ||||
Proceeds
from sale of operating assets
|
- | 63.0 | ||||||
Proceeds
from insurance reimbursements and other recoveries
|
- | 4.7 | ||||||
Advances
to affiliates, net
|
- | 0.9 | ||||||
Sales
of short-term investments
|
175.0 | - | ||||||
Net
cash used in investing activities
|
(481.9 | ) | (1,837.0 | ) | ||||
FINANCING
ACTIVITIES:
|
||||||||
Proceeds
from long-term debt, net of issuance costs
|
346.7 | 247.2 | ||||||
Proceeds
from borrowings on revolving credit agreement
|
161.5 | 778.0 | ||||||
Repayment
of borrowings on revolving credit agreement
|
(475.0 | ) | (522.0 | ) | ||||
Payments
on note payable
|
(1.0 | ) | - | |||||
Proceeds
from long-term debt – affiliate
|
200.0 | - | ||||||
Repayment
of long-term debt – affiliate
|
(100.0 | ) | - | |||||
Distributions
|
(263.9 | ) | (186.3 | ) | ||||
Proceeds
from sale of common units
|
326.3 | 243.6 | ||||||
Proceeds
from sale of class B units
|
- | 686.0 | ||||||
Capital
contribution from general partner
|
6.8 | 19.2 | ||||||
Net
cash provided by financing activities
|
201.4 | 1,265.7 | ||||||
(Decrease)
increase in cash and cash equivalents
|
(14.8 | ) | (295.2 | ) | ||||
Cash
and cash equivalents at beginning of period
|
137.7 | 317.3 | ||||||
Cash
and cash equivalents at end of period
|
$ | 122.9 | $ | 22.1 |
Common
Units
|
Class
B Units
|
Subordinated Units
|
General
Partner
|
Accumulated
Other Comp Income (Loss)
|
Total
Partners’ Capital
|
|||||||||||||||||||
Balance
January 1, 2008
|
$ | 1,473.9 | $ | - | $ | 291.7 | $ | 33.2 | $ | 4.2 | $ | 1,803.0 | ||||||||||||
Add
(deduct):
|
||||||||||||||||||||||||
Net
income
|
155.2 | 6.9 | 54.6 | 9.7 | - | 226.4 | ||||||||||||||||||
Distributions
paid
|
(131.1 | ) | - | (46.2 | ) | (9.0 | ) | - | (186.3 | ) | ||||||||||||||
Sale
of common units, net of
related
transaction costs
|
243.6 | - | - | - | - | 243.6 | ||||||||||||||||||
Sale
of class B units
|
- | 686.0 | - | - | - | 686.0 | ||||||||||||||||||
Capital
contribution from
general
partner
|
- | - | - | 19.2 | - | 19.2 | ||||||||||||||||||
Other
comprehensive loss
|
- | - | - | - | (7.4 | ) | (7.4 | ) | ||||||||||||||||
Balance
September 30, 2008
|
$ | 1,741.6 | $ | 692.9 | $ | 300.1 | $ | 53.1 | $ | (3.2 | ) | $ | 2,784.5 | |||||||||||
Balance
January 1, 2009
|
$ | 2,504.8 | $ | 692.8 | $ | - | $ | 62.9 | $ | (15.5 | ) | $ | 3,245.0 | |||||||||||
Add
(deduct):
|
||||||||||||||||||||||||
Net
income
|
70.0 | 10.1 | - | 11.0 | - | 91.1 | ||||||||||||||||||
Distributions
paid
|
(228.7 | ) | (20.6 | ) | - | (14.6 | ) | - | (263.9 | ) | ||||||||||||||
Sale
of common units, net of
related
transaction costs
|
320.2 | - | - | - | - | 320.2 | ||||||||||||||||||
Capital
contribution from
general
partner
|
- | - | - | 6.8 | - | 6.8 | ||||||||||||||||||
Other
comprehensive loss
|
- | - | - | - | (12.0 | ) | (12.0 | ) | ||||||||||||||||
Balance
September 30, 2009
|
$ | 2,666.3 | $ | 682.3 | $ | - | $ | 66.1 | $ | (27.5 | ) | $ | 3,387.2 |
For
the
Three
Months Ended
September
30,
|
For
the
Nine
Months Ended
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Net
income
|
$ | 18.8 | $ | 73.6 | $ | 91.1 | $ | 226.4 | ||||||||
Other
comprehensive (loss) income:
|
||||||||||||||||
(Loss)
gain on cash flow hedges
|
(0.2 | ) | 21.5 | 7.8 | (25.9 | ) | ||||||||||
Reclassification
adjustment transferred
to
Net income from cash flow hedges
|
(5.8 | ) | 7.4 | (13.8 | ) | 25.1 | ||||||||||
Pension
and other postretirement benefits costs
|
(1.1 | ) | (2.2 | ) | (6.0 | ) | (6.6 | ) | ||||||||
Total
Comprehensive Income
|
$ | 11.7 | $ | 100.3 | $ | 79.1 | $ | 219.0 |
Asset
Derivatives
|
Liability
Derivatives
|
|||||||||||||||||||
September
30, 2009
|
December
31, 2008
|
September
30, 2009
|
December
31, 2008
|
|||||||||||||||||
Balance
Sheet Location
|
Fair
Value
|
Balance
Sheet
Location
|
Fair
Value
|
Balance
Sheet Location
|
Fair
Value
|
Balance
Sheet
Location
|
Fair
Value
|
|||||||||||||
Derivatives
designated as hedging instruments
|
||||||||||||||||||||
Commodity
contracts
|
Other
current
assets
|
$ | 5.4 |
Other
current
assets
|
$ | 10.5 |
Other
current
liabilities
|
$ | 1.3 |
Other
current
liabilities
|
$ | 0.1 | ||||||||
Other
assets
|
0.9 |
Other
assets
|
3.7 |
Other
liabilities
|
- |
Other
liabilities
|
- | |||||||||||||
$ | 6.3 | $ | 14.2 | $ | 1.3 | $ | 0.1 |
Amount
of gain/(loss) recognized in AOCI on derivatives (effective
portion)
|
Location
of gain/(loss) reclassified from AOCI into income (effective
portion)
|
Amount of gain/(loss)
reclassified from AOCI into income (effective
portion)
|
Location
of gain/(loss) recognized in income on derivative (in- effective portion
and amount excluded from effectiveness testing)
|
Amount
of gain/(loss) recognized in income on derivative (in- effective portion
and amount excluded from effectiveness testing)
|
|||||||||||||
Derivatives
in Cash Flow Hedging Relationship
|
|||||||||||||||||
Commodity
contracts
|
$ | ( 0.2 | ) |
Operating
revenues
|
$ | 6.5 |
Net
gain/(loss) on disposal of operating assets and related
contracts
|
$ | (0.3 | ) | |||||||
Interest
rate contracts (1)
|
- |
Interest
expense
|
(0.4 | ) | N/A | - | |||||||||||
$ | (0.2 | ) | $ | 6.1 | $ | (0.3 | ) |
|
(1)
|
Related to amounts deferred in
AOCI from Treasury rate locks used in hedging interest payments associated
with debt offerings which were settled in previous periods and are being
amortized to earnings over the terms of related interest payments,
generally the terms of the related
debt.
|
Amount
of gain/(loss) recognized in AOCI on derivatives (effective
portion)
|
Location
of gain/(loss) reclassified from AOCI into income (effective
portion)
|
Amount of gain/(loss)
reclassified from AOCI into income (effective
portion)
|
Location
of gain/(loss) recognized in income on derivative (in- effective portion
and amount excluded from effectiveness testing)
|
Amount
of gain/(loss) recognized in income on derivative (in- effective portion
and amount excluded from effectiveness testing)
|
|||||||||||||
Derivatives
in Cash Flow Hedging Relationship
|
|||||||||||||||||
Commodity
contracts
|
$ | 7.8 |
Operating
revenues
|
$ | 15.5 |
Net
gain/(loss) on disposal of operating assets and related
contracts
|
$ | (0.4 | ) | ||||||||
Interest
rate contracts (1)
|
- |
Interest
expense
|
(1.3 | ) | N/A | - | |||||||||||
$ | 7.8 | $ | 14.2 | $ | (0.4 | ) |
(1)
|
Related
to amounts deferred in AOCI from Treasury rate locks used in hedging
interest payments associated with debt offerings which were settled in
previous periods and are being amortized to earnings over the terms of
related interest payments, generally the terms of the related
debt.
|
Less
than 1 year
|
$ | 138.0 | ||
1-3
years
|
6.5 | |||
4-5
years
|
- | |||
More
than 5 years
|
- | |||
Total
|
$ | 144.5 |
|
Total
Quarterly Distribution
|
Marginal Percentage
Interest in
Distributions
|
|||||||||||||
|
Target
Amount
|
Limited
Partner
Unitholders
(1)
|
General
Partner
and
IDRs
|
||||||||||||
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%
|
(1)
|
The
class B unitholders participate in distributions on a pari passu basis
with the Partnership’s common units up to $0.30 per unit per quarter. The
class B units do not participate in quarterly distributions above $0.30
per unit. The class B units began sharing in income allocations and
distributions with respect to the third quarter
2008.
|
Total
|
Common
Units
|
Class
B Units
|
General
Partner and IDRs
|
|||||||||||||
Net
income
|
$ | 18.8 | ||||||||||||||
Declared
distribution
|
96.7 | $ | 84.0 | $ | 6.9 | $ | 5.8 | |||||||||
Assumed
allocation of undistributed net loss
|
(77.9 | ) | (67.1 | ) | (9.2 | ) | (1.6 | ) | ||||||||
Assumed
allocation of net income
|
$ | 18.8 | $ | 16.9 | $ | (2.3 | ) | $ | 4.2 | |||||||
Weighted
average units outstanding
|
166.2 | 22.9 | ||||||||||||||
Net
income per unit
|
$ | 0.10 | $ | (0.10 | ) |
Total
|
Common
Units
|
Class
B Units
|
General
Partner and IDRs
|
|||||||||||||
Net
income
|
$ | 91.1 | ||||||||||||||
Declared
distribution
|
274.9 | $ | 238.3 | $ | 20.6 | $ | 16.0 | |||||||||
Assumed
allocation of undistributed net loss
|
(183.8 | ) | (157.4 | ) | (22.7 | ) | (3.7 | ) | ||||||||
Assumed
allocation of net income
|
$ | 91.1 | $ | 80.9 | $ | (2.1 | ) | $ | 12.3 | |||||||
Weighted
average units outstanding
|
158.9 | 22.9 | ||||||||||||||
Net
income per unit
|
$ | 0.51 | $ | (0.09 | ) |
Total
|
Common
Units
|
Class
B Units (a)
|
Subordinated
Units
|
General
Partner
And
IDRs
|
||||||||||||||||
Net
income
|
$ | 73.6 | ||||||||||||||||||
Declared
distribution
|
74.1 | $ | 47.8 | $ | 6.9 | $ | 15.7 | $ | 3.7 | |||||||||||
Assumed
allocation of undistributed net loss
|
(0.5 | ) | (0.3 | ) | (0.1 | ) | (0.1 | ) | - | |||||||||||
Assumed
allocation of net income
|
$ | 73.6 | $ | 47.5 | $ | 6.8 | $ | 15.6 | $ | 3.7 | ||||||||||
Weighted
average units outstanding
|
100.7 | 22.9 | 33.1 | |||||||||||||||||
Net
income per unit
|
$ | 0.47 | $ | 0.30 | $ | 0.47 |
Total
|
Common
Units
|
Class
B Units (a)
|
Subordinated
Units
|
General
Partner
And
IDRs
|
||||||||||||||||
Net
income
|
$ | 226.4 | ||||||||||||||||||
Declared
distribution
|
200.8 | $ | 137.3 | $ | 6.9 | $ | 46.6 | $ | 10.0 | |||||||||||
Assumed
allocation of undistributed net loss
|
25.6 | 18.6 | - | 6.5 | 0.5 | |||||||||||||||
Assumed
allocation of net income
|
$ | 226.4 | $ | 155.9 | $ | 6.9 | $ | 53.1 | $ | 10.5 | ||||||||||
Weighted
average units outstanding
|
94.6 | 22.9 | 33.1 | |||||||||||||||||
Net
income per unit
|
$ | 1.65 | $ | 0.30 | $ | 1.61 |
Date
of Issuance
|
Issuing
Subsidiary
|
Amount
of
Issuance
|
Purchaser
Discounts and Expenses
|
Net
Proceeds
|
Interest
Rate
|
Maturity
Date
|
Interest
Payable
|
||||||||||||
August
2009
|
Boardwalk
Pipelines
|
$ | 350.0 | $ | 3.3 | $ | 346.7 | 5.75 | % |
September
15, 2019
|
March
15 and September 15
|
||||||||
March
2008
|
Texas
Gas
|
250.0 | 2.8 | 247.2 | 5.50 | % |
April
1, 2013
|
April
1 and October 1
|
Month
of Offering
|
Number
of
Common
Units
|
Offering
Price
|
Underwriting
Discounts and Expenses
|
Net
Proceeds
(including
General
Partner Contribution)
|
Common
Units Outstanding
After
Offering
|
Common
Units Held by the
Public
After
Offering
|
||||||||||||||||||
August
2009 (a)
|
8.1 | $ | 23.00 | $ | 7.0 | $ | 183.1 | 169.7 | 55.5 | |||||||||||||||
June
2009 (a), (b)
|
6.7 | 21.99 | - | (c) | 150.0 | 161.6 | (d) | 47.4 | ||||||||||||||||
June
2008
|
10.0 | 25.30 | 9.4 | 248.8 | 100.7 | 47.4 |
(a)
|
BPHC
waived the mandatory prepayment required pursuant to provisions associated
with the Subordinated Loans as a result of this
offering.
|
(b)
|
Sold
to BPHC in a private placement.
|
(c)
|
Pursuant
to the Registration Rights Agreement discussed below, the Partnership
agreed to reimburse certain future underwriting discounts and expenses
that may be incurred by BPHC upon a resale of these
units.
|
(d)
|
Includes
the conversion of all of the 33.1 million subordinated units into common
units in November 2008.
|
Retirement
Plans
|
PBOP
|
|||||||||||||||
For
the Three Months Ended
|
For
the Three Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Service
cost
|
$ | 0.9 | $ | 0.9 | $ | 0.1 | $ | 0.1 | ||||||||
Interest
cost
|
1.7 | 1.6 | 0.8 | 0.8 | ||||||||||||
Expected
return on plan assets
|
(1.4 | ) | (1.7 | ) | (0.9 | ) | (1.3 | ) | ||||||||
Amortization
of prior service credit
|
- | - | (2.0 | ) | (1.9 | ) | ||||||||||
Amortization
of unrecognized net loss
|
0.5 | - | 0.4 | - | ||||||||||||
Settlement
charge
|
- | 0.1 | - | - | ||||||||||||
Regulatory
asset decrease
|
- | - | 1.4 | 1.4 | ||||||||||||
Net
periodic expense (benefit)
|
$ | 1.7 | $ | 0.9 | $ | (0.2 | ) | $ | (0.9 | ) |
Retirement
Plans
|
PBOP
|
|||||||||||||||
For
the Nine Months Ended
|
For
the Nine Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Service
cost
|
$ | 2.7 | $ | 2.7 | $ | 0.3 | $ | 0.4 | ||||||||
Interest
cost
|
5.1 | 4.8 | 2.3 | 2.4 | ||||||||||||
Expected
return on plan assets
|
(4.1 | ) | (5.0 | ) | (2.6 | ) | (3.7 | ) | ||||||||
Amortization
of prior service credit
|
- | - | (5.8 | ) | (5.8 | ) | ||||||||||
Amortization
of unrecognized net loss
|
1.4 | - | 1.1 | - | ||||||||||||
Settlement
charge
|
- | 0.1 | - | - | ||||||||||||
Regulatory
asset decrease
|
- | - | 4.1 | 4.1 | ||||||||||||
Net
periodic expense (benefit)
|
$ | 5.1 | $ | 2.6 | $ | (0.6 | ) | $ | (2.6 | ) |
As
of
|
As
of
|
|||||||
September
30, 2009
|
December
31, 2008
|
|||||||
Loss
on cash flow hedges
|
$ | (6.7 | ) | $ | (0.7 | ) | ||
Deferred
components of net periodic benefit cost
|
(20.8 | ) | (14.8 | ) | ||||
Total
Accumulated other comprehensive loss
|
$ | (27.5 | ) | $ | (15.5 | ) |
September
30, 2009
|
December
31, 2008
|
|||||||||||||||
Financial
Assets
|
Carrying
Amount
|
Fair
Value
|
Carrying
Amount
|
Fair
Value
|
||||||||||||
Cash
and cash equivalents
|
$ | 122.9 | $ | 122.9 | $ | 137.7 | $ | 137.7 | ||||||||
Short-term
investments
|
$ | - | $ | - | $ | 175.0 | $ | 175.0 | ||||||||
Financial
Liabilities
|
||||||||||||||||
Long-term
debt
|
$ | 2,924.5 | $ | 2,971.9 | $ | 2,889.4 | $ | 2,655.3 | ||||||||
Long-term
debt – affiliate
|
$ | 100.0 | $ | 107.5 | $ | - | $ | - |
For
the Nine Months Ended September 30,
|
||||||||
2009
|
2008
|
|||||||
Non-cash
adjustments:
|
||||||||
Accounts
payable and Property, plant and equipment
|
$ | 193.6 | $ | 177.8 | ||||
Accrued
registration rights costs
|
$ | 6.1 | $ | - |
Estimated
Total Capital
Expenditures
(1)
|
Cash
Invested through
September
30, 2009
|
|||||||
Southeast
Expansion
|
$ | 755 | $ | 751.6 | ||||
Gulf
Crossing Project
|
1,765 | 1,619.1 | ||||||
Fayetteville
and Greenville Laterals
|
1,215 | 967.3 | ||||||
Haynesville
Project
|
185 | 5.0 | ||||||
Pipe
Remediation (2)
|
130 | 35.3 | ||||||
Total
|
$ | 4,050 | $ | 3,378.3 |
(1)
|
Our
estimated total capital expenditures are based on internally developed
financial models and timelines. Factors in the estimates include, but are
not limited to, those related to pipeline costs based on mileage, size and
type of pipe, materials and construction and engineering
costs.
|
(2)
|
This
estimate represents the cost of remediating pipe anomalies on our
expansion projects, including our East Texas Pipeline, our Southeast
Expansion, our Gulf Crossing Project and our Fayetteville and Greenville
Laterals.
|
Total
|
Less
than 1 Year
|
1-3
Years
|
4-5
Years
|
More
than 5 Years
|
||||||||||||||||
Principal
payments on long-term debt (1)
|
$ | 3,038.5 | $ | - | $ | - | $ | 1,053.5 | $ | 1,985.0 | ||||||||||
Interest
on long-term debt (2)
|
1,061.2 | 30.1 | 292.6 | 262.7 | 475.8 | |||||||||||||||
Capital
commitments (3)
|
144.5 | 138.0 | 6.5 | - | - | |||||||||||||||
Total
|
$ | 4,244.2 | $ | 168.1 | $ | 299.1 | $ | 1,316.2 | $ | 2,460.8 |
(1)
|
Includes
our senior unsecured notes, having maturity dates from 2012 to 2027,
$478.5 million of loans outstanding under our revolving credit facility,
having an initial maturity date of June 29, 2012, and our Subordinated
Loans, which mature initially on December 29, 2012. The revolving credit
facility and Subordinated Loans are extendable by us on the same terms for
an additional year.
|
(2)
|
Interest
obligations represent interest due on our senior unsecured notes and
Subordinated Loans at fixed rates. Future interest obligations under our
revolving credit facility are uncertain, due to the variable interest rate
and fluctuating balances. Based on a 0.49% weighted-average interest rate
on amounts outstanding under our revolving credit facility as of September
30, 2009, $0.6 million, $4.7 million and $1.2 million would be due under
the credit facility in less than one year, 1-3 years, and 4-5
years.
|
(3)
|
Capital
commitments represent binding commitments under purchase orders for
materials ordered but not received and firm commitments under binding
construction service agreements existing at September 30, 2009. The
amounts shown do not reflect commitments we have made after September 30,
2009.
|
·
|
A
portion of the transportation capacity on each of our expansion project
pipelines that we expect will ultimately be available is contingent upon
our receipt of authority to operate our East Texas Pipeline, Southeast
Expansion, Gulf Crossing Project and Fayetteville Lateral at higher than
normal operating pressures under special permits issued by PHMSA. To the
extent that PHMSA does not grant us authority to operate these expansion
pipelines under special permits or withdraws previously granted authority
to operate under special permits, transportation capacity made available
to the market and transportation revenues received in the future would be
reduced. In addition, we have incurred and will continue to incur costs,
which may be significant, to inspect, test and replace defective pipe
segments on each of our expansion pipelines and potentially for system
upgrades and shipper claims.
|
·
|
The
successful completion, timing, cost, scope and future financial
performance of our expansion projects could differ materially from our
expectations due to anomalies or defects in pipe segments, availability of
contractors or equipment, ground conditions, weather, difficulties or
delays in obtaining regulatory approvals or denied applications, land
owner opposition, the lack of adequate materials, labor difficulties or
shortages and numerous other factors beyond our
control.
|
·
|
We
may not complete projects, including growth or expansion projects, that we
have commenced or will commence, or we may complete projects on materially
different terms, cost or timing than anticipated and we may not be able to
achieve the intended economic or operational benefits of any such
projects, if completed.
|
·
|
Global
financial markets and economic conditions have been, and continue to be,
experiencing extraordinary disruption and volatility following adverse
changes in global capital markets.
|
·
|
Our
FERC gas tariffs only allow us to require limited credit support in the
event that our transportation customers are unable to pay for our
services. If any of our significant customers have credit or financial
problems which result in a delay or failure to pay for services provided
by us, or contracted for with us, or repay the gas they owe us, it could
adversely affect our business, financial condition and results of
operations and cash flows.
|
·
|
The
gas transmission and storage operations of our subsidiaries are subject to
rate-making policies and actions by FERC or customers that could have an
adverse impact on the services we offer and the rates we charge and our
ability to recover the full cost of operating our pipelines, including
earning a reasonable return.
|
·
|
We
are subject to laws and regulations relating to our rates and how we
provide jurisdictional transportation services, 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
generally or through enforcement actions could adversely affect our
business, financial condition and results of operations. In addition, any
new legislation that creates new requirements, for example, greenhouse
gases, or modifies long-standing regulatory policies could have a material
impact on our business.
|
·
|
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 connected to our system, 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 and cash
flows.
|
·
|
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.
|
September
30,
2009
|
December
31, 2008
|
|||||||
Carrying
value of fixed-rate debt
|
$ | 2,546.0 | $ | 2,097.4 | ||||
Fair
value of fixed-rate debt
|
$ | 2,600.9 | $ | 1,863.3 | ||||
100
basis point increase in interest rates and resulting debt
decrease
|
$ | 134.9 | $ | 117.1 | ||||
100
basis point decrease in interest rates and resulting debt
increase
|
$ | 145.0 | $ | 126.1 | ||||
Weighted-average
interest rate
|
5.97 | % | 5.89 | % |
·
|
delays
in obtaining regulatory approvals, including delays in receiving
authorization from PHMSA to operate the East Texas Pipeline, Southeast
Expansion, Gulf Crossing Project and Fayetteville Lateral at higher
operating pressures under special permits following the discovery of
anomalies in portions of our expansion
pipelines;
|
·
|
difficult
construction conditions, including adverse weather conditions, difficult
river crossings and higher density rock formations than
anticipated;
|
·
|
delays
in obtaining key materials; and
|
·
|
shortages
of qualified labor and escalating costs of labor and materials resulting
from the high level of construction activity in the pipeline
industry.
|
Exhibit
Number
|
Description
|
|
*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
|
Certification
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.
|
|
101.INS
|
XBRL
Instance Document
|
|
101.SCH
|
XBRL
Taxonomy Extension Schema Document
|
|
101.CAL
|
XBRL
Taxonomy Calculation Linkbase Document
|
|
101.DEF
|
XBRL
Taxonomy Extension Definitions Document
|
|
101.LAB
|
XBRL
Taxonomy Label Linkbase Document
|
|
101.PRE
|
XBRL
Taxonomy Presentation Linkbase Document
|
|
*
Filed herewith
|
Boardwalk
Pipeline Partners, LP
|
||||
By:
Boardwalk GP, LP
|
||||
its
general partner
|
||||
By:
Boardwalk GP, LLC
|
||||
its
general partner
|
||||
Dated:
October 28, 2009
|
By:
|
/s/ Jamie L.
Buskill
|
||
Jamie
L. Buskill
|
||||
Senior
Vice President, Chief Financial Officer and
Treasurer
|