NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1: Basis of Presentation
Boardwalk Pipeline Partners, LP (the Company) is a Delaware limited partnership formed in 2005 to own and operate the business conducted by its primary subsidiary Boardwalk Pipelines, LP (Boardwalk Pipelines) and its operating subsidiaries, which consists of integrated natural gas and natural gas liquids and other hydrocarbons (herein referred to together as NGLs) pipeline and storage systems. As of September 30, 2019, Boardwalk Pipelines Holding Corp. (BPHC), a wholly-owned subsidiary of Loews Corporation (Loews), owned directly or indirectly, 100% of the Company’s capital.
The accompanying unaudited condensed consolidated financial statements of the Company were prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of only normal recurring accruals) necessary to present fairly the Company's financial position as of September 30, 2019, and December 31, 2018, its results of operations, comprehensive income and changes in partners' capital for the three and nine months ended September 30, 2019 and 2018, and changes in cash flows for the nine months ended September 30, 2019 and 2018. Reference is made to the Notes to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 (2018 Annual Report on Form 10-K), which should be read in conjunction with these unaudited condensed consolidated financial statements. The accounting policies described in Note 2 of Part II, Item 8 of the Company's 2018 Annual Report on Form 10-K are the same used in preparing the accompanying unaudited condensed consolidated financial statements, except for the changes described in Note 2 below.
Note 2: Accounting Policies
Accounting Pronouncements Adopted in 2019 - Leases
In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2016-02, Leases (Topic 842) (ASU 2016-02). ASU 2016-02 supersedes Accounting Standards Codification Topic 840, Leases (ASC 840), and requires, among other things, the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under GAAP.
Effective January 1, 2019, the Company implemented ASU 2016-02 using the modified retrospective method as of the adoption date, with no adjustment to the comparative period information, which remains reported under ASC 840, and no cumulative effect adjustment to partners’ capital. In addition, the Company elected to apply the following practical expedients that are available to entities: (1) practical expedient package to all of its leases, which allows an entity to (i) not reassess whether expired or existing contracts are or contain leases; (ii) not reassess the lease classification for any expired or existing leases; and (iii) not reassess initial direct costs for any existing leases; (2) the practical expedient related to existing and expired land easements that were not previously accounted for as leases, which allows an entity not to assess whether existing or expired land easements contain a lease under ASU 2016-02 if the land easement had not previously been accounted for as a lease; and (3) combining lease and nonlease components in a contract, which allows an entity to account for the combined components under the guidance for the predominant component. The Company also elected to not apply the recognition requirements in ASU 2016-02 to short-term leases and to not apply the hindsight practical expedient when considering lessee options to extend or terminate a lease.
The implementation of ASU 2016-02 resulted in the recording of a right-of-use asset of $18.0 million and a lease liability of $20.8 million and the derecognition of prepaid assets and deferred rent related to the Company's operating lease agreements on the Company’s Condensed Consolidated Balance Sheets as of January 1, 2019. Note 4 contains more information about the Company’s leases.
Note 3: Revenues
The Company operates in one reportable segment and contracts directly with producers of natural gas, with end-use customers, including local distribution companies, marketers, electric power generators and industrial users, and with interstate and intrastate pipelines, who, in turn, provide transportation and storage services for end-users. The following table presents the Company's revenues disaggregated by type of service for the three and nine months ended September 30, 2019 and 2018 (in millions):
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|
|
|
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|
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For the
Three Months Ended
September 30,
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|
For the
Nine Months Ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues from Contracts with Customers
|
|
|
|
|
|
|
|
Firm Service (1)
|
$
|
275.7
|
|
|
$
|
264.5
|
|
|
$
|
919.6
|
|
|
$
|
850.9
|
|
Interruptible Service
|
8.3
|
|
|
7.7
|
|
|
19.5
|
|
|
25.0
|
|
Other revenues
|
2.8
|
|
|
1.2
|
|
|
7.9
|
|
|
9.7
|
|
Total revenues from contracts with customers
|
286.8
|
|
|
273.4
|
|
|
947.0
|
|
|
885.6
|
|
Other operating revenues(2)
|
8.0
|
|
|
4.5
|
|
|
21.0
|
|
|
13.0
|
|
Total Operating Revenues
|
$
|
294.8
|
|
|
$
|
277.9
|
|
|
$
|
968.0
|
|
|
$
|
898.6
|
|
(1) Revenues earned from contracts with minimum volume commitments (MVCs) are included in firm service given the stand-ready nature of the performance obligation and the guaranteed nature of the fees over the contract term. The nine months ended September 30, 2019, contains $26.2 million of proceeds received related to the bankruptcy of a customer as discussed in Note 7.
(2) Other operating revenues include certain revenues earned from operating leases, pipeline management fees and other activities that are not considered central and ongoing major business operations of the Company and do not represent revenues earned from contracts with customers.
Contract Balances
As of September 30, 2019, and December 31, 2018, the Company had receivables recorded in Trade Receivables from contracts with customers of $101.5 million and $139.2 million and contract liabilities recorded in Other Liabilities from contracts with customers of $11.4 million and $9.2 million. As of September 30, 2019, the Company had contract assets recorded in Other Assets from contracts with customers of $1.2 million and did not have any contract assets recorded as of December 31, 2018.
Contract liabilities are expected to be recognized through 2024. Significant changes in the contract liabilities balances during the nine months ended September 30, 2019, are as follows (in millions):
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|
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Contract Liabilities
|
Balance as of December 31, 2018
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|
$
|
9.2
|
|
Revenues recognized that were included in the contract liability
balance at the beginning of the period
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|
(1.4
|
)
|
Increases due to cash received, excluding amounts recognized as
revenues during the period
|
|
3.6
|
|
Balance as of September 30, 2019
|
|
$
|
11.4
|
|
Significant changes in the contract liabilities balances during the nine months ended September 30, 2018, are as follows (in millions):
|
|
|
|
|
|
|
|
Contract Liabilities
|
Balance as of December 31, 2017
|
|
$
|
1.9
|
|
Cumulative effect adjustment from the implementation of ASC 606
|
|
6.4
|
|
Revenues recognized that were included in the contract liability
balance at the beginning of the period
|
|
(2.3
|
)
|
Increases due to cash received, excluding amounts recognized as
revenues during the period
|
|
3.1
|
|
Balance as of September 30, 2018
|
|
$
|
9.1
|
|
Performance Obligations
The following table includes estimated operating revenues expected to be recognized in the future related to agreements that contain performance obligations that were unsatisfied as of September 30, 2019. The amounts presented primarily consist of fixed fees or MVCs which are typically recognized over time as the performance obligation is satisfied, as in accordance with firm service contracts. Additionally, for the Company’s customers that are charged maximum tariff rates related to its Federal Energy Regulatory Commission regulated operating subsidiaries, the amounts below reflect the current tariff rate for such services for the term of the agreements; however, the tariff rates may be subject to future adjustment. The Company has elected to exclude the following from the table: (a) unsatisfied performance obligations from usage fees associated with its firm services because of the stand-ready nature of such services; (b) consideration in contracts that are recognized in revenue as invoiced, such as for interruptible services; and (c) consideration that was received prior to September 30, 2019, that will be recognized in future periods, such as recorded in contract liabilities. The estimated revenues reflected in the table may include estimated revenues that are anticipated under executed precedent transportation agreements for projects that are subject to regulatory approvals.
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|
In millions
|
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
|
|
|
|
|
|
|
|
|
Estimated revenues from contracts with customers
from unsatisfied performance obligations as of
September 30, 2019 (1)
|
|
$
|
1,130.5
|
|
|
$
|
1,009.0
|
|
|
$
|
7,964.0
|
|
|
$
|
10,103.5
|
|
Operating revenues which are fixed and
determinable (operating leases) (1)
|
|
20.0
|
|
|
20.5
|
|
|
188.5
|
|
|
229.0
|
|
Total projected operating revenues under committed
firm agreements as of September 30, 2019 (1)
|
|
$
|
1,150.5
|
|
|
$
|
1,029.5
|
|
|
$
|
8,152.5
|
|
|
$
|
10,332.5
|
|
(1) For the 2019 period, $868.3 million represents actual fixed fee revenues recognized for the fulfillment of performance obligations during the nine months ended September 30, 2019.
Note 4: Leases
The Company has various operating lease commitments extending through 2028, generally covering office space and equipment rentals, some of which contain options to renew or extend the lease term. The Company also has a finance lease related to the lease of an office building in Owensboro, Kentucky, that has a fifteen-year term with two twenty-year renewal options.
The components of lease cost were as follows (in millions):
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|
|
|
|
|
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|
|
For the
Three Months Ended
September 30, 2019
|
|
For the
Nine Months Ended
September 30, 2019
|
Operating lease cost
|
$
|
1.1
|
|
|
$
|
3.1
|
|
Short-term lease cost
|
0.4
|
|
|
1.8
|
|
Finance lease cost:
|
|
|
|
Amortization of right-of-use asset
|
0.2
|
|
|
0.5
|
|
Interest on lease liabilities
|
0.1
|
|
|
0.3
|
|
Total lease cost
|
$
|
1.8
|
|
|
$
|
5.7
|
|
The following provides supplemental balance sheet information related to the Company’s leases:
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|
|
|
|
|
As of September 30, 2019
|
Right-of-use assets (in millions)
|
|
Operating leases (recorded in Other Assets)
|
$
|
15.8
|
|
Finance lease (recorded in Plant, Property and Equipment)
|
6.2
|
|
Lease liabilities (in millions)
|
|
Operating leases (recorded in Other Liabilities, current and
non-current)
|
18.3
|
|
Finance lease
|
7.6
|
|
Weighted-average remaining lease term (years)
|
|
Operating leases
|
4.7
|
|
Finance lease
|
8.8
|
|
Weighted-average discount rate
|
|
Operating leases
|
4.68
|
%
|
Finance lease
|
5.89
|
%
|
The table below presents the maturities of lease liabilities (in millions):
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|
|
|
|
|
|
|
|
As of September 30, 2019
|
|
Operating Leases
|
|
Finance
Leases
|
2019 (1)
|
$
|
1.2
|
|
|
$
|
0.2
|
|
2020
|
4.6
|
|
|
1.1
|
|
2021
|
4.4
|
|
|
1.1
|
|
2022
|
4.3
|
|
|
1.1
|
|
2023
|
3.8
|
|
|
1.1
|
|
Thereafter
|
2.1
|
|
|
5.2
|
|
Total
|
20.4
|
|
|
9.8
|
|
Less: discount
|
(2.1
|
)
|
|
(2.2
|
)
|
Total lease liabilities
|
$
|
18.3
|
|
|
$
|
7.6
|
|
(1) For the three-month period beginning October 1, 2019.
The following table summarizes minimum future commitments to be made under non-cancelable operating leases as of December 31, 2018 (in millions):
|
|
|
|
|
2019
|
$
|
4.8
|
|
2020
|
4.7
|
|
2021
|
4.6
|
|
2022
|
4.5
|
|
2023
|
4.1
|
|
Thereafter
|
1.9
|
|
Total
|
$
|
24.6
|
|
Note 5: Gas and Liquids Stored Underground and Gas and NGLs Receivables and Payables
The operating subsidiaries of the Company provide storage services whereby they store natural gas or NGLs on behalf of customers and also periodically hold customer gas under parking and lending (PAL) services. Since the customers retain title to the gas held by the Company in providing these services, the Company does not record the related gas on its balance sheet.
The operating subsidiaries of the Company also periodically lend gas to customers under PAL and certain firm services, and gas or NGLs may be owed to the operating subsidiaries as a result of transportation imbalances. As of September 30, 2019, the amount of gas owed to the operating subsidiaries of the Company due to gas imbalances and gas loaned under PAL and certain firm service agreements was approximately 10.5 trillion British thermal units (TBtu). Assuming an average market price during September 2019 of $2.23 per million British thermal unit (MMBtu), the market value of that gas was approximately $23.4 million. As of December 31, 2018, the amount of gas owed to the operating subsidiaries due to gas imbalances and gas loaned under PAL and certain firm service agreements was approximately 13.5 TBtu. Assuming an average market price during December 2018 of $3.68 per MMBtu, the market value of that gas was approximately $49.7 million. As of September 30, 2019, and December 31, 2018, there were no outstanding NGL imbalances owed to the operating subsidiaries. If any significant customer should have credit or financial problems resulting in a delay or failure to repay the gas owed to the operating subsidiaries, it could have a material adverse effect on the Company’s financial condition, results of operations or cash flows.
Note 6: Fair Value Measurements
Financial Assets and Liabilities
The following methods and assumptions were used in estimating the fair value amounts included in the disclosures for financial assets and liabilities, which are consistent with those disclosed in the 2018 Annual Report on Form 10-K:
Cash and Cash Equivalents: For cash and short-term financial assets, the carrying amount is a reasonable estimate of fair value due to the short maturity of those instruments.
Long-Term Debt: The estimated fair value of the Company's publicly traded debt is based on quoted market prices at September 30, 2019, and December 31, 2018. The fair market value of the debt that is not publicly traded is based on market prices of similar debt at September 30, 2019, and December 31, 2018. The carrying amount of the Company's variable-rate debt at September 30, 2019, and December 31, 2018, approximated fair value.
The carrying amounts and estimated fair values of the Company's financial assets and liabilities which were not recorded at fair value on the Condensed Consolidated Balance Sheets as of September 30, 2019, and December 31, 2018, were as follows (in millions):
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|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2019
|
|
|
|
|
Estimated Fair Value
|
Financial Assets
|
|
Carrying Amount
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
Cash and cash equivalents
|
|
$
|
13.7
|
|
|
|
$
|
13.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13.7
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
$
|
3,529.8
|
|
(1)
|
|
$
|
—
|
|
|
$
|
3,742.0
|
|
|
$
|
—
|
|
|
$
|
3,742.0
|
|
(1) The carrying amount of long-term debt excludes a $7.0 million long-term finance lease obligation and
$6.9 million of unamortized debt issuance costs.
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2018
|
|
|
|
|
Estimated Fair Value
|
Financial Assets
|
|
Carrying Amount
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
Cash and cash equivalents
|
|
$
|
3.6
|
|
|
|
$
|
3.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.6
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
$
|
3,700.9
|
|
(1)
|
|
$
|
—
|
|
|
$
|
3,714.6
|
|
|
$
|
—
|
|
|
$
|
3,714.6
|
|
(1) The carrying amount of long-term debt excludes a $7.5 million long-term finance lease obligation and
$7.1 million of unamortized debt issuance costs.
Note 7: Commitments and Contingencies
Legal Proceedings and Settlements
The Company and its subsidiaries are parties to various legal actions arising in the normal course of business. Management believes the disposition of these outstanding legal actions will not have a material impact on the Company's financial condition, results of operations or cash flows.
Mishal and Berger Litigation
On May 25, 2018, plaintiffs Tsemach Mishal and Paul Berger (on behalf of themselves and the purported class, Plaintiffs) initiated a purported class action in the Court of Chancery of the State of Delaware (the Court) against the following defendants: the Company, Boardwalk GP, LP (Boardwalk GP), Boardwalk GP, LLC and BPHC (together, Defendants), regarding the potential exercise by Boardwalk GP of its right to purchase the issued and outstanding common units of the Company not already owned by Boardwalk GP or its affiliates (Purchase Right).
On June 25, 2018, Plaintiffs and Defendants entered into a Stipulation and Agreement of Compromise and Settlement, subject to the approval of the Court (the Proposed Settlement). Under the terms of the Proposed Settlement, the lawsuit would be dismissed, and related claims against the Defendants would be released by the Plaintiffs, if BPHC, the sole member of the general partner of Boardwalk GP, elected to cause Boardwalk GP to exercise its Purchase Right for a cash purchase price, as determined by the Company's Third Amended and Restated Agreement of Limited Partnership, as amended (the Limited Partnership Agreement), and gave notice of such election as provided in the Limited Partnership Agreement within a period specified by the Proposed Settlement. On June 29, 2018, Boardwalk GP elected to exercise the Purchase Right and gave notice within the period specified by the Proposed Settlement. On July 18, 2018, Boardwalk GP completed the purchase of the Company's common units pursuant to the Purchase Right.
On September 28, 2018, the Court denied approval of the Proposed Settlement. On February 11, 2019, a substitute verified class action complaint was filed in this proceeding. The Defendants filed a motion to dismiss, which was heard by the Court in July 2019. In October 2019, the Court ruled on the motion and granted a partial dismissal, with certain aspects of the case proceeding to trial. The case will be set for trial in early 2021.
City of New Orleans Litigation
Gulf South Pipeline Company, LP, along with several other energy companies operating in Southern Louisiana, has been named as a defendant in a petition for damages and injunctive relief in state district court for Orleans Parish, Louisiana, (Case No. 19-3466) by the City of New Orleans. The case was filed on March 29, 2019. The lawsuit claims include, among other things, negligence, strict liability, nuisance and breach of contract, alleging that the defendants’ drilling, dredging, pipeline and industrial operations since the 1930s have caused increased storm surge risk, increased flood protection costs and unspecified damages to the City of New Orleans. Based on the facts and circumstances presently known, in the opinion of management, this case is not expected to be material to the Company's financial condition, results of operations or cash flows.
Letter of Credit Proceeds
In the second quarter 2019, a customer of Texas Gas Transmission, LLC, a subsidiary of the Company, (Texas Gas) declared bankruptcy and rejected the transportation agreements it had with Texas Gas as part of the bankruptcy proceedings. Subsequent to the bankruptcy declaration, Texas Gas pursued and received proceeds of $27.7 million from existing letters of credit provided to Texas Gas as credit support. In June 2019, the bankruptcy court approved the rejection of the transportation agreements, which relieved Texas Gas from providing further transportation services to its customer. As a result, Texas Gas first applied the proceeds from the letters of credit to outstanding receivables and then recognized as transportation revenues the remaining $26.2 million of proceeds, which represent a portion of the future performance obligations that were eliminated under the transportation agreements.
Commitments for Construction
The Company’s future capital commitments are comprised of binding commitments under purchase orders for materials ordered but not received and firm commitments under binding construction service agreements. The commitments as of September 30, 2019, were approximately $170.7 million, all of which are expected to be settled within the next twelve months.
There were no substantial changes to the Company’s commitments under pipeline capacity agreements disclosed in Note 4 of Part II, Item 8 of the Company’s 2018 Annual Report on Form 10-K. Refer to Note 4 for further information about the Company’s operating and finance lease commitments.
Note 8: Financing
As of September 30, 2019, and December 31, 2018, the Company had total outstanding debt of $3.5 billion and $3.7 billion, including amounts outstanding under the Company’s notes and debentures and its revolving credit facility.
Notes and Debentures
As of September 30, 2019, and December 31, 2018, the Company had notes and debentures outstanding of $3.3 billion and $3.1 billion with weighted-average interest rates of 5.06% and 5.17%. The indentures governing the notes and debentures have restrictive covenants which provide that, with certain exceptions, neither the Company nor any of its subsidiaries may create, assume or suffer to exist any lien upon any property to secure any indebtedness unless the debentures and notes shall be equally and ratably secured. All of the Company's debt obligations are unsecured. As of September 30, 2019, Boardwalk Pipelines and its operating subsidiaries were in compliance with their debt covenants.
Issuance of Notes
For the nine months ended September 30, 2019, the Company completed the following debt issuance (in millions, except interest rate):
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|
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|
|
|
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|
|
|
|
|
|
|
|
|
Date of
Issuance
|
|
Issuing Subsidiary
|
|
Amount of
Issuance
|
|
Purchaser
Discounts
and
Expenses
|
|
Net
Proceeds
|
|
Interest
Rate
|
|
Maturity Date
|
|
Interest Payable
|
May 2019
|
|
Boardwalk Pipelines
|
|
$
|
500.0
|
|
|
$
|
4.8
|
|
|
|
|
$
|
495.2
|
|
|
|
(1)
|
4.80%
|
|
May 3, 2029
|
|
May 3 and November 3
|
|
|
(1)
|
The net proceeds of this offering were used to retire the outstanding $350.0 million aggregate principal amount of Boardwalk Pipelines 5.75% notes due 2019 (Boardwalk Pipelines 2019 Notes) at maturity. Initially, the Company used the net proceeds to reduce outstanding borrowings under its revolving credit facility. Subsequently, in September 2019, the Company retired all of the outstanding aggregate principal amount of Boardwalk Pipelines 2019 Notes at maturity with borrowings under its revolving credit facility.
|
Revolving Credit Facility
Outstanding borrowings under the Company’s revolving credit facility as of September 30, 2019, and December 31, 2018, were $260.0 million and $580.0 million, with weighted-average borrowing rates of 3.28% and 3.69%. The Company and its subsidiaries were in compliance with all covenant requirements under the revolving credit facility as of September 30, 2019. The revolving credit facility has a borrowing capacity of $1.5 billion through May 26, 2020, and a borrowing capacity of $1.475 billion from May 27, 2020, to May 26, 2022.
Note 9: Employee Benefits
Defined Benefit Retirement Plans and Postretirement Benefits Other Than Pension (PBOP)
Components of net periodic benefit cost for both the Retirement Plans and PBOP for the three months ended September 30, 2019 and 2018, were as follows (in millions):
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement Plans
|
|
PBOP
|
|
For the
Three Months Ended
September 30,
|
|
For the
Three Months Ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Service cost
|
$
|
0.7
|
|
|
$
|
0.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
0.9
|
|
|
1.2
|
|
|
0.4
|
|
|
0.4
|
|
Expected return on plan assets
|
(1.6
|
)
|
|
(1.7
|
)
|
|
(0.6
|
)
|
|
(1.2
|
)
|
Amortization of unrecognized net loss
|
0.4
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
Settlement charge
|
0.6
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
Net periodic benefit cost
|
$
|
1.0
|
|
|
$
|
0.9
|
|
|
$
|
(0.2
|
)
|
|
$
|
(0.8
|
)
|
Components of net periodic benefit cost for both the Retirement Plans and PBOP for the nine months ended September 30, 2019 and 2018, were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retirement Plans
|
|
PBOP
|
|
For the
Nine Months Ended
September 30,
|
|
For the
Nine Months Ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Service cost
|
$
|
2.3
|
|
|
$
|
2.5
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
Interest cost
|
3.1
|
|
|
3.4
|
|
|
1.1
|
|
|
1.1
|
|
Expected return on plan assets
|
(4.8
|
)
|
|
(5.7
|
)
|
|
(2.2
|
)
|
|
(3.5
|
)
|
Amortization of unrecognized net loss
|
1.6
|
|
|
1.1
|
|
|
—
|
|
|
—
|
|
Settlement charge
|
2.7
|
|
|
2.6
|
|
|
—
|
|
|
—
|
|
Net periodic benefit cost
|
$
|
4.9
|
|
|
$
|
3.9
|
|
|
$
|
(1.1
|
)
|
|
$
|
(2.3
|
)
|
During the nine months ended September 30, 2019, the Company made $3.8 million in contributions to the defined benefit pension plan, and expects to fund an additional $0.9 million in the remainder of 2019.
Defined Contribution Plans
Texas Gas employees hired on or after November 1, 2006, and all other employees of the Company are provided retirement benefits under a defined contribution money purchase plan. The Company also provides 401(k) plan benefits to its employees. Costs related to the Company’s defined contribution plans were $2.8 million and $2.7 million for the three months ended September 30, 2019 and 2018, and $8.4 million and $8.0 million for the nine months ended September 30, 2019 and 2018.
Note 10: Related Party Transactions
Loews provides a variety of corporate services to the Company under service agreements, including but not limited to, information technology, tax, risk management, internal audit and corporate development services and also charges the Company for allocated overheads. The Company incurred charges related to these services of $1.4 million and $1.6 million for the three months ended September 30, 2019 and 2018, and $4.3 million and $4.6 million for the nine months ended September 30, 2019 and 2018.
Total distributions paid to BPHC and Boardwalk GP were $25.6 million for each of the three months ended September 30, 2019 and 2018, and $76.7 million and $51.7 million for the nine months ended September 30, 2019 and 2018. The distribution paid to BPHC and Boardwalk GP in 2019 was impacted by the increase in ownership by Boardwalk GP in the third quarter 2018.
Note 11: Supplemental Disclosure of Cash Flow Information (in millions):
|
|
|
|
|
|
|
|
|
|
For the
Nine Months Ended
September 30,
|
|
2019
|
|
2018
|
Cash paid during the period for:
|
|
|
|
Interest (net of amount capitalized)
|
$
|
122.5
|
|
|
$
|
124.9
|
|
Non-cash adjustments:
|
|
|
|
Accounts payable and property, plant and equipment
|
62.5
|
|
|
51.9
|
|
Right-of-use assets obtained in exchange for lease obligations
|
18.2
|
|
|
—
|
|
Note 12: Guarantee of Securities of Subsidiaries
Boardwalk Pipelines (Subsidiary Issuer) has issued securities which have been fully and unconditionally guaranteed by the Company (Parent Guarantor). The Subsidiary Issuer is 100% owned by the Parent Guarantor. The Company's subsidiaries had no significant restrictions on their ability to pay distributions or make loans to the Company except as noted in their debt covenants and had no restricted assets as of September 30, 2019, and December 31, 2018. Note 8 contains additional information regarding the Company's debt and related covenants.
The Company has provided the following condensed consolidating financial information in accordance with Regulation S-X Rule 3-10, Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.
Condensed Consolidating Balance Sheets as of September 30, 2019
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Cash and cash equivalents
|
|
$
|
0.3
|
|
|
$
|
4.2
|
|
|
$
|
9.2
|
|
|
$
|
—
|
|
|
$
|
13.7
|
|
Receivables
|
|
—
|
|
|
—
|
|
|
113.5
|
|
|
—
|
|
|
113.5
|
|
Receivables - affiliate
|
|
—
|
|
|
—
|
|
|
6.7
|
|
|
(6.7
|
)
|
|
—
|
|
Costs recoverable from customers
|
|
—
|
|
|
—
|
|
|
6.4
|
|
|
—
|
|
|
6.4
|
|
Prepayments
|
|
0.3
|
|
|
0.1
|
|
|
21.7
|
|
|
—
|
|
|
22.1
|
|
Advances to affiliates
|
|
3.1
|
|
|
—
|
|
|
3.1
|
|
|
(3.1
|
)
|
|
3.1
|
|
Other current assets
|
|
—
|
|
|
—
|
|
|
18.4
|
|
|
(3.2
|
)
|
|
15.2
|
|
Total current assets
|
|
3.7
|
|
|
4.3
|
|
|
179.0
|
|
|
(13.0
|
)
|
|
174.0
|
|
Investment in consolidated subsidiaries
|
|
3,004.3
|
|
|
7,201.9
|
|
|
—
|
|
|
(10,206.2
|
)
|
|
—
|
|
Property, plant and equipment, gross
|
|
0.6
|
|
|
—
|
|
|
11,604.9
|
|
|
—
|
|
|
11,605.5
|
|
Less–accumulated depreciation
and amortization
|
|
0.6
|
|
|
—
|
|
|
3,178.0
|
|
|
—
|
|
|
3,178.6
|
|
Property, plant and equipment, net
|
|
—
|
|
|
—
|
|
|
8,426.9
|
|
|
—
|
|
|
8,426.9
|
|
Advances to affiliates – noncurrent
|
|
2,011.1
|
|
|
429.3
|
|
|
155.0
|
|
|
(2,595.4
|
)
|
|
—
|
|
Other noncurrent assets
|
|
0.2
|
|
|
4.2
|
|
|
483.0
|
|
|
0.2
|
|
|
487.6
|
|
Total other assets
|
|
2,011.3
|
|
|
433.5
|
|
|
638.0
|
|
|
(2,595.2
|
)
|
|
487.6
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
5,019.3
|
|
|
$
|
7,639.7
|
|
|
$
|
9,243.9
|
|
|
$
|
(12,814.4
|
)
|
|
$
|
9,088.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Partners' Capital
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Payables
|
|
$
|
0.5
|
|
|
$
|
0.1
|
|
|
$
|
90.5
|
|
|
$
|
—
|
|
|
$
|
91.1
|
|
Payable to affiliates
|
|
0.5
|
|
|
—
|
|
|
6.7
|
|
|
(6.7
|
)
|
|
0.5
|
|
Advances from affiliates
|
|
3.1
|
|
|
3.1
|
|
|
—
|
|
|
(3.1
|
)
|
|
3.1
|
|
Other current liabilities
|
|
—
|
|
|
36.4
|
|
|
166.7
|
|
|
(2.9
|
)
|
|
200.2
|
|
Total current liabilities
|
|
4.1
|
|
|
39.6
|
|
|
263.9
|
|
|
(12.7
|
)
|
|
294.9
|
|
Long-term debt and finance lease
obligation
|
|
—
|
|
|
2,427.9
|
|
|
1,102.0
|
|
|
—
|
|
|
3,529.9
|
|
Advances from affiliates - noncurrent
|
|
—
|
|
|
2,166.1
|
|
|
429.3
|
|
|
(2,595.4
|
)
|
|
—
|
|
Other noncurrent liabilities
|
|
0.1
|
|
|
1.8
|
|
|
246.8
|
|
|
(0.1
|
)
|
|
248.6
|
|
Total other liabilities and deferred
credits
|
|
0.1
|
|
|
2,167.9
|
|
|
676.1
|
|
|
(2,595.5
|
)
|
|
248.6
|
|
Total partners' capital
|
|
5,015.1
|
|
|
3,004.3
|
|
|
7,201.9
|
|
|
(10,206.2
|
)
|
|
5,015.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Partners' Capital
|
|
$
|
5,019.3
|
|
|
$
|
7,639.7
|
|
|
$
|
9,243.9
|
|
|
$
|
(12,814.4
|
)
|
|
$
|
9,088.5
|
|
Condensed Consolidating Balance Sheets as of December 31, 2018
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Cash and cash equivalents
|
|
$
|
0.3
|
|
|
$
|
1.6
|
|
|
$
|
1.7
|
|
|
$
|
—
|
|
|
$
|
3.6
|
|
Receivables
|
|
—
|
|
|
—
|
|
|
153.7
|
|
|
—
|
|
|
153.7
|
|
Receivables - affiliate
|
|
—
|
|
|
—
|
|
|
9.5
|
|
|
(9.5
|
)
|
|
—
|
|
Costs recoverable from customers
|
|
—
|
|
|
—
|
|
|
23.6
|
|
|
—
|
|
|
23.6
|
|
Prepayments
|
|
0.3
|
|
|
—
|
|
|
21.0
|
|
|
—
|
|
|
21.3
|
|
Advances to affiliates
|
|
—
|
|
|
—
|
|
|
2.0
|
|
|
(2.0
|
)
|
|
—
|
|
Other current assets
|
|
—
|
|
|
—
|
|
|
14.3
|
|
|
(4.2
|
)
|
|
10.1
|
|
Total current assets
|
|
0.6
|
|
|
1.6
|
|
|
225.8
|
|
|
(15.7
|
)
|
|
212.3
|
|
Investment in consolidated subsidiaries
|
|
2,828.1
|
|
|
7,136.6
|
|
|
—
|
|
|
(9,964.7
|
)
|
|
—
|
|
Property, plant and equipment, gross
|
|
0.6
|
|
|
—
|
|
|
11,325.0
|
|
|
—
|
|
|
11,325.6
|
|
Less–accumulated depreciation
and amortization
|
|
0.6
|
|
|
—
|
|
|
2,939.2
|
|
|
—
|
|
|
2,939.8
|
|
Property, plant and equipment, net
|
|
—
|
|
|
—
|
|
|
8,385.8
|
|
|
—
|
|
|
8,385.8
|
|
Advances to affiliates – noncurrent
|
|
2,034.2
|
|
|
460.1
|
|
|
431.8
|
|
|
(2,926.1
|
)
|
|
—
|
|
Other noncurrent assets
|
|
0.2
|
|
|
2.5
|
|
|
446.5
|
|
|
1.4
|
|
|
450.6
|
|
Total other assets
|
|
2,034.4
|
|
|
462.6
|
|
|
878.3
|
|
|
(2,924.7
|
)
|
|
450.6
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
4,863.1
|
|
|
$
|
7,600.8
|
|
|
$
|
9,489.9
|
|
|
$
|
(12,905.1
|
)
|
|
$
|
9,048.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Partners' Capital
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Payables
|
|
$
|
0.6
|
|
|
$
|
0.1
|
|
|
$
|
70.4
|
|
|
$
|
—
|
|
|
$
|
71.1
|
|
Payable to affiliates
|
|
0.5
|
|
|
—
|
|
|
9.5
|
|
|
(9.5
|
)
|
|
0.5
|
|
Advances from affiliates
|
|
—
|
|
|
2.0
|
|
|
—
|
|
|
(2.0
|
)
|
|
—
|
|
Other current liabilities
|
|
0.1
|
|
|
24.3
|
|
|
164.2
|
|
|
(2.8
|
)
|
|
185.8
|
|
Total current liabilities
|
|
1.2
|
|
|
26.4
|
|
|
244.1
|
|
|
(14.3
|
)
|
|
257.4
|
|
Long-term debt and finance lease
obligation
|
|
—
|
|
|
2,280.1
|
|
|
1,421.2
|
|
|
—
|
|
|
3,701.3
|
|
Advances from affiliates - noncurrent
|
|
—
|
|
|
2,466.0
|
|
|
460.1
|
|
|
(2,926.1
|
)
|
|
—
|
|
Other noncurrent liabilities
|
|
—
|
|
|
0.2
|
|
|
227.9
|
|
|
—
|
|
|
228.1
|
|
Total other liabilities and deferred
credits
|
|
—
|
|
|
2,466.2
|
|
|
688.0
|
|
|
(2,926.1
|
)
|
|
228.1
|
|
Total partners' capital
|
|
4,861.9
|
|
|
2,828.1
|
|
|
7,136.6
|
|
|
(9,964.7
|
)
|
|
4,861.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Partners' Capital
|
|
$
|
4,863.1
|
|
|
$
|
7,600.8
|
|
|
$
|
9,489.9
|
|
|
$
|
(12,905.1
|
)
|
|
$
|
9,048.7
|
|
Condensed Consolidating Statements of Income for the Three Months Ended September 30, 2019
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Operating Revenues:
|
|
|
|
|
|
|
|
|
|
Transportation
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
278.2
|
|
|
$
|
(20.5
|
)
|
|
$
|
257.7
|
|
Storage, parking and lending
|
—
|
|
|
—
|
|
|
22.6
|
|
|
(0.1
|
)
|
|
22.5
|
|
Other
|
—
|
|
|
—
|
|
|
14.6
|
|
|
—
|
|
|
14.6
|
|
Total operating revenues
|
—
|
|
|
—
|
|
|
315.4
|
|
|
(20.6
|
)
|
|
294.8
|
|
|
|
|
|
|
|
|
|
|
|
Operating Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Fuel and transportation
|
—
|
|
|
—
|
|
|
24.2
|
|
|
(20.6
|
)
|
|
3.6
|
|
Operation and maintenance
|
—
|
|
|
—
|
|
|
58.9
|
|
|
—
|
|
|
58.9
|
|
Administrative and general
|
0.1
|
|
|
—
|
|
|
33.9
|
|
|
—
|
|
|
34.0
|
|
Other operating costs and expenses
|
0.1
|
|
|
—
|
|
|
110.8
|
|
|
—
|
|
|
110.9
|
|
Total operating costs and expenses
|
0.2
|
|
|
—
|
|
|
227.8
|
|
|
(20.6
|
)
|
|
207.4
|
|
Operating (loss) income
|
(0.2
|
)
|
|
—
|
|
|
87.6
|
|
|
—
|
|
|
87.4
|
|
|
|
|
|
|
|
|
|
|
|
Other Deductions (Income):
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
—
|
|
|
34.9
|
|
|
10.5
|
|
|
—
|
|
|
45.4
|
|
Interest (income) expense - affiliates, net
|
(16.7
|
)
|
|
12.4
|
|
|
4.3
|
|
|
—
|
|
|
—
|
|
Equity in earnings of subsidiaries
|
(26.0
|
)
|
|
(73.3
|
)
|
|
—
|
|
|
99.3
|
|
|
—
|
|
Miscellaneous other income, net
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
|
(0.6
|
)
|
Total other (income) deductions
|
(42.7
|
)
|
|
(26.0
|
)
|
|
14.2
|
|
|
99.3
|
|
|
44.8
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
42.5
|
|
|
26.0
|
|
|
73.4
|
|
|
(99.3
|
)
|
|
42.6
|
|
Income taxes
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
Net income (loss)
|
$
|
42.5
|
|
|
$
|
26.0
|
|
|
$
|
73.3
|
|
|
$
|
(99.3
|
)
|
|
$
|
42.5
|
|
Condensed Consolidating Statements of Income for the Three Months Ended September 30, 2018
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Operating Revenues:
|
|
|
|
|
|
|
|
|
|
Transportation
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
266.5
|
|
|
$
|
(20.7
|
)
|
|
$
|
245.8
|
|
Storage, parking and lending
|
—
|
|
|
—
|
|
|
21.1
|
|
|
—
|
|
|
21.1
|
|
Other
|
—
|
|
|
—
|
|
|
11.0
|
|
|
—
|
|
|
11.0
|
|
Total operating revenues
|
—
|
|
|
—
|
|
|
298.6
|
|
|
(20.7
|
)
|
|
277.9
|
|
|
|
|
|
|
|
|
|
|
|
Operating Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel and transportation
|
—
|
|
|
—
|
|
|
24.2
|
|
|
(20.7
|
)
|
|
3.5
|
|
Operation and maintenance
|
—
|
|
|
—
|
|
|
46.9
|
|
|
—
|
|
|
46.9
|
|
Administrative and general
|
(0.1
|
)
|
|
—
|
|
|
32.9
|
|
|
—
|
|
|
32.8
|
|
Other operating costs and expenses
|
0.1
|
|
|
—
|
|
|
113.8
|
|
|
—
|
|
|
113.9
|
|
Total operating costs and expenses
|
—
|
|
|
—
|
|
|
217.8
|
|
|
(20.7
|
)
|
|
197.1
|
|
Operating income
|
—
|
|
|
—
|
|
|
80.8
|
|
|
—
|
|
|
80.8
|
|
|
|
|
|
|
|
|
|
|
|
Other Deductions (Income):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
—
|
|
|
29.2
|
|
|
14.3
|
|
|
—
|
|
|
43.5
|
|
Interest (income) expense - affiliates, net
|
(17.5
|
)
|
|
14.0
|
|
|
3.5
|
|
|
—
|
|
|
—
|
|
Equity in earnings of subsidiaries
|
(20.4
|
)
|
|
(63.6
|
)
|
|
—
|
|
|
84.0
|
|
|
—
|
|
Miscellaneous other income, net
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
(0.7
|
)
|
Total other (income) deductions
|
(37.9
|
)
|
|
(20.4
|
)
|
|
17.1
|
|
|
84.0
|
|
|
42.8
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
37.9
|
|
|
20.4
|
|
|
63.7
|
|
|
(84.0
|
)
|
|
38.0
|
|
Income taxes
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
Net income (loss)
|
$
|
37.9
|
|
|
$
|
20.4
|
|
|
$
|
63.6
|
|
|
$
|
(84.0
|
)
|
|
$
|
37.9
|
|
Condensed Consolidating Statements of Income for the Nine Months Ended September 30, 2019
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Operating Revenues:
|
|
|
|
|
|
|
|
|
|
Transportation
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
918.9
|
|
|
$
|
(61.5
|
)
|
|
$
|
857.4
|
|
Storage, parking and lending
|
—
|
|
|
—
|
|
|
69.5
|
|
|
(0.7
|
)
|
|
68.8
|
|
Other
|
—
|
|
|
—
|
|
|
41.8
|
|
|
—
|
|
|
41.8
|
|
Total operating revenues
|
—
|
|
|
—
|
|
|
1,030.2
|
|
|
(62.2
|
)
|
|
968.0
|
|
|
|
|
|
|
|
|
|
|
|
Operating Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Fuel and transportation
|
—
|
|
|
—
|
|
|
72.6
|
|
|
(62.2
|
)
|
|
10.4
|
|
Operation and maintenance
|
—
|
|
|
—
|
|
|
152.6
|
|
|
—
|
|
|
152.6
|
|
Administrative and general
|
—
|
|
|
—
|
|
|
104.2
|
|
|
—
|
|
|
104.2
|
|
Other operating costs and expenses
|
0.3
|
|
|
—
|
|
|
337.6
|
|
|
—
|
|
|
337.9
|
|
Total operating costs and expenses
|
0.3
|
|
|
—
|
|
|
667.0
|
|
|
(62.2
|
)
|
|
605.1
|
|
Operating (loss) income
|
(0.3
|
)
|
|
—
|
|
|
363.2
|
|
|
—
|
|
|
362.9
|
|
|
|
|
|
|
|
|
|
|
|
Other Deductions (Income):
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
—
|
|
|
97.6
|
|
|
38.6
|
|
|
—
|
|
|
136.2
|
|
Interest (income) expense - affiliates, net
|
(54.0
|
)
|
|
46.7
|
|
|
7.3
|
|
|
—
|
|
|
—
|
|
Interest income
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
Equity in earnings of subsidiaries
|
(172.6
|
)
|
|
(316.9
|
)
|
|
—
|
|
|
489.5
|
|
|
—
|
|
Miscellaneous other expense, net
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
Total other (income) deductions
|
(226.6
|
)
|
|
(172.6
|
)
|
|
45.9
|
|
|
489.5
|
|
|
136.2
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
226.3
|
|
|
172.6
|
|
|
317.3
|
|
|
(489.5
|
)
|
|
226.7
|
|
Income taxes
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
Net income (loss)
|
$
|
226.3
|
|
|
$
|
172.6
|
|
|
$
|
316.9
|
|
|
$
|
(489.5
|
)
|
|
$
|
226.3
|
|
Condensed Consolidating Statements of Income for the Nine Months Ended September 30, 2018
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Operating Revenues:
|
|
|
|
|
|
|
|
|
|
Transportation
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
854.7
|
|
|
$
|
(61.9
|
)
|
|
$
|
792.8
|
|
Storage, parking and lending
|
—
|
|
|
—
|
|
|
68.1
|
|
|
(0.3
|
)
|
|
67.8
|
|
Other
|
—
|
|
|
—
|
|
|
38.0
|
|
|
—
|
|
|
38.0
|
|
Total operating revenues
|
—
|
|
|
—
|
|
|
960.8
|
|
|
(62.2
|
)
|
|
898.6
|
|
|
|
|
|
|
|
|
|
|
|
Operating Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel and transportation
|
—
|
|
|
—
|
|
|
74.2
|
|
|
(62.2
|
)
|
|
12.0
|
|
Operation and maintenance
|
—
|
|
|
—
|
|
|
144.2
|
|
|
—
|
|
|
144.2
|
|
Administrative and general
|
(0.2
|
)
|
|
—
|
|
|
100.8
|
|
|
—
|
|
|
100.6
|
|
Other operating costs and expenses
|
0.3
|
|
|
—
|
|
|
334.3
|
|
|
—
|
|
|
334.6
|
|
Total operating costs and expenses
|
0.1
|
|
|
—
|
|
|
653.5
|
|
|
(62.2
|
)
|
|
591.4
|
|
Operating (loss) income
|
(0.1
|
)
|
|
—
|
|
|
307.3
|
|
|
—
|
|
|
307.2
|
|
|
|
|
|
|
|
|
|
|
|
Other Deductions (Income):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
—
|
|
|
91.8
|
|
|
39.1
|
|
|
—
|
|
|
130.9
|
|
Interest (income) expense - affiliates, net
|
(49.3
|
)
|
|
38.1
|
|
|
11.2
|
|
|
—
|
|
|
—
|
|
Interest income
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
Equity in earnings of subsidiaries
|
(128.1
|
)
|
|
(258.0
|
)
|
|
—
|
|
|
386.1
|
|
|
—
|
|
Miscellaneous other income, net
|
—
|
|
|
—
|
|
|
(1.3
|
)
|
|
—
|
|
|
(1.3
|
)
|
Total other (income) deductions
|
(177.4
|
)
|
|
(128.1
|
)
|
|
48.9
|
|
|
386.1
|
|
|
129.5
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
177.3
|
|
|
128.1
|
|
|
258.4
|
|
|
(386.1
|
)
|
|
177.7
|
|
Income taxes
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
Net income (loss)
|
$
|
177.3
|
|
|
$
|
128.1
|
|
|
$
|
258.0
|
|
|
$
|
(386.1
|
)
|
|
$
|
177.3
|
|
Condensed Consolidating Statements of Comprehensive Income for the Three Months Ended September 30, 2019
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Net income (loss)
|
$
|
42.5
|
|
|
$
|
26.0
|
|
|
$
|
73.3
|
|
|
$
|
(99.3
|
)
|
|
$
|
42.5
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassification adjustment transferred
to Net income from cash flow hedges
|
0.3
|
|
|
0.3
|
|
|
0.1
|
|
|
(0.4
|
)
|
|
0.3
|
|
Pension and other postretirement
benefit costs, net of tax
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
|
(1.0
|
)
|
|
0.5
|
|
Total Comprehensive Income (Loss)
|
$
|
43.3
|
|
|
$
|
26.8
|
|
|
$
|
73.9
|
|
|
$
|
(100.7
|
)
|
|
$
|
43.3
|
|
Condensed Consolidating Statements of Comprehensive Income for the Three Months Ended September 30, 2018
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Net income (loss)
|
$
|
37.9
|
|
|
$
|
20.4
|
|
|
$
|
63.6
|
|
|
$
|
(84.0
|
)
|
|
$
|
37.9
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassification adjustment transferred
to Net income from cash flow hedges
|
0.2
|
|
|
0.2
|
|
|
0.1
|
|
|
(0.3
|
)
|
|
0.2
|
|
Pension and other postretirement
benefit costs, net of tax
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
0.2
|
|
|
(0.1
|
)
|
Total Comprehensive Income (Loss)
|
$
|
38.0
|
|
|
$
|
20.5
|
|
|
$
|
63.6
|
|
|
$
|
(84.1
|
)
|
|
$
|
38.0
|
|
Condensed Consolidating Statements of Comprehensive Income for the Nine Months Ended September 30, 2019
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Net income (loss)
|
$
|
226.3
|
|
|
$
|
172.6
|
|
|
$
|
316.9
|
|
|
$
|
(489.5
|
)
|
|
$
|
226.3
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassification adjustment transferred
to Net income from cash flow hedges
|
0.7
|
|
|
0.7
|
|
|
0.5
|
|
|
(1.2
|
)
|
|
0.7
|
|
Pension and other postretirement
benefit costs, net of tax
|
2.9
|
|
|
2.9
|
|
|
2.9
|
|
|
(5.8
|
)
|
|
2.9
|
|
Total Comprehensive Income (Loss)
|
$
|
229.9
|
|
|
$
|
176.2
|
|
|
$
|
320.3
|
|
|
$
|
(496.5
|
)
|
|
$
|
229.9
|
|
Condensed Consolidating Statements of Comprehensive Income for the Nine Months Ended September 30, 2018
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Net income (loss)
|
$
|
177.3
|
|
|
$
|
128.1
|
|
|
$
|
258.0
|
|
|
$
|
(386.1
|
)
|
|
$
|
177.3
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassification adjustment transferred
to Net income from cash flow hedges
|
1.0
|
|
|
1.0
|
|
|
0.5
|
|
|
(1.5
|
)
|
|
1.0
|
|
Pension and other postretirement
benefit costs, net of tax
|
1.4
|
|
|
1.4
|
|
|
1.4
|
|
|
(2.8
|
)
|
|
1.4
|
|
Total Comprehensive Income (Loss)
|
$
|
179.7
|
|
|
$
|
130.5
|
|
|
$
|
259.9
|
|
|
$
|
(390.4
|
)
|
|
$
|
179.7
|
|
Condensed Consolidating Statements of Cash Flow for the Nine Months Ended September 30, 2019
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Net cash provided by (used in)
operating activities
|
$
|
53.6
|
|
|
$
|
(129.6
|
)
|
|
$
|
611.8
|
|
|
$
|
—
|
|
|
$
|
535.8
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
—
|
|
|
—
|
|
|
(276.0
|
)
|
|
—
|
|
|
(276.0
|
)
|
Proceeds from sale of operating assets
|
—
|
|
|
—
|
|
|
2.3
|
|
|
—
|
|
|
2.3
|
|
Advances to affiliates, net
|
20.0
|
|
|
30.8
|
|
|
20.7
|
|
|
(74.6
|
)
|
|
(3.1
|
)
|
Net cash provided by (used in)
investing activities
|
20.0
|
|
|
30.8
|
|
|
(253.0
|
)
|
|
(74.6
|
)
|
|
(276.8
|
)
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt, net of
issuance cost
|
—
|
|
|
495.2
|
|
|
—
|
|
|
—
|
|
|
495.2
|
|
Repayment of borrowings from long-
term debt
|
—
|
|
|
(350.0
|
)
|
|
—
|
|
|
—
|
|
|
(350.0
|
)
|
Proceeds from borrowings on revolving
credit agreement
|
—
|
|
|
—
|
|
|
475.0
|
|
|
—
|
|
|
475.0
|
|
Repayment of borrowings on revolving
credit agreement
|
—
|
|
|
—
|
|
|
(795.0
|
)
|
|
—
|
|
|
(795.0
|
)
|
Principal payment of finance lease
obligation
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
(0.5
|
)
|
Advances from affiliates, net
|
3.1
|
|
|
(43.8
|
)
|
|
(30.8
|
)
|
|
74.6
|
|
|
3.1
|
|
Distributions paid
|
(76.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(76.7
|
)
|
Net cash (used in) provided by
financing activities
|
(73.6
|
)
|
|
101.4
|
|
|
(351.3
|
)
|
|
74.6
|
|
|
(248.9
|
)
|
|
|
|
|
|
|
|
|
|
|
Increase in cash and cash equivalents
|
—
|
|
|
2.6
|
|
|
7.5
|
|
|
—
|
|
|
10.1
|
|
Cash and cash equivalents at
beginning of period
|
0.3
|
|
|
1.6
|
|
|
1.7
|
|
|
—
|
|
|
3.6
|
|
Cash and cash equivalents at
end of period
|
$
|
0.3
|
|
|
$
|
4.2
|
|
|
$
|
9.2
|
|
|
$
|
—
|
|
|
$
|
13.7
|
|
Condensed Consolidating Statements of Cash Flow for the Nine Months Ended September 30, 2018
(Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated Boardwalk Pipeline Partners, LP
|
Net cash provided by (used in)
operating activities
|
$
|
48.8
|
|
|
$
|
(124.6
|
)
|
|
$
|
531.1
|
|
|
$
|
—
|
|
|
$
|
455.3
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
—
|
|
|
—
|
|
|
(354.8
|
)
|
|
—
|
|
|
(354.8
|
)
|
Proceeds from sale of operating assets
|
—
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
Advances to affiliates, net
|
27.7
|
|
|
44.3
|
|
|
(303.7
|
)
|
|
231.7
|
|
|
—
|
|
Net cash provided by (used in)
investing activities
|
27.7
|
|
|
44.3
|
|
|
(657.6
|
)
|
|
231.7
|
|
|
(353.9
|
)
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayment of borrowings from long-term
debt
|
—
|
|
|
(185.0
|
)
|
|
—
|
|
|
—
|
|
|
(185.0
|
)
|
Proceeds from borrowings on revolving
credit agreement
|
—
|
|
|
—
|
|
|
525.0
|
|
|
—
|
|
|
525.0
|
|
Repayment of borrowings on revolving
credit agreement
|
—
|
|
|
—
|
|
|
(355.0
|
)
|
|
—
|
|
|
(355.0
|
)
|
Principal payment of finance lease
obligation
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
Advances from affiliates, net
|
0.1
|
|
|
276.3
|
|
|
(44.6
|
)
|
|
(231.7
|
)
|
|
0.1
|
|
Distributions paid
|
(76.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(76.7
|
)
|
Net cash (used in) provided by
financing activities
|
(76.6
|
)
|
|
91.3
|
|
|
125.0
|
|
|
(231.7
|
)
|
|
(92.0
|
)
|
|
|
|
|
|
|
|
|
|
|
(Decrease) increase in cash and cash
equivalents
|
(0.1
|
)
|
|
11.0
|
|
|
(1.5
|
)
|
|
—
|
|
|
9.4
|
|
Cash and cash equivalents at
beginning of period
|
0.3
|
|
|
4.6
|
|
|
12.7
|
|
|
—
|
|
|
17.6
|
|
Cash and cash equivalents at
end of period
|
$
|
0.2
|
|
|
$
|
15.6
|
|
|
$
|
11.2
|
|
|
$
|
—
|
|
|
$
|
27.0
|
|